<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 23, 1995
REGISTRATION NO. 33-
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------
MELLON FINANCIAL COMPANY MELLON BANK CORPORATION
(Exact name of registrants as specified in their charters)
PENNSYLVANIA PENNSYLVANIA
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
25-1387025 25-1233834
(I.R.S. Employer Identification (I.R.S. Employer Identification Number)
Number)
ONE MELLON BANK CENTER
500 GRANT STREET
PITTSBURGH, PENNSYLVANIA 15258 412-234-5000
(Address, including zip code, and telephone number, including area code, of
registrants' principal executive offices)
JAMES M. GOCKLEY, ESQ.
ASSISTANT GENERAL COUNSEL AND SECRETARY
MELLON BANK CORPORATION
ONE MELLON BANK CENTER 500 GRANT STREET
PITTSBURGH, PENNSYLVANIA 15258
412-234-5222
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPY TO:
MARK J. WELSHIMER, ESQ.
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO
TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT, AS DETERMINED BY
MARKET CONDITIONS.
-----------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_] _______
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] _______
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
CALCULATION OF REGISTRATION FEE
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF EACH CLASS OF MAXIMUM MAXIMUM
SECURITIES AMOUNT TO BE AGGREGATE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PRICE PER UNIT OFFERING PRICE REGISTRATION FEE
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities......... $1,500,000,000(1) 100%(2) $1,500,000,000 $517,242
Guarantees--constituting
guarantees of the Debt
Securities by Mellon
Bank Corporation........ $1,500,000,000 (3) (3) none
-----------------------------------------------------------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
(1) In no event will the aggregate initial offering price of the Debt
Securities issued under this Registration Statement exceed $1,500,000,000
or the equivalent thereof in foreign currencies or currency units.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457.
(3) No separate consideration will be received for the Guarantees.
The registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrants
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<PAGE>
PROSPECTUS
MELLON FINANCIAL COMPANY
(A WHOLLY OWNED SUBSIDIARY OF MELLON BANK CORPORATION)
$1,500,000,000
DEBT SECURITIES
UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND
INTEREST, IF ANY, BY
MELLON BANK CORPORATION
Mellon Financial Company (the "Company") may issue from time to time in one
or more series up to $1,500,000,000 (or the equivalent thereof in foreign
currencies or currency units) aggregate principal amount of its unsecured debt
securities consisting of debentures, notes and/or other unsecured evidences of
indebtedness (the "Debt Securities"), which may be either senior (the "Senior
Securities") or subordinated (the "Subordinated Securities") in priority of
payment. All Senior Securities will be unconditionally guaranteed on a senior
basis as to payment of principal, premium, if any, and interest, if any, by
Mellon Bank Corporation (the "Corporation"). All Subordinated Securities will
be unconditionally guaranteed on a subordinated basis as to payment of
principal, premium, if any, and interest, if any, by the Corporation. The Debt
Securities may be offered as separate series in amounts, at prices and on
terms to be determined at the time of sale and to be set forth in supplements
to this Prospectus (the "Prospectus Supplement").
The terms of each series of Debt Securities, including, where applicable,
the specific designation, priority, aggregate principal amount, denominations,
maturity, premium, if any, rate or rates and time or times of payment of
interest, if any, terms for redemption at the option of the Company or the
holder, if any, terms for sinking or purchase fund payments, if any, the
initial public offering price, the proceeds to the Company, and any other
specific terms in connection with the offering and sale of the Debt Securities
in respect of which this Prospectus is being delivered, are set forth in the
accompanying Prospectus Supplement. The Subordinated Indenture does not
provide for any right of acceleration of the payment of principal of the
Subordinated Securities upon a default in the payment of principal or interest
or in the performance of any covenant or agreement in the Subordinated
Securities or the Subordinated Indenture. See "Subordinated Securities--Events
of Default and Limited Rights of Acceleration". As used herein, Debt
Securities shall include securities denominated in United States dollars or,
at the option of the Company if so specified in the Prospectus Supplement, in
any other currency or in composite currencies or in amounts determined by
reference to an index.
Debt Securities of a series will be issued in registered form without
coupons and may be issued, at the option of the Company, in the form of a
certificate in definite form (a "Certificated Security") or in the form of one
or more global securities in registered form (each a "Global Security").
The Debt Securities may be sold by the Company directly to purchasers,
through agents designated from time to time, through underwriting syndicates
led by one or more managing underwriters or through one or more underwriters
acting alone. If the Company, directly or through agents, solicits offers to
purchase the Debt Securities, the Company reserves the sole right to accept
and, together with its agents, to reject, in whole or in part, any such offer.
See "Plan of Distribution".
If any agent of the Company, or any underwriter, is involved in the sale of
the Debt Securities, the name of such agent or underwriter, the principal
amount to be purchased by it, any applicable commissions or discounts and the
net proceeds to the Company from such sale are set forth in, or may be
calculated from, the Prospectus Supplement. The aggregate net proceeds to the
Company from the sale of all the Debt Securities will be the public offering
or purchase price of the Debt Securities sold less the aggregate of such
commissions and discounts and other expenses of issuance and distribution. See
"Plan of Distribution" for possible indemnification and contribution
arrangements with agents or underwriters.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMIS-
SION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------
THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS OR DEPOSIT ACCOUNTS AND ARE
NOT INSURED BY THE BANK INSURANCE FUND OR SAVINGS ASSOCIATION INSURANCE
FUND OF THE FEDERAL DEPOSIT INSURANCE CORPORATION.
------------
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF DEBT SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT AND/OR AN ABBREVIATED TERM SHEET
UNDER RULE 434 OF THE SECURITIES ACT OF 1933.
------------
The date of this Prospectus is , 1995
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY, THE CORPORATION OR ANY UNDERWRITER OR AGENT.
THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY DEBT SECURITIES IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED OR
INCORPORATED BY REFERENCE HEREIN OR THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE OF SUCH INFORMATION OR THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY OR THE CORPORATION SINCE SUCH DATE.
STATEMENT OF AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information can be inspected and copied at the
public reference facilities of the Commission at Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the Commission's regional offices at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661
and 7 World Trade Center, Suite 1300, New York, New York 10048. Copies of such
material can be obtained from the Public Reference Section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In
addition, such reports, proxy statements and other information concerning the
Corporation can be inspected at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005.
The Company and the Corporation have filed with the Commission a
Registration Statement under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Debt Securities and the related
guarantees. This Prospectus does not contain all the information set forth in
the Registration Statement, certain portions of which have been omitted as
permitted by the rules and regulations of the Commission. For further
information with respect to the Company and the Corporation and the Debt
Securities and related guarantees, reference is made to the Registration
Statement, including the exhibits thereto. The Registration Statement may be
inspected by anyone without charge at the principal office of the Commission
in Washington, D.C., and copies of all or part of it may be obtained from the
Commission upon payment of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed with the Commission by the
Corporation are incorporated in this Prospectus by reference and made a part
hereof:
(1) The Corporation's Annual Report on Form 10-K for the year ended
December 31, 1994, filed pursuant to Section 13 of the Exchange Act.
(2) The Corporation's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1995 and June 30, 1995, each filed pursuant to Section
13 of the Exchange Act.
(3) The Corporation's Current Reports on Form 8-K dated January 13, 1995,
April 18, 1995, June 12, 1995, June 14, 1995, and July 18, 1995, each
filed pursuant to Section 13 of the Exchange Act.
Each document or report subsequently filed by the Corporation with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date hereof and prior to the termination of the offering of the Debt
Securities shall be deemed to be incorporated by reference into this
Prospectus and to be a part of this
2
<PAGE>
Prospectus from the date of filing of such document. Any statement contained
herein, or in a document all or a portion of which is incorporated or deemed
to be incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of the Registration Statement and this Prospectus to
the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement or this Prospectus.
The Corporation will provide without charge to any person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference, other than
certain exhibits to such documents. Written requests should be directed to:
Secretary, Mellon Bank Corporation, Room 1820, One Mellon Bank Center, 500
Grant Street, Pittsburgh, Pennsylvania 15258. Telephone requests may be
directed to the Corporation at (412) 234-5222.
------------
MELLON BANK CORPORATION
The Corporation is a multibank holding company incorporated under the laws
of Pennsylvania and registered under the Bank Holding Company Act of 1956, as
amended. At December 31, 1994, the Corporation was the twenty-fourth largest
bank holding company in the United States in terms of assets. Its principal
wholly owned subsidiaries are Mellon Bank, N.A. ("Mellon Bank"), The Boston
Company, Inc. ("The Boston Company"), Mellon Bank (DE) National Association,
Mellon Bank (MD), Mellon PSFS (NJ) National Association and the companies
known as the Mellon Financial Services Corporations. The Corporation also owns
a federal savings bank located in New Jersey, Mellon Bank, F.S.B. The Dreyfus
Corporation ("Dreyfus"), one of the nation's largest mutual fund companies, is
a wholly owned subsidiary of Mellon Bank.
The Corporation's banking subsidiaries engage in retail banking, commercial
banking, trust and investment management services, residential real estate
loan financing, mortgage servicing, mutual fund and various securities-related
activities. Through various non-bank subsidiaries, the Corporation provides a
broad range of bank-related services, including commercial financial services,
equipment leasing, commercial loan financing, stock transfer services, cash
management and numerous trust and investment management services.
The Corporation's principal executive office is located at One Mellon Bank
Center, 500 Grant Street, Pittsburgh, Pennsylvania 15258 (telephone (412) 234-
5000).
MELLON FINANCIAL COMPANY
The Company is a wholly owned subsidiary of the Corporation incorporated
under the laws of Pennsylvania to function as a financing entity for the
Corporation and its subsidiaries and affiliates through the issuance of
commercial paper and other debt guaranteed by the Corporation. Financial data
for the Company and the Corporation are combined for financial reporting
purposes due to the limited function of the Company and the unconditional
guarantees of all of the Company's obligations by the Corporation. The
registered office of the Company is located at One Mellon Bank Center, 500
Grant Street, Pittsburgh Pennsylvania 15258 (telephone (412) 234-5000).
USE OF PROCEEDS
The Company will apply the net proceeds from the sale of the Debt Securities
offered hereby to its general funds to be used for its corporate financing
purposes, including extensions of credit to the Corporation and to
subsidiaries and affiliates of the Corporation, including its bank
subsidiaries, which will use the proceeds of such
3
<PAGE>
extensions of credit for general corporate purposes, possibly including
acquisitions, and repayment at maturity of commercial paper and other
outstanding indebtedness. The precise amounts and timing of the application of
proceeds will depend upon funding requirements of the Corporation and its
subsidiaries and affiliates and the amount of Debt Securities offered from
time to time pursuant to this Prospectus. For a more precise description
regarding the application of the proceeds, see "Use of Proceeds" in the
Prospectus Supplement.
In view of its anticipated funding requirements, the Company expects that it
may, on a recurring basis, engage in additional private or public financings
of a character and amount to be determined as the need arises.
CERTAIN REGULATORY CONSIDERATIONS
GENERAL
The Company and the Corporation (together sometimes referred to herein as
the "parent Corporation") are legal entities separate and distinct from the
Corporation's bank subsidiaries, although the principal source of the parent
Corporation's cash revenues are payments of interest and dividends from such
subsidiaries. There are various legal and regulatory limitations on the extent
to which the Corporation's bank subsidiaries can finance or otherwise supply
funds to the Corporation and certain of its other affiliates.
The prior approval of the Comptroller of the Currency (the "Comptroller") is
required if the total of all dividends declared by any such national bank
subsidiary in any calendar year exceeds its net profits (as defined by the
Comptroller) for that year combined with its retained net profits for the
preceding two calendar years. Additionally, national bank subsidiaries may not
declare dividends in excess of net profits on hand (as defined), after
deducting the amount by which the principal amount of all loans on which
interest is past due for a period of six months or more exceeds the reserve
for credit losses. Under the first and currently more restrictive of the
foregoing dividend limitations, the Corporation's national bank subsidiaries
can, without prior regulatory approval, declare dividends for the remainder of
1995 subsequent to June 30, 1995 of up to approximately $490 million of their
retained earnings of approximately $2.103 billion at June 30, 1995, less any
dividends declared and plus or minus net profits or losses, as defined,
between July 1, 1995, and the date of any such dividend declaration. The
payment of dividends is also limited by minimum capital requirements imposed
on all national bank subsidiaries by the Comptroller. The Corporation's
national bank subsidiaries exceed these minimum requirements. The national
bank subsidiaries declared dividends to the parent Corporation of $201 million
in the first six months of 1995, $366 million in 1994, $185 million in 1993
and $154 million in 1992. Dividends paid to the parent Corporation by non-bank
subsidiaries totaled $13 million in the first six months of 1995, $122 million
in 1994, $116 million in 1993 and $26 million in 1992. In addition, Mellon
Bank returned $300 million of paid-in surplus to the parent Corporation in the
second quarter of 1995, and The Boston Company returned $100 million and $300
million of capital to the parent Corporation in 1994 and 1993, respectively.
The Federal Reserve Board and the Comptroller also have issued guidelines
that require bank holding companies and national banks to continuously
evaluate the level of cash dividends in relation to the organization's
operating income, capital needs, asset quality and overall financial
condition. The Comptroller also has authority under the Financial Institutions
Supervisory Act to prohibit national banks from engaging in any activity
which, in the Comptroller's opinion, constitutes an unsafe or unsound practice
in conducting their businesses. The payment of a dividend by a bank could,
depending upon the financial condition of such bank and other factors, be
construed by the Comptroller to be such an unsafe or unsound practice. The
Comptroller has stated that a dividend by a national bank should bear a direct
correlation to the level of the bank's current and expected earnings stream,
the bank's need to maintain an adequate capital base and the marketplace's
perception of the bank and should not be governed by the financing needs of
the bank's parent corporation. As a result, notwithstanding the level of
dividends that could be declared without regulatory approval by the
Corporation's national bank subsidiaries as set forth in the preceding
paragraph, the level of dividends from such bank subsidiaries to the
Corporation in 1995 generally is not expected to exceed the earnings for those
subsidiaries. If the ability of such subsidiaries to pay dividends to the
Corporation were to become restricted, the Corporation would need to rely on
alternative means of raising funds to satisfy its cash requirements, which
4
<PAGE>
might include, but would not be restricted to, non-bank subsidiary dividends,
asset sales or other capital market transactions.
The Financial Institutions Reform, Recovery and Enforcement Act of 1989
contains a "cross-guarantee" provision that could result in any insured
depository institution owned by the Corporation (i.e., any bank subsidiary)
being assessed for losses incurred by the Federal Deposit Insurance
Corporation (the "FDIC") in connection with assistance provided to, or the
failure of, any other depository institution owned by the Corporation. Under
Federal Reserve Board policy, the Corporation may be expected to act as a
source of financial strength to each of its bank subsidiaries and to commit
resources to support each such bank in circumstances where such bank might not
be in a financial position to do so.
FDICIA
The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA")
substantially revised the bank regulatory and funding provisions of the
Federal Deposit Insurance Act and made revisions to several other federal
banking statutes. Among other things, FDICIA requires the federal banking
agencies to take "prompt corrective action" in respect of depository
institutions that do not meet minimum capital requirements. FDICIA establishes
five capital tiers: "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized" and "critically
undercapitalized."
Rules adopted by the federal banking agencies under FDICIA provide that an
institution is deemed to be: "well capitalized" if the institution has a total
(Tier I plus Tier II) risk-based capital ratio of 10.0% or greater, a Tier I
risk-based ratio of 6.0% or greater, and a leverage ratio of 5.0% or greater,
and the institution is not subject to an order, written agreement, capital
directive, or prompt corrective action directive to meet and maintain a
specific level for any capital measure; "adequately capitalized" if the
institution has a total risk-based capital ratio of 8.0% or greater, a Tier I
risk-based capital ratio of 4.0% or greater, and a leverage ratio of 4.0% or
greater (or a leverage ratio of 3.0% or greater if the institution is rated
composite 1 in its most recent report of examination, subject to appropriate
federal banking agency guidelines), and the institution does not meet the
definition of a well-capitalized institution; "undercapitalized" if the
institution has a total risk-based capital ratio that is less than 8.0%, a
Tier I risk-based capital ratio that is less than 4.0% or a leverage ratio
that is less than 4.0% (or a leverage ratio that is less than 3.0% if the
institution is rated composite 1 in its most recent report of examination,
subject to appropriate federal banking agency guidelines) and the institution
does not meet the definition of a significantly undercapitalized or critically
undercapitalized institution; "significantly undercapitalized" if the
institution has a total risk-based capital ratio that is less than 6.0%, a
Tier I risk-based capital ratio that is less than 3.0%, or a leverage ratio
that is less than 3.0% and the institution does not meet the definition of a
critically undercapitalized institution; and "critically undercapitalized" if
the institution has a ratio of tangible equity to total assets that is equal
to or less than 2.0%. FDICIA imposes progressively more restrictive
constraints on operations, management and capital distributions, depending on
the capital category in which an institution is classified.
At June 30, 1995, all of the Corporation's banking subsidiaries qualified as
well capitalized based on the ratios and guidelines noted above. A bank's
capital category, however, is determined solely for the purpose of applying
the prompt corrective action rules and may not constitute an accurate
representation of the bank's overall financial condition or prospects.
The appropriate federal banking agency may, under certain circumstances,
reclassify a well capitalized insured depository institution as adequately
capitalized. The appropriate agency is also permitted to require an adequately
capitalized or undercapitalized institution to comply with the supervisory
provisions as if the institution were in the next lower category (but not
treat a significantly undercapitalized institution as critically
undercapitalized) based on supervisory information other than the capital
levels of the institution.
The statute provides that an institution may be reclassified if the
appropriate federal banking agency determines (after notice and opportunity
for hearing) that the institution is in an unsafe or unsound condition or
deems the institution to be engaging in an unsafe or unsound practice.
5
<PAGE>
FDICIA generally prohibits a depository institution from making any capital
distribution (including payment of a dividend) or paying any management fee to
its holding company if the depository institution would thereafter be
undercapitalized. Undercapitalized depository institutions are subject to
growth limitations and are required to submit a capital restoration plan. The
federal banking agencies may not accept a capital restoration plan without
determining, among other things, that the plan is based on realistic
assumptions and is likely to succeed in restoring the depository institution's
capital. In addition, for a capital restoration plan to be acceptable, the
depository institution's parent holding company must guarantee that the
institution will comply with such capital restoration plan. The aggregate
liability of the parent holding company is limited to the lesser of (i) an
amount equal to 5.0% of the depository institution's total assets at the time
it became undercapitalized, and (ii) the amount which is necessary (or would
have been necessary) to bring the institution into compliance with all capital
standards applicable with respect to such institution as of the time it fails
to comply with the plan. If a depository institution fails to submit an
acceptable plan, it is treated as if it is significantly undercapitalized.
Significantly undercapitalized depository institutions may be subject to a
number of requirements and restrictions, including orders to sell sufficient
voting stock to become adequately capitalized, requirements to reduce total
assets and cessation of receipt of deposits from correspondent banks.
Critically undercapitalized institutions are subject to the appointment of a
receiver or conservator.
FDICIA also contains a variety of other provisions that may affect the
operation of the Corporation, including new reporting requirements, regulatory
standards for real estate lending, "truth in savings" provisions, and the
requirement that a depository institution give 90 days prior notice to
customers and regulatory authorities before closing any branch.
CAPITAL
The risk-based capital guidelines for bank holding companies and banks
adopted by the federal banking agencies were fully phased in at the end of
1992. The minimum ratio of qualifying total capital to risk-weighted assets
(including certain off-balance sheet items, such as standby letters of credit)
under the fully phased in guidelines is 8.0%. At least half of the total
capital is to be comprised of common stock, retained earnings, noncumulative
perpetual preferred stocks, minority interests and, for bank holding
companies, a limited amount of qualifying cumulative perpetual preferred
stock, less goodwill and certain other intangibles ("Tier I capital"). The
remainder ("Tier II capital") may consist of other preferred stock, certain
other instruments, and limited amounts of subordinated debt and the reserve
for credit losses.
In addition, the federal banking agencies have established minimum leverage
ratio (Tier I capital to total average assets less goodwill and certain other
intangibles) guidelines for bank holding companies and banks. These guidelines
provide for a minimum leverage ratio of 3.0% for bank holding companies and
banks that meet certain specified criteria, including that they have the
highest regulatory rating. All other banking organizations will be required to
maintain a leverage ratio of 3.0% plus an additional cushion of at least 100
to 200 basis points. The guidelines also provide that banking organizations
experiencing internal growth or making acquisitions will be expected to
maintain strong capital positions substantially above the minimum supervisory
levels, without significant reliance on intangible assets. Furthermore, the
guidelines indicate that the Federal Reserve Board will continue to consider a
"tangible Tier I leverage ratio" in evaluating proposals for expansion of new
activities. The tangible Tier I leverage ratio is the ratio of Tier I capital,
less intangibles not deducted from Tier I capital, to total assets, less all
intangibles. Neither the Corporation nor any of its banking subsidiaries has
been advised of any specific minimum leverage ratio applicable to it.
The federal banking agencies have revised their risk-based capital standards
to ensure that such standards take adequate account of concentrations of
credit risk and the risks of nontraditional activities. Institutions with high
or moderate levels of risks are expected to operate above minimum capital
standards.
In November 1994, the federal banking agencies announced that they
determined not to adopt a proposed rule to amend regulatory capital
regulations to incorporate the recent change in generally accepted accounting
6
<PAGE>
principles made by Statement of Financial Accounting Standards No. 115, which
requires that unrealized gains and losses, net of the related tax effect, on
securities classified as available for sale be reported as a separate
component of stockholders' equity.
The federal banking agencies have adopted rules to incorporate an interest
rate risk component into their risk-based capital standards.
Certain consolidated ratios of the Corporation are included herein under
"Mellon Bank Corporation--Consolidated Summary Financial Data."
FDIC INSURANCE ASSESSMENTS
Substantially all of the deposits of the banking subsidiaries of the
Corporation are insured up to applicable limits by the Bank Insurance Fund
("BIF") of the FDIC and are subject to deposit insurance assessments to
maintain the BIF. The FDIC has adopted a risk-based assessment system to
replace the previous flat-rate system. The risk-based system imposes insurance
premiums based upon a matrix that takes into account a bank's capital level
and supervisory rating. In August 1995, the FDIC approved a reduction in the
assessment rates imposed on banks for BIF deposit insurance. As a result of
such reduction, such rates now range from 4 cents for each $100 of domestic
deposits for the healthiest institutions to 31 cents for each $100 of domestic
deposits for the weakest institutions.
INTERSTATE BANKING AND BRANCHING LEGISLATION
On September 29, 1994, the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 (the "Interstate Act") was enacted into Federal law.
Under the Interstate Act, commencing on September 29, 1995, bank holding
companies will be permitted to acquire banks located in any state regardless
of the state law in effect at the time. The Interstate Act also provides for
the nationwide interstate branching of banks. Under the Interstate Act, both
national and state-chartered banks will be permitted to merge across state
lines (and thereby create interstate branches) commencing June 1, 1997. States
are permitted to "opt-out" of the interstate branching authority by taking
action prior to the commencement date. States may also "opt-in" early (i.e.,
prior to June 1, 1997) to the interstate branching provisions.
7
<PAGE>
MELLON BANK CORPORATION CONSOLIDATED SUMMARY FINANCIAL DATA
This summary is qualified in its entirety by the detailed information and
financial statements included in the documents incorporated herein by
reference. See "Incorporation of Certain Documents by Reference".
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------
1994 1993 1992 1991 1990
(DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE AMOUNTS) ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Consolidated Statement of Operations Data:
Net interest revenue.......................... $ 1,508 $ 1,329 $ 1,182 $ 1,012 $ 912
Provision for credit losses................... 70 125 185 250 315
Net interest revenue after provision for
losses....................................... 1,438 1,204 997 762 597
Fee revenue................................... 1,652 1,538 1,154 1,007 933
Gains (losses) on sale of securities.......... (5) 100 129 81 28
Gain on sale of consumer finance subsidiary... -- -- -- -- 74
Operating expense............................. 2,374 2,084 1,648 1,440 1,355
Provision for income taxes.................... 278 298 104 62 41
------- ------- ------- ------- -------
Net income.................................... $ 433 $ 460 $ 528 $ 348 $ 236
Net income applicable to common stock......... 358 397 477 299 186
Consolidated Per Common Share Data:
Primary net income............................ $ 2.42 $ 2.73 $ 3.56 $ 2.39 $ 1.57
Dividends..................................... 1.57 1.01 0.93 0.93 0.93
Book value at period-end...................... 25.06 24.28 21.37 18.44 16.60
Average common shares and equivalents
outstanding (in thousands)................... 149,069 147,083 134,858 126,554 120,981
Results Excluding Certain Items(A):
Net income.................................... $ 652 $ 519 $ 398 $ 259 $ 182
Net income per common share................... 4.00 3.14 2.60 1.69 1.12
Return on average common shareholders' equity. 16.02% 13.71% 13.13% 8.97% 5.85%
Return on average assets...................... 1.71 1.46 1.29 0.87 0.59
Consolidated Balance Sheet--Average
Balances(B):
Money market investments...................... $ 1,656 $ 3,821 $ 1,905 $ 1,566 $ 2,927
Securities.................................... 5,149 4,804 6,500 5,778 5,238
Loans......................................... 25,097 21,763 18,235 18,514 18,845
Total interest-earning assets................. 32,282 30,657 26,948 26,167 27,288
Total assets.................................. 38,106 35,635 30,758 29,878 31,078
Deposits...................................... 27,248 26,541 22,684 21,438 22,084
Notes and debentures (with original maturities
over one year)............................... 1,768 1,991 1,365 1,448 1,722
Redeemable preferred stock.................... -- -- -- 51 94
Common shareholders' equity................... 3,691 3,323 2,603 2,190 2,042
Total shareholders' equity.................... 4,277 3,964 3,112 2,614 2,437
Consolidated Percentages:
Return on average common shareholders'
equity(B).................................... 9.79% 12.08% 18.45% 13.78% 9.30%
Return on average assets(B)................... 1.14 1.29 1.72 1.16 0.76
Net interest margin(B):
Taxable equivalent basis(C).................. 4.71 4.39 4.46 3.99 3.49
Without taxable equivalent increments........ 4.67 4.34 4.39 3.86 3.34
Dividends per common share as a percentage of
primary net income per common share.......... 54.66 31.28 21.11 29.52 43.95
Capital Ratios:
Common shareholders' equity to assets(D)...... 9.54% 9.57% 8.85% 7.91% 6.67%
Average common shareholders' equity to average
assets....................................... 9.68 9.32 8.46 7.33 6.57
Tier I capital ratio(D)....................... 9.48 9.70 10.20 9.05 7.42
Total (Tier I plus Tier II) capital ratio(D).. 12.90 13.22 13.83 13.16 11.28
Leverage capital ratio(D)..................... 8.67 9.00 9.45 8.62 6.91
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------
1994 1993 1992 1991 1990
(DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE AMOUNTS) ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Asset Quality Ratios (E):
Reserve for credit losses as a
percentage of:
Total loans(D)....................... 2.27% 2.45% 2.54% 3.12% 2.80%
Nonperforming loans(D)............... 403 297 152 113 100
Net credit losses as a percentage of
average loans........................ 0.27 0.64 1.52 1.24 2.15
Total nonperforming assets as a
percentage of total loans and
net acquired property(D)............. 0.89 1.39 2.94 4.78 4.11
Ratio of Earnings to Fixed Charges:
Mellon Bank Corporation (parent
Corporation)(F)...................... 5.56 3.03 2.73 2.42 1.75(H)
Mellon Bank Corporation and its
Subsidiaries:(G)
Excluding interest on deposits....... 3.35 4.17 3.62 2.15 1.41(H)
Including interest on deposits....... 1.84 2.09 1.72 1.30 1.11(H)
</TABLE>
--------
Note: The August 1994 merger with Dreyfus was accounted for as a pooling of
interests. Therefore, all amounts, except for dividends per share,
prior to August 1994 have been restated to reflect the merger. Per
share amounts have also been restated to reflect the three-for-two
common stock split that occurred in November 1994. The comparability of
the information set forth above and on the prior page has been affected
by the Corporation's December 1993 acquisition of AFCO Credit
Corporation and CAFO, Inc., the May 1993 acquisition of The Boston
Company, the December 1992 acquisition of certain assets and deposit
liabilities of Meritor Savings Bank ("Meritor"), the December 1991
acquisition of United Penn Bank and by the May 1990 acquisition of 54
branch offices of PSFS from Meritor. These are described in detail in
the Corporation's Annual Reports on Form 10-K for the years ended
December 31, 1990 through 1994.
Footnotes on following page.
9
<PAGE>
(A) Results for 1994 exclude a $130 million after tax securities lending
charge, $79 million after tax of Dreyfus merger-related expenses, $10
million after tax of one-time losses on the disposition of securities
available for sale previously owned by Dreyfus and $16 million of
preferred stock dividends recorded in connection with the redemption of
the Series H preferred stock. Results for 1993 exclude $112 million after
tax of merger expenses and $53 million after tax of gains on the sale of
securities related to the acquisition of The Boston Company. Results for
periods prior to 1993 were calculated by applying a normalized effective
tax rate of approximately 38% to pretax income. The unrecorded tax benefit
that existed at the beginning of the periods, prior to 1993, was included
in the determination of the return on common shareholders' equity.
(B) Computed on a daily average basis.
(C) Calculated on a taxable equivalent basis, at tax rates approximating 35%
for 1994 and 1993 and 34% in all other years presented. Loan fees,
nonaccrual loans and the related effect on income have been included in
the calculation of the net interest margin.
(D) Period-end ratio.
(E) Segregated assets acquired in the 1992 Meritor acquisition are not
reported as loans and therefore are not included in nonperforming loans.
The reserve for segregated assets is not included in the reserve for
credit losses.
(F) The parent Corporation ratios include the accounts of the Corporation and
the Company, a wholly owned subsidiary of the Corporation that functions
as a financing entity for the Corporation and its subsidiaries by issuing
commercial paper and other debt guaranteed by the Corporation. For
purposes of computing these ratios, earnings represent parent Corporation
income before income taxes, and before equity in undistributed net income
(loss) of subsidiaries, plus the fixed charges of the parent Corporation.
Fixed charges represent interest expense, one-third (the proportion deemed
representative of the interest factor) of rental expense net of income
from subleases, and amortization of debt issuance costs. Because these
ratios exclude from earnings the equity in undistributed net income (loss)
of subsidiaries, these ratios vary with the payment of dividends by such
subsidiaries.
(G) For purposes of computing these ratios, earnings represent consolidated
income before income taxes plus consolidated fixed charges. Fixed charges,
excluding interest on deposits, include interest expense (other than on
deposits), one-third (the proportion deemed representative of the interest
factor) of rental expense net of income from subleases, and amortization
of debt issuance costs. Fixed charges, including interest on deposits,
include all interest expense, one-third (the proportion deemed
representative of the interest factor) of rental expense net of income
from subleases, and amortization of debt issuance costs.
(H) Excludes the $74 million gain on the sale of the Corporation's consumer
finance subsidiary. Including this gain, the ratio of earnings to fixed
charges would have been 2.25 for the parent Corporation. Including this
gain, the ratio of earnings to fixed charges would have been 1.56
excluding interest on deposits, and 1.15 including interest on deposits
for the Corporation and its subsidiaries.
10
<PAGE>
DESCRIPTION OF DEBT SECURITIES AND GUARANTEES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities and the guarantees
thereof by the Corporation (the "Guarantees") to which any Prospectus
Supplement may relate (the "Offered Debt Securities"). The particular terms of
the Offered Debt Securities and the extent, if any, to which such general
provisions may apply to the Debt Securities and the Guarantees so offered will
be described in the Prospectus Supplement relating to such Offered Debt
Securities. Except where specifically noted, the following description applies
to both Senior Securities and Subordinated Securities.
DEBT SECURITIES
The Debt Securities will be unsecured obligations of the Company and are not
insured by the Savings Association Insurance Fund or the Bank Insurance Fund
of the Federal Deposit Insurance Corporation.
The Debt Securities will constitute either senior debt of the Company (the
"Senior Securities") or subordinated debt of the Company (the "Subordinated
Securities"). The Senior Securities will be issued under an Indenture dated as
of May 2, 1988, as supplemented by the First Supplemental Indenture, dated as
of November 29, 1990 (the "Senior Indenture"), among the Company, the
Corporation and The Chase Manhattan Bank (National Association), as Trustee
("Chase"). The Subordinated Securities will be issued under an Indenture,
dated as of August 25, 1995 (the "Subordinated Indenture"), among the Company,
the Corporation and First Interstate Bank of California, as Trustee ("First
Interstate"). The Senior Indenture and the Subordinated Indenture are
collectively referred to herein as the "Indentures". References to the
"Trustee" shall mean Chase or First Interstate, as applicable.
The statements which follow under this caption are brief summaries of
certain provisions contained in the Indentures, do not purport to be complete
and are qualified in their entirety by reference to all the provisions of the
applicable Indenture, copies of which have been filed with the Commission as
exhibits to the Registration Statement or incorporated by reference therein.
Whenever defined terms are used but not defined herein, such terms shall have
the meanings ascribed to them in the applicable Indenture, it being intended
that such defined terms shall be incorporated herein by reference. References
to Sections are references to Sections in the applicable Indenture or, where
appropriate, to both Indentures.
Neither Indenture limits the aggregate principal amount of Debt Securities
which may be issued thereunder and each Indenture provides that Debt
Securities of any series may be issued thereunder up to the aggregate
principal amount which may be authorized from time to time by the Company.
Neither the Indentures nor the Debt Securities will limit or otherwise
restrict the amount of other indebtedness which may be incurred or the other
securities which may be issued by the Company or any of its affiliates.
Reference is made to the Prospectus Supplement for a description of the
following terms, where applicable, of each series of the Offered Debt
Securities in respect of which this Prospectus is being delivered: (1) the
title of the Offered Debt Securities; (2) any limit upon the aggregate
principal amount or aggregate initial public offering price of the Offered
Debt Securities; (3) the Person to whom any interest on an Offered Debt
Security shall be payable, if other than the Person in whose name the Offered
Debt Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest; (4) the date
or dates on which the principal of the Offered Debt Securities is payable; (5)
the rate or rates at which the Offered Debt Securities shall bear interest, if
any, or the Floating or Adjustable Rate Provision pursuant to which such rates
are determined, the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such interest shall be payable and the Regular
Record Date for the interest payable on any Interest Payment Date; (6) the
place or places where the principal of (and premium, if any) and interest on,
or the principal (and premium, if any) only of, Offered Debt Securities shall
be payable; (7) the period or periods within which, the price or prices at
which and the terms and conditions upon which Offered Debt Securities may be
redeemed, in whole or in part, at the option of the Company; (8) the
obligation, if any, of the Company to redeem or purchase Offered Debt
Securities pursuant to any sinking fund or analogous provisions or at the
option of a Holder thereof
11
<PAGE>
and the period or periods within which, the price or prices at which and the
terms and conditions upon which Offered Debt Securities shall be redeemed or
purchased, in whole or in part, pursuant to such obligations; (9) if other
than denominations of $100,000 and any integral multiple of $1,000 in excess
thereof, the denominations in which Offered Debt Securities shall be issuable;
(10) any other Event or Events of Default applicable with respect to Offered
Debt Securities in addition to those provided in Section 601 of the applicable
Indenture; (11) if other than the principal amount thereof, the portion of the
principal amount of Offered Debt Securities which shall be payable upon
declaration of acceleration of the Maturity thereof; (12) any other covenant
or warranty included for the benefit of Offered Debt Securities in addition to
(and not inconsistent with) those included in the applicable Indenture for the
benefit of all Debt Securities; (13) whether the Offered Debt Securities shall
be Certificated Securities or shall be issued in whole or in part in the form
of one or more Global Securities and, in such case, the Depositary for such
Global Security or Securities; (14) the currency or currencies, including
composite currencies, in which payment of the principal of and any premium and
interest on the Offered Debt Securities shall be payable if other than the
currency of the United States of America; (15) if the amount of payments of
principal of and any premium or interest on the Offered Debt Securities may be
determined with reference to an index, the manner in which such amounts shall
be determined; (16) if the principal of (and premium, if any) or interest on
the Offered Debt Securities are to be payable, at the election of the Company
or a Holder thereof, in a coin or currency other than that in which the
Offered Debt Securities are stated to be payable, the coin or currency in
which payment of the principal of (and premium, if any) or interest on Offered
Debt Securities as to which such election is made shall be payable, the period
or periods within which, and the terms and conditions upon which, such
election may be made; (17) whether the Offered Debt Securities are Senior
Securities or Subordinated Securities; (18) the price or prices (which may be
expressed as a percentage of the aggregate principal amount thereof) at which
the Offered Debt Securities will be issued; (19) any other terms of the
Offered Debt Securities (which terms shall not be inconsistent with the
provisions of the applicable Indenture). (Section 301)
If any of the Offered Debt Securities are sold for one or more foreign
currencies or foreign currency units or if the principal or premium, if any,
or interest, if any, on any series of Offered Debt Securities is payable in
one or more foreign currencies or foreign currency units, the restrictions,
elections, tax consequences, specific terms and other information with respect
to such issue of Offered Debt Securities and such currencies or currency units
will be set forth in the Prospectus Supplement relating thereto.
Debt Securities may be issued as Original Issue Discount Securities (bearing
no interest or interest at a rate which at the time of issuance is below
market rates), to be sold at a substantial discount below the stated principal
amount thereof due at the Stated Maturity of such Original Issue Discount
Securities. In the event of an acceleration of the Maturity of any Original
Issue Discount Security, the amount payable to the holder of such Original
Issue Discount Security upon such acceleration will be determined in
accordance with the applicable Prospectus Supplement, the terms of such
security and the applicable Indenture, but will be an amount less than the
amount payable at the Maturity of the principal of such Original Issue
Discount Security. (Section 101) Special Federal income tax, accounting and
other considerations applicable to Original Issue Discount Securities will be
described in the Prospectus Supplement relating thereto.
GUARANTEES
The Corporation will unconditionally guarantee the due and punctual payment
of the principal of, and premium, if any, and interest, if any, and sinking
fund payments, if any, on the Debt Securities, when and as the same shall
become due and payable, whether at maturity, by acceleration or redemption or
otherwise. The Guarantees of the Senior Securities rank pari passu with all
other general credit obligations of the Corporation. The Guarantees of the
Subordinated Securities are subordinate in right of payment to all Senior
Indebtedness of the Corporation. (Section 401)
Because the Corporation is a holding company, the rights of its creditors,
including the Holders of the Debt Securities in the event the Guarantees are
enforced, to share in the distribution of the assets of any subsidiary
12
<PAGE>
upon the subsidiary's liquidation or recapitalization will be subject to the
prior claims of the subsidiary's creditors (including in the case of the
Corporation's bank subsidiaries, their depositors), except to the extent that
the Corporation may itself be a creditor with recognized claims against the
subsidiary. In addition, there are certain regulatory limitations on the
payment of dividends and on loans and other transfers of funds to the
Corporation by its bank subsidiaries. See "Certain Regulatory Considerations".
REGISTRATION AND TRANSFER
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Offered Debt Securities will be issued only in fully registered form
without coupons in denominations of U.S. $100,000 and any integral multiple of
$1,000 in excess thereof, or in the case of foreign currency notes, in the
denominations indicated in the applicable Prospectus Supplement, and no
service charge will be made for any transfer or exchange of such Offered Debt
Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
(Sections 302 and 305)
Certificated Securities may be presented for transfer (with the form of
transfer endorsed thereon duly executed) or exchange for other Debt Securities
of the same series at the office of the Security Registrar specified according
to the terms of the applicable Indenture. (Section 305) The Company has agreed
in each of the Indentures that, with respect to Debt Securities having The
City of New York as a place of payment, the Company will appoint an office or
agency located in The City of New York where Debt Securities of that series
may be surrendered for such transfer or exchange. (Section 1102) Such transfer
or exchange shall be made without service charge, but the Company may require
payment of any taxes or other governmental charges as described in the
applicable Indenture.
GLOBAL SECURITIES
Debt Securities of like tenor and having the same date of issue may be
issued in whole or in part in the form of one or more Global Securities that
will be deposited with, or on behalf of, a depositary (the "Depositary")
identified in the Prospectus Supplement relating thereto. Global Securities
will be issued in registered form. Unless and until it is exchanged in whole
or in part for the individual Debt Securities represented thereby, a Global
Security may not be transferred except as a whole by the Depositary for such
Global Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by the
Depositary or any such nominee to a successor Depositary or any nominee of
such successor.
The specific terms of the depositary arrangement with respect to any offered
Debt Securities will be described in the Prospectus Supplement relating
thereto. The Company anticipates that the following provisions will generally
apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit, on its book-entry registration and
transfer system, the respective principal amounts of the individual Debt
Securities represented by such Global Security to the accounts of persons that
have accounts with such Depositary ("participants"). Such accounts will be
designated by the underwriters or agents with respect to such Debt Securities
or by the Company if such Debt Securities are offered and sold directly by the
Company. Ownership of beneficial interests in a Global Security will be
limited to participants of the applicable Depositary or persons that may hold
interests through such participants. Ownership of beneficial interests in such
Global Security will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the applicable Depositary or its
nominee (with respect to interests of participants) and the records of
participants (with respect to interests of persons other than participants).
The laws of some states require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such limits and such
laws may impair the ability to transfer beneficial interests in a Global
Security.
13
<PAGE>
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner and Holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture governing such Debt Securities. Except as provided below, owners of
beneficial interests in a Global Security will not be entitled to have any of
the individual Debt Securities represented by such Global Security registered
in their names, will not receive or be entitled to receive physical delivery
of any such Debt Securities in definitive form and will not be considered the
owners or Holders thereof under the Indenture governing such Debt Securities.
Accordingly, each person owning a beneficial interest in the Global Security
must rely on the procedures of the Depositary and, if such person is not a
participant, on the procedures of the participant through which such person
owns its interest, to exercise any rights of a Holder under the Indenture. The
Indenture provides that the Depositary may grant proxies and otherwise
authorize participants to take any action which a Holder is entitled to take
under the Indenture. The Company understands that under existing industry
practice, in the event that the Company requests any action of Holders or a
beneficial owner desires to take any action a Holder is entitled to take, the
Depositary would authorize the participants to take such action and that the
participants would authorize beneficial owners owning through such
participants to take such action or would otherwise act upon the instructions
of beneficial owners owning through them.
Payments of principal of, premium, if any, and interest, if any, on
individual Debt Securities represented by a Global Security registered in the
name of a Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner of the Global Security
representing such Debt Securities. None of the Company, the Corporation, the
Trustee for such Debt Securities, any Paying Agent, the Security Registrar for
such Debt Securities or any agent for such persons will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of the Global
Security for such Debt Securities or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
The Company and the Corporation expect that the Depositary for Debt
Securities or its nominee, upon receipt of any payment of principal, premium
or interest in respect of a Global Security representing any of such Debt
Securities immediately will credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the
principal amount of such Global Security for such Debt Securities as shown on
the records of such Depositary or its nominee. The Company and the Corporation
also expect that payments by participants to owners of beneficial interests in
such Global Security held through such participants will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"street name". Such payments will be the responsibility of such participants.
If (i) the Depositary for any series of Offered Debt Securities is at any
time unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by the Company within 90 days or (ii) an Event of
Default shall occur and be continuing with respect to such series, the Company
will issue individual Debt Securities of such series in definitive form in
exchange for the Global Security representing such Debt Securities. In
addition, the Company may at any time and in its sole discretion, subject to
any limitations described in the Prospectus Supplement relating to such
Offered Debt Securities, determine not to have any Debt Securities of a series
represented by one or more Global Securities and, in such event, will issue
individual Debt Securities of such series in definitive form in exchange for
the Global Security or Securities representing such series of Debt Securities.
(Section 305) Further, if the Company so specifies with respect to the Debt
Securities of a series, an owner of a beneficial interest in a Global Security
representing Debt Securities of such series may, on terms acceptable to the
Company, the applicable Trustee and the Depositary for such Global Security,
receive Debt Securities of such series in definitive form in exchange for such
beneficial interest, subject to any limitations described in the Prospectus
Supplement relating to such Debt Securities. In any such instance, an owner of
a beneficial interest in a Global Security will be entitled to physical
delivery in definitive form of Debt Securities of the series represented by
such Global Security equal in principal amount to such beneficial interest and
to have such Debt Securities registered in its name. Debt Securities of such
series so issued in definitive
14
<PAGE>
form will be issued in denominations, unless otherwise specified by the
Company, of $100,000 and any integral multiple of $1,000 in excess thereof,
or, in the case of foreign currency notes, in the denominations indicated in
the applicable Prospectus Supplement.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of, premium, if any, and interest, if any, on Offered Debt
Securities will be made at the office of such Paying Agent or Paying Agents as
the Company may designate from time to time, except that, at the option of the
Company, payment of any interest may be made (i) by check mailed to the
address of the person entitled thereto as such address shall appear in the
applicable Security Register or (ii) by wire transfer to an account maintained
by the person entitled thereto as specified in the applicable Security
Register. (Section 1102) Unless otherwise indicated in an applicable
Prospectus Supplement, payment of any instalment of interest on Debt
Securities will be made to the person in whose name such Debt Security is
registered at the close of business on the Regular Record Date for such
payment. (Section 307)
CONSOLIDATION, MERGER OR SALE OF ASSETS
Each Indenture provides that each of the Company and the Corporation may,
without the consent of the holders of any of the Debt Securities outstanding
under the applicable Indenture, consolidate with, merge into or transfer its
assets substantially as an entirety to any person, provided that (i) any such
successor assumes the Company's or the Corporation's obligations on the
applicable Debt Securities and under the applicable Indenture, (ii) after
giving effect thereto, no Event of Default (as defined in the Senior
Indenture) in the case of the Senior Securities, or Event of Default or
Default (each as defined in the Subordinated Indenture) in the case of the
Subordinated Securities, shall have happened and be continuing and (iii)
certain other conditions under the applicable Indenture are met. (Sections 901
and 903)
MODIFICATION AND WAIVER
Modifications and amendments of each Indenture may be made by the Company,
the Corporation and the applicable Trustee with the consent of the Holders of
66 2/3% in principal amount of the Outstanding Debt Securities of each series
affected thereby; provided, however, that no such modification or amendment
may, without the consent of the Holder of each Outstanding Debt Security
affected thereby, (1) change the Stated Maturity of the principal of, or any
instalment or principal of or interest on, any Debt Security; (2) reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof; (3) reduce the amount of the Principal of
an Original Issue Discount Security that would be due and payable upon
acceleration of the Maturity thereof; (4) change any Place of Payment where,
or the coin or currency in which, the principal of any Debt Security or any
premium, or interest thereon is payable; (5) impair the right to institute
suit for the enforcement of any such payment on or with respect to a Debt
Security; (6) in the case of Subordinated Securities, modify the provisions of
the Subordinated Indenture with respect to the subordination of such Debt
Securities and the Guarantees thereof in a manner adverse to the Holders
thereof; (7) reduce the percentage in principal amount of the Outstanding Debt
Securities of any series, the consent of whose Holders is required for any
such modification or amendment or for waiver of certain defaults; (8) change
certain provisions relating to modification of the terms of each Indenture and
waiver of defaults thereunder; or (9) modify or affect in any manner adverse
to the Holders the terms and conditions of the Guarantees. (Section 1002)
Each Indenture provides that the Holders of 66 2/3% in principal amount of
the Outstanding Debt Securities of any series may on behalf of the Holders of
all Debt Securities of that series waive, insofar as that series is concerned,
compliance by the Company or the Corporation with certain restrictive
provisions of such Indenture. (Section 1108) Also, the Holders of a majority
in principal amount of the Outstanding Debt Securities of any series may on
behalf of the Holders of all Debt Securities of that series waive any past
default under the Indenture with respect to that series, except a default (i)
in the payment of the principal of, or premium, if any, or interest, if any,
on any Debt Security of that series or (ii) in respect of a provision which
under the Indenture
15
<PAGE>
cannot be modified or amended without the consent of the Holder of each
Outstanding Debt Security of that series affected. (Section 613)
EVENTS OF DEFAULT
If an Event of Default with respect to Debt Securities of any series at the
time Outstanding shall occur and be continuing, then and in every such case
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Debt Securities of that series may declare to be due and payable
immediately by a notice in writing to the Company and to the Corporation (and
to the Trustee if given by Holders) the principal amount (or, if the Debt
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that series) of
all Debt Securities of that series. However, at any time after such a
declaration of acceleration with respect to Debt Securities of any series has
been made, but before a judgment or decree based on such acceleration has been
obtained, the Holders of a majority in principal amount of Outstanding Debt
Securities of that series may, under certain circumstances, rescind and annul
such acceleration if all Events of Default, and, in the case of Subordinated
Securities, all Defaults, with respect to Debt Securities of that series have
been cured or waived as provided in the applicable Indenture. (Section 602)
For information as to waiver of defaults, see "Modification and Waiver". The
term "Event of Default" is defined differently in the Senior Indenture than in
the Subordinated Indenture. (Section 601) For information as to what
constitutes Events of Default, see "Senior Securities--Events of Default" and
"Subordinated Securities--Events of Default and Limited Rights of
Acceleration".
Reference is made to the Prospectus Supplement relating to each series of
Debt Securities which are Original Issue Discount Securities for the
particular provisions relating to acceleration of the Maturity of a portion of
the principal amount of such Original Issue Discount Securities upon the
occurrence of an Event of Default and the continuation thereof.
Each Indenture provides that the Trustee thereunder will be under no
obligation, subject to the duty of the Trustee during a default to act with
the required standard of care, to exercise any of its rights or powers under
such Indenture at the request or direction of any of the Holders, unless such
Holders shall have offered to the Trustee reasonable indemnity. (Section 703)
Subject to such provisions for indemnification of the Trustee, the Holders of
a majority in principal amount of the Outstanding Debt Securities of any
series will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred on the Trustee, with respect to the Debt Securities
of that series. (Section 612)
No Holder of any Debt Security of any series will have the right to
institute any proceeding with respect to the applicable Indenture or for any
remedy thereunder unless such Holder shall have previously given to the
Trustee written notice of a continuing Event of Default or, in the case of
Subordinated Securities, a Default, with respect to Debt Securities of that
series and unless also the Holders of at least 25% in principal amount of the
Outstanding Debt Securities of that series shall have made written request,
and offered reasonable indemnity, to the Trustee to institute such proceeding
as Trustee, and the Trustee shall not have received from the Holders of a
majority in principal amount of the Outstanding Debt Securities of that series
a direction inconsistent with such request and shall have failed to institute
such proceeding within 60 days. (Section 607) However, the Holders of any Debt
Security will have an absolute right to receive payment of the principal of,
and premium, if any, and interest, if any, on such Debt Security on or after
the due dates expressed in such Debt Security and to institute suit for the
enforcement of any such payment. (Section 608)
The Company and the Corporation are required to file annually with each
Trustee a written statement of officers as to performance or fulfillment of
certain of their obligations under each Indenture and as to the existence or
non-existence of defaults under each Indenture or the Debt Securities issued
thereunder. (Sections 1105 and 1106)
16
<PAGE>
SENIOR SECURITIES
PRIORITY
The Senior Securities will rank pari passu with all outstanding senior
indebtedness of the Company. The Guarantees of the Senior Securities will rank
pari passu with all outstanding senior indebtedness of the Corporation.
LIMITATION UPON DISPOSITION OF VOTING STOCK AND CERTAIN TRANSACTIONS
The Senior Indenture contains a covenant by the Corporation that, so long as
any of the Senior Securities are outstanding, it will not sell, assign,
transfer, grant a security interest in or otherwise dispose of any shares of,
or securities convertible into, or options, warrants or rights to subscribe
for or purchase shares of, Voting Stock of the Bank or the Company, nor will
it permit the Bank or the Company to issue, except to the Corporation and
except for directors' qualifying shares, any shares of, or securities
convertible into, or options, warrants or rights to subscribe for or purchase
shares of, Voting Stock of the Bank or the Company, unless, in the case of
Voting Stock of the Bank (i) any such sale, assignment, transfer, grant of a
security interest or other disposition by the Corporation, or any such
issuance by the Bank, is made for fair market value, and (ii) the Corporation
will own at least 80% of the issued and outstanding Voting Stock of the Bank
free and clear of any security interest after giving effect to such
transaction. The covenant also provides that so long as any of the Senior
Securities are outstanding, but subject to the provisions of Article Nine
(Consolidation, Merger and Sale), the Corporation will not permit the Bank or
the Company (a) to merge or consolidate with another corporation or (b) to
sell, assign, transfer, grant a security interest in or otherwise dispose of
("Transfer") or lease all or substantially all of the assets of the Bank or
the Company unless, in the case of the Bank, (i) any such Transfer or lease by
the Bank or any such merger or consolidation with the Bank is made for fair
market value (provided, however, that satisfaction of this fair market value
provision will not be required in the event the Transfer, lease, merger or
consolidation is to or with a corporation at least 80% of the issued and
outstanding Voting Stock of which is owned, directly or indirectly, by the
Corporation), and (ii) after giving effect to such transaction, the
Corporation will own, directly or indirectly, at least 80% of the issued and
outstanding shares of Voting Stock of the Bank free and clear of any security
interest. As used in this paragraph, the terms "the Bank" and "the Company"
include any successor corporation. (Section 1107)
Unless otherwise indicated in the applicable Pricing Supplement, neither the
Senior Indenture nor the Senior Securities contains covenants specifically
designed to protect Holders in the event of a highly leveraged transaction
involving the Company, the Corporation or the Bank.
EVENTS OF DEFAULT
The following will be Events of Default under the Senior Indenture with
respect to Senior Securities of any series: (1) failure to pay any interest on
any Senior Security of that series when due, continued for 30 days; (2)
failure to pay principal of, or premium, if any, on any Senior Security of
that series when due; (3) failure to deposit any sinking fund payment, when
due, in respect of any Senior Security of that series; (4) failure to perform
or breach of any other covenant of the Company or the Corporation in the
Senior Indenture (other than a covenant included in the Senior Indenture
solely for the benefit of a series of Senior Securities other than that
series), continued for 60 days after written notice; (5) certain events of
bankruptcy, insolvency or reorganization of the Company, the Corporation or
the Bank; and (6) any other Event of Default provided in the applicable
Prospectus Supplement with respect to Senior Securities of that series.
(Section 601)
REGARDING CHASE
The Corporation's bank subsidiaries maintain deposit accounts and conduct
other banking transactions with Chase in the ordinary course of their banking
businesses. Chase is the Agent Bank and a participant in the $300 million
revolving credit facility created to provide back-up support for the
Corporation's commercial paper borrowings.
17
<PAGE>
SUBORDINATED SECURITIES
SUBORDINATION
The Subordinated Securities will be subordinate in right of payment to all
Senior Indebtedness of the Company. The Guarantees of the Subordinated
Securities will be subordinate in right of payment to all Senior Indebtedness
of the Corporation.
Upon any distribution of assets of the Company and/or the Corporation upon
dissolution, winding up, liquidation or reorganization of the Company or the
Corporation, as the case may be, the payment of the principal of, premium, if
any, and interest, if any, on the Subordinated Securities, in the case of the
Company, and on the Guarantees thereof, in the case of the Corporation, is to
be subordinated in right of payment to the extent provided in the Subordinated
Indenture to the prior payment in full of all Senior Indebtedness of the
Company or the Corporation, as the case may be. In addition, no payment may be
made of the principal of, premium, if any, and interest on the Subordinated
Securities or the Guarantees thereof, or in respect of any redemption,
retirement, purchase or other acquisition thereof, at any time when there is a
default in the payment of the principal of, premium, if any, interest, if any,
on or otherwise in respect of any Senior Indebtedness of the Company or the
Corporation, as the case may be. (Section 1401, Section 1402) Except as
described above, the obligation of the Company and the Corporation to make
payment of the principal of, premium, if any, and interest, if any, on the
Subordinated Securities or on the Guarantees thereof, as the case may be, will
not be affected. By reason of such subordination, in the event of a
distribution of assets upon any dissolution, winding up, liquidation or
reorganization of the Company and/or the Corporation, Holders of Senior
Indebtedness of the Company or the Corporation may recover more, ratably, than
Holders of the Subordinated Securities. Subject to payment in full of all
Senior Indebtedness of the Company, the rights of the Holders of Subordinated
Securities will be subrogated to the rights of the Holders of Senior
Indebtedness of the Company to receive payments or distribution of cash,
property or securities of the Company applicable to Senior Indebtedness of the
Company. Subject to payment in full of all Senior Indebtedness of the
Corporation, the rights of Holders of Subordinated Securities under the
Guarantees endorsed thereon will be subject to the rights of Holders of Senior
Indebtedness of the Corporation to receive payments or distributions of cash,
property or securities of the Corporation applicable to Senior Indebtedness of
the Corporation.
Senior Indebtedness of the Company is defined in the Subordinated Indenture
as any obligation of the Company to its creditors, whether now outstanding or
subsequently incurred, except (i) the 9 3/4% Subordinated Debentures Due 2001,
the 9 1/4% Subordinated Debentures Due 2001 and the 6 7/8% Subordinated
Debentures due March 1, 2003, each issued under the indenture, dated as of
April 15, 1991, among the Guarantor, the Company and Continental Bank,
National Association, as trustee, and all other notes and obligations that may
be issued under such indenture, as the same may be amended from time to time,
(ii) any obligation as to which in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is provided that such
obligation is not Senior Indebtedness and (iii) obligations evidenced by the
Subordinated Securities. Senior Indebtedness of the Guarantor is defined in
the Subordinated Indenture as any obligation of the Guarantor to its
creditors, whether now outstanding or subsequently incurred, except (i) the
7 1/4% Convertible Subordinated Capital Notes due 1999 issued under the
indenture, dated as of September 10, 1987, between the Guarantor and Bank of
New York, as trustee, (ii) guarantee of the Guarantor of the 9 3/4%
Subordinated Debentures Due 2001, the 9 1/4% Subordinated Debentures Due 2001
and the 6 7/8% Subordinated Debentures due March 1, 2003, each issued under
the indenture, dated as of April 15, 1991, among the Guarantor, the Company
and Continental Bank, National Association, as trustee, and all guarantees of
the Guarantor of any other notes and obligations which may be issued under
such indenture, as the same may be amended from time to time; (iii) any
obligation as to which, in the instrument creating or evidencing the same or
pursuant to which the same is outstanding, it is provided that such obligation
is not Senior Indebtedness; and (iv) obligations evidenced by the Guarantees
of the Subordinated Securities. (Section 101)
There is no limitation on the issuance of additional Senior Indebtedness of
the Company or the Corporation. The Company and the Corporation expect from
time to time to incur additional indebtedness constituting Senior
Indebtedness. As of June 30, 1995, the aggregate principal amount of Senior
Indebtedness of the Company
18
<PAGE>
outstanding was approximately $950 million and the aggregate principal amount
of the Senior Indebtedness of the Corporation (including all Senior
Indebtedness of the Company is guaranteed by the Corporation) outstanding was
approximately $950 million.
LIMITATION UPON DISPOSITION OF VOTING STOCK AND CERTAIN TRANSACTIONS
The Subordinated Indenture contains a covenant by the Corporation that, so
long as any of the Subordinated Securities are outstanding, but subject to the
provisions of Article Nine (Consolidation, Merger and Sale), the Corporation
will not sell, assign, transfer, grant a security interest in or otherwise
dispose of any shares of, securities convertible into or options, warrants or
rights to subscribe for or purchase shares of, Voting Stock of the Company,
nor will it permit the Company (or any successor thereto) (a) to issue, except
to the Corporation, any shares of, securities convertible into or options,
warrants or rights to subscribe for or purchase shares of, Voting Stock of the
Company, (b) to merge or consolidate with another Person, other than the
Corporation, or (c) to sell, assign, transfer, grant a security interest in or
otherwise dispose of or lease all or substantially all of the assets of the
Company. (Section 1107)
Unless otherwise indicated in the applicable Pricing Supplement, neither the
Subordinated Indenture nor the Subordinated Securities contains covenants
specifically designed to protect Holders in the event of a highly leveraged
transaction involving the Company, the Corporation or the Bank.
EVENTS OF DEFAULT AND LIMITED RIGHTS OF ACCELERATION
The Subordinated Indenture defines an Event of Default as being only certain
events involving the bankruptcy, insolvency or reorganization of the
Corporation or the Bank. (Section 601) The rights of First Interstate, as
Trustee, and the Holders upon the occurrence of an Event of Default are
described in "Description of Debt Securities and Guarantees--Events of
Default". The Subordinated Indenture does not define an Event of Default as
including, or provide for any right of acceleration of the payment of
principal of the Subordinated Securities upon, a bankruptcy, insolvency or
reorganization of the Company alone or a default in the payment of principal
or interest or in the performance of any covenant or agreement in the
Subordinated Securities or the Subordinated Indenture. Currently, neither the
Company nor the Corporation are in default in the payment of principal,
premium or interest on any outstanding subordinated indebtedness. The
Subordinated Indenture defines a Default as being (1) the failure to pay
interest on any Subordinated Securities when due, whether or not such payment
is prohibited by the subordination provisions of the Subordinated Indenture,
continued for 30 days, (2) the failure to pay principal on any Subordinated
Securities when due, whether or not such payment is prohibited by the
subordination provisions of the Subordinated Indenture, or (3) the failure to
perform any other covenant of the Corporation, or a breach by the Corporation
of a warranty in the Subordinated Indenture, continued for 60 days after
written notice is given as provided in the Subordinated Indenture. If an Event
of Default or a Default shall occur and be continuing, the Trustee may,
subject to certain limitations and conditions, seek to enforce payment of such
principal or accrued interest or the performance of such covenant or agreement
through appropriate judicial proceedings against the Company or the
Corporation. (Section 603)
REGARDING FIRST INTERSTATE
The Corporation's bank subsidiaries maintain deposit accounts and conduct
other banking transactions with First Interstate in the ordinary course of
their banking businesses. First Interstate is a participant in the $300
million revolving credit facility created to provide back-up support for the
Corporation's commercial paper borrowings.
CERTAIN TAX CONSIDERATIONS
The Company will be required to withhold the Pennsylvania Corporate Loans
Tax from interest payments on Debt Securities held by or for those subject to
such tax, principally individuals and partnerships resident in Pennsylvania
and resident trustees of Pennsylvania trusts. The tax, at the current rate of
four mills on each dollar of nominal value ($4.00 per $1,000), will be
withheld, at any time when it is applicable, from any interest payment to
taxable holders at the annual rate of $4.00 per $1,000 principal amount of the
Debt Securities. The Debt Securities will be exempt, under current law, from
personal property taxes imposed by political subdivisions in Pennsylvania.
19
<PAGE>
See the accompanying Prospectus Supplement for additional information
concerning certain tax considerations relating to specific series of Offered
Debt Securities. Holders of Debt Securities should consult their tax advisors
as to the applicability to the Debt Securities and interest, if any, payable
thereon of Federal, state and local taxes.
PLAN OF DISTRIBUTION
The Company may offer and sell Debt Securities to or through underwriters,
acting as principals for their own accounts or as agents. The Company also may
sell Debt Securities to purchasers directly or through agents. The Prospectus
Supplement sets forth the terms of the offering of the Offered Debt Securities
including the names of any underwriters, agents or dealers, the purchase price
of the Offered Debt Securities and the proceeds to the Company from the sale,
any underwriting discounts and other items constituting underwriters'
compensation and any discounts and commissions allowed or reallowed or paid to
dealers or agents. Any initial public offering price and any discounts or
commissions allowed or reallowed or paid to dealers or agents may be changed
from time to time.
The distribution of the Debt Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Company also may offer
and sell Debt Securities in exchange for one or more of its outstanding issues
of debt or convertible debt securities.
In connection with the sale of Debt Securities, underwriters may be deemed
to have received compensation from the Company in the form of underwriting
discounts or commissions and may also receive commissions from purchasers of
Debt Securities for whom they may act as agent. Underwriters may sell Debt
Securities to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agent.
Underwriters, dealers and agents participating in the distribution of Debt
Securities may be deemed to be underwriters, and any discounts or commissions
received by them and any profit realized by them on resale of the Debt
Securities may be deemed to be underwriting discounts and commissions, under
the Securities Act. Under agreements which may be entered into by the Company
and the Corporation, underwriters, dealers and agents who participate in the
distribution of Debt Securities may be entitled to indemnification by the
Company and the Corporation against certain liabilities, including liabilities
under the Securities Act, or to contribution in respect thereof.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other persons acting as the Company's agents to solicit offers
by certain institutions to purchase Offered Debt Securities from the Company
at the public offering price set forth in such Prospectus Supplement pursuant
to delayed delivery contracts providing for payment and delivery on a future
date. Each such contract will be for an amount not less than, and the
aggregate principal amount of Debt Securities sold pursuant to such contracts
shall be for an amount not less nor more than, the respective amounts stated
in the Prospectus Supplement. 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 the Company. The
obligations of any purchaser under any such contract will not be subject to
any conditions except that (i) the purchase of the Offered Debt 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 Debt
Securities are also being sold to underwriters, such underwriters shall have
purchased the Debt Securities not sold for delayed delivery. The underwriters
and such other persons will not have any responsibility in respect of the
validity or performance of such contracts.
Certain of the underwriters, dealers or agents may be customers of
(including borrowers from), engage in transactions with, and perform services
for, the Company, the Corporation, the Corporation's bank subsidiaries or one
or more of their affiliates in the ordinary course of business.
20
<PAGE>
VALIDITY OF DEBT SECURITIES AND GUARANTEES
The validity of the Offered Debt Securities and related Guarantees will be
passed upon for the Company and the Corporation by James M. Gockley, Esq.,
Assistant General Counsel and Secretary of the Corporation, One Mellon Bank
Center, Pittsburgh, Pennsylvania 15258. Information set forth under "Certain
Tax Considerations" has been passed upon by Michael K. Hughey, Esq., Senior
Vice President and Director of Taxes of the Bank. As of June 30, 1995, Mr.
Gockley owned approximately 1,780 shares of the Corporation's Common Stock and
options covering an additional 10,050 shares of Common Stock. As of June 30,
1995, Mr. Hughey was the beneficial owner of 1,798 shares of Common Stock and
options covering an additional 17,203 shares of Common Stock. Unless otherwise
indicated in the Prospectus Supplement relating thereto, if the Debt
Securities are being distributed in an underwritten offering, the validity of
the Debt Securities and related Guarantees will be passed upon for the
underwriters by Sullivan & Cromwell, 125 Broad Street, New York, New York
10004, who will rely upon the opinion of Mr. Gockley as to matters of
Pennsylvania law. Sullivan & Cromwell from time to time performs legal
services for the Corporation.
EXPERTS
The consolidated financial statements of the Corporation and its
subsidiaries included in the Corporation's 1994 Annual Report to Shareholders,
which is incorporated by reference into the Corporation's Annual Report on
Form 10-K for the year ended December 31, 1994, have been incorporated herein
by reference in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing. The report of
KPMG Peat Marwick LLP, covering the December 31, 1994, financial statements
refers to a change in the method of accounting for certain investments in debt
and equity securities pursuant to Statement of Financial Accounting Standards
No. 115.
21
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an estimate of the expenses which will be incurred in
connection with the issuance and distribution of the Debt Securities and
Guarantees being registered, other than underwriting discounts and
commissions:
To be borne by Company:
<TABLE>
<S> <C>
Registration Fee............................................ $ 517,242
Printing.................................................... 75,000*
Rating Agency Fees.......................................... 500,000*
Legal Fees and Expenses..................................... 100,000*
Accounting Fees............................................. 120,000*
Trustees' Fees.............................................. 20,000*
Blue Sky Fees and Expenses.................................. 15,000*
Miscellaneous............................................... 15,000*
----------
Total................................................... $1,362,242*
==========
</TABLE>
--------
*Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Restated Articles of Incorporation, as amended, of the Corporation (the
"Articles") provide that, except as prohibited by law, every director and
officer of the Corporation shall be entitled as of right to be indemnified by
the Corporation against expenses and any liability paid or incurred by such
person in connection with any actual or threatened claim, action, suit or
proceeding, civil, criminal, administrative, investigative or other, whether
brought by or in the right of the Corporation or otherwise, in which such
person may be involved (subject to certain limitations in the case of actions
by such person against the Corporation) by reason of such person being or
having been a director or officer of the Corporation or serving or having
served at the request of the Corporation as a director, officer, employee,
fiduciary or other representative of another entity. The Articles also give to
indemnitees the right to have their expenses in defending such actions paid in
advance by the Corporation, subject to any obligation imposed by law or
otherwise to reimburse the Corporation in certain events. The Corporation has
entered into an indemnity agreement (the "Indemnity Agreement") with each
director and certain of its officers which provides a contractual right to
indemnification against such expenses and liabilities (subject to certain
limitations and exceptions) and a contractual right to advancement of expenses
and contains additional provisions regarding determination of entitlement,
defense of claims, rights of contribution and other matters.
The Pennsylvania Business Corporation Law permits a corporation to indemnify
its directors and officers, and to pay their expenses in advance, subject to
certain limitations and exceptions. The specific indemnity provisions, which
are by their terms not intended to be exclusive, are, in general, not as broad
as the provisions of the Articles and the Indemnity Agreement; however, one
provision would preclude indemnification in any case where the act or failure
to act giving rise to the claim for indemnification is determined by a court
to have constituted willful misconduct or recklessness, and another provision
requires that advances of expenses may be made by a corporation only upon
receipt of an undertaking to repay such amount if it shall ultimately be
determined that such person is not entitled to be indemnified by the
corporation.
II-1
<PAGE>
The Corporation has purchased liability insurance policies covering its
directors and officers to insure against claims arising out of certain alleged
wrongful acts on the part of such directors and officers and against claims
arising out of certain alleged breaches of fiduciary duty under the Employee
Retirement Income Security Act of 1974 on the part of such directors and
officers.
Article Seventh of the Articles and Article Two of the Corporation's By-
Laws, as amended, both adopted by the shareholders of the Corporation at their
annual meeting on April 20, 1987, further provide that, to the fullest extent
that the laws of Pennsylvania, as in effect on January 27, 1987 or as
thereafter amended, permit elimination or limitation of the liability of
directors, no director of the Corporation shall be personally liable for
monetary damages as such for any action taken, or any failure to take any
action, as a director. The Pennsylvania Business Corporation Law provides that
whenever the by-laws of a corporation by a vote of the shareholders to
provide, a director shall not be personally liable for monetary damages as
such for any action taken, or failure to take any action, unless (i) the
director has breached or failed to perform the duties of his office under the
standard of care and justifiable reliance specified in the Act and (ii) the
breach or failure to perform constitutes self-dealing, willful misconduct or
recklessness. These provisions do not apply to (i) responsibility or liability
of a director pursuant to any criminal statute or (ii) the liability of a
director for payment of taxes.
ITEM 16. EXHIBITS
The following exhibits are filed herewith or incorporated by reference
herein as part of this Registration Statement:
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------
<C> <S>
1.1 Form of Underwriting Agreement
4.1 Trust Indenture dated as of May 2, 1988 among the Company, the
Corporation and The Chase Manhattan Bank (National Association), as
Trustee
4.2 First Supplemental Indenture dated as of November 29, 1990 among the
Company, the Corporation and The Chase Manhattan Bank (National
Association), as Trustee
4.3 Form of Subordinated Trust Indenture dated as of August 25, 1995 among
the Company, the Corporation and First Interstate Bank of California,
as Trustee
5.1 Opinion of James M. Gockley, Esq., as to the validity of the Debt
Securities and Guarantees being registered
8.1 Opinion of Michael K. Hughey, Esq., regarding tax matters
12.1 Computation of Ratio of Earnings to Fixed Charges (Parent Corporation)
12.2 Computation of Ratio of Earnings to Fixed Charges (Mellon Bank
Corporation and Subsidiaries)
23.1 Consent of James M. Gockley, Esq. (included in Exhibit 5.1)
23.2 Consent of Michael K. Hughey, Esq. (included in Exhibit 8.1)
23.3 Consent of KPMG Peat Marwick LLP
24.1 Powers of Attorney
25.1 Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of The Chase Manhattan Bank (National
Association)
25.2 Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of First Interstate Bank of California
</TABLE>
ITEM 17. UNDERTAKINGS
(a) Rule 415 Offering.
The undersigned Corporation and the undersigned Company hereby undertake:
(1) To file, during any period in which offers or sales are being made, 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, unless the information required to be included in
such post-effective amendment is contained in a periodic report filed
II-2
<PAGE>
by the Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 and incorporated herein by reference;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement, unless the information required to be included in
such post-effective amendment is contained in a periodic report filed by
the Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 and incorporated herein by reference; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(b) Filings Incorporating Subsequent Exchange Act Documents by Reference.
The undersigned Corporation and the undersigned Company hereby undertake
that, for purposes of determining any liability under the Securities Act of
1933, each filing of the Corporation's Annual Report pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) Acceleration of Effectiveness.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Company and the Corporation pursuant to the provisions described in Item 15
above, or otherwise, the Company and the Corporation have 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 Company or the Corporation of
expenses incurred or paid by a director, officer or controlling person of the
Company or the Corporation in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company and the
Corporation will, unless in the opinion of their counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by them is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
MELLON BANK CORPORATION
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, MELLON BANK
CORPORATION CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF PITTSBURGH, COMMONWEALTH OF
PENNSYLVANIA, ON THE 25TH DAY OF AUGUST, 1995.
Mellon Bank Corporation
By /s/Frank V. Cahouet
________________________________________
Frank V. Cahouet
Chairman, President and
Chief Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED ON THE 25TH DAY OF AUGUST, 1995.
By /s/ Steven G. Elliott
________________________________________
Steven G. Elliott
Principal Financial Officer
and Principal Accounting Officer
BURTON C. BORGELT, Director; CAROL R. BROWN, Director; FRANK V. CAHOUET,
Director and Principal Executive Officer; J. W. CONNOLLY, Director; CHARLES A.
CORRY, Director; C. FREDERICK FETTEROLF, Director; IRA J. GUMBERG, Director;
PEMBERTON HUTCHINSON, Director; ROTAN E. LEE, Director; ANDREW W. MATHIESON,
Director; EDWARD J. McANIFF, Director; ROBERT MEHRABIAN, Director; SEWARD
PROSSER MELLON, Director; DAVID S. SHAPIRA, Director; W. KEITH SMITH,
Director; HOWARD STEIN, Director; JOAB L. THOMAS, Director; WESLEY W. von
SCHACK, Director; WILLIAM J. YOUNG, Director.
By /s/ James M. Gockley
________________________________________
James M. Gockley
Attorney-in-fact
II-4
<PAGE>
SIGNATURES
MELLON FINANCIAL COMPANY
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, MELLON FINANCIAL
COMPANY 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 TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF PITTSBURGH, COMMONWEALTH OF PENNSYLVANIA, ON
THE 25TH DAY OF AUGUST, 1995.
Mellon Financial Company
By /s/ Steven G. Elliott
________________________________________
Steven G. Elliott
President and Chief Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES
INDICATED ON THE 25TH DAY OF AUGUST, 1995.
By /s/ Michael K. Hughey
________________________________________
Michael K. Hughey
Principal Accounting Officer and
Principal Financial Officer
STEVEN G. ELLIOTT, Director, and Principal Executive Officer; MICHAEL K.
HUGHEY, Director; W. KEITH SMITH, Director.
By /s/ James M. Gockley
________________________________________
James M. Gockley
Attorney-in-fact
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
NUMBER DESCRIPTION METHOD OF FILING
------ ----------- ----------------
<C> <S> <C>
1.1 Form of Underwriting Agreement Filed herewith
4.1 Trust Indenture dated as of May 2, 1988 among the Previously filed as
Company, the Corporation and The Chase Manhattan Exhibit 4.1 to
Bank (National Association), as Trustee Registration Statement on
Form S-3 (Registration No.
33-55226) and incorporated
herein by reference.
4.2 First Supplemental Indenture dated as of November 29, Previously filed as
1990 among the Company, the Corporation and The Chase Exhibit 4.2 to
Manhattan Bank (National Association), as Trustee Registration Statement on
Form S-3 (Registration No.
33-55226) and incorporated
herein by reference.
4.3 Form of Subordinated Trust Indenture dated as of August Filed herewith
, 1995 among the Company, the Corporation and First
Interstate Bank of California, as Trustee
5.1 Opinion of James M. Gockley, Esq., as to the validity Filed herewith
of the Debt Securities and Guarantees being registered
8.1 Opinion of Michael K. Hughey, Esq., regarding tax Filed herewith
matters
12.1 Computation of Ratio of Earnings to Fixed Charges Filed herewith
(Parent Corporation)
12.2 Computation of Ratio of Earnings to Fixed Charges Filed herewith
(Mellon Bank Corporation and Subsidiaries)
23.1 Consent of James M. Gockley, Esq. (included in Exhibit Filed herewith
5.1)
23.2 Consent of Michael K. Hughey, Esq. (included in Exhibit Filed herewith
8.1)
23.3 Consent of KPMG Peat Marwick LLP Filed herewith
24.1 Powers of Attorney Filed herewith
25.1 Form T-1 Statement of Eligibility and Qualification Previously filed as
under the Trust Indenture Act of 1939 of The Chase Exhibit 26.1 to
Manhattan Bank (National Association) Registration Statement in
Form S-3 (Registration No.
33-55226) and incorporated
herein by reference.
25.2 Form T-1 Statement of Eligibility and Qualification Filed herewith
under the Trust Indenture Act of 1939 of First
Interstate Bank of California
</TABLE>
<PAGE>
EX-1.1
UNDERWRITING AGREEMENT
[Date]
Mellon Financial Company and
Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Dear Sirs:
[Underwriters], as Underwriters (the "Underwriters"), understand that
Mellon Financial Company, a Pennsylvania corporation (the "Company"), proposes
to issue and sell $________ aggregate principal amount of [title of series] (the
"Offered Securities"), which are to be unconditionally guaranteed (as described
in the Prospectus Supplement and Prospectus referred to below) as to payments of
principal, premium, if any, and interest, if any, by Mellon Bank Corporation, a
Pennsylvania corporation registered as a bank holding cmopany under the Bank
Holding Company Act (the "Guarantor"). Subject to the terms and conditions set
forth herein or incorporated by reference herein, the Company hereby agrees to
sell, the Guarantor agrees to guarantee, and the Underwriters agree to purchase,
severally and not jointly, the principal amounts of such Offered Securities set
forth opposite their names on Schedule A hereto at ____% of their principal
amount, yielding total proceeds at closing of $________.
The Underwriters will pay for such Offered Securities in immediately
available funds upon delivery thereof at the offices of Sullivan & Cromwell, 125
Broad Street, New York, New York, 10004, at ____ _.m. (localtime) on [date], or
at such other time, not later than [date], as shall be designated by the
Underwriters.
The Offered Securities shall have the terms set forth in the Company's and
Guarantor's Prospectus Supplement, dated [date], and the Prospectus, dated
[date], particularly as follows:
Maturity: [date]
Interest Rate: _____% per annum
Redemption Provisions: _____________
Interest Payment Dates: __________ __ and __________
__, commencing _______________
__, _____
<PAGE>
All the provisions contained in the documents entitled Mellon Financial
Company Underwriting Agreement Standard Provisions (Debt), dated [date], a copy
of which you have previously received, are herein incorporated by reference in
their entirety and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein.
Please confirm your agreement by having an authorized officer sign a copy
of this Agreement in the appropriate space set forth below. This Agreement may
be signed in any number of counterparts with the same effect as if the
signatures thereto and hereto were upon the same instrument.
Very truly yours,
[Underwriters]
By: [Underwriter]
By: ___________________________________
Name:
Title:
Accepted: [date]
MELLON FINANCIAL COMPANY
By: __________________________________
Name:
Title:
Accepted: [date]
MELLON BANK CORPORATION
By: __________________________________
Name:
Title:
-2-
<PAGE>
SCHEDULE A
Principal Amount
Underwriters of Notes
------------ ----------------
[Underwriter]............................................ $
[Underwriter]............................................
----------
Total.......................................... $
-3-
<PAGE>
MELLON FINANCIAL COMPANY
UNDERWRITING AGREEMENT
STANDARD PROVISIONS (DEBT)
[Date]
From time to time Mellon Financial Company, a Pennsylvania corporation
(the "Company"), and Mellon Bank Corporation, a Pennsylvania corporation
registered as a bank holding company under the Bank Holding Company Act (the
"Guarantor"), may enter into one or more underwriting agreements that provide
for the sale of designated securities to the several underwriters named herein.
The standard provisions set forth herein may be incorporated by reference in any
such underwriting agreement (an "Underwriting Agreement"). The Underwriting
Agreement, including the provisions incorporated therein by reference, is herein
referred to as "this Agreement". Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined.
I.
The Company proposes to issue from time to time debt securities
consisting of debentures, notes and/or other unsecured evidences of indebtedness
(the "Securities") to be issued pursuant to the provisions of the Indenture,
dated as of May 2, 1988, as supplemented by the First Supplemental Indenture,
dated as of November 29, 1990, among the Company, the Guarantor and The Chase
Manhattan Bank (National Association), as trustee and/or pursuant to the
provisions of the Indenture, dated as of August 23, 1995, among the Company, the
Guarantor and First Interstate Bank of California, as trustee, as the same may
be from time to time amended or supplemented (the applicable indenture being
referred to herein as the "Indenture" and the trustee thereunder being referred
to herein as the "Trustee"). The Securities will have varying designations,
maturities, rates and times of payment of interest, selling prices and
redemption terms. The Securities will be guaranteed as to payment of principal,
premium, if any, and interest, if any, by the Guarantor.
The Company and the Guarantor have filed with the Securities and
Exchange Commission (the "Commission") a registration statement, including a
prospectus relating to the Securities and to the unconditional guarantee by the
Guarantor of payment of principal, premium, if any, and interest, if any (the
"Guarantees"), and have filed with, or mailed for filing to, the Commission a
prospectus supplement specifically relating to the Offered Securities and
related Guarantees (the "Offered Guarantees") pursuant to Rule 424 of the rules
and regulations promulgated under the Securities Act of 1933 (the "Securities
<PAGE>
Act"). The term Registration Statement means the registration statement as
amended to the date of the Underwriting Agreement. The term Basic Prospectus
means the prospectus included in the Registration Statement. The term
Prospectus means the Basic Prospectus together with the prospectus supplement
specifically relating to the Offered Securities and Offered Guarantees as filed
with, or mailed for filing to, the Commission pursuant to Rule 424. The term
preliminary prospectus means a preliminary prospectus supplement specifically
relating to the Offered Securities and Offered Guarantees together with the
Basic Prospectus. As used herein, the terms "Registration Statement", "Basic
Prospectus", "Prospectus" and "preliminary prospectus" shall include in each
case the material, if any, incorporated by reference therein.
The term Underwriters' Securities means the Offered Securities to be
purchased by the Underwriters herein. The term Contract Securities means the
Offered Securities, if any, to be purchased pursuant to the delayed delivery
contracts referred to below.
II.
If the Prospectus provides for sales of Offered Securities pursuant to
delayed delivery contracts, the Company hereby authorizes the Underwriters to
solicit offers to purchase Contract Securities on the terms and subject to the
conditions set forth in the Prospectus pursuant to delayed delivery contracts
substantially in the form of Schedule I attached hereto ("Delayed Delivery
Contracts") but with such changes therein as the Company may authorize or
approve. Delayed Delivery Contracts are to be with institutional investors
approved by the Company and of the types set forth in the Prospectus. On the
Closing Date (as hereinafter defined), the Company will pay the Manager as
compensation, for the accounts of the Underwriters, the fee set forth in the
Underwriting Agreement in respect of the principal amount of Contract
Securities. The Underwriters will not have any responsibility in respect of the
validity or the performance of Delayed Delivery Contracts.
If the Company executes and delivers Delayed Delivery Contracts with
institutional investors, the Contract Securities shall be deducted from the
Offered Securities to be purchased by the several Underwriters, and the
aggregate principal amount of Offered Securities to be purchased by each
Underwriter shall be reduced pro rata in proportion to the principal amount of
Offered Securities set forth opposite each Underwriter's name in the
Underwriting Agreement, except to the extent that the Manager determines that
such reduction shall be otherwise and so advises the Company.
-2-
<PAGE>
III.
The Company is advised by the Manager that the Underwriters propose to
make a public offering of their respective portions of the Underwriters'
Securities as soon after this Agreement is entered into as in the Manager's
judgment is advisable. The Underwriters will offer the Underwriters' Securities
for sale upon the terms and conditions set forth in the Prospectus.
IV.
Payment for the Underwriters' Securities shall be made by certified or
official bank check or checks drawn on a bank approved by the Company and
payable to the order of the Company in New York Clearing House funds at the time
and place set forth in the Underwriting Agreement, upon delivery to the Manager
for the respective accounts of the several Underwriters of the Underwriters'
Securities registered in such names and in such denominations as the Manager
shall request in writing not less than two full business days prior to the date
of delivery. The time and date of such payment and delivery with respect to the
Underwriters' Securities are herein referred to as the Closing Date. The
Offered Securities will be made available for checking and packaging at least
twenty-four hours prior to the time for delivery.
V.
The several obligations of the Underwriters hereunder are subject to the
following conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect, and no proceedings for such purpose shall be
pending before or threatened by the Commission, and the Manager shall have
received on the Closing Date a certificate, dated the Closing Date and
signed by an executive officer of the Company, to the foregoing effect. The
officer making such certificate may rely upon the best of his knowledge as
to proceedings pending or threatened.
(b) The Manager shall have received on the Closing Date an opinion of the
General Counsel or Assistant General Counsel of the Guarantor and counsel to
the Company, dated the Closing Date, to the effect set forth in Exhibit A.
(c) The Manager shall have received on the Closing Date an opinion of
Sullivan & Cromwell, as counsel to the Underwriters, dated the Closing Date,
with respect to the incorporation of the Company and the Guarantor, the
validity of the Indenture, the Offered Securities and the Offered
-3-
<PAGE>
Guarantees, the Registration Statement, the Prospectus and other related
matters as the Manager may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to enable
them to pass upon such matters.
(d) The Manager shall have received on the Closing Date letters, dated the
Closing Date and in form and substance satisfactory to the Manager, from KPMG
Peat Marwick LLP, independent public accountants to the Guarantor, to the
effect set forth in Exhibit B.
(e) Since the respective dates as of which information is given in the
Prospectus, there shall not have been any material and adverse change, or any
development involving a prospective material and adverse change, in the
creditworthiness of the Company or the Guarantor, otherwise than as set forth
or contemplated in the Prospectus, the effect of which is in the reasonable
judgment of the Manager so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering or the delivery of the
Offered Securities on the terms and in the manner contemplated in the
Prospectus.
(f) On or after the date of this Agreement (i) no downgrading shall have
occurred in the rating accorded the debt securities of or guaranteed by the
Guarantor or the preferred stock of the Guarantor by any "nationally
recognized statistical rating organization," as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act and (ii)
no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
any debt securities of or guaranteed by the Guarantor or preferred stock of
the Guarantor.
(g) On or after the date of this Agreement there shall not have occurred
any of the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a general
moratorium on commercial banking activities in New York declared by either
Federal or New York State authorities; or (iii) the outbreak or escalation of
hostilities involving the United States or the declaration by the United
States of a national emergency or war, if the effect of any such events
specified in this clause (iii) in the judgment of the Underwriters makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities being delivered on the Closing Date on the terms
and in the manner contemplated by the Prospectus.
-4-
<PAGE>
VI.
In further consideration of the agreements of the Underwriters contained
in this Agreement, the Company and the Guarantor hereby covenant:
(a) to furnish the Manager without charge a signed copy of the Registration
Statement, including exhibits and materials, if any, incorporated by
reference therein, and during the period mentioned in paragraph (c) below, as
many copies of the Prospectus, any documents incorporated by reference
therein and any supplements and amendments thereto as the Manager may
reasonably request. (The terms "supplement" and "amendment" or "amend" as
used in this Agreement shall include all documents filed by the Company with
the Commission pursuant to the Securities Exchange Act of 1934 (the "Exchange
Act") subsequent to the date of the Basic Prospectus that are deemed to be
incorporated by reference in the Prospectus);
(b) before amending or supplementing the Registration Statement or the
Prospectus with respect to the Offered Securities and the Offered Guarantees,
to furnish the Manager a copy of each such proposed amendment or supplement;
(c) if, during such period after the date of the first public offering of
the Offered Securities as in the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered, any event shall occur as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is necessary
to amend or supplement the Prospectus to comply with law, forthwith to
prepare and furnish at its own expense to the Underwriters, either amendments
or supplements to the Prospectus so that the statements in the Prospectus as
so amended or supplemented will not, in light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus will comply with law;
(d) to endeavor to qualify the Offered Securities and the Offered
Guarantees for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Manager shall reasonably request, provided that, in
connection therewith, neither the Company nor the Guarantor shall be required
to qualify as a foreign corporation or to file a general consent to service
of process in any jurisdiction, and to pay all expenses (including fees and
disbursements of counsel) in connection with the
-5-
<PAGE>
determination of the eligibility of the Offered Securities and the Offered
Guarantees for investment under the laws of such jurisdictions as the Manager
may designate;
(e) to make generally available to the Guarantor's security holders as soon
as practicable an earnings statement covering a twelve-month period beginning
after the date of the Underwriting Agreement, which shall satisfy the
provision of Section 11(a) of the Securities Act; and
(f) during the period beginning on the date of the Underwriting Agreement
and continuing to and including the Closing Date, not to offer, sell,
contract to sell or otherwise dispose of any debt securities issued or
guaranteed by the Guarantor that in the reasonable judgment of the Manager
are substantially similar to the Offered Securities, without the prior
written consent of the Manager.
VII.
Each of the Company and the Guarantor represents and warrants to each
Underwriter that (i) each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder, (ii) each part of the
registration statement (including the documents incorporated by reference
therein) filed with the Commission pursuant to the Securities Act relating to
the Securities and the Guarantees, when such part became effective, did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, (iii)
each preliminary prospectus, if any, filed pursuant to Rule 424 under the
Securities Act complied when so filed in all material respects with the
requirements of the Securities Act and the applicable rules and regulations
thereunder, (iv) the Registration Statement and the Prospectus comply and, as
amended or supplemented, if applicable, will comply in all material respects
with the requirements of the Securities Act and the applicable rules and
regulations thereunder and (v) the Registration Statement and the Prospectus do
not contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; except that these representations and
warranties do not apply to statements or omissions in the Registration
Statement, any preliminary Prospectus or the Prospectus based
-6-
<PAGE>
upon information furnished to the Company in writing by any Underwriter
expressly for use therein.
The Company and the Guarantor jointly and severally agree to indemnify
and hold harmless each Underwriter and each person, if any, who controls such
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, any
preliminary prospectus or the Prospectus (if used within the period set forth in
paragraph (c) of Article VI hereof and as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto), or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements in the Registration Statement
not misleading, or the statements in any preliminary prospectus, the Prospectus
or any document incorporated by reference in the Registration Statement, in
light of the circumstances under which they were made, not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information furnished in writing to the Company or the Guarantor by any
Underwriter expressly for use therein.
Each Underwriter agrees to indemnify and hold harmless the Company and
the Guarantor, the directors of either, the officers of either who sign the
Registration Statement and any person controlling the Company or the Guarantor
to the same extent as the foregoing indemnity from the Company and the Guarantor
to each Underwriter, but only with respect to information relating to such
Underwriter furnished in writing by such Underwriter expressly for use in the
Registration Statement, any preliminary prospectus or the Prospectus.
In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing, and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
and shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the indemnifying party and
the
-7-
<PAGE>
indemnified party shall have mutually agreed to the retention of such counsel
or (ii) the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them. It is understood that
the indemnifying party shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified parties. Such
firm shall be designated in writing by the Manager in the case of parties
indemnified pursuant to the second preceding paragraph and by the Company in
the case of parties indemnified pursuant to the first preceding paragraph. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but, if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment.
If the indemnification provided for in this Article VII is unavailable
to an indemnified party under the second or third paragraphs hereof or
insufficient in respect of any losses, claims, damages, or liabilities referred
to therein, then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Guarantor on the one hand and the Underwriters on the
other from the offering of the Offered Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Guarantor on the one hand and of the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative benefits received (by the Company and the Guarantor on the one hand and
the Underwriters on the other) in connection with the offering of the Offered
Securities shall be deemed to be in the same proportion as the total net
proceeds from the offering of such Offered Securities received by the Company
(before deducting expenses) bear to the total underwriting discounts and
commissions received by the Underwriters in respect thereof. The relative fault
of the Company and the Guarantor on the one hand and of the Underwriters on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
and
-8-
<PAGE>
the Guarantor or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statements or omission.
The Company, the Guarantor and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Article VII were
determined by pro rata allocation or by any other method of allocation which
does not take account of the considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Article VII, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Offered Securities and Offered Guarantees
underwritten and distributed to the public by such Underwriter exceeds the
amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation within the meaning
of Section 11(f) of the Securities Act shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Article VII are
several, in proportion to the respective principal amounts of Offered Securities
purchased by each of such Underwriters, and not joint.
VIII.
The indemnity and contribution agreements contained in Article VII
hereof and the representations and warranties of the Company and the Guarantor
in this Agreement shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by any
Underwriter or on behalf of any Underwriter or any person controlling any
Underwriter or by or on behalf of the Company, the Guarantor or the directors or
officers or any person controlling the Company or the Guarantor and (iii)
acceptance of any payment for any of the Offered Securities.
IX.
If any Underwriter shall default in its obligation to purchase the
Offered Securities which it has agreed to purchase hereunder, the Underwriters
may in their discretion arrange for themselves or another party or other parties
to purchase such Offered Securities on the terms contained herein. If within
-9-
<PAGE>
thirty-six hours after such default by any Underwriter the Underwriters do not
arrange for the purchase of such Offered Securities, then the Company and the
Guarantor shall be entitled to a further period of thirty-six hours within
which to procure another party or other parties satisfactory to the
Underwriters to purchase such Offered Securities on such terms. In the event
that, within the respective prescribed periods, the Underwriters notify the
Company and the Guarantor that they have so arranged for the purchase of such
Offered Securities, or the Company and the Guarantor notify the Underwriters
that they have so arranged for the purchase of such Offered Securities, the
Underwriters or the Company and the Guarantor shall have the right to postpone
the Closing Date for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or arrangements, and the Company and
the Guarantor agree to file promptly any amendments or supplements to the
Registration Statement or the Prospectus which in the reasonable opinion of the
Manager may thereby be made necessary. The term "Underwriters" as used in this
Agreement shall include any person substituted under this Section IX with like
effect as if such person has originally been a party to this Agreement with
respect to such Offered Securities.
If, after giving effect to any arrangements for the purchase of the
Offered Securities of a defaulting Underwriter or Underwriters as provided in
the immediately preceding paragraph hereof, the aggregate principal amount of
such Offered Securities which remains unpurchased does not exceed one-eleventh
of the aggregate principal amount of all the Offered Securities, then the
Guarantor and the Company shall have the right to require each non-defaulting
Underwriter to purchase the principal amount of Offered Securities which such
Underwriter agreed to purchase hereunder and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the
principal amount of Offered Securities which such Underwriter agreed to purchase
hereunder) of the Offered Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
If, after giving effect to any arrangements for the purchase of the
Offered Securities of a defaulting Underwriter or Underwriters as provided in
the first paragraph of this Section IX, the aggregate principal amount of
Offered Securities which remains unpurchased exceeds one-eleventh of the
aggregate principal amount of all the Offered Securities or if the Guarantor and
the Company shall not exercise the right described in the immediately preceding
paragraph to require non-defaulting Underwriters to purchase Offered Securities
of a defaulting Underwriter or Underwriters, then this Agreement shall thereupon
-10-
<PAGE>
terminate, without liability on the part of any non-defaulting Underwriters or
the Company or the Guarantor, except for the expenses to be borne by the
Company, the Guarantor and the Underwriters as provided in Section X hereof and
the indemnity and contribution agreements in Section VII hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
X.
Each of the Guarantor and the Company covenants and agrees with the
several Underwriters that the Company and the Guarantor will pay or cause to be
paid the following: (i) the fees, disbursements and expenses of the Guarantor's
and the Company's counsel and accountants in connection with the registration of
the Offered Securities and the Offered Guarantees under the Securities Act and
all other expenses in connection with the preparation, printing and filing of
the Registration Statement and the Prospectus and amendments and supplements
thereto and the mailing and delivering of copies thereof to the Underwriters and
to dealers; (ii) the cost of printing this Agreement, the Indenture and any Blue
Sky and legal investment memoranda; (iii) all expenses in connection with the
qualification of the Offered Securities and the Offered Guarantees for offering
and sale under state securities laws as provided in Section VI(d) hereof,
including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky and legal
investment surveys; (iv) any fees charged by securities rating services for
rating the Offered Securities; (v) the cost of preparing the Offered Securities;
(vi) the fees and expenses of the Trustee and any agent of the Trustee and the
fees and disbursements of counsel for the Trustee in connection with the
Indenture, the Offered Securities and the Offered Guarantees; and (vii) all
other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section X.
It is understood, however, that, except as provided in this Section X and
Sections VII and XI hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, transfer taxes on resale of any
of the Offered Securities by them and any advertising expenses connected with
any offers they may make.
XI.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company or the
Guarantor to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company or the Guarantor shall be unable to
perform its obligations under this Agreement, the Company and the
-11-
<PAGE>
Guarantor will reimburse the Underwriters, or such Underwriters as have so
terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with the Offered
Securities.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
-12-
<PAGE>
Schedule I
DELAYED DELIVERY CONTRACT
, 199
Dear Sirs:
The undersigned hereby agrees to purchase from Mellon Financial Company, a
Pennsylvania corporation (the "Company"), and the Company agrees to sell to the
undersigned
$.......................
principal amount of the Company's [state title of issue], which are guaranteed
as to payment of principal, premium, if any, and interest, if any,
by Mellon Bank Corporation (the "Securities"), offered by the Prospectus
dated , 199 and Prospectus Supplement dated , 199 , receipt of
copies of which are hereby acknowledged, at a purchase price of % of the
principal amount thereof plus accrued interest and on the further terms and
conditions set forth in this contract. The undersigned does not contemplate
selling Securities prior to making payment therefor.
The undersigned will purchase from the Company Securities in the
principal amounts and on the delivery dates set forth below:
<TABLE>
<CAPTION>
Delivery Principal Plus Accrued
Date Amount Interest From:
-------- --------- --------------
<S> <C> <C>
.......................... $........ ...............
.......................... $........ ...............
.......................... $........ ...............
</TABLE>
Each such date on which Securities are to be purchased hereunder is hereinafter
referred to as a "Delivery Date."
Payment for the Securities which the undersigned has agreed to purchase
on each Delivery Date shall be made to the Company or its order by certified or
official bank check drawn on a bank approved by the Company and in New York
Clearing House funds at the office of , New York, N.Y., at
10:00 A.M. (New York time) on the Delivery Date, upon delivery
<PAGE>
to the undersigned of the Securities to be purchased by the undersigned
on the Delivery Date, in such denominations and registered in such names as the
undersigned may designate by written or telegraphic communication addressed to
the Company not less than five full business days prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make payment
for the Securities on the Delivery Date shall be subject to the conditions that
(1) the purchase of Securities to be made by the undersigned shall not at the
time of delivery be prohibited under the laws of the jurisdiction to which the
undersigned is subject and (2) the Company shall have sold, and delivery shall
have taken place to the underwriters (the "Underwriters") named in the
Prospectus Supplement referred to above, of such part of the Securities as is to
be sold to them. Promptly after completion of sale and delivery to the
Underwriters, the Company will mail or deliver to the undersigned at its address
set forth below notice to such effect, accompanied by a copy of the opinion of
counsel for the Company delivered to the Underwriters in connection therewith.
Failure to take delivery of and make payment for Securities by any
purchaser under any other Delayed Delivery Contract shall not relieve the
undersigned of its obligations under this contract.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
If this contract is acceptable to the Company, it is requested that the
Company sign the form of acceptance below and mail or deliver one of the
counterparts hereof to the undersigned at its address set forth below. This
will become a binding contract, as of the date first above written, between the
Company and the undersigned when such counterpart is so mailed or delivered.
This contract shall be governed by and construed in accordance with the
laws of the State of New York.
-2-
<PAGE>
Very truly yours,
.........................
(Purchaser)
By.......................
.........................
(Title)
.........................
.........................
(Address)
Accepted:
MELLON FINANCIAL COMPANY
By.........................
PURCHASER--PLEASE COMPLETE AT TIME OF SIGNING
The name, telephone number and department of the representative of the
Purchaser with whom details of delivery on the Delivery Date may be discussed is
as follows: (Please print.)
<TABLE>
<CAPTION>
Telephone No.
Name (Including Area Code) Department
---- --------------------- ----------
<S> <C> <C>
..................................... ..................... ..............
..................................... ..................... ..............
..................................... ..................... ..............
..................................... ..................... ..............
..................................... ..................... ..............
..................................... ..................... ..............
</TABLE>
-3-
<PAGE>
Exhibit A
Opinion of the Counsel of the Guarantor
And Counsel to the Company
---------------------------------------
The opinion of the General Counsel or Assistant General Counsel of the
Guarantor and counsel to the Company to be delivered pursuant to Article V,
paragraph (b) of the document entitled Mellon Financial Company Underwriting
Agreement Standard Provisions (Debt) shall be to the following effect (all terms
used herein which are defined in the Agreement have the meanings set forth
therein):
(i) Each of the Guarantor and the Company has been duly incorporated
and is validly existing as a corporation in good standing under the laws of
the Commonwealth of Pennsylvania, and each has the corporate power and
authority to own its properties and conduct its business as described in the
Prospectus; and each of the Guarantor's principal wholly owned banking
subsidiaries, as described in the prospectus, has been duly established and
is validly existing as a national banking association or a state bank, as the
case may be, under the laws of the jurisdiction of its formation.
(ii) The Guarantor has an authorized equity capitalization as set
forth in the Prospectus and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned by the Guarantor, free and clear of all liens,
encumbrances, equities or claims.
(iii) The Guarantor has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, or is subject to no material
liability or disability by reason of failure to be so qualified in any such
jurisdiction.
(iv) All of the issued and outstanding capital stock of each subsidiary of
the Guarantor has been duly authorized and validly issued, is fully paid and
non-assessable
<PAGE>
(except, in the case of each of its national bank subsidiaries, as
provided in 12 U.S.C. Section 55, as amended), and, except for directors'
qualifying shares, is owned by the Guarantor, free and clear of any mortgage,
pledge, lien, encumbrance, claim or equity.
(v) To the best of such counsel's knowledge there are no legal or
governmental proceedings pending to which the Company, the Guarantor or any
of its subsidiaries is a party or of which any property of the Company, the
Guarantor or any of its subsidiaries is the subject, other than as set forth
in the Prospectus, which, taking into account the likelihood of the outcome,
the damages or other relief sought and other relevant factors, would
individually or in the aggregate have a material adverse effect on the
financial position, shareholders' equity or results of operation of the
Company or the Guarantor and its subsidiaries on a consolidated basis; and to
the best of such counsel's knowledge no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(vi) This Agreement has been duly authorized, executed and delivered
by the Company and by the Guarantor.
(vii) The Offered Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally binding
obligations of the Company entitled to the benefits provided by the
Indenture; and the Offered Securities, the Offered Guarantees and the
Indenture conform to the descriptions thereof in the Prospectus.
(viii) The Offered Guarantees have been duly authorized, endorsed on the
Offered Securities and executed, and, upon due execution, authentication and
delivery of the Offered Securities pursuant to this Agreement, the Offered
Guarantees will have been duly delivered and will constitute valid and
legally binding obligations of the Guarantor entitled to the benefits
provided by the Indenture.
-2-
<PAGE>
(ix) The Indenture has been duly authorized, executed and delivered by
the Guarantor and the Company and constitutes a valid and legally binding
instrument, enforceable against the Company and the Guarantor in accordance
with its terms, subject, as to enforcement, to bankruptcy, moratorium,
insolvency, fraudulent transfer, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; the Indenture has been duly qualified under the Trust
Indenture Act of 1939 (the "Trust Indenture Act"), and all taxes and fees
required to be paid with respect to the execution of the Indenture and the
issuance of the Offered Securities and the Offered Guarantees have been paid.
(x) The issue and sale of the Offered Securities and the compliance
by the Company and the Guarantor with all of the provisions of the Offered
Securities, the Offered Guarantees, the Indenture and this Agreement and the
consummation of the transactions herein contemplated will not conflict with
or result in a breach of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any of the property or assets of the Company, the Guarantor
or any of its subsidiaries pursuant to the terms of, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument known to such
counsel to which the Company, the Guarantor or any of its subsidiaries is a
party or by which the Company, the Guarantor or any of its subsidiaries is
bound or to which any of the property or assets of the Company, the Guarantor
or any of its subsidiaries is subject, nor will such action result in any
violation of the provisions of the Articles of Incorporation, as amended, or
the By-Laws of the Company or of the Guarantor, or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company, the Guarantor or any of its subsidiaries or
any of their properties; and no consent, approval, authorization, order,
registration or qualification of or with any court or any such regulatory
authority or other governmental body is required for the issue and sale of
the Offered Securities, the execution and delivery of the Offered Guarantees
or the consummation of
-3-
<PAGE>
the other transactions contemplated by this Agreement, the Offered
Guarantees or the Indenture, except such as have been obtained under the
Securities Act of 1933 (the "Securities Act") and the Trust Indenture Act and
the exemption of the Company from the provisions of the Investment Company
Act of 1940, as amended, and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the sale and distribution of the Offered
Securities and the Offered Guarantees.
(xi) The documents incorporated by reference in the Prospectus (other
than the financial statements and related schedules therein, as to which such
counsel need express no opinion), when they were filed with the Commission,
complied as to form in all material respects with the requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and the rules and
regulations of the Commission thereunder; and such counsel has no reason to
believe that any of such documents, when they were so filed, contained an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so filed,
not misleading, in each case after excluding any statement in any such
document which does not constitute part of the Registration Statement or the
Prospectus pursuant to Rule 412 of Regulation C under the Securities Act.
(xii) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company or the Guarantor prior
to the Closing Date (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion) comply
as to form in all material respects with the requirements of the Securities
Act and the Trust Indenture Act and the rules and regulations thereunder;
such counsel has no reason to believe that either the Registration Statement,
as of its effective date and as of the Closing Date, or the Prospectus or any
further amendment or supplement thereto made by the Company or the Guarantor
prior to the Closing Date, as of the date of the most recent
-4-
<PAGE>
amendment or supplement thereto and as of the Closing Date, contains an
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and such counsel does not know of any contracts or other
documents of a character required to be filed as exhibits to the Registration
Statement or required to be incorporated by reference into the Prospectus or
required to be described in the Registration Statement or the Prospectus
which are not filed or incorporated by reference or described as required.
(xiii) The Company is exempt from the registration and other provisions of
the Investment Company Act of 1940, as amended.
In rendering such opinion, such counsel may rely as to matters of fact
upon certificates of officers of the Guarantor and its subsidiaries, provided
that such counsel shall state that he believes he is justified in relying upon
such certificates.
-5-
<PAGE>
EXHIBIT B
Pursuant to Article V, paragraph (d) of the Mellon Financial Company
Underwriting Agreement Standard Provisions (Debt) (the "Standard Provisions"),
KPMG Peat Marwick LLP shall furnish letters to the Underwriters to the effect
that:
(i) They are independent certified public accountants
with respect to the Guarantor and its subsidiaries within the meaning
of the Act and the applicable published rules and regulations
thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited by them and
included or incorporated by reference in the Registration Statement or
the Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act or the Exchange Act, as
applicable, and the published rules and regulations thereunder; and,
if applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the consolidated interim financial statements, selected financial
data and/or condensed financial statements derived from audited
financial statements of the Guarantor for the periods specified in
such letter, as indicated in their reports thereon, copies of which
have been furnished to the representatives of the Underwriters (the
"Representatives");
(iii) The unaudited selected financial information with
respect to the consolidated results of operations and financial
position of the Guarantor for the five most recent fiscal years
included in the Prospectus and included or incorporated by reference
in Item 6 of the Guarantor's Annual Report on Form 10-K for the most
recent fiscal year agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial
statements for such fiscal years which were included or incorporated
by reference in the Guarantor's Annual Reports on Form 10-K for such
five fiscal years;
(iv) On the basis of limited procedures, not constituting
an audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited
<PAGE>
financial statements and other information referred to below, a
reading of the latest available interim financial statements of the
Guarantor and its subsidiaries, inspection of the minute books of the
Guarantor and its subsidiaries since the date of the latest audited
financial statements included or incorporated by reference in the
Prospectus, inquiries of officials of the Guarantor and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of changes in financial position
included or incorporated by reference in the Guarantor's
Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Exchange Act as it applies to Form 10-Q and the related
published rules and regulations thereunder or are not in
conformity with generally accepted accounting principles
applied on a basis substantially consistent with the basis for
the audited consolidated statements of income, consolidated
balance sheets and consolidated statements of changes in
financial position included or incorporated by reference in
the Guarantor's Annual Report on Form 10-K for the most recent
fiscal year;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in
the Guarantor's Annual Report on Form 10-K for the most recent
fiscal year;
-2-
<PAGE>
(C) the unaudited financial statements which were
not included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in Clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in Clause (B)
were not determined on a basis substantially consistent with
the basis for the audited financial statements included or
incorporated by reference in the Guarantor's Annual Report on
Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated
condensed financial statements included or incorporated by
reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements
of the Act and the published rules and regulations thereunder
or the pro forma adjustments have not been properly applied
to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five
days prior to the date of delivery of such letter, there have
been any changes in the consolidated capital stock (other than
issuances of capital stock pursuant to employee stock plans,
upon earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest balance sheet included or incorporated
by reference in the Prospectus) or any increase in the
consolidated long-term debt of the Guarantor and its
subsidiaries, or any decreases in the consolidated amount of
shareholders' equity or reserve for credit losses or other
items specified by the Representatives, or any increases in
any items specified by the Representatives, in each case as
compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus,
except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which
are described in such letter; and
- 3 -
<PAGE>
(E) for the period from the date of the latest
complete financial statements included or incorporated by
reference in the Prospectus to the specified date referred to
in Clause (E) there were any decreases in consolidated net
interest revenue, net interest revenue after the provision for
credit losses, net income applicable to common stock or net
income per common share or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with the
comparable period of the preceding year and with any other
period of corresponding length specified by the
Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(v) In addition to the audit referred to in their
report(s) included or incorporated by reference in the Prospectus and
the limited procedures, inspection of minute books, inquiries and
other procedures referred to in subparagraphs (iii) and (iv) above,
they have carried out certain specified procedures, not constituting
an audit in accordance with generally accepted auditing standards,
with respect to certain amounts, percentages and financial information
specified by the Representatives which are derived from the general
accounting records of the Guarantor and its subsidiaries, which appear
in the Prospectus (excluding documents incorporated by reference) or
in Part II of, or in exhibits and schedules to, the Registration
Statement specified by the Representatives or in documents
incorporated by reference in the Prospectus specified by the
Representatives, and have compared certain such amounts, percentages
and financial information with the accounting records of the
Guarantor and its subsidiaries and have found them to be in agreement.
All references in this Exhibit B to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein), as defined in the Standard Provisions as of the date of the letter
delivered on the date of the Underwriting Agreement for purposes of such letter
and to the Prospectus as amended or supplemented (including the
-4-
<PAGE>
documents incorporated by reference therein) in relation to the applicable
Offered Securities and Offered Guarantees for purposes of the letter delivered
at the Time of Delivery for such Offered Securities and Offered Guarantees.
-5-
<PAGE>
EDGAR VERSION ONLY -- EXHIBIT 4.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MELLON FINANCIAL COMPANY,
ISSUER
AND
MELLON BANK CORPORATION,
GUARANTOR
TO
FIRST INTERSTATE BANK OF CALIFORNIA,
TRUSTEE
----------------
INDENTURE
DATED AS OF AUGUST 25, 1995
----------------
PROVIDING FOR ISSUANCE OF SUBORDINATED
DEBT SECURITIES IN SERIES
FROM TIME TO TIME
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
Mellon Financial Company
and
Mellon Bank Corporation
Certain Sections of this Indenture relating to Sections 310 through 318, in-
clusive, of the Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
<S> <C>
(S)310(a)(1)..................................................... 709
(a)(2)..................................................... 709
(a)(3)..................................................... Not Applicable
(a)(4)..................................................... Not Applicable
(b)........................................................ 708
710
(S)311(a)........................................................ 713
(b)........................................................ 713
(b)(2)..................................................... 803(a)
803(b)
(S)312(a)........................................................ 801
802(a)
(b)........................................................ 802(b)
(c)........................................................ 802(c)
(S)313(a)........................................................ 803(a)
(b)........................................................ 803(a)
(c)........................................................ 803(a)
(d)........................................................ 803(b)
(S)314(a)........................................................ 804
(a)(4)..................................................... 101
1104
(b)........................................................ Not Applicable
(c)(1)..................................................... 102
(c)(2)..................................................... 102
(c)(3)..................................................... Not Applicable
(d)........................................................ Not Applicable
(e)........................................................ 102
(S)315(a)........................................................ 701
(b)........................................................ 702
803(a)
(c)........................................................ 701
(d)........................................................ 701
(e)........................................................ 614
(S)316(a)........................................................ 101
(a)(1)(A).................................................. 602
612
(a)(1)(B).................................................. 613
</TABLE>
----------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
<TABLE>
<CAPTION>
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
<S> <C>
(a)(2)..................................................... Not Applicable
(b)........................................................ 608
(c)........................................................ 104(c)
(S)317(a)(1)..................................................... 603
(a)(2)..................................................... 604
(b)........................................................ 1103
(S)318(a)........................................................ 107
</TABLE>
----------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
Parties.................................................................. 1
Recitals of the Company.................................................. 1
Recitals of the Guarantor................................................ 1
ARTICLE ONE
Definitions and Other Provisions of General Application
Section 101. Definitions:
Act....................................................... 2
Affiliate; control........................................ 2
Authenticating Agent...................................... 2
Bank...................................................... 2
Board of Directors........................................ 2
Board Resolution.......................................... 2
Business Day.............................................. 3
Commission................................................ 3
Company................................................... 3
Company Request; Company Order; Guarantor Request;
Guarantor Order......................................... 3
Corporate Trust Office.................................... 3
Corporation............................................... 3
Default................................................... 3
Defaulted Interest........................................ 3
Depositary................................................ 3
Event of Default.......................................... 3
Floating or Adjustable Rate Provision..................... 3
Floating or Adjustable Rate Security...................... 4
Global Security........................................... 4
Guarantee................................................. 4
Guarantor................................................. 4
Holder.................................................... 4
Indenture................................................. 4
Interest.................................................. 4
Interest Payment Date..................................... 4
Maturity.................................................. 4
Officers' Certificate..................................... 5
Opinion of Counsel........................................ 5
Original Issue Discount Security.......................... 5
Outstanding............................................... 5
Paying Agent.............................................. 6
Periodic Offering......................................... 6
Person.................................................... 6
Place of Payment.......................................... 6
</TABLE>
----------
NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
Predecessor Security....................................... 6
Redemption Date............................................ 7
Redemption Price........................................... 7
Regular Record Date........................................ 7
Securities................................................. 7
Security Register; Security Registrar...................... 7
Senior Indebtedness of the Company......................... 7
Senior Indebtedness of the Guarantor....................... 7
Special Record Date........................................ 8
Stated Maturity............................................ 8
Subsidiary................................................. 8
Trustee.................................................... 8
Trust Indenture Act........................................ 8
Vice President............................................. 8
Voting Stock of the Company................................ 8
Section 102. Compliance Certificates and Opinions....................... 8
Section 103. Form of Documents Delivered to Trustee..................... 9
Section 104. Acts of Holders; Record Dates.............................. 10
Section 105. Notices, Etc., to Trustee, Company and Guarantor........... 11
Section 106. Notice to Holders; Waiver.................................. 11
Section 107. Conflict with Trust Indenture Act.......................... 12
Section 108. Effect of Headings and Table of Contents................... 12
Section 109. Successors and Assigns..................................... 12
Section 110. Separability Clause........................................ 12
Section 111. Benefits of Indenture...................................... 12
Section 112. Governing Law.............................................. 12
Section 113. Legal Holidays............................................. 13
ARTICLE TWO
Forms of Securities and Guarantees
Section 201. Forms Generally............................................ 13
Section 202. Form of Face of Security................................... 14
Section 203. Form of Reverse of Security................................ 16
Section 204. Additional Provisions Required in Global Security.......... 21
Section 205. Form of Certificate of Authentication...................... 22
Section 206. Form of Guarantee.......................................... 22
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series....................... 24
Section 302. Denominations.............................................. 27
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
Section 303. Execution, Authentication, Delivery and Dating............ 27
Section 304. Temporary Securities...................................... 30
Section 305. Registration, Registration of Transfer and Exchange....... 31
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.......... 33
Section 307. Payment of Interest; Interest Rights Preserved............ 34
Section 308. Persons Deemed Owners..................................... 35
Section 309. Cancellation.............................................. 35
Section 310. Computation of Interest................................... 36
ARTICLE FOUR
Guarantee of Securities
Section 401. Unconditional Guarantee................................... 36
Section 402. Execution of Guarantees................................... 37
ARTICLE FIVE
Satisfaction and Discharge
Section 501. Satisfaction and Discharge of Indenture................... 38
Section 502. Application of Trust Money................................ 39
ARTICLE SIX
Remedies
Section 601. Events of Default......................................... 39
Section 602. Acceleration of Maturity; Rescission and Annulment........ 40
Section 603. Collection of Indebtedness and Suits for Enforcement by
Trustee................................................. 42
Section 604. Trustee May File Proofs of Claim.......................... 43
Section 605. Trustee May Enforce Claims Without Possession of
Securities.............................................. 44
Section 606. Application of Money Collected............................ 44
Section 607. Limitation on Suits....................................... 44
Section 608. Unconditional Right of Holders to Receive Principal,
Premium and Interest.................................... 45
Section 609. Restoration of Rights and Remedies........................ 45
Section 610. Rights and Remedies Cumulative............................ 46
Section 611. Delay or Omission Not Waiver.............................. 46
Section 612. Control by Holders........................................ 46
Section 613. Waiver of Past Defaults................................... 47
Section 614. Undertaking for Costs..................................... 48
Section 615. Waiver of Stay or Extension Laws.......................... 48
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
ARTICLE SEVEN
The Trustee
Section 701. Certain Duties and Responsibilities....................... 48
Section 702. Notice of Defaults........................................ 48
Section 703. Certain Rights of Trustee................................. 49
Section 704. Not Responsible for Recitals or Issuance of Securities and
Guarantees.............................................. 50
Section 705. May Hold Securities....................................... 50
Section 706. Money Held in Trust....................................... 50
Section 707. Compensation and Reimbursement............................ 51
Section 708. Disqualification; Conflicting Interests................... 51
Section 709. Corporate Trustee Required; Eligibility................... 51
Section 710. Resignation and Removal; Appointment of Successor......... 52
Section 711. Acceptance of Appointment by Successor.................... 53
Section 712. Merger, Conversion, Consolidation or Succession to
Business................................................ 55
Section 713. Preferential Collection of Claims Against Company and
Guarantor............................................... 55
Section 714. Appointment of Authenticating Agent....................... 55
ARTICLE EIGHT
Holders' Lists and Reports by Trustee, Company and Guarantor
Section 801. Company and Guarantor to Furnish Trustee Names and
Addresses of Holders.................................... 57
Section 802. Preservation of Information; Communications to Holders.... 57
Section 803. Reports by Trustee........................................ 58
Section 804. Reports by Company and Guarantor.......................... 58
ARTICLE NINE
Consolidation, Merger and Sale
Section 901. Company May Consolidate, Etc., Only on Certain Terms...... 58
Section 902. Successor Corporation Substituted for Company............. 59
Section 903. Guarantor May Consolidate, Etc., Only on Certain Terms.... 59
Section 904. Successor Corporations Substituted for Guarantor.......... 60
Section 905. Assumption by Guarantor................................... 61
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
ARTICLE TEN
Supplemental Indentures
Section 1001. Supplemental Indentures Without Consent of Holders........ 61
Section 1002. Supplemental Indentures With Consent of Holders........... 62
Section 1003. Execution of Supplemental Indentures...................... 63
Section 1004. Effect of Supplemental Indentures......................... 63
Section 1005. Conformity with Trust Indenture Act....................... 63
Section 1006. Reference in Securities to Supplemental Indentures........ 65
ARTICLE ELEVEN
Covenants
Section 1101. Payment of Principal, Premium and Interest................ 65
Section 1102. Maintenance of Office or Agency........................... 65
Section 1103. Money for Security Payments to Be Held in Trust........... 66
Section 1104. Corporate Existence....................................... 67
Section 1105. Company Statement as to Compliance........................ 68
Section 1106. Guarantor Statement as to Compliance...................... 68
Section 1107. Limitation Upon Disposition of Voting Stock of Company.... 69
Section 1108. Waiver of Certain Covenants............................... 69
ARTICLE TWELVE
Redemption of Securities
Section 1201. Applicability of Article.................................. 69
Section 1202. Election to Redeem; Notice to Trustee..................... 70
Section 1203. Selection by Security Registrar of Securities to Be
Redeemed................................................ 70
Section 1204. Notice of Redemption...................................... 70
Section 1205. Deposit of Redemption Price............................... 71
Section 1206. Securities Payable on Redemption Date..................... 71
Section 1207. Securities Redeemed in Part............................... 72
ARTICLE THIRTEEN
Sinking Funds
Section 1301. Applicability of Article.................................. 72
Section 1302. Satisfaction of Sinking Fund Payments with Securities..... 73
Section 1303. Redemption of Securities for Sinking Fund................. 73
</TABLE>
v
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
ARTICLE FOURTEEN
Subordination of Securities and Guarantees
Section 1401. Securities Subordinate to Senior Indebtedness of the
Company.................................................. 76
Section 1402. Guarantees Subordinate to Senior Indebtedness of the
Guarantor................................................ 78
Section 1403. Trustee and Holders of Securities May Rely on Certificate
of Liquidating Agent; Trustee May Require Further
Evidence as to Ownership of Senior Indebtedness; Trustee
Not Fiduciary to Holders of Senior Indebtedness.......... 81
Section 1404. Payment Permitted If No Default............................ 82
Section 1405. Trustee Not Charged with Knowledge of Prohibition.......... 82
Section 1406. Trustee to Effectuate Subordination........................ 83
Section 1407. Rights of Trustee as Holder of Senior Indebtedness of the
Company or Senior Indebtedness of the Guarantor.......... 83
Section 1408. Article Applicable to Paying Agents........................ 83
Testimonium............................................................... 84
Signatures and Seals...................................................... 85
Acknowledgments........................................................... 85
</TABLE>
vi
<PAGE>
INDENTURE, dated as of August 25, 1995, among Mellon Financial Company, a
corporation duly organized and existing under the laws of the Commonwealth of
Pennsylvania having its principal executive office at 500 Grant Street, Pitts-
burgh, Pennsylvania 15258 (herein called the "Company"), Mellon Bank Corpora-
tion, a corporation duly organized and existing under the laws of the Common-
wealth of Pennsylvania having its principal executive office at 500 Grant
Street, Pittsburgh, Pennsylvania 15258 (herein called the "Guarantor"), and
First Interstate Bank of California, a state banking association duly orga-
nized and existing under the laws of the State of California having its prin-
cipal executive office at 707 Wilshire Boulevard, W11-1, Los Angeles, Califor-
nia 90017, as Trustee (herein called the "Trustee").
Recitals of the Company
The Company deems it necessary to issue its unsecured debentures, notes or
other evidences of indebtedness (herein called the "Securities") from time to
time for its lawful purposes and has duly authorized the execution and deliv-
ery of this Indenture to provide for the issuance of such Securities in one or
more series and at such time or times as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the Compa-
ny, in accordance with its terms, have been done.
Recitals of the Guarantor
The Guarantor has duly authorized the Guarantees provided for herein, and to
provide therefor the Guarantor has duly authorized the execution and delivery
of this Indenture.
All things necessary to make the Guarantees, when endorsed on the Securities
to which they relate and executed by the Guarantor, the valid obligations of
the Guarantor, and to make this Indenture a valid agreement of the Guarantor,
in accordance with their and its terms, have been done.
Now, Therefore, This Indenture Witnesseth:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal
and proportionate benefit of all Holders of the Securities or of series there-
of, as follows:
1
<PAGE>
ARTICLE ONE
Definitions and Other Provisions of General Application
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned
to them therein; and
(3) the words "herein", "hereof" and "hereunder" and other words of sim-
ilar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" of any specified Person means any other Person directly or indi-
rectly controlling or controlled by or under direct or indirect common control
with such specified Person. For the purposes of this definition, "control"
when used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the forego-
ing.
"Authenticating Agent" means any authenticating agent appointed by the
Trustee pursuant to Section 714 to act on behalf of the Trustee to authenti-
cate Securities of one or more series.
"Bank" means Mellon Bank, N.A., and any successor or successors thereto.
"Board of Directors" means the board of directors of the Company or of the
Guarantor, as the case may be, or any duly authorized committee of such board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company or the Guarantor, as the case may be,
2
101
<PAGE>
to have been duly adopted by its Board of Directors and to be in full force
and effect on the date of such certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are generally authorized or ob-
ligated by law or executive order to close.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or, if at
any time after the execution of this instrument such Commission is not exist-
ing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor Person.
"Company Request", "Company Order", "Guarantor Request" and "Guarantor Or-
der" mean, respectively, a written request or order signed in the name of the
Company or the Guarantor by the Chairman of the Board, a Vice Chairman, the
President or a Vice President, and by its Treasurer, an Assistant Treasurer,
its Secretary or an Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee, Security
Registrar, Paying Agent or Authenticating Agent, as the case may be, at which
at any particular time its corporate trust business shall be administered; at
the date hereof the Corporate Trust Office of the Trustee is located at 707
Wilshire Boulevard, W11-1, Los Angeles, California 90017, Attention: Corporate
Trust Department.
"corporation" means a corporation, association, company or business trust.
"Default" has the meaning specified in Section 603.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to the Securities of any series issuable or
issued in whole or in part in the form of one or more Global Securities, the
Person designated as Depositary for such series by the Company pursuant to
Section 301.
"Event of Default" has the meaning specified in Section 601.
"Floating or Adjustable Rate Provision" means a formula or provision, speci-
fied in a Board Resolution of the Company or an indenture supplemental
3
101
<PAGE>
hereto, providing for the determination, whether pursuant to objective factors
or pursuant to the sole discretion of any Person (including the Company, the
Guarantor or the Bank), and periodic adjustment of the interest rate per annum
borne by a Floating Rate Security.
"Floating or Adjustable Rate Security" means any Security which provides for
interest to be payable thereon at a rate per annum that may vary from time to
time over the term thereof in accordance with a Floating or Adjustable Rate
Provision.
"Global Security" means a Security bearing the legend specified in Section
204 evidencing all or part of a series of Securities, issued to the Depositary
for such series or its nominee, and registered in the name of such Depositary
or nominee.
"Guarantee" means the Guarantor's unconditional guarantee of the payment of
the Securities as more fully described in Article Four.
"Guarantor" means the Person named as the "Guarantor" in the first paragraph
of this instrument until a successor corporation shall have become such pursu-
ant to the applicable provisions of this Indenture, and thereafter "Guarantor"
shall mean such successor corporation.
"Holder" means a Person in whose name a Security is registered in the Secu-
rity Register.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including,
for all purposes of this instrument, and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and gov-
ern this instrument and any such supplemental indenture, respectively. The
term "Indenture" shall also include the terms of particular series of Securi-
ties established as contemplated by Section 301.
"interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an instalment of interest on such Security.
"Maturity", when used with respect to any Security, means the date on which
the principal of such Security or an instalment of principal becomes due
4
101
<PAGE>
and payable as therein or herein provided, whether at the Stated Maturity or
by declaration of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman, the President or a Vice President, and by the Treasur-
er, an Assistant Treasurer, the Secretary or an Assistant Secretary, of the
Company or the Guarantor, as the case may be, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an em-
ployee of or counsel for the Company or the Guarantor, or who may be other
counsel, acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 602.
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(i) Securities theretofore cancelled by the Trustee, or any Authenticat-
ing Agent, or delivered to the Trustee, or any Authenticating Agent, for
cancellation;
(ii) Securities or portions thereof for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set aside
and segregated in trust by the Company (if the Company shall act as its
own Paying Agent) for the Holders of such Securities; provided that, if
such Securities or portions thereof are to be redeemed, notice of such re-
demption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 306 or in ex-
change for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities
in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (i) the princi-
pal amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
5
101
<PAGE>
thereof pursuant to Section 602, (ii) the principal amount of a security de-
nominated in a foreign currency or currencies shall be the U.S. dollar equiva-
lent, determined on the date of original issuance of such Security, of the
principal amount (or, in the case of an Original Issue Discount Security, the
U.S. dollar equivalent on the date of original issuance of such Security of
the amount determined as provided in (i) above) of such Security, and (iii)
Securities owned by the Company, the Guarantor or any other obligor upon the
Securities or any Affiliate of the Company or of the Guarantor or of such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent or waiver,
only Securities which the Trustee knows to be so owned shall be so disregard-
ed. Securities so owned which have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction of the Trustee
the pledgee's right so to act with respect to such Securities and that the
pledgee is not the Company, the Guarantor or any other obligor upon the Secu-
rities or any Affiliate of the Company or the Guarantor or of such other obli-
gor.
"Paying Agent" means any Person authorized by the Company to pay the princi-
pal of (and premium, if any) or interest on any Securities on behalf of the
Company.
"Periodic Offering" means an offering of Securities of a series from time to
time the specific terms of which Securities including without limitation the
rate or rates of interest, if any, thereon, the Stated Maturity or Maturities
thereof, and the redemption provisions, if any, with respect thereto, are to
be determined by the Company or its agents upon the issuance of such Securi-
ties.
"Person" means any individual, corporation, partnership, joint venture, as-
sociation, joint-stock company, trust, unincorporated organization or govern-
ment or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities of any series,
means the place or places where the principal of (and premium, if any) and in-
terest on, or, if so specified, the principal (and premium, if any) only of,
the Securities of that series are payable as specified as contemplated by Sec-
tion 301, or, if not so specified, as specified in Section 1102.
"Predecessor Security" of any particular Security means every previous Secu-
rity evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
6
101
<PAGE>
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Securities of any series means the date specified for that purpose as
contemplated by Section 301.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Senior Indebtedness of the Company" means any obligation of the Company to
its creditors, whether now outstanding or subsequently incurred, except (i)
the 9 3/4% Subordinated Debentures Due 2001, the 9 1/4% Subordinated Deben-
tures Due 2001 and the 6 7/8% Subordinated Debentures due March 1, 2003, each
issued under the indenture, dated as of April 15, 1991, among the Guarantor,
the Company and Continental Bank, National Association, as trustee, and all
other notes and obligations that may be issued under such indenture, as the
same may be amended from time to time, (ii) any obligation as to which in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is provided that such obligation is not Senior Indebtedness;
and (iii) obligations evidenced by the Securities.
"Senior Indebtedness of the Guarantor" means any obligation of the Guarantor
to its creditors, whether now outstanding or subsequently incurred, except (i)
the 7 1/4% Convertible Subordinated Capital Notes due 1999 issued under the
indenture, dated as of September 10, 1987, between the Guarantor and The Bank
of New York, as trustee; (ii) the guarantee of the Guarantor of the 9 3/4%
Subordinated Debentures Due 2001, the 9 1/4% Subordinated Debentures Due 2001
and the 6 7/8% Subordinated Debentures due March 1, 2003, each issued under
the indenture, dated as of April 15, 1991, among the Guarantor, the Company
and Continental Bank, National Association, as trustee, and all guarantees of
the Guarantor of any other notes or obligations which may be issued under such
indenture, as the same may be amended from time to time; (iii) any obligation
as to which, in the instrument creating or evidencing the same or pursuant to
which the same is outstanding, it is provided that such obligation is not Se-
nior Indebtedness; and (iv) obligations evidenced by the Guarantees.
7
101
<PAGE>
"Special Record Date" for the payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any instalment
of principal thereof or interest thereon, means the date specified in such Se-
curity as the fixed date on which the principal of such Security or such in-
stalment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or the Guaran-
tor, as the case may be, or by one or more other of its Subsidiaries, or by
the Company or the Guarantor, as the case may be, and one or more other of its
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at
all times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall
mean or include each Person who is then a Trustee hereunder, and if at any
time there is more than one such Person, "Trustee" as used with respect to the
Securities of any series shall mean the Trustee with respect to Securities of
that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Vice President", when used with respect to the Company, the Guarantor or
the Trustee, means any vice president, whether or not designated by a number
or a word or words added before or after the title "vice president".
"Voting Stock of the Company" means stock of any class or classes, however
designated, having ordinary voting power for the election of a majority of the
Board of Directors of the Company, other than stock having such power only by
reason of the happening of any contingency.
Section 102. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Indenture, upon any applica-
tion or request by the Company or the Guarantor to the Trustee to take any ac-
tion under any provision of this Indenture, the Company or the Guarantor, as
the case may be, shall furnish to the Trustee such certificates and opinions
as may
8
101,102
<PAGE>
be required under the Trust Indenture Act. Each such certificate or opinion
shall be given in the form of an Officers' Certificate, if to be given by an
officer of the Company or the Guarantor, or an Opinion of Counsel, if to be
given by counsel, and shall comply with the requirements of the Trust Inden-
ture Act and any other requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such cer-
tificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condi-
tion has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or cov-
ered by an opinion of, any specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of, only one such Person,
or that they be so certified or covered by only one document, but one such
Person may certify or give an opinion with respect to some matters and one or
more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company or the Guarantor may
be based, insofar as it relates to legal matters, upon a certificate or opin-
ion of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company or
the Guarantor, as the case may be, stating that the information with respect
to such factual matters is in the possession of the Company or the Guarantor,
as the case may be, unless such counsel knows, or in the exercise of reason-
able care should know, that the certificate or opinion or representations with
respect to such matters are erroneous.
9
102,103
<PAGE>
Where any Person is required to make, give or execute two or more applica-
tions, requests, consents, certificates, statements, opinions or other instru-
ments under this Indenture, they may, but need not, be consolidated and form
one instrument.
Section 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially simi-
lar tenor signed by such Holders in person or by an agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company and the
Guarantor. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Hold-
ers signing such instrument or instruments. Proof of execution of any such in-
strument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 701) conclusive in favor of
the Trustee and the Company and the Guarantor, if made in the manner provided
in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by
a certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instru-
ment or writing acknowledged to him the execution thereof. Where such execu-
tion is by a signer acting in a capacity other than his individual capacity,
such certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writ-
ing, or the authority of the Person executing the same, may also be proved in
any other manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust Indenture
Act, fix any day as the record date for the purpose of determining the Holders
of Securities of any series entitled to give or take any request, demand, au-
thorization, direction, notice, consent, waiver or other action, or to vote on
any action, authorized or permitted to be given or taken by Holders of Securi-
ties of such series. If not set by the Company prior to the first solicitation
of a Holder of Securities of such series made by any Person in respect of any
such action, or, in the case of any such vote, prior to such vote, the record
date for any such action or vote shall be the 30th day (or, if later, the date
of the most recent list of Holders required to be provided pursuant to Section
801) prior to such first solicitation or vote, as the case may be. With regard
to any record date for action
10
103,104
<PAGE>
to be taken by the Holders of one or more series of Securities, only the Hold-
ers of Securities of such series on such date (or their duly designated prox-
ies) shall be entitled to give or take, or vote on, the relevant action.
(d) The ownership of Securities shall be proved by the Security Register.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of
the same Security and the Holder of every Security issued upon the registra-
tion of transfer thereof or in exchange therefor or in lieu thereof in respect
of anything done, omitted or suffered to be done by the Trustee, any Paying
Agent, any Security Registrar, any Authenticating Agent, the Company or the
Guarantor in reliance thereon, whether or not notation of such action is made
upon such Security.
Section 105. Notices, Etc., to Trustee, Company and Guarantor.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company or the Guarantor shall
be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office, At-
tention: Corporate Trust Department, or
(2) the Company or the Guarantor by the Trustee or by any Holder shall
be sufficient for every purpose hereunder (unless otherwise herein ex-
pressly provided) if in writing and mailed, first-class postage prepaid,
to the Company or the Guarantor, as the case may be, addressed to the at-
tention of its Secretary at the address of its principal office specified
in the first paragraph of this instrument or at any other address previ-
ously furnished in writing to the Trustee by the Company or the Guarantor.
Section 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such no-
tice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not
later than the latest date (if any), and not earlier than the earliest date
(if any), prescribed for the giving of such notice. In any case where notice
to Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the suf-
ficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice,
11
104,105,106
<PAGE>
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall con-
stitute a sufficient notification for every purpose hereunder.
Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.
Section 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company and the Guar-
antor shall bind their respective successors and assigns, whether so expressed
or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be inval-
id, illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors hereun-
der, any Paying Agent, any Security Registrar, any Authenticating Agent, the
holders of Senior Indebtedness of the Company and the Guarantor and the Hold-
ers, any benefit or any legal or equitable right, remedy or claim under this
Indenture.
Section 112. Governing Law.
This Indenture, the Securities and the Guarantees shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania, ex-
cept that the rights, immunities, duties and liabilities of the Trustee as a
trustee and any rights and immunities limiting such liability shall be gov-
erned by the laws of the State of California.
12
106,107,108,109,110,111,112
<PAGE>
Section 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated Matu-
rity of any Security shall not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of the Securities of any series which specifically
states that such provision shall apply in lieu of this Section) ) payment of
interest or principal (and premium, if any) need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Inter-
est Payment Date or Redemption Date, or at the Stated Maturity, provided that
no interest shall accrue for the period from and after such Interest Payment
Date, Redemption Date or Stated Maturity, as the case may be.
ARTICLE TWO
Forms of Securities and Guarantees
Section 201. Forms Generally.
The Securities of each series and the Guarantees relating thereto shall be
in substantially the form set forth in this Article, or in such other form as
shall be established by or pursuant to a Board Resolution of the Company, in
the case of Securities, and of the Guarantor, in the case of Guarantees, or in
one or more indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may, con-
sistently herewith, be determined by the officers executing such Securities or
Guarantees, as evidenced by their execution thereof. If the form of Securities
of any series or the Guarantees relating thereto is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company or the Guarantor, as the case may be, and delivered to the Trustee at
or prior to the delivery of the Company Order contemplated by Section 303 for
the authentication and delivery of the Securities of such series initially de-
livered by the Company to the Trustee.
The Trustee's certificates of authentication shall be in substantially the
form set forth in this Article.
The definitive Securities of any series shall be printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner permitted by the rules of any
13
113,201
<PAGE>
securities exchange on which such Securities may be listed, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.
Section 202. Form of Face of Security.
[If the Security is an Original Issue Discount Security, insert--For pur-
poses of Section 1232 of the United States Internal Revenue Code of 1954, as
amended, the issue price of this Security is. . . .% of its principal amount
and the issue date is. . . . . . . . . ., 19. . . .]
MELLON FINANCIAL COMPANY
No. $
Mellon Financial Company, a corporation duly organized and existing under
the laws of the Commonwealth of Pennsylvania (herein called the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to , or registered
assigns, the principal sum of Dollars on .
[If the Security is to bear interest prior to Maturity, insert--, and to pay
interest thereon from or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semi-annually on and
in each year, commencing , at [If the Security is to bear interest at a
fixed rate, insert-- the rate of % per annum,] [If the Security is a Floating
or Adjustable Rate Security insert-- a rate per annum [computed--determined]
in accordance with the [insert defined name of Floating or Adjustable Rate
Provision] set forth below], until the principal hereof is paid or made avail-
able for payment [If applicable insert--, and (to the extent that the payment
of such interest shall be legally enforceable) at the rate of....% per annum on
any overdue principal and premium and on any overdue instalment of interest].
The interest so payable, and punctually paid or duly provided for, on any In-
terest Payment Date will, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is regis-
tered at the close of business on the Regular Record Date for such interest,
which shall be the or (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date. Any such interest not so punc-
tually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in
whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on a Special Record Date for the payment of such De-
faulted Interest to be fixed by
14
201,202
<PAGE>
the Trustee, notice whereof shall be given to Holders of Securities of this se-
ries not less than 10 days prior to such Special Record Date, or be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully pro-
vided in said Indenture.
[At this point in the Form of Security of any series of Floating or Adjust-
able Rate Securities, the text of the Floating or Adjustable Rate Provision re-
lating thereto should be inserted.]]
[If the Security is not to bear interest prior to Maturity, insert--The prin-
cipal of this Security shall not bear interest except in the case of a default
in payment of principal upon acceleration, upon redemption or at Stated Matu-
rity and in such case the overdue principal of this Security shall bear inter-
est at the rate of % per annum (to the extent that the payment of such inter-
est shall be legally enforceable), which shall accrue from the date of such de-
fault in payment to the date payment of such principal has been made or duly
provided for. Interest on any overdue principal shall be payable on demand. Any
such interest on any overdue principal that is not so paid on demand shall bear
interest at the rate of % per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of
such demand for payment to the date payment of such interest has been made or
duly provided for, and such interest shall also be payable on demand.]
Payment of the principal of (and premium, if any) and [if applicable, in-
sert--any such] interest on this Security will be made at the office or agency
of the Company maintained for that purpose in [insert at least one Place of
Payment] [if applicable, insert-- and [if applicable, insert--, with respect to
principal (and premium, if any) only,] at the office or agency of the Company
maintained for that purpose in [insert one or more additional Places of Pay-
ment]], in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts; provided,
however, that at the option of the Company payment of interest may be made by
check mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register.
Reference is hereby made to the further provisions of this Security set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
15
202
<PAGE>
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof, or an Authenticating Agent, by man-
ual signature, neither this Security nor the Guarantee endorsed hereon shall
be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.
In Witness Whereof, the Company has caused this instrument to be duly exe-
cuted under its corporate seal.
Dated: MELLON FINANCIAL COMPANY
By.....................................
[Authorized Signature]
Attest:
.......................................
[Authorized Signature]
Section 203. Form of Reverse of Security.
This Security is one of a duly authorized series of Securities of the Com-
pany (herein called the "Securities"), of the series hereinafter specified,
issued and to be issued under an Indenture, dated as of August 25, 1995
(herein called the "Indenture"), among the Company, the Guarantor and First
Interstate Bank of California, as Trustee (herein called the "Trustee", which
term includes any successor trustee under the Indenture), to which Indenture
and all indentures supplemental thereto reference is hereby made for a state-
ment of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Guarantor, the Trustee, the holders of Senior
Indebtedness of the Company and the Guarantor and the Holders of the Securi-
ties and of the terms upon which the Securities are, and are to be, authenti-
cated and delivered. The Securities may be issued in different series, as in
the Indenture provided. This Security is one of the series designated on the
face hereof, issued under and entitled to the benefits of the Indenture [and
limited (except as otherwise provided in the Indenture) to an aggregate prin-
cipal amount of $ ].
[If applicable, insert--The Securities of this series are redeemable at the
option of the Company, upon not less than 30 days nor more than 60 days notice
by mail, [if applicable, insert--(1) on in any year commencing with the
year and ending with the year through operation of the sinking fund
for this series at a Redemption Price equal to 100% of the principal amount,
16
202,203
<PAGE>
and (2)] at any time [on or after , 19 ,] as a whole or from time to time in
part, at the following Redemption Prices (expressed as percentages of the prin-
cipal amount): If redeemed [on or before , %, and if redeemed] during the
12-month period beginning of the years indicated,
<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE YEAR REDEMPTION PRICE
---- ---------------- ---- ----------------
<S> <C> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to % of the principal amount, to-
gether in the case of any such redemption [if applicable, insert--(whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest instalments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securi-
ties, or one or more Predecessor Securities, of record at the close of business
on the relevant Record Dates referred to on the face hereof, all as provided in
the Indenture.]
[If applicable, insert--The Securities of this series are redeemable at the
option of the Company upon not less than 30 days nor more than 60 days notice
by mail, (1) on in any year commencing with the year.....and ending with the
year through operation of the sinking fund for this series at the Redemp-
tion Prices for redemption through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below, and (2) at
any time [on or after ], as a whole or in part, at the election of the
17
203
<PAGE>
Company, at the Redemption Prices for redemption otherwise than through opera-
tion of the sinking fund (expressed as percentages of the principal amount) set
forth in the table below: If redeemed during the 12-month period beginning
of the years indicated,
<TABLE>
<CAPTION>
REDEMPTION PRICE REDEMPTION PRICE FOR
FOR REDEMPTION REDEMPTION OTHERWISE
THROUGH OPERATION THAN THROUGH
OF THE OPERATION OF THE
YEAR SINKING FUND SINKING FUND
---- ----------------- --------------------
<S> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to % of the principal amount, to-
gether in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest instalments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more Prede-
cessor Securities, of record at the close of business on the relevant Record
Dates referred to on the face hereof, all as provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to , redeem any
Securities of this series as contemplated by [Clause (2) of] the preceding par-
agraph as a part of, or in anticipation of, any refunding operation by the ap-
plication, directly or indirectly, of moneys borrowed having an interest cost
to the Company (calculated in accordance with generally accepted financial
practice) of less than % per annum.]
[The sinking fund for this series provides for the redemption on in each
year beginning with the year and ending with the year of [not less
than] $ [("mandatory sinking fund") and not more than $ ] aggregate prin-
cipal amount of Securities of this series. [Securities of this series acquired
or redeemed by the Company otherwise than
18
203
<PAGE>
through [mandatory] sinking fund payments may be credited against subsequent
[mandatory] sinking fund payments otherwise required to be made--in the inverse
order in which they become due.]
In the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof or any transferee designated by
such Holder upon the cancellation hereof.
[If the Security is not an Original Issue Discount Security,--If an Event of
Default with respect to Securities of this series shall occur and be continu-
ing, the principal of the Securities of this series may be declared due and
payable in the manner and with the effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security,--If an Event of De-
fault with respect to Securities of this series shall occur and be continuing,
an amount of principal of the Securities of this series may be declared due and
payable in the manner and with the effect provided in the Indenture. Such
amount shall be equal to--insert formula for determining the amount. Upon pay-
ment (i) of the amount of principal so declared due and payable and (ii) of in-
terest on any overdue principal and overdue interest (in each case to the ex-
tent that the payment of such interest shall be legally enforceable), all of
the Company's obligations in respect of the payment of the principal of and in-
terest, if any, on the Securities of this series shall terminate.]
The indebtedness evidenced by this Security is, to the extent provided in the
Indenture, subordinate and subject in right of payment to the prior payment in
full of all Senior Indebtedness of the Company, and this Security is issued
subject to the provisions of the Indenture with respect thereto. Each Holder of
this Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes.
The Indenture permits, with certain exceptions as therein provided, the amend-
ment thereof and the modification of the rights and obligations of the Company
and the Guarantor and the rights of the Holders of the Securities of each se-
ries to be affected under the Indenture at any time by the Company, the Guaran-
tor and the Trustee with the consent of the Holders of not less than 66 2/3% in
aggregate principal amount of the Securities at the time Outstanding of each
19
203
<PAGE>
series to be affected. The Indenture also contains provisions permitting the
Holders of specified percentages in aggregate principal amount of the Securi-
ties of each series at the time Outstanding, on behalf of the Holders of all
Securities of such series, to waive compliance by the Company or the Guarantor
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all fu-
ture Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not no-
tation of such consent or waiver is made upon this Security.
The Guarantor, or a Subsidiary thereof, may directly assume, by a supplemen-
tal indenture, the due and punctual payment of the principal of (and premium,
if any) and interest on all the Securities, in which case the Company shall be
released from its liability as obligor on the Securities.
No reference herein to the Indenture and no provision of this Security or of
the Indenture shall alter or impair the obligation of the Company, which is ab-
solute and unconditional, to pay the principal of (and premium, if any) and in-
terest on this Security at the times, places and [rate--rates], and in the coin
or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at [the--each] of-
fice or agency of the Company, in [the--each] place referred to on the face
hereof, where the principal of (and premium, if any) and interest on [if appli-
cable, insert--, or the principal (and premium, if any) only of,] this Security
are payable, duly endorsed by, or accompanied by a written instrument of trans-
fer in form satisfactory to the Company and the Security Registrar duly exe-
cuted by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities of this series and of like tenor, of au-
thorized denominations and for the same aggregate principal amount, will be is-
sued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of $ and any integral multiple thereof. As provided
in the Indenture and subject to certain limitations therein set forth, Securi-
ties of this series are exchangeable for a like aggregate principal amount of
Securities of this series and of like tenor and of a different authorized de-
nomination, as requested by the Holder surrendering the same.
20
203
<PAGE>
No service charge shall be made for any such registration of transfer or ex-
change, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Guarantor and the Trustee and any agent of the Company, the Guar-
antor or the Trustee may treat the Person in whose name this Security is regis-
tered as the owner hereof for all purposes, whether or not this Security be
overdue, and neither the Company, the Guarantor, the Trustee nor any such agent
shall be affected by notice to the contrary.
All terms used in this Security undefined herein which are defined in the In-
denture shall have the meanings assigned to them in the Indenture.
Section 204. Additional Provisions Required in Global Security.
Any Global Security issued hereunder shall, in addition to the provisions
contained in Sections 202 and 203, bear a legend in substantially the following
form:
"UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES OF THIS
SERIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DE-
POSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH DE-
POSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF SUCH A TRANSFERROR TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
SUCH A TRANSFEREE OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTA-
TIVE OF SUCH A TRANSFERROR AND ANY PAYMENT IS MADE TO SUCH A TRANSFEREE, ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, SUCH A TRANSFERROR, HAS AN IN-
TEREST HEREIN."
21
203,204
<PAGE>
Section 205. Form of Certificate of Authentication.
The certificates of authentication shall be in substantially the following
form:
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
FIRST INTERSTATE BANK FIRST INTERSTATE BANK
OF CALIFORNIA, as Trustee OF CALIFORNIA, as Trustee
By ..............................
Authorized Signatory
Section 206. Form of Guarantee.
The form of Guarantee to be endorsed on all Securities shall be substantially
as follows:
Guarantee Of Mellon Bank Corporation
For value received, Mellon Bank Corporation, a corporation duly organized and
existing under the laws of the Commonwealth of Pennsylvania (herein called the
"Guarantor"), hereby unconditionally guarantees to the Holder of the Security
upon which this Guarantee is endorsed the due and punctual payment of the prin-
cipal of (and premium, if any) and interest on [if the Security upon which the
Guarantee is endorsed is not to bear interest prior to Maturity, insert--any
overdue principal of] said Security [if applicable, insert--and the due and
punctual payment of the sinking fund payments required with respect to said Se-
curity,] when and as the same shall become due and payable, whether at maturi-
ty, by acceleration or redemption or otherwise, according to the terms thereof
and of the Indenture referred to therein. In case of the failure of Mellon Fi-
nancial Company or any successor thereto (the "Company") punctually to pay any
such principal, premium [, --or] interest [or sinking fund payment], the Guar-
antor hereby agrees to cause any such payment to be made punctually when and as
the same shall become due and payable, whether at maturity, upon acceleration
or redemption or otherwise, and as if such payment were made by the Company.
22
205,206
<PAGE>
The Guarantor hereby agrees that its obligations hereunder shall be as prin-
cipal and not merely as surety, and shall be absolute and unconditional, irre-
spective of, and shall be unaffected by, any invalidity, irregularity or unen-
forceability of said Security or said Indenture, any failure to enforce the
provisions of said Security or said Indenture, or any waiver, modification,
consent or indulgence granted to the Company with respect thereto, by the
Holder of said Security or the Trustee under said Indenture, the recovery of
any judgment against the Company or any action to enforce the same, or any
other circumstances which may otherwise constitute a legal or equitable dis-
charge of a surety or guarantor. The Guarantor hereby waives diligence, pre-
sentment, demand of payment, filing of claims with a court in the event of
merger, insolvency or bankruptcy of the Company, any right to require a pro-
ceeding first against the Company, protest or notice with respect to said Se-
curity or the indebtedness evidenced thereby and all demands whatsoever, and
covenants that this Guarantee will not be discharged except by payment in full
of the principal, premium, if any, [or] interest on [any overdue principal of]
[or any sinking fund payment required with respect to] said Security and the
complete performance of all other obligations contained in said Security.
The Guarantor shall be subrogated to all rights of the Holder of said Secu-
rity against the Company in respect of any amounts paid to such Holder by the
Guarantor pursuant to the provisions of this Guarantee; provided, however,
that the Guarantor shall not be entitled to enforce, or to receive any pay-
ments arising out of or based upon, such right of subrogation until the prin-
cipal of (and premium, if any) and interest on [any overdue principal of] [and
the sinking fund payments required with respect to] all Securities issued un-
der said Indenture shall have been paid in full.
Subject to the next following paragraph, the Guarantor hereby certifies and
warrants that all acts, conditions and things required to be done and per-
formed and to have happened precedent to the creation and issuance of this
Guarantee and to constitute the same the valid obligation of the Guarantor
have been done and performed and have happened in due compliance with all ap-
plicable laws.
Claims under this Guarantee are, to the extent provided in the Indenture,
subordinate and subject in right of payment to the prior payment in full of
all Senior Indebtedness of the Guarantor, and this Guarantee is issued subject
to the provisions of the Indenture with respect thereto. Each Holder of a Se-
curity upon which this Guarantee is endorsed, by accepting the same, (a)
agrees to and shall be bound by such provisions, (b) authorizes and directs
the Trustee on his behalf to take such action as may be necessary or appropri-
ate to effectuate the subordination so provided and (c) appoints the Trustee
his attorney-in-fact for any and all such purposes.
23
206
<PAGE>
This Guarantee shall not be valid or become obligatory for any purpose until
the certificate of authentication on said Security shall have been signed man-
ually by or on behalf of the Trustee under said Indenture.
This Guarantee shall be deemed to be a contract made under the laws of the
Commonwealth of Pennsylvania, and for all purposes shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania, ex-
cept as otherwise required by mandatory provisions of law.
In Witness Whereof, the Guarantor has caused this Guarantee to be duly exe-
cuted in facsimile by its duly authorized officer under its corporate seal.
MELLON BANK CORPORATION
[Date of initial issuance of series]
By.....................................
[Authorized Signature]
Attest:
.......................................
[Authorized Signature]
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and
delivered and may be Outstanding under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be estab-
lished in or pursuant to a Board Resolution of the Company, and, subject to
Section 303, set forth or determined in the manner provided, in an Officers'
Certificate of the Company, or established in one or more indentures supple-
mental hereto, prior to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall distinguish the
Securities of the series from all Securities of any other series);
(2) any limit upon the aggregate principal amount of the Securities of the
series which may be authenticated and delivered under this Indenture (except
for Securities authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Securities of the series pursuant to
Section 304,
24
206,301
<PAGE>
305, 306, 1006 or 1207 and except for any Securities which, pursuant to Sec-
tion 303, are deemed never to have been authenticated and delivered hereun-
der);
(3) the Person to whom any interest on a Security of the series shall be
payable, if other than the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest;
(4) the date or dates on which the principal of the Securities of the series
is payable;
(5) the rate or rates at which the Securities of the series shall bear in-
terest, if any, or the Floating or Adjustable Rate Provision pursuant to which
such rates are determined, the date or dates from which such interest shall
accrue, the Interest Payment Dates on which such interest shall be payable and
the Regular Record Date for the interest payable on any Interest Payment Date;
(6) the place or places where the principal of (and premium, if any) and in-
terest on, or the principal (and premium, if any) only of, Securities of the
series shall be payable;
(7) the period or periods within which, the price or prices at which and the
terms and conditions upon which Securities of the series may be redeemed, in
whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase Securities
of the series pursuant to any sinking fund or analogous provisions or at the
option of a Holder thereof and the period or periods within which, the price
or prices at which and the terms and conditions upon which Securities of the
series shall be redeemed or purchased, in whole or in part, pursuant to such
obligation;
(9) if other than denominations of $100,000 and any integral multiple of
$1,000 in excess thereof, the denominations in which Securities shall be issu-
able;
(10) any other event or events of default applicable with respect to Securi-
ties of the series in addition to those provided in Section 601;
(11) if other than the principal amount thereof, the portion of the princi-
pal amount of Securities of the series which shall be payable upon declaration
of acceleration of the Maturity thereof pursuant to Section 602;
(12) any other covenant or warranty included for the benefit of Securities
of the series in addition to (and not inconsistent with) those included in
this Indenture for the benefit of Securities of all series;
25
301
<PAGE>
(13) whether the Securities of the series shall be issued in whole or in
part in the form of one or more Global Securities and, in such case, the De-
positary for such Global Security or Securities, which Depositary shall be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended;
(14) the currency or currencies, including composite currencies, in which
payment of the principal of and any premium and interest on the Securities of
the series shall be payable if other than the currency of the United States of
America and the manner of determining the equivalent thereof in the currency
of the United States of America for purposes of the definition of "Outstand-
ing" in Section 101;
(15) if the amount of payments of principal of and any premium or interest
on the Securities of the series may be determined with reference to an index,
the manner in which such amounts shall be determined;
(16) if the principal of (and premium, if any) or interest on the Securities
of the series are to be payable, at the election of the Company or a Holder
thereof, in a coin or currency other than that in which the Securities are
stated to be payable, the coin or currency in which payment of the principal
of (and premium, if any) or interest on Securities of such series as to which
such election is made shall be payable, the period or periods within which,
and the terms and conditions upon which, such election may be made;
(17) any other terms of the series (which terms shall not be inconsistent
with the provisions of this Indenture, except as permitted by Section
1001(5)).
The payment of principal and premium, if any, and interest and sinking fund
payments, if any, on or relating to the Securities of each series shall be un-
conditionally guaranteed by the Guarantor.
Unless otherwise provided in or pursuant to such Board Resolution of the
Company and set forth in such Officers' Certificate of the Company or in any
such indenture supplemental hereto, if Securities of any series are to be re-
deemed they may be redeemed with funds from any source, including without lim-
itation proceeds from the sale of one or more series of Securities.
All Securities of any one series shall be substantially identical except for
necessary or proper variations between temporary and definitive Securities or
Securities of different denominations and except as may otherwise be provided
in or pursuant to the Board Resolution referred to above and (subject to Sec-
tion 303) set forth in the Officers' Certificate referred to above or in any
such indenture supplemental hereto.
26
301
<PAGE>
If any of the terms of the Securities of a series are established by action
taken pursuant to a Board Resolution of the Company, a copy of an appropriate
record of such action shall be certified by the Secretary or an Assistant Sec-
retary of the Company and delivered to the Trustee at or prior to the delivery
of the Officers' Certificate of the Company setting forth the terms of the Se-
curities of such series. With respect to Securities of a series offered in a
Periodic Offering, such Board Resolution or action may provide general terms
or parameters for Securities of such series and provide either that the spe-
cific terms of particular Securities of such series shall be specified in a
Company Order or that such terms shall be determined by the Company or its
agents in accordance with a Company Order as contemplated by the first proviso
of the third paragraph of Section 303.
The Securities of each series and the Guarantees endorsed thereon shall be
subordinated in right of payment to Senior Indebtedness of the Company and the
Guarantor, respectively, as provided in Article Fourteen.
Section 302. Denominations.
The Securities of each series shall be issuable in such denominations as
shall be specified as contemplated by Section 301. In the absence of any such
provisions with respect to the Securities of any particular series, the Secu-
rities of such series shall be issuable only as registered Securities without
coupons in denominations of $100,000 and any integral multiple of $1,000 in
excess thereof.
Section 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company and the Guarantees
endorsed thereon shall be executed on behalf of the Guarantor by, respective-
ly, its Chairman of the Board, one of its Vice Chairmen, its President or one
of its Vice Presidents, under its corporate seal reproduced thereon attested
by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities or Guarantees may be manual or facsimile.
Securities and Guarantees bearing the manual or facsimile signatures of in-
dividuals who were at any time the proper officers of the Company or the Guar-
antor, respectively, shall bind the Company and the Guarantor, respectively,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities and Guar-
antees or did not hold such offices at the date of such Securities and Guaran-
tees.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company, and with Guarantees endorsed thereon executed by the Guarantor, to
the Trustee or Authenticating Agent for authentication, together with a Com-
pany
27
301,302,303
<PAGE>
Order for the authentication and delivery of such Securities, and the Trustee
or Authenticating Agent in accordance with the Company Order shall authenti-
cate and deliver such Securities; provided, however, that, with respect to Se-
curities of a series offered in a Periodic Offering, (a) the Trustee or Au-
thenticating Agent shall authenticate and deliver Securities of such series
original issue from time to time, in an aggregate principal amount not exceed-
ing the aggregate principal amount established for such series, pursuant to a
Company Order or pursuant to such other procedures acceptable to the Trustee
as may be specified from time to time by a Company Order, (b) the maturity
date or dates, original issue date or dates, currency or currencies or compos-
ite currencies, interest rate or rates and any other terms of the Securities
of such series shall be determined by Company Order or pursuant to such proce-
dures and (c) if provided for in such procedures, such Company Order may au-
thorize authentication and delivery pursuant to oral or electronic instruc-
tions from the Company or its duly authorized agent or agents, which instruc-
tions shall be promptly confirmed in writing, including via facsimile, prior
to delivery. If the form or terms of the Securities of the series or the form
of the Guarantee relating thereto have been established in or pursuant to one
or more Board Resolutions as permitted by Sections 201 and 301, in authenti-
cating such Securities, and accepting the additional responsibilities under
this Indenture in relation to such Securities, the Trustee shall be entitled
to receive at the time of the initial delivery by the Company of Securities of
such series to the Trustee or Authenticating Agent for authentication, and
(subject to Section 701) shall be fully protected in relying upon, an Opinion
of Counsel stating,
(a) if the form of such Securities or Guarantees has been established by
or pursuant to Board Resolution as permitted by Section 201, that such
form has been established in conformity with the provisions of this Inden-
ture;
(b) if the terms of such Securities have been established by or pursuant
to Board Resolution as permitted by Section 301, that such terms have been
established in conformity with the provisions of this Indenture; and
(c) that such Securities, when authenticated and delivered by the
Trustee or Authenticating Agent and issued by the Company, and such Guar-
antees when endorsed on such Securities, all in the manner and subject to
any conditions specified in such Opinion of Counsel, will be the legal,
valid and binding obligations of the Company and the Guarantor, respec-
tively, enforceable in accordance with their terms and entitled to the
benefits of this Indenture, subject, as to enforcement, to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws relating to or affecting generally the enforcement of
creditors' rights and to
28
303
<PAGE>
general principles of equity; provided, however, that, with respect to Se-
curities of a series offered in a Periodic Offering, the Trustee shall be
entitled to receive such Opinion of Counsel in connection only with the
first authentication of Securities of such series and that the opinions de-
scribed in clauses (b) and (c) above may state, respectively,
(x) that, when the terms of such Securities shall have been estab-
lished pursuant to a Company Order or pursuant to such procedures as
may be specified from time to time by a Company Order, all as contem-
plated by a Board Resolution or action taken pursuant thereto, such
terms will have been duly authorized by the Company and will have been
established in conformity with the provisions of this Indenture; and
(y) that such Securities, when completed, authenticated and deliv-
ered by the Trustee or Authenticating Agent and issued by the Company,
and such Guarantees when endorsed on such Securities, all in the man-
ner and subject to any conditions specified in such Opinion of Coun-
sel, will be the legal, valid and binding obligations of the Company
and the Guarantor, respectively, enforceable in accordance with their
terms and entitled to the benefits of this Indenture, subject, as to
enforcement, to applicable bankruptcy, insolvency, fraudulent trans-
fer, reorganization, moratorium and similar laws relating to or af-
fecting generally the enforcement of creditors' rights and to general
principles of equity.
With respect to Securities of a series offered in a Periodic Offering, the
Trustee may rely, as to the authorization by the Company of any of such Securi-
ties and by the Guarantor of any such Guarantees, the form and terms thereof
and the legality, validity, binding effect and enforceability thereof, upon the
Opinion of Counsel, Company Order and other documents delivered pursuant to
Sections 201 and 301 and this Section, as applicable, delivered at or prior to
the first authentication of Securities of such series unless and until such
opinion or other documents have been superseded or revoked.
The Trustee or Authenticating Agent may, but shall not be obligated to, au-
thenticate the Securities of any series the form or terms of which, or the form
of the Guarantees relating to which, have been so established and with respect
to which it would not be or have been obligated, pursuant to the second sen-
tence of Section 1003, to execute, if no Securities of such series have been
authenticated, at the time such authentication is requested, or, if Securities
of such series have been authenticated, at the time of the initial authentica-
tion of Securities of such series, an indenture supplemental hereto containing
such form or terms.
29
303
<PAGE>
Notwithstanding the provisions of Section 301 and of the third paragraph of
this Section 303, if any Securities of a series are to be offered in a Peri-
odic Offering, it shall not be necessary to deliver the Opinion of Counsel,
Company Order and other documents otherwise required pursuant to Sections 201
and 301 and this Section at or prior to the time of authentication of each Se-
curity of such series if such documents are delivered at or prior to the time
of authentication upon original issuance of the first Security of such series
to be issued.
Each Security shall be dated the date of authentication of such Security.
Each Guarantee shall be dated the date of the initial issuance of Securities
of the series to which it pertains.
No Security or Guarantee endorsed thereon shall be entitled to any benefit
under this Indenture or be valid or obligatory for any purpose unless there
appears on such Security a certificate of authentication substantially in the
form provided for herein executed by the Trustee or Authenticating Agent by
manual signature, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenti-
cated and delivered hereunder. Notwithstanding the foregoing, if any Security
shall have been authenticated and delivered hereunder but never issued and
sold by the Company, and the Company shall deliver such security to the
Trustee for cancellation as provided in Section 309 together with a written
statement (which need not comply with Section 102 and need not be accompanied
by an Opinion of Counsel) stating that such Security has never been issued and
sold by the Company, for all purposes of this Indenture such Security shall be
deemed never to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.
The Trustee or Authenticating Agent shall have the right to decline to au-
thenticate and deliver any Securities under this Section if the Trustee or Au-
thenticating Agent, being advised by counsel, determines that such action may
not lawfully be taken by the Company or the Guarantor or if the issue of such
Securities pursuant to this Indenture will affect the Trustee's own rights,
duties or immunities under this Indenture in a manner not reasonably accept-
able to the Trustee.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company
may execute, and upon Company Order the Trustee or Authenticating Agent shall
authenticate and deliver, temporary Securities (having Guarantees duly en-
dorsed thereon) which are printed, lithographed, typewritten, mimeographed or
30
303,304
<PAGE>
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Securities in lieu of which they are issued and with such ap-
propriate insertions, omissions, substitutions and other variations as the of-
ficers executing such Securities may determine, as evidenced by their execution
of such Securities.
If temporary Securities of any series are issued, the Company will cause de-
finitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company designated pursuant to Section 1102 in a Place
of Payment for Securities of that series, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities of any se-
ries, the Company shall execute and the Trustee or Authenticating Agent shall
authenticate and deliver in exchange therefor one or more definitive Securities
of the same series and of a like aggregate principal amount and tenor of autho-
rized denominations. Until so exchanged, the temporary Securities of any series
and the Guarantees endorsed thereon shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of such series and
tenor and the Guarantees endorsed thereon.
Section 305. Registration, Registration of Transfer and Exchange.
The Company will keep at an office or agency to be maintained by the Company
as provided in Section 1102 a register (hereinafter referred to as the "Secu-
rity Register") in which, subject to such reasonable regulations as it may pre-
scribe, the Company shall provide for the registration of Securities and the
registration of transfers of Securities. At all reasonable times, the Security
Register shall be open to inspection by the Trustee. Unless and until otherwise
determined by the Company, by Board Resolution, the Security Register shall be
kept in the City of Pittsburgh, Pennsylvania, at the Corporate Trust Office of
the Bank, which is hereby initially appointed security registrar ("Security
Registrar", which term includes any successor appointed pursuant to this Sec-
tion) for the purpose of registering Securities and transfers of Securities as
herein provided.
Upon surrender for registration of transfer of any Security of any series at
the office or agency of the Company maintained pursuant to Section 1102 for
such purpose in a Place of Payment for Securities of that series, the Company
shall execute, and the Trustee or Authenticating Agent shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new
31
304,305
<PAGE>
Securities of like tenor of the same series (having Guarantees duly endorsed
thereon), of any authorized denominations and of a like aggregate principal
amount and tenor.
At the option of the Holder, Securities of any series may be exchanged for
other Securities of like tenor of the same series (having Guarantees duly en-
dorsed thereon), of any authorized denominations and of a like aggregate prin-
cipal amount and tenor, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any Securities are so surrendered for exchange,
the Company shall execute, and the Trustee or Authenticating Agent shall au-
thenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive and the Guarantor shall execute the Guarantees endorsed
thereon.
All Securities and the Guarantees endorsed thereon issued upon any registra-
tion of transfer or exchange of Securities shall be the valid obligations, re-
spectively, of the Company and the Guarantor evidencing the same debt, and en-
titled to the same benefits under this Indenture, as the Securities and the
Guarantees endorsed thereon surrendered upon such registration of transfer or
exchange.
Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Security Registrar) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company duly executed, by the Holder thereof or his attor-
ney duly authorized in writing.
No service charge shall be made for any registration of transfer or exchange
of Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than exchanges pursu-
ant to Section 304, 1006 or 1207 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or
exchange any Security of any series during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of Se-
curities of such series selected for redemption under Section 1203 and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.
Notwithstanding the foregoing, any Global Security shall be exchangeable pur-
suant to this Section 305 for Securities registered in the names of Persons
other than the Depositary for such Security or its nominee only if (i) such De-
32
305
<PAGE>
positary notifies the Company that it is unwilling or unable to continue as De-
positary for such Global Security or if at any time such Depositary ceases to
be a clearing agency registered under the Securities Exchange Act of 1934, as
amended, (ii) the Company executes and delivers to the Trustee a Company Order
that such Global Security shall be so exchangeable or (iii) there shall have
occurred and be continuing an Event of Default with respect to the Securities.
Any Global Security that is exchangeable pursuant to the preceding sentence
shall be exchangeable for Securities registered in such names as such Deposi-
tary shall direct.
Unless and until any Global Security is exchanged in whole or in part for Se-
curities of this series in certificated form, such Global Security may not be
transferred except as a whole by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary
or a nominee of such Depositary. Unless a certificate representing a Global Se-
curity is presented by an authorized representative of such a transferror to
the Company or its agent for registration of transfer, exchange or payment, and
any certificate issued is registered in the name of such a transferee or such
other name as requested by an authorized representative of such a transferror
and any payment is made to such a transferee, any transfer, pledge or other use
thereof for value or otherwise by or to any person is wrongful since the regis-
tered owner thereof, such a transferror has an interest therein.
No holder of any beneficial interest in any Global Security held on its be-
half by a Depositary shall have any rights under this Indenture with respect to
such Global Security, and such Depositary may be treated by the Company, the
Guarantor, the Trustee, and any agent of the Company, the Guarantor or the
Trustee as the owner of such Global Security for all purposes whatsoever. Not-
withstanding the foregoing, nothing herein shall impair, as between a Deposi-
tary and such holders of beneficial interests, the operation of customary prac-
tices governing the exercise of the rights of the Depositary as Holder of any
Security.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee or Authenticating Agent shall authenticate and deliver
in exchange therefor a new Security of the same series, with a Guarantee duly
endorsed thereon, and of like tenor and principal amount and bearing a serial
number not contemporaneously outstanding.
If there shall be delivered to the Company, the Guarantor and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Secu-
rity
33
305,306
<PAGE>
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice
to the Company, the Guarantor or the Trustee that such Security has been ac-
quired by a bona fide purchaser, the Company shall execute and the Trustee or
Authenticating Agent shall authenticate and deliver, in lieu of any such de-
stroyed, lost or stolen Security, a new Security of the same series, with a
Guarantee duly endorsed thereon by the Guarantor, and of like tenor and princi-
pal amount and bearing a serial number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Security of the same series, pay such Security.
Upon the issuance of any new Security under this Section, the Company may re-
quire the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (includ-
ing the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company guaranteed by the Guarantor, whether or
not the destroyed, lost or stolen Security shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities and Guarantees of the same
series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the ex-
tent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
Section 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301 with respect to
any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the Person in whose name that Security (or one or more Predecessor Se-
curities) is registered at the close of business on the Regular Record Date for
such interest.
Any interest on any Security of a particular series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such
34
306,307
<PAGE>
Defaulted Interest may be paid by the Company or the Guarantor, at its elec-
tion in each case, as provided in Clause (1) or (2) below:
(1) The Company or the Guarantor may elect to make payment of any De-
faulted Interest to the Persons in whose names the Securities of such se-
ries (or their respective Predecessor Securities) are registered at the
close of business on a Special Record Date for the payment of such De-
faulted Interest, which shall be fixed in the following manner. The Com-
pany or the Guarantor shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Security of such series and
the date of the proposed payment, and at the same time the Company or the
Guarantor, as the case may be, shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for deposit with the Trustee or designated Paying Agent prior to the date
of the proposed payment, such money when deposited to be held in trust for
the benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date of the proposed payment
and not less than 10 days after the receipt by the Trustee of the notice
of the proposed payment. The Trustee shall promptly notify the Company or
the Guarantor, as the case may be, of such Special Record Date and, in the
name and at the expense of the Company or the Guarantor, as the case may
be, shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage
prepaid, to each Holder of Securities of such series at his address as it
appears in the Security Register, not less than 10 days prior to such Spe-
cial Record Date. Notice of the proposed payment of such Defaulted Inter-
est and the Special Record Date therefor having been so mailed, such De-
faulted Interest shall be paid to the Persons in whose names the Securi-
ties of such series (or their respective Predecessor Securities) are reg-
istered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following Clause (2).
(2) The Company or the Guarantor may make payment of any Defaulted In-
terest on the Securities of any series in any other lawful manner not in-
consistent with the requirements of any securities exchange on which Secu-
rities of such series may be listed, and upon such notice as may be re-
quired by such exchange, if, after notice given by the Company or the
Guarantor to the Trustee of the proposed payment pursuant to this Clause,
such manner of payment shall be deemed practicable by the Trustee.
35
307
<PAGE>
Subject to the foregoing provisions of this Section, each Security delivered
under this Indenture upon registration of transfer of or in exchange for or in
lieu of any other Security of the same series shall carry the rights to inter-
est accrued and unpaid, and to accrue, which were carried by such other Secu-
rity.
Section 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company, the Guarantor, the Trustee and any agent of the Company, the Guaran-
tor or the Trustee may treat the Person in whose name such Security is regis-
tered as the owner of such Security for the purpose of receiving payment of
principal of (and premium, if any) and (subject to Section 307) interest on
such Security and for all other purposes whatsoever, whether or not such Secu-
rity be overdue, and neither the Company, the Guarantor, the Trustee nor any
agent of the Company, the Guarantor or the Trustee shall be affected by notice
to the contrary.
Section 309. Cancellation.
All Securities surrendered for payment, redemption, registration of transfer
or exchange or for credit against any sinking fund payment shall, if surren-
dered to any Person other than the Trustee or an Authenticating Agent, be de-
livered to the Trustee or an Authenticating Agent and shall be promptly can-
celled by it. The Company or the Guarantor may at any time deliver to the
Trustee or an Authenticating Agent for cancellation any Securities previously
authenticated and delivered hereunder which the Company or the Guarantor may
have acquired in any manner whatsoever, and may deliver to the Trustee (or to
any other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly cancelled by the Trustee or
an Authenticating Agent. No Securities shall be authenticated in lieu of or in
exchange for any Securities cancelled as provided in this Section, except as
expressly permitted by this Indenture. The Trustee and any Authenticating
Agent shall destroy all cancelled Securities held by it and shall deliver to
the Company a certificate with respect to such destruction.
Section 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Securities
of any series, interest on the Securities of each series shall be computed on
the basis of a 360-day year of twelve 30-day months.
36
307,308,309,310
<PAGE>
ARTICLE FOUR
Guarantee of Securities
Section 401. Unconditional Guarantee.
The Guarantor hereby unconditionally guarantees to each Holder of a Security
of any series authenticated and delivered by the Trustee or Authenticating
Agent the due and punctual payment of the principal of and premium, if any, and
interest on such Security and the due and punctual payment of the sinking fund
payments, if any, provided for pursuant to the terms of such Security, when and
as the same shall become due and payable, whether at maturity, by acceleration
or redemption or otherwise, in accordance with the terms of such Security and
of this Indenture. In case of the failure of the Company punctually to pay any
such principal, premium, interest or sinking fund payment, the Guarantor hereby
agrees to cause any such payment to be made punctually when and as the same
shall become due and payable, whether at maturity, upon acceleration or redemp-
tion or otherwise, and as if such payment were made by the Company.
The Guarantor hereby agrees that its obligations hereunder shall be as prin-
cipal and not merely as surety, and shall be absolute and unconditional, irre-
spective of, and shall be unaffected by, any invalidity, irregularity or unen-
forceability of such Security or this Indenture, any failure to enforce the
provisions of any such Security or this Indenture, or any waiver, modification,
consent or indulgence granted to the Company with respect thereto, by the
Holder of such Security or the Trustee, the recovery of any judgment against
the Company or any action to enforce the same, or any other circumstances which
may otherwise constitute a legal or equitable discharge of a surety or guaran-
tor. The Guarantor hereby waives diligence, presentment, demand of payment,
filing of claims with a court in the event of merger, insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest or notice with respect to any such Security or the indebtedness evi-
denced thereby and all demands whatsoever, and covenants that this Guarantee
will not be discharged except by payment in full of the principal of and premi-
um, if any, and interest on, and any sinking fund payments required with re-
spect to, the Securities and the complete performance of all other obligations
contained in the Securities.
The Guarantor shall be subrogated to all rights of the Holder of any Security
against the Company in respect of any amounts paid to such Holder by the Guar-
antor pursuant to the provisions of this Guarantee; provided, however, that the
Guarantor shall not be entitled to enforce, or to receive any payments arising
out of or based upon, such right of subrogation until the principal of and
premi-
37
401
<PAGE>
um, if any, and interest on, and any sinking fund payments required with re-
spect to, all Securities shall have been paid in full.
Claims under the Guarantee are, to the extent provided in this Indenture,
subordinate and subject in right of payment to the prior payment in full of all
Senior Indebtedness of the Guarantor, and the Guarantee is issued subject to
the provisions of this Indenture with respect thereto. Each Holder of a Secu-
rity upon which the Guarantee is endorsed, by accepting the same, (a) agrees to
and shall be bound by such provisions, (b) authorizes and directs the Trustee
on his behalf to take such action as may be necessary or appropriate to effec-
tuate the subordination so provided and (c) appoints the Trustee his attorney-
in-fact for any and all such purposes.
Section 402. Execution of Guarantees.
To evidence its Guarantee to the Holders specified in Section 401, the Guar-
antor hereby agrees to execute the Guarantee in substantially the form above
recited to be endorsed on each Security authenticated and delivered by the
Trustee or Authenticating Agent. Each such Guarantee shall be executed on be-
half of the Guarantor and dated as set forth in Section 303 prior to the au-
thentication of the Security on which it is endorsed, and the delivery of such
Security by the Trustee or Authenticating Agent, after the authentication
thereof hereunder, shall constitute due delivery of such Guarantee on behalf of
the Guarantor.
The Guarantee set forth in this Article shall not be valid or become obliga-
tory for any purpose with respect to a Security until the certificate of au-
thentication on such Security shall have been signed by the Trustee or Authen-
ticating Agent.
ARTICLE FIVE
Satisfaction and Discharge
Section 501. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to any surviv-
ing rights of registration of transfer, exchange or replacement of Securities
herein expressly provided for), and the Trustee, on demand of and at the ex-
pense of the Company and the Guarantor, shall execute proper instruments ac-
knowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other than
(i) Securities which have been destroyed, lost or stolen and which have
been
38
401,402,501
<PAGE>
replaced or paid as provided in Section 306 and (ii) Securities for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or dis-
charged from such trust, as provided in Section 1103) have been delivered
to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year, or
(iii) are to be called for redemption within one year under ar-
rangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company and the Guarantor,
and the Company or the Guarantor, in the case of (i), (ii) or (iii) above,
has deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the Trustee
for cancellation, for principal (and premium, if any) and interest to the
date of such deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity or Redemption Date, as the case may be;
(2) the Company or the Guarantor has paid or caused to be paid all other
sums payable hereunder by the Company and the Guarantor; and
(3) the Company and the Guarantor have delivered to the Trustee an Offi-
cers' Certificate and an Opinion of Counsel, each stating that all condi-
tions precedent herein provided for relating to the satisfaction and dis-
charge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the obliga-
tions of the Company and the Guarantor to the Trustee under Section 707, the
obligations of the Trustee to any Authenticating Agent under Section 714 and,
if money shall have been deposited with the Trustee pursuant to subclause (B)
of Clause (1) of this Section, the obligations of the Trustee under Section 502
and the last paragraph of Section 1103 shall survive.
39
501
<PAGE>
Section 502. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1103, all money
deposited with the Trustee pursuant to Section 501 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this In-
denture, to the payment, either directly or through any Paying Agent (including
the Company acting as its own Paying Agent) as the Trustee may determine, to
the Persons entitled thereto, of the principal (and premium, if any) and inter-
est for whose payment such money has been deposited with the Trustee; but such
money need not be segregated from other funds except as required by law.
ARTICLE SIX
Remedies
Section 601. Events of Default.
"Event of Default," wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be ef-
fected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(1) a court or Federal or State regulatory agency having jurisdiction in
the premises shall enter a decree or order for relief in respect of the
Guarantor or the Bank in an involuntary case under any applicable bank-
ruptcy, insolvency or other similar law now or hereafter in effect, or ap-
pointing a receiver, liquidator, assignee, custodian, trustee, sequestra-
tor (or similar official) of the Guarantor or the Bank or substantially
all of such Person's assets (other than appointment of a conservator with
respect to the Bank), or ordering the winding up or liquidation of such
Person's affairs, and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or
(2) the Guarantor or the Bank shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an invol-
untary case under any such law, or shall consent to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or similar official) of the Guarantor or the Bank or sub-
stantially all of such Person's assets (other than appointment of a con-
servator with respect to the Bank), or shall make any general assignment
for the benefit of creditors.
40
502,601
<PAGE>
Upon receipt by the Trustee of any Notice of Default pursuant to this Section
601 with respect to Securities of a series all or part of which is represented
by a Global Security, a record date shall be established for determining Hold-
ers of Outstanding Securities of such series entitled to join in such notice of
default, which record date shall be at the close of business on the date the
Trustee receives such notice of default. The Holders on such record date, or
their duly designated proxies, and only such Persons, shall be entitled to join
in such notice of default, whether or not such Holders remain Holders after
such record date; provided, that unless Holders of at least 10% in principal
amount of the Outstanding Securities of such series, or their proxies shall
have joined in such notice of default prior to the day which is 90 days after
such record date, such notice of default shall automatically and without fur-
ther action by any Holder be cancelled and of no further effect. Nothing in
this paragraph shall prevent a Holder, or a proxy of a Holder, from giving, af-
ter expiration of such 90-day period, a new notice of default identical to a
notice of default which has been cancelled pursuant to the proviso to the pre-
ceding sentence, in which event a new record date shall be established pursuant
to the provisions of this Section 601.
Section 602. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding Se-
curities of that series may declare the principal amount (or, if any of the Se-
curities of that series are Original Issue Discount Securities, such portion of
the principal amount of such Securities as may be specified in the terms there-
of), of all of the Securities of that series to be due and payable immediately,
by a notice in writing to the Company and the Guarantor (and to the Trustee if
given by Holders), and upon any such declaration such principal amount (or
specified amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to Securi-
ties of any series has been made and before a judgment or decree for payment of
the money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in principal amount of the Outstanding Se-
curities of that series, by written notice to the Company, the Guarantor and
the Trustee, may rescind and annul such declaration and its consequences if
(1) the Company or the Guarantor has paid or deposited with the Trustee
a sum sufficient to pay
(A) all overdue instalments of interest on all Securities of that
series,
41
601,602
<PAGE>
(B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration
of acceleration and interest thereon at the rate or rates prescribed
therefor in such Securities,
(C) to the extent that payment of such interest is lawful, interest
upon overdue instalments of interest at the rate or rates prescribed
therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the rea-
sonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) all Events of Default and Defaults with respect to Securities of
that series, other than the non-payment of the principal of Securities of
that series which have become due solely by such declaration of accelera-
tion, have been cured or waived as provided in Section 613.
No such rescission shall affect any subsequent default or impair any right con-
sequent thereon.
Upon receipt by the Trustee of any written notice declaring such an accelera-
tion, or rescission and annulment thereof, with respect to Securities of a se-
ries all or part of which is represented by a Global Security, a record date
shall be established for determining Holders of Outstanding Securities of such
series entitled to join in such notice, which record date shall be at the close
of business on the day the Trustee receives such notice. The Holders on such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to join in such notice, whether or not such Holders remain Holders af-
ter such record date; provided, that unless such declaration of acceleration,
or rescission and annulment, as the case may be, shall have become effective by
virtue of the requisite percentage having joined in such notice prior to the
day which is 90 days after such record date, such notice of declaration of ac-
celeration, or rescission and annulment, as the case may be, shall automati-
cally and without further action by any Holder be cancelled and of no further
effect. Nothing in this paragraph shall prevent a Holder, or a proxy of a Hold-
er, from giving, after expiration of such 90-day period, a new written notice
of declaration of acceleration, or rescission and annulment thereof, as the
case may be, that is identical to a written notice which has been cancelled
pursuant to the proviso to the preceding sentence, in which event a new record
date shall be established pursuant to the provisions of this Section 602.
42
602
<PAGE>
Section 603. Collection of Indebtedness and Suits for Enforcement by Trustee.
"Default", wherever used herein, means any one of the following events (what-
ever the reason for such Default and whether it shall be occasioned by the pro-
visions of Article Fourteen or be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default is made in the payment of any interest on any Security when
such interest becomes due and payable and such default continues for a pe-
riod of 30 days, or
(2) default is made in the payment of the principal of any Security at
the Maturity thereof, or
(3) default is made in the performance of any covenant or a breach oc-
curs in any warranty of the Company in this Indenture (other than a cove-
nant or warranty a default in whose performance or whose breach is else-
where in this Section specifically dealt with or which has expressly been
included in this Indenture solely for the benefit of Securities of any se-
ries other than that series), and such default or breach continues for a
period of 60 days after there has been given, by registered or certified
mail, to the Company and the Guarantor by the Trustee or to the Company
and the Guarantor and the Trustee by the Holders of at least 25% in prin-
cipal amount of the Outstanding Securities of that series, a written no-
tice specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder.
The Company covenants that if any Event of Default or Default under Clause (1)
or (2) above shall occur, the Company will, upon demand of the Trustee, pay to
it, for the benefit of the Holder of such Security, the whole amount then due
and payable on such Security for principal (and premium, if any) and interest
and, to the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal (and premium, if any) and on any overdue in-
terest, at the rate or rates prescribed therefor in such Security, and, in ad-
dition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company or the Guarantor fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and un-
paid,
43
603
<PAGE>
may prosecute such proceeding to judgment or final decree and may enforce the
same against the Company or the Guarantor or any other obligor upon such Secu-
rity and collect the moneys adjudged or decreed to be payable in the manner
provided by law out of the property of the Company or the Guarantor or any
other obligor upon such Security, wherever situated.
If an Event of Default or Default with respect to Securities of any series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Securities of such se-
ries by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific en-
forcement of any covenant or agreement in this Indenture or in aid of the exer-
cise of any power granted herein, or to enforce any other proper remedy.
Section 604. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation, bank-
ruptcy, reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company, the Guarantor or any other obligor upon the
Securities or the property of the Company, the Guarantor or such other obligor
or their creditors, the Trustee shall be entitled and empowered, by interven-
tion in such proceeding or otherwise, to take any and all actions authorized
under the Trust Indenture Act in order to have claims of the Holders and the
Trustee allowed in any such proceeding. In particular, the Trustee shall be au-
thorized to collect and receive any moneys or other property payable or deliv-
erable on any such claims and to distribute the same; and any receiver, assign-
ee, custodian, trustee, liquidator, sequestrator or other similar official in
any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and ad-
vances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 707.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in re-
spect of the claim of any Holder in any such proceeding.
Section 605. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities or the
Guarantees may be prosecuted and enforced by the Trustee without the posses-
44
603,604,605
<PAGE>
sion of any of the Securities or the production thereof in any proceeding re-
lating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.
Section 606. Application of Money Collected.
Subject to Article Fourteen, any money collected by the Trustee pursuant to
this Article shall be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such money on account
of principal (or premium, if any) or interest, upon presentation of the Securi-
ties and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under Section 707;
and
Second: To the payment of the amounts then due and unpaid for principal
of (and premium, if any) and interest on the Securities in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due
and payable on such Securities for principal (and premium, if any) and in-
terest, respectively.
Section 607. Limitation on Suits.
No Holder of any Security of any series shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default or Default with respect to the Securities of
that series;
(2) the Holders of not less than 25% in principal amount of the Out-
standing Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default or
Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable indem-
nity against the costs, expenses and liabilities to be incurred in compli-
ance with such request;
45
605,606,607
<PAGE>
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
Section 608. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the Holder of any Se-
curity shall have the right, which is absolute and unconditional, to receive
payment of the principal of (and premium, if any) and (subject to Section 307)
interest on such Security on the Stated Maturity or Maturities expressed in
such Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
Section 609. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Guarantor, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall con-
tinue as though no such proceeding had been instituted.
Section 610. Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
46
607,608,609,610
<PAGE>
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent as-
sertion or employment of any other appropriate right or remedy.
Section 611. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities to ex-
ercise any right or remedy accruing upon any Event of Default or Default shall
impair any such right or remedy or constitute a waiver of any such Event of De-
fault or Default or an acquiescence therein. Every right and remedy given by
this Article or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
Section 612. Control by Holders.
The Holders of a majority in principal amount of the Outstanding Securities
of any series shall have the right to direct the time, method and place of con-
ducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the Securities of
such series, provided that
(1) such direction shall not be in conflict with any rule of law or with
this Indenture, and
(2) such direction shall not be unduly prejudicial to the rights of
Holders not joining therein nor expose the Trustee to personal liability.
(3) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Upon receipt by the Trustee of any written notice directing the time, method
or place of conducting any such proceeding or exercising any such trust or pow-
er, with respect to Securities of a series all or part of which is represented
by a Global Security, a record date shall be established for determining Hold-
ers of Outstanding Securities of such series entitled to join in such notice,
which record date shall be at the close of business on the day the Trustee re-
ceives such notice. The Holders on such record date, or their duly designated
proxies, and only such Persons, shall be entitled to join in such notice,
whether or not such Holders remain Holders after such record date; provided,
that unless the Holders of a majority in principal amount of the Outstanding
Securities of such series shall have joined in such notice prior to the day
which is 90 days after such record date, such notice shall automatically and
without further action by any Holder be
47
610,611,612
<PAGE>
cancelled and of no further effect. Nothing in this paragraph shall prevent a
Holder, or a proxy of a Holder, from giving, after expiration of such 90-day
period, a new notice identical to a notice which has been cancelled pursuant to
the proviso to the preceding sentence, in which event a new record date shall
be established pursuant to the provisions of this Section 612.
Section 613. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the Outstand-
ing Securities of any series may on behalf of the Holders of all the Securities
of such series waive any past default hereunder with respect to the Securities
of such series and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or interest
on any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article Ten
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Persons entitled to waive any past default hereun-
der. If a record date is fixed, the Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to waive any de-
fault hereunder, whether or not such Holders remain Holders after such record
date; provided that unless such majority in principal amount shall have waived
such default prior to the date which is 90 days after such record date, any
such waiver previously given shall automatically and without further action by
any Holder be cancelled and of no further effect.
Upon any such waiver, such default shall cease to exist, and any Event of De-
fault or Default arising therefrom shall be deemed to have been cured, for ev-
ery purpose of this Indenture; but no such waiver shall extend to any subse-
quent or other default or impair any right consequent thereon.
Section 614. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture,
or in any suit against the Trustee for any action taken, suffered or omitted by
it as Trustee, a court may require any party litigant in such suit to file an
undertaking to pay the costs of such suit, and may assess costs against any
such party litigant, in the manner and to the extent provided in the Trust In-
denture Act;
48
612,613,614
<PAGE>
provided that neither this Section nor the Trust Indenture Act shall be deemed
to authorize any court to require such an undertaking or to make such an as-
sessment in any suit instituted by the Company or the Guarantor.
Section 615. Waiver of Stay or Extension Laws.
The Company and the Guarantor covenant (to the extent that they may lawfully
do so) that they will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law wherever enacted, now or at any time hereafter in force, which may affect
the covenants or the performance of this Indenture; and the Company and the
Guarantor (to the extent that they may lawfully do so) hereby expressly waive
all benefit or advantage of any such law and covenant that they will not hin-
der, delay or impede the execution of any power herein granted to the Trustee,
but will suffer and permit the execution of every such power as though no such
law had been enacted.
ARTICLE SEVEN
The Trustee
Section 701. Certain Duties and Responsibilities.
(a) The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or other-
wise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate in-
demnity against such risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Inden-
ture relating to the conduct or affecting the liability of or affording pro-
tection to the Trustee shall be subject to the provisions of this Section.
(b) All indemnifications and releases from liability granted herein to the
Trustee shall extend to the directors, officers, employees and agents of the
Trustee.
Section 702. Notice of Defaults.
If a default occurs hereunder with respect to Securities of any series of
which a responsible officer of the Trustee has actual knowledge, the Trustee
shall give the Holders of Securities of such series notice of such default
49
614,615,701,702
<PAGE>
order, bond, debenture, note, other evidence of indebtness or other paper
or document, but the Trustee, in its discretion, may make such further in-
quiry or investigation into such facts or matters as it may see fit, and,
if the Trustee shall determine to make such further inquiry or investiga-
tion, it shall be entitled to examine the books, records and premises of
the Company and the Guarantor, personally or by agent (including an Au-
thenticating Agent) or attorney; provided, that if the payment within a
reasonable time to the trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such inquiry on investigation
is, in the opinion of the Trustee, not reasonably assured the Trustee by
the security afforded to it by the terms of this Indenture, the Trustee
may require reasonable indemnity against such expenses or liabilities as a
condition to proceeding; the reasonable expenses of every such examination
shall be paid by the Company or, if advanced by the Trustee, shall be re-
paid by the Company upon demand; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent (including any Authenticating Agent)
or attorney appointed with due care by it hereunder.
Section 704. Not Responsible for Recitals or Issuance of Securities and
Guarantees.
The recitals contained herein and in the Securities and Guarantees, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company or the Guarantor, as the case may be, and neither the Trustee
nor any Authenticating Agent assumes any responsibility for their correctness.
Neither the Trustee nor any Authenticating Agent makes any representations as
to the validity or sufficiency of this Indenture or of the Securities or the
Guarantees. Neither the Trustee nor any Authenticating Agent shall be account-
able for the use or application by the Company or the Guarantor of Securities
or the proceeds thereof.
Section 705. May Hold Securities.
The Trustee, any Paying Agent, any Security Registrar, any Authenticating
Agent or any other agent of the Company or the Guarantor, in its individual or
any other capacity, may become the owner or pledgee of Securities and, subject
to Sections 708 and 713, may otherwise deal with the Company and the Guarantor
with the same rights it would have if it were not Trustee, Paying Agent, Secu-
rity Registrar, Authenticating Agent or such other agent.
50
703,704,705
<PAGE>
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, officer's certificate, certifi-
cate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see
fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company and the Guarantor, personally or by agent (includ-
ing an Authenticating Agent) or attorney; provided, that if the payment
within a reasonable time to the Trustee of the costs, expenses or liabili-
ties likely to be incurred by it in the making of such inquiry or investi-
gation is, in the opinion of the Trustee, not reasonably assured the
Trustee by the security afforded to it by the terms of this Indenture, the
Trustee may require reasonable indemnity against such expenses or liabili-
ties as a condition to proceeding; the reasonable expenses of every such
examination shall be paid by the Guarantor and or, if advanced by the
Trustee, shall be repaid by the Guarantor Company upon demand; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent (including any Authenticating Agent)
or attorney appointed with due care by it hereunder.
Section 704. Not Responsible for Recitals or Issuance of Securities and
Guarantees.
The recitals contained herein and in the Securities and Guarantees, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company or the Guarantor, as the case may be, and neither the Trustee
nor any Authenticating Agent assumes any responsibility for their correctness.
Neither the Trustee nor any Authenticating Agent makes any representations as
to the validity or sufficiency of this Indenture or of the Securities or the
Guarantees. Neither the Trustee nor any Authenticating Agent shall be account-
able for the use or application by the Company or the Guarantor of Securities
or the proceeds thereof.
Section 705. May Hold Securities.
The Trustee, any Paying Agent, any Security Registrar, any Authenticating
Agent or any other agent of the Company or the Guarantor, in its individual or
51
703,704,705
<PAGE>
any other capacity, may become the owner or pledgee of Securities and, subject
to Sections 708 and 713, may otherwise deal with the Company and the Guarantor
with the same rights it would have if it were not Trustee, Paying Agent, Secu-
rity Registrar, Authenticating Agent or such other agent.
Section 706. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as other-
wise agreed with the Company or the Guarantor.
Section 707. Compensation and Reimbursement.
The Company and the Guarantor agree
(1) to pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents, including any Authenticating Agents, and
counsel), except any such expense, disbursement or advance as may be at-
tributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administra-
tion of the trust or trusts hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the ex-
ercise or performance of any of its powers or duties hereunder.
As security for the performance of the obligations of the Company and the
Guarantor under this Section the Trustee shall have a lien prior to the Securi-
ties and Guarantees upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the payment of principal of
(and premium, if any) or interest on particular Securities.
52
705,706,707
<PAGE>
Section 708. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the meaning
of the Trust Indenture Act, the Trustee shall either eliminate such interest or
resign, to the extent and in the manner provided by, and subject to the provi-
sions of, the Trust Indenture Act and this Indenture.
Section 709. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a Person that
is eligible pursuant to the Trust Indenture Act to act as such and has a com-
bined capital and surplus of at least $50,000,000, and subject to supervision
or examination by Federal or State authority and having a Corporate Trust Of-
fice in the City of Pittsburgh, Pennsylvania or the Borough of Manhattan, The
City of New York, New York or Los Angeles, California. If such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of said supervising or examining authority, then for the purposes of this Sec-
tion, the combined capital and surplus of such Person shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condi-
tion so published. If at any time the Trustee shall cease to be eligible in ac-
cordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
Section 710. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a succes-
sor Trustee pursuant to this Article shall become effective until the accept-
ance of appointment by the successor Trustee in accordance with the applicable
requirements of Section 711.
(b) The Trustee may resign at any time with respect to the Securities of one
or more series by giving written notice thereof to the Company and the Guaran-
tor. If the instrument of acceptance by a successor Trustee required by Section
711 shall not have been delivered to the Trustee within 30 days after the giv-
ing of such notice of resignation, the resigning Trustee may petition any court
of competent jurisdiction for the appointment of a successor Trustee with re-
spect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the Securities of
any series by Act of the Holders of a majority in principal amount of the Out-
standing Securities of such series, delivered to the Trustee and to the Company
and the Guarantor.
53
708,709,710
<PAGE>
(d) If at any time:
(1) the Trustee shall fail to comply with Section 708 after written re-
quest therefor by the Company or the Guarantor or by any Holder who has
been a bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 709 and shall
fail to resign after written request therefor by the Company or the Guar-
antor or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of rehabilita-
tion, conservation or liquidation,
then, in any such case, (i) the Company or the Guarantor by a Board Resolution
may remove the Trustee with respect to all Securities, or (ii) subject to Sec-
tion 614, any Holder who has been a bona fide Holder of a Security for at least
six months may, on behalf of himself and all others similarly situated, peti-
tion any court of competent jurisdiction for the removal of the Trustee with
respect to all Securities and the appointment of a successor Trustee or Trust-
ees.
(e) If the Trustee shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the Se-
curities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all
of such series and that at any time there shall be only one Trustee with re-
spect to the Securities of any particular series) and shall comply with the ap-
plicable requirements of Section 711. If, within one year after such resigna-
tion, removal or incapability, or the occurrence of such vacancy, a successor
Trustee with respect to the Securities of any series shall be appointed by Act
of the Holders of a majority in principal amount of the Outstanding Securities
of such series delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment
in accordance with the applicable requirements of Section 711, become the suc-
cessor Trustee with respect to the Securities of such series and to that extent
supersede the successor Trustee appointed by the Company or the Guarantor. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Guarantor or the Holders and accepted
appointment in the manner required
54
710
<PAGE>
by Section 711, any Holder who has been a bona fide Holder of a Security of
such series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the ap-
pointment of a successor Trustee with respect to the Securities of such series.
(f) The Company shall give notice of each resignation and each removal of the
Trustee with respect to the Securities of any series and each appointment of a
successor Trustee with respect to the Securities of any series to all Holders
of Securities of such series in the manner provided in Section 106; provided,
that failure of the Company to give such notice shall not effect the resigna-
tion or removal of such Trustee. Each notice shall include the name of the suc-
cessor Trustee with respect to the Securities of such series and the address of
its Corporate Trust Office.
Section 711. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with respect
to all Securities, every such successor Trustee so appointed shall execute, ac-
knowledge and deliver to the Company, the Guarantor and to the retiring Trustee
an instrument accepting such appointment, and thereupon the resignation or re-
moval of the retiring Trustee shall become effective and such successor Trust-
ee, without any further act, deed or conveyance, shall become vested with all
the rights, powers, trusts and duties of the retiring Trustee; but, on the re-
quest of the Company, the Guarantor or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder, subject
nevertheless to its lien, if any, provided for in Section 707.
(b) In case of the appointment hereunder of a successor Trustee with respect
to the Securities of one or more (but not all) series, the Company, the Guaran-
tor, the retiring Trustee and each successor Trustee with respect to the Secu-
rities of one or more series shall execute and deliver an indenture supplemen-
tal hereto wherein each successor Trustee shall accept such appointment and
which (1) shall contain such provisions as shall be necessary or desirable to
transfer and confirm to, and to vest in, each successor Trustee all the rights,
powers, trusts and duties of the retiring Trustee with respect to the Securi-
ties of that or those series to which the appointment of such successor Trustee
relates, (2) if the retiring Trustee is not retiring with respect to the Secu-
rities of all series for which it is the Trustee hereunder, shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of
55
710,711
<PAGE>
the retiring Trustee with respect to the Securities of that or those series as
to which the retiring Trustee is not retiring shall continue to be vested in
the retiring Trustee, and (3) shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the adminis-
tration of the trusts hereunder by more than one Trustee, it being understood
that nothing herein or in such supplemental indenture shall constitute such
Trustees co-trustees of the same trust and that each such Trustee shall be
trustee of a trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Trustee; and upon the execution
and delivery of such supplemental indenture the resignation or removal of the
retiring Trustee shall become effective to the extent provided therein and each
such successor Trustee, without any further act, deed or conveyance, shall be-
come vested with all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the ap-
pointment of such successor Trustee relates; but, on request of the Company,
the Guarantor or any successor Trustee, such retiring Trustee shall duly as-
sign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company and the Guarantor
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts re-
ferred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
Section 712. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any cor-
poration succeeding to all or substantially all the corporate trust business of
the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article, with-
out the execution or filing of any paper or any further act on the part of any
of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger, con-
version or consolidation to such authenticating Trustee may adopt such authen-
tication and deliver the Securities so authenticated with the same effect as if
such successor Trustee had itself authenticated such Securities.
56
711,712
<PAGE>
ARTICLE EIGHT
Holders' Lists and Reports by Trustee, Company and Guarantor
Section 801. Company and Guarantor to Furnish Trustee Names and Addresses of
Holders.
The Company and the Guarantor will furnish or cause to be furnished to the
Trustee
(a) semi-annually, either (i) not later than July 15 and January 15 in
each year in the case of Original Issue Discount Securities of any series
which by their terms bear interest only after Maturity, or (ii) not more
than 15 days after each Regular Record Date in the case of Securities of
any other series, a list for each such series, in such form as the Trustee
may reasonably require, of the names and addresses of the Holders of Secu-
rities of such series as of the preceding June 30 or December 31 or as of
such Regular Record Date, as the case may be, and
(b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company or the Guarantor of any such re-
quest, a list of similar form and content as of a date not more than 15
days prior to the time such list is furnished,
excluding from any such list names and addresses received by the Trustee in
its capacity as Security Registrar.
Section 802. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably prac-
ticable, the names and addresses of Holders contained in the most recent list
furnished to the Trustee as provided in Section 801. The Trustee may destroy
any list furnished to it as provided in Section 801 upon receipt of a new list
so furnished.
(b) The rights of the Holders to communicate with other Holders with respect
to their rights under this Indenture or under the Securities, and the corre-
sponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company, the Guarantor and the Trustee that neither the Company, the
Guarantor nor the Trustee nor any agent of either of them shall be held ac-
countable by reason of any disclosure of information as to names and addresses
of Holders made pursuant to the Trust Indenture Act.
57
801,802
<PAGE>
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent without the execution or filing of any paper or any fur-
ther act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may at any time resign by giving written notice of
resignation to the Trustee and to the Company and the Guarantor. The Trustee
may at any time terminate the agency of an Authenticating Agent by giving writ-
ten notice of termination to such Authenticating Agent and to the Company and
the Guarantor. Upon receiving such a notice of resignation or upon such a ter-
mination, or in case at any time such Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, the Trustee may ap-
point a successor Authenticating Agent which shall be acceptable to the Company
and the Guarantor and shall mail notice of such appointment to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear on the Security Register. Any suc-
cessor Authenticating Agent upon acceptance of its appointment hereunder shall
become vested with all the rights, powers and duties of its predecessor hereun-
der, with like effect as if originally named as an Authenticating Agent herein.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time rea-
sonable compensation for its services under this Section, and the Trustee shall
be entitled to be reimbursed for such payments, in accordance with the provi-
sions of Section 707.
ARTICLE EIGHT
Holders' Lists and Reports by Trustee, Company and Guarantor
Section 801. Company and Guarantor to Furnish Trustee Names and Addresses of
Holders.
The Company and the Guarantor will furnish or cause to be furnished to the
Trustee
(a) semi-annually, either (i) not later than July 15 and January 15 in
each year in the case of Original Issue Discount Securities of any series
which by their terms bear interest only after Maturity, or (ii) not more
than 15 days after each Regular Record Date in the case of Securities of
any other series, a list for each such series, in such form as the Trustee
may reasonably require, of the names and addresses of the Holders of Secu-
rities of such series as of the preceding June 30 or December 31 or as of
such Regular Record Date, as the case may be, and
58
714,801
<PAGE>
(b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company or the Guarantor of any such re-
quest, a list of similar form and content as of a date not more than 15
days prior to the time such list is furnished,
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
Section 802. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably practi-
cable, the names and addresses of Holders contained in the most recent list
furnished to the Trustee as provided in Section 801. The Trustee may destroy
any list furnished to it as provided in Section 801 upon receipt of a new list
so furnished.
(b) The rights of the Holders to communicate with other Holders with respect
to their rights under this Indenture or under the Securities, and the corre-
sponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company, the Guarantor and the Trustee that neither the Company, the
Guarantor nor the Trustee nor any agent of either of them shall be held ac-
countable by reason of any disclosure of information as to names and addresses
of Holders made pursuant to the Trust Indenture Act.
Section 803. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports concerning the Trustee
and its actions under this Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any Secu-
rities are listed, with the Commission and with the Company and the Guarantor.
The Company or the Guarantor will notify the Trustee when any Securities are
listed on any stock exchange.
Section 804. Reports by Company and Guarantor.
The Company and the Guarantor shall file with the Trustee and the Commission,
and transmit to Holders, such information, documents and other reports, and
such summaries thereof, as may be required pursuant to the Trust Indenture
59
802,803,804
<PAGE>
Act at the times and in the manner provided pursuant to such Act; provided that
any such information, documents or reports required to be filed with the Com-
mission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
shall be filed with the Trustee within 15 days after the same is so required to
be filed with the Commission.
ARTICLE NINE
Consolidation, Merger and Sale
Section 901. Company May Consolidate, Etc., Only on Certain Terms.
Nothing contained in this Indenture or in any of the Securities or Guarantees
shall prevent any consolidation or merger of the Company with or into any other
corporation or corporations (whether or not affiliated with the Company), or
successive consolidations or mergers in which the Company or its successor or
successors shall be a party or parties, or shall prevent any conveyance, trans-
fer or lease of the property of the Company as an entirety or substantially as
an entirety, to any other corporation (whether or not affiliated with the Com-
pany) authorized to acquire and operate the same; provided, however, that:
(1) in case the Company shall consolidate with or merge into another
corporation or convey, transfer or lease its properties and assets sub-
stantially as an entirety to any Person, the corporation formed by such
consolidation or into which the Company is merged or the Person which ac-
quires by conveyance or transfer, or which leases, the properties and as-
sets of the Company substantially as an entirety shall be a corporation
organized and existing under the laws of the United States of America, any
State thereof or the District of Columbia and shall expressly assume, by
an indenture (or indentures, if at such time there is more than one Trust-
ee) supplemental hereto, executed and delivered by the successor corpora-
tion and the Guarantor to the Trustee, in form satisfactory to the Trust-
ee, the due and punctual payment of the principal of (and premium, if any)
and interest on all the Securities and the performance of every covenant
of this Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction and treating any
indebtedness which becomes an obligation of the Company or a Subsidiary as
a result of such transaction as having been incurred by the Company or
such Subsidiary at the time of such transaction, no Event of Default, and
no event (including, without limitation, default under Section 1107)
which, after notice or lapse of time or both, would become an Event of De-
fault or Default, shall have happened and be continuing;
60
804,901
<PAGE>
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and such supplemental indenture comply with
this Article and that all conditions precedent herein provided for relat-
ing to such transaction have been complied with; and
(4) the Guarantor has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that the Guarantees remain in full
force and effect.
Section 902. Successor Corporation Substituted for Company.
Upon any consolidation or merger or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety to any Person
in accordance with Section 901, the successor corporation formed by such con-
solidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may ex-
ercise every right and power of, the Company under this Indenture with the same
effect as if such successor corporation had been named as the Company herein,
and thereafter, except in the case of a lease to another Person, the predeces-
sor corporation shall be relieved of all obligations and covenants under this
Indenture and the Securities.
Section 903. Guarantor May Consolidate, Etc., Only on Certain Terms.
Nothing contained in this Indenture or in any of the Securities or Guarantees
shall prevent any consolidation or merger of the Guarantor with or into any
other corporation or corporations (whether or not affiliated with the Guaran-
tor), or successive consolidations or mergers in which the Guarantor or its
successor or successors shall be a party or parties, or shall prevent any con-
veyance, transfer or lease of the property of the Guarantor as an entirety or
substantially as an entirety, to any other corporation (whether or not affili-
ated with the Guarantor) authorized to acquire and operate the same; provided,
however, that
(1) in case the Guarantor shall consolidate with or merge into another
corporation or convey, transfer or lease its properties and assets sub-
stantially as an entirety to any Person, the corporation formed by such
consolidation or into which the Guarantor is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Guarantor substantially as an entirety shall be a corpora-
tion organized and existing under the laws of the United States of Ameri-
ca, any State thereof or the District of Columbia and shall expressly as-
sume, by an indenture (or
61
902,903
<PAGE>
indentures, if at such time there is more than one Trustee) supplemental
hereto, executed and delivered by the Guarantor and the Company to the
Trustee, in form satisfactory to the Trustee, the Guarantees endorsed on
the Securities and the performance of every covenant of this Indenture on
the part of the Guarantor to be performed or observed;
(2) immediately after giving effect to such transaction and treating any
indebtedness which becomes an obligation of the Guarantor or a Subsidiary
as a result of such transaction as having been incurred by the Guarantor
or such Subsidiary at the time of such transaction, no Event of Default or
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default or Default, shall have happened and be continu-
ing; and
(3) the Guarantor has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and such supplemental indenture comply with
this Article and that all conditions precedent herein provided for relat-
ing to such transaction have been complied with.
Section 904. Successor Corporation Substituted for Guarantor.
Upon any consolidation or merger or any conveyance, transfer or lease of the
properties and assets of the Guarantor substantially as an entirety to any Per-
son in accordance with Section 903, the successor corporation formed by such
consolidation or into which the Guarantor is merged or to which such convey-
ance, transfer or lease is made shall succeed to, and be substituted for, and
may exercise every right and power of, the Guarantor under this Indenture with
the same effect as if such successor corporation had been named as the Guaran-
tor herein, and thereafter, except in the case of a lease to another Person,
the predecessor corporation shall be relieved of all obligations and covenants
under this Indenture and the Guarantees.
Section 905. Assumption by Guarantor.
The Guarantor, or a Subsidiary thereof, may directly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form satisfac-
tory to the Trustee, the due and punctual payment of the principal of (and pre-
mium, if any) and interest on all the Securities and the performance of every
covenant of this Indenture on the part of the Company to be performed or ob-
served. Upon any such assumption, the Guarantor or such Subsidiary shall suc-
ceed to, and be substituted for and may exercise every right and power of, the
62
903,904,905
<PAGE>
Company under this Indenture with the same effect as if the Guarantor or such
Subsidiary had been named as the Company herein and the Company shall be re-
leased from its liability as obligor on the Securities. No such assumption
shall be permitted unless the Guarantor has delivered to the Trustee an Offi-
cers' Certificate and an Opinion of Counsel, each stating that such assumption
and supplemental indenture comply with this Article, and that all conditions
precedent herein provided for relating to such transaction have been complied
with and that, in the event of assumption by a Subsidiary, the Guarantees re-
main in full force and effect.
ARTICLE TEN
Supplemental Indentures
Section 1001. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company and the Guarantor, when au-
thorized by Board Resolutions, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form satis-
factory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company or the
Guarantor and the assumption by any such successor of the covenants of the
Company or the Guarantor herein and in the Securities or the Guarantees;
or
(2) to add to the covenants of the Company or the Guarantor for the ben-
efit of the Holders of all or any series of Securities (and if such cove-
nants are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the
benefit of such series) or to surrender any right or power herein con-
ferred upon the Company or the Guarantor; or
(3) to add any additional Events of Default or Defaults; or
(4) to add to or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of Secu-
rities in bearer form, registrable or not registrable as to principal, and
with or without interest coupons; or
(5) to add to, change or eliminate any of the provisions of this Inden-
ture in respect of one or more series of Securities, provided that any
such
63
905,1001
<PAGE>
addition, change or elimination (i) shall neither (A) apply to any Secu-
rity of any series created prior to the execution of such supplemental in-
denture and entitled to the benefit of such provision nor (B) modify the
rights of the Holder of any such Security with respect to such provision
or (ii) shall become effective only when there is no such Security Out-
standing; or
(6) to establish the form or terms of Securities of any series or the
form of Guarantees relating thereto as permitted by Sections 201 and 301;
or
(7) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee with respect to the Securities of one or more se-
ries and to add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, pursuant to the requirements of
Section 711(b);
(8) to cure any ambiguity, to correct or supplement any provision herein
which may be inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions arising under this
Indenture, provided that such action pursuant to this Clause (8) shall not
adversely affect the interests of the Holders of Securities of any series
in any material respect; or
(9) to effect assumption by the Guarantor or a Subsidiary thereof pursu-
ant to Section 905.
Section 1002. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of not less than 66 2/3% in principal amount
of the Outstanding Securities of each series affected by such supplemental in-
denture, by Act of said Holders delivered to the Company, the Guarantor and the
Trustee, the Company and the Guarantor, when authorized by a Board Resolution,
and the Trustee may enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to or changing in any manner or elimi-
nating any of the provisions of this Indenture or of modifying in any manner
the rights of the Holders of Securities of such series under this Indenture;
provided, however, that no such supplemental indenture shall, without the con-
sent of the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any instalment of
principal of or interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon (including any change in the
Floating or Adjustable Rate Provision pursuant to which such rate is de-
termined that
64
1001,1002
<PAGE>
would reduce such rate for any period) or any premium payable upon the re-
demption thereof, or reduce the amount of the principal of an Original Is-
sue Discount Security that would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 602, or change
any Place of Payment where, or the coin or currency in which, any Security
or any premium or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date), or modify the provisions of this Indenture with respect
to the subordination of the Securities and the Guarantees in a manner ad-
verse to the Holders, or
(2) reduce the percentage in principal amount of the Outstanding Securi-
ties of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for
any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 613 or Section
1107, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without
the consent of the Holder of each Outstanding Security affected thereby;
provided, however, that this clause shall not be deemed to require the
consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section and Article Eleven, or
the deletion of this proviso, in accordance with the requirements of Sec-
tions 711(b) and 1001(7), or
(4) modify or affect in any manner adverse to the Holders the terms and
conditions of the obligation of the Guarantor in respect of the due and
punctual payment of the principal of, premium, if any, or interest or
sinking fund payments, if any, on the Securities.
A supplemental indenture which changes or eliminates any covenant or other pro-
vision of this Indenture which has expressly been included solely for the bene-
fit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such cove-
nant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Persons entitled to consent to any indenture supple-
65
1002
<PAGE>
mental hereto. If a record date is fixed, the Holders on such record date, or
their duly designated proxies, and only such Persons, shall be entitled to con-
sent to such supplemental indenture, whether or not such Holders remain Holders
after such record date; provided, that unless such consent shall have become
effective by virtue of the requisite percentage having been obtained prior to
the date which is 90 days after such record date, any such consent previously
given shall automatically and without further action by any Holder be cancelled
and of no further effect.
It shall not be necessary for any Act of Holders under this Section to ap-
prove the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 1003. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and (sub-
ject to Section 701) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
Section 1004. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this In-
denture shall be modified in accordance therewith, and such supplemental inden-
ture shall form a part of this Indenture for all purposes; and every Holder of
Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 1005. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall conform
to the requirements of the Trust Indenture Act.
Section 1006. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any mat-
ter provided for in such supplemental indenture. If the Company or the Guaran-
tor
66
1002,1003,1004,1005,1006
<PAGE>
shall so determine, new Securities of any series so modified as to conform, in
the opinion of the Trustee and the Boards of Directors of the Company and the
Guarantor, to any such supplemental indenture may be prepared and executed by
the Company, with the Guarantee of the Guarantor endorsed thereon, and authen-
ticated and delivered by the Trustee in exchange for Outstanding Securities of
such series.
ARTICLE ELEVEN
Covenants
Section 1101. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of Securities
that it will duly and punctually pay the principal of (and premium, if any) and
interest on the Securities of that series in accordance with the terms of the
Securities of such series and this Indenture.
Section 1102. Maintenance of Office or Agency.
The Company or the Guarantor will maintain in each Place of Payment for any
series of Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange and where notices and de-
mands to or upon the Company or the Guarantor in respect of the Securities of
that series and the Guarantees relating thereto and this Indenture may be
served; provided, however, that at the option of the Company payment of inter-
est may be made by check mailed to the address of the Person entitled thereto
as such address shall appear in the Security Register. With respect to the Se-
curities of any series, such office or agency and each Place of Payment shall
be as specified as contemplated by Section 301. In the absence of any such pro-
visions with respect to the Securities of any series, (i) the Places of Payment
for such Securities shall be the City of Pittsburgh, Pennsylvania and the Bor-
ough of Manhattan, The City of New York (except that as to payment of interest
the City of Pittsburgh, Pennsylvania shall be the only Place of Payment) and
(ii) such office or agency for payment for Securities of such series shall ini-
tially be the principal office of the Bank in the City of Pittsburgh, Pennsyl-
vania and, with respect to principal (and premium, if any) only, the Trustee's
agent office in the Borough of Manhattan, The City of New York, and such office
or agency for surrender for registration of transfer or exchange of and for
service of notices and demands in respect of Securities of such series shall
initially be the principal office of the
67
1006,1101,1102
<PAGE>
Bank in the City of Pittsburgh, Pennsylvania and the Bank's facility in the
Borough of Manhattan, The City of New York. The Company and the Guarantor will
give prompt written notice to the Trustee of the location, and any change in
the location, of any such office or agency. If at any time the Company and the
Guarantor shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations, sur-
renders, notices and demands may be made or served at the Corporate Trust Of-
fice of the Trustee, and the Company and the Guarantor each hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company and the Guarantor may also from time to time designate one or
more other offices or agencies where the Securities of one or more series may
be presented or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company or the Guarantor of its ob-
ligation to maintain an office or agency in each Place of Payment for Securi-
ties of any series for such purposes. The Company and the Guarantor will give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
Section 1103. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect to
any series of Securities, it will, on or before each due date of the principal
of (and premium, if any) or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal (and premium, if any) or interest so becom-
ing due until such sums shall be paid to such Persons or otherwise disposed of
as herein provided and will promptly notify the Trustee of its action or fail-
ure so to act.
Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, prior to each due date of the principal of (and premium,
if any) or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act and (unless such Paying Agent is the Trustee) the Com-
pany will promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will (i) comply with the provisions of the
Trust Indenture Act applicable to it as a Paying Agent and (ii) during the
contin-
68
1102,1103
<PAGE>
uance of any default by the Company or the Guarantor (or any other obligor upon
the Securities of that series) in the making of any payment in respect of the
Securities of that series, and upon the written request of the Trustee, forth-
with pay to the Trustee all sums held in trust by such Paying Agent for payment
in respect of the Securities of that series.
The Company or the Guarantor may at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture or for any other purpose, pay,
or by Company Order or Guarantor Order, as the case may be, direct any Paying
Agent to pay, to the Trustee all sums held in trust by the Company or such Pay-
ing Agent, such sums to be held by the Trustee upon the same trusts as those
upon which such sums were held by the Company or such Paying Agent; and, upon
such payment by any Paying Agent to the Trustee, such Paying Agent shall be re-
leased from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of (and premium, if any) or
interest on any Security of any series and remaining unclaimed for three years
after such principal (and premium, if any) or interest has become due and pay-
able shall be paid to the Company on Company Request (or if deposited by the
Guarantor, paid to the Guarantor on Guarantor Request), or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company
and the Guarantor for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease; provided, however, that the Trustee
or such Paying Agent, before being required to make any such repayment, may at
the expense of the Company cause to be published once, in a newspaper published
in the English language, customarily published on each Business Day and of gen-
eral circulation in the Borough of Manhattan, The City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company or the Guar-
antor, as the case may be.
Section 1104. Corporate Existence.
Subject to Article Nine, the Company and the Guarantor will do or cause to be
done all things necessary to preserve and keep in full force and effect their
respective corporate existences and that of the Bank and their respective
rights (charter and statutory) and franchises and those of the Bank; provided,
however, that neither the Company, the Guarantor, nor the Bank shall be re-
quired to
69
1103,1104
<PAGE>
preserve any such right or franchise if the Company, the Guarantor or the Bank,
as the case may be, shall determine that the preservation thereof is no longer
desirable in the conduct of its business and that the loss thereof is not dis-
advantageous in any material respect to the Holders.
Section 1105. Company Statement as to Compliance.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year, a written statement, which need not comply with Section 102,
signed by the Chairman of the Board, a Vice Chairman, the President or a Vice
President and by the Treasurer or an Assistant Treasurer of the Company, stat-
ing, as to each signer thereof, that
(1) a review of the activities of the Company during such year and of
performance under this Indenture has been made under his supervision, and
(2) to the best of his knowledge, based on such review, (a) the Company
has fulfilled all its obligations under this Indenture throughout such
year, or, if there has been a default in the fulfillment of any such obli-
gation, specifying each such default known to him and the nature and sta-
tus thereof, and (b) no event has occurred and is continuing which is, or
after notice or lapse of time or both would become, an Event of Default
under Section 601, or a Default under Section 603, or, if such an event
has occurred and is continuing, specifying each such event known to him
and the nature and status thereof.
Section 1106. Guarantor Statement as to Compliance.
The Guarantor will deliver to the Trustee, within 120 days after the end of
each fiscal year, a written statement, which need not comply with Section 102,
signed by the Chairman of the Board, a Vice Chairman, the President or a Vice
President and by the Treasurer or an Assistant Treasurer of the Guarantor,
stating, as to each signer thereof, that
(1) a review of the activities of the Guarantor during such year and of
performance under this Indenture has been made under his supervision, and
(2) to the best of his knowledge, based on such review, (a) the Guaran-
tor has fulfilled all its obligations under this Indenture throughout such
year, or, if there has been a default in the fulfillment of any such obli-
gation, specifying each such default known to him and the nature and sta-
tus thereof, and (b) no event has occurred and is continuing which is, or
after notice or lapse of time or both would become, an Event of Default
under Section 601,
70
1104,1105,1106
<PAGE>
or a Default under Section 603 or, if such an event has occurred and is
continuing, specifying each such event known to him and the nature and
status thereof.
Section 1107. Limitation Upon Disposition of Voting Stock of Company.
So long as any of the Securities shall be Outstanding, but subject to the
provisions of Article Nine, the Guarantor will not sell, assign, transfer,
grant a security interest in or otherwise dispose of any shares of, securities
convertible into or options, warrants or rights to subscribe for or purchase
shares of, Voting Stock of the Company, nor will it permit the Company (or any
successor thereto) (a) to issue, except to the Guarantor, any shares of, secu-
rities convertible into or options, warrants or rights to subscribe for or pur-
chase shares of, Voting Stock of the Company, (b) to merge or consolidate with
another Person, other than the Guarantor, or (c) to sell, assign, transfer,
grant a security interest in or otherwise dispose of or lease all or substan-
tially all of the assets of the Company.
Section 1108. Waiver of Certain Covenants.
The Company or the Guarantor, as the case may be, may omit in any particular
instance to comply with any covenant or condition set forth in Sections 1104
and 1107 with respect to the Securities of any series if before the time for
such compliance the Holders of at least 66 2/3% in principal amount of the Out-
standing Securities of such series shall, by Act of such Holders, either waive
such compliance in such instance or generally waive compliance with such cove-
nant or condition, but no such waiver shall extend to or affect such covenant
or condition except to the extent so expressly waived, and, until such waiver
shall become effective, the obligations of the Company and the Guarantor and
the duties of the Trustee in respect of any such covenant or condition shall
remain in full force and effect.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Persons entitled to waive any such term, provision
or condition. If a record date is fixed, the Holders on such record date, or
their duly designated proxies, and only such Persons, shall be entitled to
waive any such term, provision or condition hereunder, whether or not such
Holders remain Holders after such record date; provided, that unless the Hold-
ers of at least 66 2/3% in principal amount of the Outstanding securities of
such series shall have waived such term, provision or condition prior to the
date which is 90 days after such record date, any such waiver previously given
shall automatically and without further action by any Holder be cancelled and
of no further effect.
71
1106,1107,1108
<PAGE>
ARTICLE TWELVE
Redemption of Securities
Section 1201. Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for Securities of any series) in ac-
cordance with this Article.
Section 1202. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities of any series pursuant
to Section 1201 shall be evidenced by a Board Resolution. In case of any re-
demption at the election of the Company of less than all the Securities of any
series, the Company shall, at least 60 days prior to the Redemption Date fixed
by the Company (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee of such Redemption Date, of the principal amount of Securi-
ties of such series to be redeemed and, if applicable, of the tenor of the Se-
curities to be redeemed. In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such restric-
tion.
Section 1203. Selection by Security Registrar of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed, the Company
and the Guarantor shall cause the particular Securities of such series to be
redeemed to be selected not more than 60 days prior to the Redemption Date by
the Security Registrar, from the Outstanding Securities of such series not pre-
viously called for redemption, at random or by such method as the Security Reg-
istrar shall deem fair and appropriate, and which may provide for the selection
for redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series.
The Company and the Guarantor shall cause the Security Registrar promptly to
notify the Company and the Trustee in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.
72
1201,1202,1203
<PAGE>
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
Section 1204. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at his address appearing in the Secu-
rity Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption of
any Securities, the principal amounts) of the particular Securities of
such series to be redeemed, from the Holder to whom such notice is given,
(4) that on the Redemption Date the Redemption Price will become due and
payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(5) the place or places where such Securities are to be surrendered for
payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of the Com-
pany shall be given by the Company or, at the Company's request, by the Secu-
rity Registrar in the name and at the expense of the Company.
Section 1205. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the Trustee or
with a Paying Agent (or, if the Company is acting as its own Paying Agent, seg-
regate and hold in trust as provided in Section 1103) an amount of money suffi-
cient to pay the Redemption Price of, and (except if the Redemption Date shall
be an Interest Payment Date) accrued interest on, all the Securities of the
particular series or portions thereof which are to be redeemed on that date.
73
1203,1204,1205
<PAGE>
Section 1206. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemp-
tion Price therein specified, and from and after such date (unless the Company
shall default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest. Upon surrender of any such Security
for redemption in accordance with said notice, such Security shall be paid by
the Company at the Redemption Price, together with accrued interest to the Re-
demption Date; provided, however, that, unless otherwise specified as contem-
plated by Section 301, instalments of interest whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders of such Securi-
ties, or one or more Predecessor Securities, registered as such at the close of
business on the relevant Record Dates according to their terms and the provi-
sions of Section 307.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, subject to
Section 113, until paid, bear interest from the Redemption Date at the rate
prescribed therefor in the Security.
Section 1207. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered. If a Global Security is so surrendered, such new
Security so issued shall be a new Global Security.
ARTICLE THIRTEEN
Sinking Funds
Section 1301. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series except as otherwise specified as con-
templated by Section 301 for Securities of such series.
74
1206,1207,1301
<PAGE>
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 1302. Each sinking fund payment shall be applied to the redemption
of Securities of any series as provided for by the terms of Securities of such
series.
Section 1302. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver to the Trustee for cancellation Outstanding Secu-
rities of a series (other than any previously called for redemption) and (2)
may apply as a credit Securities of a series which have been redeemed either at
the election of the Company pursuant to the terms of such Securities or through
the application of permitted optional sinking fund payments pursuant to the
terms of such Securities, in each case in satisfaction of all or any part of
any sinking fund payment with respect to the Securities of such series required
to be made pursuant to the terms of such Securities as provided for by the
terms of such Securities; provided that such Securities have not been previ-
ously so credited. Such Securities shall be received and credited for such pur-
pose by the Trustee at the Redemption Price specified in such Securities for
redemption through operation of the sinking fund and the amount of such sinking
fund payment shall be reduced accordingly.
Section 1303. Redemption of Securities for Sinking Fund.
Not less than 75 days prior to each sinking fund payment date for any series
of Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities of that series pursuant to
Section 1302 and will also deliver to the Trustee any Securities to be so de-
livered if not theretofor delivered. Not less than 60 days before each such
sinking fund payment date the Company and the Guarantor shall cause to be se-
lected the Securities to be redeemed upon such sinking fund payment date in the
manner specified in Section 1203 and shall cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the
manner provided in Section 1204. The Company shall deposit the amount of cash,
if any, required for such sinking fund payment with the Trustee or a Paying
Agent in the manner
75
1301,1302,1303
<PAGE>
provided in Section 1205. Such notice having been duly given, the redemption of
such Securities shall be made upon the terms and in the manner stated in Sec-
tions 1206 and 1207.
ARTICLE FOURTEEN
Subordination of Securities and Guarantees
Section 1401. Securities Subordinate to Senior Indebtedness of the Company.
The Company covenants and agrees that anything in this Indenture or the Secu-
rities of any series to the contrary notwithstanding, the indebtedness evi-
denced by the Securities of each series is subordinate and junior in right of
payment to all Senior Indebtedness of the Company to the extent provided here-
in, and each Holder of Securities of each series, by his acceptance thereof,
likewise covenants and agrees to the subordination herein provided and shall be
bound by the provisions hereof. Senior Indebtedness of the Company shall con-
tinue to be Senior Indebtedness of the Company and entitled to the benefits of
these subordination provisions irrespective of any amendment, modification or
waiver of any term of the Senior Indebtedness of the Company or extension or
renewal of the Senior Indebtedness of the Company.
In the event that the Company shall default in the payment of any principal
of (or premium, if any) or interest on any Senior Indebtedness of the Company
when the same becomes due and payable, whether at maturity or at a date fixed
for prepayment or by declaration or otherwise, then, upon written notice of
such default to the Company by the holders of Senior Indebtedness or any
trustee therefor, unless and until such default shall have been cured or waived
or shall have ceased to exist, no direct or indirect payment (in cash, proper-
ty, securities, by set-off or otherwise) shall be made or agreed to be made on
account of the principal of or interest on any of the Securities, or in respect
of any redemption, retirement, purchase or other acquisition of any of the Se-
curities.
In the event of
(a) any insolvency, bankruptcy, receivership, liquidation, reorganiza-
tion, readjustment, composition or other similar proceeding relating to
the Company, its creditors or its property,
(b) any proceeding for the liquidation, dissolution or other winding up
of the Company, voluntary or involuntary, whether or not involving insol-
vency or bankruptcy proceedings,
(c) any assignment by the Company for the benefit of creditors, or
(d) any other marshalling of the assets of the Company,
76
1303,1401
<PAGE>
all Senior Indebtedness of the Company (including any interest thereon accruing
after the commencement of any such proceedings) shall first be paid in full be-
fore any payment or distribution, whether in cash, securities or other proper-
ty, shall be made to any Holder of any of the Securities on account thereof.
Any payment or distribution, whether in cash, securities or other property
(other than securities of the Company or any other corporation provided for by
a plan of reorganization or readjustment the payment of which is subordinate,
at least to the extent provided in these subordination provisions with respect
to the indebtedness evidenced by the Securities, to the payment of all Senior
Indebtedness of the Company at the time outstanding and to any securities is-
sued in respect thereof under any such plan of reorganization or readjustment),
which would otherwise (but for these subordination provisions) be payable or
deliverable in respect of the Securities of any series shall be paid or deliv-
ered directly to the holders of Senior Indebtedness of the Company in accor-
dance with the priorities then existing among such holders until all Senior In-
debtedness of the Company (including any interest thereon accruing after the
commencement of any such proceedings) shall have been paid in full.
In the event that, notwithstanding the foregoing, any payment or distribution
of any character or any security, whether in cash, securities or other property
(other than securities of the Company or any other corporation provided for by
a plan of reorganization or readjustment the payment of which are subordinate,
at least to the extent provided in these subordination provisions with respect
to the indebtedness evidenced by the Securities, to the payment of all Senior
Indebtedness of the Company at the time outstanding and to any securities is-
sued in respect thereof under any such plan of reorganization or readjustment),
shall be received by the Trustee or any Holder in contravention of any of the
terms hereof such payment or distribution or security shall be received in
trust for the benefit of, and shall be paid over or delivered and transferred
to, the holders of the Senior Indebtedness of the Company at the time outstand-
ing in accordance with the priorities then existing among such holders for ap-
plication to the payment of all Senior Indebtedness of the Company remaining
unpaid, to the extent necessary to pay all such Senior Indebtedness of the Com-
pany in full. In the event of the failure of the Trustee or any Holder to en-
dorse or assign any such payment, distribution or security, each holder of Se-
nior Indebtedness of the Company is hereby irrevocably authorized to endorse or
assign the same.
No present or future holder of any Senior Indebtedness of the Company shall
be predjudiced in the right to enforce subordination of the indebtedness evi-
denced by the Securities by any act or failure to act on the part of the Compa-
ny. Nothing contained herein shall impair, as between the Company and the Hold-
ers of Securities of each series, the obligation of the Company to pay to such
77
1401
<PAGE>
Holders the principal of and interest on such Securities or prevent the Trustee
or the Holder from exercising all rights, powers and remedies otherwise permit-
ted by applicable law or hereunder upon a Default or Event of Default hereun-
der, all subject to the rights of the holders of the Senior Indebtedness of the
Company to receive cash, securities or other property otherwise payable or de-
liverable to the Holders.
Senior Indebtedness of the Company shall not be deemed to have been paid in
full unless the holders thereof shall have received cash, securities or other
property equal to the amount of such Senior Indebtedness of the Company then
outstanding. Upon the payment in full of all Senior Indebtedness of the Compa-
ny, the Holders of Securities of each series shall be subrogated to all rights
of any holders of Senior Indebtedness of the Company to receive any further
payments or distributions applicable to the Senior Indebtedness of the Company
until the indebtedness evidenced by the Securities of such series shall have
been paid in full, and such payments or distributions received by such Holders,
by reason of such subrogation, of cash, securities or other property which oth-
erwise would be paid or distributed to the holders of Senior Indebtedness of
the Company, shall, as between the Company and its creditors other than the
holders of Senior Indebtedness of the Company, on the one hand, and such Hold-
ers, on the other hand, be deemed to be a payment by the Company on account of
Senior Indebtedness of the Company, and not on account of the Securities of
such series.
The Trustee and Holders will take such action (including, without limitation,
the delivery of this Indenture to an agent for the holders of Senior Indebted-
ness of the Company or consent to the filing of a financing statement with re-
spect thereto) as may, in the opinion of counsel designated by the holders of a
majority in principal amount of the Senior Indebtedness of the Company at the
time outstanding, be necessary or appropriate to assure the effectiveness of
the subordination effected by these provisions.
Section 1402. Guarantees Subordinate to Senior Indebtedness of the Guarantor.
The Guarantor covenants and agrees that, anything in this Indenture, the Se-
curities or the Guarantees to the contrary notwithstanding, the obligations of
the Guarantor under the Guarantees relating to payment of principal of and in-
terest on the Securities are subordinate and junior in right of payment to all
Senior Indebtedness of the Guarantor to the extent provided herein, and each
Holder, by his acceptance thereof, likewise covenants and agrees to the subor-
dination herein provided and shall be bound by the provisions hereof. Senior
Indebtedness of the Guarantor shall continue to be Senior Indebtedness of the
Guarantor and entitled to the benefits of these subordination provisions irre-
spective of any amendment, modification or waiver of any term of the Senior
78
1401,1402
<PAGE>
time outstanding, be necessary or appropriate to assure the effectiveness of
the subordination effected by these provisions.
Section 1403. Trustee and Holders of Securities May Rely on Certificate of
Liquidating Agent; Trustee May Require Further Evidence as to
Ownership of Senior Indebtedness; Trustee Not Fiduciary to
Holders of Senior Indebtedness.
Upon any payment or distribution of assets of the Company or the Guarantor
referred to in this Article Fourteen, the Trustee and the Holders shall be en-
titled to rely upon an order or decree made by any court of competent juris-
diction in which such dissolution or winding up or liquidation or reorganiza-
tion or arrangement proceedings are pending or upon a certificate of the
trustee in bankruptcy, receiver, assignee for the benefit of creditors or
other person making such payment or distribution, delivered to the Trustee or
to the Holders, for the purpose of ascertaining the persons entitled to par-
ticipate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Company, the Senior Indebtedness and other indebted-
ness of the Guarantor, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article Fourteen. In the absence of any such bankruptcy trustee, re-
ceiver, assignee or other person, the Trustee shall be entitled to rely upon a
written notice by a Person representing himself to be a holder of Senior In-
debtedness of the Company or the Guarantor (or a trustee or representative on
behalf of such Holder) as evidence that such Person is a holder of such Senior
Indebtedness (or is such a trustee or representative). In the event that the
Trustee determines, in good faith, that further evidence is required with re-
spect to the right of any person as a holder of Senior Indebtedness of the
Company or Senior Indebtedness of the Guarantor to participate in any payments
or distributions pursuant to this Article Fourteen, the Trustee may request
such person to furnish evidence to the reasonable satisfaction of the Trustee
as to the amount of Senior Indebtedness of the Company or Senior Indebtedness
of the Guarantor, as the case may be, held by such person, as to the extent to
which such person is entitled to participate in such payment or distribution,
and as to other facts pertinent to the rights of such person under this Arti-
cle Fourteen, and if such evidence is not furnished, the Trustee may offer any
payment to such person pending judicial determination as to the right of such
person to receive such payment. The Trustee, however, shall not be deemed to
owe any fiduciary duty to the holders of Senior Indebtedness of the Company or
Senior Indebtedness of the Guarantor.
Section 1404. Payment Permitted If No Default.
Nothing contained in this Article Fourteen or elsewhere in this Indenture,
or in any of the Securities or the Guarantees, shall prevent (a) the Company,
at
79
1402,1403,1404
<PAGE>
In the event that, notwithstanding the foregoing, any payment or distribution
under the Guarantees of any character or any security, whether in cash, securi-
ties or other property (other than securities of the Guarantor or any other
corporation provided for by a plan of reorganization or readjustment the pay-
ment of which is subordinate, at least to the extent provided in these subordi-
nation provisions with respect to the Guarantees, to the payment of all Senior
Indebtedness of the Guarantor at the time outstanding and to any securities is-
sued in respect thereto under any such plan of reorganization or readjustment),
shall be received by the Trustee or any Holder of any of the Securities in con-
travention of any of the terms hereof, such payment or distribution or security
shall be received in trust for the benefit of, and shall be paid over or deliv-
ered and transferred to, the holders of the Senior Indebtedness of the Guaran-
tor at the time outstanding in accordance with the priorities then existing
among such holders for application to the extent necessary to pay all such Se-
nior Indebtedness of the Guarantor in full. In the event of the failure of the
Trustee or any Holder to endorse or assign any such payment, distribution or
security, each holder of Senior Indebtedness of the Guarantor is hereby irrevo-
cably authorized to endorse or assign the same.
No present or future holder of any Senior Indebtedness of the Guarantor shall
be prejudiced in the right to enforce subordination of the Guarantees by any
act or failure to act on the part of the Guarantor. Nothing contained herein
shall impair, as between the Guarantor and the Holders, the obligation of the
Guarantor under the Guarantees, which is absolute and unconditional, to pay to
the Holders of Securities of each series the principal of and interest on the
Securities of such series, as and when the same shall become due and payable,
or prevent the Trustee or the Holders of Securities of such series from exer-
cising all rights, powers and remedies otherwise permitted by applicable law or
hereunder upon a Default or Event of Default hereunder, all subject to the
rights of the holders of the Senior Indebtedness of the Guarantor to receive
cash, securities or other property otherwise payable or deliverable under the
Guarantees to such Holders.
Senior Indebtedness of the Guarantor shall not be deemed to have been paid in
full unless the holders thereof shall have received cash, securities or other
property equal to the amount of such Senior Indebtedness of the Guarantor then
outstanding. Upon the payment in full of all Senior Indebtedness of the Guaran-
tor, the Trustee and the Holders of Securities of each series shall be
subrogated to all rights of any holders of Senior Indebtedness of the Guarantor
to receive any further payments or distributions applicable to the Senior In-
debtedness of the Guarantor until the Securities of such series shall have been
paid in full, and such payments or distributions received by the Trustee and
the Holders of Securities of such series by reason of such subrogation, of
cash, securities or other property which otherwise would be paid or distributed
to the holders of Senior
80
1402
<PAGE>
for which they were received and shall not be affected by any notice to the
contrary which may be received by it on or after such date. The Company and
the Guarantor shall give prompt written notice to the Trustee and to the Pay-
ing Agent of any facts which would prohibit the payment of monies to or by the
Trustee or any Paying Agent.
Section 1406. Trustee to Effectuate Subordination.
Each Holder of Securities by his acceptance thereof authorizes and directs
the Trustee in his behalf to take such action as may be necessary or appropri-
ate to effectuate the subordination as between such Holder and holders of Se-
nior Indebtedness of the Company or the Guarantor, as the case may be, as pro-
vided in this Article and appoints the Trustee its attorney-in-fact for any
and all such purposes.
Section 1407. Rights of Trustee as Holder of Senior Indebtedness of the
Company or Senior Indebtedness of the Guarantor.
The Trustee shall be entitled to all the rights set forth in this Article
with respect to any Senior Indebtedness of the Company or Senior Indebtedness
of the Guarantor which may at the time be held by it, to the same extent as
any other holder of Senior Indebtedness of the Company or Senior Indebtedness
of the Guarantor; provided that nothing in this Indenture shall deprive the
Trustee of any of its rights as such holder and provided further that nothing
in this Article shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 707.
Section 1408. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article shall in such case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if the Paying Agent were
named in this Article in addition to or in place of the Trustee; provided,
however, that Sections 1405 and 1407 shall not apply to the Company or the
Guarantor or any Affiliate of the Company or the Guarantor if the Company or
the Guarantor or such Affiliate acts as Paying Agent.
This instrument may be executed in any number of counterparts, each of which
so executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
81
1405,1406,1407,1408
<PAGE>
In Witness Whereof, the parties hereto have caused this Indenture to be duly
executed, and their respective corporate seals to be hereunto affixed and at-
tested, all as of the day and year first above written.
Mellon Financial Company
[Corporate Seal]
By......................................
President and
Chief Executive Officer
Attest:
........................................
Secretary
Mellon Bank Corporation
[Corporate Seal]
By......................................
Vice Chairman,
Chief Financial Officer
and Treasurer
Attest:
........................................
Secretary
First Interstate Bank, of California
By......................................
Vice President
82
<PAGE>
Commonwealth of Pennsylvania )
County of Allegheny )
ss:
On the day of August, 1995, before me personally came Steven G. Elliott,
to me known, who, being by me duly sworn, did depose and say that he is Presi-
dent and Chief Executive Officer of Mellon Financial Company, one of the cor-
porations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like au-
thority.
[Notarial Seal]
Notary Public
Commonwealth of Pennsylvania )
County of Allegheny ) ss:
On the day of August, 1995, before me personally came Steven G. Elli-
ott, to me known, who, being by me duly sworn, did depose and say that he is
Vice Chairman, Chief Financial Officer and Treasurer of Mellon Bank Corpora-
tion, one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation, and that he signed his name
thereto by like authority.
[Notarial Seal]
Notary Public
83
<PAGE>
1405 and 1407 shall not apply to the Company or the Guarantor or any Affiliate
of the Company or the Guarantor if the Company or the Guarantor or such
Affiliate acts as Paying Agent.
This instrument may be executed in any number of counterparts, each of which
so executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
In Witness Whereof, the parties hereto have caused this Indenture to be duly
executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Mellon Financial Company
[Corporate Seal]
/s/ Steven G. Elliott
By.....................................
President and Chief Executive Officer
Attest:
/s/ Carole C. Wise
.......................................
Secretary
Mellon Bank Corporation
[Corporate Seal]
/s/ Steven G. Elliott
By.....................................
Vice Chairman, Chief Financial Officer
and Treasurer
Attest:
/s/ James M. Gockley
.......................................
Secretary
First Interstate Bank of California,
as Trustee
/s/ Donald R. McEachren
By.....................................
Vice President
1408 84
<PAGE>
Commonwealth of Pennsylvania )
County of Allegheny ) ss:
On the 25th day of August, 1995, before me personally came Steven G. Elliott,
to me known, who, being by me duly sworn, did depose and say that he is
President and Chief Executive Officer of Mellon Financial Company, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
[Notarial Seal]
/s/ Judith-Ann Ayoub
-------------------------
Notary Public
Notarial Seal Judith-Ann
Ayoub, Notary Public Pitts-
burgh, Allegheny County My
Commission Expires May 29,
1999
Member, Pennsylvania Association
of Notaries
Commonwealth of Pennsylvania )
County of Allegheny ) ss:
On the 25th day of August, 1995, before me personally came Steven G. Elliott,
to me known, who, being by me duly sworn, did depose and say that he is Vice
Chairman, Chief Financial Officer and Treasurer of Mellon Bank Corporation,
one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation, and that he signed his name
thereto by like authority.
[Notarial Seal]
/s/ Judith-Ann Ayoub
-------------------------
Notary Public
Notarial Seal Judith-Ann
Ayoub, Notary Public Pitts-
burgh, Allegheny County My
Commission Expires May 29,
1999
Member, Pennsylvania Association
of Notaries
85
<PAGE>
State of California County of Los Angeles ss:
On August 25, 1995 before me, Sheila Harding, Notary Public, personally ap-
peared D. R. McEachren [X] personally known to me or [_] proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are sub-
scribed to the within instrument and acknowledged to me that he/she/they exe-
cuted the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
Witness my hand and official seal.
Sheila Harding
[Notarial Seal]
SHEILA HARDING
Comm. #971942 Notary Public-Cali-
fornia Los Angeles County
My Comm. Expires Aug. 23, 1996
86
<PAGE>
EX-5.1 and EX-23.1
August 25, 1995
Mellon Bank Corporation
500 Grant Street
Pittsburgh, PA 15258
Re: Mellon Bank Corporation
Mellon Financial Company
Debt Securities Registration Statement on Form S-3
Gentlemen:
I am the Assistant General Counsel of Mellon Bank Corporation, a Pennsylvania
corporation (the "Corporation"), and, in that capacity, have acted as counsel
for the Corporation and for the Corporation's wholly owned subsidiary, Mellon
Financial Company (the "Company"), in connection with the preparation of a
Registration Statement on Form S-3 (the "Registration Statement") relating to
the proposed offering of up to $1.5 billion aggregate principal amount of debt
securities to be issued from time to time by the Company (the "Debt Securities")
and guaranteed as to payment of principal, premium, if any, and interest, if
any, by the Corporation (the "Guarantees"). The Debt Securities will constitute
either senior indebtedness of the Company (the "Senior Securities") or
subordinated indebtedness of the Company (the "Subordinated Securities"). The
Senior Securities and the related Guarantees are to be issued under an Indenture
dated as of May 2, 1988, as supplemented by the First Supplemental Indenture
dated as of November 29, 1990 (the "Senior Indenture"), among the Company, the
Corporation and The Chase Manhattan Bank (National Association), as Trustee. The
Subordinated Securities and the related Guarantees are to be issued under a
Subordinated Indenture dated as of August 25, 1995 (the "Subordinated
Indenture"), among the Company, the Corporation and First Interstate Bank of
California, as Trustee. The Senior Indenture and the Subordinated Indenture are
collectively referred to herein as the "Indentures". This opinion is being
furnished pursuant to the requirements of Form S-3 and Item 601 of Regulation
S-K under the Securities Act of 1933, as amended.
<PAGE>
Mellon Bank Corporation
August 25, 1995
Page 2
In furnishing this opinion, I have examined the Registration Statement, as well
as the prospectus included therein (the "Prospectus"), to be filed with the
Securities and Exchange Commission, in connection with which this opinion is to
be filed as an Exhibit. I have also examined the Senior Indenture, the
Subordinated Indenture and such other documents, legal opinions and precedents,
corporate and other records of the Company and the Corporation and certificates
of public officials and officers of the Company and the Corporation as I have
deemed necessary or appropriate to provide a basis for the opinions set forth
herein. In such examination, I have assumed the genuineness of all signatures,
the authenticity of all documents submitted to me as originals and the
conformity to original documents of all documents submitted to me as certified
or photostatic copies.
Based upon the foregoing, I am of the opinion that:
1. The Company and the Corporation have been duly incorporated and are
validly existing as corporations under the laws of the Commonwealth of
Pennsylvania;
2. The Registration Statement has been duly authorized by all necessary
corporate action of the Company and the Corporation, respectively;
3. The Debt Securities, when (i) the terms thereof have been duly
authorized and such securities have been duly executed and authenticated,
all pursuant to the Indentures and (ii) issued, sold and delivered as
contemplated by the Prospectus against payment therefor, will constitute
valid and legally binding obligations of the Company entitled to the
benefits provided by the Indentures;
4. The Guarantees, when endorsed upon the Debt Securities and duly
executed and upon the due execution, authentication and issuance of the
Debt Securities, will constitute valid and legally binding obligations of
the Corporation entitled to the benefits provided by the Indentures;
5. The Senior Indenture has been duly authorized by all necessary
corporate action on behalf of the Company and the Corporation and
constitutes a valid and legally binding instrument; and
<PAGE>
Mellon Bank Corporation
August 25, 1995
Page 3
6. The Subordinated Indenture has been duly authorized by all necessary
corporate action on behalf of the Company and the Corporation and
constitutes a valid and legally binding instrument.
The opinions set forth in paragraphs 3 through 6 hereof are qualified to the
extent that the obligations of the Company and the Corporation may be limited by
bankruptcy, moratorium, insolvency, reorganization or other laws of general
applicability relating to or affecting the enforcement of creditors' rights, and
by general equity principles.
I hereby consent to the filing of this opinion as an Exhibit to the Registration
Statement and to the use of my name in the Prospectus under the heading
"Validity of Debt Securities and Guarantees." By giving such consent, I do not
thereby admit that I am within the category of persons whose consents are
required under Section 7 of the Securities Act of 1933, as amended.
Very truly yours,
JAMES M. GOCKLEY
<PAGE>
EX-8.1 and EX-23.2
August 23, 1995
Mellon Bank Corporation
500 Grant Street
Pittsburgh, PA 15258
Re: Mellon Bank Corporation
Mellon Financial Company
Debt Securities Registration Statement on Form S-3
Gentlemen:
I am the Senior Vice President, Controller and Director of Taxes of Mellon Bank,
N.A., the principal subsidiary of Mellon Bank Corporation, a Pennsylvania
corporation (the "Corporation"). In that capacity, I am responsible for the
corporate tax affairs of the Corporation and its subsidiaries, and I have acted
as tax counsel for the Corporation in connection with the preparation of a
Registration Statement on Form S-3 (the "Registration Statement"), including the
prospectus (the "Prospectus") contained therein as filed with the Securities and
Exchange Commission.
I hereby confirm my opinion as set forth under the heading "Certain Tax
Considerations" in the Prospectus.
I hereby consent to the filing of this opinion as an Exhibit to the Registration
Statement and to the use of my name in the Prospectus under the heading
"Validity of Debt Securities and Guarantees." By giving such consent, I do not
thereby admit that I am within the category of the persons whose consents are
required under Section 7 of the Securities Act of 1933, as amended.
Very truly yours,
MICHAEL K. HUGHEY
<PAGE>
Ex-12.1
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND RATIO
OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
Mellon Bank Corporation
(parent Corporation)(a)
<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------------------------------------------
(dollar amounts in thousands) 1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
1. Income before income taxes and
equity in undistributed net
income (loss) of subsidiaries $434,035 $224,869 $137,594 $145,777 $112,669 (c)
2. Fixed charges: interest expense,
one-third of rental expense net
of income from subleases, and
amortization of debt issuance costs 95,193 110,739 79,709 103,001 149,446
-------- -------- -------- -------- --------
3. Income before income taxes
and equity in undistributed
net income (loss) of subsidiaries,
plus fixed charges (line 1 + line 2) $529,228 $335,608 $217,303 $248,778 $262,115
======== ======== ======== ======== ========
4. Preferred stock dividend
requirements (b) $124,260 $103,792 $ 61,197 $ 57,618 $ 58,951
======== ======== ======== ======== ========
5. Ratio of earnings (as defined)
to fixed charges
(line 3 divided by line 2) 5.56 3.03 2.73 2.42 1.75 (c)
6. Ratio of earnings (as defined)
to combined fixed charges and
preferred stock dividends
[line 3 divided by
(line 2 + line 4)] 2.41 1.56 1.54 1.55 1.26 (c)
</TABLE>
------------------
(a) The parent Corporation ratios include the accounts of Mellon Bank
Corporation (the "Corporation") and Mellon Financial Company, a wholly
owned subsidiary of the Corporation that functions as a financing entity
for the Corporation and its subsidiaries by issuing commercial paper and
other debt guaranteed by the Corporation. For purposes of computing these
ratios, earnings represent parent Corporation income before taxes and
equity in undistributed net income (loss) of subsidiaries, plus the fixed
charges of the parent Corporation. Fixed charges represent interest
expense, one-third (the proportion deemed representative of the interest
factor) of rental expense net of income from subleases, and amortization
of debt issuance costs. Because the ratio excludes from earnings the equity
in undistributed net income (loss) of subsidiaries, the ratio varies with
the payment of dividends by such subsidiaries.
(continued)
<PAGE>
Ex-12.1
(continued)
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND RATIO
OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
Mellon Bank Corporation
(parent Corporation)(a)
(b) Preferred stock dividend requirements for all years presented represent the
pretax amount required to cover preferred stock dividends. Series K
Nonredeemable Preferred Stock was issued on January 25, 1993; Series J
Nonredeemable Preferred Stock was issued on January 21, 1992; Series I
Nonredeemable Preferred Stock was issued August 8, 1991 and Series H
Nonredeemable Preferred Stock was issued March 29, 1990. Accordingly,
preferred stock dividends were not accrued for these securities prior to
their respective issue dates. In the first quarter of 1990, common stock was
issued in exchange for approximately 83% of the outstanding shares of Series
D preferred stock in order to avoid exceeding the limitation on the amount
of preferred stock that could qualify as Tier I capital under the Federal
Reserve Board's 1992 risk-based capital regulations. The remaining Series D
preferred stock was converted to common stock in the third quarter of 1994.
The Series C-1 Stated Rate Auction Preferred Stock was redeemed on July 18,
1990, the Series A Redeemable Preferred Stock was redeemed on July 19, 1991,
the Series G preferred stock was redeemed on November 15, 1991, the
Series C-2 State Rate Auction Preferred Stock was redeemed on November 16,
1992 and the Series B preferred stock was redeemed on December 1, 1993.
Accordingly, preferred stock dividends were not accrued for these securities
subsequent to their respective redemption dates. In December 1994, the
Corporation announced its commitment to redeem the Series H preferred stock
on March 1, 1995. Preferred stock dividends for 1994 include $16 million for
the Series H redemption premium, the write-off of unamortized issuance costs
and dividends accrued through the redemption date.
(c) The ratio of earnings to fixed charges and the ratio of earnings to combined
fixed charges and preferred stock dividends for the year ended December 31,
1990, exclude from earnings (as defined) the $73,562,000 gain on sale of a
Chicago-based consumer finance subsidiary. Had these computations included
this gain, the ratio of earnings (as defined) to fixed charges would have
been 2.25 and the ratio of earnings (as defined) to combined fixed charges
and preferred stock dividends would have been 1.61.
<PAGE>
Ex-12.2
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND RATIO
OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
Mellon Bank Corporation
and its subsidiaries(a)
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------------------------------------------
(dollar amounts in thousands) 1994 1993 1992 1991 1990
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
1. Net income $ 433,365 $ 460,213 $ 527,955 $ 347,451 $ 162,748 (c)
2. Provision for income taxes 278,040 298,034 104,099 62,199 40,538
---------- ---------- ---------- ---------- ----------
3. Net income before provision
for income taxes (line 1 + line 2) $ 711,405 $ 758,247 $ 632,054 $ 409,650 $ 203,286
========== ========== ========== ========== ==========
4. Fixed charges:
a. Interest expense (excluding
interest on deposits) $ 263,054 $ 200,915 $ 211,998 $ 326,437 $ 467,271
b. One-third of rental expense
(net of income from
subleases) and amortization
of debt issuance costs 40,140 38,190 29,446 30,300 28,172
---------- ---------- ---------- ---------- ----------
c. Total fixed charges
(excluding interest on
deposits)(line 4a + line 4b) 303,194 239,105 241,444 356,737 495,443
d. Interest on deposits 538,715 454,458 636,719 1,006,566 1,325,631
---------- ---------- ---------- ---------- ----------
e. Total fixed charges
(line 4c + line 4d) $ 841,909 $ 693,563 $ 878,163 $1,363,303 $1,821,074
========== ========== ========== ========== ==========
5. Preferred stock dividend
requirements (b) $ 124,260 $ 103,792 $ 61,197 $ 57,618 $ 58,951
========== ========== ========== ========== ==========
6. Net income before provision
for income taxes, plus total
fixed charges:
a. Excluding interest on
deposits (line 3 + line 4c) $1,014,599 $ 997,352 $ 873,498 $ 766,387 $ 698,729
========== ========== ========== ========== ==========
b. Including interest on
deposits (line 3 + line 4e) $1,553,314 $1,451,810 $1,510,217 $1,772,953 $2,024,360
========== ========== ========== ========== ==========
</TABLE>
(continued)
<PAGE>
Ex-12.2
(continued)
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND RATIO
OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
Mellon Bank Corporation
and its subsidiaries(a)
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------------------------------------------
1994 1993 1992 1991 1990
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
7. Ratio of earnings (as defined)
to fixed charges:
a. Excluding interest on deposits
(line 6a divided by line 4c) 3.35 4.17 3.62 2.15 1.41 (c)
b. Including interest on deposits
(line 6b divided by line 4e) 1.84 2.09 1.72 1.30 1.11 (c)
8. Ratio of earnings (as defined) to
combined fixed charges and
preferred stock dividends
a. Excluding interest on deposits 2.37 2.91 2.89 1.85 1.26 (c)
[line 6a divided by (line 4c +
line 5)]
b. Including interest on deposits
[line 6b divided by (line 4e +
line 5)] 1.61 1.82 1.61 1.25 1.08 (c)
</TABLE>
------------------
(a) For purposes of computing these ratios, earnings represent consolidated
net income, before income taxes plus consolidated fixed charges. Fixed
charges, excluding interest on deposits, include interest expense (other
than on deposits), one-third (the proportion deemed representative of the
interest factor) of rental expense net of income from subleases, and
amortization of debt issuance costs. Fixed charges, including interest on
deposits, include all interest expense, one-third (the proportion deemed
representative of the interest factor) of rental expense net of income
from subleases, and amortization of debt issuance costs.
(b) Preferred stock dividend requirements for all years presented represent the
pretax amount required to cover preferred stock dividends. Series K
Nonredeemable Preferred Stock was issued on January 25, 1993; Series J
Nonredeemable Preferred Stock was issued on January 21, 1992; Series I
Nonredeemable Preferred Stock was issued August 8, 1991 and Series H
Nonredeemable Preferred Stock was issued March 29, 1990. Accordingly,
preferred stock dividends were not accrued for these securities prior to
their respective issue dates. In the first quarter of 1990, common stock
was issued in exchange for approximately 83% of the outstanding shares of
Series D preferred stock in order to avoid exceeding the limitation on the
amount of preferred stock that could qualify as Tier I capital under the
Federal Reserve Board's 1992 risk-based capital regulations. The remaining
Series D preferred stock was converted to common stock in the third quarter
of 1994. The Series C-1 Stated Rate Auction Preferred Stock was redeemed on
July 18, 1990, the Series A Redeemable Preferred Stock was redeemed on July
19, 1991, the Series G preferred stock was redeemed on November 15, 1991,
the Series C-2 Stated Rate Auction Preferred Stock was redeemed on November
16, 1992, and the Series B preferred stock was redeemed on December 1, 1993.
Accordingly, preferred stock dividends were not accrued for these securities
subsequent to their respective redemption dates. In December 1994, the
Corporation announced its commitment to redeem the Series H preferred stock
on March 1, 1995. Preferred stock dividends for 1994 include $16 million for
the Series H redemption premium, the write-off of unamortized issuance costs
and dividends accrued through the redemption date.
(c) The ratio of earnings to fixed charges and the ratio of earnings to combined
fixed charges and preferred stock dividends for the year ended December 31,
1990, exclude from earnings (as defined) the $73,562,000 gain on the sale of
a Chicago-based consumer finance subsidiary. Had these computations included
this gain, the ratio of earnings (as defined) to fixed charges would have
been 1.56 excluding interest on deposits, and 1.15 including interest on
deposits. Including this gain, the ratio of earnings to combined fixed
charges and preferred stock dividends would have been 1.39 excluding
interest on deposits, and 1.12 including interest on deposits.
<PAGE>
EX-23.3
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
of Mellon Bank Corporation:
We consent to the use of our report incorporated herein by reference and
to the reference to our firm under the heading "Experts" in the Prospectus.
Our report refers to a change in the method of accounting for certain
investments in debt and equity securities pursuant to Statement of Financial
Accounting Standards No. 115.
KPMG PEAT MARWICK LLP
Pittsburgh, Pennsylvania
August 22, 1995
<PAGE>
EX-24.1
POWER OF ATTORNEY
MELLON BANK CORPORATION
Know all men by these presents, that each person whose signature appears below
constitutes and appoints James M. Gockley and William E. Marquis, and each of
them, such person's true and lawful attorney-in-fact and agent, with full power
of substitution and revocation, for such person and in such person's name, place
and stead, in any and all capacities, to sign one or more Registration
Statements pursuant to the Securities Act of 1933, as amended, with respect to
the registration of up to $1.5 billion aggregate principal amount of senior
and/or subordinated debt securities and any and all amendments (including post-
effective amendments) thereto, and to file the same with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as such person might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent and each of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
WITNESS the due execution hereof by the following persons in the capacities
indicated on this 21st day of March, 1995.
FRANK V. CAHOUET CHARLES A. CORRY
Frank V. Cahouet, Director and Charles A. Corry, Director
Principal Executive Officer
BURTON C. BORGELT C. FREDERICK FETTEROLF
Burton C. Borgelt, Director C. Frederick Fetterolf, Director
CAROL R. BROWN IRA J. GUMBERG
Carol R. Brown, Director Ira J. Gumberg, Director
J. W. CONNOLLY PEMBERTON HUTCHINSON
J. W. Connolly, Director Pemberton Hutchinson, Director
<PAGE>
ROTAN E. LEE W. KEITH SMITH
Rotan E. Lee, Director W. Keith Smith, Director
ANDREW W. MATHIESON HOWARD STEIN
Andrew W. Mathieson, Director Howard Stein, Director
EDWARD J. McANIFF JOAB L. THOMAS
Edward J. McAniff, Director Joab L. Thomas, Director
ROBERT MEHRABIAN WESLEY W. VON SCHACK
Robert Mehrabian, Director Wesley W. von Schack, Director
SEWARD PROSSER MELLON WILLIAM J. YOUNG
Seward Prosser Mellon, Director William J. Young, Director
DAVID S. SHAPIRA
David S. Shapira, Director
-2-
<PAGE>
EX-24.1
POWER OF ATTORNEY
MELLON FINANCIAL COMPANY
Know all men by these presents, that each person whose signature appears
below constitutes and appoints James M. Gockley and Ann M. Sawchuck and each of
them such person's true and lawful attorney-in-fact and agent, with full power
of substitution and revocation, for such person and in such person's name, place
and stead, in any and all capacities, to sign one or more Registration
Statements pursuant to the Securities Act of 1933, as amended, with respect to
the issuance and registration of up to $1.5 billion of debt securities, wherein
Mellon Financial Company is a registrant, and any and all amendments (including
post-effective amendments) thereto, and to file the same with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as such person might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent and each of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
WITNESS the due execution hereof by the following persons in the capacities
indicated on this 22nd day of August, 1995.
W. KEITH SMITH
W. Keith Smith
Director
STEVEN G. ELLIOTT
Steven G. Elliott
Director and Principal Executive Officer
MICHAEL K. HUGHEY
Michael K. Hughey
Director
<PAGE>
EX-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)
---------------
FIRST INTERSTATE BANK OF CALIFORNIA
(Exact name of trustee as specified in its charter)
California 95-0593085
(Jurisdiction of Incorporation (I.R.S. Employer
or organization Identification No.)
if not a U.S. national bank)
707 WILSHIRE BOULEVARD, LOS ANGELES, CALIFORNIA 90017
(Address of principal executive offices) (Zip Code)
T. William Opdyke, Esq., Sheppard, Mullin, Richter & Hampton
333 South Hope Street, Forty-Eighth Floor, Los Angeles, CA 90071
(213) 620-1780
(Name address and telephone number of agent for service)
MELLON FINANCIAL COMPANY MELLON BANK CORPORATION
(Exact name of obligor as specified in its charter)
Pennsylvania 25-1387025 25-1233834
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Mellon Bank Center, 500 Grant Street, Pittsburgh, Pennsylvania 15258
(Address of principal executive offices) (Zip Code)
SUBORDINATED 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.
STATE BANKING DEPARTMENT
235 Montgomery Street, San Francisco, California 94104
FEDERAL RESERVE BANK OF SAN FRANCISCO
101 Market Street, San Francisco, California 94105
FEDERAL DEPOSIT INSURANCE CORPORATION
Washington, D.C. 20429
(b) Whether it is authorized to exercise corporate trust powers.
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.
Item 3 through Item 15. Not applicable.
Item 16. LIST OF EXHIBITS.
*EXHIBIT 1. A copy of the Restated Articles of Incorporation of the Trustee
as presently in effect (incorporated by reference to Exhibit T-1A on Form
T-1, Securities and Exchange Commission File No. 2-91947).
*EXHIBIT 2. A copy of the certificate of the Superintendent of Banks, State
of California, authorizing First Interstate bank of California to
commence business of banking (incorporated by reference to Exhibit
T-1a(b) on Form T-1, Securities and Exchange Commission File No.
2-41187).
*EXHIBIT 3. A copy of the certificate of the Superintendent of Banks, State
of California, authorizing First Interstate Bank of California to
transact trust banking business (incorporated by reference to Exhibit
T-1A(b) on Form T-1, Securities and Exchange Commission File No.
2-41187).
-1-
<PAGE>
A copy of the Certificate as to Merger of First Western Bank
and Trust Company, San Francisco, California, into California Bank, Los
Angeles, California (United California Bank after said Merger), and as to
Purchase by First Western Bank and Trust Company, Los Angeles, California
(New Bank) from said United California Bank of the Business of Certain
Branches of the Former First Western Bank and Trust Company, San Francisco,
California (incorporated by reference to Exhibit T-1A(c) on Form T-1,
Securities and Exchange Commission File No. 2-41187).
EXHIBIT 4. The By-Laws of the Trustee as presently in effect.
*EXHIBIT 6. The consent of the Trustee required by Section 321(b) of the
Trust Indenture Act of 1939 (incorporated by reference to Exhibit 6 on
Form T-1, Securities and Exchange Commission File No. 2-41187).
EXHIBIT 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.
* Exhibits thus designated are incorporated herein by reference. These
exhibits were previously filed by the Trustee with the Securities and
Exchange Commission and are incorporated with the same respective
designations in this statement by specific reference thereto.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee,
First Interstate Bank of California, a corporation organized and existing under
the laws of the state of California, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Los Angeles, State of California, on August 23,
1995.
FIRST INTERSTATE BANK OF CALIFORNIA
By: /s/ Yona Binder
-------------------------------
Yona Binder
Vice President
-3-
<PAGE>
Exhibit 4
BY-LAWS
OF
FIRST INTERSTATE BANK OF CALIFORNIA
ARTICLE I
MEETINGS OF SHAREHOLDERS
Section 1. SHAREHOLDERS' ANNUAL MEETING: Annual meetings of Shareholders shall
----------------------------------------
be held at the First Interstate World Center, 633 West Fifth Street, Los
Angeles, California, or at such other California location as the shareholders or
this Board shall direct. Annual meetings shall take place at one-fifteen on the
third Monday in April of each year, if not a legal holiday, and if a legal
holiday, then on the next succeeding day not a legal holiday.
Section 2. NOTICE OF SHAREHOLDERS' ANNUAL MEETING: The notice of the annual
-------------------------------------------------
meeting of the Shareholders shall be given by the Secretary, or in the event of
his absence, refusal or failure to act, by an Assistant Secretary, or a
Secretary Pro Tem appointed for that purpose by the Chairman of the Board, the
President, or by any Vice President, or by the Executive Committee. Said notice
shall be given in the manner and for the time required by law.
Section 3. SPECIAL SHAREHOLDERS' MEETINGS: Special meetings of the shareholders
-----------------------------------------
shall be held at the principal executive office of the Corporation and may be
called by order of the Chairman of the Board, the President, or by the Board of
Directors, or at the request of the holders at the meeting which represent not
less than one-tenth in amount of the shares of the capital stock of the
Corporation issued and outstanding. Notice of special meetings of the
shareholders shall be given by the Secretary, or in the case of his absence,
refusal, or failure to act, by an Assistant Secretary, or Secretary Pro Tem
appointed for that purpose by the Chairman of the Board, the President, or by
any Vice President, or by the Executive Committee; such notice shall be given by
mailing through the United States mails, postage prepaid, a written or printed
notice thereof stating the time, place and general nature of the business to be
transacted at the meeting, addressed to each shareholder of record entitled to
vote at such meeting at the address of such shareholder appearing on the books
of the Corporation, or given by the shareholder to the Corporation for the
purpose of notice, or if no such address appears or is given, at the place where
the principal executive office of the Corporation is located. Said notice shall
be mailed by placing the same in any regular place of deposit for United States
mail not less than ten (10) nor more than sixty (60) days before the day on
which the meeting is to be held.
Section 4. ADJOURNMENT OF SHAREHOLDERS' MEETINGS: Any meeting of the
------------------------------------------------
shareholders may be adjourned from time to time by the vote of a majority of the
shares, the Sholders of which are either present in person or represented by
proxy.
1
<PAGE>
ARTICLE II
MEETINGS OF DIRECTORS
Section 1. ANNUAL MEETING: The Board of Directors shall meet for the purpose
--------------------------
of organization, the election of officers, and the transaction of other
business, immediately after each annual election of directors on the same day on
which the shareholders' meeting at which they have been elected has been held.
Notice of such meeting need not be given.
Section 2. REGULAR MEETINGS OF DIRECTORS: The regular meetings of the Board
----------------------------------------
shall be held at least once each calendar quarter at such hour and on such day
during such month as shall from time to time be fixed by standing resolution of
the Board, except during the month of April when the annual meeting shall
constitute the regular meeting and shall be held immediately after the annual
election of directors. In the event that the day fixed for a regular meeting of
directors shall fall on a legal holiday, then such regular meeting shall be held
at the same hour upon such day as the Board of Directors may previously
designate by resolution, and if no such day be designated, the said meeting
shall be held on the next succeeding day not a holiday. No notice of regular
meetings of directors is required.
Section 3. SPECIAL MEETINGS OF THE DIRECTORS: Special meetings of the Board may
--------------------------------------------
be called by the Chairman of the Board, the President, the Secretary or any two
(2) directors. Notice of special meetings of the Board shall state the time and
place of the meeting but need not state the purpose thereof. Such notice may be
in writing and shall be sufficient if given by United States mail, telegraph,
personal service or by telephone; if by mail then the notice shall be deposited,
postage prepaid, in any regular place of deposit for United States mail in the
City of Los Angeles at least four (4) days before the time of the meeting,
addressed to the director at his last post office address as known to the
officer giving the notice; if by telegraph then the telegram containing the
notice shall be delivered to a telegraph office in the City of Los Angeles,
transmission charges prepaid, at least twenty-four (24) hours before the time of
the meeting, addressed to the director at his last post office address as known
to the officer giving the notice; if by personal service or by telephonic means
at least twenty-four (24) hours before the time of the meeting. A record of
such notice, by whom given and the manner in which given shall be entered upon
the minutes of any special meeting of the Board, and the said minutes on being
read and approved at any subsequent meeting of the Board shall be presumptive
upon the question of service. The attendance of any director at any meeting of
the Board, without protest of lack of notice to him, either prior to or at the
commencement of the meeting shall constitute a waiver of any such notice. A
director may execute a waiver of notice of any meeting of the Board either
before or after such meeting.
Section 4. PLACE AND TIME OF MEETINGS OF DIRECTORS: Regular meetings of the
--------------------------------------------------
Board shall be held without call or notice at such time and place as shall from
time to time be fixed by standing resolution of the Board. Special meetings of
the Board shall be held at the time and place stated in the notice of such
meeting.
Section 5. ACTION WITHOUT MEETING: Any action by the Board may be taken
----------------------------------
without a meeting if all members of the Board shall individually or collectively
consent in writing to such
2
<PAGE>
action. Such written consent or consents shall be filed with the minutes of the
proceedings of the Board.
Section 6. TELEPHONIC MEETINGS: A meeting of the Board of Directors or of any
-------------------------------
Committee thereof may be held through the use of conference telephone or similar
communications equipment, so long as all members participating in such meeting
can hear one another. Participation in such a meeting shall constitute presence
at such meeting.
ARTICLE III
DIRECTORS
Section 1. Wherever in these By-Laws the term "BOARD" is used, the same is
---------
intended to designate the Board of Directors of the Corporation. Subject to
limitations of the Articles of Incorporation, of these By-Laws, of the
California General Corporation Law, and of the California Financial Code as to
action to be authorized or approved by the shareholders, and subject to the
duties of Directors as prescribed by these By-Laws, all corporate powers shall
be exercised by or subject to the direction of, and business and affairs of the
Corporation shall be managed by or under the direction of, the Board. Without
prejudice to such general powers, but subject to the same limitations, it is
hereby expressly declared that the Board shall have the following powers:
a. To control the election, the appointment, the authority, responsibility
and the qualifications of all persons in charge of the business and the
affairs of the Corporation.
b. To cause to be kept a record of all their meetings and proceedings and
of all the meetings of the shareholders, and to cause to be presented at
the annual meeting of the shareholders a statement showing the assets
and liabilities of the Corporation.
c. To require from the officers and from other persons in charge of the
business and affairs of the Corporation respectively, such bond or
security as it may see fit for the faithful performance of their duties.
d. To appoint such committees and members thereof as it may deem proper and
to define the powers and duties of such committees, and to determine
their compensation.
e. Make any distribution to its shareholders at a rate or in a periodic
amount or within a price range as it may deem proper and in a manner
provided by law.
f. To cause to be issued to the shareholders, in proportion to their
several interests, certificates of stock not to exceed in the aggregate
the authorized capital.
g. To fix by general and uniform resolution or resolutions the compensation
of each director for serving as director and to make such changes
therein from time to time as it may deem proper.
3
<PAGE>
Section 2. The authorized number of Directors of this Corporation shall not be
---------
less than eight (8) nor more than fifteen (15). The exact number of Directors
shall be fixed, within these limits, by approval of the Board of Directors or
the Shareholders, within the limits and in the manner prescribed by law.
ARTICLE IV
OFFICERS
Section 1. NUMBER AND TITLES: The Corporation shall have (a) a Chairman of the
-----------------------------
Board, (b) a President, and (c) a Secretary. The Corporation may also have one
or more Vice Chairmen, one or more Executive Vice Presidents, one or more Senior
Vice Presidents, one or more Vice Presidents, one or more Assistant Vice
Presidents, one or more Assistant Cashiers, one or more Assistant Secretaries, a
General Counsel, one or more Assistant General Counsel, one or more Managing
Counsel, one or more Senior Counsel, one or more Counsel, one of more Assistant
Counsel, two or more Trust Officers of whom one or more may be designated Senior
Trust Officer, a General Auditor, one or more Audit Officers, a Chief Financial
Officer, a Comptroller, one or more Financial Analysis Officers, one or more
Accounting Officers, one or more Managers, one or more Assistant Managers, one
or more Operations Officers, one or more Corporate Banking Officers, one or more
Banking Officers, and one or more International Banking Officers.
There may also be such other officers as may from time to time be designated by
resolution of the Board of Directors.
Section 2. APPOINTMENT AND TERM OF OFFICE: The Chairman of the Board, the
-----------------------------------------
President, the Vice Chairmen, the Executive Vice Presidents, the Senior Vice
Presidents, the Secretary, the General Counsel, the Assistant General Counsel,
the Senior Trust Officers, the General Auditor, the Chief Financial Officer and
the Comptroller shall be chosen by the Board at the first meeting after the
election of the Board and shall hold office at the pleasure of the Board. The
Board may also appoint such officers from time to time at any regular or special
meeting of the Board. All other officers designated by resolution of the Board
as provided in Section 1, may be appointed by the Chairman of the Board or the
President. All persons authorized to sign on behalf of the Corporation, other
than officers, may be appointed by the Chairman of the Board, or the President.
Section 3. CHAIRMAN OF THE BOARD: The Chairman of the Board shall preside at
---------------------------------
all meetings of the shareholders and all meetings of the Board and of the
Executive Committee. He shall be the chief executive officer of the Corporation
with general executive supervision of its business and affairs. He shall act as
Chairman of all committees of which he is a member, except as may be provided in
the resolution or order appointing such committee or committees.
In the absence or disability of the Chairman of the Board, the following
officers in the following order shall act in his stead: the President, an
officer designated by the Chairman of the Board, an officer designated by the
Board of Directors or Executive Committee. In the absence or disability of the
Chairman of the Board, the President, and all officers so designated, if any,
the Board of Directors shall elect a temporary Chairman of the Board to act
during such absence or disability of said officers. The Chairman of the Board
shall at all times have on file with the Secretary his
4
<PAGE>
written designation of the officer from time to time so designated by him to act
as the chief executive officer in his absence or disability and in the absence
or disability of the President.
Section 4. PRESIDENT: The President shall have such powers and duties as may
---------------------
be prescribed by these By-Laws, the Board, the Executive Committee or the
Chairman of the Board. Subject to the authority of the Chairman of the Board,
the President shall have general executive supervision of the business and
affairs of the Corporation and shall be senior in authority to all officers
other than the Chairman of the Board. In the absence or disability of the
Chairman of the Board, the President shall exercise the powers and perform the
duties of the Chairman of the Board.
Section 5. VICE CHAIRMEN: The Vice Chairmen shall perform the duties imposed
-------------------------
upon them by the By-Laws, the Board of Directors, the Executive Committee, the
Chairman of the Board or the President.
Section 6. EXECUTIVE VICE PRESIDENTS: The Executive Vice Presidents shall
-------------------------------------
perform the duties imposed upon them by the By-Laws, the Board, the Executive
Committee, the Chairman of the Board or the President.
Section 7. SENIOR VICE PRESIDENTS: The Senior Vice Presidents shall perform
----------------------------------
the duties imposed upon them by the By-Laws, the Board, the Executive Committee,
the Chairman of the Board or the President.
Section 8. SECRETARY: The Secretary shall keep full and complete minutes of
---------------------
each meeting of the Board, of the Executive Committee and of the shareholders
and give notice, as required, of all such meetings. He shall maintain custody
of and keep such other records of the Corporation as are required by the Board
and, generally, perform all duties which pertain to his office and which are
required by the Board.
Section 9. GENERAL AUDITOR: The General Auditor shall be responsible to the
---------------------------
Board, through the Audit Committee, for the systems of internal audit and for
testing and evaluating the systems of protective controls. The office of the
General Auditor shall make such examinations and reports as the General Auditor
deems advisable or as may be required by the Audit Committee. The General
Auditor shall have the duty to report to the Chairman of the Board on all
matters concerning which the General Auditor deems advisable or which the
Chairman of the Board may request and shall perform such other duties as the
Chairman of the Board may prescribe. Additionally, the General Auditor shall
have the duty of reporting independently of all officers of the Corporation to
the Audit Committee at least quarterly on all matters concerning which the
General Auditor deems advisable or which the Audit Committee may request.
Section 10. CHIEF FINANCIAL OFFICER: The Chief Financial Officer shall keep
------------------------------------
and maintain, or cause to be kept and maintained, adequate and correct accounts
of the properties and business transactions of the Corporation, including
accounts of its assets, liabilities, receipts, disbursements, gains, losses,
capital, surplus and shares. He shall be responsible for all the money, funds
and valuables belonging to the Corporation. He shall deposit all money and
other valuables in the name of and to the credit of the Corporation with such
depositories as are
5
<PAGE>
authorized by law. He shall render to the Chairman of the Board, the President
and Board, whenever they request it, an account of all of his transactions as
Chief Financial Officer and of the financial condition of the Corporation, and
shall have such other powers and perform such other duties as are prescribed by
the Board, the Executive Committee, the By-Laws, the Chairman of the Board or
the President.
Section 11. OTHER OFFICERS: Each other officer shall have such authority and
---------------------------
perform such duties as are prescribed by the By-Laws, the Board, the Executive
Committee, the Chairman of the Board or the President.
ARTICLE V
COMMITTEES OF THE BOARD OF DIRECTORS
Section 1. EXECUTIVE COMMITTEE: There shall be an Executive Committee
-------------------------------
consisting of the Chairman of the Board, the President and at least three non-
officer directors to be appointed for respective terms to be fixed by the Board.
A majority of the members of the Committee shall constitute a quorum for the
transaction of business. The Board may from time to time appoint an additional
director or directors as an alternate member or members of the Committee to
serve only at a meeting if there otherwise may not be a quorum present at such
meeting. The alternate member or members so appointed shall act in the place
and stead of any regular member or members who may be absent from such meeting.
The Executive Committee shall have all of the powers and authority of the Board
in the management of the business and affairs of the Corporation during the
intervals between meetings of the Board, except the power to declare dividends
and to adopt, amend or repeal By-Laws or as otherwise prohibited by law. The
Executive Committee may establish and appoint such other committees not
otherwise provided for by these By-Laws or the Board of Directors as it may deem
advisable and may prescribe the powers and duties of such committees.
The Chairman of the Board or a member of the Committee designated by the
Chairman of the Board, shall preside over meetings of the Committee. Meetings
of the Committee may be held at the call of the Chairman of the Board or the
President or any two other members of the Committee at the time and place stated
in the notice of such meeting.
The transactions of any meetings of the Executive Committee however called or
noticed or wherever held shall be as valid as though had at a meeting duly held
after the regular call and notice, if a quorum be present and if, either before
or after the meeting each of the members of the Committee not present sign a
written waiver of notice or a consent to the holding of such meeting or an
approval of the minutes thereof. All such waivers, consents or approvals shall
be filed with the records of the Committee or made a part of the minutes of the
meeting.
Section 2. OTHER COMMITTEES: The Board of Directors may designate one or more
----------------------------
committees from time to time, each consisting of two or more directors to serve
at the pleasure of the Board. The Board of Directors may designate one or more
directors as alternate members of
6
<PAGE>
any committee, who may replace any absent member at any meeting of the
committee. Any such committee, to the extent provided in the resolution of the
Board of Directors shall have all the authority of the Board, except with
respect to:
a. The approval of any action for which shareholder approval is also
required.
b. The filling of vacancies on the Board or in any Committee.
c. The fixing of compensation of the directors for serving on the Board or
on any committee.
d. The amendment or repeal of By-Laws or the adoption of new By-Laws.
e. The amendment or repeal of any resolution of the Board which by its
express terms is not so amendable or repealable.
f. A distribution to the shareholders of the corporation as defined in
Section 166 of the California Corporations Code, except at a rate or in
a periodic amount or within a price range determined by the Board.
g. The appointment of other committees of the Board or the members thereof.
h. The approval of any action for which the entire Board is required.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES
(a) Indemnification of Directors, Officers and Employees. Each person who was
---------------------------------------------------------
or is a party or is threatened to be made a party or is otherwise involved in
any action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of the fact that he or she
is or was a director, officer or employee of the Corporation, or of any
predecessor corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or other agent of another corporation or of a
partnership, joint venture, trust or other enterprise (including service with
respect to employee benefit plans), whether the basis of such proceeding is
alleged action in an official capacity as a director, officer or employee or in
any other capacity while serving as a director, officer or employee, shall be
indemnified and held harmless by the Corporation to the fullest extent
permissible under California law and the Corporation's Articles of
Incorporation, against all expense, liability and loss (including attorneys'
fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement) actually and reasonably incurred or suffered by such person in
connection therewith. Such indemnification shall continue as to a person who
has ceased to be a director, officer or employee and shall inure to the benefit
of his or her heirs, executors and administrators. Notwithstanding the
foregoing, the Corporation shall indemnify any such person in connection with a
proceeding (or part thereof) initiated by such person only if such proceeding
(or part thereof) was authorized by the Board of Directors of the Corporation.
The right to indemnification conferred in this Article shall include the right
to be paid by the Corporation the expenses incurred in defending any proceeding
in advance of final disposition to the fullest extent permitted by law;
provided, however, that the payment
7
<PAGE>
under this Article of such expenses in advance of the final disposition of a
proceeding may be conditioned upon the delivery to the Corporation of such
undertakings by or on behalf of such director, officer or employee to repay all
amounts so advanced as may be required or permitted by law.
(b) Exclusions. Notwithstanding the foregoing or any other provisions under
---------------
this Article, the Corporation shall not be liable under this Article to
indemnify a director, officer or employee against, or make any advances or other
payments in connection with, any proceeding against a director, officer or
employee based upon, arising out of, resulting from, relating to or in
consequence of (1) transactions or activities in which such person gained or
sought to gain, any improper personal profit or advantage, or (2) the
intentional misconduct of such person which such person knew, or reasonably
should have known, would violate the law or any policy of the Corporation or (3)
the knowing fraud or deliberately dishonest actions of such person.
(c) Successful Defense. To the extent that a director, officer or employee has
-----------------------
been successful on the merits in defense of any proceeding referred to in
paragraph (a) or in defense of any claim, issue or matter therein, such person
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him or her in connection therewith.
(d) Non-Exclusivity of Rights. The right to indemnification provided by this
------------------------------
Article shall not be exclusive of any other right which any person may have or
hereafter acquire under any statute, by-law, agreement, vote of shareholders or
disinterested directors, or otherwise.
ARTICLE VII
CERTIFICATE OF STOCK
Certificates for shares of the capital stock of the Corporation shall be of such
form as the Board may prescribe and shall be signed by the President or a Vice
President and the Secretary or an Assistant Secretary, or be authenticated by
facsimiles of the signatures of the President and the Secretary, or by a
facsimile of the signature of the President and the written signature of the
Secretary or an Assistant Secretary. Every certificate authenticated by a
facsimile of a signature must be countersigned by a transfer agent or transfer
clerk, and be registered by an incorporated bank or trust company as registrar
of transfers, before issuance.
ARTICLE VIII
TRANSFER OF STOCK
Section 1. Shares of the capital stock of the Corporation may be transferred by
---------
the holders thereof, or by attorney legally constituted, or by their legal
representatives, by endorsement on the certificates of stock, but no such
transfer shall be valid until the certificate is surrendered and acknowledgment
made on the books of the Corporation.
Section 2. No new certificates shall be issued for the surrendered certificates
---------
unless the surrendered certificates have been duly canceled. If a certificate
shall be lost or destroyed, the Board or the Executive Committee may order a new
certificate in lieu thereof issued upon such
8
<PAGE>
guaranty or indemnity of the person claiming the same as the Board or the
Executive Committee may deem proper and satisfactory.
Section 3. The Board may fix a time in the future as a record date for the
---------
determination of the shareholders entitled to notice of and to vote at any
meeting of shareholders or entitled to receive any dividend or distribution, or
any allotment of rights, or to exercise rights in respect to any change,
conversion, or exchange of shares. The record date so fixed shall be not more
than sixty (60) nor less than ten (10) days prior to the date of the meeting or
event for the purposes of which it is fixed. When a record date is so fixed,
only shareholders of record on that date are entitled to notice of and to vote
at the meeting or to receive the dividend, distribution, or allotment of rights,
or to exercise the rights, as the case may be, notwithstanding any transfer of
any shares on the books of the Corporation after the record date. At any
meeting of shareholders as to which the Board has not fixed a record date for
the determination of the shareholders entitled to notice of and to vote at such
meeting, only shareholders of record at the close of business on the business
day next preceding the day on which notice is given or, if notice is waived, at
the close of business on the business day next preceding the day on which the
meeting is held shall be entitled to vote thereat.
ARTICLE IX
DEPOSITS
Section 1. All deposits made by the shareholders shall be entitled to the same
---------
rights, privileges and benefits as those of other depositors.
ARTICLE X
SEAL
Section 1. The seal of the Corporation shall be in such form as the Board may
---------
prescribe. In the execution on behalf of this Corporation of any instrument,
document, writing, notice or paper it shall not be necessary to affix the
corporate seal of this Corporation thereon, and any such instrument, document,
writing, notice or paper when executed without said seal affixed thereon shall
be of the same force and effect and as binding on this Corporation as if said
corporate seal had been affixed thereon in each instance. Said seal, if
required, may be affixed, imprinted or reproduced by facsimile on any instrument
or document, including certificates for shares of the stock of this Corporation.
ARTICLE XI
AMENDMENT TO BY-LAWS
Section 1. Subject to the right of shareholders to adopt, amend or repeal By-
---------
Laws, as provided in Section 211 of the Corporations Code of California, By-Laws
may be adopted, amended or repealed by the Board, except that a By-Law or
amendment thereof changing the authorized number of directors may be adopted,
amended or repealed by the Board only pursuant to Section 212 of said
Corporations Code.
9
<PAGE>
I, Yona Binder, Vice President of FIRST INTERSTATE BANK OF CALIFORNIA, a
California corporation, hereby certify that the foregoing eleven (11) articles
represent a full, true and correct copy of the Code of By-Laws of First
Interstate Bank of California as amended, and that the same is in full force and
effect as of April 26, 1994.
WITNESS my hand and the seal of said Corporation this 23rd day of August, 1995
/s/ Yona Binder
---------------
Vice President
of
FIRST INTERSTATE BANK OF CALIFORNIA
BYLAWS
10
<PAGE>
Exhibit 7
Board of Governors of the Federal Reserve System
QMB Number: 7100-0036
Federal Deposit Insurance Corporation
QMB Number: 3064-0052
Office of the Comptroller of the Currency
QMB Number: 1557-0041
Expires July 31, 1995
Federal Financial Institutions Examination Council
--------------------------------------------------------------------------------
[1]
Please refer to page i,
Table of Contents, for
the required disclosure
of estimated burden.
--------------------------------------------------------------------------------
Consolidated Reports of Condition and Income for A Bank With Domestic and
Foreign Offices--FFIEC 031
Report at the close of business March 31, 1995 (950331)
--------
(RCRI 9999)
This report is required by law: 12 U.S.C. (section)324 (state member banks);
12 U.S.C. (section)1817 (State nonmember banks); and 12 U.S.C. (section)161
(National banks).
This report form is to be filed by banks with branches and consolidated
subsidiaries in U.S. territories and possessions, Edge or Agreement
subsidiaries, foreign branches, consolidated foreign subsidiaries, or
International Banking Facilities.
--------------------------------------------------------------------------------
NOTE: The Reports of Condition and Income must be signed by an authorized
officer and the Report of Condition must be attested to by not less than two
directors (trustees) for State nonmember banks and three directors for State
member and National banks.
I, Roger H. Molvar
Senior Vice President & Comptroller
---------------------------------------------------
Name and Title of Officer Authorized to Sign Report
of the named bank do hereby declare that these Reports of Condition and Income
(including the supporting schedules) have been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and are
true to the best of my knowledge and belief.
/s/ Roger H. Molvar
------------------------------------------------------
Signature of Officer Authorized to Sign Report
April 28, 1995
------------------------------------------------------
Date of Signature
The Reports of Condition and Income are to be prepared in accordance with
Federal regulatory authority instructions. NOTE: These instructions may in some
cases differ from generally accepted accounting principles.
We, the undersigned directors (trustees), attest to the correctness of this
Report of Condition (including the supporting schedules) 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 appropriate Federal
regulatory authority and is true and correct.
/s/ Bruce G. Willison
------------------------------------------------------
Director (Trustee)
/s/ Ivan J. Houston
------------------------------------------------------
Director (Trustee)
/s/ William ?. Siart
------------------------------------------------------
Director (Trustee)
--------------------------------------------------------------------------------
For Banks Submitting Hard Copy Report Forms:
State Member Banks: Return the original and one copy to the appropriate Federal
Reserve District Bank.
State Nonmember Banks: Return the original only in the special return address
envelope return address envelope provided. If express mail is used in lieu of
the special return address envelope, return the original only to the FDIC, c/o
Quality Data Systems, 2127 Espey Court, Suite 204, Crofton, MD 21114.
National Banks: Return the original only in the special return address envelope
provided. If express mail is used in lieu of the special return address
envelope, return the original only to the FDIC, c/o Quality Data Systems, 2127
Espey Court, Suite 204, Crofton, MD 21114.
--------------------------------------------------------------------------------
FDIC Certificate Number / / / / / /
-- -- -- -- --
(RCN 3060)
FIRST INTERSTATE BANK CA
1200 W. 7TH ST., G-9-35
LOS ANGELES CA 90017
L060755000 120607550000 01226 31
Board of Governors of the Federal Reserve System, Federal Deposit Insurance
Corporation, Office of the Comptroller of the Currency
<PAGE>
<TABLE>
<S> <C> <C> <C>
First Interstate Bank of California Call Date: 03/31/95 ST-BK: 66-6 FFIEC 031
1200 W. 7th St. Vendor ID: D CERT: 01226 Page RC- 1
Los Angeles, CA 90017
</TABLE>
Transit Number: 12200021 11
Consolidated Report of Condition for Insured Commercial and State-Chartered
Savings Banks for March 31, 1995
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC - Balance Sheet
<TABLE>
<CAPTION>
C400 (-
Dollar Amounts in Thousands
------------------------------------------------------------------------------------------------------------------------------------
<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.... 3,148,682 1.a
--------------------------
b. Interest-bearing balances(2) 0071.... 25,960 1.b
---------------------------------------------------
2. Securities
a. Held-to-maturity securities (from Schedule RC-B, column A) 1754.... 5,875,376 2.a
---------------------
b. Available-for-sale securities(from Schedule RC-B, column D) 1773.... 63,831 2.b
--------------------
3. Federal funds sold and securities purchased under agreements to resell in domestic
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds sold 0276.... 1,565,150 3.a
-------------------------------------------------------------
b. Securities purchased under agreements to resell 0277.... 0 3.b
--------------------------------
4. Loans and Lease financing receivables:
<S> <C> <C> <C> <C> <C>
RCFD
a. Loans and leases, net of unearned income ----
(from Schedule RC-C) 2122.... 14,514,192 ........................ 4.a
--------------------------------
b. LESS: Allowance for loans and lease losses 3123.... 444,436 ........................ 4.b
----------
c. LESS: Allocated transfer risk reserve 3128.... 0 ........................ 4.c
--------------
<S> <C> <C> <C>
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c) 2125.... 14,069,756 4.d
----------------------------
5. Trading assets (from Schedule RC-D) 3545.... 2,182 5.
------------------------------------------------
6. Premises and fixed assets (including capitalized leases) 2145.... 406,481 6.
---------------------------
7. Other real estate owned (from Schedule RC-M) 2150.... 57,247 7.
---------------------------------------
8. Investments in unconsolidated subsidiaries and associated companies
(from Schedule RC-M) 2130.... 12,204 8.
--------------------------------------------------------------
9. Customers' liability to this bank on acceptances outstanding 2155.... 10,125 9.
----------------------
10. Intangible assets (from Schedule RC-M) 2143.... 376,104 10.
---------------------------------------------
11. Other assets (from Schedule RC-F) 2160.... 482,361 11.
--------------------------------------------------
12. Total assets (sum of items 1 through 11) 2170.... 26,095,459 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>
<S> <S> <C> <C>
First Interstate Bank of California Call Date: 03/31/95 ST-BK: 66-6 FFIEC 031
1200 W. 7th St. Vendor ID: D CERT: 01226 Page RC- 2
Los Angeles, CA 90017
</TABLE>
Transit Number: 12200021 12
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 I) 2200.... 20,732,183 13.a
----------------------------------------------------
<S> <C> <C> <C> <C>
(1) Noninterest-bearing (1) 6631.... 8,268,476 ........................ 13.a.1
--------------------------
(2) Interest-bearing 6636.... 12,463,707 ........................ 13.a.2
--------------------------------
<S> <C> <C> <C>
RCFN
b. In foreign offices, Edge and Agreement subsidiaries, and ----
IBFs (from Schedule RC-E, part II) 2200.... 230,354 13.b
--------------------------------------------
<S> <C> <C> <C> <C>
(1) Noninterest-bearing 6631.... 0 ......................... 13.b.1
-----------------------------
(2) Interest-bearing 6636.... 230,354 ......................... 13.b.2
--------------------------------
<S> <C> <C> <C>
14. Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its Edge
and Agreement subsidiaries, and in IBFs:
RCFD
----
a. Federal funds purchased 0278.... 2,338,979 14.a
--------------------------------------------------------
b. Securities sold under agreements to repurchase 0279.... 353,572 14.b
---------------------------------
RCON
15. a. Demand notes issued to the U.S. Treasury 2840.... 0 15.a
--------------------------------------
RCFD
----
b. Trading liabilities (from Schedule RC-D) 3548.... 0 15.b
--------------------------------------
16. Other borrowed money:
a. With original maturity of one year or less 2332.... 3,990 16.a
-------------------------------------
b. With original maturity of more than one year 2333.... 0 16.b
-----------------------------------
17. Mortgage indebtedness and obligations under capitalized leases 2910.... 89,139 17.
--------------------
18. Bank's liability on acceptances executed and outstanding 2920.... 10,125 18.
--------------------------
19. Subordinated notes and debentures 3200.... 75,000 19.
-------------------------------------------------
20. Other liabilities (from Schedule RC-G) 2930.... 288,715 20.
--------------------------------------------
21. Total liabilities (sum of items 13 through 20) 2948.... 24,122,057 21.
------------------------------------
22. Limited-life preferred stock and related surplus 3282.... 0 22.
----------------------------------
EQUITY CAPITAL RCFD
----
23. Perpetual preferred stock and related surplus 3838.... 0 23.
--------------------------------------
24. Common stock 3230.... 428,182 24.
-----------------------------------------------------------------------
25. Surplus (excluded all surplus related to preferred stock) 3839.... 664,694 25.
--------------------------
26. a. Undivided profits and capital reserves 3632.... 879,750 26.a
-----------------------------------------
b. Net unrealized holding gains (losses) on available-for-sale
securities 8434.... 776 26.b
----------------------------------------------------------------------
27. Cumulative foreign currency translation adjustments 3284.... 0 27.
--------------------------------
28. Total equity capital (sum of items 23 through 27) 3210.... 1,973,402 28.
----------------------------------
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28) 3300.... 26,095,459 29.
----------------------------------------------
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the
statement below that best describes the most RCFD Number
comprehensive level of auditing work performed for the bank ---- ------
by independent external auditors as of any date during 1994 6724.... 2 M.1
------------------------
</TABLE>
1=Independent audit of the bank conducted in accordance with generally accepted
auditing standards by a certified public accounting firm which submits a
report on the bank
2=Independent audit of the bank's parent holding company conducted in accordance
with generally accepted auditing standards by a certified public accounting
firm which submits a report on the consolidated holding company (but not on
the bank separately)
3=Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4=Director's examination of the bank performed by other external auditors (may
be required by state chartering authority)
5=Review of the bank's financial statements by external auditors
6=Compilation of the bank's financial statements by external auditors
7=Other audit procedures (excluding tax preparation work)
8=No External audit work
_____________
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
