<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 14, 1998
REGISTRATION NO. 333-50651
333-50651-01
333-50651-02
333-50651-03
333-50651-04
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C> <C>
PNC BANK CORP.............................. PENNSYLVANIA 25-1435979
PNC CAPITAL TRUST C........................ DELAWARE 25-6576726
PNC CAPITAL TRUST D........................ DELAWARE 25-6576727
PNC CAPITAL TRUST E........................ DELAWARE 25-6576728
PNC CAPITAL TRUST F........................ DELAWARE 25-6576729
(Exact name of each Registrant as specified (State or other jurisdiction of (I.R.S. Employer
in its charter) incorporation or organization) Identification No.)
</TABLE>
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249 Fifth Avenue
Pittsburgh, Pennsylvania 15222
(412) 762-1533
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
Robert L. Haunschild
Senior Vice President and Chief Financial Officer
PNC Bank Corp.
249 Fifth Avenue
Pittsburgh, PA 15222
(412) 762-5770
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE OF PROCESS)
Copy To:
Steven Kaplan, Esq.
Arnold & Porter
555 Twelfth Street, N.W.
Washington, D.C. 20004
(202) 942-5998
Approximate date of commencement of Proposed Sale to the Public: From time
to time after the effective date of this Registration Statement, as determined
in light of market conditions.
If only the securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are being offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [ X ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement under the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement under number of the earlier effective registration
statement for the same offering. [ ]
If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE OF SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
PROSPECTUS
PNC BANK LOGO
PNC CAPITAL TRUST C
PNC CAPITAL TRUST D
PNC CAPITAL TRUST E
PNC CAPITAL TRUST F
CAPITAL SECURITIES
FULLY AND UNCONDITIONALLY GUARANTEED, TO THE EXTENT DESCRIBED HEREIN, BY
PNC BANK CORP.
PNC Bank Corp., a Pennsylvania corporation (the "Corporation"), may from
time to time offer in one or more series or issuances its junior subordinated
deferrable interest debentures (the "Junior Subordinated Debentures"). The
Junior Subordinated Debentures will be unsecured and subordinate and junior in
right of payment to Senior Indebtedness (as defined in "Description of Junior
Subordinated Debentures -- Subordination") of the Corporation. As provided in an
accompanying Prospectus Supplement, the Corporation will have the right to defer
payments of interest on any series of Junior Subordinated Debentures by
extending the interest payment period thereon at any time or from time to time
for up to such number of consecutive interest payment periods (which shall not
extend beyond the Stated Maturity (as defined herein) of the Junior Subordinated
Debentures) with respect to each deferral period as may be specified in such
Prospectus Supplement (each, an "Extension Period"). In such circumstance,
however, the Corporation would not be permitted, subject to certain exceptions
set forth herein, to declare or pay any dividends, distributions or other
payments with respect to, or repay, repurchase, redeem or otherwise acquire, the
Corporation's capital stock or debt securities that rank pari passu with or
junior to such series of Junior Subordinated Debentures. See "Description of
Junior Subordinated Debentures -- Option to Defer Interest Payments" and "--
Restrictions on Certain Payments."
PNC Capital Trust C, PNC Capital Trust D, PNC Capital Trust E and PNC
Capital Trust F (each, an "Issuer Trust"), each a statutory business trust
formed under the laws of the State of Delaware, may severally offer, from time
to time, preferred securities (the "Capital Securities") representing preferred
beneficial ownership interests in such Issuer Trust. The Corporation will be the
owner of the common securities (the "Common Securities" and, together with the
Capital Securities, the "Trust Securities") representing common beneficial
ownership interests in such Issuer Trust. Holders of the Capital Securities will
be entitled to receive preferential cumulative cash distributions
("Distributions") accumulating from the date of original issuance and payable
periodically as specified in an accompanying Prospectus Supplement.
Concurrently with the issuance by an Issuer Trust of its Capital Securities,
such Issuer Trust will invest the proceeds thereof and of contributions received
in respect of the Common Securities in a corresponding series of the
Corporation's Junior Subordinated Debentures (the "Corresponding Junior
Subordinated Debentures") with terms corresponding to the terms of that Issuer
Trust's Capital Securities (the "Related Capital Securities"). Accordingly, if,
as provided in an accompanying Prospectus Supplement, the Corporation has the
right to defer the payment of interest on a series of Corresponding Junior
Subordinated Debentures, then, if interest payments are so deferred,
Distributions on the Related Capital Securities would also be deferred, but
would continue to accumulate at the rate per annum set forth in the related
Prospectus Supplement. See "Description of Capital Securities -- Distributions."
Taken together, the Corporation's obligations under each series of
Corresponding Junior Subordinated Debentures, the Indenture, the related Trust
Agreement and the related Guarantee (each, as defined herein), in the aggregate,
will provide a full, irrevocable and unconditional guarantee of payments of
Distributions and other amounts due on the Related Capital Securities. See
"Relationship Among the Capital Securities, the Corresponding Junior
Subordinated Debentures and the Guarantees -- Full and Unconditional Guarantee."
The payment of Distributions with respect to the Capital Securities of each
Issuer Trust and payments on liquidation of such Issuer Trust or redemption of
such Capital Securities, in each case out of funds held by such Issuer Trust,
will be irrevocably guaranteed by the Corporation to the extent described herein
(each a "Guarantee"). See "Description of Guarantees." The obligations of the
Corporation under each Guarantee will be unsecured and subordinate and junior in
right of payment to all Senior Indebtedness of the Corporation.
(Continued on next page)
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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 SECURITIES OFFERED HEREBY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
------------------------
THE DATE OF THIS PROSPECTUS IS MAY 15, 1998.
<PAGE> 3
(Cover page continued)
The Corresponding Junior Subordinated Debentures will be the sole assets of
each Issuer Trust, and payments under the Corresponding Junior Subordinated
Debentures will be the only revenue of each Issuer Trust. If so provided in an
accompanying Prospectus Supplement, the Corporation may, upon receipt of
approval of the Board of Governors of the Federal Reserve System (the "Federal
Reserve") (if such approval is then required under the Federal Reserve's
applicable capital guidelines or policies), redeem the Corresponding Junior
Subordinated Debentures (and thereby cause the redemption of the Trust
Securities) or may terminate each Issuer Trust and, after satisfaction of
liabilities to the creditors of such Issuer Trust as required by applicable law,
cause the Corresponding Junior Subordinated Debentures to be distributed to the
holders of Related Capital Securities in exchange therefor upon liquidation of
their interests in such Issuer Trust. See "Description of Capital Securities --
Liquidation Distribution Upon Termination."
The Junior Subordinated Debentures and Capital Securities may be offered in
amounts, at prices and on terms to be determined at the time of offering;
provided however, the aggregate initial public offering price of all Junior
Subordinated Debentures (other than Corresponding Junior Subordinated
Debentures) and Capital Securities (including the Corresponding Junior
Subordinated Debentures) issued pursuant to the Registration Statement of which
this Prospectus forms a part shall not exceed $600,000,000. Certain specific
terms of the Junior Subordinated Debentures or Capital Securities in respect of
which this Prospectus is being delivered will be described in an accompanying
Prospectus Supplement, including without limitation and where applicable and to
the extent not set forth herein, (a) in the case of Junior Subordinated
Debentures, the specific designation, aggregate principal amount, denominations,
Stated Maturity (including any provisions for the shortening or extension
thereof), interest payment dates, interest rate (which may be fixed or variable)
or method of calculating interest, if any, applicable Extension Period or
interest deferred terms, if any, place or places where principal, premium, if
any, and interest, if any, will be payable, any terms of redemption, any sinking
fund provisions, terms for any conversion or exchange into other securities,
initial offering or purchase price, methods of distribution and any other
special terms, and (b) in the case of Capital Securities, the identity of the
Issuer Trust, specific title, aggregate stated liquidation amount, number of
securities, Distribution rate or method of calculating such rate, Distribution
payment dates, applicable Distribution deferral terms, if any, place or places
where Distributions will be payable, any terms of redemption, exchange, initial
offering or purchase price, methods of distribution and any other special terms.
The Prospectus Supplement also will contain information, as applicable,
about certain United States federal income tax consequences relating to the
Junior Subordinated Debentures and the Capital Securities.
The Junior Subordinated Debentures and Capital Securities may be sold to or
through underwriters, through dealers, remarketing firms or agents or directly
to purchasers. See "Plan of Distribution." The names of any underwriters,
dealers, remarketing firms or agents involved in the sale of Junior Subordinated
Debentures or Capital Securities in respect of which this Prospectus is being
delivered and any applicable fee, commission or discount arrangements with them
will be set forth in a Prospectus Supplement. The Prospectus Supplement will
state whether the Junior Subordinated Debentures or Capital Securities will be
listed on any national securities exchange or automated quotation system. If the
Junior Subordinated Debentures or Capital Securities are not listed on any
national securities exchange or automated quotation system, there can be no
assurance that there will be a secondary market for the Junior Subordinated
Debentures or Capital Securities.
This Prospectus may not be used to consummate sales of Junior Subordinated
Debentures or Capital Securities unless accompanied by a Prospectus Supplement.
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 and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy statements and other
information filed by the Corporation with the Commission can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at its Regional Offices
located at Suite 1400, Citicorp Center, 500 West Madison Street, Chicago,
Illinois 60661 and at Seven World Trade Center, 13th Floor, New York, New York
10048, and copies of such material can be obtained
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<PAGE> 4
(Cover page continued)
from the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition, the Commission
maintains a World Wide Web site that contains reports, proxy statements and
other information regarding registrants that file electronically, such as the
Corporation. The address of the Commission's World Wide Web site is
http://www.sec.gov. Such reports, proxy statements and other information
concerning the Corporation may also be inspected at the offices of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005.
The Corporation and the Issuer Trusts have filed with the Commission a
Registration Statement on Form S-3 (together with all amendments and exhibits
thereto, the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities offered hereby.
This Prospectus does not contain all the information set forth in the
Registration Statement, certain portions of which have been omitted as permitted
by the rules and regulations of the Commission. For further information with
respect to the Corporation and the securities offered hereby, reference is made
to the Registration Statement and the exhibits and the financial statements,
notes and schedules filed as a part thereof or incorporated by reference
therein, which may be inspected at the public reference facilities of the
Commission at the addresses set forth above or through the Commission's home
page on the Internet. Statements made in this Prospectus concerning the contents
of any documents referred to herein are not necessarily complete, and in each
instance are qualified in all respects by reference to the copy of such document
filed as an exhibit to the Registration Statement.
No separate financial statements of any Issuer Trust have been included
herein. The Corporation and the Issuer Trusts do not consider that such
financial statements would be material to holders of the Capital Securities
because each Issuer 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 Junior Subordinated
Debentures as trust assets and issuing the Trust Securities. See "The Issuer
Trusts," "Description of Capital Securities," "Description of Junior
Subordinated Debentures" and "Description of Guarantees." In addition, the
Corporation does not expect that any of the Issuer Trusts will be filing reports
under the Exchange Act with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Corporation hereby incorporates by reference in this Prospectus its (i)
Annual Report on Form 10-K for the year ended December 31, 1997, and (ii)
Current Reports on Form 8-K filed on January 15, 1998 and April 14, 1998.
All documents filed by the Corporation pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date hereof and prior to the
termination of the offering of the securities offered hereby shall be deemed to
be incorporated by reference into this Prospectus and shall be deemed a part
hereof from the date of filing of such documents. Any statement contained in
this Prospectus or any accompanying Prospectus Supplement or in a document
incorporated or deemed to be incorporated by reference herein or therein shall
be deemed to be modified or superseded for purposes of this Prospectus or such
accompanying Prospectus Supplement to the extent that a statement contained
herein or therein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein or therein modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of the
Registration Statement or this Prospectus.
The Corporation will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of such
person, a copy of any or all of the documents incorporated by reference herein,
except for exhibits to such documents unless such exhibits are specifically
incorporated by reference into such documents. Written requests for any such
documents should be sent to: Michelle Sentnor, Assistant Vice President
Financial Reporting, PNC Bank Corp., One PNC Plaza, 249 Fifth Avenue,
Pittsburgh, Pennsylvania 15222 or [email protected] on the
Internet. Telephone requests may be directed to (412) 762-1553. The
Corporation's Exchange Act filings are also electronically available to the
public at its World Wide Web site at http://www.pncbank.com.
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PNC BANK CORP.
The Corporation is a bank holding company registered under the Bank Holding
Company Act of 1956, as amended (the "BHC Act"). The Corporation was
incorporated under the laws of the Commonwealth of Pennsylvania in 1983 with the
consolidation of Pittsburgh National Corporation and Provident National
Corporation. Since 1983, the Corporation has diversified its geographic presence
and product capabilities through strategic bank and nonbank acquisitions and the
formation of various nonbank subsidiaries.
The Corporation is one of the largest diversified financial service
companies in the United States. The Corporation operates through seven lines of
business: National Consumer Banking, Private Banking, Secured Lending, Corporate
Banking, Regional Community Banking, Mortgage Banking and Asset Management and
Servicing. Each line of business focuses on specific customer segments and
offers financial products and services in the Corporation's primary geographic
markets in Pennsylvania, New Jersey, Delaware, Ohio and Kentucky and nationally
through retail distribution networks and alternative delivery channels. At March
31, 1998, the Corporation's consolidated assets, loans (net of unearned income),
deposits, and shareholders' equity were $72.4 billion, $53.6 billion, $46.1
billion and $5.5 billion, respectively.
While the Corporation manages seven lines of business, the corporate legal
structure consists of 5 subsidiary banks and 111 nonbank subsidiaries. PNC Bank,
National Association, headquartered in Pittsburgh, Pennsylvania ("PNC Bank"), is
the Corporation's principal bank subsidiary. At December 31, 1997, PNC Bank had
total assets of $69.7 billion, representing approximately 93% of the
Corporation's consolidated assets.
The Corporation's principal executive offices are located at One PNC Plaza,
249 Fifth Avenue, Pittsburgh, Pennsylvania 15222, and its telephone number is
(412) 762-1553.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The following unaudited table presents the consolidated ratio of earnings
to fixed charges of the Corporation. The consolidated ratio of earnings to fixed
charges has been computed by dividing income before income taxes and cumulative
effect of changes in accounting principles and fixed charges by fixed charges.
Fixed charges represent all interest expense (ratios are presented both
excluding and including interest on deposits), the portion of net rental expense
which is deemed to be equivalent to interest on debt, borrowed funds discount
amortization expense and distributions on trust preferred capital securities.
Interest expense (other than on deposits) includes interest on bank notes and
senior debt, federal funds purchased, repurchase agreements, other borrowed
funds and subordinated debt.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED YEAR ENDED DECEMBER 31,
MARCH 31, ------------------------------------
1998 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Excluding interest on deposits........... 2.34x 2.38x 2.39x 1.42x 2.10x 2.62x
Including interest on deposits........... 1.61 1.62 1.60 1.21 1.53 1.67
</TABLE>
THE ISSUER TRUSTS
Each Issuer Trust is a statutory business trust formed under Delaware law
pursuant to (i) a trust agreement executed by the Corporation, as Depositor of
the Issuer Trust, and the Delaware Trustee and two Administrators (as defined
herein) of such Issuer Trust and (ii) the filing of a Certificate of Trust with
the Delaware Secretary of State on April 16, 1998. The trust agreement of each
Issuer Trust will be amended and restated in its entirety (each, as so amended
and restated, a "Trust Agreement") prior to the issuance of Capital Securities
by such Issuer Trust, substantially in the form filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. Two individuals
will be selected by the holders of the Common Securities of each Issuer Trust to
act as administrators with respect to such Issuer Trust (the "Administrators").
The Corporation, while holder of the Common Securities of each Issuer Trust,
intends to select two individuals who are employees or officers of or affiliated
with the Corporation to serve as the Administrators. Each Issuer Trust exists
for the exclusive purposes of (i) issuing and selling the Trust Securities, (ii)
investing the gross proceeds of such Trust Securities in a Series of
Corresponding Junior Subordinated Debentures and (iii) engaging in only those
other activities necessary, convenient or incidental thereto. Accordingly, the
Corresponding Junior Subordinated Debentures will be the sole
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assets of each Issuer Trust, and payments under the Corresponding Junior
Subordinated Debentures owned by an Issuer Trust will be the sole revenue of
such Issuer Trust.
All of the Common Securities of each Issuer Trust will be owned directly or
indirectly by the Corporation. The Common Securities of an Issuer Trust will
rank pari passu, and payments will be made thereon pro rata, with the Capital
Securities of such Issuer Trust, except that upon the occurrence and
continuation of a Debenture Event of Default (as defined herein) arising as a
result of any failure by the Corporation to pay any amounts in respect of the
Junior Subordinated Debentures owned by such Issuer Trust when due, the rights
of the Corporation as holder of the Common Securities to payment in respect of
Distributions and payments upon liquidation, redemption or otherwise will be
subordinated to the rights of the holders of the Capital Securities of such
Issuer Trust. See "Description of Capital Securities -- Subordination of Common
Securities." Unless otherwise specified in the applicable Prospectus Supplement,
the Corporation will, directly or indirectly, acquire Common Securities in an
aggregate liquidation amount equal to at least 3% of the total capital of each
Issuer Trust.
Unless otherwise specified in the applicable Prospectus Supplement, each
Issuer Trust will have a term of 55 years, but may dissolve earlier as provided
in the applicable Trust Agreement and described in the applicable Prospectus
Supplement. Unless otherwise specified in the applicable Prospectus Supplement,
the name and address of the Delaware Trustee for each Issuer Trust will be
Bankers Trust (Delaware), 1011 Centre Road, Suite 200, Wilmington, Delaware
19805, telephone number (302) 636-3305, and the name and address of the Property
Trustee, the Guarantee Trustee and the Debenture Trustee is Bankers Trust
Company, Four Albany Street, 4th Floor, New York, New York 10006, telephone
number (212) 250-2500. The Delaware Trustee and the Property Trustee are
collectively referred to herein as the "Issuer Trustees."
USE OF PROCEEDS
Each Issuer Trust will use all proceeds received from the sale of the
Capital Securities to purchase Corresponding Junior Subordinated Debentures from
the Corporation. Except as otherwise set forth in the applicable Prospectus
Supplement, the Corporation intends to use the proceeds from the sale of its
Junior Subordinated Debentures (including Corresponding Junior Subordinated
Debentures issued to the Issuer Trusts in connection with the investment by the
Issuer Trusts of all of the proceeds from the sale of Trust Securities) for
general corporate purposes, which may include the repayment of indebtedness,
repurchases of outstanding common stock of the Corporation, investments in or
extensions of credit to its subsidiaries and/or the financing of possible
acquisitions. Pending such use, the net proceeds may be temporarily invested.
The precise amounts and timing of the application of proceeds will depend upon
the funding requirements of the Corporation and its subsidiaries and the
availability of other funds. In view of anticipated funding requirements, the
Corporation may from time to time engage in additional financings of a character
and in amounts to be determined.
DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
Junior Subordinated Debentures may be issued from time to time in one or
more series under a Junior Subordinated Indenture, as supplemented from time to
time (the "Indenture"), to be entered into by the Corporation and Bankers Trust
Company, as trustee (the "Debenture Trustee"). The terms of such Junior
Subordinated Debentures will include those stated in the Indenture, the form of
which is filed as an exhibit to the Registration Statement of which this
Prospectus forms a part, and those made part of the Indenture by the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). The following
summary of certain terms of the Indenture does not purport to be complete and is
subject in all respects to the provisions of, and is qualified in its entirety
by reference to, the Indenture and the Trust Indenture Act.
Whenever particular provisions or defined terms in the Indenture are
referred to herein, such provisions or defined terms are incorporated by
reference herein.
GENERAL
Each series of Junior Subordinated Debentures will rank pari passu with all
other series of Junior Subordinated Debentures heretofore or hereafter issued
pursuant to the Indenture, and will be unsecured and subordinate and junior in
right of payment to the extent and in the manner set forth in the Indenture to
all Senior Indebtedness (as defined below) of the Corporation. See "--
Subordination." Because the Corporation is
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a holding company, the right of the Corporation to participate in any
distribution of assets of any subsidiary, including PNC Bank, 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 Junior
Subordinated Debentures will be effectively subordinated to all existing and
future liabilities of the Corporation's subsidiaries, and holders of Junior
Subordinated Debentures should look only to the assets of the Corporation for
payments on the Junior Subordinated Debentures. Except as otherwise provided in
the applicable Prospectus Supplement, the Indenture 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 existing
indenture or any other indenture that the Corporation may enter into in the
future or otherwise. See "-- Subordination" and the applicable Prospectus
Supplement relating to any offering of Capital Securities or Junior Subordinated
Debentures.
The Junior Subordinated Debentures will be issuable in one or more series
pursuant to an indenture supplemental to the Indenture or a resolution of the
Corporation's Board of Directors or a committee thereof.
The applicable Prospectus Supplement will describe the following terms of
the Junior Subordinated Debentures offered thereby: (1) the title of such Junior
Subordinated Debentures; (2) any limit upon the aggregate principal amount of
such Junior Subordinated Debentures; (3) the date or dates on which the
principal of such Junior Subordinated Debentures is payable (the "Stated
Maturity") or the method of determination thereof and any right of the
Corporation to shorten the Stated Maturity; (4) the rate or rates, if any, at
which such Junior Subordinated Debentures shall bear interest, the dates on
which any such interest shall be payable (the "Interest Payment Dates"), the
right, if any, of the Corporation to defer or extend an Interest Payment Date,
the record dates for any interest payable on any Interest Payment Date (the
"Regular Record Dates") and the method by which any of the foregoing shall be
determined; (5) the place or places where, subject to the terms of the Indenture
as described below under "-- Payment and Paying Agents," the principal of and
premium, if any, and interest on such Junior Subordinated Debentures will be
payable and where, subject to the terms of the Indenture as described below
under "-- Registration, Denomination and Transfer," such Junior Subordinated
Debentures may be presented for registration of transfer or exchange and the
place or places where notices and demands to or upon the Corporation in respect
of such Junior Subordinated Debentures and the Indenture may be made ("Place of
Payment"); (6) any period or periods within which, or date or dates on which,
the price or prices at which and the terms and conditions upon which such Junior
Subordinated Debentures may be redeemed, in whole or in part, at the option of
the Corporation or a holder thereof; (7) the obligation or the right, if any, of
the Corporation or a holder thereof to redeem, purchase or repay such Junior
Subordinated Debentures and the period or periods within which, the price or
prices at which, the currency or currencies (including currency unit or units)
in which and the other terms and conditions upon which such Junior Subordinated
Debentures shall be redeemed, repaid or purchased, in whole or in part, pursuant
to such obligation or right; (8) the denominations in which such Junior
Subordinated Debentures shall be issuable; (9) if other than in U.S. Dollars,
the currency or currencies (including currency unit or units) in which the
principal of and premium, if any, and interest, if any, on the Junior
Subordinated Debentures shall be payable, or in which such Junior Subordinated
Debentures shall be denominated; (10) any additions, modifications or deletions
in the events of default under the Indenture or in the covenants of the
Corporation specified in the Indenture with respect to such Junior Subordinated
Debentures; (11) if other than the principal amount thereof, the portion of the
principal amount of such Junior Subordinated Debentures that shall be payable
upon declaration of acceleration of the maturity thereof; (12) any additions or
changes to the Indenture with respect to such Junior Subordinated Debentures as
shall be necessary to permit or facilitate the issuance of such Junior
Subordinated Debentures in bearer form, registrable or not registrable as to
principal, and with or without interest coupons; (13) any index or indices used
to determine the amount of payments of principal of and premium, if any, on such
Junior Subordinated Debentures or the manner in which such amounts will be
determined; (14) the terms and conditions relating to the issuance of a
temporary Global Security representing all of such Junior Subordinated
Debentures and the exchange of such temporary Global Security for definitive
Junior Subordinated Debentures of such series; (15) subject to the terms
described herein under "-- Global Junior Subordinated Debentures," whether such
Junior Subordinated Debentures shall be issued in whole or in part in the form
of one or more Global Securities and, in such case, the depositary for such
Global Securities, which depositary shall be a clearing agency registered under
the Exchange Act; (16) the appointment of any paying agent or agents; (17) the
terms of any right of the Corporation or a holder to convert or
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exchange such Junior Subordinated Debentures into Capital Securities; (18) the
form of Trust Agreement and Guarantee Agreement, if applicable; and (19) any
other terms of the Junior Subordinated Debentures not inconsistent with the
provisions of the Indenture.
Junior Subordinated Debentures may be sold at a substantial discount below
their stated principal amount, bearing no interest or interest at a rate which
at the time of issuance is below market rates. Certain United States federal
income tax consequences and special considerations applicable to any such Junior
Subordinated Debentures will be described in the applicable Prospectus
Supplement.
If the purchase price of any of the Junior Subordinated Debentures is
payable in one or more foreign currencies or currency units or if any Junior
Subordinated Debentures are denominated in one or more foreign currencies or
currency units or if the principal of, premium, if any, or interest on any
Junior Subordinated Debentures is payable in one or more foreign currencies or
currency units, the restrictions, elections, certain United States federal
income tax consequences, specific terms and other information with respect to
such series of Junior Subordinated Debentures and such foreign currency or
currency units will be set forth in the applicable Prospectus Supplement.
If any index is used to determine the amount of payments of principal of,
premium, if any, or interest on any series of Junior Subordinated Debentures,
special United States federal income tax, accounting and other considerations
applicable thereto will be described in the applicable Prospectus Supplement.
REGISTRATION, DENOMINATION, AND TRANSFER
Unless otherwise specified in the applicable Prospectus Supplement, the
Junior Subordinated Debentures will be issuable only in registered form without
coupons. Junior Subordinated Debentures of any series will be exchangeable for
other Junior Subordinated Debentures of the same issue and series, of any
authorized denominations, of a like aggregate principal amount, of the same
original issue date and stated maturity and bearing the same interest rate.
Junior Subordinated Debentures may be presented for exchange as provided
above, and may be presented for registration of transfer (with the form of
transfer endorsed thereon, or a satisfactory written instrument of transfer,
duly executed), at the office of the appropriate securities registrar or at the
office of any transfer agent designated by the Corporation for such purpose with
respect to any series of Junior Subordinated Debentures and referred to in the
applicable Prospectus Supplement, without service charge and upon payment of any
taxes and other governmental charges as described in the Indenture. The
Corporation will appoint the Debenture Trustee as securities registrar under the
Indenture. If the applicable Prospectus Supplement refers to any transfer agents
(in addition to the securities registrar) initially designated by the
Corporation with respect to any series of Junior Subordinated Debentures, the
Corporation may at any time rescind the designation of any such transfer agent
or approve a change in the location through which any such transfer agent acts,
provided that the Corporation maintains a transfer agent in each place of
payment for such series. The Corporation may at any time designate additional
transfer agents with respect to any series of Junior Subordinated Debentures.
In the event of any redemption, neither the Corporation nor the Debenture
Trustee shall be required to (i) issue, register the transfer of or exchange
Junior Subordinated Debentures of any series during a period beginning at the
opening of business 15 days before the day of selection for redemption of Junior
Subordinated Debentures of that series and ending at the close of business on
the day of mailing of the relevant notice of redemption or (ii) transfer or
exchange any Junior Subordinated Debentures so selected for redemption, except,
in the case of any Junior Subordinated Debentures being redeemed in part, any
portion thereof not to be redeemed.
GLOBAL JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures of a series may be issued in whole or in
part in the form of one or more Global Junior Subordinated Debentures that will
be deposited with or on behalf of a depositary (the "Depositary") identified in
the Prospectus Supplement relating to such series. Global Junior Subordinated
Debentures may be issued only in fully registered form and in either temporary
or permanent form. Unless and until it is exchanged in whole or in part for the
individual definitive Junior Subordinated Debentures represented thereby, a
Global Junior Subordinated Debenture may not be transferred except as a whole by
the Depositary for such Global Junior Subordinated Debenture to a nominee of
such Depositary or by a nominee of such Depositary
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to such Depositary or another nominee of such Depositary or by the Depositary or
any nominee to a successor Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of Junior Subordinated Debentures will be described in the Prospectus Supplement
relating to such series. The Corporation anticipates that the following
provisions will generally apply to depositary arrangements.
Upon the issuance of a Global Junior Subordinated Debenture, and the
deposit of such Global Junior Subordinated Debenture with or on behalf of the
Depositary, the Depositary for such Global Junior Subordinated Debenture or its
nominee will credit, on its book-entry registration and transfer system, the
respective principal amounts of the individual Junior Subordinated Debentures
represented by such Global Junior Subordinated Debenture to the accounts of
persons that have accounts with such Depositary, which may include the accounts
of the operator of the Euroclear System ("Euroclear"), and Cedel Bank, societe
anonyme ("Cedel") ("Participants"). Such accounts shall be designated by the
dealers, underwriters or agents with respect to such Junior Subordinated
Debentures or by the Corporation if such Junior Subordinated Debentures are
offered and sold directly by the Corporation. Ownership of beneficial interests
in a Global Junior Subordinated Debenture will be limited to Participants or
persons that may hold interests through Participants, including Euroclear and
Cedel and their participants. Ownership of beneficial interests in such Global
Junior Subordinated Debenture will be shown on, and the transfer of that
ownership will be effected only through records maintained by the applicable
Depositary or its nominee (with respect to interests of Participants) and the
records of Participants (with respect to interests of persons who hold through
Participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Junior Subordinated Debenture.
So long as the Depositary for a Global Junior Subordinated Debenture, or
its nominee, is the registered owner of such Global Junior Subordinated
Debenture, such Depositary or such nominee, as the case may be, will be
considered the sole owner or holder of the Junior Subordinated Debentures
represented by such Global Junior Subordinated Debenture for all purposes under
the Indenture. Except as provided below, owners of beneficial interest in a
Global Junior Subordinated Debenture will not be entitled to have any of the
individual Junior Subordinated Debentures of the series represented by such
Global Junior Subordinated Debenture registered in their names, will not receive
or be entitled to receive physical delivery of any such Junior Subordinated
Debentures of such series in definitive form and will not be considered the
owners or holders thereof under the Indenture.
Payments of principal of and premium, if any, and interest on individual
Junior Subordinated Debentures represented by a Global Junior Subordinated
Debenture registered in the name of a Depositary or its nominee will be made to
the Depositary or its nominee, as the case may be, as the registered owner of
the Global Junior Subordinated Debenture representing such Junior Subordinated
Debentures. None of the Corporation, the Debenture Trustee, any Paying Agent, or
the Securities Registrar for such Junior Subordinated Debentures will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Global Junior
Subordinated Debenture representing such Junior Subordinated Debentures or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The Corporation expects that the Depositary for a series of Junior
Subordinated Debentures or its nominee, upon receipt of any payment of
principal, premium, if any, or interest in respect of a permanent Global Junior
Subordinated Debenture representing any of such Junior Subordinated Debentures,
immediately will credit Participants' accounts with payments in amounts
proportionate to their respective beneficial interest in the principal amount of
such Global Junior Subordinated Debenture for such Junior Subordinated
Debentures as shown on the records of such Depositary or its nominee. The
Corporation also expects that payments by Participants will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"street name." Such payments will be the responsibility of such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Depositary for a series of Junior Subordinated Debentures is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by the Corporation within 90 days, the Corporation
will issue individual Junior
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Subordinated Debentures of such series in exchange for the Global Junior
Subordinated Debenture representing such series of Junior Subordinated
Debentures. In addition, the Corporation may at any time and in its sole
discretion, subject to any limitations described in the Prospectus Supplement
relating to such Junior Subordinated Debentures, determine not to have any
Junior Subordinated Debentures of such series represented by one or more Global
Junior Subordinated Debentures and, in such event, will issue certificated
Junior Subordinated Debentures of such series in exchange for the Global Junior
Subordinated Debenture. Further, if the Corporation so specifies with respect to
the Junior Subordinated Debentures of a series, an owner of a beneficial
interest in a Global Junior Subordinated Debenture representing Junior
Subordinated Debentures of such series may, on terms acceptable to the
Corporation, the Debenture Trustee and the Depositary for such Global Junior
Subordinated Debenture, receive certificated Junior Subordinated Debentures of
such series in exchange for such beneficial interests, subject to any
limitations described in the Prospectus Supplement relating to such Junior
Subordinated Debentures. In any such instance, an owner of a beneficial interest
in a Global Junior Subordinated Debenture will be entitled to physical delivery
of certificated Junior Subordinated Debentures of the series represented by such
Global Junior Subordinated Debenture equal in aggregate principal amount to such
beneficial interest and to have such Junior Subordinated Debentures registered
in its name. Individual Junior Subordinated Debentures of such series so issued
will be issued in the denominations specified for such series in the applicable
Prospectus Supplement.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of and premium, if any, and any interest on Junior Subordinated
Debentures (other than any Junior Subordinated Debentures represented by Global
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 designated from time to time, except that at the
option of the Corporation payment of any interest may be made (i) except in the
case of Global Junior Subordinated Debentures, by check mailed to the address of
the person entitled thereto as such address shall appear in the securities
register or (ii) in certain circumstances, by transfer to an account maintained
by the person entitled thereto as specified in the securities register, provided
that proper transfer instructions have been received by the Regular Record Date.
Unless otherwise indicated in the applicable Prospectus Supplement, payment of
any interest on Junior Subordinated Debentures will be made to the person in
whose name such Junior Subordinated Debentures are registered at the close of
business on the Regular 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 each series of 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 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 request of the Corporation, be repaid
to the Corporation and the holder of such Junior Subordinated Debenture shall
thereafter look, as a general unsecured creditor, only to the Corporation for
payment thereof.
OPTION TO DEFER INTEREST PAYMENTS
As provided in the applicable Prospectus Supplement, so long as no
Debenture Event of Default has occurred and is continuing, the Corporation will
have the right at any time and from time to time during the term of any series
of Junior Subordinated Debentures to defer payment of interest for up to such
number of consecutive interest payment periods as may be specified in the
applicable Prospectus Supplement (each, an "Extension Period"), subject to the
terms, conditions and covenants, if any, specified in such Prospectus
Supplement, provided, that such Extension Period may not extend beyond the
Stated Maturity of such series of Junior Subordinated Debentures. Certain United
States federal income tax consequences and special considerations applicable to
any such Junior Subordinated Debentures will be described in the applicable
Prospectus Supplement.
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REDEMPTION
Unless otherwise indicated in the applicable Prospectus Supplement, Junior
Subordinated Debentures will not be subject to any sinking fund.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Corporation may, at its option and subject to receipt of prior approval by the
Federal Reserve if then required under applicable capital guidelines or
policies, redeem the Junior Subordinated Debentures of any series in whole at
any time or in part from time to time. If the Junior Subordinated Debentures of
any series are so redeemable only on or after a specified date or upon the
satisfaction of additional conditions, the applicable Prospectus Supplement will
specify such date or describe such conditions. Except as otherwise specified in
the applicable Prospectus Supplement, the redemption price for any Junior
Subordinated Debenture so redeemed shall equal any accrued and unpaid interest
thereon to the redemption date, plus 100% of the principal amount thereof plus
any redemption premium required to be paid thereon.
Except as otherwise specified in the applicable Prospectus Supplement, if a
Tax Event, a Capital Treatment Event or Investment Company Event (each as
defined below) shall occur and be continuing, the Corporation may, at its option
and subject to receipt of prior approval by the Federal Reserve if then required
under applicable capital guidelines or policies, redeem such series of Junior
Subordinated Debentures in whole (but not in part) at any time within 90 days
following of the occurrence of such Tax Event, Capital Treatment Event or
Investment Company Event, at a redemption price equal to 100% of the principal
amount of such Junior Subordinated Debentures then outstanding plus accrued and
unpaid interest to the date fixed for redemption plus any redemption premium
required to be paid thereon.
"Tax Event" with respect to an Issuer Trust means the receipt by the Issuer
Trust of a series of Capital Securities of an opinion of counsel experienced in
such matters to the effect that, as a result of any amendment to, or change
(including any announced 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 action or judicial decision interpreting or applying such laws
or regulations, which amendment or change is effective or which pronouncement,
action or decision is announced on or after the date of issuance of such Capital
Securities, there is more than an insubstantial risk that (i) such Issuer Trust
is, or will be within 90 days of the delivery of such opinion, subject to United
States federal income tax with respect to income received or accrued on the
corresponding series of Corresponding Junior Subordinated Debentures, (ii)
interest payable by the Corporation on such series of Corresponding Junior
Subordinated Debentures is not, or within 90 days of the delivery of such
opinion, will not be, deductible by the Corporation, in whole or in part, for
United States federal income tax purposes, or (iii) such Issuer Trust is, or
will be within 90 days of the delivery of such opinion, subject to more than a
de minimis amount of other taxes, duties or other governmental charges.
"Capital Treatment Event" means the reasonable determination by the
Corporation that, as a result of any amendment to, or change (including any
announced prospective change) in, the laws (or any rules or regulations
thereunder) of the United States or any political subdivision thereof or
therein, or as a result of any official or administrative pronouncement or
action or judicial decision interpreting or applying such laws or regulations,
which amendment or change is effective or such pronouncement, action or decision
is announced on or after the date of issuance of the applicable Capital
Securities, there is more than an insubstantial risk that the Corporation will
not be entitled to treat an amount equal to the Liquidation Amount (as defined
below) of the applicable Capital Securities as "Tier 1 Capital" (or the then
equivalent thereof), except as otherwise restricted under the 25% Capital
Limitation, for purposes of the capital adequacy guidelines of the Federal
Reserve, as then in effect and applicable to the Corporation.
"Investment Company Event" with respect to an Issuer Trust means the
receipt by the Issuer Trust of an opinion of counsel to the Corporation
experienced in such manners to the effect that, as a result of the occurrence of
a change in law or regulation or a written change (including any announced
prospective change) in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority, there is
more than an insubstantial risk that such Issuer Trust is or will be considered
an "investment company" that is required to be registered under the Investment
Company Act of 1940, as amended
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(the "Investment Company Act"), which change or prospective change becomes
effective or would become effective, as the case may be, on or after the date of
the issuance of the Capital Securities.
"25% Capital Limitation" means the limitation imposed by the Federal
Reserve that the proceeds of certain qualifying securities similar to the Trust
Securities will qualify as Tier 1 capital of the issuer up to an amount not to
exceed 25% of the issuer's Tier 1 capital, or any subsequent limitation adopted
by the Federal Reserve.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Junior Subordinated
Debentures to be redeemed at its registered address. Unless the Corporation
defaults in payment of the redemption price, on and after the redemption date,
interest will cease to accrue on such Junior Subordinated Debentures or portions
thereof called for redemption.
RESTRICTIONS ON CERTAIN PAYMENTS
The Corporation will also covenant, as to each series of Junior
Subordinated Debentures, that it will not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Corporation's capital stock or (ii) make any payment
of principal, interest or premium, if any, on or repay or repurchase or redeem
any debt securities of the Corporation (including other series of Junior
Subordinated Debentures) that rank pari passu in all respects with or junior in
interest to the Junior Subordinated Debentures (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Corporation
in connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of any one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance of capital
stock of the Corporation (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period or other event referred to below, (b) as a
result of an exchange or conversion of any class or series of the Corporation's
capital stock (or any capital stock of a subsidiary of the Corporation) for any
class or series of the Corporation's capital stock or of any class or series of
the Corporation's indebtedness for any class or series of the Corporation's
capital stock, (c) 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, (d) any
declaration of a dividend in connection with any stockholder's rights plan, or
the issuance of rights, stock or other property under any stockholder's rights
plan, or the redemption or repurchase of rights pursuant thereto, or (e) any
dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with or junior to such stock), if at such time (x) there has
occurred any event (1) of which the Corporation has actual knowledge that with
the giving of notice or the lapse of time, or both, would constitute a Debenture
Event of Default and (2) that the Corporation has not taken reasonable steps to
cure, (y) if the Junior Subordinated Debentures are held by the Issuer Trust,
the Corporation is in default with respect to its payment of any obligations
under the Guarantees or (z) the Corporation has given notice of its election of
an Extension Period as provided in the Indenture and has not rescinded such
notice, or such Extension Period, or any extension thereof, is continuing.
MODIFICATION OF INDENTURE
From time to time the Corporation and the Debenture Trustee may, without
the consent of the holders of any series of Junior Subordinated Debentures,
amend, waive or supplement the provisions of the Indenture for specified
purposes, including, among other things, curing ambiguities, defects or
inconsistencies (provided that any such action does not materially adversely
affect the interests of the holders of any series of Junior Subordinated
Debentures or, in the case of Corresponding Junior Subordinated Debentures, the
holders of the Related Capital Securities so long as they remain outstanding)
and qualifying, or maintaining the qualification of, the Indenture under the
Trust Indenture Act. The Indenture contains provisions permitting the
Corporation and the Debenture Trustee, with the consent of the holders of not
less than a majority in principal amount of each outstanding series of Junior
Subordinated Debentures affected, to modify the Indenture in a manner adversely
affecting the rights of the holders of such series of the Junior Subordinated
Debentures in any material respect; provided, that no such modification may,
without the consent of the holder of each outstanding Junior Subordinated
Debenture so affected, (i) change the Stated Maturity of any series of Junior
Subordinated
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Debentures (except as otherwise specified in the applicable Prospectus
Supplement), or reduce the principal amount thereof, 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 of any series, the holders of
which are required to consent to any such modification of the Indenture,
provided further that, in the case of Corresponding Junior Subordinated
Debentures, so long as any Related 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 Indenture may
occur, and no waiver of any event of default or compliance with any covenant
under the Indenture may be effective, without the prior consent of the holders
of at least a majority of the aggregate Liquidation Amount of all outstanding
Related Capital Securities affected unless and until the principal of and
premium, if any, on the Corresponding Junior Subordinated Debentures and all
accrued and unpaid interest thereon have been paid in full and certain other
conditions have been satisfied.
In addition, the Corporation and the Debenture Trustee may execute, without
the consent of any holder of Junior Subordinated Debentures, any supplemental
Indenture for the purpose of creating any new series of Junior Subordinated
Debentures.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to a series of Junior Subordinated Debentures that has
occurred and is continuing constitutes a "Debenture Event of Default" with
respect to such series of Junior Subordinated Debentures:
(i) failure for 30 days to pay any interest on such series of Junior
Subordinated 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 of or premium, if any, on such series of
Junior Subordinated Debentures when due whether at maturity or upon redemption
by declaration of acceleration or otherwise; or
(iii) failure to observe or perform in any material respect certain other
covenants contained in the Indenture for 90 days after written notice to the
Corporation from the Debenture Trustee or the holders of at least 25% in
aggregate outstanding principal amount of such affected series of outstanding
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
Junior Subordinated Debentures of each series affected 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 Junior Subordinated Debentures
of each series affected may declare the principal due and payable immediately
upon a Debenture Event of Default, and, in the case of Corresponding Junior
Subordinated Debentures, should the Debenture Trustee or such holders of such
Corresponding Junior Subordinated Debentures fail to make such declaration, the
holders of at least 25% in aggregate Liquidation Amount of the Related Capital
Securities shall have such right. The holders of a majority in aggregate
outstanding principal amount of Junior Subordinated Debentures of each series
affected may annul such declaration and waive the default if all defaults (other
than the non-payment of Junior Subordinated Debentures which have become due
solely by such acceleration) have been earned 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. In the case of
Corresponding Junior Subordinated Debentures, should the holders of such
Corresponding Junior Subordinated Debentures fail to annul such declaration and
waive such default, the holders of a majority in aggregate Liquidation Amount of
the Related Capital Securities affected shall have such right.
The holders of a majority in aggregate outstanding principal amount of each
series of the Junior Subordinated Debentures affected thereby may, on behalf of
the holders of all the Junior Subordinated Debentures of such series, 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 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. In the case of Corresponding Junior Subordinated
Debentures, should the holders of such Corresponding Junior Subordinated
Debentures fail to
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waive such default, the holders of a majority in aggregate Liquidation Amount of
the Related Capital Securities affected shall have such right. The Corporation
is required to file annually with the Debenture Trustee a certificate as to
whether or not the Corporation is in compliance with all the conditions and
covenants applicable to it under the Indenture.
If a Debenture Event of Default shall occur and be continuing as to a
series of Corresponding Junior Subordinated Debentures, the Property Trustee
will have the right to declare the principal of and the interest on such
Corresponding Junior Subordinated Debentures, and any other amounts payable
under the Indenture, to be forthwith due and payable and to enforce its other
rights as a creditor with respect to such Corresponding Junior Subordinated
Debentures.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES
If a Debenture Event of Default with respect to a series of Junior
Subordinated Debentures has occurred and is continuing and such event is
attributable to the failure of the Corporation to pay interest or principal on
such Junior Subordinated Debentures on the date such interest or principal is
due and payable, a registered holder of Related Capital Securities may institute
a legal proceeding directly against the Corporation for enforcement of payment
to such holder of the principal of or interest on such Junior Subordinated
Debentures having a principal amount equal to the aggregate Liquidation Amount
of the Related Capital Securities of such holder (a "Direct Action"). The
Corporation may not amend the Indenture to remove the foregoing right to bring a
Direct Action without the prior written consent of the holders of all of the
Capital Securities outstanding. The Corporation shall have the right under the
Indenture to set-off any payment made to such holder of Capital Securities by
the Corporation in connection with a Direct Action.
The holders of the Capital Securities will not be able to exercise directly
any remedies other than those set forth in the preceding paragraph available to
the holders of the Junior Subordinated Debentures unless there shall have been
an event of default under the Trust Agreement. See "Description of Capital
Securities -- Events of Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTION
The Indenture provides that the Corporation may not consolidate with or
merge into any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, and no person may consolidate
with or merge into the Corporation or convey, transfer or lease its properties
and assets substantially as an entirety to the Corporation, unless (i) if 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 issued under
the Indenture, provided, however, that nothing in the Indenture shall be deemed
to restrict or prohibit, and no supplemental indenture shall be required in the
case of, the merger of a Principal Subsidiary Bank (as defined below) with and
into a Principal Subsidiary Bank or the Corporation, the consolidation of
Principal Subsidiary Banks into a Principal Subsidiary Bank or the Corporation,
or the sale or other disposition of all or substantially all of the assets of
any Principal Subsidiary Bank to another Principal Subsidiary Bank or the
Corporation, if, in any such case in which the surviving, resulting or acquiring
entity is not the Corporation, the Corporation would own, directly or
indirectly, at least 80% of the voting securities of the Principal Subsidiary
Bank (and of any other Principal Subsidiary Bank any voting securities of which
are owned, directly or indirectly, by such Principal Subsidiary Bank) surviving
such merger, resulting from such consolidation or acquiring such assets; (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 by the Indenture are satisfied.
For purposes of clause (i) above, the term "Principal Subsidiary Bank"
means each of (i) PNC Bank, (ii) any other banking subsidiary of the
Corporation, the consolidated assets of which constitute 20% or more of the
consolidated assets of the Corporation and its consolidated subsidiaries, (iii)
any other banking subsidiary designated as a Principal Subsidiary Bank pursuant
to a resolution of the Board of Directors of the Corporation and set forth in an
officers' certificate delivered to the Debenture Trustee, and (iv) any banking
subsidiary of the Corporation that owns, directly or indirectly, any voting
securities, or options, warrants or rights to subscribe for
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or purchase voting securities, of any Principal Subsidiary Bank under clause
(i), (ii) or (iii), and in the case of clause (i), (ii), (iii) or (iv) their
respective successors (whether by consolidation, merger, conversion, transfer of
substantially all their assets and business or otherwise) so long as any such
successor is a banking subsidiary (in the case of clause (i), (ii) or (iii) or a
subsidiary (in the case of clause (iv)) of the Corporation.
The 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
Junior Subordinated Debentures.
CONVERSION OR EXCHANGE
If and to the extent indicated in the applicable Prospectus Supplement, the
Junior Subordinated Debentures of any series may be convertible or exchangeable
into Junior Subordinated Debentures of another series or into Capital Securities
of another series. The specific terms on which Junior Subordinated Debentures of
any series may be so converted or exchanged will be set forth in the applicable
Prospectus Supplement. Such terms may include provisions for conversion or
exchange, either mandatory, at the option of the holder, or at the option of the
Corporation, in which case the number of shares of Capital Securities or other
securities to be received by the holders of Junior Subordinated Debentures would
be calculated as of a time and in the manner stated in the applicable Prospectus
Supplement.
SUBORDINATION
The Junior Subordinated Debentures will be subordinate and junior in right
of payment, to the extent set forth in the Indenture, to all Senior Indebtedness
of the Corporation. If the Corporation defaults in the payment of any principal,
premium, if any, or interest, if any, or any other amount payable on any Senior
Indebtedness when the same becomes due and payable, whether at maturity or at a
date fixed for redemption or by declaration of acceleration or otherwise, then,
unless and until such default has been cured or waived or has ceased to exist or
all Senior Indebtedness has been paid, no direct or indirect payment (in cash,
property, securities, by setoff or otherwise) may be made or agreed to be made
on the Junior Subordinated Debentures, or in respect of any redemption,
repayment, retirement, purchase or other acquisition of any of the Junior
Subordinated Debentures.
As used herein, "Senior Indebtedness" means, whether recourse is to all or
a portion of the assets of the Corporation and whether or not contingent, (i)
every obligation of the Corporation for money borrowed; (ii) every obligation of
the Corporation evidenced by bonds, debentures, notes or other similar
instruments, including obligations incurred in connection with the acquisition
of property, assets or businesses; (iii) every reimbursement obligation of the
Corporation with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of the Corporation; (iv) every obligation of
the Corporation issued or assumed as the deferred purchase price of property
services (but excluding trade accounts payable or accrued liabilities arising in
the ordinary course of business); (v) every capital lease obligation of the
Corporation; (vi) every obligation of the Corporation for claims (as defined in
Section 101(4) of the United States Bankruptcy Code of 1978, as amended) in
respect of derivative products such as interest and foreign exchange rate
contracts, commodity contracts and similar arrangements; and (vii) every
obligation of the type referred to in clause (i) through (vi) of another person
and all dividends of another person the payment of which, in either case, the
Corporation has guaranteed or is responsible or liable, directly or indirectly,
as obligor or otherwise; without limiting the generality of the foregoing,
Senior Indebtedness shall include (i) the following obligations of PNC Funding
Corp which are guaranteed by the Corporation: (A) 9 7/8% Subordinated Notes Due
2001, (B) 6 7/8% Subordinated Notes Due 2003, (C) 6 1/8% Subordinated Notes Due
2003, (D) 7 3/4% Subordinated Notes Due 2004, (E) 6 7/8% Subordinated Notes Due
2007, (F) 6.50% Subordinated Notes Due 2008, (G) 5.43% Senior Notes Due 2000,
(H) 5.18% Senior Notes Due 1999, (I) 10.55% Equity Commitment Notes Due 1998,
and (J) $500 million credit facility under an Amended and Restated Credit
Agreement dated as of March 18, 1996, (ii) the following joint and several
obligations of the Corporation and PNC Bancorp, Inc. assumed in connection with
the merger of Midlantic Corporation with PNC Bancorp, Inc.: (A) 8 1/4%
Convertible Subordinated Debentures Due 2010, (B) 9.875% Subordinated Capital
Notes Due 1999, (C) 9.20% Subordinated Capital Notes Due 2001 and (D) 9.25%
Senior Notes Due 1999; and (iii) the obligations of the Corporation under the
8 1/4% Convertible Subordinated Debentures Due 2008. "Senior Indebtedness" shall
not include (i) any obligations which, by their terms, are expressly stated to
rank pari passu in right of payment with, or to not be superior in right of
payment
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to, the Junior Subordinated Debentures, (ii) any Senior Indebtedness of the
Corporation which when incurred and without respect to any election under
Section 1111(b) of the United States Bankruptcy Code of 1978, as amended, was
without recourse to the Corporation, (iii) any Senior Indebtedness of the
Corporation to any of its subsidiaries, (iv) Senior Indebtedness to any
executive officer or director of the Corporation or (v) any indebtedness in
respect of debt securities issued to any trust, or a trustee of such trust,
partnership or other entity affiliated with the Corporation that is a financing
entity of the Corporation in connection with the issuance of such financing
entity of securities that are similar to the Capital Securities.
In the event of (i) certain events of bankruptcy, dissolution or
liquidation of the Corporation, (ii) any proceeding for the liquidation,
dissolution or other winding up of the Corporation, voluntary or involuntary,
whether or not involving insolvency or bankruptcy proceedings, (iii) any
assignment by the Corporation for the benefit of creditors or (iv) any other
marshalling of the assets of the Corporation, all Senior Indebtedness (including
any interest thereon accruing after the commencement of any such proceedings)
shall first be paid in full before any payment or distribution, whether in cash,
securities or other property, shall be made on account of the Junior
Subordinated Debentures. In such event, any payment or distribution on account
of the Junior Subordinated Debentures, whether in cash, securities or other
property, that would otherwise (but for the subordination provisions) be payable
or deliverable in respect of the Junior Subordinated Debentures will be paid or
delivered directly to the holders of Senior Indebtedness in accordance with the
priorities then existing among such holders until all Senior Indebtedness
(including any interest thereon accruing after the commencement of any such
proceedings) has been paid in full.
In the event of any such proceeding, after payment in full of all sums
owing with respect to Senior Indebtedness, the holders of Junior Subordinated
Debentures, together with the holders of any obligations of the Corporation
ranking on a parity with the Junior Subordinated Debentures, will be entitled to
be paid from the remaining assets of the Corporation the amounts at the time due
and owing on the Junior Subordinated Debentures and such other obligations
before any payment or other distribution, whether in cash, property or
otherwise, will be made on account of any capital stock or obligations of the
Corporation ranking junior to the Junior Subordinated Debentures and such other
obligations. If any payment or distribution on account of the Junior
Subordinated Debentures of any character or any security, whether in cash,
securities or other property is received by any holder of any Junior
Subordinated Debentures in contravention of any of the terms hereof and before
all the Senior Indebtedness has been paid in full, such payment or distribution
or security will be received in trust for the benefit of, and must be paid over
or delivered and transferred to, the holders of the Senior Indebtedness at the
time outstanding in accordance with the priorities then existing among such
holders for application to the payment of all Senior Indebtedness remaining
unpaid to the extent necessary to pay all such Senior Indebtedness in full. By
reason of such subordination, in the event of the insolvency of the Corporation,
holders of Senior Indebtedness may receive more, ratably, and holders of the
Junior Subordinated Debentures may receive less, ratably, than the other
creditors of the Corporation. Such subordination will not prevent the occurrence
of any Debenture Event of Default in respect of the Junior Subordinated
Debentures.
The Indenture places no limitation on the amount of Senior Indebtedness
that may be incurred by the Corporation. The Corporation expects from time to
time to incur additional indebtedness and other obligations constituting Senior
Indebtedness.
TRUST EXPENSES
Pursuant to the Indenture, the Corporation, as borrower, has agreed to pay
all debts and other obligations (other than with respect to the Capital
Securities) and all costs and expenses of each Issuer Trust (including costs and
expenses relating to the organization of each Issuer Trust, the fees and
expenses of the Issuer Trustees and the cost and expenses relating to the
operation of each Issuer Trust) and to pay any and all taxes and all costs and
expenses with respect thereto (other than United States withholding taxes) to
which each Issuer Trust might become subject.
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all Junior
Subordinated Debentures of a series not previously delivered to the Debenture
Trustee for cancellation (i) have become due and payable or (ii) will become due
and payable at their Stated Maturity within one year, and the Corporation
deposits or causes to be
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deposited with the Debenture Trustee funds, in trust, for the purpose of, and in
an amount sufficient for, payment and discharge of the entire indebtedness on
the Junior Subordinated Debentures of such series 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, as the case
may be, then the Indenture will cease to be of further effect with respect to
that series (except as to the Corporation's obligations to pay all other sums
due with respect to that series pursuant to the Indenture and or provide the
officer's certificates and opinions of counsel described therein), and the
Corporation will be deemed to have satisfied and discharged the Indenture with
respect to that series.
THE DEBENTURE TRUSTEE
The Debenture Trustee, other than during the occurrence and continuance of
a default by the Corporation in performance of its obligations under the Junior
Subordinated Debentures, is under no obligation to exercise any of the powers
vested in it by the Indenture at the request of any holder of Junior
Subordinated Debentures, unless offered reasonable indemnity by such holder
against the costs, expenses and liabilities that 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 repayments or adequate indemnity is
not reasonably assured to it.
Bankers Trust Company, the Debenture Trustee, may serve from time to time
as trustee under other indentures or trust agreements with the Corporation or
its subsidiaries relating to other issues of their securities. In addition, the
Corporation and certain of its affiliates may have other banking relationships
with Bankers Trust Company and its affiliates.
GOVERNING LAW
The Indenture and the Junior Subordinated Debentures will be governed by,
and construed in accordance with, the laws of the State of New York.
CORRESPONDING JUNIOR SUBORDINATED DEBENTURES
The Corresponding Junior Subordinated Debentures may be issued in one or
more series of Junior Subordinated Debentures under the Indenture with terms
corresponding to the terms of a series of Related Capital Securities. In that
event, concurrently with the issuance of each Issuer Trust's Capital Securities,
such Issuer Trust will invest the proceeds thereof and the consideration paid by
the Corporation for the Common Securities of such Issuer Trust in such series of
Corresponding Junior Subordinated Debentures issued by the Corporation to such
Issuer Trust. Each series of Corresponding Junior Subordinated Debentures will
be in the principal amount equal to the aggregate stated Liquidation Amount of
the Related Capital Securities and the Common Securities of such Issuer Trust
and will rank pari passu with all other series of Junior Subordinated
Debentures. Holders of the Related Capital Securities for a series of
Corresponding Junior Subordinated Debentures will have the rights, in connection
with modifications to the Indenture or upon occurrence of Debenture Events of
Default, as described under "-- Modification of Indenture," "-- Debenture Events
of Default" and "-- Enforcement of Certain Rights by Holders of Capital
Securities," unless provided otherwise in the Prospectus Supplement for such
Related Capital Securities.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Tax Event, Capital Trust Event or Investment Company Event shall occur and be
continuing, the Corporation may, at its option and subject to prior approval of
the Federal Reserve if then so required under applicable capital guidelines or
policies, redeem the Corresponding Junior Subordinated Debentures at any time
within 90 days of the occurrence of such Tax Event, Capital Treatment Event or
Investment Company Event, in whole but not in part, subject to the provisions of
the Indenture and whether or not such Corresponding Junior Subordinated
Debentures are then otherwise redeemable at the option of the Corporation. The
redemption price for any Corresponding Junior Subordinated Debentures shall be
equal to 100% of the principal amount of such Corresponding Junior Subordinated
Debentures then outstanding plus accrued and unpaid interest to the date fixed
for redemption plus any redemption premium required to be paid thereon. For so
long as the applicable Issuer Trust is the holder of all the oustanding
Corresponding Junior Subordinated Debentures of such series, the proceeds of any
such redemption will be used by the Issuer Trust to redeem the corresponding
Trust Securities in accordance with their terms. The Corporation
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may not redeem a series of Corresponding Junior Subordinated Debentures in part
unless all accrued and unpaid interest has been paid in full on all outstanding
Corresponding Junior Subordinated Debentures of such series for all interest
periods terminating on or prior to the Redemption Date.
The Corporation will convenant, as to each series of Corresponding Junior
Subordinated Debentures, (i) to maintain directly or indirectly 100% ownership
of the Common Securities of the Issuer Trust to which such Corresponding Junior
Subordinated Debentures have been issued, provided that certain successors which
are permitted pursuant to the Indenture may succeed to the Corporation's
ownership of the Common Securities, (ii) not to voluntarily terminate, wind up
or liquidate any Issuer Trust, except (a) in connection with a distribution of
Corresponding Junior Subordinated Debentures to the holders of the Capital
Securities in exchange therefor upon liquidation of such Issuer Trust, or (b) in
connection with certain mergers, consolidations or amalgamations permitted by
the related Trust Agreement, in either such case, if so specified in the
applicable Prospectus Supplement upon prior approval of the Federal Reserve if
then so required under applicable capital guidelines or policies, and (iii) to
use its reasonable efforts, consistent with the terms and provisions of the
related Trust Agreement, to cause such Issuer Trust to remain classified as a
grantor trust and not as an association taxable as a corporation for United
States federal income tax purposes.
DESCRIPTION OF CAPITAL SECURITIES
Pursuant to the terms of the Trust Agreement for each Issuer Trust, the
Issuer Trustees on behalf of such Issuer Trust will issue the Capital Securities
and the Common Securities. The Capital Securities of a particular Issuer Trust
will represent preferred beneficial ownership interests in the assets of the
Issuer Trust and the holders thereof will be entitled to a preference in certain
circumstances with respect to the Distributions and amounts payable on
redemption or liquidation over the Common Securities of such Issuer Trust, as
well as other benefits as described in the corresponding Trust Agreement. This
summary of certain provisions of the Capital Securities and each Trust Agreement
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, all the provisions of each Trust Agreement, including
the definitions therein of certain terms, and the Trust Indenture Act, to each
of which reference is hereby made. Wherever particular defined terms of a Trust
Agreement (as amended or supplemented from time to time) are referred to herein
or in a Prospectus Supplement, such defined terms are incorporated herein or
therein by reference. The form of the Trust Agreement has been filed as an
exhibit to the Registration Statement of which this Prospectus forms a part.
Each of the Issuer Trusts is a legally separate entity and the assets of one are
not available to satisfy the obligations of any of the others or of any other
statutory business trust whose common securities are owned by the Corporation.
GENERAL
The Capital Securities of an Issuer Trust will rank pari passu, and
payments will be made thereon pro rata, with the Common Securities of the Issuer
Trust except as described under "-- Subordination of Common Securities." The
Corresponding Junior Subordinated Debentures will be registered in the name of
the related Issuer Trust and held by the Property Trustee in trust for the
benefit of the holders of the Related Capital Securities and Common Securities.
Each Guarantee Agreement (the "Guarantee") will be a guarantee on a subordinated
basis with respect to the related Capital Securities but will not guarantee
payment of Distributions or amounts payable on redemption or liquidation of such
Capital Securities when the related Issuer Trust does not have funds on hand
available to make such payments. See "Description of Guarantees."
DISTRIBUTIONS
The Capital Securities will represent preferred individual beneficial
interests in the assets of the relevant Issuer Trust and Distributions on the
Capital Securities will be cumulative, will accumulate from the date of original
issuance and will be payable on such dates as specified in the applicable
Prospectus Supplement. The Distributions on each Capital Security will be
payable at a rate specified in the applicable Prospectus Supplement for such
Capital Securities. The amount of Distributions payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months unless otherwise
specified in the applicable Prospectus Supplement. Distributions to which
holders of Capital Securities are entitled will accumulate additional
Distributions at the rate per annum if and as specified in the applicable
Prospectus Supplement. The term "Distributions" as used herein includes any such
additional Distributions unless otherwise stated.
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In the event that any date on which Distributions are payable on the
Capital Securities is not a Business Day (as defined below), then payment of the
Distributions payable on such date will be made on the next succeeding day that
is a Business Day (and without any additional Distributions or other payment in
respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, payment of such Distribution shall be made on the
immediately preceding Business Day, in either 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) a Saturday or a Sunday, (b) a day on which banking
institutions in Pittsburgh, Pennsylvania or The City of New York are authorized
or required by law or executive order to remain closed or (c) a day on which the
corporate trust office of the Property Trustee or the Debenture Trustee is
closed for business.
If provided in the applicable Prospectus Supplement, so long as no
Debenture Event of Default has occurred and is continuing the Corporation will
have the right under the Indenture, pursuant to which it will issue the
Corresponding Junior Subordinated Debentures, to defer the payment of interest
at any time or from time to time on any series of the Corresponding Junior
Subordinated Debentures for up to such number of consecutive interest payment
periods which will be specified in such Prospectus Supplement relating to such
series (each, an "Extension Period"), provided, that no Extension Period may
extend beyond the Stated Maturity of the Corresponding Junior Subordinated
Debentures. As a consequence of any such deferral, Distributions on the Related
Capital Securities would be deferred (but would continue to accumulate
additional Distributions thereon at the rate per annum set forth in the
Prospectus Supplement for such Capital Securities) by the Issuer Trust of such
Capital Securities during any such Extension Period. During 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 or (ii) make any payment
of principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities of the Corporation that rank pari passu in all respects with or
junior in interest to the Corresponding Junior Subordinated Debentures (other
than (a) repurchases, redemptions or other acquisitions of shares of capital
stock of the Corporation in connection with any employment contract, benefit
plan or other similar arrangement with or for the benefit of any one or more
employees, officers, directors or consultants, in connection with a dividend
reinvestment or stockholder stock purchase plan or in connection with the
issuance of capital stock of the Corporation (or securities convertible into or
exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of an exchange or conversion of any class or series of the Corporation's
capital stock (or any capital stock of a subsidiary of the Corporation) for any
class or series of the Corporation's capital stock or of any class or series of
the Corporation's indebtedness for any class or series of the Corporation's
capital stock, (c) 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, (d) any
declaration of a dividend in connection with any stockholder's rights plan, or
the issuance of rights, stock or other property under any stockholder's rights
plans, or the redemption or repurchase of rights pursuant thereto, or (e) any
dividend in the form of stock, warrants, options or other rights where the
dividend stock issuable upon exercise of such warrants, options or other rights
is the same stock as that on which the dividend is being paid or ranks pari
passu with or junior to such stock).
The revenue of each Issuer Trust available for distribution to holders of
its Capital Securities will be limited to payments under the Corresponding
Junior Subordinated Debentures in which the Issuer Trust will invest the
proceeds from the issuance and sale of its Trust Securities. See "Description of
Junior Subordinated Debentures -- Corresponding Junior Subordinated Debentures."
If the Corporation does not make interest payments on such Corresponding Junior
Subordinated Debentures, the Issuer Trust may not have funds available to pay
Distributions on the Related Capital Securities. The payment of Distributions
and other amounts payable on the Capital Securities (if and to the extent the
Issuer Trust has funds legally available for the payment of such Distributions
and cash sufficient to make such payments) is guaranteed by the Corporation on
the basis set forth herein under "Description of Guarantees."
Distributions on the Capital Securities will be payable to the holders
thereof as they appear on the register of such Issuer Trust on the relevant
record dates, as specified in the applicable Prospectus Supplement.
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REDEMPTION OR EXCHANGE
Upon the repayment or redemption, in whole or in part, of any Corresponding
Junior Subordinated Debentures, whether at maturity or upon earlier redemption
as provided in the Indenture, the proceeds from such repayment or redemption
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, at a redemption price (the "Redemption Price") equal to the aggregate
Liquidation Amount of such Trust Securities plus accumulated but unpaid
Distributions thereon to the date of redemption (the "Redemption Date") and the
related amount of the premium, if any, paid by the Corporation upon the
concurrent redemption of such Corresponding Junior Subordinated Debentures. See
"Description of Junior Subordinated Debentures -- Redemption." If less than all
of any series of Corresponding Junior Subordinated Debentures are to be repaid
or redeemed on a Redemption Date, then the proceeds from such repayment or
redemption shall be allocated to the redemption pro rata of the Related Capital
Securities and the Common Securities. The amount of premium, if any, paid by the
Corporation upon the redemption of all or any part of any series of any
Corresponding Junior Subordinated Debentures to be repaid or redeemed on a
Redemption Date shall be allocated to the redemption pro rata of the Related
Capital Securities and the Common Securities.
The Corporation will have the right to redeem any series of Corresponding
Junior Subordinated Debentures (i) on or after such date as may be specified in
the applicable Prospectus Supplement, in whole at any time or in part from time
to time, or (ii) in whole (but not in part), at any time within 90 days
following the occurrence and during the continuation of a Tax Event, Investment
Company Event or Capital Treatment Event, in each case subject to receipt of
prior approval by the Federal Reserve if then required under applicable capital
guidelines or policies.
Subject to the Corporation's having received prior approval of the Federal
Reserve to do so if then required under applicable capital guidelines or
policies, the Corporation has the right at any time to terminate any Issuer
Trust and, after satisfaction of the liabilities of creditors of such Issuer
Trust as provided by applicable law, cause such Corresponding Junior
Subordinated Debentures in respect of the Related Capital Securities and Common
Securities issued by such Issuer Trust to be distributed to the holders of such
Related Capital Securities and Common Securities in exchange therefor upon
liquidation of such Issuer Trust.
After the liquidation date fixed for any distribution of Corresponding
Junior Subordinated Debentures for any series of Capital Securities (i) such
series of Capital Securities will no longer be deemed to be outstanding, (ii)
the depositary or its nominee, as the registered holder of such series of
Capital Securities, will receive a registered global certificate or certificates
representing the Corresponding Junior Subordinated Debentures to be delivered
upon such distribution and (iii) any certificates representing such series of
Capital Securities not held by The Depository Trust Company ("DTC") or its
nominee will be deemed to represent the Corresponding Junior Subordinated
Debentures having a principal amount equal to the stated Liquidation Amount of
such series of Capital Securities, and bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid Distributions on such series of Capital
Securities until such certificates are presented to the securities registrar for
transfer or reissuance.
There can be no assurance as to the market prices for the Capital
Securities or the Corresponding Junior Subordinated Debentures that may be
distributed in exchange for Capital Securities if a dissolution and liquidation
of an Issuer Trust were to occur. Accordingly, the Capital Securities that an
investor may purchase, or the Corresponding Junior Subordinated Debentures that
the investor may receive on dissolution and liquidation of an Issuer Trust, may
trade at a discount to the price that the investor paid to purchase the Capital
Securities offered hereby.
"Like Amount" means (i) with respect to a redemption of any series of Trust
Securities, Trust Securities of such series having a Liquidation Amount (as
defined below) equal to that portion of the principal amount of Corresponding
Junior Subordinated Debentures to be contemporaneously redeemed in accordance
with the Indenture, allocated to the Common Securities and to the Related
Capital Securities based upon the relative Liquidation Amounts of such classes,
and (ii) with respect to a distribution of Corresponding Junior Subordinated
Debentures to holders of any series of Trust Securities in exchange therefor in
connection with a dissolution or liquidation of the related Issuer Trust,
Corresponding Junior Subordinated Debentures having a principal amount
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equal to the Liquidation Amount of the Trust Securities of the holder to whom
such Corresponding Junior Subordinated Debentures would be distributed.
"Liquidation Amount" means the stated amount per Trust Security as set
forth in the applicable Prospectus Supplement.
REDEMPTION PROCEDURES
Capital Securities redeemed on each Redemption Date shall be redeemed at
the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Corresponding Junior Subordinated Debentures. Redemptions of
the Capital Securities shall be made and the Redemption Price shall be payable
on each Redemption Date only to the extent that the related Issuer Trust has
funds on hand available for the payment of such Redemption Price. See also
"-- Subordination of Common Securities."
If an Issuer Trust gives a notice of redemption in respect of its Capital
Securities, then, by 12:00 noon, New York City time, on the Redemption Date, to
the extent funds are available, in the case of Capital Securities held in book
entry form, the Property Trustee will deposit irrevocably with DTC funds
sufficient to pay the applicable Redemption Price and will give DTC irrevocable
instructions and authority to pay the Redemption Price to the holders of such
Capital Securities. See "Book-Entry Issuance." If such Capital Securities are no
longer in book-entry form, the Property Trustee, to the extent funds are
available, will irrevocably deposit with the paying agent for such Capital
Securities funds sufficient to pay the Redemption Price and will give such
paying agent irrevocable instructions and authority to pay the Redemption Price
to the holders thereof upon surrender of their certificates evidencing such
Capital Securities. Notwithstanding the foregoing, Distributions payable on or
prior to the Redemption Date for any Capital Securities called for redemption
shall be payable to the holders of such Capital Securities on the relevant
record dates for the related Distribution Dates. If notice of redemption shall
have been given and funds deposited as required, then upon the date of such
deposit, all rights of the holders of such Capital Securities so called for
redemption will cease, except the right of the holders of such Capital
Securities to receive the Redemption Price and any distribution payable in
respect of the Capital Securities on or prior to the Redemption Date, but
without interest on such Redemption Price, and such Capital Securities will
cease to be outstanding. In the event that any date fixed for redemption of
Capital Securities is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day which is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day falls in the next calendar year, such payment
will be made on the immediately preceding Business Day. In the event that
payment of the Redemption Price in respect of Capital Securities called for
redemption is improperly withheld or refused and not paid either by the Issuer
Trust or by the Corporation pursuant to the relevant Guarantee as described
under "Description of Guarantees," Distributions on such Capital Securities will
continue to accrue at the then applicable rate, from the Redemption Date
originally established by the Issuer Trust for such Capital Securities to the
date such Redemption Price is actually paid, in which case the actual payment
date will be the date fixed for redemption for purposes of calculating the
Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law), the Corporation or its affiliates may at any time and
from time to time purchase outstanding Capital Securities by tender, in the open
market or by private agreement and may resell such securities.
Payment of the Redemption Price on the Capital Securities and any
distribution of Corresponding Junior Subordinated Debentures to holders of
Capital Securities shall be made to the applicable record holders thereof as
they appear on the register for such Capital Securities on the relevant record
date, as specified in the applicable Prospectus Supplement.
If less than all of the Capital Securities and Common Securities issued by
an Issuer Trust are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of such Capital Securities and Common Securities to be
redeemed shall be allocated pro rata to the Capital Securities and the Common
Securities based upon the relative Liquidation Amounts of such classes. The
particular Capital Securities to be redeemed shall be selected on a pro rata
basis not more than 60 days prior to the Redemption Date by the Property Trustee
from the outstanding Capital Securities not previously called for redemption or
if the Capital Securities are then held in the form of a Global Capital
Security, in accordance with DTC's customary procedures. The Property Trustee
shall promptly notify the securities registrar in writing of the Capital
Securities selected for redemption and, in the case
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of any Capital Securities selected for partial redemption, the Liquidation
Amount thereof to be redeemed. For all purposes of each Trust Agreement, unless
the context otherwise requires, all provisions relating to the redemption of
Capital Securities shall relate, in the case of any Capital Securities redeemed
or to be redeemed only in part, to the portion of the aggregate Liquidation
Amount of Capital Securities which has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each holder of Capital Securities to be
redeemed at its registered address. Unless the Corporation defaults in payment
of the Redemption Price on the Junior Subordinated Debentures, on and after the
Redemption Date interest will cease to accrue on the Junior Subordinated
Debentures or portions thereof (and, unless payment of the Redemption Price in
respect of the Capital Securities is withheld or refused and not paid either by
the Issuer Trust or the Corporation pursuant to the Guarantee, Distributions
will cease to accumulate on the Capital Securities or portions thereof) called
for redemption.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, and the
Liquidation Distribution (as defined below) in respect of, each Issuer Trust's
Capital Securities and Common Securities, as applicable, shall be made pro rata
based on the Liquidation Amount of such 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 as a
result of any failure by the Corporation to pay amounts in respect of the Junior
Subordinated Debentures when due, no payment of any Distribution on, or
Redemption Price of or the Liquidated Distribution in respect of, any of the
Issuer Trust's Common Securities, and no other payment on account of the
redemption, liquidation or other acquisition of such Common Securities, shall be
made unless payment in full in cash of all accumulated and unpaid Distributions
on all of the Issuer Trust's outstanding Capital Securities for all Distribution
periods terminating on or prior thereto, or in the case of payments of the
Redemption Price the full amount of such Redemption Price on all of the Issuer
Trust's outstanding Capital Securities then called for redemption, 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 Issuer Trust's Capital Securities then due and payable.
In the case of any Event of Default (as defined below) under the applicable
Trust Agreement resulting from a Debenture Event of Default, the Corporation as
holder of such Issuer Trust's Common Securities will be deemed to have waived
any right to act with respect to any such Event of Default under the applicable
Trust Agreement until the effects of all such Events of Default with respect to
such Capital Securities have been cured, waived or otherwise eliminated. See
"-- Events of Default; Notice" and "Description of Junior Subordinated
Debentures -- Debenture Events of Default." Until all events of default under
the applicable Trust Agreement with respect to the Capital Securities have been
so cured, waived or otherwise eliminated, the Property Trustee shall act solely
on behalf of the holders of such Capital Securities and not on behalf of the
Corporation as holder of the Issuer Trust's Common Securities, and only the
holders of such Capital Securities will have the right to direct the Property
Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
Pursuant to each Trust Agreement, each Issuer Trust will automatically
dissolve upon expiration of its term or, if earlier, will dissolve on the first
to occur of: (i) certain events of bankruptcy, dissolution or liquidation of the
Corporation; (ii) the distribution of a Like Amount of the Corresponding Junior
Subordinated Debentures to the holders of its Trust Securities, if the
Corporation, as Depositor, has given written direction to the Property Trustee
to dissolve such Issuer Trust (subject to the Corporation having received prior
approval of the Federal Reserve if so required under applicable capital
guidelines or policies); (iii) the repayment of all of the Issuer Trust's
Capital Securities in connection with the redemption of all its Trust Securities
as described under "-- Redemption or Exchange;" and (iv) the entry of an order
for the dissolution of the Issuer Trust by a court of competent jurisdiction.
If an early dissolution occurs as described in clause (i), (ii) or (iv)
above, the Issuer Trust will be liquidated by the Property Trustee as
expeditiously as the Property Trustee determines to be possible by distributing,
after satisfaction of liabilities to creditors of such Issuer Trust as provided
by applicable law, to the holders of such Trust Securities in exchange therefor
a Like Amount of the Corresponding Junior Subordinated Debentures,
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unless such distribution is not practical, in which event such holders will be
entitled to receive out of the assets of the Issuer Trust available for
distribution to holders, after satisfaction of liabilities to creditors of such
Issuer Trust as provided by applicable law, an amount equal to, in the case of
holders of Capital Securities, the aggregate Liquidation Amount plus accrued and
unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If such Liquidation Distribution can be paid only
in part because such Issuer Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by such Issuer Trust on its Capital Securities shall be paid on a pro rata
basis. The holder(s) of such Issuer Trust's Common Securities will be entitled
to receive distributions upon any such liquidation pro rata with the holders of
its Capital Securities, except that if a Debenture Event of Default has occurred
and is continuing as a result of any failure by the Corporation to pay any
amounts in respect of the Junior Subordinated Debentures when due, the Capital
Securities shall have a priority over the Common Securities. See
"-- Subordination of Common Securities."
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under
each Trust Agreement (an "Event of Default") with respect to the Capital
Securities issued under such Trust Agreement (whatever the reason for such Event
of Default and whether it is voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) the occurrence of a Debenture Event of Default under the Indenture
(see "Description of Junior Subordinated Debentures -- Debenture Events of
Default"); or
(ii) default by the Issuer Trust in the payment of any Distribution when it
becomes due and payable and continuation of such default for a period of 30
days; or
(iii) default by the Issuer Trust in the payment of any Redemption Price of
any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect, of any
covenant or warranty of the Issuer Trustees in such Trust Agreement (other than
a covenant or warranty a default in the performance of which or the breach of
which is dealt with in clause (ii) or (iii) above), and continuation of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Issuer Trustees and the Corporation by the
holders of at least 25% in aggregate Liquidation Amount of the outstanding
Capital Securities of the applicable Issuer Trust, 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 such Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee or all or substantially all of its property if a
successor Property Trustee has not been appointed within a period of 90 days
thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee will transmit
notice of such Event of Default to the holders of such Issuer Trust's Trust
Securities and the Administrators, unless such Event of Default shall have been
cured or waived. The Corporation, as Depositor, and the Administrators 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 each Trust Agreement.
If a Debenture Event of Default has occurred and is continuing, the Capital
Securities shall have a preference over the Common Securities as described
above. See "-- Subordination of Common Securities" and "-- Liquidation
Distribution Upon termination." The existence of an Event of Default does not
entitle the holders of Capital Securities to accelerate the maturity thereof.
REMOVAL OF ISSUER TRUSTEES
The holders of at least a majority in aggregate Liquidation Amount of the
outstanding Capital Securities may remove an Issuer Trustee for cause or, if a
Debenture Event of Default has occurred and is continuing, with or without
cause. If an Issuer Trustee is removed by the holders of the outstanding Capital
Securities, the successor
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may be appointed by the holders of at least 25% in aggregate Liquidation Amount
of Capital Securities. If an Issuer Trustee resigns, such Issuer Trustee will
appoint its successor. If an Issuer Trustee fails to appoint a successor, the
holders of at least 25% in aggregate Liquidation Amount of the outstanding
Capital Securities may appoint a successor. If a successor has not been
appointed by the holders, any holder of Capital Securities or Common Securities
or the other Issuer Trustee may petition a court in the State of Delaware to
appoint a successor. Any Delaware Trustee must meet the applicable requirements
of Delaware law. Any Property Trustee must be a national or state-chartered
bank, and at the time of appointment have securities rated in one of the three
highest rating categories by a nationally recognized statistical rating
organization and have capital and surplus of at least $50,000,000. 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 Trust Agreement.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any Person into which the Property Trustee or the Delaware Trustee may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Issuer
Trustee is a party, or any Person succeeding to all or substantially all the
corporate trust business of such Issuer Trustee, shall be the successor of such
Issuer Trustee under each Trust Agreement, provided such Person shall be
otherwise qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE ISSUER TRUSTS
An Issuer Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except as
described below or as otherwise described in the Trust Agreement. An Issuer
Trust may, at the request of the holders of the Common Securities, with the
consent of the holders of at least a majority in aggregate Liquidation Amount of
the outstanding Capital Securities, merge with or into, consolidate, amalgamate,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, a trust organized as such under the laws of any
State; provided, that (i) such successor entity either (a) expressly assumes all
of the obligations of such Issuer 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 have the same priority as the
Capital Securities with respect to distributions and payments upon liquidation,
redemption and otherwise, (ii) a trustee of such successor entity possessing the
same powers and duties as the Property Trustee is appointed as the holder of the
Corresponding Junior Subordinated Debentures, (iii) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Capital Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (iv) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the holders of the
Capital Securities (including any Successor Securities) in any material respect,
(v) such successor entity has a purpose substantially identical to that of the
Issuer Trust, (vi) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Corporation has received an
opinion from independent counsel to the Issuer Trust experienced in such matters
to the effect that (a) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Capital Securities (including any Successor
Securities) in any material respect, and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
the Issuer Trust nor such successor entity will be required to register as an
investment company under the Investment Company Act, and (vii) 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, an Issuer Trust may not, except with the consent
of holders of 100% in aggregate Liquidation Amount of the Capital Securities,
consolidate, amalgamate, merge with or into, or be replaced by or convey,
transfer or lease its properties and assets substantially as an entirety to any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Issuer Trust or the successor
entity to be classified as other than a grantor trust for United States federal
income tax purposes.
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VOTING RIGHTS; AMENDMENT OF EACH TRUST AGREEMENT
Except as provided below and under "-- Removal of Issuer Trustees;
Appointment of Successors" and "Description of Guarantees -- Amendments and
Assignment" and as otherwise required by law and the applicable Trust Agreement,
the holders of the Capital Securities will have no voting rights.
Each Trust Agreement may be amended from time to time by the holders of a
majority in Liquidation Amount of the Common Securities and the Property
Trustee, without the consent of the holders of the Capital Securities (i) to
cure any ambiguity, correct or supplement any provisions in such Trust Agreement
that may be inconsistent with any other provision, or to make any other
provisions with respect to matters or questions arising under such Trust
Agreement, provided that any such amendment does not adversely affect in any
material respect the interests of any holder of Trust Securities or (ii) to
modify, eliminate or add to any provisions of such Trust Agreement to such
extent as shall be necessary to ensure that the Issuer Trust will be classified
for United States federal income tax purposes as a grantor trust at any time
that any Trust Securities are outstanding or to ensure that the Issuer Trust
will not be required to register as an "investment company" under the Investment
Company Act; and any such amendments of such Trust Agreement shall become
effective when notice thereof is given to the holders of Trust Securities. Each
Trust Agreement may be amended by the holders of a majority in Liquidation
Amount of the Common Securities and the Property Trustee with (i) the consent of
holders representing not less than a majority (based upon Liquidation Amounts)
of the outstanding Capital Securities, and (ii) receipt by the Issuer Trustees
of an opinion of counsel to the effect that such amendment or the exercise of
any power granted to the Issuer Trustees in accordance with such amendment will
not affect the Issuer Trust's status as a grantor trust for United States
federal income tax purposes or the Issuer 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, such Trust Agreement may not be
amended to (i) change the amount or timing of any Distribution on the Trust
Securities or otherwise adversely affect the amount of any Distribution required
to be made in respect of the Trust Securities as of a specified date or (ii)
restrict the right of a holder of Trust Securities to institute suit for the
enforcement of any such payment on or after such date.
So long as any Corresponding Junior Subordinated Debentures are held by the
Issuer Trust, the Property Trustee will not (i) direct the time, method and
place of conducting any proceeding for any remedy available to the Debenture
Trustee, or executing any trust or power conferred on the Property Trustee with
respect to such Corresponding Junior Subordinated Debentures, (ii) waive any
past default that is waivable under the Indenture, (iii) exercise any right to
rescind or annual a declaration that the principal of all the corresponding
Junior Subordinated Debentures shall be due and payable or (iv) consent to any
amendment, modification or termination of the Indenture or such Corresponding
Junior Subordinated Debentures, where such consent shall be required, without,
in each case, obtaining the prior approval of the holders of a majority in
aggregate Liquidation Amount of all outstanding Capital Securities; provided,
however, that where a consent under the Indenture would require the consent of
each holder of Corresponding Junior Subordinated Debentures affected thereby, no
such consent shall be given by the Property Trustee without the prior consent of
each holder of the Related Capital Securities. The Property Trustees may not
revoke any action previously authorized of approved by a vote of the holders of
the Capital Securities except by subsequent vote of the holders of the Capital
Securities. The Property Trustee will notify each holder of Capital Securities
of any notice of default with respect to the Corresponding Junior Subordinated
Debentures. In addition to obtaining the foregoing approvals of the holders of
the Capital Securities, prior to taking any of the foregoing actions, the
Property Trustee shall obtain an opinion of counsel experienced in such matters
to the effect that such action would not cause the Issuer Trust to be classified
as a corporation for United States federal income tax purposes.
Any required approval of holders of Capital Securities may be given at a
meeting of holders of Capital Securities convened for such purpose or pursuant
to written consent. The Property Trustee will cause a notice of any meeting at
which holders of Capital Securities are entitled to vote, or of any matter upon
which action by written consent of such holders is to be taken, to be given to
each holder of record of Capital Securities in the manner set forth in each
Trust Agreement.
No vote or consent of the holders of Capital Securities will be required
for an Issuer Trust to redeem and cancel its Capital Securities in accordance
with the applicable Trust Agreement.
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Notwithstanding that holders of Capital Securities are entitled to vote or
consent under any of the circumstances described above, any of the Capital
Securities that are owned by the Corporation, the Issuer Trustees or any
affiliate of the Corporation or any Issuer Trustees, shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
GLOBAL CAPITAL SECURITIES
The Capital Securities of a series may be issued in whole or in part in the
form of one or more Global Capital Securities that will be deposited with, or on
behalf of, the Depositary, which unless otherwise indicated in the applicable
Prospectus Supplement for such series will be DTC. Global Capital Securities may
be issued only in fully registered form and in either temporary or permanent
form. Unless and until it is exchanged in whole or in part for the individual
Capital Securities represented thereby, a Global Capital Security may not be
transferred except as a whole by the Depositary for such Global Capital Security
to a nominee of such Depositary or by a nominee of such Depositary to such
Depositary or another nominee of such Depositary or by the Depositary or any
nominee to a successor Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of Capital Securities will be described in the Prospectus Supplement relating to
such series. The Corporation anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Capital Security, and the deposit of such
Global Capital Security with or on behalf of the Depositary, the Depositary for
such Global Capital Security or its nominee will credit, on its book-entry
registration and transfer system, the respective aggregate Liquidation Amounts
of the individual Capital Securities represented by such Global Capital
Securities to the accounts of Participants, which may include Euroclear and
Cedel. Such accounts shall be designated by the dealers, underwriters or agents
with respect to such Capital Securities or by the Corporation if such Capital
Securities are offered and sold directly by the Corporation. Ownership of
beneficial interests in a Global Capital Security will be limited to
Participants or persons that may hold interests through Participants including
Euroclear and Cedel. Ownership of beneficial interests in such Global Capital
Security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the applicable Depositary or its nominee
(with respect to interests of Participants) and the records of Participants
(with respect to interests of persons who hold through Participants). The laws
of some states require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Capital
Security.
So long as the Depositary for a Global Capital Security, or its nominee, is
the registered owner of such Global Capital Security, such Depositary or such
nominee, as the case may be, will be considered the sole owner or holder of the
Capital Securities represented by such Global Capital Security for all purposes
under the Indenture governing such Capital Securities. Except as provided below,
owners of beneficial interests in a Global Capital Security will not be entitled
to have any of the individual Capital Securities of the series represented by
such Global Capital Security registered in their names, will not receive or be
entitled to receive physical delivery of any such Capital Securities of such
series in definitive form and will not be considered the owners or holders
thereof under the Indenture.
Payments of principal of and premium, if any, and interest on individual
Capital Securities represented by a Global Capital Security registered in the
name of a Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner of the Global Capital
Security representing such Capital Securities. None of the Corporation, the
Property Trustee, any Paying Agent, or the Securities Registrar for such Capital
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the Global Capital Security representing such Capital Securities or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
The Corporation expects that the Depositary for a series of Capital
Securities or its nominee, upon receipt of any payment of Liquidation Amount,
Redemption Price, premium or Distributions in respect of a permanent Global
Capital Security representing any of such Capital Securities, immediately will
credit Participants' accounts with payments in amounts proportionate to their
respective beneficial interest in the aggregate Liquidation Amount of such
Global Capital Security for such Capital Securities as shown on the records of
such
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Depositary or its nominee. The Corporation also expects that payments by
Participants to owners of beneficial interests in such Global Capital Security
held through such Participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name." Such payments will be
the responsibility of such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Depositary for a series of Capital Securities is at any time unwilling, unable
or ineligible to continue as depositary and a successor depositary is not
appointed by the Corporation within 90 days, the Issuer Trust will issue
individual Capital Securities of such series in exchange for the Global Capital
Security representing such series of Capital Securities. In addition, the Issuer
Trust may at any time and in its sole discretion, subject to any limitations
described in the Prospectus Supplement relating to such Capital Securities,
determine not to have any Capital Securities of such series represented by one
or more Global Capital Securities and, in such event, will issue individual
Capital Securities of such series in exchange for the Global Capital Security or
Securities representing such series of Capital Securities. Further, if the
Issuer Trust so specifies with respect to the Capital Securities of a series, an
owner of a beneficial interest in a Global Capital Security representing Capital
Securities of such series may, on terms acceptable to the Issuer Trust, the
Property Trustee and the Depositary for such Global Capital Security, receive
individual Capital Securities of such series in exchange for such beneficial
interests, subject to any limitations described in the Prospectus Supplement
relating to such Capital Securities. In any such instance, an owner of a
beneficial interest in a Global Capital Security will be entitled to physical
delivery of individual Capital Securities of the series represented by such
Global Capital Security equal in principal amount to such beneficial interest
and to have such Capital Securities registered in its name.
PAYMENT AND PAYING AGENCY
Payments in respect of the Capital Securities shall be made to the
Depositary, which shall credit the relevant accounts at the Depositary on the
applicable Distribution Dates or, if any Issuer Trust's Capital Securities 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
securities register of the Trust Securities. Unless otherwise specified in the
applicable Prospectus Supplement, the paying agent (the "Paying Agent") will
initially be the Property Trustee and any co-paying agent chosen by the Property
Trustee and acceptable to the Administrators. The Paying Agent will be permitted
to resign as Paying Agent upon 30 days' written notice to the Property Trustee
and the Administrators. In the event that the Property Trustee shall no longer
be the Paying Agent, the Property Trustee shall appoint a successor (which shall
be a bank or trust company acceptable to the Administrators) to act as Paying
Agent.
REGISTRAR AND TRANSFER AGENT
Unless otherwise specified in the applicable Prospectus Supplement, the
Property Trustee will act as registrar and transfer agent for the Capital
Securities.
Registration of transfers of Capital Securities will be effected without
charge by or on behalf of each Issuer Trust, but upon payment of any tax or
other governmental charges that may be imposed in connection with any transfer
or exchange. The Issuer Trusts will not be required to register or cause to be
registered the transfer of their Capital Securities after such Capital
Securities have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of
an Event of Default, undertakes to perform only such duties as are specifically
set forth in each Trust Agreement and, after such Event of Default, must
exercise the same degree of care and skill as a prudent person would exercise or
use in the conduct of his or her own affairs. Subject to this provision, the
Property Trustee is under no obligation to exercise any of the powers vested in
it by the applicable Trust Agreement at the request of any holder of Capital
Securities unless it is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred thereby. For information concerning the
relationships between Bankers Trust Company, the Property Trustee, and the
Corporation, see "Description of Junior Subordinated Debentures -- Information
Concerning the Debenture Trustee."
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MISCELLANEOUS
The Administrators are authorized and directed to conduct the affairs of
and to operate the Issuer Trusts in such a way that no Issuer Trust will be
deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as a corporation for United States federal
income tax purposes and so that the Corresponding Junior Subordinated Debentures
will be treated as indebtedness of the Corporation for United States federal
income tax purposes. In this connection, the holders of Common Securities, the
Administrators and the Property Trustee are authorized to take any action, not
inconsistent with applicable law, the certificate of trust of each Issuer Trust
or each Trust Agreement, that the Property Trustee and the holders of Common
Securities 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 Related Capital Securities.
Holders of the Capital Securities have no preemptive or similar rights.
No Issuer Trust may borrow money or issue debt or mortgage or pledge any of
its assets.
GOVERNING LAW
Each Trust Agreement will be governed by and construed in accordance with
the laws of the State of Delaware.
BOOK-ENTRY ISSUANCE
DTC will act as securities depositary for all of the Capital Securities and
the Junior Subordinated Debentures, unless otherwise referred to in the
Prospectus Supplement relating to an offering of Capital Securities or Junior
Subordinated Debentures. The Capital Securities and the Junior Subordinated
Debentures will be issued only as fully-registered securities registered in the
name of Cede & Co. (DTC's nominee). One or more fully-registered global
certificates will be issued for the Capital Securities of each Issuer Trust and
the Junior Subordinated Debentures, representing in the aggregate the total
number of such Issuer Trust's Capital Securities or aggregate principal amount
of Junior Subordinated Debentures, respectively, and will be deposited with the
Property Trustee as custodian for DTC.
DTC is a limited purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" with the meaning
of the New York Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act. DTC holds
securities that its Participants deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. "Direct Participants" include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations. DTC is owned by a number of its Direct Participants and by
the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain custodial relationships with Direct
Participants, either directly or indirectly ("Indirect Participants"). The rules
applicable to DTC and its Participants are on file with the Commission.
Purchases of Capital Securities or Junior Subordinated Debentures within
the DTC system must be made by or through Direct Participants, which will
receive a credit for the Capital Securities or Junior Subordinated Debentures on
DTC's records. The ownership interest of each actual purchaser of each Capital
Security and each Junior Subordinated Debenture ("Beneficial Owner") is in turn
to be recorded on the Direct and Indirect Participants' records, including
Euroclear and Cedel. Beneficial Owners will not receive written confirmation
from DTC of their purchases, but Beneficial Owners are expected to receive
written confirmations providing details of the transactions, as well as periodic
statements of their holdings, from the Direct or Indirect Participants through
which the Beneficial Owners purchased Capital Securities or Junior Subordinated
Debentures are to be accomplished by entries made on the books of Participants
acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in Capital Securities or
Junior
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Subordinated Debentures, except in the event that use of the book-entry system
for the Capital Securities of such Issuer Trust or Junior Subordinated
Debentures is discontinued.
Transfers between Participants will be effected in accordance with DTC's
procedures and will be settled in same-day funds. Transfers between participants
in Euroclear and Cedel will be effected in the ordinary way in accordance with
their respective rules and operating procedures.
Cross-market transfers between Participants, on the one hand, and Euroclear
participants or Cedel participants, on the other hand, will be effected in DTC
in accordance with DTC's rules on behalf of Euroclear or Cedel, as the case may
be, by its respective depositary; however, such cross-market transactions will
require delivery of instructions to Euroclear or Cedel, as the case may be, by
the counterparty in such system in accordance with the rules and procedures and
within the established deadlines (Brussels time) of such system. Euroclear or
Cedel, as the case may be, will if the transaction meets its settlement
requirements, deliver instructions to its respective depositary to take actions
or effect final settlement on its behalf by delivering or receiving interests in
the Capital Securities or Junior Subordinated Debentures in DTC, and making or
receiving payment in accordance with normal procedures for same-day funds
settlement applicable to DTC. Euroclear participants and Cedel participants may
not deliver instructions directly to the depositaries for Euroclear or Cedel.
Because of time zone differences, the securities account of a Euroclear or
Cedel participant purchasing an interest in a Capital Security or Junior
Subordinated Debenture from a Participant in DTC will be credited, and any such
crediting will be reported to the relevant Euroclear participant or Cedel
participant, during the securities settlement processing day (which must be a
business day for Euroclear and Cedel, as the case may be) immediately following
the DTC settlement date. Cash received in Euroclear or Cedel as a result of
sales of interests in a Capital Security or Junior Subordinated Debenture by or
through a Euroclear or Cedel participant to a Participant in DTC will be
received with value on the DTC settlement date but will be available in the
relevant Euroclear or Cedel cash account only as of the business day for
Euroclear or Cedel following the DTC settlement date.
DTC has no knowledge of the actual Beneficial Owners of the Capital
Securities or Junior Subordinated Debentures; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Capital Securities or
Junior Subordinated Debentures are credited, which may or may not be the
Beneficial Owners. The Participants will remain responsible for keeping account
of their holdings on behalf of their customers.
Conveyance of notices and other communications by DCT to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners and the voting
rights of Direct Participants, Indirect Participants and Beneficial Owners will
be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices will be sent to Cede & Co. as the registered holder of
the Capital Securities or Junior Subordinated Debentures. If less than all of an
Issuer Trust's Capital Securities or the Junior Subordinated Debentures are
being redeemed, DTC's current practice is to determine by lot the amount of the
interest of each Direct Participant to be redeemed.
Although voting with respect to the Capital Securities or the Junior
Subordinated Debentures is limited to the holders of record of the Capital
Securities or Junior Subordinated Debentures, in those instances in which a vote
is required, neither DTC nor Cede & Co. will itself consent or vote with respect
to Capital Securities or Junior Subordinated Debentures. Under its usual
procedures, DTC would mail an omnibus proxy (the "Omnibus Proxy") to the
relevant trustee as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants to
whose accounts such Capital Securities or Junior Subordinated Debentures are
credited on the record date (identified in a listing attached to the Omnibus
Proxy).
Distribution payments on the Capital Securities or the Junior Subordinated
Debentures will be made by the relevant trustee to DTC. DTC's practice is to
credit Direct Participants' accounts on the relevant payment date in accordance
with their respective holdings shown on DTC's records unless DTC has reason to
believe that it will not receive payments on such payment date. Payments by
Participants to Beneficial Owners will be governed by standing instructions and
customary practices and will be the responsibility of such Participant and not
of DTC, the relevant trustee, the Issuer Trust or the Corporation, subject to
any statutory or regulatory requirements as may be in effect from time to time.
Payment of Distributions to DTC is the responsibility of the relevant
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trustee, disbursement of such payments to Direct Participants is the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners is the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depositary with
respect to any of the Capital Securities or the Junior Subordinated Debentures
at any time by giving reasonable notice to the relevant trustee and the
Corporation. In the event that a successor securities depositary is not
obtained, definitive Capital Security or Junior Subordinated Debenture
certificates representing such Capital Securities or Junior Subordinated
Debentures are required to be printed and delivered. The Corporation, at its
option, may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor depositary). After a Debenture Event of Default, the
holders of a majority in Liquidation Amount of Capital Securities or aggregate
principal amount of Junior Subordinated Debentures may determine to discontinue
the system of book-entry transfers through DTC. In any such event, definitive
certificates for such Capital Securities or Junior Subordinated Debentures will
be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Issuer Trusts and the Corporation
believe to be accurate, but the Issuer Trusts and the Corporation assume no
responsibility for the accuracy thereof. Neither the Issuer Trusts nor the
Corporation has any responsibility for the performance by DTC or its
Participants of their respective obligations as described herein or under the
rules and procedures governing their respective operations.
DESCRIPTION OF GUARANTEES
A Guarantee will be executed and delivered by the Corporation concurrently
with the issuance by each Issuer Trust of its Capital Securities for the benefit
of the holders from time to time of such Capital Securities. Bankers Trust
Company will act as guarantee trustee ("Guarantee Trustee") under each Guarantee
for the purposes of compliance with the Trust Indenture Act and each Guarantee
will be qualified as an indenture under the Trust Indenture Act. This summary of
certain provisions of the Guarantees does not purport to be complete and is
subject to, and qualified in its entirety by reference to, all of the provisions
of each Guarantee, including the definitions therein of certain terms, and the
Trust Indenture Act, to each of which reference is hereby made. The form of the
Guarantee has been filed as an exhibit to the Registration Statement of which
this Prospectus forms a part. Reference in this summary to Capital Securities
means that Issuer Trust's Capital Securities to which a Guarantee relates. The
Guarantee Trustee will hold each Guarantee for the benefit of the holders of the
related Issuer Trust's 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 Capital Securities, as and when due, regardless of any
defense, right of set-off or counterclaim that the related Issuer Trust may have
or assert other than the defense of payment. The following payments with respect
to the Capital Securities, to the extent not paid by or on behalf of the related
Issuer Trust (the "Guarantee Payments"), will be subject to the Guarantee: (i)
any accumulated and unpaid Distributions required to be paid on such Capital
Securities, to the extent that such Issuer Trust has funds on hand available
therefor at such time, (ii) the Redemption Price with respect to any Capital
Securities called for redemption, to the extent that such Issuer Trust has funds
on hand available therefor at such time, and (iii) upon a voluntary or
involuntary dissolution of such Issuer Trust (unless the Corresponding Junior
Subordinated Debentures are distributed to holders of such Capital Securities in
exchange therefor), 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 Issuer Trust has funds on hand available therefor at such time
and (b) the amount of assets of such Issuer Trust remaining available for
distribution to holders of Capital Securities on liquidation of the Issuer
Trust. 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 applicable Capital Securities or by causing the Issuer Trust to pay such
amounts to such holders.
Each Guarantee will be an irrevocable guarantee on a subordinated basis of
the related Issuer Trust's obligations under the Capital Securities, but will
apply only to the extent that such related Issuer Trust has funds sufficient to
make such payments, and is not a guarantee of collection.
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If the Corporation does not make payments on the Corresponding Junior
Subordinated Debentures held by the Issuer Trust, the Issuer Trust will not be
able to pay any amounts payable in respect of the Capital Securities and will
not have funds legally available therefor. Each Guarantee will rank subordinate
and junior in right of payment to all Senior Indebtedness of the Corporation.
See "-- Status of the Guarantees." 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 Guarantees 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. Except as otherwise provided in the
applicable Prospectus Supplement, the Guarantees do not limit the incurrence or
issuance of other secured or unsecured debt of the Corporation, including Senior
Indebtedness, whether under the Indenture, any other existing indenture or any
other indenture that the Corporation may enter into the future or otherwise.
The Corporation has, through the applicable Guarantee, the applicable Trust
Agreement, the applicable series of Corresponding Junior Subordinated Debentures
and the Indenture, taken together, fully, irrevocably and unconditionally
guaranteed all of the Issuer Trust's obligations under the Capital Securities.
No single document standing alone or operating in conjunction with fewer than
all of the other documents constitutes such guarantee. It is only the combined
operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Issuer Trust's obligations under
the Capital Securities. See "Relationship Among the Capital Securities, the
Corresponding Junior Subordinated Debentures and the Guarantees."
STATUS OF THE GUARANTEES
Each Guarantee will constitute an unsecured obligations of the Corporation
and will rank subordinate and junior in right of payment to all Senior
Indebtedness of the Corporation in the same manner as the Junior Subordinated
Debentures.
Each Guarantee will rank pari passu with all other Guarantees issued by the
Corporation. Each Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding directly
against the guarantor to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity). Each
Guarantee will be held by the Guarantee Trustee for the benefit of the holders
of the related Capital Securities. Each Guarantee will not be discharged except
by payment of the Guarantee Payments in full to the extent not paid by the
Issuer Trust or distribution to the holders of the Capital Securities of the
Corresponding Junior Subordinated Debentures. None of the Guarantees places 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 which do not materially adversely affect
the right of holders of the Related Capital Securities (in which case no vote
will be required), no Guarantee may be amended without the prior approval of the
holders of not less than a majority of the aggregate Liquidation Amount of such
outstanding Capital Securities. The manner of obtaining any such approval will
be as set forth under "Description of Capital Securities -- Voting Rights;
Amendment of Each Trust Agreement." All guarantees and agreements contained in
each Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Corporation and shall inure to the benefit of the holders
of the Related Capital Securities then outstanding.
EVENTS OF DEFAULT
An event of default under each Guarantee will occur upon the failure of the
Corporation to perform any of its payment or other obligations thereunder, or to
perform any non-payment obligation if such non-payment default remains
unremedied for 30 days. The holders of not less than a majority in aggregate
Liquidation Amount of the Related Capital Securities have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Guarantee Trustee in respect of such Guarantee or to direct the exercise
of any trust or power conferred upon the Guarantee Trustee under such Guarantee.
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Any registered holder of the Capital Securities may institute a legal
proceeding directly against the Corporation to enforce its rights under such
Guarantee without first instituting a legal proceeding against the Issuer Trust,
the Guarantee Trustee or any other person or entity.
The Corporation, as guarantor, is required to file annually with the
Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Corporation in performance of any Guarantee, undertakes to
perform only such duties as are specifically set forth in each Guarantee and,
after the occurrence of an event of default with respect to any Guarantee, must
exercise the same degree of care and skill as a prudent person would exercise or
use in the conduct of his or her own affairs. Subject to this provision, the
Guarantee Trustee is under no obligation to exercise any of the powers vested in
it by any Guarantee at the request of any holder of any Capital Securities
unless it is offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred thereby. For information concerning the
relationship between Bankers Trust Company, the Guarantee Trustee, and the
Corporation, see "Description of Junior Subordinated Debentures -- Information
Concerning the Debenture Trustee."
TERMINATION OF THE GUARANTEE
Each Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the Related Capital Securities, upon
full payment of the amounts payable upon liquidation of the related Issuer Trust
or upon distribution of Corresponding Junior Subordinated Debentures to the
holders of the related Trust Securities in exchange therefor. Each Guarantee
will continue to be effective or will be reinstated, as the case may be, if at
any time any holder of the related Trust Securities must restore payment of any
sums paid under such Trust Securities or such Guarantee.
GOVERNING LAW
Each Guarantee will be governed by and construed in accordance with the
laws of the State of New York.
RELATIONSHIP AMONG THE CAPITAL SECURITIES, THE CORRESPONDING
JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEES
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Capital Securities
(to the extent the Issuer Trust has funds available for the payment of such
Distributions and other amounts) are irrevocably guaranteed by the Corporation
as and to the extent set forth under "Description of Guarantees." Taken
together, the Corporation's obligations under each series of Corresponding
Junior Subordinated Debentures, the Indenture, the related Trust Agreement and
the related Guarantee provide, in the aggregate, a full irrevocable and
unconditional guarantee of payments of Distributions and other amounts due on
the Related 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
Issuer Trust's obligations under the Related Capital Securities. If and to the
extent that the Corporation does not make payments on any series of
Corresponding Junior Subordinated Debentures, such Issuer Trust will not pay
Distributions when the related Issuer Trust does not have sufficient funds to
pay such Distributions. In such event, the remedy of a holder of a series of
Capital Securities is to institute a legal proceeding directly against the
Corporation pursuant to the terms of the Indenture for enforcement of payment of
amounts equal to such Distributions to such holder.
The obligations of the Corporation under the Indenture and each Guarantee
are subordinate and junior in right of payment to all Senior Indebtedness.
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SUFFICIENCY OF PAYMENTS
As long as payments are made when due on each series of Corresponding
Junior Subordinated Debentures, such payments will be sufficient to cover
Distributions and other payments distributable on the Related Capital
Securities, primarily because (i) the aggregate principal amount of each series
of Corresponding Junior Subordinated Debentures will be equal to the sum of the
aggregate stated Liquidation Amount of the Related Capital Securities and
related Common Securities; (ii) the interest rate and interest and other payment
dates on each series of Corresponding Junior Subordinated Debentures will match
the Distribution rate and Distribution and other payment dates for the Related
Capital Securities; (iii) the Corporation shall pay for all and any costs,
expenses and liabilities of such Issuer Trust except the Issuer Trust's
obligations to holders of the Trust Securities; and (iv) each Trust Agreement
further provides that the Issuer Trust will not engage in any activity that is
not consistent with the limited purposes of such Issuer Trust.
Notwithstanding anything to the contrary in the Indenture, the Corporation
has the right to set-off any payment it is otherwise required to make thereunder
against and to the extent the Corporation has theretofore made, or is
concurrently on the date of such payment making, a payment under the related
Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF CAPITAL SECURITIES
A holder of any Related Capital Security may institute a legal proceeding
directly against the Corporation to enforce its rights under the related
Guarantee without first instituting a legal proceeding against the Guarantee
Trustee, the related Issuer Trust or any other person or entity. See
"Description of Guarantee."
A default or event of default under any Senior Indebtedness of the
Corporation would not constitute a default or Event of Default in respect of the
Capital Securities. However, in the event of payment defaults under, or
acceleration of, Senior Indebtedness of the Corporation, the subordination
provisions of the Indenture provide that no payments may be made in respect of
the Corresponding 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 any series of Corresponding Junior
Subordinated Debentures would constitute an Event of Default under the
Indenture. See "Description of Junior Subordinated Debentures -- Subordination."
LIMITED PURPOSE OF ISSUER TRUSTS
Each Issuer Trust's Capital Securities evidence preferred undivided
beneficial interests in the assets of the Issuer Trust, and each Issuer Trust
exists for the sole purpose of issuing its Capital Securities and Common
Securities and investing the proceeds thereof in Corresponding Junior
Subordinated Debentures. A principal difference between the rights of a holder
of a Capital Security and a holder of a Corresponding Junior Subordinated
Debenture is that a holder of a Corresponding Junior Subordinated Debenture is
entitled to receive from the Corporation payments on Corresponding Junior
Subordinated Debentures held, while a holder of Capital Securities is entitled
to receive Distributions or other amounts distributable with respect to the
Capital Securities from such Issuer Trust (or from the Corporation under the
applicable Guarantee) only if and to the extent such Issuer Trust has funds
available for the payment of such Distributions.
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary dissolution of an Issuer Trust, other
than any such dissolution involving the distribution of the Junior Subordinated
Debentures, involving the liquidation of the Corresponding Junior Subordinated
Debentures, after satisfaction of liabilities to creditors of the Issuer Trust
as required by applicable law, the holders of the Related Capital Securities
will be entitled to receive, out of the assets held by such Issuer Trust, the
Liquidation Distribution in cash. See "Description of Capital Securities --
Liquidation Distribution Upon Termination." Upon any voluntary or involuntary
liquidation or bankruptcy of the Corporation, the Issuer Trust, as registered
holder of the Corresponding Junior Subordinated Debentures, would be a
subordinated creditor of the Corporation, subordinated and junior in right of
payment to all Senior Indebtedness as set forth in the Indenture, but entitled
to receive payment in full of all amounts payable with respect to the Junior
Subordinated Debentures before any stockholders of the Corporation receive
payments or distributions. Since the Corporation is the guarantor under each
Guarantee and has agreed to pay for all costs, expenses and liabilities of each
Issuer Trust (other than the Issuer Trust's obligations to the holders of its
Trust Securities), the positions of a holder of such Capital Securities and a
holder of such Corresponding Junior Subordinated Debentures relative
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to other creditors and to stockholders of the Corporation in the event of
liquidation or bankruptcy of the Corporation are expected to be substantially
the same.
SUPERVISION, REGULATION AND OTHER MATTERS
The Corporation and its subsidiaries are subject to extensive governmental
regulation. The coverage of the regulations range from activity, investment and
dividend limitations on the bank holding company and its subsidiaries to
consumer-related protections for loans, deposits, brokerage and mutual fund
customers. The following information is not intended to be an exhaustive
description of the statutes and regulations applicable to the Corporation. The
discussion is qualified in its entirety by reference to all particular statutory
or regulatory provisions. Additional information regarding supervision and
regulation is included in the incorporated documents. See "Incorporation of
Certain Documents by Reference."
As a bank holding company registered under the BHC Act, the Corporation's
primary bank regulatory authority is the Federal Reserve. Under Federal Reserve
policy, a bank holding company is expected to act as a source of strength to
each of its subsidiary banks and to commit resources to support each such bank.
As a result of that policy, the Corporation may be required to commit resources
to its subsidiary banks in circumstances where it might not otherwise do so.
Moreover, the actions and policy directives of the Federal Reserve determine to
a significant degree the cost and the availability of funds obtained from money
market sources for lending and investing. The Federal Reserve's policies and
regulations also influence, directly and indirectly, the rates of interest paid
by commercial banks on their time and savings deposits. The nature and impact on
the Corporation of future changes in monetary and other policies of the Federal
Reserve are not predictable, as such changes also depend on economic conditions
and domestic and foreign governmental policies, among other factors.
The Corporation is a legal entity separate and distinct from PNC Bank and
its other subsidiaries and affiliates. Such subsidiaries and affiliates are also
subject to supervision and examination by various federal and state regulatory
agencies, including the Office of the Comptroller of the Currency ("OCC") with
respect to PNC Bank. Because the Corporation is a holding company, its rights
and the rights of its creditors and shareholders, including the holders of the
Trust Securities, to participate in the assets of any subsidiary upon the
latter's liquidation or recapitalization will be subject to the prior claims of
the subsidiary's creditors, except to the extent that the Corporation may itself
be a creditor with recognized claims against the subsidiary.
The Corporation derives substantially all of its income from payment of
dividends by its bank and non-bank subsidiaries. There are various legal
limitations on the extent to which the Corporation's depository institution
subsidiaries may extend credit, pay dividends or otherwise supply funds to the
Corporation. For example, the approval of the OCC is required if total dividends
by a national bank in any calendar year exceed net profits for that year
combined with its retained profits for the preceding two years. In addition,
dividends for such a bank may not be paid in excess of the bank's undivided
profits. State-chartered bank subsidiaries are subject to dividend limitations
imposed by applicable state law. The approval of the Office of Thrift
Supervision may be required if total dividends declared by the Corporation's
savings association subsidiary in any calendar year exceed amounts specified in
that agency's regulations. In determining whether and to what extent to pay
dividends, each bank subsidiary must also consider the effect of dividend
payments on applicable risk-based capital and leverage ratio requirements (as
described below) as well as policy statements of the federal regulatory agencies
that indicate that banking organizations should generally pay dividends out of
current operating earnings. Contractual restrictions may also limit the
Corporation's ability to pay dividends.
The U.S. federal bank regulatory authorities have each adopted risk-based
capital guidelines to which the Corporation and its insured depository
institution subsidiaries are subject. These guidelines are based on an
international agreement developed by the Basle committee on Banking Regulations
and Supervisory Practices, which consists of representatives of central banks
and supervisory authorities in 12 countries including the United States. The
guidelines establish a systematic analytical framework that makes regulatory
capital requirements more sensitive to differences in risk profiles among
banking organizations, takes off-balance sheet exposures into explicit account
in assessing capital adequacy and minimizes disincentives to holding liquid,
low-risk assets. Risk-based assets are determined by allocating assets and
specified off-balance sheet commitments and exposures into four weighted
categories, with higher levels of capital being required for the categories
perceived as representing greater risk. From time to time, the federal
regulatory agencies propose
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amendments to and issue interpretations of their risk-based capital guidelines
and reporting instructions, which can affect reported capital ratios and net
risk-adjusted assets.
Each of the Corporation's subsidiary banks is required to maintain a
minimum total risk-based ratio of 8%, of which one-half (4%) must be "Tier 1"
capital. In addition, U.S. federal bank regulators have established leverage
ratio (Tier 1 capital to average total adjusted assets) guidelines providing for
a minimum leverage ratio of 3% for banks meeting certain specified criteria,
including excellent asset quality, high liquidity, low interest rate exposure
and the highest regulatory rating. Institutions not meeting these criteria are
expected to maintain a ratio which exceeds the 3% minimum by at least 100 to 200
basis points. The federal bank regulatory authorities may, however, set higher
capital requirements when a bank's particular circumstances warrant, taking into
consideration concentration of credit risk and the risk arising from
non-traditional activities, as well as an institution's ability to manage these
risks. The capital guidelines also provide that an institution's exposure to a
decline in the economic value of its capital due to changes in interest rates be
considered by the agencies as a factor in evaluating a bank's capital adequacy.
The Federal Reserve also has recently issued additional capital guidelines for
bank holding companies that engage in certain trading activities.
The federal banking agencies possess broad powers to take corrective action
as deemed appropriate for an insured depository institution and its holding
company. The extent of these powers depends upon whether the institution in
question is considered "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized" or "critically
undercapitalized," as defined by the law. Generally, as an institution is deemed
to be less well capitalized, the scope and severity of the agencies' powers
increase. The agencies' corrective powers can include, among other things,
requiring an insured financial institution to adopt a capital restoration plan,
which cannot be approved unless guaranteed by the institution's parent holding
company; placing limits on asset growth and restrictions on activities; placing
restrictions on transactions with affiliates; restricting the interest rates the
institution may pay on deposits; prohibiting the institution from accepting
deposits from correspondent banks; prohibiting the payment of principal or
interest on subordinated debt; prohibiting the holding company from making
capital distributions without prior regulatory approval; and, ultimately,
appointing a receiver for the institution. Business activities may also be
influenced by an institution's capital classification. For instance, only a
"well capitalized" depository institution may accept broker deposits without
prior regulatory approval and only an "adequately capitalized" depository
institution may accept brokered deposits with prior regulatory approval. At
March 31, 1998, each of the Corporation's subsidiary banks exceeded the required
ratios for classification as "well capitalized."
The deposits of the Corporation's subsidiary banks are insured by the
Federal Deposit Insurance Corporation (the "FDIC") and are subject to FDIC
insurance assessments. The amount of FDIC assessments paid by individual insured
depository institutions is based on their relative risk as measured by
regulatory capital ratios and certain other factors. However, based on
legislation enacted in 1996, the FDIC also assesses insured institutions an
additional premium based on deposit levels to cover certain bonds issued by a
government entity. Currently, the Corporation's bank subsidiaries are not
assessed any premium for deposits insured by either the Bank Insurance Fund or
by the Savings Association Insurance Fund. The Corporation's bank subsidiaries,
however, continue to pay premiums based on deposit levels to service debt on
bonds issued by a governmental entity.
Under U.S. federal law, a financial institution insured by the FDIC under
common ownership with a failed institution can be required to indemnify the FDIC
for its losses resulting from the insolvency of the failed institution, or for
any assistance provided by the FDIC to a commonly controlled insured depository
institution in danger of default. As a result, the Corporation's subsidiary
banks could, under certain circumstances, be obligated for the liabilities of
its affiliates that are FDIC-insured institutions. In addition, if any insured
depository institution becomes insolvent and the FDIC is appointed its
conservator or receiver, the FDIC may disaffirm or repudiate any contract or
lease to which such institution is a party, the performance of which is
determined to be burdensome and the disaffirmance or repudiation of which is
determined to promote the orderly administration of the institution's affairs.
If federal law were construed to permit the FDIC to apply these provisions to
debt obligations of an insured depository institution the result could be that
such obligations would be prepaid without premium even where by their terms they
were not prepayable or prepayable only with a premium. Federal law also accords
the claims of a receiver of an insured depository institution for administrative
expenses and the
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claims of holders of deposit liabilities of such an institution priority over
the claims of general unsecured creditors of such an institution in the event of
a liquidation or other resolution of such institution.
The BHC Act currently permits adequately capitalized and adequately managed
bank holding companies from any state to acquire banks and bank holding
companies located in any other state, subject to certain conditions. Effective
June 1, 1997, the Corporation's bank subsidiaries have the ability, subject to
certain restrictions, to consolidate with other banking subsidiaries of the
Corporation or to acquire by acquisition or merger branches outside of their
home state. The Corporation has taken advantage of such and certain related
state actions as evidenced by the December 31, 1997 merger of PNC Bank, National
Association and its banking affiliates located in Kentucky, Indiana and Ohio.
Competition may increase as banks branch across state lines and enter new
markets.
PLAN OF DISTRIBUTION
The Junior Subordinated Debentures or the Capital Securities may be sold in
a public offering to or through underwriters or dealers designated from time to
time. The Corporation and each Issuer Trust may sell its Junior Subordinated
Debentures and Capital Securities, respectively, as soon as practicable after
effectiveness of the Registration Statement of which this Prospectus forms a
part. The names of any underwriters or dealers involved in the sale of the
Junior Subordinated Debentures or Capital Securities in respect of which this
Prospectus is delivered, the amount or number of Junior Subordinated Debentures
and Capital Securities to be purchased by any such underwriters and any
applicable commissions or discounts will be set forth in the applicable
Prospectus Supplement.
Underwriters may offer and sell Junior Subordinated Debentures or Capital
Securities at a fixed price or prices, which may be changed, or from time to
time at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. In connection with the sale of
Capital Securities, underwriters may be deemed to have received compensation
from the Corporation and/or the applicable Issuer Trust in the form of
underwriting discounts or commissions and may also receive commissions.
Underwriters may sell Junior Subordinated Debentures or Capital Securities to or
through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters.
Any underwriting compensation paid by the Corporation and/or the applicable
Issuer Trust to underwriters in connection with the offering of Junior
Subordinated Debentures or Capital Securities, and any discounts, concessions or
commissions allowed by such underwriters to participating dealers, will be
described in an accompanying Prospectus Supplement. Underwriters and dealers
participating in the distribution of Junior Subordinated Debentures or Capital
Securities may be deemed to be underwriters, and any discounts and commissions
received by them and any profit realized by them on resale of such Junior
Subordinated Debentures or Capital Securities may be deemed to be underwriting
discounts and commissions, under the Securities Act. Underwriters and dealers
may be entitled, under agreement with the Corporation and the applicable Issuer
Trust, to indemnification against and contribution toward certain civil
liabilities, including liabilities under the Securities Act, and to
reimbursement by the Corporation for certain expenses.
In connection with the offering of the Capital Securities of any Issuer
Trust, such Issuer Trust may grant to the underwriters an option to purchase
additional Capital Securities to cover over-allotments, if any, at the initial
public offering price (with an additional underwriting commission), as may be
set forth in the accompanying Prospectus Supplement. If such Issuer Trust grants
any over-allotment option, the terms of such over-allotment option will be set
forth in the Prospectus Supplement for such Capital Securities.
Underwriters and dealers may engage in transactions with, or perform
services for, the Corporation and/or the applicable Issuer Trust and/or any of
their affiliates in the ordinary course of business.
The Junior Subordinated Debentures and the Capital Securities will be new
issues of securities and will have no established trading market. Any
underwriters to whom Junior Subordinated Debentures or Capital Securities are
sold for public offering and sale may make a market in such Junior Subordinated
Debentures and Capital Securities, but such underwriters will not be obligated
to do so and may discontinue any market making at any time without notice. Such
Junior Subordinated Debentures or Capital Securities may or may not be listed on
35
<PAGE> 37
a national securities exchange or the Nasdaq National Market. No assurance can
be given as to the liquidity of or the existence of trading markets for any
Junior Subordinated Debentures or Capital Securities.
ACCOUNTING TREATMENT
For financial reporting purposes, each Issuer Trust will be treated as a
subsidiary of the Corporation and, accordingly, the accounts of the Issuer Trust
will be included in the consolidated financial statements of the Corporation.
Capital Securities will be included in the consolidated balance sheets of the
Corporation and appropriate disclosures about Capital Securities, Guarantees and
Junior Subordinated Debentures will be included in the notes to the consolidated
financial statements of the Corporation. For financial reporting purposes,
Distributions on Capital Securities will be recorded in the consolidated
statements of income of the Corporation.
LEGAL MATTERS
Unless otherwise indicated in the applicable Prospectus Supplement, certain
legal matters will be passed upon for the Corporation by John F. Fulgoney,
Senior Counsel to the Corporation, and for the Issuer Trusts by Richards, Layton
& Finger, special Delaware counsel to the Issuer Trusts and the Corporation. As
of March 31, 1998, Mr. Fulgoney was the beneficial owner of approximately 4,421
shares of common stock, par value $5 per share, of the Corporation under the
Corporation's employee plans. Mr. Fulgoney also holds unexercised options
granted under the Corporation's stock option and incentive plans to purchase
24,800 shares of such common stock.
EXPERTS
The consolidated financial statements of the Corporation incorporated by
reference in the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1997, have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon incorporated by reference therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given by the
authority of such firm as experts in accounting and auditing.
Such financial statements are, and audited financial statements to be
included in subsequently filed documents will be, incorporated herein in
reliance upon the reports of independent auditors pertaining to such financial
statements (to the extent covered by consents filed with the Commission) given
upon the authority of such firms as experts in accounting and auditing.
36
<PAGE> 38
No dealer, salesperson or other
person has been authorized to give
any information or to make any
representations other than those
contained or incorporated by
reference in the Prospectus
Supplement or the Prospectus in
connection with the offer made by
the Prospectus Supplement and the
Prospectus, and, if given or made,
such information or representations
must not be relied upon as having
been authorized. Neither the
delivery of the Prospectus
Supplement and the Prospectus nor
any sale made under the Prospectus
Supplement and the Prospectus shall
under any circumstances create an
implication that there has been no
change in the affairs of the Issuer
Trust or PNC Bank Corp. since the
date hereof. The Prospectus
Supplement and the Prospectus do not
constitute an offer or solicitation
by anyone in any jurisdiction in
which such offer or solicitation is
not authorized or in which the
person making such solicitation is
not qualified to do so or to anyone
to whom it is unlawful to make such
offer or solicitation.
- --------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................... 2
Incorporation of Certain Documents by
Reference............................. 3
PNC Bank Corp. ......................... 4
Consolidated Ratio of Earnings to Fixed
Charges............................... 4
The Issuer Trusts....................... 4
Use of Proceeds......................... 5
Description of Junior Subordinated
Debentures............................ 5
Description of Capital Securities....... 17
Book-Entry Issuance..................... 27
Description of Guarantees............... 29
Relationship among the Capital
Securities, the Corresponding Junior
Subordinated Debentures and the
Guarantees............................ 31
Supervision, Regulation and Other
Matters............................... 33
Plan of Distribution.................... 35
Accounting Treatment.................... 36
Legal Matters........................... 36
Experts................................. 36
</TABLE>
PNC Capital Trust C
PNC Capital Trust D
PNC Capital Trust E
PNC Capital Trust F
Capital Securities
Fully and Unconditionally Guaranteed
to the extent described herein,
by
PNC Bank Corp.
--------------------------------------------------------
PROSPECTUS
--------------------------------------------------------
May 15, 1998
<PAGE> 39
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Estimated expenses in connection with the issuance and distribution of the
Securities being registered, other than underwriting discounts and commissions,
are as follows:
To be borne by PNC Bank Corp.:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee......... $177,000
Legal Fees and Expenses..................................... 100,000
Trustee Fees and Expenses................................... 20,000
Printing and Engraving...................................... 75,000
Rating Fees................................................. 275,000
Accounting Fees............................................. 50,000
Blue Sky and Legal Investment Fees and Expenses............. 15,000
Miscellaneous............................................... 13,000
--------
Total..................................................... $725,000
========
</TABLE>
- ---------
ITEM 16. EXHIBITS
An Exhibit Index immediately succeeds the signature page and precedes the
exhibits filed with this registration statement.
II-1
<PAGE> 40
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this Pre-Effective
Amendment No. 1 to the registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Pittsburgh, Commonwealth
of Pennsylvania, on this 14th day of May, 1998.
PNC BANK CORP.
By: /s/ ROBERT L. HAUNSCHILD
------------------------------------
Name: Robert L. Haunschild
Title: Senior Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Pre-Effective Amendment No. 1 to the registration statement has been signed
below by the following persons in the capacities indicated on this 14th day of
May, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
* Chairman, Chief Executive Officer and
- --------------------------------------------- Director (Principal Executive Officer)
Thomas H. O'Brien
/s/ ROBERT L. HAUNSCHILD Senior Vice President and Chief Financial
- --------------------------------------------- Officer (Principal Financial Officer)
Robert L. Haunschild
/s/ SAMUEL R. PATTERSON Senior Vice President and Controller
- --------------------------------------------- (Principal Accounting Officer)
Samuel R. Patterson
* Director
- ---------------------------------------------
Paul W. Chellgren
* Director
- ---------------------------------------------
Robert N. Clay
* Director
- ---------------------------------------------
George A. Davidson, Jr.
* Director
- ---------------------------------------------
David F. Girard-diCarlo
* Director
- ---------------------------------------------
C. G. Grefenstette
* Director
- ---------------------------------------------
William R. Johnson
* Director
- ---------------------------------------------
Bruce C. Lindsay
</TABLE>
II-2
<PAGE> 41
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
* Director
- ---------------------------------------------
Thomas Marshall
* Director
- ---------------------------------------------
W. Craig McClelland
* Director
- ---------------------------------------------
Jane G. Pepper
* President and Director
- ---------------------------------------------
Jackson H. Randolph
* Director
- ---------------------------------------------
James E. Rohr
* Director
- ---------------------------------------------
Roderic H. Ross
* Director
- ---------------------------------------------
Vincent A. Sarni
* Director
- ---------------------------------------------
Garry J. Scheuring
* Director
- ---------------------------------------------
Richard P. Simmons
* Director
- ---------------------------------------------
Thomas J. Usher
* Director
- ---------------------------------------------
Milton A. Washington
* Director
- ---------------------------------------------
Helge H. Wehmeier
</TABLE>
* hereby signs this Pre-Effective Amendment No. 1 to the Registration Statement
on Form S-3 on May 14, 1998 on behalf of each of the indicated persons for
whom he is attorney-in-fact pursuant to a power of attorney filed herein.
By: /s/ JOHN F. FULGONEY
------------------------------------
Name: John F. Fulgoney
Title: Corporate Secretary
II-3
<PAGE> 42
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, PNC
Capital Trust C, PNC Capital Trust D, PNC Capital Trust E and PNC Capital Trust
F each certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Pre-Effective
Amendment No. 1 to the registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Pittsburgh, Commonwealth
of Pennsylvania, on this 14th day of May, 1998.
PNC CAPITAL TRUST C
By: /s/ KEVIN R. GLASS
------------------------------------
Name: Kevin R. Glass
Title: Administrator
PNC CAPITAL TRUST D
By: /s/ KEVIN R. GLASS
------------------------------------
Name: Kevin R. Glass
Title: Administrator
PNC CAPITAL TRUST E
By: /s/ KEVIN R. GLASS
------------------------------------
Name: Kevin R. Glass
Title: Administrator
PNC CAPITAL TRUST F
By: /s/ KEVIN R. GLASS
------------------------------------
Name: Kevin R. Glass
Title: Administrator
II-4
<PAGE> 43
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<C> <S>
1.1 Form of Underwriting Agreement.***
3.1 Articles of Incorporation of PNC Bank Corp., as amended,
incorporated herein by reference to Exhibits 99.1 and 99.2
to Current Report on Form 8-K dated October 7, 1996 of PNC
Bank Corp. (File No. 1-9718).
3.2 By-laws of PNC Bank Corp., as amended, incorporated herein
by reference to Exhibit 99 to Current Report on Form 8-K
dated July 9, 1997 of PNC Bank Corp. (File No. 1-9718).
4.1 Certificate of Trust of PNC Capital Trust C.***
4.2 Certificate of Trust of PNC Capital Trust D.***
4.3 Certificate of Trust of PNC Capital Trust E.***
4.4 Certificate of Trust of PNC Capital Trust F.***
4.5 Trust Agreement of PNC Capital Trust C.***
4.6 Trust Agreement of PNC Capital Trust D.***
4.7 Trust Agreement of PNC Capital Trust E.***
4.8 Trust Agreement of PNC Capital Trust F.***
4.9 Form of Amended and Restated Trust Agreement for each of PNC
Capital Trust C, PNC Capital Trust D, PNC Capital Trust E
and PNC Capital Trust F among PNC Bank Corp., as Depositor,
Bankers Trust Company as Property Trustee, Bankers Trust
(Delaware) as Delaware Trustee and the several holders as
defined therein.***
4.10 Form of Junior Subordinated Indenture to be used in
connection with the issuance of the Junior Subordinated
Debentures.***
4.11 Form of Capital Security (included in Exhibit 4.9).***
4.12 Form of Junior Subordinated Debenture. (included in Exhibit
4.10).***
4.13 Form of Guarantee Agreement for each of PNC Capital Trust C,
PNC Capital Trust D, PNC Capital Trust E and PNC Capital
Trust F between PNC Bank Corp., as Guarantor and Bankers
Trust Company, as Trustee.***
5.1 Opinion of John F. Fulgoney, Senior Counsel to PNC Bank
Corp., as to the validity of the Junior Subordinated
Debentures and the Guarantees to be issued by PNC Bank
Corp.*
5.2 Opinion of Richards, Layton & Finger, Special Delaware
counsel to PNC Bank Corp., as to the validity of the Capital
Securities to be issued by PNC Capital Trust D, PNC Capital
Trust E and PNC Capital Trust F.***
8 Tax Opinion of Arnold & Porter.**
12.1 Computation of Ratio of Earnings to Fixed Charges.***
12.2 Computation of Ratio of Earnings to Fixed Charge and
Preferred Stock Dividend Requirements.***
23.1 Consent of Ernst & Young, LLP.***
23.2 Consent of John F. Fulgoney, Senior Counsel to PNC Bank
Corp. (included in Exhibit 5.1).*
23.3 Consent of Richards, Layton & Finger, Special Delaware
Counsel (included in Exhibit 5.2).***
23.4 Consent of Arnold & Porter, Special Tax Counsel.**
24.1 Powers of Attorney for the Company.***
25.1 Form T-1 Statement of Eligibility of Bankers Trust Company
with respect to PNC Capital Trust C.***
25.2 Form T-1 Statement of Eligibility of Bankers Trust Company
with respect to PNC Capital Trust D.***
</TABLE>
<PAGE> 44
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<C> <S>
25.3 Form T-1 Statement of Eligibility of Bankers Trust Company
with respect to PNC Capital Trust E.***
25.4 Form T-1 Statement of Eligibility of Bankers Trust Company
with respect to PNC Capital Trust F.***
</TABLE>
- ------------
* Filed herewith.
** To be filed under a Current Report on Form 8-K and incorporated herein by
reference.
*** Previously filed with the initial filing of this Registration Statement.
<PAGE> 1
EXHIBIT 5.1
May 14, 1998
Board of Directors
PNC Bank Corp.
249 Fifth Avenue
Pittsburgh, Pennsylvania 15222
Re: PNC Bank Corp.
PNC Capital Trust C
PNC Capital Trust D
PNC Capital Trust E
PNC Capital Trust F
Registration Statement on Form S-3
File No. 333-50651
Ladies and Gentlemen:
This opinion is issued in connection with the Registration Statement on
Form S-3 (the "Registration Statement") of PNC Bank Corp., a Pennsylvania
corporation (the "Corporation"), and PNC Capital Trust C, PNC Capital Trust D,
PNC Capital Trust E, and PNC Capital Trust F, each a Delaware business trust
(collectively, the "Trusts"), filed with the Securities and Exchange Commission
(the "Commission"), relating to (i) capital securities representing beneficial
ownership interests in the Trusts (the "Capital Securities"), (ii) junior
subordinated deferrable interest debentures to be issued by the Corporation (the
"Junior Subordinated Debentures"), and (iii) guarantees by the Corporation of
certain obligations of the Trusts related to the Capital Securities (the
"Guarantees").
As Senior Counsel to the Corporation, I have examined: (i) the form of
the Junior Subordinated Indenture (the "Indenture") to be entered into by the
Corporation and Bankers Trust Company, as Debenture Trustee, filed as Exhibit
4.10 to the Registration Statement; (ii) the form of the Guarantee Agreements
(each a "Guarantee Agreement") to be entered into by the Corporation and Bankers
Trust Company, as Guarantee Trustee, filed as Exhibit 4.13 to the Registration
Statement; (iii) the Registration Statement and the Exhibits filed with it and
as of this date incorporated therein by reference; and (iv) the resolutions
adopted by the Executive Committee of the Corporation's Board of Directors at a
meeting held on April 2, 1998. I have also examined such records, certificates
and other documents relating to the Corporation and the Trusts that I have
considered necessary or appropriate for the purposes of this opinion.
In making such examination and rendering the opinions set forth below,
I have assumed: (i) the genuineness and authenticity of all signatures on
original documents; (ii) the authenticity of all documents submitted to me as
originals; and (iii) the conformity to originals of all documents submitted to
me as certified, telecopied, photostated or reproduced copies and the
authenticity of all originals of such documents.
<PAGE> 2
Board of Directors
PNC Bank Corp.
May 14, 1998
Page 2
I have also assumed that: (i) the Registration Statement, and any
applicable amendments thereto (including post-effective amendments), will have
become effective under the Securities Act of 1933, as amended (the "Act"), at
the time of issuance, offering and sale of any such Capital Securities, Junior
Subordinated Debentures or Guarantees and (ii) the Indenture and the Guarantee
Agreement will be executed and delivered in substantially the forms filed as
Exhibits to the Registration Statement.
I am admitted to practice law in the Commonwealth of Pennsylvania and
do not express any opinion on any laws other than the laws of the Commonwealth
of Pennsylvania and the federal securities laws of the United States of America.
This opinion speaks as of today's date and is limited to present statutes,
regulations and judicial interpretations. In rendering this opinion, I assume no
obligation to revise or supplement this opinion should the present laws be
changed by legislative or regulatory action, judicial decision or otherwise or
should the agreements or other documents (or forms thereof) that I have examined
in connection with this opinion hereafter be changed.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, I am of the opinion that:
1. With respect to the Junior Subordinated Debentures to be issued
under the Indenture, when (i) such Indenture has been validly executed and
delivered by the Corporation and by the Debenture Trustee, (ii) the definitive
terms and conditions of such Junior Subordinated Debentures have been duly
established in accordance with the provisions of the Indenture, and (iii) such
Junior Subordinated Debentures have been duly executed, authenticated, issued
and delivered in accordance with the provisions of such Indenture and, upon
payment of the consideration therefor as contemplated by the Registration
Statement, such Junior Subordinated Debentures will constitute valid and legally
binding obligations of the Corporation, enforceable against the Corporation in
accordance with their terms.
2. With respect to the Guarantee to be issued pursuant to each
Guarantee Agreement, when such Guarantee Agreement has been validly executed and
delivered by the Corporation and by the Guarantee Trustee, the Guarantee will
constitute a valid and legally binding obligation of the Corporation,
enforceable against the Corporation in accordance with its terms.
My opinions set forth in paragraphs 1 and 2 above are subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
<PAGE> 3
Board of Directors
PNC Bank Corp.
May 14, 1998
Page 2
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the caption "Legal
Matters" in the Prospectus included in Part I of the Registration Statement. In
giving such consent, I do not thereby admit that I come within the category of
persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission thereunder.
Very truly yours,
/s/ JOHN F. FULGONEY
--------------------------
John F. Fulgoney
Senior Counsel
