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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 30, 1998
REGISTRATION NO. 333-67465
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
U.S. BANCORP
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C>
DELAWARE 41-0255900
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
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U.S. BANK PLACE
601 SECOND AVENUE SOUTH
MINNEAPOLIS, MINNESOTA 55402-4302
(612) 973-1111
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
--------------------------
LEE R. MITAU, ESQ.
U.S. BANCORP
601 SECOND AVENUE SOUTH
MINNEAPOLIS, MINNESOTA 55402-4302
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------------
Copy to:
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<S> <C>
MITCHELL S. EITEL, ESQ. ROBERT MORRISH, ESQ.
Sullivan & Cromwell Libra Investments, Inc.
125 Broad Street 11766 Wilshire Boulevard, Suite 870
New York, New York 10004 Los Angeles, California
(212) 558-4960 (310) 312-5670
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time, and such time or times as may be determined by the Selling Stockholders
after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box. / /
--------------------------
CALCULATION OF REGISTRATION FEE
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<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
AMOUNT TO BE AGGREGATE AGGREGATE OFFERING REGISTRATION
TITLE OF SECURITIES TO BE REGISTERED(1) REGISTERED(1) PRICE PER UNIT PRICE FEE
<S> <C> <C> <C> <C>
Common Stock (par value $1.25 per share) 900,000 shares (2) (2) $1,800(2)(3)
</TABLE>
(1) This Registration Statement relates to the resale of shares of Common Stock
of the Registrant to be received by certain employees in connection with the
circumstances described in the Prospectus.
(2) Pursuant to Rule 457(c), the registration fee is calculated on the basis of
the average of the high and low prices of the Common Stock of the Registrant
reported on the NYSE on December 28, 1998 (34.97).
(3) The total amount of the Registration Fee is $8,750, of which $6,950 was paid
upon the initial filing of the Registration Statement.
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
U.S. BANCORP
900,000 Shares of Common Stock
(Par Value $1.25 Per Share)
------------------------
Listed on: The New York Stock Exchange
Trading Symbol: USB
Closing price on DECEMBER 28, 1998: $34.69
------------------------
Certain Stockholders of U.S. Bancorp propose to sell
Shares of U.S. Bancorp Common Stock
THE SELLING STOCKHOLDERS:
- - may sell up to 900,000 shares, as described herein under "Plan of
Distribution"
- - will pay all stock transfer taxes, brokerage commissions, underwriting
discounts or commissions and their own counsel's fees
- - are named individually herein under "Selling Stockholders"
- - will indemnify the Company against certain liabilities
THE COMPANY:
- - will not receive any proceeds from the sale of these shares
- - will pay all expenses other than those paid by the Selling Stockholders
- - will indemnify the Selling Stockholders against certain liabilities
------------------------
The mailing address of the principal executive offices of U.S. Bancorp is
U.S. Bank Place,
601 Second Avenue South, Minneapolis, Minnesota 55402-4302, and the telephone
number is (612) 973-1111.
The Shares are not savings accounts, deposits or other obligations of a bank
or savings association and are not insured by the Federal Deposit Insurance
Corporation or any other government agency.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined that
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
------------------------
THE DATE OF THIS PROSPECTUS IS DECEMBER 30, 1998.
<PAGE>
THE COMPANY
GENERAL
You may obtain financial and other information relating to U.S. Bancorp (the
"Company"), its directors and its executive officers, from (1) the Company's
1997 Annual Report on Form 10-K, as amended, (2) the Company's 1998 Quarterly
Reports on Form 10-Q and (3) the Company's 1998 Current Reports on Form 8-K. You
may obtain copies of these reports as indicated under "Available Information".
See also "Incorporation of Certain Documents By Reference".
HISTORY AND BUSINESS
On August 1, 1997, First Bank System, Inc. of Minneapolis, Minnesota
acquired U.S. Bancorp of Portland, Oregon and assumed the U.S. Bancorp name. The
Company is a regional, multi-state bank holding company headquartered in
Minneapolis. The Company incorporated in Delaware in 1929 and owns 100 percent
of the capital stock of seven banks and ten trust companies. The Company has
over 1,000 banking offices in Minnesota, Oregon, Washington, Colorado,
California, Idaho, Nebraska, North Dakota, Nevada, South Dakota, Montana, Iowa,
Illinois, Utah, Wisconsin, Kansas, and Wyoming. The Company also has various
nonbank subsidiaries engaged in financial services.
The banks engage in general commercial banking business, principally in
domestic markets. They range in deposits from less than $1.0 million to $47.3
billion and provide a wide variety of services to individuals, businesses,
industry, institutional organizations, governmental entities, and other
financial institutions. Depository services include checking accounts, savings
accounts, and time certificate contracts. Ancillary services, such as treasury
management and receivable lockbox collection, are provided for corporate
customers. The Company's bank and trust subsidiaries provide a full range of
fiduciary activities for individuals, estates, foundations, business
corporations, and charitable organizations.
The Company provides banking services through its subsidiary banks to both
domestic and foreign customers and correspondent banks. These services include
consumer banking, commercial lending, financing of import/export trade, foreign
exchange, and investment services.
The Company, through its subsidiaries, also provides services in trust,
commercial and agricultural finance, data processing, leasing, and brokerage
services.
On a full-time equivalent basis, employment during 1997 averaged a total of
25,858 employees.
COMPETITION. The commercial banking business is highly competitive.
Subsidiary banks compete with other commercial banks and with other financial
institutions, including savings and loan associations, mutual savings banks,
finance companies, mortgage banking companies, credit unions, and investment
companies. In recent years, competition has increased from institutions not
subject to the same regulatory restrictions as domestic banks and bank holding
companies.
GOVERNMENT POLICIES. State and federal legislative changes affect the
operations of the Company, as do the policies of various regulatory authorities,
including those of the several states in which the banks operate, the United
States and foreign governments. These policies include, for example, (1)
statutory maximum legal lending rates, (2) domestic monetary policies of the
Board of Governors of the Federal Reserve System, (3) United States fiscal
policy, (4) international currency regulations and monetary policies, and (5)
capital adequacy and liquidity constraints imposed by bank regulatory agencies.
SUPERVISION AND REGULATION. The Company is a registered bank holding
company under the Bank Holding Company Act of 1956, and is regulated by the
Board of Governors of the Federal Reserve System.
Under the Bank Holding Company Act of 1956, a bank holding company may
engage in banking, managing or controlling banks, furnishing or performing
services for banks it controls, and conducting activities that the Board of
Governors has determined to be closely related to banking. The Company must
obtain
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the prior approval of the Board of Governors before acquiring more than 5
percent of the outstanding shares of another bank or bank holding company. The
Company must notify, and in some situations obtain the prior approval of, the
Board of Governors when the Company acquires more than 5 percent of the
outstanding shares of a company engaged in a "bank-related" business.
Under the Bank Holding Company Act of 1956, as amended by the Riegle-Neal
Interstate Banking and Branching Efficiency Act of 1994, the Company may acquire
banks throughout the United States, subject only to state or federal deposit
caps and state minimum-age requirements. Effective June 1, 1997, the Bank
Holding Company Act of 1956, as so amended, authorized interstate branching by
acquisition and consolidation in those states that had not opted out by June 1,
1997.
The Comptroller of the Currency supervises and examines national banks. All
subsidiary banks of the Company are members of the Federal Deposit Insurance
Corporation and, as such, are subject to examination thereby. In practice, the
primary federal regulator makes regular examinations of each subsidiary bank
subject to its regulatory review or participates in joint examinations with
other federal regulators. Areas subject to regulation by federal authorities
include the allowance for credit losses, investments, loans, mergers, issuance
of securities, payment of dividends, establishment of branches and other aspects
of operations.
PROPERTIES. The Company and its significant subsidiaries occupy their
headquarter offices under long-term leases. The Company also leases freestanding
operations centers in St. Paul and owns operations centers in Fargo, Portland,
and Boise. At December 31, 1997, the Company's subsidiaries owned and operated a
total of 603 facilities and leased an additional 638 facilities, all of which
are well maintained. Additional information with respect to premises and
equipment is available in Notes G and Q to the Consolidated Financial Statements
in the Company's 1997 Form 10-K.
DESCRIPTION OF THE COMPANY'S CAPITAL STOCK
THE FOLLOWING DESCRIPTION OF THE CAPITAL STOCK OF THE COMPANY IS NOT
COMPLETE AND IS SUBJECT TO APPLICABLE DELAWARE LAW AND TO THE PROVISIONS OF THE
COMPANY'S CERTIFICATE OF INCORPORATION, AS AMENDED (THE "COMPANY'S
CERTIFICATE"). THE FOLLOWING DESCRIPTION IS QUALIFIED BY REFERENCE TO (1) THE
COMPANY'S CERTIFICATE, (2) THE CERTIFICATE OF DESIGNATION FOR EACH SERIES OF
PREFERRED STOCK OF THE COMPANY, AND (3) THE AGREEMENTS AND DOCUMENTS REFERRED TO
BELOW UNDER "--PERIODIC STOCK PURCHASE RIGHTS AND RISK EVENT WARRANTS" AND
"--PREFERRED STOCK--TERM PARTICIPATING PREFERRED STOCK." WE INCORPORATE BY
REFERENCE COPIES OF THESE DOCUMENTS AS EXHIBITS TO THE REGISTRATION STATEMENT OF
WHICH THIS PROSPECTUS IS A PART.
GENERAL
The authorized capital stock of the Company consists of 1,500,000,000 shares
of Common Stock, par value $1.25 per share, and 50,000,000 shares of preferred
stock. Unless action is required by applicable laws or regulations, the
Company's Board of Directors has the power to adopt resolutions that (1) provide
for the issuance of preferred stock in one or more series and (2) fix or limit
the voting rights, designations, preferences, and relative, participating,
optional or other special rights of such stock. This power is limited by
applicable laws or regulations and may be delegated to a committee of the
Company's Board of Directors.
As of November 30, 1998, (1) 744,797,857 shares of Common Stock were issued
(including 19,817,592 shares held in treasury), (2) 61,780,577 shares were
reserved for issuance under the Company's employee and director plans and the
Company's Dividend Reinvestment Plan, (3) 93,194 shares were reserved for
issuance under outstanding warrants to purchase Common Stock and (4) 45,000,000
shares were reserved for issuance upon exercise of the Periodic Stock Purchase
Rights and Risk Event Warrants described below. As of November 30, 1998, there
were no shares of preferred stock of the Company outstanding and 12,750 shares
of preferred stock of the Company reserved for issuance.
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PREFERRED STOCK
The Company presently has no series of
preferred stock issued and outstanding and two series of preferred stock
authorized for future issuance. As of November 30, 1998, the Company had 12,750
shares of its Series 1990A Preferred Stock reserved for issuance.
SERIES 1990A PREFERRED STOCK
The Company may be obligated to issue up to 12,750 shares of its Series
1990A Preferred Stock as a result of the sale by the Company of 37,800,000
shares of its Common Stock and accompanying periodic stock purchase rights and
risk event warrants in a private placement in July 1990. See "--Common
Stock--Periodic Stock Purchase Rights and Risk Event Warrants" below. If issued,
the shares of Series 1990A Preferred Stock would provide for a liquidation
preference of $100,000 per share. The dividend rate would be adjusted quarterly
and would be determined at the time of issuance.
If the Company does not pay dividends on the Series 1990A Preferred Stock
for six or more quarters, then the number of directors of the Company may be
increased by one. The holders of such Series 1990A Preferred Stock, voting as a
separate class, will be entitled to elect the one additional director at the
next annual meeting of the Company's shareholders for the election of directors.
The additional director will continue to serve the full term for which he or she
would have been elected, even if dividends on the Series 1990A Preferred Stock
are subsequently declared or paid. The affirmative vote or consent of the
holders of at least two-thirds of the outstanding shares of the Series 1990A
Preferred Stock will be required (1) to amend the Company's Certificate
(including any certificate of designation or any similar document relating to
any series of preferred stock of the Company) in a manner which will adversely
affect the rights or privileges of the Series 1990A Preferred Stock, (2) to
issue, authorize, or increase the authorized amount of any additional class or
series of stock ranking prior to the Series 1990A Preferred Stock as to
dividends or upon liquidation, or (3) to issue or authorize any obligation or
security convertible into or evidencing a right to purchase any such class or
series of stock.
TERM PARTICIPATING PREFERRED STOCK
GENERAL. The Company has established a series of preferred stock, par value
$1.00 per share, designated as the "Term Participating Preferred Stock". The
Company will issue such shares solely as employment compensation to employees of
Libra Investments, Inc. (or the high-yield division of any successor to Libra
Investments, Inc. that is a direct or indirect subsidiary of the Company), which
the Company recently agreed to purchase. Holders of Term Participating Preferred
Stock will possess rights to receive Common Stock pursuant to a Rights
Agreement, dated as of January 4, 1999, between the Company and U.S. Bank
National Association, as Rights Agent.
The number of shares of Term Participating Preferred Stock will initially be
approximately 100,000. The Company's Board of Directors may increase or decrease
the number of shares, but not below the number then outstanding. Any shares
transferred to the Company will be available for reissuance as shares of this
series.
TERM. The shares of Term Participating Preferred Stock will remain
outstanding until December 31, 2003, or the Early Termination Date, as defined
in the Rights Agreement (the "Term Date"), unless earlier purchased by the
Company. From the Term Date, (1) each share of Term Participating Preferred
Stock will represent only the right to receive the number of shares of Common
Stock to which the holder of the attached Right would be entitled, assuming that
such Right is validly exercised or deemed exercised and (2) the holders of the
Term Participating Preferred Stock will have no other rights or claims against
the Company.
DIVIDENDS. The Company's Board of Directors may declare dividends on the
Term Participating Preferred Stock, out of funds legally available therefor, on
each date occurring prior to the Term Date that dividends or other distributions
(except those payable in Common Stock) are payable on or in respect of Common
Stock and in an amount per share equal to the aggregate amount of dividends or
other distributions (except those payable in Common Stock) that would be payable
on such date to a holder of the Reference Package (as defined below). Dividends
on each share will cumulate from the date such share is originally issued.
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However, any such share originally issued after a dividend record date and on or
prior to the dividend payment date to which such record date relates will not be
entitled to receive the dividend payable on such dividend payment date. Holders
of shares will not be entitled to any dividends, whether payable in cash,
property or stock, in excess of full cumulative dividends.
The term "Reference Package" initially means ten shares of the Common Stock
of the Company. If the Company, at any time after the close of business on the
date of initial issuance of the Term Participating Preferred Stock, (1) declares
or pays a dividend on any Common Stock payable in Common Stock, (2) subdivides
(by any split, recapitalization or otherwise), any Common Stock or (3) combines
any Common Stock into a smaller number of shares, then the Reference Package
after such event shall be the Common Stock that a holder of the Reference
Package immediately prior to such event would hold thereafter as a result
thereof.
While any shares of Term Participating Preferred Stock are outstanding, the
Company must first pay the full cumulative dividends (including the dividend to
be due upon payment of such dividend, distribution, redemption, purchase or
other acquisition) on all such outstanding shares if the Company (1) declares a
dividend upon the Common Stock or upon any other stock ranking junior to the
Term Participating Preferred Stock as to dividends or upon liquidation (except
for dividends in such stock), or (2) acquires for any consideration (or pays or
makes available any money for a sinking fund for the redemption of any shares of
any such stock) any Common Stock or any other stock of the Company ranking
junior to or on a parity with the Term Participating Preferred Stock as to
dividends or upon liquidation (except by conversion into or exchange for such
stock).
MERGER, ETC. If there is a transaction prior to the Term Date in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then each share of Term
Participating Preferred Stock shall at the same time be similarly exchanged or
changed in an amount equal to the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, that a holder
of the Reference Package would be entitled to receive as a result of such
transaction.
LIQUIDATION PREFERENCE. If the Company is liquidated prior to the Term
Date, the holders of shares of Term Participating Preferred Stock will be
entitled to receive an amount per share equal to the aggregate amount
distributed or to be distributed prior to such date in connection with such
liquidation to a holder of the Reference Package. This payment will be made
before any distribution or payment is made to the holders of Common Stock or of
any other stock of the Company ranking junior to the Term Participating
Preferred Stock upon liquidation. This payment also includes accrued dividends
to such distribution or payment date, whether or not earned or declared. If such
payment is made in full to all holders, or on or following the occurrence of the
Term Date, the holders as such will have no right or claim to any of the
remaining assets of the Company.
If the assets of the Company available for distribution to the holders of
shares of Term Participating Preferred Stock upon any liquidation of the Company
are insufficient to pay all amounts to which such holders are entitled pursuant
to the preceding paragraph, no such distribution will be made on account of any
shares of any other class or series of Preferred Stock ranking on a parity with
the Term Participating Preferred Stock. However, the Company may pay
proportionate distributive amounts on account of the shares of Term
Participating Preferred Stock, ratably in proportion to the full distributable
amounts for which holders of all such parity shares are respectively entitled
upon such liquidation. Upon the liquidation of the Company, the holders of
shares of Term Participating Preferred Stock then outstanding will be entitled
to be paid out of assets of the Company available for distribution to its
stockholders all amounts to which such holders are entitled pursuant to the
preceding paragraph before any payment is made to the holders of Common Stock or
any other stock of the Company ranking junior upon liquidation to the Term
Participating Preferred Stock.
REDEMPTION. The shares of Term Participating Preferred Stock will not be
redeemable.
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VOTING. The shares of Term Participating Preferred Stock shall not afford
the holders thereof any right to vote or consent except as required by law.
TRANSFER. A share of Term Participating Preferred Stock may not be
transferred by any person to whom such share is issued by the Company except:
(1) by an employee to such employee's spouse or children or trusts for their
benefit or the benefit of such employee; (2) by the laws of descent; or (3) to
the Company; and, in each such case, without the receipt of value therefor.
ADDITIONAL PROVISIONS
The rights of holders of the Company's Common Stock will be subject to the
rights of holders of any preferred stock that may be issued in the future. Any
such issuance may adversely affect the interests of holders of Common Stock, (1)
by limiting the control that they may exert by exercise of their voting rights
or (2) by subordinating their rights in liquidation to the rights of the holders
of preferred stock of the Company. In addition, the issuance of shares of
preferred stock of the Company may discourage takeover attempts and other
changes in control of the Company, by limiting the exercise of control by a
person who has gained a substantial equity interest in the Company. The Company
has no current plans to issue any other shares of preferred stock, except as
described above with respect to the Series 1990A Preferred Stock and the Term
Participating Preferred Stock.
COMMON STOCK
GENERAL. Each share of the Company's Common Stock is entitled to dividends
as declared by the Company's Board from any funds legally available for
dividends. The Company may not make any payment on account of the retirement of
Common Stock unless full dividends (including accumulated dividends, if
applicable) have been set apart for payment upon all outstanding shares of the
preferred stock of the Company and the Company is not in default with respect to
any agreement for the retirement of any shares of preferred stock of the
Company. Holders of Common Stock are entitled to one vote per share.
Shareholders do not have the right to cumulate their votes in the election of
directors. The Common Stock has no conversion rights and the holders of Common
Stock have no preemptive or other rights to subscribe for additional securities
of the Company. In the event of the liquidation of the Company, after the
payment or provision for payment of all debts and subject to the rights of the
holders of preferred stock of the Company which may be outstanding, the holders
of Common Stock will be entitled to share ratably in the remaining assets of the
Company. The Company's Common Stock is listed on the New York Stock Exchange.
THE COMPANY DIVIDEND REINVESTMENT AND COMMON STOCK PURCHASE PLAN. Pursuant
to its Reinvestment and Purchase Plan, the Company provides eligible
shareholders with a method of investing cash dividends and optional cash
payments at 100% of the average price (as defined in the Reinvestment and
Purchase Plan) in additional shares of the Company's Common Stock without
payment of any brokerage commission or service charge. The Company's
Reinvestment and Purchase Plan includes certain dollar limitations on
participation and provides for eligible shareholders to elect dividend
reinvestment on only a part of the shares registered in the name of a
participant (while continuing to receive cash dividends on remaining shares).
PERIODIC STOCK PURCHASE RIGHTS AND RISK EVENT WARRANTS. The Company has
entered into a Stock Purchase Agreement, dated as of May 30, 1990, among (1)
Corporate Partners, L.P. ("Corporate Partners"), (2) Corporate Offshore
Partners, L.P. ("Offshore"), (3) The State Board of Administration of Florida
("State Board") solely in its capacity as a managed account and not in its
individual capacity, (4) Corporate Advisors, L.P. and (5) the Company. The
Company has also entered into a Stock Purchase Agreement, dated as of May 30,
1990 (the "Florida Stock Purchase Agreement"), between State Board in its
individual capacity and the Company. Pursuant to the Stock Purchase Agreement,
the Company sold (1) to Corporate Partners 26,568,723 shares of Common Stock, 10
Periodic Stock Purchase Rights (each a "PSPR") and one Risk Event Warrant, (2)
to Offshore 1,931,928 shares of Common Stock, 10 PSPRs and one Risk Event
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Warrant and (3) to State Board 2,819,349 shares of Common Stock, 10 PSPRs and
one Risk Event Warrant. Pursuant to the Florida Stock Purchase Agreement, the
Company sold to State Board 6,480,000 shares of Common Stock, 10 PSPRs and one
Risk Event Warrant.
The Stock Purchase Agreement and the Florida Stock Purchase Agreement
restrict certain actions of Corporate Partners, Offshore and State Board. The
restrictions include certain transfer restrictions with respect to the shares of
Common Stock acquired thereunder and standstill provisions limiting further
acquisitions of Common Stock. The Stock Purchase Agreement and the Florida Stock
Purchase Agreement also grant Corporate Partners, Offshore and State Board (1)
the right to purchase their pro rata share of any Voting Securities (as defined
in the Stock Purchase Agreement) sold by the Company for cash, subject to
certain exceptions and (2) the right to designate one person to act as a
non-voting observer of the Company's Board of Directors.
Each PSPR issued to Corporate Partners, Offshore and State Board relates to
a specific twelve-month period commencing with the twelve-month period following
closing of the transactions contemplated under the Stock Purchase Agreement and
the Florida Stock Purchase Agreement. Each PSPR shall become exercisable in the
event that a Dividend Shortfall (as defined in the Stock Purchase Agreement)
exists for the specific twelve-month period to which such PSPR relates. A
Dividend Shortfall will be deemed to exist if the Company has not paid a cash
dividend equal to $0.0683 per share of Common Stock for each quarter within such
twelve-month period. The PSPRs will be exercisable for that number of shares of
Common Stock or (subject to the prior approval of the Federal Reserve Board)
depositary shares representing one one-thousandth of a share of Series 1990A
Preferred Stock ("Depositary Shares") such that the holders of PSPRs will
receive value equal to the Dividend Shortfall. Once a PSPR has become
exercisable, it will remain exercisable for a one-year period at an exercise
price of $1.25 per share of Common Stock or $1.00 per Depositary Share. If a
PSPR were to become exercisable and were not redeemed by the Company as
described below, the issuance of Depositary Shares or Common Stock upon exercise
of a PSPR could adversely affect the market price of the Common Stock. If the
PSPRs were to be exercised for the Company's Common Stock, there could be
substantial dilution of the Common Stock.
Each Risk Event Warrant will become exercisable in the event of certain
defined change of control events with respect to the Company where the value
received by holders of Common Stock is less than $4.625 per share, or in certain
circumstances in the event the Common Stock is valued at less than $4.625 per
share on the tenth anniversary of the closing of the transactions contemplated
under the Stock Purchase Agreement. The Risk Event Warrants will be exercisable
for that number of shares of Common Stock at an exercise price of $1.25 per
share or, in certain circumstances (subject to the prior approval of the Federal
Reserve Board), Depositary Shares such that the holders of Risk Event Warrants
will receive value equal to such shortfall. If the Risk Event Warrants were to
become exercisable and were not redeemed by the Company as described below, the
issuance of Depositary Shares or Common Stock upon exercise of a Risk Event
Warrant could adversely affect the market price of the Common Stock. If the Risk
Event Warrants were to be exercised for Common Stock, there could be substantial
dilution of the Common Stock. In the event of a change in control at a time when
the market price of the Common Stock is less than $4.625 per share, the Risk
Event Warrants may have the effect of reducing the price per share to be
received by the holders of Common Stock.
In the event of the exercise of a Risk Event Warrant upon the occurrence of
certain change of control events, the Company may, at its option (subject to the
prior approval of the Federal Reserve Board), elect to have such Risk Event
Warrant become exercisable for other securities of the Company acceptable to the
holder of such Risk Event Warrant in lieu of the shares of Common Stock for
which such Risk Event Warrant would otherwise become exercisable. In addition,
the Company has the right (subject to the prior approval of the Federal Reserve
Board) to redeem any PSPR at a price equal to the Dividend Shortfall and any
Risk Event Warrant at a price equal to the Value Shortfall (as defined in the
Stock Purchase Agreement) after such PSPR or Risk Event
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Warrant, as the case may be, shall have become exercisable. The Company also has
entered into a registration rights agreement with Corporate Partners, Offshore
and State Board pursuant to which Corporate Partners, Offshore and State Board,
respectively, received certain rights to cause the Company to register with the
Commission the Common Stock acquired pursuant to the Stock Purchase Agreement
and the Florida Stock Purchase Agreement and the securities acquired upon
exercise of the PSPRs and the Risk Event Warrants.
The foregoing is a summary of the transactions contemplated by the Stock
Purchase Agreement and the Florida Stock Purchase Agreement and related
documents and is qualified in its entirety by the more detailed information
contained in such agreements and documents, copies of which are incorporated by
reference as exhibits to the Registration Statement of which this Prospectus is
a part.
CERTAIN PROVISIONS OF THE COMPANY'S CERTIFICATE AND THE COMPANY'S BYLAWS
The Company's Certificate requires the affirmative vote of the holders of
80% of the "Voting Stock" (defined therein) of the Company to approve certain
mergers, consolidations, reclassifications, dispositions of assets or
liquidation, involving or proposed by certain significant shareholders, unless
certain price and procedural requirements are met or unless the transaction is
approved by the "Continuing Directors" (defined therein). In addition, the
Company's Certificate (1) provides for classification of the Company's Board of
Directors into three separate classes, (2) sets a board size of between 12 and
30 and (3) authorizes action by the shareholders of the Company only pursuant to
a meeting and not by a written consent. The foregoing provisions of the
Company's Certificate can only be amended by the affirmative vote of the holders
of at least 80% of the outstanding Voting Stock. However, under Delaware law,
the holders of a majority of the outstanding Common Stock may amend the
Company's Certificate to reduce the maximum number of the Company directors to
the greater of (i) the number of directors then in office and (ii) 24. The
Company's Bylaws provide that special meetings of shareholders may be called
only by the Company's Board of Directors or the chief executive officer and (2)
if a shareholder desires to bring business before an annual meeting, written
notice of such business must be received by the Company not less than 120 days
prior to the month and day in the subsequent year corresponding to the month and
day of the prior year's proxy statement. The overall effect of these provisions
may be to delay or prevent attempts by other corporations or groups to acquire
control of the Company without negotiation with the Company's Board of
Directors.
SELLING STOCKHOLDERS
Up to 900,000 shares of Common Stock (the "Shares") are being offered for
the account of the selling stockholders of the Company named below (the "Selling
Stockholders"). The Shares will be issued by the Company to the Selling
Stockholders in connection with the acquisition of Libra Investments, Inc. by
the Company through U.S. Bancorp Investments, Inc., a subsidiary of the Company,
which is expected to occur on January 4, 1999.
The Selling Stockholders, who were employees of Libra Investments, Inc. at
the time of the acquisition, are Jess Ravich (together with Tia Ravich, Trustees
of the Ravich Revocable Trust of 1989), Jeffrey Benjamin, James P. Upchurch
(together with Rebecca A. Upchurch, Trustees of the Upchurch Living Trust dated
12/14/90), Robert Okun, Bonnie Bach, Gregory Bousquette, Forbes Burtt, Richard
Coppersmith, John Decoursey, Amy Emanuel, Mark Fein, Mary Ross Gilbert, Kevin J.
Gorman, Thomas Koch, Alan Lhota, Michael Lingvall, Steven Mayer, Rebecca
Mihalovich, Robert Morrish, Eben Perison, Russell Riopelle, Alan Schrager, Samir
Shah, Jean Smith, Stephen C. Smith, Caroline Sykes, Charles Thurnher (together
with Adele Thurnher, Trustees of the Charles & Adele Thurnher Living Trust dated
12/7/89), and Charles A. Yamarone. As used herein, "Selling Stockholders"
includes donees and pledgees selling Shares received from a named Selling
Stockholder after the date of this prospectus. None of the Selling Stockholders,
either
8
<PAGE>
individually or as a group, owns more than one percent of the outstanding shares
of Common Stock. Each of the Selling Stockholders who were employees of Libra
Investments, Inc. at the time of the acquisition has entered into an employee
agreement with the Company relating to their continued employment with a
subsidiary of the Company.
Because the Selling Stockholders may sell all or a portion of the Shares
that may be offered pursuant to this Prospectus, the number of Shares that will
be owned by each Selling Stockholder upon termination of this offering cannot be
determined.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time directly by one or more of the
Selling Stockholders in separate transactions or in a single transaction (either
of which may involve block transactions), in settlement of short sales of Common
Stock or in a combination of such methods of sale. Such sales may be made on the
New York Stock Exchange, or such other national securities exchange or automated
interdealer quotation system on which shares of Common Stock are then listed.
Such sales may be made through negotiated transactions or otherwise at market
prices prevailing at the time of the sale or at negotiated prices.
Alternatively, from time to time one or more of the Selling Stockholders may
offer Shares through brokers, dealers or agents, including a broker-dealer
subsidiary of the Company, who may receive commissions from any such Selling
Stockholders, agents and/or the purchasers for whom they may act as agent. If
necessary, a supplemental Prospectus will describe the method of sale in greater
detail. In addition, any of the Shares which qualify for sale pursuant to Rule
144 under the Securities Act of 1933 may be sold under Rule 144 rather than
pursuant to this Prospectus.
The Selling Stockholders and any such brokers, dealers or agents that
participate in the distribution of the Shares may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933. Any profits on the sale of
Shares by the Selling Stockholders and any associated commissions that are
received may be deemed to be underwriting compensation under the Securities Act
of 1933. If a Selling Stockholder is deemed to be an underwriter, such Selling
Stockholder may be subject to certain statutory liabilities under the Securities
Act of 1933, including but not limited to Sections 11 and 12 thereof.
Shares may be sold from time to time in one or more transactions at a fixed
offering price, which may be changed, or at varying prices determined at the
time of sale or at negotiated prices. If applicable, such prices will be
determined by agreement between the Selling Stockholders and any such dealers.
The Selling Stockholders may, from time to time, authorize dealers, acting as
the Selling Stockholders' agents, to solicit offers to purchase Shares upon the
terms and conditions set forth in any supplemental Prospectus. The Company does
not know of any arrangements that the Selling Stockholders have entered into to
effect any such transactions in the Shares, nor is the Company aware of which
brokerage firms the Selling Stockholders may select to effect brokerage
transactions.
The Selling Stockholders and any other person participating in a sale or
distribution of Shares will be subject to the Securities Exchange Act of 1934
and the rules and regulations thereunder, including Rule 10b-5 and Regulation M.
These provisions may limit the timing of purchases and sales of any of the
Shares by the Selling Stockholders and any other such person.
In order to comply with securities laws in certain jurisdictions, the Shares
offered hereby will be offered or sold in such jurisdictions only through
registered or licensed brokers or dealers.
The Company will not receive any part of the proceeds from the sale of the
Shares. The Selling Stockholders will pay all applicable stock transfer taxes,
brokerage commissions, and underwriting discounts or commissions. The Company
will bear all other expenses in connection with the offering and sale of the
Shares, including filing fees, legal and accounting
9
<PAGE>
fees and expenses, printing costs, and other expenses arising out of the
preparation and filing of the Registration Statement and this Prospectus. The
Company has agreed to indemnify the Selling Stockholders against certain
liabilities, including certain liabilities under the Securities Act of 1933, as
amended, in connection with the registration and the offering and sale of the
Shares. The Selling Stockholders have also agreed to indemnify the Company
against certain liabilities in connection with the registration and the offering
and sale of the Shares.
USE OF PROCEEDS
The Company will not receive any proceeds from the sales hereunder of the
Shares but will bear certain of the expenses thereof. See "Plan of
Distribution".
VALIDITY OF THE SHARES
The validity of the Shares is being passed upon for the Company by Dorsey &
Whitney LLP.
EXPERTS
The consolidated financial statements of U.S. Bancorp appearing in the
Company's Annual Report (Form 10-K) for the year ended December 31, 1997, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
10
<PAGE>
AVAILABLE INFORMATION
The Securities Exchange Act of 1934, as amended, applies to the Company.
Consequently, the Company files information with the Securities and Exchange
Commission (the "Commission"). You may inspect and copy this information at the
public reference facilities of the Commission located at Judiciary Plaza, 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the public
reference facilities in the Commission's regional offices located at 7 World
Trade Center, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. You may obtain information
on the operation of the Public Reference Room by calling the Commission at
1-800-SEC-0330. You may also obtain copies of this information at prescribed
rates by writing to the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549. Some of this information is also available
from the Commission over the Internet at http://www.sec.gov. The Company's
Common Stock is listed on the New York Stock Exchange. You may also inspect this
information at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
This Prospectus does not contain all of the information set forth in the
Registration Statement on Form S-3 and the exhibits thereto (together with any
amendments or supplements thereto, the "Registration Statement"). We have filed
the Registration Statement with the Commission under the Securities Act of 1933,
as amended.
For more information you may contact the Company at U.S. Bank Place, 601
Second Avenue South, Minneapolis, Minnesota 55402-4302 or by calling (612)
973-1111.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We hereby incorporate by reference in this Prospectus the following
documents which have been filed by the Company (formerly known as First Bank
System, Inc.) with the Commission:
- - Annual Report on Form 10-K for the year ended December 31, 1997, as amended
by the Form 10-K/A dated May 19, 1998;
- - Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998, June
30, 1998 and September 30, 1998;
- - Current Reports on Form 8-K filed January 16, 1998, April 2, 1998, April 3,
1998 and July 16, 1998;
- - the portions of the Company's Proxy Statement for the Annual Meeting of
Stockholders held on April 22, 1998 that have been incorporated by reference
in the Company's 1997 Form 10-K; and
- - the description of the Company's Common Stock, par value $1.25 per share,
contained in Item 1 of the Registration Statement on Form 8-A dated March
19, 1984, as amended in its entirety by that Form 8 Amendment dated February
26, 1993 and that Form 8-A/A-2 dated October 6, 1994, and any amendment or
report filed for the purpose of updating such description filed subsequent
to the date of this Prospectus and prior to the termination of the offering
described herein.
We also hereby incorporate by reference into this Prospectus all documents
filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the date hereof and prior to the
termination of the offering of the Shares of Common Stock, which documents shall
be deemed a part hereof from the date of filing thereof.
We will give you a copy of all of the information incorporated by reference
free of charge upon written or oral request to the Office of the Corporate
Secretary, U.S. Bancorp, 601 Second Avenue South, Minneapolis, Minnesota
55402-4302, telephone: (612) 973-1111.
We may modify some of the statements contained in this Prospectus and the
documents incorporated by reference. You should ignore any statements that are
superseded.
11
<PAGE>
This prospectus (and the documents incorporated by reference):
- - constitutes the universe of authorized representations.
- - concerns only securities to which it relates.
- - only offers securities to any person to whom it is lawful to do so.
- - only implies that information contained herein is correct on the date of this
Prospectus (or, for documents incorporated by reference, on their date of
filing).
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
This Prospectus (including information included or incorporated by reference
herein) contains statements that make assertions regarding the future. We
caution you that actual results may differ materially from those in the
forward-looking statements.
12
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESMAN OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR
TO REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU MUST NOT RELY ON ANY
UNAUTHORIZED INFORMATION OR REPRESENTATIONS. THIS PROSPECTUS IS AN OFFER TO SELL
ONLY THE SHARES OFFERED HEREBY, BUT ONLY UNDER THE CIRCUMSTANCES AND IN
JURISDICTIONS WHERE IT IS LAWFUL TO DO SO. THE INFORMATION CONTAINED IN THIS
PROSPECTUS IS CURRENT ONLY AS OF ITS DATE (OR FOR DOCUMENTS INCORPORATED BY
REFERENCE, AS OF THE DATE OF FILING).
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
The Company..................................... 2
General....................................... 2
History and Business.......................... 2
Description of the Company's Capital
Stock......................................... 3
General....................................... 3
Preferred Stock............................... 4
Common Stock.................................. 6
Certain Provisions of the Company's
Certificate and the Company's Bylaws........ 8
Selling Stockholders............................ 8
Plan of Distribution............................ 9
Use of Proceeds................................. 10
Validity of the Shares.......................... 10
Experts......................................... 10
Available Information........................... 11
Incorporation of Certain Documents by
Reference..................................... 11
Cautionary Statement Concerning Forward-Looking
Information................................... 12
</TABLE>
[LOGO]
900,000 SHARES
---------------------
PROSPECTUS
---------------------
COMMON STOCK
(PAR VALUE $1.25 PER SHARE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. EXPENSES.
<TABLE>
<S> <C>
Registration statement filing fee.......................................... $ 8,750
Legal fees and expenses.................................................... 20,000
Accounting fees and expenses............................................... 20,000
Printing costs............................................................. 10,000
Miscellaneous.............................................................. 11,250
---------
Total.................................................................... $ 70,000
---------
---------
</TABLE>
Item 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Delaware law, U.S. Bancorp will indemnify its directors and officers
under certain circumstances against all expenses and liabilities incurred by
them as a result of suits brought against them as such directors and officers.
The indemnified directors and officers must act in good faith and in a manner
they reasonably believe to be in the best interests of the Company, and, with
respect to any criminal action or proceeding, have no reasonable cause to
believe their conduct was unlawful. The Company will not indemnify directors and
officers for expenses in respect of any matter as to which the indemnified
directors and officers shall have been adjudged to be liable to the Company,
unless the court in which such action or suit was brought shall otherwise
determine. The Company may indemnify officers and directors only as authorized
in each specific case upon a determination by the stockholders or disinterested
directors that indemnification is proper because the indemnitee has met the
applicable statutory standard of conduct.
Article Ninth of the Company's Restated Certificate of Incorporation, as
amended, provides that a director shall not be liable to the Company or its
stockholders for monetary damages for a breach of fiduciary duty as a director,
except for liability:
- for any breach of the director's duty of loyalty to the Company or its
stockholders,
- for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law,
- under the Delaware statutory provision making directors personally liable
for unlawful payment of dividends or unlawful stock repurchases or
redemptions, or
- for any transaction from which the directors derived an improper personal
benefit.
The Bylaws of the Company provide that the officers and directors of the
Company shall be indemnified to the full extent permitted by Delaware law, as
amended from time to time. The Board of Directors has discretion to indemnify
any employee of the Company for actions arising by reason of the employee's
employment with the Company. The Company shall pay expenses incurred by officers
and directors in defending actions in advance of any final disposition if such
officer or director agrees to repay such amounts if it is ultimately determined
that he or she is not entitled to be indemnified under Delaware law.
The Company maintains a standard policy of officers' and directors'
liability insurance.
II-1
<PAGE>
Item 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<S> <C>
2 Agreement and Plan of Merger by and between First Bank System, Inc. and U.S. Bancorp, dated as of
March 19, 1997. (Incorporated by reference to Exhibit 2.1 to the registrant's Form 8-K dated March
19, 1997.)
3.1 Restated Certificate of Incorporation, as amended. (Incorporated by reference to Exhibit 3.1 to the
registrant's report on Form 10-Q for the period ended March 31, 1998.)
3.2 Form of Certificate of Designation, dated January 4, 1999, relating to the Term Participating
Preferred Stock.
3.3 By-laws, as amended. (Incorporated by reference to Exhibit 3.1 to the registrant's report on Form
10-Q for the period ended June 30, 1998.)
4.1 Rights Agreement, dated as of January 4, 1999, between U.S. Bancorp and U.S. Bank National
Association, as Rights Agent.
4.2 Form of Indemnification Agreement, dated December 30, 1998, between U.S. Bancorp and the Selling
Stockholders.
4.3 Warrant Agreement, dated as of October 2, 1995, between U.S. Bancorp and First Chicago Trust Company
of New York, as Warrant Agent and Form of Warrant. (Incorporated by reference to Exhibits 4.18 and
4.19 to the registrant's Registration Statement on Form S-3, File No. 33-61667.)
4.4 Warrant Agreement, dated as of November 20, 1990, between Metropolitan Financial Corporation and
American Stock Transfer and Trust Company, as Warrant Agent; Supplemental Warrant Agreement, dated as
of January 24, 1995, between U.S. Bancorp and American Stock Transfer and Trust Company, as Warrant
Agent; and Form of Warrant. (Incorporated by reference to Exhibit 4E to the registrant's report on
Form 10-K for the year ended December 31, 1996.)
4.5 Stock Purchase Agreement, dated as of May 30, 1990, among Corporate Partners, L.P., Corporate
Offshore Partners, L.P., The State Board of Administration of Florida and the Company (without
exhibits). (Incorporated by reference to Exhibit 4.8 to Amendment No. 1 to the registrant's
Registration Statement on Form S-3, File No. 33-42650.)
4.6 First Amendment, dated as of June 30, 1990, to the Stock Purchase Agreement among Corporate Partners,
L.P., Corporate Offshore Partners, L.P., The State Board of Administration of Florida and the
Company. (Incorporated by reference to Exhibit 4.9 to Amendment No. 1 to the registrant's
Registration Statement on Form S-3, File No. 33-42650.)
4.7 Second Amendment, dated July 18, 1990, to Stock Purchase Agreement among Corporate Partners, L.P.,
Corporate Offshore Partners, L.P., The State Board of Administration of Florida and the Company.
(Incorporated by reference to Exhibit 4.10 to Amendment No. 1 to the registrant's Registration
Statement on Form S-3, File No. 33-42650.)
4.8 Stock Purchase Agreement, dated as of May 30, 1990, between The State Board of Administration of
Florida and the Company (without exhibits). (Incorporated by reference to Exhibit 4.11 to amendment
No. 1 to the registrant's Registration Statement on Form S-3, File No. 33-42650.)
4.9 Form of Periodic Stock Purchase Right. (Incorporated by reference to Exhibit 4.12 to Amendment No. 1
to the registrant's Registration Statement on Form S-3, File No. 33-42650.)
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<S> <C>
4.10 Form of Risk Event Warrant. (Incorporated by reference to Exhibit 4.13 to Amendment No. 1 to the
registrant's Registration Statement on Form S-3, File No. 33-42650.)
4.11 Registration Rights Agreement, dated as of July 18, 1990, among Corporate Partners, L.P., Corporate
Offshore Partners, L.P., The State Board of Administration of Florida and the Company. (Incorporated
by reference to Exhibit 4.14 to Amendment No. 1 to the registrant's Registration Statement on Form
S-3, File No. 33-42650.)
4.12 Registration Rights Agreement, dated as of July 18, 1990, between The State Board of Administration
of Florida and the Company. (Incorporated by reference to Exhibit 4.14 to Amendment No. 1 to the
registrant's Registration Statement on Form S-3, File No. 33-42650.)
4.13 Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, copies of instruments defining the rights of
holders of long-term debt are not filed. U.S. Bancorp agrees to furnish a copy thereof to the
Securities and Exchange Commission upon request.
5* Opinion of Dorsey & Whitney LLP.
23.1 Consent of Ernst & Young LLP.
23.2* Consent of Dorsey & Whitney LLP. (Included in Exhibit 5.)
24* Power of Attorney.
27 The Company's Financial Data Schedules. (Incorporated by reference to Exhibit 27 to the registrant's
report on Form 10-Q for the period ended September 30, 1998.)
</TABLE>
- ------------------------
* Previously filed.
Item 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase
or decrease in the volume of securities offered (if the total dollar
value of securities offered would not exceed that which was registered)
and any deviation from the low or high and of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
II-3
<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act of 1933 shall be deemed to be part of
this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial BONA FIDE offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this amendment no. 1 to
the registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on
December 30, 1998.
<TABLE>
<S> <C> <C>
U.S. BANCORP
By: /s/ JOHN F. GRUNDHOFER
-----------------------------------------
John F. Grundhofer
PRESIDENT AND CHIEF EXECUTIVE OFFICER
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
<TABLE>
<CAPTION>
NAME TITLE
- ------------------------------ --------------------------
<C> <S>
President, Chief Executive
/s/ JOHN F. GRUNDHOFER Officer and Director
- ------------------------------ (principal executive
John F. Grundhofer officer)
Executive Vice President
/s/ SUSAN E. LESTER and Chief Financial
- ------------------------------ Officer (principal
Susan E. Lester financial officer)
/s/ TERRANCE R. DOLAN Senior Vice President and
- ------------------------------ Controller (principal
Terrance R. Dolan accounting officer)
*
- ------------------------------ Director
Linda L. Ahlers
*
- ------------------------------ Director
Harry L. Bettis
*
- ------------------------------ Director and Chairman
Gerry B. Cameron
*
- ------------------------------ Director
Carolyn Silva Chambers
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
NAME TITLE
- ------------------------------ --------------------------
<C> <S>
*
- ------------------------------ Director
Arthur D. Collins, Jr.
*
- ------------------------------ Director
Peter H. Coors
*
- ------------------------------ Director
Robert L. Dryden
*
- ------------------------------ Director
Joshua Green III
*
- ------------------------------ Director
Robert L. Hale
*
- ------------------------------ Director
Delbert W. Johnson
*
- ------------------------------ Director
Richard L. Knowlton
*
- ------------------------------ Director
Jerry W. Levin
*
- ------------------------------ Director
Edward J. Phillips
*
- ------------------------------ Director
Paul A. Redmond
*
- ------------------------------ Director
Richard G. Reiten
*
- ------------------------------ Director
S. Walter Richey
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
NAME TITLE
- ------------------------------ --------------------------
<C> <S>
*
- ------------------------------ Director
Richard L. Schall
*
- ------------------------------ Director
Walter Scott, Jr.
/s/ TERRANCE R. DOLAN
- ------------------------------
*By Terrance R. Dolan as
Attorney-in-fact
</TABLE>
Dated: December 30, 1998
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<S> <C>
2 Agreement and Plan of Merger by and between First Bank System, Inc. and U.S. Bancorp, dated as of
March 19, 1997. (Incorporated by reference to Exhibit 2.1 to the registrant's Form 8-K dated March
19, 1997.)
3.1 Restated Certificate of Incorporation, as amended. (Incorporated by reference to Exhibit 3.1 to the
registrant's report on Form 10-Q for the period ended March 31, 1998.)
3.2 Form of Certificate of Designation, dated January 4, 1999, relating to the Term Participating
Preferred Stock.
3.3 By-laws, as amended. (Incorporated by reference to Exhibit 3.1 to the registrant's report on Form
10-Q for the period ended June 30, 1998.)
4.1 Rights Agreement, dated as of January 4, 1999, between U.S. Bancorp and U.S. Bank National
Association, as Rights Agent.
4.2 Form of Indemnification Agreement, dated December 30, 1998, between U.S. Bancorp and the Selling
Stockholders.
4.3 Warrant Agreement, dated as of October 2, 1995, between U.S. Bancorp and First Chicago Trust Company
of New York, as Warrant Agent and Form of Warrant. (Incorporated by reference to Exhibits 4.18 and
4.19 to the registrant's Registration Statement on Form S-3, File No. 33-61667.)
4.4 Warrant Agreement, dated as of November 20, 1990, between Metropolitan Financial Corporation and
American Stock Transfer and Trust Company, as Warrant Agent; Supplemental Warrant Agreement, dated as
of January 24, 1995, between U.S. Bancorp and American Stock Transfer and Trust Company, as Warrant
Agent; and Form of Warrant. (Incorporated by reference to Exhibit 4E to the registrant's report on
Form 10-K for the year ended December 31, 1996.)
4.5 Stock Purchase Agreement, dated as of May 30, 1990, among Corporate Partners, L.P., Corporate
Offshore Partners, L.P., The State Board of Administration of Florida and the Company (without
exhibits). (Incorporated by reference to Exhibit 4.8 to Amendment No. 1 to the registrant's
Registration Statement on Form S-3, File No. 33-42650.)
4.6 First Amendment, dated as of June 30, 1990, to the Stock Purchase Agreement among Corporate Partners,
L.P., Corporate Offshore Partners, L.P., The State Board of Administration of Florida and the
Company. (Incorporated by reference to Exhibit 4.9 to Amendment No. 1 to the registrant's
Registration Statement on Form S-3, File No. 33-42650.)
4.7 Second Amendment, dated July 18, 1990, to Stock Purchase Agreement among Corporate Partners, L.P.,
Corporate Offshore Partners, L.P., The State Board of Administration of Florida and the Company.
(Incorporated by reference to Exhibit 4.10 to Amendment No. 1 to the registrant's Registration
Statement on Form S-3, File No. 33-42650.)
4.8 Stock Purchase Agreement, dated as of May 30, 1990, between The State Board of Administration of
Florida and the Company (without exhibits). (Incorporated by reference to Exhibit 4.11 to amendment
No. 1 to the registrant's Registration Statement on Form S-3, File No. 33-42650.)
4.9 Form of Periodic Stock Purchase Right. (Incorporated by reference to Exhibit 4.12 to Amendment No. 1
to the registrant's Registration Statement on Form S-3, File No. 33-42650.)
4.10 Form of Risk Event Warrant. (Incorporated by reference to Exhibit 4.13 to Amendment No. 1 to the
registrant's Registration Statement on Form S-3, File No. 33-42650.)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<S> <C>
4.11 Registration Rights Agreement, dated as of July 18, 1990, among Corporate Partners, L.P., Corporate
Offshore Partners, L.P., The State Board of Administration of Florida and the Company. (Incorporated
by reference to Exhibit 4.14 to Amendment No. 1 to the registrant's Registration Statement on Form
S-3, File No. 33-42650.)
4.12 Registration Rights Agreement, dated as of July 18, 1990, between The State Board of Administration
of Florida and the Company. (Incorporated by reference to Exhibit 4.14 to Amendment No. 1 to the
registrant's Registration Statement on Form S-3, File No. 33-42650.)
4.13 Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, copies of instruments defining the rights of
holders of long-term debt are not filed. U.S. Bancorp agrees to furnish a copy thereof to the
Securities and Exchange Commission upon request.
5* Opinion of Dorsey & Whitney LLP.
23.1 Consent of Ernst & Young LLP.
23.2* Consent of Dorsey & Whitney LLP. (Included in Exhibit 5.)
24* Power of Attorney.
27 The Company's Financial Data Schedules. (Incorporated by reference to Exhibit 27 to the registrant's
report on Form 10-Q for the period ended September 30, 1998.)
</TABLE>
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* Previously filed.
<PAGE>
EXHIBIT 3.2
FORM OF CERTIFICATE OF DESIGNATION AND TERMS
OF TERM PARTICIPATING PREFERRED STOCK OF U.S. BANCORP
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
We, the undersigned, ____________________ and
____________________, the _______________ and _______________, respectively, of
U.S. Bancorp, a Delaware corporation (the "Corporation"), do hereby certify as
follows:
Pursuant to authority granted by the Certificate of
Incorporation of the Corporation, and in accordance with the provisions of
Section 151 of the General Corporation Law of the State of Delaware, the Board
of Directors of the Corporation has adopted the following resolutions fixing the
designation and certain terms, powers, preferences and other rights of a new
series of the Corporation's Preferred Stock, par value $1.00 per share, and
certain qualifications, limitations and restrictions thereon:
BE IT RESOLVED, that there is hereby established a series of
Preferred Stock, par value $1.00 per share, of the Corporation, and the
designation and certain terms, powers, preferences and other rights of the
shares of such series, and certain qualifications, limitations and restrictions
thereon, are hereby fixed as follows:
Section 1. Designation. The distinctive serial designation of
this series shall be "Term Participating Preferred Stock"
(hereinafter called "this Series"). Each share of this Series
shall be identical in all respects with the other shares of this
Series except as to the dates from and after which divi dends
thereon shall be cumulative.
The shares of this Series are to be issued by the Corporation
solely as employment compensation to Employees (each, an
"Employee") who are employees of Libra Investments, Inc. (or the
high-yield division of any successor to Libra Investments, Inc.
that is a direct or indirect subsidiary of the Corporation) and
solely as a unit with rights to receive Common Stock ("Rights")
pursuant to that certain Rights Agreement, dated as of January 4,
1999 (the "Rights Agreement"), between the Corporation and U.S.
Bank National Association, as Rights Agent. Certificates for
shares of this Series shall also
<PAGE>
represent the Rights attached thereto, shall bear a legend to such
effect and such Rights shall be deemed to be an integral part of
the shares of this Series.
Section 2. Number, Term, Etc. The number of shares in this
Series shall initially be _______, which number may from time to
time be increased or decreased (but not below the number then
outstanding) by the Board of Directors. Any shares of this Series
transferred to the Corporation in accordance with Section 9 shall
be available for reissuance as shares of this Series. The shares
of this Series shall remain outstanding, unless earlier purchased
by the Company, until December 31, 2003 or the Early Termination
Date (as defined in the Rights Agreement) (the "Term Date").
Shares of this Series may be issued in fractional shares, which
fractional shares shall entitle the holder, in proportion to such
holder's fractional share, to all rights of a holder of a whole
share of this Series.
Section 3. Dividends. The holders of full or fractional shares
of this Series shall be entitled to receive, when and as declared
by the Board of Directors, but only out of funds legally available
therefor, dividends, on each date occurring prior to the Term Date
that dividends or other distributions (other than dividends or
distributions payable in Common Stock of the Corporation) are
payable on or in respect of Common Stock comprising part of the
Reference Package (as defined below), in an amount per whole share
of this Series equal to the aggregate amount of dividends or other
distributions (other than dividends or distributions payable in
Common Stock of the Corporation) that would be payable on such
date to a holder of the Reference Package. Each such dividend
shall be paid to the holders of record of shares of this Series on
the date, not exceeding sixty days preceding such dividend or
distribution payment date, fixed for the purpose by the Board of
Directors in advance of payment of each particular dividend or
distribution. Dividends on each full and each fractional share of
this Series shall be cumulative from the date such full or
fractional share is originally issued; provided that any such full
or fractional share originally issued after a dividend record date
and on or prior to the dividend payment date to which such record
date relates shall not be entitled to receive the dividend payable
on such dividend payment date.
The term "Reference Package" shall initially mean ten shares
of Common Stock of the Corporation. If the Corporation shall, at
any time after the close of business on the date of initial
issuance of shares of this Series, (a) declare or pay a dividend
on any Common Stock payable in Common Stock, (b) subdivide (by any
split, recapitalization or otherwise), any Common Stock or (c)
combine any Common Stock into a smaller number of shares, then and
in each such case the Reference Package after such event shall be
the Common Stock that a holder of the Reference Package
immediately prior to such event would hold thereafter as a result
thereof.
<PAGE>
Holders of shares of this Series shall not be entitled to any
dividends, whether payable in cash, property or stock, in excess
of full cumulative dividends, as herein provided for this Series.
So long as any shares of this Series are outstanding, no
dividend (other than a dividend in Common Stock or in any other
stock ranking junior to this Series as to dividends and upon
liquidation, dissolution or winding up) shall be declared or paid
or set aside for payment or other distribution declared or made
upon the Common Stock or upon any other stock ranking junior to
this Series as to dividends or upon liquidation, dissolution or
winding up, nor shall any Common Stock nor any other stock of the
Corporation ranking junior to or on a parity with this Series as
to dividends or upon liquidation, dissolution or winding up be
redeemed, purchased or otherwise acquired for any consideration
(or any moneys be paid to or made available for a sinking fund for
the redemption of any shares of any such stock) by the Corporation
(except by conversion into or exchange for stock of the
Corporation ranking junior to this Series as to dividends and upon
liquidation, dissolution or winding up), unless, in each case, the
full cumulative dividends (including the dividend to be due upon
payment of such dividend, distribution, redemption, purchase or
other acquisition) on all outstanding shares of this Series shall
have been, or shall contemporaneously be, paid.
Section 4. Merger, Etc. In the event of any merger,
consolidation, reclassification, binding share exchange or other
transaction completed prior to the Term Date in which the shares
of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case
the full and fractional shares of this Series shall at the same
time be similarly exchanged or changed in an amount per whole
share of this Series equal to the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as
the case may be, that a holder of the Reference Package would be
entitled to receive as a result of such transaction.
Section 5. Liquidation Preference. In the event of any
liquidation, dissolution or winding up of the affairs of the
Corporation, whether voluntary or involuntary, completed prior to
the Term Date the holders of full and fractional shares of this
Series shall be entitled, before any distri bution or payment is
made on any date to the holders of the Common Stock or any other
stock of the Corporation ranking junior to this Series upon
liquidation, dissolution or winding up, to be paid in full an
amount per whole share of this Series equal to the aggregate
amount distributed or to be distributed prior to such date in
connection with such liquidation, dissolution or winding up to a
holder of the Reference Package (such greater amount being
hereinafter referred to as the "Liquidation Preference"), together
with accrued dividends to such distribution or payment date,
whether or not earned or declared. If such payment shall have been
made in full to all
<PAGE>
holders of shares of this Series, or on or following the
occurrence of the Term Date, the holders of shares of this Series
as such shall have no right or claim to any of the remaining
assets of the Corporation.
In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any
liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, shall be insufficient to pay in full all
amounts to which such holders are entitled pursuant to the first
paragraph of this Section 5, no such distribution shall be made on
account of any shares of any other class or series of Preferred
Stock ranking on a parity with the shares of this Series upon such
liquidation, dissolution or winding up unless proportionate
distributive amounts shall be paid on account of the shares of
this Series, ratably in proportion to the full distributable
amounts for which holders of all such parity shares are
respectively entitled upon such liquidation, dissolution or
winding up.
Upon the liquidation, dissolution or winding up of the
Corporation, the holders of shares of this Series then outstanding
shall be entitled to be paid out of assets of the Corporation
available for distribution to its stockholders all amounts to
which such holders are entitled pursuant to the first paragraph of
this Section 5 before any payment shall be made to the holders of
Common Stock or any other stock of the Corporation ranking junior
upon liquidation to this Series.
For the purposes of this Section 5, the consolidation or
merger of, or binding share exchange by, the Corporation with any
other corporation shall not be deemed to constitute a liquidation,
dissolution or winding up of the Corporation.
Section 6. Redemption. The shares of this Series shall not be
redeemable.
Section 7. Term. As contemplated above, the Shares of this
Series shall no longer be outstanding on and after the Term Date.
From the Term Date, each share of this Series shall represent
solely the right to receive the number of shares to which the
holder of the attached Right, would be entitled, assuming that
such Right is validly exercised or deemed exercised, and the
holders of shares of this Series shall no longer have any rights
or claims against the Corporation (including, without limitation,
no right to receive any amount in respect of the liquidation
preference) other than as provided in the attached Rights.
Certificates for shares of this Series shall also represent the
Rights attached thereto, shall bear a legend to such effect and
such Rights shall be deemed to be an integral part of the shares
of this Series.
Section 8. Voting. The shares of this Series shall not afford
the holders thereof any right to vote or consent except as
required by law.
<PAGE>
Section 9. Transfer. A share of this Series shall not be
transferred, sold, assigned, alienated or otherwise disposed of by
any person to whom such share is issued by the Corporation except:
(1) by an Employee to such Employee's spouse or children or trusts
for their benefit or the benefit of such Employee; (2) by the laws
of descent; or (3) to the Corporation, in each such case without
the receipt of value therefor.
<PAGE>
IN WITNESS WHEREOF, the undersigned have signed and attested
this certificate on the ____ day of _________, 199_.
---------------------------------
Attest:
- -------------------------
<PAGE>
EXHIBIT 4.1
- --------------------------------------------------------------------------------
FORM OF RIGHTS AGREEMENT
dated as of January 4, 1999,
between
U.S. BANCORP
and
U.S. BANK NATIONAL ASSOCIATION, as Rights Agent
-----------------------------------------------------
Rights Associated With, and Integral to, Term Participating Preferred Stock
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
PARTIES.......................................................................................1
RECITALS......................................................................................1
ARTICLE I
ISSUANCE AND FORM OF RIGHTS
SECTION 1.01. Issuance of Rights.............................................................1
SECTION 1.02. No Rights Certificates.........................................................1
SECTION 1.03. Exchange and Transfer of Rights................................................2
SECTION 1.04. Treatment of Holders of Rights.................................................2
ARTICLE II
DURATION AND EXERCISE OF RIGHTS
SECTION 2.01. Duration of Rights.............................................................2
SECTION 2.02. Exercise of Rights.............................................................2
SECTION 2.03. Adjustment Under Certain Circumstances.........................................6
SECTION 2.04. Delivery of Exercise Shares....................................................7
ARTICLE III
OTHER PROVISIONS RELATING TO RIGHTS OF
HOLDERS OF RIGHTS
SECTION 3.01. No Rights as Holders of Common Stock Conferred by Rights.......................7
SECTION 3.02. Holder of Rights May Enforce Rights............................................8
ARTICLE IV
CONCERNING THE RIGHTS AGENT
SECTION 4.01. Rights Agent...................................................................8
SECTION 4.02. Limitations on Rights Agent's Obligations......................................8
SECTION 4.03. Compliance With Applicable Laws................................................9
SECTION 4.04. Resignation and Appointment of Successor......................................10
</TABLE>
<PAGE>
ARTICLE V
MISCELLANEOUS
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 5.01. Amendments....................................................................11
SECTION 5.02. Merger, Consolidation, Sale, Transfer or Conveyance...........................12
SECTION 5.03. Notices and Demands to the Corporation and Rights Agent.......................12
SECTION 5.04. Addresses.....................................................................12
SECTION 5.05. APPLICABLE LAW................................................................12
SECTION 5.06. Obtaining of Governmental Approvals...........................................12
SECTION 5.07. Payment of Taxes..............................................................13
SECTION 5.08. Benefits of Rights Agreement..................................................13
SECTION 5.09. Headings......................................................................13
SECTION 5.10. Severability..................................................................13
SECTION 5.11. Counterparts..................................................................13
SECTION 5.12. Definitions...................................................................13
SECTION 5.13. Inspection of Agreement.......................................................14
</TABLE>
-ii-
<PAGE>
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of January 4, 1999 (as modified,
amended or supplemented, this "Agreement"), between U.S. BANCORP, a Delaware
corporation (the "Corporation") and U.S. BANK NATIONAL ASSOCIATION, a national
banking association, as Rights Agent (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, the Corporation is issuing its Term Participating
Preferred Stock, par value $1.00 per share, the terms of which are set forth in
the Certificate of Designations and Terms of Term Participating Preferred Stock,
dated January 4, 1999 (the "Preferred Stock"), together with rights (each, a
"Right") entitling the holder thereof to receive an amount of common stock, par
value $1.25 per share, of the Corporation (the "Common Stock"), to be determined
pursuant to the terms of the Rights; and
WHEREAS, the Corporation desires the Rights Agent to act on
behalf of the Corporation, and the Rights Agent is willing to so act, in
connection with the issuance, transfer, exchange, exercise and cancellation of
the Rights, and the Corporation wishes to set forth in this Agreement, among
other things, the provisions of the Rights and the terms and conditions upon
which the Rights may be issued, transferred, exchanged, exercised and canceled;
NOW, THEREFORE, in consideration of the premises, the parties
hereto hereby agree as follows:
ARTICLE I
ISSUANCE AND FORM OF RIGHTS
SECTION 1.01. Issuance of Rights. Each Right shall represent
the right, subject to the provisions hereof, to receive as specified in Section
2.04 a number of shares of Common Stock determined according to the provisions
of Section 2.02 upon the maturity of the Preferred Stock. Rights shall be issued
only as an integral part of shares of the Preferred Stock and shall not be
separately transferable.
SECTION 1.02. No Rights Certificates.
(a) Rights shall be evidenced only by certificates for
Preferred Stock, which shall indicate by an appropriate legend that the holder
thereof holds one Right for each share of Preferred Stock held by such holder.
No certificates for Rights shall be issued.
(b) The terms "holder" and "holder of Rights" as used herein
shall mean any person in whose name the Preferred Stock to which such Right is
attached is registered upon the register relating to such Offered Securities. At
all times prior to December 31, 2003 or the date (the "Early Termination Date")
on which the election (the "Election") is made under Section 5 of any of the
Principal Employee Agreements, dated September 3, 1998, between the Corporation,
U.S. Bancorp Investments Inc. ("USBII") and each of Jeffrey Benjamin, Robert
Okun, Jess
<PAGE>
Ravich and James Upchurch (the earlier of such dates, the "Term Date"), the
Corporation will, or will cause the registrar of the Preferred Stock to, make
available to the Rights Agent such information as to holders of the Preferred
Stock as may be necessary to keep the Rights Agent's records current.
SECTION 1.03. Exchange and Transfer of Rights.
(a) A Right may be exchanged or transferred only together with
the share of Preferred Stock to which such Right is attached, and only for the
purpose of effecting, or in conjunction with, an exchange or transfer of such
Preferred Stock. Furthermore, each transfer of a share of Preferred Stock on the
register relating to such Preferred Stock shall operate also to transfer the
Right to which such Preferred Stock is attached.
(b) The Rights Agent shall keep, at its corporate trust
office, books in which, subject to such reasonable regulations as it may
prescribe, it shall register Rights and transfers, exchanges, exercises and
cancellations of outstanding Rights.
SECTION 1.04. Treatment of Holders of Rights. Every holder of
a Right, by accepting the Preferred Stock to which such Right is attached,
consents and agrees with the Corporation, the Rights Agent and with every
subsequent holder of such Right that until the Right is transferred on the books
of the Rights Agent, the Corporation and the Rights Agent may treat the
registered holder of such Right as the absolute owner of the Right for any
purpose and as the person entitled to exercise such Right, any notice to the
contrary notwithstanding. In addition, each holder of a Right agrees to treat
such Right for United States federal income tax purposes as an integral part of
the Preferred Stock and not as separate property.
ARTICLE II
DURATION AND EXERCISE OF RIGHTS
SECTION 2.01. Duration of Rights. Each Right shall be deemed
exercised in full on the Term Date. After 5:00 P.M., Minneapolis, Minnesota
time, on the Term Date, the Rights shall become void, and all rights of the
holder of a Right under this Agreement (other than the right to receive Common
Stock pursuant to Sections 2.02 and 2.04) shall cease.
SECTION 2.02. Exercise of Rights.
(a) Each Right shall be deemed exercised on the Term Date
without the requirement of any action on the part of the holder thereof.
(b) On the Term Date, a holder of a Right shall be entitled to
receive a number of shares of Common Stock (the "Exercise Shares"), to be
determined as soon after the Term Date as is reasonably practicable and payable
as provided in Section 2.04, equal to the sum of (i) ten and (ii) the quotient
of (A)(1) if the Election has been made, the Early Termination Amount determined
in accordance with paragraph (d) of this Section 2.02 and (2) otherwise, the
Performance Amount determined in accordance with paragraph (c) of this Section
2.02 and (B)
-2-
<PAGE>
the Average Closing Price for the last day of the Reference Period multiplied by
the number of shares of Preferred Stock initially issued; provided that the
number of Exercise Shares shall be subject to adjustment as provided in Section
2.03. As used herein, the term "Average Closing Price" means, for any date, the
average of the closing prices per share of Common Stock reported on the New York
Stock Exchange (the "NYSE") Composite Transactions Tape (as published in the
Wall Street Journal or, if not therein, in another authoritative source) over
the period of five Trading Days ending on such date of determination, adjusted
as necessary to take account of any stock dividend, stock split, reverse stock
split or other similar change of the shares of Common Stock, or any
reclassification, recapitalization, merger, consolidation or other
reorganization affecting the shares of Common Stock ("Stock Event") occurring
during such five-day period, the term "Trading Day" means any day on which a
number of shares of Common Stock is traded on the NYSE equal to at least 70% of
the average daily volume of trading in Common Stock for the previous 20 days on
which the NYSE was open for business, and the term "Reference Period" means the
period beginning on January 1, 1999 and ending on the Term Date.
(c) The "Performance Amount" shall be determined according to
the following formula:
x = {a x Sum (i = 1 to 5) [w(i) e(i)]} - $75,000,000
where x is the Performance Amount, a is the multiple determined, pursuant to
Schedule 2.02(c) hereto, to be appropriate in light of the value calculated
for [Sum [w(i) e(i)]] is the total consolidated earnings before taxes of the
Business (including gains or losses relating to Retained Warrants and
Retained Fund Interests but calculated without regard to purchase accounting
adjustments or the effect of any compensation expense resulting from issuance
of securities (and cash payments with respect to taxes in connection
therewith) pursuant to the Incentive Compensation Agreement (as defined
below) or any Employee Agreement (as defined in the Incentive Compensation
Agreement), other than with respect to Formula Incentive Compensation (as
defined therein) payable under the Incentive Compensation Agreement, and
excluding any charges associated with any additional compensation expense
paid to a holder of Rights on account of taxes imposed as a result of a
dispute raised by the Internal Revenue Service relating to the valuation of
the Rights) in Reference Year (i) of the Reference Period, calculated in
accordance with generally accepted accounting principles as in effect from
time to time and consistent with the Corporation's practices during the
Reference Period (as applied to the Business) (with securities valuations
being determined as provided in Section 2.02(f) below) (but assuming for this
purpose that compensation expense is not less than 60% of Net Revenues) and
reduced for charges for capital and funding (as provided in Section 9 of the
Incentive Compensation Agreement), and w(i) is 0.4 if i is 1, 0.6 if i is 2
and 1.0 if i is 3 or higher. As used herein, (i) the term "Business" means
the investment banking and broker-dealer business (principally involving
high-yield securities) formerly conducted by Libra Investments, Inc.
("Libra"), including (A) growth in such business and any other lines of
business operated under the control of the Principal Employee Committee of
USBII (the "PEC") but excluding any business formerly conducted by USBII (and
any growth in such business) and (B) management of an investment account or
accounts established by the Corporation under management of
-3-
<PAGE>
USBII pursuant to such investment criteria as may be agreed by the Corporation
and the PEC, as amended from time to time, (ii) the term "Net Revenue" means Net
Revenues as determined pursuant to Section 3 of the Incentive Compensation
Agreement, dated as of January 4, 1999, by and among the Corporation, USBII, Mr.
Jess Ravich, Mr. Jeffrey Benjamin, Mr. Robert Okun and Mr. James Upchurch (the
"Incentive Compensation Agreement"), (iii) the term "Retained Warrants" means
any warrants received by U.S. Bancorp Investments, Inc., except for those
distributed pursuant to Section 6 of the Incentive Compensation Agreement, (iv)
the term "Retained Fund Interests" means the interest in the managing member of
the general partner of any fund formed by or at the direction of USBII (or its
predecessor) which is held directly or indirectly by USBII and (v) the term
"Reference Year" means each period during the Reference Period beginning on
January 1 of each year and ending on December 31 of such year (or, in the case
of the last Reference Year in the Reference Period, ending on the Term Date).
(d) The "Early Termination Amount" shall be zero, if the
events giving rise to the Election occur on or before January 31, 2000, and
otherwise shall be determined according to the following formula:
y = {a x Sum (i = 1 to 5) [w(i) e(i)]} - $75,000,000
where y is the Early Termination Amount and all other variables are as defined
in paragraph (c) of this Section 2.02, except that
(i) if the events giving rise to the Election occur
between February 1, 2000 and December 31, 2000,
then 'e(2)' shall equal the consolidated earnings
generated during the complete months in such
Reference Year (including the first month of such
Reference Year) prior to the date such events
occur, multiplied by 12 and divided by the number
of months used in calculating such consolidated
earnings;
(ii) if the events giving rise to the Election occur after
December 31, 2000, then 'e' for the Reference Year in
which such events occur shall equal the trailing 12
complete months' consolidated earnings at the time
such events occur; and
(iii) for each Reference Year after the Reference Year
in which the events giving rise to an Election
occur, 'e' shall be deemed to equal 'e(k)(i)'
where 'e(k)' is equal to the value of 'e(i)' for
the Reference Year in which the events giving
rise to an Election occur, as calculated pursuant
to clause (ii), above.
Example calculations are attached herein as Exhibit A.
(e) The Corporation shall arrange for an audit (or similar
procedure) of the books and records relating to the Business to be conducted by
an accounting firm selected by the Corporation for each Reference Year during
the Reference Period. For purposes of such audit, securities shall be valued as
provided in Section 2.02(f). A copy of the proposed audit report
-4-
<PAGE>
shall, upon completion, be promptly provided to the Corporation and the Rights
Agent, and the Rights Agent shall promptly provide a copy of such proposed audit
report to each holder of Rights. If, within 30 days following the provision of
each such report by the Rights Agent to the holders of Rights, the holders of a
majority of Rights notify the Rights Agent (any such notice, which shall specify
the nature and extent of the disagreement asserted, a "Dispute Notice") that
such holders disagree with the calculation of "x" or "y" implied by such
proposed audit report by more than $1 million, the Corporation shall agree with
the holders of a majority of Rights (or their attorneys-in-fact) as to the
designation of another accounting firm to conduct an audit of the books and
records of the Business; provided that if the Corporation and the holders of a
majority of Rights (or their attorneys-in-fact) cannot so agree, the second
audit shall be conducted by an independent "Big Five" accounting firm (which
shall not be the Corporation's auditor) selected by lot. The results relating to
the second audit shall be conclusive. The foregoing procedures shall be the
exclusive procedure for the resolution of any disputes with respect to such
audits.
(f) Whenever valuation of any securities is required in
connection with this Agreement or the audits discussed in paragraph (e) above,
the value of such securities shall equal their fair market value, determined as
follows:
(i) The PEC shall in good faith determine the fair market
value of all securities held by USBII in connection
with the Business. The determination of the fair
market value of all securities other than Freely
Tradeable Securities shall be based upon all relevant
factors, including such of the following factors as
may be relevant in the case of any security: current
financial position and current and historical
operating results of the issuer; sales prices in
recent public or private transactions involving the
same or similar securities or securities into which
securities held by USBII are convertible, including
transactions on any exchange on which such securities
are listed or in the over-the-counter market; recent
trading volume of the class of securities to which
the security belongs; contractual and statutory
provisions affecting USBII's ability to transfer the
security or affecting the liquidity of the security,
including USBII's right, if any, to require
registration of the security under the Securities Act
of 1933, as amended ("Securities Act"); significant
recent developments involving the issuer, including
pending mergers and acquisitions; the price paid by
USBII to acquire the security; and the percentage of
the issuer's outstanding securities that is owned by
USBII. The fair market value on any date of
determination of any security owned by USBII that is
a Freely Tradeable Security shall be the last
reported sale price of such security on such date on
the exchange where it is primarily traded or, if such
security is not traded on an exchange, the last
reported sale price of such security on such date on
the NASDAQ National Market System or Small Cap
Market. In making any determination of the fair
market value of any securities, no allowance of any
kind shall be made for goodwill, the name of the
Corporation, USBII or any member of the PEC, USBII's
office records, files or statistical data or any
intangible assets of USBII, the PEC or the
Corporation.
-5-
<PAGE>
For purposes of this Agreement, a security shall be
deemed to be a "Freely Tradeable Security" as of any
date of determination if, on such date, (a) such
security can be sold by USBII to the general public
(including a sale by any person following a
distribution of such security to such person from
USBII, even though a sale by USBII of such security,
if not so distributed to such person, might otherwise
be restricted) without the necessity of any further
federal, state or local governmental consent,
approval or filing (other than any notice filings of
the type required pursuant to Rule 144(h) under the
Securities Act), (b) such security is listed or
quoted on a Public Securities Market and (c) such
security is not at the time subject to any
contractual restrictions on the transfer thereof by
USBII.
(ii) After any such determination of the value of
securities, the PEC shall provide written notice of
such determination ("PEC Notice") to the Board of
Directors of USBII (the "Board") (the date of any
such notice, a "Notice Date"). If within 10 Business
Days after the Notice Date the PEC receives written
notice from the members of the Board who are not also
members of the PEC setting forth objection to any
specific item of such determination (the date of any
such notice of objection, a "Reply Date"), and such
members of the Board thereafter do not, within 45
days after the Notice Date, approve such
determination or any revised determination
subsequently submitted by the PEC, then the items in
question shall be determined (in accordance with
clause (i) above) by an investment banking firm
selected by the PEC and approved by such members of
the Board, and the determination of such investment
banking firm shall be binding upon the parties
hereto. The fees and expenses of such investment
banking firm shall be borne by USBII. The valuations
set forth in a PEC Notice that are not timely
objected to by the members of the Board who are not
also members of the PEC shall be deemed to be the
correct valuations for the relevant purposes.
SECTION 2.03. Adjustment Under Certain Circumstances. The
number of Exercise Shares to be issued upon the exercise of each Right shall be
subject to adjustment upon a Stock Event; provided that no such adjustment in
the number of shares of Common Stock to be issued upon exercise of the Rights
will be required until cumulative adjustments require an adjustment of at least
1% of such number. All such adjustments will be made at the discretion and on
the order of the Corporation.
SECTION 2.04. Delivery of Exercise Shares.
(a) The Corporation shall, by 5:00 P.M., Minneapolis,
Minnesota time, on the third Business Day next succeeding the date on which the
number of Exercise Shares is determined, execute, issue and deliver to the
Rights Agent a number of shares of Common Stock equal to the product of (i) the
Exercise Shares and (ii) the number of Rights that have then been deemed
exercised as provided in Section 2.02. Upon receipt of such Common Stock, the
Rights Agent shall, by 5:00 P.M. Minneapolis, Minnesota time, on the seventh
Business Day next succeeding the date on which the number of Exercise Shares is
determined, transmit to or upon
-6-
<PAGE>
the order of the holder of each exercised Right such holder's pro rata portion
of such Common Stock. As used herein, the term "Business Day" means any day that
is not a Saturday or Sunday and is not a legal holiday or a day on which banking
institutions generally are authorized or obligated by law or regulation to close
in the principal place of business of the Rights Agent.
(b) The accrual of dividends, if any, on the Common Stock
issued upon the deemed exercise of any Right will be governed by the terms of
the Corporation's certificate of incorporation and such Common Stock. From and
after the issuance of such Common Stock, the rights of the former holder of the
Rights exercised shall be governed by, and shall be subject to, the terms and
provisions of such certificate of incorporation and Common Stock.
(c) If Common Stock issued hereunder is subject to
restrictions pursuant to an agreement between the Corporation and the holder to
whom it is issued or, to the extent the Corporation is aware of any such
restriction, the certificate or certificates representing such Common Stock
shall bear an appropriate legend. Nothing in this Agreement shall obligate the
Corporation to issue unrestricted stock to a holder of Rights upon the exercise
of such Rights.
(d) Notwithstanding anything to the contrary in this Section
2.04, no fractional shares of Common Stock will be issued, but in lieu thereof
the Corporation will pay the cash value of any fractional shares of Common Stock
otherwise issuable.
(e) The Corporation shall not be required to pay any stamp or
other tax or other governmental charge required to be paid in connection with
any transfer involved in the issuance of Exercise Shares. If any such transfer
is involved, the Corporation shall not be required to issue or deliver any
Exercise Shares until such tax or other charge shall have been paid or it has
been established to the Corporation's satisfaction that no such tax or other
charge is due.
ARTICLE III
OTHER PROVISIONS RELATING TO RIGHTS OF
HOLDERS OF RIGHTS
SECTION 3.01. No Rights as Holders of Common Stock Conferred
by Rights. No Right shall entitle the holder thereof to any of the rights of a
holder of Common Stock, including, without limitation, the right to receive
dividends, if any, or payments upon the liquidation, dissolution or winding up
of the Corporation or to exercise voting rights, if any.
SECTION 3.02. Holder of Rights May Enforce Rights.
Notwithstanding any of the provisions of this Agreement, any holder of any
Right, without the consent of the Rights Agent or the holder of any other Right,
may, on such holder's own behalf and for such holder's own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the
Corporation to enforce, or otherwise in respect of, such holder's right to
exercise the Rights held by such holder in the manner provided in this
Agreement.
-7-
<PAGE>
ARTICLE IV
CONCERNING THE RIGHTS AGENT
SECTION 4.01. Rights Agent. The Corporation hereby appoints U.
S. Bank National Association as Rights Agent of the Corporation in respect of
the Rights upon the terms and subject to the conditions herein set forth, and
U.S. Bank National Association hereby accepts such appointment. The Rights Agent
shall have the powers and authority granted to and conferred upon it hereby and
such further powers and authority to act on behalf of the Corporation as the
Corporation may hereafter grant to or confer upon it.
SECTION 4.02. Limitations on Rights Agent's Obligations. The
Rights Agent accepts its obligations herein set forth upon the terms and
conditions hereof, including the following, to all of which the Corporation
agrees and to all of which the rights hereunder of the holders from time to time
of the Rights shall be subject:
(a) Compensation and Indemnification. The Corporation agrees
to pay the Rights Agent compensation to be agreed upon with the
Corporation for all services rendered by the Rights Agent and to
reimburse the Rights Agent for all reasonable out-of-pocket expenses
(including reasonable counsel fees) incurred by the Rights Agent in
connection with the services rendered by it hereunder. The Corporation
also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability or expense incurred without negligence,
bad faith or breach of this Agreement on the part of the Rights Agent,
arising out of or in connection with its acting as Rights Agent
hereunder.
(b) Agent for the Corporation. In acting in the capacity of
Rights Agent under this Agreement, the Rights Agent is acting solely as
agent of the Corporation and does not assume any obligation or
relationship of agency or trust with any of the owners or holders of
the Rights except as expressly set forth herein.
(c) Counsel. The Rights Agent may consult with counsel
satisfactory to it (which may be counsel to the Corporation), and the
advice of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with the advice of such
counsel.
(d) Documents. The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken or thing
suffered by it in reliance upon any notice, direction, consent,
certificate, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by
the proper parties.
(e) Certain Transactions. The Rights Agent, and its officers,
directors and employees, may become the owner of, or acquire any
interest in, any Right, with the same rights that it or they would have
were it not the Rights Agent hereunder, and, to the extent permitted by
applicable law, it or they may engage or be interested in any financial
or other transaction with the Corporation and may act on, or as a
depositary,
-8-
<PAGE>
trustee or agent for, any committee or body of holders of Rights,
Preferred Stock or Common Stock or other securities or obligations of
the Corporation as freely as if it were not the Rights Agent hereunder.
Nothing in this Agreement shall be deemed to prevent the Rights Agent
from acting as trustee under any indenture governing any security or
obligation.
(f) No Liability for Invalidity. The Rights Agent shall not be
under any responsibility with respect to the validity or sufficiency of
this Agreement or the execution and delivery hereof (except the due
execution and delivery hereof by the Rights Agent).
(g) No Responsibility for Recitals. The recitals contained
herein shall be taken as the statements of the Corporation, and the
Rights Agent assumes no responsibility hereby for the correctness of
the same.
(h) No Implied Obligations. The Rights Agent shall be
obligated to perform only such duties as are specifically set forth
herein and no implied duties or obligations shall be read into this
Agreement against the Rights Agent. The Rights Agent shall not be under
any obligation to take any action hereunder which may tend to involve
it in any expense or liability, the payment of which within a
reasonable time is not, in its reasonable opinion, assured to it. The
Rights Agent shall have no duty or responsibility in case of any
default by the Corporation in the performance of its covenants or
agreements contained herein or in the case of the receipt of any
written demand from a holder of a Right with respect to such default,
including, without limiting the generality of the foregoing, any duty
or responsibility to initiate or attempt to initiate any proceedings at
law or otherwise or, except as provided in Section 5.03 hereof, to make
any demand upon the Corporation.
SECTION 4.03. Compliance With Applicable Laws. The Rights
Agent agrees to comply with all applicable federal and state laws imposing
obligations on it in respect of the services rendered by it under this Agreement
and in connection with the Rights, including (but not limited to) the provisions
of United States federal income tax laws regarding information reporting and
backup withholding. The Rights Agent expressly assumes all liability for its
failure to comply with any such laws imposing obligations on it, including (but
not limited to) any liability for its failure to comply with any applicable
provisions of United States federal income tax laws regarding information
reporting and backup withholding.
SECTION 4.04. Resignation and Appointment of Successor.
(a) The Corporation agrees, for the benefit of the holders
from time to time of the Rights, that there shall at all times be a Rights Agent
hereunder until all the Rights issued hereunder have been exercised or have
expired in accordance with their terms, which Rights Agent shall be a bank or
trust company organized under the laws of the United States of America or one of
the states thereof, which is authorized under the laws of the jurisdiction of
its organization to exercise corporate trust powers, has a combined capital and
surplus of at least $50,000,000 and has an office or an agent's office in the
United States of America.
-9-
<PAGE>
(b) The Rights Agent may at any time resign as such agent by
giving written notice to the Corporation of such intention on its part,
specifying the date on which it desires such resignation to become effective;
provided that such date shall not be less than three months after the date on
which such notice is given, unless the Corporation agrees to accept such notice
less than three months prior to such date of effectiveness. The Corporation may
remove the Rights Agent at any time by giving written notice to the Rights Agent
of such removal, specifying the date on which it desires such removal to become
effective. Such resignation or removal shall take effect upon the appointment by
the Corporation, as hereinafter provided, of a successor Rights Agent (which
shall be a bank or trust company qualified as set forth in paragraph (a) of this
Section 4.04) and the acceptance of such appointment by such successor Rights
Agent. The obligation of the Corporation under paragraph (a) of this Section
4.02 shall continue to the extent set forth therein notwithstanding the
resignation or removal of the Rights Agent.
(c) If at any time the Rights Agent shall resign, or shall
cease to be qualified as set forth in paragraph (a) of this Section 4.04, or
shall be removed, or shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or shall file a petition seeking relief under any
applicable federal or state bankruptcy or insolvency law or similar law, or make
an assignment for the benefit of its creditors or consent to the appointment of
a receiver, conservator or custodian of all or any substantial part of its
property, or shall admit in writing its inability to pay or to meet its debts as
they mature, or if a receiver or custodian of it or of all or any substantial
part of its property shall be appointed, or if an order of any court shall be
entered for relief against it under the provisions of any applicable federal or
state bankruptcy or similar law, or if any public officer shall have taken
charge or control of the Rights Agent or of its property or affairs, for the
purpose of rehabilitation, conservation or liquidation, a successor Rights
Agent, qualified as set forth in paragraph (a) of this Section 4.04, shall be
appointed by the Corporation by an instrument in writing, filed with the
successor Rights Agent. Upon the appointment as herein provided of a successor
Rights Agent and acceptance by the latter of such appointment, the Rights Agent
so superseded shall cease to be Rights Agent under this Agreement.
(d) Any successor Rights Agent appointed under this Agreement
shall execute, acknowledge and deliver to its predecessor and to the Corporation
an instrument accepting such appointment, and thereupon such successor Rights
Agent, without any further act, deed or conveyance, shall become vested with all
the authority, rights, powers, trusts, immunities, duties and obligations of
such predecessor with like effect as if originally named as Rights Agent under
this Agreement, and such predecessor, upon payment of its charges and
disbursements then unpaid, shall thereupon become obligated to transfer, deliver
and pay over, and such successor Rights Agent shall be entitled to receive, all
monies, securities and other property on deposit with or held by such
predecessor, as Rights Agent under this Agreement.
(e) Any corporation into which the Rights Agent may be merged
or converted or any corporation with which the Rights Agent may be consolidated,
or any corporation resulting from any merger, conversion or consolidation to
which the Rights Agent shall be a party, or any corporation to which the Rights
Agent shall sell or otherwise transfer all or substantially all the assets and
business of the Rights Agent shall be the successor Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties to this Agreement, including, without limitation, any
successor to the Rights Agent
-10-
<PAGE>
first named above, provided in each case, that any such resulting Rights Agent
shall be qualified as set forth in paragraph (a) of this Section 4.04.
ARTICLE V
MISCELLANEOUS
SECTION 5.01. Amendments.
(a) This Agreement and the Rights may be amended by the
parties hereto by executing a supplemental rights agreement ("Supplemental
Agreement"), without the consent of the holder of any Right, for the purpose of
(i) curing any ambiguity, or curing, correcting or supplementing any defective
provision contained herein, or making any other provisions with respect to
matters or questions arising under this Agreement that are not inconsistent with
the provisions of this Agreement, (ii) evidencing the succession of another
corporation to the Corporation and the assumption by any such successor of the
covenants of the Corporation contained in this Rights Agreement and the Rights,
(iii) evidencing and providing for the acceptance of appointment by a successor
Rights Agent with respect to the Rights, (iv) adding to the covenants of the
Corporation for the benefit of the holders of the Rights or surrendering any
right or power conferred upon the Corporation under this Agreement, (v) amending
this Agreement and the Rights in any manner that the Corporation may deem to be
necessary or desirable; provided, however, that no amendment provided for in
clauses (i) through (v) which adversely affect the interests of the holders of
such Rights in any material respect may be made without the prior consent of the
holders of not fewer than 66 2/3% in number of the unexercised Rights.
(b) The Corporation and the Rights Agent may amend this
Agreement and the Rights by executing a Supplemental Agreement with the consent
of the holders of not fewer than 66-2/3% in number of the unexercised Rights
affected by such amendment, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the holders of the Rights under this
Agreement; provided, however, that, without the consent of each holder affected
thereby, no such amendment may be made that (i) changes the Rights so as to
reduce the number of shares of Common Stock to be issued upon exercise of the
Rights, (ii) amends the Term Date, or (iii) reduces the number of unexercised
Rights the consent of the holders of which is required for amendment of this
Agreement or the Rights.
SECTION 5.02. Merger, Consolidation, Sale, Transfer or
Conveyance. The Corporation may consolidate or merge with or into any other
corporation or sell, lease, transfer or convey all or substantially all of its
assets to any other corporation; provided that (i) either (x) the Corporation is
the continuing corporation or (y) the corporation (if other than the
Corporation) that is formed by or results from any such consolidation or merger
or that receives such assets is a corporation organized and existing under the
laws of the United States of America or a state thereof and such corporation
assumes the obligations of the Corporation with respect to the performance and
observance of all of the covenants and conditions of this Agreement to be
performed or observed by the Corporation, (ii) the Exercise Shares shall be
-11-
<PAGE>
shares of common stock of a public corporation, and if the continuing
corporation is not a public corporation, then either (x) the Exercise Shares
shall be shares of common stock of a public parent or (y) the value of the
Exercise Shares shall be paid in cash and (iii) the Corporation or such
successor corporation, as the case may be, must not immediately be in default
under this Agreement. If at any time there shall be any consolidation or merger
or any sale, lease, transfer, conveyance or other disposition of all or
substantially all of the assets of the Corporation, the successor or assuming
corporation shall succeed to and be substituted for the Corporation, with the
same effect as if it had been named herein as the Corporation; the Corporation
shall thereupon be relieved of any further obligation hereunder or under the
Rights, and, in the event of any such sale, lease, transfer, conveyance (other
than by way of lease) or other disposition, the Corporation as the predecessor
corporation may thereupon or at any time thereafter be dissolved, wound up or
liquidated.
SECTION 5.03. Notices and Demands to the Corporation and
Rights Agent. If the Rights Agent shall receive any notice or demand addressed
to the Corporation by the holder of a Right, the Rights Agent shall promptly
forward such notice or demand to the Corporation.
SECTION 5.04. Addresses. Any communications from the
Corporation to the Rights Agent with respect to this Agreement shall be
addressed to U.S. Bank National Association, 601 Second Avenue South, MPFP 3009,
Minneapolis, Minnesota 55402, Attention: Susan E. Lester, and any communications
from the Rights Agent to the Corporation with respect to this Agreement shall be
addressed to U.S. Bancorp, 601 Second Avenue South, MPFP 3007, Minneapolis,
Minnesota 55402, Attention: Lee R. Mitau (or such other address as shall be
specified in writing by the Rights Agent or by the Corporation, as the case may
be). The Corporation or the Rights Agent shall give notice to the holders of
Rights by mailing written notice by first class mail, postage prepaid, to such
holders as their names and addresses appear in the books and records of the
Rights Agent or on the register of the Preferred Stock.
SECTION 5.05. APPLICABLE LAW. THIS AGREEMENT AND EACH
RIGHT ISSUED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
SECTION 5.06. Obtaining of Governmental Approvals. The
Corporation shall from time to time take all action which may be necessary to
obtain and keep effective any and all permits, consents and approvals of
governmental agencies and authorities and securities acts filings under United
States federal and state laws, which may be or become necessary or appropriate
in connection with the issuance, sale, transfer and delivery of the Rights, the
exercise of the Rights, the issuance, sale, transfer and delivery of the Common
Stock to be issued upon exercise of Rights or upon the expiration of the period
during which the Rights are exercisable.
SECTION 5.07. Payment of Taxes. The Corporation will pay all
stamp and other duties, if any, to which, under the laws of the United States of
America, this Agreement or the original issuance of the Rights may be subject.
SECTION 5.08. Benefits of Rights Agreement. Nothing in this
Agreement expressed or implied and nothing that may be inferred from any of the
provisions hereof or thereof is intended, or shall be construed, to confer upon,
or give to, any person or corporation
-12-
<PAGE>
other than the Corporation, the Rights Agent and their respective successors and
assigns, and the holders of the Rights any right, remedy or claim under or by
reason of this Agreement or the Rights or of any covenant, condition,
stipulation, promise or agreement hereof or thereof; and all covenants,
conditions, stipulations, promises and agreements contained in this Agreement
shall be for the sole and exclusive benefit of the Corporation and the Rights
Agent and their respective successors and assigns and of the holders of the
Rights.
SECTION 5.09. Headings. The descriptive headings of the
several Articles and Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.
SECTION 5.10. Severability. If any provision in this Agreement
shall be or become invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions, or of such
provisions in any other jurisdiction, shall not in any way be affected or
impaired thereby.
SECTION 5.11. Counterparts. This Agreement may be executed in
any number of counterparts, each of which so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
SECTION 5.12. Definitions. For all purposes of this Rights
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(a) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted at the date of
such computation;
(b) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Rights Agreement; and
(c) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Rights Agreement as a whole and
not to any particular Article, Section or other subdivision.
SECTION 5.13. Inspection of Agreement. A copy of this
Agreement shall be available at all reasonable times at the principal corporate
trust office of the Rights Agent and at the office of the Corporation at 601
Second Avenue South, Minneapolis, Minnesota 55402, for inspection by any holder
of Rights.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
U.S. BANCORP
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------
Assistant Secretary
U.S. BANK NATIONAL ASSOCIATION
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------
Assistant Secretary
<PAGE>
Schedule 2.02(c)
a shall be an appropriate multiple calculated as a function of
[Sum [w(i) e(i)]] as follows:
1. The value of [Sum [w(i) e(i)]] shall be rounded down to
the nearest whole multiple of 1,000,000 ("Minimum
[Sum [w(i) e(i)]]").
2. If the Minimum [Sum [w(i) e(i)]] is a whole multiple of
5, the value of a shall be as indicated in the Calculation
Matrix below.
3. If the Minimum [Sum [w(i) e(i)]] is not a whole multiple
of 5, the value of a shall be determined by straight-line
interpolation between the two increments in the Calculation
Matrix closest in value to Minimum [Sum [w(i) e(i)]].
Calculation Matrix
<TABLE>
<CAPTION>
Minimum [Sum [w(i) e(i)]] [Sum [w(i) e(i)]]
(in millions) a (in millions) a
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$40 1.88 $145 2.37
$45 1.67 $150 2.41
$50 1.50 $155 2.45
$55 1.36 $160 2.47
$60 1.35 $165 2.48
$65 1.40 $170 2.50
$70 1.60 $175 2.52
$75 1.70 $180 2.53
$80 1.76 $185 2.55
$85 1.82 $190 2.57
$90 1.88 $195 2.58
$95 1.94 $200 2.60
$100 2.00 $205 2.61
$105 2.04 $210 2.62
$110 2.08 $215 2.63
$115 2.12 $220 2.64
$120 2.16 $225 2.66
$125 2.20 $230 2.67
$130 2.25 $235 2.68
$135 2.29 $240 2.69
$140 2.33 $245 2.70
</TABLE>
<PAGE>
EXHIBIT A
Example calculations of the "Early Termination Amount"
Example 1
<TABLE>
<CAPTION>
<S> <C>
- - Termination occurs during June 2000.
- - Calendar 1999 total consolidated earnings of
the business formerly conducted by Libra
Investments, Inc. $12.0
- - January-May 2000 total consolidated earnings
$8.0
- - Divided by the number of complete months 5
elapsed ---------
1.6
- - Multiplied by 12 months 12
--------
$19.2
</TABLE>
<TABLE>
<CAPTION>
(i) e(i) w(i) Weighted e(i)
--- ---- ---- -------------
<S> <C> <C> <C>
1999 $12.0 0.40 $ 4.8
2000 $19.2 0.60 $11.5
2001 $19.2 1.00 $19.2
2002 $19.2 1.00 $19.2
2003 $19.2 1.00 $19.2
----------
Sum of weighted e(i) $73.9
a - (determined pursuant to schedule 2.02(c)) 1.66 x
----------
$ 122.0
Early Termination Amount ($75.0)
----------
$47.0
----------
</TABLE>
<PAGE>
Example 2
<TABLE>
<CAPTION>
<S> <C>
- - Termination occurs during August 2001
- - Calendar 1999 total consolidated earnings of
the business formerly conducted by Libra
Investments, Inc. $12.0
- - Calendar 2000 total consolidated earnings
$18.0
- - August 2000-December 2000 earnings $8.0
- - January 2000-July 2001 earnings $12.0
---------
- - Last 12-month consolidated earnings prior to $20.0
Early Termination
</TABLE>
<TABLE>
<CAPTION>
(i) e(i) w(i) Weighted e(i)
--- ---- ---- -------------
<S> <C> <C> <C>
1999 $12.0 0.40 $ 4.8
2000 $18.0 0.60 $10.8
2001 $20.0 1.00 $20.0
2002 $20.0 1.00 $20.0
2003 $20.0 1.00 $20.0
----------
Sum of weighted e(i) $75.6
a - (determined pursuant to schedule 2.02(c)) 1.7 x
----------
$ 128.5
Early Termination Amount ($75.0)
----------
$53.5
----------
</TABLE>
<PAGE>
EXHIBIT 4.2
U.S. BANCORP
FORM OF INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT, dated as of December 30, 1998, among
U.S. Bancorp (the "Company"), and the prospective holders of shares of Common
Stock of the Company named on the signature pages hereof (the "Owners").
R E C I T A L S
WHEREAS, the parties hereto have entered into that certain
Agreement and Plan of Merger, dated September 3, 1998 (the "Merger Agreement"),
providing for, among other things, the transfer to the Owners of a number of
shares of the Company's Common Stock equal in the aggregate to the Merger
Consideration (as defined in Section 3.01 of the Merger Agreement);
WHEREAS, in connection with the Merger (as defined in Section
2.01 of the Merger Agreement) the Company will prepare and file a registration
statement in compliance with the Act with respect to the shares of the Company's
Common Stock to be received as Merger Consideration; and
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants, representations, warranties and agreements herein contained,
and in order to induce the Owners to enter into the Merger Agreement, the
parties hereto agree as follows:
1. Certain Definitions. As used in this Indemnification Agreement, the
following terms shall have the following respective meanings:
1.1 The term "Act" means the Securities Act of 1933, as amended.
1.2 The term "Common Stock" means the common stock, par value
$1.25 per share, of the Company or any securities into which such shares shall
have been changed or any securities resulting from any reclassification or
recapitalization of such shares.
1.3 The term "Holder" means any person owning or having the right
to acquire Registrable Securities and any other parties specified in Section
4.3.
1.4 The term "1934 Act" shall mean the Securities Exchange Act of
1934, as amended.
1.5 The term "Registrable Securities" means (i) Common Stock
issuable or issued as Merger Consideration in accordance with the Merger
Agreement, and (ii) any Common Stock of the Company issued as (or issuable upon
the conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, or in exchange for
or in replacement of the Shares (or the shares of Common Stock issued on
conversion thereof), excluding in all cases, however, any Shares sold or
transferred by a Holder in a transaction in which such Holder's rights under
this Indemnification Agreement are not assigned in accordance with the terms
hereof.
1.6 The term "SEC" shall mean the Securities and Exchange
Commission.
1.7 The term "Shares" shall mean the shares of the Company's
Common Stock received by the Owners as Merger Consideration.
<PAGE>
2. Indemnification. In the event any Registrable Securities are included
in a registration statement filed by the Company as contemplated by the Merger
Agreement:
2.1 Indemnification by the Company. To the fullest extent
permitted by law, the Company will indemnify and hold harmless each Holder, any
underwriter (as defined in the Act) for such Holder and each person, if any, who
controls such Holder or underwriter within the meaning of the Act or the 1934
Act, against any losses, claims, damages, or liabilities (joint or several) to
which they may become subject, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof, whether commenced or threatened)
arise out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"): (a) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including all documents incorporated therein by reference, any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, (b) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading, or (c) any violation or alleged violation by the Company
of the Act, the 1934 Act, any state securities law or any rule or regulation
promulgated under the Act, the 1934 Act or any state securities law, and the
Company will pay to each such Holder, underwriter or controlling person any
legal or other expenses reasonably incurred by them in connection with
investigating, defending or settling any such loss, claim, damage, liability, or
action, as such expenses are incurred; provided, however, that the indemnity
agreement contained in this Section 2.1 shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any case for
any such loss, claim, damage, liability, or action to the extent that it arises
out of or is based upon an untrue statement which occurs in reliance upon and in
conformity with written information furnished by any such Holder, underwriter or
controlling person to the Company expressly for use in connection with such
registration.
2.2 Indemnification by the Holders. To the extent permitted by
law, each Holder will indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the registration statement, each
person, if any, who controls the Company within the meaning of the Act, any
underwriter, any other Holder selling securities in such registration statement
and any controlling person of any such underwriter or other Holder, severally
but not jointly, against any losses, claims, damages, or liabilities (joint or
several) to which any of the foregoing persons may become subject, under the
Act, the 1934 Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof, whether commenced or
threatened) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by such Holder expressly for
use in connection with such registration and each such Holder will pay to any
person intended to be indemnified pursuant to this Section 2.2, any legal or
other expenses reasonably incurred by them, as such expenses are incurred, in
connection with investigating, defending or settling any such loss, claim,
damage, liability, or action; provided, however, that the indemnity agreement
contained in this Section 2.2 shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Holder, which consent shall not be unreasonably
withheld; provided further that in no event shall any indemnity by any Holder
under this Section 2.2 exceed the gross proceeds from the offering received by
such Holder.
2.3 Indemnification Procedure. Promptly after receipt by any
indemnified party under this Section 2 of notice of the commencement of any
action (including any governmental action) involving a claim referred to in
Section 2.1 or Section 2.2, such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 2,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with one counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel
<PAGE>
retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action shall not relieve such indemnifying party of any liability to
the indemnified party under this Section 2 except to the extent (and only to the
extent) the failure to deliver notice is materially prejudicial to its ability
to defend such action. Any omission to so deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 2. The indemnifying party
will not, without the prior written consent of each indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification may be
sought hereunder (whether or not such indemnified party or any person who
controls such indemnified party is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of each such indemnified party from all liability arising
out of such claim, action, suit or proceeding. Notwithstanding anything to the
contrary set forth herein, and without limiting any of the rights set forth
above, in any event any party will have the right to retain, at its own expense,
counsel with respect to the defense of a claim.
2.4 Contribution. If the indemnification provided for in this
Section 2 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage, action, or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such loss, liability,
claim, damage, action or expense in such proportion as is appropriate to reflect
the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the statements or omissions
that resulted in such loss, liability, claim, damage, action or expense as well
as any other relevant equitable considerations. The relative fault of the
indemnifying party and of the indemnified party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information, and opportunity to correct or
prevent such statement or omission. The parties hereto agree that it would not
be just and equitable if contributions pursuant to the Section 2.4 were to be
determined by pro rata or per capita allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in the first sentence of this Section 2.4.
2.5 Survival. The obligations of the Company and Holders under
this Section 2 shall survive the completion of any offering of Registrable
Securities in a registration statement.
3. Restrictions on Offers and Sales. Each Holder agrees to give, at any
time during the periods (i) from January 17, 1999, until the earnings release on
or about January 21, 1999 (the "Earnings Release Date"), and (ii) after the two
week period following the Earnings Release Date, written notice to the Company
not less than five (5) business days prior to its intention to sell Common Stock
pursuant to the registration statement and the applicable prospectus. Each
Holder agrees that, upon receipt of notice from the Company, such Holder will
not dispose of the Common Stock or deliver the prospectus related thereto until
such Holder receives copies of a supplemented or amended prospectus provided by
the Company, or until such Holder is advised in writing by the Company that the
use of the prospectus may be resumed, and has received from the Company copies
of any additional supplemental filings which are incorporated by reference in
the prospectus. If so directed by the Company, such Holder will deliver to the
Company all copies, other than permanent file copies, then in such Holder's
possession, of the prospectus covering such Common Stock current at the time of
receipt of such notice. If the Company does not respond to a Holder's notice
within the five-day period specified above, the Holder shall be permitted to
sell such Common Stock commencing on the fifth business day.
<PAGE>
4. Miscellaneous.
4.1 Governing Law. This Indemnification Agreement shall be
governed by, and interpreted in accordance with, the laws of the State of New
York applicable to contracts made and to be performed entirely within such
state.
4.2 Amendments and Waivers. Except as otherwise provided herein,
no modification, amendment or waiver of any provision of this Agreement will be
effective against the Company or any Holder, unless such modification, amendment
or waiver is approved in writing by the Company and Holders owning 66 2/3% of
the Registrable Securities; except that any modification, amendment or waiver to
this Agreement which materially, adversely and disproportionately affects less
than all of the Holders shall require the consent of each such Holder so
affected in order to be effective with respect to such Holder. The failure of
any party to enforce any of the provisions of this Agreement will in no way be
construed as a waiver of such provisions and will not affect the right of such
party thereafter to enforce each and every provision of this Agreement in
accordance with its terms.
4.3 Successors and Heirs. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will bind and inure to
the benefit of the respective successors and heirs of the parties hereto, as
well as their executors, administrators, guardians, conservators, trustees or
receivers in bankruptcy.
4.4 Notices. All notices requests and other communications
hereunder to a party shall be in writing and shall be deemed given (a) on the
date of delivery, if personally delivered or telecopied (with confirmation), (b)
on the first business day following the date of dispatch, if delivered by a
recognized next-day courier service, or (c) on the third business day following
the date of mailing, if mailed by registered or certified mail (return receipt
requested), in each case to such party at its address or telecopy number set
forth below or such other address or numbers as such party may specify by notice
to the parties hereto.
If to the Company, to:
U.S. Bancorp
601 Second Avenue South
Minneapolis, Minnesota 55402
Attention: Lee R. Mitau, Esq.
Facsimile: (612) 973-4333
With a copy to:
Mitchell S. Eitel, Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Facsimile: (212) 558-3588
If to a Holder, to:
His or her address as listed in the stock records of the Company
4.5 Counterparts. This agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this
Indemnification Agreement as of the date first above written.
Name:
U.S. BANCORP
By:
----------------------------------
Name:
Title:
<PAGE>
EXHIBIT 23.1
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in
Pre-Effective Amendment No. 1 to the Registration Statement (Form S-3
No. 333-67465) and related Prospectus of U.S. Bancorp for the registration of
900,000 shares of its common stock and to the incorporation by reference
therein of our report dated January 15, 1998, with respect to the consolidated
financial statements of U.S. Bancorp included in its Annual Report (Form 10-K)
for the year ended December 31, 1997, filed with the Securities and Exchange
Commission.
Minneapolis, Minnesota
December 28, 1998
/s/ Ernst & Young LLP
