<PAGE>
As filed with the Securities and Exchange Commission on March 24, 2000
Registration No. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
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
incorporation or organization) Number)
2700 Sanders Road
Prospect Heights, Illinois 60070
(847) 564-5000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Joan S. Vander Linde
Senior Counsel
Household International, Inc.
2700 Sanders Road
Prospect Heights, Illinois 60070
(847) 564-7958
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------
With a copy to:
(Underwriters'/Agents' Counsel)
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]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
---------------
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Proposed
Proposed Maximum
Maximum Aggregate Amount of
Title of Each Class of Amount to be Offering Price Offering Registration
Securities to be Registered Registered(1) Per Unit(2) Price(2) Fee
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities and Warrants to Purchase
Debt Securities........................... $10,000,000,000 100% $10,000,000,000 $2,640,000
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
included in this Registration Statement also relates to $1,261,000,000 of
securities previously registered pursuant to Form S-3 (Registration No.
333-72453), as to which this Registration Statement constitutes a Post-
Effective Amendment.
(2) Estimated solely for the purpose of computing the registration fee. Any
offering of Debt Securities or Warrants denominated in any foreign
currency or foreign currency units will be treated as the equivalent in
U.S. dollars based on the exchange rate applicable to the purchase of such
Debt Securities or Warrants from the Registrant.
---------------
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.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell the Securities until the Registration Statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MARCH 24, 2000
Household Finance Corporation
$11,261,000,000
Debt Securities
and
Warrants to Purchase Debt Securities
-----------
Household Finance Corporation may sell at one or more times up to
$11,261,000,000 of its debt securities and warrants to purchase debt
securities. We will provide specific terms of the securities which we may offer
at any time in supplements to this prospectus. You should read this prospectus
and any supplement carefully before you invest.
-----------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or
determined if this prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
-----------
The date of this Prospectus is , 2000
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission ("SEC") utilizing a "shelf" registration
process. Under this process, we may sell any combination of the securities
described in this prospectus in one or more offerings up to a total dollar
amount of $11,261,000,000. This prospectus provides you with a general
description of the securities we may offer. Each time we offer to sell
securities, we will provide a supplement to this prospectus that will contain
specific information about the terms of that offering. The prospectus
supplement may also add, update or change information contained in this
prospectus. You should read both this prospectus and any prospectus supplement
together with the additional information described under the heading WHERE YOU
CAN FIND MORE INFORMATION. In this prospectus, "us," "we," "Company" and "HFC"
refer to Household Finance Corporation.
WHERE YOU CAN FIND MORE INFORMATION
Household Finance Corporation files annual, quarterly and special reports
and other information with the SEC. You may read and copy any document filed by
HFC at the SEC's public reference rooms in Washington, D.C., New York, New York
and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. SEC filings are also available to
the public on the SEC's Internet web site at http:\\www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file with
it, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be part of this prospectus, and information that we file with the SEC later
will automatically update and supersede this information. We incorporate by
reference the HFC documents listed below and any future filings made by HFC
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended, until we sell all of the securities.
. Annual Report on Form 10-K for the year ended December 31, 1999; and
. Current Report on Form 8-K dated February 10, 2000.
You may request a copy of these filings, at no cost, by writing or
telephoning us at: Household Finance Corporation, Office of the Secretary,
Prospect Heights, Illinois 60070, Telephone (847) 564-5000.
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not
authorized anyone else to provide you with different or additional information.
You should not assume that the information in this prospectus or any supplement
is accurate as of any date other than the date on the front of those documents.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain of the matters discussed under the caption "Household Finance
Corporation" and elsewhere in this prospectus or in the information
incorporated by reference herein may constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Such information may involve known and unknown risks, uncertainties and other
factors that may cause the actual results, performance or achievements of HFC
to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements.
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 (847) 564-5000). HFC is a
subsidiary of Household International, Inc. ("Household International").
HFC and its subsidiaries offer a diversified range of financial services.
The principal product of our consumer financial services business is the making
of cash loans, including home equity loans secured by first and second
mortgages, sales finance loans and other unsecured loans directly to consumers
in the United States. Loans are made through branch lending offices under the
brands "HFC" and "Beneficial", and through direct mail, telemarketing and the
Internet. We also acquire portfolios of open-end and closed-end, secured and
unsecured loans.
We offer both MasterCard* and VISA* credit cards to residents throughout the
United States primarily through strategic affinity relationships. We also
purchase and service revolving charge card accounts originated by merchants.
These accounts result from consumer purchases of goods and services from the
originating merchant. We also directly originate closed-end sales contracts.
A subsidiary of HFC also makes loans to non-prime borrowers for the purchase
of new and used vehicles. The loans are secured by the vehicles, which are
generally sold through franchised dealers. We also make tax refund anticipation
loans. These loans are marketed to consumers at H&R Block offices and offices
of other tax preparation services throughout the U.S.
Subsidiaries of HFC primarily service the loans made by HFC and its
subsidiaries, including loans made by the credit card operations.
Where applicable laws permit, we offer credit life and credit accident,
health and disability insurance to our customers. Such insurance is generally
written directly by, or reinsured with, one of our insurance affiliates.
USE OF PROCEEDS
Unless otherwise indicated in the prospectus supplement, we will apply the
net proceeds from the sale of the securities to our general funds to be used in
our financial services business, including the funding of investments in, or
extensions of credit to, our affiliates. Pending such applications, the net
proceeds will be used initially to reduce our outstanding commercial paper. The
proceeds of such commercial paper are used in connection with our financial
services business.
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>
Year Ended December 31,
------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges..................... 1.72 1.32 1.61 1.57 1.41
</TABLE>
For purposes of calculating the ratio, earnings consist of net income to
which has been added income taxes and fixed charges. Fixed charges consist of
interest on all indebtedness and one-third of rental expense (approximate
portion representing interest). The December 31, 1998 ratio has been negatively
impacted by one-time merger and integration related costs associated with the
merger of Household International and Beneficial Corporation. Excluding the
merger and integration related costs of $751 million after-tax, the December
31, 1998 ratio would have been 1.81.
- --------
* MasterCard and VISA are registered trademarks of MasterCard International
Incorporated and VISA USA, Inc., respectively.
3
<PAGE>
DESCRIPTION OF DEBT SECURITIES
HFC may offer, from time to time, one or more series of unsecured senior
notes ("Debt Securities") and warrants ("Warrants") to purchase Debt Securities
(the Debt Securities and Warrants being hereafter collectively called the
"Securities"). The Securities offered pursuant to this prospectus may have an
aggregate offering price up to U.S. $11,261,000,000, or the equivalent thereof
if any of the Securities are denominated in a foreign currency or a foreign
currency unit.
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities to which any supplement to this
prospectus ("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 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. Unless
otherwise indicated in the applicable Prospectus Supplement, the Debt
Securities of each series will be issued in the form of one or more global
securities that will be deposited with, or on behalf of, a depositary. See
"Book-Entry System" below.
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 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
4
<PAGE>
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.
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.
Book-Entry System
Unless otherwise indicated in the Prospectus Supplement with respect to any
series of Offered Debt Securities, upon issuance, all Offered Debt Securities
will be represented by one or more global securities (the "Global Security").
The Global Security will be deposited with, or on behalf of, The Depository
Trust Company ("DTC" or the "Depositary") and registered in the name of Cede &
Co. (the Depositary's partnership nominee). Unless and until exchanged in whole
or in part for Offered Debt Securities in definitive form, no Global Security
may be transferred except as a whole by the Depositary to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any such nominee to a
successor of such Depositary or a nominee of such successor.
If so indicated in the Prospectus Supplement with respect to any series of
Offered Debt Securities, investors may elect to hold interests in Global
Securities through either the Depositary (in the United States) or Clearstream
Banking, societe anonyme, formerly Cedelbank ("Clearstream Luxembourg"), or
Morgan Guaranty Trust Company of New York, Brussels Office, as operator of the
Euroclear System ("Euroclear"), if they are participants in such systems, or
indirectly through organizations which are participants in such systems.
Clearstream Luxembourg and Euroclear will hold interests on behalf of their
participants through customers' securities accounts in Clearstream Luxembourg's
and Euroclear's names on the books of their respective depositaries, which in
turn will hold such interests in customers' securities accounts in the
depositaries' names on the books of the Depositary. Unless otherwise indicated
in the applicable Prospectus Supplement, Citibank, N.A. will act as depositary
for Clearstream Luxembourg and The Chase Manhattan Bank will act as depositary
for Euroclear (in such capacities, the "U.S. Depositaries").
So long as the Depositary, or its nominee, is a registered owner of a Global
Security, the Depositary or its nominee, as the case may be, will be considered
the sole owner or holder of Offered Debt Securities represented by such Global
Security for all purposes under the Indenture. Except as provided below, the
actual owners of Offered Debt Securities represented by a Global Security (the
"Beneficial Owner") will not be entitled to have the Offered Debt Securities
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of the Offered Debt Securities in
definitive form and will not be considered the owners or holders thereof under
the applicable Indenture, including for purposes of receiving any reports
delivered by the Company or the applicable Trustee pursuant to such Indenture.
Accordingly, each person owning a beneficial interest in a Global Security must
rely on the procedures of the Depositary and, if such person is not a
participant of the Depositary (a "Participant"), on the procedures of the
Participant through which such person owns its interest, to exercise any rights
of a holder under the applicable Indenture. The Company understands that under
existing industry practices, in the event that the Company requests any action
of holders or that an owner of a beneficial interest which a holder is entitled
to give or take under an Indenture, the Depositary would authorize the
Participants holding the relevant beneficial interests to
5
<PAGE>
give or take such action, and such Participants would authorize Beneficial
Owners owning through such Participants to give or take such action or would
otherwise act upon the instructions of Beneficial Owners. Conveyance of notices
and other communications by the Depositary to Participants, by Participants to
Indirect Participants, as defined below, and by Participants and Indirect
Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
If (x) the Depositary is at any time unwilling or unable to continue as
Depositary and a successor depositary is not appointed by the Company within 90
days, (y) the Company executes and delivers to a Trustee a Company Order to the
effect that Global Securities shall be exchangeable or (z) an Event of Default
(as defined herein) has occurred and is continuing with respect to Offered Debt
Securities, the Global Securities will be exchangeable for Offered Debt
Securities in definitive form of like tenor and of an equal aggregate principal
amount, in denominations of $1,000 and integral multiples thereof. Such
definitive Offered Debt Securities shall be registered in such name or names as
the Depositary shall instruct the applicable Trustee. It is expected that such
instructions may be based upon directions received by the Depositary from
Participants with respect to ownership of beneficial interests in such Global
Securities.
The following is based on information furnished by DTC:
DTC will act as securities depositary for Offered Debt Securities. Offered
Debt Securities will be issued as fully registered notes registered in the name
of Cede & Co. (DTC's partnership nominee). One or more fully registered Global
Securities will be issued for the Offered Debt Securities in the aggregate
principal amount of such issue, and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended. DTC holds securities that its Participants deposit
with DTC. DTC also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
Participants of DTC ("Direct Participants") include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. DTC is owned by a number of its Direct Participants and by The
New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. Access to DTC's system is also
available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly ("Indirect Participants"). The rules
applicable to DTC and its Participants are on file with the Securities and
Exchange Commission.
Purchases of Offered Debt Securities under DTC's system must be made by or
through Direct Participants, which will receive a credit for Offered Debt
Securities on DTC's records. The ownership interest of each Beneficial Owner is
in turn to be recorded on the records of Direct Participants and Indirect
Participants. Beneficial Owners will not receive written confirmation from DTC
of their purchase, but Beneficial Owners are expected to receive written
confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct Participants or Indirect
Participants through which such Beneficial Owner entered into the transaction.
Transfers of ownership interests in Offered Debt Securities are to be
accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in Offered Debt Securities, except as provided above.
To facilitate subsequent transfers, all Offered Debt Securities deposited
with DTC are registered in the name of DTC's partnership nominee, Cede & Co.
The deposit of Offered Debt Securities with DTC and their registration in the
name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of Offered Debt Securities. DTC's
records reflect only the identity of the Direct Participants to whose accounts
such Notes are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
6
<PAGE>
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Neither DTC, nor Cede & Co. will consent or vote with respect to Offered
Debt Securities. Under its usual procedures, DTC mails an Omnibus Proxy to the
Company as soon as possible after the applicable record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants
to whose accounts Offered Debt Securities are credited on the applicable record
date (identified in a listing attached to the Omnibus Proxy).
Principal and/or interest payments on Offered Debt Securities will be made
in immediately available funds to DTC. DTC's practice is to credit Direct
Participants' accounts on the applicable payment date in accordance with their
respective holdings shown on the Depositary's records unless DTC has reason to
believe that it will not receive payment on such date. Payments by Participants
to Beneficial Owners will be governed by standing instructions and customary
practices, as is the case with securities held for the accounts of customers in
bearer form or registered in "street name", and will be the responsibility of
such Participant and not of DTC, any Trustee or the Company, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment of principal and/or interest to DTC is the responsibility of the
Company or the applicable Trustee, disbursement of such payments to Direct
Participants shall be the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners shall be the responsibility of Direct
Participants and Indirect Participants.
DTC may discontinue providing its services as securities depositary with
respect to Offered Debt Securities at any time by giving reasonable notice to
the Company or the applicable Trustee. Under such circumstances, in the event
that a successor securities depositary is not obtained, Offered Debt Security
certificates are required to be printed and delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depositary). In that event,
Offered Debt Security certificates will be printed and delivered.
Clearstream Luxembourg advises that it is incorporated under the laws of
Luxembourg as a professional depositary. Clearstream Luxembourg holds
securities for its participating organizations ("Clearstream Participants") and
facilitates the clearance and settlement of securities transactions between
Clearstream Participants through electronic book-entry changes in accounts of
Clearstream Participants, thereby eliminating the need for physical movement of
certificates. Clearstream Luxembourg provides to Clearstream Participants,
among other things, services for safekeeping, administration, clearance and
settlement of internationally traded securities and securities lending and
borrowing. Clearstream Luxembourg interfaces with domestic markets in several
countries. As a professional depositary, Clearstream Luxembourg is subject to
regulation by the Luxembourg Monetary Institute. Clearstream Participants are
recognized financial institutions around the world, including underwriters,
securities brokers and dealers, trust companies, clearing corporations and
certain other organizations and may include the Underwriters. Indirect access
to Clearstream Luxembourg is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Clearstream Participant either directly or indirectly.
Distributions with respect to Offered Debt Securities held beneficially
through Clearstream Luxembourg will be credited to cash accounts of Clearstream
Participants in accordance with its rules and procedures, to the extent
received by the U.S. Depositary for Clearstream Luxembourg.
Euroclear advises that it was created in 1968 to hold securities for
participants of Euroclear ("Euroclear Participants") and to clear and settle
transactions between Euroclear Participants through simultaneous electronic
book-entry delivery against payment, thereby eliminating the need for physical
movement of certificates and any risk from lack of simultaneous transfers of
securities and cash. Euroclear includes various other services, including
securities lending and borrowing and interfaces with domestic markets in
several
7
<PAGE>
countries. Euroclear is operated by the Brussels, Belgium office of Morgan
Guaranty Trust Company of New York (the "Euroclear Operator"), under contract
with Euro-clear Clearance Systems S.C., a Belgian cooperative corporation (the
"Cooperative"). All operations are conducted by the Euroclear Operator, and all
Euroclear securities clearance accounts and Euroclear cash accounts are
accounts with the Euroclear Operator, not the Cooperative. The Cooperative
establishes policy for Euroclear on behalf of Euroclear Participants. Euroclear
Participants include banks (including central banks), securities brokers and
dealers and other professional financial intermediaries and may include the
Underwriters. Indirect access to Euroclear is also available to other firms
that clear through or maintain a custodial relationship with a Euroclear
Participant, either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it
is regulated and examined by the Board of Governors of the Federal Reserve
System and the New York State Banking Department, as well as the Belgian
Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System, and applicable Belgian
law (collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities
and cash from Euroclear, and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities clearance accounts.
The Euroclear Operator acts under the Terms and Conditions only on behalf of
Euroclear Participants, and has no record of or relationship with persons
holding through Euroclear Participants.
Distributions with respect to Offered Debt Securities held beneficially
through Euroclear will be credited to the cash accounts of Euroclear
Participants in accordance with the Terms and Conditions, to the extent
received by the U.S. Depositary for Euroclear.
Global Clearance and Settlement Procedures
Initial settlement for Offered Debt Securities will be made in immediately
available funds. Secondary market trading between DTC Participants will occur
in the ordinary way in accordance with the Depositary's rules and will be
settled in immediately available funds using the Depositary's Same-Day Funds
Settlement System. If and to the extent the Prospectus Supplement with respect
to any series of Debt Securities indicates that investors may elect to hold
interests in Offered Debt Securities through Clearstream Luxembourg or
Euroclear, secondary market trading between Clearstream Participants and/or
Euroclear Participants will occur in the ordinary way in accordance with the
applicable rules and operating procedures of Clearstream Luxembourg and
Euroclear and will be settled using the procedures applicable to conventional
eurobonds in immediately available funds.
Cross-market transfers between persons holding directly or indirectly
through the Depositary on the one hand, and directly or indirectly through
Clearstream or Euroclear Participants, on the other, will be effected in the
Depositary in accordance with the Depositary rules on behalf of the relevant
European international clearing system by its U.S. Depositary; however, such
cross-market transactions will require delivery of instructions to the relevant
European international clearing system by the counterparty in such system in
accordance with its rules and procedures and within its established deadlines
(European time). The relevant European international clearing system will, if
the transaction meets its settlement requirements, deliver instructions to its
U.S. Depositary to take action to effect final settlement on its behalf by
delivering or receiving Offered Debt Securities in the Depositary, and making
or receiving payment in accordance with normal procedures for same-day funds
settlement applicable to the Depositary. Clearstream Participants and Euroclear
Participants may not deliver instructions directly to the Depositary.
Because of time-zone differences, credits of Offered Debt Securities
received in Clearstream Luxembourg or Euroclear as a result of a transaction
with a DTC Participant will be made during subsequent securities
8
<PAGE>
settlement processing and will be credited the business day following the
Depositary settlement date. Such credits or any transactions in Offered Debt
Securities settled during such processing will be reported to the relevant
Euroclear or Clearstream Participants on such business day. Cash received in
Clearstream Luxembourg or Euroclear as a result of sales of Offered Debt
Securities by or through a Clearstream Participant or a Euroclear Participant
to a DTC Participant will be received with value on the Depositary settlement
date but will be available in the relevant Clearstream Luxembourg or Euroclear
cash account only as of the business day following settlement in the
Depositary.
Although the Depositary, Clearstream Luxembourg and Euroclear have agreed to
the foregoing procedures in order to facilitate transfers of Offered Debt
Securities among participants of the Depositary, Clearstream Luxembourg and
Euroclear, they are under no obligation to perform or continue to perform such
procedures and such procedures may be discontinued at any time.
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 U.S. Bank Trust National Association, The Bank of New York,
Bank One, National Association, Allfirst Bank, or such other entity which may
be specified in the Prospectus Supplement (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 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
9
<PAGE>
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 an
Indenture dated as of March 15, 1990, between HFC and Harris Trust and Savings
Bank, as Trustee (the "Indenture for Senior Subordinated Debt Securities").
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 Chicago, Illinois; 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
December 31, 1999, the aggregate amount of the outstanding senior indebtedness
of HFC was approximately $30.4 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
10
<PAGE>
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 Indenture 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. (Indenture for
Senior Subordinated Debt Securities--Section 12.01)
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. (Indenture for
Senior Subordinated Debt Securities--Section 3.08)
Concerning the Trustee
Harris Trust and Savings Bank is trustee under other indentures of HFC under
which certain of HFC's outstanding senior subordinated debt securities have
been issued and under which HFC senior debt securities may be issued. HFC
maintains banking relationships with Harris Trust and Savings Bank. Harris
Trust and Savings Bank, 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
11
<PAGE>
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--Section 6.03, Indenture 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--Section 11.02, Indenture for Senior Subordinated Debt
Securities-- Section 11.02)
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--Section 11.01, Indenture 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
Provision--Section 10.02, Indenture 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
12
<PAGE>
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--Sections 3.05
and 7.01, Indenture for Senior Subordinated Debt Securities--Sections 3.05 and
7.01)
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--Section 7.02, Indenture 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--Section 7.13, Indenture for Senior Subordinated
Debt Securities--Section 7.13)
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--Section 8.02, Indenture for Senior Subordinated Debt Securities--
Section 8.02)
Holders of Debt Securities may not enforce an Indenture except as provided
therein. (Standard Provisions--Section 7.07, Indenture 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--Section
7.12, Indenture 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--Section 8.03(e), Indenture 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
13
<PAGE>
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 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.
CERTAIN UNITED STATES TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of an Offered Debt Security will generally be subject to
the withholding of United States federal income tax at rates up to 31% unless
one of the following steps is taken to obtain an exemption from or reduction of
the tax:
Exemption for Non-United States persons (current IRS Form W-8 or new IRS
Form W-8BEN). A beneficial owner of an Offered Debt Security that is a non-
United States person (other than certain persons that
14
<PAGE>
are related to the Company through stock ownership or that are banks receiving
certain types of interest as described in clauses (x) (a), (b) and (c) of
Paragraph (i) under "United States Taxation of Non-United States Persons--
Income and Estate Tax") can obtain an exemption from the withholding of tax by
providing a properly completed IRS Form W-8 (Certificate of Foreign Status) or
IRS Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United
States Tax Withholding). Special rules may apply in the case of foreign
partnerships.
Exemption for Non-United States persons with effectively connected income
(current IRS Form 4224 or new IRS Form W-8ECI). A beneficial owner of an
Offered Debt Security that is a non-United States person, including a non-
United States corporation or bank with a United States branch, that conducts a
trade or business in the United States with which interest income on an Offered
Debt Security is effectively connected, can obtain an exemption from the
withholding of tax by providing a properly completed IRS Form 4224 (Exemption
from Withholding of Tax on Income Effectively Connected with the Conduct of a
Trade or Business in the United States) or IRS Form W-8ECI (Certificate of
Foreign Person's Claim for Exemption From Withholding on Income Effectively
Connected With the Conduct of a Trade or Business in the United States).
Exemption or reduced rate for Non-United States persons entitled to the
benefits of a treaty (current IRS Form 1001 or new IRS Form W-8BEN). A
beneficial owner of an Offered Debt Security that is a non-United States person
entitled to the benefits of an income tax treaty to which the United States is
a party can obtain an exemption from or reduction of the withholding of tax
(depending on the terms of the treaty) by providing a properly completed IRS
Form 1001 (Ownership, Exemption or Reduced Rate Certificate) or IRS Form W-8BEN
(Certificate of Foreign Status of Beneficial Owner for United States Tax
Withholding).
Exemption for United States persons (IRS Form W-9). A beneficial owner of an
Offered Debt Security that is a United States person can obtain a complete
exemption from the withholding of tax by providing a properly completed IRS
Form W-9 (Request for Taxpayer Identification Number and Certification).
United States federal income tax reporting procedure. A beneficial owner of
an Offered Debt Security, or, in situations currently addressed by IRS Forms
1001 and 4224, the beneficial owner or its agent, is required to submit the
appropriate IRS Form under applicable procedures to the person through which
the owner directly holds the Offered Debt Security. For example, if the
beneficial owner is listed directly on the books of Euroclear or Clearstream
Luxembourg as the holder of the Offered Debt Security, the IRS Form must be
provided to Euroclear or Clearstream Luxembourg, as the case may be. Each other
person through which an Offered Debt Security is held must submit, on behalf of
the beneficial owner, the IRS Form (or in certain cases a copy thereof) under
applicable procedures to the person through which it holds the Offered Debt
Security, until the IRS Form is received by the United States person who would
otherwise be required to withhold United States federal income tax from
interest on the Offered Debt Security. For example, in the case of an Offered
Debt Security held through Euroclear or Clearstream Luxembourg, the IRS Form
(or a copy thereof) must be received by the U.S. Depositary of such clearing
agency. Applicable procedures include additional certification requirements,
described in clause (x) (d) (B) of paragraph (i) under "United States Taxation
of Non-United States Persons--Income and Estate Tax", if a beneficial owner of
the Offered Debt Security provides an IRS Form W-8 to a securities clearing
organization, bank or other financial institution that holds the Offered Debt
Security on its behalf.
Regulations issued by the IRS, which are generally proposed to become
effective for payments made after December 31, 2000, make certain modifications
to the certification procedures applicable to non-United States persons,
including replacing the current forms listed above with the new IRS Form W-8
series listed above and providing special rules for foreign partnerships.
Withholding agents are authorized to use the new forms currently. Prospective
investors should consult their tax advisors regarding the certification
requirements for non-United States persons.
Each holder of an Offered Debt Security should be aware that if it does not
properly provide the required IRS Form, or if the IRS Form (or, if permissible,
a copy of such form) is not properly transmitted to and received by the United
States person otherwise required to withhold United States federal income tax,
interest
15
<PAGE>
on the Offered Debt Security may be subject to withholding and the holder
(including the beneficial owner) will not be entitled to any additional amounts
from the Company as provided for in connection with any series of Offered Debt
Securities and as described in the applicable Prospectus Supplement with
respect to such withholding. Such withholding, however, may in certain
circumstances be allowed as a refund or as a credit against such holder's
United States federal income tax. The foregoing does not deal with all aspects
of federal income tax withholding that may be relevant to non-United States
holders of the Debt Securities. Investors are advised to consult their own tax
advisors for specific advice concerning the ownership and disposition of
Offered Debt Securities.
UNITED STATES TAXATION OF NON-UNITED STATES PERSONS
The following summary describes the principal United States federal income
and estate tax consequences applicable to beneficial owners of the Offered Debt
Securities who are non-United States persons. The following discussion may not
be applicable to a particular series of Offered Debt Securities depending on
the terms and conditions established for such Offered Debt Securities in the
Prospectus Supplement. Any special United States federal income and estate tax
consequences to non-United States persons (and, if necessary, to United States
persons) not described herein will be described in the Prospectus Supplement.
Income and Estate Tax
In the opinion of Sidley & Austin, special tax counsel to the Company, under
United States federal tax law as of the date of this Prospectus, and subject to
the discussion of backup withholding below:
(i) payments of principal and interest on an Offered Debt Security that
is beneficially owned by a non-United States person will not be subject to
the withholding of United States federal income tax; provided, that in the
case of interest, (x) (a) the beneficial owner does not actually or
constructively own 10% or more of the total combined voting power of all
classes of stock of the Company entitled to vote, (b) the beneficial owner
is not a controlled foreign corporation that is related to the Company
through stock ownership, (c) the beneficial owner of the Offered Debt
Security is not a bank receiving interest on an Offered Debt Security as
described in Section 881 (c) (3) (A) of the Code and (d) either (A) the
beneficial owner of the Offered Debt Security certifies to the person
otherwise required to withhold United States federal income tax from such
interest, under penalties of perjury, that it is not a United States person
and provides its name and address or (B) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "financial
institution") and holds the Offered Debt Security certifies to the person
otherwise required to withhold United States federal income tax from such
interest, under penalties of perjury, that such statement has been received
from the beneficial owner by it or by a financial institution between it
and the beneficial owner and furnishes the payor with a copy thereof; (y)
the beneficial owner is entitled to the benefits of an income tax treaty
under which the interest is exempt from the withholding of United States
federal income tax and the beneficial owner of the Offered Debt Security or
such owner's agent provides an IRS Form 1001 or IRS Form W-8BEN claiming
the exemption; or (z) the beneficial owner conducts a trade or business in
the United States to which the interest is effectively connected and the
beneficial owner of the Offered Debt Security or such owner's agent
provides an IRS Form 4224 or IRS Form W-8ECI; provided that in each such
case, the relevant certification or IRS Form is delivered pursuant to
applicable procedures and is properly transmitted to the person otherwise
required to withhold United States federal income tax, and none of the
persons receiving the relevant certification or IRS Form has actual
knowledge that the certification or any statement on the IRS Form is false;
(ii) a non-United States person will not be subject to United States
federal income tax on any gain realized on the sale, exchange or redemption
of an Offered Debt Security unless the gain is effectively connected with
the beneficial owner's trade or business in the United States or, in the
case of an individual, the holder is present in the United States for 183
days or more in the taxable year in which the sale, exchange or redemption
occurs and certain other conditions are met; and
16
<PAGE>
(iii) an Offered Debt Security owned by an individual who at the time of
death is not a citizen or resident of the United States will not be subject
to United States federal estate tax as a result of such individual's death
if the individual does not actually or constructively own 10% or more of
the total combined voting power of all classes of stock of the Company
entitled to vote and the income on the Offered Debt Security would not have
been effectively connected with a U.S. trade or business of the individual.
Interest on an Offered Debt Security that is effectively connected with the
conduct of a trade or business in the United States by a holder of an Offered
Debt Security who is a non-United States person, although exempt from the
withholding of United States income tax, may be subject to United States income
tax as if such interest was earned by a United States person.
Backup Withholding and Information Reporting
In general, information reporting requirements will apply to payments of
principal and interest made on an Offered Debt Security and the proceeds of the
sale of an Offered Debt Security within the United States to non-corporate
holders of the Offered Debt Securities, and "backup withholding" at a rate of
31% will apply to such payments if the holder fails to provide an accurate
taxpayer identification number in the manner required or to report all interest
and dividends required to be shown on its federal income tax returns.
Information reporting on IRS Form 1099 and backup withholding will not apply
to payments made by the Company or a paying agent to a non-United States person
on an Offered Debt Security if, in the case of interest, the IRS Form described
in clause (y) or (z) in paragraph (i) under "Income and Estate Tax" has been
provided under applicable procedures, or, in the case of interest or principal,
the certification described in clause (x) (d) in paragraph (i) under "Income
and Estate Tax" and a certification that the beneficial owner satisfies certain
other conditions have been supplied under applicable procedures, provided that
the payor does not have actual knowledge that the certifications are incorrect.
Payments of the proceeds from the sale of an Offered Debt Security made to
or through a foreign office of a broker will not be subject to information
reporting or backup withholding, except that if the broker is a United States
person, a controlled foreign corporation for United States tax purposes or a
foreign person 50% or more of whose gross income is effectively connected with
a United States trade or business for a specified three-year period (or,
effective for payments made after December 31, 2000, a United States branch of
a foreign bank or foreign insurance company or a foreign partnership controlled
by United States persons or engaged in a United States trade or business),
information reporting may apply to such payments. Payments of the proceeds from
the sale of an Offered Debt Security to or through the United States office of
a broker are subject to information reporting and backup withholding unless the
holder or beneficial owner certifies that it is a non-United States person and
that it satisfies certain other conditions or otherwise establishes an
exemption from information reporting and backup withholding.
Regulations issued by the IRS, which are currently proposed to become
effective for payments made after December 31, 2000, make certain modifications
to the certification procedures applicable to non-United States persons.
Prospective investors should consult their tax advisors regarding the
certification requirements for non-United States persons.
Backup withholding is not a separate tax, but is allowed as a refund or
credit against the holder's United States federal income tax, provided the
necessary information is furnished to the Internal Revenue Service.
Interest on an Offered Debt Security that is beneficially owned by a non-
United States person will be reported annually on IRS Form 1042-S, which must
be filed with the Internal Revenue Service and furnished to such beneficial
owner.
17
<PAGE>
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 will set 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 will describe 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 will be named in the
Prospectus Supplement relating to such offering, and, if an underwriting
syndicate is used, the managing underwriter or underwriters will be 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.
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.
ERISA MATTERS
The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
imposes certain restrictions on employee benefit plans ("Plans") that are
subject to ERISA and on persons who are fiduciaries with respect to such Plans.
In accordance with the ERISA's general fiduciary requirements, a fiduciary with
18
<PAGE>
respect to any such Plan who is considering the purchase of Offered Securities
on behalf of such Plan should determine whether such purchase is permitted
under the governing Plan documents and is prudent and appropriate for the Plan
in view of its overall investment policy and the composition and
diversification of its portfolio. Other provisions of ERISA and Section 4975 of
the Internal Revenue Code of 1986, as amended (the "Code") prohibit certain
transactions between a Plan and persons who have certain specified
relationships to the Plan ("parties in interest" within the meaning of ERISA or
"disqualified persons" within the meaning of Section 4975 of the Code). Thus, a
Plan fiduciary considering the purchase of Offered Securities should consider
whether such a purchase might constitute or result in a prohibited transaction
under ERISA or Section 4975 of the Code.
HFC may be considered a "party in interest" or a "disqualified person" with
respect to many Plans that are subject to ERISA. The purchase of Offered
Securities by a Plan that is subject to the fiduciary responsibility provisions
of ERISA or the prohibited transaction provisions of Section 4975 of the Code
(including individual retirement accounts and other plans described in Section
4975(c)(1) of the Code) and with respect to which HFC is a party in interest or
a disqualified person may constitute or result in a prohibited transaction
under ERISA or Section 4975 of the Code, unless such Offered Securities are
acquired pursuant to and in accordance with an applicable exemption, such as
Prohibited Transaction Class Exemption ("PTCE") 84-14 (an exemption for certain
transactions determined by an independent qualified professional asset
manager), PTCE 91-38 (an exemption for certain transactions involving bank
collective investment finds), PTCE 95-60 (an exemption for certain transactions
involving life insurance general accounts), PTCE 96-23 (an exemption for
certain transactions determined by in-house investment managers), or PTCE 90-1
(an exemption for certain transactions involving insurance company pooled
separate accounts). Any pension or other employee benefit plan proposing to
acquire any Offered Securities should consult with its counsel.
LEGAL OPINIONS
The legality of the Offered Securities will be passed upon for HFC by John
W. Blenke, Vice President--Corporate Law for Household International, Inc., the
parent of HFC. Sidley & Austin, Chicago, Illinois has acted as special tax
counsel to HFC in connection with tax matters related to the issuance of Debt
Securities. Certain legal matters will be passed upon for underwriters and
agents by McDermott, Will & Emery, Chicago, Illinois. Mr. Blenke is a full-time
employee and an officer of Household International and owns, and holds options
to purchase, shares of Common Stock of Household International.
EXPERTS
The financial statements and schedules of HFC and its subsidiaries
incorporated by reference in this Prospectus, to the extent and for the periods
indicated in its reports, have been audited by Arthur Andersen LLP, independent
public accountants, and are incorporated by reference herein in reliance upon
the authority of said firm as experts in giving said reports.
19
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Estimated Expenses:
<TABLE>
<S> <C>
Printing Fees................................................. $ 800,000
Fees of Transfer Agent and Registrar.......................... 100,000
Accountants' Fees and Expenses................................ 150,000
Blue Sky Qualification Fees and Expenses...................... 10,000
SEC Filing Fee................................................ 2,640,000*
Rating Agency Fees............................................ 1,400,000
Legal Fees and Expenses....................................... 64,000
Miscellaneous................................................. 36,000
----------
$5,200,000
Total.....................................................
==========
</TABLE>
- --------
*Actual
Item 15. Indemnification of Directors and Officers.
The General Corporation Law of Delaware (Section 145) gives Delaware
corporations broad powers to indemnify their present and former directors and
officers and those of affiliated corporations against expenses incurred in the
defense of any lawsuit to which they are made parties by reason of being or
having been such directors or officers, subject to specified conditions and
exclusions; gives a director or officer who successfully defends an action the
right to be so indemnified; and authorizes Household Finance Corporation
("HFC") to buy directors' and officers' liability insurance. Such
indemnification is not exclusive of any other right to which those indemnified
may be entitled under any bylaw, agreement, vote of stockholders or otherwise.
A bylaw of HFC states and makes mandatory the indemnification expressly
authorized under the General Corporation Law of Delaware, in the absence of
other indemnification by contract, vote of stockholders or otherwise, with
these exceptions: the bylaw makes no distinction between litigation brought by
third parties and litigation brought by or in the right of HFC as regards the
required standard of conduct imposed upon the individual in order to be
entitled to indemnification. The bylaw standard applicable in all cases
(excepting indemnification in connection with the successful defense of any
proceeding or matter therein which is mandatory under the General Corporation
Law of Delaware and the bylaw without reference to any such standard) is that
the individual shall have acted in good faith and in a manner he/she reasonably
believed to be in or not opposed to the best interests of HFC, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his/her conduct was unlawful. Further, the bylaw would protect
directors, officers, employees and agents against any and all expenses and
liability with respect to actions brought against them by or in the right of
HFC if the required standard of conduct is met. The bylaw is qualified in its
entirety in that no indemnification will be made if prohibited by applicable
law. The bylaw is applicable only to claims, actions, suits or proceedings made
or commenced after its adoption, whether arising from prior or subsequent acts
or omissions to act. The bylaw is applicable to directors, officers, employees
or agents of HFC and also to persons who are serving at the request of HFC as
directors, officers, employees or agents of other corporations.
Article VII of the Restated Certificate of Incorporation of Household
International, Inc. ("Household International") provides for indemnification to
the fullest extent permitted by Section 145 of the General Corporation Law of
Delaware for directors, officers and employees of Household International and
also to persons who are serving at the request of Household International as
directors, officers or employees of other corporations. Household International
has purchased liability policies which indemnify HFC's officers and directors
against loss arising from claims by reason of their legal liability for acts as
officers and directors, subject to limitations and conditions as set forth in
the policies.
II-1
<PAGE>
Pursuant to agreements which HFC may enter into with underwriters or agents
(the form of which is included as an exhibit to this Registration Statement),
officers and directors of HFC may be entitled to indemnification by such
underwriters or agents against certain liabilities, including liabilities under
the Securities Act of 1933, as amended, arising from information appearing in
the Registration Statement or any Prospectus which has been furnished to HFC by
such underwriters or agents.
Item 16. Exhibits.
<TABLE>
<C> <S>
1 Form of Underwriting Agreement for Debt Securities and Warrants to
Purchase Debt Securities. (Incorporated by reference from Exhibit 1 to
HFC's Registration Statement on Form S-3 (No. 333-60543)).
4.1 Standard Multiple-Series Indenture Provisions for Senior Debt
Securities dated as of June 1, 1992. (Incorporated herein by reference
from Exhibit 4(b) to HFC's Registration Statement on Form S-3 (No. 33-
48854)).
4.2 Indenture for Senior Subordinated Debt Securities, dated as of March
15, 1990, between HFC and Harris Trust and Savings Bank, as Trustee.
(Incorporated herein by reference from Exhibit 4(e) to HFC's
Registration Statement on Form S-3 (No. 33-38955)).
4.3 Indenture for Senior Debt Securities between HFC and U.S. Bank Trust
National Association (formerly known as First Trust of Illinois,
National Association, successor in interest to Bank of America
Illinois, formerly known as Continental Bank, National Association),
as Trustee, dated as of October 1, 1992. (Incorporated herein by
reference from Exhibit 4(d) to HFC's Registration Statement on Form S-
3 (No. 33-55043)).
4.4 Indenture for Senior Debt Securities, dated as of November 1, 1994,
between HFC and The Bank of New York, successor in interest to
NationsBank of Tennessee, as Trustee. (Incorporated by reference from
Exhibit 4(e) to HFC's Registration Statement on Form S-3 (No. 33-
64175)).
4.5 Indenture for Senior Debt Securities, dated as of April 1, 1995,
between HFC and Bank One, National Association (formerly known as The
First National Bank of Chicago), as Trustee. (Incorporated by
reference from Exhibit 4(f) to HFC's Registration Statement on Form S-
3 (No. 33-64175)).
4.6 Indenture for Senior Debt Securities, dated as of September 15, 1998,
between HFC and Allfirst Bank (formerly known as FMB Bank, formerly
known as The First National Bank of Maryland), as Trustee.
(Incorporated by reference from Exhibit 4.7 to HFC's Registration
Statement on Form S-3 (No. 333-72453)).
4.7 Form of Indenture with respect to Senior Debt Securities.
(Incorporated by reference from Exhibit 4.8 to HFC's Registration
Statement on Form S-3 (No. 333-60543)).
4.8 Forms of Warrant Agreement, including forms of Warrant Certificate.
(Incorporated by reference from Exhibit 4.9 to HFC's Registration
Statement on Form S-3 (No. 333-60543)).
5 Opinion and Consent of Mr. J. W. Blenke, Vice President--Corporate Law
and Assistant Secretary of Household International, Inc.
8 Opinion and consent of Sidley & Austin as to tax matters.
12 Statement on the Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Arthur Andersen LLP, Certified Public Accountants.
23.2 Consent of Mr. J. W. Blenke, Vice President-Corporate Law and
Assistant Secretary of Household International, Inc., is contained in
his opinion (Exhibit 5).
23.3 Consent of Sidley & Austin is contained in their opinion (Exhibit 8).
24 Power of Attorney (contained on page II-4 herein).
25.1 Statement of eligibility and qualification of Bank One, National
Association.
25.2 Statement of eligibility and qualification of Harris Trust and Savings
Bank.
25.3 Statement of eligibility and qualification of U.S. Bank Trust National
Association.
25.4 Statement of eligibility and qualification of The Bank of New York.
25.5 Statement of eligibility and qualification of Allfirst Bank.
</TABLE>
II-2
<PAGE>
Item 17. Undertaking.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made
of the securities registered hereby, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement;
provided, however, that the undertakings set forth in paragraphs (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to section 13 or section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in
this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in this Registration Statement shall be deemed
to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(5) That for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed
to be part of this Registration Statement as of the time it was declared
effective.
(6) That for purposes of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new Registration Statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions set forth or described in Item 15 of this
Registration Statement, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person in the successful defense of any action, suit or
proceeding) is asserted against the Registrant by such director, officer or
controllilng person, in connection with the securities registered hereby, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
II-3
<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 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
24th day of March, 2000.
Household Finance Corporation
/s/ G.D. Gilmer
By: _________________________________
G.D. Gilmer
President and Chief Executive
Officer
Each person whose signature appears below constitutes and appoints J. W.
Blenke, L. S. Mattenson and J. S. Vander Linde and each or any of them (with
full power to act alone), as his/her true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him/her in
his/her name, place and stead, in any and all capacities, to sign and file with
the Securities and Exchange Commission, any and all amendments (including post-
effective amendments and any registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933) to the Registration Statement,
granting unto each such attorney-in-fact and agent full power and authority to
do and perform each and every act and thing requisite and necessary to be done,
as fully to all interests and purposes as he/she might or could do in person,
hereby ratifying and confirming all that such attorney-in-fact and agent or
their substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-3 has been signed below by the following
persons in the capacities indicated on the 24th day of March, 2000.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ G.D. Gilmer President and Chief Executive Officer,
___________________________________________ Director
(G.D. Gilmer)
/s/ D.A. Schoenholz Executive Vice President--Chief Financial
___________________________________________ Officer, Chief Accounting Officer,
(D.A. Schoenholz) Director
/s/ W.F. Aldinger Director
___________________________________________
(W.F. Aldinger)
/s/ J. A. Vozar Director
___________________________________________
(J. A. Vozar)
</TABLE>
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-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Document Description
------- --------------------
<C> <S> <C>
1 Form of Underwriting Agreement for Debt Securities and
Warrants to Purchase Debt Securities (Incorporated by
reference from Exhibit 1 to HFC's Registration Statement on
Form S-3 (No. 333-60543)).....................................
4.1 Standard Multiple-Series Indenture Provisions for Senior Debt
Securities dated as of June 1, 1992. (Incorporated herein by
reference from Exhibit 4(b) to HFC's Registration Statement on
Form S-3 (No. 33-48854))......................................
4.2 Indenture for Senior Subordinated Debt Securities, dated as of
March 15, 1990, between HFC and Harris Trust and Savings Bank,
as Trustee. (Incorporated herein by reference from Exhibit
4(e) to HFC's Registration Statement on Form S-3 (No. 33-
38955)).......................................................
4.3 Indenture for Senior Debt Securities between HFC and U.S. Bank
Trust National Association (formerly known as First Trust of
Illinois, National Association, successor in interest to Bank
of America Illinois, formerly known as Continental Bank,
National Association), as Trustee, dated as of October 1,
1992. (Incorporated herein by reference from Exhibit 4(d) to
HFC's Registration Statement on Form S-3 (No. 33-55043))......
4.4 Indenture for Senior Debt Securities, dated as of November 1,
1994, between HFC and The Bank of New York, successor in
interest to NationsBank of Tennessee, as Trustee.
(Incorporated by reference from Exhibit 4(e) to HFC's
Registration Statement on Form S-3 (No. 33-64175))............
4.5 Indenture for Senior Debt Securities, dated as of April 1,
1995, between HFC and Bank One, National Association (formerly
known as The First National Bank of Chicago), as Trustee.
(Incorporated by reference from Exhibit 4(f) to HFC's
Registration Statement on Form S-3 (No. 33-64175))............
4.6 Indenture for Senior Debt Securities, dated as of September
15, 1998, between HFC and Allfirst Bank (formerly known as FMB
Bank, formerly known as The First National Bank of Maryland),
as Trustee. (Incorporated by reference from Exhibit 4.7 to
HFC's Registration Statement on Form S-3 (No. 333-72453)).
4.7 Form of Indenture with respect to Senior Debt Securities.
(Incorporated by reference from Exhibit 4.8 to HFC's
Registration Statement on Form S-3 (No. 333-60543)).
4.8 Forms of Warrant Agreement, including forms of Warrant
Certificate. (Incorporated by reference from Exhibit 4.9 to
HFC's Registration Statement on Form S-3 (No. 333-60543)).
5 Opinion and Consent of Mr. J. W. Blenke, Vice President--
Corporate Law and Assistant Secretary of Household
International, Inc............................................
8 Opinion and consent of Sidley & Austin as to tax matters......
12 Statement on the Computation of Ratio of Earnings to Fixed
Charges.......................................................
23.1 Consent of Arthur Andersen LLP, Certified Public Accountants..
23.2 Consent of Mr. J. W. Blenke, Vice President-Corporate Law and
Assistant Secretary of Household International, Inc., is
contained in his opinion (Exhibit 5)..........................
23.3 Consent of Sidley & Austin is contained in their opinion
(Exhibit 8)...................................................
24 Power of Attorney (contained on page II-4 herein).............
25.1 Statement of eligibility and qualification of Bank One,
National Association..........................................
25.2 Statement of eligibility and qualification of Harris Trust and
Savings Bank..................................................
25.3 Statement of eligibility and qualification of U.S. Bank Trust
National Association..........................................
25.4 Statement of eligibility and qualification of The Bank of New
York..........................................................
25.5 Statement of eligibility and qualification of Allfirst Bank...
</TABLE>
II-5
<PAGE>
March 24, 2000
Exhibit 5
---------
Household Finance Corporation
2700 Sanders Road
Prospect Heights, IL 60070
Re: Household Finance Corporation
Registration Statement on Form S-3
For $10 Billion of Debt Securities
And Warrants to Purchase Debt Securities
----------------------------------------
Gentlemen:
As Vice President - Corporate Law and Assistant Secretary of Household
International, Inc., the parent company of Household Finance Corporation
("HFC"), I am generally familiar with the proceedings in connection with HFC's
Registration Statement on Form S-3 (the "Registration Statement") in which
$10,000,000,000 aggregate principal amount of Debt Securities and Warrants to
Purchase Debt Securities of HFC are being registered. Each issuance of Debt
Securities constituting senior debt of HFC and will be issuable under one of
several Indentures, such Indentures being dated as of October 1, 1992 between
HFC and U.S. Bank Trust National Association, formerly known as First Trust of
Illinois, as Trustee, successor in interest to BankAmerica of Illinois, formerly
known as Continental Bank, (National Association), as Trustee (the "U.S. Bank
Indenture"), dated as of April 1, 1995 between HFC and Bank One, National
Association (formerly known as The First National Bank of Chicago), as Trustee
(the "Bank One Indenture"), dated as of November 1, 1994 between HFC and The
Bank of New York, as Trustee, successor in interest to NationsBank of Tennessee
(the "Bank of New York Indenture"), and dated as of September 15, 1998 between
HFC and Allfirst Bank (formerly known as FMB Bank, formerly known as The First
National Bank of Maryland), as Trustee (the "Allfirst Indenture"). Debt
Securities constituting senior subordinated debt of HFC will be issuable under
an Indenture dated as of March 15, 1990, between HFC and Harris Trust and
Savings Bank, as Trustee (the "Harris Subordinated Indenture"). The Warrants,
if and where issued, will be issuable under a warrant agreement between HFC and
a national or state banking institution (the "Warrant Agreement"). The
foregoing Indentures, or forms thereof, and the forms of the
<PAGE>
Warrant Agreement have been filed with the Securities and Exchange Commission
(the "Commission") as exhibits to the Registration Statement.
Based upon my review of the records and documents of HFC, I am of the opinion
that:
1. HFC is a corporation duly incorporated and validly existing under the laws
of the State of Delaware.
2. The U.S. Bank Indenture, Bank One Indenture, Bank of New York Indenture,
Allfirst Indenture, and Harris Subordinated Indenture have been duly
authorized, executed and delivered by HFC, and constitute valid and legally
binding instruments of HFC enforceable in accordance with their terms,
except as enforcement of the provisions thereof may be limited by
bankruptcy, insolvency, reorganization or other laws relating to or
affecting the enforcement of creditors' rights or by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
3. The Warrant Agreement will, after being duly authorized, executed and
delivered by HFC, constitute a valid and legally binding instrument of HFC
enforceable in accordance with its terms, except as enforcement of the
provisions thereof may be limited by bankruptcy, insolvency, reorganization
or other laws relating to or affecting the enforcement of creditors' rights
or by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
4. When the issuance of the Debt Securities and the Warrants to Purchase Debt
Securities, as the case may be, has been duly authorized by appropriate
corporate action, and such Debt Securities and Warrants to Purchase Debt
Securities have been duly executed, authenticated, issued and delivered
against payment of the agreed consideration therefor in accordance with the
Indenture or the Warrant Agreement, and as described in the Registration
Statement, including the Prospectus and Prospectus Supplement, relating to
such Debt Securities and Warrants to Purchase Debt Securities, such Debt
Securities and Warrants to Purchase Debt Securities will be legally and
validly issued and will be the legal and binding obligations of HFC
enforceable in accordance with their terms, except as enforcement of the
provisions thereof may be limited by bankruptcy, insolvency, reorganization
or other laws relating to or affecting the enforcement of creditors' rights
or by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
<PAGE>
I hereby consent to the use of my name and my opinion in the Prospectus and
Prospectus Supplement filed pursuant to Rule 424 of Regulation C of the
Securities Act of 1933, as amended (the "Act"), in connection with the
Registration Statement relating thereto filed with the Commission on or about
March 24, 2000, including any references to my opinions set forth in the
documents incorporated by reference therein, and to the filing of this consent
as an exhibit to the Registration Statement. In giving such consent I do not
admit that I am in the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Commission thereunder.
Very truly yours,
/s/ John W. Blenke
<PAGE>
Exhibit 8
---------
[LETTERHEAD OF SIDLEY & AUSTIN]
March 24, 2000
Household Finance Corporation
2700 Sanders Road
Prospect Heights, IL 60070
Ladies and Gentlemen:
Reference is made to the Registration Statement on Form S-3 (the
"Registration Statement") filed with the Securities and Exchange Commission by
Household Finance Corporation (the "Company") on March 24, 2000 and to the
prospectus (the "Prospectus") included in such Registration Statement relating
to the issuance of up to $11,261,000,000 of Debt Securities (the "Debt
Securities") and Warrants to purchase the Debt Securities (the "Warrants").
We are special tax counsel to the Company in connection with the
Prospectus. The statements in the Prospectus under the heading "Certain United
States Tax Documentation Requirements" and "United States Taxation of Non-United
States Persons," to the extent they constitute matters of federal tax law or
legal conclusions with respect thereto, have been prepared or reviewed by us
and, in our opinion, are correct in all material respects. In rendering this
opinion we have relied without independent investigation on the description of
the Debt Securities set forth in the Prospectus. We hereby consent to the
reference to this firm in the Prospectus under the headings "United States
Taxation of Non-United States Persons," and "Legal Opinions".
We assume no obligation to update or supplement this letter to reflect any
facts or circumstances which may hereafter come to our attention with respect to
the opinion expressed above, including any changes in applicable law which may
hereafter occur.
Very truly yours,
/s/ Sidley & Austin
<PAGE>
EXHIBIT 12
HOUSEHOLD FINANCE CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
Year Ended December 31
---------------------------------------------------
1999 1998 1997 1996 1995
----------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net income $1,019.9 $ 304.9 $ 767.1 $ 650.0 $ 412.3
Income taxes 550.8 361.8 391.9 358.1 295.3
-------- -------- -------- -------- --------
Income before income taxes 1,570.7 666.7 1,159.0 1,008.1 707.6
Fixed charges:
Interest expense (1) 2,158.3 2,009.3 1,863.0 1,727.9 1,675.9
Interest portion of rentals (2) 37.7 48.1 46.8 45.2 37.1
-------- -------- -------- -------- --------
Total fixed charges 2,196.0 2,057.4 1,909.8 1,773.1 1,713.0
Total earnings as defined 3,766.7 2,724.1 3,068.8 2,781.2 2,420.6
-------- -------- -------- -------- --------
Ratio of earnings to fixed charges 1.72 1.32 1.61 1.57 1.41
-------- -------- -------- -------- --------
Preferred stock dividends (3) - - $ 14.6 $ 19.4 $ 21.3
-------- -------- -------- -------- --------
Ratio of earnings to combined fixed
charges and preferred stock
dividends(4) 1.72 1.32 1.59 1.55 1.40
-------- -------- -------- -------- --------
</TABLE>
(1) For financial statement purposes, these amounts are reduced for income
earned on temporary investment of excess funds, generally resulting from
over-subscriptions of commercial paper issuances.
(2) Represents one-third of rentals, which approximates the portion
representing interest.
(3) Preferred stock dividends are grossed up to their pretax equivalents.
(4) The 1998 ratios have been negatively impacted by the one-time merger and
integration related costs associated with our merger with Beneficial
Corporation ("Beneficial"). Excluding Beneficial merger and integration
costs of $751 million after-tax, our ratio of earnings to fixed charges and
our ratio of earnings to combined fixed charges and preferred stock
dividends in 1998 was 1.81.
<PAGE>
Exhibit 23.1
[ARTHUR ANDERSEN LLP LETTERHEAD]
CONSENT OF INDEPENDENT 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 $10,000,000,000 of Debt Securities and Warrants to Purchase Debt
Securities, to be filed with the Securities and Exchange Commission on or about
March 24, 2000, of our report dated January 14, 2000, included in Household
Finance Corporation's Form 10-K for the year ended December 31, 1999, and to all
references to our Firm included in this registration statement.
/S/ ARTHUR ANDERSEN LLP
Chicago, Illinois
March 24, 2000
<PAGE>
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 ONE, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
1 Bank One Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
Bank One, National Association
1 Bank One Plaza, Suite IL1-0286
Chicago, Illinois 60670-0286
Attn: Steven M. Wagner, Global Corporate Trust Services (312) 407-1819
(Name, address and telephone number of agent for service)
-----------------------------------
Household Finance Corporation
(Exact name of obligor as specified in its charter)
Delaware 36-1239445
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
2700 Sanders Road
Prospect Heights, Illinois 60070
(Address of principal executive offices) (Zip Code)
Debt Securities
(Title of 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.
Comptroller of Currency, Washington, D.C., 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.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of this
Statement of Eligibility.
1. A copy of the articles of association of the trustee now in
effect.
2. A copy of the certificates of authority of the trustee to commence
business.*
3. A copy of the authorization of the trustee to exercise corporate
trust powers.*
4. A copy of the existing by-laws of the trustee.
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the Act.
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.
8. Not Applicable.
9. Not Applicable.
<PAGE>
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bank One, National Association, a national banking
association organized and existing under the laws of the United States of
America, 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 the State of Illinois, on this 3rd day of March, 2000.
Bank One, National Association,
Trustee
By /s/ Steven M. Wagner
--------------------------
Steven M. Wagner
First Vice President
<PAGE>
EXHIBIT 1
ARTICLES OF ASSOCIATION
OF
BANK ONE, NATIONAL ASSOCIATION
(Corrected To September 13, 1999)
FIRST. The title of this Association, organized for the purpose of
carrying on the business of banking under the laws of the United States, shall
be "Bank One, National Association".
SECOND. The main office of this Association shall be in Chicago, County of
Cook, State of Illinois. The business of the Association shall be conducted at
its main office and its branches.
THIRD. The Board of Directors of this Association shall consist of not
less than five nor more than twenty-five persons, the exact number of directors
within such minimum and maximum limits to be fixed and determined from time to
time by resolution of a majority of the full Board of Directors or by resolution
of the shareholders at any annual or special meeting thereof. Any vacancy in the
Board of Directors may be filled by action of a majority of the remaining
directors between meetings of shareholders. The Board of Directors, by the vote
of a majority of the full Board, may, between meetings of shareholders, increase
the membership of the Board within such maximum limit by not more than four
members if the number of directors last elected by shareholders was 16 or more
and by not more than two members if the number of directors last elected by
shareholders was 15 or less.
FOURTH. The regular annual meeting of the shareholders of this Association
shall be held at its main banking house, or other convenient place duly
authorized by the Board of Directors, on such day of each year as is specified
therefor in the by-laws.
FIFTH. The amount of authorized capital stock of this Association shall be
Five Hundred Twenty-Five Million Eight Hundred Fifty-Eight Thousand Two Hundred
Dollars ($525,858,200) divided into 26,292,910 shares of common stock of the par
value per share of Twenty Dollars ($20); but said capital stock may be increased
or decreased from time to time, in accordance with the provisions of the laws of
the United States.
In the event of any such increase in the capital stock of this Association
by the sale of additional shares or the distribution of additional shares as a
stock dividend, each shareholder of this Association (unless otherwise provided
by the shareholders' vote or votes authorizing the increase) shall be entitled,
in proportion to the number of shares of said capital stock owned by him before
such increase, to proportionate rights in respect of such additional shares as
follows: (1) to the extent that such shareholder's proportionate right in
respect of such additional shares shall embrace one or more whole shares of such
additional shares, to receive (a) in the case of a sale, a transferable warrant
entitling the holder to subscribe, within the specified subscription period, for
such one or more whole shares of such additional shares or (b) in the case of a
stock dividend, a certificate evidencing such one or more whole shares of such
additional shares; and (2) to the extent that such shareholder's proportionate
right in respect of such additional shares shall embrace a fraction of a share,
to receive (a) in the case of a sale, a fractional subscription warrant,
conditioned that it shall be void unless, within the specified subscription
period, it is combined with other such fractional subscription warrants in the
aggregate entitling the holder thereof to subscribe for a whole share or whole
shares of such additional shares and such subscription is completed by such
holder of such combined fractional warrants or (b) in the case of a stock
dividend, a fractional warrant which shall not represent or entitle the holder
thereof to any of the privileges of a shareholder of this Association but may be
combined with other such fractional warrants in the aggregate entitling the
holder thereof to exchange them for a whole share or whole shares of such
additional shares and conditioned that the holder exchanging such combined
fractional warrants for such whole share or whole shares of such additional
shares shall receive any dividends applicable to such whole share or whole
shares declared after the date of such fractional warrants and payable in
respect of such whole share or whole shares at the time of such exchange.
<PAGE>
In the event of an increase in the capital stock of this Association in
pursuance of a statutory consolidation to which this Association may be a party,
the additional shares shall be issued in such a manner as the contract or plan
of consolidation may provide, pursuant to and in contemplation of the statute
under which said consolidation is effected.
In the event of an increase in the capital stock of this Association in
pursuance of a plan or contract (other than in the case of a statutory
consolidation) for the acquisition by this Association of the assets, in whole
or in part, and the good will of another banking institution or banker, the
additional shares shall be subscribed for by or issued to any persons, firms,
trustees or corporations, whether or not shareholders of this Association, as,
in its discretion in the execution of such plan or contract, the Board of
Directors may approve.
The Association, at any time and from time to time, may authorize and issue
debt obligations, whether or not subordinated, without the approval of the
shareholders.
SIXTH. The Board of Directors shall appoint one of its members President
of this Association, who shall be Chairman of the Board; but the Board of
Directors may appoint a director, in lieu of the President, to be Chairman of
the Board, who shall perform such duties as may be designated by the Board of
Directors. The Board of Directors shall have the power to appoint one or more
Vice Presidents; to appoint a Cashier and such other officers as may be required
to transact the business of this Association; to fix the salaries to be paid to
all officers of this Association; and to dismiss such officers, or any of them;
but the Board of Directors may delegate to the Chairman of the Board the
authority to exercise such powers of appointment, salary determination and
dismissal.
The Board of Directors shall have the power to define the duties of
officers and employees of this Association, to require bonds from them, and to
fix the penalty thereof; to regulate the manner in which directors shall be
elected or appointed, and to appoint judges of election; in the event of an
increase of the capital stock of this Association to regulate the manner in
which such increase shall be made; to make all by-laws that it may be lawful for
them to make for the general regulation of the business of this Association and
the management of its affairs; and generally to do and perform all acts that it
may be lawful for a Board of Directors to do and perform.
The Board of Directors, without the approval of the shareholders, shall
have the power to change the location of the main office of this Association,
subject to such limitations as from time to time may be provided by law.
SEVENTH. This Association shall have succession from the date of its
organization certificate until such time as it be dissolved by the act of its
shareholders in accordance with the provisions of the banking laws of the United
States, or until its franchise becomes forfeited by reason of violation of law,
or until terminated by either a general or a special act of Congress, or until
its affairs be placed in the hands of a receiver and finally wound up by him.
EIGHTH. The Board of Directors of this Association, the Chairman of the
Board, or the President, may call a special meeting of the shareholders at any
time: Provided, however, that, unless otherwise provided by the by-laws or the
laws of the United States, or waived by the shareholders, notice of the time,
place and purpose of the meeting shall be given to each shareholder of record of
this Association entitled to act and vote at such meeting, by a notice in
writing either mailed (prepaid first class postage) to such shareholder at his
address as shown upon the books of this Association or delivered manually to
such shareholder, not less than ten days prior to the date fixed for any such
meeting.
NINTH. (a) This Association shall indemnify and hold harmless each 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, by reason of the fact that he, or a person of
whom he is the legal representative, is or was a director, officer or employee
of this Association, or is or was serving at the request of this Association as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, to the fullest extent permitted by the
General Corporation Law of Delaware, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits this Association to provide broader indemnification rights
than said law permitted this Association to provide prior to such amendment)
against all expenses (including attorneys' fees, judgments, fines, penalties and
amounts paid in
<PAGE>
settlement) actually and reasonably incurred by him in connection therewith.
This Association may, by action of the Board of Directors, provide
indemnification to agents of this Association with a lesser or the same scope
and effect as the foregoing indemnification of directors, officers and employees
of this Association.
(b) Expenses incurred by a director, officer or employee in defending a
civil or criminal action, suit or proceeding shall be paid by this Association
in advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such director, officer or employee
to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by this Association. Such expenses incurred by agents
may be so paid upon such terms and conditions, if any, as the Board of Directors
deems appropriate.
(c) The indemnification provided by this Article does not authorize this
Association to indemnify any director, officer or employee against expenses,
penalties, or other payments incurred in an administrative proceeding or action
instituted by an appropriate bank regulatory agency which proceeding or action
results in a final order against such director, officer or employee assessing
civil money penalties or requiring affirmative action in the form of payments to
this Association.
(d) The indemnification and advancement of expenses provided by, or granted
pursuant to, this Article Ninth shall not be deemed exclusive of any other
rights to which a person seeking indemnification or advancement of expenses may
be entitled under any statute, by-law, agreement, vote of shareholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office. Notwithstanding
the provisions of this Article, this Association may indemnify any person
referred to in paragraph (a) of this Article to the fullest extent permitted
under the statutes applicable to national banking associations and the rules,
regulations and interpretations promulgated thereunder by the primary regulator
of national banking associations, in each case now or hereafter in effect.
(e) This Association shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of
this Association, or is or was serving at the request of this Association 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 this Association would have the power to indemnify him against
such liability under the provisions of this Article. This provision does not,
however, authorize this Association to purchase insurance covering civil money
penalties assessed against a director or employee of this Association pursuant
to a formal order by an appropriate bank regulatory agency.
(f) Neither the amendment nor repeal of this Article Ninth, nor the
adoption of any provision of these Articles of Association inconsistent with
this Article Ninth, shall eliminate or reduce the effect of this Article Ninth
in respect of any matter occurring, or any cause of action, suit or claim that,
but for this Article Ninth, would accrue or arise, prior to such amendment,
repeal or adoption of an inconsistent provision.
TENTH. These Articles of Association may, subject to the provisions of the
banking laws of the United States, be amended at any regular or special meeting
of the shareholders by the affirmative vote of the shareholders owning at least
a majority of the stock of this Association.
<PAGE>
EXHIBIT 2
CERTIFICATE OF AUTHORITY
I, John D. Hawke, Jr., Comptroller of the Currency, do hereby certify that:
1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et
seq., as amended, 12 U.S.C. 1, et seq., as amended, has possession,
custody and control of all records pertaining to the chartering of all
National Banking Associations.
2. "Bank One, National Association," Chicago, Illinois, (Charter No. 000008)
is a National Banking Association formed under the laws of the United
States and is authorized thereunder to transact the business of banking on
the date of this Certificate.
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal of
office to be affixed to these presents at
the Treasury Department in the City of
Washington and District of Columbia, this
6th day of October, 1999.
/s/ John D. Hawke, Jr.
Comptroller of the Currency
[SEAL]
<PAGE>
EXHIBIT 3
CERTIFICATE OF FIDUCIARY POWERS
I, John D. Hawke, Jr., Comptroller of the Currency, do hereby certify that:
1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et
seq., as amended, 12 U.S.C. 1, et seq., as amended, has possession,
custody and control of all records pertaining to the chartering of all
National Banking Associations.
2. "Bank One, National Association," Chicago, Illinois, (Charter No. 000008)
was granted, under the hand and seal of the Comptroller, the right to act
in all fiduciary capacities authorized under the provisions of the Act of
Congress approved September 28, 1962, 76 Stat. 668, 12 U.S.C. 92a, and
that the authority so granted remains in full force and effect on the date
of this Certificate.
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal of
office to be affixed to these presents at
the Treasury Department in the City of
Washington and District of Columbia, this
6th day of October, 1999.
<PAGE>
EXHIBIT 4
BY-LAWS
OF
BANK ONE, NATIONAL ASSOCIATION
AS AMENDED AND RESTATED SEPTEMBER 13, 1999
<PAGE>
BY-LAWS
OF
BANK ONE, NATIONAL ASSOCIATION
ARTICLE I
---------
CORPORATE GOVERNANCE
--------------------
To the extent not inconsistent with applicable Federal banking statutes or
regulations, or safe and sound banking practices, the Bank shall follow the
corporate governance procedures of the Delaware General Corporation Law, as
amended.
ARTICLE II
----------
SHAREHOLDERS
------------
SECTION 1. Annual Meeting. The regular annual meeting of shareholders of
the Bank to elect directors and to transact whatever other business may properly
come before the meeting shall be held in its main office on the third Tuesday in
May if not a legal holiday under the Laws of Illinois, and if a legal holiday,
then on the next business day following, at 11:30 A.M., or on such other date
and time as shall be designated by the Board of Directors. If, for any cause,
the annual election of directors should not be held on that date, the Board
shall order the election to be held on some subsequent day, of which special
notice shall be given.
SECTION 2. Judges of Election. To the extent required by law, the Board of
Directors shall, prior to the time of the election of directors, appoint three
persons to be Judges of Election, who shall hold and conduct the same, and who
shall, after the election has been held, certify under their hands to the
Cashier of the Bank the result thereof and the names of the directors-elect.
SECTION 3. Notice to Directors-Elect. The Cashier upon receiving the
Certificate of the Judges of Election as aforesaid, shall cause the same to be
recorded upon the minute book of the Bank, and shall notify the directors-elect
of their election and of the time at which they are required to meet at the main
office of the Bank for the purpose of organizing the new Board. If at the time
fixed for the meeting of the directors-elect there should not be a quorum
present, the members present may adjourn from time to time until a quorum is
obtained.
SECTION 4. Special Meetings. Special meetings of the shareholders may be
called in accordance with Article EIGHTH of the Bank's Articles of Association.
SECTION 5. Record Date. The Board of Directors may fix in advance a day not
more than sixty (60) or less than ten (10) days prior to the date of holding any
regular or special meeting of shareholders as the day as of which shareholders
entitled to notice of and to vote at such meeting shall be determined.
SECTION 6. Notice. The Bank shall mail notice of any meeting of
shareholders at least 10 days prior to the meeting by first class mail, unless
the Office of the Comptroller of the Currency determines that an emergency
circumstance exists. If the Bank is a wholly-owned subsidiary of a company, the
sole shareholder may waive notice of the shareholder's meeting.
SECTION 7. Consent of Shareholders in Lieu of Annual or Special Meeting.
Unless otherwise restricted by law or the Articles of Association, any action
which may be taken at any annual or special shareholder meeting may be taken
without a meeting, without prior notice and without a vote, if written consent
setting forth the action so taken shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted. Prompt notice of the taking of the
corporate action
<PAGE>
without a meeting by less than unanimous written consent shall be given to those
shareholders who did not give written consent.
SECTION 8. Minutes. The proceedings of shareholders at all regular and
special meetings or by written consent in lieu of a meeting shall be recorded in
the minute book, together with the Articles of Association of the Bank and the
returns of the Judges of Election. The minutes of each meeting shall be signed
by the Presiding Officer, and attested by the Cashier, or other officer of the
Bank acting in place of the Cashier.
ARTICLE III
-----------
DIRECTORS
---------
SECTION 1. Authority. The Board of Directors shall have the power to manage
and administer the business and affairs of the Bank. Except as expressly limited
by law, all corporate powers of the Bank shall be vested in and may be exercised
by the Board of Directors.
SECTION 2. Number. The Board of Directors shall at all times consist of not
less than five nor more than twenty-five individuals. The exact number within
such minimum and maximum limits shall be fixed and determined from time to time
by resolution of a majority of the full Board of Directors or by resolution of
the shareholders at any meeting thereof; provided, however, that the Board of
Directors may not increase the number of directors to a number which: (1)
exceeds by more than two the number of directors last elected by shareholders
where such number was fifteen or less; or (ii) exceeds by more than four the
number of directors last elected by shareholders where such number was sixteen
or more, but in no event shall the number of directors exceed twenty-five.
SECTION 3. Term of Office. Each director shall hold office from the date of
his election or appointment until the next annual shareholder meeting. Any
director ceasing to be the owner of the amount of stock required by law or in
any other manner becoming disqualified shall thereupon vacate his office as
director.
SECTION 4. Compensation. The Board of Directors may provide that a
reasonable fee be paid to any of its members or to the members of any duly
authorized committee for services rendered. No such payment shall preclude any
director from serving the Bank in any other capacity and receiving compensation
therefor.
SECTION 5. Regular Meetings. Regular meetings of the Board of Directors
shall be held on such dates, times and locations as determined by the Chairman
of the Board and communicated in writing to the directors.
SECTION 6. Special Meetings. Special meetings of the Board of Directors may
be called by the Chairman of the Board or the President. Such meetings shall be
held at such times and at such places as shall be determined by the officer
calling the meeting. Notice of any special meeting of directors shall be given
to each director at the director's business or residence in writing by hand
delivery, first-class or overnight mail or courier service, telegram or
facsimile transmission, or orally by telephone. If mailed by first-class mail,
such notice shall be deemed adequately delivered when deposited in the United
States mail so addressed, with postage thereon prepaid, at least two (2) days
before such meeting. If by telegram, overnight mail or courier service, such
notice shall be deemed adequately delivered when the telegram is delivered to
the telegraph company or the notice is delivered to the overnight mail or
courier service company at least twenty-four (24) hours before such meeting. If
by facsimile transmission, such notice shall be deemed adequately delivered when
the notice is transmitted at least twelve (12) hours before such meeting. Such
notice need not state the purposes of the meeting. Any or all directors may
waive notice of any meeting, either before or after the meeting. Attendance of a
director at a meeting shall constitute a waiver of notice of such meeting,
except when the director attends for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened.
SECTION 7. Quorum; Majority Vote. A quorum of directors shall be required
to transact business at any regular or special meeting of the Board of
Directors. A majority of the directors shall constitute a quorum.
<PAGE>
Each director shall be entitled to one vote. A vote by a majority of the
directors present at any regular or special meeting of the Board of Directors at
which a quorum is present shall be required to approve any matter or proposal at
any such meeting.
SECTION 8. Vacancies. When any vacancy occurs in the Board of Directors, a
majority of the remaining members of the Board, according to the laws of the
United States, may appoint a director to fill such vacancy at any regular
meeting of the Board of Directors, or at a special meeting called for that
purpose at which a quorum is present, or if the directors remaining in office
constitute fewer than a quorum of the Board of Directors, by the affirmative
vote of a majority of all the directors remaining in office, or by shareholders
at a special meeting called for that purpose. At any such shareholder meeting,
each shareholder entitled to vote shall have the right to multiply the number of
votes he or she is entitled to cast by the number of vacancies being filled and
cast the product for a single candidate or distribute the product among two or
more candidates. A vacancy that will occur at a specific later date (by reason
of a resignation effective at a later date) may be filled before the vacancy
occurs but the new director may not take office until the vacancy occurs.
SECTION 9. Presiding Officer. The Chairman of the Board shall preside at
all meetings of the Board of Directors at which he is present. In the absence of
the Chairman of the Board, the President shall perform the duties of the
Chairman of the Board and shall preside at the meetings of the Board of
Directors. In the absence of the Chairman of the Board and the President, the
Vice Chairman of the Board (or in the event there be more than one Vice Chairman
of the Board, the Vice Chairmen of the Board in the order designated, or in the
absence of any designation, then in the order of their election) shall perform
their duties and shall preside at the meetings of the Board of Directors.
SECTION 10. Minutes of Meeting. The Cashier shall act as secretary to the
Board of Directors to take minutes at any regular or special meeting of the
Board of Directors. If the Cashier is not present at any such meeting, the
Chairman of the Board may designate a secretary pro tem to take minutes at the
meeting. The Cashier or secretary pro tem shall record the actions and
proceedings at each regular or special meeting of the Board of Directors as
minutes of the meeting and shall maintain such minutes in a minute book of
proceedings of such meetings of the Board of Directors. Minutes of each such
meeting shall be signed by the presiding officer and secretary of each meeting.
SECTION 11. Participation in Meetings by Telephone. Unless otherwise
restricted by law or the Articles of Association, members of the Board of
Directors, or of any committee thereof, may participate in a meeting of the
Board of Directors or committee by means of conference telephone or similar
communications equipment which allows each person participating in the meeting
to hear each other. Participation in such a meeting shall constitute presence in
person at such meeting.
SECTION 12. Consent of Directors in Lieu of Meeting. Unless otherwise
restricted by law or the Articles of Association, any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board or committee.
SECTION 13. Committees. The Board of Directors may, by resolution passed
by a majority of the entire Board, designate one or more committees, each
committee to consist of two or more of the Directors of the Bank. The Board of
Directors may designate one or more Directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
the committee. Any such committee, to the extent provided in the resolution,
shall have and may exercise the powers of the Board of Directors in the
management of the business and affairs of the Bank, and may authorize the seal
of the Bank to be affixed to all papers which may require it; provided, however,
that in the absence or disqualification of any member of such committee or
committees, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Such committee
or committees shall have such name or names as may be determined from time to
time by resolution adopted by the Board of Directors. As used in these By-Laws,
"entire Board" means the total number of Directors the Bank would have if there
were no vacancies.
<PAGE>
There shall be an Executive Committee composed and created as the Board of
Directors may designate by resolution passed by a majority of the entire
Board. During intervals between the regular meetings of the Board of Directors,
the Executive Committee, to the extent permitted by law, the Articles of
Association of the Bank and the By-Laws, shall have and may exercise the powers
of the Board of Directors in the management of the business and affairs of the
Bank.
Unless otherwise provided by the Board of Directors, a majority of the
members of any committee appointed by the Board of Directors pursuant to this
Section shall constitute a quorum at any meeting thereof and the act of a
majority of the members present at a meeting at which a quorum is present shall
be the act of such committee. Any such committee shall, subject to any rules
prescribed by the Board of Directors, prescribe its own rules for calling,
giving notice of and holding meetings and its method of procedure at such
meetings and shall keep a written record of all action taken by it. Each
committee shall keep regular minutes of its meetings and report the same to the
Board of Directors when required.
SECTION 14. Honorary Directors. Any person who has at any time been
Chairman of the Board, President or Vice Chairman of the Board of the Bank may,
after retirement from the Board of Directors, be appointed by the Board of
Directors as an Honorary Director on a year-to-year basis. In no case shall an
Honorary Director serve as such for more than five years. Honorary Directors
shall serve in an advisory capacity to the Board of Directors, shall have no
vote and shall not be considered directors for the purpose of determining a
quorum. Honorary Directors shall be reimbursed for their expenses in attending
meetings of the Board of Directors and shall receive such fees, if any, for
attendance at each meeting of the Board of Directors as may be fixed from time
to time by the Board of Directors but shall not receive any other directors'
fees or any other compensation for their services.
ARTICLE IV
----------
OFFICERS
--------
SECTION 1. Officer Titles. The officers of the Bank shall include a
Chairman of the Board and a President and may include one or more Vice Chairmen
of the Board, Executive Vice Presidents, Senior Vice Presidents, First Vice
Presidents, Vice Presidents and Assistant Vice Presidents, a General Auditor, a
General Counsel, a Cashier, and such other officers as may be appropriate for
the prompt and orderly transaction of the business of the Bank. Individuals
appointed as Chairman of the Board, President and Vice Chairman of the Board
must be members of the Board. The same person may hold any two or more offices.
The Chairman of the Board or the President shall have such authority to
establish officer titles as from time to time delegated by the Board of
Directors and to delegate such authority further to other officers of the Bank.
SECTION 2. Executive Management. The Chairman of the Board or the
President, as determined by the Board of Directors, shall be the chief executive
officer of the Bank. In case of the death or disability of the Chairman of the
Board, his powers shall be exercised and his duties discharged by the President.
In the event of the death or disability of the Chairman of the Board and the
President, the Vice Chairman of the Board (or in the event there be more than
one Vice Chairman of the Board, the Vice Chairmen of the Board in the order
designated, or in the absence of any designation, then in the order of their
election) shall exercise the powers and discharge the duties of the Chairman of
the Board.
SECTION 3. Election of Officers. The Board of Directors of the Bank shall
have authority to appoint the officers of the Bank. The Chairman of the Board or
the President shall have such authority to appoint officers as from time to time
delegated by the Board of Directors, and to delegate such authority further to
other officers of the Bank.
SECTION 4. Authority and Responsibility. The authorities and
responsibilities of all officers, in addition to those specifically prescribed
herein, shall be those usually pertaining to their respective offices, or as may
be designated by the Board of Directors or by the Chairman of the Board or by
the President, or by any officer of the Bank designated by one of the foregoing.
<PAGE>
SECTION 5. Term of Office. Officers shall be appointed for an indefinite
term, and their employment may be terminated or they may be removed from office
at any time. The Board of Directors shall have authority to terminate or remove
officers of the Bank. The Chairman of the Board or the President shall have such
authority to terminate or remove officers as from time to time delegated by the
Board of Directors, and to delegate such authority further to other officers of
the Bank.
SECTION 6. Surety. All officers and employees of the Bank who shall be
responsible for any moneys, funds or valuables of the Bank shall give bond, or
be covered by a blanket bond, in such penal sum and with such security as shall
be approved by the Board, conditioned for the faithful and honest discharge of
their duties as such officers or employees and that they will faithfully apply
and account for all such moneys, funds and valuables and deliver the same on
proper demand to the order of the Board of the Bank, or to the person or persons
authorized to receive the same.
ARTICLE V
---------
SEAL
----
SECTION 1. Description. The following is a description of the Seal adopted
by the Board of the Bank:
Female with left arm resting on shield, bale of goods and sheaf of grain at
her side, ship and sea in the distance; the whole surrounded with the words,
"BANK ONE, NATIONAL ASSOCIATION".
SECTION 2. Attestation. Any instrument which is executed for and on behalf
of the Bank by its duly authorized officers may, when necessary, be attested and
sealed with the corporate seal by any officer of the Bank other than the officer
who executes such instrument on behalf of the Bank.
ARTICLE VI
----------
TRANSFERS OF REAL ESTATE
------------------------
Any Vice President or higher ranking officer shall have authority on behalf
of and in the name of the Bank, to execute any document or instrument and to
take action which may be necessary or appropriate to purchase, convey, lease, or
otherwise affect any real estate or interest in real estate owned or to be owned
by the Bank; provided, however, any document or instrument purchasing, conveying
or leasing real estate used or to be used by the Bank as banking facilities must
be executed by a Senior Vice President or higher ranking officer, or any other
officer designated by any of the foregoing. Any Assistant Vice President or
higher ranking officer shall have authority to execute and deliver on behalf of
and in the name of the Bank, releases of mortgages or trust deeds.
<PAGE>
ARTICLE VII
-----------
STOCK AND STOCK CERTIFICATES
----------------------------
SECTION 1. Increase of Stock. In the event of any increase in the capital
stock of the Bank the preemptive rights of the shareholders in respect of any
such increased stock shall be as set forth in Article FIFTH of the Articles of
Association.
Any warrants or certificates issuable to shareholders in connection with
any increase of the capital stock of the Bank, shall be delivered to the
respective shareholders entitled thereto, either by hand or by mail, first-class
postage prepaid, addressed to their respective addresses as shown on the books
of the Bank.
If, in the event of a sale of additional shares, any subscription rights
shall not have been exercised at the expiration of the specified subscription
period, such unsubscribed new shares may be issued and sold at such price, not
less than the par value thereof, to such persons and on such terms as the Board
of Directors may determine.
SECTION 2. Transfers of Stock. The stock of the Bank shall be assignable
only upon the books of the Bank, subject to the restrictions of the Act, and a
transfer book shall be kept in which all assignments and transfers of stock
shall be made. Transfers of stock may be suspended preparatory to any election
or payment of any dividends.
SECTION 3. Certificates of Stock. Certificates of stock signed by any Vice
President or higher ranking officer and the Cashier or any Assistant Cashier may
be issued to shareholders, and the Certificates shall state upon the face
thereof that the stock is transferable only upon the books of the Bank. If such
Certificates are manually countersigned by two other officers of the Bank, the
signatures of the officers designated in the preceding sentence may be
facsimiles, engraved or printed. In case any officer who has signed or whose
facsimile signature has been placed upon such Certificates shall have ceased to
be such officer before such Certificates are issued, they may be issued by the
Bank with the same effect as if such officer had not ceased to be such at the
date of issue.
In case of transfer of stock, new Certificates of stock shall not be
issued until other Certificate or Certificates of stock of an equal amount shall
first have been surrendered and cancelled.
Any one of the following officers of the Bank: the Chairman of the Board,
the President, or any Vice Chairman of the Board is each hereby authorized to
cause new Certificates of stock of the Bank to be issued to replace Certificates
reported to have been lost, stolen or destroyed, upon receipt of: (a)
appropriate affidavit or affidavits setting forth whether the Certificates were
lost, stolen or destroyed and the circumstances thereof, and (b) a bond or bonds
(blanket or otherwise) or an agreement or agreements of indemnity, sufficient in
the opinion of any of such officers to protect the interests of the Bank issuing
such new Certificates.
ARTICLE VIII
------------
BANKING HOURS
-------------
The Bank shall be open for business during such days of the year and for
such hours as the Board of Directors or any officer of the Bank designated by
the Board of Directors may from time to time determine.
<PAGE>
ARTICLE IX
----------
CONTRACTS, CERTIFICATES OF DEPOSIT AND NOTES
--------------------------------------------
SECTION 1. Execution of Contracts. Any officer of the bank and such other
persons as may be authorized by the Board of Directors are severally and
respectively authorized to execute documents and to take action in the Bank's
name in connection with any and all transactions conducted in the ordinary
course of business of the Bank.
SECTION 2. Certificates of Deposit and Notes. Notwithstanding the
foregoing, all certificates of deposits and notes evidencing obligations of the
Bank shall be signed either manually or by facsimile signature by any officer of
the Bank, and, if such signature is not a manual signature, shall be validated
by the manual signature of another officer of the Bank whose signature does not
already appear on said certificate of deposit or note or by the authorized
officers of corporate fiduciaries or agents with whom the Board of Directors may
from time to time by resolution authorize the officers of the Bank to contract
for services in connection with the validation and delivery of certificates of
deposit or notes issued by the Bank.
ARTICLE X
---------
VOTING RIGHTS
-------------
The vote of the Bank as stockholder in any corporation in which it may
hold stock or upon any securities carrying voting rights which it shall have the
right to vote in its individual capacity as a Bank, shall be cast at any
stockholders' or shareholders' meeting by any Vice President or higher ranking
officer, or the Cashier, in person, or by some person or persons authorized by
written proxy signed by one of said officers.
In all cases where shares of stock or other securities carrying voting
rights and owned by the Bank shall be held in the name of a nominee of the Bank,
any Vice President or higher ranking officer, or the Cashier, may authorize such
nominee to vote such stock or other securities in person, either unconditionally
or upon such terms, limitations, or conditions as such officer may direct, or
any such officer may authorize such nominee to execute a proxy to vote such
shares of stock or other securities carrying voting rights, either
unconditionally or upon such terms, conditions and/or limitations as such
officer shall approve.
ARTICLE XI
----------
EXAMINATIONS
------------
It shall be the duty of the Auditor to examine, from time to time, the
various operations of the Bank, verify its assets and liabilities, and perform
such other procedures as are required to determine that the accounting records
are accurate and to ascertain whether the Bank is in a sound and solvent
condition. Major discrepancies and defalcations shall be reported to the Board
promptly and other reports shall be made directly to the Board when deemed
appropriate either by the Auditor or the Board. In the event of the death,
resignation, absence or inability of the Auditor, the Board of Directors shall
appoint a competent person who shall make such examinations and reports, pending
the election of a successor to the Auditor or the return of the Auditor to his
duties.
<PAGE>
ARTICLE XII
-----------
BONDS OF INDEMNITY
------------------
Bonds of indemnity given to secure the issuance of duplicate or substitute
notes, bonds, stock certificates, checks, debentures or other securities which
may have been lost, destroyed or stolen or to secure the payment of any such
lost, destroyed or stolen securities or to secure the payment by the Bank of
funds deposited by any public authorities, shall be executed by any Assistant
Vice President or higher ranking officer, and, if required, sealed with the
corporate seal and attested by some other officer of the Bank.
ARTICLE XIII
------------
AUTHORITY TO SELL STOCKS, BONDS, ETC.
-------------------------------------
SECTION 1. U.S. Obligations. Any Assistant Vice President or higher
ranking officer may at any time, in his discretion, sell, assign and transfer
any and all United States bonds now standing, or which may hereafter stand, in
the name of the Bank, and to appoint one or more attorneys for that purpose.
SECTION 2. Other Obligations. Any Assistant Vice President or higher
ranking officer may at any time, in his discretion, sell, assign and transfer
any and all notes, bonds, certificates of indebtedness or obligations of any
corporation, firm or individual, which said notes, bonds, certificates of
indebtedness or obligations are now registered, or may hereafter be registered,
in the name of, or for the benefit of, the Bank, or are payable or indorsed to
the Bank.
SECTION 3. Stock. Any Assistant Vice President or higher ranking officer
may at any time in his discretion, sell, assign and transfer to any assignee or
transferee, for and on behalf of the Bank and in its name, any and all shares of
capital stock of any corporation or corporations held by the Bank.
ARTICLE XIV
-----------
FIDUCIARY ACTIVITIES
--------------------
1. Authority to Sign as Registrar, Transfer Agent, etc. Any officer of the
Bank shall have the right to sign, countersign, certify, register, authenticate
and identify all bonds, notes, interim certificates, and depositary receipts,
warrants, participation certificates, certificates of stock and similar
instruments for or in respect of which the Bank may be acting as Trustee,
Registrar, Transfer Agent or otherwise.
2. Authority to Vote Stock. The vote of the Bank as stockholder in any
corporation or mutual fund in which it may hold capital stock in any fiduciary
capacity, unless the governing instrument directs otherwise, may be voted by any
officer of the Bank in person, electronically or by written proxy signed by one
of said officers.
3. Authority to Sell, Assign and Transfer Stocks, etc. Any officer of the
Bank may sell, assign and transfer to any assignee or transferee for the Bank
and in its name, any and all shares of the capital stock or other securities and
obligations of any individual or entity held by the Bank in any fiduciary
capacity, and sign and deliver any instruments with respect to any such items.
4. Authority to Sign Checks and Other Instruments. Any officer of the Bank
is authorized to sign for and on behalf of the Bank: checks against any account
or accounts of any organizational unit of the Bank exercising fiduciary powers;
petitions; schedules; accounts; reports; receipts for funds or securities
deposited with the Bank as fiduciary and all instruments or documents that may
be necessary or desirable in connection with the execution of any fiduciary
powers of the Bank.
5. Delegation of Authority. Anything in this Article XIV to the contrary
notwithstanding, the Chairman of the Board or President is authorized to
designate in writing such persons as shall be authorized in the name of the Bank
to sign or countersign any or all of the documents and instruments enumerated in
this
<PAGE>
Article XIV relating to transactions conducted in connection with the execution
of any fiduciary powers of the Bank.
ARTICLE XV
----------
AMENDMENT OF BY-LAWS
--------------------
These By-Laws may be changed or amended by the vote of a majority of the
directors present at any regularly constituted meeting of the Board of
Directors.
ARTICLE XVI
-----------
EMERGENCY OPERATION OF BANK
---------------------------
In the event of an emergency declared by the President of the United
States or the person performing his functions, due to threatened or actual enemy
attack or disaster, the officers and employees of the Bank will continue to
conduct the affairs of the Bank under such guidance from the directors as may be
available, except as to matters which by statute require specific approval of
the Board of Directors, and subject to conformance with any governmental
directives during the emergency.
ARTICLE XVII
------------
DELEGATION OF AUTHORITY
-----------------------
Each of the Chairman of the Board, the President, any Vice Chairman of the
Board and the Cashier of the Bank are severally and respectively authorized to
designate in writing such persons who shall be authorized in the name and on
behalf of the Bank to sign any document or instrument, including certificates of
deposit and notes, and to take action which may be necessary or appropriate to
the conduct of the Bank's business, in its individual capacity or any other
capacity. Any such authorization to sign such document or instrument and to take
any action may be general or limited as is determined in the discretion of the
Chairman of the Board, the President, any Vice Chairman of the Board or the
Cashier.
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
March 3, 2000
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Household
Finance Corporation and Bank One, National Association, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon its
request therefor.
Very truly yours,
Bank One, National Association
By /s/ Steven M. Wagner
---------------------------------
Steven M. Wagner
First Vice President
<PAGE>
EXHIBIT 7
<TABLE>
<CAPTION>
Legal Title of Bank: Bank One, NA Call Date: 12/31/99 ST-BK: 17-1630 FFIEC 031
<S> <C> <C>
Address: 1 Bank One Plaza, Ste 0303 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Consolidated Report of Condition for Insured Commercial and State-Chartered
Savings Banks for December 31, 1999
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in thousands C400
----
RCFD BIL MIL THOU
---- ------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A): RCFD
----
a. Noninterest-bearing balances and currency and coin(1).......... 0081 5,055,227 1.a
b. Interest-bearing balances(2)................................... 0071 6,267,008 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)......... 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)... 1773 10,171,065 2.b
3. Federal funds sold and securities purchased under agreements to
resell............................................................ 1350 9,133,306 3.
4. Loans and lease financing receivables:
RCFD
----
a. Loans and leases, net of unearned income (from Schedule RC-C).. 2122 54,113,895 4.a
b. LESS: Allowance for loan and lease losses...................... 3123 485,672 4.b
c. LESS: Allocated transfer risk reserve.......................... 3128 0 4.c
d. Loans and leases, net of unearned income, allowance, and RCFD
----
reserve (item 4.a minus 4.b and 4.c)........................... 2125 53,628,223 4.d
5. Trading assets (from Schedule RD-D) 3545 5,625,628 5.
6. Premises and fixed assets (including capitalized leases).......... 2145 728,892 6.
7. Other real estate owned (from Schedule RC-M)...................... 2150 2,661 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M).................................... 2130 225,055 8.
9. Customers' liability to this bank on acceptances outstanding...... 2155 318,645 9.
10. Intangible assets (from Schedule RC-M)............................ 2143 222,903 10.
11. Other assets (from Schedule RC-F)................................. 2160 2,515,075 11.
12. Total assets (sum of items 1 through 11).......................... 2170 93,893,688 12.
</TABLE>
- ------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Legal Title of Bank: Bank One, NA Call Date: 12/31/99 ST-BK: 17-1630 FFIEC 031
Address: 1 Bank One Plaza, Ste 0303 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands
-----------------------------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of columns A and C ----
from Schedule RC-E, part 1)....................................................... 2200 26,310,375 13.a
(1) Noninterest-bearing(1)........................................................ 6631 11,553,564 13.a1
(2) Interest-bearing.............................................................. 6636 14,756,811 13.a2
RCFN
b. In foreign offices, Edge and Agreement subsidiaries, and ----
IBFs (from Schedule RC-E, part II)................................................ 2200 28,917,958 13.b
(1) Noninterest bearing........................................................... 6631 623,837 13.b1
(2) Interest-bearing.............................................................. 6636 28,294,121 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 9,453,894 14
15. a. Demand notes issued to the U.S. Treasury RCON 2840 1,263,434 15.a
b. Trading Liabilities(from Schedule RC-D)........................................... RCFD 3548 3,262,946 15.b
16. Other borrowed money: RCFD
----
a. With original maturity of one year or less........................................ 2332 12,462,976 16.a
b. With original maturity of more than one year..................................... A547 1,049,525 16.b
c. With original maturity of more than three years .................................. A548 477,923 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding.............................. 2920 318,645 18.
19. Subordinated notes and debentures.................................................... 3200 3,250,000 19.
20. Other liabilities (from Schedule RC-G)............................................... 2930 1,377,838 20.
21. Total liabilities (sum of items 13 through 20)....................................... 2948 88,145,514 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus........................................ 3838 0 23.
24. Common stock......................................................................... 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock)............................. 3839 3,660,673 25.
26. a. Undivided profits and capital reserves............................................ 3632 2,057,661 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities........................................................................ 8434 (170,996) 26.b
c. Accumulated net gains (losses) on cash flow hedges................................ 4336 0 26.c
27. Cumulative foreign currency translation adjustments.................................. 3284 (22) 27.
28. Total equity capital (sum of items 23 through 27).................................... 3210 5,748,174 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)................................................ 3300 93,893,688 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. Indicate in the box at the right the number of the
statement below that best describes the most comprehensive
level of auditing work performed for the bank by
independent external auditors as of any date ---------------- Number
during 1996.................................................... RCFD 6724 N/A M.1.
----------------
1 = Independent audit of the bank conducted in accordance 4. = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by
submits a report on the consolidated holding company external auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE>
Exhibit 25.2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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) ______
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(State of Incorporation) (I.R.S. Employer Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Carolyn Potter, Harris Trust and Savings Bank,
311 West Monroe Street, Chicago, Illinois, 60606
312-461-2531 phone 312-461-3525 facsimile
(Name, address and telephone number for agent for service)
HOUSEHOLD FINANCE CORPORATION
(Name of obligor)
Delaware 36-1239445
(State of Incorporation) (I.R.S. Employer Identification No.)
2700 Sanders Road
Prospect heights, Illinois 60070
(Address of principal executive offices)
Debt Securities
(Title of indenture securities)
Wholly owned subsidiary of Harris Bankcorp, Inc.
<PAGE>
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
West 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.
Harris Trust and Savings Bank is authorized to exercise corporate
trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the Trustee,
describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. thru 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee is now in effect
which includes the authority of the trustee to commence business and to
exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between Harris
Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc. which
constitutes the articles of association of the Trustee as now in effect
and includes the authority of the Trustee to commence business and to
exercise corporate trust powers was filed in connection with the
Registration Statement of Louisville Gas and Electric Company, File No.
2-44295, and is incorporated herein by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in connection
with the Registration Statement of Commercial Federal Corporation, File
No. 333-20711, and is incorporated herein by reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority.
(included as Exhibit B on page 3 of this statement)
Wholly owned subsidiary of Harris Bankcorp, Inc.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a 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, on the 10th day of March, 2000.
HARRIS TRUST AND SAVINGS BANK
By: /s/ C. Potter
-----------------------------
C. Potter
Assistant Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /s/ C. Potter
-----------------------------
C. Potter
Assistant Vice President
Wholly owned subsidiary of Harris Bankcorp, Inc.
<PAGE>
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of September 30, 1999, as published in accordance with
a call made by the State Banking Authority and by the Federal Reserve Bank of
the Seventh Reserve District.
[LOGO OF HARRIS BANK]
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on September 30, 1999, a state banking institution organized and
operating under the banking laws of this State and a member of the Federal
Reserve System. Published in accordance with a call made by the Commissioner of
Banks and Trust Companies of the State of Illinois and by the Federal Reserve
Bank of this District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
THOUSANDS
ASSETS OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Non-interest bearing balances and currency and coin..................... $ 1,139,804
Interest bearing balances............................................... $ 223,943
Securities:....................................................................
a. Held-to-maturity securities $ 0
b. Available-for-sale securities $ 5,773,313
Federal funds sold and securities purchased under agreements to resell $ 148,650
Loans and lease financing receivables:
Loans and leases, net of unearned income................................ $9,752,500
LESS: Allowance for loan and lease losses.............................. $ 111,660
----------
Loans and leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b).................................................... $ 9,640,840
Assets held in trading accounts................................................ $ 193,520
Premises and fixed assets (including capitalized leases)....................... $ 271,847
Other real estate owned........................................................ $ 339
Investments in unconsolidated subsidiaries and associated companies............ $ 0
Customer's liability to this bank on acceptances outstanding................... $ 44,067
Intangible assets.............................................................. $ 245,968
Other assets................................................................... $ 1,328,114
-------------------------
TOTAL ASSETS $19,010,405
=========================
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
Deposits:
<S> <C> <C>
In domestic offices.......................................................... $ 9,579,731
Non-interest bearing.................................................... $2,953,755
Interest bearing........................................................ $6,625,976
In foreign offices, Edge and Agreement subsidiaries, and IBF's............... $ 1,396,781
Non-interest bearing.................................................... $ 21,682
Interest bearing........................................................ $1,375,099
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 IBF's:
Federal funds purchased & securities sold under agreements to repurchase....... $ 3,951,113
Trading Liabilities 91,252
Other borrowed money:..........................................................
a. With remaining maturity of one year or less $ 1,978,203
b. With remaining maturity of more than one year $ 0
Bank's liability on acceptances executed and outstanding $ 44,067
Subordinated notes and debentures.............................................. $ 225,000
Other liabilities.............................................................. $ 481,642
-------------------------
TOTAL LIABILITIES $17,747,789
=========================
EQUITY CAPITAL
Common stock................................................................... $ 100,000
Surplus........................................................................ $ 609,913
a. Undivided profits and capital reserves..................................... $ 657,705
b. Net unrealized holding gains (losses) on available-for-sale securities ($105,002)
-------------------------
TOTAL EQUITY CAPITAL $ 1,262,616
-------------------------
Total liabilities, limited-life preferred stock, and equity capital............ $19,010,405
=========================
</TABLE>
I, Christy Wipper, Vice President 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.
CHRISTY WIPPER
10/26/99
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
ALAN G. McNALLY,
EDWARD W. LYMAN,
LEO M. HENIKOFF
Directors.
4
<PAGE>
Exhibit 25.3
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________
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)___
_______________________________________________________
U.S. BANK TRUST NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)
36-4046888
I.R.S. Employer Identification No.
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
(Address of principal executive offices) (Zip Code)
Terry L . McRoberts, President
U.S. Bank Trust National Association
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Telephone (312) 228-9418
(Name, address and telephone number of agent for service)
HOUSEHOLD FINANCE CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 36-1239445
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2700 Sanders Road
Prospect Heights, IL 60070
(Address of Principal Executive Offices) (Zip Code)
Debt Securities and Warrants to Purchase Debt Securities
(Title of the Indenture Securities)
================================================================================
<PAGE>
FORM T-1
--------
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.
Comptroller of the Currency
Washington, D.C.
b) Whether it is authorized to exercise corporate trust powers.
Yes
Item 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the
Trustee, describe each such affiliation.
None
Items 3-15 Not applicable because, to the best of Trustee's knowledge, the
Trustee is not a trustee under any other indenture under which any
other securities or certificates of interest or participation in any
other securities of the obligor are outstanding and there is not,
nor has there been, a default with respect to securities issued
under this indenture.
Item 16. LIST OF EXHIBITS: List below all exhibits filed as a part of this
statement of eligibility and qualification.
1. A copy of the Articles of Association of the Trustee now in effect,
incorporated herein by reference to Exhibit 1 of Form T-1,
Registration No. 333-18235.*
2. A copy of the certificate of authority of the Trustee to commence
business, incorporated herein by reference to Exhibit 2 of Form T-
1, Registration No. 333-18235.*
3. A copy of the certificate of authority of the Trustee to exercise
corporate trust powers, incorporated herein by reference to Exhibit
3 of Form T-1, Registration No. 333-18235.*
4. A copy of the existing bylaws of the Trustee, as now in effect,
incorporated herein by reference to Exhibit 4 of Form T-1,
Registration No. 333-18235.*
5. Not applicable.
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 of Form T-1, Registration No. 333-18235.*.
7. Report of Condition of the Trustee as of September 30, 1999,
published pursuant to law or the requirements of its supervising or
examining authority.
8. Not applicable.
9. Not applicable.
* See* at top of page 3
2
<PAGE>
* Exhibits thus designated are incorporated herein by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 filed by the Trustee with
the Securities and Exchange Commission with the specific references noted.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
Trustee, U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association
organized and existing under the laws of the United States of America, has duly
caused this statement of eligibility and qualification to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Chicago, State of Illinois on the 3rd day of March, 2000.
U.S. BANK TRUST NATIONAL ASSOCIATION
By: /s/ K. Wendy Kumar
-------------------
Vice President and Assistant Secretary
3
<PAGE>
Exhibit 7
---------
U.S. Bank Trust National Association
Statement of Financial Condition
As of 12/31/1999
($000's)
<TABLE>
<CAPTION>
<S> <C>
12/31/1999
------------
Assets
Cash and Due From Depository Institutions $ 64,515
Federal Reserve Stock 3,731
Fixed Assets 72
Intangible Assets 40,980
Other Assets 3,282
------------
Total Assets $ 112,580
Liabilities
Other Liabilities 1,789
------------
Total Liabilities $ 1,789
Equity
Common and Preferred Stock 1,000
Surplus 106,712
Undivided Profits 3,079
Net unrealized holdin gains on available for sale securities 0
------------
Total Equity Capital $ 110,791
Total Liabilities and Equity Capital $ 112,580
</TABLE>
- -------------------------------------------------------------------------------
To the best of the undersigned's determination, as of this date the above
financial information is true and correct.
U.S. Bank Trust National Association
By:
---------------------
Vice President
Date: March 11, 2000
4
<PAGE>
Exhibit 7
---------
U.S. Bank Trust National Association
Statement of Financial Condition
As of 12/31/1999
($000's)
<TABLE>
<CAPTION>
<S> <C>
12/31/1999
------------
Assets
Cash and Due From Depository Institutions $ 64,515
Federal Reserve Stock 3,731
Fixed Assets 72
Intangible Assets 40,980
Other Assets 3,282
------------
Total Assets $ 112,580
Liabilities
Other Liabilities 1,789
------------
Total Liabilities $ 1,789
Equity
Common and Preferred Stock 1,000
Surplus 106,712
Undivided Profits 3,079
Net unrealized holdin gains on available for sale securities 0
------------
Total Equity Capital $ 110,791
Total Liabilities and Equity Capital $ 112,580
</TABLE>
- --------------------------------------------------------------------------------
To the best of the undersigned's determination, as of this date the above
financial information is true and correct.
U.S. Bank Trust National Association
By:\s\ K. Wendy Kumar
------------------
Vice President
Date: March 11, 2000
5
<PAGE>
Exhibit 25.4
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
HOUSEHOLD FINANCE CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 36-1239445
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
2700 Sanders Road
Prospect Heights, Illinois 60070
(Address of principal executive offices) (Zip code)
______________________
Debt Securities and Warrants to Purchase Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
Name Address
- ----------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-
29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York (formerly
Irving Trust Company) as now in effect, which contains the authority to
commence business and a grant of powers to exercise corporate trust
powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with
Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed
with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 3rd day of March, 2000.
THE BANK OF NEW YORK
By: /s/MICHAEL CULHANE
----------------------------------------
Name: MICHAEL CULHANE
Title: VICE PRESIDENT
<PAGE>
- -------------------------------------------------------------------------------
Consolidated Report of Condition of EXHIBIT 7
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries
a member of the Federal Reserve System, at the
close of business September 30, 1999, published
in accordance with a call made by the Federal
Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS In Thousands
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin................. $ 6,394,412
Interest-bearing balances.......................................... 3,966,749
Securities:
Held-to-maturity securities........................................ 805,227
Available-for-sale securities...................................... 4,152,260
Federal funds sold and securities
purchased under agreements to resell............................... 1,449,439
Loans and lease financing receivables:
Loans and leases, net of unearned income............. 37,900,739
LESS: Allowance for loan and lease losses............. 572,761
LESS: Allocated transfer risk reserve................. 11,754
Loans and leases, net of unearned income, allowance and reserve.... 37,316,224
Trading Assets....................................................... 1,646,634
Premises and fixed assets (including capitalized leases)............. 678,439
Other real estate owned.............................................. 11,571
Investments in unconsolidated subsidiaries and associated companies.. 183,038
Customers' liability to this bank on acceptances outstanding......... 349,282
Intangible assets.................................................... 790,558
Other assets......................................................... 2,498,658
----------
Total assets......................................................... $60,242,491
===========
LIABILITIES
Deposits:
In domestic offices................................................ $26,030,231
Noninterest-bearing................................. $11,348,986
Interest-bearing.................................... 14,681,245
In foreign offices, Edge and Agreement subsidiaries, and IBFs........ 18,530,950
Noninterest-bearing................................. 156,624
Interest-bearing.................................... 18,374,326
Federal funds purchased and securities
sold under agreements to repurchase................................ 2,094,678
Demand notes issued to the U.S. Treasury............................. 232,459
Trading liabilities.................................................. 2,081,462
Other borrowed money:
With remaining maturity of one year or less........................ 863,201
With remaining maturity of more than one year
through three years.............................................. 449
With remaining maturity of more than
three years...................................................... 31,080
Bank's liability on acceptances executed and outstanding............. 351,286
Subordinated notes and debentures.................................... 1,308,000
Other liabilities.................................................... 3,055,031
----------
Total liabilities.................................................... 54,578,827
----------
EQUITY CAPITAL
Common stock......................................................... 1,135,284
Surplus.............................................................. 815,314
Undivided profits and capital reserves............................... 3,759,164
Net unrealized holding gains (losses) on
available-for-sale securities...................................... ( 15,440)
Cumulative foreign currency translation adjustments.................. ( 30,658)
-----------
Total equity capital............................................... $ 5,663,664
-----------
Total liabilities and equity capital............................... $60,242,491
============
</TABLE>
I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A Renyi )
Alan R. Griffith ) Directors
Gerald L. Hassell )
- --------------------------------------------------------------------------------
<PAGE>
Exhibit 25.5
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
---------------------
ALLFIRST BANK
(Exact name of trustee as specified in its charter)
Maryland 52-0312840
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or formation)
25 South Charles Street
Baltimore, Maryland 21201
(Address of principal (Zip code)
executive offices)
Gregory K. Thoreson, General Counsel
ALLFIRST Bank
25 South Charles Street
Baltimore, Maryland 21201
(410) 244-3800
(Name, address and telephone number of agent
for service of process)
HOUSEHOLD FINANCE CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE 36-1239445
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or formation)
2700 Sanders Road
Prospect Heights, IL 60070
(Address of principal (Zip code)
executive offices)
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.
Federal Reserve Bank of Richmond, Richmond, Virginia 23261.
Maryland Bank Commission, Baltimore, Maryland 21202
Federal Deposit Insurance Corporation, Washington, D.C. 20429.
(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.
None.
(Because responses from the obligor and the underwriters have not yet been
received, Item 2 is at the date hereof based upon incomplete information
but is believed to be correct and may be considered to be complete unless
modified by an amendment to this Form T-1).
Item 16. List of Exhibits.
List below all exhibits filed as a part of this statement of eligibility.
Exhibit
- -------
1 A copy of the articles of incorporation, as amended, of the trustee as
now in effect is incorporated herein by reference to Exhibit 1 to Form
T-1
2 A copy of the certificate of authority of the trustee to commence
business is incorporated herein by reference to Exhibit T1-2 to
Form T-1 (Exhibit 26 to the Registration Statement on Form S-2,
Registration No. 2-98697)
3 A copy of the authorization of the trustee to exercise corporate trust
powers is incorporated herein by reference to Exhibit T1-3 of
Amendment No. 1 to Form T-1 (Exhibit 26 to the Registration Statement
on Form S-3, Registration No. 33-18373)
4 A copy of the existing bylaws of the trustee is incor-
<PAGE>
porated herein by reference to Exhibit 4 to Form T-1
5 Not applicable
6 The consent of the trustee required by Section 321(b) of the Act
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
8 Not applicable
9 Not applicable
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Allfirst Bank, a corporation organized and existing under the laws of
the State of Maryland, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of Baltimore and State of Maryland, on March 15, 2000.
ALLFIRST BANK
By: /s/ Donald C. Hargadon
-------------------------
Donald C. Hargadon
Assistant Vice President
<PAGE>
Exhibit 1
- ---------
FMB BANK
ARTICLES OF AMENDMENT
FMB Bank, a Maryland state chartered commercial bank, having its principal
office in Baltimore, Maryland (the "Bank") hereby certifies that:
FIRST: Article II of the charter of the Bank is hereby amended to read in
its entirety as follows:
"ARTICLE II
The name of this bank (hereinafter called the "Bank") shall be "Allfirst
Bank"."
SECOND: The amendment does not increase the authorized capital stock of the
Bank.
THIRD: The foregoing amendment to the charter of the Bank has been advised
by the Board of Directors and approved by the stockholders of the Bank.
FOURTH: The foregoing amendment shall become effective at 9:00 a.m. local
time in Baltimore, Maryland on June 28, 1999.
IN WITNESS WHEREOF, FMB Bank has caused these Articles of Amendment to be
signed on its behalf by its President and Treasurer as of this 3rd day of June,
1999.
FMB BANK
/s/ Susan C. Keating
-------------------------------
By: Susan C. Keating, President
/s/ David M. Cronin
--------------------------------
By: David M. Cronin, Treasurer
THE UNDERSIGNED, President and Treasurer of FMB Bank, who executed the
foregoing Articles of Amendment on behalf of FMB Bank of which this certificate
is made a part, hereby acknowledge the foregoing Articles of Amendment to be the
corporate act of FMB Bank and hereby certify that the matters and facts set
forth herein with respect to the authorization and approval thereof by FMB Bank
are true in all material respects under the penalties of perjury.
/s/ Susan C. Keating
-------------------------------
Susan C. Keating, President
/s/ David M. Cronin
--------------------------------
David M. Cronin, Treasurer
<PAGE>
[LETTERHEAD]
CERTIFICATE OF APPROVAL
-----------------------
The foregoing Articles of Amendment for the FMB Bank, Baltimore MD, are
hereby approved this 8th day of June 1999.
/s/ Nancy L. Mitchell 6/8/99
- -------------------------------- -----------------
Nancy L. Mitchell Date
Deputy Commissioner
Division of Financial Regulation
State of Maryland
[LOGO]
<PAGE>
FNB BANK
ARTICLES OF AMENDMENT
FNB Bank, a Maryland state chartered commercial bank, having its principal
office in Baltimore, Maryland (the "Bank") hereby certifies that:
FIRST: Article II of the charter of the Bank is hereby amended to read in
its entirety as follows:
"ARTICLE II
The name of this bank (hereinafter called the "Bank") shall be "FMB Bank"."
SECOND: The amendment does not increase the authorized capital stock of the
Bank.
THIRD: The foregoing amendment to the charter of the Bank has been advised
by the Board of Directors and approved by the stockholders of the Bank.
IN WITNESS WHEREOF, FNB Bank has caused these Articles of Amendment to be
signed on its behalf by its President and Treasurer as of this 31st day of
December, 1998.
FNB BANK
/s/ Frank P. Bramble
---------------------------------
By: Frank P. Bramble, President
/s/ Jerome W. Evans
---------------------------------
By: Jerome W. Evans, Treasurer
THE UNDERSIGNED, President and Treasurer of FNB Bank, who executed the
foregoing Articles of Amendment on behalf of FNB Bank of which this certificate
is made a part, hereby acknowledge the foregoing Articles of Amendment to be the
corporate act of FNB Bank and hereby certify that the matters and facts set
forth herein with respect to the authorization and approval thereof by FNB Bank
are true in all material respects under the penalties of perjury.
/s/ Frank P. Bramble
---------------------------------
Frank P. Bramble, President
/s/ Jerome W. Evans
---------------------------------
Jerome W. Evans, Treasurer
<PAGE>
FMB BANK
ARTICLES OF INCORPORATION
ARTICLE I
THAT we, the undersigned incorporators, all being at least eighteen years
of age and citizens of the State of Maryland and of the United States, pursuant
to the authority granted by First Maryland Bancorp, a Maryland corporation and
the sole shareholder of The First National Bank of Maryland, a national banking
association, do hereby associate ourselves to convert such national banking
association to a commercial bank under and by virtue of the laws of the State of
Maryland, as prescribed in Title 3 of the Financial Institutions Article of the
Annotated Code of Maryland, providing for the creation, regulation, and
supervision of state banks and trust companies. The name and address of each
such incorporator is as follows:
Jeremiah E. Casey 7900 Ruxwood Road
Ruxton, Maryland 21204
Frank P. Bramble 5724 St. Albans Way
Baltimore, Maryland 21212
Jerome W. Evans 12302 Cleghorn Road
Cockeysville, Maryland 21030
Brian L. King 3609 N. Furnace Road
Jarrettsville, Maryland 21084
Gregory K. Thoreson 10326 Kettledrum Court
Ellicott City, Maryland 21042
ARTICLE II
The name of this bank (hereinafter called the "Bank") shall be "FNB Bank".
ARTICLE III
The main office of the Bank shall be in the City of Baltimore, State of
Maryland. The general business of the Bank shall be conducted at its main office
and its branches.
ARTICLE IV
The Board of Directors of the Bank shall consist of not less than five nor
more than thirty persons, the exact number of directors within such minimum and
maximum limits to be fixed and
<PAGE>
determined in accordance with the By-Laws of the Bank. The By-Laws may fix as a
mandatory retirement date for directors the annual meeting next following the
reaching of the age of 70 years.
<PAGE>
The names and residence addresses of those persons who will serve as
directors until their successors are elected and qualified are:
Jeremiah E. Casey 7900 Ruxwood Road
Ruxton, Maryland 21204
Frank P. Bramble 5724 St. Albans Way
Baltimore, Maryland 21212
Jerome W. Evans 12302 Cleghorn Road
Cockeysville, Maryland 21030
Brian L. King 3609 N. Furnace Road
Jarrettsville, Maryland 21084
Gregory K. Thoreson 10326 Kettledrum Court
Ellicott City, Maryland 21042
ARTICLE V
The authorized amount of capital stock of the Bank shall be 2,250,000
shares of Common Stock of the par value of $10.00 each, but said capital stock
may be increased or decreased from time to time, in accordance with the
provisions of the laws of Maryland. The total par value of all shares is
$22,500,000.
No holder of shares of the capital stock of any class of the Bank shall
have any preemptive or preferential right of subscription to any shares of any
class of stock of the Bank, whether now or hereafter authorized, or to any
obligations convertible into stock of the Bank, issued, or sold, nor any right
of subscription to any thereof other than such, if any, 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.
The Bank, at any time and from time to time, may authorize and issue debt
obligations, whether or not subordinated, without the approval of the
shareholders.
ARTICLE VI
The Board of Directors shall appoint one of its members President of the
Bank, who shall be Chairman of the Board, unless the Board appoints another
director to be the Chairman. The Board of Directors may also appoint another
director to be Vice Chairman of the Board. The Board of Directors shall have the
power to appoint one or more Vice Presidents and to appoint such other officers
and employees as may be necessary, convenient or appropriate to transact the
business of the Bank.
<PAGE>
The Board of Directors shall have the power to define the duties of the
officers and employees of the Bank; to fix the salaries to be paid to them; to
require bonds from them and to fix the penalty thereof; to regulate the manner
in which any increase of the capital of the Bank shall be made; to manage and
administer the business and affairs of the Bank; to make all By-Laws that it may
be lawful for them to make; and generally to do and perform all acts that it may
be legal for a Board of Directors to do and perform.
ARTICLE VII
The Board of Directors of the Bank, or any one or more shareholders owning,
in the aggregate, not less than twenty-five percent of the stock of the Bank,
may call a special meeting of shareholders at any time. Unless otherwise
provided by the laws of the Maryland, a notice of the time, place, and purpose
of every annual and special meeting of the shareholders shall be given by first-
class mail, postage prepaid, mailed at least ten days prior to the date of such
meeting to each shareholder of record at his address as shown upon the books of
the Bank.
ARTICLE VIII
The Bank shall indemnify its directors, officers and other institution
affiliated parties as provided in the By-Laws of the Bank as amended from time
to time.
ARTICLE IX
To the fullest extent permitted by Maryland law, as amended or interpreted,
no director or officer of the Bank shall be personally liable to the Bank or its
shareholders for money damages. No amendment of these Articles of Incorporation
or repeal of any of the provisions hereof shall limit or eliminate the benefits
provided to directors or officers under this Article IX with respect to any act
or omission which occurred prior to such amendment or repeal.
ARTICLE X
These Articles of Incorporation may be amended at any regular or special
meeting of the shareholders by the affirmative vote of the holders of a majority
of the stock of the Bank, unless the vote of the holders of a greater amount of
stock is required by law, and in that case by the vote of the holders of such
greater amount.
ARTICLE XI
The conversion of The First National Bank of Maryland has been duly
authorized and approved by its sole stockholder in the manner required by
federal law. The sole stockholder, acting on the authority granted by and
through a majority of the members of its
<PAGE>
Board of Directors, has signed, acknowledged and caused these Articles to be
filed by the incorporators.
ARTICLE XII
The Bank shall be a continuation of The First National Bank of Maryland, by
unbroken and uninterrupted succession. The Bank is, and shall be considered to
be, the same business and corporate entity as The First National Bank of
Maryland. The rights, franchises, and interests of The First National Bank of
Maryland in and to any property is and has become the property of the Bank,
subject to the liabilities of The First National Bank of Maryland that existed
at the effective date of these Articles of Incorporation. Such rights,
franchises, and interests include rights to all tangible and intangible assets,
franchises and interests in property of The First National Bank of Maryland,
existing at the time of the conversion, subject to all liabilities at such time
of conversion.
<PAGE>
IN WITNESS WHEREOF, we have hereunto set our hands this 11th day of
December, 1998.
/s/ Jeremiah E. Casey
-----------------------------
Jeremiah E. Casey
/s/ Frank P. Bramble
-----------------------------
Frank P. Bramble
/s/ Jerome W. Evans
-----------------------------
Jerome W. Evans
/s/ Brian L. King
-----------------------------
Brain L. King
/s/ Gregory K. Thoreson
-----------------------------
Gregory K. Thoreson
ACKNOWLEDGED AND CONSENTED to by First Maryland Bancorp through its duly
authorized officer this 11th day of December, 1998.
FIRST MARYLAND BANCORP
By: /s/ Jeremiah E. Casey
-----------------------------
Jeremiah E. Casey,
Chairman of the Board
<PAGE>
STATE OF MARYLAND
CITY OF BALTIMORE, TO WIT:
I HEREBY CERTIFY that on this 11th day of December, 1998, before me, the
undersigned, a Notary Public in and or the state and city aforesaid, personally
appeared Jeremiah E. Casey, Frank P. Bramble, Jerome W. Evans, Brian L. King and
Gregory K. Thoreson, known to me, (or satisfactorily proven) to be the persons
whose names are subscribed to the foregoing instrument, and they each and
severally acknowledged the foregoing Articles of Incorporation to be their act
and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and Notarial Seal the day
and year last above written.
/s/ Debra A. Kollias
- -----------------------------
Notary Public
My Commission Expires 6-1-2000
--------
THE UNDERSIGNED, Chairman of the Board of First Maryland Bancorp, who
executed on behalf of First Maryland Bancorp the Articles of Incorporation of
which this certificate is made a part, hereby acknowledges in the name and on
behalf of First Maryland Bancorp the foregoing Articles of Incorporation to be
the corporate act of such corporation and hereby certifies that the matters and
facts set forth herein with respect to the authorization and approval thereof by
First Maryland Bancorp are true in all material respects under the penalties of
perjury.
/s/ Jeremiah E. Casey
-----------------------------
Jeremiah E. Casey,
Chairman of the Board
<PAGE>
Exhibit 4
---------
ALLFIRST BANK
BY-LAWS
ARTICLE I.
SHAREHOLDERS
SECTION 1.01. Annual Meeting. The Bank shall hold an annual meeting of its
shareholders to elect directors and transact any other business within its
powers, either at 11:45 a.m. on the third Tuesday of March in each year if not a
legal holiday, or at such other time on such other day falling on or before the
60th day thereafter as shall be set by the Board of Directors. Except to the
extent the Articles of Incorporation or applicable law provides otherwise, any
business may be considered at an annual meeting without the purpose of the
meeting having been specified in the notice. Failure to hold an annual meeting
does not invalidate the Bank's existence or affect any otherwise valid corporate
acts.
SECTION 1.02. Special Meeting. The Chairman of the Board, Chief Executive
Officer, a majority of the Board of Directors, or shareholders owning, in the
aggregate, not less than 25% of the stock of the Bank may call a special meeting
of shareholders at any time in the interval between annual meetings.
SECTION 1.03. Place of Meetings. Meetings of shareholders shall be held at
such place in the United States as may be designated from time to time by the
Board of Directors. In the absence of such designation, the meetings shall be
held at the main office of the Bank.
SECTION 1.04. Notice of Meetings; Waiver of Notice. Not less than ten nor
more than 90 days before each shareholders' meeting, the Secretary or an
Assistant Secretary shall give written notice of the meeting to each shareholder
entitled to vote at the meeting. The notice shall state the time and place of
the meeting and, if the meeting is a special meeting or notice of the purpose is
required by statute, the purpose of the meeting. Notice is given to a
shareholder when it is personally delivered to him or mailed to him at his
address as it appears on the records of the Bank. A meeting of shareholders
convened on the date for which it was called may be adjourned from time to time
without further notice to a date not more than 120 days after the original
record date.
SECTION 1.05. Nominations for Director. Nominations for election to the
Board of Directors may be made by the Board of Directors or by any holder of
shares entitled to vote for the election of directors. Nominations not made in
accordance herewith may be disregarded by the chairman of the meeting.
<PAGE>
SECTION 1.06. Quorum; Voting. Unless the Articles of Incorporation or
applicable law provides otherwise, at a meeting of shareholders the presence in
person or by proxy of shareholders entitled to cast a majority of all the votes
entitled to be cast at the meeting constitutes a quorum, and a majority of all
the votes cast at a meeting at which a quorum is present is sufficient to
approve any matter which properly comes before the meeting. In the absence of a
quorum, the shareholders present in person or by proxy, by majority vote and
without notice other than by announcement, may adjourn the meeting from time to
time until a quorum shall attend. At any such reconvenement of an adjourned
meeting at which a quorum shall be present, any business may be transacted which
might have been transacted at the meeting as originally notified. In the event
that at any meeting a quorum exists for the transaction of some business but
does not exist for the transaction of other business, the business as to which a
quorum is present may be transacted by the shareholders present in person or by
proxy who are entitled to vote thereon.
SECTION 1.07. General Right to Vote; Proxies. Unless the Articles of
Incorporation provides for a greater or lesser number of votes per share or
limit or deny voting rights, each outstanding share of stock, regardless of
class, is entitled to one vote on each matter submitted to a vote at a meeting
of shareholders. In all elections for directors, each share of stock may be
voted for as many individuals as there are directors to be elected and for whose
election the share is entitled to be voted with cumulative voting permitted. A
shareholder may vote the stock he owns of record either in person or by written
proxy signed by the shareholder or by his duly authorized attorney in fact.
Proxies shall be valid only for one meeting, to be specified therein, and any
adjournments of such meeting. Proxies shall be dated and shall be filed with the
records of the meeting.
SECTION 1.08. Conduct of Voting. At all meetings of shareholders, unless
the voting is conducted by judges, the proxies and ballots shall be received,
and all questions relating the qualification of voters and the validity of
proxies and the acceptance or rejection of votes shall be decided, by the
chairman of the meeting.
ARTICLE II.
BOARD OF DIRECTORS
SECTION 2.01. Function of Directors. The business and affairs of the Bank
shall be managed under the direction of its Board of Directors. All powers of
the Bank may be exercised by or under authority of the Board of Directors,
except as conferred on or reserved to the shareholders by the Articles of
Incorporation, applicable law or these By-Laws.
SECTION 2.02. Number of Directors. The Bank shall have at least five
directors and no more than 30 directors. A majority of
<PAGE>
the entire Board of Directors, or the shareholders, may alter the number of
directors within the range permitted herein, but the action, if taken by the
directors, may not affect the tenure of office of any director.
SECTION 2.03. Qualification of Directors. No person shall qualify or
continue to serve as a director of the Bank unless he or she owns shares of
stock of the Bank or a company which has control, directly or indirectly, of at
least 80% of the capital stock of the Bank in such amount as may be required by
law. At least a majority of the directors of the Bank shall reside in Maryland.
No person shall be eligible to stand for election as a director after attaining
70 years of age.
SECTION 2.04. Election and Tenure of Directors. At each annual meeting, the
shareholders shall elect directors to hold office until the next annual meeting
and until their successors are elected and qualify.
SECTION 2.05. Removal of Director. The shareholders may remove any
director, with or without cause, by the affirmative vote of a majority of all
the votes entitled to be cast for the election of directors.
SECTION 2.06. Vacancy on Board. A majority of the remaining directors,
whether sufficient to constitute a quorum, shall fill any vacancy on the Board
of Directors which results from any cause except an increase in the number of
directors, and a majority of the entire Board of Directors may fill a vacancy
which results from an increase in the number of directors. A director elected by
the Board of Directors to fill a vacancy serves until the next annual meeting of
shareholders and until his or her successor is elected and qualifies. A director
elected by the shareholders to fill a vacancy which results from the removal of
a director serves for the balance of the term of the removed director.
SECTION 2.07. Regular Meetings. After each meeting of shareholders at which
a Board of Directors shall have been elected, the Board of Directors so elected
shall meet as soon as practicable to take their oaths, organize and transact
other business; and in the event that no other time or place is designated by
the shareholders, the Board of Directors shall meet immediately following the
close of such shareholders' meeting at the main office of the Bank. No notice of
the first regular meeting shall be necessary if held as herein above provided.
Thereafter, regular meetings of the Board of Directors shall be held, without
notice, at the main office, on the schedule established by the Board at the
first regular meeting, or on such other schedule or at such other place as the
Board may from time to time designate.
SECTION 2.08. Special Meetings. Special meetings of the Board of Directors
may be called at any time by the Chairman of the Board or the President or by a
majority of the Board of Directors by vote at a meeting, or in writing with or
without a meeting. A
<PAGE>
special meeting of the Board of Directors shall be held on such date and at such
time and place as may be designated from time to time by the Board of Directors.
In the absence of such designation the meeting shall be held at the main office
of the Bank.
SECTION 2.09. Notice of Special Meetings. The Secretary, an Assistant
Secretary, or the secretary to the Board shall give notice to each director of
each special meeting of the Board of Directors. The notice shall include the
time and place of the meeting. Notice is given to a director when it is
delivered personally, left at the director's residence or usual place of
business, or sent by telegraph, telephone or telefax at least 24 hours before
the time of the meeting or, in the alternative by mail to his address as it
shall appear on the records of the Bank, at least 72 hours before the time of
the meeting. The notice need not state the business to be transacted at or the
purposes of any special meeting of the Board of Directors. Any meeting of the
Board of Directors may adjourn from time to time to reconvene at the same or
some other place, and no notice need be given of any such adjourned meeting
other than by announcement.
SECTION 2.10. Action by Directors. Unless the Articles of Incorporation,
applicable law or these By-Laws require a greater proportion, the action of a
majority of the directors present at a meeting at which a quorum is present is
action of the Board of Directors. A majority of the entire Board of Directors
shall constitute a quorum for the transaction of business. In the absence of a
quorum, the directors present by majority vote and without notice other than by
announcement may adjourn the meeting from time to time until a quorum shall
attend. At any such reconvenement of an adjourned meeting at which a quorum
shall be present, any business may be transacted which might have been
transacted at the original meeting.
SECTION 2.11. Compensation. The Bank may provide compensation and
reimbursement of expenses for service on the Board of Directors or on committees
thereof, pursuant to a resolution of directors. A director who serves the Bank
in any other capacity also may receive compensation for such other services
subject to any applicable restrictions on limitations imposed by law or
otherwise on related party transactions.
SECTION 2.12 Meetings by Telephone or Other Communications Facilities.
Unless otherwise required by applicable law, the Board of Directors may meet by
telephone or other electronic communication means provided that each director
attending such meeting can hear the voice or a electronically generated
reproduction of the voice of each other director attending such meeting.
SECTION 2.13. Advisory Boards. The Chairman of the Board may establish one
or more Advisory Boards and appoint the members from time to time. No one shall
be appointed a member of an Advisory Board after attaining the age of 70 years.
Appointments to
<PAGE>
Advisory Boards shall be reported to the Board of Directors.
ARTICLE III.
COMMITTEES
SECTION 3.01. Committees. The Board of Directors may appoint an Executive
Committee, an Audit Committee, a Management and Compensation Committee and such
other committees, composed of two or more directors and may delegate to these
committees any of the powers of the Board of Directors, except the power to
declare dividends or other distributions on stock, elect directors, issue stock,
recommend to the shareholders any action which requires shareholder approval,
and amend the By-Laws.
SECTION 3.02. Executive Committee. The Executive Committee shall be
composed of not less than six nor more than nine directors, as the Board of
Directors shall deem proper, of which the Chairman of the Board, the Chief
Executive Officer and, if so designated by the Chairman of the Board and the
Chief Executive Officer, the President shall be permanent members. The members
of the Executive Committee shall serve at the pleasure of the Board of
Directors, and any permanent member of the Committee shall have the power to
make temporary appointments to the Executive Committee of members of the Board
of Directors to act in the place and stead of members of the Executive Committee
who temporarily cannot attend its meetings. The Executive Committee shall have
and may exercise all of the powers of the Board of Directors during intervals
between meetings thereof, except functions reserved to the Board by Section 3.01
hereof.
Regular meetings of the Executive Committee shall be held, without notice,
at the main office of the Bank on the schedule established by the Board at the
first regular meeting following the annual meeting of shareholders, or on such
other schedule or at such other place as the Board may from time to time
designate. Special meetings of the Executive Committee may be held at any time
and place upon call of any permanent member of the Committee or any two other
members of the Committee, and upon such notice as the Committee may prescribe.
SECTION 3.03. Audit Committee. The Audit Committee shall be composed of at
least three directors, none of whom may be an officer of the Bank. The Audit
Committee shall at least once each 12 months meet to make suitable examinations
of the fiduciary and other trust activities of the Bank, or cause suitable
examinations to be made by auditors responsible to the Board of Directors. The
examination shall ascertain whether the such activities have been administered
in accordance with applicable laws, rules and regulations and sound fiduciary
principles. The Audit Committee at least once during each calendar year and
within 15 months of the last such examination shall also make an examination
into the affairs of the Bank, or cause suitable examinations to be made by
auditors responsible to the Board of Directors, and report the
<PAGE>
result of such examination in writing to the Board at the next regular meeting
thereafter. Such report shall state whether the Bank is in sound condition and
whether adequate internal controls and procedures are being maintained, and
shall recommend to the Board such changes in the manner of conducting the
affairs of the Bank as shall be deemed advisable.
SECTION 3.04. Management and Compensation Committee. The Management and
Compensation Committee shall be composed of at least three directors none of
whom may be an officer of the Bank. The Management and Compensation Committee
shall advise the Chief Executive Officer on major policy decisions, review and
recommend appropriate compensation for executive officers, be responsible for
nominating the individuals to serve on the Board of Directors and assume such
other duties as may be assigned by the Board of Directors from time to time.
SECTION 3.05. Committee Procedure. Each committee may fix rules of
procedure for its business. A majority of the members of a committee shall
constitute a quorum for the transaction of business and the act of a majority of
those present at a meeting at which a quorum is present shall be the act of the
committee. In addition to temporary appointments permitted by Section 3.02, the
members of a committee present at any meeting, whether or not they constitute a
quorum, may appoint a director to act in the place of an absent member. The
minutes of meetings of each committee shall be submitted to the Board of
Directors at the next regular meeting of the Board.
SECTION 3.06. Emergency. In the event of a state of disaster of sufficient
severity to prevent the conduct and management of the affairs and business of
the Bank by its directors and officers as contemplated by the Articles of Bank
and the By-Laws, any two or more available members of the then incumbent
Executive Committee shall constitute a quorum of that Committee for the full
conduct and management of the affairs and business of the Bank in accordance
with the provisions of Section 3.01. In the event of the unavailability, at such
time, of a minimum of two members of the then incumbent Executive Committee, the
available directors shall elect an Executive Committee consisting of any two
members of the Board of Directors, whether or not they be officers of the Bank,
which two members shall constitute the Executive Committee for the full conduct
and management of the affairs of the Bank in accordance with the foregoing
provisions of this Section. This Section shall be subject to implementation by
resolution of the Board of Directors passed from time to time for that purpose,
and any provisions of the By-Laws (other than this Section) and any resolutions
which are contrary to the provisions of this Section or to the provisions of any
such implementary resolutions shall be suspended until it shall be determined by
any interim Executive Committee acting under this Section that it shall be to
the advantage of the Bank to resume the conduct and management of its affairs
and business under all the other provisions of the By-Laws.
<PAGE>
ARTICLE IV.
OFFICERS
SECTION 4.01. Executive and Other Officers. The Bank shall have a
President and one or more Executive Vice-Presidents who shall be the executive
officers of the Bank. It may have a Chairman of the Board and one or more Vice
Chairmen of the Board. The Chairman of the Board and any Vice Chairman of the
Board shall be executive officers if they are designated as executive officers
by the Board of Directors of the Bank. The Board of Directors may designate who
will serve as the Chief Executive Officer, having general supervision of the
business and affairs of the Bank, or as chief operating officer, having general
supervision of the operations of the Bank; in the absence of designation, the
President shall serve as Chief Executive Officer and chief operating officer.
The Bank also shall have a Secretary and also may have such Vice-Presidents,
assistant officers, and subordinate officers as may be established by the Board
of Directors. A person may hold more than one office in the Bank but may not
serve concurrently as both President and Vice-President or as President and
Secretary of the Bank. The Chairman of the Board and the President shall be
directors; the other officers may be directors.
SECTION 4.02. Chairman of the Board. The Chairman of the Board, if one be
elected, shall preside at all meetings of the Board of Directors and of the
shareholders at which he or she shall be present; and, in general, the Chairman
of the Board shall perform all duties as are from time to time assigned to him
or her by the Board of Directors.
SECTION 4.03. Chairman of the Executive Committee. The Chairman of the
Executive Committee, if one be elected, shall preside at all meetings of the
Executive Committee at which he or she shall be present; and, in general, he or
she shall perform all duties as are from time to time assigned to him or her by
the Board of Directors.
SECTION 4.04. Chief Executive Officer. The Chief Executive Officer, in the
absence of the Chairman of the Board, shall preside at all meetings of the Board
of Directors and of the shareholders at which he or she shall be present; he or
she may on behalf of the Bank grant secured or unsecured loans, purchase or
discount bills, notes and trade paper, borrow money and pledge assets, purchase
or sell securities, accept trust appointments and delegate any such powers to
other officers and employees; and, in general, he or she shall perform all
duties usually performed by a chief executive officer of a corporation and such
other duties as are from time to time assigned to him or her by the Board of
Directors or the chief executive officer of the Bank.
SECTION 4.05. President. The President, in the absence of the Chairman of
the Board and the Chief Executive Officer shall preside at all meetings of the
Board of Directors and the shareholders at
<PAGE>
which he or she shall be present. The President, at the request of the Board of
Directors or the Chairman of the Board or in the Chief Executive Officer's
absence or during his or her inability to act shall perform the duties and
exercise the functions of the Chief Executive Officer, and when so acting shall
have the powers of the Chief Executive Officer.
SECTION 4.06 Vice-Presidents. The Vice-President or Vice-Presidents, at
the request of the Board of Directors, the chief executive officer or the Chief
Executive Officer or in the President's absence or during his or her inability
to act, shall perform the duties and exercise the functions of the President,
and when so acting shall have the powers of the President. If there are more
than one Vice-Presidents, the Board of Directors may determine which one or more
of the Vice-Presidents shall perform any of such duties or exercise any of such
functions, or if such determination is not made by the Board of Directors, the
chief executive officer or President may make such determination; otherwise any
of the Vice-Presidents may perform any of such duties or exercise any of such
functions. The Vice-President or Vice-Presidents shall have such other powers
and perform such other duties, and have such additional descriptive designations
in their titles (if any), as are from time to time assigned to them by the Board
of Directors, the chief executive officer, or the President.
SECTION 4.07. Secretary. The Secretary shall keep the minutes of the
meetings of the stockholders, of the Board of Directors, and of any committees,
in books provided for the purpose; he or she shall see that all notices are duly
given in accordance with the provisions of the By-Laws or as required by
applicable law; he or she shall be the custodian of the records of the Bank; he
or she may witness all documents on behalf of the Bank, the execution of which
is duly authorized, see that the corporate seal is affixed where such document
is required to be under its seal, and, when so affixed, may attest the same;
and, in general, he or she shall perform all duties incident to the office of a
secretary of a bank, and such other duties as are from time to time assigned to
him or her by the Board of Directors, chief executive officer, or the President.
SECTION 4.08. Assistant and Subordinate Officers. The assistant and
subordinate officers of the Bank are all officers below the office of Vice-
President or Secretary. The assistant or subordinate officers shall have such
duties as are from time to time assigned to them by the Board of Directors, the
chief executive officer, or the President, or the officer in charge of the
division, region, or department of the Bank to which the assistant or
subordinate officer is assigned.
SECTION 4.09. Election, Appointment, Tenure and Removal of Officers. The
Board of Directors shall be responsible for the election and appointment of the
officers. In the absence of a resolution of the Board of Directors or the
Executive Committee requiring Board of Directors approval, any officer who is
not the
<PAGE>
head of a division of the Bank or a Senior Vice President or above may be
appointed by the Chairman of the Board, the Chief Executive Officer or the
President. The Chairman of the Board, the Chief Executive Officer and the
President serve for one year. All other officers shall be elected or appointed
to hold their offices, respectively, during the pleasure of the Board. The Board
of Directors (or, as to any officer appointed in accordance herewith, the
Chairman of the Board, the Chief Executive Officer or the President) may remove
an officer at any time. The removal of an officer does not prejudice any of his
or her contract rights. The Board of Directors (or, as to any officer appointed
in accordance herewith, the Chairman of the Board, the Chief Executive Officer
or the President) may fill a vacancy which occurs in any office for the
unexpired portion of the term.
SECTION 4.10. Compensation. The Board of Directors shall have power to fix
the salaries and other compensation and remuneration, of whatever kind, of all
officers of the Bank. It may authorize any committee or officer of the Bank to
fix the salaries, compensation and remuneration.
ARTICLE V.
CAPITAL STOCK
SECTION 5.01. Certificates for Stock. Each shareholder is entitled to
certificates which represent and certify the shares of stock such shareholder
holds in the Bank. Each stock certificate shall include on its face the name and
location of the Bank, the name of the shareholder or other person to whom it is
issued, and the class of stock and number of shares it represents. It shall be
in such form, not inconsistent with law or with the Articles of Incorporation,
as shall be approved by the Board of Directors or any officer or officers
designated for such purpose by resolution of the Board of Directors. Each stock
certificate shall be signed by the Chairman of the Board, the President, or a
Vice-President, and countersigned by the Secretary or an Assistant Secretary.
Each certificate may be sealed with the actual seal of the Bank or a facsimile
of it or in any other form and the signatures may be either manual or facsimile
signatures. Each certificate shall recite on its face that the stock represented
thereby is transferable only upon the books of the Bank properly endorsed. A
certificate is valid and may be issued whether or not an officer who signed it
is still an officer when it is issued.
SECTION 5.02. Stock Ledger and Transfers. The Bank shall maintain a stock
ledger which contains the name and address of each shareholder and the number of
shares of stock of each class which the shareholder holds. Shares of stock shall
be transferable only on the books of the Bank, and a transfer book shall be kept
in which all transfers of stock shall be recorded. Every person becoming a
shareholder by such transfer shall, in proportion to his shares, succeed to all
rights of the prior holder of such shares.
<PAGE>
SECTION 5.03. Record Date and Closing of Transfer Books. The Board may
prescribe a period prior to any shareholders' meeting, not exceeding 22 days,
during which no transfer of stock on the books of the Bank may be made.
Transfers of stock shall not be suspended preparatory to the declaration or
payment of dividends. Cash dividends shall be paid to the shareholders in whose
name the stock shall stand on the books of the Bank at the date of the
declaration of such cash dividend or at such later date as the Board may fix.
ARTICLE VI.
SUNDRY PROVISIONS
SECTION 6.01. Fiscal Year. The fiscal year of the Bank shall be the 12
calendar months period ending December 31 in each year, unless otherwise
provided by the Board of Directors.
SECTION 6.02. Books and Records. The Bank shall keep correct and complete
books and records of its accounts and transactions and minutes of the
proceedings of its shareholders and Board of Directors and of any committee
thereof when exercising any of the powers of the Board of Directors. The books
and records of the Bank may be in written form or in any other form which can be
converted within a reasonable time into written form for visual inspection.
Minutes shall be recorded in written form but may be maintained in the form of a
reproduction.
SECTION 6.03. Corporate Seal. The Secretary shall provide a seal, bearing
the name of the Bank, which shall be in the charge of the Secretary. The Board
of Directors may authorize one or more duplicate seals and provide for the
custody thereof.
SECTION 6.04. Bonds. All officers and employees of the Bank shall be
bonded by responsible corporate sureties and in such sums as may be determined
by the Board of Directors.
SECTION 6.05. Voting Upon Shares in Other Corporations. Stock of other
corporations or Banks, registered in the name of the Bank, may be voted by the
Chairman of the Board, the President, a Vice-President, or a proxy appointed by
any of them. The Board of Directors, however, may by resolution appoint some
other person to vote such shares, in which case such person shall be entitled to
vote such shares upon the production of a certified copy of such resolution.
SECTION 6.06. Mail. Any notice or other document which is required by
these By-Laws to be given in writing shall be hand delivered, delivered by
overnight courier, delivered by telefax or other electronic communication means
or deposited in the United States mails, postage prepaid.
SECTION 6.07. Execution of Documents. All agreements, indentures,
mortgages, deeds, conveyances, transfers, certificates,
<PAGE>
declarations, receipts, discharges, releases, satisfactions, settlements,
petitions, schedules, accounts, affidavits, bonds, undertakings, proxies and
other instruments or documents may be signed, executed, acknowledged, verified,
delivered, or accepted on behalf of the Bank by the Chairman of the Board, or
the President, or any Vice-President, or the Secretary. By resolution, the Board
of Directors may grant additional specific or general authority relating to any
signing, execution, acknowledgment, verification, delivery, or acceptance on
behalf of the Bank. A person who holds more than one office in the Bank may not
act in more than one capacity to execute, acknowledge, or verify an instrument
required by law to be executed, acknowledged, or verified by more than one
officer.
SECTION 6.08. Banking Hours. The Board of Directors shall designate, or
delegate to an officer the authority to designate, the hours that each office of
the Bank shall be open for the transaction of business.
SECTION 6.09. Inspection. A copy of the By-Laws, with all amendments
thereto, shall at all times be kept in a convenient place at the main office of
the Bank, and shall be open for inspection to all shareholders, during banking
hours.
SECTION 6.10. Amendments. Subject to the special provisions of Section
2.02, (a) any and all provisions of these By-Laws may be altered or repealed and
new by-laws may be adopted at any annual meeting of the shareholders, or at any
special meeting called for that purpose, and (b) the Board of Directors shall
have the power, at any meeting thereof, to make and adopt new by-laws, or to
amend, alter or repeal any of the By-Laws of the Bank.
SECTION 6.11. Indemnification of Directors and Officers.
-----------------------------------------
(a) With respect to any administrative proceeding or civil action not
initiated by a federal banking agency, the Bank shall indemnify (i) its
directors to the fullest extent permitted by the laws of the State of Maryland
now or hereafter in force, including the advance of expenses under the
procedures provided by such laws; (ii) its officers to the same extent as its
directors; (iii) its officers who are not directors to such further extent as
shall be authorized by the affirmative vote of a majority of its Board of
Directors and be consistent with such laws; and (iv) its other employees and
agents to the extent as shall be authorized by the affirmative vote of a
majority of its Board of Directors and be consistent with such laws.
(b) With respect to any administrative proceeding or civil action
initiated by a federal banking agency against any director, officer or other
institution affiliated party of the Bank (as defined in 12 U.S.C. 1813(u) as
amended from time to time), the Bank shall make such indemnification payments to
such person as are (i) reasonable and consistent with the provisions of 12
U.S.C. 1828(k) and the implementing regulations thereunder each as amended from
<PAGE>
time to time and (ii) permitted by the laws of the State of Maryland now or
hereafter in force.
(c) 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 to the extent
as shall be authorized by the affirmative vote of a majority of its Board of
Directors and be consistent with the general laws of the State of Maryland now
or hereafter in force; however, the Bank shall not purchase or maintain
insurance on behalf of its directors, officers, employees or agents against
expenses, penalties, or other payments incurred in an administrative proceeding
or action instituted by an appropriate bank regulatory agency which proceeding
or action results in a final order assessing civil money penalties or requiring
affirmative action by a director, officer, employee or agent in the form of
payments to the Bank.
<PAGE>
Exhibit 6
---------
Consent of Trustee
------------------
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939, in connection with the issuance by Household Finance Corporation, we
hereby consent that reports of examination by Federal, state, territorial or
district authorities may be furnished by such authorities to the Securities and
Exchange Commission upon request therefor.
ALLFIRST BANK
By: /s/ Donald C. Hargadon
--------------------------
Donald C. Hargadon
Assistant Vice President
<PAGE>
Exhibit 7
- ---------
Report of Condition Consolidating Domestic and Foreign Subsidiaries of ALLFIRST
Bank, Baltimore, Maryland at the close of business on December 31, 1999
published in response to call made by Comptroller of the Currency, under Title
12, United States Code, Section 161, Charter No. 04822, Comptroller of the
Currency, Richmond District.
CONSOLIDATED REPORT OF CONDITION
(Dollars in Thousands)
<TABLE>
ASSETS
<S> <C>
Cash and balances due from
depository institutions:
Noninterest-bearing balances
and currency and coin.................................... $ 797,973
Interest-bearing balances.................................. 6,135
Securities:
Held-to-maturity securities.................................. -0-
Available-for-sale securities................................ 4,071,530
Federal funds sold and securities purchased
under agreements to resell................................... 153,748
Loans and lease financing receivables:
Loans and leases, net of unearned income..................... 10,719,079
LESS: Allowance for loan and lease losses.................... 156,096
LESS: Allocated transfer risk reserve........................ 0
Loans and leases, net of unearned income,
allowance, and reserve..................................... 10,562,982
Trading assets................................................. 0
Premises and fixed assets (including
capitalized leases).......................................... 188,110
Other real estate owned........................................
Investments in unconsolidated subsidiaries
and associated companies.....................................
Customers' liability to this bank
on acceptances outstanding...................................
Intangible assets.............................................. 76,362
Other assets................................................... 500,393
TOTAL ASSETS............................................. 16,357,233
==========
</TABLE>
<PAGE>
<TABLE>
<S> <C>
LIABILITIES
Deposits:
In domestic offices....................................... $11,801,364
Noninterest-bearing.................................... 2,737,789
Interest-bearing....................................... 9,063,575
In foreign offices, Edge and Agreement
subsidiaries, and IBFs.................................. 663,952
Noninterest-bearing.................................... 0
Interest-bearing....................................... 663,952
Federal funds purchased and securities
sold under agreements to repurchase....................... 1,325,969
Demand notes issued to the U.S. Treasury.................... 0
Trading liabilities.........................................
Other borrowed money:
With a remaining maturity of one year or less............. -0-
With a remaining maturity of more than one year
through three years..................................... 400,201
With a remaining maturity of more than three
years...................................................
Bank's liability on acceptances
executed and outstanding..................................
Subordinated notes and debentures........................... 189,000
Other liabilities........................................... 658,415
TOTAL LIABILITIES..................................... $15,038,901
-----------
EQUITY CAPITAL
Perpetual preferred stock and related surplus............... 120
Common Stock................................................ 18,448
Surplus..................................................... 765,562
Undivided profits and capital reserves...................... 534,202
Net unrealized holding gains (losses)
on available-for-sale securities..........................
Cumulative foreign currency translation
adjustments............................................... -0-
TOTAL EQUITY CAPITAL.................................. $ 1,318,332
TOTAL LIABILITIES AND EQUITY CAPITAL.................. $16,357,233
===========
</TABLE>
