As filed with the Securities and Exchange Commission on March 31, 1999
Registration No. 333-70489
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Form S-3
AMENDMENT NO. 2
TO
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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<TABLE>
<CAPTION>
<S> <C>
First Union Corporation The Money Store, Inc.
(Exact name of registrant as specified in its charter) (Exact name of registrant as specified in its charter)
North Carolina 56-0898180 New Jersey 22-2293022
(State or other jurisdiction of (I.R.S. Employer Identification No.) (State or other jurisdiction of (I.R.S. Employer
incorporation or organization) incorporation or organization) Identification No.)
One First Union Center 3301 C Street, Suite 100-M
Charlotte, North Carolina 28288-0013 Sacramento, California 95816
(704) 374-6565 (916) 446-5000
(Address, including zip code, and telephone number, including (Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices) area code, of registrant's principal executive offices)
</TABLE>
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Marion A. Cowell, Jr., Esq.
Executive Vice President, Secretary and General Counsel
First Union Corporation
One First Union Center
Charlotte, North Carolina 28288-0013
(704) 374-6828
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copy to:
William J. Williams, Jr., Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
(212) 558-3722
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Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement,
as determined in the light of market and other conditions.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
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.
SUBJECT TO COMPLETION, DATED MARCH 31, 1999
First Union Corporation
(First Union logo appears here)
First Union Corporation has acquired financial services institutions which
have issued unsecured debt securities consisting of the senior debt securities
and subordinated debt securities listed below. As a result of these
acquisitions, First Union has assumed or guaranteed these debt securities as
indicated below.
FIRST UNION CORPORATION
Assumed Debt Securities
<TABLE>
<CAPTION>
Senior Debt Securities Subordinated Debt Securities
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<S> <C>
$150,000,000 of 6 5/8% Notes of Meridian Bancorp, $75,000,000 of 9 7/8% Capital Notes of Florida National
Inc. due June 15, 2000 Banks of Florida, Inc. due May 15, 1999
$35,000,000 of 6.186% Medium-Term Notes of $100,000,000 of 9 5/8% Notes of Signet Banking
CoreStates Capital Corp. due October 2, 2000 Corporation due June 1, 1999
$49,000,000 of 5.75% Medium-Term Notes of $75,000,000 of 9 5/8% Capital Notes of Dominion
CoreStates Capital Corp. due January 15, 2001 Bankshares Corporation due June 15, 1999
$35,000,000 of 5.625% Medium-Term Notes of $150,000,000 of 9 5/8% Notes of First Fidelity
CoreStates Capital Corp. due February 12, 2001 Bancorporation due August 15, 1999
$150,000,000 of 9 5/8% Notes of CoreStates Capital
Corp. due February 15, 2001
$100,000,000 of 7 7/8% Debentures of Meridian
Bancorp, Inc. due July 15, 2002
$100,000,000 of 9 3/8% Notes of CoreStates Capital
Corp. due April 15, 2003
$150,000,000 of 6.80% Notes of First Fidelity
Bancorporation due June 15, 2003
$200,000,000 of 5 7/8% Notes of CoreStates Capital
Corp. due October 15, 2003
$175,000,000 of 6 5/8% Notes of CoreStates Capital
Corp. due March 15, 2005
$200,000,000 of 6.75% Medium-Term Notes of
CoreStates Capital Corp. due November 15, 2006
</TABLE>
THE MONEY STORE, INC.
Debt Securities guaranteed by First Union Corporation
<TABLE>
<CAPTION>
Senior Debt Securities Subordinated Debt Securities
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<S> <C>
$175,000,000 of 8.05% Notes due April 15, 2002 $150,000,000 of 7.30% Notes due December 1, 2002
$125,000,000 of 8.375% Notes due April 15, 2004 $100,000,000 of 7.95% Notes due December 1, 2007
</TABLE>
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Neither the Securities and Exchange Commission nor any other regulatory
body has approved of these securities or passed upon the adequacy or accuracy
of this prospectus. Any representation to the contrary is a criminal offense.
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This prospectus has been prepared in connection with offers and sales
related to market-making and other transactions in the debt securities listed
above and will be used by First Union Capital Markets Corp., an affiliate of
First Union and The Money Store. First Union Capital Markets Corp. may act as
principal or agent in these transactions. The sales may be made at prices
related to prevailing market rates at the time of sale or otherwise.
The date of this prospectus is , 1999.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
The Company ................................... 2
Consolidated Ratios of Earnings to Fixed
Charges .................................... 3
General Information Regarding the Debt
Securities ................................. 3
Subordination of the Subordinated Debt
Securities Generally .................... 4
Book-Entry Debt Securities ................. 5
Description of Assumed Senior Debt
Securities ................................. 7
Meridian 6 5/8% Senior Notes ............... 7
CoreStates Senior Medium-Term Notes ........ 11
Description of Assumed Subordinated Debt
Securities ................................. 15
Florida National Subordinated Capital
Notes ................................... 15
</TABLE>
<TABLE>
<S> <C>
Signet 9 5/8% Subordinated Notes ........... 19
CoreStates Subordinated Debt Securities..... 22
First Fidelity Subordinated Notes .......... 25
Dominion Subordinated Capital Notes ........ 31
Meridian 7 7/8% Subordinated
Debentures .............................. 35
Description of The Money Store Debt
Securities and Guarantees .................. 36
The Money Store Senior Notes ............... 37
The Money Store Subordinated Notes ......... 42
The Guarantees ............................. 44
Available Information ......................... 45
Experts ....................................... 46
Plan of Distribution .......................... 46
Validity of Securities ........................ 46
</TABLE>
THE COMPANY
First Union was incorporated under the laws of North Carolina in 1967
and is registered as a bank holding company under the Bank Holding Company Act
of 1956, as amended. As used in this prospectus, the term "First Union" refers
to First Union Corporation, the holding company, and not the consolidated
entity.
In a corporate reorganization in 1968, First Union National Bank of
North Carolina and First Union Mortgage Corporation became subsidiaries of
First Union. First Union National Bank of North Carolina merged into First
Union National Bank in February 1998.
First Union and its subsidiaries provide a wide range of commercial and
retail banking and trust services through full-service banking offices in
Connecticut, Delaware, Florida, Georgia, Maryland, New Jersey, New York, North
Carolina, Pennsylvania, South Carolina, Tennessee, Virginia and Washington,
D.C. Most of these offices are operated by First Union National Bank, which is
based in Charlotte, North Carolina. In addition, First Union Bank of Delaware
operates offices in Delaware. First Union and its subsidiaries also provide
various other financial services, including mortgage banking, credit card, home
equity lending, leasing, investment banking, insurance and securities brokerage
services.
The Money Store is a financial services company engaged in the business
of originating, selling and servicing consumer and commercial loans and
offering related services. As used in this prospectus, the term "The Money
Store" refers to The Money Store, Inc., the holding company, and not the
consolidated entity.
Loans originated by The Money Store and its subsidiaries primarily
consist of:
o fixed and adjustable rate loans secured by mortgages on residential
real estate and loans which allow consumers to borrow up to 125
percent of the value of their homes,
o loans guaranteed in part by the United States Small Business
Administration and commercial loans generally secured by first
mortgages,
o government-guaranteed student loans, and
o motor vehicle retail installment sale contracts purchased from
automobile dealers.
First Union and its affiliates have completed approximately 80
acquisitions of financial services institutions since 1985. These financial
services institutions either have merged into First Union or are wholly-owned
subsidiaries of First Union. See "General Information Regarding the Debt
Securities" for a brief description of the acquisitions of the entities that
originally issued the debt securities covered by this prospectus.
First Union's principal executive offices are located at One First Union
Center, Charlotte, North Carolina 28288-0013 (telephone number: (704) 374-6565).
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CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Years Ended December 31,*
-------------------------------------------------------
1998 1997 1996 1995 1994
------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Excluding interest on deposits ......... 2.13X 2.50 2.58 2.87 3.47
Including interest on deposits ......... 1.51X 1.57 1.56 1.58 1.72
</TABLE>
* Restated to reflect various pooling of interests acquisitions,
including First Union's pooling of interests acquisition of CoreStates
Financial Corp completed on April 28, 1998.
For purposes of computing these ratios:
o 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).
o Fixed charges, excluding interest on deposits, represent interest
(including capitalized interest), one-third of rents and all
amortization of debt issuance costs.
o Fixed charges, including interest on deposits, represent all interest
(including capitalized interest), one-third of rents and all
amortization of debt issuance costs.
One-third of rents is used because it is the proportion deemed representative
of the interest factor.
GENERAL INFORMATION REGARDING THE
DEBT SECURITIES
The debt securities covered by this prospectus were issued by financial
services institutions which were subsequently acquired by First Union.
o First Union acquired Florida National Banks of Florida, Inc. on
January 29, 1990, by merging Florida National into a wholly-owned
subsidiary of First Union. On June 23, 1995, this subsidiary merged
into First Union.
o First Union acquired Dominion Bankshares Corporation on March 1, 1993,
by merging Dominion into a wholly-owned subsidiary of First Union. On
July 31, 1997, this subsidiary merged into First Union.
o First Union acquired First Fidelity Bancorporation on January 1, 1996,
by merging First Fidelity into a wholly-owned subsidiary of First
Union. On February 26, 1998, this subsidiary merged into First Union.
o First Union acquired Signet Banking Corporation on November 30, 1997,
by merging Signet into First Union.
o First Union acquired CoreStates Financial Corp on April 28, 1998, by
merging CoreStates into First Union. CoreStates Capital Corp became a
wholly-owned subsidiary of First Union as a result of the CoreStates
acquisition, and merged into First Union on May 15, 1998.
o CoreStates had previously acquired Meridian Bancorp, Inc. on April 9,
1996, by merging Meridian into CoreStates.
o First Union acquired The Money Store on June 30, 1998, by merging a
wholly-owned subsidiary of First Union National Bank into The Money
Store.
As a result of these mergers, First Union is responsible for the
obligations of Florida National, Dominion, First Fidelity, Signet, CoreStates,
CoreStates Capital and Meridian with respect to their debt securities. In
addition, First Union has guaranteed the payment of the obligations of The
Money Store with respect to its debt securities.
The debt securities covered by this prospectus are not deposits or other
obligations of a bank and are not insured by the Federal Deposit Insurance
Corporation or any other governmental agency.
The senior debt securities covered by this prospectus have been issued
under various senior indentures between the issuers and the trustees named in
this prospectus. The subordinated debt securities covered by this prospectus
have been issued under various subordinated indentures between the issuers and
the trustees named in this prospectus. A copy of each indenture is incorporated
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by reference as an exhibit to the registration statement of which this
prospectus is a part. As used in this prospectus, the term "issuer" refers to
First Union or The Money Store, as appropriate.
The descriptions of the debt securities and the indentures in this
prospectus are only summaries. These descriptions are not complete and are
qualified by reference to the indentures, including the definitions of certain
terms used in this prospectus. Section references in this prospectus refer to
sections of the applicable indenture.
None of the indentures limits the amount of debt securities or of any
particular series of debt securities which may be issued under that indenture
and each provides that debt securities issued under such indenture may be
issued from time to time in one or more series, except that the Dominion
Subordinated Indenture limits the aggregate principal amount of Dominion
Subordinated Capital Notes to $75 million and the Florida National Subordinated
Indenture limits the aggregate principal amount of Florida National
Subordinated Capital Notes to $75 million. None of the indentures limits the
amount of other debt that may be issued by the issuers or contains financial or
similar restrictive covenants relating to the issuers. The issuers expect to
incur additional indebtedness.
First Union is a legal entity separate and distinct from its
subsidiaries. Therefore, the rights of First Union to participate in any
distribution of assets of any subsidiary upon its liquidation or reorganization
or otherwise would be subject to the prior claims of creditors of that
subsidiary, except to the extent that First Union itself may be recognized as a
creditor of that subsidiary. The ability of holders of debt securities to
benefit indirectly from any such distribution may therefore be limited. Claims
on First Union's subsidiary banks by other creditors include indebtedness and
substantial obligations with respect to deposit liabilities and federal funds
purchased, securities sold under repurchase agreements, other short-term
borrowings and various other financial obligations.
Except as otherwise specified in this prospectus, none of the debt
securities are:
o redeemable prior to maturity,
o subject to repayment at the option of the holders prior to maturity,
or
o entitled to the benefit of any sinking fund.
First Union or its affiliates may at any time repurchase the debt
securities at any price, in the open market or otherwise. Debt securities
purchased by First Union may be held, resold or surrendered to the applicable
trustee for cancellation.
Except as otherwise specified in this prospectus, interest on the debt
securities is computed on the basis of a 360-day year of twelve 30-day months.
Subordination of the Subordinated Debt Securities Generally
The obligations of the issuers to pay the principal of and interest on
any subordinated debt securities covered by this prospectus are subordinate and
junior in right of payment to all "Senior Indebtedness" of First Union, as
defined in each subordinated indenture. A description of the subordination
provisions of each particular series of subordinated debt securities, and of
the definition of Senior Indebtedness with respect to that series, is included
below under "Description of Assumed Subordinated Debt Securities" and
"Description of The Money Store Debt Securities and Guarantees -- The Money
Store Subordinated Notes".
Under the circumstances described below, holders of all Senior
Indebtedness, as defined in each applicable indenture, will first be entitled
to receive payment in full of all amounts due or to become due before the
holders of subordinated debt securities will be entitled to receive any
payment. These circumstances include:
o any payment or distribution of assets to creditors upon liquidation,
dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshalling of assets or any bankruptcy, insolvency or
similar proceedings of an issuer, and
o acceleration of the maturity of any subordinated debt securities.
As a result of this subordination in favor of the holders of Senior
Indebtedness, creditors of an issuer who are not holders of Senior Indebtedness
or holders of the subordinated debt securities may recover less,
proportionally, than the holders of Senior Indebtedness and may recover more,
proportionally, than the holders of the subordinated debt securities. Creditors
of an issuer other than holders of Senior Indebtedness, as defined in each
subordinated indenture, are not entitled to the benefits of the subordination
provisions of that subordinated
4
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indenture. As a result of the differing definitions of Senior Indebtedness in
the various subordinated indentures, obligations of an issuer may be considered
Senior Indebtedness with respect to some subordinated debt securities and not
with respect to others. Therefore, some creditors of an Issuer may recover more
or less, proportionally, than other creditors.
None of the subordinated indentures limits the amount of additional
Senior Indebtedness that may be issued or other obligations that may be
incurred by the issuer. First Union currently has an effective shelf
registration statement under which it may issue debt securities that are senior
to the subordinated debt securities. First Union and The Money Store expect to
issue additional indebtedness and incur other obligations, some of which may
constitute Senior Indebtedness under the subordinated indentures.
Book-Entry Debt Securities
Except as otherwise specified in this prospectus, the debt securities
have been issued in permanent global form as book-entry debt securities. Upon
issuance, all book-entry debt securities of the same series are represented by
one or more permanent global debt securities. Each permanent global debt
security has been deposited with, or on behalf of, The Depository Trust
Company, as Depositary, and has been registered in the name of the Depositary
or its nominee. The Depositary is located in the Borough of Manhattan, The City
of New York.
Ownership of book-entry debt securities is limited to institutions that
have accounts with the Depositary or its nominee or persons that may hold
interests through such participants. Ownership of book-entry debt securities by
participants is evidenced only by records maintained by the Depositary or its
nominee. Ownership of book-entry debt securities by persons that hold interests
through participants will be evidenced only by records maintained by such
participant. Transfers of such ownership interests will be effected only
through records maintained by the Depositary or its nominee or the
participants, as applicable. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
definitive form. These laws may limit the ability to transfer book-entry debt
securities.
The Depositary has advised First Union that the Depositary is a limited
purpose trust company organized under the New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code, and a "clearing agency" registered pursuant to
Section 17A of the Exchange Act. The Depositary was created to hold securities
of its participants and to facilitate the clearance and settlement of
securities transactions among its participants in such securities through
electronic book-entry changes in accounts of participants. This eliminates the
need for physical movement of securities certificates. The Depositary's
participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations. Indirect access to the
Depositary's book-entry system is also available to others, such as banks,
brokers, dealers and trust companies, that clear through or maintain a
custodial relationship with a participant, either directly or indirectly.
The Depositary has advised First Union that upon the issuance of a
permanent global debt security and its deposit with the Depositary, the
Depositary immediately credits the accounts of participants on its book-entry
system with the respective principal amounts of the book-entry debt securities
represented by the permanent global debt security.
All payments on book-entry debt securities represented by the permanent
global debt security will be made to the Depositary or its nominee as the
registered owner and the holder of the permanent global debt security. Payments
to the Depositary or its nominee will be made in immediately available funds at
the offices of the applicable paying agent, in the Borough of Manhattan, The
City of New York. In the case of payments of principal and any premium,
however, the permanent global debt security must be presented to such paying
agent in time for the paying agent to make such payments in such funds in
accordance with its normal procedures. None of the issuers, the trustees or any
of their agents will have any responsibility or liability for any aspect of the
Depositary's records or any participant's records relating to or payments made
on account of book-entry debt securities or
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for maintaining, supervising or reviewing any of the Depositary's records or
any participant's records relating to such book-entry debt securities.
The Depositary has advised First Union that upon receipt of any payment
in respect of a permanent global debt security, the Depositary will immediately
credit the accounts of participants on its book-entry system with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such permanent global debt security as shown on the records of the
Depositary. Payments by participants to owners of book-entry debt securities
held through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers registered in "street name". These payments will be the
responsibility of the participants.
No permanent global debt security may be transferred except as a whole
by the Depositary for such permanent global debt security to a nominee of the
Depositary or by a nominee of the Depositary.
Book-entry debt securities represented by a permanent global debt
security are exchangeable for definitive Debt Securities in registered form
only if:
o the Depositary notifies the issuer that it is unwilling or unable to
continue as Depositary for such permanent global debt security or if
at any time the Depositary ceases to be a clearing agency registered
under the Exchange Act,
o the issuer in its sole discretion determines that such book-entry debt
securities shall be exchangeable for definitive debt securities in
registered form, or
o (except with respect to the debt securities originally issued by
Meridian) any event occurs and is continuing which, after notice or
lapse of time or both, would become an event of default under the
applicable indenture.
Except as otherwise specified in this prospectus, any permanent global debt
security that is exchangeable under those circumstances is exchangeable in
whole for definitive debt securities in registered form. These definitive debt
securities will be registered in the names that the Depositary instructs the
registrar of such debt securities. Instructions may be based upon directions
received by the Depositary from its participants with respect to ownership of
book-entry debt securities.
Except as specified above, owners of book-entry debt securities will not be
entitled to receive physical delivery of debt securities in definitive form and
will not be considered the holders for any purpose under the indentures, and no
permanent global debt security representing book-entry debt securities will be
exchangeable other than for another permanent global debt security to be
registered in the name of the Depositary or its nominee. Each person owning a
book-entry debt security must rely on the procedures of the Depositary to
exercise any rights of a holder under the applicable indenture.
Non-participants must further rely on the procedures of the participants
through which they own their interests.
The indentures provide that the Depositary, as a holder, may appoint
agents and otherwise authorize participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action which
a holder is entitled to give or take under the applicable indentures. The
issuers understand that existing industry practices are as follows. In the
event that an issuer requests any action of holders or an owner of a book-entry
debt security desires to give or take any action a holder is entitled to give
or take under the applicable indenture, the Depositary would authorize the
participants owning the relevant book-entry debt securities to give or take
this action. Participants would, in turn, authorize beneficial owners to give
or take this action or would otherwise act upon the instructions of beneficial
owners.
The Depositary's Year 2000 Efforts
The Depositary's management is aware that some computer systems that are
dependent upon calendar dates, including dates before, on, and after January 1,
2000, may encounter "Year 2000" problems. The Depositary has informed its
participants and other members of the financial community that it has developed
and is implementing a program so that its computer systems, as they relate to
the timely payment of all distributions to security-holders, book-entry
deliveries, and settlement of trades within the Depositary, continue to
function appropriately. This program includes a technical assessment and a
remediation plan, each of which is complete. The Depositary's plan also
includes a testing phase, which is expected to be completed within appropriate
time frames.
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However, the Depositary's ability to perform properly its services is
also dependent upon other parties, including the issuers and their agents.
These parties also include, but are not limited to, third party vendors from
whom the Depositary licenses software and hardware, and third party vendors on
whom the Depositary relies for information or the provision of services, such
as telecommunication and electrical utility servicer providers. The Depositary
has informed the financial community that it is contacting, and will continue
to contact, third party vendors from whom the Depositary acquires services to
impress upon them the importance of such services being Year 2000 compliant,
and to determine the extent of their efforts for Year 2000 remediation and
testing of their services. In addition, the Depositary is in the process of
developing such contingency plans as it deems appropriate.
According to the Depositary, the preceding paragraphs have been provided
for informational purposes only and are not intended to serve as a
representation, warranty, or contract modification of any kind.
DESCRIPTION OF ASSUMED SENIOR DEBT SECURITIES
The following descriptions of the terms of the particular series of senior
debt securities are only summaries. These descriptions are not complete and are
qualified in their entirety by reference to the applicable indentures and the
applicable series of senior debt securities.
<TABLE>
<CAPTION>
Securities Issue Dates Interest Payment Dates Regular Record Dates
- --------------------------------- ------------------- --------------------------- ------------------------
<S> <C> <C> <C>
6 5/8% Notes of Meridian Bancorp,
Inc. due June 15, 2000 ......... June 12, 1995 June 15 and December 15 June 1 and December 1
6.186% Medium-Term Notes of
CoreStates Capital Corp. due
October 2, 2000 ................ October 6, 1997 April 15 and October 15 April 1 and October 1
5.75% Medium-Term Notes of
CoreStates Capital Corp. due
January 15, 2001 ............... January 12, 1996 January 15 and July 15 January 1 and July 1
5.625% Medium-Term Notes of
CoreStates Capital Corp. due
February 12, 2001 .............. February 12, 1996 February 12 and August 12 February 1 and August 1
</TABLE>
Meridian 6 5/8% Senior Notes
CoreStates Financial Corp acquired Meridian Bancorp, Inc. on April 9,
1996. First Union acquired CoreStates on April 28, 1998. By operation of law,
First Union is the successor to the assets and liabilities of Meridian,
including the obligations of Meridian with regard to the Meridian debt
securities.
The Meridian 6 5/8% Notes due June 15, 2000, were issued on June 12,
1995 and will mature June 15, 2000. The Meridian 6 5/8% Senior Notes were
issued under a senior indenture dated March 9, 1992, between Meridian and The
First National Bank of Chicago, as senior trustee. The Meridian 6 5/8% Senior
Notes are limited to $150 million aggregate principal amount.
The Meridian 6 5/8% Senior Notes bear interest at the rate of 6 5/8% per
year, payable semiannually on June 15 and December 15 each year to the
registered holders at the close of business on the preceding June 1 or December
1, whether or not such day is a business day.
Meridian Indentures
The following description of the terms of the Meridian indentures
applies to the Meridian senior indenture and, except as expressly limited to
the Meridian senior indenture, also applies to the Meridian subordinated
indenture.
Satisfaction, Discharge and Defeasance. With respect to Meridian debt
securities of any series, First Union at its option either:
o will be deemed to have paid and discharged the entire indebtedness
represented by its obligations under the applicable Meridian debt
securities ("legal defeasance"), or
o will no longer be under any obligation to comply with the terms,
provisions or conditions of the applicable indenture or the
applicable Meridian debt securities ("covenant defeasance"),
in either case on the 91st day after:
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o First Union pays all other sums payable with respect to the applicable
Meridian debt securities and delivers to the applicable trustee an
officer's certificate and an opinion of counsel, each stating that
all conditions relating to satisfaction and discharge have been
complied with;
o First Union deposits irrevocably with the applicable trustee as a
trust fund for the benefit of the holders of the applicable Meridian
debt securities, dollars and/or obligations of, or obligations
guaranteed by, the United States of America in an amount sufficient
to pay and discharge each installment of principal of and any
interest on the applicable Meridian debt securities on the dates the
installments of interest or principal are due; and
o no Event of Default or event which, with notice or the lapse of time
or both, would become an Event of Default, under the applicable
indenture has occurred and is continuing on the date of the deposit.
In order to exercise a legal defeasance or covenant defeasance
option, First Union must deliver to the applicable trustee an opinion
of counsel stating that the deposit and defeasance would not cause
the holders of the applicable Meridian debt securities to recognize
income, gain or loss for United States Federal income tax purposes
and that the holders will be subject to United States Federal income
tax in the same amounts, manner and times as would have been the case
if the deposit and defeasance had not occurred. After a legal
defeasance, First Union will remain subject to some obligations under
the applicable indenture, including the obligations to register the
transfer or exchange of Meridian debt securities, to replace
temporary or mutilated, destroyed, lost or stolen Meridian debt
securities, to maintain an office or agency in respect of the
Meridian debt securities and to hold moneys for payment in trust.
(Section 403).
Events of Default; Acceleration; Waiver. The following events are
"Events of Default" under the Meridian indentures with respect to Meridian debt
securities of any series:
o default for 30 days in the payment of any interest on any Meridian debt
security of that series when it becomes due and payable;
o default in the payment of the principal of any Meridian debt security of that
series at its maturity;
o default for 60 days after written notice in the performance, or breach, of
any covenant or warranty of First Union, other than a covenant or warranty
included in the applicable indenture solely for the benefit of a different
series; or
o events of bankruptcy, insolvency or reorganization of First Union.
(Section 501). An Event of Default under one series of Meridian debt securities
will not necessarily be an Event of Default under any other series.
If an Event of Default occurs and is continuing with respect to the
outstanding Meridian 6 5/8% Senior Notes, then either the Meridian Senior
Trustee or the holders of at least 25 percent in principal amount of the
outstanding Meridian 6 5/8% Senior Notes may declare the principal amount of
all the Meridian 6 5/8% Senior Notes to be due and payable immediately.
(Meridian senior indenture Section 502).
At any time after a declaration of acceleration has been made and before
a judgment or decree is obtained, the holders of a majority in principal amount
of the applicable Meridian debt securities may, by written notice to First
Union and the applicable trustee, rescind and annul the declaration and its
consequences if (1) First Union has paid to or deposited with the applicable
trustee a sum sufficient to pay
o all overdue interest on all the applicable Meridian debt securities,
o the principal of any Meridian debt securities of that series that has
become due other than by the declaration of acceleration, and
interest at the prescribed rates,
o to the extent that payment of this interest is lawful, interest on
overdue interest at the prescribed rates, and
o all sums paid or advanced by the applicable trustee and the reasonable
compensation,
8
<PAGE>
expenses, disbursements and advances of the applicable trustee, its
agents and counsel;
and (2) all Events of Default with respect to Meridian debt securities of that
series, other than the nonpayment of the principal of Meridian debt securities
of that series which has become due solely by the declaration of acceleration,
have been cured or waived. No rescission, annullment or waiver will affect any
subsequent default or impair any rights resulting from any subsequent default.
(Section 502).
No holder of any Meridian debt securities has the right to institute any
proceeding with respect to the applicable indenture, or for the appointment of
a receiver or trustee, or for any other remedy, unless:
o the holder gives written notice to the applicable trustee of a
continuing Event of Default with respect to the Meridian debt
securities of the applicable series;
o the holders of at least 25 percent in principal amount of the Meridian
debt securities of the applicable series make written request to the
applicable trustee to institute proceedings in its own name as
trustee;
o the holder or holders offer the applicable trustee reasonable
indemnity against costs, expenses and liabilities;
o the applicable trustee fails to institute any proceeding for 60 days
after receipt of notice, request and offer of indemnity; and
o no direction inconsistent with the written request is given to the
applicable trustee during the 60-day period by the holders of a
majority in principal amount of the Meridian debt securities of the
applicable series.
(Section 506).
In addition, the holders of a majority in principal amount of the
Meridian debt securities of any series may on behalf of all holders of that
series waive any past default and its consequences, except a default in the
payment of principal or interest on any Meridian debt securities of that
series, or in respect of a covenant or provision which cannot be modified or
amended without the consent of the holder of each outstanding Meridian debt
security of the series affected. (Section 511).
Modification of the Meridian Indentures. Without the consent of any
holders, First Union and the applicable trustee may enter into supplemental
indentures for purposes of, among other things:
o providing for the succession of another person to First Union and the
assumption by the successor of the covenants of First Union;
o adding to First Union's covenants or surrendering any of First Union's
rights or powers;
o adding any additional events of default;
o adding to or changing any of the provisions of the applicable
indenture in order to permit or facilitate the issuance of Meridian
debt securities in bearer form, or to provide for uncertificated
Meridian debt securities;
o changing or eliminating any of the provisions of the applicable
indenture, as long as the change or elimination becomes effective
only when there are no Meridian debt securities outstanding that are
entitled to the benefit of such provision;
o securing any of the Meridian debt securities;
o establishing the form or terms of any Meridian debt securities;
o providing for a successor trustee with respect to the Meridian debt
securities of one or more series and adding or changing any of the
provisions of the applicable indenture in order to provide for or
facilitate the administration of the trusts by more than one trustee;
or
o curing any ambiguity, correcting or supplementing any provision which
may be inconsistent with any other provision, or making any other
provisions with respect to matters or questions arising under the
applicable indenture, as long as such action does not adversely
affect the interests of the holders of Meridian debt securities of
any series issued under that indenture in any material respect.
(Section 801).
With the consent of the holders of a majority in principal amount of the
Meridian debt securities of the affected series, First Union and the applicable
trustee may enter into supplemental indentures to add any provisions to or
change or eliminate any of the provisions of the applicable indenture or to
modify in any manner the rights of the holders of the Meridian debt securities.
However, without the consent of the holder of each Meridian debt security
affected, no supplemental indenture may, among other things:
9
<PAGE>
o change the maturity of the principal of, or any installment of
principal of or interest on, any Meridian debt security, or reduce
the principal amount, the rate of interest on, or any premium payable
upon redemption of, any Meridian debt security, or change the coin or
currency of payment, or impair the right to institute suit for the
enforcement of any payment on or after the maturity date;
o reduce the percentage in principal amount of the Meridian debt
securities of any series, the consent of whose holders is required
for any supplemental indenture or for any waiver;
o change any obligation of First Union to maintain an office or agency
in the places and for the purposes specified in the applicable
indenture; or
o with some exceptions, modify any of these requirements.
(Section 802).
Control by Holders. The holders of a majority in principal amount of the
Meridian debt securities of any series have the right to direct the time,
method and place of conducting any proceeding or power conferred on the
applicable trustee with respect to the Meridian debt securities of that series,
as long as any direction is not in conflict with any rule of law or the
applicable indenture. Each Meridian trustee may take any other action deemed
proper by such trustee which is not inconsistent with the direction. (Section
510).
Reports by First Union. Within 120 days after the end of each fiscal
year, First Union must deliver to the trustees a certificate as to First
Union's compliance with all conditions and covenants under the applicable
indenture. Within ten business days of First Union's becoming aware of any
default or event of default, First Union must deliver to the trustees written
notice of the occurrence of the default or event of default, unless it has been
cured within the ten-day period. (Section 907).
Consolidation, Merger or Sale. First Union may not merge or consolidate
with any other person or sell, lease, transfer or otherwise dispose of all or
substantially all of its assets to any person, unless
o either (a) First Union is the surviving or successor person, or (b)
the successor person is organized under the laws of the United
States, any state or the District of Columbia, and assumes all of the
obligations of First Union under the Meridian indentures and under
the Meridian debt securities, and
o after giving effect to the transaction, First Union or the successor
person is not in default under any of those obligations.
(Section 701).
Upon any transaction effected in accordance with the preceding
paragraph, the person formed by the consolidation or into which First Union is
merged or to which the conveyance, transfer or lease is made, will succeed to
and be substituted for, and may exercise every right and power of, First Union
under the applicable indenture. Thereafter, except in the case of a lease, the
predecessor will be relieved of all obligations and covenants under the
applicable indenture and Meridian debt securities and may be liquidated and
dissolved. (Section 702).
Limitation on Sale or Issuance of Capital Stock of a Principal
Subsidiary Bank. Subject to the provisions described under the caption
"Consolidation, Merger or Sale", above, First Union may not directly or
indirectly sell, assign, transfer or otherwise dispose of or permit the
issuance of capital stock of any Principal Subsidiary Bank (as defined below).
These restrictions do not apply to:
o any transfer or issuance of directors' qualifying shares, which are
shares required by law to be owned by a person in order for that
person to qualify to serve as a director;
o any transfer or issuance for at least fair market value if, after
giving effect to the transfer, First Union would own directly or
indirectly not less than 80 percent of each class of the capital
stock of the Principal Subsidiary Bank;
o any transfer or issuance made in compliance with an order of a court
or regulatory authority;
o any sale at any price by a Principal Subsidiary Bank of (a) additional
shares of its capital stock to its stockholders, (b) additional
securities convertible into shares of its capital stock to its
stockholders, or (c) additional options, warrants or rights to
purchase shares of its capital stock to its stockholders, as long as
before any such sale, First Union owns shares of the same class,
securities convertible into shares, or options, warrants or rights to
purchase shares, whichever the
10
<PAGE>
case may be, of capital stock, and immediately after the sale, First
Union owns at least as great a percentage of the shares, convertible
securities, or options, warrants or rights, whichever the case may
be, as it owned before the sale;
o any issuance of shares of capital stock, or securities convertible
into, or options, warrants or rights to purchase, shares of capital
stock, of a Principal Subsidiary Bank or any subsidiary which owns
shares of capital stock, or securities convertible into, or options,
warrants or rights to acquire capital stock of any Principal
Subsidiary Bank to First Union or another wholly owned subsidiary; or
o any merger or consolidation of a Principal Subsidiary Bank or sale of
substantially all of the assets of a Principal Subsidiary Bank to any
other bank subsidiary of First Union, 80 percent of each class of the
capital stock of which is owned directly or indirectly by First
Union.
(Section 905).
"Principal Subsidiary Bank" is defined in the Meridian indentures as any
subsidiary bank the total assets of which, as set forth in the most recent
statement of condition of the subsidiary bank, equals more than 20 percent of
the total consolidated assets of First Union and its subsidiaries as determined
from the most recent consolidated balance sheet. As of the date of this
prospectus, the term Principal Subsidiary Bank includes First Union National
Bank.
CoreStates Senior Medium-Term Notes
First Union acquired CoreStates Financial Corp on April 28, 1998 through
a merger of CoreStates into First Union. On May 15, 1998, CoreStates Capital
Corp, a wholly-owned subsidiary, merged into First Union.
The CoreStates Senior MTN were issued pursuant to a medium-term notes
program established by CoreStates and CoreStates Capital. The CoreStates Senior
MTN were issued under a senior indenture, dated December 1, 1990, among
CoreStates, CoreStates Capital and The Bank of New York, as senior trustee and
successor to NationsBank of Georgia, N.A., successor to Wachovia Bank of
Georgia, N.A. (formerly the First National Bank of Atlanta, N.A.).
CoreStates 6.186% Senior MTN
The CoreStates 6.186% Senior Medium-Term Notes due October 2, 2000 were
issued on October 6, 1997 and will mature on October 2, 2000. The CoreStates
6.186% Senior MTN bear interest at the rate of 6.186% per year, payable
semiannually on April 15 and October 15 each year to the registered holders at
the close of business on the preceding April 1 or October 1. The CoreStates
6.186% Senior MTN are limited to $35 million aggregate principal amount.
CoreStates 5.75% Senior MTN
The CoreStates 5.75% Senior Medium-Term Notes due January 15, 2001 were
issued on January 12, 1996 and will mature on January 15, 2001. The CoreStates
5.75% Senior MTN bear interest at the rate of 5.75% per year, payable
semiannually on January 15 and July 15 each year to the registered holders at
the close of business on the preceding January 1 or July 1. The CoreStates
5.75% Senior MTN are limited to $49 million aggregate principal amount.
CoreStates 5.625% Senior MTN
The CoreStates 5.625% Senior Medium-Term Notes due February 12, 2001
were issued on February 12, 1996 and will mature on February 12, 2001. The
CoreStates 5.625% Senior MTN bear interest at the rate of 5.625% per year,
payable semiannually on February 12 and August 12 each year to the registered
holders at the close of business on the preceding February 1 or August 1. The
CoreStates 5.625% Senior MTN are limited to $35 million aggregate principal
amount.
CoreStates Indentures
The following description of the terms of the CoreStates indentures
applies to the CoreStates senior indenture and, except as expressly limited to
the CoreStates senior indenture, also applies to the CoreStates subordinated
indenture.
11
<PAGE>
Satisfaction and Discharge. Upon the direction of First Union, the
applicable indenture will no longer be of any effect, except as to the
surviving rights described below, when:
o either (a) all debt securities issued under that indenture are
delivered to the applicable trustee for cancellation, or money is
deposited in trust or segregated and held in trust by First Union, as
provided in the applicable indenture, or (b) all debt securities
issued under that indenture that have not been delivered to the
applicable trustee for cancellation become due and payable, will
become due and payable at their maturity within one year, or if
redeemable at the option of First Union, will be called for
redemption within one year, and in each case under (b), First Union
has deposits with the applicable trustee as trust funds in trust for
such purpose, money or obligations of, or obligations guaranteed by,
the United States of America, in an amount sufficient to pay and
discharge the entire indebtedness on the debt securities;
o First Union pays all other sums payable by it under the applicable
indenture; and
o First Union delivers to the applicable trustee an officers'
certificate and an opinion of counsel, each stating that all
conditions relating to satisfaction and discharge have been complied
with.
The applicable trustee will execute proper instruments acknowledging
satisfaction and discharge of the applicable indenture. (Section 501).
First Union will be deemed to have paid and discharged the entire
indebtedness on all CoreStates debt securities of any series issued under the
CoreStates indentures when:
o First Union deposits with the applicable trustee, as trust funds in
trust for that purpose, money or obligations of, or obligations
guaranteed by, the United States of America in an amount sufficient
to pay and discharge the entire indebtedness on all CoreStates debt
securities of that series;
o First Union pays all other sums payable with respect to all CoreStates
debt securities of that series;
o First Union delivers to the applicable trustee a certificate signed by
a nationally recognized firm of independent public accountants
certifying as to the sufficiency of the amounts deposited and an
officers' certificate and an opinion of counsel, each stating that
all conditions relating to satisfaction and discharge have been
complied with; and
o First Union delivers to the applicable trustee (a) an opinion of
independent counsel that the holders of the CoreStates debt
securities of that series will have no federal income tax
consequences as a result of the deposit and termination, and (b) if
the CoreStates debt securities of that series are listed on the New
York Stock Exchange, an opinion of counsel that the CoreStates debt
securities of that series will not be delisted as a result of the
exercise of this option.
The applicable trustee will execute proper instruments acknowledging
satisfaction and discharge of the indebtedness. (Section 503).
When these conditions are satisfied, the terms and conditions of the
applicable series of CoreStates debt securities will no longer be binding upon,
or applicable to, First Union, except for some provisions, such as registration
of transfer and exchange, the right of holders of the CoreStates debt
securities to receive payments from the trust fund described above, and the
rights, powers, duties and immunities of the applicable trustee. (Section 503).
Events of Default -- CoreStates Senior Indenture. The following are
"Events of Default" under the CoreStates Senior Indenture with respect to the
CoreStates Senior MTN of any series:
o failure to pay principal of or any premium on any CoreStates Senior
MTN of that series when due;
o failure to pay any interest or additional amounts on any CoreStates
Senior MTN of that series when due, and continuance of such default
for 30 days;
o failure to perform any other covenant of First Union in the CoreStates
senior indenture, continued for 60 days after written notice as
provided in the CoreStates senior indenture;
o acceleration of indebtedness in principal amount greater than $5
million for money borrowed by First Union or any Major Constituent
Bank (as defined below), if the acceleration is not annulled, or the
indebtedness is not discharged, within 30 days after written notice
as provided in the CoreStates senior indenture; and
12
<PAGE>
o events in bankruptcy, insolvency or reorganization of First Union or
any Major Constituent Bank.
(Section 601).
Acceleration of Maturity. If any Event of Default with respect to
CoreStates debt securities of any series occurs and is continuing, then the
applicable trustee or the holders of at least 25 percent in principal amount of
the CoreStates debt securities of that series may, by a notice in writing to
First Union (and to the applicable trustee, if given by holders), declare the
principal amount of all CoreStates debt securities of that series to be due and
payable immediately. However, at any time after a declaration of acceleration
is made but before a judgment or decree based on the acceleration is obtained,
the holders of a majority in principal amount of CoreStates debt securities of
that series may, in some circumstances, rescind and annul the acceleration if
all Events of Default with respect to that series (except, in the case of
CoreStates Senior MTN, the non-payment or acceleration of principal) have been
cured or waived. No rescission will affect any subsequent default or impair any
rights resulting from any subsequent default. (Section 602).
Modification and Waiver. Modifications and amendments to each CoreStates
indenture may be made by First Union and the applicable trustee with the
consent of the holders of at least 66 2/3 percent in principal amount of the
CoreStates debt securities of each series affected. However, no modification or
amendment may, without the consent of the holder of each CoreStates debt
security affected:
o change the stated maturity date of the principal of, or any
installment of principal of or interest on, any CoreStates debt
security;
o reduce the principal amount of, or any premium or interest on, or any
additional amounts in respect of, any CoreStates debt security;
o change the place or currency of payment of principal of, or any
premium or interest on, any CoreStates debt security;
o impair the right to institute suit for the enforcement of any payment
on or with respect to any CoreStates debt security;
o reduce the percentage of CoreStates debt securities, the consent of
the holders of which is required to modify or amend the applicable
indenture;
o reduce the percentage of CoreStates debt securities, the consent of
the holders of which is required for waiver of compliance or of
defaults; or
o with a few exceptions, modify any provision of the applicable
indentures relating to modification and amendment of the indenture or
waiver of compliance and defaults thereunder.
(Section 1002).
The holders of a majority in principal amount of the CoreStates debt
securities of any series may, on behalf of all holders of that series, waive
compliance by First Union with some of the restrictive provisions of the
applicable indenture. (Section 1110). The holders of a majority in principal
amount of the CoreStates debt securities of any series may, on behalf of all
the holders of that series, waive any past default under the applicable
indenture, except a default in the payment of the principal of, or any premium
or interest on, any CoreStates debt security of that series or in respect of a
provision which cannot be modified or amended without the consent of the holder
of each CoreStates debt security of that series affected. (Section 613).
Modification and amendment of each CoreStates indenture may be made by
First Union and the applicable trustee without the consent of any holder of
CoreStates debt securities for any of the following purposes:
o to provide for the succession of another corporation to First Union;
o to add to the covenants of First Union for the benefit of the holders
of all or any series of CoreStates debt securities;
o to add events of default;
o to add or change any provisions of the applicable indenture to
facilitate the issuance of bearer securities;
o to add to, delete from or revise the conditions, limitations and
restrictions on the authorized amount, terms or purposes of issue,
authentication and delivery of CoreStates debt securities issued
under that indenture;
o to establish the form or terms of applicable CoreStates debt
securities of any series and any related coupons;
13
<PAGE>
o to provide for the acceptance of appointment by a successor trustee
for the applicable indenture;
o to cure any ambiguity, defect or inconsistency in the applicable
indenture, as long as the action does not adversely affect the
interests of holders of CoreStates debt securities of any series or
any related coupons in any material respect;
o to modify, eliminate or add to the provisions of the applicable
indenture to the extent necessary to qualify under the Trust
Indenture Act of 1939, as amended; or
o to effect the assumption by First Union of the obligations under the
applicable indenture.
(Section 1001).
Consents of holders for modifications and amendments to the applicable
indenture must be solicited by First Union, and waivers by holders of
compliance with provisions under the applicable indenture must be obtained in
accordance with the terms of the applicable indenture. (Section 104). Any
modifications, amendments or waivers will be binding upon all future holders of
the applicable CoreStates debt securities. If consents are properly obtained
and all requirements for any changes, amendments or waivers are otherwise
satisfied, there are no provisions in the CoreStates indentures which allow
remedies to holders who do not consent to changes or amendments to, or waivers
of past defaults.
Control by Holders. Subject to their duty during a default to act with
the required standard of care, the trustees will be under no obligation to
exercise any of their rights or powers under the applicable indenture at the
request or direction of any of the holders of any series of CoreStates debt
securities unless such holders offer the applicable trustee reasonable
indemnity. (Section 701). Subject to these indemnification provisons, the
holders of a majority in principal amount of the CoreStates debt securities of
any series have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the the applicable trustee, or
exercising any trust or power conferred on the applicable trustee, with respect
to the CoreStates debt securities of that series, as long as any direction is
not in conflict with any rule of law or with the applicable indenture, and the
direction is not prejudicial to the rights of other holders of that series. The
applicable trustee may take any other action deemed proper by it which is not
inconsistent with such directions. (Section 612).
Reports by First Union. First Union is required to furnish annually to
each CoreStates trustee a statement as to performance or fulfillment of its
obligations under the applicable indenture and as to any default in such
performance or fulfillment. (Sections 1105 and 1106).
Consolidation, Merger or Sale. First Union may consolidate with, merge
into, or transfer substantially all of its properties to, any other corporation
as long as the successor corporation assumes all obligations of First Union
under the CoreStates debt securities and a few other conditions are met.
(Sections 901, 902, 903 and 904).
Restrictive Covenants. The CoreStates senior indenture contains a
covenant that limits First Union's ability to dispose of the voting stock of
any Major Constituent Bank. With a few exceptions, as long as any of the
CoreStates Senior MTN are outstanding, First Union:
o may not, nor may it permit any subsidiary to, sell, assign, transfer
or otherwise dispose of any shares of, or securities convertible
into, or options, warrants or rights to subscribe for or purchase
shares of, voting stock of the Major Constituent Bank, nor may First
Union permit the Major Constituent Bank to issue any shares of, or
securities convertible into, or options, warrants or rights to
subscribe for or purchase shares of, voting stock of the Major
Constituent Bank, unless First Union owns, directly or indirectly, at
least 80 percent of the issued and outstanding voting stock of such
Major Constituent Bank after giving effect to the transaction; and
o may not permit a Major Constituent Bank either (a) to merge or
consolidate with or into any coporation except First Union, unless at
least 80 percent of the surviving corporation's voting stock is, or
upon consummation of the merger or consolidation will be, owned,
directly or indirectly, by First Union and the assets of First Union
are at least equal to what they were before such transaction, or (b)
to lease, sell or transfer all or substantially all of its properties
or assets to any corporation or other person except First Union,
unless 80 percent of the voting stock of such corporation or other
person is
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<PAGE>
owned, or will be owned upon such lease, sale or transfer, directly
or indirectly, by First Union.
(Section 1107).
"Major Constituent Bank" is defined in the CoreStates senior indenture
as any banking subsidiary of First Union whose assets constitute 20 percent or
more of First Union's assets. As of the date of this prospectus, the term Major
Constituent Bank includes First Union National Bank.
No holder of any CoreStates debt securities of any series has the right
to institute any proceeding with respect to the applicable indenture for any
remedy unless:
o the holder gives to the applicable trustee written notice of a
continuing event of default;
o the holders of not less than 25 percent in principal amount of any
series of the CoreStates debt securities make a written request, and
offer reasonable indemnity, to the applicable trustee to institute a
proceeding as trustee;
o the applicable trustee does not receive from the holders of a majority
in principal amount of the CoreStates debt securities of that series
a direction inconsistent with the request; and
o the applicable trustee fails to institute any proceeding within 60
days after its receipt of the notice, request and offer of indemnity.
(Section 607). However, the holder of each CoreStates debt security has an
absolute and unconditional right to receive payment of the principal of, and
any premium and interest on, any CoreStates debt security on or after the due
dates expressed in such CoreStates debt security and to institute suit for the
enforcement of any such payment. (Section 608).
DESCRIPTION OF ASSUMED SUBORDINATED DEBT SECURITIES
The following descriptions of the terms of the particular series of
subordinated debt securities are only summaries. These descriptions are not
complete and are qualified in their entirety by reference to the applicable
indentures and the applicable series of subordinated debt securities.
<TABLE>
<CAPTION>
Series Issue Dates Interest Payment Dates Regular Record Dates
- ---------------------------------------------------- ------------------- --------------------------- ------------------------
<S> <C> <C> <C>
9 7/8% Subordinated Capital Notes of Florida
National Banks of Florida, Inc. due
May 15, 1999 ..................................... May 18, 1987 May 15 and November 15 May 1 and November 1
9 5/8% Subordinated Notes of Signet Banking
Corporation due June 1, 1999 ..................... May 23, 1989 June 1 and December 1 May 15 and November 15
9 5/8% Subordinated Notes of CoreStates Capital
Corp. due February 15, 2001 ...................... February 21, 1991 February 15 and August 15 February 1 and August 1
9 3/8% Subordinated Notes of CoreStates Capital
Corp. due April 15, 2003 ......................... April 29, 1991 April 15 and October 15 April 1 and October 1
6 5/8% Subordinated Notes of CoreStates Capital
Corp. due March 15, 2005 ......................... March 18, 1993 March 15 and September 15 March 1 and September 1
5 7/8% Subordinated Notes of CoreStates Capital
Corp. due October 15, 2003 ....................... October 19, 1993 April 15 and October 15 April 1 and October 1
6.75% Subordinated Medium-Term Notes of
CoreStates Capital Corp. due November 15, 2006 November 14, 1996 May 15 and November 15 May 1 and November 1
9 5/8% Subordinated Notes of First Fidelity
Bancorporation due August 15, 1999 ............... August 22, 1989 February 15 and August 15 February 1 and August 1
6.80% Subordinated Notes of First Fidelity
Bancorporation due June 15, 2003 ................. June 14, 1993 June 15 and December 15 June 1 and December 1
9 5/8% Subordinated Capital Notes of Dominion
Bankshares Corporation due June 15, 1999 ......... June 24, 1987 June 15 and December 15 June 1 and December 1
7 7/8% Subordinated Debentures of Meridian
Bancorp, Inc. due July 15, 2002 .................. July 22, 1992 January 15 and July 15 January 1 and July 1
</TABLE>
Florida National Subordinated Capital Notes
First Union acquired Florida National Banks of Florida, Inc. on January
29, 1990 by merging Florida National into a wholly-owned subsidiary of First
Union. On June 23, 1995, this subsidiary merged into First Union.
The Florida National 9 7/8% Subordinated Capital Notes Due 1999 were
issued on May 18, 1987
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<PAGE>
and will mature on May 15, 1999. The Florida National Subordinated Capital
Notes were issued under a subordinated indenture dated May 1, 1987, between
Florida National and The First National Bank of Chicago, as trustee.
The Florida National Subordinated Capital Notes bear interest at the
rate of 9 7/8% per year, payable semiannually on May 15 and November 15 each
year to the registered holders at the close of business on the preceding May 1
or November 1. The Florida National Subordinated Capital Notes are limited to
$75 million aggregate principal amount.
The Florida National Subordinated Capital Notes have been issued in
fully registered form only, without coupons. Principal of and interest on the
Florida National Subordinated Capital Notes is payable, and the transfer of the
Florida National Subordinated Capital Notes is registrable, at an office or
agency of First Union maintained for such purpose in St. Petersburg, Florida
and in the Borough of Manhattan, The City of New York, and at any other office
or agency maintained by First Union for such purpose. However, at the option of
First Union, interest may be paid by mailing a check to the address of the
holder as it appears on the register
Florida National Subordinated Indenture
Redemption Upon Certain Events Relating to Federal Income Taxes. The
Florida National Subordinated Capital Notes may not be redeemed prior to
maturity, except under the following circumstances. The Florida National
Subordinated Capital Notes may be redeemed at any time if First Union
determines that it is not, or there is a substantial probability that it will
not be, allowed to deduct payments of interest to holders because of:
o any change in or amendment to, or officially proposed change in or
amendment to, the laws of the United States, or any regulations or
rulings, or any change or officially proposed change in operation, or
official interpretation of the laws, rulings, or regulations;
o any action taken by a taxing authority of the United States which is
generally applied or which is taken with respect to First Union;
o a decision rendered by a court of competent jurisdiction in the United
States, whether or not such decision was rendered with respect to
First Union; or
o a technical advice memorandum or ruling issued by the United States
Internal Revenue Service on substantially the same facts as those
affecting First Union.
Any redemption of the Florida National Subordinated Capital Notes must be made
in whole and not in part. The redemption price must be an amount in cash equal
to the entire principal amount, together with accrued interest to the
redemption date. Not less than 30 days' prior notice must be given. Before the
mailing of any notice of redemption, First Union must deliver to the trustee an
opinion of independent counsel stating that the conditions to the right to
redeem have occurred.
Events of Default and Limited Rights of Acceleration. The indenture
defines an "Event of Default" as being events involving the bankruptcy,
insolvency or reorganization of First Union. (Section 501). If an Event of
Default occurs and is continuing, either the trustee or the holders of at least
25 percent in principal amount of the Florida National Subordinated Capital
Notes may declare the principal amount of all the Florida National Subordinated
Capital Notes to be due and payable immediately. (Section 502). Enforcement of
this provision is subject to the broad equity powers of a Federal bankruptcy
court and to the determination by that court of the nature of the rights of the
holders of the Florida National Subordinated Capital Notes. At any time after a
declaration of acceleration is made but before a judgment or decree based on
the acceleration is obtained, the holders of a majority in principal amount of
Florida National Subordinated Capital Notes may, in some circumstances, rescind
and annul the acceleration. No rescission or annulment will affect any
subsequent default or impair any rights resulting from any subsequent default.
(Section 502).
There is no right of acceleration of the payment of principal of the
Florida National Subordinated Capital Notes upon a default in the payment of
principal or interest or in the performance of any covenant or agreement. In
the event of a default in the payment of principal or interest or the
performance of any covenant or agreement, the trustee may, subject to a few
limitations and conditions, seek to enforce payment of principal or interest or
the performance of the applicable covenant or agreement. (Section 503).
Modification and Waiver. Modifications and amendments of the indenture
may be made by First Union and the trustee with the consent of the holders of
66 2/3 percent in principal amount of the
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Florida National Subordinated Capital Notes. However, no modification or
amendment may, without the consent of all the holders of the Florida National
Subordinated Capital Notes affected:
o change the stated maturity date of the principal of, or any
installment of principal or interest on, any Florida National
Subordinated Capital Note;
o reduce the principal amount of, or interest on, any Florida National
Subordinated Capital Note;
o change the place or currency of payment of principal of or interest on
any Florida National Subordinated Capital Note;
o impair the right to institute suit for the enforcement of any payment
on or with respect to any Florida National Subordinated Capital Note;
o reduce the percentage in principal amount of Florida National
Subordinated Capital Notes, the consent of whose holders is required
for modification or amendment of the indenture or for waiver of
compliance with its provisions or for waiver of defaults.
(Section 902).
The holders of 66 2/3 percent in principal amount of the Florida
National Subordinated Capital Notes may, on behalf of all the holders, waive
compliance by First Union with some of the restrictive provisions of the
indenture. (Section 1010). The holders of a majority in principal amount of the
Florida National Subordinated Capital Notes may, on behalf of all the holders,
waive any past default under the indenture except a default in the payment of
principal or interest. (Section 513).
Consolidation, Merger, and Sale of Assets. Without the consent of any
holders of the Florida National Subordinated Capital Notes, First Union may
consolidate with or merge into, or transfer its assets substantially as an
entirety to, any corporation organized under the laws of any domestic
jurisdiction, as long as, among other things, the successor corporation assumes
First Union's obligations on the Florida National Subordinated Capital Notes
and under the indenture, and, after giving effect to the transaction, no Event
of Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, has occurred and is continuing. (Section 801).
Restrictions on Disposition of Bank Stock. First Union, and its
wholly-owned subsidiaries will at all times own at least 80 percent of the
issued and outstanding Voting Stock (as defined in the indenture) of First
Union National Bank free and clear of any liens, security interests or other
encumbrances. For this purpose, a wholly-owned subsidiary of First Union is
defined as a subsidiary all of the outstanding Voting Stock of which is owned
directly or indirectly by First Union. In addition, First Union will not sell,
assign, transfer, grant a security interest in or otherwise dispose of any
shares of Voting Stock of First Union National Bank, except for fair market
value as determined by First Union's Board of Directors, nor will it permit
First Union National Bank or any other subsidiary to do so. (Section 1007).
Liens on Certain Capital Stock. Except as described in the previous
paragraph, First Union may not create, assume, incur or suffer to exist any
mortgage, pledge, encumbrance or lien or charge of any kind upon the capital
stock of First Union National Bank (other than directors' qualifying shares) or
the capital stock of a subsidiary which owns directly or indirectly capital
stock of First Union National Bank, except liens for taxes not due or which are
being contested in good faith by appropriate proceedings or the lien of any
judgment which has not remained undischarged or unstayed for more than 60 days.
(Section 1008).
Control by Holders. Subject to its duty during default to act with the
required standard of care, the trustee will be under no obligation to exercise
any of its rights or powers under the indenture at the request or direction of
any of the holders unless the holders offer the trustee reasonable indemnity.
(Section 603). Subject to this indemnification provision, the holders of a
majority in principal amount of the Florida National Subordinated Capital Notes
have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the trustee or exercising any trust or
power conferred on the trustee, as long as the action is not in conflict with
any rule of law or with the indenture. The Trustee may take any action deemed
proper by it which is not inconsistent with the direction. (Section 512).
Reports by First Union. First Union is required to furnish to the
trustee annually a statement as to the performance by First Union of its
obligations under the indenture and as to any default in such performance.
(Section 1009).
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Subordination. Upon any distribution of assets of First Union upon
dissolution, winding up, liquidation or reorganization, the payment of the
principal of and interest on the Florida National Subordinated Capital Notes is
to be subordinated in right of payment to the prior payment in full of all
Senior Indebtedness. In addition, no payment of principal or interest may be
made on the Florida National Subordinated Capital Notes or in respect of any
redemption, retirement, purchase or other acquisition of the Florida National
Subordinated Capital Notes at any time when there is a default in the payment
of principal of, or any premium or interest on, any Senior Indebtedness. Except
in these respects, the subordination provisions will not affect the obligation
of First Union to make payment of principal or interest on the Florida National
Subordinated Capital Notes. Subject to the payment in full of all Senior
Indebtedness, the holders of the Florida National Subordinated Capital Notes
are subrogated to the rights of the holders of the Senior Indebtedness to
receive payments or property. Subordination will not prevent the occurrence of
an Event of Default in respect of the Florida National Subordinated Capital
Notes. See "Events of Default and Limited Rights of Acceleration", above, for
limitations on the rights of acceleration.
"Senior Indebtedness" is defined in the indenture as the principal of,
and any premium and unpaid interest on, (1) indebtedness of or guaranteed by
First Union, other than the Florida National Subordinated Capital Notes,
whether previously outstanding or thereafter created, incurred, assumed or
guaranteed,
o for money borrowed, or
o in connection with the acquisition by First Union or a subsidiary,
other than in the ordinary course of business, of assets of any kind,
unless in the instrument creating or evidencing the indebtedness or under which
the indebtedness is outstanding it is provided that the indebtedness is not
superior in right of payment to the Florida National Subordinated Capital
Notes, and (2) renewals, extensions, modifications and refunding of any such
indebtedness.
As of December 31, 1998, First Union had $6 billion aggregate principal
amount of indebtedness outstanding that qualified as Senior Indebtedness under
the indenture. First Union expects to issue additional indebtedness and to
incur other obligations that may constitute Senior Indebtedness under the
indenture.
Certain Federal Income Tax Consequences
The United States Internal Revenue Service has issued a Revenue Ruling
stating that "mandatory convertible debt" issued by a bank holding company
under the circumstances described in the Revenue Ruling is debt of the bank
holding company for Federal income tax purposes. The Florida National
Subordinated Capital Notes are substantially similar to the mandatory
convertible debt described in the Revenue Ruling, and therefore should
represent debt of First Union, with the result that interest payable on the
Florida National Subordinated Capital Notes should be taxable as interest,
rather than dividends, for Federal income tax purposes.
A holder's basis in a Florida National Subordinated Capital Note will
generally equal the amount paid for the Florida National Subordinated Capital
Note. Upon the sale, redemption, or retirement of a Florida National
Subordinated Capital Note, gain or loss will be recognized for Federal income
tax purposes equal to the difference between the amount realized on the sale,
redemption or retirement and the holder's tax basis in the Florida National
Subordinated Capital Note.
The tax effects of the purchase of Florida National Subordinated Capital
Notes under state and local tax laws may vary. In addition, the discussion of
Federal income tax consequences above is a summary of general information.
Therefore, purchasers are advised to consult their own tax advisors with
respect to federal, state and local income tax effects. Purchasers of Florida
National Subordinated Capital Notes who are non-resident alien individuals,
foreign corporations, or other non-United States persons should also consult
their own tax advisors with respect to the possible applicability of United
States withholding and other taxes upon income realized in respect of the
Florida National Subordinated Capital Notes.
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Signet 9 5/8% Subordinated Notes
First Union acquired Signet Banking Corporation on November 28, 1998, by
merging Signet into First Union.
The Signet 9 5/8% Subordinated Notes due June 1, 1999 were issued on May
23, 1989 and will mature June 1, 1999. The Signet Subordinated Notes were
issued under a subordinated indenture dated April 1, 1986, between Signet and
The Bank of New York, as trustee. The Signet 9 5/8% Subordinated Notes are
limited to $100 million aggregate principal amount.
The Signet 9 5/8% Subordinated Notes bear interest at the rate of 9 5/8%
per year, payable semiannually on June 1 and December 1 each year to the
registered holders at the close of business on the preceding May 15 or November
15. Interest on the Signet 9 5/8% Subordinated Notes will be computed on the
basis of the actual number of days for which interest is payable in the
applicable interest period divided by 360 and rounding the resultant figure to
the nearest cent.
The Signet 9 5/8% Subordinated Notes have been issued in fully
registered form in denominations of $1,000 and any integral multiples, and may
be transferred or exchanged without payment of any charge other than taxes or
other governmental charges. Principal of and interest on the Signet 9 5/8%
Subordinated Notes are payable, and the transfer of the Signet 9 5/8%
Subordinated Notes will be registrable, at the principal office of the trustee
in The City of New York, or at First Union National Bank in Richmond, Virginia.
However, interest may be paid at the option of First Union by check mailed to
the address of the holder as it appears in the register.
Signet Subordinated Indenture
Satisfaction and Discharge. At the request of First Union, the indenture
will no longer be of any effect, except as to some surviving rights, such as
registration of transfer or exchange, when:
o either all debt securities issued under the Signet subordinated
indenture are delivered to the trustee for cancellation or all
securities not delivered for cancellation have, or will within one
year, become due and payable or will be called for redemption within
one year, and First Union deposits with the trustee funds in an
amount sufficient to pay and discharge the entire indebtedness on all
applicable debt securities not delivered to the trustee for
cancellation, for principal and any premium, and interest to the date
of the deposit or to the maturity date or redemption date, as the
case may be;
o First Union pays all other sums payable by it under the indenture; and
o First Union delivers to the trustee an officers' certificate and an
opinion of counsel, each stating that all conditions for satisfaction
and discharge have been complied with.
(Section 301).
Events of Default. The indenture defines an "Event of Default" with
respect to the Signet 9 5/8% Subordinated Notes as:
o default for a period of 30 days in the payment of any installment of
interest on the Signet 9 5/8% Subordinated Notes;
o default in the payment of any principal of the Signet 9 5/8%
Subordinated Notes;
o default by First Union in the performance of covenants in the
indenture which shall not have been remedied for a period of 90 days
after written notice to First Union by the trustee or to First Union
and the trustee by the holders of at least 25 percent of the
principal amount of the Signet 9 5/8% Subordinated Notes then
outstanding; and
o events involving the bankruptcy, insolvency or reorganization of First
Union.
If a default in respect of the Signet 9 5/8% Subordinated Notes occurs and is
continuing, the trustee or the holders of not less than 25 percent in principal
amount of the Signet 9 5/8% Subordinated Notes may declare the principal amount
of all of the Signet 9 5/8% Subordinated Notes to be due and payable
immediately. At any time after a declaration of acceleration has been made but
before a judgment or decree for payment of money has been obtained, the holders
of a majority in principal amount of the Signet 9 5/8% Subordinated Notes may,
in some circumstances, rescind and annul such declaration. (Section 402).
Acceleration. If an Event of Default with respect to the Signet 9 5/8%
Subordinated Notes occurs and is continuing, the trustee or the holders of not
less than 25 percent in principal amount of the Signet 9 5/8% Subordinated
Notes may declare
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the principal amount of all the Signet 9 5/8% Subordinated Notes to be due and
payable immediately, by a notice in writing to First Union (and the trustee, if
given by holders). Upon any declaration of acceleration, the principal amount
will become due and payable. At any time after a declaration of acceleration
with respect to the Signet 9 5/8% Subordinated Notes is made and before a
judgment or decree for payment of the money due is obtained, the holders of a
majority in principal amount of the Signet 9 5/8% Subordinated Notes may, by
written notice to First Union and the trustee, rescind and annul the
declaration of acceleration and its consequences if:
o First Union pays or deposits with the trustee a sum sufficient to pay
all overdue interest on the Signet 9 5/8% Subordinated Notes, the
principal of the Signet 9 5/8% Subordinated Notes that has become due
other than by declaration of acceleration and interest, any legally
enforceable interest on overdue installments of interest, and all
expenses incurred by the trustee, its agents or counsel, and
o all Events of Default, other than the nonpayment of the principal of
Signet 9 5/8% Subordinated Notes that has become due solely by that
declaration of acceleration, are cured or waived.
No rescission or annullment will affect any subsequent default or impair any
rights resulting from any subsequent default. (Section 402).
Notice and Waiver. Within 90 days after the occurrence of a default in
respect of the Signet 9 5/8% Subordinated Notes, the trustee is required to
give to the holders of the Signet 9 5/8% Subordinated Notes notice of all
uncured and unwaived defaults known to it. However, except in the case of a
default in the payment of the principal of, or any premium or interest on, any
of the Signet 9 5/8% Subordinated Notes, the trustee may withhold this notice
if it in good faith determines that the withholding of notice is in the
interests of the holders of that series. Moreover, in the case of an Event of
Default not involving the bankruptcy, insolvency or reorganization of First
Union, notice may not be given until at least 30 days after the occurrence of
the event. For purposes of this paragraph, the term "default" means any event
which is, or after notice or lapse of time or both would become, a default with
respect to the Signet 9 5/8% Subordinated Notes. (Section 502).
The holders of a majority in principal amount of the Signet 9 5/8%
Subordinated Notes may, on behalf of all the holders, waive any past default
under the Signet subordinated indenture with respect to that series and its
consequences, except:
o a default in the payment of the principal of, or any premium or
interest on, the Signet 9 5/8% Subordinated Notes, or
o a default in respect of a covenant or provision of the indenture which
cannot be modified or amended without the consent of the holders of
all of the Signet 9 5/8% Subordinated Notes.
(Section 413).
Modification of the Signet Subordinated Indenture. With the consent of
the holders of at least two-thirds in principal amount of the Signet 9 5/8%
Subordinated Notes, First Union and the trustee may execute supplemental
indentures adding any provisions to or changing or eliminating any of the
provisions of the indenture or modifying the rights of the holders of the
Signet 9 5/8% Subordinated Notes. However, without the consent of the holders
of all of the Signet 9 5/8% Subordinated Notes, no supplemental indenture may,
among other things,
o change the stated maturity of the principal of, or any installment of
principal of or interest on, any of the Signet 9 5/8% Subordinated
Notes;
o reduce the principal amount or the rate of interest;
o change any place of payment where, or the coin or currency in which,
any of the Signet 9 5/8% Subordinated Notes or any premium or the
interest is payable;
o impair the right to institute suit for the enforcement of any payment
on or after the maturity of the payment;
o modify the provisions of the indenture with respect to subordination
in a manner adverse to the holders of the Signet 9 5/8% Subordinated
Notes;
o reduce the percentage in principal amount of the Signet 9 5/8%
Subordinated Notes the holders of which are required to consent to
any supplemental indenture or any waiver of compliance or of defaults;
o with a few exceptions, modify any of these requirements.
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(Section 802).
Without the consent of any holders, First Union and the trustee may
execute supplemental indentures:
o to provide for the succession of another corporation to First Union
and the assumption by the successor of the covenants of First Union;
o to add to the covenants of First Union or to surrender any right or
power conferred upon First Union;
o to cure any ambiguity, to correct or supplement any provision in the
indenture that is inconsistent with any other provision or to make
any other provisions with respect to matters or questions arising
under the indenture which are not inconsistent with the provisions of
the indenture, as long as this action does not adversely affect the
interests of the holders of the Signet 9 5/8% Subordinated Notes in
any material respect;
o to add to or change any of the provisions of the indenture to permit
or facilitate the issuance of subordinated debt securities in bearer
form or the transfer of subordinated debt securities by book-entry
procedures;
o to add to or change any provision of the indenture to permit the
issuance of subordinated debt securities convertible into other
securities of First Union; or
o to add any additional defaults or events of default.
(Section 801).
Control by Holders. The holders of a majority in principal amount of the
Signet 9 5/8% Subordinated Notes may direct the time, method and place of
conducting any proceeding for any remedy available to the trustee or exercising
any trust or power conferred on the trustee, as long as the direction is not in
conflict with any rule of law or with the indenture. The trustee may take any
other action deemed proper by it which is not inconsistent with such direction.
The trustee may decline to follow any direction with respect to the Signet
9 5/8% Subordinated Notes if it determines in good faith that the actions or
forbearances directed would be unduly prejudicial to the interests of the
holders of the Signet 9 5/8% Subordinated Notes not joining in the direction or
would involve the trustee in personal liability. (Section 412).
Reports by First Union. First Union must deliver to the trustee within
120 days after the end of each fiscal year a certificate stating that no
default has occurred under the indenture or specifying each default and the
nature and status of the default. (Section 904).
Limitation on Disposition of Stock or Assets. As long as the Signet
9 5/8% Subordinated Notes are outstanding, neither First Union nor any of its
subsidiaries may sell or otherwise dispose of any shares of capital stock or
any securities convertible into capital stock of a Principal Subsidiary Bank
(as defined below) or permit any Principal Subsidiary Bank to issue any shares
of its capital stock or any securities convertible into its capital stock. This
limitation does not apply to sales or other dispositions or issuances which:
o are to First Union or any of its subsidiaries;
o are for the purpose of qualifying a person to serve as a director of
such Principal Subsidiary Bank;
o are in connection with a merger, consolidation or share exchange if,
immediately after the merger, consolidation or share exchange, First
Union will have at least the same proportionate ownership in the
resulting or surviving entity which it had in such Principal
Subsidiary Bank immediately before such transaction;
o are made in compliance with an order of a court of regulatory
authority of competent jurisdiction;
o are for fair market value and, after giving effect to the disposition,
First Union will own, directly or indirectly, not less than 80
percent of the shares of each class of capital stock, and of each
class of securities convertible into capital stock, of such Principal
Subsidiary Bank; or
o are made in connection with, and are immediately followed by,
transactions in which First Union acquires not less than 80 percent
of the shares of each class of capital stock, and of each class of
securities convertible into capital stock, or the assets, of a bank,
bank holding company, savings bank, savings and loan association,
industrial bank or other similar entity, the total assets of which
are at least equal to the total assets of such Principal Subsidiary
Bank.
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(Section 908).
"Principal Subsidiary Bank" is defined in the indenture as any
subsidiary bank having total assets equal to more than 25 percent of the
consolidated total assets of First Union and its majority-owned subsidiaries.
As of the date of this prospectus, the term Principal Subsidiary Bank includes
First Union National Bank.
The Signet subordinated indenture provides that, as long as the Signet
9 5/8% Subordinated Notes remain outstanding, First Union may not permit any
Principal Subsidiary Bank to dispose of all or substantially all of its assets,
except that a Principal Subsidiary Bank may:
o dispose of assets in the ordinary course of business,
o dispose of assets no longer useful in the conduct of its business, or
o convey assets to another bank subsidiary.
(Section 908).
Other Restrictions. First Union may not consolidate with or merge into
any other corporation or convey or transfer all or substantially all of its
assets unless:
o the resulting or surviving corporation or the corporation that
acquires the assets, if other than First Union, is incorporated under
the laws of the United States, any state or the District of Columbia
and assumes First Union's obligations on the Signet 9 5/8%
Subordinated Notes and under the indenture; and
o immediately after giving effect to the transaction, no default or
event of default has occurred and is continuing under the indenture.
(Section 701).
Subordination. The obligations of First Union to make any payment on
account of principal of, or any premium or interest on, the Signet 9 5/8%
Subordinated Notes is subordinate and junior in right of payment to all Senior
Indebtedness (as defined below). (Section 1401). No payment of principal of, or
any premium or interest on, the Signet 9 5/8% Subordinated Notes may be made
and no holder of the Signet 9 5/8% Subordinated Notes will be entitled to
demand or receive any such payment unless all amounts then due for principal
of, or any premium and interest on, all Senior Indebtedness of First Union are
paid in full or duly provided for and, at the time of the payment or
immediately after giving it effect, there does not exist with respect to any
such Senior Indebtedness any event of default permitting the holders of the
Senior Indebtedness, or a trustee on their behalf, to accelerate the maturity
or any event that, with the giving of notice or the passage of time or both,
would become an event of default of this type. (Section 1402). Upon
o the occurrence of any event of default of this type with respect to
the Senior Indebtedness that has not been cured or waived, or
o any payment or distribution of the assets of First Union upon
dissolution, winding-up, liquidation, or reorganization, whether
voluntary or involuntary or in bankruptcy, insolvency, receivership,
conservatorship or other proceedings,
the holders of Senior Indebtedness will be entitled to receive payment in full
of all principal and any premium, sinking fund payments and interest before any
payment is made on the Signet 9 5/8% Subordinated Notes. (Section 1403). The
failure to make a payment on the Signet 9 5/8% Subordinated Notes by reason of
subordination will not prevent the occurrence of a default with respect to the
Signet 9 5/8% Subordinated Notes.
"Senior Indebtedness", as defined in the indenture, includes any
obligation of First Union to its creditors, whether previously outstanding or
subsequently incurred, except any obligation as to which, in the creating
instrument, it is provided that such obligation is not Senior Indebtedness.
As of December 31, 1998, First Union had $6 billion aggregate principal
amount of indebtedness outstanding that qualified as Senior Indebtedness under
the indenture. First Union expects to issue additional indebtedness and to
incur other obligations that may constitute Senior Indebtedness under the
indenture.
CoreStates Subordinated Debt Securities
First Union acquired CoreStates Financial Corp on April 28, 1998 through
a merger of CoreStates into First Union. On May 15, 1998, CoreStates Capital
Corp, a wholly-owned subsidiary, merged into First Union.
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The CoreStates Subordinated Notes were issued under a Subordinated
Indenture, dated December 1, 1990, between CoreStates, CoreStates Capital, and
Bank One, Columbus, N.A., as Subordinated Notes Trustee. The CoreStates 6.75%
Subordinated MTN were issued under the CoreStates Subordinated Indenture, as
supplemented on August 1, 1994, among CoreStates, CoreStates Capital, the
CoreStates Subordinated Notes Trustee and Citibank, N.A., as Subordinated MTN
Trustee.
The CoreStates 6.75% Subordinated MTN and the CoreStates 5 7/8%
Subordinated Notes are represented by Book-Entry Debt Securities. See "General
Information Regarding the Debt Securities -- Book-Entry Debt Securities" for a
description of this type of security.
The remainder of the CoreStates subordinated debt securities have been
issued in registered form only, without coupons. These CoreStates registered
debt securities are issued in denominations of $1,000 or any integral
multiples. No service charge will be made for any transfer or exchange of the
CoreStates registered debt securities but First Union may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection with the transfer or exchange. The principal of, and any premium and
interest on, the CoreStates registered debt securities will be payable, and
transfer of the CoreStates registered debt securities will be registrable, at
an office to be maintained by First Union in the City of Philadelphia and in
The City of New York. However, payments of interest may be made at the option
of First Union by check mailed to the address appearing in the security
register of the person in whose name the CoreStates registered debt security is
registered at the close of business on the record date for payment. (Sections
305 and 307).
CoreStates 9 5/8% Subordinated Notes
The CoreStates 9 5/8% Subordinated Notes due February 15, 2001 were
issued on February 21, 1991 and will mature on February 15, 2001. The
CoreStates 9 5/8% Subordinated Notes bear interest at the rate of 9 5/8% per
year, payable semiannually on February 15 and August 15 of each year to the
registered holders at the close of business on the preceding February 1 or
August 1. The CoreStates 9 5/8% Subordinated Notes are limited to $150 million
aggregate principal amount.
CoreStates 9 3/8% Subordinated Notes
The CoreStates 9 3/8% Subordinated Notes due April 15, 2003 were issued
on April 29, 1991 and will mature on April 15, 2003. The CoreStates 9 3/8%
Subordinated Notes bear interest at the rate of 9 3/8% per year, payable
semiannually on April 15 and October 15 of each year to the registered holders
at the close of business on the preceding April 1 or October 1. The CoreStates
9 3/8% Subordinated Notes are limited to $100 million aggregate principal
amount.
CoreStates 6 5/8% Subordinated Notes
The CoreStates 6 5/8% Subordinated Notes due March 15, 2005 were issued
on March 18, 1993 and will mature on March 15, 2005. The CoreStates 6 5/8%
Subordinated Notes bear interest at the rate of 6 5/8% per year, payable
semiannually on March 15 and September 15 of each year to the registered
holders at the close of business on the preceding March 1 or September 1. The
CoreStates 6 5/8% Subordinated Notes are limited to $175 million aggregate
principal amount.
CoreStates 5 7/8% Subordinated Notes
The CoreStates 5 7/8% Subordinated Notes due October 15, 2003 were
issued on October 19, 1993 and will mature on April 15, 2003. The CoreStates
5 7/8% Subordinated Notes bear interest at the rate of 5 7/8% per year, payable
semiannually on April 15 and October 15 of each year to the registered holders
at the close of business on the preceding April 1 or October 1. The CoreStates
5 7/8% Subordinated Notes are limited to $200 million aggregate principal
amount.
CoreStates 6.75% Subordinated Medium-Term Notes
The CoreStates 6.75% Subordinated Medium-Term Notes due November 15, 2006, were
issued under the CoreStates Subordinated Indenture under a medium-term note
program established by CoreStates and CoreStates Capital.
The CoreStates 6.75% Subordinated MTN were issued on November 14, 1996
and will mature November 15, 2006. The CoreStates 6.75% Subordinated MTN bear
interest at the rate of 6.75% per year, payable semiannually on May 15 and
November 15 each year to the registered holders at the close of business on the
preceding May 1 or November 1. The CoreStates 6.75% Subordinated MTN are
limited to $200 million aggregate principal amount.
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CoreStates Subordinated Indenture
Except as expressly limited to the CoreStates senior indenture, the
description of the CoreStates indentures included in "Summary of Assumed Senior
Debt Securities -- CoreStates Senior Medium-Term Notes; CoreStates Indentures",
above, applies to the CoreStates subordinated indenture as well. The following
is a description of some additional provisions of the CoreStates subordinated
indenture.
Events of Default. An "Event of Default" is defined under the CoreStates
subordinated indenture with respect to CoreStates subordinated debt securities
of any series as events of bankruptcy, insolvency or reorganization of First
Union or any Major Constituent Bank. (Section 601).
The CoreStates subordinated indenture does not provide for any right of
acceleration of the payment of the principal of a series of CoreStates
subordinated debt securities upon a default in the payment of principal or
interest or a default in the performance of any covenant or agreement. In the
event of a default in the payment of interest or principal, the holder of a
CoreStates subordinated debt security, or the applicable trustee on behalf of
the holders of all of the series affected, may, subject to some limitations and
conditions, seek to enforce payment of the interest or principal. (Sections 602
and 603).
Modification and Waiver. In addition to the circumstances described
under "Summary of Assumed Senior Debt Securities -- CoreStates Senior
Medium-Term Notes; CoreStates Indentures; Modification and Waiver", and subject
to those limitations. First Union and the subordinated trustee may not modify
or amend the CoreStates subordinated indenture to alter in any respect the
provisions regarding the subordination of the subordinated debt securities
without the consent of the holders of each CoreStates subordinated debt
security affected. (Section 1002).
Subordination. During the continuance beyond any applicable grace period
of any default with respect to Senior Indebtedness (as defined below), no
payment of principal of and interest on the CoreStates subordinated debt
securities may be made until payment in full of all principal of, and premium
and interest on, all Senior Indebtedness. In addition, upon any distribution of
assets of First Union upon dissolution, winding up, liquidation or
reorganization, the payment of the principal of and interest on the CoreStates
subordinated debt securities is to be subordinated in right of payment to the
prior payment in full of principal, premium and interest on all Senior
Indebtedness. (Article Sixteen).
For purposes of the preceding paragraph, the term "Senior Indebtedness"
means:
o with respect to the CoreStates 9 5/8% Subordinated Notes and the
CoreStates 9 3/8% Subordinated Notes, all indebtedness and other
obligations of First Union, whether previously outstanding or
subsequently incurred or created, except any indebtedness or
obligations which are expressly stated to be, or are identified in a
resolution of First Union's Board of Directors as, subordinated in
right of payment to, or to rank equally with, CoreStates subordinated
debt securities, and
o with respect to the CoreStates 6 5/8% Subordinated Notes, the
CoreStates 5 7/8% Subordinated Notes and the CoreStates 6.75%
Subordinated MTN, indebtedness of First Union for money borrowed,
including indebtedness secured by certain mortgages or other liens,
evidenced by notes or other written obligations, indebtedness of
First Union evidenced by notes, debentures, bonds or other securities
sold by First Union for money, indebtedness of others of a similar
type assumed or guaranteed by First Union through an agreement to
purchase, contingent or otherwise, and renewals, extensions or
refundings of any of those, unless the instrument creating or
evidencing the indebtedness or the assumption or guarantee of the
indebtedness expressly provides that indebtedness is not superior in
right of payment to the CoreStates subordinated debt securities.
(Section 1601).
As of December 31, 1998, First Union had $6 billion aggregate principal
amount of indebtedness outstanding that qualified as Senior Indebtedness under
the CoreStates subordinated indenture. First Union expects to issue additional
indebtedness and to incur other obligations that may constitute Senior
Indebtedness under the CoreStates subordinated indenture.
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First Fidelity Subordinated Notes
First Union acquired First Fidelity Bancorporation on January 1, 1996 by
merging First Fidelity into a wholly-owned subsidiary. On February 26, 1998,
this subsidiary merged into First Union.
The First Fidelity 9 5/8% Subordinated Notes were issued under a
subordinated indenture, dated April 1, 1988 between First Fidelity and The
Chase Manhattan Bank, N.A., as trustee. The First Fidelity 6.80% Subordinated
Notes were issued under the First Fidelity subordinated indenture, as amended
on June 14, 1993.
The First Fidelity subordinated debt securities have been issued in
registered form only, without coupons. Principal and interest on the First
Fidelity subordinated debt securities will be payable, and the First Fidelity
subordinated debt securities will be transferable, at the corporate trust
office maintained by the trustee in The City of New York. However, at the
option of First Union, interest may be paid by check mailed to the person
entitled to the interest.
First Fidelity 9 5/8% Subordinated Notes
The First Fidelity 9 5/8% Subordinated Notes due August 15, 1999 were
issued on August 22, 1989 and will mature on August 15, 1999. The First
Fidelity 9 5/8% Subordinated Notes bear interest at the rate of 9 5/8% per
year, payable semiannually on February 15 and August 15 of each year to the
registered holders at the close of business on the preceding February 1 or
August 1. The First Fidelity 9 5/8% Subordinated Notes are limited to $150
million aggregate principal amount.
All provisions of the indenture relating to defeasance, as described
under "Defeasance under the First Fidelity Subordinated Indenture", below,
apply to the First Fidelity 9 5/8% Subordinated Notes.
First Fidelity 6.80% Subordinated Notes
The First Fidelity 6.80% Subordinated Notes due June 15, 2003 were
issued on June 14, 1993 and will mature on June 15, 2003. The First Fidelity
6.80% Subordinated Notes bear interest at the rate of 6.80% per year, payable
semiannually on June 15 and December 15 of each year to the registered holders
at the close of business on the preceding June 1 or December 1. The First
Fidelity 6.80% Subordinated Notes are limited to $150 million aggregate
principal amount.
First Fidelity Subordinated Indenture
Satisfaction and Discharge. At the request of First Union, the indenture
will no longer be of any effect, except as to a few surviving rights, such as
registration of transfer or exchange, when:
o either all debt securities issued under the indenture have been
delivered to the trustee for cancellation or all securities not
delivered for cancellation have, or will within one year, become due
and payable or will be called for redemption within one year, and
First Union has deposited with the trustee funds in an amount
sufficient to pay and discharge the entire indebtedness on all the
debt securities not delivered to the trustee for cancellation, for
principal and any premium, and interest to the date of such deposit
or to the maturity date or redemption date, as the case may be;
o First Union has paid all other sums payable by it under the indenture;
and
o First Union has delivered to the trustee an officers' certificate and
an opinion of counsel, each stating that all conditions to
satisfaction and discharge have been complied with.
(Section 401).
Events of Default with respect to the First Fidelity 9 5/8% Subordinated
Notes. The indenture defines "Event of Default" with respect to the First
Fidelity 9 5/8% Subordinated Notes as any one of the following events:
o default for 30 days in any payment of interest on the First Fidelity
9 5/8% Subordinated Notes;
o default in the payment of principal on any First Fidelity 9 5/8%
Subordinated Notes;
o default in the performance or breach, for 90 days after appropriate
notice, of any other covenant or warranty in the indenture, other
than a covenant or warranty included solely for the benefit of
another series;
o default in the payment of principal on, or acceleration of, any
obligations for borrowed money of First Union, any subsidiary bank
holding company or any Major Subsidiary Bank (as defined below)
greater than $10 million in the aggregate if such obligations
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are not discharged or reduced to an aggregate amount of less than $10
million, or if the acceleration is not annulled or rescinded, within
ten days after written notice; or
o events of bankruptcy, insolvency or reorganization.
If an Event of Default occurs and is continuing with respect to the First
Fidelity 9 5/8% Subordinated Notes, the trustee or the holders of not less than
25 percent in principal amount of First Fidelity 9 5/8% Subordinated Notes may
declare the principal amount to be due and payable immediately. (Sections 501
and 502).
"Major Subsidiary Bank" is defined in the indenture as any subsidiary
bank having total assets equal to 25 percent or more of the consolidated assets
of First Union determined on the date of the most recent audited financial
statements. As of the date of this prospectus, the term Major Subsidiary Bank
includes First Union National Bank.
Events of Default with respect to the First Fidelity 6.80% Subordinated
Notes. The indenture defines an "Event of Default" with respect to the First
Fidelity 6.80% Subordinated Notes as events involving the bankruptcy,
insolvency or reorganization of First Union. (Section 501). If any Event of
Default occurs and is continuing, either the trustee or the holders of not less
than 25 percent in principal amount of the First Fidelity 6.80% Subordinated
Notes may declare the principal amount of all First Fidelity 6.80% Subordinated
Notes to be due and payable immediately. At any time after a declaration of
acceleration is made, but before a judgment or decree based on the acceleration
is obtained, holders of a majority in principal amount of the First Fidelity
6.80% Subordinated Notes may, in some circumstances, rescind and annul the
acceleration. (Section 502).
There is no right of acceleration of the payment of principal of the
First Fidelity 6.80% Subordinated Notes upon a default in the payment of
principal of, or any premium or interest on, or in the performance of any
covenant or agreement applicable to, the First Fidelity 6.80% Subordinated
Notes.
If a Default (as defined below) with respect to any First Fidelity 6.80%
Subordinated Notes occurs and is continuing, the trustee may in its discretion
protect and enforce its rights and the rights of the holders of First Fidelity
subordinated debt securities through appropriate judicial proceedings. The
indenture defines a "Default" with respect to the First Fidelity 6.80%
Subordinated Notes as any one of the following events:
o an Event of Default;
o default for 30 days in any payment of interest on any First Fidelity
6.80% Subordinated Notes;
o default in the payment of principal of, or any premium on, any First
Fidelity 6.80% Subordinated Notes when due;
o default in the performance or breach for 90 days after appropriate
notice, of any other covenant or warranty in the indenture, other
than a covenant or warranty included in the indenture solely for the
benefit of another series;
o default in the payment of principal on, or acceleration of, any
obligations for borrowed money of any Major Subsidiary Bank greater
than $10 million in the aggregate if the obligations are not
discharged or reduced to an aggregate amount of less than $10
million, or if the acceleration is not annulled or rescinded, within
ten days after appropriate notice; or
o events of bankruptcy, insolvency or reorganization of any Major
Subsidiary Bank.
Modification and Waiver. Certain modifications and amendments of the
indenture may be made by First Union and the trustee only with the consent of
the holders of or least a majority in principal amount of the First Fidelity
subordinated debt securities of each series affected. However, no modification
or amendment may, without the consent of the holder of each First Fidelity
subordinated debt security affected:
o change the stated maturity of the principal of, any installment of
principal of or interest on, any such First Fidelity subordinated
debt securities;
o reduce the principal amount of, or any premium or interest on, any
First Fidelity subordinated debt securities;
o change the place of payment where, or the coin or currency in which,
any principal of, or any premium or interest on, any First Fidelity
subordinated debt security is payable;
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o impair the right to institute suit for the enforcement of any such
payment on or after the stated maturity thereof;
o reduce the percentage of First Fidelity subordinated debt securities
of any series, the consent of the holders of which is necessary to
modify or amend the indenture; or
o modify any of these requirements or reduce the percentage of the
principal amount of First Fidelity subordinated debt securities of
any series necessary for waiver of compliance or of defaults.
(Section 902).
The holders of at least a majority in principal amount of the First
Fidelity subordinated debt securities of any series may, on behalf of all
holders of that series, waive compliance by First Union with the provisions of
the indenture. (Section 1010). The holders of at least a majority in principal
amount of the First Fidelity subordinated debt securities of any series may, on
behalf of all holders of that series, waive any past default under the
indenture, except a default in the payment of the principal of, or any premium
or interest on, any First Fidelity subordinated debt securities of that series
or in respect of a provision which cannot be modified or amended without the
consent of the holders of each First Fidelity subordinated debt security of the
series affected. (Section 513).
Reports by First Union. First Union must deliver annually to the trustee
an officers' certificate as to the performance by First Union of its
obligations under the indenture and as to any defaults. (Section 1009). The
trustee may withhold notice to the holders of any series of any default, other
than a default in payment of principal or any premium, interest or sinking fund
installment, if it considers it to be in the interest of the holders of First
Fidelity subordinated debt securities of that series to do so. (Section 602).
Control by Holders. Subject to the duties of the trustee under the
indenture, if a Default with respect to the First Fidelity 6.80% Subordinated
Notes or an Event of Default with respect to the First Fidelity 9 5/8%
Subordinated Notes occurs and is continuing, the trustee will be under no
obligation to exercise any of its rights or powers at the request, order or
direction of the holders of the First Fidelity subordinated debt securities of
any series unless the holders offer the trustee reasonable indemnity. (Sections
601 and 603). Subject to these provisions for indemnification and other rights
of the trustee, the holders of a majority in principal amount of the First
Fidelity subordinated debt securities of any series have the right to direct
the time, method and place of conducting any proceeding for any remedy
available to the trustee or exercising any trust or power conferred on the
trustee with respect to the First Fidelity subordinated debt securities of that
series, as long as the direction does not conflict with any rule of law or with
the indenture. The trustee may take any other action deemed proper by it which
is not inconsistent with the direction. (Sections 512 and 603).
No holder of any First Fidelity subordinated debt securities of any
series has any right to institute any proceeding with respect to the indenture
or for any remedy, unless:
o the holder gives the trustee written notice of a Default with respect
to the First Fidelity 6.80% Subordinated Notes or Event of Default
with respect to the First Fidelity 9 5/8% Subordinated Notes;
o the holders of at least 25 percent in principal amount of the First
Fidelity subordinated debt securities of that series request the
trustee in writing to institute a proceeding as trustee;
o the holder or holders offer the trustee reasonable indemnity,
o the trustee fails to institute a proceeding for 60 days; and
o the trustee does not receive from the holders of a majority in
principal amount of the First Fidelity subordinated debt securities
of that series a direction inconsistent with such request.
(Section 507). However, the holder of any First Fidelity subordinated debt
securities have an absolute right to receive payment of the principal of, and
any premium and interest on, the First Fidelity subordinated debt securities on
or after the due dates, and to institute suit for the enforcement of any
payment. (Section 508).
Consolidation, Merger and Sale of Assets. First Union may not consolidate with
or merge into any other corporation, or transfer its properties and assets
substantially as an entirety to any person, unless, among other things:
o the corporation formed by the consolidation or into which First Union
is merged, or the person to which the properties and assets of
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First Union are transferred, is a corporation organized and existing
under the laws of the United States, any state or the District of
Columbia and expressly assumes by supplemental indenture the payment
of the principal of, and any premium and interest on, the First
Fidelity subordinated debt securities and the performance of the
other covenants of First Union under the indenture; and
o immediately after giving effect to the transaction, no Default, and no
event which, after notice or lapse of time or both, would become a
Default, has occurred and is continuing.
(Section 801).
Restriction on Sale or Issuance of Stock of Major Subsidiary Banks.
First Union may not, and may not permit any subsidiary to, sell, assign,
pledge, transfer or otherwise dispose of any shares of capital stock, or any
securities convertible into shares of Capital Stock (as defined in the
indenture), of any Major Subsidiary Bank or any subsidiary owning, directly or
indirectly, any shares of Capital Stock of any Major Subsidiary Bank and may
not permit any Major Subsidiary Bank or any subsidiary owning, directly or
indirectly, any shares of Capital Stock of a Major Subsidiary Bank to issue any
shares of its Capital Stock or any securities convertible into shares of its
Capital Stock, except for issuances, sales, assignments, pledges, transfers or
other dispositions which:
o are for the purpose of qualifying a person to serve as a director;
o are for fair market value, as determined by First Union's Board of
Directors, and, after giving effect to the disposition and to any
potential dilution, First Union owns, directly or indirectly, not
less than 80 percent of the shares of each class of Voting Stock (as
defined in the indenture) of the Major Subsidiary Bank or any
subsidiary owning, directly or indirectly, any shares of Capital
Stock of the Major Subsidiary Bank;
o are made (a) in compliance with an order of a court or regulatory
authority of competent jurisdiction, or (b) in compliance with a
condition imposed by any court or authority permitting the
acquisition by First Union, directly or indirectly, of any other bank
or entity the activities of which are legally permissible for a
company such as First Union or its subsidiary to engage in, or (c) in
compliance with an undertaking made to the authority in connection
with an acquisition, as long as in the case of clauses (b) and (c),
the assets of the bank or entity being acquired and its consolidated
subsidiaries equal or exceed 75 percent of the assets of the Major
Subsidiary Bank or the subsidiary owning, directly or indirectly, any
shares of Capital Stock of a Major Subsidiary Bank and its
consolidated subsidiaries on the date of acquisition; or
o are made to First Union or any wholly-owned subsidiary.
(Section 1007).
Restriction on Merger by or Sale of Assets of Major Subsidiary Banks.
First Union may not permit any Major Subsidiary Bank to merge into or
consolidate with, or lease, sell or transfer all or substantially all of its
properties and assets to, any other corporation except First Union or a
corporation or person which is or upon consummation of the transaction will be
a subsidiary, not less than 80 percent of the Voting Stock of which is owned,
directly or indirectly, by First Union. This covenant contains an exception
comparable to the third exception described in previous paragraph. (Section
1008).
Subordination. The payment of the principal of, and any premium and
interest on, First Fidelity subordinated debt securities is subordinated in
right of payment to the prior payment in full of all Senior Indebtedness (as
defined below) of First Union. As a result of an amendment to the indenture on
June 14, 1993, there are significant differences between the rights of holders
of the First Fidelity 6.80% Subordinated Notes and the holders of the First
Fidelity 9 5/8% Subordinated Notes. In certain events of insolvency, the
payment of the principal of, and any premium and interest on, the First
Fidelity 6.80% Subordinated Notes is also be subordinated in right of payment
to the prior payment in full of all Other Financial Obligations (as defined
below) of First Union.
Upon
o any payment or distribution of assets to creditors upon liquidation,
dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshalling of assets or any bankruptcy, insolvency or
similar proceedings of First Union, or
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o the acceleration of the maturity of any First Fidelity subordinated
debt securities,
the holders of all Senior Indebtedness are first entitled to receive payment in
full of all amounts due or to become due before the holders of First Fidelity
subordinated debt securities are entitled to receive any payment in respect of
the principal of, or any premium or interest on, First Fidelity subordinated
debt securities. No payments of principal or any premium or interest in respect
of First Fidelity subordinated debt securities may be made if there has
occurred and is continuing a default in any payment with respect to Senior
Indebtedness, or an event of default with respect to any Senior Indebtedness
permitting the holders to accelerate the maturity, or if any judicial
proceeding is pending with respect to any such default. (Article Thirteen).
"Senior Indebtedness" is defined in the indenture as the principal of,
and any premium and interest on:
o all indebtedness of First Union, including indebtedness of others
guaranteed by First Union but excluding the First Fidelity
subordinated debt securities, whether previously outstanding or
subsequently created, incurred or assumed, which is for money
borrowed, or which is evidenced by a note or similar instrument given
in connection with the acquisition of any businesses, properties or
assets of any kind;
o obligations of First Union as lessee under leases required to be
capitalized on the balance sheet of the lessee under generally
accepted accounting principles and leases of property or assets made
as part of any sale and lease-back transaction to which First Union
is a party; and
o amendments, renewals, extensions, modifications and refundings of any
such indebtedness or obligation,
unless the instrument creating or evidencing the indebtedness or obligation or
under which it is outstanding provides that the indebtedness or obligation is
not superior in right of payment to First Fidelity subordinated debt
securities. (Section 101).
The indenture does not limit or prohibit the incurrence of Senior
Indebtedness or Other Financial Obligations, which may include indebtedness
that is senior to the First Fidelity subordinated debt securities but
subordinate to other obligations of First Union.
Subordination Provisions Specific to First Fidelity 6.80% Subordinated
Notes. If upon any payment or distribution of assets to creditors there
remains, after giving effect to the subordination provisions in favor of the
holders of Senior Indebtedness, any amounts of cash, property or securities
available for payment or distribution in respect of the First Fidelity 6.80%
Subordinated Notes ("Excess Proceeds") and if, at such time, any Entitled
Persons (as defined below) in respect of Other Financial Obligations have not
received payment in full of all amounts due or to become due on or in respect
of the Other Financial Obligations, then the Excess Proceeds must first be
applied to pay in full all Other Financial Obligations before any payment or
distribution may be made in respect of the First Fidelity 6.80% Subordinated
Notes.
As a result of the obligation of the holders of First Fidelity 6.80%
Subordinated Notes to pay over any Excess Proceeds to Entitled Persons in
respect of Other Financial Obligations, in the event of the insolvency of First
Union, holders of the First Fidelity 9 5/8% Subordinated Notes may recover
less, proportionally, than Entitled Persons and may recover more,
proportionally, than the holders of the First Fidelity 6.80% Subordinated
Notes. First Union's obligations under the First Fidelity subordinated debt
securities rank equally in right of payment with each other, subject to the
obligations of the holders of the First Fidelity 6.80% Subordinated Notes to
pay over any Excess Proceeds.
The indenture permits, at any time, the modification or elimination of
the rights of Entitled Persons in respect of Other Financial Obligations
described above without the consent of any Entitled Persons in respect of Other
Financial Obligations.
"Other Financial Obligations" is defined with respect to the First
Fidelity 6.80% Subordinated Notes as:
o obligations of First Union under direct credit substitutes;
o obligations of, or guaranteed by, First Union for purchased money or
funds;
o any deferred obligation of, or guaranteed by, First Union incurred in
connection with the acquisition of any business, properties or assets
not evidenced by a note or similar instrument given in connection
with such transaction; and
o all obligations of First Union to make payment pursuant to the terms
of financial
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instruments, such as (a) securities contracts and foreign currency
exchange contracts, (b) derivative instruments and (c) similar
financial instruments.
However, Other Financial Obligations do not include:
o obligations on account of Senior Indebtedness, and
o obligations on account of indebtedness for money borrowed ranking
equally with or subordinate to the First Fidelity subordinated debt
securities.
"Entitled Persons" is defined in the indenture as any person who is
entitled to payment pursuant to the terms of Other Financial Obligations.
(Section 101).
As of December 31, 1998, First Union had $6 billion aggregate principal
amount of indebtedness outstanding that qualified as Senior Indebtedness, and
$5 billion aggregate principal amount of indebtedness that qualified as Other
Financial Obligations, under the indenture. First Union expects additional
indebtedness and to incur other obligations that may constitute Senior
Indebtedness or other Financial Obligations under the indenture.
Defeasance under the First Fidelity Subordinated Indenture
The First Fidelity 9 5/8% Subordinated Notes provide that First Union
may discharge its indebtedness and its obligations or certain of its
obligations with respect to such series by depositing funds or Government
Obligations (as defined below) with the trustee as described below. The First
Fidelity 6.80% Subordinated Notes are not subject to the following defeasance
provisions. The term "Government Obligations" means United States government
securities or securities of government agencies backed by the full faith and
credit of such government.
Defeasance and Discharge. If so specified with respect to any series,
the indenture may no longer be of any effect with respect to that series,
except for obligations to compensate, reimburse and indemnify the trustee, to
register the transfer or exchange of debt securities, to replace stolen, lost
or mutilated debt securities, to maintain paying agencies and to hold monies
for payment in trust, and First Union may be deemed to have satisfied and
discharged the indenture with respect to that series, under the following
circumstances: First Union must deposit with the trustee irrevocably in trust,
money or Government Obligations in an amount sufficient to pay and discharge:
o all principal of, and any premium and interest on, the debt securities
of that series on the maturity of such principal, premium or
interest, or on the redemption date, if applicable, and
o any sinking fund payments or analogous payments applicable to the debt
securities of that series on the day on which such payments are due
and payable.
A trust may only be established if, among other things:
o First Union delivers to the trustee an opinion of counsel stating that
First Union has received from, or there has been published by, the
United States Internal Revenue Service a ruling which in the opinion
of counsel establishes that, or stating that counsel has otherwise
determined that, the holders of debt securities of that series will
not recognize income, gain or loss for Federal income tax purposes as
a result of the deposit, defeasance and discharge and will be subject
to Federal income tax in the same amount, manner and times as would
have been the case if the deposit, defeasance and discharge had not
occurred; and
o if the debt securities of that series are listed on any domestic or
foreign securities exchange, First Union delivers to the trustee an
opinion of counsel stating that such deposit, defeasance and
discharge will not cause the debt securities to be delisted.
(Section 403). In the event of any defeasance, holders of debt securities of
the applicable series would be able to look only to the trust fund for payment
of principal and any premium and interest on their debt securities.
Defeasance of Certain Obligations. If so specified with respect to any
series, First Union may omit to comply with the restrictive covenants described
under "Restriction on Sale or Issuance of Stock of Major Subsidiary Banks and
Subsidiaries Owning Major Subsidiary Banks" and "Restriction on Merger by or
Sale of Assets of Major Subsidiary Banks" above, and any omission will not be
an Event of Default with respect to the debt securities of that series under
the indenture if: First Union deposits with the trustee, irrevocably in trust,
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money or Government Obligations in an amount sufficient to pay and discharge:
o all principal of, and any premium and interest on, the debt securities
of that series on the maturity of the principal, premium or interest,
or on the redemption date, if applicable, and
o any sinking fund payments or analogous payments applicable to the debt
securities of that series on the day on which the payments are due
and payable.
Such a trust may be established only if, among other things:
o First Union delivers to the trustee an opinion of counsel stating that
the holders of the debt securities of that series will not recognize
income, gain or loss for Federal income tax purposes as a result of
the deposit and defeasance and will be subject to Federal income tax
in the same amount, manner and times as would have been the case if
the deposit and defeasance had not occurred; and
o if the debt securities of that series are listed on any domestic or
foreign securities exchange, First Union delivers to the trustee an
opinion of counsel stating that the deposit and defeasance will not
cause the debt securities to be delisted.
The obligations of First Union under the indenture and the debt securities of
that series other than with respect to the specified covenants shall remain in
full force and effect. (Section 1011).
If First Union exercises its option to omit compliance with the
specified covenants with respect to the debt securities of any series and the
debt securities of that series are declared due and payable because of the
occurrence of any Event of Default, then the amount of money and Government
Obligations on deposit with the trustee will be sufficient to pay amounts due
on the debt securities of that series at the time of the acceleration of
maturity resulting from the Event of Default. First Union will in any event
remain liable for these payments. (Section 1011).
Effect of Defeasance. If First Union exercises its option to defease and
discharge the First Fidelity subordinated debt securities of any series,
payment of the debt securities of that series may not be accelerated because of
an Event of Default. If First Union exercises its option to defease obligations
with respect to the First Fidelity subordinated debt securities of any series,
payment of the debt securities of that series may not be accelerated upon the
failure of First Union to comply with the covenants described under
"Restriction on Sale or Issuance of Stock of Major Subsidiary Banks and
Subsidiaries Owning Major Subsidiary Banks" and "Restriction on Merger by or
Sale of Assets of Major Subsidiary Banks" above. The subordination provisions
described under "Subordination", above are subject to the provisions for
defeasance and discharge and defeasance of obligations described above. Upon
the defeasance and discharge or defeasance of obligations with respect to debt
securities of any series, the debt securities of that series would cease to be
subordinated.
Substitution of Collateral. If specified with respect to the First
Fidelity subordinated debt securities of any series, First Union will be
permitted at any time to withdraw any Government Obligations deposited pursuant
to the defeasance provisions, as long as First Union deposits in substitution
money and/or Government Obligations which would be sufficient to satisfy First
Union's payment obligations in respect of the debt securities of that series.
(Section 402).
Dominion Subordinated Capital Notes
First Union acquired Dominion Bankshares Corporation on March 1, 1993,
by merging Dominion, a wholly-owned subsidiary of First Union. On July 31,
1997, this subsidiary merged into First Union.
The Dominion 9 5/8% Subordinated Capital Notes due June 15, 1999 were
issued on June 24, 1987 and will mature on June 15, 1999. The Dominion
Subordinated Capital Notes were issued under a subordinated indenture, dated
June 24, 1987, between Dominion and First Trust of New York, N.A., as trustee,
as successor to Morgan Guaranty Trust Company of New York.
The Dominion Subordinated Capital Notes bear interest at the rate of
9 5/8% per year, payable semiannually on June 15 and December 15 each year to
the registered holders at the close of business on the preceding June 1 or
December 1. The Dominion Subordinated Capital Notes are limited to $75 million
aggregate principal amount.
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The Dominion Subordinated Capital Notes have been issued in registered
form only, without coupons. Principal and interest on the Dominion Subordinated
Capital Notes will be payable, and the Dominion Subordinated Capital Notes will
be transferable, at the corporate trust office maintained by the trustee in the
Borough of Manhattan, The City of New York and at the office of First Union
National Bank in Roanoke, Virginia. However, First Union may make payments of
interest by check mailed to the person entitled to the interest.
Dominion Subordinated Indenture
Redemption upon Certain Events Relating to Federal Income Taxes. The
Dominion Subordinated Capital Notes may not be redeemed prior to maturity,
except under the following circumstances. The Dominion Subordinated Capital
Notes may be redeemed at any time if First Union determines in good faith that
it is not, or there is a substantial probability that it will not be, allowed
to deduct payments of interest to holders because of:
o any change in or amendment to, or officially proposed change in or
amendment to, the laws or any regulations or rulings of the United
States or any change in, or officially proposed change in, operation
or official interpretation of such laws, rulings or regulations;
o any action taken by a taxing authority of the United States which is
generally applied or which is taken with respect to First Union;
o a decision rendered by a court of competent jurisdiction in the United
States, whether or not such decision was rendered with respect to
First Union; or
o a technical advice memorandum or published ruling issued by the United
States Internal Revenue Service relating to obligations substantially
similar to the Dominion Subordinated Capital Notes.
Any redemption of the Dominion Subordinated Capital Notes must be made in whole
and not in part. The redemption price must be equal to 100 percent of the
principal amount of the Dominion Subordinated Capital Notes, together with
accrued interest to the redemption date. Not less than 30 days' written notice
mailed to the holders must be given. Before the mailing of any notice of
redemption, First Union must deliver to the trustee an opinion of counsel
stating that the conditions to redemption have occurred. (Section 201 and
Article Eleven).
Events of Default and Limited Rights of Acceleration. The indenture
defines an "Event of Default" as events involving the bankruptcy, insolvency or
reorganization of First Union. (Section 501). If at any time before the payment
of the principal of the Dominion Subordinated Capital Notes an Event of Default
occurs and is continuing, either the trustee or the holders of at least 25
percent in principal amount of the Dominion Subordinated Capital Notes may
declare the principal amount of all the Dominion Subordinated Capital Notes to
be due and payable immediately. (Section 502). Enforcement of this right would,
in the event of the bankruptcy or insolvency of First Union, be subject to the
broad equity powers of a Federal bankruptcy court and to the determination by
that court of the nature and status of the payment claims of the holders of the
Dominion Subordinated Capital Notes. At any time after a declaration of
acceleration is made but before a judgment or decree based on acceleration is
obtained, the holders of a majority in principal amount of Dominion
Subordinated Capital Notes may, in some circumstances, rescind and annul such
acceleration. (Section 502). For information as to waiver of defaults see
"Modification and Waiver", below.
There is no right of acceleration of the payment of principal of the
Dominion Subordinated Capital Notes upon a default in the payment of principal
or interest or in the performance of any covenant or agreement. The indenture
defines a "Default" as being:
o failure to pay any interest on any Dominion Subordinated Capital Notes
when due, whether or not payment is prohibited by the subordination
provisions of the indenture,
o failure to pay principal on any Dominion Subordinated Capital Notes
when due, whether or not payment is prohibited by the subordination
provisions of the indenture, or
o failure to perform any other covenant if continued for 30 days after
written notice is given as provided in the indenture.
If a Default occurs and is continuing, the trustee may, subject to some
limitations and conditions, seek to enforce payment of principal or accrued
interest or the performance of the covenant or agreement. (Section 503).
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Modification and Waiver. Modifications and amendments of the indenture
may be made by First Union and with the consent of the holders of a majority in
principal amount of the Dominion Subordinated Capital Notes. However, no
modification or amendment may, without the consent of the holders of all
Dominion Subordinated Capital Notes affected:
o change the stated maturity date of the principal of, or any
installment of interest on, any Dominion Subordinated Capital Note;
o reduce the principal amount of, or rate of interest on, any Dominion
Subordinated Capital Note;
o change the place or currency of payment of principal of, or interest
on, any Dominion Subordinated Capital Note;
o impair the right to institute suit for the enforcement of any payment
on or with respect to any Dominion Subordinated Capital Note;
o modify the subordination provisions in a manner adverse to the holders
of Dominion Subordinated Capital Notes; or
o reduce the percentage in principal amount of Dominion Subordinated
Capital Notes, the consent of whose holders is required for
modification or amendment of the indenture or for waiver of
compliance or of defaults.
(Section 902).
The holders of a majority in principal amount of the Dominion
Subordinated Capital Notes may, on behalf of all holders, waive:
o compliance by First Union with restrictive provisions of the
indenture, and
o any past default under the indenture, except a default in the payment
of principal or interest or a default in respect of a covenant or
provision in the indenture which cannot be modified or amended
without the consent of each holder affected.
(Sections 1008 and 513).
Consolidation, Merger and Sale of Assets. First Union may not
consolidate with or merge into any other corporation or transfer its properties
and assets substantially as an entirety to any person unless, among other
things:
o the corporation formed by the consolidation or into which First Union
is merged, or the person to which the properties and assets of First
Union are so transferred, is a corporation organized and existing
under the laws of the United States, any state or the District of
Columbia and expressly assumes the payment of the principal of and
interest on the Dominion Subordinated Capital Notes and the
performance of the other covenants of First Union under the indenture;
and
o immediately after giving effect to the transaction, no Event of
Default or Default and no event which, after notice or lapse of time
or both, would become an Event of Default or Default, has occurred
and is continuing.
(Section 801).
Restriction on Sale or Issuance of Capital Stock of Major Constituent
Bank. The indenture prohibits:
o the issuance, sale or other disposition of shares of, or securities
convertible into, Voting Stock (as defined in the indenture) of a
Major Constituent Bank (as defined below),
o the merger or consolidation of any Major Constituent Bank with or into
any other corporation, and
o the sale or other disposition of all or substantially all of the
assets of any Major Constituent Bank,
if, after giving effect to the transaction and to the issuance of the maximum
number of shares of Voting Stock issuable upon the conversion of all such
convertible securities, First Union would own, directly or indirectly, 80
percent or less of the shares of Voting Stock of such Major Constituent Bank,
its successor in merger or consolidation or the person that acquires all or
substantially all of its assets. However, this covenant will not prohibit sales
or other dispositions:
o made in compliance with an order of a court or regulatory authority of
competent jurisdiction or made as a condition imposed by such court
or authority to the receipt of the order or to the acquisition by
First Union, directly or indirectly, of any other banking institution
or entity the activities of which are legally permissible for a bank
holding company or its subsidiary to engage in; or
33
<PAGE>
o if the Major Constituent Bank, having obtained any necessary
regulatory approvals, unconditionally guarantees payment when due of
the principal of and interest on the Dominion Subordinated Capital
Notes.
(Section 1006).
"Major Constituent Bank" is defined in the indenture as any banking
subsidiary of First Union whose consolidated banking assets constitute 30
percent or more of First Union's consolidated banking assets. As of the date of
this prospectus, the term Major Constituent Bank includes First Union National
Bank.
Control by Holders. Subject to the duties of the trustee under the
indenture, if an Event of Default or Default occurs and is continuing, the
trustee under no obligation to exercise any of its rights or powers under the
indenture at the request or direction of any of the holders of the Dominion
Subordinated Capital Notes unless the holders offer reasonable indemnity to the
trustee. (Section 603). Subject to these indemnification provisions, the
holders of a majority in principal amount of the Dominion Subordinated Capital
Notes have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the trustee or exercising any trust or
power conferred on the trustee, as long as this direction is not in conflict
with any rule of law or with the indenture, and the trustee determines that the
proceeding will not involve it in any personal liability. The trustee may take
any other action which it deems proper and which is not inconsistent with the
direction.
(Section 512).
No holder of any Dominion Subordinated Capital Note will have the right
to institute any proceeding with respect to, or for any remedy under, the
indenture unless
o the holder gives to the trustee written notice of a continuing Event
of Default or Default;
o the holders of at least 25 percent in principal amount of the Dominion
Subordinated Capital Notes request the trustee in writing to
institute a proceeding as trustee;
o the holder or holders offer the trustee reasonable indemnity;
o the trustee does not receive from the holders of a majority in
principal amount of the Dominion Subordinated Capital Notes any
direction inconsistent with the request, and
o the trustee fails to institute the proceeding within 60 days.
(Section 507). However, these limitations do not apply to a suit instituted by
a holder of a Dominion Subordinated Capital Note for payment of the principal
of or interest on the Dominion Subordinated Capital Note on or after the
respective due dates. (Section 508).
Reports by First Union. First Union is required to furnish to the
trustee annually a statement as to the performance by First Union of its
obligations under the indenture and as to any default in its performance.
(Section 1007).
Subordination. The obligations of First Union to make any payment on
account of the principal of and interest on the Dominion Subordinated Capital
Notes are subordinate and junior in right of payment to First Union's
obligations to the holders of Senior Indebtedness (as defined below). (Section
1201).
"Senior Indebtedness" is defined in the indenture as the principal of,
and any premium and interest on, all "indebtedness for money borrowed" by First
Union, whether previously outstanding or subsequently created, assumed or
incurred, except the Dominion Subordinated Capital Notes, First Union's
guaranty of a 6 3/4% Note due 2001 issued by Dominion Bankshares Properties,
Inc., any indebtedness that is expressly stated to rank equally in right of
payment with the Dominion Subordinated Capital Notes, and any deferral,
renewals or extensions of any of these. The term "indebtedness for money
borrowed" is defined in the indenture to mean any obligation of, or any
obligation guaranteed by, First Union for the repayment of borrowed money,
whether or not evidenced by bonds, debentures, notes or other written
instruments, and any deferred obligation of or guaranteed by First Union for
the payment of the purchase price of property or assets. (Article Twelve).
No payment on account of principal or interest on the Dominion
Subordinated Capital Notes may be made unless full payment of amounts due for
principal of, and any premium, sinking funds, and interest on, Senior
Indebtedness of First Union is made or duly provided for in accordance with its
terms and, at the time of the payment or immediately after giving effect to it,
there does not exist with respect to any Senior Indebtedness of First Union an
event of default permitting the holders or a trustee on behalf of the holders
to accelerate maturity, written notice of which has been given to
34
<PAGE>
the trustee, and the event of default has not been cured or waived. (Section
1202). Upon any distribution of the assets of First Union upon dissolution,
winding up, liquidation or reorganization, whether voluntary or involuntary, or
in bankruptcy, insolvency, receivership, conservatorship or other proceedings,
the holder of Senior Indebtedness is entitled to receive payment in full of
principal and any premium and interest before any payment is made on the
Dominion Subordinated Capital Notes. Subject to the payment in full of all
Senior Indebtedness, the holders of Dominion Subordinated Capital Notes are
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of assets of First Union applicable to Senior
Indebtedness until the Dominion Subordinated Capital Notes are paid in full.
As of December 31, 1998, First Union had $6 billion aggregate principal
amount of indebtedness outstanding that qualified as Senior Indebtedness under
the indenture. First Union expects to issue additional indebtedness and to
incur other obligations that may constitute Senior Indebtedness under the
indenture.
Certain Federal Income Tax Consequences
The United States Internal Revenue Service has issued Revenue Ruling
85-119 stating that "mandatory convertible debt" issued by a bank holding
company under the circumstances described in the ruling is debt of the bank
holding company for federal income tax purposes. The Dominion Subordinated
Capital Notes are substantially similar to the mandatory convertible debt
described in the ruling and under current cases, regulations and rulings,
should represent debt of First Union with the result that interest payable on
the Dominion Subordinated Capital Notes should be taxable as interest rather
than dividends for federal income tax purposes. However, revenue rulings may be
relied upon as precedent only as to the specific fact pattern of the ruling,
and the Dominion Subordinated Capital Notes are not identical to the mandatory
convertible debt described in the ruling.
A holder's basis in such Dominion Subordinated Capital Note will
generally be equal to the amount paid for the Dominion Subordinated Capital
Note. Upon the sale, redemption, or retirement of the Dominion Subordinated
Capital Note, gain or loss will be recognized for federal income tax purposes
equal to the difference between the amount realized on the sale, redemption or
retirement and the holder's tax basis in the Dominion Subordinated Capital
Note, except that consideration for accrued interest which has not been taxed
as income to the holder will generally result in interest income to the holder
equal to the fair market value of the consideration.
The tax effects of the purchase of the Dominion Subordinated Capital
Notes under state and local tax laws may vary. In addition, the discussion of
Federal income tax consequences above is a summary of general information.
Therefore, purchasers are advised to consult their own tax advisors with
respect to Federal, state, and local income tax effects. Purchasers of Dominion
Subordinated Capital Notes who are nonresident alien individuals, foreign
corporations, or other non-United States persons should also consult their own
advisors with respect to the possible applicability of United States
withholding and other taxes upon income realized in respect of the Dominion
Subordinated Capital Notes.
Meridian 7 7/8% Subordinated Debentures
The Meridian 7 7/8% Subordinated Debentures due July 15, 2002 were
issued under a subordinated indenture, dated as of March 9, 1992, between
Meridian and The First National Bank of Chicago, as subordinated trustee.
The Meridian 7 7/8% Subordinated Debentures were issued on July 22, 1992
and will mature on July 15, 2002. The Meridian 7 7/8% Subordinated Debentures
bear interest at the rate of 7 7/8% per year, payable semiannually on January
15 and July 15 each year to the registered holders at the close of business on
the preceding January 1 or July 1. The Meridian 7 7/8% Subordinated Debentures
are limited to $100 million aggregate principal amount.
Meridian Subordinated Indenture
Except as expressly limited to the Meridian senior indenture, the
description of the Meridian indentures included in "Summary of Assumed Senior
Debt Securities -- Meridian 6 5/8% Senior Notes; Meridian Indentures" applies
to the Meridian subordinated indenture as well. The following is a description
of some additional provisions of the Meridian subordinated indenture.
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<PAGE>
Acceleration. The Meridian subordinated indenture does not permit
acceleration of the payment of principal of the Meridian 7 7/8% Subordinated
Debentures upon the occurrence of an "Event of Default" described in the first
three bullet points of the first paragraph under "Summary of Assumed Senior
Debt Securities -- Meridian 6 5/8% Senior Notes; Meridian Indentures; Events
of Default; Acceleration; Waiver," above. (Section 501). The Meridian
subordinated indenture provides that if any Event of Default under the fourth
bullet point of such paragraph occurs and is continuing with respect to the
Meridian 7 7/8% Subordinated Debentures, then either the Meridian subordinated
trustee or the holders of not less than 25 percent in principal amount of the
Meridian 7 7/8% Subordinated Debentures may declare the principal amount of all
of the Meridian 7 7/8% Subordinated Debentures to be due and payable
immediately.
Subordination. The Meridian 7 7/8% Subordinated Debentures are
subordinate and junior in right of payment to all Senior Indebtedness (as
defined below). (Section 101). "Senior Indebtedness" is defined in the Meridian
subordinated indenture as any obligation of First Union to its creditors,
whether previously outstanding or subsequently incurred, except:
o any obligation as to which, in the instrument creating or evidencing
the obligation or under which it is outstanding, it is provided that
the obligation is not Senior Indebtedness, and
o subordinated debt securities issued under the Meridian Subordinated
Indenture.
If First Union defaults in the payment of any principal of or interest
on any Senior Indebtedness when due and payable, then, unless and until such
default is cured or waived or ceases to exist, no direct or indirect payment
may be made on account of the principal of or interest on the Meridian 7 7/8%
Subordinated Debentures, or in respect of any redemption, retirement, purchase
or other acquisition of any of the Meridian 7 7/8% Subordinated Debentures. If
events of bankruptcy, insolvency or reorganization of First Union occur, all
Senior Indebtedness must first be paid in full before any payment or
distribution may be made to any holder of any of the Meridian 7 7/8%
Subordinated Debentures. (Section 1301).
As of December 31, 1998, First Union had $6 billion aggregate principal
amount of indebtedness outstanding that qualified as Senior Indebtedness under
the Meridian subordinated indenture. First Union expects to issue additional
indebtedness and to incur other obligations that may constitute Senior
Indebtedness under the Meridian subordinated indenture.
DESCRIPTION OF THE MONEY STORE DEBT SECURITIES AND GUARANTEES
First Union acquired The Money Store on June 30, 1998. The Money Store
continues to operate as a wholly-owned subsidiary of First Union. Under
supplements to The Money Store indentures, First Union has guaranteed the
payment of the obligations on The Money Store Debt Securities as described
under " -- The Guarantees" below.
The following descriptions of the terms of the particular The Money Store
debt securities and the Guarantees are only summaries. These descriptions are
not complete and are qualified in their entirety by reference to The Money
Store indentures, The Money Store debt securities and the Guarantees.
<TABLE>
<CAPTION>
Series Issue Dates Interest Payment Dates Regular Record Dates
- ------------------------------------ ------------------ ------------------------- -----------------------
<S> <C> <C> <C>
8.05% Senior Notes of The
Money Store due April 15,
2002 ............................. April 15, 1997 April 15 and October 15 April 1 and October 1
8.375% Senior Notes The Money
Store due April 15, 2004 ......... April 15, 1997 April 15 and October 15 April 1 and October 1
7.30% Subordinated Notes of The
Money Store due December 1,
2002 ............................. December 1, 1997 June 1 and December 1 May 15 and November 15
7.95% Subordinated Notes of The
Money Store due December 1,
2007 ............................. December 1, 2007 June 1 and December 1 May 15 and November 15
</TABLE>
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<PAGE>
The Money Store Senior Notes
The Money Store senior debt securities were issued under a senior
indenture, dated as of April 15, 1997 between The Money Store and The Chase
Manhattan Bank, as trustee. Under a supplemental indenture, dated June 30,
1998, First Union has guaranteed the payment of the obligations of The Money
Store under The Money Store senior debt securities. See " -- The Guarantees",
below.
The Money Store 8.05% Senior Notes
The Money Store 8.05% Notes due April 15, 2002 were issued on April 15,
1997 and will mature on April 15, 2002. The Money Store 8.05% Senior Notes bear
interest at the rate of 8.05% per year, payable semiannually on April 15 and
October 15 of each year to the registered holders at the close of business on
the preceding April 1 or October 1. The Money Store 8.05% Senior Notes are
limited to $175 million aggregate principal amount.
The Money Store 8.375% Senior Notes
The Money Store 8.375% Notes due April 15, 2004 were issued on April 15,
1997 and will mature on April 15, 2004. The Money Store 8.375% Senior Notes
bear interest at the rate of 8.375% per year, payable semiannually on April 15
and October 15 of each year to the registered holders at the close of business
on the preceding April 1 or October 1. The Money Store 8.375% Senior Notes are
limited to $125 million aggregate principal amount.
The Money Store Indentures
The following description of the terms of The Money Store indentures
applies to The Money Store senior indenture and, except as expressly limited to
The Money Store senior indenture, also applies to The Money Store subordinated
indenture.
Discharge, Legal Defeasance and Covenant Defeasance. The applicable
indenture with respect to The Money Store debt securities of any series may be
discharged when:
o either all debt securities of that series have been delivered to the
applicable trustee for cancellation, or all debt securities of that
series not delivered have become due and payable, or will become due
and payable at their maturity within one year, and The Money Store
irrevocably deposits with the applicable trustee as trust funds in
trust for such purpose an amount sufficient to pay and discharge the
entire indebtedness on such debt securities for principal and any
premium or interest to the date of such deposit or to the maturity,
as the case may be; but, if a petition for relief under the
applicable Federal or state bankruptcy, insolvency or other similar
law is filed with respect to The Money Store within 91 days after the
deposit and the applicable trustee is required to return the
deposited money to The Money Store, the obligations of The Money
Store under the applicable indenture with respect to such debt
securities will not be deemed terminated or discharged;
o The Money Store pays all other sums payable by it under the applicable
indenture;
o The Money Store delivers to the applicable trustee an officers'
certificate and an opinion of counsel each stating that all
conditions relating to satisfaction and discharge with respect to the
applicable series have been complied with; and
o The Money Store delivers to the applicable trustee an opinion of
counsel or a ruling of the United States Internal Revenue Service
stating that the deposit and discharge will not cause the holders of
The Money Store debt securities of that series to recognize income,
gain or loss for Federal income tax purposes.
(Section 4.01).
If provision is made for the defeasance of the debt securities of any
series, and if The Money Store debt securities of that series are registered
securities and denominated and payable only in United States dollars, then the
provisions of the applicable indenture relating to defeasance will apply to The
Money Store debt securities of that series. (Section 15.01).
At its option, The Money Store either:
o may be deemed to have been Discharged (as defined below) from its
obligations with respect to The Money Store debt securities of any
series ("legal defeasance option"), or
o may no longer be required to comply with any obligation in the
applicable indenture, including any covenants applicable to The
37
<PAGE>
Money Store debt securities which are subject to covenant defeasance
("covenant defeasance option")
at any time after the following conditions have been satisfied:
o The Money Store deposits irrevocably with the applicable trustee as
trust funds in trust for such purpose money and/or U.S. Government
Obligations (as defined below) in an amount sufficient to pay and
discharge each installment of principal of and any premium or
interest on, The Money Store debt securities of the applicable series
on the dates that they are due;
o this deposit does not cause the applicable trustee to have a
conflicting interest with respect to The Money Store debt securities
of any series;
o this deposit does not result in a breach or violation of, or
constitute a default under, the applicable indenture or any other
agreement or instruction to which The Money Store is a party or by
which it is bound;
o if The Money Store debt securities of the applicable series are listed
on any national securities exchange, The Money Store delivers to the
applicable trustee an opinion of counsel or a letter or other
document from such exchange stating that The Money Store's exercise
of its legal defeasance option or covenant defeasance option would
not cause the debt securities to be delisted;
o no Event of Default (as defined below) or event which, with notice or
lapse of time or both, would become an Event of Default with respect
to The Money Store debt securities of the applicable series occurs
and is continuing and, with respect to the legal defeasance option
only, no Event of Default under the provisions of the applicable
indenture relating to bankruptcy or insolvency or event which, with
the giving of notice or lapse of time or both, would become an Event
of Default under the bankruptcy or insolvency provisions occurs and
is continuing on the 91st day after such date; and
o The Money Store delivers to the applicable trustee the additional
opinions, officers' certificates and other documents specified in the
applicable indenture, including an opinion of counsel or a ruling of
the United States Internal Revenue Service stating that the deposit,
defeasance or Discharge will not cause the holders of The Money Store
debt securities of the applicable series to recognize income, gain or
loss for Federal income tax purposes.
Nevertheless, if The Money Store exercises its covenant defeasance option and
an Event of Default under the provisions of The Money Store indentures relating
to bankruptcy or insolvency, or event which, with the giving of notice or lapse
of time or both, would become an Event of Default under the bankruptcy or
insolvency provisions occurs and is continuing on the 91st day after the date
of the deposit, the obligations of The Money Store referred to under the
definition of covenant defeasance option with respect to the applicable debt
securities will be reinstated in full. (Section 15.02).
"Discharged" means that The Money Store is deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, debt
securities of the applicable series and to have satisfied all the obligations
under the applicable indenture relating to the debt securities of that series,
except:
o the right of holders to receive, from the trust fund described above,
payment of the principal of, and any premium and interest on, such
debt securities when such payments are due;
o The Money Store's obligations relating to exchanges, transfers and
replacement of The Money Store debt securities, the maintenance of an
office or agency and the defeasance trust fund, the provisions
relating to compensation and reimbursement of the applicable trustee;
and
o the rights, powers, trusts, duties and immunities of the applicable
trustee.
(Section 15.02).
"U.S. Government Obligations" means securities that are direct
obligations of the United States for the timely payment of which its full faith
and credit is pledged, or obligations of a person controlled or supervised by
and acting as an agency or instrumentality of the United States the payment of
which unconditionally guaranteed as a full faith and credit obligation by the
United States, which in either case are not callable or redeemable at the
option of the issuer, and also includes depository
38
<PAGE>
receipts issued by a bank or trust company as custodian with respect to any
U.S. Government Obligation or a specific payment of interest on or principal of
any U.S. Government Obligation held by such custodian for the account of the
holder of a depository receipt, as long as, except as required by law, the
custodian is not authorized to make any deduction from the amount payable to
the holder of the depository receipt from any amount received by the custodian
in respect of the U.S. Government Obligation or the specific payment of
interest on or principal of the U.S. Government Obligation evidenced by the
depository receipt. (Section 15.02).
Events of Default. An "Event of Default" with respect to The Money Store
debt securities of any series means any one of the following events:
o default in the payment of any interest upon any debt security of the
applicable series when it becomes due and payable, and continuance of
the default for a period of 30 days;
o default in the payment of the principal of, and any premium on, any
debt security of that series at its maturity;
o default in the deposit of any sinking fund payment when due by the
terms of the debt securities of the applicable series;
o default or breach of any covenant or warranty in the applicable
indenture, other than a covenant or warranty whose default or breach
is specifically dealt with in the applicable indenture or which
expressly has been included solely for the benefit of debt securities
of a different series, and continuance of the default or breach for a
period of 60 days after there has been given to The Money Store by
the applicable trustee, or to The Money Store and the applicable
trustee by the holders of at least 25 percent in principal amount of
the debt securities of the applicable series, written notice
specifying the default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default";
o events of bankruptcy, insolvency or reorganization with respect to The
Money Store; or
o any other Event of Default with respect to the debt securities of the
applicable series.
(Section 5.01).
Acceleration. If an Event of Default with respect to The Money Store
debt securities of any series occurs and is continuing, then the applicable
trustee or the holders of not less than 25 percent in principal amount of the
debt securities of that series may declare the principal amount of the debt
securities of that series to be due and payable immediately, by a notice in
writing to The Money Store, and to the applicable trustee, if given by holders.
Upon declaration of acceleration, the principal amount, plus accrued and unpaid
interest and any premium, will become immediately due and payable. Upon payment
of this amount, all obligations of The Money Store in respect of the payment of
principal of the debt securities of that series will terminate. (Section 5.02).
At any time after a declaration of acceleration is made and before a
judgment or decree for payment of the money due is obtained, the holders of a
majority in principal amount of the debt securities of the applicable series
may, by written notice to The Money Store and the applicable trustee, rescind
and annul the declaration and its consequences if (1) The Money Store pays or
deposits with the applicable trustee a sum sufficient to pay:
o all overdue installments of interest on all The Money Store debt
securities;
o the principal of, and any premium on, any debt securities of the
applicable series which have become due other than by that
declaration of acceleration, and interest at the prescribed rates;
o to the extent that payment of this interest is lawful, interest on
overdue installments of interest on each debt security of the
applicable series at the prescribed rates; and
o all sums paid or advanced by the applicable trustee and the reasonable
compensation, expenses, disbursements and advances of the applicable
Trustee, its agents and counsel;
and (2) all Events of Default with respect to debt securities of the applicable
series, other than the nonpayment of the principal of the debt securities of
that series which has become due solely by such declaration of acceleration,
are cured or waived. No rescission, annullment or waiver will affect any
subsequent default or impair any rights resulting from any subsequent default.
(Section 5.02).
Reports by The Money Store. The Money Store must file with each trustee,
annually, an officers' certificate as to The Money Store's compliance with all
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conditions and covenants under the applicable indenture. (Section 12.02). Each
trustee may withhold notice to the holders of a series of The Money Store debt
securities of any default, except payment defaults on the debt securities, if
it considers such withholding to be in the interest of the holders to do so.
(Section 6.02).
Control by Holders. If an Event of Default occurs and is continuing, the
applicable trustee will be under no obligation to exercise any of its rights or
powers under the applicable indenture at the request, order or direction of any
of the holders of the applicable debt securities, unless the holders offer the
applicable trustee reasonable indemnity against the expenses and liabilities
which might be incurred by it in compliance with such request. (Section 5.07).
Subject to these indemnification provisions, the holders of a majority in
principal amount of the debt securities of any series may direct the time,
method and place of conducting any proceeding for any remedy available to the
applicable trustee under the applicable indenture, or exercising any trust or
power conferred on the applicable trustee with respect to the debt securities
of that series as long as such direction does not conflict with law or with the
applicable indenture. (Section 5.12).
Modification or Waiver. Without prior notice to or consent of any
holders, The Money Store and the applicable trustee may modify the applicable
indenture for any of the following purposes:
o to provide for the succession of another corporation to the rights of
The Money Store and the assumption by the successor of the covenants
and obligations of The Money Store in the applicable indenture and in
the debt securities issued under that indenture;
o to add to the covenants of The Money Store for the benefit of the
holders of all or any series of The Money Store debt securities, or
to surrender any right or power conferred in the applicable indenture
upon The Money Store;
o to add any additional Events of Default with respect to all or any
series of The Money Store debt securities;
o to add or change any of the provisions of the applicable indenture in
order to permit or facilitate the issuance of debt securities of any
series in bearer form, or to permit the issuance of debt securities
of any series in uncertificated form, as long as these actions do not
adversely affect the interests of the holders of The Money Store debt
securities of any series in any material respect;
o to change or eliminate any of the provisions of the applicable
indenture, as long as the change or elimination becomes effective
only when there is no debt security outstanding which is entitled to
the benefit of that provision and as to which the modification would
apply;
o to secure the debt securities;
o to supplement any of the provisions of the applicable indenture in
order to permit or facilitate the defeasance and discharge of any
series of debt securities, as long as these actions do not adversely
affect the interests of the holders of the debt securities of that
series or any other series of debt securities issued under the
applicable indenture in any material respect;
o to establish the form or terms of The Money Store debt securities;
o to provide for the acceptance of appointment by a successor trustee
with respect to one or more series of debt securities and to add to
or change any of the provisions of the applicable indenture in order
to provide for or facilitate the administration of the trusts by more
than one trustee;
o to cure any ambiguity, to correct or supplement any provision in the
applicable indenture which may be defective or inconsistent with any
other provision, to eliminate any conflict between the terms of the
applicable indenture and the debt securities or to make any other
provisions with respect to matters or questions arising under the
applicable indenture which will not be inconsistent with any
provision of the applicable indenture, as long as the new provisions
do not adversely affect the interests of the holders of the
outstanding debt securities of any series created under that
indenture prior to the modification in any material respect.
(Section 11.01).
With the written consent of the holders of at least a majority in
principal amount of The Money Store debt securities of each series affected
voting separately, The Money Store and the applicable trustee may modify the
applicable indenture for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of
40
<PAGE>
the applicable indenture or of modifying in any manner the rights of the
holders of The Money Store debt securities. However, no such modification may,
without the consent of the holder of each debt security affected:
o change the maturity of the principal of, or any installment of
interest on, any debt security, or reduce the principal amount or the
interest or any premium payable upon redemption, or change the
maturity of, or change the currency or currencies in which the
principal and any premium or interest is denominated or payable, or
adversely affect the right of repayment or repurchase, if any, at the
option of the holder, or reduce the amount of, or postpone the date
fixed for, any payment under any sinking fund or analogous
provisions, or impair the right to institute suit for the enforcement
of any payment on or after the stated maturity, or limit the
obligation of The Money Store to maintain a paying agency outside the
United States for payments on bearer securities;
o reduce the percentage in principal amount of the debt securities of
any series, the consent of whose holders is required for any
modification, or waiver of compliance or of defaults or Events of
Default and their consequences; or
o with a few exceptions modify any of the provisions of the applicable
indenture relating to modifications and waivers of defaults and
covenants, except to increase the percentage or to provide that other
provisions of the applicable indenture cannot be modified or waived
without the consent of the holder of each debt security of each
series affected.
(Section 11.02).
A modification which changes or eliminates any covenant or other
provision of the applicable indenture with respect to one or more particular
series of The Money Store debt securities, or which modifies the rights of the
holders of The Money Store debt securities with respect to any covenant or
other provision, is deemed not to affect the rights under such indenture of the
holders of The Money Store debt securities of any other series. (Section
11.02).
The holders of at least a majority in principal amount of The Money
Store debt securities of any series may on behalf of all holders of that series
waive, by notice to the applicable trustee and The Money Store, any past
default or Event of Default under the applicable indenture with respect to that
series and its consequences, except a default:
o in the payment of the principal of, or any premium or interest on, any
debt security, or in the payment of any sinking fund installment or
analogous obligation, or
o in respect of a convenant or provision which cannot be modified or
amended without the consent of the holder of each debt security of
that series affected.
Upon any waiver, the applicable default will cease to exist, and any resulting
Event of Default will be deemed to have been cured, but no such waiver will
extend to any subsequent or other default or Event of Default or impair any
rights resulting from any subsequent or other default or Event of Default.
(Section 5.13).
The Money Store may omit to comply with some covenants, including the
covenants relating to the maintenance by The Money Store of its existence,
rights and franchises, if before the time for compliance the holders of at
least a majority in principal amount of debt securities of any series either
waive compliance in that instance or generally waive compliance with the
applicable provisions. However, no waiver may extend to or affect any term,
provision or condition except to the extent waived, and, until the waiver
becomes effective, the obligations of The Money Store and the duties of the
applicable trustee in respect of the applicable provision will remain in full
force and effect. (Section 12.09).
Limitation upon Merger or Consolidation. The Money Store senior
indenture provides that The Money Store may not consolidate with or merge into
any other corporation, or convey all or substantially all of its assets as an
entirety to any person, unless:
o the corporation formed by the consolidation or into which The Money
Store is merged, or the person which acquires or leases all or
substantially all of the assets of The Money Store as an entirety, is
a corporation organized and existing under the laws of the United
States or any state or the District of Columbia and expressly
assumes, by a supplemental indenture, the payment of the principal
of, and any premium and interest on, all The Money Store Senior Notes
and the performance of every covenant in The
41
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Money Store senior indenture on the part of The Money Store;
o immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, has occurred and is continuing; and
o The Money Store has delivered to The Money Store senior trustee an
officers' certificate and an opinion of counsel each stating that the
transaction and the supplemental indenture comply with The Money
Store senior indenture and that all conditions relating to such
transaction have been complied with.
Assets of The Money Store which do not account for at least 50 percent of the
consolidated net income of The Money Store for its most recent fiscal year
ending prior to the consummation of the transaction shall not be deemed to be
all or substantially all of the assets of The Money Store for these purposes.
Limitation upon Liens. The Money Store senior indenture also provides
that The Money Store may not create or assume, except in favor of The Money
Store or any subsidiary, any pledge, lien or encumbrance upon any stock of any
subsidiary directly owned by The Money Store without equally and proportionally
securing The Money Store senior debt securities. For this purpose, "subsidiary"
means a subsidiary which accounted for at least 25 percent of the consolidated
net income of The Money Store for its most recent fiscal year of which all of
the outstanding voting stock, other than directors' qualifying shares, is at
the time, directly or indirectly, owned by The Money Store, or by one or more
subsidiaries.
Neither The Money Store debt securities nor any of The Money Store
indentures:
o contain any other provisions which restrict The Money Store, First
Union or any of their subsidiaries from incurring, assuming or
becoming liable with respect to any indebtedness or other
obligations, whether secured or unsecured, or from paying dividends
or making other distributions on its or their capital stock or
purchasing or redeeming its or their capital stock;
o contain any financial ratios or liquidity levels to which The Money
Store must adhere; or
o contain any provision which requires The Money Store to repurchase,
redeem or modify the terms of The Money Store debt securities upon a
change in control or other events involving The Money Store which may
adversely affect the creditworthiness of The Money Store debt
securities.
The Money Store Subordinated Notes
The Money Store subordinated notes were issued under a subordinated
indenture, dated as of December 1, 1997, between The Money Store and The Bank
of New York, as subordinated trustee. Under a supplemental indenture dated June
30, 1998, First Union guaranteed the payment of the obligations of The Money
Store under The Money Store subordinated debt securities.
Except as expressly limited to The Money Store senior indenture, the
description of The Money store indentures included in " -- The Money Store
Senior Notes; The Money Store Indentures", above, applies to The Money Store
subordinated indenture as well. The following is a description of some
additional provisions of The Money Store subordinated indenture.
The Money Store 7.30% Subordinated Notes
The Money Store 7.30% Subordinated Notes due December 1, 2002 were
issued on December 1, 1997 and will mature on December 1, 2002. The Money Store
7.30% Subordinated Notes bear interest at the rate of 7.30% per year, payable
semiannually on June 1 and December 1 of each year to the registered holders at
the close of business on the preceding May 15 or November 15. The Money Store
7.30% Subordinated Notes are limited to $150 million aggregate principal
amount.
The Money Store 7.95% Subordinated Notes
The Money Store 7.95% Subordinated Notes due December 1, 2007 were
issued on December 1, 1997 and will mature on December 1, 2007. The Money Store
7.95% Subordinated Notes bear interest at the rate of 7.95% per year, payable
semiannually on June 1 and December 1 of each year to the registered holders at
the close of business on the preceding May 15 or November 15. The Money Store
7.95% Subordinated Notes are limited to $100 million aggregate principal
amount.
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The Money Store Subordinated Indenture
Discharge, Legal Defeasance and Covenant Defeasance. Under The Money
Store subordinated indenture, the covenant defeasance option and the legal
defeasance option described under " -- The Money Store Senior Notes; The Money
Store Indentures; Discharge, Legal Defeasance and Covenant Defeasance", above,
will discharge or no longer obligate The Money Store with respect to the
subordination provisions described below under "Subordination".
Event of Default. In addition to the Events of Default described under
" -- The Money Store Senior Notes; The Money Store Indentures; Events of
Default", above, it is an Event of Default with respect to each of The Money
Store subordinated debt securities if a default occurs under any bond,
debenture, note or other evidence of indebtedness for money borrowed by The
Money Store or under any mortgage, indenture or other instrument under which
there may be issued or by which there may be secured or evidenced any
indebtedness for money borrowed by The Money Store or under any guarantee of
payment by The Money Store of indebtedness for money borrowed, whether the
indebtedness or guarantee previously existed or is subsequently created, which
default relates to the obligation to pay the principal of or interest on any
indebtedness or guarantee when due and payable. However, in the case of a
default in the payment of interest, the default must continue for a period of
30 days, and no default under the The Money Store subordinated debt securities
exists unless the amount of the default or defaults, either individually or in
the aggregate, is greater than $15 million.
Modification or Waiver. In addition to the circumstances described under
" -- The Money Store Senior Notes; The Money Store Indentures; Modification or
Waiver", above, and subject to those limitations, The Money Store and the
subordinated trustee may, at any time and from time to time, without prior
notice to or consent of any holders of The Money Store subordinated debt
securities, modify the subordinated indenture to make provision with respect to
any conversion rights of such holders. (Section 11.01). No modification of the
subordinated indenture made with the consent of holders of a majority in
principal amount of The Money Store subordinated debt securities of any series
may adversely affect the rights of any holder of Senior Indebtedness under the
subordination provisions of the subordinated indenture without the consent of
that holder. (Section 11.08).
Subordination. Upon any distribution of assets of The Money Store upon
dissolution, winding up, liquidation or reorganization of The Money Store, the
payment of the principal of, and premium and interest on, The Money Store
subordinated debt securities will be subordinated in right of payment to the
prior payment in full of all Senior Indebtedness (as defined below), including
The Money Store senior debt securities (Sections 16.01 and 16.02), but the
obligation of The Money Store to make payment of principal of, and any premium
or interest on, The Money Store subordinated debt securities will not otherwise
be affected. (Section 16.02). No payment on account of principal or any
premium, sinking funds or interest may be made on The Money Store subordinated
debt securities unless full payment of amounts then due for principal and any
premium sinking funds and interest on Senior Indebtedness has been made or duly
provided for. (Section 16.03). If any payment by The Money Store described in
the previous sentence is received by the subordinated trustee, any paying agent
or the holders of any of The Money Store subordinated debt securities before
all Senior Indebtedness is paid in full, the payment or distribution must be
paid over to the holders of Senior Indebtedness or on their behalf for
application to the payment of all Senior Indebtedness remaining unpaid until
all Senior Indebtedness is paid in full, after giving effect to any payment or
distribution to the holders of Senior Indebtedness. Subject to payment in full
of Senior Indebtedness, the holders of The Money Store subordinated debt
securities are subrogated to the rights of the holders of Senior Indebtedness
to the extent of payments made to the holders of Senior Indebtedness out of the
distributive share of The Money Store subordinated debt securities. (Section
16.02). The subordination provisions of the subordinated indenture do not apply
to money and securities held in trust under the satisfaction and discharge and
the legal defeasance provisions of subordinated indenture. (Sections 4.02 and
15.02).
"Senior Indebtedness" is defined in subordinated indenture as the
principal of, and any premium and unpaid interest on, Indebtedness (as defined
below) whether previously outstanding or subsequently created, incurred,
assumed or guaranteed, for money borrowed, other than the Indebtedness
evidenced by The Money Store subordinated debt securities, unless it is
provided that the Indebtedness is not senior or prior in right of payment to
The Money Store subordinated debt securities or ranks equally with or is
subordinate by its terms in right of payment to The Money Store subordinated
43
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debt securities, and renewals, extensions and modifications of any such
Indebtedness. (Section 1.01 of the subordinated indenture).
"Indebtedness" is defined in the subordinated indenture as:
o any liability of any persons (a) for borrowed money, or (b) evidenced
by a bond, note, debenture or similar instrument (including purchase
money obligations but excluding trade payables), or (c) for the
payment of money relating to a lease that is required to be
classified as a capitalized lease obligation in accordance with
generally accepted accounting principles, or (d) preferred or
preference stock of a subsidiary held by persons other than The Money
Store or a subsidiary;
o any liability of others described in the preceding bullet point that
the person has guaranteed, that is recourse to such person or that is
otherwise its legal liability; and
o any amendment, supplement, modification, deferral, renewal, extension
or refunding of any liability of the types referred to above.
As of December 31, 1998, The Money Store had $6 billion aggregate
principal amount of indebtedness outstanding that qualified as Senior
Indebtedness under the subordinated indenture. The Money Store expects from
time to time to issue additional indebtedness and to incur other obligations
that may constitute Senior Indebtedness under the subordinated indenture.
The Guarantees
Under supplemental indentures, each dated June 30, 1998, to The Money
Store senior indenture and The Money Store subordinated indenture, First Union
has fully and unconditionally guaranteed the due and punctual payment of the
principal of, and any premium and interest on, The Money Store debt securities
when and as it shall become due and payable.
First Union's obligations under the senior guarantee are unsecured and
rank equally in right of payment with all existing and future unsecured and
unsubordinated indebtedness of First Union.
First Union's obligations under the subordinated guarantee are
subordinated in right of payment to First Union's obligations to the holders of
Guarantor Senior Indebtedness (as defined below). No payment under the
subordinated guarantee may be made by First Union unless full payment of
amounts then due for principal of, and any premium, sinking fund payments and
interest on, Guarantor Senior Indebtedness has been made or duly provided for.
No payment under the subordinated guarantee may be made by First Union if, at
the time of the payment or immediately after giving effect to it, there occurs
an event of default with respect to any Guarantor Senior Indebtedness
permitting the holders, or a trustee on behalf of the holders, to accelerate
the maturity, written notice of which has been given to the subordinated
trustee by First Union or to First Union and the subordinated trustee by any
holder or holders, or a trustee on their behalf, of any Guarantor Senior
Indebtedness entitled to accelerate maturity by reason of such event of
default, and such event of default has not been cured or waived.
"Guarantor Senior Indebtedness" is defined in the subordinated guarantee
as the principal of, and any premium and interest on, all indebtedness for
money borrowed, whether previously outstanding or subsequently created, assumed
or incurred, except (a) the subordinated guarantee, (b) Existing Guarantor
Subordinated Indebtedness (as defined in the subordinated guarantee), (c) any
indebtedness which is expressly stated to be junior in right of payment to the
subordinated guarantee, and (d) any indebtedness which is expressly stated to
be not superior in right of payment to the Subordinated Guarantee or to rank
equal in right of payment with the Subordinated Guarantee, and any deferrals,
renewals or extensions of any of these.
As of December 31, 1998, First Union had approximately $6 billion
aggregate principal amount of indebtedness that qualified as Guarantor Senior
Indebtedness under the subordinated guarantee. First Union expects to issue
additional indebtedness and to incur other obligations that may constitute
Guarantor Senior Indebtedness under the subordinated guarantee.
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AVAILABLE INFORMATION
First Union Corporation files reports, proxy statements and other
information with the Securities and Exchange Commission. Information filed with
the Commission by First Union can be inspected and copied at the Public
Reference Room maintained by the Commission and at the following Regional
Offices of the Commission:
Public Reference Room
450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549
New York Regional Office
7 World Trade Center
Suite 1300
New York, N.Y. 10048
Chicago Regional Office
Citicorp Center
500 West Madison Street
Suite 1400
Chicago, IL 60621
You may also obtain copies of this information by mail from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. Further information on the operation of the
Commission's Public Reference Room in Washington, D.C. can be obtained by
calling the Commission at 1-800-SEC-0330.
The Commission also maintains an Internet site that contains reports,
proxy statements and other information about issuers, such as First Union, who
file electronically with the Commission. The address of that site is
http://www.sec.gov.
First Union's common stock is listed on the New York Stock Exchange, and
reports, proxy statements and other information concerning First Union can also
be inspected at the offices of such Exchange at 20 Broad Street, New York, N.Y.
10005. More information may be obtained by contacting First Union's Internet
site. The address of that site is http://www.firstunion.com.
This prospectus is part of a registration statement that First Union has
filed with the Commission. The full registration statement may be obtained from
the Commission or First Union, as indicated below. Forms of the various
indentures and other documents establishing the terms of the debt securities
are filed as exhibits to the registration statement. Statements in this
prospectus about such documents are summaries. You should refer to the actual
documents for a more complete description of the relevant matters.
The rules of the Commission allow First Union to "incorporate by
reference" information into this prospectus, which means that First Union can
disclose important information to you by referring you to another document
filed separately with the Commission. The information incorporated by reference
is deemed to be a part of this prospectus, and later information that First
Union files with the Commission will automatically update and supersede that
information. This prospectus incorporates by reference the following documents
that have been previously filed with the Commission. These documents contain
important information about First Union.
o Annual Report on Form 10-K for the year ended December 31, 1998
o Current Report on Form 8-K dated:
o January 26, 1999
o March 19, 1999
First Union is also incorporating by reference additional documents that
will be filed with the Commission pursuant to Sections 13(a), 13(c), 14 or
14(d) of the Securities Exchange Act of 1934, as amended, between the date of
this prospectus and the termination of the offering of the debt securities.
First Union will provide without charge to each person, including any
beneficial owner, to whom a copy of this prospectus has been delivered a copy
of any and all of these filings. You may request a copy of these filings by
writing or telephoning First Union at:
Corporate Relations
First Union Corporation
One First Union Center
Charlotte, N.C. 28288-0206
Telephone: (704) 374-6782
First Union has not included or incorporated by reference any separate
financial statements of The Money Store. First Union does not consider those
financial statements to be material to holders of The Money Store Debt
Securities and the Guarantees because The Money Store is a wholly-owned
subsidiary of First Union and The Money Store Debt Securities are
unconditionally guaranteed by First Union. Because of these reasons, The Money
Store is no longer required to file periodic reports with the Commission.
45
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EXPERTS
The consolidated balance sheets of First Union as of December 31, 1998
and 1997, 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, 1998, included in First Union's 1998 Annual Report to
Stockholders which is included in First Union's Annual Report on Form 10-K for
the year ended December 31, 1998, and incorporated by reference in this
prospectus, have been incorporated by reference in this prospectus in reliance
upon the report of KPMG LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing.
PLAN OF DISTRIBUTION
This prospectus will be used by First Union Capital Markets Corp., an
affiliate of First Union, in connection with offers and sales related to
market-making and other transactions in the debt securities. First Union
Capital Markets Corp. may act as principal or agent in such transactions. Sales
will be made at prices relating to prevailing market prices at the time of sale
or otherwise.
VALIDITY OF SECURITIES
The validity of the assumptions of the debt securities and the
guarantees, as applicable, has been passed upon for First Union by Marion A.
Cowell, Jr., Esq., Executive Vice President, Secretary and General Counsel of
First Union. Mr. Cowell owns shares of First Union's Common Stock and holds
options to purchase additional shares of such Common Stock.
46
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PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
<TABLE>
<S> <C>
Registration fee ........................................ $ 100
Printing and engraving expenses ......................... 25,000
Accounting fees ......................................... 15,000
Legal fees and expenses ................................. 100,000
Blue sky and legal investment fees and expenses ......... 7,500
Miscellaneous ........................................... 10,400
--------
Total ......................................................... $170,000
========
</TABLE>
All expenses are estimated except the registration fee.
Item 15. Indemnification of Directors and Officers.
Sections 55-8-50 through 55-8-58 of the revised North Carolina Business
Corporation Act (the "NCBCA"), which became effective on July 1, 1990, 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 against reasonable expenses
who is wholly successful in his defense of a proceeding to which he is a party
because of his status as such, unless limited by the articles of incorporation,
and (ii) a corporation may indemnify a director or officer if he 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 or liable on the basis of
receiving a personal benefit, the corporation may not indemnify him. 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 the indemnification of the
Corporation's directors and executive officers by the Corporation against
liabilities arising out of his 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 of Incorporation provides 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 agreements which may be entered into by the Corporation, certain
controlling persons, directors and officers of the Corporation may be entitled
to indemnification by underwriters and agents who participate in the
distribution of Debt Securities covered by the Registration Statement against
certain liabilities, including liabilities under the Securities Act.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise (other than
insurance), the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
insurance and the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-1
<PAGE>
Item 16. Exhibits.
<TABLE>
<CAPTION>
Exhibit No. Description
- ---------------------------- ---------------------------------------------------------------------------------------------
<S> <C> <C>
(4)(a)(i) -- Copy of the CoreStates Subordinated Indenture. (Incorporated by reference to Exhibit 4.2 to
CoreStates' Current Report on Form 8-K dated January 29, 1991, to Exhibit 4 to
CoreStates' Current Report on Form 8-K dated April 20, 1993, and to Exhibit 4.5 to
Registrant's Annual Report on Form 10-K for the year ended December 31, 1994.)
(4)(a)(ii) -- Copy of the assumption of the CoreStates Subordinated Indenture.*
(4)(a)(iii) -- Specimen of CoreStates Subordinated Medium-Term Note. (Incorporated by reference to
Exhibit 4.5 to CoreStates' Current Report on Form 8-K dated January 29, 1991.)
(4)(a)(iv) -- Specimen of CoreStates 9 5/8% Subordinated Note. (Incorporated by reference to Exhibit 4.7
to CoreStates' Current Report on Form 8-K dated January 29, 1991.)
(4)(a)(v) -- Specimen of CoreStates 9 3/8% Subordinated Note. (Incorporated by reference to Exhibit (4)
to CoreStates' Current Report on Form 8-K dated April 21, 1991.)
(4)(a)(vi) -- Specimen of CoreStates 6 5/8% Subordinated Note. (Incorporated by reference to Exhibit 4 to
CoreStates' Current Report on Form 8-K dated March 18, 1993.)
(4)(a)(vii) -- Specimen of CoreStates 5 7/8% Subordinated Note. (Incorporated by reference to Exhibit 4 of
CoreStates' Current Report on Form 8-K dated October 21, 1993.)
(4)(a)(viii) -- Specimen of CoreStates Subordinated Medium-Term Note. (Incorporated by reference to
Exhibit 4(f) to CoreStates' Registration Statement No. 33-54049.)
(4)(a)(ix) -- Form of CoreStates Subordinated Medium-Term Note. (Incorporated by reference to
Exhibit 4(f)(5) to CoreStates' Registration Statement Nos. 333-2297 and 33-54049.)
(4)(b)(i) -- Copy of the CoreStates Senior Indenture. (Incorporated by reference to Exhibit 4.1 to
CoreStates' Current Report on Form 8-K dated January 29, 1991.)
(4)(b)(ii) -- Copy of the assumption of the CoreStates Senior Indenture.*
(4)(b)(iii) -- Specimen of CoreStates Senior Medium-Term Note. (Incorporated by reference to Exhibit 4.3
to CoreStates' Current Report on Form 8-K dated January 29, 1991.)
(4)(b)(iv) -- Specimen of CoreStates Senior Medium-Term Note. (Incorporated by reference to
Exhibit 4(d) to CoreStates' Registration Statement No. 33-54049.)
(4)(b)(v) -- Form of CoreStates Senior Medium-Term Note. (Incorporated by reference to Exhibit 4
(d)(5) to CoreStates' Registration Statement Nos. 333-2297 and 33-54049.)
(4)(c)(i) -- Copy of the Meridian Subordinated Indenture. (Incorporated by reference to Exhibit 4.1 to
Meridian's Registration Statement No. 33-45562.)
(4)(c)(ii) -- Copy of the assumption of the Meridian Subordinated Indenture.*
(4)(d)(i) -- Copy of the Meridian Senior Indenture. (Incorporated by reference to Exhibit 4.2 to
Meridian's Registration Statement No. 33-45562.)
(4)(d)(ii) -- Copy of the assumption of the Meridian Senior Indenture.*
(4)(e)(i) -- Copy of the First Fidelity Subordinated Indenture. (Incorporated by reference to Exhibit 4.3
to First Fidelity's Registration Statement No. 33-21480 and Exhibit No. 4.2 to
Post-Effective Amendment No. 1 to Registration Statement No. 33-21480.)
(4)(e)(ii) -- Copy of the first assumption of the First Fidelity Subordinated Indenture.*
(4)(e)(iii) -- Copy of the second assumption of the First Fidelity Subordinated Indenture.*
(4)(f)(i) -- Copy of the TMS Subordinated Indenture. (Incorporated by reference to Exhibit 4.1,
Exhibit 4.2 and Exhibit 4.3 to TMS's Current Report on Form 8-K dated December 1,
1997, and to Exhibit 4.4 to TMS's Registration Statement No. 33-98972.)
(4)(f)(ii) -- Copy of the Subordinated Guarantee.*
(4)(f)(iii) -- Form of TMS Subordinated Note. (Incorporated by reference to Exhibit 4.4 to TMS's
Registration Statement No. 33-98972.)
(4)(f)(iv) -- Form of TMS 7.30% Subordinated Note. (Incorporated by reference to Exhibit 4.2 to TMS's
Current Report on Form 8-K dated December 1, 1997.)
(4)(f)(v) -- Form of TMS 7.95% Subordinated Note. (Incorporated by reference to Exhibit 4.3 to TMS's
Current Report on Form 8-K dated December 1, 1997.)
(4)(g)(i) -- Copy of The TMS Senior Indenture. (Incorporated by reference to Exhibit 4.1, Exhibit 4.2
and Exhibit 4.3 to TMS's Current Report on Form 8-K dated April 15, 1997 and to
Exhibit 4.2 to TMS's Registration Statement No. 333-24807.)
(4)(g)(ii) -- Copy of the Senior Guarantee.*
(4)(g)(iii) -- Form of TMS Senior Note. (Incorporated by reference to Exhibit 4.2 to TMS's Registration
Statement No. 333-24807.)
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
- -------------------------- ----------------------------------------------------------------------------------------------
<S> <C> <C>
(4)(g)(iv) -- Form of TMS 8.05% Senior Note. (Incorporated by reference to Exhibit 4.2 to TMS's
Current Report on Form 8-K dated April 15, 1997.)
(4)(g)(v) -- Form of TMS 8.375% Senior Note. (Incorporated by reference to Exhibit 4.3 to TMS's
Current Report on Form 8-K dated April 15, 1997.)
(4)(h)(i) -- Copy of the Signet Subordinated Indenture. (Incorporated by reference to Exhibit 4(f) to
Signet's Registration Statement No. 33-4491.)
(4)(h)(ii) -- Copy of the assumption of the Signet Subordinated Indenture.*
(4)(i)(i) -- Copy of the Dominion Subordinated Indenture. (Incorporated by reference to Exhibit 4 to
Amendment No. 1 to Dominion's Registration Statement No. 33-14858.)
(4)(i)(ii) -- Copy of the first assumption of the Dominion Subordinated Indenture.*
(4)(i)(iii) -- Copy of the second assumption of the Dominion Subordinated Indenture.*
(4)(j)(i) -- Copy of the Florida National Subordinated Indenture. (Incorporated by reference to Exhibit
4(a) to Florida National's Registration Statement No. 33-13757.)
(4)(j)(ii) -- Copy of the first assumption of the Florida National Subordinated Indenture.*
(4)(j)(iii) -- Copy of the second assumption of the Florida National Subordinated Indenture.*
(4)(j)(iv) -- Form of Florida National Capital Notes. (Incorporated by reference to Exhibit 4(b) to Florida
National's Registration Statement No. 33-13757.
(5) -- Opinion of Marion A. Cowell, Jr., Esq.*
(12) -- Computations of Consolidated Ratios of Earnings to Fixed Charges. (Incorporated by
reference to Exhibit (12) to the Corporation's 1998 Annual Report on Form 10-K.)
(23)(a) -- Consent of KPMG LLP.
(23)(b) -- Consent of Marion A. Cowell, Jr., Esq. (Included in Exhibit (5).)
(24) -- Power of Attorney. (Incorporated by reference to Exhibit (24) to the Corporation's
Registration Statement No. 333-58299.)
(25)(a) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the CoreStates
Subordinated Trustees. (Incorporated by reference to Exhibit 26(b) to CoreStates'
Registration Statement No. 33-57034 and Exhibit 26(b) to CoreStates' Registration
Statement No. 33-54049.)
(25)(b) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the CoreStates
Senior Trustee. (Incorporated by reference to Exhibit 25 to CoreStates' Registration
Statement No. 333-02297.)
(25)(c) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the Meridian
Subordinated Trustee. (Incorporated by reference to Exhibit 26.1 to Meridian's
Registration Statement No. 33-58690.)
(25)(d) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the Meridian
Senior Trustee. (Incorporated by reference to Exhibit 26.2 to Meridian's Registration
Statement No. 33-58690.)
(25)(e) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the First Fidelity
Subordinated Trustee. (Incorporated by reference to Exhibit 26.1 to First Fidelity's
Registration Statement No. 33-21480.)
(25)(f) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the TMS
Subordinated Trustee.*
(25)(g) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the TMS Senior
Trustee. (Incorporated by reference to Exhibit 25.1 to TMS's Registration Statement
No. 333-24807.)
(25)(h) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the Signet
Subordinated Trustee. (Incorporated by reference to Exhibit 26(b) to Signet's Registration
Statement No. 33-28089.)
(25)(i) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the Dominion
Subordinated Trustee.*
(25)(j) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the Florida
National Subordinated Trustee. (Incorporated by reference to Exhibit 26 to Florida
National's Registration Statement No. 33-13757.)
(27) -- The Corporation's Financial Data Schedule. (Incorporated by reference to Exhibit (27) to
the Corporation's 1998 Annual Report on Form 10-K.)
</TABLE>
- ----------
* Previously Filed.
II-3
<PAGE>
Item 17. Undertakings.
A. Undertakings to Update Annually.
(1) The undersigned registrant hereby undertakes:
(A) 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 the 1933 (as amended, the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20 percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (1)(A)(i) and (1)(A)(ii) do not apply
if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 (as amended, the
"Exchange Act") that are incorporated by reference in the registration
statement.
(B) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(C) 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.
(2) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant, the registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses in the defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 2 to the Registration Statement on Form S-3 (No. 333-70489) to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Charlotte, State of North Carolina, on March 31, 1999.
FIRST UNION CORPORATION
By: MARION A. COWELL, JR.
---------------------------------------
Marion A. Cowell, Jr.
Executive Vice President, Secretary
and General Counsel
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the Registration Statement on Form S-3 (No. 333-70489) has been signed
by the following persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Capacity
- ------------------------------------------ -------------------------------------
<S> <C>
EDWARD E. CRUTCHFIELD* Chairman and Chief Executive Officer
------------------------------------- and Director
Edward E. Crutchfield
ROBERT T. ATWOOD* Executive Vice President and Chief
------------------------------------- Financial Officer
Robert T. Atwood
JAMES H. HATCH* Senior Vice President and Corporate
------------------------------------- Controller (Principal Accounting
James H. Hatch Officer)
EDWARD E. BARR* Director
-------------------------------------
Edward E. Barr
Director
-------------------------------------
G. Alex Bernhardt
W. WALDO BRADLEY* Director
-------------------------------------
W. Waldo Bradley
ROBERT J. BROWN* Director
-------------------------------------
Robert J. Brown
A. DANO DAVIS* Director
-------------------------------------
A. Dano Davis
Director
-------------------------------------
Norwood H. Davis
R. STUART DICKSON* Director
-------------------------------------
R. Stuart Dickson
B. F. DOLAN* Director
-------------------------------------
B. F. Dolan
RODDEY DOWD, SR.* Director
-------------------------------------
Roddey Dowd, Sr.
Director
-------------------------------------
John R. Georgius
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
Signature Capacity
- ------------------------------------------------- ---------
<S> <C>
ARTHUR M. GOLDBERG* Director
-------------------------------------
Arthur M. Goldberg
WILLIAM H. GOODWIN, JR.* Director
-------------------------------------
William H. Goodwin, Jr.
FRANK M. HENRY* Director
-------------------------------------
Frank M. Henry
ERNEST E. JONES* Director
-------------------------------------
Ernest E. Jones
TERRENCE A. LARSEN* Director
-------------------------------------
Terrence A. Larsen
HERBERT LOTMAN* Director
-------------------------------------
Herbert Lotman
RADFORD D. LOVETT* Director
-------------------------------------
Radford D. Lovett
MACKEY J. MCDONALD* Director
-------------------------------------
Mackey J. McDonald
MALCOLM S. MCDONALD* Director
-------------------------------------
Malcom S. McDonald
PATRICIA A. MCFATE* Director
-------------------------------------
Patricia A. McFate
JOSEPH NEUBAUER* Director
-------------------------------------
Joseph Neubauer
RANDOLPH N. REYNOLDS* Director
-------------------------------------
Randolph N. Reynolds
JAMES M. SEABROOK* Director
-------------------------------------
James M. Seabrook
Director
-------------------------------------
Ruth G. Shaw
CHARLES M. SHELTON, SR.* Director
-------------------------------------
Charles M. Shelton, Sr.
LANTY L. SMITH* Director
-------------------------------------
Lanty L. Smith
RAYMOND W. SMITH* Director
-------------------------------------
Raymond W. Smith
*By Marion A. Cowell, Jr., Attorney-in-Fact
MARION A. COWELL, JR.
-------------------------------------
Marion A. Cowell, Jr.
</TABLE>
II-6
<PAGE>
Date: March 31, 1999
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 2 to the Registration Statement on Form S-3 (No. 333-70489) to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Charlotte, State of North Carolina, on March 31, 1999.
THE MONEY STORE, INC.
By:/s/ MARION A. COWELL, JR.
-----------------------------
Marion A. Cowell, Jr.
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 2 to the Registration Statement on Form S-3 (No. 333-70489)
has been signed by the following persons in the capacities and on the date
indicated.
/s/ Marc J. Turtletaub President, CEO and Director
- ----------------------------
/s/ Robert T. Atwood Executive Vice President and Chief
- ---------------------------- Financial Officer
/s/ James T. Hatch Senior Vice President and
- ---------------------------- Principal Accounting Officer
/s/ Malcolm T. Murray, Jr. Director
- ----------------------------
/s/ James E. Maynor Director
- ----------------------------
/s/ Jack M. Antonini Director
- ----------------------------
/s/ Christopher Oddleifson Director
- ----------------------------
Date: March 31, 1999
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ---------------------------- ------------------------------------------------------------------------------------------------
<S> <C> <C>
(4)(a)(i) -- Copy of the CoreStates Subordinated Indenture. (Incorporated by reference to Exhibit 4.2 to
CoreStates' Current Report on Form 8-K dated January 29, 1991, to Exhibit 4 to
CoreStates' Current Report on Form 8-K dated April 20, 1993, and to Exhibit 4.5 to
Registrant's Annual Report on Form 10-K for the year ended December 31, 1994.)
(4)(a)(ii) -- Copy of the assumption of the CoreStates Subordinated Indenture.*
(4)(a)(iii) -- Specimen of CoreStates Subordinated Medium-Term Note. (Incorporated by reference to
Exhibit 4.5 to CoreStates' Current Report on Form 8-K dated January 29, 1991.)
(4)(a)(iv) -- Specimen of CoreStates 9 5/8% Subordinated Note. (Incorporated by reference to Exhibit 4.7
to CoreStates' Current Report on Form 8-K dated January 29, 1991.)
(4)(a)(v) -- Specimen of CoreStates 9 3/8% Subordinated Note. (Incorporated by reference to Exhibit (4)
to CoreStates' Current Report on Form 8-K dated April 21, 1991.)
(4)(a)(vi) -- Specimen of CoreStates 6 5/8% Subordinated Note. (Incorporated by reference to Exhibit 4 to
CoreStates' Current Report on Form 8-K dated March 18, 1993.)
(4)(a)(vii) -- Specimen of CoreStates 5 7/8% Subordinated Note. (Incorporated by reference to Exhibit 4
of CoreStates' Current Report on Form 8-K dated October 21, 1993.)
(4)(a)(viii) -- Specimen of CoreStates Subordinated Medium-Term Note. (Incorporated by reference to
Exhibit 4(f) to CoreStates' Registration Statement No. 33-54049.)
(4)(a)(ix) -- Form of CoreStates Subordinated Medium-Term Note. (Incorporated by reference to
Exhibit 4(f)(5) to CoreStates' Registration Statement Nos. 333-2297 and 33-54049.)
(4)(b)(i) -- Copy of the CoreStates Senior Indenture. (Incorporated by reference to Exhibit 4.1 to
CoreStates' Current Report on Form 8-K dated January 29, 1991.)
(4)(b)(ii) -- Copy of the assumption of the CoreStates Senior Indenture.*
(4)(b)(iii) -- Specimen of CoreStates Senior Medium-Term Note. (Incorporated by reference to
Exhibit 4.3 to CoreStates' Current Report on Form 8-K dated January 29, 1991.)
(4)(b)(iv) -- Specimen of CoreStates Senior Medium-Term Note. (Incorporated by reference to
Exhibit 4(d) to CoreStates' Registration Statement No. 33-54049.)
(4)(b)(v) -- Form of CoreStates Senior Medium-Term Note. (Incorporated by reference to
Exhibit 4(d)(5) to CoreStates' Registration Statement Nos. 333-2297 and 33-54049.)
(4)(c)(i) -- Copy of the Meridian Subordinated Indenture. (Incorporated by reference to Exhibit 4.1 to
Meridian's Registration Statement No. 33-45562.)
(4)(c)(ii) -- Copy of the assumption of the Meridian Subordinated Indenture.*
(4)(d)(i) -- Copy of the Meridian Senior Indenture. (Incorporated by reference to Exhibit 4.2 to
Meridian's Registration Statement No. 33-45562.)
(4)(d)(ii) -- Copy of the assumption of the Meridian Senior Indenture.*
(4)(e)(i) -- Copy of the First Fidelity Subordinated Indenture. (Incorporated by reference to Exhibit 4.3 to
First Fidelity's Registration Statement No. 33-21480 and Exhibit No. 4.2 to Post-Effective
Amendment No. 1 to Registration Statement No. 33-21480.)
(4)(e)(ii) -- Copy of the first assumption of the First Fidelity Subordinated Indenture.*
(4)(e)(iii) -- Copy of the second assumption of the First Fidelity Subordinated Indenture.*
(4)(f)(i) -- Copy of the TMS Subordinated Indenture. (Incorporated by reference to Exhibit 4.1,
Exhibit 4.2 and Exhibit 4.3 to TMS's Current Report on Form 8-K dated December 1,
1997, and to Exhibit 4.4 to TMS's Registration Statement No. 33-98972.)
(4)(f)(ii) -- Copy of the Subordinated Guarantee.*
(4)(f)(iii) -- Form of TMS Subordinated Note. (Incorporated by reference to Exhibit 4.4 to TMS's
Registration Statement No. 33-98972.)
(4)(f)(iv) -- Form of TMS 7.30% Subordinated Note. (Incorporated by reference to Exhibit 4.2 to
TMS's Current Report on Form 8-K dated December 1, 1997.)
(4)(f)(v) -- Form of TMS 7.95% Subordinated Note. (Incorporated by reference to Exhibit 4.3 to
TMS's Current Report on Form 8-K dated December 1, 1997.)
(4)(g)(i) -- Copy of the TMS Senior Indenture. (Incorporated by reference to Exhibit 4.1, Exhibit 4.2
and Exhibit 4.3 to TMS's Current Report on Form 8-K dated April 15, 1997 and to
Exhibit 4.2 to TMS's Registration Statement No. 333-24807.)
(4)(g)(ii) -- Copy of the Senior Guarantee.*
(4)(g)(iii) -- Form of TMS Senior Note. (Incorporated by reference to Exhibit 4.2 to TMS's Registration
Statement No. 333-24807.)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
- -------------------------- ----------------------------------------------------------------------------------------------
<S> <C> <C>
(4)(g)(iv) -- Form of TMS 8.05% Senior Note. (Incorporated by reference to Exhibit 4.2 to TMS's
Current Report on Form 8-K dated April 15, 1997.)
(4)(g)(v) -- Form of TMS 8.375% Senior Note. (Incorporated by reference to Exhibit 4.3 to TMS's
Current Report on Form 8-K dated April 15, 1997.)
(4)(h)(i) -- Copy of the Signet Subordinated Indenture. (Incorporated by reference to Exhibit 4(f) to
Signet's Registration Statement No. 33-4491.)
(4)(h)(ii) -- Copy of the assumption of the Signet Subordinated Indenture.*
(4)(i)(i) -- Copy of the Dominion Subordinated Indenture. (Incorporated by reference to Exhibit 4 to
Amendment No. 1 to Dominion's Registration Statement No. 33-14858.)
(4)(i)(ii) -- Copy of the first assumption of the Dominion Subordinated Indenture.*
(4)(i)(iii) -- Copy of the second assumption of the Dominion Subordinated Indenture.*
(4)(j)(i) -- Copy of the Florida National Subordinated Indenture. (Incorporated by reference to Exhibit
4(a) to Florida National's Registration Statement No. 33-13757.)
(4)(j)(ii) -- Copy of the first assumption of the Florida National Subordinated Indenture.*
(4)(j)(iii) -- Copy of the second assumption of the Florida National Subordinated Indenture.*
(4)(j)(iv) -- Form of Florida National Capital Notes. (Incorporated by reference to Exhibit 4(b) to
Florida National's Registration Statement No. 33-13757.)
(5) -- Opinion of Marion A. Cowell, Jr., Esq.*
(12) -- Computations of Consolidated Ratios of Earnings to Fixed Charges. (Incorporated by
reference to Exhibit (12) to the Corporation's 1998 Annual Report on Form 10-K.)
(23)(a) -- Consent of KPMG LLP.*
(23)(b) -- Consent of Marion A. Cowell, Jr., Esq. (Included in Exhibit (5).)
(24) -- Power of Attorney. (Incorporated by reference to Exhibit (24) to the Corporation's
Registration Statement No. 333-58299.)
(25)(a) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the CoreStates
Subordinated Trustees. (Incorporated by reference to Exhibit 26(b) to CoreStates'
Registration Statement No. 33-57034 and Exhibit 26(b) to CoreStates' Registration
Statement No. 33-54049.)
(25)(b) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the CoreStates
Senior Trustee. (Incorporated by reference to Exhibit 25 to CoreStates' Registration
Statement No. 333-02297.)
(25)(c) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the Meridian
Subordinated Trustee. (Incorporated by reference to Exhibit 26.1 to Meridian's
Registration Statement No. 33-58690.)
(25)(d) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the Meridian
Senior Trustee. (Incorporated by reference to Exhibit 26.2 to Meridian's Registration
Statement No. 33-58690.)
(25)(e) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the First Fidelity
Subordinated Trustee. (Incorporated by reference to Exhibit 26.1 to First Fidelity's
Registration Statement No. 33-21480.)
(25)(f) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the TMS
Subordinated Trustee.*
(25)(g) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the TMS Senior
Trustee. (Incorporated by reference to Exhibit 25.1 to TMS's Registration Statement
No. 333-24807.)
(25)(h) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the Signet
Subordinated Trustee. (Incorporated by reference to Exhibit 26(b) to Signet's Registration
Statement No. 33-28089.)
(25)(i) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the Dominion
Subordinated Trustee.*
(25)(j) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the Florida
National Subordinated Trustee. (Incorporated by reference to Exhibit 26 to Florida
National's Registration Statement No. 33-13757.)
(27) -- The Corporation's Financial Data Schedule. (Incorporated by reference to Exhibit (27) to
the Corporation's 1998 Annual Report on Form 10-K.)
</TABLE>
- ----------
* Previously Filed.
