<PAGE>
As filed with the Securities and Exchange Commission on March 26, 1997
Registration No. 333-21297
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
RIGGS NATIONAL CORPORATION RIGGS CAPITAL
(Exact name of registrant as specified (Exact name of registrant as specified
in its Charter) in its Trust Agreement)
Delaware Delaware
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
52-1217953 To Be Applied For
(I.R.S. Employer Identification Number) (I.R.S. Employer Identification Number)
1503 Pennsylvania Avenue, N.W. c/o RIGGS NATIONAL CORPORATION
Washington, D.C. 20005 1503 Pennsylvania Avenue, N.W.
(301) 887-6000 Washington, D.C. 20005
(Address, including zip code, (301) 887-6000
and telephone number, including (Address, including zip code,
area code, of registrant's and telephone number, including
principal executive offices) area code, of registrant's
principal executive offices)
----------------
Linda A. Madrid, Esq.
Riggs National Corporation
800 17th Street, N.W.
Washington, D.C. 20006
(301) 887-6000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------
Copy to:
Robert H. Craft, Jr.
Sullivan & Cromwell
1701 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
----------------
Approximate date of commencement of proposed sale of securities to the public:
As soon as practicable after the effective date of this registration statement.
----------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_] ___________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration 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. [_]
----------------
The registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrants
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
RIGGS CAPITAL
CROSS REFERENCE SHEET
(Pursuant to Item 501(b) of Regulation S-K)
<TABLE>
<CAPTION>
Form S-3 Item Number and Captions Heading or Location in Prospectus
- ---------------------------------------------------- -------------------------------------------
<S> <C>
1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus.......... Facing Page; Cross Reference Sheet;
Outside Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages of
Prospectus...................................... Inside Front and Outside Back Cover Pages
of Prospectus; Available Information;
Incorporation of Certain Documents by
Reference
3. Summary Information, Risk Factors and Ratio
of Earnings to Fixed Charges.................... Prospectus Summary; Risk Factors; Ratio of
Earnings to Fixed Charges and Ratio of
Earnings to Combined Fixed Charges and
Preferred Stock Dividend Requirements
4. Use of Proceeds................................. Use of Proceeds
5. Determination of Offering Price................. *
6. Dilution........................................ *
7. Selling Security Holders........................ Selling Securityholders
8. Plan of Distribution............................ Plan of Distribution
9. Description of Securities to be Registered...... Description of Capital Stock
10. Interests of Named Experts and Counsel.......... Validity of Securities
11. Material Changes................................ Description of the Series A Preferred
Securities; Description of the Series A
Subordinated Debentures; Description of the
Series A Guarantee; Relationship Among the
Series A Preferred Securities, the Series A
Subordinated Debentures, the Expense
Agreement and the Series A Guarantee
12. Incorporation of Certain Information by
Reference....................................... Incorporation of Certain Documents
by Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities..................................... *
</TABLE>
- --------------------
* Not applicable.
-2-
<PAGE>
$150,000,000
Riggs National Corporation
Junior Subordinated Deferrable
Interest Debentures
Riggs Capital
8 5/8% Trust Preferred Securities, Series A
(Liquidation Amount $1,000 per Preferred Security)
150,000 Preferred Securities
Fully and Unconditionally Guaranteed by
Riggs National Corporation
The 8 5/8% Trust Preferred Securities, Series A (the "Series A Preferred
Securities"), offered hereby represent beneficial interests in Riggs Capital, a
trust formed under the laws of the State of Delaware (the "Series A Issuer").
Riggs National Corporation, a Delaware corporation (the "Corporation"), is the
owner of all of the beneficial interests represented by common securities of the
Series A Issuer (the "Series A Common Securities" and, collectively with the
Series A Preferred Securities, the "Series A Securities"). The Bank of New York
is the Property Trustee of the
(Continued on the following pages)
See "Risk Factors" beginning on page 15 hereof for certain information
relevant to an investment in the Series A Preferred Securities.
THESE SECURITIES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A
BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE
------------------------
The Series A Preferred Securities offered hereby are being offered for
sale from time to time by the selling securityholders named herein (the "Selling
Securityholders"), and neither the Corporation nor the Series A Issuer will
receive any of the proceeds from such sales. The Series A Preferred Securities
may be sold in the over-the-counter market or on any national securities
exchange or automated quotation system on which the Series A Preferred
Securities may be listed or quoted in the future, in negotiated transactions,
through the writing of options on shares or a combination of such methods of
sale, at market prices prevailing at the time of sale, at prices related thereto
or at negotiated prices. Each Selling Securityholder may sell shares directly to
other purchasers, through agents or through broker-dealers, which may receive
compensation in the form of underwriting discounts, concessions or commissions
(and such compensation may be in excess of customary commissions). See "Plan of
Distribution".
The date of this Prospectus is March 26, 1997.
<PAGE>
(continued from the previous page)
Series A Issuer. The Series A Issuer exists for the sole purpose of issuing the
Series A Securities and investing the proceeds from the sale thereof in
$154,640,000 aggregate principal amount of 8 5/8% Junior Subordinated Deferrable
Interest Debentures, Series A (the "Series A Subordinated Debentures"), to be
issued by the Corporation. The Series A Subordinated Debentures will mature on
December 31, 2026 ( the "Stated Maturity"). The Series A Preferred Securities
have a preference under certain circumstances with respect to cash distributions
and amounts payable on liquidation, redemption or otherwise over the Series A
Common Securities. See "Description of the Series A Preferred Securities--
Subordination of the Series A Common Securities".
The Series A Preferred Securities were originally issued by the Series A
Issuer to Dillon, Read & Co. Inc. and Friedman, Billings, Ramsey & Co., Inc.
(collectively, the "Initial Purchasers") and were subsequently resold by the
Initial Purchasers to qualified institutional buyers in reliance on Rule 144A
under the Securities Act of 1933, as amended (the "Securities Act"), and to a
limited number of institutional investors that are accredited investors within
the meaning of Rule 501(a) under the Securities Act.
The Series A Preferred Securities are listed on the Private Offerings,
Resales and Trading through Automated Linkages ("PORTAL") market of the National
Association of Securities Dealers, Inc.
Holders of the Series A Preferred Securities are entitled to receive
preferential cumulative cash distributions accumulating from December 13, 1996
and payable semi-annually in arrears on June 30 and December 31 of each year,
commencing June 30, 1997, at the annual rate of 8 5/8% of the Liquidation Amount
(as defined herein) of $1,000 per Series A Preferred Security ("Distributions").
Subject to certain exceptions, the Corporation has the right to defer payment of
interest on the Series A Subordinated Debentures at any time or from time to
time for a period not exceeding 10 consecutive semi-annual periods with respect
to each deferral period (each, an "Extension Period"), provided that no
Extension Period may extend beyond the Stated Maturity of the Series A
Subordinated Debentures. Upon the termination of any such Extension Period and
the payment of all interest then accrued and unpaid (together with interest
thereon at the rate of 8 5/8%, compounded semi-annually, to the extent permitted
by applicable law), the Corporation may elect to begin a new Extension Period
subject to the requirements set forth herein. If interest payments on the Series
A Subordinated Debentures are so deferred, Distributions on the Series A
Preferred Securities will also be deferred, and the Corporation will not be
permitted, subject to certain exceptions described herein, to declare or pay any
cash distributions with respect to the capital stock of the Corporation or debt
securities of the Corporation that rank pari passu with or junior to the Series
A Subordinated Debentures. During an Extension Period, interest on the Series A
Subordinated Debentures will continue to accrue (and the amount of Distributions
to which holders of the Series A Preferred Securities are entitled will
accumulate) at the rate of 8 5/8% per annum, compounded semi-annually, and
holders of the Series A Preferred Securities will be required to accrue interest
income for United States federal income tax purposes. See "Description of the
Series A Subordinated Debentures--Right to Defer Interest Payment Obligation"
and "Certain Federal Income Tax Consequences--Original Issue Discount".
The Corporation has, through the Series A Guarantee, the Trust Agreement,
the Series A Subordinated Debentures, the Indenture and the Expense Agreement
(each as defined herein), taken together, fully, irrevocably and unconditionally
guaranteed all of the Series A Issuer's obligations under the Series A Preferred
Securities. See "Relationship Among the Series A Preferred Securities, the
Series A Subordinated Debentures, the Expense Agreement and the Series A
Guarantee--Full and Unconditional Guarantee". The Series A Guarantee of the
Corporation (the "Series A Guarantee") guarantees the payment of Distributions
and payments on liquidation or redemption of the Series A Preferred Securities,
but only in each case to the extent of funds held by the Series A Issuer, as
described herein. See "Description of the Series A Guarantee". If the
Corporation does not make interest payments on the Series A Subordinated
Debentures held by the Series A Issuer, the Series A Issuer will have
insufficient funds to pay Distributions on the Series A Preferred Securities.
The Series A Guarantee does not cover payment of Distributions when the Series A
Issuer does not have sufficient funds to pay such Distributions. In such event,
a holder of the Series A Preferred Securities may institute a legal proceeding
directly against the Corporation to enforce payment of such Distributions to
such holder. See "Description of the Series A Subordinated Debentures--
Enforcement of Certain Rights by Holders of the Series A Preferred Securities".
The obligations of the Corporation under the Series A Guarantee and the Series A
Subordinated Debentures are subordinate and junior in right of payment to all
Senior Debt (as defined in "Description of the Series A Subordinated
Debentures--Subordination") of the Corporation.
4
<PAGE>
(continued from the previous page)
The Series A Preferred Securities are subject to mandatory redemption, in
whole or in part, upon repayment of the Series A Subordinated Debentures at
their Stated Maturity (as defined herein) or their earlier redemption. Subject
to the Corporation having received prior approval of the Board of Governors of
the Federal Reserve System (the "Federal Reserve") to do so if then required
under applicable capital guidelines or policies, the Series A Subordinated
Debentures are redeemable prior to their Stated Maturity at the option of the
Corporation (i) on or after December 31, 2006, in whole at any time or in part
from time to time at a redemption price (the "Optional Redemption Price") equal
to 104.313% of the principal amount thereof on December 31, 2006, declining
ratably on each December 31 thereafter to 100% on or after December 31, 2016,
plus accrued and unpaid interest thereon to the date of redemption, or (ii) at
any time prior to December 31, 2006, in whole (but not in part), within 90 days
following the occurrence of a Tax Event (as defined herein) or Capital Treatment
Event (as defined herein), at a redemption price (the "Tax or Capital Event
Redemption Price") equal to the Make-Whole Amount (as defined herein) plus, in
each case, accrued and unpaid interest on the Series A Subordinated Debentures
to the date fixed for redemption. See "Description of the Series A Subordinated
Debentures--Optional Redemption" and "Description of the Series A Subordinated
Debentures--Tax Event or Capital Treatment Event Redemption".
The Corporation has the right at any time to terminate the Series A Issuer
and cause the Series A Subordinated Debentures to be distributed to the holders
of the Series A Preferred Securities in exchange therefor upon liquidation of
the Series A Issuer, subject to the Corporation having received prior approval
of the Federal Reserve to do so if then required under applicable capital
guidelines or policies. See "Description of the Series A Preferred Securities--
Liquidation of the Series A Issuer and Distribution of the Series A Subordinated
Debentures to Holders".
In the event of the termination of the Series A Issuer, after satisfaction
of liabilities to creditors of the Series A Issuer as required by applicable
law, the holders of the Series A Preferred Securities will be entitled to
receive a Liquidation Amount of $1,000 per Series A Preferred Security plus
accumulated and unpaid Distributions thereon to the date of payment, which will
be in the form of a distribution of such amount in Series A Subordinated
Debentures, subject to certain exceptions. See "Description of the Series A
Preferred Securities--Liquidation Distribution upon Termination".
The Series A Subordinated Debentures are unsecured and subordinated to all
Senior Debt of the Corporation. At September 30, 1996, the aggregate outstanding
Senior Debt of the Corporation was approximately $192 million. See "Description
of the Series A Subordinated Debentures--Subordination".
The Series A Preferred Securities will be represented by global
certificates registered in the name of The Depository Trust Company ("DTC") or
its nominee, except as set forth below. Beneficial interests in the Series A
Preferred Securities will be shown on, and transfers thereof will be effected
only through, records maintained by participants in DTC. Series A Preferred
Securities in certificated form will not be issued in exchange for the global
certificates. See "Book-Entry Issuance".
IN CONNECTION WITH A PARTICULAR OFFERING, PARTICIPATING UNDERWRITERS
(IF ANY) MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE
MARKET PRICE OF THE SERIES A PREFERRED SECURITIES OFFERED HEREBY AT A LEVEL
ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS
MAY BE EFFECTED IN PORTAL OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
5
<PAGE>
NOTICE TO NEW HAMPSHIRE RESIDENTS
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A
LICENSE HAS BEEN FILED UNDER THIS CHAPTER WITH THE STATE OF NEW HAMPSHIRE NOR
THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN
THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE THAT
ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER
ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A
SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY
WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO,
ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE
MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER, OR CLIENT ANY REPRESENTATION
INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the regional offices of the Commission located at
7 World Trade Center, 13th Floor, Suite 1300, New York, New York 10048 and Suite
1400, Citicorp Center, 14th Floor, 500 West Madison Street, Chicago, Illinois
60661. Copies of such material can also be obtained at prescribed rates by
writing to the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. Such material may also be accessed electronically
by means of the Commission's home page on the Internet at http://www.sec.gov.
Such material can also be inspected and copied at the office of the Nasdaq
National Market, 1735 K Street, N.W., Washington, D.C. 20006.
The Corporation and the Series A Issuer have filed with the Commission a
Registration Statement on Form S-3 (together with all amendments and exhibits
thereto, the "Registration Statement") under the Securities Act with respect to
the securities offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement, certain portions of which
have been omitted as permitted by the rules and regulations of the Commission.
For further information with respect to the Corporation and the securities
offered hereby, reference is made to the Registration Statement and the exhibits
and the financial statements, notes and schedules filed as a part thereof or
incorporated by reference therein, which may be inspected at the public
reference facilities of the Commission at the addresses set forth above or
through the Commission's homepage on the Internet. Statements made in this
Prospectus concerning the contents of any documents referred to herein are not
necessarily complete, and in each instance are qualified in all respects by
reference to the copy of such document filed as an exhibit to the Registration
Statement.
No separate financial statements of the Series A Issuer have been included
herein. The Corporation and the Series A Issuer do not consider that such
financial statements would be material to holders of the Series A Preferred
Securities because the Series A Issuer is a newly-formed special purpose entity,
has no operating history or independent operations and is not engaged in and
does not propose to engage in any activity other than holding as trust assets
the Series A Subordinated Debentures and issuing the Series A Securities.
Furthermore, taken together, the Corporation's obligations under the Series A
Junior Subordinated Debentures, the Indenture, the Guarantee, the Expense
Agreement and the Trust Agreement (each as defined herein) provide, in the
aggregate, a full, irrevocable and unconditional guarantee of payments of
Distributions and other amounts due on the Series A Preferred Securities. See
"Description of the Series A Preferred Securities", "Description of the Series A
Subordinated Debentures" and "Description of the Series A Guarantee".
6
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Corporation with the Commission are
incorporated into this Prospectus by reference:
1. The Corporation's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995.
2. The Corporation's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1996, June 30, 1996 and September 30, 1996 as amended by Form 10-QA
for the quarter ended September 30, 1996.
All reports and proxy statements filed by the Corporation with the
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act
after the date of this Prospectus and prior to the termination of this offering
shall likewise be deemed to be incorporated in this Prospectus and made a
constituent part hereof by reference from the respective dates of filing. Any
statement contained herein, or in a document all or a portion of which is
incorporated by reference herein, shall be deemed to be modified or superseded
for purposes of the Registration Statement and this Prospectus to the extent
that a statement contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of the
Registration Statement or this Prospectus.
Any statements contained herein or in a document all or a portion of which
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of the Registration Statement to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement.
The Corporation will provide, without charge, to any person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference herein (other
than exhibits not specifically incorporated by reference into the text of such
documents). Requests for such documents should be directed to Ms. Linda Madrid
at the corporate headquarters of the Corporation, 1503 Pennsylvania Avenue,
N.W., Washington, D.C. 20005 (telephone no. (301) 887-6000).
7
<PAGE>
PROSPECTUS SUMMARY
This summary is qualified by the more detailed information and financial
statements in the Corporation's Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q and Amended Quarterly Report on Form 10-QA, which are incorporated by
reference in this Prospectus. As used herein, (i) the "Indenture" means the
Series A Subordinated Indenture, as amended and supplemented from time to time,
between the Corporation and The Bank of New York, as trustee (the "Debenture
Trustee"), and (ii) the "Trust Agreement" means the Amended and Restated Trust
Agreement relating to the Series A Issuer among the Corporation, as depositor,
The Bank of New York, as property trustee (the "Property Trustee"), The Bank of
New York (Delaware), as Delaware trustee (the "Delaware Trustee"), and the
Administrative Trustees named therein (collectively with the Property Trustee
and Delaware Trustee, the "Series A Issuer Trustees").
The Corporation
The Corporation is a Washington, D.C.-based bank holding company registered
under the Bank Holding Company Act of 1956, as amended (the "BHCA"), which
operates throughout the Washington, D.C. metropolitan area. At September 30,
1996, the Corporation had total assets of $4.7 billion. The Corporation also has
banking operations or separate subsidiaries in Miami, Florida; London, England;
Paris, France; and Nassau, Bahamas.
The Corporation's principal subsidiary is Riggs Bank N.A. ("Riggs Bank"), a
national banking association founded in 1836 and incorporated under the national
banking laws of the United States in 1896. In early 1996, the Corporation
consolidated its three separate banking subsidiaries: The Riggs National Bank of
Washington, D.C., The Riggs National Bank of Maryland and The Riggs National
Bank of Virginia under the name Riggs Bank N.A. At September 30, 1996, Riggs
Bank had assets of $4.7 billion, deposits of $3.8 billion and stockholders'
equity of $513.7 million. Riggs Bank operates 57 branches and an investment
advisory subsidiary in the Washington, D.C. metropolitan area, a commercial bank
in London, an Edge Act subsidiary in Miami, a branch office in London, a bank in
Paris, and a bank and trust company in the Bahamas.
Riggs AP Bank Limited ("Riggs AP"), a merchant bank located in London, is a
wholly-owned subsidiary of Riggs Bank which provides traditional corporate
banking services, commercial property financing, private banking services and
trade finance. At September 30, 1996, Riggs AP had total assets of $282.1
million, representing 6.0% of the Corporation's total assets, and had loans of
$189.7 million, representing 81.8% of the Corporation's total foreign loans and
7.3% of its total loans.
The Corporation is a Delaware corporation with its principal office at 1503
Pennsylvania Avenue, N.W., Washington, D.C. 20005. Its telephone number is (301)
887-6000.
The Series A Issuer
The Series A Issuer is a statutory business trust formed under Delaware law
pursuant to (i) the Trust Agreement executed by the Corporation, as depositor,
The Bank of New York, as Property Trustee, The Bank of New York (Delaware), as
Delaware Trustee, and the Administrative Trustees named therein and (ii) the
filing of a certificate of trust with the Delaware Secretary of State on
November 15, 1996. Prior to the issuance of the Series A Preferred Securities,
the trust agreement was amended and restated in its entirety as described herein
(as so amended and restated, the "Trust Agreement"). All of the Series A Common
Securities are owned by the Corporation. The Corporation has acquired Series A
Common Securities in an aggregate Liquidation Amount equal to 3% of the total
capital of the Series A Issuer. The Series A Issuer exists for the exclusive
purposes of (i) issuing and selling the Series A Securities, (ii) using the
proceeds from the sale of the Series A Securities to acquire Series A
Subordinated Debentures issued by the Corporation and (iii) engaging in only
those other activities necessary or
8
<PAGE>
incidental thereto (such as registering the transfer of the Series A
Securities). Accordingly, the Series A Subordinated Debentures are the sole
assets of the Series A Issuer, and payments under the Series A Subordinated
Debentures are the sole revenues of the Series A Issuer. The principal executive
office of the Series A Issuer is 1503 Pennsylvania Avenue, N.W., Washington,
D.C. 20005, and its telephone number is (301) 887-6000.
The Offering
The Series A Issuer................... Riggs Capital, a Delaware statutory
business trust (the "Series A
Issuer"). The sole assets of the
Series A Issuer are the Series A
Subordinated Debentures.
Securities Offered.................... 8 5/8% Trust Preferred Securities,
Series A (the "Series A Preferred
Securities"), evidencing undivided
beneficial interests in the assets of
the Series A Issuer. The Series A
Preferred Securities offered hereby
were originally issued by the Series
A Issuer to the Initial Purchasers
and were subsequently resold by the
Initial Purchasers to qualified
institutional buyers in reliance on
Rule 144A under the Securities Act
and to a limited number of
institutional investors that are
accredited investors within the
meaning of Rule 501(a) under the
Securities Act in December 1996 (the
"December Securities Sale").
Distributions......................... Holders of the Series A Preferred
Securities are entitled to receive
cumulative cash Distributions at an
annual rate of 8 5/8% of the
Liquidation Amount of $1,000 per
Series A Preferred Security,
accumulating from December 13, 1996
and payable semi-annually in arrears
on June 30 and December 31 of each
year, commencing on June 30, 1997.
The distribution rate and the
distribution and other payment dates
for the Series A Preferred Securities
will correspond to the interest rate
and interest and other payment dates
on the Series A Subordinated
Debentures. See "Description of the
Series A Preferred Securities".
Series A Subordinated Debentures...... The Series A Issuer has invested the
proceeds from the issuance of the
Series A Securities in an equivalent
amount of the Series A Subordinated
Debentures. The Series A Subordinated
Debentures will mature on December
31, 2026. The Series A Subordinated
Debentures rank subordinate and
junior in right of payment to all
Senior Debt of the Corporation, which
is generally defined to include all
other current and future indebtedness
of the Corporation (except trade and
other liabilities arising in the
ordinary course of business), unless
such other indebtedness expressly
provides that it is not superior in
right of payment to the Series A
Debentures. At
9
<PAGE>
September 30, 1996, the Corporation had
approximately $192 million of
outstanding Senior Debt. In addition,
because the Corporation is a holding
company, the Corporation's obligations
under the Series A Subordinated
Debentures are effectively subordinated
to all existing and future liabilities
and obligations of its subsidiaries. See
"Risk Factors--Ranking of Subordinated
Obligations Under the Series A Guarantee
and the Series A Subordinated
Debentures" and "--Holding Company
Liquidity" and "Description of the
Series A Subordinated Debentures--
Subordination".
Series A Guarantee.................... Payments of Distributions out of
moneys held by the Series A Issuer,
and payments on liquidation of the
Series A Issuer or the redemption of
the Series A Preferred Securities,
are guaranteed by the Corporation to
the extent the Series A Issuer has
funds available therefor. The
Corporation's obligations under the
Series A Guarantee, taken together
with its obligations under the Series
A Subordinated Debentures, the
Indenture and the Expense Agreement,
constitute a full and unconditional
guarantee of all of the Series A
Issuer's obligations under the Series
A Preferred Securities. See
"Description of the Series A
Guarantee" and "Relationship Among
the Series A Preferred Securities,
the Series A Subordinated Debentures,
the Expense Agreement and the Series
A Guarantee". The obligations of the
Corporation under the Series A
Guarantee are subordinate and junior
in right of payment to all Senior
Debt of the Corporation. See "Risk
Factors--Ranking of Subordinated
Obligations Under the Series A
Guarantee and the Series A
Subordinated Debentures" and
"Description of the Series A
Guarantee".
Right to Defer Interest............... So long as no event of default under
the Indenture has occurred and is
continuing, the Corporation has the
right under the Indenture at any time
during the term of the Series A
Subordinated Debentures to defer the
payment of interest at any time or
from time to time for a period not
exceeding 10 consecutive semi-annual
periods with respect to each
Extension Period, provided that no
Extension Period may extend beyond
the Stated Maturity of the Series A
Subordinated Debentures. At the end
of such Extension Period, the
Corporation must pay all interest
then accrued and unpaid (together
with interest thereon at the annual
rate of 8 5/8%, compounded
semi-annually, to the extent
permitted by applicable law). During
an
10
<PAGE>
Extension Period, interest will
continue to accrue and holders of the
Series A Subordinated Debentures (or
holders of the Series A Preferred
Securities, while outstanding) will
be required to accrue interest income
for United States federal income tax
purposes.
During any such Extension Period, the
Corporation may not, and may not
permit any subsidiary of the
Corporation to, (i) declare or pay
any dividends or distributions on, or
redeem, purchase, acquire or make a
liquidation payment with respect to,
any of the Corporation's capital
stock or (ii) make any payment of
principal, interest or premium, if
any, on or repay, repurchase or
redeem any debt securities of the
Corporation that rank pari passu with
or junior in right of payment to the
Series A Subordinated Debentures or
make any guarantee payments with
respect to any guarantee by the
Corporation of the debt securities of
any subsidiary of the Corporation if
such guarantee ranks pari passu with
or junior in right of payment to the
Series A Subordinated Debentures
(other than (a) dividends or
distributions in common stock of the
Corporation, (b) any declaration of a
dividend in connection with the
implementation of a stockholders'
rights plan, the issuance of stock
under any such plan in the future or
the redemption or repurchase of any
such rights pursuant thereto, (c)
payments under the Series A Guarantee
and (d) purchases of common stock
related to the issuance of common
stock or rights under any of the
Corporation's benefit plans for its
directors, officers or employees).
Prior to the termination of any such
Extension Period, the Corporation may
further defer the payment of interest
on the Series A Subordinated
Debentures, provided that no
Extension Period may exceed 10
consecutive semi-annual periods or
extend beyond the Stated Maturity of
the Series A Subordinated Debentures.
There is no limitation on the number
of times that the Corporation may
elect to begin an Extension Period.
See "Description of the Series A
Subordinated Debentures--Right to
Defer Interest Payment Obligation"
and "Certain Federal Income Tax
Consequences--Original Issue
Discount".
Optional and Tax or Capital Treatment
Event Redemption...................... Subject to the Corporation having
received prior approval of the
Federal Reserve to do so if then
required under applicable capital
guidelines or policies, the Series A
Subordinated Debentures are subject
to redemption prior to their Stated
Maturity at
11
<PAGE>
the option of the Corporation (i) on
or after December 31, 2006, in whole
at any time or in part from time to
time at the Optional Redemption Price
equal to 104.313% of the principal
amount thereof on December 31, 2006,
declining ratably on each December 31
thereafter to 100% on or after
December 31, 2016, plus accrued and
unpaid interest thereon to the date
of redemption, or (ii) at any time
prior to December 31, 2006, in whole
(but not in part), within 90 days
following the occurrence and
continuation of a Tax Event (as
defined herein) or Capital Treatment
Event (as defined herein), at a
redemption price (the "Tax or Capital
Event Redemption Price") equal to the
Make-Whole Amount (as defined herein)
plus accrued and unpaid interest on
the Series A Subordinated Debentures
to the date fixed for redemption.
If the Series A Subordinated
Debentures are redeemed prior to
their Stated Maturity, the Series A
Issuer must apply the proceeds of
such redemption to redeem a Like
Amount (as defined herein) of the
Series A Preferred Securities and the
Series A Common Securities. The
Series A Preferred Securities will be
redeemed upon repayment of the Series
A Subordinated Debentures at their
Stated Maturity. See "Description of
the Series A Preferred
Securities--Redemption".
Distribution of the Series A
Subordinated Debentures upon
Liquidation of the Series A Issuer.... The Corporation has the right at any
time, subject to the prior approval of
the Federal Reserve if then required
under applicable capital guidelines or
policies, to terminate the Series A
Issuer and cause the Series A
Subordinated Debentures to be
distributed to the holders of the Series
A Preferred Securities and the Series A
Common Securities in exchange therefor
upon liquidation of the Series A Issuer.
In the event of the liquidation of the
Series A Issuer, after satisfaction of
the claims of creditors of the Series A
Issuer, if any, as provided by
applicable law, the holders of the
Series A Preferred Securities will be
entitled to receive a Liquidation Amount
of $1,000 per Series A Preferred
Security plus accumulated and unpaid
Distributions thereon to the date of
payment, which may be in the form of a
distribution of a Like Amount (as
defined herein) of the Series A
Subordinated Debentures, subject to
certain exceptions as described herein.
See "Description of the Series A
Preferred
12
<PAGE>
Securities--Liquidation of the Series
A Issuer and Distribution of the
Series A Subordinated Debentures to
Holders".
Use of Proceeds....................... The Corporation will not receive any
proceeds from the sale of the Series
A Preferred Securities offered
hereby; all such proceeds will be
received by the Selling
Securityholders.
Shelf Registration Statement.......... Pursuant to a registration rights
agreement dated December 13, 1996
(the "Registration Rights Agreement")
between the Corporation, the Series A
Issuer and the Initial Purchasers,
the Corporation and the Series A
Issuer have agreed to use their
reasonable best efforts to keep a
shelf registration statement (the
"Shelf Registration Statement") with
respect to the Series A Preferred
Securities, the Series A Guarantee
and the Series A Subordinated
Debentures (together, the
"Registrable Securities") effective
until two years after the date it
is declared effective or such earlier
date as all Registrable Securities
shall have been disposed of or on
which all Registrable Securities held
by persons that are not affiliates of
the Corporation or the Series A
Issuer may be resold without
registration pursuant to Rule 144(k)
under the Securities Act (the
"Effectiveness Period"), subject to
certain exceptions. The Shelf
Registration Statement is generally
intended to permit the Selling
Securityholders to resell from time
to time the Registrable Securities
that they purchased in transactions
which were exempted from the
registration requirements of the
Securities Act. Purchasers of the
Registrable Securities offered
pursuant to this Prospectus will not
have any rights under the
Registration Rights Agreement
(although all of the Registrable
Securities sold pursuant to this
Registration Statement will be freely
tradeable except by purchasers who
are "affiliates" of the Corporation
or the Series A Issuer or
"underwriters" of the Registrable
Securities for purposes of the
Securities Act). The Registration
Statement, of which this Prospectus
is a part, has been filed by the
Corporation and the Series A Issuer
with the Commission in order to meet
the Corporation's and the Series A
Issuer's obligations under the
Registration Rights Agreement. See
"Registration Rights Agreement".
Risk Factors
An investment in the Series A Preferred Securities involves substantial
risks that should be considered by prospective purchasers. In addition, because
holders of the Series A Preferred Securities may receive Series A
13
<PAGE>
Subordinated Debentures on termination of the Series A Issuer, prospective
purchasers of the Series A Preferred Securities are also making an investment
decision with regard to the Series A Subordinated Debentures and should
carefully review all of the information regarding the Series A Subordinated
Debentures contained herein. See "Description of the Series A Subordinated
Debentures" and "Risk Factors".
14
<PAGE>
RISK FACTORS
Prospective purchasers of the Series A Preferred Securities should carefully
review the information contained elsewhere in this Prospectus and should
particularly consider the following matters. In addition, because holders of the
Series A Preferred Securities may receive Series A Subordinated Debentures in
exchange therefor on termination of the Series A Issuer, prospective purchasers
of the Series A Preferred Securities are also making an investment decision with
regard to the Series A Subordinated Debentures and should carefully review all
of the information regarding the Series A Subordinated Debentures contained
herein. See "Description of the Series A Subordinated Debentures".
Ranking of Subordinated Obligations Under the Series A Guarantee and the
Series A Subordinated Debentures
The obligations of the Corporation under the Series A Guarantee issued by the
Corporation for the benefit of the holders of the Series A Preferred Securities
are unsecured and rank subordinate and junior in right of payment to all Senior
Debt of the Corporation, which is generally defined to include all other current
and future indebtedness of the Corporation (except trade and other liabilities
arising in the ordinary course of business), unless such other indebtedness
expressly provides that it is not superior in right of payment to the Series A
Subordinated Debentures. The obligations of the Corporation under the Series A
Subordinated Debentures are subordinate and junior in right of payment to all
such Senior Debt of the Corporation. Because the Corporation is a holding
company, the right of the Corporation to participate in any distribution of
assets of any subsidiary, including Riggs Bank, upon such subsidiary's
liquidation or reorganization or otherwise (and thus the ability of holders of
the Series A Preferred Securities to benefit indirectly from such distribution),
is subject to the prior claims of creditors of that subsidiary, except to the
extent that the Corporation may itself be recognized as a creditor of that
subsidiary. There are various legal limitations on the extent to which certain
of the Corporation's subsidiaries may extend credit, pay dividends or otherwise
supply funds to, or engage in transactions with, the Corporation or certain of
its other subsidiaries. Accordingly, the Series A Subordinated Debentures and
the Series A Guarantee are effectively subordinated to all existing and future
liabilities of the Corporation's subsidiaries, and holders of the Series A
Subordinated Debentures should look only to the assets of the Corporation for
payments on the Series A Subordinated Debentures. See "The Corporation". None of
the Indenture, the Series A Guarantee, the Expense Agreement or the Trust
Agreement places any limitation on the amount of secured or unsecured debt,
including Senior Debt, that may be incurred by the Corporation. See "Description
of the Series A Guarantee--Status of the Series A Guarantee" and "Description of
the Series A Subordinated Debentures--Subordination".
The ability of the Series A Issuer to pay amounts due on the Series A
Preferred Securities is solely dependent upon the Corporation making payments on
the Series A Subordinated Debentures as and when required.
Holding Company Liquidity
As a holding company, the Corporation conducts its operations principally
through its subsidiaries and, therefore, its principal source of cash, other
than its investing and financing activities, is receipt of dividends from Riggs
Bank and the Corporation's other subsidiary banks. However, there are legal
limitations on the source and amount of dividends that a national bank such as
Riggs Bank is permitted to pay. A national bank may pay dividends only to the
extent that retained net profits (including the portion transferred to surplus)
exceed bad debts (as defined by regulation). Moreover, unless a national bank's
surplus fund equals its common capital, dividends may be paid only after 10
percent of its net profits (as defined by regulation) for the specified
preceding period have been transferred to the bank's surplus fund. In addition,
prior approval of the Office of Comptroller of the Currency (the "OCC") is
required if the total of all dividends declared by a national bank in any
calendar year will exceed the sum of that bank's net profits for that year and
its retained net profits for the preceding two calendar years, less any
-15-
<PAGE>
required transfers to either surplus or any fund for retirement of any preferred
stock. The payment of dividends by Riggs Bank may also be affected by other
factors, such as requirements for the maintenance of adequate capital. In
addition, the OCC is authorized to determine, under certain circumstances
relating to the financial condition of a national bank, whether the payment of
dividends would be an unsafe or unsound banking practice and to prohibit payment
thereof.
Right to Defer Interest Payment Obligation; Tax Consequences; Market Price
Consequences
So long as no event of default under the Indenture has occurred or is
continuing, the Corporation has the right under the Indenture to defer the
payment of interest on the Series A Subordinated Debentures, at any time or from
time to time, for a period not exceeding 10 consecutive semi-annual periods with
respect to each Extension Period, provided that no Extension Period may extend
beyond the Stated Maturity of the Series A Subordinated Debentures. As a
consequence of any such deferral, semi-annual Distributions on the Series A
Preferred Securities by the Series A Issuer will also be deferred (and the
amount of Distributions to which holders of the Series A Preferred Securities
are entitled will accumulate additional Distributions thereon at the rate of
8/5//8% per annum, compounded semi-annually from the relevant payment date for
such Distributions) during any such Extension Period. During any such Extension
Period, the Corporation may not, and may not permit any subsidiary of the
Corporation to, (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Corporation's capital stock, (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Corporation that rank pari passu with or junior in interest to the Series A
Subordinated Debentures or (iii) make any guarantee payments with respect to any
guarantee by the Corporation of the debt securities of any subsidiary of the
Corporation if such guarantee ranks pari passu with or junior in interest to the
Series A Subordinated Debentures (other than (a) dividends or distributions in
common stock of the Corporation, (b) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of stock
under any such plan in the future or the redemption or repurchase of any such
rights pursuant thereto, (c) payments under the Series A Guarantee and (d)
purchases of common stock related to the issuance of common stock or rights
under any of the Corporation's benefit plans for its directors, officers or
employees). Prior to the termination of any such Extension Period, the
Corporation may further defer the payment of interest, provided that no
Extension Period may exceed 10 consecutive semi-annual periods or extend beyond
the Stated Maturity of the Series A Subordinated Debentures. Upon the
termination of any Extension Period and the payment of all interest then accrued
and unpaid on the Series A Subordinated Debentures (together with interest
thereon at the annual rate of 8 5/8%, compounded semi-annually from the
relevant payment date for such interest, to the extent permitted by applicable
law), the Corporation may elect to begin a new Extension Period subject to the
above requirements. There is no limitation on the number of times that the
Corporation may elect to begin an Extension Period. See "Description of the
Series A Preferred Securities--Distributions" and "Description of the Series A
Subordinated Debentures--Right to Defer Interest Payment Obligation".
Should an Extension Period occur, a holder of the Series A Preferred
Securities will continue to accrue income (in the form of original issue
discount) for United States federal income tax purposes in respect of its pro
rata share of the Series A Subordinated Debentures held by the Series A Issuer.
As a result, a holder of the Series A Preferred Securities will be required to
include such income in gross income for United States federal income tax
purposes in advance of the receipt of cash and will not receive the cash related
to such income from the Series A Issuer if the holder disposes of the Series A
Preferred Securities prior to the record date for the payment of Distributions.
See "Certain Federal Income Tax Consequences--Original Issue Discount" and "--
Sales or Redemption of the Series A Preferred Securities".
The Corporation has no current intention of exercising its right to defer
payments of interest on the Series A Subordinated Debentures. However, should
the Corporation elect to exercise such right in the future, the market price of
the Series A Preferred Securities is likely to be affected. A holder that
disposes of its Series A Preferred Securities during an Extension Period,
therefore, might not receive the same return on its investment as a holder that
continues to hold its Series A Preferred Securities. In addition, as a result of
the existence of the Corporation's right
-16-
<PAGE>
to defer interest payments, the market price of the Series A Preferred
Securities may be more volatile than the market prices of other securities on
which original issue discount accrues that are not subject to such deferrals.
Tax Event or Capital Treatment Event--Redemption
Upon the occurrence and continuation of a Tax Event or a Capital Treatment
Event before December 31, 2006, the Corporation has the right to redeem the
Series A Subordinated Debentures in whole (but not in part) within 90 days
following the occurrence of such Tax Event or Capital Treatment Event and
therefore cause a mandatory redemption of the Series A Preferred Securities. The
exercise of such right is subject to the Corporation having received prior
approval of the Federal Reserve to do so if then required under applicable
guidelines or policies. See "Description of the Series A Debentures--Tax Event
or Capital Treatment Event Redemption".
A "Tax Event" means the receipt by the Series A Issuer of an opinion of
counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such pronouncement or decision is announced on or after the date of issuance of
the Series A Preferred Securities under the Trust Agreement, there is more than
an insubstantial risk that (i) the Series A Issuer is, or will be within 90 days
of the date of such opinion, subject to United States federal income tax with
respect to income received or accrued on the Series A Subordinated Debentures,
(ii) interest payable by the Corporation on the Series A Subordinated Debentures
is not, or within 90 days of such the date of opinion, will not be, deductible
by the Corporation, in whole or in part, for United States federal income tax
purposes or (iii) the Series A Issuer is, or will be within 90 days of the date
of the opinion, subject to more than a de minimis amount of other taxes, duties
or other governmental charges. See "Description of the Series A Subordinated
Debentures--Tax Event or Capital Treatment Event Redemption".
See "Certain Federal Income Tax Consequences--Possible Tax Law Changes" for a
discussion of certain legislative proposals that, if adopted, could give rise to
a Tax Event, which could permit the Corporation to cause a redemption of the
Series A Preferred Securities prior to December 31, 2006.
"Capital Treatment Event" means the reasonable determination by the
Corporation that, as a result of the occurrence of any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision thereof or
therein, or as a result of any official or administrative pronouncement or
action or judicial decision interpreting or applying such laws or regulations,
which amendment or change is effective or such pronouncement, action or decision
is announced on or after the date of issuance of the Series A Preferred
Securities under the Trust Agreement, there is more than an insubstantial risk
that the Corporation will not be entitled to treat an amount equal to the
Liquidation Amount of the Series A Preferred Securities as "Tier I Capital" (or
the then equivalent thereof) for purposes of the capital adequacy guidelines of
the Federal Reserve, as then in effect and applicable to the Corporation.
Liquidation of the Series A Issuer and Distribution of the Series A Subordinated
Debentures to Holders
The Corporation has the right at any time to terminate the Series A Issuer
and, after satisfaction of liabilities to creditors of the Series A Issuer as
required by applicable law, cause the Series A Subordinated Debentures to be
distributed to the holders of the Series A Preferred Securities in exchange
therefor in liquidation of the Series A Issuer. The exercise of such right is
subject to the Corporation having received prior approval of the Federal Reserve
if then required under applicable capital guidelines or policies. See
"Description of the Series A Preferred Securities--Liquidation of the Series A
Issuer and Distribution of the Series A Subordinated Debentures to Holders".
In the event the Corporation distributes the Series A Subordinated Debentures
to the holders of the Series A Preferred Securities, the holders of the Series A
Subordinated Debentures will have the same registration rights
-17-
<PAGE>
as they had as holders of the Series A Preferred Securities pursuant to the
Registration Rights Agreement. See "Registration Rights Agreement".
Rights under the Series A Guarantee
The Series A Guarantee guarantees to the holders of the Series A Preferred
Securities the following payments, to the extent not paid by the Series A
Issuer: (i) any accumulated and unpaid Distributions required to be paid on the
Series A Preferred Securities, to the extent that the Series A Issuer has funds
on hand available therefor at such time, (ii) the redemption price with respect
to any Series A Preferred Securities called for redemption, to the extent that
the Series A Issuer has funds on hand available therefor at such time and (iii)
upon a voluntary or involuntary dissolution, winding-up or liquidation of the
Series A Issuer (unless the Series A Subordinated Debentures are distributed to
holders of the Series A Preferred Securities in exchange therefor), the lesser
of (a) the aggregate of the Liquidation Amount and all accumulated and unpaid
Distributions to the date of payment, to the extent that the Series A Issuer has
funds on hand available therefor at such time, and (b) the amount of assets of
the Series A Issuer remaining available for distribution to holders of the
Series A Preferred Securities after payment of creditors of the Series A Issuer
as required by applicable law.
If the Corporation were to default on its obligation to pay amounts payable
under the Series A Subordinated Debentures, the Series A Issuer would lack funds
for the payment of Distributions or amounts payable on redemption of the Series
A Preferred Securities or otherwise, and, in such event, holders of the Series A
Preferred Securities would not be able to rely upon the Series A Guarantee for
payment of such amounts. The holders of not less than a majority in aggregate
Liquidation Amount of the Series A Preferred Securities have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Guarantee Trustee in respect of the Series A Guarantee or to direct the
exercise of any trust power conferred upon the Guarantee Trustee under the
Series A Guarantee. Any holder of the Series A Preferred Securities may
institute a legal proceeding directly against the Corporation to enforce its
rights under the Series A Guarantee without first instituting a legal proceeding
against the Series A Issuer, the Guarantee Trustee or any other person or
entity. In addition, in the event an event of default under the Indenture shall
have occurred and be continuing and such event is attributable to the failure of
the Corporation to pay interest on or principal (or premium, if any) of the
Series A Subordinated Debentures on the applicable payment date, a holder of the
Series A Preferred Securities may institute a legal proceeding directly against
the Corporation for enforcement of payment to such holder of the principal (or
premium, if any) of or interest on such Series A Subordinated Debentures having
a principal amount equal to the aggregate Liquidation Amount of the Series A
Preferred Securities of such holder (a "Direct Action"). In connection with such
Direct Action, the Corporation has a right of set-off under the Indenture to the
extent of any payment made by the Corporation to such holder of the Series A
Preferred Securities in the Direct Action. Except as described herein, holders
of the Series A Preferred Securities will not be able to exercise directly any
other remedy available to the holders of the Series A Subordinated Debentures or
assert directly any other rights in respect of the Series A Subordinated
Debentures. The Bank of New York acts as the guarantee trustee under the Series
A Guarantee (the "Guarantee Trustee") and holds the Series A Guarantee for the
benefit of the holders of the Series A Preferred Securities. The Bank of New
York also acts as Debenture Trustee for the Series A Subordinated Debentures and
as Property Trustee, and The Bank of New York (Delaware) acts as Delaware
Trustee under the Trust Agreement. See "Description of the Series A Subordinated
Debentures--Enforcement of Certain Rights by Holders of the Series A Preferred
Securities", "Description of the Series A Subordinated Debentures--Debenture
Events of Default" and "Description of the Series A Guarantee". The Trust
Agreement provides that each holder of the Series A Preferred Securities by
acceptance thereof agrees to the provisions of the Series A Guarantee and the
Indenture.
Limited Voting Rights
Holders of the Series A Preferred Securities generally have limited voting
rights relating only to the modification of the Series A Preferred Securities
and the exercise of the Series A Issuer's rights as holder of the Series A
Subordinated Debentures and the Series A Guarantee. Holders of the Series A
Preferred Securities are not
-18-
<PAGE>
entitled to vote to appoint, remove or replace the Property Trustee, the
Delaware Trustee or the Administrative Trustees, and such voting rights are
vested exclusively in the holder of the Series A Common Securities except, with
respect to the Property Trustee and the Delaware Trustee, upon the occurrence of
certain events described herein. The Property Trustee, the Administrative
Trustees and the Corporation may amend the Trust Agreement without the consent
of holders of the Series A Preferred Securities to ensure that the Series A
Issuer will be classified for United States federal income tax purposes as other
than an association taxable as a corporation unless such action materially and
adversely affects the interests of such holders. See "Description of the Series
A Preferred Securities--Voting Rights; Amendment of the Trust Agreement" and "--
Removal of the Series A Issuer Trustees".
No Prior Public Trading Market for Series A Preferred Securities
There currently is no public market for the Series A Preferred Securities and
there can be no assurance as to the liquidity of the market for the Series A
Preferred Securities, the ability of holders of the Series A Preferred
Securities to sell such Securities or the price at which holders would be able
to sell. Although the Corporation will use its reasonable best efforts to
maintain the effectiveness of a Shelf Registration Statement for resales during
the periods described herein, it will be entitled to restrict resales thereunder
for limited periods upon certain events. See "Registration Rights Agreement".
The Initial Purchasers have informed the Corporation that they intend to make a
market in the Series A Preferred Securities, to the extent permitted by
applicable law, but are under no obligation to do so. Any such market making may
be discontinued at any time without notice.
Market Prices
There can be no assurance as to the market prices for the Series A Preferred
Securities or Series A Subordinated Debentures that may be distributed in
exchange for Series A Preferred Securities if a liquidation of the Series A
Issuer occurs. Accordingly, the Series A Preferred Securities that an investor
may purchase, whether pursuant to the offer made hereby or in the secondary
market, or the Series A Subordinated Debentures that a holder of the Series A
Preferred Securities may receive on liquidation of the Series A Issuer, may
trade at a discount to the price that the investor paid to purchase the Series A
Preferred Securities offered hereby. In addition, the Series A Preferred
Securities may trade at prices that do not fully reflect the value of accrued
but unpaid interest with respect to the underlying Series A Subordinated
Debentures. A holder of Series A Preferred Securities that disposes of its
Series A Preferred Securities between record dates for payments of Distributions
(and consequently does not receive a Distribution from the Series A Issuer for
the period prior to such disposition) will nevertheless be required to include
accrued but unpaid interest on the Series A Subordinated Debentures through the
date of disposition in income as ordinary income and to add such amount to its
adjusted tax basis in the Series A Preferred Securities disposed of. Such holder
will recognize a capital loss to the extent the selling price (which may not
fully reflect the value of accrued but unpaid interest) is less than its
adjusted tax basis (which will include accrued but unpaid interest). Subject to
certain limited exceptions, capital losses cannot be applied to offset ordinary
income for United States federal income tax purposes. See "Certain Federal
Income Tax Consequences--Sales or Redemption of the Series A Preferred
Securities".
Possible Tax Law Changes Affecting the Series A Preferred Securities
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill") was
introduced in the 104th Congress which would have, among other things, generally
denied interest deductions for interest on an instrument, issued by a
corporation, that has a maximum term of more than 20 years and that is not shown
as indebtedness on the separate balance sheet of the issuer or, where the
instrument is issued to a related party (other than a corporation), where the
holder or some other related party issues a related instrument that is not shown
as indebtedness on the issuer's consolidated balance sheet. If such provision
were to have applied to the Series A Subordinated Debentures, the Corporation
would have been unable to deduct interest on the Series A Subordinated
Debentures. However, on March 29, 1996, the Chairmen of the Senate Finance and
House Ways and Means Committees issued a joint
-19-
<PAGE>
statement to the effect that it was their intention that the effective date of
the President's legislative proposals, if adopted, would be no earlier than the
date of appropriate Congressional action. Under current law, the Corporation
will be able to deduct interest on the Series A Subordinated Debentures.
President Clinton's proposed 1998 fiscal year budget reiterated a substantially
similar proposal on February 6, 1997. Although the 104th Congress adjourned
without enacting the Bill, there can be no assurance that legislation adopted by
the 105th Congress will not affect the ability of the Corporation to deduct
interest on the Series A Subordinated Debentures. Such a change could give rise
to a Tax Event, which would permit the Corporation, upon approval of the Federal
Reserve if then required under applicable capital guidelines or policies of the
Federal Reserve, to cause a redemption of the Series A Preferred Securities
before December 31, 2006. See "Description of the Series A Subordinated
Debentures--Optional Redemption" and "Description of the Series A Preferred
Securities--Redemption". See also "Certain Federal Income Tax Consequences--
Possible Tax Law Changes".
Residential and Commercial Real Estate Markets; Geographic Concentration
The Corporation has developed its lending business with a particular emphasis
on loans secured by residential real estate. The quality of the Corporation's
loan portfolio is dependent on the cash flow of borrowers, regional economic
conditions and residential and commercial real estate values. Adverse changes
affecting any of the above mentioned segments are likely to have an adverse
impact on the Corporation's loan portfolio and, as a result, the Corporation's
financial condition and results of operations may deteriorate.
Geographically, the Corporation's real estate loans are generally concentrated
in the Washington, D.C. metropolitan area. Geographic concentration of loans may
present risks in addition to those present with respect to loans generally. A
substantial deterioration in real estate values in the Washington, D.C.
metropolitan area could result in significant additional provisions to the
Corporation's reserve for loan losses.
Regulatory Capital Requirements
The Corporation and each of its banking subsidiaries are subject to regulatory
capital guidelines. Although the minimum leverage ratio requirement is 3.00%,
most bank holding companies, including the Corporation, are expected to maintain
an additional cushion of at least 100 to 200 basis points above the minimum.
However, the Federal Reserve may assign a specific capital ratio to an
individual bank holding company, including the Corporation, based on its
assessment of asset quality, earnings performance, interest-rate risk and
liquidity. As of the date of this Prospectus, the Federal Reserve has not
advised the Corporation of a specific leverage ratio requirement.
There can be no assurance that the Corporation or Riggs Bank will continue to
meet their respective minimum capital ratios. In the event that the Corporation
or any of its banking subsidiaries falls below the minimum capital requirements
described above, agencies may take regulatory action including, in the case of
subsidiary banks, "prompt corrective action". Such actions could impair the
Corporation's ability to make principal (or premium, if any) and interest
payments on the Series A Subordinated Debentures.
Competition
The Corporation competes with commercial banks, thrift institutions, mortgage
banks, credit unions and other institutions. Such competition is based primarily
on the scope and type of services offered, interest rates paid on deposits,
pricing of loans and the number and locations of branches. In addition,
competition has intensified in the Washington, D.C. metropolitan area. During
the past few years, significant consolidation among financial institutions in
the Washington, D.C. metropolitan area has occurred, including significant
acquisitions in this market by the Corporation's competitors, whose headquarters
are outside the Washington, D.C. metropolitan area. These competitors also
aggressively target many of the same customers as the Corporation, including
high net worth individuals and embassies and foreign missions. These competitors
and certain other competitors of the Corporation
-20-
<PAGE>
have substantially greater resources than the Corporation. Although management
believes the Corporation has been able to compete effectively in its market
areas, there can be no assurance that it will be able to continue to do so.
THE SERIES A ISSUER
Riggs Capital
Riggs Capital is a statutory business trust formed under Delaware law pursuant
to (i) the Trust Agreement executed by the Corporation, as depositor, The Bank
of New York, as Property Trustee, The Bank of New York (Delaware), as Delaware
Trustee, and the Administrative Trustees named therein and (ii) the filing of a
certificate of trust with the Delaware Secretary of State on November 15, 1996.
Prior to the issuance of the Series A Preferred Securities, the trust agreement
was amended and restated in its entirety as described herein (as so amended and
restated, the "Trust Agreement"). The Series A Issuer exists for the exclusive
purposes of (i) issuing and selling the Series A Securities, (ii) using the
proceeds from the sale of the Series A Securities to acquire Series A
Subordinated Debentures issued by the Corporation and (iii) engaging in only
those other activities necessary or incidental thereto (such as registering the
transfer of the Series A Securities). Accordingly, the Series A Subordinated
Debentures are the sole assets of the Series A Issuer, and payments under the
Series A Subordinated Debentures are the sole revenue of the Series A Issuer.
All of the Series A Common Securities are owned by the Corporation. The Series
A Common Securities rank pari passu, and payments will be made thereon pro rata,
with the Series A Preferred Securities, except that upon the occurrence and
continuance of an event of default under the Trust Agreement resulting from an
event of default under the Indenture, the rights of the Corporation as holder of
the Series A Common Securities to payment in respect of Distributions and
payments upon liquidation, redemption or otherwise will be subordinated to the
rights of the holders of the Series A Preferred Securities. See "Description of
the Series A Preferred Securities--Subordination of the Series A Common
Securities". The Corporation has acquired the Series A Common Securities in an
aggregate Liquidation Amount equal to at least 3% of the total capital of the
Series A Issuer. The Series A Issuer has a term of 55 years, but may terminate
earlier as provided in the Trust Agreement. The Series A Issuer's business and
affairs are conducted by its trustees, each appointed by the Corporation as
holder of the Series A Common Securities. The trustees for the Series A Issuer
are The Bank of New York, as the Property Trustee (the "Property Trustee"), The
Bank of New York (Delaware), as the Delaware Trustee (the "Delaware Trustee"),
and two individual trustees (the "Administrative Trustees") who are employees or
officers of or affiliated with the Corporation (collectively, the "Series A
Issuer Trustees"). The Bank of New York also acts as guarantee trustee under the
Series A Guarantee and the Indenture. See "Description of the Series A
Guarantee" and "Description of the Series A Subordinated Debentures". The holder
of the Series A Common Securities, or the holders of a majority in Liquidation
Amount of the Series A Preferred Securities if an event of default under the
Trust Agreement resulting from an event of default under the Indenture has
occurred and is continuing, will be entitled to appoint, remove or replace the
Property Trustee and/or the Delaware Trustee. In no event will the holders of
the Series A Preferred Securities have the right to vote to appoint, remove or
replace the Administrative Trustees; such voting rights are vested exclusively
in the holder of the Series A Common Securities. The duties and obligations of
the Series A Issuer Trustees are governed by the Trust Agreement. The
Corporation will pay all fees and expenses related to the Series A Issuer and
the offering of the Series A Preferred Securities and will pay, directly or
indirectly, all ongoing costs, expenses and liabilities of the Series A Issuer
pursuant to the Expense Agreement.
THE CORPORATION
Riggs National Corporation
The Corporation is a bank holding company registered under the BHCA. The
Corporation currently engages in a variety of banking-related activities through
its bank and non-bank subsidiaries. The Corporation currently has banking
operations or separate subsidiaries in the Washington, D.C. metropolitan area;
Miami, Florida; London,
-21-
<PAGE>
England; Paris, France; and Nassau, Bahamas. However, the primary market for the
Corporation is the Washington, D.C. metropolitan area, which it serves through
its primary banking subsidiary, Riggs Bank.
Key elements of the Corporation's business strategy for its subsidiaries are
to continue to focus on growth opportunities through the additional accumulation
of assets under management in its Financial Services Group, the orientation of
its retail banking branches toward money management relationships, the
development and specialization of products and services in specific growth
industries in its markets and the continued preeminence in the embassy banking
operations coupled with growth in selected international business lines. Such
growth will entail internally developed programs as well as possible alliances
or acquisitions in these areas. The Corporation will continue to serve the
varied financial needs of the Washington, D.C. metropolitan area and to meet its
commitments under the Community Reinvestment Act.
Riggs Bank
The Corporation's principal subsidiary is Riggs Bank, a national banking
association founded in 1836 and incorporated under the national banking laws of
the United States in 1896. In early 1996, the Corporation consolidated its three
separate banking subsidiaries: The Riggs National Bank of Washington, D.C., The
Riggs National Bank of Virginia and The Riggs National Bank of Maryland under
the name of Riggs Bank N.A.
Internally, Riggs Bank is organized into the following business lines: Retail
Banking Group; Corporate and Commercial Banking Group; Financial Services Group
and International Banking Group. Through these business lines Riggs Bank
provides a wide array of financial services to customers in the Washington, D.C.
metropolitan area, throughout the United States and internationally.
Riggs Bank's Retail Banking Group provides a variety of services including
checking, NOW, savings and money market accounts, loans and personal lines of
credit, certificates of deposit and individual retirement accounts.
Additionally, the Retail Banking Group provides 24-hour banking services through
its telebanking operations and a network of Riggs Bank automated teller machines
("ATMs") as well as national and regional ATM networks.
Riggs Bank's Corporate and Commercial Banking Groups provide services to
customers ranging from small regional businesses to major companies. These
services include lines of credit, secured and unsecured term loans, letters of
credit, credit support facilities, foreign currency transactions and cash
management.
Riggs Bank's Financial Services Group provides domestic trust, investment
management and private banking services. Fiduciary and administrative services
provided include financial management and tax planning for individuals,
investment and accounting services for corporations and non-profit
organizations, estate planning and trust administration, as well as bond
trusteeship.
Riggs Bank provides investment advisory services through Riggs Investment
Management Corporation, a wholly owned subsidiary incorporated under the laws of
the State of Delaware and registered under the Investment Advisers Act of 1940,
as amended.
Riggs Bank's International Banking Group furnishes a variety of financial
services, including issuing letters of credit in connection with trade and other
transactions, taking deposits, foreign exchange, private banking, cash
management, letters of credit and credit assistance with U.S. Government
programs. Customers include embassies and foreign missions in Washington, D.C.,
foreign governments, central banks and over 200 correspondent banks around the
world. These services are provided through both domestic and international
offices. Riggs Bank has established an important relationship with the foreign
embassy and mission community operating within the nation's capital. Currently,
Riggs Bank is the primary service provider to this distinguished group of
clientele, banking with 160 of the 170 countries represented by embassies or
missions in Washington, D.C. The embassy and mission business is a natural
complement to the Riggs Bank international private banking, foreign
correspondent banking and international advisory services.
The Riggs Bank and Trust Company (Bahamas) Limited, in Nassau, provides trust
services for international private banking customers. Riggs Bank operates a
branch in the U.S. Embassy in London, which services that
-22-
<PAGE>
embassy, its employees and official visitors. In 1991, Riggs Bank opened a
banking subsidiary under the laws of France. A full-service commercial bank, The
Riggs National Bank (Europe) S.A. ("Riggs-Europe") has one branch located in the
U.S. Embassy in Paris. In addition to serving that embassy, its employees and
official visitors, the Riggs-Europe office also assists the U.S. Government with
disbursement activities for the Department of Defense and the Department of
State for all of their facilities in Europe.
Riggs AP Bank Limited
Riggs AP Bank Limited ("Riggs AP"), a merchant bank located in London, is a
wholly owned subsidiary of Riggs Bank. Riggs AP provides traditional corporate
banking services, commercial property financing, private banking services and
trade finance.
-23-
<PAGE>
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES (EXCLUDING PREFERRED STOCK
DIVIDENDS) AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDEND REQUIREMENTS
The following are the consolidated ratio of earnings to fixed charges
(excluding preferred stock dividends) and ratio of earnings to combined fixed
charges and preferred stock dividend requirements for the Corporation for each
of the years in the five year period ended December 31, 1995 and the nine-month
period ended September 30, 1996:
<TABLE>
<CAPTION>
Nine Months
Ended Years Ended December 31,
September 30, ----------------------------------
1996 1995 1994 1993 1992 1991
------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Earnings to Fixed Charges (Excluding
Preferred Stock Dividends):
Including Interest on Deposits.... 1.53 1.60 1.30 N/A N/A N/A
Excluding Interest on Deposits.... 3.42 3.61 2.15 N/A N/A N/A
Earnings to Combined Fixed Charges
and Preferred Stock Dividends
Including Interest on Deposits.... 1.42 1.49 1.17 N/A N/A N/A
Excluding Interest on Deposits.... 2.53 2.74 1.52 N/A N/A N/A
</TABLE>
The ratio of earnings to fixed charges (excluding preferred stock dividends)
is computed by dividing (i) income before income taxes and fixed charges less
interest capitalized during such period, net of amortization of previously
capitalized interest, by (ii) fixed charges. The ratio of earnings to combined
fixed charges and preferred stock dividend requirements is computed by dividing
(i) income before income taxes and fixed charges less interest capitalized
during such period, net of amortization of previously capitalized interest, by
(ii) fixed charges and preferred stock dividend requirements. Fixed charges
consist of interest expense on borrowings, including capitalized interest
(including or excluding deposits, as the case may be), and the portion of rental
expense which is deemed representative of interest. The preferred stock dividend
requirements represent the pre-tax earnings which would be required to cover
such dividend requirements on the Corporation's preferred stock outstanding.
-24-
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Corporation as of September 30, 1996 and as adjusted to give effect to the
December Securities Sale. The following data should be read in conjunction with
the consolidated financial statements and notes thereto of the Corporation
incorporated by reference herein and deemed to be a part of this Prospectus.
<TABLE>
<CAPTION>
September 30, 1996
----------------------
Actual As Adjusted
----------------------
(in thousands)
<S> <C> <C>
Long-term Debt
9.65% Subordinated Debentures due 2009.......... $ 66,525 $ 66,525
8.50% Subordinated Debentures due 2006.......... 125,000 125,000
-------- --------
Total long-term debt..................... 191,525 191,525
-------- --------
Guaranteed Preferred Beneficial Interests in
Corporation's Junior Subordinated Deferrable Interest
Debentures (a)........................................ -- 150,000
-------- --------
Stockholders' Equity
Preferred Stock
$1.00 Par value, Shares authorized--25,000,000
Shares Issued--4,000,000 10.75% Noncumulative
Perpetual Preferred Stock, Series B
(liquidation amount $25 per share)............. 4,000 4,000
Class B Common Stock
$2.50 Par value, Shares authorized--20,000,000
Shares Issued--none............................. -- --
Common Stock
$2.50 Par value, Shares authorized--50,000,000
Shares Issued--31,263,994....................... 78,160 78,160
Surplus
Preferred Stock................................. 91,192 91,192
Common Stock.................................... 156,992 156,992
Foreign Exchange Translation Adjustments............... (1,164) (1,164)
Undivided Profits...................................... 111,668 111,668
Unrealized Gain (Loss) on Securities Available for
Sale, Net............................................. (4,815) (4,815)
Treasury Stock--900,798 Shares......................... (23,723) (23,723)
-------- --------
Total Stockholders' Equity............... 412,310 412,310
-------- --------
Total Long-Term Debt, Guaranteed Preferred Beneficial
Interests in Corporation's Junior Subordinated
Deferrable Interest Debentures and Stockholders'
Equity................................................. $603,835 $753,835
======== ========
Certain Capital Ratios:
Tier I Capital-Risk-Weighted.................... 15.71% 20.94%
Combined Tier I & II Capital-Risk-Weighted...... 24.26% 29.49%
Leverage........................................ 8.76% 11.57%
</TABLE>
(a) As described herein, the sole assets of the Series A Issuer are
approximately $154,640,000 aggregate principal amount of the 8 5/8% Junior
Subordinated Deferrable Interest Debentures, Series A, issued by the Corporation
to the Series A Issuer. The Series A Subordinated Debentures mature on December
31, 2026. The Corporation owns all of the Series A Common Securities of the
Series A Issuer.
-25-
<PAGE>
USE OF PROCEEDS
Neither the Corporation nor the Series A Issuer will receive any of the
proceeds from the sale of the Series A Preferred Securities offered hereby, all
of which will be received by the Selling Securityholders.
All of the proceeds from the December Securities Sale of the Series A
Preferred Securities were invested, together with the proceeds from the sale of
the Series A Common Securities, by the Series A Issuer in Series A Subordinated
Debentures. The Corporation intends to use the proceeds from the sale of the
Series A Subordinated Debentures for general corporate purposes, including, but
not limited to, possible repurchase or redemption of shares of its currently
outstanding $100 million 10.75% Noncumulative Preferred Stock, which is first
redeemable on October 1, 1998.
FEDERAL RESERVE BOARD ACTIONS
On October 21, 1996 the Federal Reserve approved the use of certain cumulative
preferred stock instruments in Tier I capital for bank holding companies. Such
instruments are issued out of a special purpose subsidiary that is wholly owned
by the parent company and the proceeds are lent to the parent company in the
form of a very long-term, deeply subordinated note. Such arrangement, which
gives rise to minority interest upon consolidation of the subsidiary with the
parent holding company, normally will be accorded Tier I capital status by the
Federal Reserve. The Corporation believes that raising capital in this form is
the most efficient and cost effective method for it to do so.
ACCOUNTING TREATMENT
For financial reporting purposes, the Series A Issuer will be treated as a
subsidiary of the Corporation and, accordingly, the Series A Issuer's financial
statements will be included in the consolidated financial statements of the
Corporation. In all future reports of the Corporation filed under the Exchange
Act, the Series A Preferred Securities will be presented as a separate line item
in the consolidated balance sheets of the Corporation, entitled "Guaranteed
Preferred Beneficial Interests in Corporation's Junior Subordinated Deferrable
Interest Debentures" and appropriate disclosures about the Series A Preferred
Securities, the Series A Guarantee, the Expense Agreement and the Series A
Subordinated Debentures will be included in the notes to the consolidated
financial statements. For financial reporting purposes, the Corporation will
record Distributions payable on the Series A Preferred Securities as a deduction
from consolidated net income as a minority interest of a subsidiary.
DESCRIPTION OF THE SERIES A PREFERRED SECURITIES
General
The following is a summary of certain terms and provisions of the Series A
Preferred Securities. This summary of certain terms and provisions of the Series
A Preferred Securities does not purport to be complete and is subject to, and
qualified in its entirety by reference to, the Trust Agreement, including the
definitions therein of certain terms, and the Trust Indenture Act. All material
terms of the Series A Preferred Securities are set forth in the Prospectus.
Wherever particular defined terms of the Trust Agreement (as amended or
supplemented from time to time) are referred to herein, such defined terms are
incorporated herein by reference. The Trust Agreement has been filed as an
exhibit to the Registration Statement of which this Prospectus forms a part.
Distributions
The Series A Preferred Securities represent beneficial interests in the Series
A Issuer. Distributions on such Series A Preferred Securities will be payable at
the annual rate of 8 5/8% of the stated Liquidation Amount of $1,000, payable
semi-annually in arrears on June 30 and December 31 of each year, to the holders
of the Series A Preferred Securities on the relevant record dates. The record
dates will be, for so long as the Series A Preferred Securities
-26-
<PAGE>
remain in book-entry form, one Business Day (as defined below) prior to the
relevant Distribution payment date and, in the event the Series A Preferred
Securities are not in book-entry form, the 15th day of the month in which the
relevant Distribution payment date occurs. Subject to any applicable laws and
regulations and the provisions of the Trust Agreement, each such payment will be
made as described under "Book-Entry Issuance". Distributions will accumulate
from the date of original issuance of the Series A Preferred Securities. The
first Distribution payment date for the Series A Preferred Securities will be
June 30, 1997. The amount of Distributions payable for any period which is less
than a full Distribution Period will be computed on the basis of a 360-day year
of twelve 30-day months. In the event that any date on which Distributions are
payable on the Series A Preferred Securities is not a Business Day, then payment
of the Distributions payable on such date will be made on the next succeeding
day that is a Business Day (and without any additional Distributions or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date such payment was originally payable (each date on which
Distributions are payable in accordance with the foregoing, a "Distribution
Date"). A "Business Day" shall mean any day other than a Saturday or a Sunday,
or a day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed or a day on which the
corporate trust office of the Property Trustee or the Debenture Trustee is
closed for business.
So long as no event of default under the Indenture has occurred and is
continuing, the Corporation has the right under the Indenture to defer the
payment of interest on the Series A Subordinated Debentures at any time or from
time to time for a period not exceeding 10 consecutive semi-annual periods with
respect to each Extension Period, provided that no Extension Period may extend
beyond the Stated Maturity of the Series A Subordinated Debentures. As a
consequence of any such deferral of interest, semi-annual Distributions on the
Series A Preferred Securities by the Series A Issuer will also be deferred
during any such Extension Period. Distributions to which holders of the Series A
Preferred Securities are entitled will accumulate additional Distributions
thereon at the rate per annum of 8 5/8% thereof, compounded semi-annually from
the relevant payment date for such Distributions. The term "Distributions" as
used herein shall include any such additional Distributions. During any such
Extension Period, the Corporation may not, and may not permit any subsidiary of
the Corporation to, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
the Corporation's capital stock, (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Corporation that rank pari passu with or junior in interest to the Series A
Subordinated Debentures or (iii) make any guarantee payments with respect to any
guarantee by the Corporation of the debt securities of any subsidiary of the
Corporation if such guarantee ranks pari passu with or junior in interest to the
Series A Subordinated Debentures (other than (a) dividends or distributions in
common stock of the Corporation, (b) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of stock
under any such plan in the future or the redemption or repurchase of any such
rights pursuant thereto, (c) payments under the Series A Guarantee and (d)
purchases of common stock related to the issuance of common stock or rights
under any of the Corporation's benefit plans for its directors, officers or
employees). Prior to the termination of any such Extension Period, the
Corporation may further defer the payment of interest on the Series A
Subordinated Debentures, provided that no Extension Period may exceed 10
consecutive semi-annual periods or extend beyond the Stated Maturity of the
Series A Subordinated Debentures. Upon the termination of any such Extension
Period and the payment of all interest then accrued and unpaid (together with
interest thereon at the rate of 8 5/8%, compounded semi-annually, to the extent
permitted by applicable law), the Corporation may elect to begin a new Extension
Period. There is no limitation on the number of times that the Corporation may
elect to begin an Extension Period. See "Description of the Series A
Subordinated Debentures--Right to Defer Interest Payment Obligation" and
"Certain Federal Income Tax Consequences--Original Issue Discount".
The revenue of the Series A Issuer available for distribution to holders of
its Series A Preferred Securities is limited to payments under the Series A
Subordinated Debentures in which the Series A Issuer has invested the proceeds
from the issuance and sale of its Series A Securities. See "Description of the
Series A Subordinated Debentures". If the Corporation does not make interest
payments on the Series A Subordinated Debentures, the Property Trustee will not
have funds available to pay Distributions on the Series A Preferred Securities.
The payment of Distributions (if and to the extent the Series A Issuer has funds
legally available for the payment of such
-27-
<PAGE>
Distributions and cash sufficient to make such payments) is guaranteed by the
Corporation on a limited basis as set forth herein under "Description of the
Series A Guarantee".
The Corporation has no current intention of exercising its right to defer
payments of interest on the Series A Subordinated Debentures.
Subordination of the Series A Common Securities
Payment of Distributions on, and the Redemption Price (as defined herein) of,
the Series A Preferred Securities and Series A Common Securities, as applicable,
shall be made pro rata based on the Liquidation Amount of the Series A Preferred
Securities and the Series A Common Securities; provided, however, that if on any
Distribution Date or Redemption Date an event of default under the Indenture
shall have occurred and be continuing, no payment of any Distribution on, or
Redemption Price of, any of the Series A Common Securities, and no other payment
on account of the redemption, liquidation or other acquisition of such Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions on all of the outstanding Series A Preferred Securities for
all Distribution periods terminating on or prior thereto, or, in the case of
payment of the Redemption Price, the full amount of such Redemption Price on all
of the outstanding Series A Preferred Securities then called for redemption,
shall have been made or provided for, and all funds available to the Property
Trustee shall first be applied to the payment in full in cash of all
Distributions on, or Redemption Price of, the Series A Preferred Securities then
due and payable.
In the case of any event of default under the Trust Agreement resulting from
an event of default under the Indenture, the Corporation as holder of the Series
A Common Securities will be deemed to have waived any right to act with respect
to any such event of default under the Trust Agreement until the effect of all
such events of default with respect to the Series A Preferred Securities shall
have been cured, waived or otherwise eliminated. Until any such events of
default under the Trust Agreement shall have been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the holders of
the Series A Preferred Securities and not on behalf of the Corporation as holder
of the Series A Common Securities, and only the holders of the Series A
Preferred Securities will have the right to direct the Property Trustee to act
on their behalf.
Redemption
The Series A Preferred Securities are subject to mandatory redemption, in
whole or in part, upon repayment of the Series A Subordinated Debentures at
their Stated Maturity (as defined herein) or earlier redemption as provided in
the Indenture. The proceeds from such repayment or redemption shall be applied
by the Property Trustee to redeem a Like Amount (as defined below) of the Series
A Preferred Securities, upon not less than 30 nor more than 60 days notice prior
to the date fixed for repayment or redemption, at a redemption price equal to
the aggregate Liquidation Amount of such Series A Preferred Securities plus
accumulated and unpaid Distributions thereon to the date of redemption (the
"Redemption Date") plus the related amount of the premium, if any, paid by the
Corporation upon the concurrent redemption of such Series A Subordinated
Debentures (the "Redemption Price"). For a description of the Stated Maturity
and redemption provisions of the Series A Subordinated Debentures, see
"Description of the Series A Subordinated Debentures--General", "--Optional
Redemption" and "--Tax Event or Capital Treatment Event Redemption".
Subject to the Corporation having received prior approval of the Federal
Reserve to do so if then required under applicable capital guidelines or
policies, the Corporation has the option to redeem the Series A Subordinated
Debentures prior to maturity on or after December 31, 2006, in whole at any time
or in part from time to time, at the Optional Redemption Price and thereby cause
a mandatory redemption of a Like Amount (as defined below) of the Series A
Preferred Securities. See "Description of the Series A Subordinated Debentures--
Optional Redemption".
-28-
<PAGE>
If, prior to December 31, 2006, a Tax Event or a Capital Treatment Event
shall occur and be continuing, the Corporation has the right, subject to the
Corporation having received prior approval of the Federal Reserve to do so if
then required under applicable capital guidelines or policies, to redeem the
Series A Subordinated Debentures in whole (but not in part) within 90 days after
the occurrence of such Tax Event or Capital Treatment Event at the Tax or
Capital Event Redemption Price and thereby cause a mandatory redemption of the
Series A Preferred Securities in whole (but not in part). See "Description of
the Series A Subordinated Debentures--Tax Event or Capital Treatment Event
Redemption".
Redemption Procedures
Series A Preferred Securities redeemed on each Redemption Date shall be
redeemed at the applicable Redemption Price with the applicable proceeds from
the contemporaneous redemption of a Like Amount of the Series A Subordinated
Debentures. Redemptions of the Series A Preferred Securities shall be made and
the Redemption Price shall be payable on each Redemption Date only to the extent
that the Series A Issuer has funds on hand available for the payment of such
Redemption Price. See also "--Subordination of the Series A Common Securities".
If the Series A Issuer gives a notice of redemption in respect of the
Series A Preferred Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, to the extent funds are available, the Property Trustee will
deposit irrevocably with DTC funds sufficient to pay the applicable Redemption
Price and will give DTC irrevocable instructions and authority to pay the
Redemption Price to the holders of such Series A Preferred Securities. See
"Book-Entry Issuance". If any Series A Preferred Securities are held in
certificated form, the Property Trustee, to the extent funds are available, will
irrevocably deposit with the paying agent for the Series A Preferred Securities
funds sufficient to pay the applicable Redemption Price and will give such
paying agent irrevocable instructions and authority to pay the Redemption Price
to the holders thereof upon surrender of their certificates evidencing such
Series A Preferred Securities. Notwithstanding the foregoing, Distributions
payable on or prior to the Redemption Date for the Series A Preferred Securities
called for redemption shall be payable to the holders of the Series A Preferred
Securities on the relevant record dates for the related Distribution Dates. If
notice of redemption shall have been given and funds deposited as required, then
upon the date of such deposit, all rights of the holders of such Series A
Preferred Securities so called for redemption will cease, except the right of
the holders of such Series A Preferred Securities to receive the Redemption
Price, but without interest on such Redemption Price, and such Series A
Preferred Securities will cease to be outstanding.
In the event that any date fixed for redemption of the Series A
Preferred Securities is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day which is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day falls in the next calendar year, such payment
will be made on the immediately preceding Business Day. In the event that
payment of the Redemption Price in respect of the Series A Preferred Securities
called for redemption is improperly withheld or refused and not paid either by
the Series A Issuer or by the Corporation pursuant to the Series A Guarantee as
described under "Description of the Series A Guarantee", Distributions on such
Series A Preferred Securities will continue to accrue at the then applicable
rate, from the Redemption Date originally established by the Series A Issuer for
such Series A Preferred Securities to the date such Redemption Price is actually
paid, in which case the actual payment date will be the date fixed for
redemption for purposes of calculating the Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law), the Corporation or its subsidiaries may at any time and
from time to time purchase outstanding Series A Preferred Securities by private
agreement.
Payment of the Redemption Price on the Series A Preferred Securities and
any distribution of the Series A Subordinated Debentures to holders of the
Series A Preferred Securities shall be made to the applicable recordholders
thereof as they appear on the register for the Series A Preferred Securities on
the relevant record date, which, for so long as the Series A Preferred
Securities are in book-entry form, shall be one Business Day prior to
-29-
<PAGE>
the relevant Redemption Date or liquidation date, as applicable; provided,
however, that in the event that any Series A Preferred Securities are not in
book-entry form, the relevant record date for the Series A Preferred Securities
shall be a date at least 15 days prior to the Redemption Date or liquidation
date, as applicable.
If less than all of the Series A Preferred Securities and Series A
Common Securities issued by the Series A Issuer are to be redeemed on a
Redemption Date, then the aggregate Liquidation Amount of the Series A Preferred
Securities and Series A Common Securities to be redeemed shall be allocated pro
rata to the Series A Preferred Securities and the Series A Common Securities
based upon the relative Liquidation Amounts of such classes. The particular
Series A Preferred Securities to be redeemed shall be selected on a pro rata
basis not more than 60 days prior to the Redemption Date by the Property Trustee
from the outstanding Series A Preferred Securities not previously called for
redemption, by such method as the Property Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to $1,000 or an integral multiple of $1,000 in excess thereof) of the
Liquidation Amount of the Series A Preferred Securities of a denomination larger
than $1,000. The Property Trustee shall promptly notify the trust registrar in
writing of the Series A Preferred Securities selected for redemption and, in the
case of the Series A Preferred Securities selected for partial redemption, the
Liquidation Amount thereof to be redeemed. For all purposes of the Trust
Agreement, unless the context otherwise requires, all provisions relating to the
redemption of the Series A Preferred Securities shall relate, in the case of the
Series A Preferred Securities redeemed or to be redeemed only in part, to the
portion of the aggregate Liquidation Amount of the Series A Preferred Securities
which has been or is to be redeemed.
Liquidation of the Series A Issuer and Distribution of the Series A Subordinated
Debentures to Holders
Subject to the Corporation having received the prior approval of the
Federal Reserve to do so if then required under applicable capital guidelines or
policies, the Corporation has the right at any time to terminate the Series A
Issuer and, after satisfaction of the liabilities of creditors of the Series A
Issuer as provided by applicable law, cause Series A Subordinated Debentures to
be distributed to the holders of the Series A Preferred Securities and Series A
Common Securities in exchange therefor upon liquidation of the Series A Issuer.
After the liquidation date fixed for any distribution of the Series A
Subordinated Debentures for Series A Preferred Securities (i) such Series A
Preferred Securities will no longer be deemed to be outstanding, (ii) DTC or its
nominee, as the record holder of the Series A Preferred Securities, will receive
a registered global certificate or certificates representing the Series A
Subordinated Debentures to be delivered upon such distribution and (iii) any
certificates representing such Series A Preferred Securities not held by DTC or
its nominee will be deemed to represent Series A Subordinated Debentures having
a principal amount equal to the stated Liquidation Amount of such Series A
Preferred Securities, and bearing accrued and unpaid interest in an amount equal
to the accumulated and unpaid Distributions on such series of the Series A
Preferred Securities until such certificates are presented to the Administrative
Trustees or their agent for transfer or reissuance.
Under current United States federal income tax law and interpretations,
a distribution of the Series A Subordinated Debentures should not be a taxable
event to holders of the Series A Preferred Securities. Should there be a change
in law, a change in legal interpretation, a Tax Event or other circumstances,
however, the distribution could be a taxable event to holders of the Series A
Preferred Securities. See "Certain Federal Income Tax Consequences--Distribution
of the Series A Subordinated Debentures to Holders of Series A Preferred
Securities".
Liquidation Distribution upon Termination
Pursuant to the Trust Agreement, the Series A Issuer shall automatically
terminate upon expiration of its term and shall terminate on the first to occur
of: (i) certain events of bankruptcy, dissolution or liquidation of the holder
of the Common Securities; (ii) the distribution of a Like Amount of the Series A
Subordinated Debentures to the holders of the Series A Preferred Securities, if
the Corporation, as depositor, has given written direction to the Property
Trustee to terminate the Series A Issuer (which direction is optional and wholly
within the discretion of the Corporation, as depositor); (iii) redemption of all
of the Series A Preferred Securities as described under
-30-
<PAGE>
"Description of the Series A Preferred Securities--Redemption"; and (iv) the
entry of an order for the dissolution of the Series A Issuer by a court of
competent jurisdiction.
If an early termination occurs as described in clause (i), (ii) or (iv)
above, the Series A Issuer shall be liquidated by the Series A Issuer Trustees
as expeditiously as the Series A Issuer Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Series A
Issuer as provided by applicable law, to the holders of the Series A Preferred
Securities a Like Amount of the Series A Subordinated Debentures, unless such
distribution is determined by the Property Trustee not to be practical, in which
event such holders will be entitled to receive out of the assets of the Series A
Issuer available for distribution to holders, after satisfaction of liabilities
to creditors of the Series A Issuer as provided by applicable law, an amount
equal to the aggregate of the Liquidation Amount plus accrued and unpaid
Distributions on the Series A Preferred Securities, to the date of payment (such
amount being the "Liquidation Distribution"). If such Liquidation Distribution
can be paid only in part because the Series A Issuer has insufficient assets
available to pay in full the aggregate Liquidation Distribution, then the
amounts payable directly by the Series A Issuer on Series A Preferred Securities
shall be paid on a pro rata basis. The holder(s) of the Series A Common
Securities will be entitled to receive distributions upon any such liquidation
pro rata with the holders of the Series A Preferred Securities, except that if
an event of default under the Indenture has occurred and is continuing, the
Series A Preferred Securities shall have a priority over the Series A Common
Securities with respect to any such distributions.
Events of Default; Notice
Any one of the following events constitutes an "Event of Default" under
the Trust Agreement (an "Event of Default") with respect to the Series A
Preferred Securities issued thereunder (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) the occurrence of an event of default under the Indenture (see
"Description of the Series A Subordinated Debentures--Debenture Events of
Default"); or
(ii) default by the Property Trustee in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a period
of 30 days; or
(iii) default by the Property Trustee in the payment of any Redemption
Price of any Series A Preferred Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Series A Issuer Trustees in the Trust Agreement
(other than a covenant or warranty a default in the performance of which or the
breach of which is dealt with in clause (ii) or (iii) above), and continuation
of such default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the defaulting Series A Issuer Trustee or
Trustees by the holders of at least 25% in aggregate Liquidation Amount of the
outstanding Series A Preferred Securities, a written notice specifying such
default or breach and requiring it to be remedied and stating that such notice
is a "Notice of Default" under the Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by the Corporation to appoint a
successor Property Trustee within 60 days thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the Series A Preferred
Securities, the Administrative Trustees and the Corporation, as depositor,
unless such Event of Default shall have been cured or waived. The Corporation,
as depositor, and the Administrative Trustees are required to file annually with
the Property Trustee a certificate as to whether or not they are in compliance
with all the conditions and covenants applicable to them under the Trust
Agreement.
-31-
<PAGE>
If an event of default under the Indenture has occurred and is
continuing, the Series A Preferred Securities shall have a preference over the
Series A Common Securities as described above. See "--Subordination of the
Series A Common Securities" and "--Liquidation Distribution Upon Termination".
The existence of an event of default does not entitle the holders of the Series
A Preferred Securities to accelerate the maturity thereof.
Removal of the Series A Issuer Trustees
Unless an event of default under the Indenture shall have occurred and
be continuing, any Series A Issuer Trustee may be removed at any time by the
holder of the Series A Common Securities. If an event of default under the
Indenture has occurred and is continuing, the Property Trustee and the Delaware
Trustee may be removed at such time by the holders of a majority in Liquidation
Amount of the outstanding Series A Preferred Securities. In no event will the
holders of the Series A Preferred Securities have the right to vote to appoint,
remove or replace the Administrative Trustees, which voting rights are vested
exclusively in the Corporation as the holder of the Series A Common Securities.
No resignation or removal of any Series A Issuer Trustee and no appointment of a
successor trustee shall be effective until the acceptance of appointment by the
successor trustee in accordance with the provisions of the Trust Agreement.
Co-trustees and Separate Property Trustee
Unless an Event of Default shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act, if applicable, or of any jurisdiction in which any part of the
Trust Property may at the time be located, the Corporation, as the holder of the
Series A Common Securities, and the Administrative Trustees shall have power to
appoint one or more persons either to act as a co-trustee, jointly with the
Property Trustee, of all or any part of such Trust Property, or to act as
separate trustee of any such property, in either case with such powers as may be
provided in the instrument of appointment, and to vest in such person or persons
in such capacity any property, title, right or power deemed necessary or
desirable, subject to the provisions of the Trust Agreement. In the event an
event of default under the Indenture has occurred and is continuing, the
Property Trustee alone shall have power to make such appointment.
Merger or Consolidation of the Series A Issuer Trustees
Any corporation into which the Property Trustee, the Delaware Trustee or
any Administrative Trustee that is not a natural person may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Trustee shall be a
party or any corporation succeeding to all or substantially all the corporate
trust business of such Trustee, shall be the successor of such Trustee under the
Trust Agreement, provided such corporation shall be otherwise qualified and
eligible.
Mergers, Consolidations, Amalgamations or Replacements of the Series A Issuer
The Series A Issuer may not merge with or into, consolidate, amalgamate,
be replaced by, convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except as
described below. The Series A Issuer may, at the request of the Corporation,
with the consent of the Administrative Trustees and without the consent of the
holders of the Series A Preferred Securities or any other trustee merge with or
into, consolidate, amalgamate, be replaced by, convey, transfer or lease its
properties and assets substantially as an entirety to, a trust organized as such
under the laws of any State; provided that (i) such successor entity either (a)
expressly assumes all of the obligations of the Series A Issuer with respect to
the Series A Preferred Securities or (b) substitutes for the Series A Preferred
Securities other securities having substantially the same terms as the Series A
Preferred Securities (the "Successor Securities") so long as the Successor
Securities rank the same as the Series A Preferred Securities in priority with
respect to Distributions and payments upon liquidation, redemption and
otherwise, (ii) the Corporation expressly appoints a trustee of such successor
entity possessing the same powers and
-32-
<PAGE>
duties as the Property Trustee as the holder of the Series A Subordinated
Debentures, (iii) the Successor Securities are registered or listed, or any
Successor Securities will be registered or listed upon notification of issuance,
on any national securities exchange or other organization on which the Series A
Preferred Securities are then registered or listed, if any, (iv) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
cause the Series A Preferred Securities (including any Successor Securities) to
be downgraded by any nationally recognized statistical rating organization, (v)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences and privileges of the
holders of the Series A Preferred Securities (including any Successor
Securities) in any material respect, (vi) such successor entity has a purpose
identical to that of the Series A Issuer, (vii) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, the
Corporation has received an opinion from independent counsel to the Series A
Issuer experienced in such matters to the effect that (a) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the holders of the
Series A Preferred Securities (including any Successor Securities) in any
material respect and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, (1) neither the Series A Issuer nor
such successor entity will be required to register as an investment company
under the Investment Company Act of 1940, as amended (the "Investment Company
Act"), and (2) the Series A Issuer or the successor entity, as the case may be,
will continue to be classified other than as an association taxable as a
corporation for United States federal income tax purposes; and (viii) the
Corporation or any permitted successor or assignee owns all of the Series A
Common Securities of such successor entity and guarantees the obligations of
such successor entity under the Successor Securities at least to the extent
provided by the Series A Guarantee. Notwithstanding the foregoing, the Series A
Issuer shall not, except with the consent of holders of 100% in Liquidation
Amount of the Series A Preferred Securities, consolidate, amalgamate, merge with
or into or be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the Series A Issuer or the successor entity to be classified as an
association taxable as a corporation or as other than a grantor trust for United
States federal income tax purposes.
Voting Rights; Amendment of the Trust Agreement
Except as provided below and under "Description of the Series A
Guarantee--Amendments and Assignment" and as otherwise required by law and the
Trust Agreement, the holders of the Series A Preferred Securities have no voting
rights.
The Trust Agreement may be amended from time to time by the Corporation,
the Property Trustee and the Administrative Trustees, without the consent of the
holders of the Series A Preferred Securities, to (i) cure any ambiguity, correct
or supplement any provisions in the Trust Agreement that may be inconsistent
with any other provision or to make any other provisions with respect to matters
or questions arising under the Trust Agreement, which shall not be inconsistent
with the other provisions of the Trust Agreement or (ii) modify, eliminate or
add to any provisions of the Trust Agreement to such extent as shall be
necessary to ensure that the Series A Issuer will be classified for United
States federal income tax purposes as other than an association taxable as a
corporation at all times that the Series A Preferred Securities are outstanding
or to ensure that the Series A Issuer will not be required to register as an
"investment company" under the Investment Company Act; provided that such action
shall not adversely affect in any material respect the interests of any holder
of the Series A Preferred Securities, and any amendments of the Trust Agreement
shall become effective when notice thereof is given to the holders of the Series
A Preferred Securities. The Trust Agreement may be amended by the Administrative
Trustees and the Corporation with (i) the consent of holders representing not
less than a majority (based upon Liquidation Amounts) of the outstanding Series
A Preferred Securities and (ii) receipt by the Series A Issuer Trustees of an
opinion of counsel to the effect that such amendment or the exercise of any
power granted to the Series A Issuer Trustees in accordance with such amendment
will not affect the Series A Issuer's status as a grantor trust for United
States federal income tax purposes or the Series A Issuer's exemption from
status as an "investment company" under the Investment Company Act, provided
that without the consent of each holder of the Series A Preferred Securities,
the Trust Agreement may not be amended to (a) change the amount or timing of any
Distribution on the Series A Preferred Securities or otherwise adversely affect
the amount of any Distribution required to be made in respect of the Series
-33-
<PAGE>
A Preferred Securities as of a specified date or (b) restrict the right of a
holder of the Series A Preferred Securities to institute suit for the
enforcement of any such payment on or after such date.
So long as the Series A Subordinated Debentures are held by the Property
Trustee, the Series A Issuer Trustees shall not (i) direct the time, method and
place of conducting any proceeding for any remedy available to the Debenture
Trustee or executing any trust or power conferred on the Property Trustee with
respect to the Series A Subordinated Debentures, (ii) waive any past default
that is available under the Indenture, (iii) exercise any right to rescind or
annul a declaration that the principal of all the Series A Subordinated
Debentures shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or the Series A Subordinated
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the holders of a majority in aggregate
Liquidation Amount of all outstanding Series A Preferred Securities; provided,
however, that where a consent under the Indenture would require the consent of
each holder of the Series A Subordinated Debentures affected thereby, no such
consent shall be given by the Property Trustee without the prior consent of each
holder of the Series A Preferred Securities. The Series A Issuer Trustees shall
not revoke any action previously authorized or approved by a vote of the holders
of the Series A Preferred Securities except by subsequent vote of the holders of
the Series A Preferred Securities. The Property Trustee shall notify each holder
of the Series A Preferred Securities of any notice of default which it receives
with respect to the Series A Subordinated Debentures. In addition to obtaining
the foregoing approvals of the holders of the Series A Preferred Securities,
prior to taking any of the foregoing actions, the Series A Issuer Trustees shall
obtain an opinion of counsel experienced in such matters to the effect that the
Series A Issuer will not be classified as an association taxable as a
corporation or as other than a grantor trust for United States federal income
tax purposes on account of such action.
Any required approval of holders of the Series A Preferred Securities
may be given at a meeting of holders of the Series A Preferred Securities
convened for such purpose or pursuant to written consent. The Property Trustee
will cause a notice of any meeting at which holders of the Series A Preferred
Securities are entitled to vote, or of any matter upon which action by written
consent of such holders is to be taken, to be given to each holder of record of
the Series A Preferred Securities in the manner as set forth in the Trust
Agreement.
No vote or consent of the holders of the Series A Preferred Securities
will be required for the Series A Issuer to redeem and cancel the Series A
Preferred Securities in accordance with the Trust Agreement.
Notwithstanding that holders of the Series A Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Series A Preferred Securities that are owned by the Corporation, the
Series A Issuer Trustees or any affiliate of the Corporation or the Series A
Issuer Trustees shall, for purposes of such vote or consent, be treated as if
they were not outstanding.
Liquidation Value
The amount payable on the Series A Preferred Securities in the event of
any liquidation of the Series A Issuer is $1,000 per Series A Preferred Security
plus accumulated and unpaid Distributions, which may be in the form of a
distribution of such amount in Series A Subordinated Debentures, subject to
certain exceptions. See "--Liquidation Distribution Upon Termination".
Payment and Paying Agency
Payments in respect of the Global Series A Preferred Securities (as
defined herein) shall be made to DTC, which shall credit the relevant accounts
at the Depositary on the applicable Distribution Dates. Payments in respect of
Series A Preferred Securities which are not held by DTC shall be made by check
mailed to the address of the holder entitled thereto as such address shall
appear on the register maintained by the Property Trustee. The paying agent (the
"Paying Agent") is the Property Trustee and any co-paying agent chosen by the
Property Trustee and acceptable to the Administrative Trustees and the
Corporation. The Paying Agent is permitted to resign as Paying Agent upon 30
days' written notice to the Property Trustee and the Corporation. In the event
that the Property
-34-
<PAGE>
Trustee shall no longer be the Paying Agent, the Administrative Trustees shall
appoint a successor (which shall be a bank or trust company acceptable to the
Administrative Trustees and the Corporation) to act as Paying Agent.
Registrar and Transfer Agent
The Property Trustee acts as registrar and transfer agent for the Series
A Preferred Securities.
Registration of transfers of the Series A Preferred Securities will be
effected without charge by or on behalf of the Series A Issuer, but upon payment
of any tax or other governmental charges that may be imposed in connection with
any transfer or exchange. The Series A Issuer will not be required (i) to
register or cause to be registered the transfer or exchange of the Series A
Preferred Securities during a period beginning at the opening of business 15
days before the day of the mailing of the relevant notice of redemption and
ending at the close of business on the day of mailing of such notice of
redemption or (ii) to register or cause to be registered the transfer or
exchange of any Series A Preferred Securities so selected for redemption,
except, in the case of any Series A Preferred Securities being redeemed in part,
any portion thereof not to be redeemed.
Information Concerning the Property Trustee
The Property Trustee, other than during the occurrence and continuance
of an Event of Default, undertakes to perform only such duties as are
specifically set forth in the Trust Agreement and, after such Event of Default,
must exercise the same degree of care and skill as a prudent person would
exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the Trust Agreement at the request of any holder of the
Series A Preferred Securities unless it is offered reasonable indemnity against
the costs, expenses and liabilities that might be incurred thereby. If no Event
of Default has occurred and is continuing and the Property Trustee is required
to decide between alternative causes of action, construe ambiguous provisions in
the Trust Agreement or is unsure of the application of any provision of the
Trust Agreement, and the matter is not one on which holders of the Series A
Preferred Securities are entitled under the Trust Agreement to vote, then the
Property Trustee shall take such action as is directed by the Corporation and if
not so directed, shall take such action as it deems advisable and in the best
interests of the holders of the Series A Securities and will have no liability
except for its own bad faith, negligence or willful misconduct.
Miscellaneous
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Series A Issuer in such a way that the Series A
Issuer will not be deemed to be an "investment company" required to be
registered under the Investment Company Act or classified as an association
taxable as a corporation for United States federal income tax purposes and so
that the Series A Subordinated Debentures are treated as indebtedness of the
Corporation for United States federal income tax purposes. In this connection,
the Corporation and the Administrative Trustees are authorized to take any
action, not inconsistent with applicable law, the certificate of trust or the
Trust Agreement, that the Corporation and the Administrative Trustees determine
in their discretion to be necessary or desirable for such purposes, as long as
such action does not materially adversely affect the interests of the holders of
the Series A Preferred Securities.
Holders of the Series A Preferred Securities have no preemptive or
similar rights.
The Series A Issuer may not borrow money or issue debt or mortgage or
pledge any of its assets.
DESCRIPTION OF THE SERIES A SUBORDINATED DEBENTURES
-35-
<PAGE>
The Series A Subordinated Debentures have been issued under an Indenture
(the "Indenture") between the Corporation and The Bank of New York, as trustee
(the "Debenture Trustee"). This summary of certain terms and provisions of the
Series A Subordinated Debentures and the Indenture does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
the Indenture, the form of which is available from the Corporation. All material
terms of the Series A Subordinated Debentures are set forth in this Prospectus.
General
Concurrently with the issuance of the Series A Preferred Securities in
the December Securities Sale, the Series A Issuer invested the proceeds thereof,
together with the consideration paid by the Corporation for the Series A Common
Securities, in the Series A Subordinated Debentures issued by the Corporation.
The Series A Subordinated Debentures bear interest at the annual rate of 8/5//8%
of the principal amount thereof, payable semi-annually in arrears on June 30 and
December 31 of each year (each, an "Interest Payment Date"), commencing June 30,
1997, to the person in whose name each Series A Subordinated Debenture is
registered, subject to certain exceptions, at the close of business on the
Business Day next preceding such Interest Payment Date. It is anticipated that,
until the liquidation, if any, of the Series A Issuer, the Series A Subordinated
Debentures will be held in the name of the Property Trustee in trust for the
benefit of the holders of the Series A Preferred Securities. The amount of
interest payable for any period less than a full interest period will be
computed on the basis of a 360-day year of twelve 30-day months. In the event
that any date on which interest is payable on the Series A Subordinated
Debentures is not a Business Day, then payment of the interest payable on such
date will be made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay), except that, if
such Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on the date such payment was originally payable. Accrued
interest that is not paid on the applicable Interest Payment Date will bear
additional interest on the amount thereof (to the extent permitted by law) at
the rate per annum of 8/5//8% thereof, compounded semi-annually from the
relevant Interest Payment Date. The term "interest" as used herein shall include
semi-annual interest payments, interest on semi-annual interest payments not
paid on the applicable Interest Payment Date and Additional Sums, as applicable.
See "--Additional Sums" below.
The Series A Subordinated Debentures will mature on December 31, 2026
(the "Stated Maturity").
The Series A Subordinated Debentures are unsecured and rank junior and
are subordinate in right of payment to all Senior Debt of the Corporation.
Because the Corporation is a holding company, the right of the Corporation to
participate in any distribution of assets of any subsidiary, including Riggs
Bank, upon such subsidiary's liquidation or reorganization or otherwise, is
subject to the prior claims of creditors of that subsidiary, except to the
extent that the Corporation may itself be recognized as a creditor of that
subsidiary. Accordingly, the Series A Subordinated Debentures are effectively
subordinated to all existing and future liabilities of the Corporation's
subsidiaries, and holders of the Series A Subordinated Debentures should look
only to the assets of the Corporation for payments on the Series A Subordinated
Debentures. The Indenture does not limit the incurrence or issuance of other
secured or unsecured debt of the Corporation, including Senior Debt, whether
under the Indenture or any existing or other indenture that the Corporation may
enter into in the future or otherwise.
The Corporation is a legal entity separate and distinct from its banking
and other subsidiaries. A major portion of the Corporation's revenues results
from amounts paid as dividends to the Corporation by its national bank
subsidiary, Riggs Bank. The prior approval of the OCC is required if the total
of all dividends declared by a national bank in any calendar year will exceed
the sum of such bank's net profits for that year and its retained net profits
for the preceding two calendar years, less any required transfers to surplus.
Federal law also prohibits any national bank from paying dividends which would
be greater than such bank's undivided profits after deducting statutory bad
debts in excess of such bank's allowance for loan losses.
In addition, the Corporation and its national bank subsidiary are
subject to various general regulatory policies and requirements relating to the
payment of dividends, including requirements to maintain adequate capital above
-36-
<PAGE>
regulatory minimums. The appropriate federal regulatory authority is authorized
to determine under certain circumstances relating to the financial condition of
a national bank or bank holding company that the payment of dividends would be
an unsafe or unsound practice and to prohibit payment thereof. The OCC and the
Federal Deposit Insurance Corporation (the "FDIC") have indicated that paying
dividends that deplete a bank's capital base to an inadequate level would be an
unsound and unsafe banking practice. The OCC, the FDIC and the Federal Reserve
have each indicated that banking organizations should generally pay dividends
only out of current operating earnings.
Right to Defer Interest Payment Obligation
So long as no event of default under the Indenture has occurred and is
continuing, the Corporation has the right under the Indenture at any time during
the term of the Series A Subordinated Debentures to defer the payment of
interest on the Series A Subordinate Debentures for a period not exceeding 10
consecutive semi-annual periods with respect to each Extension Period, provided
that no Extension Period may extend beyond the Stated Maturity of the Series A
Subordinated Debentures. At the end of such Extension Period, the Corporation
must pay all interest then accrued and unpaid on the Series A Subordinate
Debentures (together with interest on such unpaid interest at the annual rate of
8/5//8%, compounded semi-annually from the relevant Interest Payment Date, to
the extent permitted by applicable law). During an Extension Period, interest
will continue to accrue and holders of the Series A Subordinated Debentures (or
holders of the Series A Preferred Securities while outstanding) will be required
to accrue interest income for United States federal income tax purposes. See
"Certain Federal Income Tax Consequences--Original Issue Discount".
During any such Extension Period, the Corporation may not, and may not
permit any subsidiary of the Corporation to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Corporation's capital stock or (ii) make any payment
of principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities of the Corporation that rank pari passu with or junior in
interest to the Series A Subordinated Debentures or make any guarantee payments
with respect to any guarantee by the Corporation of the debt securities of any
subsidiary of the Corporation if such guarantee ranks pari passu with or junior
in interest to the Series A Subordinated Debentures (other than (a) dividends or
distributions in common stock of the Corporation, (b) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
the issuance of stock under any such plan in the future or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the Series A
Guarantee and (d) purchases of common stock related to the issuance of common
stock or rights under any of the Corporation's benefit plans for its directors,
officers or employees). Prior to the termination of any such Extension Period,
the Corporation may further defer the payment of interest, provided that no
Extension Period may exceed 10 consecutive semi-annual periods or extend beyond
the Stated Maturity of the Series A Subordinated Debentures. Upon the
termination of any such Extension Period and the payment of all interest then
accrued and unpaid (together with interest thereon at the annual rate of
8/5//8%, compounded semi-annually, to the extent permitted by applicable law),
the Corporation may elect to begin a new Extension Period subject to the above
requirements. No interest shall be due and payable during an Extension Period,
except at the end thereof. The Corporation must give the Property Trustee, the
Administrative Trustees and the Debenture Trustee notice of its election of such
Extension Period at least one Business Day prior to the earlier of (i) the date
interest on the Series A Subordinated Debentures would have been payable except
for the election to begin such Extension Period or (ii) the date the
Administrative Trustees are required to give notice to DTC or to holders of the
Series A Preferred Securities of the record date for such Distribution or the
date such Distributions are payable, but in any event not less than one Business
Day prior to such record date. The Debenture Trustee shall give notice of the
Corporation's election to begin a new Extension Period to the holders of the
Series A Subordinated Debentures. There is no limitation on the number of times
that the Corporation may elect to begin an Extension Period.
Additional Sums
-37-
<PAGE>
If the Series A Issuer is required to pay any additional taxes, duties
or other governmental charges as a result of a Tax Event, the Corporation will
pay as additional amounts on the Series A Subordinated Debentures such amounts
("Additional Sums") as shall be required so that the Distributions payable by
the Series A Issuer shall not be reduced as a result of any such additional
taxes, duties or other governmental charges.
Optional Redemption
The Series A Subordinated Debentures are redeemable, in whole at any
time or in part from time to time, at the option of the Corporation on or after
December 31, 2006, subject to the Corporation having received prior approval of
the Federal Reserve if then required under applicable capital guidelines or
policies, at a redemption price (the "Optional Redemption Price") equal to the
percentage of the outstanding principal amount of the Series A Subordinated
Debentures specified below, plus, in each case, accrued interest thereon to the
date of redemption, if redeemed during the 12-month period beginning December
31, in the year indicated:
Optional
--------
Date Redemption Price
---- ----------------
2006.................. 104.313%
2007.................. 103.881%
2008.................. 103.450%
2009.................. 103.019%
2010.................. 102.588%
2011.................. 102.156%
2012.................. 101.725%
2013.................. 101.294%
2014.................. 100.863%
2015.................. 100.431%
2016 and thereafter .. 100.000%
Tax Event or Capital Treatment Event Redemption
If a Tax Event or a Capital Treatment Event (as defined below) shall
occur and be continuing, the Corporation may, at its option and subject to
receipt of prior approval by the Federal Reserve if then required under
applicable capital guidelines or policies, redeem the Series A Subordinated
Debentures in whole (but not in part) at any time within 90 days following the
occurrence of such Tax Event or Capital Treatment Event, at a redemption price
(the "Tax or Capital Event Redemption Price") equal to the Make-Whole Amount
plus, in each case, accrued and unpaid interest on the Series A Subordinated
Debentures to the date fixed for redemption. The "Make-Whole Amount" shall be
equal to the greater of (i) 100% of the principal amount of the Series A
Subordinated Debentures or (ii) as determined by a Quotation Agent (as defined
below), the sum of the present values of the principal amount and premium
payable as part of the Optional Redemption Price with respect to an optional
redemption of such Series A Subordinated Debentures on December 31, 2006,
together with scheduled payments of interest from the Redemption Date to
December 31, 2006 (the "Remaining Life"), in each case discounted to the
Redemption Date on a semi-annual basis (assuming a 360-day year consisting of
30-day months) at the Adjusted Treasury Rate.
"Adjusted Treasury Rate" means, with respect to any redemption date, the
Treasury Rate plus (i) 1.70% if such Redemption Date occurs on or before
December 31, 1997 or (ii) 0.95% if such Redemption Date occurs after December
31, 1997.
"Treasury Rate" means (i) the yield, under the heading which represents
the average for the immediately prior week, appearing in the most recently
published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Federal Reserve and which
establishes yields on actively traded United
-38-
<PAGE>
States Treasury securities adjusted to constant maturity under the caption
"Treasury Constant Maturities", for the maturity corresponding to the Remaining
Life (if no maturity is within three months before or after the Remaining Life,
yields for the two published maturities most closely corresponding to the
Remaining Life shall be determined and the Treasury Rate shall be interpolated
or extrapolated from such yields on a straight-line basis, rounding to the
nearest month) or (ii) if such release (or any successor release) is not
published during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such Redemption Date. The Treasury
Rate shall be calculated on the third Business Day preceding the Redemption
Date.
"Comparable Treasury Issue" means with respect to any Redemption Date
the United States Treasury security selected by the Quotation Agent as having a
maturity comparable to the Remaining Life that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the Remaining
Life. If no United States Treasury security has a maturity which is within a
period from three months before to three months after December 31, 2006, the two
most closely corresponding United States Treasury securities shall be used as
the Comparable Treasury Issue, and the Treasury Rate shall be interpolated or
extrapolated on a straight-line basis, rounding to the nearest month using such
securities.
"Quotation Agent" means Dillon, Read & Co. Inc. and its respective
successors; provided, however, that if the foregoing shall cease to be a primary
U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Corporation shall substitute therefor another Primary Treasury
Dealer. "Reference Treasury Dealer" means (i) the Quotation Agent and (ii) any
other Primary Treasury Dealer selected by the Debenture Trustee after
consultation with the Corporation.
"Comparable Treasury Price" means (A) the average of five Reference
Treasury Dealer Quotations for such Redemption Date, after excluding the highest
and lowest such Reference Treasury Dealer Quotations, or (B) if the Debenture
Trustee obtains fewer than three such Reference Treasury Dealer Quotations, the
average of all such Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Debenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Debenture Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such Redemption Date.
"Tax Event" means the receipt by the Series A Issuer of an opinion of
counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of issuance of
such Series A Preferred Securities under the Trust Agreement, there is more than
an insubstantial risk that (i) the Series A Issuer is, or will be within 90 days
of the date of such opinion, subject to United States federal income tax with
respect to income received or accrued on the Series A Subordinated Debentures,
(ii) interest payable by the Corporation on the Series A Subordinated Debentures
is not, or within 90 days of such the date of opinion, will not be, deductible
by the Corporation, in whole or in part, for United States federal income tax
purposes or (iii) the Series A Issuer is, or will be within 90 days of the date
of the opinion, subject to more than a de minimis amount of other taxes, duties
or other governmental charges.
"Capital Treatment Event" means the reasonable determination by the
Corporation that, as a result of the occurrence of any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision thereof or
therein, or as a result of any official or administrative pronouncement or
action or judicial decision interpreting or applying such laws or regulations,
which amendment or change is effective or such pronouncement, action or decision
is announced on or
-39-
<PAGE>
after the date of issuance of the Series A Preferred Securities under the Trust
Agreement, there is more than an insubstantial risk that the Corporation will
not be entitled to treat an amount equal to the Liquidation Amount of the Series
A Preferred Securities as "Tier I Capital" (or the then equivalent thereof) for
purposes of the capital adequacy guidelines of the Federal Reserve, as then in
effect and applicable to the Corporation.
"Like Amount" means (i) with respect to a redemption of the Series A
Preferred Securities, Series A Preferred Securities having a Liquidation Amount
equal to that portion of the principal amount of the Series A Subordinated
Debentures to be contemporaneously redeemed in accordance with the Indenture,
allocated to the Series A Common Securities and to the Series A Preferred
Securities pro rata based upon the relative Liquidation Amounts of such
Securities and the proceeds of which will be used to pay the Redemption Price of
such Series A Preferred Securities and (ii) with respect to a distribution of
the Series A Subordinated Debentures to holders of the Series A Preferred
Securities in exchange therefor in connection with a dissolution or liquidation
of the Series A Issuer, Series A Subordinated Debentures having a principal
amount equal to the Liquidation Amount of the Series A Preferred Securities of
the holder to whom such Series A Subordinated Debentures would be distributed.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of the Series A
Subordinated Debentures to be redeemed at its registered address. Unless the
Corporation defaults in payment of the Redemption Price, on and after the
redemption date, interest shall cease to accrue on the Series A Subordinated
Debentures or portions thereof called for redemption.
Restrictions on Certain Payments
The Corporation has also covenanted, as to the Series A Subordinated
Debentures, that it will not, and will not permit any subsidiary of the
Corporation to, (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Corporation's capital stock, (ii) make any payment of principal, interest or
premium, if any, on or repay or repurchase or redeem any debt securities of the
Corporation that rank pari passu with or junior in interest to the Series A
Subordinated Debentures or (iii) make any guarantee payments with respect to any
guarantee by the Corporation of the debt securities of any subsidiary of the
Corporation if such guarantee ranks pari passu with or junior in interest to the
Series A Subordinated Debentures (other than (a) dividends or distributions in
common stock of the Corporation, (b) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, the issuance of stock
under any such plan in the future or the redemption or repurchase of any such
rights pursuant thereto, (c) payments under the Series A Guarantee and (d)
purchases of common stock related to the issuance of common stock or rights
under any of the Corporation's benefit plans for its directors, officers or
employees), if at such time (i) there shall have occurred any event of which the
Corporation has actual knowledge (a) that with the giving of notice or the lapse
of time, or both, would constitute an event of default under the Indenture with
respect to the Series A Subordinated Debentures and (b) in respect of which the
Corporation shall not have taken reasonable steps to cure, (ii) if the Series A
Subordinated Debentures are held by the Series A Issuer, the Corporation shall
be in default with respect to its payment of any obligations under the Series A
Guarantee relating to the Series A Preferred Securities or (iii) the Corporation
shall have given notice of its election of an Extension Period as provided in
the Indenture and shall not have rescinded such notice, or such Extension
Period, or any extension thereof, shall be continuing.
Modification of Indenture
From time to time the Corporation and the Debenture Trustee may, without
the consent of the holders of the Series A Subordinated Debentures, amend, waive
or supplement the Indenture for specified purposes, including, among other
things, curing ambiguities, defects or inconsistencies, provided that any such
action does not materially adversely affect the interest of the holders of the
Series A Subordinated Debentures, and qualifying, or maintaining the
qualification of, the Indenture under the Trust Indenture Act. The Indenture
contains provisions permitting the Corporation and the Debenture Trustee, with
the consent of the holders of not less than a majority in principal amount of
the Series A Subordinated Debentures affected, to modify the Indenture in a
manner affecting the rights of the holders of the Series A Subordinated
Debentures; provided that no such modification may, without the consent
-40-
<PAGE>
of the holder of each outstanding Series A Subordinated Debenture so affected,
(i) change the Stated Maturity of the Series A Subordinated Debentures, (ii)
reduce the principal amount thereof or reduce the rate or extend the time of
payment of interest thereon or (iii) reduce the percentage of principal amount
of the Series A Subordinated Debentures, the holders of which are required to
consent to any such modification of the Indenture; and, further provided that
where a consent under the Indenture would require the consent of each holder of
the Series A Subordinated Debentures affected thereby, no such consent shall be
given by the Property Trustee without the prior consent of each holder of the
Series A Preferred Securities.
Debenture Events of Default
The Indenture provides that any one or more of the following described
events with respect to the Series A Subordinated Debentures that has occurred
and is continuing constitutes a "Debenture Event of Default":
(i) failure for 30 days to pay interest on the Series A Subordinated
Debentures when due (subject to the deferral of any due date in the case of an
Extension Period); or
(ii) failure to pay any principal on the Series A Subordinated
Debentures when due, whether at maturity, upon redemption by declaration or
otherwise; or
(iii) failure to observe or perform in any material respect certain
other covenants contained in the Indenture for 90 days after written notice to
the Corporation from the Debenture Trustee or the holders of at least 25% in
aggregate outstanding principal amount of the outstanding Series A Subordinated
Debentures; or
(iv) certain events of bankruptcy, insolvency or reorganization of the
Corporation.
The holders of a majority in aggregate outstanding principal amount of
the Series A Subordinated Debentures have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Debenture
Trustee. The Debenture Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of the Series A Subordinated Debentures may declare
the principal due and payable immediately upon a Debenture Event of Default,
and, should the Debenture Trustee or such holders of the Series A Subordinated
Debentures fail to make such declaration, the holders of at least 25% in
aggregate Liquidation Amount of the Series A Preferred Securities shall have
such right. The holders of a majority in aggregate outstanding principal amount
of the Series A Subordinated Debentures may annul such declaration and waive the
default if the default (other than the non-payment of the principal of the
Series A Subordinated Debentures which has become due solely by such
acceleration) has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration has
been deposited with the Debenture Trustee, and should the holders of the Series
A Subordinated Debentures fail to waive such default, the holders of a majority
in aggregate Liquidation Amount of the Series A Preferred Securities shall have
such right.
The holders of a majority in aggregate outstanding principal amount of
the Series A Subordinated Debentures affected thereby may, on behalf of the
holders of all the Series A Subordinated Debentures, waive any past default,
except a default in the payment of principal or interest (unless such default
has been cured and a sum sufficient to pay all matured installments of interest
and principal due otherwise than by acceleration has been deposited with the
Debenture Trustee) or a default in respect of a covenant or provision which
under the Indenture cannot be modified or amended without the consent of the
holder of each outstanding Series A Subordinated Debenture and should the
holders of the Series A Subordinated Debentures fail to waive such default, the
holders of a majority in aggregate Liquidation Amount of the Series A Preferred
Securities shall have such right. The Corporation is required to file annually
with the Debenture Trustee a certificate as to whether or not the Corporation is
in compliance with all the conditions and covenants applicable to it under the
Indenture.
Enforcement of Certain Rights by Holders of the Series A Preferred Securities
-41-
<PAGE>
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Corporation to pay interest or
principal on the Series A Subordinated Debentures on the date such interest or
principal is otherwise payable, a holder of the Series A Preferred Securities
may institute a legal proceeding directly against the Corporation for
enforcement of payment to such holder of the principal of or interest on the
Series A Subordinated Debentures having a principal amount equal to the
aggregate Liquidation Amount of the Series A Preferred Securities of such holder
(a "Direct Action"). The Corporation may not amend the Indenture to remove the
foregoing right to bring a Direct Action without the prior written consent of
the holders of all of the Series A Preferred Securities. If the right to bring a
Direct Action is removed, the Series A Issuer may become subject to the
reporting obligations under the Exchange Act. The Corporation shall have the
right under the Indenture to set off any payment made to such holder of the
Series A Preferred Securities by the Corporation in connection with a Direct
Action.
The holders of the Series A Preferred Securities will not be able to
exercise directly any remedies other than those set forth in the preceding
paragraph available to the holders of the Series A Subordinated Debentures. See
"Description of the Series A Preferred Securities--Events of Default; Notice".
Consolidation, Merger, Sale of Assets and Other Transactions
The Indenture provides that the Corporation shall not consolidate with
or merge into any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, and no Person shall
consolidate with or merge into the Corporation or convey, transfer or lease its
properties and assets substantially as an entirety to the Corporation, unless:
(i) in the event the Corporation consolidates with or merges into another
Person, or conveys or transfers its properties and assets substantially as an
entirety to any Person, the successor Person is organized under the laws of the
United States or any state or the District of Columbia, and such successor
Person expressly assumes the Corporation's obligations on the Series A
Subordinated Debentures issued under the Indenture; (ii) immediately after
giving effect thereto, no Debenture Event of Default, and no event which, after
notice or lapse of time or both, would become a Debenture Event of Default,
shall have occurred and be continuing; (iii) if at the time any Series A
Preferred Securities are outstanding, such transaction is permitted under the
Trust Agreement and Guarantee and does not give rise to any breach or violation
of the Trust Agreement or Guarantee; and (iv) certain other conditions as
prescribed by the Indenture are met.
The general provisions of the Indenture do not afford holders of the
Series A Subordinated Debentures protection in the event of a highly leveraged
or other transaction involving the Corporation that may adversely affect holders
of the Series A Subordinated Debentures.
Satisfaction and Discharge
The Indenture provides that when, among other things, all of the Series
A Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation (i) have become due and payable or (ii) will become due and payable
at their Stated Maturity within one year, and the Corporation deposits or causes
to be deposited with the Debenture Trustee funds, in trust, for the purpose and
in an amount in the currency or currencies in which the Series A Subordinated
Debentures are payable sufficient to pay and discharge the entire indebtedness
on the Series A Subordinated Debentures not previously delivered to the
Debenture Trustee for cancellation, for the principal and interest to the date
of the deposit or to the Stated Maturity, as the case may be, then the Indenture
will cease to be of further effect (except as to the Corporation's obligations
to pay all other sums due pursuant to the Indenture and to provide the officers'
certificates and opinions of counsel described therein), and the Corporation
will be deemed to have satisfied and discharged the Indenture.
-42-
<PAGE>
Subordination
In the Indenture, the Corporation has covenanted and agreed that the Series A
Subordinated Debentures issued thereunder are subordinate and junior in right of
payment to all Senior Debt (as defined below) to the extent provided in the
Indenture. Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding-up, reorganization, assignment for the benefit
of creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Corporation, the holders of Senior Debt will first
be entitled to receive payment in full of principal of (or premium, if any) and
interest, if any, on such Senior Debt before the holders of the Series A
Subordinated Debentures, or the Property Trustee on behalf of the holders, will
be entitled to receive or retain any payment in respect of the principal of (or
premium, if any) or interest, if any, on the Series A Subordinated Debentures.
In the event of the acceleration of the maturity of any of the Series A
Subordinated Debentures, the holders of all Senior Debt outstanding at the time
of such acceleration will first be entitled to receive payment in full of all
amounts due thereon (including any amounts due upon acceleration) before the
holders of the Series A Subordinated Debentures will be entitled to receive or
retain any payment in respect of the principal of (or premium, if any) or
interest, if any, on the Series A Subordinated Debentures.
No payments on account of principal (or premium, if any) or interest, if any,
in respect of the Series A Subordinated Debentures may be made if there shall
have occurred and be continuing a default in any payment with respect to Senior
Debt or an event of default with respect to any Senior Debt resulting in the
acceleration of the maturity thereof, or if any judicial proceeding shall be
pending with respect to any such default.
"Debt" means with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent: (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; (vi) all
obligations of such Person for claims in respect of derivative products,
including interest rate, foreign exchange rate and commodity forward contracts,
options and swaps and similar arrangements; and (vii) every obligation of the
type referred to in clauses (i) through (vi) of another Person and all dividends
of another Person the payment of which, in either case, such Person has
guaranteed or is responsible or liable, directly or indirectly, as obligor or
otherwise.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Corporation whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of the Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Series A Subordinated Debentures or to other
Debt which is pari passu with, or subordinated to, the Series A Subordinated
Debentures; provided, however, that Senior Debt shall not be deemed to include:
(i) any Debt of the Corporation which when incurred and without respect to any
election under Section 1111(b) of the United States Bankruptcy Code of 1978, as
amended, was without recourse to the Corporation, (ii) any Debt of the
Corporation to any of its subsidiaries and (iii) Debt to any employee of the
Corporation.
The Indenture places no limitation on the amount of Senior Debt or
subordinated debt which is pari passu with the Series A Subordinated Debentures,
that may be incurred by the Corporation. The Corporation expects from time to
time to incur additional indebtedness constituting Senior Debt.
Governing Law
-43-
<PAGE>
The Indenture and the Series A Subordinated Debentures are governed by and
construed in accordance with the laws of the State of New York.
Information Concerning the Debenture Trustee
The Debenture Trustee is subject to all the duties and responsibilities
specified with respect to an indenture trustee under the Trust Indenture Act.
Subject to such provisions, the Debenture Trustee is under no obligation to
exercise any of the powers vested in it by the Indenture at the request of any
holder of the Series A Subordinated Debentures, unless offered reasonable
indemnity by such holder against the costs, expenses and liabilities which might
be incurred thereby. The Debenture Trustee is not required to expend or risk its
own funds or otherwise incur personal financial liability in the performance of
its duties if the Debenture Trustee reasonably believes that repayment or
adequate indemnity is not reasonably assured to it.
Distribution of the Series A Subordinated Debentures
As described under "Description of the Series A Preferred Securities--
Liquidation of the Series A Issuer and Distribution of the Series A Subordinated
Debentures to Holders", under certain circumstances involving the termination of
the Series A Issuer, Series A Subordinated Debentures may be distributed to the
holders of the Series A Preferred Securities in exchange therefor upon
liquidation of the Series A Issuer, after satisfaction of liabilities to
creditors of the Series A Issuer as provided by applicable law. If distributed
to holders of the Series A Preferred Securities in liquidation, the Series A
Subordinated Debentures will initially be issued in the form of global
securities and, in the case of Series A Subordinated Debentures in respect of
Other Series A Preferred Securities, certificated securities. DTC, or any
successor depositary for the Series A Preferred Securities, will act as
depositary for the Series A Subordinated Debentures in global form. It is
anticipated that the depositary arrangements for the Series A Subordinated
Debentures in global form would be substantially identical to those in effect
for the Series A Preferred Securities. For a description of global securities
and certificated securities, see "Book-Entry Issuance."
There can be no assurance as to the market price of any Series A Subordinated
Debentures that may be distributed to the holders of the Series A Preferred
Securities.
Payment and Paying Agents
Payment of principal (premium, if any) of any interest on the Series A
Subordinated Debentures will be made, the transfer of the Series A Subordinated
Debentures will be registrable, and Series A Subordinated Debentures will be
exchangeable for Series A Subordinated Debentures of other denominations of a
like aggregate principal amount, at the offices of the Debenture Trustee in The
City of New York or at the offices of such Paying Agent or Paying Agents as the
Corporation may designate from time to time, except that at the option of the
Corporation payment of any interest may be made (i) except in the case of Series
A Subordinated Debentures held in the name of the Property Trustee, by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Securities Register or (ii) by transfer to an account maintained
by the Person entitled thereto as specified in the Securities Register, provided
that proper transfer instructions have been received by June 15th or December
15th preceding the date for the payment of interest (the "Regular Record Date").
Payment of any interest on the Series A Subordinated Debentures will be made to
the Person in whose name the Series A Subordinated Debenture is registered at
the close of business on the Regular Record Date for such interest, except in
the case of Defaulted Interest. The Corporation may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent;
however, the Corporation will at all times be required to maintain a Paying
Agent in each Place of Payment for the Series A Subordinated Debentures. See
"Book-Entry Issuance."
Any moneys deposited with the Debenture Trustee or any Paying Agent, or then
held by the Corporation in trust, for the payment of the principal (or premium,
if any) of or interest on the Series A Subordinated Debentures and remaining
unclaimed for two years after such principal (or premium, if any) or interest
has become due and payable shall, at the request of the Corporation, be repaid
to the Corporation and the holders of the Series A
-44-
<PAGE>
Subordinated Debentures shall thereafter look, as general unsecured creditors,
only to the Corporation for payment thereof.
BOOK-ENTRY ISSUANCE
DTC acts as securities depositary for all of the Series A Preferred Securities
and the Series A Subordinated Debentures, except for Series A Preferred
Securities issued to certain institutional investors described below. The Series
A Preferred Securities and the Series A Subordinated Debentures which were sold
in the December Securities Sale in reliance on Rule 144A have been issued in
registered, certificated (i.e. non-global) form to accredited investors and in
global form to institutional investors as fully-registered securities registered
in the name of Cede & Co. (DTC's nominee). One or more fully-registered and
global certificates have been issued for the Series A Preferred Securities and
the Series A Subordinated Debentures and have been deposited with DTC or held by
the Property Trustee or Debenture Trustee, respectively, as custodian for DTC.
DTC is a limited purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its Participants deposit with DTC. DTC also facilitates
the settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. "Direct Participants" include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations. DTC is owned by a number of its Direct Participants and by
the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain custodial relationships with Direct
Participants, either directly or indirectly ("Indirect Participants"). The rules
applicable to DTC and its participants are on file with the Commission.
Purchases of Series A Preferred Securities or Series A Subordinated Debentures
within the DTC system must be made by or through Direct Participants, which will
receive a credit for the Series A Preferred Securities or Series A Subordinated
Debentures on DTC's records. The ownership interest of each actual purchaser of
each Series A Preferred Security and each Series A Subordinated Debenture
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial owners will not receive written confirmation
from DTC of their purchases, but Beneficial owners are expected to receive
written confirmations providing details of the transactions, as well as periodic
statements of their holdings, from the Direct or Indirect Participants through
which the Beneficial Owners purchased Series A Preferred Securities or Series A
Subordinated Debentures. Transfers of ownership interests in the Series A
Preferred Securities or Series A Subordinated Debentures are to be accomplished
by entries made on the books of Participants acting on behalf of Beneficial
Owners. Beneficial Owners will not receive certificates representing their
ownership interests in Series A Preferred Securities or Series A Subordinated
Debentures held through DTC, except in the event that use of the book-entry
system for the Series A Preferred Securities or Series A Subordinated Debentures
is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Series A Preferred
Securities or Series A Subordinated Debentures; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Series A Preferred
Securities or Series A Subordinated Debentures are credited, which may or may
not be the Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants,
by Direct Participants to Indirect Participants, and by Direct Participants and
Indirect Participants to Beneficial Owners and the voting rights of Direct
Participants, Indirect Participants and Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
-45-
<PAGE>
Redemption notices with respect to Series A Preferred Securities or Series A
Subordinated Debentures will be sent to Cede & Co. as the registered holder of
the Series A Preferred Securities or Series A Subordinated Debentures. If less
than all of the Series A Preferred Securities or the Series A Subordinated
Debentures are being redeemed, DTC's current practice is to determine by lot the
amount of the interest of each Direct Participant to be redeemed.
Although voting with respect to the Series A Preferred Securities or the
Series A Subordinated Debentures is limited to the holders of record of the
Series A Preferred Securities or Series A Subordinated Debentures, in those
instances in which a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to Series A Preferred Securities or Series A
Subordinated Debentures. Under its usual procedures, DTC would mail an omnibus
proxy (the "Omnibus Proxy") to the relevant Trustee as soon as possible after
the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting
rights to those Direct Participants to whose accounts such Series A Preferred
Securities or Series A Subordinated Debentures are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Distribution payments on the Series A Preferred Securities or the Series A
Subordinated Debentures will be made by the relevant Trustee to DTC. DTC's
practice is to credit Direct Participants' accounts on the relevant payment date
in accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payments on such payment date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices and will be the responsibility of such
statutory or regulatory requirements as may be in effect from time to time.
Payment of Distributions to DTC is the responsibility of the relevant Trustee,
disbursement of such payments to Direct Participants is the responsibility of
DTC, and disbursements of such payments to the Beneficial Owners is the
responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depositary with
respect to any of the Series A Preferred Securities or the Series A Subordinated
Debentures at any time by giving reasonable notice to the relevant Trustee and
the Corporation. In the event that a successor securities depositary is not
obtained, definitive Series A Preferred Securities or Series A Subordinated
Debentures certificates representing such Series A Preferred Securities or
Series A Subordinated Debentures are required to be printed and delivered. The
Corporation, at its option, may decide to discontinue use of the system of book-
entry transfers through DTC (or a successor depositary). After a Debenture Event
of Default, the holders of a majority in liquidation preference of Series A
Preferred Securities or aggregate principal amount of Series A Subordinated
Debentures may determine to discontinue the system of book-entry transfers
through DTC. In any such event, definitive certificates for such Series A
Preferred Securities or Series A Subordinated Debentures will be printed and
delivered.
The information in this section concerning DTC and DTC's book-entry system has
been obtained from sources that the Series A Issuer and the Corporation believe
to be accurate, but the Series A Issuer and the Corporation assume no
responsibility for the accuracy thereof. Neither the Series A Issuer nor the
Corporation has any responsibility for the performance by DTC or its
Participants of their respective obligations as described herein or under the
rules and procedures governing their respective operations.
DESCRIPTION OF THE SERIES A GUARANTEE
A Guarantee was executed and delivered by the Corporation concurrently with
the issuance of the Series A Preferred Securities for the benefit of the holders
from time to time of such Series A Preferred Securities (the "Series A
Guarantee"). The Bank of New York acts as indenture trustee ("Guarantee
Trustee") under the Series A Guarantee, and the Series A Guarantee has been
qualified as an indenture under the Trust Indenture Act. This summary of certain
provisions of the Series A Guarantee does not purport to be complete and is
subject to, and qualified in its entirety by reference to, all of the provisions
of the Series A Guarantee, including the definitions therein of certain terms,
and the Trust Indenture Act. All material terms of the Series A Guarantee are
set forth in this Prospectus. A copy of the Series A Guarantee may be obtained
from the Corporation. The Guarantee Trustee holds the Series A Guarantee for the
benefit of the holders of the Series A Preferred Securities.
-46-
<PAGE>
General
The Corporation has irrevocably agreed to pay in full on a subordinated basis,
to the extent set forth herein, the Guarantee Payments (as defined below) to the
holders of the Series A Preferred Securities, as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer may have or assert
other than the defense of payment. The following payments with respect to the
Series A Preferred Securities, to the extent not paid by or on behalf of the
Series A Issuer (the "Guarantee Payments"), are subject to the Series A
Guarantee: (i) any accumulated and unpaid Distributions required to be paid on
the Series A Preferred Securities, to the extent that the Series A Issuer has
funds on hand available therefor at such time, (ii) the Redemption Price with
respect to the Series A Preferred Securities called for redemption, to the
extent that the Series A Issuer has funds on hand available therefor at such
time and (iii) upon a voluntary or involuntary dissolution, winding up or
liquidation of the Series A Issuer (unless the Series A Subordinated Debentures
are distributed to holders of the Series A Preferred Securities), the lesser of
(a) the Liquidation Distribution and (b) the amount of assets of the Series A
Issuer remaining available for distribution to holders of the Series A Preferred
Securities after satisfaction of liabilities to creditors of the Series A Issuer
as required by applicable law. The Corporation's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Corporation to the holders of the Series A Preferred Securities or by causing
the Series A Issuer to pay such amounts to such holders.
The Series A Guarantee is an irrevocable guarantee on a subordinated basis of
the Series A Issuer's obligations under the Series A Preferred Securities, but
applies only to the extent that the Series A Issuer has funds sufficient to make
such payments, and is not a guarantee of collection.
If the Corporation does not make interest payments on the Series A
Subordinated Debentures held by the Series A Issuer, the Series A Issuer will
not be able to pay Distributions on the Series A Preferred Securities and will
not have funds legally available therefor. The Series A Guarantee ranks
subordinate and junior in right of payment to all Senior Debt of the
Corporation. See "--Status of the Series A Guarantee". Because the Corporation
is a holding company, the right of the Corporation to participate in any
distribution of assets of any subsidiary upon such subsidiary's liquidation or
reorganization or otherwise is subject to the prior claims of creditors of that
subsidiary, except to the extent the Corporation may itself be recognized as a
creditor of that subsidiary. Accordingly, the Corporation's obligations under
the Guarantee are effectively subordinated to all existing and future
liabilities of the Corporation's subsidiaries, and claimants should look only to
the assets of the Corporation for payments thereunder. See "The Corporation".
The Series A Guarantee does not limit the incurrence or issuance of other
secured or unsecured debt of the Corporation, including Senior Debt, whether
under the Indenture, any other indenture that the Corporation may enter into in
the future, or otherwise.
The Corporation has, through the Series A Guarantee, the Trust Agreement, the
Series A Subordinated Debentures, the Indenture and the Expense Agreement, taken
together, fully, irrevocably and unconditionally guaranteed all of the Series A
Issuer's obligations under the Series A Preferred Securities. No single document
standing alone or operating in conjunction with fewer than all of the other
documents constitutes such guarantee. It is only the combined operation of these
documents that has the effect of providing a full, irrevocable and unconditional
guarantee of the Series A Issuer's obligations under the Series A Preferred
Securities. See "Relationship Among the Series A Preferred Securities, the
Series A Subordinated Debentures, the Expense Agreement and the Series A
Guarantee".
Status of the Series A Guarantee
The Series A Guarantee constitutes an unsecured obligation of the Corporation
and ranks subordinate and junior in right of payment to all Senior Debt of the
Corporation in the same manner as the Series A Subordinated Debentures.
The Series A Guarantee constitutes a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding directly
against the Guarantor to enforce its rights under the Series A Guarantee without
first instituting a legal proceeding against any other person or entity). The
Series A Guarantee is held for
-47-
<PAGE>
the benefit of the holders of the Series A Preferred Securities. The Series A
Guarantee will not be discharged except by payment of the Guarantee Payments in
full to the extent not paid by the Series A Issuer or upon distribution to the
holders of the Series A Preferred Securities of the Series A Subordinated
Debentures. The Series A Guarantee does not place a limitation on the amount of
additional Senior Debt that may be incurred by the Corporation. The Corporation
expects from time to time to incur additional indebtedness constituting Senior
Debt.
Amendments and Assignment
Except with respect to any changes that do not materially adversely affect the
rights of holders of the Series A Preferred Securities (in which case no vote
will be required), the Series A Guarantee may not be amended without the prior
approval of the holders of not less than a majority of the aggregate Liquidation
Amount of such outstanding Series A Preferred Securities. The manner of
obtaining any such approval will be as set forth under "Description of the
Series A Preferred Securities--Voting Rights; Amendment of the Trust Agreement".
All guarantees and agreements contained in the Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of the Corporation
and shall inure to the benefit of the holders of the Series A Preferred
Securities then outstanding.
Events of Default
An event of default under the Series A Guarantee will occur upon the failure
of the Corporation to perform any of its payments or other obligations
thereunder. The holders of not less than a majority in aggregate Liquidation
Amount of the Series A Preferred Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of such Guarantee or to direct the exercise of any
trust or power conferred upon the Guarantee Trustee under such Guarantee.
Any holder of the Series A Preferred Securities may institute a legal
proceeding directly against the Corporation to enforce its rights under the
Series A Guarantee without first instituting a legal proceeding against the
Series A Issuer, the Guarantee Trustee or any other person or entity.
The Corporation, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not the Corporation is in compliance with
all the conditions and covenants applicable to it under the Series A Guarantee.
Information Concerning the Guarantee Trustee
The Guarantee Trustee, other than during the occurrence and continuance of a
default by the Corporation in the performance of the Series A Guarantee,
undertakes to perform only such duties as are specifically set forth in the
Series A Guarantee and, after default with respect to the Series A Guarantee,
must exercise the same degree of care and skill as a prudent person would
exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Guarantee Trustee is under no obligation to exercise any of the
powers vested in it by the Series A Guarantee at the request of any holder of
the Series A Preferred Securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby.
Termination of the Series A Guarantee
The Series A Guarantee will terminate and be of no further force and effect
upon full payment of the Redemption Price of the Series A Preferred Securities,
upon full payment of the amounts payable upon liquidation of the Series A Issuer
or upon distribution of the Series A Subordinated Debentures to the holders of
the Series A Preferred Securities in exchange therefor. The Series A Guarantee
will continue to be effective or will be reinstated, as the case may be, if at
any time any holder of the Series A Preferred Securities must restore payment of
any sums paid under the Series A Preferred Securities or the Series A Guarantee.
-48-
<PAGE>
Governing Law
The Series A Guarantee is governed by and construed in accordance with the
laws of the State of New York.
The Expense Agreement
Pursuant to the Expense Agreement entered into by the Corporation, as holder
of the Common Securities under the Trust Agreement (the "Expense Agreement"),
the Corporation has irrevocably and unconditionally guaranteed to each person or
entity to whom the Series A Issuer becomes indebted or liable, the full payment
of any costs, expenses or liabilities of the Series A Issuer, other than
obligations of the Series A Issuer to pay to the holders of the Series A
Securities the amounts due such holders pursuant to the terms of the Series A
Securities.
RELATIONSHIP AMONG THE SERIES A PREFERRED SECURITIES,
THE SERIES A SUBORDINATED DEBENTURES, THE EXPENSE
AGREEMENT AND THE SERIES A GUARANTEE
Full and Unconditional Guarantee
Payments of Distributions and other amounts due on the Series A Preferred
Securities (to the extent the Series A Issuer has funds available for the
payment of such Distributions) are irrevocably guaranteed by the Corporation as
and to the extent set forth under "Description of the Series A Guarantee". Taken
together, the Corporation's obligations under the Series A Subordinated
Debentures, the Indenture, the Trust Agreement, the Expense Agreement and the
Series A Guarantee provide, in the aggregate, a full, irrevocable and
unconditional guarantee of payments of distributions and other amounts due on
the Series A Preferred Securities. No single document standing alone or
operating in conjunction with fewer than all of the other documents constitutes
such guarantee. It is only the combined operation of these documents that has
the effect of providing a full, irrevocable and unconditional guarantee of the
Series A Issuer's obligations under the Series A Preferred Securities. If and to
the extent that the Corporation does not make payments on the Series A
Subordinated Debentures, the Series A Issuer will not pay Distributions or other
amounts due on its Series A Preferred Securities. The Series A Guarantee does
not cover payment of Distributions when the Series A Issuer does not have
sufficient funds to pay such Distributions. In such event, the remedy of a
holder of the Series A Preferred Securities is to institute a Direct Action
against the Corporation pursuant to the Indenture for enforcement of payment of
such Distributions to such holder. The obligations of the Corporation under the
Series A Guarantee are subordinate and junior in right of payment to all Senior
Debt.
Sufficiency of Payments
As long as payments of interest and other payments are made when due on the
Series A Subordinated Debentures, such payments will be sufficient to cover
Distributions and other payments due on the Series A Preferred Securities,
primarily because: (i) the aggregate principal amount of the Series A
Subordinated Debentures is equal to the sum of the aggregate stated Liquidation
Amount of the Series A Preferred Securities and Series A Common Securities; (ii)
the interest rate and interest and other payment dates on the Series A
Subordinated Debentures match the Distribution rate and Distribution and other
payment dates for the Series A Securities; (iii) the Corporation shall pay for
all and any costs, expenses and liabilities of the Series A Issuer except the
Series A Issuer's obligations to holders of its Series A Securities; and (iv)
the Trust Agreement further provides that the Series A Issuer will not engage in
any activity that is not consistent with the limited purposes of the Series A
Issuer.
Notwithstanding anything to the contrary in the Indenture, the Corporation has
the right to set off any payment it is otherwise required to make thereunder
with and to the extent the Corporation has theretofore made, or is concurrently
on the date of such payment making, a payment under the Series A Guarantee.
-49-
<PAGE>
Enforcement Rights of Holders of the Series A Preferred Securities
A holder of a Series A Preferred Security may institute a legal proceeding
directly against the Corporation to enforce its rights under the Series A
Guarantee without first instituting a legal proceeding against the Guarantee
Trustee, the Series A Issuer or any other person or entity.
A default or event of default under any Senior Debt of the Corporation would
not constitute a default or Event of Default under the Indenture. However, in
the event of payment defaults under, or acceleration of, Senior Debt of the
Corporation, the subordination provisions of the Indenture provide that no
payments may be made in respect of the Series A Subordinated Debentures until
such Senior Debt has been paid in full or any payment default thereunder has
been cured or waived. Failure to make required payments on the Series A
Subordinated Debentures would constitute an event of default under the
Indenture.
Limited Purpose of the Series A Issuer
The Series A Preferred Securities evidence a beneficial interest in the Series
A Issuer, and the Series A Issuer exists for the sole purpose of issuing its
Series A Preferred Securities and Series A Common Securities and investing the
proceeds thereof in Series A Subordinated Debentures. A principal difference
between the rights of a holder of a Series A Preferred Security and a holder of
a Series A Subordinated Debenture is that a holder of a Series A Subordinated
Debenture is entitled to receive from the Corporation the principal amount (or
premium, if any) of and interest accrued on Series A Subordinated Debentures
held, while a holder of the Series A Preferred Securities is entitled to receive
Distributions from the Series A Issuer (or from the Corporation under the Series
A Guarantee) if, and to the extent, the Series A Issuer has funds available for
the payment of such Distributions.
Rights Upon Termination
Upon any voluntary or involuntary termination, winding-up or liquidation of
the Series A Issuer involving the liquidation of the Series A Subordinated
Debentures, the holders of the Series A Preferred Securities will be entitled to
receive, out of assets held by the Series A Issuer, the Liquidation Distribution
in cash. See "Description of the Series A Preferred Securities--Liquidation
Distribution upon Termination". Upon any voluntary or involuntary liquidation
or bankruptcy of the Corporation, the Property Trustee, as holder of the Series
A Subordinated Debentures, would be a subordinated creditor of the Corporation,
subordinated in right of payment to all Senior Debt as set forth in the
Indenture, but entitled to receive payment in full of principal, (or premium, if
any) and interest, before any stockholders of the Corporation receive payments
or distributions. Since the Corporation is the guarantor under the Series A
Guarantee and has agreed to pay for all costs, expenses and liabilities of the
Series A Issuer (other than the Series A Issuer's obligations to the holders of
its Series A Preferred Securities), the positions of a holder of such Preferred
Securities and a holder of the Series A Subordinated Debentures relative to
other creditors and to stockholders of the Corporation in the event of
liquidation or bankruptcy of the Corporation are expected to be substantially
the same.
-50-
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the principal United States federal income tax
consequences of the purchase, ownership and disposition of the Series A
Preferred Securities. This summary addresses only the tax consequences to a
person that acquires Series A Preferred Securities on their original issue at
their original offering price and does not address the tax consequences to
persons that may be subject to special treatment under United States federal
income tax law, such as banks, insurance companies, thrift institutions,
regulated investment companies, real estate investment trusts, tax-exempt
organizations, dealers in securities or currencies, persons that will hold
Series A Preferred Securities as part of a position in a "straddle" or as part
of a "hedging", "conversion" or other integrated investment transaction for
federal income tax purposes, persons whose functional currency is not the United
States dollar or persons that do not hold Series A Preferred Securities as
capital assets.
The statements of law or legal conclusions set forth in this summary
constitute the opinion of Sullivan & Cromwell, counsel to the Corporation and
the Series A Issuer. This summary is based upon the Internal Revenue Code of
1986, as amended (the "Code"), Treasury Regulations, Internal Revenue Service
rulings and pronouncements and judicial decisions now in effect, all of which
are subject to change at any time. Such changes may be applied retroactively in
a manner that could cause the tax consequences to vary substantially from the
consequences described below, possibly adversely affecting a beneficial owner of
the Series A Preferred Securities. In particular, legislation has been proposed
that could adversely affect the Corporation's ability to deduct interest on the
Series A Subordinated Debentures, which may in turn permit the Corporation to
cause a redemption of the Series A Preferred Securities. See "--Possible Tax Law
Changes". The authorities on which this summary is based are subject to various
interpretations, and it is therefore possible that the federal income tax
treatment of the purchase, ownership and disposition of the Series A Preferred
Securities may differ from the treatment described below.
PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS IN
LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE FEDERAL TAX CONSEQUENCES
OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE SERIES A PREFERRED SECURITIES,
AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
Classification of the Series A Issuer
Under current law and assuming compliance with the terms of the Trust
Agreement, the Series A Issuer has not been classified as an association taxable
as a corporation for United States federal income tax purposes. As a result,
each beneficial owner of Series A Preferred Securities (a "Securityholder") will
be required to include in its gross income its pro rata share of the original
issue discount accrued with respect to the Series A Subordinated Debentures
whether or not cash is actually distributed to the Securityholders. See "--
Original Issue Discount". No amount included in income with respect to the
Series A Preferred Securities is eligible for the dividends-received deduction.
Original Issue Discount
Under the Indenture, the Corporation has the right to defer the payment of
interest on the Series A Subordinated Debentures at any time or from time to
time for a period not exceeding 10 consecutive semi-annual periods with respect
to each Extension Period, provided that no Extension Period may extend beyond
the Stated Maturity of the Series A Subordinated Debentures. Because of this
option, all interest payable on the Series A Subordinated Debentures will be
treated as "original issue discount" ("OID") for federal income tax purposes.
Accordingly, a Securityholder will recognize income (in the form of OID) on a
daily basis under a constant yield method over the term of the Series A
Subordinated Debentures (including during any Extension Period), regardless of
the receipt of cash with respect to the period to which such income is
attributable. (Subsequent uses of the term "interest" in this summary shall
include income in the form of OID.) The possible payment of additional interest
upon a Registration Default should not be taken into account in computing the
amount of OID required to be accrued
-51-
<PAGE>
by the Securityholder. The amount of OID that accrues in any semi-annual period
(other than during an Extension Period) will equal approximately the amount of
the interest that accrues on the Series A Subordinated Debentures in that semi-
annual period at the stated interest rate.
In the event that the interest payment period is extended, Securityholders
will include interest in gross income in advance of the receipt of cash, and any
Securityholders who dispose of the Series A Preferred Securities prior to the
record date for the payment of Distributions following such Extension Period
will include interest in gross income but will not receive any cash related
thereto from the Series A Issuer. Any amount of OID included in a
Securityholder's gross income (whether or not during an Extension Period) will
increase such Securityholder's tax basis in its Series A Preferred Securities,
and the amount of Distributions received by a Securityholder will reduce such
Securityholder's tax basis in its Series A Preferred Securities.
Distribution of the Series A Subordinated Debentures to Holders of Series A
Preferred Securities
Under current law, a distribution by the Series A Issuer of the Series A
Subordinated Debentures as described under the caption "Description of the
Series A Preferred Securities--Liquidation of the Series A Issuer and
Distribution of Series A Subordinated Debentures to Holders" will be non-taxable
and will result in the Securityholder receiving directly its pro rata share of
the Series A Subordinated Debentures previously held indirectly through the
Series A Issuer, with a holding period and aggregate tax basis equal to the
holding period and aggregate tax basis such Securityholder had in its Series A
Preferred Securities before such distribution. A Securityholder will accrue
interest in respect of the Series A Subordinated Debentures received from the
Series A Issuer in the manner described above under "--Original Issue Discount".
Sales or Redemption of the Series A Preferred Securities
Gain or loss will be recognized by a Securityholder on a sale of the Series A
Preferred Securities (including a redemption for cash) in an amount equal to the
difference between the amount realized and the Securityholder's adjusted tax
basis in the Series A Preferred Securities sold or so redeemed. Gain or loss
recognized by a Securityholder on the Series A Preferred Securities held for
more than one year will generally be taxable as long-term capital gain or loss.
The Series A Preferred Securities may trade at a price that does not fully
reflect the value of accrued but unpaid interest with respect to the underlying
Series A Subordinated Debentures. A Securityholder that disposes of its Series A
Preferred Securities between record dates for payments of Distributions (and
consequently does not receive a Distribution from the Series A Issuer for the
period prior to such disposition) will nevertheless be required to include in
income as ordinary income accrued but unpaid interest on the Series A
Subordinated Debentures through the date of disposition and to add such amount
to its adjusted tax basis in its Series A Preferred Securities disposed of. Such
Securityholder will recognize a capital loss on the disposition of its Series A
Preferred Securities to the extent the selling price (which may not fully
reflect the value of accrued but unpaid interest) is less than the
Securityholder's adjusted tax basis in the Series A Preferred Securities (which
will include accrued but unpaid interest). Subject to certain limited
exceptions, capital losses cannot be applied to offset ordinary income for
federal income tax purposes.
Possible Tax Law Changes
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill") was
introduced in the 104th Congress, which would have, among other things,
generally denied interest deductions for interest on an instrument issued by a
corporation that has a maximum weighted average maturity of more than 40 years.
The Bill would also have generally denied interest deductions for interest on an
instrument issued by a corporation that has a maximum term of more than 20 years
and that is not shown as indebtedness on the separate balance sheet of the
issuer or, where the instrument is issued to a related party (other than a
corporation), where the holder or some other related
-52-
<PAGE>
party issues a related instrument that is not shown as indebtedness on the
issuer's consolidated balance sheet. The above-described provision of the Bill
was proposed to be effective generally for instruments issued on or after
December 7, 1995. If such provision were to have applied to the Series A
Subordinated Debentures, the Corporation would have been unable to deduct
interest on the Series A Subordinated Debentures. However, on March 29, 1996,
the Chairmen of the Senate Finance and House Ways and Means Committees issued a
joint statement to the effect that it was their intention that the effective
date of the President's legislative proposals, if adopted, would be no earlier
than the date of appropriate Congressional action. Under current law, the
Corporation will be able to deduct interest on the Series A Subordinated
Debentures. President Clinton's proposed 1998 fiscal year budget reiterated a
substantially similar proposal on February 6, 1997. Although the 104th Congress
adjourned without enacting the Bill, there can be no assurance that legislation
adopted by the 105th Congress will not affect the ability of the Corporation to
deduct interest on the Series A Subordinated Debentures. Such a change could
give rise to a Tax Event, which may permit the Corporation to cause a redemption
of the Series A Preferred Securities, as described more fully under "Description
of the Series A Preferred Securities--Redemption".
United States Alien Holders
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is, as to the United
States, a foreign corporation, a non-resident alien individual, a foreign
partnership or a non-resident fiduciary of a foreign estate or trust.
Under present United States federal income tax law: (i) payments by the Series
A Issuer or any of its paying agents to any Securityholder who or which is a
United States Alien Holder will not be subject to United States federal
withholding tax; provided that (a) the Securityholder does not actually or
constructively own 10% or more of the total combined voting power of all classes
of stock of the Corporation entitled to vote, (b) the Securityholder is not a
controlled foreign corporation that is related to the Corporation through stock
ownership and (c) either (A) the Securityholder certifies to the Series A Issuer
or its agent, under penalties of perjury, that it is not a United States holder
and provides its name and address or (B) a securities clearing organization,
bank or other financial institution that holds customers' securities in the
ordinary course of its trade or business (a "Financial Institution"), and holds
the Series A Preferred Security in such capacity, certifies to the Series A
Issuer or its agent, under penalties of perjury, that such statement has been
received from the Securityholder by it or by a Financial Institution holding
such security for the Securityholder and furnishes the Series A Issuer or its
agent with a copy thereof; and (ii) a United States Alien Holder of a Series A
Preferred Security will not be subject to United States federal withholding tax
on any gain realized upon the sale or other disposition of a Series A Preferred
Security.
Recently proposed Internal Revenue Service Treasury regulations (the "Proposed
Regulations") would provide alternative methods for satisfying the certification
requirement described in clause (i)(c) above. The Proposed Regulations also
would require, in the case of Series A Preferred Securities held by a foreign
partnership, that (x) the certification described in clause (i)(c) above be
provided by the partners rather than by the foreign partnership and (y) the
partnership provide certain information, including a United States taxpayer
identification number. A look-through rule would apply in the case of tiered
partnerships. The Proposed Regulations are proposed to be effective for payments
made after December 31, 1997. There can be no assurance that the Proposed
Regulations will be adopted or as to the provisions that they will include if
and when adopted in temporary or final form.
Information Reporting to Securityholders
Generally, income on the Series A Preferred Securities will be reported to
Securityholders on Forms 1099, which forms should be mailed to Securityholders
by January 31 following each calendar year.
-53-
<PAGE>
Backup Withholding
Payments made on, and proceeds from the sale of, the Series A Preferred
Securities may be subject to a "backup" withholding tax of 31% unless the
Securityholder complies with certain certification requirements. Any withheld
amounts will be allowed as a credit against the Securityholder's United States
federal income tax, provided the required information is provided to the
Internal Revenue Service on a timely basis.
ERISA CONSIDERATIONS
The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
imposes certain requirements on those employee benefit plans to which it applies
("Plans") and on those persons who are fiduciaries with respect to such Plans.
In accordance with ERISA's general fiduciary standards, before purchasing the
Series A Preferred Securities a Plan fiduciary should determine whether such an
investment is permitted under the governing Plan instruments and is appropriate
for the Plan in view of its overall investment policy and the composition and
diversification of its portfolio. Other provisions of ERISA and the Code require
that certain reporting and disclosure be made with respect to plan assets and
investments, and still other provisions of ERISA and the Code prohibit certain
transactions involving the assets of a Plan and persons who have certain
specified relationships to the Plan ("parties in interest" within the meaning of
ERISA or "disqualified persons" within the meaning of the Code). Thus, a Plan
fiduciary considering an investment in the Series A Preferred Securities should
consult with its legal counsel concerning the legal implications of investing in
the Series A Preferred Securities, especially in light of the issues discussed
in the immediately succeeding paragraphs.
If the assets of the Series A Issuer were deemed to be plan assets of Plans
that are holders of the Series A Preferred Securities, the Plan's investments in
the Series A Preferred Securities might be deemed to constitute a delegation
under ERISA of the duty to manage plan assets by a fiduciary investing in Series
A Preferred Securities, and certain transactions involving the operation of the
Series A Issuer might be deemed to constitute prohibited transactions under
ERISA and the Code.
The U.S. Department of Labor (the "DOL") has issued a final regulation with
regard to whether the underlying assets of an entity in which employee benefit
plans acquire equity interests would be deemed to be plan assets. The regulation
provides that the underlying assets of an entity will not be considered to be
plan assets if the equity interests acquired by employee benefit plans are
"publicly-offered securities" -- that is, they are (1) widely held (i.e., owned
by more than 100 investors independently of the Corporation and of each other),
(2) freely transferable and (3) sold as part of an offering pursuant to an
effective registration statement under the Securities Act and then timely
registered under Section 12(b) or 12(g) of the Exchange Act. It is expected that
the Series A Preferred Securities will meet the criteria of "publicly-offered
securities" above. Specifically, it is expected (although no assurances can be
given) that the Series A Securities will be held by at least 100 independent
investors at the conclusion of the offering, there are no restrictions imposed
on the transfer of the Series A Preferred Securities and the Series A Preferred
Securities will be sold as part of an offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended, and then
will be timely registered under the Exchange Act.
In the event that the assets of the Series A Issuer were deemed to be "plan
assets" of Plans that are holders of the Series A Securities of the Series A
Issuer, there are five class exemptions issued by the DOL which may apply to
exempt certain transactions involving assets of the Series A Issuer from the
prohibited transaction provisions of ERISA and the Code: Prohibited Transaction
Exemption 84-14, for certain transactions determined by qualified professional
asset managers, Prohibited Transaction Exemption 90-1, for certain transactions
involving insurance company pooled separate accounts, Prohibited Transaction
Exemption 91-38, for certain transactions involving bank collective investment
funds, Prohibited Transaction 95-60 for certain transactions involving insurance
company general accounts, and Prohibited Transaction Exemption 96-23, for
certain transactions determined by in-house asset managers. A plan considering
the purchase of the Series A Preferred Securities should consult with legal
counsel concerning the applicability of these class exemptions prior to making
an investment.
-54-
<PAGE>
Employee benefit plans that are governmental plans (as defined in Section
3(32) of ERISA) are not subject to ERISA requirements but may be subject to
somewhat similar provisions of other applicable federal or state law or legal
restrictions on their ability to invest in the Series A Preferred Securities.
Accordingly, governmental plans should consult with legal counsel prior to
making an investment.
THE SALE OF INVESTMENTS TO PLANS IS IN NO RESPECT A REPRESENTATION BY THE
SERIES A ISSUER, THE CORPORATION, THE PROPERTY TRUSTEE OR ANY OTHER PERSON
ASSOCIATED WITH THE SALE OF THE SERIES A PREFERRED SECURITIES THAT SUCH
INVESTMENTS MEET ALL RELEVANT LEGAL REQUIREMENTS WITH RESPECT TO INVESTMENTS BY
PLANS GENERALLY OR ANY PARTICULAR PLAN, OR THAT SUCH INVESTMENTS ARE OTHERWISE
APPROPRIATE FOR PLANS GENERALLY OR ANY PARTICULAR PLAN.
-55-
<PAGE>
SELLING SECURITYHOLDERS
The Registration Statement has been filed pursuant to Rule 415 under the
Securities Act to afford the holders of the Series A Preferred Securities the
opportunity to sell such securities in a public transaction rather than pursuant
to an exemption from the registration and prospectus delivery requirements of
the Securities Act. In order to avail itself of that opportunity, a holder must
notify the Corporation in writing of its intention to sell Series A Preferred
Securities and request the Corporation to file a supplement to this Prospectus
or an amendment to the Registration Statement identifying such holder as a
Selling Securityholder and disclosing such other information concerning the
Selling Securityholder and the Series A Preferred Securities to be sold as may
then be required by the Securities Act and the rules and regulations thereunder,
as applicable. No offer or sale pursuant to this Prospectus may be made by any
holder until such a request has been made and until any such supplement has been
filed or any such amendment has become effective. The holders of Series A
Preferred Securities who have made such a request and as to whom any such
supplement has been filed or any such amendment has been filed or becomes
effective are referred to herein as "Selling Securityholders". Since the Series
A Preferred Securities are currently listed on PORTAL, the holder of the Series
A Preferred Securities at the time such request has been made may differ from
the holders as of the date hereof.
The Corporation will from time to time supplement or amend this Prospectus to
reflect the required information concerning any Selling Securityholders.
The Corporation has agreed to bear all expenses (other than expenses incurred
by any holder of Series A Preferred Securities, including fees and expenses of
counsel and other advisors retained by such holder), in connection with the
registration and sale of the Series A Preferred Securities covered by this
Prospectus.
The following table show the names of the Selling Securityholders, the shares
of Series A Preferred Securities owned beneficially by each of them, as of
March 14, 1997] (unless otherwise noted), the number of Series A Preferred
Securities that may be offered by each of them pursuant to this Prospectus and
the number of Series A Preferred Securities to be beneficially owned by each of
them after completion of the offering pursuant to this Prospectus, assuming all
of the shares of Series A Preferred Securities being offered hereby are sold in
the offering.
<TABLE>
<CAPTION>
Number of Series
A Preferred
Securities
Beneficially Owned Number of Series Number of Series A
as of A Preferred Preferred Securities
Name of Selling March 14, Securities Offered Beneficially Owned
Securityholder 1997(1) Hereby After the Offering
- ------------------------------------- ------------------ ------------------ --------------------
<S> <C> <C> <C>
Aetna Life Insurance Company
Separate Account 252................ 1,375 1,375 0
Aetna Life Insurance Company Separate
Account 76.......................... 2,625 2,625 0
Aetna Investment Advisers Fund....... 3,700 3,700 0
Aetna Series Fund, Inc. - The Aetna
Fund................................ 300 300 0
ARINC Incorporated Retirement Income
Plans............................... 625 625 0
AST Putnam Balanced Portfolio........ 15 15 0
Ball Corporation Hourly Pension
Plan................................ 250 250 0
Ball Corporation Salary Pension
Plan................................ 750 750 0
</TABLE>
-56-
<PAGE>
<TABLE>
<S> <C> <C> <C>
BlackRock Fixed Income Opportunity
Fund............................... 5,950 5,950 0
Computer Sciences corporation - Core
Bond Portfolio..................... 300 300 0
Dayton Hudson Corporation - Core
Account............................ 250 250 0
Deere & Company..................... 750 750 0
General Motors - Core Account....... 6,600 6,600 0
Honeywell Enhanced Index Portfolio.. 550 550 0
Horace Mann Service Corp - Synthetic
GIC Portfolio...................... 600 600 0
LB Series Fund, Inc., Income
Portfolio.......................... 3,500 3,500 0
Los Angeles County Employees
Retirement Association............. 2,100 2,100 0
Lutheran Brotherhood Family of
Funds - Lutheran Broutherhood
Income Fund........................ 5,000 5,000 0
Lutheran Brotherhood................ 4,000 4,000 0
McCune Charitable Foundation, Inc... 350 350 0
Michigan Catholic Conference - Core
Portfolio ........................ 250 250 0
Minnesota State Board of
Investment......................... 7,900 7,900 0
Norwest Corporation Master Pension
Trust (#483)....................... 1,445 1,445 0
Orange County Employee's Retirement
Trust Fund ("Orange County")....... 2,000 2,000 0
Putnam High Income Convertible
and Bond Fund...................... 45 45 0
Putnam BB High Yield Management
Trust.............................. 170 170 0
Putnam Diversified Income Trust II.. 40 40 0
Putnam Master Income Trust.......... 165 165 0
Putnam Variable Turst - Putnam
VT Global Asset Allocation Fund.... 80 80 0
Putnam Diversified Income Trust..... 1,385 1,385 0
Putnam Asset Allocation Funds -
Growth Portfolio................... 35 35 0
Putnam Variable Turst -
Putnam VT High Yield Fund.......... 610 610 0
Putnam Managed High Yield Trust..... 85 85 0
Putnam High Yield Managed Trust..... 315 315 0
Putnam Diversified Income
Portfolio/Smith Barney/Travelers
Series Fund........................ 30 30 0
Putnam Convertible Opportunities
and Income Trust................... 40 40 0
Putnam High Yield Advantage Fund.... 6,470 6,470 0
Putnam Balanced Retirement Fund..... 15 15 0
Putnam High Yield Trust............. 3,690 3,690 0
Putnam Equity Income Fund........... 5,000 5,000 0
Putnam Income Fund.................. 115 115 0
Putnam Premier Income Trust......... 410 410 0
Putnam Variable Trust - Putnam VT
Diversified Income Fund............ 160 160 0
Putnam Asset Allocation Funds -
Balanced Portfolio................. 90 90 0
Putnam Asset Allocation Funds -
Conservative Portfolio............. 40 40 0
Putnam High Yield Fixed Income
Trust (DBT)........................ 210 210 0
Shell Pension Turst................. 1,000 1,000 0
Strong Short-Term Bond Fund
(a/c 973).......................... 11,500 11,500 0
Strong Corporate Bond Fund
(a/c 994).......................... 5,000 5,000 0
Strong Government Securities Fund
(a/c 1502)......................... 9,490 9,490 0
Strong Advantage Fund (a/c 961)..... 3,000 3,000 0
The George Putnam Fund of Boston.... 90 90 0
The Rockefeller Foundation.......... 1,000 1,000 0
The University of Pittsburgh
Medical Center System (#709)....... 180 180 0
United Water Resources Portfolio.... 200 200 0
Wayne County Employees'
Retirement System.................. 3,260 3,260 0
--------------------
Total .......................... 105,105 0
====================
</TABLE>
- ---------------
(1) For the purposes of this table, a person is deemed to have "beneficial
ownership" of securities over which such person, directly or indirectly
through any contract, arrangement, understanding, relationship or otherwise,
has or shares (x) voting power (which includes the power to vote or to
direct the voting of such securities) or (y) investment power (which
includes the power to dispose or direct the disposition of such securities).
A person is also deemed to be the beneficial owner of securities: (i) the
beneficial ownership of which such person has the right, at any time within
60 days from March 14, 1997 (or such later date as noted in the above
table), to acquire, including but not limited to any right to acquire
through the exercise of options, warrants or rights, the conversion of a
convertible security or the revocation or automatic termination of a trust
or discretionary account or similar arrangement; (ii) the beneficial
ownership of which such person has the right to acquire (as specified in
(i)) at any time, where such right is acquired for the purpose, or with the
effect, of changing or influencing control of the Corporation, or in
connection with or as a participant in any transaction having such purpose
or effect; or (iii) with respect to which such person, directly or
indirectly, through the creation or use of a trust, a proxy, power of
attorney, pooling arrangement or any other contract, arrangement or device
purports to have divested himself of beneficial ownership or to have
prevented the vesting of beneficial ownership as part of a scheme to evade
the reporting requirements of Section 13(d) or (g) of the Securities
Exchange Act of 1934. Beneficial ownership is given as of March 14, 1997
unless noted otherwise.
PLAN OF DISTRIBUTION
The Series A Preferred Securities are outstanding securities and are being
offered for sale from time to time pursuant to this Prospectus by the Selling
Securityholders. The Series A Preferred Securities also may be sold pursuant to
Rule 144 under the Securities Act.
The distribution of the Series A Preferred Securities pursuant to this
Prospectus may be effected from time to time in one or more transactions (which
may involve block transactions) in transactions on PORTAL or in the over-the-
counter market or on any national securities exchange or automated quotation
system on which Series A Preferred Securities may be listed or quoted in the
future, in negotiated transactions, through the writing of options on shares
(whether such options are listed on an options exchange or otherwise) or through
a combination of such methods of sale, at market prices prevailing at the time
of sale, at prices related to such prevailing market prices or at negotiated
prices, in each case as determined by the relevant Selling Securityholder. Each
Selling Securityholder may effect such transactions by selling shares directly
to their purchasers, through agents or to or through broker-dealers, and any
such agents or broker-dealers may receive compensation in the form of
underwriting discounts, concessions or commissions from such Selling
Securityholder, from purchasers of shares for whom they may act as agents or
from both sources (and such compensation may be in excess of customary
commissions). The Selling Securityholders and any broker-dealers that
participate in the distribution may be deemed to be "underwriters" within
-57-
<PAGE>
the meaning of Section 2(1) of the Securities Act, and any commissions, and any
profit on the resale of shares, received by the Selling Securityholders and any
such broker-dealers may be deemed to be underwriting compensation.
To the extent required at the time a particular sale of Series A Preferred
Securities is made hereunder, the Corporation will make available to the
relevant Selling Securityholder for delivery to the purchaser a supplement to
this Prospectus that will include certain information about the sale, for
example, with respect to the number of shares sold, the sale price, any
participating broker-dealers and any discounts or commissions received thereby.
The Corporation will bear all costs and expenses incurred by it in
connection with the offering and sale of the Series A Preferred Securities
pursuant to this Prospectus, but will not be responsible for any commissions,
underwriting discounts or similar amounts payable in respect of any such sale,
or for any other expenses incurred by the Selling Securityholders or any
purchasers. Notwithstanding the foregoing, the Corporation and each Selling
Securityholder have agreed to indemnify each other from certain liabilities
relating to the offering made hereby, including liabilities under the Securities
Act.
In connection with a particular offering of Series A Preferred Securities
pursuant to this Prospectus, participating underwriters or broker-dealers (if
any), or their respective affiliates, may engage in passive market-making
transactions in the Series A Issuer's Series A Preferred Securities on PORTAL in
accordance with Rule 10b-6A under the Exchange Act during the two business day
period before commencement of such offering. Passive market-making transactions
must comply with applicable volume and price limits and must be identified as
such. In general, a passive market-maker may display its bid at a price not in
excess of the highest independent bid for the security; if all independent bids
are lowered below the passive market-maker's bid, however, such bid must then be
lowered when certain purchase limits are exceeded.
The Corporation has agreed with the Selling Securityholders to keep a Shelf
Registration Statement, under which the Selling Securityholders may resell
Series A Preferred Securities from time to time, effective until April 1, 1999
(or such earlier time as all Series A Preferred Securities have been sold
thereunder or pursuant to Rule 144 under the Securities Act), except during
certain limited circumstances. See "Registration Rights Agreement".
Prior to the offering contemplated hereby, there has been no public market
for the Series A Preferred Securities. The Initial Purchasers have advised the
Corporation that they intend to make a market in the Series A Preferred
Securities, but they are not obligated to do so and may discontinue any such
market making at any time without notice. In addition, the market making may be
limited during the pendency of the Shelf Registration Statement. Accordingly,
there can be no assurance that an active market will develop for the Series A
Preferred Securities.
Dillon, Read & Co. Inc. serves as Quotation Agent with respect to the
Series A Preferred Securities and in certain instances will calculate the
Redemption Price thereof.
REGISTRATION RIGHTS AGREEMENT
On December 13, 1996, the Corporation and the Series A Issuer entered into
a registration rights agreement with the Initial Purchasers (the "Registration
Rights Agreement") pursuant to which the Corporation and the Series A Issuer
agreed, at the Corporation's expense, for the benefit of the Initial Purchasers
and the holders of the Series A Preferred Securities, the Series A Guarantee and
the Series A Subordinated Debentures (together, the "Registrable Securities"),
to file a registration statement (the "Shelf Registration Statement") with
respect to the Registrable Securities.
The Registration Rights Agreement, as amended, provides that the
Corporation and the Series A Issuer will (i) file with the Commission within 60
days after the date of issuance of the Registrable Securities the Shelf
Registration Statement covering resales of the Registrable Securities, (ii) use
their reasonable best efforts to cause the Shelf Registration Statement to be
declared effective under the Securities Act within 120 days after the date of
the issuance
-58-
<PAGE>
of the Registrable Securities and (iii) use their reasonable best efforts to
keep effective the Shelf Registration Statement until two years after the date
it is declared effective or such earlier date as all Registrable Securities
shall have been disposed of or on which all Registrable Securities held by
persons that are not affiliates of the Corporation or the Series A Issuer may be
resold without registration pursuant to Rule 144(k) under the Securities Act
(the "Effectiveness Period"). The Corporation will provide to each holder of
Registrable Securities copies of the Prospectus, which is a part of the Shelf
Registration Statement, notify each holder when the Shelf Registration Statement
has become effective and take certain other actions as are required to permit
unrestricted resales of the Registrable Securities. A holder of Registrable
Securities that sells such Registrable Securities pursuant to the Shelf
Registration Statement has been required to be named as a selling security
holder in the related Prospectus and to deliver a Prospectus to purchasers, is
subject to certain of the civil liability provisions under the Securities Act in
connection with such sales and is bound by the provisions of the Registration
Rights Agreement, including certain indemnification obligations.
In the event that the Shelf Registration Statement has not been filed with
the Commission within 60 days or, if so filed, has not been declared effective
within 120 days following the Issue Date (each a "Registration Default"), a
Registration Penalty (as defined herein) of 0.25% per annum of the principal
amount of the Series A Subordinated Debentures will accrue until such Shelf
Registration Statement is (i) filed with the Commission or (ii) declared
effective by the Commission. In the event that the Shelf Registration Statement
is not declared effective by the Commission 60 days following a Registration
Default, an additional Registration Penalty of 0.25% (together with the initial
Registration Penalty, not to exceed in the aggregate 0.50%) will accrue until
such Registration Statement is declared effective.
Also, in the event that the Shelf Registration Statement ceases to be
effective during the Effectiveness Period for more than 60 days, whether or not
consecutive, during any 12-month period, then a Registration Penalty will accrue
at a rate per annum equal to one-half of one percent (0.50%) of the principal
amount or Liquidation Amount, as applicable, from such 61st day until such time
as the Shelf Registration Statement again becomes effective. At no time will a
Registration Penalty in excess of 0.50% be payable pursuant to the provisions of
the Registration Rights Agreement.
The Corporation and the Series A Issuer have agreed in the Registration
Rights Agreement to use their reasonable best efforts to cause the Series A
Preferred Securities to be listed on the Nasdaq National Market or other
national securities exchange upon effectiveness of the Shelf Registration
Statement.
The summary herein of certain provisions of the Registration Rights
Agreement is subject to, and is qualified in its entirety by reference to, all
of the provisions of the Registration Rights Agreement, a copy of which is
available upon request from the Corporation.
-59-
<PAGE>
VALIDITY OF SECURITIES
Certain matters of Delaware law relating to the validity of the Series A
Preferred Securities, the enforceability of the Trust Agreement and the
formation of the Series A Issuer have been passed upon by Richards, Layton &
Finger, special Delaware Counsel to the Corporation and the Series A Issuer. The
validity of the Series A Guarantee and the Series A Subordinated Debentures have
been passed upon for the Corporation by Sullivan & Cromwell and for the
Underwriters by Simpson Thacher & Bartlett, (a partnership which includes
professional corporations). Sullivan & Cromwell and Simpson Thacher & Bartlett
have relied on the opinion of Richards, Layton & Finger as to certain matters of
Delaware law. Certain matters relating to United States federal income tax
considerations have been passed upon for the Corporation and the Series A
Issuers by Sullivan & Cromwell.
INDEPENDENT PUBLIC ACCOUNTANTS
The consolidated financial statements and schedules of the Corporation and
subsidiaries appearing in the Corporation's Annual Report (Form 10-K) for the
year ended December 31, 1995 have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are included therein and have been incorporated by reference into
this Prospectus. Such consolidated financial statements are incorporated herein
by reference in reliance upon such report given upon the authority of such firm
as experts in giving said reports.
-60-
<PAGE>
No dealer, salesperson or other person has been authorized to give any
information or to make any representations not contained in this Prospectus and,
if given or made, such information or representation must not be relied upon as
having been authorized by the Corporation or the Series A Issuer. This
Prospectus does not constitute 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 or solicitation in such jurisdiction.
Neither the delivery of this Prospectus nor any sale made hereunder shall under
any circumstances create any implication that the information herein is correct
as of any time subsequent to the date hereof or that there has not been a change
in the affairs of the Corporation or the Series A Issuer since the date hereof.
-61-
<PAGE>
TABLE OF CONTENTS
------------------
Page
----
Notice to New Hampshire Residents............................ 6
Available Information........................................ 6
Incorporation of Certain Documents By Reference.............. 7
Prospectus Summary........................................... 8
Risk Factors................................................. 15
The Series A Issuer.......................................... 21
The Corporation.............................................. 21
Consolidated Ratio of Earnings to Fixed Charges (Excluding
Preferred Stock Dividends) and Ratio of Earnings to
Combined Fixed Charges and Preferred Stock Dividend
Requirements............................................... 24
Capitalization............................................... 25
Use of Proceeds.............................................. 26
Federal Reserve Board Actions................................ 26
Accounting Treatment......................................... 26
Description of the Series A Preferred Securities............. 26
Description of the Series A Subordinated Debentures.......... 35
Book-Entry Issuance.......................................... 45
Description of the Series A Guarantee........................ 46
Relationship Among the Series A Preferred Securities, the
Series A Subordinated Debentures, the Expense Agreement
and the Series A Guarantee................................. 49
Certain Federal Income Tax Consequences...................... 51
ERISA Considerations......................................... 54
Selling Securityholders...................................... 56
Plan of Distribution......................................... 57
Registration Rights Agreement................................ 58
Validity of Securities....................................... 60
Independent Public Accountants............................... 60
-62-
<PAGE>
[LOGO APPEARS HERE]
Riggs Capital
---------------
$150,000,000
8 5/8% Trust Preferred Securities, Series A
150,000
Preferred Securities
(Liquidation Amount $1,000 per
Preferred Security)
Fully and Unconditionally
Guaranteed by
Riggs National Corporation
-----------------------
PROSPECTUS
-----------------------
-63-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses in connection with the issuance and distribution of
the securities being registered are:
Securities and Exchange Commission registration fee.................. $45,460
Trustee's fee and expenses........................................... $46,000
Printing and engraving expenses...................................... $150,000
Legal fees and expenses of Registrant's Counsel...................... $400,000
Accounting fees and expenses......................................... $65,000
Blue Sky fees and expenses (including counsel fees).................. $4,000
Fees of rating agencies.............................................. $90,000
Miscellaneous expenses............................................... $89,540
Total.............................................................. $890,000
Item 15. Indemnification of Directors and Officers
Section 15 of the General Corporation Law of the State of Delaware, Article
Eleventh of the Corporation's Certificate of Incorporation and Section 14.1 of
the Corporation's Bylaws provide for indemnification of the Corporation's
directors and officers in a variety of circumstances which may include
liabilities under the Securities Act.
The general effect of the provisions in the Corporation's Certificate of
Incorporation and Delaware General Corporation Law is to provide that the
Corporation shall indemnify its directors and officers against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by them in connection with the defense or
settlement of any judicial or administrative proceedings in which they become
involved by reason of their status as directors or officers of the Corporation,
if they acted in good faith and in the reasonable belief that their conduct was
neither unlawful (in the case of criminal proceedings) nor inconsistent with the
best interests of the Corporation. With respect to legal proceedings by or in
the right of the Corporation in which a director or officer is adjudged liable
for improper performance of his duty to the Corporation or another enterprise
which he served in a similar capacity at the request of the Corporation,
indemnification is limited by such provisions to that amount which is permitted
by the court. In addition, the Corporation has purchased insurance as permitted
by Delaware law on behalf of directors, officers, employees or agents, which may
cover liabilities under the Securities Act.
In addition, Article Eleventh of the Corporation's Certificate of
Incorporation provides that no director of the Corporation will be personally
liable to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director. This provision does not eliminate or limit the
liability of a director for: (i) breach of the director's duty of loyalty to the
Corporation or its stockholders; (ii) acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law; (iii) willful
or negligent conduct in paying illegal dividends or improperly purchasing or
redeeming the Corporation's own stock; or (iv) any transaction in which the
director obtains an improper personal benefit.
-64-
<PAGE>
Item 16. Exhibits
<TABLE>
<CAPTION>
Exhibit
- -------
<S> <C>
1* - Purchase Agreement
4(a)* - Certificate of Incorporation of the Corporation, as amended
4(b)* - By-laws of the Corporation, as amended
4(c)* - Junior Subordinated Indenture between Riggs National Corporation and The Bank of New
York, as Debenture Trustee
4(d)* - Certificate of Trust of Riggs Capital
4(e)* - Trust Agreement of Riggs Capital
4(f)* - Amended and Restated Trust Agreement of Riggs Capital
4(g) - Form of Series A Preferred Security Certificate for Riggs Capital (included in
Exhibit 4(f))
4(h)* - Guarantee Agreement for Riggs Capital
4(i)* - Form of Series A Subordinated Debenture
5(a)* - Opinion of Sullivan & Cromwell as to validity of the Series A Subordinated Debentures
and the Guarantee to be issued by Riggs National Corporation
5(b)* - Opinion of Richards, Layton & Finger, special Delaware counsel, as to validity of the
Series A Preferred Securities to be issued by Riggs Capital
8* - Opinion of Sullivan & Cromwell as to certain federal income tax matters
12* - Statement re: Computation of Consolidated Ratio of Earnings to Fixed Charges
(Excluding Preferred Stock Dividends) and Ratio of Consolidated Earnings to Fixed
Charges and Preferred Stock Dividends
23(a) - Consent of Arthur Andersen LLP
23(b)* - Consent of Richards, Layton & Finger
23(c)* - Consent of Sullivan & Cromwell
24* - Powers of Attorney
25(a) - Form T-1 Statement of Eligibility of The Bank of New York to act as trustee under the
Junior Subordinated Indenture
25(b) - Form T-1 Statement of Eligibility of The Bank of New York to act as trustee under the
Amended and Restated Trust Agreement of Riggs Capital
25(c) - Form T-1 Statement of Eligibility of The Bank of New York to act as trustee under the
Guarantee for the benefit of the holders of Series A Capital
</TABLE>
* Previously filed.
Item 17. Undertakings
Each of the undersigned Registrants 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 this Registration Statement (or the most recent
post-effective amendment thereto) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in this Registration Statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424 (b) if, in
the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum
-65-
<PAGE>
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement;
provided, however, that paragraphs (1) (i) and (1) (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by each of the Registrants pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, as amended, each filing of a Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at this time shall be deemed to be the initial bona
fide offering hereof.
(5) That, for purposes of determining any liability under the Securities
Act of 1933:
(i) The information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in the form
of prospectus filed by the Registrants pursuant to Rule 424 (b) (1) or (4) or
487 (h) under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(ii) Each post-effective amendment that contains a form of prospectus shall
be deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of each
Registrant pursuant to the provisions described under Item 15 above, or
otherwise, 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 each
Registrant of expenses incurred or paid by a director, officer or controlling
person of each Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, each Registrant will, unless in
the opinion of its counsel the matter has been settled by the controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
-66-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Washington, D.C. on March
26, 1997.
RIGGS NATIONAL CORPORATION
/s/ LINDA A. MADRID
------------------------------
Name: Linda A. Madrid
Title: Managing Director of Legal Affairs
and Corporate Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment has been signed by the following persons in
the capacities and on the dates indicated:
Title Date
* Chairman of the Board
- ------------------------------ and Chief Executive
(Joe L. Allbritton) Officer
* President
- ------------------------------
(Timothy C. Coughlin)
/s/ JOHN L. DAVIS Chief Financial Officer March 26, 1997
- ------------------------------ (Principal Financial and
(John L. Davis) Accounting Officer)
* Director
- ------------------------------
(Barbara B. Allbritton)
* Director
- ------------------------------
(Robert L. Allbritton)
* Director
- ------------------------------
(Frederick L. Bollerer)
* Director
- ------------------------------
(Calvin Cufritz)
* Director
- ------------------------------
(Charles A. Camalier, III)
* Director
- ------------------------------
(Ronald E. Cuneo)
* Director
- ------------------------------
(Floyd E. Davis, III)
* Director
- ------------------------------
(Jacqueline C. Duchange)
* Director
- ------------------------------
(Michela A. English)
-67-
<PAGE>
Title Date
* Director
- ------------------------------
(James E. Fitzgerald)
* Director
- ------------------------------
(Heather S. Foley)
* Director
- ------------------------------
(David J. Gladstone)
* Director
- ------------------------------
(Lawrence I. Hebert)
* Director
- ------------------------------
(Michael J. Jackson)
* Director
- ------------------------------
(Timothy A. Lex)
* Director
- ------------------------------
(Leo J. O'Donovan, S.J.)
* Director
- ------------------------------
(Steven B. Pfeiffer)
* Director
- ------------------------------
(John A. Sargent)
* Director
- ------------------------------
(Robert L. Sloan)
* Director
- ------------------------------
(James W. Symington)
* Director
- ------------------------------
(Jack Valenti)
* Director
- ------------------------------
(Eddie N. Williams)
*Linda A. Madrid, by signing her name hereto, signs this document on behalf of
each of the persons indicated by an asterisk above pursuant to powers of
attorney duly executed by such persons and filed herewith with the Securities
and Exchange Commission.
By: /s/ Linda A. Madrid March 26, 1997
---------------------------
Linda A. Madrid, Attorney-in-fact
-68-
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, Riggs Capital,
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Washington, D.C. on March 26, 1997.
RIGGS CAPITAL
By: RIGGS NATIONAL CORPORATION,
as Depositor
/s/ LINDA A. MADRID
---------------------------
Name: Linda A. Madrid
Title: Managing Director of Legal Affairs
and Corporate Secretary
-69-
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
- -------
<S> <C>
1* - Purchase Agreement
4(a)* - Certificate of Incorporation of the Corporation, as amended
4(b)* - By-laws of the Corporation, as amended
4(c)* - Junior Subordinated Indenture between Riggs National Corporation and The Bank
of New York, as Debenture Trustee
4(d)* - Certificate of Trust of Riggs Capital
4(e)* - Trust Agreement of Riggs Capital
4(f)* - Amended and Restated Trust Agreement of Riggs Capital
4(g) - Form of Series A Preferred Security Certificate for Riggs Capital (included in
Exhibit 4(f))
4(h)* - Guarantee Agreement for Riggs Capital
4(i)* - Form of Series A Subordinated Debenture
4(j) - Registration Rights Agreement among Riggs National Corporation, Riggs Capital,
Dillon, Read & Co. Inc. and Friedman, Billings, Ramsey & Co., Inc.
4(k) - Amendement No. 1 to the Registration Rights Agreement among Riggs National
Corporation, Riggs Capital, Dillon, Reed & Co., Inc. and Friedman, Billings
Ramsey & Co., Inc.
5(a)* - Opinion of Sullivan & Cromwell as to validity of the Series A Subordinated
Debentures and the Guarantee to be issued by Riggs National Corporation
5(b)* - Opinion of Richards, Layton & Finger, special Delaware counsel, as to validity
of the Series A Preferred Securities to be issued by Riggs Capital
8* - Opinion of Sullivan & Cromwell as to certain federal income tax matters
12* - Statement re: Computation of Consolidated Ratio of Earnings to Fixed Charges
(Excluding Preferred Stock Dividends) and Ratio of Earnings to Fixed Charges
and Preferred Stock Dividends
23(a) - Consent of Arthur Andersen LLP
23(b)* - Consent of Richards, Layton & Finger
23(c)* - Consent of Sullivan & Cromwell
24* - Powers of Attorney
25(a) - Form T-1 Statement of Eligibility of The Bank of New York to act as trustee
under the Junior Subordinated Indenture
25(b) - Form T-1 Statement of Eligibility of The Bank of New York to act as trustee
under the Amended and Restated Trust Agreement of Riggs Capital
25(c) - Form T-1 Statement of Eligibility of The Bank of New York to act as trustee
under the Guarantee for the benefit of the holders of Series A Capital
</TABLE>
*Previously filed.
-70-
<PAGE>
RIGGS CAPITAL
8-5/8% Trust Preferred Securities
guaranteed by Riggs National Corporation
REGISTRATION RIGHTS AGREEMENT
December 13, 1996
DILLON, READ & CO. INC.
FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
c/o Dillon, Read & Co. Inc.
535 Madison Avenue
New York, New York 10022
Ladies and Gentlemen:
Riggs Capital, a statutory business trust formed under the laws of
the State of Delaware (the "Trust") by Riggs National Corporation, a Delaware
corporation ("the Company"), as sponsor, proposes to issue and sell to Dillon,
Read & Co. Inc. ("Dillon, Read") and Friedman, Billings, Ramsey & Co.,
Inc.(the "Initial Purchasers"), upon the terms set forth in a purchase agreement
dated December 10, 1996 (the "Purchase Agreement"), among the Initial
Purchasers, the Company and the Trust, 8-5/8% Trust Preferred Securities
(Liquidation Amount $1,000 per Trust Preferred Security), (the "Preferred
Securities") (the "Initial Placement"). As an inducement to the Initial
Purchasers to enter into the Purchase Agreement and in satisfaction of a
condition to the obligations of the Initial Purchasers thereunder, the Trust and
the Company agree with you, (i) for the benefit of the Initial Purchasers and
(ii) for the benefit of the holders from time to time of the Preferred
Securities the 8-5/8% Junior Subordinated Deferrable Interest Debentures Due
2026 (the "Debentures", and together with the Guarantee of the Company of the
Preferred Securities, the "Registrable Securities"), including the Initial
Purchasers (each of the foregoing, a "Holder" and, together, the "Holders"), as
follows:
1. DEFINITIONS. Capitalized terms used herein without definition
shall have their respective meanings set forth in pursuant to the Purchase
Agreement or the Offering Memorandum dated December 10, 1996, in respect of the
Preferred Securities, as applicable. All references to Sections herein are to
Sections of this Agreement unless otherwise indicated. As used in this
Agreement, the following capitalized defined terms shall have the following
meanings:
"Act" or "Securities Act" means the Securities Act of 1933, as
amended.
<PAGE>
2
"Affiliate" of any specified person means any other person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with such specified person. For purposes of this definition, control of a person
means the power, direct or indirect, to direct or cause the direction of the
management and policies of such person whether by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Commission" means the Securities and Exchange Commission.
"Company Offering" means the sale of Common Stock pursuant to a
registration statement filed by the Company under the Act (other than (i) a
registration statement filed on Form S-4 or any successor form or (ii) a
registration statement filed on Form S-8 or any successor form) respecting an
underwritten offering, whether primary or secondary, that is declared effective
by the Commission.
"DTC" means The Depository Trust Company.
"Effectiveness Period" has the meaning set forth in Section 2(b).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Indenture" means the Indenture of even date herewith between the Company
and The Bank of New York, as trustee, providing for the issuance of the
Debentures.
"Managing Underwriters" means the investment banker or investment bankers
and manager or managers that shall administer an underwritten offering, if any,
as set forth in Section 6.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Prospectus" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities.
"Shelf Registration" means a registration effected pursuant to Section 2.
"Shelf Registration Statement" means a shelf registration statement of the
Trust and the Company pursuant to the provisions of Section 2 filed with the
Commission which covers some or all of the Registrable Securities, as
applicable, on an appropriate form under Rule 415 under the Act, or any similar
rule that may be adopted by the Commission, amendments and supplements to such
registration statement, including
<PAGE>
3
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Trust Agreement" means the Amended and Restated Trust Agreement of
even date herewith executed by the Company, as sponsor of the Trust, and
the initial trustees of the Trust (the "Issuer Trustees"), as the same will
be amended and restated in its entirety by the Company, the Issuer
Trustees, The Bank of New York, as property trustee, and The Bank of New
York (Delaware trustee, providing for the issuance of the Trust
Securities.
"Underwriter" means any underwriter of Registrable Securities in
connection with an offering thereof under a Shelf Registration Statement.
2. SHELF REGISTRATION. (a) The Trust and the Company shall, within 60
days following the date of original issuance (the "Issue Date") of the
Preferred Securities, file with the Commission a Shelf Registration Statement
relating to the offer and sale of the Registrable Securities by the Holders from
time to time in accordance with the methods of distribution elected by such
Holders and set forth in such Shelf Registration Statement and, thereafter,
shall each use their reasonable best efforts to cause such Shelf Registration
Statement to be declared effective under the Act within 120 calendar days
following the Issue Date; provided, however, that no Holder shall be entitled to
--------- --------
have the Registrable Securities held by it covered by such Shelf Registration
unless such Holder is in compliance with Section 3(m).
(b) The Trust and the Company shall each use its reasonable best
efforts to keep the Shelf Registration Statement continuously effective in order
to permit the Prospectus forming part thereof to be usable by Holders for the
period of three years from the date the Shelf Registration Statement is declared
effective or such shorter period that will terminate upon the earliest of the
following: (A) when all the Preferred Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement, (B) when all Debentures issued to Holders in respect of Preferred
Securities that had not been sold pursuant to the Shelf Registration Statement,
if any, have been sold pursuant to the Shelf Registration Statement and (C)
when, in the written opinion of counsel to the Trust and the Company, all
outstanding Registrable Securities held by persons that are not affiliates of
the Trust or the Company may be resold without registration under the Act
pursuant to Rule 144(k) under the Act or any successor provision thereto or any
successor provision thereto or any other applicable law, rule, or regulation,
whether now in effect or hereinafter promulgated, adopted or issued (in any such
case, such period being called the "Effectiveness Period").
(c) In the event that a Shelf Registration Statement with respect to
the Registrable Securities is not (i) filed on or prior to the 60th calendar day
following the Issue Date or (ii) declared effective on or prior to the 120th
calendar day following the Issue Date (each, a "Registration Default"), the
interest rate borne by the Debentures and, accordingly, the distribution rate
borne by the Preferred Securities shall be increase by one-quarter of one
percent (0.25%) per annum, from and including the day following Registration
Default to
<PAGE>
4
and including the 60th day following such Registration Default and by one-half
of one percent (0.50%) thereof from and after the 61st day following such
Registration Default. Upon (x) the filing of the Shelf Registration Statement
after the 60-day period described in clause (i) above or (y) the effectiveness
of the Shelf Registration Statement after the 120-day period described in clause
(ii) above, the interest rate borne by the Debentures and, accordingly, the
distribution rate borne by the Preferred Securities from the date of such filing
or effectiveness, as the case may be, will be reduced to the original rate in
respect of all periods thereafter. In the event that the Shelf Registration
Statement ceases to be effective during the Effectiveness Period for more than
60 days, whether or not consecutive, during any 12-month period, then the
interest rate borne by the Debentures (and, accordingly, the distribution rate
borne by the Preferred Securities) will increase by one-half of one percent
(0.50%) per annum from the 61st day until such time as the Shelf Registration
Statement again becomes effective. At no time will the interest rate borne by
the Debentures be increased by an amount in excess of one-half of one percent
(0.50%) pursuant to the provisions of this Agreement. Any interest payments
contemplated by this Section 2(c) shall be made semi-annually in arrears, with
the first payment due on the first interest payment date following the date on
which the Registration Penalty begins to accrue, pursuant to the terms of the
Indenture and the Trust Agreement.
(d) The Trust and the Company shall be deemed not to have used their
reasonable best efforts to keep the Shelf Registration Statement effective
during the requisite period if either the Trust or the Company voluntarily takes
any action that would result in Holders of Registrable Securities covered
thereby not being able to offer and sell any such Registrable Securities during
that period, unless (i) such action is required by applicable law or (ii) upon
the occurrence of any event contemplated by paragraph 3(c)(2)(iii) below, and
such action is taken by the Trust or the Company in good faith and for valid
business reasons; provided that, in the case of clause (ii) above, the Trust and
--------
the Company thereafter promptly comply with the requirements of Section 3(i)
below.
3. REGISTRATION PROCEDURES. In connection with any Shelf Registration
Statement, the following provisions shall apply:
(a) The Trust and the Company shall furnish to the Initial Purchasers
and their counsel, prior to the filing thereof with the Commission, a copy
of any Shelf Registration Statement, and each amendment thereof and each
amendment or supplement, if any, to the Prospectus included therein and
shall reflect in each such document, when so filed with the Commission, such
comments as the Initial Purchasers and such counsel reasonably may propose.
(b) The Trust and the Company shall take such action as may be necessary
so that (i) any Shelf Registration Statement, and any amendment thereto, and
any Prospectus forming part thereof, and any amendment or supplement thereto
(and each report or other document incorporated therein by reference in each
case) complies in all material respects with the Securities Act and the
Exchange Act and the respective rules and regulations thereunder, (ii) any
Shelf Registration Statement, and any amendment thereto, does not, when it
becomes effective, contain an untrue statement.
<PAGE>
5
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and (iii) any
Prospectus forming part of any Shelf Registration Statement, and any amendment
or supplement to such Prospectus, does not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements, in the light of the circumstances under which they were made, not
misleading.
(c) (1) The Company shall notify the Initial Purchasers and, in the case
of clause (i) of this Section 3(c), the Holders in writing:
(i) when a Shelf Registration Statement, and any amendment
thereto, has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto has become
effective; and
(ii) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the Prospectus
included therin or for additional information.
(2) The Company shall notify the Initial Purchasers and the Holders in
writing of:
(i) the issuance by the Commission of any stop order suspending
effectiveness of the Shelf Registration Statement or the initiation of
any proceedings for that purpose:
(ii) the receipt by the Trust or the Company of any
notification with respect to the suspension of the qualification of the
securities included therein for sale in any jurisdiction or the
initiation of any proceeding for such purpose; and
(iii) the happening of any event that requires the making of
any changes in the Shelf Registration Statement or the Prospectus so that
the Shelf Registration Statement and the Prospectus do not contain an
untrue statement of a material fact and do not omit to state a material
fact required to be stated therein or necessary to make the statements
therein (in the case of the Prospectus, in light of the circumstances
under which they were made) not misleading (which notice shall be
accompanied by an instruction to suspend the use of the Prospectus until
the requisite changes have been made).
(d) The Company shall use its reasonable best efforts to prevent the
issuance, and, if issued, to obtain the withdrawal, of any order suspending the
effectiveness of any Shelf Registration Statement at the earliest possible time.
(e) The Trust and the Company shall furnish to each Holder of
Registrable Securities included within the coverage of any Shelf Registration
Statement, without charge, at least one copy of such Shelf Registration
Statement and any post-effective
<PAGE>
6
amendments thereto, including financial statements and schedules, and, if the
Holder so requests in writing, all reports and other documents incorporated by
reference in the Shelf Registration Statement and exhibits (including those
incorporated by reference).
(f) The Trust and the Company shall, during the Effectiveness Period,
deliver to each Holder of Registrable Securities included within the coverage of
any Shelf Registration Statement, without charge, as many copies of the
Prospectus included in such Shelf Registration Statement and any amendment or
supplement thereto as such Holder may reasonably request; and each of the Trust
and the Company consents (except upon and during the continuance of any event
described in paragraphs 2(d) or 3(c)(2)(iii) above) to the use of the Prospectus
or any amendment or supplement thereto by each of the selling Holders of
Registrable Securities in connection with the offering and sale of the
Registrable Securities covered by the Prospectus or any amendment or supplement
thereto during the Effectiveness Period.
(g) Prior to any offering of Registrable Securities pursuant to any Shelf
Registration Statement, the Trust and the Company shall register or qualify or
cooperate with the Holders of Registrable Securities included therein and their
respective counsel in connection with the registration or qualification of such
Registrable Securities for offer and sale under the securities or blue sky laws
of such jurisdictions in the United States as any such Holders reasonably
request in writing and do any and all other acts or things necessary or
advisable to enable the offer and sale in such jurisdictions of the Registrable
Securities covered by such Shelf Registration Statement; provided that the
--------
Company shall not be required to (i) qualify as a foreign corporation, (ii)
consent to the service of process under the laws of any such state (except
service of process with respect to the offering and sale of the Registrable
Securities), (iii) subject to taxation in any such jurisdiction or (iv) make any
change to its certificate of incorporation or by-laws in connection with such
qualification.
(h) Unless the Registrable Securities shall be in book-entry only form,
the Trust and the Company shall cooperate with the Holders of Registrable
Securities to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold pursuant to any Shelf
Registration Statement free of any restrictive legends and in such permitted
denominations and registered in such names as Holders may request in connection
with the sale of Registrable Securities pursuant to such Shelf Registration
Statement.
(i) Upon the occurrence of any event contemplated by paragraph
3(c)(2)(iii) above, the Trust and the Company shall promptly prepare a
post-effective amendment to any Shelf Registration Statement or an amendment or
supplement to the related Prospectus or file any other required document so
that, as thereafter delivered to purchasers of the Registrable Securities
included therein, the Prospectus will not include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (except, in each case, for an untrue statement
<PAGE>
7
of a material fact or omission of a material fact made in reliance on and in
conformity with written information furnished to the Company or the Trust by or
on behalf of Holders specifically for use therein). The Trust and the Company
agree to notify the Holders to suspend use of the Prospectus, and the Holders
shall suspend use of the Prospectus, and not communicate such material
non-public information to any third party, and not sell or purchase, or offer to
sell or purchase, any securities of the Trust or the Company, until the Trust or
the Company has amended or supplemented the Prospectus so it does not contain
any such misstatement or omission. Subject to Section 2(d), at such time as
such public disclosure is otherwise made or the Trust and the Company determine
in good faith that such disclosure is not necessary, the Trust and the Company
agree to notify the Holders of such determination and to amend or supplement
the Prospectus if necessary, so it does not contain any such untrue statement or
omission therein and to furnish the Holders such numbers of copies of the
Prospectus as so amended or supplemented as the Holders may reasonably request.
(j) Not later than the effective date of any Shelf Registration Statement
hereunder, the Trust and the Company shall provide a CUSIP number for the
Preferred Securities registered under such Shelf Registration Statement; in the
event of and at the time of any distribution of the Debentures to Holders, the
Company shall provide a CUSIP number for the Debentures and provide the
applicable trustee with certificates for such Registrable Securities, in a form
eligible for deposit with DTC (to the extent that such Registrable Securities
are so eligible).
(k) The Trust and the Company shall comply with all applicable rules and
regulations of the Commission and shall make generally available to their
security holders or otherwise provide in accordance with Section 11(a) of the
Securities Act as soon as practicable after the effective date of the applicable
Shelf Registration Statement an earnings statement satisfying the provisions of
Section 11(a) of the Securities Act.
(l) The Trust and the Company shall qualify the Indenture, the Trust
Agreement and the Preferred Securities Guarantee Agreement under the Trust
Indenture Act in a timely manner.
(m) The Trust and the Company may require each Holder of Registrable
Securities to be sold pursuant to any Shelf Registration Statement to furnish to
the Trust and the Company such information regarding the Holder and the
distribution of such Registrable Securities as the Trust and the Company may
from time to time reasonably require for inclusion in such Shelf Registration
Statement and the Company and the Trust may exclude from such registration the
Registrable Securities of any Holder that fails to furnish such information
within a reasonable time after receiving such request.
(n) The Trust and the Company will each use their reasonable best efforts
to cause the Preferred Securities to be listed on the New York Stock Exchange or
other
<PAGE>
8
national securities exchange (which shall include the Nasdaq National
Market System) on or prior to the effective date of any Shelf Registration
Statement hereunder.
(o) The Trust and the Company shall take all other steps necessary
to effect the registration, offering and sale of the Registrable Securities
covered by the Shelf Registration Statement contemplated hereby.
4. REGISTRATION EXPENSES. Except as otherwise provided in Section 6,
the Company shall bear all fees and expenses incurred in connection with the
performance of its obligations under Sections 2 and 3 and shall bear or
reimburse the Holders for the reasonable fees and disbursements of one firm of
counsel designated by the Initial Purchasers on behalf of the Holders and
reasonably acceptable to the Company to act as counsel for the Holders in
connection therewith.
5. INDEMNIFICATION AND CONTRIBUTION. (a) In connection with any Shelf
Registration Statement, the Company and the Trust, jointly and severally, agree
to indemnify, defend and hold harmless the Initial Purchasers, each Holder, each
Underwriter who participates in an offering of Registrable Securities and each
person, if any, who controls any such party within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act from and against any loss, expense,
liability or claim (including the reasonable cost of investigation) which,
jointly or severally, any such Initial Purchaser or controlling person may incur
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any Shelf Registration Statement (or any amendment
thereto) covering Registrable Securities, including all documents incorporated
therein by reference, or, arises out of or is based upon any omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements made therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
Prospectus (or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except insofar as any such loss, expense, liability or claim arises
out of or is based upon any untrue statement or alleged untrue statement of a
material fact contained in and in conformity with information furnished in
writing by or on behalf of any Initial Purchaser, such Holder or any Underwriter
participating in an offering of Registrable Securities to the Company expressly
for use with reference to the Initial Purchasers, such Holder or such
Underwriter, as the case may be, in the Shelf Registration Statement (or
amendment thereto) or in the Prospectus (or any amendment or supplement
thereto) or arises out of or is based upon any omission or alleged omission to
state a material fact in connection with such information necessary to make such
information not misleading, provided that the foregoing indemnification with
--------
respect to any preliminary prospectus shall not inure to the benefit of any
Initial Purchaser, Holder or Underwriter participating in an offering of
Registrable Securities (or any person controlling such Initial Purchaser) from
whom the person asserting any such losses, claims, damages or liabilities
purchased any of the Registrable Securities if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of the Initial
Purchasers, such Holder or such Underwriter on the resale to such person, if
such is required by law, at or
<PAGE>
9
prior to the written confirmation of the sale of such Registrable Securities to
such person and if the Prospectus (as so amended or supplemented) would have
cured the defect giving rise to such loss, claim, damage or liability, unless
such failure resulted from non-compliance by the Company with Sections 3(c)(2)
and 3(i). For purposes of the last proviso the immediately preceding sentence,
the term "Prospectus" shall not be deemed to include the documents incorporated
therein by reference, and no Initial Purchaser, Holder or Underwriter
participating in an offering of Registrable Securities shall be obligated to
send or give any supplement or amendment to any document incorporated by
reference in any preliminary prospectus or Prospectus to any person.
(b) Each Holder severally agrees to indemnify, defend and hold harmless the
Company, the Trust, the Initial Purchasers, each Underwriter who participates in
an offering of Registrable Securities and the other selling Holders, each
officer and director of the Company, each trustee of the Trust and any person
who controls the Company, the Trust, the Initial Purchasers, such Underwriter,
other selling Holders or controlling persons within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act from and against any loss, expense,
liability or claim (including the reasonable cost of investigation) whatsoever
described in the indemnity contained in Section 5(a), as incurred, but only
insofar as any such loss, expense, liability or claim arises out of or is based
upon any untrue statement or alleged untrue statement of a material fact
contained in and in conformity with information furnished in writing by or on
behalf of such selling Holder expressly for use with reference to such Holder in
the Shelf Registration Statement (or amendment thereto) or in the Prospectus (or
any amendment or supplement thereto) or arises out of or is based upon any
omission or alleged omission to state a material fact in connection with such
information necessary to make such information not misleading; provided,
--------
however, that no such Holder shall be liable for any claims hereunder in excess
- -------
of the amount of net proceeds received by such Holder from the sale of
Registrable Securities pursuant to the Shelf Registration Statement.
(c) Each indemnified party shall give prompt notice to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, enclosing a copy of all papers served on such indemnified
party, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability which it may have other than on account of
this indemnity agreement. An indemnifying party may participate at its own
expense in the defense of any such action. If an indemnifying party so elects
within a reasonable time after receipt of such notice, such indemnifying
party,jointly with any other indemnifying party, may assume the defense of such
action with counsel chosen by it and approved by the indemnified party or
parties defendant in such action; provided that if any such indemnified
--------
party reasonably determines that there may be legal defenses available to such
indemnified party which are different from or in addition to those available to
such indemnifying party or that representation of such indemnifying party and
any indemnified party by the same counsel would present a conflict of interest,
then such indemnifying party or parties shall not be entitled to assume such
defense. If an indemnifying party is not entitled to assume the defense of such
action as a result of the proviso to the preceding sentences, counsel for such
indemnifying party shall be entitled to conduct the defense of such indemnifying
party and counsel for each indemnified party or parties shall be entitled to
conduct the defense of such indemnified party or parties. If an
<PAGE>
10
indemnifying party assumes the defense of an action in accordance with and as
permitted by the provisions of this paragraph, such indemnifying party shall not
be liable for any fees and expenses of counsel for the indemnified parties
incurred thereafter in connection with such action. In no event shall the
indemnifying party or parties be liable for the fees and expenses of more than
one counsel (in addition to any local counsel) separate from its own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity provision agreement provided for in this
Section 5 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company, the Trust, the
Initial Purchasers and the Holders shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by said
indemnity agreement incurred by the Company, the Trust, the Initial Purchasers
and the Holders, as incurred; provided that no Person guilty of fraudulent
--------
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person that was not guilty of such
fraudulent misrepresentation. As between the Company, the Trust, the Initial
Purchasers and the Holders, such parties shall contribute to such aggregate
losses, expenses, liabilities and claims of the nature contemplated by such
indemnity agreement in such proportion as shall be appropriate to reflect the
relative fault of the Company and the Trust on the one hand, and the Initial
Purchasers and the Holders, on the other hand, with respect to the statements or
omissions which resulted in such loss, expense, liabilities or claims, or action
in respect thereof, as well as any other relevant equitable considerations. The
relative fault of the Company and the Trust on the one hand, and the Initial
Purchasers and the Holders, on the other hand, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Trust, on the one hand, or
by or on behalf of the Initial Purchasers or the Holders, on the other, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Trust, the
Initial Purchaser or Holder within the meaning of Section 15 of the Securities
Act of Section 20 of the Exchange Act shall have the same rights to contribution
as such Initial Purchasers and the Holders of the Registrable Securities agree
that it would not be just and equitable if contributions pursuant to this
Section 5 were to be determined by pro rata allocation or by any other method of
allocation that does not take into account the relevant equitable
considerations. For purposes of this Section 5(d), each Person, if any, who
controls an Initial Purchaser or Holder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Initial Purchaser or Holder, and each director and officer
of the Company, each trustee of the Trust, and each Person, if any, who controls
the Company or the Trust within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act shall have the same rights to contribution as
the Company and the Trust. No party shall be liable for contribution with
respect to any action, suit, proceeding or claim settled without its written
consent.
6. UNDERWRITTEN OFFERING.
(a) The Holders of Registrable Securities covered by the Shelf Registration
Statement who desire to do so may sell such Registrable Securities in an
underwritten
<PAGE>
11
offering in accordance with the conditions set forth below. In any such
underwritten offering, the investment banker or bankers and manager or managers
that will administer the offering will be selected by, and the underwriting
arrangements with respect thereto will be approved by, the Holders of a
majority of the Registrable Securities to be included in such offering;
provided, however, that (i) such investment bankers and managers and
- --------- --------
underwriting arrangements must be reasonably satisfactory to the Company and the
Trust and (ii) neither the Company nor the Trust shall be obligated to arrange
for more than one underwritten offering during the Effectiveness Period. No
Holder may participate in any underwritten offering contemplated hereby unless
(i) such Holder agrees to sell such Holder's Registrable Securities in
accordance with any approved underwriting arrangements, (ii) such Holder
completes and executes all reasonable questionnaires, powers of attorney,
indemnities, underwriting agreements, lock-up letters and other documents
required under the terms of such approved underwriting arrangements and (iii) at
least 30% of the Registrable Securities outstanding as of the Closing Time are
included in such underwritten offering. The Holders participating in any
underwritten offering shall be responsible for any expenses customarily borne by
selling securityholders, including underwriting discounts and commissions, fees
and expenses of counsel to the selling securityholders and transfer taxes, if
any, and shall reimburse the Trust and the Company for the fees and
disbursements of their counsel, their independent public accountants and any
printing expenses incurred in connection with such underwritten offering.
Notwithstanding the foregoing, upon receipt of a request from the Managing
Underwriter or a representative of Holders of a majority of the Registrable
Securities outstanding to prepare and file an amendment or supplement to the
Shelf Registration Statement and Prospectus in connection with an underwritten
offering, the Company may delay the filing of any such amendment or supplement
for up to 90 days if the Company in good faith has a valid business reason for
such delay.
(b) The Trust and the Company shall enter into such customary agreements
(including underwriting agreements in customary form) which are reasonably
acceptable to the Trust and the Company, and take all other reasonably requested
actions in order to expedite or facilitate the registration or the disposition
of the Registrable Securities (subject to the last sentence of Section 6(a)
above), and in connection therewith, if an underwriting agreement is entered
into, cause the same to contain indemnification provisions and procedures
substantially identical to those set forth in Section 5 (or such other customary
provisions and procedures acceptable to the Managing Underwriters, if any, the
Company and the Trust) with respect to all parties to be indemnified pursuant to
Section 5 hereof.
(c) The Trust and the Company shall (i) make available for inspection by
the Holders of Registrable Securities to be registered thereunder, any
Underwriter participating in any disposition pursuant to such Shelf Registration
Statement, and any attorney, accountant or other agent retained by such Holders
or any such Underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Trust and the Company and its
subsidiaries; (ii) cause the Company's officers, directors and employees and the
Regular Trustees to make reasonably available for inspection all relevant
information reasonably requested by such Holders or any such Underwriter,
attorney, accountant or agent in connection with any such Shelf Registration
Statement, in each case as is customary for similar due diligence examinations;
provided, however, that any information that is designated
- --------- --------
<PAGE>
12
in writing by the Trust and the Company, in good faith, as confidential at the
time of delivery of such information shall be kept confidential by such Holders
or any such Underwriter, attorney, accountant or agent, unless such disclosure
is made in connection with a court proceeding or required by law, or such
information becomes available to the public generally or through a third party
without an accompanying obligation of confidentiality; and provided further that
-------- -------
the foregoing inspection and information gathering shall, to the greatest extent
possible, be coordinated on behalf of the Holders and the other parties entitled
thereto by one counsel designated by and on behalf of such Holders and other
parties reasonably acceptable to the Company and the Trust; (iii) make such
representations and warranties to the Holders of Registrable Securities
registered thereunder and the Underwriters, if any, in form, substance and scope
as are customarily made by the Company and the Trust to Underwriters in primary
underwritten offerings and covering matters including, but not limited to, those
set forth in the Purchase Agreement; (iv) obtain opinions of counsel to the
Trust and the Company (who may be the general counsel of the Company) and
updates thereof (which counsel and opinions (in form, scope and substance) shall
be reasonably satisfactory to the Managing Underwriters, if any) in customary
form addressed to each selling Holder and the Underwriters, if any, covering
such matters as are customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by such Holders
and Underwriters (it being agreed that the matters to be covered by such opinion
or a written statement by such counsel delivered in connection with such
opinions shall include, without limitation, as of the date of the opinion and as
of the effective date of the Shelf Registration Statement or most recent
post-effective amendment thereto, as the case may be, the absence from such
Shelf Registration Statement and the Prospectus included therein, as then
amended or supplemented, including the documents incorporated by reference
therein, of an untrue statement of a material fact or the omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading); (v) obtain "comfort letters" and updates
thereof from the independent public accountants of the Company (and, if
necessary, any other independent public accountants of any subsidiary of the
Company or of any business acquired by the Company for which financial
statements and financial data are, or are required to be, included in the Shelf
Registration Statement), addressed to each such Holder of Registrable Securities
registered thereunder and the Underwriters, if any, in customary form and
covering matters of the type customarily covered in "comfort letters" in
connection with primary underwritten offerings; and (vi) deliver such other
customary documents and certificates as may be reasonably requested by any such
Holders and the Managing Underwriters, if any, including those to evidence
compliance with Section 3(i) and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Trust and the
Company. The foregoing actions set forth in clauses (iii), (iv), (v) and (vi) of
this Section 3(c) shall be performed at each closing under any underwritten
offering to the extent required thereunder.
(d) Upon the request of the Company, the Holders agree not to effect any
public sale or distribution (including sales pursuant to Rule 144) of
Registrable Securities during the 10-trading day period prior to the date that
the Company has notified the Holders that it intends to commence a Company
Offering through the 180-day period immediately following the closing date of
such Company Offering (or such lesser period as may be required by the
underwriters of such Company Offering); provided, however, that (i) the
-------- -------
<PAGE>
13
Holders shall not be obligated to comply with this Section 6(d) until the first
anniversary of the date of this Agreement and (ii) the Holders shall not be
obligated to comply with this Section 6(d) on more than one occasion in any
12-month period.
(e) Notwithstanding any other provision of this Section 6, if the
Managing Underwriters advise the Holders in writing that marketing factors
require a limitation on the number of shares to be underwritten, the number of
shares included in the underwriting by each Holder shall be reduced on a pro
rata basis (based on the number of shares originally proposed to be so included
by such Holder) by such minimum number of shares as is necessary to comply with
such request. If any Holder who has requested inclusion in such underwriting as
provided above disapproves of the terms of the underwriting, such Holder may
elect to withdraw therefrom by written notice to the Company and the Managing
Underwriters.
7. MISCELLANEOUS.
(a) OTHER REGISTRATION RIGHTS. The Company may grant registration
rights that would permit any Person that is a third party the right to piggyback
on any Shelf Registration Statement; provided that if the Managing Underwriter,
--------
if any, of such offering delivers an opinion to the selling Holders that the
total amount of securities which they and the holders of such piggyback rights
intend to include in any Shelf Registration Statement is so large as to
materially adversely affect the success of such offering (including the price at
which such securities can be sold), then only the amount, number or kind of
securities to be offered for the account of holders of such piggyback rights
will be reduced to the extent necessary to reduce the total amount of securities
to be included in such offering to the amount, number or kind recommended by the
Managing Underwriter prior to any reduction in the amount of Registrable
Securities to be included.
(b) AMENDMENTS AND WAIVERS. The provision of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Trust and the Company have
obtained the written consent of the Initial Purchasers on behalf of the Holders
from time to time.
(c) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier, or air courier guaranteeing overnight delivery:
1. if to a Holder, at the most current address given by such Holder
to the Company in accordance with the provisions of this Section 7(c);
2. if to the Initial Purchasers, initially at the address set forth
in the Purchase Agreement; and
3. if to the Trust or the Company, initially at its address set forth
in the Purchase Agreement.
<PAGE>
14
All such notices and communications shall be deemed to have been duly given
when received, if delivered in person or by fax; five days after mailing,
if sent by mail; or the day following transmission, if sent by overnight
courier.
The Initial Purchasers or the Trust and the Company by notice to the
other may designate additional or different addresses for subsequent notices or
communications.
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
and the Holders, including, without the need for an express assignment or any
consent by the Trust or the Company thereto, subsequent Holders of Registrable
Securities. The Trust and the Company hereby agree to extend the benefits of
this Agreement to any Holder of Registrable Securities and any such Holder may
specifically enforce the provisions of this Agreement as if an original party
hereto.
(e) COUNTERPARTS. This agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) HEADINGS. The headings in this agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW. This agreement shall be governed by the laws of
the State of New York.
(h) SEVERABILITY. In the event that any one of more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
<PAGE>
15
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Trust and you.
Very truly yours,
RIGGS CAPITAL
By
---------------------
Name:
Title:
RIGGS NATIONAL CORPORATION
By
---------------------
Name:
Title:
The foregoing Registration Rights Agreement is hereby confirmed and accepted as
of the date first above written.
DILLON, READ & CO. INC.
FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
By DILLON, READ & CO. INC.
By /s/ Aaron Hill
-------------------------
Name:
Title:
By FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
By /s/ [SIGNATURE APPEARS HERE]
-------------------------
Name:
Title:
<PAGE>
15
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Trust and you.
Very truly yours,
RIGGS CAPITAL
By /s/ Linda Madrid
-------------------------------
Name:
Title:
RIGGS NATIONAL CORPORATION
By /s/ Linda Madrid
-------------------------------
Name:
Title:
The foregoing Registration Rights Agreement is hereby confirmed and accepted as
of the date first above written.
DILLON, READ & CO. INC.
FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
By DILLON, READ & CO. INC.
By
---------------------------------
Name:
Title:
By FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
By
---------------------------------
Name:
Title:
<PAGE>
AMENDMENT NO. 1 TO THE
REGISTRATION RIGHTS AGREEMENT
AMENDMENT NO. 1, dated as of March 25, 1997, TO THE REGISTRATION RIGHTS
AGREEMENT, dated as of December 13, 1996, among RIGGS NATIONAL CORPORATION (the
Company), RIGGS CAPITAL (the Trust), DILLON, READ & CO., INC. and FRIEDMAN,
BILLINGS, RAMSEY & CO., INC. (together with Dillon, Read & Co. Inc. the Initial
Purchasers).
WITNESSETH:
WHEREAS, the Company, the Trust and the Initial Purchasers have entered
into a certain REGISTRATION RIGHTS AGREEMENT, dated as of December 13, 1996 (the
Original Registration Rights Agreement; capitalized terms used but not defined
herein shall have the meaning set forth in the Original Registration Rights
Agreement);
WHEREAS, the parties hereto wish to otherwise amendment the Original
Registration Rights Agreement to the extent provided herein.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Term of Effectiveness For Shelf Registration Statement.
------------------------------------------------------
The words three years from the date the Shelf Registration
Statement in Section 2(b) of the Original Registration Rights Agreement
shall be deleted and replaced by the words two years from the date the
Shelf Registration Statement.
2. Effect on Original.
------------------
Except as modified by this Amendment No. 1, the Original
Registration Rights Agreement shall continue in full force and effect.
References to the "Registration Rights Agreement," "this Agreement" or
similar references to the Original Registration Rights Agreement in the
Original Registration Rights Agreement or otherwise, shall be
interpreted to mean the Original Registration Rights Agreement as
amended by this Amendment No. 1.
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Trust and you this 25th day of March 1997.
Very truly yours,
RIGGS CAPITAL
By /s/ Linda A. Madrid
------------------------------
Name: Linda A. Madrid
Title:
RIGGS NATIONAL CORPORATION
By /s/ Linda A. Madrid
------------------------------
Name: Linda A. Madrid
Title:
The foregoing Amendment Number 1 to the Original Registration Rights Agreement
is hereby confirmed and accepted as of the date first above written.
DILLON, READ & CO. INC.
FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
By DILLON, READ & CO. INC.
By /s/ Danforth Starr
----------------------------
Name:
Title:
By FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
By /s/ James R. Kleeblatt
----------------------------
Name:
Title:
<PAGE>
ARTHUR
ANDERSEN
ARTHUR ANDERSEN & CO. SC
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the reference to our
firm under the caption "Independent Public Accountants" in this Amendment No.1
to Registration Statement Form S-3 and related Prospectus of Riggs National
Corporation and Riggs Capital for the registration of Junior Subordinated
Deferrable Interest Debentures and Preferred Securities and to the incorporation
by reference therein of our report dated January 17, 1996 with respect to the
consolidated financial statements of Riggs National Corporation in its Annual
Report (Form 10-K) for the year ended December 31, 1995, filed with the
Securities and Exchange Commission.
/s/ Arthur Andersen LLP
Washington, D.C.
March 26, 1997
<PAGE>
Exhibit 25(a)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [_]
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
RIGGS NATIONAL CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 52-1217953
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1503 Pennsylvania Avenue, N.W.
Washington, D.C. 20005
(Address of principal executive offices) (Zip code)
----------------------
Junior Subordinated Deferrable Interest Debentures
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-
29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-
44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 19th day of March, 1997.
THE BANK OF NEW YORK
By: /s/PAUL J. SCHMALZEL
--------------------------
Name: PAUL J. SCHMALZEL
Title: ASSISTANT TREASURER
-4-
<PAGE>
-------------------------------------------------------- EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the
close of business September 30, 1996, published in
accordance with a call made by the Federal
Reserve Bank of this District pursuant to the provi-
ions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin..................... $ 4,404,522
Interest-bearing balances............. 732,833
Securities:
Held-to-maturity securities........... 789,964
Available-for-sale securities......... 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold...................... 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................28,728,602
LESS: Allowance for loan and
lease losses ..............584,525
LESS: Allocated transfer risk
reserve........................429
Loans and leases, net of unearned
income, allowance, and reserve 28,143,648
Assets held in trading accounts......... 1,004,242
Premises and fixed assets (including
capitalized leases)................... 605,668
Other real estate owned................. 41,238
Investments in unconsolidated
subsidiaries and associated
companies............................. 205,031
Customers' liability to this bank on
acceptances outstanding............... 949,154
Intangible assets....................... 490,524
Other assets............................ 1,305,839
-----------
Total assets............................ $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices................... $20,441,318
Noninterest-bearing .......8,158,472
Interest-bearing .........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs...... 11,710,903
Noninterest-bearing ..........46,182
Interest-bearing .........11,664,721
Federal funds purchased in
domestic offices of the
bank:
Federal funds purchased............... 1,565,288
Demand notes issued to the U.S.
Treasury.............................. 293,186
Trading liabilities..................... 826,856
Other borrowed money:
With original maturity of one year
or less............................. 2,103,443
With original maturity of more than
one year............................ 20,766
Bank's liability on acceptances exe-
cuted and outstanding................. 951,116
Subordinated notes and debentures....... 1,020,400
Other liabilities....................... 1,522,884
-----------
Total liabilities....................... 40,456,160
-----------
EQUITY CAPITAL
Common stock............................ 942,284
Surplus................................. 525,666
Undivided profits and capital
reserves.............................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale
securities............................ ( 2,073)
Cumulative foreign currency transla-
tion adjustments...................... ( 8,403)
-----------
Total equity capital.................... 3,586,850
-----------
Total liabilities and equity
capital ........................... $44,043,010
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and
Comptroller of the above-named bank do hereby declare
that this Report of Condition has been prepared in
conformance with the instructions issued by the Board
of Governors of the Federal Reserve System and is true
to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the
correctness of this Report of Condition and declare that
it has been examined by us and to the best of our knowledge
and belief has been prepared in conformance with the
instructions issued by the Board of Governors of the
Federal Reserve System and is true and correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
--------------------------------------------------------
<PAGE>
Exhibit 25(b)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
RIGGS NATIONAL CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 52-1217953
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1503 Pennsylvania Avenue, N.W.
Washington, D.C. 20005
(Address of principal executive offices) (Zip code)
----------------------
Guarantee of Series A Preferred Securities of
Riggs Capital
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-
29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-
44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 19th day of March, 1997.
THE BANK OF NEW YORK
By: /S/PAUL J. SCHMALZEL
-------------------------
Name: PAUL J. SCHMALZEL
Title: ASSISTANT TREASURER
-4-
<PAGE>
- --------------------------------------------------------------------------------
Consolidated Report of Condition of Exhibit 7
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin..................... $ 4,404,522
Interest-bearing balances............. 732,833
Securities:
Held-to-maturity securities........... 789,964
Available-for-sale securities......... 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold...................... 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................28,728,602
LESS: Allowance for loan and
lease losses ..............584,525
LESS: Allocated transfer risk
reserve........................429
Loans and leases, net of unearned
income, allowance, and reserve 28,143,648
Assets held in trading accounts......... 1,004,242
Premises and fixed assets (including
capitalized leases)................... 605,668
Other real estate owned................. 41,238
Investments in unconsolidated
subsidiaries and associated
companies............................. 205,031
Customers' liability to this bank on
acceptances outstanding............... 949,154
Intangible assets....................... 490,524
Other assets............................ 1,305,839
-----------
Total assets............................ $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices................... $20,441,318
Noninterest-bearing .......8,158,472
Interest-bearing .........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs...... 11,710,903
Noninterest-bearing ..........46,182
Interest-bearing .........11,664,721
Federal funds purchased in
domestic offices of the
bank:
Federal funds purchased............... 1,565,288
Demand notes issued to the U.S.
Treasury.............................. 293,186
Trading liabilities..................... 826,856
Other borrowed money:
With original maturity of one year
or less............................. 2,103,443
With original maturity of more than
one year............................ 20,766
Bank's liability on acceptances exe-
cuted and outstanding................. 951,116
Subordinated notes and debentures....... 1,020,400
Other liabilities....................... 1,522,884
-----------
Total liabilities....................... 40,456,160
-----------
EQUITY CAPITAL
Common stock............................ 942,284
Surplus................................. 525,666
Undivided profits and capital
reserves.............................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale
securities............................ ( 2,073)
Cumulative foreign currency transla-
tion adjustments...................... ( 8,403)
-----------
Total equity capital.................... 3,586,850
-----------
Total liabilities and equity
capital .............................. $44,043,010
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
- --------------------------------------------------------------------------------
<PAGE>
Exhibit 25 (c)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
RIGGS CAPITAL
(Exact name of obligor as specified in its charter)
Delaware 52-1217953
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
c/o Riggs National Corporation
1503 Pennsylvania Avenue, N.W.
Washington, D.C. 20005
(Address of principal executive offices) (Zip code)
______________________
Series A Preferred Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State 2 Rector Street, New York,
of New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-
44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 19th day of March, 1997.
THE BANK OF NEW YORK
By: /s/PAUL J. SCHMALZEL
---------------------------
Name: PAUL J. SCHMALZEL
Title: ASSISTANT TREASURER
-4-
<PAGE>
Exhibit 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin..................... $ 4,404,522
Interest-bearing balances............. 732,833
Securities:
Held-to-maturity securities........... 789,964
Available-for-sale securities......... 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold...................... 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................28,728,602
LESS: Allowance for loan and
lease losses ..............584,525
LESS: Allocated transfer risk
reserve........................429
Loans and leases, net of unearned
income, allowance, and reserve 28,143,648
Assets held in trading accounts......... 1,004,242
Premises and fixed assets (including
capitalized leases)................... 605,668
Other real estate owned................. 41,238
Investments in unconsolidated
subsidiaries and associated
companies............................. 205,031
Customers' liability to this bank on
acceptances outstanding............... 949,154
Intangible assets....................... 490,524
Other assets............................ 1,305,839
-----------
Total assets............................ $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices................... $20,441,318
Noninterest-bearing .......8,158,472
Interest-bearing .........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs...... 11,710,903
Noninterest-bearing ..........46,182
Interest-bearing .........11,664,721
Federal funds purchased in
domestic offices of the
bank:
Federal funds purchased............... 1,565,288
Demand notes issued to the U.S.
Treasury.............................. 293,186
Trading liabilities..................... 826,856
Other borrowed money:
With original maturity of one year
or less............................. 2,103,443
With original maturity of more than
one year............................ 20,766
Bank's liability on acceptances exe-
cuted and outstanding................. 951,116
Subordinated notes and debentures....... 1,020,400
Other liabilities....................... 1,522,884
-----------
Total liabilities....................... 40,456,160
-----------
EQUITY CAPITAL
Common stock............................ 942,284
Surplus................................. 525,666
Undivided profits and capital
reserves.............................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale
securities............................ ( 2,073)
Cumulative foreign currency transla-
tion adjustments...................... ( 8,403)
-----------
Total equity capital.................... 3,586,850
-----------
Total liabilities and equity
capital .............................. $44,043,010
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
- --------------------------------------------------------------------------------
