As filed with the Securities and Exchange Commission on September 30, 1998
Registration No. _________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
HUBCO, INC. HUBCO CAPITAL TRUST II
(Exact name of Registrant as specified in its charter) (Exact name of Registrant as specified
in its trust agreement)
<S> <C>
NEW JERSEY
(State or other jurisdiction of DELAWARE
incorporation or organization) (State or other jurisdiction of
_________ incorporation or organization)
---------
6712
(Primary Standard Industrial 6719
Classification Code Number) (Primary Standard Industrial
Classification Code Number)
22-2405746
(I.R.S. Employer 52-6925359
Identification No.) (I.R.S. Employer
Identification No.)
</TABLE>
1000 MacArthur Boulevard
Mahwah, New Jersey 07430
(201) 236-2600
(Address, including zip code, and telephone number, including area code,
of Registrants' principal executive offices)
Kenneth T. Neilson, Chairman,
President & CEO
1000 MacArthur Boulevard
Mahwah, New Jersey 07430
(201) 236-2631
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPIES TO:
Ronald H. Janis, Esq. Frank M. Conner, III, Esq.
Pitney, Hardin, Kipp & Szuch Alston & Bird LLP
P.O. Box 1945 601 Pennsylvania Avenue, N.W.
Morristown, New Jersey 07962-1945 North Building, 11th Floor
(973) 966-6300 Washington, DC 20004-2601
(202) 756-3300
Approximate Date of Commencement of
Proposed Sale to the Public: As soon as
practicable after this Registration Statement
becomes effective.
If any of the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. _____
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=============================================================================================================================
Title of Each Class of Securities Amount Proposed Maximum Proposed Maximum Amount of
to be Registered to be Offering Price Aggregate Registration
Registered Per Unit(1) Offering Price(1) Fee(2)(3)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Series B Capital Securities of HUBCO 50,000 Shares $1,000 $50,000,000 $14,750
Capital Trust II...........................
- -----------------------------------------------------------------------------------------------------------------------------
Series B Junior Subordinated Deferrable
Interest Debentures of HUBCO, Inc.(2)
- -----------------------------------------------------------------------------------------------------------------------------
HUBCO Series B Guarantee with respect to
Series B Capital Securities(3)
=============================================================================================================================
Total.................................. 50,000 Shares(4) $1,000 $50,000,000(5) $14,750
=============================================================================================================================
</TABLE>
(1) Dated solely for the purpose of computing the registration fee.
(2) No separate consideration will be received for the Series B Junior
Subordinated Deferrable Interest Debentures of HUBCO, Inc. (the "Junior
Subordinated Debentures") distributed upon any liquidation of HUBCO Capital
Trust II.
(3) No separate consideration will be received for the HUBCO, Inc. Series B
Guarantee.
(4) This Registration Statement is deemed to cover rights of holders of Junior
Subordinated Debentures under the Indenture, the rights of holders of Series
B Capital Securities of HUBCO Capital Trust II under a Declaration, the
rights of holders of such Capital Securities under the Series B Guarantee
and certain backup undertakings as described herein.
(5) Such amount represents the liquidation amount of the HUBCO Capital Trust II
Series B Capital Securities to be exchanged hereunder and the principal
amount of Junior Subordinated Debentures that may be distributed to holders
of such Capital Securities upon any liquidation of HUBCO Capital Trust II.
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 this registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
PROSPECTUS
SUBJECT TO COMPLETION, DATED ________________, 1998
HUBCO CAPITAL TRUST II
OFFER TO EXCHANGE ITS
7.65% SERIES B CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
7.65% SERIES A CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
HUBCO, INC.
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1998, UNLESS EXTENDED
--------------------
HUBCO Capital Trust II, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby offers, upon the terms and subject
to the conditions set forth in this Prospectus (as the same may be amended or
supplemented from time to time, the "Prospectus") and in the accompanying Letter
of Transmittal (which together constitute the "Exchange Offer"), to exchange up
to $50,000,000 aggregate Liquidation Amount of its 7.65% Series B Capital
Securities (the "New Capital Securities") which have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
Registration Statement (as defined herein) of which this Prospectus constitutes
a part, for a like Liquidation Amount of its outstanding 7.65% Series A Capital
Securities (the "Old Capital Securities"), of which $50,000,000 aggregate
Liquidation Amount is outstanding. Pursuant to the Exchange Offer, HUBCO, Inc.,
a New Jersey corporation ("HUBCO" or the "Corporation"), is also offering to
exchange (i) its guarantee of payments of cash distributions and payments on
liquidation of the Trust or redemption of the Old Capital Securities (the "Old
Guarantee") for a like guarantee in respect of the New Capital Securities (the
"New Guarantee") and (ii) all of its 7.65% Series B Junior Subordinated
Deferrable Interest Debentures due June 15, 2028 (the "Old Junior Subordinated
Debentures") for a like aggregate principal amount of its 7.65% Series A Junior
Subordinated Deferrable Interest Debentures due June 15, 2028 (the "New Junior
Subordinated Debentures"), which New Guarantee and New Junior Subordinated
Debentures also have been registered under the Securities Act. The Old Capital
Securities, the Old Guarantee and the Old Junior Subordinated Debentures are
collectively referred to herein as the "Old Securities" and the New Capital
Securities, the New Guarantee and the New Junior Subordinated Debentures are
collectively referred to herein as the "New Securities."
The New Securities have been registered under the Securities Act and
therefore will not be subject to certain restrictions on transfer applicable to
the Old Securities, other than to require minimum transfers thereof to be in
blocks of $100,000 principal amount (for New Junior Subordinated Debentures) and
$100,000 Liquidation Amount (for New Capital Securities). See "Description of
New Securities" and "Description of Old Securities." The New Capital Securities
are being offered for exchange in order to satisfy certain obligations of the
Corporation and the Trust under the Registration Rights Agreement dated as of
June 19, 1998 (the "Registration Rights Agreement") among the Corporation, the
Trust and the Initial Purchaser (as defined herein). In the event that the
Exchange Offer is consummated, any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer and the New Capital
Securities issued in the Exchange Offer will vote together as a single class for
purposes of determining whether holders of the requisite percentage in
outstanding Liquidation Amount thereof have taken certain actions or exercised
certain rights under the Declaration.
This Prospectus and the Letter of Transmittal are first being mailed to all
holders of Old Capital Securities on , 1998.
SEE "RISK FACTORS" COMMENCING ON PAGE __ FOR CERTAIN INFORMATION THAT SHOULD
BE CONSIDERED BY HOLDERS IN DECIDING WHETHER TO TENDER OLD CAPITAL SECURITIES IN
THE EXCHANGE OFFER.
THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is ___________, 1998.
<PAGE>
The New Capital Securities and the Old Capital Securities
(collectively, the "Capital Securities") represent beneficial interests in the
assets of the Trust. The Corporation is the owner of all of the beneficial
interests represented by common securities of the Trust (the "Common
Securities," and together with the Capital Securities, the "Trust Securities").
The Bank of New York is the Property Trustee of the Trust. The Trust exists for
the sole purpose of issuing the Trust Securities and investing the proceeds
thereof in the Junior Subordinated Debentures (as defined herein). The Junior
Subordinated Debentures will mature on June 15, 2028 (the "Stated Maturity
Date"). The Capital Securities will have a preference over the Common Securities
under certain circumstances with respect to cash distributions and amounts
payable on liquidation, redemption or otherwise. See "Description of New
Securities--Description of New Capital Securities--Subordination of Common
Securities."
As used herein, (i) the "Indenture" means the Indenture, dated as of
June 19, 1998, as amended and supplemented from time to time, between the
Corporation and The Bank of New York, as Debenture Trustee (the "Debenture
Trustee"), (ii) the "Declaration" means the Amended and Restated Declaration of
Trust, dated as of June 19, 1998, relating to the Trust among the Corporation,
as Sponsor, The Bank of New York as Property Trustee (the "Property Trustee"),
The Bank of New York (Delaware), as Delaware Trustee, (the "Delaware Trustee"),
and the Administrative Trustees named therein (collectively, with the Property
Trustee and Delaware Trustee, the "Issuer Trustees"). In addition, as the
context may require, unless otherwise expressly stated, (i) the term "Capital
Securities" includes the Old Capital Securities and the New Capital Securities,
(ii) the term "Trust Securities" includes the Capital Securities and the Common
Securities, (iii) the term "Junior Subordinated Debentures" includes the Old
Junior Subordinated Debentures and the New Junior Subordinated Debentures and
(iv) the term "Guarantee" includes the Old Guarantee and the New Guarantee.
Holders of the New Capital Securities will be entitled to receive
preferential cumulative cash distributions arising from the payment of interest
on the Junior Subordinated Debentures, accruing from June 19, 1998, and payable
semi-annually in arrears on June 15 and December 15 of each year, commencing
December 15, 1998, at the annual rate of 7.65% of the Liquidation Amount of
$1,000 per New Capital Security ("Distributions"). The distribution rate and the
distribution payment dates and other payment dates for the Capital Securities
will correspond to the interest rate and interest payment dates and other
payment dates on the New Junior Subordinated Debentures which shall be the sole
assets of the Trust. The Corporation will have the right to defer payments of
interest on the Junior Subordinated Debentures at any time and from time to time
for a period not exceeding 10 consecutive semi-annual periods, including the
first such semi-annual period during such extension period, with respect to each
deferral period (each, an "Extension Period"), provided that no Extension Period
may extend beyond the Stated Maturity Date of the Junior Subordinated Debentures
or end on a date other than a Distribution Date. No interest shall be due and
payable during any Extension Period, except at the end thereof. Upon the
termination of any such Extension Period and the payment of all amounts then
due, the Corporation may elect to begin a new Extension Period, subject to the
requirements set forth in the Indenture. If and for so long as interest payments
on the Junior Subordinated Debentures are so deferred, Distributions on the
Trust Securities will also be deferred and the Corporation will not be
permitted, subject to certain exceptions described herein, to declare or pay any
cash distributions with respect to the Corporation's capital stock (which
includes common and preferred stock) or to make any payment with respect to debt
securities of the Corporation that rank pari passu with or junior to the Junior
Subordinated Debentures. During an Extension Period, interest on the Junior
Subordinated Debentures will continue to accrue (and the amount of Distributions
to which holders of the Trust Securities are entitled will accumulate) at the
rate of 7.65% per annum, compounded semi-annually, and holders of Trust
Securities will be required to accrue interest income for United States federal
income tax purposes. See "Description of New Securities--Description of New
Junior Subordinated Debentures--Option to Extend Interest Payment Date" and
"Certain Federal Income Tax Considerations--Interest Income and Original Issue
Discount."
Through the Guarantee, the guarantee agreement of the Corporation
relating to the Common Securities (the "Common Guarantee"), the Declaration, the
Junior Subordinated Debentures and the Indenture, taken together, the
Corporation has guaranteed or will guarantee, as the case may be, fully,
irrevocably and unconditionally, all of the Trust's obligations under the Trust
Securities. See "Relationship Among the New Capital Securities, the New Junior
Subordinated Debentures and the New Guarantee--Full and Unconditional
Guarantee." The Old Guarantee and the Common Guarantee guarantee, and the New
Guarantee will guarantee, payments of Distributions and payments on liquidation
or redemption of the Trust Securities, but in each case only to the extent that
the Trust holds funds on hand legally available therefor and has failed to make
such payments, as described herein. See "Description of New
Securities--Description of New Guarantee." If the Corporation fails to make a
required payment on the Junior Subordinated Debentures, the Trust will not have
sufficient funds to make the related payments, including Distributions, on the
Trust Securities. The Guarantee and the Common Guarantee will not cover any such
payment when the Trust does not have sufficient funds on hand legally available
therefor. In such event, a holder of Capital Securities may institute a legal
proceeding directly against the Corporation to enforce its rights in respect of
such payment. See "Description of New Securities--Description of New Junior
Subordinated Debentures--Enforcement of Certain Rights By Holders of New Capital
Securities." The obligations of the Corporation under the Guarantee, the Common
Guarantee and the Junior Subordinated Debentures will be subordinate and junior
in right of payment to all Senior Indebtedness of the Corporation to the extent
and in the manner set forth in the Indenture and the Guarantees, respectively
(as defined in "Description of New Securities--Description of New Junior
Subordinated Debentures--Subordination").
The Trust Securities will be subject to mandatory redemption in a Like
Amount (as defined herein), (i) in whole but not in part, on the Stated Maturity
Date upon repayment of the Junior Subordinated Debentures at a redemption price
equal to the principal amount of, plus accrued interest on, the Junior
Subordinated Debentures (the "Maturity Redemption Price"), (ii) in whole but not
in part, at any time before June 15, 2008 (the "Initial Optional Prepayment
Date"), contemporaneously with the optional prepayment of the Junior
Subordinated Debentures, upon the occurrence and continuation of a Special Event
(as defined herein) at a redemption price equal to the Special Event Prepayment
Price (as defined below) (the "Special Event Redemption Price"), and (iii) in
whole or in part, on or after the Initial Optional Prepayment Date,
contemporaneously with the optional prepayment by the Corporation of the Junior
Subordinated Debentures, at a redemption price equal to the Optional Prepayment
Price (as defined below) (the "Optional Redemption Price"). Any of the Maturity
Redemption Price, the Special Event Redemption Price and the Optional Redemption
Price may be referred to herein as the "Redemption Price." See "Description of
New Securities--Description of New Capital Securities--Redemption."
Subject to the Corporation having received prior approval of the Board
of Governors of the Federal Reserve System (the "Federal Reserve") to do so if
then required under applicable capital guidelines or policies of the Federal
Reserve, the Junior Subordinated Debentures will be prepayable prior to the
Stated Maturity Date at the option of the Corporation (i) on or after the
Initial Optional Prepayment Date, in whole or in part, at a prepayment price
(the "Optional Prepayment Price") equal to 103.83% of the principal amount
thereof on the Initial Optional Prepayment Date, declining ratably on each June
15 thereafter to 100% on or after June 15, 2018, plus accrued interest thereon
to the date of prepayment, or (ii) at any time before the Initial Optional
Prepayment Date, in whole but not in part, upon the occurrence and continuation
of a Special Event, at a prepayment price (the "Special Event Prepayment Price")
equal to the greater of (a) 100% of the principal amount thereof or (b) the sum,
as determined by a Quotation Agent (as defined herein), of the present values of
the principal amount and premium payable as part of the Optional Prepayment
Price with respect to an optional redemption of such Junior Subordinated
Debentures on the Initial Optional Prepayment Date, together with scheduled
payments of interest from the prepayment date to the Initial Optional Prepayment
Date, in each case discounted to the prepayment date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate (as defined herein) plus, in either case, accrued and unpaid
interest thereon to the date of prepayment. Either of the Optional Prepayment
Price or the Special Event Prepayment Price may be referred to herein as the
"Prepayment Price." See "Description of New Securities--Description of New
Junior Subordinated Debentures--Optional Prepayment" and "--Special Event
Prepayment."
The Corporation, as the holder of the outstanding Common Securities,
will have the right at any time to dissolve the Trust and, after satisfaction of
liabilities to creditors of the Trust as required by applicable law, cause a
Like Amount of the Junior Subordinated Debentures to be distributed to the
holders of the Trust Securities in liquidation of the Trust, subject to (i) the
Corporation having received an opinion of counsel to the effect that such
distribution will not be a taxable event to holders of Capital Securities and
(ii) the prior approval of the Federal Reserve to do so if then required under
applicable capital guidelines or policies of the Federal Reserve. Unless the
Junior Subordinated Debentures are distributed to the holders of the Trust
Securities, in the event of a liquidation of the Trust as described herein,
after satisfaction of liabilities to creditors of the Trust as required by
applicable law, the holders of the Capital Securities generally will be entitled
to receive a Liquidation Amount of $1,000 per Capital Security plus accumulated
Distributions thereon to the date of payment. See "Description of New
Securities--Description of New Capital Securities--Liquidation of the Trust and
Distribution of Junior Subordinated Debentures," and "Certain Federal Income Tax
Considerations--Receipt of Junior Subordinated Debentures or Cash upon
Liquidation of the Trust."
The Trust is making the Exchange Offer of the New Capital Securities in
reliance on the position of the staff of the Division of Corporation Finance of
the Securities and Exchange Commission (the "Commission") as set forth in
certain interpretive letters addressed to third parties in other transactions.
Neither the Corporation nor the Trust has sought its own interpretive letter and
there can be no assurance that the staff of the Division of Corporation Finance
of the Commission would make a similar determination with respect to the
Exchange Offer as it has in such interpretive letters to third parties. Based on
these interpretations by the staff of the Division of Corporation Finance of the
Commission, and subject to the two immediately following sentences, the
Corporation and the Trust believe that New Capital Securities issued pursuant to
this Exchange Offer in exchange for Old Capital Securities may be offered for
resale, resold and otherwise transferred in $100,000 minimum principal amount by
a holder thereof (other than a holder who is a broker-dealer) without further
compliance with the registration and prospectus delivery requirements of the
Securities Act, provided that such New Capital Securities are acquired in the
ordinary course of such holder's business and that such holder is not
participating, and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the Securities Act) of
such New Capital Securities. However, any holder of Old Capital Securities who
is an "affiliate" of the Corporation or the Trust or who intends to participate
in the Exchange Offer for the purpose of distributing New Capital Securities, or
any broker-dealer who purchased Old Capital Securities from the Trust to resell
pursuant to Rule 144A under the Securities Act ("Rule 144A") or any other
available exemption under the Securities Act, (a) will not be able to rely on
the interpretations of the staff of the Division of Corporation Finance of the
Commission set forth in the above-mentioned interpretive letters, (b) will not
be permitted or entitled to tender such Old Capital Securities in the Exchange
Offer and (c) must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any sale or other transfer
of such Old Capital Securities unless such sale is made pursuant to an exemption
from such requirements. In addition, as described below, if any broker-dealer
holds Old Capital Securities acquired for its own account as a result of
market-making or other trading activities and exchanges such Old Capital
Securities for New Capital Securities, then such broker-dealer must deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resales of such New Capital Securities.
Each holder of Old Capital Securities who wishes to exchange Old
Capital Securities for New Capital Securities in the Exchange Offer will be
required to represent that (i) it is not an "affiliate" of the Corporation or
the Trust, (ii) any New Capital Securities to be received by it are being
acquired in the ordinary course of its business, (iii) it has no arrangement or
understanding with any person to participate in a distribution (within the
meaning of the Securities Act) of such New Capital Securities, and (iv) if such
holder is not a broker-dealer, such holder is not engaged in, and does not
intend to engage in, a distribution (within the meaning of the Securities Act)
of such New Capital Securities. In addition, the Corporation and the Trust may
require such holder, as a condition to such holder's eligibility to participate
in the Exchange Offer, to furnish to the Corporation and the Trust (or an agent
thereof) in writing information as to the number of "beneficial owners" (within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended)
on behalf of whom such holder holds the Capital Securities to be exchanged in
the Exchange Offer. Each broker-dealer that receives New Capital Securities for
its own account pursuant to the Exchange Offer must acknowledge that it acquired
the Old Capital Securities for its own account as the result of market-making
activities or other trading activities and must agree that it will deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resale of such New Capital Securities. The Letter of Transmittal states that by
so acknowledging and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act. Based on the position taken by the staff of the Division of Corporation
Finance of the Commission in the interpretive letters referred to above, the
Corporation and the Trust believe that broker-dealers who acquired Old Capital
Securities for their own accounts, as a result of market-making activities or
other trading activities ("Participating Broker-Dealers"), may fulfill their
prospectus delivery requirements with respect to the New Capital Securities
received upon exchange of such Old Capital Securities (other than Old Capital
Securities which represent an unsold allotment from the original sale of the Old
Capital Securities) with a prospectus meeting the requirements of the Securities
Act, which may be the prospectus prepared for an exchange offer so long as it
contains a description of the plan of distribution with respect to the resale of
such New Capital Securities. Accordingly, this Prospectus, as it may be amended
or supplemented from time to time, may be used by a Participating Broker-Dealer
during the period referred to below in connection with resales of New Capital
Securities received in exchange for Old Capital Securities where such Old
Capital Securities were acquired by such Participating Broker-Dealer for its own
account as a result of market-making or other trading activities. Subject to
certain provisions set forth in the Registration Rights Agreement, the
Corporation and the Trust have agreed that this Prospectus, as it may be amended
or supplemented from time to time, may be used by a Participating Broker-Dealer
in connection with resales of such New Capital Securities for a period ending
90-days after the Expiration Date (as defined herein) (subject to extension
under certain limited circumstances described below) or, if earlier, when all
such New Capital Securities have been disposed of by such Participating
Broker-Dealer. See "Plan of Distribution." However, a Participating
Broker-Dealer who intends to use this Prospectus in connection with the resale
of New Capital Securities received in exchange for Old Capital Securities
pursuant to the Exchange Offer must notify the Corporation or the Trust, or
cause the Corporation or the Trust to be notified, on or prior to the Expiration
Date, that it is a Participating Broker-Dealer. Such notice may be given in the
space provided for that purpose in the Letter of Transmittal or may be delivered
to the Exchange Agent at one of the addresses set forth herein under "The
Exchange Offer--Exchange Agent." Any Participating Broker-Dealer who is an
"affiliate" of the Corporation or the Trust may not rely on such interpretive
letters and must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction.
See "The Exchange Offer Resales of New Capital Securities."
In that regard, each Participating Broker-Dealer who surrenders Old
Capital Securities pursuant to the Exchange Offer will be deemed to have agreed,
by execution of the Letter of Transmittal, that, upon receipt of notice from the
Corporation or the Trust of the occurrence of any event or the discovery of any
fact which makes any statement contained or incorporated by reference in this
Prospectus untrue in any material respect or which causes this Prospectus to
omit to state a material fact necessary in order to make the statements
contained or incorporated by reference herein, in light of the circumstances
under which they were made, not misleading or of the occurrence of certain other
events specified in the Registration Rights Agreement, such Participating
Broker-Dealer will suspend the sale of New Capital Securities (or the New
Guarantee or the New Junior Subordinated Debentures, as applicable) pursuant to
this Prospectus until the Corporation or the Trust has amended or supplemented
this Prospectus to correct such misstatement or omission and has furnished
copies of the amended or supplemented Prospectus to such Participating
Broker-Dealer or the Corporation or the Trust has given notice that the sale of
the New Capital Securities (or the New Guarantee or the New Junior Subordinated
Debentures, as applicable) may be resumed, as the case may be. If the
Corporation or the Trust gives such notice to suspend the sale of the New
Capital Securities (or the New Guarantee or the New Junior Subordinated
Debentures, as applicable), it shall extend the 90-day period referred to above
during which Participating Broker-Dealers are entitled to use this Prospectus in
connection with the resale of New Capital Securities by the number of days
during the period from and including the date of the giving of such notice to
and including the date when Participating Broker-Dealers shall have received
copies of the amended or supplemented Prospectus necessary to permit resales of
the New Capital Securities or to and including the date on which the Corporation
or the Trust has given notice that the sale of New Capital Securities (or the
New Guarantee or the New Junior Subordinated Debentures, as applicable) may be
resumed, as the case may be.
Prior to the Exchange Offer, there has been only a limited secondary
market and no public market for the Old Capital Securities. The New Capital
Securities will be a new issue of securities for which there currently is no
market. Although the Initial Purchasers have informed the Corporation and the
Trust that they each currently intend to make a market in the New Capital
Securities, they are not obligated to do so, and any such market making may be
discontinued at any time without notice. Accordingly, there can be no assurance
as to the development or liquidity of any market for the New Capital Securities.
The Corporation and the Trust will not apply for listing of the New Capital
Securities on any securities exchange or for quotation through the National
Association of Securities Dealers Automated Quotation System.
Any Old Capital Securities not tendered and accepted in the Exchange
Offer will remain outstanding and will be entitled to all the same rights and
will be subject to the same limitations applicable thereto under the Declaration
(except for those rights which terminate upon consummation of the Exchange
Offer). Following consummation of the Exchange Offer, the holders of Old Capital
Securities will continue to be subject to all of the existing restrictions upon
transfer thereof and neither the Corporation nor the Trust will have any further
obligation to such holders (other than under certain limited circumstances) to
provide for registration under the Securities Act of the Old Capital Securities
held by them. To the extent that Old Capital Securities are tendered and
accepted in the Exchange Offer, a holder's ability to sell untendered Old
Capital Securities could be adversely affected. See "Risk Factors--Consequences
of a Failure to Exchange Old Capital Securities."
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ THIS PROSPECTUS
AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO
TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.
Old Capital Securities may be tendered for exchange on or prior to 5:00
p.m., New York City time, on ______, 1998 (such time on such date being
hereinafter called the "Expiration Date"), unless the Exchange Offer is extended
by the Corporation or the Trust (in which case the term "Expiration Date" shall
mean the latest date and time to which the Exchange Offer is extended). Tenders
of Old Capital Securities may be withdrawn at any time on or prior to the
Expiration Date. The Exchange Offer is not conditioned upon any minimum
Liquidation Amount of Old Capital Securities being tendered for exchange.
However, the Exchange Offer is subject to certain events and conditions which
may be waived by the Corporation or the Trust and to the terms and provisions of
the Registration Rights Agreement. Old Capital Securities may be tendered in
whole or in part having an aggregate Liquidation Amount of not less than
$100,000 (100 Capital Securities) or any integral multiple of $1,000 Liquidation
Amount (one Capital Security) in excess thereof. The Corporation has agreed to
pay all expenses of the Exchange Offer. See "The Exchange Offer--Fees and
Expenses." Holders of the Old Capital Securities whose Old Capital Securities
are accepted for exchange will not receive Distributions on such Old Capital
Securities and will be deemed to have waived the right to receive any
Distributions on such Old Capital Securities accumulated from and after June 19,
1998. See "The Exchange Offer--Distributions on New Capital Securities."
Neither the Corporation nor the Trust will receive any cash proceeds
from the issuance of the New Capital Securities offered hereby. No
dealer-manager is being used in connection with this Exchange Offer. See "Use of
Proceeds" and "Plan of Distribution."
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THIS EXCHANGE
OFFER AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION OR THE TRUST. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE CORPORATION OR THE TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OR A SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR ANYONE TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION.
<PAGE>
TABLE OF CONTENTS
Page
Available Information...................................................... 8
Incorporation of Certain Documents by Reference............................ 9
Summary....................................................................10
Risk Factors...............................................................18
HUBCO, Inc.................................................................22
Use of Proceeds............................................................24
Ratios of Earnings to Fixed Charges........................................24
Capitalization.............................................................26
Summary Financial Data.....................................................27
The Trust..................................................................30
The Exchange Offer.........................................................30
Description of New Securities..............................................40
Description of Old Securities..............................................61
Relationship Among the New Capital Securities, the
New Junior Subordinated Debentures and the New Guarantee..................61
Certain Federal Income Tax Considerations..................................63
ERISA Considerations.......................................................67
Plan of Distribution.......................................................67
Validity of New Securities.................................................68
Experts....................................................................68
<PAGE>
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities of the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional
offices of the Commission located at 7 World Trade Center, 13th Floor, Suite
1300, New York, New York 10048 and Suite 1400, Citicorp Center, 14th Floor, 500
West Madison Street, Chicago, Illinois 60661. Copies of such material can also
be obtained at prescribed rates by writing to the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Such
information may also be accessed electronically by means of the Commission's
home page on the Internet (http://www.sec.gov.). In addition, such reports,
proxy statements and other information concerning the Corporation can be
inspected at the offices of the National Association of Securities Dealers,
Inc., ("NASD") 1735 K Street, N.W., Washington, D.C. 20006.
No separate financial statements of the Trust have been included
herein. The Corporation and the Trust do not consider that such financial
statements would be material to holders of the Capital Securities because the
Trust is a newly formed special purpose entity, has no operating history or
independent operations and is not engaged in and does not propose to engage in
any activity other than holding as trust assets the Junior Subordinated
Debentures and issuing the Trust Securities. See "HUBCO Capital Trust II" and
"Description of New Securities." In addition, the Corporation does not expect
that the Trust will file reports under the Exchange Act with the Commission.
This Prospectus constitutes a part of a registration statement on Form
S-4 (the "Registration Statement") filed by the Corporation and the Trust with
the Commission under the Securities Act. This Prospectus does not contain all
the information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission, and
reference is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the Corporation, the
Trust and the New Securities. Any statements contained herein concerning the
provisions of any document are not necessarily complete, and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by HUBCO File No. 0-10699 with the
Commission are incorporated herein by reference:
1. Annual Report on Form 10-K for the year ended December 31,
1997, filed on March 31, 1998, Amendment No. 1 to the Annual
Report on Form 10-K/A filed on August 14, 1998, as
supplemented by Current Reports on Form 8-K filed on July 10,
1998 and September 30, 1998.
2. Quarterly Report on Form 10-Q for quarters ended March 31,
1998, filed on May 15, 1998 and June 30, 1998, filed on August
14, 1998.
3. Current Reports on Form 8-K filed with the Commission on
January 14, 1998, January 16, 1998, February 13, 1998, March
20, 1998, March 31, 1998 (announced IBS Financial Corp. and
Dime Financial Corporation acquisitions), April 2, 1998
(announced Community Financial Holding Corporation and 23
branches of First Union National Bank acquisitions), April 20,
1998, June 2, 1998, June 11, 1998, June 26, 1998, July 2,
1998, July 10, 1998, July 15, 1998, July 23, 1998, August 27,
1998, and September 30, 1998 and the Current Reports on Form
8-K/A filed with the Commission on May 15, 1998, June 29,
1998, July 6, 1998, July 10, 1998 and July 17, 1998.
All documents subsequently filed by the Corporation pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to
the termination of the offering of the New Securities offered hereby shall be
deemed to be incorporated by reference into this Prospectus and to be a part of
this Prospectus from the date of filing of such document. Any statement
contained herein or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
As used herein, the terms "Prospectus" and "herein" mean this
Prospectus including the documents incorporated or deemed to be incorporated
herein by reference, as the same may be amended, supplemented or otherwise
modified from time to time. Statements contained in this Prospectus as to the
contents of any contract or other document referred to herein do not purport to
be complete, and where reference is made to the particular provisions of such
contract or other document, such provisions are qualified in all respects by
reference to all of the provisions of such contract or other document. The
Corporation will provide without charge to any person to whom this Prospectus is
delivered, on the written or oral request of such person, a copy of any or all
of the foregoing documents incorporated by reference herein (other than exhibits
not specifically incorporated by reference into the texts of such documents), as
well as a copy of the Declaration, the Indenture, the New Junior Subordinated
Debentures, the Guarantee and the other offering documents described herein.
Requests for such documents should be directed to: HUBCO, Inc., 1000 MacArthur
Boulevard, Mahwah, New Jersey 07430, Attention: D.
Lynn Van Borkulo-Nuzzo, Telephone (201) 236-2641.
CONTAINED WITHIN AND INCORPORATED BY REFERENCE IN THIS OFFERING
MEMORANDUM ARE CERTAIN FORWARD-LOOKING STATEMENTS WITH RESPECT TO THE FINANCIAL
CONDITION, RESULTS OF OPERATIONS AND BUSINESS OF HUBCO. SUCH STATEMENTS ARE NOT
HISTORICAL FACTS AND INVOLVE CERTAIN RISKS AND UNCERTAINTIES. ACTUAL RESULTS MAY
DIFFER MATERIALLY FROM THE RESULTS DISCUSSED IN THESE FORWARD-LOOKING
STATEMENTS. FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY USE OF
FORWARD-LOOKING TERMINOLOGY, SUCH AS "EXPECT", "BELIEVE", OR "ANTICIPATE", OR
EXPRESSIONS OF CONFIDENCE LIKE "STRONG" OR "ON-GOING", OR SIMILAR STATEMENTS OR
VARIATIONS OF SUCH TERMS. FACTORS THAT MIGHT CAUSE A DIFFERENCE INCLUDE, BUT ARE
NOT LIMITED TO, CHANGES IN INTEREST RATES, ECONOMIC CONDITIONS, DEPOSIT AND LOAN
GROWTH, LOAN LOSS PROVISIONS, AND CUSTOMER RETENTION, AS WELL AS THE IMPACT OF
THE EXCHANGE OFFER AND ANY FUTURE ACQUISITIONS AND OTHER TRANSACTIONS, ALONG
WITH FACTORS RESULTING FROM OR EXACERBATED BY THESE TRANSACTIONS. THE COMPANY
ASSUMES NO OBLIGATION FOR UPDATING ANY SUCH FORWARD-LOOKING STATEMENTS AT ANY
TIME.
<PAGE>
SUMMARY
The following is a summary of certain information contained elsewhere
in this Prospectus. Reference is made to, and this summary is qualified in its
entirety by, the more detailed information and financial statements, including
the notes thereto, contained elsewhere or incorporated by reference in this
Prospectus.
HUBCO Capital Trust II
The Trust is a statutory business trust formed under Delaware law
pursuant to (i) a Declaration of Trust, dated as of June 3, 1998 by the
Corporation, as Sponsor, The Bank of New York (Delaware) as Delaware Trustee,
and the Administrative Trustees named therein, and (ii) the filing of a
certificate of trust with the Delaware Secretary of State on June 3, 1998. The
Trust's affairs are currently governed by the Amended and Restated Declaration
of Trust, dated June 19, 1998 by the Corporation, as Sponsor, The Bank of New
York (Delaware), as Delaware trustee, The Bank of New York, as property trustee
(the "Declaration") and are conducted by the Issuer Trustees: the Property
Trustee, the Delaware Trustee, and the two individual Administrative Trustees
who are employees or officers of or affiliated with the Corporation. The Trust
exists for the exclusive purposes of (i) issuing and selling the Trust
Securities, (ii) using the proceeds from the sale of the Trust Securities to
acquire the Junior Subordinated Debentures issued by the Corporation, and (iii)
engaging in only those other activities necessary, advisable or incidental
thereto (such as registering the transfer of the Capital Securities).
Accordingly, the Junior Subordinated Debentures will be the sole assets of the
Trust, and payments under the Junior Subordinated Debentures will be the sole
revenue of the Trust. All of the Common Securities will be owned by the
Corporation.
HUBCO, Inc.
HUBCO is a New Jersey corporation and registered bank holding company
whose principal operating subsidiaries are Hudson United Bank ("HUB"), a New
Jersey-chartered commercial bank, Lafayette American Bank ("Lafayette"), a
Connecticut-chartered commercial bank, and Bank of the Hudson ("BTH"), a New
York state-based federally-chartered savings bank. HUBCO's corporate
headquarters is located at 1000 MacArthur Boulevard, Mahwah, New Jersey 07430
and its telephone number is (201) 236-2600. HUB's corporate headquarters is
located at 3100 Bergenline Avenue, Union City, New Jersey 07084. Lafayette's
corporate headquarters is located at 1000 Lafayette Boulevard, Bridgeport,
Connecticut 06604. BTH's corporate headquarters is located at 249 Main Mall,
Poughkeepsie, New York 12601.
HUB is a full-service commercial bank which primarily serves small and
mid-sized businesses and consumers through 92 branches in Northern New Jersey.
Lafayette is a full-service commercial bank which serves primarily
small-to-medium-sized business firms as well as individuals through 51 banking
offices located mainly in Fairfield, Hartford, Middlesex and New Haven counties
in Connecticut. On April 24, 1998, HUBCO acquired Poughkeepsie Financial Corp.
("PFC") and PFC's subsidiary, BTH became HUBCO's New York-based banking
subsidiary. On May 29, 1998, HUBCO acquired MSB Bancorp, Inc. ("MSB") and merged
MSB's subsidiary, MSB Bank into BTH. BTH is a community savings bank serving the
Mid-Hudson Valley area of New York through 32 branches in Dutchess, Orange,
Putnam and Rockland Counties, as well as six residential loan origination
offices in five New York counties and New Jersey. HUBCO anticipates converting
BTH into a state-chartered commercial bank at some point in the future. On June
24, 1998 HUBCO completed the purchase of 21 branches of First Union National
Bank located in New Jersey and Connecticut with deposits of $242.9 million in
the aggregate (the "Completed Branch Purchase"). On August 14, 1998, HUBCO
acquired IBSF Financial Corp. ("IBSF") and Community Financial Holding
Corporation ("CFHC") and merged their respective banking subsidiaries,
Inter-Boro Savings and Loan Association (the "Association") and Community
National Bank of New Jersey ("CNB") into HUB. On August 21, 1998 HUBCO acquired
Dime Financial Holding Corporation ("DFC") and merged its banking subsidiary The
Dime Savings Bank of Wallingford ("Dime") into Lafayette. Based on assets as of
June 30, 1998, HUBCO was the fourth largest commercial banking company
headquartered in New Jersey.
HUBCO's strategy has been to enhance profitability and build market
share through both internal growth and acquisitions. As of the date of this
Proxy Statement-Prospectus, HUBCO will have completed over 25 acquisitions since
1990, and HUBCO will have added over 140 branches and over $6 billion in assets
through acquisitions this decade.
For additional information, see "Available Information"; "Incorporation
of Certain Documents by Reference"; "HUBCO, Inc.--General".
<PAGE>
<TABLE>
<CAPTION>
The Exchange Offer
<S> <C>
The Exchange Offer..................................... Up to $50,000,000 aggregate Liquidation Amount of New
Capital Securities are being offered in exchange for a
like aggregate Liquidation Amount of Old Capital
Securities. Old Capital Securities may be tendered for
exchange in whole or in part in a Liquidation Amount of
$100,000 (100 Capital Securities) or any integral multiple
of $1,000 (one Capital Security) in excess thereof. The
Corporation and the Trust are making the Exchange Offer in
order to satisfy their obligations under the Registration
Rights Agreement relating to the Old Capital Securities.
For a description of the procedures for tendering Old
Capital Securities, see "The Exchange Offer--Procedures
for Tendering Old Capital Securities."
Expiration Date........................................ 5:00 p.m., New York City time, on , 1998, unless
the Exchange Offer is extended by the Corporation or the
Trust (in which case the Expiration Date will be the
latest date and time to which the Exchange Offer is
extended). See "The Exchange Offer--Terms of the Exchange
Offer."
Conditions to the Exchange Offer....................... The Exchange Offer is subject to certain conditions, which
may be waived by the Corporation and the Trust in their
sole discretion. The Exchange Offer is not conditioned
upon any minimum Liquidation Amount of Old Capital
Securities being tendered. See "The Exchange
Offer--Conditions to the Exchange Offer."
Offer.................................................. The Corporation and the Trust reserve the right in their
sole and absolute discretion, subject to applicable law,
at any time and from time to time, (i) to delay the
acceptance of the Old Capital Securities for exchange,
(ii) to terminate the Exchange Offer if certain specified
conditions have not been satisfied, (iii) to extend the
Expiration Date of the Exchange Offer and retain all Old
Capital Securities tendered pursuant to the Exchange
Offer, subject, however, to the right of holders of Old
Capital Securities to withdraw their tendered Old Capital
Securities, or (iv) to waive any condition or otherwise
amend the terms of the Exchange Offer in any respect. See
"The Exchange Offer--Terms of the Exchange Offer."
Withdrawal Rights...................................... Tenders of Old Capital Securities may be withdrawn at any
time on or prior to the Expiration Date by delivering a
written notice of such withdrawal to the Exchange Agent in
conformity with certain procedures set forth below under
"The Exchange Offer--Withdrawal Rights."
Procedures for Tendering Old Capital Securities........ Tendering holders of Old Capital Securities must complete
and sign a Letter of Transmittal in accordance with the
instructions contained therein and forward the same by
mail, facsimile or hand delivery, together with any other
required documents, to the Exchange Agent, either with the
Old Capital Securities to be tendered or in compliance
with the specified procedures for guaranteed delivery of
Old Capital Securities. Certain brokers, dealers,
commercial banks, trust companies and other nominees may
also effect tenders by book-entry transfer. Holders of Old
Capital Securities registered in the name of a broker,
dealer, commercial bank, trust company or other nominee
are urged to contact such person promptly if they wish to
tender Old Capital Securities pursuant to the Exchange
Offer. See "The Exchange Offer--Procedures for Tendering
Old Capital Securities."
Letters of Transmittal and certificates representing Old
Capital Securities should not be sent to the Corporation
or the Trust. Such documents should only be sent to the
Exchange Agent.
Resales of New Capital Securities...................... The Corporation and the Trust are making the Exchange
Offer in reliance on the position of the staff of the
Division of Corporation Finance of the Commission as set
forth in certain interpretive letters addressed to third
parties in other transactions. However, neither the
Corporation nor the Trust has sought its own interpretive
letter and there can be no assurance that the staff of the
Division of Corporation Finance of the Commission would
make a similar determination with respect to the Exchange
Offer as it has in such interpretive letters to third
parties. Based on these interpretations by the staff of
the Division of Corporation Finance of the Commission, and
subject to the two immediately following sentences, the
Corporation and the Trust believe that New Capital
Securities issued pursuant to this Exchange Offer in
exchange for Old Capital Securities may be offered for
resale, resold and otherwise transferred by a holder
thereof (other than a holder who is a broker-dealer)
without further compliance with the registration and
prospectus delivery requirements of the Securities Act,
provided that such New Capital Securities are acquired in
the ordinary course of such holder's business and that
such holder is not participating, and has no arrangement
or understanding with any person to participate, in a
distribution (within the meaning of the Securities Act) of
such New Capital Securities. However, any holder of Old
Capital Securities who is an "affiliate" of the
Corporation or the Trust or who intends to participate in
the Exchange Offer for the purpose of distributing the New
Capital Securities, or any broker-dealer who purchased the
Old Capital Securities from the Trust to resell pursuant
to Rule 144A or any other available exemption under the
Securities Act, (a) will not be able to rely on the
interpretations of the staff of the Division of
Corporation Finance of the Commission set forth in the
above-mentioned interpretive letters, (b) will not be
permitted or entitled to tender such Old Capital
Securities in the Exchange Offer and (c) must comply with
the registration and prospectus delivery requirements of
the Securities Act in connection with any sale or other
transfer of such Old Capital Securities unless such sale
is made pursuant to an exemption from such requirements.
In addition, as described below, if any broker-dealer
holds Old Capital Securities acquired for its own account
as a result of market-making or other trading activities
and exchanges such Old Capital Securities for New Capital
Securities, then such broker-dealer must deliver a
prospectus meeting the requirements of the Securities Act
in connection with any resales of such New Capital
Securities.
Each holder of Old Capital Securities who wishes to exchange
Old Capital Securities for New Capital Securities in the Exchange
Offer will be required to represent that (i) it is not an
"affiliate" of the Corporation or the Trust, (ii) any New Capital
Securities to be received by it are being acquired in the
ordinary course of its business, (iii) it has no arrangement or
understanding with any person to participate in a distribution
(within the meaning of the Securities Act) of such New Capital
Securities, and (iv) if such holder is not a broker-dealer,
such holder is not engaged in, and does not intend to engage
in, a distribution (within the meaning of the Securities Act)
of such New Capital Securities. Each broker-dealer that receives
New Capital Securities for its own account pursuant to the
Exchange Offer must acknowledge that it acquired the Old Capital
Securities for its own account as the result of market-making
activities or other trading activities and must agree that it will
deliver a prospectus meeting the requirements of the Securities
Act in connection with any resale of such New Capital Securities.
The Letter of Transmittal states that, by so acknowledging and
by delivering a prospectus, a broker-dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the
Securities Act. Based on the position taken by the staff of
the Division of Corporation Finance of the Commission in
the interpretive letters referred to above, the Corporation and
the Trust believe that Participating Broker-Dealers
who acquired Old Capital Securities for their own accounts as a
result of market-making activities or other trading activities may
fulfill their prospectus delivery requirements with respect to
the New Capital Securities received upon exchange of such
Old Capital Securities (other than Old Capital Securities which
represent an unsold allotment from the original sale of
the Old Capital Securities) with a prospectus meeting the
requirements of the Securities Act, which may be the prospectus
prepared for an exchange offer so long as it contains a description
of the plan of distribution with respect to the resale of such New
Capital Securities. Accordingly, this Prospectus, as it may be
amended or supplemented from time to time, may be used by a
Participating Broker-Dealer in connection with resales of New
Capital Securities received in exchange for Old Capital
Securities where such Old Capital Securities were
acquired by such Participating Broker-Dealer for its own
account as a result of market-making or other trading
activities. Subject to certain provisions set forth in the
Registration Rights Agreement and to the limitations
described below under "The Exchange Offer Resales of New
Capital Securities," the Corporation and the Trust have
agreed that this Prospectus, as it may be amended or
supplemented from time to time, may be used by a Participating
Broker-Dealer in connection with resales of such New Capital
Securities for a period ending 90-days after the Expiration
Date (subject to extension under certain limited circumstances)
or, if earlier, when all such New Capital Securities have
been disposed of by such Participating Broker-Dealer. See "Plan of
Distribution." Any Participating Broker-Dealer who is an
"affiliate" of the Corporation or the Trust may not rely on such
interpretive letters and must comply with the registration and
prospectus delivery requirements of the Securities Act in
connection with any resale transaction. See "The Exchange
Offer Resales of New Capital Securities."
Exchange Agent......................................... The exchange agent with respect to the Exchange Offer is
The Bank of New York (the "Exchange Agent"). The
addresses, and telephone and facsimile numbers, of the
Exchange Agent are set forth in "The Exchange
Offer--Exchange Agent" and in the Letter of Transmittal.
Use of Proceeds........................................ Neither the Corporation nor the Trust will receive any
cash proceeds from the issuance of the New Capital
Securities offered hereby. See "Use of Proceeds."
Certain Federal Income Tax Considerations; ERISA
Considerations......................................... The exchange of Old Capital Securities for Exchange Capital
Securities will not be a taxable exchange for federal income
tax purposes, and holders should not recognize any gain or loss
or any interest income as a result of such exchange.
Holders of Old Capital Securities should review the
information set forth under "Certain Federal Income Tax
Considerations" and "ERISA Considerations" prior to
tendering Old Capital Securities in the Exchange Offer.
The New Capital Securities
Securities Offered..................................... Up to $50,000,000 aggregate Liquidation Amount of the
Trust's New Capital Securities have been registered under
the Securities Act (Liquidation Amount $1,000 per New
Capital Security). The New Capital Securities will be
issued, and the Old Capital Securities were issued, under
the Declaration. The New Capital Securities and any Old
Capital Securities which remain outstanding after
consummation of the Exchange Offer will vote together as a
single class for purposes of determining whether holders
of the requisite percentage in outstanding Liquidation
Amount thereof have taken certain actions or exercised
certain rights under the Declaration. See "Description of
New Securities--Description of New Capital
Securities--Voting Rights; Amendment of the Declaration."
The terms of the New Capital Securities are identical in
all material respects to the terms of the Old Capital
Securities, except that the New Capital Securities have
been registered under the Securities Act and therefore
will not be subject to certain restrictions on transfer
applicable to the Old Capital Securities, other than to
require minimum transfers thereof to be in blocks of
$100,000 Liquidation Amount, and will not provide for any
increase in the Distribution rate thereon. See "The
Exchange Offer--Purpose of the Exchange Offer,"
"Description of New Securities" and "Description of Old
Securities."
Holders of the New Capital Securities are entitled to receive
cumulative cash Distributions at an annual rate of 7.65% on the
Liquidation Amount of $1,000 per New Capital Security,
accruing from June 19, 1998 and (subject to the possible
extension of Distribution payment periods described herein) will be
payable semi-annually in arrears on June 15 and December 15 of each
year, commencing December 15, 1998. See "Description of New
Securities--Distributions".
Distribution Dates..................................... June 15 and December 15 of each year, commencing December
15, 1998.
Extension Periods...................................... Distributions on the New Capital Securities will be
deferred for the duration of any Extension Period elected
by the Corporation with respect to the payment of interest
on the New Junior Subordinated Debentures. No Extension
Period will exceed 10 consecutive semi-annual periods or
extend beyond the Stated Maturity Date. See "Description
of New Securities--Description of New Junior Subordinated
Debentures--Option to Extend Interest Payment Date" and
"Certain Federal Income Tax Considerations--Interest
Income and Original Issue Discount."
Ranking................................................ The New Capital Securities will rank pari passu, and
payments thereon will be made pro rata, with the Old
Capital Securities and the Common Securities except as
described under "Description of New
Securities--Description of New Capital
Securities--Subordination of Common Securities." The New
Junior Subordinated Debentures will rank pari passu with
the Old Junior Subordinated Debentures, and all other
junior subordinated debentures which have been and will
be issued by the Corporation (the "Other Debentures") and
which have been and may be issued and sold to other trusts
previously established or to be established by the
Corporation, in each case similar to the Trust (the "Other
Trusts"), and will be unsecured and subordinate and junior
in right of payment to all Senior Indebtedness to the
extent and in the manner set forth in the Indenture. See
"Description of New Securities--Description of New Junior
Subordinated Debentures." The New Guarantee will rank
pari passu with the Old Guarantee, and all other
guarantees issued by the Corporation with respect to
capital securities issued or to be issued by Other Trusts
(the "Other Guarantees") and will constitute an unsecured
obligation of the Corporation and will rank subordinate
and junior in right of payment to all Senior Indebtedness
to the extent and in the manner set forth in the Guarantee
Agreement. See "Description of New
Securities--Description of New Guarantee."
Redemption............................................. The Trust Securities are subject to mandatory redemption
in whole but not in part, on the Stated Maturity Date upon
repayment of the Junior Subordinated Debentures, in whole
but not in part, at any time contemporaneously with the
optional prepayment of the Junior Subordinated Debentures
by the Corporation upon the occurrence and continuation of
a Special Event and, in whole or in part, at any time on
or after the Initial Optional Prepayment Date
contemporaneously with the optional prepayment by the
Corporation of the Junior Subordinated Debentures, in each
case at the applicable Redemption Price. See "Description
of New Securities--Description of New Capital
Securities--Redemption."
ERISA Considerations................................... Prospective purchasers who invested the assets of an
employee benefit plan subject to Title I of ERISA or a
plan or individual retirement account subject to Section
4975 of the Code for their purchase of Capital Securities
should carefully consider the information set forth under
"ERISA Considerations".
Rating................................................. The Old Capital Securities were rated "BBB-" by Fitch
Investors Service, L.P. A security rating is not a
recommendation to buy, sell or hold securities and may be
subject to revision or withdrawal at any time by the
assigning rating organization.
Absence of Market for the New Capital Securities....... The New Capital Securities will be a new issue of
securities for which there currently is no market.
Although Keefe, Bruyette & Woods, Inc., the initial
purchaser of the Old Capital Securities (the "Initial
Purchaser"), has informed the Corporation and the Trust
that it intends to make a market in the New Capital
Securities, the Initial Purchaser not obligated to do so,
and any such market making may be discontinued at any time
without notice. Accordingly, there can be no assurance as
to the development or liquidity of any market for the New
Capital Securities. The Trust and the Corporation will
not apply for listing of the New Capital Securities on any
securities exchange or for quotation through the National
Association of Securities Dealers Automated Quotation
System ("NASDAQ"). See "Plan of Distribution."
Restrictions on Transfer............................... The Old Capital Securities were, and the New Capital
Securities will be, issued and may be transferred only in
blocks having a Liquidation Amount of not less than
$100,000 (100 Old Capital Securities or New Capital
Securities, as the case may be). Any such transfer of the
Old Capital Securities or the New Capital Securities in a
block having a Liquidation Amount of less than $100,000
shall be deemed to be void and of no legal effect
whatsoever. Any such transferee shall be deemed not to be
the holder of such Old Capital Securities or New Capital
Securities for any purpose, including, but not limited to,
the receipt of Distributions on such Old Capital
Securities or New Capital Securities, and such transferee
shall be deemed to have no interest whatsoever in such Old
Capital Securities or New Capital Securities.
</TABLE>
<PAGE>
RISK FACTORS
Prospective investors should consider carefully, in addition to the
other information contained in this Prospectus, the following factors in
connection with the Exchange Offer and the New Capital Securities offered
hereby.
Consequences of a Failure to Exchange Old Capital Securities
The Old Capital Securities have not been registered under the
Securities Act or any state securities laws and therefore may not be offered,
sold or otherwise transferred except in compliance with the registration
requirements of the Securities Act and any other applicable securities laws, or
pursuant to an exemption therefrom or in a transaction not subject thereto, and
in each case in compliance with certain other conditions and restrictions. Old
Capital Securities which remain outstanding after consummation of the Exchange
Offer will continue to bear a legend reflecting such restrictions on transfer.
In addition, upon consummation of the Exchange Offer, holders of Old Capital
Securities which remain outstanding will not be entitled to any rights to have
such Old Capital Securities registered under the Securities Act or to any
similar rights under the Registration Rights Agreement (subject to certain
limited exceptions). The Corporation and the Trust do not intend to register
under the Securities Act any Old Capital Securities which remain outstanding
after consummation of the Exchange Offer (subject to such limited exceptions, if
applicable). To the extent that Old Capital Securities are tendered and accepted
in the Exchange Offer, a holder's ability to sell untendered Old Capital
Securities could be adversely affected. In addition, although the Old Capital
Securities have been designated for trading in the PORTAL market, to the extent
that Old Capital Securities are tendered and accepted in connection with the
Exchange Offer, any trading market for Old Capital Securities which remain
outstanding after the Exchange Offer could be adversely affected.
The New Capital Securities and any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer will vote together as a
single class for purposes of determining whether holders of the requisite
percentage in outstanding Liquidation Amount thereof have taken certain actions
or exercised certain rights under the Declaration. See "Description of New
Securities--Description of New Capital Securities--Voting Rights; Amendment of
the Declaration."
The Old Capital Securities provide, among other things, that, if a
registration statement relating to the Exchange Offer has not been filed by
March 31, 1999 and declared effective by April 30, 1999, the Distribution rate
borne by the Old Capital Securities commencing on April 1, 1999 will increase by
0.25% per annum until the Exchange Offer is consummated. Upon consummation of
the Exchange Offer, holders of Old Capital Securities will not be entitled to
any increase in the Distribution rate thereon or any further registration rights
under the Registration Rights Agreement, except under limited circumstances. See
"Description of Old Capital Securities."
Exchange Offer Procedures
Issuance of the New Capital Securities in exchange for Old Capital
Securities pursuant to the Exchange Offer will be made only after a timely
receipt by the Trust of such Old Capital Securities, a properly completed and
duly executed Letter of Transmittal and all other required documents. Therefore,
holders of the Old Capital Securities desiring to tender such Old Capital
Securities in exchange for New Capital Securities should allow sufficient time
to ensure timely delivery. Neither the Corporation nor the Trust is under any
duty to give notification of defects or irregularities with respect to the
tenders of Old Capital Securities for exchange.
Ranking of Subordinated Obligations under the Guarantee and the Junior
Subordinated Debentures
The obligations of the Corporation under the Guarantee and under the
Junior Subordinated Debentures will be unsecured and subordinate and rank junior
in right of payment to all present and future Senior Indebtedness of the
Corporation to the extent and in the manner set forth in the Indenture and the
Guarantee, respectively. No payment may be made of the principal of, or premium,
if any, or interest on the Junior Subordinated Debentures, or in respect of any
redemption, retirement, purchase or other acquisition of any of the Junior
Subordinated Debentures, at any time when (i) there shall have occurred and be
continuing a default in any payment in respect of any Senior Indebtedness, or
there has been an acceleration of the maturity thereof because of a default or
(ii) in the event of the acceleration of the maturity of the Junior Subordinated
Debentures until payment has been made on all Allocable Amounts of Senior
Indebtedness (as defined under "Description of Junior Subordinated
Debentures--Subordination"). At June 30, 1998 the aggregate principal amount of
outstanding Senior Indebtedness of the Corporation was approximately $100
million. The obligations of the Corporation under the Guarantee and under the
Junior Subordinated Debentures also rank pari passu with other junior
subordinated debentures which the Corporation has issued, or may issue in the
future. In connection with the organization of HUBCO Capital Trust I on January
18, 1997 $50,000,000 of trust preferred securities were sold for which a similar
junior subordinated debenture and guarantee were issued by the Corporation.
Because the Corporation is a bank holding company, the right of the Corporation
to participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise (and thus the ability of
holders of the Capital Securities to benefit indirectly from such distribution)
is subject to the prior claims of creditors of that subsidiary, except to the
extent that the Corporation may itself be recognized as a creditor of that
subsidiary. Accordingly, the Capital Securities effectively will be subordinated
to all existing and future liabilities, including deposits, of the bank
subsidiaries of the Corporation (the "Banks") and holders of Capital Securities
should look only to the assets of the Corporation for payments of the Capital
Securities. In addition, the Banks are subject to certain restrictions imposed
by federal law on any extensions of credit to, and certain other transactions
with, the Corporation and certain other affiliates, and on investments in stock
or other securities thereof. Such restrictions prevent the Corporation and such
other affiliates from borrowing from the Banks unless the loans are secured by
various types of collateral. Further, such secured loans, other transactions and
investments by any of the Banks are generally limited in amount as to the
Corporation and as to each of such other affiliates to 10% of such Bank's
capital and surplus and as to the Corporation and all of such other affiliates
to an aggregate of 20% of such Bank's capital and surplus. In addition, payment
of dividends to the Corporation by the Banks is subject to ongoing review by
banking regulators and is subject to various statutory limitations and in
certain circumstances requires approval by banking regulatory authorities. At
June 30, 1998, approximately $280.0 million was available for payment of
dividends to the Corporation from the Banks without affecting the Banks' current
classifications as "well capitalized" banks under federal bank regulatory
capital guidelines and without regulatory approval. However, no assurances can
be given that the Banks will have funds available to pay dividends to the
Corporation at any particular time in the future. None of the Indenture, the
Guarantee, the Common Guarantee or the Declaration places any limitation on the
amount of secured or unsecured debt, including Senior Indebtedness, that may be
incurred by the Corporation or any of its subsidiaries. See "Description of New
Securities--Description of New Guarantee--Status of New Guarantee" and
"Description of New Junior Subordinated Debentures--Subordination."
The ability of the Trust to pay amounts due on the Capital Securities
is dependent upon the Corporation making payments on the Junior Subordinated
Debentures as and when required.
Option to Extend Interest Payment Period; Tax Considerations
So long as no Debenture Event of Default (see "Description of New
Junior Subordinated Debentures -- Debentures Events of Default") shall have
occurred and be continuing, the Corporation will have the right under the
Indenture to defer payments of interest on the Junior Subordinated Debentures at
any time or from time to time for a period not exceeding 10 consecutive
semi-annual periods with respect to each Extension Period, provided that no
Extension Period may extend beyond the Stated Maturity Date. Upon any such
deferral, semi-annual Distributions on the Capital Securities by the Trust will
be deferred (and the amount of Distributions to which holders of the Capital
Securities are entitled will accumulate additional Distributions thereon at the
rate of 7.65% per annum, compounded semi-annually) from the relevant payment
date for such Distributions during any such Extension Period.
The Corporation may extend any existing Extension Period, provided that
such extension does not cause such Extension Period to exceed 10 consecutive
semi-annual periods, including the first such semi-annual period during such
extension period, or to extend beyond the Stated Maturity Date. Upon the
expiration of any Extension Period and the payment of all interest then accrued
and unpaid on the Junior Subordinated Debentures (together with interest thereon
at the annual rate of 7.65%, compounded semi-annually, to the extent permitted
by applicable law), the Corporation may elect to begin a new Extension Period,
subject to the above requirements. There is no limitation on the number of times
that the Corporation may elect to begin an Extension Period. See "Description of
New Securities--Description of New Capital Securities--Distributions" and
"--Description of New Junior Subordinated Debentures--Option to Extend Interest
Payment Period."
The Corporation has no current plan to exercise its right to defer
payments of interest on the Junior Subordinated Debentures. However, should the
Corporation exercise its right to defer payments of interest on the Junior
Subordinated Debentures, each holder of Capital Securities will be required to
accrue income (as original issue discount ("OID")) in respect of the deferred
stated interest allocable to its Capital Securities for United States federal
income tax purposes, which will be allocated but not distributed to holders of
Capital Securities. As a result, during an Extension Period, each holder of
Capital Securities will recognize income for United States federal income tax
purposes in advance of the receipt of cash and will not receive the cash related
to such income from the Trust if the holder disposes of the Capital Securities
prior to the record date for the payment of Distributions thereafter. See
"Certain Federal Income Tax Considerations--Interest Income and Original Issue
Discount" and "--Sales of Capital Securities."
Should the Corporation elect to exercise its right to defer payments of
interest on the Junior Subordinated Debentures, the market price of the Capital
Securities is likely to be affected. A holder that disposes of its Capital
Securities during an Extension Period, therefore, might not receive the same
return on its investment as a holder that continues to hold its Capital
Securities. In addition, the mere existence of the Corporation's right to defer
payments of interest on the Junior Subordinated Debentures may cause the market
price of the Capital Securities to be more volatile than the market prices of
other securities that are not subject to such deferrals.
Redemption or Distribution; Tax Changes
Upon the occurrence and continuation of a Special Event (including a
Tax Event or a Regulatory Capital Event, in each case, as defined under
"Description of New Securities-Description of New Junior Subordinated
Debentures-Special Event Prepayment"), the Corporation will have the right to
prepay the Junior Subordinated Debentures before the Initial Optional Prepayment
Date, in whole (but not in part) at the Special Event Prepayment Price within 90
days following the occurrence of such Special Event and therefore cause a
mandatory redemption of the Trust Securities at the Special Event Redemption
Price. On or after the Initial Optional Prepayment Date, the Corporation may
prepay the Junior Subordinated Debentures in whole or in part for any reason and
thereby cause an optional redemption of the Capital Securities, in whole or in
part, at the Optional Redemption Price. Any such redemption is subject to the
Corporation having received prior approval of the Federal Reserve to do so if
then required under applicable guidelines or policies of the Federal Reserve.
See "Description of New Securities--Description of New Capital
Securities--Redemption" and "--Liquidation of the Trust and Distribution of New
Junior Subordinated Debentures".
The Corporation will have the right at any time to dissolve the Trust
and, after satisfaction of liabilities to creditors of the Trust as required by
applicable law, cause the Junior Subordinated Debentures to be distributed to
the holders of the Trust Securities in liquidation of the Trust. Such right is
subject to (i) the Corporation having received an opinion of counsel to the
effect that such distribution will not be a taxable event to holders of Capital
Securities and (ii) prior approval of the Federal Reserve if then required.
Under current United States federal income tax law, a distribution of Junior
Subordinated Debentures upon the dissolution of the Trust would not be a taxable
event to holders of the Capital Securities. If, however, the Trust is
characterized for United States federal income tax purposes as an association
taxable as a corporation at the time of dissolution of the Trust, the
distribution of the Junior Subordinated Debentures may constitute a taxable
event to holders of Capital Securities. Moreover, upon the occurrence of a
Special Event, a dissolution of the Trust in which holders of the Capital
Securities receive cash would be a taxable event to such holders. See "Certain
Federal Income Tax Considerations--Receipt of Junior Subordinated Debentures or
Cash Upon Liquidation of the Trust."
In 1996 and 1997, the Clinton Administration proposed to amend the
Internal Revenue Code of 1986, as amended (the "Code") to deny deductions of
interest on instruments with features similar to those of the Junior
Subordinated Debentures when issued under arrangements similar to the Trust. The
proposals were not passed by Congress. The Clinton Administration did not
include any proposal of this type in its fiscal year 1999 budget proposal.
However, there can be no assurance that future legislative proposals, future
regulations or official administrative pronouncements or future judicial
decisions will not affect the ability of the Corporation to deduct interest on
the Junior Subordinated Debentures. Such a change would give rise to a Tax
Event, which may permit the Corporation, upon approval of the Federal Reserve if
then required under applicable guidelines or policies of the Federal Reserve, to
cause a redemption of the Capital Securities, as described more fully under
"Description of Capital Securities -- Redemption." In addition, according to a
petition recently filed in the United States Tax Court by a corporation
unrelated to the Corporation and the Trust, the Internal Revenue Service has
challenged the deductibility for United States federal income tax purposes of
interest payments on certain purported debt instruments held by entities
intended to be taxable as partnerships for United States federal income tax
purposes, where those entities, in turn, issued preferred securities to
investors. The overall structure of the financing arrangement involved in that
case is similar to, although distinguishable from, the financing structure for
the Junior Subordinated Debentures and the Trust. Whether the Internal Revenue
Service would attempt to challenge the deductibility of interest on the Junior
Subordinated Debentures cannot be predicted. The Corporation, based on the
advice of counsel, intends to take the position that interest payments on the
Junior Subordinated Debentures will be deductible by the Corporation for United
States federal income tax purposes. See "Certain Federal Income Tax
Considerations -- Classification of the Junior Subordinated Debentures." Adverse
developments relating to the deductibility of interest, whether arising in
connection with the case currently pending in the United States Tax Court or
not, could give rise to a Tax Event.
Possible Adverse Effect on Market Prices
There can be no assurance as to the market prices for Capital
Securities or Junior Subordinated Debentures distributed to the holders of
Capital Securities if a termination of the Trust were to occur. Accordingly, the
Capital Securities or the Junior Subordinated Debentures may trade at a discount
from the price that the investor paid to purchase the Capital Securities offered
hereby. Because holders of Capital Securities may receive Junior Subordinated
Debentures in liquidation of the Trust and because Distributions are otherwise
limited to payments on the Junior Subordinated Debentures, prospective
purchasers of New Capital Securities are also making an investment decision with
regard to the New Junior Subordinated Debentures and should carefully review all
the information regarding the New Junior Subordinated Debentures contained
herein. See "Description of New Securities--Description of New Junior
Subordinated Debentures."
Rights under the Guarantee
The Bank of New York will act as Guarantee Trustee and will hold the
Guarantee for the benefit of the holders of the Capital Securities. The Bank of
New York will also act as Property Trustee and as Debenture Trustee under the
Indenture. The Bank of New York (Delaware) will act as Delaware Trustee under
the Declaration. The Guarantee will guarantee to the holders of the Capital
Securities the following payments, to the extent not paid by the Trust: (i) any
accumulated and unpaid Distributions required to be paid on the Capital
Securities, to the extent that the Trust has funds on hand legally available
therefor; (ii) the applicable Redemption Price with respect to any Capital
Securities called for redemption, to the extent that the Trust has funds on hand
legally available therefor; and (iii) upon a voluntary or involuntary
termination, winding up or liquidation of the Trust (unless the Junior
Subordinated Debentures are distributed to holders of the Capital Securities),
the lesser of (a) the aggregate of the Liquidation Amount and all accumulated
and unpaid Distributions to the date of payment, to the extent that the Trust
has funds on hand legally available therefor on such date and (b) the amount of
assets of the Trust remaining available for distribution to holders of the
Capital Securities on such date. The holders of a majority in Liquidation Amount
of the Capital Securities will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee in respect of the Guarantee or to direct the exercise of any trust power
conferred upon the Guarantee Trustee. Any holder of the Capital Securities may
institute a legal proceeding directly against the Corporation to enforce its
rights under the Guarantee without first instituting a legal proceeding against
the Trust, the Guarantee Trustee or any other person or entity. If the
Corporation defaults on its obligation to pay amounts payable under the Junior
Subordinated Debentures, the Trust will not have sufficient funds for the
payment of Distributions or amounts payable on redemption of the Capital
Securities or otherwise, and, in such event, holders of the Capital Securities
will not be able to rely upon the Guarantee for payment of such amounts.
Instead, in the event a Debenture Event of Default shall have occurred and be
continuing and such event is attributable to the failure of the Corporation to
pay principal of or premium, if any, or interest on the Junior Subordinated
Debentures on the payment date on which such payment is due and payable, then a
holder of Capital Securities may institute a legal proceeding directly against
the Corporation for enforcement of payment to such holder of the principal of or
premium, if any, or interest on such Junior Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Capital Securities of
such holder (a "Direct Action"). Notwithstanding any payments made to a holder
of Capital Securities by the Corporation in connection with a Direct Action, the
Corporation shall remain obligated to pay the principal of and premium, if any,
and interest on the Junior Subordinated Debentures, and the Corporation shall be
subrogated to the rights of the holder of such Capital Securities with respect
to payments on the Capital Securities to the extent of any payments made by the
Corporation to such holder in any Direct Action. Except as described herein,
holders of Capital Securities will not be able to exercise directly any other
remedy available to the holders of the Junior Subordinated Debentures or to
assert directly any other rights in respect of the Junior Subordinated
Debentures. See "Description of New Securities--Description of New Junior
Subordinated Debentures--Enforcement of Certain Rights by Holders of Capital
Securities," "--Description of New Junior Subordinated Debentures--Debenture
Events of Default" and "--Description of New Guarantee." The Declaration
provides that each holder of Capital Securities by acceptance thereof agrees to
the provisions of the Indenture.
Limited Voting Rights
Holders of Capital Securities generally will have voting rights
relating only to the modification of the terms of the Capital Securities and the
exercise of the Trust's rights as holder of the Junior Subordinated Debentures.
Holders of Capital Securities will not be entitled to vote to appoint, remove or
replace, or to increase or decrease the number of, the Issuer Trustees, which
voting rights are vested exclusively in the holder of the Common Securities,
except as described under "Description of New Securities--Description of New
Capital Securities--Voting Rights; Amendment of the Declaration" and "--Removal
of Issuer Trustees."
Absence of Public Market
The Old Capital Securities were issued to, and the Corporation believes
such securities are currently owned by, a relatively small number of beneficial
owners. The Old Capital Securities have not been registered under the Securities
Act and will be subject to restrictions on transferability if they are not
exchanged for the New Capital Securities. Although the New Capital Securities
may be resold or otherwise transferred by the holders (who are not affiliates of
the Corporation or the Trust) without compliance with the registration
requirements under the Securities Act, they will constitute a new issue of
securities with no established trading market. Capital Securities may be
transferred by the holders thereof only in blocks having a Liquidation Amount of
not less than $100,000 (100 Old or New Capital Securities, as the case may be).
The Corporation and the Trust have been advised by the Initial Purchaser that
the Initial Purchaser presently intends to make a market in the New Capital
Securities. However, the Initial Purchaser is not obligated to do so and any
market-making activity with respect to the New Capital Securities may be
discontinued at any time without notice. In addition, such market-making
activity will be subject to the limits imposed by the Securities Act and the
Exchange Act and may be limited during the Exchange Offer. Accordingly, no
assurance can be given that an active public or other market will develop for
the New Capital Securities or the Old Capital Securities or as to the liquidity
of or the trading market for the New Capital Securities or the Old Capital
Securities. If an active public market does not develop, the market price and
liquidity of the New Capital Securities may be adversely affected.
If a public trading market develops for the New Capital Securities,
future trading prices will depend on many factors, including, among other
things, prevailing interest rates, the Corporation's results and the market for
similar securities. Depending on prevailing interest rates, the market for
similar securities and other factors, including the financial condition of the
Corporation, the New Capital Securities may trade at a discount.
Notwithstanding the registration of the New Capital Securities in the
Exchange Offer, holders who are "affiliates" (as defined under Rule 405 of the
Securities Act) of the Corporation or the Trust may publicly offer for sale or
resell the New Capital Securities only in compliance with the provisions of Rule
144 under the Securities Act.
Each broker-dealer that receives New Capital Securities for its own
account in exchange for Old Capital Securities, where such Old Capital
Securities were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such New Capital Securities. See
"Plan of Distribution."
HUBCO, INC.
General
HUBCO is a New Jersey corporation and registered bank holding company
whose principal operating subsidiaries are Hudson United Bank ("HUB"), a New
Jersey-chartered commercial bank, Lafayette American Bank ("Lafayette"), a
Connecticut-chartered commercial bank, and Bank of the Hudson ("BTH"), a New
York state-based federally-chartered savings bank. HUBCO's corporate
headquarters is located at 1000 MacArthur Boulevard, Mahwah, New Jersey 07430
and its telephone number is (201) 236-2600. HUB's corporate headquarters is
located at 3100 Bergenline Avenue, Union City, New Jersey 07084. Lafayette's
corporate headquarters is located at 1000 Lafayette Boulevard, Bridgeport,
Connecticut 06604. BTH's corporate headquarters is located at 249 Main Mall,
Poughkeepsie, New York 12601.
HUB is a full-service commercial bank which primarily serves small and
mid-sized businesses and consumers through 92 branches in Northern New Jersey.
Lafayette is a full-service commercial bank which serves primarily
small-to-medium-sized business firms as well as individuals through 51 banking
offices located mainly in Fairfield, Hartford, Middlesex and New Haven counties
in Connecticut. On April 24, 1998, HUBCO acquired Poughkeepsie Financial Corp.
("PFC") and PFC's subsidiary, BTH became HUBCO's New York-based banking
subsidiary. On May 29, 1998, HUBCO acquired MSB Bancorp, Inc. ("MSB") and merged
MSB's subsidiary, MSB Bank into BTH. BTH is a community savings bank serving the
Mid-Hudson Valley area of New York through 32 branches in Dutchess, Orange,
Putnam and Rockland Counties, as well as six residential loan origination
offices in five New York counties and New Jersey. HUBCO anticipates converting
BTH into a state-chartered commercial bank at some point in the future. On June
24, 1998 HUBCO completed its purchase of 21 branches of First Union National
Bank located in New Jersey, New York and Connecticut with deposits of $242.9
million in the aggregate (the "Completed Branch Purchase"). On August 14, 1998,
HUBCO acquired IBS Financial Corp. ("IBSF") and Community Financial Holding
Corporation ("CFHC") and merged their respective banking subsidiaries,
Inter-Boro Savings and Loan Association (the "Association") and Community
National Bank of New Jersey ("CNB") into HUB. On August 21, 1998 HUBCO acquired
Dime Financial Corporation ("DFC") and merged its banking subsidiary, The Dime
Savings Bank of Wallingford ("Dime") into Lafayette. Based on assets as of June
30, 1998, HUBCO was the fourth largest commercial banking company headquartered
in New Jersey. For additional information, see "AVAILABLE INFORMATION" and
"INFORMATION DELIVERED AND INCORPORATED BY REFERENCE."
HUBCO's strategy has been to enhance profitability and build market
share through both internal growth and acquisitions. As of the date of this
Proxy Statement-Prospectus, HUBCO will have completed over 25 acquisitions since
1990, and HUBCO will have added over 140 branches and over $6 billion in assets
through acquisitions this decade.
HUBCO filed a Current Report on Form 8-K with the Commission on
September 30, 1998, containing supplemental financial information of HUBCO for
the years ended December 31, 1997, 1996 and 1995 which has been restated to
include the effects of mergers with CFHC, IBSF and DFC which were accounted for
as pooling of interests. The historical amounts presented in future financial
statements of HUBCO for periods reported in this Proxy Statement-Prospectus will
differ and, in certain cases, will differ materially as a result of the effects
of accounting for the mergers with CFHC, IBSF and DFC.
In connection with its acquisitions which are accounted for as pooling
of interests transactions, HUBCO normally incurs significant one-time merger
related and restructuring charges and realizes significant operating cost
savings. Upon the announcement of significant acquisitions, HUBCO initially
estimates one-time merger related and restructuring costs, which are then
reported on the Current Report on Form 8-K reporting the announcement of the
acquisition. Thereafter, HUBCO does not update or repeat its initial estimate of
such one-time charges. Rather, HUBCO reports the actual one-time merger related
and restructuring charges for the transaction in the earnings release for the
quarter in which the transaction closes. While such one-time charges adversely
effect earnings in the quarter in which a transaction closes, HUBCO also reports
its earnings excluding such one-time charges to allow investors to focus on core
earnings results. See "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
At the time of the announcement of a significant transaction, HUBCO
sometimes also provides estimated cost savings but not revenue enhancement
estimates for the acquired institution. HUBCO does not update or repeat its
initial estimate of such cost savings. Historically, HUBCO has realized
significant cost savings in the acquisitions it has consummated, and thereby
significantly increased core earnings for the acquired institutions. HUBCO
relies on its quarterly earnings releases following consummation to reflect the
operating efficiencies achieved in its acquisitions.
In quarters in which one or more pooling transactions close, earnings
for that quarter will be adversely effected, sometimes significantly. However,
core earnings, to a limited extent in the closing quarter, and more fully in
subsequent quarters, will reflect cost savings and revenue enhancements. As a
result of closing, the acquisitions of IBSF, CFHC and DFC, HUBCO will incur
material one-time merger related and restructuring charges in the third quarter
of 1998 which will adversely affect reported earnings in the third quarter of
1998.
HUBCO attempts to price and structure its acquisitions to provide
earnings per share accretion, excluding one time charges, calculated before the
restatement of prior period results required under pooling-of-interests
accounting treatment.
USE OF PROCEEDS
Neither the Corporation nor the Trust will receive any cash proceeds
from the issuance of the New Capital Securities offered hereby. In consideration
for issuing the New Capital Securities in exchange for Old Capital Securities as
described in this Prospectus, the Trust will receive Old Capital Securities in
like Liquidation Amount. The Old Capital Securities surrendered in exchange for
the New Capital Securities will be retired and cancelled.
The proceeds to the Trust (without giving effect to expenses of the
offering payable by the Corporation) from the offering of the Old Capital
Securities was $50,000,000. All of the proceeds from the sale of Old Capital
Securities was invested by the Trust in the Junior Subordinated Debentures. The
Corporation intends that the net proceeds from the sale of the Old Junior
Subordinated Debentures (approximately $49,175,000) will be used for general
corporate purposes, including acquisition opportunities which may arise from
time to time. The precise amount and timing of the application of such net
proceeds used for such corporate purposes cannot be determined at this time.
Pending such application by the Corporation, such net proceeds may be
temporarily invested in short-term interest bearing securities.
The Capital Securities will be eligible to qualify as Tier I capital
under the capital guidelines of the Federal Reserve. Under current Federal
Reserve Guidelines no more than 25% of the Corporation's Tier I capital may be
comprised of the Capital Securities and other capital securities together with
cumulative preferred stock of the Corporation.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges
for the respective periods indicated.
<TABLE>
<CAPTION>
Six Months Ended
June 30,
Year Ended December 31,
-------------------- --------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits................. 2.43 3.84 3.83 3.23 3.80 3.94 0.02
Including interest on deposits................. 1.30 1.55 1.53 1.30 1.41 1.42 0.96
</TABLE>
For purposes of computing the ratio of earnings to fixed charges,
earnings represent net income (loss). Fixed charges, excluding interest on
deposits, include gross interest expense (other than on deposits) on all
borrowings (both short-term and long-term and including HUBCO's junior
subordinated debentures issued to HUBCO Capital Trust I on January 28, 1996) and
the proportion deemed representative of the interest factor of rent expense, net
of income from subleases. Fixed charges, including gross interest on deposits,
include all interest expense on all borrowings (both short-term and long-term
and including HUBCO's junior subordinated debentures issued to HUBCO Capital
Trust I on January 28, 1996) and the proportion deemed representative of the
interest factor of rent expense, net of income from subleases.
The computation of the ratios of earnings to fixed charges does not
reflect dividends which have been declared by the Corporation's Board of
Directors and paid to holders of HUBCO's existing Series B convertible preferred
stock because such dividends have been, and are expected to remain, immaterial.
<PAGE>
CAPITALIZATION
The following table sets forth the actual unaudited capitalization of
the Corporation at June 30, 1998, as adjusted to give effect to the consummation
of the offering of Capital Securities and the application of the estimated net
proceeds from the sale of the Capital Securities. See "Use of Proceeds." The
table should be read in conjunction with the Corporation's consolidated
financial statements and notes thereto included in the documents incorporated by
reference herein. See "Incorporation of Certain Documents by Reference."
<TABLE>
<CAPTION>
At June 30, 1998,
--------------------------------------
Actual As Adjusted
(in thousands)
<S> <C> <C>
Long-Term Debt:
Subordinated Debt of the Corporation $ 100,000 $
------------ ------------
Total Long-Term Debt 100,000
------------ ------------
Corporation obligated, mandatorily redeemable
preferred securities of subsidiary trust holding
solely subordinated debentures of the Corporation(1) 50,000
Corporation obligated, mandatorily redeemable
preferred securities of subsidiary trust holding
solely subordinated debentures of the Corporation(2) 50,000
Stockholders' equity
Convertible Preferred Stock - Series B, no par value;
authorized 10,300,000 shares; 500 shares issued and
outstanding in 1998. 50
Common stock, no par value, authorized 53,045,000
shares; issued 42,583,566 shares and outstanding
40,845,144 shares 73,508
Additional paid-in capital 286,565
Retained earnings 170,169
Treasury stock, at cost 1,738,422 (47,648)
Employee stock awards (8,464)
Unrealized gain on securities available
for sale, net of income taxes 4,699
------------ ------------
Total stockholders' equity 478,879
============ ============
Total capitalization $ 678,879 $
============ ============
Pro Forma Capital Ratios:
Tier 1 Leverage Ratio 7.75 % %
Tier 1 Risk-Based Capital Ratio 13.73
Total Risk-Based Capital Ratio 17.66
</TABLE>
(1) Reflects the Capital Securities. The Trust is a subsidiary of the
Corporation and will hold the Junior Subordinated Debentures as its sole
asset. At June 30, 1998, the $50,000 for the debentures had already been
raised, so no adjustment is shown
(2) HUBCO Capital Trust I
<PAGE>
SUMMARY FINANCIAL DATA
The summary below should be read in connection with the financial
information included in the Corporation's 1997 Annual Report on Form 10-K and
the Corporation's Quarterly Report on Form 10-Q for the quarters ended March 31,
1998 and June 30, 1998, incorporated by reference herein. Interim unaudited data
for the six months ended June 30, 1998 and 1997 reflect, in the opinion of
management of the Corporation, all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of such data. Results
for the six months ended June 30, 1998 are not necessarily indicative of results
which may be expected for any other interim period or for the year as a whole.
HUBCO filed a Current Report on Form 8-K with the Commission on
September __, 1998, containing supplemental financial information of HUBCO for
the years ended December 31, 1997, 1996 and 1995 which has been restated to
include the effects of the CFHC Merger, IBSF Merger and DFC Merger, each of
which was accounted for as a pooling of interests. The historical amounts
presented in future financial statements of HUBCO for periods reported in this
Offering Memorandum will differ and, in certain cases, will differ materially as
a result of the effects of accounting for the CFHC Merger, IBSF Merger and DFC
Merger.
<PAGE>
<TABLE>
<CAPTION>
SELECTED CONSOLIDATED FINANCIAL DATA OF HUBCO
At or for the Year Ended December 31,
-------------------------------------------------------------------------
1997 1996 1995 1994 1993
(Dollars in thousands, except for per share amounts)
<S> <C> <C> <C> <C> <C>
Earnings Summary:
Interest income $ 471,215 $ 442.514 $ 406,991 $ 344,341 $ 331,358
Interest expense 216,280 200,566 173,695 139,916 146,052
------------- ------------ ------------ ------------ ------------
Net interest income 254,935 241,948 233,296 204,425 185,306
Provision for possible loan losses 12,775 17,140 20,072 15,109 54,875
------------- ------------ ------------ ------------ ------------
Net interest income after
provision for possible loan losses 242,160 224,808 213,224 189,316 130,431
Other income 54,180 40,257 28,624 32,641 38,890
Other expenses 181,308 204,679 169,924 163,194 174,548
------------- ------------ ------------ ------------ ------------
Income (loss) before income taxes 115,032 60,385 71,924 58,763 (5,227)
Income tax provision (benefit) 45,205 23,490 23,597 21,311 (1,238)
Extraordinary items - - - - (874)
Change of Accounting principals - - - 117 (456)
============= ============ ============ ============ ============
Net income (loss) $ 69,827 $ 36,896 $ 48,327 $ 37,569 $ (5,319)
============= ============ ============ ============ ============
Share Data:
Weighted average common shares outstanding
(in thousands):
Basic 41,363 42,402 41,469 32,370 27,142
Diluted 43,636 44,990 44,066 35,299 27,142
Basic earnings (loss) per share $ 1.67 $ 0.85 $ 1.14 $ 1.15 $ (0.20)
Diluted earnings (loss) per share 1.60 0.82 1.10 1.06 (0.20)
Cash dividend per common share 0.73 0.64 0.55 0.33 0.28
Balance Sheet Summary:
Securities held to maturity 764,831 761,244 910,738 1,305,508 1,256,180
Securities available for sale 1,499,306 1,585,985 948,538 515,260 413,214
Loans 3,600,061 3,608,943 3,254,610 3,074,157 2,755,279
Total assets 6,606,140 6,498,856 5,642,997 5,400,971 4,972,127
Deposits 5,252,956 5,334,673 4,684,451 4,571,450 4,240,377
Stockholders' equity 507,101 533,364 536,042 395,419 318,963
Performance Ratios:
Return on average assets 1.08% 0.60% 0.88% 0.72% 0.11%
Return on average equity 13.56 6.93 9.79 10.74 1.61
Dividend payout 43.71% 75.29% 48.25% 28.70% N/A
Average equity to average assets 7.99 8.68 9.02 6.72 6.70
Net interest margin 4.25 4.23 4.55 4.25 3.77
Asset Quality Ratios:
Allowance for possible loan
losses to total loans 1.83% 1.72% 1.72% 2.03% 2.63%
Allowance for possible loan losses
to non-performing loans 98% 91% 124% 82% 53%
Non-performing loans to
total loans 1.86% 1.88% 1.39% 3.28% 4.93%
Non-performing assets to total
loans, plus other real estate 2.18% 2.39% 2.24% 4.39% 6.81%
Net charge-offs to average loans 0.33% 0.47% 0.84% 1.10% 1.96%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Six Months Ended
(unaudited)
June 30,
-------------------------------------
1998 1997
----------------- ----------------
(Dollars in thousands, except for per share amounts)
<S> <C> <C>
Earnings Summary:
Interest income $ 233,377 $ 235,303
Interest expense 106,974 107,957
----------------- ---------------
Net interest income 126,403 127,346
Provision for possible loan losses 9,099 4,964
----------------- ---------------
Net interest income after
provision for possible loan losses 117,304 122,382
Other income 28,961 24,196
Other expenses 114,004 87,687
----------------- ---------------
Income before income taxes 32,261 58,891
Income tax provision 12,777 23,328
================= ===============
Net income $ 19,484 $ 35,563
================= ===============
Share Data:
Weighted average common shares outstanding:
Basic 41,066 41,542
Diluted 42,393 44,023
Basic earnings per share $ 0.47 $ 0.85
Diluted earnings per share $ 0.46 $ 0.81
Cash dividend per common share $ 0.39 $ 0.36
Balance Sheet Summary:
Securities held to maturity 1,943,323 1,631,233
Securities available for sale 919,356 757,131
Loans 3,523,517 3,601,922
Total assets 7,016,924 6,526,495
Deposits 5,439,595 5,259,111
Stockholders' equity 478,879 528,648
Performance Ratios:
Return on average assets 0.30 % 0.55 %
Return on average equity 3.84 % 6.81 %
Dividend payout 82.63 % 42.14 %
Average equity to average assets 7.78 % 8.07 %
Net interest margin 2.08 % 2.11 %
Asset Quality Ratios:
Allowance for possible loan
losses to total loans 1.88 % 1.79 %
Allowance for possible loan losses
to non-performing loans 1.10 % 88 %
Non-performing loans to
total loans 1.72 % 2.05 %
Non-performing assets to total
loans, plus other real estate 1.99 % 2.38 %
Net charge-offs to average loans 0.29 % 0.13 %
</TABLE>
THE TRUST
The Trust is a statutory business trust formed under Delaware law
pursuant to (i) a declaration of trust, dated as of June 3, 1998, executed by
the Corporation, as Sponsor, the Delaware Trustee and the Administrative
Trustees named therein (the "Initial Declaration"), and (ii) the filing of a
certificate of trust with the Secretary of State of the State of Delaware on
June 3, 1998. The Initial Declaration was replaced by the Declaration. The Trust
exists for the exclusive purposes of (i) issuing and selling the Trust
Securities, which represent undivided beneficial interests in the assets of the
Trust, (ii) investing the gross proceeds from the sale of the Trust Securities
in the Junior Subordinated Debentures and (iii) engaging in only those other
activities necessary, advisable or incidental thereto. Accordingly, the Junior
Subordinated Debentures will be the sole assets of the Trust and payments under
the Junior Subordinated Debentures will be the sole revenues of the Trust. All
of the Common Securities will be owned directly by the Corporation. The Common
Securities will rank pari passu, and payments will be made thereon pro rata,
with the Capital Securities, except that upon the occurrence and during the
continuance of an Event of Default, the rights of the Corporation as holder of
the Common Securities to payments in respect of Distributions and payments upon
liquidation, redemption or otherwise will be subordinated and rank junior to the
rights of the holders of the Capital Securities. See "Description of Capital
Securities -- Subordination of Common Securities." The Corporation has acquired
Common Securities in a Liquidation Amount equal to at least 3% of the total
capital of the Trust. The Trust has a term of 31 years, but may terminate
earlier as provided in the Declaration. The Trust's business and affairs will be
conducted by trustees (the "Issuer Trustees") appointed by the Corporation as
the direct holder of the Common Securities. The Issuer Trustees will be The Bank
of New York as the Property Trustee (the "Property Trustee"), The Bank of New
York (Delaware) as the Delaware Trustee (the "Delaware Trustee"), and two
individual trustees (the "Administrative Trustees"). The Bank of New York, as
Property Trustee, will act as sole indenture trustee under the Declaration. The
Bank of New York will also act as indenture trustee under the Guarantee and the
Indenture. See "Description of the Guarantee" and "Description of Junior
Subordinated Debentures." The holder of the Common Securities or, if an Event of
Default under the Declaration has occurred and is continuing, the holders of a
majority in Liquidation Amount of the Capital Securities, will be entitled to
appoint, remove or replace the Property Trustee and/or the Delaware Trustee. In
no event will the holders of the Capital Securities have the right to vote to
appoint, remove or replace the Administrative Trustees; such voting rights will
be vested exclusively in the holder of the Common Securities. The duties and
obligations of each Issuer Trustee are governed by the Declaration. The
Corporation will pay directly all fees, expenses, debts and obligations (other
than the Trust Securities) related to the Trust and the offering of the Capital
Securities, including all ongoing costs, expenses and liabilities of the Trust.
The principal executive office of the Trust is HUBCO Capital Trust II, c/o
HUBCO, Inc., 1000 MacArthur Boulevard, Mahwah, New Jersey 07430, Attention: D.
Lynn Van Borkulo-Nuzzo.
THE EXCHANGE OFFER
Purpose of the Exchange Offer
In connection with the sale of the Old Capital Securities, the
Corporation and the Trust entered into the Registration Rights Agreement with
the Initial Purchasers, pursuant to which the Corporation and the Trust agreed
to file and to use their reasonable efforts to cause to become effective with
the Commission a registration statement with respect to the exchange of the Old
Capital Securities for capital securities with terms identical in all material
respects to the terms of the Old Capital Securities. A copy of the Registration
Rights Agreement has been filed as an Exhibit to the Registration Statement of
which this Prospectus is a part.
The Exchange Offer is being made to satisfy the contractual obligations
of the Corporation and the Trust under the Registration Rights Agreement. The
form and terms of the New Capital Securities are the same as the form and terms
of the Old Capital Securities except that the New Capital Securities have been
registered under the Securities Act and will not be subject to certain
restrictions on transfer applicable to the Old Capital Securities, other than to
require minimum transfers thereof to be in blocks of $100,000 Liquidation
Amount, and will not provide for any increase in the Distribution rate thereon.
In this regard, under certain circumstances set forth in the Registration Rights
Agreement, additional interest will accrue on the Capital Securities in addition
to the stated interest thereon. The Registration Rights Agreement provides that
the Company and the Trust shall use their respective best efforts to (i) cause
to be filed with the Commission by March 31 after the date of the original
issuance, a registration statement on an appropriate form under the Securities
Act, (ii) cause such registration statement to be declared effective by the
Commission on or prior to April 30 after the date of original issuance and (iii)
keep such registration statement effective for not less than 30 calendar days
(or longer if required by applicable law) after the date notice of the Exchange
Offer is made to the holders.
If (i) the Corporation and the Trust fail to file the registration
statement or the Shelf Registration Statement, if appropriate, on or prior to
March 31 after the date of original issuance or notwithstanding that the
Corporation and the Trust have consummated or will consummate an Exchange Offer,
in the event that the Corporation and the Trust are still required to file a
Shelf Registration Statement and such Shelf Registration Statement is not
declared effective by the Commission on or prior to the date specified for such
effectiveness, then commencing on the day after the applicable required filing
date, additional interest shall accrue on the principal amount of the Junior
Subordinated Debentures, and additional Distributions shall accumulate on the
liquidation amount of the Junior Subordinated Debentures and additional
Distributions shall accumulate on the liquidation amount of the Capital
Securities, each at a rate of 0.25% per annum; or
(ii) neither the registration statement nor the Shelf Registration
Statement is declared effective by the Commission on or prior to March 31 after
the date of original issuance notwithstanding that the Corporation and the Trust
have consummated or will consummate an Exchange Offer, in the event that the
Corporation and the Trust are still required to file a Shelf Registration
Statement and such Shelf Registration Statement is not declared effective by the
Commission on or prior to the 30th day after the date the Shelf Registration
Statement was required to be filed, then, commencing on the 31st day after the
applicable required filing date, additional interest shall accrue on the
principal amount of the Junior Subordinated Debentures, and additional
distributions shall accumulate on the liquidation amount of the Capital
Securities each at a rate of 0.25% per annum; or
(iii) (A) the trust has not exchanged New Capital Securities for all
Capital Securities or the Corporation has not exchanged New Guarantees or New
Junior Subordinated Debentures for all Guarantees or New Junior Subordinated
Debentures validly tendered, in accordance with the terms of the Exchange Offer
on or prior to the 30th day after the date on which the registration statement
was declared effective or (B) if applicable, the Shelf Registration Statement
has been declared effective and such Shelf Registration Statement ceases to be
effective at any time prior to the expiration of the period set forth in Rule
144(k), then additional interest shall accrue on the principal amount of Junior
Subordinated Debentures, and additional distributions shall accumulate on the
liquidation amount of the Capital Securities, each at a rate of 0.25% per annum
commencing on (x) the 31st day after such effective date, in the case of (A)
above, or (y) the day such Shelf Registration Statement ceases to be effective
in the case of (B) above; provided, however, that neither the additional
interest rate on the Junior Subordinated Debentures, nor the additional
distribution rate on the liquidation amount of the Capital Securities, may
exceed in the aggregate 0.25% per annum; provided further, however, that (1)
upon the filing of the registration statement or a Shelf Registration Statement
(in the case of clause (i) above), (2) upon the effectiveness of the
registration statement or the Shelf Registration Statement (in the case of
clause (ii) above), or (3) upon the exchange of New Capital Securities, New
Guarantees and New Junior Subordinated Debentures for all Capital Securities,
Guarantees and Junior Subordinated Debentures tendered (in the case of clause
(iii) (A) above), or upon the effectiveness of the Shelf Registration Statement
which has ceased to remain effective (in the case of clause (iii)(B) above),
additional interest on the Junior Subordinated Debentures, and additional
distributions on the liquidated amount of the Capital Securities as a result of
such clause (or the relevant subclause thereof), as the case may be, shall cease
to accrue or accumulate, as the case may be.
Upon consummation of the Exchange Offer, holders of Old Capital
Securities will not be entitled to any increase in the Distribution rate thereon
or any further registration rights under the Registration Rights Agreement,
except under limited circumstances. See "Risk Factors--Consequences of a Failure
to Exchange Old Capital Securities" and "Description of Old Capital Securities."
The Exchange Offer is not being made to, nor will the Trust accept
tenders for exchange from, holders of Old Capital Securities in any jurisdiction
in which the Exchange Offer or the acceptance thereof would not be in compliance
with the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect
to the Exchange Offer means any person in whose name the Old Capital Securities
are registered on the books of the Trust or any other person who has obtained a
properly completed bond power from the registered holder, or any person whose
Old Capital Securities are held of record by The Depository Trust Company
("DTC") who desires to deliver such Old Capital Securities by book-entry
transfer at DTC.
Pursuant to the Exchange Offer, the Corporation will exchange as soon
as practicable after the date hereof, the Old Guarantee for the New Guarantee
and the Old Junior Subordinated Debentures, in an amount corresponding to the
Old Capital Securities accepted for exchange, for a like aggregate principal
amount of the New Junior Subordinated Debentures. The New Guarantee and New
Junior Subordinated Debentures have been registered under the Securities Act.
Terms of the Exchange Offer
The Trust hereby offers, upon the terms and subject to the conditions
set forth in this Prospectus and in the accompanying Letter of Transmittal, to
exchange up to $50,000,000 aggregate Liquidation Amount of New Capital
Securities for a like aggregate Liquidation Amount of Old Capital Securities
properly tendered on or prior to the Expiration Date and not properly withdrawn
in accordance with the procedures described below. The Trust will issue,
promptly after the Expiration Date, an aggregate Liquidation Amount of up to
$50,000,000 of New Capital Securities in exchange for a like principal amount of
outstanding Old Capital Securities tendered and accepted in connection with the
Exchange Offer. Holders may tender their Old Capital Securities in whole or in
part in a Liquidation Amount of not less than $100,000 (100 Capital Securities)
or any integral multiple of $1,000 Liquidation Amount (one Capital Security) in
excess thereof.
The Exchange Offer is not conditioned upon any minimum Liquidation
Amount of Old Capital Securities being tendered. As of the date of this
Prospectus, $50,000,000 aggregate Liquidation Amount of the Old Capital
Securities is outstanding.
Holders of Old Capital Securities do not have any appraisal or
dissenters' rights in connection with the Exchange Offer. Old Capital Securities
which are not tendered for or are tendered but not accepted in connection with
the Exchange Offer will remain outstanding and be entitled to the benefits of
the Declaration, but will not be entitled to any further registration rights
under the Registration Rights Agreement, except under limited circumstances. See
"Risk Factors--Consequences of a Failure to Exchange Old Capital Securities" and
"Description of Old Securities."
If any tendered Old Capital Securities are not accepted for exchange
because of an invalid tender, the occurrence of certain other events set forth
herein or otherwise, certificates for any such unaccepted Old Capital Securities
will be returned, without expense, to the tendering holder thereof promptly
after the Expiration Date.
Holders who tender Old Capital Securities in connection with the
Exchange Offer will not be required to pay brokerage commissions or fees or,
subject to the instructions in the Letter of Transmittal, transfer taxes with
respect to the exchange of Old Capital Securities in connection with the
Exchange Offer. The Corporation will pay all charges and expenses, other than
certain applicable taxes described below, in connection with the Exchange Offer.
See "--Fees and Expenses."
NEITHER THE CORPORATION, THE BOARD OF DIRECTORS OF THE CORPORATION NOR
ANY ISSUER TRUSTEE OF THE TRUST MAKES ANY RECOMMENDATION TO HOLDERS OF OLD
CAPITAL SECURITIES AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY
PORTION OF THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN
ADDITION, NO ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF
OLD CAPITAL SECURITIES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT
TO THE EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF OLD CAPITAL SECURITIES
TO TENDER BASED ON SUCH HOLDERS OWN FINANCIAL POSITION AND REQUIREMENTS.
Expiration Date; Extensions; Amendments
The term "Expiration Date" means 5:00 p.m., New York City time, on ,
1998 unless the Exchange Offer is extended by the Corporation or the Trust (in
which case the term "Expiration Date" shall mean the latest date and time to
which the Exchange Offer is extended).
The Corporation and the Trust expressly reserve the right in their sole
and absolute discretion, subject to applicable law, at any time and from time to
time, (i) to delay the acceptance of the Old Capital Securities for exchange,
(ii) to terminate the Exchange Offer (whether or not any Old Capital Securities
have theretofore been accepted for exchange) if the Trust determines, in its
sole and absolute discretion, that any of the events or conditions referred to
under "--Conditions to the Exchange Offer" have occurred or exist or have not
been satisfied, (iii) to extend the Expiration Date of the Exchange Offer and
retain all Old Capital Securities tendered pursuant to the Exchange Offer,
subject, however, to the right of holders of Old Capital Securities to withdraw
their tendered Old Capital Securities as described under "--Withdrawal Rights,"
and (iv) to waive any condition or otherwise amend the terms of the Exchange
Offer in any respect. If the Exchange Offer is amended in a manner determined by
the Corporation and the Trust to constitute a material change, or if the
Corporation and the Trust waive a material condition of the Exchange Offer, the
Corporation and the Trust will promptly disclose such amendment by means of a
prospectus supplement that will be distributed to the holders of the Old Capital
Securities, and the Corporation and the Trust will extend the Exchange Offer to
the extent required by Rule 14e-1 under the Exchange Act.
Any such delay in acceptance, extension, termination or amendment will
be followed promptly by oral or written notice thereof to the Exchange Agent and
by making a public announcement thereof, and such announcement in the case of an
extension will be made no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date. Without limiting
the manner in which the Corporation and the Trust may choose to make any public
announcement and subject to applicable law, the Corporation and the Trust shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by issuing a release to an appropriate news
agency.
Acceptance for Exchange and Issuance of New Capital Securities
Upon the terms and subject to the conditions of the Exchange Offer, the
Trust will exchange, and will issue to the Exchange Agent, New Capital
Securities for Old Capital Securities validly tendered and not withdrawn
promptly after the Expiration Date.
In all cases, delivery of New Capital Securities in exchange for Old
Capital Securities tendered and accepted for exchange pursuant to the Exchange
Offer will be made only after timely receipt by the Exchange Agent of (i) Old
Capital Securities or a book-entry confirmation of a book-entry transfer of Old
Capital Securities into the Exchange Agent's account at DTC, (ii) the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, and (iii) any other documents required by the
Letter of Transmittal.
The term "book-entry confirmation" means a timely confirmation of a
book-entry transfer of Old Capital Securities into the Exchange Agent's account
at DTC.
Subject to the terms and conditions of the Exchange Offer, the Trust
will be deemed to have accepted for exchange, and thereby exchanged, Old Capital
Securities validly tendered and not withdrawn as, if and when the Trust gives
oral or written notice to the Exchange Agent of the Trust's acceptance of such
Old Capital Securities for exchange pursuant to the Exchange Offer. The Exchange
Agent will act as agent for the Trust for the purpose of receiving tenders of
Old Capital Securities, Letters of Transmittal and related documents, and as
agent for tendering holders for the purpose of receiving Old Capital Securities,
Letters of Transmittal and related documents and transmitting New Capital
Securities to validly tendering holders. Such exchange will be made promptly
after the Expiration Date. If for any reason whatsoever, acceptance for exchange
or the exchange of any Old Capital Securities tendered pursuant to the Exchange
Offer is delayed (whether before or after the Trust's acceptance for exchange of
Old Capital Securities) or the Trust extends the Exchange Offer or is unable to
accept for exchange or exchange Old Capital Securities tendered pursuant to the
Exchange Offer, then, without prejudice to the Trust's rights set forth herein,
the Exchange Agent may, nevertheless, on behalf of the Trust and subject to Rule
14e-1(c) under the Exchange Act, retain tendered Old Capital Securities and such
Old Capital Securities may not be withdrawn except to the extent tendering
holders are entitled to withdrawal rights as described under "--Withdrawal
Rights."
Pursuant to the Letter of Transmittal, a holder of Old Capital
Securities will warrant and agree in the Letter of Transmittal that it has full
power and authority to tender, exchange, sell, assign and transfer Old Capital
Securities, that the Trust will acquire good, marketable and unencumbered title
to the tendered Old Capital Securities, free and clear of all liens,
restrictions, charges and encumbrances, and the Old Capital Securities tendered
for exchange are not subject to any adverse claims or proxies. The holder also
will warrant and agree that it will, upon request, execute and deliver any
additional documents deemed by the Trust or the Exchange Agent to be necessary
or desirable to complete the exchange, sale, assignment, and transfer of the Old
Capital Securities tendered pursuant to the Exchange Offer.
Procedures for Tendering Old Capital Securities
Valid Tender. Except as set forth below, in order for Old Capital
Securities to be validly tendered pursuant to the Exchange Offer, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees and any other required documents, must be
received by the Exchange Agent at one of its addresses set forth under
"--Exchange Agent," and either (i) tendered Old Capital Securities must be
received by the Exchange Agent, or (ii) such Old Capital Securities must be
tendered pursuant to the procedures for book-entry transfer set forth below and
a book-entry confirmation must be received by the Exchange Agent, in each case
on or prior to the Expiration Date, or (iii) the guaranteed delivery procedures
set forth below must be complied with.
If less than all of the Old Capital Securities are tendered, a
tendering holder should fill in the amount of Old Capital Securities being
tendered in the appropriate box on the Letter of Transmittal. The entire amount
of Old Capital Securities delivered to the Exchange Agent will be deemed to have
been tendered unless otherwise indicated.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN RECEIPT
REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN
ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Book-Entry Transfer. The Corporation understands that the Exchange
Agent has confirmed with DTC that any financial institution that is a
participant in DTC's system may utilize DTC's Automated Tender Offer Program
("ATOP") to tender Old Capital Securities. The Exchange Agent will establish an
account with respect to the Old Capital Securities at DTC for purposes of the
Exchange Offer within two business days after the date of this Prospectus. Any
financial institution that is a participant in DTC's book-entry transfer
facility system may make a book-entry delivery of the Old Capital Securities by
causing DTC to transfer such Old Capital Securities into the Exchange Agent's
account at DTC in accordance with DTC's procedures for transfers. However,
although delivery of Old Capital Securities may be effected through book-entry
transfer into the Exchange Agent's account at DTC, the Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees and any other required documents, must in any case be
delivered to and received by the Exchange Agent at its address set forth under
"--Exchange Agent" on or prior to the Expiration Date, or the guaranteed
delivery procedure set forth below must be complied with.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES
NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
Signature Guarantees. Certificates for the Old Capital Securities need
not be endorsed and signature guarantees on the Letter of Transmittal are
unnecessary unless (a) a certificate for the Old Capital Securities is
registered in a name other than that of the person surrendering the certificate
or (b) such holder completes the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" in the Letter of Transmittal. In the case of (a)
or (b) above, such certificates for Old Capital Securities must be duly endorsed
or accompanied by a properly executed bond power, with the endorsement or
signature on the bond power and on the Letter of Transmittal guaranteed by a
firm or other entity identified in Rule 17Ad-15 under the Exchange Act as an
"eligible guarantor institution," including (as such terms are defined therein):
(i) a bank; (ii) a broker, dealer, municipal securities broker or dealer or
government securities broker or dealer; (iii) a credit union; (iv) a national
securities exchange, registered securities association or clearing agency; or
(v) a savings association that is a participant in a Securities Transfer
Association (an "Eligible Institution"), unless surrendered on behalf of such
Eligible Institution. See Instruction 1 to the Letter of Transmittal.
Delivery. The method of delivery of the book-entry confirmation,
certificates representing tendered Old Capital Securities, the Letter of
Transmittal, and all other required documents is at the opinion and sole risk of
the tendering holder, and "delivery" will be deemed made only when actually
received by the Exchange Agent. If delivery is to be made by mail, it is
recommended that either registered mail, return receipt requested, properly
insured, or an overnight delivery service be utilized. In all such cases,
sufficient time should be allowed to ensure timely delivery on or before the
Expiration Date.
Guaranteed Delivery. If a holder desires to tender Old Capital
Securities pursuant to the Exchange Offer and the certificates for such Old
Capital Securities are not immediately available or time will not permit all
required documents to reach the Exchange Agent on or prior to the Expiration
Date, or the procedure for book-entry transfer cannot be completed on a timely
basis, such Old Capital Securities may nevertheless be tendered, provided that
all of the following guaranteed delivery procedures are complied with:
(a) such tenders are made by or through an Eligible Institution;
(b) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form accompanying the Letter of Transmittal, is
received by the Exchange Agent, as provided below, on or prior to the Expiration
Date; and
(c) the certificates (or a book-entry confirmation) representing all
tendered Old Capital Securities, in proper form for transfer, together with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees and any other documents
required by the Letter of Transmittal, are received by the Exchange Agent within
three New York Stock Exchange trading days after the date of execution of such
Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or
transmitted by facsimile or mail to the Exchange Agent and must include a
guarantee by an Eligible Institution in the form set forth in such notice.
Notwithstanding any other provision hereof, the delivery of New Capital
Securities in exchange for Old Capital Securities tendered and accepted for
exchange pursuant to the Exchange Offer will in all cases be made only after
timely receipt by the Exchange Agent of Old Capital Securities, or of a
book-entry confirmation with respect to such Old Capital Securities, and a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), together with any required signature guarantees and any other
documents required by the Letter of Transmittal. Accordingly, the delivery of
New Capital Securities might not be made to all tendering holders at the same
time, and will depend upon when Old Capital Securities, book-entry confirmations
with respect to Old Capital Securities and other required documents are received
by the Exchange Agent.
The Trust's acceptance for exchange of Old Capital Securities tendered
pursuant to any of the procedures described above will constitute a binding
agreement between the tendering holder and the Trust upon the terms and subject
to the conditions of the Exchange Offer.
Determination of Validity. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange of
any tendered Old Capital Securities will be determined by the Corporation and
the Trust, in their sole discretion, whose determination shall be final and
binding on all parties. The Corporation and the Trust reserve the absolute
right, in their sole and absolute discretion, to reject any and all tenders
determined by them not to be in proper form or the acceptance of which, or
exchange for, may, in the opinion of counsel to the Corporation and the Trust,
be unlawful. The Corporation and the Trust also reserve the absolute right,
subject to applicable law, to waive any of the conditions of the Exchange Offer
as set forth under "--Conditions to the Exchange Offer" or any condition or
irregularity in any tender of Old Capital Securities of any particular holder
whether or not similar conditions or irregularities are waived in the case of
other holders.
The interpretation by the Corporation and the Trust of the terms and
conditions of the Exchange Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding. No tender of Old Capital
Securities will be deemed to have been validly made until all irregularities
with respect to such tender have been cured or waived. Neither the Corporation,
the Trust, any affiliates or assigns of the Corporation or the Trust, the
Exchange Agent nor any other person shall be under any duty to give any
notification of any irregularities in tenders or incur any liability for failure
to give any such notification.
If any Letter of Transmittal, endorsement, bond power, power of
attorney, or any other document required by the Letter of Transmittal is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and unless waived by the
Corporation and the Trust, proper evidence satisfactory to the Corporation and
the Trust, in their sole discretion, of such person's authority to so act must
be submitted.
A beneficial owner of Old Capital Securities that are held by or
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee or custodian is urged to contact such entity promptly if such
beneficial holder wishes to participate in the Exchange Offer.
Resales of New Capital Securities
The Trust is making the Exchange Offer for the New Capital Securities
in reliance on the position of the staff of the Division of Corporation Finance
of the Commission as set forth in certain interpretive letters addressed to
third parties in other transactions. However, neither the Corporation nor the
Trust sought its own interpretive letter and there can be no assurance that the
staff of the Division of Corporation Finance of the Commission would make a
similar determination with respect to the Exchange Offer as it has in such
interpretive letters to third parties. Based on these interpretations by the
staff of the Division of Corporation Finance of the Commission, and subject to
the two immediately following sentences, the Corporation and the Trust believe
that New Capital Securities issued pursuant to this Exchange Offer in exchange
for Old Capital Securities may be offered for resale, resold and otherwise
transferred by a holder thereof (other than a holder who is a broker-dealer)
without further compliance with the registration and prospectus delivery
requirements of the Securities Act, provided that such New Capital Securities
are acquired in the ordinary course of such holder's business and that such
holder is not participating, and has no arrangement or understanding with any
person to participate, in a distribution (within the meaning of the Securities
Act) of such New Capital Securities. However, any holder of Old Capital
Securities who is an "affiliate", as defined under Rule 405 of the Securities
Act, of the Corporation or the Trust or who intends to participate in the
Exchange Offer for the purpose of distributing New Capital Securities, or any
broker-dealer who purchased Old Capital Securities from the Trust to resell
pursuant to Rule 144A or any other available exemption under the Securities Act,
(a) will not be able to rely on the interpretations of the staff of the Division
of Corporation Finance of the Commission set forth in the above-mentioned
interpretive letters, (b) will not be permitted or entitled to tender such Old
Capital Securities in the Exchange Offer and (c) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any sale or other transfer of such Old Capital Securities unless
such sale is made pursuant to an exemption from such requirements. In addition,
as described below, if any broker-dealer holds Old Capital Securities acquired
for its own account as a result of market-making or other trading activities and
exchanges such Old Capital Securities for New Capital Securities, then such
broker-dealer must deliver a prospectus meeting the requirements of the
Securities Act in connection with any resales of such New Capital Securities.
Each holder of Old Capital Securities who wishes to exchange Old
Capital Securities for New Capital Securities in the Exchange Offer will be
required to represent that (i) it is not an "affiliate" of the Corporation or
the Trust, (ii) any New Capital Securities to be received by it are being
acquired in the ordinary course of its business, (iii) it has no arrangement or
understanding with any person to participate in a distribution (within the
meaning of the Securities Act) of such New Capital Securities, and (iv) if such
holder is not a broker-dealer, such holder is not engaged in, and does not
intend to engage in, a distribution (within the meaning of the Securities Act)
of such New Capital Securities. In addition, the Corporation and the Trust may
require such holder, as a condition to such holder's eligibility to participate
in the Exchange Offer, to furnish to the Corporation and the Trust (or an agent
thereof) in writing information as to the number of "beneficial owners" (within
the meaning of Rule 13d-3 under the Exchange Act) on behalf of whom such holder
holds the Capital Securities to be exchanged in the Exchange Offer. Each
broker-dealer that receives New Capital Securities for its own account pursuant
to the Exchange Offer must acknowledge that it acquired the Old Capital
Securities for its own account as the result of market-making activities or
other trading activities and must agree that it will deliver a prospectus
meeting the requirements of the Securities Act in connection with any resale of
such New Capital Securities. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
Based on the position taken by the staff of the Division of Corporation Finance
of the Commission in the interpretive letters referred to above, the Corporation
and the Trust believe that Participating Broker-Dealers who acquired Old Capital
Securities for their own accounts as a result of market-making activities or
other trading activities may fulfill their prospectus delivery requirements with
respect to the New Capital Securities received upon exchange of such Old Capital
Securities (other than Old Capital Securities which represent an unsold
allotment from the original sale of the Old Capital Securities) with a
prospectus meeting the requirements of the Securities Act, which may be the
prospectus prepared for an exchange offer so long as it contains a description
of the plan of distribution with respect to the resale of such New Capital
Securities. Accordingly, this Prospectus, as it may be amended or supplemented
from time to time, may be used by a Participating Broker-Dealer during the
period referred to below in connection with resales of New Capital Securities
received in exchange for Old Capital Securities where such Old Capital
Securities were acquired by such Participating Broker-Dealer for its own account
as a result of market-making or other trading activities. Subject to certain
provisions set forth in the Registration Rights Agreement, the Corporation and
the Trust have agreed that this Prospectus, as it may be amended or supplemented
from time to time, may be used by a Participating Broker-Dealer in connection
with resales of such New Capital Securities for a period ending 90-days after
the Expiration Date (subject to extension under certain limited circumstances
described below) or, if earlier, when all such New Capital Securities have been
disposed of by such Participating Broker-Dealer. See "Plan of Distribution."
However, a Participating Broker-Dealer who intends to use this Prospectus in
connection with the resale of New Capital Securities received in exchange for
Old Capital Securities pursuant to the Exchange Offer must notify the
Corporation or the Trust, or cause the Corporation or the Trust to be notified,
on or prior to the Expiration Date, that it is a Participating Broker-Dealer.
Such notice may be given in the space provided for that purpose in the Letter of
Transmittal or may be delivered to the Exchange Agent at one of the addresses
set forth herein under "--Exchange Agent." Any Participating Broker-Dealer who
is an "affiliate" of the Corporation or the Trust may not rely on such
interpretive letters and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction.
In that regard, each Participating Broker-Dealer who surrenders Old
Capital Securities pursuant to the Exchange Offer will be deemed to have agreed,
by execution of the Letter of Transmittal, that, upon receipt of notice from the
Corporation or the Trust of the occurrence of any event or the discovery of any
fact which makes any statement contained or incorporated by reference in this
Prospectus untrue in any material respect or which causes this Prospectus to
omit to state a material fact necessary in order to make the statements
contained or incorporated by reference herein, in light of the circumstances
under which they were made, not misleading or of the occurrence of certain other
events specified in the Registration Rights Agreement, such Participating
Broker-Dealer will suspend the sale of New Capital Securities (or the New
Guarantee or the New Junior Subordinated Debentures, as applicable) pursuant to
this Prospectus until the Corporation or the Trust has amended or supplemented
this Prospectus to correct such misstatement or omission and has furnished
copies of the amended or supplemented Prospectus to such Participating
Broker-Dealer or the Corporation or the Trust has given notice that the sale of
the New Capital Securities (or the New Guarantee or the New Junior Subordinated
Debentures, as applicable) may be resumed, as the case may be. If the
Corporation or the Trust gives such notice to suspend the sale of the New
Capital Securities (or the New Guarantee or the New Junior Subordinated
Debentures, as applicable), it shall extend the 90-day period referred to above
during which Participating Broker-Dealers are entitled to use this Prospectus in
connection with the resale of New Capital Securities by the number of days
during the period from and including the date of the giving of such notice to
and including the date when Participating Broker-Dealers shall have received
copies of the amended or supplemented Prospectus necessary to permit resales of
the New Capital Securities or to and including the date on which the Corporation
or the Trust has given notice that the sale of New Capital Securities (or the
New Guarantee or the New Junior Subordinated Debentures, as applicable) may be
resumed, as the case may be.
Withdrawal Rights
Except as otherwise provided herein, tenders of Old Capital Securities
may be withdrawn at any time on or prior to the Expiration Date.
In order for a withdrawal to be effective a written or facsimile
transmission of such notice of withdrawal must be timely received by the
Exchange Agent at one of its addresses set forth under "--Exchange Agent" on or
prior to the Expiration Date. Any such notice of withdrawal must specify the
name of the person who tendered the Old Capital Securities to be withdrawn, the
aggregate principal amount of Old Capital Securities to be withdrawn, and (if
certificates for such Old Capital Securities have been tendered) the name of the
registered holder of the Old Capital Securities as set forth on the Old Capital
Securities, if different from that of the person who tendered such Old Capital
Securities. If Old Capital Securities have been delivered or otherwise
identified to the Exchange Agent, then prior to the physical release of such Old
Capital Securities, the tendering holder must submit the serial numbers shown on
the particular Old Capital Securities to be withdrawn and the signature on the
notice of withdrawal must be guaranteed by an Eligible Institution, except in
the case of Old Capital Securities tendered for the account of an Eligible
Institution. If Old Capital Securities have been tendered pursuant to the
procedures for book-entry transfer set forth in "--Procedures for Tendering Old
Capital Securities," the notice of withdrawal must specify the name and number
of the account at DTC to be credited with the withdrawal of Old Capital
Securities, in which case a notice of withdrawal will be effective if delivered
to the Exchange Agent by written, telegraphic, telex or facsimile transmission.
Withdrawals of tenders of Old Capital Securities may not be rescinded. Old
Capital Securities properly withdrawn will not be deemed validly tendered for
purposes of the Exchange Offer, but may be retendered at any subsequent time on
or prior to the Expiration Date by following any of the procedures described
above under "--Procedures for Tendering Old Capital Securities."
All questions as to the validity, form and eligibility (including time
of receipt) of such withdrawal notices will be determined by the Trust, in its
sole discretion, whose determination shall be final and binding on all parties.
Neither the Corporation, the Trust, any affiliates or assigns of the Corporation
or the Trust, the Exchange Agent nor any other person shall be under any duty to
give any notification of any irregularities in any notice of withdrawal or incur
any liability for failure to give any such notification. Any Old Capital
Securities which have been tendered but which are withdrawn will be returned to
the holder thereof promptly after withdrawal.
Distributions on New Capital Securities
Holders of Old Capital Securities whose Old Capital Securities are
accepted for exchange will not receive accumulated Distributions on such Old
Capital Securities for any period from and after June 19, 1998. However, because
Distributions on the New Capital Securities will accumulate from such date, the
amount of the Distributions received by holders whose Old Capital Securities are
accepted for exchange will not be affected by the exchange.
Conditions to the Exchange Offer
Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, the Corporation and the Trust will not be
required to accept for exchange, or to exchange, any Old Capital Securities for
any New Capital Securities, and, as described below, may terminate the Exchange
Offer (whether or not any Old Capital Securities have theretofore been accepted
for exchange) or may waive any conditions to or amend the Exchange Offer, if any
of the following conditions have occurred or exists or have not been satisfied:
(a) there shall occur a change in the current interpretation by the
staff of the Commission which permits the New Capital Securities issued pursuant
to the Exchange Offer in exchange for Old Capital Securities to be offered for
resale, resold and otherwise transferred by holders thereof (other than
broker-dealers and any such holder which is an "affiliate" of the Corporation or
the Trust within the meaning of Rule 405 under the Securities Act) without
compliance with the registration and prospectus delivery provisions of the
Securities Act provided that such New Capital Securities are acquired in the
ordinary course of such holders' business and such holders have no arrangement
or understanding with any person to participate in the distribution of such New
Capital Securities; or
(b) any law, statute, rule or regulation shall have been adopted or
enacted which, in the judgment of the Corporation or the Trust, would reasonably
be expected to impair its ability to proceed with the Exchange Offer; or
(c) a stop order shall have been issued by the Commission or any state
securities authority suspending the effectiveness of the Registration Statement
or proceedings shall have been initiated or, to the knowledge of the Corporation
or the Trust, threatened for that purpose any governmental approval has not been
obtained, which approval the Corporation or the Trust shall, in its sole
discretion, deem necessary for the consummation of the Exchange Offer as
contemplated hereby.
If the Corporation or the Trust determines in its sole and absolute
discretion that any of the foregoing events or conditions has occurred or exists
or has not been satisfied, it may, subject to applicable law, terminate the
Exchange Offer (whether or not any Old Capital Securities have theretofore been
accepted for exchange) or may waive any such condition or otherwise amend the
terms of the Exchange Offer in any respect. If such waiver or amendment
constitutes a material change to the Exchange Offer, the Corporation or the
Trust will promptly disclose such waiver or amendment by means of a prospectus
supplement that will be distributed to the registered holders of the Old Capital
Securities and will extend the Exchange Offer to the extent required by Rule
14e-1 under the Exchange Act.
Exchange Agent
The Bank of New York has been appointed as Exchange Agent for the
Exchange Offer. Delivery of the Letters of Transmittal and any other required
documents, requests for assistance, and requests for additional copies of this
Prospectus or of the Letter of Transmittal should be directed to the Exchange
Agent as follows:
<TABLE>
<CAPTION>
By Registered or Certified Mail: By Hand or Overnight Delivery:
<S> <C>
The Bank of New York The Bank of New York
101 Barclay Street - 7E 101 Barclay Street
Attn.: Reorganization Section Corporate Trust Services Window
Carolle Montreuil Ground Level
New York, New York 10286 New York, New York 10286
Attention: Reorganization Section
Carolle Montreuil
</TABLE>
For Information Call:
(212) 815-3738
(Eligible Institutions Only)
Confirm By Telephone:
(212) 815-3738
Facsimile Transmissions:
(212) 815-6339
Delivery to other than the above addresses or facsimile number will not
constitute a valid delivery.
Fees and Expenses
The Corporation has agreed to pay the Exchange Agent reasonable and
customary fees for its services and will reimburse it for its reasonable
out-of-pocket expenses in connection therewith. The Corporation will also pay
brokerage houses and other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of this Prospectus
and related documents to the beneficial owners of Old Capital Securities, and in
handling or tendering for their customers.
Holders who tender their Old Capital Securities for exchange will not
be obligated to pay any transfer taxes in connection therewith. If, however, New
Capital Securities are to be delivered to, or are to be issued in the name of,
any person other than the registered holder of the Old Capital Securities
tendered, or if a transfer tax is imposed for any reason other than the exchange
of Old Capital Securities in connection with the Exchange Offer, then the amount
of any such transfer taxes (whether imposed on the registered holder or any
other persons) will be payable by the tendering holder. If satisfactory evidence
of payment of such taxes or exemption therefrom is not submitted with the Letter
of Transmittal, the amount of such transfer taxes will be billed directly to
such tendering holder.
Neither the Corporation nor the Trust will make any payment to brokers,
dealers or other nominees soliciting acceptances of the Exchange Offer.
Restrictions on Transfer
The Old Capital Securities were, and the New Capital Securities will
be, issued and may be transferred only in blocks having a Liquidation Amount of
not less than $100,000 (100 Old Capital Securities or New Capital Securities, as
the case may be). Any such transfer of the Old Capital Securities or the New
Capital Securities in a block having a Liquidation Amount of less than $100,000
shall be deemed to be void and of no legal effect whatsoever. Any such
transferee shall be deemed not to be the holder of such Old Capital Securities
or New Capital Securities for any purpose, including, but not limited to, the
receipt of Distributions on such Old Capital Securities or New Capital
Securities, and such transferee shall be deemed to have no interest whatsoever
in such Old Capital Securities or New Capital Securities.
DESCRIPTION OF NEW SECURITIES
Description of New Capital Securities
Pursuant to the terms of the Declaration for the Trust, the Issuer
Trustees on behalf of the Trust have issued the Old Capital Securities and the
Common Securities and will issue the New Capital Securities. The New Capital
Securities will represent preferred undivided beneficial interests in the assets
of the Trust and the holders of the New Capital Securities and the Old Capital
Securities will be entitled to a preference over the Common Securities in
certain circumstances with respect to Distributions and amounts payable on
redemption of the Trust Securities or liquidation of the Trust as well as other
benefits as described in the Declaration. See "--Subordination of Common
Securities." The Declaration has been qualified under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). This summary of certain provisions
of the New Capital Securities and the Declaration does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
all the provisions of the Declaration and the Trust Indenture Act. Certain
capitalized terms used herein are defined in the Declaration. A copy of the form
of the Declaration is available upon request from the Trust by contacting the
Issuer Trustees.
General. The Capital Securities (including the Old Capital Securities
and the New Capital Securities) are limited to $50,000,000 aggregate Liquidation
Amount at any one time outstanding. The Capital Securities will rank pari passu,
and payments will be made thereon pro rata, with the Old Capital Securities and
the Common Securities except as described under "--Subordination of Common
Securities." Legal title to the Junior Subordinated Debentures will be held by
the Property Trustee in trust for the benefit of the holders of the Capital
Securities and Common Securities. The New Guarantee will be a guarantee on a
subordinated basis with respect to the New Capital Securities but will not
guarantee payment of Distributions or amounts payable on redemption of the New
Capital Securities or on liquidation of the Trust when the Trust does not have
funds on hand legally available for such payments. See "--Description of New
Guarantee."
Distributions. The New Capital Securities represent preferred undivided
beneficial interests in the assets of the Trust. Distributions on the New
Capital Securities will be cumulative, will accumulate from June 19, 1998 and
will be payable semi-annually in arrears on June 15 and December 15 of each
year, commencing December 15, 1998, at the annual rate of 7.65% of the
Liquidation Amount to the holders of the New Capital Securities on the relevant
record dates. The record dates will be the first day of the month in which the
relevant Distribution Date (as defined below) falls. The amount of Distributions
payable for any period will be computed on the basis of a 360-day year of twelve
30-day months. In the event that any date on which Distributions are payable on
the New Capital Securities is not a Business Day (as defined below), payment of
the Distribution payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect to
any such delay), in each case with the same force and effect as if made on such
date (each date on which Distributions are payable in accordance with the
foregoing, a "Distribution Date"). A "Business Day" shall mean any day other
than a Saturday or a Sunday, or a day on which banking institutions in The City
of New York or Union City, New Jersey, are authorized or required by law or
executive order to remain closed.
So long as no Debenture Event of Default shall have occurred and be
continuing, the Corporation will have the right under the Indenture to defer the
payment of interest on the New Junior Subordinated Debentures at any time or
from time to time for a period not exceeding 10 consecutive semi-annual periods
with respect to each Extension Period, provided that no Extension Period may
extend beyond the Stated Maturity Date of the Junior Subordinated Debentures or
end on a date other than a Distribution Date. Upon any such election,
semi-annual Distributions on the New Capital Securities will be deferred by the
Trust during any such Extension Period. Distributions to which holders of the
New Capital Securities are entitled during any such Extension Period will
accumulate additional Distributions thereon at the rate per annum of 7.65%
thereof, compounded semi-annually from the relevant Distribution Date, but not
exceeding the interest rate then accruing on the New Junior Subordinated
Debentures. The term "Distributions," as used herein, shall include any such
additional Distributions.
During any such Extension Period, the Corporation may extend such
Extension Period, provided that such extension does not cause such Extension
Period to exceed 10 consecutive semi-annual periods or to extend beyond the
Stated Maturity Date. Upon the termination of any such Extension Period and the
payment of all amounts then due, and subject to the foregoing limitations, the
Corporation may elect to begin a new Extension Period. The Corporation must give
the Property Trustee, the Administrative Trustees and the Debenture Trustee
notice of its election of any Extension Period or any extension thereof at least
five Business Days prior to the earlier of (i) the date the Distributions on the
New Capital Securities would have been payable except for the election to begin
such Extension Period or (ii) the date the Administrative Trustees are required
to give notice to any securities exchange or to holders of such New Capital
Securities of the record date or the date such Distributions are payable but in
any event not less than five Business Days prior to such record date. There is
no limitation on the number of times that the Corporation may elect to begin an
Extension Period. See "--Description of New Junior Subordinated
Debentures--Option to Extend Interest Payment Period" and "Certain Federal
Income Tax Considerations--Interest Income and Original Issue Discount."
During any such Extension Period, the Corporation may not (i) declare
or pay any dividends or distributions on, or redeem, purchase, acquire, or make
a liquidation payment with respect to, any of the Corporation's capital stock
(which includes common and preferred stock) or (ii) make any payment of
principal of or premium, if any, or interest on or repay, repurchase or redeem
any debt securities of the Corporation (including Other Debentures) that rank
pari passu with or junior in right of payment to the New Junior Subordinated
Debentures or (iii) make any guarantee payments with respect to any guarantee by
the Corporation of the debt securities of any subsidiary of the Corporation
(including Other Guarantees) if such guarantee ranks pari passu with or junior
in right of payment to the New Junior Subordinated Debentures (other than (a)
dividends or distributions in shares of, or options, warrants or rights to
subscribe for or purchase shares of, common stock of the Corporation, (b) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Guarantee, (d) as a result of a reclassification of the
Corporation's capital stock or the exchange or conversion of one class, or
series of the Corporation's capital stock for another class or series of the
Corporation's capital stock, (e) the purchase of fractional interests in shares
of the Corporation's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
and (f) repurchases, redemptions or other acquisitions of common stock related
to the issuance of common stock or rights under any of the Corporation's
employment contracts, benefit plans, or similar arrangement with or for the
benefit of any of its directors, officers or employees or any of the
Corporation's dividend reinvestment plans).
Although the Corporation may in the future exercise its option to defer
payments of interest on the New Junior Subordinated Debentures, the Corporation
has no such current intention.
The revenue of the Trust available for distribution to holders of the
Capital Securities will be limited to payments under the New Junior Subordinated
Debentures in which the Trust will invest the proceeds from the issuance and
sale of the Trust Securities. See "--Description of New Junior Subordinated
Debentures--General." If the Corporation does not make interest payments on the
New Junior Subordinated Debentures, the Property Trustee will not have funds
available to pay Distributions or other amounts payable on the New Capital
Securities. The payment of Distributions (if and to the extent the Trust has
funds on hand legally available for the payment of such Distributions) will be
guaranteed by the Corporation on a limited basis as set forth herein under
"--Description of New Guarantee."
Redemption. Upon the repayment, in whole or in part on the Stated
Maturity Date or prepayment prior to the Stated Maturity Date of the New Junior
Subordinated Debentures, the proceeds from such repayment or prepayment shall be
applied by the Property Trustee to redeem a Like Amount (as defined below) of
the Trust Securities, upon not less than 30 nor more than 60 days' notice of a
date of redemption (the "Redemption Date"), at the applicable Redemption Price,
which shall be equal to (i) in the case of the repayment of the New Junior
Subordinated Debentures on the Stated Maturity Date, the Maturity Redemption
Price (equal to the principal of, and accrued and unpaid interest on, the New
Junior Subordinated Debentures), (ii) in the case of the optional prepayment of
the New Junior Subordinated Debentures before the Initial Optional Prepayment
Date upon the occurrence and continuation of a Special Event, the Special Event
Redemption Price (equal to the Special Event Prepayment Price in respect of the
New Junior Subordinated Debentures) and (iii) in the case of the optional
prepayment of the New Junior Subordinated Debentures other than as contemplated
in clause (ii) above, the Optional Redemption Price (equal to the Optional
Prepayment Price in respect of the New Junior Subordinated Debentures). If less
than all the New Junior Subordinated Debentures are to be repaid or redeemed on
a Redemption Date, then the proceeds from such a repayment or redemption shall
be allocated to the redemption pro rata of the New Capital Securities and the
Common Securities. See "--Description of New Junior Subordinated
Debentures--Optional Prepayment" and "--Special Event Prepayment."
"Like Amount" means (i) with respect to a redemption of the Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Junior Subordinated Debentures to be paid in accordance with their
terms and (ii) with respect to a distribution of Junior Subordinated Debentures
upon the liquidation of the Trust, Junior Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Trust Securities of the
holder to whom such Junior Subordinated Debentures are distributed.
The Corporation will have the option to prepay the Junior Subordinated
Debentures, (i) in whole or in part, on or after the Initial Optional Prepayment
Date, at the applicable Optional Prepayment Price and (ii) in whole but not in
part, at any time before the Initial Optional Prepayment Date, upon the
occurrence of a Special Event, at the Special Event Prepayment Price, in each
case subject to receipt of prior approval by the Federal Reserve if then
required under applicable capital guidelines or policies of the Federal Reserve.
A redemption of the New Junior Subordinated Debentures would cause a mandatory
redemption of a Like Amount of the New Capital Securities and the Common
Securities at the Redemption Price.
Liquidation of the Trust and Distribution of New Junior Subordinated
Debentures. The amount payable on the New Capital Securities in the event of any
liquidation of the Trust is $1,000 per New Capital Security plus accumulated and
unpaid Distributions to the date of payment, subject to certain exceptions. The
Corporation will have the right at any time to dissolve the Trust and, after
satisfaction of liabilities to creditors of the Trust as required by applicable
law, cause the New Junior Subordinated Debentures to be distributed to the
holders of the Trust Securities in liquidation of the Trust. Such right is
subject to (i) the Corporation having received an opinion of counsel to the
effect that such distribution will not be a taxable event to holders of New
Capital Securities and (ii) the prior approval of the Federal Reserve if then
required under applicable capital guidelines or policies of the Federal Reserve.
The Federal Reserve's risk-based capital guidelines currently provide
that redemptions of permanent equity or other capital instruments before their
stated maturity could have a significant impact on a bank holding company's
overall capital structure and that any organization considering such a
redemption should consult with the Federal Reserve before redeeming any capital
instrument prior to maturity if such redemption could have a material effect on
the level or composition of the organization's capital base (unless the equity
or capital instrument were redeemed with the proceeds of, or replaced by, a like
amount of a similar or higher quality capital instrument and the Federal Reserve
considers the organization's capital position to be fully adequate after the
redemption).
In the event the Corporation, while a holder of Common Securities,
dissolves the Trust prior to the Stated Maturity Date of the Capital Securities
and the dissolution of the Trust is deemed to constitute the redemption of
capital instruments by the Federal Reserve under its risk-based capital
guidelines or policy, the dissolution of the Trust by the Corporation may be
subject to the prior approval of the Federal Reserve. Moreover, any changes in
applicable law or changes in the Federal Reserve's risk-based capital guidelines
or policies could impose a requirement on the Corporation that it obtain the
prior approval of the Federal Reserve to dissolve the Trust.
The Trust shall automatically dissolve upon the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of the Corporation or
the Trust; (ii) upon receipt by the Property Trustee of written notice from the
Corporation, as Sponsor, directing the Property Trustee to dissolve the Trust
(which direction is optional and, except as described above, wholly within the
discretion of the Corporation, as Sponsor); (iii) redemption of all of the Trust
Securities as described under "--Redemption" above; (iv) expiration of the term
of the Trust; and (v) the entry of an order for the dissolution of the Trust by
a court of competent jurisdiction.
If a dissolution occurs as described in clause (i), (ii), (iv), or (v)
of the preceding paragraph, the Trust shall be liquidated by the Administrative
Trustees as expeditiously as the Administrative Trustees determine to be
possible by distributing, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, to the holders of the Trust Securities a
Like Amount of the New Junior Subordinated Debentures, in which event such
holders will be entitled to receive out of the assets of the Trust legally
available for distribution to holders, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, an amount equal to the
aggregate of the Liquidation Amount plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"). If the Liquidation Distribution can be paid only in part because
the Trust has insufficient assets on hand legally available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Capital Securities and the Common Securities shall be paid on a pro
rata basis, except that if a Debenture Event of Default has occurred and is
continuing, the Capital Securities shall have a priority over the Common
Securities. See "--Subordination of Common Securities." If an early termination
occurs as described in clause (v) above, the New Junior Subordinated Debentures
will be subject to optional prepayment, in whole but not in part, on or after
the Initial Optional Prepayment Date.
If the Corporation elects not to prepay the Junior Subordinated
Debentures prior to maturity in accordance with their terms and either elects
not to or is unable to liquidate the Trust and distribute the Junior
Subordinated Debentures to holders of the Trust Securities, the Trust Securities
will remain outstanding until the repayment of the Junior Subordinated
Debentures on the Stated Maturity Date.
After the liquidation date is fixed for any distribution of Junior
Subordinated Debentures to holders of the Trust Securities, (i) the Trust
Securities will no longer be deemed to be outstanding, (ii) each registered
global certificate, if any, representing Trust Securities and held by DTC or its
nominee will receive a registered global certificate or certificates
representing the Junior Subordinated Debentures to be delivered upon such
distribution and (iii) any certificates representing Trust Securities not held
by DTC or its nominee will be deemed to represent New Junior Subordinated
Debentures having a principal amount equal to the Liquidation Amount of such
Trust Securities, and bearing accrued and unpaid interest in an amount equal to
the accumulated and unpaid Distributions on such Trust Securities until such
certificates are presented to the Administrative Trustees or their agent for
cancellation, whereupon the Corporation will issue to such holder, and the
Debenture Trustee will authenticate, a certificate representing such Junior
Subordinated Debentures.
There can be no assurance as to the market prices for the New Capital
Securities or the New Junior Subordinated Debentures that may be distributed in
exchange for the Trust Securities if a dissolution and liquidation of the Trust
were to occur. Accordingly, the New Capital Securities that an investor may
purchase, or the New Junior Subordinated Debentures that the investor may
receive on dissolution and liquidation of the Trust, may trade at a discount to
the price that the investor paid to purchase the New Capital Securities.
Redemption Procedures. If applicable, Trust Securities shall be
redeemed at the applicable Redemption Price with the proceeds from the
contemporaneous repayment or prepayment of the New Junior Subordinated
Debentures. Any redemption of Trust Securities shall be made and the applicable
Redemption Price shall be payable on the Redemption Date only to the extent that
the Trust has funds legally available for the payment of such applicable
Redemption Price. See also "--Subordination of Common Securities."
If the Trust gives a notice of redemption in respect of the New Capital
Securities, then, by 12:00 noon, New York City time, on the Redemption Date, to
the extent funds are legally available, with respect to the New Capital
Securities held by DTC or its nominees, the Property Trustee will pay or cause
the Paying Agent to pay the Redemption Price to DTC. See "--Form, Denomination,
Book-Entry Procedures and Transfer." With respect to the New Capital Securities
held in certificated form, the Property Trustee, to the extent funds are legally
available, will give irrevocable instructions and authority to the paying agent
and will irrevocably deposit with the paying agent for the New Capital
Securities funds sufficient to pay or cause the paying agent to pay the
applicable Redemption Price to the holders thereof upon surrender of their
certificates evidencing the New Capital Securities. See "--Payment and Paying
Agency." Distributions payable on or prior to the Redemption Date shall be
payable to the holders of such New Capital Securities on the relevant record
dates for the related Distribution Dates. If notice of redemption shall have
been given and funds deposited with the Property Trustee to pay the Redemption
Price for the New Capital Securities called for redemption, then all rights of
the holders of such New Capital Securities will cease, except the right of the
holders of the New Capital Securities to receive the applicable Redemption
Price, but without interest on such Redemption Price, and the New Capital
Securities will cease to be outstanding. In the event that any Redemption Date
of New Capital Securities is not a Business Day, then the applicable Redemption
Price payable on such date will be paid on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day. In the event
that payment of the applicable Redemption Price is improperly withheld or
refused and not paid either by the Trust or by the Corporation pursuant to the
New Guarantee as described under "--Description of New Guarantee," (i)
Distributions on New Capital Securities will continue to accumulate on the
Redemption Price at the then applicable rate, from the Redemption Date
originally established by the Trust to the date such applicable Redemption Price
is actually paid, and (ii) the actual payment date will be the Redemption Date
for purposes of calculating the applicable Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law and the regulations of the Federal Reserve), the
Corporation or its subsidiaries may at any time and from time to time purchase
outstanding Capital Securities by tender, in the open market or by private
agreement.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days prior to the Redemption Date to each holder of Trust Securities at
its registered address. Unless the Corporation defaults in payment of the
applicable Prepayment Price on, or in the repayment of, the Junior Subordinated
Debentures, on and after the Redemption Date Distributions will cease to accrue
on the Trust Securities called for redemption.
Subordination of Common Securities. Payment of Distributions on, and
the Redemption Price of, the Capital Securities and Common Securities, as
applicable, shall be made pro rata based on the Liquidation Amount of the
Capital Securities and Common Securities; provided, however, that if on any
Distribution Date or Redemption Date a Debenture Event of Default shall have
occurred and be continuing, no payment of any Distribution on, or applicable
Redemption Price of, any of the Common Securities, and no other payment on
account of the redemption, liquidation or other acquisition of the Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions on all of the outstanding Capital Securities for all
Distribution periods terminating on or prior thereto, the full amount of the
Redemption Price therefor, shall have been made or provided for, and all funds
available to the Property Trustee shall first be applied to the payment in full
in cash of all Distributions on, or Redemption Price of, the Capital Securities
then due and payable. The existence of a Debenture Event of Default does not
entitle the holders of the Capital Securities to accelerate the maturity
thereof.
In the case of any Event of Default, the Corporation as holder of the
Common Securities will be deemed to have waived any right to act with respect to
such Event of Default until the effect of such Event of Default shall have been
cured, waived or otherwise eliminated. Until any such Event of Default has been
so cured, waived or otherwise eliminated, the Property Trustee shall act solely
on behalf of the holders of the Capital Securities and not on behalf of the
Corporation as holder of the Common Securities, and only the holders of the
Capital Securities will have the right to direct the Property Trustee to act on
their behalf.
Events of Default; Notice. The occurrence of a Debenture Event of
Default (see "Description of New Junior Subordinated Debentures--Debenture
Events of Default") constitutes an "Event of Default" under the Declaration.
Additionally, each of the following events constitutes an Event of
Default under the Declaration with respect to the Capital Securities (whatever
the reason for such Event of Default and whether it is voluntary or involuntary
or whether it is effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body): (i) default by the Trust in the payment of
any Distribution when it becomes due and payable, and continuation of such
default for a period of thirty (30) days; or (ii) default by the Trust in the
payment of any Redemption Price of any Trust Security when it becomes due and
payable; or (iii) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Issuer Trustees in the Declaration
(other than a covenant or warranty or a default in the performance of which or
the breach of which is dealt with in clause (i) or (ii) above), and continuation
of such default or breach for a period of sixty (60) days after there has been
given, by registered or certified mail, to the Issuer Trustees and the
Corporation by the holders of at least 25% in the aggregate Liquidation Amount
of the outstanding Capital Securities, a written notice specifying such default
or breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" under the Declaration or (iv) the occurrence of certain
events of bankruptcy or insolvency with respect to the Property Trustee if a
successor Property Trustee has not been appointed within ninety (90) days
thereof.
Within ten (10) Business Days after the occurrence of any Event of
Default actually known to the Property Trustee, the Property Trustee shall
transmit notice of such Event of Default to the holders of the Capital
Securities, the Administrative Trustees and the Corporation, as Sponsor, unless
such Event of Default shall have been cured or waived. The Corporation, as
Sponsor, and the Administrative Trustees are required to file annually with the
Property Trustee a certificate as to whether or not they are in compliance with
all the conditions and covenants applicable to them under the Declaration.
If a Debenture Event of Default has occurred and is continuing, the
Capital Securities shall have a preference over the Common Securities as
described under "--Liquidation of the Trust and Distribution of New Junior
Subordinated Debentures" and "--Subordination of Common Securities."
Removal of Issuer Trustees. Unless a Debenture Event of Default shall
have occurred and be continuing, any Issuer Trustee may be removed at any time
by the holder of the Common Securities. If a Debenture Event of Default has
occurred and is continuing, the Property Trustee and the Delaware Trustee may be
removed at such time by the holders of a majority in Liquidation Amount of the
outstanding Capital Securities. In no event will the holders of the Capital
Securities have the right to vote to appoint, remove or replace the
Administrative Trustees, which voting rights are vested exclusively in the
Corporation as the holder of the Common Securities. No resignation or removal of
an Issuer Trustee and no appointment of a successor trustee shall be effective
until the acceptance of appointment by the successor trustee in accordance with
the provisions of the Declaration.
Merger or Consolidation of Issuer Trustees. Any corporation into which
the Property Trustee, the Delaware Trustee or any Administrative Trustee that is
not a natural person may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which such Issuer Trustee shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of such
Issuer Trustee, shall be the successor of such Issuer Trustee under the
Declaration, provided such corporation shall be otherwise qualified and
eligible.
Mergers, Consolidations, Amalgamations or Replacements of the Trust.
The Trust may not merge or convert with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any corporation or other Person,
except as described below. The Trust may, at the request of the Corporation, as
Sponsor, with the consent of the Administrative Trustees but without the consent
of the holders of the Capital Securities, merge or convert with or into,
consolidate, amalgamate, or be replaced by or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to a trust
organized as such under the laws of any State; provided, that (i) such successor
entity either (a) expressly assumes all of the obligations of the Trust with
respect to the Capital Securities or (b) substitutes for the Capital Securities
other securities having substantially the same terms as the Capital Securities
(the "Successor Securities") so long as the Successor Securities rank the same
as the Capital Securities rank in priority with respect to distributions and
payments upon liquidation, redemption and otherwise, (ii) the Corporation
expressly appoints a trustee of such successor entity possessing the same powers
and duties as the Property Trustee with respect to the Junior Subordinated
Debentures, (iii) the Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or other organization on which the Capital Securities are
then listed or quoted, if any, (iv) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Capital Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (v) such merger,
conversion, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences and privileges of the
holders of the Capital Securities (including any Successor Securities) in any
material respect (other than any dilution of such holders' interests in the new
entity), (vi) such successor entity has a purpose identical to that of the
Trust, (vii) prior to such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Corporation has received an
opinion from independent counsel to the Trust experienced in such matters to the
effect that (a) such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Capital Securities (including
any Successor Securities) in any material respect (other than any dilution of
such holders' interests in the new entity), and (b) following such merger,
conversion, consolidation, amalgamation, replacement, conveyance, transfer or
lease, neither the Trust nor such successor entity will be required to register
as an investment company under the Investment Company Act of 1940, as amended
(the "Investment Company Act"), and (viii) the Corporation or any permitted
successor or assignee owns all of the common securities of such successor entity
and guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee. Notwithstanding the
foregoing, the Trust shall not, except with the consent of holders of 100% in
Liquidation Amount of the Trust Securities, consolidate, amalgamate, merge or
convert with or into, or be replaced by or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to any
other entity or permit any other entity to consolidate, amalgamate, merge or
convert with or into, or replace it if such consolidation, amalgamation, merger,
conversion, replacement, conveyance, transfer or lease would cause the Trust or
the successor entity not to be classified as a grantor trust for United States
federal income tax purposes In addition, the Property Trustee will be required
pursuant to the Indenture to exchange, as a part of the Exchange Offer, the
Junior Subordinated Debentures for the Exchange Debentures, which will have
terms identical to the Junior Subordinated Debentures, except that the New
Junior Subordinated Debentures will not be subject to certain restrictions on
transfer applicable to the Junior Subordinated Debentures, other than the
requirement that minimum transfers thereof to be in blocks of $100,000 principal
amount. See "Exchange Offer; Registration Rights."
Voting Rights; Amendment of the Declaration. Except as provided below
and under "--Mergers, Consolidations, Amalgamations or Replacements of the
Trust" and "--Description of New Guarantee--Amendments and Assignment" and as
otherwise required by law and the Declaration, the holders of the New Capital
Securities will have no voting rights.
The Declaration may be amended from time to time by the Corporation,
the Property Trustee and the Administrative Trustees, without the consent of the
holders of the Trust Securities (i) to cure any ambiguity, correct or supplement
any provisions in the Declaration that may be inconsistent with any other
provision, or to make any other provisions with respect to matters or questions
arising under the Declaration, which shall not be inconsistent with the other
provisions of the Declaration, or (ii) to modify, eliminate or add to any
provisions of the Declaration to such extent as shall be necessary to ensure
that the Trust will be classified for United States federal income tax purposes
as a grantor trust at all times that any Trust Securities are outstanding or to
ensure that the Trust will not be required to register as an "investment
company" under the Investment Company Act, or (iii) to modify, eliminate, or add
to any provision of the Declaration to such extent as shall be necessary to
enable the Trust and the Corporation to conduct an Exchange Offer in the manner
contemplated by the Registration Rights Agreement; provided, however, that in
the case of clause (i), such action shall not adversely affect in any material
respect the interests of the holders of the Trust Securities. Any amendments of
the Declaration pursuant to the foregoing shall become effective when notice
thereof is given to the holders of the Trust Securities. The Declaration may be
amended by the Issuer Trustees and the Corporation (i) with the consent of
holders representing a majority (based upon Liquidation Amount) of the
outstanding Trust Securities, and (ii) upon receipt by the Issuer Trustees of an
opinion of counsel to the effect that such amendment or the exercise of any
power granted to the Issuer Trustees in accordance with such amendment will not
affect the Trust's status as a grantor trust for United States federal income
tax purposes or the Trust's exemption from status as an "investment company"
under the Investment Company Act, provided that, without the consent of each
holder of Trust Securities, the Declaration may not be amended to (i) change the
amount or timing of any Distribution or other payment on the Trust Securities or
otherwise adversely affect the amount of any Distribution or other payment
required to be made in respect of the Trust Securities as of a specified date or
(ii) restrict the right of a holder of Trust Securities to institute suit for
the enforcement of any such payment on or after such date; it being understood
that the New Capital Securities and any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer will vote together as a
single class for purposes of determining whether holders of the requisite
percentage in outstanding Liquidation Amount thereof have taken certain actions
or exercised certain rights under the Declaration.
So long as any Junior Subordinated Debentures are held by the Property
Trustee, the Issuer Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on such Debenture Trustee with respect to
the Junior Subordinated Debentures, (ii) waive certain past defaults under the
Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Junior Subordinated
Debentures or (iv) consent to any amendment, modification or termination of the
Indenture or the Junior Subordinated Debentures, where such consent shall be
required, without, in each case, obtaining the prior approval of the holders of
a majority in Liquidation Amount of all outstanding Capital Securities;
provided, however, that where a consent under the Indenture would require the
consent of each holder of Junior Subordinated Debentures affected thereby, no
such consent shall be given by the Property Trustee without the prior approval
of each holder of the Capital Securities. The Issuer Trustees shall not revoke
any action previously authorized or approved by a vote of the holders of the
Capital Securities except by subsequent vote of such holders. The Property
Trustee shall notify each holder of Capital Securities of any notice of default
with respect to the Junior Subordinated Debentures. In addition to obtaining the
foregoing approvals of such holders of the Capital Securities, prior to taking
any of the foregoing actions, the Issuer Trustees shall obtain an opinion of
counsel experienced in such matters to the effect that the Trust will not be
classified as an association taxable as a corporation for United States federal
income tax purposes on account of such action.
Any required approval of holders of New Capital Securities may be given
at a meeting of such holders convened for such purpose or pursuant to written
consent. The Property Trustee will cause a notice of any meeting at which
holders of New Capital Securities are entitled to vote, or of any matter upon
which action by written consent of such holders is to be taken, to be given to
each holder of record of New Capital Securities in the manner set forth in the
Declaration.
No vote or consent of the holders of New Capital Securities will be
required for the Trust to redeem and cancel the New Capital Securities in
accordance with the Declaration.
Notwithstanding that holders of the Capital Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Capital Securities that are owned by the Corporation or any affiliate of the
Corporation, shall, for purposes of such vote or consent, be treated as if they
were not outstanding.
Form, Denomination, Book-Entry Procedures and Transfer. The New Capital
Securities initially will be represented by one or more Capital Securities in
registered, global form (collectively, the "Global Capital Securities"). The
Global Capital Securities will be deposited upon issuance with the Property
Trustee as custodian for DTC, in New York, New York, and registered in the name
of DTC or its nominee, in each case for credit to an account of a direct or
indirect participant in DTC as described below.
Except as set forth below, the Global Capital Securities may be
transferred, in whole and not in part, only to another nominee of DTC or to a
successor of DTC or its nominee. Beneficial interests in the Global Capital
Securities may not be exchanged for Capital Securities in certificated form
except in the limited circumstances described below.
DTC has advised the Trust and the Corporation that DTC is a limited
purpose trust company created to hold securities for its participating
organizations (collectively, the "Participants") and to facilitate the clearance
and settlement of transactions in those securities between Participants through
electronic book-entry changes in accounts of its Participants. The Participants
include securities brokers and dealers (including the Initial Purchasers),
banks, trust companies, clearing corporations and certain other organizations.
Access to DTC's system is also available to other entities such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly (collectively,
the "Indirect Participants"). Persons who are not Participants may beneficially
own securities held by or on behalf of DTC only through the Participants or the
Indirect Participants. The ownership interest and transfer of ownership interest
of each actual purchaser of each security held by or on behalf of DTC are
recorded on the records of the Participants and Indirect Participants.
DTC has also advised the Trust and the Corporation that, pursuant to
procedures established by it, (i) upon deposit of the Global Capital Securities,
DTC will credit the accounts of Participants with portions of the Liquidation
Amount of the Global Capital Securities and (ii) ownership of such interests in
the Global Capital Securities will be shown on, and the transfer of ownership
thereof will be effected only through, records maintained by DTC (with respect
to the Participants) or by the Participants and the Indirect Participants (with
respect to other owners of beneficial interests in the Global Capital
Securities).
Except as described below, owners of beneficial interests in the Global
Capital Securities will not have Capital Securities registered in their name,
will not receive physical delivery of Capital Securities in certificated form
and will not be considered the registered owners or holders thereof under the
Declaration for any purpose.
Payments in respect of the Global Capital Security registered in the
name of DTC or its nominee will be payable by the Property Trustee to DTC in its
capacity as the registered holder under the Declaration. Under the terms of the
Declaration, the Property Trustee will treat the persons in whose names the
Capital Securities, including the Global Capital Securities, are registered as
the owners thereof for the purpose of receiving such payments and for any and
all other purposes whatsoever. Consequently, neither the Property Trustee nor
any agent thereof has or will have any responsibility or liability for (i) any
aspect of DTC's records or any Participant's or Indirect Participant's records
relating to or payments made on account of beneficial interests in the Global
Capital Securities, or for maintaining, supervising or reviewing any of DTC's
records or any Participant's or Indirect Participant's records relating to the
beneficial interests in the Global Capital Securities or (ii) any other matter
relating to the actions and practices of DTC or any of its Participants or
Indirect Participants. DTC has advised the Trust and the Corporation that its
current practice, upon receipt of any payment in respect of securities such as
the Capital Securities, is to credit the accounts of the relevant Participants
with the payment on the payment date, in amounts proportionate to their
respective holdings in Liquidation Amount of beneficial interests in the
relevant security as shown on the records of DTC unless DTC has reason to
believe it will not receive payment on such payment date. Payments by the
Participants and the Indirect Participants to the beneficial owners of New
Capital Securities will be governed by standing instructions and customary
practices and will be the responsibility of the Participants or the Indirect
Participants and will not be the responsibility of DTC, the Property Trustee,
the Trust or the Corporation. Neither the Trust nor the Corporation or the
Property Trustee will be liable for any delay by DTC or any of its Participants
in identifying the beneficial owners of the New Capital Securities, and the
Trust, the Corporation and the Property Trustee may conclusively rely on and
will be protected in relying on instructions from DTC or its nominee for all
purposes.
Beneficial interests in the Global Capital Securities will trade in
DTC's Same-Day Funds Settlement System and secondary market trading activity in
such interests will therefore settle in immediately available funds, subject in
all cases to the rules and procedures of DTC and its participants.
DTC has advised the Trust and the Corporation that it will take any
action permitted to be taken by a holder of New Capital Securities only at the
direction of one or more Participants to whose account with DTC interests in the
Global Capital Securities are credited and only in respect of such portion of
the Liquidation Amount of the New Capital Securities as to which such
Participant or Participants has or have given such direction. However, if there
is an Event of Default under the Declaration, DTC reserves the right to exchange
the Global Capital Securities for New Capital Securities in certificated form
and to distribute such New Capital Securities to its Participants.
The information in this section concerning DTC and its book-entry
system has been obtained from sources that the Trust and the Corporation believe
to be reliable, but neither the Trust nor the Corporation takes responsibility
for the accuracy thereof.
A Global Capital Security is exchangeable for New Capital Securities in
registered certificated form if (i) DTC (x) notifies the Trust that it is
unwilling or unable to continue as Depositary for the Global Capital Security
and the Trust thereupon fails to appoint a successor Depositary within 90-days
or (y) has ceased to be a clearing agency registered under the Exchange Act,
(ii) the Corporation in its sole discretion elects to cause the issuance of the
New Capital Securities in certificated form or (iii) there shall have occurred
and be continuing an Event of Default or any event which after notice or lapse
of time or both would be an Event of Default under the Declaration. In addition,
beneficial interests in a Global Capital Security may be exchanged for
certificated New Capital Securities upon request but only upon at least 20-days'
prior written notice given to the Property Trustee by or on behalf of DTC in
accordance with customary procedures. In all cases, certificated New Capital
Securities delivered in exchange for any Global Capital Security or beneficial
interests therein will be registered in the names, and issued in any approved
denominations, requested by or on behalf of the Depositary (in accordance with
its customary procedures), unless the Property Trustee determines otherwise in
compliance with applicable law.
Payment and Paying Agency. Payments in respect of the New Capital
Securities held in global form shall be made to the Depositary, which shall
credit the relevant accounts at the Depositary on the applicable Distribution
Dates or in respect of the New Capital Securities that are not held by the
Depositary, such payments shall be made by check mailed to the address of the
holder entitled thereto as such address shall appear on the register. The paying
agent (the "Paying Agent") shall initially be the Property Trustee and any
co-paying agent chosen by the Property Trustee and acceptable to the
Administrative Trustees and the Corporation. The Paying Agent shall be permitted
to resign as Paying Agent upon 30 days' written notice to the Property Trustee
and the Corporation. In the event that the Property Trustee shall no longer be
the Paying Agent, the Administrative Trustees shall appoint a successor (which
shall be a bank or trust company acceptable to the Administrative Trustees and
the Corporation) to act as Paying Agent.
Registrar and Transfer Agent. The Property Trustee will act as
registrar and transfer agent for the New Capital Securities.
Registration of transfers of the New Capital Securities will be
effected without charge by or on behalf of the Trust, but upon payment of any
tax or other governmental charges that may be imposed in connection with any
transfer or exchange. The Trust will not be required to register or cause to be
registered the transfer of the New Capital Securities (i) during the period
starting 15 days before the mailing of a notice of redemption and ending on the
date of such mailing and (ii) after they have been called for redemption.
Information Concerning the Property Trustee. The Property Trustee is
under no obligation to exercise any of the powers vested in it by the
Declaration at the request of any holder of Trust Securities unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby. If no Event of Default has occurred and is continuing
and the Property Trustee is required to decide between alternative causes of
action, construe ambiguous provisions in the Declaration or is unsure of the
application of any provision of the Declaration, and the matter is not one on
which holders of the Capital Securities or the Common Securities are entitled
under the Declaration to vote, then the Property Trustee shall take such action
as is directed by the Corporation and if not so directed, shall take such action
as it deems advisable and in the best interests of the holders of the Trust
Securities and will have no liability except for its own bad faith, negligence
or willful misconduct.
Miscellaneous. The Administrative Trustees are authorized and directed
to conduct the affairs of and to operate the Trust in such a way that the Trust
will not be deemed to be an "investment company" required to be registered under
the Investment Company Act or classified as an association taxable as a
corporation for United States federal income tax purposes and so that the Junior
Subordinated Debentures will be treated as indebtedness of the Corporation for
United States federal income tax purposes. In this connection, the Corporation
and the Administrative Trustees are authorized to take any action, not
inconsistent with applicable law, the certificate of trust of the Trust or the
Declaration, that the Corporation and the Administrative Trustees determine in
their discretion to be necessary or desirable for such purposes, as long as such
action does not materially adversely affect the interests of the holders of the
Trust Securities.
Holders of the Trust Securities have no preemptive or similar rights.
The Trust may not borrow money, issue debt, execute mortgages or pledge
any of its assets.
Governing Law
The declaration will be governed by and construed in accordance with
the laws of the State of Delaware.
Description of New Junior Subordinated Debentures
The Old Junior Subordinated Debentures were issued and the New Junior
Subordinated Debentures will be issued as a separate series under the Indenture.
The Indenture has been qualified under the Trust Indenture Act. This summary of
certain terms and provisions of the Junior Subordinated Debentures and the
Indenture does not purport to be complete, and where reference is made to
particular provisions of the Indenture, such provisions, including the
definitions of certain terms, some of which are not otherwise defined herein,
are qualified in their entirety by reference to all of the provisions of the
Indenture and those terms made a part of the Indenture by the Trust Indenture
Act.
General. Concurrently with the issuance of the Capital Securities, the
Trust invested the proceeds thereof, together with the consideration paid by the
Corporation for the Common Securities, in Old Junior Subordinated Debentures
issued by the Corporation. Pursuant to the Exchange Offer, the Corporation will
exchange the Old Junior Subordinated Debentures, in an amount corresponding to
the Old Capital Securities accepted for exchange, for a like aggregate principal
amount of the New Junior Subordinated Debentures as soon as practicable after
the date hereof.
The New Junior Subordinated Debentures will bear interest at the annual
rate of 7.65% of the principal amount thereof, payable semi-annually in arrears
on June 15 and December 15 of each year (each, an "Interest Payment Date"),
commencing December 15, 1998, to the person in whose name each Junior
Subordinated Debenture is registered, subject to certain exceptions, at the
close of business on the first day of the month in which the relevant payment
date falls. It is anticipated that, until the liquidation, if any, of the Trust,
each New Junior Subordinated Debenture will be held in the name of the Property
Trustee in trust for the benefit of the holders of the Trust Securities. The
amount of interest payable for any period will be computed on the basis of a
360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the New Junior Subordinated Debentures is not a Business
Day, then payment of the interest payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay), in each case with the same force and effect as if
made such date. Accrued interest that is not paid on the applicable Interest
Payment Date will bear additional interest on the amount thereof (to the extent
permitted by law) at the rate per annum of 7.65% thereof, compounded
semi-annually. The term "interest", as used herein, shall include semi-annual
interest payments, interest on semi-annual interest payments not paid on the
applicable Interest Payment Date and Additional Sums (as defined below), as
applicable.
The New Junior Subordinated Debentures will mature on June 15, 2028
(the "Stated Maturity Date"). The New Junior Subordinated Debentures will rank
pari passu with the Old Junior Subordinated Debentures and with all Other
Debentures and will be unsecured and subordinate and junior in right of payment
to the extent and in the manner set forth in the Indenture to all Senior
Indebtedness of the Corporation. See "--Subordination." The Corporation is a
non-operating holding company and almost all of the operating assets of the
Corporation and its consolidated subsidiaries are owned by such subsidiaries.
The Corporation relies primarily on dividends from such subsidiaries to meet its
obligations. The Corporation is a legal entity separate and distinct from its
banking and non-banking affiliates. The principal sources of the Corporation's
income are dividends, interest and fees from its banking and non-banking
affiliates. The bank subsidiaries of the Corporation (the "Banks") are subject
to certain restrictions imposed by federal law on any extensions of credit to,
and certain other transactions with, the Corporation and certain other
affiliates, and on investments in stock or other securities thereof. Such
restrictions prevent the Corporation and such other affiliates from borrowing
from the Banks unless the loans are secured by various types of collateral.
Further, such secured loans, other transactions and investments by any of the
Banks are generally limited in amount as to the Corporation and as to each of
such other affiliates to 10% of such Bank's capital and surplus and as to the
Corporation and all of such other affiliates to an aggregate of 20% of such
Bank's capital and surplus. In addition, payment of dividends to the Corporation
by the Banks is subject to ongoing review by banking regulators and is subject
to various statutory limitations and in certain circumstances requires approval
by banking regulatory authorities. Because the Corporation is a holding company,
the right of the Corporation to participate in any distribution of assets of any
subsidiary upon such subsidiary's liquidation or reorganization or otherwise, is
subject to the prior claims of creditors of the subsidiary, except to the extent
the Corporation may itself be recognized as a creditor of that subsidiary.
Accordingly, the New Junior Subordinated Debentures will be effectively
subordinated to all existing and future liabilities of the Corporation's
subsidiaries, and holders of New Junior Subordinated Debentures should look only
to the assets of the Corporation for payments on the New Junior Subordinated
Debentures. The Indenture does not limit the incurrence or issuance of other
secured or unsecured debt of the Corporation, including Senior Indebtedness. See
"--Subordination."
Form, Registration and Transfer. If the Junior Subordinated Debentures
are distributed to holders of the Trust Securities, such Junior Subordinated
Debentures may be represented by one or more global certificates registered in
the name of Cede & Co. as the nominee of DTC. The depositary arrangements for
such Junior Subordinated Debentures are expected to be substantially similar to
those in effect for the New Capital Securities. For a description of DTC and the
terms of the depositary arrangements relating to payments, transfers, voting
rights, redemptions and other notices and other matters, see "--Description of
New Capital Securities--Form, Denomination, Book-Entry Procedures and Transfer."
Payment and Paying Agents. Payment of principal of, and premium, if
any, and any interest on New Junior Subordinated Debentures will be made at the
office of the Debenture Trustee in The City of New York or at the office of such
Paying Agent or Paying Agents as the Corporation may designate from time to
time, except that at the option of the Corporation payment of any interest may
be made except in the case of New Junior Subordinated Debentures in global form,
(i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the register for New Junior Subordinated Debentures or
(ii) by transfer to an account maintained by the Person entitled thereto as
specified in such register, provided that proper transfer instructions have been
received by the relevant Record Date. The Corporation has initially designated
Trust Company as co-Paying Agent. Payment of any interest on any New Junior
Subordinated Debenture will be made to the Person in whose name such New Junior
Subordinated Debenture is registered at the close of business on the Record Date
for such interest, except in the case of defaulted interest. The Corporation may
at any time designate additional Paying Agents or rescind the designation of any
Paying Agent; however the Corporation will at all times be required to maintain
a Paying Agent in each Place of Payment for the New Junior Subordinated
Debentures.
Any moneys deposited with the Debenture Trustee or any Paying Agent, or
then held by the Corporation in trust, for the payment of the principal of and
premium, if any or interest on any New Junior Subordinated Debenture and
remaining unclaimed for two years after such principal and premium, if any or
interest has become due and payable shall, at the written request of the
Corporation, be repaid to the Corporation and the holder of such New Junior
Subordinated Debenture shall thereafter look, as a general unsecured creditor,
only to the Corporation for payment thereof.
Option to Extend Interest Payment Date. So long as no Debenture Event
of Default has occurred and is continuing, the Corporation will have the right
under the Indenture at any time during the term of the New Junior Subordinated
Debentures to defer the payment of interest at any time or from time to time for
a period not exceeding 10 consecutive semi-annual periods with respect to each
Extension Period, provided that no Extension Period may extend beyond the Stated
Maturity Date of the Junior Subordinated Debentures or end on a date other than
a Distribution Date. At the end of such Extension Period, the Corporation must
pay all interest then accrued and unpaid (together with interest thereon at the
annual rate of 7.65%, compounded semi-annually, to the extent permitted by
applicable law). During an Extension Period, interest will continue to accrue
and holders of New Junior Subordinated Debentures (and holders of the Trust
Securities while Trust Securities are outstanding) will be required to accrue
interest income for United States federal income tax purposes prior to the
receipt of cash attributable to such income. See "Certain Federal Income Tax
Considerations--Interest Income and Original Issue Discount."
During any such Extension Period, the Corporation may not (i) declare
or pay any dividends or distributions on, or redeem, purchase, acquire, or make
a liquidation payment with respect to, any of the Corporation's capital stock
(which includes common and preferred stock) or (ii) make any payment of
principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities of the Corporation (including any Other Debentures) that rank
pari passu with or junior in right of payment to the New Junior Subordinated
Debentures or (iii) make any guarantee payments with respect to any guarantee by
the Corporation of the debt securities of any subsidiary of the Corporation
(including any Other Guarantees) if such guarantee ranks pari passu with or
junior in right of payment to the New Junior Subordinated Debentures (other than
(a) dividends or distributions in shares of or options, warrants or rights to
subscribe for or purchase shares of, common stock of the Corporation, (b) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Guarantee, (d) as a result of a reclassification of the
Corporation's capital stock or the exchange or conversion of one class or series
of the Corporation's capital stock for another class or series of the
Corporation's capital stock, (e) the purchase of fractional interests in shares
of the Corporation's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
and (f) repurchases, redemptions or other acquisitions of common stock related
to the issuance of common stock or rights under any of the Corporation's
employment contracts, benefit plans or other similar arrangements with or for
the benefit of its directors, officers or employees or any of the Corporation's
dividend reinvestment plans).
Prior to the termination of any such Extension Period, the Corporation
may further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods or to
extend beyond the Stated Maturity Date. Upon the termination of any such
Extension Period and the payment of all amounts then due on any Interest Payment
Date, the Corporation may elect to begin a new Extension Period, subject to the
above requirements. No interest shall be due and payable during an Extension
Period, except at the end thereof. The Corporation must give the Property
Trustee, the Administrative Trustees and the Debenture Trustee notice of its
election of any Extension Period (or an extension thereof) at least five
Business Days prior to the earlier of (i) the date the Distributions on the
Trust Securities would have been payable except for the election to begin or
extend such Extension Period or (ii) the date the Administrative Trustees are
required to give notice to any securities exchange or to holders of New Capital
Securities of the record date or the date such Distributions are payable, but in
any event not less than five Business Days prior to such record date. The
Debenture Trustee shall give notice of the Corporation's election to begin or
extend a new Extension Period to the holders of the Capital Securities. There is
no limitation on the number of times that the Corporation may elect to begin an
Extension Period.
<PAGE>
Optional Prepayment. The New Junior Subordinated Debentures will be
prepayable, in whole or in part, at the option of the Corporation on or after
the Initial Optional Prepayment Date, subject to the Corporation having received
prior approval of the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve, at a prepayment price (the
"Optional Prepayment Price") equal to the percentage of the outstanding
principal amount of the New Junior Subordinated Debentures specified below,
plus, in each case, accrued interest thereon to the date of prepayment if
redeemed during the 12-month period beginning June 15 of the years indicated
below:
Year Percentage
2008 103.83
2009 103.44
2010 103.06
2011 102.67
2012 102.30
2013 101.91
2014 101.53
2015 101.15
2016 100.77
2017 100.38
2018 and thereafter 100.00
The Federal Reserve's risk-based capital guidelines, which are subject
to change, currently provide that redemption of permanent equity or other
capital instruments before the stated maturity could have a significant impact
on a bank holding company's overall capital structure and consequently states
that an organization considering such a redemption should consult with the
Federal Reserve before redeeming any equity or capital instrument prior to
maturity if such redemption could have a material effect on the level or
composition of the organization's capital base (the guidelines state that such
consultation would not ordinarily be necessary if the equity or capital
instrument were redeemed with the proceeds of, or replaced by, a like amount of
a similar or higher quality capital instrument and the Federal Reserve considers
the organization's capital position to be fully adequate).
The redemption of the Junior Subordinated Debentures by the Corporation
prior to their Stated Maturity Date would constitute the redemption of capital
instruments under the Federal Reserve's current risk-based capital guidelines
and may be subject to the prior approval of the Federal Reserve.
Special Event Prepayment. If a Special Event shall occur and be
continuing, the Corporation may, at any time prior to the Initial Optional
Prepayment Date, within 90 days after the occurrence of the Special Event, at
its option and subject to receipt of prior approval of the Federal Reserve if
then required under applicable capital guidelines or policies of the Federal
Reserve, prepay the New Junior Subordinated Debentures in whole (but not in
part) at a prepayment price (the "Special Event Prepayment Price") equal to the
greater of (i) 100% of the principal amount of such Junior Subordinated
Debentures or (ii) the sum, as determined by a Quotation Agent, of the present
values of the principal amount and premium payable as part of the Optional
Prepayment Price with respect to an optional redemption of such Junior
Subordinated Debentures on the Initial Optional Prepayment Date, together with
scheduled payments of interest from the prepayment date to the Initial Optional
Prepayment Date, in each case discounted to the prepayment date on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Adjusted Treasury Rate, plus, in either case, accrued and unpaid interest
thereon to the date of prepayment.
A "Special Event" means a Tax Event or a Regulatory Capital Event (as
defined below), as the case may be.
A "Tax Event" means the receipt by the Corporation and the Trust of an
opinion of a nationally recognized tax counsel experienced in such matters to
the effect that, as a result of any amendment to, or change (including any
announced prospective change) in, the laws or any regulations thereunder of the
United States or any political subdivision or taxing authority thereof or
therein, or as a result of any official administrative pronouncement or judicial
decision interpreting or applying such laws or regulations, which amendment or
change is effective or such pronouncement or decision is announced on or after
the Issue Date, there is more than an insubstantial risk that (i) the Trust is,
or will be within 90 days of the date of such opinion, subject to United States
federal income tax with respect to income received or accrued on the Junior
Subordinated Debentures, (ii) interest payable by the Corporation on the Junior
Subordinated Debentures is not, or within 90 days of the date of such opinion
will not be, deductible by the Corporation, in whole or in part, for United
States federal income tax purposes, or (iii) the Trust is, or will be within 90
days of the date of such opinion, subject to more than a de minimis amount of
other taxes, duties or other governmental charges. According to a petition
recently filed in the United States Tax Court by a corporation unrelated to the
Corporation and the Trust, the Internal Revenue Service has challenged the
deductibility for United States federal income tax purposes of interest payments
on certain purported debt instruments held by entities intended to be taxable as
partnerships for United States federal income tax purposes, where those
entities, in turn, issued preferred securities to investors. Although the
overall structure of the financing arrangement involved in that case is somewhat
similar to the financing structure for the Junior Subordinated Debentures and
the Trust, the relevant facts in that case appear to differ significantly from
those relating to the Junior Subordinated Debentures and the Trust. Whether the
Internal Revenue Service would attempt to challenge the deductibility of
interest on the Junior Subordinated Debentures cannot be predicted. The
Corporation, based on the advice of counsel, intends to take the position that
interest payments on the Junior Subordinated Debentures will be deductible by
the Corporation for United States federal income tax purposes. See "Certain
Federal Income Tax Considerations -- Classification of the Junior Subordinated
Debentures." Adverse developments relating to the deductibility of interest,
whether arising in connection with the case currently pending in the United
States Tax Court or not, could give rise to a Tax Event.
A "Regulatory Capital Event" means that the Corporation shall have
received an opinion of independent bank regulatory counsel experienced in such
matters to the effect that, as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any rules, guidelines or policies of the
Federal Reserve or (b) any official administrative pronouncement or judicial
decision interpreting or applying such laws or regulations, which amendment or
change is effective or such pronouncement or decision is announced on or after
the Issue Date, the Capital Securities do not constitute, or within 90 days of
the date of such opinion, will not constitute, Tier 1 Capital (or its then
equivalent); provided, however, that a Regulatory Capital Event shall not occur
by reason of the use of the proceeds of the Junior Subordinated Debentures by
the Corporation contemplated herein.
"Adjusted Treasury Rate" means, with respect to any prepayment date,
the rate per annum equal to (i) the yield, under the heading which represents
the average for the immediately prior week, appearing in the most recently
published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Federal Reserve and which
established yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity date corresponding to the Initial Optional Prepayment Date (if no
maturity date is within three months before or after the Initial Optional
Prepayment Date, yields for the two published maturities most closely
corresponding to the Initial Optional Prepayment Date shall be interpolated and
the Adjusted Treasury Rate shall be interpolated or extrapolated from such
yields on a straight-line basis, rounding to the nearest month) or (ii) if such
release (or any successor release) is not published during the week preceding
the calculation date or does not contain such yields, the rate per annum equal
to the semi-annual equivalent yield to maturity of the Comparable Treasury
Issue, assuming a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such prepayment date plus, in either case (A) 1.50% if such prepayment date
occurs on or prior to June 19, 1999 and (B) 1.00% in all other cases.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity date corresponding to the
Initial Optional Prepayment Date that would be utilized at the time of selection
and in accordance with customary financial practice, in pricing new issues of
corporate debt securities with a maturity date corresponding to the Initial
Optional Prepayment Date. If no United States Treasury security has a maturity
date which is within three months before or after the Initial Optional
Prepayment Date, the two most closely corresponding United States Treasury
securities shall be used as the Comparable Treasury Issue, and the calculation
of the Adjusted Treasury Rate pursuant to clause (ii) of the definition thereof
shall be interpolated or extrapolated on a straight-line basis, rounding to the
nearest month.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Corporation. "Reference Treasury Dealer" means: any U.S. Government securities
dealer in New York City (a "Primary Treasury Dealer") selected by the
Corporation.
"Comparable Treasury Price" means, with respect to any prepayment date,
(i) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such prepayment date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the average
of five Reference Treasury Dealer Quotations for such prepayment date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Debenture Trustee obtains fewer than three such Reference Treasury
Dealer Quotations, the average of all such Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any prepayment date, the average, as determined by
the Debenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Debenture Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such prepayment date.
"Additional Sums" means such additional amounts as may be necessary in
order that the amount of Distributions then due and payable by the Trust on the
outstanding Capital Securities and Common Securities shall not be reduced as a
result of any additional taxes, duties or other governmental charges to which
the Trust has become subject as a result of a Tax Event.
Notice of any prepayment will be mailed at least 30 days but not more
than 60 days before the redemption date to each holder of New Junior
Subordinated Debentures to be prepaid at its registered address. Unless the
Corporation defaults in payment of the prepayment price, on and after the
prepayment date interest ceases to accrue on such New Junior Subordinated
Debentures called for prepayment.
If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Corporation will pay as
additional amounts on the New Junior Subordinated Debentures the Additional
Sums.
Certain Covenants of the Corporation. The Corporation will also
covenant that it will not, (i) declare or pay any dividends or distributions on,
or redeem, purchase, acquire, or make a liquidation payment with respect to, any
of the Corporation's capital stock (which includes common and preferred stock)
or (ii) make any payment of principal, interest or premium, if any, on or repay
or repurchase or redeem any debt securities of the Corporation (including Other
Debentures) that rank pari passu with or junior in right of payment to the New
Junior Subordinated Debentures or (iii) make any guarantee payments with respect
to any guarantee by the Corporation of any securities of any subsidiary of the
Corporation (including Other Guarantees) if such guarantee ranks pari passu or
junior in right of payment to the New Junior Subordinated Debentures (other than
(a) dividends or distributions in shares of, or options, warrants or rights to
subscribe for or purchase shares of, common stock of the Corporation, (b) any
declaration of a dividend in connection with the implementation of a
stockholder's rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Guarantee, (d) as a direct result of, and only to the extent
required in order to avoid the issuance of fractional shares of capital stock
following a reclassification of the Corporation's capital stock or the exchange
or conversion of one class or series of the Corporation's capital stock for
another class or series of the Corporation's capital stock, (e) the purchase of
fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, and (f) purchases of common stock related to the
issuance of common stock or rights under any of the Corporation's benefit plans
for its directors, officers or employees or any of the Corporation's dividend
reinvestment plans) if at such time (1) a Debenture Event of Default occurs, (2)
there shall have occurred any event of which the Corporation has actual
knowledge that (a) with the giving of notice or the lapse of time, or both,
would be a Debenture Event of Default and (b) in respect of which the
Corporation shall not have taken reasonable steps to cure, (3) the Corporation
shall be in default with respect to its payment of any obligations under the
Guarantee or (4) the Corporation shall have given notice of its election of an
Extension Period, or any extension thereof, as provided in the Indenture and
shall not have rescinded such notice, and such Extension Period, or any
extension thereof shall have commenced.
The Corporation will also covenant (i) to maintain 100 percent
ownership of the Common Securities; provided, however, that any permitted
successor of the Corporation under the Indenture may succeed to the
Corporation's ownership of the Common Securities, (ii) to use its reasonable
efforts to cause the Trust (a) to remain a statutory business trust, except in
connection with the distribution of Junior Subordinated Debentures to the
holders of Trust Securities in liquidation of the Trust, the redemption of all
of the Trust Securities of the Trust, or certain mergers, consolidations or
amalgamations, each as permitted by the Declaration of the Trust, and (b) to
continue not to be classified as an association taxable as a corporation or a
partnership for United States federal income tax purposes and (iii) to use its
reasonable efforts to cause each holder of Trust Securities to be treated as
owning an undivided beneficial interest in the Junior Subordinated Debentures.
Modification of Indenture. From time to time the Corporation and the
Debenture Trustee may, without the consent of the holders of the outstanding
Junior Subordinated Debentures, amend, waive or supplement the Indenture for
specified purposes, including, among other things, curing ambiguities, defects
or inconsistencies or enabling the Corporation and the Trust to conduct an
Exchange Offer as contemplated by the Registration Rights Agreement (provided
that any such action does not materially adversely affect the interest of the
holders of the Junior Subordinated Debentures) and qualifying, or maintaining
the qualification of, the Indenture under the Trust Indenture Act. The Indenture
contains provisions permitting the Corporation and the Debenture Trustee, with
the consent of the holders of a majority in principal amount of Junior
Subordinated Debentures, to modify the Indenture in a manner affecting the
rights of the holders of the Junior Subordinated Debentures; provided, that no
such modification may, without the consent of the holders of each outstanding
Junior Subordinated Debenture so affected, (i) change the Stated Maturity, or
reduce the principal amount of the Junior Subordinated Debentures or reduce the
rate or extend the time of payment of interest thereon or (ii) reduce the
percentage of principal amount of Junior Subordinated Debentures, the holders of
which are required to consent to any such modification of the Indenture.
Furthermore, so long as any of the Capital Securities remain outstanding, no
such modification may be made that adversely affects the holders of such Capital
Securities in any material respect, and no termination of the Junior
Subordinated Indenture may occur, and no waiver of any Debenture Event of
Default or compliance with any covenant under the Junior Subordinated Indenture
may be effective, without the prior consent of the holders of at least a
majority may be effective without the prior consent of the holders of at least a
majority of the aggregate Liquidation Amount of the outstanding Capital
Securities unless and until the principal of (and premium, if any, on) the
Junior Subordinated Debentures and all accrued and unpaid interest thereon shall
have been paid in full and certain other conditions are satisfied.
Debenture Events of Default. The Indenture provides that any one or
more of the following described events with respect to the New Junior
Subordinated Debentures constitutes a "Debenture Event of Default" (whatever the
reason for such Debenture Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) failure for 30-days to pay any interest on the New Junior
Subordinated Debentures or any Other Debentures when due (subject to the
deferral of any due date in the case of an Extension Period); or
(ii) failure to pay any principal or premium, if any, on the New Junior
Subordinated Debentures or any Other Debentures when due whether at maturity,
upon redemption, by declaration of acceleration of maturity or otherwise; or
(iii) failure to observe or perform in any material respect certain
other covenants contained in the Indenture for 90-days after written notice to
the Corporation from the Debenture Trustee or the holders of at least 25% in
aggregate outstanding principal amount of Junior Subordinated Debentures; or
(iv) certain events in bankruptcy, insolvency or reorganization of the
Corporation.
The holders of a majority in aggregate outstanding principal amount of
the Junior Subordinated Debentures have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Debenture
Trustee. The Debenture Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of the Junior Subordinated Debentures may declare
the principal due and payable immediately upon a Debenture Event of Default. The
holders of a majority in aggregate outstanding principal amount of the Junior
Subordinated Debentures may annul such declaration and waive the default if the
default (other than the non-payment of the principal of the Junior Subordinated
Debentures which has become due solely by such acceleration) has been cured and
a sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee.
The holders of a majority in aggregate outstanding principal amount of
the Junior Subordinated Debentures affected thereby may, on behalf of the
holders of all the Junior Subordinated Debentures, waive any past default,
except a default in the payment of principal or premium, if any, or interest
(unless such default has been cured and a sum sufficient to pay all matured
installments of interest and premium, if any, and principal due otherwise than
by acceleration has been deposited with the Debenture Trustee) or a default in
respect of a covenant or provision which under the Indenture cannot be modified
or amended without the consent of the holder of each outstanding Junior
Subordinated Debenture.
The Indenture requires the annual filing by the Corporation with the
Debenture Trustee of a certificate as to the absence of certain defaults under
the Indenture.
The Indenture provides that the Debenture Trustee may withhold notice
of a Debenture Event of Default from the holders of the Junior Subordinated
Debentures (except a Debenture Event of Default in payment of principal of, or
of interest or premium on, the Junior Subordinated Debentures) if the Debenture
Trustee considers it in the interest of such holders to do so.
Enforcement of Certain Rights by Holders of New Capital Securities. If
a Debenture Event of Default shall have occurred and be continuing and shall be
attributable to the failure of the Corporation to pay interest or premium, if
any, on or principal of the New Junior Subordinated Debentures on the due date,
a holder of New Capital Securities may institute a Direct Action. The
Corporation may not amend the Indenture to remove the foregoing right to bring a
Direct Action without the prior written consent of the holders of all of the New
Capital Securities. Notwithstanding any payments made to a holder of New Capital
Securities by the Corporation in connection with a Direct Action, the
Corporation shall remain obligated to pay the principal of or premium, if any,
or interest on the New Junior Subordinated Debentures, and the Corporation shall
be subrogated to the rights of the holder of such New Capital Securities with
respect to payments on the New Capital Securities to the extent of any payments
made by the Corporation to such holder in any Direct Action.
The holders of the New Capital Securities will not be able to exercise
directly any remedies, other than those set forth in the preceding paragraph,
available to the holders of the New Junior Subordinated Debentures unless there
shall have been an Event of Default under the Declaration. See "--Description of
New Capital Securities--Events of Default; Notice."
Consolidation, Merger, Sale of Assets and Other Transactions. The
Indenture provides that the Corporation shall not consolidate with or merge into
any other Person or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any Person, and no Person shall
consolidate with or merge into the Corporation or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to the
Corporation, unless: (i) in case the Corporation consolidates with or merges
into another Person or conveys or transfers its properties and assets
substantially as an entirety to any Person, the successor Person is organized
under the laws of the United States or any State or the District of Columbia,
and such successor Person expressly assumes the Corporation's obligations on the
Junior Subordinated Debentures; (ii) immediately after giving effect thereto, no
Debenture Event of Default, and no event which, after notice or lapse of time or
both, would become a Debenture Event of Default, shall have occurred and be
continuing; and (iii) certain other conditions as prescribed in the Indenture
are met.
The general provisions of the Indenture do not afford holders of the
Junior Subordinated Debentures protection in the event of a highly leveraged or
other transaction involving the Corporation that may adversely affect holders of
the New Junior Subordinated Debentures.
Satisfaction and Discharge. The Indenture provides that when, among
other things, all New Junior Subordinated Debentures not previously delivered to
the Debenture Trustee for cancellation (i) have become due and payable or (ii)
will become due and payable at maturity within one year, and the Corporation
deposits or causes to be deposited with the Debenture Trustee funds, in trust,
for the purpose and in an amount sufficient to pay and discharge the entire
indebtedness on the New Junior Subordinated Debentures not previously delivered
to the Debenture Trustee for cancellation, for the principal (and premium, if
any) and interest to the date of the deposit or to the Stated Maturity Date, as
the case may be, then the Indenture will cease to be of further effect (except
as to the Corporation's obligations to pay all other sums due pursuant to the
Indenture and to provide the officers' certificates and opinions of counsel
described therein), and the Corporation will be deemed to have satisfied and
discharged the Indenture.
Subordination. In the Indenture, the Corporation has covenanted and
agreed that any Junior Subordinated Debentures will be subordinate and junior in
right of payment to all Senior Indebtedness to the extent provided in the
Indenture. Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Corporation, the holders of Senior Indebtedness
will first be entitled to receive payment in full of all Allocable Amounts (as
defined below) in respect of such Senior Indebtedness before the holders of
Junior Subordinated Debentures will be entitled to receive or retain any payment
in respect thereof.
In the event of the acceleration of the maturity of Junior Subordinated
Debentures, the holders of all Senior Indebtedness outstanding at the time of
such acceleration will first be entitled to receive payment in full of all
Allocable Amounts in respect of such Senior Indebtedness before the holders of
Junior Subordinated Debentures will be entitled to receive or retain any payment
in respect of the Junior Subordinated Debentures.
In the event that any payment or Distribution shall be received by any
holder of the Junior Subordinated Debentures in contravention of the terms of
the Indenture, such payment or Distribution shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representative or representatives or a trustee
or trustees under any indenture pursuant to which any of such Senior
Indebtedness may have been issued, as their indenture pursuant to which any of
such Senior Indebtedness may have been issued, as their respective interests may
appear, but only to the extent that the holders of the Senior Indebtedness (or
their representative or representatives or a trustee) notify the Debenture
Trustee in writing, within 90 days of such payment of the amounts then due and
owing on such Senior Indebtedness and only the amounts specified in such notice
to the Debenture Trustee shall be paid to the holders of such Senior
Indebtedness.
No payments on account of principal (or premium, if any) or interest,
if any, in respect of the Junior Subordinated Debentures may be made if there
shall have occurred and be continuing a default in any payment with respect to
Senior Indebtedness, or an event of default with respect to any Senior
Indebtedness resulting in the acceleration of the maturity thereof, or if any
judicial proceeding shall be pending with respect to any such default.
"Allocable Amounts," when used with respect to any Senior Indebtedness,
means all amounts due or to become due on such Senior Indebtedness less, if
applicable, any amount which would have been paid to, and retained by, the
holders of such Senior Indebtedness (whether as a result of the receipt of
payments by the holders of such Senior Indebtedness from the Corporation or any
other obligor thereon or from any holders of, or trustee in respect of, other
indebtedness that is subordinate and junior in right of payment to such Senior
Indebtedness pursuant to any provision of such indebtedness for the payment over
of amounts received on account of such indebtedness to the holders of such
Senior Indebtedness or otherwise) but for the fact that such Senior Indebtedness
is subordinate or junior in right of payment to (or subject to a requirement
that amounts received on such Senior Indebtedness be paid over to obligees on)
trade accounts payable or accrued liabilities arising in the ordinary course of
business.
"Indebtedness" shall mean (i) any obligation of, or any obligation
guaranteed by, the Corporation for the repayment of borrowed money, whether or
not evidenced by bonds, debentures, notes or other written instruments and any
deferred obligation for the payment of the purchase price of property or assets
acquired other than in the ordinary course of business and (ii) all indebtedness
of the Corporation for claims in respect of derivative products such as interest
and foreign exchange rate contracts, commodity contracts and similar
arrangements, whether outstanding on the date of execution of the Indenture or
thereafter created, assumed or incurred. For purposes of this definition "claim"
shall have the meaning assigned in Section 101(5) of the Bankruptcy Code of
1978, as amended and in effect on the date of the execution of the Indenture.
"Indebtedness Ranking on a Parity with the Junior Subordinated
Debentures" shall mean Indebtedness, whether outstanding on the date of
execution of the Indenture or thereafter created, assumed or incurred, which
specifically by its terms ranks equally with and not prior to the Junior
Subordinated Debentures in the right of payment upon the happening of the
dissolution or winding-up or liquidation or reorganization of the Corporation.
The securing of any Indebtedness, otherwise constituting Indebtedness Ranking on
a Parity with the Junior Subordinated Debentures, shall not be deemed to prevent
such Indebtedness from constituting Indebtedness Ranking on a Parity with the
Junior Subordinated Debentures.
"Indebtedness Ranking Junior to the Junior Subordinated Debentures"
shall mean any Indebtedness, whether outstanding on the date of execution of the
Indenture or thereafter created, assumed or incurred, which specifically by its
terms ranks junior to and not equally with or prior to the Junior Subordinated
Debentures (and any other Indebtedness Ranking on a Parity with the Junior
Subordinated Debentures) in right of payment upon the happening of the
dissolution or winding-up or liquidation or reorganization of the Corporation.
The securing of any Indebtedness, otherwise constituting Indebtedness Ranking
Junior to the Junior Subordinated Debentures, shall not be deemed to prevent
such Indebtedness from constituting Indebtedness Ranking Junior to the Junior
Subordinated Debentures.
"Senior Indebtedness" shall mean all Indebtedness, whether outstanding
on the date of execution of the Indenture or thereafter created, assumed or
incurred, except Indebtedness Ranking on a Parity with the Junior Subordinated
Debentures or Indebtedness Ranking Junior to the Junior Subordinated Debentures,
and any deferrals, renewals or extensions of such Senior Indebtedness.
The Corporation is a non-operating holding company and almost all of
the operating assets of the Corporation are owned by the Corporation's
subsidiaries. The Corporation relies primarily on dividends from such
subsidiaries to meet its obligations for payment of principal and interest on
its outstanding debt obligations and corporate expenses. The Corporation is a
legal entity separate and distinct from its banking and non-banking affiliates.
The principal sources of the Corporation's income are dividends, interest and
fees from its banking and non-banking affiliates. The Banks are subject to
certain restrictions imposed by federal law on any extensions of credit to, and
certain other transactions with, the Corporation and certain other affiliates,
and on investments in stock or other securities thereof. Such restrictions
prevent the Corporation and such other affiliates from borrowing from the Banks
unless the loans are secured by various types of collateral. Further, such
secured loans, other transactions and investments by any of the Banks are
generally limited in amount as to the Corporation and as to each of such other
affiliates to 10% of such Bank's capital and surplus and as to the Corporation
and all of such other affiliates to an aggregate of 20% of such Bank's capital
and surplus. In addition, payment of dividends to the Corporation by the
subsidiary banks is subject to ongoing review by banking regulators and is
subject to various statutory limitations and in certain circumstances requires
approval by banking regulatory authorities.
Accordingly, the Junior Subordinated Debentures will be effectively
subordinated to all existing and future liabilities of the Corporation's
subsidiaries. Holders of Junior Subordinated Debentures should look only to the
assets of the Corporation for payments of interest and principal and premium, if
any.
The Indenture places no limitation on the amount of additional Senior
Indebtedness that may be incurred by the Corporation. The Corporation expects
from time to time to incur additional indebtedness constituting Senior
Indebtedness.
Governing Law. The Indenture and the New Junior Subordinated Debentures
will be governed by and construed in accordance with the laws of the State of
New York.
Information Concerning the Debenture Trustee. Following the Exchange
Offer and the qualification of the Indenture under the Trust Indenture Act, the
Debenture Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of New Junior Subordinated Debentures, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. The Debenture Trustee is not required to expend
or risk its own funds or otherwise incur personal financial liability in the
performance of its duties if the Debenture Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
Description of New Guarantee
The Old Guarantee was executed and delivered by the Corporation
concurrently with the issuance by the Trust of the Old Capital Securities for
the benefit of the holders from time to time of the Old Capital Securities. As
soon as practicable after the date hereof, the Old Guarantee will be exchanged
by the Corporation for the New Guarantee for the benefit of the holders from
time to time of the New Capital Securities. The Guarantee Agreement has been
qualified under the Trust Indenture Act. This summary of certain provisions of
the Guarantee Agreement does not purport to be complete and is subject to, and
qualified in its entirety by reference to, all of the provisions of the
Guarantee Agreement, including the definitions therein of certain terms, and the
Trust Indenture Act. The Guarantee Trustee will hold the Guarantee for the
benefit of the holders of the Capital Securities.
General. The Corporation will irrevocably agree to pay in full on a
subordinated basis, to the extent set forth herein, the Guarantee Payments (as
defined below) to the holders of the New Capital Securities, as and when due,
regardless of any defense, right of set-off or counterclaim that the Trust may
have or assert other than the defense of payment. The following payments with
respect to the New Capital Securities, to the extent not paid by or on behalf of
the Trust (the "Guarantee Payments"), will be subject to the New Guarantee: (i)
any accumulated and unpaid Distributions required to be paid on New Capital
Securities, to the extent that the Trust has funds on hand legally available
therefor at such time, (ii) the applicable Redemption Price with respect to New
Capital Securities called for redemption, to the extent that the Trust has funds
on hand legally available therefor at such time, or (iii) upon a voluntary or
involuntary termination and liquidation of the Trust (unless the Junior
Subordinated Debentures are distributed to holders of the Capital Securities),
the lesser of (a) the Liquidation Distribution and (b) the amount of assets of
the Trust remaining available for distribution to holders of New Capital
Securities. The Corporation's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Corporation to the
holders of the New Capital Securities or by causing the Trust to pay such
amounts to such holders.
The New Guarantee will rank subordinate and junior in right of payment
to all Senior Indebtedness to the extent provided therein. See "--Status of New
Guarantee". Because the Corporation is a holding company, the right of the
Corporation to participate in any distribution of assets of any subsidiary upon
such subsidiary's liquidation or reorganization or otherwise, is subject to the
prior claims of creditors of that subsidiary, except to the extent the
Corporation may itself be recognized as a creditor of that subsidiary.
Accordingly, the Corporation's obligations under the New Guarantee will be
effectively subordinated to all existing and future liabilities of the
Corporation's subsidiaries, and claimants should look only to the assets of the
Corporation for payments thereunder. See "--Description of New Junior
Subordinated Debentures--General." The New Guarantee does not limit the
incurrence or issuance of other secured or unsecured debt of the Corporation,
including Senior Indebtedness, whether under the Indenture, any other indenture
that the Corporation may enter into in the future or otherwise.
The Corporation will, through the New Guarantee, the Declaration, the
New Junior Subordinated Debentures and the Indenture, taken together, fully,
irrevocably and unconditionally guarantee all of the Trust's obligations under
the New Capital Securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the New Capital Securities. See "Relationship Among
the New Capital Securities, the New Junior Subordinated Debentures and the New
Guarantee."
Status of New Guarantee. The New Guarantee will constitute an unsecured
obligation of the Corporation and will rank subordinate and junior in right of
payment to all Senior Indebtedness in the same manner as New Junior Subordinated
Debentures, except in the case of a bankruptcy or insolvency proceeding in
respect of the Corporation, in which case the New Guarantee will rank
subordinate and junior in right of payment to all liabilities (other than Other
Guarantees) of the Corporation.
The New Guarantee will rank pari passu with the Old Guarantee and with
all Other Guarantees issued by the Corporation. The New Guarantee will
constitute a guarantee of payment and not of collection (i.e., the guaranteed
party may institute a legal proceeding directly against the Corporation to
enforce its rights under the New Guarantee without first instituting a legal
proceeding against any other person or entity). The New Guarantee will be held
for the benefit of the holders of the New Capital Securities. The New Guarantee
will not be discharged except by payment of the Guarantee Payments in full to
the extent not paid by the Trust or upon distribution to the holders of the New
Capital Securities of the New Junior Subordinated Debentures. The Guarantee does
not place a limitation on the amount of additional Senior Indebtedness that may
be incurred by the Corporation. The Corporation expects from time to time to
incur additional indebtedness constituting Senior Indebtedness.
Amendments and Assignment. Except with respect to any changes that do
not materially adversely affect the rights of holders of the New Capital
Securities (in which case no vote will be required), the New Guarantee may not
be amended without the prior approval of the holders of a majority of the
Liquidation Amount of such outstanding New Capital Securities. The manner of
obtaining any such approval will be as set forth under "--Description of New
Capital Securities--Voting Rights; Amendment of the Declaration." All guarantees
and agreements contained in the Guarantee Agreement shall bind the successors,
assigns, receivers, trustees and representatives of the Corporation and shall
inure to the benefit of the holders of the New Capital Securities then
outstanding.
Events of Default. An event of default under the New Guarantee will
occur upon the failure of the Corporation to perform any of its payment or other
obligations thereunder. The holders of a majority in Liquidation Amount of the
New Capital Securities will have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Guarantee Trustee
in respect of the New Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the New Guarantee.
Any holder of the New Capital Securities may institute a legal
proceeding directly against the Corporation to enforce its rights under the New
Guarantee without first instituting a legal proceeding against the Trust, the
Guarantee Trustee or any other person or entity.
The Corporation, as guarantor, will be required to file annually with
the New Guarantee Trustee a certificate as to whether or not the Corporation is
in compliance with all the conditions and covenants applicable to it under the
New Guarantee.
Termination of the New Guarantee. The New Guarantee will terminate and
be of no further force and effect upon full payment of the applicable Redemption
Price of the New Capital Securities, upon full payment of the Liquidation Amount
payable upon liquidation of the Trust or upon distribution of New Junior
Subordinated Debentures to the holders of the New Capital Securities. The New
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any holder of the New Capital Securities must restore payment
of any sums paid under the New Capital Securities or the New Guarantee.
Governing Law. The New Guarantee will be governed by and construed in
accordance with the laws of the State of New York.
Information Concerning the Guarantee Trustee. The Guarantee Trustee,
other than during the occurrence and continuance of a default by the Corporation
in performance of the New Guarantee, will undertake to perform only such duties
as are specifically set forth in the Guarantee and, after default with respect
to the New Guarantee, must exercise the same degree of care and skill as a
prudent person would exercise or use in the conduct of his or her own affairs.
Subject to this provision, the Guarantee Trustee will be under no obligation to
exercise any of the powers vested in it by the New Guarantee at the request of
any holder of the New Capital Securities unless it is offered reasonable
indemnity against the costs, expenses and liabilities that might be incurred
thereby.
DESCRIPTION OF OLD SECURITIES
The Old Securities have not been registered under the Securities Act,
are subject to certain restrictions on transfer and are entitled to certain
rights under the applicable Registration Rights Agreement (which rights will
terminate upon consummation of the Exchange Offer, except under limited
circumstances). The New Capital Securities will not contain certain restrictions
on transfer applicable to Old Capital Securities, and the New Capital Securities
will not provide for any increase in the Distribution rate thereon. The New
Junior Subordinated Debentures will not provide for any increase in the interest
rate thereon. The Old Securities provide that, in the event that a registration
statement relating to the Exchange Offer has not been filed by March 31, 1999
and been declared effective by April 30, 1999, then interest will accrue (in
addition to the stated interest rate on the Old Junior Subordinated Debentures)
at the rate of 0.25% per annum on the principal amount of the Old Junior
Subordinated Debentures and Distributions will accrue (in addition to the stated
Distribution rate on the Old Capital Securities) at the rate of 0.25% per annum
on the Liquidation Amount of the Old Capital Securities, for the period from the
occurrence of such event until such time as such required Exchange Offer is
consummated or any required Shelf Registration Statement is effective. The New
Securities are not, and upon consummation of the Exchange Offer the Old
Securities will not be, entitled to any such additional interest or
Distributions. Accordingly, holders of Old Capital Securities should review the
information set forth under "Risk Factors--Certain Consequences of a Failure to
Exchange Old Capital Securities" and "Description of New Securities."
RELATIONSHIP AMONG THE NEW CAPITAL SECURITIES, THE
NEW JUNIOR SUBORDINATED DEBENTURES AND THE NEW GUARANTEE
Full and Unconditional Guarantee
Payments of Distributions and other amounts due on the New Capital
Securities (to the extent the Trust has funds on hand legally available for the
payment of such Distributions) will be irrevocably guaranteed by the Corporation
as and to the extent set forth under "Description of New Securities--Description
of New Guarantee." Taken together, the Corporation's obligations under the New
Junior Subordinated Debentures, the Indenture, the Declaration and the New
Guarantee will provide, in the aggregate, a full, irrevocable and unconditional
guarantee of payments of Distributions and other amounts due on the New Capital
Securities. No single document standing alone or operating in conjunction with
fewer than all of the other documents constitutes such guarantee. It is only the
combined operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Trust's obligations under the New
Capital Securities. If and to the extent that the Corporation does not make the
required payments on the New Junior Subordinated Debentures, the Trust will not
have sufficient funds to make the related payments, including Distributions, on
the New Capital Securities. The New Guarantee will not cover any such payment
when the Trust does not have sufficient funds on hand legally available
therefor. In such event, the remedy of a holder of New Capital Securities is to
institute a Direct Action. The obligations of the Corporation under the New
Guarantee will be subordinate and junior in right of payment to all Senior
Indebtedness.
Sufficiency of Payments
As long as payments of interest and other payments are made when due on
the New Junior Subordinated Debentures, such payments will be sufficient to
cover Distributions and other payments due on the New Capital Securities,
primarily because: (i) the aggregate principal amount or Prepayment Price of the
New Junior Subordinated Debentures will be equal to the sum of the Liquidation
Amount or Redemption Price, as applicable, of the New Capital Securities and
Common Securities, (ii) the interest rate and interest and other payment dates
on the New Junior Subordinated Debentures will match the Distribution rate and
Distribution and other payment dates for the Trust Securities; (iii) the
Corporation shall pay for all and any costs, expenses and liabilities of the
Trust except the Trust's obligations to holders of Trust Securities under such
Trust Securities; and (iv) the Declaration provides that the Trust is not
authorized to engage in any activity that is not consistent with the limited
purposes thereof.
Enforcement Rights of Holders of New Capital Securities
A holder of any New Capital Security may institute a legal proceeding
directly against the Corporation to enforce its rights under the New Guarantee
without first instituting a legal proceeding against the Guarantee Trustee, the
Trust or any other person or entity.
A default or event of default under any Senior Indebtedness would not
constitute a default or Event of Default under the Declaration. However, in the
event of payment defaults under, or acceleration of, Senior Indebtedness, the
subordination provisions of the Indenture provide that no payments may be made
in respect of the New Junior Subordinated Debentures until such Senior
Indebtedness has been paid in full or any payment default thereunder has been
cured or waived. Failure to make required payments on New Junior Subordinated
Debentures would constitute an Event of Default under the Declaration.
Limited Purpose of the Trust
The Trust exists for the sole purpose of issuing and selling the Trust
Securities, using the proceeds from the sale of the Trust Securities to acquire
the Junior Subordinated Debentures and engaging in only those other activities
necessary, advisable or incidental thereto. The New Capital Securities will
represent preferred beneficial interests in the Trust. A principal difference
between the rights of a holder of a New Capital Security and a holder of a New
Junior Subordinated Debenture is that a holder of a New Junior Subordinated
Debenture will be entitled to receive from the Corporation the principal amount
of (and premium, if any) and interest on New Junior Subordinated Debentures
held, while a holder of New Capital Securities is entitled to receive
Distributions from the Trust (or, in certain circumstances, from the Corporation
under the New Guarantee) if and to the extent the Trust has funds on hand
legally available for the payment of such Distributions.
Rights Upon Termination
Unless the Junior Subordinated Debentures are distributed to holders of
the Trust Securities, upon any voluntary or involuntary termination and
liquidation of the Trust, the holders of the Trust Securities will be entitled
to receive, out of assets held by the Trust, the Liquidation Distribution in
cash. See "Description of New Securities--Description of New Capital
Securities--Liquidation of the Trust and Distribution of New Junior Subordinated
Debentures." Upon any voluntary or involuntary liquidation or bankruptcy of the
Corporation, the Property Trustee, as holder of the New Junior Subordinated
Debentures, would be a subordinated creditor of the Corporation, subordinated in
right of payment to all Senior Indebtedness as set forth in the Indenture, but
entitled to receive payment in full of principal (and premium, if any) and
interest, before any stockholders of the Corporation receive payments or
distributions. Since the Corporation will be the guarantor under the New
Guarantee and will agree to pay for all costs, expenses and liabilities of the
Trust (other than the Trust's obligations to the holders of its Trust
Securities), the positions of a holder of New Capital Securities and a holder of
New Junior Subordinated Debentures relative to stockholders of the Corporation
in the event of liquidation or bankruptcy of the Corporation are expected to be
substantially the same.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
General
In the opinion of Pitney, Hardin, Kipp & Szuch, counsel to the
Corporation and the Trust ("Tax Counsel") delivered in connection with the
issuance of the Old Capital Securities, the following is a summary of the
material United States federal income tax consequences of the purchase,
ownership, disposition and the exchange contemplated by this Prospectus of
Capital Securities held as capital assets by a holder. This summary only
addresses the tax consequences to a holder that acquired the Old Capital
Securities upon initial issuance at their original offering price. It does not
deal with special classes of holders such as banks, thrifts, real estate
investment trusts, regulated investment companies, insurance companies, dealers
in securities or currencies, tax-exempt investors, or persons that will hold the
Capital Securities as a position in a "straddle," as part of a "synthetic
security" or "hedge," as part of a "conversion transaction" or other integrated
investment, or as other than a capital asset. This summary also does not address
the tax consequences to persons that have a functional currency other than the
U.S. dollar (except with respect to the discussion under the caption "United
States Alien Holders") or the tax consequences to shareholders, partners or
beneficiaries of a holder of Capital Securities. Further, it does not include
any description of any alternative minimum tax consequences or the tax laws of
any state or local government or of any foreign government that may be
applicable to the Capital Securities. This summary is based on the Internal
Revenue Code of 1986, as amended (the "Code"), Treasury regulations thereunder,
the administrative and judicial interpretations thereof, as of the date hereof,
all of which are subject to change, possibly on a retroactive basis. Tax
Counsel's opinion represents only its best legal judgment based on current
authorities and is not binding on the Internal Revenue Service ("IRS") or the
courts. See " -- Possible Tax Law Changes."
Exchange of Capital Securities
The exchange of Old Capital Securities for New Capital Securities
should not be a taxable event to holders for United States federal income tax
purposes. The exchange of Old Capital Securities for New Capital Securities
pursuant to the Exchange Offer should not be treated as an "exchange" for United
States federal income tax purposes because the New Capital Securities should not
be considered to differ materially in kind or extent from the Old Capital
Securities and because the exchange will occur by operation of the terms of the
Old Capital Securities. Accordingly, no gain or loss will be recognized by a
holder, the New Capital Securities should have the same issue price as the Old
Capital Securities, and a holder should have the same adjusted tax basis and
holding period in the New Capital Securities as the holder had in the Old
Capital Securities immediately before the exchange.
Classification of the Junior Subordinated Debentures
In connection with the issuance of the Old Junior Subordinated
Debentures, Tax Counsel rendered its opinion generally to the effect that, under
then current law and assuming full compliance with the terms of the Indenture
(and certain other documents), and based on certain facts and assumptions
contained in such opinion, the Old Junior Subordinated Debentures will be
classified for United States federal income tax purposes as indebtedness of the
Corporation. An opinion of Tax Counsel, however, is not binding on the IRS or
the courts. Prospective investors should note that no rulings have been or are
expected to be sought from the IRS with respect to any of these issues and no
assurance can be given that the IRS will not take contrary positions. Moreover,
no assurance can be given that any of the opinions expressed herein will not be
challenged by the IRS or, if challenged, that such a challenge would not be
successful. According to a petition recently filed in the United States Tax
Court by a corporation unrelated to the Corporation and the Trust, the IRS has
challenged the status as indebtedness, for United States federal income tax
purposes, of certain purported debt instruments held by entities intended to be
taxable as partnerships for United States federal income tax purposes, where
those entities, in turn, issued preferred securities to investors. The overall
structure of the financing arrangements involved in that case is similar to,
although distinguishable from, the financing structure for the Junior
Subordinated Debentures and the Trust. The remainder of this summary assumes
that the Junior Subordinated Debentures will be classified as indebtedness for
United States federal income tax purposes.
Classification of the Trust
In connection with the issuance of the Old Capital Securities, Tax
Counsel has rendered its opinion generally to the effect that, under then
current law and assuming full compliance with the terms of the Declaration and
based on certain facts and assumptions contained in such opinion, the Trust will
be classified for United States federal income tax purposes as a grantor trust
and not as an association taxable as a corporation. Accordingly, for United
States federal income tax purposes, each holder of Capital Securities generally
will be considered the owner of an undivided interest in the Junior Subordinated
Debentures, and each holder will be required to include in its gross income any
interest (or OID accrued) with respect to its allocable share of those Junior
Subordinated Debentures.
Interest Income and Original Issue Discount
Under Treasury regulations applicable to debt instruments issued on or
after August 13, 1996 (the "Regulations"), a "remote" contingency that stated
interest will not be timely paid will be ignored in determining whether a debt
instrument is issued with OID. The Corporation believes that the likelihood of
its exercising its option to defer payments of interest is "remote" since, among
other things, exercising that option would prevent the Corporation from
declaring dividends on any class of its equity securities. Accordingly, the
Corporation intends to take the position, based on the advice of Tax Counsel,
that the Junior Subordinated Debentures will not be considered to be issued with
OID and, accordingly, stated interest on the Junior Subordinated Debentures
generally will be taxable to a holder as ordinary income at the time it is paid
or accrued in accordance with such holder's method of accounting.
Under the Regulations, if the Corporation were to exercise its option
to defer payments of interest, the Junior Subordinated Debentures would at that
time be treated as issued with OID, and all stated interest on the Junior
Subordinated Debentures would thereafter be treated as OID as long as the Junior
Subordinated Debentures remain outstanding. In such event, all of a holder's
taxable interest income with respect to the Junior Subordinated Debentures would
thereafter be accounted for on an economic accrual basis regardless of such
holder's method of tax accounting, and actual distributions of stated interest
would not be reported as taxable income. Consequently, a holder of Capital
Securities would be required to include in gross income OID even though the
Corporation would not make actual cash payments during an Extension Period.
Moreover, under the Regulations, if the option to defer the payment of interest
were determined not to be "remote", the Junior Subordinated Debentures would be
treated as having been originally issued with OID. In such event, all of a
holder's taxable interest income with respect to the Junior Subordinated
Debentures would be accounted for on an economic accrual basis regardless of
such holder's method of tax accounting, and actual distributions of stated
interest would not be reported as taxable income.
The Regulations have not yet been addressed in any rulings or other
interpretations by the IRS, and it is possible that the IRS could take a
position contrary to Tax Counsel's interpretation herein.
Because income on the Capital Securities will constitute interest or
OID, corporate holders of the Capital Securities will not be entitled to a
dividends-received deduction with respect to any income recognized with respect
to the Capital Securities.
Distribution of Junior Subordinated Debentures or Cash Upon Liquidation of the
Trust
The Corporation will have the right at any time to liquidate the Trust
and, after satisfaction of liabilities to creditors of the Trust as required by
applicable law, cause the Junior Subordinated Debentures to be distributed to
the holders of the Trust Securities. Under current law, such a distribution, for
United States federal income tax purposes, would be treated as a nontaxable
event to each holder, and each holder would receive an aggregate tax basis in
the Junior Subordinated Debentures equal to such holder's aggregate tax basis in
its Capital Securities. A holder's holding period in the Junior Subordinated
Debentures so received in liquidation of the Trust would include the period
during which the Capital Securities were held by such holder. If, however, the
Trust were classified for United States federal income tax purposes as an
association taxable as a corporation at the time of its dissolution, the
distribution of the Junior Subordinated Debentures may constitute a taxable
event to holders of Capital Securities and a holder's holding period in Junior
Subordinated Debentures would begin on the date such Junior Subordinated
Debentures were received.
Under certain circumstances described herein (see "Description of New
Securities--Description of New Capital Securities"), the Junior Subordinated
Debentures may be redeemed for cash and the proceeds of such redemption
distributed to holders in redemption of their Capital Securities. Under current
law, such a redemption would, for United States federal income tax purposes,
constitute a taxable disposition of the redeemed Capital Securities, and a
holder could recognize gain or loss as if it sold such redeemed Capital
Securities for cash. See "--Sales of Capital Securities."
Sales of Capital Securities
A holder that sells Capital Securities (including a redemption of the
Capital Securities either on the Stated Maturity Date or upon an optional
redemption of the Junior Subordinated Debentures by the Corporation) will
recognize gain or loss equal to the difference between its adjusted tax basis in
the Capital Securities and the amount realized on the sale of such Capital
Securities (other than with respect to accrued and unpaid interest which has not
yet been included in income, which will be treated as ordinary income). A
holder's adjusted tax basis in the Capital Securities generally will be its
initial purchase price increased by OID (if any) previously includable in such
holder's gross income to the date of disposition and decreased by payments (if
any) received on the Capital Securities in respect of OID. Such gain or loss
generally will be a capital gain or loss. Such capital gains and losses should
qualify as long-term capital gains and losses if the Capital Securities are held
for more than 12 months and as short-term capital gains and losses if the
Capital Securities are held for 12 months or less. Under current law, an
individual's net capital gain (i.e., the amount by which the individual's net
long-term capital gains exceed his net short-term capital losses) is subject to
a maximum federal tax rate of 20%. Net short-term capital gains (i.e., the
amount by which the individual's net short-term capital gains exceeds his net
long-term capital losses) are taxed as ordinary income, which is subject to a
maximum federal tax rate of 39.6%. Capital losses are currently deductible
against capital gains without limitation and against ordinary income only to the
extent of $3,000 ($1,500 in the case of a married individual filing a separate
return) in any year. Capital losses which are not currently deductible by reason
of the foregoing limitation may be carried forward to future years.
Possible Tax Law Changes
In 1996 and 1997, the Clinton Administration proposed to amend the Code
to deny deductions of interest on instruments with features similar to those of
the Junior Subordinated Debentures when issued under arrangements similar to the
Trust. The proposals were not passed by Congress. The Clinton Administration did
not include any proposal of this type in its fiscal year 1999 budget proposal.
However, there can be no assurance that future legislative proposals, future
regulations or official administrative pronouncements or future judicial
decisions will not affect the ability of the Company to deduct interest on the
Junior Subordinated Debentures. Such a change would give rise to a Tax Event,
which may permit the Company, upon approval of the Federal Reserve if then
required under applicable guidelines or policies of the Federal Reserve, to
cause a redemption of the Capital Securities, as described more fully under
"Description of Capital Securities -- Redemption." In addition, according to a
petition recently filed in the United States Tax Court by a corporation
unrelated to the Corporation and the Trust, the Internal Revenue Service has
challenged the deductibility for United States federal income tax purposes of
interest payments on certain purported debt instruments held by entities
intended to be taxable as partnerships for United States federal income tax
purposes, where those entities, in turn, issued preferred securities to
investors. The overall structure of the financing arrangement involved in that
case is similar to, although distinguishable from, the financing structure for
the Junior Subordinated Debentures and the Trust. Whether the Internal Revenue
Service would attempt to challenge the deductibility of interest on the Junior
Subordinated Debentures cannot be predicted. The Corporation, based on the
advice of counsel, intends to take the position that interest payments on the
Junior Subordinated Debentures will be deductible by the Corporation for United
States federal income tax purposes. See "--Classification of the Junior
Subordinated Debentures." Adverse developments relating to the deductibility of
interest, whether arising in connection with the case currently pending in the
United States Tax Court or not, could give rise to a Tax Event.
United States Alien Holders
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is not a U.S. Holder
for United States federal income tax purposes, and a "U.S. Holder" is a holder
of Capital Securities who or which is a citizen or individual resident (or is
treated as a citizen or individual resident) of the United States for federal
income tax purposes, a corporation or partnership created or organized (or
treated as created or organized for federal income tax purposes) in or under the
laws of the United States or any political subdivision thereof, a trust if (i) a
court within the United States is able to exercise primary supervision over the
administration of the trust and (ii) one or more United States persons have the
authority to control all substantial decisions of the trust, or an estate, the
income of which is includable in its gross income for federal income tax
purposes without regard to its source.
Under present United States federal income tax laws: (i) payments by
the Trust or any of its paying agents to any holder of a Capital Security who or
which is a United States Alien Holder will not be subject to United States
federal withholding tax; provided that, (a) the beneficial owner of the Capital
Security does not actually or constructively own 10 percent or more of the total
combined voting power of all classes of stock of the Corporation entitled to
vote, (b) the beneficial owner of the Capital Security is not a controlled
foreign corporation that is related to the Corporation through stock ownership,
and (c) either (A) the beneficial owner of the Capital Security certifies to the
Trust or its agent, under penalties of perjury, that it is not a United States
holder and provides its name and address or (B) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "Financial
Institution"), and holds the Capital Security in such capacity, certifies to the
Trust or its agent, under penalties of perjury, that such statement has been
received from the beneficial owner by it or by a Financial Institution between
it and the beneficial owner and furnishes the Trust or its agent with a copy
thereof; and (ii) a United States Alien Holder of a Capital Security generally
will not be subject to United States federal withholding tax on any gain
realized upon the sale or other disposition of a Capital Security.
As discussed above, changes in legislation affecting the United States
federal income tax treatment of the Junior Subordinated Debentures are possible,
and could adversely affect the ability of the Corporation to deduct the interest
payable on the Junior Subordinated Debentures. Moreover, any such legislation
could adversely affect United States Alien Holders by characterizing income
derived from the Junior Subordinated Debentures as dividends, generally subject
to a 30% income tax (on a withholding basis) when paid to a United States Alien
Holder, rather than as interest which, as discussed above, is generally exempt
from income tax in the hands of a United States Alien Holder.
A United States Alien Holder that holds Capital Securities in
connection with the active conduct of a United States trade or business will be
subject to income tax on all income and gains recognized with respect to its
proportionate share of the Junior Subordinated Debentures.
Information Reporting to Holders
Generally, income on the Capital Securities will be reported to holders
on Forms 1099, which forms should be mailed to holders of Capital Securities by
January 31 following each calendar year.
Backup Withholding
Payments made on, and proceeds from the sale of, the Capital Securities
may be subject to a "backup" withholding tax of 31 percent unless the holder
complies with certain identification requirements. Any withheld amounts will be
allowed as a credit against the holder's United States federal income tax,
provided the required information is provided to the IRS.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS
INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A
HOLDER'S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH
RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF THE CAPITAL SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER
STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN
UNITED STATES FEDERAL OR OTHER TAX LAWS.
ERISA CONSIDERATIONS
The Corporation, the obligor with respect to the Junior Subordinated
Debentures held by the Trust, and its affiliates and the Property Trustee may be
considered a "party in interest" (within the meaning of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) or a "disqualified person"
(within the meaning of Section 4975 of the Code) with respect to many employee
benefit plans ("Plans") that are subject to ERISA. Any purchaser proposing to
acquire New Capital Securities with assets of any Plan should consult with its
counsel. The purchase and/or holding of New Capital Securities by a Plan that is
subject to the fiduciary responsibility provisions of ERISA or the prohibited
transaction provisions of Section 4975 of the Code (including individual
retirement arrangements and other plans described in Section 4975(e)(1) of the
Code) and with respect to which the Corporation, the Property Trustee or any
affiliate is a service provider (or otherwise is a party in interest or a
disqualified person) may constitute or result in a prohibited transaction under
ERISA or Section 4975 of the Code, unless such New Capital Securities are
acquired pursuant to and in accordance with an applicable exemption, such as
Prohibited Transaction Class Exemption ("PTCE") 84-14 (an exemption for certain
transactions determined by an independent qualified professional asset manager),
PTCE 91-38 (an exemption for certain transactions involving bank collective
investment funds), PTCE 90-1 (an exemption for certain transactions involving
insurance company pooled separate accounts), PTCE 95-60 (an exemption for
transactions involving certain insurance company general accounts) or PTCE 96-23
(an exception for certain transactions determined by an in-house asset manager).
In addition, a Plan fiduciary considering the purchase of New Capital Securities
should be aware that the assets of the Trust may be considered "plan assets" for
ERISA purposes. In such event, service providers with respect to the assets of
the Trust may become parties in interest or disqualified persons with respect to
investing Plans, and transactions between such persons and an Investing Plan
could be deemed to constitute a prohibited transaction under ERISA or the Code.
A Plan fiduciary should consider whether the purchase of New Capital
Securities could result in a delegation of fiduciary authority to the Property
Trustee, and, if so, whether such a delegation of authority is permissible under
the Plan's governing instrument or any investment management agreement with the
Plan. In making such determination, a Plan fiduciary should note that the
Property Trustee is a U.S. bank qualified to be an investment manager (within
the meaning of section 3(38) of ERISA) to which such delegation of authority
generally would be permissible under ERISA. Further, prior to an Event of
Default with respect to the Junior Subordinated Debentures, the Property Trustee
will have only limited custodial and ministerial authority with respect to Trust
assets.
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Capital Securities for its own
account in connection with the Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such New Capital
Securities. This Prospectus, as it may be amended or supplemented from time to
time, may be used by Participating Broker-Dealers during the period referred to
below in connection with resales of New Capital Securities received in exchange
for Old Capital Securities if such Old Capital Securities were acquired by such
Participating Broker-Dealers for their own accounts as a result of market-making
activities or other trading activities. The Corporation and the Trust have
agreed that this Prospectus, as it may be amended or supplemented from time to
time, may be used by a Participating Broker-Dealer in connection with resales of
such New Capital Securities for a period ending 90 days after the Expiration
Date (subject to extension under certain limited circumstances described herein)
or, if earlier, when all such New Capital Securities have been disposed of by
such Participating Broker-Dealer. However, a Participating Broker-Dealer who
intends to use this Prospectus in connection with the resale of New Capital
Securities received in exchange for Old Capital Securities pursuant to the
Exchange Offer must notify the Corporation or the Trust, or cause the
Corporation or the Trust to be notified, on or prior to the Expiration Date,
that it is a Participating Broker-Dealer. Such notice may be given in the space
provided for that purpose in the Letter of Transmittal or may be delivered to
the Exchange Agent at one of the addresses set forth herein under "The Exchange
Offer--Exchange Agent." See "The Exchange Offer Resales of New Capital
Securities."
The Corporation or the Trust will not receive any cash proceeds from
the issuance of the New Capital Securities offered hereby. New Capital
Securities received by broker-dealers for their own accounts in connection with
the Exchange Offer may be sold from time to time in one or more transactions in
the over-the-counter market, in negotiated transactions, through the writing of
options on the New Capital Securities or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or at negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such New Capital Securities.
Any broker-dealer that resells New Capital Securities that were
received by it for its own account in connection with the Exchange Offer and any
broker or dealer that participates in a distribution of such New Capital
Securities may be deemed to be an "underwriter" within the meaning of the
Securities Act, and any profit on any such resale of New Capital Securities and
any commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
VALIDITY OF NEW SECURITIES
The validity of the New Guarantee and the New Junior Subordinated
Debentures will be passed upon for the Corporation by Pitney, Hardin, Kipp &
Szuch, Morristown, New Jersey. Certain matters relating to United States federal
income tax considerations will be passed upon for the Corporation by Pitney,
Hardin, Kipp & Szuch, Morristown, New Jersey. Certain matters of Delaware law
relating to the validity of the New Capital Securities will be passed upon on
behalf of the Trust by Morris, Nichols, Arsht & Tunnell, special Delaware
counsel to the Corporation and the Trust.
EXPERTS
The consolidated financial statements of the Corporation as of December
31, 1997 and 1996 and for each of the years in the three year period ended
December 31, 1997, incorporated by reference herein, have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report with
respect thereto, and are incorporated by reference herein in reliance upon the
authority of said firm as experts in giving said reports.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
(i) Limitation of Liability of Directors and Officers. Section
14A:2-7(3) of the New Jersey Business Corporation Act permits a corporation to
provide in its Certificate of Incorporation that a director or officer shall not
be personally liable to the corporation or its shareholders for breach of any
duty owed to the corporation or its shareholders, except that such provision
shall not relieve a director or officer from liability for any breach of duty
based upon an act or omission (a) in breach of such persons' duty of loyalty to
the corporation or its shareholders, (b) not in good faith or involving a
knowing violation of law or (c) resulting in receipt by such person of any
improper personal benefit. HUBCO's Certificate of Incorporation includes
limitations on the liability of officers and directors to the full extent
permitted by New Jersey law.
(ii) Indemnification of Directors, Officers, Employees and Agents.
Under Article X of its Certificate of Incorporation, HUBCO must, to the full
extent permitted by law, indemnify its directors, officers, employees and
agents. Section 14A:3-5 of the New Jersey Business Corporation Act provides that
a corporation may indemnify its directors, officers, employees and agents
against judgments, fines, penalties, amounts paid in settlement, and expenses,
including attorney's fees, resulting from various types of legal actions or
proceedings if the actions of the party being indemnified meet the standards of
conduct specified therein. Determinations concerning whether or not the
applicable standard of conduct has been met can be made by (a) a disinterested
majority of the Board of Directors, (b) independent legal counsel, or (c) an
affirmative vote of a majority of shares held by the shareholders. No
indemnification is permitted to be made to or on behalf of a corporate director,
officer, employee or agent if a judgment or other final adjudication adverse to
such person establishes that his acts or omissions (a) were in breach of his
duty of loyalty in the corporation or its shareholders, (b) were not in good
faith or involved a knowing violation of law or (c) resulted in receipt by such
person of an improper personal benefit.
(iii) Insurance. HUBCO's directors and officers are insured against
losses arising from any claim against them such as wrongful acts or omissions,
subject to certain limitations.
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
EXHIBIT
4.1 Indenture of HUBCO, Inc. relating to the Junior Subordinated
Debentures*
4.2 Form of Certificate of New Junior Subordinated Debenture (included as
Exhibit A to Exhibit 4.1)*
4.3 Certificate of Trust of HUBCO Capital Trust II*
4.4 Declaration of Trust of HUBCO Capital Trust II*
4.5 Amended and Restated Declaration of Trust for HUBCO Capital Trust II*
4.6 Form of New Capital Security Certificate for HUBCO Capital Trust II
(included as Exhibit D to Exhibit 4.5)*
4.7 Form of New Guarantee of HUBCO, Inc. relating to the New Capital
Securities
4.8 Registration Rights Agreement
5.1 Opinion and consent of Pitney, Hardin, Kipp & Szuch to HUBCO, Inc. as
to legality of the New Junior Subordinated Debentures and the New
Guarantee to be issued by HUBCO, Inc.**
5.2 Opinion of Morris, Nichols, Arsht & Tunnell, special Delaware counsel,
as to legality of the New Capital Securities to be issued by HUBCO
Capital Trust II**
8 Opinion of Pitney, Hardin, Kipp & Szuch, special tax counsel, as to
certain federal income tax matters**
12.1 Computation of ratios of earnings to fixed charges
12.2 Computation of ratios of earnings to combined fixed charges and
preferred stock dividends
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of KPMG Peat Marwick LLP
23.4 Consent of Pitney, Hardin, Kipp & Szuch (included in Exhibit 5.1)**
23.5 Consent of Morris, Nichols, Arsht & Tunnell (Delaware) (included in
Exhibit 5.2)**
24 Power of Attorney of certain officers and directors of HUBCO, Inc.
25.1 Form T-1 Statement of Eligibility of The Bank of New York to act as
trustee under the Indenture
25.2 Form T-1 Statement of Eligibility of The Bank of New York to act as
trustee under the Amended and Restated Declaration of Trust of HUBCO
Capital Trust II
25.3 Form T-1 Statement of Eligibility of The Bank of New York under the New
Guarantee for the benefit of the holders of New Capital Securities of
HUBCO Capital Trust II
99.1 Form of Letter of Transmittal**
99.2 Form of Notice of Guaranteed Delivery**
99.3 Form of Exchange Agent Agreement**
- --------
* Incorporated by reference from HUBCO, Inc.'s Current Report on Form 8-K
filed June 25, 1998.
** To be filed by amendment.
<PAGE>
ITEM 22. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in 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.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that, in the opinion of the Securities and
Exchange Commission, such indemnification is against the public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(c) The undersigned Registrant hereby undertakes:
(1) To respond to requests for information that is
incorporated by reference into the prospectus pursuant to Items 4,
10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to end the incorporated documents by first class mail
or other equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the registration
statement through the date of responding to the request.
(2) Subject to appropriate interpretation, to supply by means
of a post-effective amendment all information concerning a transaction,
and the company being acquired involved therein, that was not the
subject of and included in the registration statement when it became
effective.
(3) That, for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(4) That, for the purpose of determining any liability under
the Securities Act of 1933, each post-effective amendment that contains
a form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
<PAGE>
SIGNATURES
Pursuant to the requirement of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the Undersigned, thereunto duly
authorized, in the Township of Mahwah, State of New Jersey, on
__________________________, 1998.
HUBCO, INC.
By: KENNETH T. NEILSO0
---------------------------------------------
Kenneth T. Neilson
Chairman of the Board, 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 and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
KENNETH T. NEILSON Chairman, President, Chief September 29, 1998
- ----------------------------------- Executive Officer and Director
(Kenneth T. Neilson) (Principal Executive Officer)
ROBERT J. BURKE Director September 29, 1998
- -----------------------------------
(Robert J. Burke)
DONALD P. CALCAGNINI Director September 29, 1998
- -----------------------------------
(Donald P. Calcagnini)
JOAN DAVID Director September 29, 1998
- -----------------------------------
(Joan David)
- ----------------------------------- Director _________________, 1998
(Thomas R. Farley)
BRYANT MALCOLM Director September 29, 1998
- -----------------------------------
(Bryant Malcolm)
W. PETER McBRIDE Director September 29, 1998
- -----------------------------------
(W. Peter McBride)
- ----------------------------------- Director _________________, 1998
(Charles F.X. Poggi)
DAVID A. ROSOW Director September 29, 1998
- -----------------------------------
(David A. Rosow)
- ----------------------------------- Director _________________, 1998
(James E. Schierloh)
- ----------------------------------- Director _________________, 1998
(John Tatigian)
- ----------------------------------- Director _________________, 1998
(Sister Grace Frances Strauber)
NOEL deCORDOVA Director September 28, 1998
- -----------------------------------
(Noel deCordova)
<PAGE>
JOSEPH B. TOCKARSHEWSKY Director September 28, 1998
- -----------------------------------
(Joseph B. Tockarshewsky)
- ----------------------------------- Director _________________, 1998
(William C. Myers)
JOSEPH HURLEY Executive Vice President
- ----------------------------------- and Chief Financial Officer September 29, 1998
(Joseph F. Hurley)
CHRIS A. WITKOWSKI Senior Vice President and Controller September 29, 1998
- -----------------------------------
(Chris A. Witkowski)
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, HUBCO
Capital Trust II certifies that it has reasonable grounds to believe that it
meets all the requirements for filing on Form S-4 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Township of Mahwah and State of New Jersey, on September
29, 1998.
HUBCO CAPITAL TRUST II
By: KENNETH T. NEILSON
--------------------------------
Kenneth T. Neilson,
as Administrative Trustee
By: D. LYNN VAN BORKULO-NUZZO
--------------------------------
D. Lynn Van Borkulo-Nuzzo,
as Administrative Trustee
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
4.1 Indenture of HUBCO, Inc. relating to the Junior Subordinated
Debentures*
4.2 Form of Certificate of New Junior Subordinated Debenture (included as
Exhibit A to Exhibit 4.1)*
4.3 Certificate of Trust of HUBCO Capital Trust II*
4.4 Declaration of Trust of HUBCO Capital Trust II*
4.5 Amended and Restated Declaration of Trust for HUBCO Capital Trust II*
4.6 Form of New Capital Security Certificate for HUBCO Capital Trust II
(included as Exhibit D to Exhibit 4.5)*
4.7 Form of New Guarantee of HUBCO, Inc. relating to the New Capital
Securities
4.8 Registration Rights Agreement
5.1 Opinion and consent of Pitney, Hardin, Kipp & Szuch to HUBCO, Inc. as
to legality of the New Junior Subordinated Debentures and the New
Guarantee to be issued by HUBCO, Inc.**
5.2 Opinion of Morris, Nichols, Arsht & Tunnell, special Delaware counsel,
as to legality of the New Capital Securities to be issued by HUBCO
Capital Trust II**
8 Opinion of Pitney, Hardin, Kipp & Szuch, special tax counsel, as to
certain federal income tax matters**
12.1 Computation of ratios of earnings to fixed charges
12.2 Computation of ratios of earnings to combined fixed charges and
preferred stock dividends
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of KPMG Peat Marwick LLP
23.4 Consent of Pitney, Hardin, Kipp & Szuch (included in Exhibit 5.1)**
23.5 Consent of Morris, Nichols, Arsht & Tunnell (Delaware) (included in
Exhibit 5.2)**
24 Power of Attorney of certain officers and directors of HUBCO, Inc.
25.1 Form T-1 Statement of Eligibility of The Bank of New York to act as
trustee under the Indenture
25.2 Form T-1 Statement of Eligibility of The Bank of New York to act as
trustee under the Amended and Restated Declaration of Trust of HUBCO
Capital Trust II
25.3 Form T-1 Statement of Eligibility of The Bank of New York under the New
Guarantee for the benefit of the holders of New Capital Securities of
HUBCO Capital Trust II
99.1 Form of Letter of Transmittal**
99.2 Form of Notice of Guaranteed Delivery**
99.3 Form of Exchange Agent Agreement**
- --------
* Incorporated by reference from HUBCO, Inc.'s Current Report on Form 8-K
filed June 25, 1998.
** To be filed by amendment.
====================================
SERIES B CAPITAL SECURITIES GUARANTEE AGREEMENT
HUBCO, Inc.
Dated as of ______, 1998
====================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INTERPRETATION
<S> <C> <C>
SECTION 1.1 Definitions and Interpretation..................................................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application................................................................4
SECTION 2.2 Lists of Holders of Securities..................................................................4
SECTION 2.3 Reports by the Capital Securities Guarantee Trustee.............................................4
SECTION 2.4 Periodic Reports to Capital Securities Guarantee Trustee........................................5
SECTION 2.5 Evidence of Compliance with Conditions Precedent................................................5
SECTION 2.6 Events of Default; Waiver.......................................................................5
SECTION 2.7 Events of Default; Notice.......................................................................5
SECTION 2.8 Conflicting Interests...........................................................................5
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Securities Guarantee Trustee...................................6
SECTION 3.2 Certain Rights of Capital Securities Guarantee Trustee..........................................7
SECTION 3.3. Not Responsible for Recitals or Issuance of Series B Capital Securities Guarantee...............8
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee; Eligibility...............................................9
SECTION 4.2 Appointment, Removal and Resignation of Capital Securities Guarantee Trustee....................9
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee .................................................................................10
SECTION 5.2 Waiver of Notice and Demand....................................................................10
SECTION 5.3 Obligations Not Affected.......................................................................10
SECTION 5.4 Rights of Holders..............................................................................11
SECTION 5.5 Guarantee of Payment...........................................................................11
SECTION 5.6 Subrogation .................................................................................11
SECTION 5.7 Independent Obligations........................................................................12
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.....................................................................12
SECTION 6.2 Ranking .................................................................................12
ARTICLE VII
TERMINATION
SECTION 7.1 Termination .................................................................................13
ARTICLE VIII
COMPENSATION AND EXPENSES OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
Compensation and Expenses of Capital Securities Guarantee Trustee................................................13
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Exculpation .................................................................................13
SECTION 9.2 Indemnification................................................................................14
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Successors and Assigns.........................................................................14
SECTION 10.2 Amendments .................................................................................14
SECTION 10.3 Notices .................................................................................14
SECTION 10.4 Benefit .................................................................................15
SECTION 10.5 Governing Law 15
</TABLE>
<PAGE>
SERIES B CAPITAL SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Series B Capital Securities
Guarantee"), dated as of ______, 1998, is executed and delivered by HUBCO, Inc.,
a New Jersey corporation (the "Guarantor"), and The Bank of New York, a New York
banking corporation, as trustee (the "Capital Securities Guarantee Trustee"),
for the benefit of the Holders (as defined herein) from time to time of the
Series B Capital Securities (as defined herein) of HUBCO Capital Trust II, a
Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of June 19, 1998, among the trustees of the
Issuer, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof 50,000 capital securities, having an aggregate
liquidation amount of $50,000,000, such capital securities being designated the
7.65% Series B Capital Securities (collectively the "Series B Capital
Securities") and, in connection with the consummation of the Exchange Offer (as
defined in the Declaration) has agreed to execute and deliver the Series B
Capital Securities Guarantee (as defined in the Declaration).
WHEREAS, as incentive for the Holders to exchange the Series A
Capital Securities (as defined in the Declaration for the Series B Capital
Securities), the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Series B Capital Securities Guarantee, to pay to
the Holders the Guarantee Payments (as defined below). The Guarantor agrees to
make certain other payments on the terms and conditions set forth herein.
WHEREAS, the Guarantor has executed and delivered a guarantee
agreement (the "Common Securities Guarantee") for the benefit of the holders of
the Common Securities (as defined herein), the terms of which provide that if an
Event of Default (as defined in the Declaration) has occurred and is continuing,
the rights of holders of the Common Securities to receive Guarantee Payments
under the Common Securities Guarantee are subordinated, to the extent and in the
manner set forth in the Common Securities Guarantee, to the rights of holders of
Series A Capital Securities and the Series B Capital Securities to receive
Guarantee Payments under the Series A Capital Securities Guarantee and this
Series B Capital Securities Guarantee, as the case may be.
NOW, THEREFORE, in consideration of the exchange of Series A
Capital Securities for Series B Capital Securities by each Holder, which
exchange the Guarantor hereby acknowledges shall benefit the Guarantor, the
Guarantor executes and delivers this Series B Capital Securities Guarantee for
the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Series B Capital Securities Guarantee, unless the
context otherwise requires:
(a) Capitalized terms used in this Series B Capital
Securities Guarantee but not defined in the preamble
above have the respective meanings assigned to them
in this Section 1.1;
(b) Terms defined in the Declaration as at the date of
execution of this Series B Capital Securities
Guarantee have the same meaning when used in this
Series B Capital Securities Guarantee unless
otherwise defined in this Series B Capital Securities
Guarantee;
(c) a term defined anywhere in this Series B Capital
Securities Guarantee has the same meaning throughout;
(d) all references to "the Series B Capital Securities
Guarantee" or "this Series B Capital Securities
Guarantee" are to this Series B Capital Securities
Guarantee as modified, supplemented or amended from
time to time;
(e) all references in this Series B Capital Securities
Guarantee to Articles and Sections are to Articles
and Sections of this Series B Capital Securities
Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the
same meaning when used in this Series B Capital
Securities Guarantee, unless otherwise defined in
this Series B Capital Securities Guarantee or unless
the context otherwise requires; and
(g) a reference to the singular includes the plural and
vice versa.
"Affiliate" has the same meaning as given to that term in Rule
405 under the Securities Act of 1933, as amended, or any successor rule
thereunder.
"Business Day" means any day other than a Saturday or a
Sunday, or a day on which banking institutions in The City of New York or
Mahwah, New Jersey are authorized or required by law or executive order to
close.
"Capital Securities Guarantee Trustee" means The Bank of New
York, a New York banking corporation, until a Successor Capital Securities
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Series B Capital Securities Guarantee and thereafter means
each such Successor Capital Securities Guarantee Trustee.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Capital
Securities Guarantee Trustee at which the corporate trust business of the
Capital Securities Guarantee Trustee shall, at any particular time, be
principally administered, which office at the date of execution of this
Agreement is located at 101 Barclay Street, Floor 21 West, New York, New York
10286.
"Covered Person" means any Holder or beneficial owner of
Series B Capital Securities.
"Debentures" means the series of subordinated debt securities
of the Guarantor designated the 7.65% Series B Junior Subordinated Deferrable
Interest Debentures due January 15, 2027 held by the Property Trustee (as
defined in the Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Series B Capital Securities
Guarantee.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Series B Capital
Securities, to the extent not paid or made by the Issuer: (i) any accumulated
and unpaid Distributions (as defined in the Declaration) that are required to be
paid on such Series B Capital Securities to the extent the Issuer has funds on
hand legally available therefor at such time, (ii) the redemption price,
including all accumulated and unpaid Distributions to the date of redemption
(the "Redemption Price") to the extent the Issuer has funds on hand legally
available therefor at such time, with respect to any Series B Capital Securities
called for redemption by the Issuer, and (iii) upon a voluntary or involuntary
termination and liquidation of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for Series B Capital
Securities as provided in the Declaration), the lesser of (a) the aggregate of
the liquidation amount and all accumulated and unpaid Distributions on the
Series B Capital Securities to the date of payment, to the extent the Issuer has
funds on hand legally available therefor, and (b) the amount of assets of the
Issuer remaining available for distribution to Holders in liquidation of the
Issuer. If an Event of Default has occurred and is continuing, no Guarantee
Payments under the Common Securities Guarantee with respect to the Common
Securities or any guarantee payment under any Other Common Securities Guarantees
shall be made until the Holders shall be paid in full the Guarantee Payments to
which they are entitled under this Series B Capital Securities Guarantee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Series B Capital Securities; provided, however,
that, in determining whether the holders of the requisite percentage of Series B
Capital Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Capital Securities Guarantee
Trustee, any Affiliate of the Capital Securities Guarantee Trustee, or any
officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Capital Securities
Guarantee Trustee.
"Indenture" means the Indenture dated as of June 19, 1998,
among the Guarantor (the "Debenture Issuer") and The Bank of New York, as
trustee, pursuant to which the Debentures are to be issued to the Property
Trustee of the Issuer.
"Majority in liquidation amount of the Series B Capital
Securities" means, except as provided by the Trust Indenture Act, a vote by
Holder(s) of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accumulated and unpaid Distributions to the date upon which the voting
percentages are determined) of all Series B Capital Securities.
"Officers' Certificate" means, with respect to any person, a
certificate signed by the Chairman, a Vice Chairman, the Chief Executive
Officer, the President, a Vice President, the Comptroller, the Secretary or an
Assistant Secretary, the Secretary or an Assistant Secretary of the Guarantor.
Any Officers' Certificate delivered with respect to compliance with a condition
or covenant provided for in this Series B Capital Securities Guarantee (other
than pursuant to Section 314(a)(4) of the Trust Indenture Act) shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(c) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Other Common Securities Guarantees" shall have the same
meaning as "Other Guarantees" in the Common Securities Guarantee.
"Other Debentures" means all junior subordinated debentures
issued by the Guarantor from time to time and sold to trusts to be established
by the Guarantor (if any), in each case similar to the Issuer.
"Other Guarantees" means all guarantees to be issued by the
Guarantor with respect to capital securities (if any) similar to the Series B
Capital Securities issued by other trusts to be established by the Guarantor (if
any), in each case similar to the Issuer.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Responsible Officer" means, with respect to the Capital
Securities Guarantee Trustee, any officer within the Corporate Trust Office of
the Capital Securities Guarantee Trustee, including any vice president, any
assistant vice president, any assistant secretary, any assistant treasurer, any
trust officer, any senior trust officer or other officer in the Corporate Trust
Office of the Capital Securities Guarantee Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Successor Capital Securities Guarantee Trustee" means a
successor Capital Securities Guarantee Trustee possessing the qualifications to
act as Capital Securities Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
"Trust Securities" means the Common Securities and the Series
A Capital Securities and Series B Capital Securities, collectively.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Series B Capital Securities Guarantee is
subject to the provisions of the Trust Indenture Act that are required to be
part of this Series B Capital Securities Guarantee and shall, to the extent
applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this
Series B Capital Securities Guarantee limits, qualifies or conflicts with the
duties imposed by Section 310 to 317, inclusive, of the Trust Indenture Act,
such imposed duties shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Capital
Securities Guarantee Trustee (unless the Capital Securities Guarantee Trustee is
otherwise the registrar of the Capital Securities) with a list, in such form as
the Capital Securities Guarantee Trustee may reasonably require, of the names
and addresses of the Holders ("List of Holders") as of such date, (i) within one
Business Day after [July 1] and [January 1] of each year, and (ii) at any other
time within 30 days of receipt by the Guarantor of a written request for a List
of Holders as of a date no more than 14 days before such List of Holders is
given to the Capital Securities Guarantee Trustee provided, that the Guarantor
shall not be obligated to provide such List of Holders at any time the List of
Holders does not differ from the most recent List of Holders given to the
Capital Securities Guarantee Trustee by the Guarantor. The Capital Securities
Guarantee Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Capital Securities Guarantee Trustee shall
comply with its obligations under Sections 311(a), 311(b) and Section 312(b) of
the Trust Indenture Act.
SECTION 2.3 Reports by the Capital Securities Guarantee Trustee
Within 60 days after [May 15] of each year,
commencing [May 15, 1997], the Capital Securities Guarantee Trustee shall
provide to the Holders such reports as are required by Section 313(a) of the
Trust Indenture Act, if any, in the form and in the manner provided by Section
313 of the Trust Indenture Act. The Capital Securities Guarantee Trustee shall
also comply with the other requirements of Section 313 of the Trust Indenture
Act.
SECTION 2.4 Periodic Reports to Capital Securities Guarantee Trustee
The Guarantor shall provide to the Capital Securities
Guarantee Trustee such documents, reports and information as required by Section
314 (if any) and the compliance certificate required by Section 314 of the Trust
Indenture Act in the form, in the manner and at the times required by Section
314 of the Trust Indenture Act provided that such compliance certificate shall
be delivered on or before 120 days after the end of each fiscal year of the
Guarantor. Delivery of such reports, information and documents to the Capital
Securities Guarantee Trustee is for informational purposes only and the Capital
Securities Guarantee Trustee's receipt of such shall not constitute constructive
notice of any information contained therein or determinable from information
contained therein, including the Guarantor's compliance with any of its
covenants hereunder (as to which the Capital Securities Guarantee Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Capital Securities
Guarantee Trustee such evidence of compliance with any conditions precedent, if
any, provided for in this Series B Capital Securities Guarantee that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in liquidation amount of
Series B Capital Securities may, by vote, on behalf of all the Holders, waive
any past Event of Default and its consequences. Upon such waiver, any such Event
of Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Series B Capital
Securities Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.7 Events of Default; Notice
(a) The Capital Securities Guarantee Trustee shall,
within 90 days after the occurrence of a default with respect to this Capital
Securities Guarantee, mail by first class postage prepaid, to all Holders,
notices of all defaults actually known to a Responsible Officer of the Capital
Securities Guarantee Trustee, unless such defaults have been cured before the
giving of such notice, provided, that, except in the case of default in the
payment of any Guarantee Payment, the Capital Securities Guarantee Trustee shall
be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors and/or
Responsible Officers of the Capital Securities Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
holders of the Series B Capital Securities.
(b) The Capital Securities Guarantee Trustee shall
not be deemed to have knowledge of any Event of Default unless the Capital
Securities Guarantee Trustee shall have received written notice from the
Guarantor, or a Responsible Officer of the Capital Securities Guarantee Trustee
charged with the administration of the Declaration shall have obtained actual
knowledge, of such Event of Default.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically
described in this Series B Capital Securities Guarantee for the purposes of
clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Securities
Guarantee Trustee
(a) This Series B Capital Securities Guarantee shall
be held by the Capital Securities Guarantee Trustee for the benefit of the
Holders, and the Capital Securities Guarantee Trustee shall not transfer this
Series B Capital Securities Guarantee to any Person except a Holder exercising
his or her rights pursuant to Section 5.4(b) or to a Successor Capital
Securities Guarantee Trustee on acceptance by such Successor Capital Securities
Guarantee Trustee of its appointment to act as Successor Capital Securities
Guarantee Trustee. The right, title and interest of the Capital Securities
Guarantee Trustee shall automatically vest in any Successor Capital Securities
Guarantee Trustee, and such vesting and succession of title shall be effective
whether or not conveyancing documents have been executed and delivered pursuant
to the appointment of such Successor Capital Securities Guarantee Trustee.
(b) If an Event of Default actually known to a
Responsible Officer of the Capital Securities Guarantee Trustee has occurred and
is continuing, the Capital Securities Guarantee Trustee shall enforce this
Series B Capital Securities Guarantee for the benefit of the Holders of the
Series B Capital Securities.
(c) The Capital Securities Guarantee Trustee, before
the occurrence of any Event of Default and after the curing of all Events of
Default that may have occurred, shall undertake to perform only such duties as
are specifically set forth in this Series B Capital Securities Guarantee, and no
implied covenants shall be read into this Series B Capital Securities Guarantee
against the Capital Securities Guarantee Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6) and is
actually known to a Responsible Officer of the Capital Securities Guarantee
Trustee, the Capital Securities Guarantee Trustee shall exercise such of the
rights and powers vested in it by this Series B Capital Securities Guarantee,
and use the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(d) No provision of this Series B Capital Securities
Guarantee shall be construed to relieve the Capital Securities Guarantee Trustee
from liability for its own negligent action, its own negligent failure to act,
or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default
and after the curing or waiving of all such Events of Default that may
have occurred:
(A) the duties and obligations of the
Capital Securities Guarantee Trustee shall be determined
solely by the express provisions of this Series B Capital
Securities Guarantee, and the Capital Securities Guarantee
Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Series B Capital Securities Guarantee, and no implied
covenants or obligations shall be read into this Series B
Capital Securities Guarantee against the Capital Securities
Guarantee Trustee; and
(B) in the absence of bad faith on the part
of the Capital Securities Guarantee Trustee, the Capital
Securities Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished
to the Capital Securities Guarantee Trustee and conforming to
the requirements of this Series B Capital Securities
Guarantee; but in the case of any such certificates or
opinions that by any provision hereof are specifically
required to be furnished to the Capital Securities Guarantee
Trustee, the Capital Securities Guarantee Trustee shall be
under a duty to examine the same to determine whether or not
they conform to the requirements of this Series B Capital
Securities Guarantee;
(ii) the Capital Securities Guarantee Trustee shall
not be liable for any error of judgment made in good faith by a
Responsible Officer of the Capital Securities Guarantee Trustee, unless
it shall be proved that the Capital Securities Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment
was made;
(iii) the Capital Securities Guarantee Trustee shall not be
liable with respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of a
Majority in liquidation amount of the Series B Capital Securities
relating to the time, method and place of conducting any proceeding for
any remedy available to the Capital Securities Guarantee Trustee, or
exercising any trust or power conferred upon the Capital Securities
Guarantee Trustee under this Series B Capital Securities Guarantee; and
(iv) no provision of this Series B Capital Securities
Guarantee shall require the Capital Securities Guarantee Trustee to
expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of
any of its rights or powers, if the Capital Securities Guarantee
Trustee shall have reasonable grounds for believing that the repayment
of such funds or liability is not reasonably assured to it under the
terms of this Series B Capital Securities Guarantee or indemnity,
reasonably satisfactory to the Capital Securities Guarantee Trustee,
against such risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Capital Securities Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Capital Securities Guarantee Trustee may
conclusively rely, and shall be fully protected in acting or refraining from
acting, upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor
contemplated by this Series B Capital Securities Guarantee may be sufficiently
evidenced by an Officers' Certificate.
(iii) Whenever, in the administration of this
Series B Capital Securities Guarantee, the Capital Securities Guarantee Trustee
shall deem it desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Capital Securities Guarantee
Trustee (unless other evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and conclusively rely upon an
Officers' Certificate which, upon receipt of such request, shall be promptly
delivered by the Guarantor.
(iv) The Capital Securities Guarantee Trustee
shall have no duty to see to any recording, filing or registration of any
instrument (or any rerecording, refiling or registration thereof).
(v) The Capital Securities Guarantee Trustee may
consult with counsel of its selection, and the advice or opinion of such counsel
with respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates and may include any of its
employees. The Capital Securities Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Series B Capital
Securities Guarantee from any court of competent jurisdiction.
(vi) The Capital Securities Guarantee Trustee
shall be under no obligation to exercise any of the rights or powers vested in
it by this Series B Capital Securities Guarantee at the request or direction of
any Holder, unless such Holder shall have provided to the Capital Securities
Guarantee Trustee such security and indemnity, reasonably satisfactory to the
Capital Securities Guarantee Trustee, against the costs, expenses (including
attorneys' fees and expenses and the expenses of the Capital Securities
Guarantee Trustee's agents, nominees or custodians) and liabilities that might
be incurred by it in complying with such request or direction, including such
reasonable advances as may be requested by the Capital Securities Guarantee
Trustee; provided that, nothing contained in this Section 3.2(a)(vi) shall be
taken to relieve the Capital Securities Guarantee Trustee, upon the occurrence
of an Event of Default, of its obligation to exercise the rights and powers
vested in it by this Series B Capital Securities Guarantee.
(vii) The Capital Securities Guarantee Trustee
shall not be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Capital Securities Guarantee
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit.
(viii) The Capital Securities Guarantee Trustee
may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents, nominees, custodians or
attorneys, and the Capital Securities Guarantee Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder.
(ix) Any action taken by the Capital Securities
Guarantee Trustee or its agents hereunder shall bind the Holders, and the
signature of the Capital Securities Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such action. No third party shall be
required to inquire as to the authority of the Capital Securities Guarantee
Trustee to so act or as to its compliance with any of the terms and provisions
of this Series B Capital Securities Guarantee, both of which shall be
conclusively evidenced by the Capital Securities Guarantee Trustee's or its
agent's taking such action.
(x) Whenever in the administration of this
Series B Capital Securities Guarantee the Capital Securities Guarantee Trustee
shall deem it desirable to receive instructions with respect to enforcing any
remedy or right or taking any other action hereunder, the Capital Securities
Guarantee Trustee (i) may request instructions from the Holders of a Majority in
liquidation amount of the Series B Capital Securities, (ii) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in conclusively relying
on or acting in accordance with such instructions.
(xi) The Capital Securities Guarantee Trustee
shall not be liable for any action taken, suffered, or omitted to be taken by it
in good faith, without negligence, and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Series B Capital Securities Guarantee.
(b) No provision of this Series B Capital Securities
Guarantee shall be deemed to impose any duty or obligation on the Capital
Securities Guarantee Trustee to perform any act or acts or exercise any right,
power, duty or obligation conferred or imposed on it in any jurisdiction in
which it shall be illegal, or in which the Capital Securities Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Capital Securities
Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Series B
Capital Securities Guarantee
The recitals contained in this Series B Capital
Securities Guarantee shall be taken as the statements of the Guarantor, and the
Capital Securities Guarantee Trustee does not assume any responsibility for
their correctness. The Capital Securities Guarantee Trustee makes no
representation as to the validity or sufficiency of this Series B Capital
Securities Guarantee.
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee; Eligibility
(a) There shall at all times be a Capital Securities
Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business
under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a corporation or
Person permitted by the Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act, authorized under
such laws to exercise corporate trust powers, having a combined capital
and surplus of at least 50 million U.S. dollars ($50,000,000), and
subject to supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements
of the supervising or examining authority referred to above, then, for
the purposes of this Section 4.1(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Capital Securities Guarantee
Trustee shall cease to be eligible to so act under Section 4.1(a), the Capital
Securities Guarantee Trustee shall immediately resign in the manner and with the
effect set out in Section 4.2(c).
(c) If the Capital Securities Guarantee Trustee has
or shall acquire any "conflicting interest" within the meaning of Section 310(b)
of the Trust Indenture Act, the Capital Securities Guarantee Trustee and
Guarantor shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act, subject to the penultimate paragraph thereof.
SECTION 4.2 Appointment, Removal and Resignation of Capital
Securities Guarantee Trustee
(a) Subject to Section 4.2(b), the Capital Securities
Guarantee Trustee may be appointed or removed without cause at any time by the
Guarantor except during an Event of Default.
(b) The Capital Securities Guarantee Trustee shall
not be removed in accordance with Section 4.2(a) until a Successor Capital
Securities Guarantee Trustee has been appointed and has accepted such
appointment by written instrument executed by such Successor Capital Securities
Guarantee Trustee and delivered to the Guarantor.
(c) The Capital Securities Guarantee Trustee shall
hold office until a Successor Capital Securities Guarantee Trustee shall have
been appointed or until its removal or resignation. The Capital Securities
Guarantee Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the Capital Securities
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Capital Securities Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing executed by
such Successor Capital Securities Guarantee Trustee and delivered to the
Guarantor and the resigning Capital Securities Guarantee Trustee.
(d) If no Successor Capital Securities Guarantee
Trustee shall have been appointed and accepted appointment as provided in this
Section 4.2 within 60 days after delivery of an instrument of removal or
resignation, the Capital Securities Guarantee Trustee resigning or being removed
may petition any court of competent jurisdiction for appointment of a Successor
Capital Securities Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Successor
Capital Securities Guarantee Trustee.
(e) No Capital Securities Guarantee Trustee shall be
liable for the acts or omissions to act of any Successor Capital Securities
Guarantee Trustee.
(f) Upon termination of this Series B Capital
Securities Guarantee or removal or resignation of the Capital Securities
Guarantee Trustee pursuant to this Section 4.2, the Guarantor shall pay to the
Capital Securities Guarantee Trustee all amounts due to the Capital Securities
Guarantee Trustee accrued to the date of such termination, removal or
resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this
Series B Capital Securities Guarantee and of any liability to which it applies
or may apply, presentment, demand for payment, any right to require a proceeding
first against the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the
Guarantor under this Series B Capital Securities Guarantee shall in no way be
affected or impaired by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the Series B Capital
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the
Issuer of all or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Series B Capital
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Series B Capital Securities
(other than an extension of time for payment of Distributions, Redemption Price,
Liquidation Distribution or other sum payable that results from the extension of
any interest payment period on the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence
on the part of the Holders to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Holders pursuant to the terms of the Series B
Capital Securities, or any action on the part of the Issuer granting indulgence
or extension of any kind;
(d) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings affecting,
the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in,
the Series B Capital Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred;
(g) the consummation of the Exchange Offer; or
(h) any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 5.3 that the obligations of the Guarantor
with respect to the Guarantee Payments shall be absolute and unconditional under
any and all circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount
of the Series B Capital Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Capital
Securities Guarantee Trustee in respect of this Series B Capital Securities
Guarantee or exercising any trust or power conferred upon the Capital Securities
Guarantee Trustee under this Series B Capital Securities Guarantee provided,
however, that, subject to Section 3.1, the Capital Securities Guarantee Trustee
shall have the right to decline to follow any such direction if the Capital
Securities Guarantee Trustee shall determine that the action so directed would
be unjustly prejudicial to the holders not taking part in such direction or if
the Capital Securities Guarantee Trustee being advised by counsel determines
that the action or proceeding so directed may not lawfully be taken or if the
Capital Securities Guarantee Trustee in good faith by its board of directors or
trustees, executive committee, or a trust committee of directors or trustees
and/or Responsible Officers shall determine that the action or proceedings so
directed would involve the Capital Securities Guarantee Trustee in personal
liability.
(b) If the Capital Securities Guarantee Trustee fails
to enforce such Series B Capital Securities Guarantee, any Holder may institute
a legal proceeding directly against the Guarantor to enforce the Capital
Securities Guarantee Trustee's rights under this Series B Capital Securities
Guarantee, without first instituting a legal proceeding against the Issuer, the
Capital Securities Guarantee Trustee or any other person or entity. The
Guarantor waives any right or remedy to require that any action be brought first
against the Issuer or any other person or entity before proceeding directly
against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Series B Capital Securities Guarantee creates a guarantee
of payment and not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of
the Holders of Series B Capital Securities against the Issuer in respect of any
amounts paid to such Holders by the Guarantor under this Series B Capital
Securities Guarantee; provided, however, that the Guarantor shall not (except to
the extent required by mandatory provisions of law) be entitled to enforce or
exercise any right that it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Series B Capital Securities Guarantee, if, at the time of any such payment, any
amounts are due and unpaid under this Series B Capital Securities Guarantee. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Series B
Capital Securities, and that the Guarantor shall be liable as principal and as
debtor hereunder to make Guarantee Payments pursuant to the terms of this Series
B Capital Securities Guarantee notwithstanding the occurrence of any event
referred to in subsections (a) through (h), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Capital Securities remain outstanding, the
Guarantor shall not (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Guarantor's capital stock (which includes common and preferred stock) or
(ii) make any payment of principal, interest or premium, if any, on or repay or
repurchase or redeem any debt securities of the Guarantor (including any Other
Debentures) that rank pari passu with or junior in right of payment to the
Debentures or (iii) make any guarantee payments with respect to any guarantee by
the Guarantor of any securities of any subsidiary of the Guarantor (including
Other Guarantees) if such guarantee ranks pari passu or junior in right of
payment to the Debentures (other than (a) dividends or distributions in shares
of, or options, warrants, rights to subscribe for or purchase shares of, common
stock of the Guarantor, (b) any declaration of a dividend in connection with the
implementation of a stockholder's rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Capital Securities Guarantee, (d) as a
direct result of, and only to the extent required in order to avoid the issuance
of fractional shares of capital stock following, a reclassification of the
Guarantor's capital stock or the exchange or the conversion of one class or
series of the Guarantor's capital stock for another class or series of the
Guarantor's capital stock, (e) the purchase of fractional interests in shares of
the Guarantor's capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or exchanged, and (f)
purchases of common stock related to the issuance of common stock or rights
under any of the Guarantor's benefit plans for its directors, officers or
employees or any of the Guarantor's dividend reinvestment plans) if at such time
(i) an Event of Default (as defined in the Indenture) shall have occurred and be
continuing, (ii) there shall have occurred any event of which the Guarantor has
actual knowledge that (a) is, or with the giving of notice or the lapse of time,
or both, would be an Event of Default (as defined in the Indenture) and (b) in
respect of which the Guarantor shall not have taken reasonable steps to cure,
(iii) if such Debentures are held by the Property Trustee, the Guarantor shall
be in default with respect to its payment of any obligations under this Series B
Capital Securities Guarantee or (iv) the Guarantor shall have given notice of
its election of the exercise of its right to extend the interest payment period
pursuant to Section 16.01 of the Indenture and any such extension shall be
continuing.
SECTION 6.2 Ranking
This Series B Capital Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and junior
in right of payment to Senior Indebtedness (as defined in the Indenture), to the
same extent and in the same manner that the Debentures are subordinated to
Senior Indebtedness pursuant to the Indenture, it being understood that the
terms of Article XV of the Indenture shall apply to the obligations of the
Guarantor under this Series B Capital Securities Guarantee as if (x) such
Article XV were set forth herein in full and (y) such obligations were
substituted for the term "Securities" appearing in such Article XV, (ii) pari
passu with the Debentures, the Other Debentures and with the most senior
preferred or preference stock now or hereafter issued by the Guarantor and with
any Other Guarantee (as defined herein) and any Other Common Securities
Guarantee and any guarantee now or hereafter entered into by the Guarantor in
respect of any preferred or preference stock of any Affiliate of the Guarantor,
and (iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Series B Capital Securities Guarantee shall terminate (i)
upon full payment of the Redemption Price (as defined in the Declaration) of all
Series B Capital Securities or (ii) upon liquidation of the Issuer, the full
payment of the amounts payable in accordance with the Declaration or the
distribution of the Debentures to the Holders of all of the Series B Capital
Securities. Notwithstanding the foregoing, this Series B Capital Securities
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder must restore payment of any sums paid under the
Series B Capital Securities or under this Series B Capital Securities Guarantee.
ARTICLE VIII
COMPENSATION AND EXPENSES OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
The Guarantor covenants and agrees to pay to the Capital
Securities Guarantee Trustee from time to time, and the Capital Securities
Guarantee Trustee shall be entitled to, such compensation as shall be agreed to
in writing between the Guarantor and the Capital Securities Guarantee Trustee
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust), and the Guarantor will pay or
reimburse the Capital Securities Guarantee Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Capital
Securities Guarantee Trustee in accordance with any of the provisions of this
Capital Securities Guarantee (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ) except any such expense, disbursement or advance as may arise from
its negligence or bad faith. The Guarantor also covenants to indemnify each of
the Capital Securities Guarantee Trustee (and its officers, agents, directors
and employees) for, and to hold it harmless against, any and all loss, damage,
claim, liability or expense including taxes (other than taxes based on the
income of the Capital Securities Guarantee Trustee) incurred without negligence
or bad faith on the part of the Capital Securities Guarantee Trustee and arising
out of or in connection with the acceptance or administration of this guarantee,
including the costs and expenses of defending itself against any claim of
liability in the premises. The obligations of the Guarantor under this Article
VIII to compensate and indemnify the Capital Securities Guarantee Trustee and to
pay or reimburse the Capital Securities Guarantee Trustee for expenses,
disbursements and advances shall be secured by a lien prior to that of the
Series B Capital Securities upon all property and funds held or collected by the
Capital Securities Guarantee Trustee as such, except funds held in trust for the
benefit of the holders of particular Series B Capital Securities.
The provisions of this Article shall survive the termination
of this Capital Securities Guarantee.
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Exculpation
(a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith in
accordance with this Series B Capital Securities Guarantee and in a manner that
such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Series B Capital
Securities Guarantee or by law, except that an Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such Indemnified
Person's negligence or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Guarantor and upon such
information, opinions, reports or statements presented to the Guarantor by any
Person as to matters the Indemnified Person reasonably believes are within such
other Person's professional or expert competence, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders of the Series B Capital
Securities might properly be paid.
SECTION 9.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for,
and to hold each Indemnified Person harmless against, any and all loss,
liability, damage, claim or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or administration
of the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 9.2 shall survive the termination of this
Series B Capital Securities Guarantee.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Successors and Assigns
All guarantees and agreements contained in this Series B
Capital Securities Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of the Guarantor and shall inure to the benefit of
the Holders of the Series B Capital Securities then outstanding.
SECTION 10.2 Amendments
Except with respect to any changes that do not materially
adversely affect the rights of Holders (in which case no consent of Holders will
be required), this Series B Capital Securities Guarantee may only be amended
with the prior approval of the Holders of a Majority in liquidation amount of
the Securities (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined). The provisions of the Declaration
with respect to consents to amendments thereof (whether at a meeting or
otherwise) shall apply to the giving of such approval.
SECTION 10.3 Notices
All notices provided for in this Series B Capital Securities
Guarantee shall be in writing, duly signed by the party giving such notice, and
shall be delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Issuer, in care of the
Administrative Trustee at the Issuer's mailing address set forth below (or such
other address as the Issuer may give notice of to the Holders and the Capital
Securities Guarantee Trustee):
HUBCO Capital Trust II
c/o HUBCO, Inc.
1000 MacArthur Boulevard
Mahwah, New Jersey 07430
Attention: Chief Executive Officer
Telecopy: (201) 236-2639
(b) If given to the Capital Securities Guarantee
Trustee, at the Capital Securities Guarantee Trustee's mailing address set forth
below (or such other address as the Capital Securities Guarantee Trustee may
give notice of to the Holders and the Issuer):
The Bank of New York
101 Barclay Street, Floor 21 West
New York, NY 10286
Attention: Corporate Trust
Administration Department
(c) If given to the Guarantor, at the Guarantor's
mailing address set forth below (or such other address as the Guarantor may give
notice of to the Holders of the Series B Capital Securities and the Capital
Securities Guarantee Trustee):
HUBCO, Inc.
1000 MacArthur Boulevard
Mahwah, New Jersey 07430
Attention: Chief Executive Officer
Telecopy: (201) 236-2639
(d) If given to any Holder of Series B Capital
Securities, at the address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 10.4 Benefit
This Series B Capital Securities Guarantee is solely for the
benefit of the Holders and, subject to Section 3.1(a), is not separately
transferable from the Series B Capital Securities.
SECTION 10.5 Governing Law
THIS SERIES B CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
THIS SERIES B CAPITAL SECURITIES GUARANTEE is executed as of
the day and year first above written.
HUBCO, INC., as Guarantor
By: ____________________________________
Name:
Title:
The Bank of New York, as Capital
Securities Guarantee Trustee
By: _____________________________________
Name:
Title:
REGISTRATION RIGHTS AGREEMENT
Dated June 19, 1998
among
HUBCO, INC.
HUBCO CAPITAL TRUST II
and
KEEFE, BRUYETTE & WOODS, INC.
as Initial Purchaser
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of June 19, 1998 among HUBCO, Inc., a New Jersey corporation
(the "Corporation"), HUBCO Capital Trust II, a business trust formed under the
laws of the state of Delaware (the "Trust"), and KEEFE, BRUYETTE & WOODS, INC.,
(the "Initial Purchaser").
This Agreement is made pursuant to the Purchase Agreement, dated June
16, 1998 (the "Purchase Agreement"), among the Corporation, as issuer of the
Series A 7.65% Junior Subordinated Deferrable Interest Debentures due 2028 (the
"Subordinated Debentures"), the Trust and the Initial Purchaser, which provides
for among other things, the sale by the Trust to the Initial Purchaser of 50,000
of the Trust's Series A 7.65% Capital Securities, liquidation amount $1,000 per
Capital Security (the "Capital Securities") the proceeds of which will be used
by the Trust to purchase Subordinated Debentures. The Capital Securities,
together with the Subordinated Debentures and the Corporation's guarantee of the
Capital Securities (the "Capital Securities Guarantee") are collectively
referred to as the "Securities". In order to induce the Initial Purchaser to
enter into the Purchase Agreement, the Corporation and the Trust have agreed to
provide to the Initial Purchaser and its direct and indirect transferees the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"Advice" shall have the meaning set forth in the last
paragraph of Section 3 hereof.
"Applicable Period" shall have the meaning set forth in
Section 3(t) hereof.
"Business Day" means any day other than a Saturday, a Sunday,
or a day on which banking institutions in the City of New York or in
Mahwah, New Jersey are authorized or required by law or executive order
to close.
"Closing Time" shall mean the Closing Time as defined in the
Purchase Agreement.
"Corporation" shall have the meaning set forth in the preamble
to this Agreement and also includes the Corporation's successors and
permitted assigns.
"Declaration" or "Declaration of Trust" shall mean the Amended
and Restated Declaration of Trust, dated as of June 19, 1998, by the
trustees named therein and the Corporation as sponsor.
"Depositary" shall mean The Depository Trust Corporation, or
any other depositary appointed by the Trust; provided, however, that
such depositary must have an address in the Borough of Manhattan, in
The City of New York.
"Effectiveness Period" shall have the meaning set forth in
Section 2(b) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
"Exchange Offer" shall mean the offer by the Corporation and
the Trust to the Holders to exchange all of the Registrable Securities
(other than Private Exchange Securities) for a like principal amount of
Exchange Securities pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under
the Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange
offer registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such
registration statement, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by
reference therein.
"Exchange Period" shall have the meaning set forth in Section
2(a) hereof.
"Exchange Securities" shall mean (i) with respect to the
Subordinated Debentures, the Series B % Junior Subordinated Deferrable
Interest Debentures due June 30, 2028 (the "Exchange Debentures")
containing terms identical to the Subordinated Debentures (except that
they will not contain terms with respect to the transfer restrictions
under the Securities Act other than to require minimum transfers
thereof to be in blocks of $100,000 principal amount and will not
provide for any increase in the interest rate thereon), (ii) with
respect to the Capital Securities, the Trust's Series B % Capital
Securities, liquidation amount $1,000 per Capital Security (the
"Exchange Capital Securities") which will have terms identical to the
Capital Securities (except they will not contain terms with respect to
transfer restrictions under the Securities Act other than to require
minimum transfers thereon to be in blocks of $100,000 liquidation
amount and will not provide for any increase in the interest rate
thereon) and (iii) with respect to the Capital Securities Guarantee,
the Corporation's guarantee (the "Exchange Capital Securities
Guarantee") of the Exchange Capital Securities which will have terms
identical to the Capital Securities Guarantee.
"Holder" shall mean the Initial Purchaser, for so long as it
owns any Registrable Securities, and each of its successors, assigns
and direct and indirect transferees who become registered owners of
Registrable Securities under the Indenture or Declaration of Trust.
"Indenture" shall mean the Indenture relating to the
Subordinated Debentures and the Exchange Debentures dated as of June
19, 1998 among the Corporation, as issuer, and The Bank of New York, as
trustee, as the same may be amended from time to time in accordance
with the terms thereof.
"Initial Purchaser" shall have the meaning set forth in the
preamble to this Agreement.
"Inspectors" shall have the meaning set forth in Section 3(n)
hereof.
"Issue Date" shall mean the date of original issuance of the
Securities.
"Liquidated Damages" shall have the meaning set forth in
Section 2(e) hereof.
"Majority Holders" shall mean the Holders of a majority of the
aggregate liquidation amount of outstanding Capital Securities.
"Participating Broker-Dealer" shall have the meaning set forth
in Section 3(t) hereof.
"Person" shall mean an individual, partnership, corporation,
trust or unincorporated organization, limited liability company, or a
government or agency or political subdivision thereof.
"Private Exchange" shall have the meaning set forth in Section
2(a) hereof.
"Private Exchange Securities" shall have the meaning set forth
in Section 2(a) hereof.
"Prospectus" shall mean the prospectus included in a
Registration Statement, including any preliminary prospectus, and any
such prospectus as amended or supplemented by any prospectus
supplement, including a prospectus supplement with respect to the terms
of the offering of any portion of the Registrable Securities covered by
a Shelf Registration Statement, and by all other amendments and
supplements to a prospectus, including post-effective amendments, and
in each case including all material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the
preamble to this Agreement.
"Records" shall have the meaning set forth in Section 3(n)
hereof.
"Registration Default" shall have the meaning set forth in
Section 2(e) hereof.
"Registrable Securities" shall mean the Securities and, if
issued, the Private Exchange Securities; provided, however, that
Securities or Private Exchange Securities, as the case may be, shall
cease to be Registrable Securities when (i) a Registration Statement
with respect to such Securities or Private Exchange Securities for the
exchange or resale thereof, as the case may be, shall have been
declared effective under the Securities Act and such Securities or
Private Exchange Securities, as the case may be, shall have been
disposed of pursuant to such Registration Statement, (ii) such
Securities or Private Exchange Securities, as the case may be, shall
have been sold to the public pursuant to Rule 144(k) (or any similar
provision then in force, but not Rule 144A) under the Securities Act,
(iii) such Securities or Private Exchange Securities, as the case may
be, shall have ceased to be outstanding or (iv) with respect to the
Securities, such Securities have been exchanged for Exchange Securities
upon consummation of the Exchange Offer and are thereafter freely
tradeable by the holder thereof (other than an affiliate of the
Corporation).
"Registration Expenses" shall mean any and all expenses
incident to performance of or compliance by the Corporation with this
Agreement, including without limitation: (i) all SEC or National
Association of Securities Dealers, Inc. (the "NASD") registration and
filing fees, including, if applicable, the fees and expenses of any
"qualified independent underwriter" (and its counsel) that is required
to be retained by any Holder of Registrable Securities in accordance
with the rules and regulations of the NASD, (ii) all fees and expenses
incurred in connection with compliance with state securities or blue
sky laws (including reasonable fees and disbursements of counsel for
any underwriters or Holders in connection with blue sky qualification
of any of the Exchange Securities or Registrable Securities) and
compliance with the rules of the NASD, (iii) all expenses of any
Persons in preparing or assisting in preparing, word processing,
printing and distributing any Registration Statement, any Prospectus
and any amendments or supplements thereto, and in preparing or
assisting in preparing, printing and distributing any underwriting
agreements, securities sales agreements and other documents relating to
the performance of and compliance with this Agreement, (iv) all rating
agency fees, (v) the fees and disbursements of counsel for the
Corporation and of the independent certified public accountants of the
Corporation, including the expenses of any "cold comfort" letters
required by or incident to such performance and compliance, (vi) the
fees and expenses of the Trustee, and any exchange agent or custodian,
(vii) all fees and expenses incurred in connection with the listing, if
any, of any of the Registrable Securities on any securities exchange or
exchanges, and (viii) the reasonable fees and expenses of any special
experts retained by the Corporation in connection with any Registration
Statement.
"Registration Statement" shall mean any registration statement
of the Corporation and the Trust which covers any of the Exchange
Securities or Registrable Securities pursuant to the provisions of this
Agreement, and all amendments and supplements to any such Registration
Statement, including post-effective amendments, in each case including
the Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"Rule 144(k) Period" shall mean the period of two years (or
such shorter period as may hereafter be referred to in Rule 144(k)
under the Securities Act (or similar successor rule)) commencing on the
Issue Date.
"SEC" shall mean the Securities and Exchange Commission.
"Securities" shall have the meaning set forth in the preamble
to this Agreement.
"Securities Act" shall mean the Securities Act of 1933, as
amended from time to time.
"Shelf Registration" shall mean a registration effected
pursuant to Section 2(b) hereof.
"Shelf Registration Event" shall have the meaning set forth in
Section 2(b) hereof.
"Shelf Registration Event Date" shall have the meaning set
forth in Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf"
registration statement of the Corporation and the Trust pursuant to the
provisions of Section 2(b) hereof which covers all of the Registrable
Securities or all of the Private Exchange Securities, as the case may
be, on an appropriate form under Rule 415 under the Securities Act, or
any similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post effective
amendments, in each case including the Prospectus contained therein,
all exhibits thereto and all material incorporated by reference
therein.
"TIA" shall have the meaning set forth in Section 3(l) hereof.
"Trustees" shall mean any and all trustees with respect to (i)
the Capital Securities under the Declaration, (ii) the Subordinated
Debentures under the Indenture and (iii) the Capital Securities
Guarantee.
2. Registration Under the Securities Act.
(a) Exchange Offer. To the extent not prohibited by any
applicable law or applicable interpretation of the staff of the SEC, the
Corporation and the Trust shall, for the benefit of the Holder, at the
Corporation's cost, use its best efforts to (i) cause to be filed with the SEC
by the March 31 after the Issue Date an Exchange Offer Registration Statement on
an appropriate form under the Securities Act covering the Exchange Offer, (ii)
cause such Exchange Offer Registration Statement to be declared effective under
the Securities Act by the SEC not later than the April 30 after the Issue Date
and (iii) keep such Exchange Offer Registration Statement effective for not less
than 30 calendar days (or longer if required by applicable law) after the date
notice of the Exchange Offer is mailed to the Holders. Upon the effectiveness of
the Exchange Offer Registration Statement, the Corporation and the Trust shall
promptly commence the Exchange Offer, it being the objective of such Exchange
Offer to enable each Holder eligible and electing to exchange Registrable
Securities for a like principal amount of Exchange Debentures or a like
liquidation amount of Exchange Capital Securities, together with the Exchange
Guarantee, as applicable (assuming that such Holder is not an affiliate of the
Corporation within the meaning of Rule 405 under the Securities Act and is not a
broker-dealer tendering Registrable Securities acquired directly from the
Corporation for its own account, acquires the Exchange Securities in the
ordinary course of such Holder's business and has no arrangements or
understandings with any Person to participate in the Exchange Offer for the
purpose of distributing the Exchange Securities) to transfer such Exchange
Securities from and after their receipt without any limitations or restrictions
under the Securities Act and under state securities or blue sky laws.
In connection with the Exchange Offer, the Corporation and the Trust
shall:
(i) mail to each Holder a copy of the Prospectus
forming part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal and related
documents;
(ii) keep the Exchange Offer open for acceptance for
a period of not less than 30 days after the date notice
thereof is mailed to the Holders (or longer if required by
applicable law) (such period referred to herein as the
"Exchange Period");
(iii) utilize the services of the Depositary for the
Exchange Offer;
(iv) permit Holders to withdraw tendered Securities
at any time prior to the close of business, New York time, on
the last Business Day of the Exchange Period, by sending to
the institution specified in the notice, a telegram, telex,
facsimile transmission or letter setting forth the name of
such Holder, the principal amount of Securities delivered for
exchange, and a statement that such Holder is withdrawing his
election to have such Securities exchanged;
(v) notify each Holder that any Security not tendered
by such Holder in the Exchange Offer will remain outstanding
and continue to accrue interest or accumulate distributions,
as the case may be, but will not retain any rights under this
Agreement (except in the case of the Initial Purchaser and
Participating Broker-Dealers as provided herein); and
(vi) otherwise comply in all respects with all
applicable laws relating to the Exchange Offer.
If the Initial Purchaser determines upon advice of its outside
counsel that it is not eligible to participate in the Exchange Offer with
respect to the exchange of Securities constituting any portion of an unsold
allotment in the initial distribution, as soon as practicable upon receipt by
the Corporation and the Trust of a written request from the Initial Purchaser,
the Corporation and the Trust, as applicable, shall issue and deliver to the
Initial Purchaser in exchange (the "Private Exchange") for the Securities held
by the Initial Purchaser, a like liquidation amount of Capital Securities of the
Trust, together with the Exchange Guarantee, or a like principal amount of the
Subordinated Debentures of the Corporation, as applicable, that are identical
(except that such securities may bear a customary legend with respect to
restrictions on transfer pursuant to the Securities Act) to the Exchange
Securities (the "Private Exchange Securities") and which are issued pursuant to
the Indenture, the Declaration or the Guarantee (which provides that the
Exchange Securities will not be subject to the transfer restrictions set forth
in the Indenture or the Declaration, as applicable, and that the Exchange
Securities, the Private Exchange Securities and the Securities will vote and
consent together on all matters as one class and that neither the Exchange
Securities, the Private Exchange Securities nor the Securities will have the
right to vote or consent as a separate class on any matter). The Private
Exchange Securities shall be of the same series as the Exchange Securities and
the Corporation and the Trust will seek to cause the CUSIP Service Bureau to
issue the same CUSIP Numbers for the Private Exchange Securities as for the
Exchange Securities issued pursuant to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer
and, if applicable, the Private Exchange, the Corporation and the Trust, as the
case requires, shall:
(i) accept for exchange all Securities or portions
thereof tendered and not validly withdrawn pursuant to the
Exchange Offer or the Private Exchange;
(ii) deliver, or cause to be delivered, to the
applicable Trustee for cancellation all Securities or portions
thereof so accepted for exchange by the Corporation; and
(iii) issue, and cause the applicable Trustee under
the Indenture, the Declaration or the Guarantee, as
applicable, to promptly authenticate and deliver to each
Holder, new Exchange Securities or Private Exchange
Securities, as applicable, equal in principal amount to the
principal amount of the Subordinated Debentures or equal in
liquidation amount to the liquidation amount to the Capital
Securities (together with the guarantee thereof) as are
surrendered by such Holder.
Distributions on each Exchange Capital Security and interest on each
Exchange Debenture and Private Exchange Security issued pursuant to the
Registered Exchange Offer and in the Private Exchange will accrue from the last
date on which a Distribution or interest was paid on the Capital Security or the
Subordinated Debenture surrendered in exchange therefore or, if no Distribution
or interest has been paid on such Capital Security or Subordinated Debenture,
from the Issue Date. To the extent not prohibited by any law or applicable
interpretation of the staff of the SEC, the Corporation and the Trust shall use
their best efforts to complete the Exchange Offer as provided above, and shall
comply with the applicable requirements of the Securities Act, the Exchange Act
and other applicable laws in connection with the Exchange Offer. The Exchange
Offer shall not be subject to any conditions, other than that the Exchange Offer
does not violate applicable law or any applicable interpretation of the staff of
the SEC. Each Holder of Registrable Securities who wishes to exchange such
Registrable Securities for Exchange Securities in the Exchange Offer will be
required to make certain customary representations in connection therewith,
including, in the case of any Holder of Capital Securities, representations that
(i) it is not an affiliate of the Trust or the Corporation, (ii) the Exchange
Securities to be received by it were acquired in the ordinary course of its
business and (iii) at the time of the Exchange Offer, it has no arrangement with
any person to participate in the distribution (within the meaning of the
Securities Act) of the Exchange Capital Securities. The Corporation and the
Trust shall inform the Initial Purchaser, after consultation with the Trustee,
of the names and addresses of the Holders to whom the Exchange Offer is made,
and the Initial Purchaser shall have the right to contact such Holders and
otherwise facilitate the tender of Registrable Securities in the Exchange Offer.
Upon consummation of the Exchange Offer in accordance with
this Section 2(a),the provisions of this Agreement shall continue to apply,
mutatis mutandis, solely with respect to Registrable Securities that are Private
Exchange Securities and Exchange Securities held by Participating
Broker-Dealers, and the Corporation and the Trust shall have no further
obligation to register the Registrable Securities (other than Private Exchange
Securities) pursuant to Section 2(b) of this Agreement.
(b) Shelf Registration. In the event that (i) the
Corporation, the Trust or the Majority Holders reasonably determine, after
conferring with counsel (which may be in-house counsel), that the Exchange Offer
Registration provided in Section 2(a) above is not available because of any
change in law or in currently prevailing interpretations of the staff of the
SEC, (ii) the Exchange Offer Registration Statement is not declared effective by
the April 30 after the Issue Date or (iii) upon the request of the Initial
Purchaser with respect to any Registrable Securities held by it, if such Initial
Purchaser is not permitted, in the reasonable opinion of Alston & Bird LLP
pursuant to applicable law or applicable interpretations of the staff of the
SEC, to participate in the Exchange Offer and thereby receive securities that
are freely tradeable without restriction under the Securities Act and applicable
blue sky or state securities laws (any of the events specified in (i)(iii) being
a "Shelf Registration Event" and the date of occurrence thereof, the "Shelf
Registration Event Date"), the Corporation and the Trust shall, at their cost,
use their best efforts to cause to be filed as promptly as practicable after
such Shelf Registration Event Date, as the case may be, and, in any event,
within 45 days after such Shelf Registration Event Date (which shall be no
earlier than 75 days after the Closing Time), a Shelf Registration Statement
providing for the sale by the Holders of all of the Registrable Securities, and
shall use its best efforts to have such Shelf Registration Statement declared
effective by the SEC as soon as practicable. No Holder of Registrable Securities
shall be entitled to include any of its Registrable Securities in any Shelf
Registration pursuant to this Agreement unless and until such Holder agrees in
writing to be bound by all of the provisions of this Agreement applicable to
such Holder and furnishes to the Corporation and the Trust in writing, within 15
days after receipt of a request therefor, such information as the Corporation
and the Trust may, after conferring with counsel with regard to information
relating to Holders that would be required by the SEC to be included in such
Shelf Registration Statement or Prospectus included therein, reasonably request
for inclusion in any Shelf Registration Statement or Prospectus included
therein. Each Holder as to which any Shelf Registration is being effected agrees
to furnish to the Corporation and the Trust all information with respect to such
Holder necessary to make the information previously furnished to the Corporation
by such Holder not materially misleading.
The Corporation and the Trust agree to use their respective best
efforts to keep the Shelf Registration Statement continuously effective for the
Rule 144(k) Period (subject to extension pursuant to the last paragraph of
Section 3 hereof) or for such shorter period which will terminate when all of
the Registrable Securities covered by the Shelf Registration Statement have been
sold pursuant to the Shelf Registration Statement or cease to be outstanding
(the "Effectiveness Period"). The Corporation and the Trust shall not permit any
securities other than Registrable Securities to be included in the Shelf
Registration. The Corporation and the Trust will, in the event a Shelf
Registration Statement is declared effective, provide to each Holder a
reasonable number of copies of the Prospectus which is a part of the Shelf
Registration Statement, notify each such Holder when the Shelf Registration has
become effective and use its best efforts to take certain other actions as are
required to permit certain unrestricted resales of the Registrable Securities.
The Corporation and the Trust further agree, if necessary, to supplement or
amend the Shelf Registration Statement, if required by the rules, regulations or
instructions applicable to the registration form used by the Corporation for
such Shelf Registration Statement or by the Securities Act or by any other rules
and regulations thereunder for shelf registrations, and the Corporation and the
Trust agree to furnish to the Holders of Registrable Securities copies of any
such supplement or amendment promptly after its being used or filed with the
SEC.
(c) Expenses. The Corporation shall pay all Registration
Expenses in connection with the registration pursuant to Section 2(a) or 2(b)
hereof. Except as provided herein, each Holder shall pay all expenses of its
counsel, underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable Securities
pursuant to the Shelf Registration Statement.
(d) Effective Registration Statement. An Exchange Offer
Registration Statement pursuant to Section 2(a) hereof or a Shelf Registration
Statement pursuant to Section 2(b) hereof will not be deemed to have become
effective unless it has been declared effective by the SEC (or is automatically
effective); provided, however, that if, after it has been declared effective,
the offering of Registrable Securities pursuant to a Shelf Registration
Statement is interfered with by any stop order, injunction or other order or
requirement of the SEC or any other governmental agency or court, such
Registration Statement will be deemed not to have been effective during the
period of such interference, until the offering of Registrable Securities
pursuant to such Registration Statement may legally resume. The Corporation and
the Trust will be deemed not to have used their best efforts to cause the
Exchange Offer Registration Statement or the Shelf Registration Statement, as
the case may be, to become, or to remain, effective during the requisite period
if either of them voluntarily take any action that would result in any such
Registration Statement not being declared effective or in the Holders of
Registrable Securities covered thereby not being able to exchange or offer and
sell such Registrable Securities during that period unless such action is
required by applicable law.
(e) Liquidated Damages. In the event that
(i) (A) neither the Exchange Offer Registration Statement nor
a Shelf Registration Statement is filed with the SEC on or
prior to the March 31 after the Issue Date or (B)
notwithstanding that the Corporation and the Trust have
consummated or will consummate an Exchange Offer, the
Corporation and the Trust are required to file a Shelf
Registration Statement and such Shelf Registration Statement
is not filed on or prior to the date required by Section 2(b)
hereof, then commencing on the day after the applicable
required filing date, additional interest shall accrue on the
principal amount of the Subordinated Debentures, and
additional Distributions shall accumulate on the liquidation
amount of the Capital Securities, each at a rate of 0.25% per
annum; or
(ii) (A) neither the Exchange Offer Registration Statement nor
a Shelf Registration Statement is declared effective by the
SEC on or prior to the March 31, after the Issue Date (B)
notwithstanding that the Corporation and the Trust have
consummated or will consummate an Exchange Offer, the
Corporation and the Trust are required to file a Shelf
Registration Statement and such Shelf Registration Statement
is not declared effective by the SEC on or prior to the 30th
day after the date such Shelf Registration Statement was
required to be filed, then, commencing on the 31st day after
the applicable required filing date, additional interest shall
accrue on the principal amount of the Subordinated Debentures,
and additional distributions shall accumulate on the
liquidation amount of the Capital Securities, each at a rate
of 0.25% per annum; or
(iii) (A) the Trust has not exchanged Exchange Capital
Securities for all Capital Securities or the Corporation has
not exchanged Exchange Guarantees or Exchange Subordinated
Debentures for all Guarantees or Subordinated Debentures
validly tendered, in accordance with the terms of the Exchange
Offer on or prior to the 30th day after the date on which the
Exchange Offer Registration Statement was declared effective
or (B) if applicable, the Shelf Registration Statement has
been declared effective and such Shelf Registration Statement
ceases to be effective at any time prior to the expiration of
the Rule 144(k) Period (other than after such time as all
Capital Securities have been disposed of thereunder or
otherwise cease to be Registrable Securities), then additional
interest shall accrue on the principal amount of Subordinated
Debentures, and additional distributions shall accumulate on
the liquidation amount of the Capital Securities, each at a
rate of 0.25% per annum commencing on (x) the 31st day after
such effective date, in the case of (A) above, or (y) the day
such Shelf Registration Statement ceases to be effective in
the case of (B) above;
provided, however, that neither the additional interest rate on the Subordinated
Debentures, nor the additional distribution rate on the liquidation amount of
the Capital Securities, may exceed in the aggregate 0.25% per annum; provided,
further, however, that (1) upon the filing of the Exchange Offer Registration
Statement or a Shelf Registration Statement (in the case of clause (i) above),
(2) upon the effectiveness of the Exchange Offer Registration Statement or a
Shelf Registration Statement (in the case of clause (ii) above), or (3) upon the
exchange of Exchange Capital Securities, Exchange Guarantees and Exchange
Subordinated Debentures for all Capital Securities, Guarantees and Subordinated
Debentures tendered (in the case of clause (iii)(A) above), or upon the
effectiveness of the Shelf Registration Statement which had ceased to remain
effective (in the case of clause (iii)(B) above), additional interest on the
Subordinated Debentures, and additional distributions on the liquidation amount
of the Capital Securities as a result of such clause (or the relevant subclause
thereof), as the case may be, shall cease to accrue or accumulate, as the case
may be.
Any amounts of additional interest and additional
Distributions due pursuant to Section 2(e)(i), (ii) or (iii) above ("Liquidated
Damages") will be payable in cash on the next succeeding February 1 or August 1,
as the case may be, to holders on the relevant record dates for the payment of
interest and Distributions pursuant to the Indenture and the Declaration,
respectively.
(f) Specific Enforcement. Without limiting the remedies
available to the Holders, the Corporation and the Trust acknowledge that any
failure by the Corporation or the Trust to comply with its obligations under
Section 2(a) and Section 2(b) hereof may result in material irreparable injury
to the Holders for which there is no adequate remedy at law, that it would not
be possible to measure damages for such injuries precisely and that, in the
event of any such failure, any Holder may obtain such relief as may be required
to specifically enforce the Corporation's and the Trust's obligations under
Section 2(a) and Section 2(b) hereof.
3. Registration Procedures. In connection with the obligations of the
Corporation and the Trust with respect to the Registration Statements pursuant
to Sections 2(a) and 2(b) hereof, the Corporation and the Trust shall use their
best efforts to:
(a) prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Sections 2(a) and 2(b) hereof within
the relevant time period specified in Section 2 hereof on the appropriate form
under the Securities Act, which form (i) shall be selected by the Corporation
and the Trust, (ii) shall, in the case of a Shelf Registration, be available for
the sale of the Registrable Securities by the selling Holders thereof and in the
case of an Exchange Offer, be available for the exchange of the Registrable
Securities, and (iii) shall comply as to form in all material respects with the
requirements of the applicable form and include all financial statements
required by the SEC to be filed therewith; and use its best efforts to cause
such Registration Statement to become effective and remain effective in
accordance with Section 2 hereof; provided, however, that if (1) such filing is
pursuant to Section 2(b), or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2(a) is required to be
delivered under the Securities Act by any Participating Broker-Dealer who seeks
to sell Exchange Securities, before filing any Registration Statement or
Prospectus or any amendments or supplements thereto, the Corporation and the
Trust shall furnish to and afford the Holders of the Registrable Securities and
each such Participating Broker-Dealer, as the case may be, covered by such
Registration Statement, their counsel and the managing underwriters, if any, a
reasonable opportunity to review, at their expense, copies of all such documents
(including copies of any documents to be incorporated by reference therein and
all exhibits thereto) proposed to be filed. The Corporation and the Trust shall
not file any Registration Statement or Prospectus or any amendments or
supplements thereto in respect of which the Holders must be afforded an
opportunity to review prior to the filing of such document if the Majority
Holders or such Participating Broker-Dealer, as the case may be, their counsel
or the managing underwriters, if any, shall reasonably object;
(b) prepare and file with the SEC such amendments and post
effective amendments to each Registration Statement as may be necessary to keep
such Registration Statement effective for the Effectiveness Period or the
Applicable Period, as the case may be; and cause each Prospectus to be
supplemented, if so determined by the Corporation or the Trust or requested by
the SEC, by any required prospectus supplement and as so supplemented to be
filed pursuant to Rule 424 (or any similar provision then in force) under the
Securities Act, and comply with the provisions of the Securities Act, the
Exchange Act and the rules and regulations promulgated thereunder applicable to
it with respect to the disposition of all securities covered by each
Registration Statement during the Effectiveness Period or the Applicable Period,
as the case may be, in accordance with the intended method or methods of
distribution by the selling Holders thereof described in this Agreement
(including sales by any Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each
Holder of Registrable Securities included in the Shelf Registration Statement,
at least three Business Days prior to filing, that a Shelf Registration
Statement with respect to the Registrable Securities is being filed and advising
such Holder that the distribution of Registrable Securities will be made in
accordance with the method selected by the Majority Holders; and (ii) furnish to
each Holder of Registrable Securities included in the Shelf Registration
Statement and to each underwriter of an underwritten offering of Registrable
Securities, if any, without charge, as many copies of each Prospectus, including
each preliminary Prospectus, and any amendment or supplement thereto and such
other documents as such Holder or underwriter may reasonably request, in order
to facilitate the public sale or other disposition of the Registrable
Securities; and (iii) consent to the use of the Prospectus or any amendment or
supplement thereto by each of the selling Holders of Registrable Securities
included in the Shelf Registration Statement in connection with the offering and
sale of the Registrable Securities covered by the Prospectus or any amendment or
supplement thereto;
(d) in the case of a Shelf Registration, use its best efforts
to register or qualify the Registrable Securities under all applicable state
securities or "blue sky" laws of such jurisdictions by the time the applicable
Registration Statement is declared effective by the SEC as any Holder of
Registrable Securities covered by a Registration Statement and each underwriter
of an underwritten offering of Registrable Securities shall reasonably request
in writing in advance of such date of effectiveness, and do any and all other
acts and things which may be reasonably necessary or advisable to enable such
Holder and underwriter to consummate the disposition in each such jurisdiction
of such Registrable Securities owned by such Holder; provided, however, that the
Corporation and the Trust shall not be required to (i) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), (ii) file any
general consent to service of process in any jurisdiction where it would not
otherwise be subject to such service of process or (iii) subject itself to
taxation in any such jurisdiction if it is not then so subject;
(e) in the case of (1) a Shelf Registration or (2)
Participating Broker-Dealers from whom the Corporation or the Trust has received
prior written notice that they will be utilizing the Prospectus contained in the
Exchange Offer Registration Statement as provided in Section 3(t) hereof, are
seeking to sell Exchange Securities and are required to deliver Prospectuses,
notify each Holder of Registrable Securities, or such Participating
Broker-Dealers, as the case may be, their counsel and the managing underwriters,
if any, promptly and promptly confirm such notice in writing (i) when a
Registration Statement has become effective and when any post effective
amendments and supplements thereto become effective, (ii) of any request by the
SEC or any state securities authority for amendments and supplements to a
Registration Statement or Prospectus or for additional information after the
Registration Statement has become effective, (iii) of the issuance by the SEC or
any state securities authority of any stop order suspending the effectiveness of
a Registration Statement or the qualification of the Registrable Securities or
the Exchange Securities to be offered or sold by any Participating Broker-Dealer
in any jurisdiction described in paragraph 3(d) hereof or the initiation of any
proceedings for that purpose, (iv) in the case of a Shelf Registration, if,
between the effective date of a Registration Statement and the closing of any
sale of Registrable Securities covered thereby, the representations and
warranties of the Corporation and the Trust contained in any purchase agreement,
securities sales agreement or other similar agreement, if any cease to be true
and correct in all material respects, and (v) of the happening of any event or
the failure of any event to occur or the discovery of any facts or otherwise,
during the Effectiveness Period which makes any statement made in such
Registration Statement or the related Prospectus untrue in any material respect
or which causes such Registration Statement or Prospectus to omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and (vi) the
Corporation and the Trust's reasonable determination that a post effective
amendment to the Registration Statement would be appropriate;
(f) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement at the
earliest possible moment;
(g) in the case of a Shelf Registration, furnish to each
Holder of Registrable Securities included within the coverage of such Shelf
Registration Statement, without charge, at least one conformed copy of each
Registration Statement relating to such Shelf Registration and any
post-effective amendment thereto (without documents incorporated therein by
reference or exhibits thereto, unless requested);
(h) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Securities to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be sold and
not bearing any restrictive legends and in such denominations (consistent with
the provisions of the Indenture and the Declaration) and registered in such
names as the selling Holders or the underwriters may reasonably request at least
two Business Days prior to the closing of any sale of Registrable Securities
pursuant to such Shelf Registration Statement;
(i) in the case of a Shelf Registration or an Exchange Offer
Registration, upon the occurrence of any circumstance contemplated by Section
3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, use its best efforts to prepare
a supplement or post effective amendment to a Registration Statement or the
related Prospectus or any document incorporated therein by reference or file any
other required document so that, as thereafter delivered to the purchasers of
the Registrable Securities, such Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; and to notify each Holder to suspend use of the Prospectus
as promptly as practicable after the occurrence of such an event, and each
Holder hereby agrees to suspend use of the Prospectus until the Corporation has
amended or supplemented the Prospectus to correct such misstatement or omission;
(j) in the case of a Shelf Registration, a reasonable time
prior to the filing of any document which is to be incorporated by reference
into a Registration Statement or a Prospectus after the initial filing of a
Registration Statement, provide a reasonable number of copies of such document
to the Holders; and make such of the representatives of the Corporation and the
Trust as shall be reasonably requested by the Holders of Registrable Securities
or the Initial Purchaser on behalf of such Holders available for discussion of
such document;
(k) obtain a CUSIP number for all Exchange Capital Securities
and the Capital Securities (and if the Trust has made a distribution of the
Subordinated Debentures to the Holders of the Capital Securities, the
Subordinated Debentures or the Exchange Subordinated Debentures) as the case may
be, not later than the effective date of a Registration Statement, and provide
the Trustee with printed certificates for the Exchange Securities or the
Registrable Securities, as the case may be, in a form eligible for deposit with
the Depositary;
(l) cause the Indenture, the Declaration, the Guarantee and
the Exchange Guarantee to be qualified under the Trust Indenture Act of 1939
(the "TIA") in connection with the registration of the Exchange Securities or
Registrable Securities, as the case may be, and effect such changes to such
documents as may be required for them to be so qualified in accordance with the
terms of the TIA and execute, and use its best efforts to cause the relevant
trustee to execute, all documents as may be required to effect such changes, and
all other forms and documents required to be filed with the SEC to enable such
documents to be so qualified in a timely manner;
(m) in the case of a Shelf Registration, enter into such
agreements (including underwriting agreements) as are customary in secondary
underwritten offerings and take all such other appropriate actions as are
reasonably requested in order to expedite or facilitate the registration or the
disposition of such Registrable Securities, and in such connection, whether or
not an underwriting agreement is entered into and whether or not the
registration is an underwritten registration, if requested by (x) the Initial
Purchaser, in the case where the Initial Purchaser holds Securities acquired by
it as part of its initial distribution and (y) other Holders of Securities
covered thereby: (i) make such representations and warranties to Holders of such
Registrable Securities and the underwriters (if any), with respect to the
business of the Trust, the Corporation and its subsidiaries as then conducted
and the Registration Statement, Prospectus and documents, if any, incorporated
or deemed to be incorporated by reference therein, in each case, as are
customarily made by issuers to underwriters in secondary underwritten offerings,
and confirm the same if and when requested; (ii) obtain opinions of counsel to
the Corporation (who may be an employee of the Corporation) and the Trust and
updates thereof (which may be in the form of a reliance letter) in form and
substance reasonably satisfactory to the managing underwriters (if any) and the
Holders of a majority in principal amount of the Registrable Securities being
sold, addressed to each selling Holder and the underwriters (if any) covering
the matters customarily covered in opinions requested in underwritten offerings
and such other matters as may be reasonably requested by such underwriters (it
being agreed that the matters to be covered by such opinion may be subject to
customary qualifications and exceptions); (iii) obtain "cold comfort" letters
and updates thereof in form and substance reasonably satisfactory to the
managing underwriters from the independent certified public accountants of the
Corporation and the Trust (and, if necessary, any other independent certified
public accountants of any subsidiary of the Corporation and the Trust or of any
business acquired by the Corporation and the Trust for which financial
statements and financial data are, or are required to be, included in the
Registration Statement), addressed to each of the underwriters, such letters to
be in customary form and covering matters of the type customarily covered in
"cold comfort" letters in connection with underwritten offerings and such other
matters as reasonably requested by such underwriters in accordance with
Statement on Auditing Standards No. 72; and (iv) if an underwriting agreement is
entered into, the same shall contain indemnification provisions and procedures
no less favorable than those set forth in Section 4 hereof (or such other
provisions and procedures acceptable to Holders of a majority in aggregate
principal amount of Registrable Securities covered by such Registration
Statement and the managing underwriters or agents) with respect to all parties
to be indemnified pursuant to said Section (including, without limitation, such
underwriters and selling Holders). The above shall be done at each closing under
such underwriting agreement, or as and to the extent required thereunder;
(n) if (1) a Shelf Registration is filed pursuant to Section
2(b) or (2) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2(a) is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, make reasonably available for inspection by any
selling Holder of such Registrable Securities being sold, or each such
Participating Broker-Dealer, as the case may be, any underwriter participating
in any such disposition of Registrable Securities, if any, and any attorney,
accountant or other agent retained by any such selling Holder or each such
Participating Broker-Dealer, as the case may be, or underwriter (collectively,
the "Inspectors"), at the offices where normally kept, during reasonable
business hours, all financial and other records, pertinent corporate documents
and properties of the Trust, the Corporation and its subsidiaries (collectively,
the "Records") as shall be reasonably necessary to enable them to exercise any
applicable due diligence responsibilities, and cause the officers, directors and
employees of the Trust, the Corporation and its subsidiaries to supply all
relevant information in each case reasonably requested by any such Inspector in
connection with such Registration Statement provided, however, that the
foregoing inspection and information gathering shall be coordinated on behalf of
the Purchasers by you and on behalf of the other parties, by one counsel
designated by you and on behalf of such other parties as described in Section
2(c) hereof. Records which the Corporation and the Trust determine, in good
faith, to be confidential and any records which it notifies the Inspectors are
confidential shall not be disclosed by the Inspectors (and the Inspectors shall
so agree in writing) unless (i) the disclosure of such Records is necessary to
avoid or correct a material misstatement or omission in such Registration
Statement, (ii) the release of such Records is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction or is necessary in connection
with any action, suit or proceeding or (iii) the information in such Records has
been made generally available to the public. Each selling Holder of such
Registrable Securities and each such Participating Broker-Dealer will be
required to agree in writing that information obtained by it as a result of such
inspections shall be deemed confidential and shall not be used by it as the
basis for any market transactions in the securities of the Trust or the
Corporation unless and until such is made generally available to the public.
Each selling Holder of such Registrable Securities and each such Participating
Broker-Dealer will be required to further agree in writing that it will, upon
learning that disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Corporation and allow the Corporation at its
expense to undertake appropriate action to prevent disclosure of the Records
deemed confidential;
(o) comply with all applicable rules and regulations of the
SEC so long as any provision of this Agreement shall be applicable and make
generally available to its security holders earning statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or
any similar rule promulgated under the Securities Act) no later than 45 days
after the end of any 12 - month period (or 90 days after the end of any 12 -
month period if such period is a fiscal year) (i) commencing at the end of any
fiscal quarter in which Registrable Securities are sold to underwriters in a
firm commitment or best efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Corporation after the effective date of a Registration
Statement, which statements shall cover said 12-month periods;
(p) upon consummation of an Exchange Offer or a Private
Exchange, if requested by a Trustee, obtain an opinion of counsel to the
Corporation (who may be an employee of the Corporation) addressed to the Trustee
for the benefit of all Holders of Registrable Securities participating in the
Exchange Offer or the Private Exchange, as the case may be, and which includes
an opinion that (i) the Corporation and the Trust, as the case requires, has
duly authorized, executed and delivered the Exchange Securities and Private
Exchange Securities, and (ii) each of the Exchange Securities or the Private
Exchange Securities, as the case may be, constitute a legal, valid and binding
obligation of the Corporation or the Trust, as the case requires, enforceable
against the Corporation or the Trust, as the case requires, in accordance with
its respective terms (in each case, with customary exceptions);
(q) if an Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Securities by Holders to the
Corporation or the Trust, as applicable (or to such other Person as directed by
the Corporation or the Trust, respectively), in exchange for the Exchange
Securities or the Private Exchange Securities, as the case may be, the
Corporation or the Trust, as applicable, shall mark, or cause to be marked, on
such Registrable Securities delivered by such Holders that such Registrable
Securities are being cancelled in exchange for the Exchange Securities or the
Private Exchange Securities, as the case may be; in no event shall such
Registrable Securities be marked as paid or otherwise satisfied;
(r) cooperate with each seller of Registrable Securities
covered by any Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with the
NASD;
(s) use its best efforts to take all other steps necessary to
effect the registration of the Registrable Securities covered by a Registration
Statement contemplated hereby;
(t) (A) in the case of the Exchange Offer Registration
Statement (i) include in the Exchange Offer Registration Statement a section
entitled "Plan of Distribution," which section shall be reasonably acceptable to
the Initial Purchaser or another representative of the Participating
Broker-Dealers, and which shall contain a summary statement of the positions
taken or policies made by the staff of the SEC with respect to the potential
"underwriter" status of any broker-dealer (a "Participating Broker-Dealer") that
holds Registrable Securities acquired for its own account as a result of market
making activities or other trading activities and that will be the beneficial
owner (as defined in Rule 13d 3 under the Exchange Act) of Exchange Securities
to be received by such broker-dealer in the Exchange Offer, whether such
positions or policies have been publicly disseminated by the staff of the SEC or
such positions or policies, in the reasonable judgment of the Initial Purchaser
or such other representative, represent the prevailing views of the staff of the
SEC, including a statement that any such broker-dealer who receives Exchange
Securities for Registrable Securities pursuant to the Exchange Offer may be
deemed a statutory underwriter and must deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such
Exchange Securities, (ii) furnish to each Participating Broker-Dealer who has
delivered to the Corporation the notice referred to in Section 3(e), without
charge, as many copies of each Prospectus included in the Exchange Offer
Registration Statement, including any preliminary prospectus, and any amendment
or supplement thereto, as such Participating Broker-Dealer may reasonably
request (each of the Corporation and the Trust hereby consents to the use of the
Prospectus forming part of the Exchange Offer Registration Statement or any
amendment or supplement thereto by any Person subject to the prospectus delivery
requirements of the Securities Act, including all Participating Broker-Dealers,
in connection with the sale or transfer of the Exchange Securities covered by
the Prospectus or any amendment or supplement thereto), (iii) use its best
efforts to keep the Exchange Offer Registration Statement effective and to amend
and supplement the Prospectus contained therein in order to permit such
Prospectus to be lawfully delivered by all Persons subject to the prospectus
delivery requirements of the Securities Act for such period of time as such
Persons must comply with such requirements under the Securities Act and
applicable rules and regulations in order to resell the Exchange Securities;
provided, however, that such period shall not be required to exceed 90 days (or
such longer period if extended pursuant to the last sentence of Section 3
hereof) (the "Applicable Period"), and (iv) include in the transmittal letter or
similar documentation to be executed by an exchange offeree in order to
participate in the Exchange Offer (x) the following provision:
"If the exchange offeree is a broker-dealer holding
Registrable Securities acquired for its own account as a
result of market making activities or other trading
activities, it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any
resale of Exchange Securities received in respect of such
Registrable Securities pursuant to the Exchange Offer";
and (y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus in
connection with the exchange of Registrable Securities, the broker-dealer will
not be deemed to admit that it is an underwriter within the meaning of the
Securities Act; and
(B) in the case of any Exchange Offer Registration Statement,
the Corporation and the Trust agree to deliver to the Initial Purchaser or to
another representative of the Participating Broker-Dealers, if requested by any
such Initial Purchaser or such other representative of the Participating
Broker-Dealers, on behalf of the Participating Broker-Dealers upon consummation
of the Exchange Offer (i) an opinion of counsel (who may be an employee of the
Corporation) in form and substance reasonably satisfactory to the Initial
Purchaser or such other representative of the Participating Broker-Dealers,
covering the matters customarily covered in opinions requested in connection
with Exchange Offer Registration Statements and such other matters as may be
reasonably requested (it being agreed that the matters to be covered by such
opinion may be subject to customary qualifications and exceptions) and (ii) an
officers' certificate containing certifications substantially similar to those
set forth in Section 5(g) of the Purchase Agreement and such additional
certifications as are customarily delivered in a public offering of debt
securities.
The Corporation or the Trust may require each seller of Registrable
Securities as to which any registration is being effected to furnish to the
Corporation or the Trust, as applicable, such information regarding such seller
as may be required by the staff of the SEC to be included in a Registration
Statement. The Corporation or the Trust may exclude from such registration the
Registrable Securities of any seller who unreasonably fails to furnish such
information within a reasonable time after receiving such request. The
Corporation shall have no obligation to register under the Securities Act the
Registrable Securities of a seller who so fails to furnish such information.
In the case of (1) a Shelf Registration Statement or (2)
Participating Broker-Dealers who have notified the Corporation and the Trust
that they will be utilizing the Prospectus contained in the Exchange Offer
Registration Statement as provided in Section 3(t) hereof, are seeking to sell
Exchange Securities and are required to deliver Prospectuses each Holder agrees
that, upon receipt of any notice from the Corporation or the Trust of the
happening of any event of the kind described in Section 3(e)(ii), 3(e)(iii),
3(e)(v) or 3(e)(vi) hereof, such Holder will forthwith discontinue disposition
of Registrable Securities pursuant to a Registration Statement until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(i) hereof or until it is advised in writing (the
"Advice") by the Corporation and the Trust that the use of the applicable
Prospectus may be resumed, and, if so directed by the Corporation and the Trust,
such Holder will deliver to the Corporation or the Trust (at the Corporation's
or the Trust's expense, as the case requires) all copies in such Holder's
possession, other than permanent file copies then in such Holder's possession,
of the Prospectus covering such Registrable Securities or Exchange Securities,
as the case may be, current at the time of receipt of such notice. If the
Corporation or the Trust shall give any such notice to suspend the disposition
of Registrable Securities or Exchange Securities, as the case may be, pursuant
to a Registration Statement, the Corporation and the Trust shall use their best
efforts to file and have declared effective (if an amendment) as soon as
practicable an amendment or supplement to the Registration Statement and shall
extend the period during which such Registration Statement shall be maintained
effective pursuant to this Agreement by the number of days in the period from
and including the date of the giving of such notice to and including the date
when the Corporation and the Trust shall have made available to the Holders (x)
copies of the supplemented or amended Prospectus necessary to resume such
dispositions or (y) the Advice.
4. Indemnification and Contribution.
(a) In connection with any Registration Statement, the
Corporation and the Trust shall, jointly and severally, indemnify and hold
harmless each Initial Purchaser, each Holder, each underwriter who participates
in an offering of the Registrable Securities, each Participating Broker-Dealer,
each Person, if any, who controls any of such parties within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act and each of
their respective directors, officers, employees and agents, as follows:
(i) from and against any and all loss, liability,
claim, damage and expense whatsoever, joint or several, as
incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any
Registration Statement (or any amendment thereto), covering
Registrable Securities or Exchange Securities, including all
documents incorporated therein by reference, or the omission
or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein
not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any
Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading;
(ii) from and against any and all loss, liability,
claim, damage and expense whatsoever, joint or several, as
incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or
proceeding by any court or governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged
untrue statement or omission, if such settlement is effected
with the prior written consent of the Corporation; and
(iii) from and against any and all expenses
whatsoever, as incurred (including reasonable fees and
disbursements of counsel chosen by such Holder, such
Participating Broker-Dealer, or any underwriter (except to the
extent otherwise expressly provided in Section 4(c) hereof)),
reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by
any court or governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid
under subparagraph (i) or (ii) of this Section 4(a); provided,
however, that (i) this indemnity does not apply to any loss,
liability, claim, damage or expense to the extent arising out
of an untrue statement or omission or alleged untrue statement
or omission made in reliance upon and in conformity with
written information furnished in writing to the Corporation or
the Trust by such Holder, such Participating Broker-Dealer or
any underwriter with respect to such Holder, Participating
Broker-Dealer or any underwriter, as the case may be,
expressly for use in the Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or
supplement thereto) and (ii) the Corporation and the Trust
shall not be liable to any such Holder, Participating
Broker-Dealer, any underwriter or controlling person, with
respect to any untrue statement or alleged untrue statement or
omission or alleged omission in any preliminary Prospectus to
the extent that any such loss, liability, claim, damage or
expense of any Holder, Participating Broker-Dealer, any
underwriter or controlling person results from the fact that
such Holder, any underwriter or Participating Broker-Dealer
sold Securities to a person to whom there was not sent or
given, at or prior to the written confirmation of such sale, a
copy of the final Prospectus as then amended or supplemented
if the Corporation had previously furnished copies thereof to
such Holder, underwriter or Participating Broker-Dealer and
the loss, liability, claim, damage or expense of such Holder,
underwriter, Participating Broker-Dealer or controlling person
results from an untrue statement or omission of a material
fact contained in the preliminary Prospectus which was
corrected in the final Prospectus. Any amounts advanced by the
Corporation or the Trust to an indemnified party pursuant to
this Section 4 as a result of such losses shall be returned to
the Corporation or the Trust if it shall be finally determined
by such a court in a judgment not subject to appeal or final
review that such indemnified party was not entitled to
indemnification by the Corporation or the Trust.
(b) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Corporation, the Trust, any underwriter and the
other selling Holders and each of their respective directors, officers
(including each officer of the Corporation and the Trust who signed the
Registration Statement), employees and agents and each Person, if any, who
controls the Corporation, the Trust, any underwriter or any other selling Holder
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all loss, liability, claim, damage and
expense whatsoever described in the indemnity contained in Section 4(a) hereof,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Corporation or the Trust by such selling Holder with respect to such Holder
expressly for use in the Registration Statement (or any amendment thereto), or
any such Prospectus (or any amendment or supplement thereto); provided, however,
that, in the case of Shelf Registration Statement, no such Holder shall be
liable for any claims hereunder in excess of the amount of net proceeds received
by such Holder from the sale of Registrable Securities pursuant to such Shelf
Registration Statement.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, enclosing a copy of all papers properly
served on such indemnified party, but failure to so notify an indemnifying party
shall not relieve such indemnifying party from any liability which it may have
under this Section 4, except to the extent that it is materially prejudiced by
such failure. An indemnifying party may participate at its own expense in the
defense of such action. If an indemnifying party so elects within a reasonable
time after receipt of such notice, an indemnifying party, severally or jointly
with any other indemnifying parties receiving such notice, may assume the
defense of such action with counsel chosen by it and reasonably acceptable to
the indemnified parties defendant in such action, provided, however, that if (i)
representation of such indemnified party by the same counsel would present a
conflict of interest or (ii) the actual or potential defendants in, or targets
of, any such action include both the indemnified party and the indemnifying
party and any such indemnified party reasonably determines that there may be
legal defenses available to such indemnified party which are different from or
in addition to those available to such indemnifying party, then in the case of
clauses (i) and (ii) of this Section 4(c) such indemnifying party and counsel
for each indemnifying party or parties shall not be entitled to assume such
defense. If an indemnifying party is not entitled to assume the defense of such
action as a result of the proviso to the preceding sentence, counsel for such
indemnifying party and counsel for each indemnified party or parties shall be
entitled to conduct the defense of such indemnified party or parties. If an
indemnifying party assumes the defense of such action, in accordance with and as
permitted by the provisions of this paragraph, such indemnifying parties shall
not be liable for any fees and expenses of counsel for the indemnified parties
incurred thereafter in connection with such action. In no event shall the
indemnifying parties be liable for the fees and expenses of more than one
counsel (in addition to local counsel), separate from its own counsel, for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 4 (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional written release in form and substance
satisfactory to the indemnified parties of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) Notwithstanding the last sentence of Section 4(c), if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for reasonable fees and expenses of counsel
pursuant to Section 4(a)(iii) above, such indemnifying party agrees that it
shall be liable for any settlement effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement; provided that an indemnifying party shall not be
liable for any such settlement effected without its consent if such indemnifying
party (1) reimburses such indemnified party in accordance with such request to
the extent it considers reasonable and (2) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement.
(e) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 4 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Corporation, the Trust,
and the Holders shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity agreement
incurred by the Corporation, the Trust, and the Holders, as incurred; provided
that no Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any Person
that was not guilty of such fraudulent misrepresentation. As between the
Corporation, the Trust, and the Holders, such parties shall contribute to such
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement in such proportion as shall be
appropriate to reflect the relative fault of the Corporation and Trust, on the
one hand, and the Holders, on the other hand, with respect to the statements or
omissions which resulted in such loss, liability, claim, damage or expense, or
action in respect thereof, as well as any other relevant equitable
considerations. The relative fault of the Corporation and the Trust, on the one
hand, and of the Holders, on the other hand, 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 Corporation or the Trust, on the one
hand, or by or on behalf of the Holders, on the other, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Corporation, the Trust and the Holders of the
Registrable Securities agree that it would not be just and equitable if
contribution pursuant to this Section 4 were to be determined by pro rata
allocation or by any other method of allocation that does not take into account
the relevant equitable considerations. For purposes of this Section 4, each
affiliate of a Holder, and each director, officer, employee, agent and Person,
if any, who controls a Holder or such affiliate within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as such Holder, and each director of each of the
Corporation or the Trust, each officer of each of the Corporation or the Trust
who signed the Registration Statement, and each Person, if any, who controls
each of the Corporation and the Trust within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as each of the Corporation or the Trust.
5. Participation in Underwritten Registrations. No Holder may
participate in any underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's Registrable Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements, lockup letters and
other documents reasonably required under the terms of such underwriting
arrangements.
6. Selection of Underwriters. The Holders of Registrable Securities
covered by the Shelf Registration Statement who desire to do so may sell the
securities covered by such Shelf Registration in an underwritten offering. In
any such underwritten offering, the underwriter or underwriters and manager or
managers that will administer the offering will be selected by the Holders of a
majority in aggregate principal amount of the Registrable Securities included in
such offering; provided, however, that such underwriters and managers must be
reasonably satisfactory to the Corporation and the Trust.
7. Miscellaneous.
(a) Rule 144 and Rule 144A. For so long as the Corporation or
the Trust is subject to the reporting requirements of Section 13 or 15 of the
Exchange Act and any Registrable Securities remain outstanding, the Corporation
and the Trust, as the case may be, will their its best efforts to file the
reports required to be filed by it under the Securities Act and Section 13(a) or
15(d) of the Exchange Act and the rules and regulations adopted by the SEC
thereunder, that if it ceases to be so required to file such reports, it will,
upon the request of any Holder of Registrable Securities (a) make publicly
available such information as is necessary to permit sales of their securities
pursuant to Rule 144 under the Securities Act, (b) deliver such information to a
prospective purchaser as is necessary to permit sales of their securities
pursuant to Rule 144A under the Securities Act and it will take such further
action as any Holder of Registrable Securities may reasonably request, and (c)
take such further action that is reasonable in the circumstances, in each case,
to the extent required from time to time to enable such Holder to sell its
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (i) Rule 144 under the Securities Act,
as such rule may be amended from time to time, (ii) Rule 144A under the
Securities Act, as such rule may be amended from time to time, or (iii) any
similar rules or regulations hereafter adopted by the SEC. Upon the request of
any Holder of Registrable Securities, the Corporation and the Trusts will
deliver to such Holder a written statement as to whether it has complied with
such requirements.
(b) No Inconsistent Agreements. Except as set forth in the
Declaration or the Indenture, the Corporation or the Trust has not entered into
nor will the Corporation or the Trust on or after the date of this Agreement
enter into any agreement which is inconsistent with the rights granted to the
Holders of Registrable Securities in this Agreement or otherwise conflicts with
the provisions hereof. The rights granted to the Holders hereunder do not in any
way conflict with and are not inconsistent with the rights granted to the
holders of the Corporation's or the Trust's other issued and outstanding
securities under any such agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Corporation and the Trust has obtained the written
consent of Holders of at least a majority in aggregate principal amount of the
outstanding Registrable Securities affected by such amendment, modification,
supplement, waiver or departure; provided no amendment, modification or
supplement or waiver or consent to the departure with respect to the provisions
of Section 4 hereof shall be effective as against any Holder of Registrable
Securities unless consented to in writing by such Holder of Registrable
Securities. Notwithstanding the foregoing sentence, (i) this Agreement may be
amended, without the consent of any Holder of Registrable Securities, by written
agreement signed by the Corporation, the Trust and the Initial Purchaser to cure
any ambiguity, correct or supplement any provision of this Agreement that may be
inconsistent with any other provision of this Agreement or to make any other
provisions with respect to matters or questions arising under this Agreement,
the Declaration or the Indenture which shall not be inconsistent with other
provisions of this Agreement, (ii) this Agreement may be amended, modified or
supplemented, and waivers and consents to departures from the provisions hereof
may be given, by written agreement signed by the Corporation, the Trust and the
Initial Purchaser to the extent that any such amendment, modification,
supplement, waiver or consent is, in their reasonable judgment, necessary or
appropriate to comply with applicable law (including any interpretation of the
Staff of the SEC) or any change therein and (iii) to the extent any provision of
this Agreement relates to the Initial Purchaser, such provision may be amended,
modified or supplemented, and waivers or consents to departures from such
provisions may be given, by written agreement signed by the Initial Purchaser
the Corporation and the Trust.
(d) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Corporation or the Trust by means of a notice given in accordance with the
provisions of this Section 7(d), which address initially is, with respect to the
Initial Purchaser, the address set forth in the Purchase Agreement; and (ii) if
to the Corporation or the Trust, initially at the Corporation's address set
forth in the Purchase Agreement and thereafter at such other address, notice of
which is given in accordance with the provisions of this Section 7(d).
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications
shall be concurrently delivered by the Person giving the same to the Trustee, at
the address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of the
Initial Purchaser, including, without limitation and without the need for an
express assignment, subsequent Holders; provided, however, that nothing herein
shall be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the Purchase Agreement or
the Indenture. If any transferee of any Holder shall acquire Registrable
Securities, in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities, such Person
shall be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof.
(f) Third Party Beneficiary. The Initial Purchaser shall be a
third party beneficiary of the agreements made hereunder between the Corporation
and the Trust, on the one hand, and the Holders, on the other hand, and shall
have the right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN
MADE IN THE STATE OF NEW YORK. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS. EACH OF THE
PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(k) Securities Held by the Corporation, the Trust or its
Affiliates. Whenever the consent or approval of Holders of a specified
percentage of Registrable Securities is required hereunder, Registrable
Securities held by the Corporation, the Trust or its affiliates (as such term is
defined in Rule 405 under the Securities Act) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
HUBCO, Inc.
D. LYNN VAN BORKULO-NUZZO
By:------------------------------------------
D. Lynn Van Borkulo-Nuzzo
Executive Vice President and
Corporate Secretary
HUBCO Capital Trust II
D. LYNN VAN BORKULO-NUZZO
By:-----------------------------------------
D. Lynn Van Borkulo-Nuzzo
Administrative Trustee
CONFIRMED AND ACCEPTED, as of the date first above written:
KEEFE, BRUYETTE & WOODS, INC.
JOSEPH LENIHAN
By:-------------------------------
Name: Joseph Lenihan
Title: Senior Vice President
Exhibit 12.1
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges is computed by dividing the sum of income
before taxes and fixed charges by the sum of fixed charges. Fixed charges
represent interest expenses (including interest attributable to capital leases,
the estimated interest component of operating lease rental payments and both
excluding and including interests on deposits).
Exhibit 12.2
COMPUTATION OF RATIOS OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The ratio of earnings to fixed charges is computed by dividing the sum of income
before taxes and fixed charges by the sum of fixed charges. Fixed charges
represent interest expenses (including interest attributable to capital leases,
the estimated interest component of operating lease rental payments and both
excluding and including interests on deposits).
The computation of the ratios of earnings to fixed charges does not reflect
dividends which have been declared by the Corporation's Board of Directors and
paid to holders of HUBCO's existing Series B convertible preferred stock;
because such dividends have been, and are expected to remain, immaterial.
Exhibit 23.1
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
We have audited the accompanying supplemental consolidated balance sheets of
Hubco, Inc. (a New Jersey corporation) and subsidiaries as of December 31, 1997
and 1996, and the related supplemental consolidated statements of income,
changes in stockholders' equity, and cash flows for each of the three years in
the period ended December 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evience supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statments referred to above present fairly, in all
material respects, the financial position of Hubco, Inc. and subsidiaries as of
December 31, 1997 and 1996, and the results of their operations and their cash
flows for the each of the three years in the period ended December 31, 1997 in
conformity with generally accepted accounting principals.
ARTHUR ANDERSEN LLP
Roseland, New Jersey
September 28, 1998
Exhibit 23.2
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Registration Statement on
Form S-4 of our report dated January 23, 1998 relating to the financial
statements of Poughkeepsie Financial Corp., appearing in Amendment No. 1 to the
Annual Report on Form 10-K/A of HUBCO, Inc. dated August 14, 1998
DELOITTE & TOUCHE LLP
Stamford, Connecticut
September 28, 1998
Exhibit 23.3
INDEPENDENT ACCOUNTANTS' CONSENT
The Board of Directors
HUBCO, Inc.
We consent to incorporation by reference in the Registration Statement on Form
S-4, of our report dated January 27, 1998, relating to the consolidated balance
sheets of MSB Bancorp, Inc. and Subsidiaries as of December 31, 1997 and 1996,
and the related conslidated statements of income, changes in stockholders'
equity, and cash flows for the years then ended, which report appears in the
10-K/A dated August 14, 1998, filed by HUBCO, Inc.
KPMG PEAT MARWICK LLP
Short Hills, New Jersey
September 28, 1998
Exhibit 24
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this Power
of Attorney has been signed by the following persons in the capacities and on
the dates indicated. By so signing, each of the undersigned, in his or her
capacity as a director or officer, or both, as the case may be, of HUBCO, Inc.
(the "Corporation"), does hereby appoint Kenneth T. Neilson and D. Lynn Van
Borkulo-Nuzzo his or her true and lawful attorney to execute in his or her name,
place and stead, in his or her capacity as a director or officer or both, as the
case may be, of the Corporation, the Registration Statement on Form S-4 to be
filed with the Securities and Exchange Commission (the "Commission"), and any
and all amendments to said Registration Statement and all instruments necessary
or incidental in connection therewith, and to file the same with the Commission.
Said attorney shall have full power and authority to do and perform in the name
and on behalf of each of the undersigned, in any and all capacities, every act
whatsoever requisite or necessary to be done in the premises as fully and to all
intents and purposes as each of the undersigned might or could do in person,
hereby ratifying and approving the acts of said attorney.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
KENNETH T. NEILSON Chairman, President, Chief Executive September 29, 1998
- ---------------------------------- Officer and Director (Principal Executive
(Kenneth T. Neilson) Officer)
ROBERT J. BURKE
- ---------------------------------- Director September 29, 1998
(Robert J. Burke)
DONALD P. CALCAGNINI Director September 29, 1998
- ----------------------------------
(Donald P. Calcagnini)
JOAN DAVID Director September 29, 1998
- ----------------------------------
(Joan David)
Director _________________, 1998
- ----------------------------------
(Thomas R. Farley)
BRYANT MALCOLM Director September 29, 1998
- ----------------------------------
(Bryant Malcolm)
W. PETER McBRIDE
- ---------------------------------- Director September 29, 1998
(W. Peter McBride)
Director _________________, 1998
- ----------------------------------
(Charles F.X. Poggi)
DAVID A. ROSOW Director September 29, 1998
- ----------------------------------
(David A. Rosow)
Director _________________, 1998
- ----------------------------------
(James E. Schierloh)
Director _________________, 1998
- ----------------------------------
(John Tatigian)
_________________, 1998
Director
- ----------------------------------
(Sister Grace Frances Strauber)
<PAGE>
NOEL deCORDOVA Director September 28, 1998
- ----------------------------------
(Noel deCordova)
JOSEPH B. TOCKARSHEWSKY Director September 28, 1998
- ----------------------------------
(Joseph B. Tockarshewsky)
- ---------------------------------- Director _________________, 1998
(William C. Myers)
JOSEPH F. HURLEY
- ---------------------------------- Executive Vice President
(Joseph F. Hurley) and Chief Financial Officer September 29, 1998
CHRIS A. WITKOWSKI Senior Vice President and Controller September 29, 1998
- ----------------------------------
(Chris A. Witkowski)
</TABLE>
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y.10286
(Address of principal executive offices) (Zip code)
HUBCO, INC.
(Exact name of obligor as specified in its charter)
New Jersey 22-2405746
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1000 MacArthur Boulevard
Mahwah, New Jersey 07430
(Address of principal executive offices) (Zip code)
----------------------
Series B Junior Subordinated Deferrable Interest Debentures
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No.
33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 17th day of September, 1998.
THE BANK OF NEW YORK
By: /S/ MARY JANE SCHMALZEL
----------------------------
Name: MARY JANE SCHMALZEL
Title: VICE PRESIDENT
<PAGE>
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 1998,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
<S> <C>
ASSETS in Thousands Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................. $ 6,397,993
Interest-bearing balances .......... 1,138,362
Securities:
Held-to-maturity securities ........ 1,062,074
Available-for-sale securities ...... 4,167,240
Federal funds sold and Securities purchased
under agreements to resell... 391,650
Loans and lease financing receivables:
Loans and leases, net of unearned income .......................... 36,538,242
LESS: Allowance for loan and lease losses .................... 631,725
LESS: Allocated transfer risk reserve.......................... 0
Loans and leases, net of unearned
income, allowance, and reserve 35,906,517
Assets held in trading accounts ...... 2,145,149
Premises and fixed assets (including
capitalized leases) ................ 663,928
Other real estate owned .............. 10,895
Investments in unconsolidated
subsidiaries and associated companies .......................... 237,991
Customers' liability to this bank on
acceptances outstanding ............ 992,747
Intangible assets .................... 1,072,517
Other assets ......................... 1,643,173
-----------
Total assets ......................... $55,830,236
===========
LIABILITIES
Deposits:
In domestic offices ................ $24,849,054
Noninterest-bearing ...... 10,011,422
Interest-bearing ......... 14,837,632
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 15,319,002
Noninterest-bearing ......... 707,820
Interest-bearing ......... 14,611,182
Federal funds purchased and Securities
sold under agreements to repurchase. 1,906,066
Demand notes issued to the U.S.
Treasury ........................... 215,985
Trading liabilities .................. 1,591,288
Other borrowed money:
With remaining maturity of one year
or less .......................... 1,991,119
With remaining maturity of more than
one year through three years...... 0
With remaining maturity of more than
three years ...................... 25,574
Bank's liability on acceptances exe-
cuted and outstanding .............. 998,145
Subordinated notes and debentures .... 1,314,000
Other liabilities .................... 2,421,281
-----------
Total liabilities .................... 50,631,514
-----------
EQUITY CAPITAL
Common stock ......................... 1,135,284
Surplus .............................. 731,319
Undivided profits and capital
reserves ........................... 3,328,050
Net unrealized holding gains
(losses) on available-for-sale
securities ......................... 40,198
Cumulative foreign currency transla-
tion adjustments ................... (36,129)
------------
Total equity capital ................. 5,198,722
------------
Total liabilities and equity
capital ............................ $55,830,236
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Renyi (3)
Alan R. Griffith (3) Directors
J. Carter Bacot (3)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified
in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
HUBCO CAPITAL TRUST II
(Exact name of obligor as specified in its charter)
Delaware
(State or other jurisdiction of(I.R.S. employer
incorporation or organization)identification no.)
1000 MacArthur Boulevard
Mahwah, New Jersey 07430
(Address of principal executive offices) (Zip code)
----------------------
Series B Capital Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17
C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 17th day of September, 1998.
THE BANK OF NEW YORK
By: /S/ MARY JANE SCHMALZEL
--------------------------
Name: MARY JANE SCHMALZEL
Title: VICE PRESIDENT
<PAGE>
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 1998,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
<S> <C>
ASSETS in Thousands Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................. $ 6,397,993
Interest-bearing balances .......... 1,138,362
Securities:
Held-to-maturity securities ........ 1,062,074
Available-for-sale securities ...... 4,167,240
Federal funds sold and Securities purchased
under agreements to resell... 391,650
Loans and lease financing receivables:
Loans and leases, net of unearned income .......................... 36,538,242
LESS: Allowance for loan and lease losses .................... 631,725
LESS: Allocated transfer risk reserve.......................... 0
Loans and leases, net of unearned
income, allowance, and reserve 35,906,517
Assets held in trading accounts ...... 2,145,149
Premises and fixed assets (including
capitalized leases) ................ 663,928
Other real estate owned .............. 10,895
Investments in unconsolidated
subsidiaries and associated companies .......................... 237,991
Customers' liability to this bank on
acceptances outstanding ............ 992,747
Intangible assets .................... 1,072,517
Other assets ......................... 1,643,173
-----------
Total assets ......................... $55,830,236
===========
LIABILITIES
Deposits:
In domestic offices ................ $24,849,054
Noninterest-bearing ...... 10,011,422
Interest-bearing ......... 14,837,632
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 15,319,002
Noninterest-bearing ......... 707,820
Interest-bearing ......... 14,611,182
Federal funds purchased and Securities
sold under agreements to repurchase. 1,906,066
Demand notes issued to the U.S.
Treasury ........................... 215,985
Trading liabilities .................. 1,591,288
Other borrowed money:
With remaining maturity of one year
or less .......................... 1,991,119
With remaining maturity of more than
one year through three years...... 0
With remaining maturity of more than
three years ...................... 25,574
Bank's liability on acceptances exe-
cuted and outstanding .............. 998,145
Subordinated notes and debentures .... 1,314,000
Other liabilities .................... 2,421,281
-----------
Total liabilities .................... 50,631,514
-----------
EQUITY CAPITAL
Common stock ......................... 1,135,284
Surplus .............................. 731,319
Undivided profits and capital
reserves ........................... 3,328,050
Net unrealized holding gains
(losses) on available-for-sale
securities ......................... 40,198
Cumulative foreign currency transla-
tion adjustments ................... (36,129)
------------
Total equity capital ................. 5,198,722
------------
Total liabilities and equity
capital ............................ $55,830,236
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Renyi (3)
Alan R. Griffith (3) Directors
J. Carter Bacot (3)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y.10286
(Address of principal executive offices) (Zip code)
HUBCO, INC.
(Exact name of obligor as specified in its charter)
New Jersey 22-2405746
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1000 MacArthur Boulevard
Mahwah, New Jersey 07430
(Address of principal executive offices) (Zip code)
----------------------
Guarantee of Series B Capital Securities of
HUBCO Capital Trust II
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17
C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 17th day of September, 1998.
THE BANK OF NEW YORK
By: /S/ MARY JANE SCHMALZEL
---------------------------
Name: MARY JANE SCHMALZEL
Title: VICE PRESIDENT
<PAGE>
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 1998,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
<S> <C>
ASSETS in Thousands Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................. $ 6,397,993
Interest-bearing balances .......... 1,138,362
Securities:
Held-to-maturity securities ........ 1,062,074
Available-for-sale securities ...... 4,167,240
Federal funds sold and Securities purchased
under agreements to resell... 391,650
Loans and lease financing receivables:
Loans and leases, net of unearned income .......................... 36,538,242
LESS: Allowance for loan and lease losses .................... 631,725
LESS: Allocated transfer risk reserve.......................... 0
Loans and leases, net of unearned
income, allowance, and reserve 35,906,517
Assets held in trading accounts ...... 2,145,149
Premises and fixed assets (including
capitalized leases) ................ 663,928
Other real estate owned .............. 10,895
Investments in unconsolidated
subsidiaries and associated companies .......................... 237,991
Customers' liability to this bank on
acceptances outstanding ............ 992,747
Intangible assets .................... 1,072,517
Other assets ......................... 1,643,173
-----------
Total assets ......................... $55,830,236
===========
LIABILITIES
Deposits:
In domestic offices ................ $24,849,054
Noninterest-bearing ...... 10,011,422
Interest-bearing ......... 14,837,632
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 15,319,002
Noninterest-bearing ......... 707,820
Interest-bearing ......... 14,611,182
Federal funds purchased and Securities
sold under agreements to repurchase. 1,906,066
Demand notes issued to the U.S.
Treasury ........................... 215,985
Trading liabilities .................. 1,591,288
Other borrowed money:
With remaining maturity of one year
or less .......................... 1,991,119
With remaining maturity of more than
one year through three years...... 0
With remaining maturity of more than
three years ...................... 25,574
Bank's liability on acceptances exe-
cuted and outstanding .............. 998,145
Subordinated notes and debentures .... 1,314,000
Other liabilities .................... 2,421,281
-----------
Total liabilities .................... 50,631,514
-----------
EQUITY CAPITAL
Common stock ......................... 1,135,284
Surplus .............................. 731,319
Undivided profits and capital
reserves ........................... 3,328,050
Net unrealized holding gains
(losses) on available-for-sale
securities ......................... 40,198
Cumulative foreign currency transla-
tion adjustments ................... (36,129)
------------
Total equity capital ................. 5,198,722
------------
Total liabilities and equity
capital ............................ $55,830,236
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Renyi (3)
Alan R. Griffith (3) Directors
J. Carter Bacot (3)
