<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 9, 1997
REGISTRATION NO. 333-22497
REGISTRATION NO. 333-22497-01
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C>
BANCORP HAWAII, INC. BANCORP HAWAII CAPITAL TRUST I
(EXACT NAME OF REGISTRANT AS SPECIFIED IN (EXACT NAME OF REGISTRANT AS SPECIFIED IN
ITS CHARTER) ITS CHARTER)
HAWAII DELAWARE
(STATE OR OTHER JURISDICTION OF (STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION) INCORPORATION OR ORGANIZATION)
6712 6719
(PRIMARY STANDARD INDUSTRIAL (PRIMARY STANDARD INDUSTRIAL
CLASSIFICATION CODE NUMBER) CLASSIFICATION CODE NUMBER)
99-0148992 APPLIED FOR
(I.R.S. EMPLOYER (I.R.S. EMPLOYER
IDENTIFICATION NUMBER) IDENTIFICATION NUMBER)
130 MERCHANT STREET 130 MERCHANT STREET
HONOLULU, HI 96813 HONOLULU, HI 96813
(808) 643-3888 (808) 643-3888
(ADDRESS, INCLUDING ZIP CODE, AND (ADDRESS, INCLUDING ZIP CODE, AND
TELEPHONE NUMBER, INCLUDING AREA CODE, OF TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
------------------------
JOSEPH T. KIEFER, ESQ.
GENERAL COUNSEL
BANCORP HAWAII, INC.
130 MERCHANT STREET
HONOLULU, HI 96813
(808) 643-3888
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE OF EACH REGISTRANT)
------------------------
WITH COPIES TO:
BRIAN D. ALPRIN
LAURENCE S. LESE
DUANE, MORRIS & HECKSCHER
SUITE 700
1667 K STREET, NW
WASHINGTON, D.C. 20006
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, please check the following box. [ ]
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 2
PROSPECTUS
BANCORP HAWAII CAPITAL TRUST I
OFFER TO EXCHANGE ITS 8.25% CAPITAL SECURITIES
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING 8.25% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, TO THE EXTENT DESCRIBED HEREIN, BY
LOGO
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1997, UNLESS EXTENDED.
------------------------
Bancorp Hawaii Capital Trust I, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), and Bancorp Hawaii, Inc., a Hawaii
corporation, as Depositor (the "Corporation"), hereby offer, upon the terms and
subject to the conditions set forth in this Prospectus (as the same may be
amended or supplemented from time to time, the "Prospectus") and in the
accompanying Letter of Transmittal (which together constitute the "Exchange
Offer"), to exchange up to $100,000,000 aggregate Liquidation Amount of its
8.25% Capital Securities, Series A (the "Exchange Capital Securities") which
have been registered under the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to a Registration Statement (as defined herein) of
which this Prospectus constitutes a part, for a like Liquidation Amount of its
outstanding 8.25% Capital Securities, Series A (the "Old Capital Securities"),
of which $100,000,000 aggregate Liquidation Amount is outstanding. Pursuant to
the Exchange Offer, the Corporation is also exchanging its guarantee of the
payment of Distributions (as defined herein) and payments on liquidation or
redemption of the Old Capital Securities (the "Old Guarantee") for a like
guarantee of the Old Capital Securities and the Exchange Capital Securities (the
"Exchange Guarantee") and all of its 8.25% Junior Subordinated Debt Securities
(the "Old Junior Subordinated Debt Securities"), of which $103,093,000 aggregate
principal amount is outstanding, for a like aggregate principal amount of its
8.25% Junior Subordinated Debt Securities (the "Exchange Junior Subordinated
Debt Securities"), which Exchange Guarantee and Exchange Junior Subordinated
Debt Securities also have been registered under the Securities Act. The Old
Capital Securities, the Old Guarantee and the Old Junior Subordinated Debt
Securities are collectively referred to herein as the "Old Securities" and the
Exchange Capital Securities, the Exchange Guarantee and the Exchange Junior
Subordinated Debt Securities are collectively referred to herein as the
"Exchange Securities".
The terms of the Exchange Securities are identical in all material respects
to the respective terms of the Old Securities, except that (i) the Exchange
Securities have been registered under the Securities Act and therefore will not
be subject to certain restrictions on transfer applicable to the Old Securities,
(ii) the Exchange Capital Securities will not provide for any increase in the
Distribution rate thereon as a result of failing to satisfy certain conditions
of registration and (iii) the Exchange Junior Subordinated Debt Securities will
not provide for any increase in the interest rate thereon as a result of failing
to satisfy certain conditions of registration. See "Description of the Exchange
Securities" and "Description of the Old Securities".
Each broker-dealer that receives Exchange Securities (as defined herein) for
its own account pursuant to the Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Securities.
The Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of Exchange Securities received in exchange for Old
Securities (as defined herein) acquired by such broker-dealer as a result of
market-making activities or other trading activities. The Trust and the
Corporation have agreed that they will make this Prospectus available to any
broker-dealer for use in connection with any such resale until the close of
business on the 180th day following the Expiration Date (as defined herein). See
"Plan of Distribution".
------------------------
SEE "RISK FACTORS" COMMENCING ON PAGE 18 FOR CERTAIN INFORMATION THAT
SHOULD BE CONSIDERED BY HOLDERS WHO TENDER OLD CAPITAL SECURITIES IN THE
EXCHANGE OFFER.
------------------------
THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The Exchange Capital Securities will be issued, and may be transferred, only
in blocks having a liquidation amount of not less than $100,000 (100 Exchange
Capital Securities). Any transfer, sale or other disposition of Exchange Capital
Securities in a block having a liquidation amount of less than $100,000 shall be
deemed to be void and of no legal effect whatsoever. Any such transferee shall
be deemed not to be the holder of such Exchange Capital Securities for any
purpose, including but not limited to the receipt of distributions on such
Exchange Capital Securities, and such transferee shall be deemed to have no
interest whatsoever in such Exchange Capital Securities. There can be no
assurance as to the development or liquidity of any market for the Exchange
Capital Securities.
The date of this Prospectus is , 1997.
<PAGE> 3
(cover page continued)
The Exchange Capital Securities, the Exchange Junior Subordinated Debt
Securities and Exchange Guarantee are being offered for exchange in order to
satisfy certain obligations of the Corporation and the Trust under the
Registration Agreement dated December 30, 1996 (the "Registration Agreement")
among the Corporation, the Trust and the Initial Purchasers (as defined herein).
In the event that the Exchange Offer is consummated, any Old Capital Securities
which remain outstanding after consummation of the Exchange Offer and the
Exchange Capital Securities issued in the Exchange Offer will vote together as a
single class for purposes of determining whether holders of the requisite
percentage in outstanding Liquidation Amount thereof have taken certain actions
or exercised certain rights under the Declaration (as defined herein).
The Exchange Capital Securities and the Old Capital Securities (together,
the "Capital Securities") represent beneficial ownership interests in the Trust.
The Corporation will initially be the direct or indirect owner of all of the
beneficial ownership interests represented by common securities of the Trust
(the "Common Securities" and, collectively with the Capital Securities, the
"Trust Securities"). The Bank of New York is the Property Trustee of the Trust.
The Trust exists for the exclusive purposes of issuing the Trust Securities,
investing the proceeds of the Old Capital Securities and the Common Securities
in the Old Junior Subordinated Debt Securities, exchanging the Old Junior
Subordinated Debt Securities for the Exchange Junior Subordinated Debentures,
making Distributions (as defined herein) and certain other limited activities
described herein. The Junior Subordinated Debt Securities will mature on
December 15, 2026 (the "Stated Maturity"). The Capital Securities will have a
preference under certain circumstances over the Common Securities with respect
to cash distributions and amounts payable on liquidation, redemption or
otherwise. See "Description of Exchange Securities -- Description of Capital
Securities -- Subordination of Common Securities."
Holders of the Capital Securities and the holder of the Common Securities
will be entitled to receive cumulative cash distributions, in each case arising
from the payment of interest on the Junior Subordinated Debt Securities
accumulating from the later of the date of original issuance or the last
interest payment date and payable semi-annually in arrears on the 15th day of
June and December of each year, commencing June 15, 1997, at the annual rate of
8.25% of the Liquidation Amount of $1,000 per Capital Security and at the annual
rate of 8.25% of the Liquidation Amount of $1,000 per Common Security
("Distributions"). Subject to certain exceptions, the Corporation has the right
to defer payments of interest on the Junior Subordinated Debt Securities at any
time or from time to time for a period not exceeding 10 consecutive semi-annual
periods with respect to each deferral period (each, an "Extension Period");
provided, however, that no Extension Period may end on a date other than an
Interest Payment Date or extend beyond the Stated Maturity of the Junior
Subordinated Debt Securities. No interest shall be due and payable during an
Extension Period, except at the end thereof. Upon the termination of any
Extension Period and the payment of all interest then accrued and unpaid
(together with interest thereon at the rate of 8.25%, compounded semi-annually,
to the extent permitted by applicable law), the Corporation may elect to begin a
new Extension Period, subject to the requirements set forth herein. If interest
payments on the Junior Subordinated Debt Securities are so deferred, during any
Extension Period, Distributions on the Capital Securities and on the Common
Securities will also be deferred and the Corporation will not be permitted,
subject to certain exceptions described herein, to declare or pay any cash
distributions with respect to the Corporation's capital stock (which includes
common and preferred stock) or to make any payment with respect to debt
securities of the Corporation that rank pari passu in all respects with or
junior to the Junior Subordinated Debt Securities. During an Extension Period
(or any other time when interest is not paid timely), interest on the Junior
Subordinated Debt Securities will continue to accrue (and the amount of
Distributions to which holders of the Capital Securities and the Common
Securities are entitled will accumulate) at the rate of 8.25% per annum,
compounded semi-annually, and, in the case of an Extension Period, holders of
Capital Securities will be required to accrue interest income for United States
Federal income tax purposes. There is no limitation on the number of times that
the Corporation may elect to begin an Extension Period. See "Description of
Exchange Securities -- Description of Junior Subordinated Debt
Securities -- Option to Extend Interest Payment Date" and "Certain United States
Federal Income Tax Consequences -- Interest and Original Issue Discount." As a
result of the existence of the Corporation's right to defer interest payments on
the Junior Subordinated Debt Securities, the market price of the Capital
Securities (if a market should develop) may be more volatile than the market
prices of other securities that are not subject to such deferrals.
The Corporation has, through the Guarantee Agreement, the Declaration, the
Junior Subordinated Debt Securities and the Indenture (each as defined herein),
taken together, fully, irrevocably and unconditionally guaranteed all of the
Trust's obligations under the Capital Securities. See "Relationship Among the
Capital Securities, the Junior Subordinated Debt Securities and the
Guarantee -- Full and Unconditional Guarantee." The Corporation has agreed to
guarantee the payment of Distributions and payments on liquidation or redemption
of the Trust Securities, but only in each case to the extent of funds available
for distribution by the Trust, as described herein (the "Guarantee"). See
"Description of Exchange Securities -- Description of Guarantee." If the
Corporation does not make interest payments on the Junior Subordinated Debt
Securities held by the Trust, the Trust will have insufficient funds to pay
Distributions on the Capital
2
<PAGE> 4
(cover page continued)
Securities. The Guarantee does not cover the payment of Distributions when the
Trust does not have funds available for distribution to pay such Distributions.
In such event, a holder of Capital Securities may institute a legal proceeding
directly against the Corporation for enforcement of payment to such holder of
the principal of or interest on Junior Subordinated Debt Securities having a
principal amount equal to the aggregate Liquidation Amount of the Capital
Securities held by such holder (a "Direct Action"). See "Description of Exchange
Securities -- Description of Junior Subordinated Debt Securities -- Enforcement
of Certain Rights by Holders of Capital Securities." The obligations of the
Corporation under the Guarantee and the Junior Subordinated Debt Securities are
subordinate and junior in right of payment to all Senior Debt (as defined in
"Description of Exchange Securities -- Description of Junior Subordinated Debt
Securities -- Subordination") of the Corporation. None of the Indenture, the
Guarantee Agreement or the Declaration places any limitation upon the amount of
secured and unsecured debt including Senior Debt (as defined herein) that may be
incurred by the Corporation.
The Trust Securities are subject to mandatory redemption (i) in whole, but
not in part upon repayment in full, at the Stated Maturity of the Junior
Subordinated Debt Securities at a redemption price equal to the principal amount
of, plus accrued interest on, the Junior Subordinated Debt Securities (the
"Maturity Redemption Price") and (ii) in whole or in part on or after December
15, 2006 contemporaneously with any optional redemption by the Corporation of
Junior Subordinated Debt Securities at a redemption price (the "Optional
Redemption Price") equal to the Optional Prepayment Price (as defined below).
Either of the Maturity Redemption Price or the Optional Redemption Price may be
referred to herein as the "Redemption Price." See "Description of Capital
Securities -- Redemption." Subject to the Corporation having received prior
approval of the Board of Governors of the Federal Reserve System (the "Federal
Reserve") to do so if then required under applicable regulations, guidelines or
policies of the Federal Reserve, the Junior Subordinated Debt Securities are
redeemable at the option of the Corporation during the 12-month periods
beginning on or after December 15, 2006, in whole or in part, at any time at a
redemption price (the "Optional Prepayment Price") equal to 104.125% of the
principal amount thereof on December 15, 2006, declining ratably on each
December 15 thereafter to 100% on or after December 15, 2016, plus accrued but
unpaid interest thereon to the date of redemption. See "Description of Exchange
Securities -- Description of Junior Subordinated Debt Securities -- Optional
Redemption."
The Corporation, as the holder of the outstanding Common Securities, has
the right at any time (including, without limitation, upon the occurrence of a
Tax Event (as defined herein) or a Capital Treatment Event (as defined herein))
to terminate the Trust and cause a Like Amount (as defined herein) of the Junior
Subordinated Debt Securities to be distributed to the holders of the Trust
Securities upon liquidation of the Trust, subject to prior approval of the
Federal Reserve to do so if then required under applicable regulations,
guidelines or policies of the Federal Reserve. In the event of any such
termination of the Trust, after satisfaction of liabilities to creditors of the
Trust as required by applicable law, the holders of the Capital Securities
generally will be entitled to receive a Liquidation Amount of $1,000 per Capital
Security plus accumulated and unpaid Distributions thereon to the date of
payment, which shall be in the form of a distribution of a Like Amount of Junior
Subordinated Debt Securities, subject to certain exceptions. In addition, if the
Junior Subordinated Debt Securities are distributed to the holders of the Trust
Securities as the result of the occurrence of a Tax Event or a Capital Treatment
Event, as the case may be, and such Tax Event or Capital Treatment Event, as the
case may be, continues notwithstanding such distribution, the Corporation has
the right to prepay the Junior Subordinated Debt Securities in whole, but not in
part, at the Event Prepayment Price (as defined herein) together with
accumulated Distributions to but excluding the date fixed for redemption. See
"Description of Exchange Securities -- Description of Capital
Securities -- Liquidation of the Trust and Distribution of Junior Subordinated
Debt Securities" and "Description of Exchange Securities -- Description of
Junior Subordinated Debt Securities -- Tax Event or Capital Treatment Event
Prepayment."
The Exchange Capital Securities will be issued, and may be transferred,
only in a block having a Liquidation Amount of not less than $100,000 or
integral multiples thereof (100 Exchange Capital Securities).
3
<PAGE> 5
As used herein, (i) the "Indenture" means the Junior Subordinated
Indenture, as amended and supplemented from time to time, between the
Corporation and The Bank of New York, as trustee (the "Debenture Trustee") and
(ii) the "Declaration" means the Amended and Restated Declaration of Trust
relating to the Trust among the Corporation, as Depositor, The Bank of New York,
as Property Trustee (the "Property Trustee"), The Bank of New York (Delaware),
as Delaware Trustee (the "Delaware Trustee"), and the Administrative Trustees
named therein (collectively with the Property Trustee and the Delaware Trustee,
the "Issuer Trustees"). In addition, as the context may require, (i) the term
"Capital Securities" includes the Old Capital Securities and the Exchange
Capital Securities, (ii) the term "Junior Subordinated Debt Securities" includes
the Old Junior Subordinated Debt Securities and the Exchange Junior Subordinated
Debt Securities and (iii) the term "Guarantee" includes the Old Guarantee and
the Exchange Guarantee. Any transfer, sale or other disposition of Exchange
Capital Securities in a block having a liquidation amount of less than $100,000
shall be deemed to be void and of no legal effect whatsoever. Any such
Transferee shall be deemed not to be the holder of such Exchange Capital
Securities for any purpose, including but not limited to the receipt of
distributions on such Exchange Capital Securities, and such Transferee shall be
deemed to have no interest whatsoever in such Exchange Capital Securities.
Based on existing interpretations by the staff of the Securities and
Exchange Commission (the "Commission") set forth in several no-action letters to
third parties and subject to the two immediately following sentences, the
Corporation and the Trust believe that the Exchange Capital Securities, the
Exchange Guarantee and the Exchange Junior Subordinated Debt Securities issued
pursuant to the Exchange Offer may be offered for resale, resold and otherwise
transferred by a holder thereof (other than a holder who is a broker-dealer)
without further compliance with the registration and prospectus delivery
requirements of the Securities Act; provided, that, such Exchange Capital
Securities are acquired in the ordinary course of such holder's business and
such holder is not participating, and has no arrangement or understanding with
any person to participate, in a distribution (within the meaning of the
Securities Act) of the Exchange Capital Securities. However, any holder of Old
Capital Securities who is an "affiliate" of the Trust or the Corporation or who
intends to participate in the Exchange Offer for the purpose of distributing
Exchange Capital Securities, or any broker-dealer who purchased Old Capital
Securities from the Trust to resell pursuant to Rule 144A under the Securities
Act ("Rule 144A") or any other available exemption under the Securities Act, (a)
will not be able to rely on the interpretations of the staff of the Commission
set forth in the above-mentioned no-action letters, (b) will not be permitted or
entitled to tender such Old Capital Securities in the Exchange Offer and (c)
must comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any sale or other transfer of such Old Capital
Securities unless such sale is made pursuant to an exemption from such
requirements. In addition, as described below, if any broker-dealer holds Old
Capital Securities acquired for its own account as a result of market-making or
other trading activities and exchanges such Old Capital Securities for Exchange
Capital Securities, then such broker-dealer must deliver a prospectus meeting
the requirements of the Securities Act in connection with any resales of such
Exchange Capital Securities.
Each holder of Old Capital Securities who wishes to exchange Old Capital
Securities for Exchange Capital Securities in the Exchange Offer will be
required to represent that (i) it is not an "affiliate" of the Trust or the
Corporation, (ii) any Exchange Capital Securities to be received by it are being
acquired in the ordinary course of its business and (iii) it has no arrangement
or understanding with any person to participate in a distribution (within the
meaning of the Securities Act) of such Exchange Capital Securities. Each
broker-dealer that receives Exchange Capital Securities for its own account
pursuant to the Exchange Offer must acknowledge that it acquired the Old Capital
Securities for its own account as the result of market-making activities or
other trading activities and must agree that it will deliver a prospectus
meeting the requirements of the Securities Act in connection with any resale of
such Exchange Capital Securities. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
Based on the position taken by the staff of the Commission in the no-action
letters referred to above, the Corporation and the Trust believe that
broker-dealers who acquired Old Capital Securities for their own accounts as a
result of market-making activities or other trading activities may fulfill their
prospectus delivery requirements with respect to the Exchange Capital Securities
received upon exchange of such Old Capital Securities (other than Old Capital
Securities which represent an unsold allotment from the original sale of the Old
Capital Securities) with the prospectus prepared for the Exchange Offer so long
as it contains a description of the plan of distribution with respect to the
resale of such Exchange Capital Securities. Accordingly, subject to certain
provisions set forth in the Registration Agreement, the Corporation and the
Trust have agreed that this Prospectus, as it may be amended or supplemented
from time to time, may be used by a broker-dealer in connection with resales of
such Exchange Capital Securities for a period commencing on the Expiration Date
and ending
4
<PAGE> 6
180 days after the Expiration Date or, if earlier, when all such Exchange
Capital Securities have been disposed of by such broker-dealer. See "Plan of
Distribution." Any broker-dealer who is an "affiliate" of the Trust or the
Corporation may not rely on such no-action letters and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. See "The Exchange Offer -- Resales of
Exchange Capital Securities."
Each broker-dealer who surrenders Old Capital Securities pursuant to the
Exchange Offer will be deemed to have agreed, by execution of the Letter of
Transmittal, that, upon receipt of notice from the Corporation or the Trust of
the occurrence of any event or the discovery of any fact which makes any
statement contained or incorporated by reference in this Prospectus untrue in
any material respect or which causes this Prospectus to omit to state a material
fact necessary in order to make the statements contained or incorporated by
reference herein, in light of the circumstances under which they were made, not
misleading or of the occurrence of certain other events specified in the
Registration Agreement, such broker-dealer will suspend the sale of Exchange
Capital Securities (or the Exchange Junior Subordinated Debt Securities, as
applicable) pursuant to this Prospectus until the Corporation or the Trust has
amended or supplemented this Prospectus to correct such misstatement or omission
and has furnished copies of the amended or supplemented Prospectus to such
broker-dealer or the Corporation or the Trust has given notice that the sale of
the Exchange Capital Securities (or the Exchange Junior Subordinated Debt
Securities, as applicable) may be resumed.
Neither the Corporation nor the Trust has sought its own interpretive
letter and there can be no assurance that the staff of the Commission would make
a similar determination with respect to the Exchange Offer as it has in such no-
action letters to third parties.
Prior to the Exchange Offer, there has been only a limited secondary market
and no public market for the Old Capital Securities. The Exchange Capital
Securities will be a new issue of securities for which there currently is no
market. Although the Initial Purchasers have informed the Corporation and the
Trust that they currently intend to make a market in the Exchange Capital
Securities, they are not obligated to do so, and any such market-making may be
discontinued at any time without notice. Accordingly, there can be no assurance
as to the development or liquidity of any market for the Exchange Capital
Securities.
Any Old Capital Securities not tendered and accepted in the Exchange Offer
will remain outstanding and will be entitled to all the same rights and will be
subject to the same limitations applicable to the Old Capital Securities under
the Declaration (except for those rights relating to the Registration Agreement
which terminate upon consummation of the Exchange Offer). Following consummation
of the Exchange Offer, the holders of Old Capital Securities will continue to be
subject to all of the existing restrictions upon transfer thereof and neither
the Corporation nor the Trust will have any further obligation to such holders
(other than under certain limited circumstances) to provide for registration
under the Securities Act of the Old Capital Securities held by them. Even though
a market might develop for the Exchange Capital Securities, holders of Old
Capital Securities will not be permitted or entitled to utilize that market. To
the extent that Old Capital Securities are tendered and accepted in the Exchange
Offer, a holder's ability to sell untendered Old Capital Securities could be
adversely affected. See "Risk Factors -- Consequences of a Failure to Exchange
Old Capital Securities."
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ THIS PROSPECTUS
AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO
TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.
Old Capital Securities may be tendered for exchange on or prior to 5:00
p.m., New York City time, on , 1997 (such time on such date being
hereinafter called the "Expiration Date"), unless the Exchange Offer is extended
by the Corporation and the Trust (in which case the term "Expiration Date" shall
mean the latest date and time to which the Exchange Offer is extended). Tenders
of Old Capital Securities may be withdrawn at any time prior to the Expiration
Date. The Exchange Offer is not conditioned upon any minimum Liquidation Amount
of Old Capital Securities being tendered for exchange. However, the Exchange
Offer is subject to certain events and conditions which may be waived by the
Corporation or the Trust and to the terms and provisions of the Registration
Agreement. Old Capital Securities may be tendered in whole or in part having a
Liquidation Amount of not less than $100,000 (100 Old Capital Securities) or any
integral multiple of $1,000 Liquidation Amount (1 Old Capital Security) in
excess thereof. The Corporation has agreed to pay all expenses of the Exchange
Offer (other than certain transfer taxes relating to
5
<PAGE> 7
changes of ownership). See "The Exchange Offer -- Fees and Expenses." Each
Exchange Capital Security will pay cumulative Distributions from the most recent
Distribution Date (as defined herein) on the Old Capital Securities surrendered
in exchange for such Exchange Capital Securities or, if no Distribution Date has
occurred, from December 30, 1996. Holders of the Old Capital Securities whose
Old Capital Securities are accepted for exchange will not receive accumulated
Distributions on such Old Capital Securities for any period, and will be deemed
to have waived the right to receive such Distributions. See "Risk
Factors -- Consequences of a Failure to Exchange Old Capital Securities." This
Prospectus, together with the Letter of Transmittal, is being sent to all
registered holders of Old Capital Securities as of , 1997.
Neither the Corporation nor the Trust will receive any cash proceeds from
the issuance of the Exchange Capital Securities offered hereby. No
dealer-manager is being used in connection with this Exchange Offer. See "Use of
Proceeds From Sale of Old Capital Securities" and "Plan of Distribution."
------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE CORPORATION OR THE TRUST. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF
ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR AN OFFER TO ANY
PERSON IN ANY JURISDICTION WHERE SUCH OFFER WOULD BE UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE
AFFAIRS OF THE CORPORATION OR THE TRUST SINCE THE DATE HEREOF.
6
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TABLE OF CONTENTS
<TABLE>
<S> <C>
Recent Developments..................................................................... 8
Certain ERISA Considerations............................................................ 8
Available Information................................................................... 9
Incorporation of Certain Documents by Reference......................................... 10
Summary................................................................................. 11
Risk Factors............................................................................ 18
Ratios of Earnings to Fixed Charges..................................................... 23
Use of Proceeds from Sale of Old Capital Securities..................................... 23
Capitalization of the Corporation....................................................... 24
Dividend History........................................................................ 25
Bancorp Hawaii Capital Trust I.......................................................... 25
Bancorp Hawaii, Inc. ................................................................... 26
The Exchange Offer...................................................................... 28
Description of Exchange Securities...................................................... 36
Description of the Old Securities....................................................... 59
Relationship Among the Capital Securities, the Junior Subordinated Debt Securities and
the Guarantee......................................................................... 59
Certain United States Federal Income Tax Consequences................................... 60
Plan of Distribution.................................................................... 63
Validity of Securities.................................................................. 64
Experts................................................................................. 64
</TABLE>
7
<PAGE> 9
RECENT DEVELOPMENTS
On February 24, 1997, the Corporation and CU Bancorp executed a definitive
merger agreement. The merger would result in the acquisition by the Corporation
of California United Bank, a California-chartered bank that is the sole
subsidiary of CU Bancorp. California United Bank serves middle-market businesses
and consumers throughout Southern California from 21 branches in Westwood, the
San Gabriel and San Fernando valleys, the South Bay, and Ventura and Orange
counties. At December 31, 1996, CU Bancorp had total assets of approximately
$843.2 million, total deposits of approximately $737.4 million, and total
shareholders' equity of approximately $88.5 million. The transaction will be
structured as a merger of CU Bancorp into the Corporation and is intended to be
tax-free to CU Bancorp shareholders with respect to Corporation common stock
received. The merger, which will be accounted for as a purchase transaction,
will convert outstanding CU Bancorp stock into rights to receive $15.34 per
share in cash and/or Corporation common stock. At least 60% and not more than
80% of CU Bancorp's stock will be subject to stock-for-stock conversion. The
total merger consideration will be approximately $183 million. CU Bancorp has
issued a stock option to the Corporation that, following certain events, would
permit the Corporation to purchase shares of CU Bancorp stock equal to 19.9% of
CU Bancorp's outstanding stock at a price of $13.00 per share. The transaction
is expected to close before the end of the third quarter of 1997, subject to
approval by CU Bancorp shareholders and federal and state regulators.
CERTAIN ERISA CONSIDERATIONS
Each fiduciary of a pension, profit-sharing or other employee benefit plan
(a "Plan") subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), should consider the fiduciary standards of ERISA in the
context of the Plan's particular circumstances before authorizing an investment
in the Capital Securities. Accordingly, among other factors, the fiduciary
should consider whether the investment would satisfy the prudence and
diversification requirements of ERISA and would be consistent with the documents
and instruments governing the Plan.
Section 406 of ERISA and Section 4975 of the Internal Revenue Code of 1986,
as amended (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.
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 interest 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"). No assurance can be given by the Corporation, the Trust or the
Initial Purchasers 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. All of the Common Securities will be purchased and held directly
or indirectly by the Corporation.
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 assets of the Trust were deemed to be "plan assets" of
Plans investing in the Trust. For example,
8
<PAGE> 10
if the Corporation is a Party in Interest with respect to an investing Plan
(either directly or by reason of its ownership of the Trust or of any of the
Corporation's other subsidiaries), extensions of credit between the Corporation
and the Trust (as represented by the Junior Subordinated Debt Securities and the
Guarantee) would likely be prohibited by Section 406(a)(1)(B) of ERISA and
Section 4975(c)(1)(B) of the Code, unless exemptive relief were available under
an applicable administrative exemption (see below).
The DOL has issued five prohibited transaction class exemptions ("PTCEs")
that may provide exemptive relief for direct or indirect prohibited transactions
resulting from the purchase or holding of the Capital Securities, assuming that
assets of the Trust were deemed to be "plan assets" of Plans investing in the
Trust (see 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 pooled separate accounts) and
PTCE 84-14 (for certain transactions determined by independent qualified
professional 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. Any purchaser or holder of the Capital
Securities or any interest therein will be deemed to have represented by its
purchase and holding thereof that it either (a) is not a Plan or a Plan Asset
Entity and is not purchasing such securities on behalf of or with "plan assets"
of any Plan or (b) is eligible for the exemptive relief available under PTCE
96-23, 95-60, 91-38, 90-1 or 84-14 with respect to such purchase or holding. See
"Notice to Investors" herein.
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.
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities of the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional
offices of the Commission located at 7 World Trade Center, 13th Floor, Suite
1300, New York, New York 10048 and Suite 1400, Citicorp Center, 14th Floor, 500
West Madison Street, Chicago, Illinois 60661. Copies of such material can also
be obtained at prescribed rates by writing to the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Such
information may also be accessed electronically by means of the Commission's
home page on the Internet (http://www.sec.gov.). In addition, such reports,
proxy statements and other information concerning the Corporation can be
inspected at the offices of The New York Stock Exchange, Inc., 20 Broad Street,
New York, New York 10005 on which exchange securities of the Corporation are
listed.
No separate financial statements of the Trust have been included herein.
The Corporation and the Trust do not consider that such financial statements
would be material to holders of the Capital Securities because the Trust is a
newly formed special purpose entity, has no operating history or independent
operations and is not engaged in and does not propose to engage in any activity
other than holding as trust assets the Junior Subordinated Debt Securities and
issuing the Trust Securities. See "Bancorp Hawaii Capital Trust I," "Description
of Capital Securities," "Description of Junior Subordinated Debt Securities" and
"Description of Guarantee." In addition, the Corporation does not expect that
the Trust will file reports under the Exchange Act with the Commission.
This Prospectus constitutes a part of a registration statement on Form S-4
(the "Registration Statement") filed by the Corporation and the Trust with the
Commission under the Securities Act. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and
9
<PAGE> 11
regulations of the Commission, and reference is hereby made to the Registration
Statement and to the exhibits relating thereto for further information with
respect to the Corporation, the Trust and the Exchange Securities. Any
statements contained herein concerning the provisions of any document are not
necessarily complete, and, in each instance, reference is made to the copy of
such document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission. Each such statement is qualified in its entirety by
such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Corporation with the Commission are
incorporated into this Prospectus by reference:
(i) the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1996;
(ii) the Corporation's Current Report on Form 8-K dated February 27,
1997; and
(iii) all other reports filed by the Corporation pursuant to Section
13(a) or 15(d) of the Exchange Act since December 31, 1996.
Each document or report filed by the Corporation pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the
termination of any offering of securities made by this Prospectus shall be
deemed to be incorporated by reference into this Prospectus and to be a part of
this Prospectus from the date of filing of such document. Any statement
contained herein, or in a document all or a portion of which is incorporated or
deemed to be incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
As used herein, the terms "Prospectus" and "herein" mean this Prospectus,
including the documents incorporated or deemed to be incorporated herein by
reference, as the same may be amended, supplemented or otherwise modified from
time to time. Statements contained in this Prospectus as to the contents of any
contract or other document referred to herein do not purport to be complete, and
where reference is made to the particular provisions of such contract or other
document, such provisions are qualified in all respects by reference to all of
the provisions of such contract or other document. The Corporation will provide
without charge to any person to whom this Prospectus is delivered, on the
written or oral request of such person, a copy of any or all of the foregoing
documents incorporated by reference herein (other than exhibits not specifically
incorporated by reference into the texts of such documents). Requests for such
documents should be directed to:
Bancorp Hawaii, Inc.
130 Merchant Street
Honolulu, Hawaii 96813
Telephone: (808) 643-3888
Attention: Corporate Secretary
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST TO THE
ABOVE ADDRESS. IN ORDER TO ENSURE TIMELY DELIVERY OF DOCUMENTS, ANY REQUEST
SHOULD BY MADE BY , 1997.
10
<PAGE> 12
SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus.
BANCORP HAWAII CAPITAL TRUST I
The Trust is a statutory business trust formed under Delaware law pursuant
to (i) the Declaration (as defined herein) and (ii) the filing of a certificate
of trust with the Delaware Secretary of State. The Trust's business and affairs
are conducted by the Issuer Trustees: The Bank of New York, as Property Trustee,
The Bank of New York (Delaware), as Delaware Trustee, and two individual
Administrative Trustees who are employees or officers of or affiliated with the
Corporation. The Trust exists for the exclusive purposes of (i) issuing and
selling the Trust Securities and effecting the Exchange Offer for the Exchange
Securities, (ii) using the proceeds from the sale of the Old Capital Securities
and the Common Securities to acquire the Old Junior Subordinated Debt
Securities, (iii) exchanging the Old Junior Subordinated Debt Securities for the
Exchange Subordinated Debt Securities in the Exchange Offer and (iv) engaging in
only those other activities necessary, advisable or incidental thereto.
Accordingly, the Exchange Junior Subordinated Debt Securities will be the sole
assets of the Trust, and payments under the Exchange Junior Subordinated Debt
Securities and the expense provisions under the Indenture will be the sole
revenues of the Trust. All of the Common Securities will be owned directly or
indirectly by the Corporation.
BANCORP HAWAII, INC.
Bancorp Hawaii, Inc. is a regional multi-bank holding company registered
under the Bank Holding Company Act of 1956, as amended. As of December 31, 1996,
the Corporation had total assets of $14.0 billion and was, in terms of assets,
the largest bank holding company headquartered in Hawaii.
The Corporation was organized under the laws of Hawaii on August 12, 1971,
as the first bank holding company in the State of Hawaii, and has been
continuously in business since. Its principal executive offices are located at
130 Merchant Street, Honolulu, Hawaii, and its telephone number is 808-643-3888.
The Corporation provides varied financial services to customers in Hawaii,
other areas of the Pacific Basin, Asia and the U.S. Mainland. The principal
subsidiaries of the Corporation are Bank of Hawaii (the "Bank") and Bancorp
Pacific, Inc. (a savings and loan holding company formerly known as FirstFed
America, Inc.).
The Bank was organized under the laws of Hawaii on December 17, 1897, and
has been continuously in business since. Its headquarters are in Honolulu,
Hawaii, and its deposits are insured by the Federal Deposit Insurance
Corporation ("FDIC"). It is not a member of the Federal Reserve.
The Bank, with total assets of $12.5 billion as of December 31, 1996,
provides general retail and commercial banking services in its four primary
markets: Hawaii, the Pacific Islands, Asia, and the U.S. Mainland, through
branch offices in the State of Hawaii, an Edge Act office in New York City and
branches or representative offices in American Samoa, Bahamas (Nassau),
Commonwealth of the Northern Mariana Islands (Saipan), Federated States of
Micronesia (Pohnpei, Kosrae and Yap), Guam, Hong Kong, Japan (Tokyo), Korea
(Seoul), Philippines (Manila, Davao, and Cebu), Republic of Fiji (Suva, Nadi,
and Lautoka), Republic of the Marshall Islands (Majuro), Republic of Palau
(Koror), Singapore and Taiwan (Taipei). The Bank also has affiliates in New
Caledonia, Solomon Islands, Tahiti, Tonga, Vanuatu and Western Samoa.
The Bank focuses its lending activities on loans to small and middle market
businesses operating in its local markets, loans to Fortune 1000 companies that
may have a Pacific orientation, loans to the communications and media industry,
and loans secured by real estate properties. At December 31, 1996, the Bank's
net loan portfolio totaled $7.1 billion and consisted of approximately 23.7%
commercial and industrial loans, approximately 39.4% real estate loans, 20.3%
foreign loans, with the balance of loans concentrated in the consumer,
international and lease financing sectors. The largest segment of the Bank's
real estate loan portfolio was represented by domestic loans secured by
residential properties which totaled approximately 55.2% of the total domestic
real estate loan portfolio at December 31, 1996. The remainder of this portfolio
consisted mainly of loans on income producing commercial properties.
Non-performing assets for the Bank totaled $69.4 million at December 31, 1996,
which was 0.94% of total loans and other real estate owned. The Bank's loan loss
reserve at that date was 2.06% of total loans, representing 215.3% of
non-performing assets.
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<PAGE> 13
The Bank owns all the outstanding stock of Hawaiian Trust Company, Limited,
Bank of Hawaii International, Inc. and other subsidiaries engaged in lease
financing, international payments, securities brokerage, insurance agency and
investment advisory services. Hawaiian Trust Company, Limited, which was
organized under the laws of Hawaii on August 10, 1898, offers trust services
primarily in the State of Hawaii and the Territory of Guam. Through the Bank's
ownership of Bank of Hawaii International, Inc., formed in 1968, equity
interests are held in the following foreign financial institutions: Bank of
Tonga -- 30%; Banque de Nouvelle Caledonie, New Caledonia -- 91%; Banque de
Tahiti -- 92%; Pacific Commercial Bank, Limited, Western Samoa -- 43%; Banque
d'Hawaii (Vanuatu) Ltd. -- 100%; and National Bank of Solomon Islands
Ltd. -- 51%.
Bancorp Pacific, Inc.'s only significant business is conducted through its
wholly owned subsidiary, First Federal Savings and Loan Association of America
("First Federal").
First Federal, a federally chartered stock savings and loan association,
has been in operation since 1904. In 1978, First Federal merged with Island
Federal Savings and Loan Association of Honolulu, Hawaii, and during the 1980s
acquired several smaller savings and loan associations. First Federal operates
25 full service offices throughout Hawaii. Its deposits are also insured by the
FDIC. As of December 31, 1996, First Federal had total assets of $1.2 billion
and total deposits of $867.9 million. Its subsidiary, First Savings and Loan
Association of America, operates three offices in the Territory of Guam and one
in Saipan.
The Corporation also owns all the outstanding stock (except for directors'
qualifying shares) of First National Bank of Arizona, organized under the laws
of the United States and having its principal office in Phoenix, Arizona. First
National Bank of Arizona, with assets of $203.3 million as of December 31, 1996,
provides customary banking services through six branches located in the State of
Arizona. First National Bank of Arizona has agreed to acquire four additional
branches in Arizona from Home Savings of America, F.S.B. with combined deposits
of approximately $250 million. In addition, the Corporation owns other
non-banking subsidiaries engaged in insurance agency and credit life insurance
services.
The Corporation and its subsidiaries are subject to extensive regulation by
federal and state regulators, including the Board of Governors of the Federal
Reserve, the FDIC, the Office of Thrift Supervision, the Comptroller of the
Currency, and the Department of Commerce and Consumer Affairs of the State of
Hawaii. These regulatory bodies examine the Corporation or one or more of its
subsidiaries and supervise numerous aspects of their business.
Various provisions of federal and state law may affect the ability of the
Corporation to pay capital distributions to holders of the Exchange Capital
Securities under certain circumstances. These are described in the paragraphs
which follow.
The Corporation is a legal entity separate and distinct from the Bank and
its other subsidiaries and affiliates. Because the Corporation is a holding
company, its rights and the rights of its creditors and stockholders, including
the holders of the Junior Subordinated Debt Securities and the Guarantee, to
participate in the assets of any subsidiary upon the latter's liquidation or
recapitalization will be subject to the prior claims of such subsidiary's
creditors, except to the extent that the Corporation may itself be a creditor
with recognized claims against such subsidiary, in which case it will share in
such assets with other creditors. Moreover, in the event of the institution of a
proceeding under the Bankruptcy Code to reorganize or liquidate the Corporation,
any commitment by the Corporation made to a federal regulator to maintain the
capital of an insured depository institution subsidiary would be entitled to a
priority over third party creditors of the Corporation.
There are various legal limitations on the extent to which the
Corporation's depository institution subsidiaries may extend credit, pay
dividends or otherwise supply funds to the Corporation. In determining whether
and to what extent to pay dividends, each depository subsidiary must consider
the effect of dividend payments on applicable risk-based capital and leverage
ratio requirements, as well as statutory restrictions and policy statements of
the federal regulatory agencies that indicate that depository organizations
should generally pay dividends out of current operating earnings. Where a
depository institution subsidiary of the Corporation fails to meet any minimum
capital requirement or where the payment of a capital distribution would cause
it to fail to meet such requirement, federal law generally prohibits such
subsidiary from making a capital distribution to the Corporation and in certain
circumstances, the Corporation from making any capital distribution to its
shareholders.
12
<PAGE> 14
The Corporation also derives dividends from its non-depository institution
subsidiaries. These subsidiaries may be subject to regulatory restrictions on
their payment of dividends to the Corporation. In addition, there are numerous
governmental requirements and regulations that affect the activities of the
Corporation and its depository institution and non-depository institution
subsidiaries.
Under long-standing policy of the Federal Reserve, a bank holding company
is expected to act as a source of financial strength for its subsidiary banks
and to commit resources to support such banks. As a result of that policy, the
Corporation may be required to commit resources to its subsidiary banks in
circumstances where it might not otherwise do so.
In the event that the FDIC sustains losses resulting from the provision of
assistance to or the failure of a depository institution owned by the
Corporation, other depository institution subsidiaries of the Corporation could
be assessed for such losses under federal law.
THE EXCHANGE OFFER
THE EXCHANGE OFFER......... Up to $100,000,000 aggregate Liquidation Amount of
Exchange Capital Securities are being offered in
exchange for a like aggregate Liquidation Amount of
Old Capital Securities. Old Capital Securities may
be tendered for exchange in whole or in part in a
Liquidation Amount of $100,000 (100 Old Capital
Securities) or any integral multiple of $1,000 in
excess thereof. The Corporation and the Trust are
making the Exchange Offer in order to satisfy their
obligations under the Registration Agreement
relating to the Old Capital Securities. For a
description of the procedures for tendering Old
Capital Securities, see "The Exchange
Offer -- Procedures for Tendering Old Capital
Securities."
EXPIRATION DATE............ 5:00 p.m., New York City time, on ,
1997 unless the Exchange Offer is extended by the
Corporation and the Trust, in which case the term
"Expiration Date" shall mean the latest date and
time to which the Exchange Offer is extended. See
"The Exchange Offer -- Expiration Date; Extensions;
Amendments."
CONDITIONS TO THE EXCHANGE
OFFER.................... The Exchange Offer is subject to certain
conditions, which may be waived by the Corporation
and the Trust in their sole discretion. The
Exchange Offer is not conditioned upon any minimum
Liquidation Amount of Old Capital Securities being
tendered. See "The Exchange Offer -- Conditions to
the Exchange Offer."
The Corporation and the Trust reserve the right in
their sole and absolute discretion, subject to
applicable law, at any time and from time to time,
(i) to delay the acceptance of the Old Capital
Securities for exchange, (ii) to terminate the
Exchange Offer if certain specified conditions have
not been satisfied, (iii) to extend the Expiration
Date of the Exchange Offer and retain all Old
Capital Securities tendered pursuant to the
Exchange Offer, subject, however, to the right of
holders of Old Capital Securities to withdraw their
tendered Old Capital Securities, or (iv) to waive
any condition or otherwise amend the terms of the
Exchange Offer in any respect. See "The Exchange
Offer -- Expiration Date; Extensions; Amendments."
WITHDRAWAL RIGHTS.......... Tenders of Old Capital Securities may be withdrawn
at any time prior to the Expiration Date by
delivering a written notice of such withdrawal to
the Exchange Agent in conformity with certain
procedures set forth below under "The Exchange
Offer -- Withdrawal Rights."
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<PAGE> 15
PROCEDURES FOR TENDERING
OLD CAPITAL SECURITIES..... Tendering holders of Old Capital Securities must
complete and sign a Letter of Transmittal in
accordance with the instructions contained therein
and forward the same by mail, facsimile or hand
delivery, together with any other required
documents, to the Exchange Agent, either with the
Old Capital Securities to be tendered or in
compliance with the specified procedures for
guaranteed delivery of such Old Capital Securities.
Certain brokers, dealers, commercial banks, trust
companies and other nominees may also effect
tenders by book-entry transfer. Holders of Old
Capital Securities registered in the name of a
broker, dealer, commercial bank, trust company or
other nominee are urged to contact such person
promptly if they wish to tender Old Capital
Securities pursuant to the Exchange Offer. See "The
Exchange Offer -- Procedures for Tendering Old
Capital Securities."
Letters of Transmittal and certificates
representing Old Capital Securities should not be
sent to the Corporation or the Trust. Such
documents should only be sent to the Exchange
Agent. Questions regarding how to tender and
requests for information should be directed to the
Exchange Agent. See "The Exchange Offer -- Exchange
Agent."
RESALES OF EXCHANGE CAPITAL
SECURITIES............... Based on existing interpretations by the staff of
the Commission and subject to the two immediately
following sentences, the Corporation and the Trust
believe that the Exchange Securities issued
pursuant to the Exchange Offer may be offered for
resale, resold and otherwise transferred by a
holder thereof (other than a holder who is a
broker-dealer or an "affiliate" as described below)
without further compliance with the registration
and prospectus delivery requirements of the
Securities Act; provided, that, such Exchange
Securities are acquired in the ordinary course of
such holder's business and such holder is not
participating, and has no arrangement or
understanding with any person to participate, in a
distribution (within the meaning of the Securities
Act) of the Exchange Capital Securities. However,
any holder of Old Capital Securities who is an
"affiliate" of the Trust or the Corporation or who
intends to participate in the Exchange Offer for
the purpose of distributing the Exchange Capital
Securities, or any broker-dealer who purchased the
Old Capital Securities from the Trust to resell
pursuant to Rule 144A or any other available
exemption under the Securities Act, (a) will not be
able to rely on the interpretations of the staff of
the Commission set forth in the above-mentioned
no-action letters, (b) will not be permitted or
entitled to tender such Old Capital Securities in
the Exchange Offer and (c) must comply with the
registration and prospectus delivery requirements
of the Securities Act in connection with any sale
or other transfer of such Old Capital Securities
unless such sale is made pursuant to an exemption
from such requirements. In addition, as described
below, if any broker-dealer holds Old Capital
Securities acquired for its own account as a result
of market-making or other trading activities and
exchanges such Old Capital Securities for Exchange
Capital Securities, then such broker-dealer must
deliver a prospectus meeting the requirements of
the Securities Act in connection with any resales
of such Exchange Capital Securities.
Each holder of Old Capital Securities who wishes to
exchange Old Capital Securities for Exchange
Capital Securities in the Exchange Offer will be
required to represent that (i) it is not an
"affiliate" of the Trust or the Corporation, (ii)
any Exchange Capital Securities to be received by
it are being acquired in the ordinary course of its
business and (iii) it has no arrangement or
14
<PAGE> 16
understanding with any person to participate in a
distribution (within the meaning of the Securities
Act) of such Exchange Capital Securities. Each
broker-dealer that receives Exchange Capital
Securities for its own account pursuant to the
Exchange Offer must acknowledge that it acquired
the Old Capital Securities for its own account as
the result of market-making activities or other
trading activities and must agree that it will
deliver a prospectus meeting the requirements of
the Securities Act in connection with any resale of
such Exchange Capital Securities. The Letter of
Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not
be deemed to admit that it is an "underwriter"
within the meaning of the Securities Act. Based on
the position taken by the staff of the Commission
in the no-action letters referred to above, the
Corporation and the Trust believe that
broker-dealers who acquired Old Capital Securities
for their own accounts as a result of market-making
activities or other trading activities may fulfill
their prospectus delivery requirements with respect
to the Exchange Capital Securities received upon
exchange of such Old Capital Securities (other than
Old Capital Securities which represent an unsold
allotment from the original sale of the Old Capital
Securities) with the prospectus prepared for the
Exchange Offer so long as it contains a description
of the plan of distribution with respect to the
resale of such Exchange Capital Securities.
Accordingly, subject to certain provisions set
forth in the Registration Agreement and to the
limitations described below under "The Exchange
Offer -- Resales of Exchange Capital Securities",
the Corporation and the Trust have agreed that this
Prospectus, as it may be amended or supplemented
from time to time, may be used by a broker-dealer
in connection with resales of such Exchange Capital
Securities for a period commencing on the
Expiration Date and ending 180 days after the
Expiration Date or, if earlier, when all such
Exchange Capital Securities have been disposed of
by such broker-dealer. See "Plan of Distribution."
Any broker-dealer who is an "affiliate" of the
Corporation or the Trust may not rely on such
no-action letters and must comply with the
registration and prospectus delivery requirements
of the Securities Act in connection with any resale
transaction. See "The Exchange Offer -- Resales of
Exchange Capital Securities."
Neither the Corporation nor the Trust has sought
its own interpretive letter and there can be no
assurance that the staff of the Commission would
make a similar determination with respect to the
Exchange Offer as it has in such no-action letters
to third parties.
EXCHANGE AGENT............. The exchange agent with respect to the Exchange
Offer is The Bank of New York (the "Exchange
Agent"). The address, and telephone and facsimile
numbers, of the Exchange Agent are set forth in
"The Exchange Offer -- Exchange Agent" and in the
Letter of Transmittal.
USE OF PROCEEDS............ Neither the Corporation nor the Trust will receive
any cash proceeds from the issuance of the Exchange
Capital Securities offered hereby. See "Use of
Proceeds From Sale of Old Capital Securities."
CERTAIN FEDERAL INCOME TAX
CONSEQUENCES............. Holders of Old Capital Securities should review the
information set forth under "Certain Federal Income
Tax Consequences" prior to tendering Old Capital
Securities in the Exchange Offer.
15
<PAGE> 17
THE EXCHANGE CAPITAL SECURITIES
SECURITIES OFFERED......... Up to $100,000,000 aggregate Liquidation Amount of
the Trust's 8.25% Capital Securities which have
been registered under the Securities Act
(Liquidation Amount $1,000 per Capital Security).
The Exchange Capital Securities will be issued and
the Old Capital Securities were issued under the
Declaration. The Exchange Capital Securities and
any Old Capital Securities which remain outstanding
after consummation of the Exchange Offer will
constitute separate series of a single class of
Capital Securities under the Declaration and,
accordingly, will vote together as a single class
for purposes of determining whether holders of the
requisite percentage in outstanding Liquidation
Amount thereof have taken certain actions or
exercised certain rights under the Declaration. See
"Description of Exchange Securities -- Description
of Capital Securities -- General." The terms of the
Exchange Capital Securities are identical in all
material respects to the terms of the Old Capital
Securities, except that the Exchange Capital
Securities have been registered under the
Securities Act and therefore are not subject to
certain restrictions on transfer applicable to the
Old Capital Securities and will not provide for any
increase in the Distribution rate thereon as
previously required by the Registration Agreement.
See "The Exchange Offer -- Purpose and Effect of
the Exchange Offer," "Description of Exchange
Securities" and "Description of the Old
Securities."
DISTRIBUTION DATES......... June 15 and December 15 of each year, commencing
the later of the first such date, following the
original issuance of the Exchange Capital
Securities or the next Distribution Date.
EXTENSION PERIODS.......... The Corporation may choose to defer payments of
interest on the Junior Subordinated Debt
Securities. Distributions on Exchange Capital
Securities will be deferred for the duration of any
Extension Period elected by the Corporation with
respect to the payment of interest on the Junior
Subordinated Debt Securities. Such deferrals will
not constitute an event of default with respect to
the Junior Subordinated Debt Securities or the
Exchange Capital Securities or the Old Capital
Securities, as the case may be. No Extension Period
will exceed 10 consecutive semi-annual periods or
extend beyond the Stated Maturity of the Junior
Subordinated Debt Securities. See "Description of
Exchange Securities -- Description of Junior
Subordinated Debt Securities -- Option to Extend
Interest Payment Date" and "Certain United States
Federal Income Tax Consequences -- Interest and
Original Issue Discount."
RANKING.................... The Exchange Capital Securities will rank pari
passu, and payments thereon will be made pro rata,
with the Old Capital Securities and the Common
Securities except as described under "Description
of Exchange Securities -- Description of Capital
Securities -- Subordination of Common Securities."
The Exchange Junior Subordinated Debt Securities
will rank pari passu with the Old Junior
Subordinated Debt Securities and all other junior
subordinated debt securities issued or to be issued
by the Corporation pursuant to the Indenture with
substantially similar subordination terms ("Other
Debentures") and which have been or will be issued
and sold to other trusts established by the
Corporation, in each case similar to the Trust
("Other Trusts"), and will be unsecured and
subordinate and junior in right of payment to the
extent and in the manner set forth in the Indenture
to all Senior Debt of the Corporation. See
"Description of Exchange Securities -- Description
of Junior Subordinated Debt Securities." The
Exchange Guarantee will rank pari passu with all
other guarantees issued or to be issued by the
Corporation with respect to securities issued by
Other Trusts ("Other Guarantees") and will
constitute an unsecured
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<PAGE> 18
obligation of the Corporation and will rank
subordinate and junior in right of payment to the
extent and in the manner set forth in the Guarantee
to all Senior Debt. See "Description of Exchange
Securities -- Description of Guarantee."
REDEMPTION................. The Trust Securities are subject to mandatory
redemption (i) in whole, but not in part, upon the
repayment in full at the Stated Maturity of the
Junior Subordinated Debt Securities and (ii) in
whole or in part at any time on or after December
15, 2006 contemporaneously with any optional
redemption by the Corporation of Junior
Subordinated Debt Securities, in each case at the
applicable Redemption Price. See "Description of
Exchange Securities -- Description of Capital
Securities -- Redemption."
RATING..................... The Exchange Capital Securities are expected to be
rated "BBB" by Standard & Poor's Ratings Services
and "a2" by Moody's Investors Service, Inc. A
security rating is not a recommendation to buy,
sell or hold securities and may be subject to
revision or withdrawal at any time by the assigning
rating organization.
ERISA CONSIDERATIONS....... Prospective purchasers must carefully consider the
restrictions on purchase set forth under "Certain
ERISA Considerations."
ABSENCE OF MARKET FOR THE
EXCHANGE CAPITAL
SECURITIES............... The Exchange Capital Securities will be a new issue
of securities for which there is currently no
market. Although UBS Securities LLC, Credit Suisse
First Boston Corporation and Salomon Brothers Inc
(the "Initial Purchasers") have informed the Trust
and the Corporation that they currently intend to
make a market in the Exchange Capital Securities,
the Initial Purchasers are not obligated to do so,
and any such market making may be discontinued at
any time without notice. Accordingly, there can be
no assurance as to the development or liquidity of
any market for the Exchange Capital Securities.
Even though a market might develop for the Exchange
Capital Securities, there will be no market for the
Old Capital Securities, and holders of Old Capital
Securities will not be permitted or entitled to
trade Old Capital Securities on any market
developed for Exchange Capital Securities.
For additional information regarding the Exchange Securities, see
"Description of Exchange Securities," and "Certain United States Federal Income
Tax Consequences."
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges of
the Corporation for the respective periods indicated.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
1992 1993 1994 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Excluding interest on deposits.......... 3.92 2.81 2.51 2.22 2.59
Including interest on deposits.......... 1.52 1.67 1.61 1.49 1.50
</TABLE>
For the purpose of computing the consolidated ratios of earnings to fixed
charges, earnings represent consolidated income before income taxes plus fixed
charges. Fixed charges excluding interest on deposits consist of interest on
long-term debt and short-term borrowings and one-third of rental expense (which
is deemed representative of the interest factor). Fixed charges including
interest on deposits consist of the foregoing items plus interest on deposits.
RISK FACTORS
Holders tendering Old Capital Securities in the Exchange Offer should
carefully consider the matters set forth under "Risk Factors."
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<PAGE> 19
RISK FACTORS
Before deciding whether to accept the Exchange Offer, holders of the
Capital Securities should carefully review the information contained elsewhere
in this Prospectus and should particularly consider the following matters.
RANKING OF OBLIGATIONS UNDER THE JUNIOR SUBORDINATED DEBT SECURITIES AND THE
GUARANTEE
The obligations of the Corporation pursuant to the Junior Subordinated Debt
Securities and under the Guarantee issued by the Corporation for the benefit of
the holders of Trust Securities are unsecured and rank subordinate and junior in
right of payment to all Senior Debt of the Corporation (which, as defined,
includes all outstanding subordinated debt of the Corporation). At December 31,
1996, the aggregate of such outstanding Senior Debt of the Corporation was
approximately $118.7 million. Because the Corporation is a bank holding company,
the right of the Corporation to participate in any distribution of assets of any
subsidiary, including the Bank, upon such subsidiary's liquidation or
reorganization or otherwise (and thus the ability of holders of the Capital
Securities to benefit indirectly from such distribution) is subject to the prior
claims of creditors of such subsidiary, except to the extent that the
Corporation may itself be recognized as a creditor of such subsidiary.
Accordingly, the Junior Subordinated Debt Securities and the Guarantee will be
effectively subordinated to all existing and future liabilities of the
Corporation's subsidiaries, and holders of Junior Subordinated Debt Securities
and beneficiaries of the Guarantee should look only to the assets of the
Corporation for payments thereon. See "Bancorp Hawaii, Inc." None of the
Indenture, the Guarantee or the Declaration places any limitation on the amount
of secured or unsecured debt, including Senior Debt, that may be incurred by the
Corporation. See "Description of Exchange Securities -- Description of Junior
Subordinated Debt Securities -- Subordination" and "Description of Exchange
Securities -- Description of Guarantee -- Status of the Guarantee."
The ability of the Trust to pay amounts due on the Capital Securities is
solely dependent upon the Corporation making payments on the Junior Subordinated
Debt Securities as and when required.
OPTION TO EXTEND INTEREST PAYMENT DATE; TAX CONSEQUENCES; MARKET PRICE
CONSEQUENCES
So long as no Debenture Event of Default (as defined herein) has occurred
and is continuing, the Corporation has the right under the Indenture to defer
the payment of interest on the Junior Subordinated Debt Securities at any time
or from time to time for a period not exceeding 10 consecutive semi-annual
periods with respect to each Extension Period; provided, however, that no
Extension Period may extend beyond the Stated Maturity of the Junior
Subordinated Debt Securities. As a consequence of any such deferral, semi-annual
Distributions on the Capital Securities by the Trust will also be deferred (and
the amount of Distributions to which holders of the Capital Securities are
entitled will accumulate additional Distributions thereon at the rate of 8.25%
per annum, compounded semi-annually) from the relevant payment date for such
Distributions during any such Extension Period. The deferral(s) of the payment
of interest on the Junior Subordinated Debt Securities and resulting deferral of
Distributions on the Capital Securities will not constitute an event of default
with respect to the Junior Subordinated Debt Securities or the Capital
Securities. During any Extension Period, the Corporation may not (i) declare or
pay any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Corporation's capital stock,
(ii) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Corporation (including Other
Debentures) that rank pari passu in all respects with or junior in interest to
the Junior Subordinated Debt Securities or (iii) make any guarantee payments
with respect to any guarantee by the Corporation of the debt securities of any
subsidiary of the Corporation (including Other Guarantees) if such guarantee
ranks pari passu in all respects with or junior in interest to the Junior
Subordinated Debt Securities (other than (a) dividends or distributions in
common stock of the Corporation, (b) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, (c) payments under the Guarantee, (d) purchases or
acquisitions of shares of the Corporation's common stock in connection with the
satisfaction by the Corporation of its obligations under any employee benefit
plan or any other contractual obligation of the Corporation (other than a
contractual obligation ranking pari passu in all respects, with or junior to the
Junior Subordinated Debt Securities), (e) as a result of a reclassification of
the Corporation's capital stock or the exchange or conversion of one class or
series of the Corporation's capital stock for another class or series of the
Corporation's capital stock or (f) the purchase of fractional interests in
shares of the Corporation's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged).
Prior to the termination of any Extension Period, the Corporation may further
extend such Extension Period; provided, however, that
18
<PAGE> 20
such extension does not cause such Extension Period to exceed 10 consecutive
semi-annual periods or to extend beyond the Stated Maturity. Upon the
termination of any Extension Period and the payment of all interest then accrued
and unpaid on the Junior Subordinated Debt Securities (together with interest
thereon at the annual rate of 8.25%, compounded semi-annually, to the extent
permitted by applicable law), the Corporation may elect to begin a new Extension
Period, subject to the above requirements. There is no limitation on the number
of times that the Corporation may elect to begin an Extension Period. See
"Description of Exchange Securities -- Description of Capital Securities --
Distributions" and "Description of Exchange Securities -- Description of Junior
Subordinated Debt Securities -- Option to Extend Interest Payment Date."
Because the Corporation believes that the likelihood of its exercising its
option to defer payments of interest is remote, the Junior Subordinated Debt
Securities will be treated under Treasury regulations as issued without
"original issue discount" ("OID") for United States Federal income tax purposes.
As a result, holders of Capital Securities generally will include their
allocable share of the interest on the Junior Subordinated Debt Securities in
taxable income under their own methods of tax accounting (i.e., cash or
accrual). Under the Treasury regulations, however, if the Corporation exercises
its right to defer payments of interest, the Junior Subordinated Debt Securities
will become original issue discount instruments and holders of Junior
Subordinated Debt Securities and, consequently, holders of Capital Securities
will be required to include their pro rata share of original issue discount in
gross income as it accrues for United States Federal income tax purposes in
advance of the receipt of cash attributable to such interest income. See
"Certain United States Federal Income Tax Consequences -- Interest and Original
Issue Discount" and "-- Disposition of the Capital Securities."
Should the Corporation elect to exercise its right to defer payments of
interest on the Junior Subordinated Debt Securities in the future, the market
price of the Capital Securities is likely to be affected. A holder that disposes
of its Capital Securities during an Extension Period, therefore, might not
receive the same return on its investment as a holder that continues to hold its
Capital Securities. In addition, as a result of the existence of the
Corporation's right to defer interest payments on the Junior Subordinated Debt
Securities, the market price of the Capital Securities (which represent
beneficial ownership interests in the Trust holding the Junior Subordinated Debt
Securities as its sole assets) may be more volatile than the market prices of
other securities on which original issue discount accrues that are not subject
to such deferrals.
TAX EVENT OR CAPITAL TREATMENT EVENT REDEMPTION;
POSSIBLE TAX LAW CHANGES AFFECTING THE CAPITAL SECURITIES
Upon the occurrence and continuation of a Tax Event or Capital Treatment
Event, the Corporation has the right to terminate the Trust and distribute a
Like Amount of the Junior Subordinated Debt Securities to the holders of the
Trust Securities in liquidation of the Trust within 90 days following the
occurrence of such Tax Event or Capital Treatment Event, as the case may be,
and, if a Tax Event or Capital Treatment Event, as the case may be, continues
notwithstanding the taking of such actions, to redeem the Junior Subordinated
Debt Securities in whole, but not in part, at the Event Prepayment Price
together with accumulated Distributions to but excluding the date fixed for
redemption. The exercise of such right is subject to the Corporation's having
received prior approval of the Federal Reserve to do so if then required under
applicable regulations, guidelines or policies of the Federal Reserve. See
"Description of Exchange Securities -- Description of Junior Subordinated Debt
Securities -- Tax Event or Capital Treatment Event Prepayment" and "Description
of Capital Securities -- Liquidation of the Trust and Distribution of Junior
Subordinated Debt Securities."
A "Tax Event" means the receipt by the Corporation of an opinion of counsel
experienced in such matters to the effect that, as a result of any amendment to,
or change (including any announced proposed change) in, the laws or any
regulations thereunder of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or which proposed
change, pronouncement or decision is announced on or after the Issue Date, there
is more than an insubstantial risk that (i) the Trust is, or will be within 90
days of the date of such opinion, subject to United States Federal income tax
with respect to income received or accrued on the Junior Subordinated Debt
Securities, (ii) interest payable by the Corporation on the Junior Subordinated
Debt Securities is not, or within 90 days of the date of such opinion, will not
be, deductible by the Corporation, in whole or in part, for United States
Federal income tax purposes or (iii) the Trust is, or will be within 90 days of
the date of such opinion, subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
19
<PAGE> 21
On March 19, 1996, during the 104th Congress, the Revenue Reconciliation
Bill of 1996 (the "Bill") was introduced. This Bill would have, among other
things, 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,
when the instrument is issued to a related party (other than a corporation),
when the holder or some other related party issues a related instrument that is
not shown as indebtedness on the issuer's consolidated balance sheet. The
above-described provision of the Bill was proposed to be effective generally for
instruments issued on or after December 7, 1995. If this provision were to apply
to the Junior Subordinated Debt Securities, the Corporation would be unable to
deduct interest on the Junior 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 Bill, if enacted, 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 views expressed in the Joint Statement
(the "Letters"). If the principles contained in the Joint Statement and the
Letters were followed, any proposed legislation in this area that is
subsequently enacted would not adversely affect the ability of the Corporation
to deduct interest on the Junior Subordinated Debt Securities. Although the
104th Congress adjourned without enacting the Bill, there can be no assurance
that current or future legislative proposals or final legislation will not
adversely affect the ability of the Corporation to deduct interest on the Junior
Subordinated Debt Securities. Such a change could give rise to a Tax Event,
which would permit the Corporation to terminate the Trust and distribute the
Junior Subordinated Debt Securities to the holders of the Trust Securities upon
liquidation of the Trust (and, if a Tax Event continued to exist notwithstanding
the taking of such actions, to prepay the Junior Subordinated Debt Securities),
as described more fully under "Description of Exchange Securities -- Description
of Capital Securities -- Liquidation of the Trust and Distribution of Junior
Subordinated Debt Securities" and "Description of Junior Subordinated Debt
Securities -- Tax Event or Capital Treatment Event Prepayment."
A "Capital Treatment Event" means the reasonable determination by the
Corporation that, as a result of the occurrence of any amendment to, or change
(including any announced prospective change) in, the laws (or any rules or
regulations thereunder) of the United States or any political subdivision
thereof or therein, or as a result of any official or administrative
pronouncement or action or judicial decision interpreting or applying such laws
or regulations, which amendment or change is effective or such pronouncement,
action or decision is announced on or after the date of issuance of the Old
Capital Securities, there is more than an insubstantial risk that the
Corporation will not be entitled to treat an amount equal to the Liquidation
Amount of the Capital Securities as "Tier 1 Capital" (or the then equivalent
thereof) for purposes of the capital adequacy guidelines of the Federal Reserve,
as then in effect and applicable to the Corporation.
LIQUIDATION DISTRIBUTION OF JUNIOR SUBORDINATED DEBT SECURITIES
Upon liquidation of the Trust and certain other events, the Junior
Subordinated Debt Securities may be distributed to holders of the Capital
Securities. Under current United States Federal income tax law and
interpretations thereof and assuming, as expected, that the Trust is treated as
a grantor trust for United States Federal income tax purposes, a distribution by
the Trust of the Junior Subordinated Debt Securities pursuant to a liquidation
of the Trust will not be a taxable event to the Trust or to holders of the
Capital Securities and will result in a holder of the Capital Securities
receiving directly such holder's pro rata share of the Junior Subordinated Debt
Securities (previously held indirectly through the Trust). 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
Junior Subordinated Debt Securities as a result of the occurrence of a Tax Event
or otherwise, the distribution of Junior Subordinated Debt Securities to holders
of the Capital Securities by the Trust would be a taxable event to the Trust and
each holder, and holders of the Capital Securities would recognize gain or loss
as if they had exchanged their Capital Securities for the Junior Subordinated
Debt Securities they received upon the liquidation of the Trust. See "Certain
United States Federal Income Tax Consequences -- Distribution of Junior
Subordinated Debt Securities or Cash Upon Liquidation of the Trust."
There can be no assurance that a market will exist for, or if a market
exists as to the market prices for the Capital Securities or the Junior
Subordinated Debt Securities that may be distributed in exchange for the Capital
Securities if a liquidation of the Trust occurs. Accordingly, the Capital
Securities that an investor may purchase, whether pursuant to the offer made
hereby or in the secondary market, or the Junior Subordinated Debt Securities
that a holder of Capital
20
<PAGE> 22
Securities may receive upon 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 Junior Subordinated Debt Securities on
termination of the Trust, prospective purchasers of Capital Securities are also
making an investment decision with regard to the Junior Subordinated Debt
Securities and should carefully review all the information regarding the Junior
Subordinated Debt Securities contained herein. See "Description of Exchange
Securities -- Description of Capital Securities -- Liquidation of the Trust and
Distribution of Junior Subordinated Debt Securities" and "Description of
Exchange Securities -- Description of Junior Subordinated Debt Securities --
General."
RIGHTS UNDER THE GUARANTEE
The Guarantee guarantees to the holders of the Trust Securities the
following payments, to the extent not paid by the Trust: (i) any accumulated and
unpaid Distributions required to be paid on the Trust Securities, to the extent
that the Trust has funds on hand available therefor at such time, (ii) the
applicable Redemption Price with respect to any Trust Securities called for
redemption, to the extent that the Trust has funds on hand available therefor at
such time, and (iii) upon a voluntary or involuntary dissolution, winding-up or
liquidation of the Trust, unless the Junior Subordinated Debt Securities are
distributed to holders of the Trust Securities, the lesser of (a) the aggregate
of the Liquidation Amount and all accumulated and unpaid Distributions to the
date of payment, to the extent that the Trust has funds on hand available
therefor at such time, and (b) the amount of assets of the Trust remaining
available for distribution to holders of the Trust Securities after the
satisfaction of liabilities to creditors of the Trust as provided by applicable
law.
The holders of not less than a majority in aggregate Liquidation Amount of
the Capital Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee (as
defined herein) in respect of the Guarantee or to direct the exercise of any
trust power conferred upon the Guarantee Trustee under the Guarantee. Any holder
of the Capital Securities may institute a legal proceeding directly against the
Corporation to enforce its rights under the Guarantee without first instituting
a legal proceeding against the Trust, the Guarantee Trustee or any other person
or entity. If the Corporation were to default on its obligation to pay amounts
payable under the Junior Subordinated Debt Securities, the Trust would lack
funds for the payment of Distributions or amounts payable on redemption of the
Capital Securities or otherwise, and, in such event, holders of the Capital
Securities would not be able to rely upon the Guarantee for payment of such
amounts. Instead, in the event a Debenture Event of Default shall have occurred
and be continuing and such event is attributable to the failure of the
Corporation to pay principal of or interest on the Junior Subordinated Debt
Securities on the applicable payment date, then a holder of Capital Securities
may institute a Direct Action. Notwithstanding any payments made to a holder of
Capital Securities by the Corporation in connection with a Direct Action, the
Corporation shall remain obligated to pay the principal of and interest on the
Junior Subordinated Debt Securities, and the Corporation shall be subrogated to
the rights of the holder of such Capital Securities with respect to payments on
the Capital Securities to the extent of any payments made by the Corporation to
such holder in any Direct Action. Except as described herein, holders of Capital
Securities will not be able to exercise directly any other remedy available to
the holders of the Junior Subordinated Debt Securities or assert directly any
other rights in respect of the Junior Subordinated Debt Securities. See
"Description of Exchange Securities -- Description of Junior Subordinated Debt
Securities -- Enforcement of Certain Rights by Holders of Capital Securities,"
"Description of Exchange Securities -- Description of Junior Subordinated Debt
Securities -- Debenture Events of Default" and "Description of Exchange
Securities -- Description of Guarantee."
The Declaration provides that each holder of Trust Securities by acceptance
thereof agrees to the provisions of the Guarantee and the Indenture. The Bank of
New York acts as Guarantee Trustee under the Guarantee Agreement and holds the
Guarantee for the benefit of the holders of the Trust Securities. The Bank of
New York also acts as Property Trustee under the Declaration and as Debenture
Trustee under the Indenture.
LIMITED VOTING RIGHTS
Holders of Capital Securities will generally have limited voting rights
relating only to the modification of the Capital Securities, the dissolution,
winding-up or liquidation of the Trust and the exercise of the Trust's rights as
holder of Junior Subordinated Debt Securities. The right to vote to appoint,
remove or replace the Property Trustee or the Delaware Trustee is vested
exclusively in the holder of the Common Securities except upon the occurrence of
certain events described herein. The Property Trustee, the Administrative
Trustees and the Corporation may amend the Declaration without the consent of
holders of Capital Securities to ensure that the Trust will be classified for
United States Federal
21
<PAGE> 23
income tax purposes as a grantor trust even if such action adversely affects the
interests of such holders. See "Description of Exchange
Securities -- Description of Capital Securities -- Removal of Issuer Trustees"
and " -- Voting Rights; Amendment of the Declaration."
CONSEQUENCES OF A FAILURE TO EXCHANGE OLD CAPITAL SECURITIES
The Old Capital Securities have not been registered under the Securities
Act or any state securities laws and therefore may not be offered, sold or
otherwise transferred except in compliance with the registration requirements of
the Securities Act and any other applicable securities laws, or pursuant to an
exemption therefrom or in a transaction not subject thereto, and in each case in
compliance with certain other conditions and restrictions. Old Capital
Securities which remain outstanding after consummation of the Exchange Offer
will continue to bear a legend reflecting such restrictions on transfer. In
addition, upon consummation of the Exchange Offer, holders of Old Capital
Securities which remain outstanding will not be entitled to any rights to have
such Old Capital Securities registered under the Securities Act or to any
similar rights under the Registration Agreement (subject to certain limited
exceptions). The Corporation and the Trust do not intend to register under the
Securities Act any Old Capital Securities which remain outstanding after
consummation of the Exchange Offer (subject to such limited exceptions, if
applicable).
The Registration Agreement provides, under certain circumstances, for
additional interest to become payable in respect of the Old Junior Subordinated
Debt Securities as liquidated damages, and for corresponding additional
Distributions to become payable in respect of the Old Capital Securities.
Following consummation of the Exchange Offer, the Old Capital Securities will
not be entitled to any such additional Distributions.
To the extent that Old Capital Securities are tendered and accepted in the
Exchange Offer, a holder's ability to sell untendered Old Capital Securities
could be adversely affected. In addition, any trading market for Old Capital
Securities which remain outstanding after the Exchange Offer could be adversely
affected.
The Exchange Capital Securities and any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer will constitute separate
series of a single class of Capital Securities under the Declaration and,
accordingly, will vote together as a single class for purposes of determining
whether holders of the requisite percentage in outstanding Liquidation Amount
thereof have taken certain actions or exercised certain rights under the
Declaration. See "Description of Exchange Securities -- Description of Capital
Securities -- General."
ABSENCE OF PUBLIC MARKET
The Old Capital Securities were issued to, and the Corporation believes are
currently owned by, a relatively small number of beneficial owners. The Old
Capital Securities have not been registered under the Securities Act and will be
subject to restrictions on transferability to the extent that they are not
exchanged for the Exchange Capital Securities. Although the Exchange Capital
Securities will generally be permitted to be resold or otherwise transferred by
the holders thereof without compliance with the registration requirements under
the Securities Act, they will constitute a new issue of securities with no
established trading market. Capital Securities may be transferred by the holders
thereof only in blocks having a Liquidation Amount of not less than $100,000
(100 Capital Securities). The Corporation and the Trust have been advised by the
Initial Purchasers that the Initial Purchasers presently intend to make a market
in the Exchange Capital Securities and the Old Capital Securities. However, the
Initial Purchasers are not obligated to do so and any market-making activity
with respect to the Exchange Capital Securities or the Old Capital Securities
may be discontinued at any time without notice. In addition, such market-making
activity will be subject to the limits imposed by the Securities Act and the
Exchange Act. Accordingly, no assurance can be given that an active public or
other market will develop for the Exchange Capital Securities or the Old Capital
Securities or as to the liquidity of or the trading market for the Exchange
Capital Securities or the Old Capital Securities. If an active public market
does not exist for the Exchange Capital Securities or the Old Capital
Securities, as the case may be, the market price and liquidity of such Capital
Securities may be adversely affected.
Future trading prices of the Capital Securities will depend on many
factors, including, among other things, prevailing interest rates, results of
operations of the Corporation and the market for similar securities. Under
certain circumstances, the Capital Securities may trade at a discount.
22
<PAGE> 24
Notwithstanding the registration of the Exchange Capital Securities in the
Exchange Offer, holders who are "affiliates" (as defined under Rule 405 of the
Securities Act) of the Corporation or the Trust may publicly offer for sale or
resell the Exchange Securities only in compliance with the provisions of Rule
144 under the Securities Act.
Each broker-dealer that receives Exchange Capital Securities for its own
account in exchange for Old Capital Securities, where such Old Capital
Securities were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Capital Securities.
See "Plan of Distribution."
EXCHANGE OFFER PROCEDURES
Issuance of Exchange Capital Securities in exchange for Old Capital
Securities pursuant to the Exchange Offer will be made only after timely receipt
by the Trust of such Old Capital Securities, a properly completed and duly
executed Letter of Transmittal and all other required documents. Therefore,
holders of Old Capital Securities desiring to tender such Old Capital Securities
in exchange for Exchange Capital Securities should allow sufficient time to
ensure timely delivery. The Trust is under no duty to give notification of
defects or irregularities with respect to the tenders of Old Capital Securities
for exchange. Alternate arrangements are available under limited circumstances
provided specific conditions are satisfied. See "The Exchange
Offer -- Procedures for Tendering Old Capital Securities -- Guaranteed
Delivery."
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges of
the Corporation for the respective periods indicated.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
1992 1993 1994 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Excluding interest on deposits.................. 3.92 2.81 2.51 2.22 2.59
Including interest on
deposits...................................... 1.52 1.67 1.61 1.49 1.50
</TABLE>
For the purpose of computing the consolidated ratios of earnings to fixed
charges, earnings represent consolidated income before income taxes plus fixed
charges. Fixed charges excluding interest on deposits consist of interest on
long-term debt and short-term borrowings and one-third of rental expense (which
is deemed representative of the interest factor). Fixed charges including
interest on deposits consist of the foregoing items plus interest on deposits.
USE OF PROCEEDS FROM SALE OF OLD CAPITAL SECURITIES
Neither the Corporation nor the Trust will receive any cash proceeds from
the issuance of the Exchange Capital Securities offered hereby. In consideration
for issuing the Exchange Capital Securities in exchange for Old Capital
Securities as described in this Prospectus, the Trust will receive Old Capital
Securities in like Liquidation Amount. The Old Capital Securities surrendered in
exchange for the Exchange Capital Securities will be retired and canceled.
All of the proceeds from the sale of the Old Capital Securities and the
Common Securities were invested by the Trust in the Old Junior Subordinated Debt
Securities. The Corporation has applied the net proceeds from the sale of the
Old Junior Subordinated Debt Securities to its general funds to be used by its
management for general corporate purposes, including, from time to time, the
making of advances to its subsidiaries. Such advances may require the approval
of bank regulatory authorities, and, pending ultimate application, the net
proceeds may be used to make short-term investments or reduce short-term
borrowings. Pending such application by the Corporation, such net proceeds may
be temporarily invested in short-term interest-bearing securities or used to
reduce short-term borrowings.
Management anticipates that the Corporation may, from time to time, engage
in additional equity or debt financings.
23
<PAGE> 25
CAPITALIZATION OF THE CORPORATION
The following table sets forth the consolidated capitalization of the
Corporation and its subsidiaries as of December 31, 1996. The following data
should be read in conjunction with the consolidated financial statements and
notes thereto of the Corporation and its subsidiaries incorporated herein by
reference. See "Incorporation of Certain Documents by Reference."
<TABLE>
<CAPTION>
DECEMBER 31, 1996
-----------------
(IN THOUSANDS)
<S> <C>
DEBT:
Short-term borrowings....................................................... 293,257
Total long-term debt(1)..................................................... 932,143
--------
Total debt............................................................. 1,225,400
========
SHAREHOLDERS' EQUITY:
Common stock -- $2.00 par value -- 100,000,000 shares authorized, 39,959,234
shares issued and outstanding............................................. 79,918
Surplus..................................................................... 186,391
Unrealized Valuation Adjustments............................................ (3,722)
Retained earnings........................................................... 803,535
--------
Total shareholders' equity............................................. 1,066,122
--------
TOTAL CAPITALIZATION.............................................. $ 2,291,522
========
</TABLE>
- ---------------
(1) The company-obligated mandatorily redeemable capital securities of
subsidiary trust are included in long-term debt. The Trust is a wholly owned
subsidiary of the Corporation and holds the Junior Subordinated Debt
Securities as its sole asset.
24
<PAGE> 26
DIVIDEND HISTORY
The Corporation has paid a regular quarterly dividend on its Common Stock
since such payment began in 1971.
BANCORP HAWAII CAPITAL TRUST I
The Trust is a statutory business trust formed under Delaware law pursuant
to (i) the original declaration of trust executed by the Corporation, as
Depositor, The Bank of New York (Delaware), as Delaware Trustee, and the
administrative trustees named therein, which original declaration of trust was
amended and restated and executed by the Corporation, as Depositor, The Bank of
New York, as Property Trustee, The Bank of New York (Delaware), as Delaware
Trustee, and the Administrative Trustees named therein (the "Declaration") and
(ii) the filing of a certificate of trust with the Delaware Secretary of State.
The Trust exists for the exclusive purposes of (i) issuing and selling the Trust
Securities, (ii) using the proceeds from the sale of the Old Capital Securities
and the Common Securities to acquire the Old Junior Subordinated Debt
Securities, (iii) exchanging the Old Junior Subordinated Debt Securities for the
Exchange Subordinated Debt Securities in the Exchange Offer, (iv) making
Distributions and (v) engaging in only those other activities necessary,
advisable or incidental thereto. Holders of the Trust Securities have no
preemptive or similar rights. The Trust may not borrow money or issue debt or
mortgage or pledge any of its assets. Accordingly, the Junior Subordinated Debt
Securities will be the sole assets of the Trust, and payments under the Junior
Subordinated Debt Securities and the expense provisions under the Indenture will
be the sole revenues of the Trust. All of the Common Securities will be owned
directly or indirectly by the Corporation. The Common Securities will rank pari
passu, and payments will be made thereon pro rata, with the Capital Securities,
except that upon the occurrence and continuance of an Event of Default under the
Declaration resulting from a Debenture Event of Default, the rights of the
Corporation as holder of the Common Securities to payment in respect of
Distributions and payments upon liquidation, redemption or otherwise will be
subordinated to the rights of the holders of the Capital Securities. See
"Description of Exchange Securities -- Description of Capital
Securities -- Subordination of Common Securities." The Corporation acquired
Common Securities in an aggregate Liquidation Amount equal to 3% of the total
capital of the Trust. The Trust has a term of 54 years, but may terminate
earlier as provided in the Declaration. The Trust's business and affairs are
conducted by its trustees, each appointed by the Corporation as holder of the
Common Securities. The trustees for the Trust are The Bank of New York, as
Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, and two
individual trustees as Administrative Trustees who are employees or officers of
or affiliated with the Corporation (collectively, the "Issuer Trustees"). The
Bank of New York, as Property Trustee, acts as sole indenture trustee under the
Declaration. The Bank of New York also acts as trustee under the Guarantee and
the Indenture. See "Description of Exchange Securities -- Description of Junior
Subordinated Debt Securities" and "Description of Exchange
Securities -- Description of Guarantee." The holder of the Common Securities of
the Trust, or the holders of a majority in Liquidation Amount of the Capital
Securities if an Event of Default under the Declaration resulting from a
Debenture Event of Default has occurred and is continuing, will be entitled to
appoint, remove or replace the Property Trustee and/or the Delaware Trustee. In
no event will the holders of the Capital Securities have the right to vote to
appoint, remove or replace the Administrative Trustees; such voting rights are
vested exclusively in the holder of the Common Securities. The duties and
obligations of each Issuer Trustee are governed by the Declaration. Pursuant to
the expense provisions under the Indenture, the Corporation will pay all fees
and expenses related to the Trust and the Exchange Offer and will pay, directly
or indirectly, all ongoing costs, expenses and liabilities of the Trust. See
"Description of Exchange Securities -- Description of Capital
Securities -- Expenses and Taxes." The principal executive office of the Trust
is in care of
Bancorp Hawaii, Inc.
130 Merchant Street
Honolulu, Hawaii 96813
Telephone: (808) 643-3888
Attention: Corporate Secretary
25
<PAGE> 27
BANCORP HAWAII, INC.
Bancorp Hawaii, Inc. is a regional multi-bank holding company registered
under the Bank Holding Company Act of 1956, as amended. As of December 31, 1996,
the Corporation had total assets of $14.0 billion and was, in terms of assets,
the largest bank holding company headquartered in Hawaii.
The Corporation was organized under the laws of Hawaii on August 12, 1971,
as the first bank holding company in the State of Hawaii, and has been
continuously in business since. Its principal executive offices are located at
130 Merchant Street, Honolulu, Hawaii, and its telephone number is 808-643-3888.
The Corporation provides varied financial services to customers in Hawaii,
other areas of the Pacific Basin, Asia and the U.S. Mainland. The principal
subsidiaries of the Corporation are Bank of Hawaii and Bancorp Pacific, Inc. (a
savings and loan holding company formerly known as FirstFed America, Inc.).
The Bank was organized under the laws of Hawaii on December 17, 1897, and
has been continuously in business since. Its headquarters are in Honolulu,
Hawaii, and its deposits are insured by the Federal Deposit Insurance
Corporation ("FDIC"). It is not a member of the Federal Reserve.
The Bank, with total assets of $12.5 billion as of December 31, 1996,
provides general retail and commercial banking services in its four primary
markets: Hawaii, the Pacific Islands, Asia, and the U.S. Mainland, through
branch offices in the State of Hawaii, an Edge Act office in New York City and
branches or representative offices in American Samoa, Bahamas (Nassau),
Commonwealth of the Northern Mariana Islands (Saipan), Federated States of
Micronesia (Pohnpei, Kosrae and Yap), Guam, Hong Kong, Japan (Tokyo), Korea
(Seoul), Philippines (Manila, Davao, and Cebu), Republic of Fiji (Suva, Nadi,
and Lautoka), Republic of the Marshall Islands (Majuro), Republic of Palau
(Koror), Singapore and Taiwan (Taipei). The Bank also has affiliates in New
Caledonia, Solomon Islands, Tahiti, Tonga, Vanuatu and Western Samoa.
The Bank focuses its lending activities on loans to small and middle market
businesses operating in its local markets, loans to Fortune 1000 companies that
may have a Pacific orientation, loans to the communications and media industry,
and loans secured by real estate properties. At December 31, 1996, the Bank's
net loan portfolio totaled $7.1 billion and consisted of approximately 23.7%
commercial and industrial loans, approximately 39.4% real estate loans, 20.3%
foreign loans, with the balance of loans concentrated in the consumer,
international and lease financing sectors. The largest segment of the Bank's
real estate loan portfolio was represented by domestic loans secured by
residential properties which totaled approximately 55.2% of the total domestic
real estate loan portfolio at December 31, 1996. The remainder of this portfolio
consisted mainly of loans on income producing commercial properties.
Non-performing assets for the Bank totaled $69.4 million at December 31, 1996,
which was 0.94% of total loans and other real estate owned. The Bank's loan loss
reserve at that date was 2.06% of total loans, representing 215.3% of
non-performing assets.
Bank of Hawaii owns all the outstanding stock of Hawaiian Trust Company,
Limited, Bank of Hawaii International, Inc. and other subsidiaries engaged in
lease financing, international payments, securities brokerage, insurance agency
and investment advisory services. Hawaiian Trust Company, which was organized
under the laws of Hawaii on August 10, 1898, offers trust services primarily in
the State of Hawaii and the Territory of Guam. Through the Bank's ownership of
Bank of Hawaii International, Inc., formed in 1968, equity interests are held in
the following foreign financial institutions: Bank of Tonga -- 30%; Banque de
Nouvelle Caledonie, New Caledonia -- 91%; Banque de Tahiti -- 92%; Pacific
Commercial Bank, Limited, Western Samoa -- 43%; Banque d'Hawaii (Vanuatu)
Ltd. -- 100%; and National Bank of Solomon Islands Ltd. -- 51%.
Bancorp Pacific, Inc.'s only significant business is conducted through its
wholly owned subsidiary, First Federal Savings and Loan Association of America.
First Federal, a federally chartered stock savings and loan association,
has been in operations since 1904. In 1978, First Federal merged with Island
Federal Savings and Loan Association of Honolulu, Hawaii, and during the 1980s
acquired several smaller savings and loan associations. First Federal operates
25 full service offices throughout Hawaii. Its deposits are also insured by the
FDIC. As of December 31, 1996, First Federal had total assets of $1.2 billion
and total deposits of $867.9 million. Its subsidiary, First Savings and Loan
Association of America, operates three offices in the Territory of Guam and one
in Saipan.
26
<PAGE> 28
The Corporation also owns all the outstanding stock (except for directors'
qualifying shares) of First National Bank of Arizona, organized under the laws
of the United States and having its principal office in Phoenix, Arizona. First
National Bank of Arizona, with assets of $203.3 million as of December 31, 1996,
provides customary banking services through six branches located in the State of
Arizona. First National Bank of Arizona has agreed to acquire four additional
branches in Arizona from Home Savings of America, F.S.B. with combined deposits
of approximately $250 million. In addition, the Corporation owns other
non-banking subsidiaries engaged in insurance agency and credit life insurance
services.
The Corporation and its subsidiaries are subject to extensive regulation by
federal and state regulators, including the Board of Governors of the Federal
Reserve, the FDIC, the Office of Thrift Supervision, the Comptroller of the
Currency, and the Department of Commerce and Consumer Affairs of the State of
Hawaii. These regulatory bodies examine the Corporation or one or more of its
subsidiaries and supervise numerous aspects of their business.
Various provisions of federal and state law may affect the ability of the
Corporation to pay capital distributions to holders of the Exchange Capital
Securities under certain circumstances. These are described in the paragraphs
which follow.
The Corporation is a legal entity separate and distinct from the Bank and
its other subsidiaries and affiliates. Because the Corporation is a holding
company, its rights and the rights of its creditors and stockholders, including
the holders of the Junior Subordinated Debt Securities and the Guarantee, to
participate in the assets of any subsidiary upon the latter's liquidation or
recapitalization will be subject to the prior claims of such subsidiary's
creditors, except to the extent that the Corporation may itself be a creditor
with recognized claims against such subsidiary, in which case it will share in
such assets with other creditors. Moreover, in the event of the institution of a
proceeding under the Bankruptcy Code to reorganize or liquidate the Corporation,
any commitment by the Corporation made to a federal regulator to maintain the
capital of an insured depository institution subsidiary would be entitled to a
priority over third party creditors of the Corporation.
There are various legal limitations on the extent to which the
Corporation's depository institution subsidiaries may extend credit, pay
dividends or otherwise supply funds to the Corporation. In determining whether
and to what extent to pay dividends, each depository subsidiary must consider
the effect of dividend payments on applicable risk-based capital and leverage
ratio requirements, as well as statutory restrictions and policy statements of
the federal regulatory agencies that indicate that organizations should
generally pay dividends out of current operating earnings. Where a depository
institution subsidiary of the Corporation fails to meet any minimum capital
requirement or where the payment of a capital distribution would cause it to
fail to meet such requirement, federal law generally prohibits such subsidiary
from making a capital distribution to the Corporation and in certain
circumstances, the Corporation from making any capital distribution to its
shareholders.
The Corporation also derives dividends from its non-depository institution
subsidiaries. These subsidiaries may be subject to regulatory restrictions on
their payment of dividends to the Corporation. In addition, there are numerous
governmental requirements and regulations that affect the activities of the
Corporation and its depository institution and non-depository institution
subsidiaries.
Under long-standing policy of the Federal Reserve, a bank holding company
is expected to act as a source of financial strength for its subsidiary banks
and to commit resources to support such banks. As a result of that policy, the
Corporation may be required to commit resources to its subsidiary banks in
circumstances where it might not otherwise do so.
In the event that the FDIC sustains losses resulting from the provision of
assistance to or the failure of a depository institution owned by the
Corporation, other depository institution subsidiaries of the Corporation could
be assessed for such losses under federal law.
27
<PAGE> 29
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
In connection with the sale of the Old Capital Securities, the Corporation
and the Trust entered into the Registration Agreement with the Initial
Purchasers, pursuant to which the Corporation and the Trust agreed, among other
things, to file and to use their reasonable efforts to cause to become effective
with the Commission a registration statement with respect to the exchange of the
Old Capital Securities for capital securities with terms identical in all
material respects to the terms of the Old Capital Securities. A copy of the
Registration Agreement has been filed as an Exhibit to the Registration
Statement of which this Prospectus is a part.
The Exchange Offer is being made to satisfy the contractual obligations of
the Corporation and the Trust under the Registration Agreement. The form and
terms of the Exchange Capital Securities are the same as the form and terms of
the Old Capital Securities except that the Exchange Capital Securities have been
registered under the Securities Act and therefore will not be subject to certain
restrictions on transfer applicable to the Old Capital Securities and will not
provide for any additional Distributions for failing to comply with the
Registration Agreement. In that regard, the Old Capital Securities provide,
among other things, that, if the Exchange Offer is not consummated within a
specified period after the date the Old Capital Securities were issued, the Old
Capital Securities will be entitled to additional Distributions at the rate of
0.25% per annum of the Liquidation Amount thereof until the Exchange Offer is
consummated. Upon consummation of the Exchange Offer, holders of Old Capital
Securities will not be entitled to any such additional Distributions or any
further registration rights under the Registration Agreement, except under
limited circumstances. See "Risk Factors -- Consequences of a Failure to
Exchange Old Capital Securities" and "Description of the Old Securities."
The Exchange Offer is not being made to, nor will the Corporation or the
Trust accept tenders for exchange from, holders of Old Capital Securities in any
jurisdiction in which the Exchange Offer or the acceptance thereof would not be
in compliance with the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect to
the Exchange Offer means any person in whose name the Old Capital Securities are
registered on the books of the Trust or any other person who has obtained a
properly completed bond power from the registered holder, or any person whose
Old Capital Securities are held of record by The Depository Trust Company
("DTC") who desires to deliver such Old Capital Securities by book-entry
transfer at DTC.
Pursuant to the Exchange Offer, the Corporation will exchange, as soon as
practicable after the date hereof, the Old Guarantee for the Exchange Guarantee
and all of the Old Junior Subordinated Debt Securities, of which $[ ]
aggregate principal amount is outstanding, for a like aggregate principal amount
of the Exchange Junior Subordinated Debt Securities. The Exchange Guarantee and
the Exchange Junior Subordinated Debt Securities have been registered under the
Securities Act.
TERMS OF THE EXCHANGE
The Corporation and the Trust hereby offer, upon the terms and subject to
the conditions set forth in this Prospectus and in the accompanying Letter of
Transmittal, to exchange up to $100,000,000 aggregate Liquidation Amount of
Exchange Capital Securities for a like aggregate Liquidation Amount of Old
Capital Securities properly tendered on or prior to the Expiration Date and not
properly withdrawn in accordance with the procedures described below. The Trust
will issue, promptly after the Expiration Date, an aggregate Liquidation Amount
of up to $100,000,000 of Exchange Capital Securities in exchange for a like
Liquidation Amount of outstanding Old Capital Securities tendered and accepted
in connection with the Exchange Offer. Holders may tender their Old Capital
Securities in whole or in part in a Liquidation Amount of not less than $100,000
or any integral multiple of $1,000 in excess thereof.
The Exchange Offer is not conditioned upon any minimum Liquidation Amount
of Old Capital Securities being tendered. As of the date of this Prospectus,
$100,000,000 aggregate Liquidation Amount of the Old Capital Securities is
outstanding.
Holders of Old Capital Securities do not have any appraisal or dissenters'
rights in connection with the Exchange Offer. Old Capital Securities which are
not tendered or are tendered but not accepted in connection with the Exchange
28
<PAGE> 30
Offer will remain outstanding and be entitled to the benefits of the
Declaration, but will not be entitled to any additional Distributions under the
Registration Agreement, except under limited circumstances. See "Risk
Factors -- Consequences of a Failure to Exchange Old Capital Securities" and
"Description of the Old Securities."
If any tendered Old Capital Securities are not accepted for exchange
because of an invalid tender, the occurrence of certain other events set forth
herein or otherwise, certificates for any such unaccepted Old Capital Securities
will be returned, without expense, to the tendering holder thereof promptly
after the Expiration Date.
Holders who tender Old Capital Securities in connection with the Exchange
Offer will not be required to pay brokerage commissions or fees or, subject to
the instructions in the Letter of Transmittal, transfer taxes with respect to
the exchange of Old Capital Securities in connection with the Exchange Offer.
The Corporation will pay all charges and expenses, other than certain applicable
taxes described below, in connection with the Exchange Offer. See "-- Fees and
Expenses."
NEITHER THE BOARD OF DIRECTORS OF THE CORPORATION NOR THE TRUSTEES OF THE
TRUST MAKES ANY RECOMMENDATION TO HOLDERS OF OLD CAPITAL SECURITIES AS TO
WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF THEIR OLD
CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO ONE HAS BEEN
AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF OLD CAPITAL SECURITIES
MUST MAKE THEIR OWN DECISION BASED ON THEIR OWN FINANCIAL POSITION AND
REQUIREMENTS WHETHER TO TENDER PURSUANT TO THE EXCHANGE OFFER AND, IF SO, THE
AGGREGATE LIQUIDATION AMOUNT OF OLD CAPITAL SECURITIES TO TENDER AFTER READING
THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND CONSULTING WITH THEIR
ADVISERS, IF ANY.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" means 5:00 p.m., New York City time, on
, 1997 unless the Exchange Offer is extended by the Corporation and
the Trust (in which case the term "Expiration Date" shall mean the latest date
and time to which the Exchange Offer is extended).
The Corporation and the Trust expressly reserve the right in their sole and
absolute discretion, subject to applicable law, at any time and from time to
time, (i) to delay the acceptance of the Old Capital Securities for exchange,
(ii) to terminate the Exchange Offer (whether or not any Old Capital Securities
have theretofore been accepted for exchange) if the Corporation and the Trust
determine, in their sole and absolute discretion, that any of the events or
conditions referred to under "-- Conditions to the Exchange Offer" have occurred
or exist or have not been satisfied, (iii) to extend the Expiration Date of the
Exchange Offer and retain all Old Capital Securities tendered pursuant to the
Exchange Offer, subject, however, to the right of holders of Old Capital
Securities to withdraw their tendered Old Capital Securities as described under
"-- Withdrawal Rights," and (iv) to waive any condition or otherwise amend the
terms of the Exchange Offer in any respect. If the Exchange Offer is amended in
a manner determined by the Corporation and the Trust to constitute a material
change, or if the Corporation and the Trust waive a material condition of the
Exchange Offer, the Corporation or the Trust will promptly disclose such
amendment or waiver by means of a prospectus supplement that will be distributed
to the registered holders of the Old Capital Securities, and the Corporation and
the Trust will extend the Exchange Offer to the extent required by applicable
law.
Any such delay in acceptance, extension, termination or amendment will be
followed promptly by oral or written notice thereof to the Exchange Agent and by
making a public announcement thereof, and such announcement in the case of an
extension will be made no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date. Without limiting
the manner in which the Corporation or the Trust may choose to make any public
announcement and subject to applicable law, neither the Corporation nor the
Trust shall have any obligation to publish, advertise or otherwise communicate
any such public announcement other than by issuing a release to an appropriate
news agency.
PROCEDURES FOR TENDERING OLD CAPITAL SECURITIES
Valid Tender. Except as set forth below, in order for Old Capital
Securities to be validly tendered pursuant to the Exchange Offer, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required
29
<PAGE> 31
signature guarantees and any other required documents, must be received by the
Exchange Agent at its address set forth under "-- Exchange Agent". In addition,
either (i) certificates for such Old Capital Securities must be received by the
Exchange Agent or (ii) a timely confirmation of a book-entry transfer
("Book-Entry Confirmation") of such Old Capital Securities, if that procedure is
available, into the Exchange Agent's account at DTC pursuant to the procedure
for book-entry transfer described below, must be received by the Exchange Agent,
in each case on or prior to the Expiration Date or (iii) the holder must comply
with the guaranteed delivery procedures set forth below.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER,
AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE
AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN RECEIPT REQUESTED,
PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
The tender by a holder of Old Capital Securities that is not withdrawn
before the Expiration Date will constitute an agreement between such holder and
the Corporation and the Trust in accordance with the terms and subject to the
conditions set forth herein and in the Letter of Transmittal.
Any beneficial owner whose Old Capital Securities are registered in the
name of a broker, dealer, commercial bank, trust company, or other nominee and
who wishes to tender should contact the registered holder promptly and instruct
such registered holder to tender on the beneficial owner's behalf. If the
beneficial owner wishes to tender on his own behalf, the owner must, prior to
completing and executing the Letter of Transmittal and delivering Old Capital
Securities Certificates, either make appropriate arrangements to register
ownership of the Old Capital Securities in such beneficial owner's name or
obtain a properly completed bond power from the registered holder. The transfer
of registered ownership may take considerable time.
If less than all of the Old Capital Securities held by a holder are
tendered, such tendering holder should fill in the amount of Old Capital
Securities being tendered in the appropriate box on the Letter of Transmittal.
The entire amount of Old Capital Securities delivered to the Exchange Agent will
be deemed to have been tendered unless otherwise indicated.
Signatures. Certificates for the Old Capital Securities need not be
endorsed and signature guarantees on the Letter of Transmittal, or a notice of
withdrawal, as the case may be, are unnecessary unless (a) a certificate for the
Old Capital Securities is registered in a name other than that of the person
surrendering the certificate or (b) such registered holder completes the box
entitled "Special Issuance Instructions" or "Special Delivery Instructions" in
the Letter of Transmittal. In the case of (a) or (b) above, such certificates
for Old Capital Securities must be duly endorsed or accompanied by a properly
executed bond power, with the endorsement or signature on the bond power and on
the Letter of Transmittal guaranteed by a firm or other entity identified in
Rule 17Ad-15 under the Exchange Act as an "eligible guarantor institution,"
including (as such terms are defined therein): (i) a bank; (ii) a broker,
dealer, municipal securities broker or dealer or government securities broker or
dealer; (iii) a credit union; (iv) a national securities exchange, registered
securities association or clearing agency; or (v) a savings association that is
a participant in a Securities Transfer Association (each, an "Eligible
Institution"), unless surrendered on behalf of such Eligible Institution. See
Instruction 1 to the Letter of Transmittal.
If any Letter of Transmittal, endorsement, bond power, power of attorney,
or any other document required by the Letter of Transmittal is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and unless waived by the
Corporation or the Trust, proper evidence satisfactory to the Corporation or the
Trust, in its sole discretion, of such person's authority to so act must be
submitted.
Determination of Validity. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange of
any tendered Old Capital Securities will be determined by the Corporation and
the Trust, in their sole discretion, whose determination shall be final and
binding on all parties. The Corporation and the Trust reserve the absolute
right, in their sole and absolute discretion, to reject any and all tenders
determined by them not to be in proper form or the acceptance of which, or
exchange for, may, in the view of counsel to the Corporation and the Trust, be
unlawful. The Corporation and the Trust also reserve the absolute right, subject
to applicable law, to waive any
30
<PAGE> 32
of the conditions of the Exchange Offer as set forth under "-- Conditions to the
Exchange Offer" or any condition or irregularity in any tender of Old Capital
Securities of any particular holder, whether or not similar conditions or
irregularities are waived in the case of other holders.
The Corporation's and the Trust's interpretation of the terms and
conditions of the Exchange Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding. No tender of Old Capital
Securities will be deemed to have been validly made until all irregularities
with respect to such tender have been cured or waived. Neither the Corporation,
the Trust, any affiliates or assigns of the Corporation, the Trust, the Exchange
Agent nor any other person shall be under any duty to give any notification of
any irregularities in tenders or incur any liability for failure to give any
such notification.
Acceptance of Old Capital Securities for Exchange; Delivery of Exchange
Capital Securities. Upon the terms and subject to the conditions of the
Exchange Offer, the Corporation will exchange, and will issue to the Exchange
Agent, Exchange Capital Securities for Old Capital Securities validly tendered
and not withdrawn (pursuant to the withdrawal rights described under
"-- Withdrawal of Tenders") promptly after the Expiration Date.
In all cases, delivery of Exchange Capital Securities in exchange for Old
Capital Securities tendered and accepted for exchange pursuant to the Exchange
Offer will be made only after timely receipt by the Exchange Agent of (i) Old
Capital Securities or a Book-Entry Confirmation (as defined below), (ii) the
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees, and (iii) any other documents
required by the Letter of Transmittal.
Subject to the terms and conditions of the Exchange Offer, the Corporation
and the Trust will be deemed to have accepted for exchange, and thereby
exchanged, Old Capital Securities validly tendered and not withdrawn as, if and
when the Corporation or the Trust gives oral or written notice to the Exchange
Agent of the Corporation's and the Trust's acceptance of such Old Capital
Securities for exchange pursuant to the Exchange Offer. The Exchange Agent will
act as Agent for the Corporation and the Trust for the purpose of receiving
tenders of Old Capital Securities, Letters of Transmittal and related documents,
and as agent for tendering holders for the purpose of receiving Old Capital
Securities, Letters of Transmittal and related documents and transmitting
Exchange Capital Securities to validly tendering holders. Such exchange will be
made promptly after the Expiration Date. If, for any reason whatsoever,
acceptance for exchange or the exchange of any Old Capital Securities tendered
pursuant to the Exchange Offer is delayed (whether before or after the
Corporation's and the Trust's acceptance for exchange of Old Capital Securities)
or the Corporation or the Trust extends the Exchange Offer or is unable to
accept for exchange or exchange Old Capital Securities tendered pursuant to the
Exchange Offer, then, without prejudice to the Corporation or the Trust's rights
set forth herein, the Exchange Agent may, nevertheless, on behalf of the
Corporation and the Trust (and subject to applicable law), retain tendered Old
Capital Securities and such Old Capital Securities may not be withdrawn except
to the extent tendering holders are entitled to withdrawal rights as described
under "-- Withdrawal of Tenders."
Pursuant to the Letter of Transmittal, a holder of Old Capital Securities
will represent and warrant in the Letter of Transmittal that it has full power
and authority to tender, exchange, sell, assign and transfer Old Capital
Securities, that the Trust will acquire good, marketable and unencumbered title
to the tendered Old Capital Securities, free and clear of all liens,
restrictions, charges and encumbrances, and that the Old Capital Securities
tendered for exchange are not subject to any adverse claims or proxies. The
holder will further represent and warrant that any Exchange Capital Securities
acquired in exchange for Old Capital Securities tendered thereby will have been
acquired in the ordinary course of business by the person receiving such
Exchange Capital Securities, that neither the holder of the Old Capital
Securities nor other person presenting the Old Capital Securities for Exchange
has an arrangement or understanding with any person to participate in the
distribution of the Exchange Capital Securities and that neither the holder of
the Old Capital Securities nor other person presenting the Old Capital
Securities for Exchange is an "affiliate" as defined in Rule 405 under the
Securities Act of the Company or the Trust. The holder also will represent and
warrant that it will, upon request, execute and deliver any additional documents
deemed by the Corporation, the Trust or the Exchange Agent to be necessary or
desirable to complete the exchange, sale, assignment and transfer of the Old
Capital Securities tendered pursuant to the Exchange Offer.
Notwithstanding any other provision hereof, the delivery of Exchange
Capital Securities in exchange for Old Capital Securities tendered and accepted
for exchange pursuant to the Exchange Offer will in all cases be made only after
timely receipt by the Exchange Agent of Old Capital Securities and a properly
completed and duly executed Letter of
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Transmittal (or facsimile thereof), together with any required signature
guarantees and any other documents required by the Letter of Transmittal, or of
a Book-Entry Confirmation with respect to such Old Capital Securities.
Accordingly, the delivery of Exchange Capital Securities might not be made to
all tendering holders at the same time, and will depend upon when Old Capital
Securities, Book-Entry Confirmations with respect to Old Capital Securities and
other required documents are received by the Exchange Agent.
Book-Entry Transfer. The Exchange Agent will make a request to establish
an account with respect to the Old Capital Securities at DTC for purposes of the
Exchange Offer within two business days after the date of this Prospectus. Any
financial institution that is a participant in DTC's book-entry transfer
facility system may make a book-entry delivery of the Old Capital Securities by
causing DTC to transfer such Old Capital Securities into the Exchange Agent's
account at DTC in accordance with DTC's procedures for transfers. However,
although delivery of Old Capital Securities may be effected through book-entry
transfer into the Exchange Agent's account at DTC, the Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees and any other required documents, must, in any case other
than as set forth in the following paragraph, be transmitted to and received by
the Exchange Agent at its address set forth under "-- Exchange Agent" on or
prior to the Expiration Date, or the guaranteed delivery procedure set forth
below must be complied with in order for such Old Capital Securities to be
properly tendered.
DTC's Automated Tender Offer Program ("ATOP") is the only method of
processing exchange offers through DTC. To accept the Exchange Offer through
ATOP, participants in DTC must send electronic instructions to DTC through DTC's
communication system in place for sending signed, hard copies of the Letter of
Transmittal. DTC is obligated to communicate those electronic instructions to
the Exchange Agent. To tender Old Capital Securities through ATOP, the
electronic instructions sent to DTC and transmitted by DTC to the Exchange Agent
must contain the character by which the participant acknowledges its receipt of
and agrees to be bound by the Letter of Transmittal.
Guaranteed Delivery. If a holder desires to tender Old Capital Securities
pursuant to the Exchange Offer and the certificates for such Old Capital
Securities are not immediately available or time will not permit all required
documents to reach the Exchange Agent on or before the Expiration Date, or the
procedures for book-entry transfer cannot be completed on a timely basis, such
Old Capital Securities may nevertheless be tendered, provided that all of the
following guaranteed delivery procedures are complied with:
(i) such tenders are made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form accompanying the Letter of Transmittal,
is received by the Exchange Agent on or prior to Expiration Date; and
(iii) the certificates (or a book-entry confirmation) representing all
tendered Old Capital Securities, in proper form for transfer, together with
a properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees and any other documents
required by the Letter of Transmittal, are received by the Exchange Agent
within five New York Stock Exchange trading days after the date of
execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or transmitted
by facsimile or mail, to the Exchange Agent and must include a guarantee by an
Eligible Institution in the form set forth in such notice.
Withdrawal of Tenders. Tenders of Old Capital Securities may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the Expiration Date.
For withdrawal to be effective, a written electronic ATOP transmission
notice of withdrawal (for DTC participants) must be received by the Exchange
Agent at its address set forth herein prior to 5:00 p.m., New York City time, on
the Expiration Date. Any such notice of withdrawal must (i) specify the name of
the person having tendered the Old Capital Securities to be withdrawn, (ii)
identify the Old Capital Securities to be withdrawn (including the certificate
number or numbers and Liquidation Amount of such Old Capital Securities) and
(iii) where physical certificates for Old Capital Securities have been
transmitted, specify the name in which any such Old Capital Securities are
registered, if different from that of the withdrawing holder. If physical
certificates for Old Capital Securities have been delivered or otherwise
identified to the Exchange Agent, prior to the release of such certificates, the
withdrawing holder must also submit the serial numbers of the particular
certificates to be withdrawn and a signed notice of withdrawal with signatures
guaranteed,
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as necessary. If Old Capital Securities have been tendered pursuant to the
procedure for book-entry transfer described above, any notice of withdrawal must
specify the name and number of the account at DTC to be credited with the
withdrawn Old Capital Securities and otherwise comply with DTC's procedures. All
questions as to validity, form, and eligibility (including time of receipt) of
such notices will be determined by the Corporation or the Trust, whose
determination shall be final and binding on all parties. Any Old Capital
Securities so withdrawn will be deemed not to have been validly tendered for
exchange for purposes of the Exchange Offer. Any Old Capital Securities which
have been tendered for exchange but which are not exchanged for any reason will
be returned to the holder thereof without cost to such holder (or, in the case
of Old Capital Securities tendered by book-entry transfer into the Exchange
Agent's account at DTC pursuant to the book-entry transfer procedures described
above, such Old Capital Securities will be credited to an account maintained
with DTC for the Old Capital Securities) as soon as practicable after
withdrawal, rejection of tender, or termination of the Exchange Offer. Properly
withdrawn Old Capital Securities may be retendered by following one of the
procedures described above at any time on or prior to the Expiration Date.
RESALES OF EXCHANGE CAPITAL SECURITIES
Based on existing interpretations by the staff of the Commission and
subject to the two immediately following sentences, the Corporation and the
Trust believe that the Exchange Capital Securities, the Exchange Guarantee and
the Exchange Junior Subordinated Debt Securities issued pursuant to this
Exchange Offer may be offered for resale, resold and otherwise transferred by a
holder thereof (other than a holder who is a broker-dealer) without further
compliance with the registration and prospectus delivery requirements of the
Securities Act; provided, that, such Exchange Capital Securities are acquired in
the ordinary course of such holder's business and such holder is not
participating, and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the Securities Act) of the
Exchange Capital Securities. However, any holder of Old Capital Securities who
is an "affiliate" of the Trust or the Corporation or who intends to participate
in the Exchange Offer for the purpose of distributing the Exchange Capital
Securities, or any broker-dealer who purchased the Old Capital Securities from
the Trust to resell pursuant to Rule 144A or any other available exemption under
the Securities Act, (a) will not be able to rely on the interpretations of the
staff of the Commission set forth in the above-mentioned no-action letters, (b)
will not be permitted or entitled to tender such Old Capital Securities in the
Exchange Offer and (c) must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any sale or other transfer
of such Old Capital Securities unless such sale is made pursuant to an exemption
from such requirements. In addition, as described below, if any broker-dealer
holds Old Capital Securities acquired for its own account as a result of
market-making or other trading activities and exchanges such Old Capital
Securities for Exchange Capital Securities, then such broker-dealer must deliver
a prospectus meeting the requirements of the Securities Act in connection with
any resales of such Exchange Capital Securities.
Each holder of Old Capital Securities who wishes to exchange Old Capital
Securities for Exchange Capital Securities in the Exchange Offer will be
required to represent that (i) it is not an "affiliate" of the Trust or the
Corporation, (ii) any Exchange Capital Securities to be received by it are being
acquired in the ordinary course of its business and (iii) it has no arrangement
or understanding with any person to participate in a distribution (within the
meaning of the Securities Act) of such Exchange Capital Securities. Each
broker-dealer that receives Exchange Capital Securities for its own account
pursuant to the Exchange Offer must acknowledge that it acquired the Old Capital
Securities for its own account as the result of market-making activities or
other trading activities and must agree that it will deliver a prospectus
meeting the requirements of the Securities Act in connection with any resale of
such Exchange Capital Securities. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
Based on the position taken by the staff of the Commission in the no-action
letters referred to above, the Corporation and the Trust believe that
broker-dealers who acquired Old Capital Securities for their own accounts as a
result of market-making activities or other trading activities may fulfill their
prospectus delivery requirements with respect to the Exchange Capital Securities
received upon exchange of such Old Capital Securities (other than Old Capital
Securities which represent an unsold allotment from the original sale of the Old
Capital Securities) with the prospectus prepared for the Exchange Offer so long
as it contains a description of the plan of distribution with respect to the
resale of such Exchange Capital Securities. Accordingly, subject to certain
provisions set forth in the Registration Agreement and to the limitations set
out herein, the Corporation and the Trust have agreed that this Prospectus, as
it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of such Exchange Capital Securities for
a period commencing
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on the Expiration Date and ending 180 days after the Expiration Date or, if
earlier, when all such Exchange Capital Securities have been disposed of by such
broker-dealer. See "Plan of Distribution." Any broker-dealer who is an
"affiliate" of the Trust or the Corporation may not rely on such no-action
letters and must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction.
In that regard, each broker-dealer who surrenders Old Capital Securities
pursuant to the Exchange Offer will be deemed to have agreed, by execution of
the Letter of Transmittal, that, upon receipt of notice from the Corporation or
the Trust of the occurrence of any event or the discovery of any fact which
makes any statement contained or incorporated by reference in this Prospectus
untrue in any material respect or which causes this Prospectus to omit to state
a material fact necessary in order to make the statements contained or
incorporated by reference herein, in light of the circumstances under which they
were made, not misleading or of the occurrence of certain other events specified
in the Registration Agreement, such broker-dealer will suspend the sale of
Exchange Capital Securities (or the Exchange Junior Subordinated Debt
Securities, as applicable) pursuant to this Prospectus until the Corporation or
the Trust has amended or supplemented this Prospectus to correct such
misstatement or omission and has furnished copies of the amended or supplemented
Prospectus to such broker-dealer or the Corporation or the Trust has given
notice that the sale of the Exchange Capital Securities (or the Exchange Junior
Subordinated Debt Securities, as applicable) may be resumed.
Neither the Corporation nor the Trust has sought its own interpretive
letter and there can be no assurance that the staff of the Commission would make
a similar determination with respect to the Exchange Offer as it has in such no-
action letters to third parties.
Holders of Old Capital Securities who choose not to tender their Old
Capital Securities for exchange pursuant to this exchange offer may not be able
readily to sell their securities in the future, and the Corporation and the
Trust will have no obligation to register their securities or in any way assist
such holders in future efforts to sell their Old Capital Securities.
DISTRIBUTIONS ON THE EXCHANGE CAPITAL SECURITIES
Holders of Old Capital Securities whose Old Capital Securities are accepted
for exchange will not receive accumulated Distributions on such Old Capital
Securities for any period from the Distribution Date with respect to such Old
Capital Securities immediately preceding the original issue date of the Exchange
Capital Securities or, if no such Distribution Date has occurred, from the
original issue date of such Old Capital Securities, and such tendering holders
will be deemed to have waived the right to receive any such Distributions.
However, because Distributions on the Exchange Capital Securities will
accumulate from the later of the Distribution Date of the Old Capital Securities
immediately preceding the original issue date of the Exchange Capital Securities
and the original issue date of the Old Capital Securities, the amount of the
Distributions received by holders whose Old Capital Securities are accepted for
exchange will not be affected by the exchange.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, the Trust will not be required to accept for
exchange, or to exchange, any Old Capital Securities for any Exchange Capital
Securities, and, as described below, may terminate the Exchange Offer (whether
or not any Old Capital Securities have theretofore been accepted for exchange)
or may waive any conditions to or amend the Exchange Offer, if any of the
following conditions have occurred or exist or have not been satisfied:
(a) there shall occur a change in the current interpretation by the
staff of the Commission which permits the Exchange Capital Securities
issued pursuant to the Exchange Offer in exchange for Old Capital
Securities to be offered for resale, resold and otherwise transferred by
holders thereof (other than broker-dealers and any such holder which is an
"affiliate" of the Trust or the Corporation within the meaning of Rule 405
under the Securities Act) without compliance with the registration and
prospectus delivery provisions of the Securities Act; provided that such
Exchange Capital Securities are acquired in the ordinary course of such
holder's business and such holders have no arrangement or understanding
with any person to participate in the distribution of such Exchange Capital
Securities; or
(b) any action or proceeding shall have been instituted or threatened
in any court or by or before any governmental agency or body with respect
to the Exchange Offer which, in the Corporation's and the Trust's
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judgment, would reasonably be expected to impair the ability of the
Corporation or the Trust to proceed with the Exchange Offer; or
(c) any law, statute, rule or regulation shall have been adopted or
enacted which, in the Corporation's and the Trust's judgment, would
reasonably be expected to impair the ability of the Corporation or the
Trust to proceed with the Exchange Offer; or
(d) a banking moratorium shall have been declared by United States
federal or New York State authorities which, in the Corporation's and the
Trust's judgment, would reasonably be expected to impair the ability of the
Corporation or the Trust to proceed with the Exchange Offer; or
(e) trading on the New York Stock Exchange or generally in the United
States over-the-counter market shall have been suspended by order of the
Commission or any other governmental authority which, in the Corporation's
and the Trust's judgment, would reasonably be expected to impair the
ability of the Corporation or the Trust to proceed with the Exchange Offer;
or
(f) a stop order shall have been issued by the Commission or any state
securities authority suspending the effectiveness of the Registration
Statement or proceedings shall have been initiated or, to the knowledge of
the Corporation or the Trust, threatened for that purpose, or
(g) any change, or any development involving a prospective change, in
the business or financial affairs of the Corporation or the Trust or any of
their subsidiaries shall have occurred which, in the judgment of the
Corporation and the Trust, might materially impair the ability of the
Corporation or the Trust to proceed with the Exchange Offer; or
(h) there is a reasonable likelihood in the Corporation's and the
Trust's judgment that, or a material uncertainty exists in the
Corporation's and the Trust's judgment as to whether, consummation of the
Exchange Offer would result in an adverse tax consequence to the
Corporation.
If the Corporation and the Trust determine in their sole and absolute
discretion that any of the foregoing events or conditions has occurred or exists
or has not been satisfied, the Corporation and the Trust may, subject to
applicable law, terminate the Exchange Offer (whether or not any Old Capital
Securities have theretofore been accepted for exchange) or may waive any such
condition or otherwise amend the terms of the Exchange Offer in any respect. If
such waiver or amendment constitutes a material change to the Exchange Offer,
the Corporation and the Trust will promptly disclose such waiver or amendment by
means of a prospectus supplement that will be distributed to the registered
holders of the Old Capital Securities, and the Corporation and the Trust will
extend the Exchange Offer to the extent required by applicable law.
EXCHANGE AGENT
The Bank of New York has been appointed as Exchange Agent for the Exchange
Offer. Delivery of the Letters of Transmittal and any other required documents,
questions, requests for assistance, and requests for additional copies of this
Prospectus or of the Letter of Transmittal should be directed to the Exchange
Agent as follows:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Registered or Certified Facsimile Transmission By Hand/Overnight Delivery:
Mail: Number: The Bank of New York
The Bank of New York (212) 571-3080 101 Barclay Street
101 Barclay Street - 7E (For Eligible Institutions Corporate Trust Services
Attn.: Reorganization Only) Window
Section Confirm by Telephone: Ground Level
Jodi Mancato (212) 815-2791 Attn.: Reorganization
New York, New York 10286 For Information Call: Section
(212) 815-2791
</TABLE>
Delivery to other than the above addresses or facsimile number will not
constitute a valid delivery.
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FEES AND EXPENSES
The Corporation has agreed to pay the Exchange Agent reasonable and
customary fees for its services and will reimburse it for its reasonable
out-of-pocket expenses in connection therewith. The Corporation will also pay
brokerage houses and other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of this Prospectus
and related documents to the beneficial owners of Old Capital Securities, and in
tendering for their customers.
Holders who tender their Old Capital Securities for exchange will not be
obligated to pay any transfer taxes in connection therewith. If, however,
Exchange Capital Securities are to be delivered to, or are to be issued in the
name of, any person other than the registered holder of the Old Capital
Securities tendered, or if a transfer tax is imposed for any reason other than
the exchange of Old Capital Securities in connection with the Exchange Offer,
then the amount of any such transfer taxes (whether imposed on the registered
holder or any other persons) will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
Neither the Corporation nor the Trust will make any payment to brokers,
dealers or others soliciting acceptances of the Exchange Offer.
DESCRIPTION OF EXCHANGE SECURITIES
DESCRIPTION OF CAPITAL SECURITIES
Pursuant to the terms of the Declaration, the Issuer Trustees have issued
the Old Capital Securities and the Common Securities and will issue the Exchange
Capital Securities. The Exchange Capital Securities will represent beneficial
ownership interests in the Trust and the holders thereof will be entitled to a
preference in certain circumstances with respect to Distributions and amounts
payable on redemption of the Trust Securities or liquidation of the Trust over
the Common Securities, as well as other benefits as described in the
Declaration. See "-- Subordination of Common Securities." The Declaration has
been qualified under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"). This summary of certain provisions of the Capital Securities,
the Common Securities and the Declaration does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, all the provisions
of the Declaration, including the definitions therein of certain terms. The
Declaration is filed as an exhibit to the Registration Statement of which this
Prospectus is a part.
GENERAL
The Capital Securities (including Old Capital Securities and Exchange
Capital Securities) will be limited to $100,000,000 aggregate Liquidation Amount
at any one time outstanding. The Capital Securities will rank pari passu, and
payments will be made thereon pro rata, with the Common Securities except as
described under "-- Subordination of Common Securities." Legal title to the
Junior Subordinated Debt Securities will be held by the Property Trustee in
trust for the benefit of the holders of the Capital Securities and Common
Securities. Pursuant to the Guarantee Agreement, the Corporation has agreed to
guarantee the payment of Distributions and payments on liquidation or redemption
of the Trust Securities, but only in each case to the extent of funds available
for distribution by the Trust. See "-- Description of Guarantee."
DISTRIBUTIONS
The Capital Securities represent beneficial ownership interests in the
Trust, and Distributions on each Capital Security will be payable at the annual
rate of 8.25% of the stated Liquidation Amount of $1,000 and will be payable
semi-annually in arrears on June 15 and December 15 of each year to the holders
of the Capital Securities at the close of business on the June 1 and December 1
(each, a "record date"), as the case may be, next preceding the relevant
Distribution Date (as defined herein). Distributions on the Capital Securities
will be cumulative. Distributions on the Old Capital Securities accumulate from
the date of original issuance, and the first Distribution Date thereon is June
15, 1997. Holders of Old Capital Securities whose Old Capital Securities are
accepted for exchange will not receive accumulated Distributions on such Old
Capital Securities for any period from the Distribution Date with respect to
such
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Old Capital Securities immediately preceding the original issue date of the
Exchange Capital Securities or, if no such Distribution Date has occurred, from
the original issue date of such Old Capital Securities, and such tendering
holders will be deemed to have waived the right to receive any such
Distributions. However, because Distributions on the Exchange Capital Securities
will accumulate from the later of the Distribution Date of the Old Capital
Securities immediately preceding the original issue date of the Exchange Capital
Securities and the original issue date of the Old Capital Securities, the amount
of the Distributions received by holders whose Old Capital Securities are
accepted for exchange will not be affected by the exchange. The amount of
Distributions payable for any period will be computed on the basis of a 360-day
year of twelve 30-day months. In the event that any date on which Distributions
are payable on the Capital Securities is not a Business Day (as defined herein),
payment of the Distributions payable on such date will be made on the next
succeeding day that is a Business Day (and without any additional Distributions
or other payments in respect of any such delay) except that, if such Business
Day is in the next succeeding calendar year, payment of such Distributions shall
be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on the date such payment was originally payable
(each date on which Distributions are payable in accordance with the foregoing,
a "Distribution Date"). A "Business Day" shall mean any day other than a
Saturday or a Sunday, or a day on which banking institutions in The City of New
York are authorized or required by law or executive order to remain closed, or a
day on which the principal corporate trust office of the Property Trustee or the
Debenture Trustee is closed for business.
So long as no Debenture Event of Default has occurred and is continuing,
the Corporation has the right under the Indenture to defer the payment of
interest on the Junior Subordinated Debt Securities at any time or from time to
time for a period not exceeding 10 consecutive semi-annual periods with respect
to each Extension Period; provided that no Extension Period may extend beyond
the Stated Maturity of the Junior Subordinated Debt Securities. As a consequence
of any such election, semi-annual Distributions on the Capital Securities by the
Trust will be deferred during any such Extension Period. Distributions to which
holders of the Capital Securities are entitled will accumulate additional
Distributions thereon at the rate per annum of 8.25% thereof, compounded
semi-annually from the relevant payment date for such Distributions. The term
"Distributions" as used herein shall include any such additional Distributions.
During any such Extension Period, the Corporation may not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Corporation's capital stock,
(ii) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Corporation (including Other
Debentures) that rank pari passu in all respects with or junior in interest to
the Junior Subordinated Debt Securities or (iii) make any guarantee payments
with respect to any guarantee by the Corporation of the debt securities of any
subsidiary of the Corporation (including Other Guarantees) if such guarantee
ranks pari passu in all respects with or junior in interest to the Junior
Subordinated Debt Securities (other than (a) dividends or distributions in
common stock of the Corporation, (b) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, (c) payments under the Guarantee, (d) purchases or
acquisitions of shares of the Corporation's common stock in connection with the
satisfaction by the Corporation of its obligations under any employee benefit
plan or any other contractual obligation of the Corporation (other than a
contractual obligation ranking pari passu in all respects with or junior to the
Junior Subordinated Debt Securities), (e) as a result of a reclassification of
the Corporation's capital stock or the exchange or conversion of one class or
series of the Corporation's capital stock for another class or series of the
Corporation's capital stock or (f) the purchase of fractional interests in
shares of the Corporation's stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged).
Prior to the termination of any such Extension Period, the Corporation may
further extend such Extension Period; provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods, to end
on a date other than an Interest Payment Date or to extend beyond the Stated
Maturity of the Junior Subordinated Debt Securities. Upon the termination of any
such Extension Period and the payment of all amounts then due, and subject to
the foregoing limitations, the Corporation may elect to begin a new Extension
Period. The Corporation must give the Property Trustee, the Administrative
Trustees and the Debenture Trustee notice of its election of any such Extension
Period at least five Business Days prior to the earlier of (i) the date the
Distributions on the Capital Securities would have been payable except for the
election to begin such Extension Period or (ii) the date the Administrative
Trustees are required to give notice to any exchange or automated quotation
system or to holders of the Capital Securities of the record date or the date
such Distributions are payable but in any event not less than five Business Days
prior to such record date. There is no limitation on the number of times that
the Corporation
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may elect to begin an Extension Period. See "-- Description of Junior
Subordinated Debt Securities -- Option to Extend Interest Payment Date" and
"Certain United States Federal Income Tax Consequences -- Interest and Original
Issue Discount."
The Corporation has no current intention of exercising its right to defer
payments of interest on the Junior Subordinated Debt Securities.
The revenue of the Trust available for distribution to holders of the
Capital Securities will be limited to payments under the Junior Subordinated
Debt Securities in which the Trust will invest the proceeds from the issuance
and sale of the Trust Securities. See "-- Description of Junior Subordinated
Debt Securities -- General." If the Corporation does not make interest payments
on the Junior Subordinated Debt Securities, the Property Trustee will not have
funds available to pay Distributions on the Capital Securities. The payment of
Distributions (if and to the extent the Trust has funds legally available for
the payment of such Distributions and cash sufficient to make such payments) is
guaranteed by the Corporation on a limited basis as set forth herein under
"-- Description of Guarantee."
REDEMPTION
Upon the repayment in full at the Stated Maturity, or redemption in whole
or in part, of the Junior Subordinated Debt Securities (other than following the
distribution of the Junior Subordinated Debt Securities to the holders of the
Trust Securities), the proceeds from such repayment or redemption shall be
applied by the Property Trustee to redeem a Like Amount of Trust Securities,
upon not less than 30 nor more than 60 days' notice of a date of redemption (the
"Redemption Date"), at the applicable Redemption Price, which shall be equal to
(i) in the case of the repayment of the Junior Subordinated Debt Securities at
the Stated Maturity, the Maturity Redemption Price (equal to the principal of,
and accrued but unpaid interest on, the Junior Subordinated Debt Securities) or
(ii) in the case of the optional redemption of the Junior Subordinated Debt
Securities, the Optional Redemption Price (equal to the Optional Prepayment
Price (as defined under "-- Description of Junior Subordinated Debt
Securities -- Optional Redemption") in respect of the Junior Subordinated Debt
Securities). See "-- Description of Junior Subordinated Debt Securities --
Optional Redemption." If less than all of the Junior Subordinated Debt
Securities are to be redeemed on a Redemption Date, then the proceeds from such
redemption shall be allocated to the redemption pro rata of the Capital
Securities and the Common Securities. The amount of premium, if any, paid by the
Corporation upon the redemption of the Junior Subordinated Debt Securities to be
redeemed on a Redemption Date shall be allocated to the redemption pro rata of
the Capital Securities and the Common Securities.
The Corporation has the right to redeem the Junior Subordinated Debt
Securities in whole or in part on or after December 15, 2006, at any time at the
applicable Optional Prepayment Price, subject to receipt of prior approval by
the Federal Reserve if then required under applicable capital guidelines or
policies of the Federal Reserve.
REDEMPTION PROCEDURES
The Trust Securities may be redeemed, subject to receipt of prior approval
by the Federal Reserve if then required under applicable capital guidelines or
policies of the Federal Reserve, at the applicable Redemption Price with the
proceeds from the contemporaneous repayment or redemption of the Junior
Subordinated Debt Securities. Redemptions of the Trust Securities shall be made
and the applicable Redemption Price shall be payable on each Redemption Date
only to the extent that the Trust has funds on hand available for the payment of
such Redemption Price. See also "-- Subordination of Common Securities."
If the Trust gives a notice of redemption in respect of the Trust
Securities, then, by 12:00 noon, New York City time, on the Redemption Date, to
the extent funds are available, with respect to the Capital Securities held in
global form, the Property Trustee will deposit irrevocably with DTC funds
sufficient to pay the applicable Redemption Price and will give DTC irrevocable
instructions and authority to pay the applicable Redemption Price to the holders
of such Capital Securities. See "-- Form, Denomination, Book-Entry Procedures
and Transfer." With respect to Capital Securities held in certificated form, the
Property Trustee, to the extent funds are available, will irrevocably deposit
with the paying agent for such Capital Securities funds sufficient to pay the
applicable Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the applicable Redemption Price to the holders
thereof upon surrender of their certificates evidencing such Capital Securities.
See "-- Payment and Paying Agency." Notwithstanding the foregoing, Distributions
payable on or prior to the Redemption Date shall be payable to the holders of
the Capital
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Securities on the relevant record dates for the related Distribution Dates. If
notice of redemption shall have been given and funds deposited as required, then
upon the date of such deposit, all rights of the holders of the Capital
Securities will cease, except the right of the holders of the Capital Securities
to receive the applicable Redemption Price, but without interest on such
Redemption Price, and the Capital Securities will cease to be outstanding. In
the event that any date fixed for redemption of Capital Securities is not a
Business Day, then payment of the applicable Redemption Price payable on such
date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day. In the event that payment of the
applicable Redemption Price is improperly withheld or refused and not paid
either by the Trust or by the Corporation pursuant to the Guarantee as described
under "-- Description of Guarantee," Distributions on Capital Securities will
continue to accrue at the then applicable rate, from the Redemption Date
originally established by the Trust to the date such applicable Redemption Price
is actually paid, in which case the actual payment date will be the date fixed
for redemption for purposes of calculating the applicable Redemption Price.
Subject to applicable law (including, without limitation, United States
Federal securities law), the Corporation or its subsidiaries may at any time and
from time to time purchase outstanding Capital Securities by tender, in the open
market or by private agreement.
Payment of the applicable Redemption Price on, and any distribution of
Junior Subordinated Debt Securities to holders of, the Trust Securities shall be
made to the applicable recordholders thereof as they appear on the register
therefor on the relevant record date, provided that a Redemption Date falls on a
Distribution Date.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each holder of Trust Securities at its
registered address. Unless the Corporation defaults in payment of the applicable
Prepayment Price on, or in the repayment of, the Junior Subordinated Debt
Securities, on and after the Redemption Date Distributions will cease to accrue
on the Trust Securities called for redemption.
LIQUIDATION OF THE TRUST AND DISTRIBUTION OF JUNIOR SUBORDINATED DEBT SECURITIES
The Corporation will have the right at any time (including upon the
occurrence of a Tax Event or a Capital Treatment Event) to terminate the Trust
and cause a Like Amount of the Junior Subordinated Debt Securities to be
distributed to the holders of the Trust Securities in liquidation of the Trust;
provided, however, that following such distribution of the Junior Subordinated
Debt Securities, the Corporation agrees to use its best efforts to maintain any
ratings of such Junior Subordinated Debt Securities by any nationally recognized
rating agency for so long as any such Junior Subordinated Debt Securities are
outstanding. Such right is subject to prior approval of the Federal Reserve if
then required under applicable capital guidelines or policies of the Federal
Reserve. If the Junior Subordinated Debt Securities are distributed to the
holders of the Trust Securities as the result of the occurrence of a Tax Event
and such Tax Event continues notwithstanding such distribution, the Corporation
has the right to prepay the Junior Subordinated Debt Securities in whole, but
not in part, at the Event Prepayment Price together with accumulated
Distributions to but excluding the date fixed for redemption. See "Description
of Junior Subordinated Debt Securities -- Tax Event or Capital Treatment Event
Prepayment."
Upon liquidation of the Trust and certain other events, the Junior
Subordinated Debt Securities may be distributed to holders of the Capital
Securities. Under current United States Federal income tax law and
interpretations thereof and assuming, as expected, that the Trust is treated as
a grantor trust for United States Federal income tax purposes, a distribution by
the Trust of the Junior Subordinated Debt Securities pursuant to a liquidation
of the Trust will not be a taxable event to the Trust or to holders of the
Capital Securities and will result in a holder of the Capital Securities
receiving directly such holders's pro rata share of the Junior Subordinated Debt
Securities (previously held indirectly through the Trust). 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
Junior Subordinated Debt Securities as a result of the occurrence of a Tax Event
or otherwise, the distribution of Junior Subordinated Debt Securities to holders
of the Capital Securities by the Trust would be a taxable event to the Trust and
each holder, and holders of the Capital Securities would recognize gain or loss
as if they had exchanged their Capital Securities for the Junior Subordinated
Debt Securities they received upon the liquidation of the Trust. See "Certain
United States Federal Income Tax Consequences -- Distribution of Junior
Subordinated Debt Securities or Cash Upon Liquidation of the Trust."
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The Trust shall automatically terminate upon the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of the Corporation;
(ii) the distribution of a Like Amount of the Junior Subordinated Debt
Securities to the holders of the Trust Securities if the Corporation, as
Depositor, has given written direction to the Property Trustee to terminate the
Trust (which direction is optional and, except as described above, wholly within
the discretion of the Corporation, as Depositor); (iii) redemption of all of the
Trust Securities as described under " -- Redemption" above; (iv) expiration of
the term of the Trust; and (v) the entry of an order for the dissolution of the
Trust by a court of competent jurisdiction.
If an early termination occurs as described in clause (i), (ii), (iv) or
(v) above, the Trust shall be liquidated by the Issuer Trustees as expeditiously
as the Issuer Trustees determine to be possible by distributing, after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law, to the holders of the Trust Securities a Like Amount of the Junior
Subordinated Debt Securities, unless such distribution is determined by the
Property Trustee not to be practical, in which event such holders will be
entitled to receive out of the assets of the Trust available for distribution to
holders an amount equal to, in the case of holders of Capital Securities, the
aggregate of the Liquidation Amount plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"). If such 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 holder(s) of the
Common Securities will be entitled to receive distributions upon any such
liquidation pro rata with the holders of the Capital Securities, except that if
a Debenture Event of Default has occurred and is continuing, the Capital
Securities shall have a priority over the Common Securities. See
"-- Subordination of Common Securities."
"Like Amount" means (i) with respect to a redemption of Capital Securities,
Trust Securities having a Liquidation Amount equal to that portion of the
principal amount of Junior Subordinated Debt Securities to be contemporaneously
redeemed in accordance with the Indenture, allocated to the Common Securities
and to the Capital Securities based upon the relative Liquidation Amounts of
such classes and the proceeds of which will be used to pay the Redemption Price
of such Trust Securities and (ii) with respect to a distribution of Junior
Subordinated Debt Securities to holders of Capital Securities in connection with
a dissolution or liquidation of the Trust, Junior Subordinated Debt Securities
having a principal amount equal to the Liquidation Amount of the Trust
Securities of the holders to whom such Junior Subordinated Debt Securities are
distributed.
If the Corporation elects not to redeem the Junior Subordinated Debt
Securities prior to maturity and the Trust is not liquidated and the Junior
Subordinated Debt Securities are not distributed to holders of the Trust
Securities, the Capital Securities will remain outstanding until the repayment
of the Junior Subordinated Debt Securities at the Stated Maturity.
After the liquidation date is fixed for any distribution of Junior
Subordinated Debt Securities to holders of the Trust Securities (i) the Capital
Securities will no longer be deemed to be outstanding, (ii) DTC or its nominee,
as the record holder of the Capital Securities, will receive a registered global
certificate or certificates representing the Junior Subordinated Debt Securities
to be delivered upon such distribution with respect to Capital Securities held
by DTC or its nominee and (iii) any certificates representing Capital Securities
not held by DTC or its nominee will be deemed to represent Junior Subordinated
Debt Securities having a principal amount equal to the Liquidation Amount of
such Capital Securities and bearing accrued and unpaid interest in an amount
equal to the accumulated and unpaid Distributions on such Capital Securities
until such certificates are presented to the Administrative Trustees or their
agent for cancellation, whereupon the Corporation will issue to such holder, and
the Debenture Trustee will authenticate, a certificate representing such Junior
Subordinated Debt Securities.
There can be no assurance as to the market prices for the Capital
Securities or the Junior Subordinated Debt Securities 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 Junior Subordinated Debt Securities 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.
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SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, the Capital
Securities and Common Securities shall be made pro rata to the holders of
Capital Securities and Common Securities based on the Liquidation Amount
thereof; provided, however, that if on any Distribution Date or Redemption Date
any Event of Default resulting from a Debenture Event of Default shall have
occurred and be continuing, no payment of any Distribution on, or applicable
Redemption Price of, any of the Common Securities, and no other payment on
account of the redemption, liquidation or other acquisition of the Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions on all of the outstanding Capital Securities for all
Distribution periods terminating on or prior thereto or, in the case of payment
of the applicable Redemption Price the full amount of such Redemption Price on
all of the outstanding Capital Securities, shall have been made or provided for,
and all funds available to the Property Trustee shall first be applied to the
payment in full in cash of all Distributions on, or the Redemption Price of, the
Capital Securities then due and payable.
In the case of any Event of Default under the Declaration resulting from a
Debenture Event of Default, the Corporation as holder of the Common Securities
will be deemed to have waived any right to act with respect to any such Event of
Default until the effect of all such Events of Default have been cured, waived
or otherwise eliminated. Until all such Events of Default have been so cured,
waived or otherwise eliminated, the Property Trustee shall act solely on behalf
of the holders of such Capital Securities and not on behalf of the Corporation
as holder of the Common Securities, and only the holders of the Capital
Securities will have the right to direct the Property Trustee to act on their
behalf.
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under the
Declaration (an "Event of Default") (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) the occurrence of a Debenture Event of Default (see "Description
of Junior Subordinated Debt Securities -- Debenture Events of Default"); or
(ii) default by the Trust in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period of
30 days; or
(iii) default by the Trust in the payment of any Redemption Price of
any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect,
of any covenant or warranty of the Issuer Trustees in the Declaration
(other than a covenant or warranty, a default in the performance of which
or the breach of which is addressed in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the defaulting Issuer
Trustee or Issuer Trustees by the holders of at least 25% in aggregate
Liquidation Amount of the outstanding Capital Securities, a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" under the Declaration; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by the Corporation to
appoint a successor Property Trustee within 60 days thereof.
The deferral(s) by the Corporation of its obligation to make interest
payments on the Junior Subordinated Debt Securities will not constitute a
Debenture Event of Default.
Within fifteen Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the Capital Securities, the
Administrative Trustees and the Corporation, as Depositor, unless such Event of
Default shall have been cured or waived. The Corporation, as Depositor, and the
Administrative Trustees are required to file annually with the Property Trustee
a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under the Declaration.
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If a Debenture Event of Default has occurred and is continuing, the Capital
Securities shall have a preference over the Common Securities upon termination
of the Trust as described above. See "-- Liquidation of the Trust and
Distribution of Junior Subordinated Debt Securities" and "-- Subordination of
Common Securities."
REMOVAL OF ISSUER TRUSTEES
Unless a Debenture Event of Default shall have occurred and be continuing,
any Issuer Trustee may be removed at any time by the holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed at such time by the
holders of a majority in Liquidation Amount of the outstanding Capital
Securities. In no event will the holders of the Capital Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in the Corporation as the holder of the
Common Securities. No resignation or removal of an Issuer Trustee and no
appointment of a successor trustee shall be effective until the acceptance of
appointment by the successor trustee in accordance with the provisions of the
Declaration.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust's property
may at the time be located, the Corporation, as the holder of the Common
Securities, and the Administrative Trustees shall have the power to appoint one
or more persons either to act as a co-trustee, jointly with the Property
Trustee, of all or any part of such Trust's property, or to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such person or persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of the Declaration. In case a Debenture Event of
Default has occurred and is continuing, the Property Trustee alone shall have
the power to make such appointment.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any Person (as defined in the Declaration) into which the Property Trustee,
the Delaware Trustee or any Administrative Trustee that is not a natural person
may be merged or converted or with which it may be consolidated or any Person
resulting from any merger, conversion or consolidation to which such Issuer
Trustee shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of such Issuer Trustee, shall be the successor of
such Issuer Trustee under the Declaration, provided such Person shall be
otherwise qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST
The Trust may not merge with or into, consolidate, amalgamate or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except as
described below or as otherwise set forth in the Declaration. The Trust may, at
the request of the Corporation, as Depositor, with the consent of the
Administrative Trustees but without the consent of the holders of the Capital
Securities, the Property Trustee or the Delaware Trustee, merge with or into,
consolidate, amalgamate or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to, a trust organized as such
under the laws of any State; provided, however, that (i) such successor entity
either (a) expressly assumes all of the obligations of the Trust with respect to
the Capital Securities or (b) substitutes for the Capital Securities other
securities having substantially the same terms as the Capital Securities (the
"Successor Securities") so long as the Successor Securities rank the same as the
Capital Securities rank in priority with respect to distributions and payments
upon liquidation, redemption and otherwise, (ii) the Corporation expressly
appoints a trustee of such successor entity possessing the same powers and
duties as the Property Trustee as the holder of the Junior Subordinated Debt
Securities, (iii) the Successor Securities are listed or traded, or any
Successor Securities will be listed or traded upon notification of issuance, on
any national securities exchange or other organization on which the Capital
Securities are then listed or traded, if any, (iv) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Capital Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the holders of the
Capital Securities (including any Successor Securities) in any material respect,
(vi) such successor entity has a purpose identical to that of the Trust, (vii)
prior to such merger, consolidation, amalgamation, replacement,
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conveyance, transfer or lease, the Corporation has received an opinion from
independent counsel to the Trust experienced in such matters to the effect that
(a) such merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease does not adversely affect the rights, preferences and privileges of the
holders of the Capital Securities (including any Successor Securities) in any
material respect and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor such successor
entity will be required to register as an investment company under the
Investment Company Act of 1940, as amended (the "Investment Company Act") and
(viii) the Corporation or any permitted successor or assign owns all of the
common securities of such successor entity and guarantees the obligations of
such successor entity under the Successor Securities at least to the extent
provided by the Guarantee. Notwithstanding the foregoing, the Trust shall not,
except with the consent of the holders of 100% in Liquidation Amount of the
Trust Securities, consolidate, amalgamate, merge with or into, or be replaced by
or convey, transfer or lease its properties and assets substantially as an
entirety to any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease would cause the
Trust or the successor entity to be classified as other than a grantor trust for
United States Federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF THE DECLARATION
Except as provided below and under "-- Description of
Guarantee -- Amendments and Assignment" and as otherwise required by law and the
Declaration, the holders of the Capital Securities will have no voting rights.
The Declaration may be amended from time to time by the Corporation, the
Property Trustee and the Administrative Trustees, without the consent of the
holders of the Trust Securities, (i) to cure any ambiguity, correct or
supplement any provision in the Declaration that may be inconsistent with any
other provision, or to make any other provisions with respect to matters or
questions arising under the Declaration, which shall not be inconsistent with
the other provisions of the Declaration, or (ii) to modify, eliminate or add to
any provisions of the Declaration to such extent as shall be necessary to ensure
that the Trust will be classified for United States Federal income tax purposes
as a grantor trust at all times that any Trust Securities are outstanding or to
ensure that the Trust will not be required to register as an "investment
company" under the Investment Company Act; provided, however, that in the case
of clause (i), such action shall not adversely affect in any material respect
the interests of any holder of Trust Securities, and any amendments of the
Declaration shall become effective when notice thereof is given to the holders
of the Trust Securities. The Declaration may be amended by the Issuer Trustees
and the Corporation with (i) the consent of holders representing not less than a
majority (based upon Liquidation Amounts) of the outstanding Trust Securities,
and (ii) receipt by the Issuer Trustees of an opinion of counsel to the effect
that such amendment or the exercise of any power granted to the Issuer Trustees
in accordance with such amendment will not affect the Trust's status as a
grantor trust for United States Federal income tax purposes or the Trust's
exemption from status as an "investment company" under the Investment Company
Act. In addition, without the consent of each holder of Trust Securities, the
Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a holder of Trust Securities to
institute suit for the enforcement of any such payment on or after such date.
So long as any Junior Subordinated Debt Securities are held by the Trust,
the Issuer Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on the Property Trustee with respect to
the Junior Subordinated Debt Securities, (ii) waive any past default that is
waivable under Section 5.13 of the Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Junior Subordinated
Debt Securities shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or the Junior Subordinated Debt
Securities, where such consent shall be required, without, in each case,
obtaining the prior approval of the holders of a majority in aggregate
Liquidation Amount of all outstanding Capital Securities; provided, however,
that where a consent under the Indenture would require the consent of each
holder of Junior Subordinated Debt Securities affected thereby, no such consent
shall be given by the Property Trustee without the prior consent of each holder
of the Capital Securities. The Issuer Trustees shall not revoke any action
previously authorized or approved by a vote of the holders of the Capital
Securities except by subsequent vote of such holders. The Property Trustee shall
notify each holder of Capital Securities of any notice of default with respect
to the Junior Subordinated Debt Securities. In addition to obtaining the
foregoing approvals of such holders of the Capital Securities, prior to taking
any of the foregoing actions, the Issuer Trustees shall obtain an opinion of
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counsel experienced in such matters to the effect that the Trust will not be
classified as an association or a publicly traded partnership taxable as a
corporation for United States Federal income tax purposes on account of such
action.
Any required approval of holders of Capital Securities may be given at a
meeting of such holders convened for such purpose or pursuant to written
consent. The Property Trustee will cause a notice of any meeting at which
holders of Capital Securities are entitled to vote, or of any matter upon which
action by written consent of such holders is to be taken, to be given to each
holder of record of Capital Securities in the manner set forth in the
Declaration.
No vote or consent of the holders of Capital Securities will be required
for the Trust to redeem and cancel the Capital Securities in accordance with the
Declaration.
Notwithstanding that holders of the Capital Securities are entitled to vote
or consent under any of the circumstances described above, any of the Capital
Securities that are owned by the Corporation, the Issuer Trustees or any
affiliate of the Corporation or any Issuer Trustees, shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
EXPENSES AND TAXES
In the Indenture, the Corporation, as borrower, has agreed to pay all debts
and other obligations (other than with respect to the Capital Securities) and
all costs and expenses of the Trust (including costs and expenses relating to
the organization of the Trust, the fees and expenses of the Issuer Trustees and
the costs and expenses relating to the operation of the Trust) and the offering
of the Capital Securities, and to pay any and all taxes and all costs and
expenses with respect to the foregoing (other than United States withholding
taxes) to which the Trust might become subject (any such payment of taxes,
duties, assessments or other governmental charges being referred to as
"Additional Sums"). The foregoing obligations of the Corporation under the
Indenture are for the benefit of, and shall be enforceable by, any person to
whom any such debts, obligations, costs, expenses and taxes are owed (a
"Creditor") whether or not such Creditor has received notice thereof. Any such
Creditor may enforce such obligations of the Corporation directly against the
Corporation, and the Corporation has irrevocably waived any right or remedy to
require that any such Creditor take any action against the Trust or any other
person before proceeding against the Corporation. The Corporation has also
agreed in the Indenture to execute such additional agreement(s) as may be
necessary or desirable to give full effect to the foregoing.
FORM, DENOMINATION, BOOK-ENTRY PROCEDURES AND TRANSFER
In the event that Capital Securities are issued in certificated form, such
Capital Securities will be issued in blocks having a Liquidation Amount of not
less than $100,000 (100 Capital Securities) and may be transferred or exchanged
in such blocks in the manner and at the offices described below.
Global Capital Security; Book-Entry Form. The Exchange Capital Securities
initially will be represented by one or more Exchange Capital Securities in
registered, global form (collectively, the "Global Capital Securities"). The
Global Exchange Capital Securities will be deposited upon issuance with the
Property Trustee as custodian for DTC, in New York, New York, and registered in
the name of Cede & Co. as DTC's nominee, in each case for credit to an account
of a direct or indirect participant in DTC as described below.
Except as set forth below, the Global Exchange Capital Securities may be
transferred, in whole and not in part, only to another nominee of DTC or to a
successor of DTC or its nominee and only in amounts that would not cause a
holder to own less than 100 Exchange Capital Securities. Beneficial interests in
the Global Exchange Capital Securities may not be exchanged for Exchange Capital
Securities in certificated form except in the limited circumstances described
below. See "-- Exchange of Book-Entry Exchange Capital Securities for
Certificated Exchange Capital Securities." Transfer of beneficial interests in
the Global Exchange Capital Securities will be subject to the applicable rules
and procedures of DTC and its direct or indirect participants, which may change
from time to time.
DTC has advised the Trust and the Corporation as follows: DTC is a limited
purpose trust company organized under the laws of the State of New York, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the Uniform Commercial Code and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act. DTC was created
to hold securities for Participants and to facilitate the clearance and
settlement of transactions in those securities between Participants through
electronic book-entry changes to accounts of its Participants, thereby
eliminating the need for physical movement of certificates. Participants include
securities brokers and dealers
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(including the Initial Purchasers), banks, trust companies, clearing
corporations and certain other organizations. Indirect access to DTC's system is
also available to other entities such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly (collectively, the "Indirect
Participants"). Persons who are not Participants may beneficially own securities
held by or on behalf of DTC only through the Participants or the Indirect
Participants. The ownership interest and transfer of ownership interest of each
actual purchaser of each security held by or on behalf of DTC are recorded on
the records of the Participants and Indirect Participants.
DTC has also advised the Trust and the Corporation that, pursuant to
procedures established by it, (i) upon deposit of the Global Exchange Capital
Securities, DTC will credit the accounts of Participants designated by the
Exchange Agent with portions of the principal amount of the Global Exchange
Capital Securities and (ii) ownership of such interests in the Global Exchange
Capital Securities will be shown on, and the transfer of ownership thereof will
be effected only through, records maintained by DTC (with respect to the
Participants) or by the Participants and the Indirect Participants (with respect
to other owners of beneficial interests in the Global Exchange Capital
Securities).
Investors in the Global Exchange Capital Securities may hold their
interests therein directly through DTC, if they are Participants in DTC, or
indirectly through organizations which are Participants in such system. All
interests in a Global Exchange Capital Security will be subject to the
procedures and requirements of DTC. The laws of some states require that certain
persons take physical delivery in certificated form. Consequently, the ability
to transfer beneficial interests in a Global Exchange Capital Security to such
persons will be limited to that extent. Because DTC can act only on behalf of
Participants, which in turn act on behalf of Indirect Participants and certain
banks, the ability of a person having beneficial interests in a Global Exchange
Capital Security to pledge such interests to persons or entities that do not
participate in the DTC system, or otherwise take actions in respect of such
interests, may be affected by the lack of a physical certificate evidencing such
interests. For certain other restrictions on the transferability of the Exchange
Capital Securities, see "-- Exchange of Book-Entry Exchange Capital Securities
for Certificated Exchange Capital Securities."
EXCEPT AS DESCRIBED BELOW, OWNERS OF BENEFICIAL INTERESTS IN THE GLOBAL
EXCHANGE CAPITAL SECURITIES WILL NOT BE ENTITLED TO HAVE EXCHANGE CAPITAL
SECURITIES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE OR BE ENTITLED TO RECEIVE
PHYSICAL DELIVERY OF EXCHANGE CAPITAL SECURITIES IN CERTIFICATED FORM AND WILL
NOT BE CONSIDERED THE REGISTERED OWNERS OR HOLDERS THEREOF UNDER THE DECLARATION
FOR ANY PURPOSE.
Payments in respect of the Global Exchange Capital Security registered in
the name of DTC or its nominee will be payable by the Property Trustee to DTC or
its nominee as the registered holder under the Declaration by wire transfer in
immediately available funds on each payment date. Under the terms of the
Declaration, the Property Trustee will treat the persons in whose names the
Exchange Capital Securities, including the Global Exchange Capital Securities,
are registered as the owners thereof for the purpose of receiving such payments
and for any and all other purposes whatsoever. Consequently, neither the
Property Trustee nor any agent thereof has or will have any responsibility or
liability for (i) any aspect of DTC's records or any Participant's or Indirect
Participant's records relating to or payments made on account of beneficial
ownership interests in the Global Exchange Capital Securities, or for
maintaining, supervising or reviewing any of DTC's records or any Participant's
or Indirect Participant's records relating to the beneficial ownership interests
in the Global Exchange Capital Securities or (ii) any other matter relating to
the actions and practices of DTC or any of its Participants or Indirect
Participants. DTC has advised the Trust and the Corporation that its current
practice, upon receipt of any payment in respect of securities such as the
Exchange Capital Securities, is to credit the accounts of the relevant
Participants with the payment on the payment date, in amounts proportionate to
their respective holdings in Liquidation Amount of beneficial interests in the
Global Exchange Capital Security, as shown on the records of DTC. Payments by
the Participants and the Indirect Participants to the beneficial owners of
Exchange Capital Securities represented by Global Exchange Capital Securities
held through such Participants will be governed by standing instructions and
customary practices and will be the responsibility of the Participants or the
Indirect Participants and will not be the responsibility of DTC, the Property
Trustee or the Trust. Neither the Trust nor the Property Trustee will be liable
for any delay by DTC or any of its Participants in identifying the beneficial
owners of the Exchange Capital Securities, and the Trust and the Property
Trustee may conclusively rely on and will be protected in relying on
instructions from DTC or its nominee for all purposes.
Interests in the Global Exchange Capital Securities will trade in DTC's
Same-Day Funds Settlement System and secondary market trading activity in such
interests will therefore settle in immediately available funds, subject in all
cases
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to the rules and procedures of DTC and its Participants. Transfers between
Participants in DTC will be effected in accordance with DTC's procedures, and
will be settled in same-day funds.
DTC has advised the Trust and the Corporation that it will take any action
permitted to be taken by a holder of Exchange Capital Securities (including,
without limitation, the presentation of Exchange Capital Securities for exchange
as described below) only at the direction of one or more Participants to whose
account with DTC interests in the Global Exchange Capital Securities are
credited and only in respect of such portion of the aggregate Liquidation Amount
of the Exchange Capital Securities represented by the Global Exchange Capital
Securities as to which such Participant or Participants has or have given such
direction. However, if there is an Event of Default under the Declaration, DTC
reserves the right to exchange the Global Exchange Capital Securities for
legended Exchange Capital Securities in certificated form and to distribute such
Exchange Capital Securities to its Participants.
So long as DTC or its nominee is the registered owner of the Global
Exchange Capital Securities, DTC or such nominee, as the case may be, will be
considered the sole owner or holder of the Exchange Capital Securities
represented by the Global Exchange Capital Security for all purposes under the
Declaration.
The information in this section concerning DTC and its book-entry system
has been obtained from sources that the Trust and the Corporation believe to be
reliable, but neither the Trust nor the Corporation takes responsibility for the
accuracy thereof.
Although DTC has agreed to the foregoing procedures to facilitate transfers
of interest in the Global Exchange Capital Securities among Participants in DTC,
it is under no obligation to perform or to continue to perform such procedures,
and such procedures may be discontinued at any time. Neither the Trust nor the
Property Trustee will have any responsibility for the performance by DTC or its
Participants or Indirect Participants of their respective obligations under the
rules and procedures governing their operations.
Exchange of Book-Entry Exchange Capital Securities for Certificated
Exchange Capital Securities. A Global Exchange Capital Security is exchangeable
for Exchange Capital Securities in registered certificated form if (i) DTC (x)
notifies the Trust that it is no longer willing or able to properly discharge
its responsibilities with respect to the Exchange Capital Securities and the
Corporation is unable to locate a qualified successor or (y) has ceased to be a
clearing agency registered under the Exchange Act; (ii) the Corporation at its
option elects to terminate the book-entry system through DTC; or (iii) there
shall have occurred and be continuing a Debenture Event of Default. In addition,
beneficial interests in a Global Exchange Capital Security may be exchanged by
or on behalf of DTC for certificated Exchange Capital Securities upon request by
DTC but only upon at least 20 days prior written notice given to the Property
Trustee in accordance with DTC's customary procedures. In all cases,
certificated Exchange Capital Securities delivered in exchange for any Global
Exchange Capital Security or beneficial interests therein will be registered in
the names, and issued in any approved denominations, requested by or on behalf
of DTC (in accordance with its customary procedures).
PAYMENT AND PAYING AGENCY
Payments in respect of the Exchange Capital Securities held in global form
shall be made to DTC, which shall credit the relevant accounts at the Depositary
on the applicable Distribution Dates or in respect of the Exchange Capital
Securities that are not held by the Depositary, such payments shall be made by
check mailed to the address of the holder entitled thereto as such address shall
appear on the register. The paying agent (the "Paying Agent") shall initially be
the Property Trustee and co-paying agents may be chosen by the Property Trustee
which are acceptable to the Administrative Trustees and the Corporation. The
Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written
notice to the Property Trustee, the Administrative Trustees and the Corporation.
In the event that the Property Trustee shall no longer be the Paying Agent, the
Administrative Trustees shall appoint a successor (which shall be a bank or
trust company acceptable to the Administrative Trustees and the Corporation) to
act as Paying Agent.
RESTRICTIONS ON TRANSFER
The Exchange Capital Securities will be issued, and may be transferred
only, in blocks having a Liquidation Amount of not less than $100,000 (100
Capital Securities). Any attempted transfer, sale or other disposition of
Exchange Capital Securities in a block having a Liquidation Amount of less than
$100,000 shall be deemed to be void and of no legal effect whatsoever. Any such
transferee shall be deemed not to be the holder of such Exchange Capital
Securities for any
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purpose, including but not limited to the receipt of Distributions on such
Exchange Capital Securities, and such transferee shall be deemed to have no
interest whatsoever in such Exchange Capital Securities.
REGISTRAR AND TRANSFER AGENT
The Property Trustee will act as registrar and transfer agent for the
Exchange Capital Securities.
Registration of transfers of the Exchange Capital Securities will be
effected without charge by or on behalf of the Trust, but upon payment of any
tax or other governmental charges that may be imposed in connection with any
transfer or exchange. The Trust will not be required to register or cause to be
registered the transfer of the Exchange Capital Securities after they have been
called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of
an Event of Default, undertakes to perform only such duties as are specifically
set forth in the Declaration and, during the existence of an Event of Default,
must exercise the same degree of care and skill as a prudent person would
exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the Declaration at the request of any holder of Trust
Securities unless it is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred thereby. If no Event of Default has
occurred and is continuing and the Property Trustee is required to decide
between alternative causes of action, construe ambiguous provisions in the
Declaration or is unsure of the application of any provision of the Declaration,
and the matter is not one on which holders of the Capital Securities or the
Common Securities are entitled under the Declaration to vote, then the Property
Trustee shall take such action as is directed by the Corporation and, if not so
directed, shall take such action as it deems advisable and in the best interests
of the holders of the Trust Securities and will have no liability except for its
own bad faith, negligence or willful misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Trust in such a way that the Trust will not be
deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as an association or a publicly traded
partnership taxable as a corporation for United States Federal income tax
purposes and so that the Junior Subordinated Debt Securities will be treated as
indebtedness of the Corporation for United States Federal income tax purposes.
In this connection, the Corporation and the Administrative Trustees are
authorized to take any action, not inconsistent with applicable law, the
certificate of trust of the Trust or the Declaration, that the Corporation and
the Administrative Trustees determine in their discretion to be necessary or
desirable for such purposes, as long as such action does not materially
adversely affect the interests of the holders of the Trust Securities.
DESCRIPTION OF JUNIOR SUBORDINATED DEBT SECURITIES
The Old Junior Subordinated Debt Securities were issued and the Exchange
Junior Subordinated Debt Securities are to be issued as a single series under
the Indenture. The Indenture has been qualified under the Trust Indenture Act.
This summary of certain terms and provisions of the Junior Subordinated Debt
Securities and the Indenture does not purport to be complete, and where
reference is made to particular provisions of the Indenture, such provisions,
including the definitions of certain terms, some of which are not otherwise
defined herein, are qualified in their entirety by reference to all of the
provisions of the Indenture and those terms made a part of the Indenture by the
Trust Indenture Act.
GENERAL
Concurrently with the issuance of the Old Capital Securities and the Common
Securities, the Trust invested the
proceeds thereof in the Old Junior Subordinated Debt Securities issued by the
Corporation. Pursuant to the Exchange Offer, the Corporation will exchange the
Old Junior Subordinated Debt Securities for the Exchange Junior Subordinated
Debt Securities as soon as practicable after the date hereof. No Old Junior
Subordinated Debt Securities will remain outstanding after such exchange. The
following is a description of the Exchange Junior Subordinated Debt Securities
(referred to in this section as the "Junior Subordinated Debt Securities"). The
Junior Subordinated Debt Securities will
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bear interest at the annual rate of 8.25% of the principal amount thereof,
payable semi-annually in arrears on June 15 and December 15 of each year (each,
an "Interest Payment Date"), commencing June 15, 1997, to the person in whose
name each Junior Subordinated Debt Security is registered, subject to certain
exceptions, at the close of business on the June 1 or December 1 next preceding
such Interest Payment Date. It is anticipated that, until the liquidation of the
Trust, each Junior Subordinated Debt Security will be in the name of the Trust
and held by the Property Trustee in trust for the benefit of the holders of the
Trust Securities. The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months. In the event that any
date on which interest is payable on the Junior Subordinated Debt Securities is
not a Business Day, then payment of the interest payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay), except that, if such Business
Day is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on the date such payment was originally payable. Accrued interest
that is not paid on the applicable Interest Payment Date will bear additional
interest on the amount thereof (to the extent permitted by law) at the rate per
annum of 8.25% thereof, compounded semi-annually from the relevant Interest
Payment Date. The term "interest" as used herein shall include semi-annual
interest payments and interest on semi-annual interest payments not paid on the
applicable Interest Payment Date.
The Junior Subordinated Debt Securities will be issued as a series of
Junior Subordinated Debt Securities under the Indenture. Unless previously
redeemed or repurchased, the Junior Subordinated Debt Securities will mature on
December 15, 2026.
The Junior Subordinated Debt Securities will be unsecured and will rank
junior and be subordinate in right of payment to all Senior Debt. Because the
Corporation is a bank holding company, the right of the Corporation to
participate in any distribution of assets of any subsidiary, including the Bank,
upon such subsidiary's liquidation or reorganization or otherwise (and thus the
ability of holders of the Capital Securities to benefit indirectly from such
distribution), is subject to the prior claims of creditors of such subsidiary,
except to the extent that the Corporation may itself be recognized as a creditor
of such subsidiary. Accordingly, the Junior Subordinated Debt Securities will be
subordinated to all Senior Debt and effectively subordinated to all existing and
future liabilities of the Corporation's subsidiaries, and holders of Junior
Subordinated Debt Securities should look only to the assets of the Corporation
for payments on the Junior Subordinated Debt Securities. The Indenture does not
limit the incurrence or issuance of other secured or unsecured debt of the
Corporation, including Senior Debt, whether under the Indenture or any existing
or other indenture that the Corporation may enter into in the future or
otherwise. See "-- Subordination."
The Junior Subordinated Debt Securities will rank pari passu with all Other
Debentures issued under the Indenture and will be unsecured and subordinate and
junior in right of payment to the extent and in the manner set forth in the
Indenture to all Senior Debt of the Corporation. See "-- Subordination." The
Corporation is a holding company, and almost all of the operating assets of the
Corporation and its consolidated subsidiaries are owned by such subsidiaries.
The Corporation relies primarily on dividends from such subsidiaries to meet its
obligations. The Corporation is a legal entity separate and distinct from its
banking and non-banking affiliates. The Bank is the Corporation's principal
asset and primary source of revenue and net income. The Bank is subject to
certain restrictions imposed by federal law on any extensions of credit to, and
certain other transactions with, the Corporation and certain other affiliates,
and on investments in stock or other securities thereof. Such restrictions
prevent the Corporation and such other affiliates from borrowing from the Bank
unless the loans are secured by various types of collateral. Further, such
secured loans, other transactions and investments by the Bank are generally
limited in amount as to the Corporation and as to each of such other affiliates
to 10% of the Bank's capital and surplus and as to the Corporation and all of
such other affiliates to an aggregate of 20% of the Bank's capital and surplus.
In addition, payment of dividends to the Corporation by the Bank is subject to
ongoing review by banking regulators and is subject to various statutory
limitations and in certain circumstances requires approval by banking regulatory
authorities. The Other Debentures will be issuable in one or more series
pursuant to an indenture supplemental to the Indenture or a resolution of the
Corporation's Board of Directors or a committee thereof.
DENOMINATIONS, REGISTRATION AND TRANSFER
The Junior Subordinated Debt Securities will be represented by one or more
global certificates registered in the name of Cede & Co. as the nominee of DTC
if, and only if, the Junior Subordinated Debt Securities are distributed to the
holders of the Trust Securities. Until such time, the Junior Subordinated Debt
Securities will be registered in the name of the Trust and held by the Property
Trustee. Should the Junior Subordinated Debt Securities be distributed to
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holders of the Trust Securities, beneficial interests in the Junior Subordinated
Debt Securities will be shown on, and transfers thereof will be effected only
through, records maintained by Participants in DTC. Except as described below,
Junior Subordinated Debt Securities in certificated form will not be issued in
exchange for the global certificates.
A global security shall be exchangeable for Junior Subordinated Debt
Securities registered in the names of persons other than Cede & Co. only if (i)
DTC notifies the Corporation that it is unwilling or unable to continue as a
depositary for such global security and no successor depositary shall have been
appointed, or if at any time DTC ceases to be a "clearing agency" registered
under the Exchange Act at a time when DTC is required to be so registered to act
as such depositary, (ii) the Corporation in its sole discretion determines that
such global security shall be so exchangeable, or (iii) there shall have
occurred and be continuing a Debenture Event of Default. Any global security
that is exchangeable pursuant to the preceding sentence shall be exchangeable
for certificates registered in such names as DTC shall direct. It is expected
that such instructions will be based upon directions received by DTC from its
Participants with respect to ownership of beneficial interests in such global
security. In the event that Junior Subordinated Debt Securities are issued in
certificated form, such Junior Subordinated Debt Securities will be in minimum
denominations of $1,000 and integral multiples of $1,000 in excess thereof and
may be transferred or exchanged only in such minimum denominations and in the
manner and at the offices described below.
Payments on Junior Subordinated Debt Securities represented by a global
security will be made to DTC, as the depositary for the Junior Subordinated Debt
Securities. In the event Junior Subordinated Debt Securities are issued in
certificated form, principal and interest will be payable, the transfer of the
Junior Subordinated Debt Securities will be registrable, and Junior Subordinated
Debt Securities will be exchangeable for Junior Subordinated Debt Securities of
other denominations of a like aggregate principal amount, at the principal
corporate trust office of the Debenture Trustee in New York, New York, or at the
offices of any paying agent or transfer agent appointed by the Corporation,
provided that payment of interest may be made at the option of the Corporation
by check mailed to the address of the persons entitled thereto or by wire
transfer. In addition, if the Junior Subordinated Debt Securities are issued in
certificated form,
the record dates for payment of interest will be the June 1 and December 1, as
the case may be, next preceding the relevant Interest Payment Date.
For a description of DTC and the terms of the depositary arrangements
relating to payments, transfers, voting rights, redemptions and other notices
and other matters, see "-- Description of Capital Securities -- Form,
Denomination, Book-Entry Procedures and Transfer." If the Junior Subordinated
Debt Securities are distributed to the holders of the Trust Securities upon the
termination of the Trust, the form, denomination, book-entry and transfer
procedures with respect to the Capital Securities as described under
"-- Description of Capital Securities -- Form, Denomination, Book-Entry
Procedures and Transfer," shall apply to the Junior Subordinated Debt Securities
mutatis mutandis.
PAYMENT AND PAYING AGENTS
Payment of principal of (and premium, if any) and any interest on Junior
Subordinated Debt Securities will be made at the principal corporate trust
office of the Debenture Trustee in The City of New York or at the office of such
Paying Agent or Paying Agents as the Corporation may designate from time to
time, except that at the option of the Corporation payment of any interest may
be made (except in the case of Junior Subordinated Debt Securities in global
form), (i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the register for Junior Subordinated Debt Securities or
(ii) by transfer to an account maintained by the Person entitled thereto as
specified in such register, provided that proper transfer instructions have been
received by the relevant Record Date. Payment of any interest on any Junior
Subordinated Debt Security will be made to the Person in whose name such Junior
Subordinated Debt Security is registered at the close of business on the Record
Date for such interest, except in the case of defaulted interest. The
Corporation may at any time designate additional Paying Agents or rescind the
designation of any Paying Agent; however the Corporation will at all times be
required to maintain a Paying Agent in each Place of Payment (as defined in the
Indenture) for the Junior Subordinated Debt Securities.
Any moneys deposited with the Debenture Trustee or any Paying Agent, or
then held by the Corporation in trust, for the payment of the principal of (and
premium, if any) or interest on any Junior Subordinated Debt Security and
remaining unclaimed for two years after such principal (and premium, if any) or
interest has become due and payable shall, at the written request of the
Corporation, be repaid to the Corporation and the holder of such Junior
Subordinated Debt Security shall thereafter look, as a general unsecured
creditor, only to the Corporation for payment thereof.
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OPTION TO EXTEND INTEREST PAYMENT DATE
So long as no Debenture Event of Default has occurred and is continuing,
the Corporation has the right under the Indenture to defer the payment of
interest at any time or from time to time for a period not exceeding 10
consecutive semi-annual periods with respect to each Extension Period; provided,
however, that no Extension Period may end on a date other than an Interest
Payment Date or extend beyond the Stated Maturity of the Junior Subordinated
Debt Securities. At the end of an Extension Period, the Corporation must pay all
interest then accrued and unpaid on the Junior Subordinated Debt Securities
(together with interest thereon at the annual rate of 8.25%, compounded
semi-annually from the relevant Interest Payment Date, to the extent permitted
by applicable law). During an Extension Period, interest will continue to accrue
and holders of Junior Subordinated Debt Securities (and holders of the Capital
Securities while Capital Securities are outstanding) will be required to accrue
interest income for United States Federal income tax purposes. See "Certain
United States Federal Income Tax Consequences -- Interest and Original Issue
Discount."
During any Extension Period, the Corporation may not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Corporation's capital stock,
(ii) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Corporation (including any Other
Debentures) that rank pari passu in all respects with or junior in interest to
the Junior Subordinated Debt Securities or (iii) make any guarantee payments
with respect to any guarantee by the Corporation of the debt securities of any
subsidiary of the Corporation (including any Other Guarantees) if such guarantee
ranks pari passu in all respects with or junior in interest to the Junior
Subordinated Debt Securities (other than (a) dividends or distributions in
common stock of the Corporation, (b) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, (c) payments under the Guarantee, (d) purchases or
acquisitions of shares of the Corporation's common stock in connection with the
satisfaction by the Corporation of its obligations under any employee benefit
plan or any other contractual obligation of the Corporation (other than a
contractual obligation ranking pari passu in all respects with or junior to the
Junior Subordinated Debt Securities), (e) as a result of a reclassification of
the Corporation's capital stock or the exchange or conversion of one class or
series of the Corporation's capital stock for another class or series of the
Corporation's capital stock or (f) the purchase of fractional interests in
shares of the Corporation's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged).
Prior to the termination of any Extension Period, the Corporation may further
extend such Extension Period; provided, however, that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods or to
extend beyond the Stated Maturity. Upon the termination of any Extension Period
and the payment of all interest then accrued and unpaid on the Junior
Subordinated Debt Securities (together with interest thereon at the annual rate
of 8.25%, compounded semi-annually, to the extent permitted by applicable law),
the Corporation may elect to begin a new Extension Period, subject to the above
requirements. No interest shall be due and payable during an Extension Period,
except at the end thereof. The Corporation must give the Property Trustee, the
Administrative Trustees and the Debenture Trustee notice of its election of any
Extension Period (or an extension thereof) at least five Business Days prior to
the earlier of (i) the date the Distributions on the Trust Securities would have
been payable except for the election to begin or extend such Extension Period or
(ii) the date the Administrative Trustees are required to give notice to any
automated quotation system or to holders of Capital Securities of the record
date or the date such Distributions are payable, but in any event not less than
five Business Days prior to such record date. The Debenture Trustee shall give
notice of the Corporation's election to begin or extend a new Extension Period
to the holders of the Capital Securities. There is no limitation on the number
of times that the Corporation may elect to begin an Extension Period.
OPTIONAL REDEMPTION
The Junior Subordinated Debt Securities will be redeemable, in whole or in
part, at the option of the Corporation at any time on or after December 15,
2006, subject to the Corporation having received prior approval of the Federal
Reserve if then required under applicable regulations, guidelines or policies of
the Federal Reserve, at a redemption price (the "Optional Prepayment Price")
equal to the following prices, expressed in percentages of the principal amount
of the
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Junior Subordinated Debt Securities, together with accrued but unpaid interest
to but excluding the date fixed for redemption. If redeemed during the 12-month
period beginning December 15:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
-----------
<S> <C>
2006......................................................... 104.1250%
2007......................................................... 103.7125
2008......................................................... 103.3000
2009......................................................... 102.8875
2010......................................................... 102.4750
2011......................................................... 102.0625
2012......................................................... 101.6500
2013......................................................... 101.2375
2014......................................................... 100.8250
2015......................................................... 100.4125
</TABLE>
and at 100% on or after December 15, 2016.
TAX EVENT OR CAPITAL TREATMENT EVENT PREPAYMENT
If a Tax Event or a Capital Treatment Event shall occur and be continuing,
the Corporation may, at its option and subject to receipt of prior approval of
the Federal Reserve if then required under applicable regulations, guidelines or
policies of the Federal Reserve, terminate the Trust and distribute the Junior
Subordinated Debt Securities to the holders of the Trust Securities at any time
within 90 days of the occurrence of such Tax Event or Capital Treatment Event,
as the case may be, and, if such Tax Event or Capital Treatment Event, as the
case may be, continues notwithstanding the taking of such actions, to prepay the
Junior Subordinated Debt Securities in whole (but not in part), in the case of a
redemption prior to December 15, 2006, at a redemption price (the "Event
Prepayment Price") equal to the Make-Whole Amount plus accrued interest to but
excluding the date fixed for redemption. The "Make-Whole Amount" will be equal
to the greater of (i) 100% of the principal amount of such Junior Subordinated
Debt Securities and (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 Optional Prepayment Price with respect to an optional redemption of
such Junior Subordinated Debt Securities on December 15, 2006, together with the
present values of scheduled payments of interest from the redemption date to
December 15, 2006 (the "Remaining Life"), in each case discounted to the
redemption date on a semi-annual basis (assuming a 360-day year consisting of
30-day months) at the Adjusted Treasury Rate. In the case of a redemption on or
after December 15, 2006 following a Tax Event or a Capital Treatment Event, the
Event Prepayment Price shall equal the Optional Prepayment Price then applicable
to a redemption under "-- Optional Redemption" above. See "Description of
Capital Securities -- Liquidation of the Trust and Distribution of Junior
Subordinated Debt Securities."
"Adjusted Treasury Rate" means, with respect to any redemption date, the
Treasury Rate plus (i) 1.25% if such redemption date occurs on or before January
1, 1998 or (ii) 0.50% if such redemption date occurs after January 1, 1998.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a day
on which banking institutions in The City of New York are authorized or required
by law or executive order to remain closed, or (c) a day on which the Property
Trustee's Corporate Trust Office or the Corporate Trust Office of the Debenture
Trustee is closed for business.
"Capital Treatment Event" means the reasonable determination by the
Corporation that, as a result of the occurrence of any amendment to, or change
(including any announced prospective change) in, the laws (or any rules or
regulations thereunder) of the United States or any political subdivision
thereof or therein, or as a result of any official or administrative
pronouncement or action or judicial decision interpreting or applying such laws
or regulations, which amendment or change is effective or such pronouncement,
action or decision is announced on or after the date of issuance of the Capital
Securities, there is more than an insubstantial risk that the Corporation will
not be entitled to treat an amount equal to Liquidation Amount of the Capital
Securities as "Tier 1 Capital" (or the then equivalent thereof) for purposes of
the capital adequacy guidelines of the Federal Reserve, as then in effect and
applicable to the Corporation.
"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
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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 December 15,
2006, 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 (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 Debenture
Trustee obtains fewer than five such Reference Treasury Dealer Quotations, the
average of all such Quotations.
"Quotation Agent" means UBS Securities LLC and its successors; provided,
however, that if the foregoing shall cease to be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer"), the
Corporation shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer" means (i) the Quotation Agent and (ii) any
other Primary Treasury Dealer selected by the Debenture Trustee after
consultation with the Corporation.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Debenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Debenture Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such redemption date.
"Tax Event" means the receipt by the Corporation of an opinion of counsel
experienced in such matters to the effect that, as a result of any amendment to,
or change (including any announced proposed change) in, the laws or any
regulations thereunder of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or which proposed
change, pronouncement or decision is announced on or after the Issue Date, there
is more than an insubstantial risk that (i) the Trust is, or will be within 90
days of the date of such opinion, subject to United States Federal income tax
with respect to income received or accrued on the Junior Subordinated Debt
Securities, (ii) interest payable by the Corporation on the Junior Subordinated
Debt Securities is not, or within 90 days of the date of such opinion, will not
be, deductible by the Corporation, in whole or in part, for United States
Federal income tax purposes or (iii) the Trust is, or will be within 90 days of
the date of such opinion, subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
"Treasury Rate" means (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 Federal Reserve 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 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 Treasury Rate shall be calculated on the third
Business Day preceding the redemption date.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Junior Subordinated Debt
Securities at its registered address. Unless the Corporation defaults in payment
of the Event Prepayment Price, on and after the prepayment date interest ceases
to accrue on the Junior Subordinated Debt Securities.
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RESTRICTIONS ON CERTAIN PAYMENTS
The Corporation has also covenanted that it will not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Corporation's capital stock or
(ii) make any payment of principal, interest or premium, if any, on or repay or
repurchase or redeem any debt securities of the Corporation (including Other
Debentures) that rank pari passu in all respects with or junior in interest to
the Junior Subordinated Debt Securities or make any guarantee payments with
respect to any guarantee by the Corporation of the debt securities of any
subsidiary of the Corporation (including under Other Guarantees) if such
guarantee ranks pari passu in all respects with or junior in interest to the
Junior Subordinated Debt Securities (other than (a) dividends or distributions
in common stock of the Corporation, (b) any declaration of a dividend in
connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the
Guarantee, (d) purchases or acquisitions of shares of the Corporation's common
stock in connection with the satisfaction by the Corporation of its obligations
under any employee benefit plan or any other contractual obligation of the
Corporation (other than a contractual obligation ranking pari passu in all
respects with or junior to the Junior Subordinated Debt Securities), (e) as a
result of a reclassification of the Corporation's capital stock or the exchange
or conversion of one class or series of the Corporation's capital stock for
another class or series of the Corporation's capital stock or (f) the purchase
of fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged) if at such time (i) there shall have occurred a
Debenture Event of Default, (ii) the Corporation shall be in default with
respect to its payment of any obligations under the Guarantee or (iii) the
Corporation shall have given notice of its election of an Extension Period as
provided in the Indenture and shall not have rescinded such notice, or such
Extension Period, or any extension thereof, shall be continuing.
MODIFICATION OF INDENTURE
From time to time the Corporation and the Debenture Trustee may, without
the consent of the holders of Junior Subordinated Debt Securities, amend, waive
or supplement the Indenture for specified purposes, including, among other
things, curing ambiguities, defects or inconsistencies (provided that any such
action does not materially adversely affect the interest of the holders of
Junior Subordinated Debt Securities or the holders of the Capital Securities so
long as they remain outstanding) and qualifying, or maintaining the
qualification of, the Indenture under the Trust Indenture Act. The Indenture
contains provisions permitting the Corporation and the Debenture Trustee, with
the consent of the holders of not less than a majority in principal amount of
Junior Subordinated Debt Securities, to modify the Indenture in a manner
affecting the rights of the holders of Junior Subordinated Debt Securities;
provided, however, that no such modification may, without the consent of the
holder of each outstanding Junior Subordinated Debt Security so affected, (i)
change the Stated Maturity, or reduce the principal amount of the Junior
Subordinated Debt Securities, or reduce the rate or extend the time of payment
of interest thereon or (ii) reduce the percentage of principal amount of Junior
Subordinated Debt Securities, the holders of which are required to consent to
any such modification of the Indenture.
In addition, the Corporation and the Debenture Trustee may execute, without
the consent of any holder of Junior Subordinated Debt Securities, any
supplemental Indenture for the purpose of creating any Other Debentures.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to the Junior Subordinated Debt Securities that has occurred
and is continuing constitutes a "Debenture Event of Default":
(i) failure for 30 days to pay any interest on the Junior Subordinated
Debt Securities when due (subject to the deferral of any due date in the
case of an Extension Period); or
(ii) failure to pay any principal or premium, if any, on the Junior
Subordinated Debt Securities when due, whether at maturity, upon
redemption, by declaration of acceleration or otherwise; or
(iii) failure to observe or perform in any material respect certain
other covenants contained in the Indenture for 90 days after written notice
to the Corporation from the Debenture Trustee or the holders of at least
25% in aggregate outstanding principal amount of the Junior Subordinated
Debt Securities; or
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(iv) certain events in bankruptcy, insolvency or reorganization of the
Corporation; or
(v) the voluntary or involuntary dissolution, winding-up or
termination of the Trust, except in connection with the distribution of the
Junior Subordinated Debt Securities to the holder 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.
The deferral(s) of the Corporation's obligation to pay interest during an
Extension Period will not constitute a failure to pay interest when due and will
therefore not constitute a Debenture Event of Default.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debt Securities have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Debenture
Trustee. The Debenture Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of the Junior Subordinated Debt Securities may
declare the principal due and payable immediately upon a Debenture Event of
Default and, should the Debenture Trustee or such holders of Junior Subordinated
Debt Securities fail to make such declaration, the holders of at least 25% in
aggregate Liquidation Amount of the Capital Securities shall have such right.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debt Securities may annul such declaration and waive the
default if the default (other than the non-payment of the principal of the
Junior Subordinated Debt Securities which has become due solely by such
acceleration) has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration has
been deposited with the Debenture Trustee. Should the holders of Junior
Subordinated Debt Securities fail to annul such declaration and waive such
default, the holders of a majority in aggregate Liquidation Amount of the
Capital Securities shall have such right.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debt Securities affected thereby may, on behalf of the
holders of all the Junior Subordinated Debt Securities, waive any past default,
except a default in the payment of principal or interest (unless such default
has been cured and a sum sufficient to pay all matured installments of interest
and principal due otherwise than by acceleration has been deposited with the
Debenture Trustee) or a default in respect of a covenant or provision which
under the Indenture cannot be modified or amended without the consent of the
holder of each outstanding Junior Subordinated Debt Security. Should the holders
of such Junior Subordinated Debt Securities fail to annul such declaration and
waive such default, the holders of a majority in aggregate Liquidation Amount of
the Capital Securities shall have such right. The Corporation is required to
file annually with the Debenture Trustee a certificate as to whether or not the
Corporation is in compliance with all the conditions and covenants applicable to
it under the Indenture.
In case a Debenture Event of Default shall occur and be continuing, the
Property Trustee will have the right to declare the principal of and the
interest on the Junior Subordinated Debt Securities, and any other amounts
payable under the Indenture, to be forthwith due and payable and to enforce its
other rights as a creditor with respect to the Junior Subordinated Debt
Securities.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Corporation to pay interest or
principal on the Junior Subordinated Debt Securities on the date such interest
or principal is otherwise payable, a holder of Capital Securities may institute
a Direct Action. The deferral(s) of the Corporation's obligation to pay interest
during an Extension Period will not constitute a Debenture Event of Default or
failure to pay interest, and therefore in such circumstances a holder of Capital
Securities will not have the right to institute a Direct Action. The Corporation
may not amend the Indenture to remove the foregoing right to bring a Direct
Action without the prior written consent of the holders of all of the Capital
Securities. If the right to bring a Direct Action is removed following the
Exchange Offer, the Trust may become subject to the reporting obligations under
the Securities Exchange Act of 1934, as amended. Notwithstanding any payments
made to a holder of Capital Securities by the Corporation in connection with a
Direct Action, the Corporation shall remain obligated to pay the principal of or
interest on the Junior Subordinated Debt Securities, and the Corporation shall
be subrogated to the rights of the holder of such Capital Securities with
respect to payments on the Capital Securities to the extent of any payments made
by the Corporation to such holder in any Direct Action.
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The holders of the Capital Securities will not be able to exercise directly
any remedies, other than those set forth in the preceding paragraph, available
to the holders of the Junior Subordinated Debt Securities unless there shall
have been an Event of Default under the Declaration. See "-- Description of
Capital Securities -- Events of Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Corporation shall not consolidate with or
merge with or into any other Person or convey, transfer or lease its properties
and assets substantially as an entirety to any Person, and no Person shall
consolidate with or merge with or into the Corporation or convey, transfer or
lease its properties and assets substantially as an entirety to the Corporation,
unless (i) in case the Corporation consolidates with or merges with or into
another Person or conveys or transfers its properties and assets substantially
as an entirety to any Person, the successor Person is organized under the laws
of the United States or any state or the District of Columbia, and such
successor Person expressly assumes the Corporation's obligations on the Junior
Subordinated Debt Securities issued under the Indenture; (ii) immediately after
giving effect thereto, no Debenture Event of Default, and no event which, after
notice or lapse of time or both, would become a Debenture Event of Default,
shall have occurred and be continuing; (iii) such transaction is permitted under
the Declaration and the Guarantee and does not give rise to any breach or
violation of the Declaration or the Guarantee; and (iv) certain other conditions
as prescribed in the Indenture are met.
The general provisions of the Indenture do not afford holders of the Junior
Subordinated Debt Securities protection in the event of a highly leveraged or
other transaction involving the Corporation that may adversely affect holders of
the Junior Subordinated Debt Securities.
SUBORDINATION
In the Indenture, the Corporation has covenanted and agreed that any Junior
Subordinated Debt Securities issued thereunder shall be subordinate and junior
in right of payment to all Senior Debt to the extent provided in the Indenture.
Upon any payment or distribution of assets to creditors upon any liquidation,
dissolution, winding-up, reorganization, assignment for the benefit of
creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Corporation, the holders of Senior Debt will first
be entitled to receive payment in full of principal of (and premium, if any) and
interest, if any, on such Senior Debt before the holders of Junior Subordinated
Debt Securities will be entitled to receive or retain any payment or
distribution in respect thereof; provided, however, that holders of Senior Debt
shall not be entitled to receive payment of any such amounts to the extent that
such holders would be required by the subordination provisions of such Senior
Debt to pay such amounts over to the obligees on trade accounts payable or other
liabilities arising in the ordinary course of business.
In the event of the acceleration of the maturity of the Junior Subordinated
Debt Securities, the holders of all Senior Debt outstanding at the time of such
acceleration will first be entitled to receive payment in full of all amounts
due thereon (including any amounts due upon acceleration) before the holders of
the Junior Subordinated Debt Securities will be entitled to receive or retain
any payment in respect of the principal of (or premium, if any) or interest, if
any, on the Junior Subordinated Debt Securities; provided, however, that holders
of Senior Debt shall not be entitled to receive payment of any such amounts to
the extent that such holders would be required by the subordination provisions
of such Senior Debt to pay such amounts over to the obligees on trade accounts
payable or other liabilities arising in the ordinary course of business.
In the event that the Corporation shall default in the payment of any
principal, premium, if any, or interest, if any, on any Senior Debt when the
same becomes due and payable, whether at maturity or at a date fixed for
prepayment or by declaration of acceleration or otherwise, then, unless and
until such default shall have been cured or waived or shall have ceased to exist
or all Senior Debt shall have been paid, no direct or indirect payment (in cash,
property, securities, by set-off or otherwise) shall be made or agreed to be
made for principal, premium, if any, or interest, if any, on the Junior
Subordinated Debt Securities, or in respect of any redemption, repayment,
retirement, purchase or other acquisition of any of the Junior Subordinated Debt
Securities. The Corporation, once having defaulted on any Senior Debt, can
exercise its right to defer its obligations to make interest payments on the
Junior Subordinated Debt Securities and thereby not be in default on such
securities.
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"Debt" means (i) the principal of and premium, if any, and unpaid interest
on indebtedness for money borrowed, (ii) purchase money and similar obligations,
(iii) obligations under capital leases, (iv) guarantees, assumptions or purchase
commitments relating to, or other transactions as a result of which the
Corporation is responsible for the payment of such indebtedness of others, (v)
renewals, extensions and refunding of any such indebtedness, (vi) interest or
obligations in respect of any such indebtedness accruing after the commencement
of any insolvency or bankruptcy proceedings and (vii) obligations associated
with derivative products such as interest rate and currency exchange contracts,
foreign exchange contracts, commodity contracts and similar arrangements.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Corporation whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt of the
Corporation, whether incurred on or prior to the date of the Indenture or
thereafter incurred, unless, in the instrument creating or evidencing the same
or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Junior Subordinated Debt
Securities or the Other Debentures; provided, however, that Senior Debt shall
not be deemed to include (i) any Debt of the Corporation which when incurred and
without respect to any election under Section 1111(b) of the United States
Bankruptcy Code of 1978, as amended, was without recourse to the Corporation,
(ii) any Debt of the Corporation to any of its subsidiaries, (iii) Debt to any
employee of the Corporation, (iv) Debt which by its terms is subordinated to
trade accounts payable or accrued liabilities arising in the ordinary course of
business to the extent that payments made to the holders of such Debt by the
holders of the Junior Subordinated Debt Securities as a result of the
subordination provisions of the Indenture would be greater than such payments
otherwise would have been as a result of any obligation of such holders of such
Debt to pay amounts over to the obligees on such trade accounts payable or
accrued liabilities arising in the ordinary course of business as a result of
subordination provisions to which such Debt is subject; and (v) any other debt
securities issued pursuant to the Indenture.
The Indenture places no limitation on the amount of Senior Debt that may be
incurred by the Corporation. The Corporation expects from time to time to incur
additional indebtedness constituting Senior Debt.
RESTRICTIONS ON TRANSFER
The Junior Subordinated Debt Securities will be issued, and may be
transferred only, in minimum denominations of not less than $1,000 and multiples
of $1,000 in excess thereof. Any transfer, sale or other disposition of Junior
Subordinated Debt Securities in a denomination of less than $1,000 shall be
deemed to be void and of no legal effect whatsoever. Any such transferee shall
be deemed not to be the holder of such Junior Subordinated Debt Securities for
any purpose, including but not limited to the receipt of payments on such Junior
Subordinated Debt Securities, and such transferee shall be deemed to have no
interest whatsoever in such Junior Subordinated Debt Securities.
GOVERNING LAW
The Indenture and the Junior Subordinated Debt Securities will be governed
by and construed in accordance with the laws of the State of New York.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of Junior Subordinated Debt Securities, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. The Debenture Trustee is not required to expend
or risk its own funds or otherwise incur personal financial liability in the
performance of its duties if the Debenture Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
DESCRIPTION OF GUARANTEE
The Old Guarantee was executed and delivered by the Corporation
concurrently with the issuance by the Trust of the Old Capital Securities for
the benefit of the holders from time to time of the Old Capital Securities and
the Common Securities. As soon as practicable after the date hereof, the Old
Guarantee will be exchanged by the Corporation for the Exchange Guarantee. The
Old Guarantee shall be of no force and effect after such exchange. This summary
of certain
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provisions of the Exchange Guarantee does not purport to be complete and is
subject to, and qualified in its entirety by reference to, all of the provisions
of the Exchange Guarantee, including the definitions therein of certain terms,
and the Trust Indenture Act. The Guarantee Trustee will hold the Guarantee for
the benefit of the holders of the Exchange Capital Securities, the Old Capital
Securities and the Common Securities. References in this section to the
"Guarantee" shall be deemed to refer to the Exchange Guarantee.
GENERAL
The Corporation will irrevocably agree to pay in full on a subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined
herein) to the holders of the Trust Securities, as and when due, regardless of
any defense, right of set-off or counterclaim that the Trust may have or assert
other than the defense of payment. The following payments with respect to the
Trust Securities, to the extent not paid by or on behalf of the Trust (the
"Guarantee Payments"), will be subject to the Guarantee: (i) any accrued and
unpaid Distributions required to be paid on the Trust Securities, to the extent
that the Trust has funds on hand available therefor at such time, (ii) the
applicable Redemption Price with respect to Trust Securities called for
redemption, to the extent that the Trust has funds on hand available therefor at
such time, or (iii) upon a voluntary or involuntary dissolution, winding up or
liquidation of the Trust (other than in connection with the distribution of
Junior Subordinated Debt Securities to the holders of the Trust Securities or
the redemption of all of the Trust Securities) the lesser of (a) the Liquidation
Distribution, 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 Trust Securities upon liquidation of the Trust after satisfaction of
liabilities to creditors of the Trust as required by applicable law. The
Corporation's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Corporation to the holders of the Trust
Securities or by causing the Trust to pay such amounts to such holders.
The Guarantee will be an irrevocable guarantee on a subordinated basis of
the Trust's obligations under the Capital Securities, although it will apply
only to the extent that the Trust has funds available to make such payments, and
is not a guarantee of collection. If the Corporation does not make interest
payments on the Junior Subordinated Debt Securities held by the Trust, the Trust
will not be able to pay Distributions on the Capital Securities and will not
have funds legally available therefor.
The Guarantee will rank subordinate and junior in right of payment to all
Senior Debt. See "-- Status of the Guarantee." Because the Corporation is a
holding company, the right of the Corporation to participate in any distribution
of assets of any subsidiary, upon such subsidiary's liquidation or
reorganization or otherwise, is subject to the prior claims of creditors of such
subsidiary, except to the extent the Corporation may itself be recognized as a
creditor of that subsidiary. Accordingly, the Corporation's obligations under
the Guarantee will be effectively subordinated to all existing and future
liabilities of the Corporation's subsidiaries, and claimants should look only to
the assets of the Corporation for payments thereunder. See "Bancorp Hawaii,
Inc." The Guarantee does not limit the incurrence or issuance of other secured
or unsecured debt of the Corporation, including Senior Debt, whether under the
Indenture, any other indenture that the Corporation may enter into in the future
or otherwise.
The Corporation has, through the Guarantee, the Declaration, the Junior
Subordinated Debt Securities and the Indenture, taken together, fully,
irrevocably and unconditionally guaranteed all of the Trust's obligations under
the Capital Securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the Capital Securities. See "Relationship Among the
Capital Securities, the Junior Subordinated Debt Securities and the Guarantee."
STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of the Corporation
and will rank subordinate and junior in right of payment to all Senior Debt in
the same manner as the Junior Subordinated Debt Securities.
The Guarantee will rank pari passu with all Other Guarantees issued by the
Corporation. The Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding directly
against the Corporation to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity). The
Guarantee will be held for the benefit of the holders of the Trust Securities.
The Guarantee will not be discharged except by payment of the Guarantee Payments
in full to the extent not paid by the
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Trust or upon distribution of the Junior Subordinated Debt Securities to the
holders of the Trust Securities. The Guarantee does not place a limitation on
the amount of additional Senior Debt that may be incurred by the Corporation.
The Corporation expects from time to time to incur additional indebtedness
constituting Senior Debt.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of the Capital Securities (in which case no vote will be
required), the Guarantee may not be amended without the prior approval of the
holders of not less than a majority of the aggregate Liquidation Amount of the
outstanding Capital Securities. The manner of obtaining any such approval will
be as set forth under "Description of Capital Securities -- Voting Rights;
Amendment of the Declaration." All guarantees and agreements contained in the
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Corporation and shall inure to the benefit of the holders
of the Capital Securities then outstanding.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of the
Corporation to perform any of its payment or other obligations thereunder;
provided, however, that except with respect to a default in payment of any
Guarantee Payment, the Corporation shall have received notice of default and
shall not have cured such default within 60 days after receipt of such notice.
The holders of not less than a majority in aggregate Liquidation Amount of the
Capital Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee.
Any holder of the Capital Securities may institute a legal proceeding
directly against the Corporation to enforce its rights under the Guarantee
without first instituting a legal proceeding against the Trust, the Guarantee
Trustee or any other person or entity.
The Corporation, as guarantor, is required to file annually with the
Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
Guarantee.
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Guarantee provides that the Corporation shall not consolidate with or
merge with or into any other Person or convey, transfer or lease its properties
and assets substantially as an entirety to any Person, and no Person shall
consolidate with or merge with or into the Corporation or convey, transfer or
lease its properties and assets substantially as an entirety to the Corporation,
unless (i) in case the Corporation consolidates with or merges with or into
another Person or conveys or transfers its properties and assets substantially
as an entirety to any Person, the successor Person is organized under the laws
of the United States or any state or the District of Columbia and such successor
Person expressly assumes the Corporation's obligations on the Guarantee; (ii)
immediately after giving effect thereto, no event of default under the
Guarantee, and no event which, after notice or lapse of time or both, would
become an event of default under the Guarantee, shall have happened and be
continuing; (iii) such transaction is permitted under the Declaration and the
Indenture and does not give rise to any breach or violation of the Declaration
or the Indenture; and (iv) certain other conditions as prescribed in the
Guarantee are met.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Corporation in performance of the Guarantee, undertakes to
perform only such duties as are specifically set forth in the Guarantee and,
after default with respect to the Guarantee, must exercise the same degree of
care and skill as a prudent person would exercise or use in the conduct of his
or her own affairs. Subject to this provision, the Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by the Guarantee at the
request of any holder of the Capital Securities
unless it is offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred thereby.
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TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon
full payment of the applicable Redemption Price of the Trust Securities, upon
full payment of the amounts payable upon liquidation of the Trust or upon
distribution of Junior Subordinated Debt Securities to the holders of the Trust
Securities. The Guarantee will continue to be effective or will be reinstated,
as the case may be, if at any time any holder of the Trust Securities must
restore payment of any sums paid under the Trust Securities or the Guarantee.
GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the laws
of the State of New York.
DESCRIPTION OF THE OLD SECURITIES
The terms of the Old Securities are identical in all material respects to
the Exchange Securities, except that (i) the Old Securities have not been
registered under the Securities Act, are subject to certain restrictions on
transfer and are entitled to certain rights under the Registration Agreement
(which rights will terminate upon consummation of the Exchange Offer, except
under limited circumstances); (ii) the Exchange Capital Securities will not
provide for any additional Distributions on account of certain breaches of the
Registration Agreement; and (iii) the Exchange Junior Subordinated Debt
Securities will not provide for any increase in the interest rate thereon. The
Old Securities provide under certain circumstances specified in the Registration
Agreement that interest on the principal amount of the Junior Subordinated Debt
Securities and Distributions on the Liquidation Amount of the Capital Securities
will accrue at an increased rate. The Exchange Securities are not, and upon
consummation of the Exchange Offer the Old Securities will not be, entitled to
any such additional Distributions or interest.
RELATIONSHIP AMONG THE CAPITAL SECURITIES,
THE JUNIOR SUBORDINATED DEBT SECURITIES AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Capital Securities
(to the extent the Trust has funds available for the payment thereof) are
irrevocably guaranteed by the Corporation as and to the extent set forth under
"Description of Exchange Securities -- Description of Guarantee." Taken
together, the Corporation's obligations under the Junior Subordinated Debt
Securities, the Indenture, the Declaration and the Guarantee provide, in the
aggregate, a full, irrevocable and unconditional guarantee of payments of
Distributions and other amounts due on the Capital Securities. No single
document standing alone or operating in conjunction with fewer than all of the
other documents constitutes such guarantee. It is only the combined operation of
these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Trust's obligations under the Capital Securities.
If and to the extent that the Corporation does not make payments on the Junior
Subordinated Debt Securities, the Trust will not pay Distributions or other
amounts due on the Capital Securities. The Guarantee does not cover payment of
Distributions when the Trust does not have sufficient funds to pay such
Distributions. In such event, the remedy of a holder of Capital Securities is to
institute a Direct Action. The obligations of the Corporation under the
Guarantee are subordinate and junior in right of payment to all Senior Debt.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other amounts are made when due on the
Junior Subordinated Debt Securities, such payments will be sufficient to cover
Distributions and other payments due on the Capital Securities, primarily
because (i) the aggregate principal amount or Prepayment Price of the Junior
Subordinated Debt Securities will be equal to the sum of the aggregate
Liquidation Amount or Redemption Price, as applicable, of the Trust Securities;
(ii) the interest rate and interest and other payment dates on the Junior
Subordinated Debt Securities will match the Distribution rate and Distribution
and other payment dates for the Trust Securities; (iii) the Corporation shall
pay for all costs, expenses and liabilities of the Trust except the Trust's
obligations to holders of Trust Securities under such Trust
59
<PAGE> 61
Securities; and (iv) the Declaration provides that the Trust will not engage in
any activity that is not consistent with the
limited purposes thereof.
ENFORCEMENT RIGHTS OF HOLDERS OF CAPITAL SECURITIES
A holder of any Capital Security may institute a legal proceeding directly
against the Corporation to enforce its rights under the Guarantee without first
instituting a legal proceeding against the Guarantee Trustee, the Trust or any
other person or entity.
A default or event of default under any Senior Debt would not constitute a
default or Event of Default under the Declaration. However, in the event of
payment defaults under, or acceleration of, Senior Debt, the subordination
provisions of the Indenture provide that no payments may be made in respect of
the Junior Subordinated Debt Securities until such Senior Debt has been paid in
full or any payment default thereunder has been cured or waived. Failure to make
required payments on Junior Subordinated Debt Securities would constitute an
Event of Default under the Declaration.
LIMITED PURPOSE OF THE TRUST
The Capital Securities evidence a beneficial interest in the Trust, and the
Trust exists for the sole purposes of (i) issuing the Trust Securities and
effecting the Exchange Offer for the Exchange Capital Securities, (ii) investing
the proceeds of the Old Capital Securities and the Common Securities in the Old
Junior Subordinated Debt Securities, (iii) exchanging the Junior Subordinated
Debt Securities for the Exchange Junior Subordinated Debt Securities in the
Exchange Offer and (iv) engaging in other activities necessary or incidental
thereto. A principal difference between the rights of a holder of a Capital
Security and a holder of a Junior Subordinated Debt Security is that a holder of
a Junior Subordinated Debt Security is entitled to receive from the Corporation
the principal amount of and interest accrued on Junior Subordinated Debt
Securities held, while a holder of Capital Securities is entitled to receive
Distributions from the Trust (or from the Corporation under the Guarantee) if
and to the extent the Trust has funds available for the payment of such
Distributions.
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary termination, winding-up or liquidation of
the Trust involving the liquidation of the Junior Subordinated Debt Securities,
after satisfaction of the liabilities of creditors of the Trust as required by
applicable law, the holders of the Capital Securities will be entitled to
receive, out of assets held by the Trust, the Liquidation Distribution in cash.
See "Description of Exchange Securities -- Description of Capital Securities --
Liquidation of the Trust and Distribution of Junior Subordinated Debt
Securities." Upon any voluntary or involuntary liquidation or bankruptcy of the
Corporation, the Property Trustee, as holder of the Junior Subordinated Debt
Securities, would be a subordinated creditor of the Corporation, subordinated in
right of payment to all Senior Debt as set forth in the Indenture, but entitled
to receive payment in full of principal and interest, before any stockholders of
the Corporation receive payments or distributions. Since the Corporation is the
guarantor under the Guarantee and has agreed to pay for all costs, expenses and
liabilities of the Trust (other than the Trust's obligations to the holders of
its Trust Securities), the positions of a holder of Capital Securities and a
holder of Junior Subordinated Debt Securities relative to other creditors and to
stockholders of the Corporation in the event of liquidation or bankruptcy of the
Corporation are expected to be substantially the same.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Cravath, Swaine & Moore, counsel to the Corporation and
the Trust ("Tax Counsel"), the following are the material United States Federal
income tax consequences of the ownership and disposition of Capital Securities.
Unless otherwise stated, this summary deals only with Capital Securities held as
capital assets by holders who acquired the Old Capital Securities upon original
issuance ("Initial Holders"). It does not deal with special classes of holders,
such as dealers in securities or currencies, life insurance companies, persons
holding Capital Securities as part of a straddle or as part of a hedging or
conversion transaction, or persons whose functional currency is not the United
States dollar. This summary is based on the Internal Revenue Code of 1986, as
amended (the "Code"), Treasury Regulations thereunder and administrative and
judicial interpretations thereof are as of the date hereof, all of which are
subject to change (possibly on a retroactive basis).
60
<PAGE> 62
INVESTORS ARE ADVISED TO CONSULT THEIR TAX ADVISORS AS TO THE UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES OF THE OWNERSHIP AND DISPOSITION OF CAPITAL
SECURITIES IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, AS WELL AS THE EFFECT OF
ANY STATE, LOCAL OR OTHER TAX LAWS.
EXCHANGE OF CAPITAL SECURITIES
In the opinion of Tax Counsel, the exchange of Old Securities for Exchange
Securities pursuant to the Exchange Offer should not constitute a taxable
exchange or other taxable event. Consequently, no gain or loss should be
realized by an Initial Holder upon receipt of an Exchange Capital Security in
exchange for an Old Capital Security, the holding period of the Exchange Capital
Security should include the holding period of the Old Capital Security exchanged
therefor and the adjusted tax basis of the Exchange Capital Security should be
the same as the adjusted tax basis of the Old Capital Security exchanged
therefor.
CLASSIFICATION OF THE TRUST
In the opinion of Tax Counsel, under current law and assuming full
compliance with the terms of the Declaration, the Trust will be classified for
United States Federal income tax purposes as a grantor trust and not as a
partnership or an association taxable as a corporation. Accordingly, each holder
of Capital Securities (a "Securityholder") will be considered the owner of a pro
rata portion of the Junior Subordinated Debt Securities held by the Trust and
will be required to include in gross income the pro rata share of income accrued
on the Junior Subordinated Debt Securities.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
In the opinion of Tax Counsel, under current law and assuming full
compliance with the Indenture, the Junior Subordinated Debt Securities will be
classified for United States Federal income tax purposes as indebtedness of the
Corporation.
INTEREST AND ORIGINAL ISSUE DISCOUNT
If an Extension Period occurs, the Junior Subordinated Debt Securities
would be considered to have original issue discount at all times after the
beginning of the first Extension Period, including after the termination of the
Extension Period. In addition, the Corporation's option to defer the payment of
interest on the Junior Subordinated Debt Securities during an Extension Period
might cause the Junior Subordinated Debt Securities to be considered initially
to be issued with original issue discount. The Corporation believes, and will
take the position, that this latter result will not arise because of an
exception in the Treasury Regulations that applies when there is only a "remote
" likelihood that an Extension Period will occur. Assuming that the likelihood
of an Extension Period is in fact remote, Tax Counsel believes that this
position is correct although there is no authority directly on point and the
Internal Revenue Service could take a contrary position.
If the original issue discount rules apply to the Junior Subordinated Debt
Securities (either following the occurrence of an Extension Period or
initially), each Securityholder, whether on the cash or accrual method of
accounting, will be required to accrue its pro rata share of original issue
discount into income in accordance with a constant yield method based on the
compounding of interest. As a result, income will be required to be reported by
Securityholders before the receipt of cash attributable to such income, and, in
particular, income will be reported during an Extension Period even though no
cash distributions are being made. If the original issue discount rules apply
for a period during which cash distributions are currently being made, the sum
of the daily accruals of income for a semi-annual period for a Securityholder
that purchased the Capital Securities for their liquidation value will equal the
cash distribution received by the Securityholder for such semi-annual period,
assuming no disposition prior to the record date for such distribution.
If the original issue discount rules apply, actual distributions of stated
interest will not be separately reported as income. A Securityholder's tax basis
for the Junior Subordinated Debt Securities will be increased by original issue
discount accrued into income, and decreased by cash distributions of interest.
If the original issue discount rules do not apply, stated interest will be
includable in a holder's gross income as ordinary interest income in accordance
with such holder's regular method of tax accounting.
61
<PAGE> 63
Whether or not the original issue discount rules apply, no portion of the
amounts received on the Capital Securities will be eligible for the corporate
dividends received deduction.
DISTRIBUTION OF JUNIOR SUBORDINATED DEBT SECURITIES OR CASH UPON LIQUIDATION OF
THE TRUST
Under current law, a distribution by the Trust of the Junior Subordinated
Debt Securities as described under the caption "Description of Capital
Securities -- Liquidation of the Trust and Distribution of Junior Subordinated
Debt Securities" will be non-taxable and will result in the Securityholder
receiving directly such Securityholder's pro rata share of the Junior
Subordinated Debt Securities previously held indirectly through the Trust, with
a holding period and tax basis equal to the holding period and adjusted tax
basis such Securityholder was considered to have had in such Securityholder's
pro rata share of the underlying Junior Subordinated Debt Securities immediately
prior to such distribution. If, however, the special event giving rise to the
distribution is a Tax Event which results in the Trust being treated as an
association taxable as a corporation, the distribution would constitute a
taxable event to holders of the Capital Securities.
MARKET DISCOUNT AND BOND PREMIUM
Securityholders other than Initial Holders may be considered to have
acquired their pro rata interest in the Junior Subordinated Debt Securities with
market discount, acquisition premium or amortizable bond premium. Such holders
are advised to consult their tax advisors as to the income tax consequences of
the acquisition, ownership and disposition of the Capital Securities.
DISPOSITION OF THE CAPITAL SECURITIES
Upon a sale, exchange or other disposition of the Capital Securities
(including a distribution of cash in redemption of a Securityholder's Capital
Securities upon redemption or repayment of the underlying Junior Subordinated
Debt Securities, but excluding the distribution of Junior Subordinated Debt
Securities), a Securityholder will be considered to have disposed of all or part
of such Securityholder's pro rata share of the Junior Subordinated Debt
Securities, and will recognize gain or loss equal to the difference between the
amount realized (other than amounts attributable to accrued but unpaid stated
interest that is not treated as original issue discount) and the
Securityholder's adjusted tax basis in such Securityholder's pro rata share of
the underlying Junior Subordinated Debt Securities deemed disposed of. A
holder's adjusted tax basis in the Capital Securities generally will be its
initial purchase price increased by original issue discount previously
includable in such holder's gross income to the date of disposition and
decreased by payments (other than payments of stated interest that are not
treated as original issue discount) received on the Capital Securities. Gain or
loss will be capital gain or loss (except to the extent of any accrued interest
or market discount not previously included in income). See " -- Market Discount
and Bond Premium" above. Such gain or loss will be long-term capital gain or
loss if the Capital Securities have been held for more than one year.
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
individual, corporation, partnership, estate or trust that is, as to the United
States, a non-resident alien individual or a foreign corporation, partnership,
estate or trust.
Under present United States Federal income tax law:
(i) payments by the Trust or any of its paying agents to any holder of
a Capital Security who or which is a United States Alien Holder will not be
subject to United States Federal income or withholding tax, provided that
(a) the beneficial owner of the Capital Security does not actually or
constructively own 10% or more of the total combined voting power of all
classes of stock of the Corporation entitled to vote; (b) the beneficial
owner of the Capital Security is not a controlled foreign corporation that
is related to the Corporation through stock ownership; (c) such interest
payments are not effectively connected with the conduct of a trade or
business within the United States by the United States Alien Holder; and
(d) either (A) the beneficial owner of the Capital Security certifies to
the Trust or its agent, under penalties of perjury, generally on IRS Form
W-8, that it is not a United States holder and provides its name and
address or (B) a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course of its
trade or business (a "Financial Institution") and holds the Capital
Security certifies to the Trust or its agent, under penalties of perjury,
that such statement has been received
62
<PAGE> 64
from the beneficial owner by it or by a Financial Institution between it
and the beneficial owner and furnishes the Trust or its agent with a copy
thereof; and
(ii) A United States Alien Holder of a Capital Security will not be
subject to United States Federal income or withholding tax on any gain
realized upon the sale or other disposition of a Capital Security unless
(a) the United States Alien Holder is an individual who is present in the
United States for 183 days or more in the taxable year of disposition, and
certain other conditions apply or (b) the gain is effectively connected
with the conduct by the United States Alien Holder of a trade or business
in the United States.
INFORMATION REPORTING TO HOLDERS
The Trust will report the interest paid or the original issue discount that
accrued during the year with respect to the Junior Subordinated Debt Securities,
and any gross proceeds received by the Trust from the retirement or redemption
of the Junior Subordinated Debt Securities, annually to the holders of record of
the Capital Securities and the Internal Revenue Service. The Trust currently
intends to deliver such reports to holders of record prior to January 31
following each calendar year.
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, Capital Securities may be
subject to a "backup" withholding tax of 31% unless the holder complies with
certain identification requirements. Any withheld amounts will generally be
allowed as a credit against the holder's Federal income tax, provided the
required information is timely filed with the Internal Revenue Service.
POSSIBLE TAX LAW CHANGES
On February 6, 1997, the Clinton Administration proposed legislation (the
"Proposed Legislation") which would, among other things, generally deny
corporate issuers a deduction for interest in respect of certain debt
obligations, such as the Junior Subordinated Debt Securities, if such debt
obligations have a maximum term in excess of 15 years and are not shown as
indebtedness on the issuer's applicable consolidated balance sheet. The Proposed
Legislation is proposed to be effective for instruments issued on or after the
date of "first committee action," which has not yet occurred and is not expected
to occur prior to the Expiration Date. As a result, the Proposed Legislation
should not apply to the Junior Subordinated Debt Securities. There can be no
assurance, however, that the effective date contained in the Proposed
Legislation will not be changed if such legislation is enacted, or that other
legislation enacted after the date hereof will not otherwise adversely affect
the ability of the Corporation to deduct the interest payable on the Junior
Subordinated Debt Securities. Such a change could give rise to a Tax Event. See
"Description of Capital Securities -- Liquidation of the Trust and Distribution
of Junior Subordinated Debt Securities."
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Securities received in
exchange for Old Capital Securities where such Old Capital Securities were
acquired by such broker-dealer as a result of market-making activities or other
trading activities. The Trust and the Corporation have agreed that, starting on
the Expiration Date and ending on the close of business on the 180th day
following the Expiration Date, they will make this Prospectus, as amended or
supplemented, available to any broker-dealer for use in connection with any such
resale. In addition, until , 1997, all dealers effecting
transactions in the Exchange Securities may be required to deliver a prospectus.
The Corporation and the Trust will not receive any proceeds from any sale
of Exchange Securities by broker-dealers. Exchange Securities received by
broker-dealers for their own account pursuant to the Exchange Offer may be sold
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the Exchange
Securities or a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such prevailing market
prices or at negotiated prices. Any such resale may be made directly to
63
<PAGE> 65
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer and/or the
purchasers of any such Exchange Securities. Any broker-dealer that resells
Exchange Securities that were received by it for its own account pursuant to the
Exchange Offer and any broker or dealer that participates in a distribution of
such Exchange Securities may be deemed to be an "underwriter" within the meaning
of the Securities Act and any profit of any such resale of Exchange Securities
and any commissions or concessions received by any such persons may be deemed to
be underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
VALIDITY OF SECURITIES
Certain matters of Delaware law relating to the validity of the Exchange
Capital Securities, the enforceability of the Declaration and the formation of
the Trust will be passed upon by Potter Anderson & Corroon, special Delaware
Counsel to the Trust. The validity of the Exchange Guarantee and the Exchange
Junior Subordinated Debt Securities will be passed upon for the Corporation by
Metzger, Hollis, Gordon & Alprin, which may rely on the opinion of Potter
Anderson & Corroon as to matters of Delaware law. Certain matters relating to
United States Federal income tax considerations will be passed upon for the
Corporation by Cravath, Swaine & Moore.
EXPERTS
The consolidated financial statements of condition of the Corporation and
its subsidiaries appearing in the Corporation's Annual Report on Form 10-K for
the year ended December 31, 1996 have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
64
<PAGE> 66
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ ------------------------------------------------------------------------------
<C> <C> <S> <C>
4.6 -- Form of Capital Security Certificate to be issued by Bancorp Hawaii
Capital Trust I and registered under the Securities Act of 1933, as
amended.
4.8 -- Form of Security for 8.25% Junior Subordinated Debt Security due December
15, 2026 to be issued by the Corporation and registered under the
Securities Act of 1933, as amended.
4.10 -- Form of Guarantee Agreement to be entered into by the Corporation and The
Bank of New York, as Guarantee Trustee, and registered under the
Securities Act of 1933, as amended.
5.1 -- Opinion and consent of Duane, Morris & Heckscher as to legality of the
Junior Subordinated Debt Securities and the Guarantee to be issued by the
Corporation.
5.2 -- Opinion of special Delaware counsel as to legality of the Capital
Securities to be issued by Bancorp Hawaii Capital Trust I.
25.1 -- Form T-1 Statement of Eligibility of The Bank of New York to act as
trustee under the Junior Subordinated Indenture.
25.2 -- Form T-1 Statement of Eligibility of The Bank of New York to act as
trustee under the Amended and Restated Declaration of Trust.
25.3 -- Form T-1 Statement of Eligibility of The Bank of New York under the
Guarantee for the benefit of the holders of Capital Securities.
99.1 -- Form of Letter of Transmittal.
99.2 -- Form of Notice of Guaranteed Delivery.
99.3 -- Form of Exchange Agent Agreement.
</TABLE>
II-1
<PAGE> 67
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, BANCORP HAWAII,
INC. CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF
THE REQUIREMENTS FOR FILING THIS FORM S-4 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF HONOLULU, STATE OF HAWAII, ON APRIL 8, 1997.
BANCORP HAWAII, INC.
By: /s/ LAWRENCE M. JOHNSON
------------------------------------
Lawrence M. Johnson
Chairman of the Board
and Chief Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED BELOW ON APRIL 8, 1997.
/s/ LAWRENCE M. JOHNSON
- ------------------------------------------------------
Lawrence M. Johnson
Chairman of the Board and Chief Executive Officer
/s/ PETER D. BALDWIN*
- ------------------------------------------------------
Peter D. Baldwin
Director
/s/ MARY G. F. BITTERMAN*
- ------------------------------------------------------
Mary G. F. Bitterman
Director
/s/ RICHARD J. DAHL*
- ------------------------------------------------------
Richard J. Dahl
Director
/s/ DAVID A. HEENAN*
- ------------------------------------------------------
David A. Heenan
Director
/s/ STUART T. K. HO*
- ------------------------------------------------------
Stuart T. K. Ho
Director
/s/ HERBERT M. RICHARDS, JR.*
- ------------------------------------------------------
Herbert M. Richards, Jr.
Director
/s/ H. HOWARD STEPHENSON*
- ------------------------------------------------------
H. Howard Stephenson
Director
/s/ FRED E. TROTTER*
- ------------------------------------------------------
Fred E. Trotter
Director
/s/ STANLEY S. TAKAHASHI*
- ------------------------------------------------------
Stanley S. Takahashi
Director
/s/ K. TIM YEE*
- ------------------------------------------------------
K. Tim Yee
Director
/s/ DAVID A. HOULE*
- ------------------------------------------------------
David A. Houle
Chief Financial Officer
/s/ DENIS K. ISONO*
- ------------------------------------------------------
Denis K. Isono
Chief Accounting Officer
*By: /s/ LAWRENCE M. JOHNSON
- ------------------------------------------------------
Lawrence M. Johnson
Attorney-in-fact
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, BANCORP HAWAII
CAPITAL TRUST I CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT
MEETS ALL THE REQUIREMENTS FOR FILING THIS FORM S-4 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF HONOLULU, AND STATE OF HAWAII ON APRIL 8, 1997.
BANCORP HAWAII CAPITAL TRUST I
By: /s/ DAVID A. HOULE
------------------------------------
David A. Houle
Administrative Trustee
By: /s/ JOSEPH T. KIEFER
------------------------------------
Joseph T. Kiefer
Administrative Trustee
II-2
<PAGE> 68
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------ ------------------------------------------------------------------------------ ------------
<C> <C> <S> <C>
4.6 -- Form of Capital Security Certificate to be issued by Bancorp Hawaii
Capital Trust I and registered under the Securities Act of 1933, as
amended..................................................................
4.8 -- Form of Security for 8.25% Junior Subordinated Debt Security due December
15, 2026 to be issued by the Corporation and registered under the
Securities Act of 1933, as amended.......................................
4.10 -- Form of Guarantee Agreement to be entered into by the Corporation and The
Bank of New York, as Guarantee Trustee, and registered under the
Securities Act of 1933, as amended.......................................
5.1 -- Opinion and consent of Duane, Morris & Heckscher as to legality of the
Junior Subordinated Debt Securities and the Guarantee to be issued by the
Corporation..............................................................
5.2 -- Opinion of special Delaware counsel as to legality of the Capital
Securities to be issued by Bancorp Hawaii Capital Trust I................
25.1 -- Form T-1 Statement of Eligibility of The Bank of New York to act as
trustee under the Junior Subordinated Indenture..........................
25.2 -- Form T-1 Statement of Eligibility of The Bank of New York to act as
trustee under the Amended and Restated Declaration of Trust..............
25.3 -- Form T-1 Statement of Eligibility of The Bank of New York under the
Guarantee for the benefit of the holders of Capital Securities...........
99.1 -- Form of Letter of Transmittal............................................
99.2 -- Form of Notice of Guaranteed Delivery....................................
99.3 -- Form of Exchange Agent Agreement.........................................
</TABLE>
<PAGE> 1
Exhibit 4.6
This Capital Securities Certificate is a Global Capital Securities
Certificate within the meaning of the Declaration of Trust hereinafter referred
to and is registered in the name of a Depositary or a nominee of the Depositary.
This Capital Securities Certificate is exchangeable for Capital Securities
Certificates registered in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the Declaration of Trust
and no transfer of this Capital Securities Certificate (other than a transfer of
this Capital Securities Certificate 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 the limited circumstances
described in the Declaration of Trust.
<PAGE> 2
2
Unless this Capital Securities Certificate is presented by an
authorized representative of The Depository Trust Company ("DTC")(55 Water
Street, New York) to Bancorp Hawaii Capital Trust I or its agent for
registration of transfer, exchange or payment, and any Capital Securities
Certificate issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of DTC (and any payment hereon 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 A PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede
& Co., has an interest herein.
<PAGE> 3
3
CERTIFICATE NUMBER NUMBER OF CAPITAL SECURITIES
BHTCI-
CUSIP NO. [ ]
CERTIFICATE EVIDENCING CAPITAL SECURITIES
OF
BANCORP HAWAII CAPITAL TRUST I
8.25% CAPITAL SECURITIES, SERIES A
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
Bancorp Hawaii Capital Trust I, 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 an undivided beneficial interest in the
assets of Trust and has designated the Bancorp Hawaii Capital Trust I 8.25%
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 authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as
provided in Section 5.05 of the Declaration of Trust (as defined below). The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Capital Securities are set forth in, and this certificate and
the Capital Securities presented hereby are issued and shall in all respects be
subject to the terms and provisions of, the Amended and Restated Declaration of
Trust of the Trust dated as of December 30, 1996, as the same may be amended
from time to time (the "Declaration of Trust") including the designation of the
terms of Capital Securities as set forth therein. The Holder is entitled to the
benefits of the Guarantee Agreement entered into by Bancorp Hawaii, Inc., a
Hawaii corporation, and The Bank of New York, as Guarantee Trustee, dated as of
December 30, 1996, (the "Guarantee Agreement"), to the extent provided therein.
The Trust will furnish a copy of the Declaration of Trust and the Guarantee
Agreement to the Holder without charge upon written request to the Trust at its
principal place of business or registered office.
<PAGE> 4
4
Upon receipt of this certificate, the Holder is bound by the
Declaration of Trust and is entitled to benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the
Trust has executed this Certificate this ____ day of April, 1997.
BANCORP HAWAII CAPITAL TRUST I
by
-----------------------------------
Name:
Title: Administrative Trustee
COUNTERSIGNED AND REGISTERED:
THE BANK OF NEW YORK, as Transfer Agent
and Registrar
by
-----------------------------------
Authorized Signatory
<PAGE> 5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Capital Security to:
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
-------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Capital 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)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
SEC Rule 17Ad-15.
<PAGE> 1
EXHIBIT 4.8
BANCORP HAWAII, INC.
8.25% Junior Subordinated Debt Securities, Series A, due December 15, 2026
No. BHI JSD 1 $103,093,000
BANCORP HAWAII, INC., a corporation organized and existing under the laws
of Hawaii (hereinafter called the "Company", which term includes any successor
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to Bancorp Hawaii Capital Trust I, or its registered
assigns, the principal sum of $103,093,000 (One Hundred Three Million Ninety
Three Thousand Dollars) on December 15, 2026. The Company further promises to
pay interest on said principal sum from December 30, 1996, or from the most
recent interest payment date (each such date, an "Interest Payment Date") on
which interest has been paid or duly provided for, semi-annually, subject to
deferral as set forth herein, in arrears on June 15 and December 15 of each
year, commencing June 15, 1997, at the rate of 8.25% per annum, until the
principal hereof shall have become due and payable, plus Additional Interest,
if any, until the principal hereof is paid or duly provided for or made
available for payment and on any overdue principal 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 rate of 8.25% per annum,
compounded semi-annually as liquidated damages. The amount of interest payable
for any period shall be computed on the basis of twelve 30-day months and a
360-day year. The amount of interest payable for any partial period shall be
computed on the basis of the number of days elapsed in a 360-day year of
twelve 30-day months. In the event that any date on which interest is payable
on this Security is not a Business Day, then a 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 the date the payment was
originally payable. A "Business Day" shall mean any day other than (i) a
Saturday or Sunday, (ii) a day on which banking institutions in The City of New
York are authorized or required by law or executive order to remain closed or
(iii) a day on which the Corporate Trust Office of the Trustee, or the
Corporate Trust Office of the Property Trustee under the Declaration of Trust
hereinafter referred to for Bancorp Hawaii Capital Trust I is closed for
business. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date, as provided in the Indenture, shall
be paid to the Person in whose name this Security (or one or more Predecessor
Securities, as defined in the Indenture) is registered at the close of business
on the Regular Record Date for such interest installment, which shall be the
first day of the month in which an Interest Payment Date occurs. Any such
interest installment not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or more
<PAGE> 2
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully
provided in said Indenture.
So long as no Event of Default has occurred and is continuing, the
Company shall have the right at any time during the term of this Security, from
time to time, to defer payment of interest on such Security for up to 10
consecutive semi-annual interest payment periods with respect to each deferral
period (each an "Extension Period"), during which Extension Periods the Company
shall have the right to make partial payments of interest on any Interest
Payment Date, and at the end of which the Company shall pay all interest then
accrued and unpaid (together with Additional Interest thereon to the extent
permitted by applicable law); provided, however, that no Extension Period may
extend beyond the Maturity of this Security. During any such Extension Period,
the Company will not, (i) declare or pay any dividends or distributions on or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
the Company's outstanding capital stock or (ii) make any payment of principal
of, interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company including other debt that ranks pari passu with or
junior in interest to this Security or (iii) make any guarantee payments with
respect to any guarantee by the Company of the debt securities of any
subsidiary of the Company (including other guarantees) if such guarantee ranks
pari passu with or junior in interest to this Security (other than (a)
dividends or distributions in Common Stock of the Company, (b) any declaration
of a dividend in connection with the implementation of a stockholders' rights
plan, or the issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto, (c) payments
under the Guarantee Agreement (as defined in the Indenture), (d) purchases or
acquisitions of shares of the Company's Common Stock in connection with the
satisfaction by the Company of its obligations under any employee benefit plan
or other contractual obligation of the Company (other than a contractual
obligation ranking pari passu with or junior to these Securities), (e) as a
result of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock, or (f) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged). Prior to the termination of any such Extension Period,
the Company may further extend such Extension Period, provided, however, that
such extension does not cause such Extension Period to exceed 10 consecutive
semi-annual interest payment periods or extend beyond the Maturity of this
Security. Upon the termination of any such Extension Period and upon the
payment of all accrued
-2-
<PAGE> 3
and unpaid interest and any Additional Interest then due, the Company may elect
to begin a new Extension Period, subject to the above requirements. No
interest shall be due and payable during an Extension Period except at the end
thereof. The Company shall give the Holder of this Security and the Trustee
notice of its election to begin any Extension Period at least five Business
Days prior to the Interest Payment Date, prior to the earlier of (i) the date
the Distributions on the Capital Securities would have been payable except for
the election to begin or extend such Extension Period or (ii) the date the
Administrative Trustees are required to give notice to any automated quotation
system or to holders of such Capital Securities of the record date or the date
such Distributions are payable, but in any event not less than five Business
Days prior to such record date. There is no limitation on the number of times
the Company may elect to begin an Extension Period.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for
that purpose in the United States, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however, that at the option of the Company
payment of any interest may be made (except Securities in Global form) (i) by
check mailed to the address of the Person entitled thereto as such address
shall appear in the Securities Register, or (ii) by wire transfer in
immediately available funds at such place and to such account as may be
designated by the Person entitled thereto as specified in the Securities
Register.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all Senior Debt, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
actions as may be necessary or appropriate to effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes. Each Holder hereof, by his acceptance hereof, waives all notice of
the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Debt, whether now outstanding or hereafter
incurred, and waives reliance by each such holder upon said provisions.
Reference is herby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
-3-
<PAGE> 4
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: , 1997 BANCORP HAWAII, INC.,
[Seal] By:
------------------
Attest:
- -----------------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE SECURITIES REFERRED TO IN THE WITHIN-MENTIONED
INDENTURE.
THE BANK OF NEW YORK, AS TRUSTEE
By:
--------------------------
AUTHORIZED SIGNATORY
-4-
<PAGE> 5
Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under a Junior Subordinated Indenture, dated as of December 30, 1996,
as supplemented by an Officers' Certificate dated as of December 30, 1996
(herein called the "Indenture"), between the Company and The Bank of New York,
as Trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Trustee,
the Company and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is
one of the series designated on the face hereof, limited in aggregate principal
amount to $103,093,000.
All terms used in this Security that are defined in the Indenture and
in the Amended and Restated Declaration of Trust of Bancorp Hawaii Capital
Trust I, dated as of December 30, 1996, as amended (the "Declaration of
Trust"), among Bancorp Hawaii, Inc., as Depositor, and the Trustees named
therein, shall have the meanings assigned to them in the Indenture or the
Declaration of Trust, as the case may be.
On or after December 15, 2006, the Company may at any time, at its
option, subject to the terms and conditions of Article XI of the Indenture and
subject to the Company having received prior approval of the Federal Reserve if
then required under applicable capital guidelines of the Federal Reserve,
redeem this Security in whole or in part at any time or from time to time prior
to maturity, at a redemption price (the "Optional Repayment Price") equal to
the following prices, expressed in percentages of the principal amount of the
Junior Subordinated Debt Securities together with accrued but unpaid interest
to but excluding the date fixed for redemption. If redeemed during the
12-month period beginning December 15:
<PAGE> 6
<TABLE>
<CAPTION>
Redemption
Year Price
---- -----
<S> <C>
2006 ........................ 104.1250%
2007 ........................ 103.7125
2008 ........................ 103.3000
2009 ........................ 102.8875
2010 ........................ 102.4750
2011 ........................ 102.0625
2012 ........................ 101.6500
2013 ........................ 101.2375
2014 ........................ 100.8250
2015 ........................ 100.4125
</TABLE>
and at 100% on or after December 15, 2016.
Upon the occurrence and continuation of a Tax Event or Capital Treatment
Event, the Company has the right to terminate the Trust and distribute a Like
Amount of the Junior Subordinated Debt Securities to the holders of the Trust
Securities in liquidation of the Trust within 90 days following the occurrence
of such Tax Event or Capital Treatment Event, as the case may be, and if a Tax
Event or Capital Treatment Event, as the case may be, continues notwithstanding
the taking of such actions, to redeem the Junior Subordinated Debt Securities in
whole, but not in part, at the Event Prepayment Price together with accumulated
distribution to but excluding the date fixed for redemption. The exercise of
such right is subject to the Corporation's having received prior approval of the
Federal Reserve to do so if then required under applicable guidelines or
policies of the Federal Reserve.
"Tax Event" means the receipt by the Company of an Opinion of Counsel
experienced in such matters to the effect that, as a result of any amendment
to, or change (including any announced proposed change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or which proposed
change, pronouncement or decision is announced on or after the Original issue
Date of the applicable series of Securities or of the applicable Capital
Securities issued by the Trust, there is more than an insubstantial risk that
(i) if the Trust holds such Securities, such Trust is, or will be within 90
days of the date of such Opinion of Counsel, subject to United States Federal
income tax with respect to income received or accrued on such Securities, (ii)
interest payable by the Company on such series of Securities is not, or within
90 days of the date of such Opinion of Counsel, subject to more than a de
minimis amount of other taxes, duties or other governmental charges.
-2-
<PAGE> 7
"Capital Treatment Event" means the reasonable determination by the
Company that, as a result of the occurrence of any amendment to, or change
(including any announced prospective change) in, the laws (or any rules or
regulations thereunder) of the United States or any political subdivision
thereof or therein, or as a result of any official or administrative
pronouncement or action or judicial decision interpreting or applying such laws
or regulations, which amendment or change is effective or such pronouncement,
action or decision is announced on or after the date of issuance of the Capital
Securities, there is more than an insubstantial risk that the Corporation will
not be entitled to treat an amount equal to the Liquidation Amount of the
Capital Securities as "Tier 1 Capital" (or the then equivalent thereof) for
purposes of the capital adequacy guidelines of the Federal Reserve, as then in
effect and applicable to the Company.
In the event of redemption of this Security in part only, a new
Security or Securities of this series for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of this Security may be declared due and
payable in the manner, with the effect and subject to the conditions provided
in the Indenture and in the Declaration of Trust.
The Indenture permits, with certain exceptions as therein provided, the
Company and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and
obligations of the Company and of the Holders of the Securities, with the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series to be affected by such supplemental
indenture. The Indenture also contains provisions permitting Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Security shall
be conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange hereof or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, if an
Event of Default with respect to the Securities of this series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of this series may declare the principal amount of all the
Securities of this series to be due and payable immediately, by a notice
-3-
<PAGE> 8
in writing to the Company (and to the Trustee if given by Holders), provided,
however, that, in the case of the Securities of this series issued to a Bancorp
Hawaii Trust, if upon an Event of Default, the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Securities of this series
fails to declare the principal of all the Securities of this series to be
immediately due and payable, the holders of at least 25% in aggregate
Liquidation Amount of the corresponding series of Capital Securities then
outstanding shall have such right by a notice in writing to the Company and the
Trustee. The Holders of a majority in aggregate principal amount of the
Outstanding Securities of these Securities may annul such declaration and waive
the default if the default (other than the non-payment of the principal of these
Securities which has become due solely by such acceleration) has been cured and
a sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Trustee. Should the
Holders of these Securities fail to annul such declaration and waive such
default, the holders of a majority in aggregate Liquidation Amount of the
Capital Securities shall have such right. Upon any such declaration such
specified amount of and the accrued interest (including any Additional Interest)
on all the Securities of this series shall become immediately due and payable,
provided that the payment of principal and interest (including any Additional
Interest) on such Securities shall remain subordinated to the extent provided in
Article XIV of the Indenture.
No reference herein to the Indenture and no provision of this Security
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 Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Securities
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company maintained pursuant to Section 10.2 of the
Indenture duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and Securities Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing and thereupon one
or more new Securities of this series, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees. No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee shall treat
the Person in whose name this Security is registered as the owner hereof for
all purposes, whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
-4-
<PAGE> 9
The Securities of this series 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 therein set
forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of such series of a different authorized
denomination, as requested by the Holder surrendering the same.
The Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security intend that such Security constitutes indebtedness
and agree to treat such Security as indebtedness for United States Federal,
state and local tax purposes.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF.
-5-
<PAGE> 1
- --------------------------------------------------------------------------------
EXHIBIT 4.10
GUARANTEE AGREEMENT
Between
BANCORP HAWAII, INC.
(as Guarantor)
and
THE BANK OF NEW YORK
(as Trustee)
Dated as of
___________________, 1997
- -------------------------------------------------------------------------------
<PAGE> 2
EXECUTION COPY
GUARANTEE AGREEMENT, dated as of __________, 1997,
executed and delivered by BANCORP HAWAII, INC., a bank holding
company (the "Guarantor") having its principal office at 130
Merchant Street, Honolulu, Hawaii 96813, and THE BANK OF NEW
YORK, a New York banking corporation, as trustee (the
"Guarantee Trustee"), for the benefit of the Holders
(as defined herein) from time to time of the Trust Securities
(as defined herein) of BANCORP HAWAII CAPITAL TRUST I, a
Delaware statutory business trust (the "Issuer").
WHEREAS pursuant to an Amended and Restated Declaration of Trust (the
"Declaration of Trust"), dated as of December 30, 1996, among the Trustees
named therein, the Guarantor, as Depositor, and the Holders from time to time
of undivided beneficial ownership interests in the assets of the Issuer, the
Issuer issued $100,000,000 aggregate Liquidation Amount of its 8.25% Capital
Securities Series A, Liquidation Amount $1,000 per Security (the "Old Capital
Securities") and $3,093,000 of aggregate liquidation preference of Common
Securities, liquidation preference $1,000 per security (the "Common Securities"
and collectively with the Old Capital Securities, the "Old Trust Securities")
representing undivided beneficial ownership interests in the assets of the
Issuer and having the terms set forth in the Declaration of Trust;
WHEREAS the Old Trust Securities were issued by the Issuer and the
proceeds thereof were used to purchase the Junior Subordinated Debt Securities
due December 15, 2026 (as defined in the Declaration of Trust) (the "Junior
Subordinated Debt Securities") of the Guarantor which were deposited with The
Bank of New York, as Property Trustee under the Declaration of Trust, as trust
assets;
WHEREAS pursuant to a registration statement declared effective by the
Securities and Exchange Commission the Company and the Trust will offer Holders
the opportunity to exchange (the "Exchange Offer") their Old Capital Securities
for Exchange Capital Securities (the "Exchange Capital Securities", and
collectively with the Common Securities, the "Exchange Trust Securities"); and
WHEREAS as incentive for the Holders to accept the Exchange Offer and
exchange their Old Capital Securities for Exchange Capital Securities the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, to pay to the Holders of the Trust Securities the Guarantee
<PAGE> 3
Payments (as defined herein) and to make certain other payments on the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the exchange by Holders of Old
Capital Securities for Exchange Capital Securities, which exchange the
Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and
delivers this Guarantee Agreement for the benefit of the Holders from time to
time of the Trust Securities.
ARTICLE I
Definitions
SECTION 1.01. Definitions. As used in this Guarantee Agreement, the
terms set forth below shall, unless the context otherwise requires, have the
following meanings. Capitalized or otherwise defined terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the
Declaration of Trust as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of the
Guarantor shall not be deemed to include the Issuer. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Common Securities" shall have the meaning specified in the first
recital of this Guarantee Agreement.
"Company" means Bancorp Hawaii, Inc.
"Debt" means, with respect to any Person, whether recourse is to all or
a portion of the assets of such Person whether or not contingent, (i) the
principal of and premium,
<PAGE> 4
if any, and unpaid interest on indebtedness for money borrowed, (ii) purchase
money and similar obligations, (iii) obligations under capital leases, (iv)
guarantees, assumptions or purchase commitments relating to, or other
transactions as a result of which the Company is responsible for the payment of,
such indebtedness of others, (v) renewals, extensions and refunding of any such
indebtedness, (vi) interest or obligations in respect of any such indebtedness
accruing after the commencement of any insolvency or bankruptcy proceedings and
(vii) obligations associated with derivative products such as interest rate and
currency exchange contracts, foreign exchange contracts, commodity contracts and
similar arrangements.
"Declaration of Trust" means the Amended and Restated Declaration of
Trust, dated December 30, 1996, executed by the Company, as Depositor, The Bank
of New York (Delaware), as Delaware Trustee, The Bank of New York, as Property
Trustee, and the Administrative Trustees named therein.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; provided, however,
that, except with respect to a default in payment of any Guarantee Payments,
the Guarantor shall have received notice of default and shall not have cured
such default within 60 days after receipt of such notice.
"Exchange Capital Securities" shall have the meaning specified in the
third recital of this Guarantee Agreement.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Trust Securities, to the extent not
paid or made by or on behalf of the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Declaration of Trust) required to be paid on
the Trust Securities, to the extent the Issuer shall have funds on hand
available therefor at such time, (ii) the redemption price, including all
accrued and unpaid Distributions to the date of redemption (the "Redemption
Price"), with respect to the Trust Securities called for redemption by the
Issuer to the extent the Issuer shall have funds on hand available therefor at
such time, and (iii) upon a voluntary or involuntary termination, winding-up or
liquidation of the Issuer, unless Junior Subordinated Debt Securities are
distributed to the Holders, the lesser of (a) the aggregate of the liquidation
preference of $1,000 per Trust Security Plus accrued and unpaid Distributions
on the Trust Securities to the date of payment to the extent the Issuer shall
have funds on hand
<PAGE> 5
available to make such payment at such time and (b) the amount of assets of the
Issuer remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Guarantor" shall have the meaning specified in the initial paragraph
of this Guarantee Agreement.
"Holder" means any holder, as registered on the books and records of
the Issuer, of any Trust Securities; provided, however, that in determining
whether the holders of the requisite percentage of Trust Securities have given
any request, notice, consent or waiver hereunder, "Holder" shall not include
the Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor or the
Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture dated as of
December 30, 1996, as supplemented and amended between the Guarantor and The
Bank of New York, as trustee.
"Issuer" shall have the meaning specified in the initial paragraph of
this Guarantee Agreement.
"List of Holders" has the meaning specified in Section 2.02(a).
"Majority in Liquidation Amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by the Holder(s), voting separately
as a class, of more than 50% of the aggregate Liquidation Amount of all then
outstanding Trust Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman and Chief Executive Officer, President or a
Vice President, and by the Treasurer, an Associate Treasurer, an Assistant
Treasurer, the Controller, the Secretary or an Assistant Secretary of such
Person, and delivered to the Guarantee Trustee. Any Officers' Certificate
delivered with respect to compliance
<PAGE> 6
with a condition or covenant provided for in this Guarantee Agreement shall
include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each officer,
such condition or covenant has been complied with.
"Old Capital Securities" shall have the meaning specified in the first
recital of this Guarantee Agreement.
"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" when used with respect to the Trustee means any
officer assigned to the Corporate Trust Office, including any vice president,
assistant vice president, assistant treasurer, assistant secretary or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and having direct
responsibility for the administration of the Indenture, and also, with respect
to a particular matter, any other officer to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
"Senior Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding) on
Debt, whether incurred on or prior to the date of the Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
<PAGE> 7
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Securities or to other Debt which is pari
passu with, or subordinated to, the Securities; provided, however, that Senior
Debt shall not be deemed to include (a) any Debt of the Company which, when
incurred and without respect to any election under Section 1111(b) of the
United States Bankruptcy Code of 1978, as amended, was without recourse to the
Company, (b) any Debt of the Company to any of its Subsidiaries, (c) any Debt
to any employee of the Company, (d) any Debt which by its terms is subordinated
to trade accounts payable or accrued liabilities arising in the ordinary course
of business to the extent that payments made to the holders of such Debt by the
holders of the Securities as a result of the subordination provisions of the
Indenture would be greater than such payments otherwise would have been as a
result of any obligation of such holders of such Debt to pay amounts over to
the obligees on such trade accounts payable or accrued liabilities arising in
the ordinary course of business as a result of the subordination provisions to
which such Debt is subject, (e) any other debt securities issued pursuant to
the Indenture and (f) this Guarantee.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb), as amended.
"Trust Securities" shall mean the aggregate of the Old Trust Securities
and the Exchange Trust Securities.
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application. (a) This Guarantee
Agreement will not be qualified under the Trust Indenture Act except upon the
effectiveness of a registration statement and the consummation of an exchange
offer pursuant to a registration rights agreement as contemplated in Article
XII of the Indenture.
(b) Upon qualification under the Trust Indenture Act as contemplated in
clause (a) above, if and to the
<PAGE> 8
extent that any provision of this Guarantee Agreement limits, qualifies or
conflicts with the duties imposed by Sections 310 to 317, inclusive, of the
Trust Indenture Act, such imposed duties shall control.
SECTION 2.02. List of Holders. (a) The Guarantor shall furnish or
cause to be furnished to the Guarantee Trustee (i) semiannually, on or before
December 4 and June 4 of each year, a list, in such form as the Guarantee
Trustee may reasonably require, of the names and addresses of the Holders
("List of Holders") as of a date not more than 15 days prior to the delivery
thereof, and (ii) at such other times as the Guarantee Trustee may request in
writing, within 30 days after the receipt by the Guarantor of any such request,
a List of Holders as of a date not more than 15 days prior to the time such
list is furnished, in each case to the extent such information is in the
possession or control of the Guarantor and is not identical to a previously
supplied list of Holders or has not otherwise been received by the Guarantee
Trustee in its capacity as such. The Guarantee Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the Guarantee Trustee. (a) The Guarantee
Trustee shall transmit to Holders such reports concerning the Guarantee Trustee
and its actions under this Guarantee as may be required pursuant to the Trust
Indenture Act, at the times and in the manner provided pursuant thereto.
(b) Reports so required to be transmitted at stated intervals of not
more than 12 months shall be transmitted no later than July 15 in each calendar
year, commencing with July 15, 1997.
(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Guarantee Trustee with each securities exchange
upon which the Exchange Capital Securities are listed and also with the
Commission. The Guarantor will promptly notify the Guarantee Trustee whenever
the Exchange Capital Securities are listed on any securities exchange.
<PAGE> 9
8
SECTION 2.04. Periodic Reports to the Guarantee Trustee. The
Guarantor shall provide to the Guarantee Trustee, the Securities and Exchange
Commission and the Holders such documents, reports and information, if any, as
required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act, in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
Delivery of such reports, information and documents to the Guarantee Trustee is
for informational purposes only and the Guarantee Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Guarantor's
compliance with any of its covenants hereunder (as to which the Guarantee
Trustee is entitled to rely exclusively on Officers' Certificates).
SECTION 2.05. Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with such conditions precedent, if any, provided for in this Guarantee Agreement
that relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by any officer
pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION 2.06. Events of Default; Waiver. The Holders of a Majority
in Liquidation Amount of the Trust Securities may, by vote, on behalf of the
Holders, waive any past Event of Default and its consequences. Upon such waiver,
any such Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent therefrom.
SECTION 2.07. Event of Default; Notice. (a) The Guarantee Trustee
shall, within 90 days after the occurrence of an Event of Default, transmit by
mail, first class postage prepaid, to the Holders, notices of all Events of
Default actually known to the Guarantee Trustee, unless such Events of Default
have been cured before the giving of such notice; provided, that, except in the
case of a default in the payment of a Guarantee Payment, the Guarantee Trustee
shall be protected in withholding such notice if and so long as the Board of
Directors, the executive committee or a
<PAGE> 10
9
trust committee of directors and/or Responsible Officers of the Guarantee
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless a Responsible Officer charged with the
administration of the Declaration of Trust shall have received written notice of
such Event of Default.
SECTION 2.08. Conflicting Interests. The Declaration of Trust shall
be deemed to be specifically described in this Guarantee Agreement for the
purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.
ARTICLE III
Powers, Duties and Rights of the
Guarantee Trustee
SECTION 3.01. Powers and Duties of the Guarantee Trustee. (a) This
Guarantee Agreement shall be held by the Guarantee Trustee for the benefit of
the Holders, and the Guarantee Trustee shall not transfer this Guarantee
Agreement to any Person except a Holder exercising his or her rights pursuant to
Section 5.04(iv) or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor Guarantee
Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, and such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be
<PAGE> 11
10
read into this Guarantee Agreement against the Guarantee Trustee. In case an
Event of Default has occurred (that has not been cured or waived pursuant to
Section 2.06), the Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Guarantee Agreement, and use the same degree of care
and skill in its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own wilful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be liable except
for the performance of such duties and obligations as are
specifically set forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to
the Guarantee Trustee and conforming to the requirements of this
Guarantee Agreement; but in the case of any such certificates or
opinions that by any provision hereof or of the Trust Indenture
Act are specifically required to be furnished to the Guarantee
Trustee, the Guarantee Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment was
made;
<PAGE> 12
11
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in Liquidation
Amount of the Trust Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon the Guarantee
Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers if the Guarantee Trustee shall
have reasonable grounds for believing that the repayment of such funds or
liability is not assured to it under the terms of this Guarantee Agreement
or indemnity satisfactory to it against such risk or liability is not
reasonably assured to it.
SECTION 3.02. Certain Rights of Guarantee Trustee. (a) Subject to
the provisions of Section 3.01:
(i) The Guarantee Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document reasonably believed by it to be
genuine and to have been signed, sent or presented by the proper party or
parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by all Officers'
Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee Agreement, the
Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting to take any action
hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers' Certificate which, upon
receipt of
<PAGE> 13
12
such request from the Guarantee Trustee, shall be promptly delivered by
the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel of its
selection, and the advice or written opinion of such legal counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be taken
by it hereunder in good faith and in accordance with such advice or
opinion. Such legal counsel may be legal counsel to the Guarantor or any
of its Affiliates and may be one of its employees. The Guarantee Trustee
shall have the right at any time to seek instructions concerning the
administration of this Guarantee Agreement from any court of competent
jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee Agreement at
the request or direction of any Holder, unless such Holder shall have
provided to the Guarantee Trustee such security and indemnity reasonably
satisfactory to it, against the costs, expenses (including attorneys' fees
and expenses) and liabilities that might be incurred by it in complying
with such request or direction, including such reasonable advances as may
be requested by the Guarantee Trustee; provided, that nothing contained in
this Section 3.02(a)(v) shall be taken to relieve the Guarantee Trustee,
upon the occurrence of an Event of Default, of its obligation to exercise
the rights and powers vested in it by this Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or attorneys, and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the
<PAGE> 14
13
part of any such agent or attorney appointed with due care by it
hereunder.
(viii) Whenever in the administration of this Guarantee Agreement the
Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (A) may request instructions from the
Holders, (B) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received and (C) shall be
fully protected in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.03. Indemnity. The Guarantor agrees to indemnify the
Guarantee Trustee and its directors, officers, agents and employees for, and to
hold them harmless against, any and all loss, damage, claim, liability or
expense incurred without negligence or bad faith on the part of the Guarantee
Trustee, arising out of or in connection with the acceptance or administration
of this Guarantee Agreement, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The Guarantee Trustee will
not claim or exact any lien or charge on any Guarantee Payments as a result of
any amount due to it under this Guarantee Agreement. This indemnity shall
survive the termination of this Guarantee Agreement or the resignation or
removal of the Guarantee Trustee.
SECTION 3.04. Expenses. The Guarantor shall from time to time
reimburse the Guarantee Trustee for its expenses and costs incurred in
connection with the performance of its duties hereunder. This reimbursement
obligation shall survive the termination of this Guarantee
<PAGE> 15
14
Agreement or the resignation or removal of the Guarantee Trustee.
ARTICLE IV
Guarantee Trustee
SECTION 4.01. Guarantee Trustee; Eligibility.
(a) There shall at all times be a Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture Act
to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements of
Section 310(c) of the Trust Indenture Act. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority, then, for the
purposes of this Section and to the extent permitted by the Trust
Indenture Act, the combined capital and surplus of such corporation shall
be deemed to be its combined capital and Surplus as set forth in its most
recent report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible
to so act under Section 4.10(a), the Guarantee Trustee shall immediately resign
in the manner and with the effect set out in Section 4.02(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
SECTION 4.02. Appointment, Removal and Resignation of the Guarantee
Trustee. (a) Subject to Section 4.02(b), in the absence of the existence of an
Event of Default, the Guarantee Trustee may be appointed or removed without
cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and
<PAGE> 16
15
has accepted such appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office
until a Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument in writing executed by
the Guarantee Trustee and delivered to the Guarantor, which resignation shall
not take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.02 within 60 days after
delivery to the Guarantor of an instrument of resignation or removal, the
Guarantee Trustee resigning or being removed may petition, at the expense of the
Guarantor, any court of competent jurisdiction for appointment of a Successor
Guarantee Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a Successor Guarantee Trustee.
ARTICLE V
Guarantee
SECTION 5.01. Guarantee. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by or on behalf of the Issuer),
as and when due, regardless of any defense, right of set-off or counterclaim
which the Issuer may have or assert. The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Guarantor to the Holders or by causing the Issuer to pay such amounts to the
Holders. The Guarantor shall give prompt written notice to the Guarantee Trustee
in the event it makes any direct payment hereunder.
SECTION 5.02. Waiver of Notice and Demand. The Guarantor hereby
waives notice of acceptance of the Guarantee Agreement and of any liability to
which it applies
<PAGE> 17
16
or may apply, presentment, demand for payment, any right to require a proceeding
first against the Guarantee Trustee, Issuer or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
SECTION 5.03. 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 Trust Securities to
be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions (other than any extension of time for
payment of Distributions that results from the extension of any interest
payment period on the Junior Subordinated Debt Securities as so provided
in the Indenture), Redemption Price, Liquidation Distribution or any other
sums payable under the terms of the Trust Securities or the extension of
time for the performance of any other obligation under, arising out of, or
in connection with, the Trust Securities;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Trust
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the
Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Trust
Securities;
<PAGE> 18
17
(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 5.03 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain the consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.04. Rights of Holders. The Guarantor expressly
acknowledges that: (i) this Guarantee Agreement will be deposited with the
Guarantee Trustee to be held for the benefit of the Holders; (ii) the Guarantee
Trustee has the right to enforce this Guarantee Agreement on behalf of the
Holders; (iii) the Holders of a Majority in Liquidation Amount of the Trust
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of this
Guarantee Agreement or exercising any trust or power conferred upon the
Guarantee Trustee under this Guarantee Agreement; and (iv) any Holder may
institute a legal proceeding directly against the Guarantor to enforce its
rights under this Guarantee Agreement, without first instituting a legal
proceeding against the Issuer or any other Person.
SECTION 5.05. Guarantee of Payment. This Guarantee Agreement creates
a guarantee of payment and not of collection. This Guarantee Agreement will not
be discharged except by payment of the Guarantee Payments in full (without
duplication of amounts theretofore paid by the Issuer) or upon distribution of
Junior Subordinated Debt Securities to Holders as provided in the Declaration of
Trust.
SECTION 5.06. Subrogation. The Guarantor shall be subrogated to all
(if any) rights of the Holders against the Issuer in respect of any amounts paid
to the Holders by the Guarantor under this Guarantee Agreement and shall have
the right to waive payment by the Issuer pursuant to Section 5.01; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any rights which
it
<PAGE> 19
18
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,
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 5.07. Independent Obligations. The Guarantor acknowledges
that its obligations hereunder are independent of the obligations of the Issuer
with respect to the Trust 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 5.03 hereof.
ARTICLE VI
Covenants and Subordination
SECTION 6.01. Subordination. This Guarantee Agreement will
constitute an unsecured obligation of the Guarantor and will rank subordinate
and junior in right of payment to all Senior Debt of the Guarantor.
SECTION 6.02. Pari Passu Guarantees. This Guarantee Agreement shall
rank pari passu with any similar Guarantee Agreements issued by the Guarantor on
behalf of the holders of Trust Securities issued by BANCORP HAWAII CAPITAL TRUST
I.
ARTICLE VII
Termination
SECTION 7.01. Termination. This Guarantee Agreement shall terminate
and be of no further force and effect upon (i) full payment of the Redemption
Price of all Trust Securities, (ii) the distribution of Junior Subordinated Debt
Securities to the Holders in exchange for all of the Trust Securities or (iii)
full payment of the amounts payable in accordance with the Declaration of Trust
upon liquidation of the Issuer. Notwithstanding the
<PAGE> 20
19
foregoing, this Guarantee Agreement will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder must repay any sums
paid with respect to Trust Securities or this Guarantee Agreement.
ARTICLE VIII
Miscellaneous
SECTION 8.01. 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 Trust Securities then outstanding. Except in
connection with a consolidation, merger or sale involving the Guarantor that is
permitted under Article VIII of the Indenture and pursuant to which the assignee
agrees in writing to perform the Guarantor's obligations hereunder, the
Guarantor shall not assign its obligations hereunder.
SECTION 8.02. Amendments. Except with respect to any changes which
do not adversely affect the rights of the Holders in any material respect (in
which case no consent of the Holders will be required), this Guarantee Agreement
may only be amended with the prior approval of the Holders of not less than a
Majority in Liquidation Amount of all the outstanding Trust Securities. The
provisions of Article VI of the Declaration of Trust concerning meetings of the
Holders shall apply to the giving of such approval.
SECTION 8.03. Notices. Any notice, request or other communication
required or permitted to be given hereunder shall be in writing, duly signed by
the party giving such notice, and delivered, telecopied (confirmed by delivery
of the original) or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or
such other address, facsimile number or
<PAGE> 21
20
to the attention of such other Person as the Guarantor may give notice to
the Holders:
BANCORP HAWAII, INC.
130 Merchant Street
Honolulu, Hawaii 96813
Facsimile No.: (808) 538-4007
Attention: Office of the Secretary
(b) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such
other address as the Guarantee Trustee on behalf of the Issuer may give
notice to the Holders:
BANCORP HAWAII CAPITAL TRUST I
c/0 Bancorp Hawaii, Inc.
130 Merchant Street,
Honolulu, Hawaii 96813
Facsimile No.: (808) 538-4007
Attention: Office of the Secretary
with a copy to:
The Bank of New York
101 Barclay Street
21st Floor West
New York, NY 10286
Facsimile No.: (212) 815-5915
Attention: Corporate Trust Trustee
Administration
(c) if given to the Guarantee Trustee:
The Bank of New York
101 Barclay Street
21st Floor West
New York, NY 10286
Facsimile No.: (212) 815-5915
Attention: Corporate Trust Trustee
Administration
(d) if given to any Holder, at the address set
forth on the books and records of the Issuer.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid,
<PAGE> 22
21
except that if a notice or other document is refused delivery or cannot be
delivered because of a changed address of which no notice was given, such notice
or other document shall be deemed to have been delivered on the date of such
refusal or inability to deliver.
SECTION 8.04. Benefit. This Guarantee Agreement is solely for the
benefit of the Holders and is not separately transferable from the Trust
Securities.
SECTION 8.05. Interpretation. In this Guarantee Agreement, unless
the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to
them in Section 1.01;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or
amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa;
and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.06 Governing Law. THIS GUARANTEE AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
<PAGE> 23
22
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
BANCORP HAWAII, INC.,
by
----------------------------
Name:
Title:
THE BANK OF NEW YORK, as
Guarantee Trustee,
by
----------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 5.1
[DUANE, MORRIS & HECKSCHER LETTERHEAD]
April 7, 1997
Bancorp Hawaii, Inc.
130 Merchant Street
Honolulu, Hawaii 96813
Ladies and Gentlemen:
We have acted as special securities counsel to Bancorp Hawaii, Inc., an
Hawaii corporation ("Bancorp"), in connection with the proposed issuance by
Bancorp of $103,093,000 principal amount of 8.25% Junior Subordinated Debt
Securities ("Exchange Junior Subordinated Debt Securities") in exchange for a
like aggregate principal amount of its 8.25% Junior Subordinated Debt Securities
(the "Old Junior Subordinated Debt Securities") and the proposed exchange by
Bancorp of its guarantee of the payment of Distributions and payments on
liquidation or redemption of the Old Capital Securities (the "Old Guarantee") of
Bancorp Hawaii Capital Trust I (the "Trust") for a like guarantee of the Old
Capital Securities and the Exchange Capital Securities (the "Exchange
Guarantee") (the two exchanges cited above being collectively referred to herein
as the "Exchange"). The Exchange is to be effected after effectiveness of a
registration statement on Form S-4 (the "Registration Statement") filed by
Bancorp and the Trust with the Securities and Exchange Commission pursuant to
the Securities Act of 1933, as amended. Capitalized terms not defined herein
have the meaning given to them in the Registration Statement.
As special securities counsel, we have been involved in the preparation
of the Registration Statement relating to the Exchange and the exchange of
Exchange Capital Securities of the Trust for Old Capital Securities and have
reviewed and are familiar with the Junior Subordinated Indenture between
Bancorp and The Bank of New York, as Debenture Trustee, dated December 30,
1996, the Amended and Restated Declaration of Trust among Bancorp, The Bank of
New York as Property Trustee, The Bank of New York (Delaware) as Delaware
Trustee, and the Administrative Trustees named therein, dated December 30,
1996, the Guarantee Agreement originally executed by Bancorp and The Bank of
New York, as Guarantee Trustee, on December 30, 1996, the form of Guarantee
Agreement to be entered into by Bancorp and The Bank of New York, as Guarantee
Trustee, and the Registration Agreement, dated December 30, 1996 among Bancorp,
Bancorp Hawaii Capital Trust I, UBS Securities LLC, Credit Suisse First
<PAGE> 2
Bancorp Hawaii, Inc.
April 7, 1997
Page 2
Boston Corporation, and Salomon Brothers Inc. Additionally, we have examined
the charter and bylaws of Bancorp and resolutions of the Bancorp Board of
Directors and determinations of the pricing committee of Bancorp's Board of
Directors. Furthermore, we have examined all such corporate records and other
documents relating to each of the foregoing entities and such certificates of
public officials, officers of Bancorp, and other persons and have satisfied
ourselves as to such other matters as we have deemed necessary and relevant in
order to render this opinion. Moreover, we have had oral conferences with such
officers of Bancorp as we have deemed necessary and relevant with respect to
material factual matters which have not been independently established by us.
We have not, except as specifically mentioned above, made any
independent review or investigation of the organization, existence, good
standing, assets, business or affairs of Bancorp or the Trust, or of any other
matters.
We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of natural
persons, and the conformity to the originals of all documents submitted to us as
copies. In making our examination of any documents, we have assumed that all
parties had the corporate power and authority to enter into and perform all
obligations thereunder and, as to such parties we have also assumed the
execution and delivery of such documents and the validity and binding effect and
enforceability thereof. We have also assumed that the various agreements
referred to above have not been otherwise amended by oral or written agreement
or by conduct of the parties thereto. We have assumed that the certifications
and representations dated earlier than the date hereof on which we have
expressed reliance herein continue to remain accurate, insofar as material to
our opinions, from such earlier date through the date hereof.
We have not been asked to express any opinion with respect to the power
and authority of any party to enter into, execute, deliver or perform any of
the agreements to which they are a party or to effect the transactions
contemplated thereby, or with respect to the application to any of their
authority to do so of any law or regulation, and, for purposes of this opinion,
we assume that each of the parties has all requisite power and authority under
all applicable laws, regulations and governing documents, that each of the
parties has taken all necessary corporate action to enter into, execute,
deliver and perform each of the agreements to which it is a party and to effect
such transactions, and that each of the agreements has been duly executed and
delivered by each of the parties that is a party thereto and constitutes the
valid and binding obligation of the parties that are party thereto,
enforceable in accordance with their terms.
Based upon the foregoing and having regard for such legal
considerations as we deem relevant, we are of the opinion that:
<PAGE> 3
Bancorp Hawaii, Inc.
April 7, 1997
Page 3
(1) The Exchange Junior Subordinated Debt Securities have been duly
and validly authorized and, when executed and authenticated in accordance with
the provisions of the Indenture and when issued in exchange for the Old Junior
Subordinated Debt Securities, will constitute legal, valid and binding
obligations of Bancorp entitled to the benefits of the Indenture and
enforceable in accordance with their terms.
(2) The Exchange Guarantee has been duly authorized and executed,
and when delivered and issued in exchange for the Old Guarantee, will
constitute a legal, valid and binding instrument enforceable against Bancorp in
accordance with its terms.
We hereby consent to the filing of our opinion as an exhibit to the
Registration Statement and to the naming of our firm under "Validity of
Securities" in the prospectus portion of the Registration Statement.
Very truly yours,
/s/ DUANE, MORRIS & HECKSCHER
<PAGE> 1
Exhibit 5.2
(POTTER ANDERSON & CARROON LETTERHEAD)
April 9, 1997
Bancorp Hawaii, Inc.
130 Merchant Street
Honolulu, HI 96813
RE: BANCORP HAWAII CAPITAL TRUST I 8.25% CAPITAL
SECURITIES, SERIES A
--------------------------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Bancorp Hawaii Capital
Trust I, a Delaware statutory business trust (the "Trust") in connection with
the matters set forth herein and that certain Amended and Restated Trust
Agreement (the "Trust Agreement") dated as of December 30, 1996 by and among
Bancorp Hawaii, Inc., as Depositor, The Bank of New York (Delaware), as
Delaware Trustee, The Bank of New York, as Property Trustee, and the
Administrative Trustees named therein. Initially capitalized terms used herein
and not otherwise defined are used herein as defined in the Trust Agreement.
For purposes of giving the opinions hereinafter set forth, we have
examined only the following documents and have conducted no independent
factual investigations of our own:
1. The Certificate of Trust for the Trust, dated as of December
23, 1996 (the "Certificate"), as filed in the Office of the Secretary of State
of the State of Delaware (the "Secretary of State") on December 23, 1996;
2. The original trust agreement of the Trust, dated as of December
23, 1996, by and among the Bancorp Hawaii, Inc., as Depositor, The Bank of New
York (Delaware), as Delaware
<PAGE> 2
Bancorp Hawaii, Inc.
April 9, 1997
Page 2
Trustee and the Administrative Trustees named therein (the "Original Trust
Agreement");
3. The Trust Agreement;
4. A Certificate of Good Standing for the Trust, dated April 9,
1997, obtained from the Secretary of State; and
5. The Registration Statement on Form S-4 (the "Registration
Statement"), including a prospectus with respect to the Trust (the
"Prospectus"), relating to, among other things, an Exchange Offer (the
"Exchange Offer") involving the issuance by the Trust of the 8.25% Capital
Securities, Series A of the Trust representing preferred, undivided beneficial
interests in the assets of the Trust (each, a "New Capital Security" and
collectively, the "New Capital Securities") to be offered in exchange for the
presently outstanding 8.25% Capital Securities, Series A of the Trust (the "Old
Capital Securities"), filed by the Depositor and the Trust with the Securities
and Exchange Commission.
As to certain facts material to the opinions expressed herein, we have
relied upon the representations and warranties contained in the documents
examined by us all of which we have assumed to be true, complete and accurate
in all material respects. The documents referred to in paragraphs 1, 2, 3 and 5
above are hereinafter collectively referred to as the "Agreements."
Based upon the foregoing, and upon an examination of such questions of
law of the State of Delaware as we have considered necessary or appropriate,
and subject to the assumptions, qualifications, limitations and exceptions set
forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Business Trust Act.
2. The New Capital Securities, upon issuance pursuant to the
Exchange Offer, will represent valid, and, subject to the qualifications set
forth in number 3 below, fully paid and non-assessable undivided beneficial
interests in the assets of the Trust.
<PAGE> 3
Bancorp Hawaii, Inc.
April 9, 1997
Page 3
3. The Holders of New Capital Securities, as beneficial owners of
New Capital Securities of the Trust, will be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware, except
that the Holders of New Capital Securities may be obligated to (a) provide
indemnity and/or security in connection with and pay taxes or governmental
charges arising from transfers or exchanges of Trust Securities Certificates and
the issuance of replacement Trust Securities Certificates, and (b) provide
security or indemnity in connection with requests of or directions to the
Property Trustee to exercise its rights and powers under the Trust Agreement.
All of the foregoing opinions contained herein are subject to the
following assumptions, qualifications, limitations and exceptions.
a. The foregoing opinions are limited to the laws of the
State of Delaware presently in effect, excluding the securities laws thereof.
We have not considered and express no opinion on the laws of any other
jurisdiction, including, without limitation, federal laws and rules and
regulations relating thereto.
b. We have assumed the due execution and delivery by each
party listed as a party to each document examined by us. We have assumed
further the due authorization by each party thereto (exclusive of the Trust) of
each document examined by us, and that each of such parties (exclusive of the
Trust) has the full corporate, or trust or banking, power, authority, and legal
right to execute, deliver and perform each such document. We also have assumed
that each of the parties to each of the Agreements (exclusive of the Trust and
the Administrative Trustees) is a corporation, bank, national banking
association or trust company, validly existing and in good standing under the
laws of their respective jurisdictions of organization and that the Agreements
to which they are a party do not result in the breach of the terms of, and do
not contravene their respective constituent documents, any contractual
restriction binding on them or any law, rule or regulation applicable to them.
In addition, we have assumed the legal capacity of any natural persons who are
parties to any of the documents examined by us.
<PAGE> 4
Bancorp Hawaii, Inc.
April 9, 1997
Page 4
c. We have assumed that all signatures on documents examined
by us are genuine, that all documents submitted to us as originals are
authentic and that all documents submitted to us as copies conform with the
originals.
d. We have assumed that the Original Trust Agreement and the
Trust Agreement collectively, constitute the entire agreement among each of the
respective parties thereto with respect to the subject matter thereof,
including with respect to the creation, operation, dissolution and winding up
of the Trust and that the Trust Agreement and the Certificate are in full force
and effect.
e. We have assumed that no event set forth in Article 9 of the
Trust Agreement has occurred.
f. We have assumed that the New Capital Securities will be
issued and exchanged in accordance with the Trust Agreement and the Prospectus.
We have further assumed the receipt of each Person to whom a New Capital
Security is to be issued by the Trust of a Certificate for such New Capital
Security and the exchange by it of an equivalent liquidation amount of Old
Capital Securities in accordance with the Trust Agreement and the Prospectus.
g. We note that we have not participated in the preparation,
and do not assume responsibility for the contents, of the Registration
Statement or the Prospectus.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition,
we hereby consent to the use of our name under the heading "Validity of
Securities" in the Prospectus. In giving the foregoing consents, we do not
thereby admit that we come within the category of Persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the
rules and regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ POTTER ANDERSON & CORROON
<PAGE> 1
Exhibit 25.1
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
BANCORP HAWAII, INC.
(Exact name of obligor as specified in its charter)
Hawaii 99-0148992
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
130 Merchant Street
Honolulu, Hawaii 96813
(Address of principal executive offices) (Zip code)
----------------------
8.25% Junior Subordinated Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE> 2
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE
24 OF THE COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
-2-
<PAGE> 3
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
-3-
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 2nd day of April, 1997.
THE BANK OF NEW YORK
By: /s/ MARY LAGUMINA
--------------------------------
Name: MARY LAGUMINA
Title: ASSISTANT VICE PRESIDENT
-4-
<PAGE> 5
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ............................. $ 4,404,522
Interest-bearing balances ....................... 732,833
Securities:
Held-to-maturity securities ..................... 789,964
Available-for-sale securities ................... 2,005,509
Federal funds sold in domestic offices of the bank:
Federal funds sold ................................ 3,364,838
Loans and lease financing receivables:
Loans and leases, net of unearned
income ........................................ 28,728,602
LESS: Allowance for loan and
lease losses .................................. 584,525
LESS: Allocated transfer risk reserve ........... 429
Loans and leases, net of unearned
income, allowance, and reserve .............. 28,143,648
Assets held in trading accounts ................... 1,004,242
Premises and fixed assets (including
capitalized leases) ............................. 605,668
Other real estate owned ........................... 41,238
Investments in unconsolidated subsidiaries and
associated companies ............................ 205,031
Customers' liability to this bank on
acceptances outstanding ......................... 949,154
Intangible assets ................................. 490,524
Other assets ...................................... 1,305,839
------------
Total assets ...................................... $ 44,043,010
============
LIABILITIES
Deposits:
In domestic offices ............................. $ 20,441,318
Noninterest-bearing ............................. 8,158,472
Interest-bearing ................................ 12,282,846
In foreign offices, Edge and Agreement
subsidiaries, and IBFs ........................ 11,710,903
Noninterest-bearing ............................. 46,182
Interest-bearing ................................ 11,664,721
Federal funds purchased in domestic offices
of the bank:
Federal funds purchased ......................... 1,565,288
Demand notes issued to the U.S. Treasury .......... 293,186
Trading liabilities ............................... 826,856
Other borrowed money:
With original maturity of one year or less ...... 2,103,443
With original maturity of more than one year .... 20,766
Bank's liability on acceptances executed
and outstanding ................................. 951,116
Subordinated notes and debentures ................. 1,020,400
Other liabilities ................................. 1,522,884
------------
Total liabilities ................................. 40,456,160
------------
EQUITY CAPITAL
Common stock ...................................... 942,284
Surplus ........................................... 525,666
Undivided profits and capital reserves ............ 2,129,376
Net unrealized holding gains (losses) on
available-for-sale securities ................... (2,073)
Cumulative foreign currency translation
adjustments ..................................... (8,403)
------------
Total equity capital .............................. 3,586,850
------------
Total liabilities and equity capital .............. $ 44,043,010
============
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
<PAGE> 1
Exhibit 25.2
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
BANCORP HAWAII CAPITAL TRUST I
(Exact name of obligor as specified in its charter)
Delaware Applied For
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
130 Merchant Street
Honolulu, Hawaii 96813
(Address of principal executive offices) (Zip code)
----------------------
8.25% Capital Securities, Series A
(Title of the indenture securities)
================================================================================
<PAGE> 2
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE
24 OF THE COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
-2-
<PAGE> 3
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
-3-
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 2nd day of April, 1997.
THE BANK OF NEW YORK
By: /s/ MARY LAGUMINA
-------------------------------
Name: MARY LAGUMINA
Title: ASSISTANT VICE PRESIDENT
-4-
<PAGE> 5
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September
30, 1996, published in accordance with a call made by the Federal Reserve Bank
of this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ............................. $ 4,404,522
Interest-bearing balances ....................... 732,833
Securities:
Held-to-maturity securities ..................... 789,964
Available-for-sale securities ................... 2,005,509
Federal funds sold in domestic offices of the bank:
Federal funds sold ................................ 3,364,838
Loans and lease financing receivables:
Loans and leases, net of unearned
income ........................................ 28,728,602
LESS: Allowance for loan and
lease losses .................................. 584,525
LESS: Allocated transfer risk reserve ........... 429
Loans and leases, net of unearned
income, allowance, and reserve .............. 28,143,648
Assets held in trading accounts ................... 1,004,242
Premises and fixed assets (including
capitalized leases) ............................. 605,668
Other real estate owned ........................... 41,238
Investments in unconsolidated subsidiaries
and associated companies ........................ 205,031
Customers' liability to this bank on
acceptances outstanding ......................... 949,154
Intangible assets ................................. 490,524
Other assets ...................................... 1,305,839
------------
Total assets ...................................... $ 44,043,010
============
LIABILITIES
Deposits:
In domestic offices ............................. $ 20,441,318
Noninterest-bearing ............................. 8,158,472
Interest-bearing ................................ 12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs .............. 11,710,903
Noninterest-bearing ............................. 46,182
Interest-bearing ................................ 11,664,721
Federal funds purchased in domestic offices
of the bank:
Federal funds purchased ......................... 1,565,288
Demand notes issued to the U.S. Treasury .......... 293,186
Trading liabilities ............................... 826,856
Other borrowed money:
With original maturity of one year
or less ....................................... 2,103,443
With original maturity of more than
one year ...................................... 20,766
Bank's liability on acceptances executed
and outstanding ................................. 951,116
Subordinated notes and debentures ................. 1,020,400
Other liabilities ................................. 1,522,884
------------
Total liabilities ................................. 40,456,160
------------
EQUITY CAPITAL
Common stock ...................................... 942,284
Surplus ........................................... 525,666
Undivided profits and capital reserves ............ 2,129,376
Net unrealized holding gains (losses) on
available-for-sale securities ................... (2,073)
Cumulative foreign currency
translation adjustments ......................... (8,403)
------------
Total equity capital .............................. 3,586,850
------------
Total liabilities and equity
capital ......................................... $ 44,043,010
============
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
<PAGE> 1
Exhibit 25.3
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO
RULE 901(d) OF REGULATION S-T
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [ ]
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
BANCORP HAWAII, INC.
(Exact name of obligor as specified in its charter)
Hawaii 99-0148992
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
130 Merchant Street
Honolulu, Hawaii 96813
(Address of principal executive offices) (Zip code)
Guarantee of Capital Securities of
Bancorp Hawaii Capital Trust I
(Title of the indenture securities)
<PAGE> 2
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
<TABLE>
<CAPTION>
Name Address
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE
COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York (formerly
Irving Trust Company) as now in effect, which contains the authority to
commence business and a grant of powers to exercise corporate trust
powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with
Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed
with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE> 3
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 2nd day of April, 1997.
THE BANK OF NEW YORK
By: /s/ MARY LAGUMINA
---------------------------------
Name: MARY LAGUMINA
Title: ASSISTANT VICE PRESIDENT
-4-
<PAGE> 5
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ............................. $ 4,404,522
Interest-bearing balances ....................... 732,833
Securities:
Held-to-maturity securities ..................... 789,964
Available-for-sale securities ................... 2,005,509
Federal funds sold in domestic offices of the bank:
Federal funds sold ................................ 3,364,838
Loans and lease financing receivables:
Loans and leases, net of unearned income ........ 28,728,602
LESS: Allowance for loan and lease losses ....... 584,525
LESS: Allocated transfer risk reserve ........... 429
Loans and leases, net of unearned income,
allowance, and reserve ...................... 28,143,648
Assets held in trading accounts ................... 1,004,242
Premises and fixed assets (including
capitalized leases) ............................. 605,668
Other real estate owned ........................... 41,238
Investments in unconsolidated subsidiaries
and associated companies ........................ 205,031
Customers' liability to this bank on
acceptances outstanding ......................... 949,154
Intangible assets ................................. 490,524
Other assets ...................................... 1,305,839
------------
Total assets ...................................... $ 44,043,010
============
LIABILITIES
Deposits:
In domestic offices ............................. $ 20,441,318
Noninterest-bearing ............................. 8,158,472
Interest-bearing ................................ 12,282,846
In foreign offices, Edge and Agreement
subsidiaries, and IBFs ........................ 11,710,903
Noninterest-bearing ............................. 46,182
Interest-bearing ................................ 11,664,721
Federal funds purchased in domestic offices
of the bank:
Federal funds purchased ......................... 1,565,288
Demand notes issued to the U.S. Treasury .......... 293,186
Trading liabilities ............................... 826,856
Other borrowed money:
With original maturity of one year or less ...... 2,103,443
With original maturity of more than one year .... 20,766
Bank's liability on acceptances executed
and outstanding ................................. 951,116
Subordinated notes and debentures ................. 1,020,400
Other liabilities ................................. 1,522,884
------------
Total liabilities ................................. 40,456,160
------------
EQUITY CAPITAL
Common stock ...................................... 942,284
Surplus ........................................... 525,666
Undivided profits and capital reserves ............ 2,129,376
Net unrealized holding gains (losses) on
available-for-sale securities ................... (2,073)
Cumulative foreign currency translation
adjustments ..................................... (8,403)
------------
Total equity capital .............................. 3,586,850
------------
Total liabilities and equity capital .............. $ 44,043,010
============
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
<PAGE> 1
EXHIBIT 99.1
LETTER OF TRANSMITTAL
Offer For Any and All Outstanding
8.25% Capital Securities
(Liquidation Amount $1,000 per Capital Security)
in Exchange for
8.25% Capital Securities
(Liquidation Amount $1,000 per Capital Security)
Which Have Been Registered Under The Securities Act Of 1933
Pursuant to the Prospectus dated April _, 1997
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON APRIL _, 1997, UNLESS THE OFFER IS EXTENDED. TENDERS MAY BE WITHDRAWN
PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
The Exchange Agent For The Exchange Offer Is:
The Bank Of New York
<TABLE>
<S> <C> <C>
By Hand Or Overnight Delivery: Facsimile Transmissions: By Registered or Certified Mail:
(Eligible Institutions Only)
The Bank of New York (212) 571-3080 The Bank of New York
101 Barclay Street 101 Barclay Street, 7E
Corporate Trust Services Window To Confirm By Telephone New York, New York 10286
Ground Level or for Information Call: Attention: Reorganization Section,
New York, New York 10286 Jodi Mancato
Attention: Reorganization Section, (212) 815-2791
Jodi Mancato
</TABLE>
Delivery of this letter of transmittal to an address other than as set
forth above or transmission of this letter of transmittal via facsimile to a
number other than as set forth above does not constitute a valid delivery.
The undersigned acknowledges that he or she has received the
Prospectus, dated April _, 1997 (the "Prospectus"), of Bancorp Hawaii, Inc., a
Hawaii corporation ("BHI"), and Bancorp Hawaii Capital Trust I, a Delaware
business trust (the "Trust"), and this Letter of Transmittal, which together
constitute BHI's and the Trust's offer (the "Exchange Offer") to exchange an
aggregate Liquidation Amount of up to $100,000,000 8.25% Capital Securities due
December 15, 2026, which have been registered under the Securities Act of 1933,
as amended (the "Securities Act") (the "Exchange Capital Securities") of the
Trust for a like Liquidation Amount of the issued and outstanding 8.25% Capital
Securities due December 15, 2026 (the "Capital Securities") of the Trust from
the holders thereof.
<PAGE> 2
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
Capitalized terms used but not defined herein shall have the same
meaning given them in the Prospectus (as defined below).
This Letter of Transmittal is to be completed by holders of Old Capital
Securities (as defined below) either if Old Capital Securities are to be
forwarded herewith or if tenders of Old Capital Securities are to be made by
book-entry transfer to an account maintained by The Bank of New York (the
"Exchange Agent") at The Depository Trust Company (the "Book-Entry Transfer
Facility" or "DTC") pursuant to the procedures set forth in "The Exchange
Offer--Procedures for Tendering Old Capital Securities" in the Prospectus.
Holders of Old Capital Securities whose certificates (the
"Certificates") for such Old Capital Securities are not immediately available or
who cannot deliver their Certificates and all other required documents to the
Exchange Agent on or prior to the Expiration Date (as defined in the Prospectus)
or who cannot complete the procedures for book-entry transfer on a timely basis,
must tender their Old Capital Securities according to the guaranteed delivery
procedures set forth in "The Exchange Offer--Procedures for Tendering Old
Capital Securities" in the Prospectus.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
The undersigned has completed the appropriate boxes below and signed
this Letter of Transmittal to indicate the action the undersigned desires to
take with respect to the Exchange Offer.
- 2 -
<PAGE> 3
<TABLE>
<CAPTION>
DESCRIPTION OF OLD CAPITAL SECURITIES 1 2 3
<S> <C> <C> <C>
Aggregate
Liquidation Liquidation
Amount of Amount of
Name(s) and Address(es) of Registered Holder(s): Certificate Old Capital Old Capital
(Please fill in, if blank) Number(s)* Securities Securities
Tendered**
Total
</TABLE>
* Need not be completed if Old Capital Securities are being tendered by
book-entry holders.
** Old Capital Securities may be tendered in whole or in part in
denominations of $100,000 and integral multiples of $1,000 in excess
thereof, provided that if any Old Capital Securities are tendered for
exchange in part, the untendered principal amount must be $100,000 or any
integral multiple of $1,000 in excess thereof. See instruction 4. Unless
otherwise indicated in the column, a holder will be deemed to have
tendered all Old Capital Securities represented by the Old Capital
Securities indicated in Column 2. See Instruction 4.
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
[ ] CHECK HERE IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE
AGENT WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution ________________________________________
Account Number _______________________________________________________
Transaction Code Number ______________________________________________
- 3 -
<PAGE> 4
[ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY
IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND
COMPLETE THE FOLLOWING:
Name of Registered Holder(s) _________________________________________
Window Ticket Number (if any) ________________________________________
Date of Execution of Notice of Guaranteed Delivery ___________________
Name of Institution which Guaranteed Delivery ________________________
If Guaranteed Delivery is to be made By Book-Entry Transfer:
Name of Tendering Institution ________________________________________
Account Number _______________________________________________________
Transaction Code Number ______________________________________________
[ ] CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NONEXCHANGED OLD
CAPITAL SECURITIES ARE TO BE RETURNED BY CREDITING THE BOOK-ENTRY
TRANSFER FACILITY ACCOUNT NUMBER SET FORTH ABOVE.
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD CAPITAL
SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER
TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO
RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name: _________________________________________________________________________
Address: ______________________________________________________________________
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Trust and BHI, the above described aggregate
Liquidation Amount of the Trust's 8.25% Capital Securities due December 15, 2026
(the "Old Capital Securities") in exchange for a like aggregate Liquidation
Amount of the Trust's 8.25% Capital Securities due December 15, 2026
- 4 -
<PAGE> 5
(the "Exchange Capital Securities") which have been registered under the
Securities Act upon the terms and subject to the conditions set forth in the
Prospectus dated April _, 1997 (as the same may be amended or supplemented from
time to time, the "Prospectus"), receipt of which is acknowledged, and in this
Letter of Transmittal (which, together with the Prospectus, constitute the
"Exchange Offer").
Subject to and effective upon the acceptance for exchange of all or any
portion of the Old Capital Securities tendered herewith in accordance with the
terms and conditions of the Exchange Offer (including, if the Exchange Offer is
extended or amended, the terms and conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to or upon the
order of the Trust all right, title and interest in and to such Old Capital
Securities as are being tendered herewith. The undersigned hereby irrevocably
constitutes and appoints the Exchange Agent as its agent and attorney-in-fact
(with full knowledge that the Exchange Agent is also acting as agent of BHI and
the Trust in connection with the Exchange Offer) with respect to the tendered
Old Capital Securities, with full power of substitution (such power of attorney
being deemed to be an irrevocable power coupled with an interest) subject only
to the right of withdrawal described in the Prospectus, to (i) deliver
Certificates for Old Capital Securities to BHI or the Trust together with all
accompanying evidences of transfer and authenticity to, or upon the order of,
the Trust, upon receipt by the Exchange Agent, as the undersigned's agent, of
the Exchange Capital Securities to be issued in exchange for such Old Capital
Securities, (ii) present Certificates for such Old Capital Securities for
transfer, and to transfer the Old Capital Securities on the books of the Trust,
and (iii) receive for the account of the Trust all benefits and otherwise
exercise all rights of beneficial ownership of such Old Capital Securities, all
in accordance with the terms and conditions of the Exchange Offer.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS
FULL POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE OLD
CAPITAL SECURITIES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR
EXCHANGE, THE TRUST WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE
THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES,
AND THAT THE OLD CAPITAL SECURITIES TENDERED HEREBY ARE NOT SUBJECT TO ANY
ADVERSE CLAIMS OR PROXIES. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND
DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY BHI, THE TRUST OR THE EXCHANGE AGENT
TO BE NECESSARY OR DESIRABLE TO COMPLETE THE EXCHANGE, ASSIGNMENT AND TRANSFER
OF THE OLD CAPITAL SECURITIES TENDERED HEREBY, AND THE UNDERSIGNED WILL COMPLY
WITH ITS OBLIGATIONS UNDER THE REGISTRATION RIGHTS AGREEMENT. THE UNDERSIGNED
HAS READ AND AGREES TO ALL OF THE TERMS OF THE EXCHANGE OFFER.
The name(s) and address(es) of the registered holder(s) of the Old
Capital Securities tendered hereby should be printed above, if they are not
already set forth above, as they appear on the Certificates representing such
Old Capital Securities. The Certificate number(s) and the Old Capital Securities
that the undersigned wishes to tender should be indicated in the appropriate
boxes above.
- 5 -
<PAGE> 6
If any tendered Old Capital Securities are not exchanged pursuant to
the Exchange Offer for any reason, or if Certificates are submitted for more Old
Capital Securities than are tendered or accepted for exchange, Certificates for
such nonexchanged or nontendered Old Capital Securities will be returned (or, in
the case of Old Capital Securities tendered by book-entry transfer, such Old
Capital Securities will be credited to an account maintained at DTC), without
expense to the tendering holder, promptly following the expiration or
termination of the Exchange Offer.
The undersigned understands that tenders of Old Capital Securities
pursuant to any one of the procedures described in "The Exchange
Offer--Procedures for Tendering Old Capital Securities" in the Prospectus and in
the instruction, attached hereto will, upon BHI's and the Trust's acceptance for
exchange of such tendered Old Capital Securities, constitute a binding agreement
between the undersigned, BHI and the Trust upon the terms and subject to the
conditions of the Exchange Offer. The undersigned recognizes that, under certain
circumstances set forth in the Prospectus, BHI and the Trust may not be required
to accept for exchange any of the Old Capital Securities tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby directs that the Exchange Capital
Securities be issued in the name(s) of the undersigned or, in the case of a
book-entry transfer of Old Capital Securities, that such Exchange Capital
Securities be credited to the account indicated above maintained at DTC. If
applicable, substitute Certificates representing Old Capital Securities not
exchanged or not accepted for exchange will be issued to the undersigned or, in
the case of a book-entry transfer of Old Capital Securities, will be credited to
the account indicated above maintained at DTC. Similarly, unless otherwise
indicated under "Special Delivery Instructions," please deliver Exchange Capital
Securities to the undersigned at the address shown below the undersigned's
signature.
BY TENDERING OLD CAPITAL SECURITIES AND EXECUTING THIS LETTER OF
TRANSMITTAL, THE UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT (I) THE
UNDERSIGNED IS NOT AN "AFFILIATE" OF BHI OR THE TRUST, (II) ANY EXCHANGE CAPITAL
SECURITIES TO BE RECEIVED BY THE UNDERSIGNED ARE BEING ACQUIRED IN THE ORDINARY
COURSE OF ITS BUSINESS, (III) THE UNDERSIGNED HAS NO ARRANGEMENT OR
UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN A DISTRIBUTION (WITHIN THE
MEANING OF THE SECURITIES ACT) OF EXCHANGE CAPITAL SECURITIES TO BE RECEIVED IN
THE EXCHANGE OFFER, AND (IV) IF THE UNDERSIGNED IS NOT A BROKER-DEALER, THE
UNDERSIGNED IS NOT ENGAGED IN, AND DOES NOT INTEND TO ENGAGE IN, A DISTRIBUTION
(WITHIN THE MEANING OF THE SECURITIES ACT) OF SUCH EXCHANGE CAPITAL SECURITIES.
BY TENDERING OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER AND EXECUTING
THIS LETTER OF TRANSMITTAL, A HOLDER OF OLD CAPITAL SECURITIES WHICH IS A
BROKER-DEALER REPRESENTS AND AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE
LETTERS ISSUED BY THE STAFF OF THE DIVISION OF CORPORATION FINANCE OF THE
SECURITIES AND EXCHANGE COMMISSION TO THIRD PARTIES, THAT (A) SUCH OLD CAPITAL
SECURITIES HELD BY THE BROKER-DEALER ARE HELD ONLY AS A NOMINEE, OR (B) SUCH OLD
CAPITAL SECURITIES WERE ACQUIRED BY
- 6 -
<PAGE> 7
SUCH BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES
OR OTHER TRADING ACTIVITIES AND IT WILL DELIVER THE PROSPECTUS (AS AMENDED OR
SUPPLEMENTED FROM TIME TO TIME) MEETING THE REQUIREMENTS OF THE SECURITIES ACT
IN CONNECTION WITH ANY RESALE OF SUCH EXCHANGE CAPITAL SECURITIES (PROVIDED
THAT, BY SO ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, SUCH BROKER-DEALER
WILL NOT BE DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER" WITHIN THE MEANING OF
THE SECURITIES ACT).
BHI AND THE TRUST HAVE AGREED THAT, SUBJECT TO THE PROVISIONS OF THE
REGISTRATION RIGHTS AGREEMENT, THE PROSPECTUS, AS IT MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME, MAY BE USED BY A PARTICIPATING BROKER-DEALER (AS
DEFINED BELOW) IN CONNECTION WITH RESALES OF EXCHANGE CAPITAL SECURITIES
RECEIVED IN EXCHANGE FOR OLD CAPITAL SECURITIES, WHERE SUCH OLD CAPITAL
SECURITIES WERE ACQUIRED BY SUCH PARTICIPATING BROKER-DEALER FOR ITS OWN ACCOUNT
AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES, FOR A
PERIOD ENDING 180 DAYS AFTER THE EXPIRATION DATE (SUBJECT TO EXTENSION UNDER
CERTAIN LIMITED CIRCUMSTANCES DESCRIBED IN THE PROSPECTUS) OR, IF EARLIER, WHEN
ALL SUCH EXCHANGE CAPITAL SECURITIES HAVE BEEN DISPOSED OF BY SUCH PARTICIPATING
BROKER-DEALER. IN THAT REGARD, EACH BROKER-DEALER WHO ACQUIRED OLD CAPITAL
SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING
ACTIVITIES (A "PARTICIPATING BROKER-DEALER"), BY TENDERING SUCH OLD CAPITAL
SECURITIES AND EXECUTING THIS LETTER OF TRANSMITTAL, AGREES THAT, UPON RECEIPT
OF NOTICE FROM BHI OR THE TRUST OF THE OCCURRENCE OF ANY EVENT OR THE DISCOVERY
OF ANY FACT WHICH MAKES ANY STATEMENT CONTAINED OR INCORPORATED BY REFERENCE IN
THE PROSPECTUS UNTRUE IN ANY MATERIAL RESPECT OR WHICH CAUSES THE PROSPECTUS TO
OMIT TO STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS
CONTAINED OR INCORPORATED BY REFERENCE THEREIN, IN LIGHT OF THE CIRCUMSTANCES
UNDER WHICH THEY WERE MADE, NOT MISLEADING OR OF THE OCCURRENCE OF CERTAIN OTHER
EVENTS SPECIFIED IN THE REGISTRATION RIGHTS AGREEMENT, SUCH PARTICIPATING
BROKER-DEALER WILL SUSPEND THE SALE OF EXCHANGE CAPITAL SECURITIES PURSUANT TO
THE PROSPECTUS UNTIL BHI AND THE TRUST HAVE AMENDED OR SUPPLEMENTED THE
PROSPECTUS TO CORRECT SUCH MISSTATEMENT OR OMISSION AND HAVE FURNISHED COPIES OF
THE AMENDED OR SUPPLEMENTED PROSPECTUS TO THE PARTICIPATING BROKER-DEALER OR BHI
OR THE TRUST HAS GIVEN NOTICE THAT THE SALE OF THE EXCHANGE CAPITAL SECURITIES
MAY BE RESUMED, AS THE CASE MAYBE. IF BHI OR THE TRUST GIVES SUCH NOTICE TO
SUSPEND THE SALE OF THE EXCHANGE CAPITAL SECURITIES, THEY SHALL EXTEND THE
180-DAY PERIOD REFERRED TO ABOVE DURING WHICH PARTICIPATING BROKER-DEALERS ARE
ENTITLED TO USE THE PROSPECTUS IN CONNECTION WITH THE RESALE OF EXCHANGE CAPITAL
SECURITIES BY THE
- 7 -
<PAGE> 8
NUMBER OF DAYS DURING THE PERIOD FROM AND INCLUDING THE DATE OF THE GIVING OF
SUCH NOTICE TO AND INCLUDING THE DATE WHEN PARTICIPATING BROKER-DEALERS SHALL
HAVE RECEIVED COPIES OF THE SUPPLEMENTED OR AMENDED PROSPECTUS NECESSARY TO
PERMIT RESALES OF THE EXCHANGE CAPITAL SECURITIES OR TO AND INCLUDING THE DATE
ON WHICH BHI OR THE TRUST HAS GIVEN NOTICE THAT THE SALE OF EXCHANGE CAPITAL
SECURITIES MAY BE RESUMED, AS THE CASE MAY BE.
Holders of Old Capital Securities whose Old Capital Securities are
accepted for exchange will not receive accrued interest on such Old Capital
Securities for any period from and after the last Distribution Date on such Old
Capital Securities immediately preceding the original issue date of the Exchange
Capital Securities or, if no such Distribution Date has occurred from the
original issue date of the Old Capital Securities, and the undersigned waives
the right to receive any interest on such Old Capital Securities accrued from
and after such Distribution Date or, if no such interest has been paid or duly
provided for, from and after __________________, 1997.
The undersigned will, upon request, execute and deliver any additional
documents deemed by BHI and the Trust to be necessary or desirable to complete
the sale, assignment and transfer of the Old Capital Securities tendered hereby.
All authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned. Except as
stated in the Prospectus, this tender is irrevocable.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD
CAPITAL SECURITIES" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE
TENDERED THE OLD CAPITAL SECURITIES AS SET FORTH IN SUCH BOX.
HOLDER(S) SIGN HERE
(SEE INSTRUCTIONS 2, 5 AND 6)
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON PAGE 7)
(NOTE: SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 2)
Must be signed by registered holder(s) exactly as name(s) appear(s) on
Certificate(s) for the Old Capital Securities hereby tendered or on the register
of holders maintained by the Trust, or by any person(s) authorized to become the
registered holder(s) by endorsements and documents transmitted herewith
(including such opinions of counsel, certifications and other information as may
be required by the Trust or the Trustee for the Old Capital Securities to comply
with the restrictions on transfer applicable to the Old Capital Securities). If
signature is by an attorney-in-
- 8 -
<PAGE> 9
fact, executor, administrator, trustee, guardian, officer of a corporation or
another acting in a fiduciary capacity or representative capacity, please set
forth the signer's full title. See Instruction 5.
________________________________________________________________________________
________________________________________________________________________________
(SIGNATURE(S) OF HOLDER(S))
Date: ____________, 199_
Name(s) ________________________________________________________________________
________________________________________________________________________
(PLEASE PRINT)
Capacity (full title) __________________________________________________________
Address ________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number _________________________________________________
________________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER(S))
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 2 AND 5)
________________________________________________________________________________
(AUTHORIZED SIGNATURE)
Date: ____________, 199_
Name of Firm ___________________________________________________________________
Capacity (full title) _________________________________________________
(PLEASE PRINT)
Address ________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number _________________________________________________
- 9-
<PAGE> 10
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if the Exchange Capital Securities or Old Capital
Securities not tendered are to be issued in the name of someone other than the
registered holder of the Old Capital Securities whose name(s) appear(s) above.
Issue
[ ] Old Capital Securities not tendered to:
[ ] Exchange Capital Securities, to:
Name(s) ________________________________________________________________________
Address ________________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and
Telephone Number _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL
SECURITY NUMBER(S))
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if Exchange Capital Securities or Old Capital Securities
not tendered are to be sent to someone other than the registered holder of the
Old Capital Securities whose name(s) appear(s) above, or such registered
holder(s) at an address other than that shown above.
Mail
[ ] Old Capital Securities not tendered to:
[ ] Exchange Capital Securities, to:
Name(s) ________________________________________________________________________
- 10 -
<PAGE> 11
Address ________________________________________________________________________
________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and
Telephone Number _______________________________________________________________
(TAX IDENTIFICATION OR SOCIAL
SECURITY NUMBER(S))
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED
DELIVERY PROCEDURES. This Letter of Transmittal is to be completed either if (a)
Certificates are to be forwarded herewith or (b) tenders are to be made pursuant
to the procedures for tender by book-entry transfer set forth in "The Exchange
Offer--Procedures for Tendering Old Capital Securities" in the Prospectus.
Certificates, or timely confirmation of a book-entry transfer of such Old
Capital Securities into the Exchange Agent's account at DTC, as well as this
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees, and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
at its address set forth herein on or prior to the Expiration Date. Old Capital
Securities may be tendered in whole or in part in the principal amount of
$100,000 (100 Capital Securities) and integral multiples of $1,000 in excess
thereof, provided that, if any Old Capital Securities are tendered for exchange
in part, the untendered principal amount thereof must be $100,000 (100 Capital
Securities) or any integral multiple of $1,000 in excess thereof.
Holders who wish to tender their Old Capital Securities and (i) whose
Old Capital Securities are not immediately available or (ii) who cannot deliver
their Old Capital Securities, this Letter of Transmittal and all other required
documents to the Exchange Agent on or prior to the Expiration Date or (iii) who
cannot complete the procedures for delivery by book-entry transfer on a timely
basis, may tender their Old Capital Securities by properly completing and duly
executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery
procedures set forth in "The Exchange Offer--Procedures for Tendering Old
Capital Securities" in the Prospectus. Pursuant to such procedures: (i) such
tender must be made by or through an Eligible Institution (as defined below);
(ii) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form made available by BHI, must be received by the
Exchange Agent on or prior to the Expiration Date; and (iii) the Certificates
(or a book-entry confirmation (as defined in the Prospectus)) representing all
tendered Old Capital Securities, in proper form for transfer, together with a
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees and any other documents
required by this Letter of Transmittal, must be received by the Exchange
- 11 -
<PAGE> 12
Agent within five New York Stock Exchange, Inc. trading days after the date of
execution of such Notice of Guaranteed Delivery, all as provided in "The
Exchange Offer--Procedures for Tendering Old Capital Securities" in the
Prospectus.
The Notice of Guaranteed Delivery may be delivered by hand or
transmitted by facsimile or mail to the Exchange Agent, and must include a
guarantee by an Eligible Institution in the form set forth in such Notice. For
Old Capital Securities to be properly tendered pursuant to the guaranteed
delivery procedure, the Exchange Agent must receive a Notice of Guaranteed
Delivery on or prior to the Expiration Date. As used herein and in the
Prospectus, "Eligible Institution" means a firm or other entity identified in
Rule 17Ad-15 under the Exchange Act as "an eligible guarantor institution,"
including (as such terms are defined therein) (i) a bank; (ii) a broker, dealer,
municipal securities broker or dealer or government securities broker or dealer;
(iii) a credit union; (v) a national securities exchange, registered securities
association or clearing agency; or (v) a savings association that is a
participant in a Securities Transfer Association.
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN
ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Neither BHI nor the Trust will accept any alternative, conditional or
contingent tenders. Each tendering holder, by execution of a Letter of
Transmittal (or facsimile thereof), waives any right to receive any notice of
the acceptance of such tender.
2. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required if.
(i) this Letter of Transmittal is signed by the registered holder
(which term, for purposes of this document, shall include any
participant in DTC whose name appears on the register of
holders maintained by the Trust as the owner of the Old
Capital Securities) of Old Capital Securities tendered
herewith, unless such holder(s) has completed either the box
entitled "Special Issuance Instructions" or the box entitled
"Special Delivery Instructions" above, or
(ii) such Old Capital Securities are tendered for the account of a
firm that is an Eligible Institution.
In all other cases, an Eligible Institution must guarantee the
signature(s) on this Letter of Transmittal. See Instruction 5.
- 12 -
<PAGE> 13
3. INADEQUATE SPACE. If the space provided in the box captioned
"Description of Old Capital Securities" is inadequate, the Certificate number(s)
and/or the principal amount of Old Capital Securities and any other required
information should be listed on a separate signed schedule which is attached to
this Letter of Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Old Capital
Securities will be accepted only in the principal amount of $100,000 (100
Capital Securities) and integral multiples of $1,000 in excess thereof, provided
that if any Old Capital Securities are tendered for exchange in part, the
untendered principal amount thereof must be $100,000 (100 Capital Securities) or
any integral multiple of $1,000 in excess thereof. If less than all the Old
Capital Securities evidenced by any Certificate submitted are to be tendered,
fill in the principal amount of Old Capital Securities which are to be tendered
in the box entitled case, new Certificate(s) for the remainder of the Old
Capital Securities that were evidenced by your old Certificate(s) will only be
sent to the holder of the Old Capital Security, promptly after the Expiration
Date. All Old Capital Securities represented by Certificates delivered to the
Exchange Agent will be deemed to have been tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Old Capital Securities
may be withdrawn at any time on or prior to 5:00 p.m., New York City time on the
Expiration Date. In order for a withdrawal to be effective on or prior to that
time, a written, telegraphic, telex or facsimile transmission of such notice of
withdrawal must be timely received by the Exchange Agent at one of its addresses
set forth above or in the Prospectus on or prior to the Expiration Date. Any
such notice of withdrawal must specify the name of the person who tendered the
Old Capital Securities to be withdrawn, the aggregate principal amount of Old
Capital Securities to be withdrawn, and (if Certificates for Old Capital
Securities have been tendered) the name of the registered holder of the Old
Capital Securities as set forth on the Certificate for the Old Capital
Securities, if different from that of the person who tendered such Old Capital
Securities. If Certificates for the Old Capital Securities have been delivered
or otherwise identified to the Exchange Agent, then prior to the physical
release of such Certificates for the Old Capital Securities, the tendering
holder must submit the serial numbers shown on the particular Certificates for
the Old Capital Securities to be withdrawn and the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution, except in the case of
Old Capital Securities tendered for the account of an Eligible Institution. If
Old Capital Securities have been tendered pursuant to the procedures for
book-entry transfer set forth in the Prospectus under "The Exchange
Offer--Procedures for Tendering Old Capital Securities," the notice of
withdrawal must specify the name and number of the account at DTC to be credited
with the withdrawal of Old Capital Securities, in which case a notice of
withdrawal will be effective if delivered to the Exchange Agent by written,
telegraphic, telex or facsimile transmission. Withdrawals of tenders of Old
Capital Securities may not be rescinded. Old Capital Securities properly
withdrawn will not be deemed validly tendered for purposes of the Exchange
Offer, but may be retendered at any subsequent time on or prior to the
Expiration Date by following any of the procedures described in the Prospectus
under "The Exchange Offer--Procedures for Tendering Old Capital Securities."
- 13 -
<PAGE> 14
All questions as to the validity, form and eligibility (including time
of receipt) of such withdrawal notices will be determined by BHI and the Trust,
in their sole discretion, whose determination shall be final and binding on all
parties. None of BHI, the Trust, any affiliates or assigns of BHI and the Trust,
the Exchange Agent or any other person shall be under any duty to give any
notification of any irregularities in any notice of withdrawal or incur any
liability for failure to give any such notification. Any Old Capital Securities
which have been tendered but which are withdrawn will be returned to the holder
thereof without cost to such holder promptly after withdrawal.
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS.
If this Letter of transmittal is signed by the registered holder(s) of the Old
Capital Securities tendered hereby, the signature(s) must correspond exactly
with the name(s) as written on the face of the Certificate(s) without
alteration, enlargement or any change whatsoever.
If any of the Old Capital Securities tendered hereby are owned of
record by two or more joint owners, all such owners must sign this Letter of
Transmittal.
If any tendered Old Capital Securities are registered in different
name(s) on several Certificates, it will be necessary to complete, sign and
submit as many separate Letters of Transmittal (or facsimiles thereof) as there
are different registrations of certificates.
If this Letter of Transmittal or any Certificates or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary, or representative
capacity, such persons should so indicate when signing and must submit proper
evidence satisfactory to BHI and the Trust, in their sole discretion, of each
such person's authority so to act.
When this Letter of Transmittal is signed by the registered owner(s) of
the Old Capital Securities listed and transmitted hereby, no endorsement(s) of
Certificate(s) or separate bond power(s) are required unless Exchange Capital
Securities are to be issued in the name of a person other than the registered
holder(s). Signature(s) on such Certificate(s) or bond power(s) must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Old Capital Securities listed, the Certificates must
be endorsed or accompanied by appropriate bond powers, signed exactly as the
name or names of the registered owner(s) appear(s) on the Certificates, and also
must be accompanied by such opinions of counsel, certifications and other
information as BHI, the Trust or the Trustee for the Old Capital Securities may
require in accordance with the restrictions on transfer applicable to the Old
Capital Securities. Signatures on such Certificates or bond powers must be
guaranteed by an Eligible Institution.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If Exchange Capital
Securities are to be issued in the name of a person other than the signer of
this Letter of Transmittal, or if Exchange Capital Securities are to be sent to
someone other than the signer of this Letter of
- 14 -
<PAGE> 15
Transmittal or to an address other than that shown above, the appropriate boxes
on this Letter of Transmittal should be completed. Certificates for Old Capital
Securities not exchanged will be returned by mail or, if tendered by book-entry
transfer, by crediting the account indicated above maintained at DTC. See
Instruction 4.
7. IRREGULARITIES. BHI and the Trust will determine, in their sole
discretion, all questions as to the form of documents, validity, eligibility
(including time of receipt) and acceptance for exchange of any tender of Old
Capital Securities, which determination shall be final and binding on all
parties. BHI and the Trust reserve the absolute right to reject any and all
tenders determined by either of them not to be in proper form or the acceptance
of which, or exchange for which, may, in the view of counsel to BHI and the
Trust, be unlawful. BHI and the Trust also reserve the absolute right, subject
to applicable law, to waive any of the conditions of the Exchange Offer set
forth in the Prospectus under "The Exchange Offer--Conditions to the Exchange
Offer" or any conditions or irregularity in any tender of Old Capital Securities
of any particular holder whether or not similar conditions or irregularities are
waived in the case of other holders. BHI's and the Trust's interpretation of the
terms and conditions of the Exchange Offer (including this Letter of Transmittal
and the instructions hereto) will be final and binding. No tender of Old Capital
Securities will be deemed to have been validly made until all irregularities
with respect to such tender have been cured or waived. BHI, the Trust, any
affiliates or assigns of BHI, the Trust, the Exchange Agent, or any other person
shall not be under any duty to give notification of any irregularities in
tenders or incur any liability for failure to give such notification.
8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions
and requests for assistance may be directed to the Exchange Agent at its address
and telephone number set forth on the front of this Letter of transmittal.
Additional copies of the Prospectus, the Notice of Guaranteed Delivery and the
Letter of Transmittal may be obtained from the Exchange Agent or from your
broker, dealer, commercial bank, trust company or other nominee.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal
income tax law, a holder whose tendered Old Capital Securities are accepted for
exchange is required to provide the Exchange Agent with such holder's correct
taxpayer identification number ("TIN") on Substitute Form W-9 below. If the
Exchange Agent is not provided with the correct TIN, the Internal Revenue
Service (the "IRS") may subject the holder or other payee to a $50 penalty. In
addition, payments to such holders or other payees with respect to Old Capital
Securities exchanged pursuant to the Exchange Offer may be subject to 31% backup
withholding.
The box in Part 2 of the Substitute Form W-9 may be checked if the
tendering holder has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 2 is checked, the
holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 2 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Exchange Agent. The Exchange Agent will retain such amounts
withheld during the 60 day period following the date of the Substitute Form W-9.
If the holder
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<PAGE> 16
furnishes the Exchange Agent with its TIN within 60 days after the date of the
Substitute Form W-9, the amounts retained during the 60 day period will be
remitted to the holder and no further amounts shall be retained or withheld from
payments made to the holder thereafter. If, however, the holder has not provided
the Exchange Agent with its TIN within such 60 day period, amounts withheld will
be remitted to the IRS as backup withholding. In addition, 31% of all payments
made thereafter will be withheld and remitted to the IRS until a correct TIN is
provided.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the Old Capital Securities or of the last transferee appearing on the transfers
attached to, or endorsed on, the Old Capital Securities. If the Old Capital
Securities are registered in more than one name or are not in the name of the
actual owner, consult the enclosed "Guidelines for Certification of taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" on the face
thereof, to avoid possible erroneous backup withholding. A foreign person may
qualify as an exempt recipient by submitting a properly completed IRS Form W-8,
signed under penalties of perjury, attesting to that holder's exempt status.
Please consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
holders are exempt from backup withholding.
Backup withholding is not an additional U.S. Federal income tax.
Rather, the U.S. Federal income tax liability of a person subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained.
10. WAIVER OF CONDITIONS. The Company reserves the absolute right to
waive satisfaction of any or all conditions enumerated in the Prospectus.
11. NO CONDITIONAL TENDERS. No alternative, conditional, irregular or
contingent tenders will be accepted. All tendering holders of Old Capital
Securities, by execution of this Letter of Transmittal, shall waive any right to
receive notice of the acceptance of their Old Capital Securities for exchanges.
Neither the Company, the Exchange Agent nor any other person is
obligated to give notice of any defect or irregularity with respect to any
tender of Old Capital Securities nor shall any of them incur any liability for
failure to give any such notice.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Certificate(s)
representing Old Capital Securities have been lost, destroyed or stolen, the
holder should promptly notify the Exchange Agent. The holder will then be
instructed as to the steps that must be taken in order to replace the
Certificate(s). This Letter of Transmittal and related documents cannot be
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<PAGE> 17
processed until the procedures for replacing lost, destroyed or stolen
Certificate(s) have been followed.
13. SECURITY TRANSFER TAXES. Holders who tender their Old Capital
Securities for exchange will not be obligated to pay any transfer taxes in
connection therewith. If, however, Exchange Capital Securities are to be
delivered to, or are to be issued in the name of, any person other than the
registered holder of the Old Capital Securities tendered, or if a transfer tax
is imposed for any reason other than the exchange of Old Capital Securities in
connection with the Exchange Offer, then the amount of any such transfer tax
(whether imposed on the registered holder or any other persons) will be payable
by the tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with the Letter of Transmittal, the amount
of such transfer taxes will be billed directly to such tendering holder.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF) AND ALL
OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO
THE EXPIRATION DATE.
TO BE COMPLETED BY ALL TENDERING SECURITYHOLDERS
(See Instruction 9)
PAYER'S NAME: THE BANK OF NEW YORK
<TABLE>
<S> <C>
PART I--PLEASE PROVIDE YOUR TIN ON THE TIN: ______________________________
LINE AT RIGHT AND CERTIFY BY SIGNING Social Security Number or
AND DATING BELOW Employer Identification Number
PART 2--TIN Applied For [ ]
SUBSTITUTE CERTIFICATION - UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT:
Form W-9 (1) the number shown on this form is my correct taxpayer identification number (or I am
Department Of The Treasury waiting for a number to be issued to me).
Internal Revenue Service
(2) I am not subject to backup withholding either because (i) I am exempt from backup
Payor's Request For withholding, (ii) I have not been notified by the Internal Revenue Service ("IRS") that I
Taxpayer am subject to backup withholding as a result of a failure to report all interest or
Identification Number dividends, or (iii) the IRS has notified me that I am no longer subject to backup
("TIN") withholding, and
and Certification
(3) any other information provided on this form is true and correct.
Signature _______________________ Date ______________________, 1997
</TABLE>
You must cross out item (iii) in Part (2) above if you have been notified by the
IRS that you are subject to backup withholding because of underreporting
interest or dividends on your tax return and you have not been notified by the
IRS that you are no longer subject to backup withholding.
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES
RESULT IN BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT TO THE
EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
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<PAGE> 18
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 2 OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (1) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (2) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number by the time of payment, 31% of all
payments made to me on account of the Exchange Capital Securities shall be
retained until I provide a taxpayer identification number to the Exchange Agent
and that, if I do not provide my taxpayer identification number within 60 days,
such retained amounts shall be remitted to the Internal Revenue Service as
backup withholding and 31% of all reportable payments made to me thereafter will
be withheld and remitted to the Internal Revenue Service until I provide a
taxpayer identification number.
Signature __________________________________ Date ________________, 1997
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<PAGE> 1
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
ANY AND ALL OUTSTANDING
8.25% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
OF
BANCORP HAWAII CAPITAL TRUST I
FULLY AND UNCONDITIONALLY GUARANTEED
BY BANCORP HAWAII, INC.
This Notice of Guaranteed Delivery, or one substantially equivalent to
this form, must be used to accept the Exchange Offer (as defined below) if (i)
certificates for the Trust's (as defined below) 8.25% Capital Securities due
December 15, 2026 (the "Old Capital Securities") are not immediately available,
(ii) Old Capital Securities, the Letter of Transmittal and all other required
documents cannot be delivered to The Bank of New York (the "Exchange Agent") on
or prior to 5:00 P.M. New York City time, on the Expiration Date (as defined in
the Prospectus referred to below) or (iii) the procedures for delivery by
book-entry transfer cannot be completed on a timely basis. This Notice of
Guaranteed Delivery may be delivered by hand, overnight courier or mail, or
transmitted by facsimile transmission, to the Exchange Agent. See "The Exchange
Offer--Procedures for Tendering Old Capital Securities" in the Prospectus. In
addition, in order to utilize the guaranteed delivery procedure to tender Old
Capital Securities pursuant to the Exchange Offer, a completed, signed and dated
Letter of Transmittal relating to the Old Capital Securities (or facsimile
thereof) must also be received by the Exchange Agent prior to 5:00 P.M. New York
City time, on the Expiration Date. Capitalized terms not defined herein have the
meanings assigned to them in the Prospectus.
The Exchange Agent For The Exchange Offer Is:
The Bank Of New York
<TABLE>
<S> <C> <C>
By Registered or Certified Mail Facsimile Transmissions: By Hand Or Overnight Delivery
(Eligible Institutions Only)
The Bank of New York (212) 571-3080 The Bank of New York
101 Barclay Street, 7E 101 Barclay Street
New York, New York 10286 Confirm By Telephone: Corporate Trust Services Window
Attn: Reorganization Section (212) 815-2791 Ground Level
Jodi Mancato New York, New York 10286
For Information Call: Attn: Reorganization Section,
(212) 815-2791 Jodi Mancato
</TABLE>
Delivery of this Notice Of Guaranteed Delivery to an address other than
as set forth above or transmission of this Notice of Guaranteed Delivery via
facsimile to a number other than as set forth above will not constitute a valid
delivery.
<PAGE> 2
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
Ladies and Gentlemen:
The undersigned hereby tenders to Bancorp Hawaii, Inc., a Hawaii Corporation
(the "Corporation") and to Bancorp Hawaii Capital Trust I, a Delaware business
trust (the "Trust"), upon the terms and subject to the conditions set forth in
the Prospectus dated April , 1997 (as the same may be amended or supplemented
from time to time, the "Prospectus"), and the related Letter of Transmittal
(which together constitute the "Exchange Offer"), receipt of which is hereby
acknowledged, the aggregate principal amount of Old Capital Securities set forth
below pursuant to the guaranteed delivery procedures set forth in the Prospectus
under the caption "The Exchange Offer--Procedures for Tendering Old Capital
Securities."
Aggregate Liquidation Amount Name(s) of Registered Holder(s)
Amount Tendered: $_______________________* _______________________________
_______________________________
Certificate No(s)
(if available):__________________________
_________________________________________
(Total Liquidation Amount Represented by
Old Capital Securities Certificate(s):
$________________________________________
If Old Capital Securities will be tendered by book-entry transfer, provide the
following information:
DTC Account Number:______________________
Date:____________________________________
* Must be in denominations of a Liquidation Amount of $1,000 and any integral
multiple thereof, and not less than $100,000 aggregate Liquidation Amount.
- 2 -
<PAGE> 3
All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the undersigned and every obligation of the
undersigned hereunder shall be binding upon the heirs personal representatives,
successors and assigns of the undersigned.
PLEASE SIGN HERE
X____________________ _____________________
X____________________ _____________________
Signature(s) of Owner(s) Date
or Authorized Signatory
Area Code and Telephone Number:________________________
Must be signed by the holder(s) of the Old Capital Securities as their
name(s) appear(s) on certificates for Old Capital Securities or on a security
position listing, or by person(s) authorized to become registered holder(s) by
endorsement and documents transmitted with this Notice of Guaranteed Delivery.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must set forth his or her full title below.
Please print name(s) and address(es)
Name(s):________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Capacity:_______________________________________________________________________
Address(es):____________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
- 3 -
<PAGE> 4
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity identified in Rule 17Ad-15
under the Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) a bank; (ii) a
broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker, government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
learning agency; or (v) a savings association that is a participant in a
Securities Transfer Association recognized program (each of the foregoing being
referred to as an "Eligible Institution"), hereby guarantees to deliver to the
Exchange Agent, at one of its addresses set forth above, either the Old Capital
Securities tendered hereby in proper form for transfer, or confirmation of the
book-entry transfer of such Old Capital Securities to the Exchange Agent's
account at The Depositary Trust Company ("DTC"), pursuant to the procedures for
book-entry transfer set forth in the Prospectus, in either case together with
one or more properly completed and duly executed Letter(s) of Transmittal (or
facsimile thereof) and any other required documents within five business days
after the date of execution of this Notice of Guaranteed Delivery.
The undersigned acknowledges that it must deliver the Letter(s) of
Transmittal and the Old Capital Securities tendered hereby to the Exchange Agent
within the time period set forth above and that failure to do so could result in
a financial loss to the undersigned.
___________________________________ ________________________________________
Name of Firm Authorized Signature
___________________________________ ________________________________________
Address Title
___________________________________ ________________________________________
Zip Code (Please Type or Print)
Area Code and Telephone No.________ Dated:__________________________________
NOTE: DO NOT SEND CERTIFICATES FOR OLD CAPITAL SECURITIES WITH THIS
FORM. CERTIFICATES FOR OLD CAPITAL SECURITIES SHOULD ONLY BE SENT WITH
YOUR LETTER OF TRANSMITTAL.
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<PAGE> 1
EXHIBIT 99.3
April , 1997
EXCHANGE AGENT AGREEMENT
The Bank of New York
Corporate Trust Trustee Administration
101 Barclay Street - 21st Floor
New York, New York 10286
Ladies and Gentlemen:
Bancorp Hawaii Capital Trust I (the "Company") proposes to
make an offer (the "Exchange Offer") to exchange its 8.25% Capital Securities
(the "Old Securities") for its 8.25% Capital Securities (the "New Securities").
The terms and conditions of the Exchange Offer as currently contemplated are set
forth in a prospectus, dated April , 1997 (the "Prospectus"), proposed to be
distributed to all record holders of the Old Securities. The Old Securities and
the New Securities are collectively referred to herein as the "Securities".
The Company hereby appoints The Bank of New York to act as
exchange agent (the "Exchange Agent") in connection with the Exchange Offer.
References hereinafter to "you" shall refer to The Bank of New York.
The Exchange Offer is expected to be commenced by the Company
on or about April , 1997. The Letter of Transmittal accompanying the
Prospectus (or in the case of book entry securities, the ATOP system) is to be
used by the holders of the Old Securities to accept the Exchange Offer and
contains instructions with respect to the delivery of certificates for Old
Securities tendered in connection therewith.
The Exchange Offer shall expire at 5:00 P.M., New York City
time, on , 199 or on such later date or time to which the Company
may extend the Exchange Offer (the "Expiration Date"). Subject to the terms and
conditions set forth in the Prospectus, the Company expressly reserves the right
to extend the Exchange Offer from time to time and may extend the Exchange Offer
by giving oral (confirmed in writing) or written notice to you before 9:00 A.M.,
New York City time, on the business day following the previously scheduled
Expiration Date.
The Company expressly reserves the right to amend or terminate
the Exchange Offer, and not to accept for exchange any Old Securities not
theretofore accepted for exchange, upon the occurrence of any of the conditions
of the Exchange Offer specified in the Prospectus under the caption "The
Exchange Offer -- Conditions to the Exchange Offer." The Company will give oral
(confirmed in writing) or written notice of any amendment, termination or
nonacceptance to you as promptly as practicable.
<PAGE> 2
In carrying out your duties as Exchange Agent, you are to act
in accordance with the following instructions:
1. You will perform such duties and only such duties as are
specifically set forth in the section of the Prospectus captioned "The Exchange
Offer" or as specifically set forth herein; provided, however, that in no way
will your general duty to act in good faith be discharged by the foregoing.
2. You will establish an account with respect to the Old
Securities at The Depository Trust Company (the "Book-Entry Transfer Facility")
for purposes of the Exchange Offer within two business days after the date of
the Prospectus, and any financial institution that is a participant in the
Book-Entry Transfer Facility's systems may make book-entry delivery of the Old
Securities by causing the Book-Entry Transfer Facility to transfer such Old
Securities into your account in accordance with the Book-Entry Transfer
Facility's procedure for such transfer.
3. You are to examine each of the Letters of Transmittal and
certificates for Old Securities (or confirmation of book-entry transfer into
your account at the Book-Entry Transfer Facility) and any other documents
delivered or mailed to you by or for holders of the Old Securities to ascertain
whether: (i) the Letters of Transmittal and any such other documents are duly
executed and properly completed in accordance with instructions set forth
therein and (ii) the Old Securities have otherwise been properly tendered. In
each case where the Letter of Transmittal or any other document has been
improperly completed or executed or any of the certificates for Old Securities
are not in proper form for transfer or some other irregularity in connection
with the acceptance of the Exchange Offer exists, you will endeavor to inform
the presenters of the need for fulfillment of all requirements and to take any
other action as may be necessary or advisable to cause such irregularity to be
corrected.
4. With the approval of the President, Senior Vice President,
Executive Vice President, or any Vice President of the Company (such approval,
if given orally, to be confirmed in writing) or any other party designated by
such an officer in writing, you are authorized to waive any irregularities in
connection with any tender of Old Securities pursuant to the Exchange Offer.
5. Tenders of Old Securities may be made only as set forth in
the Letter of Transmittal and in the section of the Prospectus captioned "The
Exchange Offer -- Procedures for Tendering Old Securities", and Old Securities
shall be considered properly tendered to you only when tendered in accordance
with the procedures set forth therein.
Notwithstanding the provisions of this paragraph 5, Old
Securities which the President, Senior Vice President, Executive Vice President,
or any Vice President of the Company shall approve as having been properly
tendered shall be considered to be properly tendered (such approval, if given
orally, shall be confirmed in writing).
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6. You shall advise the Company with respect to any Old
Securities received subsequent to the Expiration Date and accept its
instructions with respect to disposition of such Old Securities.
7. You shall accept tenders:
(a) in cases where the Old Securities are registered in two or
more names only if signed by all named holders;
(b) in cases where the signing person (as indicated on the
Letter of Transmittal) is acting in a fiduciary or a representative capacity
only when proper evidence of his or her authority so to act is submitted; and
(c) from persons other than the registered holder of Old
Securities provided that customary transfer requirements, including any
applicable transfer taxes, are fulfilled.
You shall accept partial tenders of Old Securities where so
indicated and as permitted in the Letter of Transmittal (in denominations of not
less than $100,000 and any integral multiple of $1,000 in excess thereof) and
deliver certificates for Old Securities to the transfer agent for split-up and
return any untendered Old Securities to the holder (or such other person as may
be designated in the Letter of Transmittal) as promptly as practicable after
expiration or termination of the Exchange Offer.
8. Upon satisfaction or waiver of all of the conditions to the
Exchange Offer, the Company will notify you (such notice if given orally, to be
confirmed in writing) of its acceptance, promptly after the Expiration Date, of
all Old Securities properly tendered and you, on behalf of the Company, will
exchange such Old Securities for New Securities and cause such Old Securities to
be cancelled. Delivery of New Securities will be made on behalf of the Company
by you at the rate of $1,000 principal amount of New Securities for each $1,000
principal amount of the corresponding series of Old Securities tendered promptly
after notice (such notice if given orally, to be confirmed in writing) of
acceptance of said Old Securities by the Company; provided, however, that in all
cases, Old Securities tendered pursuant to the Exchange Offer will be exchanged
only after timely receipt by you of certificates for such Old Securities (or
confirmation of book-entry transfer into your account at the Book-Entry Transfer
Facility), a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) with any required signature guarantees and any other required
documents. You shall issue New Securities only in denominations of not less than
$100,000 or any integral multiple of $1,000 in excess thereof.
9. Tenders pursuant to the Exchange Offer are irrevocable,
except that, subject to the terms and upon the conditions set forth in the
Prospectus and the Letter of Transmittal, Old Securities tendered pursuant to
the Exchange Offer may be withdrawn at any time prior to the Expiration Date.
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10. The Company shall not be required to exchange any Old
Securities tendered if any of the conditions set forth in the Exchange Offer are
not met. Notice of any decision by the Company not to exchange any Old
Securities tendered shall be given (and confirmed in writing) by the Company to
you.
11. If, pursuant to the Exchange Offer, the Company does not
accept for exchange all or part of the Old Securities tendered because of an
invalid tender, the occurrence of certain other events set forth in the
Prospectus under the caption "The Exchange Offer -- Conditions to the Exchange
Offer" or otherwise, you shall as soon as practicable after the expiration or
termination of the Exchange Offer return those certificates for unaccepted Old
Securities (or effect appropriate book-entry transfer), together with any
related required documents and the Letters of Transmittal relating thereto that
are in your possession, to the persons who deposited them.
12. All certificates for reissued Old Securities, unaccepted
Old Securities or for New Securities shall be forwarded by (a) first-class
certified mail, return receipt requested under a blanket surety bond protecting
you and the Company from loss or liability arising out of the non-receipt or
non-delivery of such certificates or (b) by registered mail insured separately
for the replacement value of each of such certificates.
13. You are not authorized to pay or offer to pay any
concessions, commissions or solicitation fees to any broker, dealer, bank or
other persons or to engage or utilize any person to solicit tenders.
14. As Exchange Agent hereunder you:
(a) shall have no duties or obligations other than
those specifically set forth herein or as may be subsequently agreed to in
writing by you and the Company;
(b) will be regarded as making no representations and
having no responsibilities as to the validity, sufficiency, value or genuineness
of any of the certificates or the Old Securities represented thereby deposited
with you pursuant to the Exchange Offer, and will not be required to and will
make no representation as to the validity, value or genuineness of the Exchange
Offer;
(c) shall not be obligated to take any legal action
hereunder which might in your reasonable judgment involve any expense or
liability, unless you shall have been furnished with reasonable indemnity;
(d) may reasonably rely on and shall be protected in
acting in reliance upon any certificate, instrument, opinion, notice, letter,
telegram or other document or security delivered to you and reasonably believed
by you to be genuine and to have been signed by the proper party or parties;
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(e) may reasonably act upon any tender, statement,
request, comment, agreement or other instrument whatsoever not only as to its
due execution and validity and effectiveness of its provisions, but also as to
the truth and accuracy of any information contained therein, which you shall in
good faith believe to be genuine or to have been signed or represented by a
proper person or persons;
(f) may rely on and shall be protected in acting upon
written or oral instructions from any officer of the Company;
(g) may consult with your counsel with respect to any
questions relating to your duties and responsibilities and the advice or opinion
of such counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted to be taken by you hereunder in
good faith and in accordance with the advice or opinion of such counsel; and
(h) shall not advise any person tendering Old
Securities pursuant to the Exchange Offer as to the wisdom of making such tender
or as to the market value or decline or appreciation in market value of any Old
Securities.
15. You shall take such action as may from time to time be
requested by the Company or its counsel (and such other action as you may
reasonably deem appropriate) to furnish copies of the Prospectus, Letter of
Transmittal and the Notice of Guaranteed Delivery (as defined in the Prospectus)
or such other forms as may be approved from time to time by the Company, to all
persons requesting such documents and to accept and comply with telephone
requests for information relating to the Exchange Offer, provided that such
information shall relate only to the procedures for accepting (or withdrawing
from) the Exchange Offer. The Company will furnish you with copies of such
documents at your request. All other requests for information relating to the
Exchange Offer shall be directed to the Company, Attention: Robert Crowell.
16. You shall advise by facsimile transmission or telephone,
and promptly thereafter confirm in writing to Robert Crowell of the Company and
such other person or persons as it may request, daily (and more frequently
during the week immediately preceding the Expiration Date and if otherwise
requested) up to and including the Expiration Date, as to the number of Old
Securities which have been tendered pursuant to the Exchange Offer and the items
received by you pursuant to this Agreement, separately reporting and giving
cumulative totals as to items properly received and items improperly received.
In addition, you will also inform, and cooperate in making available to, the
Company or any such other person or persons upon oral request made from time to
time prior to the Expiration Date of such other information as it or he or she
reasonably requests. Such cooperation shall include, without limitation, the
granting by you to the Company and such person as the Company may request of
access to those persons on your staff who are responsible for receiving tenders,
in order to ensure that immediately prior to the Expiration Date the Company
shall have received information in sufficient detail to enable it to decide
whether to extend the Exchange Offer. You shall prepare a final list of all
persons whose tenders were accepted, the aggregate principal amount of Old
Securities tendered, the aggregate principal amount of Old Securities accepted
and deliver said list to the Company.
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17. Letters of Transmittal and Notices of Guaranteed Delivery
shall be stamped by you as to the date and the time of receipt thereof and shall
be preserved by you for a period of time at least equal to the period of time
you preserve other records pertaining to the transfer of securities. You shall
dispose of unused Letters of Transmittal and other surplus materials by
returning them to the Company.
18. You hereby expressly waive any lien, encumbrance or right
of set-off whatsoever that you may have with respect to funds deposited with you
for the payment of transfer taxes by reasons of amounts, if any, borrowed by the
Company, or any of its subsidiaries or affiliates pursuant to any loan or credit
agreement with you or for compensation owed to you hereunder.
19. For services rendered as Exchange Agent hereunder, you
shall be entitled to such compensation as set forth on Schedule I attached
hereto.
20. You hereby acknowledge receipt of the Prospectus and the
Letter of Transmittal and further acknowledge that you have examined each of
them. Any inconsistency between this Agreement, on the one hand, and the
Prospectus and the Letter of Transmittal (as they may be amended from time to
time), on the other hand, shall be resolved in favor of the latter two
documents, except with respect to the duties, liabilities and indemnification of
you as Exchange Agent, which shall be controlled by this Agreement.
21. The Company covenants and agrees to indemnify and hold you
harmless in your capacity as Exchange Agent hereunder against any loss,
liability, cost or expense, including attorneys' fees and expenses, arising out
of or in connection with any act, omission, delay or refusal made by you in
reliance upon any signature, endorsement, assignment, certificate, order,
request, notice, instruction or other instrument or document reasonably believed
by you to be valid, genuine and sufficient and in accepting any tender or
effecting any transfer of Old Securities reasonably believed by you in good
faith to be authorized, and in delaying or refusing in good faith to accept any
tenders or effect any transfer of Old Securities; provided, however, that the
Company shall not be liable for indemnification or otherwise for any loss,
liability, cost or expense to the extent arising out of your gross negligence or
willful misconduct. In no case shall the Company be liable under this indemnity
with respect to any claim against you unless the Company shall be notified by
you, by letter or cable or by facsimile confirmed by letter, of the written
assertion of a claim against you or of any other action commenced against you,
promptly after you shall have received any such written assertion or notice of
commencement of action. The Company shall be entitled to participate at its own
expense in the defense of any such claim or other action, and, if the Company so
elects, the Company shall assume the defense of any suit brought to enforce any
such claim. In the event that the Company shall assume the defense of any such
suit, the Company shall not be liable for the fees and expenses of any
additional counsel thereafter retained by you so long as the Company shall
retain counsel satisfactory to you to defend such suit.
22. You shall arrange to comply with all requirements under
the tax laws of the United States, including those relating to missing Tax
Identification Numbers, and shall file any appropriate reports with the Internal
Revenue Service. The Company understands that you are
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required to deduct 31% on payments to holders who have not supplied their
correct Taxpayer Identification Number or required certification. Such funds
will be turned over to the Internal Revenue Service in accordance with
applicable regulations.
23. You shall deliver or cause to be delivered, in a timely
manner to each governmental authority to which any transfer taxes are payable in
respect of the exchange of Old Securities, your check in the amount of all
transfer taxes so payable, and the Company shall reimburse you for the amount of
any and all transfer taxes payable in respect of the exchange of Old Securities;
provided, however, that you shall reimburse the Company for amounts refunded to
you in respect of your payment of any such transfer taxes, at such time as such
refund is received by you.
24. This Agreement and your appointment as Exchange Agent
hereunder shall be construed and enforced in accordance with the laws of the
State of New York applicable to agreements made and to be performed entirely
within such state, and without regard to conflicts of law principles, and shall
inure to the benefit of, and the obligations created hereby shall be binding
upon, the successors and assigns of each of the parties hereto.
25. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
26. In case any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
27. This Agreement shall not be deemed or construed to be
modified, amended, rescinded, cancelled or waived, in whole or in part, except
by a written instrument signed by a duly authorized representative of the party
to be charged. This Agreement may not be modified orally.
28. Unless otherwise provided herein, all notices, requests
and other communications to any party hereunder shall be in writing (including
facsimile or similar writing) and shall be given to such party, addressed to it,
at its address or telecopy number set forth below:
If to the Company:
Joseph T. Kiefer, Esq.
General Counsel
Bancorp Hawaii, Inc.
130 Market Street
Honolulu, Hawaii 96813
Facsimile: (808) 538-4346
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If to the Exchange Agent:
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Facsimile: (212) 815-5915
Attention: Corporate Trust Trustee
Administration
29. Unless terminated earlier by the parties hereto, this
Agreement shall terminate 90 days following the Expiration Date. Notwithstanding
the foregoing, Paragraphs 19, 21 and 23 shall survive the termination of this
Agreement. Upon any termination of this Agreement, you shall promptly deliver to
the Company any certificates for Securities, funds or property then held by you
as Exchange Agent under this Agreement.
30. This Agreement shall be binding and effective as of the
date hereof.
Please acknowledge receipt of this Agreement and confirm the
arrangements herein provided by signing and returning the enclosed copy.
BANCORP HAWAII CAPITAL TRUST I
By:________________________________
Name: David A. Houle
Title: Administrative Trustee
Accepted as of the date first above written:
THE BANK OF NEW YORK, as Exchange Agent
By:________________________________
Name:
Title:
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SCHEDULE I
FEES
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