<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 21, 1997
REGISTRATION NO. 333-19711
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
<TABLE>
<S> <C> <C>
GREAT WESTERN FINANCIAL
CORPORATION DELAWARE 95-1913457
GREAT WESTERN FINANCIAL TRUST II
GREAT WESTERN FINANCIAL TRUST III DELAWARE APPLIED FOR
(EXACT NAME OF REGISTRANT (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
AS SPECIFIED IN ITS CHARTER) INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
--------------
9200 OAKDALE AVENUE
CHATSWORTH, CALIFORNIA 91311
(818) 775-3411
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
--------------
J. LANCE ERIKSON, ESQ.
EXECUTIVE VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
GREAT WESTERN FINANCIAL CORPORATION
9200 OAKDALE AVENUE
CHATSWORTH, CALIFORNIA 91311
(818) 775-3411
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as determined
by market conditions.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED AGGREGATE OFFERING PRICE REGISTRATION FEE
- -------------------------------------------------------------------------------
<S> <C> <C>
Debt Securities.................... (1)(2) NA
- -------------------------------------------------------------------------------
Preferred Stock ($1.00 par value).. (1)(3) NA
- -------------------------------------------------------------------------------
Depositary Shares.................. (1)(3)(4) NA
- -------------------------------------------------------------------------------
Common Stock ($1.00 par value)..... (1)(5) NA
- -------------------------------------------------------------------------------
Preferred Securities of Great
Western Financial Trust II........ (1)(6) NA
- -------------------------------------------------------------------------------
Guarantee of Preferred Securities of
Great Western Financial Trust II.. (1)(7) NA
- -------------------------------------------------------------------------------
Preferred Securities of Great
Western Financial Trust III....... (1)(8) NA
- -------------------------------------------------------------------------------
Guarantee of Preferred Securities of
Great Western Financial
Trust III......................... (1)(9) NA
- -------------------------------------------------------------------------------
Securities Warrants................ (1)(10) NA
- -------------------------------------------------------------------------------
Total.............................. $650,330,000 $100(11)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
(footnotes on following page)
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
(footnotes from preceding page)
(1) In no event will the aggregate maximum offering price of all securities
issued pursuant to this Registration Statement exceed $650,330,000 (or
its equivalent in foreign currency) or, if any Debt Securities are issued
with original issue discount, such greater amount as shall result in an
aggregate offering price of $650,330,000 (or its equivalent in foreign
currency). Any securities registered hereunder may be sold separately or
as units with other securities registered hereunder.
(2) Subject to Footnote (1), there is being registered hereunder an
indeterminate principal amount of Debt Securities (which may be senior or
subordinated). Without limiting the generality of the forgoing,
Subordinated Debt Securities may be issued and sold to Great Western
Financial Trust II or Great Western Financial Trust III, in which event
such Subordinated Debt Securities may later be distributed to the holders
of Preferred Securities upon a dissolution of Great Western Financial
Trust II or Great Western Financial Trust III, as the case may be.
(3) Subject to Footnote (1), there is being registered hereunder an
indeterminate number of shares of Preferred Stock (par value $1.00 per
share) as may be sold, from time to time, by Great Western Financial
Corporation ("GWFC"). There is also being registered hereunder an
indeterminate number of shares of Preferred Stock and Depositary Shares
as shall be issuable upon conversion of Debt Securities registered
hereby.
(4) Subject to Footnote (1), there is being registered hereunder an
indeterminate number of Depositary Shares to be issued pursuant to one or
more Deposit Agreements. In the event GWFC elects to offer to the public
fractional interests in shares of the Preferred Stock registered
hereunder, Depositary Receipts will be distributed to those persons
purchasing such fractional interests, and the shares of Preferred Stock
will be issued to the Depositary under any such Deposit Agreement.
(5) Subject to Footnote (1), there is being registered hereunder an
indeterminate number of shares of Common Stock as may be sold, from time
to time, by GWFC (including Rights appurtenant thereto). There is also
being registered hereunder an indeterminate number of shares of Common
Stock (including Rights appurtenant thereto) as shall be issuable upon
conversion of the Preferred Stock or Debt Securities registered hereby.
(6) Subject to Footnote (1), there is being registered hereunder an
indeterminate number of Preferred Securities as may be sold, from time to
time, by Great Western Financial Trust II.
(7) Includes the rights of holders of the Preferred Securities of Great
Western Financial Trust II under its Guarantee and the obligations of
GWFC with respect to such Preferred Securities under the Amended and
Restated Declaration of Trust included herein as Exhibit 4.15 and the
Third Supplemental Indenture included herein as Exhibit 4.13. No separate
consideration will be received for such Guarantee. The obligations of
GWFC under the Debt Securities held by Great Western Financial Trust II,
the Third Supplemental Indenture (including certain back-up undertakings
comprised of obligations of GWFC for certain costs, expenses, debts and
liabilities of Great Western Financial Trust II), the Amended and
Restated Declaration of Trust and the Guarantee, when taken together,
will provide a full and unconditional guarantee, on a subordinated basis,
by GWFC of the Preferred Securities of Great Western Financial Trust II.
(8) Subject to Footnote (1), there is being registered hereunder an
indeterminate number of Preferred Securities as may be sold, from time to
time, by Great Western Financial Trust III.
(9) Includes the rights of holders of the Preferred Securities of Great
Western Financial Trust III under its Guarantee and the obligations of
GWFC with respect to such Preferred Securities under the Amended and
Restated Declaration of Trust to be included herein as Exhibit 4.18 and
the Fourth Supplemental Indenture to be included herein as Exhibit 4.21.
No separate consideration will be received for such Guarantee. The
obligations of GWFC under the Debt Securities held by Great Western
Financial Trust III, the Fourth Supplemental Indenture (including certain
back-up undertakings comprised of obligations of GWFC for certain costs,
expenses, debts and liabilities of Great Western Financial Trust III),
the Amended and Restated Declaration of Trust and the Guarantee, when
taken together, will provide a full and unconditional guarantee, on a
subordinated basis, by GWFC of the Preferred Securities of Great Western
Financial Trust III.
(10) Subject to Footnote (1), there is being registered hereunder an
indeterminate number of Senior Debt Securities Warrants, Subordinated
Debt Securities Warrants, Preferred Stock Warrants, Depositary Shares
Warrants and Common Stock Warrants representing rights to purchase Senior
Debt Securities, Subordinated Debt Securities, Preferred Stock,
Depositary Shares and Common Stock, respectively, registered pursuant to
this Registration Statement.
(11) Previously paid. Calculated pursuant to Rule 457(o) of the rules and
regulations under the Securities Act of 1933, as amended. Includes
$650,000,000 aggregate amount of Securities which were previously
registered under Great Western Financial Corporation's Registration
Statements on Form S-3 (Registration Nos. 33-60206 and 33-63057). The
registration statement fee specified in the table has been computed on
the basis of $330,000 aggregate amount of Securities registered hereby,
prior to including the previously registered and unsold Securities
referred to above.
THIS REGISTRATION STATEMENT INCLUDES $650,000,000 AGGREGATE AMOUNT OF
SECURITIES WHICH WERE PREVIOUSLY REGISTERED UNDER GREAT WESTERN FINANCIAL
CORPORATION'S REGISTRATION STATEMENTS ON FORM S-3 (33-60206 AND 33-63057) AND
REMAIN UNSOLD AS OF THE DATE HEREOF. AS PERMITTED BY RULE 429, THE PROSPECTUS
WITH RESPECT TO THIS REGISTRATION STATEMENT ALSO RELATES TO THE PREVIOUSLY
UNSOLD SECURITIES COVERED HEREBY. GREAT WESTERN FINANCIAL TRUST I WAS A
REGISTRANT UNDER REGISTRATION STATEMENT NO. 33-63057. NO ADDITIONAL SECURITIES
WILL BE SOLD BY GREAT WESTERN FINANCIAL TRUST I UNDER THAT REGISTRATION
STATEMENT.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JANUARY 21, 1997
PROSPECTUS
[LOGO of GREAT WESTERN FINANCIAL CORPORATION]
GREAT WESTERN FINANCIAL TRUST II
GREAT WESTERN FINANCIAL TRUST III
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 II and Great Western Financial Trust III (each
referred to herein individually as the "Trust") may offer 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 Company's obligations under the Guarantee, taken
together with its obligations under the Subordinated Debt Securities issued to
the Trust, the Subordinated Indenture (as defined) (including certain back-up
undertakings comprised of obligations of the Company for certain costs,
expenses, debts and liabilities of the Trust) and the Declaration (as defined),
will provide a full and unconditional guarantee on a subordinated basis by the
Company of payments due on the Preferred Securities issued by the Trust. 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 $650,330,000 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.
, 1997
<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, as amended (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 or may be
examined without charge at the offices of the Commission, or accessed through
the Commission's Internet address at http://www.sec.gov. 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) taken
together, the obligations of the Company under the Declaration, the Guarantee,
the Subordinated Indenture and the Subordinated Debt Securities (each as
defined herein) provide a full, irrevocable and unconditional guarantee of the
obligations of the Trust under the Trust Securities (as defined herein) on a
subordinated basis. 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, as amended, 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, 1995; (2) Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1996, June 30, 1996 and September 30, 1996;
(3) Current Report on Form 8-K, event date December 2, 1996 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 contained
2
<PAGE>
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 416 offices
located primarily in California and Florida. Real estate lending operations
are conducted directly by GWB or by direct subsidiaries through approximately
225 offices in 27 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 506 offices in 24 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, 1996, the Company had
consolidated total assets of approximately $43.5 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 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 (including, as applicable, any amendments
thereto, 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 January 10, 1997. 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
4
<PAGE>
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. At least one of the Trustees of the Trust will be
persons who are employees or officers of, or who are affiliated with, the
Company (the "Regular Trustees"). 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 and surplus 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
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 First Chicago Delaware Inc., 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 Trust 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,
-----------------------------------------------------------
1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE)
<S> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Interest income......... $ 3,238,711 $ 2,629,718 $ 2,680,784 $ 3,091,093 $ 3,718,796
Interest expense........ 1,936,582 1,307,448 1,297,930 1,668,731 2,453,540
----------- ----------- ----------- ----------- -----------
Net interest income..... 1,302,129 1,322,270 1,382,854 1,422,362 1,265,256
Provision for loan
losses................. 187,700 207,200 463,000 420,000 149,900
----------- ----------- ----------- ----------- -----------
Net interest income
after provision for
loan losses............ 1,114,429 1,115,070 919,854 1,002,362 1,115,356
Other income............ 327,668 367,897 327,855 282,131 257,582
Noninterest expense..... 1,019,975 1,076,433 1,155,662 1,188,981 867,508
----------- ----------- ----------- ----------- -----------
Earnings before taxes on
income................. 422,122 406,534 92,047 95,512 505,430
Federal and state taxes
on income.............. 161,100 155,300 30,000 41,600 207,300
Accounting changes...... -- -- -- 31,094 --
----------- ----------- ----------- ----------- -----------
Net earnings............ $ 261,022 $ 251,234 $ 62,047 $ 85,006 $ 298,130
=========== =========== =========== =========== ===========
SUMMARY OF FINANCIAL
CONDITION
Cash and securities..... $ 2,186,876 $ 2,065,660 $ 1,846,780 $ 1,660,485 $ 1,397,529
Loans receivable and
mortgage-backed
securities............. 39,690,790 37,647,975 33,850,799 33,752,661 35,115,730
Real estate............. 217,112 256,967 434,077 1,153,383 1,123,043
Other assets............ 2,491,986 2,247,655 2,216,704 1,872,657 1,963,326
----------- ----------- ----------- ----------- -----------
Total assets............ $44,586,764 $42,218,257 $38,348,360 $38,439,186 $39,599,628
=========== =========== =========== =========== ===========
Deposits................ $29,234,928 $28,700,947 $31,531,563 $30,908,665 $30,570,368
Borrowings and
debentures............. 11,345,634 10,120,660 3,479,341 4,151,052 5,592,453
Other liabilities....... 1,083,726 912,864 914,055 929,735 1,115,747
Company-obligated
mandatorily redeemable
preferred securities of
the Company's
subsidiary trust,
holding solely
$103,092,800 aggregate
principal amount of
8.25% subordinated
deferrable interest
notes, due 2025, of the
Company................ 100,000 -- -- -- --
Stockholders' equity.... 2,822,476 2,483,786 2,423,401 2,449,734 2,321,060
----------- ----------- ----------- ----------- -----------
Total liabilities and
equity................. $44,586,764 $42,218,257 $38,348,360 $38,439,186 $39,599,628
=========== =========== =========== =========== ===========
PER COMMON SHARE DATA
Fully diluted earnings . $ 1.71 $ 1.69 $ .28 $ .53 $ 2.24
Dividends............... .92 .92 .92 .91 .87
</TABLE>
6
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges and
the ratio of earnings to fixed charges and preferred stock dividends 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 deposits, 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 deposits, represent all
interest expense (including capitalized interest) and one-third of rents.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges:
Excluding interest on deposits..................... 1.56 2.05 1.23 1.26 1.96
Including interest on deposits..................... 1.21 1.30 1.07 1.05 1.20
Ratio of earnings to fixed charges and preferred
stock dividends:
Excluding interest on deposits..................... 1.48 1.85 1.13 1.17 1.92
Including interest on deposits..................... 1.19 1.27 1.04 1.04 1.19
</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 and a Second Supplemental Indenture, dated December 6, 1995 (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
7
<PAGE>
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 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.
8
<PAGE>
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 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.
9
<PAGE>
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, 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.
10
<PAGE>
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 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
11
<PAGE>
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 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, the foregoing 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.
12
<PAGE>
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.
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.
13
<PAGE>
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
14
<PAGE>
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.
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
15
<PAGE>
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.
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.
16
<PAGE>
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 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
17
<PAGE>
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.
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,
18
<PAGE>
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 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
19
<PAGE>
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 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 Receipts
20
<PAGE>
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
21
<PAGE>
Company is not the surviving corporation (other than a merger which follows an
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, 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 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 or semi-annual basis to
holders of the Preferred Securities as of a record date in each quarter or
semi-annual period, as the case may be, during which the Preferred Securities
are outstanding), (iii) the annual distribution rate (or method for
determining such rate) for the Preferred Securities, (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
22
<PAGE>
votes per Preferred Security and any requirement for the approval by the
holders of 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.
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill") was
released which would have, among other things, generally denied interest
deductions for interest on an instrument issued by a corporation that has a
maximum weighted average maturity of more than 40 years. The Bill would also
have generally denied interest deductions for interest on an instrument issued
by a corporation that has a maximum term of more than 20 years and that is not
shown as indebtedness on the separate balance sheet of the issuer or, where the
instrument is issued to a related party (other than a corporation), where the
holder or some other related party issues a related instrument that is not
shown as indebtedness on the issuer's consolidated balance sheet. For purposes
of determining the weighted average maturity or the term of an instrument, any
right to extend would be treated as exercised. The above-described provisions
of the Bill were proposed to be effective generally for instruments issued on
or after December 7, 1995. If either provision were to apply to the
Subordinated Debt Securities issued to the Trust, the Company would not be able
to deduct interest on such Subordinated Debt Securities. However, on March 29,
1996, the Chairmen of the Senate Finance and House Ways and Means Committees
issued a joint statement (the "Joint Statement") to the effect that it was
their intention that the effective date of the President's legislative
proposals, if adopted, would be no earlier than the date of appropriate
Congressional action. In addition, subsequent to the publication of the Joint
Statement, Senator Daniel Patrick Moynihan and Representatives Sam M. Gibbons
and Charles B. Rangel wrote letters to Treasury Department officials concurring
with the view expressed in the Joint Statement (the "Democrat Letters"). If the
principles contained in the Joint Statement and the Democrat Letters were
enacted, such legislation would not apply to Subordinated Debt Securities
issued to the Trust by the Company prior to the date of appropriate
Congressional action. Under current law in effect on the date of this
Prospectus, the Company will be able to deduct interest on the Subordinated
Debt Securities issued to the Trust. There can be no assurance, however, that
current or future legislative proposals or final legislation will not adversely
affect the ability of the Company to deduct interest on the Subordinated Debt
Securities issued to the Trust.
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
23
<PAGE>
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 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 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, irrevocable and unconditional guarantee on a subordinated
basis by the Company of payments due on the Preferred Securities.
The Company has also agreed to irrevocably 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.
24
<PAGE>
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.
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.
25
<PAGE>
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 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
26
<PAGE>
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.
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.
27
<PAGE>
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 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
28
<PAGE>
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.
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 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, 1995, 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>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPO-
RATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY AGENT, DEALER OR
UNDERWRITER. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUN-
DER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS
DOES 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 UN-
LAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
PROSPECTUS
<S> <C>
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
The Company................................................................ 4
The Trust.................................................................. 4
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>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$650,330,000
[LOGO of GREAT WESTERN FINANCIAL CORPORATION]
SECURITIES
----------------
PROSPECTUS
----------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Registration fee................................................... $ 100
Rating agency fees................................................. 75,000
Printing and engraving expenses.................................... 150,000
Accounting fees and expenses....................................... 100,000
Legal fees and expenses............................................ 200,000
Blue sky fees and expenses......................................... 30,000
Fees and expenses of Transfer Agent or Trustee..................... 30,000
Miscellaneous...................................................... 14,900
--------
Total............................................................ $600,000
========
</TABLE>
- --------
* Expenses are estimated except for the registration fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article TWELFTH of the Restated Certificate of Incorporation of the Company
eliminates, to the fullest extent permitted by Delaware law, director
liability for monetary damages for breaches of the directors' fiduciary duty
of care.
The Company's Bylaws as well as certain employment agreements and other
indemnity agreements also provide that the Company shall indemnify directors
and officers under certain circumstances for liabilities and expenses incurred
by reason of their actions as agents of the Company. In addition, the Company
maintains no insurance policy that indemnifies directors and officers against
certain liabilities.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
*1.1 Forms of Underwriting Agreement.
4.1 Restated Certificate of Incorporation of the Company (included as an
exhibit to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992 and incorporated herein by reference).
4.2 Rights Agreement, dated as of June 24, 1986 (filed as an exhibit to
the Company's Current Report on Form 8-K, dated July 3, 1986, and
incorporated herein by reference).
4.3 First Amendment to Rights Agreement, dated as of February 19, 1988
(filed as an exhibit to the Company's Current Report on Form 8-K,
dated February 24, 1988, and incorporated herein by reference).
4.4 Second Amendment to Rights Agreement, dated as of June 27, 1995 (filed
as an exhibit to the Company's Current Report on Form 8-K dated June
30, 1995 and incorporated herein by reference).
4.5 New Rights Agreement, dated as of June 27, 1995, between the Company
and First Chicago Trust Company of New York (filed as an exhibit to
the Company's Current Report on Form 8-K dated June 30, 1995 and
incorporated herein by reference).
4.6 Form of Deposit Agreement (filed as an exhibit to Registration
Statement No. 33-60206 and incorporated herein by reference).
</TABLE>
- --------
* To be filed by amendment or pursuant to a Form 8-K.
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
4.7 Form of Depositary Receipt (attached as Exhibit A to Deposit Agreement
included as Exhibit 4.6 hereto).
4.8 Indenture, dated as of September 12, 1990, between the Company and
First Interstate Bank, Ltd., relating to the Senior Debt Securities
(included as an exhibit to Registration Statement No. 33-34322 and
incorporated herein by reference).
4.9 First Supplemental Indenture, dated as of April 30, 1993, to Indenture
dated as of September 12, 1990, among the Company, First Interstate
Bank, Ltd. and Citibank, N.A. (filed as an exhibit to Registration
Statement No. 33-60206 and incorporated herein by reference).
4.10 Indenture, dated as of September 12, 1990, between the Company and
Harris Trust and Savings Bank, relating to the Subordinated Debt
Securities (included as an exhibit to Registration Statement
No. 33-34322 and incorporated herein by reference).
4.11 First Supplemental Indenture, dated as of April 30, 1993, to Indenture
dated as of September 12, 1990, between the Company and Harris Trust
and Savings Bank (filed as an exhibit to Registration Statement No.
33-60206 and incorporated herein by reference).
4.12 Second Supplemental Indenture, dated as of December 6, 1995, to
Indenture dated as of September 12, 1990, as amended, between the
Company and Harris Trust and Savings Bank (included as an exhibit to
the Company's Current Report on Form 8-K, dated December 14, 1995, and
incorporated herein by reference).
4.13 Form of Third Supplemental Indenture to Indenture, dated as of
September 12, 1990, as amended, between the Company and Harris Trust
and Savings Bank.
**4.14 Declaration of Trust of Great Western Financial Trust II.
4.15 Form of Amended and Restated Declaration of Trust of Great Western
Financial Trust II.
4.16 Form of Capital Security of Great Western Financial Trust II (attached
as Annex 1 to Exhibit A to the Form of Amended and Restated
Declaration of Trust included as Exhibit 4.15 hereto).
4.17 Form of Guarantee Agreement with respect to Capital Securities of
Great Western Financial Trust II.
*4.18 Form of Amended and Restated Declaration of Trust of Great Western
Financial Trust III.
*4.19 Form of Preferred Security of Great Western Financial Trust III
(attached as Annex I to Exhibit A to the Form of Amended and Restated
Declaration of Trust included as Exhibit 4.18 hereto).
*4.20 Form of Guarantee Agreement with respect to Preferred Securities of
Great Western Financial Trust III.
*4.21 Form of Fourth Supplemental Indenture to Indenture, dated as of
September 12, 1990, as amended, between the Company and Harris Trust
and Savings Bank.
**4.22 Declaration of Trust of Great Western Financial Trust III
**5.1 Opinion of O'Melveny & Myers LLP as to the validity of the Securities
other than the Preferred Securities and the Guarantee with respect to
the Preferred Securities of Great Western Financial Trust III.
**5.2 Opinion of Skadden, Arps, Slate, Meagher & Flom as to the validity of
the Preferred Securities of Great Western Financial Trust II.
*5.3 Opinion of O'Melveny & Myers LLP as to the validity of the Guarantee
with respect to the Preferred Securities of Great Western Financial
Trust III.
*5.4 Opinion of Skadden, Arps, Slate, Meagher & Flom as to the validity of
the Preferred Securities of Great Western Financial Trust III.
</TABLE>
- --------
*To be filed by amendment or pursuant to a Form 8-K.
**Previously filed.
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
**12 Computation of Ratio of Earnings to Fixed Charges (included as an
exhibit to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995 and is included in the Company's
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996,
June 30, 1996 and September 30, 1996 and incorporated herein by
reference).
23.1 Consent of Price Waterhouse LLP
**23.2 Consent of O'Melveny & Myers LLP (included in Exhibit 5.1).
**23.3 Consent of Skadden, Arps, Slate, Meagher & Flom (included in Exhibit
5.2).
*23.4 Consent of O'Melveny & Myers LLP (included in Exhibit 5.3).
*23.5 Consent of Skadden, Arps, Slate, Meagher & Flom (included in Exhibit
5.4).
**24 Power of Attorney.
*25.1 Form T-1 Statement of Eligibility of Citibank, N.A. with respect to
the Senior Indenture.
**25.2 Form T-1 Statement of Eligibility of Harris Trust and Savings Bank
with respect to the Subordinated Indenture.
**25.3 Form T-1 Statement of Eligibility of The First National Bank of
Chicago with respect to the Amended and Restated Declaration of Trust
of Great Western Financial Trust II.
**25.4 Form T-1 Statement of Eligibility of The First National Bank of
Chicago with respect to the Guarantee with respect to the Preferred
Securities of Great Western Financial Trust II.
*25.5 Form T-1 Statement of Eligibility of The First National Bank of
Chicago with respect to the Amended and Restated Declaration of Trust
of Great Western Financial Trust III.
*25.6 Form T-1 Statement of Eligibility of The First National Bank of
Chicago with respect to the Guarantee with respect to the Preferred
Securities of Great Western Financial Trust III.
99.1 Form of Prospectus Supplement for an offering of Preferred Securities.
</TABLE>
- --------
*To be filed by amendment or pursuant to a Form 8-K.
**Previously filed.
ITEM 17. UNDERTAKINGS.
Each of the undersigned Registrants hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to the Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement (notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) promulgated under the
Securities Act of 1933 if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table
in the effective Registration Statement);
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
II-3
<PAGE>
provided, however, that paragraph (1)(i) and (1)(ii) above shall not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the Registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference
in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof;
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Company's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the Registration Statement shall be deemed to
be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
each of the Registrants pursuant to the provisions described in Item 15 above,
or otherwise, each of the Registrants has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by a Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, each of the
Registrants will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.
Each of the undersigned Registrants hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
The Company hereby undertakes to file an application for the purpose of
determining the eligibility of the trustee under the Senior Indenture to act
under subsection (a) of Section 310 of the Trustee Indenture Act in accordance
with the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Trust Indenture Act.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Los Angeles, State of California, on
January 20, 1997.
Great Western Financial Corporation
/s/ Stephen F. Adams
By __________________________________
STEPHEN F. ADAMS
FIRST VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
President and Chief
John F. Maher* Executive Officer January 20, 1997
- ------------------------------------- (Principal
JOHN F. MAHER Executive Officer)
and Director
Vice Chairman and
Carl F. Geuther* Chief Financial January 20, 1997
- ------------------------------------- Officer (Principal
CARL F. GEUTHER Financial Officer)
Senior Vice
Barry R. Barkley* President and January 20, 1997
- ------------------------------------- Controller (Chief
BARRY R. BARKLEY Accounting Officer)
Chairman and
Director January , 1997
- -------------------------------------
JAMES F. MONTGOMERY
Director
January , 1997
- -------------------------------------
DR. DAVID ALEXANDER
Director
H. Frederick Christie* January 20, 1997
- -------------------------------------
H. FREDERICK CHRISTIE
II-5
<PAGE>
SIGNATURE TITLE DATE
Director
Stephen E. Frank* January 20, 1997
- -------------------------------------
STEPHEN E. FRANK
Director
John V. Giovenco* January 20, 1997
- -------------------------------------
JOHN V. GIOVENCO
Director
Firmin A. Gryp* January 20, 1997
- -------------------------------------
FIRMIN A. GRYP
Director
Enrique Hernandez, Jr.* January 20, 1997
- -------------------------------------
ENRIQUE HERNANDEZ, JR.
Director
January , 1997
- -------------------------------------
CHARLES D. MILLER
Director
January , 1997
- -------------------------------------
DR. ALBERTA E. SIEGEL
Director
Willis B. Wood, Jr.* January 20, 1997
- -------------------------------------
WILLIS B. WOOD, JR.
*By: /s/ Stephen F. Adams
___________________________
STEPHEN F. ADAMS
ATTORNEY-IN-FACT
Pursuant to the requirements of the Securities Act of 1933, Great Western
Financial Trust II certifies that it has reasonable grounds to believe that it
meets all the requirements for filing on Form S-3 and has duly caused this
Amendment No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Los Angeles, State of
California on the 20th day of January, 1997.
Great Western Financial Trust II
By: Carl F. Geuther*
_____________________________________
Carl F. Geuther, as Trustee
By: J. Lance Erikson*
_____________________________________
J. Lance Erikson, as Trustee
By: Bruce F. Antenberg*
_____________________________________
Bruce F. Antenberg, as Trustee
*By: /s/ Stephen F. Adams
____________________________
STEPHEN F. ADAMS
ATTORNEY-IN-FACT
II-6
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, Great Western
Financial Trust III certifies that it has reasonable grounds to believe that
it meets all the requirements for filing on Form S-3 and has duly caused this
Amendment No. 1 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Los Angeles, State of
California on the 20th day of January, 1997.
Great Western Financial Trust III
By: Carl F. Geuther*
_____________________________________
Carl F. Geuther, as Trustee
By: J. Lance Erikson*
_____________________________________
J. Lance Erikson, as Trustee
By: Bruce F. Antenberg*
_____________________________________
Bruce F. Antenberg, as Trustee
*By: /s/ Stephen F. Adams
____________________________
STEPHEN F. ADAMS
ATTORNEY-IN-FACT
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBIT PAGE
------- ---------------------- ------------
<C> <S> <C>
*1.1 Forms of Underwriting Agreement........................
4.1 Restated Certificate of Incorporation of the Company
(included as an exhibit to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31,
1992 and incorporated herein by reference).............
4.2 Rights Agreement, dated as of June 24, 1986 (filed as
an exhibit to the Company's Current Report on Form 8-K,
dated July 3, 1986, and incorporated herein by
reference).............................................
4.3 First Amendment to Rights Agreement, dated as of
February 19, 1988 (filed as an exhibit to the Company's
Current Report on Form 8-K, dated February 24, 1988,
and incorporated herein by reference)..................
4.4 Second Amendment to Rights Agreement, dated as of June
27, 1995 (filed as an exhibit to the Company's Current
Report on Form 8-K dated June 30, 1995 and incorporated
herein by reference)...................................
4.5 New Rights Agreement, dated as of June 27, 1995,
between the Company and First Chicago Trust Company of
New York (filed as an exhibit to the Company's Current
Report on Form 8-K dated June 30, 1995 and incorporated
herein by reference)...................................
4.6 Form of Deposit Agreement (filed as an exhibit to
Registration Statement No. 33-60206 and incorporated
herein by reference)...................................
4.7 Form of Depositary Receipt (attached as Exhibit A to
Deposit Agreement included as Exhibit 4.6 hereto)......
4.8 Indenture, dated as of September 12, 1990, between the
Company and First Interstate Bank, Ltd., relating to
the Senior Debt Securities (included as an exhibit to
Registration Statement No. 33-34322 and incorporated
herein by reference)...................................
4.9 First Supplemental Indenture, dated as of April 30,
1993, to Indenture dated as of September 12, 1990,
among the Company, First Interstate Bank, Ltd. and
Citibank, N.A. (filed as an exhibit to Registration
Statement No. 33-60206 and incorporated herein by
reference).............................................
4.10 Indenture, dated as of September 12, 1990, between the
Company and Harris Trust and Savings Bank, relating to
the Subordinated Debt Securities (included as an
exhibit to Registration Statement No. 33-34322 and
incorporated herein by reference)......................
4.11 First Supplemental Indenture, dated as of April 30,
1993, to Indenture dated as of September 12, 1990,
between the Company and Harris Trust and Savings Bank
(filed as an exhibit to Registration Statement No. 33-
60206 and incorporated herein by reference)............
4.12 Second Supplemental Indenture, dated as of December 6,
1995, to Indenture dated as of September 12, 1990, as
amended, between the Company and Harris Trust and
Savings Bank (included as an exhibit to the Company's
Current Report on Form 8-K, dated December 14, 1995,
and incorporated herein by reference)..................
4.13 Form of Third Supplemental Indenture to Indenture,
dated as of September 12, 1990, as amended, between the
Company and Harris Trust and Savings Bank..............
**4.14 Declaration of Trust of Great Western Financial Trust
II.....................................................
4.15 Form of Amended and Restated Declaration of Trust of
Great Western Financial Trust II.......................
</TABLE>
- --------
*To be filed by amendment or pursuant to a Form 8-K.
**Previously filed.
<PAGE>
EXHIBIT INDEX--(CONTINUED)
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBIT PAGE
------- ---------------------- ------------
<C> <S> <C>
4.16 Form of Capital Security of Great Western Financial
Trust II (attached as Annex 1 to Exhibit A to the Form
of Amended and Restated Declaration of Trust included
as Exhibit 4.15 hereto)................................
4.17 Form of Guarantee Agreement with respect to Capital
Securities of Great Western Financial Trust II.........
*4.18 Form of Amended and Restated Declaration of Trust of
Great Western Financial Trust III......................
*4.19 Form of Preferred Security of Great Western Financial
Trust III (attached as Annex I to Exhibit A to the Form
of Amended and Restated Declaration of Trust included
as Exhibit 4.18 hereto)................................
*4.20 Form of Guarantee Agreement with respect to Preferred
Securities of Great Western Financial Trust III........
*4.21 Form of Fourth Supplemental Indenture to Indenture,
dated as of September 12, 1990, as amended, between the
Company and Harris Trust and Savings Bank..............
**4.22 Declaration of Trust of Great Western Financial Trust
III....................................................
**5.1 Opinion of O'Melveny & Myers LLP as to the validity of
the Securities other than the Preferred Securities and
the Guarantee with respect to the Preferred Securities
of Great Western Financial Trust II....................
**5.2 Opinion of Skadden, Arps, Slate, Meagher & Flom as to
the validity of the Preferred Securities of Great
Western Financial Trust II.............................
*5.3 Opinion of O'Melveny & Myers LLP as to the validity of
the Guarantee with respect to the Preferred Securities
of Great Western Financial Trust III...................
*5.4 Opinion of Skadden, Arps, Slate, Meagher & Flom as to
the validity of the Preferred Securities of Great
Western Financial Trust III............................
**12 Computation of Ratio of Earnings to Fixed Charges
(included as an exhibit to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31,
1995 and is included in the Company's Quarterly Reports
on Form 10-Q for the quarters ended March 31, 1996,
June 30, 1996 and September 30, 1996 and incorporated
herein by reference)...................................
23.1 Consent of Price Waterhouse LLP........................
**23.2 Consent of O'Melveny & Myers LLP (included in Exhibit
5.1)...................................................
**23.3 Consent of Skadden, Arps, Slate, Meagher & Flom
(included in Exhibit 5.2)..............................
*23.4 Consent of O'Melveny & Myers LLP (included in Exhibit
5.3)...................................................
*23.5 Consent of Skadden, Arps, Slate, Meagher & Flom
(included in Exhibit 5.4)..............................
**24 Power of Attorney......................................
*25.1 Form T-1 Statement of Eligibility of Citibank, N.A.
with respect to the Senior Indenture...................
**25.2 Form T-1 Statement of Eligibility of Harris Trust and
Savings Bank with respect to the Subordinated
Indenture..............................................
**25.3 Form T-1 Statement of Eligibility of The First National
Bank of Chicago with respect to the Amended and
Restated Declaration of Trust of Great Western
Financial Trust II.....................................
</TABLE>
- --------
*To be filed by amendment or pursuant to a Form 8-K.
**Previously filed.
<PAGE>
EXHIBIT INDEX--(CONTINUED)
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBIT PAGE
------- ---------------------- ------------
<C> <S> <C>
**25.4 Form T-1 Statement of Eligibility of The First National
Bank of Chicago with respect to the Guarantee with
respect to the Preferred Securities of Great Western
Financial Trust II......................................
*25.5 Form T-1 Statement of Eligibility of The First National
Bank of Chicago with respect to the Amended and Restated
Declaration of Trust of Great Western Financial Trust
III.....................................................
*25.6 Form T-1 Statement of Eligibility of The First National
Bank of Chicago with respect to the Guarantee with
respect to the Preferred Securities of Great Western
Financial Trust III.....................................
99.1 Form of Prospectus Supplement for an offering of
Preferred Securities....................................
</TABLE>
- --------
*To be filed by amendment or pursuant to a Form 8-K.
**Previously filed.
<PAGE>
Exhibit 4.13
================================================================================
GREAT WESTERN FINANCIAL CORPORATION
TO
HARRIS TRUST AND SAVINGS BANK, as Trustee
------------------
THIRD SUPPLEMENTAL INDENTURE
dated as of January __, 1997
------------------
__% Subordinated Deferrable
Interest Notes Due 2027
================================================================================
<PAGE>
TABLE OF CONTENTS
ARTICLE I
Definitions . . . . . . . . . . . . . . 2
Section 1.1. Definition of Terms . . . . . . . . . . . . . . . . . . . . 2
-------------------
ARTICLE II
General Terms and Conditions of the Notes . . . . . . 5
Section 2.1. Designation and Principal Amount . . . . . . . . . . . . . 5
--------------------------------
Section 2.2. Maturity . . . . . . . . . . . . . . . . . . . . . . . . . 5
--------
Section 2.3. Form and Payment . . . . . . . . . . . . . . . . . . . . . 6
----------------
Section 2.4. Global Note . . . . . . . . . . . . . . . . . . . . . . . 6
-----------
Section 2.5. Interest . . . . . . . . . . . . . . . . . . . . . . . . . 8
--------
ARTICLE III
Redemption of the Notes . . . . . . . . . . . 9
Section 3.1. Tax Event Redemption . . . . . . . . . . . . . . . . . . . 9
--------------------
Section 3.2. Optional Redemption by Company . . . . . . . . . . . . . . 9
------------------------------
Section 3.3. Redemption Procedures . . . . . . . . . . . . . . . . . . 10
---------------------
Section 3.4. No Sinking Fund . . . . . . . . . . . . . . . . . . . . . 10
---------------
ARTICLE IV
Extension of Interest Payment Period . . . . . . . . 10
Section 4.1. Extension of Interest Payment Period . . . . . . . . . . . 10
------------------------------------
Section 4.2. Notice of Extension . . . . . . . . . . . . . . . . . . . 11
-------------------
ARTICLE V
Expenses . . . . . . . . . . . . . . 11
Section 5.1. Payment of Expenses . . . . . . . . . . . . . . . . . . . 11
-------------------
ARTICLE VI
Subordination . . . . . . . . . . . . . 12
Section 6.1. Agreement to Subordinate . . . . . . . . . . . . . . . . . 12
------------------------
i
<PAGE>
ARTICLE VII
Covenants . . . . . . . . . . . . . . . 12
Section 7.1. Limitation on Dividends; Transactions with Affiliates . . . 12
-----------------------------------------------------
Section 7.2. Covenants as to the Trust . . . . . . . . . . . . . . . . . 13
-------------------------
ARTICLE VIII
Events of Default . . . . . . . . . . . . 14
Section 8.1. Events of Default . . . . . . . . . . . . . . . . . . . . . 14
-----------------
Section 8.2. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . 14
-----------------------
ARTICLE IX
Form of Note . . . . . . . . . . . . . . 14
Section 9.1. Form of Note . . . . . . . . . . . . . . . . . . . . . . . 14
------------
ARTICLE X
Original Issue of Notes . . . . . . . . . . . 20
Section 10.1. Original Issue of Notes . . . . . . . . . . . . . . . . . . 20
-----------------------
ARTICLE XI
Miscellaneous . . . . . . . . . . . . . 21
Section 11.1. Ratification of Indenture . . . . . . . . . . . . . . . . . 21
-------------------------
Section 11.2. Trustee Not Responsible for Recitals . . . . . . . . . . . 21
------------------------------------
Section 11.3. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 21
-------------
Section 11.4. Separability . . . . . . . . . . . . . . . . . . . . . . . 21
------------
Section 11.5. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 21
------------
Section 11.6. Acknowledgement of Rights of Holders of Capital Securities 21
----------------------------------------------------------
Section 11.7. Supplemental Indentures . . . . . . . . . . . . . . . . . . 22
-----------------------
ii
<PAGE>
THIRD SUPPLEMENTAL INDENTURE, dated as of January __, 1997 (the "Third
Supplemental Indenture"), between Great Western Financial Corporation, a
Delaware corporation (the "Company"), Harris Trust and Savings Bank, as trustee
(the "Trustee") under the Indenture, dated as of September 12, 1990, as amended
and supplemented by the First Supplemental Indenture, dated as of April 30,
1993, and the Second Supplemental Indenture, dated as of December 6, 1995,
between the Company and the Trustee (the "Indenture").
WHEREAS, the Company executed and delivered the Indenture to the Trustee to
provide for the future issuance of the Company's unsecured and subordinated debt
securities to be issued from time to time in one or more series as might be
determined by the Company under the Indenture, in an unlimited aggregate
principal amount which may be authenticated and delivered as provided in the
Indenture;
WHEREAS, pursuant to the terms of the Indenture, the Company desires to
provide for the establishment of a new series of its Securities to be known as
its "__% Subordinated Deferrable Interest Notes due 2027" (the "Notes"), the
form and substance of such Notes and the terms, provisions and conditions
thereof to be set forth as provided in the Indenture and this Third Supplemental
Indenture;
WHEREAS, Great Western Financial Trust II, a Delaware statutory business
trust (the "Trust"), has offered to the public $165 million aggregate
liquidation amount of its __% Capital Securities, Series A (the "Capital
Securities"), representing undivided beneficial interests in the assets of the
Trust and proposes to invest the proceeds from such offering in $165 million
aggregate principal amount of the Notes; and
WHEREAS, the Company has requested that the Trustee execute and deliver
this Third Supplemental Indenture and all requirements necessary to make this
Third Supplemental Indenture a valid instrument in accordance with its terms and
to make the Notes, when executed by the Company and authenticated and delivered
by the Trustee, the valid obligations of the Company have been performed, and
the execution and delivery of this Third Supplemental Indenture has been duly
authorized in all respects;
NOW THEREFORE, in consideration of the purchase and acceptance of the Notes
by the Holders thereof, and for the purpose of setting forth, as provided in the
Indenture, the form and substance of the Notes and the terms, provisions and
conditions thereof, the Company covenants and agrees with the Trustee as
follows:
1
<PAGE>
ARTICLE I
Definitions
Section 1.1. Definition of Terms.
-------------------
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same meaning when used in this
Third Supplemental Indenture;
(b) a term defined anywhere in this Third Supplemental Indenture has the
same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) a reference to a Section or Article is to a Section or Article of this
Third Supplemental Indenture;
(e) headings are for convenience of reference only and do not affect
interpretation;
(f) for purposes of the Notes only, the following terms have the meanings
given to them in the Declaration notwithstanding a contrary definition
in the Indenture: (i) Business Day; (ii) Capital Securities
Guarantee; (iii) Common Security; (iv) Delaware Trustee; (v)
Depositary; (vi) Dissolution Tax Opinion; (vii) Ministerial Action;
(viii) No Recognition Opinion; (ix) Property Trustee; (x) Redemption
Tax Opinion; (xi) Regular Trustee; (xii) Special Event; (xiii) Trust
Securities; (xiv) Tax Event; (xv) Underwriting Agreement; and
(g) the following terms have the meanings given to them in this Section
1.1(g):
"Additional Interest" has the meaning given such term in Section 2.5(c).
"Adjusted Treasury Rate" means, with respect to any redemption date, the
Treasury Rate plus (i) ___% if such redemption date occurs on or before
__________, 1998, or (ii) ___% if such Redemption Date occurs after 1998.
"Calculation Date" means the third Business Day preceding a redemption
date.
"Capital Treatment Event" means that the Company (or its successor) is,
becomes or pursuant to law or regulation will become within 180 days, subject to
the capital requirements under which all or a portion of the Capital Securities
would not constitute Tier 1 Capital applied as if the Company (or its successor)
were a bank holding company (as that concept is used in the guidelines or
2
<PAGE>
regulations issued by the Board of Governors of the Federal Reserve System as of
__________, 1977 or its then equivalent).
"Comparable Treasury Issue" means, with respect to any redemption date, the
United States Treasury security selected by the Quotation Agent as having a
maturity comparable to the Remaining Life that would be utilized at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the Remaining
Life. If no United States Treasury security has a maturity which is within a
period from three months before to three months after __________, 2007, the two
most closely corresponding United States Treasury securities shall be used as
the Comparable Treasury Issue, and the Treasury Rate shall be interpolated or
extrapolated on a straight-line basis, rounding to the nearest month using such
securities.
"Comparable Treasury Price" means, with respect to any redemption date, (a)
the average of five Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (b) if the Trustee obtains fewer than five such Reference
Treasury Dealer Quotations, the average of all such quotations.
"Compounded Interest" has the meaning given such term in Section 4.1.
"Coupon Rate" has the meaning given such term in Section 2.5(a).
"Deferred Interest" means Additional Interest and Compounded Interest.
"Declaration" means the Amended and Restated Declaration of Trust of the
Trust dated January __, 1997.
"Dissolution Event" means that as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance with
the Declaration, and the Notes held by the Property Trustee are to be
distributed to the holders of the Trust Securities issued by the Trust pro rata
in accordance with the Declaration.
"Extended Interest Payment Period" has the meaning given such term in
Section 4.1.
"Global Note" has the meaning given such term in Section 2.4(a)(i).
"Make-Whole Amount" means, with respect to any redemption date, an amount
equal to the greater of (a) 100% of the principal amount of the Notes or (b) as
determined by the Quotation Agent,
3
<PAGE>
the sum of the present values of the principal amount and premium payable as
part of the Redemption Price with respect to the redemption of the Notes
following a Tax Event or Capital Treatment Event on __________, 2007, together
with the present values of the scheduled payments of interest for the Remaining
Life, in each case discounted to the redemption date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate.
"Maturity Date" means the date on which the Notes mature and on which the
principal shall be due and payable together with all accrued and unpaid interest
thereon, including Deferred Interest, if any.
"Non Book-Entry Capital Securities" has the meaning given such term in
Section 2.4(a)(ii).
"Primary Treasury Dealer" means a primary U.S. Government securities dealer
in The City of New York.
"Quotation Agent" means Goldman, Sachs & Co. and its successors; provided,
however, that if the foregoing shall cease to be a Primary Treasury Dealer, the
Company shall substitute therefore another Primary Treasury Dealer.
"Redemption Price" means, in the case of any redemption permitted hereunder
on or after __________, 2007, a price equal to the following prices, expressed
in percentages of the principal amount, plus any accrued and unpaid interest,
including any Compound Interest and Additional Interest, to the date fixed for
redemption. If redeemed during the 12-month period beginning __________:
<TABLE>
<CAPTION>
Year Redemption Price
---- ----------------
<S> <C>
2007 %
2008 %
2009 %
2010 %
2011 %
2012 %
2013 %
2014 %
2015 %
2016 %
</TABLE>
and at 100% on or after __________, 2017. Redemption Price means in the case of
a redemption permitted hereunder prior to __________, 2007 a price equal to the
Make-Whole Amount, plus any accrued interest, including any Compound Interest
and Additional Interest, to the date fixed for redemption.
4
<PAGE>
"Reference Treasurer Dealer" means (a) the Quotations Agent and (b) any
other Primary Treasury Dealer selected by the Trustee after consultation with
the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the Calculation Date.
"Remaining Life" means the period from the redemption date until
__________, 2007.
"Treasury Rate" means, with respect to any redemption date, (a) the yield
under the heading which represents the average for the week immediately prior to
the Calculation Date, appearing in the most recently published statistical
release designated "H.15(519)" or any successor publication which is published
weekly by the Board of Governors of the Federal Reserve System and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Remaining Life (if no maturity is within three
months before or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Remaining Life shall be determined
and the Treasury Rate shall be interpolated or extrapolated from such yields on
a straight-line basis, rounding to the nearest month) or (b) if such release (or
any successor release) is not published during the week preceding the
Calculation Date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price on
the Calculation Date for such redemption date.
ARTICLE II
General Terms and Conditions of the Notes
Section 2.1. Designation and Principal Amount.
--------------------------------
There is hereby authorized a series of Debt Securities designated the "__%
Subordinated Deferrable Interest Notes due __________, 2027", limited in
aggregate principal amount to $___________, which amount shall be as set forth
in any written Company Order for the authentication and delivery of Notes
pursuant to Section 303 of the Indenture.
Section 2.2. Maturity.
--------
The Maturity Date will be:
5
<PAGE>
(a) March 31, 2027; or
(b) if a Tax Event occurs which relates to the deductibility of interest
payable to the Company on the Notes, and if the Redemption Tax Opinion
states that the risk of non-deductibility would be avoided if the
maturity of the Notes were shortened, then such date as specified by
the Company by written notice to the Trustee within ___ days after
receipt of the Redemption Tax Opinion, but in no event may the Company
shorten the date of maturity of the Notes to a date less than 19-1/2
years after the date of initial issuance of the Notes.
Section 2.3. Form and Payment.
----------------
Except as provided in Section 2.4, the Notes shall be issued as Registered
Debt Securities in fully registered certificated form without interest coupons.
So long as the Holder of any Notes is the Property Trustee, the payment of the
principal of and interest, including Deferred Interest, if any, on such Notes
held by the Property Trustee will be made at such place and to such account as
may be designated by the Property Trustee.
Section 2.4. Global Note.
-----------
(a) In connection with a Dissolution Event:
(i) the Notes in certificated form may be presented to the Trustee by
the Property Trustee in exchange for one or more global Notes in
an aggregate principal amount equal to all Outstanding Notes (a
"Global Note") to be registered in the name of the Depositary, or
its nominee, and delivered by the Trustee to or for the account
of the Depositary for crediting to the accounts of its
participants pursuant to the instructions of the Regular
Trustees. The Company upon any such presentation shall execute a
Global Note in such aggregate principal amount and deliver the
same to the Trustee for authentication and delivery in accordance
with the Indenture and this Third Supplemental Indenture.
Payments on the Notes issued as a Global Note will be made to the
Depositary; and
(ii) if any Capital Securities are held in non book-entry certificated
form, the Notes in certificated form may be presented to the
Trustee by the Property Trustee and any Capital Security
Certificate which represents Capital Securities other than
Capital Securities held by the Depositary or its nominee ("Non
Book-Entry Capital Securities") will be deemed to represent
beneficial interests in Notes presented to the
6
<PAGE>
Trustee by the Property Trustee having an aggregate principal
amount equal to the aggregate liquidation amount of the Non Book-
Entry Capital Securities until such Capital Security Certificates
are presented to the Debt Securities Registrar for transfer or
reissuance at which time such Capital Security Certificates will
be cancelled and a Note registered in the name of the holder of
the Capital Security Certificate or the transferee of the holder
of such Capital Security Certificate, as the case may be, with an
aggregate principal amount equal to the aggregate liquidation
amount of the Capital Security Certificate cancelled will be
executed by the Company and delivered to the Trustee for
authentication and delivery in accordance with the Indenture and
this Third Supplemental Indenture. On issue of such Notes, Notes
with an equivalent aggregate principal amount that were presented
by the Property Trustee to the Trustee will be deemed to have
been cancelled.
(b) A Global Note may be transferred, in whole but not in part only to
another nominee of the Depositary, or to a successor Depositary
selected or approved by the Company or to a nominee of such successor
Depositary.
(c) If at any time the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary or if at any time the
Depositary for such series shall no longer be registered or in good
standing under the Securities Exchange Act of 1934, as amended, or
other applicable statute or regulation, and a successor Depositary for
such series is not appointed by the Company within 90 days after the
Company receives such notice or becomes aware of such condition, as
the case may be, the Company will execute, and, subject to the
Indenture, the Trustee will authenticate and deliver the Notes in
definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the
principal amount of the Global Note in exchange for such Global Note.
In addition, the Company may at any time determine that the Notes
shall no longer be represented by a Global Note. In such event, the
Company will execute and, subject to Article Two of the Indenture, the
Trustee will authenticate and deliver the Notes in definitive
registered form without coupons, in authorized denominations, and in
an aggregate principal amount equal to the principal amount of the
Global Note in exchange for such Global Note. Upon the exchange of
the Global Note for such Notes in definitive registered form without
coupons, in authorized denominations, the Global Note shall be
cancelled by the Trustee. Such Notes in definitive registered form
issued in exchange for the Global Note shall be registered in
7
<PAGE>
such names and in such authorized denominations as the Depositary,
pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee shall deliver such
Notes to the Depositary for delivery to the Persons in whose names
such Notes are so registered.
Section 2.5. Interest.
--------
(a) Each Note will bear interest at the rate of __% per annum (the "Coupon
Rate") from the original date of issuance until the principal thereof
becomes due and payable, and on any overdue principal and premium, if
any, and (to the extent that payment of such interest is enforceable
under applicable law) on any overdue installment of interest at the
Coupon Rate, compounded semi-annually, payable (subject to the
provisions of Article Four of this Third Supplemental Indenture) semi-
annually in arrears on __________ and __________ of each year (each,
an "Interest Payment Date", commencing on __________, 1997), to the
Person in whose name such Note or any predecessor Note is registered,
at the close of business on the regular record date for such interest
installment, which, in respect of any Notes of which the Property
Trustee is the Holder of or a Note, shall be the close of business on
the Business Day next preceding that Interest Payment Date.
Notwithstanding the foregoing sentence, if the Capital Securities are
no longer in book-entry only form or if pursuant to the Indenture the
Notes are not represented by a Global Note, the Company may select a
regular record date for such interest installment which shall be any
date at least one Business Day before an Interest Payment Date.
(b) The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. Except as provided
in the following sentence, the amount of interest payable for any
period shorter than a full semi-annual period for which interest is
computed, will be computed on the basis of the actual number of days
elapsed in such a 30-day month. In the event that any date on which
interest is payable on the 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,
notwithstanding the provisions of Section 113 of the Indenture, 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.
(c) If at any time while the Property Trustee is the Holder of any Notes,
the Trust or the Property Trustee is
8
<PAGE>
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 case, the
Company will pay as additional interest ("Additional Interest") on the
Notes held by the Property Trustee, such additional amounts as shall
be required so that the net amounts received and retained by the Trust
and the Property Trustee after paying such taxes, duties, assessments
or other governmental charges will be equal to the amounts the Trust
and the Property Trustee would have received had no such taxes,
duties, assessments or other governmental charges been imposed.
ARTICLE III
Redemption of the Notes
Section 3.1. Tax Event Redemption.
--------------------
If a Tax Event has occurred and is continuing and:
(a) the Company has received a Redemption Tax Opinion; or
(b) the Regular Trustees shall have been informed by independent tax
counsel experienced in such matters that a No Recognition Opinion
cannot be delivered to the Trust, then the Company shall have the
right upon not less than 30 days nor more than 60 days notice to the
Holders of the Notes to redeem the Notes in whole or in part for cash
at the Redemption Price within 90 days following the occurrence of
such Tax Event (the "90-Day Period"), provided that, if at the time
there is available to the Company the opportunity to eliminate, within
the 90-Day Period, the Tax Event by taking some Ministerial Action,
the Company shall pursue such Ministerial Action in lieu of
redemption, and provided, further, that the Company shall have no
right to redeem the Notes while the Trust is pursuing any Ministerial
Action pursuant to its obligations under the Declaration.
Section 3.2. Optional Redemption by Company.
------------------------------
Subject to the provisions of Section 3.3(b) and to the provisions of
Article Eleven of the Indenture, except as otherwise may be specified in this
Third Supplemental Indenture, the Company shall have the right to redeem the
Notes, without premium or penalty, in whole or in part, from time to time, on or
after __________, 2007, at the Redemption Price. In addition, at any time within
90 days after the occurrence and continuance of a Capital Treatment Event, the
Company shall have the right to redeem the Notes, in whole but not in part, at
the Redemption Price.
9
<PAGE>
Section 3.3. Redemption Procedures.
---------------------
Any redemption pursuant to this Article III will be made upon not less than
30 nor more than 60 days' notice to the Holder of the Notes at the Redemption
Price. If the Notes are only partially redeemed, the Notes will be redeemed pro
rata or by lot or by any other method utilized by the Trustee; provided that, if
at the time of redemption the Notes are registered as a Global Note, the
Depositary shall determine by lot the principal amount of such Notes held by
each Holder of Notes to be redeemed. The Redemption Price shall be paid prior to
12:00 noon, New York time, on the date of such redemption or at such earlier
time as the Company determines provided that the Company shall deposit with the
Trustee an amount sufficient to pay the Redemption Price by 10:00 a.m. on the
date such Redemption Price is to be paid.
Section 3.4. No Sinking Fund.
---------------
The Notes are not entitled to the benefit of any sinking fund.
ARTICLE IV
Extension of Interest Payment Period
Section 4.1. Extension of Interest Payment Period.
------------------------------------
The Company shall have the right, at any time during the term of the Notes,
from time to time, to defer payments of interest by extending the interest
payment period of such Notes for up to 10 consecutive semi-annual (the "Extended
Interest Payment Period"). To the extent permitted by applicable law, interest,
the payment of which has been deferred because of the extension of the interest
payment period pursuant to this Section 4.1, will bear interest thereon at the
Coupon Rate compounded semi-annually for each quarter of the Extended Interest
Payment Period ("Compounded Interest"). At the end of the Extended Interest
Payment Period the Company shall pay all interest accrued and unpaid on the
Notes, including any Deferred Interest that shall be payable, to the Holders of
the Notes in whose names the Notes are registered in the Security Register on
the first record date after the end of the Extended Interest Payment Period.
Before the termination of any Extended Interest Payment Period, the Company may
further extend such period, provided that such period together with all such
further extensions thereof shall not exceed 10 consecutive semi-annual periods.
Upon the termination of any Extended Interest Payment Period and upon the
payment of all Deferred Interest then due, the Company may commence a new
Extended Interest Payment Period as if no Extended Interest Payment Period had
previously been declared, subject to the foregoing requirements. No interest
shall be due and payable during an Extended Interest Payment Period, except at
the end thereof.
10
<PAGE>
[THIS PAGE LEFT INTENTIONALLY BLANK]
11
<PAGE>
Section 4.2. Notice of Extension.
-------------------
(a) If the Property Trustee is the only registered Holder of the Notes at
the time the Company selects an Extended Interest Payment Period, the
Company shall give written notice to the Regular Trustees, the
Property Trustee and the Trustee of its selection of such Extended
Interest Payment Period one Business Day before the earlier of (a) the
next succeeding date on which Distributions on the Trust Securities
issued by the Trust are payable, or (b) the date the Trust is required
to give notice of the record date or the date such Distributions are
payable to holders of the Capital Securities issued by the Trust, but
in any event at least one Business Day before such record date.
(b) If the Property Trustee is not the only Holder of the Notes at the
time the Company selects an Extended Interest Payment Period, the
Company shall give the Holders of the Notes and the Trustee written
notice of its selection of such Extended Interest Payment Period 10
Business Days before the earlier of (i) the next succeeding Interest
Payment Date, or (ii) the date the Company is required to give notice
of the record or payment date of such interest payment to Holders of
the Notes.
(c) The semi-annual period in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 4.2 shall be counted as one of
the 10 semi-annual periods permitted in the maximum Extended Interest
Payment Period permitted under Section 4.1.
ARTICLE V
Expenses
Section 5.1. Payment of Expenses.
-------------------
In connection with the offering, sale and issuance of the Notes to the
Property Trustee in connection with the sale of the Trust Securities by the
Trust, and in connection with the maintenance of the Trust for so long as the
Trust Securities are outstanding, the Company, in its capacity as borrower with
respect to the Notes, shall:
(a) pay all costs and expenses relating to the offering, sale and issuance
of the Notes, including commissions to the underwriters payable
pursuant to the Underwriting Agreement and compensation of the Trustee
under the Indenture in accordance with the provisions of Section 607
of the Indenture;
12
<PAGE>
(b) pay all debts and obligations of the Trust (other than with respect to
the Trust Securities) and all costs and expenses of the Trust
(including, but not limited to, costs and expenses relating to the
organization of the Trust, the offering, sale and issuance of the
Trust Securities (including commissions to the underwriters in
connection therewith), the fees and expenses of the Regular Trustees,
the Property Trustee and the Delaware Trustee, the costs and expenses
relating to the operation of the Trust, including without limitation,
costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses of printing and engraving and computing
or accounting equipment, paying agent(s), registrar(s), transfer
agent(s), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in
connection with the acquisition, financing, and disposition of Trust
assets);
(c) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs
and expenses with respect to such taxes of the Trust; and
(d) pay any and all fees and expenses related to the enforcement by the
Property Trustee of the rights of the holders of the Capital
Securities.
ARTICLE VI
Subordination
Section 6.1. Agreement to Subordinate.
------------------------
The Company covenants and agrees, and each Holder of Notes issued hereunder
by such Holder's acceptance thereof likewise covenants and agrees, that all
Notes shall be issued subject to the provisions of Article THIRTEEN of the
Indenture; and each Holder of a Note, whether upon original issue or upon
transfer or assignment thereof, accepts and agrees to be bound by such
provisions.
ARTICLE VII
Covenants
Section 7.1. Limitation on Dividends; Transactions with Affiliates.
-----------------------------------------------------
(a) If Notes are issued to the Trust or a trustee of the Trust and
(i) there shall have occurred any event that would constitute an Event of
Default or (ii) the Company shall be in default with respect of its payment
of any obligations under the Capital Securities Guarantee, 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
13
<PAGE>
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) 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
the Notes, provided that the foregoing restriction in clause (A) does not
apply to any stock dividends 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.
(b) If Notes are issued to the Trust or a trustee of the Trust and
the Company shall have given notice of its election to defer payments of
interest on the Notes by extending the interest payment period as provided
in Article IV hereof 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 distributions with respect to, or
redeem, purchase, 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 the Notes, provided that the foregoing restriction in clause (A)
does not apply to any stock dividends paid by the Company, or any of its
subsidiaries, where the dividend stock is the same as that on which the
dividend is being paid.
Section 7.2. Covenants as to the Trust.
-------------------------
For so long as such Trust Securities remain outstanding, the Company
will (i) maintain 100% direct or indirect ownership of the Common Securities of
the Trust; 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) use its reasonable efforts to cause the Trust (A) to remain a statutory
business trust, except in connection with a distribution of Notes as provided in
the Declaration, the redemption of all of the Trust Securities or certain
mergers, consolidations or amalgamations permitted by the Declaration, and (B)
otherwise continue to be treated as a grantor trust for United States federal
income tax purposes.
14
<PAGE>
ARTICLE VIII
Events of Default
Section 8.1. Events of Default.
-----------------
For the Notes only, a valid extension of the interest payment period in
accordance with Article IV hereof shall not constitute a Default or Event of
Default under Section 501(1) or (8) of the Indenture.
For the Notes only, the voluntary or involuntary dissolution, winding-up or
termination of the Trust, except in connection with the distribution of the
Notes to the holders of the Trust Securities in liquidation of the Trust, the
redemption of all the Trust Securities, or mergers, consolidations or
amalgamations, each as permitted by the Declaration, shall constitute an Event
of Default.
Section 8.2. Waiver of Past Defaults.
-----------------------
For the Notes only, any waiver pursuant to Section 513 of the Indenture or
any modification of such a waiver shall not be effective until the holders of a
majority in liquidation preference of Trust Securities shall have consented to
such waiver or modification to such waiver; provided, however, that if the
consent of the Holder of each Outstanding Debt Security is required, such waiver
shall not be effective until each holder of the Trust Securities shall have
consented to such waiver.
ARTICLE IX
Form of Note
Section 9.1. Form of Note.
------------
The Notes and the Trustee's Certificate of Authentication to be endorsed
thereon are to be substantially in the following forms:
(FORM OF FACE OF NOTE)
(IF THE NOTE IS TO BE A GLOBAL NOTE, INSERT - This Note is a Global Note
within the meaning of the Indenture hereinafter referred to and is registered in
the name of a Depositary or a nominee of a Depositary. This Note is
exchangeable for Global Notes registered in the name of a person other than the
Depositary or its nominee only in the limited circumstances described in the
Indenture, and no transfer of this Note (other than a transfer of this Note as a
whole 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) may be
registered except in limited circumstances. Every Note delivered upon
registration of transfer of, or in exchange for, or in lieu of, this Global
15
<PAGE>
Security shall be a Global Security, subject to the foregoing, except in the
limited circumstances described above.
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC") to the issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (or to such other entity as is
requested by an authorized representative of DTC) and any payment is made to
Cede & Co. (or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof,
Cede & Co., has an interest herein.)
No. __________________
$_____________
CUSIP No.__________________
__% SUBORDINATE DEFERRABLE INTEREST NOTE
DUE 2027
Great Western Financial Corporation, a Delaware corporation (the
"Company"), which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_______________, or registered assigns, the principal sum of ______________
Dollars on __________, 2027; provided that the Company may, subject to certain
conditions specified in the Indenture, shorten the maturity of this Note to a
date not earlier than _________, 2016. The Company further promises to pay
interest on said principal sum from January __, 1997, or from the most recent
interest payment date (each such date, an "Interest Payment Date") to which
interest has been paid or duly provided for, semi-annually (subject to deferral
as set forth herein) in arrears on __________ and __________ of each year
commencing __________, 1997, at the rate of __% per annum until the principal
hereof shall have become due and payable, and on any overdue principal and
premium, if any, and (without duplication and to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum compounded quarterly. The amount of
interest payable on any Interest Payment Date shall be computed on the basis of
a 360-day year of twelve 30-day months. In the event that any date on which
interest is payable on this Note is not a Business Day, then payment of interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
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. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided
16
<PAGE>
in the Indenture, be paid to the Person in whose name this Note (or one or more
Predecessor Notes, as defined in said Indenture) is registered at the close of
business on the regular record date for such interest installment, which shall
be the close of business on the Business Day next preceding such Interest
Payment Date. [IF PURSUANT TO THE PROVISIONS OF THE INDENTURE THE NOTES ARE NO
LONGER REPRESENTED BY A GLOBAL NOTE -- which shall be the close of business of
the ____ Business Day next preceding such Interest Payment Date.] Any such
interest installment not punctually paid or duly provided for shall forthwith
cease to be payable to the registered Holders on such regular record date and
may be paid to the Person in whose name this Note (or one or more Predecessor
Notes) is registered at the close of business on a special record date to be
fixed by the Trustee for the payment of such defaulted interest, notice whereof
shall be given to the registered Holders of this series of Notes not less than
10 days prior to such special record date, all as more fully provided in the
Indenture. The principal of (and premium, if any) and the interest on this Note
shall be payable at the office or agency of the Trustee maintained for that
purpose in any coin or currency of the United States of America that at the time
of payment is legal tender for payment of public and private debts; provided,
however, that payment of interest may be made at the option of the Company by
check mailed to the registered Holder at such address as shall appear in the
Security Register. Notwithstanding the foregoing, so long as the Holder of this
Note is the Property Trustee, the payment of the principal of (and premium, if
any) and interest on this Note will be made at such place and to such account as
may be designated by the Property Trustee.
The indebtedness evidenced by this Note is, to the extent provided in the
Indenture, subordinate and junior in right of payment to the prior payment in
full of all Senior Indebtedness, and this Note is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Note, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his or her behalf to take such action as
may be necessary or appropriate to acknowledge or effectuate the subordination
so provided and (c) appoints the Trustee his or her attorney-in-fact for any and
all such purposes. Each Holder hereof, by his or her acceptance hereof, hereby
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
said provisions.
This Note shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
Unless the Certificate of Authentication hereon has been executed by the
Trustee referred to on the reverse side hereof,
17
<PAGE>
this Note shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
The provisions of this Note are continued on the reverse side hereof and
such continued provisions shall for all purposes have the same effect as though
fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed.
Dated
-------------------
GREAT WESTERN FINANCIAL CORPORATION
By
--------------------------------
Attest:
By
----------------------------
Secretary
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series of Notes described in the within-
mentioned Indenture.
HARRIS TRUST AND SAVINGS BANK,
as Trustee
HARRIS TRUST AND SAVINGS BANK, ------------------------------
as Trustee or as Authentication Agent
By By
------------------------- ----------------------------
Authorized Signatory Authorized Signatory
(FORM OF REVERSE OF NOTE)
This Note is one of a duly authorized series of Notes of the Company
(herein sometimes referred to as the "Notes"), specified in the Indenture, all
issued or to be issued in one or more series
18
<PAGE>
under and pursuant to an Indenture dated as of September 12, 1990, as amended
and supplemented by a First Supplemental Indenture dated as of April 30, 1993, a
Second Supplemental Indenture dated as of December 6, 1995 and a Third
Supplemental Indenture dated as of January __, 1997, duly executed and delivered
between the Company and Harris Trust and Savings Bank, as Trustee (the
"Trustee") (the Indenture as so supplemented, the "Indenture"), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the Holders of the Notes.
By the terms of the Indenture, the Notes are issuable in series that may vary as
to amount, date of maturity, rate of interest and in other respects as provided
in the Indenture. This series of Notes is limited in aggregate principal amount
as specified in said Third Supplemental Indenture.
The Company shall have the right to redeem this Note at the option of the
Company, without premium or penalty, in whole or in part at any time on or after
__________, 2007 (a "Optional Redemption") or at any time in certain
circumstances upon the occurrence of a Tax Event, or in whole only within a
limited time after the occurrence and continuance of a Capital Treatment Event,
in each case at the redemption price specified in the Indenture plus any accrued
but unpaid interest, to the date of such redemption (the "Redemption Price").
Any redemption pursuant to this paragraph will be made upon not less than 30 nor
more than 60 days' notice to the Holder of the Notes at the Redemption Price. If
the Notes are only partially redeemed by the Company, the Notes will be redeemed
pro rata or by lot or by any other method utilized by the Trustee; provided that
if, at the time of redemption, the Notes are registered as a Global Note, the
Depositary shall determine by lot the principal amount of such Notes held by
each Holder of Notes to be redeemed.
In the event of a redemption of this Note in part only, a new Note for the
unredeemed portion thereof will be issued in the name of the Holder hereof upon
cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Notes may be declared,
and upon such declaration shall become, due and payable, in the manner, with the
effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Notes of each series affected at the time outstanding,
as defined in the Indenture, to execute supplemental indentures for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or of modifying in
any manner the rights of the Holders of the Notes; provided, however, that no
-------- -------
such supplemental indenture shall (i)
19
<PAGE>
extend the fixed maturity of any Notes of any series, or reduce the principal
amount thereof, or reduce the rate, or reduce any premium payable upon the
redemption thereof, without the consent of the Holder of each Note so affected,
or (ii) reduce the aforesaid percentage of Notes, the Holders of which are
required to consent to any such supplemental indenture, without the consent of
the Holders of each Note then outstanding and affected thereby. The Indenture
also contains provisions permitting the Holders of a majority in aggregate
principal amount of the Notes of any series at the time outstanding affected
thereby, on behalf of all of the Holders of the Notes of such series, to waive
any past default in the performance of any of the covenants contained in the
Indenture, or established pursuant to the Indenture with respect to such series,
and its consequences, except a default in the payment of the principal of or
premium, if any, or interest on any of the Notes of such series. Any such
consent or waiver by the registered Holder of this Note (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such Holder and
upon all future Holders and owners of this Note and of any Note issued in
exchange heretofore or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Note at the time and place and at the rate and in the money
herein prescribed.
The Company shall have the right at any time during the term of the Notes
from time to time to extend the interest payment period of such Notes to up to
10 consecutive semi-annual periods (an "Extended Interest Payment Period"), at
the end of which period the Company shall pay all interest then accrued and
unpaid (together with interest thereon at the rate specified for the Notes to
the extent that payment of such interest is enforceable under applicable law).
Before the termination of any such Extended Interest Payment Period, the Company
may further extend such Extended Interest Payment Period, provided that such
Extended Interest Payment Period together with all such further extensions
thereof shall not exceed 10 consecutive semi-annual periods. At the termination
of any such Extended Interest Payment Period and upon the payment of all accrued
and unpaid interest and any additional amounts then due, the Company may
commence a new Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations therein set
forth, this Note is transferable by the registered Holder hereof on the Security
Register of the Company, upon surrender of this Note for registration of
transfer at the office or agency of the Company in the City and State of New
York accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company or the Trustee duly executed by the registered
Holder hereof or his attorney duly authorized in
20
<PAGE>
writing, and thereupon one or more new Notes of authorized denominations and for
the same aggregate principal amount and series will be issued to the designated
transferee or transferees. No service charge will be made for any such
transfer, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Note, the
Company, the Trustee, any paying agent and any Security Registrar may deem and
treat the registered Holder hereof as the absolute owner hereof (whether or not
this Note shall be overdue and notwithstanding any notice of ownership or
writing hereon made by anyone other than the Security Registrar) for the purpose
of receiving payment of or on account of the principal hereof and premium, if
any, and interest due hereon and for all other purposes, and neither the Company
nor the Trustee nor any paying agent nor any Security Registrar shall be
affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Note, or for any claim based hereon, or otherwise in respect
hereof, or based on or in respect of the Indenture, against any incorporator,
stockholder, officer or director, past, present or future, as such, of the
Company or of any predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof and as
part of the consideration for the issuance hereof, expressly waived and
released.
The notes of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. This
Global Note is exchangeable for Notes in definitive form only under certain
limited circumstances set forth in the Indenture. Notes of this series so issued
are issuable only in registered form without coupons in denominations of $1,000
and any integral multiple thereof as provided in the Indenture and subject to
certain limitations herein and therein set forth. Notes of this series so issued
are exchangeable for a like aggregate principal amount of Notes of this series
of a different authorized denomination, as requested by the Holder surrendering
the same.
All terms used in this Note that are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
ARTICLE X
Original Issue of Notes
Section 10.1. Original Issue of Notes.
-----------------------
Notes in the aggregate principal amount of $___________ may, upon execution
of this Third Supplemental Indenture, be executed by the Company and delivered
to the Trustee for authentication, and
21
<PAGE>
the Trustee shall thereupon authenticate and deliver said Notes to or upon the
written order of the Company, signed by its Chairman of the Board, its
President, or one of its Vice Presidents and attested to by its Secretary or one
of its Assistant Secretaries, without any further action by the Company.
ARTICLE XI
Miscellaneous
Section 11.1. Ratification of Indenture.
-------------------------
The Indenture, as supplemented by this Third Supplemental Indenture, is in
all respects ratified and confirmed, and this Third Supplemental Indenture shall
be deemed part of the Indenture in the manner and to the extent herein and
therein provided.
Section 11.2. Trustee Not Responsible for Recitals.
------------------------------------
The recitals herein contained are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no representation as to the validity or sufficiency of this
Third Supplemental Indenture.
Section 11.3. Governing Law.
-------------
This Third Supplemental Indenture and each Note shall be deemed to be a
contract made under the internal laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of said State.
Section 11.4. Separability.
------------
In case any one or more of the provisions contained in this Third
Supplemental Indenture or in the Notes shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Third
Supplemental Indenture or of the Notes, but this Third Supplemental Indenture
and the Notes shall be construed as if such invalid or illegal or unenforceable
provision had never been contained herein or therein.
Section 11.5. Counterparts.
------------
This Third Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
Section 11.6. Acknowledgement of Rights of Holders of Capital Securities.
----------------------------------------------------------
The Company acknowledges that the holders of the Capital Securities are
each entitled to enforce and exercise the rights and
22
<PAGE>
remedies under the Indenture to the extent set forth in Section 5(b) of Exhibit
A to the Declaration.
Section 11.7. Supplemental Indentures.
-----------------------
For the Notes only, any supplemental indenture referred to in Section 902
of the Indenture shall not be effective until the holders of a majority in
liquidation preference of Trust Securities shall have consented to such
supplemental indenture; provided, however, that if the consent of the Holder of
each Outstanding Debt Security is required, such supplemental indenture shall
not be effective until each holder of the Trust Securities shall have consented
to such supplemental indenture.
23
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, on the date or dates indicated in the
acknowledgements and as of the day and year first above written.
GREAT WESTERN FINANCIAL CORPORATION
By:
--------------------------
Name:
Title:
Attest:
- -----------------------
Secretary
HARRIS TRUST AND SAVINGS BANK,
as Trustee
By:
--------------------------
Name:
Title:
Attest:
- -----------------------
Assistant Secretary
24
<PAGE>
EXHIBIT 4.15
================================================================================
AMENDED AND RESTATED DECLARATION OF TRUST
GREAT WESTERN FINANCIAL TRUST II
Dated as of January __, 1997
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
Interpretation and Definitions.................................... 2
Section 1.1 Definitions................................................................. 2
ARTICLE II
Trust Indenture Act............................................. 10
Section 2.1 Trust Indenture Act; Application............................................ 10
Section 2.2 Lists of Holders of Trust Securities........................................ 10
Section 2.3 Reports by the Property Trustee............................................. 11
Section 2.4 Periodic Reports to Property Trustee........................................ 11
Section 2.5 Evidence of Compliance with Conditions Precedent............................ 11
Section 2.6 Events of Default; Waiver................................................... 12
Section 2.7 Event of Default; Notice.................................................... 13
ARTICLE III
Organization................................................. 14
Section 3.1 Name........................................................................ 14
Section 3.2 Office...................................................................... 14
Section 3.3 Purpose..................................................................... 14
Section 3.4 Authority................................................................... 15
Section 3.5 Title to Property of the Trust.............................................. 15
Section 3.6 Powers and Duties of the Regular Trustees................................... 15
Section 3.7 Prohibition of Actions by the Trust and the Trustees........................ 18
Section 3.8 Powers and Duties of the Property Trustee................................... 19
Section 3.9 Certain Duties and Responsibilities of the Property Trustee................. 21
Section 3.10 Certain Rights of Property Trustee.......................................... 23
Section 3.11 Delaware Trustee............................................................ 26
Section 3.12 Execution of Documents...................................................... 26
Section 3.13 Not Responsible for Recitals or Issuance of Trust Securities................ 26
Section 3.14 Duration of Trust........................................................... 27
Section 3.15 Mergers..................................................................... 27
ARTICLE IV
Sponsor................................................... 29
Section 4.1 Sponsor's Purchase of Common Securities.............................................. 29
Section 4.2 Responsibilities of the Sponsor............................................. 29
ARTICLE V
Trustees................................................... 29
Section 5.1 Number of Trustees.......................................................... 29
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section 5.2 Delaware Trustee............................................................ 30
Section 5.3 Property Trustee; Eligibility............................................... 30
Section 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally........... 31
Section 5.5 Initial Trustees............................................................ 31
Section 5.6 Appointment, Removal and Resignation of Trustees............................ 32
Section 5.7 Vacancies Among Trustees.................................................... 33
Section 5.8 Effect of Vacancies......................................................... 34
Section 5.9 Meetings.................................................................... 34
Section 5.10 Delegation of Power......................................................... 34
Section 5.11 Merger, Conversion, Consolidation or Succession to Business................. 35
ARTICLE VI
Distributions................................................ 35
Section 6.1 Distributions............................................................... 35
ARTICLE VII
Issuance of Trust Securities......................................... 36
Section 7.1 General Provisions Regarding Trust Securities............................... 36
ARTICLE VIII
Termination................................................. 37
Section 8.1 Termination of Trust........................................................ 37
ARTICLE IX
Transfer of Interest............................................. 38
Section 9.1 Transfer of Trust Securities................................................ 38
Section 9.2 Transfer of Certificates.................................................... 38
Section 9.3 Deemed Trust Security Holders............................................... 39
Section 9.4 Book Entry Interests........................................................ 39
Section 9.5 Notices to Depositary....................................................... 40
Section 9.6 Appointment of Successor Depositary......................................... 40
Section 9.7 Definitive Capital Security Certificates ................................... 40
Section 9.8 Mutilated, Destroyed, Lost or Stolen Certificates........................... 41
ARTICLE X
Limitation of Liability of Holders
of Trust Securities, Trustees or Others................................... 42
Section 10.1 Liability................................................................... 42
Section 10.2 Exculpation................................................................. 42
Section 10.3 Fiduciary Duty.............................................................. 43
Section 10.4 Indemnification............................................................. 44
Section 10.5 Outside Businesses.......................................................... 45
ARTICLE XI
Accounting.................................................. 45
Section 11.1 Fiscal Year................................................................. 45
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section 11.2 Certain Accounting Matters.................................................. 45
Section 11.3 Banking..................................................................... 46
Section 11.4 Withholding................................................................. 46
ARTICLE XII
Amendments and Meetings ........................................... 47
Section 12.1 Amendments.................................................................. 47
Section 12.2 Meetings of the Holders of Trust
Securities; Action by Written Consent....................................... 49
ARTICLE XIII
Representations and Warranties of Property Trustee.............................. 51
Section 13.1 Representations and Warranties of
Property Trustee............................................................ 51
Section 13.2 Representations and Warranties of
Delaware Trustee............................................................ 52
ARTICLE XIV
Miscellaneous................................................ 52
Section 14.1 Notices..................................................................... 52
Section 14.2 Governing Law............................................................... 53
Section 14.3 Intention of the Parties.................................................... 54
Section 14.4 Headings.................................................................... 54
Section 14.5 Successors and Assigns...................................................... 54
Section 14.6 Partial Enforceability...................................................... 54
Section 14.7 Counterparts................................................................ 54
EXHIBIT A...........................................................................................A-1
ANNEX I ...........................................................................................I-1
ANNEX II ..........................................................................................II-1
</TABLE>
<PAGE>
AMENDED AND RESTATED DECLARATION OF TRUST
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of January __, 1997, by the undersigned trustees (together with all
other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the "Trustees"), Great
Western Financial Corporation, a Delaware corporation, as trust sponsor (the
"Sponsor"), and by the Holders, from time to time, of undivided beneficial
interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established Great Western
Financial Trust II (the "Trust"), a trust under the Delaware Business Trust Act
pursuant to a Declaration of Trust dated as of January 6, 1997, (the "Original
Declaration") and a Certificate of Trust filed with the Secretary of State of
Delaware on January 10, 1997, for the sole purpose of issuing and selling
certain securities representing undivided beneficial interests in the assets of
the Trust and investing the proceeds thereof in certain Notes of the Note Issuer
(as hereinafter defined);
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration;
and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration, including Exhibit A hereto which is expressly made a part
hereof, constitute the governing instrument of such business trust, the Trustees
declare that all assets contributed to the Trust will be held in trust for the
benefit of the Holders, from time to time, of the securities representing
undivided beneficial interests in the assets of the Trust issued hereunder,
subject to the provisions of this Declaration.
1
<PAGE>
ARTICLE I
Interpretation and Definitions
Section 1.1 Definitions.
-----------
(a) Capitalized terms used in this Declaration but not
defined in the preamble above have the respective
meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Declaration has the
same meaning throughout;
(c) all references to "the Declaration" or "this
Declaration" are to this Declaration as modified,
supplemented or amended from time to time;
(d) all references in this Declaration to Articles and
Sections and Exhibits are to Articles and Sections of
and Exhibits to this Declaration unless otherwise
specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise
defined in this Declaration or unless the context
otherwise requires; and
(f) a reference to the singular includes the plural and
vice versa.
"Adjusted Treasury Rate" means, with respect to any redemption date,
the Treasury Rate plus (a) __% if such redemption date occurs on or before
_______________, 1998, or (b) __% if such Redemption Date occurs after 1998.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Depositary as described in Section 9.4.
"Business Day" means any day other than a day on which banking
institutions in New York, New York or Los Angeles, California are authorized or
required by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code Section 3801 et seq., as it may be amended from time to time.
2
<PAGE>
"Calculation Date" means the third Business Day preceding any
redemption date.
"Capital Securities Guarantee" means the guarantee agreement to be
dated as of January __, 1997, of the Sponsor in respect of the Capital
Securities.
"Capital Security" has the meaning specified in Section 7.1.
"Capital Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Depositary, or on the books of a Person
maintaining an account with such Depositary (directly as a Depositary
Participant or as an indirect participant, in each case in accordance with the
rules of such Depositary).
"Capital Security Certificate" means a certificate representing a
Capital Security substantially in the form of Annex I to Exhibit A.
"Certificate" means a Common Security Certificate or a Capital Security
Certificate.
"Closing Date" means January __, 1997.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Security" has the meaning specified in Section 7.1.
"Common Securities Guarantee" means the guarantee agreement dated as of
January __, 1997, of the Sponsor in respect of the Common Securities.
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Annex II to Exhibit A.
"Comparable Treasury Issue" means, with respect to any redemption date,
the United States Treasury security selected by the Quotation Agent as having a
maturity comparable to the Remaining Life that would be utilized at the time of
selection and in accordance with customary financial practice in pricing new
issues of corporate debt securities of comparable maturity to the Remaining
Life. If no United States Treasury security has a
3
<PAGE>
maturity which is within a period from three months before to three months after
_____________, 2007, the two most closely corresponding United States Treasury
securities shall be used as the Comparable Treasury Issue, and the Treasury Rate
shall be interpolated or extrapolated on a straight-line basis, rounding to the
nearest month using such securities.
"Comparable Treasury Price" means, with respect to any redemption date
(a) the average of five Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (b) if the Note Trustee obtains fewer than five such Reference
Treasury Dealer Quotations, the average of all such quotations.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Trust Securities.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Definitive Capital Security Certificates" has the meaning set forth in
Section 9.4.
"Depositary" means an organization registered as a clearing agency
pursuant to Section 17A of the Exchange Act that is acting as depositary for the
Capital Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the Capital Securities.
"Depositary Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Depositary effects
book entry transfers and pledges of securities deposited with the Depositary.
"Direction" by a Person means a written direction signed:
(a) if the Person is a natural person, by that Person; or
(b) in any other case, in the name of such Person by one or
more Authorized Officers of that Person.
"Distribution" means a distribution payable to Holders of Trust
Securities in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Depositary.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
4
<PAGE>
"Event of Default" in respect of the Trust Securities means an Event of
Default (as defined in the Indenture) has occurred and is continuing in respect
of the Notes.
"Guarantees" means, collectively, the Common Securities Guarantee and
the Capital Securities Guarantee.
"Holder" means a Person in whose name a Certificate representing a
Trust Security is registered on the books and records of the Trust, such Person
being a beneficial owner within the meaning of the Business Trust Act, provided,
--------
that, in determining whether the holders of the requisite percentage of Capital
- ----
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Sponsor, as guarantor of the Trust Securities, or any
Affiliate of the Sponsor.
"Indemnified Person" means (a) any Trustee; (b) any Affiliate of any
Trustee; (c) any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee; or (d) any employee or
agent of the Trust or its Affiliates.
"Indenture" means the Indenture dated as of September 12, 1990 between
the Note Issuer and the Note Trustee as amended and supplemented by a First
Supplemental Indenture, dated as of April 30, 1993, the Second Supplemental
Indenture, dated as of December 6, 1995, and the Third Supplemental Indenture,
dated as of January __, 1997.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Exhibit A.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Trust Securities" means, except
as provided in the terms of the Capital Securities and the Trust Indenture Act,
Holder(s) of outstanding Trust Securities voting together as a single class or,
as the context may require, Holders of outstanding Capital Securities or Holders
of outstanding Common Securities voting separately as a class, who are the
record owners of more than 50% of the aggregate liquidation amount (including
the stated amount that would be paid on redemption, liquidation or otherwise,
plus accrued and unpaid Distributions to the date upon which the
5
<PAGE>
voting percentages are determined) of all outstanding Trust Securities of the
relevant class.
"Make-Whole Amount" means, with respect to any redemption date, an
amount equal to the greater of (a) 100% of the principal amount of the Notes or
(b) as determined by the Quotation Agent, the sum of the present values of the
principal amount and premium payable as part of the Redemption Price with
respect to the redemption of the Notes upon the occurrence of a Tax Event or
Capital Treatment Event on ___________, 2007, together with the present values
of the scheduled payments of interest for the Remaining Life, in each case,
discounted to the redemption date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30 day months) at the Adjusted Treasury Rate.
"Ministerial Action" has the meaning set forth in Exhibit A.
"Note Issuer" means the Sponsor in its capacity as issuer of the Notes.
"Note Trustee" means Harris Trust and Savings Bank, as trustee under
the Indenture until a successor is appointed thereunder, and thereafter means
such successor trustee.
"Notes" means the series of debt securities of the Note Issuer under
the Indenture to be held by the Property Trustee for the benefit of the Holders.
"Officers' Certificate" means, with respect to any Person,
a certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Certificate
has read the covenant or condition and the definition
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer
in rendering the Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's
opinion, is necessary to enable such officer to express
an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied
with.
"Paying Agent" has the meaning specified in Section 3.8(h).
6
<PAGE>
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Primary Treasury Dealer" means a primary U.S. Government securities
dealer in The City of New York.
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in Section 3.8(c).
"Quorum" means a majority of the Regular Trustees or, if there are only
two Regular Trustees, both of them.
"Quotation Agent" means Goldman, Sachs & Co. and its successors;
provided, however, that if the foregoing shall cease to be a Primary Treasury
Dealer, the Sponsor shall substitute therefore another Primary Treasury Dealer.
"Redemption Price" means, in the case of any redemption permitted
hereunder on or after ________, 2007, a price equal to the following prices,
expressed in percentages of the principal amount, plus any accrued and unpaid
interest, including any Compound Interest and Additional Interest, to the date
fixed for redemption. If redeemed during the 12-month period beginning
____________:
Year Redemption Price
2007 %
2008 %
2009 %
2010 %
2011 %
2012 %
2013 %
2014 %
2015 %
2016 %
and at 100% on or after ___________, 2017. Redemption Price means in the case of
a redemption permitted hereunder prior to __________, 2007, a price equal to the
Make-Whole Amount, plus any accrued interest, including any Compound Interest
and Additional Interest, to the date fixed for redemption.
7
<PAGE>
"Reference Treasurer Dealer" means (a) the Quotation Agent and (b) any
other Primary Treasury Dealer selected by the Note Trustee after consultation
with the Sponsor.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Note Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Note Trustee by such Reference Treasury Dealer at 5:00 p.m., New
York City time, on the Calculation Date.
"Regular Trustee" has the meaning set forth in Section 5.1.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Remaining Life" means the period from the redemption date until
__________, 2007
"Responsible Officer" means, with respect to the Property Trustee, any
vice-president, any assistant vice-president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer in the Corporate Trust Services
Division of the Property Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor legislation.
"66-2/3% in liquidation amount of the Trust Securities" means, except
as provided in the terms of the Capital Securities and by the Trust Indenture
Act, Holders of outstanding Trust Securities voting together as a single class
or, as the context may require, Holders of outstanding Capital Securities or
Holder(s) of outstanding Common Securities voting separately as a class,
representing at least 66-2/3% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions, to the date upon which the voting percentages
are determined) of all outstanding Trust Securities of the relevant class.
8
<PAGE>
"Special Event" has the meaning set forth in Exhibit A.
"Sponsor" means Great Western Financial Corporation, a Delaware
corporation, or any successor entity in a merger, consolidation or amalgamation,
in its capacity as sponsor of the Trust.
"Super-Majority" has the meaning set forth in Exhibit A.
"Tax Event" has the meaning set forth in Exhibit A.
"10% in liquidation amount of the Trust Securities" means, except as
provided in the terms of the Trust Securities or by the Trust Indenture Act,
Holders of outstanding Trust Securities voting together as a single class or, as
the context may require, Holders of outstanding Capital Securities or Holders of
outstanding Common Securities, voting separately as a class, representing at
least 10% of the aggregate liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Trust Securities of the relevant class.
"Treasury Rate" means, with respect to any redemption date, (a) the
yield under the heading which represents the average for the week immediately
prior to the Calculation Date, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication which is
published weekly by the Board of Governors of the Federal Reserve System and
which establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant Maturities,"
for the maturity corresponding to the Remaining Life (if no maturity is within
three months before or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Remaining Life shall be determined
and the Treasury Rate shall be interpolated or extrapolated from such yields on
a straight-line basis, rounding to the nearest month) or (b) if such release (or
any successor release) is not published during the week preceding the
Calculation Date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue, calculated using a
price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price on the Calculation Date
for such redemption date.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
9
<PAGE>
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
effect at the date as of which this instrument was executed, provided, however,
-------- -------
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Trust Securities" means collectively the Common Securities and the
Capital Securities.
"Underwriting Agreement" means the Underwriting Agreement for the
offering and sale of Capital Securities.
ARTICLE II
Trust Indenture Act
Section 2.1 Trust Indenture Act; Application.
--------------------------------
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration
and shall, to the extent applicable, be governed by such
provisions.
(b) The Property Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act,
such duties imposed by the Trust Indenture Act shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Trust Securities as equity
securities representing undivided beneficial interests in the
assets of the Trust.
Section 2.2 Lists of Holders of Trust Securities.
------------------------------------
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Property Trustee (i) within 14 days
after each record date for payment of Distributions, a list,
in such form as the Property
10
<PAGE>
Trustee may reasonably require, of the names and addresses of
the Holders of the Trust Securities ("List of Holders") as of
such record date, provided that none of the Sponsor or the
-------- ----
Regular Trustees on behalf of the Trust shall be obligated to
provide such list of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to
the Property Trustee by the Sponsor and the Regular Trustees
on behalf of the Trust, and (ii) at any other time, within 30
days of receipt by the Trust of a written request for a List
of Holders as of a date no more than 14 days before such List
of Holders is given to the Property Trustee. The Property
Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in Lists of Holders
given to it or which it receives in the capacity as Paying
Agent (if acting in such capacity) provided that the Property
-------- ----
Trustee may destroy any List of Holders previously given to it
on receipt of a new List of Holders.
(b) The Property Trustee shall comply with the obligations of an
indenture trustee under Sections 311(a), 311(b) and 312(b) of
the Trust Indenture Act.
Section 2.3 Reports by the Property Trustee.
-------------------------------
Within 60 days after May 15 of each year, the Property Trustee shall
provide to the Holders of the Capital Securities such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Property Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
Section 2.4 Periodic Reports to Property Trustee.
------------------------------------
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
required by Section 314 (if any) and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
Section 2.5 Evidence of Compliance with Conditions Precedent.
------------------------------------------------
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
11
<PAGE>
Section 2.6 Events of Default; Waiver.
-------------------------
(a) The Holders of a Majority in liquidation amount of Capital
Securities may, by vote, on behalf of the Holders of all of
the Capital Securities, waive any past Event of Default in
respect of the Capital Securities and its consequences,
provided that, if the underlying Event of Default under the
Indenture:
(i) is not waivable under the Indenture, the Event of
Default under the Declaration shall also not be
waivable; or
(ii) requires the consent or vote of all or a Super-
Majority of the holders of the Notes to be waived
under the Indenture, the Event of Default under the
Declaration may only be waived by the vote of all of
the Holders of the Capital Securities or such
proportion thereof in liquidation amount as
represents the relevant Super-Majority of the
aggregate principal amount of the Notes outstanding,
as applicable.
Upon such waiver, any such default shall cease to
exist, and any Event of Default with respect to the
Capital Securities arising therefrom shall be deemed to
have been cured, for every purpose of this Declaration,
but no such waiver shall extend to any subsequent or
other default or an Event of Default with respect to
the Capital Securities or impair any right consequent
thereon. Any waiver by the Holders of the Capital
Securities of an Event of Default with respect to the
Capital Securities shall also be deemed to constitute a
waiver by the Holders of the Common Securities of any
such Event of Default with respect to the Common
Securities for all purposes of this Declaration without
any further act, vote, or consent of the Holders of the
Common Securities.
(b) The Holders of a Majority in liquidation amount of the
Common Securities may, by vote, on behalf of the
Holders of all of the Common Securities, waive any past
Event of Default with respect to the Common Securities
and its consequences, provided that, if the underlying
-------- ----
Event of Default under the Indenture:
(i) which is not waivable under the Indenture, except
where the Holders of the Common Securities are
deemed to have waived such Event of Default under
the Declaration as provided below in this Section
2.6(b), the Event of Default under the Declaration
shall also not be waivable; or
12
<PAGE>
(ii) which requires the consent or vote of a Super-
Majority to be waived, except where the Holders of
the Common Securities are deemed to have waived
such Event of Default under the Declaration as
provided below in this Section 2.6(b), the Event
of Default under the Declaration may only be
waived by the vote of the Holders of at least the
proportion in liquidation amount of the Capital
Securities as represents the relevant Super-
Majority of the aggregate principal amount of
the Notes outstanding;
provided that, each Holder of Common Securities will be
-------- ----
deemed to have waived any such Event of Default and all
Events of Default with respect to the Common Securities
and its consequences until all Events of Default with
respect to the Capital Securities have been cured,
waived or otherwise eliminated, and until such Events
of Default 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 Capital
Securities and only the Holders of the Capital
Securities will have the right to direct the Property
Trustee in accordance with the terms of the Trust
Securities. Subject to the foregoing provisions of
this Section 2.6(b), upon such waiver, any such default
shall cease to exist and any Event of Default with
respect to the Common Securities arising therefrom
shall be deemed to have been cured for every purpose of
this Declaration but no such waiver shall extend to any
subsequent or other default or Event of Default with
respect to the Common Securities or impair any right
consequent thereon.
(c) A waiver of an Event of Default under the Indenture by
the Property Trustee at the direction of the Holders of
the Capital Securities, constitutes a waiver of the
corresponding Event of Default under this Declaration.
Section 2.7 Event of Default; Notice.
------------------------
(a) The Property Trustee shall, within 90 days after the
occurrence of a default, transmit by mail, first class
postage prepaid, to the Holders of the Trust
Securities, notices of all defaults with respect to the
Trust Securities known to the Property Trustee,
identifying such default as a Declaration Event of
Default, unless such defaults have been cured before
the giving of such notice (the term "default" for the
purposes of this Section 2.7(a) being hereby defined to
be an Event of Default as defined in the Indenture, not
including any periods of grace provided for therein and
irrespective of the giving of any notice provided
13
<PAGE>
therein); provided that, except for a default in the
-------- ----
payment of principal of (or premium, if any) or
interest on any of the Notes or in the payment of any
sinking fund installment established for the Notes, the
Property Trustee shall be protected in withholding such
notice if and so long as the board of directors, the
executive committee, or a trust committee of directors
and/or Responsible Officers of the Property Trustee in
good faith determines that the withholding of such
notice is in the interests of the Holders of the Trust
Securities.
(b) The Property Trustee shall not be deemed to have
knowledge of any default except:
(i) a default under Sections 501(1) and 501(2) of the
Indenture; or
(ii) any default as to which the Property Trustee shall
have received written notice or a Responsible Officer
charged with the administration of the Declaration
shall have obtained written notice.
ARTICLE III
Organization
Section 3.1 Name.
----
The Trust is named "Great Western Financial Trust II", as such name may
be modified from time to time by the Regular Trustees following written notice
to the Holders of Trust Securities. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the Regular
Trustees.
Section 3.2 Office.
------
The address of the principal office of the Trust is c/o Great Western
Financial Corporation, 9200 Oakdale Avenue, Chatsworth, California 91311. On ten
Business Days written notice to the Holders of Trust Securities, the Regular
Trustees may designate another principal office.
Section 3.3 Purpose.
-------
The exclusive purposes and functions of the Trust are (a) to issue and
sell Trust Securities and use the proceeds from such sale to acquire the Notes
and (b) except as otherwise limited herein, to engage in only those other
activities necessary, or incident thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, pledge any of its
assets, or otherwise undertake (or permit to be undertaken) any
14
<PAGE>
activity that would cause the Trust not to be classified for United States
federal income tax purposes as a grantor trust.
Section 3.4 Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Property Trustee in accordance with its powers shall constitute the act of and
serve to bind the Trust. In dealing with the Trustees acting on behalf of the
Trust, no Person shall be required to inquire into the authority of the Trustees
to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
Section 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Notes and the
Property Trustee Account or as otherwise provided in this Declaration, legal
title to all assets of the Trust shall be vested in the Trust. The Holders shall
not have legal title to any part of the assets of the Trust, but shall have an
undivided beneficial interest in the assets of the Trust.
Section 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and authority
to cause the Trust to engage in the following activities:
(a) to issue and sell the Capital Securities and the Common
Securities in accordance with this Declaration;
provided, however, that the Trust may issue no more
-------- -------
than one series of Capital Securities and no more than
one series of Common Securities, and, provided further,
-------- -------
that there shall be no interests in the Trust other
than the Trust Securities, and the issuance of Trust
Securities shall be limited to a one-time, simultaneous
issuance of both Capital Securities and Common
Securities on the Closing Date;
(b) in connection with the issue and sale of the Capital
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission the
Registration Statement on Form S-3 prepared by the
Sponsor, including any amendments thereto,
pertaining to the Capital Securities;
15
<PAGE>
(ii) execute and file any documents prepared by the
Sponsor, or take any acts as determined by the
Sponsor to be necessary in order to qualify or
register all or part of the Capital Securities in any
State in which the Sponsor has determined to qualify
or register such Capital Securities for sale; and
(iii) execute and enter into the Underwriting Agreement
providing for the sale of the Capital Securities;
(c) to acquire the Notes with the proceeds of the sale of the
Capital Securities and the Common Securities; provided,
--------
however, that the Regular Trustee shall cause legal title to
-------
the Notes to be held of record in the name of the Property
Trustee for the benefit of the Holders of the Capital
Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written
notice of the occurrence of a Special Event; provided that the
-------- ----
Regular Trustees shall consult with the Sponsor and the
Property Trustee before taking or refraining from taking any
Ministerial Action in relation to a Special Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established,
including and with respect to, for the purposes of Section
316(c) of the Trust Indenture Act, Distributions, voting
rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Capital; Securities and Holders of
Common Securities as to such actions and applicable record
dates;
(f) to take all actions and perform such duties as may be required
of the Regular Trustees pursuant to the terms of the Trust
Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands
of or against the Trust ("Legal Action"), unless pursuant to
Section 3.8(e), the Property Trustee has the power to bring
such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors,
advisors, and consultants and pay reasonable compensation for
such services;
16
<PAGE>
(i) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the
Trust Indenture Act to the Property Trustee, which certificate
may be executed by a Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry
out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Trust Securities;
(m) to give prompt written notice to the Holders of the Trust
Securities of any notice received from the Note Issuer of its
election to defer payments of interest on the Notes by
extending the interest payment period under the Indenture;
(n) to execute all documents or instruments, perform all duties
and powers, and do all things for and on behalf of the Trust
in all matters necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for
the preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory
business trust under the laws of the State of Delaware and of
each other jurisdiction in which such existence is necessary
to protect the limited liability of the Holders of the Trust
Securities or to enable the Trust to effect the purposes for
which the Trust was created;
(p) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in
their discretion to be necessary or desirable in carrying out
the activities of the Trust as set out in this Section 3.6,
including, but not limited to:
(i) causing the Trust not to be deemed to be an
Investment Company required to be registered under
the Investment Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Note Issuer to ensure that the
Notes will be treated as indebtedness of the Note
Issuer for United States federal income tax purposes,
17
<PAGE>
provided that such action does not adversely affect the
-------- ----
interests of Holders of the Capital Securities; and
(q) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be
filed with respect to the Trust to be duly prepared and filed
by the Regular Trustees, on behalf of the Trust.
The Regular Trustees must exercise the powers set forth in this Section
3.6 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Regular Trustees shall not take, or cause or
permit the Trust to take, any action that is inconsistent with the purposes and
functions of the Trust set forth in Section 3.3. Any expenses incurred by the
Regular Trustees pursuant to this Section 3.6 shall be reimbursed by the Note
Issuer.
Subject to this Section 3.6, the Regular Trustees shall have
none of the powers or the authority of the Property Trustee set
forth in Section 3.8.
Section 3.7 Prohibition of Actions by the Trust and the Trustees.
----------------------------------------------------
(a) The Trust shall not, and the Trustees (including the Property
Trustee) shall not, engage in any activity other than as
required or authorized by this Declaration. In particular, the
Trust shall not and the Trustees (including the Property
Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from
holding the Notes, but shall distribute all such
proceeds to Holders of Trust Securities pursuant to
the terms of this Declaration and of the Trust
Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust property for other than a Trust
purpose;
(iv) make any loans or incur any indebtedness other than
loans represented by the Notes;
(v) possess any power or otherwise act in such a way
as to vary the Trust assets or the terms of the
Trust Securities in any way whatsoever;
18
<PAGE>
(iv) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust
other than the Trust Securities; or
(v) other than as provided in this Declaration (including
Exhibit A hereto), (A) direct the time, method and
place of exercising any trust or power conferred upon
the Note Trustee with respect to the Notes, (B) waive
any past default that is waivable under Section 513
of the Indenture, (C) exercise any right to rescind
or annul any declaration that the principal of all
the Notes shall be due and payable or (D) consent to
any amendment, modification or termination of the
Indenture or the Notes where such consent shall be
required unless the Trust shall have received an
opinion of independent counsel experienced in such
matters to the effect that such action will not cause
more than an insubstantial risk that for United
States federal income tax purposes the Trust will not
be classified as a grantor trust.
Section 3.8 Powers and Duties of the Property Trustee.
-----------------------------------------
(a) The legal title to the Notes shall be owned by and held of
record in the name of the Property Trustee in trust for the
benefit of the Holders of the Trust Securities. The right,
title and interest of the Property Trustee to the Notes shall
vest automatically in each Person who may hereafter be
appointed as Property Trustee in accordance with Section 5.6.
Such vesting and cessation of title shall be effective whether
or not conveyancing documents with regard to the Notes have
been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Notes to the Regular Trustees or to the
Delaware Trustee (if the Property Trustee does not also act as
Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest
bearing trust account (the "Property Trustee
Account") in the name of and under the exclusive
control of the Property Trustee on behalf of the
Holders of the Trust Securities and, upon the receipt
of payments of funds made in respect of the Notes
held by the Property Trustee, deposit such funds into
the Property Trustee Account and make payments to the
Holders of the Capital Securities and Holders of the
Common Securities from the Property Trustee Account
in accordance
19
<PAGE>
with Section 6.1. Funds in the Property Trustee
Account shall be held uninvested until disbursed in
accordance with this Declaration. The Property
Trustee Account shall be an account that is
maintained with a banking institution the rating on
whose long term unsecured indebtedness is at least
equal to the then outstanding rating assigned to the
Capital Securities by a "nationally recognized
statistical rating organization", as that term is
defined for purposes of Rule 436(g)(2) under the
Securities Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of
the Capital Securities and the Common Securities to
the extent the Notes are redeemed or mature; and
(iii) upon written notice of distribution issued by the
Regular Trustees in accordance with the terms of the
Trust Securities, engage in such ministerial
activities as shall be necessary or appropriate to
effect the distribution of the Notes to Holders of
Trust Securities in accordance with such Holders'
interests therein upon the occurrence of certain
Special Events.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the
Property Trustee pursuant to the terms of the Trust
Securities.
(e) The Property Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default
or the Property Trustee's duties and obligations under
this Declaration or the Trust Indenture Act.
(f) The Property Trustee shall not resign as a Trustee
unless either:
(i) the Trust has been completely liquidated and the
proceeds of the liquidation distributed to the
Holders of Trust Securities pursuant to the terms
of the Trust Securities; or
(ii) a Successor Property Trustee has been appointed and
has accepted that appointment in accordance with
Section 5.6.
(g) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a
holder of Notes under the Indenture and, if an Event of
20
<PAGE>
Default occurs and is continuing, the Property Trustee shall,
for the benefit of Holders of the Trust Securities, enforce
its rights as holder of the Notes subject to the rights of the
Holders pursuant to the terms of such Trust Securities.
(h) The Property Trustee may authorize one or more Persons
(each, a "Paying Agent") to pay Distributions,
redemption payments or liquidation payments on behalf
of the Trust with respect to all Trust Securities and
any such Paying Agent shall comply with Section 317(b)
of the Trust Indenture Act. Any Paying Agent may be
removed by the Property Trustee at any time and a
successor Paying Agent or additional Paying Agents may
be appointed at any time by the Property Trustee.
(i) Subject to this Section 3.8, the Property Trustee shall
have none of the duties, liabilities, powers or the
authority of the Regular Trustees set forth in Section
3.6.
The Property Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set out
in Sections 3.3 and 3.7.
Section 3.9 Certain Duties and Responsibilities of the Property
---------------------------------------------------
Trustee.
-------
(a) The Property Trustee, before the occurrence of any
Event of Default and after the curing of all Events of
Default that may have occurred, shall undertake to
perform only such duties as are specifically set forth
in this Declaration and no implied covenants shall be
read into this Declaration against the Property
Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section
2.6), the Property Trustee shall exercise such of the
rights and powers vested in it by this Declaration, and
use the same degree of care and skill in their
exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her
own affairs.
(b) No provision of this Declaration shall be construed to
relieve the Property Trustee from liability for its own
negligent action, its own negligent failure to act, or
its own willful misconduct, except that:
21
<PAGE>
(i) prior to the occurrence of an Event of Default and
after the curing or waiving of all such Events of
Default that may have occurred:
(A) the duties and obligations of the Property
Trustee shall be determined solely by the
express provisions of this Declaration and
the Property Trustee shall not be liable
except for the performance of such duties
and obligations as are specifically set
forth in this Declaration, and no implied
covenants or obligations shall be read into
this Declaration against the Property
Trustee; and
(B) in the absence of bad faith on the part of
the Property Trustee, the Property Trustee
may conclusively rely, as to the truth of
the statements and the correctness of the
opinions expressed therein, upon any
certificates or opinions furnished to the
Property Trustee and conforming to the
requirements of this Declaration; but in the
case of any such certificates or opinions
that by any provision hereof are
specifically required to be furnished to the
Property Trustee, the Property Trustee shall
be under a duty to examine the same to
determine whether or not they conform to the
requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any
error of judgment made in good faith by a Responsible
Officer of the Property Trustee, unless it shall be
proved that the Property Trustee was negligent in
ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the
Holders of not less than a Majority in liquidation
amount of the Trust Securities at the time
outstanding relating to the time, method and place of
conducting any proceeding for any remedy available to
the Property Trustee, or exercising any trust or
power conferred upon the Property Trustee under this
Declaration;
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the
performance of any of its duties or in the
22
<PAGE>
exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that the
repayment of such funds or liability is not
reasonably assured to it under the terms of this
Declaration or adequate indemnity against such risk
or liability is not reasonably assured to it;
(v) the Property Trustee's sole duty with respect
to the custody, safekeeping and physical
preservation of the Notes and the Property Trustee
Account shall be to deal with such property in a
similar manner as the Property Trustee deals with
similar property for its own account, subject to
the protections and limitations on liability
afforded to the Property Trustee under this
Declaration and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability
for or with respect to the value, genuineness,
existence or sufficiency of the Notes or the payment
of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Property Trustee shall not be liable for any
interest on any money received by it except as it may
otherwise agree with the Sponsor. Money held by the
Property Trustee need not be segregated from other
funds held by it except in relation to the Property
Trustee Account maintained by the Property Trustee
pursuant to Section 3.8(c)(i) and except to the
extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or
the Sponsor with their respective duties under this
Declaration, nor shall the Property Trustee be liable
for the default or misconduct of the Regular Trustees
or the Sponsor.
Section 3.10 Certain Rights of Property Trustee.
----------------------------------
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may rely and shall be fully
protected in acting or refraining from acting upon
any resolution, certificate, statement,
instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or
document believed by it to be genuine and to have
been signed, sent or presented by the proper party
or parties;
23
<PAGE>
(ii) any direction or act of the Sponsor or the Regular
Trustees contemplated by this Declaration shall be
sufficiently evidenced by a Direction or an Officers'
Certificate;
(iii) whenever in the administration of this Declaration,
the Property Trustee shall deem it desirable that a
matter be proved or established before taking,
suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad
faith on its part request and rely upon an Officers'
Certificate which, upon receipt of such request,
shall be promptly delivered by the Sponsor or the
Regular Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument
(including any financing or continuation statement or
any filing under tax or securities laws) (or any
rerecording, refiling or registration thereof);
(v) the Property Trustee may consult with counsel or
other experts and the advice or opinion of such
counsel and experts with respect to legal matters
or advice within the scope of such experts' area
of expertise shall be full and complete
authorization and protection in respect of any
action taken, suffered or omitted by it hereunder
in good faith and in accordance with such advice
or opinion. Except as otherwise specified herein,
such counsel may be counsel to the Sponsor or any
of its Affiliates, and may include any of its
employees. The Property Trustee shall have the
right at any time to seek instructions concerning
the administration of this Declaration from any
court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by
this Declaration at the request or direction of any
Holder, unless such Holder shall have provided to the
Property Trustee adequate security and indemnity,
which would satisfy a reasonable person in the
position of the Property Trustee, against the costs,
expenses (including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying
with such request or direction, including such
reasonable advances as may be requested by the
Property Trustee provided, that, nothing contained in
this Section 3.10(a)(vi) shall be taken to relieve
the Property
24
<PAGE>
Trustee, upon the occurrence of an Event of Default,
of its obligation to exercise the rights and powers
vested in it by this Declaration;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the
Property Trustee, in its discretion, may make such
further inquiry or investigation into such facts or
matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder
either directly or by or through agents or attorneys
and the Property Trustee shall not be responsible for
any misconduct or negligence on the part of any agent
or attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its
agents hereunder shall bind the Trust and the Holders
of the Trust Securities, and the signature of the
Property Trustee or its agents alone shall be
sufficient and effective to perform any such action
and no third party shall be required to inquire as to
the authority of the Property Trustee to so act or as
to its compliance with any of the terms and
provisions of this Declaration, both of which shall
be conclusively evidenced by the Property Trustee's
or its agent's taking such action;
(x) whenever in the administration of this Declaration
the Property Trustee shall deem it desirable to
receive instructions with respect to enforcing any
remedy or right or taking any other action
hereunder the Property Trustee (i) may request
instructions from the Holders of the Trust
Securities which instructions may only be given by
the Holders of the same proportion in liquidation
amount of the Trust Securities as would be
entitled to direct the Property Trustee under the
terms of the Trust Securities in respect of such
remedy, right or action, (ii) may refrain from
enforcing such remedy or right or taking such
other action until such instructions are received,
and (iii) shall be protected in acting in
accordance with such instructions; and
25
<PAGE>
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under
any obligation to take any action that is
discretionary under the provisions of this
Declaration.
(b) No provision of this Declaration shall be deemed to
impose any duty or obligation on the Property Trustee
to perform any act or acts or exercise any right,
power, duty or obligation conferred or imposed on it,
in any jurisdiction in which it shall be illegal, or in
which the Property Trustee shall be unqualified or
incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such
right, power, duty or obligation. No permissive power
or, authority available to the Property Trustee shall
be construed to be a duty.
Section 3.11 Delaware Trustee.
----------------
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees or the Property Trustee described in this Declaration.
Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Business Trust Act.
Section 3.12 Execution of Documents.
----------------------
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, any Regular Trustee is authorized
to execute on behalf of the Trust any documents which the Regular Trustees have
the power and authority to execute pursuant to Section 3.6; provided that, the
registration statement referred to in Section 3.6(b)(i), including any
amendments thereto, shall be executed by a majority of the Regular Trustees. A
Regular Trustee may, by power of attorney consistent with applicable law,
delegate to any other natural person over the age of 21 his or her power for the
purposes of signing any documents which the Regular Trustees have power and
authority to cause the Trust to execute pursuant to Section 3.6.
Section 3.13 Not Responsible for Recitals or Issuance of Trust
-------------------------------------------------
Securities.
----------
The recitals contained in this Declaration and the Trust Securities
shall be taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part
26
<PAGE>
thereof. The Trustees make no representations as to the validity or sufficiency
of this Declaration or the Trust Securities.
Section 3.14 Duration of Trust.
-----------------
The Trust, unless terminated pursuant to the provisions of
Article VIII hereof, shall have existence for 55 years from the Closing Date.
Section 3.15 Mergers.
-------
(a) 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 in Section 3.15(b) and (c).
(b) The Trust may, with the consent of a majority of the Regular
Trustees or, if there are only two, both of the Regular
Trustees, and without the consent of the Holders of the Trust
Securities, the Delaware Trustee or the Property Trustee,
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 (the "Successor Entity")
either:
(A) expressly assumes all of the obligations of
the Trust under the Trust Securities; or
(B) 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
Capital Securities rank with respect to
Distributions and payments upon liquidation,
redemption and maturity;
(ii) the Note Issuer expressly acknowledges a trustee of
the Successor Entity that possesses the same powers
and duties as the Property Trustee as the holder of
the Notes;
(iii) such merger, consolidation, amalgamation or
replacement does not cause the Capital Securities
(including any Successor Securities) to be downgraded
by any nationally recognized statistical rating
organization;
27
<PAGE>
(iv) 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);
(v) such successor entity has a purpose identical to
that of the Trust;
(vi) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor 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 the Successor Entity will be
required to register as an Investment
Company; and
(vii) the Sponsor guarantees the obligations of such
Successor Entity under the Successor Securities
at least to the extent provided by the Guarantees.
(c) Notwithstanding Section 3.15(b), 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 the Successor Entity for
United States federal income tax purposes not to be classified
as a grantor trust.
28
<PAGE>
ARTICLE IV
Sponsor
Section 4.1 Sponsor's Purchase of Common Securities.
---------------------------------------
On the Closing Date the Sponsor will purchase all the Common
Securities issued by the Trust, in an amount at least equal to 3% of the capital
of the Trust, at the same time as the Capital Securities are sold.
Section 4.2 Responsibilities of the Sponsor.
-------------------------------
In connection with the issue and sale of the Capital Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust with the Commission a
Registration Statement on Form S-3 in relation to the Capital
Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Capital
Securities and to do any and all such acts, other than actions
which must be taken by the Trust, and advise the Trust of
actions it must take, and prepare for execution and filing any
documents to be executed and filed by the Trust, as the
Sponsor deems necessary or advisable in order to comply with
the applicable laws of any such States;
(c) to negotiate the terms of the Underwriting Agreement providing
for the sale of the Capital Securities.
ARTICLE V
Trustees
Section 5.1 Number of Trustees.
------------------
The number of Trustees shall initially be five (5), and:
(a) at any time before the issuance of any Trust Securities, the
Sponsor may, by written instrument, increase or decrease the
number of Trustees; and
(b) after the issuance of any Trust Securities the number of
Trustees may be increased or decreased by vote of the Holders
of a Majority in liquidation amount of the Common Securities
voting as a class at a meeting of the Holders of the Common
Securities; provided, however, that the number of Trustees
-------- -------
shall in no event be less
29
<PAGE>
than three (3); provided further that (i) one Trustee, in the
-------- -------
case of a natural person, shall be a person who is a resident
of the State of Delaware or that, if not a natural person, is
an entity which has its principal place of business in the
State of Delaware (the "Delaware Trustee"); (ii) there shall
be at least one Trustee who is an employee or officer of, or
is affiliated with, the Sponsor (a "Regular Trustee") and all
Trustees other than the Delaware Trustee and the Property
Trustee shall be Regular Trustees; and (iii) one Trustee shall
be the Property Trustee for so long as this Declaration is
required to qualify as an indenture under the Trust Indenture
Act, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements.
Section 5.2 Delaware Trustee.
----------------
If required by the Business Trust Act, the Delaware Trustee shall be:
(a) a natural person who is a resident of the State of Delaware;
or
(b) if not a natural person, an entity which has its principal
place of business in the State of Delaware, and otherwise
meets the requirements of applicable law,
provided that, if the Property Trustee has its principal place of business in
- -------- ----
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
Section 5.3 Property Trustee; Eligibility.
-----------------------------
(a) There shall at all times be one Trustee which shall act as
Property Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under
the laws of the United States of America or any State
or Territory thereof or of the District of Columbia,
or a corporation or Person permitted by the
Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws
to exercise corporate trust powers, having a combined
capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or
examination by Federal, state, Territorial or
District of Columbia authority. If such corporation
publishes
30
<PAGE>
reports of condition at least annually, pursuant to
law or to the requirements of the supervising or
examining authority referred to above, then for the
purposes of this Section 5.3(a)(ii), the combined
capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set
forth in its most recent report of condition so
published.
(b) If at any time the Property Trustee shall cease to be eligible
to so act under Section 5.3(a), the Property Trustee shall
immediately resign in the manner and with the effect set forth
in Section 5.6(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Property Trustee and the Holder of the
Common Securities (as if it were the obligor referred to in
Section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of Section 310(b) of the
Trust Indenture Act.
(d) The Capital Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of
clause (i) of the first provision contained in Section 310(b)
of the Trust Indenture Act.
Section 5.4 Qualifications of Regular Trustees and Delaware
-----------------------------------------------
Trustee Generally.
-----------------
Each Regular Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
Section 5.5 Initial Trustees.
----------------
The initial Regular Trustees shall be:
Carl F. Geuther
J. Lance Erikson
Bruce F. Antenberg
Great Western Financial Corporation
9200 Oakdale Avenue
Chatsworth, California 91311
The initial Delaware Trustee shall be:
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
31
<PAGE>
The initial Property Trustee shall be:
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, Illinois 60670-0126
Section 5.6 Appointment, Removal and Resignation of Trustees.
------------------------------------------------
(a) Subject to Section 5.6(b), Trustees may be appointed or
removed without cause at any time:
(i) until the issuance of any Trust Securities, by
written instrument executed by the Sponsor; and
(ii) after the issuance of any Trust Securities by vote of
the Holders of a Majority in liquidation amount of
the Common Securities voting as a class at a meeting
of the Holders of the Common Securities; and
(b) (i) The Trustee that acts as Property Trustee shall not
be removed in accordance with Section 5.6(a) until a
Successor Property Trustee has been appointed and has
accepted such appointment by written instrument
executed by such Successor Property Trustee and
delivered to the Regular Trustees and the Sponsor;
and
(ii) the Trustee that acts as Delaware Trustee shall not
be removed in accordance with this Section 5.6(a)
until a successor Trustee possessing the
qualifications to act as Delaware Trustee under
Sections 5.2 and 5.4 (a "Successor Delaware Trustee")
has been appointed and has accepted such appointment
by written instrument executed by such Successor
Delaware Trustee and delivered to the Regular
Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death,
removal or resignation. Any Trustee may resign from office
(without need for prior or subsequent accounting) by any
instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect
upon such delivery or upon such later date as is specified
therein; provided, however, that:
-------- -------
(i) No such resignation of the Trustee that acts as the
Property Trustee shall be effective:
(A) until a Successor Property Trustee has been
appointed and has accepted such appointment
32
<PAGE>
by instrument executed by such Successor
Property Trustee and delivered to the Trust,
the Sponsor and the resigning Property
Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds
thereof distributed to the Holders of the
Trust Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor
Delaware Trustee has been appointed and has accepted
such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the
Trust, the Sponsor and the resigning Delaware
Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or
Successor Property Trustee as the case may be as the Property
Trustee or the Delaware Trustee delivers an instrument of
resignation in accordance with this Section 5.6.
(e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided
in this Section 5.6 within 60 days after delivery to the
Sponsor and the Trust of an instrument of resignation, the
resigning Property Trustee or Delaware Trustee, as applicable,
may petition any court of competent jurisdiction for
appointment of a Successor Property Trustee or Successor
Delaware Trustee. Such court may thereupon, after prescribing
such notice, if any, as it may deem proper, appoint a
Successor Property Trustee or Successor Delaware Trustee, as
the case may be.
Section 5.7 Vacancies Among Trustees.
------------------------
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by a majority of the Regular Trustees
shall be conclusive evidence of the existence of such vacancy. The vacancy shall
be filled with a Trustee appointed in accordance with Section 5.6.
33
<PAGE>
Section 5.8 Effect of Vacancies.
-------------------
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 5.6, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
Section 5.9 Meetings.
--------
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees.
Section 5.10 Delegation of Power.
-------------------
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of
21 his or her power for the purpose of executing any documents
contemplated in Section 3.6, including any registration statement or
amendment thereto filled with the Commission, or making any other
governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to time to
such of their number or to officers of
34
<PAGE>
the Trust the doing of such things and the execution of such
instruments either in the name of the Trust or the names of the
Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set
forth herein.
Section 5.11 Merger, Conversion, Consolidation or Succession to Business.
------------------------------------------------------------
Any corporation into which the Property Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Property Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the Property Trustee or
the Delaware Trustee, as the case may be, hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
ARTICLE VI
Distributions
Section 6.1 Distributions.
-------------
Holders shall receive Distributions in accordance with the applicable terms
of the relevant Holder's Trust Securities. Distributions shall be made on the
Capital Securities and the Common Securities in accordance with the preferences
set forth in their respective terms. If and to the extent that the Note Issuer
makes a payment of interest (including Deferred Interest (as defined in the
Indenture)), premium and/or principal on the Notes held by the Property Trustee
(the amount of any such payment being a "Payment Amount"), the Property Trustee
shall and is directed, to the extent funds are available for that purpose, to
make a distribution (a "Distribution") of the Payment Amount on the next
succeeding Distribution Date (as defined in Exhibit A) to Holders of record in
accordance with the respective terms of the Trust Securities.
35
<PAGE>
ARTICLE VII
Issuance of Trust Securities
Section 7.1 General Provisions Regarding Trust Securities.
---------------------------------------------
(a) The Regular Trustees shall on behalf of the Trust issue one
class of capital securities representing undivided beneficial
interests in the assets of the Trust having such terms as are
set forth in Exhibit A (the "Capital Securities") and one
class of common securities representing undivided beneficial
interests in the assets of the Trust having such terms as are
set forth in Exhibit A (the "Common Securities"). The Trust
shall issue no securities or other interests in the assets of
the Trust other than the Capital Securities and the Common
Securities.
(b) The Certificates shall be signed on behalf of the Trust by the
Regular Trustees (or if there are more than two Regular
Trustees by any two of the Regular Trustees). Such signatures
may be the manual or facsimile signatures of the present or
any future Regular Trustee. Typographical and other minor
errors or defects in any such reproduction of any such
signature shall not affect the validity of any Certificate. In
case any Regular Trustee of the Trust who shall have signed
any of the Trust Securities shall cease to be such Regular
Trustee before the Certificates so signed shall be delivered
by the Trust, such Certificates nevertheless may be delivered
as though the person who signed such Certificates had not
ceased to be such Regular Trustee; and any Certificate may be
signed on behalf of the Trust by such persons who, at the
actual date of execution of such Trust Security, shall be the
Regular Trustees of the Trust, although at the date of the
execution and delivery of the Declaration any such person was
not such a Regular Trustee. Certificates shall be printed,
lithographed or engraved or may be produced in any other
manner as is reasonably acceptable to the Regular Trustees, as
evidenced by their execution thereof, and may have such
letters, numbers or other marks or identification or
designation and such legends or endorsements as the Regular
Trustees may deem appropriate, or as may be required to comply
with any law or to conform to usage.
(c) The consideration received by the Trust for the issuance of
the Trust Securities shall constitute a contribution to the
capital of the Trust and shall not constitute a loan to the
Trust.
36
<PAGE>
(d) Upon issuance of the Trust Securities as provided in this
Declaration, the Trust Securities so issued shall be deemed to
be validly issued, fully paid and non-assessable.
(e) Every Person, by virtue of having become a Holder or a Capital
Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and
agreed to the terms of, and shall be bound by, this
Declaration.
ARTICLE VIII
Termination
Section 8.1 Termination of Trust.
--------------------
(a) The Trust shall terminate:
(i) upon the bankruptcy of the Holder of the Common
Securities or the Sponsor;
(ii) upon the filing of a certificate of dissolution or
its equivalent with respect to the Holder of the
Common Securities or the Sponsor; the filing of a
certificate of cancellation with respect to the Trust
or the revocation of the Holder of the Common
Securities or the Sponsor's charter and the
expiration of 90 days after the date of revocation
without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of
the Holder of the Common Securities, the Sponsor or
the Trust;
(iv) when all of the Trust Securities shall have been
called for redemption and the amounts necessary for
redemption thereof shall have been paid to the
Holders in accordance with the terms of the Trust
Securities;
(v) upon the occurrence and continuation of a Special
Event pursuant to which the Trust shall have been
dissolved in accordance with the terms of the Trust
Securities and all of the Notes shall have been
distributed to the Holders of Trust Securities in
exchange for all of the Trust Securities;
(vi) before the issuance of any Trust Securities, with the
consent of all of the Regular Trustees and the
Sponsor; or
(vii) March 31, 2052.
37
<PAGE>
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Trustees shall file a
certificate of cancellation with the Secretary of State of the
State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
Transfer of Interest
Section 9.1 Transfer of Trust Securities.
----------------------------
(a) Trust Securities may only be transferred, in whole or in part,
in accordance with the terms and conditions set forth in this
Declaration and in the terms of the Trust Securities. Any
transfer or purported transfer of any Trust Security not made
in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Capital Securities shall be freely
transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party
may only transfer Common Securities to the Sponsor or a
Related Party of the Sponsor; provided that, any such transfer
-------- ----
is subject to the conditions precedent that the transferor
obtain the written opinion of independent counsel experienced
in such matters that such transfer would not cause more than
an insubstantial risk that:
(i) the Trust would not be classified for United States
federal income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
Section 9.2 Transfer of Certificates.
------------------------
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular
38
<PAGE>
Trustees duly executed by the Holder or such Holder's attorney duly authorized
in writing. Each Certificate surrendered for registration of transfer shall be
cancelled by the Regular Trustees. A transferee of a Certificate shall be
entitled to the rights and subject to the obligations of a Holder hereunder upon
the receipt by such transferee of a Certificate. By acceptance of a Certificate,
each transferee shall be deemed to have agreed to be bound by this Declaration
and the documents incorporated by reference herein.
Section 9.3 Deemed Trust Security Holders.
-----------------------------
The Trustees may treat the Person in whose name any Certificate shall
be registered on the books and records of the Trust as the sole Holder of such
Certificate and of the Trust Securities represented by such Certificate for
purposes of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Trust Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
Section 9.4 Book Entry Interests.
--------------------
Unless otherwise specified in the terms of the Capital Securities, the
Capital Securities Certificates, on original issuance, will be issued in the
form of one or more, fully registered, global Capital Security Certificates
(each a "Global Certificate"), to be delivered to DTC, the initial Depositary,
by, or on behalf of, the Trust. Such Global Certificates shall initially be
registered on the books and records of the Trust in the name of Cede & Co., the
nominee of DTC, and no Capital Security Beneficial Owner will receive a
definitive Capital Security Certificate representing such Capital Security
Beneficial Owner's interests in such Global Certificates, except as provided in
Section 9.7. Unless and until definitive, fully registered Capital Security
Certificates (the "Definitive Capital Security Certificates") have been issued
to the Capital Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Depositary for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and
receiving approvals, votes or consents hereunder) as the
Holder of the Capital Securities and the sole Holder of the
Global Certificates and shall have no obligation to the
Capital Security Beneficial Owners;
39
<PAGE>
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of the Declaration, the provisions
of this Section 9.4 shall control; and
(d) the rights of the Capital Security Beneficial Owners shall be
exercised only through the Depositary and shall be limited to
those established by law and agreements between such Capital
Security Beneficial Owners and the Depositary and/or the
Depositary Participants and receive and transmit payments of
Distributions on the Global Certificates to such Depositary
Participants. DTC will make book entry transfers among the
Depositary Participants.
Section 9.5 Notices to Depositary.
---------------------
Whenever a notice or other communication to the Capital Security
Holder is required under this Declaration, unless and until Definitive Capital
Security Certificates shall have been issued to the Capital Security Beneficial
Owners pursuant to Section 9.7 the Regular Trustees shall give all such notices
and communications specified herein to be given to the Capital Security Holders
to the Depositary, and shall have no notice obligations to the Capital Security
Beneficial Owners.
Section 9.6 Appointment of Successor Depositary.
-----------------------------------
If any Depositary elects to discontinue its services as securities
depositary with respect to the Capital Securities, the Regular Trustees may, in
their sole discretion, appoint a successor Depositary with respect to such
Capital Securities.
Section 9.7 Definitive Capital Security Certificates.
----------------------------------------
If:
(a) a Depositary elects to discontinue its services as securities
depositary with respect to the Capital Securities and a
successor Depositary is not appointed within 90 days after
such discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect with the consent of the Sponsor to
terminate the book entry system through the Depositary with
respect to the Capital Securities,
then:
(c) Definitive Capital Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to
such Capital Securities; and
40
<PAGE>
(d) upon surrender of the Global Certificates by the Depositary,
accompanied by registration instructions, the Regular Trustees
shall cause Definitive Certificates to be delivered to
Capital Security Beneficial Owners in accordance with the
instructions of the Depositary. Neither the Trustees nor the
Trust shall be liable for any delay in delivery of such
instructions and each of them may conclusively rely on and
shall be protected in relying on, said instructions of the
Depositary. The Definitive Capital Security Certificates shall
be printed, lithographed or engraved or may be produced in any
other manner as is reasonably acceptable to the Regular
Trustees, as evidenced by their execution thereof, and may
have such letters, numbers or other marks of identification or
designation and such legends or endorsements as the Regular
Trustees may deem appropriate, or as may be required to comply
with any law or with any rule or regulation made pursuant
thereto or to conform to usage.
Section 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
If:
(a) any mutilated Certificates should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive
evidence to their satisfaction of the destruction, loss or
theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them
harmless;
then:
In the absence of notice that such Certificate shall have been
acquired by a bona fide purchaser, any two Regular Trustees on behalf of the
Trust shall execute and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
denomination. In connection with the issuance of any new Certificate under this
Section 9.8, the Regular Trustees may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith. Any duplicate Certificate issued pursuant to this Section shall
constitute conclusive evidence of an ownership interest in the relevant Trust
Securities, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
41
<PAGE>
ARTICLE X
Limitation of Liability of Holders
of Trust Securities, Trustees or Others
Section 10.1 Liability.
---------
(a) Except as expressly set forth in this Declaration, the Capital
Securities Guarantee, the Common Securities Guarantee and the
terms of the Trust Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the
Holders of the Trust Securities which shall be made solely
from assets of the Trust; and
(ii) be required to pay to the Trust or to any Holder of Trust
Securities any deficit upon dissolution of the Trust or
otherwise.
(b) The Holder of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than with respect to the
Trust Securities) to the extent not satisfied out of the Trust's
assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders
of the Capital Securities shall be entitled to the same limitation
of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation
Law of the State of Delaware.
Section 10.2 Exculpation.
-----------
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on
behalf of the Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by
law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified
Person's gross negligence (or, in the case of the Property
Trustee, negligence) or willful misconduct with respect to such
acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any
Person as to matters the
42
<PAGE>
Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Trust,
including information, opinions, reports or statements as to the
value and amount of the assets, liabilities, profits, losses, or
any other facts pertinent to the existence and amount of assets
from which Distributions to Holders of Trust Securities might
properly be paid.
Section 10.3 Fiduciary Duty.
--------------
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating
thereto to the Trust or to any other Covered Person, an
Indemnified Person acting under this Declaration shall not be
liable to the Trust or to any other Covered Person for its good
faith reliance on the provisions of this Declaration. The
provisions of this Declaration, to the extent that they restrict
the duties and liabilities of an Indemnified Person otherwise
existing at law or in equity (other than the duties imposed on the
Property Trustee under the Trust Indenture Act), are agreed by the
parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between an
Indemnified Person and any Covered Person; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified
Person shall act in a manner that is, or provides terms
that are, fair and reasonable to the Trust or any Holder of
Trust Securities,
the Indemnified Person shall resolve such conflict of interest,
take such action or provide such terms, considering in each case
the relative interest of each party (including its own interest)
to such conflict, agreement, transaction or situation and the
benefits and burdens relating to such interests, any customary or
accepted industry practices, and any applicable generally accepted
accounting practices or principles. In the absence of bad faith by
the Indemnified Person, the resolution, action or term so made,
taken or provided by the Indemnified Person shall not constitute a
breach of this Declaration or any other agreement contemplated
herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
43
<PAGE>
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own
interests, and shall have no duty or obligation to give any
consideration to any interest of or factors affecting the
Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard
and shall not be subject to any other or different standard
imposed by this Declaration or by applicable law.
Section 10.4 Indemnification.
---------------
(a) To the fullest extent permitted by applicable law, the Sponsor
shall indemnify and hold harmless each Indemnified Person from and
against any loss, damage, liability, tax, penalty, expense or
claim of any kind or nature whatsoever incurred by such
Indemnified Person by reason of the creation, operation or
termination of the Trust or any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the
Trust and in a manner such Indemnified Person reasonably believed
to be within the scope of authority conferred on such Indemnified
Person by this Declaration, except that no Indemnified Person
shall be entitled to be indemnified in respect of any loss, damage
or claim incurred by such Indemnified Person by reason of gross
negligence (or, in the case of the Property Trustee, negligence)
or willful misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding shall,
from time to time, be advanced by the Sponsor prior to the final
disposition of such claim, demand, action, suit or proceeding upon
receipt by the Sponsor of an undertaking by or on behalf of the
Indemnified Person to repay such amount if it shall be determined
that the Indemnified Person is not entitled to be indemnified as
authorized in Section 10.4(a). The indemnification shall survive
the termination of this Declaration.
44
<PAGE>
Section 10.5 Outside Businesses.
------------------
Any Covered Person, the Sponsor, the Note Issuer, the Delaware Trustee
and the Property Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of Trust
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Note
Issuer, the Delaware Trustee, or the Property Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken by
the Trust, and any Covered Person, the Sponsor, the Note Issuer, the Delaware
Trustee and the Property Trustee shall have the right to take for its own
account (individually or as a partner or fiduciary) or to recommend to others
any such particular investment or other opportunity. Any Covered Person, the
Delaware Trustee and the Property Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the Sponsor,
or may act as depositary for, trustee or agent for, or act on any committee or
body of holders of, securities or other obligations of the Sponsor or its
Affiliates.
ARTICLE XI
Accounting
Section 11.1 Fiscal Year.
-----------
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year,
or such other year as is required by the Code.
Section 11.2 Certain Accounting Matters.
--------------------------
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect in
reasonable detail, each transaction of the Trust. The books of
account shall be maintained on the accrual method of accounting,
in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The
books of account and the records of the Trust shall be examined by
and reported upon as of the end of each Fiscal Year by a firm of
independent certified public accountants selected by the Regular
Trustees.
45
<PAGE>
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Trust Securities, within 90 days after the
end of each Fiscal Year of the Trust, annual financial statements
of the Trust, including a balance sheet of the Trust as of the end
of such Fiscal Year, and the related statements of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and delivered
to each of the Holders of Trust Securities, any annual United
States federal income tax information statement, required by the
Code, containing such information with regard to the Trust
Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to
deliver any such statement at a later date, the Regular Trustees
shall endeavor to deliver all such statements within 30 days after
the end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States
federal income tax return, on a Form 1041 or such other form
required by United States federal income tax law, and any other
annual income tax returns required to be filed by the Regular
Trustees on behalf of the Trust with any state or local taxing
authority.
Section 11.3 Banking.
-------
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided, however, that all payments of funds in
-------- -------
respect of the Notes held by the Property Trustee shall be made directly to the
Property Trustee Account and no other funds of the Trust shall be deposited in
the Property Trustee Account. The signatories for such accounts shall be
designated by the Regular Trustees; provided, however, that the Property Trustee
-------- -------
shall designate the sole signatories for the Property Trustee Account.
Section 11.4 Withholding.
-----------
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established
46
<PAGE>
by a Holder, shall remit amounts withheld with respect to the Holder to
applicable jurisdictions. To the extent that the Trust is required to withhold
and pay over any amounts to any authority with respect to distributions or
allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed over withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.
ARTICLE XII
Amendments and Meetings
Section 12.1 Amendments.
----------
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Trust Securities, this Declaration may
only be amended by a written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two
Regular Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the
Property Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the
Delaware Trustee;
(b) No amendment shall be made, and any purported amendment shall be
void and ineffective:
(i) unless, in the case of any proposed amendment, the Property
Trustee shall have first received an Officers' Certificate
from each of the Trust and the Sponsor that such amendment
is permitted by, and conforms to, the terms of this
Declaration (including the terms of the Trust Securities);
(ii) unless, in the case of any proposed amendment which affects
the rights, powers, duties, obligations or immunities of
the Property Trustee, the Property Trustee shall have first
received:
(A) an Officers' Certificate from each of the Trust and
the Sponsor that such amendment is permitted by, and
conforms to, the terms of
47
<PAGE>
this Declaration (including the terms of the Trust
Securities); and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted
by, and conforms to, the terms of this Declaration
(including the terms of the Trust Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be classified
for purposes of United States federal income taxation
as a grantor trust;
(B) reduce or otherwise adversely affect the powers of the
Property Trustee in contravention of the Trust
Indenture Act; or
(C) cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment
Company Act.
(c) at such time after the Trust has issued any Trust Securities that
remain outstanding, any amendment that would adversely affect the
rights, privileges or preferences of any Holder of Trust
Securities may be effected only with such additional requirements
as may be set forth in the terms of such Trust Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended without
the consent of all of the Holders of the Trust Securities;
(e) Article IV shall not be amended without the consent of the Holders
of a Majority in liquidation amount of the Common Securities and;
(f) the rights of the Holders of the Common Securities under Article V
to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders
of a Majority in liquidation amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Trust Securities to:
(i) cure any ambiguity;
48
<PAGE>
(ii) correct or supplement any provision in this Declaration
that may be defective or inconsistent with any other
provision of this Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor; and
(iv) conform to any change in Rule 3a-5 or other exemption from
the requirement to register as an Investment Company under
the Investment Company Act or written change in the
interpretation or application thereof by any legislative
body, court, government agency or regulatory authority
which amendment does not have a material adverse effect on
the rights, preferences or privileges of the Holders.
Section 12.2 Meetings of the Holders of Trust Securities;
--------------------------------------------
Action by Written Consent.
-------------------------
(a) Meetings of the Holders of any class of Trust Securities may be
called at any time by the Regular Trustees (or as provided in the
terms of the Trust Securities) to consider and act on any matter
on which Holders of such class of Trust Securities are entitled to
act under the terms of this Declaration or the terms of the Trust
Securities. The Regular Trustees shall call a meeting of the
Holders of such class if directed to do so by the Holders of at
least 10% in liquidation amount of such class of Trust Securities.
Such direction shall be given by delivering to the Regular
Trustees one or more calls in a writing stating that the signing
Holders of Trust Securities wish to call a meeting and indicating
the general or specific purpose for which the meeting is to be
called. Any Holders of Trust Securities calling a meeting shall
specify in writing the Certificates held by the Holders of Trust
Securities exercising the right to call a meeting and only those
Trust Securities specified shall be counted for purposes of
determining whether the required percentage set forth in the
second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the Trust
Securities, the following provisions shall apply to meetings of
Holders of Trust Securities:
(i) notice of any such meeting shall be given to all the
Holders of Trust Securities having a right to vote thereat
at least 7 days and not more than 60 days before the date
of such meeting. Whenever a vote, consent or approval of
the Holders of Trust Securities is permitted or required
under this
49
<PAGE>
Declaration, such vote, consent or approval may be given at
a meeting of the Holders of Trust Securities. Any action
that may be taken at a meeting of the Holders of Trust
Securities may be taken without a meeting if a consent in
writing setting forth the action so taken is signed by the
Holders of Trust Securities owning not less than the
minimum amount of Trust Securities in liquidation amount
that would be necessary to authorize or take such action at
a meeting at which all Holders of Trust Securities having a
right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be
given to the Holders of Trust Securities entitled to vote
who have not consented in writing. The Regular Trustees may
specify that any written ballot submitted to a Holder for
the purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the
Regular Trustees;
(ii) each Holder of a Trust Security may authorize any Person to
act for it by proxy on all matters in which a Holder of
Trust Securities is entitled to participate, including
waiving notice of any meeting, or voting or participating
at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise
provided in the proxy. Every proxy shall be revocable at
the pleasure of the Holder of Trust Securities executing
it. Except as otherwise provided herein, all matters
relating to the giving, voting or validity of proxies shall
be governed by the General Corporation Law of the State of
Delaware relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation and
the Holders of the Trust Securities were stockholders of a
Delaware corporation;
(iii) each meeting of the Holders of the Trust Securities shall
be conducted by the Regular Trustees or by such other
Person that the Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration or the
terms of the Trust Securities or the Trust Indenture Act
otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating
to meetings of Holders of Trust Securities, including
notice of the time, place or purpose of any meeting at
which any matter is to be voted on by
50
<PAGE>
any Holders of Trust Securities, waiver of any such notice,
action by consent without a meeting, the establishment of a
record date, quorum requirements, voting in person or by
proxy or any other matter with respect to the exercise of
any such right to vote.
ARTICLE XIII
Representations and Warranties of Property Trustee
Section 13.1 Representations and Warranties of Property Trustee.
--------------------------------------------------
The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) The Property Trustee is a banking corporation with trust powers,
duly organized, validly existing and in good standing under the
laws of the United States, with trust power and authority to
execute and deliver, and to carry out and perform its obligations
under the terms of, the Declaration and with its principal place
of business in Illinois.
(b) The execution, delivery and performance by the Property Trustee of
the Declaration has been duly authorized by all necessary
corporate action on the part of the Property Trustee. The
Declaration has been duly executed and delivered by the Property
Trustee, and it constitutes a legal, valid and binding obligation
of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity
and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in
equity or at law).
(c) The execution, delivery and performance of the Declaration by the
Property Trustee does not conflict with or constitute a breach of
the charter or By-laws of the Property Trustee.
(d) No consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for
the execution,
51
<PAGE>
delivery or performance by the Property Trustee, of the
Declaration.
(e) The Property Trustee, pursuant to the Declaration, shall hold
legal title and a valid ownership interest in the Notes.
Section 13.2 Representations and Warranties of Delaware Trustee.
--------------------------------------------------
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has
its principal place of business in the State of Delaware.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration.
The Declaration under Delaware law constitutes a legal, valid and
binding obligation of the Delaware Trustee, enforceable against it
in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in
equity or at law).
(c) No consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for
the execution, delivery or performance by the Delaware Trustee of
the Declaration.
ARTICLE XIV
Miscellaneous
Section 14.1 Notices.
-------
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
52
<PAGE>
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as
the Trust may give notice of to the Holders of the Trust
Securities):
GREAT WESTERN FINANCIAL TRUST II
c/o Great Western Financial Corporation
9200 Oakdale Avenue
Chatsworth, California 91311
(b) if given to the Property Trustee, at the mailing address set forth
below (or such other address as the Property Trustee may give
notice of to the Holders of the Trust Securities):
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Services Division
(c) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as
the Holder of the Common Securities may give notice to the Trust):
Great Western Financial Corporation
9200 Oakdale Avenue
Chatsworth, California 91311
Attention: General Counsel
(d) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
Section 14.2 Governing Law.
-------------
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
53
<PAGE>
Section 14.3 Intention of the Parties.
------------------------
It is the intention of the parties hereto that the Trust not be
characterized for United States federal income tax purposes as an association
taxable as a corporation or a partnership but rather that the Trust be
characterized as a grantor trust or otherwise in a manner such that each Holder
of Trust Securities will be treated as owning an undivided beneficial interest
in the Notes. The provisions of this Declaration shall be interpreted to further
this intention of the parties.
Section 14.4 Headings.
--------
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
Section 14.5 Successors and Assigns.
----------------------
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
Section 14.6 Partial Enforceability.
----------------------
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
Section 14.7 Counterparts.
------------
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
54
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused these presents to
be executed as of the day and year first above written.
CARL F. GEUTHER,
as Trustee
---------------------------
J. LANCE ERIKSON,
as Trustee
---------------------------
BRUCE F. ANTENBERG,
as Trustee
---------------------------
FIRST CHICAGO DELAWARE INC.
as Delaware Trustee
By:
---------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Property Trustee
By:
---------------------------
Name:
Title:
GREAT WESTERN FINANCIAL CORPORATION,
as Sponsor
By:
---------------------------
Name:
Title:
55
<PAGE>
EXHIBIT A
TERMS OF
% CAPITAL SECURITIES
% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of January __, 1997 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Capital Securities and the Common
Securities are set out below (each capitalized term used but not defined herein
has the meaning set forth in the Declaration or, if not defined in such
Declaration, as defined in the Prospectus referred to below):
1. Designation and Number.
----------------------
(a) "Capital Securities." 165,000 Capital Securities of the Trust with
an aggregate liquidation amount with respect to the assets of the
Trust of One Hundred Sixty-Five Million Dollars ($165,000,000) and
a liquidation amount with respect to the assets of the Trust of
$1,000 per Capital Security, are hereby designated for the
purposes of identification only as "____% Capital Securities",
Series A (the "Capital Securities"). The Certificates evidencing
the Capital Securities shall be substantially in the form attached
hereto as Annex I, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom
or practice.
(b) "Common Securities." ________ Common Securities of the Trust with
an aggregate liquidation amount with respect to the assets of the
Trust of _______ Million Dollars ($____________) and a liquidation
amount with respect to the assets of the Trust of $1,000 per
Common Security, are hereby designated for the purposes of
identification only as "____% Common Securities, Series A" (the
"Common Securities"). The Certificates evidencing the Common
Securities shall be substantially in the form attached hereto as
Annex II, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or
practice.
2. Distributions.
-------------
(a) Distributions payable on each Trust Security will be fixed at a
rate per annum of ____% (the "Coupon Rate") of the stated
liquidation amount of $1,000 per Trust Security, such rate being
the rate of interest payable
A-1
<PAGE>
on the Notes to be held by the Property Trustee. Distributions in
arrears for more than one semi-annual period will bear interest
thereon compounded semi-annually at the Coupon Rate (to the extent
permitted by applicable law). The term "Distributions" as used
herein includes any such interest payable unless otherwise stated.
A Distribution is payable only to the extent that payments are
made in respect of the Notes held by the Property Trustee. The
amount of Distributions payable for any period will be computed
for any full quarterly Distribution period on the basis of a 360-
day year of twelve 30-day months, and for any period shorter than
a full semi-annual Distribution period for which Distributions are
computed, on the basis of the actual number of days elapsed per
30-day month.
(b) Distributions on the Trust Securities will be cumulative, will
accrue from January __, 1997, and will be payable semi-annually in
arrears, on ________, _______, ____________, and ___________ of
each year (each a "Distribution Date") to the Holders of record on
the applicable record date, commencing on __________, 1997, except
as otherwise described below. The Note Issuer has the right under
the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Notes for a
period not exceeding 10 consecutive semi-annual periods (each an
"Extension Period") and, during such Extension Period no interest
shall be due and payable on the Notes, provided that no Extension
-------- ----
Period shall last beyond the date of maturity of the Notes. As a
consequence of such deferral, Distributions will also be deferred.
Despite such deferral, semi-annual Distributions will continue to
accrue with interest thereon (to the extent permitted by
applicable law) at the Coupon Rate compounded semi-annually during
any such Extension Period. Prior to the termination of any such
Extension Period, the Note Issuer may further extend such
Extension Period; provided that such Extension Period together
-------- ----
with all such previous and further extensions thereof may not
exceed 10 consecutive semi-annual periods. Payments of accrued
Distributions will be payable to Holders as they appear on the
books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension
Period and the payment of all amounts then due, the Note Issuer
may commence a new Extension Period as if no Extension Period had
previously been declared, subject to the above requirements.
A-2
<PAGE>
(c) Distributions on the Trust Securities will be payable to the
Holders thereof as they appear on the books and records of the
Trust on the relevant record dates. While the Capital Securities
remain in book-entry only form, the relevant record dates shall be
one Business Day prior to the relevant payment dates which payment
dates correspond to the interest payment dates on the Notes. 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 in respect of the Capital
Securities will be made as described under the heading
"Description of the Offered Capital Securities -- Book-Entry Only
Issuance -- The Depository Trust Company" in the Prospectus
Supplement dated January __, 1997 (the "Prospectus Supplement"),
to the Prospectus dated January __, 1997 (together, the
"Prospectus"), of the Trust included in the Registration Statement
on Form S-3 of the Sponsor and the Trust. The relevant record
dates for the Common Securities shall be the same record date as
for the Capital Securities. If the Capital Securities shall not
continue to remain in book-entry only form, the relevant record
dates for the Capital Securities shall be selected by the Regular
Trustees, which dates shall be more than one Business Day but less
than 60 Business Days before the relevant payment dates, which
payment dates correspond to the interest payment dates on the
Notes. Distributions payable on any Trust Securities that are not
punctually paid on any Distribution payment date, as a result of
the Note Issuer having failed to make a payment under the Notes,
will cease to be payable to the Person in whose name such Trust
Securities are registered on the relevant record date, and such
defaulted Distribution will instead be payable to the Person in
whose name such Trust Securities are registered on the special
record date or other specified date determined in accordance with
the Indenture. If any date on which Distributions are payable on
the Trust Securities is not a Business Day, then payment of the
Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay) 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.
(d) In the event that there is any money or other property held by or
for the Trust that is not accounted for
A-3
<PAGE>
hereunder, such property shall be distributed Pro Rata (as
defined herein) among the Holders of the Trust Securities.
3. Liquidation Distribution Upon Dissolution.
-----------------------------------------
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust, the Holders of the Trust Securities on
the date of the liquidation, dissolution, winding-up or termination, as the case
may be, will be entitled to receive out of the assets of the Trust available for
distribution to Holders of Trust Securities after satisfaction of liabilities of
creditors an amount equal to the aggregate of the stated liquidation amount of
$1,000 per Trust Security plus accrued and unpaid Distributions thereon to the
date of payment (such amount being the "Liquidation Distribution"), unless, in
connection with such liquidation, dissolution, winding-up or termination, Notes
in an aggregate principal amount equal to the aggregate stated liquidation
amount of such Trust Securities and bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid Distributions on, such Trust Securities,
shall be distributed on a Pro Rata basis to the Holders of the Trust Securities
in exchange for such Trust Securities.
If, upon any such liquidation, dissolution, winding-up or
termination, the Liquidation Distribution can be paid only in part because the
Trust has insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by the Trust on the Trust
Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
---------------------------
(a) Upon the repayment of the Notes in whole or in part, whether
at maturity or upon redemption, the proceeds from such
repayment or payment shall be simultaneously applied to redeem
Trust Securities having an aggregate liquidation amount equal
to the aggregate principal amount of the Notes so repaid or
redeemed at a redemption price (the "Redemption Price") in the
case of any permitted redemption on or after ______________,
2007 shall equal the following prices, expressed in
percentages of the liquidation amount, together with
accumulated distributions to the redemption date, if redeemed
during the 12 month period beginning ___________:
A-4
<PAGE>
Redemption
Year Price
2007 %
2008 %
2009 %
2010 %
2011 %
2012 %
2013 %
2014 %
2015 %
2016 %
and at 100% on or after ____________, 2017.
The Redemption Price, in the case of a permitted redemption prior to
___________, 2007 shall equal the Make-Whole Amount for a corresponding $1,000
principal amount of Notes together with accumulated distributions to the
redemption date. Holders will be given not less than 30 nor more than 60 days
notice of such redemption.
(b) If fewer than all the outstanding Trust Securities are to be
so redeemed, the Common Securities and the Capital Securities
will be redeemed Pro Rata and the Capital Securities to be
redeemed will be as described in Paragraph 4(f)(ii) below.
(c) If a Special Event (as defined below) shall occur and be
continuing the Regular Trustees shall dissolve the Trust and,
after satisfaction of creditors, cause Notes held by the
Property Trustee, having an aggregate principal amount equal
to the aggregate stated liquidation amount of, with an
interest rate identical to the Coupon Rate of, and accrued and
unpaid interest equal to accrued and unpaid Distributions on
and having the same record date for payment as the Trust
Securities, to 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 (the "90-Day Period");
provided, however, that, in the case of the occurrence of a
-------- -------
Tax Event (as defined below), as a condition of such
dissolution and distribution, the Regular Trustees shall have
received an opinion of 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
A-5
<PAGE>
purposes as a result of the dissolution of the Trust and the
distribution of Notes, and provided, further, that, if at the
-------- -------
time there is available to the Trust the opportunity to
eliminate, within the 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 that has no adverse effect on the Trust, the Note
Issuer, the Sponsor or the Holders of the Trust Securities
("Ministerial Action"), the Trust or the Note Issuer will
pursue such Ministerial Action in lieu of such dissolution and
distribution.
In the case of the occurrence of a Tax Event, if (i) the Note
Issuer has received an opinion (a "Redemption Tax Opinion") of
independent tax counsel experienced in such matters that, as a
result of such Tax Event, there is more than an insubstantial
risk that the Note Issuer would be precluded from deducting
the interest on the Notes for United States federal income tax
purposes even if the Notes were distributed to the Holders of
Trust Securities in liquidation of such Holders' interests in
the Trust as described in this paragraph 4(c), or (ii) the
Regular Trustees shall have been informed by such tax counsel
that a No Recognition Opinion cannot be delivered to the
Trust, the Note Issuer shall have the right at any time, upon
not less than 30 nor more than 60 days notice, to redeem the
Notes in whole or in part for cash within the 90-Day Period
and following such redemption, Trust Securities with an
aggregate liquidation amount equal to the aggregate principal
amount of the 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 the Trust
-------
the opportunity to eliminate within such 90-Day Period, the
Tax Event by taking some Ministerial Action, the Trust or the
Note Issuer will pursue such Ministerial Action in lieu of
redemption.
"Special Event" means a Tax Event or an Investment Company
Event (as defined below). "Tax Event" means that the Regular
Trustees shall have received an opinion of independent tax
counsel experienced in such matters (a "Dissolution Tax
Opinion") to the effect that on or after the date of the
Prospectus Supplement, 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 (ii) below, any political subdivision
or taxing authority thereof or therein, or (b) any amendment
to, or change in, an interpretation or application of any such
laws or
A-6
<PAGE>
regulations by any legislative body, court, governmental
agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or announced or which
interpretation or pronouncement is issued or announced or
which action is taken (irrespective of any retroactive
effect), in each case on or after the date of the Prospectus
Supplement, there is more than an insubstantial risk that (i)
the Trust would be subject to United States federal income tax
with respect to interest accrued or received on the Notes,
(ii) the Trust would be subject to more than a de minimis
amount of other taxes, duties or other governmental charges,
or (iii) interest payable by the Note Issuer to the Trust on
the Notes would not be deductible by the Note Issuer for
United States federal income tax purposes. "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, 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, which change
becomes effective on or after the date of the Prospectus
Supplement.
On and from the date fixed by the Regular Trustees for any
distribution of Notes and dissolution of the Trust: (i) the
Trust Securities will no longer be deemed to be outstanding,
(ii) The Depository Trust Company (the "Depositary") or its
nominee (or any successor Depositary or its nominee), as the
record Holder of the Capital Securities, will receive a
registered global certificate or certificates representing the
Notes to be delivered upon such distribution, and (iii) any
certificates representing Trust Securities not held by the
Depositary or its nominee (or any successor Depositary or its
nominee), will be deemed to represent beneficial interests in
the Notes having an aggregate principal amount equal to the
aggregate stated liquidation amount of such Trust Securities
until such certificates are presented to the Note Issuer or
its agent for transfer or reissue.
(d) Upon the written request of the Note Issuer, the Regular
Trustees shall dissolve the Trust and, after satisfaction of
creditors, cause Notes held by the Property Trustee, having an
aggregate principal amount equal to the aggregate stated
liquidation amount of,
A-7
<PAGE>
with an interest rate identical to the Coupon Rate of,
and accrued and unpaid interest equal to accrued and
unpaid Distributions on and having the same record date
for payment as the Trust Securities, to 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 written request.
(e) The Trust may not redeem fewer than all the outstanding Trust
Securities unless all accrued and unpaid Distributions have
been paid on all Trust Securities for all quarterly
Distribution periods terminating on or before the date of
redemption.
(f) Redemption or Distribution Procedures.
(i) Notice of any redemption of, or notice of
distribution of Notes in exchange for the Trust
Securities (a "Redemption/Distribution Notice") will
be given by the Trust by mail to each Holder of Trust
Securities to be redeemed or exchanged not fewer than
30 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of
a redemption, will be the date fixed for redemption
of the Notes. For purposes of the calculation of the
date of redemption or exchange and the dates on which
notices are given pursuant to this paragraph 4(f)(i),
a Redemption/Distribution Notice shall be deemed to
be given on the day such notice is first mailed by
first-class mail, postage prepaid, to Holders of
Trust Securities. Each Redemption/Distribution Notice
shall be addressed to the Holders of Trust Securities
at the address of each such Holder appearing in the
books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of
either thereof with respect to any Holder shall
affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding
Trust Securities are to be redeemed, the Trust
Securities to be redeemed shall be redeemed Pro Rata
and, in the event Capital Securities are held in
book-entry only form by the Depositary or its nominee
(or any successor Depositary or its nominee), the
Depositary will reduce Pro Rata the amount of the
interest of each Depositary Participant in the
Capital Securities to be redeemed in accordance with
its procedures; provided, that if, as a result of
such Pro Rata redemption, Depositary Participants
would hold
A-8
<PAGE>
fractional interests in the Capital Securities, the Depositary
will adjust the amount of the interest of each Depositary
Participant to be redeemed to avoid such fractional interests;
(iii) If Trust Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be
issued if the Notes are redeemed as set out in this paragraph
4 (which notice will be irrevocable), then (A) while the
Capital Securities are in book-entry only form, with respect
to the Capital Securities, by 12:00 noon, New York City time,
on the redemption date, provided that the Note Issuer has paid
the Property Trustee a sufficient amount of cash in connection
with the related redemption or maturity of the Notes, the
Property Trustee will deposit irrevocably with the Depositary
or its nominee (or any successor Depositary or its nominee)
funds sufficient to pay the applicable Redemption Price with
respect to the Capital Securities and will give the Depositary
irrevocable instructions and authority to pay the Redemption
Price to the Holders of the Capital Securities, and (B) with
respect to Capital Securities issued in definitive form and
Common Securities, provided, that the Note Issuer has paid the
-------- ----
Property Trustee a sufficient amount of cash in connection
with the related redemption or maturity of the Notes, the
Property Trustee will pay the relevant Redemption Price to the
Holders of such Trust Securities by check mailed to the
address of the relevant Holder appearing on the books and
records of the Trust on the redemption date. If a
Redemption/Distribution Notice shall have been given and funds
deposited as required, if applicable, then immediately prior
to the close of business on the date of such deposit, or on
the redemption date, if later, as applicable, Distributions
will cease to accrue on the Trust Securities so called for
redemption and all rights of Holders of such Trust Securities
so called for redemption will cease, except the right of the
Holders of such Trust Securities to receive the Redemption
Price, but without interest on such Redemption Price. Neither
the Regular Trustees nor the Trust shall be required to
register or cause to be registered the transfer of any Trust
Securities that have been so called for redemption. If any
date fixed for redemption of Trust 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 (and without any interest or
A-9
<PAGE>
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 each case with the same
force and effect as if made on such date fixed for
redemption. If payment of the Redemption Price in
respect of any Trust Securities is improperly
withheld or refused and not paid either by the
Property Trustee or by the Sponsor as guarantor
pursuant to the Capital Securities Guarantee or
Common Securities Guarantee, as the case may be,
Distributions on such Trust Securities will continue
to accrue 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 purpose of calculating the Redemption
Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to (A) in
respect of the Capital Securities, the Depositary or
its nominee (or any successor Depositary or its
nominee) if the Global Certificates have been issued
or, if Definitive Capital Security Certificates have
been issued, to the Holder thereof, and (B) in
respect of the Common Securities to the Holder
thereof .
(v) Subject to the foregoing and applicable law
(including, without limitation, United States
federal securities laws), provided the acquirer is
not the Holder of the Common Securities or the
obligor under the Indenture, the Sponsor or any of
its subsidiaries may at any time and from time to
time purchase outstanding Capital Securities by
tender, in the open market or by private
agreement.
5. Voting Rights - Capital Securities.
----------------------------------
(a) Except as provided under paragraphs 5(b) and 7 and as
otherwise required by law and the Declaration, the Holders of
the Capital Securities will have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a majority in liquidation amount of the Capital
Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy
available to the Property Trustee, or direct the exercise of
any trust or power conferred upon the Property Trustee
A-10
<PAGE>
under the Declaration, including (i) directing the time,
method and place of conducting any proceeding for any remedy
available to the Note Trustee, or exercising any trust or
power conferred on the Note Trustee with respect to the Notes,
(ii) waive any past default and its consequences that is
waivable under Section 513 of the Indenture, or (iii) exercise
any right to rescind or annul a declaration that the principal
of all the Notes shall be due and payable, provided, however,
-------- -------
that, where a consent or action under the Indenture would
require the consent or act of the Holders of all of or of
greater than a majority of the Holders in principal amount of
Notes affected thereby (a "Super-Majority"), the Property
Trustee may only give such consent or take such action at the
direction of the Holders of all of or of at least the
proportion in liquidation amount of the Capital Securities
which the relevant Super-Majority represents of the aggregate
principal amount of the Notes outstanding, as applicable.
Other than with respect to directing the time, method and
place of conducting any proceeding for any remedy available to
the Property Trustee or the Note Trustee as set forth above,
the Property Trustee shall not take any action in accordance
with the directions of the Holders of the Capital Securities
under this paragraph unless the Property Trustee has obtained
an opinion of independent tax counsel experienced in such
matters to the effect that for the purposes of United States
federal income tax law the Trust will not fail to be
classified as a grantor trust on account of such action. If an
Event of Default with respect to the Notes, constituting the
failure to pay interest or principal on the 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
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 Notes. The
holders of Trust Securities will not be able to exercise
directly any other remedy available to the holders of the
Notes unless the Property Trustee fails to do so.
Any approval or direction of Holders of Capital Securities may
be given at a separate meeting of Holders of Capital
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 Capital Securities are entitled to
vote,
A-11
<PAGE>
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 Capital Securities. Each such notice will include a
statement setting forth (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 the written consent is sought and (iii) instructions for
the delivery of proxies or consents.
No vote or consent of the Holders of the Capital Securities
will be required for the Trust to redeem and cancel Capital
Securities or to distribute the Notes in accordance with the
Declaration and the terms of the Trust Securities.
Notwithstanding that Holders of Capital Securities are
entitled to vote or consent under any of the circumstances
described above, any of the Capital Securities that are owned
by the Sponsor or any Affiliate of the Sponsor shall not be
entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
---------------------------------
(a) Except as provided under paragraphs 6(b), 6(c) and 7 or as
otherwise required by law and the Declaration, the Holders of
the Common Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in
accordance with Article V of the Declaration, to vote to
appoint, remove or replace any Trustee or to increase or
decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after an
Event of Default with respect to the Capital Securities has
been cured, waived or otherwise eliminated and to the
requirements of the second to last sentence of this paragraph,
the Holders of a Majority in liquidation amount of the Common
Securities, voting separately as a class, may direct the time,
method and place of conducting any proceeding for any remedy
available to the Property Trustee, or exercising any trust or
power conferred upon the Property Trustee under the
Declaration, including (i) directing the time, method and
place of conducting any proceeding for any remedy available to
the Note Trustee, or exercising any trust or power conferred
on the Note Trustee with respect to the Notes, (ii) waive
A-12
<PAGE>
any past default and its consequences that is waivable under
Section 513 of the Indenture, or (iii) exercise any right to
rescind or annul a declaration that the principal of all the
Notes shall be due and payable, provided, however, that, where
-------- -------
a consent or action under the Indenture would require the
consent or act of the Holders of a Super-Majority, the
Property Trustee may only give such consent or take such
action at the direction of the Holders of all of or of at
least the proportion in liquidation amount of the Common
Securities which the relevant Super-Majority represents of the
aggregate principal amount of the Notes outstanding, as
applicable. Pursuant to this paragraph 6(c), the Property
Trustee shall not revoke any action previously authorized or
approved by a vote of the applicable Holders of the Capital
Securities pursuant to paragraph 5(b). Other than with respect
to directing the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee or
the Note Trustee as set forth above, the Property Trustee
shall not take any action in accordance with the directions of
the Holders of the Common Securities under this paragraph
unless the Property Trustee has obtained an opinion of
independent tax counsel experienced in such matters to the
effect that for the purposes of United States federal income
tax law the Trust will not fail to be classified as a grantor
trust on account of such action. If the Property Trustee fails
to enforce its rights under the Declaration, any Holder of
Common Securities may after written request to the Property
Trustee to enforce such rights, institute a legal proceeding
directly against any Person to enforce the Property Trustee's
rights under the Declaration, without first instituting a
legal proceeding against the Property Trustee or any other
person.
Any approval or direction of Holders of Common Securities may
be given at a separate meeting of Holders of Common 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 Common 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 Common
Securities. Each such notice will include a statement setting
forth (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
A-13
<PAGE>
consent is sought and (iii) instructions for the delivery of
proxies or consents.
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common
Securities or to distribute the Notes in accordance with the
Declaration and the terms of the Trust Securities.
7. Amendments to Declaration and Indenture.
---------------------------------------
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration
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 as described in Section 8.1 of the
Declaration, then the Holders of outstanding Trust Securities,
voting together as a single class, will be entitled to vote on
such amendment or proposal (but not on any other amendment or
proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least
66-2/3% in liquidation amount of the Trust Securities, voting
together as a single class; provided, however, if any
-------- -------
amendment or proposal referred to in clause (i) above would
adversely affect only the Capital Securities or only 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.
(b) In the event the consent of the Property Trustee as the holder
of the Notes, the Capital Securities Guarantee and the Common
Securities Guarantee is required under the Indenture or the
applicable Guarantee Agreement with respect to any amendment,
modification or termination on the Indenture, the Notes, the
Capital Securities Guarantees or the Common Securities
Guarantee, 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 Indenture or the
-------
applicable Guarantee Agreement would require the consent of a
Super-Majority, the Property Trustee may only give such
A-14
<PAGE>
consent at the direction of the Holders of all of or 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 Notes outstanding, as
applicable; provided, further, that the Property Trustee shall
-------- -------
not take any action in accordance with the directions of the
Holders of the Trust Securities under this paragraph 7(b)
unless the Property Trustee has obtained an opinion of
independent tax counsel experienced in such matters to the
effect that for the purposes of United States federal income
tax law the Trust will not be classified as other than a
grantor trust on account of such action.
8. Pro Rata.
--------
A reference to any payment, distribution or treatment as being "Pro
Rata" shall mean pro rata to each Holder of Trust Securities according to the
aggregate liquidation amount of the Trust Securities held by the relevant Holder
in relation to the aggregate liquidation amount of all Trust Securities
outstanding unless, in relation to a payment, an Event of Default under the
Indenture has occurred and is continuing, in which case any funds available to
make such payment shall be paid first to each Holder of the Capital Securities
pro rata according to the aggregate liquidation amount of Capital Securities
held by the relevant Holder relative to the aggregate liquidation amount of all
Capital Securities outstanding, and only after satisfaction of all amounts owed
to the Holders of the Capital Securities, to each Holder of Common Securities
pro rata according to the aggregate liquidation amount of Common Securities held
by the relevant Holder relative to the aggregate liquidation amount of all
Common Securities outstanding.
9. Ranking.
-------
The Capital Securities rank pari passu and payment thereon shall be
made Pro Rata with the Common Securities except that, where an Event of Default
occurs and is continuing hereunder, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to payment of the
Holders of the Capital Securities.
10. Acceptance of Trust Securities Guarantee and Indenture.
------------------------------------------------------
Each Holder of Capital Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Capital Securities Guarantee
and the Common Securities Guarantee, respectively, including the subordination
provisions therein and to the provisions of the Indenture.
A-15
<PAGE>
11. No Preemptive Rights.
--------------------
The Holders of the Trust Securities shall have no preemptive rights to
subscribe for any additional securities.
12. Miscellaneous.
-------------
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Capital
Securities Guarantee or the Common Securities Guarantee (as may be appropriate),
and the Indenture to a Holder without charge on written request to the Trust at
its principal place of business.
A-16
<PAGE>
ANNEX I
IF THE CAPITAL SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT- This
Capital Security is a Global Certificate within the meaning of the Declaration
hereinafter referred to and is registered in the name of The Depository Trust
Company, a New York Corporation (the "Depositary") or a nominee of the
Depositary. This Capital Security is exchangeable for Capital Securities
registered in the name of a person other than the Depositary or its nominee only
in the limited circumstances described in the Declaration and no transfer of
this Capital Security (other than a transfer of this Capital Security as a whole
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) may be
registered except in limited circumstances.
Unless this Capital Security is presented by an authorized
representative of the Depositary to the Trust or its agent for registration of
transfer, exchange or payment, and any Capital Security issued is registered in
the name of Cede & Co. or such other name as is requested by an authorized
representative of the Depositary and any payment hereon is made to Cede & Co. or
such other entity as is requested by an authorized representative of the
Depositary, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.
Certificate Number Number of Capital Securities
CUSIP NO.
-----------------
Certificate Evidencing Capital Securities
of
GREAT WESTERN FINANCIAL TRUST II
Capital Securities
(liquidation amount $1,000 per Capital Security)
GREAT WESTERN FINANCIAL TRUST II, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
_______________ (the "Holder") is the registered owner of capital securities of
the Trust representing undivided beneficial interests in the assets of the Trust
designated the ____% Capital Securities, Series A (liquidation amount $1,000 per
Capital Security) (the "Capital Securities"). The Capital Securities are
transferable on the books and records of the Trust, in person or by a duly
I-1
<PAGE>
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Capital Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of Trust of the Trust dated as of January __,
1997, as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Capital Securities as set forth in
Exhibit A to the Declaration. Capitalized terms used herein but not defined
shall have the meaning given them in the Declaration. The Holder is entitled to
the benefits of the Capital Securities Guarantee to the extent provided therein.
The Sponsor will provide a copy of the Declaration, the Capital Securities
Guarantee and the Indenture to a Holder without charge upon written request to
the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat for United States federal
income tax purposes, the Notes as indebtedness and the Capital Securities as
evidence of indirect beneficial ownership in the Notes.
IN WITNESS WHEREOF, the Trust has executed this certificate
this day of January, 1997.
-----
J. LANCE ERIKSON,
as Trustee
-----------------------------------------
BRUCE F. ANTENBERG,
as Trustee
-----------------------------------------
I-2
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital Security
Certificate to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee) and irrevocably appoints)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Capital Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
-----------------------------
Signature:
--------------------------------------
(Sign exactly as your name appears on the other side of this Capital Security
Certificate)
Signature(s) must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Property Trustee, which requirements include
membership or participation in STAMP or such other "signature guaranty program"
as may be determined by the Property Trustee in addition to or in substitution
for STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.
I-3
<PAGE>
ANNEX II
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
GREAT WESTERN FINANCIAL TRUST II
Common Securities
(liquidation amount $1,000 per Common Security)
GREAT WESTERN FINANCIAL TRUST II, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
____________________ (the "Holder") is the registered owner of common securities
of the Trust representing undivided beneficial interests in the assets of the
Trust designated the ____% Common Securities, Series A (liquidation amount
$1,000 per Common Security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of Trust of the Trust dated as of January __,
1997, as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Common Securities as set forth in
Exhibit A to the Declaration. Capitalized terms used herein but not defined
shall have the meaning given them in the Declaration.
The Holder is entitled to the benefits of the Common Securities
Guarantee to the extent provided therein. The Trust will provide a copy of the
Declaration, the Common Securities Guarantee and the Indenture to the Holder
without charge upon written request to the Trust at its principal place of
business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat for United States federal
income tax purposes the Notes as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Notes.
II-1
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate
this day of January, 1997.
-----
J. LANCE ERIKSON,
as Trustee
-----------------------------------------
BRUCE F. ANTENBERG,
as Trustee
-----------------------------------------
II-2
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee) and irrevocably appoints)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
----------------------------------
Signature:
------------------------------------------
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
Signature(s) must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Property Trustee, which requirements include
membership or participation in STAMP or such other "signature guaranty program"
as may be determined by the Property Trustee in addition to or in substitution
for STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.
II-3
<PAGE>
EXHIBIT 4.17
========================================
CAPITAL SECURITIES GUARANTEE AGREEMENT
GREAT WESTERN FINANCIAL TRUST II
Dated as of January __, 1997
========================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C> <C>
ARTICLE I
Definitions and Interpretation............................. 2
Section 1.1. Definitions and Interpretation.......................................... 2
ARTICLE II
Trust Indenture Act.................................. 5
Section 2.1. Trust Indenture Act; Application........................................ 5
Section 2.2. Lists of Holders of Trust Securities.................................... 5
Section 2.3. Reports by the Capital Guarantee Trustee................................ 6
Section 2.4. Periodic Reports to Capital Guarantee Trustee........................... 6
Section 2.5. Evidence of Compliance with Conditions Precedent........................ 6
Section 2.6. Events of Default; Waiver............................................... 6
Section 2.7. Event of Default; Notice................................................ 7
Section 2.8. Conflicting Interests................................................... 7
ARTICLE III
Power, Duties and Rights of
Capital Guarantee Trustee............................... 7
Section 3.1. Powers and Duties of the Capital Guarantee Trustee...................... 7
Section 3.2. Certain Rights of Capital Guarantee Trustee............................. 9
Section 3.3. Not Responsible for Recitals or Issuance of Guarantee................... 12
ARTICLE IV
Capital Guarantee Trustee............................... 12
Section 4.1. Capital Guarantee Trustee; Eligibility.................................. 12
Section 4.2. Appointment Removal and Resignation of Capital Guarantee Trustees....... 13
ARTICLE V
Guarantee....................................... 13
Section 5.1. Guarantee............................................................... 13
Section 5.2. Subordination........................................................... 14
Section 5.3. Waiver of Notice and Demand............................................. 14
Section 5.4. Obligations Not Affected................................................ 14
Section 5.5. Rights of Holders....................................................... 15
Section 5.6. Guarantee of Payment.................................................... 15
Section 5.7. Subrogation............................................................. 15
Section 5.8. Independent Obligations................................................. 16
ARTICLE VI
Limitation of Transactions; Subordination....................... 16
Section 6.1. Limitation of Transactions.............................................. 16
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section 6.2. Ranking................................................................. 16
ARTICLE VII
Termination...................................... 17
Section 7.1. Termination............................................................. 17
ARTICLE VIII
Indemnification.................................... 17
Section 8.1. Exculpation............................................................. 17
Section 8.2. Indemnification......................................................... 18
ARTICLE IX
Miscellaneous..................................... 18
Section 9.1. Successors and Assigns.................................................. 18
Section 9.2. Amendments.............................................................. 18
Section 9.3. Notices................................................................. 19
Section 9.4. Benefit................................................................. 19
Section 9.5. Governing Law........................................................... 19
ARTICLE I
Definitions and Interpretation
Section 1.1. Definitions and Interpretation......................................... 2
ARTICLE II
Trust Indenture Act
Section 2.1. Trust Indenture Act; Application....................................... 5
Section 2.2. Lists of Holders of Trust Securities................................... 5
Section 2.3. Reports by the Capital Guarantee Trustee............................... 6
Section 2.4. Periodic Reports to Capital Guarantee Trustee.......................... 6
Section 2.5. Evidence of Compliance with Conditions Precedent....................... 6
Section 2.6. Events of Default; Waiver.............................................. 6
Section 2.7. Event of Default; Notice............................................... 7
Section 2.8. Conflicting Interests.................................................. 7
ARTICLE III
Power, Duties and Rights of
Capital Guarantee Trustee
Section 3.1. Powers and Duties of the Capital Guarantee Trustee...................... 7
Section 3.2. Certain Rights of Capital Guarantee Trustee............................. 9
Section 3.3. Not Responsible for Recitals or Issuance of Guarantee................... 12
ARTICLE IV
Capital Guarantee Trustee
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section 4.1. Capital Guarantee Trustee; Eligibility.................................. 12
Section 4.2. Appointment Removal and Resignation of Capital Guarantee Trustees....... 13
ARTICLE V
Guarantee
Section 5.1. Guarantee............................................................... 13
Section 5.2. Subordination........................................................... 14
Section 5.3. Waiver of Notice and Demand............................................. 14
Section 5.4. Obligations Not Affected................................................ 14
Section 5.5. Rights of Holders....................................................... 15
Section 5.6. Guarantee of Payment.................................................... 15
Section 5.7. Subrogation............................................................. 16
Section 5.8. Independent Obligations................................................. 16
ARTICLE VI
Limitation of Transactions; Subordination
Section 6.1. Limitation of Transactions.............................................. 16
Section 6.2. Ranking................................................................. 16
ARTICLE VII
Termination
Section 7.1. Termination............................................................. 17
ARTICLE VIII
Indemnification
Section 8.1. Exculpation............................................................. 17
Section 8.2. Indemnification......................................................... 18
ARTICLE IX
Miscellaneous
Section 9.1. Successors and Assigns.................................................. 18
Section 9.2. Amendments.............................................................. 18
Section 9.3. Notices................................................................. 19
Section 9.4. Benefit................................................................. 19
Section 9.5. Governing Law........................................................... 19
</TABLE>
iii
<PAGE>
CAPITAL SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of
January __, 1997, is executed and delivered by Great Western Financial
Corporation, a Delaware corporation (the "Guarantor"), and The First National
Bank of Chicago, as trustee (the "Capital Guarantee Trustee"), for the benefit
of the Holders (as defined herein) from time to time of the Capital Securities
(as defined herein) of Great Western Financial Trust II, a Delaware statutory
business trust (the "Issuer").
RECITALS
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of January __, 1997, among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof $165 million aggregate stated liquidation amount
of Capital Securities designated the ____% Capital Securities, Series A (the
"Capital Securities");
WHEREAS, as incentive for the Holders (as hereinafter defined) to
purchase the Capital Securities, the Guarantor desires irrevocably
and unconditionally to agree, to the extent set forth in this Guarantee
Agreement, to pay to the Holders of the Capital Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee Agreement") with substantially
identical terms to this Guarantee Agreement for the benefit of the holders of
the Common Securities (as defined herein) except that if an Event of Default (as
defined in the Indenture (as defined herein)), has occurred and is continuing,
the rights of holders of the Common Securities to receive Guarantee Payments
under the Common Securities Guarantee Agreement are subordinated to the rights
of Holders of Capital Securities to receive Guarantee Payments under this
Guarantee Agreement.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Capital Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the
benefit of the Holders.
1
<PAGE>
ARTICLE I
Definitions and Interpretation
Section 1.1. Definitions and Interpretation.
------------------------------
In this Guarantee Agreement, unless the context otherwise
requires:
(a) capitalized terms used in this Guarantee Agreement but not defined
in the preamble above have the respective meanings assigned to them
in this Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented
or amended from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections
are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Capital Guarantee Trustee" means The First National Bank of Chicago
until a Successor Capital Guarantee Trustee has been appointed and has accepted
such appointment pursuant to the terms of this Guarantee Agreement and
thereafter means each such Successor Capital Guarantee Trustee.
"Common Securities" means the common securities representing
undivided beneficial interests in the assets of the Issuer.
"Covered Person" means any Holder or beneficial owner of Capital
Securities.
"Direction" by a Person means a written direction signed:
(a) if the Person is a natural person by that Person; or
2
<PAGE>
(b) in any other case, in the name of such Person by one or more
Authorized Officers of that Person.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Capital Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in the Declaration) that are required to be paid on such Capital Securities to
the extent the Issuer shall have received a payment of interest or principal on
the Notes therefor, (ii) the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Redemption Price") to the extent
the Issuer has received a payment of interest or principal or premium, if any,
on the Notes with respect to any Capital Securities called for redemption by the
Issuer, and (iii) upon a voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Issuer (other than in connection with the
distribution of Notes to the Holders in exchange for Capital Securities as
provided in the Declaration or the redemption of all of the Capital Securities
upon the maturity or redemption of the Notes), the lesser of (a) the aggregate
of the liquidation amount and all accrued and unpaid Distributions on the
Capital Securities to the date of payment to the extent the Issuer has received
a payment on the Notes therefor, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer (in
either case, the "Liquidation Distribution").
"Holder" shall mean any holder, as registered on the books and
records of the Issuer of any Capital Securities; provided, that, in determining
whether the holders of the requisite percentage of Capital Securities have given
any request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Capital Guarantee Trustee, any
Affiliate of the Capital Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives or agents of the
Capital Guarantee Trustee.
"Indenture" means the Indenture dated as of September 12, 1990, as
amended and supplemented by a First Supplemental Indenture, dated as of April
30, 1993, the Second Supplemental Indenture; dated as of December 6, 1995 and
the Third Supplemental Indenture, dated as of January __, 1997, among the Note
Issuer and Harris Trust and Savings Bank, as trustee, and any indenture
supplemental thereto pursuant to which certain Notes are to be issued.
3
<PAGE>
"Majority in liquidation amount of the Trust Securities" means,
except as provided by the Trust Indenture Act, a vote by Holder(s) of Capital
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined) of all Capital Securities.
"Note Issuer" means the Guarantor in its capacity as issuer of the
Notes.
"Notes" means the subordinated debt securities of the Note Issuer
issued pursuant to the Indenture and acquired by the Issuer.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Responsible Officer" means, with respect to the Capital Guarantee
Trustee, any vice-president, any assistant vice-president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, any trust officer
or assistant trust officer or any other officer customarily performing functions
similar to those performed by any of the above designated officers
4
<PAGE>
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"Successor Capital Guarantee Trustee" means a successor Capital
Guarantee Trustee possessing the qualifications to act as Capital Guarantee
Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, in
effect at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Trust Securities" means collectively the Common Securities and the
Capital Securities.
ARTICLE II
Trust Indenture Act
Section 2.1. Trust Indenture Act; Application.
--------------------------------
(a) This Guarantee Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this
Guarantee Agreement and shall, to the extent applicable, be
governed by such provisions; and
(b) if and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties
imposed by Section 310 to 317, inclusive, of the Trust
Indenture Act, such duties imposed by the Trust Indenture
Act shall control.
Section 2.2. Lists of Holders of Trust Securities.
------------------------------------
(a) The Guarantor shall provide the Capital Guarantee Trustee with a
list, in such form as the Capital Guarantee Trustee may reasonably
require, of the names and addresses of the Holders of the Capital
Securities ("List of Holders") as of such date, (i) within 14 days
after each record date for payment of distributions on the Capital
Securities, and (ii) at any other time within 30 days of receipt by
the Guarantor of a written request for a List of Holders as of a
date no more than 14 days before such List of Holders is given to
the Capital Guarantee Trustee provided that the Guarantor shall not
be obligated to provide such List of Holders at
5
<PAGE>
any time the List of Holders does not differ from the most recent
List of Holders given to the Capital Guarantee Trustee by the
Guarantor. The Capital Guarantee Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Capital Guarantee Trustee shall comply with its obligations
under Section 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
Section 2.3. Reports by the Capital Guarantee Trustee.
----------------------------------------
Within 60 days after May 15 of each year, the Capital Guarantee
Trustee shall provide to the Holders of the Capital Securities such reports as
are required by Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The Capital
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
Section 2.4. Periodic Reports to Capital Guarantee Trustee.
---------------------------------------------
The Guarantor shall provide to the Capital Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
Section 2.5. Evidence of Compliance with Conditions Precedent.
------------------------------------------------
The Guarantor shall provide to the Capital Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this Guarantee
Agreement that relate to any of the matters set forth in Section 314(c) of the
Trust Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
Section 2.6. Events of Default; Waiver.
-------------------------
The Holders of a Majority in liquidation amount of Capital
Securities may, by vote, on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
6
<PAGE>
Section 2.7. Event of Default; Notice.
------------------------
(a) The Capital Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Capital Securities, notices of all Events of
Default known to the Capital Guarantee Trustee, unless such defaults have been
cured before the giving of such notice, provided, that, the Capital Guarantee
-------- ----
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
and/or Responsible Officers of the Capital Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Capital Securities.
(b) The Capital Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Capital Guarantee Trustee shall have received
written notice, or a Responsible Officer shall have obtained written notice, of
such Event of Default.
Section 2.8. Conflicting Interests.
---------------------
The Declaration shall be deemed to be specifically described in this
Guarantee Agreement for the purposes of the first proviso contained in Section
310(b) of the Trust Indenture Act.
ARTICLE III
Power, Duties and Rights of
Capitalc Guarantee Trustee
Section 3.1. Powers and Duties of the Capital Guarantee Trustee.
--------------------------------------------------
(a) This Guarantee Agreement shall be held by the Capital Guarantee Trustee
for the benefit of the Holders of the Capital Securities, and the
Capital Guarantee Trustee shall not transfer this Guarantee Agreement
to any Person except a Holder of Capital Securities exercising his or
her rights pursuant to Section 5.4(b) or to a Successor Capital
Guarantee Trustee on acceptance by such Successor Capital Guarantee
Trustee of its appointment to act as Successor Capital Guarantee
Trustee. The right, title and interest of the Capital Guarantee Trustee
shall automatically vest in any Successor Capital Guarantee Trustee,
and such vesting and cessation of title shall be effective whether or
not conveyancing documents have been executed and delivered pursuant to
the appointment of such Successor Capital Guarantee Trustee.
7
<PAGE>
(b) If an Event of Default has occurred and is continuing, the Capital
Guarantee Trustee shall enforce this Guarantee Agreement for the
benefit of the Holders of the Capital Securities.
(c) The Capital Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are
specifically set forth in this Guarantee Agreement, and no implied
covenants shall be read into this Guarantee Agreement against the
Capital Guarantee Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6), the
Capital Guarantee Trustee shall exercise such of the rights and powers
vested in it by this Guarantee Agreement, and use the same degree of
care and skill in its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct of his or her
own affairs.
(d) No provision of this Guarantee Agreement shall be construed to relieve
the Capital Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Capital Guarantee Trustee
shall be determined solely by the express provisions of this
Guarantee Agreement, and the Capital Guarantee Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee
Agreement, and no implied covenants or obligations shall be
read into this Guarantee Agreement against the Capital
Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Capital
Guarantee Trustee, the Capital Guarantee Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Capital Guarantee
Trustee and conforming to the requirements of this Guarantee
Agreement; but in the case of any such certificates or opinions
that by any provision hereof are specifically required to be
8
<PAGE>
furnished to the Capital Guarantee Trustee, the Capital
Guarantee Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of
this Guarantee Agreement;
(ii) the Capital Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Capital
Guarantee Trustee, unless it shall be proved that the Capital
Guarantee Trustee was negligent in ascertaining the pertinent facts
upon which such judgment was made;
(iii) the Capital Guarantee Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Capital Securities relating
to the time, method and place of conducting any proceeding for any
remedy available to the Capital Guarantee Trustee, or exercising
any trust or power conferred upon the Capital Guarantee Trustee
under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the Capital
Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if the
Capital Guarantee Trustee shall have reasonable grounds for
believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Guarantee
Agreement or adequate indemnity against such risk or liability is
not reasonably assured to it.
Section 3.2. Certain Rights of Capital Guarantee Trustee.
-------------------------------------------
(a) Subject to the provisions of Section 3.1:
(i) The Capital Guarantee Trustee may rely and shall be fully protected
in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed, sent or presented by the
proper party or parties.
9
<PAGE>
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by a Direction
or an Officers' Certificate.
(iii) Whenever, in the administration of this Guarantee Agreement, the
Capital Guarantee Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting any
action hereunder, the Capital Guarantee Trustee (unless other
evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request and rely upon an Officers'
Certificate which, upon receipt of such request, shall be promptly
delivered by the Guarantor.
(iv) The Captial Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Captial Guarantee Trustee may consult with counsel, and the
written advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in
good faith and in accordance with such advice or opinion. Such
counsel may be counsel to the Guarantor or any of its Affiliates
and may include any of its employees. The Capital Guarantee Trustee
shall have the right at any time to seek instructions concerning
the administration of this Guarantee Agreement from any court of
competent jurisdiction.
(vi) The Capital Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Capital Guarantee Trustee such
adequate security and indemnity as would satisfy a reasonable
person in the position of the Capital Guarantee Trustee, against
the costs, expenses (including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be
requested by the Capital Guarantee Trustee; provided that, nothing
contained in this Section 3.2(a)(vi) shall be taken to relieve the
Capital Guarantee Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise
10
<PAGE>
the rights and powers vested in it by this Guarantee
Agreement.
(vii) The Capital Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other
paper or document, but the Capital Guarantee Trustee, in its
discretion may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Capital Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys, and the
Capital Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder.
(ix) Any action taken by the Capital Guarantee Trustee or its
agents hereunder shall bind the Holders of the Capital
Securities, and the signature of the Capital Guarantee
Trustee or its agents alone shall be sufficient and
effective to perform any such action. No third party shall
be required to inquire as to the authority of the Capital
Guarantee Trustee to so act or as to its compliance with any
of the terms and provisions of this Guarantee Agreement,
both of which shall be conclusively evidenced by the Capital
Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Guarantee Agreement
the Capital Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Capital
Guarantee Trustee (i) may request instructions from the
Holders of the Capital Securities, (ii) may refrain from
enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be
protected in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Capital Guarantee
Trustee to perform any act or acts or exercise any right,
power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the
Capital Guarantee Trustee shall be
11
<PAGE>
unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power,
duty or obligation. No permissive power or authority available to
the Capital Guarantee Trustee shall be construed to be a duty.
Section 3.3. Not Responsible for Recitals or Issuance of Guarantee.
-----------------------------------------------------
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Capital Guarantee Trustee does not assume
any responsibility for their correctness. The Capital Guarantee Trustee makes no
representation as to the validity or sufficiency of this Guarantee Agreement.
ARTICLE IV
Capital Guarantee Trustee
Section 4.1. Capital Guarantee Trustee; Eligibility.
--------------------------------------
(a) There shall at all times be a Capital Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or
Person permitted by the Securities and Exchange Commission
to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50
million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or
examining authority referred to above, then, for the
purposes of this Section 4.1(a)(ii), the combined capital
and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Capital Guarantee Trustee shall cease to
be eligible to so act under Section 4.1(a), the Capital
Guarantee Trustee shall immediately resign in the manner and
with the effect set out in Section 4.2(c).
12
<PAGE>
(c) If the Capital Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b)
of the Trust Indenture Act, the Capital Guarantee Trustee
and Guarantor shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
Section 4.2. Appointment Removal and Resignation of Capital Guarantee
--------------------------------------------------------
Trustees.
--------
(a) Subject to Section 4.2(b), the Capital Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Capital Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Capital Guarantee Trustee has
been appointed and has accepted such appointment by written
instrument executed by such Successor Capital Guarantee Trustee and
delivered to the Guarantor.
(c) The Capital Guarantee Trustee appointed to office shall hold office
until a Successor Capital Guarantee Trustee shall have been
appointed or until its removal or resignation. The Capital Guarantee
Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the Capital
Guarantee Trustee and delivered to the Guarantor, which resignation
shall not take effect until a Successor Capital Guarantee Trustee
has been appointed and has accepted such appointment by instrument
in writing executed by such Successor Capital Guarantee Trustee and
delivered to the Guarantor and the resigning Capital Guarantee
Trustee.
(d) If no Successor Capital Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of
resignation, the resigning Capital Guarantee Trustee may petition
any court of competent jurisdiction for appointment of a Successor
Capital Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a
Successor Capital Guarantee Trustee.
ARTICLE V
Guarantee
Section 5.1. Guarantee.
---------
The Guarantor irrevocably and unconditionally agrees to pay
in full to the Holders the Guarantee Payments (without
13
<PAGE>
duplication of amounts theretofore paid by the Issuer), as and when due,
regardless of any defense, right of set-off or counterclaim that the Issuer may
have or assert. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Issuer to pay such amounts to the Holders.
Section 5.2. Subordination.
-------------
If an Event of Default under the Indenture has occurred and is
continuing, the rights of holders of the Common Securities to receive payments
under the Common Securities Guarantee Agreement are subordinated to the rights
of Holders of Capital Securities to receive Guarantee Payments.
Section 5.3. Waiver of Notice and Demand.
---------------------------
The Guarantor hereby waives notice of acceptance of this Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
Section 5.4. Obligations Not Affected.
------------------------
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Capital
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the
Capital Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with,
the Capital Securities (other than an extension of time for payment
of Distributions, Redemption Price, Liquidation Distribution or
other sums payable that results from the extension of any interest
payment period on the Notes or any extension of the maturity date of
the Notes permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any
14
<PAGE>
right, privilege, power or remedy conferred on the Holders pursuant
to the terms of the Capital Securities, or any action on the part of
the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the
Issuer or any of the assets of the Issuer;
(e) invalidity of, or defect or deficiency in the Capital Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the
intent of this Section 5.3 that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
Section 5.5. Rights of Holders.
-----------------
(a) The Holders of a Majority in liquidation amount of the Capital
Securities have the right to direct the time, method and place of
conducting of any proceeding for any remedy available to the Capital
Guarantee Trustee in respect of this Guarantee Agreement or to
direct the exercise of any trust or power conferred upon the Capital
Guarantee Trustee under this Guarantee Agreement.
(b) Any Holder of Capital Securities may institute a legal proceeding
directly against the Guarantor to enforce its rights under this
Guarantee Agreement, without first instituting a legal proceeding
against the Issuer, the Capital Guarantee Trustee or any other
Person.
Section 5.6. Guarantee of Payment.
--------------------
This Guarantee Agreement creates a guarantee of payment and not of
collection.
15
<PAGE>
Section 5.7. Subrogation.
-----------
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Capital Securities against the Issuer in respect of any amounts paid
to such Holders by the Guarantor under this Guarantee Agreement; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right that
it may acquire by way of subrogation or any indemnity reimbursement or other
agreement, in all cases as a result of payment under this Guarantee Agreement,
if, at the time of any such payment, any amounts are due and unpaid under this
Guarantee Agreement. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
Section 5.8. Independent Obligations.
-----------------------
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Capital
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.4 hereof.
ARTICLE VI
Limitation of Transactions; Subordination
Section 6.1. Limitation of Transactions.
--------------------------
So long as any Capital Securities remain outstanding, if there shall
have occurred an Event of Default or an event of default under the Declaration,
then (a) the Guarantor shall not, and shall cause any subsidiary of Guarantor
that is not a wholly owned subsidiary of Guarantor 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 Guarantor 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 Guarantor
which rank pari passu with or junior to the Notes, provided, that, the foregoing
restriction in this Section 6.1(a) shall not apply to any stock dividends paid
by Guarantor, or any of its subsidiaries, where the dividend stock is the same
stock as that on which the dividend is being paid.
Section 6.2. Ranking.
-------
This Guarantee Agreement will constitute an unsecured obligation of
the Guarantor and will rank (i) subordinate and
16
<PAGE>
junior in right of payment to all other liabilities of the Guarantor (other than
the Common Securities Guarantee or any guarantee now or hereafter entered into
by the Guarantor in respect of any preferred or preference stock of any
Affiliate of the Guarantor), (ii) pari passu with the most senior preferred or
preference stock now or hereafter issued by the Guarantor and with any guarantee
now or hereafter entered into by the Guarantor in respect of any preferred or
preference stock of any Affiliate of the Guarantor, and (iii) senior to the
Guarantor's common stock.
ARTICLE VII
Termination
Section 7.1. Termination.
-----------
This Guarantee Agreement shall terminate and the Guarantee will no
longer be deemed to be outstanding upon (i) full payment of the Redemption Price
of all Capital Securities, (ii) upon the distribution of the Notes to the
Holders of all Capital Securities or (iii) upon full payment of the amounts
payable in accordance with the Declaration upon liquidation of the Issuer.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
of Capital Securities must restore payment of any sums paid under the Capital
Securities or under this Capital Securities Guarantee.
ARTICLE VIII
Indemnification
Section 8.1. Exculpation.
-----------
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with this Guarantee Agreement and
in a manner that such Indemnified Person reasonably believed to be within the
scope of the authority conferred on such Indemnified Person by this Guarantee
Agreement or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's
negligence or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions,
17
<PAGE>
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which Distributions to Holders of Capital Securities might properly
be paid.
Section 8.2. Indemnification.
---------------
(a) To the fullest extent permitted by applicable law, the Guarantor shall
indemnify and hold harmless each Indemnified Person from and against any loss,
damage or claim incurred by such Indemnified Person by reason of any act or
omission performed or omitted by such Indemnified Person in good faith in
accordance with this Guarantee Agreement and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Guarantee Agreement, except that no Indemnified
Person shall be entitled to be indemnified in respect of any loss, damage or
claim incurred by such Indemnified Person by reason of negligence or willful
misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses (including
legal fees) incurred by an Indemnified Person in defending any claim, demand,
action, suit or proceeding shall, from time to time, be advanced by the
Guarantor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Guarantor of any undertaking by or on behalf of
the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
8.2(a).
ARTICLE IX
Miscellaneous
Section 9.1. Successors and Assigns.
----------------------
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Capital
Securities then outstanding.
Section 9.2. Amendments.
----------
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Guarantee Agreement may only be amended with the prior approval of the Holders
of at least 66-2/3% in liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all the outstanding Capital Securities. The provisions of Section 12.2 of the
Declaration with respect to
18
<PAGE>
meetings of Holders of the Trust Securities apply to the giving of such
approval.
Section 9.3. Notices.
-------
All notices provided for in this Guarantee Agreement shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail as follows:
(a) If given to the Capital Guarantee Trustee, at the Capital Guarantee
Trustee's mailing address set forth below (or such other address as
the Capital Guarantee Trustee may give notice of to the Holders of the
Capital Securities):
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, Illinois 60670-0126
Telecopy No. (312) 407-1708
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of
to the Holders of the Capital Securities):
Great Western Financial Corporation
9200 Oakdale Avenue
Chatsworth, California 91311
Telecopy No. (818) 775-3434
(c) If given to any Holder of Capital Securities, at the address set forth
in the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
Section 9.4. Benefit.
-------
This Guarantee Agreement is solely for the benefit of the Holders of
the Capital Securities and, subject to Section 3.1(a), is not separately
transferable from the Capital Securities.
19
<PAGE>
Section 9.5. Governing Law.
-------------
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
20
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Guarantee
Agreement to be executed by their respective officers thereunto duly authorized,
as of the day and year first above written.
GREAT WESTERN FINANCIAL CORPORATION
By:
-------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Capital Guarantee Trustee
By:
-------------------------------
Name:
Title:
21
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated January 18, 1996, appearing on page 88 of Great Western Financial
Corporation's Annual Report on Form 10-K for the year ended December 31, 1995.
We also consent to the reference to us under the heading "Experts" in such
Prospectus.
PRICE WATERHOUSE LLP
Los Angeles, California
January 20, 1997
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. NEITHER THIS PROSPECTUS SUPPLEMENT NOR THE PROSPECTUS TO +
+WHICH IT RELATES SHALL CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN +
+OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN +
+WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO +
+REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JANUARY 21, 1997
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JANUARY , 1997
$165,000,000
GREAT WESTERN FINANCIAL TRUST II
% CAPITAL SECURITIES, SERIES A
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
GREAT WESTERN FINANCIAL CORPORATION
-----------
The % Capital Securities, Series A (the "Capital Securities") offered hereby
represent preferred undivided beneficial interests in the assets of Great
Western Financial Trust II, 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 Capital Securities, the "Trust Securities")
representing undivided beneficial interests in the assets of the Trust. The
Trust exists for the sole purpose of issuing the Trust Securities and investing
the proceeds thereof in an equivalent amount of % Subordinated Deferrable
Interest Notes due 2027 (the "Subordinated Notes") of GWFC. The Subordinated
Notes will mature on , 2027, subject to GWFC's right to shorten the
maturity. Upon an event of a default under the Declaration (as defined herein),
the holders of Capital 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 CAPITAL SECURITIES.
-----------
THESE SECURITIES ARE NOT 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.
-----------
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
OFFERING PRICE(1) COMMISSION(2) TRUST(1)(3)(4)
----------------- ------------- ---------------
<S> <C> <C> <C>
Per Capital Security............ $1,000.00 (3) $1,000.00
Total........................... $165,000,000 (3) $165,000,000
</TABLE>
- -----
(1) Plus accrued distributions, if any, from the date of original issuance.
(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 Capital Securities
will be invested in Subordinated Notes of GWFC, GWFC has agreed to pay the
Underwriters as compensation for their arranging the investment therein of
such proceeds $ per Capital Security (or $ in the aggregate). See
"Underwriting."
(4) Before deducting estimated expenses of $ payable by GWFC.
-----------
The Capital 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 the Capital Securities will be ready for delivery in book-entry
form only through the facilities of The Depository Trust Company in New York,
New York, on or about January , 1997, against payment therefor in immediately
available funds.
<TABLE>
<S> <C>
GOLDMAN, SACHS & CO. MERRILL LYNCH & CO.
LEHMAN BROTHERS SMITH BARNEY INC.
</TABLE>
-----------
The date of this Prospectus Supplement is January , 1997.
<PAGE>
(continued from previous page)
Holders of the Capital Securities are entitled to receive cumulative cash
distributions at an annual rate of % of the liquidation amount of $1,000 per
Capital Security ("distributions"), accruing from the date of original
issuance and payable semi-annually in arrears on and of each year,
commencing , 1997 (each a "Distribution Date"). The first distribution will
be in an amount equal to $ per Capital Security. The payment of
distributions out of moneys held by the Trust and payments on liquidation of
the Trust or the redemption of Capital 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) and any other subordinated debt
(unless otherwise stated) of GWFC, which aggregated approximately $673 million
at September 30, 1996, 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, 1996, the subsidiaries of GWFC had total liabilities of
approximately $39.9 billion.
The distribution rate and the distribution and other payment dates for the
Capital 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 Capital 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 Capital 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 10 consecutive semi-annual periods (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 semi-annually, and during any Extension Period, holders
of Capital 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 Capital
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--
Interest Income and Original Issue Discount."
The Subordinated Notes are redeemable by GWFC, in whole or in part, from
time to time, on or after , 2007, or at any time in certain circumstances
upon the occurrence of a Tax Event (as defined herein) or in whole (but not in
part) for a limited time upon the occurrence of a Capital Treatment 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 $1,000 per Trust
Security plus accrued and unpaid distributions thereon and the related amount
of premium, if any, paid by GWFC upon the concurrent redemption of
Subordinated Notes (the "Redemption Price") to the date fixed for redemption.
See "Description of the Offered Capital Securities--Redemption." The Trust
Securities will be redeemed upon maturity of the Subordinated Notes. The
Subordinated Notes mature on , 2027, but the maturity date may be shortened
as described under "Description of the Subordinated Notes--Right to Shorten
Maturity." 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
S-2
<PAGE>
the holders of the Trust Securities, on a pro rata basis. See "Description of
the Offered Capital Securities--Special Event Redemption or Distribution" and
"Description of the Subordinated Notes."
GWFC will have the right at any time to terminate the Trust and cause the
Subordinated Notes to be distributed to the holders of the Capital Securities
in liquidation of the Trust. See "Description of Offered Capital Securities--
Liquidation of Trust and Distribution of Subordinated Notes to Holders." In
the event of the termination of the Trust, after satisfaction of liabilities
to creditors of the Trust as required by applicable law, the holders of the
Capital Securities will be entitled to receive a liquidation amount of $1,000
per Capital Security plus accumulated and unpaid distributions thereon to the
date of payment, which may be in the form of a distribution of such amount in
Subordinated Notes, subject to certain exceptions. See "Description of Offered
Capital Securities--Liquidation Distribution Upon Dissolution."
In the event of the involuntary or voluntary liquidation, dissolution,
winding up or termination of the Trust, the holders of the Trust Securities
will be entitled to receive for each Trust Security a liquidation amount of
$1,000 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 Capital Securities--Liquidation Distribution
Upon Dissolution."
The Capital Securities will be represented by global certificates registered
in the name of The Depository Trust Company ("DTC") or its nominee. Beneficial
interests in the Capital Securities will be shown on, and transfers thereof
will be effected only through, records maintained by participants in DTC.
Except as described in this Prospectus Supplement and in the accompanying
Prospectus, Capital Securities in certificated form will not be issued in
exchange for the global certificates. See "Book-Entry Only Issuance--The
Depositary Trust Company."
----------------
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 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 Capital 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 and
any other subordinated debt (unless otherwise stated) of GWFC and pari passu
with obligations to or rights of GWFC's other general unsecured creditors. As
of September 30, 1996, 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,
1996, such subsidiaries had total liabilities of approximately $39.9 billion.
There are no terms in the Capital 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.
The ability of the Trust to pay amounts on the Capital Securities is solely
dependent upon GWFC making payments on the Subordinated Notes as and when
required.
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 Capital Securities.
The Guarantee guarantees to the holders of the Capital Securities the
payment of (i) any accrued and unpaid distributions that are required to be
paid on the Capital 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 Capital
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 or premium, if any, 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 Capital
Securities or the redemption of all the Capital Securities), the lesser of (a)
the aggregate of the liquidation amount and all accrued and unpaid
distributions on the Capital 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 Capital
Securities in liquidation of the Trust. The holders of a majority in
liquidation amount of the Capital Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available
to the Guarantee Trustee 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 Capital Securities or otherwise, and, in
such event, holders of the Capital Securities would not be able to rely upon
the Guarantee for payment of such amounts. Instead, holders of the Capital
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 Capital 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 CAPITAL 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 Capital 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 or premium, if
any, on the Subordinated Notes on the date such interest or principal or
premium is otherwise payable, has occurred and is continuing, then a holder of
Capital Securities may directly institute a proceeding for enforcement of
payment to such holder directly of the principal of or premium, if any, or
interest on the Subordinated Notes having a principal amount equal to the
aggregate liquidation amount of the Capital Securities of such holder on or
after the respective due date specified in the Subordinated Notes. The holders
of Capital 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, semi-annual
distributions on the Capital Securities would be deferred (but despite such
deferral would continue to accrue with interest thereon compounded semi-
annually) 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 10 consecutive semi-annual periods. 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
the foregoing 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 10 consecutive semi-
annual periods. 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 Capital 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 Capital Securities will be required to accrue income (in the form of
original issue discount) in respect of its pro rata share of the Subordinated
Notes held by the Trust for United States federal income tax purposes. As a
result, a holder of Capital Securities will be required to include such income
in gross income for United States federal income tax purposes in advance of
the receipt of cash attributable to such income, and will not receive the cash
related to such income from the Trust if the holder disposes of the Capital
Securities prior to the record date for the payment of distributions. See
"Certain Federal Income Tax Consequences--Interest Income and Original Issue
Discount."
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 the likelihood of it exercising that right is remote. However,
should GWFC determine to exercise such right in the future, the market price
of the Capital Securities is likely to be affected. A holder that disposes of
its Capital Securities during an Extension Period,
S-5
<PAGE>
therefore, might not receive the same return on its investment as a holder
that continues to hold its Capital Securities. In addition, as a result of the
existence of GWFC's right to defer interest payments, the market price of the
Capital Securities (which represent an undivided beneficial interest in the
Subordinated Notes) may be more volatile than other securities to which such
rights do not apply.
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
Capital 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 Capital
Securities--Special Event Redemption or Distribution."
There can be no assurance as to the market prices for the Capital Securities
or the Subordinated Notes that may be distributed in exchange for Capital
Securities if a dissolution or liquidation of the Trust were to occur.
Accordingly, the Capital 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 Capital 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 Capital Securities. Because holders of
Capital Securities may receive Subordinated Notes upon the occurrence of a
Special Event, prospective purchasers of Capital 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 Capital
Securities--Special Event Redemption or Distribution" and "Description of the
Subordinated Notes."
See "Possible Tax Law Changes Affecting the Capital Securities" below for a
discussion of certain legislative proposals that, if adopted, could give rise
to a Tax Event, which may permit GWFC to cause a redemption of the Capital
Securities prior to , 2007 or to shorten the maturity of the Subordinated
Notes to a date not earlier than 19 1/2 years after the date of initial
issuance of the Subordinated Notes, which would result in the redemption of
the Capital Securities on such date.
CAPITAL TREATMENT EVENT REDEMPTION
Upon the occurrence and during the continuation of a Capital Treatment
Event, GWFC has the right to redeem the Subordinated Notes in whole (but not
in part) at any time within 90 days following the occurrence of such Capital
Treatment Event and thereby cause a mandatory redemption of the Capital
Securities.
A "Capital Treatment Event" means that 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 Capital 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
("Federal Reserve Board") as of the date of this Prospectus Supplement) or its
then equivalent ("Tier 1 Capital").
EXCHANGE OF CAPITAL SECURITIES FOR SUBORDINATED NOTES
GWFC will have the right at any time to terminate the Trust and after
satisfaction of liabilities to creditors of the Trust as required by
applicable law, to cause Subordinated Notes to be distributed to the holders
of the Capital Securities in exchange therefor upon liquidation of the Trust.
See "Description of Offered Capital Securities--Liquidation of Trust and
Distribution of Subordinated Notes to Holders."
S-6
<PAGE>
Under current United States federal income tax law and interpretations, a
distribution of the Subordinated Notes upon liquidation of the Trust should
not be a taxable event to holders of the Capital Securities. However, if a Tax
Event were to occur which would cause the Trust to be subject to United States
federal income tax with respect to income received or accrued on the
Subordinated Notes, a distribution of the Subordinated Notes by the Trust
could be a taxable event to the holders of the Capital Securities. See
"Certain Federal Income Tax Consequences--Receipt of Subordinated Notes or
Cash Upon Liquidation of the Trust."
LIMITED VOTING RIGHTS
Holders of Capital 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
GWFC and the Trust do not intend to have the Capital Securities listed on
any securities exchange. If the Underwriters do not make a market for the
Capital Securities, the liquidity of the Capital Securities could be adversely
affected. The Capital 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. Accordingly, the Capital Securities may trade
at a discount to the price that an investor paid to purchase the Capital
Securities offered hereby. To the extent the selling price is less than the
holder's adjusted tax basis, 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--Interest Income and Original Issue Discount"
and "--Sale of Capital Securities."
POSSIBLE TAX LAW CHANGES AFFECTING THE CAPITAL SECURITIES
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill") was
released which would have, among other things, generally denied interest
deductions for interest on an instrument issued by a corporation that has a
maximum weighted average maturity of more than 40 years. The Bill would also
have generally denied interest deductions for interest on an instrument issued
by a corporation that has a maximum term of more than 20 years and that is not
shown as indebtedness on the separate balance sheet of the issuer or, where
the instrument is issued to a related party (other than a corporation), where
the holder or some other related party issues a related instrument that is not
shown as indebtedness on the issuer's consolidated balance sheet. For purposes
of determining the weighted average maturity or the term of an instrument, any
right to extend would be treated as exercised. The above-described provisions
of the Bill were proposed to be effective generally for instruments issued on
or after December 7, 1995. If either provision were to apply to the
Subordinated Notes, GWFC would not be able to deduct interest on the
Subordinated Notes. However, on March 29, 1996, the Chairmen of the Senate
Finance and House Ways and Means Committees issued a joint statement (the
"Joint Statement") to the effect that it was their intention that the
effective date of the President's legislative proposals, if adopted, would be
no earlier than the date of appropriate Congressional action. In addition,
subsequent to the publication of the Joint Statement, Senator Daniel Patrick
Moynihan and Representatives Sam M. Gibbons and Charles B. Rangel wrote
letters to Treasury Department officials concurring with the view expressed in
the Joint Statement (the "Democrat Letters"). If the principles contained in
the Joint Statement and the Democrat Letters were enacted, such legislation
would not apply to the Subordinated Notes. Under current law, GWFC will be
able to deduct interest on the Subordinated Notes. There can be no assurance,
however, that current or future legislative proposals or final legislation
will not adversely affect the ability of GWFC to deduct interest on the
Subordinated Notes. Such a change could give rise to a Tax Event, which would
permit GWFC to cause a redemption of the Capital Securities before , 2007,
or to shorten the maturity of the Subordinated Notes to a period of not less
than 19 1/2 years from the date of initial issuance, which will result in
redemption of the Capital Securities as of such earlier maturity. See
"Description of the Subordinated Notes--Redemption," "Description of the
Offered Capital Securities--Mandatory Redemption" and "--Right to Shorten
Maturity," and "Certain Federal Income Tax Consequences--Possible Tax Law
Changes."
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, 1996 and
1995 and at September 30, 1996 and 1995. 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, 1996
are not necessarily indicative of the results to be expected for the full
year.
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPTEMBER 30,
------------------------
1996 1995
----------- -----------
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE
DATA AND RATIOS)
<S> <C> <C>
SUMMARY OF OPERATIONS
Interest income.................................... $ 2,432,384 $ 2,403,824
Interest expense................................... 1,389,378 1,452,536
Net interest income................................ 1,043,006 951,288
Provision for loan losses.......................... 123,071 137,400
Operating and administrative expenses(1)........... 956,574 736,829
Earnings before taxes on income.................... 181,090 268,555
Taxes on income.................................... 70,400 106,100
Net earnings(1).................................... 110,690 162,455
Fully diluted earnings per share................... .68 1.05
Cash dividends per common share.................... .73 .69
Ratio of earnings to fixed charges(2)
Excluding interest on deposits................... 1.34x 1.46x
Including interest on deposits................... 1.13x 1.18x
Ratio of earnings to fixed charges and preferred
stock dividends(2):
Excluding interest on deposits................... 1.27x 1.39x
Including interest on deposits................... 1.11x 1.16x
<CAPTION>
AT SEPTEMBER 30,
------------------------
1996 1995
----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
SUMMARY OF FINANCIAL CONDITION
Cash and securities................................ $ 2,011,912 $ 2,190,674
Loans receivable, net.............................. 30,760,376 29,633,224
Mortgage-backed securities......................... 8,593,389 10,532,266
Total assets....................................... 43,548,593 44,693,014
Deposits........................................... 28,852,700 29,432,176
Borrowings......................................... 10,874,586 11,591,999
Stockholders' equity............................... 2,616,781 2,654,299
</TABLE>
- --------
(1) Includes in 1996 a $188.4 million pre-tax charge with respect to a one-
time special assessment in connection with the recapitalization of the
Savings Association Insurance Fund.
(2) 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 deposits, 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 deposits, 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, 1996, and as adjusted to
reflect issuance of the Capital Securities and the application of the
estimated net proceeds therefrom immediately after the sale. 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, 1996
-----------------------
ACTUAL AS ADJUSTED
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Borrowings:
Federal Home Loan Bank.............................. $ 1,678,039 $ 1,678,039
Short-term debt..................................... 1,350,969 1,350,969
Long-term debt...................................... 3,258,933 3,258,933
Securities sold under agreement to repurchase....... 4,586,645 4,586,645
----------- -----------
Total borrowings.................................. 10,874,586 10,874,586
Company-obligated mandatorily redeemable preferred
securities of GWFC's subsidiary trust, holding solely
subordinated deferrable interest notes of GWFC(1).... 100,000 100,000
Company-obligated mandatorily redeemable capital
securities of GWFC's subsidiary trust, holding solely
subordinated deferrable interest notes of GWFC(2).... -- 165,000
Preferred stock....................................... 165,000 165,000
Common stockholders' equity........................... 2,451,781 2,451,781
----------- -----------
Total capitalization.............................. $13,591,367 $13,741,367
=========== ===========
</TABLE>
- --------
(1) The Company-obligated mandatorily redeemable preferred securities of
GWFC's subsidiary trust represents interests in such trust, the sole
assets of which are approximately $103,093,000 aggregate principal amount
of 8.25% subordinated deferred interest notes, due 2025, of GWFC.
(2) The Company-obligated mandatorily redeemable capital securities of GWFC's
subsidiary trust represents interests in the Trust, the sole assets of
which are approximately $ aggregate principal amount of %
subordinated deferrable interest notes, due 2027, of GWFC.
S-9
<PAGE>
ACCOUNTING TREATMENT
For financial reporting purposes, the Trust will be treated as a subsidiary
of GWFC and, accordingly, the accounts of the Trust will be included in the
consolidated financial statements of GWFC. All future reports of GWFC filed
under the Securities Exchange Act of 1934, as amended, will (i) reflect the
consolidation of the Trust into GWFC's consolidated financial statements, with
the $165 million of Capital Securities shown in GWFC's balance sheet as
Company-obligated mandatorily redeemable capital securities of GWFC's
subsidiary trust, holding solely subordinated deferrable interest notes of
GWFC, (ii) include in the financial statement footnotes of GWFC disclosure
that the sole assets of the Trust will be approximately $ million aggregate
principal amount of % Subordinated Deferrable Interest Notes of GWFC due
2027, and (iii) if Staff Accounting Bulletin 53 treatment is sought, include
in a footnote to the audited financial statements disclosure that the Trust is
wholly owned, that the sole assets of the Trust are the Subordinated Notes
(specifying the principal amount, interest rate and maturity date of the
Subordinated Notes held), and that the Guarantee, taken together with GWFC's
obligation under the Subordinated Notes, the Subordinated Indenture and the
Declaration, provides a full and unconditional guarantee on a subordinated
basis by GWFC of payments due on the Capital Securities issued by the Trust.
REASON FOR TRANSACTION
On October 21, 1996, the Federal Reserve Board issued a press release (the
"Federal Reserve Press Release") announcing that it had approved the use of
certain cumulative preferred stock instruments, such as the Capital
Securities, as "Tier 1 Capital" for purposes of the Federal Reserve Board's
capital guidelines for bank holding companies. GWFC is not currently subject
to those capital guidelines but GWFC (or its successor) may become subject to
those or similar capital guidelines in the future. In that event GWFC (or its
successor) intends to treat the Capital Securities as Tier 1 Capital and,
since under current United States federal income tax law, the Capital
Securities will receive a tax deduction for interest in respect of the
Subordinated Notes, the issuance of the Capital Securities is a cost effective
method of raising capital on an after-tax basis.
USE OF PROCEEDS
All of the proceeds from the sale of the Capital 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 or to fund the redemption of
GWFC's 8.30% Cumulative Preferred Stock on or after November 1, 1997.
S-10
<PAGE>
DESCRIPTION OF THE OFFERED CAPITAL SECURITIES
The Capital 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 Capital
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 Capital 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. The Capital
Securities are referred to as Preferred Securities in the accompanying
Prospectus.
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 Capital 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 Capital 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 Capital 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 Capital Securities. The Guarantee does not cover payment of
distributions when the Trust does not have sufficient available funds to pay
such distributions.
The Capital 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 Capital Securities will be fixed at a rate per annum of
% of the stated liquidation amount of $1,000 per Capital Security.
Distributions in arrears for more than one semi-annual period will bear
interest thereon at the rate per annum of % compounded semi-annually. 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 semi-annual period, on the basis of the actual
number of days elapsed per 30-day month).
Distributions on the Capital Securities will be cumulative, will accrue from
January , 1997, and will be payable semi-annually in arrears on and
of each year to the holders of record on the applicable record date,
commencing , 1997, when, as and if available for payment, except as
otherwise described below. The first distribution will be in an amount equal
to $ per Capital Security.
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
semi-annual distributions on the Capital Securities (though such distributions
would continue to accrue with interest thereon, compounded semi-annually (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
S-11
<PAGE>
10 consecutive semi-annual periods. 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 10
consecutive semi-annual periods. 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. 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 Capital 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 Capital 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 Capital 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 Capital 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 Capital 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 Capital 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 Capital 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.
REDEMPTION
The Subordinated Notes will mature on , 2027, unless shortened as
described under "Right to Shorten Maturity" below, and may be redeemed, (i) in
whole or in part, at any time on or after , 2007, or (ii) at any time in
certain circumstances upon the occurrence of a Tax Event or in whole (but not
in part) for a limited time upon the occurrence of a Capital Treatment 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."
S-12
<PAGE>
The Redemption Price, in the case of a redemption under (i) above or, on or
after , 2007, under (ii) above, shall equal the following prices,
expressed in percentages of the liquidation amount, together with accumulated
distributions to the redemption date, if redeemed during the 12-month period
beginning :
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
2007........................................................... %
2008...........................................................
2009...........................................................
2010...........................................................
2011...........................................................
2012...........................................................
2013...........................................................
2014...........................................................
2015...........................................................
2016...........................................................
</TABLE>
and at 100% on or after , 2017.
The Redemption Price, in the case of a redemption prior to , 2007,
following a Tax Event or Capital Treatment Event as described under (ii)
above, will equal for each Capital Security the Make-Whole Amount for a
corresponding $1,000 principal amount of Subordinated Notes together with
accumulated distributions to the redemption date. The "Make-Whole Amount" will
be equal to the greater of (i) 100% of the principal amount of such
Subordinated Notes or (ii) as determined by a Quotation Agent (as defined
below), the sum of the present values of the principal amount and premium
payable as part of the Redemption Price with respect to an optional redemption
of such Subordinated Notes on , 2007, together with the present values of
the scheduled payments of interest from the redemption date to , 2007 (the
"Remaining Life"), in each case discounted to the redemption date on a semi-
annual basis (assuming a 360-day year consisting of twelve 30-day months) at
the Adjusted Treasury Rate (as defined below).
"Adjusted Treasury Rate" means, with respect to any redemption date, the
Treasury Rate (as defined below) plus (i) . % if such redemption date occurs
on or before , 1998 or (ii) . % if such Redemption Date occurs after ,
1998.
"Quotation Agent" means Goldman, Sachs & Co. and its successors; provided,
however, that if the foregoing shall cease to be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer"), GWFC shall
substitute therefor another Primary Treasury Dealer.
"Treasury Rate" means, with respect to any redemption date, (i) the yield,
under the heading which represents the average for the week immediately prior
to the calculation date, appearing in the most recently published statistical
release designated "H.15(519)" or any successor publication which is published
weekly by the Board of Governors of the Federal Reserve System and which
establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant
Maturities," for the maturity corresponding to the Remaining Life (if no
maturity is within three months before or after the Remaining Life, yields for
the two published maturities most closely corresponding to the Remaining Life
shall be determined and the Treasury Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding to the
nearest month) or (ii) if such release (or any successor release) is not
published during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such redemption date. The
calculation date shall be the third Business Day preceding the redemption
date.
S-13
<PAGE>
"Comparable Treasury Issue" means, with respect to any redemption date, the
United States Treasury security selected by the Quotation Agent as having a
maturity comparable to the Remaining Life that would be utilized, at the time
of selection and in accordance with customary financial practice, in pricing
new issues of corporate debt securities of comparable maturity to the
Remaining Life. If no United States Treasury security has a maturity which is
within a period from three months before to three months after , 2007, the
two most closely corresponding United States Treasury securities shall be used
as the Comparable Treasury Issue, and the Treasury Rate shall be interpolated
or extrapolated on a straight-line basis, rounding to the nearest month using
such securities.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of five Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (ii) if the Indenture Trustee obtains fewer than five such
Reference Treasury Dealer Quotations, the average of all such quotations.
"Reference Treasury Dealer" means (i) the Quotation Agent and (ii) any other
Primary Treasury Dealer selected by the Indenture Trustee after consultation
with GWFC.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Indenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted
in writing to the Indenture Trustee by such Reference Treasury Dealer at 5:00
p.m., New York City time, on the third Business Day preceding such redemption
date.
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 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
S-14
<PAGE>
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.
After the date for any distribution of Subordinated Notes upon dissolution
of the Trust, (i) the Capital Securities and Guarantee will no longer be
deemed to be outstanding, (ii) the depositary or its nominee, as the record
holder of the Capital Securities, will receive a registered global certificate
or certificates representing the Subordinated Notes to be delivered upon such
distribution and (iii) any certificates representing Capital 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 Capital 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 Capital Securities
or the Subordinated Notes that may be distributed in exchange for the Capital
Securities if a dissolution and liquidation of the Trust were to occur.
Accordingly, the Capital 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 Capital Securities.
CAPITAL TREATMENT EVENT REDEMPTION
Upon the occurrence and during the continuation of a Capital Treatment
Event, GWFC has the right to redeem the Subordinated Notes in whole (but not
in part) at any time within 90 days following the occurrence of such Capital
Treatment Event and thereby cause a mandatory redemption of the Capital
Securities. See "Redemption" above.
RIGHT TO SHORTEN MATURITY
If a Tax Event occurs which relates to the deductibility of interest payable
by GWFC on the Subordinated Notes, and if the Redemption Tax Opinion relating
to such Tax Event states that the risk of non-deductibility would be avoided
if the maturity of the Subordinated Notes were shortened, GWFC shall have the
right to shorten the maturity of the Subordinated Notes by the amount stated
in such opinion to be the minimum extent required in order to avoid such risk,
but in no event may GWFC shorten the maturity of the Subordinated Notes to a
stated maturity of less than 19 1/2 years from the date of initial issuance.
In such event, the Capital Securities would be redeemed as of such earlier
stated maturity of the Subordinated Notes. In addition, upon the exercise of
the right to shorten the maturity of the Subordinated Notes, GWFC will no
longer have the right to redeem
S-15
<PAGE>
the Subordinated Notes prior to the new stated maturity upon the occurrence of
a Tax Event or to further shorten the maturity of the Subordinated Notes.
REDEMPTION PROCEDURES
The Trust may not redeem fewer than all of the outstanding Capital
Securities unless all accrued and unpaid distributions have been paid on all
Capital Securities for all semi-annual distribution periods terminating on or
prior to the date of redemption.
If the Trust gives a notice of redemption in respect of Capital 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 Capital 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
Capital Securities so called for redemption will cease, except the right of
the holders of such Capital Securities to receive the Redemption Price but
without interest on such Redemption Price. In the event that any date fixed
for redemption of Capital Securities is not a Business Day, then payment of
the Redemption Price payable on such date will be made on the next succeeding
day 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 Capital
Securities is improperly withheld or refused and not paid either by the Trust,
or by GWFC pursuant to the Guarantee, distributions on such Capital 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 Capital Securities are
to be redeemed, the Capital Securities will be redeemed pro rata as described
below under "Book-Entry Only Issuance--The Depository Trust Company."
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 Capital 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 OF TRUST AND DISTRIBUTION OF SUBORDINATED NOTES TO HOLDERS
GWFC will have the right at any time to liquidate the Trust and cause
Subordinated Notes to be distributed to the holders of the Capital Securities
in exchange therefor upon liquidation of the Trust.
Under current United States federal income tax law, a distribution of
Subordinated Notes in exchange for Capital Securities should not be a taxable
event to holders of the Capital Securities. Should there be a change in law, a
change in legal interpretation, a Tax Event or other circumstances, however,
the distribution of the Subordinated Notes could be a taxable event to holders
of the Capital Securities. See "Certain Federal Income Tax Consequences--
Receipt of Subordinated Notes or Cash Upon Liquidation of the Trust." If GWFC
elects neither to redeem the Subordinated Notes prior to maturity nor to
liquidate the Trust and distribute the Notes to holders of the Capital
Securities in exchange therefor, the Capital Securities will remain
outstanding until the stated maturity of the Subordinated Notes.
If GWFC elects to liquidate the Trust and thereby causes the Subordinated
Notes to be distributed to holders of the Capital Securities in exchange
therefor upon liquidation of the Trust, GWFC shall continue to have the
S-16
<PAGE>
right to shorten the maturity of the Subordinated Notes, subject to certain
conditions as described under "Description of the Subordinated Notes--Right to
Shorten Maturity."
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 Capital 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 liquidation amount of $1,000 per Capital
Security plus accrued and unpaid distributions thereon to the date of payment
(the "Liquidation Distribution"), unless, in connection with such Liquidation,
Subordinated Notes in an aggregate stated principal or liquidation amount, as
applicable, equal to the aggregate stated liquidation amount of the Capital
Securities, with accrued and unpaid interest or dividends, as the case may be,
equal to accrued and unpaid distributions on the Capital Securities, have been
distributed on a pro rata basis to the holders of the Capital Securities in
exchange for such Capital 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 Capital 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 Capital Securities, except
that if a Declaration Event of Default has occurred and is continuing, the
Capital Securities shall have a preference over the Common Securities with
regard to such distributions.
Pursuant to the Declaration, the Trust shall terminate (i) on March 31,
2052, 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, (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
Capital Securities have been cured, waived or otherwise eliminated. Until such
Declaration Events of Default with respect to the Capital 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 Capital Securities and
only the holders of the Capital 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, premium, if any, 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 or premium, if any, on the
Subordinated Notes on the date such interest or principal or premium, if any,
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, premium, if any, or interest
S-17
<PAGE>
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.
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 Capital 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 Capital
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 Capital 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 Capital 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 Capital Securities may be
given at a separate meeting of holders of Capital 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 Capital Securities are entitled to vote, or of any matter
upon which action by written consent of such holders is to be taken, to be
mailed to each holder of record of Capital Securities. Each such notice will
include a statement
S-18
<PAGE>
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 Capital Securities will be required for the Trust to redeem
and cancel Capital Securities or distribute Subordinated Notes in accordance
with the Declaration. The Regular Trustees shall be obligated to call a
meeting of the holders of the Capital Securities if directed to do so by the
holders of at least 10% in liquidation amount of the Capital Securities
requesting such meeting in accordance with the terms of the Declaration.
Notwithstanding that holders of Capital Securities are entitled to vote or
consent under any of the circumstances described above, any of the Capital
Securities that are owned 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 Capital Securities
were not outstanding.
The procedures by which holders of Capital Securities may exercise their
voting rights are described below. See "Book-Entry Only Issuance--The
Depository Trust Company" below.
Holders of the Capital 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 Capital 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 Capital 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) such
S-19
<PAGE>
merger, consolidation, amalgamation or replacement does not cause the Capital
Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (iv) 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), (v) such
successor entity has a purpose identical to that of the Trust, (vi) 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 (vii) 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 Capital 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 Capital 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 Capital Securities. The Capital 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 Capital Securities
certificates, representing the total aggregate number of Capital 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 Capital 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.
Purchases of Capital Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Capital
Securities on DTC's records. The ownership interest of each actual
S-20
<PAGE>
purchaser of each Capital 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 Capital Securities. Transfers of ownership interests in the Capital
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 Capital Securities,
except in the event that use of the book-entry system for the Capital
Securities is discontinued.
To facilitate subsequent transfers, all the Capital Securities deposited by
Participants with DTC are registered in the name of DTC's nominee, Cede & Co.
The deposit of Capital 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 Capital Securities. DTC's records
reflect only the identity of the Direct Participants to whose accounts such
Capital 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
Capital Securities are being redeemed, DTC will reduce the amount of the
interest of each Direct Participant in such Capital Securities in accordance
with its procedures; provided that if, as a result of such redemption, Direct
Participants would hold fractional interests in the Capital 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 Capital Securities is limited, in those
cases where a vote is required, neither DTC nor Cede & Co. will itself consent
or vote with respect to Capital 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 Capital 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 Capital 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 Capital Security
certificate will not be entitled to receive physical delivery of Capital
Securities. Accordingly, each Beneficial Owner must rely on the procedures of
DTC to exercise any rights under the Capital Securities.
DTC may discontinue providing its services as securities depositary with
respect to the Capital Securities at any time by giving reasonable notice to
the Trust. Under such circumstances, in the event that a successor
S-21
<PAGE>
securities depositary is not obtained, Capital 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
Capital Securities. In that event, certificates for the Capital 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 Capital 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 Capital 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 Capital 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 Capital Securities after such Capital Securities have been called
for redemption.
GOVERNING LAW
The Declaration and the Capital 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 Capital Securities.
Holders of the Capital Securities have no preemptive rights.
S-22
<PAGE>
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, a Second Supplemental
Indenture, dated as of December 6, 1995, and the Third Supplemental Indenture,
dated as of January , 1997 (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, Subordinated Notes may be distributed to the
holders of the Trust Securities in liquidation of the Trust. See "Description
of the Offered Capital Securities--Special Event Redemption or Distribution"
and "--Liquidation of Trust and Distribution of Subordinated Notes to
Holders."
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 $ , such amount being the sum of the aggregate stated
liquidation amount of the Capital 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 , 2027, subject to the election of GWFC
to shorten the maturity as described under "Right to Shorten Maturity" below.
If Subordinated Notes are distributed to holders of Capital Securities in
liquidation of such holders' interests in the Trust, such Subordinated Notes
will initially be issued as a Global Security (as defined below). As described
herein, under certain limited circumstances, 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 are
issued in certificated form, such Subordinated Notes will be in denominations
of $1,000 and integral multiples thereof and may be transferred or exchanged
at the offices described below. Payments on Subordinated Notes 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. In
the event Subordinated Notes are issued in certificated form, principal and
interest will be payable, the transfer of the Subordinated Notes will be
registrable and Subordinated Notes will be exchangeable for Subordinated Notes
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
Each Subordinated Note shall bear interest at the rate of % per annum (the
"Original Coupon Rate") from the original date of issuance, payable semi-
annually in arrears on and
S-23
<PAGE>
of each year (each, an "Interest Payment Date"), commencing , 1997,
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.
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 semi-annual 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 charges 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.
RIGHT TO SHORTEN MATURITY
If a Tax Event occurs which relates to the deductibility of interest payable
by GWFC on the Subordinated Notes, and if the Redemption Tax Opinion relating
to such Tax Event states that the risk of non-deductibility would be avoided
if the maturity of the Subordinated Notes were shortened, GWFC shall have the
right to shorten the maturity of the Subordinated Notes by the amount stated
in such opinion to be the minimum extent required in order to avoid such risk,
but in no event may GWFC shorten the maturity of the Subordinated Notes to a
stated maturity of less than 19 1/2 years from the date of initial issuance.
In such event, the Capital Securities would be redeemed as of such earlier
stated maturity of the Subordinated Notes. In addition, upon the exercise of
the right to shorten the maturity of the Subordinated Notes, GWFC will no
longer have the right to redeem the Subordinated Notes prior to the new stated
maturity upon the occurrence of a Tax Event or to further shorten the maturity
of the Subordinated Notes.
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 10 consecutive semi-annual
periods. 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 semi-annually ("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
S-24
<PAGE>
such Extension Period together with all such previous and further extensions
thereof may not exceed 10 consecutive semi-annual periods 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 Capital
Securities are payable or (ii) the date the Regular Trustees are required to
give notice to holders of the Capital 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 Capital
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 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, (i) in whole or
in part, from time to time, on or after , 2007, or (ii) at any time in
certain circumstances upon the occurrence of a Tax Event or in whole (but not
in part) for a limited time upon the occurrence of a Capital Treatment Event
as described under "Description of the Offered Capital Securities--Special
Event Redemption or Distribution" and "--Capital Treatment Event Redemption,"
upon not less than 30 nor more than 60 days' notice, at the Redemption Price
described below.
The Redemption Price for the Subordinated Notes in the case of a redemption
under (i) above or, on or after , 2007, under (ii) above, shall equal the
following prices, expressed in percentages of the principal amount, plus any
accrued and unpaid interest, including any Compound Interest and Additional
Interest, to the date fixed for redemption, if redeemed during the 12-month
period beginning :
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
2007........................................................... %
2008...........................................................
2009...........................................................
2010...........................................................
2011...........................................................
2012...........................................................
2013...........................................................
2014...........................................................
2015...........................................................
2016...........................................................
</TABLE>
and at 100% on or after , 2017.
The Redemption Price for the Subordinated Notes, in the case of a redemption
prior to , 2007 following a Tax Event or Capital Treatment Event, as
described under (ii) above, will equal the Make-Whole Amount (as defined under
"Description of Capital Securities--Redemption"), plus any accrued interest,
including any Compound Interest and Additional Interest, to the date fixed for
redemption.
S-25
<PAGE>
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
Notes will also be subordinated to all other subordinated debt (unless
otherwise stated) of GWFC, other than subordinated debt issued to trusts
similar to the Trust. The Subordinated Indenture does not limit the aggregate
amount of Senior Indebtedness which may be issued by GWFC. As of September 30,
1996, 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, 1996, such subsidiaries had
total liabilities of approximately $39.9 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, except in connection with the distribution
of 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 or
premium, if any, of any of the Subordinated Notes when due; (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,
S-26
<PAGE>
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 Capital 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 Capital Securities--
Declaration Events of Default" and "--Voting Rights."
BOOK-ENTRY AND SETTLEMENT
If distributed to holders of Capital 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, the Subordinated Notes 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
represented by the Global Security will not be exchangeable for, and will not
otherwise be issuable as, Subordinated Notes 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 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 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 are distributed to holders of Capital Securities in
liquidation of such holders' interests in the Trust, DTC will act as
securities depositary for the Subordinated Notes. For a description of DTC and
the specific terms of the depositary arrangements, see "Description of the
Offered Capital Securities--Book-Entry Only Issuance--The Depository Trust
Company." As of the date of this Prospectus Supplement, the description
S-27
<PAGE>
herein of DTC's book-entry system and DTC's practices as they relate to
purchases, transfers, notices and payments with respect to the Capital
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 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 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 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.
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 Capital 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 Capital 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 Capital 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 Capital Securities,
S-28
<PAGE>
using the procedures described in "Description of the Offered Capital
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 Capital Securities may direct the
Guarantee Trustee to enforce its rights thereunder. Any holder of Capital
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, irrevocable and unconditional guarantee on a subordinated basis by GWFC
of payments due on the Capital Securities. See "Description of Guarantee--
General" in the accompanying Prospectus.
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 Capital
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
Capital Securities held as capital assets and (i) 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, (ii) does not include any description of the tax laws of any state or
local government or of any foreign government that may be applicable to the
Capital Securities, and (iii) does not deal with persons holding Capital
Securities as part of a position in a "straddle" or as part of a "hedging,"
"conversion" or other integrated investment transaction for federal income tax
purposes. This discussion also does not deal with holders other than the
original purchasers of the Capital Securities or with holders who are not U.S.
Holders (as defined below). Persons considering the purchase of the Capital
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 Capital
Securities arising under the laws of any other taxing jurisdiction.
As used herein, the term "U.S. Holder" means a beneficial owner of a Capital
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 Capital
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
Capital Security that is not a U.S. Holder.
CLASSIFICATION OF THE TRUST
In connection with the issuance of the Capital Securities, O'Melveny & Myers
LLP, 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 Capital 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 its pro rata share of the interest
income, including original issue discount (as described below), paid or
accrued with respect to its undivided interest in those Subordinated Notes
whether or not cash is actually distributed to the U.S. Holder. See "Interest
Income and Original Issue Discount."
S-29
<PAGE>
CLASSIFICATION OF THE SUBORDINATED NOTES
In connection with the issuance of the Subordinated Notes, O'Melveny & Myers
LLP, 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 Subordinated
Indenture (and certain other documents), and based on certain facts and
assumptions contained in such opinion, the Subordinated Notes held by the
Trust will be classified for United States federal income tax purposes as
indebtedness of GWFC. By acceptance of a Capital Security, each holder
covenants to treat the Subordinated Notes as indebtedness and the Capital
Securities as evidence of an indirect beneficial ownership in the Subordinated
Notes.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under recently issued Treasury regulations applicable to debt instruments
issued on or after August 13, 1996 (the "Regulations"), a "remote" contingency
that stated interest will not be timely paid will be ignored in determining
whether a debt instrument is issued with original issue discount ("OID"). GWFC
believes that the likelihood of its exercising its option to defer payments is
remote. Based on the foregoing, GWFC believes that the Subordinated Notes will
not be considered to be issued with OID at the time of their original issuance
and, accordingly, a holder of a Capital Security should include in gross
income such holder's allocable share of interest on the Subordinated Notes.
Under the Regulations, if GWFC exercised its option to defer any payment of
interest, the Subordinated Notes would at that time be treated as issued with
OID, and all stated interest on the Subordinated Notes would thereafter be
treated as OID as long as the Subordinated Notes remained outstanding. In such
event, all of a holder's taxable interest income with respect to the
Subordinated Notes would be accounted for as OID on an economic accrual basis
regardless of such holder's method of tax accounting, and actual distributions
of stated interest would not be reported as taxable income. Consequently, a
holder would be required to include in gross income OID even though GWFC would
not make any actual cash payments during an Extension Period.
The Regulations have not been addressed in any rulings or other
interpretations by the Internal Revenue Service (the"IRS"), and it is possible
that the IRS could take a position contrary to the interpretation herein.
Subsequent uses of the term "interest" in this summary include income in the
form of OID.
Corporate U.S. Holders of Capital Securities will not be entitled to a
dividends received deduction with respect to any income recognized with
respect to the Capital Securities.
MARKET DISCOUNT AND BOND PREMIUM
U.S. Holders of Capital Securities, other than U.S. Holders who purchased
the Capital 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 Capital Securities.
RECEIPT OF SUBORDINATED NOTES OR CASH UPON LIQUIDATION OF THE TRUST
Under certain circumstances, as described under the captions "Description of
the Offered Capital Securities--Special Event Redemption or Distribution," and
"--Liquidation of Trust and Distribution of Subordinated Notes to Holders,"
Subordinated Notes may be distributed to U.S. Holders in exchange for the
Capital 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 Capital 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 Capital Securities were held by such U.S.
Holder.
S-30
<PAGE>
If, however, the liquidation of the Trust were to occur because the Trust is
subject to United States federal income tax with respect to income accrued or
received on the Subordinated Notes, the distribution of the Subordinated Notes
to holders of Capital Securities by the Trust would be a taxable event to the
Trust and each holder, and the holder would recognize gain or loss as if the
holder had exchanged its Capital Securities for the Subordinated Notes it
received upon the liquidation of the Trust. A holder of Capital Securities
will include interest in income in respect of Subordinated Notes received from
the Trust in the manner described above under "Interest Income and Original
Issue Document."
Under certain circumstances described herein (see "Description of the
Offered Capital Securities"), the Subordinated Notes may be redeemed for cash
and the proceeds of such redemption distributed to U.S. Holders in redemption
of their Capital Securities. Under current law, such a redemption would, for
United States federal income tax purposes, constitute a taxable disposition of
the redeemed Capital Securities, and a U.S. Holder would recognize gain or
loss as if it sold such redeemed Capital Securities for cash. See "Sales of
Capital Securities" below.
SALES OF CAPITAL SECURITIES
A holder that sells (including a redemption for cash) Capital Securities
will recognize gain or loss equal to the difference between its adjusted tax
basis in the Capital Securities and the amount realized on the sale of such
Capital Securities. Assuming that GWFC does not exercise its option to defer
payment of interest on the Subordinated Notes, and the Capital Securities are
not considered issued with OID, a holder's adjusted tax basis in the Capital
Securities generally will be its initial purchase price. If the Subordinated
Notes are deemed to be issued with OID as a result of GWFC's deferral of any
interest payment or otherwise, a holder's tax basis in the Capital Securities
generally will be its initial purchase price, increased by OID previously
includible in such holder's gross income to the date of disposition and
decreased by distributions or other payments received on the Capital
Securities since and including the date of the first Extension Period. Such
gain or loss generally will be a capital gain or loss (except to the extent
any amount realized is treated as a payment of accrued interest with respect
to such holder's pro rata share of the Subordinated Notes required to be
included in income) and generally will be long-term capital gain or loss if
the Capital Securities have been held for more than one year.
Should GWFC exercise its option to defer any payment of interest on the
Subordinated Notes, the Capital Securities may trade at a price that does not
accurately reflect the value of accrued but unpaid interest with respect to
the underlying Subordinated Notes. In the event of such a deferral, a holder
who disposes of its Capital Securities between record dates for payments of
distributions thereon will be required to include in income as ordinary income
accrued but unpaid interest on the Subordinated Notes to the date of
disposition as OID and to add such amount to its adjusted tax basis in its 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, such
holder will recognize a capital loss. Subject to certain limited exceptions,
capital losses cannot be applied to offset ordinary income for United States
federal income tax purposes.
INFORMATION REPORTING TO U.S. HOLDERS
Income on the Capital Securities will be reported to U.S. Holders on Forms
1099, which forms should be mailed to U.S. Holders of Capital 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.
S-31
<PAGE>
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.
POSSIBLE TAX LAW CHANGES
On March 19, 1996, President Clinton proposed the Bill, which would have,
among other things, generally denied corporate issuers a deduction for
interest in respect of certain debt obligations, such as the Subordinated
Notes issued on or after December 7, 1995. On March 29, 1996, Senate Finance
Committee Chairman William V. Roth, Jr. and House Ways and Means Committee
Chairman Bill Archer issued the joint statement, which indicated their intent
that the Bill, if adopted by either of the tax-writing committees of Congress,
would have an effective date that is no earlier than the date of "appropriate
Congressional action." In addition, Senator Daniel Patrick Moynihan and
Representatives Sam M. Gibbons and Charles B. Rangel wrote the Democrat
Letters, which supported the view expressed in the Joint Statement. Based upon
the Joint Statement, it is expected that if the Bill were to be enacted, such
legislation would not apply to the Subordinated Notes. There can be no
assurances, however, that the effective date guidance contained in the Joint
Statement and Democrat Letters will be incorporated into the Bill, if enacted,
or that other legislation enacted after the date hereof will not otherwise
adversely affect the ability of GWFC to deduct the interest payable on the
Subordinated Notes. Accordingly, there can be no assurance that a Tax Event
will not occur. See "Description of the Offered Capital Securities--Special
Event Redemption or Distribution" and "Risk Factors--Possible Tax Law Changes
Affecting the Capital Securities."
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 CAPITAL 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.
CERTAIN ERISA CONSIDERATIONS
Each fiduciary of a pension, profit-sharing or other employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA") (a "Plan"), should consider the fiduciary standards of ERISA in the
context of the Plan's particular circumstances before authorizing an
investment in the Capital Securities. Accordingly, among other factors, the
fiduciary should consider whether the investment would satisfy the prudence
and diversification requirements of ERISA and would be consistent with the
documents and instruments governing the Plan.
Section 406 of ERISA and Section 4975 of the Code prohibit Plans, as well as
individual retirement accounts and Keogh plans subject to Section 4975 of the
Code (also "Plans"), from engaging in certain transactions involving "plan
assets" with persons who are "parties in interest" under ERISA or
"disqualified persons" under the Code ("Parties in Interest") with respect to
such Plan. A violation of these "prohibited transaction" rules may result in
an excise tax or other liabilities under ERISA and/or Section 4975 of the Code
for such persons, unless exemptive relief is available under an applicable
statutory or administrative exemption. Employee benefit plans that are
governmental plans (as defined in Section 3(32) of ERISA), certain church
plans (as defined in Section 3(33) of ERISA) and foreign plans (as described
in Section 4(b)(5) of ERISA) are not subject to the requirements of ERISA or
Section 4975 of the Code.
S-32
<PAGE>
Under a regulation (the "Plan Assets Regulation") issued by the U.S.
Department of Labor (the "DOL"), the assets of the Trust would be deemed to be
"plan assets" of a Plan for purposes of ERISA and Section 4975 of the Code if
"plan assets" of the Plan were used to acquire an equity interest in the Trust
and no exception were applicable under the Plan Assets Regulation. An "equity
interest" is defined under the Plan Assets Regulation as any interest in an
entity other than an instrument which is treated as indebtedness under
applicable local law and which has no substantial equity features and
specifically includes a beneficial interest in a trust.
Pursuant to an exception contained in the Plan Assets Regulation, the assets
of the Trust would not be deemed to be "plan assets" of investing Plans if,
immediately after the most recent acquisition of any equity interest in the
Trust, less than 25% of the value of each class of equity interests in the
Trust were held by Plans, other employee benefit plans not subject to ERISA or
Section 4975 of the Code (such as governmental, church and foreign plans), and
entities holding assets deemed to be "plan assets" of any Plan (collectively,
"Benefit Plan Investors"), or if the Capital Securities were "publicly-offered
securities" for purposes of the Plan Assets Regulation. No assurance can be
given that the value of the Capital Securities held by Benefit Plan Investors
will be less than 25% of the total value of such Capital Securities at the
completion of the initial offering or thereafter, and no monitoring or other
measures will be taken with respect to the satisfaction of the conditions to
this exception. In addition, the Capital Securities may be "publicly-offered
securities" under the Plan Assets Regulation if they are widely held (i.e.,
held by 100 or more investors independent of the Trust and each other) and
freely transferable; no assurance can be given that these conditions will be
met. All of the Common Securities will be purchased and initially held by
GWFC.
Certain transactions involving the Trust could be deemed to constitute
direct or indirect prohibited transactions under ERISA and Section 4975 of the
Code with respect to a Plan if the Capital Securities were acquired with "plan
assets" of such Plan and the assets of the Trust were deemed to be "plan
assets" of Plans investing in the Trust. For example, if GWFC is a Party in
Interest with respect to an investing Plan (either directly or by reason of
its ownership of its subsidiaries), extensions of credit between GWFC and the
Trust (as represented by the Subordinated Notes and the Guarantee) would
likely be prohibited by Section 406(a)(1)(B) of ERISA and Section
4975(c)(1)(B) of the Code, unless exemptive relief were available under an
applicable administrative exemption (see below). In addition, if GWFC were
considered to be a fiduciary with respect to the Notes as a result of certain
powers it holds (such as the powers to remove and replace the Property
Trustee), certain operations of the Notes, including the optional redemption
of the Subordinated Notes, could be considered to be prohibited transactions
under Section 406(b) of ERISA and Section 4975(c)(1)(E) of the Code. In
addition, each investing plan, by purchasing the Capital Securities, will be
deemed to have directed the Trust to invest in the Subordinated Notes, to have
appointed the Property Trustee, and to have agreed that GWFC is not a
fiduciary with respect to such plan's interest in the Capital Securities.
The DOL has issued five prohibited transaction class exemptions ("PTCEs")
that may provide exemptive relief if required for direct or indirect
prohibited transactions that may arise from the purchase or holding of the
Capital Securities if assets of the Trust were deemed to be "plan assets" of
Plans investing in the Trust as described above. Those class exemptions are
PTCE 96-23 (for certain transactions determined by in-house asset managers),
PTCE 95-60 (for certain transactions involving insurance company general
accounts), PTCE 91-38 (for certain transactions involving bank collective
investment funds), PTCE 90-1 (for certain transactions involving insurance
company separate accounts), and PTCE 84-14 (for certain transactions
determined by independent qualified asset managers).
Because the Capital Securities may be deemed to be equity interests in the
Trust for purposes of applying ERISA and Section 4975 of the Code, the Capital
Securities may not be purchased or held by any Plan, any entity whose
underlying assets include "plan assets" by reason of any Plan's investment in
the entity (a "Plan Asset Entity") or any person investing "plan assets" of
any Plan, unless such purchaser or holder is eligible for the exemptive relief
available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or another applicable
exemption. Any purchaser or holder of the Capital Securities or any interest
therein will be deemed to have represented by its purchase and holding thereof
that it either (a) is not a Plan or (b) is eligible for the exemptive relief
available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or another applicable
exemption with respect to such purchase
S-33
<PAGE>
or holding. If a purchaser or holder of the Capital Securities that is a Plan
or a Plan Asset Entity elects to rely on an exemption other than PTCE 96-23,
95-60, 91-38, 90-1 or 84-14, GWFC and the Trust may require a satisfactory
opinion of counsel or other evidence with respect to the availability of such
exemption for such purpose and holding.
Due to the complexity of these rules and the penalties that may be imposed
upon persons involved in non-exempt prohibited transactions, it is
particularly important that fiduciaries or other persons considering
purchasing the Capital Securities on behalf of or with "plan assets" of any
Plan consult with their counsel regarding the potential consequences if the
assets of the Trust were deemed to be "plan assets" and the availability of
exemptive relief under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or any other
applicable exemption.
S-34
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, GWFC and
the Trust have agreed that the Trust will sell to each of the Underwriters
named below, and each of such Underwriters has severally agreed to purchase
from the Trust, the respective number of Capital Securities set forth opposite
its name below:
<TABLE>
<CAPTION>
NUMBER OF
CAPITAL
UNDERWRITER SECURITIES
----------- ----------
<S> <C>
Goldman, Sachs & Co. .............................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated......................................................
Lehman Brothers Inc. .............................................
Smith Barney Inc. ................................................
-------
Total......................................................... 165,000
=======
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all the Capital Securities
offered hereby, if any are taken.
The Underwriters propose to offer the Capital 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 $ per Capital Security. The Underwriters may
allow, and such dealers may reallow, a concession not in excess of $ per
Capital Security to certain brokers and dealers. After the Capital Securities
are released for sale to the public, the offering price and other selling
terms may from time to time be varied by the Underwriters.
In view of the fact that the proceeds from the sale of the Capital
Securities will be used to purchase the Subordinated Notes issued by GWFC, the
Underwriting Agreement provides that GWFC will pay as Underwriters'
compensation for the Underwriters' arranging the investment therein of such
proceeds an amount of $ per Capital Security for the accounts of the
several Underwriters.
GWFC and the Trust have agreed that, during the period beginning from the
date of the Underwriting Agreement and continuing to and including ,
they will not offer, sell, contract to sell or otherwise dispose of any
Capital Securities, any other beneficial interests in the assets of the Trust,
or any capital securities or any other securities of the Trust or GWFC which
are substantially similar to the Capital Securities, including any guarantee
of such securities, or any securities convertible into or exchangeable for or
representing the right to receive securities, preferred securities or any such
substantially similar securities of either the Trust or GWFC, without the
prior written consent of the Underwriters, except for the Capital Securities
offered in connection with this offering.
Prior to this offering, there has been no public market for the Capital
Securities. The Underwriters have advised GWFC that they intend to make a
market in the Capital Securities, but are not obligated to do so and may
discontinue market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for the Capital Securities.
S-35
<PAGE>
GWFC and the Trust have agreed to indemnify the several 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.
Certain of the Underwriters or their affiliates have provided from time to
time, and expect to provide in the future, investment or commercial banking
services to GWFC and its affiliates, for which such Underwriters or their
affiliates have received or will receive customary fees and commissions.
LEGAL MATTERS
The validity of the Capital Securities will be passed upon by Skadden, Arps,
Slate, Meager & Flom (Delaware), special counsel to the Trust. The validity of
the Subordinated Notes, the Guarantee and certain matters relating thereto
will be passed upon for GWFC by O'Melveny & Myers LLP. Brown & Wood LLP will
act as counsel to the Underwriters.
S-36
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHOR-IZED. THIS PROSPECTUS SUPPLEMENT AND
THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PRO-
SPECTUS SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS
NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CRE-
ATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF GWFC SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO ITS DATE.
-----------
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
Reason for Transaction.................................................... S-9
Use of Proceeds........................................................... S-9
Description of the Offered Capital Securities............................. S-11
Description of the Subordinated Notes..................................... S-23
Effect of Obligations Under the Subordinated Notes and the Guarantee...... S-28
Certain Federal Income Tax Consequences................................... S-29
Certain ERISA Considerations.............................................. S-32
Underwriting.............................................................. S-35
Legal Matters............................................................. S-36
</TABLE>
PROSPECTUS
<TABLE>
<S> <C>
Available Information....................................................... 2
Incorporation of Certain Documents by Reference............................. 2
The Company................................................................. 4
The Trust................................................................... 4
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.......................................... 26
Plan of Distribution........................................................ 29
Experts..................................................................... 29
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
GREAT WESTERN FINANCIAL TRUST II
% CAPITAL SECURITIES, SERIES A
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
GREAT WESTERN FINANCIAL CORPORATION
-----------
PROSPECTUS SUPPLEMENT
-----------
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
LEHMAN BROTHERS
SMITH BARNEY INC.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
