<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 29, 1997
REGISTRATION NOS. 333- AND 333- -01
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
FIRST UNION CORPORATION FIRST UNION INSTITUTIONAL CAPITAL II
<S> <C>
(Exact name of registrant as specified in its charter) (Exact name of registrant as specified in its Issuer Agreement)
NORTH CAROLINA DELAWARE
(State or other jurisdiction of incorporation or organization) (State or other jurisdiction of incorporation or organization)
6712 6719
(Primary standard industrial (Primary standard industrial
classification code number) classification code number)
56-0898180 APPLIED FOR
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
ONE FIRST UNION CENTER C/O FIRST UNION CORPORATION
CHARLOTTE, NORTH CAROLINA 28288-0013 ONE FIRST UNION CENTER
(704) 374-6565 CHARLOTTE, NORTH CAROLINA 28288-0013
(704) 374-6565
(Address, including zip code, and telephone number, including (Address, including zip code, and telephone number, including area
area code, of registrant's principal executive offices) code, of registrant's principal executive offices)
</TABLE>
MARION A. COWELL, JR., ESQ.
EXECUTIVE VICE PRESIDENT, SECRETARY & GENERAL COUNSEL
FIRST UNION CORPORATION
ONE FIRST UNION CENTER
CHARLOTTE, NORTH CAROLINA 28288-0013
(704) 374-6565
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
WITH A COPY TO:
MITCHELL S. EITEL, ESQ.
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
(212) 558-4000
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC:
As promptly as practicable after the effective date of this Registration
Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF EACH CLASS PROPOSED MINIMUM PROPOSED MAXIMUM
OF SECURITIES TO AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING
BE REGISTERED REGISTERED (1) PER UNIT (2) PRICE (2)
<S> <C> <C> <C>
Junior Subordinated Deferrable Interest
Debentures of First Union Corporation
(2)................................... $250,000,000 $1,000.00 $250,000,000
7.85% Capital Securities of First Union
Institutional Capital II (3).......... 250,000 $1,000.00 $250,000,000
First Union Corporation Guarantee with
respect to Capital Securities (3)(4)... N/A N/A N/A
Total................................... $250,000,000(5) 100% $250,000,000(5)
<CAPTION>
TITLE OF EACH CLASS AMOUNT OF
OF SECURITIES TO REGISTRATION
BE REGISTERED FEE
<S> <C>
Junior Subordinated Deferrable Interest
Debentures of First Union Corporation
(2)................................... N/A
7.85% Capital Securities of First Union
Institutional Capital II (3).......... $75,758
First Union Corporation Guarantee with
respect to Capital Securities (3)(4)... N/A
Total................................... $75,758
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee.
(2) The Junior Subordinated Deferrable Interest Debentures were purchased by
First Union Institutional Capital II with the proceeds of the sale of the
Capital Securities. No separate consideration will be received from
purchasers of Capital Securities for the Junior Subordinated Deferrable
Interest Debentures.
(3) This Registration Statement is deemed to cover the Junior Subordinated
Deferrable Interest Debentures of First Union Corporation, the rights of
holders of Junior Subordinated Deferrable Interest Debentures of First Union
Corporation under the Indenture, the rights of holders of Capital Securities
of First Union Institutional Capital II under the Trust Agreement, the
rights of holders of the Capital Securities under the Guarantee of First
Union Corporation and the Expense Agreement entered into by First Union
Corporation, which taken together fully and unconditionally guarantee the
obligations of First Union Institutional Capital II under the Capital
Securities.
(4) No separate consideration will be received for the First Union Corporation
Guarantee.
(5) Such amounts represent the aggregate liquidation amount of Capital
Securities to be issued and exchanged hereunder and the principal amount of
Junior Subordinated Deferrable Interest Debentures that may be distributed
upon liquidation of First Union Institutional Capital II.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE OR UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
CROSS-REFERENCE SHEET PURSUANT TO ITEM 501(B) OF REGULATION S-K
SHOWING THE LOCATION IN THE PROSPECTUS OF THE RESPONSES
TO THE ITEMS OF PART I OF FORM S-4.
<TABLE>
<CAPTION>
FORM S-4 ITEM LOCATION IN PROSPECTUS
<C> <S> <C>
1. Forepart of Registration Statement and Outside Front Cover Page of
Prospectus......................................................... OUTSIDE FRONT COVER PAGE; FACING PAGE
2. Inside Front and Outside Back Cover Pages of Prospectus............ AVAILABLE INFORMATION; TABLE OF CONTENTS
3. Risk Factors, Ratio of Earnings to Fixed Charges and Other
Information........................................................ RISK FACTORS; CONSOLIDATED RATIOS OF EARNINGS TO
FIXED CHARGES
4. Terms of the Transaction........................................... OUTSIDE FRONT COVER PAGE; SUMMARY; THE ISSUER;
THE CORPORATION; USE OF PROCEEDS;
CAPITALIZATION; ACCOUNTING TREATMENT; THE
EXCHANGE OFFER; DESCRIPTION OF NEW SECURITIES;
DESCRIPTION OF OLD SECURITIES; RELATIONSHIP
AMONG CAPITAL SECURITIES, SUBORDINATED
DEBENTURES AND GUARANTEE; CERTAIN FEDERAL INCOME
TAX CONSEQUENCES; CERTAIN ERISA CONSIDERATIONS;
PLAN OF DISTRIBUTION
5. Pro Forma Financial Information.................................... INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE;
CAPITALIZATION
6. Material Contacts with the Company Being Acquired.................. *
7. Additional Information Required for Reoffering by Persons and
Parties Deemed to Be Underwriters.................................. *
8. Interests of Named Experts and Counsel............................. VALIDITY OF NEW SECURITIES; EXPERTS
9. Disclosure of Commission Position on Indemnification for Securities
Act Liabilities.................................................... *
10. Information with Respect to S-3 Registrants........................ INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE;
SUMMARY; THE CORPORATION
11. Incorporation of Certain Information by Reference.................. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
12. Information with Respect to S-2 or S-3 Registrants................. *
13. Incorporation of Certain Information by Reference.................. *
14. Information with Respect to Registrants Other Than S-3 or S-2
Registrants........................................................ AVAILABLE INFORMATION; THE ISSUER
15. Information with Respect to S-3 Companies.......................... *
16. Information with Respect to S-2 or S-3 Companies................... *
17. Information with Respect to Companies Other Than S-2 or S-3
Companies.......................................................... *
18. Information if Proxies, Consents or Authorizations are to be
Solicited.......................................................... *
19. Information if Proxies, Consents or Authorizations are not to be
Solicited, or in an Exchange Offer................................. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
</TABLE>
* Not Applicable.
<PAGE>
(Red Herring language appears at 90 degrees and reads as follows)
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 STATE.
PROSPECTUS
SUBJECT TO COMPLETION, DATED JANUARY , 1997
(First Union $250,000,000
Logo appears here) FIRST UNION INSTITUTIONAL CAPITAL II
OFFER TO EXCHANGE ITS 7.85% CAPITAL SECURITIES
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 FOR ANY
AND ALL OF ITS OUTSTANDING 7.85% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
GUARANTEED, TO THE EXTENT DESCRIBED HEREIN, BY
FIRST UNION CORPORATION
The Exchange Offer and Withdrawal Rights will expire at 5:00 p.m.,
New York City time, on , 1997, unless extended.
First Union Institutional Capital II, a statutory business trust created
under the laws of the State of Delaware (the "Issuer"), 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 $250,000,000 aggregate Liquidation Amount (as defined
herein) of its 7.85% Capital Securities (Liquidation Amount $1,000 per Capital
Security) (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 7.85% Capital
Securities (Liquidation Amount $1,000 per Capital Security) (the "Old Capital
Securities"), of which $250,000,000 aggregate Liquidation Amount is outstanding.
Pursuant to the Exchange Offer, First Union Corporation, a North Carolina
corporation (the "Corporation"), is also exchanging (i) its guarantee with
respect to the payment of Distributions (as defined herein) and other payments
on liquidation or redemption of the Old Capital Securities (the "Old Guarantee")
for a like guarantee with respect to the New Capital Securities (the "New
Guarantee"), and (ii) all of its outstanding 7.85% Junior Subordinated
Deferrable Interest Debentures (the "Old Subordinated Debentures"), of which
$257,732,000 aggregate principal amount is outstanding, for a like aggregate
principal amount of its 7.85% Junior Subordinated Deferrable Interest Debentures
(the "New Subordinated Debentures"), which New Guarantee and New Subordinated
Debentures also have been registered under the Securities Act. The Old Capital
Securities, the Old Guarantee and the Old Subordinated Debentures are
collectively referred to herein as the "Old Securities" and the New Capital
Securities, the New Guarantee and the New 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 provide for any increase in the Distribution
rate thereon, and (iii) the New Subordinated Debentures will not provide for any
increase in the interest rate thereon. See "Description of New Securities" 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
Issuer under the Registration Rights Agreement, dated as of January 6, 1997 (the
"Registration Rights Agreement"), among the Corporation, the Issuer and the
Initial Purchaser (as defined herein) of the Old Capital Securities. 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 Trust Agreement (as defined herein).
(CONTINUED ON NEXT PAGE)
SEE "RISK FACTORS" BEGINNING ON PAGE 13 FOR CERTAIN INFORMATION RELEVANT TO
AN INVESTMENT IN THE NEW CAPITAL SECURITIES, INCLUDING THE PERIOD AND
CIRCUMSTANCES DURING AND UNDER WHICH PAYMENT OF DISTRIBUTIONS ON THE NEW CAPITAL
SECURITIES MAY BE DEFERRED AND CERTAIN RELATED UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES.
THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is , 1997.
<PAGE>
(cover page continued)
The New Capital Securities represent preferred undivided beneficial
interests in the assets of the Issuer. The Corporation is the owner of all of
the common undivided beneficial interests in the assets of the Issuer (the
"Common Securities" and, collectively with the Capital Securities (as defined
herein), the "Trust Securities"). The Issuer exists for the sole purpose of
issuing the Trust Securities and investing the proceeds thereof in the
Subordinated Debentures (as defined herein). The Subordinated Debentures will
mature on January 1, 2027 (the "Stated Maturity"). The Capital Securities will
have a preference under certain circumstances with respect to Distributions and
amounts payable on liquidation, redemption or otherwise over the Common
Securities. See "Description of New Securities" -- "Description of Capital
Securities; SUBORDINATION OF COMMON SECURITIES".
As used herein, (i) the "Indenture" means the Junior Subordinated Indenture
relating to the Subordinated Debentures, as amended and supplemented from time
to time, between the Corporation and Wilmington Trust Company, as trustee (the
"Debenture Trustee"), (ii) the "Trust Agreement" means the Amended and Restated
Trust Agreement relating to the Issuer among the Corporation, as Depositor,
Wilmington Trust Company, as Property Trustee (the "Property Trustee"), and
Wilmington Trust Company, as Delaware Trustee (the "Delaware Trustee") (the
Property Trustee and Delaware Trustee collectively, the "Issuer Trustees"), and
the holders from time to time of the undivided beneficial interests in the
assets of the Issuer, (iii) the "Guarantee" means the Guarantee Agreement
between the Corporation and Wilmington Trust Company, as trustee (the "Guarantee
Trustee"), providing a guarantee, on the terms and conditions described herein,
for the benefit of holders of the Capital Securities, and (iv) the "Expense
Agreement" means the Expense Agreement between the Corporation and the Issuer.
In addition, as the context may require, unless expressly stated otherwise, (i)
the "Capital Securities" means the Old Capital Securities and the New Capital
Securities, (ii) the "Subordinated Debentures" means the Old Subordinated
Debentures and the New Subordinated Debentures, and (iii) the "Guarantee" means
the Old Guarantee and the New Guarantee.
Except as provided below, the Capital Securities will be represented by
global Capital Securities in fully registered form, deposited with a custodian
for and registered in the name of a nominee of The Depository Trust Company
("DTC"). Beneficial interests in such Capital Securities will be shown on, and
transfers thereof will be effected through, records maintained by DTC and its
participants. Beneficial interests in such Capital Securities 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. The Capital
Securities will be issued, and may be transferred, only in blocks having a
Liquidation Amount of not less than $100,000 (100 Capital Securities). See
"Description of New Securities -- Description of Capital Securities; FORM,
DENOMINATION, BOOK-ENTRY PROCEDURES AND TRANSFER".
Holders of the Capital Securities will be entitled to receive preferential
cumulative cash distributions accruing from the date of original issuance and
payable semi-annually in arrears on January 1 and July 1 of each year,
commencing July 1, 1997, at the annual rate of 7.85% of the Liquidation Amount
of $1,000 per Capital Security ("Distributions"). The Corporation has the right
to defer payment of interest on the Subordinated Debentures at any time or from
time to time for a period not exceeding 10 consecutive semi-annual periods with
respect to each deferral period (each, an "Extension Period"), provided that no
Extension Period may extend beyond the Stated Maturity of the Subordinated
Debentures. 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 interest payments on the
Subordinated Debentures are so deferred, Distributions on the Capital Securities
will also be deferred and the Corporation will not be permitted, subject to
certain exceptions described herein, to declare or pay any cash distributions
with respect to the Corporation's capital stock or debt securities of the
Corporation that rank PARI PASSU with or junior to the Subordinated Debentures.
During an Extension Period, interest on the Subordinated Debentures will
continue to accrue (and the amount of Distributions to which holders of the
Capital Securities are entitled will accumulate) at the rate of 7.85% per annum,
compounded semi-annually, and holders of the Capital Securities will be required
to recognize income (in the form of original issue discount) for United States
federal income tax purposes. See "Description of New Securities -- Description
of Subordinated Debentures; OPTION TO EXTEND INTEREST PAYMENT PERIOD" and
"Certain Federal Income Tax Consequences -- Interest Income and Original Issue
Discount".
The Corporation has, through the Guarantee, the Trust Agreement, the
Subordinated Debentures, the Indenture and the Expense Agreement, taken
together, fully and unconditionally guaranteed all of the Issuer's obligations
under the Capital Securities. See "Relationship Among Capital Securities,
Subordinated Debentures and Guarantee -- Full and Unconditional Guarantee". The
Guarantee of the Corporation guarantees the payment of Distributions and
payments on liquidation or redemption of the Capital Securities, but only in
each case to the extent of funds held by the Issuer, as described herein. See
"Description of New Securities -- Description of Guarantee". If the Corporation
does not make interest payments on the
2
<PAGE>
(cover page continued)
Subordinated Debentures held by the Issuer, the Issuer will have insufficient
funds to pay Distributions on the Capital Securities. The Guarantee does not
cover payment of Distributions when the Issuer does not have sufficient funds to
pay such Distributions. In such event, under the Indenture a holder of the
Capital Securities may institute a legal proceeding directly against the
Corporation to enforce payment of such amounts. See "Description of New
Securities -- Description of Subordinated Debentures; ENFORCEMENT OF CERTAIN
RIGHTS BY HOLDERS OF CAPITAL SECURITIES". The obligations of the Corporation
under the Guarantee and the Subordinated Debentures are unsecured and
subordinate and junior in right of payment to all Senior Debt (as defined
herein) of the Corporation. See "Description of New Securities -- Description of
Subordinated Debentures; SUBORDINATION".
The Capital Securities are subject to mandatory redemption, in whole or in
part, upon repayment of the Subordinated Debentures at maturity or their earlier
redemption. The Subordinated Debentures are redeemable prior to maturity at the
option of the Corporation (i) on or after January 1, 2007, in whole at any time
or in part from time to time at the redemption prices set forth herein, or (ii)
at any time, in whole (but not in part), upon the occurrence and continuation of
a Special Event (as defined herein), at a redemption price equal to the Special
Event Redemption Price (as defined herein). See "Description of New
Securities -- Description of Capital Securities; REDEMPTION".
The holder of the Common Securities (I.E., the Corporation) will have the
right at any time to terminate the Issuer and in the event of such termination,
after satisfaction of liabilities to creditors of the Issuer in accordance with
applicable law and the Expense Agreement, the holders of the Capital Securities
will be entitled to receive as a preference a Liquidation Amount of $1,000 per
Capital Security plus accumulated and unpaid Distributions thereon to the date
of payment, which may be in the form of a distribution of a Like Amount (as
defined herein) in Subordinated Debentures, subject to certain exceptions. See
"Description of New Securities -- Description of Capital Securities; LIQUIDATION
DISTRIBUTION UPON Termination".
The Issuer 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 Issuer 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, and subject to the two immediately following sentences, the
Corporation and the Issuer 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
Issuer within the meaning of Rule 405 under the Securities Act (an "Affiliate")
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 Issuer to resell pursuant to Rule 144A under the
Securities Act ("Rule 144A") or any other available exemption under the
Securities Act, (i) 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, (ii) will not be entitled to tender such
Old Capital Securities in the Exchange Offer and (iii) 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 (a "Participating 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 Participating 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, (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. The Letter of Transmittal
contains the foregoing representations. In addition, the Corporation and the
Issuer may require such holder, as a condition to such holder's eligibility to
participate in the
3
<PAGE>
(cover page continued)
Exchange Offer, to furnish to the Corporation and the Issuer (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
(the "Exchange Act")) on behalf of whom such holder holds the Capital Securities
to be exchanged in the Exchange Offer. Each Participating Broker-Dealer that
receives New Capital Securities for its own account pursuant to the Exchange
Offer will be deemed to have acknowledged by execution of the Letter of
Transmittal or delivery of an Agent's Message (as defined herein) 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
Participating 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 Issuer
believe that 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 Issuer 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 180 days after the Expiration Date (as defined herein) or, if
earlier, when all such New Capital Securities have been disposed of by such
Participating Broker-Dealer. See "Plan of Distribution". Any person, including
any Participating Broker-Dealer, who is an Affiliate 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 or delivery of an Agent's Message, that,
upon receipt of notice from the Corporation or the Issuer 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 the
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
Securities pursuant to this Prospectus until the Corporation or the Issuer 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 Issuer has given notice
that the sale of the New Securities 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. There
can be no assurance as to the development or liquidity of any market for the New
Capital Securities. The Corporation currently does not intend to apply for
listing of the New Capital Securities on any securities exchange or for
quotation through the National Association of Securities Dealers Automated
Quotation System.
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 Issuer 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".
4
<PAGE>
(cover page continued)
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 and the Issuer (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 Issuer and to the terms and provisions
of the Registration Rights Agreement. Old Capital Securities may be tendered in
whole or in part having a Liquidation Amount of not less than $100,000 (100
Capital Securities) and or any integral multiple of $1,000 Liquidation Amount (1
Capital Security) in excess thereof. The Corporation has agreed to pay all
expenses of the Exchange Offer, except as otherwise specified herein. See "The
Exchange Offer -- Fees and Expenses". Each New Capital Security will pay
cumulative Distributions from the most recent Distribution Date (as defined
herein) on the Old Capital Securities surrendered in exchange for such New
Capital Securities or, if no Distributions have been paid on such Old Capital
Securities, from January 6, 1997. Holders of the Old Capital Securities whose
Old Capital Securities are accepted for exchange will not receive accumulated
Distributions on such Old Capital Securities for any period from and after the
last Distribution Date on such Old Capital Securities prior to the original
issue date of the New Capital Securities or, if no such Distributions have been
paid, will not receive any accumulated 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 such
Distribution Date or, if no such interest has been paid or duly provided for,
from and after January 6, 1997. This Prospectus, together with the Letter of
Transmittal, is being sent to all registered holders of Old Capital Securities
as of , 1997.
Neither the Corporation nor the Issuer will receive any 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".
This Prospectus may be used by First Union Capital Markets Corp., an
affiliate of the Corporation, in connection with offers and sales related to
market-making transactions in New Securities effected from time to time after
the commencement of the offering to which this Prospectus relates. First Union
Capital Markets Corp. may act as principal or agent in such transactions,
including as agent for the counterparty when acting as principal or as agent for
both counterparties, and may receive compensation in the form of discounts and
commissions, including from both counterparties when it acts as agent for both.
Such sales will be made at prevailing market prices at the time of sale, at
prices related thereto or at negotiated prices.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST FROM
INVESTOR RELATIONS, FIRST UNION CORPORATION, TWO FIRST UNION CENTER, CHARLOTTE,
NORTH CAROLINA 28288-0206, TELEPHONE NUMBER (704) 374-6782. IN ORDER TO ENSURE
TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY ,
1997.
THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA HAS NOT
APPROVED OR DISAPPROVED THIS OFFERING, NOR HAS THE COMMISSIONER PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
THE NEW CAPITAL SECURITIES WILL BE ISSUED, AND CAPITAL SECURITIES MAY BE
TRANSFERRED, ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN
$100,000. ANY TRANSFER, SALE OR OTHER DISPOSITION OF CAPITAL SECURITIES IN A
BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE
VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT
TO BE THE HOLDER OF SUCH CAPITAL SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT
LIMITED TO THE RECEIPT OF DISTRIBUTIONS ON SUCH CAPITAL SECURITIES, AND SUCH
TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL
SECURITIES.
5
<PAGE>
NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH, A "PLAN"), NO
ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S
INVESTMENT IN THE ENTITY (A "PLAN ASSET ENTITY"), AND NO PERSON INVESTING "PLAN
ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD THE CAPITAL SECURITIES OR ANY INTEREST
THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF
AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION
("PTCE") 96-23, 95-60, 91-38, 90-1 OR 84-14 WITH RESPECT TO SUCH PURCHASE OR
HOLDING. ANY PURCHASER OR HOLDER OF THE CAPITAL SECURITIES OR ANY INTEREST
THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF
THAT IT EITHER (I) IS NOT A PLAN OR A PLAN ASSET ENTITY AND IS NOT PURCHASING
SUCH SECURITIES ON BEHALF OF OR WITH "PLAN ASSETS" OF ANY PLAN, OR (II) IS
ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER PTCE 96-23, 95-60, 91-38, 90-1
OR 84-14 WITH RESPECT TO SUCH PURCHASE OR HOLDING.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Available Information.................................................................................................. 7
Incorporation of Certain Documents by Reference........................................................................ 7
Summary................................................................................................................ 8
Risk Factors........................................................................................................... 13
The Issuer............................................................................................................. 17
The Corporation........................................................................................................ 19
Consolidated Ratios of Earnings to Fixed Charges....................................................................... 23
Use of Proceeds........................................................................................................ 23
Capitalization......................................................................................................... 24
Accounting Treatment................................................................................................... 25
The Exchange Offer..................................................................................................... 26
Description of New Securities.......................................................................................... 34
Description of Old Securities.......................................................................................... 53
Relationship Among Capital Securities, Subordinated Debentures and Guarantee........................................... 54
Certain Federal Income Tax Consequences................................................................................ 56
Certain ERISA Considerations........................................................................................... 58
Plan of Distribution................................................................................................... 59
Validity of New Capital Securities..................................................................................... 60
Experts................................................................................................................ 60
</TABLE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE CORPORATION OR THE ISSUER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
OF ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR AN OFFER TO
ANY PERSON IN ANY JURISDICTION WHERE SUCH OFFER WOULD BE UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE
AFFAIRS OF THE CORPORATION OR THE ISSUER SINCE THE DATE HEREOF.
6
<PAGE>
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Exchange Act and in accordance therewith, files reports, proxy statements and
other information with the Commission. Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities of
the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and
at the regional offices of the Commission located at 7 World Trade Center, 13th
Floor, Suite 1300, New York, New York 10048 and Suite 1400, Citicorp Center,
14th Floor, 500 West Madison Street, Chicago, Illinois 60661. Copies of such
material can also be obtained at prescribed rates by writing to the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. Such material may also be accessed electronically by means of the
Commission's home page on the Internet at http://www.sec.gov. In addition, such
reports, proxy statements and other information concerning the Corporation can
be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005.
The Corporation and the Issuer have filed with the Commission a
Registration Statement on Form S-4 (together with all amendments and exhibits
thereto, the "Registration Statement") under the Securities Act with respect to
the securities offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement, certain portions of which
have been omitted as permitted by the rules and regulations of the Commission.
For further information with respect to the Corporation and the securities
offered hereby, reference is made to the Registration Statement and the exhibits
and the financial statements, notes and schedules filed as part thereof or
incorporated by reference therein, which may be inspected at the public
reference facilities of the Commission, at the addresses set forth above.
Statements made in this Prospectus concerning the contents of any documents
referred to herein are not necessarily complete, and in each instance are
qualified in all respects by reference to the copy of such document filed as an
exhibit to the Registration Statement.
No separate financial statements of the Issuer have been included herein.
The Corporation and the Issuer do not consider that such financial statements
would be material to holders of the Capital Securities because the Issuer is a
newly formed special purpose entity, has no operating history or independent
operations and is not engaged in and does not propose to engage in any activity
other than holding as trust assets the Subordinated Debentures of the
Corporation and issuing the Trust Securities. The Corporation has, through the
Guarantee, the Trust Agreement, the Subordinated Debentures, the Indenture and
the Expense Agreement, taken together, fully and unconditionally guaranteed all
of the Issuer's obligations under the Capital Securities. See "The Issuer" and
"Description of New Securities". In addition, the Corporation does not expect
that the Issuer will be filing reports under the Exchange Act with the
Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Corporation with the Commission (File
No. 1-10000) pursuant to Section 13(a) or 15(d) of the Exchange Act are
incorporated into this Prospectus by reference:
1. the Corporation's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995;
2. the Corporation's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1996, June 30, 1996, and September 30, 1996; and
3. the Corporation's Current Reports on Form 8-K dated January 10, 1996,
February 9, 1996, August 20, 1996, September 6, 1996, October 16, 1996
and January 13, 1997.
Each document or report filed by the Corporation pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the
termination of any offering of securities made by this Prospectus shall be
deemed to be incorporated by reference into this Prospectus from the date of
filing of such document. Any statement contained herein or in a document all or
a portion of which is incorporated or deemed to be incorporated by reference
herein or therein, shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
This Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. The Corporation will provide without charge to any
person to whom this Prospectus is delivered, on the written or oral request of
such person, a copy of any or all of the foregoing documents incorporated by
reference herein (other than exhibits not specifically incorporated by reference
into the texts of such documents). Requests for such documents should be
directed to: Investor Relations, First Union Corporation, Two First Union
Center, Charlotte, North Carolina 28288-0206, telephone number (704) 374-6782.
7
<PAGE>
SUMMARY
THE FOLLOWING IS A SUMMARY OF CERTAIN INFORMATION CONTAINED HEREIN AND
SHOULD BE READ IN CONJUNCTION WITH SUCH INFORMATION CONTAINED ELSEWHERE IN THIS
PROSPECTUS AND IS SUBJECT TO, AND QUALIFIED IN ITS ENTIRETY BY REFERENCE TO,
SUCH INFORMATION. CAPITALIZED TERMS USED HEREIN HAVE THE RESPECTIVE MEANINGS
ASCRIBED TO THEM ELSEWHERE IN THIS PROSPECTUS.
EXCHANGE OFFER
Up to $250,000,000 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 in excess thereof, provided that if any Old Capital
Securities are tendered in exchange for part, the untendered Liquidation Amount
must be $100,000 or any integral multiple of $1,000 in excess thereof. The
Corporation and the Issuer 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
The Expiration Date of the Exchange Offer will be 5:00 p.m., New York City
time, on , 1997, unless the Exchange Offer is extended by the
Corporation and the Issuer. See "The Exchange Offer -- Expiration Date;
Extensions; Amendments".
CONDITIONS TO EXCHANGE OFFER
The Exchange Offer is subject to certain conditions, which may be waived by
the Corporation and the Issuer 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 Exchange Offer". The
Corporation and the Issuer reserve the right in their sole 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 -- Expiration
Date; Extensions; Amendments".
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
Wilmington Trust Company, as Exchange Agent (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,
including an Agent's Message in lieu of the Letter of Transmittal. 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 Issuer. Such documents should only
be sent to the Exchange Agent. Questions regarding how to tender and requests
for information should be directed to the Exchange Agent. See "The Exchange
Offer -- Exchange Agent".
8
<PAGE>
RESALES OF NEW CAPITAL SECURITIES
The Corporation and the Issuer 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 Issuer
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, and subject to the two immediately
following sentences, the Corporation and the Issuer 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 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 Issuer to resell pursuant to Rule
144A or any other available exemption under the Securities Act, (i) 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,
(ii) will not be permitted or entitled to tender such Old Capital Securities in
the Exchange Offer, and (iii) 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, any
Participating 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 that 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, (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. The Letter of Transmittal
contains the foregoing representations. Each Participating Broker-Dealer will be
deemed to have acknowledged by execution of the Letter of Transmittal or
delivery of an Agent's Message (as defined herein) 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 Participating 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 Issuer believe that 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 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 -- Resale of New Capital
Securities", the Corporation and the Issuer 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 180 days after the Expiration Date or, if
earlier, when all such New Capital Securities have been disposed of by such
Participating Broker-Dealer. See "Plan of Distribution". Any person, including
any Participating Broker-Dealer, who is an Affiliate 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".
9
<PAGE>
EXCHANGE AGENT
The Exchange Agent is Wilmington Trust Company. The address and telephone
and facsimile numbers of the Exchange Agent are set forth under "The Exchange
Offer -- Exchange Agent" and in the Letter of Transmittal.
USE OF PROCEEDS
Neither the Corporation nor the Issuer will receive any proceeds from the
issuance of the New Capital Securities offered hereby. See "Use of Proceeds".
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS; CERTAIN ERISA CONSIDERATIONS
Holders of Old Capital Securities should review the information set forth
under "Certain Federal Income Tax Considerations" and "Certain ERISA
Considerations" prior to tendering Old Capital Securities in the Exchange Offer.
NEW SECURITIES
GENERAL
The Capital Securities represent preferred undivided beneficial interests
in the assets of the Issuer and will have a preference under certain
circumstances with respect to Distributions and amounts payable on liquidation,
redemption or otherwise over the Common Securities. See "Description of New
Securities -- Description of Capital Securities; SUBORDINATION OF COMMON
SECURITIES". The sole assets of the Issuer are the Subordinated Debentures, and
payments under the Subordinated Debentures will be the sole revenue of the
Issuer. The Subordinated Debentures are unsecured subordinated debt securities
issued under the Indenture between the Corporation and Wilmington Trust Company,
as trustee.
SECURITIES OFFERED
The Issuer is offering up to $250,000,000 aggregate Liquidation Amount of
the Issuer's 7.85% Capital Securities which have been registered under the
Securities Act (Liquidation Amount $1,000 per Capital Security). The New Capital
Securities will be issued, and the Old Capital Securities were issued, under the
Trust Agreement. The New Capital Securities and any Old Capital Securities which
remain outstanding after consummation of the Exchange Offer will constitute a
single series of Capital Securities under the Trust Agreement and, accordingly,
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 Trust Agreement. See
"Description of New Securities -- Description of Capital Securities; GENERAL".
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 therefore are not
subject to certain restrictions on transfer applicable to the Old Capital
Securities and will not provide for any increase in the Distribution rate
thereon. See "The Exchange Offer -- Purpose of Exchange Offer", "Description of
New Securities" and "Description of Old Securities".
DISTRIBUTIONS
Holders of the Capital Securities will be entitled to receive as a
preference cumulative Distributions accruing from the date of original issuance
of the Old Capital Securities and payable semi-annually in arrears on January 1
and July 1 of each year (the "Distribution Dates"), commencing July 1, 1997, at
the rate of 7.85% per annum, to the persons in whose names the Capital
Securities are registered at the close of business on the relevant record dates.
See "Description of New Securities -- Description of Capital Securities;
DISTRIBUTIONS".
Holders of Old Capital Securities whose Old Capital Securities are accepted
for exchange will not receive accumulated Distributions on such Old Capital
Securities for any period from and after the last Distribution Date with respect
to such Old Capital Securities prior to the original issue date of the New
Capital Securities or, if no such Distributions have been made, will not receive
any accumulated 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 such Distribution Date or, if no such
Distributions have been made, from and after January 6, 1996.
The Subordinated Debentures are unsecured and rank subordinate and junior
in right of payment to all Senior Debt of the Corporation. The ability of the
Issuer to pay amounts due on the Capital Securities is solely dependent upon the
Corporation making payments on the Subordinated Debentures as and when required.
See "Risk Factors -- Ranking of Subordinated Obligations Under Guarantee and
Subordinated Debentures".
10
<PAGE>
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as no Debenture Event of Default (as defined herein) has occurred
and is continuing, the Corporation has the right to defer payments of interest
on the Subordinated Debentures at any time or from time to time by extending the
interest payment period thereon for Extension Periods of up to 10 consecutive
semi-annual periods with respect to each deferral period; provided, however,
that no Extension Period may extend beyond the Stated Maturity of the
Subordinated Debentures. If interest payments on the Subordinated Debentures are
deferred, Distributions on the Capital Securities also will be deferred and the
Corporation will not be permitted, subject to certain exceptions set forth
herein, to declare or pay any cash distributions with respect to the
Corporation's capital stock or debt securities of the Corporation that rank PARI
PASSU with or junior to the Subordinated Debentures. During an Extension Period,
Distributions on the Capital Securities will continue to accumulate and
Distributions that are in arrears will bear interest on the amount thereof at
the rate of 7.85% per annum (to the extent permitted by applicable law),
compounded semi-annually, and holders of the Capital Securities will be required
to recognize income (in the form of original issue discount) for United States
federal income tax purposes in advance of receipt of the cash related to such
income. Upon the termination of any 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.
The Corporation has no current plan to exercise its right to defer payments
of interest by extending the interest payment period on the Subordinated
Debentures. However, should the Corporation elect to exercise such right in the
future, the market price of the Capital Securities is likely to be affected. See
"Risk Factors -- Option to Extend Interest Payment Period; TAX CONSEQUENCES",
"Description of New Securities -- Description of Subordinated Debentures; OPTION
TO EXTEND INTEREST PAYMENT PERIOD" and "Certain Federal Income Tax
Consequences -- Interest Income and Original Issue Discount".
REDEMPTION; SPECIAL EVENT
The Capital Securities are subject to mandatory redemption, in whole or in
part, upon repayment of the Subordinated Debentures at maturity or upon their
earlier redemption. The Subordinated Debentures are redeemable, at the option of
the Corporation, (i) on or after January 1, 2007, in whole at any time or in
part from time to time, or (ii) at any time in whole (but not in part), upon the
occurrence and continuation of a Special Event (I.E., a Tax Event or a
Regulatory Capital Event (each as defined herein)). See "Risk Factors -- Special
Event -- Redemption" and "Description of New Securities -- Description of
Capital Securities; REDEMPTION".
See "Risk Factors -- Possible Tax Law Changes Affecting Capital Securities"
for a discussion of certain legislative proposals that, if adopted, could give
rise to a Tax Event, which may permit the Corporation to cause a redemption of
the Capital Securities prior to January 1, 2007.
No sinking fund will be established for the benefit of the Capital
Securities.
EXCHANGE OF CAPITAL SECURITIES FOR SUBORDINATED DEBENTURES
The holder of the Common Securities (I.E., the Corporation) has the right
to terminate the Issuer at any time and, after satisfaction of liabilities to
creditors of the Issuer in accordance with applicable law and the Expense
Agreement, cause the Subordinated Debentures to be distributed to the holders of
the Capital Securities in liquidation of the Issuer, subject to the Issuer
having received an opinion of counsel to the effect that such distribution will
not be a taxable event to holders of Capital Securities. See "Description of New
Securities -- Description of Capital Securities; LIQUIDATION OF ISSUER AND
DISTRIBUTION OF SUBORDINATED DEBENTURES TO HOLDERS".
GUARANTEE
The payment of Distributions and payments on the liquidation of the Issuer
or the redemption of the Capital Securities are guaranteed by the Corporation to
the extent that the Issuer has sufficient funds available therefor. Such
guarantee is subordinate and junior in right of payment to all Senior Debt of
the Corporation. See "Risk Factors -- Rights Under Guarantee" and "Description
of New Securities -- Description of Guarantee".
TRANSFER
The Capital Securities will be issued, and may be transferred, only in
blocks having a Liquidation Amount of not less than $100,000 (100 Capital
Securities). Any transfer, sale or other disposition of Capital Securities
resulting in a block having a Liquidation Amount of less than $100,000 shall be
deemed to be void and of no legal effect whatsoever.
11
<PAGE>
ABSENCE OF MARKET FOR NEW CAPITAL SECURITIES
The New Capital Securities will be a new issue of securities for which
there currently is no market. Morgan Stanley & Co. Incorporated, the initial
purchaser of the Old Capital Securities (the "Initial Purchaser"), informed the
Corporation and the Issuer in connection with the offering of the Old Capital
Securities that the Initial Purchaser intended to make a market in the Old
Capital Securities. However, the Initial Purchaser is not obligated to make a
market in the Old Capital Securities or the New Capital Securities, and any such
market making activity with respect to the Old Capital Securities or the New
Capital Securities may be discontinued at any time without notice. Accordingly,
no assurance can be given that an active public or other market will develop for
the Old Capital Securities or the New Capital Securities or as to the liquidity
of or the trading market for the New Capital Securities or the Old Capital
Securities. The Corporation and the Issuer do not intend to apply for listing
the Old Capital Securities or the New Capital Securities on any securities
exchange or for quotation through the National Association of Securities Dealers
Automated Quotation System.
12
<PAGE>
RISK FACTORS
Holders of the Old Capital Securities should carefully review the
information contained elsewhere in this Prospectus and should particularly
consider the following matters prior to tendering Old Capital Securities in the
Exchange Offer.
RANKING OF SUBORDINATED OBLIGATIONS UNDER GUARANTEE AND SUBORDINATED DEBENTURES
The obligations of the Corporation under the Subordinated Debentures and
the Guarantee are unsecured and rank subordinate and junior in right of payment
to all Senior Debt of the Corporation. Substantially all the Corporation's debt
outstanding at any time will constitute Senior Debt. At September 30, 1996, the
aggregate outstanding Senior Debt of the Corporation was $123.3 billion. 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 (and thus the ability of
holders of the Capital Securities to benefit indirectly from such distribution),
is subject to the prior claims of creditors of that subsidiary, except to the
extent that the Corporation may itself be recognized as a creditor of that
subsidiary. Accordingly, the Subordinated Debentures will be effectively
subordinated to all existing and future liabilities of the Corporation's
subsidiaries, and holders of Subordinated Debentures should look only to the
assets of the Corporation for payments on the Subordinated Debentures. See "The
Corporation". None of the Indenture, the Guarantee, the Trust Agreement or the
Expense Agreement places any limitation on the amount of secured or unsecured
debt, including Senior Debt, that may be incurred by the Corporation. See
"Description of New Securities -- Description of Guarantee; STATUS OF GUARANTEE"
and "Description of New Securities -- Description of Subordinated Debentures;
SUBORDINATION".
The ability of the Issuer to pay amounts due on the Capital Securities is
solely dependent upon the Corporation making payments on the Subordinated
Debentures as and when required.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES
So long as no Debenture Event of Default has occurred and is continuing,
the Corporation has the right under the Indenture to defer the payment of
interest on the Subordinated Debentures at any time or from time to time for a
period not exceeding 10 consecutive semi-annual periods with respect to each
Extension Period, provided that no Extension Period may extend beyond the Stated
Maturity of the Subordinated Debentures. As a consequence of any such deferral,
semi-annual Distributions on the Capital Securities by the Issuer 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 7.85% per annum, compounded semi-annually from the relevant payment date
for such Distributions) during any such Extension Period. During any such
Extension Period, the Corporation may not, and may not permit any subsidiary of
the Corporation to, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Corporation's capital stock, or (ii) make any payment of principal, interest
or premium, if any, on or repay, repurchase or redeem any debt securities of the
Corporation that rank PARI PASSU in all respects with or junior in interest to
the Subordinated Debentures or make any guarantee payments with respect to any
guarantee by the Corporation of the debt securities of any subsidiary of the
Corporation if such guarantee ranks PARI PASSU in all respects with or junior in
interest to the Subordinated Debentures (other than (a) repurchases, redemptions
or other acquisitions of shares of capital stock of the Corporation in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance of capital
stock of the Corporation (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period, (b) as a result of any exchange or
conversion of any class or series of the Corporation's capital stock (or any
capital stock of a subsidiary of the Corporation) for any class or series of the
Corporation's capital stock or of any class or series of the Corporation's
indebtedness for any class or series of the Corporation's capital stock, (c) the
purchase of fractional interests in shares of the Corporation's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (d) any declaration of a dividend in
connection with any stockholder's rights plan, or the issuance of rights, stock
or other property under any stockholder's rights plan, or the redemption or
repurchase of rights pursuant thereto, or (e) any dividend in the form of stock,
warrants, options or other rights where the dividend stock or the stock issuable
upon exercise of such warrants, options or other rights is the same stock as
that on which the dividend is being paid or ranks PARI PASSU with or junior to
such stock). Prior to the termination of any such Extension Period, the
Corporation may further defer the payment of interest, provided that no
Extension Period may exceed 10 consecutive semi-annual periods or extend beyond
the Stated Maturity of the Subordinated Debentures. Upon the termination of any
Extension Period and the payment of all interest then accrued and unpaid
(together with interest thereon at the annual rate of 7.85%, compounded
semi-annually, to the extent permitted by applicable law), the Corporation may
elect to begin a new Extension Period, subject
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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
Securities -- Description of Capital Securities; DISTRIBUTIONS" and "Description
of New Securities -- Description of Subordinated Debentures; OPTION TO EXTEND
INTEREST PAYMENT PERIOD".
Should an Extension Period occur, a holder of the Capital Securities will
continue to accrue income (in the form of original issue discount) in respect of
its PRO RATA share of the Subordinated Debentures held by the Issuer for United
States federal income tax purposes. As a result, a holder of the Capital
Securities will include such income in gross income for United States federal
income tax purposes in advance of the receipt of the cash related to such
income, and will not receive such cash from the Issuer if the holder disposes of
the Capital Securities prior to the record date for the payment of such cash.
See "Certain Federal Income Tax Consequences -- Interest Income and Original
Issue Discount" and " -- Sales or Redemption of Capital Securities".
The Corporation has no current plan to exercise its right to defer payments
of interest by extending the interest payment period on the Subordinated
Debentures. However, should the Corporation elect to exercise such right in the
future, 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, as a result of the
existence of the Corporation's right to defer interest payments, the market
price of the Capital Securities (which represent preferred undivided beneficial
interests in the assets of the Issuer) may be more volatile than the market
prices of other securities on which original issue discount accrues that are not
subject to such deferrals.
SPECIAL EVENT -- REDEMPTION
Upon the occurrence and continuation of a Tax Event or a Regulatory Capital
Event (either, a "Special Event"), the Corporation has the right to redeem the
Subordinated Debentures in whole (but not in part) within 90 days following the
occurrence of such Tax Event or Regulatory Capital Event and thereby cause a
mandatory redemption of the Capital Securities before, as well as after, January
1, 2007. The Corporation has committed to the Federal Reserve Bank of Richmond
that it will not exercise this redemption right without the Corporation having
received the prior approval of the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), if then so required under applicable
capital guidelines or policies of the Federal Reserve Board.
A "Tax Event" means the receipt by the Issuer of an opinion of counsel
experienced in such matters to the effect that, as a result of any amendment to,
or change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or such
pronouncement or decision is announced on or after the date of issuance of the
Capital Securities under the Trust Agreement, there is more than an
insubstantial risk that (i) the Issuer is, or will be within 90 days of the date
of such opinion, subject to United States federal income tax with respect to
income received or accrued on the Subordinated Debentures, (ii) interest payable
by the Corporation on the Subordinated Debentures is not, or within 90 days 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 Issuer is, or will
be within 90 days of the date of the opinion, subject to more than a DE MINIMIS
amount of other taxes, duties or other governmental charges. See " -- Possible
Tax Law Changes Affecting Capital Securities" for a discussion of certain
legislative proposals that, if adopted, could give rise to a Tax Event, which
may permit the Corporation to cause a redemption of the Capital Securities prior
to January 1, 2007.
"Regulatory Capital Event" means the receipt by the Corporation of an
opinion of an independent bank regulatory counsel experienced in such matters to
the effect that, as a result of (i) 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
Board, or (ii) any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or such pronouncement or decision is announced on or after the date of
issuance of Capital Securities under the Trust Agreement, the Capital Securities
do not constitute, or within 90 days of the date thereof, will not constitute,
tier 1 capital (or its then equivalent); provided, however, that the
distribution of the Subordinated Debentures in connection with the liquidation
of the Issuer shall not in and of itself constitute a Regulatory Capital Event
unless such liquidation shall have occurred in connection with a Tax Event.
See "Description of New Securities -- Description of Subordinated
Debentures; REDEMPTION".
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EXCHANGE OF CAPITAL SECURITIES FOR SUBORDINATED DEBENTURES
The holder of the Common Securities (I.E., the Corporation) will have the
right at any time to terminate the Issuer and, after satisfaction of liabilities
to creditors of the Issuer in accordance with applicable law and the Expense
Agreement, cause the Subordinated Debentures to be distributed to the holders of
the Capital Securities in liquidation of the Issuer, subject to the Issuer
having received an opinion of counsel to the effect that the distribution will
not be taxable to the holders of Capital Securities. The Corporation has
committed to the Federal Reserve Bank of Richmond that so long as it (or an
affiliate) is the owner of the Common Securities it will not exercise this right
without the Corporation having received the prior approval of the Federal
Reserve Board, if then so required under applicable capital guidelines or
policies of the Federal Reserve Board. See "Description of New
Securities -- Description of Capital Securities; LIQUIDATION OF ISSUER AND
DISTRIBUTION OF SUBORDINATED DEBENTURES TO HOLDERS".
Under current United States federal income tax law, a distribution of the
Subordinated Debentures in exchange for the Capital Securities upon liquidation
of the Issuer will not be a taxable event to holders of the Capital Securities.
Should there occur a change in law, a change in legal interpretation, a Tax
Event, or other circumstances, however, such a distribution of the Subordinated
Debentures by the Issuer could be a taxable event to the holders of the Capital
Securities. See "Certain Federal Income Tax Consequences -- Distribution of
Subordinated Debentures to Holders of Capital Securities".
MARKET PRICES
There can be no assurance as to the market prices for the Capital
Securities, or the Subordinated Debentures that may be distributed in exchange
for Capital Securities if a liquidation of the Issuer occurs. Accordingly, the
Capital Securities that an investor may purchase, whether pursuant to the offer
made hereby or in the secondary market, or the Subordinated Debentures that a
holder of the Capital Securities may receive on liquidation of the Issuer, may
trade at a discount to the price that the investor paid to purchase the Capital
Securities offered hereby. Because holders of the Capital Securities may receive
Subordinated Debentures on termination of the Issuer, prospective purchasers of
the Capital Securities are also making an investment decision with respect to
the Subordinated Debentures and should carefully review all the information
regarding the Subordinated Debentures contained herein. See "Description of New
Securities -- Description of Subordinated Debentures".
RIGHTS UNDER GUARANTEE
Wilmington Trust Company will act as the Guarantee Trustee and will hold
the Guarantee for the benefit of the holders of the Capital Securities.
Wilmington Trust Company will also act as Debenture Trustee for the Subordinated
Debentures under the Indenture, and as Property Trustee and Delaware Trustee
under the Trust Agreement. The Guarantee guarantees to the holders of the
Capital Securities the following payments, to the extent not paid by the Issuer:
(i) any accumulated and unpaid Distributions required to be paid on the Capital
Securities, to the extent that the Issuer has funds on hand available therefor
at such time, (ii) the redemption price with respect to any Capital Securities
called for redemption, to the extent that the Issuer has funds on hand available
therefor at such time, and (iii) upon a voluntary or involuntary termination,
winding up or liquidation of the Issuer (unless the 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 Issuer has funds on hand available
therefor at such time, and (b) the amount of assets of the Issuer remaining
available for distribution to holders of the Capital Securities in liquidation
of the Issuer. The holders of not less than a majority in aggregate Liquidation
Amount of the Capital Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee in respect of the Guarantee or to direct the exercise of any trust power
conferred upon the Guarantee Trustee under the Guarantee. 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 Issuer, the Guarantee Trustee or any other person
or entity. If the Corporation were to default on its obligation to pay amounts
payable under the Subordinated Debentures, the Issuer would lack 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
would not be able to rely upon the Guarantee for payment of such amounts.
Instead, in the event (i) a Debenture Event of Default shall have occurred and
be continuing, and (ii) such event is attributable to the failure of the
Corporation to pay interest on or principal of the Subordinated Debentures on
the payment date on which such payment is due and payable, then a holder of the
Capital Securities may institute a legal proceeding directly against the
Corporation for enforcement of payment to such holder of the principal of or
interest on such Subordinated Debentures having a principal amount equal to the
aggregate Liquidation Amount of the Capital Securities of such holder (a "Direct
Action"). In connection with such Direct Action, the Corporation will have a
right of set-off under the Indenture to the extent of any payment made by the
Corporation to such holder of the Capital Securities in the Direct Action.
Except as described herein, holders of the Capital Securities will not be able
to exercise directly any other remedy available to the holders of the
Subordinated Debentures or assert directly any other rights in respect of the
Subordinated Debentures. See "Description of New Securities --
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Description of Subordinated Debentures; ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS
OF CAPITAL SECURITIES" and "; DEBENTURE EVENTS OF DEFAULT" and " -- Description
of Guarantee". The Trust Agreement provides that each holder of the Capital
Securities, by acceptance thereof, agrees to the provisions of the Guarantee and
the Indenture.
LIMITED VOTING RIGHTS
Holders of the Capital Securities generally will have limited voting rights
relating only to the modification of the Capital Securities and the exercise of
the Issuer's rights as holder of Subordinated Debentures and the Guarantee.
Holders of the Capital Securities will not be entitled to vote to appoint,
remove or replace the Property Trustee or the Delaware Trustee except upon the
occurrence of certain events described herein. The Property Trustee and the
holder of the Common Securities (I.E., the Corporation) may amend the Trust
Agreement without the consent of holders of the Capital Securities to ensure
that the Issuer will be classified for United States federal income tax purposes
as other than an association taxable as a corporation or as a grantor trust,
provided that such action does not materially adversely affect the interests of
such holders. See "Description of New Securities -- Description of Capital
Securities; VOTING RIGHTS; AMENDMENT OF TRUST AGREEMENT" and ";REMOVAL OF ISSUER
TRUSTEES".
POSSIBLE TAX LAW CHANGES AFFECTING CAPITAL SECURITIES
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Revenue
Reconciliation Bill"), the revenue portion of President Clinton's budget
proposal, was introduced in the 104th Congress. The Revenue Reconciliation Bill,
if enacted into law, would, among other things, have generally denied interest
deductions for interest on an instrument issued by a corporation that has a
maximum weighted average maturity of more than 40 years. The Revenue
Reconciliation Bill also would have generally denied interest deductions for
interest on an instrument, issued by a corporation, that has a maximum term of
more than 20 years and that is not shown as indebtedness on the separate balance
sheet of the issuer or, where the instrument is issued to a related party (other
than a corporation), where the holder or some other related party issues a
related instrument that is not shown as indebtedness on the issuer's
consolidated balance sheet. For purposes of determining the weighted average
maturity or the term of an instrument, any right to extend would be treated as
if exercised. The above-described provisions were proposed to be effective as to
instruments issued on or after December 7, 1995. If either provision were to
have applied to the Subordinated Debentures, the Corporation would have been
unable to deduct interest on the Subordinated Debentures. However, on March 29,
1996, the Chairmen of the Senate Finance and House Ways and Means Committees
issued a joint statement to the effect that it was their intention that the
effective date of the President's legislative proposals, presumably including
the Revenue Reconciliation Bill, if adopted, would be no earlier than the date
of appropriate Congressional action. Under current law, the Corporation will be
able to deduct interest on the Subordinated Debentures. Although the 104th
Congress adjourned without enacting the above-described provisions of the
Revenue Reconciliation Bill, there can be no assurance that current or future
legislative proposals or final legislation will not adversely affect the ability
of the Corporation to deduct interest on the Subordinated Debentures.
Accordingly, there can be no assurance that a Tax Event will not occur. See
"Description of New Securities -- Description of Subordinated Debentures;
REDEMPTION" and " -- Description of Capital Securities; REDEMPTION". See also
"Certain Federal Income Tax Consequences -- Possible Tax Law Changes".
CONSEQUENCES OF 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 Issuer 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. In addition, although the Old Capital Securities
have been designated for trading in the Private Offerings, Resale and Trading
through Automatic Linkages ("PORTAL") market, to the extent that Old Capital
Securities are tendered and accepted in connection with the Exchange Offer, any
trading market for Old Capital Securities which remain outstanding after the
Exchange Offer could be adversely affected.
The New Capital Securities and any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer will constitute a single
series of Capital Securities under the Trust Agreement and, accordingly, will
vote together as a single class for purposes of determining whether holders of
the requisite percentage in outstanding Liquidation
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Amount thereof have taken certain actions or exercised certain rights under the
Trust Agreement. See "Description of New Securities -- Description of Capital
Securities; GENERAL".
The Old Capital Securities provide that, if the Exchange Offer is not
consummated by , 1997, the Distribution rate borne by the Old Capital
Securities will increase by 0.25% per annum commencing on , 1997,
until the Exchange Offer is consummated. See "Description of Old Capital
Securities". Following consummation of the Exchange Offer, the Old Capital
Securities will not be entitled to any increase in the Distribution rate
thereon. The New Capital Securities will not be entitled to any such increase in
the Distribution rate thereon.
ABSENCE OF PUBLIC MARKET
The Old Capital Securities have not been registered under the Securities
Act and will be subject to restrictions on transferability to the extent that
they are not exchanged for the New Capital Securities. Although the New Capital
Securities will generally be permitted to be resold or otherwise transferred by
the holders (who are not Affiliates) without compliance with the registration
requirements under the Securities Act, they will constitute a new issue of
securities with no established trading market. 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). The Corporation and the Issuer
were advised by the Initial Purchaser in connection with the offering of the Old
Capital Securities that the Initial Purchaser intended to make a market in the
Old Capital Securities. However, the Initial Purchaser is not obligated to make
a market in the Old Capital Securities or the New Capital Securities and any
such market-making activity with respect to the Old Capital Securities or 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.
If a public trading market develops for the New Capital Securities, future
trading prices of such securities will depend on many factors, including, among
other things, prevailing interest rates, results of operations and 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 may publicly offer for sale or resell
the New Capital Securities only in compliance with the provisions of Rule 144
under the Securities Act.
Each Participating Broker-Dealer that receives New Capital Securities for
its own account 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 Exchange Agent of such Old Capital Securities, a properly
completed and duly executed Letter of Transmittal or Agent's Message in lieu
thereof 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 ensure timely delivery.
Neither the Corporation, the Issuer, nor the Exchange Agent is under any duty to
give notification of defects or irregularities with respect to the tenders of
Old Capital Securities for exchange.
THE ISSUER
The Issuer is a statutory business trust created under Delaware law
pursuant to (i) the Trust Agreement and (ii) the filing of a certificate of
trust with the Delaware Secretary of State. The Issuer's business and affairs
are conducted by the Issuer Trustees: Wilmington Trust Company, as Property
Trustee and Delaware Trustee. In addition, two individuals who are employees or
officers of or affiliated with the Corporation act as administrators with
respect to the Issuer (the "Administrators"). The Administrators were selected
by the holder of the Common Securities (I.E., the Corporation). The Issuer
exists exclusively for the purposes of (i) issuing and selling the Trust
Securities, (ii) using the proceeds from the sale of the Trust Securities to
acquire the Subordinated Debentures, and (iii) engaging in only those other
activities necessary or incidental thereto (such as registering the transfer of
the Capital Securities). Accordingly, the Subordinated Debentures are the sole
assets of the Issuer, and payments under the Subordinated Debentures are the
sole revenue of the Issuer. All of the Common Securities are owned by the
Corporation. The Common Securities rank PARI PASSU, and payments will be made
thereon PRO RATA, with the Capital Securities, except that upon the occurrence
and continuance of an Event of Default (as defined herein) under the Trust
Agreement resulting from a Debenture Event of Default under the Indenture, the
rights of the Corporation as
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holder of the Common Securities to payment in respect of Distributions and
payments upon liquidation, redemption or otherwise will be subordinated to the
rights of the holders of the Capital Securities. See "Description of New
Securities -- Description of Capital Securities; SUBORDINATION OF COMMON
SECURITIES". The Corporation acquired the Common Securities in an aggregate
Liquidation Amount equal to approximately three percent (I.E., $7,732,000) of
the total capital of the Issuer. The Issuer has a term of 31 years, but may
terminate earlier as provided in the Trust Agreement. The holders of a majority
in Liquidation Amount of the Capital Securities, if an Event of Default under
the Trust Agreement has occurred and is continuing, will be entitled to appoint,
remove or replace the Property Trustee and/or the Delaware Trustee. The duties
and obligations of each Issuer Trustee are governed by the Trust Agreement. The
holder of the Common Securities (I.E., the Corporation) will pay all fees and
expenses related to the Exchange Offer, except as provided herein, and will pay,
directly or indirectly, all ongoing costs, expenses and liabilities of the
Issuer.
The principal executive office of the Issuer is in care of First Union
Corporation, One First Union Center, Charlotte, North Carolina 28288-0013,
Attention: Secretary, and its telephone number is (704) 374-6565.
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THE CORPORATION
GENERAL
The Corporation is a North Carolina-based, multi-bank holding company
registered under the Bank Holding Company Act of 1956, as amended (the "BHCA").
Through its banking subsidiaries, the Corporation provides a wide range of
commercial and retail banking services and trust services in North Carolina,
Florida, South Carolina, Georgia, Tennessee, Virginia, Maryland, Delaware,
Pennsylvania, New Jersey, New York, Connecticut and Washington, D.C. The
Corporation also provides various other financial services, including mortgage
banking, leasing, investment banking, insurance and securities brokerage
services, through other subsidiaries. As of September 30, 1996, and for the nine
months then ended, the Corporation reported assets of $133.9 billion, net loans
of $92.5 billion, deposits of $91.4 billion, stockholders' equity of $8.7
billion and net income applicable to common stockholders of $1.0 billion, and as
of such date the Corporation operated through over 2,100 offices in 38 states,
Washington, D.C. and four foreign countries. The Corporation is the sixth
largest bank holding company in the United States, based on assets at September
30, 1996.
HISTORY AND BUSINESS
The Corporation was incorporated under the laws of North Carolina in 1967.
Pursuant to a corporate reorganization in 1968, First Union National Bank of
North Carolina and First Union Mortgage Corporation, a mortgage banking firm
acquired by First Union National Bank of North Carolina in 1964, became
subsidiaries of the Corporation.
Since the 1985 Supreme Court decision upholding regional interstate banking
legislation, the Corporation has concentrated its efforts on building a large,
regional banking organization in what it perceives to be some of the better
banking markets in the eastern region of the United States. Since November 1985,
the Corporation has completed 71 banking-related acquisitions, including the
more significant acquisitions (I.E., involving the acquisition of $3.0 billion
or more of assets or deposits) set forth in the following table.
<TABLE>
<CAPTION>
ASSETS/ CONSIDERATION/
NAME HEADQUARTERS DEPOSITS (1)(2) ACCOUNTING TREATMENT COMPLETION DATE
<S> <C> <C> <C> <C>
Atlantic Bancorporation................... Florida $ 3.8 billion common stock/pooling November 1985
Northwestern Financial Corporation........ North Carolina 3.0 billion common stock/pooling December 1985
First Railroad & Banking Company of Georgia 3.7 billion common stock/pooling November 1986
Georgia.................................
Florida National Banks of Florida 7.9 billion cash/preferred January 1990
Florida, Inc............................ stock/purchase
Southeast banks........................... Florida 9.9 billion cash, notes/preferred September 1991
stock/purchase
Resolution Trust Company ("RTC") Florida, Georgia, 5.3 billion cash/purchase 1991-1994
acquisitions............................ Virginia
Dominion Bankshares Corporation........... Virginia 8.9 billion common stock/preferred March 1993
stock/pooling
Georgia Federal Bank, FSB................. Georgia 4.0 billion cash/purchase June 1993
First American Metro Corp................. Virginia 4.6 billion cash/purchase June 1993
American Savings of Florida, F.S.B........ Florida 3.3 billion common stock/purchase July 1995
First Fidelity Bancorporation............. New Jersey, 35.3 billion common stock/preferred January 1996
Pennsylvania stock/pooling
Center Financial Corporation.............. Connecticut $ 4.0 billion common stock/purchase November 1996
</TABLE>
(1) The dollar amounts indicated represent the assets of the related
organization as of the last reporting period prior to acquisition, except
for (i) the dollar amount relating to RTC acquisitions, which represents
savings and loan deposits acquired from the RTC, and (ii) the dollar amount
relating to Southeast banks, which represent assets of the two banking
subsidiaries of Southeast Banking Corporation acquired from the Federal
Deposit Insurance Corporation (the "FDIC").
(2) In addition, the Corporation acquired (i) Lieber & Company ("Lieber"), a
mutual fund advisory company with approximately $3.4 billion in assets under
management, in June 1994, and (ii) Keystone Investments, Inc. ("Keystone"),
a mutual fund advisory company with $11.8 billion in assets under
management, in December 1996. The consideration paid by the Corporation in
both acquisitions was in the form of the Corporation's common stock. The
Lieber acquisition was accounted for as a pooling of interests and the
Keystone acquisition was accounted for as a purchase.
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The Corporation is continually evaluating acquisition opportunities and
frequently conducts due diligence activities in connection with possible
acquisitions. As a result, acquisition discussions and, in some cases
negotiations, frequently take place and future acquisitions involving cash, debt
or equity securities can be expected. Acquisitions typically involve the payment
of a premium over book and market values, and therefore, some dilution of the
Corporation's book value and net income per common share may occur in connection
with any future transactions.
SUPERVISION AND REGULATION
The following discussion sets forth certain of the material elements of the
regulatory framework applicable to bank holding companies and their subsidiaries
and provides certain specific information relevant to the Corporation. This
regulatory framework is intended primarily for the protection of depositors and
the federal deposit insurance funds and not for the protection of security
holders. To the extent that the following information describes statutory and
regulatory provisions, it is qualified in its entirety by reference to the
applicable statutory and regulatory provisions. A change in applicable statutes,
regulations or regulatory policy may have a material effect on the business of
the Corporation.
GENERAL. As a bank holding company, the Corporation is subject to
regulation under the BHCA and to its examination and reporting requirements.
Under the BHCA, bank holding companies may not directly or indirectly acquire
the ownership or control of more than five percent of the voting shares or
substantially all of the assets of any company, including a bank, without the
prior approval of, or a waiver of such approval by, the Federal Reserve Board.
In addition, bank holding companies are generally prohibited under the BHCA from
engaging in nonbanking activities, subject to certain exceptions.
The earnings of the Corporation are affected by general economic
conditions, management policies and the legislative and governmental actions of
various regulatory authorities, including the Federal Reserve Board, the Office
of the Comptroller of the Currency (the "OCC"), which is the principal regulator
of the Corporation's national bank subsidiaries, and the FDIC, which is the
principal federal regulator of the Corporation's state-chartered bank
subsidiaries. In addition, there are numerous governmental requirements and
regulations which affect the activities of the Corporation.
PAYMENT OF DIVIDENDS. The Corporation is a legal entity separate and
distinct from its banking and other subsidiaries. A major portion of the
Corporation's revenues result from amounts paid as dividends to the Corporation
by its national bank subsidiaries. The prior approval of the OCC is required if
the total of all dividends declared by a national bank in any calendar year will
exceed the sum of such bank's net profits for that year and its retained net
profits for the preceding two calendar years, less any required transfers to
surplus. Federal law also prohibits any national bank from paying dividends
which would be greater than such bank's undivided profits after deducting
statutory bad debt in excess of such bank's allowance for loan losses.
In addition to its national bank subsidiaries, the Corporation has two
state-chartered bank subsidiaries, each of which is subject to dividend
limitations under applicable state laws.
Under the foregoing dividend restrictions and certain restrictions
applicable to certain of the Corporation's nonbanking subsidiaries, as of
September 30, 1996, the Corporation's subsidiaries, without obtaining
affirmative governmental approvals, could pay aggregate dividends of $430
million to the Corporation. In the first nine months of 1996, the Corporation's
subsidiaries paid $1.1 billion in cash dividends to the Corporation.
In addition, the Corporation and its bank subsidiaries are subject to
various general regulatory policies and requirements relating to the payment of
dividends, including requirements to maintain adequate capital above regulatory
minimums. The appropriate federal regulatory authority is authorized to
determine under certain circumstances relating to the financial condition of a
national bank or bank holding company that the payment of dividends would be an
unsafe or unsound practice and to prohibit payment thereof. The OCC (the
appropriate agency with respect to the Corporation's national bank subsidiaries)
and the FDIC (the appropriate agency with respect to the Corporation's
state-chartered bank subsidiaries) have indicated that paying dividends that
deplete a bank's capital base to an inadequate level would be an unsound and
unsafe banking practice. The OCC, the FDIC and the Federal Reserve Board have
each indicated that banking organizations should generally pay dividends only
out of current operating earnings.
BORROWINGS, ETC. There are also various legal restrictions on the extent to
which each of the Corporation and its nonbank subsidiaries can borrow or
otherwise obtain credit from its bank subsidiaries. In general, these
restrictions require that any such extensions of credit must be secured by
designated amounts of specified collateral and are limited, as to any one of the
Corporation or such nonbank subsidiaries, to ten percent of the lending bank's
capital stock and surplus, and as to the Corporation and all such nonbank
subsidiaries in the aggregate, to 20 percent of such lending bank's capital
stock and surplus.
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The Federal Deposit Insurance Act, as amended (the "FDIA"), among other
things, imposes liability on an institution the deposits of which are insured by
the FDIC, such as the Corporation's subsidiary national banks, for certain
potential obligations to the FDIC incurred in connection with other FDIC-insured
institutions under common control with such institution.
Under the National Bank Act, if the capital stock of a national bank is
impaired by losses or otherwise, the OCC is authorized to require payment of the
deficiency by assessment upon the bank's stockholders, pro rata and, to the
extent necessary, if any such assessment is not paid by any stockholder after
three months' notice, to sell the stock of such stockholder to make good the
deficiency. Under Federal Reserve Board policy, the Corporation is expected to
act as a source of financial strength to each of its subsidiary banks and to
commit resources to support each of such subsidiaries. This support may be
required at times when, absent such Federal Reserve Board policy, the
Corporation may not find itself willing or able to provide it.
Any capital loans by a bank holding company to any of its subsidiary banks
are subordinate in right of payment to deposits and to certain other
indebtedness of such subsidiary banks. In the event of a bank holding company's
bankruptcy, any commitment by the bank holding company to a federal bank
regulatory agency to maintain the capital of a subsidiary bank will be assumed
by the bankruptcy trustee and entitled to a priority of payment.
CAPITAL ADEQUACY. The minimum guidelines for the ratio of capital to
risk-weighted assets (including certain off-balance sheet activities, such as
standby letters of credit) is eight percent. At least half of the total capital
is to be composed of common equity, retained earnings and a limited amount of
qualifying perpetual preferred stock, less certain intangibles ("tier 1 capital"
and, together with tier 2 capital, "total capital"). The remainder may consist
of subordinated debt, qualifying preferred stock and a limited amount of the
loan loss allowance ("tier 2 capital"). At September 30, 1996, the Corporation's
tier 1 and total capital ratios were 6.38 percent and 10.94 percent,
respectively.
In addition, the Federal Reserve Board has established minimum leverage
ratio guidelines for bank holding companies. These guidelines provide for a
minimum leverage ratio of tier 1 capital to adjusted average quarterly assets
("leverage ratio") equal to three percent for bank holding companies that meet
certain specified criteria, including having the highest regulatory rating. All
other bank holding companies will generally be required to maintain a leverage
ratio of from at least four to five percent. The Corporation's leverage ratio at
September 30, 1996, was 5.23 percent. The guidelines also provide that bank
holding companies experiencing internal growth or making acquisitions will be
expected to maintain strong capital positions substantially above the minimum
supervisory levels without significant reliance on intangible assets.
Furthermore, the guidelines indicate that the Federal Reserve Board will
continue to consider a "tangible tier 1 leverage ratio" (deducting all
intangibles) in evaluating proposals for expansion or new activity. The Federal
Reserve Board has not advised the Corporation of any specific minimum leverage
ratio or tangible tier 1 leverage ratio applicable to it.
Each of the Corporation's subsidiary national banks is subject to similar
capital requirements adopted by the OCC or the FDIC. Each of the Corporation's
subsidiary banks had a leverage ratio in excess of 5.17 percent, as of September
30, 1996. As of that date, the federal banking agencies have not advised any of
the subsidiary national banks of any specific minimum leverage ratio applicable
to it.
Banking regulators continue to indicate their desire to raise capital
requirements applicable to banking organizations, including a proposal to add an
interest rate risk component to risk-based capital guidelines.
PROMPT CORRECTIVE ACTION. The FDIA, among other things, requires the
federal banking agencies to take "prompt corrective action" in respect of
depository institutions that do not meet minimum capital requirements. The FDIA
establishes five capital tiers: "well capitalized"; "adequately capitalized";
"undercapitalized"; "significantly undercapitalized"; and "critically
undercapitalized". A depository institution's capital tier will depend upon how
its capital levels compare to various relevant capital measures and certain
other factors, as established by regulation.
The federal bank regulatory agencies have adopted regulations establishing
relevant capital measures and relevant capital levels applicable to FDIC-insured
banks. The relevant capital measures are the total capital ratio, tier 1 capital
ratio and the leverage ratio. See ";CAPITAL ADEQUACY". Under the regulations, a
FDIC-insured bank will be (i) "well capitalized" if it has a total capital ratio
of ten percent or greater, a tier 1 capital ratio of six percent or greater and
a leverage ratio of five percent or greater and is not subject to any order or
written directive by the OCC to meet and maintain a specific capital level for
any capital measure; (ii) "adequately capitalized" if it has a total capital
ratio of eight percent or greater, a tier 1 capital ratio of four percent or
greater and a leverage ratio of four percent or greater (three percent in
certain circumstances) and is not "well capitalized"; (iii) "undercapitalized"
if it has a total capital ratio of less than eight percent, a tier 1 capital
ratio of less than four percent or a leverage ratio of less than four percent
(three percent in certain circumstances); (iv) "significantly undercapitalized"
if it has a total capital ratio of less than six percent, a tier 1 capital ratio
of less than three percent or a
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<PAGE>
leverage ratio of less than three percent; and (v) "critically undercapitalized"
if its tangible equity is equal to or less than two percent of average quarterly
tangible assets. As of September 30, 1996, all of the Corporation's
deposit-taking subsidiary banks had capital levels that qualify them as being
"well capitalized" under such regulations.
The FDIA generally prohibits a FDIC-insured depository institution from
making any capital distribution (including payment of a dividend) or paying any
management fee to its holding company if the depository institution would
thereafter be undercapitalized. "Undercapitalized" depository institutions are
subject to growth limitations and are required to submit a capital restoration
plan. The federal banking agencies may not accept a capital plan without
determining, among other things, that the plan is based on realistic assumptions
and is likely to succeed in restoring the depository institution's capital. In
addition, for a capital restoration plan to be acceptable, the depository
institution's parent holding company must guarantee that the institution will
comply with such capital restoration plan. The aggregate liability of the parent
holding company is limited to the lesser of: (i) an amount equal to five percent
of the depository institution's total assets at the time it became
"undercapitalized"; and (ii) the amount which is necessary (or would have been
necessary) to bring the institution into compliance with all capital standards
applicable with respect to such institution as of the time it fails to comply
with the plan. If a depository institution fails to submit an acceptable plan,
it is treated as if it is "significantly undercapitalized".
"Significantly undercapitalized" insured depository institutions may be
subject to a number of requirements and restrictions, including orders to sell
sufficient voting stock to become "adequately capitalized", requirements to
reduce total assets, and cessation of receipt of deposits from correspondent
banks. "Critically undercapitalized" institutions are subject to the appointment
of a receiver or conservator.
DEPOSITOR PREFERENCE STATUTE. Under federal law, deposits and certain
claims for administrative expenses and employee compensation against an insured
depository institution would be afforded a priority over other general unsecured
claims against such an institution, including federal funds and letters of
credit, in the "liquidation or other resolution" of such an institution by any
receiver.
INTERSTATE BANKING AND BRANCHING LEGISLATION. The Riegle-Neal Interstate
Banking and Branching Efficiency Act of 1994 (the "IBBEA") authorizes interstate
acquisitions of banks and bank holding companies without geographic limitation
beginning one year after enactment. In addition, beginning June 1, 1997, a bank
may merge with a bank in another state as long as neither of the states has
opted out of interstate branching between the date of enactment of the IBBEA and
May 31, 1997. The IBBEA further provides that states may enact laws permitting
interstate merger transactions prior to June 1, 1997. A bank may establish and
operate a DE NOVO branch in a state in which the bank does not maintain a branch
if that state expressly permits DE NOVO branching. Once a bank has established
branches in a state through an interstate merger transaction, the bank may
establish and acquire additional branches at any location in the state where any
bank involved in the interstate merger transaction could have established or
acquired branches under applicable federal or state law. A bank that has
established a branch in a state through DE NOVO branching may establish and
acquire additional branches in such state in the same manner and to the same
extent as a bank having a branch in such state as a result of an interstate
merger. If a state opts out of interstate branching within the specified time
period, no bank in any other state may establish a branch in the opting out
state, whether through an acquisition or DE NOVO.
FDIC INSURANCE ASSESSMENTS; DIFA. The FDIC reduced the insurance premiums
it charges on bank deposits insured by the Bank Insurance Fund ("BIF") to the
statutory minimum of $2,000.00 for "well capitalized" banks, effective January
1, 1996. Premiums related to deposits assessed by the Savings Association
Insurance Fund ("SAIF"), including savings association deposits acquired by
banks, continued to be assessed at a rate of between 23 cents and 31 cents per
$100.00 of deposits. On September 30, 1996, the Deposit Insurance Funds Act of
1996 ("DIFA") was enacted and signed into law. DIFA is expected to reduce the
amount of semi-annual FDIC insurance premiums for savings association deposits
acquired by banks to the same levels assessed for deposits insured by BIF. The
Corporation currently estimates such reductions in premiums may amount to
approximately $35 million pre-tax per year.
DIFA also provides for a special one-time assessment imposed on deposits
insured by the SAIF, including such deposits held by banks, to recapitalize the
SAIF to bring the SAIF up to statutory required levels. The Corporation accrued
for the one-time assessment in the third quarter of 1996 in the amount of $86
million after tax in connection with the SAIF recapitalization.
DIFA further provides for assessments to be imposed on insured depository
institutions with respect to deposits insured by the BIF (in addition to
assessments currently imposed on depository institutions with respect to
SAIF-insured deposits) to pay for the cost of Financing Corporation funding. The
Corporation currently estimates assessments may amount to up to $14 million
after-tax in 1997 with similar assessments per year through 1999 (or earlier if
no savings associations exist prior to December 31, 1999) in connection with
such funding.
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CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the Corporation's ratios of earnings to
fixed charges for the years and periods indicated:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
1996 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Consolidated Ratios of Earnings to Fixed Charges
Excluding interest on deposits............................ 2.23X 2.75 3.55 3.95 2.71 1.80
Including interest on deposits............................ 1.46X 1.54 1.73 1.70 1.32 1.17
Consolidated Ratios of Earnings to Fixed Charges
and Preferred Stock Dividends
Excluding interest on deposits............................ 2.22X 2.67 3.10 3.59 2.43 1.69
Including interest on deposits............................ 1.45X 1.53 1.67 1.67 1.30 1.15
</TABLE>
For purposes of computing these ratios, earnings represent income from
continuing operations before extraordinary items and cumulative effect of a
change in accounting principle plus income taxes and fixed charges (excluding
capitalized interest). Fixed charges, excluding interest on deposits, represent
interest (other than on deposits, but including capitalized interest), one-third
(the proportion deemed representative of the interest factor) of rents and all
amortization of debt issuance costs. Fixed charges, including interest on
deposits, represent all interest (including capitalized interest), one-third
(the proportion deemed representative of the interest factor) of rents and all
amortization of debt issuance costs.
USE OF PROCEEDS
Neither the Corporation nor the Issuer will receive any proceeds from the
issuance of the New Capital Securities offered hereby. The Old Capital
Securities surrendered in exchange for the New Capital Securities will be
retired and cancelled.
The net proceeds to the Issuer from the offering of the Old Capital
Securities was approximately $250 million (before deducting expenses associated
with the offering). All of the proceeds from the sale of the Old Capital
Securities were invested by the Issuer in the Old Subordinated Debentures. The
net proceeds from the sale of the Old Subordinated Debentures were added by the
Corporation to its general corporate funds and have been and will be used for
general corporate purposes. Pending such application by the Corporation, such
net proceeds may be temporarily invested in short-term interest bearing
securities.
The Corporation is required by the Federal Reserve Board to maintain
certain levels of capital for bank regulatory purposes. See "The
Corporation -- Supervision and Regulation; CAPITAL ADEQUACY". On October 21,
1996, The federal Reserve Board announced that cumulative preferred securities
having the characteristics of the Capital Securities and which qualify as a
minority interest could be included as tier 1 capital for bank holding
companies. Such tier 1 capital treatment, together with the Corporation's
ability to deduct, for income tax purposes, interest payable on the Subordinated
Debentures, will provide the Corporation with a more cost-effective means of
obtaining capital for regulatory purposes than other tier 1 capital alternatives
currently available to it.
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CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Corporation and its subsidiaries as of September 30, 1996, and as adjusted to
give effect to (i) the consummation of the offering of the Old Capital
Securities, and (ii) certain other Guaranteed Preferred Beneficial Interests in
Corporation's Junior Subordinated Deferrable Interest Debentures issued since
September 30, 1996. The following data should be read in conjunction with the
consolidated financial statements and notes thereto of the Corporation and its
subsidiaries incorporated herein by reference. See "Incorporation of Certain
Documents by Reference". Also shown below are certain consolidated regulatory
capital ratios of the Corporation and its subsidiaries at September 30, 1996.
For additional discussion of regulatory capital requirements applicable to the
Corporation, see "The Corporation -- Supervision and Regulation; CAPITAL
ADEQUACY". The issuance of the New Capital Securities in the Exchange Offer will
have no effect on the capitalization of the Corporation.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
(DOLLARS IN MILLIONS) HISTORICAL AS ADJUSTED
<S> <C> <C>
LONG-TERM DEBT.................................................................................... $ 7,332 7,332
GUARANTEED PREFERRED BENEFICIAL INTERESTS IN CORPORATION'S JUNIOR SUBORDINATED DEFERRABLE INTEREST
DEBENTURES (1).................................................................................. -- 1,000
STOCKHOLDERS' EQUITY
Preferred stock.................................................................................
Preferred stock, no par value per share, authorized 10,000,000 shares, none issued........... -- --
Class A, no par value per share, authorized 40,000,000 shares................................ -- --
Series B $2.15 Cumulative Convertible, 1,910,946 issued (2)................................ 48 48
Common stock, $3.33 1/3 par value; authorized 750,000,000 shares,
outstanding 270,507,508 shares............................................................... 901 901
Paid-in capital................................................................................. 1,408 1,408
Retained earnings............................................................................... 6,431 6,431
Unrealized loss on debt and equity securities................................................... (99) (99)
Total stockholders' equity................................................................. 8,689 8,689
Total capitalization....................................................................... $ 16,021 17,021
</TABLE>
<TABLE>
<CAPTION>
THE REGULATORY
CORPORATION MINIMUM
<S> <C> <C>
CONSOLIDATED REGULATORY CAPITAL RATIOS (as of September 30, 1996)
Tier 1 capital to risk-adjusted assets (3)........................................................ 6.38% 4.00
Total capital to risk-adjusted assets (4)......................................................... 10.94 8.00
Leverage (5)...................................................................................... 5.23 3.00(6)
</TABLE>
(1) As described herein, the sole assets of the Issuer are $257,732,000 of the
Subordinated Debentures issued by the Corporation to the Issuer. The
Subordinated Debentures (which accrue interest at the rate of 7.85% per
annum) will mature on January 1, 2027. The Corporation owns all of the
Common Securities of the Issuer, which accumulate Distributions at the rate
of 7.85% per annum. It is anticipated that the Issuer will not be subject to
the reporting requirements under the Exchange Act. See "Accounting
Treatment". On November 27, 1996, First Union Institutional Capital I, a
statutory business trust created under Delaware law, issued $500 million of
Guaranteed Preferred Beneficial Interests in Corporation's Junior
Subordinated Deferrable Interest Debentures. On January 16, 1997, First
Union Capital I, a statutory business trust created under Delaware law,
issued $250 million of Guaranteed Preferred Beneficial Interests in
Corporation's Junior Subordinated Deferrable Interest Debentures.
(2) The outstanding shares of Series B Cumulative Convertible Class A Preferred
Stock were redeemed on November 15, 1996.
(3) Tier 1 capital consists of common equity, retained earnings and a limited
amount of qualifying perpetual preferred stock (including the Capital
Securities), less certain intangibles.
(4) Total capital consists of tier 1 capital and subordinated debt, qualifying
preferred stock and a limited amount of the loan loss allowance. At least
half of a bank holding company's total capital is to be composed of tier 1
capital.
(5) The leverage ratio is defined as the ratio of tier 1 capital divided by
adjusted average quarterly assets.
(6) Federal Reserve Board guidelines provide for a minimum leverage ratio of
three percent for bank holding companies that meet certain specified
criteria, including that they have the highest regulatory rating. All other
bank holding companies will be required to maintain a leverage ratio of
three percent plus an additional amount of at least 100 to 200 basis points.
The guidelines also provide that banking organizations experiencing internal
growth or making acquisitions will be expected to maintain strong capital
positions substantially above the minimum supervisory levels, without
significant reliance on intangible assets.
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ACCOUNTING TREATMENT
For financial reporting purposes, the Issuer will be treated as a
subsidiary of the Corporation, and accordingly, the accounts of the Issuer will
be included in the consolidated financial statements of the Corporation. The
Capital Securities will be presented as a separate line item in the consolidated
balance sheets of the Corporation, entitled "Guaranteed Preferred Beneficial
Interests in Corporation's Junior Subordinated Deferrable Interest Debentures",
and appropriate disclosures about the Capital Securities, the Guarantee and the
Subordinated Debentures will be included in the notes to the consolidated
financial statements. For financial reporting purposes, the Corporation will
record Distributions payable on the Capital Securities as an expense in the
consolidated statements of income.
The Corporation has agreed that future financial reports of the Corporation
will: (i) present the Capital Securities issued by the Issuer on the balance
sheet as a separate line item entitled "Guaranteed Preferred Beneficial
Interests in Corporation's Junior Subordinated Deferrable Interest Debentures",
which will be classified similar to minority interests; (ii) include in a
footnote to the Corporation's consolidated financial statements disclosure that
the sole assets of the Issuer are the Subordinated Debentures (specifying the
principal amount, interest rate and maturity date of the Subordinated
Debentures) and whether Staff Accounting Bulletin 53 treatment is sought; (iii)
include, in an audited footnote to the consolidated financial statements,
disclosure that (a) the Issuer is wholly-owned; (b) the sole assets of the
Issuer are the Subordinated Debentures; and (c) the obligations of the
Corporation under the applicable documents, in the aggregate, constitute a full
and unconditional guarantee by the Corporation of the Issuer's obligations under
the Capital Securities.
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<PAGE>
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF EXCHANGE OFFER
In connection with the sale of the Old Capital Securities, the Corporation
and the Issuer entered into the Registration Rights Agreement with the Initial
Purchasers, pursuant to which the Corporation and the Issuer agreed to file and
to use their reasonable best efforts to cause to be declared effective by the
Commission a registration statement with respect to the exchange of the Old
Capital Securities for capital securities with terms identical in all material
respects to the terms of 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 Issuer 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 (i) have been
registered under the Securities Act and therefore will not be subject to certain
restrictions on transfer applicable to the Old Capital Securities, and (ii) will
not provide for any increase in the Distribution rate thereon. In that regard,
the Old Capital Securities provide, among other things, that, if the Exchange
Offer is not consummated by , 1997, the Distribution rate borne by
the Old Capital Securities 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
Securities".
The Exchange Offer is not being made to, nor will the Issuer or the
Corporation 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 Issuer 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 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 date hereof, the Old Guarantee for the New Guarantee and
all of the Old Subordinated Debentures, of which $257,732,000 aggregate
principal amount is outstanding, for a like aggregate principal amount of the
New Subordinated Debentures. The New Guarantee and New Subordinated Debentures
have been registered under the Securities Act.
TERMS OF EXCHANGE
The Issuer 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 $250,000,000 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 Issuer will issue,
promptly after the Expiration Date, an aggregate Liquidation Amount of up to
$250,000,000 of New Capital Securities in exchange for a like aggregate
Liquidation 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 than $100,000
or any integral multiple of $1,000 in excess thereof, provided that if any Old
Capital Securities are tendered in exchange for part, the untendered Liquidation
Amount must be $100,000 or any integral multiple of $1,000 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,
$250,000,000 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".
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<PAGE>
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 BOARD OF DIRECTORS OF THE CORPORATION NOR ANY ADMINISTRATOR OR
ANY TRUSTEE OF THE ISSUER 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 AFTER READING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND
CONSULTING WITH THEIR ADVISERS, IF ANY, BASED ON THEIR OWN FINANCIAL POSITION
AND REQUIREMENTS.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" means 5:00 p.m., New York City time, on
, 1997, unless the Exchange Offer is extended by the Corporation and
the Issuer (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 Issuer expressly reserve the right in their sole
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 Corporation and the Issuer
determine, in their sole 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 Issuer to constitute a material
change, or if the Corporation and the Issuer waive a material condition of the
Exchange Offer, the Corporation and the Issuer will promptly disclose such
amendment by means of an amended or supplemented Prospectus that will be
distributed to the registered holders of the Old Capital Securities, and the
Corporation and the Issuer 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 Issuer may choose to make any public
announcement and subject to applicable law, the Corporation and the Issuer 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.
ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF NEW CAPITAL SECURITIES
Upon the terms and subject to the conditions of the Exchange Offer, the
Issuer will exchange, and will issue to the Exchange Agent, New Capital
Securities for Old Capital Securities validly tendered and not withdrawn
(pursuant to the withdrawal rights described under " -- Withdrawal Rights")
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, including an
Agent's Message if the tendering holder has not delivered a Letter of
Transmittal, (ii) the Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees or (in the
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case of a book-entry transfer) an Agent's Message in lieu of the Letter of
Transmittal, 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. The term "Agent's Message" means a message, transmitted by DTC to and
received by the Exchange Agent and forming a part of a book-entry confirmation,
which states that DTC has received an express acknowledgement from the tendering
participant, which acknowledgement states that such participant has received and
agrees to be bound by the Letter of Transmittal and that the Issuer and the
Corporation may enforce such Letter of Transmittal against such participant.
Subject to the terms and conditions of the Exchange Offer, the Corporation
and the Issuer will be deemed to have accepted for exchange, and thereby
exchanged, Old Capital Securities validly tendered and not withdrawn as, if and
when the Issuer gives oral or written notice to the Exchange Agent of the
Corporation's and the Issuer's acceptance of such Old Capital Securities for
exchange pursuant to the Exchange Offer. The Exchange Agent will act as agent
for the Corporation and the Issuer 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 Corporation's and the Issuer's
acceptance for exchange of Old Capital Securities) or the Corporation and the
Issuer extend the Exchange Offer or are unable to accept for exchange or
exchange Old Capital Securities tendered pursuant to the Exchange Offer, then,
without prejudice to the Corporation's and the Issuer's rights set forth herein,
the Exchange Agent may, nevertheless, on behalf of the Corporation and the
Issuer 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 or Agent's Message in lieu thereof, 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 Issuer 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 Corporation, the
Issuer 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, or (in the case of a book-entry tender) an
Agent's Message in lieu of the Letter of Transmittal, and any other required
documents, must be received by the Exchange Agent at its address 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, including an Agent's Message if the tendering holder
has not delivered a Letter of Transmittal, 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 and the untendered Liquidation
Amount must be $100,000 or any integral multiple of $1,000 in excess thereof.
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 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.
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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, or an Agent's Message in lieu of the Letter of Transmittal, 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 (i) a certificate for the Old Capital Securities is
registered in a name other than that of the person surrendering the certificate
or (ii) such registered holder completes the box entitled "Special Issuance
Instructions" or "Special Delivery Instructions" in the Letter of Transmittal.
In the case of (i) or (ii) 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 (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 before the Expiration Date, or the
procedures 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
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 or Agent's Message in lieu 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
or Agent's Message in lieu thereof), together with any required signature
guarantees and any other documents required by the Letter of 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 Corporation's and the Issuer's acceptance for exchange of Old Capital
Securities tendered pursuant to any of the procedures described above will
constitute a binding agreement among the tendering holder, the Corporation and
the Issuer upon the terms and subject to the conditions of the Exchange Offer.
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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 Issuer, in their sole discretion, whose determination shall be final and
binding on all parties. The Corporation and the Issuer reserve the absolute
right, in their sole 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 view of counsel to the Corporation or the Issuer, be unlawful. The
Corporation and the Issuer 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 Corporation's and the Issuer's interpretation 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 Issuer, any affiliates or assigns of the Corporation or the Issuer, 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 Issuer,
proper evidence satisfactory to the Corporation and the Issuer, 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 Issuer is making the Exchange Offer for the 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 Issuer
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, and subject to the two immediately following
sentences, the Corporation and the Issuer 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 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
Issuer to resell pursuant to Rule 144A or any other available exemption under
the Securities Act, (i) 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, (ii) will not be permitted or entitled to
tender such Old Capital Securities in the Exchange Offer, and (iii) 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, Participating Broker-Dealers must deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resales of 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, (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. The Letter of Transmittal
contains the foregoing representations. In addition, the Corporation and the
Issuer 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 Issuer
(or an agent thereof) in writing information as to the number of
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"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 Participating Broker-Dealer will be deemed to have
acknowledged by execution of the Letter of Transmittal or delivery of an Agent's
Message 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
Participating 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 Issuer
believe that 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 Issuer 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 180 days after the Expiration Date or, if earlier, when all such
New Capital Securities have been disposed of by such Participating
Broker-Dealer. See "Plan of Distribution". Any person, including any
Participating Broker-Dealer, who is an Affiliate 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.
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 or delivery of an Agent's Message in lieu
thereof, that, upon receipt of notice from the Corporation or the Issuer 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
Securities pursuant to this Prospectus until the Corporation or the Issuer 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 Issuer has given notice
that the sale of the New Securities 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, telegraphic, telex or
facsimile transmission of such notice of withdrawal must be timely received by
the Exchange Agent at its address 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 certificate 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
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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 Corporation and
the Issuer, in their sole discretion, whose determination shall be final and
binding on all parties. Neither the Corporation, the Issuer, any affiliates or
assigns of the Corporation or the Issuer, 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.
DISTRIBUTIONS ON NEW CAPITAL SECURITIES
Holders of Old Capital Securities whose Old Capital Securities are accepted
for exchange will not receive accumulated Distributions on such Old Capital
Securities for any period from and after the last Distribution Date with respect
to such Old Capital Securities prior to the original issue date of the New
Capital Securities or, if no such Distributions have been made, will not receive
any accumulated 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 such Distribution Date or, if no such
Distributions have been made, from and after January 6, 1996.
CONDITIONS TO EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, the Corporation and the Issuer 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)
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;
(b) any action or proceeding shall have been instituted or threatened
in any court or by or before any governmental agency or body with respect
to the Exchange Offer which, in the Corporation's and the Issuer's
judgment, would reasonably be expected to impair the ability of the Issuer
or the Corporation to proceed with the Exchange Offer;
(c) any law, statute, rule or regulation shall have been adopted or
enacted which, in the Corporation's and the Issuer's judgment, would
reasonably be expected to impair the ability of the Issuer or the
Corporation to proceed with the Exchange Offer;
(d) a banking moratorium shall have been declared by United States
federal or North Carolina or New York State authorities which, in the
Corporation's and the Issuer's judgment, would reasonably be expected to
impair the ability of the Issuer or the Corporation to proceed with the
Exchange Offer;
(e) trading on the New York Stock Exchange or generally in the United
States over-the-counter market shall have been suspended by order of the
Commission or any other governmental authority which, in the Corporation's
and the Issuer's judgment, would reasonably be expected to impair the
ability of the Issuer or the Corporation to proceed with the Exchange
Offer;
(f) 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 Issuer, threatened for that purpose any governmental
approval has not been obtained, which approval the Corporation and the
Issuer shall deem necessary for the consummation of the Exchange Offer as
contemplated hereby; or
(g) any change, or any development involving a prospective change, in
the business or financial affairs of the Issuer or the Corporation or any
of its subsidiaries has occurred which, in the judgment of the Corporation
and the Issuer, might materially impair the ability of the Issuer or the
Corporation to proceed with the Exchange Offer.
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If the Corporation and the Issuer determine in their sole discretion that
any of the foregoing events or conditions has occurred or exists or has not been
satisfied, the Corporation and the Issuer 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 and the Issuer will promptly disclose such waiver by means of an
amended or supplemented Prospectus that will be distributed to the registered
holders of the Old Capital Securities, and the Corporation and the Issuer will
extend the Exchange Offer to the extent required by Rule 14e-1 under the
Exchange Act.
EXCHANGE AGENT
Wilmington Trust Company 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:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Operations
Telephone: (302) 651-8869
Facsimile: (302) 651-1079
Delivery to other than the above address 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 Issuer will make any payment to brokers,
dealers or others soliciting acceptances of the Exchange Offer.
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DESCRIPTION OF NEW SECURITIES
DESCRIPTION OF CAPITAL SECURITIES
Pursuant to the terms of the Trust Agreement, the Issuer has issued the Old
Capital Securities and the Common Securities and will issue the New Capital
Securities. The New Capital Securities will represent preferred undivided
beneficial interests in the assets of the Issuer and the holders thereof will be
entitled to a preference in certain circumstances with respect to Distributions
and amounts payable on redemption of the Trust Securities or liquidation of the
Issuer over the Common Securities. See ";SUBORDINATION OF COMMON SECURITIES".
The Trust Agreement has been qualified under the Trust Indenture Act. This
summary of certain provisions of the Capital Securities, the Common Securities
and the Trust Agreement describes the material terms of the Capital Securities
but does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, all the provisions of the Trust Agreement, including
the definitions therein of certain terms.
GENERAL
The Capital Securities (including the Old Capital Securities and the New
Capital Securities) will be limited to $250,000,000 aggregate Liquidation Amount
at any one time outstanding. The Capital Securities rank PARI PASSU, and
payments thereon will be made PRO RATA, with the Common Securities of the
Issuer, except as described under ";SUBORDINATION OF COMMON SECURITIES". Legal
title to the Subordinated Debentures is held by the Property Trustee in trust
for the benefit of the holders of the Capital Securities and the holder of the
Common Securities (I.E., the Corporation). The Guarantee is a guarantee on a
subordinated and junior basis with respect to the Capital Securities but does
not guarantee payment of Distributions or amounts payable on redemption or
liquidation of the Capital Securities when the Issuer does not have funds on
hand available to make such payments. See " -- Description of Guarantee".
DISTRIBUTIONS
Distributions on the Capital Securities are cumulative from the date of
original issuance of the Old Capital Securities and are payable as a preference
at the annual rate of 7.85% of the Liquidation Amount of $1,000, semi-annually
in arrears on January 1 and July 1 of each year, to the holders of the Capital
Securities at the close of business on the 15th day of the month preceding the
relevant Distribution Date. The first Distribution Date for the Capital
Securities will be July 1, 1997. 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 Capital
Securities is not a Business Day (as defined in the Trust Agreement), then
payment of the Distributions payable on such date will be made on the next
succeeding Business Day (and without any additional Distributions or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same effect as if made on the date
such payment was originally payable.
So long as no "Event of Default" (as defined in the Indenture) with respect
to the Subordinated Debentures (a "Debenture Event of Default") has occurred and
is continuing (see " -- Description of Subordinated Debentures; DEBENTURE EVENTS
OF DEFAULT"), the Corporation has the right under the Indenture to defer the
payment of interest on the Subordinated Debentures at any time or from time to
time for a period not exceeding 10 consecutive semi-annual periods with respect
to each Extension Period, provided that no Extension Period may extend beyond
the Stated Maturity of the Subordinated Debentures. See " -- Description of
Subordinated Debentures; GENERAL". As a consequence of any such election,
semi-annual Distributions on the Capital Securities will be deferred by the
Issuer during any such Extension Period. Distributions to which holders of the
Capital Securities are entitled will accumulate additional Distributions thereon
at the rate per annum of 7.85% thereof, compounded semi-annually from the
relevant payment date for such Distributions. The term "Distributions" as used
herein shall include any such additional Distributions. During any such
Extension Period, the Corporation may not, and may not permit any subsidiary of
the Corporation to, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Corporation's capital stock or (ii) make any payment of principal, interest
or premium, if any, on or repay, repurchase or redeem any debt securities of the
Corporation that rank PARI PASSU in all respects with or junior in interest to
the Subordinated Debentures or make any guarantee payments with respect to any
guarantee by the Corporation of the debt securities of any subsidiary of the
Corporation if such guarantee ranks PARI PASSU in all respects with or junior in
interest to the Subordinated Debentures (other than (a) repurchases, redemptions
or other acquisitions of shares of capital stock of the Corporation in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance of capital
stock of the Corporation (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into
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prior to the applicable Extension Period, (b) as a result of any exchange or
conversion of any class or series of the Corporation's capital stock (or any
capital stock of a subsidiary of the Corporation) for any class or series of the
Corporation's capital stock or of any class or series of the Corporation's
indebtedness for any class or series of the Corporation's capital stock, (c) the
purchase of fractional interests in shares of the Corporation's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (d) any declaration of a dividend in
connection with any stockholder's rights plan, or the issuance of rights, stock
or other property under any stockholder's rights plan, or the redemption or
repurchase of rights pursuant thereto, or (e) any dividend in the form of stock,
warrants, options or other rights where the dividend stock or the stock issuable
upon exercise of such warrants, options or other rights is the same stock as
that on which the dividend is being paid or ranks PARI PASSU with or junior to
such stock). Prior to the termination of any such Extension Period, the
Corporation may further defer the payment of interest, provided that no
Extension Period may exceed 10 consecutive semi-annual periods or extend beyond
the Stated Maturity of the Subordinated Debentures. 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. There is no limitation on the number
of times that the Corporation may elect to begin an Extension Period. See
" -- Description of Subordinated Debentures; OPTION TO EXTEND INTEREST PAYMENT
PERIOD" and "Certain Federal Income Tax Consequences -- Interest Income and
Original Issue Discount".
The Corporation has no current plan to exercise its right to defer payments
of interest by extending the interest payment period on the Subordinated
Debentures.
The revenue of the Issuer available for distribution to holders of Capital
Securities will be limited to payments under the Subordinated Debentures. If the
Corporation does not make interest payments on the Subordinated Debentures, the
Property Trustee will not have funds available to pay Distributions on the
Capital Securities. The payment of Distributions (if and to the extent the
Issuer has funds legally available for the payment of such Distributions and
cash sufficient to make such payments) is guaranteed by the Corporation on a
limited basis as set forth herein under " -- Description of Guarantee".
REDEMPTION
MANDATORY REDEMPTION. Upon the repayment or redemption, in whole or in
part, of the Subordinated Debentures, whether at maturity or upon earlier
redemption as provided in the Indenture, the proceeds from such repayment or
redemption shall be applied by the Property Trustee to redeem a Like Amount of
the Trust Securities, upon not less than 30 nor more than 60 days notice, at the
applicable Redemption Price (as defined herein) plus accumulated but unpaid
Distributions thereon to the Redemption Date (as defined in the Trust
Agreement). See " -- Description of Subordinated Debentures; REDEMPTION". If
less than all of the Subordinated Debentures are to be repaid or redeemed on a
Redemption Date, then the proceeds from such repayment or redemption shall be
allocated to the redemption PRO RATA of the Capital Securities and the Common
Securities. The amount of premium, if any, paid by the Corporation upon the
repayment or redemption of all or any part of the Subordinated Debentures to be
repaid or redeemed on a Redemption Date shall be allocated to the redemption PRO
RATA of the Capital Securities and the Common Securities.
The Corporation has the right to redeem the Subordinated Debentures (i) on
or after January 1, 2007, in whole at any time or in part from time to time, or
(ii) at any time, in whole (but not in part), upon the occurrence of a Special
Event. The Corporation has committed to the Federal Reserve Bank of Richmond
that it will not exercise such redemption rights without having received the
prior approval of the Federal Reserve Board to do so, if then so required under
applicable capital guidelines or policies of the Federal Reserve Board.
SPECIAL EVENT REDEMPTION. If a Tax Event or a Regulatory Capital Event
shall occur and be continuing, the Corporation has the right to redeem the
Subordinated Debentures in whole (but not in part) and thereby cause a mandatory
redemption of the Capital Securities and Common Securities in whole (but not in
part) at the Special Event Redemption Price within 90 days following the
occurrence of such Tax Event or Regulatory Capital Event. In the event a Tax
Event has occurred and is continuing and the Corporation does not elect to
redeem the Subordinated Debentures and thereby cause a mandatory redemption of
such Capital Securities and Common Securities or to liquidate the Issuer and,
after satisfaction of liabilities to creditors of the Issuer in accordance with
applicable law and the Expense Agreement, cause the Subordinated Debentures to
be distributed to holders of the Capital Securities and Common Securities in
exchange therefor upon liquidation of the Issuer as described below, such
Capital Securities and Common Securities will remain outstanding and Additional
Sums (as defined herein) may be payable on the Subordinated Debentures.
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As used herein:
"Additional Sums" means the additional amounts as may be necessary in
order that the amount of Distributions then due and payable by the Issuer
on the outstanding Capital Securities and Common Securities shall not be
reduced as a result of any additional taxes, duties and other governmental
charges to which the Issuer has become subject as a result of a Tax Event.
"Like Amount" means (i) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to that
portion of the principal amount of Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, allocated to
the Common Securities and to the Capital Securities based upon the relative
Liquidation Amounts of such classes and the proceeds of which will be used
to pay the Redemption Price of such Trust Securities, and (ii) with respect
to a distribution of Subordinated Debentures to holders of Trust Securities
in connection with a dissolution or liquidation of the Issuer, Subordinated
Debentures having a principal amount equal to the Liquidation Amount of the
Trust Securities of the holder to whom such Subordinated Debentures are
distributed.
"Liquidation Amount" means the stated amount of $1,000 per Trust
Security.
"Redemption Price" means (i) with respect to an optional repayment or
redemption by the Corporation of the Subordinated Debentures on or after
January 1, 2007, the applicable redemption price specified herein, and (ii)
with respect to a repayment or redemption by the Corporation of the
Subordinated Debentures in connection with a Special Event, the Special
Event Redemption Price.
REDEMPTION PROCEDURES
Capital Securities redeemed on each Redemption Date shall be redeemed at
the applicable Redemption Price with the applicable proceeds from the
contemporaneous redemption of the Subordinated Debentures. Redemptions of the
Capital Securities shall be made and the Redemption Price shall be payable on
each Redemption Date only to the extent that the Issuer has funds on hand and
available for the payment of such Redemption Price. See ";SUBORDINATION OF
COMMON SECURITIES".
If the Issuer gives a notice of redemption in respect of the Capital
Securities, then by 12:00 noon, New York City time, on the Redemption Date, to
the extent funds are available, with respect to the Capital Securities held by
DTC or its nominee the Property Trustee will deposit irrevocably with DTC funds
sufficient to pay the applicable Redemption Price and will give DTC irrevocable
instructions and authority to pay the Redemption Price to the holders of the
Capital Securities. See ";FORM, DENOMINATION, BOOK-ENTRY PROCEDURES AND
TRANSFER". If Capital Securities are held in certificated form, the Property
Trustee, to the extent funds are available, will irrevocably deposit with the
paying agent for the Capital Securities funds sufficient to pay the applicable
Redemption Price and will give such paying agent irrevocable instructions and
authority to pay the Redemption Price to the holders thereof upon surrender of
their certificates evidencing the Capital Securities. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date for any
Capital Securities called for redemption shall be payable to the holders of such
Capital Securities on the relevant record dates for the related Distributions.
If notice of redemption shall have been given and funds deposited as required,
then upon the date of such deposit, all rights of the holders of such Capital
Securities so called for redemption will cease, except the right of the holders
of such Capital Securities to receive the Redemption Price and any unpaid
Distributions payable in respect of the Capital Securities on or prior to the
Redemption Date, but without interest on such Redemption Price, and such Capital
Securities will cease to be outstanding. In the event that any date fixed for
redemption of Capital Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day. In
the event that payment of the Redemption Price in respect of Capital Securities
called for redemption is improperly withheld or refused and not paid either by
the Issuer or by the Corporation pursuant to the Guarantee, as described under
" -- Description of Guarantee", Distributions on such Capital Securities will
continue to accrue at the then applicable rate, from the Redemption Date
originally established by the Issuer to the date such Redemption Price is
actually paid, in which case the actual payment date will be the date fixed for
redemption for purposes of calculating the Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law), the Corporation or its subsidiaries may at any time and
from time to time purchase outstanding Capital Securities by tender, in the open
market or by private agreement.
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Payment of the applicable Redemption Price on the Capital Securities and
any distribution of Subordinated Debentures to holders of Capital Securities
shall be made to the applicable recordholders thereof as they appear on the
register for such Capital Securities on the relevant record date, which shall be
a date at least 15 days prior to the Redemption Date.
If less than all of the outstanding Capital Securities and Common
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Capital Securities and Common Securities to be redeemed
shall be allocated PRO RATA to the outstanding Capital Securities and Common
Securities based upon the relative Liquidation Amounts of such classes. The
particular Capital Securities to be redeemed shall be selected on a PRO RATA
basis not more than 60 days prior to the Redemption Date by the Property Trustee
from the outstanding Capital Securities not previously called for redemption, by
such method as the Property Trustee shall deem fair and appropriate and which
may provide for the selection for redemption of portions of the Liquidation
Amount of Capital Securities of a denomination larger than $1,000, provided that
the holder of such Capital Securities has at least 100 Capital Securities
remaining after the redemption. The Property Trustee shall promptly notify the
Securities Registrar (as defined in the Trust Agreement) in writing of the
Capital Securities selected for redemption, and in the case of any Capital
Securities selected for partial redemption, the Liquidation Amount thereof to be
redeemed. For all purposes of the Trust Agreement, unless the context otherwise
requires, all provisions relating to the redemption of Capital Securities shall
relate, in the case of any Capital Securities redeemed or to be redeemed only in
part, to the portion of the aggregate Liquidation Amount of Capital Securities
which has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each holder of Trust Securities to be
redeemed at its registered address. Unless the Corporation defaults in payment
of the Redemption Price on the Subordinated Debentures, on and after the
Redemption Date interest will cease to accrue on such Subordinated Debentures or
portions thereof (and Distributions will cease to accrue on the Capital
Securities or portions thereof) called for redemption.
LIQUIDATION OF ISSUER AND DISTRIBUTION OF SUBORDINATED DEBENTURES TO HOLDERS
The holder of the Common Securities (I.E., the Corporation) has the right
at any time to terminate the Issuer and, after satisfaction of liabilities to
creditors of the Issuer in accordance with applicable law and the Expense
Agreement, cause the Subordinated Debentures to be distributed to the holders of
the Capital Securities in liquidation of the Issuer, subject to the Issuer
having received an opinion of counsel to the effect that the distribution will
not be taxable to holders of Capital Securities. In addition, the Corporation
has committed to the Federal Reserve Bank of Richmond that as so long as it (or
any affiliate) is the owner of the Common Securities it will not exercise the
foregoing right as holder of the Common Securities without having received the
prior approval of the Federal Reserve Board to do so, if then so required under
applicable capital guidelines or policies of the Federal Reserve Board.
After the liquidation date fixed for any distribution of Subordinated
Debentures (i) the Capital Securities will no longer be deemed to be
outstanding, (ii) DTC or its nominee, as the record holder of the Capital
Securities in book-entry form, will receive a registered global certificate or
certificates representing the Subordinated Debentures to be delivered upon such
distribution, and (iii) any certificates representing Capital Securities not
held by DTC or its nominee will be deemed to represent Subordinated Debentures
having a Like Amount of such Capital Securities, and bearing accrued and unpaid
interest in an amount equal to the accrued and unpaid Distributions on such
Capital Securities until such certificates are presented to the Property Trustee
or its agent for transfer or reissuance.
There can be no assurance as to the market prices for the Subordinated
Debentures that may be distributed in exchange for Capital Securities if a
dissolution and liquidation of the Issuer were to occur. Accordingly, the
Subordinated Debentures that the investor may receive on dissolution and
liquidation of the Issuer, may trade at a discount to the price that the
investor paid to purchase such Capital Securities.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, the Capital
Securities and 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 Redemption Price 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 payment of the Redemption Price the full amount of such Redemption
Price on all of the outstanding Capital Securities then called for redemption,
shall have been made or provided for, and all funds available to the
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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" (as defined in the Trust Agreement)
(an "Event of Default") with respect to the Capital Securities (see ";EVENTS OF
DEFAULT; NOTICE") resulting from a Debenture Event of Default, the Corporation,
as holder of the Common Securities, will be deemed to have waived any right to
act with respect to any such Event of Default under the Trust Agreement until
the effect of all such Events of Default with respect to the Capital Securities
have been cured, waived or otherwise eliminated. Until any such Events of
Default with respect to the Capital Securities have 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.
LIQUIDATION DISTRIBUTION UPON TERMINATION
Pursuant to the Trust Agreement, the Issuer shall automatically terminate
upon expiration of its term and shall terminate on the first to occur of:
(i) certain events of bankruptcy, dissolution or liquidation of
the holder of the Common Securities (I.E., the Corporation);
(ii) the distribution of a Like Amount of the Subordinated
Debentures to the holders of the Trust Securities, if the holder of
the Common Securities (I.E. the Corporation), has given written
direction to the Property Trustee to terminate the Issuer (which
direction is optional and wholly within the discretion of the holder
of the Common Securities);
(iii) redemption of all of the Capital Securities in connection
with the redemption of the Subordinated Debentures as described under
";REDEMPTION"; and
(iv) the entry of an order for the dissolution of the Issuer by a
court of competent jurisdiction.
If an early termination occurs as described in clause (i), (ii) or (iv)
above, the Issuer shall be liquidated by the Issuer Trustees as expeditiously as
the Issuer Trustees determine to be possible by distributing, after satisfaction
of liabilities to creditors of the Issuer in accordance with applicable law and
the Expense Agreement, to the holders of Trust Securities a Like Amount of the
Subordinated Debentures, unless such distribution is determined by the Property
Trustee not to be practical, in which event such holders will be entitled to
receive out of the assets of the Issuer available for distribution to holders,
after satisfaction of liabilities to creditors of the Issuer in accordance with
applicable law and the Expense Agreement, an amount equal to, in the case of
holders of the Capital Securities, the aggregate of the Liquidation Amounts of
the Capital Securities, plus accrued and unpaid Distributions thereon to the
date of payment (the "Liquidation Distribution"). If such Liquidation
Distribution can be paid only in part because the Issuer has insufficient assets
available to pay in full the aggregate Liquidation Distribution, then the
amounts payable directly by the Issuer on the Capital Securities shall be paid
on a PRO RATA basis. The holder of the Common Securities (I.E., the Corporation)
will be entitled to receive distributions upon any such liquidation PRO RATA
with the holders of the Capital Securities, except that if a Debenture Event of
Default has occurred and is continuing, the Capital Securities shall have a
priority over the Common Securities.
EVENTS OF DEFAULT; NOTICE
Under the Trust Agreement, any one of the following events constitutes an
Event of Default (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) the occurrence of a Debenture Event of Default under the
Indenture (see " -- Description of Subordinated Debentures; DEBENTURE
EVENTS OF DEFAULT"); or
(ii) default by the Property Trustee in the payment of any
Distribution when it becomes due, and continuation of such default for
a period of 30 days; or
(iii) default by the Property Trustee in the payment of any
Redemption Price of any Trust Security when it becomes due; or
(iv) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Issuer Trustees in the
Trust Agreement (other than a covenant or warranty a default in the
performance of which or the
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breach of which is dealt with in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 60 days after
there has been given, by registered or certified mail, to the
defaulting Issuer Trustee or Trustees by the holders of at least 25
percent in aggregate Liquidation Amount of the outstanding Capital
Securities, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice
of Default" under the Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency
with respect to the Property Trustee and the failure by the
Corporation to appoint a successor Property Trustee within 60 days
thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the Capital Securities and the
Administrators, unless such Event of Default shall have been cured or waived.
The Corporation, as Depositor, and the Administrators are required to file
annually with the Property Trustee a certificate as to whether or not they are
in compliance with all the conditions and covenants applicable to them under the
Trust Agreement.
If a Debenture Event of Default has occurred and is continuing, the Capital
Securities shall have a preference over the Common Securities upon termination
of the Issuer as described above. See ";LIQUIDATION DISTRIBUTION UPON
TERMINATION". The existence of an Event of Default does not entitle the holders
of Capital Securities to accelerate the maturity thereof.
REMOVAL OF ISSUER TRUSTEES
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. 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 Trust Agreement.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal standards of the Trust
Indenture Act or of any jurisdiction in which any part of the assets of the
Issuer may at the time be located, the Property Trustee shall have power to
appoint one or more persons either to act as a co-trustee, jointly with the
Property Trustee, of all or any part of such assets, or to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such person or persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of the Trust Agreement.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any entity into which the Property Trustee or the Delaware Trustee that is
not a natural person may be merged or converted or with which it may be
consolidated, or any entity resulting from any merger, conversion or
consolidation to which such Trustee shall be a party, or any entity succeeding
to all or substantially all the corporate trust business of such Trustee, shall
be the successor of such Trustee under the Trust Agreement, provided such entity
shall be otherwise qualified and eligible.
MERGER, CONSOLIDATION, AMALGAMATION OR REPLACEMENT OF ISSUER
The Issuer may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any entity, except as described below or as
otherwise indicated in the Trust Agreement. The Issuer may, at the request of
the holder of the Common Securities (I.E, the Corporation) and with the consent
of a majority (based on the Liquidation Amount) of the Capital Securities, merge
with or into, consolidate, amalgamate, or be replaced by or convey, transfer or
lease its properties and assets substantially as an entirety to a trust
organized as such under the laws of any state; provided, that (i) such successor
entity either (a) expressly assumes all of the obligations of the Issuer 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 Property Trustee
expressly appoints a trustee of such successor entity possessing the same powers
and duties as the Property Trustee as the holder of the 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, consolidation, amalgamation, replacement, conveyance, transfer or
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lease does not cause the Capital Securities (including any Successor Securities)
to be downgraded by any nationally recognized statistical rating organization,
(v) such merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease does not adversely affect the rights, preferences and privileges of the
holders of the Capital Securities (including any Successor Securities) in any
material respect, (vi) such successor entity has a purpose substantially
identical to that of the Issuer, (vii) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Issuer has
received an opinion from independent counsel to the Issuer experienced in such
matters to the effect that (a) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Capital Securities (including
any Successor Securities) in any material respect, and (b) following such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease,
neither the Issuer nor such successor entity will be required to register as an
"investment company" under the Investment Company Act of 1940, as amended (the
"Investment Company Act"), and (viii) the Corporation or any permitted successor
or assignee owns all of the common securities of such successor entity and
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee. Notwithstanding the
foregoing, the Issuer shall not, except with the consent of holders of 100
percent in Liquidation Amount of the Capital Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or lease
its properties and assets substantially as an entirety to any other entity or
permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger, replacement, conveyance,
transfer or lease would cause the Issuer or the successor entity to be
classified as an association taxable as a corporation or as other than a grantor
trust for United States federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF TRUST AGREEMENT
Except as provided below and under " -- Description of Guarantee; AMENDMENT
AND ASSIGNMENT" and as otherwise required by law and the Trust Agreement, the
holders of the Capital Securities will have no voting rights.
The Trust Agreement may be amended from time to time by the holder of the
Common Securities (I.E., the Corporation) and the Property Trustee without the
consent of the holders of the Capital Securities (i) to cure any ambiguity,
correct or supplement any provisions in the Trust Agreement that may be
inconsistent with any other provision, or to make any other provisions with
respect to matters or questions arising under the Trust Agreement, which shall
not be inconsistent with the other provisions of the Trust Agreement, or (ii) to
modify, eliminate or add to any provisions of the Trust Agreement to such extent
as shall be necessary to ensure that the Issuer will be classified for United
States federal income tax purposes as a grantor trust or as other than an
association taxable as a corporation at all times that any Trust Securities are
outstanding or to ensure that the Issuer will not be required to register as an
"investment company" under the Investment Company Act; provided, however, that
in the case of clauses (i) or (ii), such action shall not adversely affect in
any material respect the interests of any holder of Trust Securities, and any
amendments of such Trust Agreement shall become effective when notice thereof is
given to the holders of Trust Securities. The Trust Agreement may be amended by
the holder of the Common Securities (I.E., the Corporation) and the Property
Trustee with (i) the consent of holders representing not less than a majority
(based on Liquidation Amount) of the outstanding Trust Securities, and (ii)
receipt by the Issuer Trustees of an opinion of counsel to the effect that such
amendment or the exercise of any power granted to the Issuer Trustees in
accordance with such amendment will not cause the Issuer to be classified as an
association taxable as a corporation or affect the Issuer's status as a grantor
trust for United States federal income tax purposes or the Issuer's exemption
from status as an "investment company" under the Investment Company Act,
provided that without the consent of each holder of Trust Securities, the Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date, or (ii) restrict the right of a holder of Trust Securities to
institute suit for the enforcement of any such payment on or after such date.
So long as any Subordinated Debentures are held by the Property Trustee,
the Issuer Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on the Property Trustee with respect to
such Subordinated Debentures, (ii) waive any past default that is waiveable
under Section 513 of the Indenture, (iii) exercise any right to rescind or annul
a declaration that the principal of all the Subordinated Debentures shall be due
and payable, or (iv) consent to any amendment, modification or termination of
the Indenture or such Subordinated Debentures, where such consent shall be
required, without, in each case, obtaining the prior approval of the holders of
a majority in aggregate Liquidation Amount of all outstanding Capital
Securities; provided, however, that where a consent under the Indenture would
require the consent of each holder of Subordinated Debentures affected thereby,
no such consent shall be given by the Property Trustee without the prior consent
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
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of the Capital Securities, except by subsequent vote of the holders of the
Capital Securities. The Property Trustee shall notify each holder of Capital
Securities of any notice of default with respect to the Subordinated Debentures.
In addition to obtaining the foregoing approvals of the 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 such action shall not cause the Issuer to be classified as an association
taxable as a corporation or as other than a grantor trust for United States
federal income tax purposes on account of such action.
Any required approval of holders of Capital Securities may be given at a
meeting of holders of Capital Securities convened for such purpose or pursuant
to written consent. The Property Trustee will cause a notice of any meeting at
which holders of 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 Capital Securities in the manner set forth in the Trust
Agreement.
No vote or consent of the holders of Capital Securities will be required
for the Issuer to redeem and cancel the Capital Securities in accordance with
the Trust Agreement.
Notwithstanding that holders of 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, any Issuer Trustee or any
affiliate of the Corporation or any Issuer Trustee, shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
FORM, DENOMINATION, BOOK-ENTRY PROCEDURES AND TRANSFER
The Capital Securities will be in blocks having a Liquidation Amount of not
less than $100,000 (100 Capital Securities) and may be transferred or exchanged
in such blocks in the manner and at the offices described below.
New Capital Securities initially will be represented by one or more Capital
Securities in registered, global form (collectively, the "Global Capital
Securities"). The Global Capital Securities will be deposited on 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 Securities 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
Securities may not be exchanged for Capital Securities in certificated form
except in the limited circumstances described below. See ";EXCHANGE OF
BOOK-ENTRY CAPITAL SECURITIES FOR CERTIFICATED CAPITAL SECURITIES".
DEPOSITARY PROCEDURES. DTC has advised the Issuer 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 Purchaser), 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 Issuer and the Corporation that, pursuant to
procedures established it, by ownership of interests in the Global Capital
Securities 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 Securities).
Investors in the Global Capital Securities may hold their interests therein
directly through DTC if they are Participants in such system, or indirectly
through organizations (including the Euroclear System ("Euroclear") and Cedel,
S.A. ("CEDEL") which are Participants in such system. All interests in a Global
Capital Security, including those held through Euroclear or CEDEL, may be
subject to the procedures and requirements of DTC. Those interests held through
Euroclear or CEDEL may also be subject to the procedures and requirements of
such system. 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 a 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 a Global Capital
Security to pledge such interests to persons or entities that do not participate
in the DTC system, or otherwise
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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".
Except as described below, owners of interests in the Global Capital
Securities will not have Capital Securities registered in their names, will not
receive physical delivery of Capital Securities in certificated form and will
not be considered the registered owners or holders thereof under the Trust
Agreement 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 Trust Agreement. Under the terms of
the Trust Agreement, the Property Trustee will treat the persons in whose names
the Capital Securities, including the Global Capital Securities, 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 Securities, 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 Securities 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 Issuer and the
Corporation that its current practice, upon receipt of any payment in respect of
securities such as the Capital Securities, 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
Capital Securities 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 Issuer or the Corporation. Neither the Issuer nor the Corporation nor the
Property Trustee will be liable for any delay by DTC or any of its Participants
in identifying the beneficial owners of the Capital Securities, and the Issuer,
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.
Except for trades involving only Euroclear and CEDEL participants,
interests in the Global Capital Securities 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.
Transfers between Participants in DTC will be effected in accordance with
DTC's procedures, and will be settled in same-day funds. Transfers between
participants in Euroclear and CEDEL will be effected in the ordinary way in
accordance with their respective rules and operating procedures.
Subject to compliance with the transfer restrictions applicable to the
Capital Securities described herein, cross-market transfers between the
Participants in DTC, on the one hand, and Euroclear or CEDEL participants, on
the other hand, will be effected through DTC in accordance with DTC's rules on
behalf of Euroclear or CEDEL, as the case may be, by its respective depositary;
however, such cross-market transactions will require delivery of instructions to
Euroclear or CEDEL, as the case may be, by the counterparty in such system in
accordance with the rules and procedures and within the established deadlines
(Brussels time) of such system. Euroclear or CEDEL, as the case may be, will, if
the transaction meets its settlement requirements, deliver instructions to its
respective depositary or take action to effect final settlement on its behalf by
delivering or receiving interests in the relevant Global Capital Securities in
DTC, and making or receiving payment in accordance with normal procedures for
same-day funds settlement applicable to DTC. Euroclear participants and CEDEL
participants may not deliver instructions directly to the depositaries for
Euroclear or CEDEL.
Because of the time zone differences, the securities account of a Euroclear
or CEDEL participant purchasing an interest in a Global Capital Security from a
Participant in DTC will be credited, and any such crediting will be reported to
the relevant Euroclear or CEDEL participant, during the securities settlement
processing day (which must be a business day for Euroclear and CEDEL)
immediately following the settlement date of DTC. Cash received in Euroclear or
CEDEL as a result of sales of interest in a Global Capital Security by or
through a Euroclear or CEDEL participant to a Participant in DTC will be
received with value on the settlement date of DTC but will be available in the
relevant Euroclear or CEDEL cash account only as of the business day for
Euroclear or CEDEL following DTC's settlement date.
DTC has advised the Issuer and the Corporation that it will take any action
permitted to be taken by a holder of Capital Securities only at the direction of
one or more Participants to whose account with DTC interests in the Global
Capital Securities are credited and only in respect to such portion of the
Liquidation Amount of the Capital Securities as to which
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such Participant or Participants has or have given such direction. However, if
there is an Event of Default under the Trust Agreement, DTC reserves the right
to exchange the Global Capital Securities for Capital Securities in certificated
form and to distribute such Capital Securities to its Participants.
The information in this section concerning DTC, Euroclear and CEDEL and
their book-entry systems has been obtained from sources that the Issuer and the
Corporation believe to be reliable, but neither the Issuer nor the Corporation
takes responsibility for the accuracy thereof.
Although DTC, Euroclear and CEDEL have agreed to the foregoing procedures
to facilitate transfers of interest in the Global Capital Securities among
participants in DTC, Euroclear and CEDEL, they are under no obligation to
perform or to continue to perform such procedures, and such procedures may be
discontinued at any time. Neither the Issuer or the Corporation nor the Property
Trustee will have any responsibility for the performance by DTC, Euroclear or
CEDEL or their respective participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations.
EXCHANGE OF BOOK-ENTRY CAPITAL SECURITIES FOR CERTIFICATED CAPITAL
SECURITIES. A Global Capital Security is exchangeable for Capital Securities in
registered certificated form if (i) DTC (x) notifies the Issuer that it is
unwilling or unable to continue as depositary for the Global Capital Security
(the "Depositary") and the Issuer 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 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.
PAYMENT AND PAYING AGENCY
Payments in respect of the Capital Securities held in global form shall be
made to the Depositary, which shall credit the relevant accounts at the
Depositary on the applicable Distribution Dates. Payments in respect of 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 maintained by the Securities Registrar appointed under the Trust
Agreement. 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 Administrators. The Paying Agent shall be permitted to resign as Paying
Agent upon 30 days' written notice to the Property Trustee and the
Administrators. In the event that the Property Trustee shall no longer be the
Paying Agent, the Property Trustee shall appoint a successor (which shall be a
bank or trust company acceptable to the Administrators) to act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
The Property Trustee will act as registrar and transfer agent for the
Capital Securities. Registration of transfers of Capital Securities will be
effected without charge by or on behalf of the Issuer, but upon payment of any
tax or other governmental charges that may be imposed in connection with any
transfer or exchange. The Issuer will not be required to register or cause to be
registered the transfer of any Capital Securities after such Capital Securities
have been called for redemption.
INFORMATION CONCERNING PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of
an Event of Default, undertakes to perform only such duties as are specifically
set forth in the Trust Agreement and, after such Event of Default, must exercise
the same degree of care and skill as a prudent person would exercise or use in
the conduct of his or her own affairs. Subject to this provision, the Property
Trustee is under no obligation to exercise any of the powers vested in it by the
Trust Agreement at the request of any holder of Capital 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
under the Trust Agreement and the Property Trustee is required to decide between
alternative causes of action, construe ambiguous provisions in the Trust
Agreement or is unsure of the application of any provision of the Trust
Agreement, and the matter is not one on which holders of Capital Securities are
entitled under the Trust Agreement to vote, then the Property Trustee shall take
such action as is directed by the Corporation, as Depositor, 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.
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MISCELLANEOUS
The Administrators and the Property Trustee are authorized and directed to
conduct the affairs of and to operate the Issuer in such a way that the Issuer
will not be deemed to be an "investment company" required to be registered under
the Investment Company Act and will not be classified as an association taxable
as a corporation or as other than a grantor trust for United States federal
income tax purposes and so that the Subordinated Debentures will be treated as
indebtedness of the Corporation for United States federal income tax purposes.
In this connection, the Property Trustee and the holder of the Common Securities
(I.E., the Corporation) are authorized to take any action, not inconsistent with
applicable law, the certificate of trust of the Issuer or the Trust Agreement,
that the Property Trustee and the holder of the Common Securities (I.E., the
Corporation) determine in their sole 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 Capital Securities.
Holders of the Capital Securities have no preemptive or similar rights.
The Issuer may not borrow money or issue debt or mortgage or pledge any of
its assets.
DESCRIPTION OF SUBORDINATED DEBENTURES
The Old Subordinated Debentures were issued, and the New Subordinated
Debentures will be issued, as a separate series under the Indenture. The
Indenture has been qualified under the Trust Indenture Act. This summary of
certain terms and provisions of the Subordinated Debentures and the Indenture
describes the material terms thereof but 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 Old Capital Securities, the Issuer
invested the proceeds thereof, together with the consideration paid by the
Corporation for the Common Securities, in the Old Subordinated Debentures issued
by the Corporation.
Pursuant to the Exchange Offer, the Corporation will exchange the Old
Subordinated Debentures for the New Subordinated Debentures as soon as
practicable after the date hereof. No Old Subordinated Debentures will remain
outstanding after such exchange. The Subordinated Debentures are unsecured and
subordinate and junior in right of payment to the extent and in the manner set
forth in the Indenture to all Senior Debt of the Corporation. See ";
SUBORDINATION". The Corporation is a holding company and almost all of the
operating assets of the Corporation and its consolidated subsidiaries are owned
by such subsidiaries. The Corporation relies primarily on dividends from such
subsidiaries to meet its obligations. The payment by the Corporation's bank
subsidiaries, in particular, are subject to restrictions under federal (and, in
the case of state-chartered banks, state) law. Because the Corporation is a
holding company, the right of the Corporation to participate in any distribution
of assets of any subsidiary upon such subsidiary's liquidation or reorganization
or otherwise, is subject to the prior claims of creditors of the subsidiary,
except to the extent the Corporation may itself be recognized as a creditor of
that subsidiary. Accordingly, the Subordinated Debentures will be effectively
subordinated to all existing and future liabilities of the Corporation's
subsidiaries, and holders of Subordinated Debentures should look only to the
assets of the Corporation for payments on the Subordinated Debentures. The
Indenture does not limit the incurrence or issuance of other secured or
unsecured debt of the Corporation, including the Senior Debt, whether under the
Indenture, any other indenture that the Corporation may enter into in the future
or otherwise. See "; SUBORDINATION". The Subordinated Debentures bear interest
payable, at the annual rate of 7.85% of the principal amount thereof,
semi-annually in arrears on January 1 and July 1 of each year (each, an
"Interest Payment Date"), commencing July 1, 1997, to the person in whose name
each Subordinated Debenture is registered, subject to certain exceptions, at the
close of business on the Business Day (as defined in the Indenture) next
preceding such Interest Payment Date. It is anticipated that, until the
liquidation, if any, of the Issuer, each Subordinated Debenture will be held in
the name of the Property Trustee in trust for the benefit of the holders of the
Capital 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 Subordinated Debentures is not
a Business Day, then payment of the interest payable on such date will be made
on the next succeeding Business Day (and without any interest or other payment
in respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date such payment was originally payable. Accrued interest that is not
paid on the applicable Interest Payment Date will bear additional interest on
the amount thereof (to the extent permitted by law) at the rate per annum of
7.85% thereof, compounded semi-
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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 applicable. The Subordinated
Debentures will mature on January 1, 2027.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as no Debenture Event of Default has occurred and is continuing,
the Corporation has the right under the Indenture at any time during the term of
the 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. At the end of such Extension Period, the Corporation
must pay all interest then accrued and unpaid (together with interest thereon at
the annual rate of 7.85%, compounded semi-annually, to the extent permitted by
applicable law). During an Extension Period, interest will continue to accrue
and holders of Subordinated Debentures (or holders of Capital Securities while
such series is outstanding) will be required to recognize income (in the form of
original issue discount) for United States federal income tax purposes. See
"Certain Federal Income Tax Consequences -- Interest Income and Original Issue
Discount".
During any such Extension Period, the Corporation may not, and may not
permit any subsidiary of the Corporation to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Corporation's capital stock, or (ii) make any
payment of principal, interest or premium, if any, on or repay, repurchase or
redeem any debt securities of the Corporation that rank PARI PASSU in all
respects with or junior in interest to the Subordinated Debentures or make any
guarantee payments with respect to any guarantee by the Corporation of the debt
securities of any subsidiary of the Corporation if such guarantee ranks PARI
PASSU in all respects with or junior in interest to the Subordinated Debentures
(other than (a) repurchases, redemptions or other acquisitions of shares of
capital stock of the Corporation in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of one or more
employees, officers, directors or consultants, in connection with a dividend
reinvestment or stockholder stock purchase plan or in connection with the
issuance of capital stock of the Corporation (or securities convertible into or
exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of any exchange or conversion of any class or series of the Corporation's
capital stock (or any capital stock of a subsidiary of the Corporation) for any
class or series of the Corporation's capital stock or of any class or series of
the Corporation's indebtedness for any class or series of the Corporation's
capital stock, (c) the purchase of fractional interest in shares of the
Corporation's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (d) any
declaration of a dividend in connection with any stockholder's rights plan, or
the issuance of rights, stock or other property under any stockholder's rights
plan, or the redemption or repurchase of rights pursuant thereto, or (e) any
dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid or
ranks PARI PASSU with or junior to such stock). Prior to the termination of any
such Extension Period, the Corporation may further defer the payment of
interest, provided that no Extension Period may exceed 10 consecutive
semi-annual periods or extend beyond the Stated Maturity of the Subordinated
Debentures. 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 and the Debenture Trustee notice
of its election of such Extension Period at least one Business Day prior to the
earlier of (i) the date the Distributions on the Capital Securities would have
been payable, except for the election to begin such Extension Period, or (ii)
the date the Property Trustee is required to give notice to the holders of such
Capital Securities of the record date for such Distributions or the date such
Distributions are payable, but in any event not less than one Business Day prior
to such record date. The Debenture Trustee shall give notice of the
Corporation's election to begin a new Extension Period to the holders of the
Capital Securities. There is no limitation on the number of times that the
Corporation may elect to begin an Extension Period.
ADDITIONAL SUMS
If the Issuer is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Corporation will pay as
additional amounts on the Subordinated Debentures such Additional Sums as shall
be required so that the Distributions payable by the Issuer shall not be reduced
as a result of any such additional taxes, duties or other governmental charges.
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REGISTRATION, DENOMINATION AND TRANSFER
The Subordinated Debentures will be registered in the name of the Issuer.
In the event that the Subordinated Debentures are distributed to holders of
Capital Securities, it is anticipated that the depositary arrangements for the
Subordinated Debentures will be substantially identical to those in effect for
the Capital Securities. See " -- Description of Capital Securities; FORM,
DENOMINATION, BOOK-ENTRY PROCEDURES AND TRANSFER".
The Subordinated Debentures will be issuable only in registered form
without coupons in minimum denominations of $100,000 and integral multiplies of
$1,000 in excess thereof. Subordinated Debentures will be exchangeable for other
Subordinated Debentures, of any authorized denominations, of a like aggregate
principal amount.
Payments on Subordinated Debentures represented by a global security will
be made to DTC, as the Depositary for the Subordinated Debentures. In the event
Subordinated Debentures are issued in definitive form, principal and interest
will be payable, the transfer of the Subordinated Debentures will be
registrable, and Subordinated Debentures will be exchangeable for Subordinated
Debentures of other denominations of a like aggregate principal amount, at the
corporate trust office of the Debenture Trustee in New York, New York, or at the
offices of any paying agent or transfer agent appointed by the Corporation,
provided that payment of interest may be made at the option of the Corporation
by check mailed to the address of the persons entitled thereto or by wire
transfer. In addition, if the Subordinated Debentures are issued in certificated
form, the record dates for payments of interest will be the 15th day of the
month preceding the Interest Payment Dates.
In the event of any redemption, neither the Corporation nor the Debenture
Trustee shall be required to (i) issue, register the transfer of or exchange
Subordinated Debentures during a period beginning at the opening of business 15
days before the day of selection for redemption of Subordinated Debentures and
ending at the close of business on the day of mailing of the relevant notice of
redemption, or (ii) transfer or exchange any Subordinated Debentures so selected
for redemption, except, in the case of any Subordinated Debentures being
redeemed in part, any portion thereof not to be redeemed.
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 Subordinated Debenture and remaining
unclaimed for two years after such principal (and premium, if any) or interest
has become due and payable shall, at the request of the Corporation, be repaid
to the Corporation and the holder of such Subordinated Debenture shall
thereafter look, as a general unsecured creditor, only to the Corporation for
payment thereof.
REDEMPTION
The Corporation may, at its option, redeem the Subordinated Debentures on
or after January 1, 2007, in whole or in part from time to time. The Corporation
has committed, however, to the Federal Reserve Bank of Richmond that it will not
exercise this redemption option without having received the prior approval of
the Federal Reserve Board to do so, if then so required under applicable capital
guidelines or policies of the Federal Reserve Board. The Redemption Price for
any Subordinated Debenture so redeemed shall equal the following prices,
expressed in percentages of the principal amount together with any accrued and
unpaid interest thereon to the Redemption Date, if redeemed during the 12-month
period beginning January 1 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
<S> <C>
2007...................................................................................... 103.925%
2008...................................................................................... 103.533
2009...................................................................................... 103.140
2010...................................................................................... 102.748
2011...................................................................................... 102.355
2012...................................................................................... 101.963
2013...................................................................................... 101.570
2014...................................................................................... 101.178
2015...................................................................................... 100.785
2016...................................................................................... 100.393
2017 and thereafter....................................................................... 100.000%
</TABLE>
Subordinated Debentures in denominations larger than $1,000 may be redeemed
in part but only in integral multiples of $1,000. The Corporation may not redeem
the Subordinated Debentures in part unless all accrued and unpaid interest has
been paid in full on all outstanding Subordinated Debentures for all interest
periods terminating on or prior to the Redemption Date.
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In addition, if a Tax Event or Regulatory Capital Event shall occur and be
continuing, the Corporation may, at its option, redeem Subordinated Debentures
in whole (but not in part) at any time within 90 days of the occurrence of such
Tax Event or Regulatory Capital Event, at the Special Event Redemption Price,
which is equal to the greater of (i) 100% of the principal amount of the
Subordinated Debentures or (ii) the sum, as determined by a Quotation Agent, of
the present values of the principal amount and premium payable as part of the
Redemption Price with respect to an optional redemption of such Subordinated
Debentures on January 1, 2007, together with scheduled payments of interest from
the Redemption Date to January 1, 2007 (the "Remaining Life"), in each case
discounted to the Redemption 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 interest thereon to the Redemption Date. The Corporation has
committed to the Federal Reserve Bank of Richmond that it will not exercise this
redemption option without having received the prior approval of the Federal
Reserve Board to do so, if then so required under applicable capital guidelines
or policies of the Federal Reserve Board.
"Adjusted Treasury Rate" means, with respect to any Redemption Date, the
rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date plus (i) 1.00% if such Redemption Date
occurs on or prior to January 1, 1998 and (ii) .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 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.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Debenture Trustee after consultation with the Corporation. "Reference Treasury
Dealer" means: (i) Morgan Stanley & Co. Incorporated and its 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 Debenture Trustee after
consultation with the Corporation.
"Comparable Treasury Price" means, with respect to any Redemption Date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such Redemption Date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the average
of the Reference Treasury Dealer Quotations for such Redemption Date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Debenture Trustee obtains fewer than three such Reference Treasury
Dealer Quotations, the average of all such Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Debenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Debenture Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such Redemption Date.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each holder of Subordinated Debentures to
be redeemed at its registered address. Unless the Corporation defaults in
payment of the Redemption Price, on and after the Redemption Date interest
ceases to accrue on such Subordinated Debentures or portions thereof called for
redemption.
The Subordinated Debentures will not be subject to any sinking fund.
RESTRICTIONS ON CERTAIN PAYMENTS
The Corporation has agreed (and in connection with the New Subordinated
Debentures will agree) that it will not, and will not permit any subsidiary of
the Corporation to, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Corporation's capital stock, or (ii) make any payment of principal, interest
or premium, if any, on or repay, repurchase or redeem any debt securities of the
Corporation that rank PARI PASSU in all respects with or junior in interest to
the Subordinated Debentures or make any guarantee payments with respect to any
guarantee by the Corporation of the debt securities of any subsidiary of the
Corporation if such guarantee ranks PARI PASSU in all respects with or junior in
interest to the Subordinated Debentures (other than (a) repurchases, redemptions
or other acquisitions or shares of capital stock of the Corporation in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of one or more employees, officers,
directors or consultants, in connection
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with a dividend reinvestment or stockholder stock purchase plan or in connection
with the issuance of capital stock of the Corporation (or securities convertible
into or exercisable for such capital stock) as consideration in an acquisition
transaction theretofore entered into, (b) as a result of any exchange or
conversion of any class or series of the Corporation's capital stock (or any
capital stock of a subsidiary of the Corporation) for any class or series of the
Corporation's capital stock or of any class or series of the Corporation's
indebtedness for any class or series of the Corporation's capital stock, (c) the
purchase of fractional interests in shares of the Corporation's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (d) any declaration of a dividend in
connection with any stockholder's rights plan, or the issuance of rights, stock
or other property under any stockholder's rights plan, or the redemption or
repurchase of rights pursuant thereto, or (e) any dividend in the form of stock,
warrants, options or other rights where the dividend stock or the stock issuable
upon exercise of such warrants, options or other rights is the same stock as
that on which the dividend is being paid or ranks PARI PASSU with or junior to
such stock), if at such time (i) there shall have occurred any event of which
the Corporation has actual knowledge that (a) with the giving of notice or the
lapse of time, or both, would constitute a Debenture Event of Default with
respect to the Subordinated Debentures and (b) in respect of which the
Corporation shall not have taken reasonable steps to cure, (ii) if the
Subordinated Debentures are held by the Issuer, the Corporation shall be in
default with respect to its payment of any obligations under the Guarantee, or
(iii) the Corporation shall have given notice of its selection of an Extension
Period as provided in the Indenture with respect to the Subordinated Debentures
and shall not have rescinded such notice, or such Extension Period, or any
extension thereof, shall be continuing.
MODIFICATION OF INDENTURE
From time to time the Corporation and the Debenture Trustee may, without
the consent of the holders of the Subordinated Debentures, amend, waive or
supplement the Indenture for specified purposes, including, among other things,
curing ambiguities, defects or inconsistencies (provided that any such action
does not materially adversely affect the interest of the holders of Subordinated
Debentures or the holders of the Capital Securities so long as they remain
outstanding) and qualifying, or maintaining the qualification of, the Indenture
under the Trust Indenture Act. The Indenture contains provisions permitting the
Corporation and the Debenture Trustee, with the consent of the holders of not
less than a majority in principal amount of Subordinated Debentures affected, to
modify the Indenture in a manner affecting the rights of the holders of the
Subordinated Debentures, provided that no such modification may, without the
consent of the holder of each outstanding Subordinated Debenture so affected,
(i) change the Stated Maturity of the Subordinated Debentures, except as
otherwise specified herein, or reduce the principal amount thereof, or reduce
the rate or extend the time of payment of interest thereon, or (ii) reduce the
percentage of principal amount of the Subordinated Debentures, the holders of
which are required to consent to any such modification of the Indenture,
provided that so long as any of the Capital Securities remain outstanding, no
such modification may be made that adversely affects the holders of such Capital
Securities in any material respect, and no termination of the Indenture may
occur, and no waiver of any Debenture Event of Default or compliance with any
covenant under the Indenture may be effective, without the prior consent of the
holders of at least a majority of the aggregate Liquidation Amount of such
Capital Securities, unless and until the principal of the Subordinated
Debentures and all accrued and unpaid interest thereon have been paid in full
and certain other conditions are satisfied.
In addition, the Corporation and the Debenture Trustee may execute, without
the consent of any holder of Subordinated Debentures, any supplemental indenture
to the Indenture for the purpose of creating any new series of junior
subordinated debentures.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events that has occurred and is continuing constitutes an event of default
thereunder and therefore constitutes a Debenture Event of Default:
(i) failure for 30 days to pay any interest on the Subordinated
Debentures when due (subject to the deferral of any due date in the
case of an Extension Period); or
(ii) failure to pay any principal or premium, if any, on any
Subordinated Debentures when due, whether at maturity, upon redemption
by declaration or otherwise; or
(iii) failure to observe or perform in any material respect
certain other covenants contained in the Indenture for 90 days after
written notice to the Corporation from the Debenture Trustee or the
holders of at least 25 percent in aggregate principal amount of
outstanding Subordinated Debentures; or
(iv) certain events of bankruptcy, insolvency or reorganization
of the Corporation.
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The holders of a majority in aggregate outstanding principal amount of
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 percent in aggregate
outstanding principal amount of Subordinated Debentures may declare the
principal due and payable immediately upon a Debenture Event of Default, and
should the Debenture Trustee or such holders of Subordinated Debentures fail to
make such declaration, the holders of at least 25 percent in aggregate
Liquidation Amount of the Capital Securities shall have such right. The holders
of a majority in aggregate outstanding principal amount of Subordinated
Debentures may annul such declaration and waive the default if the default
(other than the non-payment of the principal of 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. Should the holders
of the Subordinated Debentures fail to annul such declaration and waive such
default, the holders of a majority in aggregate Liquidation Amount of the
Capital Securities shall have such right.
The holders of a majority in aggregate outstanding principal amount of the
Subordinated Debentures affected thereby may, on behalf of the holders of all
the Subordinated Debentures, waive any past default, except a default in the
payment of principal or interest (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee) or
a default in respect of a covenant or provision which under the Indenture cannot
be modified or amended without the consent of the holder of each outstanding
Subordinated Debenture. Should the holders of Subordinated Debentures fail to
annul such declaration and waive such default, the holders of a majority in
aggregate Liquidation Amount of the Capital Securities shall have such right.
The Corporation is required to file annually with the Debenture Trustee a
certificate as to whether or not the Corporation is in compliance with all the
conditions and covenants applicable to it under the Indenture.
In case a Debenture Event of Default shall occur and be continuing, the
Property Trustee will have the right to declare the principal of and the
interest on the Subordinated Debentures, and any other amounts payable under the
Indenture, to be forthwith due and payable and to enforce its other rights as a
creditor with respect to the Subordinated Debentures.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES
If (i) a Debenture Event of Default has occurred and is continuing and (ii)
such event is attributable to the failure of the Corporation to pay interest or
principal on the Subordinated Debentures on the date such interest or principal
is otherwise payable, then a holder of Capital Securities may institute a Direct
Action against the Corporation for enforcement of payment to such holder of the
principal of or interest on the Subordinated Debentures having a principal
amount equal to the aggregate Liquidation Amount of the Capital Securities of
such holder. 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 the Capital Securities. If the right to bring a Direct Action is removed,
the Issuer may become subject to the reporting obligations under the Exchange
Act. The Corporation has the right under the Indenture to set-off any payment
made to such holder of Capital Securities by the Corporation in connection with
a Direct Action.
The holders of the Capital Securities would not be able to exercise
directly any remedies other than those set forth in the preceding paragraph
available to the holders of the Subordinated Debentures unless there shall have
been an Event of Default under the Trust Agreement. See " -- Description of
Capital Securities; EVENTS OF DEFAULT; NOTICE".
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Corporation will not consolidate with or
merge into any other Person (as defined in the Indenture) or convey, transfer or
lease its properties and assets substantially as an entirety to any Person, and
no Person will consolidate with or merge into the Corporation or convey,
transfer or lease its properties and assets substantially as an entirety to the
Corporation, unless (i) in case the Corporation consolidates with or merges into
another Person or conveys or transfers its properties and assets substantially
as an entirety to any Person, the successor Person is organized under the laws
of the United States or any state or Washington, D.C., and such successor Person
expressly assumes the Corporation's obligations on the Subordinated Debentures
issued under the Indenture; (ii) immediately after giving effect thereto, no
Debenture Event of Default, and no event which, after notice or lapse of time or
both, would become a Debenture Event of Default, shall have happened and be
continuing; (iii) such transaction is permitted under the Trust Agreement and
the Guarantee and does not give rise to any breach or violation of the Trust
Agreement or the Guarantee; and (iv) certain other conditions as prescribed in
the Indenture are met.
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The general provisions of the Indenture do not afford holders of the
Subordinated Debentures protection in the event of a highly leveraged or other
transaction involving the Corporation that may adversely affect holders of the
Subordinated Debentures.
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all Subordinated
Debentures not previously delivered to the Debenture Trustee for cancellation
(i) have become due and payable, or (ii) will become due and payable at their
Stated Maturity within one year, and the Corporation deposits or causes to be
deposited with the Debenture Trustee funds, in trust, for the purpose and in an
amount in the currency or currencies in which the Subordinated Debentures are
payable sufficient to pay and discharge the entire indebtedness on the
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, 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.
DISTRIBUTION OF SUBORDINATED DEBENTURES
As described under " -- Description of Capital Securities; LIQUIDATION OF
ISSUER AND DISTRIBUTION OF SUBORDINATED DEBENTURES TO HOLDERS", under certain
circumstances involving the termination of the Issuer, Subordinated Debentures
may be distributed to the holders of the Capital Securities in liquidation of
the Issuer, after satisfaction of liabilities to creditors of the Issuer in
accordance with applicable law and the Expense Agreement. It is anticipated that
the depositary arrangements for the Subordinated Debentures would be
substantially identical to those in effect for the Capital Securities. If the
Subordinated Debentures are distributed to the holders of Capital Securities
upon the liquidation of the Issuer, the Corporation will use its reasonable best
efforts to list the Subordinated Debentures on the New York Stock Exchange or
such other stock exchanges, if any, on which the Capital Securities are then
listed. There can be no assurance as to the market price of any Subordinated
Debentures that may be distributed to the holders of Capital Securities.
SUBORDINATION
The Indenture provides that the Subordinated Debentures will be subordinate
and junior in right of payment to all Senior Debt to the extent provided in the
Indenture. Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding-up, reorganization, assignment for the benefit
of creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Corporation, the holders of Senior Debt will first
be entitled to receive payment in full of principal of (and premium, if any) and
interest, if any, on such Senior Debt before the holders of Subordinated
Debentures, or the Property Trustee on behalf of such holders, will be entitled
to receive or retain any payment in respect of the principal of (and premium, if
any) or interest, if any, on the Subordinated Debentures.
In the event of the acceleration of the maturity of the Subordinated
Debentures, the holders of all Senior Debt outstanding at the time of such
acceleration will first be entitled to receive payment in full of all amounts
due thereon (including any amounts due upon acceleration) before the holders of
Subordinated Debentures will be entitled to receive or retain any payment in
respect of the principal of (or premium, if any) or interest, if any, on the
Subordinated Debentures.
No payments on account of principal (or premium, if any) or interest, if
any, in respect of the Subordinated Debentures may be made if there shall have
occurred and be continuing a default in any payment with respect to Senior Debt
or an event of default with respect to any Senior Debt resulting in the
acceleration of the maturity thereof, or if any judicial proceeding shall be
pending with respect to any such default.
"Debt" means, with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; (vi) all Other
Financial Obligations (as hereinafter defined) of such Person; and (vii) every
obligation of the type referred to in clauses (i) through (vi) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable, directly or indirectly, as
obligor or otherwise.
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"Other Financial Obligations" means, with respect to any Person, all
obligations to make payment pursuant to the terms of financial instruments, such
as (i) securities contracts and foreign currency exchange contracts, (ii)
derivative instruments, such as swap agreements (including interest rate and
foreign exchange rate swap agreements), cap agreements, floor agreements, collar
agreements, interest rate agreements, foreign exchange rate agreements, options,
commodity futures contracts, commodity option contracts, and (iii) in the case
of both (i) and (ii) above, similar financial instruments.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Corporation whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of the Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Subordinated Debentures or to other Debt
which is PARI PASSU with, or subordinated to, the Subordinated Debentures;
provided, however, that Senior Debt shall not be deemed to include (i) any Debt
of the Corporation which when incurred and without respect to any election under
Section 1111(b) of the United States Bankruptcy Code of 1978, as amended, was
without recourse to the Corporation, (ii) any Debt of the Corporation to any of
its subsidiaries, (iii) Debt to any employee of the Corporation, and (iv) any
other debt securities issued pursuant to the Indenture. Senior Debt includes,
without limitation, Debt issued (i) under the indenture, dated as of April 1,
1983, and amended thereafter, between the Corporation and Chemical Bank, as
trustee, and (ii) except to the extent otherwise provided with respect to any
series of debt securities issued after the date hereof, under the indenture,
dated as of March 15, 1986, and amended thereafter, between the Corporation and
Harris Trust and Savings Bank, as trustee.
The Indenture places no limitation on the amount of additional Senior Debt
that may be incurred by the Corporation. The Corporation expects from time to
time to incur additional indebtedness constituting Senior Debt.
RESTRICTIONS ON TRANSFER
The Subordinated Debentures will be issued, and may be transferred only, in
minimum denominations of not less than $100,000 and multiples of $1,000 in
excess thereof. Any transfer, sale or other disposition of Subordinated
Debentures in a denomination of less than $100,000 shall be deemed to be void
and of no legal effect whatsoever. Any such transferee shall be deemed not to be
the holder of such Subordinated Debentures for any purpose, including but not
limited to the receipt of payments on such Subordinated Debentures, and such
transferee shall be deemed to have no interest whatsoever in such Subordinated
Debentures.
GOVERNING LAW
The Indenture and the Subordinated Debentures are governed by and construed
in accordance with the laws of the State of New York.
INFORMATION CONCERNING DEBENTURE TRUSTEE
The Debenture Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of 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.
CERTAIN COVENANTS RELATING TO ISSUER
The Corporation will covenant (i) to maintain directly or indirectly 100
percent ownership of the Common Securities of the Issuer, provided that certain
successors which are permitted pursuant to the Indenture may succeed to the
Corporation's ownership of the Common Securities, and (ii) to use its reasonable
efforts, consistent with the terms and provisions of the Trust Agreement, to
cause the Issuer to remain classified as a grantor trust and not as an
association taxable as a corporation for United States federal income tax
purposes.
DESCRIPTION OF GUARANTEE
The Old Guarantee was entered into by the Corporation concurrently with the
issuance by the Issuer 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 date hereof, the Old Guarantee will be exchanged by the Corporation
for the New Guarantee. The New Guarantee has been
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qualified under the Trust Indenture Act. This summary of certain provisions of
the Guarantee describes the material terms of the Guarantee but 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 Agreement, including the definitions
therein of certain terms, and the Trust Indenture Act. The Guarantee Trustee
will hold the Guarantee for the benefit of the holders of the Capital
Securities.
GENERAL
The Corporation has agreed (and under the New Guarantee will agree) to pay
in full on a subordinated basis, to the extent set forth herein, the Guarantee
Payments (as defined herein) to the holders of the Capital Securities, as and
when due, regardless of any defense, right of set-off or counterclaim that the
Issuer may have or assert other than the defense of payment. The following
payments with respect to the Capital Securities, to the extent not paid by or on
behalf of the Issuer (the "Guarantee Payments"), will be subject to the
Guarantee: (i) any accumulated and unpaid Distributions required to be paid on
the Capital Securities, to the extent that the Issuer has funds on hand
available therefor at the time; (ii) the Redemption Price with respect to any
Capital Securities called for redemption, to the extent that the Issuer has
funds on hand available therefor at the time; or (iii) upon a voluntary or
involuntary termination, winding-up or liquidation of the Issuer (unless the
Subordinated Debentures are distributed to holders of the Capital Securities),
the lesser of (a) the Liquidation Distribution, and (b) the amount of assets of
the Issuer remaining available for distribution to holders of Capital Securities
on liquidation of the Issuer. 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 Capital Securities or by causing the Issuer to
pay such amounts to such holders.
The Guarantee will be a guarantee on a subordinated basis of the Issuer's
obligations under the Capital Securities, but will apply only to the extent that
the Issuer has funds sufficient to make the payments, and is not a guarantee of
collection.
If the Corporation does not make interest payments on the Subordinated
Debentures held by the Issuer, the Issuer will not be able to pay Distributions
on the Capital Securities and will not have funds legally available therefor.
The Guarantee will rank subordinate and junior in right of payment to all Senior
Debt of the Corporation. See ";STATUS OF GUARANTEE". Because the Corporation is
a holding company, the right of the Corporation to participate in any
distribution of assets of any subsidiary upon such subsidiary's liquidation or
reorganization or otherwise, is subject to the prior claims of creditors of that
subsidiary, except to the extent the Corporation may itself be recognized as a
creditor of that subsidiary. Accordingly, the Corporation's obligations under
the Guarantee will be effectively subordinated and junior in right of payment to
all existing and future liabilities of the Corporation's subsidiaries, and
claimants should look only to the assets of the Corporation for payments
thereunder. See "The Corporation". The Guarantee does not limit the incurrence
or issuance of other secured or unsecured debt of the Corporation, including
Senior Debt, whether under the Indenture, any other indenture that the
Corporation may enter into in the future or otherwise.
The Corporation has, through the Guarantee, the Trust Agreement, the
Subordinated Debentures, the Indenture and the Expense Agreement, taken
together, fully and unconditionally guaranteed all of the Issuer's obligations
under the Capital Securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such a
guarantee. It is only the combined operation of these documents that has the
effect of providing a full and unconditional guarantee of the Issuer's
obligations with respect to the Capital Securities. See "Relationship Among
Capital Securities, Subordinated Debentures and Guarantee".
STATUS OF GUARANTEE
The Guarantee will constitute an unsecured obligation of the Corporation
and will rank subordinate and junior in right of payment to all Senior Debt of
the Corporation in the same manner as the Subordinated Debentures.
The Guarantee will rank PARI PASSU with any other similar guarantees issued
by the Corporation. The Guarantee will constitute a guarantee of payment and not
of collection (I.E., the guaranteed party may institute a legal proceeding
directly against the Corporation to enforce its rights under the Guarantee
without first instituting a legal proceeding against any other person or
entity). The Guarantee will be held for the benefit of the holders of the
Capital Securities. The Guarantee will not be discharged except by payment of
the Guarantee Payments in full, to the extent not paid by the Issuer, or upon
distribution to the holders of the Capital Securities of the Subordinated
Debentures. The Guarantee does not place a limitation on the amount of
additional Senior Debt that may be incurred by the Corporation. The Corporation
expects from time to time to incur additional indebtedness constituting Senior
Debt.
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AMENDMENT AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of the Capital Securities (in which case no vote will be
required), the Guarantee may not be amended without the prior approval of the
holders of not less than a majority of the aggregate Liquidation Amount of
outstanding Capital Securities. The manner of obtaining any such approval will
be as set forth under " -- Description of Capital Securities; VOTING RIGHTS;
AMENDMENT OF TRUST AGREEMENT". All guarantees and agreements contained in the
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Corporation and shall inure to the benefit of the holders
of the Capital Securities then outstanding.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of the
Corporation to perform any of its payment or other obligations thereunder. The
holders of not less than a majority in aggregate Liquidation Amount of the
Capital Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee.
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 Issuer, the Guarantee
Trustee or any other person or entity.
The Corporation, as guarantor, is required to file annually with the
Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
Guarantee.
INFORMATION CONCERNING GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of
an event of default under the Guarantee, undertakes to perform only such duties
as are specifically set forth in the Guarantee and, after an event of default
under the Guarantee, must exercise the same degree of care and skill as a
prudent person would exercise or use in the conduct of his or her own affairs.
Subject to this provision, the Guarantee Trustee is under no obligation to
exercise any of the powers vested in it by the Guarantee at the request of any
holder of the Capital Securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby.
TERMINATION OF GUARANTEE
The Guarantee will terminate and be of no further force and effect upon
full payment of the applicable Redemption Price of the Capital Securities, upon
full payment of the amounts payable upon liquidation of the Issuer or upon
distribution of Subordinated Debentures to the holders of the 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 Capital Securities must
restore payment of any sums paid under the Capital Securities or the Guarantee.
GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the laws
of the State of New York.
EXPENSE AGREEMENT
Pursuant to the Expense Agreement, the Corporation, as holder of the Common
Securities, has unconditionally guaranteed to each person or entity to whom the
Issuer becomes indebted or liable, the full payment of any costs, expenses or
liabilities of the Issuer, other than obligations of the Issuer to pay to the
holders of Capital Securities or other similar interests in the Issuer of the
amounts due such holders pursuant to the terms of the Capital Securities or such
other similar interests, as the case may be.
DESCRIPTION OF OLD SECURITIES
The terms of the Old Securities are identical in all material respect 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 provide for any
increase in the Distribution rate thereon; and (iii) the New Subordinated
Debentures will not provide for any increase in the interest rate thereon. The
Old Securities provide that, in the event that the Exchange Offer is not
consummated on or prior to , 1997, or, in certain limited
circumstances, in the event a shelf registration statement (the "Shelf
Registration Statement") with respect to the
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resale of the Old Capital Securities is not declared effective on or prior to
July 5, 1997, then interest will accrue (in addition to the interest rate on the
Subordinated Debentures) at the rate of 0.25% per annum on the principal amount
of the Subordinated Debentures, and Distributions will accrue (in addition to
the stated Distribution rate on the Capital Securities) at the rate of 0.25% per
annum on the Liquidation Amount of the Capital Securities, for the period from
the occurrence of such event until such time as the 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 Failure to
Exchange Old Capital Securities" and "Description of New Securities".
RELATIONSHIP AMONG CAPITAL SECURITIES,
SUBORDINATED DEBENTURES AND GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Capital Securities
(to the extent the Issuer has funds available for the payment of such
Distributions) are guaranteed by the Corporation as and to the extent set forth
under "Description of New Securities -- Description of Guarantee". Taken
together, the Corporation's obligations under the Subordinated Debentures, the
Indenture, the Trust Agreement, the Expense Agreement and the Guarantee provide,
in the aggregate, a full and unconditional guarantee of payment of Distributions
and other amounts due on the 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 and unconditional guarantee of the
Issuer's obligations under the Capital Securities. If and to the extent that the
Corporation does not make payments on the Subordinated Debentures, the Issuer
will not pay Distributions or other amounts due on the Capital Securities. The
Guarantee does not cover payment of Distributions when the Issuer does not have
sufficient funds to pay such Distributions. In such event, the remedy of a
holder of Capital Securities is to institute a legal proceeding directly against
the Corporation for enforcement of payment of such Distributions to such holder.
The obligations of the Corporation under the Guarantee are subordinate and
junior in right of payment to all Senior Debt of the Corporation.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on the
Subordinated Debentures, such payments will be sufficient to cover Distributions
and other payments due on the Capital Securities, primarily because (i) the
aggregate principal amount of the Subordinated Debentures will be equal to the
sum of the aggregate Liquidation Amount of the Capital Securities and Common
Securities; (ii) the interest rate and interest and other payment dates on the
Subordinated Debentures will match the Distribution rate and Distribution and
other payment dates for the Capital Securities; (iii) the Corporation shall pay
for all and any costs, expenses and liabilities of the Issuer, except the
Issuer's obligations to holders of the Capital Securities under such Capital
Securities; and (iv) the Trust Agreement further provides that the Issuer will
not engage in any activity that is not consistent with the limited purposes of
the Issuer.
Notwithstanding anything to the contrary in the Indenture, the Corporation
has the right to set-off any payment it is otherwise required to make thereunder
with and to the extent the Corporation has theretofore made, or is concurrently
on the date of such payment making, a payment under the Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF CAPITAL SECURITIES
A holder of any Capital Security may institute a legal proceeding directly
against the Corporation to enforce its rights under the Guarantee without first
instituting a legal proceeding against the Guarantee Trustee, the Issuer or any
other person or entity.
A default or event of default under any Senior Debt of the Corporation
would not constitute a Debenture Event of Default (and, therefore, would not
constitue an Event of Default under the Trust Agreement). However, in the event
of payment defaults under, or acceleration of, Senior Debt of the Corporation,
the subordination provisions of the Indenture provide that no payments may be
made in respect of the Subordinated Debentures until such Senior Debt has been
paid in full or any payment default thereunder has been cured or waived. Failure
to make required payments on the Subordinated Debentures would constitute a
Debenture Event of Default (and, therefore, an Event of Default under the Trust
Agreement).
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LIMITED PURPOSE OF ISSUER
The Capital Securities evidence preferred undivided beneficial interests in
the assets of the Issuer, and the Issuer exists for the sole purpose of issuing
its Capital Securities and Common Securities and investing the proceeds thereof
in the Subordinated Debentures. A principal difference between the rights of a
holder of Capital Securities and a holder of a Subordinated Debentures is that a
holder of Subordinated Debentures is entitled to receive from the Corporation
the principal amount of, and interest accrued on, the Subordinated Debentures
held, while a holder of Capital Securities is entitled to receive Distributions
from the Issuer (or from the Corporation under the Guarantee) if and to the
extent the Issuer has funds available for the payment of such Distributions.
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary termination, winding-up or liquidation of
the Issuer involving the liquidation of the Subordinated Debentures, after
satisfaction of liabilities to creditors of the Issuer in accordance with
applicable law and the Expense Agreement, the holders of the Capital Securities
will be entitled to receive, out of assets held by Issuer, the Liquidation
Distribution in cash. See "Description of New Securities -- Description of
Capital Securities; LIQUIDATION DISTRIBUTION UPON TERMINATION". Upon any
voluntary or involuntary liquidation or bankruptcy of the Corporation, the
Property Trustee, as holder of the Subordinated Debentures, would be a
subordinated creditor of the Corporation, subordinated in right of payment to
all Senior Debt of the Corporation as set forth in the Indenture, but entitled
to receive payment in full of principal and interest, before any stockholders of
the Corporation receive payments or distributions. Since the Corporation is the
guarantor under the Guarantee and has agreed to pay for all costs, expenses and
liabilities of the Issuer (other than the Issuer's obligations to the holders of
Capital Securities), the positions of a holder of Capital Securities and a
holder of such Subordinated Debentures relative to other creditors and to
stockholders of the Corporation in the event of liquidation or bankruptcy of the
Corporation are expected to be substantially the same.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the principal United States federal income
tax consequences of the purchase, ownership and disposition of Capital
Securities. This summary only addresses the tax consequences to a person that
acquires Capital Securities on their original issue at their original offering
price and that is (i) an individual citizen or resident of the United States,
(ii) a corporation or partnership organized in or under the laws of the United
States or any state thereof or Washington, D.C., or (iii) an estate or trust the
income of which is subject to United States federal income tax regardless of
source (a "United States Person"). This summary does not address all tax
consequences that may be applicable to a United States Person that is a
beneficial owner of Capital Securities, nor does it address the tax consequences
to (i) persons that are not United States Persons, (ii) persons that may be
subject to special treatment under United States federal income tax law, such as
banks, insurance companies, thrift institutions, regulated investment companies,
real estate investment trusts, tax-exempt organizations and dealers in
securities or currencies, (iii) persons that will hold Capital Securities as
part of a position in a "straddle" or as part of a "hedging", "conversion" or
other integrated investment transaction for federal income tax purposes, (iv)
persons whose functional currency is not the United States dollar, or (v)
persons that do not hold Capital Securities as capital assets.
The statements of law or legal conclusion set forth in this summary
constitute the opinion of Sullivan & Cromwell, special tax counsel to the
Corporation and the Issuer. This summary is based upon the Code, Treasury
Regulations, Internal Revenue Service rulings and pronouncements and judicial
decisions now in effect, all of which are subject to change at any time. Such
changes may be applied retroactively in a manner that could cause the tax
consequences to vary substantially from the consequences described below,
possibly adversely affecting a beneficial owner of Capital Securities. In
particular, legislation has been proposed that could adversely affect the
Corporation's ability to deduct interest on the Subordinated Debentures, which
may in turn permit the Corporation to cause a redemption of the Capital
Securities. See " -- Possible Tax Law Changes". The authorities on which this
summary is based are subject to various interpretations, and it is therefore
possible that the federal income tax treatment of the purchase, ownership and
disposition of Capital Securities may differ from the treatment described below.
PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS IN
LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE FEDERAL TAX CONSEQUENCES
OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF CAPITAL SECURITIES, AS WELL AS THE
EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
CLASSIFICATION OF ISSUER
In connection with the issuance of the Old Capital Securities, Sullivan &
Cromwell have rendered their opinion to the effect that, under then current law
and assuming compliance with the terms of the Trust Agreement and certain other
factual matters, the Issuer will not be classified as an association taxable as
a corporation for United States federal income tax purposes. As a result, each
beneficial owner of Capital Securities (a "Securityholder") will be required to
include in its gross income its PRO RATA share of the interest income, including
premium or original issue discount, paid or accrued with respect to the
Subordinated Debentures whether or not cash is actually distributed to such
Securityholder. See -- "Interest Income and Original Issue Discount".
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under recently issued Treasury Regulations applicable to debt instruments
issued on or after August 13, 1996 (the "Regulations"), a contingency that
stated interest will not be timely paid that is "remote" because of the terms of
the relevant debt instrument will be ignored in determining whether a debt
instrument is issued with original issue discount ("OID"). As a result of the
terms and conditions of the Subordinated Debentures that prohibit certain
payments with respect to the Corporation's capital stock and indebtedness if the
Corporation elects to extend interest payment periods, the Corporation believes
that the likelihood of its exercising its option to defer payments is remote.
Based on the foregoing, the Corporation believes that the Subordinated
Debentures will not be considered to be issued with OID at the time of their
original issuance, and accordingly, a Securityholder should include in gross
income such holder's allocable share of interest on the Subordinated Debentures.
Under the Regulations, if the Corporation exercised its option to defer any
payment of interest, the Subordinated Debentures would at that time be treated
as issued with OID, and all stated interest on the Subordinated Debentures would
thereafter be treated as OID as long as the Subordinated Debentures remained
outstanding. In such event, all of a Securityholder's taxable interest income
with respect to the Subordinated Debentures would be accounted for as OID on an
economic accrual
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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 Securityholder would be required to include in gross income OID
even though the Corporation would not make any actual cash payments during an
Extension Period.
The Regulations have not been addressed in any rulings or other
interpretations by the Internal Revenue Service and it is possible that the
Internal Revenue Service could take a position contrary to the interpretation
herein.
Because income on the Capital Securities will constitute interest or OID,
corporate Securityholders will not be entitled to a dividends-received deduction
with respect to any income recognized with respect to the Capital Securities.
DISTRIBUTION OF SUBORDINATED DEBENTURES TO HOLDERS OF CAPITAL SECURITIES
Under current law, a distribution by the Issuer of the Subordinated
Debentures as described herein under "Description of New
Securities -- Description of Capital Securities; LIQUIDATION OF ISSUER AND
DISTRIBUTION OF SUBORDINATED DEBENTURES TO HOLDERS" will be non-taxable and will
result in the Securityholder receiving directly his PRO RATA share of the
Subordinated Debentures previously held indirectly through the Issuer, with a
holding period and aggregate tax basis equal to the holding period and aggregate
tax basis such Securityholder had in its Capital Securities before such
distribution. If, however, the liquidation of the Issuer were to occur because
the Issuer is subject to United States federal income tax with respect to income
accrued or received on the Subordinated Debentures, the distribution of
Subordinated Debentures to Securityholders by the Issuer would be a taxable
event to the Issuer and each Securityholder, and each Securityholder would
recognize gain or loss as if the Securityholder had exchanged its Capital
Securities for the Subordinated Debentures it received upon the liquidation of
the Issuer. A Securityholder will accrue interest in respect of Subordinated
Debentures received from the Issuer in the manner described above under
" -- Interest Income and Original Issue Discount".
SALES OR REDEMPTION OF CAPITAL SECURITIES
A Securityholder that sells (including a redemption for cash) 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. Assuming that the Corporation does not exercise its
option to defer payment of interest on the Subordinated Debentures, and the
Subordinated Debentures are not considered issued with OID, a Securityholder's
adjusted tax basis in the Capital Securities generally will be its initial
purchase price. If the Subordinated Debentures are deemed to be issued with OID
as a result of the Corporation's deferral of any interest payment, a
Securityholder's adjusted tax basis in the Capital Securities generally will be
its initial purchase price, increased by OID previously includible in such
holder's gross income to the date of disposition and decreased by distributions
or other payments received on the Capital Securities since and including the
date of the first Extension Period. Such gain or loss generally will be a
capital gain or loss (except to the extent any amount realized is treated as a
payment of accrued interest with respect to such Securityholder's PRO RATA share
of the Subordinated Debentures required to be included in income) and generally
will be a long-term capital gain or loss if the Capital Securities have been
held for more than one year.
Should the Corporation exercise its option to defer any payment of interest
on the Subordinated Debentures, 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 Subordinated Debentures. In the event of such a
deferral, a Securityholder who disposes of its Capital Securities between record
dates for payments of distributions thereon will be required to include in
income as ordinary income accrued but unpaid interest on the Subordinated
Debentures to the date of disposition and to add such amount to its adjusted tax
basis in its PRO RATA share of the underlying Subordinated Debentures deemed
disposed of. To the extent the selling price is less than the Securityholder's
adjusted tax basis, such 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.
Although the matter is not free from doubt, an exchange of Old Capital
Securities for New Capital Securities should not be taxable to Securityholders.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
The amount of interest income paid and OID accrued on the Capital
Securities held of record by United States Persons (other than corporations and
other exempt Securityholders) will be reported to the Internal Revenue Service.
"Backup" withholding at a rate of 31 percent will apply to payments of interest
to non-exempt United States Persons unless the Securityholder furnishes its
taxpayer identification number in the manner prescribed in applicable Treasury
Regulations, certifies that such number is correct, certifies as to no loss of
exemption from backup withholding and meets certain other conditions.
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Payment of the proceeds from the disposition of Capital Securities to or
through the United States office of a broker is subject to information reporting
and backup withholding unless the holder or beneficial owner establishes an
exemption from information reporting and backup withholding.
Any amounts withheld from a Securityholder under the backup withholding
rules will be allowed as a refund or a credit against such Securityholder's
United States federal income tax liability, provided the required information is
furnished to the Internal Revenue Service.
It is anticipated that income on the Capital Securities will be reported to
holders on Form 1099 and mailed to holders of the Capital Securities by January
31 following each calendar year.
POSSIBLE TAX LAW CHANGES
As discussed above, the Revenue Reconciliation Bill would, among other
things, generally have denied interest deductions for interest on an instrument
issued by a corporation that has a maximum weighted average maturity of more
than 40 years. The Revenue Reconciliation Bill also would generally have denied
interest deductions for interest on an instrument issued by a corporation that
has a maximum term of more than 20 years and that is not shown as indebtedness
on the separate balance sheet of the issuer or, where the instrument is issued
to a related party (other than a corporation), where the holder or some other
related party issues a related instrument that is not shown as indebtedness on
the issuer's consolidated balance sheet. For purposes of determining the
weighted average maturity or the term of an instrument, any right to extend
would be treated as exercised. The above-described provisions of the Bill were
proposed to be effective generally for instruments issued on or after December
7, 1995. If either provision were to have applied to the Subordinated
Debentures, the Corporation would have been unable to deduct interest on the
Subordinated Debentures. However, on March 29, 1996, the Chairmen of the Senate
Finance and House Ways and Means Committees issued a joint statement to the
effect that it was their intention that the effective date of the President's
legislative proposals, presumably including the Revenue Reconciliation Bill, if
adopted, would be no earlier than the date of appropriate Congressional action.
Under current law, the Corporation will be able to deduct interest on the
Subordinated Debentures. Although the 104th Congress adjourned without enacting
the above-described provisions of the Revenue Reconciliation Bill, there can be
no assurance that current or future legislative proposals or final legislation
will not adversely affect the ability of the Corporation to deduct interest on
the Subordinated Debentures. Accordingly, there can be no assurance that a Tax
Event will not occur. See "Description of Capital Securities; Redemption;
SPECIAL EVENT REDEMPTION" and "; DISTRIBUTION OF SUBORDINATED DEBENTURES TO
HOLDERS OF CAPITAL SECURITIES".
CERTAIN ERISA CONSIDERATIONS
Each fiduciary of a Plan subject to ERISA, should consider the fiduciary
standards of ERISA in the context of the Plan's particular circumstances before
authorizing an investment in the Capital Securities. Accordingly, among other
factors, the fiduciary should consider whether the investment would satisfy the
prudence and diversification requirements of ERISA and would be consistent with
the documents and instruments governing the Plan.
Section 408 of ERISA and Section 4975 of the Code prohibit Plans, as well
as individual retirement accounts and Keogh plans subject to Section 4975 of the
Code (also "Plans"), from engaging in certain transactions involving "plan
assets" with persons who are "parties in interest" under ERISA or "disqualified
persons" under the Code ("Parties in Interest") with respect to such Plan. A
violation of these "prohibited transaction" rules may result in an excise tax or
other liabilities under ERISA and/or Section 4975 of the Code for such persons,
unless exemptive relief is available under an applicable statutory or
administrative exemption. Employee benefit plans that are governmental plans (as
defined in Section 3(32) of ERISA), certain church plans (as defined in Section
3(33) of ERISA) and foreign plans (as described in Section 4(b)(6) of ERISA) are
not subject to the requirements of ERISA or Section 4975 of the Code.
Under a regulation (the "Plan Assets Regulation") issued by the U.S.
Department of Labor (the "DOL"), the assets of the Issuer would be deemed to be
"plan assets" of a Plan for purposes of ERISA and Section 4975 of the Code if
"plan assets" of the Plan were used to acquire an equity interest in the Issuer
and no exception were applicable under the Plan Assets Regulation. An "equity
interest" is defined under the Plan Assets Regulation as any interest in an
entity other than an instrument which is treated as indebtedness under
applicable local law and which has no substantial equity features and
specifically includes a beneficial interest in a trust.
Pursuant to an exception contained in the Plan Assets Regulation, the
assets of the Issuer would not be deemed to be "plan assets" of investing Plans
if, immediately after the most recent acquisition of any equity interest in the
Issuer, less than 25 percent of the value of each class of equity interests in
the Issuer were held by Plans, other employee benefit plans not
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subject to ERISA or Section 4975 of the Code (such as governmental, church and
foreign plans), and entities holding assets deemed to be "plan assets" of any
Plan (collectively, "Benefit Plan Investors"). No assurance can be given that
the value of the Capital Securities held by Benefit Plan Investors will be less
than 25 percent of the total value of such Capital Securities, and no monitoring
or other measures will be taken with respect to the satisfaction of the
conditions to this exception. All of the Common Securities were purchased and
held by the Corporation.
Certain transactions involving the Issuer could be deemed to constitute
direct or indirect prohibited transactions under ERISA and Section 4975 of the
Code with respect to a Plan if the Capital Securities were acquired with "plan
assets" of Plan and assets of the Issuer were deemed to be "plan assets" of
Plans investing in the Issuer. For example, if the Corporation is a Party in
Interest with respect to an investing Plan (either directly or by reason of its
ownership of a bank or other subsidiaries), extensions of credit between the
Corporation and the Issuer (as represented by the Subordinated Debentures and
the Guarantee) would likely be prohibited by Section 406(a)(1)(B) of ERISA and
Section 4975(c)(1)(B) of the Code, unless exemptive relief were available under
an applicable administrative exemption (see below).
The DOL has issued five PTCEs that may provide exemptive relief for direct
or indirect prohibited transactions resulting from the purchase or holding of
the Capital Securities, assuming that assets of the Issuer were deemed to be
"plan assets" of Plans investing in the Issuer (see above). Those class
exemptions are PTCE 96-23 (for certain transactions determined by in-house asset
management), PTCE 95-60 (for certain transactions involving insurance company
general accounts), PTCE 91-38 (for certain transactions involving bank
collective investment funds), PTCE 90-1 (for certain transactions involving
insurance company separate accounts), and PTCE 84-14 (for certain transactions
determined by independent qualified asset managers).
Because the Capital Securities may be deemed to be equity interests in the
Issuer for purposes of applying ERISA and Section 4975 of the Code, the Capital
Securities may not be purchased or held by any Plan, any Plan Asset Entity or
any person investing "plan assets" of any Plan, unless such purchaser or holder
is eligible for the exemptive relief available under PTCE 96-23, 95-60, 91-38,
90-1 or 84-14. Any purchaser or holder of the Capital Securities or any interest
therein will be deemed to have represented by its purchase and holding thereof
that it either (a) is not a Plan or a Plan Asset Entity and is not purchasing
such securities on behalf of or with "plan assets" of any Plan or (b) is
eligible for the exemptive relief available under PTCE 96-23, 95-60, 91-38, 90-1
or 84-14 with respect to such purchase or holding.
Due to the complexity of these rules and the penalties that may be imposed
upon persons involved in non-exempt prohibited transactions, it is particularly
important that fiduciaries or other persons investing in the Capital Securities
on behalf of or with "plan assets" of any Plan consult with their counsel
regarding the potential consequences if the assets of the Issuer were deemed to
be "plan assets" and the availability of exemptive relief under PTCE 96-23,
95-60, 91-38, 90-1 or 84-14.
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 Issuer has 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 180 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. See "The Exchange Offer -- Resales of New Capital Securities".
The Issuer will not receive any 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
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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.
This Prospectus may be used by First Union Capital Markets Corp., an
affiliate of the Corporation, in connection with offers and sales related to
market-making transactions in New Securities effected from time to time after
the commencement of the offering to which this Prospectus relates. First Union
Capital Markets Corp. may act as principal or agent in such transactions,
including as agent for the counterparty when acting as principal or as agent for
both counterparties, and may receive compensation in the form of discounts and
commissions, including from both counterparties when it acts as agent for both.
Such sales will be made at prevailing market prices at the time of sale, at
prices related thereto or at negotiated prices.
The Corporation has been advised by First Union Capital Markets Corp. that,
subject to applicable laws and regulations, First Union Capital Markets Corp.
may make a market in New Securities. However, they are not obligated to do so
and any market-making may be discounted at any time without notice. In addition,
such market-making activity is subject to the limits imposed by the Securities
Act, the Exchange Act and federal banking laws and regulations. There can be no
assurance that an active trading market will be sustained.
The Corporation may agree to indemnify First Union Capital Markets Corp.
with respect to certain liabilities in connection with this Prospectus,
including liabilities under the Securities Act.
VALIDITY OF NEW CAPITAL SECURITIES
Certain matters of Delaware law relating to the validity of the New Capital
Securities, the enforceability of the Trust Agreement and the creation of the
Issuer will be passed upon by Richards, Layton & Finger, special Delaware
counsel to the Corporation and the Issuer. The validity of the New Subordinated
Debentures and New Guarantee will be passed upon for the Corporation by Sullivan
& Cromwell, New York, New York. Sullivan & Cromwell will rely upon the opinion
of Marion A. Cowell, Jr., Executive Vice President, Secretary and General
Counsel of the Corporation, as to matters of North Carolina law. Mr. Cowell is a
stockholder of the Corporation and holds options to purchase additional shares
of the Corporation's Common Stock. Sullivan & Cromwell regularly perform legal
services for the Corporation and its subsidiaries. Members of Sullivan &
Cromwell performing these legal services own shares of capital stock of the
Corporation.
EXPERTS
The Corporation's consolidated balance sheets as of December 31, 1995 and
1994, and the related consolidated statements of income, changes in
stockholders' equity and cash flows for each of the years in the three-year
period ended December 31, 1995, included in the Corporation's 1995 Supplemental
Annual Report to Stockholders, which is incorporated by reference in the
Corporation's 1995 Annual Report on Form 10-K and incorporated by reference
herein, have been incorporated by reference herein in reliance upon the report
of KPMG Peat Marwick LLP, independent certified public accountants, incorporated
by reference herein, and upon the authority of said firm as experts in
accounting and auditing. The aforementioned report of KPMG Peat Marwick LLP
covering the Corporation's consolidated financial statements refers to a change
in the method of accounting for investments.
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PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 55-8-50 through 55-8-58 of the North Carolina Business Corporation
Act ("NCBCA") contain specific provisions relating to indemnification of
directors and officers of North Carolina corporations. In general, the statute
provides that (i) a corporation must indemnify a director or officer who is
wholly successful in defense of a proceeding to which he or she is a party
because of their status as such, unless limited by the articles of
incorporation, and (ii) a corporation may indemnify a director or officer if he
or she is not wholly successful in such defense, if it is determined as provided
in the statute that the director or officer meets a certain standard of conduct,
provided when a director or officer is liable to the corporation, the
corporation may not so indemnify. The statute also permits a director or officer
of a corporation who is a party to a proceeding to apply to the courts for
indemnification, unless the articles of incorporation provide otherwise, and the
court may order indemnification under certain circumstances set forth in the
statute. The statute further provides that a corporation may in its articles of
incorporation or bylaws or by contract or resolution provide indemnification in
addition to that provided by the statute, subject to certain conditions set
forth in the statute.
The Corporation's Bylaws provide for indemnification of the Corporation's
directors and executive officers by the Corporation against liabilities arising
out of their status as such, excluding any liability relating to activities
which were at the time taken, known or believed by such person to be clearly in
conflict with the best interests of the Corporation. The Corporation's Articles
provide for the elimination of the personal liability of each director of the
Corporation to the fullest extent permitted by the provisions of the NCBCA, as
the same may from time to time be in effect.
The Corporation maintains directors and officers liability insurance, which
provides coverage of up to $80,000,000, subject to certain deductible amounts.
In general, the policy insures (i) the Corporation's directors and officers
against loss by reason of any of their wrongful acts, and/or (ii) the
Corporation against loss arising from claims against the directors and officers
by reason of their wrongful acts, all subject to the terms and conditions
contained in the policy.
Under the Amended and Restated Trust Agreement, the Corporation has agreed
to indemnify each of the Issuer Trustees and Administrators, and to hold such
Issuer Trustees and Administrators harmless, against any loss, damage, claims,
liability or expense incurred without negligence or bad faith on their part,
arising out of or in connection with the acceptance of administration of such
Trust Agreement, including the costs and expenses of defense against any claim
or liability in connection with the exercise or performance of any of their
powers or duties under the Trust Agreement or the Amended and Restated Trust
Agreement each of which is filed as an exhibit to this Registration Statement.
Insofar as indemnification for liabilities arising under the Section Act of
1933 may be permitted to directors, officers and controlling persons of each
Registrant pursuant to the provisions described under Item 15 above, or
otherwise (other than insurance), each Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than insurance or the payment by each Registrant of expenses incurred or paid by
a director, officer or controlling person of each Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, each
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
ITEM 21. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
<S> <C>
4(a) Indenture, dated as of November 27, 1996, between the Corporation and Wilmington Trust Company, as
Debenture Trustee (Incorporated by reference to Exhibit 4(a) to the Corporation's Registration Statement
No. 333-19039)
4(b) Certificate of Trust of First Union Institutional Capital II
4(c) Amended and Restated Trust Agreement of First Union Institutional Capital II (including the related Form
of Expense Agreement)
4(d) Form of Capital Security Certificate for First Union Institutional Capital II (included in Exhibit 4(c))
4(e) Form of Guarantee Agreement
4(f) Registration Rights Agreement, dated as of January 6, 1997, among the Corporation, the Issuer and Morgan
Stanley & Co. Incorporated
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
<S> <C>
4(g) All instruments defining the rights of holders of long-term debt of the Corporation and its subsidiaries
(Not filed pursuant to clause 4 (iii) of Item 601(b) of Regulation S-K; to be furnished upon request of
the Commission)
5(a) Opinion of Marion A. Cowell, Jr., Esq., as to validity of the New Subordinated Debentures and the New
Guarantee to be issued by the Corporation
5(b) Opinion of Richards, Layton & Finger as to validity of the New Capital Securities
5(c) Opinion of Sullivan & Cromwell as to validity of the New Subordinated Debentures and the New Guarantee to
be issued by the Corporation
8 Opinion of Sullivan & Cromwell as to certain federal income tax matters
12(a) Computations of Consolidated Ratios of Earnings to Fixed Charges (Incorporated by reference to Exhibit
(12)(a) to the Corporation's 1996 Third Quarter Report on Form 10-Q
12(b) Computations of Consolidated Ratios of Earnings to Fixed Charges and Preferred Stock Dividends
(Incorporated by reference to Exhibit (12)(b) to the Corporation's 1996 Third Quarter Report on
Form 10-Q
23(a) Consent of KPMG Peat Marwick LLP
23(b) Consent of Marion A. Cowell, Jr., Esq. (Included in Exhibit 5(a))
23(c) Consent of Richards, Layton & Finger (Included in Exhibit 5(b))
23(d) Consent of Sullivan & Cromwell (Included in Exhibit 5(c))
23(e) Consent of Sullivan & Cromwell (Included in Exhibit 8)
24 Powers of Attorney
25(a) Form T-1 Statement of Eligibility of Wilmington Trust Company to act as trustee under the Indenture
25(b) Form T-1 Statement of Eligibility of Wilmington Trust Company to act as trustee under the Amended and
Restated Trust Agreement
25(c) Form T-1 Statement of Eligibility of Wilmington Trust Company under the Guarantee for the benefit of the
holders of Capital Securities
27 The Corporation's Financial Data Schedule (Incorporated by reference to Exhibit (27) to the Corporation's
1996 Third Quarter Report on Form 10-Q
99(a) Form of Letter of Transmittal and instructions thereto
99(b) Form of Notice of Guaranteed Delivery
</TABLE>
ITEM 22. UNDERTAKINGS.
Each of the undersigned Registrants hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of a Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
in this Registration Statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Each of the undersigned Registrants hereby also undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereto) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
effective registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in this Registration Statement;
II-2
<PAGE>
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by a Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(2) that, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of a
registrant pursuant to the foregoing provisions, or otherwise each of the
undersigned registrants has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by a
registrant of expenses incurred by a director, officer or controlling person of
a registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, each of the undersigned registrants will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
Each of the undersigned registrants hereby undertakes to respond to
requests for information that is incorporated by reference into the prospectus
pursuant to Items 4, 10(b), 11 or 13 of this Form within one business day of
receipt of such request, and to send the incorporated 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.
Each of the undersigned registrants hereby undertake to supply by means of
a post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
First Union Corporation and has duly caused this Registration Statement on Form
S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Charlotte, State of North Carolina, as of the 29th day of January,
1997.
FIRST UNION CORPORATION
By: MARION A. COWELL, JR.
MARION A. COWELL, JR.
EXECUTIVE VICE PRESIDENT,
GENERAL COUNSEL & SECRETARY
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement on Form S-4 has been signed below by the following
persons in the capacities indicated below and as of the date indicated above.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
<S> <C> <C>
*EDWARD E. CRUTCHFIELD Chairman and Chief Executive Officer and
EDWARD E. CRUTCHFIELD Director
*ROBERT T. ATWOOD Executive Vice President and Chief
ROBERT T. ATWOOD Financial Officer
*JAMES H. HATCH Senior Vice President and Corporate
JAMES H. HATCH Controller (Principal Accounting Officer)
*EDWARD E. BARR Director
EDWARD E. BARR
*G. ALEX BERNHARDT Director
G. ALEX BERNHARDT
Director
W. WALDO BRADLEY
*ROBERT J. BROWN Director
ROBERT J. BROWN
*ROBERT T. DAVIS Director
ROBERT T. DAVIS
Director
R. STUART DICKSON
Director
B. F. DOLAN
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
<S> <C> <C>
*RODDEY DOWD, SR. Director
RODDEY DOWD, SR.
Director
JOHN R. GEORGIUS
*ARTHUR M. GOLDBERG Director
ARTHUR M. GOLDBERG
*WILLIAM N. GOODWIN Director
WILLIAM N. GOODWIN
*BRENTON S. HALSEY Director
BRENTON S. HALSEY
*HOWARD H. HAWORTH Director
HOWARD H. HAWORTH
*FRANK M. HENRY Director
FRANK M. HENRY
*LEONARD G. HERRING Director
LEONARD G. HERRING
*JUAN RODRIGUEZ INCIARTE Director
JUAN RODRIGUEZ INCIARTE
*JACK A. LAUGHERY Director
JACK A. LAUGHERY
Director
MAX LENNON
Director
RADFORD D. LOVETT
*JOSEPH NEUBAUER Director
JOSEPH NEUBAUER
*HENRY D. PERRY, JR. Director
HENRY D. PERRY, JR.
*RANDOLPH N. REYNOLDS Director
RANDOLPH N. REYNOLDS
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
<S> <C> <C>
Director
RUTH G. SHAW
Director
CHARLES M. SHELTON, SR.
*LANTY L. SMITH Director
LANTY L. SMITH
*ANTHONY P. TERRACCIANO Director
ANTHONY P. TERRACCIANO
*DEWEY L. TROGDON Director
DEWEY L. TROGDON
*JOHN D. UIBLE Director
JOHN D. UIBLE
*B. J. WALKER Director
B. J. WALKER
* Marion A. Cowell, Jr., Attorney-in-Fact
MARION A. COWELL, JR.
MARION A. COWELL, JR.
</TABLE>
Date: January 29, 1997
II-6
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended,
First Union Institutional Capital II has duly caused this Registration Statement
on Form S-4 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Charlotte, State of North Carolina, as of the 29th
day of January, 1997.
FIRST UNION INSTITUTIONAL CAPITAL II
By: First Union Corporation, as
Depositor
By: KENNETH R. STANCLIFF
KENNETH R. STANCLIFF
SENIOR VICE PRESIDENT
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION LOCATION
<S> <C> <C>
4(a) Indenture, dated as of November 27, 1996, between the Corporation and Incorporated by reference to Exhibit
Wilmington Trust Company, as Debenture Issueree 4(a) to the Corporation's Registration
Statement No. 333-19039
4(b) Certificate of Trust of First Union Institutional Capital II Filed herewith
4(c) Amended and Restated Trust Agreement of First Union Institutional Capital Filed herewith
II (including the related Form of Expense Agreement)
4(d) Form of Capital Security Certificate for First Union Institutional Capital Filed herewith
II (included in Exhibit 4(c))
4(e) Form of Guarantee Agreement Filed herewith
4(f) Registration Rights Agreement, dated as of January 6, 1997, among the Filed herewith
Corporation, the Issuer and Morgan Stanley & Co. Incorporated
4(g) All instruments defining the rights of holders of long-term debt of the Not filed pursuant to clause 4(iii) of
Corporation and its subsidiaries Item 601(b) of Regulation S-K; to be
furnished upon request of the
Commission
5(a) Opinion of Marion A. Cowell, Jr., Esq., as to validity of the New Filed herewith
Subordinated Debentures and the New Guarantee to be issued by the
Corporation
5(b) Opinion of Richards, Layton & Finger as to validity of the New Capital Filed herewith
Securities
5(c) Opinion of Sullivan & Cromwell as to validity of the New Subordinated Filed herewith
Debentures and the New Guarantee to be issued by the Corporation
8 Opinion of Sullivan & Cromwell as to certain federal income tax matters Filed herewith
12(a) Computations of Consolidated Ratios of Earnings to Fixed Charges Incorporated by reference to Exhibit
(12)(a) to the Corporation's 1996 Third
Quarter Report on Form 10-Q
12(b) Computations of Consolidated Ratios of Earnings to Fixed Charges and Incorporated by reference to Exhibit
Preferred Stock Dividends (12)(b) to the Corporation's 1996 Third
Quarter Report on Form 10-Q
23(a) Consent of KPMG Peat Marwick LLP Filed herewith
23(b) Consent of Marion A. Cowell, Jr., Esq. (Included in Exhibit 5(a)) Filed herewith
23(c) Consent of Richards, Layton & Finger (Included in Exhibit 5(b)) Filed herewith
23(d) Consent of Sullivan & Cromwell (Included in Exhibit 5(c)) Filed herewith
23(e) Consent of Sullivan & Cromwell (Included in Exhibit 8) Filed herewith
24 Powers of Attorney Filed herewith
25(a) Form T-1 Statement of Eligibility of Wilmington Trust Company to act as Filed herewith
trustee under the Indenture
25(b) Form T-1 Statement of Eligibility of Wilmington Trust Company to act as Filed herewith
trustee under the Amended and Restated Trust Agreement
25(c) Form T-1 Statement of Eligibility of Wilmington Trust Company under the Filed herewith
Guarantee for the benefit of the holders of Capital Securities
27 The Corporation's Financial Data Schedule Incorporated by reference to Exhibit
(27) to the Corporation's 1996 Third
Quarter Report on Form 10-Q
</TABLE>
II-8
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION LOCATION
<S> <C> <C>
99(a) Form of Letter of Transmittal and instructions thereto Filed herewith
99(b) Form of Notice of Guaranteed Delivery Filed herewith
</TABLE>
II-9
<PAGE>
EXHIBIT 4 (B)
CERTIFICATE OF TRUST
OF
FIRST UNION INSTITUTIONAL CAPITAL II
This Certificate of Trust of First Union Institutional Capital II (the
"Trust"), dated as of December 27, 1996, is being duly executed and filed by the
undersigned, as trustee, to form a business trust under the Delaware Business
Trust Act (12 Del. C (section mark) 3801 et seq.)
1. NAME. The name of the business trust being formed hereby is First Union
Institutional Capital II.
2. DELAWARE TRUSTEE. The name and business address of the trustee of the
Trust, with a principal place of business in the State of Delaware, are
Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890-0001, Attention: Corporate Trust Administration.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective as of its
filing.
IN WITNESS WHEREOF, the undersigned, being the trustee of the Trust, has
executed this Certificate of Trust as of the date first above written.
WILMINGTON TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By: CHRIS L. KAISER
Name: Chris L. Kaiser
Title: Vice President
Exhibit 4(c)
AMENDED AND RESTATED TRUST AGREEMENT
among
FIRST UNION CORPORATION,
as Depositor,
WILMINGTON TRUST COMPANY,
as Property Trustee,
and
WILMINGTON TRUST COMPANY,
as Delaware Trustee
-----------------------------------------
FIRST UNION INSTITUTIONAL CAPITAL II
-----------------------------------------
Dated as of January 6, 1997
<PAGE>
FIRST UNION INSTITUTIONAL CAPITAL II
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Trust Agreement
Act Section Section
- --------------- ------------
310 (a)(1)...................................... 8.7
(a)(2)...................................... 8.7
(a)(3)...................................... 8.9
(a)(4)...................................... 2.7(a)(ii)
(b)......................................... 8.8
311 (a)......................................... 8.13
(b)......................................... 8.13
312 (a)......................................... 5.7
(b)......................................... 5.7
(c)......................................... 5.7
313 (a)......................................... 8.14(a)
(a)(4)...................................... 8.14(b)
(b)......................................... 8.14(b)
(c)......................................... 10.8
(d)......................................... 8.14(c)
314 (a)......................................... 8.15
(b)......................................... Not Applicable
(c)(1)...................................... 8.16
(c)(2)...................................... 8.16
(c)(3)...................................... Not Applicable
(d)......................................... Not Applicable
(e)......................................... 1.1, 8.16
315 (a)......................................... 8.1(a), 8.3(a)
(b)......................................... 8.2, 10.8
(c)......................................... 8.1(a)
(d)......................................... 8.1, 8.3
(e)......................................... Not Applicable
316 (a)......................................... Not Applicable
(a)(1)(A)................................... Not Applicable
(a)(1)(B)................................... Not Applicable
(a)(2)...................................... Not Applicable
(b)......................................... 5.14
(c)......................................... 6.7
317 (a)(1)...................................... Not Applicable
(a)(2)...................................... Not Applicable
(b)......................................... 5.9
318 (a)......................................... 10.10
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed
to be a part of the Trust Agreement.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS
<S> <C> <C>
SECTION 1.1. Interpretation. ....................................................................... 1
SECTION 1.2. Certain Definitions. .................................................................. 2
ARTICLE II
CONTINUATION OF THE TRUST
SECTION 2.1. Name. ................................................................................. 13
SECTION 2.2. Office of the Delaware Trustee; Principal Place of Business. .......................... 13
SECTION 2.3. Initial Contribution of Trust Property; Organizational Expenses. ...................... 13
SECTION 2.4. Issuance of the Capital Securities. ................................................... 13
SECTION 2.5. Issuance of the Common Securities; Subscription and Purchase of
Debentures. ......................................................................... 14
SECTION 2.6. Declaration of Trust. ................................................................. 14
SECTION 2.7. Authorization to Enter into Certain Transactions. ..................................... 14
SECTION 2.8. Assets of Trust. ...................................................................... 18
SECTION 2.9. Title to Trust Property. .............................................................. 18
ARTICLE III
PAYMENT ACCOUNT
SECTION 3.1. Payment Account. ...................................................................... 19
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 4.1. Distributions. ........................................................................ 19
SECTION 4.2. Redemption. ........................................................................... 20
SECTION 4.3. Subordination of Common Securities. ................................................... 22
SECTION 4.4. Payment Procedures. ................................................................... 23
i
<PAGE>
SECTION 4.5. Tax Returns and Reports. .............................................................. 23
SECTION 4.6. Payment of Taxes, Duties, Etc. of the Trust. .......................................... 23
SECTION 4.7. Payments under Indenture or Pursuant to Direct Actions................................. 24
ARTICLE V
TRUST SECURITIES CERTIFICATES
SECTION 5.1. Initial Ownership. .................................................................... 24
SECTION 5.2. The Trust Securities Certificates. .................................................... 24
SECTION 5.3. Execution and Delivery of Trust Securities Certificates. .............................. 25
SECTION 5.4. Registration of Transfer and Exchange of Capital Securities
Certificates......................................................................... 25
SECTION 5.5. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates..................... 29
SECTION 5.6. Persons Deemed Holders. ............................................................... 29
SECTION 5.7. Access to List of Holders' Names and Addresses. ....................................... 29
SECTION 5.8. Maintenance of Office or Agency. ...................................................... 30
SECTION 5.9. Appointment of Paying Agent. .......................................................... 30
SECTION 5.10. Ownership of Common Securities by Depositor. .......................................... 30
SECTION 5.11. Book-Entry Capital Securities; Common Securities Certificate........................... 31
SECTION 5.12. Notices to Clearing Agency. ........................................................... 32
SECTION 5.13. Definitive Capital Securities Certificates. ........................................... 32
SECTION 5.14. Rights of Holders. .................................................................... 33
ARTICLE VI
ACTS OF HOLDERS; MEETINGS; VOTING
SECTION 6.1. Limitations on Voting Rights. ......................................................... 35
SECTION 6.2. Notice of Meetings. ................................................................... 36
SECTION 6.3. Meetings of Holders of Capital Securities. ............................................ 36
SECTION 6.4. Voting Rights. ........................................................................ 36
SECTION 6.5. Proxies, Etc. ......................................................................... 37
SECTION 6.6. Holder Action by Written Consent. ..................................................... 37
SECTION 6.7. Record Date for Voting and Other Purposes. ............................................ 37
SECTION 6.8. Acts of Holders. ...................................................................... 37
SECTION 6.9. Inspection of Records. ................................................................ 38
ii
<PAGE>
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties of the Property Trustee and the
Delaware............................................................................. 39
SECTION 7.2. Representations and Warranties of Depositor. .......................................... 40
ARTICLE VIII
THE TRUSTEES; THE ADMINISTRATORS
SECTION 8.1. Certain Duties and Responsibilities. .................................................. 40
SECTION 8.2. Certain Notices. ...................................................................... 42
SECTION 8.3. Certain Rights of Property Trustee. ................................................... 42
SECTION 8.4. Not Responsible for Recitals or Issuance of Securities. ............................... 44
SECTION 8.5. May Hold Securities. .................................................................. 44
SECTION 8.6. Compensation; Indemnity; Fees. ........................................................ 44
SECTION 8.7. Corporate Property Trustee Required; Eligibility of Trustees and
Administrators....................................................................... 46
SECTION 8.8. Conflicting Interests. ................................................................ 46
SECTION 8.9. Co-Trustees and Separate Trustee. ..................................................... 46
SECTION 8.10. Resignation and Removal; Appointment of Successor. .................................... 48
SECTION 8.11. Acceptance of Appointment by Successor. ............................................... 49
SECTION 8.12. Merger, Conversion, Consolidation or Succession to Business. .......................... 50
SECTION 8.13. Preferential Collection of Claims Against Depositor or Trust. ......................... 50
SECTION 8.14. Reports by Property Trustee. .......................................................... 51
SECTION 8.15. Reports to the Property Trustee. ...................................................... 51
SECTION 8.16. Evidence of Compliance with Conditions Precedent. ..................................... 51
SECTION 8.17. Number of Trustees. ................................................................... 52
SECTION 8.18. Delegation of Power. .................................................................. 52
SECTION 8.19. Appointment of Administrators.......................................................... 52
ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
SECTION 9.1. Termination Upon Expiration Date. ..................................................... 53
SECTION 9.2. Early Termination. .................................................................... 53
iii
<PAGE>
SECTION 9.3. Termination. .......................................................................... 54
SECTION 9.4. Liquidation. .......................................................................... 54
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements of
the Trust............................................................................ 55
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Limitation of Rights of Holders. ...................................................... 57
SECTION 10.2. Amendment. ............................................................................ 57
SECTION 10.3. Separability........................................................................... 59
SECTION 10.4. Governing Law.......................................................................... 59
SECTION 10.5. Payments Due on Non-Business Day. ..................................................... 59
SECTION 10.6. Successors. ........................................................................... 59
SECTION 10.7. Headings. ............................................................................. 59
SECTION 10.8. Reports, Notices and Demands. ......................................................... 59
SECTION 10.9. Agreement Not to Petition. ............................................................ 60
SECTION 10.10. Application of Trust Indenture Act..................................................... 60
SECTION 10.11. Acceptance of Terms of Trust Agreement, Guarantee and Indenture. ...................... 60
</TABLE>
iv
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT, dated as of January 6, 1997,
among (i) FIRST UNION CORPORATION, a North Carolina corporation (including any
successors or assigns, the "Depositor"), (ii) WILMINGTON TRUST COMPANY, a
banking corporation organized under the laws of the State of Delaware, as
property trustee, (in each such capacity, the "Property Trustee" and, in its
separate corporate capacity and not in its capacity as Property Trustee, the
"Bank"), (iii) WILMINGTON TRUST COMPANY, a banking corporation organized under
the laws of the State of Delaware, as Delaware trustee (the "Delaware Trustee")
(the Property Trustee and the Delaware Trustee collectively, the "Trustees") and
(iv) the several HOLDERS, as hereinafter defined.
W I T N E S S E T H :
WHEREAS, the Depositor and Wilmington Trust Company have heretofore
duly declared and established a business trust pursuant to the Delaware Business
Trust Act by the entering into that certain Trust Agreement, dated as of
December 27, 1996 (the "Original Trust Agreement"), and by the execution and
filing by the Wilmington Trust Company with the Secretary of State of the State
of Delaware of the Certificate of Trust, filed on December 30, 1996, attached as
Exhibit A; and
WHEREAS, the Depositor and the Trustees desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (i) the issuance of the Common Securities by the Trust to
the Depositor, (ii) the issuance and sale of the Capital Securities by the Trust
pursuant to the Purchase Agreement, (iii) the acquisition by the Trust from the
Depositor of all of the right, title and interest in the Debentures and (iv) the
appointment of the Administrators;
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other parties
and for the benefit of the Holders, hereby amends and restates the Original
Trust Agreement in its entirety and agrees as follows:
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1. Interpretation.
For all purposes of this Trust Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
<PAGE>
(b) all other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Trust Agreement;
(d) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Trust Agreement as a whole and
not to any particular Article, Section or other subdivision; and
(e) unless the context otherwise requires, any reference to a
statute, rule or regulation refers to the same (including any successor
statute, rule or regulation thereto) as it may be amended from time to
time.
SECTION 1.2. Certain Definitions.
For all purposes of this Trust Agreement, the following terms shall
have the meanings assigned below:
"Act" has the meaning specified in Section 6.8.
"Additional Amount" means, with respect to Trust Securities of
a given Liquidation Amount and/or a given period, the amount of
Additional Interest paid by the Depositor on a Like Amount of
Debentures for such period.
"Additional Interest" has the meaning specified in Section 1.2
of the Indenture.
"Additional Sums" has the meaning specified in Section 10.6 of
the Indenture.
"Administrators" means each of Kenneth R. Stancliff and James
H. Hatch solely in such Person's capacity as Administrator of the Trust
and not in such Person's individual capacity, or such Administrator's
successor appointed as herein provided.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person; provided, however,
that the Trust shall not be deemed an Affiliate of the Depositor. For
the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the
foregoing.
"Bank" has the meaning specified in the preamble to this Trust
Agreement.
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"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having
jurisdiction in the premises judging such Person a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjudication or composition of or
in respect of such Person under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar
law, or appointing a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of such Person or of
any substantial part of its property or ordering the winding
up or liquidation of its affairs, and the continuance of any
such decree or order unstayed and in effect for a period of 60
consecutive days; or
(b) the institution by such Person of proceedings to
be adjudicated a bankrupt or insolvent, or the consent by it
to the institution of bankruptcy or insolvency proceedings
against it, or the filing by it of a petition or answer or
consent seeking reorganization or relief under any applicable
Federal or State bankruptcy, insolvency, reorganization or
other similar law, or the consent by it to the filing of any
such petition or to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or similar official) of such
Person or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or
the admission by it in writing of its inability to pay its
debts generally as they become due and its willingness to be
adjudicated a bankrupt, or the taking of corporate action by
such Person in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.9.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Depositor to have been
duly adopted by the Depositor's Board of Directors, or such committee
of the Board of Directors or officers of the Depositor to which
authority to act on behalf of the Board of Directors has been
delegated, and to be in full force and effect on the date of such
certification, and delivered to the Trustees.
"Book-Entry Capital Securities" means a beneficial interest in
a Global Capital Securities Certificate.
"Business Day" means a day other than (a) a Saturday or
Sunday, (b) a day on which banking institutions in The City of New York
are authorized or required by law or executive order to remain closed,
or (c) a day on which the Property Trustee's Corporate Trust Office or
the Corporate Trust Office of the Debenture Trustee is closed for
business.
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"Capital Security" means an undivided beneficial interest in
the assets of the Trust, having a Liquidation Amount of $1,000 and
having the rights provided therefor in this Trust Agreement, including
the right to receive Distributions and a Liquidation Distribution as
provided herein. The Capital Securities shall consist of the Original
Capital Securities and, if issued, New Capital Securities.
"Capital Securities Certificate" means a certificate
evidencing Capital Securities, substantially in the form attached as
Exhibit E.
"Cedel" means Cedel Bank, S.A. (or any successor securities
clearing agency).
"Certificate Depository Agreement" means the agreement among
the Trust, the Depositor and The Depository Trust Company, as the
initial Clearing Agency, dated as of the Closing Date, relating to the
Trust Securities Certificates, substantially in the form attached as
Exhibit B, as the same may be amended and supplemented from time to
time.
"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange
Act of 1934, as amended.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time
a Clearing Agency effects book-entry transfers and pledges of
securities deposited with the Clearing Agency.
"Closing Date" has the meaning specified in the Purchase
Agreement, which date is also the date of execution and delivery of
this Trust Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange
Act of 1934, as amended, or, if at any time after the execution of this
Trust Agreement such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Security" means a common undivided beneficial interest
in the assets of the Trust, having a Liquidation Amount of $1,000 and
having the rights provided therefor in this Trust Agreement, including
the right to receive Distributions and a Liquidation Distribution as
provided herein.
"Common Securities Certificate" means a certificate evidencing
Common Securities, substantially in the form attached as Exhibit C.
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"Corporate Trust Office" means (i) when used with respect to
the Property Trustee, the principal office of the Property Trustee
located in Wilmington, Delaware, and (ii) when used with respect to the
Debenture Trustee, the principal office of the Debenture Trustee
located in Wilmington, Delaware.
"Debenture Event of Default" means an "Event of Default" as
defined in the Indenture.
"Debenture Redemption Date" means, with respect to any
Debentures to be redeemed under the Indenture, the date fixed for
redemption under the Indenture.
"Debenture Trustee" means Wilmington Trust Company, a banking
corporation organized under the laws of the State of Delaware, and any
successor thereto.
"Debentures" means the aggregate principal amount of the
Depositor's 7.85% Institutional Junior Subordinated Debentures due
January 1, 2027, issued pursuant to the Indenture.
"Definitive Capital Securities Certificates" means either or
both (as the context requires) of (a) Capital Securities Certificates
issued as Book-Entry Capital Securities as provided in Section 5.11(a)
and (b) Capital Securities Certificates issued in certificated, fully
registered form as provided in Section 5.13.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of
the Delaware Code, 12 Del. C. (ss.) 3801, et seq., as it may be
amended from time to time.
"Delaware Trustee" means the Person identified as the
"Delaware Trustee" in the preamble to this Trust Agreement, solely in
its capacity as Delaware Trustee of the Trust and not in its individual
capacity, or its successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Depositor" has the meaning specified in the preamble to this
Trust Agreement.
"Distribution Date" has the meaning specified in Section
4.1(a).
"Distributions" means amounts payable in respect of Trust
Securities as provided in Section 4.1.
"DTC" means The Depository Trust Company, which will be the
initial Clearing Agency with respect to the Capital Securities.
"Early Termination Event" has the meaning specified in Section
9.2.
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"Euroclear" means the Euroclear Clearance System (or any
successor securities clearing agency).
"Event of Default" means any one of the following events
(whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) the occurrence of a Debenture Event of Default;
or
(b) default by the Property Trustee in the payment of
any Distribution when it becomes due and payable, and
continuation of such default for a period of 30 days; or
(c) default by the Property Trustee in the
payment of any Redemption Price of any Trust Security
when it becomes due and payable; or
(d) default in the performance, or breach, in any
material respect, of any covenant or warranty of the Trustees
in this Trust Agreement (other than a covenant or warranty a
default in the performance or breach of which is described in
clause (b) or (c) above) and continuation of such default or
breach for a period of 60 days after there has been given, by
registered or certified mail, to the defaulting Trustee or
Trustees by the Holders of at least 25% in aggregate
liquidation preference of the Outstanding Capital Securities a
written notice specifying such default or breach and requiring
it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(e) the occurrence of a Bankruptcy Event with respect
to the Property Trustee and a successor Property Trustee has
not been appointed within 90 days thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"Expense Agreement" means the Agreement as to Expenses and
Liabilities between the Depositor and the Trust, substantially in the
form attached as Exhibit D, as amended from time to time.
"Expiration Date" has the meaning specified in Section 9.1.
"Global Capital Securities Certificate" means a Capital
Securities Certificate that is registered in the Security Register in
the name of a Clearing Agency or a nominee thereof.
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"Global Regulation S Capital Securities Certificate" has the
meaning specified in Section 5.2.
"Global Rule 144A Capital Securities Certificate" has the
meaning specified in Section 5.2.
"Guarantee" means the Guarantee Agreement executed and
delivered by the Depositor and Wilmington Trust Company, as trustee,
contemporaneously with the execution and delivery of this Trust
Agreement, for the benefit of the holders of the Capital Securities, as
amended from time to time.
"Holder" means a Person in whose name a Trust Security or
Trust Securities is registered in the Securities Register; any such
Person shall be a beneficial owner within the meaning of the Delaware
Business Trust Act; provided, however, that for purposes of determining
whether the Holders of the requisite amount of Capital Securities have
voted on any matter provided for in this Trust Agreement, so long as
Definitive Capital Securities Certificates have not been issued, the
term "Holders" shall refer to the Owners.
"Indenture" means the Junior Subordinated Indenture, dated as
of November 27, 1996, between the Depositor and the Debenture Trustee,
as trustee, as amended or supplemented from time to time.
"Initial Purchaser" means Morgan Stanley & Co. Incorporated.
"Lien" means any lien, pledge, charge, encumbrance, mortgage,
deed of trust, adverse ownership interest, hypothecation, assignment,
security interest or preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to the
principal amount of Debentures to be contemporaneously redeemed in
accordance with the Indenture the proceeds of which will be used to pay
the Redemption Price of such Trust Securities, and (b) with respect to
a distribution of Debentures to Holders in connection with a
dissolution or liquidation of the Trust, Debentures having a principal
amount equal to the aggregate Liquidation Amount of the Trust
Securities of the Holder to whom such Debentures are distributed.
"Liquidation Amount" means the stated amount of $1,000 per
Trust Security.
"Liquidation Date" means the date on which Debentures are to
be distributed to Holders of Trust Securities in connection with a
termination and liquidation of the Trust pursuant to Section 9.4(a).
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"Liquidation Distribution" has the meaning specified in
Section 9.4(d).
"New Capital Securities" has the meaning specified in Section
2.4.
"1940 Act" means the Investment Company Act of 1940, as
amended.
"Original Capital Securities" has the meaning specified in
Section 2.4.
"Officers' Certificate" means a certificate signed by the
Chairman and Chief Executive Officer, President or a Vice President,
and by the Treasurer, an Associate Treasurer, an Assistant Treasurer,
the Controller, the Secretary or an Assistant Secretary, of the
Depositor, and delivered to the appropriate Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section
8.16 shall be the principal executive, financial or accounting officer
of the Depositor. Any Officers' Certificate delivered with respect to
compliance with a covenant or condition provided for in this Trust
Agreement shall include:
(a) a statement that each officer signing the
Officers' Certificate has read the covenant or condition
and the definitions relating thereto;
(b) a brief statement of the nature and
scope of the examination or investigation undertaken by
each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed
opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied
with.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Trust, the Property Trustee or the Depositor and
who shall be reasonably acceptable to the Property Trustee.
"Original Capital Securities" has the meaning specified in
Section 2.4.
"Original Trust Agreement" has the meaning specified in the
recitals to this Trust Agreement.
"Outstanding", when used with respect to Trust Securities,
means, as of the date of determination, all Trust Securities
theretofore executed and delivered under this Trust Agreement, except:
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(a) Trust Securities theretofore cancelled by the
Securities Registrar or delivered to the Securities
Registrar for cancellation;
(b) Trust Securities for the payment or redemption of
which money in the necessary amount theretofore has been
deposited with the Property Trustee or any Paying Agent for
the Holders of such Trust Securities; provided that, if such
Trust Securities are to be redeemed, notice of such redemption
has been duly given pursuant to this Trust Agreement; and
(c) Trust Securities which have been paid or in
exchange for or in lieu of which other Capital Securities have
been executed and delivered pursuant to Sections 5.4, 5.5,
5.11 and 5.13;
provided, however, that in determining whether the Holders of the
requisite aggregate Liquidation Amount of Outstanding Capital
Securities have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Capital Securities owned by the
Depositor, any Trustee or any Affiliate of the Depositor or any Trustee
shall be disregarded and deemed not to be Outstanding, except that (a)
in determining whether any Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent or
waiver, only Capital Securities that such Trustee knows to be so owned
shall be so disregarded and (b) the foregoing shall not apply at any
time when all the outstanding Capital Securities are owned by the
Depositor, one or more of the Trustees and/or any such Affiliate.
Capital Securities so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Administrators the pledgee's right so to act with
respect to such Capital Securities and that the pledgee is not the
Depositor or any Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of a
Book-Entry Capital Securities Certificate as reflected in the records
of the Clearing Agency or, if a Clearing Agency Participant is not the
Owner, then as reflected in the records of a Person maintaining an
account with such Clearing Agency (directly or indirectly, in
accordance with the rules of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent
appointed pursuant to Section 5.9 and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing
corporate trust account maintained by the Property Trustee with the
Bank in its trust department for the benefit of the Holders in which
all amounts paid in respect of the Debentures will be held and from
which the Property Trustee, through the Paying Agent, shall make
payments to the Holders in accordance with Sections 4.1 and 4.2.
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"Person" means any individual, corporation, partnership, joint
venture, trust, limited liability company or corporation,
unincorporated organization or government or any agency or political
subdivision thereof.
"Property Trustee" means the Person identified as the
"Property Trustee" in the preamble to this Trust Agreement, solely in
its capacity as Property Trustee of the Trust and not in its individual
capacity, or its successor in interest in such capacity, or any
successor property trustee appointed as herein provided.
"Purchase Agreement" means the Purchase Agreement, dated as of
December 27, 1996, among the Trust, the Depositor and the Initial
Purchaser.
"Redemption Date" means, with respect to any Trust Security to
be redeemed, the date fixed for redemption thereof; provided that each
Debenture Redemption Date and the stated maturity of the Debentures
shall be a Redemption Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any Trust Security,
the Liquidation Amount thereof, plus accumulated and unpaid
Distributions to the Redemption Date, plus the related amount of the
premium, if any, paid by the Depositor upon the concurrent redemption
of a Like Amount of Debentures, allocated pro rata (based on
Liquidation Amounts) among the Trust Securities.
"Registration Default" has the meaning specified in Section
2(c) of the Registration Rights Agreement.
"Registration Default Distributions" has the meaning specified
in Section 2(c) of the Registration Rights Agreement.
"Registration Default Interest" has the meaning specified in
Section 2(c) of the Registration Rights Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement dated the date hereof among the Depositor, the Trust and the
Initial Purchaser for the benefit of themselves and the Holders as the
same may be amended from time to time in accordance with the terms
thereof.
"Relevant Trustee" has the meaning specified in Section 8.10.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Capital Securities" means the Capital Securities
sold by the Initial Purchaser in reliance on Regulation S.
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"Regulation S Capital Securities Legend" means a legend
substantially in the form of the legend required in Exhibit E to be
placed upon the Regulation S Capital Securities.
"Regulation S Certificate" means a certificate substantially
in the form set forth in Exhibit G.
"Restricted Period" means the period of 41 consecutive days
beginning on and including the later of (i) the day on which Securities
are first offered to persons other than distributors (as defined in
Regulation S) in reliance on Regulation S and (ii) the Closing Date.
"Restricted Securities Certificate" means a certificate
substantially in the form set forth in Exhibit F.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Capital Securities" means the Capital Securities
sold by the Initial Purchaser in reliance on Rule 144A.
"Rule 144A Capital Securities Legend" means a legend
substantially in the form of the legend required in Exhibit E to be
placed upon the Rule 144A Capital Securities.
"Securities Act" means the United States Securities Act of
1933.
"Securities Act Legend" means a Rule 144 Capital Securities
Legend or a Regulation S Capital Securities Legend.
"Securities Register" and "Securities Registrar" have the
respective meanings specified in Section 5.4.
"Successor Capital Security" of any particular Capital
Security means every Capital Security issued after, and evidencing all
or a portion of the same beneficial interest in the Trust as that
evidenced by, such particular Capital Security; and, for the purposes
of this definition, any Capital Security executed and delivered under
Section 5.5 in exchange for or in lieu of a mutilated, destroyed, lost
or stolen Capital Security shall be deemed to evidence the same
beneficial interest as the mutilated, destroyed, lost or stolen Capital
Security.
"Trust" means the Delaware business trust heretofore created,
and continued hereby, and identified on the cover page to this Trust
Agreement.
"Trust Agreement" means this Amended and Restated Trust
Agreement, as the same may be modified, amended or supplemented in
accordance with the applicable
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provisions hereof, including (i) all exhibits hereto and (ii) for all
purposes of this Trust Agreement and any such modification, amendment
or supplement, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this Trust Agreement and any such
modification, amendment or supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as
in force at the date as of which this Trust Agreement is executed;
provided, however, that in the event the Trust Indenture Act of 1939 is
amended after such date, "Trust Indenture Act" means, to the extent
required by any such amendment, the Trust Indenture Act of 1939 as so
amended.
"Trust Property" means (a) the Debentures, (b) the rights of
the Trust under the Expense Agreement, (c) any cash on deposit in, or
owing to, the Payment Account and (e) all proceeds and rights in
respect of the foregoing and any other property and assets for the time
being held or deemed to be held by the Property Trustee pursuant to the
trusts of this Trust Agreement.
"Trust Securities Certificate" means any one of the Common
Securities Certificates or the Capital Securities Certificates.
"Trust Security" means any one of the Common Securities or the
Capital Securities.
"Trustees" means, collectively, the Property Trustee and the
Delaware Trustee.
"Unrestricted Securities Certificate" means a certificate
substantially in the form set forth in Exhibit H.
ARTICLE II
CONTINUATION OF THE TRUST
SECTION 2.1. Name.
The Trust continued hereby shall be known as "First Union Institutional
Capital II", as such name may be modified from time to time by the
Administrators following written notice to the Holders of Trust Securities and
the Trustees, in which name the Trustees may conduct the business of the Trust,
make and execute contracts and other instruments on behalf of the Trust and sue
and be sued.
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SECTION 2.2. Office of the Delaware Trustee; Principal Place of
Business.
The address of the Delaware Trustee in the State of Delaware is Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001,
Attention: Corporate Trust Administration, or such other address in the State of
Delaware as the Delaware Trustee may designate by written notice to the Holders
and the Depositor. The principal executive office of the Trust is in care of
First Union Corporation, One First Union Center, Charlotte, North Carolina
28288-0013.
SECTION 2.3. Initial Contribution of Trust Property; Organizational
Expenses.
The Property Trustee acknowledges receipt in trust from the Depositor
in connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Trust as they arise or shall, upon request of any Trustee,
promptly reimburse such Trustee for any such expenses paid by such Trustee. The
Depositor shall make no claim upon the Trust Property for the payment of such
expenses.
SECTION 2.4. Issuance of the Capital Securities.
The Depositor, on behalf of the Trust and pursuant to the Original
Trust Agreement, executed and delivered the Purchase Agreement.
Contemporaneously with the execution and delivery of this Trust Agreement, an
Administrator, on behalf of the Trust, shall execute in accordance with Section
5.2 and deliver to the Initial Purchaser named in the Purchase Agreement,
Capital Securities Certificates, representing 250,000 Capital Securities, having
an aggregate Liquidation Amount of $250,000,000, against receipt of the
aggregate purchase price of such Capital Securities of $250,000,000 plus the
aggregate amount of $272,569.44 representing accrued Distributions thereon from
January 1, 1997 to the Closing Date, by the Property Trustee (the "Original
Capital Securities"). The Original Capital Securities shall consist of Rule 144A
Capital Securities and Regulation S Capital Securities.
In addition, an Administrator, on behalf of the Trust, may execute
Capital Securities Certificates in accordance with Section 5.2 representing an
additional class of Capital Securities to be issued only in exchange for all or
part of the Original Capital Securities pursuant to the exchange offer
contemplated by the Registration Rights Agreement ("New Capital Securities");
provided, that the aggregate number of issued and outstanding Capital Securities
shall not at any time exceed 250,000, less the number of Capital Securities
redeemed pursuant to Section 4.2.
SECTION 2.5. Issuance of the Common Securities; Subscription and
Purchase of Debentures.
Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrator, on behalf of the Trust, shall execute in accordance
with Section 5.2 and deliver to the Depositor, Common Securities Certificates,
registered in the name of the Depositor, representing
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7,732 Common Securities, having an aggregate Liquidation Amount of $7,732,000,
against payment by the Depositor of such amount plus the aggregate amount of
$8,430.03 representing accrued Distribution thereon from January 1, 1997 to the
Closing Date, to the Property Trustee. Contemporaneously therewith, an
Administrator, on behalf of the Trust, shall subscribe to and purchase from the
Depositor, Debentures, registered in the name of the Trust and having an
aggregate principal amount of $257,732,000, and, in satisfaction of the purchase
price for such Debentures, the Property Trustee, on behalf of the Trust, shall
deliver to the Depositor the sum of $258,012,999.47 (being the sum of the
amounts delivered to the Property Trustee pursuant to (i) the second sentence of
Section 2.4 and (ii) the first sentence of this Section 2.5).
SECTION 2.6. Declaration of Trust.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Trust Securities and to use the proceeds from such sale to acquire
Debentures, and (b) to engage in those activities necessary, convenient or
incidental thereto. The Depositor hereby appoints the Trustees as trustees of
the Trust, to have all the rights, powers and duties set forth herein, and the
Trustees hereby accept such appointment. The Property Trustee hereby declares
that it will hold the Trust Property in trust upon and subject to the conditions
set forth herein for the benefit of the Trust and the Holders. The
Administrators shall have only those ministerial duties set forth herein with
respect to accomplishing the purposes of the Trust and, to the fullest extent
permitted by law, shall not be trustees or fiduciaries with respect to the
Trust. The Property Trustee shall have the power to perform those duties
assigned to the Administrators. The Delaware Trustee shall not be entitled to
exercise any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities, of the Property Trustee or the Administrators set forth
herein. The Delaware Trustee shall be one of the trustees of the Trust for the
sole and limited purpose of fulfilling the requirements of Section 3807 of the
Delaware Business Trust Act.
SECTION 2.7. Authorization to Enter into Certain Transactions.
(a) The Trustees and the Administrators shall conduct the affairs of
the Trust in accordance with the terms of this Trust Agreement. Subject to the
limitations set forth in Section 2.7(b), and in accordance with the following
clauses (i) and (ii), the Trustees and the Administrators shall have the
authority to enter into all transactions and agreements determined by the
Trustees or the Administrators to be appropriate in exercising the authority,
express or implied, otherwise granted to the Trustees or the Administrators
under this Trust Agreement, and to perform all acts in furtherance thereof,
including without limitation the following:
(i) Each Administrator shall have the power and authority to
act on behalf of the Trust with respect to the following matters:
(A) the issuance and sale of the Trust Securities;
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(B) to cause the Trust to enter into, and to execute,
deliver and perform on behalf of the Trust, the Expense
Agreement, the Certificate Depository Agreement, the
Registration Rights Agreement and such other agreements as may
be necessary or desirable in connection with the purposes and
function of the Trust;
(C) assisting in compliance with the Registration
Rights Agreement, including filings under the Securities Act,
applicable state securities or blue sky laws, and the Trust
Indenture Act;
(D) registration of the Capital Securities under the
Exchange Act, if required, and the preparation and filing of
all periodic and other reports and other documents pursuant to
the foregoing;
(E) the sending of notices (other than notices of
default) and other information regarding the Trust Securities
and the Debentures to the Holders in accordance with this
Trust Agreement;
(F) the consent to the appointment of a Paying Agent
and Securities Registrar in accordance with this Trust
Agreement which consent shall not be unreasonably withheld;
(G) execution of the Trust Securities in accordance
with this Trust Agreement;
(H) to the extent provided in this Trust Agreement,
the winding up of the affairs of and liquidation of the Trust
and the preparation, execution and filing of the certificate
of cancellation with the Secretary of State of the State of
Delaware;
(I) unless otherwise determined by the Property
Trustee or the holders of a majority of the Outstanding
Capital Securities or Common Securities, or as otherwise
required by the Delaware Business Trust Act or the Trust
Indenture Act, to execute on behalf of the Trust (either
acting alone or together with any or all of the
Administrators) any documents that the Administrators have the
power to execute pursuant to this Trust Agreement; and
(J) the taking of any action incidental or convenient
to the foregoing as the Trustees may from time to time
determine is necessary or advisable to give effect to the
terms of this Trust Agreement for the benefit of the Holders
(without consideration of the effect of any such action on any
particular Holder).
(ii) As among the Trustees, the Property Trustee shall have
the power, duty and authority to act on behalf of the Trust with
respect to the following matters:
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(A) the establishment of the Payment Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and any
other payments made in respect of the Debentures in the
Payment Account;
(D) the distribution through the Paying Agent of
amounts owed to the Holders in respect of the Trust
Securities;
(E) the exercise of all of the rights, powers and
privileges of a holder of the Debentures;
(F) the sending of notices of default and other
information regarding the Trust Securities and the Debentures
to the Holders in accordance with this Trust Agreement;
(G) the distribution of the Trust Property in
accordance with the terms of this Trust Agreement;
(H) to the extent provided in this Trust Agreement,
the winding up of the affairs of and liquidation of the Trust
and the preparation, execution and filing of the certificate
of cancellation with the Secretary of State of the State of
Delaware;
(I) after an Event of Default (other than under
paragraph (b), (c), (d) or (e) of the definition of such term
if such Event of Default is by or with respect to the Property
Trustee) the taking of any action incidental or convenient to
the foregoing as the Property Trustee may from time to time
determine is necessary or advisable to give effect to the
terms of this Trust Agreement and protect and conserve the
Trust Property for the benefit of the Holders (without
consideration of the effect of any such action on any
particular Holder); and
(J) any of the duties, liabilities, powers or the
authority of the Administrators set forth herein; and in the
event of a conflict between the action of the Administrators
and the action of the Property Trustee, the action of the
Property Trustee shall prevail.
(b) So long as this Trust Agreement remains in effect, the Trust (or
the Trustees or Administrators acting on behalf of the Trust) shall not
undertake any business, activities or transaction except as expressly provided
herein or contemplated hereby. In particular, neither the Trustees nor the
Administrators shall (i) acquire any investments or engage in any activities not
authorized by this Trust Agreement, (ii) sell, assign, transfer, exchange,
mortgage, pledge, set-off or otherwise dispose of any of the Trust Property or
interests therein, including to Holders, except
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as expressly provided herein, (iii) take any action that would cause the Trust
to be classified as an association taxable as a corporation or as other than a
grantor trust for United States federal income tax purposes, (iv) incur any
indebtedness for borrowed money or issue any other debt or (v) take or consent
to any action that would result in the placement of a Lien on any of the Trust
Property. The Property Trustee shall defend all claims and demands of all
Persons at any time claiming any Lien on any of the Trust Property adverse to
the interest of the Trust or the Holders in their capacity as Holders.
(c) In connection with the issue and sale of the Capital Securities,
the Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Depositor in furtherance of the following prior to the date of this
Trust Agreement are hereby ratified and confirmed in all respects):
(i) the preparation by the Trust of an offering circular,
including any amendment or supplement thereto, in relation to the
Original Capital Securities;
(ii) the compliance by the Trust with the Registration Rights
Agreement, including the preparation and filing by the Trust with the
Commission and the execution on behalf of the Trust of a registration
statement or statements on the appropriate form in relation to the
Capital Securities, including any amendments thereto pursuant to the
Registration Rights Agreement;
(iii) the determination of the States in which to take appropriate
action to qualify or register for sale all or part of the Capital
Securities and the determination of any and all such acts, other than
actions which must be taken by or on behalf of the Trust, and the
advice to the Trustees of actions they must take on behalf of the
Trust, and the preparation for execution and filing of any documents
to be executed and filed by the Trust or on behalf of the Trust, as
the Depositor deems necessary or advisable in order to comply with the
applicable laws of any such States;
(iv) if the Depositor shall desire, the preparation for filing by
the Trust and execution on behalf of the Trust of an application to
the New York Stock Exchange or any other national stock exchange or
the Nasdaq National Market for listing, upon notice of issuance, of
any Capital Securities; and the preparation for filing by the Trust
with the Commission and the execution on behalf of the Trust of a
registration statement on Form 8-A relating to the registration of the
Capital Securities under Section 12(b) or 12(g) of the Exchange Act,
including any amendments thereto;
(v) the negotiation of the terms of, and the execution and
delivery of, the Purchase Agreement providing for the sale of the
Capital Securities; and
(vi) the taking of any other actions necessary or desirable to
carry out any of the foregoing activities.
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(d) Notwithstanding anything herein to the contrary, the Administrators
and the Property Trustee are authorized and directed to conduct the affairs of
the Trust and to operate the Trust so that the Trust will not be (i) deemed to
be an "investment company" required to be registered under the 1940 Act, or (ii)
classified as an association taxable as a corporation or as other than a grantor
trust for United States federal income tax purposes and so that the Debentures
will be treated as indebtedness of the Depositor for United States federal
income tax purposes. In this connection, the Administrators, the Property
Trustee and the holders of a majority of the Common Securities are authorized to
take any action, not inconsistent with applicable law, the Certificate of Trust
or this Trust Agreement, that each of any Administrator, Property Trustee and
the holders of a majority of Common Securities determines in its 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 Capital
Securities.
SECTION 2.8. Assets of Trust.
The assets of the Trust shall consist of the Trust Property.
SECTION 2.9. Title to Trust Property.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee for the benefit of the Trust and the Holders in accordance
with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
SECTION 3.1. Payment Account.
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and any agent of the
Property Trustee shall have exclusive control and sole right of withdrawal with
respect to the Payment Account for the purpose of making deposits in and
withdrawals from the Payment Account in accordance with this Trust Agreement.
All monies and other property deposited or held from time to time in the Payment
Account shall be held by the Property Trustee in the Payment Account for the
exclusive benefit of the Holders and for distribution as herein provided,
including (and subject to) any priority of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account, promptly
upon receipt, all payments of principal of or interest on, and any other
payments or proceeds in respect of, the Debentures.
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(c) Amounts held in the Payment Account shall not be invested by the
Property Trustee pending distribution thereof.
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 4.1. Distributions.
(a) The Trust Securities represent undivided beneficial interests in
the Trust Property, and Distributions (including of Additional Amounts) will be
made on the Trust Securities at the rate and on the dates that payments of
interest (including Additional Interest) are made on the Debentures.
Accordingly:
(i) Distributions on the Trust Securities shall be cumulative,
and will accumulate whether or not there are funds of the Trust
available for the payment of Distributions. Distributions shall accrue
from January 1, 1997, and, except to the extent that the Depositor
exercises its right to defer the payment of interest on the Debentures
in accordance with the Indenture, shall be payable semi-annually in
arrears on January 1, and July 1 of each year, commencing on July 1,
1997. If any date on which a Distribution otherwise would be payable on
the Trust Securities is not a Business Day, then the payment of such
Distribution shall 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), or, if such Business Day falls in the next calendar
year, on the immediately preceding Business Day, 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 this Section 4.1(a), a
"Distribution Date").
(ii) Assuming that payments of interest on the Debentures are
made when due (and before giving effect to Additional Amounts, if
applicable), Distributions on the Trust Securities shall be payable at
a rate of 7.85% per annum of the Liquidation Amount of the Trust
Securities. Notwithstanding the foregoing, in the event of a
Registration Default, Registration Default Distributions shall be
payable on the Trust Securities in the amount and on the terms provided
in the Registration Rights Agreement, assuming that payments of
Registration Default Interest on the Debentures are made when due. The
amount of Distributions payable for any full period shall be computed
on the basis of a 360-day year of twelve 30-day months. The amount of
Distributions for any partial period shall be computed on the basis of
the number of days elapsed in a 360-day year of twelve 30-day months.
The amount of Distributions payable for any period shall include the
Additional Amounts, if any.
(iii) Distributions on the Trust Securities shall be made by
the Property Trustee from the Payment Account and shall be payable on
each Distribution Date only to the
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extent that the Trust has funds then on hand and available in the
Payment Account for the payment of such Distributions.
(b) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities on the relevant record date for
such Distribution Date, which shall be the 15th day of the month preceding such
Distribution Date.
SECTION 4.2. Redemption.
(a) On each Debenture Redemption Date and upon the stated maturity of
the Debentures, the Trust will be required to redeem a Like Amount of Trust
Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Security Register. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to
be redeemed, the identification and the aggregate Liquidation Amount of
the Trust Securities to be redeemed; and
(v) that on the Redemption Date the Redemption Price in
respect of each such Trust Security to be redeemed will be due and that
Distributions thereon will cease to accrue on and after said date.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Debentures. Redemptions of the Trust Securities shall be made and
the Redemption Price shall be due on each Redemption Date only to the extent
that the Trust has funds then on hand and available in the Payment Account for
the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of
any Capital Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, subject to Section 4.2(c), the Property Trustee will, with
respect to Book-Entry Capital Securities, irrevocably deposit with the Clearing
Agency for such Book-Entry Capital Securities funds sufficient to pay the
applicable Redemption Price and will give such Clearing Agency irrevocable
instructions and
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authority to pay the Redemption Price to the Holders thereof. With respect to
Capital Securities that are not Book-Entry Capital Securities, the Property
Trustee, subject to Section 4.2(c), will irrevocably deposit with the Paying
Agent funds sufficient to pay the applicable Redemption Price and will give the
Paying Agent irrevocable instructions and authority to pay the Redemption Price
to the Holders thereof upon surrender of their Capital Securities Certificates.
Notwithstanding the foregoing, any Distribution the Distribution Date for which
shall occur on or prior to the Redemption Date for any Trust Securities called
for redemption shall be payable to the Holders of such Trust Securities as they
appear on the Securities Register on the relevant record date for such
Distribution. If notice of redemption shall have been given and funds deposited
as required, then upon the date of such deposit, all rights of Holders of Trust
Securities so called for redemption will cease with respect to such Trust
Securities, except the right of such Holders to receive the Redemption Price
therefor and any unpaid Distribution thereon the Distribution Date for which
shall occur on or prior to the Redemption Date, but without interest, and such
Trust Securities will cease to be outstanding. In the event that any date on
which any Redemption Price is payable is not a Business Day, then payment of the
Redemption Price 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), or, if such Business Day falls in the next calendar year, on
the immediately preceding Business Day, in each case, with the same force and
effect as if made on such date. In the event that payment of the Redemption
Price for any Trust Securities called for redemption is improperly withheld or
refused and not paid either by the Trust or by the Depositor pursuant to the
Guarantee, Distributions on such Trust Securities will continue to accumulate,
at the then applicable rate, from the Redemption Date originally established by
the Trust for such Trust Securities to the date such Redemption Price is
actually paid, in which case the actual payment date will be the date fixed for
redemption for purposes of calculating the Redemption Price.
(e) Payment of the Redemption Price for Trust Securities shall be made
to the recordholders thereof as they appear on the Securities Register on the
relevant record date for the Redemption Date, which shall be at least 15 days
prior to such Redemption Date.
(f) Subject to Section 4.3(a), if less than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated pro
rata (based on Liquidation Amounts) among the Common Securities and the Capital
Securities. The particular Capital Securities to be redeemed shall be selected
pro rata (based upon Liquidation Amounts) not more than 60 days prior to the
Redemption Date by the Property Trustee from the Outstanding Capital Securities
not previously called for redemption, by such method (including, without
limitation, by lot) as the Property Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of portions (equal to $1,000
or an integral multiple of $1,000 in excess thereof) of the Liquidation Amount
of Capital Securities of a denomination larger than $1,000, provided that the
Holder of such Capital Securities shall not hold less than 100 Capital
Securities after the redemption. The Property Trustee shall promptly notify the
Security Registrar in writing of the Capital Securities selected for redemption
and, in the case of any Capital Securities selected for
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partial redemption, the Liquidation Amount thereof to be redeemed. For all
purposes of this Trust Agreement, unless the context otherwise requires, all
provisions relating to the redemption of Capital Securities shall relate, in the
case of any Capital Securities redeemed or to be redeemed only in part, to the
portion of the Liquidation Amount of Capital Securities that has been or is to
be redeemed.
SECTION 4.3. Subordination of Common Securities.
(a) Payment of Distributions (including Additional Amounts and/or
Registration Default Distributions, if applicable) on, and the Redemption Price
of, the Trust Securities, as applicable, shall be made, subject to Section
4.2(f), pro rata (based on Liquidation Amounts) among the Common Securities and
the Capital Securities; provided, however, that if on any Distribution Date or
Redemption Date any Event of Default resulting from a Debenture Event of Default
shall have occurred and be continuing, no payment of any Distribution (including
Additional Amounts, if applicable) on, or Redemption Price of, any Common
Security, and no other payment on account of the redemption, liquidation or
other acquisition of Common Securities, shall be made unless payment in full in
cash of all accumulated and unpaid Distributions (including Additional Amounts
and/or Registration Default Distributions, if applicable) on all Outstanding
Capital Securities for all Distribution periods terminating on or prior thereto,
or in the case of payment of the Redemption Price the full amount of such
Redemption Price on all Outstanding Capital Securities, shall have been made or
provided for, and all funds immediately available to the Property Trustee shall
first be applied to the payment in full in cash of all Distributions (including
Additional Amounts and/or Registration Default Distributions, if applicable) on,
or the Redemption Price of, Capital Securities then due.
(b) In the event of the occurrence of any Event of Default resulting
from any Debenture Event of Default, the Holder of Common Securities will be
deemed to have waived any right to act with respect to any such Event of Default
under this Trust Agreement until the effect of all such Events of Default with
respect to the Capital Securities have been cured, waived or otherwise
eliminated. Until any such Event of Default under this Trust Agreement with
respect to the Capital Securities 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 the 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.
SECTION 4.4. Payment Procedures.
Payments of Distributions (including Additional Amounts and/or
Registration Default Distributions, if applicable) in respect of the Capital
Securities shall be made by check mailed to the address of the Person entitled
thereto as such address shall appear on the Securities Register or, if the
Capital Securities are held by a Clearing Agency, such Distributions shall be
made to such Clearing Agency in immediately available funds, which shall credit
the relevant Persons' accounts at such Clearing Agency on the relevant
Distribution Dates. Payments in
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respect of the Common Securities shall be made in such manner as shall be
mutually agreed between the Property Trustee and the Common Securities Holder.
SECTION 4.5. Tax Returns and Reports.
The Administrators shall prepare (or cause to be prepared), at the
Depositor's expense, and file all United States federal, state and local tax and
information returns and reports required to be filed by or in respect of the
Trust. In this regard, the Administrators shall (a) prepare and file (or cause
to be prepared and filed) the appropriate Internal Revenue Service form required
to be filed in respect of the Trust in each taxable year of the Trust and (b)
prepare and furnish (or cause to be prepared and furnished) to each Holder the
appropriate Internal Revenue Service form required to be so prepared and
furnished. The Administrators shall provide the Depositor and the Property
Trustee with a copy of all such returns and reports promptly after such filing
or furnishing. The Trustees shall comply with United States federal withholding
and backup withholding tax laws and information reporting requirements with
respect to any payments to Holders under the Trust Securities.
SECTION 4.6. Payment of Taxes, Duties, Etc. of the Trust.
Upon receipt under the Debentures of Additional Sums, the Property
Trustee shall promptly pay any taxes, duties or governmental charges of
whatsoever nature (other than withholding taxes) imposed on the Trust by the
United States or any other taxing authority.
SECTION 4.7. Payments under Indenture or Pursuant to Direct Actions.
Any amount payable hereunder to any Holder of Capital Securities shall
be reduced by the amount of any corresponding payment such Holder (or an Owner
with respect to the Holder's Capital Securities) has directly received pursuant
to Section 5.8 of the Indenture or Section 5.14 of this Trust Agreement.
SECTION 4.8. Liability of the Holder of Common Securities.
The Holder of the Common Securities shall be liable for the debts and
obligations of the Trust as set forth in the Expense Agreement.
ARTICLE V
TRUST SECURITIES CERTIFICATES
SECTION 5.1. Initial Ownership.
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Upon the creation of the Trust and the contribution by the Depositor
pursuant to Section 2.3 and until the issuance of the Trust Securities, and at
any time during which no Trust Securities are outstanding, the Depositor shall
be the sole beneficial owner of the Trust.
SECTION 5.2. The Trust Securities Certificates.
The Capital Securities Certificates shall be issued in minimum
denominations of $1,000 Liquidation Amount (and in blocks of at least 100
Capital Securities) and integral multiples of $1,000 in excess thereof, and the
Common Securities Certificates shall be issued in denominations of $1,000
Liquidation Amount and integral multiples thereof. The Trust Securities
Certificates shall be executed on behalf of the Trust by manual or facsimile
signature of at least one Administrator. Trust Securities Certificates bearing
the manual or facsimile signatures of individuals who were, at the time when
such signatures shall have been affixed, authorized to sign on behalf of the
Trust, shall be validly issued and entitled to the benefits of this Trust
Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the delivery of such Trust Securities
Certificates or did not hold such offices at the date of delivery of such Trust
Securities Certificates. A transferee of a Trust Securities Certificate shall
become a Holder, and shall be entitled to the rights and subject to the
obligations of a Holder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Sections 5.4, 5.11
and 5.13. Upon their original issuance, Rule 144A Capital Securities shall be
issued in the form of one or more Global Rule 144A Capital Securities
Certificates registered in the name of the nominee of DTC for credit to the
respective accounts of the Owners thereof (or such other accounts as they may
direct). Upon their original issuance, Regulation S Capital Securities shall be
issued in the form of one or more Global Regulation S Capital Securities
Certificates registered in the name of the nominee of DTC for credit to the
respective accounts of the beneficial owners of the Capital Securities
represented thereby (or such other accounts as they may direct), provided that
upon deposit all such Regulation S Capital Securities shall be credited to or
through accounts maintained at DTC by or on behalf of Euroclear or Cedel.
SECTION 5.3. Execution and Delivery of Trust Securities Certificates.
At the Closing Date, the Administrators shall cause Trust Securities
Certificates consisting of the Original Capital Securities and the Common
Securities in an aggregate Liquidation Amount as provided in Sections 2.4 and
2.5, to be executed on behalf of the Trust and delivered to or upon the written
order of the Depositor, signed by its chairman of the board, its president, any
executive vice president or any vice president, treasurer or assistant treasurer
or controller without further corporate action by the Depositor, in authorized
denominations.
SECTION 5.4. Registration of Transfer and Exchange of Capital
Securities Certificates.
(a) The Property Trustee shall keep or cause to be kept, at the office
or agency maintained pursuant to Section 5.8, a register or registers for the
purpose of registering Trust
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Securities Certificates and transfers and exchanges of Capital Securities
Certificates (the "Securities Register"), in which the registrar designated by
the Property Trustee (the "Securities Registrar") with the reasonable consent of
the Administrators subject to such reasonable regulations as it may prescribe,
shall provide for the registration of Capital Securities Certificates and Common
Securities Certificates (subject to Section 5.10 in the case of the Common
Securities Certificates) and registration of transfers and exchanges of Capital
Securities Certificates as herein provided. The Bank shall be the initial
Securities Registrar.
Upon surrender for registration of transfer of any Capital Securities
Certificate at the office or agency maintained pursuant to Section 5.8, the
Administrators or any one of them shall execute and the Property Trustee shall
deliver, in the name of the designated transferee or transferees, one or more
new Capital Securities Certificates in authorized denominations of a like
aggregate Liquidation Amount dated the date of execution by such Administrator.
The Securities Registrar shall not be required to register the transfer
of any Capital Securities that have been called for redemption.
At the option of a Holder, Capital Securities Certificates may be
exchanged for other Capital Securities Certificates in authorized denominations
of the same class and of a like aggregate Liquidation Amount upon surrender of
the Capital Securities Certificates to be exchanged at the office or agency
maintained pursuant to Section 5.8.
Every Capital Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Securities Registrar duly
executed by the Holder or his attorney duly authorized in writing. Each Capital
Securities Certificate surrendered for registration of transfer or exchange
shall be cancelled and subsequently disposed of by the Property Trustee or
Securities Registrar in accordance with such Person's customary practice.
No service charge shall be made for any registration of transfer or
exchange of Capital Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Capital Securities
Certificates.
(b) Certain Transfers and Exchanges. Notwithstanding any other
provision of this Trust Agreement, transfers and exchanges of Original Capital
Securities of the kinds specified in this Section 5.4(b) shall be made only in
accordance with this Section 5.4(b).
(i) Global Rule 144A Capital Securities Certificate to Global
Regulation S Capital Securities Certificate. If an Owner of Global Rule
144A Capital Securities Certificates at any time wishes to transfer
such interest to a Person who wishes to acquire the same in the form of
a beneficial interest in Global Regulation S Capital Securities
Certificates, such transfer may be effected only in accordance with the
provisions of this Clause (b)(i)
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and Clause (b)(iv) below. Upon receipt by the Security Registrar of (A)
an order given by the Clearing Agency or its authorized representative
directing that Global Regulation S Capital Securities Certificates in a
specified amount be credited to a specified Clearing Agency
Participant's account and that Global Rule 144A Capital Securities
Certificates in an equal amount be debited from another specified
Clearing Agency Participant's account and (B) a Regulation S
Certificate, satisfactory to the Security Registrar, and duly executed
by the Owner of such Global Rule 144A Capital Securities Certificates
or his attorney duly authorized in writing, then the Security Registrar
shall reduce the amount of the Global Rule 144A Capital Securities
Certificates and increase the amount of the Global Regulation S Capital
Securities Certificates, subject to Clause (b)(iv) below.
(ii) Global Regulation S Capital Securities to Global Rule 144A
Capital Securities. If an Owner of Global Regulation S Capital
Securities Certificates wishes at any time to transfer such interest to
a Person who wishes to acquire the same in the form of a beneficial
interest in Global Rule 144A Capital Securities Certificates, such
transfer may be effected only in accordance with this Clause (b)(ii).
Upon receipt by the Security Registrar of (A) an order given by the
Clearing Agency or its authorized representative directing that Global
Rule 144A Capital Securities Certificates in a specified amount be
credited to a specified Clearing Agency Participant's account and that
Global Regulation S Capital Securities Certificates in an equal amount
be debited from another specified Clearing Agency Participant's account
and (B) if such transfer is to occur during the Restricted Period, a
Restricted Securities Certificate satisfactory to the Securities
Registrar and duly executed by the Owner of such Global Regulation S
Capital Securities Certificates or his attorney duly authorized in
writing, then the Security Registrar shall reduce the amount of the
Global Regulation S Capital Securities Certificates by such specified
amount and increase the amount of the Global Rule 144A Capital
Securities Certificates.
(iii) Non-Global Capital Securities Certificates to Non-Global
Capital Securities Certificates. Original Capital Securities
Certificates other than Global Capital Securities Certificates may be
transferred, in whole or in part, to a Person who takes delivery in the
form of another Capital Security that is not a Global Capital
Securities Certificate, provided, that if the Capital Security to be
transferred is a Rule 144A Capital Security, or is a Regulation S
Capital Security and the transfer is to occur during the Restricted
Period, then the Security Registrar shall have received (A) a
Restricted Securities Certificate satisfactory to the Security
Registrar and duly executed by the transferor Holder or his attorney
duly authorized in writing, in which case the transferee Holder shall
take delivery in the form of a Rule 144A Capital Security, or (B) a
Regulation S Certificate satisfactory to the Security Registrar and
duly executed by the transferor Holder or his attorney duly authorized
in writing, in which case the transferee Holder shall take delivery in
the form of a Regulation S Capital Security.
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(iv) Global Regulation S Capital Securities Certificates to be
Held Through Euroclear or Cedel during Restricted Period. The Property
Trustee shall use its best efforts to cause the Clearing Agency to
ensure that, until the expiration of the Restricted Period, beneficial
interests in the Global Regulation S Capital Securities Certificates
may be held only in or through accounts maintained at the Clearing
Agency by Euroclear or Cedel (or by Clearing Agency Participants acting
for the account thereof), and no Person shall be entitled to effect any
transfer or exchange that would result in any such interest being held
otherwise than in or through such an account; provided that this Clause
(b)(iv) shall not prohibit any transfer or exchange of such an interest
in accordance with Clause (b)(ii) above.
(v) Limitations Relating to Size of Blocks. Notwithstanding any
other provision of this Trust Agreement, Capital Securities may only be
transferred or exchanged in blocks having a Liquidation Amount of not
less than $100,000. Any transfer, exchange or other disposition of
Capital Securities in contravention of this Section 5.4(b)(v) shall be
deemed to be void and of no legal effect whatsoever, any such
transferee shall be deemed not to be the Holder or Owner of such
Capital Security for any purpose, including but not limited to the
receipt of distributions on such Capital Securities, and such
transferee shall be deemed to have no interest whatsoever in such
Capital Securities.
(c) Securities Act Legends. Rule 144A Capital Securities and their
respective Successor Capital Securities shall bear a Rule 144A Capital
Securities Legend, and the Regulation S Capital Securities and their Successor
Capital Securities shall bear a Regulation S Capital Securities Legend, subject
to the following:
(i) New Capital Securities shall not bear a Securities Act
Legend;
(ii) subject to the following Clauses of this Section 5.4(c), a
Capital Securities Certificate or any portion thereof which is
exchanged, upon transfer or otherwise, for a Global Capital Securities
Certificate or any portion thereof shall bear the Securities Act
Legend borne by such Global Capital Securities Certificate while
represented thereby;
(iii) subject to the following Clauses of this Section 5.4(c),
a new Capital Securities Certificate which is not a Global Capital
Securities Certificate and is issued in exchange for another Capital
Securities Certificate (including a Global Capital Securities
Certificate) or any portion thereof, upon transfer or otherwise,
shall bear the Securities Act Legend borne by such other Capital
Security Certificate, provided that, if such new Capital Securities
Certificate is required pursuant to Section 5.4(b)(iii) to be issued
in the form of a Rule 144A Capital Security, it shall bear a Rule
144A Capital Securities Legend and, if such new Capital Securities
Certificate is so required to be issued in the form of a Regulation
S Capital Security, it shall bear a Regulation S Capital Securities
Legend;
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(iv) any Original Capital Securities which are sold or otherwise
disposed of pursuant to an effective registration statement under the
Securities Act (including the Shelf Registration contemplated by the
Registration Rights Agreement), together with their Successor Capital
Securities shall not bear a Securities Act Legend; the Depositor or an
Administrator shall inform the Property Trustee in writing of the
effective date of any such registration statement registering the
Original Capital Securities under the Securities Act and shall notify
the Property Trustee at any time when prospectuses may not be delivered
with respect to Original Capital Securities to be sold pursuant to such
registration statement. The Property Trustee shall not be liable for
any action taken or omitted to be taken by it in good faith in
accordance with the aforementioned registration statement;
(v) at any time after the Original Capital Securities may be
freely transferred without registration under the Securities Act or
without being subject to transfer restrictions pursuant to the
Securities Act, a new Capital Securities Certificate which does not
bear a Securities Act Legend may be issued in exchange for or in lieu
of a Capital Securities Certificate (other than a Global Capital
Securities Certificate) or any portion thereof which bears such a
legend if the Security Registrar has received an Unrestricted
Securities Certificate, satisfactory to the Security Registrar and duly
executed by the Holder of such legended Capital Securities Certificate
or his attorney duly authorized in writing;
(vi) a new Capital Securities Certificate which does not bear a
Securities Act Legend may be issued in exchange for or in lieu of a
Capital Securities Certificate (other than a Global Capital Securities
Certificate) or any portion thereof which bears such a legend if, in
the Property Trustee's judgment, placing such a legend upon such new
Capital Securities Certificate is not necessary to ensure compliance
with the registration requirements of the Securities Act; and
(vii) notwithstanding the foregoing provisions of this Section
5.4(c), a Successor Capital Security of a Capital Security that does
not bear a particular form of Securities Act Legend shall not bear
such form of legend unless the Property Trustee has reasonable cause
to believe that such Successor Capital Security is a "restricted
security" within the meaning of Rule 144.
(d) The Property Trustee shall not be required to insure or verify
compliance with securities laws, including the Securities Act, Exchange Act and
1940 Act, in connection with transfers and exchanges of Capital Securities
Certificates.
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SECTION 5.5. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates.
If (a) any mutilated Trust Securities Certificate shall be surrendered
to the Securities Registrar, or if the Securities Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Trust
Securities Certificate and (b) there shall be delivered to the Securities
Registrar and the Administrators such security or indemnity as may be required
by them to save each of them harmless, then in the absence of notice that such
Trust Securities Certificate shall have been acquired by a bona fide purchaser,
the Administrators, or any one of them, on behalf of the Trust shall execute and
make available for delivery, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Trust Securities Certificate, a new Trust Securities
Certificate of like class, tenor and denomination. In connection with the
issuance of any new Trust Securities Certificate under this Section, the
Administrators or the Securities Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Trust Securities Certificate issued pursuant
to this Section shall constitute conclusive evidence of an undivided beneficial
interest in the Trust Property, as if originally issued, whether or not the
lost, stolen or destroyed Trust Securities Certificate shall be found at any
time.
SECTION 5.6. Persons Deemed Holders.
The Trustees, the Administrators or the Securities Registrar shall
treat the Person in whose name any Trust Securities Certificate shall be
registered in the Securities Register as the owner of such Trust Securities
Certificate for the purpose of receiving Distributions and for all other
purposes whatsoever, and neither the Trustees, the Administrators nor the
Securities Registrar shall be bound by any notice to the contrary.
SECTION 5.7. Access to List of Holders' Names and Addresses.
Each Holder and each Owner shall be deemed to have agreed not to hold
the Depositor, the Property Trustee or the Administrators accountable by reason
of the disclosure of its name and address, regardless of the source from which
such information was derived.
SECTION 5.8. Maintenance of Office or Agency.
The Administrators or the Property Trustee shall maintain an office or
offices or agency or agencies where Capital Securities Certificates may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Trustees in respect of the Trust Securities Certificates
may be served. The Administrators initially designate First Union Corporation,
One First Union Center, Charlotte, North Carolina 28288-0013, Attn: General
Counsel, as its principal corporate trust office for such purposes. The
Administrators or the Property Trustee shall give prompt written notice to the
Depositor and to the Holders of any change in the location of the Securities
Register or any such office or agency.
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SECTION 5.9. Appointment of Paying Agent.
The Paying Agent shall make Distributions to Holders from the Payment
Account and shall report the amounts of such Distributions to the Property
Trustee and Administrators. Any Paying Agent shall have the revocable power to
withdraw funds from the Payment Account for the purpose of making the
Distributions referred to above. The Property Trustee may revoke such power and
remove the Paying Agent in its sole discretion. The Paying Agent shall initially
be the Bank, and any co-paying agent chosen by the Bank, and reasonably
acceptable to the Administrators. Any Person acting as Paying Agent shall be
permitted to resign as Paying Agent upon 30 days' written notice to the
Administrators and the Property Trustee. In the event that the Bank shall no
longer be the Paying Agent or a successor Paying Agent shall resign or its
authority to act be revoked, the Administrators shall appoint a successor that
is reasonably acceptable to the Administrators to act as Paying Agent (which
shall be a bank or trust company). Such successor Paying Agent or any additional
Paying Agent shall execute and deliver to the Trustees an instrument in which
such successor Paying Agent or additional Paying Agent shall agree with the
Trustees that as Paying Agent, such successor Paying Agent or additional Paying
Agent will hold all sums, if any, held by it for payment to the Holders in trust
for the benefit of the Holders entitled thereto until such sums shall be paid to
such Holders. The Paying Agent shall return all unclaimed funds to the Property
Trustee and upon removal of a Paying Agent such Paying Agent shall also return
all funds in its possession to the Property Trustee. The provisions of Sections
8.1, 8.3 and 8.6 shall apply to the Bank also in its role as Paying Agent, for
so long as the Bank shall act as Paying Agent and, to the extent applicable, to
any other paying agent appointed hereunder. Any reference in this Trust
Agreement to the Paying Agent shall include any co-paying agent unless the
context requires otherwise.
SECTION 5.10. Ownership of Common Securities by Depositor.
At the Closing Date, the Depositor shall acquire and retain beneficial
and record ownership of the Common Securities. To the fullest extent permitted
by law, other than a transfer in connection with a consolidation or merger of
the Depositor into another Person, or any conveyance, transfer or lease by the
Depositor of its properties and assets substantially as an entirety to any
Person, pursuant to Section 8.1 of the Indenture, any attempted transfer of the
Common Securities shall be void. The Administrators shall cause each Common
Securities Certificate issued to the Depositor to contain a legend stating "THIS
CERTIFICATE IS NOT TRANSFERABLE".
SECTION 5.11. Book-Entry Capital Securities; Common Securities
Certificate.
(a) As provided in Section 5.2, the Original Capital Securities, upon
original issuance, will be issued in the form of typewritten Global Capital
Securities Certificates representing Book- Entry Capital Securities, to be
delivered to DTC or its custodian by, or on behalf of, the Trust. Such Capital
Securities Certificates shall initially be registered on the Securities Register
in the name of Cede & Co., the nominee of DTC, and no Owner will receive a
Definitive Capital
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Securities Certificate representing such Owner's interest in such Capital
Securities, except as provided in Section 5.13. Unless and until Definitive
Capital Securities Certificates have been issued to Owners pursuant to Section
5.13:
(i) the Securities Registrar, the Administrators and the
Trustees shall be entitled to deal with the Clearing Agency for all
purposes of this Trust Agreement relating to the Book-Entry Capital
Securities (including the payment of the Liquidation Amount of and
Distributions on the Capital Securities evidenced by Book-Entry Capital
Securities and the giving of instructions or directions to Owners of
Capital Securities evidenced by Book- Entry Capital Securities) as the
sole Holder of Capital Securities evidenced by Book-Entry Capital
Securities and shall have no obligations to the Owners thereof;
(ii) to the extent that the provisions of this Section 5.11
conflict with any other provisions of this Trust Agreement, the
provisions of this Section 5.11 shall control; and
(iii) the rights of the Owners of the Book-Entry Capital
Securities shall be exercised only through the Clearing Agency and
shall be limited to those established by law and agreements between
such Owners and the Clearing Agency and/or the Clearing Agency
Participants. Pursuant to the Certificate Depository Agreement, unless
and until Definitive Capital Securities Certificates are issued
pursuant to Section 5.13, the DTC will make book-entry transfers among
the Clearing Agency Participants and receive and transmit payments on
the Capital Securities to such Clearing Agency Participants.
(b) If any Global Capital Securities Certificate is to be exchanged for
other Capital Securities Certificates or cancelled in part, or if another
Capital Securities Certificate is to be exchanged in whole or in part for a
beneficial interest in any Global Capital Securities Certificate, then either
(i) such Global Capital Securities Certificate shall be so surrendered for
exchange or cancellation as provided in this Article Five or (ii) the aggregate
Liquidation Amount represented by such Global Capital Securities Certificate
shall be reduced, subject to Section 5.2, or increased by an amount equal to the
Liquidation Amount represented by that portion of the Global Capital Securities
Certificate to be so exchanged or cancelled, or equal to the Liquidation Amount
represented by such other Capital Securities Certificates to be so exchanged for
a beneficial interest therein, as the case may be, by means of an appropriate
adjustment made on the records of the Security Registrar, whereupon the Property
Trustee, in accordance with the Applicable Procedures, shall instruct the
Clearing Agency or its authorized representative to make a corresponding
adjustment to its records.
(c) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a Definitive Common
Securities Certificate.
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SECTION 5.12. Notices to Clearing Agency.
To the extent that a notice or other communication to the Owners is
required under this Trust Agreement, unless and until Definitive Capital
Securities Certificates shall have been issued to Owners pursuant to Section
5.13, the Trustees and Administrators shall give all such notices and
communications specified herein to be given to Owners to the Clearing Agency,
and shall have no obligations to the Owners.
SECTION 5.13. Definitive Capital Securities Certificates.
If (a) the Depositor advises the Trustees in writing that the Clearing
Agency is no longer willing or able to properly discharge its responsibilities
with respect to the Capital Securities Certificates or has ceased to be a
Clearing Agency, and the Depositor is unable to locate a qualified successor,
(b) the Depositor at its option advises the Trustees in writing that it elects
to terminate the book-entry system through the Clearing Agency or (c) there
shall have occurred and be continuing an Event of Default, then an Administrator
shall notify the Clearing Agency and the Clearing Agency shall notify all Owners
of Capital Securities Certificates and the other Trustees of the occurrence of
any such event and of the availability of the Definitive Capital Securities
Certificates to Owners of such class or classes, as applicable, requesting the
same. Upon surrender to the Security Registrar of the typewritten Capital
Securities Certificate or Certificates representing the Global Capital
Securities Certificates by the Clearing Agency, accompanied by registration
instructions, the Administrators, or any one of them, shall execute the
Definitive Capital Securities Certificates in accordance with the instructions
of the Clearing Agency. Neither the Securities Registrar, nor the Trustees, nor
the Administrators shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Capital Securities
Certificates, the Trustees and the Administrators shall recognize the Holders of
the Definitive Capital Securities Certificates as Holders. The Definitive
Capital Securities Certificates shall be printed, lithographed or engraved or
may be produced in any other manner as is reasonably acceptable to the
Administrators, as evidenced by the execution thereof by the Administrators or
any one of them.
SECTION 5.14. Rights of Holders.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.9, and
the Holders shall not have any right or title therein other than the undivided
beneficial interest in the assets of the Trust conferred by their Trust
Securities and they shall have no right to call for any partition or division of
property, profits or rights of the Trust except as described below. The Trust
Securities shall be personal property giving only the rights specifically set
forth therein and in this Trust Agreement. The Trust Securities shall have no
preemptive or similar rights. When issued and delivered to Holders of Capital
Securities against payment of the purchase price therefor, the Capital
Securities will be fully paid and nonassessable undivided beneficial interests
in the Trust Property. The Holders
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of Capital Securities, in their capacities as such, shall 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.
(b) For so long as any Capital Securities remain Outstanding, if, upon
a Debenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in aggregate principal amount of the outstanding Debentures fail
to declare the principal of all of the Debentures to be immediately due, the
Holders of at least 25% in aggregate Liquidation Amount of the Capital
Securities then Outstanding shall have such right by a notice in writing to the
Depositor and the Debenture Trustee; and upon any such declaration such
principal amount of and the accrued interest on all of the Debentures shall
become immediately due, provided that the payment of principal and interest on
such Debentures shall remain subordinated to the extent provided in the
Indenture.
At any time after such a declaration of acceleration with respect to
the Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as in the Indenture
provided, the Holders of at least a majority in aggregate Liquidation Amount of
the Capital Securities, by written notice to the Property Trustee, the Depositor
and the Debenture Trustee, may rescind and annul such declaration and its
consequences if:
(i) the Depositor has paid or deposited with the Debenture
Trustee a sum sufficient to pay
(A) all overdue installments of interest (including
any Additional Interest) on all of the Debentures,
(B) the principal of (and premium, if any, on) any
Debentures which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate
borne by the Debentures, and
(C) all sums paid or advanced by the Debenture
Trustee under the Indenture and the reasonable compensation,
expenses, disbursements and advances of the Debenture Trustee
and the Property Trustee, their agents and counsel; and
(ii) all Debenture Events of Default, other than the
non-payment of the principal of the Debentures which has become due
solely by such acceleration, have been cured or waived as provided in
Section 5.13 of the Indenture.
The Holders of at least a majority in aggregate Liquidation Amount of
the Capital Securities may, on behalf of the Holders of all the Capital
Securities, waive any past default under the Indenture, except a default in the
payment of principal or interest (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and principal due
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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
Debenture. No such rescission shall affect any subsequent default or impair any
right consequent thereon.
Upon receipt by the Property Trustee of written notice declaring such
an acceleration, or rescission and annulment thereof, by Holders of Capital
Securities all or part of which is represented by Book-Entry Capital Securities,
a record date shall be established for determining Holders of Outstanding
Capital Securities entitled to join in such notice, which record date shall be
at the close of business on the day the Property Trustee receives such notice.
The Holders on such record date, or their duly designated proxies, and only such
Persons, shall be entitled to join in such notice, whether or not such Holders
remain Holders after such record date; provided, that, unless such declaration
of acceleration, or rescission and annulment, as the case may be, shall have
become effective by virtue of the requisite percentage having joined in such
notice prior to the day which is 90 days after such record date, such notice of
declaration of acceleration, or rescission and annulment, as the case may be,
shall automatically and without further action by any Holder be canceled and of
no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy
of a Holder, from giving, after expiration of such 90-day period, a new written
notice of declaration of acceleration, or rescission and annulment thereof, as
the case may be, that is identical to a written notice which has been canceled
pursuant to the proviso to the preceding sentence, in which event a new record
date shall be established pursuant to the provisions of this Section 5.14(b).
(c) For so long as any Capital Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this Trust Agreement
and the Indenture, upon a Debenture Event of Default specified in Section 5.1(1)
or 5.1(2) of the Indenture, any Holder of Capital Securities shall have the
right to institute a proceeding directly against the Depositor, pursuant to
Section 5.8 of the Indenture, for enforcement of payment to such Holder of the
principal amount of or interest on Debentures having a principal amount equal to
the Liquidation Amount of the Capital Securities of such Holder (a "Direct
Action"). Except as set forth in Section 5.14(b) and this Section 5.14(c),
Holders of Capital Securities shall have no right to exercise directly any right
or remedy available to holders of, or in respect of, Debentures.
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ARTICLE VI
ACTS OF HOLDERS; MEETINGS; VOTING
SECTION 6.1. Limitations on Voting Rights.
(a) Except as provided in this Section 6.1, in Sections 5.14, 8.10 and
10.2 and in the Indenture, and as otherwise required by law, no Holder of
Capital Securities shall have any right to vote or in any manner otherwise
control the administration, operation and management of the Trust or the
obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Trust Securities Certificates, be construed so as
to constitute the Holders from time to time as partners or members of an
association.
(b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method or place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on the Debenture Trustee with respect to such
Debentures, (ii) waive any past default which is waivable under Section 5.13 of
the Indenture, (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and payable or (iv) consent to
any amendment, modification or termination of the Indenture or the Debentures,
where such consent shall be required, without, in each case, obtaining the prior
approval of the Holders of at least 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 Debentures affected
thereby, no such consent shall be given by the Property Trustee without the
prior written consent of each Holder of Capital Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote of the Holders
of Capital Securities, except by a subsequent vote of the Holders of Capital
Securities. The Property Trustee shall notify all Holders of Capital Securities
of any notice of default received from the Debenture Trustee with respect to the
Debentures. In addition to obtaining the foregoing approvals of Holders of
Capital Securities, prior to taking any of the foregoing actions, the Trustees
shall, at the expense of the Depositor, obtain an Opinion of Counsel experienced
in such matters to the effect that such action shall not cause the Trust to be
classified as an association taxable as a corporation or as other than a grantor
trust for United States federal income tax purposes.
(c) If any proposed amendment to the Trust Agreement provides for, or
the Trustees otherwise propose to effect, (i) any action that would adversely
affect in any material respect the powers, preferences or special rights of the
Capital Securities, whether by way of amendment to this Trust Agreement or
otherwise, or (ii) the dissolution, winding-up or termination of the Trust,
other than pursuant to the terms of this Trust Agreement, then the Holders of
Outstanding Capital
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Securities as a class will be entitled to vote on such amendment or proposal and
such amendment or proposal shall not be effective except with the approval of
the Holders of at least a majority in Liquidation Amount of the Outstanding
Capital Securities. Notwithstanding any other provision of this Trust Agreement,
no amendment to this Trust Agreement may be made if, as a result of such
amendment, it would cause the Trust to be classified as an association taxable
as a corporation or as other than a grantor trust for United States federal
income tax purposes.
SECTION 6.2. Notice of Meetings.
Notice of all meetings of Holders of Capital Securities, stating the
time, place and purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 10.8 to each such Holder at such Holder's address as it
appears in the Securities Register as of the record date for such meeting. Such
notice shall be sent, first-class mail, at least 15 days and not more than 90
days before the meeting. At any such meeting, any business properly before the
meeting may be so considered whether or not stated in the notice of the meeting.
Any adjourned meeting may be held as adjourned without further notice.
SECTION 6.3. Meetings of Holders of Capital Securities.
No annual meeting of Holders is required to be held. The Property
Trustee, however, shall call a meeting of Holders of Capital Securities to vote
on any matter upon the written request of the Holders of record of at least 25%
of the aggregate Liquidation Amount of Outstanding Capital Securities) and the
Administrators or the Property Trustee may, at any time in their discretion,
call a meeting of Holders of Capital Securities to vote on any matters as to
which Holders of Capital Securities are entitled to vote.
Holders of at least 50% of the Liquidation Amount of Outstanding
Capital Securities, present in person or by proxy, shall constitute a quorum at
any meeting of Holders of Capital Securities.
If a quorum is present at a meeting, an affirmative vote by the Holders
of record present, in person or by proxy, holding at least a majority of the
Liquidation Amount of Outstanding Capital Securities held by the Holders of
record present, either in person or by proxy, at such meeting shall constitute
the action of the Holders of Capital Securities, unless this Trust Agreement
requires a greater number of affirmative votes.
SECTION 6.4. Voting Rights.
In respect of any matter as to which a Holder is entitled to vote, such
Holder shall be entitled to one vote for each $1,000 of Liquidation Amount Trust
Securities held of record by such Holder.
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SECTION 6.5. Proxies, Etc.
At any meeting of Holders, any Holder entitled to vote thereat may vote
by proxy, provided that no proxy shall be voted at any meeting unless it shall
have been placed on file with the Property Trustee, or with such other officer
or agent of the Trust as the Property Trustee may direct, for verification prior
to the time at which such vote shall be taken. Pursuant to a resolution of the
Property Trustee, proxies may be solicited in the name of the Property Trustee
or one or more officers of the Property Trustee. Only Holders of record shall be
entitled to vote. When Trust Securities are held jointly by several Persons, any
one of them may vote at any meeting in person or by proxy in respect of such
Trust Securities, but if more than one of them shall be present at such meeting
in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Trust Securities. A proxy purporting to be executed by or on behalf of a
Holder shall be deemed valid unless challenged at or prior to its exercise, and
the burden of proving invalidity shall rest on the challenger. No proxy shall be
valid more than three years after its date of execution.
SECTION 6.6. Holder Action by Written Consent.
Any action which may be taken by Holders at a meeting may be taken
without a meeting if Holders holding more than a majority of the aggregate
Liquidation Amount of the Outstanding Trust Securities entitled to vote in
respect of such action (or such larger proportion thereof as shall be required
by any express provision of this Trust Agreement) shall consent to the action in
writing.
SECTION 6.7. Record Date for Voting and Other Purposes.
For the purpose of determining the Holders who are entitled to notice
of and to vote at any meeting or by written consent, or to participate in any
Distribution on the Trust Securities in respect of which a record date is not
otherwise provided for in this Trust Agreement, or for the purpose of any other
action, the Administrators or Property Trustee may from time to time fix a date,
not more than 90 days prior to the date of any meeting of Holders or the payment
of a Distribution or other action, as the case may be, as a record date for the
determination of the identity of the Holders of record for such purposes.
SECTION 6.8. Acts of Holders.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Trust Agreement to be given, made
or taken by Holders or Owners may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders or Owners in
person or by an agent duly appointed in writing; and, except as otherwise
expressly provided herein, such action shall become effective when such
instrument or instruments are delivered to the Property Trustee. Such instrument
or instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the
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"Act" of the Holders or Owners signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Trust Agreement and (subject to Section
8.1) conclusive in favor of the Trustees, if made in the manner provided in this
Section.
The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness to such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which any Trustee receiving the same deems sufficient.
The ownership of Capital Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Trust Security shall bind every future Holder
of the same Trust Security and the Holder of every Trust Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustees or
the Trust in reliance thereon, whether or not notation of such action is made
upon such Trust Security.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Trust Security may do so with
regard to all or any part of the Liquidation Amount of such Trust Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such liquidation amount.
If any dispute shall arise between the Holders and the Administrators
or among such Holders or Trustees with respect to the authenticity, validity or
binding nature of any request, demand, authorization, direction, consent, waiver
or other Act of such Holder or Trustee under this Article VI, then the
determination of such matter by the Property Trustee shall be conclusive with
respect to such matter.
SECTION 6.9. Inspection of Records.
Upon reasonable notice to the Administrators and the Property Trustee,
the records of the Trust shall be open to inspection by Holders during normal
business hours for any purpose reasonably related to such Holder's interest as a
Holder.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties of the Property Trustee
and the Delaware Trustee.
The Property Trustee and the Delaware Trustee, each severally on behalf
of and as to itself, hereby represents and warrants for the benefit of the
Depositor and the Holders that:
(a) the Property Trustee is a banking corporation, duly
organized, validly existing and in good standing under the laws of the
State of Delaware;
(b) the Property Trustee has full corporate power, authority
and legal right to execute, deliver and perform its obligations under
this Trust Agreement and has taken all necessary action to authorize
the execution, delivery and performance by it of this Trust Agreement;
(c) the Delaware Trustee is a banking corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware;
(d) the Delaware Trustee has full corporate power, authority
and legal right to execute, deliver and perform its obligations under
this Trust Agreement and has taken all necessary action to authorize
the execution, delivery and performance by it of this Trust Agreement;
(e) this Trust Agreement has been duly authorized, executed
and delivered by the Property Trustee and the Delaware Trustee and
constitutes the valid and legally binding agreement of each of the
Property Trustee and the Delaware Trustee enforceable against each of
them in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to
general equity principles;
(f) the execution, delivery and performance of this Trust
Agreement has been duly authorized by all necessary corporate or other
action on the part of the Property Trustee and the Delaware Trustee and
does not require any approval of stockholders of the Property Trustee
or the Delaware Trustee and such execution, delivery and performance
will not (i) violate the Charter or By-laws of the Property Trustee or
the Delaware Trustee, (ii) violate any provision of, or constitute,
with or without notice or lapse of time, a default under, or result in
the creation or imposition of, any Lien on any properties included in
the Trust Property pursuant to the provisions of, any indenture,
mortgage, credit agreement, license or other agreement or instrument to
which the Property Trustee or the Delaware Trustee is a party or by
which it is bound, or (iii) violate any law,
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governmental rule or regulation of the United States or the State of
Delaware, as the case may be, governing the banking, trust or general
powers of the Property Trustee or the Delaware Trustee (as appropriate
in context) or any order, judgment or decree applicable to the Property
Trustee or the Delaware Trustee;
(g) neither the authorization, execution or delivery by the
Property Trustee or the Delaware Trustee of this Trust Agreement nor
the consummation of any of the transactions by the Property Trustee or
the Delaware Trustee (as appropriate in context) contemplated herein
requires the consent or approval of, the giving of notice to, the
registration with or the taking of any other action with respect to any
governmental authority or agency under any existing federal law
governing the banking, trust or general powers of the Property Trustee
or the Delaware Trustee, as the case may be, under the laws of the
United States or the State of Delaware;
(h) there are no proceedings pending or, to the best of each
of the Property Trustee's and the Delaware Trustee's knowledge,
threatened against or affecting the Property Trustee or the Delaware
Trustee in any court or before any governmental authority, agency or
arbitration board or tribunal which, individually or in the aggregate,
would materially and adversely affect the Trust or would question the
right, power and authority of the Property Trustee or the Delaware
Trustee, as the case may be, to enter into or perform its obligations
as one of the Trustees under this Trust Agreement.
SECTION 7.2. Representations and Warranties of Depositor.
The Depositor hereby represents and warrants for the benefit of the
Holders that the Trust Securities Certificates issued on the Closing Date on
behalf of the Trust have been duly authorized and will have been, duly and
validly executed, issued and delivered by the Administrators pursuant to the
terms and provisions of, and in accordance with the requirements of, this Trust
Agreement and the Holders will be, as of each such date, entitled to the
benefits of this Trust Agreement.
ARTICLE VIII
THE TRUSTEES; THE ADMINISTRATORS
SECTION 8.1. Certain Duties and Responsibilities.
(a) The duties and responsibilities of the Trustees and Administrators
shall be as provided by this Trust Agreement and, in the case of the Property
Trustee, by the Trust Indenture Act. Notwithstanding the foregoing, no provision
of this Trust Agreement shall require the Trustees or the Administrators to
expend or risk their own funds or otherwise to incur any financial liability in
the performance of any of their duties hereunder, or in the exercise of any of
their
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rights or powers, if they shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it. Whether or not therein expressly so provided,
every provision of this Trust Agreement relating to the conduct or affecting the
liability of this Section of or affording protection to the Trustees or the
Administrators shall be subject to the provisions of this Section 8.1.
(b) No provision in this Trust Agreement shall be construed to release
an Administrator from liability for his own gross negligent action, his own
gross negligent failure to act, or his own willful misconduct. To the extent
that, at law or in equity, an Administrator has duties (including fiduciary
duties) to the Trust or to the Holders, and liabilities relating thereto, such
Administrator shall not be liable to the Trust or to any Holder for such
Trustee's good faith reliance on the provisions of this Trust Agreement. The
provisions of this Trust Agreement, to the extent that they restrict the duties
and liabilities of the Administrators otherwise existing at law or in equity,
are agreed by the Depositor and the Holders to replace such other duties and
liabilities of the Administrators.
(c) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and proceeds
from the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Property Trustee or a
Paying Agent to make payments in accordance with the terms hereof. Each Holder,
by its acceptance of a Trust Security, agrees that it will look solely to the
revenue and proceeds from the Trust Property to the extent legally available for
distribution to it as herein provided and that the Trustees are not personally
liable to it for any amount distributable in respect of any Trust Security or
for any other liability in respect of any Trust Security. This Section 8.1(c)
does not limit the liability of the Trustees expressly set forth elsewhere in
this Trust Agreement or, in the case of the Property Trustee, in the Trust
Indenture Act.
(d) No provision of this Trust Agreement shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(ii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
majority in Liquidation Amount of the Trust Securities relating to the
time, method and place of conducting any proceeding for any remedy
available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under this Trust Agreement;
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(iii) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and
the Payment Account shall be to deal with such property in a similar
manner as the Property Trustee deals with similar property for its own
account, subject to the protections and limitations on liability
afforded to the Property Trustee under this Trust Agreement and the
Trust Indenture Act;
(iv) the Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Depositor; and money held by the Property Trustee need not be
segregated from other funds held by it except in relation to the
Payment Account maintained by the Property Trustee pursuant to Section
3.1 and except to the extent otherwise required by law; and
(v) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrators or the Depositor with
their respective duties under this Trust Agreement, nor shall the
Property Trustee be liable for the default or misconduct of the
Administrators or the Depositor.
SECTION 8.2. Certain Notices.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit, in
the manner and to the extent provided in Section 10.8, notice of such Event of
Default to the Holders, the Administrators and the Depositor, unless such Event
of Default shall have been cured or waived.
Within five Business Days after the receipt of notice of the
Depositor's exercise of its right to defer the payment of interest on the
Debentures pursuant to the Indenture, the Property Trustee shall transmit, in
the manner and to the extent provided in Section 10.8, notice of such exercise
to the Holders, unless such exercise shall have been revoked.
SECTION 8.3. Certain Rights of Property Trustee.
Subject to the provisions of Section 8.1:
(a) the Property Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any resolution,
Opinion of Counsel, certificate, written representation of a Holder or
transferee, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond, debenture, note, other evidence of indebtedness
or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) if (i) in performing its duties under this Trust Agreement
the Property Trustee is required to decide between alternative courses
of action or (ii) in construing any of the provisions of this Trust
Agreement the Property Trustee finds the same ambiguous or
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inconsistent with any other provisions contained herein or (iii) the
Property Trustee is unsure of the application of any provision of this
Trust Agreement, then, except as to any matter as to which the Capital
Securities Holders are entitled to vote under the terms of this Trust
Agreement, the Property Trustee shall deliver a notice to the Depositor
requesting the Depositor's direction as to the course of action to be
taken and, if not so directed, the Property Trustee shall take such
action, or refrain from taking such action, as the Property Trustee
shall deem advisable and in the best interests of the Holders, in which
event the Property Trustee shall have no liability except for its own
bad faith, negligence or willful misconduct;
(c) any direction or act of the Depositor or the
Administrators contemplated by this Trust Agreement shall be
sufficiently evidenced by an Officers' Certificate;
(d) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or reregistration
thereof;
(e) the Property Trustee may consult with counsel (which
counsel may be counsel to the Depositor or any of its Affiliates, and
may include any of its employees) and the advice of such counsel shall
be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon and in accordance with such advice; the Property
Trustee shall have the right at any time to seek instructions
concerning the administration of this Trust Agreement from any court of
competent jurisdiction;
(f) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust
Agreement at the request or direction of any of the Holders pursuant to
this Trust Agreement, unless such Holders shall have offered to the
Property Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(g) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond, debenture, note or other evidence of
indebtedness or other paper or document, unless requested in writing to
do so by one or more Holders, but the Property Trustee may make such
further inquiry or investigation into such facts or matters as it may
see fit;
(h) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, provided that the Property Trustee
shall be responsible for its own negligence or recklessness with
respect to selection of any agent or attorney appointed by it
hereunder;
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(i) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder the Property Trustee (i) may request instructions from the
Holders of the Trust Securities which instructions may only be given by
the Holders of the same proportion in Liquidation Amount of the Trust
Securities as would be entitled to direct the Property Trustee under
the terms of the Trust Securities in respect of such remedy, right or
action, (ii) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and (iii) shall
be protected in acting in accordance with such instructions; and
(j) except as otherwise expressly provided by this Trust
Agreement, the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Trust Agreement.
No provision of this Trust Agreement shall be deemed to impose any duty
or obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
SECTION 8.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Trust, and the Trustees do not assume
any responsibility for their correctness. The Trustees shall not be accountable
for the use or application by the Depositor of the proceeds of the Debentures.
SECTION 8.5. May Hold Securities.
Any Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee of Trust
Securities and, subject to Sections 8.8 and 8.13 and except as provided in the
definition of the term "Outstanding" in Article I, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.
SECTION 8.6. Compensation; Indemnity; Fees.
The Depositor agrees:
(a) to pay to the Trustees from time to time reasonable
compensation for all services rendered by them hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
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(b) except as otherwise expressly provided herein, to
reimburse the Trustees upon request for all reasonable expenses,
disbursements and advances incurred or made by the Trustees in
accordance with any provision of this Trust Agreement (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(c) to the fullest extent permitted by applicable law, to
indemnify and hold harmless (i) each Trustee, (ii) any Affiliate of any
Trustee, (iii) any officer, director, shareholder, employee,
representative or agent of any Trustee, and (iv) any employee or agent
of the Trust or its Affiliates, (referred to herein as an "Indemnified
Person") from and against any loss, damage, liability, tax, penalty,
expense or claim of any kind or nature whatsoever incurred by such
Indemnified Person by reason of the creation, operation or termination
of the Trust or any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner
such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified Person by this Trust Agreement,
except that no Indemnified Person shall be entitled to be indemnified
pursuant to this Section 8.6 in respect of any loss, damage or claim
incurred by such Indemnified Person by reason of negligence or willful
misconduct with respect to such acts or omissions.
The provisions of this Section 8.6 shall survive the termination of
this Trust Agreement.
No Trustee may claim any lien or charge on any Trust Property as a
result of any amount due pursuant to this Section 8.6.
The Depositor, any Administrator and any Trustee (in the case of the
Property Trustee, subject to Section 8.8) may engage in or possess an interest
in other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust and
the Holders of Trust Securities shall have no rights by virtue of this Trust
Agreement in and to such independent ventures or the income or profits derived
therefrom, and the pursuit of any such venture, even if competitive with the
business of the Trust, shall not be deemed wrongful or improper. Neither the
Depositor, any Administrator nor any Trustee, shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and the Depositor, any Administrator or any Trustee shall have the right to take
for its own account (individually or as a partner or fiduciary) or to recommend
to others any such particular investment or other opportunity. Any Trustee may
engage or be interested in any financial or other transaction with the Depositor
or any Affiliate of the Depositor, or may act as depository for, trustee or
agent for, or act on any committee or body of holders of, securities or other
obligations of the Depositor or its Affiliates.
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SECTION 8.7. Corporate Property Trustee Required; Eligibility of
Trustees and Administrators.
(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person that is
a national or state chartered bank and eligible pursuant to the Trust Indenture
Act to act as such and has a combined capital and surplus of at least
$50,000,000. If any such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of its supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Property Trustee with respect to the Trust Securities shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article. At the time of appointment, the Property Trustee must have securities
rated in one of the three highest rating categories by a nationally recognized
statistical rating organization.
(b) There shall at all times be one or more Administrators hereunder
with respect to the Trust Securities. Each Administrator shall be either a
natural person who is at least 21 years of age or a legal entity that shall act
through one or more persons authorized to bind that entity.
(c) There shall at all times be a Delaware Trustee with respect to the
Trust Securities. The Delaware Trustee shall either be (i) a natural person who
is at least 21 years of age and a resident of the State of Delaware or (ii) a
legal entity with its principal place of business in the State of Delaware and
that otherwise meets the requirements of applicable Delaware law that shall act
through one or more persons authorized to bind such entity.
SECTION 8.8. Conflicting Interests.
If the Property Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Property Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Trust
Agreement.
SECTION 8.9. Co-Trustees and Separate Trustee.
Unless an Event of Default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Property Trustee shall have power to
appoint, and upon the written request of the Property Trustee, the Depositor and
the Administrators shall for such purpose join in the execution, delivery, and
performance of all instruments and agreements necessary or proper to appoint,
one or more Persons approved by the Property Trustee either to act as
co-trustee, jointly with the Property Trustee, of all or any part of such Trust
Property, or to the extent required by law to act as separate trustee of any
such
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property, in either case with such powers as may be provided in the instrument
of appointment, and to vest in such Person or Persons in the capacity aforesaid,
any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section. Any co-trustee or separate trustee
appointed pursuant to this Section shall either be (i) a natural person who is
at least 21 years of age and a resident of the United States or (ii) a legal
entity with its principal place of business in the United States that shall act
through one or more persons authorized to bind such entity.
Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
(a) The Trust Securities shall be executed and delivered and
all rights, powers, duties, and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustees specified
hereunder shall be exercised solely by such Trustees and not by such
co-trustee or separate trustee.
(b) The rights, powers, duties, and obligations hereby
conferred or imposed upon the Property Trustee in respect of any
property covered by such appointment shall be conferred or imposed upon
and exercised or performed by the Property Trustee or by the Property
Trustee and such co-trustee or separate trustee jointly, as shall be
provided in the instrument appointing such co-trustee or separate
trustee, except to the extent that under any law of any jurisdiction in
which any particular act is to be performed, the Property Trustee shall
be incompetent or unqualified to perform such act, in which event such
rights, powers, duties and obligations shall be exercised and performed
by such co-trustee or separate trustee.
(c) The Property Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the Depositor,
may accept the resignation of or remove any co-trustee or separate
trustee appointed under this Section, and, in case a Debenture Event of
Default has occurred and is continuing, the Property Trustee shall have
power to accept the resignation of, or remove, any such co-trustee or
separate trustee without the concurrence of the Depositor. Upon the
written request of the Property Trustee, the Depositor shall join with
the Property Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate
trustee so resigned or removed may be appointed in the manner provided
in this Section.
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(d) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Property
Trustee or any other trustee hereunder.
(e) The Property Trustee shall not be liable by reason of any
act of a co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall
be deemed to have been delivered to each such co-trustee and separate
trustee.
SECTION 8.10. Resignation and Removal; Appointment of Successor.
No resignation or removal of any Trustee (the "Relevant Trustee") and
no appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.11.
Subject to the immediately preceding paragraph, the Relevant Trustee
may resign at any time by giving written notice thereof to the Holders and by
appointing a successor Relevant Trustee. The Relevant Trustee shall appoint a
successor by requesting from at least three Persons meeting the eligibility
requirements, its expenses and charges to serve as the Relevant Trustee on a
form provided by the Administrators, and selecting the Person who agrees to the
lowest expenses and charges. If the instrument of acceptance by the successor
Trustee required by Section 8.11 shall not have been delivered to the Relevant
Trustee within 60 days after the giving of such notice of resignation, the
Relevant Trustee may petition, at the expense of the Trust, any court of
competent jurisdiction for the appointment of a successor Relevant Trustee.
The Property Trustee or the Delaware Trustee, or both of them, may be
removed by Act of the Holders of a majority in Liquidation Amount of the Capital
Securities, delivered to the Relevant Trustee (in its individual capacity and on
behalf of the Trust) (i) upon the occurrence of an Event of Default described in
subparagraph (d) of the definition thereof with respect to the Relevant Trustee
or (ii) if a Debenture Event of Default shall have occurred and be continuing at
any time.
If any Trustee shall resign, be removed or become incapable of acting
as Trustee, or if a vacancy shall occur in the office of any Trustee for any
cause, the Holders of the Capital Securities, by Act of the Holders of a
majority in Liquidation Amount of the Capital Securities then Outstanding
delivered to the retiring Relevant Trustee, shall promptly appoint a successor
Relevant Trustee or Trustees, and such successor Trustee shall comply with the
applicable requirements of Section 8.11. If no successor Relevant Trustee shall
have been so appointed by the Holder of the Common Securities or the Holders of
the Capital Securities and accepted appointment in the manner required by
Section 8.11, any Holder who has been a Holder of Trust Securities for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Relevant
Trustee.
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The Property Trustee shall give notice of each resignation and each
removal of a Trustee and each appointment of a successor Trustee to all Holders
in the manner provided in Section 10.8 and shall give notice to the Depositor.
Each notice shall include the name of the successor Relevant Trustee and the
address of its Corporate Trust Office if it is the Property Trustee.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrator or a Delaware Trustee who is a natural
person dies or becomes, in the opinion of the Holder of Common Securities,
incompetent or incapacitated, the vacancy created by such death, incompetence or
incapacity may be filled by (a) in the case of an Administrator, the unanimous
act of the remaining Administrators if there are at least two of them and (b) in
the case of the Delaware Trustee, the Property Trustee following the procedures
regarding expenses and charges set forth above (with the successor in each case
being a Person who satisfies the eligibility requirement for Administrators or
Delaware Trustee, as the case may be, set forth in Section 8.7).
SECTION 8.11. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Relevant Trustee,
the retiring Relevant Trustee and each successor Relevant Trustee with respect
to the Trust Securities shall execute and deliver an amendment hereto wherein
each successor Relevant Trustee shall accept such appointment and which (a)
shall contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Trust Securities and the Trust and (b) shall add to or change any of the
provisions of this Trust Agreement as shall be necessary to provide for or
facilitate the administration of the Trust by more than one Relevant Trustee, it
being understood that nothing herein or in such amendment shall constitute such
Relevant Trustees co-trustees. Upon the execution and delivery of such
amendment, the resignation or removal of the retiring Relevant Trustee shall
become effective to the extent provided therein and each such successor Relevant
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Relevant Trustee; but,
on request of the Trust or any successor Relevant Trustee such retiring Relevant
Trustee shall duly assign, transfer and deliver to such successor Relevant
Trustee all Trust Property, all proceeds thereof and money held by such retiring
Relevant Trustee hereunder with respect to the Trust Securities and the Trust.
Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all such rights, powers and trusts
referred to in the first or second preceding paragraph, as the case may be.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article.
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SECTION 8.12. Merger, Conversion, Consolidation or Succession to
Business.
Any Person into which the Property Trustee or the Delaware Trustee may
be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Relevant
Trustee shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of such Relevant Trustee, shall be the successor of
such Relevant Trustee hereunder, provided such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto.
SECTION 8.13. Preferential Collection of Claims Against Depositor or
Trust.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or any other obligor upon the
Trust Securities or the property of the Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Trust Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any Distributions
owing and unpaid in respect of the Trust Securities and to file such other
papers or documents as may be necessary or advisable in order to have the claims
of the Property Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Property Trustee, its agents and
counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement adjustment or compensation affecting the
Trust Securities or the rights of any Holder thereof or to authorize the
Property Trustee to vote in respect of the claim of any Holder in any such
proceeding.
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SECTION 8.14. Reports by Property Trustee.
(a) Not later than June 1 of each year commencing with June 1, 1997,
the Property Trustee shall transmit to all Holders in accordance with Section
10.8, and to the Depositor, a brief report dated as of the immediately preceding
December 31 with respect to:
(i) its eligibility under Section 8.7 or, in lieu thereof, if
to the best of its knowledge it has continued to be eligible under said
Section, a written statement to such effect;
(ii) a statement that the Property Trustee has complied with
all of its obligations under this Trust Agreement during the
twelve-month period (or, in the case of the initial report, the period
since the Closing Date) ending with such December 31 or, if the
Property Trustee has not complied in any material respect with such
obligations, a description of such noncompliance; and
(iii) any change in the property and funds in its possession
as Property Trustee since the date of its last report and any action
taken by the Property Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Trust Securities.
(b) In addition the Property Trustee shall transmit to Holders such
reports concerning the Property Trustee and its actions under this Trust
Agreement as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Property Trustee with each national stock exchange,
the Nasdaq National Market or such other interdealer quotation system or
self-regulatory organization upon which the Trust Securities are listed or
traded, with the Commission and with the Depositor.
SECTION 8.15. Reports to the Property Trustee.
The Depositor and the Administrators on behalf of the Trust shall
provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust Indenture
Act.
SECTION 8.16. Evidence of Compliance with Conditions Precedent.
Each of the Depositor and the Administrators on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust Agreement that relate
to any of the matters set forth in Section 314 (c) of the
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Trust Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) of the Trust Indenture Act shall be given
in the form of an Officers' Certificate.
SECTION 8.17. Number of Trustees.
(a) The number of Trustees shall be two. The Property Trustee and the
Delaware Trustee may be the same Person.
(b) If a Trustee ceases to hold office for any reason, or if the number
of Trustees is increased pursuant to Section 8.17(a), a vacancy shall occur. The
vacancy shall be filled with a Trustee appointed in accordance with Section
8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to dissolve, terminate or annul the Trust.
SECTION 8.18. Delegation of Power.
(a) Any Administrator may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
2.7(a), including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) The Administrators shall have power to delegate from time to time
to such of their number or to the Depositor the doing of such things and the
execution of such instruments either in the name of the Trust or the names of
the Administrators or otherwise as the Administrators may deem expedient, to the
extent such delegation is not prohibited by applicable law or contrary to the
provisions of this Trust Agreement, as set forth herein.
SECTION 8.19. Appointment of Administrators.
(a) The Administrators shall be appointed by the Holder of the Common
Securities and may be removed by the Holder of the Common Securities at any
time. Each Administrator shall sign an agreement agreeing to comply with the
terms of this Trust Agreement. If at any time there is no Administrator, the
Property Trustee or any Holder who has been a Holder of Trust Securities for at
least six months may petition any court of competent jurisdiction for the
appointment of one or more Administrator.
(b) Whenever a vacancy in the number of Administrators shall occur,
until such vacancy is filled by the appointment of an Administrator in
accordance with this Section 8.19, the Administrators in office, regardless of
their number (and notwithstanding any other provision of this Trust Agreement),
shall have all the powers granted to the Administrators and shall discharge all
the duties imposed upon the Administrators by this Trust Agreement.
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Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrator or a Delaware Trustee who is a natural
person dies or becomes, in the opinion of the holder of Common Securities,
incompetent or incapacitated, the vacancy created by such death, incompetence or
incapacity may be filled by (a) in the case of an Administrator the unanimous
act of the remaining Administrators if there are at least two of them and (b) in
the case of the Delaware Trustee, the Property Trustee following the procedures
regarding expenses and charges set forth above (with the successor in each case
being a Person who satisfies the eligibility requirement for Administrators or
Delaware Trustee, as the case may be, set forth in Section 8.7).
ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
SECTION 9.1. Termination Upon Expiration Date.
Unless earlier terminated, the Trust shall automatically terminate on
January 1, 2028 (the "Expiration Date"), following the distribution of the Trust
Property in accordance with Section 9.4.
SECTION 9.2. Early Termination.
The first to occur of any of the following events is an "Early
Termination Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the holder of the Common Securities;
(b) the written direction to the Property Trustee from the
Holder of the Common Securities at any time to terminate the Trust and,
after satisfaction of liabilities to creditors of the Trust in
accordance with applicable law and the Expense Agreement, distribute
Debentures to Holders in exchange for the Capital Securities; provided,
however, that the Property Trustee shall have first received an Opinion
of Counsel to the effect that such distribution will not be a taxable
event to the Holders of Capital Securities;
(c) the redemption of all of the Capital Securities in
connection with the redemption of all the Debentures; and
(d) the entry of an order for dissolution of the Trust by a
court of competent jurisdiction.
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SECTION 9.3. Termination.
The respective obligations and responsibilities of the Trustees and the
Trust shall terminate upon the latest to occur of the following:
(a) the distribution by the Property Trustee to Holders upon
the liquidation of the Trust pursuant to Section 9.4, or upon the
redemption of all of the Trust Securities pursuant to Section 4.2, of
all amounts required to be distributed hereunder upon the final payment
of the Trust Securities;
(b) the payment of any expenses owed by the Trust; and
(c) the discharge of all administrative duties of the
Administrators, including the performance of any tax reporting
obligations with respect to the Trust or the Holders.
SECTION 9.4. Liquidation.
(a) If an Early Termination Event specified in clause (a), (b) or (d)
of Section 9.2 occurs, or upon the Expiration Date, the Trust shall be
liquidated by the Trustees as expeditiously as the Trustees determine to be
possible by distributing, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, to each Holder a Like Amount of Debentures,
subject to Section 9.4(d). Notice of liquidation shall be given by the Property
Trustee by first-class mail, postage prepaid mailed not later than 30 nor more
than 60 days prior to the Liquidation Date to each Holder of Trust Securities at
such Holder's address appearing in the Securities Register. All notices of
liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(iii) provide such information with respect to the mechanics
by which Holders may exchange Trust Securities Certificates for
Debentures, or if Section 9.4(d) applies receive a Liquidation
Distribution, as the Property Trustee (after consultation with the
Administrators) shall deem appropriate.
(b) Unless Section 9.2(c) or 9.4(d) applies, in order to effect the
liquidation of the Trust and the distribution of Debentures to Holders, the
Property Trustee shall establish a record date for such distribution (which
shall be not more than 45 days prior to the Liquidation Date) and, either itself
acting as exchange agent or through the appointment of a separate exchange
agent, shall establish such procedures as it shall deem appropriate to effect
the distribution of Debentures in exchange for the Outstanding Trust Securities
Certificates.
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(c) Unless Section 9.2(c) or 9.4(d) applies, after the Liquidation
Date, (i) the Trust Securities will no longer be deemed to be Outstanding, (ii)
certificates representing a Like Amount of Debentures will be issued to Holders
of Trust Securities Certificates, upon surrender of such certificates to the
exchange agent for exchange, (iii) the Depositor shall use its reasonable best
efforts to have the Debentures listed on the New York Stock Exchange or on such
other exchange, interdealer quotation system or self-regulatory organization as
the Capital Securities are then listed, (iv) any Trust Securities Certificates
not so surrendered for exchange will be deemed to represent a Like Amount of
Debentures, accruing interest at the rate provided for in the Debentures from
the last Distribution Date on which a Distribution was made on such Trust
Securities Certificates until such certificates are so surrendered (and until
such certificates are so surrendered, no payments of interest or principal will
be made to Holders of Trust Securities Certificates with respect to such
Debentures) and (v) all rights of Holders holding Trust Securities will cease,
except the right of such Holders to receive Debentures upon surrender of Trust
Securities Certificates.
(d) If, notwithstanding the other provisions of this Section 9.4,
whether because of an order for dissolution entered by a court of competent
jurisdiction or otherwise, distribution of the Debentures in the manner provided
herein is determined by the Property Trustee not to be practical, then the Trust
Property shall be liquidated, and the Trust shall be dissolved, wound up or
terminated, by the Property Trustee in such manner as the Property Trustee
determines. In such event, on the date of the dissolution, winding up or other
termination of the Trust, Holders will be entitled to receive out of the assets
of the Trust available for distribution to Holders, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, an amount
equal to the Liquidation Amount per Trust Security plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"). If, upon any such dissolution, winding up or termination, the
Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then, subject to the next succeeding sentence, the amounts payable
by the Trust on the Trust Securities shall be paid pro rata based upon
Liquidation Amounts. The Holder of the Outstanding Common Securities will be
entitled to receive Liquidation Distributions upon any such dissolution, winding
up or termination pro rata, based upon Liquidation Amounts, with Holders of
Capital Securities, except that, if any Debenture Event of Default shall have
occurred and be continuing at the time of payment of the Liquidation
Distribution, the Capital Securities shall have a priority over the Common
Securities with respect to payment of any amount of Liquidation Distribution.
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements of
the Trust.
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, except pursuant to this Article IX.
At the request of the Holder of the Common Securities, with the consent of the
Holders of a majority (based on Liquidation Amounts) of the Capital Securities,
the Property Trustee or the Delaware Trustee, the Trust may merge with or into,
consolidate,
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amalgamate, or be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to a trust organized as such under the laws
of any State; provided, that (i) such successor entity either (a) expressly
assumes all of the obligations of 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 ("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 Property Trustee expressly appoints a trustee
of such successor entity possessing the same powers and duties as the Property
Trustee as the holder of the Debentures, (iii) the Successor Securities are
listed or traded, 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 or traded, if any, (iv) such merger,
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, 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 substantially
identical to that of the Trust, (vii) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Depositor has
received an Opinion of Counsel to the effect that (a) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the Holders of the
Capital Securities (including any Successor Securities) in any material respect,
and (b) following such merger, 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 1940 Act and (viii)
the Depositor 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 all
Outstanding Capital Securities, consolidate, amalgamate, merge with or into, or
be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to any other Person or permit any other Person to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the Trust or the successor Person to be classified as an association
taxable as a corporation or as other than a grantor trust for United States
federal income tax purposes.
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ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Limitation of Rights of Holders.
The death or incapacity, or the dissolution, liquidation, termination,
or the bankruptcy of any Person having an interest, beneficial or otherwise, in
Trust Securities shall not operate to terminate this Trust Agreement, nor
entitle the legal representatives, successors or heirs of such person or any
Holder for such person, to claim an accounting, take any action or bring any
proceeding in any court for a partition or winding up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
SECTION 10.2. Amendment.
(a) This Trust Agreement may be amended from time to time by the
Property Trustee and the holder of the Common Securities without the consent of
any Holders, (i) to cure any ambiguity, correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions arising under this Trust
Agreement, which shall not be inconsistent with the other provisions of this
Trust Agreement, or (ii) to modify, eliminate or add to any provisions of this
Trust Agreement to such extent as shall be necessary to ensure that the Trust
will not be classified for United States federal income tax purposes as an
association taxable as a corporation or as other than a grantor trust at any
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 1940 Act;
provided, however, that such action shall not adversely affect in any material
respect the interests of any Holder, and any amendments of this Trust Agreement
shall become effective when notice thereof is given to the Holders.
(b) Except as provided in Section 10.2(c) hereof, any provision of this
Trust Agreement may be amended by the Trustees and the Holders of Common
Securities and with (i) the consent of Trust Holders representing not less than
a majority Liquidation Amount of the Outstanding Trust Securities and (ii)
receipt by the Trustees of an Opinion of Counsel to the effect that such
amendment or the exercise of any power granted to the Trustees in accordance
with such amendment will not affect the Trust's status as a grantor trust or
cause the Trust to be an association taxable as a corporation for United States
federal income tax purposes or the Trust's exemption from status of an
investment company under the 1940 Act.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Holder (such consent being
obtained in accordance with Section 6.3 or 6.6 hereof), this Trust Agreement may
not be amended to (i) change the amount or timing of any Distribution or
otherwise adversely affect the amount of any Distribution required to be made as
of a specified date or (ii) restrict the right of a Holder to institute suit for
the enforcement of any such payment on or after such date; notwithstanding any
other provision
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herein, without the unanimous consent of the Holders (such consent being
obtained in accordance with Section 6.3 or 6.6 hereof), this paragraph (c) of
this Section 10.2 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to be classified as an association taxable as a
corporation or not to be a grantor trust for United States federal income tax
purposes or to fail or cease to qualify for the exemption from status of an
investment company under the 1940 Act.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor, this Trust Agreement may not be amended in
a manner which imposes any additional obligation or liability on the Depositor.
(f) If any amendment to this Trust Agreement is made, the
Administrators or the Property Trustee shall promptly provide to the Depositor a
copy of such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Trust Agreement which affects its
own rights, duties or immunities under this Trust Agreement. The Property
Trustee shall be entitled to receive an Opinion of Counsel and an Officers'
Certificate stating that any amendment to this Trust Agreement is in compliance
with this Trust Agreement.
SECTION 10.3. Separability.
If any provision in this Trust Agreement or in the Trust Securities
Certificates shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 10.4. Governing Law.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
HOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT AND THE
TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF DELAWARE.
SECTION 10.5. Payments Due on Non-Business Day.
If the date fixed for any payment on any Trust Security shall be a day
that is not a Business Day, then such payment need not be made on such date but
may be made on the next succeeding day that is a Business Day (except as
otherwise provided in Sections 4.1(a) and 4.2(d)), with the same force and
effect as though made on the date fixed for such payment, and no interest shall
accrue thereon for the period after such date.
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SECTION 10.6. Successors.
This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Trust or the Relevant Trustee,
including any successor by operation of law. Except in connection with a
consolidation, merger or sale involving the Depositor that is permitted under
Article Eight of the Indenture and pursuant to which the assignee agrees in
writing to perform the Depositor's obligations hereunder, the Depositor shall
not assign its obligations hereunder (any purported assignment in contravention
of this Section 10.6 being null and void).
SECTION 10.7. Headings.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
SECTION 10.8. Reports, Notices and Demands.
Any report, notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be given or served
to or upon any Holder or the Depositor may be given or served in writing by
deposit thereof, first-class postage prepaid, in the United States mail, hand
delivery or facsimile transmission, in each case, addressed, (a) in the case of
a Holder of Capital Securities, to such Holder as such Holder's name and address
may appear on the Securities Register; and (b) in the case of the Holder of the
Common Securities or the Depositor, to First Union Corporation, One First Union
Center, Charlotte, North Carolina 28288- 0013, Attention: General Counsel,
facsimile no.: (704) 374-3425. Such notice, demand or other communication to or
upon a Holder shall be deemed to have been sufficiently given or made, for all
purposes, upon hand delivery, mailing or transmission.
Any notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
the Trust, the Property Trustee, the Delaware Trustee or the Administrators
shall be given in writing addressed (until another address is published by the
Trust) as follows: (a) with respect to the Property Trustee to Wilmington Trust
Company, Rodney Square North, 1100 North Market Square, Wilmington, Delaware
19890-0001, Attention: Corporate Trust Administration; (b) with respect to the
Delaware Trustee, to Wilmington Trust Company, Rodney Square North, 1100 North
Market Square, Wilmington, Delaware 19890-0001; and (c) with respect to the
Administrators, to them at the address above for notices to the Depositor,
marked "Attention Administrators of First Union Institutional Capital II." Such
notice, demand or other communication to or upon the Trust or the Property
Trustee shall be deemed to have been sufficiently given or made only upon actual
receipt of the writing by the Trust or the Property Trustee.
SECTION 10.9. Agreement Not to Petition.
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Each of the Trustees and the Depositor agree for the benefit of the
Holders that, until at least one year and one day after the Trust has been
terminated in accordance with Article IX, they shall not file, or join in the
filing of, a petition against the Trust under any bankruptcy, insolvency,
reorganization or other similar law (including, without limitation, the United
States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in
the commencement of any proceeding against the Trust under any Bankruptcy Law.
In the event the Depositor takes action in violation of this Section 10.9, the
Property Trustee agrees, for the benefit of Holders, that at the expense of the
Depositor, it shall file an answer with the bankruptcy court or otherwise
properly contest the filing of such petition by the Depositor against the Trust
or the commencement of such action and raise the defense that the Depositor has
agreed in writing not to take such action and should be stopped and precluded
therefrom and such other defenses, if any, as counsel for the Trustee or the
Trust may assert. The provisions of this Section 10.9 shall survive the
termination of this Trust Agreement.
SECTION 10.10. Application of Trust Indenture Act.
(a) The Trust Indenture Act shall apply as a matter of contract to this
Trust Agreement by purposes of interpretation, construction and defining the
rights and obligations hereunder.
(b) The Property Trustee shall be the only Trustee which is a trustee
for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Trust Agreement by any
of the provisions of the Trust Indenture Act, such required provision shall
control. If any provision of this Trust Agreement modifies or excludes any
provision of the Trust Indenture Act which may be so modified or excluded, the
latter provision shall be deemed to apply to this Trust Agreement as so modified
or excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 10.11. Acceptance of Terms of Trust Agreement, Guarantee and
Indenture.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN
BY OR ON BEHALF OF A HOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR
FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE
BY THE HOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY
OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND AGREEMENT TO THE
SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND THE INDENTURE AND
TO THE TERMS AND PROVISIONS OF THE REGISTRATION RIGHTS
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AGREEMENT, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH HOLDER AND SUCH
OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND THE
REGISTRATION RIGHTS AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS
BETWEEN THE TRUST AND SUCH HOLDER AND SUCH OTHERS.
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IN WITNESS WHEREOF, the undersigned have executed this Amended and
Restated Trust Agreement as of the date first above written.
FIRST UNION CORPORATION
By: \S\ KENT S. HATHAWAY
Name:
Title:
WILMINGTON TRUST COMPANY,
as Property Trustee
By: \S\ EMMETT R. HARMON
Name: Emmett R. Harmon
Title: Vice President
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By: \S\ EMMETT R. HARMON
Name: Emmett R. Harmon
Title: Vice President
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EXHIBIT A
CERTIFICATE OF TRUST
OF
FIRST UNION INSTITUTIONAL CAPITAL II
THIS CERTIFICATE OF TRUST of First Union Institutional Capital II (the
"Trust"), dated as of December 27, 1996, is being duly executed and filed by the
undersigned, as trustee, to form a business trust under the Delaware Business
Trust Act (12 Del. C. ss. 3801 et seq.).
1. Name. The name of the business trust being formed hereby is First
Union Institutional Capital II.
2. Delaware Trustee. The name and business address of the trustee of
the Trust, with a principal place of business in the State of Delaware, are
Wilmington Trust Company, Rodney Square North, 1100 North Market Square,
Wilmington, Delaware 19890-0001, Attention:
Corporate Trust Administration.
3. Effective Date. This Certificate of Trust shall be effective as of
its filing.
IN WITNESS WHEREOF, the undersigned, being the trustee of the Trust,
have executed this Certificate of Trust as of the date first above written.
WILMINGTON TRUST COMPANY,
not in its individual capacity, but solely
as Trustee
By:
Name:
Title:
<PAGE>
EXHIBIT B
The Depository Trust Company,
55 Water Street, 49th Floor,
New York, New York 10041-0099 January 6, 1997
Attention: General Counsel's Office
Re: First Union Institutional Capital II 7.85% Capital Securities
Ladies and Gentlemen:
The purpose of this letter is to set forth certain matters relating to
the issuance and deposit with The Depository Trust Company ("DTC") of the First
Union Institutional Capital II 7.85% Capital Securities (the "Capital
Securities"), of First Union Institutional Capital II, a Delaware business trust
(the "Issuer"), created and continued pursuant to an Amended and Restated Trust
Agreement between First Union Corporation ("First Union Corporation"),
Wilmington Trust Company, as Property Trustee, and Wilmington Trust Company, as
Delaware Trustee. The payment of distributions on the Capital Securities, and
payments due upon liquidation of Issuer or redemption of the Capital Securities,
to the extent the Issuer has funds available for the payment thereof are
guaranteed by First Union Corporation to the extent set forth in a Guarantee
Agreement dated January 6, 1997 by First Union Corporation with respect to the
Capital Securities. First Union Corporation and the Issuer propose to sell the
Capital Securities to Morgan Stanley & Co. Incorporated (the "Initial
Purchaser") pursuant to a Purchase Agreement dated as of December 27, 1996 by
and among the Initial Purchaser, the Issuer and First Union Corporation, and the
Initial Purchaser wishes to take delivery of the Capital Securities through DTC.
Wilmington Trust Company is acting as transfer agent and registrar with respect
to the Capital Securities (the "Transfer Agent and Registrar").
To induce DTC to accept the Capital Securities as eligible for deposit
at DTC, and to act in accordance with DTC's Rules with respect to the Capital
Securities, the Issuer, the Transfer Agent and Registrar and DTC agree among
each other as follows:
1. Prior to the closing of the sale of the Capital Securities to the
Initial Purchaser, which is expected to occur on January 6, 1997, there shall be
deposited with DTC one or more global certificates (individually and
collectively, the "Global Certificate") registered in the name of DTC's Capital
Securities nominee, Cede & Co., representing an aggregate of 250,000 Capital
Securities and bearing the following legend:
<PAGE>
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to Issuer or its agent for registration
of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and
any payment is made to Cede & Co. or to such other entity as
is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
2. The Amended and Restated Trust Agreement of the Issuer provides for
the voting by holders of the Capital Securities under certain limited
circumstances (with no provision for revocation of consents or votes by
subsequent holders). The Issuer shall establish a record date for such purposes
and shall, to the extent possible, give DTC notice of such record date not less
than 15 calendar days in advance of such record date.
3. In the event of a stock split, conversion, recapitalization,
reorganization or any other similar transaction resulting in the cancellation of
all or any part of the Capital Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DTC a notice of such event at least 5
business days prior to the effective date of such event.
4. In the event of distribution on, or an offering or issuance of
rights with respect to, the Capital Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DTC a notice specifying: (a) the amount
of and conditions, if any, applicable to the payment of any such distribution or
any such offering or issuance of rights; (b) any applicable expiration or
deadline date, or any date by which any action on the part of the holders of
Capital Securities is required; and (c) the date any required notice is to be
mailed by or on behalf of the Issuer to holders of Capital Securities or
published by or on behalf of the Issuer (whether by mail or publication, the
"Publication Date"). Such notice shall be sent to DTC by a secure means (e.g.,
legible telecopy, registered or certified mail, overnight delivery) in a timely
manner designed to assure that such notice is in DTC's possession no later than
the close of business on the business day before the Publication Date. The
Issuer or the Transfer Agent and Registrar will forward such notice either in a
separate secure transmission for each CUSIP number or in a secure transmission
of multiple CUSIP numbers (if applicable) that includes a manifest or list of
each CUSIP number submitted in that transmission. (The party sending such notice
shall have a method to verify subsequently the use of such means and the
timeliness of such notice.) The Publication Date shall be not less than 30
calendar days nor more than 60 calendar days prior to the payment of any such
distribution or any such offering or issuance of rights with respect to the
Capital Securities. After establishing the amount of payment to be made on the
Capital Securities, the Issuer or the Transfer Agent and Registrar will notify
DTC's Dividend Department of such payment 5 business
-2-
<PAGE>
days prior to payment date. Notices to DTC's Dividend Department by telecopy
shall be sent to (212) 709-1723. Such notices by mail or by any other means
shall be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
The Issuer or the Transfer Agent and Registrar shall confirm DTC's
receipt of such telecopy by telephoning the Dividend Department at (212)
709-1270.
5. In the event of a redemption by the Issuer of the Capital
Securities, notice specifying the terms of the redemption and the Publication
Date of such notice shall be sent by the Issuer or the Transfer Agent and
Registrar to DTC not less than 30 calendar days prior to such event by a secure
means in the manner set forth in paragraph 4. Such redemption notice shall be
sent to DTC's Call Notification Department at (516) 227-4164 or (516) 227-4190,
and receipt of such notice shall be confirmed by telephoning (516) 227-4070.
Notice by mail or by any other means shall be sent to:
Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530-4719
6. In the event of any invitation to tender the Capital Securities,
notice specifying the terms of the tender and the Publication Date of such
notice shall be sent by the Issuer or the Transfer Agent and Registrar to DTC by
a secure means and in a timely manner as described in paragraph 4. Notices to
DTC pursuant to this paragraph and notices of other corporate actions (including
mandatory tenders, exchanges and capital changes) shall be sent, unless
notification to another department is expressly provided for herein, by telecopy
to DTC's Reorganization Department at (212) 709-1093 or (212) 709-1094 and
receipt of such notice shall be confirmed by telephoning (212) 709-6884, or by
mail or any other means to:
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
7. All notices and payment advices sent to DTC shall contain the CUSIP
number or numbers of the Capital Securities and the accompanying designation of
the Capital Securities,
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<PAGE>
which, as of the date of this letter, is "First Union Institutional Capital II
7.85% Capital Securities."
8. Distribution payments or other cash payments that are part of
periodic payments with respect to the Capital Securities evidenced by the Global
Certificate shall be received by Cede & Co., as nominee of DTC, or its
registered assigns in same-day funds no later than 2:30 p.m. (Eastern Time) on
each payment date (or in accordance with existing arrangements between the
Issuer or the Transfer Agent and Registrar and DTC). Absent any other
arrangements between the Issuer or the Transfer Agent and Registrar and DTC,
such funds shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Dividend Deposit Account 066-026776
The Issuer or the Transfer Agent and Registrar shall provide payment information
to a standard announcement service subscribed to by DTC. In the unlikely event
that no such service exists, the Issuer agrees that it or the Transfer Agent and
Registrar shall provide this information directly to DTC in advance of the
record date as soon as the information is available. This information should be
conveyed directly to DTC electronically. If electronic transmission is not
available, absent any other arrangements between the Transfer Agent and DTC,
such information should be sent by telecopy to DTC's Dividend Department at
(212) 709-1723 or (212) 709-1686, and receipt of such notices shall be confirmed
by telephoning (212) 709-1270. Notices to DTC pursuant to the above by mail or
by any other means shall be sent to:
Manager; Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square; 22nd Floor
New York, NY 10004-2695
9. DTC shall receive maturity and redemption payments with respect to
the Capital Securities evidenced by the Global Certificate allocated with
respect to each CUSIP number on the payable date in same-day funds by 2:30 p.m.
(Eastern Time). Absent any other arrangements between the Transfer Agent and
Registrar and DTC, such payments shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Redemption Account 066-027306
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<PAGE>
in accordance with existing SDFS payment procedures in the manner set forth in
DTC's SDFS Paying Agent Operating Procedures, a copy of which has previously
been furnished to the Transfer Agent and Registrar.
10. DTC shall receive all reorganization payments and CUSIP-level
detail resulting from corporate actions (such as tender offers, remarketings, or
mergers) on the first payable date in same-day funds by 2:30 p.m. (Eastern
Time). Absent any other arrangements between the Transfer Agent and Registrar
and DTC, such payments shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Reorganization Account 066-027608
11. DTC may by prior written notice direct the Issuer and the Transfer
Agent and Registrar to use any other telecopy number or address of DTC as the
number or address to which notices or payments may be sent.
12. In the event of a conversion, redemption, or any other similar
transaction (e.g., tender made and accepted in response to the Issuer's or the
Transfer Agent and Registrar's invitation) necessitating a reduction in the
aggregate number of Capital Securities outstanding evidenced by Global
Certificates, DTC, in its discretion: (a) may request the Issuer or the Transfer
Agent and Registrar to issue and countersign a new Global Certificate; or (b)
may make an appropriate notation on the Global Certificate indicating the date
and amount of such reduction.
13. DTC may discontinue its services as a securities depositary with
respect to the Capital Securities at any time by giving reasonable notice to the
Issuer and the Transfer Agent and Registrar (at which time DTC will confirm with
the Issuer or the Transfer Agent and Registrar the aggregate number of Capital
Securities deposited with it) and discharging its responsibilities with respect
thereto under applicable law. Under such circumstances, the Issuer may determine
to make alternative arrangements for book-entry settlement for the Capital
Securities, make available one or more separate global certificates evidencing
Capital Securities to any Participant having Capital Securities credited to its
DTC account, or issue definitive Capital Securities to the beneficial holders
thereof, and in any such case, DTC agrees to cooperate fully with the Issuer and
the Transfer Agent and Registrar, and to return the Global Certificate, duly
endorsed for transfer as directed by the Issuer or the Transfer Agent and
Registrar, together with any other documents of transfer reasonably requested by
the Issuer or the Transfer Agent and Registrar.
14. In the event that the Issuer determines that beneficial owners of
Capital Securities shall be able to obtain definitive Capital Securities, the
Issuer or the Transfer Agent and Registrar shall notify DTC of the availability
of certificates. In such event, the Issuer or the Transfer Agent and Registrar
shall issue, transfer and exchange certificates in appropriate amounts, as
required by DTC and others, and DTC agrees to cooperate fully with the Issuer
and the Transfer Agent and
-5-
<PAGE>
Registrar and to return the Global Certificate, duly endorsed for transfer as
directed by the Issuer or the Transfer Agent and Registrar, together with any
other documents of transfer reasonably requested by the Issuer or the Transfer
Agent and Registrar.
15. This letter may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
-6-
<PAGE>
Nothing herein shall be deemed to require the Transfer Agent and
Registrar to advance funds on behalf of First Union Institutional Capital II.
Very truly yours,
FIRST UNION INSTITUTIONAL CAPITAL II
as Issuer
By:
Name:
Administrator
WILMINGTON TRUST COMPANY
as Trustee, Transfer Agent and Registrar
By:
Name:
Title: Vice President
RECEIVED AND ACCEPTED:
THE DEPOSITORY TRUST COMPANY
By:
Authorized Officer
-7-
<PAGE>
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number Number of Common Securities
C- [_________________]
Certificate Evidencing Common Securities
of
First Union Institutional Capital II
7.85% Common Securities
(Liquidation Amount $1,000 per Common Security)
First Union Institutional Capital II, a statutory business trust
created under the laws of the State of Delaware (the "Trust"), hereby certifies
that First Union Corporation, a North Carolina corporation (the "Holder"), is
the registered owner of _____ common securities of the Trust, representing
common undivided beneficial interests in the assets of the Trust and designated
the 7.85% Common Securities (Liquidation Amount $1,000 per Common Security) (the
"Common Securities"). Except as provided in Section 5.10 of the Trust Agreement
(as defined below) the Common Securities are not transferable and any attempted
transfer hereof shall be null and void. The designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities are set forth in, and this certificate and the Common Securities
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Trust Agreement of the Trust, dated
as of January 6, 1997, as the same may be amended from time to time (the "Trust
Agreement"), including the designation of the terms of the Common Securities as
set forth therein. The Trust will furnish a copy of the Trust Agreement to the
Holder without charge upon written request to the Trust at its principal place
of business or registered office.
<PAGE>
By receipt and acceptance of this certificate, the Holder agrees to be
bound by the Trust Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the undersigned Administrator of the Trust has
executed this certificate as of the day of , .
FIRST UNION INSTITUTIONAL CAPITAL II
By:
Name:
Admininstrator
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<PAGE>
EXHIBIT D
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT, dated as of January 6, 1997, between First Union
Corporation, a North Carolina corporation ("the "Corporation"), and First Union
Institutional Capital II, a Delaware business trust (the "Trust").
W I T N E S S E T H :
WHEREAS, the Trust intends to issue its Common Securities (the "Common
Securities") to and receive Debentures from First Union Corporation and to issue
and sell 7.85% Capital Securities (the "Capital Securities") with such powers,
preferences and special rights and restrictions as are set forth in the Amended
and Restated Trust Agreement of the Trust, dated as of January 6, 1997 as the
same may be amended from time to time (the "Trust Agreement"); and
WHEREAS, the Corporation will directly or indirectly own all of the
Common Securities of the Trust and will issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder of the
Capital Securities, which purchase the Corporation hereby agrees shall benefit
the Corporation and which purchase the Corporation acknowledges will be made in
reliance upon the execution and delivery of this Agreement, the Corporation and
Trust hereby agree as follows:
ARTICLE I
SECTION 1.1. Guarantee by the Corporation.
Subject to the terms and conditions hereof, the Corporation hereby
irrevocably and unconditionally guarantees to each person or entity to whom the
Trust is now or hereafter becomes indebted or liable (the "Beneficiaries") the
full payment, when and as due, of any and all Obligations (as hereinafter
defined) to such Beneficiaries. As used herein, "Obligations" means any costs,
expenses or liabilities of the Trust, other than obligations of the Trust to pay
to holders of any Capital Securities or other similar interests in the Trust the
amounts due such holders pursuant to the terms of the Capital Securities or such
other similar interests, as the case may be. This Agreement is intended to be
for the benefit of, and to be enforceable by, all such Beneficiaries, whether or
not such Beneficiaries have received notice hereof.
<PAGE>
SECTION 1.2. Term of Agreement.
This Agreement shall terminate and be of no further force or effect
upon the later of (a) the date on which full payment has been made of all
amounts payable to all holders of all the Capital Securities (whether upon
redemption, liquidation, exchange or otherwise) and (b) the date on which there
are no Beneficiaries remaining; provided, however, that this Agreement shall
continue to be effective or shall be reinstated, as the case may be, if at any
time any holder of Capital Securities or any Beneficiary must restore payment of
any sums paid in respect of the Capital Securities, under any Obligation, under
the Guarantee Agreement dated the date hereof by the Corporation and Wilmington
Trust Company, as guarantee trustee or under this Agreement for any reason
whatsoever.
This Agreement shall be continuing, unconditional and absolute.
SECTION 1.3. Waiver of Notice.
The Corporation hereby waives notice of acceptance of this Agreement
and of any Obligation to which it applies or may apply, and the Corporation
hereby waives presentment, demand for payment, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and demands.
SECTION 1.4. No Impairment.
The obligations, covenants, agreements and duties of the Corporation
under this Agreement shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:
(a) the extension of time for the payment by the Trust of all
or any portion of the Obligations or for the performance of any other
obligation under, arising out of, or in connection with, the
obligations;
(b) any failure, omission, delay or lack of diligence on the
part of the Beneficiaries to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Beneficiaries with respect
to the Obligations or any action on the part of the Trust granting
indulgence or extension of any kind; or
(c) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
affecting, the Trust or any of the assets of the Trust.
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, the Corporation with respect to the happening of any of the
foregoing.
-2-
<PAGE>
SECTION 1.5. Enforcement.
A Beneficiary may enforce this Agreement directly against the
Corporation and the Corporation waives any right or remedy to require that any
action be brought against the Trust or any other person or entity before
proceeding against the Corporation.
SECTION 1.6. Subrogation.
The Corporation shall be subrogated to all (if any) rights of the Trust
in respect of any amounts paid to the Beneficiaries by the Corporation under
this Agreement; provided, however, that the Corporation shall not (except to the
extent required by mandatory provisions of law) be entitled to enforce or
exercise any rights which it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Agreement, if, at the time of any such payment, any amounts are due and unpaid
under this Agreement.
ARTICLE II
SECTION 2.1. Binding Effect.
This Agreement shall bind the successors, assigns, receivers, trustees
and representatives of the Corporation and shall inure to the benefit of the
Beneficiaries.
SECTION 2.2. Amendment.
So long as there shall remain any Beneficiary or any Capital Securities
of any series shall be outstanding, this Agreement may not be modified or
amended in any manner adverse to such Beneficiary or to the holders of the
Capital Securities.
SECTION 2.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be given in writing by delivering the same against receipt
therefor by facsimile transmission
-3-
<PAGE>
(confirmed by mail), telex or by registered or certified mail, addressed as
follows (and if so given, shall be deemed given when mailed or upon receipt of
an answer-back, if sent by telex):
First Union Institutional Capital II
c/o First Union Corporation
One First Union Center
Charlotte, North Carolina 28288-0013
Facsimile No.: (704) 374-3425
Attention: General Counsel
First Union Corporation
One First Union Center
Charlotte, North Carolina 28288-0013
Facsimile No.: (704) 374-3425
Attention: General Counsel
SECTION 2.4. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
FIRST UNION CORPORATION
By:
Name:
Title:
FIRST UNION INSTITUTIONAL CAPITAL II
By:
Name:
Administrator
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<PAGE>
EXHIBIT E
[IF THIS CAPITAL SECURITY IS A RULE 144A CAPITAL SECURITY, THEN
INSERT--The Capital Securities evidenced hereby and any Debentures issuable in
connection therewith have not been registered under the U.S. Securities Act of
1933, as amended (the "Securities Act") and may not be offered, sold, pledged or
otherwise transferred except (A)(i) to a person who the Seller reasonably
believes is a Qualified Institutional Buyer within the meaning of Rule 144A
under the Securities Act acquiring the Capital Securities for its own account or
for the account of a Qualified Institutional Buyer in a transaction meeting the
requirements of Rule 144A, (ii) pursuant to an exemption from registration under
the Securities Act provided by Rule 144 thereunder (if available), (iii)
pursuant to an effective registration statement under the Securities Act, (iv)
in an offshore transaction complying with Rule 903 or Rule 904 of Regulation S
under the Securities Act or (v) to an institution that is an accredited investor
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act
in a transaction exempt from the registration requirements of the Securities Act
and (B) in accordance with all applicable securities laws of the states of the
United States and other jurisdictions.]
[IF THIS CAPITAL SECURITY IS AN ORIGINAL CAPITAL SECURITY, THEN
INSERT--The receipt and acceptance of this Capital Security or any interest
herein by or on behalf of the holder hereof or any beneficial owner shall
constitute the acceptance by the holder hereof and all others having a
beneficial interest in this Capital Security of all of the terms and provisions
of the Registration Rights Agreement referred to in the Trust Agreement.]
[IF THIS CAPITAL SECURITY IS A REGULATION S CAPITAL SECURITY, THEN
INSERT--The Capital Securities evidenced hereby and any Debentures issuable in
connection therewith have not been registered under the U.S. Securities Act of
1933 (the "Securities Act") and may not be offered, sold or delivered in the
United States or to, or for the account or benefit of, any U.S. person, unless
such Securities are registered under the Securities Act or an exemption from the
registration requirements thereof is available.]
[IF THIS CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITIES CERTIFICATE,
THEN INSERT--This Capital Security is a Global Capital Securities Certificate
within the meaning of the Trust Agreement hereinafter referred to and is
registered in the name of a clearing agency or a nominee thereof. This Capital
Security may not be exchanged in whole or in part for a Capital Security
registered, and no transfer of this Capital Security in whole or in part may be
registered, in the name of any person other than such clearing agency or a
nominee thereof, except in the limited circumstances described in the Trust
Agreement.]
[IF THE SECURITY IS A GLOBAL CAPITAL SECURITY AND THE DEPOSITORY TRUST
COMPANY IS TO BE THE CLEARING AGENCY THEREFOR, THEN INSERT--Unless this Capital
Security is presented by an authorized representative of The Depository Trust
Company (55 Water Street, New York) to First Union Institutional Capital II or
its agent for registration of transfer, exchange or payment, and any Capital
Security issued is registered in the name of Cede
<PAGE>
& Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein. ]
Certificate Number Number of Capital Securities
P- [___________]
CUSIP NO. ____________
Certificate Evidencing Capital Securities
of
First Union Institutional Capital II
7.85% Capital Securities
(Liquidation Amount $1,000 per Capital Security)
First Union Institutional Capital II, a statutory business trust
created under the laws of the State of Delaware (the "Trust"), hereby certifies
that (the "Holder") is the registered owner of ( ) capital securities of the
Trust representing preferred undivided beneficial interests in the assets of the
Trust and designated the First Union Institutional Capital II 7.85% Capital
Securities (Liquidation Amount $1,000 per Capital Security) (the "Capital
Securities"). The Capital Securities are transferable on the books and records
of the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer as provided in Section
5.4 of the Trust Agreement (as defined below). The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Capital Securities are set forth in, and this certificate and the Capital
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Trust Agreement of the
Trust, dated as of January 6, 1997 as the same may be amended from time to time
(the "Trust Agreement"), including the designation of the terms of Capital
Securities as set forth therein. The Holder is entitled to the benefits of the
Guarantee Agreement entered into by First Union Corporation, a North Carolina
corporation, and Wilmington Trust Company, as guarantee trustee, dated as of
January 6, 1997, (the "Guarantee"), to the extent provided therein. The Trust
will furnish a copy of the Trust Agreement and the Guarantee to the Holder
without charge upon written request to the Trust at its principal place of
business or registered office.
-2-
<PAGE>
By receipt and acceptance of this certificate, the Holder agrees to be
bound by the Trust Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the undersigned Administrator of the Trust has
executed this certificate as of the day of , .
FIRST UNION INSTITUTIONAL CAPITAL II
By:
Name:
Administrator
-3-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital
Security to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this Capital Securities Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: ________________
Signature: ___________________________________________________________________
(Sign exactly as your name appears on the
other side of this Capital Security Certificate)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
-4-
<PAGE>
EXHIBIT F -- Form of Rule 144A
Securities Certificate
RULE 144A SECURITIES CERTIFICATE
(For transfers pursuant to ss. 5.4(b) of the Trust Agreement)
Wilmington Trust Company,
as Security Registrar
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
Re: 7.85% Capital Securities of First Union Institutional Capital II
(the "Trust") (the "Capital Securities")
Reference is made to the Amended and Restated Trust Agreement, dated as
of January 6, 1997 (as amended from time to time, the "Trust Agreement"),
entered among First Union Corporation, as Depositor (the "Depositor"),
Wilmington Trust Company, as Property Trustee, Wilmington Trust Company, as
Delaware Trustee, and the holders from time to time of undivided beneficial
interests in the assets of the Trust. Terms used herein and defined in the Trust
Agreement or in Rule 144A or Rule 144 under the U.S. Securities Act of 1933 (the
"Securities Act") are used herein as so defined.
This certificate relates to $_____________ aggregate Liquidation Amount
of Capital Securities, which are evidenced by the following certificate(s) (the
"Specified Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Capital Securities
Certificate, they are held
<PAGE>
through the Clearing Agency or a Clearing Agency Participant in the name of the
Undersigned, as or on behalf of the Owner. If the Specified Securities are not
represented by a Global Capital Securities Certificate, they are registered in
the name of the Undersigned, as or on behalf of the Owner.
The Owner has requested that the Specified Securities be transferred to
a person (the "Transferee") who will take delivery in the form of a Rule 144A
Capital Security. In connection with such transfer, the Owner hereby certifies
that, unless such transfer is being effected pursuant to an effective
registration statement under the Securities Act, it is being effected in
accordance with Rule 144A or Rule 144 under the Securities Act and all
applicable securities laws of the states of the United States and other
jurisdictions. Accordingly, the Owner hereby further certifies as:
(1) Rule 144A Transfers. If the transfer is being effected in
accordance with Rule 144A:
(A) the Specified Securities are being transferred to
a person that the Owner and any person acting on its behalf
reasonably believe is a "qualified institutional buyer" within
the meaning of Rule 144A, acquiring for its own account or for
the account of a qualified institutional buyer; and
(B) the Owner and any person acting on its behalf
have taken reasonable steps to ensure that the Transferee is
aware that the Owner may be relying on Rule 144A in connection
with the transfer; and
(2) Rule 144 Transfers. If the transfer is being effected
pursuant to Rule 144:
(A) the transfer is occurring after a holding period
of at least two years (computed in accordance with paragraph
(d) of Rule 144) has elapsed since the Specified Securities
were last acquired from the Trust or the Depositor or from an
affiliate of the Trust or the Depositor, whichever is later,
and is being effected in accordance with the applicable
amount, manner of sale and notice requirements of Rule 144; or
(B) the transfer is occurring after a holding period
of at least three years has elapsed since the Specified
Securities were last acquired from the Trust or the Depositor
or from an affiliate of the Trust or the Depositor, whichever
is later, and the Owner is not, and during the preceding three
months has not been, an affiliate of the Trust or the
Depositor.
-2-
<PAGE>
This certificate and the statements contained herein are made
for your benefit and the benefit of the Depositor, the Trust and the Initial
Purchaser.
Dated:
(Print the name of the Undersigned,
as such term is defined in the
second paragraph of this
certificate.)
By:
Name:
Title:
(If the Undersigned is a
corporation, partnership or
fiduciary, the title of the person
signing on behalf of the Undersigned
must be stated.)
-3-
<PAGE>
EXHIBIT G -- Form of
Regulation S Certificate
REGULATION S CERTIFICATE
(For transfers pursuant to ss. 5.4 of the Trust Agreement)
Wilmington Trust Company,
as Security Registrar
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
Re: 7.85% Capital Securities of First Union Institutional Capital II
(the "Trust") (the "Capital Securities")
Reference is made to the Amended and Restated Trust Agreement, dated as
of January 6, 1997 (as amended from time to time, the "Trust Agreement"),
entered among First Union Corporation, as Depositor (the "Depositor"),
Wilmington Trust Company, as Property Trustee, Wilmington Trust Company, as
Delaware Trustee, and the holders from time to time of undivided beneficial
interests in the assets of the Trust. Terms used herein and defined in the Trust
Agreement or in Regulation S or Rule 144 under the U.S. Securities Act of 1933
(the "Securities Act") are used herein as so defined.
This certificate relates to U.S. $____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Capital Securities
Certificate, they are held through the Clearing Agency or a Clearing Agency
Participant in the name of the Undersigned, as or on behalf of the Owner. If the
Specified Securities are not represented by a Global Capital Securities
Certificate, they are registered in the name of the Undersigned, as or on behalf
of the Owner.
<PAGE>
The Owner has requested that the Specified Securities be transferred to
a person (the "Transferee") who will take delivery in the form of a Regulation S
Capital Security. In connection with such transfer, the Owner hereby certifies
that, unless such transfer is being effected pursuant to an effective
registration statement under the Securities Act, it is being effected in
accordance with Rule 904 or Rule 144 under the Securities Act and with all
applicable securities laws of the states of the United States and other
jurisdictions. Accordingly, the Owner hereby further certifies as follows:
(1) Rule 904 Transfers. If the transfer is being effected in
accordance with Rule 904:
(A) the Owner is not a distributor of the Securities,
an affiliate of the Trust or Depositor or any such distributor
or a person acting on behalf of any of the foregoing;
(B) the offer of the Specified Securities was not
made to a person in the United States;
(C) either:
(i) at the time the buy order was
originated, the Transferee was outside the United
States or the Owner and any person acting on its
behalf reasonably believed that the Transferee was
outside the United States, or
(ii) the transaction is being executed in,
on or through the facilities of the Eurobond market,
as regulated by the Association of International Bond
Dealers, or another designated offshore securities
market and neither the Owner nor any person acting on
its behalf knows that the transaction has been
prearranged with a buyer in the United States;
(D) no directed selling efforts have been made in the
United States by or on behalf of the Owner or any affiliate
thereof;
(E) if the Owner is a dealer in securities or has
received a selling concession, fee or other remuneration in
respect of the Specified Securities, and the transfer is to
occur during the Restricted Period, then the requirements of
Rule 904(c)(1) have been satisfied; and
(F) the transaction is not part of a plan or scheme
to evade the registration requirements of the Securities Act.
-2-
<PAGE>
(2) Rule 144 Transfers. If the transfer is being
effected pursuant to Rule 144:
(A) the transfer is occurring after a holding period
of at least two years (computed in accordance with paragraph
(d) of Rule 144) has elapsed since the Specified Securities
were last acquired from the Trust, the Depositor or from an
affiliate of the Trust or the Depositor, whichever is later,
and is being effected in accordance with the applicable
amount, manner of sale and notice requirements of Rule 144; or
(B) the transfer is occurring after a holding period
of at least three years has elapsed since the Specified
Securities were last acquired from the Trust, the Depositor or
from an affiliate of the Trust or the Depositor, whichever is
later, and the Owner is not, and during the preceding three
months has not been, an affiliate of the Trust or the
Depositor.
-3-
<PAGE>
This certificate and the statements contained herein are made
for your benefit and the benefit of the Depositor, the Trust and the Initial
Purchaser.
Dated:
(Print the name of the Undersigned,
as such term is defined in the
second paragraph of this
certificate.)
By:
Name:
Title:
(If the Undersigned is a
corporation, partnership or
fiduciary, the title of the person
signing on behalf of the Undersigned
must be stated.)
-4-
<PAGE>
EXHIBIT H -- Form of Unrestricted
Securities Certificate
UNRESTRICTED SECURITIES CERTIFICATE
(For removal of Securities Act Legends pursuant
to ss. 5.4(c) of the Trust Agreement)
Wilmington Trust Company,
as Security Registrar
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
Re: 7.85% Capital Securities of First Union Institutional Capital II
(the "Trust") (the "Capital Securities")
Reference is made to the Amended and Restated Trust Agreement, dated as
of January 6, 1997 (the "Trust Agreement"), entered among First Union
Corporation, as Depositor (the "Depositor"), Wilmington Trust Company, as
Property Trustee, and Wilmington Trust Company, as Delaware Trustee. Terms used
herein and defined in the Trust Agreement or in Regulation S or Rule 144 under
the U.S. Securities Act of 1933 (the "Securities Act") are used herein as so
defined.
This certificate relates to $_____________ aggregate Liquidation Amount
of Capital Securities, which are evidenced by the following certificate(s) (the
"Specified Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Capital Securities
Certificate, they are held
<PAGE>
through the Clearing Agency or a Clearing Agency Participant in the name of the
Undersigned, as or on behalf of the Owner. If the Specified Securities are not
represented by a Global Capital Securities Certificate, they are registered in
the name of the Undersigned, as or on behalf of the Owner.
The Owner has requested that the Specified Securities be exchanged for
Capital Securities bearing no Restricted Capital Securities Legend pursuant to
Section 5.4(c) of the Trust Agreement. In connection with such exchange, the
Owner hereby certifies that the exchange is occurring after a holding period of
at least three years (computed in accordance with paragraph (d) of Rule 144) has
elapsed since the Specified Securities were last acquired from the Trust, the
Depositor or from an affiliate of the Trust or the Depositor, whichever is
later, and the Owner is not, and during the preceding three months has not been,
an affiliate of the Trust or the Depositor. The Owner also acknowledges that any
future transfers of the Specified Securities must comply with all applicable
securities laws of the states of the United States and other jurisdictions.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchaser.
Dated:
(Print the name of the Undersigned,
as such term is defined in the
second paragraph of this
certificate.)
By:
Name:
Title:
(If the Undersigned is a
corporation, partnership or
fiduciary, the title of the person
signing on behalf of the Undersigned
must be stated.)
-2-
<PAGE>
Exhibit 4(e)
GUARANTEE AGREEMENT
between
FIRST UNION CORPORATION,
as Guarantor,
and
WILMINGTON TRUST COMPANY,
as Guarantee Trustee
---------------------------------------
FIRST UNION INSTITUTIONAL CAPITAL II
---------------------------------------
Dated as of ___________, ____
<PAGE>
FIRST UNION CAPITAL II
Certain Sections of this Guarantee Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Section of Section of
Trust Indenture Act Guarantee Agreement
<S> <C>
310(a)..........................................................................................4.1(a)
(b).........................................................................................4.1(c), 2.8
(c).........................................................................................Inapplicable
311(a)..........................................................................................2.2(b)
(b).........................................................................................2.2(b)
(c).........................................................................................Inapplicable
312(a)..........................................................................................2.2(a)
(b).........................................................................................2.2(b)
313.............................................................................................2.3
314(a)..........................................................................................2.4
(b).........................................................................................Inapplicable
(c).........................................................................................2.5
(d).........................................................................................Inapplicable
(e).........................................................................................1.1, 2.5, 3.2
(f).........................................................................................2.1, 3.2
315(a)..........................................................................................3.1(d)
(b).........................................................................................2.7
(c).........................................................................................3.1
(d).........................................................................................3.1(d)
316(a)..........................................................................................1.1, 2.6, 5.4
(b).........................................................................................5.3
(c).........................................................................................8.2
317(a)..........................................................................................Inapplicable
(b).........................................................................................Inapplicable
318(a)..........................................................................................2.1(b)
(b).........................................................................................2.1
(c).........................................................................................2.1(a)
</TABLE>
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed to
be a part of the Guarantee Agreement.
i
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
<TABLE>
<CAPTION>
<S> <C>
SECTION 1.1. Interpretation..................................................................................... 2
SECTION 1.2. Definitions........................................................................................ 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application................................................................... 6
SECTION 2.2. List of Holders.................................................................................... 6
SECTION 2.3. Reports by the Guarantee Trustee................................................................... 7
SECTION 2.4. Periodic Reports to Guarantee Trustee.............................................................. 7
SECTION 2.5. Evidence of Compliance with Conditions Precedent................................................... 7
SECTION 2.6. Events of Default; Waiver.......................................................................... 7
SECTION 2.7. Event of Default; Notice........................................................................... 7
SECTION 2.8. Conflicting Interests.............................................................................. 8
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee......................................................... 8
SECTION 3.2. Certain Rights of Guarantee Trustee............................................................... 10
SECTION 3.3. Indemnity.......................................................................................... 11
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee; Eligibility..................................................................... 12
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee Trustee...................................... 12
ii
<PAGE>
ARTICLE V
GUARANTEE
SECTION 5.1. Guarantee.......................................................................................... 13
SECTION 5.2. Waiver of Notice and Demand........................................................................ 13
SECTION 5.3. Obligations Not Affected........................................................................... 13
SECTION 5.4. Rights of Holders.................................................................................. 14
SECTION 5.5. Guarantee of Payment............................................................................... 15
SECTION 5.6. Subrogation........................................................................................ 15
SECTION 5.7. Independent Obligations............................................................................ 15
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination...................................................................................... 15
SECTION 6.2. Pari Passu Guarantees.............................................................................. 15
ARTICLE VII
TERMINATION
SECTION 7.1. Termination........................................................................................ 16
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Successors and Assigns............................................................................. 16
SECTION 8.2. Amendments......................................................................................... 16
SECTION 8.3. Notices............................................................................................ 17
SECTION 8.4. Benefit............................................................................................ 18
SECTION 8.5. Governing Law...................................................................................... 18
SECTION 8.6. Counterparts....................................................................................... 18
</TABLE>
iii
<PAGE>
GUARANTEE AGREEMENT, dated as of __________, ____, is executed and
delivered by FIRST UNION CORPORATION, a North Carolina corporation (the
"Guarantor") having its principal office at One First Union Center, Charlotte,
North Carolina 28288-0013, and WILMINGTON TRUST COMPANY, a banking corporation
organized under the laws of the State of Delaware, as trustee (the "Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the Capital Securities (as defined herein) of FIRST UNION INSTITUTIONAL
CAPITAL II, a Delaware business trust (the "Issuer").
W I T N E S S E T H :
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as
of January 6, 1997 (the "Trust Agreement"), among the Guarantor, as Depositor,
the Property Trustee and the Delaware Trustee named therein and the Holders from
time to time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing $250,000,000 aggregate Liquidation Amount (as defined in the
Trust Agreement) of its 7.85% Capital Securities, Liquidation Amount $1,000 per
capital security) (the "Capital Securities") representing preferred undivided
beneficial interests in the assets of the Issuer and having the terms set forth
in the Trust Agreement;
WHEREAS, the Capital Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the Issuer's
Common Securities (as defined below), will be used to purchase the Debentures
(as defined in the Trust Agreement) of the Guarantor which will be deposited
with the Wilmington Trust Company, as Property Trustee under the Trust
Agreement, as trust assets; and
WHEREAS, as incentive for the Holders to purchase Capital Securities
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth herein, to pay to the Holders of the Capital Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Capital Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement to
provide as follows for the benefit of the Holders from time to time of the
Capital Securities:
<PAGE>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1. Interpretation.
In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to
them in Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has
the same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified,
supplemented or amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement
unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined
in this Guarantee Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and
vice-versa; and
(g) the masculine, feminine or neuter genders used herein
shall include the masculine, feminine and neuter genders.
SECTION 1.2. Definitions.
As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings:
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person; provided, however,
that the Issuer shall not be deemed to be an Affiliate of the
Guarantor. For the purposes of this definition, "control" when used
with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
2
<PAGE>
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Debt" means with respect to any Person, whether recourse is
to all or a portion of the assets of such Person and whether or not
contingent, (i) every obligation of such Person for money borrowed;
(ii) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses;
(iii) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person, (iv) every obligation of such Person
issued or assumed as the deferred purchase price of property or
services (but excluding trade accounts payable or accrued liabilities
arising in the ordinary course of business); (v) every capital lease
obligation of such Person; (vi) all Other Financial Obligations (as
hereinafter defined) of such Person; and (vii) every obligation of the
type referred to in clauses (i) through (vi) of another Person and all
dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable, directly or
indirectly, as obligor or otherwise.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Guarantee Agreement;
provided, however, that, except with respect to a default in payment of
any Guarantee Payments, the Guarantor shall have received notice of
default and shall not have cured such default within 60 days after
receipt of such notice.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Capital
Securities, to the extent not paid or made by or on behalf of the
Issuer: (i) any accumulated and unpaid Distributions (as defined in the
Trust Agreement) required to be paid on the Capital Securities, to the
extent the Issuer shall have funds on hand available therefor at such
time, (ii) the redemption price, including all accumulated and unpaid
Distributions to the date of redemption (the "Redemption Price"), with
respect to any Capital Securities called for redemption by the Issuer,
to the extent the Issuer shall have funds on hand available therefor at
such time, and (iii) upon a voluntary or involuntary termination,
winding up or liquidation of the Issuer, unless Debentures are
distributed to the Holders, the lesser of (a) the aggregate of the
Liquidation Amount of $1,000 per Preferred Security plus accumulated
and unpaid Distributions on the Capital Securities to the date of
payment to the extent that the Issuer shall have funds available
therefor at such time and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means Wilmington Trust Company, until a
Successor Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Guarantee Agreement, and
thereafter means each such Successor Guarantee
3
<PAGE>
Trustee.
"Holder" means any holder, as registered on the books and
records of the Issuer, of any Capital Securities; provided, however,
that in determining whether the holders of the requisite percentage of
Capital Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Guarantor, the Guarantee
Trustee, or any Affiliate of the Guarantor or the Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture dated as
of November 27, 1996, as supplemented and amended between the Guarantor
and Wilmington Trust Company, as trustee.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount of the Capital Securities"
means, except as provided by the Trust Indenture Act, a vote by the
Holder(s), voting separately as a class, of more than 50% of the
Liquidation Amount of all then outstanding Capital Securities issued by
the Issuer.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman or a Vice Chairman of such Person or
the President or a Vice President of such Person, and by the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary of such
Person, and delivered to the Guarantee Trustee. Any Officers'
Certificate delivered with respect to compliance with a condition or
covenant provided for in this Guarantee Agreement shall include:
(a) a statement that each officer signing the
Officers' Certificate has read the covenant or condition and
the definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Officers' Certificate;
(c) a statement that each officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed
opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of each
officer, such condition or covenant has been complied with.
"Other Financial Obligations" means, with respect to a Person,
all obligations to make payment pursuant to the terms of financial
instruments, such as (i) securities contracts and foreign currency
exchange contracts, (ii) derivative instruments, such as
4
<PAGE>
swap agreements (including interest rate and foreign exchange rate swap
agreements), cap agreements, floor agreements, collar agreements,
interest rate agreements, foreign exchange rate agreements, options,
commodity futures contracts, commodity option contracts, and (iii) in
the case of both (i) and (ii) above, similar financial instruments.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint
stock company, limited liability company, trust, unincorporated
association, or government or any agency or political subdivision
thereof, or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee
Trustee, any Senior Vice President, any Vice President, any Assistant
Vice President, the Secretary, any Assistant Secretary, the Treasurer,
any Assistant Treasurer, any Trust Officer or Assistant Trust Officer
or any other officer of the Corporate Trust Department of the Guarantee
Trustee and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of
that officer's knowledge of and familiarity with the particular
subject.
"Senior Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of
any petition in bankruptcy or for reorganization relating to the
Guarantor whether or not such claim for post-petition interest is
allowed in such proceeding), on Debt, whether incurred on or prior to
the date of the Indenture or thereafter incurred, unless, in the
instrument creating or evidencing the same or pursuant to which the
same is outstanding, it is provided that such obligations are not
superior in right of payment to the Debentures or to other Debt which
is pari passu with, or subordinated to, the Debentures; provided,
however, that Senior Debt shall not be deemed to include (i) any Debt
of the Guarantor which when incurred and without respect to any
election under Section 1111(b) of the United States Bankruptcy Code of
1978, as amended, was without recourse to the Guarantor, (ii) any Debt
of the Corporation to any of its subsidiaries, (iii) Debt to any
employee of the Guarantor, and (iv) any other debt securities issued
pursuant to the Indenture. Senior Debt includes, without limitation,
Debt issued (i) under the indenture, dated as of April 1, 1983, and
amended thereafter, between the Guarantor and Chemical Bank, as
trustee, and (ii) except to the extent otherwise provided with respect
to any series of debt securities issued after the date hereof, under
the indenture, dated as of March 15, 1986, and amended thereafter,
between the Guarantor and Harris Trust and Savings Bank, as trustee.
"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under
Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as
in force at the date as of which this Guarantee Agreement is executed;
provided, however, that in the event the Trust Indenture Act of 1939 is
amended after such date, "Trust Indenture Act"
5
<PAGE>
means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
Capitalized or otherwise defined terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Trust Agreement as in
effect on the date hereof.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
(a) As a matter of contract, this Guarantee Agreement is subject to the
provisions of the Trust Indenture Act that are or would be required to be part
of this Guarantee Agreement if the Trust Indenture Act were applicable and
shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.2. List of Holders.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (a) semiannually, on or before January 1 and July 1 of each
year, a list, in such form as the Guarantee Trustee may reasonably require, of
the names and addresses of the Holders (the "List of Holders") as of a date not
more than 15 days prior to the delivery thereof, and (b) at such other times as
the Guarantee Trustee may request in writing, within 30 days after the receipt
by the Guarantor of any such request, a List of Holders as of a date not more
than 15 days prior to the time such list is furnished, in each case to the
extent such information is in the possession or control of the Guarantor and is
not identical to a previously supplied list of Holders or has not otherwise been
received by the Guarantee Trustee in its capacity as such. The Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Guarantee Trustee.
Not later than June 1 of each year, commencing June 1, ____, the
Guarantee Trustee shall provide to the Holders such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The
6
<PAGE>
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee, the Securities
and Exchange Commission and the Holders such documents, reports and information,
if any, as required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act, in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
SECTION 2.6. Events of Default; Waiver.
The Holders of a Majority in Liquidation Amount of the Capital
Securities may, by vote, on behalf of the Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent therefrom.
SECTION 2.7. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the occurrence of
an Event of Default, transmit by mail, first class postage prepaid, to the
Holders, notices of all Events of Default known to the Guarantee Trustee, unless
such defaults have been cured before the giving of such notice, provided, that,
except in the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of this
Guarantee Agreement shall have obtained written notice, of such Event of
Default.
7
<PAGE>
SECTION 2.8. Conflicting Interests.
The Trust Agreement shall be deemed to be specifically described in
this Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee for
the benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder exercising his or her rights
pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on acceptance by
such Successor Guarantee Trustee of its appointment to act as Successor
Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, and such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee
Trustee shall be determined
8
<PAGE>
solely by the express provisions of this Guarantee Agreement,
and the Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and conforming to
the requirements of this Guarantee Agreement; but in the case
of any such certificates or opinions that by any provision
hereof or of the Trust Indenture Act are specifically required
to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee Trustee
was negligent in ascertaining the pertinent facts upon which such
judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in Liquidation Amount of the Capital Securities relating to
the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee, or exercising any trust or power
conferred upon the Guarantee Trustee under this Guarantee Agreement;
and
(iv) no provision of this Guarantee Agreement shall require
the Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if the
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it
under the terms of this Guarantee Agreement or adequate indemnity
against such risk or liability is not reasonably assured to it.
SECTION 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document reasonably believed by it to be
genuine and to have been signed, sent or presented by the proper party
or parties.
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(ii) Any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting to take
any action hereunder, the Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and rely upon an Officers' Certificate which, upon
receipt of such request from the Guarantee Trustee, shall be promptly
delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and
the written advice or opinion of such legal counsel with respect to
legal matters shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or opinion.
Such legal counsel may be legal counsel to the Guarantor or any of its
Affiliates and may be one of its employees. The Guarantee Trustee shall
have the right at any time to seek instructions concerning the
administration of this Guarantee Agreement from any court of competent
jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such Holder
shall have provided to the Guarantee Trustee such adequate security and
indemnity as would satisfy a reasonable person in the position of the
Guarantee Trustee, against the costs, expenses (including attorneys'
fees and expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Guarantee Trustee; provided that,
nothing contained in this Section 3.2(a)(v) shall be taken to relieve
the Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, and the Guarantee Trustee shall not
be responsible for any misconduct or negligence on the part of any such
agent or attorney appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee
Agreement the Guarantee
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Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the
Guarantee Trustee (A) may request instructions from the Holders, (B)
may refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (C) shall be protected
in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose
any duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.3. Indemnity.
The Guarantor agrees to indemnify the Guarantee Trustee for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Guarantee Trustee, arising out of or
in connection with the acceptance or administration of this Guarantee Agreement,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. The Guarantee Trustee will not claim or exact any lien or
charge on any Guarantee Payments as a result of any amount due to it under this
Guarantee Agreement.
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ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee: Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of
at least $50,000,000, and shall be a corporation meeting the
requirements of Section 310(a) of the Trust Indenture Act. If such
corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or examining
authority, then, for the purposes of this Section 4.1 and to the extent
permitted by the Trust Indenture Act, the combined capital and surplus
of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to
so act under Section 4.1(a), the Guarantee Trustee shall immediately resign in
the manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed
or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and delivered to
the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
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(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by or on behalf of the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim which the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of the Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the Capital
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions (other than an extension of time
for payment of Distributions that results from the extension of any
interest payment period on the Debentures as provided in the
Indenture), Redemption Price, Liquidation Distribution or any other
sums payable under
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the terms of the Capital Securities or the extension of time for the
performance of any other obligation under, arising out of, or in
connection with, the Capital Securities;
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Capital Securities, or any action on the part of the
Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Capital
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it
being the intent of this Section 5.3 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust
or power conferred upon the Guarantee Trustee under this Guarantee Agreement;
and (iv) any Holder may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Guarantee Agreement, without first
instituting a legal proceeding against the Guarantee Trustee, the Issuer or any
other Person.
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SECTION 5.5. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer) or upon distribution of Debentures to Holders as provided in the
Trust Agreement.
SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if, at the time of any
such payment, any amounts are due and unpaid under this Guarantee Agreement. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
SECTION 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Capital
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination.
The obligations of the Guarantor under this Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate and
junior in right of payment to all Senior Debt of the Guarantor.
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SECTION 6.2. Pari Passu Guarantees.
The obligations of the Guarantor under this Guarantee Agreement shall
rank pari passu with the obligations of the Guarantor under any similar
Guarantee Agreements issued by the Guarantor on behalf of the holders of
preferred securities issued by any First Union Trust (as defined in the
Indenture).
ARTICLE VII
TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price of all Capital Securities,
(ii) the distribution of Debentures to the Holders in exchange for all of the
Capital Securities or (iii) full payment of the amounts payable in accordance
with the Trust Agreement upon liquidation of the Issuer. Notwithstanding the
foregoing, this Guarantee Agreement will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder must restore payment
of any sums paid with respect to Capital Securities or this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Capital
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article VIII of the
Indenture and pursuant to which the successor or assignee agrees in writing to
perform the Guarantor's obligations hereunder, the Guarantor shall not assign
its obligations hereunder.
SECTION 8.2. Amendments.
Except with respect to any changes which do not adversely affect the
rights of the Holders in any material respect (in which case no consent of the
Holders will be required), this Guarantee Agreement may only be amended with the
prior approval of the Holders of not less than a Majority in Liquidation Amount
of the Capital Securities. The provisions of Article VI of the Trust Agreement
concerning meetings of the Holders shall apply to the giving of such approval.
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SECTION 8.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below
or such other address, facsimile number or to the attention of such
other Person as the Guarantor may give notice to the Holders:
First Union Corporation
One First Union Center
Charlotte, North Carolina 28288-0013
Facsimile No.: (704)-374-3425
Attention: General Counsel
(b) if given to the Issuer, in care of the Guarantee Trustee,
at the Issuer's (and the Guarantee Trustee's) address set forth below
or such other address as the Guarantee Trustee on behalf of the Issuer
may give notice to the Holders:
First Union Institutional Capital II
c/o First Union Corporation
One First Union Center
Charlotte, North Carolina 28288-0013
Facsimile No.: (704)-374-3425
Attention: General Counsel
with a copy to:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Facsimile No.: (302)-651-1576
Attention: Corporate Trust Administration
(c) if given to any Holder, at the address set forth on the
books and records of the Issuer.
All notices hereunder shall be deemed to have been given when received
in person,
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telecopied with receipt confirmed, or mailed by first class mail, postage
prepaid, except that if a notice or other document is refused delivery or cannot
be delivered because of a changed address of which no notice was given, such
notice or other document shall be deemed to have been delivered on the date of
such refusal or inability to deliver.
SECTION 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Capital Securities.
SECTION 8.5. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
SECTION 8.6. Counterparts.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the undersigned have executed this Guarantee
Agreement as of the date first above written.
FIRST UNION CORPORATION
By:
Name:
Title:
WILMINGTON TRUST COMPANY
as Guarantee Trustee
By:
Name:
Title:
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Exhibit 4(f)
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of January 6, 1997, among First
Union Corporation, a North Carolina corporation (the "Company"), First Union
Institutional Capital II, a Delaware statutory business trust (the "Trust"), and
Morgan Stanley & Co. Incorporated, as the initial purchaser (the "Initial
Purchaser") of the 7.85% Capital Securities of the Trust, which are guaranteed
by the Company.
1. CERTAIN DEFINITIONS.
For purposes of this Registration Rights Agreement, the following terms
shall have the following respective meanings:
(a) "ADMINISTRATORS" shall mean the Administrators named under the
Trust Agreement.
(b) "CAPITAL SECURITIES" shall mean the 7.85% Capital Securities,
Liquidation Amount $1,000 per Capital Security, to be issued under the
Trust Agreement and sold to the Initial Purchaser, and securities issued in
exchange therefor, other than Debentures, or in lieu thereof pursuant to
the Trust Agreement.
(c) "CLOSING DATE" shall mean the date on which the Capital Securities
are initially issued.
(d) "COMMISSION" shall mean the Securities and Exchange Commission, or
any other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular
purpose.
(e) "DEBENTURES" shall mean the 7.85% Junior Subordinated Deferrable
Interest Debentures due January 1, 2027 of the Company to be issued under
the Indenture, and securities issued in exchange therefor or in lieu
thereof pursuant to the Indenture.
(f) "EFFECTIVE TIME", in the case of (i) an Exchange Offer, shall mean
the time and date as of which the Commission declares the Exchange Offer
Registration Statement effective or as of which the Exchange Offer
Registration Statement otherwise becomes effective and (ii) a Shelf
Registration, shall mean the time and date as of which the Commission
declares the Shelf Registration effective or as of which the Shelf
Registration otherwise becomes effective.
(g) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, or
any successor thereto, as the same shall be amended from time to time.
(h) "EXCHANGE OFFER" shall have the meaning assigned thereto in Section
2(a) hereof.
(i) "EXCHANGE OFFER REGISTRATION STATEMENT" shall have the meaning
assigned thereto in Section 2(a) hereof.
(j) "EXCHANGE REGISTRATION" shall have the meaning assigned thereto in
Section 3(f) hereof.
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(k) "EXCHANGE SECURITIES" shall have the meaning assigned thereto in
Section 2(a) hereof.
(l) "GUARANTEE" shall mean the guarantee of the Capital Securities by
the Company under the Guarantee Agreement, dated as of January 6, 1997,
between the Company and Wilmington Trust Company, as Guarantee Trustee.
(m) The term "HOLDER" shall mean the Initial Purchaser for so long as
it owns any Registrable Securities, and such of its respective successors
and assigns who acquire Registrable Securities, directly or indirectly,
from such person or from any successor or assign of such person, in each
case for so long as such person owns any Registrable Securities.
(n) "INDENTURE" shall mean the Indenture, dated as of November 27,
1996, between the Company and Wilmington Trust Company, as Trustee, as the
same shall be amended from time to time.
(o) "LIQUIDATION AMOUNT" shall mean the stated amount of $1,000 per
Trust Security.
(p) The term "PERSON" shall mean a corporation, association,
partnership, organization, business, individual, government or political
subdivision thereof or governmental agency.
(q) "REGISTRABLE SECURITIES" shall mean the Securities; PROVIDED,
HOWEVER, that such Securities shall cease to be Registrable Securities when
(i) in the circumstances contemplated by Section 2(a) hereof, such
Securities have been exchanged for Exchange Securities in an Exchange Offer
as contemplated in Section 2(a) (provided that any Exchange Securities
received by a broker-dealer in an Exchange Offer in exchange for
Registrable Securities that were not acquired by the broker-dealer directly
from the Company will also be Registerable Securities through and including
the earlier of the 180th day after the Exchange Offer is completed or such
time as such broker-dealer no longer owns such Exchange Securities); (ii)
in the circumstances contemplated by Section 2(b) hereof, a registration
statement registering such Securities under the Securities Act has been
declared or becomes effective and such Securities have been sold or
otherwise transferred by the holder thereof pursuant to such effective
registration statement; (iii) such Securities are sold pursuant to Rule 144
under circumstances in which any legend borne by such Securities relating
to restrictions on transferability thereof, under the Securities Act or
otherwise, is removed or such Securities are eligible to be sold pursuant
to paragraph (k) of Rule 144; or (iv) such Securities shall cease to be
outstanding.
(r) "REGISTRATION DEFAULT" shall have the meaning assigned thereto in
Section 2(c) hereof.
(s) "REGISTRATION DEFAULT INTEREST" shall have the meaning assigned
thereto in Section 2(c) hereof.
(t) "REGISTRATION DEFAULT DISTRIBUTIONS" shall have the meaning
assigned thereto in Section 2(c).
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(u) "REGISTRATION EXPENSES" shall have the meaning assigned thereto in
Section 4 hereof.
(v) "RESALE PERIOD" shall have the meaning assigned thereto in Section
2(a) hereof.
(w) "RESTRICTED HOLDER" shall mean (i) a holder that is an affiliate of
the Company within the meaning of Rule 405, (ii) a holder who acquires
Exchange Securities outside the ordinary course of such holder's business
or (iii) a holder who has arrangements or understandings with any person to
participate in the Exchange Offer for the purpose of distributing Exchange
Securities.
(x) "RULE 144," "RULE 405" AND "RULE 415" shall mean, in each case,
such rule promulgated under the Securities Act.
(y) "SECURITIES" shall mean, collectively, the Capital Securities, the
Guarantee and the Debentures.
(z) "SECURITIES ACT" shall mean the Securities Act of 1933, or any
successor thereto, as the same shall be amended from time to time.
(aa) "SHELF REGISTRATION" shall have the meaning assigned thereto in
Section 2(b) hereof.
(ab) "TRUST AGREEMENT" shall mean the Amended and Restated Trust
Agreement, dated as of January 6, 1997, among the Company, the Depositor,
Wilmington Trust Company, as Property Trustee, and Wilmington Trust
company, as Delaware Trustee.
(ac) "TRUST INDENTURE ACT" shall mean the Trust Indenture Act of 1939,
or any successor thereto, as the same shall be amended from time to time.
(ad) "TRUST SECURITIES" shall mean collectively the Capital Securities
and the Common Securities to be issued under the Trust Agreement to the
Company.
Unless the context otherwise requires, any reference herein to a
"Section" or "clause" refers to a Section or clause, as the case may be, of this
Registration Rights Agreement, and the words "herein," "hereof" and "hereunder"
and other words of similar import refer to this Registration Rights Agreement as
a whole and not to any particular Section or other subdivision. Unless the
context otherwise requires, any reference to a statute, rule or regulation
refers to the same (including any successor statute, rule or regulation thereto)
as it may be amended from time to time.
2. REGISTRATION UNDER THE SECURITIES ACT.
(a) Except as set forth in Section 2(b) below, the Company and the Trust
agree to use their reasonable best efforts to file under the Securities Act
within 150 days after the Closing Date, a registration statement (the "Exchange
Offer Registration Statement") relating to an offer to exchange (the "Exchange
Offer") any and all of the Securities for a like aggregate amount of capital
securities issued by the Trust and guaranteed by the Company and underlying
junior
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subordinated interest debentures of the Company, which capital securities,
guarantee and debentures are identical to the Capital Securities, the Guarantee
and the Debentures, respectively (and are entitled to the benefits of trust
indentures which have been qualified under the Trust Indenture Act) except that
they have been registered pursuant to an effective registration statement under
the Securities Act, do not contain restrictions on transfers and do not contain
provisions for the additional interest and additional distributions contemplated
in Section 2(c) below (such new securities hereinafter called "Exchange
Securities"). The Company and the Trust agree to use their reasonable best
efforts to cause the Exchange Offer Registration Statement to become effective
under the Securities Act within 180 days after the Closing Date. The Exchange
Offer will be registered under the Securities Act on the appropriate form and
will comply with all applicable tender offer rules and regulations under the
Exchange Act. The Company and the Trust further agree to use their reasonable
best efforts to commence and complete the Exchange Offer promptly after the
Exchange Offer Registration Statement has become effective, hold the Exchange
Offer open for at least 30 days and exchange Exchange Securities for all
Securities that have been properly tendered and not withdrawn on or prior to the
expiration of the Exchange Offer. The Exchange Offer will be deemed to have been
completed only if the Exchange Securities received by holders other than
Restricted Holders in the Exchange Offer for Securities are, upon receipt,
transferable by each such holder without restriction under the Securities Act
and the Exchange Act and without material restrictions under the blue sky or
securities laws of a substantial majority of the States of the United States of
America. The Exchange Offer shall be deemed to have been completed upon the
earlier to occur of (i) the Company and the Trust having exchanged the Exchange
Securities for all outstanding Securities pursuant to the Exchange Offer and
(ii) the Company having exchanged, pursuant to the Exchange Offer, Exchange
Securities for all Securities that have been properly tendered and not withdrawn
before the expiration of the Exchange Offer, which shall be on a date that is at
least 30 days following the commencement of the Exchange Offer. The Company and
the Trust, agree (x) to include in the registration statement a prospectus for
use in connection with any resales of Exchange Securities by a holder that is a
broker-dealer, other than resales of Exchange Securities received by a
broker-dealer pursuant to the Exchange Offer in exchange for Registrable
Securities acquired by such broker-dealer directly from the Trust, and (y) to
keep the Exchange Offer Registration Statement effective for a period (the
"Resale Period") beginning when Exchange Securities are first issued in the
Exchange Offer and ending upon the earlier of (i) either (a) the expiration of
the 180th day after the Exchange Offer has been completed or (b) in the event
the Company and the Trust have at any time notified any broker-dealers pursuant
to Section 3(f)(iii) hereof, the day beyond the 180th day after the Exchange
Offer has been completed that reflects an additional period of days equal to the
number of days during all of the periods from and including the dates the
Company and the Trust give notice pursuant to Section 3(f)(iii)(F) hereof to and
including the date when broker-dealers receive an amended or supplemented
prospectus necessary to permit resales of Exchange Securities or to and
including the date on which the Company and the Trust give notice that the
resale of Exchange Securities under the Exchange Offer Registration Statement
may resume or (ii) such time as such broker-dealers no longer own any
Registrable Securities. With respect to such registration statement, each
broker-dealer that holds Exchange Securities received in an Exchange Offer in
exchange for Registerable Securities not acquired by it directly from the
Company shall have the benefit of the rights of indemnification and contribution
set forth in Section 6 hereof.
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(b) If (i) prior to the consummation of the Exchange Offer existing
applicable law or Commission interpretations are changed such that the capital
securities, related guarantee of the Company and underlying debentures of the
Company to be received by holders other than Restricted Holders in the Exchange
Offer for Registrable Securities are not or would not be, upon receipt,
transferable by each such holder without restriction under the Securities Act,
(ii) the Exchange Offer Registration Statement is not declared effective within
180 days of the Closing Date, (iii) the Company has received an opinion of
counsel, rendered by a law firm having a recognized national tax practice, to
the effect that, as a result of the consummation of the Exchange Offer, there is
more than an insubstantial risk that (a) the Trust is, or will be, subject to
United States federal income tax with respect to income received or accrued on
the Debentures, (b) interest payable by the Company on the Debentures is not, or
will not be, deductible by the Company, in whole or in part, for United States
federal income tax purposes, or (c) the Trust is, or will be, subject to more
than a DE MINIMIS amount of other taxes, duties or other governmental charges,
then in addition to or in lieu of conducting the Exchange Offer contemplated by
Section 2(a), the Company and the Trust shall file under the Securities Act as
promptly as practicable a "shelf" registration statement providing for the
registration of, and the sale on a continuous or delayed basis by the holders
of, all of the Registrable Securities, pursuant to Rule 415 or any similar rule
that may be adopted by the Commission (the "Shelf Registration"). The
Administrators will promptly deliver to the holders of the Capital Securities,
the Property Trustee and the Delaware Trustee, or the Company will promptly
deliver to the holders of the Debentures, if not the Trust, written notice that
the Company and the Trust will be complying with the provisions of this Section
2(b). The Company and the Trust agree to use their reasonable best efforts to
cause the Shelf Registration to become or be declared effective and to keep such
Shelf Registration continuously effective for a period ending on the earlier of
(i) either (x) the third anniversary of the Closing Date or (y) in the event the
Company and the Trust have at any time suspended the use of the prospectus
contained in the Shelf Registration pursuant to Section 3(c) hereof, the date
beyond the third anniversary of the Closing Date that reflects an additional
period of days equal to the number of days during all of the periods from and
including the dates the Company and the Trust give notice of such suspension
pursuant to Section 3(c) to and including the date when holders of Registrable
Securities receive an amended or supplemented prospectus necessary to permit
resales as Registrable Securities under the Registration Shelf or to and
including the date on which the Company and Trust give notice that the resale to
Registrable Securities may resume or (ii) such time as there are no longer any
Registrable Securities outstanding. The Company and the Trust further agree to
supplement or make amendments to the Shelf Registration, as and when required by
the rules, regulations or instructions applicable to the registration form used
by the Company and the Trust for such Shelf Registration or by the Securities
Act or rules and regulations thereunder for shelf registration, and the Company
and the Trust agree to furnish to the holders of the Registrable Securities
copies of any such supplement or amendment prior to its being used or promptly
following its filing with the Commission.
(c) If the Company or the Trust fail to comply with this Registration
Rights Agreement or if the Exchange Offer Registration Statement or the Shelf
Registration Statement fails to become effective (any such event a "Registration
Default"), then, as liquidated damages, registration default interest (the
"Registration Default Interest") shall become payable in respect of the
Debentures, and corresponding registration default Distributions (the
"Registration Default Distributions"), shall become payable on the Trust
Securities as follows:
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(i) if (A) neither the Exchange Offer Registration Statement nor a
Shelf Registration Statement is filed with the Commission on or prior to
the 150th day after the Closing Date or (B) notwithstanding that the
Company and the Trust have consummated or will consummate an Exchange
Offer, the Company and the Trust are required to file a Shelf Registration
and such Shelf Registration is not filed on or prior to the date required
by this Registration Rights Agreement, then commencing on the day after
either such required filing date, Registration Default Interest shall
accrue on the principal amount of the Debentures, and Registration Default
Distributions shall accumulate on the Liquidation Amount of the Trust
Securities, each at a rate of 0.25% per annum; or
(ii) if (A) neither the Exchange Offer Registration Statement nor a
Shelf Registration is declared effective by the Commission on or prior to
the 30th day after the applicable required filing date or (B)
notwithstanding that the Company and the Trust have consummated or will
consummate an Exchange Offer, the Company and the Issuer are required to
file a Shelf Registration and such Shelf Registration is not declared
effective by the Commission on or prior to the 30th day after the date such
Shelf Registration was required to be filed, then commencing on the 31st
day after the applicable required filing date, Registration Default
Interest shall accrue on the principal amount of the Debentures, and
Registration Default Distributions shall accumulate on the Liquidation
Amount of the Trust Securities, each at a rate of 0.25% per annum; or
(iii) if (A) the Trust and the Company have not exchanged Exchange
Securities for all Securities validly tendered, in accordance with the
terms of the Exchange Offer on or prior to the 30th day after the date on
which the Exchange Offer Registration Statement was declared effective or
(B) if applicable, the Shelf Registration has been declared effective and
such Shelf Registration ceases to be effective at any time prior to the
third anniversary of the Closing Date (other than after such time as there
are no longer any Registrable Securities), then Registration Default
Interest shall accrue on the principal amount of Debentures, and
Registration Default Distributions shall accumulate on the Liquidation
Amount of the Trust Securities, each at a rate of 0.25% per annum
commencing on (x) the 31st day after such effective date, in the case of
(A) above, or (y) the day such Shelf Registration ceases to be effective in
the case of (B) above;
PROVIDED, HOWEVER, that neither the Registration Default Interest rate on the
Debentures, nor the Registration Default Distributions rate on the Liquidation
Amount of the Trust Securities, shall exceed in the aggregate 0.25% per annum;
PROVIDED, FURTHER, HOWEVER, that (1) upon the filing of the Exchange Offer
Registration Statement or a Shelf Registration (in the case of clause (i)
above), (2) upon the effectiveness of the Exchange Offer Registration Statement
or a Shelf Registration (in the case of clause (ii) above), or (3) upon the
exchange of Exchange Securities for all securities tendered (in the case of
clause (iii) (A) above), or upon the effectiveness of the Shelf Registration
which had ceased to remain effective (in the case of clause (iii) (B) above),
Registration Default Interest on the Debentures, and Registration Default
Distributions on the Liquidation Amount of the Trust Securities as a result of
such clause (or the relevant subclause thereof), as the case may be, shall cease
to accrue.
(d) Any reference herein to a registration statement shall be deemed to
include any document incorporated therein by reference as of the applicable
Effective Time and any reference herein
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to any post-effective amendment to a registration statement shall be deemed to
include any document incorporated therein by reference as of a time after such
Effective Time.
(e) Notwithstanding any other provisions of this Registration Rights
Agreement, in the event that Debentures are distributed to holders of Capital
Securities in liquidation of the Trust pursuant to the Trust Agreement (a) all
references in this Section 2 and Section 3 to Securities, Registrable Securities
and Exchange Securities shall not include the Capital Securities and Guarantee
or Capital Securities and Guarantee issued or to be issued in exchange therefor
in the Exchange Offer, (ii) all requirements for action to be taken by the Trust
in this Section 2 and Section 3 shall cease to apply and all requirements for
action to be taken by the Company in this Section 2 and Section 3 shall apply to
Debentures and Debentures issued or to be issued in exchange therefor in the
Exchange Offer.
3. REGISTRATION PROCEDURES.
The following provisions shall apply to registration statements filed
pursuant to Section 2:
(a) At or before the Effective Time of the Exchange Offer or the Shelf
Registration, as the case may be, the Company and the Trust shall qualify the
Indenture (if not already qualified), the Trust Agreement and the Guarantee
under the Trust Indenture Act of 1939.
(b) In connection with the Company's and the Trust's obligations with
respect to the Shelf Registration, if applicable, the Company and the Trust
shall, as soon as reasonably practicable (or as otherwise specified herein):
(i) prepare and file with the Commission a registration statement with
respect to the Shelf Registration on any form which may be utilized by the
Trust and the Company and which shall permit the disposition of the
Registrable Securities in accordance with the intended method or methods
thereof, as specified in writing by the holders of the Registrable
Securities, and use its reasonable best efforts to cause such registration
statement to become effective as soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus included
therein as may be necessary to effect and maintain the effectiveness of
such registration statement for the period specified in Section 2(b) hereof
and as may be required by the applicable rules and regulations of the
Commission and the instructions applicable to the form of such registration
statement, and furnish to the holders of the Registrable Securities copies
of any such supplement or amendment simultaneously with or prior to its
being used or filed with the Commission;
(iii) comply, as to all matters within the Company's and the Trust's
control, with the provisions of the Securities Act with respect to the
disposition of all of the Registrable Securities covered by such
registration statement in accordance with the intended methods of
disposition by the holders thereof provided for in such registration
statement;
(iv) provide to any of (A) the holders of the Registrable Securities to
be included in such registration statement, (B) the underwriters (which
term, for purposes of this Exchange and
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Registration Rights Agreement, shall include a person deemed to be an
underwriter within the meaning of Section 2(11) of the Securities Act), if
any, thereof, (C) the sales or placement agent, if any, therefor, (D)
counsel for such underwriters or agent and (E) not more than one counsel
for all the holders of such Registrable Securities who so request of the
Company in writing the opportunity to participate in the preparation of
such registration statement, each prospectus included therein or filed with
the Commission and each amendment or supplement thereto;
(v) for a reasonable period prior to the filing of such registration
statement, and throughout the period specified in Section 2(b), make
available at reasonable times at the Company's principal place of business
or such other reasonable place for inspection by the persons referred to in
Section 3(b)(iv) who shall certify to the Company and the Trust that they
have a current intention to sell the Registrable Securities pursuant to the
Shelf Registration such financial and other information and books and
records of the Company, and cause the officers, employees, counsel and
independent certified public accountants of the Company to respond to such
inquiries, as shall be reasonably necessary, in the judgment of the
respective counsel referred to in such Section, to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act;
PROVIDED, HOWEVER, that each such party shall be required to maintain in
confidence and not to disclose to any other person any information or
records reasonably designated by the Company in writing as being
confidential, until such time as (A) such information becomes a matter of
public record (whether by virtue of its inclusion in such registration
statement or otherwise), or (B) such person shall be required so to
disclose such information pursuant to a subpoena or order of any court or
other governmental agency or body having jurisdiction over the matter
(subject to the requirements of such order, and only after such person
shall have given the Company prompt prior written notice of such
requirement), or (C) such information is required to be set forth in such
registration statement or the prospectus included therein or in an
amendment to such registration statement or an amendment or supplement to
such prospectus in order that such registration statement, prospectus,
amendment or supplement, as the case may be, does not contain an untrue
statement of a material fact or omit to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing;
(vi) promptly notify the selling holders of Registrable Securities, the
sales or placement agent, if any, therefor and the managing underwriter or
underwriters, if any, thereof and confirm such advice in writing, (A) when
such registration statement or the prospectus included therein or any
prospectus amendment or supplement or post-effective amendment has been
filed, and, with respect to such registration statement or any
post-effective amendment, when the same has become effective, (B) of any
comments by the Commission and by the Blue Sky or securities commissioner
or regulator of any state with respect thereto or any request by the
Commission for amendments or supplements to such registration statement or
prospectus or for additional information, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of such
registration statement or the initiation or threatening of any proceedings
for that purpose, (D) if at any time the representations and warranties of
the Company or the Trust contemplated by Section 3(b)(xv) or Section 5
cease to be true and correct in all material respects, (E) of the receipt
by the Company or the Trust of any notification with respect to the
suspension of the qualification of the Registrable
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<PAGE>
Securities for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose, or (F) at any time when a prospectus is
required to be delivered under the Securities Act, that such registration
statement, prospectus, prospectus amendment or supplement or post-effective
amendment does not conform in all material respects to the applicable
requirements of the Securities Act and the Trust Indenture Act and the
rules and regulations of the Commission thereunder or contains an untrue
statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing;
(vii) use its reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of such registration statement or any
post-effective amendment thereto at the earliest practicable date;
(viii) if requested by any managing underwriter or underwriters, any
placement or sales agent or any holder of Registrable Securities, promptly
incorporate in a prospectus supplement or post-effective amendment such
information as is required by the applicable rules and regulations of the
Commission and as such managing underwriter or underwriters, such agent or
such holder specifies should be included therein relating to the terms of
the sale of such Registrable Securities, including information with respect
to the principal amount of Registrable Securities being sold by such holder
or agent or to any underwriters, the name and description of such holder,
agent or underwriter, the offering price of such Registrable Securities and
any discount, commission or other compensation payable in respect thereof,
the purchase price being paid therefor by such underwriters and with
respect to any other terms of the offering of the Registrable Securities to
be sold by such holder or agent or to such underwriters; and make all
required filings of such prospectus supplement or post-effective amendment
promptly after notification of the matters to be incorporated in such
prospectus supplement or post-effective amendment;
(ix) furnish to each holder of Registrable Securities, each placement
or sales agent, if any, therefor, each underwriter, if any, thereof and the
respective counsel referred to in Section 3(b)(iv) an executed copy (or, in
the case of a holder of Registrable Securities, a conformed copy) of such
registration statement, each such amendment and supplement thereto (in each
case including all exhibits thereto (in the case of a holder of Registrable
Securities, upon request) and documents incorporated by reference therein)
and such number of copies of such registration statement (excluding
exhibits thereto and documents incorporated by reference therein unless
specifically so requested by such holder, agent or underwriter, as the case
may be) and of the prospectus included in such registration statement
(including each preliminary prospectus and any summary prospectus), in
conformity in all material respects with the applicable requirements of the
Securities Act and the Trust Indenture Act and the rules and regulations of
the Commission thereunder, and such other documents, as such holder, agent,
if any, and underwriter, if any, may reasonably request in order to
facilitate the offering and disposition of the Registrable Securities owned
by such holder, offered or sold by such agent or underwritten by such
underwriter and to permit such holder, agent and underwriter to satisfy the
prospectus delivery requirements of the Securities Act; and the Company and
the Trust hereby consent to the use of such prospectus (including such
preliminary and summary prospectus) and any amendment or supplement thereto
by each such holder and by any such agent and underwriter, in each case in
the form most recently
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<PAGE>
provided to such person by the Company or the Trust, in connection with the
offering and sale of the Registrable Securities covered by the prospectus
(including such preliminary and summary prospectus) or any supplement or
amendment thereto;
(x) use its reasonable best efforts to (A) register or qualify the
Registrable Securities to be included in such registration statement under
such securities laws or blue sky laws of such United States jurisdictions
as any holder of such Registrable Securities and each placement or sales
agent, if any, therefor and underwriter, if any, thereof shall reasonably
request, (B) keep such registrations or qualifications in effect and comply
with such laws so as to permit the continuance of offers, sales and
dealings therein in such jurisdictions during the period the Shelf
Registration is required to remain effective under Section 2(b) above and
for so long as may be necessary to enable any such holder, agent or
underwriter to complete its distribution of Securities pursuant to such
registration statement but in any event not later than the date through
which the Company and the Trust are required to keep the Shelf Registration
Effective pursuant to Section 2(b) and (C) take any and all other actions
as may be reasonably requested to enable each such holder, agent, if any,
and underwriter, if any, to consummate the disposition in such
jurisdictions of such Registrable Securities; PROVIDED, HOWEVER, that
neither the Company nor the Trust shall be required for any such purpose to
(1) qualify as a foreign corporation in any jurisdiction wherein it would
not otherwise be required to qualify but for the requirements of this
Section 3(b)(x), (2) consent to general service of process in any such
jurisdiction or (3) make any changes to its certificate of incorporation or
by-laws or any agreement between it and its stockholders;
(xi) use its reasonable best efforts to obtain the consent or approval
of each governmental agency or authority, whether federal, state or local,
which may be required to be obtained by the Company or the Trust to effect
the Shelf Registration or the offering or sale in connection therewith or
to enable the selling holder or holders to offer, or to consummate the
disposition of, their Registrable Securities;
(xii) cooperate with the holders of the Registrable Securities and the
managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold,
which certificates shall be printed, lithographed or engraved, or produced
by any combination of such methods, and which shall not bear any
restrictive legends, except as may be required by applicable law; and, in
the case of an underwritten offering, enable such Registrable Securities to
be in such denominations and registered in such names as the managing
underwriters may request at least two business days prior to any sale of
the Registrable Securities;
(xiii) provide a CUSIP number for all applicable Registrable
Securities, not later than the Effective Time;
(xiv) enter into one or more underwriting agreements, engagement
letters, agency agreements, "best efforts" underwriting agreements or
similar agreements, as appropriate, including customary provision agreed to
by the Company relating to indemnification and contribution, and take such
other actions in connection therewith as any holders of Registrable
Securities aggregating at least 33 1/3% in aggregate principal amount of
the Registrable Securities at the time outstanding shall reasonably request
in order to expedite or facilitate
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<PAGE>
the disposition of such Registrable Securities; PROVIDED, that the Company
and the Trust shall not be required to enter into any such agreement more
than once with respect to all of the Registrable Securities and may delay
entering into such agreement until the consummation of any underwritten
public offering which the Company shall have then undertaken;
(xv) whether or not an agreement of the type referred to in Section
(3)(b)(xiv) hereof is entered into and whether or not any portion of the
offering contemplated by such registration statement is an underwritten
offering or is made through a placement or sales agent or any other entity,
(A) make such representations and warranties to the holders of such
Registrable Securities and the placement or sales agent, if any, therefor
and the underwriters, if any, thereof in form, substance and scope as are
customarily made by the Company in connection with an offering of debt
securities pursuant to any appropriate agreement or to a registration
statement filed on the form applicable to the Shelf Registration; (B)
obtain an opinion of counsel to the Company and an opinion of counsel to
the Trust in each case in customary form and covering such matters, of the
type customarily covered by such an opinion, and in the case of the Company
as customarily given in public offerings of the Company's debt securities
as the managing underwriters, if any, or as any holders of at least 25% in
aggregate principal amount of the Registrable Securities at the time
outstanding may reasonably request, addressed to such holder or holders and
the placement or sales agent, if any, therefor and the underwriters, if
any, thereof and dated the effective date of such registration statement
(and if such registration statement contemplates an underwritten offering
of a part or all of the Registrable Securities, dated the date of the
closing under the underwriting agreement relating thereto); (C) obtain a
"cold comfort" letter or letters from the independent certified public
accountants of the Company addressed to the selling holders of Registrable
Securities, the placement or sales agent, if any, therefor or the
underwriters, if any, thereof, dated (i) the effective date of such
registration statement and (ii) the effective date of any prospectus
supplement to the prospectus included in such registration statement or
post-effective amendment to such registration statement which includes
audited financial statements as of a date or for a period subsequent to
that of the latest such statements included in such prospectus (and, if
such registration statement contemplates an underwritten offering pursuant
to any prospectus supplement to the prospectus included in such
registration statement or post-effective amendment to such registration
statement which includes unaudited or audited financial statements as of a
date or for a period subsequent to that of the latest such statements
included in such prospectus, dated the date of the closing under the
underwriting agreement relating thereto), such letter or letters to be in
customary form and covering such matters of the type customarily covered by
letters of such type in public offerings of debt securities of the Company;
(D) deliver such documents and certificates, including officers' or
trustees' or Administrators' certificates, as applicable, as may be
reasonably requested by any holders of at least 25% in aggregate principal
amount of the Registrable Securities at the time outstanding or the
placement or sales agent, if any, therefor and the managing underwriters,
if any, thereof to evidence the accuracy of the representations and
warranties made pursuant to clause (A) above or those contained in Section
5(a) hereof and the compliance with or satisfaction of any agreements or
conditions contained in the underwriting agreement or other agreement
entered into by the Company or the Trust, as applicable; and (E) undertake
such obligations relating to expense reimbursement, indemnification and
contribution as are provided in Section 6 hereof;
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(xvi) notify in writing each holder of Registrable Securities of any
proposal by the Company and/or the Trust to amend or waive any provision of
this Registration Rights Agreement pursuant to Section 9(h) hereof and of
any amendment or waiver effected pursuant thereto, each of which notices
shall contain the text of the amendment or waiver proposed or effected, as
the case may be;
(xvii) in the event that any broker-dealer registered under the
Exchange Act shall underwrite any Registrable Securities or participate as
a member of an underwriting syndicate or selling group or "assist in the
distribution" (within the meaning of the Rules of Conduct Practice and the
By-Laws of the National Association of Securities Dealers, Inc. ("NASD") or
any successor thereto, as amended from time to time) thereof, whether as a
holder of such Registrable Securities or as an underwriter, a placement or
sales agent or a broker or dealer in respect thereof, or otherwise, assist
such broker-dealer in complying with the requirements of such Rules and
By-Laws, including by (A) if such Rules shall so require, permitting a
"qualified independent underwriter" (as defined in such Schedule (or any
successor thereto)) to participate in the preparation of the registration
statement relating to such Registrable Securities, to exercise usual
standards of due diligence in respect thereto and, if any portion of the
offering contemplated by such registration statement is an underwritten
offering or is made through a placement or sales agent, to recommend the
yield of such Registrable Securities, (B) indemnifying any such qualified
independent underwriter to the extent of the indemnification of
underwriters provided in Section 6 hereof, and (C) providing such
information to such broker-dealer as may be required in order for such
broker-dealer to comply with the requirements of the Rules of Conduct of
the NASD; and
(xviii) make generally available to its security holders as soon as
practicable but in any event not later than eighteen months after the
effective date of such registration statement, an earning statement of the
Company and its subsidiaries complying with Section 11(a) of the Securities
Act (including, at the option of the Company, Rule 158 thereunder).
In case any of the foregoing obligations is dependent upon information provided
or to be provided by a party other than the Company or the Trust, such
obligation shall be subject to the provision of such information.
(c) In the event that the Company and the Trust would be required, pursuant
to Section 3(b)(vi)(F) above, to notify the selling holders of Registrable
Securities, the placement or sales agent, if any, therefor and the managing
underwriters, if any, thereof, the Company and the Trust shall promptly prepare
and furnish to each such holder, to each placement or sales agent, if any, and
to each such underwriter, if any, a reasonable number of copies of a prospectus
supplemented or amended so that, as thereafter delivered to purchasers of
Registrable Securities, such prospectus shall conform in all material respects
to the applicable requirements of the Securities Act and the Trust Indenture Act
and the rules and regulations of the Commission thereunder and shall not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances then existing. Each holder of Registrable
Securities agrees that upon receipt of any notice from the Company or the Trust,
pursuant to Section 3(b)(vi)(F) hereof, such holder shall forthwith discontinue
the disposition of Registrable Securities pursuant to the registration statement
applicable to such Registrable Securities until such holder (i) shall have
received copies
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of such amended or supplemented prospectus and, if so directed by the Company or
the Trust, such holder shall deliver to the Company (at the Company's expense)
all copies, other than permanent file copies, then in such holder's possession
of the prospectus covering such Registrable Securities at the time of receipt of
such notice or (ii) shall have received notice from the Company or the Trust
that the disposition of Registrable Securities pursuant to the Shelf
Registration may continue.
(d) The Company and the Trust may require each holder of Registrable
Securities as to which any registration pursuant to Section 2(b) is being
effected to furnish to the Company such information regarding such holder and
such holder's intended method of distribution of such Registrable Securities as
the Company and the Trust may from time to time reasonably request in writing,
but only to the extent that such information is required in order to comply with
the Securities Act. Each such holder agrees to notify the Company and the Trust
as promptly as practicable of any inaccuracy or change in information previously
furnished by such holder to the Company and the Trust or of the occurrence of
any event in either case as a result of which any prospectus relating to such
registration contains or would contain an untrue statement of a material fact
regarding such holder or such holder's intended method of disposition of such
Registrable Securities or omits to state any material fact regarding such holder
or such holder's intended method of disposition of such Registrable Securities
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, and promptly to furnish
to the Company and the Trust any additional information required to correct and
update any previously furnished information or required so that such prospectus
shall not contain, with respect to such holder or the disposition of such
Registrable Securities, an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.
(e) Until the expiration of three years after the Closing Date, the Company
will not, and will not permit any of its "affiliates" (as defined in Rule 144)
to, resell any of the Capital Securities or Debentures that have been reacquired
by any of them except pursuant to an effective registration statement under the
Act.
(f) In connection with the Company's and the Trust's obligations with
respect to the registration of Exchange Securities as contemplated by Section
2(a) (the "Exchange Registration"), if applicable, the Company and the Trust
shall, as soon as reasonably practicable (or as otherwise specified):
(i) prepare and file with the Commission such amendments and
supplements to the Exchange Offer Registration Statement and the prospectus
included therein as may be necessary to effect and maintain the
effectiveness thereof for the periods and purposes contemplated in Section
2(a) hereof and as may be required by the applicable rules and regulations
of the Commission and the instructions applicable to the form of the
Exchange Offer Registration Statement, and promptly provide each
broker-dealer holding Exchange Securities with such number of copies of the
prospectus included therein (as then amended or supplemented), in
conformity in all material respects with the requirements of the Securities
Act and the Trust Indenture Act and the rules and regulations of the
Commission
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<PAGE>
thereunder, as such broker-dealer reasonably may request prior to the
expiration of the Resale Period, for use in connection with resales of
Exchange Securities;
(ii) promptly notify each broker-dealer that has requested or received
copies of the prospectus included in the Exchange Offer Registration
Statement, and confirm such advice in writing, (A) when the Exchange Offer
Registration Statement or the prospectus included therein or any prospectus
amendment or supplement or post-effective amendment has been filed, and,
with respect to the Exchange Offer Registration Statement or any
post-effective amendment, when the same has become effective, (B) of any
comments by the Commission and by the Blue Sky or securities commissioner
or regulator of any state with respect thereto or any request by the
Commission for amendments or supplements to the Exchange Offer Registration
Statement or prospectus or for additional information, (C) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Exchange Offer Registration Statement or the initiation or threatening of
any proceedings for that purpose, (D) if at any time the representations
and warranties of the Company and/or the Trust contemplated by Section 5
cease to be true and correct in all material respects, (E) of the receipt
by the Company or the Trust of any notification with respect to the
suspension of the qualification of the Exchange Securities for sale in any
United States jurisdiction or the initiation or threatening of any
proceeding for such purpose, or (F) at any time during the Resale Period
when a prospectus is required to be delivered under the Securities Act,
that the Exchange Offer Registration Statement, prospectus, prospectus
amendment or supplement or post-effective amendment does not conform in all
material respects to the applicable requirements of the Securities Act and
the Trust Indenture Act and the rules and regulations of the Commission
thereunder or contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances then
existing;
(iii) in the event that the Company and the Trust would be required,
pursuant to Section 3(f)(ii)(F) above, to notify any broker-dealers holding
Exchange Securities, promptly prepare and furnish to each such holder a
reasonable number of copies of a prospectus supplemented or amended so
that, as thereafter delivered to purchasers of such Exchange Securities
during the Resale Period, such prospectus shall conform in all material
respects to the applicable requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the Commission thereunder
and shall not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances then
existing or notify such broker-dealers that the date of Exchange Securities
pursuant to the Exchange Offer Registration Statement may continue.
(iv) use its reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of the Exchange Offer Registration
Statement or any post-effective amendment thereto at the earliest
practicable date;
(v) use its reasonable best efforts to (A) register or qualify the
Exchange Securities under the securities laws or blue sky laws of such
jurisdictions as are contemplated by Section 2(a) no later than the
commencement of the Exchange Offer, (B) keep such registrations or
qualifications in effect and comply with such laws so as to permit the
continuance of offers,
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<PAGE>
sales and dealings therein in such jurisdictions until the expiration of
the Resale Period and (C) take any and all other actions as may be
reasonably necessary or advisable to enable each broker-dealer holding
Exchange Securities to consummate the disposition thereof in such
jurisdictions; PROVIDED, HOWEVER, that neither the Company nor the Trust
shall be required for any such purpose to (1) qualify as a foreign
corporation in any jurisdiction wherein it would not otherwise be required
to qualify but for the requirements of this Section 3(f)(v), (2) consent to
general service of process in any such jurisdiction or (3) make any changes
to its certificate of incorporation or by-laws or any agreement between it
and its stockholders;
(vi) use its reasonable best efforts to obtain the consent or approval
of each United States governmental agency or authority, whether federal,
state or local, which may be required to be obtained by the Company or the
Trust to effect the Exchange Registration, the Exchange Offer and the
offering and sale of Exchange Securities by broker-dealers during the
Resale Period;
(vii) provide a CUSIP number for all applicable Exchange Securities,
not later than the applicable Effective Time;
(viii) make generally available to its security holders as soon as
practicable but no later than eighteen months after the effective date of
such registration statement, an earning statement of the Company and its
subsidiaries complying with Section 11(a) of the Securities Act (including,
at the option of the Company, Rule 158 thereunder).
In case any of the foregoing obligations is dependent upon information provided
or to be provided by a party other than the Company or the Trust, such
obligation shall be subject to the provision of such information.
4. REGISTRATION EXPENSES.
The Company agrees to bear and to pay or cause to be paid promptly upon
request being made therefor all expenses incident to the Company's and the
Trust's performance of or compliance with this Registration Rights Agreement,
including (a) all Commission and any NASD registration and filing fees and
expenses, (b) all fees and expenses in connection with the qualification of the
Securities or Exchange Securities for offering and sale under the State
securities and blue sky laws referred to in Section 3(b)(x) and Section 3(f)(v)
hereof, including reasonable fees and disbursements of one counsel for the
placement or sales agent or underwriters in connection with such qualifications,
(c) all expenses relating to the preparation, printing, distribution and
reproduction of each registration statement required to be filed hereunder, each
prospectus included therein or prepared for distribution pursuant hereto, each
amendment or supplement to the foregoing, the certificates representing the
Securities and all other documents relating hereto, (d) messenger and delivery
expenses, (e) fees and expenses of the Trustee under the Indenture, the Property
Trustee and Debenture Trustee under the Trust Agreement and the Guarantee
Trustee under the Guarantee and of any escrow agent or custodian, (f) internal
expenses (including all salaries and expenses of the Company's officers and
employees performing legal or accounting duties), (g) fees, disbursements and
expenses of counsel and independent certified public accountants of the Company
(including the expenses of any opinions or "cold comfort" letters required by or
incident to such performance and compliance) and (h) reasonable fees,
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<PAGE>
disbursements and expenses of one counsel for the holders of Registrable
Securities retained in connection with a Shelf Registration, as selected by the
holders of at least a majority in aggregate principal amount of the Registrable
Securities being registered, and fees, expenses and disbursements of any other
persons, including special experts, retained by the Company in connection with
such registration (collectively, the "Registration Expenses"). To the extent
that any Registration Expenses are incurred, assumed or paid by any holder of
Registrable Securities or any placement or sales agent therefor or underwriter
thereof, the Company shall reimburse such person for the full amount of the
Registration Expenses so incurred, assumed or paid promptly after receipt of a
request therefor. Notwithstanding the foregoing, the holders of the Registrable
Securities being registered shall pay all agency fees and commissions and
underwriting discounts and commissions attributable to the sale of such
Registrable Securities and the fees and disbursements of any counsel or other
advisors or experts retained by such holders (severally or jointly), other than
the counsel and experts specifically referred to above.
5. REPRESENTATIONS AND WARRANTIES.
Each of the Company and the Trust represents and warrants to, and agrees
with, the Initial Purchaser and each of the holders from time to time of
Registrable Securities that:
(a) Each registration statement covering Registrable Securities and
each prospectus (including any preliminary or summary prospectus) contained
therein or furnished pursuant to Section 3(c) or Section 3(f) hereof and
any further amendments or supplements to any such registration statement or
prospectus, when it becomes effective or is filed with the Commission, as
the case may be, and, in the case of an underwritten offering of
Registrable Securities, at the time of the closing under the underwriting
agreement relating thereto, will conform in all material respects to the
applicable requirements of the Securities Act and the Trust Indenture Act
and the rules and regulations of the Commission thereunder and will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; and at all times subsequent to the Effective Time
when a prospectus would be required to be delivered under the Securities
Act, other than from (i) such time as a notice has been given to holders of
Registrable Securities pursuant to Section 3(b)(vi)(F) or Section
3(f)(ii)(F) hereof until (ii) such time as the Company furnishes an amended
or supplemented prospectus pursuant to Section 3(c) or Section 3(f)(iii)
hereof, each such registration statement, and each prospectus (including
any summary prospectus) contained therein or furnished pursuant to Section
3(b) or Section 3(f) hereof, as then amended or supplemented, will conform
in all material respects to the applicable requirements of the Securities
Act and the Trust Indenture Act and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing; PROVIDED, HOWEVER, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company and the Trust by a holder of Registrable Securities
expressly for use therein.
(b) Any documents incorporated by reference in any prospectus referred
to in Section 5(a) hereof, when they become or became effective or are or
were filed with the Commission, as
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the case may be, will conform or conformed in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and
none of such documents will contain or contained an untrue statement of a
material fact or will omit or omitted to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; PROVIDED, HOWEVER, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company and the
Trust by a holder of Registrable Securities expressly for use therein.
(c) The compliance by the Company and the Trust with all of the
provisions of this Registration Rights Agreement and the consummation of
the transactions herein contemplated will not constitute a breach of or
default under, the corporate charter or by-laws of the Company, or the
Trust Agreement of the Trust, or any material agreement, indenture or
instrument relating to indebtedness for money borrowed to which the Company
or to the best knowledge of the Company, the Trust is a party or, to the
best knowledge of the Company, the Trust, as applicable, any law, order,
rule, regulation or decree of any court or governmental agency or authority
located in the United States having jurisdiction over the Company or any
property of the Company or the Trust or any property of the Trust, as
applicable; and, to the best knowledge of the Company and the Trust, no
consent, authorization or order of, or filing or registration with, any
court or governmental agency or authority is required for the consummation
by the Company or the Trust, as applicable, of the transactions
contemplated by this Registration Rights Agreement, except the registration
under the Securities Act contemplated hereby, qualification of the
Indenture, the Guarantee and the Trust Agreement under the Trust Indenture
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under State securities or "blue sky"
laws.
(d) This Registration Rights Agreement has been duly authorized,
executed and delivered by the Company or the Trust, as applicable.
6. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY AND THE TRUST. Upon the registration of
the Registrable Securities pursuant to Section 2(a) or 2(b) hereof, and in
consideration of the agreements of the Initial Purchaser contained herein, and
as an inducement to the Initial Purchaser to purchase the Capital Securities,
each of the Company and the Trust shall, and it hereby agrees jointly and
severally to, indemnify and hold harmless each of the holders of Registrable
Securities to be included in such registration, and each person who participates
as a placement or sales agent or as an underwriter in any offering or sale of
such Registrable Securities and each person who controls any such person against
any losses, claims, damages or liabilities, joint or several, to which such
holder, agent or underwriter may become subject under the Securities Act, the
Exchange Act or other federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any registration
statement under which such Registrable Securities were registered under the
Securities Act, or any preliminary, final or summary prospectus contained
therein or furnished by the Company or the Trust to any such holder, agent or
underwriter, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state
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<PAGE>
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading and each of the Company and the Trust shall,
and it hereby agrees jointly and severally to, reimburse each such holder, such
agent and such underwriter for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
damage, liability or action; PROVIDED, HOWEVER, that the Company and the Trust
shall not be liable to any such person in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement, or preliminary, final or summary prospectus, or
amendment or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company and the Trust by holders of Registrable
Securities expressly for use therein. This indemnity agreement will be in
addition to any liability which the Company or the Trust may otherwise have.
(b) INDEMNIFICATION BY THE HOLDERS AND ANY AGENTS AND UNDERWRITERS. The
Company and the Trust may require, as a condition to including any Registrable
Securities in any registration statement filed pursuant to Section 2(b) hereof
and to entering into any underwriting agreement with respect thereto, that the
Company and the Trust shall have received an undertaking reasonably satisfactory
to it from the holder of such Registrable Securities and from each underwriter
named in any such underwriting agreement, severally and not jointly, to
indemnify and hold harmless the Company and the Trust, each of the Company's
directors, and each person who controls the Company or the Trust within the
meaning of either the Securities Act or the Exchange Act, to the same extent as
the foregoing indemnity from the Company and the Trust, but only with reference
to written information furnished to the Company and the Trust by or on behalf of
such person specifically for use in any registration statement, or any
preliminary or final or summary prospectus contained therein or any amendment or
supplement thereto. This indemnity agreement will be in addition to any
liability which any such person may otherwise have.
(c) Promptly after receipt by an indemnified party under Section 6(a)
or (b) of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party under
such subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
the indemnifying party from any liability which it may have to any indemnified
party otherwise than under Section 6(a) or (b). In case any such action is
brought against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel satisfactory to
such indemnified party; provided that, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under Section
8(a) or (b) for any
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<PAGE>
legal or other expenses subsequently incurred by such indemnified party (other
than reasonable costs of investigation) in connection with the defense thereof
unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate national counsel, approved by the Representatives, representing the
indemnified parties who are parties to such action), (ii) the indemnifying party
shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party; and except that, if clause (i) or (iii) is applicable, such
liability shall be only in respect of the counsel referred to in such clause (i)
or (iii).
(d) CONTRIBUTION. Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Section 6(a) or Section 6(b) are
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and the
indemnified party in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities (or actions in respect thereof),
as well as any other relevant equitable considerations. The relative fault of
such indemnifying party and indemnified party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by such indemnifying party or by such indemnified party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The parties hereto
agree that it would not be just and equitable if contributions pursuant to this
Section 6(d) were determined by pro rata allocation (even if the holders or any
agents or underwriters or all of them were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in this Section 6(d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages, or
liabilities (or actions in respect thereof) referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 6(d), no holder shall
be required to contribute any amount in excess of the amount by which the dollar
amount of the proceeds received by such holder from the sale of any Registrable
Securities (after deducting any fees, discounts and commissions applicable
thereto) exceeds the amount of any damages which such holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission, and no underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Registrable
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The holders' and any underwriters' obligations in this
Section 6(d)
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<PAGE>
to contribute shall be several in proportion to the principal amount of
Registrable Securities registered or underwritten, as the case may be, by them
and not joint.
(e) The obligations of the Company and the Trust under this Section 6 shall
be in addition to any liability which the Company and the Trust may otherwise
have and shall extend, upon the same terms and conditions, to each officer,
director and partner of each holder, agent and underwriter and each person, if
any, who controls any holder, agent or underwriter within the meaning of the
Securities Act; and the obligations of the holders and any agents or
underwriters contemplated by this Section 6 shall be in addition to any
liability which the respective holder, agent or underwriter may otherwise have
and shall extend, upon the same terms and conditions, to each officer and
director of the Company (including any person who, with his consent, is named in
any registration statement as about to become a director of the Company), to
each Trustee and Administrator under the Trust Agreement and to each person, if
any, who controls the Company and the Trust within the meaning of the Securities
Act.
7. UNDERWRITTEN OFFERINGS.
(a) SELECTION OF UNDERWRITERS. If any of the Registrable Securities covered
by the Shelf Registration are to be sold pursuant to an underwritten offering,
the managing underwriter or underwriters thereof shall be designated by the
holders of at least a majority in aggregate principal amount of the Registrable
Securities to be included in such offering, provided that such designated
managing underwriter or underwriters is or are reasonably acceptable to the
Company.
(b) PARTICIPATION BY HOLDERS. Each holder of Registrable Securities hereby
agrees with each other such holder that no such holder may participate in any
underwritten offering hereunder unless such holder (i) agrees to sell such
holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
8. RULE 144.
The Company covenants to the holders of Registrable Securities that the
Company shall use its reasonable best efforts to timely file the reports
required to be filed by it under the Exchange Act or the Securities Act
(including the reports under Section 13 and 15(d) of the Exchange Act referred
to in subparagraph (c)(1) of Rule 144 adopted by the Commission under the
Securities Act) and the rules and regulations adopted by the Commission
thereunder, and shall take such further action as any holder of Registrable
Securities may reasonably request, all to the extent required from time to time
to enable such holder to sell Registrable Securities without registration under
the Securities Act within the limitations of the exemption provided by Rule 144
under the Securities Act, as such Rule may be amended from time to time, or any
similar or successor rule or regulation hereafter adopted by the Commission.
Upon the request of any holder of Registrable Securities in connection with that
holder's sale pursuant to Rule 144, the Company shall deliver to such holder a
written statement as to whether it has complied with such requirements.
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<PAGE>
9. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. Each of the Company and the Trust
represents, warrants, covenants and agrees that it has not granted, and shall
not grant, registration rights with respect to Registrable Securities which
would be inconsistent with the terms contained in this Exchange and Registration
Rights Agreement.
(b) SPECIFIC PERFORMANCE. The parties hereto acknowledge that there would
be no adequate remedy at law if any party fails to perform any of its
obligations hereunder and that each party may be irreparably harmed by any such
failure, and accordingly agree that each party, in addition to any other remedy
to which it may be entitled at law or in equity, shall be entitled to compel
specific performance of the obligations of any other party under this Exchange
and Registration Rights Agreement in accordance with the terms and conditions of
this Exchange and Registration Rights Agreement, in any court of the United
States or any State thereof having jurisdiction.
(c) NOTICES. All notices, requests, claims, demands, waivers and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered by hand, if delivered personally or by courier, or
three days after being deposited in the mail (registered or certified mail,
postage prepaid, return receipt requested) as follows: If to the Company, to it
at First Union Corporation, One First Union Center, Charlotte, North Carolina
28288-0013, Attention: General Counsel; if to the Trust, to it at Wilmington
Trust Company, Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890-0001, Attention: Corporate Trust Administration; and if to a
holder, to the address of such holder set forth in the security register or
other records of the Trust or the Company, as the case may be, or to such other
address as the Company, the Trust or any such holder may have furnished to the
other in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
(d) PARTIES IN INTEREST. All the terms and provisions of this Registration
Rights Agreement shall be binding upon, shall inure to the benefit of and shall
be enforceable by the respective successors and assigns of the parties hereto.
In the event that any transferee of any holder of Registrable Securities shall
acquire Registrable Securities, in any manner, whether by gift, bequest,
purchase, operation of law or otherwise, such transferee shall, without any
further writing or action of any kind, be deemed a party hereto for all purposes
and such Registrable Securities shall be held subject to all of the terms of
this Registration Rights Agreement, and by taking and holding such Registrable
Securities such transferee shall be entitled to receive the benefits of, and be
conclusively deemed to have agreed to be bound by and to perform, all of the
applicable terms and provisions of this Registration Rights Agreement.
(e) SURVIVAL. The respective indemnities, agreements, representations,
warranties and each other provision set forth in this Registration Rights
Agreement or made pursuant hereto shall remain in full force and effect
regardless of any investigation (or statement as to the results thereof) made by
or on behalf of any holder of Registrable Securities, any director, officer or
partner of such holder, any agent or underwriter or any director, officer or
partner thereof, or any controlling person of any of the foregoing, and shall
survive delivery of and payment for the Registrable Securities pursuant to the
Purchase Agreement and the transfer and registration of Registrable Securities
by such holder and the consummation of an Exchange Offer.
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<PAGE>
(F) LAW GOVERNING. THIS REGISTRATION RIGHTS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
STATE OF NEW YORK.
(g) HEADINGS. The descriptive headings of the several Sections and
paragraphs of this Registration Rights Agreement are inserted for convenience
only, do not constitute a part of this Registration Rights Agreement and shall
not affect in any way the meaning or interpretation of this Registration Rights
Agreement.
(h) ENTIRE AGREEMENT; AMENDMENTS. This Registration Rights Agreement and
the other writings referred to herein (including the Trust Agreement, the
Guarantee and the Indenture) or delivered pursuant hereto which form a part
hereof contain the entire understanding of the parties with respect to its
subject matter. This Registration Rights Agreement supersedes all prior
agreements and understandings between the parties with respect to its subject
matter. This Registration Rights Agreement may be amended and the observance of
any term of this Registration Rights Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively) only by a
written instrument duly executed by the Company, the Trust and the holders of at
least a majority in aggregate principal amount of the Registrable Securities at
the time outstanding. Each holder of any Registrable Securities at the time or
thereafter outstanding shall be bound by any amendment or waiver effected
pursuant to this Section 9(h), whether or not any notice, writing or marking
indicating such amendment or waiver appears on such Registrable Securities or is
delivered to such holder.
(i) INSPECTION. For so long as this Registration Rights Agreement shall be
in effect, this Registration Rights Agreement and a complete list of the names
and addresses of all the holders of Registrable Securities shall be made
available for inspection and copying on any business day by any holder of
Registrable Securities for proper purposes only (which shall include any purpose
related to the rights of the holders of Registrable Securities under the
Securities, the Indenture and this Agreement) at the offices of the Company at
the address thereof set forth in Section 9(c) above, at the office of the
Property Trustee or at the office of the Trustee under the Indenture.
(j) COUNTERPARTS. This agreement may be executed by the parties in
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
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<PAGE>
Agreed to and accepted as of the date referred to above.
FIRST UNION INSTITUTIONAL CAPITAL II
By: \S\ KENNETH R. STANCLIFF
FIRST UNION CORPORATION
By: \S\ KENT S. HATHAWAY
Name:
Title:
MORGAN STANLEY & CO. INCORPORATED
By: \S\ HAROLD J. HENDERSHOT III
Name:
Title:
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<PAGE>
Exhibit 5(a)
January 28, 1997
Board of Directors,
First Union Corporation,
Charlotte, North Carolina 28288.
Gentlemen:
I am Executive Vice President, Secretary and General Counsel
of First Union Corporation, a North Carolina corporation (the "Corporation"),
and am rendering this opinion in connection with the registration under the
Securities Act of 1933 (the "Act") of $250,000,000 aggregate principal amount of
Junior Subordinated Deferrable Interest Debentures (the "Debt Securities") of
First Union Corporation, a North Carolina corporation (the "Corporation"),
$250,000,000 aggregate liquidation amount of Capital Securities (the "Capital
Securities") of First Union Institutional Capital II, a Delaware statutory
business trust (the "Issuer"), and the Guarantee with respect to the Capital
Securities (the "Guarantee") to be executed and delivered by the Corporation for
the benefit of the holders from time to time of the Capital Securities.
In that connection, I have examined such documents, corporate
records and other instruments as I have deemed necessary for the purposes of
this opinion. Based upon the foregoing, I am of the opinion as follows:
(1) The Corporation has been duly incorporated and is a
validly existing corporation under the laws of the State of North Carolina.
(2) When:
(i) the Registration Statement relating to the
Debt Securities, the Capital Securities and the
Guarantee has become effective under the Act;
<PAGE>
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(ii) the Guarantee Agreement relating to the Guarantee with
respect to the Capital Securities of the Issuer has been duly executed
and delivered;
(iii) the Debt Securities have been duly executed and
authenticated in accordance with the Indenture and issued and delivered
as contemplated in the Registration Statement; and
(iv) the Capital Securities have been duly executed in
accordance with the Amended and Restated Trust Agreement of the Issuer
and issued and delivered as contemplated in the Registration Statement,
the Debt Securities and the Guarantee relating to the Capital Securities of the
Issuer will constitute valid and legally binding obligations of the Corporation,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
I am licensed to practice law only in the State of North
Carolina. The foregoing opinion is limited to the Federal laws of the United
States and the laws of the State of North Carolina, and I am expressing no
opinion as to the effect of the laws of any jurisdiction. I have relied as to
certain matters on information obtained from public officials, officers of the
Corporation and other sources believed by me to be responsible.
I understand that the Corporation has received an opinion
regarding the Capital Securities from Richards, Layton & Finger, LLP, special
Delaware counsel for the Corporation and the Issuer. I am expressing no opinion
with respect to the matters contained in such opinion.
I hereby consent to the use of my name under the heading
"Validity of New Capital Securities" in the Prospectus forming a part of the
Registration Statement and to the use of this opinion for filing with the
Registration Statement as Exhibit 5(a) thereto. By providing such consent,
I do not admit that I am within the class of persons whose consent is required
under Section 7(a) of the Act.
Sullivan & Cromwell may rely on this opinion as if
it were addressed to them for purposes of rendering their
<PAGE>
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opinion dated the date hereof with respect to the Debt Securities and the
Guarantee.
Very truly yours,
Marion A. Cowell, Jr.
<PAGE>
Exhibit 5(b)
[Letterhead of Richards, Layton & Finger]
January 28, 1997
First Union Institutional Capital II
c/o First Union Corporation
One Union Center
Charlotte, NC 28288-0013
Re: First Union Institutional Capital II
Ladies and Gentlemen:
We have acted as special Delaware counsel for First Union
Corporation, a North Carolina corporation (the "Company"), and First Union
Institutional Capital II, 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 December 27,
1996 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on December 30, 1996;
(b) The Trust Agreement of the Trust, dated as of December 27,
1996, between the Company, as Depositor, and the trustee of the Trust named
therein;
<PAGE>
First Union Institutional Capital II
January 28, 1997
Page 2
(c) The Amended and Restated Trust Agreement of the Trust,
dated as of January 6, 1997 (including Exhibits A, C, E, F, G and H thereto)
(the "Trust Agreement"), among the Company, as Depositor, the trustees of the
Trust named therein (the "Trustees"), and the holders, from time to time, of
undivided beneficial interests in the assets of the Trust;
(d) The Registration Statement on Form S-4, including a
preliminary prospectus ("Prospectus"), relating to the 7.85% Capital Securities
of the Trust representing undivided beneficial interests in the assets of the
Trust, each, a "Capital Security" and collectively, the "Capital Securities", as
proposed to be filed by the Company and the Trust with the Securities and
Exchange Commission on or about January 28, 1997; and
(e) A Certificate of Good Standing for the Trust, dated
January 28, 1997, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise
defined are used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a) through (e) above.
In particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (e) above) that is referred to in or
incorporated by reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not reviewed that 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
Trust Agreement 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
<PAGE>
First Union Institutional Capital II
January 28, 1997
Page 3
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 a Capital Security is to be issued by
the Trust (collectively, the "Capital Security Holders") of a Capital Securities
Certificate for such Capital Security and the payment for the Capital Security
acquired by it, in accordance with the Trust Agreement and the Registration
Statement, and (vii) that the Capital Securities are issued and sold to the
Capital Security Holders in accordance with the Trust Agreement and the
Registration Statement. We have not participated in the preparation of the
Registration Statement 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 that 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. The Capital 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 Capital 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 Capital Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
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 "Validity
of New Capital Securities" 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
<PAGE>
First Union Institutional Capital II
January 28, 1997
Page 4
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,
BJK/dgw
Exhibit 5(c)
January 28, 1997
First Union Corporation,
One First Union Center,
Charlotte, North Carolina 28288.
Dear Sirs:
In connection with the registration under the Securities Act
of 1933 (the "Act") of $250,000,000 aggregate principal amount of Junior
Subordinated Deferrable Interest Debentures (the "Debt Securities") of First
Union Corporation, a North Carolina corporation (the "Corporation"),
$250,000,000 aggregate liquidation amount of Capital Securities (the "Capital
Securities") of First Union Institutional Capital II, a business trust created
under the laws of the State of Delaware (the "Issuer"), and the Guarantee with
respect to the Capital Securities (the "Guarantee") to be executed and delivered
by the Corporation for the benefit of the holders from time to time of the
Capital Securities, we, as your counsel, have examined such corporate records,
certificates and other documents, and such questions of law, as we have
considered necessary or appropriate for the purposes of this opinion.
<PAGE>
First Union Corporation -2-
Upon the basis of such examination, we advise you that, when:
(i) the Registration Statement relating to the
Debt Securities, the Capital Securities and the
Guarantee has become effective under the Act;
(ii) the Guarantee Agreement relating to the Guarantee with
respect to the Capital Securities of the Issuer has been duly executed
and delivered;
(iii) the Debt Securities have been duly executed and
authenticated in accordance with the Indenture and issued and delivered
as contemplated in the Registration Statement; and
(iv) the Capital Securities have been duly executed in
accordance with the Amended and Restated Trust Agreement of the Issuer
and issued and delivered as contemplated in the Registration Statement,
the Debt Securities and the Guarantee relating to the Capital Securities of the
Issuer will constitute valid and legally binding obligations of the Corporation,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
The foregoing opinion is limited to the Federal laws of the
United States, the laws of the State of New York and the laws of the State of
North Carolina, and we are expressing no opinion as to the effect of the laws of
any other jurisdiction. With respect to all matters of North Carolina law, we
have relied upon the opinion, dated January 28, 1997, of Marion A. Cowell, Jr.,
and our opinion is
<PAGE>
First Union Corporation -3-
subject to the same qualifications and limitations with respect to such matters
as are contained in Mr. Cowell's opinion.
We understand that you have received an opinion regarding the
Capital Securities from Richards, Layton & Finger, LLP, special Delaware counsel
for the Corporation and the Issuer. We are expressing no opinion with respect to
the matters contained in such opinion.
Also, we have relied as to certain matters on information
obtained from public officials, officers of the Corporation and other sources
believed by us to be responsible.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the references to us under the heading
"Validity of New Capital Securities" in the Prospectus. In giving such consent,
we do not thereby admit that we are in the category of persons whose consent
is required under Section 7 of the Act.
Very truly yours,
SULLIVAN & CROMWELL
<PAGE>
Exhibit 8
January 28, 1997
First Union Corporation,
One First Union Center,
Charlotte, North Carolina 28288.
Ladies and Gentlemen:
As special tax counsel to First Union Institutional Capital II
(the "Issuer") and First Union Corporation in connection with the exchange offer
by the Issuer of $250,000,000 of its 7.85% Capital Securities pursuant to a
preliminary Prospectus dated January , 1997 (the "Prospectus"), and assuming (i)
the holder of the Common Securities of the Issuer will have "substantial assets"
(other than the Common Securities) within the meaning of Treasury Regulations
Section 301.7701-2(d)(2) and (ii) the operative documents described in the
Prospectus will be performed in accordance with the terms described therein, we
hereby confirm to you our opinion as set forth
<PAGE>
First Union Corporation -2-
under the heading "Certain Federal Income Tax Consequences" in the Prospectus,
subject to the limitations set forth therein.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the references to us under the heading
"Certain Federal Income Tax Consequences" in the Prospectus. In giving such
consent, we do not thereby admit that we are in the category of persons whose
consent is required under Section 7 of the Act.
Very truly yours,
SULLIVAN & CROMWELL
<PAGE>
<PAGE>
EXHIBIT 23 (a)
CONSENT OF KPMG PEAT MARWICK LLP
BOARD OF DIRECTORS
FIRST UNION CORPORATION
We consent to the incorporation by reference in this Registration Statement
on Form S-4 of First Union Corporation and First Union Institutional Capital II
of our report dated January 11, 1996, relating to the consolidated balance
sheets of First Union Corporation and subsidiaries as of December 31, 1995 and
1994, and the related consolidated statements of income, changes in
stockholders' equity and cash flows for each of the years in the three-year
period ended December 31, 1995, which report appears in the 1995 Supplemental
Annual Report to Stockholders which is incorporated by reference in the 1995
Form 10-K of First Union Corporation. The report refers to a change in the
method of accounting for investments. We also consent to the reference to our
firm under the caption "Experts" in this Registration Statement.
KPMG PEAT MARWICK LLP
Charlotte, North Carolina
January 28, 1997
<PAGE>
EXHIBIT 24
FIRST UNION CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned directors and officers
of FIRST UNION CORPORATION (the "Corporation") hereby constitute and appoint
Marion A. Cowell, Jr. and Kent S. Hathaway, and each of them severally, the true
and lawful agents and attorneys-in-fact of the undersigned with full power and
authority in said agents and the attorneys-in-fact, and in any one of them, to
sign for the undersigned and in their respective names as directors and officers
of the Corporation, one or more Registration Statements to be filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
relating to the issuance of (i) up to $257,732,000 principal amount of a series
of junior subordinated debentures of the Corporation in exchange for, and having
substantially the same terms as, up to $257,732,000 principal amount of the
Corporation's 7.85% Junior Subordinated Deferrable Interest Debentures due
January 1, 2027, (ii) a guarantee of the Corporation in exchange for, and having
substantially the same terms as, the Guarantee of the Corporation dated January
6, 1997, with respect to $250,000,000 in liquidation value of the 7.85% Capital
Securities issued by First Union Institutional Capital II, a trust created under
the laws of the State of Delaware (the "Issuer"), on January 6, 1997 (the
"Capital Securities"), (iii) up to $250,000,000 in liquidation value of capital
securities of the Issuer in exchange for, and having substantially the same
terms as, up to $250,000,000 in liquidation value of the Capital Securities, and
(iv) such rights, interests and agreements covered by such Registration
Statements that relate to the securities covered by the foregoing clauses (i),
(ii) or (iii), and to sign any and all amendments to such Registration
Statements.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
<S> <C> <C>
/s/ EDWARD E. CRUTCHFIELD Chairman and Chief Executive January 28, 1997
EDWARD E. CRUTCHFIELD Officer and Director
/s/ ROBERT T. ATWOOD Executive Vice President and January 28, 1997
ROBERT T. ATWOOD Chief Financial Officer
/s/ JAMES H. HATCH Senior Vice President and Controller January 28, 1997
JAMES H. HATCH (Principal Accounting Officer)
/s/ EDWARD E. BARR Director January 28, 1997
EDWARD E. BARR
/s/ G. ALEX BERNHARDT Director January 27, 1997
G. ALEX BERNHARDT
Director
W. WALDO BRADLEY
/s/ ROBERT J. BROWN Director January 27, 1997
ROBERT J. BROWN
/s/ ROBERT D. DAVIS Director January 28, 1997
ROBERT D. DAVIS
Director
R. STUART DICKSON
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Director
B. F. DOLAN
/s/ RODDEY DOWD, SR. Director January 28, 1997
RODDEY DOWD, SR.
Director
JOHN R. GEORGIUS
/s/ ARTHUR M. GOLDBERG Director January 28, 1997
ARTHUR M. GOLDBERG
/s/ WILLIAM H. GOODWIN, JR. Director January 27, 1997
WILLIAM H. GOODWIN, JR.
/s/ BRENTON S. HALSEY Director January 28, 1997
BRENTON S. HALSEY
/s/ HOWARD H. HAWORTH Director January 28, 1997
HOWARD H. HAWORTH
/s/ FRANK M. HENRY Director January 28, 1997
FRANK M. HENRY
/s/ LEONARD G. HERRING Director January 28, 1997
LEONARD G. HERRING
/s/ JUAN RODRIGUEZ INCIARTE Director January 28, 1997
JUAN RODRIGUEZ INCIARTE
/s/ JACK A. LAUGHERY Director January 27, 1997
JACK A. LAUGHERY
Director
MAX LENNON
Director
RADFORD D. LOVETT
/s/ JOSEPH NEUBAUER Director January 27, 1997
JOSEPH NEUBAUER
/s/ HENRY D. PERRY, JR. Director January 27, 1997
HENRY D. PERRY, JR.
/s/ RANDOLPH N. REYNOLDS Director January 28, 1997
RANDOLPH N. REYNOLDS
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Director
RUTH G. SHAW
Director
CHARLES M. SHELTON, SR.
/s/ LANTY L. SMITH Director January 28, 1997
LANTY L. SMITH
/s/ ANTHONY P. TERRACCIANO Director January 28, 1997
ANTHONY P. TERRACCIANO
/s/ DEWEY L. TROGDON Director January 28, 1997
DEWEY L. TROGDON
/s/ JOHN D. UIBLE Director January 28, 1997
JOHN D. UIBLE
/s/ B. J. WALKER Director January 28, 1997
B. J. WALKER
</TABLE>
Exhibit 25(a)
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) X
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
FIRST UNION CORPORATION
(Exact name of obligor as specified in its charter)
North Carolina 56-0898180
(State of incorporation) (I.R.S. employer identification no.)
One First Union Center
Charlotte, North Carolina 28288-0013
(Address of principal executive offices) (Zip Code)
Junior Subordinated Deferrable Interest Debentures
of First Union Corporation
(Title of the indenture securities)
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust
powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the obligor
is not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which
includes the certificate of authority of Wilmington Trust
Company to commence business and the authorization of
Wilmington Trust Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321
(b) of
Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 17th day
of January, 1997
WILMINGTON TRUST COMPANY
[SEAL]
Attest:/s/ Emmett R. Harmon By:/s/ Norma P. Closs
Assistant Secretary Name: Norma P. Closs
Title: Vice President
2
<PAGE>
EXHIBIT A
AMENDED CHARTER
Wilmington Trust Company
Wilmington, Delaware
As existing on May 9, 1987
<PAGE>
Amended Charter
or
Act of Incorporation
of
Wilmington Trust Company
Wilmington Trust Company, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "Wilmington Trust Company" by an amendment filed
in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended shall
in its entirety read as follows:
First: - The name of this corporation is Wilmington Trust Company.
Second: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington,
County of New Castle; the name of its resident agent is Wilmington
Trust Company whose address is Rodney Square North, in said City. In
addition to such principal office, the said corporation maintains
and operates branch offices in the City of Newark, New Castle
County, Delaware, the Town of Newport, New Castle County, Delaware,
at Claymont, New Castle County, Delaware, at Greenville, New Castle
County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate
branch offices at Ninth and Shipley Streets, 418 Delaware Avenue,
2120 Market Street, and 3605 Market Street, all in the City of
Wilmington, New Castle County, Delaware, and such other branch
offices or places of business as may be authorized from time to time
by the agency or agencies of the government of the State of Delaware
empowered to confer such authority.
Third: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this
Corporation are to do any or all of the things herein mentioned as
fully and to the same extent as natural persons might or could do
and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any Court of
law or equity and to make and use a common seal, and alter
the seal at pleasure, to hold, purchase, convey, mortgage or
otherwise deal in real and personal estate and property, and
to appoint such officers and agents as the business of the
Corporation shall require, to make by-laws not inconsistent
with the
<PAGE>
Constitution or laws of the United States or of this State,
to discount bills, notes or other evidences of debt, to
receive deposits of money, or securities for money, to buy
gold and silver bullion and foreign coins, to buy and sell
bills of exchange, and generally to use, exercise and enjoy
all the powers, rights, privileges and franchises incident
to a corporation which are proper or necessary for the
transaction of the business of the Corporation hereby
created.
(2) To insure titles to real and personal property, or any
estate or interests therein, and to guarantee the holder of
such property, real or personal, against any claim or
claims, adverse to his interest therein, and to prepare and
give certificates of title for any lands or premises in the
State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management of
funds, and the purchase, sale, management and disposal of
property of all descriptions, and to prepare and execute all
papers which may be necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers of
every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry,
plate, deeds, bonds and any and all other personal property
of every sort and kind, from executors, administrators,
guardians, public officers, courts, receivers, assignees,
trustees, and from all fiduciaries, and from all other
persons and individuals, and from all corporations whether
state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two
parties, and in like manner may act as Treasurer of any
corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage,
bond or other instrument issued by any state, municipality,
body politic, corporation, association or person, either
alone or in conjunction with any other person or persons,
corporation or corporations.
(8) To guarantee the validity, performance or effect of any
contract or
2
<PAGE>
agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or
persons, for the faithful performance of any trust, office,
duty, contract or agreement, either by itself or in
conjunction with any other person, or persons, corporation,
or corporations, or in like manner become surety upon any
bond, recognizance, obligation, judgment, suit, order, or
decree to be entered in any court of record within the State
of Delaware or elsewhere, or which may now or hereafter be
required by any law, judge, officer or court in the State of
Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian, bailee, or
in any other trust capacity in the receiving, holding,
managing, and disposing of any and all estates and property,
real, personal or mixed, and to be appointed as such
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian or bailee
by any persons, corporations, court, officer, or authority,
in the State of Delaware or elsewhere; and whenever this
Corporation is so appointed by any person, corporation,
court, officer or authority such trustee, trustee in
bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other
trust capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as
security for the performance of the duties devolving upon it
by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake or
be called upon to perform, or for the assumption of any
responsibility the said Corporation may be entitled to
receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any
private, public or municipal corporation within and without
the State of Delaware, or of the Government of the United
States, or of any state, territory, colony, or possession
thereof, or of any foreign government or country; to
receive, collect, receipt for, and dispose of interest,
dividends and income upon and from any of the bonds,
mortgages, debentures, notes, shares of capital stock,
securities, obligations, contracts, evidences of
indebtedness and other property held and owned by it, and to
exercise in respect of all such bonds, mortgages,
debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and other
property, any and all the rights, powers and privileges of
individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the moneys of
the Corporation upon such securities and in such manner as
it may think fit and proper, and from time to time to vary
or
3
<PAGE>
realize such investments; to issue bonds and secure the same
by pledges or deeds of trust or mortgages of or upon the
whole or any part of the property held or owned by the
Corporation, and to sell and pledge such bonds, as and when
the Board of Directors shall determine, and in the promotion
of its said corporate business of investment and to the
extent authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge, mortgage and convey real and
personal property of any name and nature and any estate or
interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have the
following powers:
(1) To do any or all of the things herein set forth, to the
same extent as natural persons might or could do, and in any
part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of the
assets and liabilities of any person, firm, association or
corporation, and to pay for the same in cash, stock of this
Corporation, bonds or otherwise; to hold or in any manner to
dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any
part of any business so acquired, and to exercise all the
powers necessary or convenient in and about the conduct and
management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien,
and to lease, sell, exchange, transfer, or in any manner
whatever dispose of property, real, personal or mixed,
wherever situated.
(4) To enter into, make, perform and carry out contracts of
every kind with any person, firm, association or
corporation, and, without limit as to amount, to draw, make,
accept, endorse, discount, execute and issue promissory
notes, drafts, bills of exchange, warrants, bonds,
debentures, and other negotiable or transferable
instruments.
(5) To have one or more offices, to carry on all or any of
its operations and businesses, without restriction to the
same extent as natural persons might or could do, to
purchase or otherwise acquire, to hold, own, to mortgage,
sell, convey or otherwise dispose of, real and personal
property, of every class and description, in any State,
District, Territory or Colony of the United States, and in
any foreign country or place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this paragraph
shall (except where otherwise expressed in said paragraph)
be nowise limited or restricted by reference to or inference
4
<PAGE>
from the terms of any other clause of this or any other
paragraph in this charter, but that the objects, purposes
and powers specified in each of the clauses of this
paragraph shall be regarded as independent objects, purposes
and powers.
Fourth: - (a) The total number of shares of all classes of stock
which the Corporation shall have authority to issue is forty-one
million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par
value $10.00 per share (hereinafter referred to as
"Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par
value $1.00 per share (hereinafter referred to as "Common
Stock").
(b) Shares of Preferred Stock may be issued from time to time in one
or more series as may from time to time be determined by the Board
of Directors each of said series to be distinctly designated. All
shares of any one series of Preferred Stock shall be alike in every
particular, except that there may be different dates from which
dividends, if any, thereon shall be cumulative, if made cumulative.
The voting powers and the preferences and relative, participating,
optional and other special rights of each such series, and the
qualifications, limitations or restrictions thereof, if any, may
differ from those of any and all other series at any time
outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article Fourth, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by
resolution or resolutions adopted prior to the issuance of any
shares of a particular series of Preferred Stock, the voting powers
and the designations, preferences and relative, optional and other
special rights, and the qualifications, limitations and restrictions
of such series, including, but without limiting the generality of
the foregoing, the following:
(1) The distinctive designation of, and the number of shares
of Preferred Stock which shall constitute such series, which
number may be increased (except where otherwise provided by
the Board of Directors) or decreased (but not below the
number of shares thereof then outstanding) from time to time
by like action of the Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred Stock
of such series shall be paid, the extent of the preference
or relation, if any, of such dividends to the dividends
payable on any other class or classes, or series of the same
or other class of stock and whether such dividends shall be
cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of
such series to
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<PAGE>
convert the same into or exchange the same for, shares of
any other class or classes or of any series of the same or
any other class or classes of stock of the Corporation and
the terms and conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be
subject to redemption, and the redemption price or prices
and the time or times at which, and the terms and conditions
on which, Preferred Stock of such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of
such series upon the voluntary or involuntary liquidation,
merger, consolidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of
such series; and
(7) The voting powers, if any, of the holders of such series
of Preferred Stock which may, without limiting the
generality of the foregoing include the right, voting as a
series or by itself or together with other series of
Preferred Stock or all series of Preferred Stock as a class,
to elect one or more directors of the Corporation if there
shall have been a default in the payment of dividends on any
one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of
Directors may determine.
(c) (1) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of section (b) of this Article Fourth), if any, shall
have been met and after the Corporation shall have complied with all
the requirements, if any, with respect to the setting aside of sums
as sinking funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this Article
Fourth), and subject further to any conditions which may be fixed in
accordance with the provisions of section (b) of this Article
Fourth, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to
time by the Board of Directors.
(2) After distribution in full of the preferential amount,
if any, (fixed in accordance with the provisions of section
(b) of this Article Fourth), to be distributed to the
holders of Preferred Stock in the event of voluntary or
involuntary liquidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation, the holders
of the Common Stock shall be entitled to receive all of the
remaining assets of the Corporation, tangible and
intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares
of Common Stock held by them
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respectively.
(3) Except as may otherwise be required by law or by the
provisions of such resolution or resolutions as may be
adopted by the Board of Directors pursuant to section (b) of
this Article Fourth, each holder of Common Stock shall have
one vote in respect of each share of Common Stock held on
all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock
or of options, warrants or other rights to purchase shares of any
class or series of stock or of other securities of the Corporation
shall have any preemptive right to purchase or subscribe for any
unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or series,
or bonds, certificates of indebtedness, debentures or other
securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of
stock or securities convertible into or exchangeable for stock, or
carrying any right to purchase stock, may be issued and disposed of
pursuant to resolution of the Board of Directors to such persons,
firms, corporations or associations, whether such holders or others,
and upon such terms as may be deemed advisable by the Board of
Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and
rights of each other series of Preferred Stock shall, in each case,
be as fixed from time to time by the Board of Directors in the
resolution or resolutions adopted pursuant to authority granted in
section (b) of this Article Fourth and the consent, by class or
series vote or otherwise, of the holders of such of the series of
Preferred Stock as are from time to time outstanding shall not be
required for the issuance by the Board of Directors of any other
series of Preferred Stock whether or not the powers, preferences and
rights of such other series shall be fixed by the Board of Directors
as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided,
however, that the Board of Directors may provide in the resolution
or resolutions as to any series of Preferred Stock adopted pursuant
to section (b) of this Article Fourth that the consent of the
holders of a majority (or such greater proportion as shall be
therein fixed) of the outstanding shares of such series voting
thereon shall be required for the issuance of any or all other
series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series
of Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the
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Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
(h) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased
from time to time by the affirmative vote of the holders of a
majority of the stock of the Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of
directors constituting the entire Board shall be not less than five
nor more than twenty-five as fixed from time to time by vote of a
majority of the whole Board, provided, however, that the number of
directors shall not be reduced so as to shorten the term of any
director at the time in office, and provided further, that the
number of directors constituting the whole Board shall be
twenty-four until otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of one
class expiring each year. At the annual meeting of stockholders in
1982, directors of the first class shall be elected to hold office
for a term expiring at the next succeeding annual meeting, directors
of the second class shall be elected to hold office for a term
expiring at the second succeeding annual meeting and directors of
the third class shall be elected to hold office for a term expiring
at the third succeeding annual meeting. Any vacancies in the Board
of Directors for any reason, and any newly created directorships
resulting from any increase in the directors, may be filled by the
Board of Directors, acting by a majority of the directors then in
office, although less than a quorum, and any directors so chosen
shall hold office until the next annual election of directors. At
such election, the stockholders shall elect a successor to such
director to hold office until the next election of the class for
which such director shall have been chosen and until his successor
shall be elected and qualified. No decrease in the number of
directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding
the fact that some lesser percentage may be specified by law, this
Charter or Act of Incorporation or the ByLaws of the Corporation),
any director or the entire Board of Directors of the Corporation may
be removed at any time without cause, but only by the affirmative
vote of the holders of two-thirds or more of the outstanding shares
of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one
class) cast at a meeting of the stockholders called for that
8
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purpose.
(d) Nominations for the election of directors may be made by the
Board of Directors or by any stockholder entitled to vote for the
election of directors. Such nominations shall be made by notice in
writing, delivered or mailed by first class United States mail,
postage prepaid, to the Secretary of the Corporation not less than
14 days nor more than 50 days prior to any meeting of the
stockholders called for the election of directors; provided,
however, that if less than 21 days' notice of the meeting is given
to stockholders, such written notice shall be delivered or mailed,
as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of
the meeting was mailed to stockholders. Notice of nominations which
are proposed by the Board of Directors shall be given by the
Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal occupation or
employment of such nominee and (iii) the number of shares of stock
of the Corporation which are beneficially owned by each such
nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine
and declare to the meeting that a nomination was not made in
accordance with the foregoing procedure, and if he should so
determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may be
taken without a meeting, and the power of stockholders to consent in
writing, without a meeting, to the taking of any action is
specifically denied.
Sixth: - The Directors shall choose such officers, agent and
servants as may be provided in the By-Laws as they may from time to
time find necessary or proper.
Seventh: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon corporations
organized under the Act entitled "An Act Providing a General
Corporation Law", approved March 10, 1899, as from time to time
amended.
Eighth: - This Act shall be deemed and taken to be a private Act.
Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a majority
of the whole Board, may designate any of their number to constitute
an Executive Committee,
9
<PAGE>
which Committee, to the extent provided in said resolution, or in
the By-Laws of the Company, shall have and may exercise all of the
powers of the Board of Directors in the management of the business
and affairs of the Corporation, and shall have power to authorize
the seal of the Corporation to be affixed to all papers which may
require it.
Eleventh: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.
Twelfth: - The Corporation may transact business in any part of the
world.
Thirteenth: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation
by a vote of the majority of the entire Board. The stockholders may
make, alter or repeal any By-Law whether or not adopted by them,
provided however, that any such additional By-Laws, alterations or
repeal may be adopted only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class).
Fourteenth: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be
from time to time designated by them.
Fifteenth: - (a) In addition to any affirmative vote required by
law, and except as otherwise expressly provided in sections (b) and
(c) of this Article Fifteenth:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii) any
other corporation (whether or not itself an Interested
Stockholder), which, after such merger or consolidation,
would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate fair
market value of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities
or other
10
<PAGE>
property (or a combination thereof) having an aggregate fair
market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect,
directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary
which is directly or indirectly owned by any Interested
Stockholder, or any Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article Fifteenth as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this
Article Fifteenth shall mean any transaction which is
referred to any one or more of clauses (A) through (E) of
paragraph 1 of the section (a).
(b) The provisions of section (a) of this Article Fifteenth
shall not be applicable to any particular business
combination and such business combination shall require only
such affirmative vote as is required by law and any other
provisions of the Charter or Act of Incorporation of By-Laws
if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any
Subsidiary) who or which as of the record date for the determination
of stockholders entitled to notice of and to vote on such business
combination, or immediately prior to the consummation of any such
transaction:
(A) is the beneficial owner, directly or indirectly, of more
than 10% of the
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<PAGE>
Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of the Corporation which were at any
time within two years prior thereto beneficially owned by
any Interested Stockholder, and such assignment or
succession shall have occurred in the course of a
transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own, directly
or indirectly, or
(B) which such person or any of its Affiliates or Associates
has (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (ii) the right to vote
pursuant to any agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly, by
any other person with which such first mentioned person or
any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of capital stock
of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any
other Voting Shares which may be issuable pursuant to any agreement,
or upon exercise of conversion rights, warrants or options or
otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on December
31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of
any class of equity security (as defined in Rule 3a11-1 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as in effect in December 31, 1981) is owned, directly or
indirectly, by the Corporation; provided, however, that for the
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<PAGE>
purposes of the definition of Investment Stockholder set forth in
paragraph (2) of this section (c), the term "Subsidiary" shall mean
only a corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the Corporation.
(d) majority of the directors shall have the power and duty
to determine for the purposes of this Article Fifteenth on
the basis of information known to them, (1) the number of
Voting Shares beneficially owned by any person (2) whether a
person is an Affiliate or Associate of another, (3) whether
a person has an agreement, arrangement or understanding with
another as to the matters referred to in paragraph (3) of
section (c), or (4) whether the assets subject to any
business combination or the consideration received for the
issuance or transfer of securities by the Corporation, or
any Subsidiary has an aggregate fair market value of
$1,00,000 or more.
(e) Nothing contained in this Article Fifteenth shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
Sixteenth: Notwithstanding any other provision of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and in
addition to any other vote that may be required by law, this Charter
or Act of Incorporation by the By-Laws), the affirmative vote of the
holders of at least two-thirds of the outstanding shares of the
capital stock of the Corporation entitled to vote generally in the
election of directors (considered for this purpose as one class)
shall be required to amend, alter or repeal any provision of
Articles Fifth, Thirteenth, Fifteenth or Sixteenth of this Charter
or Act of Incorporation.
Seventeenth: (a) a Director of this Corporation shall not be liable
to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a Director, except to the extent such
exemption from liability or limitation thereof is not permitted
under the Delaware General Corporation Laws as the same exists or
may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph
shall not adversely affect any right or protection of a
Director of the Corporation existing hereunder with respect
to any act or omission occurring prior to the time of such
repeal or modification."
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EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
As existing on December 21, 1995
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
Stockholders' Meetings
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or at
such other date, time, or place as may be designated by resolution by the Board
of Directors.
Section 2. Special meetings of all stockholders may be called at any
time by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given
by mailing to each stockholder at least ten (10 days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
Directors
Section 1. The number and classification of the Board of Directors
shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72)
years shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed
and conducted by the Board of Directors.
Section 5. Regular meetings of the Board of Directors shall be held
on the third Thursday of each month at the principal office of the Company, or
at such other place and time as may be designated by the Board of Directors, the
Chairman of the Board, or the
<PAGE>
President.
Section 6. Special meetings of the Board of Directors may be called
at any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of
any special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of Directors,
although less than a quorum, shall have the right to elect the successor who
shall hold office for the remainder of the full term of the class of directors
in which the vacancy occurred, and until such director's successor shall have
been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or division of the Company as it may deem
advisable.
ARTICLE III
Committees
Section I. Executive Committee
(A) The Executive Committee shall be composed of not
more than nine members who shall be selected by the Board of Directors from its
own members and who
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shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of
the Board of Directors when it is not in session to transact all business for
and in behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal
office of the Company or elsewhere in its discretion at such times to be
determined by a majority of its members, or at the call of the Chairman of the
Executive Committee or at the call of the Chairman of the Board of Directors.
The majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Executive Committee may be held
at any time when a quorum is present.
(D) Minutes of each meeting of the Executive Committee
shall be kept and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend
all investments that may be made of the funds of the Company, and shall direct
the disposal of the same, in accordance with such rules and regulations as the
Board of Directors from time to time make.
(F) In the event of a state of disaster of sufficient
severity to prevent the conduct and management of the affairs and business of
the Company by its directors and officers as contemplated by these By-Laws any
two available members of the Executive Committee as constituted immediately
prior to such disaster shall constitute a quorum of that Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the provisions of Article III of these By-Laws; and if less than three
members of the Trust Committee is constituted immediately prior to such disaster
shall be available for the transaction of its business, such Executive Committee
shall also be empowered to exercise all of the powers reserved to the Trust
Committee under Article III Section 2 hereof. In the event of the
unavailability, at such time, of a minimum of two members of such Executive
Committee, any three available directors shall constitute the Executive
Committee for the full conduct and management of the affairs and business of the
Company in accordance with the foregoing provisions of this Section. This By-Law
shall be subject to implementation by Resolutions of the Board of Directors
presently existing or hereafter passed from time to time for that purpose, and
any provisions of these By-Laws (other than this Section) and any resolutions
which are contrary to the provisions of this Section or to the provisions of any
such implementary Resolutions shall be suspended during such a disaster period
until it shall be determined by any interim Executive Committee acting under
this section that it shall be to the advantage of the Company to resume the
conduct and management of its affairs and business under all of the other
provisions of these By-Laws.
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Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more
than thirteen members who shall be selected by the Board of Directors, a
majority of whom shall be members of the Board of Directors and who shall hold
office during the pleasure of the Board.
(B) The Trust Committee shall have general supervision
over the Trust Department and the investment of trust funds, in all matters,
however, being subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal
office of the Company or elsewhere in its discretion at least once a month. A
majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Trust Committee may be held at
any time when a quorum is present.
(D) Minutes of each meeting of the Trust Committee shall
be kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint
Committees and/or designate officers or employees of the Company to whom
supervision over the investment of trust funds may be delegated when the Trust
Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five
members who shall be selected by the Board of Directors from its own members,
none of whom shall be an officer of the Company, and shall hold office at the
pleasure of the Board.
(B) The Audit Committee shall have general supervision
over the Audit
Division in all matters however subject to the approval of the Board of
Directors; it shall consider all matters brought to its attention by the officer
in charge of the Audit Division, review all reports of examination of the
Company made by any governmental agency or such independent auditor employed for
that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever
the majority of its members shall deem it to be proper for the transaction of
its business, and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not
more than
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<PAGE>
five (5) members who shall be selected by the Board of Directors from its own
members who are not officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general advise
upon all matters of policy concerning the Company brought to its attention by
the management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called
at any time by the Chairman of the Compensation Committee, the Chairman of the
Board of Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be
elected by the Board of Directors as an associate director, to serve during the
pleasure of the Board.
(B) An associate director shall be entitled to attend
all directors meetings and participate in the discussion of all matters brought
to the Board, with the exception that he would have no right to vote. An
associate director will be eligible for appointment to Committees of the
Company, with the exception of the Executive Committee, Audit Committee and
Compensation Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of
any Committee created under Article III of the By-Laws of this Company, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absence or disqualified member.
ARTICLE IV
Officers
Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers and
shall perform such duties as the Board of Directors may from time to time confer
and direct. He shall also exercise such powers and perform such duties as may
from time to time be agreed upon between himself and the President of the
Company.
Section 2. The Vice Chairman of the Board of Directors shall preside
at all meetings of the Board of Directors at which the Chairman of the Board
shall not be present
5
<PAGE>
and shall have such further authority and powers and shall perform such duties
as the Board of Directors or the Chairman of the Board may from time to time
confer and direct.
Section 3. The President shall have the powers and duties pertaining
to the office of the President conferred or imposed upon him by statute or
assigned to him by the Board of Directors in the absence of the Chairman of the
Board the President shall have the powers and duties of the Chairman of the
Board.
Section 4. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and such
other powers and duties as may from time to time be assigned to them by the
Board of Directors, the Executive Committee, the Chairman of the Board or the
President and by the officer in charge of the department or division to which
they are assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings and
to recording the same in the minute books of the Company. In addition to the
other notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and responsible
for all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller
officers however
6
<PAGE>
denominated, who may perform the duties of the Controller and such duties as may
be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the Auditor and
such duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined from
time to time by the Board of Directors, who shall ex officio hold the office
Assistant Secretary of this Company and who may perform such duties as may be
prescribed by the officer in charge of the department or division to whom they
are assigned.
Section 11. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices, subject
to the direction of the Board of Directors, the Executive Committee, Chairman of
the Board of Directors or the President and the officer in charge of the
department or division to which they are assigned.
ARTICLE V
Stock and Stock Certificates
Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of stock
shall be recorded.
Section 2. Certificate of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of stock
shall be issued only upon giving such security as may be satisfactory to the
Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders entitled
to notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
7
<PAGE>
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.
ARTICLE VI
Seal
Section 1. The corporate seal of the Company shall be in the
following form:
Between two concentric circles the words "Wilmington
Trust Company" within the inner circle the words
"Wilmington, Delaware."
ARTICLE VII
Fiscal Year
Section 1. The fiscal year of the Company shall be the calendar
year.
ARTICLE VIII
Execution of Instruments of the Company
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as although
expressly authorized by the Board of Directors and/or the Executive Committee.
8
<PAGE>
ARTICLE IX
Compensation of Directors and Members of Committees
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable honoraria
or fees for attending meetings of the Board of Directors as the Board of
Directors may from time to time determine. Directors and associate directors who
serve as members of committees, other than salaried employees of the Company,
shall be paid such reasonable honoraria or fees for services as members of
committees as the Board of Directors shall from time to time determine and
directors and associate directors may be employed by the Company for such
special services as the Board of Directors may from time to time determine and
shall be paid for such special services so performed reasonable compensation as
may be determined by the Board of Directors.
ARTICLE X
Indemnification
Section 1. (A) The Corporation shall indemnify and hold harmless, to
the fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, provided, however,
that the payment of expenses incurred by a Director officer in his capacity as a
Director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the Director or officer to repay
all amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of
expenses, under this Article X is not paid in full within ninety days after a
written claim therefor has been received by the Corporation the claimant may
file suit to recover the unpaid amount of such claim and, if successful in whole
or in part, shall be entitled to be paid the expense of prosecuting such claim.
In any such action the Corporation shall have the burden of proving that the
claimant was not entitled to the requested indemnification of payment of
expenses
9
<PAGE>
under applicable law.
(D) The rights conferred on any person by this Article X
shall not be exclusive of any other rights which such person may have or
hereafter acquire under any statute, provision of the Charter or Act of
Incorporation, these By-Laws, agreement, vote of stockholders or disinterested
Directors or otherwise.
(E) Any repeal or modification of the foregoing
provisions of this Article X shall not adversely affect any right or protection
hereunder of any person in respect of any act or omission occurring prior to the
time of such repeal or modification.
ARTICLE XI
Amendments to the By-Laws
Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all the
members of the Board of Directors then in office.
10
<PAGE>
EXHIBIT C
Section 321(b) Consent
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: January 17, 1997 By: /s/ Norma P. Closs
------------------
Name: Norma P. Closs
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings banks with
state publication requirements. It has not been approved by any state banking
authorities. Refer to your appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
Name of Bank City
in the State of DELAWARE , at the close of business on September 30, 1996.
<TABLE>
<CAPTION>
ASSETS
Thousands of dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins.............................................198,288
Interest-bearing balances........................................................................... 0
Held-to-maturity securities............................................................................... 489,428
Available-for-sale securities...............................................................................783,718
Federal funds sold...........................................................................................19,000
Securities purchased under agreements to resell............................................................. 48,500
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 3,620,289
LESS: Allowance for loan and lease losses. . . . . . 49,721
LESS: Allocated transfer risk reserve. . . . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve..............................3,570,568
Assets held in trading accounts...................................................................................0
Premises and fixed assets (including capitalized leases).....................................................83,675
Other real estate owned...................................................................................... 4,607
Investments in unconsolidated subsidiaries and associated companies............................................ 85
Customers' liability to this bank on acceptances outstanding......................................................0
Intangible assets.............................................................................................4,131
Other assets................................................................................................101,592
Total assets..............................................................................................5,303,592
</TABLE>
CONTINUED ON NEXT PAGE
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits:
In domestic offices.......................................................................................3,457,641
Noninterest-bearing . . . . . . . . 740,731
Interest-bearing. . . . . . . . . . 2,716,910
Federal funds purchased.....................................................................................135,889
Securities sold under agreements to repurchase............................................................. 213,617
Demand notes issued to the U.S. Treasury.....................................................................94,999
Trading liabilities...............................................................................................0
Other borrowed money:.......................................................................................///////
With original maturity of one year or less......................................................844,000
With original maturity of more than one year.....................................................28,000
Mortgage indebtedness and obligations under capitalized leases................................................ 0
Bank's liability on acceptances executed and outstanding..........................................................0
Subordinated notes and debentures.................................................................................0
Other liabilities.......................................................................................... 103,818
Total liabilities.........................................................................................4,877,964
Limited-life preferred stock and related surplus..................................................................0
EQUITY CAPITAL
Perpetual preferred stock and related surplus.....................................................................0
Common Stock....................................................................................................500
Surplus......................................................................................................62,119
Undivided profits and capital reserves......................................................................363,705
Net unrealized holding gains (losses) on available-for-sale securities..................................... (696)
Total equity capital........................................................................................425,628
Total liabilities, limited-life preferred stock, and equity capital.......................................5,303,592
</TABLE>
2
Exhibit 25(b)
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) X
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
FIRST UNION CORPORATION
FIRST UNION INSTITUTIONAL CAPITAL II
(Exact name of obligor as specified in its charter)
North Carolina 56-0898180
Delaware Applied for
(State of incorporation) (I.R.S. employer identification no.)
One First Union Center
Charlotte, North Carolina 28288-0013
(Address of principal executive offices) (Zip Code)
7.85% Capital Securities of First Union Institutional Capital II
(Title of the indenture securities)
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust
powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the obligor
is not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which
includes the certificate of authority of Wilmington Trust
Company to commence business and the authorization of
Wilmington Trust Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section
321(b) of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 17th day
of Janaury, 1997.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Emmett R. Harmon By:/s/ Norma P. Closs
Assistant Secretary Name: Norma P. Closs
Title: Vice President
2
<PAGE>
EXHIBIT A
AMENDED CHARTER
Wilmington Trust Company
Wilmington, Delaware
As existing on May 9, 1987
<PAGE>
Amended Charter
or
Act of Incorporation
of
Wilmington Trust Company
Wilmington Trust Company, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "Wilmington Trust Company" by an amendment filed
in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended shall
in its entirety read as follows:
First: - The name of this corporation is Wilmington Trust Company.
Second: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington,
County of New Castle; the name of its resident agent is Wilmington
Trust Company whose address is Rodney Square North, in said City. In
addition to such principal office, the said corporation maintains
and operates branch offices in the City of Newark, New Castle
County, Delaware, the Town of Newport, New Castle County, Delaware,
at Claymont, New Castle County, Delaware, at Greenville, New Castle
County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate
branch offices at Ninth and Shipley Streets, 418 Delaware Avenue,
2120 Market Street, and 3605 Market Street, all in the City of
Wilmington, New Castle County, Delaware, and such other branch
offices or places of business as may be authorized from time to time
by the agency or agencies of the government of the State of Delaware
empowered to confer such authority.
Third: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this
Corporation are to do any or all of the things herein mentioned as
fully and to the same extent as natural persons might or could do
and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any Court of
law or equity and to make and use a common seal, and alter
the seal at pleasure, to hold, purchase, convey, mortgage
or otherwise deal in real and personal estate and property,
and to appoint such officers and agents as the business of
the Corporation shall require, to make by-laws not
inconsistent with the
<PAGE>
Constitution or laws of the United States or of this State,
to discount bills, notes or other evidences of debt, to
receive deposits of money, or securities for money, to buy
gold and silver bullion and foreign coins, to buy and sell
bills of exchange, and generally to use, exercise and enjoy
all the powers, rights, privileges and franchises incident
to a corporation which are proper or necessary for the
transaction of the business of the Corporation hereby
created.
(2) To insure titles to real and personal property, or any
estate or interests therein, and to guarantee the holder of
such property, real or personal, against any claim or
claims, adverse to his interest therein, and to prepare and
give certificates of title for any lands or premises in the
State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management of
funds, and the purchase, sale, management and disposal of
property of all descriptions, and to prepare and execute all
papers which may be necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers of
every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry,
plate, deeds, bonds and any and all other personal property
of every sort and kind, from executors, administrators,
guardians, public officers, courts, receivers, assignees,
trustees, and from all fiduciaries, and from all other
persons and individuals, and from all corporations whether
state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two
parties, and in like manner may act as Treasurer of any
corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage,
bond or other instrument issued by any state, municipality,
body politic, corporation, association or person, either
alone or in conjunction with any other person or persons,
corporation or corporations.
(8) To guarantee the validity, performance or effect of any
contract or
2
<PAGE>
agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person,
or persons, for the faithful performance of any trust,
office, duty, contract or agreement, either by itself or in
conjunction with any other person, or persons, corporation,
or corporations, or in like manner become surety upon any
bond, recognizance, obligation, judgment, suit, order, or
decree to be entered in any court of record within the
State of Delaware or elsewhere, or which may now or
hereafter be required by any law, judge, officer or court
in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian, bailee, or
in any other trust capacity in the receiving, holding,
managing, and disposing of any and all estates and property,
real, personal or mixed, and to be appointed as such
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian or bailee
by any persons, corporations, court, officer, or authority,
in the State of Delaware or elsewhere; and whenever this
Corporation is so appointed by any person, corporation,
court, officer or authority such trustee, trustee in
bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other
trust capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as
security for the performance of the duties devolving upon it
by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake or
be called upon to perform, or for the assumption of any
responsibility the said Corporation may be entitled to
receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of
any private, public or municipal corporation within and
without the State of Delaware, or of the Government of the
United States, or of any state, territory, colony, or
possession thereof, or of any foreign government or
country; to receive, collect, receipt for, and dispose of
interest, dividends and income upon and from any of the
bonds, mortgages, debentures, notes, shares of capital
stock, securities, obligations, contracts, evidences of
indebtedness and other property held and owned by it, and
to exercise in respect of all such bonds, mortgages,
debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and other
property, any and all the rights, powers and privileges of
individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the moneys
of the Corporation upon such securities and in such manner
as it may think fit and proper, and from time to time to
vary or
3
<PAGE>
realize such investments; to issue bonds and secure the same
by pledges or deeds of trust or mortgages of or upon the
whole or any part of the property held or owned by the
Corporation, and to sell and pledge such bonds, as and when
the Board of Directors shall determine, and in the promotion
of its said corporate business of investment and to the
extent authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge, mortgage and convey real and
personal property of any name and nature and any estate or
interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have the
following powers:
(1) To do any or all of the things herein set forth, to the
same extent as natural persons might or could do, and in any
part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of the
assets and liabilities of any person, firm, association or
corporation, and to pay for the same in cash, stock of this
Corporation, bonds or otherwise; to hold or in any manner to
dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any
part of any business so acquired, and to exercise all the
powers necessary or convenient in and about the conduct and
management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien,
and to lease, sell, exchange, transfer, or in any manner
whatever dispose of property, real, personal or mixed,
wherever situated.
(4) To enter into, make, perform and carry out contracts of
every kind with any person, firm, association or
corporation, and, without limit as to amount, to draw, make,
accept, endorse, discount, execute and issue promissory
notes, drafts, bills of exchange, warrants, bonds,
debentures, and other negotiable or transferable
instruments.
(5) To have one or more offices, to carry on all or any of
its operations and businesses, without restriction to the
same extent as natural persons might or could do, to
purchase or otherwise acquire, to hold, own, to mortgage,
sell, convey or otherwise dispose of, real and personal
property, of every class and description, in any State,
District, Territory or Colony of the United States, and in
any foreign country or place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this paragraph
shall (except where otherwise expressed in said paragraph)
be nowise limited or restricted by reference to or
inference
4
<PAGE>
from the terms of any other clause of this or any other
paragraph in this charter, but that the objects, purposes
and powers specified in each of the clauses of this
paragraph shall be regarded as independent objects, purposes
and powers.
Fourth: - (a) The total number of shares of all classes of stock
which the Corporation shall have authority to issue is forty-one
million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par
value $10.00 per share (hereinafter referred to as
"Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par
value $1.00 per share (hereinafter referred to as "Common
Stock").
(b) Shares of Preferred Stock may be issued from time to time in one
or more series as may from time to time be determined by the Board
of Directors each of said series to be distinctly designated. All
shares of any one series of Preferred Stock shall be alike in every
particular, except that there may be different dates from which
dividends, if any, thereon shall be cumulative, if made cumulative.
The voting powers and the preferences and relative, participating,
optional and other special rights of each such series, and the
qualifications, limitations or restrictions thereof, if any, may
differ from those of any and all other series at any time
outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article Fourth, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by
resolution or resolutions adopted prior to the issuance of any
shares of a particular series of Preferred Stock, the voting powers
and the designations, preferences and relative, optional and other
special rights, and the qualifications, limitations and restrictions
of such series, including, but without limiting the generality of
the foregoing, the following:
(1) The distinctive designation of, and the number of shares
of Preferred Stock which shall constitute such series, which
number may be increased (except where otherwise provided by
the Board of Directors) or decreased (but not below the
number of shares thereof then outstanding) from time to time
by like action of the Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred Stock
of such series shall be paid, the extent of the preference
or relation, if any, of such dividends to the dividends
payable on any other class or classes, or series of the same
or other class of stock and whether such dividends shall be
cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of
such series to
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<PAGE>
convert the same into or exchange the same for, shares of
any other class or classes or of any series of the same or
any other class or classes of stock of the Corporation and
the terms and conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be
subject to redemption, and the redemption price or prices
and the time or times at which, and the terms and conditions
on which, Preferred Stock of such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of
such series upon the voluntary or involuntary liquidation,
merger, consolidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of
such series; and
(7) The voting powers, if any, of the holders of such series
of Preferred Stock which may, without limiting the
generality of the foregoing include the right, voting as a
series or by itself or together with other series of
Preferred Stock or all series of Preferred Stock as a class,
to elect one or more directors of the Corporation if there
shall have been a default in the payment of dividends on any
one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of
Directors may determine.
(c) (1) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of section (b) of this Article Fourth), if any, shall
have been met and after the Corporation shall have complied with all
the requirements, if any, with respect to the setting aside of sums
as sinking funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this Article
Fourth), and subject further to any conditions which may be fixed in
accordance with the provisions of section (b) of this Article
Fourth, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to
time by the Board of Directors.
(2) After distribution in full of the preferential amount,
if any, (fixed in accordance with the provisions of section
(b) of this Article Fourth), to be distributed to the
holders of Preferred Stock in the event of voluntary or
involuntary liquidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation, the holders
of the Common Stock shall be entitled to receive all of the
remaining assets of the Corporation, tangible and
intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares
of Common Stock held by them
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respectively.
(3) Except as may otherwise be required by law or by the
provisions of such resolution or resolutions as may be
adopted by the Board of Directors pursuant to section (b) of
this Article Fourth, each holder of Common Stock shall have
one vote in respect of each share of Common Stock held on
all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock
or of options, warrants or other rights to purchase shares of any
class or series of stock or of other securities of the Corporation
shall have any preemptive right to purchase or subscribe for any
unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or series,
or bonds, certificates of indebtedness, debentures or other
securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of
stock or securities convertible into or exchangeable for stock, or
carrying any right to purchase stock, may be issued and disposed of
pursuant to resolution of the Board of Directors to such persons,
firms, corporations or associations, whether such holders or others,
and upon such terms as may be deemed advisable by the Board of
Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and
rights of each other series of Preferred Stock shall, in each case,
be as fixed from time to time by the Board of Directors in the
resolution or resolutions adopted pursuant to authority granted in
section (b) of this Article Fourth and the consent, by class or
series vote or otherwise, of the holders of such of the series of
Preferred Stock as are from time to time outstanding shall not be
required for the issuance by the Board of Directors of any other
series of Preferred Stock whether or not the powers, preferences and
rights of such other series shall be fixed by the Board of Directors
as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided,
however, that the Board of Directors may provide in the resolution
or resolutions as to any series of Preferred Stock adopted pursuant
to section (b) of this Article Fourth that the consent of the
holders of a majority (or such greater proportion as shall be
therein fixed) of the outstanding shares of such series voting
thereon shall be required for the issuance of any or all other
series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series
of Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the
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Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
(h) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased
from time to time by the affirmative vote of the holders of a
majority of the stock of the Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of
directors constituting the entire Board shall be not less than five
nor more than twenty-five as fixed from time to time by vote of a
majority of the whole Board, provided, however, that the number of
directors shall not be reduced so as to shorten the term of any
director at the time in office, and provided further, that the
number of directors constituting the whole Board shall be
twenty-four until otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of one
class expiring each year. At the annual meeting of stockholders in
1982, directors of the first class shall be elected to hold office
for a term expiring at the next succeeding annual meeting, directors
of the second class shall be elected to hold office for a term
expiring at the second succeeding annual meeting and directors of
the third class shall be elected to hold office for a term expiring
at the third succeeding annual meeting. Any vacancies in the Board
of Directors for any reason, and any newly created directorships
resulting from any increase in the directors, may be filled by the
Board of Directors, acting by a majority of the directors then in
office, although less than a quorum, and any directors so chosen
shall hold office until the next annual election of directors. At
such election, the stockholders shall elect a successor to such
director to hold office until the next election of the class for
which such director shall have been chosen and until his successor
shall be elected and qualified. No decrease in the number of
directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding
the fact that some lesser percentage may be specified by law, this
Charter or Act of Incorporation or the ByLaws of the Corporation),
any director or the entire Board of Directors of the Corporation may
be removed at any time without cause, but only by the affirmative
vote of the holders of two-thirds or more of the outstanding shares
of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one class)
cast at a meeting of the stockholders called for that
8
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purpose.
(d) Nominations for the election of directors may be made by the
Board of Directors or by any stockholder entitled to vote for the
election of directors. Such nominations shall be made by notice in
writing, delivered or mailed by first class United States mail,
postage prepaid, to the Secretary of the Corporation not less than
14 days nor more than 50 days prior to any meeting of the
stockholders called for the election of directors; provided,
however, that if less than 21 days' notice of the meeting is given
to stockholders, such written notice shall be delivered or mailed,
as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of
the meeting was mailed to stockholders. Notice of nominations which
are proposed by the Board of Directors shall be given by the
Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal occupation or
employment of such nominee and (iii) the number of shares of stock
of the Corporation which are beneficially owned by each such
nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine
and declare to the meeting that a nomination was not made in
accordance with the foregoing procedure, and if he should so
determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may be
taken without a meeting, and the power of stockholders to consent in
writing, without a meeting, to the taking of any action is
specifically denied.
Sixth: - The Directors shall choose such officers, agent and
servants as may be provided in the By-Laws as they may from time to
time find necessary or proper.
Seventh: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon corporations
organized under the Act entitled "An Act Providing a General
Corporation Law", approved March 10, 1899, as from time to time
amended.
Eighth: - This Act shall be deemed and taken to be a private Act.
Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a majority
of the whole Board, may designate any of their number to constitute
an Executive Committee,
9
<PAGE>
which Committee, to the extent provided in said resolution, or in
the By-Laws of the Company, shall have and may exercise all of the
powers of the Board of Directors in the management of the business
and affairs of the Corporation, and shall have power to authorize
the seal of the Corporation to be affixed to all papers which may
require it.
Eleventh: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.
Twelfth: - The Corporation may transact business in any part of the
world.
Thirteenth: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation
by a vote of the majority of the entire Board. The stockholders may
make, alter or repeal any By-Law whether or not adopted by them,
provided however, that any such additional By-Laws, alterations or
repeal may be adopted only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class).
Fourteenth: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be
from time to time designated by them.
Fifteenth: - (a) In addition to any affirmative vote required by
law, and except as otherwise expressly provided in sections (b) and
(c) of this Article Fifteenth:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii) any
other corporation (whether or not itself an Interested
Stockholder), which, after such merger or consolidation,
would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate fair
market value of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities
or other
10
<PAGE>
property (or a combination thereof) having an aggregate fair
market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect,
directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary
which is directly or indirectly owned by any Interested
Stockholder, or any Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article Fifteenth as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this
Article Fifteenth shall mean any transaction which is
referred to any one or more of clauses (A) through (E) of
paragraph 1 of the section (a).
(b) The provisions of section (a) of this Article Fifteenth
shall not be applicable to any particular business
combination and such business combination shall require only
such affirmative vote as is required by law and any other
provisions of the Charter or Act of Incorporation of By-Laws
if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any
Subsidiary) who or which as of the record date for the determination
of stockholders entitled to notice of and to vote on such business
combination, or immediately prior to the consummation of any such
transaction:
(A) is the beneficial owner, directly or indirectly, of more
than 10% of the
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<PAGE>
Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of the Corporation which were at any
time within two years prior thereto beneficially owned by
any Interested Stockholder, and such assignment or
succession shall have occurred in the course of a
transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own, directly
or indirectly, or
(B) which such person or any of its Affiliates or Associates
has (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (ii) the right to vote
pursuant to any agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly, by
any other person with which such first mentioned person or
any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of capital stock
of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any
other Voting Shares which may be issuable pursuant to any agreement,
or upon exercise of conversion rights, warrants or options or
otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on December
31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of
any class of equity security (as defined in Rule 3a11-1 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as in effect in December 31, 1981) is owned, directly or
indirectly, by the Corporation; provided, however, that for the
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<PAGE>
purposes of the definition of Investment Stockholder set forth in
paragraph (2) of this section (c), the term "Subsidiary" shall mean
only a corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the Corporation.
(d) majority of the directors shall have the power and duty
to determine for the purposes of this Article Fifteenth on
the basis of information known to them, (1) the number of
Voting Shares beneficially owned by any person (2) whether a
person is an Affiliate or Associate of another, (3) whether
a person has an agreement, arrangement or understanding with
another as to the matters referred to in paragraph (3) of
section (c), or (4) whether the assets subject to any
business combination or the consideration received for the
issuance or transfer of securities by the Corporation, or
any Subsidiary has an aggregate fair market value of
$1,00,000 or more.
(e) Nothing contained in this Article Fifteenth shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
Sixteenth: Notwithstanding any other provision of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and in
addition to any other vote that may be required by law, this Charter
or Act of Incorporation by the By-Laws), the affirmative vote of the
holders of at least two-thirds of the outstanding shares of the
capital stock of the Corporation entitled to vote generally in the
election of directors (considered for this purpose as one class)
shall be required to amend, alter or repeal any provision of
Articles Fifth, Thirteenth, Fifteenth or Sixteenth of this Charter
or Act of Incorporation.
Seventeenth: (a) a Director of this Corporation shall not be liable
to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a Director, except to the extent such
exemption from liability or limitation thereof is not permitted
under the Delaware General Corporation Laws as the same exists or
may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph
shall not adversely affect any right or protection of a
Director of the Corporation existing hereunder with respect
to any act or omission occurring prior to the time of such
repeal or modification."
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EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
As existing on December 21, 1995
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
Stockholders' Meetings
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or at
such other date, time, or place as may be designated by resolution by the Board
of Directors.
Section 2. Special meetings of all stockholders may be called at any
time by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given
by mailing to each stockholder at least ten (10 days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
Directors
Section 1. The number and classification of the Board of Directors
shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72)
years shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed
and conducted by the Board of Directors.
Section 5. Regular meetings of the Board of Directors shall be held
on the third Thursday of each month at the principal office of the Company, or
at such other place and time as may be designated by the Board of Directors, the
Chairman of the Board, or the
<PAGE>
President.
Section 6. Special meetings of the Board of Directors may be called
at any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of
any special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of Directors,
although less than a quorum, shall have the right to elect the successor who
shall hold office for the remainder of the full term of the class of directors
in which the vacancy occurred, and until such director's successor shall have
been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or division of the Company as it may deem
advisable.
ARTICLE III
Committees
Section I. Executive Committee
(A) The Executive Committee shall be composed of not more
than nine members who shall be selected by the Board of Directors from its own
members and who
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shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the
Board of Directors when it is not in session to transact all business for and in
behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal
office of the Company or elsewhere in its discretion at such times to be
determined by a majority of its members, or at the call of the Chairman of the
Executive Committee or at the call of the Chairman of the Board of Directors.
The majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Executive Committee may be held
at any time when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall
be kept and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient
severity to prevent the conduct and management of the affairs and business of
the Company by its directors and officers as contemplated by these By-Laws any
two available members of the Executive Committee as constituted immediately
prior to such disaster shall constitute a quorum of that Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the provisions of Article III of these By-Laws; and if less than three
members of the Trust Committee is constituted immediately prior to such disaster
shall be available for the transaction of its business, such Executive Committee
shall also be empowered to exercise all of the powers reserved to the Trust
Committee under Article III Section 2 hereof. In the event of the
unavailability, at such time, of a minimum of two members of such Executive
Committee, any three available directors shall constitute the Executive
Committee for the full conduct and management of the affairs and business of the
Company in accordance with the foregoing provisions of this Section. This By-Law
shall be subject to implementation by Resolutions of the Board of Directors
presently existing or hereafter passed from time to time for that purpose, and
any provisions of these By-Laws (other than this Section) and any resolutions
which are contrary to the provisions of this Section or to the provisions of any
such implementary Resolutions shall be suspended during such a disaster period
until it shall be determined by any interim Executive Committee acting under
this section that it shall be to the advantage of the Company to resume the
conduct and management of its affairs and business under all of the other
provisions of these By-Laws.
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Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than
thirteen members who shall be selected by the Board of Directors, a majority of
whom shall be members of the Board of Directors and who shall hold office during
the pleasure of the Board.
(B) The Trust Committee shall have general supervision over
the Trust Department and the investment of trust funds, in all matters, however,
being subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office
of the Company or elsewhere in its discretion at least once a month. A majority
of its members shall be necessary to constitute a quorum for the transaction of
business. Special meetings of the Trust Committee may be held at any time when a
quorum is present.
(D) Minutes of each meeting of the Trust Committee shall be
kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint
Committees and/or designate officers or employees of the Company to whom
supervision over the investment of trust funds may be delegated when the Trust
Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members
who shall be selected by the Board of Directors from its own members, none of
whom shall be an officer of the Company, and shall hold office at the pleasure
of the Board.
(B) The Audit Committee shall have general supervision over
the Audit Division in all matters however subject to the approval of the Board
of Directors; it shall consider all matters brought to its attention by the
officer in charge of the Audit Division, review all reports of examination of
the Company made by any governmental agency or such independent auditor employed
for that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever the
majority of its members shall deem it to be proper for the transaction of its
business, and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more
than
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<PAGE>
five (5) members who shall be selected by the Board of Directors from its own
members who are not officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general advise upon
all matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at
any time by the Chairman of the Compensation Committee, the Chairman of the
Board of Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected
by the Board of Directors as an associate director, to serve during the pleasure
of the Board.
(B) An associate director shall be entitled to attend all
directors meetings and participate in the discussion of all matters brought to
the Board, with the exception that he would have no right to vote. An associate
director will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any
Committee created under Article III of the By-Laws of this Company, the member
or members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place of any such
absence or disqualified member.
ARTICLE IV
Officers
Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers and
shall perform such duties as the Board of Directors may from time to time confer
and direct. He shall also exercise such powers and perform such duties as may
from time to time be agreed upon between himself and the President of the
Company.
Section 2. The Vice Chairman of the Board of Directors shall preside
at all meetings of the Board of Directors at which the Chairman of the Board
shall not be present
5
<PAGE>
and shall have such further authority and powers and shall perform such duties
as the Board of Directors or the Chairman of the Board may from time to time
confer and direct.
Section 3. The President shall have the powers and duties pertaining
to the office of the President conferred or imposed upon him by statute or
assigned to him by the Board of Directors in the absence of the Chairman of the
Board the President shall have the powers and duties of the Chairman of the
Board.
Section 4. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and such
other powers and duties as may from time to time be assigned to them by the
Board of Directors, the Executive Committee, the Chairman of the Board or the
President and by the officer in charge of the department or division to which
they are assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings and
to recording the same in the minute books of the Company. In addition to the
other notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and responsible
for all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller
officers however
6
<PAGE>
denominated, who may perform the duties of the Controller and such duties as may
be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the Auditor and
such duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined from
time to time by the Board of Directors, who shall ex officio hold the office
Assistant Secretary of this Company and who may perform such duties as may be
prescribed by the officer in charge of the department or division to whom they
are assigned.
Section 11. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices, subject
to the direction of the Board of Directors, the Executive Committee, Chairman of
the Board of Directors or the President and the officer in charge of the
department or division to which they are assigned.
ARTICLE V
Stock and Stock Certificates
Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of stock
shall be recorded.
Section 2. Certificate of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of stock
shall be issued only upon giving such security as may be satisfactory to the
Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders entitled
to notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
7
<PAGE>
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.
ARTICLE VI
Seal
Section 1. The corporate seal of the Company shall be in the
following form:
Between two concentric circles the words "Wilmington
Trust Company" within the inner circle the words
"Wilmington, Delaware."
ARTICLE VII
Fiscal Year
Section 1. The fiscal year of the Company shall be the calendar
year.
ARTICLE VIII
Execution of Instruments of the Company
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as although
expressly authorized by the Board of Directors and/or the Executive Committee.
8
<PAGE>
ARTICLE IX
Compensation of Directors and Members of Committees
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable honoraria
or fees for attending meetings of the Board of Directors as the Board of
Directors may from time to time determine. Directors and associate directors who
serve as members of committees, other than salaried employees of the Company,
shall be paid such reasonable honoraria or fees for services as members of
committees as the Board of Directors shall from time to time determine and
directors and associate directors may be employed by the Company for such
special services as the Board of Directors may from time to time determine and
shall be paid for such special services so performed reasonable compensation as
may be determined by the Board of Directors.
ARTICLE X
Indemnification
Section 1. (A) The Corporation shall indemnify and hold harmless, to
the fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, provided, however,
that the payment of expenses incurred by a Director officer in his capacity as a
Director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the Director or officer to repay
all amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of
expenses, under this Article X is not paid in full within ninety days after a
written claim therefor has been received by the Corporation the claimant may
file suit to recover the unpaid amount of such claim and, if successful in whole
or in part, shall be entitled to be paid the expense of prosecuting such claim.
In any such action the Corporation shall have the burden of proving that the
claimant was not entitled to the requested indemnification of payment of
expenses
9
<PAGE>
under applicable law.
(D) The rights conferred on any person by this Article X
shall not be exclusive of any other rights which such person may have or
hereafter acquire under any statute, provision of the Charter or Act of
Incorporation, these By-Laws, agreement, vote of stockholders or disinterested
Directors or otherwise.
(E) Any repeal or modification of the foregoing
provisions of this Article X shall not adversely affect any right or protection
hereunder of any person in respect of any act or omission occurring prior to the
time of such repeal or modification.
ARTICLE XI
Amendments to the By-Laws
Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all the
members of the Board of Directors then in office.
10
<PAGE>
EXHIBIT C
Section 321(b) Consent
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: January 17, 1997 By: /s/ Norma P. Closs
------------------
Name: Norma P. Closs
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings banks with
state publication requirements. It has not been approved by any state banking
authorities. Refer to your appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
Name of Bank City
in the State of DELAWARE , at the close of business on September 30, 1996.
<TABLE>
<CAPTION>
ASSETS
Thousands of dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins.............................................198,288
Interest-bearing balances........................................................................... 0
Held-to-maturity securities............................................................................... 489,428
Available-for-sale securities...............................................................................783,718
Federal funds sold...........................................................................................19,000
Securities purchased under agreements to resell............................................................. 48,500
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 3,620,289
LESS: Allowance for loan and lease losses. . . . . . 49,721
LESS: Allocated transfer risk reserve. . . . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve..............................3,570,568
Assets held in trading accounts...................................................................................0
Premises and fixed assets (including capitalized leases).....................................................83,675
Other real estate owned...................................................................................... 4,607
Investments in unconsolidated subsidiaries and associated companies............................................ 85
Customers' liability to this bank on acceptances outstanding......................................................0
Intangible assets.............................................................................................4,131
Other assets................................................................................................101,592
Total assets..............................................................................................5,303,592
</TABLE>
CONTINUED ON NEXT PAGE
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits:
In domestic offices.......................................................................................3,457,641
Noninterest-bearing . . . . . . . . 740,731
Interest-bearing. . .. . . . . . . 2,716,910
Federal funds purchased.....................................................................................135,889
Securities sold under agreements to repurchase............................................................. 213,617
Demand notes issued to the U.S. Treasury.....................................................................94,999
Trading liabilities...............................................................................................0
Other borrowed money:.......................................................................................///////
With original maturity of one year or less......................................................844,000
With original maturity of more than one year.....................................................28,000
Mortgage indebtedness and obligations under capitalized leases................................................ 0
Bank's liability on acceptances executed and outstanding..........................................................0
Subordinated notes and debentures.................................................................................0
Other liabilities.......................................................................................... 103,818
Total liabilities ........................................................................................4,877,964
Limited-life preferred stock and related surplus..................................................................0
EQUITY CAPITAL
Perpetual preferred stock and related surplus.....................................................................0
Common Stock....................................................................................................500
Surplus......................................................................................................62,119
Undivided profits and capital reserves......................................................................363,705
Net unrealized holding gains (losses) on available-for-sale securities..................................... (696)
Total equity capital........................................................................................425,628
Total liabilities, limited-life preferred stock, and equity capital.......................................5,303,592
</TABLE>
2
<PAGE>
Exhibit 25(c)
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) X
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
FIRST UNION CORPORATION
(Exact name of obligor as specified in its charter)
North Carolina 56-0898180
(State of incorporation) (I.R.S. employer identification no.)
One First Union Center
Charlotte, North Carolina 28288-0013
(Address of principal executive offices) (Zip Code)
First Union Corporation Guarantee with respect to
7.85% Capital Securities of First Union Institutional Capital II
(Title of the indenture securities)
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust
powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the obligor
is not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which
includes the certificate of authority of Wilmington Trust
Company to commence business and the authorization of
Wilmington Trust Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321
(b) of
Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 17th day
of January, 1997.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Emmett R. Harmon By: /s/ Norma P. Closs
Assistant Secretary Name: Norma P. Closs
Title: Vice President
2
<PAGE>
EXHIBIT A
AMENDED CHARTER
Wilmington Trust Company
Wilmington, Delaware
As existing on May 9, 1987
<PAGE>
Amended Charter
or
Act of Incorporation
of
Wilmington Trust Company
Wilmington Trust Company, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "Wilmington Trust Company" by an amendment filed
in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended shall
in its entirety read as follows:
First: - The name of this corporation is Wilmington Trust Company.
Second: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington,
County of New Castle; the name of its resident agent is Wilmington
Trust Company whose address is Rodney Square North, in said City. In
addition to such principal office, the said corporation maintains
and operates branch offices in the City of Newark, New Castle
County, Delaware, the Town of Newport, New Castle County, Delaware,
at Claymont, New Castle County, Delaware, at Greenville, New Castle
County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate
branch offices at Ninth and Shipley Streets, 418 Delaware Avenue,
2120 Market Street, and 3605 Market Street, all in the City of
Wilmington, New Castle County, Delaware, and such other branch
offices or places of business as may be authorized from time to time
by the agency or agencies of the government of the State of Delaware
empowered to confer such authority.
Third: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this
Corporation are to do any or all of the things herein mentioned as
fully and to the same extent as natural persons might or could do
and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any Court of
law or equity and to make and use a common seal, and alter
the seal at pleasure, to hold, purchase, convey, mortgage or
otherwise deal in real and personal estate and property, and
to appoint such officers and agents as the business of the
Corporation shall require, to make by-laws not inconsistent
with the
<PAGE>
Constitution or laws of the United States or of this State,
to discount bills, notes or other evidences of debt, to
receive deposits of money, or securities for money, to buy
gold and silver bullion and foreign coins, to buy and sell
bills of exchange, and generally to use, exercise and enjoy
all the powers, rights, privileges and franchises incident
to a corporation which are proper or necessary for the
transaction of the business of the Corporation hereby
created.
(2) To insure titles to real and personal property, or any
estate or interests therein, and to guarantee the holder of
such property, real or personal, against any claim or
claims, adverse to his interest therein, and to prepare and
give certificates of title for any lands or premises in the
State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management of
funds, and the purchase, sale, management and disposal of
property of all descriptions, and to prepare and execute all
papers which may be necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers of
every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry,
plate, deeds, bonds and any and all other personal property
of every sort and kind, from executors, administrators,
guardians, public officers, courts, receivers, assignees,
trustees, and from all fiduciaries, and from all other
persons and individuals, and from all corporations whether
state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two
parties, and in like manner may act as Treasurer of any
corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage,
bond or other instrument issued by any state, municipality,
body politic, corporation, association or person, either
alone or in conjunction with any other person or persons,
corporation or corporations.
(8) To guarantee the validity, performance or effect of any
contract or
2
<PAGE>
agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or
persons, for the faithful performance of any trust, office,
duty, contract or agreement, either by itself or in
conjunction with any other person, or persons, corporation,
or corporations, or in like manner become surety upon any
bond, recognizance, obligation, judgment, suit, order, or
decree to be entered in any court of record within the State
of Delaware or elsewhere, or which may now or hereafter be
required by any law, judge, officer or court in the State of
Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian, bailee, or
in any other trust capacity in the receiving, holding,
managing, and disposing of any and all estates and property,
real, personal or mixed, and to be appointed as such
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian or bailee
by any persons, corporations, court, officer, or authority,
in the State of Delaware or elsewhere; and whenever this
Corporation is so appointed by any person, corporation,
court, officer or authority such trustee, trustee in
bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other
trust capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as
security for the performance of the duties devolving upon it
by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake or
be called upon to perform, or for the assumption of any
responsibility the said Corporation may be entitled to
receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any
private, public or municipal corporation within and without
the State of Delaware, or of the Government of the United
States, or of any state, territory, colony, or possession
thereof, or of any foreign government or country; to
receive, collect, receipt for, and dispose of interest,
dividends and income upon and from any of the bonds,
mortgages, debentures, notes, shares of capital stock,
securities, obligations, contracts, evidences of
indebtedness and other property held and owned by it, and to
exercise in respect of all such bonds, mortgages,
debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and other
property, any and all the rights, powers and privileges of
individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the moneys of
the Corporation upon such securities and in such manner as
it may think fit and proper, and from time to time to vary
or
3
<PAGE>
realize such investments; to issue bonds and secure the same
by pledges or deeds of trust or mortgages of or upon the
whole or any part of the property held or owned by the
Corporation, and to sell and pledge such bonds, as and when
the Board of Directors shall determine, and in the promotion
of its said corporate business of investment and to the
extent authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge, mortgage and convey real and
personal property of any name and nature and any estate or
interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have the
following powers:
(1) To do any or all of the things herein set forth, to the
same extent as natural persons might or could do, and in any
part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of the
assets and liabilities of any person, firm, association or
corporation, and to pay for the same in cash, stock of this
Corporation, bonds or otherwise; to hold or in any manner to
dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any
part of any business so acquired, and to exercise all the
powers necessary or convenient in and about the conduct and
management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien,
and to lease, sell, exchange, transfer, or in any manner
whatever dispose of property, real, personal or mixed,
wherever situated.
(4) To enter into, make, perform and carry out contracts of
every kind with any person, firm, association or
corporation, and, without limit as to amount, to draw, make,
accept, endorse, discount, execute and issue promissory
notes, drafts, bills of exchange, warrants, bonds,
debentures, and other negotiable or transferable
instruments.
(5) To have one or more offices, to carry on all or any of
its operations and businesses, without restriction to the
same extent as natural persons might or could do, to
purchase or otherwise acquire, to hold, own, to mortgage,
sell, convey or otherwise dispose of, real and personal
property, of every class and description, in any State,
District, Territory or Colony of the United States, and in
any foreign country or place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this paragraph
shall (except where otherwise expressed in said paragraph)
be nowise limited or restricted by reference to or inference
4
<PAGE>
from the terms of any other clause of this or any other
paragraph in this charter, but that the objects, purposes
and powers specified in each of the clauses of this
paragraph shall be regarded as independent objects, purposes
and powers.
Fourth: - (a) The total number of shares of all classes of stock
which the Corporation shall have authority to issue is forty-one
million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par
value $10.00 per share (hereinafter referred to as
"Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par
value $1.00 per share (hereinafter referred to as "Common
Stock").
(b) Shares of Preferred Stock may be issued from time to time in one
or more series as may from time to time be determined by the Board
of Directors each of said series to be distinctly designated. All
shares of any one series of Preferred Stock shall be alike in every
particular, except that there may be different dates from which
dividends, if any, thereon shall be cumulative, if made cumulative.
The voting powers and the preferences and relative, participating,
optional and other special rights of each such series, and the
qualifications, limitations or restrictions thereof, if any, may
differ from those of any and all other series at any time
outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article Fourth, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by
resolution or resolutions adopted prior to the issuance of any
shares of a particular series of Preferred Stock, the voting powers
and the designations, preferences and relative, optional and other
special rights, and the qualifications, limitations and restrictions
of such series, including, but without limiting the generality of
the foregoing, the following:
(1) The distinctive designation of, and the number of shares
of Preferred Stock which shall constitute such series, which
number may be increased (except where otherwise provided by
the Board of Directors) or decreased (but not below the
number of shares thereof then outstanding) from time to time
by like action of the Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred Stock
of such series shall be paid, the extent of the preference
or relation, if any, of such dividends to the dividends
payable on any other class or classes, or series of the same
or other class of stock and whether such dividends shall be
cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of
such series to
5
<PAGE>
convert the same into or exchange the same for, shares of
any other class or classes or of any series of the same or
any other class or classes of stock of the Corporation and
the terms and conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be
subject to redemption, and the redemption price or prices
and the time or times at which, and the terms and conditions
on which, Preferred Stock of such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of
such series upon the voluntary or involuntary liquidation,
merger, consolidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of
such series; and
(7) The voting powers, if any, of the holders of such series
of Preferred Stock which may, without limiting the
generality of the foregoing include the right, voting as a
series or by itself or together with other series of
Preferred Stock or all series of Preferred Stock as a class,
to elect one or more directors of the Corporation if there
shall have been a default in the payment of dividends on any
one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of
Directors may determine.
(c) (1) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of section (b) of this Article Fourth), if any, shall
have been met and after the Corporation shall have complied with all
the requirements, if any, with respect to the setting aside of sums
as sinking funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this Article
Fourth), and subject further to any conditions which may be fixed in
accordance with the provisions of section (b) of this Article
Fourth, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to
time by the Board of Directors.
(2) After distribution in full of the preferential amount,
if any, (fixed in accordance with the provisions of section
(b) of this Article Fourth), to be distributed to the
holders of Preferred Stock in the event of voluntary or
involuntary liquidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation, the holders
of the Common Stock shall be entitled to receive all of the
remaining assets of the Corporation, tangible and
intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares
of Common Stock held by them
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respectively.
(3) Except as may otherwise be required by law or by the
provisions of such resolution or resolutions as may be
adopted by the Board of Directors pursuant to section (b) of
this Article Fourth, each holder of Common Stock shall have
one vote in respect of each share of Common Stock held on
all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock
or of options, warrants or other rights to purchase shares of any
class or series of stock or of other securities of the Corporation
shall have any preemptive right to purchase or subscribe for any
unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or series,
or bonds, certificates of indebtedness, debentures or other
securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of
stock or securities convertible into or exchangeable for stock, or
carrying any right to purchase stock, may be issued and disposed of
pursuant to resolution of the Board of Directors to such persons,
firms, corporations or associations, whether such holders or others,
and upon such terms as may be deemed advisable by the Board of
Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and
rights of each other series of Preferred Stock shall, in each case,
be as fixed from time to time by the Board of Directors in the
resolution or resolutions adopted pursuant to authority granted in
section (b) of this Article Fourth and the consent, by class or
series vote or otherwise, of the holders of such of the series of
Preferred Stock as are from time to time outstanding shall not be
required for the issuance by the Board of Directors of any other
series of Preferred Stock whether or not the powers, preferences and
rights of such other series shall be fixed by the Board of Directors
as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided,
however, that the Board of Directors may provide in the resolution
or resolutions as to any series of Preferred Stock adopted pursuant
to section (b) of this Article Fourth that the consent of the
holders of a majority (or such greater proportion as shall be
therein fixed) of the outstanding shares of such series voting
thereon shall be required for the issuance of any or all other
series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series
of Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the
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Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
(h) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased
from time to time by the affirmative vote of the holders of a
majority of the stock of the Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of
directors constituting the entire Board shall be not less than five
nor more than twenty-five as fixed from time to time by vote of a
majority of the whole Board, provided, however, that the number of
directors shall not be reduced so as to shorten the term of any
director at the time in office, and provided further, that the
number of directors constituting the whole Board shall be
twenty-four until otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of one
class expiring each year. At the annual meeting of stockholders in
1982, directors of the first class shall be elected to hold office
for a term expiring at the next succeeding annual meeting, directors
of the second class shall be elected to hold office for a term
expiring at the second succeeding annual meeting and directors of
the third class shall be elected to hold office for a term expiring
at the third succeeding annual meeting. Any vacancies in the Board
of Directors for any reason, and any newly created directorships
resulting from any increase in the directors, may be filled by the
Board of Directors, acting by a majority of the directors then in
office, although less than a quorum, and any directors so chosen
shall hold office until the next annual election of directors. At
such election, the stockholders shall elect a successor to such
director to hold office until the next election of the class for
which such director shall have been chosen and until his successor
shall be elected and qualified. No decrease in the number of
directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and
notwithstanding the fact that some lesser percentage may be
specified by law, this Charter or Act of Incorporation or the
ByLaws of the Corporation), any director or the entire Board of
Directors of the Corporation may be removed at any time without
cause, but only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of
the Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class) cast at a
meeting of the stockholders called for that
8
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purpose.
(d) Nominations for the election of directors may be made by the
Board of Directors or by any stockholder entitled to vote for the
election of directors. Such nominations shall be made by notice in
writing, delivered or mailed by first class United States mail,
postage prepaid, to the Secretary of the Corporation not less than
14 days nor more than 50 days prior to any meeting of the
stockholders called for the election of directors; provided,
however, that if less than 21 days' notice of the meeting is given
to stockholders, such written notice shall be delivered or mailed,
as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of
the meeting was mailed to stockholders. Notice of nominations which
are proposed by the Board of Directors shall be given by the
Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal occupation or
employment of such nominee and (iii) the number of shares of stock
of the Corporation which are beneficially owned by each such
nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine
and declare to the meeting that a nomination was not made in
accordance with the foregoing procedure, and if he should so
determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may be
taken without a meeting, and the power of stockholders to consent in
writing, without a meeting, to the taking of any action is
specifically denied.
Sixth: - The Directors shall choose such officers, agent and
servants as may be provided in the By-Laws as they may from time to
time find necessary or proper.
Seventh: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon corporations
organized under the Act entitled "An Act Providing a General
Corporation Law", approved March 10, 1899, as from time to time
amended.
Eighth: - This Act shall be deemed and taken to be a private Act.
Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a majority
of the whole Board, may designate any of their number to constitute
an Executive Committee,
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which Committee, to the extent provided in said resolution, or in
the By-Laws of the Company, shall have and may exercise all of the
powers of the Board of Directors in the management of the business
and affairs of the Corporation, and shall have power to authorize
the seal of the Corporation to be affixed to all papers which may
require it.
Eleventh: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.
Twelfth: - The Corporation may transact business in any part of the
world.
Thirteenth: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation
by a vote of the majority of the entire Board. The stockholders may
make, alter or repeal any By-Law whether or not adopted by them,
provided however, that any such additional By-Laws, alterations or
repeal may be adopted only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class).
Fourteenth: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be
from time to time designated by them.
Fifteenth: - (a) In addition to any affirmative vote required by
law, and except as otherwise expressly provided in sections (b) and
(c) of this Article Fifteenth:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii) any
other corporation (whether or not itself an Interested
Stockholder), which, after such merger or consolidation,
would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate fair
market value of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities
or other
10
<PAGE>
property (or a combination thereof) having an aggregate fair
market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect,
directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary
which is directly or indirectly owned by any Interested
Stockholder, or any Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article Fifteenth as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this
Article Fifteenth shall mean any transaction which is
referred to any one or more of clauses (A) through (E) of
paragraph 1 of the section (a).
(b) The provisions of section (a) of this Article Fifteenth
shall not be applicable to any particular business
combination and such business combination shall require only
such affirmative vote as is required by law and any other
provisions of the Charter or Act of Incorporation of By-Laws
if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any
Subsidiary) who or which as of the record date for the
determination of stockholders entitled to notice of and to vote on
such business combination, or immediately prior to the consummation
of any such transaction:
(A) is the beneficial owner, directly or indirectly, of more
than 10% of the
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Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of the Corporation which were at any
time within two years prior thereto beneficially owned by
any Interested Stockholder, and such assignment or
succession shall have occurred in the course of a
transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own, directly
or indirectly, or
(B) which such person or any of its Affiliates or Associates
has (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (ii) the right to vote
pursuant to any agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly, by
any other person with which such first mentioned person or
any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of capital stock
of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any
other Voting Shares which may be issuable pursuant to any agreement,
or upon exercise of conversion rights, warrants or options or
otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on December
31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of
any class of equity security (as defined in Rule 3a11-1 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as in effect in December 31, 1981) is owned, directly or
indirectly, by the Corporation; provided, however, that for the
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<PAGE>
purposes of the definition of Investment Stockholder set forth in
paragraph (2) of this section (c), the term "Subsidiary" shall mean
only a corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the Corporation.
(d) majority of the directors shall have the power and duty
to determine for the purposes of this Article Fifteenth on
the basis of information known to them, (1) the number of
Voting Shares beneficially owned by any person (2) whether a
person is an Affiliate or Associate of another, (3) whether
a person has an agreement, arrangement or understanding with
another as to the matters referred to in paragraph (3) of
section (c), or (4) whether the assets subject to any
business combination or the consideration received for the
issuance or transfer of securities by the Corporation, or
any Subsidiary has an aggregate fair market value of
$1,00,000 or more.
(e) Nothing contained in this Article Fifteenth shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
Sixteenth: Notwithstanding any other provision of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and in
addition to any other vote that may be required by law, this Charter
or Act of Incorporation by the By-Laws), the affirmative vote of the
holders of at least two-thirds of the outstanding shares of the
capital stock of the Corporation entitled to vote generally in the
election of directors (considered for this purpose as one class)
shall be required to amend, alter or repeal any provision of
Articles Fifth, Thirteenth, Fifteenth or Sixteenth of this Charter
or Act of Incorporation.
Seventeenth: (a) a Director of this Corporation shall not be liable
to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a Director, except to the extent such
exemption from liability or limitation thereof is not permitted
under the Delaware General Corporation Laws as the same exists or
may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph
shall not adversely affect any right or protection of a
Director of the Corporation existing hereunder with respect
to any act or omission occurring prior to the time of such
repeal or modification."
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EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
As existing on December 21, 1995
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
Stockholders' Meetings
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or at
such other date, time, or place as may be designated by resolution by the Board
of Directors.
Section 2. Special meetings of all stockholders may be called at any
time by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given
by mailing to each stockholder at least ten (10 days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
Directors
Section 1. The number and classification of the Board of Directors
shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72)
years shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed
and conducted by the Board of Directors.
Section 5. Regular meetings of the Board of Directors shall be held
on the third Thursday of each month at the principal office of the Company, or
at such other place and time as may be designated by the Board of Directors, the
Chairman of the Board, or the
<PAGE>
President.
Section 6. Special meetings of the Board of Directors may be called
at any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of
any special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of Directors,
although less than a quorum, shall have the right to elect the successor who
shall hold office for the remainder of the full term of the class of directors
in which the vacancy occurred, and until such director's successor shall have
been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or division of the Company as it may deem
advisable.
ARTICLE III
Committees
Section I. Executive Committee
(A) The Executive Committee shall be composed of not
more than nine members who shall be selected by the Board of Directors from its
own members and who
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shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of
the Board of Directors when it is not in session to transact all business for
and in behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal
office of the Company or elsewhere in its discretion at such times to be
determined by a majority of its members, or at the call of the Chairman of the
Executive Committee or at the call of the Chairman of the Board of Directors.
The majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Executive Committee may be held
at any time when a quorum is present.
(D) Minutes of each meeting of the Executive Committee
shall be kept and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend
all investments that may be made of the funds of the Company, and shall direct
the disposal of the same, in accordance with such rules and regulations as the
Board of Directors from time to time make.
(F) In the event of a state of disaster of sufficient
severity to prevent the conduct and management of the affairs and business of
the Company by its directors and officers as contemplated by these By-Laws any
two available members of the Executive Committee as constituted immediately
prior to such disaster shall constitute a quorum of that Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the provisions of Article III of these By-Laws; and if less than three
members of the Trust Committee is constituted immediately prior to such disaster
shall be available for the transaction of its business, such Executive Committee
shall also be empowered to exercise all of the powers reserved to the Trust
Committee under Article III Section 2 hereof. In the event of the
unavailability, at such time, of a minimum of two members of such Executive
Committee, any three available directors shall constitute the Executive
Committee for the full conduct and management of the affairs and business of the
Company in accordance with the foregoing provisions of this Section. This By-Law
shall be subject to implementation by Resolutions of the Board of Directors
presently existing or hereafter passed from time to time for that purpose, and
any provisions of these By-Laws (other than this Section) and any resolutions
which are contrary to the provisions of this Section or to the provisions of any
such implementary Resolutions shall be suspended during such a disaster period
until it shall be determined by any interim Executive Committee acting under
this section that it shall be to the advantage of the Company to resume the
conduct and management of its affairs and business under all of the other
provisions of these By-Laws.
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Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more
than thirteen members who shall be selected by the Board of Directors, a
majority of whom shall be members of the Board of Directors and who shall hold
office during the pleasure of the Board.
(B) The Trust Committee shall have general supervision
over the Trust Department and the investment of trust funds, in all matters,
however, being subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal
office of the Company or elsewhere in its discretion at least once a month. A
majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Trust Committee may be held at
any time when a quorum is present.
(D) Minutes of each meeting of the Trust Committee shall
be kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint
Committees and/or designate officers or employees of the Company to whom
supervision over the investment of trust funds may be delegated when the Trust
Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five
members who shall be selected by the Board of Directors from its own members,
none of whom shall be an officer of the Company, and shall hold office at the
pleasure of the Board.
(B) The Audit Committee shall have general supervision
over the Audit Division in all matters however subject to the approval of the
Board of Directors; it shall consider all matters brought to its attention by
the officer in charge of the Audit Division, review all reports of examination
of the Company made by any governmental agency or such independent auditor
employed for that purpose, and make such recommendations to the Board of
Directors with respect thereto or with respect to any other matters pertaining
to auditing the Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever
the majority of its members shall deem it to be proper for the transaction of
its business, and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not
more than
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<PAGE>
five (5) members who shall be selected by the Board of Directors from its own
members who are not officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general advise
upon all matters of policy concerning the Company brought to its attention by
the management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called
at any time by the Chairman of the Compensation Committee, the Chairman of the
Board of Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be
elected by the Board of Directors as an associate director, to serve during the
pleasure of the Board.
(B) An associate director shall be entitled to attend
all directors meetings and participate in the discussion of all matters brought
to the Board, with the exception that he would have no right to vote. An
associate director will be eligible for appointment to Committees of the
Company, with the exception of the Executive Committee, Audit Committee and
Compensation Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of
any Committee created under Article III of the By-Laws of this Company, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absence or disqualified member.
ARTICLE IV
Officers
Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers and
shall perform such duties as the Board of Directors may from time to time confer
and direct. He shall also exercise such powers and perform such duties as may
from time to time be agreed upon between himself and the President of the
Company.
Section 2. The Vice Chairman of the Board of Directors shall preside
at all meetings of the Board of Directors at which the Chairman of the Board
shall not be present
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and shall have such further authority and powers and shall perform
such duties as the Board of Directors or the Chairman of the Board may from time
to time confer and direct.
Section 3. The President shall have the powers and duties pertaining
to the office of the President conferred or imposed upon him by statute or
assigned to him by the Board of Directors in the absence of the Chairman of the
Board the President shall have the powers and duties of the Chairman of the
Board.
Section 4. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and such
other powers and duties as may from time to time be assigned to them by the
Board of Directors, the Executive Committee, the Chairman of the Board or the
President and by the officer in charge of the department or division to which
they are assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings and
to recording the same in the minute books of the Company. In addition to the
other notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and responsible
for all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller
officers however
6
<PAGE>
denominated, who may perform the duties of the Controller and such duties as may
be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the Auditor and
such duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined from
time to time by the Board of Directors, who shall ex officio hold the office
Assistant Secretary of this Company and who may perform such duties as may be
prescribed by the officer in charge of the department or division to whom they
are assigned.
Section 11. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices, subject
to the direction of the Board of Directors, the Executive Committee, Chairman of
the Board of Directors or the President and the officer in charge of the
department or division to which they are assigned.
ARTICLE V
Stock and Stock Certificates
Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of stock
shall be recorded.
Section 2. Certificate of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of stock
shall be issued only upon giving such security as may be satisfactory to the
Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders entitled
to notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
7
<PAGE>
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.
ARTICLE VI
Seal
Section 1. The corporate seal of the Company shall be in the
following form:
Between two concentric circles the words "Wilmington
Trust Company" within the inner circle the words
"Wilmington, Delaware."
ARTICLE VII
Fiscal Year
Section 1. The fiscal year of the Company shall be the calendar
year.
ARTICLE VIII
Execution of Instruments of the Company
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as although
expressly authorized by the Board of Directors and/or the Executive Committee.
8
<PAGE>
ARTICLE IX
Compensation of Directors and Members of Committees
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable honoraria
or fees for attending meetings of the Board of Directors as the Board of
Directors may from time to time determine. Directors and associate directors who
serve as members of committees, other than salaried employees of the Company,
shall be paid such reasonable honoraria or fees for services as members of
committees as the Board of Directors shall from time to time determine and
directors and associate directors may be employed by the Company for such
special services as the Board of Directors may from time to time determine and
shall be paid for such special services so performed reasonable compensation as
may be determined by the Board of Directors.
ARTICLE X
Indemnification
Section 1. (A) The Corporation shall indemnify and hold harmless, to
the fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, provided, however,
that the payment of expenses incurred by a Director officer in his capacity as a
Director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the Director or officer to repay
all amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of
expenses, under this Article X is not paid in full within ninety days after a
written claim therefor has been received by the Corporation the claimant may
file suit to recover the unpaid amount of such claim and, if successful in whole
or in part, shall be entitled to be paid the expense of prosecuting such claim.
In any such action the Corporation shall have the burden of proving that the
claimant was not entitled to the requested indemnification of payment of
expenses
9
<PAGE>
under applicable law.
(D) The rights conferred on any person by this Article X
shall not be exclusive of any other rights which such person may have or
hereafter acquire under any statute, provision of the Charter or Act of
Incorporation, these By-Laws, agreement, vote of stockholders or disinterested
Directors or otherwise.
(E) Any repeal or modification of the foregoing
provisions of this Article X shall not adversely affect any right or protection
hereunder of any person in respect of any act or omission occurring prior to the
time of such repeal or modification.
ARTICLE XI
Amendments to the By-Laws
Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all the
members of the Board of Directors then in office.
10
<PAGE>
EXHIBIT C
Section 321(b) Consent
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: January 17, 1997 By: /s/ Norma P. Closs
------------------
Name: Norma P. Closs
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings banks with
state publication requirements. It has not been approved by any state banking
authorities. Refer to your appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
Name of Bank City
in the State of DELAWARE , at the close of business on September 30, 1996.
<TABLE>
<CAPTION>
ASSETS
Thousands of dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins.............................................198,288
Interest-bearing balances........................................................................... 0
Held-to-maturity securities............................................................................... 489,428
Available-for-sale securities...............................................................................783,718
Federal funds sold...........................................................................................19,000
Securities purchased under agreements to resell............................................................. 48,500
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 3,620,289
LESS: Allowance for loan and lease losses. . . . . . 49,721
LESS: Allocated transfer risk reserve. . . . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve..............................3,570,568
Assets held in trading accounts...................................................................................0
Premises and fixed assets (including capitalized leases).....................................................83,675
Other real estate owned...................................................................................... 4,607
Investments in unconsolidated subsidiaries and associated companies............................................ 85
Customers' liability to this bank on acceptances outstanding......................................................0
Intangible assets.............................................................................................4,131
Other assets................................................................................................101,592
Total assets..............................................................................................5,303,592
</TABLE>
CONTINUED ON NEXT PAGE
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits:
In domestic offices.......................................................................................3,457,641
Noninterest-bearing . . . . . . . . 740,731
Interest-bearing. . . . . . . . . . 2,716,910
Federal funds purchased.....................................................................................135,889
Securities sold under agreements to repurchase............................................................. 213,617
Demand notes issued to the U.S. Treasury.....................................................................94,999
Trading liabilities...............................................................................................0
Other borrowed money:.......................................................................................///////
With original maturity of one year or less......................................................844,000
With original maturity of more than one year.....................................................28,000
Mortgage indebtedness and obligations under capitalized leases................................................ 0
Bank's liability on acceptances executed and outstanding..........................................................0
Subordinated notes and debentures.................................................................................0
Other liabilities.......................................................................................... 103,818
Total liabilities.........................................................................................4,877,964
Limited-life preferred stock and related surplus..................................................................0
EQUITY CAPITAL
Perpetual preferred stock and related surplus.....................................................................0
Common Stock....................................................................................................500
Surplus......................................................................................................62,119
Undivided profits and capital reserves......................................................................363,705
Net unrealized holding gains (losses) on available-for-sale securities..................................... (696)
Total equity capital........................................................................................425,628
Total liabilities, limited-life preferred stock, and equity capital.......................................5,303,592
</TABLE>
2
<PAGE>
<PAGE>
EXHIBIT 99(a)
LETTER OF TRANSMITTAL
FIRST UNION INSTITUTIONAL CAPITAL II
OFFER TO EXCHANGE ITS
7.85% CAPITAL SECURITIES
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ITS OUTSTANDING
7.85% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
PURSUANT TO THE PROSPECTUS
DATED , 1997
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1997, UNLESS THE OFFER IS EXTENDED.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
WILMINGTON TRUST COMPANY
BY MAIL/OVERNIGHT DELIVERY/HAND:
Wilmington Trust Company
Corporate Trust Operation
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attn: Jill Rylee
TO CONFIRM BY TELEPHONE OR FOR INFORMATION:
(302) 651-8869
FACSIMILE TRANSMISSIONS:
(302) 651-1079
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A
NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
Capitalized terms used but not defined herein shall have the same meaning
given them in the Prospectus (as defined below).
This Letter of Transmittal is to be completed by holders of Old Capital
Securities (as defined below) either if (i) Old Capital Securities are to be
forwarded herewith or (ii) tenders of Old Capital Securities are to be made by
book-entry transfer to an account maintained by Wilmington Trust Company (the
"Exchange Agent") at The Depository Trust Company ("DTC") pursuant to the
procedures set forth under "The Exchange Offer -- Procedures for Tendering Old
Capital Securities" in the Prospectus and an Agent's Message (as defined herein)
is not delivered.
Holders of Old Capital Securities whose certificates (the "Certificates")
for such Old Capital Securities are not immediately available or who cannot
deliver their Certificates and all other required documents to the Exchange
Agent on or prior to the Expiration Date (as defined in the Prospectus) or who
cannot complete the procedures for book-entry transfer on or prior to the
Expiration Date, must tender their Old Capital Securities according to the
guaranteed delivery procedures set forth in "The Exchange Offer -- Procedures
for Tendering Old Capital Securities" in the Prospectus.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE
AGENT.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
<PAGE>
DESCRIPTION OF OLD CAPITAL SECURITIES TENDERED
<TABLE>
<CAPTION>
LIQUIDATION
AMOUNT OF LIQUIDATION NUMBER OF
OLD CAPITAL AMOUNT OF OLD CAPITAL BENEFICIAL HOLDERS
NAME AND ADDRESS OF SECURITIES SECURITIES TENDERED FOR WHICH OLD
REGISTERED HOLDER CERTIFICATE TENDERED (IF ALL (IF LESS THAN ALL ARE CAPITAL SECURITIES
(PLEASE FILL IN IF BLANK) NUMBERS* ARE TENDERED) TENDERED)** ARE HELD
<S> <C> <C> <C> <C>
$ $
$ $
$ $
TOTAL AMOUNT TENDERED: $ $
</TABLE>
* Need not be completed by book-entry holders.
** Old Capital Securities may be tendered in whole or in part in denominations
of $100,000 and integral multiples of $1,000 in excess thereof, provided that
if any Old Capital Securities are tendered for exchange in part, the
untendered Liquidation Amount thereof must be $100,000 or any integral
multiple of $1,000 in excess thereof. All Old Capital Securities held shall
be deemed tendered unless a lesser number is specified in this column.
(BOXES BELOW TO BE CHECK BY ELIGIBLE INSTITUTIONS (defined in Instruction 1)
ONLY)
[ ] CHECK HERE IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT
WITH DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
DTC Account Number
Transaction Code Number
[ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE
FOLLOWING:
Name of Registered Holder
Window Ticket Number (if any)
Date of Execution of Notice of Guaranteed Delivery
Name of Institution which Guaranteed Delivery
If Guaranteed Delivery is to be made By Book-Entry Transfer:
Name of Tendering Institution
DTC Account Number
Transaction Code Number
[ ] CHECK HERE IF OLD CAPITAL SECURITIES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER AND NON EXCHANGED OR UNTENDERED OLD CAPITAL SECURITIES ARE TO BE
RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET FORTH ABOVE.
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD CAPITAL
SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER
TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE
10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name:
Address:
Area Code and Telephone Number: Contact Person:
2
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to First Union Institutional Capital II, a
Delaware business trust (the "Issuer"), and First Union Corporation, a North
Carolina Corporation, as Depositor (the "Corporation"), the above-described
aggregate Liquidation Amount of the Trust's 7.85% Capital Securities (the "Old
Capital Securities") in exchange for a like aggregate Liquidation Amount of the
Trust's 7.85% Capital Securities (the "New Capital Securities") which have been
registered under the Securities Act of 1933 (the "Securities Act"), upon the
terms and subject to the conditions set forth in the Prospectus dated
, 1997 (as the same may be amended or supplemented from time to time,
the "Prospectus"), receipt of which is acknowledged, and in this Letter of
Transmittal (which, together with the Prospectus, constitute the "Exchange
Offer").
Subject to and effective upon the acceptance for exchange of all or any
portion of the Old Capital Securities tendered herewith in accordance with the
terms and conditions of the Exchange Offer (including, if the Exchange Offer is
extended or amended, the terms and conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to or upon the
order of the Issuer all right, title and interest in and to such Old Capital
Securities as are being tendered herewith. The undersigned hereby irrevocably
constitutes and appoints the Exchange Agent as its agent and attorney-in-fact
(with full knowledge that the Exchange Agent is also acting as agent of the
Corporation and the Issuer in connection with the Exchange Offer) with respect
to the tendered Old Capital Securities, with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest), subject only to the right of withdrawal described in the Prospectus,
to (i) deliver Certificates for Old Capital Securities to the Issuer together
with all accompanying evidences of transfer and authenticity to, or upon the
order of, the Issuer, upon receipt by the Exchange Agent, as the undersigned's
agent, of the New Capital Securities to be issued in exchange for such Old
Capital Securities, (ii) present Certificates for such Old Capital Securities
for transfer, and to transfer the Old Capital Securities on the books of the
Issuer, and (iii) receive for the account of the Issuer all benefits and
otherwise exercise all rights of beneficial ownership of such Old Capital
Securities, all in accordance with the terms and conditions of the Exchange
Offer.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS
FULL POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE OLD
CAPITAL SECURITIES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR
EXCHANGE, THE ISSUER WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE
THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES,
AND THAT THE OLD CAPITAL SECURITIES TENDERED HEREBY ARE NOT SUBJECT TO ANY
ADVERSE CLAIMS OR PROXIES. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND
DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY THE CORPORATION, THE ISSUER OR THE
EXCHANGE AGENT TO BE NECESSARY OR DESIRABLE TO COMPLETE THE EXCHANGE, ASSIGNMENT
AND TRANSFER OF THE OLD CAPITAL SECURITIES TENDERED HEREBY, AND THE UNDERSIGNED
WILL COMPLY WITH ANY OBLIGATIONS IT MAY HAVE UNDER THE REGISTRATION RIGHTS
AGREEMENT. THE UNDERSIGNED HAS READ AND AGREES TO ALL OF THE TERMS OF THE
EXCHANGE OFFER.
The name and address of the registered holder of the Old Capital Securities
tendered hereby should be printed above, if they are not already set forth
above, as they appear on the Certificates representing such Old Capital
Securities. The Certificate numbers and the Old Capital Securities that the
undersigned wishes to tender should be indicated in the appropriate boxes above.
If any tendered Old Capital Securities are not exchanged pursuant to the
Exchange Offer for any reason, or if Certificates are submitted for more Old
Capital Securities than are tendered or accepted for exchange, Certificates for
such nonexchanged or untendered Old Capital Securities will be returned (or, in
the case of Old Capital Securities tendered by book-entry transfer, such Old
Capital Securities will be credited to an account maintained at DTC), without
expense to the tendering holder, promptly following the expiration or
termination of the Exchange Offer.
The undersigned understands that tenders of Old Capital Securities pursuant
to any one of the procedures described under "The Exchange Offer -- Procedures
for Tendering Old Capital Securities" in the Prospectus and in the instructions
herein will, upon the Corporation's and the Issuer's acceptance for exchange of
such tendered Old Capital Securities, constitute a binding agreement between the
undersigned, the Corporation and the Issuer upon the terms and subject to the
conditions of the Exchange Offer. The undersigned recognizes that, under certain
circumstances set forth in the Prospectus, the Corporation and the Issuer may
not be required to accept for exchange any of the Old Capital Securities
tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby directs that the New Capital
Securities be issued in the name of the undersigned or, in the case of a
book-entry transfer of Old
3
<PAGE>
Capital Securities, that such New Capital Securities be credited to the account
indicated above maintained at DTC. If applicable, substitute Certificates
representing Old Capital Securities not exchanged or not accepted for exchange
will be issued to the undersigned or, in the case of a book-entry transfer of
Old Capital Securities, will be credited to the account indicated above
maintained at DTC. Similarly, unless otherwise indicated under "Special Delivery
Instructions" below, please deliver New Capital Securities to the undersigned at
the address shown below the undersigned's signature.
BY TENDERING OLD CAPITAL SECURITIES AND EXECUTING THIS LETTER OF
TRANSMITTAL, THE UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT (I) THE
UNDERSIGNED IS NOT AN "AFFILIATE" OF THE CORPORATION OR THE ISSUER WITHIN THE
MEANING OF RULE 405 UNDER THE SECURITIES ACT, (II) ANY NEW CAPITAL SECURITIES TO
BE RECEIVED BY THE UNDERSIGNED ARE BEING ACQUIRED IN THE ORDINARY COURSE OF ITS
BUSINESS, (III) THE UNDERSIGNED HAS NO ARRANGEMENT OR UNDERSTANDING WITH ANY
PERSON TO PARTICIPATE IN A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES
ACT) OF NEW CAPITAL SECURITIES TO BE RECEIVED IN THE EXCHANGE OFFER, AND (IV) IF
THE UNDERSIGNED IS NOT A BROKER-DEALER, THE UNDERSIGNED 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. BY TENDERING OLD CAPITAL
SECURITIES PURSUANT TO THE EXCHANGE OFFER AND EXECUTING THIS LETTER OF
TRANSMITTAL, A HOLDER OF OLD CAPITAL SECURITIES WHICH IS A BROKER-DEALER
REPRESENTS AND AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE LETTERS ISSUED BY
THE STAFF OF THE DIVISION OF CORPORATION FINANCE OF THE SECURITIES AND EXCHANGE
COMMISSION TO THIRD PARTIES, THAT (A) SUCH OLD CAPITAL SECURITIES HELD BY THE
BROKER-DEALER ARE HELD ONLY AS A NOMINEE, OR (B) SUCH OLD CAPITAL SECURITIES
WERE ACQUIRED BY SUCH BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT OF
MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES AND IT WILL DELIVER A
PROSPECTUS (AS AMENDED OR SUPPLEMENTED FROM TIME TO TIME) MEETING THE
REQUIREMENTS OF THE SECURITIES ACT IN CONNECTION WITH ANY RESALE OF SUCH NEW
CAPITAL SECURITIES (PROVIDED THAT, BY SO ACKNOWLEDGING AND BY DELIVERING A
PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE DEEMED TO ADMIT THAT IT IS AN
"UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES ACT).
THE CORPORATION AND THE ISSUER HAVE AGREED THAT, SUBJECT TO THE PROVISIONS
OF THE REGISTRATION RIGHTS AGREEMENT, THE 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
ACTIVITIES OR OTHER TRADING ACTIVITIES, FOR A PERIOD ENDING 180 DAYS AFTER THE
EXPIRATION DATE (SUBJECT TO EXTENSION UNDER CERTAIN LIMITED CIRCUMSTANCES
DESCRIBED IN THE PROSPECTUS) OR, IF EARLIER, WHEN ALL SUCH NEW CAPITAL
SECURITIES HAVE BEEN DISPOSED OF BY SUCH PARTICIPATING BROKER-DEALER. IN THAT
REGARD, EACH PARTICIPATING BROKER-DEALER WHO ACQUIRED OLD CAPITAL SECURITIES FOR
ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES, BY
TENDERING SUCH OLD CAPITAL SECURITIES AND EXECUTING THIS LETTER OF TRANSMITTAL,
AGREES THAT, UPON RECEIPT OF NOTICE FROM THE CORPORATION OR THE ISSUER OF THE
OCCURRENCE OF ANY EVENT OR THE DISCOVERY OF ANY FACT WHICH MAKES ANY STATEMENT
CONTAINED OR INCORPORATED BY REFERENCE IN THE PROSPECTUS UNTRUE IN ANY MATERIAL
RESPECT OR WHICH CAUSES THE PROSPECTUS TO OMIT TO STATE A MATERIAL FACT
NECESSARY IN ORDER TO MAKE THE STATEMENTS CONTAINED OR INCORPORATED BY REFERENCE
THEREIN, IN THE 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 PURSUANT TO THE PROSPECTUS UNTIL THE CORPORATION
OR THE ISSUER HAS AMENDED OR SUPPLEMENTED THE PROSPECTUS TO CORRECT SUCH
MISSTATEMENT OR OMISSION AND HAS FURNISHED COPIES OF THE AMENDED OR SUPPLEMENTED
PROSPECTUS TO THE PARTICIPATING BROKER-DEALER OR THE CORPORATION OR THE ISSUER
HAS GIVEN NOTICE THAT THE SALE OF THE NEW CAPITAL SECURITIES MAY BE RESUMED, AS
THE CASE MAY BE. IF THE CORPORATION OR THE ISSUER GIVES SUCH NOTICE TO SUSPEND
THE SALE OF THE NEW CAPITAL SECURITIES, IT SHALL EXTEND THE 180-DAY PERIOD
REFERRED TO ABOVE DURING WHICH PARTICIPATING BROKER-DEALERS ARE ENTITLED TO USE
THE 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
4
<PAGE>
NOTICE TO AND INCLUDING THE DATE WHEN PARTICIPATING BROKER-DEALERS SHALL HAVE
RECEIVED COPIES OF THE SUPPLEMENTED OR AMENDED PROSPECTUS NECESSARY TO PERMIT
RESALES OF THE NEW CAPITAL SECURITIES OR TO AND INCLUDING THE DATE ON WHICH THE
CORPORATION OR THE ISSUER HAS GIVEN NOTICE THAT THE SALE OF NEW CAPITAL
SECURITIES MAY BE RESUMED, AS THE CASE MAY BE.
Holders of Old Capital Securities whose Old Capital Securities are accepted
for exchange will not receive accumulated Distributions on such Old Capital
Securities for any period from and after the last Distribution date to which
Distributions have been paid or duly provided for on such Old Capital Securities
prior to the original issue date of the New Capital Securities or, if no such
Distributions have been paid or duly provided for, will not receive any accrued
Distributions on such Old Capital Securities, and the undersigned waives the
right to receive any interest on such Old Capital Securities accrued from and
after such Distribution date or, if no such Distributions have been paid or duly
provided for, from and after January 6, 1997.
All authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned. Except as
stated in the Prospectus, this tender is irrevocable.
5
<PAGE>
HOLDERS SIGN HERE
(SEE INSTRUCTIONS 2, 5 AND 6)
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON PAGE 14)
(NOTE: SIGNATURES MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 2)
Must be signed by registered holder exactly as name appears on Certificates
for the Old Capital Securities hereby tendered or on a security position
listing, or by any person authorized to become the registered holder by
endorsements and documents transmitted herewith (including such opinions of
counsel, certifications and other information as may be required by the
Corporation, the Issuer or the Exchange Agent to comply with the restrictions on
transfer applicable to the Old Capital Securities). If signature is by an
attorney-in-fact, executor, administrator, trustee, guardian, officer of a
corporation or another acting in a fiduciary capacity or representative
capacity, please set forth the signer's full title. See Instruction 5.
(Bullet)
(Bullet)
(SIGNATURE OF HOLDER)
Date: , 1997
Name
(PLEASE PRINT)
Capacity (full title)
Address
(INCLUDE ZIP CODE)
Area Code and Telephone Number
Tax Identification or Social Security Number
GUARANTEE OF SIGNATURE
(SEE INSTRUCTIONS 2 AND 5)
(Bullet)
(AUTHORIZED SIGNATURE)
Date: , 1997
Name of Firm
Capacity (full title)
(PLEASE PRINT)
Address
(INCLUDE ZIP CODE)
Area Code and Telephone Number
6
<PAGE>
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if the New Capital Securities and/or any Old Capital
Securities that are not tendered are to be issued in the name of someone other
than the registered holder of the Old Capital Securities whose name appears
above.
Issue
[ ] New Capital Securities
[ ] Old Capital Securities not tendered
to:
Name
Address
(INCLUDE ZIP CODE)
Area Code and Telephone Number
Tax Identification or Social Security Number
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if the New Capital Securities and/or any Old Capital
Securities that are not tendered are to be sent to someone other than the
registered holder of the Old Capital Securities whose name appears above, or to
such registered holder at an address other than that shown above.
Mail
[ ] New Capital Securities
[ ] Old Capital Securities not tendered
to:
Name
Address
(INCLUDE ZIP CODE)
Area Code and Telephone Number
Tax Identification or Social Security Number
7
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed either if (a)
Certificates are to be forwarded herewith or (b) tenders are to be made pursuant
to the procedures for tender by book-entry transfer set forth under "The
Exchange Offer -- Procedures for Tendering Old Capital Securities" in the
Prospectus and an Agent's Message is not delivered. Certificates, or book-entry
confirmation of a book-entry transfer of such Old Capital Securities into the
Exchange Agent's account at DTC, as well as this Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, and any other documents required by this Letter of
Transmittal, must be received by the Exchange Agent at its address set forth
herein on or prior to the Expiration Date. Tenders by book-entry transfer may
also be made by delivering an Agent's Message in lieu of this Letter of
Transmittal. The term "book-entry confirmation" means a confirmation of
book-entry transfer of Old Capital Securities into the Exchange Agent's account
at DTC. The term "Agent's Message" means a message, transmitted by DTC to and
received by the Exchange Agent and forming a part of a book-entry confirmation,
which states that DTC has received an express acknowledgment from the tendering
participant, which acknowledgment states that such participant has received and
agrees to be bound by the Letter of Transmittal (including the representations
contained herein) and that the Issuer and the Corporation may enforce the Letter
of Transmittal against such participant. Old Capital Securities may be tendered
in whole or in part in the Liquidation Amount of $100,000 (100 Capital
Securities) and integral multiples of $1,000 in excess thereof, provided that,
if any Old Capital Securities are tendered for exchange in part, the untendered
Liquidation Amount thereof must be $100,000 (100 Capital Securities) or any
integral multiple of $1,000 in excess thereof.
Holders who wish to tender their Old Capital Securities and (i) whose Old
Capital Securities are not immediately available or (ii) who cannot deliver
their Old Capital Securities, this Letter of Transmittal and all other required
documents to the Exchange Agent on or prior to the Expiration Date or (iii) who
cannot complete the procedures for delivery by book-entry transfer on or prior
to the Expiration Date, may tender their Old Capital Securities by properly
completing and duly executing a Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedures set forth under in "The Exchange Offer --
Procedures for Tendering Old Capital Securities" in the Prospectus. Pursuant to
such procedures: (i) such tender must be made by or through an Eligible
Institution (as defined below); (ii) a properly completed and duly executed
Notice of Guaranteed Delivery, substantially in the form made available by the
Corporation and the Issuer, must be received by the Exchange Agent on or prior
to the Expiration Date; and (iii) the Certificates (or a book-entry confirmation
(as defined in the Prospectus)) representing all tendered Old Capital
Securities, in proper form for transfer, together with a Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, with any required
signature guarantees and any other documents required by this Letter of
Transmittal, must be received by the Exchange Agent within three New York Stock
Exchange Inc. trading days after the date of execution of such Notice of
Guaranteed Delivery, all as provided in "The Exchange Offer -- Procedures for
Tendering Old Capital Securities" in the Prospectus.
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. For Old Capital
Securities to be properly tendered pursuant to the guaranteed delivery
procedure, the Exchange Agent must receive a Notice of Guaranteed Delivery on or
prior to the Expiration Date. As used herein and in the Prospectus, "Eligible
Institution" means 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.
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE
AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY ON OR PRIOR TO THE
EXPIRATION DATE.
Neither the Corporation nor the Issuer will accept any alternative,
conditional or contingent tenders. Each tendering holder, by execution of a
Letter of Transmittal (or facsimile thereof), waives any right to receive any
notice of the acceptance of such tender.
8
<PAGE>
2. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered holder
(which term, for purposes of this document, shall include any participant
in DTC whose name appears on a security position listing as the owner of
the Old Capital Securities) of Old Capital Securities tendered herewith,
unless such holder has completed either the box entitled "Special Issuance
Instructions" or the box entitled "Special Delivery Instructions" above, or
(ii) such Old Capital Securities are tendered for the account of a
firm that is an Eligible Institution.
In all other cases, an Eligible Institution must guarantee the signature on
this Letter of Transmittal. See Instruction 5.
3. INADEQUATE SPACE. If the space provided in the box captioned
"Description of Old Capital Securities" is inadequate, the Certificate numbers
and/or the Liquidation Amount of Old Capital Securities and any other required
information should be listed on a separate signed schedule which is attached to
this Letter of Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Old Capital Securities
will be accepted only in the Liquidation Amount of $100,000 (100 Capital
Securities) and integral multiples of $1,000 in excess thereof, provided that if
any Old Capital Securities are tendered for exchange in part, the untendered
Liquidation Amount thereof must be $100,000 (100 Capital Securities) or any
integral multiple of $1,000 in excess thereof. If less than all the Old Capital
Securities evidenced by any Certificate submitted are to be tendered, fill in
the Liquidation Amount of Old Capital Securities which are to be tendered in the
box entitled "Liquidation Amount of Old Capital Securities Tendered (If Less
than All are Tendered)." In such case, a new Certificate for the remainder of
the Old Capital Securities that were evidenced by your Old Certificate will be
sent to the holder of the Old Capital Securities, promptly after the Expiration
Date unless the appropriate boxes on this Letter of Transmittal are completed.
All Old Capital Securities represented by Certificates delivered to the Exchange
Agent will be deemed to have been tendered unless otherwise indicated.
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, telegraphic, telex or facsimile
transmission of such notice of withdrawal must be received by the Exchange Agent
at one of its addresses set forth above or in the Prospectus 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
Liquidation Amount of Old Capital Securities to be withdrawn, and (if
Certificates for Old Capital Securities have been tendered) the name of the
registered holder of the Old Capital Securities as set forth on the Certificates
for the Old Capital Securities, if different from that of the person who
tendered such Old Capital Securities. If Certificates for the Old Capital
Securities have been delivered or otherwise identified to the Exchange Agent,
then prior to the physical release of such Certificates for the Old Capital
Securities, the tendering holder must submit the serial numbers shown on the
particular Certificates for the 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 under "The Exchange
Offer-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 on or prior to the Expiration Date. 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 in the Prospectus
under "The Exchange Offer -- 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 Corporation and
the Issuer, in their sole discretion, whose determination shall be final and
binding on all parties. The Corporation and the Issuer, any affiliates or
assigns of the Corporation and the Issuer, the Exchange Agent or any other
person shall not 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 on or prior to the Expiration Date will be returned to
the holder thereof without cost to such holder promptly after withdrawal.
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder of the Old Capital
Securities tendered hereby, the signature must correspond exactly with the name
as written on the face of the Certificates without alteration, enlargement or
any change whatsoever.
9
<PAGE>
If any of the Old Capital Securities tendered hereby are owned of record by
two or more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Old Capital Securities are registered in different names on
several Certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal (or facsimiles thereof) as there are different
registrations of Certificates.
If this Letter of Transmittal or any Certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing and must submit proper evidence
satisfactory to the Corporation and the Issuer, in their sole discretion, of
such persons' authority to so act.
When this Letter of Transmittal is signed by the registered holder of the
Old Capital Securities listed and transmitted hereby, no endorsement of
Certificates or separate bond powers are required unless New Capital Securities
are to be issued in the name of a person other than the registered holder.
Signatures on such Certificates or bond powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder of the Old Capital Securities listed, the Certificates must be
endorsed or accompanied by appropriate bond powers, signed exactly as the name
of the registered holder appears on the Certificates, and also must be
accompanied by such opinions of counsel, certifications and other information as
the Corporation, the Issuer or the Exchange Agent may require in accordance with
the restrictions on transfer applicable to the Old Capital Securities.
Signatures on such Certificates or bond powers must be guaranteed by an Eligible
Institution.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If New Capital Securities
are to be issued in the name of a person other than the registered holder, or if
New Capital Securities are to be sent to someone other than the registered
holder or to an address other than that shown above, the appropriate boxes on
this Letter of Transmittal should be completed. Certificates for Old Capital
Securities not exchanged will be returned by mail or, if tendered by book-entry
transfer, by crediting the account indicated above maintained at DTC unless the
appropriate boxes on this Letter of Transmittal are completed. See Instruction
4.
7. IRREGULARITIES. The Corporation and the Issuer will determine, in their
sole discretion, all questions as to the form of documents, validity,
eligibility (including time of receipt) and acceptance for exchange of any
tender of Old Capital Securities, which determination shall be final and binding
on all parties. The Corporation and the Issuer reserve the absolute right to
reject any and all tenders determined by either of them not to be in proper form
or the acceptance of which, or exchange for, may, in the view of counsel to the
Corporation or the Issuer, be unlawful. The Corporation and the Issuer also
reserve the absolute right, subject to applicable law, to waive any of the
conditions of the Exchange Offer set forth in the Prospectus under "The Exchange
Offer -- Certain Conditions to the Exchange Offer" or any conditions 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 Corporation's and the Issuer's interpretation of the terms
and conditions of the Exchange Offer (including this Letter of Transmittal and
the instructions hereto) 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. The Corporation, the
Issuer, any affiliates or assigns of the Corporation, the Issuer, the Exchange
Agent, or any other person shall not be under any duty to give notification of
any irregularities in tenders or incur any liability for failure to give such
notification.
8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions and
requests for assistance may be directed to the Exchange Agent at its address and
telephone number set forth on the front of this Letter of Transmittal.
Additional copies of the Prospectus, the Notice of Guaranteed Delivery and the
Letter of Transmittal may be obtained from the Exchange Agent or from your
broker, dealer, commercial bank, trust company or other nominee.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a holder whose tendered Old Capital Securities are accepted for
exchange is required to provide the Exchange Agent with such holder's correct
taxpayer identification number ("TIN") on the Substitute Form W-9 below. If the
Exchange Agent is not provided with the correct TIN, the Internal Revenue
Service (the "IRS") may subject the holder or other payee to a $50 penalty. In
addition, payments to such holders or other payees with respect to Old Capital
Securities exchanged pursuant to the Exchange Offer may be subject to 31% backup
withholding.
10
<PAGE>
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering holder has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 3 is checked, the
holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Exchange Agent. The Exchange Agent will retain such amounts
withheld during the 60 day period following the date of the Substitute Form W-9.
If the holder furnishes the Exchange Agent with its TIN within 60 days after the
date of the Substitute Form W-9, the amounts retained during the 60 day period
will be remitted to the holder and no further amounts shall be retained or
withheld from payments made to the holder thereafter. If, however, the holder
has not provided the Exchange Agent with its TIN within such 60 day period,
amounts withheld will be remitted to the IRS as backup withholding. In addition,
31% of all payments made thereafter will be withheld and remitted to the IRS
until a correct TIN is provided.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the Old Capital Securities or of the last transferee appearing on the transfers
attached to, or endorsed on, the Old Capital Securities. If the Old Capital
Securities are registered in more than one name or are not in the name of the
actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" on the face
thereof, to avoid possible erroneous backup withholding. A foreign person may
qualify as an exempt recipient by submitting a properly completed IRS Form W-8,
signed under penalties of perjury, attesting to that holder's exempt status.
Please consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
holders are exempt from backup withholding.
Backup withholding is not an additional U.S. Federal income tax. Rather,
the U.S. Federal income tax liability of a person subject to backup withholding
will be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained.
10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Certificates
representing Old Capital Securities have been lost, destroyed or stolen, the
holder should promptly notify the Exchange Agent. The holder will then be
instructed as to the steps that must be taken in order to replace the
Certificates. This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, destroyed or stolen
Certificates have been followed.
11. SECURITY TRANSFER TAXES. 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 tax (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.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF) AND ALL OTHER
REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO THE
EXPIRATION DATE.
11
<PAGE>
<TABLE>
<S> <C> <C>
PAYER'S NAME: WILMINGTON TRUST COMPANY
PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT Social security
number OR
Employer
SUBSTITUTE AND CERTIFY BY SIGNING AND DATING BELOW. identification
FORM W-9 number
Department of the Treasury
Internal Revenue Service PART 2 -- CERTIFICATION -- Under penalties of perjury, I certify that:
PAYER'S REQUEST FOR (1) The number shown on this form is my correct Taxpayer Identification Number
TAXPAYER (or I am waiting for a number to be issued to me) and
(2) I am not subject to backup withholding either because: (a) I am exempt from
IDENTIFICATION backup withholding, or (b) I have not been notified by the Internal Revenue
NUMBER (TIN) Service (the "IRS") that I am subject to backup withholding as a result of
a failure to report all interest or dividends, or (c) the IRS has notified
me that I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have
been notified by the IRS that you are currently subject to backup withholding
because of underreporting interest or dividends on your tax return. However, if
after being notified by the IRS that you are subject to backup withholding, you
received another notification from the IRS that you are no longer subject to
backup withholding, do not cross out such item (2).
THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF
THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP
WITHHOLDING.
SIGNATURE DATE
NAME (Please Print)
ADDRESS (Please Print)
PART 3 --
Awaiting TIN [ ]
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER AND CONSENT
SOLICITATION. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all reportable payments made to me will be withheld, but that such amounts
will be refunded to me if I then provide a Taxpayer Identification Number within
sixty (60) days.
Signature Date
Name (Please Print)
Address (Please Print)
12
<PAGE>
EXHIBIT 99(b)
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
7.85% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
OF
FIRST UNION INSTITUTIONAL CAPITAL II
This Notice of Guaranteed Delivery, or one substantially equivalent to this
form, must be used to accept the Exchange Offer (as defined below) if (i)
certificates for the Issuer's (as defined below) 7.85% Capital Securities (the
"Old Capital Securities") are not immediately available, (ii) Old Capital
Securities, the Letter of Transmittal and all other required documents cannot be
delivered to Wilmington Trust Company (the "Exchange Agent") on or prior to the
Expiration Date (as defined in the Prospectus referred to below) or (iii) the
procedures for delivery by book-entry transfer cannot be completed on or prior
to the Expiration Date. This Notice of Guaranteed Delivery may be delivered by
hand, overnight courier or mail, or transmitted by facsimile transmission, to
the Exchange Agent on or prior to the Expiration Date. See "The Exchange Offer
Procedures for Tendering Old Capital Securities" in the Prospectus.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
WILMINGTON TRUST COMPANY
BY MAIL/OVERNIGHT DELIVERY/HAND:
Wilmington Trust Company
Corporate Trust Operation
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attn: Jill Rylee
TO CONFIRM BY TELEPHONE OR FOR INFORMATION:
(302) 651-8869
FACSIMILE TRANSMISSIONS:
(302) 651-1079
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA
FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID
DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to First Union Institutional Capital II, a
Delaware business trust, upon the terms and subject to the conditions set forth
in the Prospectus dated , 1997 (as the same may be amended or
supplemented from time to time, the "Prospectus"), and the related Letter of
Transmittal (which together constitute the "Exchange Offer"), receipt of which
is hereby acknowledged, the aggregate principal amount of Old Capital Securities
set forth below pursuant to the guaranteed delivery procedures set forth in the
Prospectus under the caption "The Exchange Offer -- Procedures for Tendering Old
Capital Securities."
<TABLE>
<S> <C>
Aggregate Liquidation Name of Registered Holder:
Amount Tendered:
Certificate Nos. Address:
(if available):
Area Code and Telephone Number:
</TABLE>
If Old Capital Securities will be tendered by book-entry transfer, provide the
following information:
Signature:
DTC Account Number:
Date:
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
2
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity identified in Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) a bank; (ii) a
broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker, government securities 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 recognized program (each of the foregoing being
referred to as an "Eligible Institution"), hereby guarantees to deliver to the
Exchange Agent, at one of its addresses set forth above, either the Old Capital
Securities tendered hereby in proper form for transfer, or confirmation of the
book-entry transfer of such Old Capital Securities to the Exchange Agent's
account at The Depository Trust Company ("DTC"), pursuant to the procedures for
book-entry transfer set forth in the Prospectus, in either case together with
one or more properly completed and duly executed Letters of Transmittal (or
facsimile thereof) and any other required documents within three business days
after the date of execution of this Notice of Guaranteed Delivery.
The undersigned acknowledges that it must deliver the Letters of
Transmittal and the Old Capital Securities tendered hereby to the Exchange Agent
within the time period set forth above and that failure to do so could result in
a financial loss to the undersigned.
Name of Firm
(Authorized Signature)
(Title)
Address
(INCLUDE ZIP CODE)
Area Code and Telephone Number
Date
NOTE: DO NOT SEND OLD CAPITAL SECURITIES WITH THIS NOTICE OF GUARANTEED
DELIVERY. ACTUAL SURRENDER OF OLD CAPITAL SECURITIES MUST BE MADE PURSUANT
TO, AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND DULY EXECUTED LETTER
OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS.
3
