<PAGE>
FILED PURSUANT TO RULE 424(b)(4)
REGISTRATION NO. 33-63057
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED DECEMBER 6, 1995)
4,000,000 PREFERRED SECURITIES
GREAT WESTERN FINANCIAL TRUST I
8 1/4% TRUST ORIGINATED PREFERRED SECURITIES (SM) ("TOPrS (SM)")
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
GREAT WESTERN FINANCIAL CORPORATION
--------------
The 8 1/4% Trust Originated Preferred Securities (the "Preferred
Securities") offered hereby represent preferred undivided beneficial interests
in the assets of Great Western Financial Trust I, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"). Great Western
Financial Corporation, a Delaware corporation ("GWFC"), will own all the
common securities (the "Common Securities" and, together with the Preferred
Securities, the "Trust Securities") representing undivided beneficial
interests in the assets of the Trust. The Trust exists for the sole purpose of
issuing the Preferred Securities and Common Securities and investing the
proceeds thereof in an equivalent amount of 8 1/4% Subordinated Deferrable
Interest Notes due 2025 (the "Subordinated Notes") of GWFC. The amount of
interest payable on the Subordinated Notes may be reduced under the limited
circumstances (a "Regulatory Event") described under "Description of the
Offered Preferred Securities--Regulatory Event Distribution or Conversion."
Upon an event of a default under the Declaration (as defined herein), the
holders of Preferred Securities will have a preference over the holders of the
Common Securities with respect to payments in respect of distributions and
payments upon redemption, liquidation and otherwise.
(CONTINUED ON NEXT PAGE)
--------------
SEE "RISK FACTORS" COMMENCING ON PAGE S-4 FOR CERTAIN INFORMATION RELEVANT
TO AN INVESTMENT IN THE PREFERRED SECURITIES, INCLUDING THE PERIOD AND
CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS OF DISTRIBUTIONS MAY BE DEFERRED
ON THE PREFERRED SECURITIES AND ANY SUBORDINATED NOTES OR ADJUSTED
SUBORDINATED NOTES THAT MAY BE ISSUED IN EXCHANGE THEREFOR AND THE RELATED
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF ANY SUCH DEFERRAL.
The Preferred Securities have been approved for listing on the New York
Stock Exchange, Inc. (the "New York Stock Exchange"). Trading of the Preferred
Securities on the New York Stock Exchange is expected to commence within a 30-
day period after the initial delivery of the Preferred Securities. See
"Underwriting."
--------------
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO THE TRUST
OFFERING PRICE(1) COMMISSION(2) (3)(4)
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Preferred Securi-
ty.................... $25.00 (3) $25.00
- ------------------------------------------------------------------------------
Total.................. $100,000,000 (3) $100,000,000
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Plus accrued distributions, if any, from December 11, 1995.
(2) GWFC and the Trust have agreed to indemnify the several Underwriters
against certain liabilities, including liabilities under the Securities
Act of 1933, as amended. See "Underwriting."
(3) In view of the fact that the proceeds of the sale of Preferred Securities
will be invested in Subordinated Notes of GWFC, GWFC has agreed to pay the
Underwriters as compensation ("Underwriters' Compensation") for their
arranging the investment therein of such proceeds $.7875 per Preferred
Security (or $3,150,000 in the aggregate); provided that such compensation
for sales of 10,000 or more Preferred Securities to a single purchaser
will be $.50 per Preferred Security. Therefore, to the extent of such
sales, the actual amount of Underwriters' Compensation will be less than
the aggregate amount specified in the preceding sentence. See
"Underwriting."
(4) Expenses of the offering which are payable by GWFC are estimated to be
$225,000.
--------------
The Preferred Securities offered hereby are offered severally by the
Underwriters, as specified herein, subject to receipt and acceptance by them
and subject to their right to reject any order in whole or in part. It is
expected that delivery of the Preferred Securities will be made only in book-
entry form through the facilities of The Depository Trust Company, on or about
December 11, 1995.
--------------
MERRILL LYNCH & CO. GOLDMAN, SACHS & CO.
BEAR, STEARNS & CO. INC.
DEAN WITTER REYNOLDS INC.
SMITH BARNEY INC.
--------------
The date of this Prospectus Supplement is December 6, 1995.
(SM)"Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
<PAGE>
(continued from previous page)
Holders of the Preferred Securities are entitled to receive cumulative cash
distributions at an annual rate of 8 1/4% of the liquidation amount of $25 per
Preferred Security ("distributions"), accruing from the date of original
issuance and payable quarterly in arrears on March 31, June 30, September 30
and December 31 of each year, commencing December 31, 1995 (each a
"Distribution Date"). The payment of distributions out of moneys held by the
Trust and payments on liquidation of the Trust or the redemption of Preferred
Securities, as set forth below, are guaranteed by GWFC (the "Guarantee") to
the extent the Trust has funds available therefor as described under
"Description of Guarantee" in the accompanying Prospectus. The obligations of
GWFC under the Guarantee are subordinate and junior in right of payment to all
other liabilities of GWFC and pari passu with the most senior preferred or
preference stock issued, from time to time, if any, by GWFC. The obligations
of GWFC under the Subordinated Notes are subordinate and junior in right of
payment to all present and future Senior Indebtedness (as defined herein) of
GWFC, which aggregated approximately $673 million at September 30, 1995, and
rank pari passu with GWFC's other general unsecured creditors. In addition,
because GWFC is a holding company, its obligations under the Guarantee and the
Subordinated Notes will be effectively subordinated to all existing and future
liabilities of its subsidiaries. At September 30, 1995, the subsidiaries of
GWFC had total liabilities of approximately $41.2 billion.
The distribution rate and the distribution and other payment dates for the
Preferred Securities will correspond to the interest rate and interest and
other payment dates on the Subordinated Notes, which will be the sole assets
of the Trust. As a result, if principal or interest is not paid on the
Subordinated Notes, no amounts will be paid on the Preferred Securities. If
GWFC does not make principal or interest payments on the Subordinated Notes,
the Trust will not have sufficient funds to make distributions on the
Preferred Securities, in which event the Guarantee will not apply to such
distributions until the Trust has sufficient funds available therefor.
GWFC has the right to defer payments of interest on the Subordinated Notes
by extending the interest payment period on the Subordinated Notes at any time
for up to 20 consecutive quarters (each an "Extension Period"). If interest
payments are so deferred, distributions will also be deferred. During such
Extension Period, distributions will continue to accrue with interest thereon
(to the extent permitted by applicable law) at the then applicable annual rate
compounded quarterly, and during any Extension Period, holders of Preferred
Securities will be required to include deferred interest income in their gross
income for United States federal income tax purposes in advance of receipt of
the cash distributions with respect to such deferred interest payments. There
could be multiple Extension Periods of varying lengths throughout the term of
the Subordinated Notes and hence on the Preferred Securities. Extension of the
interest payment period will not extend the maturity date of the Subordinated
Notes. See "Risk Factors--Option to Extend Interest Payment Period,"
"Description of the Subordinated Notes--Option to Extend Interest Payment
Period" and "Certain Federal Income Tax Consequences--Original Issue
Discount."
The Subordinated Notes are redeemable by GWFC, in whole or in part, from
time to time, on or after December 31, 2000, or at any time in certain
circumstances upon the occurrence of a Tax Event (as defined herein) or in
whole for a limited time upon the occurrence of a Regulatory Redemption Event
(as defined herein). If GWFC redeems Subordinated Notes, the Trust must redeem
Trust Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Subordinated Notes to be redeemed at $25 per Trust
Security plus accrued and unpaid distributions thereon (the "Redemption
Price") to the date fixed for redemption. See "Description of the Offered
Preferred Securities--Mandatory Redemption." The Trust Securities will be
redeemed upon maturity of the Subordinated Notes. The Subordinated Notes
mature on December 31, 2025, but the maturity date may be extended only once,
for up to an additional 19 years at the option of GWFC, provided certain
financial covenants are met. See "Description of the Subordinated Notes--
Option to Extend Maturity Date." In addition, upon the occurrence of a Special
Event (as defined herein) arising from a change in law or a change in legal
interpretation, unless the Subordinated Notes are redeemed in the limited
circumstances described herein, the Trust shall be dissolved, with the result
that the Subordinated Notes will be distributed to the holders of the Trust
Securities, on a pro rata basis. See
S-2
<PAGE>
"Description of the Offered Preferred Securities-- Special Event Redemption or
Distribution." If the Subordinated Notes are distributed to the holders of the
Preferred Securities, GWFC will use its best efforts to have the Subordinated
Notes listed on the New York Stock Exchange or on such other exchange as the
Preferred Securities are then listed. See "Description of the Offered Preferred
Securities--Special Event Redemption or Distribution" and "Description of the
Subordinated Notes."
Upon the occurrence of a Regulatory Event (as defined herein), GWFC may, at
its election, reduce the annual interest rate on the Subordinated Notes by 50
basis points (the "Reduction Election"). If GWFC exercises the Reduction
Election, on the next Distribution Date occurring at least 30 days after notice
to the holders of Trust Securities of the Reduction Election, (i) the
Subordinated Notes will be converted into Depositary Shares of GWFC, having a
liquidation preference of $25.00 per share (the "Depositary Shares"), each
representing a one-tenth interest in a share of 8 1/4% Cumulative Preferred
Stock of GWFC, $250 liquidation preference per share (the "Preferred Stock"),
unless prior to such conversion the holder of Trust Securities elects not to
convert such holder's Subordinated Notes, in which event such holder will be
entitled to receive Subordinated Notes with the lower interest rate, and (ii)
the Trust shall be dissolved, with the result that the Subordinated Notes with
the lower interest rate and/or the Depositary Shares, as the case may be, will
be distributed to the holders of the Trust Securities. See "Description of the
Offered Preferred Securities--Regulatory Event Distribution or Conversion,"
"Description of the Subordinated Notes," "Description of Depositary Shares" and
"Description of Cumulative Preferred Stock."
In the event of the involuntary or voluntary liquidation, dissolution,
winding up or termination of the Trust prior to a Reduction Election, the
holders of the Trust Securities will be entitled to receive for each Trust
Security a liquidation amount of $25 plus accrued and unpaid distributions
thereon (including interest thereon) to the date of payment, unless, in
connection with such dissolution, the Subordinated Notes are distributed to the
holders of the Trust Securities. See "Description of the Offered Preferred
Securities--Liquidation Distribution Upon Dissolution."
----------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT LEVELS ABOVE THOSE THAT MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN
THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING TRANSACTIONS, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-3
<PAGE>
RISK FACTORS
Prospective purchasers of Preferred Securities should carefully review the
information contained elsewhere in this Prospectus Supplement and in the
accompanying Prospectus and should particularly consider the following matters:
RANKING OF SUBORDINATE OBLIGATIONS UNDER THE GUARANTEE AND SUBORDINATED NOTES
GWFC's obligations under the Guarantee are subordinate and junior in right of
payment to all liabilities of GWFC and pari passu with the most senior
preferred or preference stock outstanding, from time to time, if any, of GWFC.
The obligations of GWFC under the Subordinated Notes are subordinate and junior
in right of payment to all present and future Senior Indebtedness of GWFC and
pari passu with obligations to or rights of GWFC's other general unsecured
creditors. As of September 30, 1995, Senior Indebtedness aggregated
approximately $673 million. In addition, because GWFC is a holding company, its
obligations under the Guarantee and the Subordinated Notes will be effectively
subordinated to all existing and future liabilities of its subsidiaries. At
September 30, 1995, such subsidiaries had total liabilities of approximately
$41.2 billion. There are no terms in the Preferred Securities, the Subordinated
Notes or the Guarantee that limit the ability of GWFC or its subsidiaries
(other than the Trust) to incur additional indebtedness, including indebtedness
that ranks senior to the Subordinated Notes and the Guarantee. See "Description
of Guarantee--Status of the Guarantee" and "Description of Debt Securities--
Particular Terms of the Subordinated Debt Securities Issued to the Trust" in
the accompanying Prospectus, and "Description of the Subordinated Notes--
Subordination" herein.
RIGHTS UNDER THE GUARANTEE
The Guarantee will be qualified as an indenture under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"). The First National Bank of
Chicago will act as indenture trustee under the Guarantee for the purposes of
compliance with the Trust Indenture Act (the "Guarantee Trustee"). The
Guarantee Trustee will hold the Guarantee for the benefit of the holders of the
Preferred Securities.
The Guarantee guarantees to the holders of the Preferred Securities the
payment of (i) any accrued and unpaid distributions that are required to be
paid on the Preferred Securities, to the extent the Trust has funds available
therefor, which funds would exist only to the extent GWFC has made a payment of
interest or principal on the Subordinated Notes, (ii) the Redemption Price,
including all accrued and unpaid distributions with respect to Preferred
Securities called for redemption by the Trust, to the extent the Trust has
funds available therefor, which funds would exist only to the extent GWFC has
made a payment of interest or principal on the Subordinated Notes, and (iii)
upon a voluntary or involuntary liquidation, dissolution, winding-up or
termination of the Trust (other than in connection with the distribution of
Subordinated Notes to the holders of Preferred Securities or the redemption of
all the Preferred Securities), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid distributions on the Preferred
Securities to the date of the payment to the extent the Trust has funds
available therefor and (b) the amount of assets of the Trust remaining
available for distribution to holders of the Preferred Securities in
liquidation of the Trust. The holders of a majority in liquidation amount of
the Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee or
to direct the exercise of any trust or power conferred upon the Guarantee
Trustee under the Guarantee. If GWFC were to default on its obligation to pay
amounts payable on the Subordinated Notes, the Trust would lack available funds
for the payment of distributions or amounts payable on redemption of the
Preferred Securities or otherwise, and, in such event, holders of the Preferred
Securities would not be able to rely upon the Guarantee for payment of such
amounts. Instead, holders of the Preferred Securities would rely on the
enforcement of the rights against GWFC pursuant to the terms of the
Subordinated Notes. See "Description of Guarantee" and "Description of Debt
Securities--Particular Terms of the Subordinated Debt Securities Issued to the
Trust" in the accompanying Prospectus. The Declaration provides that each
holder of Preferred Securities, by acceptance thereof, agrees to the provisions
of the Guarantee, including the subordination provisions thereof, and the
Subordinated Indenture (as defined in the accompanying Prospectus).
S-4
<PAGE>
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Declaration Event of Default (as defined herein) occurs and is
continuing, then the holders of a majority in aggregate liquidation amount of
the Preferred Securities will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Property
Trustee or to direct the exercise of any trust or power conferred upon the
Property Trustee under the Declaration, including the right to direct the
Property Trustee to exercise the remedies available to it as a holder of the
Subordinated Notes. If an Event of Default with respect to the Subordinated
Notes, constituting the failure to pay interest or principal on the
Subordinated Notes on the date such interest or principal is otherwise payable,
has occurred and is continuing, then a holder of Preferred Securities may
directly institute a proceeding for enforcement of payment to such holder
directly of the principal of or interest on the Subordinated Notes having a
principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such holder on or after the respective due date specified in the
Subordinated Notes. The holders of Preferred Securities will not be able to
exercise directly any other remedy available to the holders of the Subordinated
Notes unless the Property Trustee fails to do so.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
GWFC has the right under the Subordinated Indenture to defer payments of
interest on the Subordinated Notes by extending the interest payment period at
any time, and from time to time, on the Subordinated Notes in accordance with
the terms thereof. As a consequence of such an extension, quarterly
distributions on the Preferred Securities would be deferred (but despite such
deferral would continue to accrue with interest thereon compounded quarterly)
by the Trust during any such extended interest payment period. Such right to
extend the interest payment period for the Subordinated Notes is limited to a
period not exceeding 20 consecutive quarters. The extension of the interest
payment period will not extend the maturity date of the Subordinated Notes. In
the event that GWFC exercises this right to defer interest payments, then (a)
GWFC shall not, and shall cause any subsidiary of GWFC that is not a wholly
owned subsidiary of GWFC not to, declare or pay dividends on, or make any
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or the capital
stock of any such subsidiary, and (b) GWFC shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities (including guarantees) issued by GWFC that rank pari passu with
or junior to the Subordinated Notes; provided, however, that restriction (a)
above does not apply to any stock dividend paid by GWFC, or any of its
subsidiaries, where the dividend stock is the same stock as that on which the
dividend is being paid. Prior to the termination of any such Extension Period
(as defined), GWFC may further extend the interest payment period; provided
that such Extension Period, together with all such previous and further
extensions thereof, may not exceed 20 consecutive quarters. Upon the
termination of any Extension Period and the payment of all amounts then due,
GWFC may commence a new Extension Period, as if no Extension Period had
previously been declared, subject to the above requirements. See "Description
of the Offered Preferred Securities--Distributions" and "Description of the
Subordinated Notes--Option to Extend Interest Payment Period."
Should GWFC exercise its right to defer payments of interest on the
Subordinated Notes by extending the interest payment period thereon, each
holder of Preferred Securities will continue to accrue income (as original
issue discount ("OID")) in respect of the deferred interest allocable to its
Preferred Securities for United States federal income tax purposes, which will
be allocated but not distributed, to holders of record of Preferred Securities.
As a result, each such holder of Preferred Securities will recognize income for
United States federal income tax purposes in advance of the receipt of cash and
will not receive the cash from the Trust related to such income if such holder
disposes of its Preferred Securities prior to the record date for the date on
which distributions of such amounts are made.
GWFC has no intention of exercising its right to defer payments of interest
by extending the interest payment period on the Subordinated Notes and
considers it unlikely that it will exercise that right in the future. However,
should GWFC determine to exercise such right in the future, the market price of
the Preferred Securities is likely to be affected. A holder that disposes of
its Preferred Securities during an Extension Period, therefore, might not
receive the same return on its investment as a holder that continues to hold
its Preferred Securities. In addition, as a result of the existence of GWFC's
right to defer interest payments, the market price of the Preferred Securities
(which represent an undivided beneficial interest in
S-5
<PAGE>
the Subordinated Notes) may be more volatile than other securities on which OID
accrues to which such rights do not apply. See "Certain Federal Income Tax
Consequences--Original Issue Discount."
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
Upon the occurrence of a Special Event, the Trust shall be dissolved, except
in the limited circumstance described below under "Description of the Offered
Preferred Securities--Special Event Redemption or Distribution," with the
result that the Subordinated Notes would be distributed to the holders of the
Trust Securities in connection with the liquidation of the Trust. In certain
circumstances relating to a Tax Event, GWFC shall have the right to redeem the
Subordinated Notes, in whole or in part, in lieu of a distribution of the
Subordinated Notes by the Trust, in which event the Trust will redeem the Trust
Securities on a pro rata basis to the same extent as the Subordinated Notes are
redeemed by GWFC. See "Description of the Offered Preferred Securities--Special
Event Redemption or Distribution."
There can be no assurance as to the market prices for the Preferred
Securities or the Subordinated Notes that may be distributed in exchange for
Preferred Securities if a dissolution or liquidation of the Trust were to
occur. Accordingly, the Preferred Securities that an investor may purchase,
whether pursuant to the offer made hereby or in the secondary market, or the
Subordinated Notes that a holder of Preferred Securities may receive on
dissolution and liquidation of the Trust, may trade at a discount to the price
that the investor paid to purchase the Preferred Securities. Because holders of
Preferred Securities may receive Subordinated Notes upon the occurrence of a
Special Event, prospective purchasers of Preferred Securities are also making
an investment decision with regard to the Subordinated Notes and should
carefully review all the information regarding the Subordinated Notes contained
herein and in the accompanying Prospectus. See "Description of the Offered
Preferred Securities--Special Event Redemption or Distribution" and
"Description of the Subordinated Notes."
REGULATORY EVENT DISTRIBUTION OR CONVERSION
During a period of 90 days after the occurrence of a Regulatory Event, GWFC
may elect to reduce the annual interest rate on the Subordinated Notes by 50
basis points effective upon the distribution of the Subordinated Notes (the
"Adjusted Subordinated Notes") to the holders of the Trust Securities. If GWFC
exercises the Reduction Election, on the next Distribution Date occurring at
least 30 days after notice to the holders of Trust Securities of the Reduction
Election, (i) the Adjusted Subordinated Notes will be converted into Depositary
Shares of GWFC, with a liquidation preference equal to the principal amount of
the Adjusted Subordinated Notes converted, each Depositary Share representing a
one-tenth interest in a share of 8 1/4% Cumulative Preferred Stock of GWFC,
unless prior to such conversion the holder of Trust Securities elects not to
convert such holder's Adjusted Subordinated Notes, in which event such holder
will be entitled to receive the Adjusted Subordinated Notes and (ii) the Trust
shall be dissolved, with the result that the Adjusted Subordinated Notes and/or
the Depositary Shares, as the case may be, will be distributed to the holders
of the Trust Securities. See "Description of the Offered Preferred Securities--
Regulatory Event Distribution or Conversion," "Description of the Subordinated
Notes," "Description of Depositary Shares" and "Description of Cumulative
Preferred Stock."
There can be no assurance as to the market prices for the Adjusted
Subordinated Notes or the Depositary Shares, if distributed to holders of Trust
Securities. Accordingly, the Preferred Securities that an investor may
purchase, whether pursuant to the offer made hereby or in the secondary market,
or the Adjusted Subordinated Notes or Depositary Shares that a holder of
Preferred Securities may receive, may trade at a discount to the price that the
investor paid to purchase the Preferred Securities. Because holders of
Preferred Securities may receive Adjusted Subordinated Notes or Depositary
Shares upon the occurrence of a Regulatory Event, prospective purchasers should
also consider carefully the information regarding the Subordinated Notes
(including the Adjusted Subordinated Notes) and the Depositary Shares contained
herein and in the accompanying Prospectus.
S-6
<PAGE>
REGULATORY REDEMPTION EVENT
For a period of 90 days after the occurrence of a Regulatory Redemption
Event, GWFC may elect to redeem the then outstanding Subordinated Notes or
Depositary Shares, in each case in whole only, for cash at a redemption price
equal to the aggregate principal amount plus accrued but unpaid interest on the
Subordinated Notes or the aggregate liquidation amount plus accrued but unpaid
dividends on the Depositary Shares, as the case may be. See "Description of the
Offered Preferred Securities--Regulatory Redemption Event" and "Description of
Cumulative Preferred Stock--Redemption."
LIMITED VOTING RIGHTS
Holders of Preferred Securities will have limited voting rights and will not
be entitled to vote to appoint, remove or replace, or to increase or decrease
the number of Regular Trustees, which voting rights are vested exclusively in
the holder of the Common Securities.
TRADING PRICE
The Preferred Securities may trade at a price that does not fully reflect the
value of accrued but unpaid interest with respect to the underlying
Subordinated Notes. A holder who disposes of his or her Preferred Securities
between record dates for payments of distributions thereon will be required to
include accrued but unpaid interest on the Subordinated Notes through the date
of disposition in income as ordinary income (i.e., OID), and to add such amount
to his or her adjusted tax basis in his or her pro rata share of the underlying
Subordinated Notes deemed disposed of. To the extent the selling price is less
than the holder's adjusted tax basis (which will include, in the form of OID,
all accrued but unpaid interest), a holder will recognize a capital loss.
Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States federal income tax purposes. See
"Certain Federal Income Tax Consequences--Original Issue Discount" and "--Sale
of Preferred Securities."
S-7
<PAGE>
RECENT FINANCIAL RESULTS
The following table sets forth selected financial data of GWFC and its
consolidated subsidiaries for the nine months ended September 30, 1995 and 1994
and at September 30, 1995 and 1994. This selected financial data is derived
from GWFC's unaudited consolidated financial statements which are incorporated
herein by reference and which include, in the opinion of management, all
adjustments (consisting of only normal, recurring accruals) necessary for the
fair presentation of the consolidated results of operations and consolidated
financial condition of GWFC for the periods and at the dates presented. The
operating results for the nine months ended September 30, 1995 are not
necessarily indicative of the results to be expected for the full year.
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPTEMBER 30,
------------------------
1995 1994
----------- -----------
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE
DATA AND RATIOS)
<S> <C> <C>
SUMMARY OF OPERATIONS
Interest income..................................... $ 2,403,824 $ 1,925,107
Interest expense.................................... 1,452,536 922,372
Net interest income................................. 951,288 1,002,735
Provision for loan losses........................... 137,400 154,400
Operating and administrative expenses............... 736,829 745,925
Earnings before taxes on income..................... 268,555 270,660
Taxes on income..................................... 106,100 108,100
Net earnings........................................ 162,455 162,560
Fully diluted earnings per share.................... 1.05 1.08
Cash dividends per common share..................... .69 .69
Ratio of earnings to fixed charges(1)
Excluding interest on customer accounts............ 1.46x 2.08x
Including interest on customer accounts............ 1.18x 1.29x
Ratio of earnings to fixed charges and preferred
stock dividends(1):
Excluding interest on customer accounts............ 1.39x 1.85x
Including interest on customer accounts............ 1.16x 1.24x
</TABLE>
<TABLE>
<CAPTION>
AT SEPTEMBER 30,
-----------------------
1995 1994
----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
SUMMARY OF FINANCIAL CONDITION
Cash and securities................................... $ 2,190,674 $ 1,773,218
Loans receivable, net................................. 29,633,224 30,123,801
Mortgage-backed securities............................ 10,532,266 5,825,664
Total assets.......................................... 44,693,014 39,996,606
Customer accounts..................................... 29,432,176 29,406,989
Borrowings............................................ 11,591,999 7,269,743
Stockholders' equity.................................. 2,654,299 2,443,806
</TABLE>
- --------
(1) For purposes of computing the ratio of earnings to fixed charges and the
ratio of earnings to fixed charges and preferred stock dividends, earnings
represent earnings before income taxes and fixed charges. Fixed charges,
excluding interest on customer accounts, represent other interest expense
(including capitalized interest) and one-third (the proportion deemed
representative of the interest factor) of rents. Fixed charges, including
interest on customer accounts, represent all interest expense (including
capitalized interest) and one-third of rents.
S-8
<PAGE>
CAPITALIZATION OF GWFC
The following table sets forth the unaudited summary capitalization of GWFC
and its consolidated subsidiaries as of September 30, 1995, and as adjusted to
reflect issuance of 4,000,000 Preferred Securities and the application of the
estimated net proceeds therefrom. See "Use of Proceeds" below. The table should
be read in conjunction with GWFC's consolidated financial statements and notes
thereto and other financial data incorporated by reference herein. See
"Incorporation of Certain Documents by Reference" in the accompanying
Prospectus.
<TABLE>
<CAPTION>
AT SEPTEMBER 30, 1995
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ACTUAL AS ADJUSTED
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(IN THOUSANDS)
<S> <C> <C>
Borrowings:
Federal Home Loan Bank.............................. $ 115,000 $ 115,000
Commercial paper.................................... 1,177,877 1,177,877
Other short-term debt............................... 792,934 792,934
Senior debt......................................... 2,253,165 2,253,165
Securities sold under agreement to repurchase....... 7,253,023 7,253,023
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Total Borrowings.................................. 11,591,999 11,591,999
Company-Obligated Mandatorily Redeemable Preferred
Securities of Great Western Financial Trust I (1).... -- 100,000
Preferred stock....................................... 294,375 294,375
Common stockholders' equity........................... 2,359,924 2,359,924
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Total Capitalization.............................. $14,246,298 $14,346,298
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</TABLE>
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(1) As described in this Prospectus Supplement, the sole assets of the Trust
will be $103 million aggregate principal amount of 8 1/4% Subordinated
Deferrable Interest Notes due 2025 of GWFC.
ACCOUNTING TREATMENT
The financial statements of the Trust will be reflected in GWFC's
consolidated financial statements with the Preferred Securities shown as
Company-obligated mandatorily redeemable preferred securities of subsidiary
trust. The sole assets of the Trust will be the Subordinated Notes.
USE OF PROCEEDS
All of the proceeds from the sale of the Preferred Securities will be
invested by the Trust in the Subordinated Notes described herein and ultimately
will be used by GWFC for general corporate purposes, which may include
investments in or extensions of credit to subsidiaries of GWFC.
DESCRIPTION OF THE OFFERED PREFERRED SECURITIES
The Preferred Securities will be issued pursuant to the terms of the
Declaration. The Declaration will be qualified as an indenture under the Trust
Indenture Act. The Property Trustee, The First National Bank of Chicago, will
act as the indenture trustee under the Declaration for purposes of compliance
with the provisions of the Trust Indenture Act. The terms of the Preferred
Securities will include those stated in the Declaration and those made part of
the Declaration by the Trust Indenture Act. The following summary of the
material terms and provisions of the Preferred Securities does not purport to
be complete and is subject to, and qualified in its entirety by reference to,
the Declaration, a copy of which is filed as an exhibit to the Registration
Statement of which this Prospectus Supplement is a part, the Delaware Business
Trust Act (the "Trust Act") and the Trust Indenture Act.
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GENERAL
The Declaration authorizes the Regular Trustees to issue on behalf of the
Trust the Trust Securities, which represent undivided beneficial interests in
the assets of the Trust. All of the Common Securities will be owned, directly
or indirectly, by GWFC. The Common Securities rank pari passu, and payments
will be made thereon on a pro rata basis, with the Preferred Securities, except
that upon the occurrence of a Declaration Event of Default, the rights of the
holders of the Common Securities to receive payment of periodic distributions
and payments upon liquidation, redemption and otherwise will be subordinated to
the rights to payment of the holders of the Preferred Securities. The
Declaration does not permit the issuance by the Trust of any securities other
than the Trust Securities or the incurrence of any indebtedness by the Trust.
Pursuant to the Declaration, the Property Trustee will own the Subordinated
Notes purchased by the Trust for the benefit of the holders of the Trust
Securities. The payment of distributions out of money held by the Trust, and
payments upon redemption of the Preferred Securities or liquidation of the
Trust, are guaranteed by GWFC to the extent described under "Description of
Guarantee" in the accompanying Prospectus. The Guarantee will be held by The
First National Bank of Chicago, the Guarantee Trustee, for the benefit of the
holders of the Preferred Securities. The Guarantee does not cover payment of
distributions when the Trust does not have sufficient available funds to pay
such distributions.
The Preferred Securities will not be savings accounts or deposits and will
not be insured by the Federal Deposit Insurance Corporation (the "FDIC"), the
United States or any agency or fund of the United States.
DISTRIBUTIONS
Distributions on the Preferred Securities will be fixed at a rate per annum
of 8 1/4% of the stated liquidation amount of $25 per Preferred Security.
Distributions in arrears for more than one quarter will bear interest thereon
at the rate per annum of 8 1/4% compounded quarterly. The term "distribution"
as used herein includes any such interest payable unless otherwise stated. The
amount of distributions payable for any period will be computed on the basis of
a 360-day year of twelve 30-day months (or for any period shorter than a full
quarterly period, on the basis of the actual number of days elapsed per 30-day
month).
Distributions on the Preferred Securities will be cumulative, will accrue
from December 11, 1995, and will be payable quarterly in arrears on March 31,
June 30, September 30 and December 31 of each year to the holders of record on
the applicable record date, commencing December 31, 1995, when, as and if
available for payment, except as otherwise described below.
GWFC has the right under the Subordinated Indenture to defer payments of
interest on the Subordinated Notes by extending the interest payment period
from time to time on the Subordinated Notes, which, if exercised, would defer
quarterly distributions on the Preferred Securities (though such distributions
would continue to accrue with interest thereon, compounded quarterly (to the
extent permitted by applicable law), since interest would continue to accrue on
the Subordinated Notes) during any such extended interest payment period. Such
right to extend the interest payment period for the Subordinated Notes is
limited to a period not exceeding 20 consecutive quarters. In the event that
GWFC exercises this right, then (a) GWFC shall not, and shall cause any
subsidiary of GWFC that is not a wholly owned subsidiary of GWFC not to,
declare or pay dividends on, make any distributions with respect to, or redeem,
purchase or acquire, or make a liquidation payment with respect to, any of its
capital stock or the capital stock of any such subsidiary and (b) GWFC shall
not make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities (including guarantees) issued by GWFC
that rank pari passu with or junior to such Subordinated Notes; provided,
however, that, the foregoing restriction (a) does not apply to any stock
dividend paid by GWFC, or any of its subsidiaries, where the dividend stock is
the same stock as that on which the dividend is being paid. Prior to the
termination of any such Extension Period, GWFC may further defer payments of
interest by extending the interest payment period, provided that such Extension
Period, together with all such previous and further extensions thereof, may not
exceed 20 consecutive quarters. Upon the termination of any Extension Period
and the payment of all amounts then due, GWFC may select a new
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Extension Period as if no Extension Period had previously been declared,
subject to the above requirements. See "Description of the Subordinated Notes--
Interest" and "--Option to Extend Interest Payment Period." If distributions
are deferred, the deferred distributions and accrued interest thereon shall be
paid to holders of record of the Preferred Securities as they appear on the
books and records of the Trust on the record date next following the
termination of such Extension Period.
Distributions on the Preferred Securities must be paid on the dates payable
to the extent that the Trust has funds available for the payment of such
distributions. The Trust's funds available for distribution to the holders of
the Preferred Securities will be limited to payments received from GWFC on the
Subordinated Notes. See "Description of the Subordinated Notes." The payment of
distributions out of moneys held by the Trust is guaranteed by GWFC to the
extent set forth under "Description of Guarantee" in the accompanying
Prospectus.
Distributions on the Preferred Securities will be payable to the holders
thereof as they appear on the books and records of the Trust on the relevant
record dates, which, as long as the Preferred Securities remain in book-entry
only form, will be one Business Day prior to the relevant payment dates. Such
distributions will be paid through the Property Trustee who will hold amounts
received in respect of the Subordinated Notes for the benefit of the holders of
the Trust Securities. Subject to any applicable laws and regulations and the
provisions of the Declaration, each such payment will be made as described
under "Book-Entry Only Issuance--The Depository Trust Company" below. In the
event that the Preferred Securities do not continue to remain in book-entry
only form, the Regular Trustees shall have the right to select relevant record
dates, which shall be more than one but less than 60 Business Days prior to the
relevant payment dates. In the event that any date on which distributions are
to be made on the Preferred Securities is not a Business Day, then payment of
the distributions payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect
of any such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such
distribution date. A "Business Day" shall mean any day other than Saturday,
Sunday or any other day on which banking institutions in the City of New York
or Los Angeles, California are authorized or required by any applicable law to
close.
MANDATORY REDEMPTION
The Subordinated Notes will mature on December 31, 2025, unless the maturity
date is extended at the option of GWFC (provided certain financial covenants
are met), and may be redeemed, in whole or in part, at any time on or after
December 31, 2000, or at any time in certain circumstances upon the occurrence
of a Tax Event or in whole for a limited time upon the occurrence of a
Regulatory Redemption Event. Upon the repayment of the Subordinated Notes,
whether at maturity or upon redemption, the proceeds from such repayment or
payment shall simultaneously be applied to redeem Trust Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Subordinated Notes so repaid or redeemed at the Redemption Price; provided
that, holders of Trust Securities shall be given not less than 30 nor more than
60 days notice of such redemption. See "Description of the Subordinated Notes--
Optional Redemption."
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
"Tax Event" means that the Regular Trustees shall have received an opinion
from independent tax counsel experienced in such matters (a "Dissolution Tax
Opinion") to the effect that, as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or, with respect to clause (iii) below, any
political subdivision or taxing authority thereof or therein or (b) any
amendment to, or change in, an interpretation or application of such laws or
regulations, there is more than an insubstantial risk that (i) the Trust would
be subject to United
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States federal income tax with respect to income accrued or received on the
Subordinated Notes, (ii) interest payable to the Trust on the Subordinated
Notes would not be deductible by GWFC for United States federal income tax
purposes or (iii) the Trust would be subject to more than a de minimis amount
of other taxes, duties or other governmental charges, which change or amendment
is enacted (irrespective of any retroactive effect) on or after the date of
this Prospectus Supplement.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion from independent counsel experienced in such matters to the
effect that, as a result of the occurrence of a change in law or regulation or
a written change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority (a "Change
in 1940 Act Law"), there is more than an insubstantial risk that the Trust is
or will within 90 days of the date of such opinion be considered an "investment
company" which is required to be registered under the Investment Company Act of
1940, as amended (the "1940 Act"), which Change in 1940 Act Law becomes
effective on or after the date of this Prospectus Supplement.
If, at any time, a Tax Event or an Investment Company Event (each, as defined
above, a "Special Event") shall occur and be continuing, the Trust shall,
except in the circumstances described below, be dissolved with the result that
Subordinated Notes with an aggregate principal amount equal to the aggregate
stated liquidation amount of the Trust Securities would be distributed to the
holders of the Trust Securities, in liquidation of such holders' interests in
the Trust on a pro rata basis, within 90 days following the occurrence of such
Special Event; provided, however, that in the case of the occurrence of a Tax
Event, as a condition of such dissolution and distribution, the Regular
Trustees shall have received an opinion from independent tax counsel
experienced in such matters (a "No Recognition Opinion"), which opinion may
rely on published revenue rulings of the Internal Revenue Service, to the
effect that the holders of the Trust Securities will not recognize any gain or
loss for United States federal income tax purposes as a result of such
dissolution and distribution of Subordinated Notes; and provided, further,
that, if at the time there is available to the Trust the opportunity to
eliminate, within such 90 day period, the Special Event by taking some
ministerial action, such as filing a form or making an election, or pursuing
some other similar reasonable measure, which has no adverse effect on the
Trust, GWFC or the holders of the Trust Securities, the Trust will pursue such
measure in lieu of such dissolution and distribution. Furthermore, if in the
case of the occurrence of a Tax Event, (i) GWFC has received an opinion (a
"Redemption Tax Opinion") from independent tax counsel experienced in such
matters that, as a result of a Tax Event, there is more than an insubstantial
risk that GWFC would be precluded from deducting the interest on the
Subordinated Notes for United States federal income tax purposes even if the
Subordinated Notes were distributed to the holders of Trust Securities in
liquidation of such holders' interests in the Trust as described above or (ii)
the Regular Trustees shall have been informed by such tax counsel that a No
Recognition Opinion cannot be delivered, GWFC shall have the right, upon not
less than 30 nor more than 60 days notice, to redeem the Subordinated Notes in
whole or in part for cash within 90 days following the occurrence of such Tax
Event, and, following such redemption, Trust Securities with an aggregate
liquidation amount equal to the aggregate principal amount of the Subordinated
Notes so redeemed shall be redeemed by the Trust at the Redemption Price on a
pro rata basis; provided, however, that, if at the time there is available to
GWFC or the Trust the opportunity to eliminate, within such 90 day period, the
Tax Event by taking some ministerial action, such as filing a form or making an
election, or pursuing some other similar reasonable measure which has no
adverse effect on the Trust, or the holders of the Trust Securities or GWFC,
the Trust or GWFC will pursue such measure in lieu of redemption.
If Subordinated Notes are distributed to the holders of the Preferred
Securities, GWFC will use its best efforts to have the Subordinated Notes
listed on the New York Stock Exchange or on such other exchange as the
Preferred Securities are then listed.
After the date for any distribution of Subordinated Notes upon dissolution of
the Trust, (i) the Preferred Securities and Guarantee will no longer be deemed
to be outstanding, (ii) the depositary or its nominee, as the record holder of
the Preferred Securities, will receive a registered global certificate or
certificates
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representing the Subordinated Notes to be delivered upon such distribution and
(iii) any certificates representing Preferred Securities and the Guarantee not
held by the depositary or its nominee will be deemed to represent Subordinated
Notes having an aggregate principal amount equal to the aggregate stated
liquidation amount of such Preferred Securities, until such certificates are
presented to GWFC or its agent for transfer or reissuance.
There can be no assurance as to the market prices for the Preferred
Securities or the Subordinated Notes that may be distributed in exchange for
the Preferred Securities if a dissolution and liquidation of the Trust were to
occur. Accordingly, the Preferred Securities that an investor may purchase, or
the Subordinated Notes that the investor may receive on dissolution and
liquidation of the Trust, may trade at a discount to the price that the
investor paid to purchase the Preferred Securities.
REGULATORY EVENT DISTRIBUTION OR CONVERSION
"Regulatory Event" means that (i) GWFC (or its successor) is, becomes or
pursuant to law or regulation will become within 180 days, subject to capital
requirements under which all or any portion of the Preferred Securities would
not constitute Tier 1 capital applied as if GWFC (or its successor) were a bank
holding company (as that concept is used in the guidelines or regulations
issued by the Board of Governors of the Federal Reserve System as of the date
of this Prospectus Supplement) or its then equivalent ("Tier 1 Capital"), and
(ii) as a result, based upon GWFC's (or its successor's) then existing capital
ratios, GWFC (or its successor) would, within 180 days, fail to be "well
capitalized" (as that term is defined in 12 CFR (S)208.33(b)(1) of the
regulations promulgated by the Board of Governors of the Federal Reserve System
as if GWFC (or its successor) were a state member bank, but using the
definition of Tier 1 Capital applied to bank holding companies or, in the event
that section is eliminated, to a reasonably equivalent standard applicable to
bank holding companies). The Regulatory Event will be deemed to occur on the
date the condition in clause (ii) is satisfied.
GWFC shall promptly notify the Regular Trustees of the occurrence of a
Regulatory Event. During a period of 90 days after the occurrence of a
Regulatory Event, GWFC may notify the Regular Trustees in writing that GWFC has
elected to reduce the annual interest rate on all of the outstanding
Subordinated Notes by 50 basis points (i.e. from 8 1/4% per annum to 7 3/4% per
annum) effective upon distribution of the Adjusted Subordinated Notes to the
holders of the Trust Securities; provided, however, that if GWFC has elected to
defer payments of interest on the Subordinated Notes as described under
"Distributions" above, all deferred distributions and accrued interest thereon
shall be paid before the Adjusted Subordinated Notes are distributed.
If GWFC elects to lower the annual interest rate on the Subordinated Notes as
described above, at least 30 but not more than 60 days prior to the
distribution of the Adjusted Subordinated Notes, notice of such election will
be sent to the holders of the Trust Securities. Such notice will state (i) that
a Regulatory Event has occurred and that GWFC has elected to reduce the
interest rate on the Subordinated Notes, (ii) that on the specified date (which
shall be the next Distribution Date occurring at least 30 days after the date
of such notice), the Adjusted Subordinated Notes will be converted into
Depositary Shares with a liquidation preference equal to the principal amount
of the Adjusted Subordinated Notes converted, unless prior to such conversion
the holder of Trust Securities elects not to convert such holder's Adjusted
Subordinated Notes, in which case such holder will be entitled to receive the
Adjusted Subordinated Notes, (iii) that the Trust will be dissolved and that
the holders of Trust Securities will receive Adjusted Subordinated Notes and/or
Depositary Shares, as the case may be, (iv) the date upon which the Adjusted
Subordinated Notes and/or Depositary Shares, as the case may be, will be
distributed, and (v) the procedure for a holder of Trust Securities to exercise
his or her right not to have the Adjusted Subordinated Notes to which such
holder is entitled converted into Depositary Shares. See "Description of
Depositary Shares" and "Description of Cumulative Preferred Stock" for a
description of the terms of the Depositary Shares and the related Preferred
Stock.
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If GWFC elects to lower the annual interest rate on the Subordinated Notes,
on the next Distribution Date occurring at least 30 days after notice to the
holders of Trust Securities as described in the previous paragraph, (i) the
Adjusted Subordinated Notes will be converted into Depositary Shares of GWFC
having a liquidation preference equal to the principal amount of the Adjusted
Subordinated Notes converted, each Depositary Share representing a one-tenth
interest in a share of 8 1/4% Cumulative Preferred Stock of GWFC, unless prior
to such conversion the holder of Trust Securities elects not to convert such
holder's Adjusted Subordinated Notes, in which event such holder will be
entitled to receive the Adjusted Subordinated Notes, and (ii) the Trust shall
be dissolved, with the result that the Adjusted Subordinated Notes and/or the
Depositary Shares, as the case may be, will be distributed to the holders of
the Trust Securities.
If Adjusted Subordinated Notes and/or Depositary Shares are distributed to
any holder of Preferred Securities, GWFC will use its best efforts to have the
Adjusted Subordinated Notes and the Depositary Shares, as the case may be,
listed on the New York Stock Exchange or on such other exchange as the
Preferred Securities are then listed. GWFC will not attempt to have Adjusted
Subordinated Notes listed on any exchange if it has given notice of its intent
to redeem such Adjusted Subordinated Notes as described under "Description of
the Subordinated Notes--Optional Redemption."
After the date for any distribution of Adjusted Subordinated Notes, upon
dissolution of the Trust,(i) the Preferred Securities and Guarantee will no
longer be deemed to be outstanding, (ii) the depositary or its nominee, as the
record holder of the Preferred Securities, will receive a registered global
certificate or certificates representing the Adjusted Subordinated Notes or the
Depositary Shares, as the case may be, to be delivered upon such distribution
and (iii) any certificates representing Preferred Securities not held by the
depositary or its nominee will be deemed to represent Adjusted Subordinated
Notes having an aggregate principal amount, or Depositary Shares having an
aggregate stated liquidation amount, as the case may be, equal to the aggregate
stated liquidation amount of such Preferred Securities, until such certificates
are presented to GWFC or its agent for transfer or reissuance.
There can be no assurance as to the market prices for the Preferred
Securities, the Adjusted Subordinated Notes or the Depositary Shares that may
be distributed in exchange for the Preferred Securities if a dissolution and
liquidation of the Trust were to occur. Accordingly, the Preferred Securities
that an investor may purchase, or the Adjusted Subordinated Notes or the
Depositary Shares that the investor may receive on dissolution and liquidation
of the Trust, may trade at a discount to the price that the investor paid to
purchase the Preferred Securities.
REGULATORY REDEMPTION EVENT
"Regulatory Redemption Event" means that (i) GWFC (or its successor) is,
becomes or pursuant to law or regulation will become within 180 days, subject
to capital requirements under which all or any portion of the Preferred
Securities would not constitute Tier 1 Capital and (ii) (a) a bank, savings and
loan association, savings bank, or bank or savings and loan holding company
(each a "Depository Institution") has issued or has been the sponsor of a trust
or other entity (including but not limited to a general or limited partnership
or limited liability company) that has issued securities that constitute Tier 1
Capital, and which issued securities, or the securities underlying such issued
securities, are to be treated by such Depository Institution as indebtedness
for U.S. federal income tax purposes, as evidenced by the disclosure document
pursuant to which such securities were offered, and (b) GWFC (or its successor)
has within 90 days after the later of such issuance or the satisfaction of the
condition set forth in clause (i) above, received an opinion of independent
counsel experienced in such matters that securities having substantially
identical terms (except for rate, maturity and payment dates), if issued by
GWFC (or its successor) or by a GWFC (or its successor) sponsored trust or
other entity, at least 66 2/3% of which should constitute Tier 1 Capital for
GWFC (or its successor) if the securities issued by such Depository Institution
constituted Tier 1 Capital and such securities should be treated as
indebtedness for U.S. federal income tax purposes.
GWFC shall promptly notify the Regular Trustees of the occurrence of a
Regulatory Redemption Event. During a period of 90 days following the
occurrence of a Regulatory Redemption Event, GWFC may elect
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to redeem the Subordinated Notes (which may be in the form of Adjusted
Subordinated Notes) in whole only, for cash at a redemption price equal to the
aggregate principal amount of the Subordinated Notes plus accrued but unpaid
interest thereon. See "Description of the Subordinated Notes--Optional
Redemption." See also "Description of Cumulative Preferred Stock--Redemption"
for a description of the possible redemption of Depositary Shares, if issued,
upon the occurrence of a Regulatory Redemption Event.
If GWFC elects to redeem the Subordinated Notes for cash, the written notice
of its election shall specify a date for such redemption, which shall not be
less than 30 nor more than 60 days after such notice. Upon the redemption of
the Subordinated Notes, the Trust Securities, if still outstanding, with an
aggregate liquidation amount equal to the aggregate principal amount of the
Subordinated Notes so redeemed shall be redeemed by the Trust at the Redemption
Price.
REDEMPTION PROCEDURES
The Trust may not redeem fewer than all of the outstanding Preferred
Securities unless all accrued and unpaid distributions have been paid on all
Preferred Securities for all quarterly distribution periods terminating on or
prior to the date of redemption.
If the Trust gives a notice of redemption in respect of Preferred Securities
(which notice will be irrevocable), then by 12:00 noon, New York City time, on
the redemption date, and if GWFC has paid to the Property Trustee a sufficient
amount of cash in connection with the related redemption or maturity of the
Subordinated Notes, then GWFC through the Property Trustee will irrevocably
deposit with the depositary funds sufficient to pay the applicable Redemption
Price and will give the depositary irrevocable instructions and authority to
pay the Redemption Price to holders of the Preferred Securities. See "Book-
Entry Only Issuance--The Depository Trust Company" below. If notice of
redemption shall have been given and funds deposited as required, then,
immediately prior to the close of business on the date of such deposit or
redemption date, if later, distributions will cease to accrue and all rights of
holders of such Preferred Securities so called for redemption will cease,
except the right of the holders of such Preferred Securities to receive the
Redemption Price but without interest on such Redemption Price. In the event
that any date fixed for redemption of Preferred Securities is not a Business
Day, then payment of the Redemption Price payable on such date will be made on
the next succeeding day that is a Business Day (without any interest or other
payment in respect of any such delay), except that, if such Business Day falls
in the next calendar year, such payment will be made on the immediately
preceding Business Day. In the event that payment of the Redemption Price in
respect of Preferred Securities is improperly withheld or refused and not paid
either by the Trust, or by GWFC pursuant to the Guarantee, distributions on
such Preferred Securities will continue to accrue at the then applicable rate
from the original redemption date to the actual date of payment, in which case
the actual payment date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price.
In the event that fewer than all of the outstanding Preferred Securities are
to be redeemed, the Preferred Securities will be redeemed pro rata as described
below under "Book-Entry Only Issuance--The Depository Trust Company" below;
provided, however, that if the partial redemption of the Preferred Securities
would result in the delisting of the Preferred Securities, Preferred Securities
may only be redeemed in whole.
Subject to the foregoing and applicable law (including, without limitation,
United States federal securities laws), GWFC or its subsidiaries may at any
time, and from time to time, purchase outstanding Preferred Securities by
tender, in the open market or by private agreement, provided that the acquiror
is not the holder of the Common Securities or the obligor under the
Subordinated Indenture.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust (each a "Liquidation"), the then holders
of the Preferred Securities will be entitled to receive out of the assets of
the Trust, after satisfaction of liabilities to creditors, an amount equal to
the aggregate of the stated
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liquidation amount of $25 per Preferred Security plus accrued and unpaid
distributions thereon to the date of payment (the "Liquidation Distribution"),
unless, in connection with such Liquidation, Subordinated Notes, Adjusted
Subordinated Notes and/or Depositary Shares, as the case may be, in an
aggregate stated principal or liquidation amount, as applicable, equal to the
aggregate stated liquidation amount of the Preferred Securities, with accrued
and unpaid interest or dividends, as the case may be, equal to accrued and
unpaid distributions on the Preferred Securities, have been distributed on a
pro rata basis to the holders of the Preferred Securities in exchange for such
Preferred Securities.
If, upon any such Liquidation, the Liquidation Distribution can be paid only
in part because the Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Preferred Securities shall be paid on a pro rata basis. The
holders of the Common Securities will be entitled to receive distributions upon
any such dissolution pro rata with the holders of the Preferred Securities,
except that if a Declaration Event of Default has occurred and is continuing,
the Preferred Securities shall have a preference over the Common Securities
with regard to such distributions.
Pursuant to the Declaration, the Trust shall terminate (i) on December 31,
2050, the expiration of the term of the Trust, (ii) upon the bankruptcy of GWFC
or the holder of the Common Securities, (iii) upon the filing of a certificate
of dissolution or its equivalent with respect to the holder of the Common
Securities or GWFC, the filing of a certificate of cancellation with respect to
the Trust, or the revocation of the charter of the holder of the Common
Securities or GWFC and the expiration of 90 days after the date of revocation
without a reinstatement thereof, (iv) upon the distribution of Subordinated
Notes upon the occurrence of a Special Event or upon the distribution of
Adjusted Subordinated Notes and/or Depositary Shares as a result of a
Regulatory Event, (v) upon the entry of a decree of a judicial dissolution of
the holder of the Common Securities, GWFC or the Trust, or (vi) upon the
redemption of all the Trust Securities.
DECLARATION EVENTS OF DEFAULT
An event of default under the Subordinated Indenture (an "Indenture Event of
Default") constitutes an event of default under the Declaration with respect to
the Trust Securities (a "Declaration Event of Default"); provided that,
pursuant to the Declaration, the holder of the Common Securities will be deemed
to have waived any Declaration Event of Default with respect to the Common
Securities until all Declaration Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated. Until
such Declaration Events of Default with respect to the Preferred Securities
have been so cured, waived, or otherwise eliminated, the Property Trustee will
be deemed to be acting solely on behalf of the holders of the Preferred
Securities and only the holders of the Preferred Securities will have the right
to direct the Property Trustee with respect to certain matters under the
Declaration, and therefore the Subordinated Indenture. See "Voting Rights"
below.
Upon the occurrence of a Declaration Event of Default, the Property Trustee
as sole holder of the Subordinated Notes will have the right under the
Subordinated Indenture to declare the principal of and interest on the
Subordinated Notes to be immediately due and payable. GWFC and the Trust are
each required to file annually with the Property Trustee an officer's
certificate as to its compliance with all conditions and covenants under the
Declaration.
If an Event of Default with respect to the Subordinated Notes, constituting
the failure to pay interest or principal on the Subordinated Notes on the date
such interest or principal is otherwise payable, has occurred and is
continuing, then a holder of Trust Securities may directly institute a
proceeding for enforcement of payment to such holder directly of the principal
of or interest on the Subordinated Notes having a principal amount equal to the
aggregate liquidation amount of the Trust Securities of such holder on or after
the respective due date specified in the Subordinated Notes. The holders of
Trust Securities will not be able to exercise directly any other remedy
available to the holders of the Subordinated Notes unless the Property Trustee
fails to do so.
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VOTING RIGHTS
Except as described herein, under the Trust Act, the Trust Indenture Act and
under "Description of Guarantee--Modifications of the Guarantee; Assignment" in
the accompanying Prospectus, and as otherwise required by law and the
Declaration, the holders of the Preferred Securities will have no voting
rights.
Subject to the requirement of the Property Trustee obtaining a tax opinion in
certain circumstances set forth in the last sentence of this paragraph, the
holders of a majority in aggregate liquidation amount of the Preferred
Securities, voting separately as a class, have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Property Trustee, or to direct the exercise of any trust or power conferred
upon the Property Trustee under the Declaration, including the right to direct
the Property Trustee, as holder of the Subordinated Notes, to (i) exercise the
remedies available under the Indenture with respect to the Subordinated Notes,
(ii) waive any past Indenture Event of Default that is waivable under the
Subordinated Indenture, or (iii) exercise any right to rescind or annul a
declaration that the principal of all the Subordinated Notes shall be due and
payable; provided, however, that, where a consent or action under the
Subordinated Indenture would require the consent or act of more than a majority
of the holders in aggregate principal amount of Subordinated Notes (a "Super-
Majority") affected thereby (or all of such holders, as applicable), only the
holders of at least such Super-Majority of the Preferred Securities (or all of
such holders, as applicable) may direct the Property Trustee to give such
consent to take such action. The Property Trustee shall notify all holders of
the Preferred Securities of any notice of default received from the Indenture
Trustee with respect to the Subordinated Notes. Such notice shall state that
such Indenture Event of Default also constitutes a Declaration Event of
Default. Except with respect to directing the time, method and place of
conducting a proceeding for a remedy, the Property Trustee shall not take any
of the actions described in clauses (i), (ii) or (iii) above unless the
Property Trustee has obtained an opinion of independent tax counsel experienced
in such matters to the effect that, as a result of such action, the Trust will
not fail to be classified as a grantor trust for United States federal income
tax purposes.
In the event the consent of the Property Trustee, as the holder of the
Subordinated Notes, is required under the Subordinated Indenture with respect
to any amendment, modification or termination of the Subordinated Indenture,
the Property Trustee shall request the direction of the holders of the Trust
Securities with respect to such amendment, modification or termination and
shall vote with respect to such amendment, modification or termination as
directed by a majority in liquidation amount of the Trust Securities voting
together as a single class; provided, however, that where a consent under the
Subordinated Indenture would require the consent of a Super Majority, the
Property Trustee may only give such consent at the direction of the holders of
at least the proportion in liquidation amount of the Trust Securities which the
relevant Super Majority represents of the aggregate principal amount of the
Subordinated Notes outstanding. The Property Trustee shall not take any such
action in accordance with the directions of the holders of the Trust Securities
unless the Property Trustee has obtained an opinion of independent tax counsel
experienced in such matters to the affect that for the purposes of United
States federal income tax the Trust will not be classified as other than a
grantor trust.
A waiver of an Indenture Event of Default will constitute a waiver of the
corresponding Declaration Event of Default.
Any required approval or direction of holders of Preferred Securities may be
given at a separate meeting of holders of Preferred Securities convened for
such purpose, at a meeting of all of the holders of Trust Securities or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which holders of Preferred Securities are entitled to vote, or of
any matter upon which action by written consent of such holders is to be taken,
to be mailed to each holder of record of Preferred Securities. Each such notice
will include a statement setting forth the following information: (i) the date
of such meeting or the date by which such action is to be taken; (ii) a
description of any resolution proposed for adoption at such meeting on which
such holders are entitled to vote or of such matter upon which written consent
is sought; and (iii) instructions for the delivery of proxies or consents. No
vote or consent of the holders of Preferred
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Securities will be required for the Trust to redeem and cancel Preferred
Securities or distribute Subordinated Notes, Adjusted Subordinated Notes or
Depositary Shares in accordance with the Declaration. The Regular Trustees
shall be obligated to call a meeting of the holders of the Preferred Securities
if directed to do so by the holders of at least 10% in liquidation amount of
the Preferred Securities requesting such meeting in accordance with the terms
of the Declaration.
Notwithstanding that holders of Preferred Securities are entitled to vote or
consent under any of the circumstances described above, any of the Preferred
Securities that are owned at such time by GWFC or any entity directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, GWFC shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if such Preferred Securities
were not outstanding.
The procedures by which holders of Preferred Securities may exercise their
voting rights are described below. See "Book-Entry Only Issuance--The
Depository Trust Company" below.
Holders of the Preferred Securities will have no rights to appoint or remove
the Regular Trustees, who may be appointed, removed or replaced solely by GWFC
as the indirect or direct holder of all the Common Securities.
MODIFICATION OF THE DECLARATION
The Declaration may be modified and amended if approved by a majority of the
Regular Trustees (and in certain circumstances the Property Trustee); provided
that, if any proposed amendment provides for, or the Regular Trustees otherwise
propose to effect, (i) any action that would adversely affect the powers,
preferences or special rights of the Trust Securities, whether by way of
amendment to the Declaration or otherwise, or (ii) the liquidation,
dissolution, winding-up or termination of the Trust other than pursuant to the
terms of the Declaration, then the holders of the Trust Securities voting
together as a single class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of at least 66 2/3% in liquidation amount of the Trust Securities;
provided that, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Preferred Securities or the Common Securities,
then only the affected class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of 66 2/3% in liquidation amount of such class of Trust Securities.
Notwithstanding the foregoing, no amendment or modification may be made to
the Declaration if such amendment or modification would (i) cause the Trust to
be classified for purposes of United States federal income taxation as other
than a grantor trust, (ii) reduce or otherwise adversely affect the powers of
the Property Trustee in contravention of the Trust Indenture Act or (iii) cause
the Trust to be deemed an "investment company" which is required to be
registered under the 1940 Act.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
The Trust may not consolidate, amalgamate, merge with or into, or be replaced
by, or convey, transfer or lease its properties and assets substantially as an
entirety to, any corporation or other body, except as described below. The
Trust may, with the consent of a majority of the Regular Trustees and without
the consent of the holders of the Trust Securities, consolidate, amalgamate,
merge with or into, or be replaced by a trust organized as such under the laws
of any State; provided that, (i) such successor entity either (x) expressly
assumes all of the obligations of the Trust under the Trust Securities or (y)
substitutes for the Trust Securities other securities having substantially the
same terms as the Trust Securities (the "Successor Securities"), so long as the
Successor Securities rank the same as the Preferred Securities rank with
respect to distributions and payments upon liquidation, redemption and
maturity, (ii) GWFC expressly acknowledges a trustee of such successor entity
possessing the same powers and duties as the Property Trustee as the holder of
the Subordinated Notes, (iii) the Preferred Securities or any Successor
Securities are listed, or any Successor
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Securities will be listed upon notification of issuance, on any national
securities exchange or with another organization on which the Preferred
Securities are then listed or quoted, (iv) such merger, consolidation,
amalgamation or replacement does not cause the Preferred Securities (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, consolidation, amalgamation
or replacement does not adversely affect the rights, preferences and privileges
of the holders of the Trust Securities (including any Successor Securities) in
any material respect (other than with respect to any dilution of the holders'
interest in the new entity), (vi) such successor entity has a purpose identical
to that of the Trust, (vii) prior to such merger, consolidation, amalgamation
or replacement, GWFC has received an opinion of independent counsel to the
Trust experienced in such matters to the effect that, (A) such merger,
consolidation, amalgamation or replacement does not adversely affect the
rights, preferences and privileges of the holders of the Trust Securities
(including any Successor Securities) in any material respect (other than with
respect to any dilution of the holders' interest in the new entity), and (B)
following such merger, consolidation, amalgamation or replacement, neither the
Trust nor such successor entity will be required to register as an investment
company under the 1940 Act and (viii) GWFC guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Guarantee and the Common Securities guarantee (as defined in the
accompanying Prospectus). Notwithstanding the foregoing, the Trust shall not,
except with the consent of holders of 100% in liquidation amount of the Trust
Securities, consolidate, amalgamate, merge with or into, or be replaced by any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it, if such consolidation, amalgamation, merger or
replacement would cause the Trust or such successor entity to be classified as
other than a grantor trust for United States federal income tax purposes.
There are no provisions which afford the holders of the Preferred Securities
protection in the event of a highly leveraged transaction, reorganization,
restructuring, merger or similar transaction involving GWFC. There are also no
provisions which require the repurchase of the Preferred Securities upon a
change in control of GWFC.
BOOK-ENTRY ONLY ISSUANCE--THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC") will act as initial securities
depositary for the Preferred Securities. The Preferred Securities will be
issued only as fully-registered securities registered in the name of Cede & Co.
(DTC's nominee). One or more fully-registered global Preferred Securities
certificates, representing the total aggregate number of Preferred Securities,
will be issued to or on behalf of DTC.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of securities in definitive form. Such laws may impair
the ability to transfer beneficial interests in the global Preferred Securities
as represented by a global certificate.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations ("Direct Participants"). DTC is owned by a number of its
Direct Participants and by the New York Stock Exchange, the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others, such as securities brokers and
dealers, banks and trust companies that clear transactions through or maintain
a direct or indirect custodial relationship with a Direct Participant either
directly or indirectly ("Indirect Participants"). The rules applicable to DTC
and its Participants are on file with the Securities and Exchange Commission.
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Purchases of Preferred Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest of each actual purchaser of
each Preferred Security ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the Direct
or Indirect Participants through which the Beneficial Owners purchased
Preferred Securities. Transfers of ownership interests in the Preferred
Securities are to be accomplished by entries made on the books of Participants
acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in the Preferred
Securities, except in the event that use of the book-entry system for the
Preferred Securities is discontinued.
To facilitate subsequent transfers, all the Preferred Securities deposited by
Participants with DTC are registered in the name of DTC's nominee, Cede & Co.
The deposit of Preferred Securities with DTC and their registration in the name
of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of
the actual Beneficial Owners of the Preferred Securities. DTC's records reflect
only the identity of the Direct Participants to whose accounts such Preferred
Securities are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants,
by Direct Participants to Indirect Participants and by Direct Participants and
Indirect Participants to Beneficial Owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements that may be in
effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the
Preferred Securities are being redeemed, DTC will reduce the amount of the
interest of each Direct Participant in such Preferred Securities in accordance
with its procedures; provided that if, as a result of such redemption, Direct
Participants would hold fractional interests in the Preferred Securities, DTC
will adjust the amount of the interest of each Direct Participant to be
redeemed to avoid such fractional interest.
Although voting with respect to the Preferred Securities is limited, in those
cases where a vote is required, neither DTC nor Cede & Co. will itself consent
or vote with respect to Preferred Securities. Under its usual procedures, DTC
would mail an Omnibus Proxy to the Trust as soon as possible after the record
date. The Omnibus Proxy assigns Cede & Co. consenting or voting rights to those
Direct Participants to whose accounts the Preferred Securities are credited on
the record date (identified in a listing attached to the Omnibus Proxy). GWFC
and the Trust believe that the arrangements among DTC, Direct and Indirect
Participants, and Beneficial Owners will enable the Beneficial Owners to
exercise rights equivalent in substance to the rights that can be directly
exercised by a holder of a beneficial interest in the Trust.
Distribution payments on the Preferred Securities will be made to DTC. DTC's
practice is to credit Direct Participants' accounts on the relevant payment
date in accordance with their respective holdings shown on DTC's records unless
DTC has reason to believe that it will not receive payments on such payment
date. Payments by participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the account of customers in bearer form or registered in "street
name," and such payments will be the responsibility of such Participant and not
of DTC, the Trust or GWFC, subject to any statutory or regulatory requirements
to the contrary that may be in effect from time to time. Payment of
distributions to DTC is the responsibility of the Trust; disbursement of such
payments to the Beneficial Owners is the responsibility of Direct and Indirect
Participants.
Except as provided herein, a Beneficial Owner in a global Preferred Security
certificate will not be entitled to receive physical delivery of Preferred
Securities. Accordingly, each Beneficial Owner must rely on the procedures of
DTC to exercise any rights under the Preferred Securities.
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DTC may discontinue providing its services as securities depositary with
respect to the Preferred Securities at any time by giving reasonable notice to
the Trust. Under such circumstances, in the event that a successor securities
depositary is not obtained, Preferred Securities certificates are required to
be printed and delivered. Additionally, the Regular Trustees (with the consent
of GWFC) may decide to discontinue use of the system of book-entry transfers
through DTC (or any successor depositary) with respect to the Preferred
Securities. In that event, certificates for the Preferred Securities will be
printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that GWFC and the Trust believe to be reliable,
but neither GWFC nor the Trust takes responsibility for the accuracy thereof.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, prior to the occurrence of a default with respect to
the Trust Securities, undertakes to perform only such duties as are
specifically set forth in the Declaration and, after default, shall exercise
the same degree of care as a prudent individual would exercise in the conduct
of his or her own affairs. Subject to such provisions, the Property Trustee is
under no obligation to exercise any of the powers vested in it by the
Declaration at the request of any holder of Preferred Securities, unless
offered reasonable indemnity by such holder against the costs, expenses and
liabilities which might be incurred thereby.
PAYING AGENT
In the event that the Preferred Securities do not remain in book-entry only
form, the following provisions would apply:
The Property Trustee will act as paying agent, and may designate an
additional or substitute paying agent at any time.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of the Trust, but upon payment (with the giving of such
indemnity as the Trust or GWFC may require) in respect of any tax or other
government charges that may be imposed in relation to it.
The Trust will not be required to register or cause to be registered the
transfer of Preferred Securities after such Preferred Securities have been
called for redemption.
GOVERNING LAW
The Declaration and the Preferred Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
MISCELLANEOUS
The Regular Trustees are authorized and directed to operate the Trust in such
a way so that the Trust will not be required to register as an "investment
company" under the 1940 Act or be characterized as other than a grantor trust
for United States federal income tax purposes. GWFC is authorized and directed
to conduct its affairs so that the Subordinated Notes will be treated as
indebtedness of GWFC for United States federal income tax purposes. In this
connection, GWFC and the Regular Trustees are authorized to take any action,
not inconsistent with applicable law, the certificate of trust of the Trust or
the certificate of incorporation of GWFC, as applicable, that each of GWFC and
the Regular Trustees determines in its discretion to be necessary or desirable
to achieve such end, as long as such action does not adversely affect the
interests of the holders of the Preferred Securities.
Holders of the Preferred Securities have no preemptive rights.
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DESCRIPTION OF THE SUBORDINATED NOTES
Set forth below is a description of the specific terms of the Subordinated
Notes in which the Trust will invest the proceeds from the issuance and sale of
the Trust Securities. This description supplements the description of the
general terms and provisions of the Subordinated Notes set forth in the
accompanying Prospectus under the caption "Description of Debt Securities" and
in particular "Description of Debt Securities--Particular Terms of the
Subordinated Debt Securities Issued to the Trust." The following description of
the material terms and provisions of the Subordinated Notes does not purport to
be complete and is subject to, and is qualified in its entirety by reference
to, the description in the accompanying Prospectus and the Indenture, dated as
of September 12, 1990, as amended and supplemented by a First Supplemental
Indenture, dated April 30, 1993 and a Second Supplemental Indenture, dated as
of December 6, 1995 (as amended and supplemented, the "Subordinated
Indenture"), between the Company and Harris Trust and Savings Bank, as
Indenture Trustee, filed as an exhibit to the Registration Statement of which
this Prospectus Supplement and the accompanying Prospectus form a part. Certain
capitalized terms used herein are defined in the Subordinated Indenture.
Under certain circumstances involving the dissolution of the Trust following
the occurrence of a Special Event or Regulatory Event, Subordinated Notes or
Adjusted Subordinated Notes may be distributed to the holders of the Trust
Securities in liquidation of the Trust. See "Description of the Offered
Preferred Securities--Special Event Redemption or Distribution" and "--
Regulatory Event Distribution or Conversion."
If the Subordinated Notes or Adjusted Subordinated Notes are distributed to
the holders of the Preferred Securities, GWFC will use its best efforts to have
the Subordinated Notes or Adjusted Subordinated Notes, as the case may be,
listed on the New York Stock Exchange or on such other exchange on which the
Preferred Securities are then listed or quoted.
The terms of the Adjusted Subordinated Notes, if issued, will be identical to
the terms of the Subordinated Notes, except for the reduction of the annual
interest rate. The following discussion of the terms of the Subordinated Notes
applies to the Adjusted Subordinated Notes, except as otherwise expressly
stated.
The Subordinated Notes will not be savings accounts or deposits and will not
be insured by the FDIC, the United States or any agency or fund of the United
States.
GENERAL
The Subordinated Notes will be issued as unsecured debt under the
Subordinated Indenture. The Subordinated Notes will be limited in aggregate
principal amount to approximately $103 million, such amount being the sum of
the aggregate stated liquidation amount of the Preferred Securities and the
capital contributed by GWFC in exchange for the Common Securities (the "GWFC
Payment").
The Subordinated Notes are not subject to a sinking fund provision. The
entire principal amount of the Subordinated Notes will mature and become due
and payable, together with any accrued and unpaid interest thereon including
Compound Interest (as hereinafter defined) and Additional Interest (as
hereinafter defined), if any, on December 31, 2025, subject to the election of
GWFC to extend the scheduled maturity date of the Subordinated Notes to a date
not later than December 31, 2044, which election is subject to GWFC's
satisfying certain financial covenants. See "Option to Extend Maturity Date"
below.
If Subordinated Notes or Adjusted Subordinated Notes are distributed to
holders of Preferred Securities in liquidation of such holders' interests in
the Trust, such Subordinated Notes or Adjusted Subordinated Notes, as the case
may be, will initially be issued as a Global Security (as defined below). As
described herein, under certain limited circumstances, Subordinated Notes or
Adjusted Subordinated Notes may be issued in certificated form in exchange for
a Global Security (as defined below). See "Book-Entry and Settlement" below. In
the event that Subordinated Notes or Adjusted Subordinated Notes are issued in
certificated form,
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such Subordinated Notes or Adjusted Subordinated Notes will be in denominations
of $25 and integral multiples thereof and may be transferred or exchanged at
the offices described below. Payments on Subordinated Notes or Adjusted
Subordinated Notes, as the case may be, issued as a Global Security will be
made to DTC, a successor depositary or, in the event that no depositary is
used, to a Paying Agent for the Subordinated Notes or Adjusted Subordinated
Notes, as the case may be. In the event Subordinated Notes or Adjusted
Subordinated Notes are issued in certificated form, principal and interest will
be payable, the transfer of the Subordinated Notes or Adjusted Subordinated
Notes will be registrable and Subordinated Notes or Adjusted Subordinated Notes
will be exchangeable for Subordinated Notes or Adjusted Subordinated Notes, as
the case may be, of other denominations of a like aggregate principal amount at
the corporate trust office of the Indenture Trustee; provided that, payment of
interest may be made at the option of GWFC by check mailed to the address of
the persons entitled thereto.
INTEREST
Except as described under "Description of the Offered Preferred Securities--
Regulatory Event Distribution or Conversion," each Subordinated Note shall bear
interest at the rate of 8 1/4% per annum (the "Original Coupon Rate") from the
original date of issuance, payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year (each, an "Interest Payment Date"),
commencing December 31, 1995, to the person in whose name such Subordinated
Note is registered, subject to certain exceptions, at the close of business on
the Business Day next preceding such Interest Payment Date. In the event the
Subordinated Notes shall not continue to remain in book-entry only form, GWFC
shall have the right to select such record dates which shall be not less than
one Business Day prior to each Interest Payment Date.
In the event the Adjusted Subordinated Notes are issued, each Adjusted
Subordinated Note shall bear interest at the rate of 7 3/4% per annum (the
"Adjusted Rate" and together with the Original Coupon Rate, the "Coupon Rate")
from the date the Adjusted Subordinated Notes are distributed to holders of
Trust Securities, and shall otherwise have payment and other terms identical to
the terms of the Subordinated Notes.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. The amount of interest payable for
any period shorter than a full quarterly period will be computed on the basis
of the actual number of days elapsed per 30-day month. In the event that any
date on which interest is payable on the Subordinated Notes is not a Business
Day, then payment of the interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
If at any time the Trust shall be required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other taxing authority, then, in
any such case, GWFC will pay as additional interest ("Additional Interest")
such additional amounts as shall be required so that the net amounts received
and retained by the Trust after paying such taxes, duties, assessments or other
governmental changes will be not less than the amounts the Trust would have
received had no such taxes, duties, assessments or other governmental charges
been imposed. This right shall not accrue to any holder of the Subordinated
Notes other than the Trust.
OPTION TO EXTEND MATURITY DATE
The maturity date of the Subordinated Notes is December 31, 2025 (the
"Scheduled Maturity Date"). GWFC, however, may, before the Scheduled Maturity
Date, extend such maturity date no more than one time, for up to an additional
19 years from the Scheduled Maturity Date, provided that (a) GWFC is not in
bankruptcy or otherwise insolvent, (b) GWFC is not in default on the
Subordinated Notes, (c) GWFC has
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made timely payments on the Subordinated Notes for the immediately preceding 18
months without deferrals, (d) the Trust is not in arrears on payments of
distributions on the Preferred Securities, and (e) the Subordinated Notes are
rated in one of the four highest rating categories by either Standard & Poor's
Rating Group, Moody's Investors Service, Inc., Fitch Investor Services, Inc.,
Duff & Phelps Credit Rating Company or any other nationally recognized
statistical rating organization. Pursuant to the Declaration, the Regular
Trustees are required to give notice of GWFC's election to extend the Scheduled
Maturity Date to the holders of the Preferred Securities.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
GWFC shall have the right at any time, and from time to time, during the term
of the Subordinated Notes to defer payments of interest by extending the
interest payment period for a period not exceeding 20 consecutive quarters. To
the extent permitted by applicable law, interest, the payment of which has been
deferred during such Extension Period, will bear interest at the applicable
Coupon Rate, compounded quarterly ("Compound Interest") during the term of such
Extension Period. At the end of any such Extension Period, GWFC shall pay all
interest then accrued and unpaid (including any Compound Interest and
Additional Interest); provided, that, during any such Extension Period, (a)
GWFC shall not, and shall cause any subsidiary of GWFC that is not a wholly
owned subsidiary of GWFC not to, declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or the capital
stock of any such subsidiary, and (b) GWFC shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities (including guarantees) issued by GWFC which rank pari passu
with or junior to the Subordinated Notes; provided, however, that the foregoing
restriction (a) does not apply to any stock dividend paid by GWFC, or any of
its subsidiaries, where the dividend stock is the same stock as that on which
the dividend is being paid. Prior to the termination of any such Extension
Period, GWFC may further defer payments of interest by extending the interest
payment period, provided that such Extension Period together with all such
previous and further extensions thereof may not exceed 20 consecutive quarters
or extend beyond the maturity of the Subordinated Notes. Upon the termination
of any Extension Period and the payment of all amounts then due, GWFC may
select a new Extension Period, as if no Extension Period had previously been
declared, subject to the above requirements. No interest during an Extension
Period, except at the end thereof, shall be due and payable. GWFC has no
intention of exercising its rights to defer payments of interest by extending
the interest payment period on the Subordinated Notes and considers it unlikely
that it will exercise that right in the future. If the Property Trustee shall
be the sole holder of the Subordinated Notes, GWFC shall give the Regular
Trustees and the Property Trustee notice of its selection of such Extension
Period one Business Day prior to the earlier of (i) the date distributions on
the Preferred Securities are payable or (ii) the date the Regular Trustees are
required to give notice to the New York Stock Exchange or other applicable
self-regulatory organization or to holders of the Preferred Securities of the
record date or the date such distribution is payable, but in any event no less
than one Business Day prior to such record date. The Regular Trustees shall
give notice of GWFC's selection of such Extension Period to the holders of the
Preferred Securities. If the Property Trustee shall not be the sole holder of
the Subordinated Notes, GWFC shall give the holders of the Subordinated Notes
notice of its selection of such Extension Period ten Business Days prior to the
earlier of (i) the Interest Payment Date or (ii) the date GWFC is required to
give notice to the New York Stock Exchange or other applicable self-regulatory
organization or to holders of the Subordinated Notes of the record or payment
date of such related interest payment.
OPTIONAL REDEMPTION
GWFC shall have the right to redeem the Subordinated Notes, in whole or in
part, from time to time, on or after December 31, 2000, or at any time in
certain circumstances upon the occurrence of a Tax Event or in whole for a
limited time upon the occurrence of a Regulatory Redemption Event as described
under "Description of the Offered Preferred Securities--Special Event
Redemption or Distribution" and "--Regulatory Redemption Event," upon not less
than 30 nor more than 60 days' notice, at a Redemption Price equal to 100% of
the principal amount to be redeemed plus any accrued and unpaid interest,
including
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Compound and Additional Interest, if any, to the redemption date. If a partial
redemption of the Preferred Securities resulting from a partial redemption of
the Subordinated Notes would result in the delisting of the Preferred
Securities, GWFC may only redeem the Subordinated Notes in whole.
If, following a distribution of Adjusted Subordinated Notes, holders of
Adjusted Subordinated Notes having an aggregate principal amount of 10% or less
of the original aggregate principal amount of Subordinated Notes purchased by
the Trust elect not to have their Adjusted Subordinated Notes converted into
Depositary Shares, GWFC will have the option to redeem all outstanding Adjusted
Subordinated Notes at such Redemption Price on any Business Day during the
period from the Distribution Date on which the conversion of Adjusted
Subordinated Notes into Depositary Shares is to occur, to and including the
next succeeding Distribution Date. GWFC will give notice of its intent to
redeem such Adjusted Subordinated Notes to the holders thereof at least 30 but
not more than 60 days prior to the date on which such redemption is to occur.
SUBORDINATION
The Subordinated Indenture provides that the Subordinated Notes are
subordinated and junior in right of payment to all present and future Senior
Indebtedness of GWFC. See "Description of Debt Securities--Subordination of
Subordinated Debt Securities" in the accompanying Prospectus. The Subordinated
Indenture does not limit the aggregate amount of Senior Indebtedness which may
be issued by GWFC. As of September 30, 1995, Senior Indebtedness of GWFC
aggregated approximately $673 million. In addition, because GWFC is a holding
company, its obligations under the Subordinated Notes will be effectively
subordinated to all existing and future liabilities of its subsidiaries. At
September 30, 1995, such subsidiaries had total liabilities of approximately
$41.2 billion.
CERTAIN COVENANTS
If (i) there shall have occurred any event that would constitute an Event of
Default under the Subordinated Indenture or (ii) GWFC shall be in default with
respect to its payment of any obligations under the Guarantee, then (a) GWFC
shall not, and shall cause any subsidiary of GWFC that is not a wholly owned
subsidiary of GWFC not to, declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase or make a liquidation
payment with respect to, any of its capital stock or the capital stock of any
such subsidiary, and (b) GWFC shall not make any payment of interest, principal
or premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees) issued by GWFC which rank pari passu with or junior to
the Subordinated Notes; provided, however, that the foregoing restriction (a)
does not apply to any stock dividend paid by GWFC, or any of its subsidiaries,
where the dividend stock is the same stock as that on which the dividend is
being paid.
If GWFC shall have given notice of its election of an Extension Period as
provided in the Subordinated Indenture and such period, or any extension
thereof, shall be continuing, then (a) GWFC shall not, and shall cause any
subsidiary of GWFC that is not a wholly owned subsidiary of GWFC not to,
declare or pay any dividend on, make any distributions with respect to, or
redeem, purchase or acquire, or make a liquidation payment with respect to, any
of its capital stock or the capital stock of any such subsidiary, and (b) GWFC
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities (including guarantees) issued
by GWFC which rank pari passu with or junior to the Subordinated Notes;
provided, however, that the foregoing restriction (a) does not apply to any
stock dividend paid by GWFC, or any of its subsidiaries, where the dividend
stock is the same stock as that on which the dividend is being paid.
For so long as the Trust Securities remain outstanding, GWFC will covenant
(i) to directly or indirectly maintain 100% ownership of the Common Securities
of the Trust; provided, however, that any permitted successor of GWFC under the
Subordinated Indenture may succeed to GWFC's ownership of such Common
Securities, and (ii) to use its reasonable efforts to cause the Trust (a) to
remain a statutory business trust,
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except in connection with the distribution of Subordinated Notes or Adjusted
Subordinated Notes to the holders of Trust Securities in liquidation of the
Trust, the redemption of all of the Trust Securities of the Trust, or certain
mergers, consolidations or amalgamations, each as permitted by the Declaration,
and (b) to otherwise continue to be classified as a grantor trust for United
States federal income tax purposes.
INDENTURE EVENTS OF DEFAULT
An Indenture Event of Default is: (a) the failure to pay principal of any of
the Subordinated Notes when due; provided, however, that a valid extension by
GWFC of the maturity for the Subordinated Notes shall not constitute a default
in the payment for this purpose; (b) the failure to pay any interest on any of
the Subordinated Notes when due, continued for 10 days; provided, however, that
a valid extension by GWFC of the interest payment period for the Subordinated
Notes shall not constitute a default in the payment for this purpose; (c)
failure to perform any other covenant of GWFC in the Subordinated Indenture
(other than a covenant included in the Subordinated Indenture solely for the
benefit of one or more series of Debt Securities other than the Subordinated
Notes), continued for 60 days after written notice as provided in the
Subordinated Indenture; (d) certain events of bankruptcy, insolvency,
conservatorship, receivership or reorganization; (e) a default under any
mortgage, indenture or instrument evidencing any indebtedness for borrowed
money by GWFC (including the Subordinated Indenture) resulting in an aggregate
principal amount exceeding $10,000,000 becoming or being declared due and
payable prior to its maturity date or constituting a failure to pay at a
maturity an aggregate principal amount exceeding $10,000,000 unless such
acceleration has been rescinded or annulled or such indebtedness has been
discharged within 10 days after written notice to GWFC by the Indenture Trustee
or holders of at least 25% in aggregate principal amount of the outstanding
Subordinated Notes declaring a default or GWFC is contesting the validity of
such default in good faith by appropriate proceedings; and (f) the voluntary or
involuntary liquidation, dissolution, winding-up or termination of the Trust to
which (or to the Trustee of the Trust to which) Subordinated Notes were issued
in connection with the issuance of the Trust Securities by the Trust, except in
connection with the distribution of the Subordinated Notes to the holders of
Trust Securities in liquidation of the Trust, the redemption of all the Trust
Securities, or certain mergers, consolidations or amalgamations, each as
permitted by the Declaration.
If any Indenture Event of Default shall occur and be continuing, the Property
Trustee, as the holder of the Subordinated Notes, will have the right to
declare the principal of and the interest on the Subordinated Notes (including
any Compound Interest and Additional Interest, if any) and any other amounts
payable under the Subordinated Indenture to be forthwith due and payable and to
enforce its other rights as a creditor with respect to the Subordinated Notes.
See "Description of Debt Securities--Events of Default" in the accompanying
Prospectus for a description of the Events of Default. An Indenture Event of
Default also constitutes a Declaration Event of Default. The holders of
Preferred Securities in certain circumstances have the right to direct the
Property Trustee to exercise its rights as the holder of the Subordinated
Notes. See "Description of the Offered Preferred Securities--Declaration Events
of Default" and "--Voting Rights."
BOOK-ENTRY AND SETTLEMENT
If distributed to holders of Preferred Securities in connection with the
involuntary or voluntary dissolution, winding-up or liquidation of the Trust as
a result of the occurrence of a Special Event or Regulatory Event, the
Subordinated Notes or Adjusted Subordinated Notes, as the case may be, will be
issued in the form of one or more global certificates (each a "Global
Security") registered in the name of the depositary or its nominee. Except
under the limited circumstances described below, Subordinated Notes or Adjusted
Subordinated Notes represented by the Global Security will not be exchangeable
for, and will not otherwise be issuable as, Subordinated Notes or Adjusted
Subordinated Notes, as the case may be, in definitive form. The Global
Securities described above may not be transferred except by the depositary to a
nominee of the depositary or by a nominee of the depositary to the depositary
or another nominee of the depositary or to a successor depositary or its
nominee.
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The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of such securities in definitive form. Such laws may
impair the ability to transfer beneficial interests in such a Global Security.
Except as provided below, owners of beneficial interests in such a Global
Security will not be entitled to receive physical delivery of Subordinated
Notes or Adjusted Subordinated Notes in definitive form and will not be
considered the holders (as defined in the Subordinated Indenture) thereof for
any purpose under the Subordinated Indenture, and no Global Security
representing Subordinated Notes or Adjusted Subordinated Notes shall be
exchangeable, except for another Global Security of like denomination and tenor
to be registered in the name of the depositary or its nominee or to a successor
depositary or its nominee. Accordingly, each Beneficial Owner must rely on the
procedures of the depositary or if such person is not a Participant, on the
procedures of the Participant through which such person owns its interest to
exercise any rights of a holder under the Subordinated Indenture.
THE DEPOSITARY
If Subordinated Notes or Adjusted Subordinated Notes are distributed to
holders of Preferred Securities in liquidation of such holders' interests in
the Trust, DTC will act as securities depositary for the Subordinated Notes or
Adjusted Subordinated Notes, as the case may be. For a description of DTC and
the specific terms of the depositary arrangements, see "Description of the
Offered Preferred Securities--Book-Entry Only Issuance--The Depository Trust
Company." As of the date of this Prospectus Supplement, the description herein
of DTC's book-entry system and DTC's practices as they relate to purchases,
transfers, notices and payments with respect to the Preferred Securities apply
in all material respects to any debt obligations represented by one or more
Global Securities held by DTC. GWFC may appoint a successor to DTC or any
successor depositary in the event DTC or such successor depositary is unable or
unwilling to continue as a depositary for the Global Securities.
None of GWFC, the Trust, the Indenture Trustee, any paying agent and any
other agent of GWFC or the Indenture Trustee will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in a Global Security for such Subordinated
Notes or Adjusted Subordinated Notes or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
DISCONTINUANCE OF THE DEPOSITARY'S SERVICES
A Global Security shall be exchangeable for Subordinated Notes or Adjusted
Subordinated Notes, as the case may be, registered in the names of persons
other than the depositary or its nominee only if (i) the depositary notifies
GWFC that it is unwilling or unable to continue as a depositary for such Global
Security and no successor depositary shall have been appointed, (ii) the
depositary, at any time, ceases to be registered to act as such depositary and
no successor depositary shall have been appointed, or (iii) GWFC, in its sole
discretion, determines that such Global Security shall be so exchangeable. Any
Global Security that is exchangeable pursuant to the preceding sentence shall
be exchangeable for Subordinated Notes or Adjusted Subordinated Notes, as the
case may be, registered in such names as the depositary shall direct. It is
expected that such instructions will be based upon directions received by the
depositary from its Participants with respect to ownership of beneficial
interests in such Global Security.
MISCELLANEOUS
The Subordinated Indenture will provide that GWFC, in its capacity as issuer
of the Subordinated Notes, will pay all costs, expenses, debts and obligations
of the Trust other than with respect to the Trust Securities.
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EFFECT OF OBLIGATIONS UNDER THE
SUBORDINATED NOTES AND THE GUARANTEE
As set forth in the Declaration, the sole purpose of the Trust is to issue
the Trust Securities evidencing undivided beneficial interests in the assets of
the Trust, and to invest the proceeds from such issuance and sale in the
Subordinated Notes.
As long as payments of interest and other payments are made when due on the
Subordinated Notes, such payments will be sufficient to cover distributions and
payments due on the Trust Securities primarily because (i) the aggregate
principal amount of Subordinated Notes will be equal to the sum of the
aggregate stated liquidation amount of the Trust Securities; (ii) the interest
rate and payment dates on the Subordinated Notes will match the distribution
rate and distribution and other payment dates for the Preferred Securities;
(iii) GWFC shall pay for all costs, expenses, debts and obligations of the
Trust (other than with respect to the Trust Securities); and (iv) the
Declaration provides that the Regular Trustees shall not take any action, or
cause or permit the Trust to, among other things, engage in any activity, that
is not consistent with the purposes of the Trust.
Payments of distributions (to the extent funds therefor are available) and
other payments due on the Preferred Securities (to the extent funds therefor
are available) are guaranteed by GWFC as and to the extent set forth under
"Description of Guarantee" in the accompanying Prospectus. If GWFC does not
make interest payments on the Subordinated Notes purchased by the Trust, it is
expected that the Trust will not have sufficient funds to pay distributions on
the Preferred Securities. The Guarantee does not apply to any payment of
distributions unless and until the Trust has sufficient funds for the payment
of such distributions.
If GWFC fails to make interest or other payments on the Subordinated Notes
when due (taking into account any Extension Period), the Declaration provides a
mechanism whereby the holders of the Preferred Securities, using the procedures
described in "Description of the Offered Preferred Securities--Voting Rights,"
may direct the Property Trustee to enforce its rights under the Subordinated
Notes, including proceeding directly against GWFC to enforce the Subordinated
Notes.
If GWFC fails to make payments under the Guarantee, the Guarantee provides a
mechanism whereby the holders of the Preferred Securities may direct the
Guarantee Trustee to enforce its rights thereunder. Any holder of Preferred
Securities may institute a legal proceeding directly against GWFC to enforce
the Guarantee Trustee's rights under the Guarantee, without first instituting a
legal proceeding against the Trust, the Guarantee Trustee or any other person
or entity.
The obligations of GWFC under the Declaration, the Guarantee, the
Subordinated Notes and the Subordinated Indenture, taken together, provide a
full and unconditional guarantee on a subordinated basis by GWFC of payments
due on the Preferred Securities. See "Description of Guarantee--General" in the
accompanying Prospectus.
DESCRIPTION OF DEPOSITARY SHARES
The following summary description of the Depositary Shares supplements the
information set forth under the heading "Description of Depositary Shares" in
the accompanying Prospectus, to which reference is hereby made. The following
description of the material terms and provisions of the Depositary Shares does
not purport to be complete and is subject to and qualified in its entirety by
reference to the Deposit Agreement referred to below which will be filed with
the Securities and Exchange Commission at or prior to the time of the issuance
of the Depositary Shares.
GENERAL
Each Depositary Share represents a one-tenth interest in a share of the
Preferred Stock. The shares of the Preferred Stock underlying the Depositary
Shares will be deposited with Harris Trust Company of
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California, as depositary ("Share Depositary"), under a Deposit Agreement (the
"Deposit Agreement") among GWFC, the Share Depositary and the holders from time
to time of the depositary receipts issued by the Share Depositary thereunder
(the "Depositary Receipts"). The Depositary Receipts so issued will evidence
the Depositary Shares. Subject to the terms of the Deposit Agreement, each
owner of a Depositary Share will be entitled through the Share Depositary, in
proportion to the one-tenth interest in a share of the Preferred Stock
underlying such Depositary Share, to all rights and preferences of a share of
the Preferred Stock (including dividend, voting, redemption and liquidation
rights). Since each share of the Preferred Stock entitles the holder thereof to
one vote on matters on which the Preferred Stock is entitled to vote, each
Depositary Share will, in effect, entitle the holder thereof to one-tenth of a
vote thereon, rather than one full vote. See "Description of Cumulative
Preferred Stock--Voting Rights" herein and "Description of Depositary Shares"
in the accompanying Prospectus.
If the Depositary Shares are distributed to the holders of Preferred
Securities, GWFC will use its best efforts to have the Depositary Shares listed
on the New York Stock Exchange or on such other exchange on which the Preferred
Securities are then listed or quoted.
The Depositary Shares will not be savings accounts or deposits and will not
be insured by the FDIC, the United States or any agency or fund of the United
States.
CHARGES OF DEPOSITARY
GWFC will pay all transfer and other taxes and governmental charges arising
solely from the existence of the depositary arrangements. GWFC will pay charges
of the Share Depositary in connection with the initial deposit of the Preferred
Stock and the initial issuance of the Depositary Receipts evidencing the
Depositary Shares, any redemption of the Preferred Stock and any withdrawals of
Preferred Stock by the holders of Depositary Shares. Holders of Depositary
Shares will pay other transfer and other taxes and governmental charges and
such other charges as are expressly provided in the Deposit Agreement to be for
their accounts.
BOOK-ENTRY SETTLEMENT
If distributed upon the conversion of Adjusted Subordinated Notes, the
Depositary Receipts will be issued in the form of one or more global
certificates (each a "Global Security") registered in the name of the
depositary or its nominee. Except under the limited circumstances described
below, Depositary Receipts represented by the Global Security will not be
exchangeable for, and will not otherwise be issuable as, Depositary Receipts in
definitive form. The Global Securities described above may not be transferred
except by the depositary to a nominee of the depositary or by a nominee of the
depositary to the depositary or another nominee of the depositary or to a
successor depositary or its nominee.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of such securities in definitive form. Such laws may
impair the ability to transfer beneficial interests in such a Global Security.
Except as provided below, owners of beneficial interests in such a Global
Security will not be entitled to receive physical delivery of Depositary
Receipts in definitive form and will not be considered the holders (as defined
in the Deposit Agreement) thereof for any purpose under the Deposit Agreement
and no Global Security representing Depositary Receipts shall be exchangeable,
except for another Global Security of like denomination and tenor to be
registered in the name of the depositary or its nominee or to a successor
depositary or its nominee. Accordingly, each Beneficial Owner must rely on the
procedures of the depositary or, if such person is not a Participant, on the
procedures of the Participant through which such person owns its interest to
exercise any rights of a holder under the Deposit Agreement.
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THE DEPOSITARY
If Depositary Receipts are distributed, DTC will act as securities depositary
for the Depositary Receipts. For a description of DTC and the specific terms of
the depositary arrangements, see "Description of the Offered Preferred
Securities--Book-Entry Only Issuance--The Depository Trust Company." As of the
date of this Prospectus Supplement, the description herein of DTC's book-entry
system and DTC's practices as they relate to purchases, transfers, notices and
payments with respect to the Preferred Securities apply in all material
respects to any obligations represented by one or more Global Securities held
by DTC. GWFC may appoint a successor to DTC or any successor depositary in the
event DTC or such successor depositary is unable or unwilling to continue as a
depositary for the Global Securities.
None of GWFC, the Share Depositary and any agent of GWFC or the Share
Depositary will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a Global Security for such Depositary Receipts or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
DISCONTINUANCE OF THE DEPOSITARY'S SERVICES
A Global Security shall be exchangeable for Depositary Receipts registered in
the names of persons other than the depositary or its nominee only if (i) the
depositary notifies GWFC that it is unwilling or unable to continue as a
depositary for such Global Security and no successor depositary shall have been
appointed, (ii) the depositary at any time, ceases to be so registered to act
as such depositary and no successor depositary shall have been appointed, or
(iii) GWFC, in its sole discretion, determines that such Global Security shall
be so exchangeable. Any Global Security that is exchangeable pursuant to the
preceding sentence shall be exchangeable for Depositary Receipts registered in
such names as the depositary shall direct. It is expected that such
instructions will be based upon directions received by the depositary from its
Participants with respect to ownership of beneficial interests in such Global
Security.
DESCRIPTION OF CUMULATIVE PREFERRED STOCK
The following description of the particular terms of the shares of 8 1/4%
Cumulative Preferred Stock supplements the information set forth under the
heading "Description of Preferred Stock" in the accompanying Prospectus, to
which description reference is hereby made. The description of the material
provisions of the Preferred Stock set forth below does not purport to be
complete and is subject to and qualified in its entirety by reference to the
Certificate of Designations relating to the Preferred Stock which will be filed
with the Securities and Exchange Commission at or prior to the time of the
issuance of the Depositary Shares.
RANK
The Preferred Stock will rank on a parity as to payment of dividends and
distribution of assets upon dissolution, liquidation or winding up of GWFC with
each other outstanding series of the preferred stock of GWFC. The Preferred
Stock will rank prior to the Common Stock, $1.00 par value per share, of GWFC
(the "Common Stock") as to the payment of dividends and distribution of assets
upon dissolution, liquidation or winding up of GWFC. As of September 30, 1995,
the only shares of preferred stock of GWFC outstanding were 517,500 shares of
GWFC's 8 3/4% Cumulative Convertible Preferred Stock (the "Convertible
Preferred") and 660,000 shares of GWFC's 8.30% Cumulative Preferred Stock (the
"Cumulative Preferred"). The Convertible Preferred is subject to redemption, in
whole or in part, at the option of GWFC at $260.9375 per share during the
period from May 1, 1996 through April 30, 1997 and at decreasing prices
thereafter to $250 per share, in each case plus accrued and unpaid dividends to
the redemption date. The Convertible Preferred is convertible at any time into
Common Stock at a conversion rate of 12.255 shares of Common Stock for each
share of Convertible Preferred. The Cumulative Preferred is subject to
redemption in whole or in part, at any time on or after November 1, 1997, at
$250 per share plus accrued and unpaid dividends to the redemption date.
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See "Description of Common Stock--Rights" in the accompanying Prospectus for
a description of GWFC's Series A Junior Participating Preferred Stock, none of
which is outstanding as of the date of this Prospectus Supplement. The
Preferred Stock will rank prior to such Series A Preferred Stock as to both the
payment of dividends and any distribution of assets upon dissolution,
liquidation or winding up of GWFC.
DIVIDENDS
Holders of shares of the Preferred Stock will be entitled to receive, when,
as and if declared by the Board of Directors of GWFC out of funds of GWFC
legally available for payment, cash dividends at the rate of 8 1/4% per annum
(equivalent to $2.0625 per Depositary Share). Dividends on the Preferred Stock
will be payable quarterly on February 1, May 1, August 1 and November 1 of each
year (each a "Dividend Payment Date"), commencing on the first Dividend Payment
Date following the issuance of the Preferred Stock, at such annual rate. Each
dividend will be payable to holders of record as they appear on the stock books
of GWFC (or, if applicable, the records of the depositary) on such record
dates, not exceeding 45 days preceding the payment dates thereof, as shall be
fixed by the Board of Directors of GWFC. Dividends will be cumulative from the
date of original issue. Dividends payable on the Preferred Stock for any period
greater or less than a full dividend period shall be computed on the basis of a
360-day year consisting of twelve 30-day months. Dividends payable on the
Preferred Stock for each full dividend period shall be computed by dividing the
annual dividend rate by four.
REDEMPTION
Except as noted below, shares of the Preferred Stock will not be redeemable
prior to December 31, 2000. The shares of the Preferred Stock will be
redeemable at the option of GWFC, in whole or in part, at any time or from time
to time, on or after such date, on not less than 30 nor more than 60 days
notice by mail, at a redemption price of $250 per share (equivalent to $25 per
Depositary Share) plus accrued and unpaid dividends to the redemption date (the
"Share Redemption Price"). In addition, during a period of 90 days after the
occurrence of a Regulatory Redemption Event, GWFC may elect to redeem the
shares of Preferred Stock in whole on not less than 30 nor more than 60 days
notice by mail, at the Share Redemption Price. Under certain circumstances, the
redemption of the Preferred Stock may require the prior consent of GWFC's then
banking supervisory authority.
The Preferred Stock will not be subject to any sinking fund or other
obligation of GWFC to redeem or retire the Preferred Stock.
LIQUIDATION RIGHTS
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of GWFC, the holders of shares of Preferred Stock are entitled to
receive out of assets of GWFC available for distribution to stockholders,
before any distribution of assets is made to holders of Common Stock or of any
other shares of stock of GWFC ranking as to such a distribution junior to the
shares of Preferred Stock, liquidating distributions in the amount of $250 per
share (equivalent to $25 per Depositary Share) plus accrued and unpaid
dividends. After payment of such liquidating distributions, the holders of
shares of Preferred Stock will not be entitled to any further participation in
any distribution of assets by GWFC.
VOTING RIGHTS
Except as indicated below and under "Description of Preferred Stock--Voting
Rights" in the accompanying Prospectus, or except as expressly required by
applicable law, the holders of the Preferred Stock will not be entitled to vote
for any purpose.
If the equivalent of six quarterly dividends payable on the Preferred Stock
are in arrears, the number of directors of GWFC will be increased by two and
the holders of Preferred Stock, voting separately as a class with the holders
of shares of any one or more other series of preferred stock ranking on a
parity with the
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Preferred Stock as to payment of dividends and the distribution of assets upon
liquidation, dissolution or winding up of GWFC and upon which like voting
rights have been conferred and are exercisable, will be entitled to elect two
directors to fill such vacancies. Such right to elect two additional directors
shall continue until all dividends in arrears have been paid or declared and
set apart for payment. Each director elected by the holders of shares of the
Preferred Stock and all other classes of preferred stock whose holders are so
entitled to vote shall continue to serve as such director for the full term for
which he shall have been elected, notwithstanding that prior to the end of such
term such default shall cease to exist.
CONVERSION RIGHTS
Shares of the Preferred Stock will not be convertible into shares of any
other class or series of the capital stock of GWFC.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following summary of certain United States federal income tax
consequences of the purchase, ownership and disposition of the Preferred
Securities is based upon laws, regulations, rulings and decisions now in
effect, all of which are subject to change (with possible retroactive effect)
and possible differing interpretations. This discussion deals only with
Preferred Securities held as capital assets and does not purport to deal with
persons in special tax situations, such as financial institutions, insurance
companies, regulated investment companies, dealers in securities or currencies,
or persons whose functional currency is not the United States dollar. This
discussion also does not deal with holders other than the original purchasers
of the Preferred Securities or with holders who are not U.S. Holders (as
defined below). Persons considering the purchase of the Preferred Securities
should consult their tax advisors concerning the application of United States
federal income tax laws to their particular situations as well as any
consequences of the purchase, ownership and disposition of the Preferred
Securities arising under the laws of any other taxing jurisdiction.
As used herein, the term "U.S. Holder" means a beneficial owner of a
Preferred Security that is for United States federal income tax purposes (i) a
citizen or resident of the United States, (ii) a corporation, partnership or
other entity created or organized in or under the laws of the United States or
of any political subdivision thereof, (iii) an estate or trust the income of
which is subject to United States federal income taxation regardless of its
source, or (iv) any other person whose income or gain in respect of a Preferred
Security is effectively connected with the conduct of a United States trade or
business. As used herein, the term "non-U.S. Holder" means a holder of a
Preferred Security that is not a U.S. Holder.
CLASSIFICATION OF THE TRUST
In connection with the issuance of the Preferred Securities, Skadden, Arps,
Slate, Meagher & Flom, special tax counsel to GWFC and the Trust, has rendered
its opinion to the effect that, under then current law and assuming full
compliance with the terms of the Declaration and the Subordinated Indenture
(and certain other documents), and based on certain facts and assumptions
contained in such opinion, the Trust will be classified for United States
federal income tax purposes as a grantor trust and not as an association
taxable as a corporation. Accordingly, for United States federal income tax
purposes, each U.S. Holder of a Preferred Security will generally be considered
the owner of an undivided interest in the Subordinated Notes, and each U.S.
Holder will be required to include in its gross income the original issue
discount (as described below) accrued with respect to its undivided interest in
those Subordinated Notes.
CLASSIFICATION OF THE SUBORDINATED NOTES
In connection with the issuance of the Subordinated Notes, Skadden, Arps,
Slate, Meagher & Flom, special tax counsel to GWFC and the Trust, will render
its opinion generally to the effect that, under then current United States
federal income tax law and assuming full compliance with the terms of the
Indenture (and certain other documents), and based on certain facts and
assumptions contained in such opinion, the
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<PAGE>
Subordinated Notes held by the Trust will be classified for United States
federal income tax purposes as indebtedness of GWFC. By acceptance of a
Preferred Security, each holder covenants to treat the Subordinated Notes as
indebtedness and the Preferred Securities as evidence of an indirect beneficial
ownership in the Subordinated Notes.
ORIGINAL ISSUE DISCOUNT
Because GWFC has the option, under the terms of the Subordinated Notes, to
defer payments of interest by extending interest payment periods for up to 20
quarters, all of the stated interest payments on the Subordinated Notes will be
treated as original issue discount ("OID"). U.S. Holders of debt instruments
issued with OID may be required to include that discount in income on an
economic accrual basis before the receipt of cash attributable to the interest,
regardless of their method of tax accounting. Generally, all of a U.S. Holder's
taxable interest income with respect to the Subordinated Notes will accrue as
OID, and actual distributions of stated interest will not be separately
reported as taxable income. The amount of OID that accrues for any quarter will
approximately equal the amount of the interest that accrues on the Subordinated
Notes in that quarter at the stated interest rate. In the event that the
interest payment period is extended, U.S. Holders will continue to accrue OID
approximately equal to the amount of the interest payment due at the end of the
extended interest payment period, even though no payments of stated interest
are being made.
Corporate U.S. Holders of Preferred Securities will not be entitled to a
dividends received deduction with respect to any income recognized with respect
to the Preferred Securities.
MARKET DISCOUNT AND BOND PREMIUM
U.S. Holders of Preferred Securities, other than U.S. Holders who purchased
the Preferred Securities for a price equal to their par amount plus accrued
interest upon their original issuance, may be considered to have acquired their
undivided interests in the Subordinated Notes at a market discount, premium or
acquisition premium as such phrases are defined for United States federal
income tax purposes. Such U.S. Holders are advised to consult their tax
advisors as to the income tax consequences of the acquisition, ownership and
disposition of the Preferred Securities.
RECEIPT OF SUBORDINATED NOTES OR CASH UPON LIQUIDATION OF THE TRUST
Under certain circumstances, as described under the caption "Description of
the Offered Preferred Securities--Special Event Redemption or Distribution,"
Subordinated Notes may be distributed to U.S. Holders in exchange for the
Preferred Securities and in liquidation of the Trust. Under current law, such a
distribution, for United States federal income tax purposes, would be treated
as a non-taxable event to each U.S. Holder, and each U.S. Holder would receive
an aggregate tax basis in the Subordinated Notes equal to such U.S. Holder's
aggregate tax basis in its Preferred Securities. A U.S. Holder's holding period
in the Subordinated Notes so received in liquidation of the Trust would include
the period during which the Preferred Securities were held by such U.S. Holder.
Under certain circumstances described herein (see "Description of the Offered
Preferred Securities"), the Subordinated Notes may be redeemed for cash and the
proceeds of such redemption distributed to U.S. Holders in redemption of their
Preferred Securities. Under current law, such a redemption would, for United
States federal income tax purposes, constitute a taxable disposition of the
redeemed Preferred Securities, and a U.S. Holder would recognize gain or loss
as if it sold such redeemed Preferred Securities for cash. See "Sales of
Preferred Securities" below.
ADJUSTED SUBORDINATED NOTES AND CONVERSION TO DEPOSITARY SHARES
A U.S. Holder that either receives Adjusted Subordinated Notes or Depositary
Shares as a result of a Regulatory Event described under the caption
"Description of the Offered Preferred Securities--Regulatory Event Distribution
or Conversion," should not recognize gain or loss for U.S. federal income tax
purposes at that time. Accordingly, (i) the tax basis of Adjusted Subordinated
Notes or Depositary Shares received by an
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<PAGE>
owner of Preferred Securities should, upon receipt, equal the aggregate tax
basis of such owner in such Preferred Securities and (ii) the holding period
for the Adjusted Subordinated Notes or Depositary Shares in the hands of an
owner of Preferred Securities should include the period during which such
person owned such Preferred Securities.
DEPOSITARY SHARES
Owners of the Depositary Shares, if issued, will be treated for United States
federal income tax purposes as if they were owners of the Preferred Stock
represented by such Depositary Shares and, accordingly, will be entitled to
take into account for United States federal income tax purposes income and
deductions to which they would be entitled if they were holders of such
Preferred Stock. The dividends on the Depositary Shares will qualify as
dividends for purposes of the dividends received deduction to the extent that
such dividends are paid out of GWFC's current or accumulated earnings and
profits (and subject to certain generally applicable limitations). In addition,
(i) no gain or loss will be recognized for United States federal income tax
purposes upon the withdrawal of Preferred Stock in exchange for Depositary
Shares as provided in the Deposit Agreement, (ii) the tax basis of each share
of Preferred Stock to an exchanging owner of Depositary Shares will, upon such
exchange, be the same as the aggregate tax basis of the Depositary Shares
exchanged therefor, and (iii) the holding period for shares of the Preferred
Stock in the hands of an exchanging owner of Depositary Shares will include the
period during which such person owned such Depositary Shares.
SALES OF PREFERRED SECURITIES
A U.S. Holder that sells a Preferred Security will recognize gain or loss
equal to the difference between its adjusted tax basis in the Preferred
Securities and the amount realized on the sale of such Preferred Securities. A
U.S. Holder's adjusted tax basis in the Preferred Securities will generally be
its initial purchase price increased by the amount of OID previously includible
in such U.S. Holder's gross income to the date of disposition and decreased by
the amount of payments received on the Preferred Securities (whether
denominated as interest or principal). Such gain or loss will generally be a
capital gain or loss and generally will be a long-term capital gain or loss if
the Preferred Securities have been held for more than one year.
INFORMATION REPORTING TO U.S. HOLDERS
Income on the Preferred Securities will be reported to U.S. Holders on Forms
1099, which forms should be mailed to U.S. Holders of Preferred Securities by
January 31 following each calendar year.
BACKUP WITHHOLDING
Backup withholding of the United States federal income tax at a rate of 31%
may apply to payments made in respect of Subordinated Notes to registered
owners who are not "exempt recipients" or who fail to comply with certain
procedures for providing certain identifying information (such as the
registered owner's taxpayer identification number) in the required manner.
Upon the sale of Subordinated Notes to (or through) certain brokers, the
broker must withhold 31% of the entire purchase price, unless either (i) the
broker determines that the seller is an exempt recipient or (ii) the seller
provides, in the required manner, certain identifying information.
Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States federal income tax provided the required
information is furnished to the Internal Revenue Service.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S PARTICULAR
SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR
OTHER TAX LAWS.
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<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement (the
"Purchase Agreement"), the Trust has agreed to sell to each of the Underwriters
named below, and each of the Underwriters, for whom Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Goldman, Sachs & Co., Bear, Stearns & Co. Inc.,
Dean Witter Reynolds Inc. and Smith Barney Inc. are acting as representatives
(the "Representatives"), has severally agreed to purchase the number of
Preferred Securities set forth opposite its name below. In the Purchase
Agreement, the several Underwriters have agreed, subject to the terms and
conditions set forth therein, to purchase all the Preferred Securities offered
hereby if any of the Preferred Securities are purchased. In the event of
default by an Underwriter, the Purchase Agreement provides that, in certain
circumstances, the purchase commitments of the nondefaulting Underwriters may
be increased or the Purchase Agreement may be terminated.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS PREFERRED SECURITIES
------------ --------------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.............................. 475,000
Goldman, Sachs & Co................................ 475,000
Bear, Stearns & Co. Inc. .......................... 475,000
Dean Witter Reynolds Inc. ......................... 475,000
Smith Barney Inc. ................................. 475,000
Robert W. Baird & Co. Incorporated................. 50,000
Alex. Brown & Sons Incorporated.................... 50,000
Dain Bosworth Incorporated......................... 50,000
Dillon, Read & Co. Inc. ........................... 50,000
Donaldson, Lufkin & Jenrette Securities Corpora-
tion.............................................. 50,000
A.G. Edwards & Sons, Inc. ......................... 50,000
EVEREN Securities, Inc. ........................... 50,000
Oppenheimer & Co., Inc. ........................... 50,000
PaineWebber Incorporated........................... 50,000
Piper Jaffray Inc. ................................ 50,000
Prudential Securities Incorporated................. 50,000
Raymond James & Associates, Inc. .................. 50,000
Tucker Anthony Incorporated........................ 50,000
Advest, Inc. ...................................... 25,000
J.C. Bradford & Co. ............................... 25,000
JW Charles Securities, Inc. ....................... 25,000
Commerzbank Capital Markets Corporation............ 25,000
Cowen & Company.................................... 25,000
Craigie Incorporated............................... 25,000
Crowell, Weedon & Co. ............................. 25,000
Davenport & Co. of Virginia, Inc. ................. 25,000
Doft & Co., Inc. .................................. 25,000
Dougherty, Dawkins, Strand & Bigelow Inc. ......... 25,000
Fahnestock & Co. Inc. ............................. 25,000
First Albany Corporation........................... 25,000
First of Michigan Corporation...................... 25,000
Furman Selz Incorporated........................... 25,000
Gruntal & Co., Incorporated........................ 25,000
J.J.B. Hilliard, W.L. Lyons, Inc. ................. 25,000
Interstate/Johnson Lane Corporation................ 25,000
Janney Montgomery Scott Inc. ...................... 25,000
</TABLE>
S-35
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS PREFERRED SECURITIES
------------ --------------------
<S> <C>
Josephthal Lyon & Ross Incorporated.................. 25,000
Legg Mason Wood Walker, Incorporated................. 25,000
McDonald & Company Securities, Inc. ................. 25,000
McGinn, Smith & Co., Inc. ........................... 25,000
Mesirow Financial, Inc. ............................. 25,000
Morgan Keegan & Company, Inc. ....................... 25,000
David A. Noyes & Company............................. 25,000
The Ohio Company..................................... 25,000
Principal Financial Securities, Inc. ................ 25,000
Pryor, McClendon, Counts & Co., Inc. ................ 25,000
Rauscher Pierce Refsnes, Inc. ....................... 25,000
The Robinson-Humphrey Company, Inc. ................. 25,000
Rodman & Renshaw, Inc. .............................. 25,000
Roney & Co. ......................................... 25,000
Scott & Stringfellow, Inc. .......................... 25,000
Stifel, Nicolaus & Company, Incorporated............. 25,000
Sutro & Co. Incorporated............................. 25,000
US Clearing Corp. ................................... 25,000
Utendahl Capital Partners, L.P. ..................... 25,000
Wheat, First Securities, Inc. ....................... 25,000
Yamaichi International (America), Inc. .............. 25,000
---------
Total.......................................... 4,000,000
=========
</TABLE>
The Underwriters propose to offer the Preferred Securities, in part, directly
to the public at the initial public offering price set forth on the cover page
of this Prospectus Supplement, and, in part, to certain securities dealers at
such price less a concession of $.50 per Preferred Security, provided that such
concession for sales of 10,000 or more Preferred Securities to any single
purchaser will be $.30 per Preferred Security. The Underwriters may allow, and
such dealers may reallow, a concession not in excess of $.30 per Preferred
Security to certain brokers and dealers. After the Preferred Securities are
released for sale to the public, the offering price and other selling terms may
from time to time be varied by the Representatives.
In view of the fact that the proceeds of the sale of the Preferred Securities
will be used to purchase the Subordinated Notes of GWFC, the Purchase Agreement
provides that GWFC will pay as compensation ("Underwriters' Compensation") to
the Underwriters arranging the investment therein of such proceeds, an amount
in New York Clearing House (next day) funds of $.7875 per Preferred Security
(or $3,150,000 in the aggregate) for the accounts of the several Underwriters;
provided that, such compensation for sales of 10,000 or more Preferred
Securities to any single purchaser will be $.50 per Preferred Security.
Therefore, to the extent of such sales, the actual amount of Underwriters'
Compensation will be less than the aggregate amount specified in the preceding
sentence.
During a period of 30 days from the date of the Prospectus Supplement,
neither GWFC nor the Trust will, without the prior written consent of the
Underwriters, directly or indirectly, sell, offer to sell, grant any option for
the sale of, or otherwise dispose of, any Preferred Securities, any equity
securities substantially similar to the Preferred Securities, Subordinated
Notes or any debt securities substantially similar to the Subordinated Notes,
or any security convertible into or exchangeable into or exercisable for
Preferred Securities, any equity securities substantially similar to the
Preferred Securities, Subordinated Notes or any debt securities substantially
similar to the Subordinated Notes (except for the Subordinated Notes and the
Preferred Securities offered hereby).
The Preferred Securities have been approved for listing on the New York Stock
Exchange. Trading of the Preferred Securities on the New York Stock Exchange is
expected to commence within a 30-day period after the initial delivery of the
Preferred Securities. The Representatives have advised the Trust that they
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<PAGE>
intend to make a market in the Preferred Securities prior to the commencement
of trading on the New York Stock Exchange. The Representatives will have no
obligation to make a market in the Preferred Securities, however, and may cease
market making activities, if commenced, at any time.
Prior to this offering there has been no public market for the Preferred
Securities. In order to meet one of the requirements for listing the Preferred
Securities on the New York Stock Exchange, the Underwriters will undertake to
sell lots of 100 or more Preferred Securities to a minimum of 400 beneficial
holders.
The Trust and GWFC have agreed to indemnify the Underwriters against, or
contribute to payments that the Underwriters may be required to make in respect
of, certain liabilities, including liabilities under the Securities Act of
1933, as amended.
LEGAL MATTERS
The validity of the Preferred Securities will be passed upon by Skadden,
Arps, Slate, Meager & Flom, special counsel to the Trust. The validity of the
Subordinated Notes, the Guarantee, the Depositary Shares and the Preferred
Stock and certain matters relating thereto will be passed upon for GWFC by
O'Melveny & Myers. Brown & Wood will act as counsel to the Underwriters.
S-37
<PAGE>
PROSPECTUS
[LOGO OF GREAT WESTERN]
GREAT WESTERN FINANCIAL TRUST I
SECURITIES
Great Western Financial Corporation (the "Company") may offer from time to
time, in one or more series, its unsecured senior debt securities (the "Senior
Debt Securities"), warrants to purchase Senior Debt Securities (the "Senior
Debt Securities Warrants"), its unsecured subordinated debt securities (the
"Subordinated Debt Securities"), warrants to purchase Subordinated Debt
Securities (the "Subordinated Debt Securities Warrants"), shares of its
Preferred Stock, par value $1.00 per share (the "Preferred Stock"), warrants
to purchase Preferred Stock (the "Preferred Stock Warrants"), Depositary
Shares (as defined below), warrants to purchase Depositary Shares (the
"Depositary Shares Warrants"), shares of its Common Stock, par value $1.00 per
share (the "Common Stock"), and warrants to purchase Common Stock (the "Common
Stock Warrants," and with the Senior Debt Securities Warrants, the
Subordinated Debt Securities Warrants, the Preferred Stock Warrants and the
Depositary Shares Warrants, being collectively referred to herein as the
"Securities Warrants"). Great Western Financial Trust I (the "Trust") may
offer from time to time preferred securities representing undivided beneficial
interests in the assets of the Trust (the "Preferred Securities"). The payment
of periodic cash distributions with respect to the Preferred Securities out of
moneys held by the Trust and payments on liquidation, redemption or otherwise
with respect to the Preferred Securities, will be guaranteed by the Company to
the extent described herein (the "Guarantee"). The Senior Debt Securities, the
Subordinated Debt Securities, the Preferred Stock, the Common Stock, the
Securities Warrants, the Preferred Securities and the Guarantee are
collectively referred to herein as the "Securities." Securities will have an
aggregate offering price of $750,000,000 and will be offered on terms to be
determined at the time of offering.
In the case of Senior Debt Securities or Subordinated Debt Securities
(collectively, the "Debt Securities"), the specific title, the aggregate
principal amount, the purchase price, the maturity, the rate (or method of
calculation) and time of payment of any interest, if any, the right of the
Company, if any, to defer payment of interest on the Debt Securities and the
maximum length of such deferral period, any redemption or sinking fund
provisions, any conversion provisions and any other specific term of the Debt
Securities will be set forth in the accompanying supplement to this Prospectus
(the "Prospectus Supplement"). In the case of Preferred Stock, the specific
number of shares, designation, stated value per share, liquidation preference
per share, issuance price, dividend rate (or method of calculation), dividend
payment dates, any redemption or sinking fund provisions, any conversion
rights and other specific terms of the series of Preferred Stock will be set
forth in the accompanying Prospectus Supplement. In addition, the Prospectus
Supplement will describe whether interests in the Preferred Stock will be
represented by depositary shares (the "Depositary Shares") evidenced by
depositary receipts. In the case of Common Stock, the specific number of
shares and issuance price per share will be set forth in the accompanying
Prospectus Supplement. In the case of Securities Warrants, the duration,
offering price, exercise price and detachability, if applicable, will be set
forth in the accompanying Prospectus Supplement. In the case of Preferred
Securities, the designation, number of securities, liquidation preference per
security, purchase price, distribution rate (or method of calculation
thereof), dates on which distributions shall be payable and dates from which
distributions shall accrue, any voting rights, terms for any conversion or
exchange into other securities, any redemption, exchange or sinking fund
provisions and any other rights, preferences, privileges, limitations or
restrictions related to the Preferred Securities and the terms upon which the
proceeds of the sale of the Preferred Securities shall be used to purchase
Subordinated Debt Securities of the Company will be set forth in the
accompanying Prospectus Supplement. The Prospectus Supplement will also
disclose whether the Securities will be listed on a national securities
exchange and if they are not to be listed, the possible effects thereof on
their marketability.
Securities may be sold directly, through agents from time to time or through
underwriters and/or dealers. If any agent of the Company or the Trust or any
underwriter is involved in the sale of the Securities, the name of such agent
or underwriter and any applicable commission or discount will be set forth in
the accompanying Prospectus Supplement. See "Plan of Distribution."
The Senior Debt Securities, if issued, will rank on a parity with all other
unsecured and unsubordinated indebtedness of the Company. The Subordinated
Debt Securities, if issued, will be unsecured and subordinated to all present
and future Senior Indebtedness (as defined) of the Company. See "Description
of Debt Securities."
THE SECURITIES WILL NOT BE SAVINGS ACCOUNTS OR DEPOSITS AND WILL NOT BE
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE UNITED STATES OR ANY
AGENCY OR FUND OF THE UNITED STATES.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
December 6, 1995
<PAGE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSIONER OF
INSURANCE FOR THE STATE OF NORTH CAROLINA, NOR HAS THE COMMISSIONER OF
INSURANCE RULED UPON THE ACCURACY OR THE ADEQUACY OF THIS PROSPECTUS OR ANY
PROSPECTUS SUPPLEMENT HERETO.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, files
reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and
other information can be inspected and copied at Room 1024 of the offices of
the Commission, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, and should be available for inspection and copying at the regional
offices of the Commission located at Seven World Trade Center, 13th Floor, New
York, New York 10048 and Suite 1400, Citicorp Center, 500 West Madison Street,
Chicago, Illinois 60661. Copies of such material can be obtained from the
principal offices of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Reports, proxy materials and other
information concerning the Company may also be inspected at the offices of the
New York Stock Exchange, 20 Broad Street, New York, New York 10005, at the
office of the Pacific Stock Exchange, 301 Pine Street, San Francisco,
California 94104, and at the offices of The International Stock Exchange of the
United Kingdom and the Republic of Ireland.
No separate financial statements of the Trust have been included herein. The
Company does not consider that such financial statements would be material to
holders of the Preferred Securities because (i) all of the voting securities of
the Trust will be owned directly or indirectly by the Company, a reporting
company under the Exchange Act, (ii) the Trust has no independent operations
but exists for the sole purpose of issuing securities representing undivided
beneficial interests in the assets of the Trust and investing the proceeds
thereof in Subordinated Debt Securities issued by the Company, and (iii) the
obligations of the Trust under the Trust Securities (as defined herein) are
fully and unconditionally guaranteed by the Company to the extent that the
Trust has funds available to meet such obligations. For financial statement
purposes, the Trust will be consolidated with the Company. See "Description of
Debt Securities--Particular Terms of the Subordinated Debt Securities Issued to
the Trust" and "Description of Guarantee."
This Prospectus does not contain all the information set forth in the
Registration Statement and exhibits thereto which the Company has filed with
the Commission under the Securities Act of 1933, and reference is hereby made
to such Registration Statement, including the exhibits thereto.
----------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are incorporated herein by reference the following documents of the
Company filed with the Commission: (1) Annual Report on Form 10-K for the
fiscal year ended December 31, 1994, as amended by the Form 10K-A dated April
24, 1995; (2) Quarterly Report on Form 10-Q for the quarters ended March 31,
1995, June 30, 1995 and September 30, 1995; (3) Current Reports on Form 8-K
dated June 30, 1995 and November 29, 1995; and (4) all documents filed by the
Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of this Prospectus and prior to the termination of the
offering of the Securities.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement
2
<PAGE>
contained herein, in a Prospectus Supplement or in any subsequently filed
document which is incorporated by reference herein modifies or supersedes such
statements. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial holder, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any or all the foregoing
documents incorporated by reference herein, including exhibits specifically
incorporated by reference in such documents but excluding all other exhibits to
such documents. Requests should be made to the Corporate Secretary of the
Company at 9200 Oakland Avenue, Chatsworth, California 91311, telephone number
(818) 775-3411.
3
<PAGE>
THE COMPANY
GENERAL
The Company is a savings and loan holding company organized in 1955 under the
laws of the State of Delaware. The principal assets of the Company are the
capital stock of Great Western Bank, a Federal Savings Bank ("GWB") and
Aristar, Inc. ("Aristar"). GWB is a federally chartered stock savings bank. GWB
conducts most of its retail banking through approximately 418 offices located
primarily in California and Florida. Real estate lending operations are
conducted directly by GWB or by direct subsidiaries through approximately 254
offices in 23 states with concentration in California, Florida and Washington.
Directly or through its subsidiaries, GWB also engages in mortgage banking and
other related financial services. Aristar conducts consumer finance operations
through 476 offices in 21 states, most of which operate principally under the
names Blazer Financial Services or City Finance and provide direct installment
loans and related credit insurance services and purchase retail installment
contracts. At September 30, 1995, the Company had consolidated total assets of
approximately $44.7 billion.
GWB is regulated by the Office of Thrift Supervision ("OTS") and the Federal
Deposit Insurance Corporation ("FDIC") which, through the Savings Association
Insurance Fund, insures the deposit accounts of savings associations. GWB is a
member of the Federal Home Loan Bank of San Francisco, which is one of several
regional banks for federally insured savings institutions comprising the
Federal Home Loan Bank System. GWB is further subject to certain regulations of
the Board of Governors of the Federal Reserve System governing reserves
required to be maintained against deposits and other matters.
The Company is a legal entity separate and distinct from GWB. The principal
source of the Company's revenues on an unconsolidated basis has been dividends,
interest and management fees from GWB. Various statutory and regulatory
restrictions and tax considerations, however, can limit, directly or
indirectly, the amount of dividends, interest and management fees payable by
GWB. Dividends from Aristar continue to be a source of revenue to the Company.
The operations of savings associations such as GWB are significantly
influenced by general economic conditions, the monetary and fiscal policies of
the federal government, and the policies of regulatory authorities, including
the Federal Reserve Board, the OTS and the FDIC. Deposit flows and costs of
funds are influenced by interest rates on competing investments and general
market rates of interest. The Company competes with commercial banks and other
financial intermediaries for funds. Lending and other investment activities are
affected by the demand for mortgage financing and consumer and other types of
loans, which in turn are affected by the interest rates at which such financing
may be offered and other factors affecting the supply of housing and the
availability of funds.
The Company and certain of its subsidiaries and their employees are
defendants in three actions which allege that defendants misused confidential
customer data belonging to deposit customers of GWB and misled depositors to
move their savings from federally insured deposit accounts to proprietary
mutual funds and other securities which were uninsured, fluctuated in value,
and for which a commission was charged. One action was brought by 24 customers
of the Company's subsidiary, Great Western Financial Securities Corporation
("GWFSC"), on their own behalf seeking damages for losses sustained when
plaintiffs purchased securities through GWFSC. Plaintiffs in that action also
seek to represent the people of the State of California with respect to claims
alleging unfair and misleading business practices. The second action has been
conditionally certified as a class action on behalf of all California residents
who, from April 13, 1992 through April 14, 1995, were deposit customers of a
GWB branch in fourteen California counties who bought securities through GWFSC.
The final action is a putative class action brought on behalf of all full and
part-time residents of the State of Florida who from May 8, 1991 through May 8,
1995 were customers of a GWB branch or who sought the services of a GWB branch
and who purchased certain proprietary mutual funds through GWFSC. The Company
and its subsidiaries have also been advised by the Commission of an inquiry
into the allegations in two of the actions. The Company and its subsidiaries
are vigorously defending the litigation and cooperating with the Commission in
its inquiry. The Company does not believe that these legal actions will have a
material adverse effect on the Company or its financial condition.
4
<PAGE>
The Company from time to time engages in merger discussions with other
financial institutions and reviews various acquisition opportunities, including
transactions with governmental agencies. No assurances can be given that the
Company will complete any particular transaction.
The Company's executive offices are located at 9200 Oakdale Avenue,
Chatsworth, California 91311, and its telephone number is (818) 775-3411.
THE TRUST
The Trust is a statutory business trust formed under Delaware law pursuant to
(i) a declaration of trust (the "Declaration") executed by the Company, as
sponsor for the Trust (the "Sponsor"), and Trustees (as defined herein) of the
Trust and (ii) the filing of a certificate of trust with the Secretary of State
of the State of Delaware on September 27, 1995. The Trust exists for the
exclusive purpose of (i) issuing the Preferred Securities and common securities
representing undivided beneficial interests in the assets of the Trust (the
"Common Securities" and, together with the Preferred Securities, the "Trust
Securities"), (ii) investing the gross proceeds from the sale of the Trust
Securities in Subordinated Debt Securities of the Company and (iii) engaging in
only those other activities necessary or incidental thereto. All of the Common
Securities will be directly or indirectly owned by the Company. The Common
Securities will rank pari passu, and payments will be made thereon pro rata,
with the Preferred Securities, except that, upon an event of default under the
Declaration, the rights of the holders of the Common Securities to payment in
respect of distributions and payments upon liquidation, redemption and
otherwise will be subordinated to the rights of the holders of the Preferred
Securities. The Company will directly or indirectly acquire Common Securities
in an aggregate liquidation amount equal to 3% of the total capital of the
Trust. The Trust has a term of approximately 55 years but may terminate
earlier, as provided in the Declaration.
The Trust's business and affairs will be conducted by the trustees (the
"Trustees") appointed by the Company as the direct or indirect holder of all
the Common Securities. The holder of the Common Securities will be entitled to
appoint, remove or replace any of, or increase or reduce the number of, the
Trustees of the Trust. The duties and obligations of the Trustees shall be
governed by the Declaration. One Trustee of the Trust will be either a natural
person who is a resident of the State of Delaware or an entity which has its
principal place of business in the State of Delaware (the "Delaware Trustee").
A financial institution that is not affiliated with the Company and has a
specified minimum amount of aggregate capital, surplus and undivided profits of
not less than $50,000,000 shall act as property trustee and as indenture
trustee for the purposes of the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), pursuant to the terms set forth in a Prospectus
Supplement (the "Property Trustee"). The Property Trustee will be the only
trustee of the Trust that will be a trustee for purposes of the Trust Indenture
Act. The remaining Trustees of the Trust will be persons who are employees or
officers of, or who are affiliated with, the Company (the "Regular Trustees").
The Company will pay all debts and obligations of the Trust (other than with
respect to Trust Securities) and all fees and expenses related to the Trust and
the offering of the Trust Securities. The initial Delaware Trustee for the
Trust is Michael J. Majchrzak, FCC National Bank, 300 King Street, Wilmington,
Delaware 19801. The initial Property Trustee is The First National Bank of
Chicago, One First National Plaza, Suite 0126, Chicago, Illinois 60670-0126.
The address for the Trust is c/o Great Western Financial Corporation, the
Sponsor of the Trust, at the Company's corporate headquarters at 9200 Oakdale
Avenue, Chatsworth, California 91311.
USE OF PROCEEDS
Except as otherwise disclosed in the accompanying Prospectus Supplement, the
net proceeds from the sale of the Securities by the Company (including the sale
of any Subordinated Debt Securities to the Trust) are intended to be used for
general corporate purposes, which may include lending and investment
activities, repayment or purchase of outstanding debt, investments in or
extensions of credit to subsidiaries or development of new business. The Trust
will use all proceeds received from the sale of Preferred Securities to
purchase Subordinated Debt Securities from the Company.
5
<PAGE>
SELECTED FINANCIAL DATA
The following table sets forth selected financial and other data for the
Company and its consolidated subsidiaries for the periods indicated. Such
information is qualified in its entirety by the more detailed financial
information set forth in the financial statements and the notes thereto
incorporated by reference herein. See "Incorporation of Certain Documents by
Reference."
<TABLE>
<CAPTION>
AT OR FOR THE YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
1994 1993 1992 1991 1990
----------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE)
<S> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Interest income......... $ 2,629,718 $ 2,680,784 $ 3,091,093 $ 3,718,796 $ 4,073,085
Interest expense........ 1,307,448 1,297,930 1,668,731 2,453,540 2,905,134
----------- ----------- ----------- ----------- -----------
Net interest income..... 1,322,270 1,382,854 1,422,362 1,265,256 1,167,951
Provision for loan
losses................. 207,200 463,000 420,000 149,900 285,000
----------- ----------- ----------- ----------- -----------
Net interest income
after provision for
loan losses............ 1,115,070 919,854 1,002,362 1,115,356 882,951
Other income............ 367,897 327,855 282,131 257,582 192,393
Noninterest expense..... 1,076,433 1,155,662 1,188,981 867,508 799,670
----------- ----------- ----------- ----------- -----------
Earnings before taxes on
income................. 406,534 92,047 95,512 505,430 275,674
Federal and state taxes
on income.............. 155,300 30,000 41,600 207,300 148,600
Accounting changes...... -- -- 31,094 -- --
----------- ----------- ----------- ----------- -----------
Net earnings............ $ 251,234 $ 62,047 $ 85,006 $ 298,130 $ 127,074
=========== =========== =========== =========== ===========
SUMMARY OF FINANCIAL
CONDITION
Cash and securities..... $ 2,065,660 $ 1,846,780 $ 1,660,485 $ 1,397,529 $ 1,819,823
Loans receivable and
mortgage-backed
securities............. 37,647,975 33,850,799 33,752,661 35,115,730 34,767,295
Real estate............. 256,967 434,077 1,153,383 1,123,043 960,815
Other assets............ 2,247,655 2,216,704 1,872,657 1,963,326 1,857,874
----------- ----------- ----------- ----------- -----------
Total assets............ $42,218,257 $38,348,360 $38,439,186 $39,599,628 $39,405,807
=========== =========== =========== =========== ===========
Customer accounts....... $28,700,947 $31,531,563 $30,908,665 $30,570,368 $29,649,038
Borrowings and
debentures............. 10,120,660 3,479,341 4,151,052 5,592,453 6,539,388
Other liabilities....... 912,864 914,055 929,735 1,115,747 1,207,539
Stockholders' equity.... 2,483,786 2,423,401 2,449,734 2,321,060 2,009,842
----------- ----------- ----------- ----------- -----------
Total liabilities and
equity................. $42,218,257 $38,348,360 $38,439,186 $39,599,628 $39,405,807
=========== =========== =========== =========== ===========
PER COMMON SHARE DATA
Fully diluted earnings
....................... $ 1.69 $ .28 $ .53 $ 2.24 $ .99
Dividends............... .92 .92 .91 .87 .83
</TABLE>
6
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for the
Company for each of the periods indicated. Earnings represent earnings before
income taxes, accounting changes and fixed charges. Fixed charges, excluding
interest on customer accounts, represent other interest expense (including
capitalized interest) and one-third (the proportion deemed representative of
the interest factor) of rents. Fixed charges, including interest on customer
accounts, represent all interest expense (including capitalized interest) and
one-third of rents.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Excluding interest on customer accounts................ 2.05 1.23 1.26 1.96 1.30
Including interest on customer accounts................ 1.30 1.07 1.05 1.20 1.09
</TABLE>
DESCRIPTION OF DEBT SECURITIES
Senior Debt Securities may be issued from time to time in series under an
Indenture dated as of September 12, 1990, between the Company and First
Interstate Bank, Ltd., as amended and supplemented by a First Supplemental
Indenture, dated April 30, 1993 (as amended and supplemented, the "Senior
Indenture"), among the Company, First Interstate Bank, Ltd. and Citibank, N.A.,
as Trustee (the "Senior Trustee"). Subordinated Debt Securities may be issued
from time to time in series under an Indenture dated as of September 12, 1990,
as amended and supplemented by a First Supplemental Indenture, dated April 30,
1993 (as amended and supplemented, the "Subordinated Indenture"), between the
Company and Harris Trust and Savings Bank, as Trustee (the "Subordinated
Trustee"). The Senior Indenture and the Subordinated Indenture are sometimes
referred to collectively as the "Indentures," and the Senior Trustee and the
Subordinated Trustee are sometimes referred to collectively as the "Indenture
Trustees." As used under this caption, unless the context otherwise requires,
Offered Senior Debt Securities, Offered Subordinated Debt Securities and
Offered Debt Securities shall mean the Senior Debt Securities, the Subordinated
Debt Securities and the Debt Securities, respectively, offered by this
Prospectus and the accompanying Prospectus Supplement. The statements under
this caption are summaries of the material general provisions contained in the
Indentures, do not purport to be complete and are qualified in their entirety
by reference to the Indentures, including the definition therein of certain
terms, copies of which are incorporated by reference as exhibits to the
Registration Statement of which this Prospectus is a part. The following sets
forth material general terms and provisions of the Debt Securities. Further
material terms of the Offered Debt Securities will be summarized in the
Prospectus Supplement relating thereto.
GENERAL
Each Indenture provides for the issuance of Debt Securities in series, and
does not limit the principal amount of Debt Securities which may be issued
thereunder. The Debt Securities will not be savings accounts or deposits and
will not be insured by the Federal Deposit Insurance Corporation, the United
States or any agency or fund of the United States.
Reference is made to the Prospectus Supplement for the following terms of the
Offered Debt Securities: (1) the specific title of the Offered Debt Securities;
(2) whether the Offered Debt Securities are Senior Debt Securities or
Subordinated Debt Securities; (3) the aggregate principal amount of the Offered
Debt Securities; (4) the percentage of their principal amount at which the
Offered Debt Securities will be issued; (5) the date on which the Offered Debt
Securities will mature; (6) the rate or rates per annum or the method for
determining such rate or rates, if any, at which the Offered Debt Securities
will bear interest; (7) the times at which any such interest will be payable;
(8) any provisions relating to optional or mandatory redemption of the Offered
Debt Securities at the option of the Company or pursuant to sinking fund or
analogous provisions; (9) the denominations in which the Offered Debt
Securities are authorized to be issued; (10) any provisions relating to the
conversion or exchange of the Offered Debt Securities into Common Stock,
Preferred Stock or
7
<PAGE>
into Debt Securities of another series; (11) whether the Offered Debt
Securities are to be issued in fully registered form without coupons or in
bearer form with interest coupons or both; (12) whether the Offered Debt
Securities are denominated in United States dollars or a foreign currency or
units of two or more of such foreign currencies and whether interest is payable
in a currency other than the currency in which the Offered Debt Securities are
denominated; (13) the place or places at which the Company will make payments
of principal (and premium, if any) and interest, if any, and the method of such
payment; (14) whether the Offered Debt Securities will be issued in whole or in
part in global form; (15) any additional covenants and Events of Default and
the remedies with respect thereto not currently set forth in the respective
Indenture; and (16) any other specific terms of the Offered Debt Securities.
The applicable Prospectus Supplement with respect to a series of Offered
Subordinated Debt Securities issued by the Company to the Trust will describe
the rights, if any, of the Company to defer payments of interest on the Offered
Subordinated Debt Securities by extending the interest payment period, and the
duration of any such extensions.
One or more series of the Debt Securities may be issued as discounted Debt
Securities (bearing no interest or bearing interest at a rate which at the time
of issuance is below market rates) to be sold at a substantial discount below
their stated principal amount. Tax and other special considerations applicable
to any such discounted Debt Securities will be described in the Prospectus
Supplement relating thereto.
STATUS OF SENIOR DEBT SECURITIES
The Senior Debt Securities will be unsecured and unsubordinated obligations
of the Company and will rank on a parity with all other unsecured and
unsubordinated indebtedness of the Company. However, since the Company is a
savings and loan holding company, the right of the Company, and hence the right
of creditors of the Company (including the holders of the Senior Debt
Securities), to participate in any distribution of the assets of any subsidiary
upon its liquidation or reorganization or otherwise is necessarily subject to
the prior claims of creditors of the subsidiary, except to the extent that
claims of the Company itself as a creditor of the subsidiary may be recognized.
In addition, dividends, loans and advances from certain subsidiaries, including
GWB, to the Company are subject to statutory and regulatory restrictions and
tax considerations.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
The obligations of the Company pursuant to Subordinated Debt Securities will
be subordinate in right of payment to all Senior Indebtedness of the Company.
"Senior Indebtedness" of the Company is defined to mean the principal of, and
premium, if any, and interest (including interest accruing subsequent to the
commencement of any proceeding for the bankruptcy or reorganization of the
Company under any applicable bankruptcy, insolvency or similar law now or
hereafter in effect) on (a) all indebtedness of the Company whether heretofore
or hereafter incurred (i) for borrowed money or (ii) incurred in connection
with the acquisition by the Company or a subsidiary of assets other than in the
ordinary course of business, for the payment of which the Company is liable
directly or indirectly by guarantee, letter of credit, obligation to purchase
or acquire or otherwise, or the payment of which is secured by a lien, charge
or encumbrance on assets acquired by the Company unless the terms of the
instrument evidencing such indebtedness or pursuant to which such indebtedness
is issued specifically provide that such indebtedness is not superior in right
of payment to the Subordinated Debt Securities, (b) amendments, modifications,
renewals, extensions and deferrals of any such indebtedness, and (c) any
indebtedness issued in exchange for any such indebtedness. The Subordinated
Indenture does not contain any limitations on the amount of Senior Indebtedness
which may be hereafter incurred by the Company.
No payment pursuant to the Subordinated Debt Securities may be made unless
all amounts of principal (and premium, if any) and interest then due on all
Senior Indebtedness of the Company shall have been paid in full or if there
shall have occurred and be continuing beyond any applicable grace period a
default in any
8
<PAGE>
payment with respect to any such Senior Indebtedness, or if there shall have
occurred any event of default with respect to any Senior Indebtedness
permitting the holders thereof to accelerate the maturity thereof, or if any
judicial proceeding shall be pending with respect to any such default. Upon any
distribution of the assets of the Company upon dissolution, winding-up,
liquidation or reorganization, the holders of Senior Indebtedness of the
Company will be entitled to receive payment in full of principal, premium, if
any, and interest (including interest accruing subsequent to the commencement
of any proceeding for the bankruptcy or reorganization of the Company under any
applicable bankruptcy, insolvency or similar law now or hereafter in effect)
before any payment is made on the Subordinated Debt Securities. By reason of
such subordination, in the event of insolvency of the Company, holders of
Senior Indebtedness of the Company may receive more, ratably, and holders of
the Subordinated Debt Securities having a claim pursuant to the Subordinated
Debt Securities may receive less, ratably, than the other creditors of the
Company. Such subordination will not prevent the occurrence of any Event of
Default in respect of the Subordinated Debt Securities.
The Prospectus Supplement relating to an issue of Subordinated Debt
Securities will set forth the aggregate amount of outstanding indebtedness as
of the most recent practicable date that by the terms of such Subordinated Debt
Securities will be senior to the Subordinated Debt Securities. The Prospectus
Supplement will also describe any limitations on the issuance of additional
Senior Indebtedness.
CONVERSION RIGHTS
The terms, if any, on which Debt Securities of a series may be exchanged for
or converted into shares of Common Stock, Preferred Stock or Debt Securities of
another series will be set forth in the Prospectus Supplement relating thereto.
ABSENCE OF RESTRICTIVE COVENANTS
The Company is not restricted by the Indentures from paying dividends or from
incurring, assuming or becoming liable for any type of debt or other
obligations or, except as noted below, from creating liens on its property for
any purpose. The Indentures do not require the maintenance of any financial
ratios or specified levels of net worth or liquidity. Except as set forth in
the Indenture and described under the heading "Covenants for Debt Securities"
below, there are no provisions of the Indentures which afford holders of the
Debt Securities protection in the event of a highly leveraged transaction
involving the Company.
COVENANTS FOR DEBT SECURITIES
With respect to both the Senior Debt Securities and the Subordinated Debt
Securities, the Indentures contain the following covenants:
Limitations on Liens. The Company may not create, assume, incur or permit to
exist any indebtedness for borrowed money secured by a pledge, lien or other
encumbrance (except for certain liens specifically permitted by the Indentures,
including liens in favor of the United States or any state thereof) on the
Voting Stock (as defined in the Indentures) of GWB owned directly or indirectly
by the Company without making effective provision whereby the outstanding Debt
Securities will be secured equally and ratably with such secured indebtedness,
except that the foregoing shall not restrict any such pledge, lien or other
encumbrance if (i) GWB (having obtained any necessary regulatory approval) has
guaranteed payment of the principal of and interest on the outstanding Debt
Securities, or (ii) after giving effect to such pledge, lien or other
encumbrance, the Company will own directly or indirectly more than 80% of the
outstanding shares of the Voting Stock (except for directors' qualifying
shares) of GWB (which term includes any successor by merger, assumption,
conversion or otherwise) free of any such pledge, lien or other encumbrance.
Limitations on Disposition of Voting Stock of, and Merger and Sale of Assets
by, GWB. The Company (which term includes any successor by merger, assumption
or otherwise) will own directly or indirectly more than 80% of the outstanding
shares of the Voting Stock (except for directors' qualifying shares) of GWB
(which term includes any successor by merger, assumption, conversion or
otherwise); except that the foregoing shall not restrict (i) any transfer where
the proceeds are invested, within 30 days of such transfer,
9
<PAGE>
in an 80% owned subsidiary (including any corporation or other entity which
upon such investment becomes such a subsidiary) engaged principally in a
savings, banking or other depository institution business, (ii) any disposition
in exchange for (or in connection with which the Company becomes the owner of)
more than 80% of the stock of any savings, banking or other depository
institutions, or (iii) any transfer following a guarantee by GWB (having
obtained any necessary regulatory approval) of payment of the principal of and
interest on the outstanding Debt Securities.
EVENTS OF DEFAULT
An Event of Default with respect to Debt Securities of any series is defined
in each of the Indentures as being: (a) failure to pay principal of or any
premium on any Debt Security of that series when due; (b) failure to pay any
interest on any Debt Security of that series when due, continued for 30 days;
(c) failure to deposit any sinking fund payment when due, in respect of any
Debt Security of that series; (d) failure to perform any other covenant of the
Company in the Indenture (other than a covenant included in the Indenture
solely for the benefit of one or more series of Debt Securities other than that
series), continued for 60 days after written notice as provided in the
Indenture; (e) certain events of bankruptcy, insolvency, conservatorship,
receivership or reorganization of the Company; (f) a default under any
mortgage, indenture or instrument evidencing any indebtedness for borrowed
money by the Company (including the Indenture) resulting in an aggregate
principal amount exceeding $10,000,000 becoming or being declared due and
payable prior to its maturity date or constituting a failure to pay at maturity
an aggregate principal amount exceeding $10,000,000, unless such acceleration
has been rescinded or annulled or such indebtedness has been discharged within
10 days after written notice to the Company by the Indenture Trustee or Holders
of at least 25% in aggregate principal amount of the outstanding Debt
Securities declaring a default, or the Company is contesting the validity of
such default in good faith by appropriate proceedings; and (g) any other Event
of Default provided with respect to the Debt Securities of that series.
If an Event of Default with respect to the outstanding Debt Securities of any
series occurs and is continuing, either the Indenture Trustee or the Holders of
at least 25% in aggregate principal amount of the outstanding Debt Securities
of that series may declare the principal amount (or, if the Debt Securities of
that series are original issue discount Debt Securities, such portion of the
principal amount as may be specified in the terms of that series) of all the
outstanding Debt Securities of that series to be due and payable immediately.
At any time after the declaration of acceleration with respect to the Debt
Securities of any series has been made, but before a judgment or decree based
on acceleration has been obtained, the Holders of a majority in aggregate
principal amount of the outstanding Debt Securities of that series may, under
certain circumstances, rescind and annul such acceleration.
The Indentures provide that, subject to the duty of the Indenture Trustee
during default to act with the required standard of care, the Indenture 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 such
Holders shall have offered to the Indenture Trustee reasonable indemnity.
Subject to such provisions for the indemnification of the Indenture Trustee and
subject to certain limitations, the Holders of a majority in aggregate
principal amount of the outstanding Debt Securities of any series will have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Indenture Trustee, or exercising any trust or power
conferred on the Indenture Trustee, with respect to the Debt Securities of that
series.
The Company is required to furnish to the Indenture Trustees annually a
statement as to the performance by the Company of certain of its obligations
under the Indentures and as to any default in such performance.
MODIFICATION AND WAIVER
Modifications and amendments of each of the Indentures may be made by the
Company and the respective Indenture Trustee without the consent of any Holders
to, among other things, (a) evidence the succession of another corporation to
the Company, (b) add to the covenants of the Company or surrender any right or
power conferred upon the Company, (c) cure any ambiguity, correct or supplement
any provision
10
<PAGE>
which may be defective or inconsistent or make any other provisions, provided
that such action does not adversely affect the interests of the Holders of Debt
Securities of any series in any material respect, or (d) evidence and provide
for a successor Indenture Trustee.
Modifications and amendments of each of the Indentures may be made by the
Company and the respective Indenture Trustee with the consent of the Holders of
a majority in aggregate principal amount of the outstanding Debt Securities of
each series affected by such modifications or amendment; provided, however,
that no such modification or amendment may, without the consent of the Holder
of each outstanding Debt Security affected thereby, (a) change the stated
maturity date of the principal of, or any installment of principal of or
interest, if any, on any Debt Security, (b) reduce the principal amount of, or
premium or interest, if any, on any Debt Security, (c) reduce the amount of
principal of an original issue discount Debt Security payable upon acceleration
of the maturity thereof, (d) change the currency of payment of the principal
of, or premium or interest, if any, on any Debt Security, (e) impair the right
to institute suit for the enforcement of any payment on or with respect to any
Debt Security, (f) in the case of Subordinated Debt Securities, modify the
subordination provisions in a manner adverse to the Holders of the outstanding
Subordinated Debt Securities, (g) modify the conversion provisions, if any, of
any Debt Security in a manner adverse to the Holder of that Debt Security, or
(h) reduce the percentage in principal amount of the outstanding Debt Security
of any series, the consent of whose Holders is required for modification or
amendment of that Indenture or for waiver of compliance with certain provisions
of that Indenture or for waiver of certain defaults.
The Holders of a majority in aggregate principal amount of the outstanding
Debt Securities of each series may, on behalf of all Holders of the Debt
Securities of that series, waive, insofar as that series is concerned,
compliance by the Company with certain restrictive provisions of the
Indentures. The Holders of a majority in aggregate principal amount of the
outstanding Debt Securities of each series may, on behalf of all Holders of the
Debt Securities of that series, waive any past default under the Indentures
with respect to the Debt Securities of that series, except a default in the
payment of principal or premium or interest, if any, or a default in respect of
a covenant or provision which under the terms of the Indentures cannot be
modified or amended without the consent of the Holder of each outstanding Debt
Security of the series affected.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Each of the Indentures provide that the Company, without the consent of the
Holders of any of the Debt Securities, may consolidate or merge with or into,
or transfer its assets substantially as an entirety to, any corporation
organized under the laws of the United States or any state, provided that the
successor corporation assumes the Company's obligations under the Indentures,
that after giving effect to the transaction no Event of Default, and no event
which, after notice or lapse of time, would become an Event of Default, shall
have occurred and be continuing, and that certain other conditions are met.
PARTICULAR TERMS OF THE SUBORDINATED DEBT SECURITIES ISSUED TO THE TRUST
In the event Subordinated Debt Securities are issued to the Trust (or a
Trustee of the Trust) in connection with the issuance of Trust Securities by
the Trust, such Subordinated Debt Securities subsequently may be distributed
pro rata to the holders of the Trust Securities in connection with the
dissolution of the Trust upon the occurrence of certain events to be described
in the Prospectus Supplement relating to the Trust Securities. Only one series
of Subordinated Debt Securities will be issued to the Trust, or a Trustee of
the Trust.
If Subordinated Debt Securities of the Company are issued to the Trust or a
Trustee of the Trust in connection with the issuance of Trust Securities and
(i) there shall have occurred any event that would constitute an Event of
Default, (ii) the Company shall be in default with respect to its payment of
any obligations under the Guarantee (as defined herein) or Common Securities
guarantee (see "Description of Guarantee"), or (iii) the Company shall have
given notice of its election to defer payments of interest on such Subordinated
Debt Securities by extending the interest payment period as provided with
respect to that series
11
<PAGE>
of Subordinated Debt Securities and such period, or any extension thereof,
shall be continuing, then (a) the Company shall not, and shall cause any
subsidiary of the Company that is not a wholly owned subsidiary of the Company
not to, declare or pay any dividend on, make any distribution with respect to,
or redeem, purchase or acquire, or make a liquidation payment with respect to,
any of its capital stock or the capital stock of any such subsidiary, and (b)
the Company shall not make any payment of interest, principal or premium, if
any, on or repay, repurchase or redeem any debt securities (including
guarantees) issued by the Company that rank pari passu with or junior to such
Subordinated Debt Securities; provided however, that, restriction (a) above
will not apply to any stock dividend paid by the Company or any of its
subsidiaries where the dividend stock is the same stock as that on which the
dividend is being paid.
In the event Subordinated Debt Securities are issued to the Trust or a
Trustee of the Trust in connection with the issuance of Trust Securities, for
so long as the Trust Securities remain outstanding, the Company will covenant
(i) to directly or indirectly maintain 100% ownership of the Common Securities;
provided, however, that any permitted successor of the Company under the
Indenture may succeed to the Company's ownership of the Common Securities and
(ii) to use its reasonable efforts to cause the Trust (a) to remain a statutory
business trust, except in connection with the distribution of Subordinated Debt
Securities to the holders of Trust Securities in liquidation of the Trust, the
redemption of all of the Trust Securities, or certain mergers, consolidations
or amalgamations, each as permitted by the Declaration, and (b) to otherwise
continue to be classified as a grantor trust for United States federal income
tax purposes.
If Subordinated Debt Securities are issued to the Trust or a Trustee of the
Trust in connection with the issuance of Trust Securities, (i) the aggregate
principal amount of the Subordinated Debt Securities will be equal to the sum
of the aggregate stated liquidation amount of the Trust Securities; (ii) the
interest rate and payment dates on the Subordinated Debt Securities will match
the distribution rate and distribution and other payment dates on the Trust
Securities; and (iii) the Company will agree to pay all costs, expenses, debts
and obligations of the Trust other than with respect to the Trust Securities.
If Subordinated Debt Securities are issued to the Trust or a Trustee of the
Trust in connection with the issuance of Trust Securities and an Event of
Default with respect to the Subordinated Debt Securities, constituting the
failure to pay interest or principal on the Subordinated Debt Securities on the
date such interest or principal is otherwise payable, has occurred and is
continuing, then a holder of Trust Securities may directly institute a
proceeding for enforcement of payment to such holder directly of the principal
of or interest on the Subordinated Debt Securities having a principal amount
equal to the aggregate liquidation amount of the Trust Securities of such
holder on or after the respective due date specified in the Subordinated Debt
Securities. The holders of Trust Securities will not be able to exercise
directly any other remedy available to the holders of the Subordinated Debt
Securities unless the Trustee of the Trust fails to do so.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in global
form (the "Global Securities"). The Global Securities will be deposited with a
depositary (the "Depositary"), or with a nominee for a Depositary, identified
in the Prospectus Supplement. In such case, one or more Global Securities will
be issued in a denomination or aggregate denominations equal to the portion of
the aggregate principal amount of outstanding Debt Securities of the series to
be represented by such Global Security or Securities. Unless and until it is
exchanged in whole or in part for Debt Securities in definitive form, a Global
Security may not be transferred except as a whole by the Depositary for such
Global Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by such
Depositary or any such nominee to a successor of such Depositary or a nominee
of such successor.
The specific material terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a Global Security
will be described in the Prospectus Supplement. The Company anticipates that
the following provisions will apply to all depositary arrangements.
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Upon the issuance of a Global Security, the Depositary for such Global
Security will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Debt Securities represented by such Global
Security to the accounts of persons that have accounts with such Depositary
("participants"). The accounts to be credited shall be designated by any
underwriters or agents participating in the distribution of such Debt
Securities. Ownership of beneficial interests in a Global Security will be
limited to participants or persons that may hold interests through
participants. Ownership of beneficial interests in such Global Security will be
shown on, and the transfer of that ownership will be effected only through,
records maintained by the Depositary for such Global Security (with respect to
interests or participants) or by participants or persons that hold through
participants (with respect to interest of persons other than participants). So
long as the Depositary for a Global Security, or its nominee, is the registered
owner of such Global Security, such Depositary or such nominee, as the case may
be, will be considered the sole owner or Holder of the Debt Securities
represented by such Global Security for all purposes under the Indenture;
provided, however, that for purposes of obtaining any consents or directions
required to be given by the Holders of the Debt Securities, the Company, the
Indenture Trustee and their respective agents will treat a person as the holder
of such principal amount of Debt Securities as specified in a written statement
of the Depositary. In addition, notwithstanding any other provisions to the
contrary in the Indenture, the rights of the beneficial owners of the Debt
Securities to receive payment of the principal of and interest on such Debt
Securities, on or after the respective due dates expressed in such Debt
Securities, or to institute suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the
consent of the beneficial owners. Except as set forth herein or otherwise
provided in the Prospectus Supplement, owners of beneficial interests in a
Global Security will not be entitled to have the Debt Securities represented by
such Global Security registered in their names, will not receive physical
delivery of such Debt Securities in definitive form and will not be considered
the owners or Holders thereof under the Indenture.
Principal, premium, if any, and interest payments on Debt Securities
represented by a Global Security registered in the name of a Depositary or its
nominee will be made to such Depositary or its nominee, as the case may be, as
the registered owner of such Global Security. None of the Company, the
Indenture Trustee or any Paying Agent for such Debt Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in such Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
The Company expects that the Depositary for any Debt Securities represented
by a Global Security, upon receipt of any payment of principal, premium, if
any, or interest will immediately credit participants' accounts with payments
in amounts proportionate to their respective beneficial interests in the
principal amount of such Global Security as shown on the records of such
Depositary. The Company also expects that payments by participants will be
governed by standing instructions and customary practices, as is now the case
with the securities held for the accounts of customers registered in "street
names" and will be the responsibility of such participants.
If the Depositary for any Debt Securities represented by a Global Security is
at any time unwilling or unable to continue as Depositary and a successor
Depositary is not appointed by the Company within 90 days, the Company will
issue such Debt Securities in definitive form in exchange for such Global
Security. In addition, the Company may at any time and in its sole discretion
determine not to have any of the Debt Securities of a series represented by one
or more Global Securities and, in such event, will issue Debt Securities of
such series in definitive form in exchange for all of the Global Security or
Securities representing such Debt Securities.
The laws of some states require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such laws may impair
the ability to transfer beneficial interests in Debt Securities represented by
Global Securities.
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REGARDING THE INDENTURE TRUSTEES
Senior Trustee
The Company maintains deposit accounts and banking relationships with the
Senior Trustee and engages in various investments and borrowing transactions
with the Senior Trustee.
Subordinated Trustee
GWB maintains deposit accounts and banking relationships with the
Subordinated Trustee and engages in various investments and borrowing
transactions with the Subordinated Trustee.
DESCRIPTION OF PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
material general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. Other material terms of any series of the
Preferred Stock offered by any Prospectus Supplement will be described in such
Prospectus Supplement. The description of the provisions of the Preferred Stock
set forth below and in any Prospectus Supplement does not purport to be
complete and is subject to and qualified in its entirety by reference to the
Company's Restated Certificate of Incorporation (the "Certificate of
Incorporation"), and the certificate of designations (a "Certificate of
Designations") relating to each series of the Preferred Stock which will be
filed with the Commission and incorporated by reference as an exhibit to the
Registration Statement of which this Prospectus is a part at or prior to the
time of the issuance of such series of the Preferred Stock. Further material
provisions of the Preferred Stock will be summarized in the Prospectus
Supplement relating thereto.
GENERAL
The authorized capital stock of the Company consists of 200,000,000 shares of
Common Stock, $1.00 par value per share, and 10,000,000 shares of preferred
stock, $1.00 par value per share ("preferred stock of the Company," which term,
as used herein, includes the Preferred Stock offered hereby). See "Description
of Common Stock."
Under the Certificate of Incorporation, the Board of Directors of the Company
is authorized without further stockholder action to provide for the issuance of
up to 10,000,000 shares of preferred stock of the Company, in one or more
series, with such voting powers, full or limited, and with such designations,
preferences and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, as shall be stated in the
resolution or resolutions providing for the issue of a series of such stock,
adopted, at any time or from time to time, by the Board of Directors of the
Company (as used herein the term "Board of Directors of the Company" includes
any duly authorized committee thereof).
As described under "Description of Depositary Shares," the Company may, at
its option, elect to offer Depositary Shares evidenced by depositary receipts
(the "Depositary Receipts"), each representing a fraction (to be specified in
the Prospectus Supplement relating to the particular series of the Preferred
Stock) of a share of the particular series of the Preferred Stock issued and
deposited with a depositary, in lieu of offering full shares of such series of
the Preferred Stock.
Under regulations adopted by the OTS, if the holders of shares of any series
of Preferred Stock of the Company become entitled to vote for the election of
directors because dividends on such series are in arrears, such series may then
be deemed a "class of voting securities" and a holder of more than 25% of such
series (or a holder of more than 10% if it has any "control factor" with
respect to the Company or a holder of any shares of Preferred Stock if it
exercises a "controlling influence" over the Company) may then be subject to
regulation as a savings and loan holding company in accordance with the Savings
and Loan Holding Company Act, as amended. In addition, at such time as such
series is deemed a class of voting securities, (i) any other savings and loan
holding company may be required to obtain the approval of the OTS under the
Savings and Loan Holding Company Act, as amended, to acquire or retain more
than 5% of such series and (ii) any person other than a savings and loan
holding company may be required to obtain the approval of the OTS under the
Change in Bank Control Act to acquire or retain more than 10% of such series.
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The Preferred Stock shall have the dividend, liquidation, redemption and
voting rights set forth below unless otherwise provided in a Prospectus
Supplement relating to a particular series of the Preferred Stock. Reference is
made to the Prospectus Supplement relating to the particular series of the
Preferred Stock offered thereby for specific terms, including: (i) the
designation and stated value per share of such Preferred Stock and the number
of shares offered; (ii) the amount of liquidation preference per share; (iii)
the initial public offering price at which such Preferred Stock will be issued;
(iv) the dividend rate (or method of calculation), the dates on which dividends
shall be payable and the dates from which dividends shall commence to cumulate,
if any; (v) any redemption or sinking fund provisions; (vi) any conversion
rights; (vii) whether the Company has elected to offer Depositary Shares as
described below under "Description of Depositary Shares;" and (viii) any
additional voting, dividend, liquidation, redemption, sinking fund and other
rights, preferences, privileges, limitations and restrictions.
The Preferred Stock will, when issued, be fully paid and nonassessable and
will have no preemptive rights. Unless otherwise stated in a Prospectus
Supplement relating to a particular series of the Preferred Stock, each series
of the Preferred Stock will rank on a parity as to dividends and distributions
of assets with each other series of the Preferred Stock. The rights of the
holders of each series of the Preferred Stock will be subordinate to those of
the Company's general creditors.
CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION
Pursuant to the Certificate of Incorporation, the Company's Board of
Directors is classified into three classes, such classes to include as nearly
equal a number of directors as possible. Each class of directors serves for a
term of three years, with one class being elected each year. As of the date of
this Prospectus, there are eleven directors. The Certificate of Incorporation
provides that (i) notwithstanding any increase or decrease in the authorized
number of directors, each director then serving shall continue as a director
until the expiration of his term, (ii) no director may be removed except for
cause, and (iii) any vacancy in any class of directors, including a vacancy
arising through an increase in the number of directors, shall be filled by a
majority of the remaining directors of such class or by the sole remaining
director of such class or, if none, by a majority of the remaining directors.
Notwithstanding the foregoing, whenever the stockholders of any class of stock
or series thereof are entitled to elect one or more directors of the Company by
the provisions of the Certificate of Incorporation, including any Certificate
of Designations, vacancies and newly created directorships of such class or
series may be filled by a majority of the directors elected by such class or
series thereof then in office, or by the sole remaining director so elected.
The affirmative vote of stockholders representing at least 75 percent of the
shares entitled to vote thereon is required to amend or repeal the provisions
described in the preceding two sentences or the classification of the Company's
Board of Directors into three classes.
Certain of the foregoing provisions of the Certificate of Incorporation will
likely make it more difficult for another entity to effect certain business
combinations with the Company or to take control of the Board of Directors of
the Company. In addition, the foregoing summary of certain provisions of the
Certificate of Incorporation does not purport to be complete or to give effect
to provisions of statutory or common law. The foregoing summary is subject to,
and qualified in its entirety by reference to, the provisions of applicable law
and the Certificate of Incorporation, a copy of which is incorporated by
reference as an exhibit to the Registration Statement of which this Prospectus
is a part.
DIVIDEND RIGHTS
Holders of the Preferred Stock of each series will be entitled to receive,
when, as and if declared by the Board of Directors of the Company, out of funds
of the Company legally available therefor, cash dividends on such dates and at
such rates as are set forth in, or as are determined by the method described
in, the Prospectus Supplement relating to such series of the Preferred Stock.
Such rate may be fixed or variable or both. Each such dividend will be payable
to the holders of record as they appear on the stock books of the Company (or,
if applicable, the records of the Share Depositary (as hereinafter defined)
referred to under "Description of Depositary Shares") on such record dates,
fixed by the Board of Directors of the Company, as specified in the Prospectus
Supplement relating to such series of Preferred Stock.
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Such dividends may be cumulative or noncumulative, as provided in the
Prospectus Supplement relating to such series of Preferred Stock. If the Board
of Directors of the Company fails to declare a dividend payable on a dividend
payment date on any series of Preferred Stock for which dividends are
noncumulative, then the right to receive a dividend in respect of the dividend
period ending on such dividend payment date will be lost, and the Company shall
have no obligation to pay the dividend accrued for such period, whether or not
dividends on such series are declared payable on any future dividend payment
dates. Dividends on the shares of each series of Preferred Stock for which
dividends are cumulative will accrue from the date on which the Company
initially issues shares of such series.
So long as the shares of any series of the Preferred Stock shall be
outstanding, unless (i) full dividends (including if such Preferred Stock is
cumulative, dividends for prior dividend periods) shall have been paid or
declared and set apart for payment on all outstanding shares of the Preferred
Stock of such series and all other classes and series of preferred stock of the
Company (other than Junior Stock, as defined below) and (ii) the Company is not
in default or in arrears with respect to the mandatory or optional redemption
or mandatory repurchase or other mandatory retirement of, or with respect to
any sinking or other analogous fund for, any shares of Preferred Stock of such
series or any shares of any other preferred stock of the Company of any class
or series (other than Junior Stock), the Company may not declare any dividends
on any shares of Common Stock of the Company or any other stock of the Company
ranking as to dividends or distributions of assets junior to such series of
Preferred Stock (the Common Stock and any such other stock being herein
referred to as "Junior Stock"), or make any payment on account of, or set apart
money for, the purchase, redemption or other retirement of, or for a sinking or
other analogous fund for, any shares of Junior Stock or make any distribution
in respect thereof, whether in cash or property or in obligations or stock of
the Company, other than Junior Stock which is neither convertible into, nor
exchangeable or exercisable for, any securities of the Company other than
Junior Stock and other than the redemption of Rights (as defined below) of the
Company.
LIQUIDATION PREFERENCE
In the event of any liquidation, dissolution or winding up of the Company,
voluntary or involuntary, the holders of each series of the Preferred Stock
will be entitled to receive out of the assets of the Company available for
distribution to stockholders, before any distribution of assets is made to the
holders of Common Stock or any other shares of stock of the Company ranking
junior as to such distribution to such series of the Preferred Stock, the
amount set forth in the Prospectus Supplement relating to such series of the
Preferred Stock. If, upon any voluntary or involuntary liquidation, dissolution
or winding up of the Company, the amounts payable with respect to the Preferred
Stock of any series and any other shares of preferred stock of the Company
(including any other series of the Preferred Stock) ranking as to any such
distribution on a parity with such series of the Preferred Stock are not paid
in full, the holders of the Preferred Stock of such series and of such other
shares of preferred stock of the Company will share ratably in any such
distribution of assets of the Company in proportion to the full respective
preferential amounts to which they are entitled. After payment to the holders
of the Preferred Stock of each series of the full preferential amounts of the
liquidating distribution to which they are entitled, the holders of each such
series of the Preferred Stock will be entitled to no further participation in
any distribution of assets by the Company.
REDEMPTION
A series of the Preferred Stock may be redeemable, in whole or from time to
time in part, at the option of the Company, and may be subject to mandatory
redemption pursuant to a sinking fund or otherwise, in each case upon terms, at
the times and at the redemption prices set forth in the Prospectus Supplement
relating to such series. Shares of the Preferred Stock redeemed by the Company
will be restored to the status of authorized but unissued shares of preferred
stock of the Company.
In the event that fewer than all of the outstanding shares of a series of the
Preferred Stock are to be redeemed, whether by mandatory or optional
redemption, the number of shares to be redeemed will be
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determined by lot or pro rata (subject to rounding to avoid fractional shares)
as may be determined by the Company or by any other method as may be determined
by the Company in its sole discretion to be equitable. From and after the
redemption date (unless default shall be made by the Company in providing for
the payment of the redemption price plus accumulated and unpaid dividends, if
any), dividends shall cease to accumulate on the shares of the Preferred Stock
called for redemption and all rights of the holders thereof (except the right
to receive the redemption price plus accumulated and unpaid dividends, if any)
shall cease.
So long as any dividends on shares of any series of the Preferred Stock or
any other series of preferred stock of the Company ranking on a parity as to
dividends and distribution of assets with such series of the Preferred Stock
are in arrears, no shares of any such series of the Preferred Stock or such
other series of preferred stock of the Company will be redeemed (whether by
mandatory or optional redemption) unless all such shares are simultaneously
redeemed, and the Company will not purchase or otherwise acquire any such
shares; provided, however, that the foregoing will not prevent the purchase or
acquisition of such shares pursuant to a purchase or exchange offer made on the
same terms to holders of all such shares outstanding.
CONVERSION RIGHTS
The terms, if any, on which shares of Preferred Stock of any series may be
exchanged for or converted (mandatorily or otherwise) into shares of Common
Stock or another series of Preferred Stock will be set forth in the Prospectus
Supplement relating thereto. See "Description of Common Stock."
VOTING RIGHTS
Except as indicated below or in a Prospectus Supplement relating to a
particular series of the Preferred Stock, or except as required by applicable
law, the holders of the Preferred Stock will not be entitled to vote for any
purpose.
So long as any shares of the Preferred Stock of a series remain outstanding,
the consent or the affirmative vote of the holders of at least 66 2/3% of the
votes entitled to be cast with respect to the then outstanding shares of such
series of the Preferred Stock together with any Other Preferred Stock (as
defined below), voting as one class, either expressed in writing or at a
meeting called for that purpose, will be necessary (i) to permit, effect or
validate the authorization, or any increase in the authorized amount, of any
class or series of shares of the Company ranking prior to the Preferred Stock
of such series as to dividends, voting or upon distribution of assets and (ii)
to repeal, amend or otherwise change any of the provisions applicable to the
Preferred Stock of such series in any manner which adversely affects the
powers, preferences, voting power or other rights or privileges of such series
of the Preferred Stock. In case any series of the Preferred Stock would be so
affected by any such action referred to in clause (ii) above in a different
manner than one or more series of the Other Preferred Stock then outstanding,
the holders of shares of the Preferred Stock of such series, together with any
series of the Other Preferred Stock which will be similarly affected, will be
entitled to vote as a class, and the Company will not take such action without
the consent or affirmative vote, as above provided, of at least 66 2/3% of the
total number of votes entitled to be cast with respect to each such series of
the Preferred Stock and the Other Preferred Stock, then outstanding, in lieu of
the consent or affirmative vote hereinabove otherwise required.
With respect to any matter as to which the Preferred Stock of any series is
entitled to vote, holders of the Preferred Stock of such series and any other
series of preferred stock of the Company ranking on a parity with such series
of the Preferred Stock as to dividends and distributions of assets and which by
its terms provides for similar voting rights (the "Other Preferred Stock") will
be entitled to cast the number of votes set forth in the Prospectus Supplement
with respect to that series of Preferred Stock. As a result of the provisions
described in the preceding paragraph requiring the holders of shares of a
series of the Preferred Stock to vote together as a class with the holders of
shares of one or more series of Other Preferred Stock, it is possible that the
holders of such shares of Other Preferred Stock could approve action that would
adversely affect such series of Preferred Stock, including the creation of a
class of capital stock ranking prior to such series of Preferred Stock as to
dividends, voting or distributions of assets.
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As more fully described below under "Description of Depositary Shares," if
the Company elects to issue Depositary Shares, each representing a fraction of
a share of a series of the Preferred Stock, each such Depositary Share will, in
effect, be entitled to such fraction of a vote per Depositary Share.
TRANSFER AGENT AND REGISTRAR
Unless otherwise indicated in a Prospectus Supplement relating thereto,
Harris Trust Company of California will be the transfer agent, dividend and
redemption price disbursement agent and registrar for shares of each series of
the Preferred Stock.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of the
material general provisions of the Deposit Agreement (as defined below) and of
the Depositary Shares and Depositary Receipts do not purport to be complete and
are subject to and qualified in their entirety by reference to the Deposit
Agreement and Depositary Receipts relating to each series of the Preferred
Stock which will be filed with the Commission and incorporated by reference as
an exhibit to the Registration Statement of which this Prospectus is a part at
or prior to the time of the issuance of such series of the Preferred Stock. The
forms of Deposit Agreement and Depositary Receipt are filed as exhibits to the
Registration Statement of which this Prospectus is a part. Further material
provisions of the Depositary Shares will be summarized in the Prospectus
Supplement relating thereto.
GENERAL
The Company may, at its option, elect to offer fractional shares of Preferred
Stock rather than full shares of Preferred Stock. In the event such option is
exercised, the Company will issue to the public receipts for Depositary Shares,
each of which will represent a fraction (to be set forth in the Prospectus
Supplement relating to a particular series of the Preferred Stock) of a share
of a particular series of the Preferred Stock as described below.
The shares of any series of the Preferred Stock represented by Depositary
Shares will be deposited under a separate deposit agreement (the "Deposit
Agreement") among the Company, a bank or trust company selected by the Company
(the "Share Depositary") and the holders from time to time of the Depositary
Receipts. Subject to the terms of the Deposit Agreement, each owner of a
Depositary Share will be entitled, in proportion to the applicable fraction of
a share of Preferred Stock represented by such Depositary Share, to all the
rights and preferences of the Preferred Stock represented thereby (including
dividend, voting, redemption and liquidation rights).
The Depositary Shares relating to any series of the Preferred Stock will be
evidenced by Depositary Receipts issued pursuant to the related Deposit
Agreement. Depositary Receipts will be distributed to those persons purchasing
such Depositary Shares in accordance with the terms of the offering made by the
related Prospectus Supplement.
Upon surrender of Depositary Receipts at the office of the Share Depositary
and upon payment of the charges provided in the Deposit Agreement and subject
to the terms thereof, a holder of Depositary Receipts is entitled to have the
Share Depositary deliver to such holder the whole shares of Preferred Stock
underlying the Depositary Shares evidenced by the surrendered Depositary
Receipts.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Share Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Receipts relating to such Preferred Stock in proportion, insofar
as practicable, to the respective numbers of Depositary Shares evidenced by
such Depositary Receipts held by such holders on the relevant record date. The
Share Depositary shall distribute
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only such amount, however, as can be distributed without attributing to any
holder of Depositary Receipts a fraction of one cent, and any balance not so
distributed shall be added to and treated as part of the next sum received by
the Share Depositary for distribution to record holders of Depositary Receipts
then outstanding.
In the event of a distribution other than in cash, the Share Depositary will
distribute such amounts of the securities or property received by it as are, as
nearly as practicable, in proportion to the respective numbers of Depositary
Shares evidenced by the Depositary Receipts held by such holders on the
relevant record date, unless the Share Depositary determines that it is not
feasible to make such distribution, in which case the Share Depositary may,
with the approval of the Company, adopt such method as it deems equitable and
practicable for the purpose of effecting such distribution, including the sale
of such securities or property.
The Deposit Agreement will also contain provisions relating to the manner in
which any subscription or similar rights offered by the Company to holders of
the Preferred Stock shall be made available to holders of Depositary Receipts.
The amount distributed in all of the foregoing cases will be reduced by any
amounts required to be withheld by the Company or the Share Depositary on
account of taxes and governmental charges.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock represented by Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Share Depositary resulting from the redemption, in whole or in
part, of such series of the Preferred Stock held by the Share Depositary. The
Share Depositary shall mail notice of redemption not less than 30 and not more
than 60 days prior to the date fixed for redemption to the record holders of
the Depositary Receipts evidencing the Depositary Shares to be so redeemed at
their respective addresses appearing in the Share Depositary's books. The
redemption price per Depositary Share will be equal to the applicable fraction
of the redemption price per share payable with respect to such series of the
Preferred Stock plus all money and other property, if any, payable with respect
to such Depositary Share, including all amounts payable by the Company in
respect of any accumulated but unpaid dividends. Whenever the Company redeems
shares of Preferred Stock held by the Share Depositary, the Share Depositary
will redeem as of the same redemption date the number of Depositary Shares
representing shares of Preferred Stock so redeemed. If less than all the
Depositary Shares are to be redeemed, the Depositary Shares to be redeemed will
be selected by lot or pro rata (subject to rounding to avoid fractions of
Depositary Shares) as may be determined by the Share Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of Depositary Receipts evidencing such Depositary Shares will cease,
except the right to receive the moneys payable upon such redemption and any
money or other property to which such holders were entitled upon such
redemption upon surrender to the Share Depositary of the Depositary Receipts
evidencing such Depositary Shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting or action to be taken by written
consent at or as to which the holders of the Preferred Stock are entitled to
vote or consent, the Share Depositary will mail the information contained in
such notice of meeting or action to the record holders of the Depositary
Receipts evidencing the Depositary Shares relating to such Preferred Stock.
Each record holder of such Depositary Receipts on the record date (which will
be the same date as the record date for the Preferred Stock) will be entitled
to instruct the Share Depositary as to the exercise of the voting rights or the
giving or refusal of consent, as the case may be, pertaining to the number of
shares of the Preferred Stock represented by the Depositary Shares evidenced by
such holder's Depositary Receipts. The Share Depositary will endeavor, insofar
as practicable, to vote, or give or withhold consent with respect to, the
maximum number of whole shares of the Preferred Stock represented by all
Depositary Shares as to which any particular voting or consent instructions are
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received, and the Company will agree to take all action which may be deemed
necessary by the Share Depositary in order to enable the Share Depositary to do
so. The Share Depositary will abstain from voting, or giving consents with
respect to, shares of the Preferred Stock to the extent it does not receive
specific instructions from the holders of Depositary Receipts evidencing
Depositary Shares representing such Preferred Stock.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares relating to
any series of Preferred Stock and any provision of the related Deposit
Agreement may at any time and from time to time be amended by agreement between
the Company and the Share Depositary in any respect which they may deem
necessary or desirable. However, any amendment which imposes or increases any
fees, taxes or charges upon holders of Depositary Shares or Depositary Receipts
relating to any series of Preferred Stock or which materially and adversely
alters the existing rights of such holders will not be effective unless such
amendment has been approved by the record holders of Depositary Receipts
evidencing at least a majority of such Depositary Shares then outstanding.
Notwithstanding the foregoing, no such amendment may impair the right of any
holder of Depositary Shares or Depositary Receipts to receive any moneys or
other property to which such holder may be entitled under the terms of such
Depositary Receipts or the Deposit Agreement at the times and in the manner and
amount provided for therein. A Deposit Agreement may be terminated by the
Company or the Share Depositary only after (i) all outstanding Depositary
Shares relating thereto have been redeemed and any accumulated and unpaid
dividends on the Preferred Stock represented by the Depositary Shares, together
with all other moneys and property, if any, to which holders of the related
Depositary Receipts are entitled under the terms of such Depositary Receipts or
the related Deposit Agreement, have been paid or distributed as provided in the
Deposit Agreement or provision therefor has been duly made, (ii) there has been
a final distribution in respect of the Preferred Stock of the relevant series
in connection with any liquidation, dissolution or winding up of the Company
and such distribution has been distributed to the holders of the related
Depositary Receipts, or (iii) in the event the Depositary Shares relate to a
series of Preferred Stock which is convertible into shares of Common Stock or
another series of Preferred Stock, all outstanding Depositary Shares have been
converted into shares of Common Stock or another series of Preferred Stock.
MISCELLANEOUS
The Share Depositary will forward to record holders of Depositary Receipts,
at their respective addresses appearing in the Share Depositary's books, all
reports and communications from the Company which are delivered to the Share
Depositary and which the Company is required to furnish to the holders of the
Preferred Stock or Depositary Receipts.
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Share Depositary in connection with the initial deposit
of the Preferred Stock and the initial issuance of the Depositary Receipts
evidencing the Depositary Shares, any redemption of the Preferred Stock and any
withdrawals of Preferred Stock by the holders of Depositary Shares. Holders of
Depositary Shares will pay other transfer and other taxes and governmental
charges and such other charges as are expressly provided in the Deposit
Agreement to be for their accounts.
The Deposit Agreement will contain provisions relating to adjustments in the
fraction of a share of Preferred Stock represented by a Depositary Share in the
event of a change in par or stated value, split-up, combination or other
reclassification of the Preferred Stock or upon any recapitalization, merger or
sale of substantially all of the assets of the Company.
Neither the Share Depositary nor any of its agents nor any registrar nor the
Company will be (i) liable if it is prevented or delayed by law or any
circumstance beyond its control in performing its obligations under the Deposit
Agreement, (ii) subject to any liability under the Deposit Agreement to holders
of Depositary
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Receipts other than for the relevant party's gross negligence or willful
misconduct, or (iii) obligated to prosecute or defend any legal proceeding in
respect of any Depositary Receipts, Depositary Shares or the Preferred Stock
unless satisfactory indemnity is furnished. They may rely upon written advice
of counsel or accountants, or information provided by holders of Depositary
Receipts or other persons in good faith believed to be competent and on
documents reasonably believed to be genuine.
RESIGNATION OR REMOVAL OF SHARE DEPOSITARY
The Share Depositary may resign at any time by delivering to the Company
notice of its election to do so, and the Company may at any time remove the
Share Depositary, any such resignation or removal to take effect upon the
appointment of a successor Share Depositary and its acceptance of such
appointment. Such successor Share Depositary must be appointed within 60 days
after delivery of the notice of resignation or removal.
DESCRIPTION OF COMMON STOCK
GENERAL
The holders of the outstanding shares of Common Stock have full voting
rights, one vote for each share held of record. Subject to the rights of
holders of preferred stock of the Company, holders of Common Stock are entitled
to receive such dividends as may be declared by the Board of Directors of the
Company out of funds legally available therefor. Upon liquidation, dissolution,
or winding up of the Company (but subject to the rights of holders of preferred
stock of the Company), the assets legally available for distribution to holders
of Common Stock shall be distributed ratably among such holders. Holders of
Common Stock have no preemptive or other subscription or conversion rights, and
no liability for further calls upon shares. The Common Stock is not subject to
assessment.
The Transfer Agent and Registrar for the Common Stock is Harris Trust Company
of California.
RIGHTS
On June 24, 1986, the Board of Directors of the Company adopted a Rights Plan
pursuant to which the Company distributed one right (a "Right") for each
outstanding share of Common Stock held as of the close of business on July 14,
1986. As a result of the five for two stock dividend paid on May 28, 1987 to
holders of record of the Common Stock on May 14, 1987, effective May 28, 1987
each Right was proportionally adjusted so that each share of Common Stock is
accompanied by two-fifths of a Right instead of one full Right. Only full
Rights will be exercisable if the Rights become exercisable. In addition, the
Rights Plan was amended by amendments dated as of February 19, 1988 and June
27, 1995.
Each full Right, if it becomes exercisable, initially entitles the holder to
purchase from the Company a unit of one one-hundredth of a share of Series A
Junior Participating Preferred Stock, par value $1.00 per share, at a purchase
price of $175 per unit, subject to adjustment. The Rights attach to shares of
Common Stock issued after July 14, 1986, and will expire on July 14, 1996
unless redeemed earlier. The Rights may not be exercised, and will not detach
or trade separately from the Common Stock, except as described below.
The Rights will detach from the Common Stock and may be exercised only if a
person or group becomes the beneficial owner of 15% or more of the Common Stock
(a "Stock Acquisition"). If a Stock Acquisition occurs (except pursuant to an
offer for all outstanding shares of the Common Stock which the Company's
independent directors determine is fair to and otherwise in the best interests
of the Company and its stockholders), the Rights "flip-in" and each Right not
owned by such person will entitle the holder to purchase, at the Right's then
current exercise price, Common Stock (or, if the number of shares of authorized
Common Stock is insufficient to permit the full exercise of the Rights, cash,
property or other securities of the Company) having a formula value equal to
twice the Right's exercise price. In addition, if at any time following a Stock
Acquisition, (i) the Company is acquired in a merger or other business
combination transaction in which the Company is not the surviving corporation
(other than a merger which follows an
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offer at the same price and for the same consideration as the offer approved by
the Board of Directors of the Company as described in the immediately preceding
sentence), or (ii) 50% or more of the Company's assets or earnings power is
sold or transferred, the Rights "flip-over" and each unexercised Right will
entitle its holder to purchase, at the Right's then current exercise price,
common shares of the other person having a formula value equal to twice the
Right's exercise price. The Rights may be redeemed by the Company at any time
prior to ten days following the date of a Stock Acquisition (which period may
be extended by the Company's Board of Directors at any time while the Rights
are still redeemable). Upon the occurrence of a "flip-in" or "flip-over" event,
if the Rights are not redeemed, the Rights would result in substantial dilution
to any person who has acquired 15% or more of the outstanding Common Stock or
who attempts to merge or consolidate with the Company. As a result, the Rights
may deter potential attempts to acquire control of the Company without the
approval of the Company's Board of Directors.
On June 27, 1995, the Board of Directors of the Company also declared a
dividend distribution of one Right (each a "New Right") for each outstanding
share of Common Stock to stockholders of record at the close of business on the
earlier of the date on which the current Rights Plan expires or the date on
which the existing Rights are redeemed in accordance with the provisions of the
current Rights Plan. Each New Right is identical to the existing Rights, except
that the New Rights will initially entitle the holder to purchase from the
Company a unit of one one-hundredth of a share of Series A Junior Participating
Preferred Stock, par value $1.00 per share, at a purchase price of $80.00 per
unit, subject to adjustment, and the New Rights will expire on July 14, 2006.
DESCRIPTION OF PREFERRED SECURITIES
Set forth below is a summary of information concerning the Preferred
Securities which may be issued by the Trust. The Declaration authorizes the
Regular Trustees of the Trust to issue on behalf of the Trust one series of
Preferred Securities having the terms described in the Prospectus Supplement
relating thereto. The Declaration will be qualified as an indenture under the
Trust Indenture Act. The terms of the Preferred Securities will be those set
forth in the Declaration and those made part of the Declaration by the Trust
Indenture Act. This summary of the material general provisions of the Preferred
Securities does not purport to be complete and is subject in all respects to
the provisions of, and is qualified in its entirety by reference to, the form
of Declaration, as amended and restated, which is filed as an exhibit to the
Registration Statement of which this Prospectus is a part, and the Trust
Indenture Act. Further material provisions of the Preferred Securities will be
summarized in the Prospectus Supplement relating thereto.
The Preferred Securities will have such terms, including distribution,
redemption, voting, liquidation and such other preferred, deferred or other
special rights or such restrictions as shall be set forth in the Declaration or
made part of the Declaration by the Trust Indenture Act. Reference is made to
the Prospectus Supplement relating to the Preferred Securities for specific
terms, including (i) the distinctive designation of the Preferred Securities,
(ii) the number of Preferred Securities issued, (iii) the annual distribution
rate (or method for determining such rate) for the Preferred Securities and the
date or dates upon which such distributions shall be payable (provided,
however, that distributions on the Preferred Securities shall be payable on a
quarterly basis to holders of the Preferred Securities as of a record date in
each quarter during which the Preferred Securities are outstanding), (iv)
whether distributions on Preferred Securities issued by the Trust shall be
cumulative, and, in the case of Preferred Securities having such cumulative
distribution rights, the date or dates or method of determining the date or
dates from which distributions on the Preferred Securities shall be cumulative,
(v) the amount or amounts which shall be paid out of the assets of the Trust to
the holders of the Preferred Securities upon voluntary or involuntary
liquidation, dissolution, winding-up or termination of the Trust, (vi) the
obligation, if any, of the Trust to purchase or redeem the Preferred Securities
and the price or prices at which, the period or periods within which and the
terms and conditions upon which the Preferred Securities shall be purchased or
redeemed, in whole or in part, pursuant to such obligation, (vii) the voting
rights, if any, of the Preferred Securities in addition to those required by
law, including the number of votes per Preferred Security and any requirement
for the approval by the holders of
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the Preferred Securities, as a condition to specified action or amendments to
the Declaration, and (viii) any other relevant rights, preferences, privileges,
limitations or restrictions on Preferred Securities consistent with the
Declaration and applicable law.
All Preferred Securities offered hereby will be guaranteed by the Company to
the extent set forth below under "Description of Guarantee." Certain United
States federal income tax considerations applicable to any offering of
Preferred Securities will be described in the Prospectus Supplement relating
thereto.
In connection with the issuance of Preferred Securities, the Trust will issue
one series of Common Securities having such terms including distribution,
redemption, voting, liquidation and such other preferred, deferred or other
special rights or such restrictions as shall be set forth therein. The terms of
the Common Securities will be substantially identical to the terms of the
Preferred Securities and the Common Securities will rank pari passu, and
payments will be made thereon pro rata with the Preferred Securities except
that, upon an event of default under the Declaration, the rights of the holders
of the Common Securities to payment in respect of distributions and payments
upon liquidation, redemption and otherwise will be subordinated to the rights
of the holders of the Preferred Securities. Except in certain limited
circumstances, the Common Securities will also carry the right to vote and to
appoint, remove or replace any of the Trustees of the Trust. All of the Common
Securities will be directly or indirectly owned by the Company.
DESCRIPTION OF GUARANTEE
Set forth below is a summary of information concerning the Guarantee that
will be executed and delivered by the Company for the benefit of the holders of
Preferred Securities. The Guarantee will be qualified as an indenture under the
Trust Indenture Act. The First National Bank of Chicago will act as indenture
trustee under the Guarantee (the "Guarantee Trustee"). The terms of the
Guarantee will be those set forth in the Guarantee and those made part of the
Guarantee by the Trust Indenture Act. This summary of the material general
provisions of the Guarantee does not purport to be complete and is subject in
all respects to the provisions of, and is qualified in its entirety by
reference to, the form of Guarantee, which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part, and the Trust
Indenture Act. The Guarantee will be held by the Guarantee Trustee for the
benefit of the holders of the Preferred Securities. Further material provisions
of the Guarantee will be summarized in the Prospectus Supplement relating
thereto.
GENERAL
Pursuant to the Guarantee, the Company will irrevocably and unconditionally
agree, to the extent set forth therein, to pay in full to the holders of the
Preferred Securities, the Guarantee Payments (as defined herein) (except to the
extent paid by the Trust), as and when due, regardless of any defense, right of
set-off or counterclaim that the Trust may have or assert. The following
amounts with respect to the Preferred Securities (the "Guarantee Payments"), to
the extent not paid by the Trust, will be subject to the Guarantee (without
duplication): (i) any accrued and unpaid distributions that are required to be
paid on the Preferred Securities, to the extent the Trust shall have funds
available therefor, which funds would exist only to the extent the Company has
made a payment of interest or principal on the Subordinated Debt Securities,
(ii) the redemption price, including all accrued and unpaid distributions (the
"Redemption Price"), to the extent the Trust has funds available therefor with
respect to any Preferred Securities called for redemption by the Trust, which
funds would exist only to the extent the Company has paid the redemption price
for the Subordinated Debt Securities called for redemption and (iii) upon a
voluntary or involuntary liquidation, dissolution, winding-up or termination of
the Trust (other than in connection with the distribution of Subordinated Debt
Securities of the Company to the holders of Preferred Securities or the
redemption of all the Preferred Securities upon maturity or redemption of the
Subordinated Debt Securities), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid distributions on the Preferred
Securities to the date of payment to the extent the Trust has funds available
therefor or (b) the amount of assets of the Trust remaining
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available for distribution to holders of the Preferred Securities in
liquidation of the Trust. The Company's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by the Company to
the holders of Preferred Securities or by causing the Trust to pay such amounts
to such holders.
The Guarantee will be a guarantee on a subordinated basis with respect to the
Preferred Securities from the time of issuance, but will not apply to any
payment of distributions except to the extent the Trust shall have funds
available therefor. If the Company does not make interest payments on the
Subordinated Debt Securities purchased by the Trust, the Trust will not pay
distributions on the Preferred Securities and will not have funds available
therefor. See "Description of Debt Securities--Particular Terms of the
Subordinated Debt Securities Issued to the Trust."
The obligations of the Company under the Declaration, the Guarantee, the
Subordinated Indenture and the Subordinated Debt Securities will collectively
provide a full and unconditional guarantee on a subordinated basis by the
Company of payments due on the Preferred Securities.
The Company has also agreed to irrevocably and unconditionally guarantee the
obligations of the Trust with respect to the Common Securities (the "Common
Securities guarantee") to the same extent as the Guarantee, except that, upon
an Event of Default under the Subordinated Indenture, holders of Preferred
Securities under the Guarantee shall have priority over holders of Common
Securities under the Common Securities guarantee with respect to distributions
and payments on liquidation, redemption or otherwise.
CERTAIN COVENANTS OF THE COMPANY
In the Guarantee, the Company will covenant that, so long as any Preferred
Securities issued by the Trust remain outstanding, if there shall have occurred
any event that would constitute an event of default under the Guarantee or the
Declaration, then (a) the Company shall not, and shall cause any subsidiary of
the Company which is not a wholly-owned subsidiary of the Company not to,
declare or pay any dividend on, or make any distribution with respect to, or
redeem, purchase or acquire or make a liquidation payment with respect to, any
of its capital stock or the capital stock of any such subsidiary and (b) the
Company shall not make any payment of interest, principal or premium, if any,
on or repay, repurchase or redeem any debt securities (including guarantees)
issued by the Company which rank pari passu with or junior to such Subordinated
Debt Securities. However, the restriction in (a) above will not apply to any
stock dividend paid by the Company, or any of its subsidiaries, where the
dividend stock is the same stock as that on which the dividend is being paid.
MODIFICATIONS OF THE GUARANTEE; ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights of
holders of the Preferred Securities (in which case no vote will be required),
the Guarantee may be amended only with the prior approval of the holders of not
less than 66 2/3% in liquidation amount of the Preferred Securities then
outstanding. All guarantees and agreements contained in a Guarantee shall bind
the successors, assigns, receivers, trustees and representatives of the Company
and shall inure to the benefit of the holders of the Preferred Securities then
outstanding.
EVENTS OF DEFAULT
An Event of Default under the Guarantee will occur upon the failure of the
Company to make any of the payments required by the Guarantee or to perform its
other obligations thereunder. The holders of a majority in liquidation amount
of the Preferred Securities have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Guarantee Trustee
in respect of the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee. Any holder of
Preferred Securities may institute a legal proceeding directly against the
Company to enforce its rights under the Guarantee, without first instituting a
legal proceeding against the Trust, the Guarantee Trustee or any other person.
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The Company will be required to provide annually to the Guarantee Trustee a
statement as to the performance by the Company of certain of its obligations
under the Guarantee and as to any default in such performance.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default, undertakes to
perform only such duties as are specifically set forth in the Guarantee and,
after default with respect to the Guarantee, shall exercise the same degree of
care a prudent person would exercise under the circumstances in the conduct of
his or her own affairs. Subject to such provision, the Guarantee Trustee is
under no obligation to exercise any of the powers vested in it by the Guarantee
at the request of any holder of the Preferred Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate as to the Preferred Securities upon full payment
of the Redemption Price of all Preferred Securities, upon distribution of the
Subordinated Debt Securities of the Company held by the Trust to the holders of
the Preferred Securities or upon full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Trust. The Guarantee
will continue to be effective or will be reinstated, as the case may be, if at
any time any holder of Preferred Securities must restore payment of any sums
paid under the Preferred Securities or the Guarantee.
STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of the Company and will
rank (i) subordinate and junior in right of payment to all other liabilities of
the Company (other than the Common Securities guarantee or any guarantee now or
hereafter entered into by the Company in respect of any preferred or preference
stock of any affiliate of the Company), (ii) pari passu with the most senior
preferred or preference stock now or hereafter issued by the Company and with
any guarantee now or hereafter entered into by the Company in respect of any
preferred or preference stock of any affiliate of the Company and (iii) senior
to the Company's Common Stock. The terms of the Preferred Securities provide
that each holder of Preferred Securities by acceptance thereof agrees to the
subordination provisions and other terms of the Guarantee.
The Guarantee will constitute a guarantee of payment and not of collection
(that is, the guaranteed party may institute a legal proceeding directly
against the Company as the guarantor to enforce its rights under the Guarantee
without instituting a legal proceeding against any other person or entity).
GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the
internal laws of the State of New York.
DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Securities Warrants for the purchase of Debt
Securities, Preferred Stock, Depositary Shares or Common Stock. Securities
Warrants may be issued independently or together with Debt Securities,
Preferred Stock, Depositary Shares or Common Stock offered by any Prospectus
Supplement and may be attached to or separate from such Debt Securities,
Preferred Stock, Depositary Shares or Common Stock. Each series of Securities
Warrants will be issued under a separate warrant agreement (a "Securities
Warrant Agreement") to be entered into between the Company and a bank or trust
company, as Securities Warrant agent, all as set forth in the Prospectus
Supplement relating to the particular issue of offered Securities Warrants. The
Securities Warrant agent will act solely as an agent of the Company in
connection with the Securities Warrant certificates relating to the Securities
Warrants and will not assume any obligation or relationship of agency or trust
for or with any holders of Securities Warrant certificates or beneficial owners
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of Securities Warrants. The following summaries of the material general
provisions of the Securities Warrant Agreements and Securities Warrants do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all the provisions of the Securities Warrant Agreement and the
Securities Warrant certificates relating to each series of Security Warrants
which will be filed with the Commission and incorporated by reference as an
exhibit to the Registration Statement of which this Prospectus is a part at or
prior to the time of the issuance of such series of Securities Warrants.
Further material provisions of the Securities Warrants will be summarized in
the Prospectus Supplement relating thereto.
GENERAL
If Securities Warrants are offered, the applicable Prospectus Supplement will
describe the terms of such Securities Warrants, including, in the case of
Securities Warrants for the purchase of Debt Securities, the following where
applicable: (i) the offering price; (ii) the denominations and terms of the
series of Debt Securities purchasable upon exercise of such Securities Warrants
and whether such Debt Securities are Senior Debt Securities or Subordinated
Debt Securities; (iii) the designation and terms of any series of Debt
Securities with which such Securities Warrants are being offered and the number
of such Securities Warrants being offered with each such Debt Security; (iv)
the date, if any, on and after which such Securities Warrants and the related
series of Debt Securities will be transferable separately; (v) the principal
amount of the series of Debt Securities purchasable upon exercise of each such
Securities Warrant and the price at which such principal amount of Debt
Securities of such series may be purchased upon such exercise; (vi) the date on
which the right to exercise such Securities Warrants shall commence and the
date (the "Expiration Date") on which such right shall expire; (vii) whether
the Securities Warrants will be issued in registered or bearer form; (viii) any
special United States Federal income tax consequences; (ix) the terms, if any,
on which the Company may accelerate the date by which the Securities Warrants
must be exercised; and (x) any other terms of such Securities Warrants.
In the case of Securities Warrants for the purchase of Preferred Stock,
Depositary Shares or Common Stock, the applicable Prospectus Supplement will
describe the terms of such Securities Warrants, including the following where
applicable: (i) the offering price; (ii) the aggregate number of shares
purchasable upon exercise of such Securities Warrants, the exercise price, and
in the case of Securities Warrants for Preferred Stock or Depositary Shares,
the designation, aggregate number and terms of the series of Preferred Stock
purchasable upon exercise of such Securities Warrants or underlying the
Depositary Shares purchasable upon exercise of such Securities Warrants; (iii)
the designation and terms of the series of Preferred Stock or Depositary Shares
with which such Securities Warrants are being offered and the number of such
Securities Warrants being offered with each such share of Preferred Stock or
Depositary Share; (iv) the date, if any, on and after which such Securities
Warrants and the Common Stock or related series of Preferred Stock or
Depositary Shares will be transferable separately; (v) the date on which the
right to exercise such Securities Warrants shall commence and the Expiration
Date; (vi) any special United States Federal income tax consequences; and (vii)
any other terms of such Securities Warrants. Securities Warrants for the
purchase of Preferred Stock, Depositary Shares or Common Stock will be offered
and exercisable for United States dollars only and will be in registered form
only.
Securities Warrant certificates may be exchanged for new Securities Warrant
certificates of different denominations, may (if in registered form) be
presented for registration of transfer, and may be exercised at the corporate
trust office of the Securities Warrant agent or any other office indicated in
the applicable Prospectus Supplement. Prior to the exercise of any Securities
Warrant to purchase Debt Securities, holders of such Securities Warrants will
not have any of the rights of Holders of the Debt Securities purchasable upon
such exercise, including the right to receive payments of principal of,
premium, if any, or interest, if any, on such Debt Securities or to enforce
covenants in the applicable indenture. Prior to the exercise of any Securities
Warrants to purchase Preferred Stock, Depositary Shares or Common Stock,
holders of such Securities Warrants will not have any rights of holders of such
Preferred Stock, Depositary Shares or Common Stock, including the right to
receive payments of dividends, if any, on such Preferred Stock or Common Stock,
or to exercise any applicable right to vote.
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CERTAIN RISK CONSIDERATIONS
Any Securities Warrants issued by the Company will involve a certain degree
of risk, including risks arising from fluctuations in the price of the
underlying securities and general risks applicable to the stock market (or
markets) on which the underlying securities are traded.
Prospective purchasers of the Securities Warrants should recognize that the
Securities Warrants may expire worthless and, thus, purchasers should be
prepared to sustain a total loss of the purchase price of their Securities
Warrants. This risk reflects the nature of a Securities Warrant as an asset
which, other factors held constant, tends to decline in value over time and
which may, depending on the price of the underlying securities, become
worthless when it expires. The trading price of a Securities Warrant at any
time is expected to increase if the price or, if applicable, dividend rate on
the underlying securities, increases. Conversely, the trading price of a
Securities Warrant is expected to decrease as the time remaining to expiration
of the Securities Warrant decreases and as the price or, if applicable,
dividend rate on the underlying securities, decreases. Assuming all other
factors are held constant, the more a Securities Warrant is "out-of-the-money"
(i.e., the more the exercise price exceeds the price of the underlying
securities and the shorter its remaining term to expiration), the greater the
risk that a purchaser of the Securities Warrant will lose all or part of his or
her investment. If the price of the underlying securities does not rise before
the Securities Warrant expires to an extent sufficient to cover a purchaser's
cost of the Securities Warrant, the purchaser will lose all or part of his or
her investment in such Securities Warrant upon expiration.
In addition, prospective purchasers of the Securities Warrants should be
experienced with respect to options and option transactions and understand the
risks associated with options and should reach an investment decision only
after careful consideration, with their financial advisers, of the suitability
of the Securities Warrants in light of their particular financial circumstances
and the information discussed herein and, if applicable, the Prospectus
Supplement. Before purchasing, exercising or selling any Securities Warrants,
prospective purchasers and holders of Securities Warrants should carefully
consider, among other things, (i) the trading price of the Securities Warrants,
(ii) the price of the underlying securities at such time, (iii) the time
remaining to expiration and (iv) any related transaction costs. Some of the
factors referred to above are in turn influenced by various political, economic
and other factors that can affect the trading price of the underlying
securities and should be carefully considered prior to making any investment
decisions.
Purchasers of the Securities Warrants should further consider that the
initial offering price of the Securities Warrants may be in excess of the price
that a purchaser of options might pay for a comparable option in a private,
less liquid transaction. In addition, it is not possible to predict the price
at which the Securities Warrants will trade in the secondary market or whether
any such market will be liquid. The Company may, but is not obligated to, file
an application to list any Securities Warrants issued on a United States
national securities exchange. To the extent that any Securities Warrants are
exercised, the number of Securities Warrants outstanding will decrease, which
may result in a lessening of the liquidity of the Securities Warrants. Finally,
the Securities Warrants will constitute direct, unconditional and unsecured
obligations of the Company and as such will be subject to any changes in the
perceived creditworthiness of the Company.
EXERCISE OF SECURITIES WARRANTS
Each Securities Warrant will entitle the holder thereof to purchase such
principal amount of Debt Securities or number of shares of Preferred Stock,
Depositary Shares or Common Stock, as the case may be, at such exercise price
as shall in each case be set forth in, or calculable from, the Prospectus
Supplement relating to the offered Securities Warrants. After the close of
business on the Expiration Date (or such later date to which such Expiration
Date may be extended by the Company), unexercised Securities Warrants will
become void.
Securities Warrants may be exercised by delivering to the Securities Warrant
agent payment as provided in the applicable Prospectus Supplement of the amount
required to purchase the Debt Securities, Preferred Stock, Depositary Shares or
Common Stock, as the case may be, purchasable upon such exercise together
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with certain information set forth on the reverse side of the Securities
Warrant certificate. Securities Warrants will be deemed to have been exercised
upon receipt of payment of the exercise price, subject to the receipt within
five (5) business days, of the Securities Warrants certificate evidencing such
Securities Warrants. Upon receipt of such payment and the Securities Warrant
certificate properly completed and duly executed at the corporate trust office
of the Securities Warrant agent or any other office indicated in the applicable
Prospectus Supplement, the Company will, as soon as practicable, issue and
deliver the Debt Securities, Preferred Stock, Depositary Shares or Common
Stock, as the case may be, purchasable upon such exercise. If fewer than all of
the Securities Warrants represented by such Securities Warrant certificate are
exercised, a new Securities Warrant certificate will be issued for the
remaining amount of Securities Warrants.
AMENDMENTS AND SUPPLEMENTS TO SECURITIES WARRANT AGREEMENTS
The Securities Warrant Agreements may be amended or supplemented without the
consent of the holders of the Securities Warrants issued thereunder to effect
changes that are not inconsistent with the provisions of the Securities
Warrants and that do not adversely affect the interests of the holders of the
Securities Warrants.
COMMON STOCK WARRANT ADJUSTMENTS
Unless otherwise indicated in the applicable Prospectus Supplement, the
exercise price of, and the number of shares of Common Stock covered by, a
Common Stock Warrant are subject to adjustment in certain events, including (i)
payment of a dividend on the Common Stock payable in capital stock and stock
splits, combinations or reclassifications of the Common Stock, (ii) issuance to
all holders of Common Stock of rights or warrants to subscribe for or purchase
shares of Common Stock at less than their current market price (as defined in
the Securities Warrant Agreement for such series of Common Stock Warrants), and
(iii) certain distributions of evidences of indebtedness or assets (including
securities but excluding cash dividends or distributions paid out of
consolidated earnings or retained earnings or dividends payable in Common
Stock) or of subscription rights and warrants (excluding those referred to
above). If after the distribution date fixed for purposes of distributing to
holders of Common Stock any Rights, exercising holders of any Common Stock
Warrant are not entitled to receive Rights that would otherwise be attributable
(but for the date of exercise) to the shares of Common Stock received upon such
exercise, then adjustment of the exercise price will be made under clause (iii)
of this paragraph as if the Rights were then being distributed to holders of
Common Stock. If such an adjustment is made and the Rights are later redeemed,
invalidated or terminated, then a corresponding reversing adjustment will be
made to the number of shares of Common Stock issuable upon the exercise of such
Common Stock Warrant, on an equitable basis, to take account of such event.
However, the Company may elect to make provision with respect to Rights so that
each share of Common Stock issuable upon exercise of such Common Stock Warrant,
whether or not issued after the distribution date for such Rights, will be
accompanied by the Rights that would otherwise be attributable (but for the
date of exercise) to such shares of Common Stock, in which event the preceding
two sentences will not apply.
No adjustment in the exercise price of, and the number of shares of Common
Stock covered by, a Common Stock Warrant will be made for regular quarterly or
other periodic or recurring cash dividends or distributions or for cash
dividends or distributions to the extent paid from consolidated earnings or
retained earnings. No adjustment will be required unless such adjustment would
require a change of at least 1% in the exercise price then in effect. Except as
stated above, the exercise price of, and the number of shares of Common Stock
covered by, a Common Stock Warrant will not be adjusted for the issuance of
Common Stock or any securities convertible into or exchangeable for Common
Stock, or carrying the right or option to purchase or otherwise acquire the
foregoing, in exchange for cash, other property or services.
In the event of any (i) consolidation or merger of the Company with or into
any entity (other than a consolidation or a merger that does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock), (ii) sale, transfer, lease or conveyance of all or substantially
all of the assets of the Company or (iii) reclassification, capital
reorganization or change of the Common Stock (other
28
<PAGE>
than solely a change in par value or from par value to no par value), then any
holder of a Common Stock Warrant will be entitled, on or after the occurrence
of any such event, to receive on exercise of such Common Stock Warrant the kind
and amount of shares of stock or other securities, cash or other property (or
any combination thereof) that the holder would have received had such holder
exercised such holder's Common Stock Warrant immediately prior to the
occurrence of such event. If the consideration to be received upon exercise of
the Common Stock Warrant following any such event consists of common stock of
the surviving entity, then from and after the occurrence of such event, the
exercise price of such Common Stock Warrant will be subject to the same anti-
dilution and other adjustments described in the second preceding paragraph,
applied as if such common stock were Common Stock.
PLAN OF DISTRIBUTION
The Company and/or the Trust may sell the Securities to one or more
underwriters for public offering and sale by them or may sell the Securities to
investors directly or through agents. Any such underwriter or agent involved in
the offer and sale of Securities will be named in the applicable Prospectus
Supplement. Each of the Company and the Trust has reserved the right to sell
Securities directly to investors on its own behalf in those jurisdictions where
and in such manner as it is authorized to do so.
Underwriters may offer and sell Securities at a fixed price or prices, which
may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. Each of the
Company and the Trust also may, from time to time, authorize dealers, acting as
agents of the Company and/or the Trust, to offer and sell Securities upon the
terms and conditions as are set forth in the applicable Prospectus Supplement.
In connection with the sale of Securities, underwriters may receive
compensation from the Company or the Trust in the form of underwriting
discounts or commissions and may also receive commissions from purchasers of
the Securities for whom they may act as agent. Underwriters may sell Securities
to or through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or commissions
from the purchasers for whom they may act as agent.
Any underwriting compensation paid by the Company or the Trust to
underwriters or agents in connection with the offering of Securities, and any
discounts, concessions or commissions allowed by underwriters to participating
dealers, will be set forth in the applicable Prospectus Supplement. Dealers and
agents participating in the distribution of Securities may be deemed to be
underwriters, and any discounts and commissions received by them and any profit
realized by them on resale of the Securities may be deemed to be underwriting
discounts and commissions. Underwriters, dealers and agents may be entitled,
under agreements entered into with the Company or the Trust, to indemnification
against and contribution toward certain civil liabilities.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K of the Company for the year ended
December 31, 1994, have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
29
<PAGE>
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR IN-
CORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PRO-
SPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY GREAT WESTERN FINANCIAL CORPORATION, GREAT WEST-
ERN FINANCIAL TRUST I OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PRO-
SPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF GREAT WESTERN FINANCIAL CORPORATION OR GREAT WESTERN
FINANCIAL TRUST I SINCE THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE
IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO
ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Risk Factors.............................................................. S-4
Recent Financial Results.................................................. S-8
Capitalization of GWFC.................................................... S-9
Accounting Treatment...................................................... S-9
Use of Proceeds........................................................... S-9
Description of the Offered Preferred Securities........................... S-9
Description of the Subordinated Notes..................................... S-22
Effect of Obligations Under the Subordinated Notes and the Guarantee...... S-28
Description of Depositary Shares.......................................... S-28
Description of Cumulative Preferred Stock................................. S-30
Certain Federal Income Tax Consequences................................... S-32
Underwriting.............................................................. S-35
Legal Matters............................................................. S-37
</TABLE>
PROSPECTUS
<TABLE>
<S> <C>
Available Information....................................................... 2
Incorporation of Certain Documents by Reference............................. 2
The Company................................................................. 4
The Trust................................................................... 5
Use of Proceeds............................................................. 5
Selected Financial Data..................................................... 6
Ratio of Earnings to Fixed Charges.......................................... 7
Description of Debt Securities.............................................. 7
Description of Preferred Stock.............................................. 14
Description of Depositary Shares............................................ 18
Description of Common Stock................................................. 21
Description of Preferred Securities......................................... 22
Description of Guarantee.................................................... 23
Description of Securities Warrants.......................................... 25
Plan of Distribution........................................................ 29
Experts..................................................................... 29
</TABLE>
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4,000,000
PREFERRED SECURITIES
GREAT WESTERN FINANCIAL TRUST I
8 1/4% TRUST ORIGINATED
PREFERRED SECURITIES ("TOPrS") (SM)
GUARANTEED TO THE EXTENT SET
FORTH HEREIN BY
GREAT WESTERN FINANCIAL CORPORATION
----------------------
PROSPECTUS SUPPLEMENT
----------------------
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
BEAR, STEARNS & CO. INC.
DEAN WITTER REYNOLDS INC.
SMITH BARNEY INC.
DECEMBER 6, 1995
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