<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 19, 1994.
REGISTRATION NO. 33-55043
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
HOUSEHOLD FINANCE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-1239445
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
2700 SANDERS ROAD
PROSPECT HEIGHTS, ILLINOIS 60070
(708) 564-5000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
PATRICK D. SCHWARTZ, ESQ.
CORPORATE FINANCE COUNSEL
HOUSEHOLD INTERNATIONAL, INC.
2700 SANDERS ROAD
PROSPECT HEIGHTS, ILLINOIS 60070
(708) 564-6301
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
WITH A COPY TO:
SCOTT N. GIERKE, ESQ.
MCDERMOTT, WILL & EMERY
227 WEST MONROE STREET
CHICAGO, ILLINOIS 60606
(312) 984-7521
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after the effective date of this Registration Statement as determined by
market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(A)
MAY DETERMINE.
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- --------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED SEPTEMBER 19, 1994
HOUSEHOLD FINANCE CORPORATION
DEBT SECURITIES
AND
WARRANTS TO PURCHASE DEBT SECURITIES
Household Finance Corporation ("HFC" or the "Company") from time to time may
offer one or more series of its debt securities ("Debt Securities") and
warrants ("Warrants") to purchase Debt Securities (the Debt Securities and
Warrants being hereinafter collectively called "Securities") having an
aggregate initial offering price of up to $2,150,000,000, or the equivalent
thereof if any of the Securities are denominated in a foreign currency or a
foreign currency unit. The Debt Securities will be offered as separate series
in amounts, at prices and on terms to be determined at the time of sale and to
be set forth in supplements to this Prospectus. The Debt Securities and
Warrants may be sold for U.S. dollars, foreign currencies or foreign currency
units, and the principal of and any interest on the Debt Securities may be
payable in U.S. dollars, foreign currencies or foreign currency units. The
specific designation and classification as senior or senior subordinated debt
securities of HFC, aggregate principal amount, the currency or currency unit
for which the Securities may be purchased, the currency or currency unit in
which the principal and any interest is payable, the rate (or method of
calculation) and time of payment of any interest, authorized denominations,
maturity, offering price, any redemption terms or other specific terms of the
Securities in respect of which this Prospectus is being delivered are set forth
in one or more supplements to this Prospectus ("Prospectus Supplement"). With
regard to the Warrants, if any, in respect of which this Prospectus is being
delivered, the Prospectus Supplement sets forth a description of the Debt
Securities for which each Warrant is exercisable and the offering price, if
any, exercise price, duration, detachability and other terms of the Warrants.
HFC may sell Securities through underwriting syndicates led by one or more
managing underwriters or through one or more underwriting firms acting alone,
to or through dealers, acting as principals for their own account or as agents,
and also may sell Securities directly to other purchasers. See "Plan of
Distribution". The names of any underwriters or agents involved in the sale of
the Securities in respect to which this Prospectus is being delivered and their
compensation are set forth in the Prospectus Supplement.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURI-
TIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------
THE DATE OF THIS PROSPECTUS IS SEPTEMBER , 1994.
<PAGE>
AVAILABLE INFORMATION
HFC is subject to the informational requirements of the Securities Exchange
Act of 1934 and in accordance therewith files reports and other information
with the Securities and Exchange Commission (the "Commission"). Such reports
and other information can be inspected and copied at the public reference
facilities of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the Commission's Regional Offices at the Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661 and Seven World Trade
Center, Suite 1300, New York, New York 10048. Copies of such material can also
be obtained at prescribed rates from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. In addition,
certain debt securities of HFC are listed on the New York Stock Exchange, and
reports and other material concerning HFC can be inspected at the offices of
such Exchange at 20 Broad Street, New York, New York 10005. Although HFC is not
required to send an annual report to its security holders, HFC will, upon
request, send to any security holder a copy of its latest Annual Report on Form
10-K, as filed with the Commission, which contains financial information that
has been examined and reported upon, with an opinion expressed, by independent
certified public accountants.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission (File No. 1-75)
pursuant to the Securities Exchange Act of 1934 and are incorporated herein by
reference and made a part of this Prospectus:
(a) HFC's Annual Report on Form 10-K for the fiscal year ended December
31, 1993;
(b) HFC's Quarterly Reports on Form 10-Q for the quarters ended March 31,
1994 and June 30, 1994; and
(c) HFC's Current Reports on Form 8-K dated February 16, 1994 and
September 16, 1994.
All documents filed by HFC with the Commission pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 subsequent to the
date of this Prospectus and prior to the termination of the offering of the
Securities shall be deemed to be incorporated herein by reference and made a
part of this Prospectus from the respective dates of filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
HFC WILL PROVIDE WITHOUT CHARGE TO EACH PERSON (INCLUDING ANY BENEFICIAL
OWNER) TO WHOM THIS PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF
ANY SUCH PERSON, A COPY OF ANY OR ALL DOCUMENTS INCORPORATED HEREIN BY
REFERENCE (OTHER THAN EXHIBITS TO SUCH DOCUMENTS). REQUESTS SHOULD BE DIRECTED
TO:
HOUSEHOLD FINANCE CORPORATION
2700 SANDERS ROAD
PROSPECT HEIGHTS, ILLINOIS 60070
ATTENTION:OFFICE OF THE SECRETARY
TELEPHONE: 708-564-5000
2
<PAGE>
HOUSEHOLD FINANCE CORPORATION
HFC was incorporated in Delaware in 1925, as successor to an enterprise which
traces its origin through the same ownership to an office established in 1878.
The address of its principal executive office is 2700 Sanders Road, Prospect
Heights, Illinois 60070 (telephone 708-564-5000). HFC is a subsidiary of
Household International, Inc. ("Household International" or the "parent
company").
HFC and its subsidiaries offer a diversified range of financial services. The
principal product of HFC's consumer financial services business is the making
of cash loans, including home equity loans secured by first and second
mortgages and unsecured credit advances (including revolving and closed-end
personal loans) to middle-income consumers in the United States and Australia.
Loans are made through branch lending offices and through direct marketing
efforts. HFC also seeks to acquire portfolios of open-end and closed-end,
secured and unsecured loans.
HFC, through banking subsidiaries, offers both VISA* and MasterCard* credit
cards to residents throughout the United States.
Household Retail Services is the revolving credit card merchant participation
business of HFC. This business provides sales financing for consumer goods and
purchases and originates and services merchants' private label revolving charge
accounts.
In conjunction with its consumer finance operations and where applicable laws
permit, HFC makes available to customers credit life, credit accident and
health, and household contents insurance. Credit life and credit accident and
health insurance are generally directly written by or reinsured with HFC's
insurance subsidiary, Alexander Hamilton Life Insurance Company of America.
Alexander Hamilton is also engaged in the sale of ordinary life, annuity, and
specialty insurance products to the general public.
HFC, through its subsidiary, Household Commercial Financial Services, Inc.,
also is engaged
in commercial finance, involving leveraged leases, privately-placed, limited-
term preferred stocks and selected commercial financing of equipment or
property. At the end of 1991, HFC discontinued certain higher risk commercial
lending activities.
USE OF PROCEEDS
Unless otherwise indicated in the Prospectus Supplement, HFC will apply the
net proceeds from the sale of the Securities to its general funds to be used in
its financial services business, including the funding of investments in, or
extensions of credit to, affiliates of HFC. Pending such applications, the net
proceeds will be used initially to reduce outstanding commercial paper of HFC.
The proceeds of such commercial paper are used in connection with HFC's
financial services business.
- --------
* VISA and MasterCard are registered trademarks of VISA USA, Inc. and
MasterCard International Incorporated, respectively.
3
<PAGE>
HOUSEHOLD FINANCE CORPORATION AND SUBSIDIARIES
SUMMARY FINANCIAL INFORMATION
The following summary financial information of the Company and its
subsidiaries is qualified in its entirety by the detailed information and
financial statements included in the documents referred to under "Incorporation
of Certain Documents by Reference". All amounts are stated in millions of
dollars.
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
--------------- -----------------
1994 1993 1993 1992
------- ------- -------- --------
<S> <C> <C> <C> <C>
Income Statements
Finance income.............................. $ 714.9 $ 649.9 $1,318.1 $1,334.6
Interest income from noninsurance investment
securities................................. 18.0 19.5 40.9 34.9
Interest expense............................ 271.9 258.5 510.2 633.2
------- ------- -------- --------
Net interest margin......................... 461.0 410.9 848.8 736.3
Provision for credit losses on owned receiv-
ables...................................... 218.0 224.9 494.5 368.3
------- ------- -------- --------
Net interest margin after provision for
credit losses.............................. 243.0 186.0 354.3 368.0
------- ------- -------- --------
Securitization and servicing fee income..... 172.4 187.5 383.4 369.2
Insurance premiums and contract revenues.... 135.8 115.4 242.6 220.5
Investment income........................... 254.5 268.8 552.1 492.2
Fee income.................................. 36.3 26.0 60.7 50.5
Other income................................ 23.7 29.0 77.5 63.5
------- ------- -------- --------
Total other revenues........................ 622.7 626.7 1,316.3 1,195.9
------- ------- -------- --------
Net interest margin after provision for
credit losses and other revenues........... 865.7 812.7 1,670.6 1,563.9
------- ------- -------- --------
Operating expenses.......................... 446.8 415.2 825.6 748.0
Policyholders' benefits..................... 248.2 254.8 517.2 484.1
------- ------- -------- --------
Total costs and expenses.................... 695.0 670.0 1,342.8 1,232.1
------- ------- -------- --------
Income before income taxes.................. 170.7 142.7 327.8 331.8
Income taxes................................ 55.6 43.7 107.4 92.3
------- ------- -------- --------
Net income.................................. $ 115.1 $ 99.0 $ 220.4 $ 239.5
======= ======= ======== ========
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
(UNAUDITED)
JUNE 30, DECEMBER 31,
----------- --------------------
1994 1993 1992
----------- --------- ---------
<S> <C> <C> <C>
Balance Sheets
Assets
Cash....................................... $ 73.9 $ 27.8 $ 48.7
Investment securities...................... 6,972.6 7,082.0 5,902.5
Finance and banking receivables............ 9,798.1 9,338.4 8,459.7
Liquidating commercial assets.............. 1,363.5 1,555.7 1,851.2
Advances to parent company and affiliates.. 465.5 361.7 393.3
Deferred insurance policy acquisition
costs..................................... 562.7 381.6 453.4
Acquired intangibles....................... 360.0 246.7 293.8
Properties and equipment................... 206.7 202.2 177.8
Assets acquired through foreclosure........ 152.7 171.9 191.3
Other assets............................... 591.4 482.2 374.7
--------- --------- ---------
Total assets............................. $20,547.1 $19,850.2 $18,146.4
========= ========= =========
Liabilities and Shareholder's Equity
Debt:
Commercial paper, bank and other
borrowings............................... $ 4,257.3 $ 4,321.8 $ 4,217.9
Senior and senior subordinated debt (with
original maturities over one year)....... 7,194.7 6,813.7 6,601.5
--------- --------- ---------
Total debt................................. 11,452.0 11,135.5 10,819.4
Insurance policy and claim reserves........ 6,344.3 5,981.5 5,243.3
Other liabilities.......................... 898.2 942.7 556.4
--------- --------- ---------
Total liabilities.......................... 18,694.5 18,059.7 16,619.1
--------- --------- ---------
Preferred stock............................ 100.0 100.0 150.0
--------- --------- ---------
Common shareholder's equity:
Common stock and paid-in capital.......... 596.2 551.2 481.2
Retained earnings......................... 1,237.5 1,126.0 914.3
Foreign currency translation adjustments.. (24.0) (21.8) (16.8)
Unrealized gain (loss) on investments,
net...................................... (57.1) 35.1 (1.4)
--------- --------- ---------
Total common shareholder's equity........ 1,752.6 1,690.5 1,377.3
--------- --------- ---------
Total liabilities and shareholder's equity. $20,547.1 $19,850.2 $18,146.4
========= ========= =========
</TABLE>
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for HFC and subsidiaries for the
periods indicated below was as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
----------- ------------------------
1994 1993 1993 1992 1991 1990 1989
----- ----- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
HFC and subsidiaries--calculated on income
from continuing operations............... 1.59 1.52 1.61 1.49 1.20 1.32 1.35
</TABLE>
For purposes of calculating the ratio, earnings consist of income from
continuing operations to which has been added income taxes and fixed charges of
subsidiaries. Fixed charges consist of interest on all indebtedness and one-
third rentals (approximate portion representing interest).
5
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities to which any Prospectus Supplement
may relate. The particular terms of the Debt Securities offered by any
Prospectus Supplement (the "Offered Debt Securities") and the extent to which
such general terms and provisions may apply to the Offered Debt Securities will
be described in the Prospectus Supplement relating to such Offered Debt
Securities.
GENERAL
Offered Debt Securities will constitute either senior or senior subordinated
unsecured debt of HFC and will be issued under one of the indentures specified
elsewhere herein (the "Indentures"). The Indentures, or forms thereof, and the
Standard Provisions (as defined herein) have been filed as exhibits to HFC's
Registration Statement which registers the Securities with the Commission. The
following summaries do not purport to be complete and, where particular
provisions of an Indenture or the Standard Provisions are referred to, such
provisions, including definitions of certain terms, are incorporated by
reference as part of such summaries, which are qualified in their entirety by
such reference.
The Indentures provide that Debt Securities may be issued thereunder from
time to time in one or more series and do not limit the aggregate principal
amount of the Debt Securities except as may be otherwise provided with respect
to any particular series of Offered Debt Securities.
Unless otherwise indicated in the Prospectus Supplement with respect to any
particular series of Offered Debt Securities, the Debt Securities will be
issued in definitive registered form without coupons, will be exchangeable for
authorized denominations, and will be transferable at any time or from time to
time. No charge will be made to the holder for any such exchange or
registration of transfer except for any tax or governmental charge incident
thereto.
Reference is made to the Prospectus Supplement relating to the particular
series of Debt Securities offered thereby for the following terms and other
information to the extent applicable with respect to the Offered Debt
Securities: (1) the title of the Offered Debt Securities and whether such
Offered Debt Securities will be senior or senior subordinated debt of HFC; (2)
any limit on the aggregate principal amount of the Offered Debt Securities; (3)
the price (expressed as a percentage of the aggregate principal amount thereof)
HFC will be paid for the Offered Debt Securities and the initial offering
price, if any, at which the Offered Debt Securities will be offered to the
public; (4) the currency, currencies or currency units for which the Offered
Debt Securities may be purchased and the currency, currencies or currency units
in which the principal of and any interest on such Offered Debt Securities may
be payable; (5) the date or dates on which the Offered Debt Securities will
mature; (6) the rate or rates (which may be fixed or variable) per annum at
which the Offered Debt Securities will bear interest, if any; (7) the date from
which such interest, if any, on the Offered Debt Securities will accrue, the
dates on which such interest, if any, will be payable, the date on which
payment of such interest, if any, will commence, and the Regular Record Dates
for such Interest Payment Dates, if any; (8) the dates, if any, on which and
the price or prices at which the Offered Debt Securities will, pursuant to any
mandatory sinking fund provisions, or may, pursuant to any optional sinking
fund or to any purchase fund provisions, be redeemed by HFC, and the other
detailed terms and provisions of such sinking and/or purchase funds; (9) the
date, if any, after which and the price or prices at which the Offered Debt
Securities may, pursuant to any optional redemption provisions, be redeemed at
the option of HFC or of the holder thereof and the other detailed terms and
provisions of such optional redemption; (10) the denominations in which the
Offered Debt Securities are authorized to be issued; (11) the securities
exchange, if any, on which the Debt Securities will be listed; and (12)
additional provisions, if any, with respect to the Offered Debt Securities.
6
<PAGE>
If any of the Debt Securities are sold for foreign currencies or foreign
currency units or if the principal of or any interest on any series of Debt
Securities is payable in foreign currencies or foreign currency units, the
restrictions, elections, tax consequences, specific terms and other information
with respect to such issue of Debt Securities and such currencies or currency
units will be set forth in a Prospectus Supplement relating thereto.
Debt Securities may be issued as Original Issue Discount Securities to be
offered and sold at a discount below their stated principal amount. "Original
Issue Discount Securities" means any Debt Securities that provide for an amount
less than the principal amount thereof to be due and payable upon a declaration
of acceleration of the maturity thereof upon the occurrence of an Event of
Default and the continuation thereof. As used in the following summary of
certain terms of the Debt Securities, the term "principal amount" means, in the
case of any Original Issue Discount Security, the amount that would then be due
and payable upon acceleration of the maturity thereof, as specified in such
Debt Security.
SENIOR DEBT SECURITIES
The trustees for the indentures under which Offered Debt Securities
constituting senior debt of HFC (the "Senior Debt Securities") will be issued
shall be either Bank of America Illinois, formerly known as Continental Bank,
National Association, NationsBank of Tennessee, The First National Bank of
Boston, The First National Bank of Chicago or BankAmerica National Trust
Company, successor to BankAmerica Trust Company of New York (collectively, the
"Senior Trustees"). Each particular series of Senior Debt Securities will be
issued under the Indenture specified in the Prospectus Supplement between HFC
and a Senior Trustee, which will incorporate the terms and provisions of the
Standard Multiple-Series Indenture Provisions for Senior Debt Securities dated
as of June 1, 1992 (the "Standard Provisions"). The above noted indentures are
collectively called the "Indentures for Senior Debt Securities" herein. Senior
Debt Securities will rank on a parity with all unsecured debt of HFC, and prior
to all subordinated debt.
Principal of and interest, if any, on Senior Debt Securities will be payable
at the office or agency of HFC specified in the Prospectus Supplement,
depending on the Senior Trustee; provided, however, that payment of interest
may be made at the option of HFC by check or draft mailed to the person
entitled thereto.
Covenant Against Creation of Pledges or Liens
All Senior Debt Securities issued under the Indentures for Senior Debt
Securities will be unsecured. HFC covenants that, with the exceptions listed
below, it will not issue, assume or guarantee any indebtedness for borrowed
money secured by a mortgage, security interest, pledge or lien ("security
interest") of or upon any of its property, now owned or hereafter acquired,
unless the Senior Debt Securities then outstanding are, by supplemental
indenture, effectively secured by such security interest equally and ratably
with all other indebtedness secured thereby for so long as such other
indebtedness shall be so secured. The term "indebtedness for borrowed money"
does not include any guarantee, cash deposit or other recourse obligation in
connection with the sale, securitization or discount by HFC of finance or
accounts receivables, trade acceptances, or other paper arising in the ordinary
course of its business.
The foregoing covenant does not apply to (a) security interests to secure the
payment of the purchase price of property, shares of capital stock, or
indebtedness acquired by HFC or the cost of construction or improvement of such
property or the refinancing of all or any part of such secured
7
<PAGE>
indebtedness, provided that such security interests do not apply to any other
property, shares of capital stock, or indebtedness of HFC; (b) security
interests on property, shares of capital stock, or indebtedness existing at the
time of acquisition by HFC; (c) security interests on property of a corporation
which security interests exist at the time such corporation merges or
consolidates with or into HFC or which security interests exist at the time of
the sale or transfer of all or substantially all of the assets of such
corporation to HFC; (d) security interests to secure any indebtedness of HFC to
a subsidiary; (e) security interests in property of HFC in favor of the United
States of America or any state or agency or instrumentality thereof, or in
favor of any other country or political subdivision, to secure partial,
progress, advance, or other payments pursuant to any contract or statute or to
secure any indebtedness incurred or guaranteed for the purpose of financing all
or any part of the purchase price or the cost of construction of the property
subject to such security interests; (f) security interests on properties
financed through tax-exempt municipal obligations;
provided that such security interests are limited to the property so financed;
(g) security interests existing on the date of execution of the applicable
Indenture; and (h) any extension, renewal, refunding, or replacement (or
successive extensions, renewals, refundings, or replacements), in whole or in
part, of any security interest referred to in the foregoing clauses (a) through
(g) inclusive; provided, however, that the principal amount of indebtedness
secured in such extension, renewal, refunding, or replacement does not exceed
the principal amount of indebtedness secured at the time by such security
interest; provided, further, that such extension, renewal, refunding, or
replacement of such security interest is limited to all or part of the property
subject to such security interest so extended, renewed, refunded, or replaced.
Notwithstanding the foregoing, HFC may, without equally and ratably securing
the Senior Debt Securities, issue, assume, or guarantee indebtedness secured by
a security interest not excepted pursuant to clauses (a) through (h) above if
the aggregate amount of such indebtedness, together with all other indebtedness
of, or guaranteed by, HFC existing at such time and secured by security
interests not so excepted, does not at the time exceed 10% of HFC's
Consolidated Net Worth (as defined). In addition, an arrangement with any
person providing for the leasing by HFC of any property, which property has
been or is to be sold or transferred by HFC to such person with the intention
that such property be leased back to HFC, shall not be deemed to create any
indebtedness secured by a security interest if the obligation in respect to
such lease would not be included as a liability on a consolidated balance sheet
of HFC. The holders of not less than a majority in principal amount of the Debt
Securities at the time outstanding under an Indenture, on behalf of the holders
of all of the Debt Securities issued under such Indenture, may waive compliance
with the foregoing covenant. (Standard Provisions--Section 3.08)
Concerning the Trustees
HFC maintains a banking relationship with each of the Senior Trustees or
affiliates thereof and certain of the Senior Trustees are also trustees under
other indentures of HFC under which outstanding senior or subordinated
unsecured debt securities of HFC have been issued. The Senior Trustees or
affiliates thereof may also have other financial relations with HFC and other
corporations affiliated with HFC.
SENIOR SUBORDINATED DEBT SECURITIES
Offered Debt Securities which will constitute senior subordinated unsecured
debt of HFC (the "Senior Subordinated Debt Securities") will be issued under
(i) an Indenture dated as of May 15, 1989, between HFC and BankAmerica National
Trust Company, successor to BankAmerica Trust Company of New York, as Trustee,
or (ii) an Indenture dated as of March 15, 1990, between HFC and Harris Trust
and Savings Bank, as Trustee (the "Indentures for Senior Subordinated Debt
Securities").
8
<PAGE>
Unless a different place is specified in the Prospectus Supplement, principal
and interest, if any, on Senior Subordinated Debt Securities will be payable at
the office or agency of HFC in New York, New York, with respect to the
Indenture with BankAmerica National Trust Company; or in Chicago, Illinois,
with respect to the Indenture with Harris Trust and Savings Bank; provided,
however, that payment of interest may be made at the option of HFC by check or
draft mailed to the person entitled thereto.
Subordination
Senior Subordinated Debt Securities are subordinate and junior in right of
payment to all indebtedness for borrowed money of HFC, whenever outstanding,
which is not by its terms subordinate and junior to other indebtedness of HFC,
such indebtedness of HFC to which the Senior Subordinated Debt Securities are
subordinate and junior being hereinafter called "senior indebtedness." At June
30, 1994, the aggregate amount of the outstanding senior indebtedness of HFC
was approximately $11.0 billion. HFC is not directly limited in its ability to
issue additional senior indebtedness.
In the event of any insolvency or bankruptcy proceedings, and any
receivership, liquidation, reorganization or other similar proceedings in
connection therewith, relative to HFC or to its creditors, as such, or to its
property, and in the event of any proceedings for voluntary liquidation,
dissolution or other winding up of HFC, whether or not involving insolvency or
bankruptcy, then the holders of senior indebtedness shall be entitled to
receive payment in full of all principal and interest on all senior
indebtedness before the holders of the Senior Subordinated Debt Securities are
entitled to receive any payment on account of principal or interest upon the
Senior Subordinated Debt Securities, and to that end (but subject to the power
of a court of competent jurisdiction to make other equitable provision
reflecting the rights conferred in the Indentures for Senior Subordinated Debt
Securities upon the senior indebtedness and the holders thereof with respect to
the subordinated indebtedness represented by the Senior Subordinated Debt
Securities and the holders thereof by a lawful plan of reorganization under
applicable bankruptcy law) the holders of senior indebtedness shall be entitled
to receive for application in payment thereof any payment or distribution of
any kind or character, whether in cash or property or securities, which may be
payable or deliverable in any such proceedings in respect of the Senior
Subordinated Debt Securities, except securities which are subordinate and
junior in right of payment to the payment of all senior indebtedness then
outstanding.
In the event that any Senior Subordinated Debt Security is declared or
becomes due and payable before its expressed maturity because of the occurrence
of a default under the Indentures for Senior Subordinated Debt Securities
(under circumstances when the provisions of the foregoing paragraph shall not
be applicable), the holders of the senior indebtedness outstanding at the time
such Senior Subordinated Debt Security so becomes due and payable because of
such occurrence of such default shall be entitled to receive payment in full of
all principal and interest on all senior indebtedness before the holders of the
Senior Subordinated Debt Securities are entitled to receive any payment on
account of the principal or interest upon the Senior Subordinated Debt
Securities.
Without limiting the foregoing, no payment of principal, premium or interest
shall be made upon the Senior Subordinated Debt Securities during the
continuance of any default in the making of any required payment under any
sinking fund or analogous fund created for the benefit of any senior
indebtedness or any other default in the payment of principal of, or interest
on, any senior indebtedness then outstanding, whether by lapse of time, by
declaration, by call or notice of prepayment or otherwise. (Indentures for
Senior Subordinated Debt Securities--Section 12.01)
9
<PAGE>
Liens
HFC will not create, assume, incur or suffer to exist any mortgage, pledge or
other lien on any of the property or assets of HFC whether now owned or
hereafter acquired for the purpose of securing any senior subordinated
indebtedness or junior subordinated indebtedness, as defined. (Indentures for
Senior Subordinated Debt Securities--Section 3.08)
Concerning the Trustees
BankAmerica National Trust Company and Harris Trust and Savings Bank are
trustees under other indentures of HFC under which certain of HFC's outstanding
senior subordinated debt securities have been issued. HFC maintains banking
relationships with Harris Trust and Savings Bank and an affiliate of
BankAmerica National Trust Company. These trustees, or affiliates thereof, also
have other financial relations with HFC and other corporations affiliated with
HFC.
SATISFACTION, DISCHARGE, AND DEFEASANCE OF THE INDENTURES AND DEBT SECURITIES
If there is deposited irrevocably with the Trustee as trust funds for the
benefit of the holders of Debt Securities of a particular series an amount, in
money or the equivalent in securities of the United States or securities the
principal of and interest on which is fully guaranteed by the United States,
sufficient to pay the principal, premium, if any, and interest, if any, on such
series of Debt Securities on the dates such payments are due in accordance with
the terms of such series of Debt Securities through their maturity, and if HFC
has paid or caused to be paid all other sums payable by it under the applicable
Indenture with respect to such series, then HFC will be deemed to have
satisfied and discharged the entire indebtedness represented by such series of
Debt Securities and all of the obligations of HFC under such Indenture with
respect to such series, except as otherwise provided in such Indenture. In the
event of any such defeasance, holders of such Debt Securities would be able to
look only to such trust funds for payment of principal, premium, if any, and
interest, if any, on their Debt Securities. (Standard Provisions, Indentures
for Senior Subordinated Debt Securities--Section 6.03)
For federal income tax purposes, any such defeasance may be treated as a
taxable exchange of the related Debt Securities for an issue of obligations of
the trust or a direct interest in the cash and securities held in the trust. In
that case holders of such Debt Securities would recognize gain or loss as if
the trust obligations or the cash or securities deposited, as the case may be,
had actually been received by them in exchange for their Debt Securities. Such
holders thereafter would be required to include in income a share of the
income, gain or loss of the trust. The amount so required to be included in
income could be a different amount than would be includable in the absence of
defeasance. Prospective investors are urged to consult their own tax advisors
as to the specific consequences to them of defeasance.
MODIFICATION OF INDENTURES
Each Indenture provides that the holders of not less than a majority in
principal amount of each series of Debt Securities at the time outstanding
under such Indenture may enter into supplemental indentures for the purpose of
amending, in any manner, provisions of the Indenture or of any supplemental
indenture or modifying the rights of holders of such series of Debt Securities.
However, no such supplemental indenture, without the consent of the holder of
each outstanding Debt Security affected thereby, shall, among other things, (i)
change the maturity of the principal of, or any installment of interest on any
Debt Security, or reduce the principal amount thereof or the interest thereon
or any premium payable upon the redemption thereof, or (ii) reduce the
aforesaid percentage of the Debt Securities, the consent of the holders of
which is required for the execution of any such supplemental indenture or for
any waiver of compliance with any covenant or condition in such Indenture.
(Standard Provisions, Indentures for Senior Subordinated Debt Securities--
Section 11.02)
10
<PAGE>
Each Indenture may be amended or supplemented without the consent of any
holder of Debt Securities under certain circumstances, including (i) to cure
any ambiguity, defect or inconsistency in the Indenture, any supplemental
indenture, or in the Debt Securities of any series; (ii) to evidence the
succession of another corporation to the Company and to provide for the
assumption of all the obligations of the Company under the Debt Securities and
the Indenture by such corporation; (iii) to provide for uncertificated Debt
Securities in addition to certificated Debt Securities; (iv) to make any change
that does not adversely affect the rights of holders of Debt Securities issued
thereunder; (v) to provide for a new series of Debt Securities; or (vi) to add
to rights of holders of Debt Securities or add additional Events of Default.
(Standard Provisions, Indentures for Senior Subordinated Debt Securities--
Section 11.01)
SUCCESSOR ENTITY
The Company may not consolidate with or merge into, or transfer, sell or
lease its properties and assets as, or substantially as, an entirety to another
entity unless the successor entity is a corporation incorporated within the
United States and, after giving effect thereto, no default under the Indenture
shall have occurred and be continuing. Thereafter, except in the case of a
lease, all obligations of the Company under the Indenture terminate. (Standard
Provisions, Indentures for Senior Subordinated Debt Securities--Sections 10.01
and 10.02)
EVENTS OF DEFAULT
Each Indenture defines the following as Events of Default with respect to any
series of Debt Securities: default for 30 days in the payment of any interest
upon any Debt Security of such series issued under such Indenture; default in
the payment of any principal of or premium on any such Debt Security; default
for 30 days in the deposit of any sinking fund or similar payment for such
series of Debt Securities; default for 60 days after notice in the performance
of any other covenant in the Indenture; certain defaults for 30 days after
notice in the payment of principal or interest, or in the performance of other
covenants, with respect to borrowed money under another indenture in which the
Trustee for such Debt Securities is trustee which results in the principal
amount of such indebtedness becoming due and payable prior to maturity, which
acceleration has not been rescinded or annulled; and certain events of
bankruptcy, insolvency or reorganization. HFC is required to file with each
Trustee annually a certificate as to the absence of certain defaults under the
Indenture. (Standard Provisions, Indentures for Senior Subordinated Debt
Securities--Sections 7.01 and 3.05)
If an Event of Default with respect to Debt Securities of any series at the
time outstanding occurs and is continuing, either the Trustee or the holders of
not less than 25% in principal amount of the outstanding Debt Securities of
such series by notice as provided in the Indenture may declare the principal
amount of all the Debt Securities of such series to be due and payable
immediately. At any time after a declaration of acceleration with respect to
Debt Securities of any series has been made, but before a judgment or decree
for payment of money has been obtained by the Trustee, the holders of not less
than a majority in principal amount of outstanding Debt Securities of such
series may, under certain circumstances, rescind or annul such declaration of
acceleration. (Standard Provisions, Indentures for Senior Subordinated Debt
Securities--Section 7.02)
The holders of not less than a majority in principal amount of the
outstanding Debt Securities of each series may, on behalf of all holders of
Debt Securities of such series, waive any past default under the Indenture and
its consequences with respect to Debt Securities of such series, except a
default (a) in the payment of principal of (or premium, if any) or interest, if
any, on any Debt Securities of such series, or (b) in respect of a covenant or
provision of the Indenture which cannot be modified or amended without the
consent of the holder of each outstanding Debt Security of such series
affected. (Standard Provisions, Indentures for Senior Subordinated Debt
Securities--Section 7.13)
11
<PAGE>
Each Indenture provides that the Trustee thereunder may withhold notice to
holders of Debt Securities of any default, except in payment of the principal
of (or premium, if any) or interest, if any, on any Debt Security issued under
such Indenture or in the payment of any sinking fund or similar payment, if it
considers it in the interest of holders of Debt Securities to do so. (Standard
Provisions, Indentures for Senior Subordinated Debt Securities--Section 8.02)
Holders of Debt Securities may not enforce an Indenture except as provided
therein. (Standard Provisions, Indentures for Senior Subordinated Debt
Securities--Section 7.07) Each Indenture provides that the holders of a
majority in principal amount of the outstanding debt securities issued under
such Indenture have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee. (Standard Provisions, Indentures
for Senior Subordinated Debt Securities--Section 7.12) The Trustee will not be
required to comply with any request or direction of holders of Debt Securities
pursuant to the Indenture unless offered indemnity against costs and
liabilities which might be incurred by the Trustee as a result of such
compliance. (Standard Provisions, Indentures for Senior Subordinated Debt
Securities--Section 8.03(e))
DESCRIPTION OF WARRANTS
HFC may issue, together with any Debt Securities offered by any Prospectus
Supplement or separately, Warrants for the purchase of other Debt Securities.
The Warrants are to be issued under warrant agreements (each a "Warrant
Agreement") to be entered into between HFC and a bank or trust company, as
warrant agent ("Warrant Agent"), all as set forth in the Prospectus Supplement
relating to the particular issue of Warrants ("Offered Warrants"). A copy of
the forms of Warrant Agreement, including the form of warrant certificates
representing the Warrants ("Warrant Certificates"), reflecting the alternative
provisions to be included in the Warrant Agreements that will be entered into
with respect to particular offerings of Warrants, is filed as an exhibit to the
Registration Statement. The following summaries of certain provisions of the
Warrant Agreement and the Warrant Certificates do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all
the provisions of the Warrant Agreement and the Warrant certificates,
respectively, including the definitions therein of certain terms.
GENERAL
The Prospectus Supplement describes the terms of the Offered Warrants, the
Warrant Agreement relating to the Offered Warrants and the Warrant Certificates
representing the Offered Warrants, including the following: (1) the
designation, aggregate principal amount, and terms of the Debt Securities
purchasable upon exercise of the Offered Warrants; (2) the designation and
terms of any related Debt Securities with which the Offered Warrants are issued
and the number of Offered Warrants issued with each such Debt Security; (3) the
date, if any, on and after which the Offered Warrants and the related Offered
Debt Securities will be separately transferable; (4) the principal amount of
Debt Securities purchasable upon exercise of one Offered Warrant and the price
at which such principal amount of Debt Securities may be purchased upon such
exercise; (5) the date on which the right to exercise the Offered Warrants
shall commence and the date ("Expiration Date") on which such right shall
expire; (6) whether the Warrants represented by the Warrant Certificates will
be issued in registered or bearer form, and if registered, where they may be
transferred and registered; and (7) any other terms of the Offered Warrants.
Warrant Certificates will be exchangeable on the terms specified in the
Prospectus Supplement for new Warrant Certificates of different denominations,
and Warrants may be exercised at the corporate trust office of the Warrant
Agent or any other office indicated in the Prospectus
12
<PAGE>
Supplement. Prior to the exercise of their Warrants, holders of Warrants will
not have any of the rights of Holders of the Debt Securities purchasable upon
such exercise and will not be entitled to payments of principal of, premium, if
any, or interest, if any, on the Debt Securities purchasable upon such
exercise.
EXERCISE OF WARRANTS
Each Offered Warrant will entitle the holder to purchase such principal
amount of Debt Securities at such exercise price as shall in each case be set
forth in, or be determinable as set forth in, the Prospectus Supplement
relating to the Offered Warrants by payment of such exercise price in full in
the manner specified in the Prospectus Supplement. Offered Warrants may be
exercised at any time up to the close of business on the Expiration Date set
forth in the Prospectus Supplement relating to the Offered Warrants. After the
close of business on the Expiration Date, unexercised Warrants will become
void.
Upon receipt of payment of the exercise price and the Warrant Certificate
properly completed and duly executed at the corporate trust office of the
Warrant Agent or any other office indicated in the Prospectus Supplement, HFC
will, as soon as practicable, forward the Debt Securities purchasable upon such
exercise. If less than all of the Warrants represented by such Warrant
Certificate are exercised, a new Warrant Certificate will be issued for the
remaining amount of Warrants.
PLAN OF DISTRIBUTION
HFC may sell the Securities in any of three ways: (i) through underwriters or
dealers; (ii) directly to a limited number of purchasers or to a single
purchaser; or (iii) through agents. The Prospectus Supplement sets forth the
terms of the offering of the Offered Debt Securities and any Offered Warrants
(collectively, the "Offered Securities"), including the name or names of any
underwriters, dealers or agents, the purchase price of the Offered Securities
and the proceeds to HFC from such sale, any underwriting discounts and other
items constituting underwriters' compensation and any discounts and commissions
allowed or paid to dealers. Any initial public offering price and any discounts
or concessions allowed or reallowed or paid to dealers may be changed from time
to time.
If the Offered Securities are sold through underwriters, the Prospectus
Supplement relating thereto describes the nature of the obligation of the
underwriters to take and pay for the Offered Securities. The Offered Securities
may be offered to the public either through underwriting syndicates represented
by one or more managing underwriters or directly by one or more underwriting
firms acting alone. The underwriter or underwriters with respect to a
particular underwritten offering of Offered Securities are named in the
Prospectus Supplement relating to such offering, and, if an underwriting
syndicate is used, the managing underwriter or underwriters are set forth on
the cover of such Prospectus Supplement. Unless otherwise set forth in the
Prospectus Supplement, the obligations of the underwriters to purchase the
Offered Securities will be subject to certain conditions precedent, and the
underwriters will be obligated to purchase all the Offered Securities if any
are purchased.
The Offered Securities may be sold directly by HFC or through agents
designated by HFC from time to time. Any agent involved in the offer or sale of
the Offered Securities in respect of which this Prospectus is delivered is
named, and any commissions payable by HFC to such agent are set forth, in the
Prospectus Supplement relating thereto.
Underwriters and agents who participate in the distribution of the Offered
Securities may be entitled under agreements which may be entered into with HFC
to indemnification by HFC against certain liabilities, including liabilities
under the Securities Act of 1933, or to contribution with respect to payments
which the underwriters or agents may be required to make in respect thereof.
13
<PAGE>
If so indicated in the Prospectus Supplement, HFC will authorize
underwriters, dealers or other persons acting as HFC's agents to solicit offers
by certain institutions to purchase Offered Securities from HFC pursuant to
contracts providing for payment and delivery on a future date. Institutions
with which such contracts may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and others, but in all cases such institutions must be
approved by HFC. The obligations of any purchaser under any such contract will
not be subject to any conditions except that (i) the purchase of the Offered
Securities shall not at the time of delivery be prohibited under the laws of
the jurisdiction to which such purchaser is subject, and (ii) if the Offered
Securities are also being sold to underwriters, HFC shall have sold to such
underwriters the Offered Securities not sold for delayed delivery. The
underwriters, dealers and such other persons will not have any responsibility
in respect of the validity or performance of such contracts.
There can be no assurance that a secondary market will be created for the
Offered Securities or, if it is created, that it will continue.
14
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. EXHIBITS.
<TABLE>
<S> <C> <C>
12 Statement on the Computation of Ratio of Earnings to Fixed Charges.
(Incorporated herein by reference from Exhibit 12 to HFC's Annual Report
on Form 10-K (File No. 1-75) for the fiscal year ended December 31, 1993
and Exhibit 12 to HFC's Quarterly Report on Form 10-Q (File No. 1-75) for
the quarter ended June 30, 1994).
23(a) Consent of Arthur Andersen & Co., Certified Public Accountants.
25(e) Amendment No. 1 to statement of eligibility and qualification of Bank of
America Illinois, formerly known as Continental Bank, National
Association.
</TABLE>
II-1
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT NO. 1 TO
REGISTRATION STATEMENT ON FORM S-3 TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF PROSPECT HEIGHTS, AND
STATE OF ILLINOIS, ON THE 19TH DAY OF SEPTEMBER, 1994.
HOUSEHOLD FINANCE CORPORATION
*
By___________________________________
R. F. Elliott President and Chief
Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT ON FORM S-3 HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON THE 19TH DAY OF SEPTEMBER,
1994.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C> <C>
*
------------------------------------
(R. F. Elliott) President and Chief Executive Officer,
Director
*
------------------------------------
(D. A. Schoenholz) Vice President--Chief Accounting
Officer, Chief Financial Officer,
Director
*
------------------------------------
(D. C. Clark) Director
</TABLE>
/s/ Patrick D. Schwartz
*By: ___________________________
Patrick D. Schwartz Attorney-
in-fact
THE REGISTRANT REASONABLY BELIEVES THAT THE SECURITY RATING TO BE ASSIGNED TO
THE SECURITIES REGISTERED HEREUNDER WILL MAKE THE SECURITIES "INVESTMENT GRADE
SECURITIES" PURSUANT TO TRANSACTION REQUIREMENT B.2 OF FORM S-3.
II-2
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DOCUMENT DESCRIPTION NUMBER
------- -------------------- ----------
<C> <S> <C>
12 Statement on the Computation of Ratio of Earnings to Fixed Charges.
(Incorporated herein by reference from Exhibit 12 to HFC's Annual Report
on Form 10-K (File No. 1-75) for the fiscal year ended December 31, 1993
and Exhibit 12 to HFC's Quarterly Report on Form 10-Q (File No. 1-75) for
the quarter ended June 30, 1994).
23(a) Consent of Arthur Andersen & Co., Certified Public Accountants.
25(e) Amendment No. 1 to statement of eligibility and qualification of Bank of
America Illinois, formerly known as Continental Bank, National
Association.
</TABLE>
<PAGE>
Exhibit 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
Household Finance Corporation:
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-3 relating to the offering of
up to $2,150,000,000 of Debt Securities and Warrants to Purchase Debt Securities
to be filed with the Securities and Exchange Commission on or about September
19, 1994, of our report dated February 1, 1994, included in Household Finance
Corporation's Form 10-K for the year ended December 31, 1993, and to all
references to our Firm included in this registration statement.
Chicago, Illinois
September 19, 1994
<PAGE>
Exhibit 25(e)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 1 TO
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION
305(B)(2)
----------------
BANK OF AMERICA ILLINOIS
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
ILLINOIS 36-0947896
(JURISDICTION OF INCORPORATION OR (I.R.S. EMPLOYER
ORGANIZATION IF NOT A U.S. NATIONAL IDENTIFICATION NO.)
BANK)
231 SOUTH LASALLE STREET, CHICAGO, 60697
ILLINOIS (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
----------------
HOUSEHOLD FINANCE CORPORATION
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-1239445
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
2700 SANDERS ROAD 60070
PROSPECT HEIGHTS, ILLINOIS (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
DEBT SECURITIES AND WARRANTS TO PURCHASE DEBT SECURITIES
(TITLE OF THE INDENTURE SECURITIES)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois.
Chicago Clearing House Association, 164 W. Jackson Boulevard, Chicago,
Illinois.
Federal Deposit Insurance Corporation, Washington, D.C.
The Board of Governors of the Federal Reserve System, Washington, D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee.
ITEM 3. VOTING SECURITIES OF THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF VOTING SECURITIES OF
THE TRUSTEE:
AS OF SEPTEMBER 1, 1994
<TABLE>
<CAPTION>
COL. B
COL. A AMOUNT
TITLE OF CLASS OUTSTANDING
-------------- -----------
<S> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
ITEM 4. TRUSTEESHIPS UNDER OTHER INDENTURES.
IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH ANY OTHER
SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY OTHER
SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, FURNISH THE FOLLOWING INFORMATION:
(A) TITLE OF THE SECURITIES OUTSTANDING UNDER EACH SUCH OTHER INDENTURE.
Not applicable by virtue of response to Item 13.
(B) A BRIEF STATEMENT OF THE FACTS RELIED UPON AS A BASIS FOR THE CLAIM
THAT NO CONFLICTING INTEREST WITHIN THE MEANING OF SECTION 310(B)(1) OF
THE ACT ARISES AS A RESULT OF THE TRUSTEESHIP UNDER ANY SUCH OTHER
INDENTURE, INCLUDING A STATEMENT AS TO HOW THE INDENTURE SECURITIES
WILL RANK AS COMPARED WITH THE SECURITIES ISSUED UNDER SUCH OTHER
INDENTURE.
Not applicable by virtue of response to Item 13.
ITEM 5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH THE OBLIGOR OR
UNDERWRITERS.
IF THE TRUSTEE OR ANY OF THE DIRECTORS OR EXECUTIVE OFFICERS OF THE TRUSTEE
IS A DIRECTOR, OFFICER, PARTNER, EMPLOYEE, APPOINTEE, OR REPRESENTATIVE OF THE
OBLIGOR OR OF ANY UNDERWRITER FOR THE OBLIGOR, IDENTIFY EACH SUCH PERSON HAVING
ANY SUCH CONNECTION AND STATE THE NATURE OF EACH SUCH CONNECTION.
Not applicable by virtue of response to Item 13.
1
<PAGE>
ITEM 6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF THE TRUSTEE
OWNED BENEFICIALLY BY THE OBLIGOR AND EACH DIRECTOR, PARTNER AND EXECUTIVE
OFFICER OF THE OBLIGOR.
AS OF SEPTEMBER 1, 1994
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
PERCENTAGE
OF VOTING
SECURITIES
REPRESENTED
BY AMOUNT
NAME OF TITLE OF AMOUNT OWNED GIVEN
OWNER CLASS BENEFICIALLY IN COL. C
------- -------- ------------ -----------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
ITEM 7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR THEIR
OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF THE TRUSTEE
OWNED BENEFICIALLY BY EACH UNDERWRITER FOR THE OBLIGOR AND EACH DIRECTOR,
PARTNER, AND EXECUTIVE OFFICER OF EACH SUCH UNDERWRITER.
AS OF SEPTEMBER 1, 1994
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
PERCENTAGE
OF VOTING
SECURITIES
REPRESENTED
BY AMOUNT
NAME OF TITLE OF AMOUNT OWNED GIVEN
OWNER CLASS BENEFICIALLY IN COL. C
------- -------- ------------ -----------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
ITEM 8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO SECURITIES OF THE OBLIGOR OWNED
BENEFICIALLY OR HELD AS COLLATERAL SECURITY FOR OBLIGATIONS IN DEFAULT BY THE
TRUSTEE:
AS OF SEPTEMBER 1, 1994
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
WHETHER
THE
SECURITIES
ARE VOTING
OR AMOUNT OWNED BENEFICIALLY OR PERCENT OF CLASS
TITLE OF NONVOTING HELD AS COLLATERAL SECURITY REPRESENTED BY AMOUNT
CLASS SECURITIES FOR OBLIGATIONS IN DEFAULT GIVEN IN COL. C
-------- ---------- ---------------------------- ---------------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
2
<PAGE>
ITEM 9. SECURITIES OF UNDERWRITERS OWNED OR HELD BY THE TRUSTEE.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT ANY SECURITIES OF AN UNDERWRITER FOR THE OBLIGOR,
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OF SUCH
UNDERWRITER ANY OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE.
AS OF SEPTEMBER 1, 1994
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR HELD PERCENT OF CLASS
NAME OF ISSUER AS COLLATERAL SECURITY REPRESENTED BY
AND TITLE OF AMOUNT FOR OBLIGATIONS IN AMOUNT GIVEN IN
CLASS OUTSTANDING DEFAULT BY TRUSTEE COL. C
-------------- ----------- ---------------------- ----------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
ITEM 10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF CERTAIN
AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT VOTING SECURITIES OF A PERSON WHO, TO THE KNOWLEDGE OF
THE TRUSTEE (1) OWNS 10 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR
OR (2) IS AN AFFILIATE, OTHER THAN A SUBSIDIARY, OF THE OBLIGOR, FURNISH THE
FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF SUCH PERSON.
AS OF SEPTEMBER 1, 1994
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR HELD PERCENT OF CLASS
NAME OF ISSUER AS COLLATERAL SECURITY REPRESENTED BY
AND TITLE OF AMOUNT FOR OBLIGATIONS IN AMOUNT GIVEN IN
CLASS OUTSTANDING DEFAULT BY TRUSTEE COL. C
-------------- ----------- ---------------------- ----------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
ITEM 11. OWNERSHIP OF HOLDINGS BY THE TRUSTEE OF ANY SECURITIES OF A PERSON
OWNING 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT ANY SECURITIES OF A PERSON WHO, TO THE KNOWLEDGE OF THE
TRUSTEE, OWNS 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR,
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OF SUCH PERSON
ANY OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE.
AS OF SEPTEMBER 1, 1994
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR HELD PERCENT OF CLASS
NAME OF ISSUER AS COLLATERAL SECURITY REPRESENTED BY
AND TITLE OF AMOUNT FOR OBLIGATIONS IN AMOUNT GIVEN IN
CLASS OUTSTANDING DEFAULT BY TRUSTEE COL. C
-------------- ----------- ---------------------- ----------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
3
<PAGE>
ITEM 12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE.
EXCEPT AS NOTED IN THE INSTRUCTIONS, IF THE OBLIGOR IS INDEBTED TO THE
TRUSTEE, FURNISH THE FOLLOWING INFORMATION:
AS OF SEPTEMBER 1, 1994
<TABLE>
<CAPTION>
COL. A COL. B COL. C
NATURE OF INDEBTEDNESS AMOUNT OUTSTANDING DATE DUE
- ---------------------- ------------------ --------
<S> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
ITEM 13. DEFAULTS BY THE OBLIGOR.
(A) STATE WHETHER THERE IS OR HAS BEEN A DEFAULT WITH RESPECT TO THE
SECURITIES UNDER THIS INDENTURE. EXPLAIN THE NATURE OF ANY SUCH DEFAULT.
There is not nor has there been a default with respect to the
securities under this indenture.
(B) IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH ANY OTHER
SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY OTHER
SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, OR IS TRUSTEE FOR MORE THAN ONE
OUTSTANDING SERIES OF SECURITIES UNDER THE INDENTURE, STATE WHETHER THERE HAS
BEEN A DEFAULT UNDER ANY SUCH INDENTURE OR SERIES, IDENTIFY THE INDENTURE OR
SERIES AFFECTED, AND EXPLAIN THE NATURE OF ANY SUCH DEFAULT.
There is not nor has there been a default with respect to the
securities under this indenture. The trustee is a trustee under other
indentures under which securities issued by the obligor are
outstanding. There is not nor has there been a default with respect to
the securities under such other indentures.
ITEM 14. AFFILIATIONS WITH THE UNDERWRITERS.
IF ANY UNDERWRITER IS AN AFFILIATE OF THE TRUSTEES, DESCRIBE EACH SUCH
AFFILIATION.
Not applicable by virtue of response to Item 13.
ITEM 15. FOREIGN TRUSTEE.
IDENTIFY THE ORDER OR RULE PURSUANT TO WHICH THE FOREIGN TRUSTEE IS
AUTHORIZED TO ACT AS SOLE TRUSTEE UNDER INDENTURES QUALIFIED OR TO BE QUALIFIED
UNDER THE ACT.
Not applicable.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the certification by the Illinois Commissioner of Banks and
Trust Companies of Bank of America Illinois' Charter and Certificate of
Conversion, incorporated herein by reference to Exhibit 1 to T-1;
Registration No. 33-81660.
2. A copy of the certification by the Illinois Commissioner of Banks and
Trust Companies of Bank of America Illinois' Charter and Certificate of
Conversion, incorporated herein by reference to Exhibit 1 to T-1;
Registration No. 33-81660, includes the authority of the trustee to
commence business.
3. A copy of the certificate of authority for Bank of America Illinois to
engage in trust activities issued by the Illinois Commissioner of Banks and
Trust Companies, incorporated herein by reference to Exhibit 3 to T-1;
Registration No. 33-81660.
4. A copy of the existing By-laws of Bank of America Illinois as now in
effect, filed herewith.
5. Not applicable.
4
<PAGE>
6. The consent of the trustee required by Section 321(b) of the Trust
Indenture Act of 1939, incorporated herein by reference to Exhibit 6 to T-
1; Registration No. 33-81660.
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority, filed herewith.
8. Not applicable.
9. Not applicable.
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE TRUST INDENTURE ACT OF 1939, THE TRUSTEE,
BANK OF AMERICA ILLINOIS, AN ILLINOIS BANKING CORPORATION ORGANIZED AND
EXISTING UNDER THE LAWS OF THE STATE OF ILLINOIS, HAS DULY CAUSED THIS
STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, ALL IN THE CITY OF CHICAGO, AND STATE OF ILLINOIS,
AS OF THE 1ST DAY OF SEPTEMBER, 1994.
Bank of America Illinois
/s/ Greg Jordan
By __________________________________
Greg Jordan
Vice President
5
<PAGE>
EXHIBIT 4
BANK OF AMERICA ILLINOIS
BY-LAWS
AS LAST AMENDED ON AUGUST 31, 1994
ARTICLE I
MEETINGS OF STOCKHOLDERS
Section 1. Annual Meetings; Special Meetings: The annual meeting of the
stockholders of the Bank for the election of the Board of Directors shall be
held at its main banking premises, or at such other place duly authorized by
the Board of Directors, on such date and at such time in each year as may be
designated from time to time by the Board of Directors. A special meeting of
the stockholders may be called at any time by the Board of Directors of the
Bank or by any stockholder or stockholders owning not less than 25% of the
outstanding capital stock of the Bank, and otherwise as may be provided in the
Illinois Banking Act and these By-laws. Any such special meeting shall be held
at such place, date and time as may be designated in the notice of special
meeting.
Section 2. Notice of Meeting: Written or printed notice stating the place,
day and hour of the meeting, and in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less than 10
nor more than 40 days before the date of the meeting either personally or by
mail, by or at the direction of the Chairman, the President or the Secretary,
or the officer or persons calling the meeting, to each stockholder of record
entitled to vote at the meeting. If mailed, the notice shall be deemed to be
delivered when deposited in the United States mail with postage thereon prepaid
addressed to the stockholder at his address as it appears on the records of the
Bank.
When a notice is required to be given to stockholders under the Illinois
Banking Act or by the Charter of the Bank or these By-laws, a waiver thereof in
writing, signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be deemed equivalent thereto.
Section 3. Organization: The Board of Directors shall appoint a Chairman and
a Secretary at each meeting of stockholders.
Section 4. Record Date: For the purpose of determining stockholders entitled
to notice of or to vote at any meeting of stockholders, the Board of Directors
may fix in advance a date as the record date for any determination of
stockholders, the date to be not more than 40 days and not less than 10 days
prior to the date on which the particular action requiring the determination of
stockholders is to be taken. If no record date is fixed for the determination
of stockholders entitled to notice of or to vote at a meeting of stockholders,
the date on which notice of a meeting is mailed shall be the record date for
the determination of stockholders.
Section 5. Voting: Each outstanding share of capital stock shall be entitled
to one vote on each matter submitted to a vote at a meeting of stockholders.
The stockholders of the Bank shall not have cumulative voting rights in the
election of directors or in any other circumstances.
A stockholder entitled to vote at a meeting of stockholders may vote either
in person or by proxy executed in writing by the stockholder or by his duly
authorized attorney-in-fact. No proxy shall be valid after 11 months from the
date of its execution, unless otherwise provided in the proxy.
A record shall be made of the stockholders represented in person and by proxy
after which the stockholders shall proceed to the election of directors and to
the transaction of any other business that may properly come before the
meeting. A record of the stockholders' meeting, giving names of the
stockholders present and the number of shares of capital stock held by each,
the names of the stockholders represented by the proxy and the names of the
proxies, shall be entered in the records of the meeting. This record shall show
<PAGE>
the names of the stockholders and the number of shares voted for each
resolution or voted for each candidate for director. The Chairman, the
President or the Secretary shall forward to the Illinois Commissioner of Banks
and Trust Companies (the "Commissioner") such information and reports with
respect to any meeting of stockholders as the Commissioner shall require.
Section 6. Quorum; Adjournment: A majority of the outstanding shares
represented in person or by proxy shall constitute a quorum at a meeting of
stockholders. In the absence of a quorum, a meeting may be adjourned from time
to time without notice to the stockholders.
Section 7. Consents in Lieu of Voting: Whenever the vote of the stockholders
at a meeting is required or permitted to be taken in connection with any
corporate action by any section of the Illinois Banking Act, the meeting and
vote of stockholders may be dispensed with if all of the stockholders who would
have been entitled to vote upon the action if such meeting were held shall
consent in writing to such corporate action being taken. In the event that the
action which is consented to is such as would have required the filing of a
certificate under any of the other sections of the Illinois Banking Act, if
such action had been voted upon by the stockholders at a meeting thereof, the
certificate filed under such other section shall state that written consent has
been given hereunder, in lieu of stating that the stockholders have voted upon
the corporate action in question, if such last mentioned statement is required
thereby.
Section 8. Preemptive Rights: Except as shall be required by the Illinois
Banking Act, no holder of shares of any class of stock of the Bank shall have
any preemptive or other right of subscription to any shares, or to any
obligations convertible into any shares, of any class of stock of the Bank,
whether now or hereafter authorized, but shall have only such right, if any, of
subscription to any such shares as the Board of Directors, in its discretion,
may from time to time determine and at such price as the Board of Directors may
from time to time fix.
ARTICLE II
DIRECTORS
Section 1. Board of Directors: The business and affairs of the Bank shall be
managed by its Board of Directors.
Section 2. Number and Vacancies: The number of directors, not fewer than five
nor more than 25, may be fixed from time to time by resolution of the
stockholders of the Bank at any meeting of the stockholders called for the
purpose of electing directors or changing the number thereof by the affirmative
vote of at least two-thirds of the outstanding stock entitled to vote at the
meeting, and the number so fixed shall be the Board of Directors regardless of
vacancies until the number of directors is thereafter changed by similar
action. To the full extent provided by the Illinois Banking Act, any vacancy or
vacancies in the Board of Directors arising between stockholders' meeting may
be filled by resolution of the Board of Directors; provided, however, that, to
the extent the Illinois Banking Act so requires, at no time may the number of
directors selected to fill a vacancy in this manner during any interim period
between stockholders' meetings exceed 33 1/3% of the total membership of the
Board of Directors.
Section 3. Regular Meetings: The Board of Directors shall hold regular
meetings of the Board of Directors as provided by the Illinois Banking Act, but
in no event less than four times per year, at such time and place as the Board
of Directors may from time to time determine, without call and without notice;
provided, however, that by action of the Board of Directors at any meeting, or
with the consent of the majority of the members of the Board of Directors at
the time in office, any regular meeting may be omitted so long as regular
meetings of the Board of Directors are held at least four times per year.
2
<PAGE>
Section 4. Special Meetings: Special meetings of the Board of Directors may
be called at any time by the Chairman, or in the event of his absence or
disability, by the President, or in the event of their absence or disability,
by the Secretary, and shall be called by the Secretary upon the written request
of a majority of the number of directors at the time in office. Special
meetings of the Board of Directors shall be held at such place and time as may
be fixed in the call for such meeting. Notice of each special meeting of
directors shall be given by the Secretary to each director by personal delivery
or telephone, not less than twenty-four hours prior to such meeting, or by mail
or telegram addressed to him at his usual business address, at least five days
prior to the meeting in case of notice by mail and at least 24 hours prior to
the meeting in case of notice by telegram. If mailed or wired, such notice
shall be deemed given to any director when directed to such director at his
address as it appears on the records of the Bank and when deposited in the
United States mail, postage prepaid, or when delivered to an appropriate
telegraph office, charges prepaid, as the case may be. The notice of any
special meeting of the Board of Directors need not specify any purpose or
purposes for such meeting. When a notice is required to be given to directors
under the Illinois Banking Act or by the Charter of the Bank or these By-laws,
a waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
A special meeting of the Board of Directors may also be held upon call by the
Commissioner or by a bank examiner appointed under the provisions of the
Illinois Banking Act upon not less than 12 hours notice of the meeting by
personal service of the notice or by mailing the notice to each of the
directors at his residence as shown by the books of the Bank.
Section 5. Quorum; Action of Directors: A majority of the Board of Directors
shall constitute a quorum for the transaction of business at any directors'
meeting, unless the act of a greater number is required by the Charter of the
Bank or these By-laws, but a lesser number may adjourn any meeting from time to
time for want of a quorum and the meeting may be held as adjourned without
notice. The act of a majority of the directors present at a meeting at which a
quorum is present shall be the act of the Board of Directors, unless the act of
a greater number is required by the Charter of the Bank or these By-laws.
Section 6. Action by Unanimous Consent: Whenever the vote of the directors at
a meeting is required or permitted to be taken in connection with any corporate
action by any section of the Illinois Banking Act, the meeting and vote of
directors may be dispensed with if all of the directors who would have been
entitled to vote upon the action if such meeting were held shall consent in
writing to such corporate action being taken. In the event that the action
which is consented to is such as would have required the filing of a
certificate under any of the other sections of the Illinois Banking Act if such
action had been voted upon by the directors at a meeting thereof, the
certificate filed under such other section shall state that written consent has
been given hereunder in lieu of stating that the directors have voted upon the
corporate action in question, if such last mentioned statement is required
thereby.
Section 7. Conference Telephone: Members of the Board of Directors or any
committee thereof may participate in a meeting of such Board or committee by
means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and
participation in a meeting in such manner shall constitute presence in person
at such meeting.
Section 8. Compensation of Directors: Each director, as such, shall be
entitled to receive reimbursement for his reasonable expenses incurred in
attending meetings of the Board of Directors or any committee thereof or
otherwise in connection with his attention to the affairs of the Bank. In
addition, each director, who is not at the time a regularly compensated officer
or employee of the Bank or any of its subsidiaries, shall be entitled to such
fee for his services as a director (and if a member of any committee of the
Board of Directors, such fee for his services as such member) as may be fixed
from time to time by the affirmative vote of a majority of the Board of
Directors. Such fees may be fixed both for meetings attended and on an annual
basis, or either thereof, and may be payable currently or deferred.
3
<PAGE>
Section 9. Directors shall not be required to own capital stock of the Bank.
ARTICLE III
COMMITTEES OF THE BOARD
Section 1. The Board of Directors may elect such committees, each to consist
of one or more directors, as it may from time to time determine, which
committees shall serve for such term and shall have and may exercise such
duties, functions and powers as the Board of Directors may from time to time
prescribe. All actions taken by any such committee shall be reported to the
Board of Directors at such times as the Board of Directors shall direct. In
addition to the foregoing, the Chairman, or in his absence, the President, may
from time to time designate a member or members of the Board of Directors as a
special ad hoc committee to consult with him with respect to such matters as he
may specify, each such committee to function in an advisory capacity only.
ARTICLE IV
OFFICERS
Section 1. Officers: The officers of the Bank shall consist of a Chairman, a
President, a Secretary and such officers (including one or more Vice Chairman
and a Cashier) as may be required from time to time and as may be appointed by
the Board of Directors.
Section 2. Authority and Duties of Officers: The Chairman shall be the chief
executive officer of the Bank and shall have general supervision and direction
of the business and affairs of the Bank. He shall preside at all meetings of
the Board of Directors. He may be a member of any or all standing and special
committees of the Board of Directors and shall have authority to call meetings
thereof. In the event of the absence or disability of the Chairman, the
President shall have the powers and duties of the Chairman and is designated to
act as and perform the duties of the Chairman. In the event of the absence or
disability of the Chairman and the President, one of the Vice Chairmen, if any
(to be designated by the Chairman), shall have the powers and duties of the
Chairman.
The President shall have the powers and duties pertaining by law or
regulation to the office of President. In the event of the absence or
disability of the President or in the event of a vacancy in that office, the
Chairman shall have the powers and duties pertaining by law or regulation to
the office of President.
The Secretary shall, except as otherwise determined by the Board of
Directors, attend and record all of the proceedings of all meetings of
stockholders and the Board of Directors, and unless otherwise directed by any
such committee, of all committees in the books of the Bank kept for that
purpose; shall see that all notices are given and records and reports properly
kept and filed by the Bank as required by these By-Laws, or as required by law;
shall have charge of and control over the records of the Bank and the
certificate books, transfer books and stock ledgers, and such other books and
papers as the Board of Directors may direct; and shall be the custodian of the
corporate seal of the Bank and see that it is affixed to all documents to be
executed on behalf of the Bank under its seal. In addition to such powers and
duties as the Secretary may have from time to time, the Secretary shall have
the powers and duties pertaining by law or regulation to the office of Cashier.
The duties and authorities of the officers of the Bank shall otherwise be
those usually pertaining to their respective offices, or as may be designated
by the Chairman, subject to the supervision and direction of the Board of
Directors.
4
<PAGE>
Section 3. Appointment: Unless otherwise determined by the Board of
Directors, the Chairman shall be authorized to appoint all officers except a
President, one or more Vice Chairmen, any other officer classified from time to
time as an executive officer by resolution of the Board of Directors, or the
officers respectively serving as the principal internal auditor or as the chief
credit, human resources, or legal officer of the Bank, irrespective of title
designation.
Any officer agent or employee elected or appointed by the Board of Directors
may be removed and replaced only by the Board of Directors, and may be removed,
with or without cause, at any time by a majority vote of the Board of Directors
at the time in office.
Any officer, agent or employee who is not elected or appointed by the Board
of Directors shall hold office at the discretion of the Chairman or of the
officer appointing him. The Chairman or the President may at any time in his
discretion suspend, subject to the approval of the Board of Directors at its
next meeting, the authority of any other officer or officers of the Bank, other
than the Chairman or the President.
Section 4. Compensation: The annual base salary, and any bonus or incentive
award granted pursuant to a plan (exclusive of any stock option plan)
maintained by the Bank's parent, Continental Bank Corporation, or any of its
direct or indirect subsidiaries, of the Chairman, the President, any Vice
Chairman, any other officer classified from time to time as an executive
officer pursuant to Section 3 of this Article IV, such other officers
designated in writing from time to time by the Chairman of the Human Resources
Committee of the Board of Directors of Continental Bank Corporation pursuant to
Section 3 of this Article IV, and any other officer or employee whose annual
base salary equals $200,000 or more (except for any person paid in foreign
currency and excluded from that category by the Human Resources Committee of
the Board of Directors of Continental Bank Corporation) shall be fixed, or
made, as the case may be, by the Board of Directors. The annual base salary and
any bonus or incentive award for other officers and employees of the Bank shall
be fixed by the Chairman unless otherwise required by resolution of the Board
of Directors or provision of the relevant plan. No officer shall be precluded
from receiving such salary by reason of the fact that he is also a director of
the Bank. Any award granted pursuant to a stock option plan maintained by
Continental Bank Corporation and intended to comply with the requirements of
Securities and Exchange Commission Rule 16b-3 to an officer or employee, who at
the time the award is made, is subject to Section 16(a) or Section 16(b) of the
Securities Exchange Act of 1934 or to any officer or employee whose annual base
salary must be fixed by the Board of Directors shall be granted solely by the
Human Resources Committee of the Board of Directors of Continental Bank
Corporation.
Section 5. All officers and employees shall be bonded for the honest and
faithful discharge of their duties.
ARTICLE V
INDEMNIFICATION
Section 1. General: The Bank shall indemnify, in accordance with and to the
full extent permitted by the Illinois Banking Act as the same exists or may
hereafter be amended, any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the Bank) by reason of the fact that he is
or was a director, officer, employee or agent of the Bank, or who is or was
serving at the request of the Bank, as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Bank,
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
5
<PAGE>
contendre or its equivalent, shall not, of itself, create a presumption that the
person did not act in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the Bank and with respect to any
criminal action or proceeding, that he had reasonable cause to believe that his
conduct was unlawful.
Section 2. Action or Suit By or in the Right of the Bank: The Bank shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of
the Bank to procure a judgment in its favor by reason of the fact that he is or
was a director, officer, employee or agent of the Bank, or is or was serving at
the request of the Bank as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit, if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Bank, provided that no indemnification shall be made
with respect to any claim, issue or matter as to which such person has been
adjudged to have been liable to the Bank unless and only to the extent that the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability, but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses as the court shall deem proper.
Section 3. Expenses: To the extent that a director, officer, employee or
agent of the Bank has been successful, on the merits or otherwise, in defense
of any action, suit or proceeding referred to in Sections 1 and 2 of this
Article V, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
Section 4. Authorization: Any indemnification under Sections 1 and 2 of this
Article V (unless ordered by a court) shall be made by the Bank only as
authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances because
he has met the applicable standard of conduct set forth in Sections 1 and 2.
Such determination shall be made (i) by the Board of Directors by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if
obtainable, a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (iii) by the stockholders.
Section 5. Advancement of Expenses: Expenses (including attorneys' fees)
incurred by an officer or director in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
Bank in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such director or officer to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the Bank as authorized in this Article V. Such expenses
(including attorneys' fees) incurred by other employees and agents may be so
paid upon such terms and conditions, if any, as the Board of Directors deems
appropriate.
Section 6. Other Rights: The indemnification and advancement of expenses
provided by or granted under the other sections of this Article V shall not be
deemed exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under the Charter of the Bank, any by-
law, agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in his official capacity and as to action in another capacity
while holding such office.
Section 7. Insurance: The Bank may purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee or agent of the Bank,
or who is or was serving at the request of the Bank as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against any liability asserted against him and incurred by
him in any such capacity, or arising out of his status as such, whether or not
the Bank would have the power to indemnify him against such liability under the
provisions of this Article V. Insurance purchased by the Bank in accordance
with this Article V may, but need not (i) be for the benefit of all directors,
officers, employees and agents of the Bank and (ii) provide also for
indemnification or reimbursement to the Bank of and for payments and
obligations to make payments by the Bank to any of its directors, officers,
6
<PAGE>
employees or agents to the extent such payments or obligations to make payments
are permitted under Sections 1 through 6 of this Article V.
Section 8. The Bank: For purposes of this Article V, references to the "Bank"
shall include, in addition to the surviving corporation, any merging
corporation (including a corporation having merged with a merging corporation)
absorbed in a merger which, if its separate existence had continued, would have
had the power and authority to indemnify its directors, officers, employees or
agents, so that any person who was or is a director, officer, employee or agent
of such merging corporation, or is or was serving at the request of such
merging corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall stand
in the same position under the provisions of this Article V with respect to the
surviving corporation as he would have with respect to such merging corporation
if its separate existence had continued.
Section 9. Definitions: For purposes of this Article V, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on a person with respect to an employee
benefit plan; and references to "serving at the request of the Bank" shall
include any service as a director, officer, employee or agent of the Bank which
imposes duties on, or involves services by, such director, officer, employee or
agent with respect to an employee benefit plan, its participants or
beneficiaries. A person who acted in good faith and in a manner he reasonably
believed to be in the interest of the participants and beneficiaries of an
employee benefit plan shall be deemed to have acted in a manner "not opposed to
the best interests of the Bank" as referred to in this Article V.
Section 10. Continuation: The indemnification and advancement of expenses
provided by or granted under this Article V shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of that person.
Section 11. Contract: All rights to indemnification and advancement of
expenses provided by this Article V shall be deemed to be a contract between
the Bank and each person referred to herein. Any repeal or modification of this
Article V or any repeal or modification of relevant provisions of the Illinois
Banking Act, the Illinois Business Corporation Act or any other applicable law
shall not in any way diminish any rights to indemnification or advancement of
expenses with respect to any state of facts then or previously existing or any
action, suit or proceeding previously or thereafter brought or threatened based
in whole or in part on such state of facts.
ARTICLE VI
SHARES AND CERTIFICATES
Section 1. Certificates: The shares of capital stock of the Bank shall be
represented by certificates signed (manual or facsimile) by the Chairman, the
President or a Vice Chairman and signed (manual or facsimile) by the Cashier,
the Secretary or any Assistant Secretary, and shall bear the seal (impression
or facsimile) of the Bank. Such shares shall be transferable only on the books
of the Bank, and no transfer shall be made or new certificate issued except on
the surrender of the certificate or certificates previously issued therefor, or
on proof of their loss and the furnishing of indemnity satisfactory to the
Chairman, the President or any other officer of the Bank designated in writing
by the Chairman.
Section 2. Record Date: For the purpose of determining stockholders entitled
to notice of or to vote at any meeting of stockholders, or stockholders
entitled to receive payment of any dividend, or in order to make a
determination of stockholders for any other proper purpose, the Board of
Directors may fix in advance a date as the record date for any determination of
stockholders, the date in any case to be not more than 40 days, and in case of
a meeting of stockholders, not less than 10 days prior to the date on which the
particular action, requiring the determination of stockholders, is to be taken.
If no record date is fixed for the determination of stockholders entitled to
7
<PAGE>
notice of or to vote at a meeting of stockholders, or stockholders entitled to
receive payment of a dividend, the date on which notice of a meeting is mailed
or the date on which the resolution of the Board of Directors declaring the
dividend is adopted, as the case may be, shall be the record date for the
determination of stockholders.
ARTICLE VII
FISCAL YEAR--BANKING HOURS--CORPORATE SEAL
Section 1. The fiscal year of the Bank shall be the calendar year.
On such days as the banking house of the Bank shall be open for business, the
hours during which it shall be open may be fixed from time to time by the
Chairman, or in his absence or disability, by the officer authorized to act as
and perform the duties of the Chairman, pursuant to Section 2 of Article IV of
these By-laws, subject to the approval of the Board of Directors.
Section 2. The seal of the Bank may be affixed to any proper document by the
Secretary, any Assistant Secretary or by any person designated in writing by
the Secretary or any Assistant Secretary, and any of such persons may certify
any action of the Bank.
ARTICLE VIII
AMENDMENTS
Section 1. These By-laws may be amended, altered, changed, added to or
repealed, and others may be adopted in their place at any regular or special
meeting of the Board of Directors at which a quorum is present by a majority
vote of the directors present at such meeting.
8
<PAGE>
EXHIBIT 7
(OFFICIAL PUBLICATION)
CONSOLIDATED REPORT OF CONDITION OF
CONTINENTAL BANK
OF CHICAGO, ILLINOIS
AND FOREIGN AND DOMESTIC SUBSIDIARIES
A member of the Federal Reserve System, at the close of business on June 30,
1994, 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>
IN MILLIONS
ASSETS
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.................... $ 1,833
Interest-bearing balances............................................. 1,518
Securities
Held-to-maturity securities........................................... 454
Available-for-sale securities......................................... 1,161
Federal funds sold and securities purchased under agreements to resell
in domestic offices of the bank and of its Edge and Agreement
subsidiaries, and in IBFs:
Federal funds sold.................................................... 429
Securities purchased under agreements to resell....................... 704
Loans and lease financing receivables:
Loans and leases, net of unearned income.................... $ 12,009
Less: Allowance for loan and lease losses................... 312
Less: Allocated transfer risk reserve....................... 0
Loans and leases, net of unearned income, allowance, and reserve...... 11,697
Assets held in trading accounts........................................ 1,539
Premises and fixed assets (including capitalized leases)............... 236
Other real estate owned................................................ 191
Investments in unconsolidated subsidiaries and associated companies.... 0
Customers' liability to this bank on acceptances outstanding........... 92
Intangible assets...................................................... 0
Other assets........................................................... 1,455
-------
Total Assets........................................................ $21,309
=======
LIABILITIES
Deposits:
In domestic offices................................................... $ 8,771
Noninterest-bearing......................................... $ 2,689
Interest-bearing............................................ 6,082
In foreign offices, Edge and Agreement subsidiaries, and IBFs.......... 4,408
Noninterest-bearing......................................... $ 61
Interest-bearing............................................ 4,347
Federal funds purchased and securities sold under agreements to
repurchase in domestic offices of the bank and of its Edge and
Agreement subsidiaries, and in IBFs:
Federal funds purchased............................................... 475
Securities sold under agreements to repurchase........................ 224
Demand notes issued to the U.S. Treasury............................... 1,300
Trading liabilities.................................................... 984
Other borrowed money:
With original maturity of one year or less............................ 1,665
With original maturity of more than one year.......................... 38
Mortgage indebtedness and obligations under capitalized leases......... 0
Bank's liability on acceptances executed and outstanding............... 92
Subordinated notes and debentures...................................... 398
Other liabilities...................................................... 840
-------
Total Liabilities................................................... 19,195
-------
Limited-life preferred stock and related surplus....................... 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus.......................... 0
Common stock........................................................... 685
Surplus................................................................ 827
Undivided profits and capital reserves................................. 630
Net unrealized holding gains (losses) on available-for-sale
securities........................................................... (23)
Cumulative foreign currency translation adjustments.................... (5)
-------
Total equity capital................................................ 2,114
-------
Total liabilities, limited-life preferred stock, and equity capital. $21,309
=======
</TABLE>
I, John J. Higgins, Controller 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.
John J. Higgins
-------------------------------------
Controller
