As filed with the Security and Exchange Commission on June 13, 1997
Registration Nos. 333-27253 and 333-27253-01
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendement No. 1
to
Form S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
FIRST OF AMERICA BANK CORPORATION FIRST OF AMERICA CAPITAL TRUST I
(Exact name of Registrant as (Exact name of Registrant as
specified in its charter) specified
in its declaration of trust)
MICHIGAN DELAWARE
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
6712 6719
(Primary Standard Industrial (Primary Standard Industrial
Classification Code Number) Classification Code Number)
38-1971791 38-6685669
(I.R.S. Employer (I.R.S. Employer
Identification No.) Identification No.)
211 South Rose Street c/o First of America Bank Corp.
Kalamazoo, Michigan 49007 211 South Rose Street
(616) 376-9000 Kalamazoo, Michigan 49007
(616) 376-9000
(Address, including zip code, and telephone number, including area
code, of Registrants' principal executive offices)
Thomas W. Lambert Samuel G. Stone
Executive Vice President and Administrative Trustee
Chief Financial Officer First of America Capital Trust I
First of America Bank Corp. c/o First of America Bank Corp.
211 South Rose Street 211 South Rose Street
Kalamazoo, Michigan 49007 Kalamazoo, Michigan 49007
(616) 376-7002 (616) 376-7008
(Name, address, including zip code, and telephone number, including
area code, of agents for service)
Copies to:
David E. Riggs, Esq. Edward F. Petrosky, Esq.
Howard & Howard Attorneys, P.C. Brown & Wood LLP
107 W. Michigan Avenue, Suite 400 One World Trade Center
Kalamazoo, Michigan 49007-3956 New York, New York 10048-0557
Approximate Date of Commencement of Proposed Sale to the Public: As
soon as practicable after this Registration Statement becomes
effective.
If any of the securities being registered on this Form are to be
offered in connection with the formation of a holding company and
there is compliance with General Instruction G, check the following
box. __
The Registrants hereby amend this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states
that this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until
this Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed
with the Securities and Exchange Commission. These securities may not
be sold nor may offers to buy be accepted prior to the time the
registration statement becomes effective. This prospectus shall not
constitute an offer to sell or the solicitation of an offer to buy nor
shall there be any sale of these securities in any State in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED ___________________, 1997
<PAGE>
FIRST OF AMERICA CAPITAL TRUST I
OFFER TO EXCHANGE ITS
8.12% CAPITAL SECURITIES, SERIES B
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
8.12% CAPITAL SECURITIES, SERIES A
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
FIRST OF AMERICA BANK CORPORATION
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRES AT 5:00 P.M.,
NEW YORK CITY TIME, ON _______________________, 1997, UNLESS EXTENDED
First of America Capital Trust I, a trust formed under the laws
of the State of Delaware (the "Trust"), hereby offers, upon the terms
and subject to the conditions set forth in this Prospectus (as the
same may be amended or supplemented from time to time, the
"Prospectus") and in the accompanying Letter of Transmittal (which
together constitute the "Exchange Offer"), to exchange up to
$150,000,000 aggregate Liquidation Amount of its 8.12% Capital
Securities, Series B (the "New Capital Securities") which have been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to a Registration Statement (as defined
herein) of which this Prospectus constitutes a part, for a like
Liquidation Amount of its outstanding 8.12% Capital Securities,
Series A (the "Old Capital Securities"), of which $150,000,000
aggregate Liquidation Amount is outstanding. Pursuant to the Exchange
Offer, First of America Bank Corporation, a Michigan corporation (the
"Corporation"), is also offering to exchange (i) its guarantee of
payments of cash distributions and payments on liquidation of the
Trust or redemption of the New Capital Securities (the "New
Guarantee") for a like guarantee in respect of the Old Capital
Securities (the "Old Guarantee") and (ii) all of its 8.12% Junior
Subordinated Deferrable Interest Debentures due January 31, 2027,
Series B (the "New Junior Subordinated Debentures") for a like
aggregate principal amount of its 8.12% Junior Subordinated Deferrable
Interest Debentures due January 31, 2027, Series A (the "Old Junior
Subordinated Debentures"), which New Guarantee and New Junior
Subordinated Debentures have also been registered under the Securities
Act. The Old Capital Securities, the Old Guarantee and the Old Junior
Subordinated Debentures are collectively referred to herein as the
"Old Securities" and the New Capital Securities, the New Guarantee and
the New Junior Subordinated Debentures are collectively referred to
herein as the "New Securities."
The terms of the New Securities are identical in all material
respects to the respective terms of the Old Securities, except that
(i) the New Securities have been registered under the Securities Act
and therefore will not be subject to certain restrictions on transfer
applicable to the Old Securities, (ii) the New Capital Securities will
not contain the $100,000 minimum Liquidation Amount transfer
restriction, (iii) the New Capital Securities will not provide for any
increase in the Distribution rate thereon, (iv) the New Junior
Subordinated Debentures will not contain the $100,000 minimum
principal amount transfer restriction and (v) the New Junior
Subordinated Debentures will not provide for any increase in the
interest rate thereon. See "Description of New Capital Securities,"
"Description of New Junior Subordinated Debentures" and "Description
of Old Securities." The New Capital Securities are being offered for
exchange in order to satisfy certain obligations of the Corporation
and the Trust under the Registration Rights Agreement dated as of
January 28, 1997 (the "Registration Rights Agreement") among the
Corporation, the Trust and the Initial Purchasers (as defined herein).
In the event that the Exchange Offer is consummated, any Old Capital
Securities which remain outstanding after consummation of the Exchange
Offer and the New Capital Securities issued in the Exchange Offer will
vote together as a single class for purposes of determining whether
holders of the requisite percentage in outstanding Liquidation Amount
thereof have taken certain actions or exercised certain rights under
the Declaration (as defined herein). (Continued on the following
page)
This Prospectus and the Letter of Transmittal are first being
mailed to all holders of Old Capital Securities on ______, 1997.
See "Risk Factors" commencing on page __ for certain information
that should be considered by holders in deciding whether to tender Old
Capital Securities in the Exchange Offer.
_______________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
<PAGE>
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR AD-
EQUACY OF THIS PROSPECTUS. ANY REPRESENTATIONTO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is ____________, 1997.
The New Capital Securities and the Old Capital Securities
(collectively, the "Capital Securities") represent preferred
beneficial interests in the assets of the Trust. The Corporation is
the owner of all of the beneficial interests represented by the common
securities of the Trust (the "Common Securities", and together with
the Capital Securities, the "Trust Securities"). The Bank of New York
is the Property Trustee of the Trust. The Trust exists for the sole
purpose of issuing the Trust Securities and investing the proceeds
thereof in the Junior Subordinated Debentures (as defined herein).
The Junior Subordinated Debentures will mature on January 31, 2027
(the "Stated Maturity Date"). The Capital Securities will have a
preference over the Common Securities under certain circumstances with
respect to cash distributions and amounts payable on liquidation,
redemption or otherwise. See "Description of New Capital
Securities -- Subordination of Common Securities."
As used herein, (i) the "Indenture" means the Indenture, dated as
of January 28, 1997, as amended and supplemented from time to time,
between the Corporation and The Bank of New York, as debenture trustee
(the "Debenture Trustee"), relating to the Junior Subordinated
Debentures, (ii) the "Declaration" means the Amended and Restated
Declaration of Trust relating to the Trust among the Corporation, as
sponsor (in such capacity, "Sponsor"), The Bank of New York, as
property trustee (the "Property Trustee"), The Bank of New York,
Delaware, as Delaware trustee (the "Delaware Trustee"), and the three
individual Administrative Trustees named therein (the "Administrative
Trustees", and together with the Property Trustee and Delaware
Trustee, the "Issuer Trustees"), (iii) the "Guarantee" means the
Guarantee Agreement relating to the Capital Securities between the
Corporation and The Bank of New York, as guarantee trustee (the
"Guarantee Trustee"), and (iv) the "Common Guarantee" means the Common
Securities Guarantee Agreement of the Corporation relating to the
Common Securities. In addition, as the context may require,
(i) "Junior Subordinated Debentures" includes the Old Junior
Subordinated Debentures and the New Junior Subordinated Debentures,
and (ii) "Guarantee" includes the Old Guarantee and the New Guarantee.
Holders of the New Capital Securities will be entitled to receive
cumulative cash distributions arising from the payment of interest on
the Junior Subordinated Debentures, accumulating from January 28, 1997
and payable semi-annually in arrears on January 31 and July 31 of each
year, commencing July 31, 1997, at the annual rate of 8.12% of the
Liquidation Amount of $1,000 per New Capital Security
("Distributions"). So long as no Debenture Event of Default (as
defined herein) has occurred and is continuing, the Corporation will
have the right to defer payments of interest on the Junior
Subordinated Debentures at any time and from time to time for a period
not exceeding 10 consecutive semi-annual periods with respect to each
deferral period (each, an "Extension Period"), provided that no
Extension Period may extend beyond the Stated Maturity Date. Upon the
termination of any such Extension Period and the payment of all
amounts then due, the Corporation may elect to begin a new Extension
Period, subject to the requirements set forth herein. If and for so
long as interest payments on the Junior Subordinated Debentures are so
deferred, Distributions on the Trust Securities will also be deferred
and the Corporation will not be permitted, subject to certain
exceptions described herein, to declare or pay any cash distributions
with respect to, or redeem or purchase, any of the Corporation's
capital stock (which includes common and preferred stock) or to make
any payment with respect to debt securities of the Corporation that
rank equally with or junior to the Junior Subordinated Debentures.
During an Extension Period, interest on the Junior Subordinated
Debentures will continue to accrue (and the amount of Distributions to
which holders of the Trust Securities are entitled will continue to
accumulate) at the rate of 8.12% per annum, compounded semi-annually,
and holders of Trust Securities will be required to accrue interest
income for United States federal income tax purposes. See
"Description of New Junior Subordinated Debentures -- Option to Extend
Interest Payment Date" and "Certain Federal Income Tax Consequences --
Interest Income and Original Issue Discount."
The Corporation, through the Common Guarantee, the Guarantee, the
Declaration, the Junior Subordinated Debentures and the Indenture
(each as defined herein), taken together, has guaranteed or will
guarantee, as the case may be, fully, irrevocably and unconditionally
all of the Trust's obligations under the Trust Securities. See
"Relationship Among the New Capital Securities, the New Junior
<PAGE>
Subordinated Debentures and the New Guarantee -- Full and
Unconditional Guarantee." The Old Guarantee and the Common Guarantee
currently guarantee, and the New Guarantee will guarantee, payments of
Distributions and payments on liquidation of the Trust or redemption
of the Trust Securities, but in each case only to the extent that the
Trust holds funds on hand legally available therefor and has failed to
make such payments, as described herein. See "Description of the New
Guarantee." If the Corporation fails to make a required payment on
the Junior Subordinated Debentures, the Trust will not have sufficient
funds to make the related payments, including Distributions, on the
Trust Securities. The Guarantee and the Common Guarantee will not
cover any such payment when the Trust does not have sufficient funds
on hand legally available therefor. In such event, a holder of
Capital Securities may institute a legal proceeding directly against
the Corporation to enforce its rights in respect of such payment. See
"Description of New Junior Subordinated Debentures -- Enforcement of
Certain Rights by Holders of Capital Securities." The obligations of
the Corporation under the Guarantee, the Common Guarantee and the
Junior Subordinated Debentures will be unsecured and will rank
subordinate and junior in right of payment to all Senior Indebtedness
(as defined in "Description of Junior Subordinated Debentures --
Subordination"), which totaled $360 million at March 31, 1997.
The Trust Securities will be subject to mandatory redemption in a
Like Amount (as defined herein), (i) in whole but not in part, on the
Stated Maturity Date upon repayment of the Junior Subordinated
Debentures at a redemption price equal to the principal amount of,
plus accrued and unpaid interest on, the Junior Subordinated
Debentures (the "Maturity Redemption Price"), (ii) in whole but not in
part, at any time prior to January 31, 2007, at the same time as the
optional prepayment of the Junior Subordinated Debentures, upon the
occurrence and continuation of a Special Event (as defined herein) at
a redemption price equal to the Special Event Prepayment Price (as
defined herein) (the "Special Event Redemption Price"), and (iii) in
whole or in part, on or after January 31, 2007, at the same time as
the optional prepayment by the Corporation of the Junior Subordinated
Debentures, at a redemption price equal to the Optional Prepayment
Price (as defined herein) (the "Optional Redemption Price"). Any of
the Maturity Redemption Price, the Special Event Redemption Price and
the Optional Redemption Price may be referred to herein as the
"Redemption Price." See "Description of New Capital Securities --
Redemption."
Subject to the Corporation having received prior approval of the
Board of Governors of the Federal Reserve System (the "Federal
Reserve") if then required under applicable capital guidelines or
policies of the Federal Reserve, the Junior Subordinated Debentures
will be prepayable prior to the Stated Maturity Date at the option of
the Corporation (i) on or after January 31, 2007, in whole or in part,
at a prepayment price (the "Optional Prepayment Price") equal to
104.060% of the principal amount thereof on January 31, 2007,
declining ratably on each January 31 thereafter to 100% on or after
January 31, 2017, plus accrued and unpaid interest thereon to the date
of prepayment, or (ii) prior to January 31, 2007, in whole but not in
part, upon the occurrence and continuation of a Special Event, at a
prepayment price (the "Special Event Prepayment Price") equal to the
greater of (a) 100% of the principal amount thereof or (b) the sum, as
determined by a Quotation Agent (as defined herein), of the present
values of the principal amount and premium payable with respect to an
optional prepayment of the Junior Subordinated Debentures on
January 31, 2007, together with scheduled payments of interest on the
Junior Subordinated Debentures from the prepayment date to and
including January 31, 2007, discounted to the prepayment date on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Adjusted Treasury Rate (as defined herein) plus, in
each case, accrued and unpaid interest thereon to the date of
prepayment. Either of the Optional Prepayment Price or the Special
Event Prepayment Price may be referred to herein as the "Prepayment
Price." See "Description of New Junior Subordinated Debentures --
Optional Prepayment" and "--Special Event Prepayment."
The Corporation will have the right at any time to terminate the
Trust and cause a Like Amount of the Junior Subordinated Debentures to
be distributed to the holders of the Trust Securities in liquidation
of the Trust, subject to (i) the Corporation having received an
opinion of counsel to the effect that such distribution will not be a
taxable event to holders of the Capital Securities and (ii) the prior
approval of the Federal Reserve if then required under applicable
capital guidelines or policies of the Federal Reserve. Unless the
Junior Subordinated Debentures are distributed to the holders of the
Trust Securities, in the event of a liquidation of the Trust as
described herein, after satisfaction of liabilities to creditors of
the Trust as required by applicable law, the holders of the Capital
Securities generally will be entitled to receive a Liquidation Amount
<PAGE>
of $1,000 per Capital Security plus accumulated and unpaid
Distributions thereon to the date of payment. See "Description of New
Capital Securities -- Liquidation of the Trust and Distribution of New
Junior Subordinated Debentures" and "Certain Federal Income Tax
Consequences -- Receipt of New Junior Subordinated Debentures or Cash
Upon Liquidation of the Trust."
_________________
The Trust is making the Exchange Offer of the New Capital
Securities in reliance on the position of the staff of the Division of
Corporation Finance of the Securities and Exchange Commission (the
"Commission") as set forth in certain interpretive letters addressed
to third parties in other transactions. However, neither the
Corporation nor the Trust has sought its own interpretive letter and
there can be no assurance that the staff of the Division of
Corporation Finance of the Commission would make a similar
determination with respect to the Exchange Offer as it has in such
interpretive letters to third parties. Based on these interpretations
by the staff of the Division of Corporation Finance of the Commission,
and subject to the two immediately following sentences, the
Corporation and the Trust believe that New Capital Securities issued
pursuant to this Exchange Offer in exchange for Old Capital Securities
may be offered for resale, resold and otherwise transferred by a
holder thereof (other than a holder who is a broker-dealer) without
further compliance with the registration and prospectus delivery
requirements of the Securities Act, provided that such New Capital
Securities are acquired in the ordinary course of such holder's
business and that such holder is not participating, and has no
arrangement or understanding with any person to participate, in a
distribution (within the meaning of the Securities Act) of such New
Capital Securities. However, any holder of Old Capital Securities who
is an "affiliate", as such term is defined in Rule 405 under the
Securities Act (an "Affiliate"), of the Corporation or the Trust or
who intends to participate in the Exchange Offer for the purpose of
distributing New Capital Securities, or any broker-dealer who
purchased Old Capital Securities from the Trust for resale pursuant to
Rule 144A under the Securities Act ("Rule 144A") or any other
available exemption under the Securities Act, (a) will not be able to
rely on the interpretations of the staff of the Division of
Corporation Finance of the Commission set forth in the above-mentioned
interpretive letters, (b) will not be permitted or entitled to tender
such Old Capital Securities in the Exchange Offer and (c) must comply
with the registration and prospectus delivery requirements of the
Securities Act in connection with any sale or other transfer of such
Old Capital Securities unless such sale is made pursuant to an
exemption from such requirements. In addition, as described below, if
any broker-dealer holds Old Capital Securities acquired for its own
account as a result of market-making or other trading activities and
exchanges such Old Capital Securities for New Capital Securities, then
such broker-dealer must deliver a prospectus meeting the requirements
of the Securities Act in connection with any resales of such New
Capital Securities.
Each holder of Old Capital Securities who wishes to exchange Old
Capital Securities for New Capital Securities in the Exchange Offer
will be required to represent that (i) it is not an Affiliate of the
Corporation or the Trust, (ii) any New Capital Securities to be
received by it are being acquired in the ordinary course of its
business, (iii) it has no arrangement or understanding with any person
to participate in a distribution (within the meaning of the Securities
Act) of such New Capital Securities, and (iv) if such holder is not a
broker-dealer, such holder is not engaged in, and does not intend to
engage in, a distribution (within the meaning of the Securities Act)
of such New Capital Securities. In addition, the Corporation and the
Trust may require such holder, as a condition to such holder's
eligibility to participate in the Exchange Offer, to furnish to the
Corporation and the Trust (or an agent thereof) in writing information
as to the number of "beneficial owners" (within the meaning of Rule
13d-3 under the Securities Exchange Act of 1934, as amended) on behalf
of whom such holder holds the Capital Securities to be exchanged in
the Exchange Offer. Each broker-dealer that receives New Capital
Securities for its own account pursuant to the Exchange Offer must
acknowledge that it acquired the Old Capital Securities for its own
account as the result of market-making activities or other trading
activities and must agree that it will deliver a prospectus meeting
the requirements of the Securities Act in connection with any resale
of such New Capital Securities. The Letter of Transmittal states that
by so acknowledging and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. Based on the position taken by the
staff of the Division of Corporation Finance of the Commission in the
interpretive letters referred to above, the Corporation and the Trust
believe that broker-dealers who acquired Old Capital Securities for
<PAGE>
their own accounts, as a result of market-making activities or other
trading activities ("Participating Broker-Dealers"), may fulfill their
prospectus delivery requirements with respect to the New Capital
Securities received upon exchange of such Old Capital Securities
(other than Old Capital Securities which represent an unsold allotment
from the original sale of the Old Capital Securities) with a
prospectus meeting the requirements of the Securities Act, which may
be the prospectus prepared for an exchange offer so long as it
contains a description of the plan of distribution with respect to the
resale of such New Capital Securities. Accordingly, this Prospectus,
as it may be amended or supplemented from time to time, may be used by
a Participating Broker-Dealer during the period referred to below in
connection with resales of New Capital Securities received in exchange
for Old Capital Securities where such Old Capital Securities were
acquired by such Participating Broker-Dealer for its own account as a
result of market-making or other trading activities. Subject to
certain provisions set forth in the Registration Rights Agreement, the
Corporation and the Trust have agreed that this Prospectus, as it may
be amended or supplemented from time to time, may be used by a
Participating Broker-Dealer in connection with resales of such New
Capital Securities for a period ending 90-days after the Expiration
Date (as defined herein) (subject to extension under certain limited
circumstances described below) or, if earlier, when all such New
Capital Securities have been disposed of by such Participating Broker-
Dealer. See "Plan of Distribution." However, a Participating Broker-
Dealer who intends to use this Prospectus in connection with the
resale of New Capital Securities received in exchange for Old Capital
Securities pursuant to the Exchange Offer must notify the Corporation
or the Trust, or cause the Corporation or the Trust to be notified, on
or prior to the Expiration Date, that it is a Participating Broker-
Dealer. Such notice may be given in the space provided for that
purpose in the Letter of Transmittal or may be delivered to the
Exchange Agent at one of the addresses set forth herein under "The
Exchange Offer -- Exchange Agent." Any Participating Broker-Dealer
who is an Affiliate of the Corporation or the Trust may not rely on
such interpretive letters and must comply with the registration and
prospectus delivery requirements of the Securities Act in connection
with any resale transaction. See "The Exchange Offer -- Resales of
New Capital Securities."
In that regard, each Participating Broker-Dealer who surrenders Old
Capital Securities pursuant to the Exchange Offer will be deemed to
have agreed, by execution of the Letter of Transmittal, that, upon
receipt of notice from the Corporation or the Trust of the occurrence
of any event or the discovery of any fact which makes any statement
contained or incorporated by reference in this Prospectus untrue in
any material respect or which causes this Prospectus to omit to state
a material fact necessary in order to make the statements contained or
incorporated by reference herein, in light of the circumstances under
which they were made, not misleading or of the occurrence of certain
other events specified in the Registration Rights Agreement, such
Participating Broker-Dealer will suspend the sale of New Capital
Securities (or the New Guarantee or the New Junior Subordinated
Debentures, as applicable) pursuant to this Prospectus until the
Corporation or the Trust has amended or supplemented this Prospectus
to correct such misstatement or omission and has furnished copies of
the amended or supplemented Prospectus to such Participating Broker-
Dealer or the Corporation or the Trust has given notice that the sale
of the New Capital Securities (or the New Guarantee or the New Junior
Subordinated Debentures, as applicable) may be resumed, as the case
may be. If the Corporation or the Trust gives such notice to suspend
the sale of the New Capital Securities (or the New Guarantee or the
New Junior Subordinated Debentures, as applicable), it shall extend
the 90-day period referred to above during which Participating Broker-
Dealers are entitled to use this Prospectus in connection with the
resale of New Capital Securities by the number of days during the
period from and including the date of the giving of such notice to and
including the date when Participating Broker-Dealers shall have
received copies of the amended or supplemented Prospectus necessary to
permit resales of the New Capital Securities or to and including the
date on which the Corporation or the Trust has given notice that the
sale of New Capital Securities (or the New Guarantee or the New Junior
Subordinated Debentures, as applicable) may be resumed, as the case
may be.
____________________
Prior to the Exchange Offer, there has been only a limited
secondary market and no public market for the Old Capital Securities.
The New Capital Securities will be a new issue of securities for which
there currently is no market. Although the Initial Purchasers (as
defined in the Registration Rights Agreement) have informed the
Corporation and the Trust that they each currently intend to make a
market in the New Capital Securities, they are not obligated to do so,
and any such market making may be discontinued at any time without
<PAGE>
notice. Accordingly, there can be no assurance as to the development
or liquidity of any market for the New Capital Securities. The
Corporation and the Trust currently do not intend to apply for listing
of the New Capital Securities on any securities exchange or for
inclusion in the Nasdaq Stock Market, the electronic securities market
operated by the National Association of Securities Dealers, Inc.
("Nasdaq").
Any Old Capital Securities not tendered and accepted in the
Exchange Offer will remain outstanding and will be entitled to all the
same rights and will be subject to the same limitations applicable
thereto under the Trust Agreement (except for those rights which
terminate upon consummation of the Exchange Offer). Following
consummation of the Exchange Offer, the holders of Old Capital
Securities will continue to be subject to all of the existing
restrictions upon transfer thereof and neither the Corporation nor the
Trust will have any further obligation to such holders (other than
under certain limited circumstances) to provide for registration under
the Securities Act of the Old Capital Securities held by them. To the
extent that Old Capital Securities are tendered and accepted in the
Exchange Offer, a holder's ability to sell untendered Old Capital
Securities could be adversely affected. See "Risk Factors --
Consequences of a Failure to Exchange Old Capital Securities."
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO
READ THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY
BEFORE DECIDING WHETHER TO TENDER THEIR OLD CAPITAL SECURITIES
PURSUANT TO THE EXCHANGE OFFER.
Old Capital Securities may be tendered for exchange on or prior to
5:00 p.m., New York City time, on , 1997 (such time on such
date being hereinafter called the "Expiration Date"), unless the
Exchange Offer is extended by the Corporation or the Trust (in which
case the term "Expiration Date" shall mean the latest date and time to
which the Exchange Offer is extended). Tenders of Old Capital
Securities may be withdrawn at any time on or prior to the Expiration
Date. The Exchange Offer is not conditioned upon any minimum
Liquidation Amount of Old Capital Securities being tendered for
exchange. However, the Exchange Offer is subject to certain events
and conditions which may be waived by the Corporation or the Trust and
to the terms and provisions of the Registration Rights Agreement. Old
Capital Securities may be tendered in whole or in part having an
aggregate Liquidation Amount of not less than $100,000 (100 Capital
Securities) or any integral multiple of $1,000 Liquidation Amount (one
Capital Security) in excess thereof. The Corporation has agreed to
pay all expenses of the Exchange Offer. See "The Exchange Offer --
Fees and Expenses." Holders of the Old Capital Securities whose Old
Capital Securities are accepted for exchange will not receive
Distributions on such Old Capital Securities and will be deemed to
have waived the right to receive any Distributions on such Old Capital
Securities accumulated from and including January 28, 1997.
Accordingly, holders of New Capital Securities as of the record date
for the payment of Distributions on July 31, 1997, will be entitled to
receive Distributions accumulated from and including January 28, 1997.
See "The Exchange Offer -- Distributions on New Capital Securities."
Neither the Corporation nor the Trust will receive any cash
proceeds from the issuance of the New Capital Securities offered
hereby. No dealer-manager is being used in connection with this
Exchange Offer. See "Use of Proceeds" and "Plan of Distribution."
No dealer, salesperson or other individual has been authorized to
give any information or to make any representations other than those
contained or incorporated by reference in this prospectus in
connection with this exchange offer and, if given or made, such
information or representations must not be relied upon as having been
authorized by the corporation or the Trust. Neither the delivery of
this prospectus nor any exchange made pursuant hereto shall under any
circumstance create an implication that there has been no change in
the affairs of the corporation or the Trust since the date hereof.
This prospectus does not constitute an offer or a solicitation by
anyone in any jurisdiction in which such offer or solicitation is not
authorized or in which the person making such offer or solicitation is
not qualified to do so or anyone to whom it is unlawful to make such
offer or solicitation.
_____________________
<PAGE>
TABLE OF CONTENTS
AVAILABLE INFORMATION 8
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 8
SUMMARY 10
RISK FACTORS 18
FIRST OF AMERICA BANK CORPORATION 22
FIRST OF AMERICA CAPITAL TRUST 23
USE OF PROCEEDS 23
RATIOS OF EARNINGS TO FIXED CHARGES 24
CAPITALIZATION 24
SUMMARY FINANCIAL DATA 25
THE EXCHANGE OFFER 27
DESCRIPTION OF NEW CAPITAL SECURITIES 35
DESCRIPTION OF NEW JUNIOR SUBORDINATED DEBENTURES 44
DESCRIPTION OF THE NEW GUARANTEE 52
DESCRIPTION OF THE OLD SECURITIES 54
RELATIONSHIP AMONG THE NEW CAPITAL SECURITIES, THE NEW
JUNIOR SUBORDINATED DEBENTURES AND THE NEW GUARANTEE 55
CERTAIN FEDERAL INCOME TAX CONSEQUENCES 56
ERISA CONSIDERATIONS 59
PLAN OF DISTRIBUTION 60
LEGAL MATTERS 61
INDEPENDANT PUBLIC ACCOUNTANTS 61
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
in accordance therewith, files reports, proxy statements and other
information with the Commission. Reports, proxy statements and other
information concerning the Corporation can be inspected and copied at
prescribed rates at the Commission's Public Reference Room, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, as well as the
following Regional Offices of the Commission: 7 World Trade Center,
Suite 1300, New York, New York 10048; and 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material may be
obtained by mail from the Commission's Public Reference Section,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. If available, such reports and other information
may also be accessed through the Commission's electronic data
gathering, analysis and retrieval system ("EDGAR") via electronic
means, including the Commission's web site on the Internet
(http://www.sec.gov). In addition, such reports, proxy statements and
other information concerning the Corporation may also be inspected at
the offices of the New York Stock Exchange, Inc., 20 Broad Street,
New York, New York 10005, the exchange on which the common stock of
the Corporation trades.
No separate financial statements of the Trust have been included
herein. The Corporation and the Trust do not consider that such
financial statements would be material to holders of the Capital
Securities because the Trust is a newly-formed special purpose entity,
has no operating history or independent operations and is not engaged
in and does not propose to engage in any activities other than holding
as trust assets the Junior Subordinated Debentures, issuing Trust
Securities and engaging in incidental activities. See "First of
America Capital Trust I," "Description of New Capital Securities,"
"Description of New Junior Subordinated Debentures" and "Description
of the New Guarantee." In addition, the Corporation does not expect
<PAGE>
that the Trust will file reports, proxy statements and other
information under the Exchange Act with the Commission.
This Prospectus constitutes a part of a registration statement on
Form S-4 (the "Registration Statement") filed by the Corporation and
the Trust with the Commission under the Securities Act. This
Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission, and
reference is hereby made to the Registration Statement and to the
exhibits relating thereto for further information with respect to the
Corporation, the Trust and the New Securities. Any statements
contained herein concerning the provisions of any document are not
necessarily complete, and, in each instance, reference is made to the
copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement
is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the
Corporation (File No. 1-10534) pursuant to Section 13 of the Exchange
Act are incorporated by reference in this Prospectus:
(a) Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
(b) Current Reports on Form 8-K dated January 15, 1997 and
January 30, 1997; and
(c) Quarterly Report on Form 10-Q for the quarter ended March
31, 1997.
All documents filed by the Corporation pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the Exchange Offer shall be
deemed to be incorporated by reference in this Prospectus and to be a
part hereof from the date of filing of such documents. Any statement
contained in this Prospectus or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus or any supplement hereto
to the extent that a statement contained herein or therein (or in any
subsequently filed document that also is or is deemed to be
incorporated by reference herein or therein) modifies or supersedes
such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
As used herein, the terms "Prospectus" and "herein" mean this
Prospectus, including the documents incorporated or deemed to be
incorporated herein by reference, as the same may be amended,
supplemented or otherwise modified from time to time. Statements
contained in this Prospectus as to the contents of any contract or
other document referred to herein do not purport to be complete, and
where reference is made to the particular provisions of such contract
or other document, such provisions are qualified in all respects by
reference to all of the provisions of such contract or other document.
This Prospectus incorporates documents by reference which are not
presented herein or delivered herewith. These documents are available
upon request from Jennifer D. Cox, Senior Vice President - Accounting
Division, First of America Bank Corporation, 211 South Rose Street,
Kalamazoo, Michigan 49007; Telephone No. (616) 376-7115.
SUMMARY
The following summary is qualified in its entirety by the more
detailed information appearing elsewhere in this Prospectus.
First of America Bank Corporation
The Corporation is a Michigan corporation and a bank holding
company registered under the Bank Holding Company Act of 1956, as
amended. It is also a savings and loan holding company. Its
principal activity consists of owning and supervising four affiliate
banks (the "Banks"), which operate general commercial banking
businesses from 600 banking offices and facilities located in
Michigan, Florida, Illinois and Indiana. The Corporation also has
divisions and non-banking subsidiaries which provide mortgage, trust,
data processing, pension consulting, revolving credit, securities
brokerage, insurance and investment advisory services. At March 31,
1997, the Corporation had total assets of $21.5 billion, deposits were
<PAGE>
$17.1 billion and shareholders' equity was $1.7 billion. Based on
total assets, the Corporation was the second largest bank holding
company in Michigan and the 32nd largest bank holding company in the
United States.
The Corporation's affiliate financial institutions offer a broad
range of lending, depository and related financial services to
individual, commercial, industrial, financial and governmental
customers, including demand, savings and time deposits, secured and
unsecured loans, lease financing, letters of credit, money transfers,
corporate and personal trust services, cash management and other
financial services.
The address of the Corporation's principal executive offices is 211
South Rose Street, Kalamazoo, Michigan 49007; Telephone No. (616) 376-
9000.
First of America Capital Trust I
The Trust is a statutory business trust formed under Delaware law
pursuant to (i) an original declaration of trust executed by the
Corporation, as Sponsor, and The Bank of New York (Delaware), as
Delaware Trustee, and the three individual Administrative Trustees,
and (ii) the filing of a Certificate of Trust with the Delaware
Secretary of State on January 16, 1997. The Trust's business and
affairs are conducted pursuant to an Amended and Restated Declaration
of Trust by the Issuer Trustees: The Bank of New York, as Property
Trustee, The Bank of New York (Delaware), as Delaware Trustee, and the
three individual Administrative Trustees who are employees or officers
of or affiliated with the Corporation. The Trust exists for the
exclusive purposes of (i) issuing and selling the Trust Securities,
(ii) using the proceeds from the sale of the Trust Securities to
acquire the Junior Subordinated Debentures issued by the Corporation
and (iii) engaging in only those other activities necessary, advisable
or incidental thereto (such as registering the transfer of the Trust
Securities). Accordingly, the Junior Subordinated Debentures will be
the sole assets of the Trust, and payments under the Junior
Subordinated Debentures will be the sole revenue of the Trust. All of
the Common Securities are owned by the Corporation.
The address of the Trust's principal executive offices is c/o First
of America Bank Corporation, 211 South Rose Street, Kalamazoo,
Michigan 49007; Telephone No. (616) 376-9000.
The Exchange Offer
The Exchange Offer Up to $150,000,000 aggregate Liquidation
Amount of New Capital Securities are being
offered in exchange for a like aggregate
Liquidation Amount of Old Capital Securities.
Old Capital Securities may be tendered for
exchange in whole or in part in a Liquidation
Amount of $100,000 (100 Capital Securities)
or any integral multiple of $1,000 (one
Capital Security) in excess thereof. The
Corporation and the Trust are making the
Exchange Offer in order to satisfy their
obligations under the Registration Rights
Agreement relating to the Old Capital
Securities. For a description of the
procedures for tendering Old Capital
Securities, see "The Exchange Offer --
Procedures for Tendering Old Capital
Securities."
Expiration Date 5:00 p.m., New York City time, on _________,
1997, unless the Exchange Offer is extended
by the Corporation or the Trust (in which
case the Expiration Date will be the latest
date and time to which the Exchange Offer is
extended). See "The Exchange Offer -- Terms
of the Exchange Offer."
Conditions to the
Exchange Offer The Exchange Offer is subject to certain
conditions, which may be waived by the
Corporation and the Trust in their sole
discretion. The Exchange Offer is not
conditioned upon any minimum Liquidation
Amount of Old Capital Securities being
tendered. See "The Exchange Offer --
Conditions to the Exchange Offer."
<PAGE>
Offer The Corporation and the Trust reserve the
right in their sole and absolute discretion,
subject to applicable law, at any time and
from time to time, (i) to delay the
acceptance of the Old Capital Securities for
exchange, (ii) to terminate the Exchange
Offer if certain specified conditions have
not been satisfied, (iii) to extend the
Expiration Date of the Exchange Offer and
retain all Old Capital Securities tendered
pursuant to the Exchange Offer, subject,
however, to the right of holders of Old
Capital Securities to withdraw their tendered
Old Capital Securities, or (iv) to waive any
condition or otherwise amend the terms of the
Exchange Offer in any respect. See "The
Exchange Offer -- Terms of the Exchange
Offer."
Withdrawal Rights Tenders of Old Capital Securities may be
withdrawn at any time on or prior to the
Expiration Date by delivering a written
notice of such withdrawal to the Exchange
Agent in conformity with certain procedures
set forth below under "The Exchange Offer --
Withdrawal Rights."
Procedures for Tendering
Old Capital Securities Tendering holders of Old Capital Securities
must complete and sign a Letter of
Transmittal in accordance with the
instructions contained therein and forward
the same by mail, facsimile or hand delivery,
together with any other required documents,
to the Exchange Agent, either with the Old
Capital Securities to be tendered or in
compliance with the specified procedures for
guaranteed delivery of Old Capital
Securities. Certain brokers, dealers,
commercial banks, trust companies and other
nominees may also effect tenders by book-
entry transfer. Holders of Old Capital
Securities registered in the name of a
broker, dealer, commercial bank, trust
company or other nominee are urged to contact
such person promptly if they wish to tender
Old Capital Securities pursuant to the
Exchange Offer. See "The Exchange Offer --
Procedures for Tendering Old Capital
Securities."
Letters of Transmittal and certificates
representing Old Capital Securities should not be
sent to the Corporation or the Trust. Such
documents should only be sent to the Exchange
Agent.
Resales of New
Capital Securities The Corporation and the Trust are making the
Exchange Offer in reliance on the position of
the staff of the Division of Corporation
Finance of the Commission as set forth in
certain interpretive letters addressed to
third parties in other transactions.
However, neither the Corporation nor the
Trust has sought its own interpretive letter
and there can be no assurance that the staff
of the Division of Corporation Finance of the
Commission would make a similar determination
with respect to the Exchange Offer as it has
in such interpretive letters to third
parties. Based on these interpretations by
the staff of the Division of Corporation
Finance of the Commission, and subject to the
two immediately following sentences, the
Corporation and the Trust believe that New
Capital Securities issued pursuant to this
Exchange Offer in exchange for Old Capital
Securities may be offered for resale, resold
and otherwise transferred by a holder thereof
(other than a holder who is a broker-dealer)
without further compliance with the
registration and prospectus delivery
requirements of the Securities Act, provided
<PAGE>
that such New Capital Securities are acquired
in the ordinary course of such holder's
business and that such holder is not
participating, and has no arrangement or
understanding with any person to participate,
in a distribution (within the meaning of the
Securities Act) of such New Capital
Securities. However, any holder of Old
Capital Securities who is an Affiliate of the
Corporation or the Trust or who intends to
participate in the Exchange Offer for the
purpose of distributing the New Capital
Securities, or any broker-dealer who
purchased the Old Capital Securities from the
Trust for resale pursuant to Rule 144A or any
other available exemption under the
Securities Act, (a) will not be able to rely
on the interpretations of the staff of the
Division of Corporation Finance of the
Commission set forth in the above-mentioned
interpretive letters, (b) will not be
permitted or entitled to tender such Old
Capital Securities in the Exchange Offer and
(c) must comply with the registration and
prospectus delivery requirements of the
Securities Act in connection with any sale or
other transfer of such Old Capital Securities
unless such sale is made pursuant to an
exemption from such requirements. In
addition, as described below, if any broker-
dealer holds Old Capital Securities acquired
for its own account as a result of market-
making or other trading activities and
exchanges such Old Capital Securities for New
Capital Securities, then such broker-dealer
must deliver a prospectus meeting the
requirements of the Securities Act in
connection with any resales of such New
Capital Securities.
Each holder of Old Capital Securities who wishes
to exchange Old Capital Securities for New Capital
Securities in the Exchange Offer will be required
to represent that (i) it is not an Affiliate of
the Corporation or the Trust, (ii) any New Capital
Securities to be received by it are being acquired
in the ordinary course of its business, (iii) it
has no arrangement or understanding with any
person to participate in a distribution (within
the meaning of the Securities Act) of such New
Capital Securities, and (iv) if such holder is not
a broker-dealer, such holder is not engaged in,
and does not intend to engage in, a distribution
(within the meaning of the Securities Act) of such
New Capital Securities. Each broker-dealer that
receives New Capital Securities for its own
account pursuant to the Exchange Offer must
acknowledge that it acquired the Old Capital
Securities for its own account as the result of
market-making activities or other trading
activities and must agree that it will deliver a
prospectus meeting the requirements of the
Securities Act in connection with any resale of
such New Capital Securities. The Letter of
Transmittal states that, by so acknowledging and
by delivering a prospectus, a broker-dealer will
not be deemed to admit that it is an "underwriter"
within the meaning of the Securities Act. Based
on the position taken by the staff of the Division
of Corporation Finance of the Commission in the
interpretive letters referred to above, the
Corporation and the Trust believe that
Participating Broker-Dealers who acquired Old
Capital Securities for their own accounts as a
result of market-making activities or other
trading activities may fulfill their prospectus
delivery requirements with respect to the New
Capital Securities received upon exchange of such
Old Capital Securities (other than Old Capital
Securities which represent an unsold allotment
from the original sale of the Old Capital
Securities) with a prospectus meeting the
requirements of the Securities Act, which may be
the prospectus prepared for an exchange offer so<PAGE>
long as it contains a description of the plan of
distribution with respect to the resale of such
New Capital Securities. Accordingly, this
Prospectus, as it may be amended or supplemented
from time to time, may be used by a Participating
Broker-Dealer in connection with resales of New
Capital Securities received in exchange for Old
Capital Securities where such Old Capital
Securities were acquired by such Participating
Broker-Dealer for its own account as a result of
market-making or other trading activities.
Subject to certain provisions set forth in the
Registration Rights Agreement and to the
limitations described below under "The Exchange
Offer -- Resales of New Capital Securities," the
Corporation and the Trust have agreed that this
Prospectus, as it may be amended or supplemented
from time to time, may be used by a Participating
Broker-Dealer in connection with resales of such
New Capital Securities for a period ending 90 days
after the Expiration Date (subject to extension
under certain limited circumstances) or, if
earlier, when all such New Capital Securities have
been disposed of by such Participating Broker-
Dealer. See "Plan of Distribution." Any
Participating Broker-Dealer who is an Affiliate of
the Corporation or the Trust may not rely on such
interpretive letters and must comply with the
registration and prospectus delivery requirements
of the Securities Act in connection with any
resale transaction. See "The Exchange Offer --
Resales of New Capital Securities."
Exchange Agent The exchange agent with respect to the
Exchange Offer is The Bank of New York (the
"Exchange Agent"). The addresses, and
telephone and facsimile numbers, of the
Exchange Agent are set forth in "The Exchange
Offer -- Exchange Agent" and in the Letter of
Transmittal.
Use of Proceeds Neither the Corporation nor the Trust will
receive any cash proceeds from the issuance
of the New Capital Securities offered hereby.
See "Use of Proceeds."
Certain Federal Income
Tax Consequences; ERISA
Considerations Holders of Old Capital Securities should
review the information set forth under
"Certain Federal Income Tax Consequences" and
"ERISA Considerations" prior to tendering Old
Capital Securities in the Exchange Offer.
The New Capital Securities
Securities Offered Up to $150,000,000 aggregate Liquidation
Amount of the Trust's New Capital Securities
which have been registered under the
Securities Act (Liquidation Amount $1,000 per
New Capital Security). The New Capital
Securities will be issued and the Old Capital
Securities were issued under the Declaration.
The New Capital Securities and any Old
Capital Securities which remain outstanding
after the consummation of the Exchange Offer
will vote together as a single class for
purposes of determining whether holders of
the requisite percentage in outstanding
Liquidation Amount thereof have taken certain
actions or exercised certain rights under the
Declaration. See "Description of New Capital
Securities -- Voting Rights -- Amendment of
the Declaration." The terms of the New
Capital Securities are identical in all
material respects to the terms of the Old
Capital Securities, except that the New
Capital Securities have been registered under
the Securities Act and will not be subject to
the $100,000 minimum Liquidation Amount
transfer restriction and certain other
restrictions on transfer applicable to the
Old Capital Securities and will not provide
for any increase in the Distribution rate<PAGE>
thereon. See "The Exchange Offer -- Purpose
of the Exchange Offer," "Description of New
Capital Securities," "Description of New
Junior Subordinated Debentures," "Description
of the New Guarantee" and "Description of the
Old Securities."
Distribution Dates January 31 and July 31 of each year,
commencing July 31, 1997.
Extension Periods Distributions on the New Capital Securities
will be deferred for the duration of any
Extension Period elected by the Corporation
with respect to the payment of interest on
the New Junior Subordinated Debentures. No
Extension Period will exceed 10 consecutive
semi-annual periods or extend beyond the
Stated Maturity Date. See "Description of
New Junior Subordinated Debentures -- Option
to Extend Interest Payment Date" and "Certain
Federal Income Tax Consequences -- Interest
Income and Original Issue Discount."
Ranking The New Capital Securities will rank equally,
and payments thereon will be made pro rata,
with the Old Capital Securities and the
Common Securities except as described under
"Description of New Capital Securities --
Subordination of Common Securities." The New
Junior Subordinated Debentures will rank
equally with the Old Junior Subordinated
Debentures and all other junior subordinated
debentures issued by the Corporation ("Other
Debentures") and sold (if at all) to other
trusts to be established by the Corporation
(if any), in each case similar to the Trust
("Other Trusts"), and will be unsecured and
will rank subordinate and junior in right of
payment to all Senior Indebtedness to the
extent and in the manner set forth in the
Indenture. See "Description of New Junior
Subordinated Debentures." The New Guarantee
will rank equally with the Old Guarantee and
all other guarantees (if any) to be issued by
the Corporation with respect to capital
securities (if any) issued by Other Trusts
("Other Guarantees") and will constitute an
unsecured obligation of the Corporation and
will rank subordinate and junior in right of
payment to all Senior Indebtedness and, in
certain cases, all liabilities (other than
Other Guarantees) of the Corporation to the
extent and in the manner set forth in the New
Guarantee. See "Description of the New
Guarantee."
Redemption The Trust Securities will be subject to
mandatory redemption in a Like Amount, (i) in
whole but not in part, on the Stated Maturity
Date upon repayment of the Junior
Subordinated Debentures, (ii) in whole but
not in part, at any time at the same time as
the optional prepayment of the Junior
Subordinated Debentures by the Corporation
upon the occurrence and continuation of a
Special Event prior to January 31, 2007 and
(iii) in whole or in part, on or after
January 31, 2007 at the same time as the
optional prepayment by the Corporation of the
Junior Subordinated Debentures, in each case
at the applicable Redemption Price. See
"Description of New Capital Securities --
Redemption."
Ratings The New Capital Securities are expected to be
rated "baa2" by Moody's Investors Service,
Inc. and "BBB" by Standard & Poor's Ratings
Services.
Absence of Market for the
Capital Securities The New Capital Securities will be a new
issue of securities for which there currently
is no market. Although the Initial
Purchasers have informed the Trust and the<PAGE>
Corporation that they each currently intend
to make a market in the New Capital
Securities, the Initial Purchasers are not
obligated to do so, and any such market
making may be discontinued at any time
without notice. Accordingly, there can be no
assurance as to the development or liquidity
of any market for the New Capital Securities.
The Trust and the Corporation do not intend
to apply for listing of the New Capital
Securities on any securities exchange or for
inclusion in the Nasdaq Stock Market. See
"Plan of Distribution."
RISK FACTORS
Prospective investors should carefully review the information
contained elsewhere in this Prospectus and should particularly
consider the following matters.
Ranking of Subordinate Obligations Under the Guarantee and Junior
Subordinated Debentures
The obligations of the Corporation under the Guarantee issued by it
for the benefit of holders of Capital Securities, as well as under the
Junior Subordinated Debentures, will be unsecured, will rank
subordinate and junior in right of payment to all present and future
Senior Indebtedness of the Corporation and will rank equally with
obligations to or rights of the Corporation's other general unsecured
creditors, except that, in the case of a bankruptcy or insolvency
proceeding, the Corporation's obligations under the Guarantee will
rank subordinate and junior in right of payment to all liabilities
(other than Other Guarantees) of the Corporation. At March 31, 1997,
the aggregate principal amount of outstanding Senior Indebtedness of
the Corporation was $360 million. As a holding company, the
Corporation's operations are conducted by its subsidiaries. The Banks
are subject to significant state and federal regulation, including
restrictions on the Corporation's ability to receive dividends and
loans from the Banks. Further, the right of the Corporation to
participate in any distribution of assets of any subsidiary, upon such
subsidiary's liquidation or reorganization or otherwise (and thus the
ability of holders of the Capital Securities to benefit indirectly
from such distribution), is subject to the prior claims of creditors
(whose claims may themselves be subject to depositor preference laws)
of such subsidiary, except to the extent that the Corporation may
itself be recognized as a creditor of such subsidiary. Accordingly,
the Junior Subordinated Debentures will be effectively subordinated to
all existing and future liabilities of the Corporation's subsidiaries.
At March 31, 1997, the subsidiaries of the Corporation had total
liabilities (excluding liabilities owed to the Corporation) of $18.9
billion. None of the Indenture, the Guarantee or the Declaration
places any limitation on the amount of secured or unsecured
indebtedness, including Senior Indebtedness, that may be incurred by
the Corporation or any of its subsidiaries. See "Description of the
New Guarantee -- Status of the New Guarantee" and "--Description of
New Junior Subordinated Debentures -- Subordination."
The ability of the Trust to pay amounts due on the Capital
Securities is dependent upon the Corporation making payments on the
Junior Subordinated Debentures as and when required.
Option to Extend Interest Payment Period; Tax Considerations
So long as no Debenture Event of Default (as defined herein) shall
have occurred and be continuing, the Corporation will have the right
under the Indenture to defer payments of interest on the Junior
Subordinated Debentures at any time or from time to time for a period
not exceeding 10 consecutive semi-annual periods with respect to each
Extension Period, provided that no Extension Period may extend beyond
the Stated Maturity Date. Upon any such deferral, semi-annual
Distributions on the Capital Securities by the Trust will be deferred
(and the amount of Distributions to which holders of the Capital
Securities are entitled will accumulate additional Distributions
thereon at the rate of 8.12% per annum, compounded semi-annually, but
not exceeding the interest rate then accruing on the Junior
Subordinated Debentures) from the respective payment dates for such
Distributions during any such Extension Period.
The Corporation may extend any existing Extension Period, provided
that such extension does not cause such Extension Period to exceed 10
consecutive semi-annual periods or to extend beyond the Stated<PAGE>
Maturity Date. Upon the termination of any Extension Period and the
payment of all interest then accrued and unpaid on the Junior
Subordinated Debentures (together with interest thereon at the annual
rate of 8.12%, compounded semi-annually, to the extent permitted by
applicable law), the Corporation may elect to begin a new Extension
Period, subject to the above requirements. There is no limitation on
the number of times that the Corporation may elect to begin an
Extension Period. See "Description of New Capital Securities --
Distributions" and "--Description of New Junior Subordinated
Debentures -- Option to Extend Interest Payment Date."
Should the Corporation exercise its right to defer payments of
interest on the Junior Subordinated Debentures, each holder of Trust
Securities will be required to accrue income (as original issue
discount ("OID")) in respect of the deferred stated interest allocable
to its Trust Securities for United States federal income tax purposes,
which will be allocated but not distributed to holders of Trust
Securities. As a result, during an Extension Period, each holder of
Capital Securities will recognize income for United States federal
income tax purposes in advance of the receipt of cash and will not
receive the cash related to such income from the Trust if the holder
disposes of the Capital Securities prior to the record date for the
payment of Distributions thereafter. See "Certain Federal Income Tax
Consequences -- Interest Income and Original Issue Discount" and
"--Sales of Capital Securities."
Should the Corporation elect to exercise its right to defer
payments of interest on the Junior Subordinated Debentures, the market
price of the Capital Securities is likely to be affected. A holder
that disposes of its Capital Securities during an Extension Period,
therefore, might not receive the same return on its investment as a
holder that continues to hold its Capital Securities. In addition,
the mere existence of the Corporation's right to defer payments of
interest on the Junior Subordinated Debentures may cause the market
price of the Capital Securities to be more volatile than the market
prices of other securities on which OID accrues that are not subject
to such deferrals.
Special Event Redemption or Distribution; Possible Tax Law Changes
Affecting the Capital Securities
Upon the occurrence and continuation of a Special Event (as defined
under "Description of New Junior Subordinated Debentures -- Special
Event Prepayment") prior to January 31, 2007, the Corporation will
have the right to prepay the Junior Subordinated Debentures in whole
(but not in part) at the Special Event Prepayment Price within 90 days
following the occurrence of such Special Event and therefore cause a
mandatory redemption of the Capital Securities at the Special Event
Redemption Price. The Corporation also will have the right at any
time to terminate the Trust and, after satisfaction of claims of
creditors as provided by applicable law, to cause the Junior
Subordinated Debentures to be distributed to the holders of the Trust
Securities. See "Description of New Capital Securities -- Redemption"
and "--Liquidation of the Trust and Distribution of Junior
Subordinated Debentures."
On February 6, 1997, as part of the Clinton Administration's Fiscal
1998 Budget Proposal, the Treasury Department proposed legislation
(the "Proposed Legislation") which would , among other things,
generally deny corporate issuers a deduction for interest in respect
of certain debt obligations, such as the New Junior Subordinated
Debentures, issued on or after the date "of first committee action,"
if such debt obligations have a maximum term in excess of 15 years and
are not shown as indebtedness on the issuer's applicable consolidated
balance sheet. The Proposed Legislation has not yet been introduced
by any member of the 105th Congress. If the Proposed Legislation or
any other legislation is enacted by Congress, such enactment may give
rise to a Tax Event, in which event, the Corporation would be
permitted to cause a redemption of the Trust Securities at the Special
Event Redemption Price by electing to prepay the Junior Subordinated
Debentures at the Special Event Prepayment Price. See "Description of
New Capital Securities -- Redemption," "Description of New Junior
Subordinated Debentures -- Special Event Prepayment" and "Certain
Federal Income Tax Consequences -- Proposed Tax Legislation."
Possible Adverse Effect on Market Prices
There can be no assurance as to the market prices for Capital
Securities or Junior Subordinated Debentures distributed to the
holders of Capital Securities if a termination of the Trust were to
occur. Accordingly, the Capital Securities or the Junior Subordinated
Debentures may trade at a discount from the price that the investor
paid to purchase its Capital Securities. Because holders of Capital
Securities may receive Junior Subordinated Debentures in liquidation<PAGE>
of the Trust and because Distributions are otherwise limited to
payments on the Junior Subordinated Debentures, prospective purchasers
of Capital Securities are also making an investment decision with
regard to the Junior Subordinated Debentures and should carefully
review all the information regarding the Junior Subordinated
Debentures contained herein. See "Description of New Junior
Subordinated Debentures."
Rights Under the Guarantee
The Bank of New York will act as Guarantee Trustee and will hold
the Guarantee for the benefit of the holders of the Capital
Securities. The Bank of New York will also act as Property Trustee
and as Debenture Trustee under the Indenture. The Bank of New York
(Delaware) will act as Delaware Trustee under the Declaration. The Old
Guarantee guarantees, and the New Guarantee will guarantee, as the
case may be, to the holders of the Capital Securities the following
payments, to the extent not paid by the Trust: (i) any accumulated and
unpaid Distributions required to be paid on the Capital Securities, to
the extent that the Trust has funds on hand legally available therefor
on the relevant payment date; (ii) the applicable Redemption Price
with respect to any Capital Securities called for redemption, to the
extent that the Trust has funds on hand legally available therefor on
the relevant payment date; and (iii) upon a voluntary or involuntary
termination and liquidation of the Trust (unless the Junior
Subordinated Debentures are distributed to holders of the Capital
Securities), the lesser of (a) the aggregate of the Liquidation Amount
and all accumulated and unpaid Distributions to the date of payment,
to the extent that the Trust has funds on hand legally available
therefor on the relevant payment date and (b) the amount of assets of
the Trust remaining available for distribution to holders of the
Capital Securities on the relevant payment date. The holders of a
majority in Liquidation Amount of the Capital Securities will have the
right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee or to direct the exercise of any trust power
conferred upon the Guarantee Trustee. Any holder of the Capital
Securities may institute a legal proceeding directly against the
Corporation to enforce its rights under the Guarantee without first
instituting a legal proceeding against the Trust, the Guarantee
Trustee or any other person or entity. If the Corporation defaults on
its obligation to pay amounts payable under the Junior Subordinated
Debentures, the Trust will not have sufficient funds for the payment
of Distributions or amounts payable on redemption of the Capital
Securities or otherwise, and, in such event, holders of the Capital
Securities will not be able to rely upon the Guarantee for payment of
such amounts. Instead, in the event a Debenture Event of Default
shall have occurred and be continuing and such event is attributable
to the failure of the Corporation to pay principal of or premium, if
any, or interest on the Junior Subordinated Debentures on the payment
date on which such payment is due and payable, then a holder of
Capital Securities may institute a legal proceeding directly against
the Corporation for enforcement of payment to such Capital Securities
holder of the principal of or premium, if any, or interest on such
Junior Subordinated Debentures having a principal amount equal to the
Liquidation Amount of the Capital Securities of such holder (a "Direct
Action"). Notwithstanding any payments made to a holder of Capital
Securities by the Corporation in connection with a Direct Action, the
Corporation shall remain obligated to pay the principal of and
premium, if any, and interest on the Junior Subordinated Debentures,
and the Corporation shall be subrogated to the rights of the holder of
such Capital Securities with respect to payments on the Capital
Securities to the extent of any payments made by the Corporation to
such holder in any Direct Action. Except as described herein, holders
of Capital Securities will not be able to exercise directly any other
remedy available to the holders of the Junior Subordinated Debentures
or to assert directly any other rights in respect of the Junior
Subordinated Debentures. See "Description of New Junior Subordinated
Debentures -- Enforcement of Certain Rights by Holders of New Capital
Securities," "--Debenture Events of Default" and "Description of the
New Guarantee." The Declaration provides that each holder of Capital
Securities by acceptance thereof agrees to the provisions of the
Indenture and the Junior Subordinated Debentures.
Limited Voting Rights
Holders of Capital Securities generally will have voting rights
relating only to the modification of the terms of the Capital
Securities, the termination or liquidation of the Trust, and the
exercise of the Trust's rights as holder of the Junior Subordinated
Debentures. Holders of Capital Securities will not be entitled to
vote to appoint, remove or replace, or to increase or decrease the
number of, the Issuer Trustees, which voting rights are vested
exclusively in the holder of the Common Securities, except as<PAGE>
described under "Description of Capital Securities -- Removal of
Issuer Trustees." The Property Trustee, the Administrative Trustees
and the Corporation may amend the Declaration without the consent of
holders of Capital Securities to ensure that the Trust will be
classified for United States federal income tax purposes as a grantor
trust even if such action adversely affects the interests of such
holders. See "Description of New Capital Securities -- Voting Rights;
Amendment of the Declaration" and "--Removal of Issuer Trustees."
Consequence of a Failure to Exchange Old Capital Securities
The Old Capital Securities have not been registered under the
Securities Act or any state securities laws and therefore may not be
offered, sold or otherwise transferred except in compliance with the
registration requirements of the Securities Act and any other
applicable securities laws, or pursuant to an exemption therefrom or
in a transaction not subject thereto, and in each case in compliance
with certain other conditions and restrictions. Old Capital
Securities which remain outstanding after consummation of the Exchange
Offer will continue to bear a legend reflecting such restrictions on
transfer. In addition, upon consummation of the Exchange Offer,
holders of Old Capital Securities which remain outstanding will not be
entitled to any rights to have such Old Capital Securities registered
under the Securities Act or to any similar rights under the
Registration Rights Agreement (subject to certain limited exceptions).
The Corporation and the Trust do not intend to register under the
Securities Act any Old Capital Securities which remain outstanding
after consummation of the Exchange Offer (subject to such limited
exceptions, if applicable). To the extent that Old Capital Securities
are tendered and accepted in the Exchange Offer, a holder's ability to
sell untendered Old Capital Securities could be adversely affected.
The New Capital Securities and any Old Capital Securities which
remain outstanding after consummation of the Exchange Offer will vote
together as a single class for purposes of determining whether holders
of the requisite percentage and outstanding Liquidation Amount thereof
have taken certain actions or exercised certain rights under the
Declaration. See "Description of New Capital Securities -- Voting
Rights; Amendment of the Declaration."
The Old Capital Securities provide, among other things, that, if a
registration statement relating to the Exchange Offer has not been
filed by June 27, 1997 and declared effective by July 27, 1997, the
Distribution Rate borne by the Old Securities commencing on July 28,
1997 will increase by 0.25% per annum until the Exchange Offer is
consummated. Upon consummation of the Exchange Offer, holders of Old
Capital Securities will not be entitled to any increase in the
Distribution Rate thereon or any further registration rights under the
Registration Rights Agreement, except under limited circumstances.
See "Description of Old Capital Securities."
Absence of Public Market
The Old Capital Securities were issued to, and the Corporation
believes such securities are currently owned by, a relatively small
number of beneficial owners. The Old Capital Securities have not been
registered under the Securities Act and will be subject to transfer
restrictions if they are not exchanged for New Capital Securities.
Although the New Capital Securities may be resold or otherwise
transferred by the holders (who are not affiliates of the Corporation
or the Trust) without compliance with the registration requirements
under the Securities Act, they will constitute a new issue of
securities with no established trading market. Old Capital Securities
may be transferred by the holders thereof only in blocks having a
Liquidation Amount of not less than $100,000 (100 Capital Securities).
New Capital Securities may be transferred by the holders thereof in
blocks having a Liquidation Amount of $1,000 (one New Capital
Security) or integral multiples thereof. The Corporation and the
Trust have been advised by the Initial Purchasers that the Initial
Purchasers presently intend to make a market in the New Capital
Securities. However, the Initial Purchasers are not obligated to do
so and any market-making activity with respect to the New Capital
Securities may be discontinued at any time without notice. In
addition, such market-making activity will be subject to the limits
imposed by the Securities Act and the Exchange Act and may be limited
during the Exchange Offer. Accordingly, no assurance can be given
that an active public or other market will develop for the New Capital
Securities or the Old Capital Securities or as to the liquidity of or
the trading market for the New Capital Securities or the Old Capital
Securities. If an active public market does not develop, the market
price and liquidity of the New Capital Securities may be adversely
affected. Future trading prices, if any, of the New Capital
Securities will depend on many factors including, among other things,
prevailing interest rates, the Corporation's operating results, and<PAGE>
the market for similar securities. Depending on prevailing interest
rates, the market for similar securities and other factors, including
the financial condition of the Corporation, the New Capital Securities
may trade at a discount.
Notwithstanding the registration of the New Capital Securities in
the Exchange Offer, holders who are Affiliates of the Corporation or
the Trust may publicly offer for sale or resale the New Capital
Securities only in compliance with the provisions of Rule 144 under
the Securities Act.
Each broker-dealer that receives New Capital Securities for its own
account in exchange for Old Capital Securities, where such Old Capital
Securities were acquired by such broker-dealer as a result of
market-making activities or other trading activities, must acknowledge
that it will deliver a prospectus in connection with any resale of
such New Capital Securities. See "Plan of Distribution."
Exchange Offer Procedures
Issuance of the New Capital Securities in exchange for Old Capital
Securities pursuant to the Exchange Offer will be made only after a
timely receipt by the Trust of such Old Capital Securities, a properly
completed and duly executed Letter of Transmittal and all other
required documents. Therefore, holders of the Old Capital Securities
desiring to tender such Old Capital Securities in exchange for New
Capital Securities should allow sufficient time to insure timely
delivery. Neither the Corporation nor the Trust is under any duty to
give notification of defects or irregularities with respect to the
tenders of Old Capital Securities for exchange.
FIRST OF AMERICA BANK CORPORATION
General. The Corporation is a Michigan corporation and a bank
holding company registered under the Bank Holding Company Act of 1956,
as amended. It is also a savings and loan holding company. Its
principal activity consists of owning and supervising four affiliate
financial institutions which operate general, commercial banking
businesses from 600 banking offices and facilities located in
Michigan, Florida, Illinois and Indiana. The Corporation also has
divisions and non-banking subsidiaries that provide mortgage, trust,
data processing, pension consulting, revolving credit, securities
brokerage, insurance and investment advisory services. At March 31,
1997, the Corporation had total assets of $21.5 billion, deposits of
$17.1 billion and shareholders' equity of $1.7 billion. Based on
total assets, the Corporation was the second largest bank holding
company in Michigan and the 32nd largest bank holding company in the
United States.
The Corporation was incorporated in 1971 by its lead bank, First of
America Bank-Michigan N.A., Kalamazoo, Michigan, established in 1863.
It became a bank holding company in 1972 in a transaction in which
First of America Bank-Michigan, N.A. and two other banks became wholly
owned affiliates. The Corporation became a savings and loan holding
company on July 31, 1990.
The Corporation's affiliate financial institutions offer a broad
range of lending, depository and related financial services to
individual, commercial, industrial, financial and governmental
customers, including demand, savings and time deposits, secured and
unsecured loans, lease financing, letters of credit, money transfers,
corporate and personal trust services, cash management and other
financial services.
The Corporation, as the parent company, provides certain management
functions to its affiliate financial institutions relating to loan
policies and procedures, profit planning and accounting, external and
internal audit, legal advice and compliance with government
regulations and general coordination of investment, trust and human
resources administration, data processing and product development
activities.
The Corporation is frequently in the process of examining potential
acquisitions or merger candidates. Several potential acquisitions or
mergers are often at different stages of development and negotiation
at any one time. No assurance can be given that the Corporation will
or will not consummate any such acquisitions or mergers.
Recent event. On April 16, 1997, the Board of Directors declared a
3-for-2 stock split, to be effected in the form of a 50 % stock
dividend, payable May 30, 1997, to shareholders of record on May 9,
1997. The Corporation currently has 58.7 million shares outstanding.
After the stock dividend, there will be over 88 million shares
outstanding.<PAGE>
FIRST OF AMERICA CAPITAL TRUST I
The Trust is a statutory business trust formed under Delaware law
pursuant to (i) an original Declaration of Trust, dated as of
January 16, 1997, executed by the Corporation, as Sponsor, the
Delaware Trustee and the three Administrative Trustees, and (ii) the
filing of a Certificate of Trust with the Secretary of State of the
State of Delaware on January 16, 1997. The Trust exists for the
exclusive purposes of (i) issuing and selling the Trust Securities,
which represent undivided beneficial interests in the assets of the
Trust, (ii) using the proceeds of the sale of the Trust Securities to
acquire the Junior Subordinated Debentures and (iii) engaging in only
those other activities necessary, advisable or incidental thereto.
Accordingly, the Junior Subordinated Debentures will be the sole
assets of the Trust, and payments under the Junior Subordinated
Debentures will be the sole revenues of the Trust. All of the Common
Securities are owned, directly or indirectly, by the Corporation. The
Common Securities will rank equally, and payments will be made thereon
pro rata, with the Capital Securities, except that upon the occurrence
and during the continuance of an Event of Default under the
Declaration resulting from a Debenture Event of Default, the rights of
the Corporation as holder of the Common Securities to payments in
respect of Distributions and payments upon liquidation, redemption or
otherwise will be subordinated and will rank junior to the rights of
the holders of the Capital Securities. See "Description of New
Capital Securities -- Subordination of Common Securities." The
Corporation has acquired, directly or indirectly, Common Securities in
a Liquidation Amount equal to at least 3% of the total capital of the
Trust. The Trust has a term of approximately 31 years but may
terminate earlier as provided in the Declaration. Pursuant to the
Declaration, the Trust's business and affairs will be conducted by its
trustees, each appointed by the Corporation as holder of the Common
Securities. The Issuer Trustees of the Trust will be The Bank of
New York, as Property Trustee, The Bank of New York (Delaware), as
Delaware Trustee, and the three Administrative Trustees who are
employees or officers of or affiliated with the Corporation. The Bank
of New York will also act as indenture trustee under the Guarantee and
the Indenture. See "Description of the New Guarantee" and
"Description of New Junior Subordinated Debentures." The holder of
the Common Securities of the Trust or, if an Event of Default under
the Declaration has occurred and is continuing, the holders of a
majority in Liquidation Amount of the Capital Securities will be
entitled to appoint, remove or replace the Property Trustee and/or the
Delaware Trustee. In no event will the holders of the Capital
Securities have the right to vote to appoint, remove or replace the
Administrative Trustees since such voting rights will be vested
exclusively in the holder of the Common Securities. The duties and
obligations of each Issuer Trustee are governed by the Declaration.
The Corporation will pay, directly or indirectly, all fees, expenses,
debts and obligations (other than the Trust Securities) related to the
Trust and the offering of the Capital Securities, including all
ongoing costs, expenses and liabilities of the Trust. The principal
executive office of the Trust is c/o First of America Bank
Corporation, 211 South Rose Street, Kalamazoo, Michigan 49007.
USE OF PROCEEDS
Neither the Corporation nor the Trust will receive any cash
proceeds from the issuance of the New Capital Securities. In
consideration for issuing the New Capital Securities in exchange for
Old Capital Securities as described in this Prospectus, the Trust will
receive Old Capital Securities in like Liquidation Amount. The Old
Capital Securities surrendered in exchange for the New Capital
Securities will be retired and cancelled.
The proceeds to the Trust (without giving effect to expenses of the
offering payable by the Corporation) from the offering of the Old
Capital Securities was $150,000,000. All of the proceeds from the
sale of Old Capital Securities were invested by the Trust in the
Junior Subordinated Debentures. The Corporation intends that the net
proceeds from the sale of the Old Junior Subordinated Debentures will
be used for general corporate purposes.
The Capital Securities are eligible to qualify as Tier 1 Capital
under the capital guidelines of the Federal Reserve.
<TABLE>
<CAPTION>
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed
charges of the Corporation for the respective periods indicated:<PAGE>
Three Months
Ended
March 31, Year Ended December 31,
1997 1996 1996 1995 1994 1993 1992
(unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed
Charges(1)
Excluding interest on
deposits 4.25 3.57 4.12 3.35 4.20 8.52 7.82
Including interest on
deposits 1.66 1.45 1.50 1.41 1.48 1.56 1.36
________________
(1) For purposes of computing these ratios, "earnings" represent
income before income taxes plus fixed charges, and "fixed
charges" consist of interest expense and one-third (the
proportion deemed representative of the interest factor) of
rental expenses on operating leases.
</TABLE>
CAPITALIZATION
The following table sets forth the actual unaudited capitalization
of the Corporation at March 31, 1997, and as adjusted to give effect
to the consummation of the offering of Capital Securities. The table
should be read in conjunction with the Consolidated Financial
Statements of the Corporation and the related Notes thereto included
in the documents incorporated by reference herein. See "Incorporation
of Certain Documents by Reference." Information regarding authorized,
issued and outstanding shares of Common Stock reflect two recent
events: (1) at the annual meeting of shareholders held on April 16,
1997, the majority of shareholders approved an increase in the
authorized Common Stock of the Corporation from 100,000,000 to
200,000,000 shares, and (2) at their April 16, 1997, meeting, the
Corporation's Board of Directors declared a 3-for-2 stock split to be
effected in the form of a 50% stock dividend, payable May 30, 1997, to
shareholders of record May 9, 1997.
<TABLE>
<CAPTION>
March 31, 1997
Actual As Adjusted
(unaudited)
(in thousands)
<S> <C> <C>
Long-Term Debt $467,091 467,091
Corporation-obligated Mandatorily
Redeemable Preferred Securities of 150,000 150,000
Subsidiary Trust Holding Solely
Subordinated Debentures of the Corporation
Shareholders' Equity:
Common Stock, $10 par value; authorized
200,000,000 shares; issued and
outstanding 88,078,905 shares 880,790 889,790
Capital Surplus 83,836 83,836
Net Unrealized Gain/(Loss) on
Securities Available for Sale, Net (17,593) (17,593)
Retained Earnings 789,448 789,448
Total shareholders' equity 1,736,481 1,736,481
Total Capitalization 2,353,572 2,353,572
</TABLE>
SUMMARY FINANCIAL DATA
The following table contains selected consolidated financial data
for the Corporation and its subsidiaries for the five years ended
December 31, 1996 and the three-month periods ended March 31, 1997 and
1996. The financial data for each of the years ended December 31,
1992 through 1996 have been derived from audited financial statements.
The financial data for the three months ended March 31, 1997 and 1996
are unaudited but reflect, in the opinion of management, all
adjustments (consisting of normal recurring accruals) necessary to
present fairly the information for such interim periods. Results for
the interim periods are not necessarily indicative of results to be
expected for the full year. The summary below should be read in
conjunction with the Consolidated Financial Statements of the<PAGE>
Corporation and the related Notes thereto and Management's Discussion
and Analysis of Financial Condition and Results of Operations which
are contained in each of the Corporation's Annual Reports on Form 10-K
for the years ended December 31, 1992 through 1996 and the
Corporation's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997. See "Incorporation of Certain Documents by
Reference."
<TABLE>
<CAPTION>
Three Months Ended Year Ended December 31,
1997 1996 1996 1995 1994 19931992
(unaudited) (in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Summary of Operations
Interest income $398,526 427,036 1,663,554 1,796,524 1,600,877 1,510,966 1,596,127
Interest expense 177,963 200,612 761,066 872,528 662,142 608,949 721,300
Net interest income 220,563 226,424 902,488 923,996 938,735 902,017 874,827
Provision for loan losses 22,816 24,601 93,456 91,488 86,571 84,714 78,809
Total non-interest income 127,043 94,169 419,314 346,100 284,373 292,184 261,316
Total non-interest expense 205,676 205,460 845,003 815,271 813,418 763,528 796,348
Applicable income tax expense 39,689 30,911 126,457 126,629 102,616 98,574 91,506
Extraordinary item, net of tax -- -- - -- -- -- (21,956)
Net income 79,425 59,621 256,886 236,708 220,503 247,385 147,524
Net income applicable to Common Stock 79,425 59,621 256,886 236,708 220,503 241,232 135,015
Earnings Per Share of Common (a)
Primary 0.88 0.63 2.77 2.49 2.46 2.80 1.64
Fully diluted 0.88 0.63 2.77 2.49 2.46 2.76 1.64
Average common shares outstanding 90,159 95,322 92,663 95,252 89,718 86,126 82,263
Cash dividends declared per common 0.31 0.29 1.21 1.15 1.09 1.03 0.89
Primary book value per common share 19.71 19.23 19.89 19.26 16.75 17.07 14.75
Balance Sheet Summary
Assets:
Cash and due from banks $913,201 878,066 1,205,962 1,207,062 1,060,788 903,517 918,960
Federal funds sold and other short 264,667 112,050 163,400 269,737 55,271 74,909 175,030
Securities:
Held to maturity -- -- -- -- 3,112,876 1,856,623 3,489,626
Available for sale 4,456,606 5,003,079 4,562,381 5,060,746 2,587,626 3,261,481 --
Held for sale -- -- -- -- -- -- 1,137,420
Loans -- net of unearned income 14,738,274 15,735,13 15,056,006 16,076,94 16,834,85 14,394,15 13,756,01
Allowance for loan losses (245,207) (252,846) (241,182) (228,115) (188,664) (176,793)
Other assets 1,353,672 1,234,915 1,327,276 1,226,790 1,145,398 928,450 846,507
Total assets 21,470,644 22,718,03 22,062,179 23,600,09 24,568,70 21,230,47 20,146,76
Liabilities and Equity
Deposits 17,111,766 18,398,90 17,619,296 19,342,46 20,200,26 18,243,70 18,035,55
Short term borrowings 1,689,646 1,759,875 1,837,990 1,649,965 1,882,739 994,578 338,023
Long term debt 467,091 478,017 521,124 490,315 681,236 254,193 254,051
Other liabilities 465,660 278,346 299,571 289,367 225,573 214,560 183,649
Total shareholders' equity 1,736,481 1,802,893 1,784,198 1,827,981 1,578,888 1,523,437 1,335,491
Total liabilities and equity 21,470,644 22,718,03 22,062,179 23,600,09 24,568,70 21,230,47 20,146,76
Financial Ratios
Return on average total equity 12.97 14.39 13.89 14.44 17.50 11.38
Return on average assets 1.50 1.05 1.16 1.00 0.98 1.20 0.75
Net interest margin (b) 4.66 4.40 4.53 4.28 4.58 4.86 4.98
Total shareholder's equity to assets 8.09 7.94 8.09 7.75 6.43 7.18 6.63
/TABLE
<PAGE>
(a) Earnings per share amounts have been restated to reflect a 3-for-2
stock split to be effected in the form of a 50% stock dividend,
payable May 30, 1997, to shareholders of record May 9, 1997. The
Corporation's Board of Directors declared this stock split at their
April 16, 1997, meeting.
(b) Fully taxable equivalent based on a marginal federal income tax
rate of 35% for 1997, 1996, 1995, 1994 and 1993, and 34% for 1992.
THE EXCHANGE OFFER
Purpose of the Exchange Offer
In connection with the sale of the Old Capital Securities, the
Corporation and the Trust entered into the Registration Rights
Agreement with the Initial Purchasers, pursuant to which the
Corporation and the Trust agreed to file and to use their best efforts
to cause to become effective with the Commission a registration
statement with respect to the exchange of the New Capital Securities
for the Old Capital Securities. A copy of the Registration Rights
Agreement has been filed as an Exhibit to the Registration Statement
of which this Prospectus is a part.
The Exchange Offer is being made to satisfy the contractual
obligations of the Corporation and the Trust under the Registration
Rights Agreement. The form and terms of the New Capital Securities
are the same as the form and terms of the Old Capital Securities
except that the New Capital Securities have been registered under the
Securities Act and will not be subject to the $100,000 minimum
Liquidation Amount transfer restriction and certain other restrictions
on transfer applicable to the Old Capital Securities and will not
provide for any increase in the Distribution rate thereon. In that
regard, the Old Capital Securities provide, among other things, that,
if a registration statement relating to the Exchange Offer has not
been filed by June 27, 1997 and declared effective by July 27, 1997,
the Distribution rate borne by the Old Capital Securities commencing
on July 28, 1997 will increase by 0.25% per annum until the Exchange
Offer is consummated. Upon consummation of the Exchange Offer,
holders of Old Capital Securities will not be entitled to any increase
in the Distribution rate thereon or any further registration rights
under the Registration Rights Agreement, except under limited
circumstances. See "Risk Factors -- Consequences of a Failure to
Exchange Old Capital Securities" and "Description of Old Capital
Securities."
The Exchange Offer is not being made to, nor will the Trust
accept tenders for exchange from, holders of Old Capital Securities in
any jurisdiction in which the Exchange Offer or the acceptance thereof
would not be in compliance with the securities or blue sky laws of
such jurisdiction.
Unless the context requires otherwise, the term "holder" with
respect to the Exchange Offer means any person in whose name the Old
Capital Securities are registered on the books of the Trust or any
other person who has obtained a properly completed bond power from the
registered holder, or any person whose Old Capital Securities are held
of record by The Depository Trust Company ("DTC") who desires to
deliver such Old Capital Securities by book-entry transfer at DTC.
Pursuant to the Exchange Offer, the Corporation will exchange as
soon as practicable after the Expiration Date, the New Guarantee for
the Old Guarantee and the New Junior Subordinated Debentures, in an
amount corresponding to the Old Capital Securities accepted for
exchange, for a like aggregate principal amount of the Old Junior
Subordinated Debentures. The New Guarantee and New Junior
Subordinated Debentures have been registered under the Securities Act.
Terms of the Exchange Offer
The Trust hereby offers, upon the terms and subject to the
conditions set forth in this Prospectus and in the accompanying Letter
of Transmittal, to exchange up to $150,000,000 aggregate Liquidation
Amount of New Capital Securities for a like aggregate Liquidation
Amount of Old Capital Securities properly tendered on or prior to the
Expiration Date and not properly withdrawn in accordance with the
procedures described below. The Trust will issue, promptly after the
Expiration Date, an aggregate Liquidation Amount of up to $150,000,000
of New Capital Securities in exchange for a like principal amount of
outstanding Old Capital Securities tendered and accepted in connection
with the Exchange Offer. Holders may tender their Old Capital
Securities in whole or in part in a Liquidation Amount of not less<PAGE>
than $100,000 (100 Capital Securities) or any integral multiple of
$1,000 Liquidation Amount (one Capital Security) in excess thereof.
The Exchange Offer is not conditioned upon any minimum
Liquidation Amount of Old Capital Securities being tendered. As of
the date of this Prospectus, $150,000,000 aggregate Liquidation Amount
of the Old Capital Securities is outstanding.
Holders of Old Capital Securities do not have any appraisal or
dissenters' rights in connection with the Exchange Offer. Old Capital
Securities which are not tendered for or are tendered but not accepted
in connection with the Exchange Offer will remain outstanding and be
entitled to the benefits of the Trust Agreement, but will not be
entitled to any further registration rights under the Registration
Rights Agreement, except under limited circumstances. See "Risk
Factors -- Consequences of a Failure to Exchange Old Capital
Securities" and "Description of Old Securities."
If any tendered Old Capital Securities are not accepted for
exchange because of an invalid tender, the occurrence of certain other
events set forth herein or otherwise, certificates for any such
unaccepted Old Capital Securities will be returned, without expense,
to the tendering holder thereof promptly after the Expiration Date.
Holders who tender Old Capital Securities in connection with the
Exchange Offer will not be required to pay brokerage commissions or
fees or, subject to the instructions in the Letter of Transmittal,
transfer taxes with respect to the exchange of Old Capital Securities
in connection with the Exchange Offer. The Corporation will pay all
charges and expenses, other than certain applicable taxes described
below, in connection with the Exchange Offer. See "--Fees and
Expenses."
NEITHER THE CORPORATION, THE BOARD OF DIRECTORS OF THE
CORPORATION NOR ANY ISSUER TRUSTEE OF THE TRUST MAKES ANY
RECOMMENDATION TO HOLDERS OF OLD CAPITAL SECURITIES AS TO WHETHER TO
TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF THEIR OLD
CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO
ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF
OLD CAPITAL SECURITIES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER
PURSUANT TO THE EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF OLD
CAPITAL SECURITIES TO TENDER BASED ON SUCH HOLDERS OWN FINANCIAL
POSITION AND REQUIREMENTS.
The term "Expiration Date" means 5:00 p.m., New York City time,
on _______________, 1997 unless the Exchange Offer is extended by the
Corporation or the Trust (in which case the term "Expiration Date"
shall mean the latest date and time to which the Exchange Offer is
extended).
The Corporation and the Trust expressly reserve the right in
their sole and absolute discretion, subject to applicable law, at any
time and from time to time, (i) to delay the acceptance of the Old
Capital Securities for exchange, (ii) to terminate the Exchange Offer
(whether or not any Old Capital Securities have theretofore been
accepted for exchange) if the Trust determines, in its sole and
absolute discretion, that any of the events or conditions referred to
under "--Conditions to the Exchange Offer" have occurred or exist or
have not been satisfied, (iii) to extend the Expiration Date of the
Exchange Offer and retain all Old Capital Securities tendered pursuant
to the Exchange Offer, subject, however, to the right of holders of
Old Capital Securities to withdraw their tendered Old Capital
Securities as described under "--Withdrawal Rights," and (iv) to waive
any condition or otherwise amend the terms of the Exchange Offer in
any respect. If the Exchange Offer is amended in a manner determined
by the Corporation and the Trust to constitute a material change, or
if the Corporation and the Trust waive a material condition of the
Exchange Offer, the Corporation and the Trust will promptly disclose
such amendment by means of a prospectus supplement that will be
distributed to the holders of the Old Capital Securities, and the
Corporation and the Trust will extend the Exchange Offer to the extent
required by Rule 14e-1 under the Exchange Act.
Any such delay in acceptance, extension, termination or amendment
will be followed promptly by oral or written notice thereof to the
Exchange Agent and by making a public announcement thereof, and such
announcement in the case of an extension will be made no later than
9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date. Without limiting the manner in
which the Corporation and the Trust may choose to make any public
announcement and subject to applicable law, the Corporation and the
Trust shall have no obligation to publish, advertise or otherwise
communicate any such public announcement other than by issuing a
release to an appropriate news agency.<PAGE>
Acceptance for Exchange and Issuance of New Capital Securities
Upon the terms and subject to the conditions of the Exchange
Offer, the Trust will exchange, and will issue to the Exchange Agent,
New Capital Securities for Old Capital Securities validly tendered and
not withdrawn promptly after the Expiration Date.
In all cases, delivery of New Capital Securities in exchange for
Old Capital Securities tendered and accepted for exchange pursuant to
the Exchange Offer will be made only after timely receipt by the
Exchange Agent of (i) Old Capital Securities or a book-entry
confirmation of a book-entry transfer of Old Capital Securities into
the Exchange Agent's account at DTC, (ii) the Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, with any
required signature guarantees, and (iii) any other documents required
by the Letter of Transmittal.
The term "book-entry confirmation" means a timely confirmation of
a book-entry transfer of Old Capital Securities into the Exchange
Agent's account at DTC.
Subject to the terms and conditions of the Exchange Offer, the
Trust will be deemed to have accepted for exchange, and thereby
exchanged, Old Capital Securities validly tendered and not withdrawn
as, if and when the Trust gives oral or written notice to the Exchange
Agent of the Trust's acceptance of such Old Capital Securities for
exchange pursuant to the Exchange Offer. The Exchange Agent will act
as agent for the Trust for the purpose of receiving tenders of Old
Capital Securities, Letters of Transmittal and related documents, and
as agent for tendering holders for the purpose of receiving Old
Capital Securities, Letters of Transmittal and related documents and
transmitting New Capital Securities to validly tendering holders.
Such exchange will be made promptly after the Expiration Date. If for
any reason whatsoever, acceptance for exchange or the exchange of any
Old Capital Securities tendered pursuant to the Exchange Offer is
delayed (whether before or after the Trust's acceptance for exchange
of Old Capital Securities) or the Trust extends the Exchange Offer or
is unable to accept for exchange or exchange Old Capital Securities
tendered pursuant to the Exchange Offer, then, without prejudice to
the Trust's rights set forth herein, the Exchange Agent may,
nevertheless, on behalf of the Trust and subject to Rule 14e-1(c)
under the Exchange Act, retain tendered Old Capital Securities and
such Old Capital Securities may not be withdrawn except to the extent
tendering holders are entitled to withdrawal rights as described under
"--Withdrawal Rights."
Pursuant to the Letter of Transmittal, a holder of Old Capital
Securities will warrant and agree in the Letter of Transmittal that it
has full power and authority to tender, exchange, sell, assign and
transfer Old Capital Securities, that the Trust will acquire good,
marketable and unencumbered title to the tendered Old Capital
Securities, free and clear of all liens, restrictions, charges and
encumbrances, and the Old Capital Securities tendered for exchange are
not subject to any adverse claims or proxies. The holder also will
warrant and agree that it will, upon request, execute and deliver any
additional documents deemed by the Trust or the Exchange Agent to be
necessary or desirable to complete the exchange, sale, assignment, and
transfer of the Old Capital Securities tendered pursuant to the
Exchange Offer.
Procedures for Tendering Old Capital Securities
Valid Tender. Except as set forth below, in order for Old
Capital Securities to be validly tendered pursuant to the Exchange
Offer, a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), with any required signature guarantees and any
other required documents, must be received by the Exchange Agent at
one of its addresses set forth under "--Exchange Agent," and either
(i) tendered Old Capital Securities must be received by the Exchange
Agent, or (ii) such Old Capital Securities must be tendered pursuant
to the procedures for book-entry transfer set forth below and a book-
entry confirmation must be received by the Exchange Agent, in each
case on or prior to the Expiration Date, or (iii) the guaranteed
delivery procedures set forth below must be complied with.
If less than all of the Old Capital Securities are tendered, a
tendering holder should fill in the amount of Old Capital Securities
being tendered in the appropriate box on the Letter of Transmittal.
The entire amount of Old Capital Securities delivered to the Exchange
Agent will be deemed to have been tendered unless otherwise indicated.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE
TENDERING HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY<PAGE>
RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED
MAIL, RETURN RECEIPT REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT
DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD
BE ALLOWED TO ENSURE TIMELY DELIVERY.
Book-Entry Transfer. The Exchange Agent will establish an
account with respect to the Old Capital Securities at DTC for purposes
of the Exchange Offer within two business days after the date of this
Prospectus. Any financial institution that is a participant in DTC's
book-entry transfer facility system may make a book-entry delivery of
the Old Capital Securities by causing DTC to transfer such Old Capital
Securities into the Exchange Agent's account at DTC in accordance with
DTC's procedures for transfers. However, although delivery of Old
Capital Securities may be effected through book-entry transfer into
the Exchange Agent's account at DTC, the Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any
required signature guarantees and any other required documents, must
in any case be delivered to and received by the Exchange Agent at its
address set forth under "--Exchange Agent" on or prior to the
Expiration Date, or the guaranteed delivery procedure set forth below
must be complied with.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES
DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
Signature Guarantees. Certificates for the Old Capital
Securities need not be endorsed and signature guarantees on the Letter
of Transmittal are unnecessary unless (a) a certificate for the Old
Capital Securities is registered in a name other than that of the
person surrendering the certificate or (b) such holder completes the
box entitled "Special Issuance Instructions" or "Special Delivery
Instructions" in the Letter of Transmittal. In the case of (a) or (b)
above, such certificates for Old Capital Securities must be duly
endorsed or accompanied by a properly executed bond power, with the
endorsement or signature on the bond power and on the Letter of
Transmittal guaranteed by a firm or other entity identified in Rule
17Ad-15 under the Exchange Act as an "eligible guarantor institution,"
including (as such terms are defined therein): (i) a bank; (ii) a
broker, dealer, municipal securities broker or dealer or government
securities broker or dealer; (iii) a credit union; (iv) a national
securities exchange, registered securities association or clearing
agency; or (v) a savings association that is a participant in a
Securities Transfer Association (each of the foregoing an "Eligible
Institution"), unless surrendered on behalf of such Eligible
Institution. See Instruction 1 to the Letter of Transmittal.
Guaranteed Delivery. If a holder desires to tender Old Capital
Securities pursuant to the Exchange Offer and the certificates for
such Old Capital Securities are not immediately available or time will
not permit all required documents to reach the Exchange Agent on or
prior to the Expiration Date, or the procedure for book-entry transfer
cannot be completed on a timely basis, such Old Capital Securities may
nevertheless be tendered, provided that all of the following
guaranteed delivery procedures are complied with:
(i) such tenders are made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form accompanying the Letter of
Transmittal, is received by the Exchange Agent, as provided below, on
or prior to the Expiration Date; and
(iii) the certificates (or a book-entry confirmation)
representing all tendered Old Capital Securities, in proper form for
transfer, together with a properly completed and duly executed Letter
of Transmittal (or facsimile thereof), with any required signature
guarantees and any other documents required by the Letter of
Transmittal, are received by the Exchange Agent within three New York
Stock Exchange trading days after the date of execution of such Notice
of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or
transmitted by facsimile or mail to the Exchange Agent and must
include a guarantee by an Eligible Institution in the form set forth
in such notice.
Notwithstanding any other provision hereof, the delivery of New
Capital Securities in exchange for Old Capital Securities tendered and
accepted for exchange pursuant to the Exchange Offer will in all cases
be made only after timely receipt by the Exchange Agent of Old Capital
Securities, or of a book-entry confirmation with respect to such Old
Capital Securities, and a properly completed and duly executed Letter
of Transmittal (or facsimile thereof), together with any required
signature guarantees and any other documents required by the Letter of<PAGE>
Transmittal. Accordingly, the delivery of New Capital Securities
might not be made to all tendering holders at the same time, and will
depend upon when Old Capital Securities, book-entry confirmations with
respect to Old Capital Securities and other required documents are
received by the Exchange Agent.
The Trust's acceptance for exchange of Old Capital Securities
tendered pursuant to any of the procedures described above will
constitute a binding agreement between the tendering holder and the
Trust upon the terms and subject to the conditions of the Exchange
Offer.
Determination of Validity. All questions as to the form of
documents, validity, eligibility (including time of receipt) and
acceptance for exchange of any tendered Old Capital Securities will be
determined by the Corporation and the Trust, in their sole discretion,
whose determination shall be final and binding on all parties. The
Corporation and the Trust reserve the absolute right, in their sole
and absolute discretion, to reject any and all tenders determined by
them not to be in proper form or the acceptance of which, or exchange
for, may, in the opinion of counsel to the Corporation and the Trust,
be unlawful. The Corporation and the Trust also reserve the absolute
right, subject to applicable law, to waive any of the conditions of
the Exchange Offer as set forth under "--Conditions to the Exchange
Offer" or any condition or irregularity in any tender of Old Capital
Securities of any particular holder whether or not similar conditions
or irregularities are waived in the case of other holders.
The interpretation by the Corporation and the Trust of the terms
and conditions of the Exchange Offer (including the Letter of
Transmittal and the instructions thereto) will be final and binding.
No tender of Old Capital Securities will be deemed to have been
validly made until all irregularities with respect to such tender have
been cured or waived. Neither the Corporation, the Trust, any
affiliates or assigns of the Corporation or the Trust, the Exchange
Agent nor any other person shall be under any duty to give any
notification of any irregularities in tenders or incur any liability
for failure to give any such notification.
If any Letter of Transmittal, endorsement, bond power, power of
attorney, or any other document required by the Letter of Transmittal
is signed by a trustee, executor, administrator, guardian, attorney-
in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, such person should so indicate
when signing, and unless waived by the Corporation and the Trust,
proper evidence satisfactory to the Corporation and the Trust, in
their sole discretion, of such person's authority to so act must be
submitted.
A beneficial owner of Old Capital Securities that are held by or
registered in the name of a broker, dealer, commercial bank, trust
company or other nominee or custodian is urged to contact such entity
promptly if such beneficial holder wishes to participate in the
Exchange Offer.
Resales of New Capital Securities
The Trust is making the Exchange Offer for the New Capital
Securities in reliance on the position of the staff of the Division of
Corporation Finance of the Commission as set forth in certain
interpretive letters addressed to third parties in other transactions.
However, neither the Corporation nor the Trust sought its own
interpretive letter and there can be no assurance that the staff of
the Division of Corporation Finance of the Commission would make a
similar determination with respect to the Exchange Offer as it has in
such interpretive letters to third parties. Based on these
interpretations by the staff of the Division of Corporation Finance of
the Commission, and subject to the two immediately following
sentences, the Corporation and the Trust believe that New Capital
Securities issued pursuant to this Exchange Offer in exchange for Old
Capital Securities may be offered for resale, resold and otherwise
transferred by a holder thereof (other than a holder who is a broker-
dealer) without further compliance with the registration and
prospectus delivery requirements of the Securities Act, provided that
such New Capital Securities are acquired in the ordinary course of
such holder's business and that such holder is not participating, and
has no arrangement or understanding with any person to participate, in
a distribution (within the meaning of the Securities Act) of such New
Capital Securities. However, any holder of Old Capital Securities who
is an Affiliate of the Corporation or the Trust or who intends to
participate in the Exchange Offer for the purpose of distributing New
Capital Securities, or any broker-dealer who purchased Old Capital
Securities from the Trust for resale pursuant to Rule 144A or any
other available exemption under the Securities Act, (a) will not be<PAGE>
able to rely on the interpretations of the staff of the Division of
Corporation Finance of the Commission set forth in the above-mentioned
interpretive letters, (b) will not be permitted or entitled to tender
such Old Capital Securities in the Exchange Offer and (c) must comply
with the registration and prospectus delivery requirements of the
Securities Act in connection with any sale or other transfer of such
Old Capital Securities unless such sale is made pursuant to an
exemption from such requirements. In addition, as described below, if
any broker-dealer holds Old Capital Securities acquired for its own
account as a result of market-making or other trading activities and
exchanges such Old Capital Securities for New Capital Securities, then
such broker-dealer must deliver a prospectus meeting the requirements
of the Securities Act in connection with any resales of such New
Capital Securities.
Each holder of Old Capital Securities who wishes to exchange Old
Capital Securities for New Capital Securities in the Exchange Offer
will be required to represent that (i) it is not an Affiliate of the
Corporation or the Trust, (ii) any New Capital Securities to be
received by it are being acquired in the ordinary course of its
business, (iii) it has no arrangement or understanding with any person
to participate in a distribution (within the meaning of the Securities
Act) of such New Capital Securities, and (iv) if such holder is not a
broker-dealer, such holder is not engaged in, and does not intend to
engage in, a distribution (within the meaning of the Securities Act)
of such New Capital Securities. In addition, the Corporation and the
Trust may require such holder, as a condition to such holder's
eligibility to participate in the Exchange Offer, to furnish to the
Corporation and the Trust (or an agent thereof) in writing information
as to the number of "beneficial owners" (within the meaning of Rule
13d-3 under the Exchange Act) on behalf of whom such holder holds the
Capital Securities to be exchanged in the Exchange Offer. Each
broker-dealer that receives New Capital Securities for its own account
pursuant to the Exchange Offer must acknowledge that it acquired the
Old Capital Securities for its own account as the result of market-
making activities or other trading activities and must agree that it
will deliver a prospectus meeting the requirements of the Securities
Act in connection with any resale of such New Capital Securities. The
Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit
that it is an "underwriter" within the meaning of the Securities Act.
Based on the position taken by the staff of the Division of
Corporation Finance of the Commission in the interpretive letters
referred to above, the Corporation and the Trust believe that
Participating Broker-Dealers who acquired Old Capital Securities for
their own accounts as a result of market-making activities or other
trading activities may fulfill their prospectus delivery requirements
with respect to the New Capital Securities received upon exchange of
such Old Capital Securities (other than Old Capital Securities which
represent an unsold allotment from the original sale of the Old
Capital Securities) with a prospectus meeting the requirements of the
Securities Act, which may be the prospectus prepared for an exchange
offer so long as it contains a description of the plan of distribution
with respect to the resale of such New Capital Securities.
Accordingly, this Prospectus, as it may be amended or supplemented
from time to time, may be used by a Participating Broker-Dealer during
the period referred to below in connection with resales of New Capital
Securities received in exchange for Old Capital Securities where such
Old Capital Securities were acquired by such Participating Broker-
Dealer for its own account as a result of market-making or other
trading activities. Subject to certain provisions set forth in the
Registration Rights Agreement, the Corporation and the Trust have
agreed that this Prospectus, as it may be amended or supplemented from
time to time, may be used by a Participating Broker-Dealer in
connection with resales of such New Capital Securities for a period
ending 90-days after the Expiration Date (subject to extension under
certain limited circumstances described below) or, if earlier, when
all such New Capital Securities have been disposed of by such
Participating Broker-Dealer. See "Plan of Distribution." However, a
Participating Broker-Dealer who intends to use this Prospectus in
connection with the resale of New Capital Securities received in
exchange for Old Capital Securities pursuant to the Exchange Offer
must notify the Corporation or the Trust, or cause the Corporation or
the Trust to be notified, on or prior to the Expiration Date, that it
is a Participating Broker-Dealer. Such notice may be given in the
space provided for that purpose in the Letter of Transmittal or may be
delivered to the Exchange Agent at one of the addresses set forth
herein under "--Exchange Agent." Any Participating Broker-Dealer who
is an "affiliate" of the Corporation or the Trust may not rely on such
interpretive letters and must comply with the registration and
prospectus delivery requirements of the Securities Act in connection
with any resale transaction.<PAGE>
In that regard, each Participating Broker-Dealer who surrenders
Old Capital Securities pursuant to the Exchange Offer will be deemed
to have agreed, by execution of the Letter of Transmittal, that, upon
receipt of notice from the Corporation or the Trust of the occurrence
of any event or the discovery of any fact which makes any statement
contained or incorporated by reference in this Prospectus untrue in
any material respect or which causes this Prospectus to omit to state
a material fact necessary in order to make the statements contained or
incorporated by reference herein, in light of the circumstances under
which they were made, not misleading or of the occurrence of certain
other events specified in the Registration Rights Agreement, such
Participating Broker-Dealer will suspend the sale of New Capital
Securities (or the New Guarantee or the New Junior Subordinated
Debentures, as applicable) pursuant to this Prospectus until the
Corporation or the Trust has amended or supplemented this Prospectus
to correct such misstatement or omission and has furnished copies of
the amended or supplemented Prospectus to such Participating Broker-
Dealer or the Corporation or the Trust has given notice that the sale
of the New Capital Securities (or the New Guarantee or the New Junior
Subordinated Debentures, as applicable) may be resumed, as the case
may be. If the Corporation or the Trust gives such notice to suspend
the sale of the New Capital Securities (or the New Guarantee or the
New Junior Subordinated Debentures, as applicable), it shall extend
the 90-day period referred to above during which Participating Broker-
Dealers are entitled to use this Prospectus in connection with the
resale of New Capital Securities by the number of days during the
period from and including the date of the giving of such notice to and
including the date when Participating Broker-Dealers shall have
received copies of the amended or supplemented Prospectus necessary to
permit resales of the New Capital Securities or to and including the
date on which the Corporation or the Trust has given notice that the
sale of New Capital Securities (or the New Guarantee or the New Junior
Subordinated Debentures, as applicable) may be resumed, as the case
may be.
Withdrawal Rights
Except as otherwise provided herein, tenders of Old Capital
Securities may be withdrawn at any time on or prior to the Expiration
Date.
In order for a withdrawal to be effective a written or facsimile
transmission of such notice of withdrawal must be timely received by
the Exchange Agent at one of its addresses set forth under "--Exchange
Agent" on or prior to the Expiration Date. Any such notice of
withdrawal must specify the name of the person who tendered the Old
Capital Securities to be withdrawn, the aggregate principal amount of
Old Capital Securities to be withdrawn, and (if certificates for such
Old Capital Securities have been tendered) the name of the registered
holder of the Old Capital Securities as set forth on the Old Capital
Securities, if different from that of the person who tendered such Old
Capital Securities. If Old Capital Securities have been delivered or
otherwise identified to the Exchange Agent, then prior to the physical
release of such Old Capital Securities, the tendering holder must
submit the serial numbers shown on the particular Old Capital
Securities to be withdrawn and the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution, except in
the case of Old Capital Securities tendered for the account of an
Eligible Institution. If Old Capital Securities have been tendered
pursuant to the procedures for book-entry transfer set forth in
"--Procedures for Tendering Old Capital Securities," the notice of
withdrawal must specify the name and number of the account at DTC to
be credited with the withdrawal of Old Capital Securities, in which
case a notice of withdrawal will be effective if delivered to the
Exchange Agent by written, telegraphic, telex or facsimile
transmission. Withdrawals of tenders of Old Capital Securities may
not be rescinded. Old Capital Securities properly withdrawn will not
be deemed validly tendered for purposes of the Exchange Offer, but may
be retendered at any subsequent time on or prior to the Expiration
Date by following any of the procedures described above under
"--Procedures for Tendering Old Capital Securities."
All questions as to the validity, form and eligibility (including
time of receipt) of such withdrawal notices will be determined by the
Trust, in its sole discretion, whose determination shall be final and
binding on all parties. Neither the Corporation, the Trust, any
affiliates or assigns of the Corporation or the Trust, the Exchange
Agent nor any other person shall be under any duty to give any
notification of any irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification. Any
Old Capital Securities which have been tendered but which are
withdrawn will be returned to the holder thereof promptly after
withdrawal.<PAGE>
Distributions on New Capital Securities
Holders of Old Capital Securities whose Old Capital Securities
are accepted for exchange will not receive Distributions on such Old
Capital Securities and will be deemed to have waived the right to
receive any Distributions on such Old Capital Securities accumulated
from and after January 28, 1997. Accordingly, holders of New Capital
Securities as of the record date for the payment of Distributions on
July 31, 1997 will be entitled to receive Distributions accumulated
from and after January 28, 1997.
Conditions to the Exchange Offer
Notwithstanding any other provisions of the Exchange Offer, or
any extension of the Exchange Offer, the Corporation and the Trust
will not be required to accept for exchange, or to exchange, any Old
Capital Securities for any New Capital Securities, and, as described
below, may terminate the Exchange Offer (whether or not any Old
Capital Securities have theretofore been accepted for exchange) or may
waive any conditions to or amend the Exchange Offer, if any of the
following conditions have occurred or exists or have not been
satisfied:
(a) there shall occur a change in the current interpretation by
the staff of the Commission which permits the New Capital Securities
issued pursuant to the Exchange Offer in exchange for Old Capital
Securities to be offered for resale, resold and otherwise transferred
by holders thereof (other than broker-dealers and any such holder
which is an Affiliate of the Corporation or the Trust) without
compliance with the registration and prospectus delivery provisions of
the Securities Act provided that such New Capital Securities are
acquired in the ordinary course of such holders' business and such
holders have no arrangement or understanding with any person to
participate in the distribution of such New Capital Securities; or
(b) any law, statute, rule or regulation shall have been adopted
or enacted which, in the judgment of the Corporation or the Trust,
would reasonably be expected to impair its ability to proceed with the
Exchange Offer; or
(c) a stop order shall have been issued by the Commission or any
state securities authority suspending the effectiveness of the
Registration Statement or proceedings shall have been initiated or, to
the knowledge of the Corporation or the Trust, threatened for that
purpose any governmental approval has not been obtained, which
approval the Corporation or the Trust shall, in its sole discretion,
deem necessary for the consummation of the Exchange Offer as
contemplated hereby.
If the Corporation or the Trust determines in its sole and
absolute discretion that any of the foregoing events or conditions has
occurred or exists or has not been satisfied, it may, subject to
applicable law, terminate the Exchange Offer (whether or not any Old
Capital Securities have theretofore been accepted for exchange) or may
waive any such condition or otherwise amend the terms of the Exchange
Offer in any respect. If such waiver or amendment constitutes a
material change to the Exchange Offer, the Corporation or the Trust
will promptly disclose such waiver or amendment by means of a
prospectus supplement that will be distributed to the registered
holders of the Old Capital Securities and will extend the Exchange
Offer to the extent required by Rule 14e-1 under the Exchange Act.
Exchange Agent
The Bank of New York has been appointed as Exchange Agent for the
Exchange Offer. Delivery of the Letters of Transmittal and any other
required documents, questions, requests for assistance, and requests
for additional copies of this Prospectus or of the Letter of
Transmittal should be directed to the Exchange Agent as follows:
By Registered or Certified Mail: By Hand or Overnight Delivery:
The Bank of New York The Bank of New York
101 Barclay Street, 7E 101 Barclay Street, 7E
New York, New York 10286 Corporate Trust Services Window
Attention: Reorganization Ground Level
Department New York, New York 10286
Arwen Gibbons Attention: Reorganization
Department
Arwen Gibbons
Confirm By Telephone:<PAGE>
(212) 815-5920
Facsimile Transmissions:
(Eligible Institutions Only)
(212) 815-6339
Delivery to other than the above addresses or facsimile number
will not constitute a valid delivery.
Fees and Expenses
The Corporation has agreed to pay the Exchange Agent reasonable
and customary fees for its services and will reimburse it for its
reasonable out-of-pocket expenses in connection therewith. The
Corporation will also pay brokerage houses and other custodians,
nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of this Prospectus and related
documents to the beneficial owners of Old Capital Securities, and in
handling or tendering for their customers.
Holders who tender their Old Capital Securities for exchange will
not be obligated to pay any transfer taxes in connection therewith.
If, however, New Capital Securities are to be delivered to, or are to
be issued in the name of, any person other than the registered holder
of the Old Capital Securities tendered, or if a transfer tax is
imposed for any reason other than the exchange of Old Capital
Securities in connection with the Exchange Offer, then the amount of
any such transfer taxes (whether imposed on the registered holder or
any other persons) will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption therefrom
is not submitted with the Letter of Transmittal, the amount of such
transfer taxes will be billed directly to such tendering holder.
Neither the Corporation nor the Trust will make any payment to
brokers, dealers or other nominees soliciting acceptances of the
Exchange Offer.
DESCRIPTION OF NEW CAPITAL SECURITIES
Pursuant to the terms of the Declaration, the Trust has issued
the Old Capital Securities and the Common Securities and will issue
the New Capital Securities. The New Capital Securities will represent
preferred beneficial interests in the Trust and the holders of the New
Capital Securities and the Old Capital Securities will be entitled to
a preference over the Common Securities in certain circumstances with
respect to Distributions and amounts payable on redemption of the
Trust Securities or liquidation of the Trust. See "--Subordination of
Common Securities." The Declaration has been qualified under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). The
following description does not purport to be complete and is subject
to, and is qualified in its entirety by reference to the Declaration.
Certain capitalized terms used herein are defined in the Declaration.
General
The Capital Securities (including the Old Capital Securities and
the New Capital Securities) are limited to $150,000,000 aggregate
Liquidation Amount at any one time outstanding. The New Capital
Securities will rank equally, and payments will be made thereon pro
rata, with the Old Capital Securities and the Common Securities except
as described under "--Subordination of Common Securities". Legal
title to the Junior Subordinated Debentures will be held by the
Property Trustee in trust for the benefit of the holders of the
Capital Securities and the Common Securities. The New Guarantee will
not guarantee payment of Distributions or amounts payable on
redemption of the New Capital Securities or liquidation of the Trust
when the Trust does not have funds on hand legally available for such
payments. See "Description of the New Guarantee."
Distributions
Distributions on the New Capital Securities will be cumulative,
will accumulate from January 28, 1997 and will be payable
semi-annually in arrears on January 31 and July 31 of each year,
commencing July 31, 1997, at the annual rate of 8.12% of the
Liquidation Amount to the holders of the Capital Securities on the
relevant record dates. The record dates will be the fifteenth day of
the month in which the relevant Distribution Date (as defined herein)
falls. The amount of Distributions payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months. In
the event that any date on which Distributions are payable on the New
Capital Securities is not a Business Day (as defined herein), payment
of the Distributions payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or<PAGE>
other payment in respect to any such delay), in each case with the
same force and effect as if made on such date (each date on which
Distributions are payable in accordance with the foregoing, a
"Distribution Date"). A "Business Day" shall mean any day other than
a Saturday or a Sunday, or a day on which banking institutions in The
City of New York or Wilmington, Delaware are authorized or required by
law or executive order to remain closed.
So long as no Debenture Event of Default shall have occurred and
be continuing, the Corporation will have the right under the Indenture
to elect to defer the payment of interest on the New Junior
Subordinated Debentures at any time or from time to time for a period
not exceeding 10 consecutive semi-annual periods with respect to each
Extension Period, provided that no Extension Period may extend beyond
the Stated Maturity Date. Upon any such election, semi-annual
Distributions on the New Capital Securities will be deferred by the
Trust during such Extension Period. Distributions to which holders of
the New Capital Securities are entitled during any such Extension
Period will accumulate additional Distributions thereon at the rate
per annum of 8,12% thereof, compounded semi-annually from the relevant
Distribution Date, but not exceeding the interest rate then accruing
on the New Junior Subordinated Debentures. The term "Distributions,"
as used herein, shall include any such additional Distributions.
The Corporation may extend any existing Extension Period,
provided that such extension does not cause such Extension Period to
exceed 10 consecutive semi-annual periods or to extend beyond the
Stated Maturity Date. Upon the termination of any such Extension
Period and the payment of all amounts then due, and subject to the
foregoing limitations, the Corporation may elect to begin a new
Extension Period. The Corporation must give the Property Trustee, the
Administrative Trustees and the Debenture Trustee notice of its
election of any Extension Period or any extension thereof at least
five Business Days prior to the earlier of (i) the date the
Distributions on the New Capital Securities would have been payable
except for the election to begin or extend such Extension Period and
(ii) the date the Trust is required to give notice to any securities
exchange or to holders of the New Capital Securities of the record
date or the date such Distributions are payable, but in any event not
less than five Business Days prior to such record date. There is no
limitation on the number of times that the Corporation may elect to
begin an Extension Period. See "Description of New Junior
Subordinated Debentures -- Option to Extend Interest Payment Date" and
"Certain Federal Income Tax Consequences -- Interest Income and
Original Issue Discount."
During any such Extension Period, the Corporation may not
(i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any
of the Corporation's capital stock (which includes common and
preferred stock) or (ii) make any payment of principal of or premium,
if any, or interest on or repay, repurchase or redeem any debt
securities of the Corporation (including Other Debentures) that rank
equally with or junior in right of payment to the New Junior
Subordinated Debentures or (iii) make any guarantee payments with
respect to any guarantee by the Corporation of the debt securities of
any subsidiary of the Corporation (including Other Guarantees) if such
guarantee ranks equally with or junior in right of payment to the New
Junior Subordinated Debentures (other than (a) dividends or
distributions in shares of, or options, warrants or rights to
subscribe for or purchase shares of, common stock of the Corporation,
(b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of
stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the
Guarantee, (d) as a result of a reclassification of the Corporation's
capital stock or the exchange or conversion of one class, or series of
the Corporation's capital stock for another class or series of the
Corporation's capital stock, (e) the purchase of fractional interests
in shares of the Corporation's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the
security being converted or exchanged, and (f) purchases of common
stock related to the issuance of common stock or rights under any of
the Corporation's benefit plans for its directors, officers or
employees or any of the Corporation's dividend reinvestment plans).
Although the Corporation may in the future exercise its option to
defer payments of interest on the New Junior Subordinated Debentures,
the Corporation has no such current intention.
The revenue of the Trust available for distribution to holders of
the Capital Securities will be limited to payments under the New
Junior Subordinated Debentures in which the Trust will invest the
proceeds from the issuance and sale of the Trust Securities. See<PAGE>
"Description of New Junior Subordinated Debentures -- General." If the
Corporation does not make interest payments on the New Junior
Subordinated Debentures, the Property Trustee will not have funds
available to pay Distributions on the New Capital Securities. The
payment of Distributions on the Capital Securities (if and to the
extent the Trust has funds on hand legally available therefor) will be
guaranteed by the Corporation on a limited basis as set forth herein
under "Description of the New Guarantee."
Redemption
Upon the repayment on the Stated Maturity Date or prepayment
prior to the Stated Maturity Date of the New Junior Subordinated
Debentures, the proceeds from such repayment or prepayment shall be
applied by the Property Trustee to redeem a Like Amount (as defined
below) of the Trust Securities, upon not less than 30 nor more than 60
days' notice of a date of redemption (the "Redemption Date") at the
applicable Redemption Price, which shall be equal to (i) in the case
of the repayment of the New Junior Subordinated Debentures on the
Stated Maturity Date, the Maturity Redemption Price (equal to the
principal of and accrued interest on the New Junior Subordinated
Debentures), (ii) in the case of the optional prepayment of the New
Junior Subordinated Debentures upon the occurrence and continuation of
a Special Event prior to January 31, 2007, the Special Event
Redemption Price (equal to the Special Event Prepayment Price in
respect of the New Junior Subordinated Debentures) and (iii) in the
case of the optional prepayment of the New Junior Subordinated
Debentures on or after January 31, 2007, the Optional Redemption Price
(equal to the Optional Prepayment Price in respect of the New Junior
Subordinated Debentures). See "Description of New Junior Subordinated
Debentures -- Optional Prepayment" and "--Special Event Prepayment."
"Like Amount" means (i) with respect to a redemption of the Trust
Securities, Trust Securities having a Liquidation Amount equal to the
principal amount of Junior Subordinated Debentures to be paid in
accordance with their terms and (ii) with respect to a distribution of
Junior Subordinated Debentures upon the liquidation of the Trust,
Junior Subordinated Debentures having a principal amount equal to the
Liquidation Amount of the Trust Securities of the holder to whom such
Junior Subordinated Debentures are distributed.
The Corporation will have the option to prepay the New Junior
Subordinated Debentures, (i) in whole or in part, on or after
January 31, 2007, at the applicable Optional Prepayment Price and
(ii) in whole but not in part, at any time, upon the occurrence of a
Special Event prior to January 31, 2007, at the Special Event
Prepayment Price, in each case, subject to receipt of prior approval
by the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve.
Liquidation of the Trust and Distribution of New Junior Subordinated
Debentures
The Corporation will have the right at any time to terminate the
Trust and cause the New Junior Subordinated Debentures to be
distributed to the holders of the Trust Securities in liquidation of
the Trust. Such right is subject to (i) the Corporation having
received an opinion of counsel to the effect that such distribution
will not be a taxable event to holders of New Capital Securities and
(ii) the prior approval of the Federal Reserve if then required under
applicable capital guidelines or policies of the Federal Reserve.
The Trust shall automatically terminate upon the first to occur
of: (i) certain events of bankruptcy, dissolution or liquidation of
the Corporation; (ii) the distribution of a Like Amount of the Junior
Subordinated Debentures to the holders of the Trust Securities, if the
Corporation, as Sponsor, has given written direction to the Property
Trustee to terminate the Trust (which direction is optional and,
except as described above, wholly within the discretion of the
Corporation, as Sponsor); (iii) redemption of all of the Trust
Securities as described under "-- Redemption" above; (iv) expiration
of the term of the Trust; and (v) the entry of an order for the
dissolution of the Trust by a court of competent jurisdiction.
If a termination occurs as described in clause (i), (ii), (iv),
or (v) of the preceding paragraph, the Trust shall be liquidated by
the Issuer Trustees as expeditiously as the Issuer Trustees determine
to be possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to the holders
of the Trust Securities a Like Amount of the New Junior Subordinated
Debentures, unless such distribution is determined by the Property
Trustee not to be practicable, in which event such holders will be
entitled to receive out of the assets of the Trust legally available
for distribution to holders, after satisfaction of liabilities to<PAGE>
creditors of the Trust as provided by applicable law, an amount equal
to the aggregate of the Liquidation Amount plus accumulated and unpaid
Distributions thereon to the date of payment (the "Liquidation
Distribution"). If the Liquidation Distribution can be paid only in
part because the Trust has insufficient assets on hand legally
available to pay in full the aggregate Liquidation Distribution, then
the amounts payable directly by the Trust on the Capital Securities
and the Common Securities shall be paid on a pro rata basis, except
that if a Debenture Event of Default has occurred and is continuing,
the Capital Securities shall have a priority over the Common
Securities. See "-- Subordination of Common Securities." If an early
termination occurs, the New Junior Subordinated Debentures will be
subject to optional prepayment, in whole or in part, on or after
January 31, 2007, except in the case of an early termination described
in clause (v) above, in which case the New Junior Subordinated
Debentures will be subject to optional prepayment, in whole but not in
part, on or after January 31, 2007.
If the Corporation elects not to prepay the Junior Subordinated
Debentures prior to maturity in accordance with their terms and either
elects not to or is unable to liquidate the Trust and distribute the
Junior Subordinated Debentures to holders of the Trust Securities, the
Trust Securities will remain outstanding until the repayment of the
Junior Subordinated Debentures on the Stated Maturity Date.
After the liquidation date is fixed for any distribution of
Junior Subordinated Debentures to holders of the Trust Securities,
(i) the Trust Securities will no longer be deemed to be outstanding,
(ii) the registered global certificate representing Trust Securities
and held by DTC or its nominee will be exchanged for a registered
global certificate representing the Junior Subordinated Debentures to
be delivered upon such distribution and (iii) any certificates
representing Trust Securities not held by DTC or its nominee will be
deemed to represent Junior Subordinated Debentures having a principal
amount equal to the Liquidation Amount of such Trust Securities, and
bearing accrued and unpaid interest in an amount equal to the
accumulated and unpaid Distributions on such Trust Securities, until
such certificates are presented to the Administrative Trustees or
their agent for cancellation, whereupon the Corporation will issue to
such holder, and the Debenture Trustee will authenticate, a
certificate representing such Junior Subordinated Debentures.
There can be no assurance as to any market prices for the New
Capital Securities or the New Junior Subordinated Debentures that may
be distributed in exchange for the Trust Securities if a dissolution
and liquidation of the Trust were to occur. Accordingly, the New
Capital Securities that an investor may purchase, or the New Junior
Subordinated Debentures that the investor may receive on dissolution
and liquidation of the Trust, may trade at a discount to the price
that the investor paid to purchase the New Capital Securities offered
hereby.
Redemption Procedures
If applicable, Trust Securities shall be redeemed at the
applicable Redemption Price with the proceeds from the contemporaneous
repayment or prepayment of the New Junior Subordinated Debentures.
Any redemption of Trust Securities shall be made and the applicable
Redemption Price shall be payable on the Redemption Date only to the
extent that the Trust has funds legally available for the payment of
such applicable Redemption Price. See "--Subordination of Common
Securities."
If the Trust gives a notice of redemption in respect of the New
Capital Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, to the extent funds are legally available, with
respect to the New Capital Securities held by DTC or its nominees, the
Property Trustee will deposit irrevocably with DTC funds sufficient to
pay the applicable Redemption Price. See "--Form, Denomination,
Book-Entry Procedures and Transfer." With respect to the New Capital
Securities held in certificated form, the Property Trustee, to the
extent funds are legally available, will irrevocably deposit with the
paying agent for the New Capital Securities funds sufficient to pay
the applicable Redemption Price and will give such paying agent
irrevocable instructions and authority to pay the applicable
Redemption Price to the holders thereof upon surrender of their
certificates evidencing the Capital Securities. See "--Payment and
Paying Agency." Distributions payable on or prior to the Redemption
Date shall be payable to the holders of such New Capital Securities on
the relevant record dates for the related Distribution Dates. If
notice of redemption shall have been given and funds deposited as
required, then upon the date of such deposit, all rights of the
holders of the New Capital Securities will cease, except the right of
the holders of the New Capital Securities to receive the applicable<PAGE>
Redemption Price, but without interest on such Redemption Price, and
the New Capital Securities will cease to be outstanding. In the event
that any Redemption Date of New Capital Securities is not a Business
Day, then the applicable Redemption Price payable on such date will be
paid on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay), in each
case with the same force and effect as if made on such date. In the
event that payment of the applicable Redemption Price is improperly
withheld or refused and not paid either by the Trust or by the
Corporation pursuant to the New Guarantee as described under
"Description of the New Guarantee," (i) Distributions on New Capital
Securities called for redemption will accumulate on the Redemption
Price at the then applicable rate, from the Redemption Date originally
established by the Trust to the date such applicable Redemption Price
is actually paid, and (ii) the actual payment date will be the
Redemption Date for purposes of calculating the applicable Redemption
Price.
Subject to applicable law (including, without limitation, United
States federal securities law), the Corporation or its subsidiaries
may at any time and from time to time purchase outstanding Capital
Securities by tender, in the open market or by private agreement.
Notice of any redemption will be mailed at least 30 days but not
more than 60 days prior to the Redemption Date to each holder of Trust
Securities at its registered address. Unless the Corporation defaults
in payment of the applicable Prepayment Price on, or in the repayment
of, the Junior Subordinated Debentures, on and after the Redemption
Date Distributions will cease to accrue on the Trust Securities called
for redemption.
Subordination of Common Securities
Payment of Distributions on, and the Redemption Price of, the
Capital Securities and the Common Securities, as applicable, shall be
made pro rata based on the Liquidation Amount of the Capital
Securities and Common Securities; provided, however, that if on any
Distribution Date or Redemption Date a Debenture Event of Default
shall have occurred and be continuing, no payment of any Distribution
on, or applicable Redemption Price of, any of the Common Securities,
and no other payment on account of the redemption, liquidation or
other acquisition of the Common Securities, shall be made unless
payment in full in cash of all accumulated and unpaid Distributions on
all of the outstanding Capital Securities for all Distribution periods
terminating on or prior thereto or, in the case of Capital Securities
called for redemption on a Redemption Date on or prior thereto, the
full amount of the Redemption Price therefor, shall have been made or
provided for, and all funds available to the Property Trustee shall
first be applied to the payment in full in cash of all Distributions
on, or Redemption Price of, the Capital Securities then due and
payable.
In the case of any Event of Default, the Corporation as holder of
the Common Securities will be deemed to have waived any right to act
with respect to such Event of Default until the effect of such Event
of Default shall have been cured, waived or otherwise eliminated.
Until any such Event of Default has been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the
holders of the Capital Securities and not on behalf of the Corporation
as holder of the Common Securities, and only the holders of the
Capital Securities will have the right to direct the Property Trustee
to act on their behalf.
Events of Default; Notice
The occurrence of a Debenture Event of Default (see "Description
of New Junior Subordinated Debentures -- Debenture Events of Default")
constitutes an "Event of Default" under the Declaration.
Within five Business Days after the occurrence of any Event of
Default actually known to the Property Trustee, the Property Trustee
shall transmit notice of such Event of Default to the holders of the
Capital Securities, the Administrative Trustees and the Corporation,
as Sponsor, unless such Event of Default shall have been cured or
waived. The Corporation, as Sponsor, and the Administrative Trustees
are required to file annually with the Property Trustee a certificate
as to whether or not they are in compliance with all the conditions
and covenants applicable to them under the Declaration.
If a Debenture Event of Default has occurred and is continuing,
the Capital Securities shall have a preference over the Common
Securities as described under "--Liquidation of the Trust and
Distribution of New Junior Subordinated Debentures" and
"--Subordination of Common Securities".<PAGE>
Removal of Issuer Trustees
Unless a Debenture Event of Default shall have occurred and be
continuing, any Issuer Trustee may be removed at any time by the
holder of the Common Securities. If a Debenture Event of Default has
occurred and is continuing, the Property Trustee and the Delaware
Trustee may be removed at such time by the holders of a majority in
Liquidation Amount of the outstanding Capital Securities. In no event
will the holders of the Capital Securities have the right to vote to
appoint, remove or replace the Administrative Trustees, which voting
rights are vested exclusively in the Corporation as the holder of the
Common Securities. No resignation or removal of an Issuer Trustee and
no appointment of a successor trustee shall be effective until the
acceptance of appointment by the successor trustee in accordance with
the provisions of the Declaration.
Merger or Consolidation of Issuer Trustees
Any corporation into which the Property Trustee, the Delaware
Trustee or any Administrative Trustee that is not a natural person may
be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to
which such Issuer Trustee shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of
such Issuer Trustee, shall be the successor of such Issuer Trustee
under the Declaration, provided such corporation shall be otherwise
qualified and eligible.
Mergers, Conversions, Consolidations, Amalgamations or Replacements of
the Trust
The Trust may not merge or convert with or into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety
to any corporation or other Person, except as described below. The
Trust may, at the request of the Corporation, as Sponsor, with the
consent of the Administrative Trustees but without the consent of the
holders of the Capital Securities, merge or convert with or into,
consolidate, amalgamate, or be replaced by or convey, transfer or
lease its properties and assets as an entirety or substantially as an
entirety to a trust organized as such under the laws of any State;
provided, that (i) such successor entity either (a) expressly assumes
all of the obligations of the Trust with respect to the Capital
Securities or (b) substitutes for the Capital Securities other
securities having substantially the same terms as the Capital
Securities (the "Successor Securities") so long as the Successor
Securities rank the same as the Capital Securities rank in priority
with respect to distributions and payments upon liquidation,
redemption and otherwise, (ii) the Corporation expressly appoints a
trustee of such successor entity possessing the same powers and duties
as the Property Trustee with respect to the Junior Subordinated
Debentures, (iii) the Successor Securities are listed, or any
Successor Securities will be listed upon notification of issuance, on
any national securities exchange or other organization on which the
Capital Securities are then listed, if any, (iv) such merger,
conversion, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause the Capital Securities (including any
Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, conversion,
consolidation, amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences and privileges
of the holders of the Capital Securities (including any Successor
Securities) in any material respect, (vi) such successor entity has a
purpose identical to that of the Trust, (vii) prior to such merger,
conversion, consolidation, amalgamation, replacement, conveyance,
transfer or lease, the Corporation has received an opinion from
independent counsel to the Trust experienced in such matters to the
effect that (a) such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect
the rights, preferences and privileges of the holders of the Capital
Securities (including any Successor Securities) in any material
respect, and (b) following such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, neither the
Trust nor such successor entity will be required to register as an
investment company under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), and (viii) the Corporation or
any permitted successor or assignee owns all of the common securities
of such successor entity and guarantees the obligations of such
successor entity under the Successor Securities at least to the extent
provided by the Guarantee. Notwithstanding the foregoing, the Trust
shall not, except with the consent of holders of 100% in Liquidation
Amount of the Trust Securities, consolidate, amalgamate, merge or
convert with or into, or be replaced by or convey, transfer or lease
its properties and assets as an entirety or substantially as an<PAGE>
entirety to any other entity or permit any other entity to
consolidate, amalgamate, merge or convert with or into, or replace it
if such consolidation, amalgamation, merger, conversion, replacement,
conveyance, transfer or lease would cause the Trust or the successor
entity not to be classified as a grantor trust for United States
federal income tax purposes.
Voting Rights; Amendment of the Declaration
Except as provided below and under "--Mergers, Conversions,
Consolidations, Amalgamations or Replacements of the Trust" and
"Description of the New Guarantee -- Amendments and Assignment" and as
otherwise required by law and the Declaration, the holders of the New
Capital Securities will have no voting rights.
The Declaration may be amended from time to time by the
Corporation, the Property Trustee and the Administrative Trustees,
without the consent of the holders of the Trust Securities (i) to cure
any ambiguity, correct or supplement any provisions in the Declaration
that may be inconsistent with any other provision, or to make any
other provisions with respect to matters or questions arising under
the Declaration, which shall not be inconsistent with the other
provisions of the Declaration, or (ii) to modify, eliminate or add to
any provisions of the Declaration to such extent as shall be necessary
to ensure that the Trust will be classified for United States federal
income tax purposes as a grantor trust at all times that any Trust
Securities are outstanding or to ensure that the Trust will not be
required to register as an "investment company" under the Investment
Company Act; provided, however, that in the case of clause (i), such
action shall not adversely affect in any material respect the
interests of the holders of the Trust Securities, and any amendments
of the Declaration shall become effective when notice thereof is given
to the holders of the Trust Securities. The Declaration may be
amended by the Issuer Trustees and the Corporation (i) with the
consent of holders representing a majority (based upon Liquidation
Amount) of the outstanding Trust Securities, and (ii) upon receipt by
the Issuer Trustees of an opinion of counsel to the effect that such
amendment or the exercise of any power granted to the Issuer Trustees
in accordance with such amendment will not affect the Trust's status
as a grantor trust for United States federal income tax purposes or
the Trust's exemption from status as an "investment company" under the
Investment Company Act, provided that, without the consent of each
holder of Trust Securities, the Declaration may not be amended to
(i) change the amount or timing of any Distribution or other payment
on the Trust Securities or any redemption provisions or otherwise
adversely affect the amount of any Distribution or other payment
required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a holder of Trust
Securities to institute suit for the enforcement of any such payment
on or after such date; it being understood that the New Capital
Securities and any Old Capital Securities which remain outstanding
after consummation of the Exchange Offer will vote together as a
single class for purposes of determining whether holders of the
requisite percentage and outstanding Liquidation Amount thereof have
taken certain actions or exercised certain rights under the
Declaration.
So long as any Junior Subordinated Debentures are held by the
Property Trustee, the Issuer Trustees shall not (i) direct the time,
method and place of conducting any proceeding for any remedy available
to the Debenture Trustee, or executing any trust or power conferred on
the Property Trustee with respect to the Junior Subordinated
Debentures, (ii) waive certain past defaults under the Indenture,
(iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Junior
Subordinated Debentures or (iv) consent to any amendment, modification
or termination of the Indenture or the Junior Subordinated Debentures,
where such consent shall be required, without, in each case, obtaining
the prior approval of the holders of a majority in Liquidation Amount
of all outstanding Capital Securities; provided, however, that where a
consent under the Indenture would require the consent of each holder
of Junior Subordinated Debentures affected thereby, no such consent
shall be given by the Property Trustee without the prior approval of
each holder of the Capital Securities. The Issuer Trustees shall not
revoke any action previously authorized or approved by a vote of the
holders of the Capital Securities except by subsequent vote of such
holders. The Property Trustee shall notify each holder of Capital
Securities of any notice of default with respect to the Junior
Subordinated Debentures. In addition to obtaining the foregoing
approvals of such holders of the Capital Securities, prior to taking
any of the foregoing actions, the Issuer Trustees shall obtain an
opinion of counsel experienced in such matters to the effect that the
Trust will not be classified as an association taxable as a<PAGE>
corporation for United States federal income tax purposes on account
of such action.
Any required approval of holders of New Capital Securities may be
given at a meeting of such holders convened for such purpose or
pursuant to written consent. The Property Trustee will cause a notice
of any meeting at which holders of New Capital Securities are entitled
to vote, or of any matter upon which action by written consent of such
holders is to be taken, to be given to each holder of record of New
Capital Securities in the manner set forth in the Declaration.
No vote or consent of the holders of New Capital Securities will
be required for the Trust to redeem and cancel the New Capital
Securities in accordance with the Declaration.
Notwithstanding that holders of the Capital Securities are
entitled to vote or consent under any of the circumstances described
above, any of the Capital Securities that are owned by the
Corporation, the Issuer Trustees or any affiliate of the Corporation
or any Issuer Trustees shall, for purposes of such vote or consent, be
treated as if they were not outstanding.
Form, Denomination, Book-Entry Procedures and Transfer
The New Capital Securities may be represented by a single
security in registered, global form (the "Global Capital Security").
If issued, the Global Capital Security will be deposited upon issuance
with the Property Trustee as custodian for DTC in New York, New York,
and registered in the name of DTC or its nominee, in each case for
credit to an account of a direct or indirect participant in DTC as
described below.
Except as set forth below, the Global Capital Security may be
transferred, in whole and not in part, only to another nominee of DTC
or to a successor of DTC or its nominee. Beneficial interests in the
Global Capital Security may not be exchanged for Capital Securities in
certificated form except in the limited circumstances described under
"--Exchange of Book-Entry Capital Securities for Certificated Capital
Securities" below.
Depositary Procedures
DTC has advised the Trust and the Corporation that DTC is a
limited-purpose trust company created to hold securities for its
participating organizations (collectively, the "Participants") and to
facilitate the clearance and settlement of transactions in those
securities between Participants through electronic book-entry changes
in accounts of its Participants. The Participants include securities
brokers and dealers (including the Initial Purchasers), banks, trust
companies, clearing corporations and certain other organizations.
Access to DTC's system is also available to other entities such as
banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a Participant, either directly
or indirectly (collectively, the "Indirect Participants"). Persons
who are not Participants may beneficially own securities held by or on
behalf of DTC only through the Participants or the Indirect
Participants. The ownership interest and transfer of ownership
interest of each actual purchaser of each security held by or on
behalf of DTC are recorded on the records of the Participants and
Indirect Participants.
DTC has also advised the Trust and the Corporation that, pursuant
to procedures established by it, (i) upon deposit of the Global
Capital Security, DTC will credit the accounts of Participants
designated by the Initial Purchasers with portions of the Liquidation
Amount of the Global Capital Security and (ii) ownership of such
interests in the Global Capital Security will be shown on, and the
transfer of ownership thereof will be effected only through, records
maintained by DTC (with respect to the Participants) or by the
Participants and the Indirect Participants (with respect to other
owners of beneficial interests in the Global Capital Security).
Investors in the Global Capital Security may hold their interests
therein directly through DTC if they are Participants in such system,
or indirectly through organizations which are Participants in such
system. All interests in the Global Capital Security will be subject
to the procedures and requirements of DTC. The laws of some states
require that certain persons take physical delivery in certificated
form of securities that they own. Consequently, the ability to
transfer beneficial interests in the Global Capital Security to such
persons will be limited to that extent. Because DTC can act only on
behalf of Participants, which in turn act on behalf of Indirect
Participants and certain banks, the ability of a person having
beneficial interests in the Global Capital Security to pledge such<PAGE>
interests to persons or entities that do not participate in the DTC
system, or otherwise take actions in respect of such interests, may be
affected by the lack of a physical certificate evidencing such
interests. For certain other restrictions on the transferability of
the Capital Securities, see "--Exchange of Book-Entry Capital
Securities for Certificated Capital Securities" and "--Exchange of
Certificated Capital Securities for Book-Entry Capital Securities"
below.
Except as described below, owners of interests in the Global
Capital Security will not have Capital Securities registered in their
name, will not receive physical delivery of Capital Securities in
certificated form and will not be considered the registered owners or
holders thereof under the Declaration for any purpose.
Payments in respect of the Global Capital Security registered in
the name of DTC or its nominee will be payable by the Property Trustee
to DTC in its capacity as the registered holder under the Declaration.
Under the terms of the Declaration, the Property Trustee will treat
the persons in whose names the Capital Securities, including the
Global Capital Security, are registered as the owners thereof for the
purpose of receiving such payments and for any and all other purposes
whatsoever. Consequently, neither the Property Trustee nor any agent
thereof has or will have any responsibility or liability for (i) any
aspect of DTC's records or any Participant's or Indirect Participant's
records relating to or payments made on account of beneficial
ownership interests in the Global Capital Security, or for
maintaining, supervising or reviewing any of DTC's records or any
Participant's or Indirect Participant's records relating to the
beneficial ownership interests in the Global Capital Security or
(ii) any other matter relating to the actions and practices of DTC or
any of its Participants or Indirect Participants. DTC has advised the
Trust and the Corporation that its current practice, upon receipt of
any payment in respect of securities such as the Global Capital
Security, is to credit the accounts of the relevant Participants with
the payment on the payment date, in amounts proportionate to their
respective holdings in Liquidation Amount of beneficial interests in
the relevant security as shown on the records of DTC unless DTC has
reason to believe it will not receive payment on such payment date.
Payments by the Participants and the Indirect Participants to the
beneficial owners of the Global Capital Security will be governed by
standing instructions and customary practices and will be the
responsibility of the Participants or the Indirect Participants and
will not be the responsibility of DTC, the Property Trustee, the Trust
or the Corporation. None of the Trust, the Corporation or the
Property Trustee will be liable for any delay by DTC or any of its
Participants in identifying the beneficial owners of the Global
Capital Security, and the Trust, the Corporation and the Property
Trustee may conclusively rely on and will be protected in relying on
instructions from DTC or its nominee for all purposes.
Interests in the Global Capital Security will trade in DTC's
Same-Day Funds Settlement System and secondary market trading activity
in such interests will therefore settle in immediately available
funds, subject in all cases to the rules and procedures of DTC and its
Participants and Indirect Participants. Transfers among Participants
and Indirect Participants in DTC will be effected in accordance with
DTC's procedures, and will be settled in same-day funds.
DTC has advised the Trust and the Corporation that it will take
any action permitted to be taken by a holder of New Capital Securities
only at the direction of one or more Participants to whose account
with DTC interests in the Global Capital Security are credited and
only in respect of such portion of the Liquidation Amount of the New
Capital Securities as to which such Participant or Participants has or
have given such direction. However, if there is an Event of Default
under the Declaration, DTC reserves the right to exchange the Global
Capital Security for New Capital Securities in certificated form and
to distribute such New Capital Securities to its Participants.
The information in this section concerning DTC and its book-entry
system has been obtained from sources that the Trust and the
Corporation believe to be reliable, but neither the Trust nor the
Corporation takes responsibility for the accuracy thereof.
Although DTC has agreed to the foregoing procedures to facilitate
transfers of interest in the Global Capital Security among
Participants in DTC, it is under no obligation to perform or to
continue to perform such procedures, and such procedures may be
discontinued at any time. None of the Trust, the Corporation or the
Property Trustee will have any responsibility for the performance by
DTC or its Participants or Indirect Participants of their respective
obligations under the rules and procedures governing DTC's operations.<PAGE>
Exchange of Book-Entry Capital Securities for Certificated Capital
Securities
The Global Capital Security is exchangeable for New Capital
Securities in registered certificated form if (i) DTC (x) notifies the
Trust that it is unwilling or unable to continue as Depositary for the
Global Capital Security and the Trust thereupon fails to appoint a
successor Depositary within 90 days or (y) has ceased to be a clearing
agency registered under the Exchange Act, (ii) the Corporation in its
sole discretion elects to cause the issuance of the New Capital
Securities in certificated form or (iii) there shall have occurred and
be continuing an Event of Default or any event which after notice or
lapse of time or both would be an Event of Default under the
Declaration. In addition, beneficial interests in the Global Capital
Security may be exchanged for certificated New Capital Securities upon
request but only upon at least 20 days prior written notice given to
the Property Trustee by or on behalf of DTC in accordance with
customary procedures. In all cases, certificated New Capital
Securities delivered in exchange for the Global Capital Security or
beneficial interests therein will be registered in the names, and
issued in any approved denominations, requested by or on behalf of the
Depositary (in accordance with its customary procedures), unless the
Property Trustee determines otherwise in compliance with applicable
law.
Payment and Paying Agency
Payments in respect of the Global Capital Security shall be made
to the Depositary, which shall credit the relevant accounts at the
Depositary on the applicable Distribution Dates, and payments in
respect of the New Capital Securities that are not held by the
Depositary shall be made by check mailed to the address of the holder
entitled thereto as such address shall appear on the register. The
paying agent (the "Paying Agent") shall initially be the Property
Trustee and any co-paying agent chosen by the Property Trustee and
acceptable to the Administrative Trustees and the Corporation. The
Paying Agent shall be permitted to resign as Paying Agent upon 30
days' written notice to the Property Trustee and the Corporation. In
the event that the Property Trustee shall no longer be the Paying
Agent, the Administrative Trustees shall appoint a successor (which
shall be a bank or trust company acceptable to the Administrative
Trustees and the Corporation) to act as Paying Agent.
Registrar and Transfer Agent
The Property Trustee will act as registrar and transfer agent for
the New Capital Securities.
Registration of transfers of the New Capital Securities will be
effected without charge by or on behalf of the Trust but upon payment
of any tax or other governmental charges that may be imposed in
connection with any transfer or exchange. The Trust will not be
required to register or cause to be registered the transfer of the New
Capital Securities after they have been called for redemption.
Information Concerning the Property Trustee
The Property Trustee, other than during the occurrence and
continuance of an Event of Default, undertakes to perform only such
duties as are specifically set forth in the Declaration and, after
such Event of Default, must exercise the same degree of care and skill
as a prudent person would exercise or use in the conduct of his or her
own affairs. Subject to this provision, the Property Trustee is under
no obligation to exercise any of the powers vested in it by the
Declaration at the request of any holder of Trust Securities unless it
is offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred thereby. If no Event of Default
has occurred and is continuing and the Property Trustee is required to
decide between alternative causes of action, construe ambiguous
provisions in the Declaration or is unsure of the application of any
provision of the Declaration, and the matter is not one on which
holders of the Capital Securities or the Common Securities are
entitled under the Declaration to vote, then the Property Trustee
shall take such action as is directed by the Corporation and if not so
directed, shall take such action as it deems advisable and in the best
interests of the holders of the Trust Securities and will have no
liability except for its own bad faith, negligence or willful
misconduct.
Miscellaneous
The Administrative Trustees are authorized and directed to
conduct the affairs of and to operate the Trust in such a way that the
Trust will not be deemed to be an "investment company" required to be<PAGE>
registered under the Investment Company Act or classified as an
association taxable as a corporation for United States federal income
tax purposes and so that the Junior Subordinated Debentures will be
treated as indebtedness of the Corporation for United States federal
income tax purposes. In this connection, the Corporation and the
Administrative Trustees are authorized to take any action, not
inconsistent with applicable law, the certificate of trust of the
Trust or the Declaration, that the Corporation and the Administrative
Trustees determine in their discretion to be necessary or desirable
for such purposes, as long as such action does not materially
adversely affect the interests of the holders of the Trust Securities.
Holders of the Trust Securities have no preemptive or similar
rights.
The Trust may not borrow money, issue debt, execute mortgages or
pledge any of its assets.
DESCRIPTION OF NEW JUNIOR SUBORDINATED DEBENTURES
The Old Junior Subordinated Debentures were issued and the New
Junior Subordinated Debentures will be issued as a separate series
under an Indenture, as supplemented from time to time (as so
supplemented, the "Indenture"), between the Corporation and The Bank
of New York, as trustee (the "Debenture Trustee"). The Indenture has
been qualified under the Trust Indenture Act. This summary of certain
terms and provisions of the Junior Subordinated Debentures and the
Indenture does not purport to be complete and, where reference is made
to particular provisions of the Indenture, such provisions, including
the definitions of certain terms, some of which are not otherwise
defined herein, are qualified in their entirety by reference to all of
the provisions of the Indenture and those terms made a part of the
Indenture by the Trust Indenture Act.
General
Concurrently with the issuance of the Capital Securities, the
Trust invested the proceeds thereof, together with the consideration
paid by the Corporation for the Common Securities, in Old Junior
Subordinated Debentures issued by the Corporation. Pursuant to the
Exchange Offer, the Corporation will exchange the New Junior
Subordinated Debentures, in an amount corresponding to the Old Capital
Securities accepted for exchange, for a like aggregate principal
amount of the Old Junior Subordinated Debentures as soon as
practicable after the Expiration Date. The New Junior Subordinated
Debentures will bear interest at the annual rate of 8.12% of the
principal amount thereof, payable semi-annually in arrears on
January 31 and July 31 of each year, commencing July 31, 1997 (each,
an "Interest Payment Date"), to the person in whose name each Junior
Subordinated Debenture is registered, subject to certain exceptions,
at the close of business on the fifteenth day of the month in which
the relevant payment date falls. It is anticipated that, until the
liquidation, if any, of the Trust, each New Junior Subordinated
Debenture will be held in the name of the Property Trustee in trust
for the benefit of the holders of the Trust Securities. The amount of
interest payable for any period will be computed on the basis of a
360-day year of twelve 30-day months. In the event that any date on
which interest is payable on the New Junior Subordinated Debentures is
not a Business Day, then payment of the interest payable on such date
will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay),
in each case with the same force and effect as if made on such date.
Accrued interest that is not paid on the applicable Interest Payment
Date will bear additional interest on the amount thereof (to the
extent permitted by law) at the rate per annum of 8.12% thereof,
compounded semi-annually. The term "interest," as used herein, shall
include semi-annual interest payments, interest on semi-annual
interest payments not paid on the applicable Interest Payment Date and
Additional Sums (as defined herein), as applicable.
The New Junior Subordinated Debentures will mature on January 31,
2027.
The New Junior Subordinated Debentures will rank equally with the
Old Junior Subordinated Debentures and with all Other Debentures and
will be unsecured and will rank subordinate and junior in right of
payment, to the extent and in the manner set forth in the Indenture,
to all Senior Indebtedness. See "--Subordination." The Corporation is
a non-operating holding company and almost all of the operating assets
of the Corporation and its consolidated subsidiaries are owned by such
subsidiaries. The Corporation is a legal entity separate and distinct
from its banking subsidiaries (the "Banks") and other subsidiaries.
The principal sources of the Corporation's income are dividends and<PAGE>
interest from the Banks and its other subsidiaries. The Banks are
subject to certain restrictions on the transfer of funds by each of
such depository institutions to the Corporation and certain other
affiliates, in the form of loans, extensions of credit, investments or
purchases of assets. Transfers by any Bank to the Corporation or any
single affiliate are generally limited in amount as to the Corporation
and as to each of such other affiliates to 10% of such Bank's capital
and surplus and transfers to all affiliates are limited in the
aggregate to 20% of such Bank's capital and surplus. Furthermore,
such loans and extensions of credit are subject to various collateral
requirements. In addition, payment of dividends to the Corporation by
the Banks is subject to various limitations and in certain
circumstances requires approval by banking regulatory authorities.
Because the Corporation is a holding company, the right of the
Corporation to participate in any distribution of assets of any
subsidiary, upon such subsidiary's liquidation or reorganization or
otherwise, is subject to the prior claims of creditors (whose claims
may themselves be subject to depositor preference laws) of such
subsidiary, except to the extent the Corporation may itself be
recognized as a creditor of such subsidiary. Accordingly, the New
Junior Subordinated Debentures will be effectively subordinated to all
existing and future liabilities of the Corporation's subsidiaries.
The Indenture does not limit the amount of indebtedness, including
Senior Indebtedness, that may be incurred by the Corporation or its
subsidiaries. See "--Subordination."
Form, Registration and Transfer
If the Junior Subordinated Debentures are distributed to the
holders of the Trust Securities, the Junior Subordinated Debentures
may be represented by a global certificate registered in the name of
Cede & Co. as the nominee of DTC. The depositary arrangements for
such Junior Subordinated Debentures are expected to be substantially
similar to those in effect for the New Capital Securities. For a
description of DTC and the terms of the depositary arrangements
relating to payments, transfers, voting rights, prepayments, notices
and other matters, see "Description of New Capital Securities -- Form,
Denomination, Book-Entry Procedures and Transfer."
Payment and Paying Agents
Payment of principal of and premium, if any, and any interest on
New Junior Subordinated Debentures will be made at the office of the
Debenture Trustee in The City of New York or at the office of such
Paying Agent or Paying Agents as the Corporation may designate from
time to time, except that at the option of the Corporation payment of
any interest may be made, except in the case of New Junior
Subordinated Debentures in global form, by (i) check mailed to the
address of the Person entitled thereto as such address shall appear in
the register for New Junior Subordinated Debentures or (ii) transfer
to an account maintained by the person entitled thereto, provided that
proper transfer instructions have been received by the relevant record
date. Payment of any interest on any New Junior Subordinated
Debenture will be made to the Person in whose name such Junior
Subordinated Debenture is registered at the close of business on the
record date for such interest, except in the case of defaulted
interest. The Corporation may at any time designate additional Paying
Agents or rescind the designation of any Paying Agent; however, the
Corporation will at all times be required to maintain a Paying Agent
in each place of payment for the New Junior Subordinated Debentures.
Any moneys deposited with the Debenture Trustee or any Paying
Agent, or then held by the Corporation in trust, for the payment of
the principal of and premium, if any, or interest on any New Junior
Subordinated Debenture and remaining unclaimed for two years after
such principal and premium, if any, or interest has become due and
payable shall, at the written request of the Corporation, be repaid to
the Corporation and the holder of such New Junior Subordinated
Debenture shall thereafter look, as a general unsecured creditor, only
to the Corporation for payment thereof.
Option to Extend Interest Payment Date
So long as no Debenture Event of Default has occurred and is
continuing, the Corporation will have the right under the Indenture at
any time during the term of the New Junior Subordinated Debentures to
defer the payment of interest at any time or from time to time for a
period not exceeding 10 consecutive, semi-annual periods with respect
to each Extension Period, provided that no Extension Period may extend
beyond the Stated Maturity Date. At the end of an Extension Period,
the Corporation must pay all interest then accrued and unpaid
(together with interest then accrued at the annual rate of 8.12%,
compounded semi-annually, to the extent permitted by applicable law). <PAGE>
During an Extension Period, interest will continue to accrue and
holders of New Junior Subordinated Debentures (and holders of the
Trust Securities while Trust Securities are outstanding) will be
required to accrue interest income for United States federal income
tax purposes prior to the receipt of cash attributable to such income.
See "Certain Federal Income Tax Consequences -- Interest Income and
Original Issue Discount."
The Corporation may extend any existing Extension Period,
provided that such extension does not cause such Extension Period to
exceed 10 consecutive semi-annual periods or to extend beyond the
Stated Maturity Date. Upon the termination of any such Extension
Period and the payment of all amounts then due on any Interest Payment
Date, the Corporation may elect to begin a new Extension Period,
subject to the above requirements. No interest shall be due and
payable during an Extension Period, except at the end thereof. The
Corporation must give the Property Trustee, the Administrative
Trustees and the Debenture Trustee notice of its election of any
Extension Period or an extension thereof at least five Business Days
prior to the earlier of (i) the date the Distributions on the Trust
Securities would have been payable except for the election to begin or
extend such Extension Period and (ii) the date the Trust is required
to give notice to any securities exchange or to holders of the Capital
Securities of the record date or the date such Distributions are
payable, but in any event not less than five Business Days prior to
such record date. The Debenture Trustee shall give notice of the
Corporation's election to begin or extend a new Extension Period to
the holders of the New Capital Securities. There is no limitation on
the number of times that the Corporation may elect to begin an
Extension Period.
During any such Extension Period, the Corporation may not
(i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any
of the Corporation's capital stock (which includes common and
preferred stock), (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities
of the Corporation (including any Other Debentures) that rank equally
with or junior in right of payment to the New Junior Subordinated
Debentures or (iii) make any guarantee payments with respect to any
guarantee by the Corporation of the debt securities of any subsidiary
of the Corporation (including any Other Guarantees) if such guarantee
ranks equally with or junior in right of payment to the New Junior
Subordinated Debentures (other than (a) dividends or distributions in
shares of or options, warrants or rights to subscribe for or purchase
shares of, common stock of the Corporation, (b) any declaration of a
dividend in connection with the implementation of a stockholders'
rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant
thereto, (c) payments under the Guarantee, (d) as a result of a
reclassification of the Corporation's capital stock or the exchange or
conversion of one class or series of the Corporation's capital stock
for another class or series of the Corporation's capital stock,
(e) the purchase of fractional interests in shares of the
Corporation's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or
exchanged, and (f) purchases of common stock related to the issuance
of common stock or rights under any of the Corporation's benefit plans
for its directors, officers or employees or any of the Corporation's
dividend reinvestment plans).
Optional Prepayment
Subject to the Corporation having received prior approval of the
Federal Reserve if then required under applicable capital guidelines
or policies of the Federal Reserve, the Junior Subordinated Debentures
will be prepayable, in whole or in part, at the option of the
Corporation on or after January 31, 2007 (the "Initial Optional
Prepayment Date"), at a prepayment price (the "Optional Prepayment
Price") equal to the percentage of the outstanding principal amount of
the Junior Subordinated Debentures specified below, plus, in each
case, accrued and unpaid interest thereon to the date of prepayment if
redeemed during the 12-month period beginning January 31 of the years
indicated below:
Year Percentage
2007 104.060%
2008 103.654%
2009 103.248%
2010 102.842%
2011 102.436%<PAGE>
2012 102.030%
2013 101.624%
2014 101.218%
2015 100.812%
2016 100.406%
2017 and thereafter 100.000%
Special Event Prepayment
If a Special Event occurs and is continuing prior to the Initial
Optional Prepayment Date, the Corporation may, at its option, prepay
the Junior Subordinated Debentures in whole (but not in part) at any
time within 90 days of the occurrence of such Special Event, at a
prepayment price (the "Special Event Prepayment Price") equal to the
greater of (i) 100% of the principal amount of such Junior
Subordinated Debentures or (ii) the sum, as determined by a Quotation
Agent, of the present values of the principal amount and premium
payable with respect to an optional redemption of Junior Subordinated
Debentures on the Initial Option Prepayment Date, together with
scheduled payments of interest on the Junior Subordinated Debentures
from the prepayment date to and including the Initial Optional
Prepayment Date (the "Remaining Life"), discounted to the prepayment
date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate, plus, in each
case, accrued and unpaid interest thereon to the date of prepayment.
A "Special Event" means a Tax Event or a Regulatory Capital Event
(as defined below), as the case may be.
A "Tax Event" means the receipt by the Corporation and the Trust
of an opinion of counsel experienced in such matters to the effect
that, as a result of any amendment to, or change (including any
announced prospective change) in, the laws or any regulations
thereunder of the United States or any political subdivision or taxing
authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is announced on or after
January 28, 1997, there is more than an insubstantial risk that
(i) the Trust is, or will be within 90 days of the date of such
opinion, subject to United States federal income tax with respect to
income received or accrued on the Junior Subordinated Debentures,
(ii) interest payable by the Corporation on the Junior Subordinated
Debentures is not, or within 90 days of the date of such opinion will
not be, deductible by the Corporation, in whole or in part, for United
States federal income tax purposes, or (iii) the Trust is, or will be
within 90 days of the date of such opinion, subject to more than a de
minimis amount of other taxes, duties or other governmental charges.
A "Regulatory Capital Event" means that the Corporation shall
have received an opinion of independent bank regulatory counsel
experienced in such matters to the effect that, as a result of (a) any
amendment to, or change (including any announced prospective change)
in, the laws (or any regulations thereunder) of the United States or
any rules, guidelines or policies of the Federal Reserve or (b) any
official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or
change is effective or which pronouncement or decision is announced on
or after January 28, 1997, the Capital Securities do not constitute,
or within 90 days of the date thereof, will not constitute, Tier I
Capital (or its then equivalent); provided, however, that the
distribution of the Junior Subordinated Debentures in connection with
the termination of the Trust by the Corporation shall not in and of
itself constitute a Regulatory Capital Event unless such termination
shall have occurred in connection with a Tax Event.
"Adjusted Treasury Rate" means, with respect to any prepayment
date, the rate per annum equal to (i) the yield, under the heading
which represents the average for the immediately prior week, appearing
in the most recently published statistical release designated "H.15
(519)" or any successor publication which is published weekly by the
Federal Reserve Board and which establishes yields on actively traded
United States Treasury securities adjusted to constant maturity under
the caption "Treasury Constant Maturities," for the maturity
corresponding to the Remaining Life (if no maturity is within three
months before or after the maturity corresponding to the Remaining
Life, yields for the two published maturities most closely
corresponding to the Remaining Life shall be interpolated, and the
Adjusted Treasury Rate shall be interpolated or extrapolated from such
yields on a straight-line basis, rounding to the nearest month) or
(ii) if such release (or any successor release) is not published<PAGE>
during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue, calculated using a
price for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for such
prepayment date, in each case calculated on the third Business Day
preceding the prepayment date, plus in each case (a) 1.05% if such
prepayment date occurs on or prior to January 31, 1998 and (b) 0.50%
in all other cases.
"Comparable Treasury Issue" means the United States Treasury
security selected by the Quotation Agent as having a maturity
comparable to the Remaining Life of the Junior Subordinated Debentures
that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the Remaining Life of the
Junior Subordinated Debentures, provided that if no United States
Treasury security has a maturity which is within a period from three
months before to three months after the Initial Optional Prepayment
Date, the two most closely corresponding United States Treasury
securities shall be used as the Comparable Treasury Issue, and the
Adjusted Treasury Rate shall be interpolated or extrapolated on a
straight-line basis, rounding to the nearest month, using such
securities.
"Comparable Treasury Price" means, with respect to any prepayment
date, the average of five Reference Treasury Dealer Quotations for
such prepayment date, after excluding the highest and lowest such
Reference Treasury Dealer Quotations, or if the Debenture Trustee
obtains fewer than three such Reference Treasury Dealer Quotations,
the average of all such Reference Treasury Dealer Quotations.
"Quotation Agent" means the Reference Treasury Dealer appointed
by the Corporation.
"Reference Treasury Dealer" means: (i) Merrill Lynch Government
Securities, Inc. and its respective successors; provided, however,
that if the foregoing shall cease to be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer"), the
Corporation shall substitute therefor another Primary Treasury Dealer;
and (ii) any other Primary Treasury Dealer selected by the
Corporation.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any prepayment date, the average,
as determined by the Debenture Trustee, of the bid and asked prices
for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Debenture
Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City
time, on the third Business Day preceding such prepayment date.
"Additional Sums" means such additional amounts as may be
necessary in order that the amount of Distributions then due and
payable by the Trust on the outstanding Capital Securities and Common
Securities shall not be reduced as a result of any additional taxes,
duties or other governmental charges to which the Trust has become
subject as a result of a Tax Event.
Notice of any prepayment will be mailed at least 30 days but not
more than 60 days before the redemption date to each holder of Junior
Subordinated Debentures to be prepaid at its registered address.
Unless the Corporation defaults in payment of the prepayment price, on
and after the prepayment date interest ceases to accrue on such Junior
Subordinated Debentures called for prepayment.
If the Trust is required to pay any additional taxes, duties or
other governmental charges as a result of a Tax Event, the Corporation
will pay as additional amounts on the New Junior Subordinated
Debentures the Additional Sums.
Certain Covenants of the Corporation
The Corporation will also covenant that it will not, (i) declare
or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of the
Corporation's capital stock (which includes common and preferred
stock) or (ii) make any payment of principal, interest or premium, if
any, on or repay or repurchase or redeem any debt securities of the
Corporation (including Other Debentures) that rank equally with or
junior in right of payment to the New Junior Subordinated Debentures
or (iii) make any guarantee payments with respect to any guarantee by
the Corporation of the debt securities of any subsidiary of the
Corporation (including under Other Guarantees) if such guarantee ranks
equally or junior in right of payment to the New Junior Subordinated<PAGE>
Debentures (other than (a) dividends or distributions in shares of, or
options, warrants or rights to subscribe for or purchase shares of,
common stock of the Corporation, (b) any declaration of a dividend in
connection with the implementation of a stockholder's rights plan, or
the issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto,
(c) payments under the Guarantee, (d) as a result of a
reclassification of the Corporation's capital stock or the exchange or
conversion of one class or series of the Corporation's capital stock
for another class or series of the Corporation's capital stock,
(e) the purchase of fractional interests in shares of the
Corporation's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or
exchanged and (f) purchases of common stock related to the issuance of
common stock or rights under any of the Corporation's benefit plans
for its directors, officers or employees or any of the Corporation's
dividend reinvestment plans) if at such time (1) there shall have
occurred any event of which the Corporation has actual knowledge that
(a) is, or with the giving of notice or the lapse of time, or both,
would be, a Debenture Event of Default and (b) in respect of which the
Corporation shall not have taken reasonable steps to cure, (2) if such
Junior Subordinated Debentures are held by the Trust, the Corporation
shall be in default with respect to its payment of any obligations
under the Guarantee or (3) the Corporation shall have given notice of
its election of an Extension Period, or any extension thereof, as
provided in the Indenture and shall not have rescinded such notice,
and such Extension Period, or any extension thereof, shall have
commenced.
Debenture Events of Default
The Indenture provides that any one or more of the following
described events with respect to the Junior Subordinated Debentures
constitutes a "Debenture Event of Default" (whatever the reason for
such Debenture Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(i) failure for 30 days to pay any interest on the Junior
Subordinated Debentures or any Other Debentures, when due
(subject to the deferral of any due date in the case of an
Extension Period): or
(ii) failure to pay any principal or premium, if any, on the
Junior Subordinated Debentures or any Other Debentures when due
whether at maturity, upon redemption, by declaration of
acceleration of maturity or otherwise; or
(iii) failure to observe or perform in any material respect
certain other covenants contained in the Indenture for 90 days
after written notice to the Corporation from the Debenture
Trustee or the holders of at least 25% in aggregate outstanding
principal amount of Junior Subordinated Debentures; or
(iv) certain events in bankruptcy, insolvency or
reorganization of the Corporation.
The holders of a majority in aggregate outstanding principal
amount of the Junior Subordinated Debentures have the right to direct
the time, method and place of conducting any proceeding for any remedy
available to the Debenture Trustee. The Debenture Trustee or the
holders of not less than 25% in aggregate outstanding principal amount
of the Junior Subordinated Debentures may declare the principal due
and payable immediately upon a Debenture Event of Default. The
holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debentures may annul such declaration and waive
the default if the default (other than the nonpayment of the principal
of the Junior Subordinated Debentures which has become due solely by
such acceleration) has been cured and a sum sufficient to pay all
matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee.
The holders of a majority in aggregate outstanding principal
amount of the Junior Subordinated Debentures affected thereby may, on
behalf of the holders of all the Junior Subordinated Debentures, waive
any past default except a default in the payment of principal of or
premium, if any, on or interest (unless such default has been cured
and a sum sufficient to pay all matured installments of interest and
premium, if any, and principal due otherwise than by acceleration has
been deposited with the Debenture Trustee) or a default in respect of
a covenant or provision which under the Indenture cannot be modified
or amended without the consent of the holder of each outstanding
Junior Subordinated Debenture.<PAGE>
The Indenture requires the annual filing by the Corporation with
the Debenture Trustee of a certificate as to the absence of certain
defaults under the Indenture.
Enforcement of Certain Rights by Holders of New Capital Securities
If a Debenture Event of Default shall have occurred and be
continuing and shall be attributable to the failure of the Corporation
to pay interest or premium, if any, on or principal of the New Junior
Subordinated Debentures on the due date, a holder of New Capital
Securities may institute a Direct Action. The Corporation may not
amend the Indenture to remove the foregoing right to bring a Direct
Action without the prior written consent of the holders of all of the
New Capital Securities. Notwithstanding any payments made to a holder
of New Capital Securities by the Corporation in connection with a
Direct Action, the Corporation shall remain obligated to pay the
principal of or premium, if any, or interest on the New Junior
Subordinated Debentures, and the Corporation shall be subrogated to
the rights of the holder of such New Capital Securities with respect
to payments on the New Capital Securities to the extent of any
payments made by the Corporation to such holder in any Direct Action.
The holders of the New Capital Securities will not be able to
exercise directly any remedies, other than those set forth in the
preceding paragraph, available to the holders of the New Junior
Subordinated Debentures unless there shall have been an Event of
Default under the Declaration. See "Description of New Capital
Securities -- Events of Default; Notice."
Consolidation, Merger, Sale of Assets and Other Transactions
The Indenture provides that the Corporation shall not consolidate
with or merge into any other Person or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety
to any Person, and no Person shall consolidate with or merge into the
Corporation or convey, transfer or lease its properties and assets as
an entirety or substantially as an entirety to the Corporation,
unless: (i) in case the Corporation consolidates with or merges into
another Person or conveys or transfers its properties and assets
substantially as an entirety to any Person, the successor Person is
organized under the laws of the United States or any State or the
District of Columbia, and such successor Person expressly assumes the
Corporation's obligations on the Junior Subordinated Debentures;
(ii) immediately after giving effect thereto, no Debenture Event of
Default, and no event which, after notice or lapse of time or both,
would become a Debenture Event of Default, shall have occurred and be
continuing; and (iii) certain other conditions as prescribed in the
Indenture are met.
The general provisions of the Indenture do not afford holders of
the Junior Subordinated Debentures protection in the event of a highly
leveraged or other transaction involving the Corporation that may
adversely affect holders of the Junior Subordinated Debentures.
Modification of the Indenture
From time to time the Corporation and the Debenture Trustee may,
without the consent of the holders of Junior Subordinated Debentures,
amend, waive or supplement the Indenture for specified purposes,
including, among other things, curing ambiguities, defects or
inconsistencies (provided that any such action does not materially
adversely affect the interests of the holders of Junior Subordinated
Debentures) and qualifying, or maintaining the qualification of, the
Indenture under the Trust Indenture Act. The Indenture contains
provisions permitting the Corporation and the Debenture Trustee, with
the consent of the holders of a majority in principal amount of Junior
Subordinated Debentures, to modify the Indenture in a manner affecting
the rights of the holders of Junior Subordinated Debentures; provided
that no such modification may, without the consent of the holders of
each outstanding Junior Subordinated Debenture so affected, (i) change
the Stated Maturity Date or any prepayment provisions, or reduce the
principal amount of the Junior Subordinated Debentures or reduce the
rate or extend the time of payment of interest thereon or (ii) reduce
the percentage of principal amount of Junior Subordinated Debentures,
the holders of which are required to consent to any such modification
of the Indenture.
Satisfaction and Discharge
The Indenture provides that when, among other things, all Junior
Subordinated Debentures not previously delivered to the Debenture
Trustee for cancellation (i) have become due and payable or (ii) will
become due and payable at maturity within one year, and the
Corporation deposits or causes to be deposited with the Debenture<PAGE>
Trustee funds, in trust, for the purpose and in an amount sufficient
to pay and discharge the entire indebtedness on the Junior
Subordinated Debentures not previously delivered to the Debenture
Trustee for cancellation, for the principal and premium, if any, and
interest to the date of the deposit or to the Stated Maturity Date, as
the case may be, then the Indenture will cease to be of further effect
(except as to the Corporation's obligations to pay all other sums due
pursuant to the Indenture and to provide the officers' certificates
and opinions of counsel described therein), and the Corporation will
be deemed to have satisfied and discharged the Indenture.
Subordination
In the Indenture, the Corporation has covenanted and agreed that
any Junior Subordinated Debentures issued thereunder will rank
subordinate and junior in right of payment to all Senior Indebtedness
to the extent provided in the Indenture. Upon any payment or
distribution of assets to creditors upon any liquidation, dissolution,
winding up, reorganization, assignment for the benefit of creditors,
marshaling of assets or any bankruptcy, insolvency, debt restructuring
or similar proceedings in connection with any insolvency or bankruptcy
proceeding of the Corporation, the holders of Senior Indebtedness will
first be entitled to receive payment in full before the holders of
Junior Subordinated Debentures will be entitled to receive or retain
any payment in respect thereof.
In the event of the acceleration of the maturity of Junior
Subordinated Debentures, the holders of all Senior Indebtedness
outstanding at the time of such acceleration will first be entitled to
receive payment in full before the holders of Junior Subordinated
Debentures will be entitled to receive or retain any payment in
respect of the Junior Subordinated Debentures.
No payments on account of principal or premium, if any, or
interest, if any, in respect of the Junior Subordinated Debentures may
be made if there shall have occurred and be continuing a default in
any payment with respect to Senior Indebtedness, or an event of
default with respect to any Senior Indebtedness resulting in the
acceleration of the maturity thereof, or if any judicial proceeding
shall be pending with respect to any such default.
"Senior Indebtedness" shall mean all Indebtedness for Money
Borrowed (as defined below), whether outstanding on the date of
execution of the Indenture or thereafter created, assumed or incurred,
unless the terms thereof specifically provide that it is not superior
in right of payment to the Junior Subordinated Debentures, and any
deferrals, renewals or extensions of such Senior Indebtedness.
"Indebtedness for Money Borrowed" shall mean any obligation of,
or any obligation guaranteed by, the Corporation for the repayment of
borrowed money, whether or not evidenced by bonds, debentures, notes
or other written instruments.
The Corporation is a non-operating holding company and almost all
of the operating assets of the Corporation and its consolidated
subsidiaries are owned by such subsidiaries. The Corporation is a
legal entity separate and distinct from the Banks and its other
subsidiaries. The principal sources of the Corporation's income are
dividends and interest from the Banks and its other subsidiaries. The
Banks are subject to certain restrictions on the transfer of funds by
each of such depository institutions to the Corporation and certain
other affiliates, in the form of loans, extensions of credit,
investments or purchases of assets. Transfers by any Bank to the
Corporation or any single affiliate are generally limited in amount as
to the Corporation and as to each of such other affiliates to 10% of
such Bank's capital and surplus and transfers to all affiliates are
limited in the aggregate to 20% of such Bank's capital and surplus.
Furthermore, such loans and extensions are subject to various
collateral requirements. In addition, payment of dividends to the
Corporation by the Banks is subject to various limitations and in
certain circumstances requires approval by banking regulatory
authorities.
Because the Corporation is a holding company, the right of the
Corporation to participate in any distribution of assets of any
subsidiary, upon such subsidiary's liquidation or reorganization or
otherwise, is subject to the prior claims of creditors (whose claims
may themselves be subject to depositor preference laws) of such
subsidiary, except to the extent the Corporation may itself be
recognized as a creditor of the subsidiary. Accordingly, the New
Junior Subordinated Debentures will be effectively subordinated to all
existing and future liabilities of the Corporation's subsidiaries.
The Indenture does not limit the amount of indebtedness, including
Senior Indebtedness, that may be incurred by the Corporation or any of<PAGE>
its subsidiaries. The Corporation expects from time to time to incur
additional indebtedness constituting Senior Indebtedness.
Governing Law
The Indenture and the New Junior Subordinated Debentures will be
governed by, and construed in accordance with, the laws of the State
of New York.
Information Concerning the Debenture Trustee
Following the Exchange Offer and the qualification of the
Indenture under the Trust Indenture Act, the Debenture Trustee shall
have and be subject to all the duties and responsibilities specified
with respect to an indenture trustee under the Trust Indenture Act.
Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture
at the request of any holder of New Junior Subordinated Debentures,
unless offered reasonable indemnity by such holder against the costs,
expenses and liabilities which might be incurred thereby. The
Debenture Trustee is not required to expend or risk its own funds or
otherwise incur personal financial liability in the performance of its
duties if the Debenture Trustee reasonably believes that repayment or
adequate indemnity is not reasonably assured to it.
DESCRIPTION OF THE NEW GUARANTEE
The Old Guarantee was executed and delivered by the Corporation
concurrently with the issuance by the Trust of the Old Capital
Securities for the benefit of the holders from time to time of the Old
Capital Securities. As soon as practicable after the Expiration Date,
the New Guarantee will be issued by the Corporation for the benefit
of the holders from time to time of the New Capital Securities. The
Bank of New York will act as Guarantee Trustee under the New
Guarantee. The Guarantee has been qualified under the Trust Indenture
Act. This summary of certain provisions of the Guarantee does not
purport to be complete and is subject to, and qualified in its
entirety by reference to, all of the provisions of the Guarantee,
including the definitions therein of certain terms, and the Trust
Indenture Act.
General
The Corporation will irrevocably agree to pay in full on a
subordinated basis, to the extent set forth herein, the Guarantee
Payments (as defined below) to the holders of the New Capital
Securities, as and when due, regardless of any defense, right of
set-off or counterclaim that the Trust may have or assert other than
the defense of payment. The following payments with respect to the
New Capital Securities, to the extent not paid by or on behalf of the
Trust (the "Guarantee Payments"), will be subject to the New
Guarantee: (i) any accumulated and unpaid Distributions required to be
paid on New Capital Securities, to the extent the Trust has funds on
hand legally available therefor on such date; (ii) the Redemption
Price with respect to any Capital Securities called for redemption, to
the extent that the Trust has funds on hand legally available therefor
on such date; or (iii) upon a voluntary or involuntary termination and
liquidation of the Trust (unless the Junior Subordinated Debentures
are distributed to holders of the Capital Securities), the lesser of
(a) the Liquidation Distribution, to the extent that the Trust has
funds on hand legally available therefor on such date and (b) the
amount of assets of the Trust remaining available for distribution to
holders of New Capital Securities on such date. The Corporation's
obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Corporation to the holders of
the New Capital Securities or by causing the Trust to pay such amounts
to such holders.
The New Guarantee will rank subordinate and junior in right of
payment to all Senior Indebtedness and, in certain cases, all
liabilities (other than Other Guarantees) of the Corporation, to the
extent provided therein. See "--Status of the New Guarantee."
Because the Corporation is a holding company, the right of the
Corporation to participate in any distribution of assets of any
subsidiary, upon such subsidiary's liquidation or reorganization or
otherwise, is subject to the prior claims of creditors of such
subsidiary, except to the extent the Corporation may itself be
recognized as a creditor of such subsidiary. Accordingly, the
Corporation's obligations under the New Guarantee will be effectively
subordinated to all existing and future liabilities of the
Corporation's subsidiaries. See "Description of New Junior
Subordinated Debentures -- General." The New Guarantee does not limit
the amount of indebtedness, including Senior Indebtedness, that may be<PAGE>
incurred by the Corporation or any of its subsidiaries. The
Corporation expects from time to time to incur additional indebtedness
constituting Senior Indebtedness.
The Corporation will, through the New Guarantee, the Declaration,
the New Junior Subordinated Debentures and the Indenture, taken
together, fully, irrevocably and unconditionally guarantee all of the
Trust's obligations under the New Capital Securities. No single
document standing alone or operating in conjunction with fewer than
all of the other documents constitutes such guarantee. It is only the
combined operation of these documents that has the effect of providing
a full, irrevocable and unconditional guarantee of the Trust's
obligations under the New Capital Securities. See "Relationship Among
the New Capital Securities, the New Junior Subordinated Debentures and
the New Guarantee."
Status of the New Guarantee
The New Guarantee will constitute an unsecured obligation of the
Corporation and will rank subordinate and junior in right of payment
to all Senior Indebtedness in the same manner as New Junior
Subordinated Debentures, except in the case of a bankruptcy or
insolvency proceeding in respect of the Corporation, in which case the
New Guarantee will rank subordinate and junior in right of payment to
all liabilities (other than Other Guarantees) of the Corporation.
The New Guarantee will rank equally with the Old Guarantee and
with all Other Guarantees issued by the Corporation. The New Guarantee
will constitute a guarantee of payment and not of collection (i.e.,
the guaranteed party may institute a legal proceeding directly against
the Corporation to enforce its rights under the New Guarantee without
first instituting a legal proceeding against any other person or
entity). The New Guarantee will be held for the benefit of the
holders of the New Capital Securities. The New Guarantee will not be
discharged except by payment of the New Guarantee Payments in full to
the extent not paid by the Trust or upon distribution to the holders
of the Capital Securities of the Junior Subordinated Debentures.
Amendments and Assignment
Except with respect to any changes that do not materially
adversely affect the rights of holders of the New Capital Securities
(in which case no consent will be required), the New Guarantee may not
be amended without the prior approval of the holders of a majority of
the Liquidation Amount of such outstanding New Capital Securities.
The manner of obtaining any such approval will be as set forth under
"Description of New Capital Securities -- Voting Rights; Amendment of
the Declaration." All guarantees and agreements contained in the New
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Corporation and shall inure to the benefit of
the holders of the New Capital Securities then outstanding.
Events of Default
An event of default under the New Guarantee will occur upon the
failure of the Corporation to perform any of its payment or other
obligations thereunder. The holders of a majority in Liquidation
Amount of the New Capital Securities will have the right to direct the
time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee in respect of the New Guarantee or
to direct the exercise of any trust or power conferred upon the
Guarantee Trustee under the New Guarantee.
Any holder of the New Capital Securities may institute a legal
proceeding directly against the Corporation to enforce its rights
under the New Guarantee without first instituting a legal proceeding
against the Trust, the Guarantee Trustee or any other person or
entity.
The Corporation, as guarantor, will be required to file annually
with the Guarantee Trustee a certificate as to whether or not the
Corporation is in compliance with all the conditions and covenants
applicable to it under the New Guarantee.
Termination of the New Guarantee
The New Guarantee will terminate and be of no further force and
effect upon full payment of the applicable Redemption Price of the New
Capital Securities, upon full payment of the Liquidation Amount
payable upon liquidation of the Trust or upon distribution of New
Junior Subordinated Debentures to the holders of the New Capital
Securities. The Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of the New<PAGE>
Capital Securities must restore payment of any sums paid under the New
Capital Securities or the New Guarantee.
Information Concerning the Guarantee Trustee
The Guarantee Trustee, other than during the continuance of a
default with respect to the New Guarantee, will undertake to perform
only such duties as are specifically set forth in such Guarantee and,
after default, must exercise the same degree of care as a prudent
individual would exercise in the conduct of his or her own affairs.
Subject to such provisions, the Guarantee Trustee will be under no
obligation to exercise any of the powers vested in it by the New
Guarantee at the request of any holder of New Capital Securities,
unless offered reasonable indemnity against the costs, expenses and
liabilities which might be incurred thereby. The Guarantee Trustee is
not required to expend or risk its own funds or otherwise incur
personal financial liability in the performance of its duties if it
reasonably believes that repayment or adequate indemnity is not
reasonably assured to it.
The Corporation or its affiliates maintain certain accounts and
other banking relationships with the Guarantee Trustee and its
affiliates in the ordinary course of business.
Governing Law
The New Guarantee will be governed by, and construed in
accordance with, the laws of the State of New York.
DESCRIPTION OF THE OLD SECURITIES
The terms of the Old Securities are identical in all material
respects to the New Securities, except that (i) the Old Securities
have not been registered under the Securities Act, are subject to
certain restrictions on transfer and are entitled to certain rights
under the Registration Rights Agreement (which rights will terminate
upon consummation of the Exchange Offer, except under limited
circumstances), (ii) the New Capital Securities will not contain the
$100,000 minimum Liquidation Amount transfer restriction and certain
other restrictions on transfer applicable to Old Capital Securities,
(iii) the New Capital Securities will not provide for any increase in
the Distribution rate thereon, (iv) the New Junior Subordinated
Debentures will not contain the $100,000 minimum principal amount
transfer restriction and (v) the New Junior Subordinated Debentures
will not provide for any increase in the interest rate thereon. The
Old Securities provide that, in the event that a registration
statement relating to the Exchange Offer has not been filed by June
27, 1997 and been declared effective by July 27, 1997, or, in certain
limited circumstances, in the event a shelf registration statement
(the "Shelf Registration Statement") with respect to the resale of the
Old Capital Securities is not declared effective by July 27, 1997,
then interest will accrue (in addition to the stated interest rate on
the Old Junior Subordinated Debentures) at the rate of 0.25% per annum
on the principal amount of the Old Junior Subordinated Debentures and
Distributions will accrue (in addition to the stated Distribution rate
on the Old Capital Securities) at the rate of 0.25% per annum on the
Liquidation Amount of the Old Capital Securities, for the period from
the occurrence of such event until such time as such required Exchange
Offer is consummated or any required Shelf Registration Statement is
effective. The New Securities are not, and upon consummation of the
Exchange Offer the Old Securities will not be, entitled to any such
additional interest or Distributions. Accordingly, holders of Old
Capital Securities should review the information set forth under "Risk
Factors -- Certain Consequences of a Failure to Exchange Old Capital
Securities" and "Description of New Capital Securities," "Description
of New Junior Subordinated Debentures" and "Description of the New
Guarantee."<PAGE>
RELATIONSHIP AMONG THE NEW CAPITAL SECURITIES, THE NEW
JUNIOR SUBORDINATED DEBENTURES AND THE NEW GUARANTEE
Full and Unconditional Guarantee
Payments of Distributions and other amounts due on the New
Capital Securities (to the extent the Trust has funds on hand legally
available for the payment of such Distributions) will be irrevocably
guaranteed by the Corporation as and to the extent set forth under
"Description of the New Guarantee." Taken together, the Corporation's
obligations under the New Junior Subordinated Debentures, the
Indenture, the Declaration and the New Guarantee will provide, in the
aggregate, a full, irrevocable and unconditional guarantee of payments
of Distributions and other amounts due on the New Capital Securities.
No single document standing alone or operating in conjunction with
fewer than all of the other documents constitutes such guarantee. It
is only the combined operation of these documents that has the effect
of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the New Capital Securities. If and to the
extent that the Corporation does not make the required payments on the
New Junior Subordinated Debentures, the Trust will not have sufficient
funds to make the related payments, including Distributions, on the
New Capital Securities. The New Guarantee will not cover any such
payment when the Trust does not have sufficient funds on hand legally
available therefor. In such event, the remedy of a holder of New
Capital Securities is to institute a Direct Action. The obligations
of the Corporation under the New Guarantee will rank subordinate and
junior in right of payment to all Senior Indebtedness and, in certain
cases, all liabilities (other than Other Guarantees) of the
Corporation.
Sufficiency of Payments
As long as payments of interest and other payments are made when
due on the New Junior Subordinated Debentures, such payments will be
sufficient to cover Distributions and other payments due on the New
Capital Securities, primarily because: (i) the aggregate principal
amount or Prepayment Price of the New Junior Subordinated Debentures
will be equal to the sum of the Liquidation Amount or Redemption
Price, as applicable, of the New Capital Securities and related Common
Securities; (ii) the interest rate and interest and other payment
dates on the New Junior Subordinated Debentures will match the
Distribution rate and Distribution and other payment dates for the
Trust Securities; (iii) the Corporation shall pay for all and any
costs, expenses and liabilities of the Trust other than the Trust's
obligations to holders of Trust Securities under the Declaration; and
(iv) the Declaration provides that the Trust is not authorized to
engage in any activity that is not consistent with the limited
purposes thereof.
Enforcement of Rights of Holders of Capital Securities
A holder of any New Capital Security may institute a legal
proceeding directly against the Corporation to enforce its rights
under the New Guarantee without first instituting a legal proceeding
against the Guarantee Trustee, the Trust or any other person or
entity.
A default or event of default under any Senior Indebtedness would
not constitute a default or Event of Default under the Declaration.
However, in the event of payment defaults under, or acceleration of,
Senior Indebtedness, the subordination provisions of the Indenture
provide that no payments may be made in respect of the New Junior
Subordinated Debentures until such Senior Indebtedness has been paid
in full or any payment default thereunder has been cured or waived.
Failure to make required payments on New Junior Subordinated
Debentures would constitute an Event of Default under the Declaration.
Limited Purpose of the Trust
The New Capital Securities will represent preferred beneficial
interests in the Trust, and the Trust exists for the sole purpose of
issuing and selling the Trust Securities, using the proceeds from the
sale of the Trust Securities to acquire the Junior Subordinated
Debentures and engaging in only those other activities necessary,
advisable or incidental thereto. A principal difference between the
rights of a holder of a New Capital Security and a holder of a New
Junior Subordinated Debenture is that a holder of a New Junior
Subordinated Debenture will be entitled to receive from the
Corporation the principal amount of and premium, if any, and interest
on New Junior Subordinated Debentures held, while a holder of New
Capital Securities is entitled to receive Distributions from the Trust
(or, in certain circumstances, from the Corporation under the New<PAGE>
Guarantee) if and to the extent the Trust has funds on hand legally
available for the payment of such Distributions.
Rights Upon Termination
Unless the Junior Subordinated Debentures are distributed to
holders of the Trust Securities, upon any voluntary or involuntary
termination and liquidation of the Trust, the holders of the Trust
Securities will be entitled to receive, out of assets held by the
Trust, the Liquidation Distribution in cash. See "Description of New
Capital Securities -- Liquidation of the Trust and Distribution of New
Junior Subordinated Debentures." Upon any voluntary or involuntary
liquidation or bankruptcy of the Corporation, the Property Trustee, as
holder of the New Junior Subordinated Debentures, would be a
subordinated creditor of the Corporation, subordinated in right of
payment to all Senior Indebtedness as set forth in the Indenture, but
entitled to receive payment in full of principal (and premium, if any)
and interest, before any stockholders of the Corporation receive
payments or distributions. Since the Corporation will be the guarantor
under the New Guarantee and will agree to pay for all costs, expenses
and liabilities of the Trust (other than the Trust's obligations to
the holders of its Trust Securities), the positions of a holder of New
Capital Securities and a holder of New Junior Subordinated Debentures
relative to stockholders of the Corporation in the event of
liquidation or bankruptcy of the Corporation are expected to be
substantially the same.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
General
In the opinion of Howard & Howard Attorneys, P.C., counsel to the
Corporation and the Trust ("Tax Counsel"), the following is a summary
of certain of the material United States federal income tax
consequences of the purchase, ownership and disposition of Capital
Securities held as capital assets by a holder. This summary only
addresses the tax consequences to a holder that acquired Old Capital
Securities upon initial issuance of their original offering price. It
does not deal with special classes of holders such as banks, thrifts,
real estate investment trusts, regulated investment companies,
insurance companies, dealers in securities or currencies, tax-exempt
investors, or persons that will hold the Capital Securities as a
position in a "straddle," as part of a "synthetic security" or
"hedge," as part of a "conversion transaction" or other integrated
investment, or as other than a capital asset. This summary also does
not address the tax consequences to persons that have a functional
currency other than the U.S. dollar or the tax consequences to
shareholders, partners or beneficiaries of a holder of Capital
Securities. Further, it does not include any description of any
alternative minimum tax consequences or the tax laws of any state or
local government or of any foreign government that may be applicable
to the Capital Securities. This summary is based on the Internal
Revenue Code of 1986, as amended (the "Code"), Treasury regulations
thereunder, the administrative and judicial interpretations thereof,
as of the date hereof, all of which are subject to change, possibly on
a retroactive basis.
Exchange of Capital Securities
The exchange of Old Capital Securities for New Capital Securities
should not be a taxable event to holders for United States federal
income tax purposes. The exchange of Old Capital Securities for New
Capital Securities pursuant to the Exchange Offer should not be
treated as an "exchange" for United States federal income tax purposes
because the New Capital Securities should not be considered to differ
materially in kind or extent from the Old Capital Securities and
because the exchange will occur by operation of the terms of the Old
Capital Securities. If, however, the exchange of the Old Capital
Securities for the New Capital Securities were treated as an exchange
for United States federal income tax purposes, such exchange should
constitute a recapitalization for federal income tax purposes.
Accordingly, the New Capital Securities should have the same issue
price as the Old Capital Securities, and a holder should have the same
adjusted tax basis and holding period in the New Capital Securities as
the holder had in the Old Capital Securities immediately before the
exchange.
Classification of the Junior Subordinated Debentures<PAGE>
In connection with the issuance of the Old Junior Subordinated
Debentures, Tax Counsel has rendered its opinion generally to the
effect that, under then current law and assuming full compliance with
the terms of the Indenture (and certain other documents), and based on
certain facts and assumptions contained in such opinion, the Old
Junior Subordinated Debentures will be classified for United States
federal income tax purposes as indebtedness of the Corporation. An
opinion of Tax Counsel, however, is not binding on the Internal
Revenue Service (the "IRS") or the courts. Prospective investors
should note that no rulings have been or are expected to be sought
from the IRS with respect to any of these issues and no assurance can
be given that the IRS will not take contrary positions. Moreover, no
assurance can be given that any of the opinions expressed herein will
not be challenged by the IRS or, if challenged, that such a challenge
would not be successful.
Classification of the Trust
In connection with the issuance of the Old Capital Securities,
Tax Counsel has rendered its opinion generally to the effect that,
under then current law and assuming full compliance with the terms of
the Declaration and the Indenture (and certain other documents), and
based on certain facts and assumptions contained in such opinion, the
Trust will be classified for United States federal income tax purposes
as a grantor trust and not as an association taxable as a corporation.
Accordingly, for United States federal income tax purposes, each
holder of Capital Securities generally will be considered the owner of
an undivided interest in the Junior Subordinated Debentures, and each
holder will be required to include in its gross income any interest
(or OID accrued) with respect to its allocable share of those Junior
Subordinated Debentures.
Interest Income and Original Issue Discount
Under recently issued Treasury regulations (the "Regulations")
applicable to debt instruments issued on or after August 13, 1996, a
"remote" contingency that stated interest will not be timely paid will
be ignored in determining whether a debt instrument is issued with
OID. The Corporation believes that the likelihood of its exercising
its option to defer payments of interest is "remote" since exercising
that option would prevent the Corporation from, among other things,
declaring dividends on any class of its equity securities.
Accordingly, the Corporation intends to take the position, based on
the advice of Tax Counsel, that the Junior Subordinated Debentures
will not be considered to be issued with OID and, accordingly, stated
interest on the Junior Subordinated Debentures generally will be
taxable to a holder as ordinary income at the time it is paid or
accrued in accordance with such holder's method of accounting.
Under the Regulations, if the Corporation were to exercise its
option to defer payments of interest, the Junior Subordinated
Debentures would at that time be treated as issued with OID, and all
stated interest on the Junior Subordinated Debentures would be treated
as OID as long as the Junior Subordinated Debentures remain
outstanding. Thereafter, all of a holder's taxable interest income
with respect to the Junior Subordinated Debentures would thereafter be
accounted for on an economic accrual basis regardless of such holder's
method of tax accounting, and actual distributions of stated interest
would not be reported as taxable income. Consequently, a holder of
Capital Securities would be required to include in gross income OID
even though the Corporation would not make actual cash payments during
an Extension Period. Moreover, under the Regulations, if the option
to defer the payment of interest was determined not to be "remote,"
the Junior Subordinated Debentures would be treated as having been
originally issued with OID. In such event, all of a holder's taxable
interest income with respect to the Junior Subordinated Debentures
would be accounted for on an economic accrual basis regardless of such
holder's method of tax accounting, and actual distributions of stated
interest would not be reported as taxable income.
The Regulations have not yet been addressed in any rulings or
other interpretations by the IRS, and it is possible that the IRS
could take a position contrary to Tax Counsel's interpretation herein.
Because income on the Capital Securities will constitute interest
or OID, corporate holders of the Capital Securities will not be
entitled to a dividends-received deduction with respect to any income
recognized with respect to the Capital Securities.
Receipt of Junior Subordinated Debentures or Cash Upon Liquidation of
the Trust<PAGE>
The Corporation will have the right at any time to liquidate the
Trust and cause the Junior Subordinated Debentures to be distributed
to the holders of the Trust Securities. Under current law, such a
distribution, for United States federal income tax purposes, would be
treated as a nontaxable event to each holder, and each holder would
receive an aggregate tax basis in the Junior Subordinated Debentures
equal to such holder's aggregate tax basis in its Capital Securities.
A holder's holding period in the Junior Subordinated Debentures so
received in liquidation of the Trust would include the period during
which the Capital Securities were held by such holder. If, however,
the Trust is characterized for United States federal income tax
purposes as an association taxable as a corporation at the time of its
dissolution, the distribution of the Junior Subordinated Debentures
may constitute a taxable event to holders of Capital Securities and a
holder's holding period in Junior Subordinated Debentures would begin
on the date such Junior Subordinated Debentures were received.
Under certain circumstances described herein (see "Description of
New Capital Securities"), the Junior Subordinated Debentures may be
redeemed for cash and the proceeds of such redemption distributed to
holders in redemption of their Capital Securities. Under current law,
such a redemption would, for United States federal income tax
purposes, constitute a taxable disposition of the redeemed Capital
Securities, and a holder could recognize gain or loss as if it sold
such redeemed Capital Securities for cash. See "--Sales of Capital
Securities."
Sales of Capital Securities
A holder that sells Capital Securities will recognize gain or
loss equal to the difference between its adjusted tax basis in the
Capital Securities and the amount realized on the sale of such Capital
Securities (other than with respect to accrued and unpaid interest
which has not yet been included in income, which will be treated as
ordinary income). A holder's adjusted tax basis in the Capital
Securities generally will be its initial purchase price increased by
OID (if any) previously includable in such holder's gross income to
the date of disposition and decreased by payments (if any) received on
the Capital Securities in respect of OID. Such gain or loss generally
will be a capital gain or loss and generally will be a long-term
capital gain or loss if the Capital Securities have been held for more
than one year.
The Capital Securities may trade at a price that does not
accurately reflect the value of accrued but unpaid interest with
respect to the underlying Junior Subordinated Debentures. A holder
who uses the accrual method of accounting for tax purposes (and a cash
method holder, if the Junior Subordinated Debentures are deemed to
have been issued with OID) who disposes of such holder's Capital
Securities between record dates for payments of Distributions thereon
will be required to include accrued but unpaid interest on the Junior
Subordinated Debentures through the date of disposition in income as
ordinary income (i.e., interest or, possibly, OID), and to add such
amount to such holder's adjusted tax basis in such holder's pro rata
share of the underlying Junior Subordinated Debentures deemed disposed
of. To the extent the selling price is less than the holder's
adjusted tax basis (which will include all accrued but unpaid
interest), a holder will recognize a capital loss. Subject to certain
limited exceptions, capital losses cannot be applied to offset
ordinary income for United States federal income tax purposes.
Proposed Tax Legislation
On February 6, 1997, as part of the Clinton Administration's
Fiscal 1998 Budget Proposal, the Treasury Department proposed
legislation (the "Proposed Legislation") which would, among other
things, generally deny corporate issuers a deduction for interest in
respect of certain debt obligations, such as the New Junior
Subordinated Debentures, issued on or after the date "of first
committee action," if such debt obligations have a maximum term in
excess of 15 years and are not shown as indebtedness on the issuer's
applicable consolidated balance sheet. The Proposed Legislation has
not yet been introduced by any member of the 105th Congress. If other
legislation is enacted by Congress and if it gives rise to a Tax
Event, the Trust would be permitted to cause a redemption of the Trust
Securities at the Special Event Redemption Price by electing to pre-
pay at the Special Redemption Price. See "Description of New Capital
Securities -- Redemption" and "Description of New Junior Subordinated
Debentures -- Special Event Prepayment."
United States Alien Holders<PAGE>
For purposes of this discussion, a "United States Alien Holder"
is any corporation, individual, partnership, estate or trust that is
not a U.S. Holder for United States federal income tax purposes.
A "U.S. Holder" is a holder of Capital Securities who or which is
a citizen or individual resident (or is treated as a citizen or
individual resident) of the United States for federal income tax
purposes, a corporation or partnership created or organized (or
treated as created or organized for federal income tax purposes) in or
under the laws of the United States or any political subdivision
thereof, or a trust or estate the income of which is includable in its
gross income for federal income tax purposes without regard to its
source. Notwithstanding the foregoing, for taxable years beginning
after December 31, 1996 (or for the immediately preceding taxable
year, if the trustee of a trust so elects), a trust is a U.S. Holder
for federal income tax purposes if, and only if, (i) a court within
the United States is able to exercise primary supervision over the
administration of the trust and (ii) one or more United States
trustees have the authority to control all substantial decisions of
the trust.
Under present United States federal income tax laws: (i) payments
by the Trust or any of its paying agents to any holder of a Capital
Security who or which is a United States Alien Holder will not be
subject to United States federal withholding tax; provided that,
(a) the beneficial owner of the Capital Security does not actually or
constructively own 10 percent or more of the total combined voting
power of all classes of stock of the Corporation entitled to vote,
(b) the beneficial owner of the Capital Security is not a controlled
foreign corporation that is related to the Corporation through stock
ownership, and (c) either (A) the beneficial owner of the Capital
Security certifies to the Trust or its agent, under penalties of
perjury, that it is not a United States holder and provides its name
and address or (B) a securities clearing organization, bank or other
financial institution that holds customers' securities in the ordinary
course of its trade or business (a "Financial Institution"), and holds
the Capital Security in such capacity, certifies to the Trust or its
agent, under penalties of perjury, that such statement has been
received from the beneficial owner by it or by a Financial Institution
between it and the beneficial owner and furnishes the Trust or its
agent with a copy thereof; and (ii) a United States Alien Holder of a
Capital Security will not be subject to United States federal
withholding tax on any gain realized upon the sale or other
disposition of a Capital Security.
Information Reporting to Holders
Generally, income on the Capital Securities will be reported to
holders on Forms 1099, which forms should be mailed to holders of
Capital Securities by January 31 following each calendar year.
Backup Withholding
Payments made on, and proceeds from the sale of, the Capital
Securities may be subject to a "backup" withholding tax of 31% unless
the holder complies with certain identification requirements. Any
withheld amounts will be allowed as a credit against the holder's
United States federal income tax, provided the required information is
provided to the IRS.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE
IS INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE
DEPENDING UPON A HOLDER'S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT
THEIR TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE
PURCHASE, OWNERSHIP AND DISPOSITION OF THE CAPITAL SECURITIES,
INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER
TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL
OR OTHER TAX LAWS.
ERISA CONSIDERATIONS
The Corporation, the obligor with respect to the New Junior
Subordinated Debentures held by the Trust, and its affiliates and the
Property Trustee may be considered a "party in interest" (within the
meaning of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) or a "disqualified person" (within the meaning of
Section 4975 of the Code) with respect to many employee benefit plans
("Plans") that are subject to ERISA. Any purchaser proposing to
acquire New Capital Securities with assets of any Plan should consult
with its counsel. The purchase and/or holding of New Capital
Securities by a Plan that is subject to the fiduciary responsibility
provisions of ERISA or the prohibited transaction provisions of
Section 4975 of the Code (including individual retirement arrangements
and other plans described in Section 4975(e)(1) of the Code) and with<PAGE>
respect to which the Corporation, the Property Trustee or any
affiliate is a service provider (or otherwise is a party in interest
or a disqualified person) may constitute or result in a prohibited
transaction under ERISA or Section 4975 of the Code, unless such New
Capital Securities are acquired pursuant to and in accordance with an
applicable exemption, such as Prohibited Transaction Class Exemption
("PTCE") 84-14 (an exemption for certain transactions determined by an
independent qualified professional asset manager), PTCE 91-38 (an
exemption for certain transactions involving bank collective
investment funds), PTCE 90-1 (an exemption for certain transactions
involving insurance company pooled separate accounts), PTCE 95-60 (an
exemption for transactions involving certain insurance company general
accounts) or PTCE 95-23 (an exemption for certain transactions
determined by an in-house asset manager). In addition, a Plan
fiduciary considering the acquisition of New Capital Securities should
be aware that the assets of the Trust may be considered "plan assets"
for ERISA purposes. Therefore, a Plan fiduciary should consider
whether the acquisition of New Capital Securities could result in a
delegation of fiduciary authority to the Property Trustee, and, if so,
whether such a delegation of authority is permissible under the Plan's
governing instrument or any investment management agreement with the
Plan. In making such determination, a Plan fiduciary should note that
the Property Trustee is a U.S. bank qualified to be an investment
manager (within the meaning of section 3(38) of ERISA) to which such a
delegation of authority generally would be permissible under ERISA.
Further, prior to an Event of Default with respect to the New Junior
Subordinated Debentures, the Property Trustee will have only limited
custodial and ministerial authority with respect to Trust assets.
Under the U.S. Department of Regulations defining "Plan Assets"
for ERISA purposes (the "Plan Assets Regulations"), the assets of the
Trust will be considered plan assets of Plans owning New Capital
Securities unless the aggregate investment in New Capital Securities
by "benefit plan investors" is not deemed "significant" or the New
Capital Securities qualify as "publicly offered securities" as defined
in such Regulations. For this purpose, equity participation by
benefit plan investors will not be considered "significant" on any
date only if, immediately after the most recent acquisition of Capital
Securities, the aggregate interest in the New Capital Securities held
by benefit plan investors will be less than 25% of the value of the
New Capital Securities. Although it is possible that the equity
participation by benefit plan investors in New Capital Securities on
any date will not be "significant" for purposes of the Plan Assets
Regulations, such result cannot be assured.
The New Capital Securities may qualify as "publicly offered
securities" under Plan Assets Regulations if at the time of the
Exchange Offer they are also "widely held" and "freely transferrable."
Under such Regulations, a class of securities is "widely held" if it
is a class of securities that is owned by 100 or more investors
independent of the issuer and of one another. Although it is possible
that at the time of the Exchange Offer the New Capital Securities will
be "widely held" such result cannot be assured. Whether a security is
"freely transferrable" for purposes of the Plan Assets Regulations is
a factual question to be determined on the basis of all relevant facts
and circumstances. If at the time of the Exchange Offer the New
Capital Securities qualify as "publicly offered securities" the assets
of the Trust should not be "plan assets" with respect to Plans
acquiring New Capital Securities. If at the time of the Exchange
Offer, the New Capital Securities do not qualify as "publicly offered
securities," the "plan asset" considerations discussed in the
preceding paragraphs could be applicable in connection with the
investment by Plans in the New Capital Securities.
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Capital Securities for its
own account in connection with the Exchange Offer must acknowledge
that it will deliver a prospectus in connection with any resale of
such New Capital Securities. This Prospectus, as it may be amended or
supplemented from time to time, may be used by Participating Broker-
Dealers during the period referred to below in connection with resales
of New Capital Securities received in exchange for Old Capital
Securities if such Old Capital Securities were acquired by such
Participating Broker-Dealers for their own accounts as a result of
market-making activities or other trading activities. The Corporation
and the Trust have agreed that this Prospectus, as it may be amended
or supplemented from time to time, may be used by a Participating
Broker-Dealer in connection with resales of such New Capital
Securities for a period ending 90 days after the Expiration Date
(subject to extension under certain limited circumstances described
herein) or, if earlier, when all such New Capital Securities have been
disposed of by such Participating Broker-Dealer. However, a
Participating Broker-Dealer who intends to use this Prospectus in<PAGE>
connection with the resale of New Capital Securities received in
exchange for Old Capital Securities pursuant to the Exchange Offer
must notify the Corporation or the Trust, or cause the Corporation or
the Trust to be notified, on or prior to the Expiration Date, that it
is a Participating Broker-Dealer. Such notice may be given in the
space provided for that purpose in the Letter of Transmittal or may be
delivered to the Exchange Agent at one of the addresses set forth
herein under "The Exchange Offer -- Exchange Agent." See "The
Exchange Offer -- Resales of New Capital Securities."
The Corporation or the Trust will not receive any cash proceeds
from the issuance of the New Capital Securities offered hereby. New
Capital Securities received by broker-dealers for their own accounts
in connection with the Exchange Offer may be sold from time to time in
one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the New Capital
Securities or a combination of such methods of resale, at market
prices prevailing at the time of resale, at prices related to such
prevailing market prices or at negotiated prices. Any such resale may
be made directly to purchasers or to or through brokers or dealers who
may receive compensation in the form of commissions or concessions
from any such broker-dealer and/or the purchasers of any such New
Capital Securities.
Any broker-dealer that resells New Capital Securities that were
received by it for its own account in connection with the Exchange
Offer and any broker or dealer that participates in a distribution of
such New Capital Securities may be deemed to be an "underwriter"
within the meaning of the Securities Act, and any profit on any such
resale of New Capital Securities and any commissions or concessions
received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
LEGAL MATTERS
Certain legal matters relating to the New Junior Subordinated
Debentures and the New Guarantee will be passed upon on behalf of the
Corporation by Howard & Howard Attorneys, P.C., Kalamazoo, Michigan.
Certain matters of Delaware law relating to the New Capital Securities
will be passed upon on behalf of the Trust by Richards, Layton &
Finger, P.A., Wilmington, Delaware. Certain matters of New York law
will be passed upon on behalf of the Corporation and the Trust by
Brown & Wood LLP, New York, New York. Howard & Howard Attorneys, P.C.
will also pass upon certain matters relating to United States federal
income taxation considerations.
INDEPENDENT PUBLIC ACCOUNTANTS
The Consolidated Financial Statements of the Corporation and
subsidiaries, incorporated in this Prospectus by reference to the
Corporation's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, have been audited by KPMG Peat Marwick LLP,
independent public accountants, as stated in their reports appearing
therein.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 21. Exhibits and Financial Statement Schedules
(a) Exhibits required by Item 601 of Regulation S-K
No. Exhibit
1 Not applicable
2 Not applicable
3 Not applicable
4.1* Indenture, dated as of January 28, 1997 between First
of America Bank Corporation and The Bank of New
York, as trustee, relating to the Junior
Subordinated Debentures
4.2* Form of Certificate for New Junior Subordinated
Debenture
4.3* Certificate of Trust of First of America Capital Trust
I dated January 15, 1997
4.4* Declaration of Trust of First of America Capital Trust
I dated as of January 16, 1997
4.5* Amended and Restated Declaration of Trust for First of
America Capital Trust I dated as of January 28,
1997 4.6 Form of Certificate for New Capital<PAGE>
Security
4.6* Form of Certificate for New Capital Security
4.7* Form of New Guarantee
4.8* Registration Rights Agreement, dated as of January 28,
1997, by and among First of America Bank
Corporation, First of America Capital Trust I and
the Initial Purchasers named therein
5.1* Opinion and consent of Howard & Howard Attorneys, P.C.
to First of America Bank Corporation as to
legality of the New Junior Subordinated Debentures
and the New Guarantee to be issued by First of
America Bank Corporation
5.2** Opinion of Richards, Layton & Finger, P.A. as to
legality of the New Capital Securities to be
issued by First of America Capital Trust I
5.3* Opinion of Brown & Wood LLP as to New York law
8* Opinion of Howard & Howard Attorneys, P.C., special tax
counsel, as to certain federal income tax matters
9 Not applicable
10 Not applicable
11 Not applicable
12* Computation of ratio of earnings to fixed charges
13 Not applicable
15 Not applicable
16 Not applicable
21 Not applicable
23.1* Consent of KPMG Peat Marwick LLP
23.2* Consent of Howard & Howard Attorneys, P.C. (included in
Exhibit 5.1)
23.3* Consent of Richards, Layton & Finger, P.A. (included in
Exhibit 5.2)
23.4* Consent of Brown & Wood LLP (included in Exhibit 5.3)
24* Power of Attorney of certain officers and directors of
First of America Bank Corporation
25.1* Form T-1 Statement of Eligibility of The Bank of New
York to act as trustee under the Indenture
25.2* Form T-1 Statement of Eligibility of The Bank of
New York to act as trustee under the Amended and
Restated Declaration of Trust
25.3* Form T-1 Statement of Eligibility of The Bank of New
York to act as trustee under the New Guarantee for
the benefit of the holders of New Capital
Securities
26 Not applicable
27 Not applicable
99.1* Form of Letter of Transmittal
99.2* Form of Notice of Guaranteed Delivery
99.3* Form of Exchange Agent Agreement
__________________________________
* Previously filed
** filed herewith
(b) Financial statement schedules required by Regulation S-X
Not applicable
(c) Reports, opinions or appraisals
Not applicable
Item 22. Undertakings
Each undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of
the Exchange Act that is incorporated by reference in this Registra-
tion Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, directors and control-
ling persons of each Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of
the Commission, such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities
(other than the payment by the 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
director, officer or controlling person in connection with the securi-
ties being registered, the Registrant will, unless in the opinion of<PAGE>
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 Securities Act and will be governed by the final adjudication of
such issue.
The undersigned Registrants hereby undertake to respond to
requests for information that is incorporated by reference into the
Prospectus pursuant to Item 4, 10(b), 11 or 13 of this Form, within
one business day of receipt of such request, and to send the incorpo-
rated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to
the effective date of the registration statement through the date of
responding to the request.
The undersigned Registrants hereby undertake to supply by means
of a post-effective amendment all information concerning a transac-
tion, and the company being acquired or involved therein, that was not
the subject of and included in the registration statement when it
became effective.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, First
of America Bank Corporation certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on Form S-
4 and has duly caused this Amendment No. 1 to Form S-4 Registration
Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Kalamazoo, State of Michigan, on the
2nd day of June, 1997.
FIRST OF AMERICA BANK CORPORATION
By:/S/ RICHARD F. CHORMANN
Richard F. Chormann
Chairman, President,
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to Form S-4 Registration Statement has been signed by
the following persons in the capacities indicated on the 2nd day of
June, 1997.
/s/ RICHARD F. CHORMANN Director, Chairman, President and
Richard F. Chormann Chief Executive Officer (Principal
Executive Officer)
/s/ THOMAS W. LAMBERT* Executive Vice President and Chief
Thomas W. Lambert Financial Officer (Principal Financial
Officer and Principal Accounting
Officer)
/s/ JON E. BARFIELD* Director
Jon E. Barfield
/s/ JOHN W. BROWN* Director
John W. Brown
/s/ JOSEPH J. FITZSIMMONS* Director
Joseph J. Fitzsimmons
/s/ JOEL N. GOLDBERG* Director
Joel N. Goldberg
/s/ CLIFFORD L. GREENWALT* Director
Clifford L. Greenwalt
/s/ ROBERT L. HETZLER* Director
Robert L. Hetzler
/s/ DOROTHY A. JOHNSON* Director
Dorothy A. Johnson
/s/ MARTHA MAYHOOD MERTZ* Director
Martha Mayhood Mertz
/s/ DANIEL R. SMITH* Director
Daniel R. Smith<PAGE>
/s/ LEY S. SMITH* Director
Ley S. Smith
/s/ JAMES S. WARE* Director
James S. Ware
By: /s/ RICHARD F. CHORMANN
Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, First
of America Capital Trust I certifies that it has reasonable grounds to
believe that it meets all the requirements for filing on Form S-4 and
has duly caused this Amendment No. 1 to Form S-4 Registration
Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Kalamazoo, State of Michigan, on the
2nd day of June, 1997.
FIRST OF AMERICA CAPITAL TRUST I
By: /s/ THOMAS W. LAMBERT
Thomas W. Lambert,
as Administrative Trustee
By: /s/ SAMUEL G. STONE
Samuel G. Stone,
as Administrative Trustee
By: /s/ JOHN H. MINER
John H. Miner,
as Administrative Trustee<PAGE>
Exhibit 5.2
May 27, 1997
First of America Capital Trust I
First of America Bank Corporation
c/o David E. Riggs, Esquire
Howard & Howard
Kalamazoo Building, Suite 400
107 West Michigan Avenue
Kalamazoo, MI 49007-3956
Re: First of America Capital Trust I
Ladies and Gentlemen:
We have acted as special Delaware counsel for First of America
Capital Trust I, a Delaware business trust (the "Trust"), in
connection with the matters set forth herein. At your request, this
opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of
originals or copies of the following:
(a) The Certificate of Trust of the Trust, dated January 15, 1997
(the "Certificate"), as filed in the office of the Secretary of
State of the State of Delaware (the "Secretary of State") on
January 16, 1997;
(b) The Declaration of Trust of the Trust, dated as of January 16,
1997, as amended and restated by the Amended and Restated
Declaration of Trust of the Trust, dated as of January 28, 1997
(including Annex I and Exhibits A-1 and A-2 thereto)
(collectively, the "Declaration"), among First of America Bank
Corporation, a Michigan corporation (the "Company"), as Sponsor,
the trustees of the Trust named therein (collectively, the
"Trustees") and the holders, from time to time, of undivided
beneficial interests in the assets of the Trust;
(c) The Registration Statement (the "Registration Statement") on Form
S-4, including a prospectus with respect to the Company and the
Trust (the "Prospectus"), relating to, among other things, the
8.12% Capital Securities, Series B, of the Trust representing
preferred undivided beneficial interests in the assets of the
Trust (each, an "Exchange Security" and collectively, the
"Exchange Securities"), filed by the Company and the Trust with
the Securities and Exchange Commission; and
(d) A Certificate of Good Standing for the Trust, dated May 27, 1997,
obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined
are used as defined in the Declaration.
For purposes of this opinion, we have not reviewed any documents
other than the documents listed above, and we have assumed that there
exists no provision in any document that we have not reviewed that
bears upon or is inconsistent with the opinions stated herein. We have
conducted no independent factual investigation of our own but rather
have relied solely upon the foregoing documents, the statements and
information set forth therein and the additional matters recited or
assumed herein, all of which we have assumed to be true, complete and
accurate in all material respects.
With respect to all documents examined by us, we have assumed (i)
the authenticity of all documents submitted to us as authentic
originals, (ii) the conformity with the originals of all documents
submitted to us as copies or forms, and (iii) the genuineness of all
signatures.
For purposes of this opinion, we have assumed (i) that the
Declaration constitutes the entire agreement among the parties thereto<PAGE>
with respect to the subject matter thereof, including with respect to
the creation, operation and termination of the Trust, and that the
Declaration and the Certificate are in full force and effect and have
not been amended, (ii) except to the extent provided in paragraph 1
below, the due creation or due organization or due formation, as the
case may be, and valid existence in good standing of each party to the
documents examined by us under the laws of the jurisdiction governing
its creation, organization or formation, (iii) the legal capacity of
natural persons who are parties to the documents examined by us, (iv)
that each of the parties to the documents examined by us has the power
and authority to execute and deliver, and to perform its obligations
under, such documents, (v) the due authorization, execution and
delivery by all parties thereto of all documents examined by us, (vi)
the receipt by each Person to whom an Exchange Security is to be
issued by the Trust (collectively, the "Security Holders") of a
certificate for such Exchange Security and the payment for the
Exchange Security acquired by it, in accordance with the Declaration
and the Prospectus, and (vii) that the Exchange Securities are issued
and sold to the Security Holders in accordance with the Declaration
and the Prospectus. We have not participated in the preparation of the
Prospectus and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have
not considered and express no opinion on the laws of any other
jurisdiction, including federal laws and rules and regulations
relating thereto. Our opinions are rendered only with respect to
Delaware laws and rules, regulations and orders thereunder which are
currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have
considered necessary or appropriate, and subject to the assumptions,
qualifications, limitations and exceptions set forth herein, we are of
the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust
Act.
2. When issued and sold, the Exchange Securities will represent
valid and, subject to the qualifications set forth in paragraph 3
below, fully paid and nonassessable undivided beneficial interests in
the assets of the Trust.
3. The Security Holders, as beneficial owners of the Trust,
will be entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware. We note that the
Security Holders may be obligated to make payments as set forth in the
Declaration.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In
addition, we hereby consent to the use of our name under the heading
"Legal Matters" in the Prospectus. In giving the foregoing consents,
we do not thereby admit that we come within the category of Persons
whose consent is required under Section 7 of the Securities Act of
1933, as amended, or the rules and regulations of the Securities and
Exchange Commission thereunder. Except as stated above, without our
prior written consent, this opinion may not be furnished or quoted to,
or relied upon by, any other Person for any purpose.
Very truly yours,
EAM
/S/ RICHARDS, LAYTON AND FINGER<PAGE>
