<PAGE> 1
As filed with the Securities and Exchange Commission on March 6, 1997
Reg. No._______________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
----------------------
<TABLE>
<S> <C>
CAPITAL TRUST I
FIFTH THIRD BANCORP CAPITAL TRUST II
(Exact name of registrant as (Exact name of registrants as
specified in its charter) specified in their Trust Agreements)
OHIO DELAWARE
(State or other jurisdiction of (State or other jurisdiction of incorporation
incorporation or organization) or organization of registrants)
31-0854434 TO BE APPLIED FOR
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
38 FOUNTAIN SQUARE PLAZA c/o FIFTH THIRD BANCORP
CINCINNATI, OHIO 45263 38 FOUNTAIN SQUARE PLAZA
(513) 579-5300 CINCINNATI, OHIO 45263
(Addresses, including zip code, and telephone number, (513) 579-5300
including area code, of registrant's (Address, including zip code, and telephone number,
principal executive offices) including area code, of each registrant's
principal executive offices)
</TABLE>
-----------------------
PAUL L. REYNOLDS, ESQ.
FIFTH THIRD BANCORP
38 FOUNTAIN SQUARE PLAZA
CINCINNATI, OHIO 45263
TEL: (513) 579-4300
FAX: (513) 744-6757
(Name, address, including zip code, and telephone number,
including area code, of agent for service of each registrant)
WITH A COPY TO:
MARK J. WELSHIMER, ESQ.
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
TEL: (212) 558-4000
FAX: (212) 558-3588
-----------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: from
time to time after the Registration Statement becomes effective.
-----------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. /x/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a cost-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration number of the earlier effective registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule
434 please check the following box. / /
-----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Proposed maximum Proposed maximum
Title of each class of Amount to offering price per aggregate Amount of
securities to be registered be registered unit(1) offering price(1) registration fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Junior Subordinated
Deferrable Interest Debentures
of Fifth Third Bancorp.............. $200,000,000 $1,000 $200,000,000 N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Preferred Securities of Capital
Trust I and Capital Trust II........ 200,000 shs $1,000 $200,000,000 $60,606.06
- ------------------------------------------------------------------------------------------------------------------------------------
Fifth Third Bancorp Guarantee with
respect to Preferred Securities(3)(4) N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Total............................... $200,000,000(5) 100% $200,000,000(5) $60,606.06
====================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of computing the registration date.
(2) The Junior Subordinated Deferrable Interest Debentures will be purchased by
Capital Trust I and Capital Trust II with the proceeds of the sale of the
Preferred Securities.
(3) No separate consideration will be received for Fifth Third Bancorp
Guarantee.
(4) This Registration Statement is deemed to cover the Junior Subordinated
Deferrable Interest Debentures of Fifth Third Bancorp, the rights of holders
of Junior Subordinated Deferrable Interest Debentures of Fifth Third Bancorp
under the Indenture, the rights of holders of Preferred Securities of
Capital Trust I and Capital Trust II under each Trust Agreement, the rights
of holders of the Preferred Securities under the Guarantees and the Expense
Agreement, which taken together, fully irrevocably and unconditionally
guarantee all of the respective obligations of Capital Trust I and Capital
Trust II under the Preferred Securities.
(5) Such amount represents the principal amount of Junior Subordinated
Deferrable Interest Debentures issued at their principal amount and the
issue price rather than the principal amount of Junior Subordinated
Deferrable Interest Debentures issued at an original issue discount. Such
amount also represents the initial public offering price of Capital Trust I
and Capital Trust II Preferred Securities.
-----------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
===============================================================================
<PAGE> 2
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED MARCH 6, 1997
$200,000,000
FIFTH THIRD BANCORP
Junior Subordinated Deferrable Interest Debentures
Capital Trust I
Capital Trust II
Preferred Securities fully and unconditionally
guaranteed, as described herein, by
FIFTH THIRD BANCORP
-----------
Fifth Third Bancorp, an Ohio corporation (the "Corporation"), may from
time to time offer in one or more series or issuances its junior subordinated
deferrable interest debentures (the "Junior Subordinated Debentures"). The
Junior Subordinated Debentures will be unsecured and subordinate and junior in
right of payment to all Senior Debt (as defined in "Description of Junior
Subordinated Debentures--Subordination") of the Corporation. If provided in an
accompanying Prospectus Supplement, the Corporation will have the right to defer
payments of interest on any series of Junior Subordinated Debentures by
extending the interest payment period thereon at any time or from time to time
for up to such number of consecutive interest payment periods (which shall not
extend beyond the Stated Maturity (as defined herein) of the Junior Subordinated
Debentures) with respect to each deferral period as may be specified in such
Prospectus Supplement (each, an "Extension Period"). In such circumstances,
however, the Corporation would not be permitted, subject to certain exceptions
set forth herein, to declare or pay any dividends, distributions or other
payments with respect to, or repay, repurchase, redeem or otherwise acquire, the
Corporation's capital stock or debt securities that rank pari passu in all
respects with or junior to such series of Junior Subordinated Debentures. See
"Description of Junior Subordinated Debentures--Option to Defer Interest
Payments" and "--Restrictions on Certain Payments".
Capital Trust I and Capital Trust II, each a statutory business trust
created under the laws of the State of Delaware (each, an "Issuer," and
collectively, the "Issuers"), may severally offer, from time to time, preferred
securities (the "Preferred Securities") representing preferred beneficial
interests in such Issuer. The Corporation will be the owner of the common
securities representing common ownership interests in such Issuer (the "Common
Securities" and, together with the Preferred Securities, the "Trust
Securities"). Holders of the (continued on next page)
THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is March __, 1997.
<PAGE> 3
(continued from previous page)
Preferred Securities will be entitled to receive preferential cumulative cash
distributions ("Distributions") accumulating from the date of original issuance
and payable periodically as provided in an accompanying Prospectus Supplement.
Concurrently with the issuance by an Issuer of its Preferred Securities, such
Issuer will invest the proceeds thereof and of any contributions received in
respect of the Common Securities in a corresponding series of the Corporation's
Junior Subordinated Debentures (the "Corresponding Junior Subordinated
Debentures") with terms corresponding to the terms of that Issuer's Preferred
Securities (the "Related Preferred Securities"). The Corresponding Junior
Subordinated Debentures will be the sole assets of each Issuer, and payments
under the Corresponding Junior Subordinated Debentures will be the only revenue
of each Issuer. If provided in an accompanying Prospectus Supplement, the
Corporation may, upon receipt of approval of the Board of Governors of the
Federal Reserve System (the "Federal Reserve") (if such approval is then
required), redeem the Corresponding Junior Subordinated Debentures (and cause
the redemption of the Related Preferred Securities) or may terminate each Issuer
and cause the Corresponding Junior Subordinated Debentures to be distributed to
the holders of the Related Preferred Securities in liquidation of their
interests in such Issuer. See "Description of Preferred Securities--Liquidation
Distribution Upon Termination".
If provided in an accompanying Prospectus Supplement, the Corporation will
have the right to defer payments of interest on any series of Corresponding
Junior Subordinated Debentures. If interest payments are so deferred,
Distributions on the Related Preferred Securities will also be deferred and the
Corporation will not be permitted, subject to certain exceptions set forth
herein, to declare or pay any cash distributions with respect to the
Corporation's capital stock or debt securities that rank pari passu in all
respects with or junior to the Corresponding Junior Subordinated Debentures.
During an Extension Period, Distributions will continue to accumulate (and the
Related Preferred Securities will accumulate additional Distributions thereon at
the rate per annum set forth in the Prospectus Supplement). See "Description of
Preferred Securities--Distributions".
Taken together, the Corporation's obligations under each series of Junior
Subordinated Debentures, the Indenture, the related Trust Agreement, the related
Expense Agreement and the related Guarantee (each, as defined herein), in the
aggregate, provide a full, irrevocable and unconditional guarantee of payments
of distributions and other amounts due on the Related Preferred Securities. See
"Relationship Among the Preferred Securities, the Corresponding Junior
Subordinated Debentures, the Expense Agreements and the Guarantees--Full and
Unconditional Guarantee". The payment of Distributions with respect to the
Preferred Securities of each Issuer and payments on liquidation or redemption
with respect to such Preferred Securities, in each case out of funds held by
such Issuer, are each irrevocably guaranteed by the Corporation to the extent
described herein (each, a "Guarantee"). See "Description of Guarantees". The
obligations of the Corporation under each Guarantee will be subordinate and
junior in right of payment to all Senior Debt of the Corporation.
The Junior Subordinated Debentures and Preferred Securities may be offered
in amounts, at prices and on terms to be determined at the time of offering;
provided, however, the aggregate initial public offering price of all Junior
Subordinated Debentures (other than Corresponding Junior Subordinated
Debentures) and Preferred Securities (including the Corresponding Junior
Subordinated Debentures) issued pursuant to the Registration Statement of which
this Prospectus forms a part shall not exceed $200,000,000. Certain specific
terms of the Junior Subordinated Debentures or Preferred Securities in respect
of which this Prospectus is being delivered will be described in an accompanying
Prospectus Supplement, including without limitation and where applicable and to
the extent not set forth herein, (a) in the case of Junior Subordinated
Debentures, the specific designation, aggregate principal amount, denominations,
Stated Maturity (including any provisions for the shortening or extension
thereof), interest payment dates, interest rate (which may be fixed or variable)
or method of calculating interest, if any, applicable Extension Period or
interest deferral terms, if any, place or places where principal, premium, if
any, and interest, if any, will be payable, any terms of redemption, any sinking
fund provisions, terms for any conversion or exchange into other securities,
initial offering
-2-
<PAGE> 4
or purchase price, methods of distribution and any other special terms, and (b)
in the case of Preferred Securities, the identity of the Issuer, specific title,
(continued from previous page)
aggregate amount, stated liquidation amount, number of securities, Distribution
rate or method of calculating such rate, Distribution payment dates, applicable
Distribution deferral terms, if any, place or places where Distributions will be
payable, any terms of redemption, exchange, initial offering or purchase price,
methods of distribution and any other special terms.
The Prospectus Supplement also will contain information, as applicable,
about certain United States Federal income tax consequences relating to the
Junior Subordinated Debentures or Preferred Securities.
The Junior Subordinated Debentures and Preferred Securities may be sold to
or through underwriters, through dealers, remarketing firms or agents or
directly to purchasers. See "Plan of Distribution". The names of any
underwriters, dealers, remarketing firms or agents involved in the sale of
Junior Subordinated Debentures or Preferred Securities in respect of which this
Prospectus is being delivered and any applicable fee, commission or discount
arrangements with them will be set forth in a Prospectus Supplement. The
Prospectus Supplement will state whether the Junior Subordinated Debentures or
Preferred Securities will be listed on any national securities exchange or
automated quotation system. If the Junior Subordinated Debentures or Preferred
Securities are not listed on any national securities exchange or automated
quotation system, there can be no assurance that there will be a secondary
market for the Junior Subordinated Debentures or Preferred Securities.
This Prospectus may not be used to consummate sales of Junior Subordinated
Debentures or Preferred Securities unless accompanied by a Prospectus
Supplement.
-3-
<PAGE> 5
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.
The Corporation and the Issuers have filed with the Commission a
Registration Statement on Form S-3 (together with all amendments and exhibits
thereto, the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities offered hereby.
This Prospectus does not contain all the information set forth in the
Registration Statement, certain portions of which have been omitted as permitted
by the rules and regulations of the Commission. For further information with
respect to the Corporation and the securities offered hereby, reference is made
to the Registration Statement and the exhibits and the financial statements,
notes and schedules filed as a part thereof or incorporated by reference
therein, which may be inspected at the public reference facilities of the
Commission at the addresses set forth above or through the Commission's home
page on the Internet. Statements made in this Prospectus concerning the contents
of any documents referred to herein are not necessarily complete, and in each
instance are qualified in all respects by reference to the copy of such document
filed as an exhibit to the Registration Statement.
No separate financial statements of any Issuer have been included herein.
The Corporation and the Issuers do not consider that such financial statements
would be material to holders of the Preferred Securities because each Issuer is
a newly formed special purpose entity, has no operating history or independent
operations and is not engaged in and does not propose to engage in any activity
other than holding as trust assets the Corresponding Junior Subordinated
Debentures of the Corporation and issuing the Trust Securities. Furthermore,
taken together, the Corporation's obligations under each series of Corresponding
Junior Subordinated Debentures, the Indenture, the related Trust Agreement, the
related Expense Agreement and the related Guarantee provide, in the aggregate, a
full, irrevocable and unconditional guarantee of payments of Distributions and
other amounts due on the Related Preferred Securities of an Issuer. See "The
Issuers", "Description of Preferred Securities", "Description of Junior
Subordinated Debentures--Corresponding Junior Subordinated Debentures" and
"Description of Guarantees". In addition, the Corporation does not expect that
any of the Issuers will be filing reports under the Exchange Act with the
Commission.
-4-
<PAGE> 6
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Corporation's Annual Report on Form 10-K for the year ended December
31, 1996, as filed with the Commission is incorporated into this Prospectus by
reference.
Each document or report filed by the Corporation pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to
the termination of any offering of securities made by this Prospectus shall be
deemed to be incorporated by reference into this Prospectus and to be a part of
this Prospectus from the date of filing of such document. Any statement
contained herein, or in a document all or a portion of which is incorporated or
deemed to be incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of the Registration Statement and this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement or this Prospectus.
The Corporation will provide without charge to any person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference herein (other
than exhibits not specifically incorporated by reference into the texts of such
documents). Requests for such documents should be directed to Fifth Third
Bancorp, 38 Fountain Square Plaza, Cincinnati, Ohio 45263, Attention: Paul L.
Reynolds, telephone number (513) 579-5300.
-5-
<PAGE> 7
THE CORPORATION
The Corporation is a multi-bank holding company headquartered in
Cincinnati, Ohio, with approximately $21 billion in total consolidated assets as
of December 31, 1996. The Corporation was organized in Ohio on October 7, 1974,
and on April 15, 1975 became the owner of all of the outstanding capital stock
of The Fifth Third Bank, an Ohio banking corporation (the "Bank").
At December 31, 1996, the Corporation also owned five other banks and one
savings bank in Ohio, two banks and two savings banks in Kentucky, one bank in
Indiana, and one bank in Florida, as well as various other non-bank
subsidiaries. The banks owned by the Corporation are referred to collectively
herein as the "Subsidiary Banks". At December 31, 1996, the Bank represented
more than 45% of the Corporation's assets, revenues and net income, although the
Corporation expects that the operations of the other subsidiaries will become
increasingly significant. The Bank will in the foreseeable future continue to be
the major source of the Corporation's assets, revenues and net income.
During January 1997, The Fifth Third Savings Bank of Western Kentucky, FSB
was merged into and with Fifth Third Bank of Kentucky, Inc., Fifth Third Savings
Bank of Northern Ohio, FSB was merged into and with Fifth Third Bank of
Northeastern Ohio and Fifth Third Savings Bank of Northern Kentucky, FSB was
merged into and with Fifth Third Bank of Northern Kentucky, Inc. At the same
time, the company was deregistered as a savings-and-loan holding company.
The Corporation's principal business strategy is to aggressively market
its four business lines in the three-state region of Ohio, Indiana and
Kentucky. These four business lines include commercial banking, retail banking,
trust and investment management and data processing services. As part of its
business strategy, the Corporation pursues a strong sales ethic, aggressive
expense control and diverse fee income-based revenue.
The Corporation offers a full line of commercial and retail banking
products and services. These products and services are offered through the
Corporation's banking subsidiaries and their offices.
The Corporation also provides, through its banking subsidiaries, full
service trust and investment services. The Corporation's banking subsidiaries
focus on trust and investment services for individuals, corporations and
not-for-profit organizations. Personal trust services include private banking,
tax and real estate services, trust services and services to private
foundations. Services to corporations and not-for-profit organizations include
employee benefits, corporate trust, stock transfers, securities custody, mutual
funds and foundations and endowments.
The Corporation is also in the data processing business through a
wholly-owned subsidiary of the Bank, Midwest Payment Systems, Inc. ("MPS"),
which provides merchant processing services and electronic funds transfer
("EFT") services for the Corporation and its bank subsidiaries as well as other
retail and financial institutions. MPS is a significant participant in the EFT
business and is a source of substantial fee income to the Corporation.
The principal executive office of the Corporation is located at 38
Fountain Square Plaza, Cincinnati, Ohio 45263, and its telephone number is (513)
579-5300.
-6-
<PAGE> 8
SUPERVISION AND REGULATION
THE CORPORATION
The Corporation, as a bank holding company, is subject to the restrictions
of the Bank Holding Company Act of 1956, as amended ("BHC Act"). BHC Act
provides that the acquisition of control of a bank is subject to the prior
approval of the Board of Governors of the Federal Reserve System. The
Corporation is required to obtain the prior approval of the Federal Reserve
Board before it can acquire more than 5% of the voting shares of another bank.
BHC Act does not permit the Federal Reserve to approve an acquisition by the
Corporation, or any of its subsidiaries, of any bank located in a state other
than Ohio, unless the acquisition is specifically authorized by the law of the
state in which such bank is located.
On September 29, 1994, BHC Act was amended by The Interstate Banking and
Branch Efficiency Act of 1994 which authorizes interstate bank acquisitions
anywhere in the country effective one year after the date of enactment, and
interstate branching by acquisition and consolidation effective June 1, 1997, in
those states that have not opted out by that date. The impact of this amendment
on the Corporation cannot be measured at this time.
The Corporation's subsidiary state banks are primarily subject to the laws
of the state in which each is located, the Board of Governors of the Federal
Reserve System and/or the Federal Deposit Insurance Corporation. The subsidiary
bank which is organized under the laws of the United States is primarily subject
to regulation by the Comptroller of the Currency and the Federal Deposit
Insurance Corporation. Prior to January, 1997, the Corporation, as a savings and
loan holding company, and its savings and loan subsidiaries were subject to
regulation by the Office of Thrift Supervision.
The Corporation and its subsidiaries are subject to certain restrictions
on intercompany loans and investments. The Corporation and its subsidiaries are
also subject to certain restrictions with respect to engaging in the
underwriting and public sale and distribution of securities. In addition, the
Corporation and its subsidiaries are subject to examination at the discretion of
supervisory authorities.
The Bank Holding Company Act limits the activities which may be engaged in
by the Corporation and its subsidiaries to ownership of banks and those
activities which the Federal Reserve Board has deemed or may in the future find
to be so closely related to banking as to be a proper incident thereto.
The Financial Reform, Recovery and Enforcement Act of 1989 (FIRREA)
provides that a holding company's controlled insurance institutions are liable
for any loss incurred by the Federal Deposit Insurance Corporation in connection
with the default of, or any FDIC-assisted transaction involving, an affiliated
insured bank or savings association.
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") covers a wide expanse of banking regulatory issues. FDICIA deals with
the recapitalization of the Bank Insurance Fund, with deposit insurance reform,
including requiring the FDIC to establish a risk-based premium assessment
system, and with a number of other regulatory and supervisory matters.
-7-
<PAGE> 9
THE SUBSIDIARY BANKS
The principal source of income and funds for the Corporation are dividends
from its subsidiaries. During the year 1997, the amount of dividends that the
subsidiaries can pay to the Corporation without prior approval of regulatory
agencies is limited to their 1997 eligible net profits, as defined, and
$121,967,000, the adjusted retained 1996 and 1995 net income of the
subsidiaries.
-8-
<PAGE> 10
THE ISSUERS
Each Issuer is a statutory business trust formed under Delaware law
pursuant to (i) a trust agreement executed by the Corporation, as Depositor of
the Issuer, and the Delaware Trustee (as defined herein) of such Issuer and (ii)
the filing of a certificate of trust with the Delaware Secretary of State. Each
trust agreement will be amended and restated in its entirety (each, as so
amended and restated, a "Trust Agreement") substantially in the form filed as an
exhibit to the Registration Statement of which this Prospectus forms a part.
Each Trust Agreement will be qualified as an indenture under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"). Each Issuer exists for the
exclusive purposes of (i) issuing and selling its Trust Securities, (ii) using
the proceeds from the sale of such Trust Securities to acquire a series of
Corresponding Junior Subordinated Debentures issued by the Corporation, and
(iii) engaging in only those other activities necessary or incidental thereto
(such as registering the transfer of the Trust Securities). Accordingly, the
Corresponding Junior Subordinated Debentures and the right to reimbursement of
expenses under the related Expense Agreement will be the sole assets of each
Issuer, and payments under the Corresponding Junior Subordinated Debentures and
the related Expense Agreement will be the sole revenue of each Issuer.
All of the Common Securities of each Issuer will be owned by the
Corporation. The Common Securities of an Issuer will rank pari passu, and
payments will be made thereon pro rata, with the Preferred Securities of such
Issuer, except that upon the occurrence and continuance of an event of default
under a Trust Agreement resulting from an event of default under the Indenture,
the rights of the Corporation, as holder of the Common Securities, to payment in
respect of Distributions and payments upon liquidation or redemption will be
subordinated to the rights of the holders of the Preferred Securities of such
Issuer. See "Description of Preferred Securities--Subordination of Common
Securities". The Corporation will acquire Common Securities in an aggregate
Liquidation Amount equal to not less than 3% of the total capital of each
Issuer.
Unless otherwise specified in the applicable Prospectus Supplement, each
Issuer has a term of approximately 55 years, but may terminate earlier as
provided in the applicable Trust Agreement. Each Issuer's business and affairs
are conducted by its trustees, each appointed by the Corporation as holder of
the Common Securities. The trustees for each Issuer will be Wilmington Trust
Company, as Property Trustee (the "Property Trustee") and as Delaware Trustee
(the "Delaware Trustee"), and two individual trustees (the "Administrative
Trustees") who are employees or officers of or affiliated with the Corporation
(collectively, the "Issuer Trustees"). Wilmington Trust Company, as Property
Trustee, will act as sole indenture trustee under each Trust Agreement for
purposes of compliance with the Trust Indenture Act. Wilmington Trust Company
will also act as trustee under the Guarantees and the Indenture (each as defined
herein). See "Description of Guarantees" and "Description of Junior Subordinated
Debentures". The holder of the Common Securities of an Issuer, or the holders of
a majority in Liquidation Amount of the Related Preferred Securities if an event
of default under the Trust Agreement for such Issuer has occurred and is
continuing, will be entitled to appoint, remove or replace the Property Trustee
and/or the Delaware Trustee for such Issuer. In no event will the holders of the
Preferred Securities have the right to vote to appoint, remove or replace the
Administrative Trustees; such voting rights are vested exclusively in the holder
of the Common Securities. The duties and obligations of each Issuer Trustee are
governed by the applicable Trust Agreement. The Corporation will pay all fees
and expenses related to each Issuer and the offering of the Preferred Securities
and will pay, directly or indirectly, all ongoing costs, expenses and
liabilities of each Issuer.
The principal executive office of each Issuer is 38 Fountain Square Plaza,
Cincinnati, Ohio 45263 and its telephone number is (513) 579-5300.
-9-
<PAGE> 11
USE OF PROCEEDS
Except as otherwise set forth in the applicable Prospectus Supplement, the
Corporation intends to use the proceeds from the sale of its Junior Subordinated
Debentures (including Corresponding Junior Subordinated Debentures issued to the
Issuers in connection with the investment by the Issuers of all of the proceeds
from the sale of Trust Securities) for general corporate purposes.
DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures are to be issued in one or more series
under a Junior Subordinated Indenture, as supplemented from time to time (as so
supplemented, the "Indenture"), between the Corporation and Wilmington Trust
Company, as trustee (the "Debenture Trustee"). This summary of certain terms and
provisions of the Junior Subordinated Debentures and the Indenture, which
summarizes the material provisions thereof, does not purport to be complete and
is subject to, and is qualified in its entirety by reference to, the Indenture,
the form of which is filed as an exhibit to the Registration Statement of which
this Prospectus forms a part, and to the Trust Indenture Act, to each of which
reference is hereby made. The Indenture is qualified under the Trust Indenture
Act. Whenever particular defined terms of the Indenture (as supplemented or
amended from time to time) are referred to herein or in a Prospectus Supplement,
such defined terms are incorporated herein or therein by reference.
GENERAL
Each series of Junior Subordinated Debentures will rank pari passu with
all other series of Junior Subordinated Debentures and will be unsecured and
subordinate and junior in right of payment to the extent and in the manner set
forth in the Indenture to all Senior Debt (as defined below) of the Corporation.
See "--Subordination". The Corporation is a non-operating holding company and
almost all of the operating assets of the Corporation and its consolidated
subsidiaries are owned by such subsidiaries. The Corporation relies primarily on
dividends from such subsidiaries to meet its obligations. See "Certain
Regulatory Considerations--Dividends". 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 the subsidiary, except
to the extent the Corporation may itself be recognized as a creditor of that
subsidiary. Accordingly, the Junior Subordinated Debentures will be effectively
subordinated to all existing and future liabilities of the Corporation's
subsidiaries, and holders of Junior Subordinated Debentures should look only to
the assets of the Corporation for payments on the Junior Subordinated
Debentures. Except as otherwise provided in the applicable Prospectus
Supplement, the Indenture does not limit the incurrence or issuance of other
secured or unsecured debt of the Corporation, including Senior Debt, whether
under the Indenture, any other existing indenture or any other indenture that
the Corporation may enter into in the future or otherwise. See "--Subordination"
and the Prospectus Supplement relating to any offering of Preferred Securities
or Junior Subordinated Debentures.
The Junior Subordinated Debentures will be issuable in one or more series
pursuant to an indenture supplemental to the Indenture or a resolution of the
Corporation's Board of Directors or a committee thereof.
-10-
<PAGE> 12
The applicable Prospectus Supplement will describe the following terms of
the Junior Subordinated Debentures: (1) the title of the Junior Subordinated
Debentures; (2) any limit upon the aggregate principal amount of the Junior
Subordinated Debentures; (3) the date or dates on which the principal of the
Junior Subordinated Debentures is payable (the "Stated Maturity") or the method
of determination thereof; (4) the rate or rates, if any, or method of
calculating the rate or rates, if any, at which the Junior Subordinated
Debentures shall bear interest, the dates on which any such interest shall be
payable (the "Interest Payment Dates"), the right, if any, of the Corporation to
defer or extend an Interest Payment Date, and the record dates for any interest
payable on any Interest Payment Date or the method by which any of the foregoing
shall be determined; (5) the place or places where, subject to the terms of the
Indenture as described below under "--Payment and Paying Agents", the principal
of and premium, if any, and interest on the Junior Subordinated Debentures will
be payable and where, subject to the terms of the Indenture as described below
under "--Denominations, Registration and Transfer," the Junior Subordinated
Debentures may be presented for registration of transfer or exchange and the
place or places where notices and demands to or upon the Corporation in respect
of the Junior Subordinated Debentures and the Indentures may be made ("Place of
Payment"); (6) any period or periods within which or date or dates on which, the
price or prices at which and the terms and conditions upon which Junior
Subordinated Debentures may be redeemed, in whole or in part, at the option of
the Corporation or a holder thereof; (7) the obligation or the right, if any, of
the Corporation or a holder thereof to redeem, purchase or repay the Junior
Subordinated Debentures and the period or periods within which, the price or
prices at which, the currency or currencies (including currency unit or units)
in which and the other terms and conditions upon which the Junior Subordinated
Debentures shall be redeemed, repaid or purchased, in whole or in part, pursuant
to such obligation; (8) the denominations in which any Junior Subordinated
Debentures shall be issuable if other than denominations of $25 and any integral
multiple thereof; (9) if other than in U.S. Dollars, the currency or currencies
(including currency unit or units) in which the principal of (and premium, if
any) and interest and Additional Interest, if any, on the Junior Subordinated
Debentures shall be payable, or in which the Junior Subordinated Debentures
shall be denominated; (10) any additions, modifications or deletions in the
events of default under the Indenture or covenants of the Corporation specified
in the Indenture with respect to the Junior Subordinated Debentures; (11) if
other than the principal amount thereof, the portion of the principal amount of
Junior Subordinated Debentures that shall be payable upon declaration of
acceleration of the maturity thereof; (12) any additions or changes to the
Indenture with respect to a series of Junior Subordinated Debentures as shall be
necessary to permit or facilitate the issuance of such series in bearer form,
registrable or not registrable as to principal, and with or without interest
coupons; (13) any index or indices used to determine the amount of payments of
principal of and premium, if any, on the Junior Subordinated Debentures and the
manner in which such amounts will be determined; (14) the terms and conditions
relating to the issuance of a temporary Global Security representing all of the
Junior Subordinated Debentures of such series and the exchange of such temporary
Global Security for definitive Junior Subordinated Debentures of such series;
(15) subject to the terms described herein under "--Global Junior Subordinated
Debentures", whether the Junior Subordinated Debentures of the series shall be
issued in whole or in part in the form of one or more Global Securities and, in
such case, the Depositary for such Global Securities, which Depositary shall be
a clearing agency registered under the Exchange Act; (16) the appointment of any
paying agent or agents; (17) the terms and conditions of any obligation or right
of the Corporation or a holder to convert or exchange the Junior Subordinated
Debentures into Preferred Securities; (18) the form of Trust Agreement,
Guarantee Agreement and Expense Agreement, if applicable; (19) the relative
degree, if any, to which such Junior Subordinated Debentures of the series shall
be senior to or be subordinated to other series of such Junior Subordinated
Debentures or other indebtedness of the Corporation in right of payment, whether
such other series of Junior Subordinated Debentures or other indebtedness are
outstanding or not; and (20) any other terms of the Junior Subordinated
Debentures not inconsistent with the provisions of the Indenture.
-11-
<PAGE> 13
Junior Subordinated Debentures may be sold at a substantial discount below
their stated principal amount, bearing no interest or interest at a rate which
at the time of issuance is below market rates. Certain United States Federal
income tax consequences and special considerations applicable to any such Junior
Subordinated Debentures will be described in the applicable Prospectus
Supplement.
If the purchase price of any of the Junior Subordinated Debentures is
payable in one or more foreign currencies or currency units or if any Junior
Subordinated Debentures are denominated in one or more foreign currencies or
currency units or if the principal of, premium, if any, or interest, if any, on
any Junior Subordinated Debentures is payable in one or more foreign currencies
or currency units, the restrictions, elections, certain United States Federal
income tax consequences, specific terms and other information with respect to
such series of Junior Subordinated Debentures and such foreign currency or
currency units will be set forth in the applicable Prospectus Supplement.
If any index is used to determine the amount of payments of principal of,
premium, if any, or interest on any series of Junior Subordinated Debentures,
special United States Federal income tax, accounting and other considerations
applicable thereto will be described in the applicable Prospectus Supplement.
DENOMINATIONS, REGISTRATION AND TRANSFER
Unless otherwise specified in the applicable Prospectus Supplement, the
Junior Subordinated Debentures will be issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof. Junior
Subordinated Debentures of any series will be exchangeable for other Junior
Subordinated Debentures of the same issue and series, of any authorized
denominations, of a like aggregate principal amount, of the same original issue
date and Stated Maturity and bearing the same interest rate.
Junior Subordinated Debentures may be presented for exchange as provided
above, and may be presented for registration of transfer (with the form of
transfer endorsed thereon, or a satisfactory written instrument of transfer,
duly executed), at the office of the appropriate securities registrar or at the
office of any transfer agent designated by the Corporation for such purpose with
respect to any series of Junior Subordinated Debentures and referred to in the
applicable Prospectus Supplement, without service charge and upon payment of any
taxes and other governmental charges as described in the Indenture. The
Corporation will appoint the Debenture Trustee as securities registrar under the
Indenture. If the applicable Prospectus Supplement refers to any transfer agents
(in addition to the securities registrar) initially designated by the
Corporation with respect to any series of Junior Subordinated Debentures, the
Corporation may at any time rescind the designation of any such transfer agent
or approve a change in the location through which any such transfer agent acts,
provided that the Corporation maintains a transfer agent in each place of
payment for such series. The Corporation may at any time designate additional
transfer agents with respect to any series of Junior Subordinated Debentures.
In the event of any redemption, neither the Corporation nor the Debenture
Trustee shall be required to (i) issue, register the transfer of, or exchange
Junior Subordinated Debentures of any series during the period beginning at the
opening of business 15 days before the day of selection for redemption of Junior
Subordinated Debentures of that series and ending at the close of business on
the day of mailing of the relevant notice of redemption or (ii) transfer or
exchange any Junior Subordinated Debentures so selected for redemption, except,
in the case of any Junior Subordinated Debentures being redeemed in part, any
portion thereof not to be redeemed.
-12-
<PAGE> 14
GLOBAL JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures of a series may be issued in whole or
in part in the form of one or more Global Junior Subordinated Debentures that
will be deposited with, or on behalf of, a depositary (the "Depositary")
identified in the Prospectus Supplement relating to such series. Global Junior
Subordinated Debentures may be issued only in fully registered form and in
either temporary or permanent form. Unless and until it is exchanged in whole or
in part for the individual Junior Subordinated Debentures represented thereby, a
Global Junior Subordinated Debenture may not be transferred except as a whole by
the Depositary for such Global Junior Subordinated Debenture to a nominee of
such Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by the Depositary or any nominee to a successor
Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of Junior Subordinated Debentures will be described in the Prospectus Supplement
relating to such series. The Corporation anticipates that the following
provisions will generally apply to depositary arrangements.
Upon the issuance of a Global Junior Subordinated Debenture, and the
deposit of such Global Junior Subordinated Debenture with or on behalf of the
Depositary, the Depositary for such Global Junior Subordinated Debenture or its
nominee will credit, on its book-entry registration and transfer system, the
respective principal amounts of the individual Junior Subordinated Debentures
represented by such Global Junior Subordinated Debenture to the accounts of
persons that have accounts with such Depositary ("Participants"). Such accounts
shall be designated by the dealers, underwriters or agents with respect to such
Junior Subordinated Debentures or by the Corporation if such Junior Subordinated
Debentures are offered and sold directly by the Corporation. Ownership of
beneficial interests in a Global Junior Subordinated Debenture will be limited
to Participants or persons that may hold interests through Participants.
Ownership of beneficial interests in such Global Junior Subordinated Debenture
will be shown on, and the transfer of that ownership will be effected only
through, records maintained by the applicable Depositary or its nominee (with
respect to interests of Participants) and the records of Participants (with
respect to interests of persons who hold through Participants). The laws of some
states require that certain purchasers of securities take physical delivery of
such securities in definitive form. Such limits and such laws may impair the
ability to transfer beneficial interests in a Global Junior Subordinated
Debenture.
So long as the Depositary for a Global Junior Subordinated Debenture, or
its nominee, is the registered owner of such Global Junior Subordinated
Debenture, such Depositary or such nominee, as the case may be, will be
considered the sole owner or holder of the Junior Subordinated Debentures
represented by such Global Junior Subordinated Debenture for all purposes under
the Indenture governing such Junior Subordinated Debentures. Except as provided
below, owners of beneficial interests in a Global Junior Subordinated Debenture
will not be entitled to have any of the individual Junior Subordinated
Debentures of the series represented by such Global Junior Subordinated
Debenture registered in their names, will not receive or be entitled to receive
physical delivery of any such Junior Subordinated Debentures of such series in
definitive form and will not be considered the owners or holders thereof under
the Indenture.
Payments of principal of (and premium, if any) and interest on individual
Junior Subordinated Debentures represented by a Global Junior Subordinated
Debenture registered in the name of a Depositary or its nominee will be made to
the Depositary or its nominee, as the case may be, as the registered owner of
the Global Junior Subordinated Debenture representing such Junior Subordinated
Debentures. None of the Corporation, the Debenture Trustee, any Paying Agent, or
the Securities Registrar for such Junior Subordinated Debentures will have any
responsibility or liability for any aspect
-13-
<PAGE> 15
of the records relating to or payments made on account of beneficial ownership
interests of the Global Junior Subordinated Debenture representing such Junior
Subordinated Debentures or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
The Corporation expects that the Depositary for a series of Junior
Subordinated Debentures or its nominee, upon receipt of any payment of
principal, premium, if any, or interest in respect of a permanent Global Junior
Subordinated Debenture representing any of such Junior Subordinated Debentures,
immediately will credit Participants' accounts with payments in amounts
proportionate to their respective beneficial interest in the principal amount of
such Global Junior Subordinated Debenture for such Junior Subordinated
Debentures as shown on the records of such Depositary or its nominee. The
Corporation also expects that payments by Participants to owners of beneficial
interests in such Global Junior Subordinated Debenture held through such
Participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in bearer
form or registered in "street name." Such payments will be the responsibility of
such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Depositary for a series of Junior Subordinated Debentures is at any time
unwilling, unable or ineligible to continue as depositary and the Corporation is
unable to locate a qualified successor, the Corporation will issue individual
Junior Subordinated Debentures of such series in exchange for the Global Junior
Subordinated Debenture representing such series of Junior Subordinated
Debentures. In addition, the Corporation may at any time and in its sole
discretion, subject to any limitations described in the Prospectus Supplement
relating to such Junior Subordinated Debentures, determine not to have any
Junior Subordinated Debentures of such series represented by one or more Global
Junior Subordinated Debentures and, in such event, will issue certificated
Junior Subordinated Debentures of such series in exchange for the Global Junior
Subordinated Debenture or Securities representing such series of Junior
Subordinated Debentures. Further, if the Corporation so specifies with respect
to the Junior Subordinated Debentures of a series, an owner of a beneficial
interest in a Global Junior Subordinated Debenture representing Junior
Subordinated Debentures of such series may, on terms acceptable to the
Corporation, the Debenture Trustee and the Depositary for such Global Junior
Subordinated Debenture, receive certificated Junior Subordinated Debentures of
such series in exchange for such beneficial interests, subject to any
limitations described in the Prospectus Supplement relating to such Junior
Subordinated Debentures. In any such instance, an owner of a beneficial interest
in a Global Junior Subordinated Debenture will be entitled to physical delivery
of certificated Junior Subordinated Debentures of the series represented by such
Global Junior Subordinated Debenture equal in principal amount to such
beneficial interest and to have such Junior Subordinated Debentures registered
in its name. Individual Junior Subordinated Debentures of such series so issued
will be issued in denominations, unless otherwise specified by the Corporation,
of $1,000 and integral multiples thereof.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement,
payment of principal of (and premium, if any) and any interest on Junior
Subordinated Debentures will be made at the office of the Debenture Trustee in
the City of Wilmington, Delaware or at the office 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 Global Junior Subordinated Debentures, by check mailed to the address of
the Person entitled thereto as such address shall appear in the securities
register or (ii) by transfer to an account maintained by the person entitled
thereto as specified in the securities register, provided that proper transfer
instructions have been received by the Regular Record Date. Unless otherwise
indicated in the applicable Prospectus Supplement, payment
-14-
<PAGE> 16
of any interest on Junior Subordinated Debentures will be made to the person in
whose name such Junior Subordinated Debenture is registered at the close of
business on the Regular Record Date for such interest, except in the case of
Defaulted Interest. The Corporation may at any time designate additional paying
agents or rescind the designation of any paying agent; however the Corporation
will at all times be required to maintain a paying agent in each place of
payment for each series of Junior Subordinated Debentures.
Any moneys deposited with the Debenture Trustee or any paying agent, or
then held by the Corporation in trust, for the payment of the principal of (and
premium, if any) or interest on any Junior Subordinated Debenture and remaining
unclaimed for two years after such principal (and premium, if any) or interest
has become due and payable shall, at the request of the Corporation, be repaid
to the Corporation and the holder of such Junior Subordinated Debenture shall
thereafter look, as a general unsecured creditor, only to the Corporation for
payment thereof.
OPTION TO DEFER INTEREST PAYMENTS
If provided in the applicable Prospectus Supplement, the Corporation will
have the right at any time and from time to time during the term of any series
of Junior Subordinated Debentures to defer payment of interest for up to such
number of consecutive interest payment periods as may be specified in the
applicable Prospectus Supplement (each, an "Extension Period"), subject to the
terms, conditions and covenants, if any, specified in such Prospectus
Supplement, provided that such Extension Period may not extend beyond the Stated
Maturity of such series of Junior Subordinated Debentures. Certain United States
Federal income tax consequences and special considerations applicable to any
such Junior Subordinated Debentures will be described in the applicable
Prospectus Supplement.
REDEMPTION
Unless otherwise indicated in the applicable Prospectus Supplement, Junior
Subordinated Debentures will not be subject to any sinking fund.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Corporation may, at its option, redeem the Junior Subordinated Debentures of any
series in whole at any time or in part from time to time. If the Junior
Subordinated Debentures of any series are so redeemable only on or after a
specified date or upon the satisfaction of additional conditions, the applicable
Prospectus Supplement will specify such date or describe such conditions. Junior
Subordinated Debentures in denominations larger than $25 may be redeemed in part
but only in integral multiples of $25. Except as otherwise specified in the
applicable Prospectus Supplement, the redemption price for any Junior
Subordinated Debenture so redeemed shall equal any accrued and unpaid interest
(including Additional Interest) thereon to the redemption date, plus 100% of the
principal amount thereof. The Corporation has committed to the Federal Reserve
that the Corporation will not exercise its right to redeem the Junior
Subordinated Debentures prior to the Stated Maturity without having received the
prior approval of the Federal Reserve to do so, if such approval is then
required under applicable Federal Reserve capital guidelines or policies.
Except as otherwise specified in the applicable Prospectus Supplement, if
a Tax Event (as defined below) in respect of the Issuer of any Related Preferred
Securities or a Capital Treatment Event (as defined below) in respect of such
Related Preferred Securities shall occur and be continuing, the Corporation may,
at its option, redeem such series of Corresponding Junior 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
equal to 100% of the principal amount of such Junior Subordinated Debentures
then outstanding plus accrued and unpaid interest to the date fixed for
-15-
<PAGE> 17
redemption, except as otherwise specified in the applicable Prospectus
Supplement. The Corporation has committed to the Federal Reserve that the
Corporation will not exercise its right to redeem the Junior Subordinated
Debentures prior to the Stated Maturity without having received the prior
approval of the Federal Reserve to do so, if such approval is then required
under applicable Federal Reserve capital guidelines or policies.
"Tax Event" means the receipt by an Issuer of a series of Related
Preferred Securities of an opinion of counsel experienced in such matters to the
effect that, as a result of any amendment to, or change (including any announced
proposed change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein, or
as a result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is announced on or after the date
of issuance of such Related Preferred Securities, there is more than an
insubstantial risk that (i) such Issuer is, or will be within 90 days of the
date of such opinion, subject to United States Federal income tax with respect
to income received or accrued on the Corresponding Junior Subordinated
Debentures, (ii) interest payable by the Corporation on such Corresponding
Junior Subordinated Debentures is not, or within 90 days of the date of such
opinion, will not be, deductible by the Corporation, in whole or in part, for
United States Federal income tax purposes, or (iii) such Issuer is, or will be
within 90 days of the date of such opinion, subject to more than a de minimis
amount of other taxes, duties or other governmental charges.
A "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 rules or
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,
rules or regulations, which amendment or change is effective or which
pronouncement, action or decision is announced on or after the date of issuance
of the Preferred Securities, there is more than an insubstantial risk that the
Corporation will not be entitled to treat an amount equal to the aggregate
Liquidation Amount of the Preferred Securities as "Tier 1 Capital" (or the then
equivalent thereof) for purposes of the capital adequacy guidelines of the
Federal Reserve, as then in effect and applicable to the Corporation.
Notice of any redemption will be mailed at least 45 days but not more than
75 days before the redemption date to each Holder of Junior Subordinated
Debentures to be redeemed at its registered address. Unless the Corporation
defaults in payment of the redemption price, on and after the redemption date
interest shall cease to accrue on such Junior Subordinated Debentures or
portions thereof called for redemption.
RESTRICTIONS ON CERTAIN PAYMENTS
The Corporation will also covenant, as to each series of Junior
Subordinated Debentures, that it will not, and will not permit any subsidiary of
the Corporation to, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Corporation's capital stock or (ii) make any payment of principal of or
interest or premium, if any, on or repay or repurchase or redeem any debt
securities of the Corporation (including other Junior Subordinated Debentures)
that rank pari passu in all respects with or junior in interest to the Junior
Subordinated Debentures (other than (a) repurchases, redemptions or other
acquisitions of shares of capital stock of the Corporation in connection with
any employment contract, benefit plan or other similar arrangement with or for
the benefit of one or more employees, officers, directors or consultants, in
connection with a dividend reinvestment or stockholder stock purchase plan or in
connection with the issuance of capital stock of the Corporation (or securities
convertible into or exercisable for such
-16-
<PAGE> 18
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period, (b) as a result of any exchange or
conversion of any class or series of the Corporation's capital stock (or any
capital stock of a subsidiary of the Corporation) for any class or series of the
Corporation's capital stock or of any class or series of the Corporation's
indebtedness for any class or series of the Corporation's capital stock, (c) the
purchase of fractional interests in shares of the Corporation's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (d) any declaration of a dividend in
connection with any stockholder's rights plan, or the issuance of rights, stock
or other property under any stockholder's rights plan, or the redemption or
repurchase of rights pursuant thereto, or (e) any dividend in the form of stock,
warrants, options or other rights where the dividend stock or the stock issuable
upon exercise of such warrants, options or other rights is the same stock as
that on which the dividend is being paid or ranks pari passu with or junior to
such stock), if at such time (i) there shall have occurred any event of which
the Corporation has actual knowledge that (a) with the giving of notice or the
lapse of time, or both, would constitute an "Event of Default" under the
Indenture with respect to the Junior Subordinated Debentures of such series and
(b) in respect of which the Corporation shall not have taken reasonable steps to
cure, (ii) if such Junior Subordinated Debentures are held by an Issuer of a
series of Related Preferred Securities, the Corporation shall be in default with
respect to its payment of any obligations under the Guarantee relating to such
Related Preferred Securities or (iii) the Corporation shall have given notice of
its selection of an Extension Period as provided in the Indenture with respect
to the Junior Subordinated Debentures of such series and shall not have
rescinded such notice, or such Extension Period, or any extension thereof, shall
be continuing.
MODIFICATION OF INDENTURE
From time to time the Corporation and the Debenture Trustee may, without
the consent of the holders of any series of Junior Subordinated Debentures,
amend, waive or supplement the Indenture for specified purposes, including,
among other things, curing ambiguities, defects or inconsistencies (provided
that any such action does not materially adversely affect the interest of the
holders of any series of Junior Subordinated Debentures or, in the case of
Corresponding Junior Subordinated Debentures, the holders of the Related
Preferred Securities so long as they remain outstanding) and qualifying, or
maintaining the qualification of, the Indenture under the Trust Indenture Act.
The Indenture contains provisions permitting the Corporation and the Debenture
Trustee, with the consent of the holders of not less than a majority in
principal amount of each outstanding series of Junior Subordinated Debentures
affected, to modify the Indenture in a manner affecting adversely the rights of
the holders of such series of the Junior Subordinated Debentures in any material
respect; provided, that no such modification may, without the consent of the
holder of each outstanding Junior Subordinated Debenture so affected, (i) change
the Stated Maturity of any series of Junior Subordinated Debentures (except as
otherwise specified in the applicable Prospectus Supplement), or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or change the method of calculating the rate of interest
thereon, or (ii) reduce the percentage of principal amount of Junior
Subordinated Debentures of any series, the holders of which are required to
consent to any such modification of the Indenture, provided that, in the case of
Corresponding Junior Subordinated Debentures, so long as any of the Related
Preferred Securities remain outstanding, (a) no such modification may be made
that adversely affects the holders of such Related Preferred Securities in any
material respect, and no termination of the Indenture may occur, and no waiver
of any event of default or compliance with any covenant under the Indenture may
be effective, without the prior consent of the holders of at least a majority of
the aggregate Liquidation Amount of all outstanding Related Preferred Securities
affected unless and until the principal of the Corresponding Junior Subordinated
Debentures and all accrued and unpaid interest thereon have been paid in full
and certain other conditions have been satisfied and (b) where a consent under
the Indenture would require
-17-
<PAGE> 19
the consent of each holder of Corresponding Junior Subordinated Debentures, no
such consent will be given by the Property Trustee without the prior consent of
each holder of Related Preferred Securities.
In addition, the Corporation and the Debenture Trustee may execute,
without the consent of any holder of Junior Subordinated Debentures, any
supplemental Indenture for the purpose of creating any new series of Junior
Subordinated Debentures.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to a series of Junior Subordinated Debentures that has
occurred and is continuing constitutes a "Debenture Event of Default" with
respect to such series of Junior Subordinated Debentures:
(i) failure for 30 days to pay any interest on such series of Junior
Subordinated Debentures, including any Additional Interest in respect thereof,
when due (subject to the deferral of any interest payment in the case of an
Extension Period); or
(ii) failure to pay any principal or premium, if any, on such series of
Junior Subordinated Debentures when due whether at maturity or upon redemption;
or
(iii) failure to observe or perform any other covenants contained in the
indenture for 90 days after written notice to the Corporation from the Debenture
Trustee or the holders of at least 25% in aggregate outstanding principal amount
of such affected series of outstanding Junior Subordinated Debentures; or
(iv) certain events of bankruptcy, insolvency or reorganization of the
Corporation.
The holders of a majority in aggregate outstanding principal amount of
Junior Subordinated Debentures of each series affected have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Debenture Trustee. The Debenture Trustee or the holders of not less than
25% in aggregate outstanding principal amount of Junior Subordinated Debentures
of each series affected may declare the principal due and payable immediately
upon a Debenture Event of Default. In case a Debenture Event of Default shall
occur and be continuing as to a series of Corresponding Junior Subordinated
Debentures, the Property Trustee will have the right to declare the principal of
and the interest on such Corresponding Junior Subordinated Debentures, and any
other amounts payable under the Indenture, to be forthwith due and payable and
to enforce its other rights as a creditor with respect to such Corresponding
Junior Subordinated Debentures. In the case of Corresponding Junior Subordinated
Debentures, should the Debenture Trustee or the Property Trustee fail to make
such declaration, the holders of at least 25% in aggregate Liquidation Amount of
the Related Preferred Securities shall have such right. The Property Trustee may
annul such declaration and waive such default, provided all defaults have been
cured and all payment obligations have been made current. Should the Property
Trustee fail to annul such declaration and waive such default, the holders of a
majority in aggregate Liquidation Amount of the Related Preferred Securities
shall have such right.
The holders of a majority in aggregate outstanding principal amount of
each series of Junior Subordinated Debentures affected thereby may, on behalf of
the holders of all the Junior Subordinated Debentures of such series, waive any
default, except a default in the payment of principal or interest (including any
Additional Interest) (unless such default has been cured and a sum sufficient to
pay all matured installments of interest (including any Additional Interest) and
principal due otherwise than by
-18-
<PAGE> 20
acceleration has been deposited with the Debenture Trustee) or a default in
respect of a covenant or provision which under the Indenture cannot be modified
or amended without the consent of the holder of each outstanding Junior
Subordinated Debenture of such series. In the case of Corresponding Junior
Subordinated Debentures, the holders of a majority in aggregate Liquidation
Amount of the Related Preferred Securities shall have such right to the extent
permissible under applicable law. 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 PREFERRED SECURITIES
If a Debenture Event of Default with respect to a series of Corresponding
Junior Subordinated Debentures has occurred and is continuing and such event is
attributable to the failure of the Corporation to pay interest or principal on
such Corresponding Junior Subordinated Debentures on the date such interest or
principal is due and payable, a holder of Related Preferred Securities may
institute a legal proceeding directly against the Corporation for enforcement of
payment to such holder of the principal of or interest (including any Additional
Interest) on such Corresponding Junior Subordinated Debentures having a
principal amount equal to the aggregate Liquidation Amount of the Related
Preferred Securities of such holder (a "Direct Action"). The Corporation may not
amend the Indenture to remove the foregoing right to bring a Direct Action
without the prior written consent of the holders of all of the Preferred
Securities outstanding. If the right to bring a Direct Action is removed, the
applicable Issuer may become subject to the reporting obligations under the
Exchange Act. The Corporation shall have the right under the Indenture to
set-off any payment made to such holder of Preferred Securities by the
Corporation in connection with a Direct Action.
The holders of the Preferred Securities will not be able to exercise
directly any remedies other than those set forth in the preceding paragraph
available to the holders of the Corresponding Junior Subordinated Debentures
unless there shall have been an event of default under the Trust Agreement.
See "Description of Preferred Securities--Events of Default; Notice".
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTION
The Indenture provides that the Corporation shall not consolidate with or
merge into any other person or convey, transfer or lease its properties and
assets substantially as an entirety to any person, and no person shall
consolidate with or merge into the Corporation or convey, transfer or lease its
properties and assets substantially as an entirety to the Corporation, unless
(i) in case the Corporation consolidates with or merges into another person or
conveys or transfers its properties and assets substantially as an entirety to
any person, the successor is organized under the laws of the United States or
any state or the District of Columbia, and such successor expressly assumes the
Corporation's obligations on the Junior 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, and (iii)
certain other conditions as prescribed by the Indenture are met.
The general provisions of the Indenture do not afford holders of the
Junior Subordinated Debentures protection in the event of a highly leveraged or
other transaction involving the Corporation that may adversely affect holders of
the Junior Subordinated Debentures.
-19-
<PAGE> 21
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all Junior
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation (i) have become due and payable or (ii) will become due and payable
at their Stated Maturity within one year, and the Corporation deposits or causes
to be deposited with the Debenture Trustee funds, in trust, for the purpose and
in an amount in the currency or currencies in which the Junior Subordinated
Debentures are payable sufficient to pay and discharge the entire indebtedness
on the Junior Subordinated Debentures not previously delivered to the Debenture
Trustee for cancellation for the principal (and premium, if any) and interest
(including any Additional Interest) to the date of the deposit or to the Stated
Maturity, as the case may be, then the Indenture will cease to be of further
effect (except as to the Corporation's obligations to pay all other sums due
pursuant to the Indenture and to provide the officers' certificates and opinions
of counsel described therein), and the Corporation will be deemed to have
satisfied and discharged the Indenture.
CONVERSION OR EXCHANGE
If and to the extent indicated in the applicable Prospectus Supplement,
the Junior Subordinated Debentures of any series may be convertible or
exchangeable into Junior Subordinated Debentures of another series or into
Preferred Securities of another series. The specific terms on which Junior
Subordinated Debentures of any series may be so converted or exchanged will be
set forth in the applicable Prospectus Supplement. Such terms may include
provisions for conversion or exchange, either mandatory, at the option of the
holder, or at the option of the Corporation, in which case the number of shares
of Preferred Securities or other securities to be received by the holders of
Junior Subordinated Debentures would be calculated as of a time and in the
manner stated in the applicable Prospectus Supplement.
SUBORDINATION
The Junior Subordinated Debentures will be subordinate in right of
payment, to the extent set forth in the Indenture, to all Senior Debt (as
defined below) of the Corporation. If the Corporation defaults in the payment of
any principal, premium, if any, or interest, if any, or any other amount payable
on any Senior Debt when the same becomes due and payable, whether at maturity or
at a date fixed for redemption or by declaration of acceleration or otherwise,
then, unless and until such default has been cured or waived or has ceased to
exist or all Senior Debt has been paid, no direct or indirect payment (in cash,
property, securities, by set-off or otherwise) may be made or agreed to be made
on the Junior Subordinated Debentures, or in respect of any redemption,
repayment, retirement, purchase or other acquisition of any of the Junior
Subordinated Debentures.
As used herein, "Senior Debt" means any obligation of the Corporation to
its creditors, whether now outstanding or subsequently incurred, other than any
obligation as to which, in the instrument creating or evidencing the obligation
or pursuant to which the obligation is outstanding, it is provided that such
obligation is not Senior Debt, but does not include trade accounts payable and
accrued liabilities arising in the ordinary course of business. Senior Debt
includes the Corporation's outstanding subordinated debt securities and any
subordinated debt securities issued in the future with substantially similar
subordination terms, but does not include the Junior Subordinated Debentures of
any Series or any junior subordinated debt securities issued in the future with
subordination terms substantially similar to those of the Junior Subordinated
Debentures. Substantially all of the existing indebtedness of the Corporation
constitutes Senior Debt.
-20-
<PAGE> 22
In the event of (i) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding relating
to the Corporation, its creditors or its property, (ii) any proceeding for the
liquidation, dissolution or other winding up of the Corporation, voluntary or
involuntary, whether or not involving insolvency or bankruptcy proceedings,
(iii) any assignment by the Corporation for the benefit of creditors or (iv) any
other marshalling of the assets of the Corporation, all Senior Debt (including
any interest thereon accruing after the commencement of any such proceedings)
shall first be paid in full before any payment or distribution, whether in cash,
securities or other property, shall be made on account of the Junior
Subordinated Debentures. In such event, any payment or distribution on account
of the Junior Subordinated Debentures, whether in cash, securities or other
property, that would otherwise (but for the subordination provisions) be payable
or deliverable in respect of the Junior Subordinated Debentures will be paid or
delivered directly to the holders of Senior Debt in accordance with the
priorities then existing among such holders until all Senior Debt (including any
interest thereon accruing after the commencement of any such proceedings) has
been paid in full.
In the event of any such proceeding, after payment in full of all sums
owing with respect to Senior Debt, the holders of Junior Subordinated
Debentures, together with the holders of any obligations of the Corporation
ranking on a parity with the Junior Subordinated Debentures, will be entitled to
be paid from the remaining assets of the Corporation the amounts at the time due
and owing on the Junior Subordinated Debentures and such other obligations
before any payment or other distribution, whether in cash, property or
otherwise, will be made on account of any capital stock or obligations of the
Corporation ranking junior to the Junior Subordinated Debentures. If any payment
or distribution on account of the Junior Subordinated Debentures of any
character or any security, whether in cash, securities or other property is
received by any holder of any Junior Subordinated Debentures in contravention of
any of the terms hereof and before all the Senior Debt has been paid in full,
such payment or distribution or security will be received in trust for the
benefit of, and must be paid over or delivered and transferred to, the holders
of the Senior Debt at the time outstanding in accordance with the priorities
then existing among such holders for application to the payment of all Senior
Debt remaining unpaid to the extent necessary to pay all such Senior Debt in
full. By reason of such subordination, in the event of the insolvency of the
Corporation, holders of Senior Debt may receive more, ratably, and holders of
the Junior Subordinated Debentures may receive less, ratably, than the other
creditors of the Corporation. Such subordination will not prevent the occurrence
of any Event of Default under the Indenture.
The Junior Subordinated Indenture places no 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.
TRUST EXPENSES
Pursuant to the Expense Agreement for each series of Corresponding Junior
Subordinated Debentures, the Corporation will irrevocably and unconditionally
agree with each Issuer that holds Junior Subordinated Debentures that the
Corporation will pay to such Issuer, and reimburse such Issuer for, the full
amounts of any costs, expenses or liabilities of the Issuer, other than
obligations of the Issuer to pay to the holders of any Preferred Securities or
other similar interests in the Issuer the amounts due such holders pursuant to
the terms of the Preferred Securities or such other similar interests, as the
case may be. Such payment obligation will include any such costs, expenses or
liabilities of the Issuer that are required by applicable law to be satisfied in
connection with a termination of such Issuer.
-21-
<PAGE> 23
GOVERNING LAW
The Indenture and the Junior Subordinated Debentures will be governed by
and construed in accordance with the laws of the State of New York.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of Junior Subordinated Debentures, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. The Debenture Trustee is not required to expend
or risk its own funds or otherwise incur personal financial liability in the
performance of its duties if the Debenture Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
CORRESPONDING JUNIOR SUBORDINATED DEBENTURES
The Corresponding Junior Subordinated Debentures may be issued in one or
more series of Junior Subordinated Debentures under the Indenture with terms
corresponding to the terms of a series of Related Preferred Securities. In that
event, concurrently with the issuance of each Issuer's Preferred Securities,
such Issuer will invest the proceeds thereof and the consideration paid by the
Corporation for the Common Securities of such Issuer in such series of
Corresponding Junior Subordinated Debentures issued by the Corporation to such
Issuer. Each series of Corresponding Junior Subordinated Debentures will be in
the principal amount equal to the aggregate stated Liquidation Amount of the
Related Preferred Securities and the Common Securities of such Issuer and will
rank pari passu with all other series of Junior Subordinated Debentures. Holders
of the Related Preferred Securities will have the rights in connection with
modifications to the Indenture or upon occurrence of Debenture Events of
Default, as described under "--Modification of Indenture" and "--Debenture
Events of Default", unless provided otherwise in the Prospectus Supplement for
such Related Preferred Securities.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Tax Event or a Capital Treatment Event shall occur and be continuing, the
Corporation may, at its option, redeem the Corresponding Junior Subordinated
Debentures at any time within 90 days of the occurrence of such Tax Event or
Capital Treatment Event, in whole but not in part, subject to the provisions of
the Indenture and whether or not such Corresponding Junior Subordinated
Debentures are then otherwise redeemable at the option of the Corporation. The
redemption price for any Corresponding Junior Subordinated Debentures shall be
equal to 100% of the principal amount of such Corresponding Junior Subordinated
Debentures then outstanding plus accrued and unpaid interest to the date fixed
for redemption. For so long as the applicable Issuer is the holder of all the
outstanding Corresponding Junior Subordinated Debentures, the proceeds of any
such redemption will be used by the Issuer to redeem the corresponding Trust
Securities in accordance with their terms. The Corporation may not redeem a
series of Corresponding Junior Subordinated Debentures in part unless all
accrued and unpaid interest has been paid in full on all outstanding
Corresponding Junior Subordinated Debentures of such series for all interest
periods terminating on or prior to the Redemption Date. The Corporation has
committed to the Federal Reserve that the Corporation will not exercise its
right to redeem the Junior Subordinated Debentures prior to the Stated Maturity
without having received the prior approval of the Federal Reserve to do so, if
such approval is then required under applicable Federal Reserve capital
guidelines or policies.
-22-
<PAGE> 24
The Corporation will covenant in the Indenture, as to each series of
Corresponding Junior Subordinated Debentures, that if and so long as (i) the
Issuer of the related series of Trust Securities is the holder of all such
Corresponding Junior Subordinated Debentures, (ii) a Tax Event in respect of
such Issuer has occurred and is continuing and (iii) the Corporation has
elected, and has not revoked such election, to pay Additional Sums (as defined
under "Description of Preferred Securities--Redemption or Exchange") in respect
of such Trust Securities, the Corporation will pay to such Issuer such
Additional Sums. The Corporation will also covenant, as to each series of
Corresponding Junior Subordinated Debentures, (i) to maintain directly or
indirectly 100% ownership of the Common Securities of the Issuer to which such
Corresponding Junior Subordinated Debentures have been issued, provided that
certain successors which are permitted pursuant to the Indenture may succeed to
the Corporation's ownership of the Common Securities, (ii) not to voluntarily
terminate, wind-up or liquidate any Issuer, except (a) in connection with a
distribution of Corresponding Junior Subordinated Debentures to the holders of
the Preferred Securities in exchange therefor upon liquidation of such Issuer or
(b) in connection with certain mergers, consolidations or amalgamations
permitted by the related Trust Agreement, and (iii) to use its reasonable
efforts, consistent with the terms and provisions of the related Trust
Agreement, to cause such Issuer to be classified as a grantor trust and not
as an association taxable as a corporation for United States Federal income tax
purposes. The Corporation has committed to the Federal Reserve that the
Corporation will not exercise its right to redeem the Junior Subordinated
Debentures prior to the Stated Maturity without having received the prior
approval of the Federal Reserve to do so, if such approval is then required
under applicable Federal Reserve capital guidelines or policies.
-23-
<PAGE> 25
DESCRIPTION OF PREFERRED SECURITIES
Pursuant to the terms of the Trust Agreement for each Issuer, the Issuer
Trustees on behalf of such Issuer will issue the Preferred Securities and the
Common Securities. The Preferred Securities of a particular Issuer will
represent preferred beneficial interests in the Issuer and the holders thereof
will be entitled to a preference in certain circumstances with respect to
Distributions and amounts payable on redemption or liquidation over the Common
Securities of such Issuer, as well as other benefits as described in the related
Trust Agreement. This summary of certain provisions of the Preferred Securities
and each Trust Agreement, which summarizes the material terms thereof, does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, all the provisions of each Trust Agreement, including the
definitions therein of certain terms, and the Trust Indenture Act, to which
reference is hereby made. Wherever particular defined terms of a Trust Agreement
(as amended or supplemented from time to time) are referred to herein or in a
Prospectus Supplement, such defined terms are incorporated herein or therein by
reference. The form of the Trust Agreement has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. Each of the
Issuers is a legally separate entity and the assets of one are not available to
satisfy the obligations of any of the others.
GENERAL
The Preferred Securities of an Issuer will rank pari passu, and payments
will be made thereon pro rata, with the Common Securities of that Issuer except
as described under "--Subordination of Common Securities". Legal title to the
Corresponding Junior Subordinated Debentures will be held by the Property
Trustee in trust for the benefit of the holders of the Related Preferred
Securities and Common Securities. Each Guarantee Agreement executed by the
Corporation for the benefit of the holders of an Issuer's Preferred Securities
(the "Guarantee" for such Preferred Securities) will be a guarantee on a
subordinated basis with respect to such Preferred Securities but will not
guarantee payment of Distributions or amounts payable on redemption or
liquidation of such Preferred Securities when such Issuer does not have funds on
hand available to make such payments. See "Description of Guarantees."
DISTRIBUTIONS
Distributions on the Preferred Securities will be cumulative, will
accumulate from the date of original issuance (unless otherwise specified in the
applicable Prospectus Supplement) and will be payable on such dates as specified
in the applicable Prospectus Supplement. In the event that any date on which
Distributions are payable on the Preferred Securities is not a Business Day (as
defined below), payment of the Distribution payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest or
other payment in respect to any such delay) except that, if such Business Day is
in the next succeeding calendar year, payment of such Distribution shall be made
on the immediately preceding Business Day, in either case with the same force
and effect as if made on such date (each date on which Distributions are payable
in accordance with the foregoing, a "Distribution Date"). A "Business Day" shall
mean any day other than a Saturday or a Sunday, or a day on which banking
institutions in The City of New York are authorized or required by law or
executive order to remain closed or a day on which the corporate trust office of
the Property Trustee or the Debenture Trustee is closed for business.
Each Issuer's Preferred Securities represent preferred beneficial
interests in the applicable Issuer, and the Distributions on each Preferred
Security will be payable at a rate specified in the applicable Prospectus
Supplement for such Preferred Securities. The amount of Distributions payable
-24-
<PAGE> 26
for any period will be computed on the basis of a 360-day year of twelve 30-day
months unless otherwise specified in the applicable Prospectus Supplement.
Distributions to which holders of Preferred Securities are entitled will
accumulate additional Distributions at the rate per annum if and as specified in
the applicable Prospectus Supplement. The term "Distributions" as used herein
includes any such additional Distributions unless otherwise stated.
If provided in the applicable Prospectus Supplement, the Corporation has
the right under the Indenture, pursuant to which it will issue the Corresponding
Junior Subordinated Debentures, to defer the payment of interest at any time or
from time to time on any series of the Corresponding Junior Subordinated
Debentures for up to such number of consecutive interest payment periods which
will be specified in such Prospectus Supplement relating to such series (each,
an "Extension Period"), provided that no Extension Period may extend beyond the
Stated Maturity of the Corresponding Junior Subordinated Debentures. As a
consequence of any such deferral, Distributions on the Related Preferred
Securities would be deferred (but would continue to accumulate additional
Distributions thereon at the rate per annum set forth in the Prospectus
Supplement for such Preferred Securities) by the Issuer of such Related
Preferred Securities during any such Extension Period. During any such Extension
Period, the Corporation may not (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 of or interest or premium, if any, on or repay, repurchase or
redeem any debt securities of the Corporation that rank pari passu in all
respects with or junior in interest to the Corresponding Junior Subordinated
Debentures (other than (a) repurchases, redemptions or other acquisitions of
shares of capital stock of the Corporation in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
one or more employees, officers, directors or consultants, in connection with a
dividend reinvestment or stockholder stock purchase plan or in connection with
the issuance of capital stock of the Corporation (or securities convertible into
or exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of any exchange or conversion of any class or series of the Corporation's
capital stock (or any capital stock of a subsidiary of the Corporation) for any
class or series of the Corporation's capital stock or of any class or series of
the Corporation's indebtedness for any class or series of the Corporation's
capital stock, (c) the purchase of fractional interests in shares of the
Corporation's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (d) any
declaration of a dividend in connection with any stockholder's rights plan, or
the issuance of rights, stock or other property under any stockholder's rights
plan, or the redemption or repurchase of rights pursuant thereto, or (e) any
dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with or junior to such stock).
The revenue of each Issuer available for distribution to holders of its
Related Preferred Securities will be limited to payments under the Corresponding
Junior Subordinated Debentures in which the Issuer will invest the proceeds from
the issuance and sale of its Trust Securities. See "Description of Junior
Subordinated Debentures--Corresponding Junior Subordinated Debentures." If the
Corporation does not make interest payments on such Corresponding Junior
Subordinated Debentures, the Property Trustee will not have funds available to
pay Distributions on the Related Preferred Securities. The payment of
Distributions (if and to the extent the Issuer has funds legally available for
the payment of such Distributions and cash sufficient to make such payments) is
guaranteed by the Corporation on a limited basis as set forth herein under
"Description of Guarantees".
Distributions on the Preferred Securities will be payable to the holders
thereof as they appear on the register of such Issuer on the relevant record
dates, which, as long as the Preferred Securities
-25-
<PAGE> 27
remain in book-entry form, will be one Business Day prior to the relevant
Distribution Date. Subject to any applicable laws and regulations and the
provisions of the applicable Trust Agreement, each such payment will be made as
described under "Book-Entry Issuance." In the event any Preferred Securities are
not in book-entry form, the relevant record date for such Preferred Securities
shall be the date at least 15 days prior to the relevant Distribution Date, as
specified in the applicable Prospectus Supplement.
REDEMPTION OR EXCHANGE
Mandatory Redemption. Upon the repayment or redemption, in whole or in
part, of any Corresponding Junior Subordinated Debentures, whether at maturity
or upon earlier redemption as provided in the Indenture, the proceeds from such
repayment or redemption shall be applied by the Property Trustee to redeem a
Like Amount (as defined below) of the Related Preferred Securities and the
Common Securities, upon not less than 30 nor more than 60 days notice, at a
redemption price (the "Redemption Price") equal to the aggregate Liquidation
Amount of such Trust Securities plus accumulated but unpaid Distributions
thereon to the date of redemption (the "Redemption Date") and the related amount
of the premium, if any, paid by the Corporation upon the concurrent redemption
of such Corresponding Junior Subordinated Debentures. See "Description of Junior
Subordinated Debentures--Redemption". If less than all of any series of
Corresponding Junior Subordinated Debentures are to be repaid or redeemed on a
Redemption Date, then the proceeds from such repayment or redemption shall be
allocated to the redemption pro rata of the Related Preferred Securities and the
Common Securities. The amount of premium, if any, paid by the Corporation upon
the redemption of all or any part of any series of any Corresponding Junior
Subordinated Debentures to be repaid or redeemed on a Redemption Date shall be
allocated to the redemption pro rata of the Related Preferred Securities and the
Common Securities.
The Corporation will have the right to redeem any series of Corresponding
Junior Subordinated Debentures (i) on or after such date as may be specified in
the applicable Prospectus Supplement, in whole at any time or in part from time
to time, (ii) at any time, in whole (but not in part), upon the occurrence of a
Tax Event or Capital Treatment Event or (iii) as may be otherwise specified in
the applicable Prospectus Supplement. The Corporation has committed to the
Federal Reserve that the Corporation will not exercise its right to redeem the
Junior Subordinated Debentures prior to the Stated Maturity without having
received the prior approval of the Federal Reserve to do so, if such approval is
then required under applicable Federal Reserve capital guidelines or policies.
Distribution of Corresponding Junior Subordinated Debentures. The
Corporation has the right at any time to terminate any Issuer and, after
satisfaction of the liabilities of creditors of such Issuer as provided by
applicable law, cause the Corresponding Junior Subordinated Debentures in
respect of the Related Preferred Securities and Common Securities issued by such
Issuer to be distributed to the holders of such Related Preferred Securities and
Common Securities in liquidation of the Issuer. The Corporation has committed to
the Federal Reserve that, so long as the Corporation (or any affiliate) is a
holder of Common Securities of an Issuer, the Corporation will not so terminate
such Issuer without having received the prior approval of the Federal Reserve to
do so, if such approval is then required under applicable Federal Reserve
capital guidelines or policies.
After the liquidation date fixed for any distribution of Corresponding
Junior Subordinated Debentures for any series of Related Preferred Securities
(i) such series of Related Preferred Securities will no longer be deemed to be
outstanding, (ii) the depositary or its nominee, as the record holder of such
series of Related Preferred Securities, will receive a registered global
certificate or certificates representing the Corresponding Junior Subordinated
Debentures to be delivered upon such distribution and (iii) any certificates
representing such series of Related Preferred Securities not held by DTC or its
-26-
<PAGE> 28
nominee will be deemed to represent the Corresponding Junior Subordinated
Debentures having a principal amount equal to the stated Liquidation Amount of
such series of Related Preferred Securities, and bearing accrued and unpaid
interest in an amount equal to the accrued and unpaid Distributions on such
series of Related Preferred Securities until such certificates are presented to
the Property Trustee or its agent for transfer or reissuance.
Any distribution of Corresponding Junior Subordinated Debentures to
holders of Related Preferred Securities shall be made to the applicable
recordholders thereof as they appear on the register for such Related Preferred
Securities on the relevant record date, which shall be one Business Day prior to
the liquidation date; provided, however, that in the event that any Related
Preferred Securities are not in book-entry form, the relevant record date shall
be a date at least 15 days prior to the liquidation date, as specified in the
applicable Prospectus Supplement.
There can be no assurance as to the market prices for the Related
Preferred Securities or the Corresponding Junior Subordinated Debentures that
may be distributed in exchange for Related Preferred Securities if a dissolution
and liquidation of an Issuer were to occur. Accordingly, the Related Preferred
Securities that an investor may purchase, or the Corresponding Junior
Subordinated Debentures that the investor may receive on dissolution and
liquidation of an Issuer, may trade at a discount to the price that the investor
paid to purchase the Related Preferred Securities offered hereby.
Tax Event or Capital Treatment Event Redemption. If a Tax Event or Capital
Treatment Event in respect of a series of Related Preferred Securities and
Common Securities shall occur and be continuing, the Corporation has the right
to redeem the Corresponding Junior Subordinated Debentures in whole (but not in
part) and thereby cause a mandatory redemption of such Related Preferred
Securities and Common Securities in whole (but not in part) at the Redemption
Price within 90 days following the occurrence of such Tax Event or Capital
Treatment Event. In the event a Tax Event or Capital Treatment Event in respect
of a series of Related Preferred Securities and Common Securities has occurred
and is continuing and the Corporation does not elect to redeem the Corresponding
Junior Subordinated Debentures and thereby cause a mandatory redemption of such
Related Preferred Securities or to liquidate the related Issuer and cause the
Corresponding Junior Subordinated Debentures to be distributed to holders of
such Related Preferred Securities and Common Securities in exchange therefor
upon liquidation of the Issuer as described above, such Related Preferred
Securities will remain outstanding and Additional Sums (as defined below) may be
payable on the Corresponding Junior Subordinated Debentures.
"Additional Sums" means the additional amounts as may be necessary in
order that the amount of Distributions then due and payable by an Issuer on the
outstanding Preferred Securities and Common Securities of the Issuer shall not
be reduced as a result of any additional taxes, duties and other governmental
charges to which such Issuer has become subject as a result of a Tax Event.
"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 rules or
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,
rules 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 Preferred Securities of an Issuer, there is more than an insubstantial
risk that the Corporation will not be entitled to treat an amount equal to the
aggregate Liquidation Amount of such Preferred Securities as "Tier 1 Capital"
(or the then equivalent thereof) for purposes of the capital adequacy guidelines
of the Federal Reserve, as then in effect and applicable to the Corporation.
-27-
<PAGE> 29
"Like Amount" means (i) with respect to a redemption of any series of
Trust Securities, Trust Securities of such series having a Liquidation Amount
(as defined below) equal to the principal amount of Corresponding Junior
Subordinated Debentures to be contemporaneously redeemed in accordance with the
Indenture, the proceeds of which will be used to pay the Redemption Price of
such Trust Securities, and (ii) with respect to a distribution of Corresponding
Junior Subordinated Debentures to holders of any series of Trust Securities in
connection with a dissolution or liquidation of the related Issuer,
Corresponding Junior Subordinated Debentures having a principal amount equal to
the Liquidation Amount of the Trust Securities in respect of which such
distribution is made.
"Liquidation Amount" means the stated amount per Trust Security of $1,000
(or such other stated amount as is set forth in the applicable Prospectus
Supplement).
"Tax Event" with respect to an Issuer of a series of Related Preferred
Securities means the receipt by such Issuer of an opinion of counsel experienced
in such matters to the effect that, as a result of any amendment to, or change
(including any announced proposed change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which pronouncement or
decision is announced on or after the date of issuance of such Related Preferred
Securities, there is more than an insubstantial risk that (i) such Issuer is, or
will be within 90 days of the date of such opinion, subject to United States
Federal income tax with respect to income received or accrued on the
Corresponding Junior Subordinated Debentures, (ii) interest payable by the
Corporation on such Corresponding Junior Subordinated Debentures is not, or
within 90 days of the date of such opinion, will not be, deductible by the
Corporation, in whole or in part, for United States Federal income tax purposes,
or (iii) such Issuer is, or will be within 90 days of the date of such opinion,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges.
Possible Tax Law Changes. On February 6, 1997, the revenue portion of
President Clinton's 1997 budget (the "Budget Proposal"), was released. If
enacted, the Budget Proposal would generally deny interest deductions for
interest on an instrument issued by a corporation that has a maximum term of
more than 15 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. The above described provision of the Budget Proposal
is proposed to be effective generally for instruments issued on or after the
date of first Congressional committee action. If a similar provision were to
apply to the Junior Subordinated Debentures, the Corporation would be unable to
deduct interest on the Junior Subordinated Debentures. Under current law, the
Corporation will be able to deduct interest on the Junior Subordinated
Debentures. There can be no assurance, however, that current or future
legislative proposals or final legislation will not affect the ability of the
Corporation to deduct interest on the Junior Subordinated Debentures. Such a
change could give rise to a Tax Event, which may permit the Corporation to cause
a redemption of the Preferred Securities, as described more fully under
"Description of Junior Subordinated Debentures--Redemptions".
REDEMPTION PROCEDURES
Related Preferred Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the applicable proceeds from the
contemporaneous redemption of the Corresponding Junior Subordinated Debentures.
Redemptions of the Preferred Securities shall be made and the Redemption Price
shall be payable on each Redemption Date only to the extent that the related
-28-
<PAGE> 30
Issuer has funds on hand available for the payment of such Redemption Price. See
also "--Subordination of Common Securities".
If the Property Trustee gives a notice of redemption in respect of
Preferred Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, to the extent funds are available, the Property Trustee will deposit
irrevocably with DTC funds sufficient to pay the applicable Redemption Price and
will give DTC irrevocable instructions and authority to pay the Redemption Price
to the holders of such Preferred Securities. See "Book-Entry Issuance". If such
Preferred Securities are no longer in book-entry form, the Property Trustee, to
the extent funds are available, will irrevocably deposit with the paying agent
for such Preferred Securities funds sufficient to pay the applicable Redemption
Price and will give such paying agent irrevocable instructions and authority to
pay the Redemption Price to the holders thereof upon surrender of their
certificates evidencing such Preferred Securities. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date for any
Preferred Securities called for redemption shall be payable to the holders of
such Preferred Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit, all rights of the
holders of such Preferred Securities so called for redemption will cease, except
the right of the holders of such Preferred Securities to receive the Redemption
Price and any Distribution payable in respect of the Preferred Securities on or
prior to the Redemption Date, but without interest on such Redemption Price, and
such Preferred Securities will cease to be outstanding. In the event that any
date fixed for redemption of Preferred Securities is not a Business Day, then
payment of the Redemption Price payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day falls
in the next calendar year, such payment will be made on the immediately
preceding Business Day, in each case, with the same force and effect as if made
on such date. In the event that payment of the Redemption Price in respect of
Preferred Securities called for redemption is improperly withheld or refused and
not paid either by the Issuer or by the Corporation pursuant to the Guarantee as
described under "Description of Guarantees", Distributions on such Preferred
Securities will continue to accrue at the then applicable rate from the
Redemption Date originally established by the Issuer for such Preferred
Securities to the date such Redemption Price is actually paid, in which case the
actual payment date will be the date fixed for redemption for purposes of
calculating the Redemption Price.
Subject to applicable law (including, without limitation, United States
Federal securities law), the Corporation or its subsidiaries may at any time and
from time to time purchase outstanding Preferred Securities by tender, in the
open market or by private agreement.
Payment of the Redemption Price on the Related Preferred Securities shall
be made to the applicable recordholders thereof as they appear on the register
for such Related Preferred Securities on the relevant record date, which shall
be one Business Day prior to the Redemption Date; provided, however, that in the
event that any Preferred Securities are not in book-entry form, the relevant
record date shall be a date at least 15 days prior to the Redemption Date, as
specified in the applicable Prospectus Supplement.
If less than all of the Preferred Securities and Common Securities issued
by an Issuer are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of such Preferred Securities and Common Securities to be
redeemed shall be allocated pro rata to the Preferred Securities and the Common
Securities based upon the relative Liquidation Amounts of such classes. The
particular Preferred Securities to be redeemed shall be selected on a pro rata
basis not more than 60 days prior to the Redemption Date by the Property Trustee
from the outstanding Preferred Securities not previously called for redemption,
by such method as the Property Trustee shall deem fair and appropriate and which
may provide for the selection for redemption of portions (equal to $1,000 or
-29-
<PAGE> 31
an integral multiple of $1,000 in excess thereof, unless a different amount is
specified in the applicable Prospectus Supplement) of the Liquidation Amount of
Preferred Securities of a denomination larger than $1,000 (or such other
denomination as is specified in the applicable Prospectus Supplement). The
Property Trustee shall promptly notify the Securities registrar in writing of
the Preferred Securities selected for redemption and, in the case of any
Preferred Securities selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For all purposes of each Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption of
Preferred Securities shall relate, in the case of any Preferred Securities
redeemed or to be redeemed only in part, to the portion of the aggregate
Liquidation Amount of Preferred Securities which has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each holder of Trust Securities to be
redeemed at its registered address. Unless the Corporation defaults in payment
of the Redemption Price on the Corresponding Junior Subordinated Debentures, on
and after the Redemption Date interest will cease to accrue on such
Corresponding Junior Subordinated Debentures or portions thereof (and
Distributions will cease to accrue on the Related Preferred Securities or
portions thereof) called for redemption.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, each Issuer's
Preferred Securities and Common Securities, as applicable, shall be made pro
rata based on the liquidation amount of such Preferred Securities and Common
Securities; provided, however, that if on any Distribution Date, Redemption Date
or liquidation date a Debenture Event of Default shall have occurred and be
continuing as a result of any failure by the Corporation to pay any amounts in
respect of the Junior Subordinated Debentures when due, no payment of any
Distribution on, or Redemption Price of, or Liquidation Distribution in respect
of, any of the Issuer's Common Securities, and no other payment on account of
the redemption, liquidation or other acquisition of such Common Securities,
shall be made unless payment in full in cash of all accumulated and unpaid
Distributions on all of the Issuer's outstanding Preferred Securities for all
Distribution periods terminating on or prior thereto, or in the case of payment
of the Redemption Price the full amount of such Redemption Price on all of the
Issuer's outstanding Preferred Securities then called for redemption, or in the
case of payment of the Liquidation Distribution the full amount of such
Liquidation Distribution on all Outstanding Preferred Securities, shall have
been made or provided for, and all funds available to the Property Trustee shall
first be applied to the payment in full in cash of all Distributions on, or
Redemption Price of, the Issuer's Preferred Securities then due and payable.
In the case of any event of default under the applicable Trust Agreement
resulting from a Debenture Event of Default, the Corporation as holder of such
Issuer's Common Securities will be deemed to have waived any right to act with
respect to any such Event of Default under the applicable Trust Agreement until
the effect of all such Events of Default with respect to such Preferred
Securities have been cured, waived or otherwise eliminated. Until any such
Events of Default under the applicable Trust Agreement with respect to the
Preferred Securities have been so cured, waived or otherwise eliminated, the
Property Trustee shall act solely on behalf of the holders of such Preferred
Securities and not on behalf of the Corporation as holder of the Issuer's Common
Securities, and only the holders of such Preferred Securities will have the
right to direct the Property Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON TERMINATION
Pursuant to each Trust Agreement, each Issuer shall automatically
terminate upon expiration of its term and shall terminate on the first to occur
of: (i) certain events of bankruptcy, dissolution or liquidation of the
Corporation; (ii) the distribution of a Like Amount of the Corresponding Junior
-30-
<PAGE> 32
Subordinated Debentures to the holders of its Trust Securities, if the
Corporation, as Depositor, has given written direction to the Property Trustee
to terminate such Issuer; (iii) redemption of all of the Issuer's Preferred
Securities as described under "--Redemption or Exchange"; and (iv) the entry of
an order for the dissolution of the Issuer by a court of competent jurisdiction.
If an early termination occurs as described in clause (i), (ii) or (iv)
above, the Issuer shall be liquidated by the Issuer Trustees as expeditiously as
the Issuer Trustees determine to be possible by distributing, after satisfaction
of liabilities to creditors of such Issuer as provided by applicable law, to the
holders of such Trust Securities in exchange therefor a Like Amount of the
Corresponding Junior Subordinated Debentures, unless such distribution is
determined by the Administrative Trustees not to be practical, in which event
such holders will be entitled to receive out of the assets of the Issuer
available for distribution to holders, after satisfaction of liabilities to
creditors of such Issuer as provided by applicable law, an amount equal to, in
the case of holders of Preferred Securities, the aggregate of the Liquidation
Amount plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"). If such Liquidation
Distribution can be paid only in part because such Issuer has insufficient
assets available to pay in full the aggregate Liquidation Distribution, then the
amounts payable directly by such Issuer on its Preferred Securities shall be
paid on a pro rata basis. The holder(s) of such Issuer's Common Securities will
be entitled to receive distributions upon any such liquidation pro rata with the
holders of its Preferred Securities, except that if a Debenture Event of Default
has occurred and is continuing as a result of any failure by the Corporation to
pay any amounts in respect of the Junior Subordinated Debentures when due, the
Preferred Securities shall have a priority over the Common Securities.
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under
each Trust Agreement with respect to the Preferred Securities issued thereunder
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the occurrence of a Debenture Event of Default under the Indenture
(see "Description of Junior Subordinated Debentures--Debenture Events of
Default"); or
(ii) default by the Issuer 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 Issuer in the payment of any Redemption Price of any
Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Issuer Trustees in such Trust Agreement (other
than a covenant or warranty a default in the performance of which or the breach
of which is dealt with in clause (ii) or (iii) above), and continuation of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the defaulting Issuer Trustee or Trustees by
the holders of at least 25% in aggregate Liquidation Amount of the outstanding
Preferred Securities of the applicable Issuer, a written notice specifying such
default or breach and requiring it to be remedied and stating that such notice
is a "Notice of Default" under such Trust Agreement; or
-31-
<PAGE> 33
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by the Corporation to appoint a
successor Property Trustee within 90 days thereof.
Within 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 such Issuer's Preferred
Securities, the Administrative Trustees and the Corporation, as Depositor,
unless such Event of Default shall have been cured or waived. The Corporation,
as Depositor, and the Administrative Trustees are required to file annually with
the Property Trustee a certificate as to whether or not they are in compliance
with all the conditions and covenants applicable to them under each Trust
Agreement.
If a Debenture Event of Default has occurred and is continuing, the
Preferred Securities shall have a preference over the Common Securities as
described above. See "--Liquidation Distribution Upon Termination." The
existence of an Event of Default does not entitle the holders of Preferred
Securities to accelerate the maturity thereof.
REMOVAL OF ISSUER TRUSTEES
Unless a Debenture Event of Default shall have occurred and be continuing,
any Issuer Trustee may be removed at any time by the holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed at such time by the
holders of a majority in Liquidation Amount of the outstanding Preferred
Securities. In no event will the holders of the Preferred Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in the Corporation as the holder of the
Common Securities. No resignation or removal of an Issuer Trustee and no
appointment of a successor trustee shall be effective until the acceptance of
appointment by the successor trustee in accordance with the provisions of the
applicable Trust Agreement.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default shall have occurred and be continuing, at any
time or from time to time, for the purpose of meeting the legal requirements of
the Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Corporation, as the holder of the
Common Securities, and the Administrative Trustees shall have power to appoint
one or more persons either to act as a co-trustee, jointly with the Property
Trustee, of all or any part of such Trust Property, or to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such person or persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of the applicable Trust Agreement. In case a Debenture
Event of Default has occurred and is continuing, the Property Trustee alone
shall have power to make such appointment.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any person resulting from any merger,
conversion or consolidation to which such Trustee shall be a party, or any
person succeeding to all or substantially all the corporate trust business of
such Trustee, shall be the successor of such Trustee under each Trust Agreement,
provided such person shall be otherwise qualified and eligible.
-32-
<PAGE> 34
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE ISSUERS
An Issuer may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other person, except as
described below. An Issuer may, at the request of the Corporation, with the
consent of the Administrative Trustees and without the consent of the holders of
the Preferred Securities, merge with or into, consolidate, amalgamate, or be
replaced by or convey, transfer or lease its properties and assets substantially
as an entirety to a trust organized as such under the laws of any State;
provided, that (i) such successor entity either (a) expressly assumes all of the
obligations of such Issuer with respect to the Preferred Securities or (b)
substitutes for the Preferred Securities other securities having substantially
the same terms as the Preferred Securities (the "Successor Securities") so long
as the Successor Securities rank the same as the Preferred Securities in
priority with respect to distributions and payments upon liquidation, redemption
and otherwise, (ii) the Corporation expressly appoints a trustee of such
successor entity possessing the same powers and duties as the Property Trustee
as the holder of the Corresponding Junior Subordinated Debentures, (iii) the
Successor Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or other
organization on which the Preferred Securities are then listed, if any, (iv)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not cause the Preferred Securities to be downgraded by any nationally
recognized statistical rating organization which assigns ratings to the
Preferred Securities, (v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Preferred Securities (including any
Successor Securities) in any material respect, (vi) such successor entity has a
purpose identical to that of the Issuer, (vii) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, the
Corporation has received an opinion from independent counsel to the Issuer
experienced in such matters to the effect that (a) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of the Preferred
Securities (including any Successor Securities) in any material respect, and (b)
following such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease, neither the Issuer nor such successor entity will be required
to register as an investment company under the Investment Company Act of 1940,
as amended (the "Investment Company Act"), and (viii) the Corporation or any
permitted successor or assignee owns all of the Common Securities of such
successor entity and guarantees the obligations of such successor entity under
the Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, an Issuer shall not, except with the consent of
holders of 100% in Liquidation Amount of the Preferred Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or lease
its properties and assets substantially as an entirety to any other entity or
permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger, replacement, conveyance,
transfer or lease would cause the Issuer or the successor entity to be
classified as an association taxable as a corporation or as other than a grantor
trust for United States Federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF EACH TRUST AGREEMENT
Except as provided below and under "Description of Guarantees--Amendments
and Assignment" and as otherwise required by law and the applicable Trust
Agreement, the holders of the Preferred Securities will have no voting rights.
Each Trust Agreement may be amended from time to time by the Corporation,
the Property Trustee and the Administrative Trustees, without the consent of the
holders of the Preferred Securities (i) to cure any ambiguity, correct or
supplement any provisions in such Trust Agreement that may be
-33-
<PAGE> 35
inconsistent with any other provision, or to make any other provisions with
respect to matters or questions arising under such Trust Agreement, which shall
not be inconsistent with the other provisions of such Trust Agreement, or (ii)
to modify, eliminate or add to any provisions of such Trust Agreement to such
extent as shall be necessary to ensure that the Issuer will be classified for
United States Federal income tax purposes as a grantor trust or as other than an
association taxable as a corporation at all times that any Trust Securities are
outstanding or to ensure that the Issuer will not be required to register as an
"investment company" under the Investment Company Act; provided, however, that
in the case of either clause (i) or clause (ii), such action shall not adversely
affect in any material respect the interests of any holder of Preferred
Securities, and any amendments of such Trust Agreement shall become effective
when notice thereof is given to the holders of Trust Securities. Each Trust
Agreement may be amended by the Issuer Trustees and the Corporation with (i) the
consent of holders representing not less than a majority (based upon Liquidation
Amounts) of the outstanding Trust Securities, and (ii) receipt by the Issuer
Trustees of an opinion of counsel to the effect that such amendment or the
exercise of any power granted to the Issuer Trustees in accordance with such
amendment will not cause the Issuer to be taxable as a corporation or affect the
Issuer's status as a grantor trust for United States Federal income tax purposes
or the Issuer's exemption from status as an "investment company" under the
Investment Company Act, provided that without the consent of each holder of
Trust Securities, such Trust Agreement may not be amended to (i) change the
amount or timing of any Distribution on the Trust Securities or otherwise
adversely affect the amount of any Distribution required to be made in respect
of the Trust Securities as of a specified date or (ii) restrict the right of a
holder of Trust Securities to institute suit for the enforcement of any such
payment on or after such date.
So long as any Corresponding Junior Subordinated Debentures are held by
the Property Trustee, the Issuer Trustees shall not (i) direct the time, method
and place of conducting any proceeding for any remedy available to the Debenture
Trustee, or executing any trust or power conferred on the Property Trustee with
respect to such Corresponding Junior Subordinated Debentures, (ii) waive any
past default that is waivable under the Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Junior Subordinated
Debentures shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or such Corresponding Junior
Subordinated Debentures, where such consent shall be required, without, in each
case, obtaining the prior approval of the holders of a majority in aggregate
Liquidation Amount of all outstanding Preferred Securities; provided, however,
that where a consent under the Indenture would require the consent of each
holder of Corresponding Junior Subordinated Debentures affected thereby, no such
consent shall be given by the Property Trustee without the prior consent of each
holder of the corresponding Preferred Securities. The Issuer Trustees shall not
revoke any action previously authorized or approved by a vote of the holders of
the Preferred Securities except by subsequent vote of the holders of the
Preferred Securities. The Property Trustee shall notify each holder of Preferred
Securities of any notice of default with respect to the Corresponding Junior
Subordinated Debentures. In addition to obtaining the foregoing approvals of the
holders of the Preferred Securities, prior to taking any of the foregoing
actions, the Issuer Trustees shall obtain an opinion of counsel experienced in
such matters to the effect that the Issuer will not be classified as an
association taxable as a corporation for United States Federal income tax
purposes on account of such action and such action would not cause the Issuer to
be classified as other than a grantor trust for United States Federal income tax
purposes.
Any required approval of holders of Preferred Securities may be given at a
meeting of holders of Preferred Securities convened for such purpose or pursuant
to written consent. The Administrative Trustees, or at the written request of
the Administrative Trustees the Property Trustee will cause a notice of any
meeting at which holders of Preferred Securities are entitled to vote, or of any
matter
-34-
<PAGE> 36
upon which action by written consent of such holders is to be taken, to be given
to each holder of record of Preferred Securities in the manner set forth in each
Trust Agreement.
No vote or consent of the holders of Preferred Securities will be required
for an Issuer to redeem and cancel its Preferred Securities in accordance with
the applicable Trust Agreement.
Notwithstanding that holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by the Corporation, the Issuer Trustees or any
affiliate of the Corporation or any Issuer Trustees, shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
GLOBAL PREFERRED SECURITIES
The Preferred Securities of a series may be issued in whole or in part in
the form of one or more Global Preferred Securities that will be deposited with,
or on behalf of, the Depositary identified in the Prospectus Supplement relating
to such series. Unless otherwise indicated in the applicable Prospectus
Supplement, the Depositary will be DTC. Global Preferred Securities may be
issued only in fully registered form and in either temporary or permanent form.
Unless and until it is exchanged in whole or in part for the individual
Preferred Securities represented thereby, a Global Preferred Security may not be
transferred except as a whole by the Depositary for such Global Preferred
Security to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by the Depositary or
any nominee to a successor Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of Preferred Securities will be described in the Prospectus Supplement relating
to such series. The Corporation anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Preferred Security, and the deposit of such
Global Preferred Security with or on behalf of the Depositary, the Depositary
for such Global Preferred Security or its nominee will credit, on its book-entry
registration and transfer system, the respective aggregate Liquidation Amounts
of the individual Preferred Securities represented by such Global Preferred
Securities to the accounts of Participants. Such accounts shall be designated by
the dealers, underwriters or agents with respect to such Preferred Securities or
by the Corporation if such Preferred Securities are offered and sold directly by
the Corporation. Ownership of beneficial interests in a Global Preferred
Security will be limited to Participants or persons that may hold interests
through Participants. Ownership of beneficial interests in such Global Preferred
Security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the applicable Depositary or its nominee
(with respect to interests of Participants) and the records of Participants
(with respect to interests of persons who hold through Participants). The laws
of some states require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Preferred
Security.
So long as the Depositary for a Global Preferred Security, or its nominee,
is the registered owner of such Global Preferred Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder of
the Preferred Securities represented by such Global Preferred Security for all
purposes under the related Trust Agreement. Except as provided below, owners of
beneficial interests in a Global Preferred Security will not be entitled to have
any of the individual Preferred Securities of the series represented by such
Global Preferred Security registered in their names, will not receive or be
entitled to receive physical delivery of any such Preferred Securities of
-35-
<PAGE> 37
such series in definitive form and will not be considered the owners or holders
thereof under the related Trust Agreement.
Payments of principal of (and premium, if any) and interest on individual
Preferred Securities represented by a Global Preferred Security registered in
the name of a Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner of the Global Preferred
Security representing such Preferred Securities. None of the Corporation, the
Property Trustee, any Paying Agent, or the Securities Registrar for such
Preferred Securities will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests of the Global Preferred Security representing such Preferred
Securities or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
The Corporation expects that the Depositary for a series of Preferred
Securities or its nominee, upon receipt of any payment of Liquidation Amount,
premium or Distributions, including any payment of Redemption Price, in respect
of a Global Preferred Security representing any of such Preferred Securities
immediately will credit Participants' accounts with payments in amounts
proportionate to their respective beneficial interest in the aggregate
Liquidation Amount of such Global Preferred Security for such Preferred
Securities as shown on the records of such Depositary or its nominee. The
Corporation also expects that payments by Participants to owners of beneficial
interests in such Global Preferred Security held through such Participants will
be governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name." Such payments will be the responsibility of such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Depositary for a series of Preferred Securities is at any time unwilling, unable
or ineligible to continue as depositary and a successor depositary is not
appointed by the Issuer within 90 days, or if there shall have occurred and be
continuing a Debenture Event of Default under the Indenture with respect to the
Corresponding Junior Subordinated Debentures, the Issuer will issue individual
Preferred Securities of such series in exchange for the Global Preferred
Security representing such series of Preferred Securities. In addition, the
Issuer may at any time and in its sole discretion, subject to any limitations
described in the Prospectus Supplement relating to such Preferred Securities,
determine not to have any Preferred Securities of such series represented by one
or more Global Preferred Securities and, in such event, will issue individual
Preferred Securities of such series in exchange for the Global Preferred
Security representing such series of Preferred Securities. Further, if the
Issuer so specifies with respect to the Preferred Securities of a series, an
owner of a beneficial interest in a Global Preferred Security representing
Preferred Securities of such series may, on terms acceptable to the Issuer, the
Property Trustee and the Depositary for such Global Preferred Security, receive
individual Preferred Securities of such series in exchange for such beneficial
interests, subject to any limitations described in the Prospectus Supplement
relating to such Preferred Securities. In any such instance, an owner of a
beneficial interest in a Global Preferred Security will be entitled to physical
delivery of individual Preferred Securities of the series represented by such
Global Preferred Security equal in principal amount to such beneficial interest
and to have such Preferred Securities registered in its name. Individual
Preferred Securities of such series so issued will be issued in denominations,
unless otherwise specified by the Issuer, and integral multiples thereof that
are the same as the denominations and multiples in which the Preferred
Securities are issued.
PAYMENT AND PAYING AGENCY
Payments in respect of the Preferred Securities shall be made to the
Depositary, which shall credit the relevant accounts at the Depositary on the
applicable Distribution Dates or, if any Issuer's Preferred Securities are not
held by the Depositary, such payments shall be made by check mailed to
-36-
<PAGE> 38
the address of the holder entitled thereto as such address shall appear on the
Register. Unless otherwise specified in the applicable Prospectus Supplement,
the paying agent (the "Paying Agent") shall initially be the Property Trustee
and any co-paying agent chosen by the Property Trustee and acceptable to the
Administrative Trustees and the Corporation. The Paying Agent shall be permitted
to resign as Paying Agent upon 30 days' written notice to the Property Trustee
and the Corporation. In the event that the Property Trustee shall no longer be
the Paying Agent, the Administrative Trustees shall appoint a successor (which
shall be a bank or trust company acceptable to the Administrative Trustees and
the Corporation) to act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
Unless otherwise specified in the applicable Prospectus Supplement, the
Property Trustee will act as registrar and transfer agent for the Preferred
Securities.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of each Issuer, but upon payment of any tax or other
governmental charges that may be imposed in connection with any transfer or
exchange. The Issuers will not be required to register or cause to be registered
the transfer of their Preferred Securities after such Preferred Securities have
been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of
an Event of Default, undertakes to perform only such duties as are specifically
set forth in each Trust Agreement and, after such Event of Default, must
exercise the same degree of care and skill as a prudent person would exercise or
use in the conduct of his or her own affairs. Subject to this provision, the
Property Trustee is under no obligation to exercise any of the powers vested in
it by the applicable Trust Agreement at the request of any holder of Preferred
Securities unless it is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred thereby. If no Event of Default has
occurred and is continuing and the Property Trustee is required to decide
between alternative causes of action, construe ambiguous provisions in the
applicable Trust Agreement or is unsure of the application of any provision of
the applicable Trust Agreement, and the matter is not one on which holders of
Preferred Securities are entitled under such Trust Agreement to vote, then the
Property Trustee shall take such action as is directed by the Corporation and if
not so directed, shall take such action as it deems advisable and in the best
interests of the holders of the Trust Securities and will have no liability
except for its own bad faith, negligence or willful misconduct.
MISCELLANEOUS
The Issuer Trustees are authorized and directed to conduct the affairs of
and to operate the Issuers in such a way that no Issuer will be deemed to be an
"investment company" required to be registered under the Investment Company Act
or classified as an association taxable as a corporation or as other than a
grantor trust for United States Federal income tax purposes and so that the
Corresponding Junior Subordinated Debentures will be treated as indebtedness of
the Corporation for United States Federal income tax purposes. In this
connection, the Corporation and the Issuer Trustees are authorized to take any
action, not inconsistent with applicable law, the certificate of trust of each
Issuer or each Trust Agreement, that the Corporation and the Issuer Trustees
determine in their discretion to be necessary or desirable for such purposes, as
long as such action does not materially adversely affect the interests of the
holders of the related Preferred Securities.
Holders of the Preferred Securities have no preemptive or similar rights.
-37-
<PAGE> 39
No Issuer may borrow money or issue debt or mortgage or pledge any of its
assets.
BOOK-ENTRY ISSUANCE
DTC will act as securities depositary for all of the Preferred Securities
and the Junior Subordinated Debentures, unless otherwise referred to in the
Prospectus Supplement relating to an offering of Preferred Securities or Junior
Subordinated Debentures. The Preferred Securities and the Junior Subordinated
Debentures will be issued only as fully-registered securities registered in the
name of Cede & Co. (DTC's nominee). One or more fully-registered global
certificates will be issued for the Preferred Securities of each Issuer and the
Junior Subordinated Debentures, representing in the aggregate the total number
of such Issuer's Preferred Securities or aggregate principal balance of Junior
Subordinated Debentures, respectively, and will be deposited with DTC.
DTC is a limited purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its Participants deposit with DTC. DTC also facilitates
the settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. "Direct Participants" include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations. DTC is owned by a number of its Direct Participants and by
the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain custodial relationships with Direct
Participants, either directly or indirectly ("Indirect Participants"). The rules
applicable to DTC and its Participants are on file with the Commission.
Purchases of Preferred Securities or Junior Subordinated Debentures within
the DTC system must be made by or through Direct Participants, which will
receive a credit for the Preferred Securities or Junior Subordinated Debentures
on DTC's records. The ownership interest of each actual purchaser of each
Preferred Security and each Junior Subordinated Debenture ("Beneficial Owner")
is in turn to be recorded on the Direct and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from DTC of their
purchases, but Beneficial Owners are expected to receive written confirmations
providing details of the transactions, as well as periodic statements of their
holdings, from the Direct or Indirect Participants through which the Beneficial
Owners purchased Preferred Securities or Junior Subordinated Debentures.
Transfers of ownership interests in the Preferred Securities or Junior
Subordinated Debentures are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not
receive certificates representing their ownership interests in Preferred
Securities or Junior Subordinated Debentures, except in the event that use of
the book-entry system for the Preferred Securities of such Issuer or Junior
Subordinated Debentures is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities or Junior Subordinated Debentures; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Preferred Securities
or Junior Subordinated Debentures are credited, which may or may not be the
Beneficial Owners. The Participants will remain responsible for keeping account
of their holdings on behalf of their customers.
-38-
<PAGE> 40
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners and the voting
rights of Direct Participants, Indirect Participants and Beneficial Owners will
be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices will be sent to Cede & Co. as the registered holder of
the Preferred Securities or Junior Subordinated Debentures. If less than all of
an Issuer's Preferred Securities or the Junior Subordinated Debentures are being
redeemed, DTC's current practice is to determine by lot the amount of the
interest of each Direct Participant to be redeemed.
Although voting with respect to the Preferred Securities or the Junior
Subordinated Debentures is limited to the holders of record of the Preferred
Securities or Junior Subordinated Debentures, in those instances in which a vote
is required, neither DTC nor Cede & Co. will itself consent or vote with respect
to Preferred Securities or Junior Subordinated Debentures. Under its usual
procedures, DTC would mail an omnibus proxy (the "Omnibus Proxy") to the
relevant Trustee as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants to
whose accounts such Preferred Securities or Junior Subordinated Debentures are
credited on the record date (identified in a listing attached to the Omnibus
Proxy).
Distribution payments on the Preferred Securities or the Junior
Subordinated Debentures will be made by the relevant Trustee to DTC. DTC's
practice is to credit Direct Participants' accounts on the relevant payment date
in accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payments on such payment date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices and will be the responsibility of such
Participant and not of DTC, the relevant Trustee, the Issuer thereof or the
Corporation, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of Distributions to DTC is the responsibility
of the relevant Trustee, disbursement of such payments to Direct Participants is
the responsibility of DTC, and disbursements of such payments to the Beneficial
Owners is the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depositary with
respect to any of the Preferred Securities or the Junior Subordinated Debentures
at any time by giving reasonable notice to the relevant Trustee and the
Corporation. In the event that a successor securities depositary is not
obtained, definitive Preferred Security or Junior Subordinated Debenture
certificates representing such Preferred Securities or Junior Subordinated
Debentures are required to be printed and delivered. The Corporation, at its
option, may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor depositary). After a Debenture Event of Default, the
holders of a majority in liquidation preference of Preferred Securities or
aggregate principal amount of Junior Subordinated Debentures may determine to
discontinue the system of book-entry transfers through DTC. In any such event,
definitive certificates for such Preferred Securities or Junior Subordinated
Debentures will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Issuers and the Corporation believe to
be accurate, but the Issuers and the Corporation assume no responsibility for
the accuracy thereof. Neither the Issuers nor the Corporation has any
responsibility for the performance by DTC or its Participants of their
respective obligations as described herein or under the rules and procedures
governing their respective operations.
-39-
<PAGE> 41
DESCRIPTION OF GUARANTEES
A Guarantee will be executed and delivered by the Corporation concurrently
with the issuance by each Issuer of its Preferred Securities for the benefit of
the holders from time to time of such Preferred Securities. Wilmington Trust
Company will act as indenture trustee ("Guarantee Trustee") under each Guarantee
for the purposes of compliance with the Trust Indenture Act and each Guarantee
will be qualified as an indenture under the Trust Indenture Act. This summary of
certain provisions of the Guarantees, which summarizes the material terms
thereof, does not purport to be complete and is subject to, and qualified in its
entirety by reference to, all of the provisions of each Guarantee, including the
definitions therein of certain terms, and the Trust Indenture Act, to each of
which reference is hereby made. The form of the Guarantee has been filed as an
exhibit to the Registration Statement of which this Prospectus forms a part.
Reference in this summary to Preferred Securities means that Issuer's Preferred
Securities to which a Guarantee relates. The Guarantee Trustee will hold each
Guarantee for the benefit of the holders of the related Issuer's Preferred
Securities.
GENERAL
The Corporation will irrevocably agree to pay in full on a subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined below)
to the holders of the Preferred Securities, as and when due, regardless of any
defense, right of set-off or counterclaim that such Issuer may have or assert
other than the defense of payment. The following payments with respect to the
Preferred Securities, to the extent not paid by or on behalf of the related
Issuer (the "Guarantee Payments"), will be subject to the Guarantee: (i) any
accumulated and unpaid Distributions required to be paid on such Preferred
Securities, to the extent that such Issuer has funds on hand available therefor
at such time, (ii) the Redemption Price with respect to any Preferred Securities
called for redemption, to the extent that such Issuer has funds on hand
available therefor at such time, or (iii) upon a voluntary or involuntary
dissolution, winding up or liquidation of such Issuer (unless the Corresponding
Junior Subordinated Debentures are distributed to holders of such Preferred
Securities in exchange therefor), the lesser of (a) the Liquidation Distribution
and (b) the amount of assets of such Issuer remaining available for distribution
to holders of Preferred Securities after satisfaction of liabilities to
creditors of such Issuer as required by applicable law. The Corporation's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Corporation to the holders of the applicable Preferred
Securities or by causing the Issuer to pay such amounts to such holders.
Each Guarantee will be an irrevocable guarantee on a subordinated basis of
the related Issuer's obligations under the Preferred Securities, but will apply
only to the extent that such related Issuer has funds sufficient to make such
payments, and is not a guarantee of collection.
If the Corporation does not make interest payments on the Corresponding
Junior Subordinated Debentures held by the Issuer, the Issuer will not be able
to pay Distributions on the Related Preferred Securities and will not have funds
legally available therefor. Each Guarantee will rank subordinate and junior in
right of payment to all Senior Debt of the Corporation. See "--Status of the
Guarantees". Because the Corporation is a holding company, the right of the
Corporation to participate in any distribution of assets of any subsidiary upon
such subsidiary's liquidation or reorganization or otherwise, is subject to the
prior claims of creditors of that subsidiary, except to the extent the
Corporation may itself be recognized as a creditor of that subsidiary.
Accordingly, the Corporation's obligations under the Guarantees will be
effectively subordinated to all existing and future liabilities of the
Corporation's subsidiaries, and claimants should look only to the assets of the
Corporation for payments thereunder. See "The Corporation." Except as otherwise
provided in the applicable Prospectus Supplement, the Guarantees do not limit
the incurrence or issuance of other secured or unsecured debt of the
Corporation, including Senior Debt, whether under the Indenture, any other
-40-
<PAGE> 42
existing indenture or any other indenture that the Corporation may enter into in
the future or otherwise. See the applicable Prospectus Supplement relating to
any offering of Preferred Securities.
The Corporation has, through the applicable Guarantee, the applicable
Trust Agreement, the applicable series of Corresponding Junior Subordinated
Debentures, the Indenture and the applicable Expense Agreement, taken together,
fully, irrevocably and unconditionally guaranteed all of the Issuer's
obligations under the Related Preferred Securities. No single document standing
alone or operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these documents
that has the effect of providing a full, irrevocable and unconditional guarantee
of the Issuer's obligations under the Related Preferred Securities. See
"Relationship Among the Preferred Securities, the Corresponding Junior
Subordinated Debentures, the Expense Agreements and the Guarantees."
STATUS OF THE GUARANTEES
Each Guarantee will constitute an unsecured obligation of the Corporation
and will rank subordinate and junior in right of payment to all Senior Debt of
the Corporation in the same manner as Junior Subordinated Debentures.
Each Guarantee will rank pari passu with all other Guarantees issued by
the Corporation. Each Guarantee will constitute a guarantee of payment and not
of collection (i.e., the guaranteed party may institute a legal proceeding
directly against the Corporation to enforce its rights under the Guarantee
without first instituting a legal proceeding against any other person or
entity). Each Guarantee will be held for the benefit of the holders of the
Related Preferred Securities. Each Guarantee will not be discharged except by
payment of the Guarantee Payments in full to the extent not paid by the Issuer
or upon distribution to the holders of the Preferred Securities of the
Corresponding Junior Subordinated Debentures. None of the Guarantees places a
limitation on the amount of additional Senior Debt that may be incurred by the
Corporation. The Corporation expects from time to time to incur additional
indebtedness constituting Senior Debt.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely
affect the rights of holders of the related Preferred Securities (in which case
no vote will be required), no Guarantee may be amended without the prior
approval of the holders of not less than a majority of the aggregate Liquidation
Amount of such outstanding Preferred Securities. The manner of obtaining any
such approval will be as set forth under "Description of Preferred
Securities--Voting Rights; Amendment of Each Trust Agreement." All guarantees
and agreements contained in each Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Corporation and shall inure to
the benefit of the holders of the related Preferred Securities then outstanding.
EVENTS OF DEFAULT
An event of default under each Guarantee will occur upon the failure of
the Corporation to perform any of its payment obligations thereunder or to
perform any non-payment obligations if such non-payment default remains
unremedied for 30 days. The holders of not less than a majority in aggregate
Liquidation Amount of the related Preferred Securities have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Guarantee Trustee in respect of such Guarantee or to direct the exercise
of any trust or power conferred upon the Guarantee Trustee under such Guarantee.
-41-
<PAGE> 43
Any holder of the Preferred Securities may, to the extent permissible
under applicable law, institute a legal proceeding directly against the
Corporation to enforce its rights under such Guarantee without first instituting
a legal proceeding against the Issuer, the Guarantee Trustee or any other person
or entity.
The Corporation, as guarantor, is required to file annually with the
Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Corporation in performance of any Guarantee, undertakes to
perform only such duties as are specifically set forth in each Guarantee and,
after default with respect to any Guarantee, must exercise the same degree of
care and skill as a prudent person would exercise or use in the conduct of his
or her own affairs. Subject to this provision, the Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by any Guarantee at the
request of any holder of any Preferred Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby.
TERMINATION OF THE GUARANTEES
Each Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the related Preferred Securities, upon
full payment of the amounts payable upon liquidation of the related Issuer or
upon distribution of Corresponding Junior Subordinated Debentures to the holders
of the Related Preferred Securities in exchange therefor. Each Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any holder of the related Preferred Securities must restore payment of any
sums paid under such Preferred Securities or such Guarantee.
GOVERNING LAW
Each Guarantee will be governed by and construed in accordance with the
laws of the State of New York.
THE EXPENSE AGREEMENT
Pursuant to the Expense Agreement entered into by the Corporation under
each Trust Agreement (the "Expense Agreement"), the Corporation will irrevocably
and unconditionally guarantee to each Person or entity to whom the Issuer
becomes indebted or liable, the full payment of any costs, expenses or
liabilities of the Issuer, other than obligations of the Issuer to pay to the
holders of any Preferred Securities or other similar interests in the Issuer of
the amounts due such holders pursuant to the terms of the Preferred Securities
or such other similar interests, as the case may be. The Expense Agreement will
be enforceable by third parties.
-42-
<PAGE> 44
RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE CORRESPONDING
JUNIOR SUBORDINATED DEBENTURES, THE EXPENSE AGREEMENTS
AND THE GUARANTEES
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Preferred
Securities (to the extent the Issuer has funds available for the payment of such
Distributions) are irrevocably guaranteed by the Corporation as and to the
extent set forth under "Description of Guarantees." Taken together, the
Corporation's obligations under each series of Corresponding Junior Subordinated
Debentures, the Indenture, the related Trust Agreement, the related Expense
Agreement, and the related Guarantee provide, in the aggregate, a full,
irrevocable and unconditional guarantee of payments of Distributions and other
amounts due on the Related Preferred Securities. No single document standing
alone or operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these documents
that has the effect of providing a full, irrevocable and unconditional guarantee
of the Issuer's obligations under the Related Preferred Securities. If and to
the extent that the Corporation does not make payments on any series of
Corresponding Junior Subordinated Debentures, such Issuer will not pay
Distributions or other amounts due on its Related Preferred Securities. The
Guarantees do not cover payment of Distributions when the related Issuer does
not have sufficient funds to pay such Distributions. In such event, the remedy
of a holder of a series of Related Preferred Securities is to institute a legal
proceeding directly against the Corporation pursuant to the terms of the
Indenture for enforcement of payment of amounts of such Distributions to such
holder. The obligations of the Corporation under each Guarantee are subordinate
and junior in right of payment to all Senior Debt of the Corporation.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on
each series of Corresponding Junior Subordinated Debentures, such payments will
be sufficient to cover Distributions and other payments due on the Related
Preferred Securities, primarily because (i) the aggregate principal amount of
each series of Corresponding Junior Subordinated Debentures will be equal to the
sum of the aggregate stated Liquidation Amount of the Related Preferred
Securities and Common Securities; (ii) the interest rate and interest and other
payment dates on each series of Corresponding Junior Subordinated Debentures
will match the Distribution rate and Distribution and other payment dates for
the Related Preferred Securities; (iii) the Corporation shall pay for all and
any costs, expenses and liabilities of such Issuer except the Issuer's
obligations to holders of its Preferred Securities under such Preferred
Securities; and (iv) each Trust Agreement provides that the Issuer will not
engage in any activity that is not consistent with the limited purposes of such
Issuer.
Notwithstanding anything to the contrary in the Indenture, the Corporation
has the right to set-off any payment it is otherwise required to make thereunder
with and to the extent the Corporation has theretofore made, or is concurrently
on the date of such payment making, a payment under the related Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES
A holder of any Preferred Security may, to the extent permissible under
applicable law, institute a legal proceeding directly against the Corporation to
enforce its rights under the related Guarantee without first instituting a legal
proceeding against the Guarantee Trustee, the related Issuer or any other person
or entity.
-43-
<PAGE> 45
A default or event of default under any Senior Debt of the Corporation
would not constitute a default or Debenture 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 Junior Subordinated
Debentures until such Senior Debt has been paid in full or any payment default
thereunder has been cured or waived. Failure to make required payments on any
series of Junior Subordinated Debentures would constitute a Debenture Event of
Default under the Indenture.
LIMITED PURPOSE OF ISSUERS
Each Issuer's Preferred Securities evidence a beneficial interest in such
Issuer, and each Issuer exists for the sole purpose of issuing its Preferred
Securities and Common Securities and investing the proceeds thereof in Junior
Subordinated Debentures. A principal difference between the rights of a holder
of a Preferred Security and a holder of a Junior Subordinated Debenture is that
a holder of a Junior Subordinated Debenture is entitled to receive from the
Corporation the principal amount of and interest accrued on Junior Subordinated
Debentures held, while a holder of Preferred Securities is entitled to receive
Distributions from such Issuer (or from the Corporation under the applicable
Guarantee) if and to the extent such Issuer has funds available for the payment
of such Distributions.
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary termination, winding-up or liquidation
of any Issuer involving the liquidation of the Company, the holders of the
Related Preferred Securities will be entitled to receive, out of the assets held
by such Issuer, the Liquidation Distribution in cash. See "Description of
Preferred Securities--Liquidation Distribution Upon Termination." Upon any
voluntary or involuntary liquidation or bankruptcy of the Corporation, the
Property Trustee, as holder of the Corresponding Junior Subordinated Debentures,
would be a subordinated creditor of the Corporation, subordinated in right of
payment to all Senior Debt as set forth in the Indenture, but entitled to
receive payment in full of principal and interest, before any stockholders of
the Corporation receive payments or distributions. Since the Corporation is the
guarantor under each Guarantee and has agreed to pay for all costs, expenses and
liabilities of each Issuer (other than the Issuer's obligations to the holders
of its Preferred Securities), the positions of a holder of such Preferred
Securities and a holder of such Corresponding Junior Subordinated Debentures
relative to other creditors and to stockholders of the Corporation in the event
of liquidation or bankruptcy of the Corporation are expected to be substantially
the same.
PLAN OF DISTRIBUTION
The Junior Subordinated Debentures or the Preferred Securities may be sold
in a public offering to or through underwriters or dealers designated from time
to time. The Corporation and each Issuer may sell its Junior Subordinated
Debentures or Preferred Securities as soon as practicable after effectiveness of
the Registration Statement of which this Prospectus forms a part. The names of
any underwriters or dealers involved in the sale of the Junior Subordinated
Debentures or Preferred Securities in respect of which this Prospectus is
delivered, the amount or number of Junior Subordinated Debentures and Preferred
Securities to be purchased by any such underwriters and any applicable
commissions or discounts will be set forth in the applicable Prospectus
Supplement.
Underwriters may offer and sell Junior Subordinated Debentures or
Preferred Securities at a fixed price or prices, which may be changed, or from
time to time at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. In connection
-44-
<PAGE> 46
with the sale of Preferred Securities, underwriters may be deemed to have
received compensation from the Corporation and/or the applicable Issuer in the
form of underwriting discounts or commissions and may also receive commissions.
Underwriters may sell Junior Subordinated Debentures or Preferred Securities to
or through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters.
Any underwriting compensation paid by the Corporation and/or the
applicable Issuer to underwriters in connection with the offering of Junior
Subordinated Debentures or Preferred Securities, and any discounts, concessions
or commissions allowed by such underwriters to participating dealers, will be
described in an accompanying Prospectus Supplement. Underwriters and dealers
participating in the distribution of Junior Subordinated Debentures or Preferred
Securities may be deemed to be underwriters, and any discounts and commissions
received by them and any profit realized by them on resale of such Junior
Subordinated Debentures or Preferred Securities may be deemed to be underwriting
discounts and commissions, under the Securities Act. Underwriters and dealers
may be entitled, under agreement with the Corporation and the applicable Issuer,
to indemnification against and contribution toward certain civil liabilities,
including liabilities under the Securities Act, and to reimbursement by the
Corporation for certain expenses.
In connection with the offering of the Preferred Securities of any Issuer,
such Issuer may grant to the underwriters an option to purchase additional
Preferred Securities to cover over-allotments, if any, at the initial public
offering price (with an additional underwriting commission), as may be set forth
in the accompanying Prospectus Supplement. If such Issuer grants any
over-allotment option, the terms of such over-allotment option will be set forth
in the Prospectus Supplement for such Preferred Securities.
Underwriters and dealers may engage in transactions with, or perform
services for, the Corporation and/or the applicable Issuer and/or any of their
affiliates in the ordinary course of business.
The Junior Subordinated Debentures and the Preferred Securities will be
new issues of securities and will have no established trading market. Any
underwriters to whom Junior Subordinated Debentures or Preferred Securities are
sold for public offering and sale may make a market in such Junior Subordinated
Debentures and Preferred Securities, but such underwriters will not be obligated
to do so and may discontinue any market making at any time without notice. Such
Junior Subordinated Debentures or Preferred Securities may or may not be listed
on a national securities exchange or the Nasdaq National Market. No assurance
can be given as to the liquidity of or the existence of trading markets for any
Junior Subordinated Debentures or Preferred Securities.
VALIDITY OF SECURITIES
Unless otherwise indicated in the applicable Prospectus Supplement,
certain matters of Delaware law relating to the validity of the Preferred
Securities, the enforceability of the Trust Agreements and the formation of the
Issuers will be passed upon by Richards, Layton & Finger, special Delaware
counsel to the Corporation and the Issuers. Unless otherwise indicated in the
applicable Prospectus Supplement, the validity of the Guarantees and the Junior
Subordinated Debentures will be passed upon for the Corporation by Paul L.
Reynolds Esq., and for the Underwriters by Sullivan & Cromwell. Certain matters
relating to United States Federal income tax considerations will be passed upon
for the Corporation by Sullivan & Cromwell, as special tax counsel.
-45-
<PAGE> 47
EXPERTS
The financial statements incorporated in this prospectus by reference from
the Corporation's Annual Report on Form 10-K for the year ended December 31,
1996, have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report, which is incorporated herein by reference, and have been
so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
-46-
<PAGE> 48
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Registration fee under the Securities Act of 1933, as amended. $60,606.06
Blue Sky fees and expenses (including counsel fees)...........
Fees of rating agencies.......................................
Trustees' fees and expenses...................................
Printing and engraving........................................
Accounting services...........................................
Legal fees of Registrant's counsel............................
Miscellaneous.................................................
---------------
Total................................................... $
===============
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act") may be permitted to directors,
officers and controlling persons of the Corporation pursuant to the foregoing
provisions, or otherwise, the Corporation has been advised that in the opinion
of the Commission such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Corporation of expenses incurred or paid by a director, officer or controlling
person of the Corporation in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Corporation will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
Section 1701.13 of the Ohio Revised code provides that a corporation may
indemnify or agree to indemnify any person who was or is a party, or is
threatened to be made a party, to any threatened, pending, or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
other than an action by or in the right of the corporation, by reason of the
fact that he is or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, trustee, officer, employee, or agent of another corporation, domestic
or foreign, nonprofit or for profit, partnership, joint venture, trust or other
enterprise, against expenses, including attorney's fees, judgments, fines, and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement or conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and with respect to any criminal action or proceeding that he had
reasonable cause to believe that his conduct was unlawful. Section 1701.13
further specifies that a corporation may indemnify or agree to indemnify any
person who was or is a party,
II-1
<PAGE> 49
or is threatened to be made a party, to any threatened, pending, or completed
action or suit by or in the right of the corporation to procure a judgment in
its favor by reason of the fact that he is or was a director, officer, employee,
or agent of the corporation, or is or was serving at the request of the
corporation as a director, trustee, officer, employee, or agent of another
corporation, domestic or foreign, nonprofit or for profit, partnership, joint
venture, trust or other enterprise, against expenses, including attorneys' fees
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made in respect of any
claim, issue, or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation unless, and only to the extent that the court of common pleas, or
the court in which such action or suit was brought, determines upon application
that, despite the adjudication of liability, but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses as the court of common pleas or such other court
shall deem proper. In addition, Section 1701.13 requires a corporation to pay
any expenses, including attorneys' fees, of a director in defending an action,
suit or proceeding referred to above as they are incurred, in advance of the
final disposition of the action, suit or proceeding upon receipt of an
undertaking by or on behalf of the director in which he agrees to both (i) repay
such amount if it is proved by clear and convincing evidence that his action or
failure to act involved an act or omission undertaken with deliberate intent to
cause injury to the corporation or undertaken with reckless disregard for the
best interests of the corporation and (ii) reasonably cooperate with the
corporation concerning the action, suit or proceeding. The indemnification
provided by Section 1701.13 shall not be deemed exclusive of any other rights to
which those seeking indemnification may be entitled under the Articles of
Incorporation or Code of Regulations of the Corporation.
The Code of Regulations of the Corporation provide that the Corporation
shall indemnify each director and each officer of the Corporation, and each
person employed by the Corporation who serves at the written request of the
President of the Corporation as a director, trustee, officer, employee or agent
of another corporation, domestic or foreign, nonprofit or for profit, to the
full extent permitted by Ohio Law. The Corporation may indemnify assistant
officers,employees and others by action of the Board of Directors to the extent
permitted by Ohio Law.
The Corporation carries directors' and officers' liability insurance
coverage which insures its directors and officers and the directors and offices
of its subsidiaries in certain circumstances.
Reference is made to the indemnity provisions in the Underwriting
Agreement which is filed as Exhibit 1 to this Registration Statement.
Under each Trust Agreement, the Corporation will agree to indemnify each
of the Trustees of the Issuer with respect thereto or any predecessor Trustee
for the Issuer, and to hold such Trustees harmless against any loss, damage,
claims, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
the Trust Agreements, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance of
any of its powers or duties under the Trust Agreements.
ITEM 16. EXHIBITS.
Exhibit
- -------
1 Form of Underwriting Agreement*
3(a) Amended Articles of Incorporation of the Corporation, incorporated by
reference to the Corporation's Registration Statement, Exhibit 3.1,
on Form S-4 (Reg. No. 33-19965)
3(b) Code of Regulations of the Corporation, incorporated by reference to
the Corporation's Registration Statement, Exhibit 3.2, on Form S-4
(Reg. No. 33-19965)
II-2
<PAGE> 50
4(a) Form of Junior Subordinated Indenture, dated as of ________, 1997,
between The Corporation and Wilmington Trust Company, as
Debenture Trustee*
4(b) Certificate of Trust of Capital Trust I*
4(c) Trust Agreement of Capital Trust I*
4(d) Certificate of Trust of Capital Trust II*
4(e) Trust Agreement of Capital Trust II*
4(f) Form of Amended and Restated Trust Agreement of Capital Trust I and II*
4(g) Form of Capital Security Certificate for Capital Trust I and II
(included as Exhibit D of Exhibit 4(f)*
4(h) Form of Guarantee Agreement for Capital Trust I and II*
5(a) Opinion of Paul L. Reynolds, Esq. as to legality of the Junior
Subordinated Debentures and the Guarantees to be issued by the
Corporation.*
5(b) Opinion of Richards, Layton & Finger as to legality of the Capital
Securities to be issued by Capital Trust I*
5(c) Opinion of Richards, Layton & Finger as to legality of the Capital
Securities to be issued by Capital Trust II (included in 5(b))*
8 Opinion of Sullivan & Cromwell as to certain federal income tax
matters*
12 Computation of ratio of earnings to fixed charges*
23(a) Consent of Deloitte & Touche LLP
23(b) Consent of Paul L. Reynolds (included in 5(a))*
23(c) Consent of Richards, Layton & Finger (included in 5(b))*
23(d) Consent of Sullivan & Cromwell (included in 8)
24 Power of Attorney (included as part of the signature page)
25(a) Form T-1 Statement of Eligibility to act as trustee under the Junior
Subordinated Indenture*
25(b) Form T-1 Statement of Eligibility of Wilmington Trust Company to act
as trustee under the Amended and Restated Trust Agreement of Capital
Trust I*
25(c) Form T-1 Statement of Eligibility of Wilmington Trust Company to act
as trustee under the Amended and Restated Trust Agreement of Capital
Trust II*
25(d) Form T-1 Statement of Eligibility of Wilmington Trust Company under
the Guarantee for the benefit of the holders of Capital Securities
of Capital Trust I*
25(e) Form T-1 Statement of Eligibility of Wilmington Trust Company under
the Guarantee for the benefit of the holders of Capital Securities
of Capital Trust II*
- ----------
* To be filed by amendment
II-3
<PAGE> 51
ITEM 17. UNDERTAKINGS.
Each of the undersigned Registrants hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of a
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Securities Exchange Act") that
is incorporated by reference in this Registration Statement shall be deemed to
be a new registration statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of each
Registrant pursuant to the provisions described under Item 15 above, or
otherwise, each Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
each Registrant of expenses incurred or paid by a director, officer or
controlling person of each Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, each Registrant will, unless
in the opinion of its counsel the matter has been settled by the controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
Each of the undersigned Registrants hereby also undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(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 estimate maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in post-effective amendment by those
paragraphs is contained in periodic reports filed by a Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act that are incorporated
by reference in this Registration Statement.
(2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the Securities Act, 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.
II-4
<PAGE> 52
(4) to provide to the underwriter at the closing specified in the
underwriting agreement certificates in such denominations and registered in such
names as required by the underwriter to permit prompt delivery to each purchase.
(5) that, for the purposes of determining any liability under the
Securities Act:
(i) The information omitted from the form of prospectus filed as
part of this Registration Statement in reliance upon Rule 424(b)(1) or (4)
or 487(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(ii) Each post-effective amendment that contains a form of
prospectus shall be deemed to be a new Registration Statement relating to
the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
II-5
<PAGE> 53
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, Fifth
Third Bancorp certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Cincinnati, State of Ohio, on the 6th day of
March, 1997.
FIFTH THIRD BANCORP (Registrant)
By: /s/ GEORGE A. SCHAEFER, JR.
----------------------------------------
George A. Schaefer, Jr., President & CEO
KNOWN ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints P. Michael Brumm his true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign and execute on
behalf of the undersigned any and all amendments to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in connection with
any such amendments, as fully to all intents and purposes as he might or could
do in person, and does hereby ratify and confirm all that said attorney-in-fact
and agent, or his substitute or resubstitute, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the 6th day of March, 1997.
Signature Title
--------- -----
/s/ GEORGE A. SCHAEFER, JR. President, Chief Executive Officer
- --------------------------- (Principal Executive Officer)
George A. Schaefer, Jr. & Director
/s/ P. MICHAEL BRUMM Executive Vice President and CFO
- --------------------------- (Principal Financial Officer)
P. Michael Brumm
/s/ ROGER W. DEAN Controller (Principal Accounting Officer)
- ---------------------------
Roger W. Dean
/s/ JOHN F. BARRETT Director
- ---------------------------
John F. Barrett
/S/ MILTON C. BOESEL, JR. Director
- ---------------------------
Milton C. Boesel, Jr.
* Director
- ---------------------------
Gerald V. Dirvin
/s/ THOMAS B. DONNELL Director
- ---------------------------
Thomas B. Donnell
* Director
- ---------------------------
Richard T. Farmer
II-6
<PAGE> 54
Signature Title
--------- -----
* Director
- ---------------------------
John D. Geary
/s/ IVAN W. GORR Director
- ---------------------------
Ivan W. Gorr
/s/ JOSEPH H. HEAD, JR. Director
- ---------------------------
Joseph H. Head, Jr.
* Director
- ---------------------------
John R. Herschede
/s/ WILLIAM G. KAGLER Director
- ---------------------------
William G. Kagler
/s/ WILLIAM J. KEATING Director
- ---------------------------
William J. Keating
/s/ JAMES D. KIGGEN Director
- ---------------------------
James D. Kiggen
/s/ ROBERT B. MORGAN Director
- ---------------------------
Robert B. Morgan
* Director
- ---------------------------
Michael H. Norris
* Director
- ---------------------------
James E. Rogers
/s/ BRIAN H. ROWE Director
- ---------------------------
Brian H. Rowe
/s/ JOHN J. SCHIFF, JR. Director
- ---------------------------
John J. Schiff, Jr.
/s/ DENNIS J. SULLIVAN, JR. Director
- ---------------------------
Dennis J. Sullivan, Jr.
* Director
- ---------------------------
Dudley S. Taft
II-7
<PAGE> 55
Pursuant to the requirements of the Securities Act of 1933, Capital Trust I
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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, and State of Ohio on the 6th day of
March, 1997.
CAPITAL TRUST I
By: Fifth Third Bancorp
as Depositor
By: /s/ P. MICHAEL BRUMM
--------------------
Pursuant to the requirements of the Securities Act of 1933, Capital Trust II
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, and State of Ohio on the 6th day of
March, 1997.
CAPITAL TRUST II
By: Fifth Third Bancorp
as Depositor
By: /s/ P. MICHAEL BRUMM
--------------------
II-8
<PAGE> 1
Exhibit 23(a)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Fifth Third Bancorp on Form S-3 of our report dated January 15, 1997,
incorporated by reference in the Annual Report on Form 10-K of Fifth Third
Bancorp for the year ended December 31, 1996 and to the reference to us under
the heading "Experts" in the Prospectus, which is part of this Registration
Statement.
/s/ DELOITTE & TOUCHE LLP
Cincinnati, Ohio
March 6, 1997
