<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 12, 1997
REGISTRATION NO. 333-25375
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
AMCORE FINANCIAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)
6022
(PRIMARY STANDARD INDUSTRIAL
CLASSIFICATION CODE NUMBER)
36-3183870
(I.R.S. EMPLOYER
IDENTIFICATION NO.)
AMCORE CAPITAL TRUST I
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS TRUST AGREEMENT)
DELAWARE
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)
6719
(PRIMARY STANDARD INDUSTRIAL
CLASSIFICATION CODE NUMBER)
36-7185946
(I.R.S. EMPLOYER
IDENTIFICATION NO.)
501 SEVENTH STREET
ROCKFORD, ILLINOIS 61104
(815) 968-2241
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
------------------------
JOHN R. HECHT
SENIOR VICE PRESIDENT
501 SEVENTH STREET
ROCKFORD, ILLINOIS 61104
(815) 968-2241
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENTS FOR SERVICE)
------------------------
COPIES TO:
WILLIAM R. KUNKEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM (ILLINOIS)
333 WEST WACKER DRIVE
CHICAGO, ILLINOIS 60606
(312) 407-0700
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) FEE(2)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Series B Capital Securities of AMCORE Capital Trust
I(3)............................................. $40,000,000 100% $40,000,000 $12,122
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Series B Junior Subordinated Deferrable Interest
Debentures of AMCORE Financial, Inc.(2)..........
- ---------------------------------------------------------------------------------------------------------------------------------
AMCORE Financial, Inc. Series B Guarantee with
respect to Series B Capital Securities(4)........
- ---------------------------------------------------------------------------------------------------------------------------------
Total.......................................... $40,000,000(5) 100% $40,000,000(6) $12,122
=================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee.
(2) No separate consideration will be received for the Series B Junior
Subordinated Deferrable Interest Debentures of AMCORE Financial, Inc. (the
"Junior Subordinated Debentures") distributed upon any liquidation of AMCORE
Capital Trust I.
(3) Includes $19,750,000 aggregate Liquidation Amount of Series B Capital
Securities of AMCORE Capital Trust I (together with a like aggregate
principal amount of AMCORE Financial, Inc.'s Series B Junior Subordinated
Deferrable Interest Debentures and Series B Guarantee with respect to such
Series B Capital Securities, the "Private Exchange Securities") issued and
delivered in connection with the Private Exchange (as defined herein). No
separate registration fee is payable in respect of the Private Exchange
Securities.
(4) No separate consideration will be received for the AMCORE Financial, Inc.
Series B Guarantee.
(5) This Registration Statement is deemed to cover rights of holders of Junior
Subordinated Debentures under the Indenture, the rights of holders of Series
B Capital Securities of AMCORE Capital Trust I under a Declaration of Trust,
the rights of holders of such Capital Securities under the Series B
Guarantee and certain backup undertakings as described herein.
(6) Such amount represents the aggregate liquidation amount of the AMCORE
Capital Trust I Series B Capital Securities to be exchanged hereunder and
the AMCORE Capital Trust I Series B Capital Securities issued in the Private
Exchange. Such amount is equal to the aggregate principal amount of Junior
Subordinated Debentures that may be distributed to holders of such Capital
Securities upon any liquidation of AMCORE Capital Trust I.
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BY ANY SALE OF THESE
SECURITIES IN ANY SATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MAY 12, 1997
AMCORE CAPITAL TRUST I
OFFER TO EXCHANGE ITS
9.35% SERIES B CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
FOR ANY AND ALL OF ITS OUTSTANDING
9.35% SERIES A CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
AMCORE FINANCIAL, INC.
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1997, UNLESS EXTENDED
------------------------
AMCORE Capital Trust I, a trust formed under the laws of the State of
Delaware (the "Trust"), hereby offers, upon the terms and subject to the
conditions set forth in this Prospectus (as the same may be amended or
supplemented from time to time, the "Prospectus") and in the accompanying Letter
of Transmittal (which together constitute the "Exchange Offer"), to exchange up
to $20,250,000 aggregate Liquidation Amount of its 9.35% Series B Capital
Securities (the "New Capital Securities") for a like Liquidation Amount of its
outstanding 9.35% Series A Capital Securities (the "Old Capital Securities"), of
which $20,250,000 aggregate Liquidation Amount is outstanding. Pursuant to the
Exchange Offer, AMCORE Financial, Inc., a Nevada corporation (the
"Corporation"), is also offering to exchange (i) its guarantee of payments of
cash distributions and payments on liquidation of the Trust or redemption of the
Old Capital Securities (the "Old Guarantee") for a like guarantee in respect of
the New Capital Securities (the "New Guarantee") and (ii) 20,250,000 aggregate
principal amount of its 9.35% Series B Junior Subordinated Deferrable Interest
Debentures due June 15, 2027 (the "Old Junior Subordinated Debentures") for a
like aggregate principal amount of its 9.35% Series A Junior Subordinated
Deferrable Interest Debentures due June 15, 2027 (the "New Junior Subordinated
Debentures"). The Old Capital Securities, the Old Guarantee and the Old Junior
Subordinated Debentures are collectively referred to herein as the "Old
Securities" and the New Capital Securities, the New Guarantee and the New Junior
Subordinated Debentures are collectively referred to herein as the "New
Securities."
The Prospectus also relates to the following securities that may from time
to time be sold by Robert W. Baird & Co., Incorporated (the "Selling Holder"):
(i) up to $19,750,000 aggregate Liquidation Amount of 9.35% Series B Capital
Securities (the "Private Exchange Capital Securities") of the Trust, (ii) the
guarantee by the Corporation of payments of cash distributions and payments on
liquidation of the Trust or redemption of the Private Exchange Capital
Securities (the "Private Exchange Guarantee") and (iii) $19,750,000 aggregate
principal amount of 9.35% Series B Junior Subordinated Deferrable Interest
Debentures due June 15, 2027 (the "Private Exchange Junior Subordinated
Debentures") of the Corporation. The Private Exchange Capital Securities, the
Private Exchange Guarantee and the Private Exchange Junior Subordinated
Debentures are collectively referred to herein as the Private Exchange
Securities. The terms of the Private Exchange Securities are identical in all
material respects to the respective terms of the New Securities. Unless
otherwise indicated, or the context otherwise requires, references herein to the
New Securities include the Private Exchange Securities. See "Selling Holder" and
"Plan of Distribution -- Private Exchange Securities."
The terms of the New Securities are identical in all material respects to
the respective terms of the Old Securities, except that (i) the New Securities
have been registered under the Securities Act of 1933, as amended (the
"Securities Act"), and therefore will not be subject to certain restrictions on
transfer applicable to the Old Securities, (ii) the New Capital Securities will
not contain the $100,000 minimum Liquidation Amount transfer restriction, (iii)
the New Capital Securities will not provide for any increase in the distribution
rate thereon, (iv) the New Junior Subordinated Debentures will not contain the
$100,000 minimum principal amount transfer restriction and (v) the New Junior
Subordinated Debentures will not provide for any increase in the interest rate
thereon. See "Description of New Securities" and "Description of Old
Securities." The New Capital Securities are being offered for exchange or for
resale, as applicable, in order to satisfy certain obligations of the
Corporation and the Trust under the Registration Rights Agreement, dated as of
March 25, 1997 (the "Registration Rights Agreement"), among the Corporation, the
Trust and the Initial Purchaser (as defined herein). In the event that the
Exchange Offer is consummated, any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer and the New Capital
Securities issued in the Exchange Offer will vote together as a single class for
purposes of determining whether holders of the requisite percentage in
outstanding Liquidation Amount thereof have taken certain actions or exercised
certain rights under the Declaration.
(continued on next page)
This Prospectus and the Letter of Transmittal are first being mailed to all
holders of Old Capital Securities on , 1997.
------------------------
SEE "RISK FACTORS" COMMENCING ON PAGE 16 FOR CERTAIN INFORMATION THAT SHOULD
BE CONSIDERED BY HOLDERS IN DECIDING WHETHER TO TENDER OLD CAPITAL SECURITIES IN
THE EXCHANGE OFFER.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1997.
<PAGE> 3
(continued from previous page)
The New Capital Securities and the Old Capital Securities (collectively,
the "Capital Securities") represent beneficial interests in the assets of the
Trust. The Corporation is the owner of all of the beneficial interests
represented by common securities of the Trust (the "Common Securities," and
together with the Capital Securities, the "Trust Securities"). The First
National Bank of Chicago is the Property Trustee of the Trust. The Trust exists
for the sole purpose of issuing the Trust Securities and investing the proceeds
thereof in the Junior Subordinated Debentures (as defined herein). The Junior
Subordinated Debentures will mature on June 15, 2027 (the "Stated Maturity
Date"). The Capital Securities will have a preference over the Common Securities
under certain circumstances with respect to cash distributions and amounts
payable on liquidation, redemption or otherwise. See "Description of New
Securities -- Description of New Capital Securities -- Subordination of Common
Securities."
As used herein, (i) the "Indenture" means the Indenture, dated as of March
25, 1997, as amended and supplemented from time to time, between the Corporation
and The First National Bank of Chicago, as Debenture Trustee (the "Debenture
Trustee"), (ii) the "Declaration" means the Amended and Restated Declaration of
Trust relating to the Trust among the Corporation, as Sponsor, The First
National Bank of Chicago, as Property Trustee (the "Property Trustee"), First
Chicago Delaware Inc., as Delaware Trustee, (the "Delaware Trustee"), and the
Administrative Trustees named therein (collectively, with the Property Trustee
and Delaware Trustee, the "Issuer Trustees"). In addition, as the context may
require, unless otherwise expressly stated, (i) the term "Capital Securities"
includes the Old Capital Securities and the New Capital Securities, (ii) the
term "Trust Securities" includes the Capital Securities and the Common
Securities, (iii) the term "Junior Subordinated Debentures" includes the Old
Junior Subordinated Debentures and the New Junior Subordinated Debentures and
(iv) the term "Guarantee" includes the Old Guarantee and the New Guarantee.
Holders of the New Capital Securities will be entitled to receive
cumulative cash distributions arising from the payment of interest on the New
Junior Subordinated Debentures, accruing from March 25, 1997 and payable
semi-annually in arrears on June 15 and December 15 of each year, commencing
June 15, 1997, at the annual rate of 9.35% of the Liquidation Amount of $1,000
per New Capital Security ("Distributions"). The Corporation will have the right
to defer payments of interest on the Junior Subordinated Debentures at any time
and from time to time for a period not exceeding 10 consecutive semi-annual
periods with respect to each deferral period (each, an "Extension Period"),
provided that no Extension Period shall end on a date other than an Interest
Payment Date (as defined herein) or extend beyond the Stated Maturity Date. Upon
the termination of any such Extension Period and the payment of all amounts then
due, the Corporation may elect to begin a new Extension Period, subject to the
requirements set forth in the Indenture. If and for so long as interest payments
on the Junior Subordinated Debentures are so deferred, Distributions on the
Trust Securities will also be deferred and the Corporation will not be
permitted, subject to certain exceptions described herein, to declare or pay any
cash distributions with respect to the Corporation's capital stock (which
includes common and preferred stock) or to make any payment with respect to debt
securities of the Corporation that rank pari passu with or junior to the Junior
Subordinated Debentures. During an Extension Period, interest on the Junior
Subordinated Debentures will continue to accrue (and the amount of Distributions
to which holders of the Trust Securities are entitled will continue to
accumulate) at the rate of 9.35% per annum, compounded semi-annually, and
holders of Trust Securities will be required to accrue such deferred interest
income for United States federal income tax purposes prior to receipt of cash
payments attributable to such interest income. See "Description of New
Securities -- Description of New Junior Subordinated Debentures -- Option to
Extend Interest Payment Date" and "Certain Federal Income Tax Considerations --
Interest Income and Original Issue Discount."
Through the Guarantee, the guarantee agreement of the Corporation relating
to the Common Securities (the "Common Guarantee"), the Declaration, the Junior
Subordinated Debentures and the Indenture, taken together, the Corporation has
guaranteed or will guarantee, as the case may be, fully, irrevocably and
unconditionally, all of the Trust's obligations under the Trust Securities. See
"Relationship Among the New Capital Securities, the New Junior Subordinated
Debentures and the New Guarantee -- Full and Unconditional Guarantee." The Old
Guarantee and the Common Guarantee guarantees, and the New Guarantee will
2
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(continued from previous page)
guarantee, payments of Distributions and payments on liquidation or redemption
of the Trust Securities, but in each case only to the extent that the Trust
holds funds on hand legally available therefor and has failed to make such
payments, as described herein. See "Description of New Securities -- Description
of New Guarantee." If the Corporation fails to make a required payment on the
Junior Subordinated Debentures, the Trust will not have sufficient funds to make
the related payments, including Distributions, on the Trust Securities. The
Guarantee and the Common Guarantee will not cover any such payment when the
Trust does not have sufficient funds on hand legally available therefor. In such
event, a holder of Capital Securities may institute a legal proceeding directly
against the Corporation to enforce its rights in respect of such payment. See
"Description of New Securities -- Description of New Junior Subordinated
Debentures -- Enforcement of Certain Rights By Holders of New Capital
Securities." The obligations of the Corporation under the Guarantee, the Common
Guarantee and the Junior Subordinated Debentures will be subordinate and junior
in right of payment to all Senior Indebtedness (as defined in "Description of
New Securities -- Description of New Junior Subordinated Debentures --
Subordination").
The Trust Securities will be subject to mandatory redemption in a Like
Amount (as defined herein), (i) in whole but not in part, on the Stated Maturity
Date upon repayment of the Junior Subordinated Debentures at a redemption price
equal to the principal amount of, plus accrued and unpaid interest on, the
Junior Subordinated Debentures (the "Maturity Redemption Price"), (ii) in whole
but not in part, at any time before March 1, 2007 (the "Initial Optional
Prepayment Date"), contemporaneously with the optional prepayment by the
Corporation of the Junior Subordinated Debentures, upon the occurrence and
continuation of a Special Event (as defined herein) at a redemption price equal
to the Special Event Prepayment Price (as defined herein) (the "Special Event
Redemption Price"), and (iii) in whole or in part, on or after the Initial
Optional Prepayment Date, contemporaneously with the optional prepayment by the
Corporation of the Junior Subordinated Debentures, at a redemption price equal
to the Optional Prepayment Price (as defined herein) (the "Optional Redemption
Price"). Any of the Maturity Redemption Price, the Special Event Redemption
Price and the Optional Redemption Price may be referred to herein as the
"Redemption Price." See "Description of New Securities -- Description of New
Capital Securities -- Redemption."
Subject to the Corporation having received prior approval of the Board of
Governors of the Federal Reserve System (the "Federal Reserve"), if then
required under applicable capital guidelines or policies of the Federal Reserve,
the Junior Subordinated Debentures will be prepayable prior to the Stated
Maturity Date at the option of the Corporation (i) on or after the Initial
Optional Prepayment Date, in whole or in part, at a prepayment price (the
"Optional Prepayment Price") equal to 104.675% of the principal amount thereof
on the Initial Optional Prepayment Date, declining ratably on each March 1
thereafter to 100% on or after March 1, 2017, plus accrued and unpaid interest
thereon to the date of prepayment, or (ii) at any time before the Initial
Optional Prepayment Date, in whole but not in part, upon the occurrence and
continuation of a Special Event, at a prepayment price (the "Special Event
Prepayment Price") equal to the greater of (a) 100% of the principal amount
thereof or (b) the sum, as determined by a Quotation Agent (as defined herein),
of the present values of the principal amount and premium payable as part of the
Optional Prepayment Price with respect to an optional redemption of such Junior
Subordinated Debentures on the Initial Optional Prepayment Date, together with
scheduled payments of interest from the prepayment date to the Initial Optional
Prepayment Date, in each case, discounted to the prepayment date on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Adjusted Treasury Rate (as defined herein) plus, in either case, accrued
and unpaid interest thereon to the date of prepayment. Either of the Optional
Prepayment Price or the Special Event Prepayment Price may be referred to herein
as the "Prepayment Price." See "Description of New Securities -- Description of
New Junior Subordinated Debentures -- Optional Prepayment" and "-- Special Event
Prepayment."
The Corporation, as the holder of the outstanding Common Securities, will
have the right at any time to terminate the Trust and cause a Like Amount of the
Junior Subordinated Debentures to be distributed to the holders of the Trust
Securities in liquidation of the Trust, subject to (i) the Corporation having
received an opinion of counsel to the effect that such distribution will not be
a taxable event to holders of the Capital Securities and (ii) the prior approval
of the Federal Reserve, if then required under applicable capital
3
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(continued from previous page)
guidelines or policies of the Federal Reserve. Unless the Junior Subordinated
Debentures are distributed to the holders of the Trust Securities, in the event
of a liquidation of the Trust as described herein, after satisfaction of
liabilities to creditors of the Trust as required by applicable law, the holders
of the Trust Securities generally will be entitled to receive a Liquidation
Amount of $1,000 per Trust Security plus accumulated and unpaid Distributions
thereon to the date of payment. See "Description of New Securities --
Description of New Capital Securities -- Liquidation of the Trust and
Distribution of Junior Subordinated Debentures" and "Certain Federal Income Tax
Considerations -- Distribution of Junior Subordinated Debentures to Holders of
Capital Securities."
The Trust is making the Exchange Offer of the New Capital Securities in
reliance on the position of the staff of the Division of Corporation Finance of
the Securities and Exchange Commission (the "Commission") as set forth in
certain interpretive letters addressed to third parties in other transactions.
However, neither the Corporation nor the Trust has sought its own interpretive
letter and there can be no assurance that the staff of the Division of
Corporation Finance of the Commission would make a similar determination with
respect to the Exchange Offer as it has in such interpretive letters to third
parties. Based on these interpretations by the staff of the Division of
Corporation Finance of the Commission, and subject to the two immediately
following sentences, the Corporation and the Trust believe that New Capital
Securities issued pursuant to this Exchange Offer in exchange for Old Capital
Securities may be offered for resale, resold and otherwise transferred by a
holder thereof (other than a holder who is a broker-dealer) without further
compliance with the registration and prospectus delivery requirements of the
Securities Act, provided that such New Capital Securities are acquired in the
ordinary course of such holder's business and that such holder is not
participating, and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the Securities Act) of
such New Capital Securities. However, any holder of Old Capital Securities who
is an "affiliate" of the Corporation or the Trust or who intends to participate
in the Exchange Offer for the purpose of distributing New Capital Securities, or
any broker-dealer who purchased Old Capital Securities from the Trust to resell
pursuant to Rule 144A under the Securities Act ("Rule 144A") or any other
available exemption under the Securities Act, (a) will not be able to rely on
the interpretations of the staff of the Division of Corporation Finance of the
Commission set forth in the above-mentioned interpretive letters, (b) will not
be permitted or entitled to tender such Old Capital Securities in the Exchange
Offer and (c) must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any sale or other transfer
of such Old Capital Securities unless such sale is made pursuant to an exemption
from such requirements. In addition, as described below, if any broker-dealer
holds Old Capital Securities acquired for its own account as a result of
market-making or other trading activities and exchanges such Old Capital
Securities for New Capital Securities, then such broker-dealer must deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resales of such New Capital Securities.
Each holder of Old Capital Securities who wishes to exchange Old Capital
Securities for New Capital Securities in the Exchange Offer will be required to
represent that (i) it is not an "affiliate" of the Corporation or the Trust,
(ii) any New Capital Securities to be received by it are being acquired in the
ordinary course of its business, (iii) it has no arrangement or understanding
with any person to participate in a distribution (within the meaning of the
Securities Act) of such New Capital Securities, and (iv) if such holder is not a
broker-dealer, such holder is not engaged in, and does not intend to engage in,
a distribution (within the meaning of the Securities Act) of such New Capital
Securities. In addition, the Corporation and the Trust may require such holder,
as a condition to such holder's eligibility to participate in the Exchange
Offer, to furnish to the Corporation and the Trust (or an agent thereof) in
writing information as to the number of "beneficial owners" (within the meaning
of Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) on behalf of whom such holder holds the Capital Securities to
be exchanged in the Exchange Offer. Each broker-dealer that receives New Capital
Securities for its own account pursuant to the Exchange Offer must acknowledge
that it acquired the Old Capital Securities for its own account as the result of
market-making activities or other trading activities and must agree that it will
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such New Capital Securities. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will
4
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(continued from previous page)
not be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. Based on the position taken by the staff of the Division of
Corporation Finance of the Commission in the interpretive letters referred to
above, the Corporation and the Trust believe that broker-dealers who acquired
Old Capital Securities for their own accounts, as a result of market-making
activities or other trading activities ("Participating Broker-Dealers"), may
fulfill their prospectus delivery requirements with respect to the New Capital
Securities received upon exchange of such Old Capital Securities (other than Old
Capital Securities which represent an unsold allotment from the original sale of
the Old Capital Securities) with a prospectus meeting the requirements of the
Securities Act, which may be the prospectus prepared for an exchange offer so
long as it contains a description of the plan of distribution with respect to
the resale of such New Capital Securities. Accordingly, this Prospectus, as it
may be amended or supplemented from time to time, may be used by a Participating
Broker-Dealer during the period referred to below in connection with resales of
New Capital Securities received in exchange for Old Capital Securities where
such Old Capital Securities were acquired by such Participating Broker-Dealer
for its own account as a result of market-making or other trading activities.
Subject to certain provisions set forth in the Registration Rights Agreement,
the Corporation and the Trust have agreed that this Prospectus, as it may be
amended or supplemented from time to time, may be used by a Participating
Broker-Dealer in connection with resales of such New Capital Securities for a
period ending 90-days after the Expiration Date (as defined herein) (subject to
extension under certain limited circumstances described below) or, if earlier,
when all such New Capital Securities have been disposed of by such Participating
Broker-Dealer. See "Plan of Distribution." However, a Participating
Broker-Dealer who intends to use this Prospectus in connection with the resale
of New Capital Securities received in exchange for Old Capital Securities
pursuant to the Exchange Offer must notify the Corporation or the Trust, or
cause the Corporation or the Trust to be notified, on or prior to the Expiration
Date, that it is a Participating Broker-Dealer. Such notice may be given in the
space provided for that purpose in the Letter of Transmittal or may be delivered
to the Exchange Agent at one of the addresses set forth herein under "The
Exchange Offer -- Exchange Agent." Any Participating Broker-Dealer who is an
"affiliate" of the Corporation or the Trust may not rely on such interpretive
letters and must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction.
See "The Exchange Offer -- Resales of New Capital Securities."
In that regard, each Participating Broker-Dealer who surrenders Old Capital
Securities pursuant to the Exchange Offer will be deemed to have agreed, by
execution of the Letter of Transmittal, that, upon receipt of notice from the
Corporation or the Trust of the occurrence of any event or the discovery of any
fact which makes any statement contained or incorporated by reference in this
Prospectus untrue in any material respect or which causes this Prospectus to
omit to state a material fact necessary in order to make the statements
contained or incorporated by reference herein, in light of the circumstances
under which they were made, not misleading or of the occurrence of certain other
events specified in the Registration Rights Agreement, such Participating
Broker-Dealer will suspend the sale of New Capital Securities (or the New
Guarantee or the New Junior Subordinated Debentures, as applicable) pursuant to
this Prospectus until the Corporation or the Trust has amended or supplemented
this Prospectus to correct such misstatement or omission and has furnished
copies of the amended or supplemented Prospectus to such Participating
Broker-Dealer or the Corporation or the Trust has given notice that the sale of
the New Capital Securities (or the New Guarantee or the New Junior Subordinated
Debentures, as applicable) may be resumed, as the case may be. If the
Corporation or the Trust gives such notice to suspend the sale of the New
Capital Securities (or the New Guarantee or the New Junior Subordinated
Debentures, as applicable), it shall extend the 90-day period referred to above
during which Participating Broker-Dealers are entitled to use this Prospectus in
connection with the resale of New Capital Securities by the number of days
during the period from and including the date of the giving of such notice to
and including the date when Participating Broker-Dealers shall have received
copies of the amended or supplemented Prospectus necessary to permit resales of
the New Capital Securities or to and including the date on which the Corporation
or the Trust has given notice that the sale of New Capital Securities (or the
New Guarantee or the New Junior Subordinated Debentures, as applicable) may be
resumed, as the case may be.
5
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(continued from previous page)
The Selling Holder, acting as principal for its own account, directly,
through agents designated from time to time, or through dealers or underwriters
also to be designated, may sell the Private Exchange Securities from time to
time on terms to be determined at the time of sale. See "Plan of Distribution --
Private Exchange Securities." The Selling Holder and any broker-dealers, agents
or underwriters that participate with the Selling Holder in the distribution of
the Private Exchange Securities may be deemed to be "underwriters" within the
meaning of the Securities Act, and any commissions received by them and any
profit on the resale of the Private Exchange Securities purchased by them may be
deemed to be underwriting commissions or discounts under the Securities Act. For
information concerning indemnification arrangements among the Corporation, the
Trust and the Selling Holder, see "Plan of Distribution -- Private Exchange
Securities."
Prior to the Exchange Offer, there has been only a limited secondary market
and no public market for the Old Capital Securities. The New Capital Securities
will be a new issue of securities for which there currently is no market.
Although the Initial Purchaser has informed the Corporation and the Trust that
it currently intends to make a market in the New Capital Securities, it is not
obligated to do so, and any such market making may be discontinued at any time
without notice. Accordingly, there can be no assurance as to the development or
liquidity of any market for the New Capital Securities. The Corporation and the
Trust currently do not intend to apply for listing of the New Capital Securities
on any securities exchange or for quotation through the National Association of
Securities Dealers Automated Quotation System.
Any Old Capital Securities not tendered and accepted in the Exchange Offer
will remain outstanding and will be entitled to all the same rights and will be
subject to the same limitations applicable thereto under the Declaration (except
for those rights which terminate upon consummation of the Exchange Offer).
Following consummation of the Exchange Offer, the holders of Old Capital
Securities will continue to be subject to all of the existing restrictions upon
transfer thereof and neither the Corporation nor the Trust will have any further
obligation to such holders (other than under certain limited circumstances) to
provide for registration under the Securities Act of the Old Capital Securities
held by them. To the extent that Old Capital Securities are tendered and
accepted in the Exchange Offer, a holder's ability to sell untendered Old
Capital Securities could be adversely affected. See "Risk Factors --
Consequences of a Failure to Exchange Old Capital Securities."
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ THIS PROSPECTUS
AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO
TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.
Old Capital Securities may be tendered for exchange on or prior to 5:00
p.m., New York City time, on , 1997 (such time on such date being
hereinafter called the "Expiration Date"), unless the Exchange Offer is extended
by the Corporation or the Trust (in which case the term "Expiration Date" shall
mean the latest date and time to which the Exchange Offer is extended). Tenders
of Old Capital Securities may be withdrawn at any time on or prior to the
Expiration Date. The Exchange Offer is not conditioned upon any minimum
Liquidation Amount of Old Capital Securities being tendered for exchange.
However, the Exchange Offer is subject to certain events and conditions which
may be waived by the Corporation or the Trust and to the terms and provisions of
the Registration Rights Agreement. Old Capital Securities may be tendered in
whole or in part having an aggregate Liquidation Amount of not less than
$100,000 (100 Capital Securities) or any integral multiple of $1,000 Liquidation
Amount (one Capital Security) in excess thereof. The Corporation has agreed to
pay all expenses of the Exchange Offer. See "The Exchange Offer -- Fees and
Expenses." Holders of the Old Capital Securities whose Old Capital Securities
are accepted for exchange will not receive Distributions on such Old Capital
Securities and will be deemed to have waived the right to receive any
Distributions on such Old Capital Securities accumulated from and after March
25, 1997. See "The Exchange Offer -- Distributions on New Capital Securities."
Neither the Corporation nor the Trust will receive any cash proceeds from
the issuance of the New Capital Securities offered hereby. No dealer-manager is
being used in connection with this Exchange Offer. See "Use of Proceeds" and
"Plan of Distribution."
6
<PAGE> 8
(continued from previous page)
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THIS EXCHANGE
OFFER AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION OR THE TRUST. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE CORPORATION OR THE TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OR A SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR ANYONE TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION.
------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information....................................... 8
Incorporation of Certain Documents by Reference............. 8
Forward-Looking Statements.................................. 9
Summary..................................................... 10
Risk Factors................................................ 16
AMCORE Financial, Inc....................................... 22
Recent Developments......................................... 22
Use of Proceeds............................................. 27
Ratios of Earnings to Combined Fixed Charges................ 27
Capitalization.............................................. 28
Selected Consolidated Financial Data........................ 29
The Trust................................................... 30
The Exchange Offer.......................................... 30
Description of New Securities............................... 40
Description of Old Securities............................... 60
Relationship Among the New Capital Securities, the New
Junior Subordinated Debentures and the New Guarantee...... 61
Certain Federal Income Tax Considerations................... 62
ERISA Considerations........................................ 65
Selling Holder.............................................. 66
Plan of Distribution........................................ 66
Legal Matters............................................... 68
Experts..................................................... 68
</TABLE>
7
<PAGE> 9
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Exchange Act, and, in accordance therewith, files reports, proxy statements and
other information with the Commission. Reports, proxy statements and other
information concerning the Corporation can be inspected and copied at the
Commission's Public Reference Room, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, as well as the following Regional Offices of the
Commission: 7 World Trade Center, 13th Floor, New York, New York 10048 and 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material may be obtained by mail from the Commission's Public Reference Section,
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Such
reports and other information may also be accessed through the Commission's
electronic data gathering, analysis and retrieval system via electronic means,
including the Commission's web site on the Internet (http://www.sec.gov). Such
reports, proxy statements and other information may also be inspected at the
offices of the NASD, 1735 K Street, N.W., Washington, D.C. 20006.
No separate financial statements of the Trust have been included herein.
The Corporation and the Trust do not consider that such financial statements
would be material to holders of the Capital Securities because the Trust is a
newly formed special purpose entity, has no operating history or independent
operations and is not engaged in and does not propose to engage in any activity
other than holding as trust assets the Junior Subordinated Debentures and
issuing the Trust Securities. See "The Trust" and "Description of New
Securities." In addition, the Corporation does not expect that the Trust will
file reports under the Exchange Act with the Commission.
This Prospectus constitutes a part of a registration statement on Form S-4
(the "Registration Statement") filed by the Corporation and the Trust with the
Commission under the Securities Act. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission, and
reference is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the Corporation, the
Trust and the New Securities. Any statements contained herein concerning the
provisions of any document are not necessarily complete, and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Corporation
pursuant to Section 13 of the Exchange Act are incorporated by reference in this
Prospectus:
(a) Annual Report on Form 10-K for the fiscal year ended December 31,
1996;
(b) Current Report on Form 8-K dated January 31, 1997; and
(c) Current Report on Form 8-K dated April 18, 1997.
All documents filed by the Corporation pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the New Securities offered hereby
shall be deemed to be incorporated by reference in this Prospectus and to be a
part hereof from the date of filing of such documents. Any statement contained
in this Prospectus or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus or any supplement thereto to the extent that a statement
contained herein or therein (or in any subsequently filed document that also is
or is deemed to be incorporated by reference herein or therein) modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
As used herein, the terms "Prospectus" and "herein" mean this Prospectus,
including the documents incorporated or deemed to be incorporated herein by
reference, as the same may be amended, supplemented or otherwise modified from
time to time. Statements contained in this Prospectus as to the contents of any
contract or other document referred to herein do not purport to be complete, and
where reference is made to
8
<PAGE> 10
the particular provisions of such contract or other document, such provisions
are qualified in all respects by reference to all of the provisions of such
contract or other document. The Corporation will provide without charge to each
person to whom this Prospectus has been delivered, upon the written or oral
request of such person, a copy of any or all of the documents referred to above
which have been or may be incorporated by reference herein (other than exhibits
to such documents unless such exhibits are specifically incorporated by
reference in such documents). Requests for such copies should be directed to
AMCORE Financial, Inc., 501 Seventh Street, Rockford, Illinois 61104, Attention:
John R. Hecht.
FORWARD-LOOKING STATEMENTS
THIS PROSPECTUS CONTAINS AND INCORPORATES BY REFERENCE CERTAIN
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995 WITH RESPECT TO THE RESULTS OF OPERATIONS AND
BUSINESSES OF AMCORE. THESE FORWARD-LOOKING STATEMENTS INVOLVE CERTAIN RISKS AND
UNCERTAINTIES. FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THOSE CONTEMPLATED, PROJECTED, FORECAST, ESTIMATED OR BUDGETED IN SUCH
FORWARD-LOOKING STATEMENTS INCLUDE, AMONG OTHERS, THE FOLLOWING POSSIBILITIES:
(i) HEIGHTENED COMPETITION, INCLUDING SPECIFICALLY THE INTENSIFICATION OF PRICE
COMPETITION, THE ENTRY OF NEW COMPETITORS AND THE FORMATION OF NEW PRODUCTS BY
NEW AND EXISTING COMPETITORS; (ii) ADVERSE STATE AND FEDERAL LEGISLATION AND
REGULATION; (iii) FAILURE TO OBTAIN NEW CUSTOMERS OR RETAIN EXISTING CUSTOMERS;
(iv) INABILITY TO CARRY OUT MARKETING AND/OR EXPANSION PLANS; (v) LOSS OF KEY
EXECUTIVES; (vi) CHANGES IN INTEREST RATES; (vii) GENERAL ECONOMIC AND BUSINESS
CONDITIONS WHICH ARE LESS FAVORABLE THAN EXPECTED; (viii) UNANTICIPATED CHANGES
IN INDUSTRY TRENDS; AND (ix) CHANGES IN FEDERAL RESERVE BOARD MONETARY POLICIES.
9
<PAGE> 11
SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Offering Memorandum.
AMCORE FINANCIAL, INC.
AMCORE is a multi-bank holding company incorporated under the laws of the
State of Nevada in 1982. As of December 31, 1996, AMCORE had five banks
operating in 41 locations and eight financial services companies. AMCORE's
primary region of operations includes the Illinois cities of Rockford, Elgin,
Woodstock, Carpentersville, Crystal Lake, Sterling, Dixon, Princeton, South
Beloit, Aledo, Rochelle, Ashton, Gridley, Mt. Morris, Mendota and Peru. At
December 31, 1996, AMCORE and its subsidiaries had total assets of $2.8 billion,
total deposits of $1.9 billion and stockholders' equity of $220.6 million. On
April 18, 1997, AMCORE completed its acquisition of First National Bancorp, Inc.
("First National") and, on January 30, 1997, AMCORE signed a definitive
agreement to acquire Country Bank Shares Corporation ("Country Bank"). See
"Recent Developments."
AMCORE CAPITAL TRUST I
The Trust is a statutory business trust formed under Delaware law pursuant
to (i) the declaration executed by the Corporation, as Sponsor, The First
National Bank of Chicago, as Property Trustee, First Chicago Delaware Inc., as
Delaware Trustee, and an individual Administrative Trustee named therein, and
(ii) the filing of a certificate of trust with the Delaware Secretary of State
on March 11, 1997. The Trust's affairs are conducted by the Issuer Trustees: the
Property Trustee, the Delaware Trustee and three individual Administrative
Trustees, who are employees or officers of, or affiliated with, the Corporation.
The Trust exists for the exclusive purposes of (i) issuing and selling the Trust
Securities, (ii) using the proceeds from the sale of the Trust Securities to
acquire the Junior Subordinated Debentures issued by the Corporation, and (iii)
engaging in only those other activities necessary, advisable or incidental
thereto (such as registering the transfer of the Trust Securities). Accordingly,
the Junior Subordinated Debentures will be the sole assets of the Trust, and
payments under the Junior Subordinated Debentures will be the sole revenue of
the Trust. All of the Common Securities are owned by the Corporation.
THE EXCHANGE OFFER
The Exchange Offer............ Up to $20,250,000 aggregate Liquidation Amount
of New Capital Securities are being offered in
exchange for a like aggregate Liquidation
Amount of Old Capital Securities. Old Capital
Securities may be tendered for exchange in
whole or in part in a Liquidation Amount of
$100,000 (100 Capital Securities) or any
integral multiple of $1,000 (one Capital
Security) in excess thereof. The Corporation
and the Trust are making the Exchange Offer in
order to satisfy their obligations under the
Registration Rights Agreement relating to the
Old Capital Securities. For a description of
the procedures for tendering Old Capital
Securities, see "The Exchange Offer --
Procedures for Tendering Old Capital
Securities."
Expiration Date............... 5:00 p.m., New York City time, on
, 1997, unless the Exchange Offer
is extended by the Corporation or the Trust (in
which case the Expiration Date will be the
latest date and time to which the Exchange
Offer is extended). See "The Exchange Offer --
Terms of the Exchange Offer."
10
<PAGE> 12
Conditions to the Exchange
Offer......................... The Exchange Offer is subject to certain
conditions, which may be waived by the
Corporation and the Trust in their sole
discretion. The Exchange Offer is not
conditioned upon any minimum Liquidation Amount
of Old Capital Securities being tendered. See
"The Exchange Offer -- Conditions to the
Exchange Offer."
Offer......................... The Corporation and the Trust reserve the right
in their sole and absolute discretion, subject
to applicable law, at any time and from time to
time, (i) to delay the acceptance of the Old
Capital Securities for exchange, (ii) to
terminate the Exchange Offer if certain
specified conditions have not been satisfied,
(iii) to extend the Expiration Date of the
Exchange Offer and retain all Old Capital
Securities tendered pursuant to the Exchange
Offer, subject, however, to the right of
holders of Old Capital Securities to withdraw
their tendered Old Capital Securities, or (iv)
to waive any condition or otherwise amend the
terms of the Exchange Offer in any respect. See
"The Exchange Offer -- Terms of the Exchange
Offer."
Withdrawal Rights............. Tenders of Old Capital Securities may be
withdrawn at any time on or prior to the
Expiration Date by delivering a written notice
of such withdrawal to the Exchange Agent in
conformity with certain procedures set forth
below under "The Exchange Offer -- Withdrawal
Rights."
Procedures for Tendering Old
Capital Securities............ Brokers, dealers, commercial banks, trust
companies and other nominees who hold Old
Capital Securities through DTC (as defined
herein) may effect tenders by book-entry
transfer in accordance with DTC's Automated
Tender Offer Program ("ATOP"). Holders of such
Old Capital Securities registered in the name
of a broker, dealer, commercial bank, trust
company or other nominee are urged to contact
such person promptly if they wish to tender old
Capital Securities. In order for Old Capital
Securities to be tendered by a means other than
by book-entry transfer, a Letter of Transmittal
must be completed and signed in accordance with
the instructions contained herein. The Letter
of Transmittal and any other documents required
by the Letter of Transmittal must be delivered
to the Exchange Agent by mail, facsimile, hand
delivery or overnight carrier and either such
Old Capital Securities must be delivered to the
Exchange Agent or specified procedures for
guaranteed delivery must be complied with. See
"The Exchange Offer -- Procedures for Tendering
Old Capital Securities."
Letters of Transmittal and certificates
representing Old Capital Securities should not
be sent to the Corporation or the Trust. Such
documents should only be sent to the Exchange
Agent. See "The Exchange Offer -- Exchange
Agent."
Resales of New Capital
Securities.................... The Corporation and the Trust are making the
Exchange Offer in reliance on the position of
the staff of the Division of Corporation
Finance of the Commission as set forth in
certain interpretive letters addressed to third
parties in other transactions. However, neither
the Corporation nor the Trust has sought its
own interpre-
11
<PAGE> 13
tive letter and there can be no assurance that
the staff of the Division of Corporation
Finance of the Commission would make a similar
determination with respect to the Exchange
Offer as it has in such interpretive letters to
third parties. Based on these interpretations
by the staff of the Division of Corporation
Finance of the Commission, and subject to the
two immediately following sentences, the
Corporation and the Trust believe that New
Capital Securities issued pursuant to this
Exchange Offer in exchange for Old Capital
Securities may be offered for resale, resold
and otherwise transferred by a holder thereof
(other than a holder who is a broker-dealer)
without further compliance with the
registration and prospectus delivery
requirements of the Securities Act, provided
that such New Capital Securities are acquired
in the ordinary course of such holder's
business and that such holder is not
participating, and has no arrangement or
understanding with any person to participate,
in a distribution (within the meaning of the
Securities Act) of such New Capital Securities.
However, any holder of Old Capital Securities
who is an "affiliate" of the Corporation or the
Trust or who intends to participate in the
Exchange Offer for the purpose of distributing
the New Capital Securities, or any
broker-dealer who purchased the Old Capital
Securities from the Trust to resell pursuant to
Rule 144A or any other available exemption
under the Securities Act, (a) will not be able
to rely on the interpretations of the staff of
the Division of Corporation Finance of the
Commission set forth in the above-mentioned
interpretive letters, (b) will not be permitted
or entitled to tender such Old Capital
Securities in the Exchange Offer and (c) must
comply with the registration and prospectus
delivery requirements of the Securities Act in
connection with any sale or other transfer of
such Old Capital Securities unless such sale is
made pursuant to an exemption from such
requirements. In addition, as described below,
if any broker-dealer holds Old Capital
Securities acquired for its own account as a
result of market-making or other trading
activities and exchanges such Old Capital
Securities for New Capital Securities, then
such broker-dealer must deliver a prospectus
meeting the requirements of the Securities Act
in connection with any resales of such New
Capital Securities.
Each holder of Old Capital Securities who
wishes to exchange Old Capital Securities for
New Capital Securities in the Exchange Offer
will be required to represent that (i) it is
not an "affiliate" of the Corporation or the
Trust, (ii) any New Capital Securities to be
received by it are being acquired in the
ordinary course of its business, (iii) it has
no arrangement or understanding with any person
to participate in a distribution (within the
meaning of the Securities Act) of such New
Capital Securities, and (iv) if such holder is
not a broker-dealer, such holder is not engaged
in, and does not intend to engage in, a
distribution (within the meaning of the
Securities Act) of such New Capital Securities.
Each broker-dealer that receives New Capital
Securities for its own account pursuant to the
Exchange Offer must acknowledge that it
acquired the Old Capital Securities for its own
account as the result of
12
<PAGE> 14
market-making activities or other trading
activities and must agree that it will deliver
a prospectus meeting the requirements of the
Securities Act in connection with any resale of
such New Capital Securities. The Letter of
Transmittal states that, by so acknowledging
and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an
"underwriter" within the meaning of the
Securities Act. Based on the position taken by
the staff of the Division of Corporation
Finance of the Commission in the interpretive
letters referred to above, the Corporation and
the Trust believe that Participating
Broker-Dealers who acquired Old Capital
Securities for their own accounts as a result
of market-making activities or other trading
activities may fulfill their prospectus
delivery requirements with respect to the New
Capital Securities received upon exchange of
such Old Capital Securities (other than Old
Capital Securities which represent an unsold
allotment from the original sale of the Old
Capital Securities) with a prospectus meeting
the requirements of the Securities Act, which
may be the prospectus prepared for an exchange
offer so long as it contains a description of
the plan of distribution with respect to the
resale of such New Capital Securities.
Accordingly, this Prospectus, as it may be
amended or supplemented from time to time, may
be used by a Participating Broker-Dealer in
connection with resales of New Capital
Securities received in exchange for Old Capital
Securities where such Old Capital Securities
were acquired by such Participating
Broker-Dealer for its own account as a result
of market-making or other trading activities.
Subject to certain provisions set forth in the
Registration Rights Agreement and to the
limitations described below under "The Exchange
Offer -- Resales of New Capital Securities,"
the Corporation and the Trust have agreed that
this Prospectus, as it may be amended or
supplemented from time to time, may be used by
a Participating Broker-Dealer in connection
with resales of such New Capital Securities for
a period ending 90-days after the Expiration
Date (subject to extension under certain
limited circumstances) or, if earlier, when all
such New Capital Securities have been disposed
of by such Participating Broker-Dealer. See
"Plan of Distribution." Any Participating
Broker-Dealer who is an "affiliate" of the
Corporation or the Trust may not rely on such
interpretive letters and must comply with the
registration and prospectus delivery
requirements of the Securities Act in
connection with any resale transaction. See
"The Exchange Offer -- Resales of New Capital
Securities."
Exchange Agent................ The exchange agent with respect to the Exchange
Offer is The First National Bank of Chicago
(the "Exchange Agent"). The addresses, and
telephone and facsimile numbers, of the
Exchange Agent are set forth in "The Exchange
Offer -- Exchange Agent" and in the Letter of
Transmittal.
Use of Proceeds............... Neither the Corporation nor the Trust will
receive any cash proceeds from the issuance of
the New Capital Securities offered hereby. See
"Use of Proceeds."
13
<PAGE> 15
Certain Federal Income Tax
Considerations; ERISA
Considerations................ Holders of Old Capital Securities should review
the information set forth under "Certain
Federal Income Tax Considerations" and "ERISA
Considerations" prior to tendering Old Capital
Securities in the Exchange Offer.
THE NEW CAPITAL SECURITIES
Securities Offered............ Up to $40,000,000 aggregate Liquidation Amount
of the Trust's New Capital Securities which
have been registered under the Securities Act
(Liquidation Amount $1,000 per New Capital
Security). The New Capital Securities will be
issued and the Old Capital Securities were
issued under the Declaration. The New Capital
Securities and any Old Capital Securities which
remain outstanding after consummation of the
Exchange Offer will vote together as a single
class for purposes of determining whether
holders of the requisite percentage in
outstanding Liquidation Amount thereof have
taken certain actions or exercised certain
rights under the Declaration. See "Description
of New Securities -- Description of New Capital
Securities -- Voting Rights; Amendment of the
Declaration." The terms of the New Capital
Securities are identical in all material
respects to the terms of the Old Capital
Securities, except that the New Capital
Securities have been registered under the
Securities Act and will not be subject to the
$100,000 minimum Liquidation Amount transfer
restriction and certain other restrictions on
transfer applicable to the Old Capital
Securities and will not provide for any
increase in the Distribution rate thereon. See
"The Exchange Offer -- Purpose of the Exchange
Offer," "Description of New Securities" and
"Description of Old Securities."
Distribution Dates............ June 15 and December 15 of each year,
commencing June 15, 1997.
Extension Periods............. Distributions on the New Capital Securities
will be deferred for the duration of any
Extension Period elected by the Corporation
with respect to the payment of interest on the
New Junior Subordinated Debentures. No
Extension Period will exceed 10 consecutive
semiannual periods, end on a date other than an
Interest Payment Date or extend beyond the
Stated Maturity Date. See "Description of New
Securities -- Description of New Junior
Subordinated Debentures -- Option to Extend
Interest Payment Date" and "Certain Federal
Income Tax Considerations -- Interest Income
and Original Issue Discount."
Ranking....................... The New Capital Securities will rank pari
passu, and payments thereon will be made pro
rata, with the Old Capital Securities and the
Common Securities except as described under
"Description of New Securities -- Description
of New Capital Securities -- Subordination of
Common Securities." The New Junior Subordinated
Debentures will rank pari passu with the Old
Junior Subordinated Debentures and all other
junior subordinated debentures (if any) issued
by the Corporation ("Other Debentures"), which
will be issued and sold (if at all) to other
trusts to be established by
14
<PAGE> 16
the Corporation (if any), in each case similar
to the Trust ("Other Trusts" ), and will
constitute unsecured obligations of the
Corporation and will rank subordinate and
junior in right of payment to all Senior
Indebtedness to the extent and in the manner
set forth in the Indenture. See "Description of
New Securities -- Description of New Junior
Subordinated Debentures." The New Guarantee
will rank pari passu with the Old Guarantee and
all other guarantees issued by the Corporation
with respect to capital securities issued by
Other Trusts ("Other Guarantees") and will
constitute an unsecured obligation of the
Corporation and will rank subordinate and
junior in right of payment to all Senior
Indebtedness to the extent and in the manner
set forth in the Guarantee Agreement. See
"Description of New Securities -- Description
of New Guarantee."
Redemption.................... The Trust Securities are subject to mandatory
redemption in a Like Amount, (i) in whole but
not in part, on the Stated Maturity Date upon
repayment of the Junior Subordinated
Debentures, (ii) in whole but not in part, at
any time before the Initial Optional Prepayment
Date contemporaneously with the optional
prepayment of the Junior Subordinated
Debentures by the Corporation upon the
occurrence and continuation of a Special Event
and (iii) in whole or in part, on or after the
Initial Optional Prepayment Date
contemporaneously with the optional prepayment
by the Corporation of the Junior Subordinated
Debentures, in each case at the applicable
Redemption Price. See "Description of New
Securities -- Description of New Capital
Securities -- Redemption" and "-- Description
of New Junior Subordinated Debentures --
Special Event Prepayment."
Rating........................ The New Capital Securities are expected to be
rated "BB+" by Duff & Phelps Credit Rating Co.
Absence of Market for the
New Capital Securities........ The New Capital Securities will be a new issue
of securities for which there currently is no
market. Although Robert W. Baird & Co.
Incorporated, the initial purchaser of the Old
Capital Securities (the "Initial Purchaser"),
has informed the Trust and the Corporation that
it currently intends to make a market in the
New Capital Securities, the Initial Purchaser
is not obligated to do so, and any such market
making may be discontinued at any time without
notice. Accordingly, there can be no assurance
as to the development or liquidity of any
market for the New Capital Securities. The
Trust and the Corporation do not intend to
apply for listing of the New Capital Securities
on any securities exchange or for quotation
through the Nasdaq National Market. See "Plan
of Distribution."
15
<PAGE> 17
RISK FACTORS
Prospective investors should carefully review the information contained
elsewhere in this Prospectus and should particularly consider the following
factors in connection with the Exchange Offer and the New Capital Securities
offered hereby.
RANKING OF SUBORDINATE OBLIGATIONS UNDER THE GUARANTEE AND JUNIOR SUBORDINATED
DEBENTURES
The obligations of the Corporation under the Guarantee and under the Junior
Subordinated Debentures will be unsecured and rank subordinate and junior in
right of payment to all present and future Senior Indebtedness of the
Corporation. No payment may be made of the principal of, or premium, if any, or
interest on the Junior Subordinated Debentures or in respect of any redemption,
retirement, purchase or other acquisition of any of the Junior Subordinated
Debentures, at any time when (i) there shall have occurred and be continuing a
default in any payment in respect of any Senior Indebtedness, or there has been
an acceleration of the maturity thereof because of a default or (ii) in the
event of the acceleration of the maturity of the Junior Subordinated Debentures
until payment has been made on all amounts of Senior Indebtedness. At December
31, 1996, the aggregate principal amount of outstanding Senior Indebtedness of
the Corporation was approximately $30.3 million. 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 (and thus the ability of holders of the Capital Securities to
benefit indirectly from such distribution) is subject to the prior claims of
creditors of that subsidiary (including depositors), except to the extent that
the Corporation may itself be recognized as a creditor of that subsidiary. At
December 31, 1996, the subsidiaries of the Corporation had total liabilities
(excluding liabilities owed to the Corporation) of approximately $2.56 billion.
Accordingly, the Junior Subordinated Debentures will be effectively subordinated
to all existing and future liabilities of the Corporation's subsidiaries
(including the Corporation's subsidiaries' deposit liabilities) and all
liabilities of any future subsidiaries of the Corporation. None of the
Indenture, the Guarantee, the Common Guarantee or the Declaration places any
limitation on the amount of secured or unsecured debt, including Senior
Indebtedness, that may be incurred by the Corporation or any of its
subsidiaries. See "Description of New Securities -- Description of New Guarantee
- -- Status" and "-- Description of New Junior Subordinated Debentures --
Subordination."
HOLDING COMPANY STRUCTURE; RESTRICTIONS ON DIVIDENDS BY SUBSIDIARIES
The ability of the Trust to pay amounts due on the Capital Securities is
dependent upon the Corporation making payments on the Junior Subordinated
Debentures as and when required. The Corporation is a holding company and
substantially all of the operating assets of the Corporation and its
consolidated subsidiaries are owned by such subsidiaries. The Corporation relies
primarily on interest and dividends from such subsidiaries to meet its
obligations for payment of principal and interest on its outstanding debt
obligations and corporate expenses. Accordingly, the Junior Subordinated
Debentures will be subordinated effectively 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. In addition, the bank
subsidiaries of the Corporation (the "Banks") are subject to certain
restrictions imposed by federal law on any extensions of credit to, and certain
other transactions with, the Corporation and certain other affiliates, and on
investments in stock or other securities thereof. Such restrictions prevent the
Corporation and such other affiliates from borrowing from the Banks unless the
loans are secured by various types of collateral. Further, such secured loans,
other transactions and investments by any of the Banks are generally limited in
amount as to the Corporation and as to each of such other affiliates to 10% of
such Bank's capital and surplus and as to the Corporation and all of such other
affiliates to an aggregate of 20% of such Bank's capital and surplus.
With respect to the Banks, there are regulatory limitations on the payment
of dividends directly or indirectly to the Corporation. At December 31, 1996,
under regulations of the Office of the Comptroller of the Currency (the "OCC")
and applicable state banking authorities, the total capital available for
payment of dividends by the Banks to the Corporation was approximately $33.7
million. However, the OCC has the power to prohibit any act, including the
payment of dividends, if such act would reduce bank capital to a point that,
16
<PAGE> 18
in its opinion, would render the bank undercapitalized and thus constitute an
unsafe or unsound banking practice.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSIDERATIONS
So long as no Debenture Event of Default (as defined herein) shall have
occurred and be continuing, the Corporation will have the right under the
Indenture to defer payments of interest on the Junior Subordinated Debentures at
any time or from time to time for a period not exceeding 10 consecutive
semiannual periods with respect to each Extension Period, provided that no
Extension Period shall end on a date other than an Interest Payment Date or
extend beyond the Stated Maturity Date. Upon any such deferral, semiannual
Distributions on the Trust Securities by the Trust will be deferred (and the
amount of Distributions to which holders of the Trust Securities are entitled
will accumulate additional Distributions thereon at the rate of 9.35% per annum,
compounded semiannually, but not exceeding the interest rate then accruing on
the Junior Subordinated Debentures) from the relevant payment date for such
Distributions during any such Extension Period.
Prior to the termination of any such Extension Period, the Corporation may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semiannual periods, end on
a date other than an Interest Payment Date or extend beyond the Stated Maturity
Date. Upon the termination of any Extension Period and the payment of all
interest then accrued and unpaid on the Junior Subordinated Debentures (together
with interest thereon at the annual rate of 9.35%, compounded semiannually, to
the extent permitted by applicable law), the Corporation may elect to begin a
new Extension Period, subject to the above requirements. There is no limitation
on the number of times that the Corporation may elect to begin an Extension
Period. See "Description of New Securities -- Description of New Capital
Securities -- Distributions" and "-- Description of New Junior Subordinated
Debentures -- Option to Extend Interest Payment Date."
The Corporation has no current plan to exercise its right to defer payments
of interest on the Junior Subordinated Debentures. However, should the
Corporation exercise its right to defer payments of interest on the Junior
Subordinated Debentures, each holder of Capital Securities will be required to
accrue income (as original issue discount ("OID")) in respect of the deferred
stated interest allocable to its Capital Securities for United States federal
income tax purposes, which will be allocated but not distributed to holders of
Capital Securities. As a result, during an Extension Period, each holder of
Capital Securities will recognize income for United States federal income tax
purposes in advance of the receipt of cash and will not receive the cash related
to such income from the Trust if the holder disposes of the Capital Securities
prior to the record date for the payment of Distributions thereafter. See
"Certain Federal Income Tax Considerations -- Interest Income and Original Issue
Discount" and "-- Sales or Redemption of Capital Securities."
Should the Corporation elect to exercise its right to defer payments of
interest on the Junior Subordinated Debentures, the market price of the Capital
Securities is likely to be affected. A holder that disposes of its Capital
Securities during an Extension Period, therefore, might not receive the same
return on its investment as a holder that continues to hold its Capital
Securities. In addition, the mere existence of the Corporation's right to defer
payments of interest on the Junior Subordinated Debentures may cause the market
price of the Capital Securities to be more volatile than the market prices of
other securities on which OID accrues and that are not subject to such
deferrals.
SPECIAL EVENT REDEMPTION
Upon the occurrence and continuation of a Special Event (including a Tax
Event or a Regulatory Capital Event, in each case, as defined under "Description
of New Securities -- Description of New Junior Subordinated Debentures --
Special Event Prepayment") prior to March 1, 2007, the Corporation will have the
right to prepay the Junior Subordinated Debentures in whole (but not in part) at
the Special Event Prepayment Price within 90 days following the occurrence of
such Special Event and therefore cause a mandatory redemption of the Trust
Securities at the Special Event Redemption Price. Any such redemption is subject
to the Corporation having received prior approval of the Federal Reserve, if
then required under
17
<PAGE> 19
applicable guidelines or policies of the Federal Reserve. See "Description of
New Securities -- Description of New Capital Securities -- Redemption."
PROPOSED TAX LEGISLATION
On February 6, 1997, as part of President Clinton's Fiscal 1998 Budget
Proposal, the United States Treasury Department proposed legislation that would,
among other things, deny an issuer a deduction for United States federal income
tax purposes for the payment of interest on instruments with characteristics
similar to the Junior Subordinated Debentures. If the proposed legislation were
enacted in its current form, it is not expected to apply to the Junior
Subordinated Debentures by reason of the currently proposed prospective
effective date. There can be no assurances, however, that the proposed
legislation, if enacted, or similar legislation enacted after the date hereof
would not adversely affect the tax treatment of the Junior Subordinated
Debentures, resulting in a Tax Event, which may permit the Corporation, upon
approval of the Federal Reserve (if then required under applicable capital
guidelines or policies of the Federal Reserve) to cause a redemption of the
Trust Securities at the Special Event Redemption Price by electing to prepay the
Junior Subordinated Debentures at the Special Event Prepayment Price. See
"Description of New Securities -- Description of New Capital Securities --
Redemption" and "-- Description of New Junior Subordinated Debentures -- Special
Event Prepayment." See also "Certain Federal Income Tax Consequences -- Proposed
Tax Legislation."
EXCHANGE OF CAPITAL SECURITIES FOR JUNIOR SUBORDINATED DEBENTURES
The Corporation will have the right at any time to terminate the Trust and
cause the Junior Subordinated Debentures to be distributed to the holders of the
Trust Securities in liquidation of the Trust. Such right is subject to (i) the
Corporation having received an opinion of counsel to the effect that such
distribution will not be a taxable event to holders of Capital Securities and
(ii) prior approval of the Federal Reserve, if then required. Under current
United States federal income tax law, a distribution of Junior Subordinated
Debentures upon the dissolution of the Trust would not be a taxable event to
holders of the Capital Securities. See "Certain Federal Income Tax
Considerations -- Distribution of Junior Subordinated Debentures to Holders of
Capital Securities."
POSSIBLE ADVERSE EFFECT ON MARKET PRICES
There can be no assurance as to the market prices for Capital Securities or
Junior Subordinated Debentures distributed to the holders of Capital Securities
if a termination of the Trust were to occur. Accordingly, the Capital Securities
or the Junior Subordinated Debentures may trade at a discount from the price
that the investor paid to purchase the Capital Securities offered hereby.
Because holders of Capital Securities may receive Junior Subordinated Debentures
in liquidation of the Trust and because Distributions are otherwise limited to
payments on the Junior Subordinated Debentures, prospective purchasers of New
Capital Securities are also making an investment decision with regard to the New
Junior Subordinated Debentures and should carefully review all the information
regarding the New Junior Subordinated Debentures contained herein. See
"Description of New Securities -- Description of New Junior Subordinated
Debentures."
RIGHTS UNDER THE GUARANTEE
The First National Bank of Chicago will act as Guarantee Trustee and will
hold the Guarantee for the benefit of the holders of the Capital Securities. The
First National Bank of Chicago will also act as Property Trustee and as
Debenture Trustee under the Indenture. First Chicago Delaware Inc. will act as
Delaware Trustee under the Declaration. The Guarantee will guarantee to the
holders of the Capital Securities the following payments, to the extent not paid
by the Trust: (i) any accumulated and unpaid Distributions required to be paid
on the Capital Securities, to the extent that the Trust has funds on hand
legally available therefor, (ii) the applicable Redemption Price with respect to
any Capital Securities called for redemption, to the extent that the Trust has
funds on hand legally available therefor, and (iii) upon a voluntary or
involuntary termination, winding up or liquidation of the Trust (unless the
Junior Subordinated Debentures are distributed
18
<PAGE> 20
to holders of the Capital Securities), the lesser of (a) the aggregate of the
Liquidation Amount and all accumulated and unpaid Distributions to the date of
payment, to the extent that the Trust has funds on hand legally available
therefor at such time and (b) the amount of assets of the Trust remaining
available for distribution to holders of the Capital Securities at such time.
The holders of a majority in Liquidation Amount of the Capital Securities will
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Guarantee Trustee in respect of the Guarantee or
to direct the exercise of any trust power conferred upon the Guarantee Trustee.
Any holder of the Capital Securities may institute a legal proceeding directly
against the Corporation to enforce its rights under the Guarantee without first
instituting a legal proceeding against the Trust, the Guarantee Trustee or any
other person or entity. If the Corporation defaults on its obligation to pay
amounts payable under the Junior Subordinated Debentures, the Trust will not
have sufficient funds for the payment of Distributions or amounts payable on
redemption of the Capital Securities or otherwise, and, in such event, holders
of the Capital Securities will not be able to rely upon the Guarantee for
payment of such amounts. Instead, in the event a Debenture Event of Default
shall have occurred and be continuing and such event is attributable to the
failure of the Corporation to pay principal of or premium, if any, or interest
on the Junior Subordinated Debentures on the payment date on which such payment
is due and payable, then a holder of Capital Securities may institute a legal
proceeding directly against the Corporation for enforcement of payment to such
holder of the principal of or premium, if any, or interest on such Junior
Subordinated Debentures having a principal amount equal to the Liquidation
Amount of the Capital Securities of such holder (a "Direct Action").
Notwithstanding any payments made to a holder of Capital Securities by the
Corporation in connection with a Direct Action, the Corporation shall remain
obligated to pay the principal of and premium, if any, and interest on the
Junior Subordinated Debentures, and the Corporation shall be subrogated to the
rights of the holder of such Capital Securities with respect to payments on the
Capital Securities to the extent of any payments made by the Corporation to such
holder in any Direct Action. Except as described herein, holders of Capital
Securities will not be able to exercise directly any other remedy available to
the holders of the Junior Subordinated Debentures or to assert directly any
other rights in respect of the Junior Subordinated Debentures. See "Description
of New Securities -- Description of New Junior Subordinated Debentures --
Enforcement of Certain Rights by Holders of Capital Securities," "Description of
New Junior Subordinated Debentures -- Debenture Events of Default" and "--
Description of New Guarantee." The Declaration will provide that each holder of
Capital Securities by acceptance thereof agrees to the provisions of the
Indenture.
LIMITED VOTING RIGHTS
Holders of Capital Securities generally will have limited voting rights
relating only to the modification of the terms of the Capital Securities, the
termination or liquidation of the Trust and the exercise of the Trust's rights
as holder of the Junior Subordinated Debentures. Holders of Capital Securities
will not be entitled to vote to appoint, remove or replace, or to increase or
decrease the number of, the Issuer Trustees, which voting rights are vested
exclusively in the holder of the Common Securities, except upon the occurrence
of certain events described herein. The Property Trustee, the Administrative
Trustees and the Corporation may amend the Trust Agreement without the consent
of holders of Capital Securities to ensure that the Trust will be classified for
United States federal income tax purposes as a grantor trust even if such action
adversely affects the interests of such holders. Holders of Capital Securities
will have no voting rights with respect to any matters submitted to a vote of
the Corporation's stockholders. See "Description of New Securities --
Description of New Capital Securities -- Voting Rights; Amendment of the
Declaration" and "-- Removal of Issuer Trustees."
CONSEQUENCES OF A FAILURE TO EXCHANGE OLD CAPITAL SECURITIES
The Old Capital Securities have not been registered under the Securities
Act or any state securities laws and therefore may not be offered, sold or
otherwise transferred except in compliance with the registration requirements of
the Securities Act and any other applicable securities laws, or pursuant to an
exemption therefrom or in a transaction not subject thereto, and in each case in
compliance with certain other conditions and restrictions. Old Capital
Securities which remain outstanding after consummation of the Exchange Offer
will continue to bear a legend reflecting such restrictions on transfer. In
addition, upon consummation of the
19
<PAGE> 21
Exchange Offer, holders of Old Capital Securities which remain outstanding will
not be entitled to any rights to have such Old Capital Securities registered
under the Securities Act or to any similar rights under the Registration Rights
Agreement (subject to certain limited exceptions). The Corporation and the Trust
do not intend to register under the Securities Act any Old Capital Securities
which remain outstanding after consummation of the Exchange Offer (subject to
such limited exceptions, if applicable). To the extent that Old Capital
Securities are tendered and accepted in the Exchange Offer, a holder's ability
to sell untendered Old Capital Securities could be adversely affected.
The New Capital Securities and any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer will vote together as a
single class for purposes of determining whether holders of the requisite
percentage in outstanding Liquidation Amount thereof have taken certain actions
or exercised certain rights under the Declaration. See "Description of New
Securities -- Description of New Capital Securities -- Voting Rights; Amendment
of the Declaration."
The Old Capital Securities provide, among other things, that, if a
registration statement relating to the Exchange Offer has not been filed by
August 22, 1997 and declared effective by September 21, 1997, the Distribution
rate borne by the Old Capital Securities commencing on September 22, 1997 will
increase by 0.25% per annum until the Exchange Offer is consummated. Upon
consummation of the Exchange Offer, holders of Old Capital Securities will not
be entitled to any increase in the Distribution rate thereon or any further
registration rights under the Registration Rights Agreement, except under
limited circumstances. See "Description of Old Capital Securities."
ABSENCE OF PUBLIC MARKET
The Old Capital Securities were issued to, and the Corporation believes
such securities are currently owned by, a relatively small number of beneficial
owners. The Old Capital Securities have not been registered under the Securities
Act and will be subject to restrictions on transferability if they are not
exchanged for the New Capital Securities. Although the New Capital Securities
may be resold or otherwise transferred by the holders (who are not affiliates of
the Corporation or the Trust) without compliance with the registration
requirements under the Securities Act, they will constitute a new issue of
securities with no established trading market. Old Capital Securities may be
transferred by the holders thereof only in blocks having a Liquidation Amount of
not less than $100,000 (100 Old Capital Securities). New Capital Securities may
be transferred by the holders thereof in blocks having a Liquidation Amount of
$1,000 (one New Capital Security) or integral multiples thereof. The Corporation
and the Trust have been advised by the Initial Purchaser that the Initial
Purchaser presently intends to make a market in the New Capital Securities.
However, the Initial Purchaser is not obligated to do so and any market-making
activity with respect to the New Capital Securities may be discontinued at any
time without notice. In addition, such market-making activity will be subject to
the limits imposed by the Securities Act and the Exchange Act and may be limited
during the Exchange Offer. Accordingly, no assurance can be given that an active
public or other market will develop for the New Capital Securities or the Old
Capital Securities or as to the liquidity of or the trading market for the New
Capital Securities or the Old Capital Securities. If an active public market
does not develop, the market price and liquidity of the New Capital Securities
may be adversely affected.
If a public trading market develops for the New Capital Securities, future
trading prices will depend on many factors, including, among other things,
prevailing interest rates, the Corporation's results and the market for similar
securities. Depending on prevailing interest rates, the market for similar
securities and other factors, including the financial condition of the
Corporation, the New Capital Securities may trade at a discount.
Notwithstanding the registration of the New Capital Securities in the
Exchange Offer, holders who are "affiliates" (as defined under Rule 405 of the
Securities Act) of the Corporation or the Trust may publicly offer for sale or
resell the New Capital Securities only in compliance with the provisions of Rule
144 under the Securities Act.
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<PAGE> 22
Each broker-dealer that receives New Capital Securities for its own account
in exchange for Old Capital Securities, where such Old Capital Securities were
acquired by such broker-dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such New Capital Securities. See "Plan of
Distribution."
EXCHANGE OFFER PROCEDURES
Subject to the conditions set forth under "The Exchange Offer -- Conditions
to the Exchange Offer," delivery of New Capital Securities in exchange for Old
Capital Securities tendered and accepted for exchange pursuant to the Exchange
Offer will be made only after timely receipt by the Exchange Agent of (i)
certificates for Old Capital Securities or a book-entry confirmation of a
book-entry transfer of Old Capital Securities into the Exchange Agent's account
at DTC, including an Agent's Message (as defined under "The Exchange Offer --
Acceptance for Exchange and Issuance of New Capital Securities") if the
tendering holder does not deliver a Letter of Transmittal, (ii) a completed and
signed Letter of Transmittal (or facsimile thereof), with any required signature
guarantees or, in the case of a book-entry transfer, an Agent's Message in lieu
of the Letter of Transmittal, and (iii) any other documents required by the
Letter of Transmittal. Therefore, holders of Old Capital Securities desiring to
tender such Old Capital Securities in exchange for New Capital Securities should
allow sufficient time to ensure timely delivery. Neither the Corporation nor the
Trust is under a duty to give notification of defects or irregularities with
respect to the tenders of Old Capital Securities for exchange.
21
<PAGE> 23
AMCORE FINANCIAL, INC.
AMCORE, a Nevada corporation, is a multi-bank holding company registered
under the federal Bank Holding Company Act of 1956, as amended (the "BHCA").
AMCORE is headquartered in Rockford, Illinois, and as of December 31, 1996
operated five banks in 41 locations and eight financial services companies.
AMCORE is a primary supplier of financial services in the Rockford area and a
number of northern Illinois communities. The primary region includes the cities
of Rockford, Elgin, Woodstock, Carpentersville, Crystal Lake, Sterling, Dixon,
Princeton, South Beloit, Aledo, Rochelle, Ashton, Gridley, Mt. Morris, Mendota
and Peru. AMCORE owns all of the outstanding common stock of AMCORE Bank N.A.,
Rockford; AMCORE Bank N.A., Northwest; AMCORE Bank N.A., Rock River Valley;
AMCORE Bank N.A., North Central and AMCORE Bank Aledo. AMCORE owns, directly or
indirectly, all of the outstanding common stock of AMCORE Mortgage, Inc.; AMCORE
Investment Group, N.A.; AMCORE Consumer Finance Company, Inc.; AMCORE Financial
Life Insurance Company; Rockford Mercantile Agency, Inc.; AMCORE Investment
Services, Inc.; AMCORE Capital Management, Inc. and AMCORE Insurance Group, Inc.
At December 31, 1996, AMCORE and its subsidiaries had total assets of $2.8
billion, total deposits of $1.9 billion and stockholders' equity of $220.6
million. During the past decade, AMCORE's total assets have grown from $950
million in 1985 to $2.8 billion in 1996 and the number of shares outstanding has
risen from 2.2 million to more than 14 million.
AMCORE provides various personal banking, commercial banking and related
financial services. AMCORE also conducts banking business through ten
supermarket branches which gives the customer convenient access to bank services
seven days a week. The principal executive offices of AMCORE are located at 501
Seventh Street, Rockford, Illinois 61104 and its telephone number is (815)
968-2241.
RECENT DEVELOPMENTS
ACQUISITIONS
On April 18, 1997, AMCORE completed its acquisition of First National
Bancorp, Inc. ("First National"). First National owns all of the outstanding
common stock of First National Bank and Trust ("FNBT") and operates FNBT at its
main office in Monroe, Wisconsin, and at branch locations in Green County,
Wisconsin, in Monroe and New Glarus, and in Dane County, Wisconsin, in
Belleville and Madison. First National operates FNI Corporation, a Nevada
subsidiary utilized for investment portfolio purposes. At December 31, 1996,
First National and its subsidiaries had total assets of $215.8 million, total
deposits of $192.2 million and stockholders' equity of $18.5 million. AMCORE
issued 1, 881,524 shares of common stock to the First National shareholders to
effect the merger. See "-- Pro Forma Balance Sheet, Income Statement and
Selected Ratios."
On January 30, 1997, AMCORE signed a definitive agreement to acquire
Country Bank Shares Corporation ("Country Bank"). Country Bank, a Wisconsin
corporation, is a five-bank holding company registered under the BHCA. Country
Bank has its main offices located in Mount Horeb, Wisconsin. Country Bank owns
all of the outstanding common stock of the State Bank of Mt. Horeb, Montello
State Bank and the State Bank of Argyle, 98.7% of the outstanding common stock
of Citizen's State Bank of Clinton and 83.8% of the outstanding common stock of
Belleville Bancshares Corporation ("Belleville"). Each of the above-referenced
subsidiaries has organized a wholly-owned Nevada investment subsidiary
respectively, as follows, CBSC Mt. Horeb, Inc., CBSC Montello, Inc., CBSC
Argyle, Inc., CBSC Clinton, Inc. and BBC Belleville, Inc. At December 31, 1996,
Country Bank and its subsidiaries had total assets of $301.6 million, total
deposits of $269.3 million and stockholders' equity of $18.2 million (includes
the historical results of Belleville, acquired on February 6, 1997 in a
transaction accounted for as a pooling-of-interests). AMCORE's acquisition of
Country Bank may not be consummated until the later of (i) the 30th day
following the date of approval by the Federal Reserve and (ii) the date the
State of Wisconsin Department of Financial Institutions, Division of Banking,
approves such transaction. See "-- Pro Forma Balance Sheet, Income Statement and
Selected Ratios."
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<PAGE> 24
PRO FORMA BALANCE SHEET, INCOME STATEMENT AND SELECTED RATIOS
The following unaudited pro forma combining balance sheet, statement of
income and selected ratios are based upon the historical results of AMCORE,
First National and Country Bank, giving effect to the acquisitions accounted for
as a pooling-of-interests. Pro forma adjustments, and the assumptions on which
they are based, are described in the accompanying footnotes to the pro forma
combining financial statements. The pro forma combining financial statements are
not necessarily indicative of the results that actually would have occurred had
the companies constituted a single entity during the respective periods, nor are
they indicative of future results of operations.
PRO FORMA CONSOLIDATED COMBINING BALANCE SHEETS(1)
AS OF DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA AMCORE
AMCORE FIRST COUNTRY COMBINED CAPITAL PRO FORMA PRO FORMA
HISTORICAL NATIONAL(1) BANK(2)(3) AMCORE TRUST 1 ADJUSTMENTS COMBINED
---------- ----------- ---------- --------- ------- ----------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents..... $ 87,740 $ 6,963 $ 10,680 $ 105,383 $ 105,383
Interest earning deposits in
banks....................... 156 299 216 671 671
Federal funds sold and other
short-term investments...... 12,706 1,365 11,891 25,962 25,962
Mortgage loans held for
sale........................ 11,252 184 614 12,050 12,050
Securities available for
sale........................ 1,138,351 23,081 52,976 1,214,408 $ 17,920(4) 1,232,328
Securities held to maturity... 10,368 34,512 9,665 54,545 54,545
---------- -------- -------- ---------- ---------- -------- ----------
Total securities............ $1,148,719 $ 57,593 $ 62,641 $1,268,953 $ 17,920 $1,286,873
Loans and leases, net of
unearned income............. 1,456,217 144,989 205,622 1,806,828 $ 41,238 (41,238)(5) 1,808,828
Allowance for loan and lease
losses...................... (14,996) (1,710) (2,588) (19,294) (19,294)
---------- -------- -------- ---------- ---------- -------- ----------
Net loans and leases........ $1,441,221 $143,279 $203,034 $1,787,534 $ 41,238 $(41,238) $1,787,534
Premises and equipment, net... 46,060 3,128 7,361 56,549 56,549
Intangible assets, net:....... 12,255 423 1,203 13,881 633(4) 14,514
Other real estate owned....... 595 36 289 920 920
Other assets.................. 53,846 2,561 3,629 60,036 78(6) (640)(6) 59,474
---------- -------- -------- ---------- ---------- -------- ----------
TOTAL ASSETS................ $2,814,550 $215,831 $301,558 $3,331,939 $ 41,316 $(23,325) $3,349,930
========== ======== ======== ========== ========== ======== ==========
LIABILITIES
Deposits:
Interest bearing............ $1,625,590 $172,265 $240,475 $2,038,330 $2,038,330
Non-interest bearing........ 264,426 19,977 28,871 313,274 313,274
---------- -------- -------- ---------- ---------- -------- ----------
Total deposits............ $1,890,016 $192,242 $269,346 $2,351,604 $2,351,604
Short-term borrowings......... 544,508 -- 3,457 547,965 $ (2,927)(3) 545,038
Long-term borrowings.......... 124,095 1,141 6,376 131,612 $ 40,000 (17,853)(4)(5) 153,759
Other liabilities............. 35,294 3,981 3,474 42,749 42,749
Minority interest............. -- -- 667 667 (667)(4) --
---------- -------- -------- ---------- ---------- -------- ----------
TOTAL LIABILITIES........... $2,593,913 $197,364 $283,320 $3,074,597 $ 40,000 $(21,447) $3,093,150
STOCKHOLDERS' EQUITY
Preferred stock ($1.00 par
value)...................... $ -- $ -- $ -- $ -- $ -- $ --
Common stock ($.33 par
value)...................... 4,976 628 634 6,238 1,238 (1,238)(5) 6,238
Additional paid-in capital.... 56,687 3,016 7,574 67,277 67,277
Retained earnings............. 166,602 14,776 10,028 191,406 78(6) (640)(6) 190,844
Net unrealized gain (loss) on
securities available for
sale........................ (2,005) 47 2 (1,956) (1,956)
Treasury stock and other...... (5,623) -- -- (5,623) (5,623)
---------- -------- -------- ---------- ---------- -------- ----------
TOTAL STOCKHOLDERS'
EQUITY.................... $ 220,637 $ 18,467 $ 18,238 $ 257,342 $ 1,316 $ (1,878) $ 256,780
---------- -------- -------- ---------- ---------- -------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY...... $2,814,550 $215,831 $301,558 $3,331,939 $ 41,316 $(23,325) $3,349,930
========== ======== ======== ========== ========== ======== ==========
</TABLE>
- -------------------------
(1) AMCORE issuance of 1,881,524 common shares in exchange for all the
outstanding shares of First National common stock. This transaction is based
on an exchange ratio of 7.54 AMCORE shares for each First National share.
(2) AMCORE issuance of 1,902,441 common shares in exchange for all the
outstanding shares of Country Bank common stock. This transaction is based
on an exchange ratio of 4.3287 AMCORE shares for each Country Bank share.
(3) Includes the historical results of Belleville, acquired on February 6, 1997
in a transaction accounted for as a pooling-of-interests.
(4) The proceeds of the capital securities issue were used to repay in full the
parent company long term debt of $13.6 and will be used to repay in full the
long term debt at First National of $600,000, repay in full the short term
and long term debt, excluding FHLB borrowings, at Country Bank of $6.58
million, purchase certain minority interests in subsidiaries of Country Bank
for $1.3 million, and for general corporate purposes.
(5) Reflects intercompany eliminations.
(6) Reflects the impact of pro forma statements of income adjustments.
23
<PAGE> 25
q
PRO FORMA CONDENSED COMBINING STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA AMCORE
AMCORE FIRST COUNTRY COMBINED CAPITAL PRO FORMA PRO FORMA
HISTORICAL NATIONAL(1)(2) BANK(1)(2)(3) AMCORE TRUST I ADJUSTMENTS COMBINED
---------- -------------- ------------- --------- ------- ----------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans and
leases........................ $120,497 $13,537 $19,274 $153,308 $3,860 $(3,860)(5) $153,308
Interest on securities:
Taxable....................... 57,327 2,277 3,168 62,772 1,075 (4) 63,847
Tax-exempt.................... 13,697 912 449 15,058 15,058
-------- ------- ------- -------- ------ ------- --------
Total Income from
Securities.............. $71,024 $ 3,189 $ 3,617 $ 77,830 $ 1,075 $ 78,905
Interest on federal funds sold
and other short-term
investments................... $ 768 $ 110 $ 563 $ 1,441 $ 1,441
Interest and fees on mortgage
loans held for sale........... 2,611 51 29 2,691 2,691
Interest on deposit in banks.... 34 25 12 71 71
-------- ------- ------- -------- ------ ------- --------
TOTAL INTEREST INCOME..... $194,934 $16,912 $23,495 $235,341 $3,860 $(2,785) $236,416
INTEREST EXPENSE
Interest on deposits............ $73,197 $ 8,572 $11,453 $ 93,222 $ 93,222
Interest on short-term
borrowings.................... 25,680 76 128 25,884 $ (118)(4) 25,766
Interest on long-term
borrowings.................... 9,023 146 635 9,804 $3,740 (1,640)(4)(5) 11,904
Other........................... 493 -- -- 493 493
-------- ------- ------- -------- ------ ------- --------
TOTAL INTEREST EXPENSE.... $108,393 $ 8,794 $12,216 $129,403 $3,740 $(1,758) 131,385
-------- ------- ------- -------- ------ ------- --------
NET INTEREST INCOME....... $ 86,541 $ 8,118 $11,279 $105,936 $ 120 $(1,027) $105,031
Provision for loan and lease
losses........................ 5,086 120 221 5,427 -- -- 5,427
-------- ------- ------- -------- ------ ------- --------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN AND LEASE
LOSSES........................ $ 81,455 $ 7,998 $11,058 $100,511 $ 120 $(1,027) $ 99,604
OTHER INCOME
Trust income.................... $ 13,602 $ 493 $ 8 $ 14,103 $ 14,103
Service charges on deposits..... 6,755 467 360 7,582 7,582
Mortgage revenues............... 3,667 204 -- 3,871 3,871
Insurance revenues.............. 2,038 28 161 2,227 2,227
Collection fee income........... 2,145 -- -- 2,145 2,145
Other........................... 8,366 430 1,495 10,291 10,291
-------- ------- ------- -------- ------ ------- --------
TOTAL OTHER INCOME,
EXCLUDING SECURITY
GAINS................... $ 36,573 $ 1,622 $ 2,024 $ 40,219 $ 40,219
Net security gains.............. 1,870 -- -- 1,870 1,870
OPERATING EXPENSES
Compensation and employee
benefits expense.............. $ 47,067 $ 3,339 $ 5,141 $ 55,547 $ 55,547
Net occupancy and equipment
expense....................... 12,800 762 1,404 14,966 14,966
Professional fees............... 2,503 153 582 3,238 3,238
Advertising and business
development................... 2,274 128 162 2,564 2,564
Amortization of intangible
assets........................ 2,059 68 152 2,243 $ 42 (4) 2,285
Other........................... 17,294 1,161 1,514 20,005 (84)(4) 19,921
-------- ------- ------- -------- ------ ------- --------
TOTAL OPERATING
EXPENSES................ $ 83,997 $ 5,611 $ 8,955 $ 98,563 $ (42) $ 98,521
-------- ------- ------- -------- ------ ------- --------
INCOME BEFORE INCOME TAXES...... $ 35,901 $ 4,009 $ 4,127 $ 44,037 $ 120 $ (985) $ 43,172
Income taxes.................... 9,518 1,227 1,494 12,239 42 (345) 11,936
-------- ------- ------- -------- ------ ------- --------
NET INCOME...................... $ 26,383 $ 2,782 $ 2,633 $ 31,798 $ 78 $ (640) $ 31,236
======== ======= ======= ======== ====== ======= ========
EARNINGS PER COMMON SHARE....... $1.86 $11.43 $6.17 $1.77 $1.74
======== ======= ======= ======== ========
</TABLE>
- -------------------------
(1) Reflects an increase of First National's and Country Bank's federal marginal
rate from 34% to 35% of $35,000 and $43,000, respectively.
(2) Earnings per share is calculated assuming the issuance of 1,881,524 and
1,902,441 shares of AMCORE common stock for First National and Country Bank,
respectively.
(3) Includes the historical results of Belleville, acquired on February 6, 1997
in a transaction accounted for as a pooling-of-interests.
(4) The proceeds of the capital securities issue were used to repay in full the
parent company long term debt of $13.6 million and will be used to repay in
full the long term debt at First National of $600,000, repay in full the
short term and long term debt, excluding FHLB borrowings, at Country Bank of
$6.58 million, purchase certain minority interests in subsidiaries of
Country Bank for $1.3 million, and for general corporate purposes.
(5) Reflects intercompany eliminations.
24
<PAGE> 26
PRO FORMA CONDENSED COMBINING STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
FIRST COUNTRY PRO FORMA
AMCORE NATIONAL BANK(1) ACQUISITIONS
------ -------- ------- ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans and leases....................... $109,488 $12,730 $18,439 $140,657
Interest on securities:
Taxable................................................... 39,530 2,064 2,643 44,237
Tax-exempt................................................ 11,984 896 364 13,244
-------- ------- ------- --------
Total Income from Securities $51,514 $ 2,960 $ 3,007 $ 57,481
Interest on federal funds sold and other short-term
investments............................................... 513 30 420 963
Interest and fees on mortgage loans held for sale........... 2,971 29 17 3,017
-------- ------- ------- --------
TOTAL INTEREST INCOME.............................. $164,486 $15,749 $21,883 $202,118
INTEREST EXPENSE
Interest on deposits........................................ $68,062 $ 7,864 $10,340 $ 86,266
Interest on short-term borrowings........................... 14,968 174 666 15,808
Interest on long-term borrowings............................ 2,050 28 255 2,333
-------- ------- ------- --------
TOTAL INTEREST EXPENSE............................. $85,080 $ 8,066 $11,261 $104,407
-------- ------- ------- --------
NET INTEREST INCOME................................ $79,406 $ 7,683 $10,622 $ 97,711
Provision for loan and lease losses......................... 2,692 61 412 3,165
-------- ------- ------- --------
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE
LOSSES.................................................... $76,714 $ 7,622 $10,210 $ 94,546
OTHER INCOME
Trust income................................................ $11,401 $ 460 $ 7 $ 11,868
Service charges on deposits................................. 6,986 425 693 8,104
Mortgage revenues........................................... 3,584 -- -- 3,584
Insurance revenues.......................................... 1,015 31 142 1,188
Collection fee income....................................... 1,831 -- -- 1,831
Other....................................................... 6,898 402 756 8,056
-------- ------- ------- --------
TOTAL OTHER INCOME, EXCLUDING SECURITY GAINS....... $31,715 $ 1,318 $ 1,598 $ 34,631
Net security gains.......................................... 2,298 -- -- 2,298
OPERATING EXPENSES
Compensation and employee benefits expense.................. $45,662 $ 3,275 $ 4,477 $ 53,414
Net occupancy and equipment expense......................... 13,297 769 1,178 15,244
Professional fees........................................... 2,733 160 823 3,716
Advertising and business development........................ 2,437 132 149 2,718
Amortization of intangible assets........................... 2,331 45 240 2,616
Insurance expense........................................... 2,765 246 47 3,058
Impairment of long-lived assets............................. 3,269 -- -- 3,269
Other....................................................... 14,946 931 1,332 17,209
-------- ------- ------- --------
TOTAL OPERATING EXPENSES........................... $87,440 $ 5,558 $ 8,246 $101,244
-------- ------- ------- --------
INCOME BEFORE INCOME TAXES.................................. $23,287 $ 3,382 $ 3,562 $ 30,231
Income taxes................................................ 5,016 964 1,291 7,271(2)
-------- ------- ------- --------
NET INCOME.................................................. $18,271 $ 2,418 $ 2,271 $ 22,960
======== ======= ======= ========
EARNINGS PER COMMON SHARE................................... $1.30 $1.28(3)
======== ========
</TABLE>
- -------------------------
(1) Includes the historical results of Belleville, acquired on February 6, 1997
in a transaction accounted for as a pooling-of-interests.
(2) Reflects an increase of First National's and Country Bank's federal marginal
rate from 34% to 35% of $28,000 and $37,000, respectively.
(3) Earnings per share is calculated assuming the issuance of 1,880,574 and
1,902,441 shares of AMCORE common stock, respectively.
25
<PAGE> 27
PRO FORMA CONDENSED COMBINING STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
FIRST COUNTRY PRO FORMA
AMCORE NATIONAL BANK(1) ACQUISITIONS
------ -------- ------- ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans and leases....................... $90,719 $10,837 $16,052 $117,608
Interest on securities:
Taxable................................................... 32,030 2,030 2,612 36,672
Tax-exempt................................................ 12,552 863 485 13,900
-------- ------- ------- --------
Total Income from Securities $44,582 $ 2,893 $ 3,097 $ 50,572
Interest on federal funds sold and other short-term
investments............................................... 761 20 145 926
Interest and fees on mortgage loans held for sale........... 2,893 27 55 2,975
-------- ------- ------- --------
TOTAL INTEREST INCOME.............................. $138,955 $13,777 $19,349 $172,081
INTEREST EXPENSE
Interest on deposits........................................ $53,202 $ 6,044 $ 8,510 $ 67,756
Interest on short-term borrowings........................... 5,935 126 637 6,698
Interest on long-term borrowings............................ 2,058 47 149 2,254
-------- ------- ------- --------
TOTAL INTEREST EXPENSE............................. $61,195 $ 6,217 $ 9,296 $ 76,708
-------- ------- ------- --------
NET INTEREST INCOME................................ $77,760 $ 7,560 $10,053 95,373
Provision for loan and lease losses......................... 628 -- 1,134 1,762
-------- ------- ------- --------
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE
LOSSES.................................................... $77,132 $ 7,560 $ 8,919 $ 93,611
OTHER INCOME
Trust income................................................ $10,910 $ 612 $ 5 $ 11,527
Service charges on deposits................................. 6,742 364 600 7,706
Mortgage revenues........................................... 3,687 -- -- 3,687
Insurance revenues.......................................... 845 26 142 1,013
Collection fee income....................................... 1,700 -- -- 1,700
Other....................................................... 6,242 378 928 7,548
-------- ------- ------- --------
TOTAL OTHER INCOME, EXCLUDING SECURITY GAINS....... $30,126 $ 1,380 $ 1,675 $ 33,181
Net security gains.......................................... 908 -- -- 908
OPERATING EXPENSES
Compensation and employee benefits expense.................. $41,385 $ 3,372 $ 4,066 $ 48,823
Net occupancy and equipment expense......................... 11,015 828 1,100 12,943
Professional fees........................................... 3,370 161 1,046 4,577
Advertising and business development........................ 2,377 128 156 2,661
Amortization of intangible assets........................... 2,585 45 301 2,931
Insurance expense........................................... 4,528 393 54 4,975
Other....................................................... 13,430 966 1,341 15,737
-------- ------- ------- --------
TOTAL OPERATING EXPENSES........................... $78,690 $ 5,893 $ 8,064 $ 92,647
-------- ------- ------- --------
INCOME BEFORE INCOME TAXES.................................. $29,476 $ 3,047 $ 2,530 $ 35,053
Income taxes................................................ 7,675 849 844 9,368(2)
-------- ------- ------- --------
NET INCOME.................................................. $21,801 $ 2,198 $ 1,686 $ 25,685
======== ======= ======= ========
EARNINGS PER COMMON SHARE................................... $1.55 $1.44(3)
======== ========
</TABLE>
- -------------------------
(1) Includes the historical results of Belleville, acquired on February 6, 1997
in a transaction accounted for as a pooling-of-interests.
(2) Reflects an increase of First National's and Country Bank's federal marginal
rate from 34% to 35% of $24,000 for both companies.
(3) Earnings per share is calculated assuming the issuance of 1,880,574 and
1,902,441 shares of AMCORE common stock, respectively.
26
<PAGE> 28
USE OF PROCEEDS
Neither the Corporation nor the Trust will receive any cash proceeds from
the issuance of the New Capital Securities offered hereby. In consideration for
issuing the New Capital Securities in exchange for Old Capital Securities as
described in this Prospectus, the Trust will receive Old Capital Securities in
like Liquidation Amount. The Old Capital Securities surrendered in exchange for
the New Capital Securities will be retired and cancelled.
The proceeds to the Trust (without giving effect to expenses of the
offering payable by the Corporation) from the offering of the Old Capital
Securities was $40,000,000. All of the proceeds from the sale of the Old Capital
Securities were invested by the Trust in the Old Junior Subordinated Debentures.
The net proceeds from the sale of the Old Junior Subordinated Debentures are
being used as follows: (i) $13.6 million to repay in full the Term Loan (as
defined below); (ii) $.6 million to repay in full the long-term borrowings of
First National (with an interest rate of 8.250% per annum at December 31, 1996
and a maturity date of June 1, 1997); (iii) $6.58 million to repay in full the
long-term borrowings of Country Bank (with a weighted average interest rate of
7.895% per annum at December 31, 1996 and maturity dates ranging from demand to
April 2, 1999); (iv) $1.3 million to purchase certain minority interests in
subsidiaries of Country Bank; and (v) the balance to fund working capital and
other general corporate purposes. At December 31, 1996, the interest rate on the
Corporation's term loan (the "Term Loan") was 7.125% per annum. The Term Loan
requires semi-annual principal payments through the November 10, 2000 maturity
date.
Pending such application by the Corporation, such net proceeds may be
temporarily invested in short-term interest-bearing securities. The New Capital
Securities are expected to be eligible to qualify as Tier 1 capital under the
capital guidelines of the Federal Reserve.
RATIOS OF EARNINGS TO COMBINED FIXED CHARGES
The following table sets forth the ratios of earnings to combined fixed
charges of the Corporation on a consolidated basis for the respective periods
indicated.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratios of earnings to combined fixed charges:
Excluding interest on deposits......................... 2.02x 2.33x 4.52x 6.05x 7.09x
Including interest on deposits......................... 1.33x 1.27x 1.48x 1.48x 1.42x
</TABLE>
The ratio of earnings to fixed charges has been computed by dividing
earnings before income taxes and fixed charges by fixed charges. Fixed charges,
excluding interest on deposits, consists of interest on indebtedness and
one-third of rental expense (which is deemed representative of the interest
factor). Fixed charges, including interest on deposits, consist of both the
foregoing items plus interest on deposits.
27
<PAGE> 29
CAPITALIZATION
The following sets forth (i) the actual capitalization of the Corporation
at December 31, 1996; (ii) the Corporation's pro forma combined capitalization
as of December 31, 1996 as if the acquisitions of First National and Country
Bank had occurred as of December 31, 1996; and (iii) on a pro forma basis as
adjusted to give effect to the issuance of the Old Securities and the
application of the proceeds therefrom. See "Use of Proceeds." The table should
be read in conjunction with the Corporation's consolidated financial statements
and notes thereto included in the documents incorporated by reference herein.
See "Incorporation of Certain Documents by Reference."
<TABLE>
<CAPTION>
DECEMBER 31, 1996
----------------------------------------
PRO FORMA PRO FORMA
ACTUAL ACQUISITIONS(1) AS ADJUSTED
------ --------------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
LONG-TERM BORROWINGS
Federal Home Loan Bank borrowings....................... $108,250 $111,514 $111,514
Term loan............................................... 13,600 13,600 --
Other................................................... 2,245 6,498 2,245
Total long-term borrowings.............................. $124,095 $131,612 $113,759
Corporation-obligated mandatorily redeemable capital
securities of subsidiary trust holding solely junior
subordinated debentures of the Corporation(2)........ -- -- 40,000
STOCKHOLDERS' EQUITY
Preferred stock ($1.00 par value): 10,000,000 shares
authorized, no shares issued, actual, pro forma
acquisitions and pro forma as adjusted............... $ -- -- $ --
Common stock ($.33 par value): 30,000,000 shares
authorized, 14,926,695 issued, 14,224,578
outstanding, actual; 18,709,710 issued, 18,007,593
outstanding, pro forma acquisitions and pro forma as
adjusted............................................. 4,976 6,238 6,238
Additional paid-in capital.............................. 56,687 67,277 67,277
Retained earnings....................................... 166,602 191,406 190,844
Treasury stock and other................................ (5,623) (5,623) (5,623)
Net unrealized gain (loss) on securities available for
sale................................................. (2,005) (1,956) (1,956)
-------- -------- --------
Total stockholders' equity................................ $220,637 $257,342 $256,780
-------- -------- --------
Total capitalization............................... $344,732 $388,954 $410,539
======== ======== ========
</TABLE>
- -------------------------
(1) Includes the historical results of Belleville, acquired on February 6, 1997
in a transaction accounted for as a pooling-of-interests.
(2) Reflects the Old Capital Securities. The Trust is a subsidiary of the
Corporation and holds the Old Junior Subordinated Debentures as its sole
asset.
28
<PAGE> 30
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data below should be read in connection
with the financial information included in the Corporation's 1996 Annual Report
on Form 10-K. See "Available Information," "Incorporation of Certain Documents
by Reference," "AMCORE Financial, Inc." and "Recent Developments."
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------
1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF INCOME:
Interest income.................................... $ 194,934 $ 164,486 $ 138,955 $ 137,184 $ 136,345
Interest expense................................... 108,393 85,080 61,195 59,628 62,946
Net interest income................................ 86,541 79,406 77,760 77,556 73,399
Provision for loan losses.......................... 5,086 2,692 628 2,124 5,547
Non-interest income................................ 38,443 34,013 31,034 29,605 25,695
Operating expense.................................. 83,997 87,440 78,690 76,136 67,132
Income before income taxes......................... 35,901 23,287 29,476 28,901 26,415
Net income......................................... $ 26,383 $ 18,271 $ 21,801 $ 21,440 $ 18,556
PER COMMON SHARE:
Net income......................................... $ 1.86 $ 1.30 $ 1.55 $ 1.53 $ 1.36
Cash dividends..................................... 0.64 0.58 0.55 0.41 0.35
Book value......................................... 15.47 14.81 13.26 12.68 11.59
Dividend payout ratio.............................. 34.5% 44.6% 35.4% 26.9% 25.6%
Average common shares outstanding (in thousands)... 14,214 14,083 14,023 13,972 13,659
BALANCE SHEET -- AVERAGE BALANCES:
Total assets....................................... $2,682,591 $2,245,895 $2,062,597 $1,977,407 $1,754,653
Loans and leases, net of unearned income........... 1,369,030 1,228,175 1,088,206 1,000,759 927,354
Securities......................................... 1,109,159 812,174 764,758 728,754 607,023
Deposits........................................... 1,828,920 1,764,427 1,706,175 1,665,807 1,501,006
Long-term borrowings............................... 150,099 29,458 27,598 33,724 16,384
Stockholders' equity............................... 207,617 194,546 183,171 168,739 151,469
SELECTED FINANCIAL RATIOS:
Return on average assets........................... 0.98% 0.81%(1) 1.06% 1.08% 1.06%
Return on average equity........................... 12.71 9.39(1) 11.90 12.71 12.25
Net interest margin................................ 3.75 4.17 4.51 4.62 4.78
Average equity to average assets................... 7.74 8.66 8.88 8.53 8.63
Net charge-offs to average loans and leases
outstanding annualized........................... 0.23 0.24 0.17 0.17 0.32
Allowance for loan losses to total loans and leases
outstanding...................................... 1.03 1.02 1.14 1.40 1.41
Allowance for loan losses to nonperforming loans
and leases....................................... 152.41 101.07 103.66 111.27 135.14
Nonperforming loans to net loans................... 0.68 1.00 1.10 1.26 1.05
BALANCE SHEET INFORMATION:
Total assets....................................... $2,814,550 $2,418,532 $2,151,983 $1,987,267 $1,958,475
Loans and leases, net of unearned income........... 1,456,217 1,285,961 1,161,870 1,035,841 996,277
Securities......................................... 1,148,719 908,669 784,457 722,837 727,542
Deposits........................................... 1,890,016 1,777,705 1,707,559 1,643,683 1,649,767
Long-term borrowings............................... 124,095 107,803 26,487 31,975 32,442
Stockholder's equity............................... 220,637 209,862 186,159 177,615 160,296
RATIO OF EARNINGS TO FIXED CHARGES:(2)
Excluding interest on deposits..................... 2.02 2.33 4.52 6.05 7.09
Including interest on deposits..................... 1.33 1.27 1.48 1.48 1.42
</TABLE>
- -------------------------
(1) The 1995 ratios excluding the impact of the $3.5 million, or $.25 per share,
after-tax impairment and merger-related charges; for 12 month period return
on average assets 0.97%; return on average equity 11.17%.
(2) The ratio of earnings to fixed charges has been computed by dividing
earnings before income taxes and fixed charges by fixed charges. Fixed
charges, excluding interest on deposits, consists of interest on
indebtedness and one-third of rental expense (which is deemed representative
of the interest factor). Fixed charges, including interest on deposits,
consist of both the foregoing items plus interest on deposits.
29
<PAGE> 31
THE TRUST
The Trust is a statutory business trust formed under Delaware law pursuant
to (i) a declaration of trust, dated as of March 11, 1997, executed by the
Corporation, as Sponsor, The First National Bank of Chicago, as Property
Trustee, First Chicago Delaware Inc., as Delaware Trustee and the Administrative
Trustee named therein (the "Initial Declaration"), and (ii) the filing of a
certificate of trust with the Secretary of State of the State of Delaware on
March 11, 1997. The Trust exists for the exclusive purposes of (i) issuing and
selling the Trust Securities, which represent undivided beneficial interests in
the assets of the Trust, (ii) investing the gross proceeds from the sale of the
Trust Securities in the Junior Subordinated Debentures and (iii) engaging in
only those other activities necessary, advisable or incidental thereto.
Accordingly, the Junior Subordinated Debentures will be the sole assets of the
Trust and payments under the Junior Subordinated Debentures will be the sole
revenues of the Trust. All of the Common Securities are owned directly by the
Corporation. The Common Securities will rank pari passu, and payments will be
made thereon pro rata, with the Capital Securities, except that upon the
occurrence and during the continuance of an event of default under the
Declaration ("Event of Default") resulting from a Debenture Event of Default,
the rights of the Corporation as holder of the Common Securities to payments in
respect of Distributions and payments upon liquidation, redemption or otherwise
will be subordinated to the rights of the holders of the Capital Securities. See
"Description of New Securities -- Description of New Capital Securities --
Subordination of Common Securities." The Corporation has acquired Common
Securities in a Liquidation Amount equal to at least 3% of the total capital of
the Trust. The Trust has a term of 31 years, but may terminate earlier as
provided in the Declaration. The Trust's business and affairs are conducted by
trustees (the "Issuer Trustees") appointed by the Corporation as holder of the
Common Securities. The Issuer Trustees are The First National Bank of Chicago as
the Property Trustee (the "Property Trustee"), First Chicago Delaware Inc., as
the Delaware Trustee (the "Delaware Trustee"), and three individual trustees
(the "Administrative Trustees"), who are officers or employees of, or affiliated
with, the Corporation. The First National Bank of Chicago, as Property Trustee,
acts as sole indenture trustee under the Declaration. The First National Bank of
Chicago also acts as indenture trustee under the Guarantee and the Indenture.
See "Description of New Securities -- Description of New Guarantee" and "--
Description of New Junior Subordinated Debentures." The holder of the Common
Securities or, if an Event of Default under the Declaration has occurred and is
continuing, the holders of a majority in Liquidation Amount of the Capital
Securities, will be entitled to appoint, remove or replace the Property Trustee
and/or the Delaware Trustee. In no event will the holders of the Capital
Securities have the right to vote to appoint, remove or replace the
Administrative Trustees; such voting rights will be vested exclusively in the
holder of the Common Securities. The duties and obligations of each Issuer
Trustee are governed by the Declaration. The Corporation, as issuer of the
Junior Subordinated Debentures, will pay directly all fees, expenses, debts and
obligations (other than the Trust Securities) related to the Trust and the
offering and exchange of the Capital Securities, including all ongoing costs,
expenses and liabilities of the Trust. The principal executive office of the
Trust is c/o AMCORE Financial, Inc., 501 Seventh Street, Rockford, Illinois
61104. Attention: John R. Hecht.
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
In connection with the sale of the Old Capital Securities, the Corporation
and the Trust entered into the Registration Rights Agreement with the Initial
Purchaser, pursuant to which the Corporation and the Trust agreed to file and to
use their reasonable efforts to cause to become effective with the Commission a
registration statement with respect to the exchange of the Old Capital
Securities for capital securities with terms identical in all material respects
to the terms of the Old Capital Securities. A copy of the Registration Rights
Agreement has been filed as an exhibit to the Registration Statement of which
this Prospectus is a part.
The Exchange Offer is being made to satisfy the contractual obligations of
the Corporation and the Trust under the Registration Rights Agreement. The form
and terms of the New Capital Securities are the same as the form and terms of
the Old Capital Securities except that the New Capital Securities have been
registered
30
<PAGE> 32
under the Securities Act and will not be subject to the $100,000 minimum
Liquidation Amount transfer restriction and certain other restrictions on
transfer applicable to the Old Capital Securities and will not provide for any
increase in the Distribution rate thereon. In that regard, the Old Capital
Securities provide, among other things, that, if a registration statement
relating to the Exchange Offer has not been filed by August 22, 1997 and
declared effective by September 21, 1997, the Distribution rate borne by the Old
Capital Securities commencing on September 22, 1997 will increase by 0.25% per
annum until the Exchange Offer is consummated. Upon consummation of the Exchange
Offer, holders of Old Capital Securities will not be entitled to any increase in
the Distribution rate thereon or any further registration rights under the
Registration Rights Agreement, except under limited circumstances. See "Risk
Factors -- Consequences of a Failure to Exchange Old Capital Securities" and
"Description of Old Capital Securities."
The Exchange Offer is not being made to, nor will the Trust accept tenders
for exchange from, holders of Old Capital Securities in any jurisdiction in
which the Exchange Offer or the acceptance thereof would not be in compliance
with the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect to
the Exchange Offer means any person in whose name the Old Capital Securities are
registered on the books of the Trust or any other person who has obtained a
properly completed bond power from the registered holder, or any person whose
Old Capital Securities are held of record by The Depository Trust Company
("DTC") who desires to deliver such Old Capital Securities by book-entry
transfer at DTC.
Pursuant to the Exchange Offer, the Corporation will exchange as soon as
practicable after the date hereof, the Old Guarantee for the New Guarantee and
the Old Junior Subordinated Debentures, in an amount corresponding to the Old
Capital Securities accepted for exchange, for a like aggregate principal amount
of the New Junior Subordinated Debentures. The New Guarantee and New Junior
Subordinated Debentures have been registered under the Securities Act.
TERMS OF THE EXCHANGE OFFER
The Trust hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and in the accompanying Letter of Transmittal, to
exchange up to $40,000,000 aggregate Liquidation Amount of New Capital
Securities for a like aggregate Liquidation Amount of Old Capital Securities
properly tendered on or prior to the Expiration Date and not properly withdrawn
in accordance with the procedures described below. The Trust will issue,
promptly after the Expiration Date, an aggregate Liquidation Amount of up to
$40,000,000 of New Capital Securities in exchange for a like principal amount of
outstanding Old Capital Securities tendered and accepted in connection with the
Exchange Offer. Holders may tender their Old Capital Securities in whole or in
part in a Liquidation Amount of not less than $100,000 (100 Capital Securities)
or any integral multiple of $1,000 Liquidation Amount (one Capital Security) in
excess thereof.
The Exchange Offer is not conditioned upon any minimum Liquidation Amount
of Old Capital Securities being tendered. As of the date of this Prospectus,
$40,000,000 aggregate Liquidation Amount of the Old Capital Securities is
outstanding.
Holders of Old Capital Securities do not have any appraisal or dissenters'
rights in connection with the Exchange Offer. Old Capital Securities which are
not tendered for or are tendered but not accepted in connection with the
Exchange Offer will remain outstanding and be entitled to the benefits of the
Declaration, but will not be entitled to any further registration rights under
the Registration Rights Agreement, except under limited circumstances. See "Risk
Factors -- Consequences of a Failure to Exchange Old Capital Securities" and
"Description of Old Securities."
If any tendered Old Capital Securities are not accepted for exchange
because of an invalid tender, the occurrence of certain other events set forth
herein or otherwise, certificates for any such unaccepted Old Capital Securities
will be returned, without expense, to the tendering holder thereof promptly
after the Expiration Date.
Holders who tender Old Capital Securities in connection with the Exchange
Offer will not be required to pay brokerage commissions or fees or, subject to
the instructions in the Letter of Transmittal, transfer taxes
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with respect to the exchange of Old Capital Securities in connection with the
Exchange Offer. The Corporation will pay all charges and expenses, other than
certain applicable taxes described below, in connection with the Exchange Offer.
See "-- Fees and Expenses."
NEITHER THE CORPORATION, THE BOARD OF DIRECTORS OF THE CORPORATION NOR ANY
ISSUER TRUSTEE OF THE TRUST MAKES ANY RECOMMENDATION TO HOLDERS OF OLD CAPITAL
SECURITIES AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION
OF THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO
ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF OLD CAPITAL
SECURITIES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE
EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF OLD CAPITAL SECURITIES TO
TENDER BASED ON SUCH HOLDERS OWN FINANCIAL POSITION AND REQUIREMENTS.
The term "Expiration Date" means 5:00 p.m., New York City time, on
, 1997 unless the Exchange Offer is extended by the
Corporation or the Trust (in which case the term "Expiration Date" shall mean
the latest date and time to which the Exchange Offer is extended).
The Corporation and the Trust expressly reserve the right in their sole and
absolute discretion, subject to applicable law, at any time and from time to
time, (i) to delay the acceptance of the Old Capital Securities for exchange,
(ii) to terminate the Exchange Offer (whether or not any Old Capital Securities
have theretofore been accepted for exchange) if the Trust determines, in its
sole and absolute discretion, that any of the events or conditions referred to
under "-- Conditions to the Exchange Offer" have occurred or exist or have not
been satisfied, (iii) to extend the Expiration Date of the Exchange Offer and
retain all Old Capital Securities tendered pursuant to the Exchange Offer,
subject, however, to the right of holders of Old Capital Securities to withdraw
their tendered Old Capital Securities as described under "-- Withdrawal Rights,"
and (iv) to waive any condition or otherwise amend the terms of the Exchange
Offer in any respect. If the Exchange Offer is amended in a manner determined by
the Corporation and the Trust to constitute a material change, or if the
Corporation and the Trust waive a material condition of the Exchange Offer, the
Corporation and the Trust will promptly disclose such amendment by means of a
prospectus supplement that will be distributed to the holders of the Old Capital
Securities, and the Corporation and the Trust will extend the Exchange Offer to
the extent required by Rule 14e-1 under the Exchange Act.
Any such delay in acceptance, extension, termination or amendment will be
followed promptly by oral or written notice thereof to the Exchange Agent and by
making a public announcement thereof, and such announcement in the case of an
extension will be made no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date. Without limiting
the manner in which the Corporation and the Trust may choose to make any public
announcement and subject to applicable law, the Corporation and the Trust shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by issuing a release to an appropriate news
agency.
ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF NEW CAPITAL SECURITIES
Upon the terms and subject to the conditions of the Exchange Offer, the
Trust will exchange, and will issue to the Exchange Agent, New Capital
Securities for Old Capital Securities validly tendered and not withdrawn
(pursuant to the withdrawal rights described under "-- Withdrawal Rights")
promptly after the Expiration Date.
Subject to the conditions set forth under "-- Conditions to the Exchange
Offer," delivery of New Capital Securities in exchange for Old Capital
Securities tendered and accepted for exchange pursuant to the Exchange Offer
will be made only after timely receipt by the Exchange Agent of (i) certificates
for Old Capital Securities or a book-entry confirmation of a book-entry transfer
of Old Capital Securities into the Exchange Agent's account at DTC, including an
Agent's Message if the tendering holder does not deliver a Letter of
Transmittal, (ii) a completed and signed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message in lieu of the Letter of Transmittal,
and (iii) any other documents required by the Letter of Transmittal.
Accordingly, the delivery
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of New Capital Securities might not be made to all tendering holders at the same
time, and will depend upon when certificates for Old Capital Securities,
book-entry confirmations with respect to Old Capital Securities and other
required documents are received by the Exchange Agent.
The term "book-entry confirmation" means a timely confirmation of a
book-entry transfer of Old Capital Securities into the Exchange Agent's account
at DTC. See "-- Procedures for Tendering Old Capital Securities -- Book-Entry
Transfer." The term "Agent's Message" means a message transmitted by DTC to and
received by the Exchange Agent and forming a part of a book-entry confirmation,
which states that DTC has received an express acknowledgment from the tendering
participant, which acknowledgment states that such participant has received and
agrees to be bound by the Letter of Transmittal and that the Trust and the
Corporation may enforce such Letter of Transmittal against such participant.
Subject to the terms and conditions of the Exchange Offer, the Trust will
be deemed to have accepted for exchange, and thereby exchanged, Old Capital
Securities validly tendered and not withdrawn as, if and when the Trust gives
oral or written notice to the Exchange Agent of the Trust's acceptance of such
Old Capital Securities for exchange pursuant to the Exchange Offer. The Exchange
Agent will act as agent for the Trust for the purpose of receiving tenders of
Old Capital Securities, Letters of Transmittal and related documents, and as
agent for tendering holders for the purpose of receiving Old Capital Securities,
Letters of Transmittal and related documents and transmitting New Capital
Securities to validly tendering holders. Such exchange will be made promptly
after the Expiration Date. If for any reason whatsoever, acceptance for exchange
or the exchange of any Old Capital Securities tendered pursuant to the Exchange
Offer is delayed (whether before or after the Trust's acceptance for exchange of
Old Capital Securities) or the Trust extends the Exchange Offer or is unable to
accept for exchange or exchange Old Capital Securities tendered pursuant to the
Exchange Offer, then, without prejudice to the Trust's rights set forth herein,
the Exchange Agent may, nevertheless, on behalf of the Trust and subject to Rule
14e-1(c) under the Exchange Act, retain tendered Old Capital Securities and such
Old Capital Securities may not be withdrawn except to the extent tendering
holders are entitled to withdrawal rights as described under "-- Withdrawal
Rights."
Pursuant to the Letter of Transmittal, or the Agent's Message, as the case
may be, a holder of Old Capital Securities will warrant and agree in the Letter
of Transmittal or pursuant to the Agent's Message that it has full power and
authority to tender, exchange, sell, assign and transfer Old Capital Securities,
that the Trust will acquire good, marketable and unencumbered title to the
tendered Old Capital Securities, free and clear of all liens, restrictions,
charges and encumbrances, and the Old Capital Securities tendered for exchange
are not subject to any adverse claims or proxies. The holder also will warrant
and agree that it will, upon request, execute and deliver any additional
documents deemed by the Trust or the Exchange Agent to be necessary or desirable
to complete the exchange, sale, assignment, and transfer of the Old Capital
Securities tendered pursuant to the Exchange Offer.
PROCEDURES FOR TENDERING OLD CAPITAL SECURITIES
Valid Tender
Except as set forth below, in order for Old Capital Securities to be
validly tendered by book-entry transfer, an Agent's Message or a completed and
signed Letter of Transmittal (or facsimile thereof), with any required signature
guarantees and in either case any other documents required by the Letter of
Transmittal, must be delivered to the Exchange Agent by mail, facsimile, hand
delivery or overnight carrier at one of the Exchange Agent's addresses set forth
under "-- Exchange Agent" on or prior to the Expiration Date and either (i) such
Old Capital Securities must be tendered pursuant to the procedures for
book-entry transfer set forth below or (ii) the guaranteed delivery procedures
set forth below must be complied with.
Except as set forth below, in order for Old Capital Securities to be
validly tendered by a means other than by book-entry transfer, a completed and
signed Letter of Transmittal (or facsimile thereof), with any required signature
guarantees and any other documents required by the Letter of Transmittal, must
be delivered to the Exchange Agent by mail, facsimile, hand delivery or
overnight carrier at one of the Exchange Agent's addresses set forth under "--
Exchange Agent" on or prior to the Expiration Date and either (i) such Old
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Capital Securities must be delivered to the Exchange Agent on or prior to the
Expiration Date or (ii) guaranteed delivery procedures set forth below must be
complied with.
If less than all of the Old Capital Securities are tendered, a tendering
holder should fill in the amount of Old Capital Securities being tendered in the
appropriate box on the Letter of Transmittal. The entire amount of Old Capital
Securities delivered to the Exchange Agent will be deemed to have been tendered
unless otherwise indicated.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER,
AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE
AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN RECEIPT REQUESTED,
PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Book-Entry Transfer
The Exchange Agent and DTC have confirmed that any Participant (as defined
in "Description of New Capital Securities-Form, Denomination, Book-Entry
Procedures and Transfer") in DTC's book-entry transfer facility system may
utilize DTC's ATOP procedures to tender Old Capital Securities. The Exchange
Agent will establish an account with respect to the Old Capital Securities at
DTC for purposes of the Exchange Offer within two business days after the date
of this Prospectus. Any Participant may make a book-entry delivery of the Old
Capital Securities by causing DTC to transfer such Old Capital Securities into
the Exchange Agent's account at DTC in accordance with DTC's ATOP procedures for
transfer. However, although delivery of Old Capital Securities may be effected
through book-entry transfer into the Exchange Agent's account at DTC, an Agent's
Message or a completed and signed Letter of Transmittal (or facsimile thereof),
with any required signature guarantees and any other documents required by the
Letter of Transmittal must in any case be delivered to and received by the
Exchange Agent at one of its addresses set forth under "-- Exchange Agent" on or
prior to the Expiration Date, or the guaranteed delivery procedure set forth
below must be complied with.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
Signature Guarantees
Certificates for the Old Capital Securities need not be endorsed and
signature guarantees on the Letter of Transmittal are unnecessary unless (a) a
certificate for the Old Capital Securities is registered in a name other than
that of the person surrendering the certificate or (b) such holder completes the
box entitled "Special Issuance Instructions" or "Special Delivery Instructions"
in the Letter of Transmittal. In the case of (a) or (b) above, such certificates
for Old Capital Securities must be duly endorsed or accompanied by a properly
executed bond power, with the endorsement or signature on the bond power and on
the Letter of Transmittal guaranteed by a firm or other entity identified in
Rule 17Ad-15 under the Exchange Act as an "eligible guarantor institution,"
including (as such terms are defined therein): (i) a bank; (ii) a broker,
dealer, municipal securities broker or dealer or government securities broker or
dealer; (iii) a credit union; (iv) a national securities exchange, registered
securities association or clearing agency; or (v) a savings association that is
a participant in a Securities Transfer Association (an "Eligible Institution"),
unless surrendered on behalf of such Eligible Institution. See Instruction 1 to
the Letter of Transmittal.
Guaranteed Delivery
If a holder desires to tender Old Capital Securities pursuant to the
Exchange Offer and the certificates for such Old Capital Securities are not
immediately available or time will not permit all required documents to reach
the Exchange Agent on or prior to the Expiration Date, or the procedure for
book-entry transfer cannot
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be completed on a timely basis, such Old Capital Securities may nevertheless be
tendered, provided that all of the following guaranteed delivery procedures are
complied with:
(a) such tenders are made by or through an Eligible Institution;
(b) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form accompanying the Letter of Transmittal, is received by
the Exchange Agent, as provided below, on or prior to the Expiration Date; and
(c) the certificates (or a book-entry confirmation) representing all
tendered Old Capital Securities, in proper form for transfer, together with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees and any other documents
required by the Letter of Transmittal, are received by the Exchange Agent within
three New York Stock Exchange trading days after the date of execution of such
Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or transmitted
by facsimile or mail to the Exchange Agent and must include a guarantee by an
Eligible Institution in the form set forth in such notice.
Notwithstanding any other provision hereof, the delivery of New Capital
Securities in exchange for Old Capital Securities tendered and accepted for
exchange pursuant to the Exchange Offer will in all cases be made only after
timely receipt by the Exchange Agent of Old Capital Securities, or of a
book-entry confirmation with respect to such Old Capital Securities, and a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), together with any required signature guarantees and any other
documents required by the Letter of Transmittal. Accordingly, the delivery of
New Capital Securities might not be made to all tendering holders at the same
time, and will depend upon when Old Capital Securities, book-entry confirmations
with respect to Old Capital Securities and other required documents are received
by the Exchange Agent.
The Trust's acceptance for exchange of Old Capital Securities tendered
pursuant to any of the procedures described above will constitute a binding
agreement between the tendering holder and the Trust upon the terms and subject
to the conditions of the Exchange Offer.
DETERMINATION OF VALIDITY
All questions as to the form of documents, validity, eligibility (including
time of receipt) and acceptance for exchange of any tendered Old Capital
Securities will be determined by the Corporation and the Trust, in their sole
discretion, whose determination shall be final and binding on all parties. The
Corporation and the Trust reserve the absolute right, in their sole and absolute
discretion, to reject any and all tenders determined by them not to be in proper
form or the acceptance of which, or exchange for, may, in the opinion of counsel
to the Corporation and the Trust, be unlawful. The Corporation and the Trust
also reserve the absolute right, subject to applicable law, to waive any of the
conditions of the Exchange Offer as set forth under "-- Conditions to the
Exchange Offer" or any condition or irregularity in any tender of Old Capital
Securities of any particular holder whether or not similar conditions or
irregularities are waived in the case of other holders.
The interpretation by the Corporation and the Trust of the terms and
conditions of the Exchange Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding. No tender of Old Capital
Securities will be deemed to have been validly made until all irregularities
with respect to such tender have been cured or waived. Neither the Corporation,
the Trust, any affiliates or assigns of the Corporation or the Trust, the
Exchange Agent nor any other person shall be under any duty to give any
notification of any irregularities in tenders or incur any liability for failure
to give any such notification.
If any Letter of Transmittal, endorsement, bond power, power of attorney,
or any other document required by the Letter of Transmittal is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and unless waived by the
Corporation and the Trust, proper evidence satisfactory to the Corporation and
the Trust, in their sole discretion, of such person's authority to so act must
be submitted.
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A beneficial owner of Old Capital Securities that are held by or registered
in the name of a broker, dealer, commercial bank, trust company or other nominee
or custodian is urged to contact such entity promptly if such beneficial holder
wishes to participate in the Exchange Offer.
RESALES OF NEW CAPITAL SECURITIES
The Trust is making the Exchange Offer for the New Capital Securities in
reliance on the position of the staff of the Division of Corporation Finance of
the Commission as set forth in certain interpretive letters addressed to third
parties in other transactions. However, neither the Corporation nor the Trust
sought its own interpretive letter and there can be no assurance that the staff
of the Division of Corporation Finance of the Commission would make a similar
determination with respect to the Exchange Offer as it has in such interpretive
letters to third parties. Based on these interpretations by the staff of the
Division of Corporation Finance of the Commission, and subject to the two
immediately following sentences, the Corporation and the Trust believe that New
Capital Securities issued pursuant to this Exchange Offer in exchange for Old
Capital Securities may be offered for resale, resold and otherwise transferred
by a holder thereof (other than a holder who is a broker-dealer) without further
compliance with the registration and prospectus delivery requirements of the
Securities Act, provided that such New Capital Securities are acquired in the
ordinary course of such holder's business and that such holder is not
participating, and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the Securities Act) of
such New Capital Securities. However, any holder of Old Capital Securities who
is an "affiliate" of the Corporation or the Trust or who intends to participate
in the Exchange Offer for the purpose of distributing New Capital Securities, or
any broker-dealer who purchased Old Capital Securities from the Trust to resell
pursuant to Rule 144A or any other available exemption under the Securities Act,
(a) will not be able to rely on the interpretations of the staff of the Division
of Corporation Finance of the Commission set forth in the above-mentioned
interpretive letters, (b) will not be permitted or entitled to tender such Old
Capital Securities in the Exchange Offer and (c) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any sale or other transfer of such Old Capital Securities unless
such sale is made pursuant to an exemption from such requirements. In addition,
as described below, if any broker-dealer holds Old Capital Securities acquired
for its own account as a result of market-making or other trading activities and
exchanges such Old Capital Securities for New Capital Securities, then such
broker-dealer must deliver a prospectus meeting the requirements of the
Securities Act in connection with any resales of such New Capital Securities.
Each holder of Old Capital Securities who wishes to exchange Old Capital
Securities for New Capital Securities in the Exchange Offer will be required to
represent that (i) it is not an "affiliate" of the Corporation or the Trust,
(ii) any New Capital Securities to be received by it are being acquired in the
ordinary course of its business, (iii) it has no arrangement or understanding
with any person to participate in a distribution (within the meaning of the
Securities Act) of such New Capital Securities, and (iv) if such holder is not a
broker-dealer, such holder is not engaged in, and does not intend to engage in,
a distribution (within the meaning of the Securities Act) of such New Capital
Securities. In addition, the Corporation and the Trust may require such holder,
as a condition to such holder's eligibility to participate in the Exchange
Offer, to furnish to the Corporation and the Trust (or an agent thereof) in
writing information as to the number of "beneficial owners" (within the meaning
of Rule 13d-3 under the Exchange Act) on behalf of whom such holder holds the
Capital Securities to be exchanged in the Exchange Offer. Each broker-dealer
that receives New Capital Securities for its own account pursuant to the
Exchange Offer must acknowledge that it acquired the Old Capital Securities for
its own account as the result of market-making activities or other trading
activities and must agree that it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such New
Capital Securities. The Letter of Transmittal states that by so acknowledging
and by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act. Based on the
position taken by the staff of the Division of Corporation Finance of the
Commission in the interpretive letters referred to above, the Corporation and
the Trust believe that Participating Broker-Dealers who acquired Old Capital
Securities for their own accounts as a result of market-making activities or
other trading activities may fulfill their prospectus delivery requirements with
respect to the New Capital Securities received upon exchange of such Old Capital
Securities (other than Old Capital Securities which represent an unsold
allotment from the
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original sale of the Old Capital Securities) with a prospectus meeting the
requirements of the Securities Act, which may be the prospectus prepared for an
exchange offer so long as it contains a description of the plan of distribution
with respect to the resale of such New Capital Securities. Accordingly, this
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Participating Broker-Dealer during the period referred to below in
connection with resales of New Capital Securities received in exchange for Old
Capital Securities where such Old Capital Securities were acquired by such
Participating Broker-Dealer for its own account as a result of market-making or
other trading activities. Subject to certain provisions set forth in the
Registration Rights Agreement, the Corporation and the Trust have agreed that
this Prospectus, as it may be amended or supplemented from time to time, may be
used by a Participating Broker-Dealer in connection with resales of such New
Capital Securities for a period ending 90-days after the Expiration Date
(subject to extension under certain limited circumstances described below) or,
if earlier, when all such New Capital Securities have been disposed of by such
Participating Broker-Dealer. See "Plan of Distribution." However, a
Participating Broker-Dealer who intends to use this Prospectus in connection
with the resale of New Capital Securities received in exchange for Old Capital
Securities pursuant to the Exchange Offer must notify the Corporation or the
Trust, or cause the Corporation or the Trust to be notified, on or prior to the
Expiration Date, that it is a Participating Broker-Dealer. Such notice may be
given in the space provided for that purpose in the Letter of Transmittal or may
be delivered to the Exchange Agent at one of the addresses set forth herein
under "-- Exchange Agent." Any Participating Broker-Dealer who is an "affiliate"
of the Corporation or the Trust may not rely on such interpretive letters and
must comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction.
In that regard, each Participating Broker-Dealer who surrenders Old Capital
Securities pursuant to the Exchange Offer will be deemed to have agreed, by
execution of the Letter of Transmittal, that, upon receipt of notice from the
Corporation or the Trust of the occurrence of any event or the discovery of any
fact which makes any statement contained or incorporated by reference in this
Prospectus untrue in any material respect or which causes this Prospectus to
omit to state a material fact necessary in order to make the statements
contained or incorporated by reference herein, in light of the circumstances
under which they were made, not misleading or of the occurrence of certain other
events specified in the Registration Rights Agreement, such Participating
Broker-Dealer will suspend the sale of New Capital Securities (or the New
Guarantee or the New Junior Subordinated Debentures, as applicable) pursuant to
this Prospectus until the Corporation or the Trust has amended or supplemented
this Prospectus to correct such misstatement or omission and has furnished
copies of the amended or supplemented Prospectus to such Participating
Broker-Dealer or the Corporation or the Trust has given notice that the sale of
the New Capital Securities (or the New Guarantee or the New Junior Subordinated
Debentures, as applicable) may be resumed, as the case may be. If the
Corporation or the Trust gives such notice to suspend the sale of the New
Capital Securities (or the New Guarantee or the New Junior Subordinated
Debentures, as applicable), it shall extend the 90-day period referred to above
during which Participating Broker-Dealers are entitled to use this Prospectus in
connection with the resale of New Capital Securities by the number of days
during the period from and including the date of the giving of such notice to
and including the date when Participating Broker-Dealers shall have received
copies of the amended or supplemented Prospectus necessary to permit resales of
the New Capital Securities or to and including the date on which the Corporation
or the Trust has given notice that the sale of New Capital Securities (or the
New Guarantee or the New Junior Subordinated Debentures, as applicable) may be
resumed, as the case may be.
WITHDRAWAL RIGHTS
Except as otherwise provided herein, tenders of Old Capital Securities may
be withdrawn at any time on or prior to the Expiration Date.
In order for a withdrawal to be effective a written, telegraphic, telex or
facsimile transmission of such notice of withdrawal must be timely received by
the Exchange Agent at one of its addresses set forth under "-- Exchange Agent"
on or prior to the Expiration Date. Any such notice of withdrawal must specify
the name of the person who tendered the Old Capital Securities to be withdrawn,
the aggregate principal amount of Old Capital Securities to be withdrawn, and
(if certificates for such Old Capital Securities have been
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tendered) the name of the registered holder of the Old Capital Securities as set
forth on the Old Capital Securities, if different from that of the person who
tendered such Old Capital Securities. If Old Capital Securities have been
delivered or otherwise identified to the Exchange Agent, then prior to the
physical release of such Old Capital Securities, the tendering holder must
submit the serial numbers shown on the particular Old Capital Securities to be
withdrawn and the signature on the notice of withdrawal must be guaranteed by an
Eligible Institution, except in the case of Old Capital Securities tendered for
the account of an Eligible Institution. If Old Capital Securities have been
tendered pursuant to the procedures for book-entry transfer set forth in "--
Procedures for Tendering Old Capital Securities," the notice of withdrawal must
specify the name and number of the account at DTC to be credited with the
withdrawal of Old Capital Securities, in which case a notice of withdrawal will
be effective if delivered to the Exchange Agent by written, telegraphic, telex
or facsimile transmission. Withdrawals of tenders of Old Capital Securities may
not be rescinded. Old Capital Securities properly withdrawn will not be deemed
validly tendered for purposes of the Exchange Offer, but may be retendered at
any subsequent time on or prior to the Expiration Date by following any of the
procedures described above under "-- Procedures for Tendering Old Capital
Securities."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Trust, in its sole
discretion, whose determination shall be final and binding on all parties.
Neither the Corporation, the Trust, any affiliates or assigns of the Corporation
or the Trust, the Exchange Agent nor any other person shall be under any duty to
give any notification of any irregularities in any notice of withdrawal or incur
any liability for failure to give any such notification. Any Old Capital
Securities which have been tendered but which are withdrawn will be returned to
the holder thereof promptly after withdrawal.
DISTRIBUTIONS ON NEW CAPITAL SECURITIES
Holders of Old Capital Securities whose Old Capital Securities are accepted
for exchange will not receive Distributions on such Old Capital Securities and
will be deemed to have waived the right to receive any Distributions on such Old
Capital Securities accumulated from and after March 25, 1997. Accordingly,
holders of New Capital Securities as of the record date for the payment of
Distributions on June 15, 1997 will be entitled to receive Distributions
accumulated from and after March 25, 1997.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, the Corporation and the Trust will not be
required to accept for exchange, or to exchange, any Old Capital Securities for
any New Capital Securities, and, as described below, may terminate the Exchange
Offer (whether or not any Old Capital Securities have theretofore been accepted
for exchange) or may waive any conditions to or amend the Exchange Offer, if any
of the following conditions have occurred or exists or have not been satisfied:
(a) there shall occur a change in the current interpretation by the staff
of the Commission which permits the New Capital Securities issued pursuant to
the Exchange Offer in exchange for Old Capital Securities to be offered for
resale, resold and otherwise transferred by holders thereof (other than
broker-dealers and any such holder which is an "affiliate" of the Corporation or
the Trust within the meaning of Rule 405 under the Securities Act) without
compliance with the registration and prospectus delivery provisions of the
Securities Act provided that such New Capital Securities are acquired in the
ordinary course of such holders' business and such holders have no arrangement
or understanding with any person to participate in the distribution of such New
Capital Securities; or
(b) any law, statute, rule or regulation shall have been adopted or enacted
which, in the judgment of the Corporation or the Trust, would reasonably be
expected to impair its ability to proceed with the Exchange Offer; or
(c) a stop order shall have been issued by the Commission or any state
securities authority suspending the effectiveness of the Registration Statement
or proceedings shall have been initiated or, to the knowledge of the Corporation
or the Trust, threatened for that purpose any governmental approval has not been
obtained,
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which approval the Corporation or the Trust shall, in its sole discretion, deem
necessary for the consummation of the Exchange Offer as contemplated hereby.
If the Corporation or the Trust determines in its sole and absolute
discretion that any of the foregoing events or conditions has occurred or exists
or has not been satisfied, it may, subject to applicable law, terminate the
Exchange Offer (whether or not any Old Capital Securities have theretofore been
accepted for exchange) or may waive any such condition or otherwise amend the
terms of the Exchange Offer in any respect. If such waiver or amendment
constitutes a material change to the Exchange Offer, the Corporation or the
Trust will promptly disclose such waiver or amendment by means of a prospectus
supplement that will be distributed to the registered holders of the Old Capital
Securities and will extend the Exchange Offer to the extent required by Rule
14e-1 under the Exchange Act.
EXCHANGE AGENT
The First National Bank of Chicago has been appointed as Exchange Agent for
the Exchange Offer. Delivery of the Letters of Transmittal and any other
required documents, questions, requests for assistance, and requests for
additional copies of this Prospectus or of the Letter of Transmittal should be
directed to the Exchange Agent as follows:
<TABLE>
<S> <C>
By Registered or Certified Mail: By Hand or Overnight Delivery:
The First National Bank of Chicago The First National Bank of Chicago
c/o First Chicago Trust Company of New York c/o First Chicago Trust Company of New York
14 Wall Street 14 Wall Street
8th Floor, Window 2 8th Floor, Window 2
New York, New York 10005 New York, New York 10005
</TABLE>
Confirm By Telephone:
(212) 240-8801
Facsimile Transmissions:
(ELIGIBLE INSTITUTIONS ONLY)
(212) 240-8938
Delivery to other than the above addresses or facsimile number will not
constitute a valid delivery.
FEES AND EXPENSES
The Corporation has agreed to pay the Exchange Agent reasonable and
customary fees for its services and will reimburse it for its reasonable
out-of-pocket expenses in connection therewith. The Corporation will also pay
brokerage houses and other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of this Prospectus
and related documents to the beneficial owners of Old Capital Securities, and in
handling or tendering for their customers.
Holders who tender their Old Capital Securities for exchange will not be
obligated to pay any transfer taxes in connection therewith. If, however, New
Capital Securities are to be delivered to, or are to be issued in the name of,
any person other than the registered holder of the Old Capital Securities
tendered, or if a transfer tax is imposed for any reason other than the exchange
of Old Capital Securities in connection with the Exchange Offer, then the amount
of any such transfer taxes (whether imposed on the registered holder or any
other persons) will be payable by the tendering holder. If satisfactory evidence
of payment of such taxes or exemption therefrom is not submitted with the Letter
of Transmittal, the amount of such transfer taxes will be billed directly to
such tendering holder.
Neither the Corporation nor the Trust will make any payment to brokers,
dealers or other nominees soliciting acceptances of the Exchange Offer.
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DESCRIPTION OF NEW SECURITIES
DESCRIPTION OF NEW CAPITAL SECURITIES
Pursuant to the terms of the Declaration, the Trust has issued the Old
Capital Securities and the Common Securities and will issue the New Capital
Securities. The New Capital Securities will represent preferred beneficial
interests in the Trust and the holders of the New Capital Securities and the Old
Capital Securities will be entitled to a preference over the Common Securities
in certain circumstances with respect to Distributions and amounts payable on
redemption of the Trust Securities or liquidation of the Trust. See "--
Subordination of Common Securities" below. The Declaration has been qualified
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
The following description does not purport to be complete and is subject to, and
is qualified in its entirety by reference to, all of the provisions of the
Declaration and those terms made a part of the Declaration by the Trust
Indenture Act. Certain capitalized terms used herein are defined in the
Declaration.
General. The Capital Securities (including the Old Capital Securities and
the New Capital Securities) are limited to $40,000,000 aggregate Liquidation
Amount at any one time outstanding. The New Capital Securities will rank pari
passu, and payments will be made thereon pro rata, with the Old Capital
Securities and the Common Securities except as described under "-- Subordination
of Common Securities." Legal title to the New Junior Subordinated Debentures
will be held by the Property Trustee in trust for the benefit of the holders of
the New Capital Securities and the Common Securities. The New Guarantee will not
guarantee payment of Distributions or amounts payable on redemption of the New
Capital Securities or on liquidation of the Trust when the Trust does not have
funds on hand legally available for such payments. See "--Description of New
Guarantee."
Distributions. Distributions on the New Capital Securities will be
cumulative, will accumulate from March 25, 1997 and will be payable
semi-annually in arrears on June 15 and December 15 of each year, commencing
June 15, 1997, at the annual rate of 9.35% of the Liquidation Amount to the
holders of the New Capital Securities on the relevant record dates. The record
dates will be the 15th day of the month immediately preceding the month in which
the relevant Distribution Date (as defined herein) falls. The amount of
Distributions payable for any period will be computed on the basis of a 360-day
year of twelve 30-day months and, for any period of less than a full calendar
month, the number of days elapsed in such month. In the event that any date on
which Distributions are payable on the New Capital Securities is not a Business
Day (as defined herein), payment of the Distribution payable on such date will
be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect to any such delay), except that if such
next succeeding Business Day falls in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on the date such payment was
originally payable (each date on which Distributions are payable in accordance
with the foregoing, a "Distribution Date"). A "Business Day" shall mean any day
other than a Saturday or a Sunday, or a day on which banking institutions in New
York, New York, or Chicago, Illinois are authorized or required by law or
executive order to close.
So long as no Debenture Event of Default shall have occurred and be
continuing, the Corporation will have the right under the Indenture to elect to
defer the payment of interest on the New Junior Subordinated Debentures at any
time and from time to time for a period not exceeding 10 consecutive semi-annual
periods with respect to each Extension Period, provided that no Extension Period
shall end on a date other than an Interest Payment Date or extend beyond the
Stated Maturity Date. Upon any such election, semiannual Distributions on the
New Capital Securities will be deferred by the Trust during such Extension
Period. Distributions to which holders of the New Capital Securities are
entitled during any such Extension Period will accumulate additional
Distributions thereon at the rate per annum of 9.35% thereof, compounded
semiannually from the relevant Distribution Date, but not exceeding the interest
rate then accruing on the New Junior Subordinated Debentures. The term
"Distributions," as used herein, shall include any such additional
Distributions.
Prior to the termination of any such Extension Period, the Corporation may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive
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semiannual periods, end on a date other than an Interest Payment Date or extend
beyond the Stated Maturity Date. Upon the termination of any such Extension
Period and the payment of all amounts then due, and subject to the foregoing
limitations, the Corporation may elect to begin a new Extension Period. No
interest shall be due and payable during an Extension Period, except at the end
thereof. The Corporation must give the Property Trustee, the Administrative
Trustees and the Debenture Trustee notice of its election of any Extension
Period or any extension thereof at least five Business Days prior to the earlier
of (i) the date the Distributions on the New Capital Securities would have been
payable except for the election to begin or extend such Extension Period and
(ii) the date the Administrative Trustees are required to give notice to any
securities exchange or to holders of the Capital Securities of the record date
or the date such Distributions are payable, but in any event not less than five
Business Days prior to such record date. There is no limitation on the number of
times that the Corporation may elect to begin an Extension Period. See "--
Description of New Junior Subordinated Debentures -- Option to Extend Interest
Payment Date" and "Certain Federal Income Tax Considerations -- Interest Income
and Original Issue Discount."
During any such Extension Period, the Corporation may not (i) declare or
pay any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Corporation's capital stock
(other than (a) dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, common stock of the Corporation,
(b) any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
as a result of reclassification of the Corporation's capital stock or the
exchange or conversion of one class or series of the Corporation's capital stock
for another class or series of the Corporation's capital stock, (d) 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, (e) purchases of common stock related to the
issuance of common stock or rights under any of the Corporation's benefit plans
for its directors, officers or employees or any of the Corporation's dividend
reinvestment plans and (f) purchases of Common Stock in connection with the
satisfaction by the Guarantor of its obligations pursuant to any contract or
security requiring the Guarantor to purchase shares of Common Stock), (ii) make
any payment of principal or premium, if any, or interest on or repay, repurchase
or redeem any debt securities of the Corporation (including Other Debentures)
that rank pari passu with or junior in right of payment to the New Junior
Subordinated Debentures or (iii) make any guarantee payments (other than
payments under the Guarantee) with respect to any guarantee by the Corporation
of the debt securities of any subsidiary of the Corporation (including Other
Guarantees) if such guarantee ranks pari passu with or junior in right of
payment to the New Junior Subordinated Debentures.
Although the Corporation may in the future exercise its option to defer
payments of interest on the New Junior Subordinated Debentures, the Corporation
has no such current intention.
The revenue of the Trust available for distribution to holders of the
Capital Securities will be limited to payments under the New Junior Subordinated
Debentures. See "-- Description of New Junior Subordinated Debentures --
General." If the Corporation does not make interest payments on the New Junior
Subordinated Debentures, the Property Trustee will not have funds available to
pay Distributions on the New Capital Securities. The payment of Distributions on
the New Capital Securities (if and to the extent the Trust has funds on hand
legally available for the payment of such Distributions) will be guaranteed by
the Corporation on a limited basis as set forth herein under "-- Description of
New Guarantee."
Redemption. Upon the repayment on the Stated Maturity Date or prepayment
prior to the Stated Maturity Date of the Junior Subordinated Debentures, the
proceeds from such repayment or prepayment shall be applied by the Property
Trustee to redeem a Like Amount (as defined below) of the Trust Securities, upon
not less than 30 nor more than 60 days' notice of a date of redemption (the
"Redemption Date"), at the applicable Redemption Price, which shall be equal to
(i) in the case of the repayment of the Junior Subordinated Debentures on the
Stated Maturity Date, the Maturity Redemption Price (equal to the principal of,
and accrued and unpaid interest on, the Junior Subordinated Debentures), (ii) in
the case of the optional prepayment of the Junior Subordinated Debentures before
the Initial Optional Prepayment Date upon the occurrence and continuation of a
Special Event, the Special Event Redemption Price (equal to the
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<PAGE> 43
Special Event Prepayment Price in respect of the Junior Subordinated Debentures)
and (iii) in the case of the optional prepayment of the Junior Subordinated
Debentures on or after the Initial Optional Prepayment Date, the Optional
Redemption Price (equal to the Optional Prepayment Price in respect of the
Junior Subordinated Debentures). See "-- Description of New Junior Subordinated
Debentures -- Optional Prepayment" and "-- Special Event Prepayment."
"Like Amount" means (i) with respect to a redemption of the Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Junior Subordinated Debentures to be paid in accordance with their
terms and (ii) with respect to a distribution of Junior Subordinated Debentures
upon the liquidation of the Trust, Junior Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Trust Securities of the
holder to whom such Junior Subordinated Debentures are distributed.
The Corporation will have the option to prepay the Junior Subordinated
Debentures, (i) in whole or in part, on or after the Initial Optional Prepayment
Date, at the applicable Optional Prepayment Price and (ii) in whole but not in
part, at any time before the Initial Optional Prepayment Date, upon the
occurrence of a Special Event, at the Special Event Prepayment Price, in each
case subject to receipt of prior approval by the Federal Reserve, if then
required under applicable capital guidelines or policies of the Federal Reserve.
See "-- Description of New Junior Subordinated Debentures -- Optional
Prepayment" and "-- Special Event Prepayment."
Liquidation of the Trust and Distribution of Junior Subordinated
Debentures. The Corporation will have the right at any time to terminate the
Trust and cause the Junior Subordinated Debentures to be distributed to the
holders of the Trust Securities in liquidation of the Trust. Such right is
subject to (i) the Corporation having received an opinion of counsel to the
effect that such distribution will not be a taxable event to holders of Capital
Securities and (ii) the prior approval of the Federal Reserve, if then required
under applicable capital guidelines or policies of the Federal Reserve.
The Trust shall automatically terminate upon 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 Junior Subordinated Debentures to
the holders of the Trust Securities, if the Corporation, as Sponsor, has given
written direction to the Property Trustee to terminate the Trust (which
direction is optional and, except as described above, wholly within the
discretion of the Corporation, as Sponsor); (iii) redemption of all of the Trust
Securities as described under "-- Redemption"; (iv) expiration of the term of
the Trust; and (v) the entry of an order for the dissolution of the Trust by a
court of competent jurisdiction.
If a termination occurs as described in clause (i), (ii), (iv), or (v) of
the preceding paragraph, the Trust shall be liquidated by the Administrative
Trustees as expeditiously as the Administrative Trustees determine to be
possible by distributing, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, to the holders of the Trust Securities a
Like Amount of the Junior Subordinated Debentures, unless such distribution is
determined by the Property Trustee not to be practicable, in which event such
holders will be entitled to receive out of the assets of the Trust legally
available for distribution to holders, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, an amount equal to the
aggregate of the Liquidation Amount plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"). If the Liquidation Distribution can be paid only in part because
the Trust has insufficient assets on hand legally available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Capital Securities and the Common Securities shall be paid on a pro
rata basis, except that if a Debenture Event of Default has occurred and is
continuing, the Capital Securities shall have a priority over the Common
Securities. See "-- Subordination of Common Securities" below.
After the liquidation date is fixed for any distribution of Junior
Subordinated Debentures to holders of the Trust Securities, (i) the Trust
Securities will no longer be deemed to be outstanding, (ii) The Depository Trust
Company ("DTC") or its nominee will receive, in respect of each registered
global certificate, if any, representing Trust Securities and held by it, a
registered global certificate or certificates representing the Junior
Subordinated Debentures to be delivered upon such distribution and (iii) any
certificates representing
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Trust Securities not held by DTC or its nominee will be deemed to represent
Junior Subordinated Debentures having a principal amount equal to the
Liquidation Amount of such Trust Securities, and bearing accrued and unpaid
interest in an amount equal to the accumulated and unpaid Distributions on such
Trust Securities until such certificates are presented to the Administrative
Trustees or their agent for cancellation, whereupon the Corporation will issue
to such holder, and the Debenture Trustee will authenticate, a certificate
representing such Junior Subordinated Debentures.
There can be no assurance as to the market prices for the New Capital
Securities or the New Junior Subordinated Debentures that may be distributed in
exchange for the Trust Securities if a dissolution and liquidation of the Trust
were to occur. Accordingly, the New Capital Securities, or the Junior
Subordinated Debentures that an investor may receive on dissolution and
liquidation of the Trust, may trade at a discount to the price that the investor
paid to purchase the New Capital Securities.
REDEMPTION PROCEDURES
If applicable, Trust Securities shall be redeemed at the applicable
Redemption Price with the proceeds from the contemporaneous repayment or
prepayment of the Junior Subordinated Debentures. Any redemption of Trust
Securities shall be made and the applicable Redemption Price shall be payable on
the Redemption Date only to the extent that the Trust has funds legally
available for the payment of such applicable Redemption Price. See also
"-- Subordination of Common Securities."
If the Trust gives a notice of redemption in respect of the Capital
Securities, then, by 12:00 noon, New York City time, on the Redemption Date, to
the extent funds are legally available, with respect to the Capital Securities
held by DTC or its nominees, the Property Trustee will pay or cause the Paying
Agent to pay the Redemption Price to DTC. See "-- Form, Denomination, Book-Entry
Procedures and Transfer" below. With respect to the Capital Securities held in
certificated form, the Property Trustee, to the extent funds are legally
available, will give irrevocable instructions and authority to the Paying Agent
and will irrevocably deposit with the Paying Agent for the Capital Securities
funds sufficient to pay the applicable Redemption Price to the holders thereof
upon surrender of their certificates evidencing the Capital Securities. See
"-- Payment and Paying Agency." Distributions payable on or prior to the
Redemption Date 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 with the Property Trustee
to pay the Redemption Price for the Capital Securities called for redemption,
then upon the date of such deposit all rights of the holders of such Capital
Securities will cease, except the right of the holders of such Capital
Securities to receive the applicable Redemption Price, but without interest on
such Redemption Price, and such Capital Securities will cease to be outstanding.
In the event that any Redemption Date is not a Business Day, then the applicable
Redemption Price payable on such date will be paid on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such next succeeding Business Day falls in the
next calendar year, such payment shall be made on the immediately preceding
Business Day. In the event that payment of the applicable Redemption Price is
improperly withheld or refused and not paid either by the Trust or by the
Corporation pursuant to the Guarantee as described under "-- Description of New
Guarantee," (i) distributions on Capital Securities called for redemption will
accumulate at the then applicable rate, from the Redemption Date originally
established by the Trust to the date such applicable Redemption Price is
actually paid, and (ii) the actual payment date will be the Redemption Date for
purposes of calculating the applicable Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law and the regulations of the Federal Reserve), the
Corporation or its subsidiaries may at any time and from time to time purchase
outstanding Capital Securities by tender, in the open market or by private
agreement.
Notice of any redemption will be mailed at least 30 days but not more than
60 days prior to the Redemption Date to each holder of Trust Securities at its
registered address. Unless the Corporation defaults in payment of the applicable
Redemption Price on, or in the repayment of, the Junior Subordinated Debentures,
on and after the Redemption Date, Distributions will cease to accrue on the
Trust Securities called for redemption.
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Subordination of Common Securities. Payment of Distributions on, and the
Redemption Price of, the Trust Securities, as applicable, shall be made pro rata
based on the Liquidation Amount of the Trust Securities; provided, however, that
if on any Distribution Date or Redemption Date a Debenture Event of Default
shall have occurred and be continuing, no payment of any Distribution on, or
applicable Redemption Price of, any of the Common Securities, and no other
payment on account of the redemption, liquidation or other acquisition of the
Common Securities, shall be made unless payment in full in cash of all
accumulated and unpaid Distributions on all of the outstanding Capital
Securities for all Distribution periods terminating on or prior thereto or, in
the case of Capital Securities called for redemption on a Redemption Date on or
prior thereto, the full amount of the Redemption Price therefor, shall have been
made or provided for, and all funds available to the Property Trustee shall
first be applied to the payment in full in cash of all Distributions on, or
Redemption Price of, the Capital Securities then due and payable.
In the case of any Event of Default, the Corporation as holder of the
Common Securities will be deemed to have waived any right to act with respect to
such Event of Default until the effect of such Event of Default shall have been
cured, waived or otherwise eliminated. Until any such Event of Default has been
so cured, waived or otherwise eliminated, the Property Trustee shall act solely
on behalf of the holders of the Capital Securities and not on behalf of the
Corporation as holder of the Common Securities, and only the holders of the
Capital Securities will have the right to direct the Property Trustee to act on
their behalf.
Events of Default; Notice. The occurrence of a Debenture Event of Default
(see "-- Description of New Junior Subordinated Debentures -- Debenture Events
of Default") constitutes an "Event of Default" under the Declaration.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the Capital Securities, the
Administrative Trustees and the Corporation, as Sponsor, unless such Event of
Default shall have been cured or waived. The Corporation, as Sponsor, and the
Administrative Trustees are required to file annually with the Property Trustee
a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under the Declaration.
If a Debenture Event of Default has occurred and is continuing, the Capital
Securities shall have a preference over the Common Securities as described under
"-- Liquidation of the Trust and Distribution of Junior Subordinated Debentures"
and "-- Subordination of Common Securities."
Removal of Issuer Trustees. Unless a Debenture Event of Default shall have
occurred and be continuing, any Issuer Trustee may be removed at any time by the
holder of the Common Securities. If a Debenture Event of Default has occurred
and is continuing, the Property Trustee and the Delaware Trustee may be removed
at such time by the holders of a majority in Liquidation Amount of the
outstanding Capital Securities. In no event will the holders of the Capital
Securities have the right to vote to appoint, remove or replace the
Administrative Trustees, which voting rights are vested exclusively in the
Corporation as the holder of the Common Securities. No resignation or removal of
an Issuer Trustee and no appointment of a successor trustee shall be effective
until the acceptance of appointment by the successor Trustee in accordance with
the provisions of the Declaration.
Merger or Consolidation of Issuer Trustees. Any corporation into which the
Property Trustee, the Delaware Trustee or any Administrative Trustee that is not
a natural person may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which such Issuer Trustee shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of such
Issuer Trustee, shall be the successor of such Issuer Trustee under the
Declaration, provided such corporation shall be otherwise qualified and
eligible.
Mergers, Conversions, Consolidations, Amalgamations or Replacements of the
Trust. The Trust may not merge or convert with or into, consolidate, amalgamate,
or be replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any corporation or other Person,
except as described below. The Trust may, at the request of the Corporation, as
Sponsor, with the consent of the Administrative Trustees but without the consent
of the holders of the Capital Securities, merge with or into,
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consolidate, amalgamate, or be replaced by or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to a trust
organized as such under the laws of any State; provided, that (i) such successor
entity either (a) expressly assumes all of the obligations of the Trust with
respect to the Trust Securities or (b) substitutes for the Trust Securities
other securities having substantially the same terms as the Trust Securities
(the "Successor Securities") so long as the Successor Securities rank the same
as the Trust Securities rank in priority with respect to distributions and
payments upon liquidation, redemption and otherwise, (ii) the Corporation
expressly appoints a trustee of such successor entity possessing the same powers
and duties as the Property Trustee with respect to the Junior Subordinated
Debentures, (iii) the Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or other organization on which the Capital Securities are
then listed or quoted, if any, (iv) if the Capital Securities (including any
Successor Securities) are rated by any nationally recognized statistical rating
organization prior to such transaction, such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Capital Securities (including any Successor Securities) or, if the Junior
Subordinated Debentures are so rated, the Junior Subordinated Debentures, to be
downgraded by any such nationally recognized statistical rating organization,
(v) such merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Trust Securities (including any Successor
Securities) in any material respect (other than any dilution of such holders'
interests in the new entity), (vi) such successor entity has a purpose identical
to that of the Trust, (vii) prior to such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Corporation has
received an opinion from independent counsel to the Trust experienced in such
matters to the effect that (a) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of the Trust
Securities (including any Successor Securities) in any material respect (other
than any dilution of such holders' interests in the new entity), and (b)
following such merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease, neither the Trust nor such successor entity will
be required to register as an investment company under the Investment Company
Act of 1940, as amended (the "Investment Company Act"), and (viii) the
Corporation or any permitted successor or assignee owns all of the common
securities of such successor entity and guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Guarantee. Notwithstanding the foregoing, the Trust shall not, except
with the consent of holders of 100% in Liquidation Amount of the Trust
Securities, consolidate, amalgamate, merge or convert with or into, or be
replaced by or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any other entity or permit any other
entity to consolidate, amalgamate, merge or convert with or into, or replace it
if such consolidation, amalgamation, merger, conversion, replacement,
conveyance, transfer or lease would cause the Trust or the successor entity not
to be classified as a grantor trust for United States federal income tax
purposes.
Voting Rights; Amendment of the Declaration. Except as provided below and
under "-- Mergers, Conversions, Consolidations, Amalgamations or Replacements of
the Trust" and "-- Description of New Guarantee -- Amendments and Assignment"
and as otherwise required by law and the Declaration, the holders of the Capital
Securities will have no voting rights.
The Declaration may be amended from time to time by the Corporation, the
Property Trustee and the Administrative Trustees, without the consent of the
holders of the Trust Securities (i) to cure any ambiguity, correct or supplement
any provisions in the Declaration that may be inconsistent with any other
provision, or to make any other provisions with respect to matters or questions
arising under the Declaration, which shall not be inconsistent with the other
provisions of the Declaration, or (ii) to modify, eliminate or add to any
provisions of the Declaration to such extent as shall be necessary to ensure
that the Trust will be classified for United States federal income tax purposes
as a grantor trust at all times that any Trust Securities are outstanding or to
ensure that the Trust will not be required to register as an "investment
company" under the Investment Company Act; provided, however, that in the case
of clause (i), such action shall not adversely affect in any material respect
the interests of the holders of the Trust Securities, and any amendments of the
Declaration shall become effective when notice thereof is given to the holders
of the Trust Securities. The Declaration may be amended by the Issuer Trustees
and the Corporation (i) with the consent of holders
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representing a majority (based upon Liquidation Amount) of the outstanding Trust
Securities, and (ii) upon receipt by the Issuer Trustees of an opinion of
counsel experienced in such matters to the effect that such amendment or the
exercise of any power granted to the Issuer Trustees in accordance with such
amendment will not affect the Trust's status as a grantor trust for United
States federal income tax purposes or the Trust's exemption from status as an
"investment company" under the Investment Company Act, provided that, without
the consent of each holder of Trust Securities, the Declaration may not be
amended to (i) change the amount or timing of any Distribution 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; it being understood that
the New Capital Securities and any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer will vote together as a
single class for purposes of determining whether holders of the requisite
percentage in outstanding Liquidation Amount thereof have taken certain actions
or exercised certain rights under the Declaration.
So long as any Junior Subordinated Debentures are held by the Property
Trustee, the Issuer Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on such Property Trustee with respect to
the Junior Subordinated Debentures, (ii) waive certain past defaults under the
Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Junior Subordinated
Debentures or (iv) consent to any amendment, modification or termination of the
Indenture or the Junior Subordinated Debentures, where such consent shall be
required, without, in each case, obtaining the prior approval of the holders of
a majority in Liquidation Amount of all outstanding Capital Securities;
provided, however, that where a consent under the Indenture would require the
consent of each holder of Junior Subordinated Debentures affected thereby, no
such consent shall be given by the Property Trustee without the prior approval
of each holder of the Capital Securities. The Issuer Trustees shall not revoke
any action previously authorized or approved by a vote of the holders of the
Capital Securities except by subsequent vote of such holders. The Property
Trustee shall notify each holder of Capital Securities of any notice of default
with respect to the Junior Subordinated Debentures. In addition to obtaining the
foregoing approvals of such holders of the Capital Securities, prior to taking
any of the foregoing actions, the Issuer Trustees shall obtain an opinion of
counsel experienced in such matters to the effect that the Trust will not be
classified as an association taxable as a corporation for United States federal
income tax purposes on account of such action.
Any required approval of holders of Capital Securities may be given at a
meeting of such holders convened for such purpose or pursuant to written
consent. The Property Trustee will cause a notice of any meeting at which
holders of 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 the
Declaration.
No vote or consent of the holders of Capital Securities will be required
for the Trust to redeem and cancel the Capital Securities in accordance with the
Declaration.
Notwithstanding that holders of the Capital Securities are entitled to vote
or consent under any of the circumstances described above, any of the Capital
Securities that are owned by the Corporation, 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.
Form, Denomination, Book-Entry Procedures and Transfer. The New Capital
Securities may be represented by one or more Capital Securities in registered,
global form (collectively, the "Global New Capital Securities" and, together
with the Old Capital Securities in registered, global form, the "Global Capital
Securities"). The Global New Capital Securities will be deposited upon issuance
with the Property Trustee as custodian for DTC, in New York, New York, and
registered in the name of DTC or its nominee, in each case for credit to an
account of a direct or indirect participant in DTC as described below.
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<PAGE> 48
Except as set forth below, the Global Capital Securities may be
transferred, in whole and not in part, only to another nominee of DTC or to a
successor of DTC or its nominee. Beneficial interests in the Global Capital
Securities may not be exchanged for Capital Securities in certificated form
except in the limited circumstances described below.
DTC has advised the Trust and the Corporation that DTC is a limited-purpose
trust company created to hold securities for its participating organizations
(collectively, the "Participants") and to facilitate the clearance and
settlement of transactions in those securities between Participants through
electronic book-entry changes in accounts of its Participants. The Participants
include securities brokers and dealers (including the Initial Purchaser), banks,
trust companies, clearing corporations and certain other organizations. Access
to DTC's system is also available to other entities such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly (collectively,
the "Indirect Participants"). Persons who are not Participants may beneficially
own securities held by or on behalf of DTC only through the Participants or the
Indirect Participants. The ownership interest and transfer of ownership interest
of each actual purchaser of each security held by or on behalf of DTC are
recorded on the records of the Participants and Indirect Participants.
DTC has also advised the Trust and the Corporation that, pursuant to
procedures established by it, (i) upon deposit of the Global Capital Securities,
DTC will credit the accounts of Participants with portions of the Liquidation
Amount of the Global Capital Securities and (ii) ownership of such interests in
the Global Capital Securities will be shown on, and the transfer of ownership
thereof will be effected only through, records maintained by DTC (with respect
to the Participants) or by the Participants and the Indirect Participants (with
respect to other owners of beneficial interests in the Global Capital
Securities).
Except as described below, owners of beneficial interests in the Global
Capital Securities will not have Capital Securities registered in their name,
will not receive physical delivery of Capital Securities in certificated form
and will not be considered the registered owners or holders thereof under the
Declaration for any purpose.
Payments in respect of the Global Capital Security registered in the name
of DTC or its nominee will be payable by the Property Trustee to DTC in its
capacity as the registered holder under the Declaration. Under the terms of the
Declaration, the Property Trustee will treat the persons in whose names the
Capital Securities, including the Global Capital Securities, are registered as
the owners thereof for the purpose of receiving such payments and for any and
all other purposes whatsoever. Consequently, neither the Property Trustee nor
any agent thereof has or will have any responsibility or liability for (i) any
aspect of DTC's records or any Participant's or Indirect Participant's records
relating to or payments made on account of beneficial ownership interests in the
Global Capital Securities, or for maintaining, supervising or reviewing any of
DTC's records or any Participant's or Indirect Participant's records relating to
the beneficial ownership interests in the Global Capital Securities or (ii) any
other matter relating to the actions and practices of DTC or any of its
Participants or Indirect Participants. DTC has advised the Trust and the
Corporation that its current practice, upon receipt of any payment in respect of
securities such as the Global Capital Securities, is to credit the accounts of
the relevant Participants with the payment on the payment date, in amounts
proportionate to their respective holdings in Liquidation Amount of beneficial
interests in the relevant security as shown on the records of DTC unless DTC has
reason to believe it will not receive payment on such payment date. Payments by
the Participants and the Indirect Participants to the beneficial owners of the
Global Capital Securities will be governed by standing instructions and
customary practices and will be the responsibility of the Participants or the
Indirect Participants and will not be the responsibility of DTC, the Property
Trustee, the Trust or the Corporation. Neither the Trust or the Corporation nor
the Property Trustee will be liable for any delay by DTC or any of its
Participants in identifying the beneficial owners of the Global Capital
Securities, and the Trust or the Corporation and the Property Trustee may
conclusively rely on and will be protected in relying on instructions from DTC
or its nominee for all purposes.
Secondary market trading activity in interests in the Global Capital
Securities will settle in immediately available funds, subject in all cases to
the rules and procedures of DTC and its Participants. Transfers between
Participants in DTC will be effected in accordance with DTC's procedures, and
will settle in same-day funds.
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<PAGE> 49
DTC has advised the Trust and the Corporation that it will take any action
permitted to be taken by a holder of Capital Securities only at the direction of
one or more Participants to whose account with DTC interests in the Global
Capital Securities are credited and only in respect of such portion of the
Liquidation Amount of the Capital Securities as to which such Participant or
Participants has or have given such direction. However, if there is an Event of
Default under the Declaration, DTC reserves the right to exchange the Global
Capital Securities for Capital Securities in certificated form and to distribute
such Capital Securities to its Participants.
The information in this section concerning DTC and its book-entry system
has been obtained from sources that the Trust and the Corporation believe to be
reliable, but neither the Trust nor the Corporation takes responsibility for the
accuracy thereof.
A Global New Capital Security is exchangeable for New Capital Securities in
registered certificated form if (i) DTC (x) notifies the Trust that it is
unwilling or unable to continue as Depositary for the Global New Capital
Security and the Trust thereupon fails to appoint a successor Depositary within
90 days or (y) has ceased to be a clearing agency registered under the Exchange
Act, (ii) the Corporation in its sole discretion elects to cause the issuance of
the New Capital Securities in certificated form or (iii) there shall have
occurred and be continuing an Event of Default or any event which after notice
or lapse of time or both would be an Event of Default under the Declaration. In
addition, beneficial interests in a Global New Capital Security may be exchanged
for certificated New Capital Securities upon request but only upon at least 20
days' prior written notice given to the Property Trustee by or on behalf of DTC
in accordance with customary procedures. In all cases, certificated New Capital
Securities delivered in exchange for any Global New Capital Security or
beneficial interests therein will be registered in the names, and issued in any
approved denominations, requested by or on behalf of the Depositary (in
accordance with its customary procedures), unless the Property Trustee
determines otherwise in compliance with applicable law.
Payment and Paying Agency. Payments in respect of the New Capital
Securities held in global form shall be made to the Depositary, which shall
credit the relevant accounts at the Depositary on the applicable Distribution
Dates or in respect of the New Capital Securities that are not held by the
Depositary, such payments shall be made by check mailed to the address of the
holder entitled thereto as such address shall appear on the register. The paying
agent (the "Paying Agent") shall initially be the Property Trustee and any
co-paying agent chosen by the Property Trustee and acceptable to the
Administrative Trustees and the Corporation. The Paying Agent shall be permitted
to resign as Paying Agent upon 30 days' written notice to the Property Trustee
and the Corporation. In the event that the Property Trustee shall no longer be
the Paying Agent, the Administrative Trustees shall appoint a successor (which
shall be a bank or trust company acceptable to the Administrative Trustees and
the Corporation) to act as Paying Agent.
Registrar and Transfer Agent. The Property Trustee will act as registrar
and transfer agent for the New Capital Securities.
Registration of transfers of the New Capital Securities will be effected
without charge by or on behalf of the Trust, but upon payment of any tax or
other governmental charges that may be imposed in connection with any transfer
or exchange. The Trust will not be required to register or cause to be
registered the transfer of any New Capital Securities after they 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 the Declaration 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 Declaration at the request of any
holder of Trust Securities unless it is offered reasonable indemnity against the
costs, expenses and liabilities that might be incurred thereby. If no Event of
Default has occurred and is continuing and the Property Trustee is required to
decide between alternative causes of action, construe ambiguous provisions in
the Declaration or is unsure of the application of any provision of the
Declaration, and the matter is not one on which holders of the Capital
Securities or the Common Securities are entitled under the Declaration to vote,
then the Property Trustee shall take such action as is directed by the
Corporation and, if not so directed, shall
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<PAGE> 50
take such action as it deems advisable and in the best interests of the holders
of the Trust Securities and will have no liability except for its own bad faith,
negligence or willful misconduct.
The Corporation or its affiliates may maintain certain accounts and other
banking relationships with the Property Trustee and its affiliates in the
ordinary course of business.
Miscellaneous. The Administrative Trustees are authorized and directed to
conduct the affairs of and to operate the Trust in such a way that the Trust
will not be deemed to be an "investment company" required to be registered under
the Investment Company Act or classified as an association taxable as a
corporation for United States federal income tax purposes and so that the Junior
Subordinated Debentures will be treated as indebtedness of the Corporation for
United States federal income tax purposes. In this connection, the Corporation
and the Administrative Trustees are authorized to take any action, not
inconsistent with applicable law, the certificate of trust of the Trust or the
Declaration, that the Corporation and the Administrative Trustees determine in
their discretion to be necessary or desirable for such purposes, as long as such
action does not materially adversely affect the interests of the holders of the
Trust Securities.
Holders of the Trust Securities have no preemptive or similar rights.
The Trust may not borrow money, issue debt, execute mortgages or pledge any
of its assets.
DESCRIPTION OF NEW JUNIOR SUBORDINATED DEBENTURES
The Old Junior Subordinated Debentures were issued and the New Junior
Subordinated Debentures will be issued as a separate series under the Indenture.
The Indenture has been qualified under the Trust Indenture Act. This summary of
certain terms and provisions of the Junior Subordinated Debentures and the
Indenture does not purport to be complete and, where reference is made to
particular provisions of the Indenture, such provisions, including the
definitions of certain terms, some of which are not otherwise defined herein,
are qualified in their entirety by reference to all of the provisions of the
Indenture and those terms made a part of the Indenture by the Trust Indenture
Act.
General. Concurrently with the issuance of the Old Capital Securities, the
Trust invested the proceeds thereof, together with the consideration paid by the
Corporation for the Common Securities, in Old Junior Subordinated Debentures
issued by the Corporation.
The New Junior Subordinated Debentures will bear interest at the annual
rate of 9.35% of the principal amount thereof, payable semi-annually in arrears
on June 15 and December 15 of each year (each, an "Interest Payment Date"),
commencing June 15, 1997, to the person in whose name each New Junior
Subordinated Debenture is registered, subject to certain exceptions, at the
close of business on the 15th day of the month immediately preceding the month
in which the relevant payment date falls. It is anticipated that, until the
liquidation, if any, of the Trust, each New Junior Subordinated Debenture will
be held in the name of the Property Trustee in trust for the benefit of the
holders of the Trust Securities. The amount of interest payable for any period
will be computed on the basis of a 360-day year of twelve 30-day months and, for
any period of less than a full calendar month, the number of days elapsed in
such month. In the event that any date on which interest is payable on the New
Junior Subordinated Debentures is not a Business Day, then payment of the
interest payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay), except that if such next succeeding Business Day falls in the next
succeeding calendar year, then such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date such payment was originally payable. Accrued interest that is not
paid on the applicable Interest Payment Date will bear additional interest on
the amount thereof (to the extent permitted by law) at the rate per annum of
9.35% thereof, compounded semi-annually. The term "interest," as used herein,
shall include semi-annual interest payments, interest on semi-annual interest
payments not paid on the applicable Interest Payment Date and Additional Sums
(as defined herein), as applicable.
The New Junior Subordinated Debentures will be issued in denominations of
$1,000 and integral multiples thereof. The New Junior Subordinated Debentures
will mature on June 15, 2027 (the "Stated Maturity Date").
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<PAGE> 51
The New Junior Subordinated Debentures will rank pari passu with the Old
Junior Subordinated Debentures and with all Other Debentures and will be
unsecured and subordinate and rank junior in right of payment to all Senior
Indebtedness to the extent and in the manner set forth in the Indenture. See "--
Subordination." The Corporation is a holding company and almost all of the
operating assets of the Corporation and its consolidated subsidiaries are owned
by such subsidiaries. The Corporation relies primarily on dividends from such
subsidiaries to meet its obligations. The Corporation is a legal entity separate
and distinct from its subsidiaries. The principal sources of the Corporation's
income are dividends, interest and fees from its subsidiaries. The Banks are
subject to certain restrictions imposed by federal law on any extensions of
credit to, and certain other transactions with, the Corporation and certain
other affiliates, and on investments in stock or other securities thereof. Such
restrictions prevent the Corporation and such other affiliates from borrowing
from the Banks unless the loans are secured by various types of collateral.
Further, such secured loans, other transactions and investments by any of the
Banks are generally limited in amount as to the Corporation and as to each of
such other affiliates to 10% of such Bank's capital and surplus and as to the
Corporation and all of such other affiliates to an aggregate of 20% of such
Bank's capital and surplus. In addition, payment of dividends to the Corporation
by the Banks is subject to ongoing review by banking regulators and is subject
to various statutory limitations and in certain circumstances requires approval
by banking regulatory authorities. Because the Corporation is a holding company,
the right of the Corporation to participate in any distribution of assets of any
subsidiary upon such subsidiary's liquidation or reorganization or otherwise, is
subject to the prior claims of creditors of the subsidiary, except to the extent
the Corporation may itself be recognized as a creditor of that subsidiary.
Accordingly, the New Junior Subordinated Debentures will be effectively
subordinated to all existing and future liabilities of the Corporation's
subsidiaries, and holders of New Junior Subordinated Debentures should look only
to the assets of the Corporation for payments on the New Junior Subordinated
Debentures. The Indenture does not limit the incurrence or issuance of other
secured or unsecured debt of the Corporation, including Senior Indebtedness. See
"-- Subordination" below.
Form, Registration and Transfer. If the Junior Subordinated Debentures are
distributed to the holders of the Trust Securities, the New Junior Subordinated
Debentures may be represented by one or more global certificates registered in
the name of Cede & Co. as the nominee of DTC. The depositary arrangements for
such New Junior Subordinated Debentures are expected to be substantially similar
to those in effect for the New Capital Securities. For a description of DTC and
the terms of the depositary arrangements relating to payments, transfers, voting
rights, redemptions and other notices and other matters, see "-- Description of
New Capital Securities -- Form, Denomination, Book-Entry Procedures and
Transfer."
Payment and Paying Agents. Payment of principal of and premium, if any, and
interest on New Junior Subordinated Debentures will be made at the office of the
Debenture Trustee in The City of New York or at the office of such Paying Agent
or Paying Agents as the Corporation may designate from time to time, except that
at the option of the Corporation payment of any interest may be made, except in
the case of New Junior Subordinated Debentures in global form, (i) by check
mailed to the address of the Person entitled thereto as such address shall
appear in the register for New Junior Subordinated Debentures or (ii) by
transfer to an account maintained by the Person entitled thereto as specified in
such register, provided that proper transfer instructions have been received by
the relevant Record Date. Payment of any interest on any New Junior Subordinated
Debenture will be made to the Person in whose name such New Junior Subordinated
Debenture is registered at the close of business on the Record Date for such
interest, except in the case of defaulted interest. The Corporation may at any
time designate additional Paying Agents or rescind the designation of any Paying
Agent; however, the Corporation will at all times be required to maintain a
Paying Agent in each place of payment for the New Junior Subordinated
Debentures.
Any moneys deposited with the Debenture Trustee or any Paying Agent, or
then held by the Corporation in trust, for the payment of the principal of and
premium, if any, or interest on any New Junior Subordinated Debenture and
remaining unclaimed for two years after such principal and premium, if any, or
interest has become due and payable shall, at the request of the Corporation, be
repaid to the Corporation and the holder of such New Junior Subordinated
Debenture shall thereafter look, as a general unsecured creditor, only to the
Corporation for payment thereof.
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<PAGE> 52
Option to Extend Interest Payment Date. So long as no Debenture Event of
Default has occurred and is continuing, the Corporation will have the right
under the Indenture at any time during the term of the Junior Subordinated
Debentures to defer the payment of interest at any time or from time to time for
a period not exceeding 10 consecutive semiannual periods with respect to each
Extension Period, provided that no Extension Period shall end on a date other
than an Interest Payment Date or extend beyond the Stated Maturity Date. At the
end of an Extension Period, the Corporation must pay all interest then accrued
and unpaid (together with interest thereon accrued at the annual rate of 9.35%,
compounded semiannually, to the extent permitted by applicable law ("Compounded
Interest")). During an Extension Period, interest will continue to accrue and,
if the Junior Subordinated Debentures have been distributed to holders of the
Trust Securities, holders of Junior Subordinated Debentures (or holders of the
Trust Securities while Trust Securities are outstanding) will be required to
accrue such deferred interest income for United States federal income tax
purposes prior to the receipt of cash attributable to such income. See "Certain
Federal Income Tax Considerations -- Interest Income and Original Issue
Discount."
During any such Extension Period, the Corporation may not (i) declare or
pay any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Corporation's capital stock
(other than (a) dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, common stock of the Corporation,
(b) any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
as a result of a reclassification of the Corporation's capital stock or the
exchange or conversion of one class or series of the Corporation's capital stock
for another class or series of the Corporation's capital stock, (d) 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, (e) purchases of common stock related to the
issuance of common stock or rights under any of the Corporation's benefit plans
for its directors, officers or employees or any of the Corporation's dividend
reinvestment plans and (f) purchases of Common Stock in connection with the
satisfaction by the Guarantor of its obligations pursuant to any contract or
security requiring the Guarantor to purchase shares of Common Stock), or (ii)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Corporation (including any Other
Debentures) that rank pari passu with or junior in right of payment to the
Junior Subordinated Debentures or (iii) make any guarantee payments (other than
payments under the Guarantee) with respect to any guarantee by the Corporation
of the debt securities of any subsidiary of the Corporation (including any Other
Guarantees) if such guarantee ranks pari passu with or junior in right of
payment to the Junior Subordinated Debentures.
Prior to the termination of any such Extension Period, the Corporation may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semiannual periods, end on
a date other than an Interest Payment Date or extend beyond the Stated Maturity
Date. Upon the termination of any such Extension Period and the payment of all
amounts then due on any Interest Payment Date, the Corporation may elect to
begin a new Extension Period, subject to the above requirements. No interest
shall be due and payable during an Extension Period, except at the end thereof.
The Corporation must give the Property Trustee, the Administrative Trustees and
the Debenture Trustee notice of its election of any Extension Period (or an
extension thereof) at least five Business Days prior to the earlier of (i) the
date the Distributions on the Trust Securities would have been payable except
for the election to begin or extend such Extension Period or (ii) the date the
Administrative Trustees are required to give notice to any securities exchange
or to holders of Capital Securities of the record date or the date such
Distributions are payable, but in any event not less than five Business Days
prior to such record date. The Debenture Trustee shall give notice of the
Corporation's election to begin or extend a new Extension Period to the holders
of the Capital Securities. There is no limitation on the number of times that
the Corporation may elect to begin an Extension Period.
Optional Prepayment. The Junior Subordinated Debentures will be prepayable,
in whole or in part, at the option of the Corporation, on or after March 1, 2007
(the "Initial Optional Prepayment Date"), subject to the Corporation having
received prior approval of the Federal Reserve, if then required under
applicable capital
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<PAGE> 53
guidelines or policies of the Federal Reserve, at a prepayment price (the
"Optional Prepayment Price") equal to the percentage of the outstanding
principal amount of the Junior Subordinated Debentures specified below, plus, in
each case, accrued and unpaid interest thereon to the date of prepayment if
redeemed during the 12-month period beginning March 1 of the years indicated
below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2007...................................................... 104.6750
2008...................................................... 104.2075
2009...................................................... 103.7400
2010...................................................... 103.2725
2011...................................................... 102.8050
2012...................................................... 102.3375
2013...................................................... 101.8700
2014...................................................... 101.4025
2015...................................................... 100.9350
2016...................................................... 100.4675
2017 and thereafter....................................... 100.0000
</TABLE>
Special Event Prepayment. If a Special Event shall occur and be continuing,
the Corporation may, at any time prior to the Initial Optional Prepayment Date,
at its option and subject to receipt of prior approval of the Federal Reserve if
then required under applicable capital guidelines or policies of the Federal
Reserve, prepay the Junior Subordinated Debentures in whole (but not in part) at
any time within 90 days of the occurrence of such Special Event, at a prepayment
price (the "Special Event Prepayment Price") equal to the greater of (i) 100% of
the principal amount of such Junior Subordinated Debentures or (ii) the sum, as
determined by a Quotation Agent, of the present values of the principal amount
and premium payable as part of the Optional Prepayment Price with respect to an
optional redemption of such Junior Subordinated Debentures on the Initial
Optional Prepayment Date, together with scheduled payments of interest from the
prepayment date to the Initial Optional Prepayment Date, in each case discounted
to the prepayment date on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus, in
either case, accrued and unpaid interest thereon to the date of prepayment.
A "Special Event" means a Tax Event or a Regulatory Capital Event (as
defined below), as the case may be.
A "Tax Event" means the receipt by the Corporation and the Trust of an
opinion of a nationally recognized tax counsel experienced in such matters to
the effect that, as a result of any amendment to, or change (including any
announced prospective change) in, the laws or any regulations thereunder of the
United States or any political subdivision or taxing authority thereof or
therein, or as a result of any official administrative pronouncement or judicial
decision interpreting or applying such laws or regulations, which amendment or
change is effective or such pronouncement or decision is announced on or after
March 25, 1997, there is more than an insubstantial risk that (i) the Trust is,
or will be within 90 days of the date of such opinion, subject to United States
federal income tax with respect to income received or accrued on the Junior
Subordinated Debentures, (ii) interest payable by the Corporation on the Junior
Subordinated Debentures is not, or within 90 days of the date of such opinion
will not be, deductible by the Corporation, in whole or in part, for United
States federal income tax purposes, or (iii) the Trust is, or will be within 90
days of the date of such opinion, subject to more than a de minimis amount of
other taxes, duties or other governmental charges.
A "Regulatory Capital Event" means that the Corporation shall have received
an opinion of independent bank regulatory counsel experienced in such matters to
the effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any rules, guidelines or policies of the Federal Reserve or
(b) any official administrative pronouncement or judicial decision interpreting
or applying such laws or regulations, which amendment or change is effective or
such pronouncement or decision is announced on or after March 25, 1997, the
Capital Securities do not constitute, or within 90 days of the date of such
opinion, will not constitute, Tier 1 Capital (or its then equivalent); provided,
however, that a Regulatory Capital Event shall not occur by reason of the
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use of the proceeds of the Junior Subordinated Debentures by the Corporation
contemplated herein, and the distribution of the Junior Subordinated Debentures
in connection with the liquidation of the Trust by the Corporation shall not in
and of itself constitute a Regulatory Capital Event unless such liquidation
shall have occurred in connection with a Tax Event.
"Adjusted Treasury Rate" means, with respect to any prepayment date, the
rate per annum equal to (i) the yield, under the heading which represents the
average for the immediately prior week, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication which is
published weekly by the Federal Reserve and which established yields on actively
traded United States Treasury securities adjusted to constant maturity under the
caption "Treasury Constant Maturities," for the maturity date corresponding to
the Initial Optional Prepayment Date (if no maturity date is within three months
before or after the Initial Optional Prepayment Date, yields for the two
published maturities most closely corresponding to the Initial Optional
Prepayment Date shall be interpolated and the Adjusted Treasury Rate shall be
interpolated or extrapolated from such yields on a straight-line basis, rounding
to the nearest month) or (ii) if such release (or any successor release) is not
published during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such prepayment date plus, in either case (A)
1.35% if such prepayment date occurs on or prior to March 1, 1998 and (B) .50%
in all other cases.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity date corresponding to the
Initial Optional Prepayment Date that would be utilized at the time of selection
and in accordance with customary financial practice, in pricing new issues of
corporate debt securities with a maturity date corresponding to the Initial
Optional Prepayment Date. If no United States Treasury security has a maturity
date which is within three months before or after the Initial Optional
Prepayment Date, the two most closely corresponding United States Treasury
securities shall be used as the Comparable Treasury Issue, and the calculation
of the Adjusted Treasury Rate pursuant to clause (ii) of the definition thereof
shall be interpolated or extrapolated on a straight-line basis, rounding to the
nearest month.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Corporation. "Reference Treasury Dealer" means a nationally recognized U.S.
Government securities dealer in New York City selected by the Corporation.
"Comparable Treasury Price" means, with respect to any prepayment date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such prepayment date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the average
of five Reference Treasury Dealer Quotations for such prepayment date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Debenture Trustee obtains fewer than three such Reference Treasury
Dealer Quotations, the average of all such Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any prepayment date, the average, as determined by
the Debenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Debenture Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such prepayment date.
"Additional Sums" means such additional amounts as may be necessary in
order that the amount of Distributions then due and payable by the Trust on the
outstanding Capital Securities and Common Securities shall not be reduced as a
result of any additional taxes, duties or other governmental charges to which
the Trust has become subject as a result of a Tax Event.
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Notice of any prepayment will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Junior Subordinated
Debentures to be prepaid at its registered address. Unless the Corporation
defaults in payment of the prepayment price, on and after the prepayment date
interest ceases to accrue on such Junior Subordinated Debentures called for
prepayment.
If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Corporation will pay as
additional amounts on the Junior Subordinated Debentures the Additional Sums.
Certain Covenants of the Corporation. The Corporation will also covenant
that it will not (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Corporation's capital stock (other than (a) dividends or distributions in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, common stock of the Corporation, (b) any declaration of a dividend in
connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) as a result of a
reclassification of the Corporation's capital stock or the exchange or
conversion of one class or series of the Corporation's capital stock for another
class or series of the Corporation's capital stock, (d) 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, (e) purchases of common stock related to the
issuance of common stock or rights under any of the Corporation's benefit plans
for its directors, officers or employees or any of the Corporation's dividend
reinvestment plans and (f) purchases of Common Stock in connection with the
satisfaction by the Guarantor of its obligations pursuant to any contract or
security requiring the Guarantor to purchase shares of Common Stock), (ii) make
any payment of principal, interest or premium, if any, on or repay or repurchase
or redeem any debt securities of the Corporation (including Other Debentures)
that rank pari passu with or junior in right of payment to the Junior
Subordinated Debentures or (iii) make any guarantee payments (other than
payments under the Guarantee) with respect to any guarantee by the Corporation
of the debt securities of any subsidiary of the Corporation (including under
Other Guarantees) if such guarantee ranks pari passu or junior in right of
payment to the Junior Subordinated Debentures if at such time (1) an Event of
Default shall have occurred and be continuing, (2) there shall have occurred any
event of which the Corporation has actual knowledge that (x) is, or with the
giving of notice or the lapse of time, or both, would be, a Debenture Event of
Default and (y) in respect of which the Corporation shall not have taken
reasonable steps to cure, (3) if such Junior Subordinated Debentures are held by
the Trust, the Corporation shall be in default with respect to its payment of
any obligations under the Guarantee or (4) the Corporation shall have given
notice of its election of an Extension Period as provided in the Indenture and
shall not have rescinded such notice, and such Extension Period, or any
extension thereof, shall have commenced and be continuing.
The Corporation will also covenant, for so long as the Trust Securities
remain outstanding, (i) to maintain 100 percent ownership of the Common
Securities; provided, however, that any permitted successor of the Corporation
under the Indenture may succeed to the Corporation's ownership of the Common
Securities, (ii) to use its reasonable efforts to cause the Trust (a) to remain
a statutory business trust, except in connection with the distribution of Junior
Subordinated Debentures to the holders of Trust Securities in liquidation of the
Trust, the redemption of all of the Trust Securities of the Trust, or certain
mergers, consolidations or amalgamations, each as permitted by the Declaration,
and (b) to continue not to be classified as an association taxable as a
corporation or a partnership for United States federal income tax purposes and
(iii) to use its reasonable efforts to cause each holder of Trust Securities to
be treated as owning an undivided beneficial interest in the Junior Subordinated
Debentures.
Debenture Events of Default. The Indenture provides that any one or more of
the following described events with respect to the Junior Subordinated
Debentures constitutes a "Debenture Event of Default" (whatever the reason for
such Debenture Event of Default and whether it shall be voluntary or involuntary
or
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be effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or governmental
body):
(i) failure for 30 days to pay any interest on the Junior Subordinated
Debentures or any Other Debentures, when due (subject to the deferral of
any due date in the case of an Extension Period); or
(ii) failure to pay any principal or premium, if any, on the Junior
Subordinated Debentures or any Other Debentures when due whether at
maturity, upon redemption, by declaration of acceleration of maturity or
otherwise; or
(iii) failure to observe or perform in any material respect certain
other covenants contained in the Indenture for 90 days after written notice
to the Corporation from the Debenture Trustee or the holders of at least
25% in aggregate outstanding principal amount of Junior Subordinated
Debentures; or
(iv) certain events in bankruptcy, insolvency or reorganization of the
Corporation.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debentures have, subject to certain exceptions, the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Debenture Trustee. The Debenture Trustee or the holders of not
less than 25% in aggregate outstanding principal amount of the Junior
Subordinated Debentures may declare the principal due and payable immediately
upon a Debenture Event of Default. The holders of a majority in aggregate
outstanding principal amount of the Junior Subordinated Debentures may annul
such declaration and waive the default if the default (other than the nonpayment
of the principal of the Junior Subordinated Debentures which has become due
solely by such acceleration) has been cured and a sum sufficient to pay all
matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debentures affected thereby may, on behalf of the holders of
all the Junior Subordinated Debentures, waive any past default except a default
in the payment of principal of, or premium, if any, on or interest (unless such
default has been cured and a sum sufficient to pay all matured installments of
interest and premium, if any, and principal due otherwise than by acceleration
has been deposited with the Debenture Trustee) or a default in respect of a
covenant or provision which under the Indenture cannot be modified or amended
without the consent of the holder of each outstanding Junior Subordinated
Debenture.
The Indenture requires the annual filing by the Corporation with the
Debenture Trustee of a certificate as to the absence of certain defaults under
the Indenture.
The Indenture provides that the Debenture Trustee may withhold notice of a
Debenture Event of Default from the holders of the Junior Subordinated
Debentures (except a Debenture Event of Default in payment of principal of, or
of interest or premium on, the Junior Subordinated Debentures) if the Debenture
Trustee considers it in the interest of such holders to do so.
Enforcement of Certain Rights by Holders of New Capital Securities. If a
Debenture Event of Default shall have occurred and be continuing and shall be
attributable to the failure of the Corporation to pay interest or premium, if
any, on or principal of the New Junior Subordinated Debentures on the due date,
a holder of New Capital Securities may institute a Direct Action. The
Corporation may not amend the Indenture to remove the foregoing right to bring a
Direct Action without the prior written consent of the holders of all of the
Capital Securities. Notwithstanding any payments made to a holder of New Capital
Securities by the Corporation in connection with a Direct Action, the
Corporation shall remain obligated to pay the principal of or premium, if any,
or interest on the New Junior Subordinated Debentures, and the Corporation shall
be subrogated to the rights of the holder of such New Capital Securities with
respect to payments on the New Capital Securities to the extent of any payments
made by the Corporation to such holder in any Direct Action.
The holders of the New Capital Securities will not be able to exercise
directly any remedies, other than those set forth in the preceding paragraph,
available to the holders of the New Junior Subordinated Debentures. See "--
Description of New Capital Securities -- Events of Default; Notice."
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Consolidation, Merger, Sale of Assets and Other Transactions. The Indenture
provides that the Corporation shall not consolidate with or merge into any other
Person or convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to any Person, and no Person shall consolidate with
or merge into the Corporation or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to the Corporation,
unless: (i) in case the Corporation consolidates with or merges into another
Person or conveys or transfers its properties and assets substantially as an
entirety to any Person, the successor Person is organized under the laws of the
United States or any State or the District of Columbia, and such successor
Person expressly assumes the Corporation's obligations on the Junior
Subordinated Debentures; (ii) immediately after giving effect thereto, no
Debenture Event of Default, and no event which, after notice or lapse of time or
both, would become a Debenture Event of Default, shall have occurred and be
continuing; and (iii) certain other conditions as prescribed in the Indenture
are met.
The general provisions of the Indenture do not afford holders of the Junior
Subordinated Debentures protection in the event of a highly leveraged or other
transaction involving the Corporation that may adversely affect holders of the
Junior Subordinated Debentures.
Modification of the Indenture. From time to time the Corporation and the
Debenture Trustee may, without the consent of the holders of Junior Subordinated
Debentures, amend, waive or supplement 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 interest
of the holders of Junior Subordinated Debentures). The Indenture contains
provisions permitting the Corporation and the Debenture Trustee, with the
consent of the holders of a majority in principal amount of the Junior
Subordinated Debentures, to modify the Indenture in a manner affecting the
rights of the holders of Junior Subordinated Debentures; provided that no such
modification may, without the consent of the holders of each outstanding Junior
Subordinated Debenture so affected, (i) change the Stated Maturity Date, or
reduce the principal amount of the Junior Subordinated Debentures or reduce the
rate or extend the time of payment of interest thereon or (ii) reduce the
percentage of principal amount of Junior Subordinated Debentures the holders of
which are required to consent to any such modification of the Indenture.
Satisfaction and Discharge. The Indenture provides that when, among other
things, all Junior Subordinated Debentures not previously delivered to the
Debenture Trustee for cancellation (i) have become due and payable or (ii) will
become due and payable at maturity within one year, and the Corporation deposits
or causes to be deposited with the Debenture Trustee funds, in trust, for the
purpose and in an amount sufficient to pay and discharge the entire indebtedness
on the Junior Subordinated Debentures not previously delivered to the Debenture
Trustee for cancellation, for the principal and premium, if any, and interest to
the date of the deposit or to the Stated Maturity Date, as the case may be, then
the Indenture will cease to be of further effect (except as to the Corporation's
obligations to pay all other sums due pursuant to the Indenture and to provide
the officers' certificates and opinions of counsel described therein), and the
Corporation will be deemed to have satisfied and discharged the Indenture.
Subordination. In the Indenture, the Corporation has covenanted and agreed
that any Junior Subordinated Debentures issued thereunder will be subordinate
and junior in right of payment to all Senior Indebtedness to the extent provided
in the Indenture. Upon any payment or distribution of assets to creditors upon
any liquidation, dissolution, winding up, reorganization, assignment for the
benefit of creditors, marshalling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Corporation, all Senior Indebtedness must be paid
in full before the holders of Junior Subordinated Debentures will be entitled to
receive or retain any payment in respect thereof.
In the event of the acceleration of the maturity of Junior Subordinated
Debentures, the holders of all Senior Indebtedness outstanding at the time of
such acceleration will first be entitled to receive payment in full of such
Senior Indebtedness before the holders of Junior Subordinated Debentures will be
entitled to receive or retain any payment in respect of the Junior Subordinated
Debentures.
No payments on account of principal or premium, if any, or interest, if
any, in respect of the Junior Subordinated Debentures may be made if there shall
have occurred and be continuing a default in any
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payment with respect to Senior Indebtedness, or an event of default with respect
to any Senior Indebtedness resulting in the acceleration of the maturity
thereof, or if any judicial proceeding shall be pending with respect to any such
default.
"Senior Indebtedness" shall mean all Indebtedness for Money Borrowed,
whether outstanding on the date of execution of the Indenture or thereafter
created, assumed or incurred, except Indebtedness Ranking on a Parity with the
Junior Subordinated Debentures or Indebtedness Ranking Junior to the Junior
Subordinated Debentures, and any deferrals, renewals or extensions of such
Senior Indebtedness.
"Indebtedness for Money Borrowed" shall mean (i) any obligation of, or any
obligation guaranteed by, the Corporation for the repayment of borrowed money,
whether or not evidenced by bonds, debentures, notes or other written
instruments and any deferred obligation for the payment of the purchase price of
property or assets acquired other than in the ordinary course of business and
(ii) all indebtedness of the Corporation for claims in respect of derivative
products such as interest and foreign exchange rate contracts, commodity
contracts and similar arrangements, whether outstanding on the date of execution
of the Indenture or thereafter created, assumed or incurred. For purposes of
this definition "claim" shall have the meaning assigned in Section 101(5) of the
Bankruptcy Code of 1978, as amended and in effect on the date of the execution
of the Indenture.
"Indebtedness Ranking on Parity with the Junior Subordinated Debentures"
shall mean (i) Indebtedness for Money Borrowed, whether outstanding on the date
of execution of the Indenture or thereafter created, assumed or incurred, to the
extent such indebtedness specifically by its terms ranks equally with and not
prior to the Junior Subordinated Debentures in the right of payment upon the
happening of the dissolution or winding-up or liquidation or reorganization of
the Corporation and (ii) all other debt securities, and guarantees in respect of
those debt securities, issued to any other trust, or a trustee of such trust,
partnership or other entity affiliated with the Corporation that is a financing
vehicle of the Corporation (a "financing entity") in connection with the
issuance by such financing entity of equity securities or other securities
guaranteed by the Corporation pursuant to an instrument that ranks pari passu
with or junior in right of payment to the Guarantee.
"Indebtedness Ranking Junior to the Junior Subordinated Debentures" shall
mean any Indebtedness for Money Borrowed, whether outstanding on the date of
execution of the Indenture or thereafter created, assumed or incurred, to the
extent such indebtedness specifically by its terms ranks junior to and not
equally with or prior to the Junior Subordinated Debentures (and any other
Indebtedness Ranking on a Parity with the Junior Subordinated Debentures) in
right of payment upon the happening of the dissolution or winding-up or
liquidation or reorganization of the Corporation. The securing of any
Indebtedness for Money Borrowed, otherwise constituting Indebtedness Ranking on
a Parity with the Junior Subordinated Debentures or Indebtedness Ranking Junior
to the Junior Subordinated Debentures, as the case may be, shall not be deemed
to prevent such Indebtedness for Money Borrowed from constituting Indebtedness
Ranking on a Parity with the Junior Subordinated Debentures or Indebtedness
Ranking Junior to the Junior Subordinated Debentures, as the case may be.
The Corporation is a non-operating holding company and almost all of the
operating assets of the Corporation are owned by the Corporation's subsidiaries.
The Corporation relies primarily on dividends from such subsidiaries to meet its
obligations for payment of principal and interest on its outstanding debt
obligations and corporate expenses. The Corporation is a legal entity separate
and distinct from its banking and non-banking affiliates. The principal sources
of the Corporation's income are dividends, interest and fees from its banking
and non-banking affiliates. The Banks are subject to certain restrictions
imposed by federal law on any extensions of credit to, and certain other
transactions with, the Corporation and certain other affiliates, and on
investments in stock or other securities thereof. Such restrictions prevent the
Corporation and such other affiliates from borrowing from the Banks unless the
loans are secured by various types of collateral. Further, such secured loans,
other transactions and investments by any of the Banks are generally limited in
amount as to the Corporation and as to each of such other affiliates to 10% of
such Bank's capital and surplus and as to the Corporation and all of such other
affiliates to an aggregate of 20% of such Bank's capital and surplus. In
addition, payment of dividends to the Corporation by the subsidiary banks is
subject to ongoing
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review by banking regulators and is subject to various statutory limitations and
in certain circumstances requires approval by banking regulatory authorities.
Accordingly, the New Junior Subordinated Debentures will be effectively
subordinated to all existing and future liabilities of the Corporation's
subsidiaries. Holders of New Junior Subordinated Debentures should look only to
the assets of the Corporation for payments of interest and principal and
premium, if any.
The Indenture places no limitation on the amount of additional Senior
Indebtedness that may be incurred by the Corporation. The Corporation expects
from time to time to incur additional indebtedness constituting Senior
Indebtedness.
GOVERNING LAW
The Indenture and the New Junior Subordinated Debentures will be governed
by and construed in accordance with the laws of the State of New York.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
Following the Exchange Offer and the qualification of the Indenture under
the Trust Indenture Act, the Debenture Trustee shall have and be subject to all
the duties and responsibilities specified with respect to an indenture trustee
under the Trust Indenture Act. Subject to such provisions, the Debenture Trustee
is under no obligation to exercise any of the powers vested in it by the
Indenture at the request of any holder of Junior Subordinated Debentures, unless
offered reasonable indemnity by such holder against the costs, expenses and
liabilities which might be incurred thereby. The Debenture Trustee is not
required to expend or risk its own funds or otherwise incur personal financial
liability in the performance of its duties if the Debenture Trustee reasonably
believes that repayment or adequate indemnity is not reasonably assured to it.
The Corporation or its affiliates may maintain certain accounts and other
banking relationships with the Debenture Trustee and its affiliates in the
ordinary course of business.
DESCRIPTION OF NEW GUARANTEE
The Old Guarantee was executed and delivered by the Corporation
concurrently with the issuance by the Trust of the Old Capital Securities for
the benefit of the holders from time to time of the Old Capital Securities.
Promptly after the Expiration Date, the New Guarantee will be issued by the
Corporation for the benefit of the holders from time to time of the New Capital
Securities. The New Guarantee has been qualified under the Trust Indenture Act.
This summary of certain provisions of the New Guarantee does not purport to be
complete and is subject to, and qualified in its entirety by reference to, all
of the provisions of the New Guarantee, including the definitions therein of
certain terms, and the Trust Indenture Act. The Guarantee Trustee will hold the
New Guarantee for the benefit of the holders of the New Capital Securities.
General. The Corporation will irrevocably agree to pay in full on a
subordinated basis, to the extent set forth herein, the Guarantee Payments (as
defined below) to the holders of the New Capital Securities, as and when due,
regardless of any defense, right of set-off or counterclaim that the Trust may
have or assert other than the defense of payment. The following payments with
respect to the New Capital Securities, to the extent not paid by or on behalf of
the Trust (the "Guarantee Payments"), will be subject to the New Guarantee: (i)
any accumulated and unpaid Distributions required to be paid on New Capital
Securities, to the extent the Trust has funds on hand legally available
therefor, (ii) the applicable Redemption Price with respect to any New Capital
Securities called for redemption, to the extent that the Trust has funds on hand
legally available therefor, or (iii) upon a voluntary or involuntary termination
and liquidation of the Trust (unless the New Junior Subordinated Debentures are
distributed to holders of the New Capital Securities), the lesser of (a) the
Liquidation Distribution and (b) the amount of assets of the Trust remaining
available for distribution to holders of New Capital Securities. The
Corporation's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Corporation to the holders of the New
Capital Securities or by causing the Trust to pay such amounts to such holders.
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The New Guarantee will rank subordinate and junior in right of payment to
all Senior Indebtedness to the extent provided therein. See "-- Status." Because
the Corporation is a holding company, the right of the Corporation to
participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise is subject to the prior
claims of creditors of that subsidiary, except to the extent the Corporation may
itself be recognized as a creditor of that subsidiary. Accordingly, the
Corporation's obligations under the New Guarantee will be effectively
subordinated to all existing and future liabilities of the Corporation's
subsidiaries, and claimants should look only to the assets of the Corporation
for payments thereunder. See "-- Description of New Junior Subordinated
Debentures -- General." The New Guarantee does not limit the incurrence or
issuance of other secured or unsecured debt of the Corporation, including Senior
Indebtedness, whether under the Indenture, any other indenture that the
Corporation may enter into in the future or otherwise.
The Corporation will, through the New Guarantee, the Declaration, the New
Junior Subordinated Debentures and the Indenture, taken together, fully,
irrevocably and unconditionally guarantee all of the Trust's obligations under
the New Capital Securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the New Capital Securities. See "Relationship Among
the New Capital Securities, the New Junior Subordinated Debentures and the New
Guarantee."
Status. The New Guarantee will constitute an unsecured obligation of the
Corporation and will rank subordinate and junior in right of payment to all
Senior indebtedness in the same manner as the New Junior Subordinated
Debentures.
The New Guarantee will rank pari passu with the Junior Subordinated
Debentures and with the Old Guarantee and with all Other Guarantees (if any)
issued by the Corporation with respect to capital securities (if any) issued by
Other Trusts. The New Guarantee will constitute a guarantee of payment and not
of collection (i.e., the guaranteed party may institute a legal proceeding
directly against the Corporation to enforce its rights under the New Guarantee
without first instituting a legal proceeding against any other person or
entity). The New Guarantee will be held for the benefit of the holders of the
New Capital Securities. The New Guarantee will not be discharged except by
payment of the Guarantee Payments in full to the extent not paid by the Trust or
upon distribution to the holders of the New Capital Securities of the New Junior
Subordinated Debentures. The New Guarantee does not place a limitation on the
amount of additional Senior Indebtedness that may be incurred by the
Corporation. The Corporation expects from time to time to incur additional
indebtedness constituting Senior Indebtedness.
Events of Default. An event of default under the New Guarantee will occur
upon the failure of the Corporation to perform any of its payment or other
obligations thereunder. The holders of a majority in Liquidation Amount of the
New Capital Securities will have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Guarantee Trustee
in respect of the New Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the New Guarantee.
Any holder of the New Capital Securities may institute a legal proceeding
directly against the Corporation to enforce its rights under the New Guarantee
without first instituting a legal proceeding against the Trust, the Guarantee
Trustee or any other person or entity.
The Corporation, as guarantor, will be required to file annually with the
Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the New
Guarantee.
Amendments and Assignment. Except with respect to any changes that do not
materially adversely affect the rights of holders of the New Capital Securities
(in which case no vote will be required), the New Guarantee may not be amended
without the prior approval of the holders of a majority of the Liquidation
Amount of such outstanding New Capital Securities. The manner of obtaining any
such approval will be as set forth under "-- Description of New Capital
Securities -- Voting Rights; Amendment of the Declaration." All
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guarantees and agreements contained in the New Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of the Corporation
and shall inure to the benefit of the holders of the New Capital Securities then
outstanding.
Termination. The New Guarantee will terminate and be of no further force
and effect upon full payment of the applicable Redemption Price of the New
Capital Securities, upon full payment of the Liquidation Amount payable upon
liquidation of the Trust or upon distribution of the New Junior Subordinated
Debentures to the holders of the New Capital Securities. The New Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any holder of the New Capital Securities must restore payment of any sums
paid under the New Capital Securities or the New Guarantee.
Information Concerning the Guarantee Trustee, The Guarantee Trustee, other
than during the occurrence and continuance of a default by the Corporation in
performance of the New Guarantee, will undertake to perform only such duties as
are specifically set forth in the New Guarantee and, in case a default with
respect to the New Guarantee has occurred, 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 the New Guarantee at
the request of any holder of New Capital Securities, unless offered reasonable
indemnity against the costs, expenses and liabilities which might be incurred
thereby. The Guarantee Trustee is not required to expend or risk its own funds
or otherwise incur personal financial liability in the performance of its duties
if it reasonably believes that repayment or adequate indemnity is not reasonably
assured to it.
The Corporation or its affiliates may maintain certain accounts and other
banking relationships with the Guarantee Trustee and its affiliates in the
ordinary course of business.
Governing Law. The New Guarantee will be governed by, and construed in
accordance with, the internal laws of the State of New York.
DESCRIPTION OF OLD SECURITIES
The terms of the Old Securities are identical in all material respects to
the New Securities, except that (i) the Old Securities have not been registered
under the Securities Act, are subject to certain restrictions on transfer and
are entitled to certain rights under the applicable Registration Rights
Agreement (which rights will terminate upon consummation of the Exchange Offer,
except under limited circumstances), (ii) the New Capital Securities will not
contain the $100,000 minimum Liquidation Amount transfer restriction and certain
other restrictions on transfer applicable to Old Capital Securities, (iii) the
New Capital Securities will not provide for any increase in the Distribution
rate thereon, (iv) the New Junior Subordinated Debentures will not contain the
$100,000 minimum principal amount transfer restriction and (v) the New Junior
Subordinated Debentures will not provide for any increase in the interest rate
thereon. The Old Securities provide that, in the event that a registration
statement relating to the Exchange Offer has not been filed by August 22, 1997
and been declared effective by September 21, 1997, or, in certain limited
circumstances, in the event a shelf registration statement (the "Shelf
Registration Statement") with respect to the resale of the Old Capital
Securities is not declared effective by November 3, 1997, then interest will
accrue (in addition to the stated interest rate on the Old Junior Subordinated
Debentures) at the rate of 0.25% per annum on the principal amount of the Old
Junior Subordinated Debentures and Distributions will accrue (in addition to the
stated Distribution rate on the Old Capital Securities) at the rate of 0.25% per
annum on the Liquidation Amount of the Old Capital Securities, for the period
from the occurrence of such event until such time as such required Exchange
Offer is consummated or any required Shelf Registration Statement is effective.
The New Securities are not, and upon consummation of the Exchange Offer the Old
Securities will not be, entitled to any such additional interest or
Distributions. Accordingly, holders of Old Capital Securities should review the
information set forth under "Risk Factors -- Certain Consequences of a Failure
to Exchange Old Capital Securities" and "Description of New Securities."
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RELATIONSHIP AMONG THE NEW CAPITAL SECURITIES, THE NEW
JUNIOR SUBORDINATED DEBENTURES AND THE NEW GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the New Capital
Securities (to the extent the Trust has funds on hand legally available for the
payment of such Distributions) will be irrevocably guaranteed by the Corporation
as and to the extent set forth under "Description of New Securities --
Description of New Guarantee." Taken together, the Corporation's obligations
under the New Junior Subordinated Debentures, the Indenture, the Declaration and
the New Guarantee will provide, in the aggregate, a full, irrevocable and
unconditional guarantee of payments of Distributions and other amounts due on
the New Capital Securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the New Capital Securities. If and to the extent that
the Corporation does not make the required payments on the New Junior
Subordinated Debentures, the Trust will not have sufficient funds to make the
related payments, including Distributions, on the New Capital Securities. The
New Guarantee will not cover any such payment when the Trust does not have
sufficient funds on hand legally available therefor. In such event, the remedy
of a holder of New Capital Securities is to institute a Direct Action. The
obligations of the Corporation under the New Guarantee will be subordinate and
junior in right of payment to all Senior Indebtedness.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on the
New Junior Subordinated Debentures, such payments will be sufficient to cover
Distributions and other payments due on the New Capital Securities, primarily
because: (i) the aggregate principal amount or Prepayment Price of the New
Junior Subordinated Debentures will be equal to the sum of the Liquidation
Amount or Redemption Price, as applicable, of the New Capital Securities and
related Common Securities; (ii) the interest rate and interest and other payment
dates on the New Junior Subordinated Debentures will match the Distribution rate
and Distribution and other payment dates for the New Capital Securities; (iii)
the Corporation shall pay for all and any costs, expenses and liabilities of the
Trust except the Trust's obligations to holders of Trust Securities under such
Trust Securities; and (iv) the Declaration provides that the Trust is not
authorized to engage in any activity that is not consistent with the limited
purposes thereof.
ENFORCEMENT OF RIGHTS OF HOLDERS OF CAPITAL SECURITIES
A holder of any New Capital Security may institute a legal proceeding
directly against the Corporation to enforce its rights under the New Guarantee
without first instituting a legal proceeding against the Guarantee Trustee, the
Trust or any other person or entity.
A default or event of default under any Senior Indebtedness would not
constitute a default or Event of Default under the Declaration. However, in the
event of payment defaults under, or acceleration of, Senior Indebtedness, the
subordination provisions of the Indenture provide that no payments may be made
in respect of the New Junior Subordinated Debentures until such Senior
Indebtedness has been paid in full or any payment default thereunder has been
cured or waived. Failure to make required payments on New Junior Subordinated
Debentures would constitute an Event of Default under the Declaration.
LIMITED PURPOSE OF THE TRUST
The New Capital Securities will represent preferred beneficial interests in
the Trust, and the Trust exists for the exclusive purposes of issuing and
selling the Trust Securities, using the proceeds from the sale of the Trust
Securities to acquire the Junior Subordinated Debentures and engaging in only
those other activities necessary, advisable or incidental thereto.
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RIGHTS UPON TERMINATION
Unless the Junior Subordinated Debentures are distributed to holders of the
Trust Securities, upon any voluntary or involuntary termination and liquidation
of the Trust, the holders of the Trust Securities will be entitled to receive,
out of assets held by the Trust, the Liquidation Distribution in cash. See
"Description of New Securities -- Description of New Capital Securities --
Liquidation of the Trust and Distribution of New Junior Subordinated
Debentures." Upon any voluntary or involuntary liquidation or bankruptcy of the
Corporation, the Property Trustee, as holder of the New Junior Subordinated
Debentures, would be a subordinated creditor of the Corporation, subordinated in
right of payment to all Senior Indebtedness as set forth in the indenture, but
entitled to receive payment in full of principal (and premium, if any) and
interest, before any stockholders of the Corporation receive payments or
distributions. Since the Corporation will be the guarantor under the New
Guarantee and will agree to pay for all costs, expenses and liabilities of the
Trust (other than the Trust's obligations to the holders of its Trust
Securities), the positions of a holder of New Capital Securities and a holder of
New Junior Subordinated Debentures relative to 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.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
GENERAL
The following is a summary of the principal United States federal income
tax consequences of the purchase, ownership and disposition of Capital
Securities. This summary only addresses the federal income tax consequences to a
person that acquires Capital Securities on their original issue at their
original offering price and that is (i) an individual citizen or resident of the
United States, (ii) a corporation or partnership organized in or under the laws
of the United States or any state thereof or the District of Columbia, (iii) an
estate the income of which is subject to United States federal income tax
regardless of source or (iv) a trust if a court within the United States is able
to exercise primary supervision over the administration of the trust and one or
more United States trustees have the authority to control all substantial
decisions of the trust (a "United States Person"). This summary does not address
all tax consequences that may be applicable to a United States Person that is a
beneficial owner of Capital Securities, nor does it address the tax consequences
to (a) persons that are not United States Persons, (b) persons that may be
subject to special treatment under United States federal income tax law, such as
banks, insurance companies, thrift institutions, regulated investment companies,
real estate investment trusts, tax-exempt organizations and dealers in
securities or currencies, (c) persons that will hold Capital Securities as part
of a position in a "straddle" or as part of a "hedging," "conversion" or other
integrated investment transaction for federal income tax purposes, (d) persons
whose functional currency is not the United States dollar or (e) persons that do
not hold Capital Securities as capital assets.
The statements of law or legal conclusions set forth in this summary
constitute the opinion of Skadden, Arps, Slate, Meagher & Flom (Illinois),
special counsel to the Corporation and the Trust. An opinion of counsel is not,
however, binding on the Internal Revenue Service ("IRS") or any court. This
summary is based upon the Internal Revenue Code of 1986, as amended (the
"Code"), Treasury Regulations, IRS rulings and pronouncements and judicial
decisions as of the date hereof, all of which are subject to change at any time.
Such changes may be applied retroactively in a manner that could cause the tax
consequences to vary substantially from the consequences described below,
possibly adversely affecting a beneficial owner of Capital Securities. The
authorities on which this summary is based are subject to various
interpretations, and it is therefore possible that the federal income tax
treatment of the purchase, ownership and disposition of Capital Securities may
differ from the treatment described below. No rulings have been or will be
sought from the IRS regarding any matter discussed below.
PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS IN
LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE FEDERAL TAX CONSEQUENCES
OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF CAPITAL SECURITIES, AS WELL AS THE
EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
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CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES
The Corporation intends to treat the Junior Subordinated Debentures as
indebtedness of the Corporation for United States federal income tax purposes.
The following discussion assumes that the Junior Subordinated Debentures will be
so classified as indebtedness.
CLASSIFICATION OF THE TRUST
In connection with the issuance of the Capital Securities, Skadden, Arps,
Slate, Meagher & Flom (Illinois) has rendered its opinion to the effect that,
under then current law and assuming full compliance with the terms of the
Declaration and the Indenture (and certain other documents), and based on
certain facts and assumptions contained in such opinion, the Trust will be
classified as a grantor trust and not as an association taxable as a corporation
for United States federal income tax purposes. As a result, each holder of
Capital Securities will be treated as owning an undivided interest in the Junior
Subordinated Debentures held by the Trust and each holder will be required to
include in its gross income its pro rata share of interest income (and original
issue discount income, if any) in respect of the Junior Subordinated Debentures.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
United States Persons (including cash basis United States Persons) that
hold debt instruments issued with OID must generally include such OID in income
as it accrues on a constant yield method even if there is not a corresponding
receipt of cash attributable to such income. A debt instrument such as a Junior
Subordinated Debenture will generally be treated as issued with OID if the
stated interest on the instrument does not constitute "qualified stated
interest." Qualified stated interest is generally any one of a series of stated
interest payments on an instrument that are unconditionally payable at least
annually at a single fixed rate. In determining whether stated interest on an
instrument is unconditionally payable and thus constitutes qualified stated
interest, remote contingencies as to the timely payment of stated interest are
ignored. In the case of the Junior Subordinated Debentures, the Corporation has
concluded that the likelihood of its exercising its option to defer payments of
interest is remote because the exercise of such option would prevent the
Corporation from declaring dividends on any class of its stock. Accordingly, the
Corporation intends to treat the Junior Subordinated Debentures as having been
issued without OID and, therefore, United States Persons holding Capital
Securities will accrue interest income under their particular methods of
accounting (e.g., cash or accrual) rather than accruing OID on a constant yield
method.
If the option to defer any payment of interest was determined not to be
"remote" or if the Corporation exercised such option, the Junior Subordinated
Debentures would be treated as issued with OID at the time of issuance or at the
time of such exercise, as the case may be, and all stated interest on the Junior
Subordinated Debentures would thereafter be treated as OID as long as the Junior
Subordinated Debentures remained outstanding. In such event, all of a United
States Person's taxable interest income in respect of the Junior Subordinated
Debentures would constitute OID that would have to be included in income on a
constant yield method before the receipt of the cash attributable to such
income, regardless of such person's method of tax accounting, and actual
distributions of stated interest would not be reported as taxable income.
Consequently, a holder of Capital Securities would be required to include such
OID in gross income even though the Corporation would not make any actual cash
payments during an Extension Period.
The above conclusions are based on recently promulgated Treasury
Regulations, which have not been interpreted by any court decisions or addressed
in any ruling or other pronouncements of the IRS, and it is possible that the
IRS could take a position contrary to the conclusions herein.
Corporate holders of the Capital Securities will not be entitled to a
dividends-received deduction with respect to any income recognized with respect
to the Capital Securities.
DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES TO HOLDERS OF CAPITAL SECURITIES
Under current law, a distribution by the Trust of the Junior Subordinated
Debentures as described under the caption "Description of Capital Securities --
Liquidation of Trust and Distribution of Junior Subordinated
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Debentures" will be non-taxable and will result in the holder receiving directly
its pro rata share of the Junior Subordinated Debentures previously held
indirectly through the Trust, with a holding period and aggregate tax basis
equal, respectively, to the holding period and aggregate tax basis such holder
has in its Capital Securities before such distribution. A holder will accrue
interest in respect of Junior Subordinated Debentures received from the Trust in
the manner described above under "-- Interest Income and Original Issue
Discount."
SALES OR REDEMPTION OF CAPITAL SECURITIES
Gain or loss will be recognized by a holder on a sale of Capital Securities
(including a redemption for cash) in an amount equal to the difference between
the amount realized (less any accrued interest, which would be taxable as such)
and the holder's adjusted tax basis in the Capital Securities sold or so
redeemed. Assuming the Corporation does not defer interest on the Capital
Securities by extending the interest payment periods, a holder's adjusted tax
basis in the Capital Securities generally will be its initial purchase price.
Gain or loss recognized by a holder on Capital Securities held for more than one
year will generally be taxable as long-term capital gain or loss.
The Capital Securities may trade at a price that does not fully reflect the
value of accrued but unpaid interest with respect to the underlying Junior
Subordinated Debentures. If the Junior Subordinated Debentures are deemed to be
issued with OID or if the Corporation exercises its deferral option, a holder
who disposes of its Capital Securities between record dates for payments of
Distributions (and consequently does not receive a Distribution from the Trust
for the period prior to such disposition) will nevertheless be required to
include in income as ordinary income accrued but unpaid interest on the Junior
Subordinated Debentures through the date of disposition and to add such amount
to its adjusted tax basis in its Capital Securities disposed of. Such holder
will recognize a capital loss on the disposition of its Capital Securities to
the extent the selling price (which may not fully reflect the value of accrued
but unpaid interest) is less than the holder's adjusted tax basis in the Capital
Securities (which will include accrued but unpaid interest). Subject to certain
limited exceptions, capital losses cannot be applied to offset ordinary income
for federal income tax purposes. Accrual basis holders will be subject to
similar treatment without regard to the Corporation's election to defer payments
of interest.
EXCHANGE OF CAPITAL SECURITIES
The exchange of Capital Securities pursuant to the Exchange Offer should
not be treated as an "exchange" and, thus, should not be treated as a taxable
event for United States federal income tax purposes. If, however, the exchange
of the Capital Securities pursuant to the Exchange Offer were treated as an
exchange, such exchange should constitute a tax-free recapitalization for United
States federal income tax purposes. Accordingly, the Capital Securities received
should have the same issue price as the Capital Securities surrendered, and a
holder should have the same adjusted tax basis and holding period in the Capital
Securities received as the holder had in the Capital Securities surrendered.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
The amount of interest (and OID, if any) accrued on the Capital Securities
held of record by United States Persons (other than corporations and other
exempt holders) will be reported to the IRS. "Backup withholding" at a rate of
31% will apply to payments of interest to a non-exempt United States Person
unless the holder furnishes its taxpayer identification number in the manner
prescribed in applicable Treasury Regulations, certifies that such number is
correct, certifies as to no loss of exemption from backup withholding and meets
certain other conditions. Any amounts withheld from a holder under the backup
withholding rules will be allowed as a refund or a credit against such holder's
United States federal income tax liability, provided the required information is
furnished to the IRS.
It is anticipated that income on the Capital Securities will be reported to
holders on IRS Form 1099 and mailed to holders of the Capital Securities by
January 31 following each calendar year.
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PROPOSED TAX LEGISLATION
On February 6, 1997, as part of President Clinton's Fiscal 1998 Budget
Proposal, the United States Treasury Department proposed legislation that would,
among other things, deny an issuer a deduction for United States federal income
tax purposes for the payment of interest on instruments with characteristics
similar to the Junior Subordinated Debentures. If the proposed legislation were
enacted in its current form, it is not expected to apply to the Junior
Subordinated Debentures by reason of the currently proposed prospective
effective date. There can be no assurances, however, that the proposed
legislation, if enacted, or similar legislation enacted after the date hereof
would not adversely affect the tax treatment of the Junior Subordinated
Debentures, resulting in a Tax Event, which may permit the Corporation, upon
approval of the Federal Reserve (if then required under applicable capital
guidelines or policies of the Federal Reserve) to cause a redemption of the
Trust Securities at the Special Event Redemption Price by electing to prepay the
Junior Subordinated Debentures at the Special Event Prepayment Price.
ERISA CONSIDERATIONS
The Corporation, the obligor with respect to the New Junior Subordinated
Debentures held by the Trust, and its affiliates and the Property Trustee may
each be considered a "party in interest" (within the meaning of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) or a "disqualified
person" (within the meaning of Section 4975 of the Code) with respect to many
employee benefit plans ("Plans") that are subject to ERISA and certain employee
benefit-related provisions of the Code. Any purchaser proposing to acquire New
Capital Securities with assets of any Plan should consult with its counsel. The
purchase and/or holding of New Capital Securities by a Plan that is subject to
the fiduciary responsibility provisions of ERISA or the prohibited transaction
provisions of Section 4975 of the Code (including individual retirement
arrangements and other plans described in Section 4975 (e)(1) of the Code) and
with respect to which the Corporation, the Property Trustee or any affiliate is
a service provider (or otherwise is a party in interest or a disqualified
person) may constitute or result in a prohibited transaction under ERISA or
Section 4975 of the Code, unless such New Capital Securities are acquired
pursuant to and in accordance with an applicable exemption, such as Prohibited
Transaction Class Exemption ("PTCE") 84-14 (an exemption for certain
transactions determined by an independent qualified professional asset manager),
PTCE 91-38 (an exemption for certain transactions involving bank collective
investment funds), PTCE 90-1 (an exemption for certain transactions involving
insurance company pooled separate accounts), PTCE 95-60 (an exemption for
transactions involving certain insurance company general accounts) or PTCE 96-23
(an exemption for certain transactions determined by an in-house asset manager).
In addition, as described below, a Plan fiduciary considering the acquisition of
New Capital Securities should be aware that the assets of the Trust may be
considered "plan assets" for ERISA purposes. Therefore, a Plan fiduciary should
consider whether the acquisition of Capital Securities could result in a
delegation of fiduciary authority to the Property Trustee, and, if so, whether
such a delegation of authority is permissible under the Plan's governing
instrument or any investment management agreement with the Plan. In making such
determination, a Plan fiduciary should note that the Property Trustee is a U.S.
bank qualified to be an investment manager (within the meaning of section 3(38)
of ERISA) to which such a delegation of authority generally would be permissible
under ERISA. Further, prior to an Event of Default with respect to the New
Junior Subordinated Debentures, the Property Trustee will have only limited
custodial and ministerial authority with respect to Trust assets.
Under the U.S. Department of Labor regulations defining "plan assets" for
ERISA purposes (the "Plan Assets Regulations"), the assets of the Trust will be
considered plan assets of Plans owning New Capital Securities unless the
aggregate investment in New Capital Securities by "benefit plan investors" is
not deemed "significant" or the New Capital Securities qualify as "publicly
offered securities" as defined in such Regulations. For this purpose, equity
participation by benefit plan investors will not be considered "significant" on
any date only if, immediately after the most recent acquisition of Capital
Securities, the aggregate interest in the New Capital Securities held by benefit
plan investors will be less than 25% of the value of the New Capital Securities.
Although it is possible that the equity participation by benefit plan investors
in New Capital Securities on any date will not be "significant" for purposes of
the Plan Assets Regulations, such result cannot be assured.
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The New Capital Securities may qualify as "publicly offered securities"
under the Plan Assets Regulations if at the time of the Exchange Offer they are
also "widely held" and "freely transferable." Under the Regulations, a class of
securities is "widely held" only if it is a class of securities that is owned by
100 or more investors independent of the issuer and of one another. Although it
is possible that at the time of the Exchange Offer the New Capital Securities
will be "widely held," such result cannot be assured. Whether a security is
"freely transferable" for purposes of the Regulations is a factual question to
be determined on the basis of all relevant facts and circumstances. If at the
time of the Exchange Offer the New Capital Securities qualify as "publicly
offered securities," the assets of the Trust should not be "plan assets" with
respect to Plans acquiring New Capital Securities. If at the time of the
Exchange Offer the New Capital Securities do not qualify as "publicly offered
securities," the "plan asset" considerations discussed in the preceding
paragraphs could be applicable in connection with the investment by Plans in the
New Capital Securities.
SELLING HOLDER
The Private Exchange Securities being offered hereby are being offered by
the Selling Holder. The Private Exchange Securities were issued by the
Corporation and the Trust, as applicable, and delivered to the Selling Holder in
exchange (the "Private Exchange") for corresponding amounts of Old Securities.
Such Old Securities were originally issued to the Selling Holder, as the Initial
Purchaser, in a transaction exempt from the registration requirements of the
Securities Act. As of the date hereof, the Selling Holder holds $19,750,000
aggregate Liquidation Amount of Private Exchange Capital Securities,
representing approximately 49% of the combined outstanding Private Exchange
Capital Securities and the Old Capital Securities. All of the Private Exchange
Securities held by the Selling Holder are being offered hereby.
The Selling Holder may, in the ordinary course of business, trade the
securities of the Corporation for its own account or the accounts of its
customers and, accordingly, may at any time hold long or short positions in such
securities. The Selling Holder acted as financial advisor to First National in
connection with the acquisition of First National by the Corporation.
PLAN OF DISTRIBUTION
EXCHANGE OFFER
Each broker-dealer that receives New Capital Securities for its own account
in connection with the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Capital Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by Participating Broker-Dealers during the period referred to below in
connection with resales of New Capital Securities received in exchange for Old
Capital Securities if such Old Capital Securities were acquired by such
Participating Broker-Dealers for their own accounts as a result of market-making
activities or other trading activities. The Corporation and the Trust have
agreed that this Prospectus, as it may be amended or supplemented from time to
time, may be used by a Participating Broker-Dealer in connection with resales of
such New Capital Securities for a period ending 90 days after the Expiration
Date (subject to extension under certain limited circumstances described herein)
or, if earlier, when all such New Capital Securities have been disposed of by
such Participating Broker-Dealer. However, a Participating Broker-Dealer who
intends to use this Prospectus in connection with the resale of New Capital
Securities received in exchange for Old Capital Securities pursuant to the
Exchange Offer must notify the Corporation or the Trust, or cause the
Corporation or the Trust to be notified, on or prior to the Expiration Date,
that it is a Participating Broker-Dealer. Such notice may be given in the space
provided for that purpose in the Letter of Transmittal or may be delivered to
the Exchange Agent at one of the addresses set forth herein under "The Exchange
Offer -- Exchange Agent." See "The Exchange Offer -- Resales of New Capital
Securities."
The Corporation or the Trust will not receive any cash proceeds from the
issuance of the New Capital Securities offered hereby. New Capital Securities
received by broker-dealers for their own accounts in connection with the
Exchange Offer may be sold from time to time in one or more transactions in the
over-the-counter market, in negotiated transactions, through the writing of
options on the New Capital Securities
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or a combination of such methods of resale, at market prices prevailing at the
time of resale, at prices related to such prevailing market prices or at
negotiated prices. Any such resale may be made directly to purchasers or to or
through brokers or dealers who may receive compensation in the form of
commissions or concessions from any such broker-dealer and/or the purchasers of
any such New Capital Securities.
Any broker-dealer that resells New Capital Securities that were received by
it for its own account in connection with the Exchange Offer and any broker or
dealer that participates in a distribution of such New Capital Securities may be
deemed to be an "underwriter" within the meaning of the Securities Act, and any
profit on any such resale of New Capital Securities and any commissions or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The Letter of Transmittal states that by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
PRIVATE EXCHANGE SECURITIES
The Selling Holder intends to use this Prospectus to resell the Private
Exchange Securities it received in the Private Exchange. The Selling Holder may
sell the Private Exchange Securities being offered hereby by one or more
methods, including without limitation, (i) through underwriters, (ii) through
brokers or dealers, (iii) through agents and (iv) directly to purchasers. Any
agents, brokers, dealers or underwriters that participate in the distribution of
the Private Exchange Securities may be deemed to be "underwriters" within the
meaning of the Securities Act, and any commissions received by them and any
profit on the resale of any Private Exchange Securities purchased by them might
be deemed to be underwriting discounts or commissions under the Securities Act.
The Selling Holder may from time to time effect the sale of its Private
Exchange Securities in one or more transactions in the public market at fixed
prices, at prices and at terms then prevailing or at prices related to the then
current market price, or in negotiated transactions or otherwise.
In order to comply with the securities laws of certain jurisdictions, if
applicable, the Private Exchange Securities will be offered or sold in such
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain jurisdictions the Private Exchange Securities may not be
offered or sold unless they have been registered or qualified for sale in such
jurisdictions or any exemption from registration or qualification is available
and is complied with.
Upon the Corporation being notified by the Selling Holder of any change in
the identity of the Selling Holder or that any material arrangement has been
entered into with a broker or dealer for the sale of any Private Exchange
Securities through a secondary distribution, or a purchase by a broker or
dealer, a Prospectus Supplement will be filed, if required, pursuant to Rule
424(b) under the Securities Act, disclosing (i) the names of such brokers or
dealers, (ii) the commissions paid or the discounts or concessions allowed to
such brokers or dealers, (iii) where applicable, that such broker or dealer did
not conduct any investigation to verify the information set out or incorporated
by reference in this Prospectus, (iv) any change in the identity of the Selling
Holder and (v) other facts material to the transaction.
To the best knowledge of the Corporation, there are currently no plans,
arrangement or understandings between the Selling Holder and any broker or
dealer regarding the sale of the Private Exchange Securities by the Selling
Holder. There is no assurance that the Selling Holder will sell any or all of
its Private Exchange Securities offered by it hereunder or that the Selling
Holder will not transfer such Private Exchange Securities by other means not
described herein.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of securities may not simultaneously engage in market
making activities with respect to the Corporation's securities for specified
periods prior to the commencement of such distribution. In addition and without
limiting the foregoing, the Selling Holder will be subject to applicable
provisions of the Exchange Act, and the rules and regulations thereunder, which
provisions may limit the timing of purchases and sales of Private Exchange
Securities.
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Pursuant to the Registration Rights Agreement, each of the Corporation, the
Trust and the Selling Holder will be indemnified by the other against certain
liabilities, including liabilities under the Securities Act, or will be entitled
to contribution in connection therewith. The Corporation has agreed to pay
certain expenses incident to the offer and sale of the Private Exchange
Securities by the Selling Holder other than brokers' commissions and
underwriting discounts and commissions.
Neither the Corporation nor the Trust will receive any proceeds from the
sale of the Private Exchange Securities offered hereby.
LEGAL MATTERS
Certain legal matters will be passed upon for the Corporation and the Trust
by Skadden, Arps, Slate, Meagher & Flom (Illinois), Chicago, Illinois, relying
as to all matters of Nevada law upon Marshall Hill Cassas & de Lipkau, Reno,
Nevada. Certain matters relating to United States Federal income tax
considerations will be passed upon for the Corporation by Skadden, Arps, Slate,
Meagher & Flom (Illinois), Chicago, Illinois.
EXPERTS
The consolidated financial statements of the Corporation appearing in the
Corporation's Annual Report on Form 10-K for the fiscal year ended December 31,
1996, and incorporated by reference in this Prospectus, have been incorporated
herein by reference in reliance upon the report set forth therein of McGladrey &
Pullen, LLP, independent auditors, and upon the authority of such firm as
experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Corporation has purchased for the benefit of its officers and
directors, and those of certain subsidiaries, insurance policies whereby the
insurance companies agree, among other things, that in the event any such
officer or director becomes legally obligated to make a payment (including legal
fees and expenses) in connection with an alleged wrongful act, such insurance
companies will pay the Corporation up to $5,000,000. Wrongful act means any
breach of duty, neglect, error, misstatement, misleading statement or other act
done by an officer or director of the Corporation or any subsidiary.
The Corporation is required, pursuant to AMCORE's Restated Articles of
Incorporation (the "AMCORE Charter"), to indemnify all persons who may be
indemnified under Nevada law to the fullest extent permitted by such law.
Generally, under Nevada law, a corporation may indemnify officers, directors,
employees and agents of a corporation against all expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by them in connection with any threatened, pending or completed civil,
criminal, administrative or investigative proceeding (other than derivative
actions) if they acted in good faith and in a manner they reasonably believed to
be in or not opposed to the best interests of the corporation and, with respect
to any criminal action, they had no reasonable cause to believe their conduct
was unlawful. With respect to derivative actions, officers, directors, employees
and agents of a corporation may be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by them in connection with the
defense or settlement of such action if they acted in good faith and in a manner
they reasonably believed to be in or not opposed to the best interests of the
corporation, except that no such indemnification may be made in respect of any
claim as to which such person shall have been adjudged to be liable to the
corporation, unless and only to the extent that the court in which the action
was brought determines that such person is entitled to indemnification despite
the adjudication of liability. To the extent that an officer, director, employee
or agent is successful on the merits or otherwise in defense of any action, suit
or proceeding referred to above, the corporation shall indemnify such officer,
director, employee or agent against expenses (including attorneys' fees)
actually and reasonably incurred in connection therewith.
The AMCORE Charter also permits the Corporation to purchase and maintain
insurance or make other financial arrangements to insure its directors,
officers, employees and agents against liabilities, whether or not AMCORE is
itself permitted to indemnify against such liabilities.
As permitted by Nevada law, the AMCORE Charter eliminates, to the fullest
extent permitted by Nevada law, the personal liability of directors and officers
to the Corporation for breaches of fiduciary duty. Under the AMCORE Charter,
directors and officers are not indemnified for acts or omissions involving
intentional misconduct, fraud or a knowing violation of law or for violations of
Section 78.300 of the Nevada General Corporation Law regarding unlawful payment
of dividends.
The Corporation has entered into indemnification contracts (the
"Indemnification Agreements") with its directors and officers. The
Indemnification Agreements provide for indemnification of directors and officers
to the fullest extent permitted by law. These agreements cover all expenses,
judgments, fines and penalties incurred and amounts paid in settlement in
connection with investigating, defending, being a witness or participating in or
preparing to defend, be a witness in or participate in any threatened, pending
or completed action, suit or proceeding or any inquiry or investigation, whether
civil, criminal, administrative or otherwise, related to the fact that such
director or officer was a director or officer, employee, agent or fiduciary of
AMCORE or was serving as such at the request of the Corporation. The
Indemnification Agreements impose upon the Corporation the burden of proving
that the director or officer is not entitled to indemnification.
Insofar as the foregoing provisions may permit indemnification of
directors, officers or persons controlling the Corporation for liabilities
arising under the Securities Act, the Corporation understands that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and therefore is unenforceable.
II-1
<PAGE> 71
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
EXHIBIT
- -------
<S> <C>
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom (Illinois)
to AMCORE Financial, Inc. and to AMCORE Capital Trust I as
to legality of the New Junior Subordinated Debentures and
the New Guarantee to be issued by AMCORE Financial, Inc. and
the legality of the New Capital Securities to be issued by
AMCORE Capital Trust I
8 Opinion of Skadden, Arps, Slate, Meagher & Flom (Illinois),
special tax counsel, as to certain federal income tax
matters
23.1 Consent of McGladrey & Pullen, LLP
23.3 Consent of Skadden, Arps, Slate, Meagher & Flom (Illinois)
(included in Exhibits 5.1 and 8)
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Exchange Agent Agreement
</TABLE>
ITEM 22. UNDERTAKINGS
Each of the undersigned Registrants hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of a Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of each
undersigned Registrant pursuant to the provisions, or otherwise, each Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by each undersigned Registrant of
expenses incurred or paid by a director, officer of controlling person of each
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, each Registrant will, unless in the opinion of its
counsel the matter has been settled by the controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
The undersigned Registrants hereby undertake to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through the date
of responding to the request.
The undersigned Registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired or involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-2
<PAGE> 72
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, AMCORE
Financial, Inc. certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-4 and has duly caused this
amendment to the registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Rockford, State of
Illinois, on the 12th day of May, 1997.
AMCORE FINANCIAL, INC.
By: /s/ JOHN R. HECHT
------------------------------------
(John R. Hecht)
(Senior Vice President and
Chief Financial Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ ROBERT J. MEULEMAN* Director, President and Chief Executive Officer
- --------------------------------------------- (principal executive officer)
(Robert J. Meuleman)
/s/ JOHN R. HECHT* Senior Vice President and Chief Financial Officer
- --------------------------------------------- (principal financial officer and principal accounting
(John R. Hecht) officer)
/s/ MILTON R. BROWN* Director
- ---------------------------------------------
(Milton R. Brown)
/s/ LAWRENCE E. GLOYD* Director
- ---------------------------------------------
(Lawrence E. Gloyd)
/s/ TED ROSS* Director
- ---------------------------------------------
(Ted Ross)
/s/ JACK D. WARD, ESQ.* Director
- ---------------------------------------------
(Jack D. Ward, Esq.)
/s/ RICHARD C. DELL* Director
- ---------------------------------------------
(Richard C. Dell)
/s/ THERESA PAULETTE GILBERT* Director
- ---------------------------------------------
(Theresa Paulette Gilbert)
/s/ ROBERT A. HENRY* Director
- ---------------------------------------------
(Robert A. Henry)
*By /s/ JOHN R. HECHT
----------------------------------------
ATTORNEY-IN-FACT
</TABLE>
II-3
<PAGE> 73
Pursuant to the requirements of the Securities Act of 1933, AMCORE Capital
Trust I certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-4 and has duly caused this amendment to
the registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Rockford, State of Illinois, on the
12th day of May, 1997.
AMCORE CAPITAL TRUST I
By: /s/ JOHN R. HECHT
------------------------------------
John R. Hecht,
as Administrative Trustee
By: /s/ GREG SPRAWKA
------------------------------------
Greg Sprawka,
as Administrative Trustee
By: /s/ YVETTE POWELL
------------------------------------
Yvette Powell,
as Administrative Trustee
II-4
<PAGE> 1
EXHIBIT 5.1
[Letterhead of Skadden, Arps, Slate, Meagher & Flom (Illinois)]
May 12, 1997
AMCORE Financial, Inc.
AMCORE Capital Trust I
c/o AMCORE Financial, Inc.
501 7th Street
Rockford, Illinois 61104
Re: Registration Statement on Form S-4
--SEC Registration No. 333-25375 and -01
Ladies and Gentlemen:
We have acted as special counsel to AMCORE Capital Trust I
(the "Trust"), a business trust formed under the Business Trust Securities Act
of the State of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del.
L. Sec. 2801 et. seq. (the "Delaware Act")), and AMCORE Financial, Inc., a
Nevada corporation (the "Company"), in connection with the preparation of a
Registration Statement on Form S-4 (Registration No. 333-25375 and -01), as
filed by the Company and the Trust with the Securities and Exchange Commission
(the "Commission") on April 17, 1997 with respect to the registration under the
Securities Act of 1933, as amended (the "Securities Act"), of (i) up to
$40,000,000 aggregate Liquidation Amount of 9.35% Series B Capital Securities
(the "Series B Capital Securities") of the Trust (ii) up to $41,238,000
aggregate principal amount of 9.35% Series B Junior Subordinated Deferrable
Interest Debentures (the "Series B Debentures") of the Company and (iii) the
rights of holders of Series B Capital Securities under the Series B Capital
Securities Guarantee Agreement (the "New Guarantee") to be entered into between
the Company, as guarantor, and The First National Bank of Chicago, as guarantee
trustee. The Series B Capital Securities, Series B Debentures and the New
Guarantee are collectively referred to herein as the "Securities."
<PAGE> 2
AMCORE Capital Trust I
AMCORE Financial, Inc.
May 12, 1997
Page 2
The Series B Capital Securities are to be issued pursuant to
the Amended and Restated Declaration of Trust of the Trust, dated as of March
25, 1997 (the "Declaration"), among The First National Bank of Chicago, as
property trustee (the "Property Trustee"), First Chicago Delaware, Inc., as
Delaware trustee, the Company, as sponsor, and the individual administrative
trustees named therein. The Series B Debentures will be issued pursuant to the
Indenture, dated as of March 25, 1997 (the "Indenture"), between the Company
and the First National Bank of Chicago, as trustee.
This opinion is being delivered in accordance with the
requirements of Item 601(b)(5) of Regulation S-K under the Securities Act.
In connection with this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of (i) the
Registration Statement on Form S-4 as filed by the Company and the Trust with
the Commission on April 17, 1997 under the Securities Act, (such Registration
Statement, as amended by Amendment No. 1 to the Registration Statement, as
filed with the Commission on May 12, 1997, being hereinafter referred to as the
"Registration Statement"); (ii) the Certificate of Trust of the Trust filed
with the Secretary of State of the State of Delaware on March 11, 1997; (iii)
the Declaration; (iv) the form of the Series B Capital Securities and a
specimen certificate therefor; (v) an executed copy of the Registration Rights
Agreement, dated as of March 25, 1997 (the "Registration Rights Agreement"),
among the Company, the Trust and Robert W. Baird & Co., Incorporated; (vi) the
form of the New Guarantee filed as an exhibit to the Registration Statement;
(vii) the Indenture; (viii) the form of the Series B Debentures and a specimen
certificate therefor; and (ix) certain resolutions adopted by the board of
directors of the Company relating to the issuance of the Securities and related
matters. We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such other documents, certificates and
records as we have deemed necessary or appropriate as a basis for the opinions
set forth herein.
<PAGE> 3
AMCORE Capital Trust I
AMCORE Financial, Inc.
May 12, 1997
Page 3
In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certificated or photostatic copies and the
authenticity of the originals of such latter documents. In making our
examination of documents executed by parties other than the Trust, we have
assumed that such parties had the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or other, and execution and delivery by such
parties of such documents and the validity and binding effect thereof on such
parties. As to any facts material to the opinions expressed herein which we
did not independently establish or verify, we have relied upon oral or written
statements and representations of officers, trustees and other representatives
of the Company, the Trust and others.
Members of our firm are admitted to the practice of law in the
State of Illinois, and we do not express any opinion as to the laws of any
jurisdiction other than the laws of the State of Illinois, the General
Corporation Law of the State of Delaware (the "DGCL"), the Delaware Act and the
federal laws of the United States to the extent set forth herein. To the
extent that the opinions set forth below made by us relate to matters under the
laws of the State of Delaware other than the DGCL and the Delaware Act or under
the laws of the State of New York, we have relied on the opinion of Skadden,
Arps, Slate, Meagher & Flom LLP. To the extent that the opinions set forth
below made by us relate to matters under the laws of the State of Nevada, we
have relied on the opinion of Marshall Hill Cassas & de Lipkau.
Based upon and subject to the limitations, qualifications,
exceptions and assumptions set forth herein, we are of the opinion that:
1. The Series B Capital Securities, when (i) the Registration
Statement becomes effective and the
<PAGE> 4
AMCORE Capital Trust I
AMCORE Financial, Inc.
May 12, 1997
Page 4
Declaration has been qualified under the Trust Indenture Act of 1939, as
amended, and (ii) the Series B Capital Securities are duly executed,
authenticated and issued in accordance with the Declaration and delivered in
exchange for the Trust's 9.35% Series A Capital Securities to the holders of
such securities as contemplated by the terms of the Exchange Offer, the
issuance and exchange of the Series B Capital Securities will have been duly
authorized, and the Series B Capital Securities will represent, subject to the
qualifications set forth in paragraph 2 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
2. The holders of the Series B Capital Securities will be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware. We bring to your attention, however, that the
holders of the Series B Capital Securities may be obligated, pursuant to the
Declaration, to (i) provide indemnity and/or security in connection with, and
pay taxes or governmental charges arising from, transfers of Series B Capital
Securities and the issuance of replacement Series B Capital Securities and (ii)
provide security and indemnity in connection with requests of or directions to
the Property Trustee and to exercise its rights and powers under the
Declaration.
3. The New Guarantee, when (i) the Registration
Statement becomes effective and the New Guarantee has been qualified under the
Trust Indenture Act of 1939, as amended, and (ii) when duly executed and
delivered by the parties thereto, will be a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except
to the extent that (a) enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, or other similar laws now or hereafter
in effect relating to creditors's rights generally and (ii) general principles
of equity (regardless of whether enforceability is considered in a proceeding
at law or in equity) and (b) the rights to indemnity contained therein may be
limited by state or
<PAGE> 5
AMCORE Capital Trust I
AMCORE Financial, Inc.
May 12, 1997
Page 5
federal securities laws or the public policy underlying such laws.
4. The Series B Debentures, when (i) the Registration
Statement becomes effective and the Indenture has been qualified under the
Trust Indenture Act of 1939, as amended, and (ii) the Series B Debentures are
duly executed, authenticated and issued in accordance with the Indenture and
delivered in exchange for the Company's 9.35% Series A Junior Subordinated
Deferrable Interest Debentures to the holders of such securities as
contemplated by the terms of the Exchange Offer, the issuance and exchange of
the Series B Debentures will have been duly authorized, and will be valid and
binding obligations of the Company, entitled to the benefits of the Indenture
and enforceable against the Company in accordance with their terms, except to
the extent that (a) enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights generally and (ii) general principles
of equity (regardless of whether enforceability is considered in a proceeding
at law or in equity) and (b) the rights to indemnity contained therein may be
limited by state or federal securities laws or the public policy underlying
such laws.
We hereby consent to the use of our name under the heading
"Legal Matters" in the prospectus which forms a part of the Registration
Statement. We also hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement. In giving this
consent, we do not thereby admit that we are within the category of persons
whose consent is required under Section 7 of the Securities Act or the rules
and regulations of the Commission promulgated thereunder.
Very truly yours,
/s/ Skadden, Arps, Slate,
Meagher & Flom (Illinois)
<PAGE> 1
EXHIBIT 8
May 12, 1997
AMCORE Financial, Inc.
501 Seventh Street
Rockford, Illinois 61104-0037
AMCORE Capital Trust I
c/o AMCORE Financial, Inc.
501 Seventh Street
Rockford, Illinois 61104-0037
Ladies and Gentlemen:
We have acted as special counsel for AMCORE Financial, Inc.,
a Nevada corporation (the "Corporation"), and AMCORE Capital Trust I, a
statutory business trust organized under the laws of the State of Delaware
(the "Trust"), in connection with the preparation and filing with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "1933 Act"), of a registration statement on Form S-4
dated as of April 17, 1997 (such registration statement as amended by
Amendment No. 1 to the registration statement, as filed with the Commission on
May 12, 1997, being hereinafter referred to as the "Registration Statement")
relating to the registration of (i) 9.35% Series B Capital Securities of the
Trust (the "Capital Securities") (ii) 9.35% Series B Junior Subordinated
Deferrable Interest Debentures (the "Debentures") and (iii) the rights of
holders of Capital Securities under the Series B Capital Securities Guarantee
Agreement (the "New Guarantee") to be entered into between the Corporation, as
guarantor, and The First National Bank of Chicago, as guarantee trustee (the
"Guarantee Trustee").
The Capital Securities are being issued pursuant to the
Amended and Restated Declaration of Trust of the Trust, dated as of March 25,
1997 (the "Declaration"), among the Corporation, as sponsor, The First National
Bank of Chicago, as property trustee (the "Property Trustee"), First Chicago
Delaware Inc., as Delaware trustee (the "Delaware Trustee"), and the
administrative trustees (the "Administrative Trustees") named therein.
<PAGE> 2
AMCORE Financial, Inc.
Page 2
May 12, 1997
The New Guarantee will be issued pursuant to the Series B
Capital Securities Guarantee Agreement between the Corporation and the
Guarantee Trustee. The Debentures will be issued pursuant to the Indenture,
dated as of March 25, 1997 (the "Indenture") between the Corporation and The
First National Bank of Chicago, as trustee (the "Indenture Trustee").
In connection with rendering our opinion, we have examined and
are familiar with originals or copies, certified or otherwise identified to our
satisfaction, of (i) the Corporation's Annual Report on Form 10-K for the
fiscal year ending December 31, 1996; (ii) the certificate of trust (the
"Certificate of Trust") filed by the Trust with the Secretary of the State of
Delaware on March 11, 1997; (iii) the Declaration; (iv) the Series B Capital
Securities Guarantee Agreement; (v) the Indenture; (vi) the form of Debentures
and a specimen certificate thereof; (vii) the form of the Capital Securities;
(viii) the Registration Statement; (ix) an executed copy of the Registration
Rights Agreement, dated as of March 25,1997 (the "Registration Rights
Agreement") among the Corporation, the Trust and Robert W. Baird & Co.
Incorporated; and (x) such other records and documents as we have deemed
necessary or appropriate as a basis for the opinion set forth below. We have
assumed the genuineness of all signatures, the legal capacity of all natural
persons, the authenticity of all records and documents submitted to us as
originals, the conformity to original records and documents of all records and
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such copies. As to any facts material to this
opinion that we did not independently establish or verify, we have relied upon
statements and representations of officers and other representatives of the
Corporation. In rendering this opinion, we have assumed that the transactions
were consummated in accordance with the descriptions thereof set forth in such
records and documents and that such records and documents accurately reflect
the material facts of the transactions. Our opinion is limited to legal rather
than factual matters.
<PAGE> 3
AMCORE Financial, Inc.
Page 3
May 12, 1997
In rendering our opinion, we have relied upon the Internal
Revenue Code of 1986, as amended, Treasury Regulations, legislative history,
judicial authorities, published positions of the Internal Revenue Service and
such other authorities as we have considered relevant, all in effect as of the
date hereof and all of which are subject to change or differing interpretation
(possibly on a retroactive basis). There can be no assurances, moreover, that
the opinion expressed herein will be accepted by the Internal Revenue Service
or, if challenged, by a court.
On the basis of and subject to the foregoing, we are of the
opinion that the discussion set forth in the Registration Statement under the
heading "Certain Federal Income Tax Considerations", to the extent it
constitutes matters of law or legal conclusions, is correct in all material
respects.
We express no opinion as to any United States federal tax
consequences other than as set forth in this letter or as to any tax
consequences under state, local or foreign law. This opinion is expressed as
of the date hereof, and we disclaim any undertaking to advise you of any
subsequent changes of the facts stated or assumed herein or any subsequent
changes in applicable law. We hereby consent to the filing of this opinion as
an Exhibit to the Registration Statement. We also consent to the reference to
our firm under the heading "Certain Federal Income Tax Considerations" in the
Registration Statement. In giving each such consent, we do not thereby admit
that we are in the category of persons whose consent is required under Section
7 of the 1933 Act or the rules and regulations promulgated thereunder.
Very truly yours,
/s/Skadden, Arps, Slate,
Meagher & Flom (Illinois)
<PAGE> 1
EXHIBIT 23.1
[LOGO]
MCGLADREY & PULLEN, LLP
--------------------------------------------
CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to incorporation by reference in the Registration Statement
on Form S-4 of AMCORE Financial, Inc. and AMCORE Capital Trust I of our
report dated January 20, 1997, relating to the consolidated balance
sheets of AMCORE Financial, Inc. and subsidiaries as of December 31,
1996 and 1995, and the related consolidated statements of income,
stockholders' equity, and cash flows for each of the years in the
three-year period ended December 31, 1996, which report appears in the
December 31, 1996 annual report on Form 10-K of AMCORE Financial, Inc.
and to the reference of our firm under the heading "Experts" in the
Prospectus.
/s/ McGladrey & Pullen, LLP
Rockford, Illinois
May 9, 1997
<PAGE> 1
EXHIBIT 99.1
LETTER OF TRANSMITTAL
AMCORE CAPITAL TRUST I
OFFER TO EXCHANGE ITS
9.35% SERIES B CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
9.35% SERIES A CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
UNCONDITIONALLY GUARANTEED BY
AMCORE FINANCIAL, INC.
PURSUANT TO THE PROSPECTUS DATED _____ , 1997
________________________________________________________________________________
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON _____ , 1997, UNLESS THE OFFER IS EXTENDED. TENDERS MAY BE
WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
________________________________________________________________________________
The Exchange Agent For The Exchange Offer Is:
The First National Bank of Chicago
Facsimile Transmissions
By Hand, Overnight Delivery or (Eligible Institutions Only):
By Registered or Certified Mail: (212) 240-8938
The First National Bank of Chicago To Confirm by Telephone
c/o First Chicago Trust Company or for Information Call:
of New York (312) 240-8801
8th Floor, Window 2
New York, NY 10005
Delivery of this letter of transmittal to an address other than as set
forth above or transmission of this letter of transmittal via facsimile to a
number other than as set forth above does not constitute a valid delivery.
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
Capitalized terms used but not defined herein shall have the same
meaning given them in the Prospectus (as defined below).
This Letter of Transmittal is to be completed either if (a)
certificates are to be forwarded herewith or (b) tenders are to be made
pursuant to the procedures for tender by book-entry transfer set forth under
"The Exchange Offer -- Procedures for Tendering Old Capital Securities" in the
Prospectus and an Agent's Message (as defined below) is not delivered.
Certificates, or book-entry confirmation of a book- entry transfer of such Old
Capital Securities into the Exchange Agent's account at The Depository Trust
Company ("DTC"), as well as this Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
and any other documents required by this Letter of Transmittal, must be
received by the Exchange Agent at its address set forth herein on or prior to
the Expiration Date. Tenders by book-entry transfer may also be made by
delivering an Agent's Message in lieu of this Letter of Transmittal. The term
"book-entry confirmation" means a confirmation of a book-entry transfer of Old
Capital Securities into the Exchange Agent's account at DTC. The term "Agent's
Message" means a message, transmitted by DTC to and received by the Exchange
Agent and forming a part of a book-entry confirmation, which states that DTC
has received an express acknowledgment from the tendering participant, which
acknowledgment states that such participant has received and agrees to be bound
by this Letter of Transmittal and that the Trust
<PAGE> 2
and AMCORE Financial, Inc., a Nevada corporation (the "Company"), may enforce
this Letter of Transmittal against such participant.
Holders (as defined below) of Old Capital Securities whose
certificates (the "Certificates") for such Old Capital Securities are not
immediately available or who cannot deliver their Certificates and all other
required documents to the Exchange Agent on or prior to the Expiration Date (as
defined in the Prospectus) or who cannot complete the procedures for book-entry
transfer on a timely basis, must tender their Old Capital Securities according
to the guaranteed delivery procedures set forth in "The Exchange
Offer--Procedures for Tendering Old Capital Securities" in the Prospectus.
2
<PAGE> 3
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES
NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
ALL TENDERING HOLDERS COMPLETE THIS BOX:
<TABLE>
<S><C>
- --------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OLD CAPITAL SECURITIES
- --------------------------------------------------------------------------------------------------------------------
If blank, please print name and address of registered Old Capital Securities
Holder(s) (Attach additional list if necessary)
- --------------------------------------------------------------------------------------------------------------------
Aggregate Principal
Principal Amount of Old
Certificate Amount of Old Capital
Number(s)* Capital Securities
Securities Tendered (if
less than
all)**
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
TOTAL:
- --------------------------------------------------------------------------------------------------------------------
* Need not be completed by book-entry Holders.
** Old Capital Securities may be tendered in whole or in part in denominations of $100,000 and
integral multiples of $1,000 in excess thereof, provided that if any Old Capital Securities are
tendered for exchange in part, the untendered principal amount thereof must be $100,000 or any
integral multiple of $1,000 in excess thereof. All Old Capital Securities held shall be deemed
tendered unless a lesser number is specified in this column. See Instructions 4.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
[ ] CHECK HERE IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE
AGENT WITH DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
-----------------------------------------
DTC Account Number
-----------------------------------------------------
Transaction Code Number
------------------------------------------------
[ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED
DELIVERY IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED
PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE
EXCHANGE AGENT AND COMPLETE THE FOLLOWING (SEE INSTRUCTION 1):
Name(s) of Registered Holder(s)
----------------------------------------
Window Ticket Number (if any)
------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
---------------------
Name of Institution which Guaranteed Delivery
--------------------------
If Guaranteed Delivery is to be made By Book-Entry Transfer:
Name of Tendering Institution
-------------------------
DTC Account Number
------------------------------------
Transaction Code Number
-------------------------------
[ ] CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD
CAPITAL SECURITIES ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT
NUMBER SET FORTH ABOVE.
3
<PAGE> 4
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD CAPITAL
SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER
TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO
RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name:
---------------------------------------------------------------------------
Address:
------------------------------------------------------------------------
Ladies and Gentlemen:
The undersigned hereby tenders to Amcore Capital Trust I, a trust
formed under the laws of the State of Delaware (the "Trust") and AMCORE
Financial, Inc., a Nevada corporation (the "Corporation"), the above described
aggregate Liquidation Amount of the Trust's 9.35% Series A Capital Securities
(the "Old Capital Securities") in exchange for a like aggregate Liquidation
Amount of the Trust's 9.35% Series B Capital Securities (the "New Capital
Securities") which have been registered under the Securities Act of 1933 (the
"Securities Act"), upon the terms and subject to the conditions set forth in
the Prospectus dated _____ __, 1997 (as the same may be amended or supplemented
from time to time, the "Prospectus"), receipt of which is hereby acknowledged,
and in this Letter of Transmittal (which, together with the Prospectus,
constitute the "Exchange Offer").
Subject to and effective upon the acceptance for exchange of all or
any portion of the Old Capital Securities tendered herewith in accordance with
the terms and conditions of the Exchange Offer (including, if the Exchange
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to or upon the
order of the Trust all right, title and interest in and to such Old Capital
Securities as are being tendered herewith. The undersigned hereby irrevocably
constitutes and appoints the Exchange Agent as its agent and attorney-in-fact
(with full knowledge that the Exchange Agent is also acting as agent of the
Corporation and the Trust in connection with the Exchange Offer) with respect
to the tendered Old Capital Securities, with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest) subject only to the right of withdrawal described in the Prospectus,
to (i) deliver Certificates for Old Capital Securities to the Corporation or
the Trust together with all accompanying evidences of transfer and authenticity
to, or upon the order of, the Trust, upon receipt by the Exchange Agent, as the
undersigned's agent, of the New Capital Securities to be issued in exchange for
such Old Capital Securities, (ii) present Certificates for such Old Capital
Securities for transfer, and to transfer the Old Capital Securities on the
books of the Trust, and (iii) receive for the account of the Trust all benefits
and otherwise exercise all rights of beneficial ownership of such Old Capital
Securities, all in accordance with the terms and conditions of the Exchange
Offer.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED
HAS FULL POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE
OLD CAPITAL SECURITIES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR
EXCHANGE, THE TRUST WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE
THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES,
AND THAT THE OLD CAPITAL SECURITIES TENDERED HEREBY ARE NOT SUBJECT TO ANY
ADVERSE CLAIMS OR PROXIES. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND
DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY THE CORPORATION, THE TRUST OR THE
EXCHANGE AGENT TO BE NECESSARY OR DESIRABLE TO COMPLETE THE EXCHANGE,
ASSIGNMENT AND TRANSFER OF THE OLD CAPITAL SECURITIES TENDERED HEREBY, AND THE
UNDERSIGNED WILL COMPLY WITH ITS OBLIGATIONS UNDER THE REGISTRATION RIGHTS
AGREEMENT. THE UNDERSIGNED HAS READ AND AGREES TO ALL OF THE TERMS OF THE
EXCHANGE OFFER.
4
<PAGE> 5
The name(s) and address(es) of the registered Holder(s) of the Old
Capital Securities tendered hereby should be printed above, if they are not
already set forth above, as they appear on the Certificates representing such
Old Capital Securities. The Certificate number(s) and the Old Capital
Securities that the undersigned wishes to tender should be indicated in the
appropriate boxes above.
If any tendered Old Capital Securities are not exchanged pursuant to
the Exchange Offer for any reason, or if Certificates are submitted for more
Old Capital Securities than are tendered or accepted for exchange, Certificates
for such nonexchanged or nontendered Old Capital Securities will be returned
(or, in the case of Old Capital Securities tendered by book-entry transfer,
such Old Capital Securities will be credited to an account maintained at DTC),
without expense to the tendering Holder, promptly following the expiration or
termination of the Exchange Offer.
The undersigned understands that tenders of Old Capital Securities
pursuant to any one of the procedures described in "The Exchange Of-
fer--Procedures for Tendering Old Capital Securities" in the Prospectus and in
the instructions attached hereto will, upon the Corporation's and the Trust's
acceptance for exchange of such tendered Old Capital Securities, constitute a
binding agreement between the undersigned, the Corporation and the Trust upon
the terms and subject to the conditions of the Exchange Offer. The undersigned
recognizes that, under certain circumstances set forth in the Prospectus, the
Corporation and the Trust may not be required to accept for exchange any of the
Old Capital Securities tendered hereby.
Unless otherwise indicated herein in the box entitled "Special
Issuance Instructions" below, the undersigned hereby directs that the New
Capital Securities be issued in the name(s) of the undersigned or, in the case
of a book-entry transfer of Old Capital Securities, that such New Capital
Securities be credited to the account indicated above maintained at DTC. If
applicable, substitute Certificates representing Old Capital Securities not
exchanged or not accepted for exchange will be issued to the undersigned or, in
the case of a book-entry transfer of Old Capital Securities, will be credited
to the account indicated above maintained at DTC. Similarly, unless otherwise
indicated under "Special Delivery Instructions," please deliver New Capital
Securities to the undersigned at the address shown below the undersigned's
signature.
BY TENDERING OLD CAPITAL SECURITIES AND EXECUTING THIS LETTER OF
TRANSMITTAL OR EFFECTING DELIVERY OF AN AGENT'S MESSAGE IN LIEU THEREOF, THE
UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT (I) THE UNDERSIGNED IS NOT AN
"AFFILIATE" OF THE CORPORATION OR THE TRUST, (II) ANY NEW CAPITAL SECURITIES TO
BE RECEIVED BY THE UNDERSIGNED ARE BEING ACQUIRED IN THE ORDINARY COURSE OF ITS
BUSINESS, (III) THE UNDERSIGNED HAS NO ARRANGEMENT OR UNDERSTANDING WITH ANY
PERSON TO PARTICIPATE IN A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES
ACT) OF NEW CAPITAL SECURITIES TO BE RECEIVED IN THE EXCHANGE OFFER, AND (IV)
IF THE UNDERSIGNED IS NOT A BROKER-DEALER, THE UNDERSIGNED IS NOT ENGAGED IN,
AND DOES NOT INTEND TO ENGAGE IN, A DISTRIBUTION (WITHIN THE MEANING OF THE
SECURITIES ACT) OF SUCH NEW CAPITAL SECURITIES. BY TENDERING OLD CAPITAL
SECURITIES PURSUANT TO THE EXCHANGE OFFER AND EXECUTING THIS LETTER OF
TRANSMITTAL OR EFFECTING DELIVERY OF AN AGENT'S MESSAGE IN LIEU THEREOF, A
HOLDER OF OLD CAPITAL SECURITIES WHICH IS A BROKER-DEALER REPRESENTS AND
AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE LETTERS ISSUED BY THE STAFF OF THE
DIVISION OF CORPORATION FINANCE OF THE SECURITIES AND EXCHANGE COMMISSION TO
THIRD PARTIES, THAT (A) SUCH OLD CAPITAL SECURITIES HELD BY THE BROKER-DEALER
ARE HELD ONLY AS A NOMINEE, OR (B) SUCH OLD CAPITAL SECURITIES WERE ACQUIRED BY
SUCH BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES
OR OTHER TRADING ACTIVITIES AND IT WILL DELIVER THE PROSPECTUS (AS AMENDED OR
SUPPLEMENTED FROM TIME TO TIME) MEETING THE REQUIREMENTS OF THE SECURITIES ACT
IN CONNECTION WITH ANY RESALE OF SUCH NEW CAPITAL SECURITIES (PROVIDED THAT, BY
SO ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE
5
<PAGE> 6
DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER" WITHIN THE MEANING OF THE
SECURITIES ACT).
THE CORPORATION AND THE TRUST HAVE AGREED THAT, SUBJECT TO THE
PROVISIONS OF THE REGISTRATION RIGHTS AGREEMENT, THE PROSPECTUS, AS IT MAY BE
AMENDED OR SUPPLEMENTED FROM TIME TO TIME, MAY BE USED BY A PARTICIPATING
BROKER-DEALER (AS DEFINED BELOW) IN CONNECTION WITH RESALES OF NEW CAPITAL
SECURITIES RECEIVED IN EXCHANGE FOR OLD CAPITAL SECURITIES, WHERE SUCH OLD
CAPITAL SECURITIES WERE ACQUIRED BY SUCH PARTICIPATING BROKER-DEALER FOR ITS
OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING
ACTIVITIES, FOR A PERIOD ENDING 90 DAYS AFTER THE EXPIRATION DATE (SUBJECT TO
EXTENSION UNDER CERTAIN LIMITED CIRCUMSTANCES DESCRIBED IN THE PROSPECTUS) OR,
IF EARLIER, WHEN ALL SUCH NEW CAPITAL SECURITIES HAVE BEEN DISPOSED OF BY SUCH
PARTICIPATING BROKER-DEALER. IN THAT REGARD, EACH BROKER-DEALER WHO ACQUIRED
OLD CAPITAL SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR
OTHER TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER"), BY TENDERING SUCH
OLD CAPITAL SECURITIES AND EXECUTING THIS LETTER OF TRANSMITTAL OR EFFECTING
DELIVERY OF AN AGENT'S MESSAGE IN LIEU THEREOF, AGREES THAT, UPON RECEIPT OF
NOTICE FROM THE CORPORATION OR THE TRUST OF THE OCCURRENCE OF ANY EVENT OR THE
DISCOVERY OF ANY FACT WHICH MAKES ANY STATEMENT CONTAINED OR INCORPORATED BY
REFERENCE IN THE PROSPECTUS UNTRUE IN ANY MATERIAL RESPECT OR WHICH CAUSES THE
PROSPECTUS TO OMIT TO STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE
STATEMENTS CONTAINED OR INCORPORATED BY REFERENCE THEREIN, IN LIGHT OF THE
CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING OR OF THE OCCURRENCE
OF CERTAIN OTHER EVENTS SPECIFIED IN THE REGISTRATION RIGHTS AGREEMENT, SUCH
PARTICIPATING BROKER-DEALER WILL SUSPEND THE SALE OF NEW CAPITAL SECURITIES
PURSUANT TO THE PROSPECTUS UNTIL THE CORPORATION AND THE TRUST HAVE AMENDED OR
SUPPLEMENTED THE PROSPECTUS TO CORRECT SUCH MISSTATEMENT OR OMISSION AND HAVE
FURNISHED COPIES OF THE AMENDED OR SUPPLEMENTED PROSPECTUS TO THE PARTICIPATING
BROKER-DEALER OR THE CORPORATION OR THE TRUST HAS GIVEN NOTICE THAT THE SALE OF
THE NEW CAPITAL SECURITIES MAY BE RESUMED, AS THE CASE MAY BE. IF THE
CORPORATION OR THE TRUST GIVES SUCH NOTICE TO SUSPEND THE SALE OF THE NEW
CAPITAL SECURITIES, THEY SHALL EXTEND THE 90-DAY PERIOD REFERRED TO ABOVE
DURING WHICH PARTICIPATING BROKER-DEALERS ARE ENTITLED TO USE THE PROSPECTUS IN
CONNECTION WITH THE RESALE OF NEW CAPITAL SECURITIES BY THE NUMBER OF DAYS
DURING THE PERIOD FROM AND INCLUDING THE DATE OF THE GIVING OF SUCH NOTICE TO
AND INCLUDING THE DATE WHEN PARTICIPATING BROKER-DEALERS SHALL HAVE RECEIVED
COPIES OF THE SUPPLEMENTED OR AMENDED PROSPECTUS NECESSARY TO PERMIT RESALES OF
THE NEW CAPITAL SECURITIES OR TO AND INCLUDING THE DATE ON WHICH THE
CORPORATION OR THE TRUST HAS GIVEN NOTICE THAT THE SALE OF NEW CAPITAL
SECURITIES MAY BE RESUMED, AS THE CASE MAY BE.
AS A RESULT, A PARTICIPATING BROKER-DEALER WHO INTENDS TO USE THE
PROSPECTUS IN CONNECTION WITH RESALES OF NEW CAPITAL SECURITIES RECEIVED IN
EXCHANGE FOR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER MUST NOTIFY
THE CORPORATION AND THE TRUST, OR CAUSE THE CORPORATION AND THE TRUST TO BE
NOTIFIED, ON OR PRIOR TO THE EXPIRATION DATE, THAT IT IS A PARTICIPATING
BROKER-DEALER. SUCH NOTICE MAY BE GIVEN IN THE SPACE PROVIDED ABOVE OR MAY BE
DELIVERED TO THE EXCHANGE AGENT AT THE ADDRESS SET FORTH IN THE PROSPECTUS
UNDER "THE EXCHANGE OFFER--EXCHANGE AGENT."
Holders of Old Capital Securities whose Old Capital Securities are
accepted for exchange will not receive Distributions on such Old Capital
Securities and the undersigned waives the right to receive any Distributions on
such Old Capital Securities accumulated from and including March 25, 1997.
Accordingly, Holders of New Capital Securities as of the record date for the
payment of Distributions on June 15, 1997 will be entitled to Distributions
accumulated from and including March 25, 1997.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Corporation or the Trust to be necessary or desirable
to complete the sale, assignment and transfer of the Old Capital Securities
tendered hereby. All authority herein conferred or agreed to be conferred in
this Letter
6
<PAGE> 7
of Transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned. Except as
stated in the Prospectus, this tender is irrevocable.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD
CAPITAL SECURITIES" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE
TENDERED THE OLD CAPITAL SECURITIES AS SET FORTH IN SUCH BOX.
- --------------------------------------------------------------------------------
HOLDER(S) SIGN HERE
(SEE INSTRUCTIONS 2, 5 AND 6)
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON PAGE 14)
(NOTE: SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED
BY INSTRUCTION 2)
Must be signed by registered Holder(s) exactly as name(s) appear(s) on
Certificate(s) for the Old Capital Securities hereby tendered or on the
register of Holders maintained by the Trust, or by any person(s) authorized to
become the registered Holder(s) by endorsements and documents transmitted
herewith (including such opinions of counsel, certifications and other
information as may be required by the Trust or the Trustee for the Old Capital
Securities to comply with the restrictions on transfer applicable to the Old
Capital Securities). If signature is by an attorney-in-fact, executor,
administrator, trustee, guardian, officer of a corporation or another acting in
a fiduciary capacity or representative capacity, please set forth the signer's
full title. See Instruction 5.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF HOLDER(S))
Date: , 1997
-------------------------------------------------------
Name(s)
-------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title)
-----------------------------------------------------------
Address
-------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number
--------------------------------------------------
- --------------------------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER(S))
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GUARANTEE OF SIGNATURE(S)
7
<PAGE> 8
(IF REQUIRED, SEE INSTRUCTIONS 2 AND 5)
- --------------------------------------------------------------------------------
(AUTHORIZED SIGNATURE)
Date: , 1997
-------------------------------------------------------
Name of Firm
--------------------------------------------------------------------
Capacity (full title)
-----------------------------------------------------------
(PLEASE PRINT)
Address
-------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
8
<PAGE> 9
Area Code and Telephone Number
--------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if New Capital Securities or Old Capital
Securities not tendered are to be issued in the name of
someone other than the registered Holder of the Old Capital
Securities whose name(s) appear(s) above.
Issue
[ ] Old Capital Securities not tendered to:
[ ] New Capital Securities to:
Name(s)
-------------------------------------------------------------------------
Address
-------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and
Telephone Number
----------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if New Capital Securities or Old Capital
Securities not tendered are to be sent to someone other than
the registered Holder of the Old Capital Securities whose
name(s) appear(s) above, or such registered Holder(s) at an
address other than that shown above.
Mail
[ ] Old Capital Securities not tendered to:
[ ] New Capital Securities to:
Name(s)
-------------------------------------------------------------------------
Address
-------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and
Telephone Number
----------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9
<PAGE> 10
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES;
GUARANTEED DELIVERY PROCEDURES. This Letter of Transmittal is to be completed
either if (a) Certificates are to be forwarded herewith or (b) tenders are to
be made pursuant to the procedures for tender by book-entry transfer set forth
in "The Exchange Offer--Procedures for Tendering Old Capital Securities" in the
Prospectus and an Agent's Message is not delivered. Certificates, or timely
confirmation of a book-entry transfer of such Old Capital Securities into the
Exchange Agent's account at DTC, as well as this Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, and any other documents required by this Letter of
Transmittal, must be received by the Exchange Agent at its address set forth
herein on or prior to the Expiration Date. Tenders by book-entry transfer may
also be made by delivering an Agent's Message in lieu thereof. Old Capital
Securities may be tendered in whole or in part in the principal amount of
$100,000 (100 Capital Securities) and integral multiples of $1,000 in excess
thereof, provided that, if any Old Capital Securities are tendered for exchange
in part, the untendered principal amount thereof must be $100,000 (100 Capital
Securities) or any integral multiple of $1,000 in excess thereof.
Holders who wish to tender their Old Capital Securities and
(i) whose Old Capital Securities are not immediately available or (ii) who
cannot deliver their Old Capital Securities, this Letter of Transmittal and all
other required documents to the Exchange Agent on or prior to the Expiration
Date or (iii) who cannot complete the procedures for delivery by book-entry
transfer on a timely basis, may tender their Old Capital Securities by properly
completing and duly executing a Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedures set forth in "The Exchange Offer--Procedures for
Tendering Old Capital Securities" in the Prospectus. Pursuant to such
procedures: (i) such tender must be made by or through an Eligible Institution
(as defined below); (ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form made available by the Trust,
must be received by the Exchange Agent on or prior to the Expiration Date; and
(iii) the Certificates (or a book-entry confirmation (as defined in this
Prospectus)) representing all tendered Old Capital Securities, in proper form
for transfer, together with a Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees
and any other documents required by this Letter of Transmittal, must be
received by the Exchange Agent within three New York Stock Exchange, Inc.
trading days after the date of execution of such Notice of Guaranteed Delivery,
all as provided in "The Exchange Offer--Procedures for Tendering Old Capital
Securities" in the Prospectus.
The Notice of Guaranteed Delivery may be delivered by hand or
transmitted by facsimile or mail to the Exchange Agent, and must include a
guarantee by an Eligible Institution in the form set forth in such Notice. For
Old Capital Securities to be properly tendered pursuant to the guaranteed
delivery procedure, the Exchange Agent must receive a Notice of Guaranteed
Delivery on or prior to the Expiration Date. As used herein and in the
Prospectus, "Eligible Institution" means a firm or other entity identified in
Rule 17Ad-15 under the Exchange Act as "an eligible guarantor institution,"
including (as such terms are defined therein) (i) a bank; (ii) a broker,
dealer, municipal securities broker or dealer or government securities broker
or dealer; (iii) a credit union; (iv) a national securities exchange,
registered securities association or clearing agency; or (v) a savings
association, with membership and an approved signature guarantee medallion
program that is a participant in a Securities Transfer Association.
10
<PAGE> 11
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF
THE TENDERING HOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY
RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Neither the Corporation nor the Trust will accept any
alternative, conditional or contingent tenders. Each tendering Holder, by
execution of a Letter of Transmittal (or facsimile thereof), waives any right
to receive any notice of the acceptance of such tender.
2. GUARANTEE OF SIGNATURES. No signature guarantee on this
Letter of Transmittal is required if:
(i) this Letter of Transmittal is signed
by the registered Holder (which term, for purposes of this document,
shall include any participant in DTC whose name appears on a security
position listing as the owner of the Old Capital Securities (the
"Holder")) of Old Capital Securities tendered herewith, unless such
Holder(s) has completed either the box entitled "Special Issuance
Instructions" or the box entitled "Special Delivery Instructions"
above, or
(ii) such Old Capital Securities are
tendered for the account of a firm that is an Eligible Institution.
In all other cases, an Eligible Institution must guarantee the
signature(s) on this Letter of Transmittal. See Instruction 5.
3. INADEQUATE SPACE. If the space provided in the box
captioned "Description of Old Capital Securities" is inadequate, the
Certificate number(s) and/or the principal amount of Old Capital Securities and
any other required information should be listed on a separate signed schedule
which is attached to this Letter of Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Old
Capital Securities will be accepted only in the principal amount of $100,000
(100 Capital Securities) and integral multiples of $1,000 in excess thereof,
provided that if any Old Capital Securities are tendered for exchange in part,
the untendered principal amount thereof must be $100,000 (100 Capital
Securities) or any integral multiple of $1,000 in excess thereof. If less than
all the Old Capital Securities evidenced by any Certificate submitted are to be
tendered, fill in the principal amount of Old Capital Securities which are to
be tendered in the box entitled "Principal Amount of Old Capital Securities
Tendered." In such case, new Certificate(s) for the remainder of the Old
Capital Securities that were evidenced by your old Certificate(s) will only be
sent to the Holder of the Old Capital Security, promptly after the Expiration
Date. All Old Capital Securities represented by Certificates delivered to the
Exchange Agent will be deemed to have been tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Old Capital
Securities may be withdrawn at any time on or prior to the Expiration Date. In
order for a withdrawal to be effective on or prior to that time, a written,
telegraphic, telex or facsimile transmission of such notice of withdrawal must
be timely received by the Exchange Agent at one of its addresses set forth
above or in the Prospectus on or prior to the Expiration Date. Any such notice
of withdrawal must specify the name of the person who tendered the Old Capital
Securities to be withdrawn, the aggregate principal amount of Old Capital
Securities to be withdrawn, and (if Certificates for Old Capital Secu-
11
<PAGE> 12
rities have been tendered) the name of the registered Holder of the Old Capital
Securities as set forth on the Certificate for the Old Capital Securities, if
different from that of the person who tendered such Old Capital Securities. If
Certificates for the Old Capital Securities have been delivered or otherwise
identified to the Exchange Agent, then prior to the physical release of such
Certificates for the Old Capital Securities, the tendering Holder must submit
the serial numbers shown on the particular Certificates for the Old Capital
Securities to be withdrawn and the signature on the notice of withdrawal must
be guaranteed by an Eligible Institution, except in the case of Old Capital
Securities tendered for the account of an Eligible Institution. If Old Capital
Securities have been tendered pursuant to the procedures for book-entry
transfer set forth in the Prospectus under "The Exchange Offer--Procedures for
Tendering Old Capital Securities," the notice of withdrawal must specify the
name and number of the account at DTC to be credited with the withdrawal of Old
Capital Securities, in which case a notice of withdrawal will be effective if
delivered to the Exchange Agent by written, telegraphic, telex or facsimile
transmission. Withdrawals of tenders of Old Capital Securities may not be
rescinded. Old Capital Securities properly withdrawn will not be deemed
validly tendered for purposes of the Exchange Offer, but may be retendered at
any subsequent time on or prior to the Expiration Date by following any of the
procedures described in the Prospectus under "The Exchange Offer--Procedures
for Tendering Old Capital Securities."
All questions as to the validity, form and eligibility
(including time of receipt) of such withdrawal notices will be determined by
the Corporation and the Trust, in their sole discretion, whose determination
shall be final and binding on all parties. Neither the Corporation, the Trust,
any affiliates or assigns of the Corporation or the Trust, the Exchange Agent
nor any other person shall be under any duty to give any notification of any
irregularities in any notice of withdrawal or incur any liability for failure
to give any such notification. Any Old Capital Securities which have been
tendered but which are withdrawn will be returned to the Holder thereof without
cost to such Holder promptly after withdrawal.
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND
ENDORSEMENTS. If this Letter of Transmittal is signed by the registered
Holder(s) of the Old Capital Securities tendered hereby, the signature(s) must
correspond exactly with the name(s) as written on the face of the
Certificate(s) without alteration, enlargement or any change whatsoever.
If any of the Old Capital Securities tendered hereby are owned
of record by two or more joint owners, all such owners must sign this Letter of
Transmittal.
If any tendered Old Capital Securities are registered in
different name(s) on several Certificates, it will be necessary to complete,
sign and submit as many separate Letters of Transmittal (or facsimiles thereof)
as there are different registrations of Certificates.
If this Letter of Transmittal or any Certificates or bond
powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing and must
submit proper evidence satisfactory to the Corporation and the Trust, in their
sole discretion, of each such person's authority so to act.
When this Letter of Transmittal is signed by the registered
owner(s) of the Old Capital Securities listed and transmitted hereby, no
endorsement(s) of Certificate(s) or separate bond power(s) are required unless
New Capital Securities are to be issued in the name of a person other than the
registered Holder(s). Signature(s) on such Certificate(s) or bond power(s)
must be guaranteed by an Eligible Institution.
12
<PAGE> 13
If this Letter of Transmittal is signed by a person other than
the registered owner(s) of the Old Capital Securities listed, the Certificates
must be endorsed or accompanied by appropriate bond powers, signed exactly as
the name or names of the registered owner(s) appear(s) on the Certificates, and
also must be accompanied by such opinions of counsel, certifications and other
information as the Corporation, the Trust or the Trustee for the Old Capital
Securities may require in accordance with the restrictions on transfer
applicable to the Old Capital Securities. Signatures on such Certificates or
bond powers must be guaranteed by an Eligible Institution.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If New
Capital Securities are to be issued in the name of a person other than the
signer of this Letter of Transmittal, or if New Capital Securities are to be
sent to someone other than the signer of this Letter of Transmittal or to an
address other than that shown above, the appropriate boxes on this Letter of
Transmittal should be completed. Certificates for Old Capital Securities not
exchanged will be returned by mail or, if tendered by book-entry transfer, by
crediting the account indicated above maintained at DTC. See Instruction 4.
7. IRREGULARITIES. The Corporation and the Trust will
determine, in their sole discretion, all questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange
of any tender of Old Capital Securities, which determination shall be final and
binding on all parties. The Corporation and the Trust reserve the absolute
right to reject any and all tenders determined by either of them not to be in
proper form or the acceptance of which, or exchange for which, may, in the view
of counsel to the Corporation and the Trust be unlawful. The Corporation and
the Trust also reserve the absolute right, subject to applicable law, to waive
any of the conditions of the Exchange Offer set forth in the Prospectus under
"The Exchange Offer--Conditions to the Exchange Offer" or any conditions or
irregularity in any tender of Old Capital Securities of any particular Holder
whether or not similar conditions or irregularities are waived in the case of
other Holders. The Corporation's and the Trust's interpretation of the terms
and conditions of the Exchange Offer (including this Letter of Transmittal and
the instructions hereto) will be final and binding. No tender of Old Capital
Securities will be deemed to have been validity made until all irregularities
with respect to such tender have been cured or waived. The Corporation, the
Trust, any affiliates or assigns of the Corporation, the Trust, the Exchange
Agent, or any other person shall not be under any duty to give notification of
any irregularities in tenders or incur any liability for failure to give such
notification.
8. QUESTIONS, REQUESTS FOR THE ASSISTANCE AND ADDITIONAL
COPIES. Questions and requests for assistance may be directed to the Exchange
Agent at its address and telephone number set forth on the front of this Letter
of Transmittal. Additional copies of the Prospectus, the Notice of Guaranteed
Delivery and the Letter of Transmittal may be obtained from the Exchange Agent
or from your broker, dealer, commercial bank, trust company or other nominee.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under the
U.S. Federal income tax law, a Holder whose tendered Old Capital Securities are
accepted for exchange is required to provide the Exchange Agent with such
Holder's correct taxpayer identification number ("TIN") on Substitute Form W-9
below. If the Exchange Agent is not provided with the correct TIN, the
Internal Revenue Service (the "IRS") may subject the Holder or other payee to a
$50 penalty. In addition, payments to such Holders or other payees with
respect to Old Capital Securities exchanged pursuant to the Exchange Offer may
be subject to 31% backup withholding.
The box in Part 3 of the Substitute Form W-9 may be checked if
the tendering Holder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is
13
<PAGE> 14
checked, the Holder or other payee must also complete the Certificate of
Awaiting Taxpayer Identification Number below in order to avoid backup
withholding. Notwithstanding that the box in Part 3 is checked and the
Certificate of Awaiting Taxpayer Identification Number is completed, the
Exchange Agent will withhold 31% of all payments made prior to the time a
properly certified TIN is provided to the Exchange Agent. The Exchange Agent
will retain such amounts withheld during the 60-day period following the date
of the Substitute Form W-9. If the Holder furnishes the Exchange Agent with
its TIN within 60 days after the date of the Substitute Form W-9, the amounts
retained during the 60-day period will be remitted to the Holder and no further
amounts shall be retained or withheld from payments made to the Holder
thereafter. If, however, the Holder has not provided the Exchange Agent with
its TIN within such 60-day period, amounts withheld will be remitted to the IRS
as backup withholding. In addition, 31% of all payments made thereafter will
be withheld and remitted to the IRS until a correct TIN is provided.
The Holder is required to give the Exchange Agent the TIN
(e.g., social security number or employer identification number) of the
registered owner of the Old Capital Securities or of the last transferee
appearing on the transfers attached to, or endorsed on, the Old Capital
Securities. If the Old Capital Securities are registered in more than one name
or are not in the name of the actual owner, consult the enclosed "Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional guidance on which number to report.
Certain Holders (including, among others, corporations,
financial institutions and certain foreign persons) may not be subject to these
backup withholding and reporting requirements. Such Holders should
nevertheless complete the attached Substitute Form W-9 below, and write
"exempt" on the face thereof, to avoid possible erroneous backup withholding.
A foreign person may qualify as an exempt recipient by submitting a properly
completed IRS Form W-8, signed under penalties of perjury, attesting to that
Holder's exempt status. Please consult the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional guidance on which Holders are exempt from backup withholding.
Backup withholding is not an additional U.S. Federal income
tax. Rather, the U.S. Federal income tax liability of a person subject to
backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained.
10. WAIVER OF CONDITIONS. The Corporation and the Trust
reserve the absolute right to waive satisfaction of any or all conditions
enumerated in the Prospectus.
11. NO CONDITIONAL TENDERS. No alternative, conditional or
contingent tenders will be accepted. All tendering Holders of Old Capital
Securities, by execution of this Letter of Transmittal, shall waive any right
to receive notice of the acceptance of Old Capital Securities for exchange.
Neither the Corporation, the Trust, the Exchange Agent nor any other
person is obligated to give notice of any defect or irregularity with respect
to any tender of Old Capital Securities nor shall any of them incur any
liability for failure to give any such notice.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any
Certificate(s) representing Old Capital Securities have been lost, destroyed or
stolen, the Holder should promptly notify the Exchange Agent. The Holder will
then be instructed as to the steps that must be taken in order to replace the
Certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, destroyed or stolen
Certificate(s) have been followed.
14
<PAGE> 15
13. SECURITY TRANSFER TAXES. Holders who tender their Old
Capital Securities for exchange will not be obligated to pay any transfer taxes
in connection therewith. If, however, New Capital Securities are to be
delivered to, or are to be issued in the name of, any person other than the
registered Holder of the Old Capital Securities tendered, or if a transfer tax
is imposed for any reason other than the exchange of Old Capital Securities in
connection with the Exchange Offer, then the amount of any such transfer tax
(whether imposed on the registered Holder or any other persons) will be payable
by the tendering Holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with the Letter of Transmittal, the amount
of such transfer taxes will be billed directly to such tendering Holder.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF)
AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE
EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE.
TO BE COMPLETED BY ALL TENDERING SECURITYHOLDERS
(See Instruction 9)
PAYOR'S NAME: THE FIRST NATIONAL BANK OF CHICAGO
<TABLE>
<S><C>
- ------------------------------------------------------------------------------------------------------------
PART 1 -- PLEASE PROVIDE
YOUR TIN ON THE LINE AT
SUBSTITUTE RIGHT AND CERTIFY BY
SIGNING AND DATING ---------------------------------------------------
BELOW. Social Security Number
OR
FORM W-9
---------------------------------------------------
Employer Identification Number
--------------------------------------------------------------------------------
DEPARTMENT OF PART 2 CERTIFICATION -- UNDER THE PENALTIES OF PART 3
THE TREASURY, INTERNAL PERJURY, I CERTIFY THAT: (1) the number shown on
REVENUE SERVICE this form is my correct taxpayer identification
number (or I am waiting for a number to be issued
to me). (2) I am not subject to backup withholding Check if
PAYOR'S REQUEST FOR either because (i) I am exempt from backup withhol- TIN Applied For [ ]
TAXPAYER IDENTIFICATION ding, (ii) I have not been notified by the Internal
NUMBER ("TIN") AND Revenue Service ("IRS") that I am subject to backup
CERTIFICATION withholding as a result of a failure to report all
interest or dividends, or (iii) the IRS has
notified me that I am no longer subject to backup
withholding, and (3) any other information provided
on this form is true and correct.
Signature
----------------------------------------
Date , 1997
------------------
--------------------------------------------------
You must cross out item (iii) in Part (2) above if
you have been notified by the IRS that you are
subject to backup withholding because of under-
reporting interest or dividends on your tax return
and you have not been notified by the IRS that you
are no longer subject to backup withholding.
- ------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES
RESULT IN BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT TO THE
EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
THE SUBSTITUTE FORM W-9
15
<PAGE> 16
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (2)
I intend to mail or deliver an application in the near future. I understand
that if I do not provide a taxpayer identification number by the time of
payment, 31% of all payments made to me on account of the New Capital
Securities shall be retained until I provide a taxpayer identification number
to the Exchange Agent and that, if I do not provide my taxpayer identification
number within 60 days, such retained amounts shall be remitted to the Internal
Revenue Service as backup withholding and 31% of all reportable payments made
to me thereafter will be withheld and remitted to the Internal Revenue Service
until I provide a taxpayer identification number.
Signature Date ,1997
------------------------------------------------ ---------
16
<PAGE> 1
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
9.35% SERIES A CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
OF
AMCORE CAPITAL TRUST I
FULLY AND UNCONDITIONALLY GUARANTEED BY
AMCORE FINANCIAL, INC.
This Notice of Guaranteed Delivery, or one substantially equivalent to
this form, must be used to accept the Exchange Offer (as defined below) if (i)
certificates for the Trust's (as defined below) 9.35% Series A Capital
Securities (the "Old Capital Securities") are not immediately available, (ii)
Old Capital Securities, the Letter of Transmittal and all other required
documents cannot be delivered to The First National Bank of Chicago (the
"Exchange Agent") on or prior to the Expiration Date (as defined in the
Prospectus referred to below) or (iii) the procedures for delivery by
book-entry transfer cannot be completed on a timely basis. This Notice of
Guaranteed Delivery may be delivered by hand, overnight courier or mail, or
transmitted by facsimile transmission, to the Exchange Agent. See "The
Exchange Offer -- Procedures for Tendering Old Capital Securities" in the
Prospectus. In addition, in order to utilize the guaranteed delivery procedure
to tender Old Capital Securities pursuant to the Exchange Offer, a completed,
signed and dated Letter of Transmittal relating to the Old Capital Securities
(or facsimile thereof) must also be received by the Exchange Agent on or prior
to the Expiration Date. Capitalized terms not defined herein have the meanings
assigned to them in the Prospectus.
The Exchange Agent For The Exchange Offer Is:
The First National Bank of Chicago
Fascimile Transmissions
By Hand, Overnight Delivery or (Eligible Institutions Only)
By Registered or Certified Mail: (212) 240-8938
The First National Bank of To Confirm by Telephone
Chicago or for Information Call:
c/o First Chicago Trust Company (212) 240-8801
of New York
8th Floor, Window 2
New York, NY 10005
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER
THAN AS SET FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY
VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A
VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO
GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO
BE GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to AMCORE Capital Trust I, a Delaware
business trust (the "Trust") and to AMCORE Financial, Inc., a Nevada
corporation (the "Corporation"), upon the terms and subject to the conditions
set forth in the Prospectus dated _____ ___, 1997 (as the same may be amended
or supplemented from time to time, the "Prospectus"), and the related Letter of
Transmittal (which together constitute the "Exchange Offer"), receipt of which
is hereby acknowledged, the aggregate principal amount of Old Capital
Securities set forth below pursuant to the guaranteed delivery procedures set
forth in the Prospectus under the caption "The Exchange Offer -- Procedures for
Tendering Old Capital Securities."
Aggregate Liquidation Amount Name(s) of Registered Holder(s):
--------
Amount Tendered: $ *
---------------- -------------------------------------
Certificate No(s) (if available):
---------------------------
- ------------------------------------------------------------
(Total Liquidation Amount Represented by
Old Capital Securities Certificate(s)
$
- ------------------------------------------------------------
If Old Capital Securities will be tendered by book-entry transfer,
provide the following information:
DTC Account Number:
------------------------------------
Date:
-------------------------------------------------------
- ----------------
* Must be in denominations of a Liquidation Amount of $1,000 and any
integral multiple thereof, and not less than $100,000 aggregate
Liquidation Amount.
- --------------------------------------------------------------------------------
All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the undersigned and every obligation of the
undersigned hereunder shall be binding upon the heirs, personal
representatives, successors and assigns of the undersigned.
- --------------------------------------------------------------------------------
PLEASE SIGN HERE
X
------------------------------------ ---------------------------------------
X
------------------------------------ ---------------------------------------
Signature(s) of Owner(s) Date
or Authorized Signatory
Area Code and Telephone Number:
---------------------------------
Must be signed by the holder(s) of the Old Capital Securities as their
name(s) appear(s) on certificates for Old Capital Securities or on a security
position listing, or by person(s) authorized to become registered holder(s) by
endorsement and documents transmitted with this Notice of Guaranteed Delivery.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must set forth his or her full title
below.
2
<PAGE> 3
Please print name(s) and address(es)
Name(s):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
Capacity:
----------------------------------------------------------------------
Address(es):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
GUARANTEE OF DELIVERY
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity identified in Rule 17Ad-15
under the Securities Exchange Act of 1934, as amended, as an "eligible
guarantor institution," including (as such terms are defined therein): (i) a
bank; (ii) a broker, dealer, municipal securities broker, municipal securities
dealer, government securities broker or government securities dealer; (iii) a
credit union; (iv) a national securities exchange, registered securities
association or learning agency; or (v) a savings association that is a
participant in a Securities Transfer Association recognized program (each of
the foregoing being referred to as an "Eligible Institution"), hereby
guarantees to deliver to the Exchange Agent, at one of its addresses set forth
above, either the Old Capital Securities tendered hereby in proper form for
transfer, or confirmation of the book-entry transfer of such Old Capital
Securities to the Exchange Agent's account at The Depository Trust Company
("DTC"), pursuant to the procedures for book-entry transfer set forth in the
Prospectus, in either case together with one or more properly completed and
duly executed Letter(s) of Transmittal (or facsimile thereof) and any other
required documents within three business days after the date of execution of
this Notice of Guaranteed Delivery.
The undersigned acknowledges that it must deliver the Letter(s) of
Transmittal and the Old Capital Securities tendered hereby to the Exchange
Agent within the time period set forth above and that failure to do so could
result in a financial loss to the undersigned.
- -------------------------------------- ------------------------------------
Name of Firm Authorized Signature
- -------------------------------------- ------------------------------------
Address Title
- -------------------------------------- ------------------------------------
Zip Code (Please Type or Print)
Area Code and Telephone No. Dated:
-------------------------- ----------------
NOTE: DO NOT SEND CERTIFICATES FOR OLD CAPITAL SECURITIES WITH THIS FORM.
CERTIFICATES FOR OLD CAPITAL SECURITIES SHOULD ONLY BE SENT WITH YOUR LETTER OF
TRANSMITTAL.
3
<PAGE> 1
EXHIBIT 99.3
_____ ___, 1997
EXCHANGE AGENT AGREEMENT
The First National Bank of Chicago
One First National Plaza
Chicago, IL 60670
Ladies and Gentlemen:
AMCORE Capital Trust I, a business trust formed under the laws of the
State of Delaware (the "Trust"), proposes to make an offer (the "Exchange
Offer") to exchange its 9.35% Series A Capital Securities (Liquidation Amount
$1,000 per Capital Security) (the "Old Securities") for its 9.35% Series B
Capital Securities (Liquidation Amount $1,000 per Capital Security) (the "New
Securities"). All of the beneficial interests represented by common securities
of the Trust are owned by AMCORE Financial, Inc., a Nevada corporation (the
"Corporation"). The terms and conditions of the Exchange Offer as currently
contemplated are set forth in a prospectus, dated _____ __, 1997 (the
"Prospectus"), to be distributed to all record holders of the Old Securities.
The Old Securities and the New Securities are collectively referred to herein
as the "Securities."
The Trust hereby appoints The First National Bank of Chicago to act as
exchange agent (the "Exchange Agent") in connection with the Exchange Offer.
References hereinafter to "you" shall refer to The First National Bank of
Chicago.
The Exchange Offer is expected to be commenced by the Trust on or about
_____ ___, 1997. The Letter of Transmittal accompanying the Prospectus (or in
the case of book entry securities, the ATOP system) is to be used by the
holders of the Old Securities to accept the Exchange Offer and contains
instructions with respect to (i) the delivery of certificates for Old
Securities
<PAGE> 2
The First National Bank of Chicago
_____ ___, 1997
Page 2
tendered in connection therewith and (ii) the book entry transfer of Securities
to the Exchange Agent's account.
The Exchange Offer shall expire at 5:00 P.M., New York City time, on
_____ ___, 1997 or on such later date or time to which the Trust may extend the
Exchange Offer (the "Expiration Date"). Subject to the terms and conditions
set forth in the Prospectus, the Trust expressly reserves the right to extend
the Exchange Offer from time to time by giving oral (to be confirmed in
writing) or written notice to you before 9:00 A.M., New York City time, on the
business day following the previously scheduled Expiration Date.
The Trust expressly reserves the right to amend or terminate the
Exchange Offer, and not to accept for exchange any Old Securities not
theretofore accepted for exchange, upon the occurrence of any of the conditions
of the Exchange Offer specified in the Prospectus under the caption "The
Exchange Offer -- Conditions to the Exchange Offer." The Trust will give
oral (confirmed in writing) or written notice of any amendment, termination or
nonacceptance of Old Securities to you promptly after any amendment,
termination or nonacceptance.
In carrying out your duties as Exchange Agent, you are to act in
accordance with the following instructions:
1. You will perform such duties and only such duties as are
specifically set forth in the section of the Prospectus captioned "The Exchange
Offer" or as specifically set forth herein; provided, however, that in no way
will your general duty to act in good faith be discharged by the foregoing.
2. You will establish an account with respect to the Old Securities
at The Depository Trust Company (the "Book-Entry Transfer Facility") for
purposes of the Exchange Offer within two business days after the date of the
Prospectus, and any financial institution that is a participant in the
Book-Entry Transfer Facility's system
2
<PAGE> 3
The First National Bank of Chicago
_____ ___, 1997
Page 3
may make book-entry delivery of the Old Securities by causing the Book-Entry
Transfer Facility to transfer such Old Securities into your account in
accordance with the Book-Entry Transfer Facility's procedure for such transfer.
3. You are to examine each of the Letters of Transmittal and
certificates for Old Securities (or confirmation of book-entry transfer into
your account at the Book-Entry Transfer Facility) and any other documents
delivered or mailed to you by or for holders of the Old Securities to ascertain
whether: (i) the Letters of Transmittal and any such other documents are duly
executed and properly completed in accordance with instructions set forth
therein and (ii) the Old Securities have otherwise been properly tendered. In
each case where the Letter of Transmittal or any other document has been
improperly completed or executed or any of the certificates for Old Securities
are not in proper form for transfer or some other irregularity in connection
with the acceptance of the Exchange Offer exists, you will endeavor to inform
the presenters of the need for fulfillment of all requirements and to take any
other action as may be necessary or advisable to cause such irregularity to be
corrected.
4. With the approval of any Administrative Trustee of the Trust or any
person designated in writing by the Corporation (a "Designated Officer") (such
approval, if given orally, to be confirmed in writing) or any other party
designated by any such Administrative Trustee or Designated Officer in writing,
you are authorized to waive any irregularities in connection with any tender of
Old Securities pursuant to the Exchange Offer.
5. Tenders of Old Securities may be made only as set forth in the
Letter of Transmittal and in the section of the Prospectus captioned "The
Exchange Offer -- Procedures for Tendering Old Capital Securities," and Old
Securities shall be considered properly tendered to you only when tendered in
accordance with the procedures set forth therein.
3
<PAGE> 4
The First National Bank of Chicago
_____ ___, 1997
Page 4
Notwithstanding the provisions of this paragraph 5, Old Securities
which any Administrative Trustee of the Trust or Designated Officer of the
Corporation shall approve as having been properly tendered shall be considered
to be properly tendered (such approval, if given orally, shall be confirmed in
writing).
6. You shall advise the Trust and the Corporation with respect to any
Old Securities received subsequent to the Expiration Date and accept their
instructions with respect to disposition of such Old Securities.
7. You shall accept tenders:
(a) in cases where the Old Securities are registered in two or
more names only if signed by all named holders;
(b) in cases where the signing person (as indicated on the
Letter of Transmittal) is acting in a fiduciary or a representative capacity
only when proper evidence of such person's authority so to act is submitted; and
(c) from persons other than the registered holder of Old
Securities provided that customary transfer requirements, including any
applicable transfer taxes, are fulfilled.
You shall accept partial tenders of Old Securities where so indicated
and as permitted in the Letter of Transmittal and deliver certificates for Old
Securities to the transfer agent for split-up and return any untendered Old
Securities to the holder (or such other person as may be designated in the
Letter of Transmittal) as promptly as practicable after expiration or
termination of the Exchange Offer.
8. Upon satisfaction or waiver of all of the conditions to the
Exchange Offer, the Trust will notify you (such notice if given orally, to be
confirmed in writing) of its acceptance, promptly after the Expiration
4
<PAGE> 5
The First National Bank of Chicago
_____ ___, 1997
Page 5
Date, of all Old Securities properly tendered and you, on behalf of the Trust,
will exchange such Old Securities for New Securities and cause such Old
Securities to be canceled. Delivery of New Securities will be made on behalf
of the Trust by you at the rate of $1,000 liquidation amount of New Securities
for each $1,000 liquidation amount of the corresponding series of Old
Securities tendered promptly after notice (such notice if given orally, to be
confirmed in writing) of acceptance of said Old Securities by the Trust;
provided, however, that in all cases, Old Securities tendered pursuant to the
Exchange Offer will be exchanged only after timely receipt by you of
certificates for such Old Securities (or confirmation of book-entry transfer
into your account at the Book-Entry Transfer Facility), a properly completed
and duly executed Letter of Transmittal (or facsimile thereof) with any
required signature guarantees and any other required documents. You shall
issue New Securities only in denominations of $1,000 or any integral multiple
thereof. Old Capital Securities may be tendered in whole or in part in
denominations of $100,000 and integral multiples of $1,000 in excess thereof,
provided that if any Old Capital Securities are tendered for exchange in part,
the untendered principal amount thereof must be $100,000 or any integral
multiple of $1,000 in excess thereof.
9. Tenders pursuant to the Exchange Offer are irrevocable, except
that, subject to the terms and upon the conditions set forth in the Prospectus
and the Letter of Transmittal, Old Securities tendered pursuant to the Exchange
Offer may be withdrawn at any time on or prior to the Expiration Date.
10. The Trust shall not be required to exchange any Old Securities
tendered if any of the conditions set forth in the Exchange Offer are not met.
Notice of any decision by the Trust not to exchange any Old Securities tendered
shall be given orally (and confirmed in writing) by the Trust to you.
5
<PAGE> 6
The First National Bank of Chicago
_____ ___, 1997
Page 6
11. If, pursuant to the Exchange Offer, the Trust does not accept for
exchange all or part of the Old Securities tendered because of an invalid
tender, the occurrence of certain other events set forth in the Prospectus
under the caption "The Exchange Offer -- Conditions to the Exchange Offer"
or otherwise, you shall promptly after the expiration or termination of the
Exchange Offer return those certificates for unaccepted Old Securities (or
effect appropriate book-entry transfer), together with any related required
documents and the Letters of Transmittal relating thereto that are in your
possession, to the persons who deposited them.
12. All certificates for reissued Old Securities, unaccepted Old
Securities or for New Securities shall be forwarded by (a) first-class
certified mail, return receipt requested, under a blanket surety bond
protecting you and the Trust from loss or liability arising out of the
non-receipt or non-delivery of such certificates or (b) by registered mail
insured separately for the replacement value of each of such certificates.
13. You are not authorized to pay or offer to pay any concessions,
commissions or solicitation fees to any broker, dealer, bank or other persons
or to engage or utilize any person to solicit tenders.
14. As Exchange Agent hereunder you:
(a) shall have no duties or obligations other than those
specifically set forth in the section of the Prospectus captioned "The
Exchange Offer," the Letter of Transmittal or herein or as may be subsequently
agreed to in writing by you and the Trust;
(b) will be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value or genuineness of
any of the certificates or the Old Securities represented thereby deposited
with you pursuant to the Exchange Offer, and will not be required to and will
make no representation
6
<PAGE> 7
The First National Bank of Chicago
_____ ___, 1997
Page 7
as to the validity, value or genuineness of the Exchange Offer;
(c) shall not be obligated to take any legal action hereunder
which might in your reasonable judgment involve any expense or liability,
unless you shall have been furnished with reasonable indemnity;
(d) may reasonably rely on and shall be protected in acting in
reliance upon any certificate, instrument, opinion, notice, letter, telegram or
other document or security delivered to you and reasonably believed by you
to be genuine and to have been signed by the proper party or parties;
(e) may reasonably act upon any tender, statement, request,
agreement or other instrument whatsoever not only as to its due execution and
validity and effectiveness of its provisions, but also as to the truth
and accuracy of any information contained therein, which you shall in good
faith believe to be genuine or to have been signed or represented by a proper
person or persons;
(f) may rely on and shall be protected in acting upon written or
oral instructions from any Administrative Trustee of the Trust or from any
Designated Officer of the Corporation;
(g) may consult with your counsel with respect to any questions
relating to your duties and responsibilities and the advice or opinion of such
counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted to be taken by you hereunder
in good faith and in accordance with the advice or opinion of such counsel; and
(h) shall not advise any person tendering Old Securities
pursuant to the Exchange Offer as to the wisdom of making such tender or as to
the market value or decline or appreciation in market value of any Old
Securities.
7
<PAGE> 8
The First National Bank of Chicago
_____ ___, 1997
Page 8
15. You shall take such action as may from time to time be requested
by the Trust or its counsel or any Designated Officer of the Corporation (and
such other action as you may reasonably deem appropriate) to furnish copies of
the Prospectus, Letter of Transmittal and the Notice of Guaranteed Delivery (as
defined in the Prospectus) or such other forms as may be approved from time to
time by the Trust or the Corporation, to all persons requesting such documents
and to accept and comply with telephone requests for information relating to
the Exchange Offer, provided that such information shall relate only to the
procedures for accepting (or withdrawing from) the Exchange Offer. The Trust
will furnish you with copies of such documents at your request. All other
requests for information relating to the Exchange Offer shall be directed to
the Trust, Attention: John R. Hecht.
16. You shall advise by facsimile transmission or telephone, and
promptly thereafter confirm in writing to John R. Hecht of the Trust, and such
other person or persons as the Trust or the Corporation may request, daily (and
more frequently during the week immediately preceding the Expiration Date and
if otherwise requested) up to and including the Expiration Date, as to the
number of Old Securities which have been tendered pursuant to the Exchange
Offer and the items received by you pursuant to this Agreement, separately
reporting and giving cumulative totals as to items properly received and items
improperly received. In addition, you will also inform, and cooperate in
making available to, the Trust or the Corporation or any such other person or
persons upon oral request made from time to time on or prior to the Expiration
Date of such other information as it or such person reasonably requests. Such
cooperation shall include, without limitation, the granting by you to the Trust
or the Corporation and such person as the Trust or the Corporation may request
of access to those persons on your staff who are responsible for receiving
tenders, in order to ensure that immediately prior to the Expiration Date the
Trust or the Corporation shall have received information in sufficient detail
to enable it to decide whether to extend the Exchange Offer. You shall prepare
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a final list of all persons whose tenders were accepted, the aggregate
principal amount of Old Securities tendered, the aggregate principal amount of
Old Securities accepted and deliver said list to the Trust promptly after the
Expiration Date.
17. Letters of Transmittal and Notices of Guaranteed Delivery shall be
stamped by you as to the date and the time of receipt thereof and shall be
preserved by you for a period of time at least equal to the period of time you
preserve other records pertaining to the transfer of securities. You shall
dispose of unused Letters of Transmittal and other surplus materials by
returning them to the Trust at the address set forth below for notices.
18. You hereby expressly waive any lien, encumbrance or right of
set-off whatsoever that you may have with respect to funds deposited with you
for the payment of transfer taxes by reasons of amounts, if any, borrowed by
the Trust, or any of its subsidiaries or affiliates pursuant to any loan or
credit agreement with you or for compensation owed to you hereunder.
19. For services rendered as Exchange Agent hereunder, you shall be
entitled to such compensation as set forth on Schedule I attached hereto.
20. You hereby acknowledge receipt of the Prospectus and the Letter of
Transmittal and further acknowledge that you have examined each of them. Any
inconsistency between this Agreement, on the one hand, and the Prospectus and
the Letter of Transmittal (as they may be amended from time to time), on the
other hand, shall be resolved in favor of the latter two documents, except with
respect to the duties, liabilities and indemnification of you as Exchange
Agent, which shall be controlled by this Agreement.
21. (a) The Trust covenants and agrees to indemnify and hold you
harmless in your capacity as Exchange Agent hereunder against any loss,
liability,
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cost or expense, including reasonable attorneys' fees and expenses, arising out
of or in connection with any act, omission, delay or refusal made by you in
reliance upon any signature, endorsement, assignment, certificate, order,
request, notice, instruction or other instrument or document reasonably
believed by you to be valid, genuine and sufficient and in accepting any tender
or effecting any transfer of Old Securities reasonably believed by you in good
faith to be authorized, and in delaying or refusing in good faith to accept any
tenders or effect any transfer of Old Securities; provided, however, that the
Trust shall not be liable for indemnification or otherwise for any loss,
liability, cost or expense to the extent arising out of your gross negligence
or willful misconduct. In no case shall the Trust be liable under this
indemnity with respect to any claim against you unless the Trust shall be
notified by you, by letter or cable or by facsimile confirmed by letter, of the
written assertion of a claim against you or of any other action commenced
against you, promptly after you shall have received any such written assertion
or notice of commencement of action. The Trust shall be entitled to
participate at its own expense in the defense of any such claim or other
action, and, if the Trust so elects, the Trust may assume the defense of any
suit brought to enforce any such claim. In the event that the Trust shall
assume the defense of any such suit or threatened action in respect of which
indemnification may be sought hereunder, the Trust shall not be liable for the
fees and expenses of any additional counsel thereafter retained by you so long
as you consent to the Trust's retention of counsel, which consent may not be
unreasonably withheld; provided that the Trust shall not be entitled to assume
the defense of any such action if the named parties to such action include both
the Trust and you and representation of both parties by the same legal counsel
would, in the written opinion of counsel to you, be inappropriate due to actual
or potential conflicting interests between them. It is understood that the
Trust shall not be liable under this paragraph for the fees and expenses of
more than one legal counsel for you. In the event that the Trust shall assume
the defense of any such suit,
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the Trust shall not thereafter be liable for the fees and expenses of any
counsel retained by you.
(b) You agree that, without the prior written consent of the
Trust (which consent shall not be unreasonably withheld), you will not settle,
compromise or consent to the entry of any pending or threatened claim, action,
or proceeding in respect of which indemnification could be sought in accordance
with the indemnification provisions of this Agreement (whether or not you or
the Trust or any of its trustees, or controlling persons is an actual or
potential party to such claim, action or proceeding), unless such settlement,
compromise or consent includes an unconditional release of the Trust and its
trustees and controlling persons from all liability arising out of such claim,
action or proceeding.
22. You shall arrange to comply with all requirements under the tax
laws of the United States, including those relating to missing Tax
Identification Numbers, and shall file any appropriate reports with the
Internal Revenue Service. The Trust understands that you are required in
certain instances to deduct 31% with respect to interest paid on the New
Securities and proceeds from the sale, exchange, redemption or retirement of
the New Securities from holders who have not supplied their correct Taxpayer
Identification Number or required certification. Such funds will be turned
over to the Internal Revenue Service in accordance with applicable regulations.
23. You shall notify the Trust of the amount of any transfer taxes
payable in respect of the exchange of Old Securities and, upon receipt of
written approval from the Trust, you shall deliver or cause to be delivered, in
a timely manner to each governmental authority to which any transfer taxes are
payable in respect of the exchange of Old Securities, your check in the amount
of all transfer taxes so payable, and the Trust shall reimburse you for the
amount of any and all transfer taxes payable in respect of the exchange of Old
Securities; provided, however, that you shall reimburse the Trust for
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amounts refunded to you in respect of your payment of any such transfer taxes,
at such time as such refund is received by you.
24. This Agreement and your appointment as Exchange Agent hereunder
shall be construed and enforced in accordance with the laws of the State of New
York applicable to agreements made and to be performed entirely within such
state, and without regard to conflicts of law principles, and shall inure to
the benefit of, and the obligations created hereby shall be binding upon, the
successors and assigns of each of the parties hereto.
25. This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
26. In case any provision of this Agreement shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
27. This Agreement shall not be deemed or construed to be modified,
amended, rescinded, canceled or waived, in whole or in part, except by a
written instrument signed by a duly authorized representative of the party to
be charged. This Agreement may not be modified orally.
28. Unless otherwise provided herein, all notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
or similar writing) and shall be given to such party, addressed to it, at its
address or telecopy number set forth below:
If to the Trust:
AMCORE Capital Trust I
c/o AMCORE Financial, Inc.
501 Seventh Street
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Rockford, IL 61104
Facsimile: (815) 961-7728
Telephone: (815) 961-7171
Attention: John R. Hecht
If to the Exchange Agent:
The First National Bank of Chicago
One First National Plaza
Chicago, IL 60670
Facsimile: (312) 407-4653
Telephone: (312) 407-3344
Attention: Deborah Randle
29. Unless terminated earlier by the parties hereto, this Agreement
shall terminate 90 days following the Expiration Date. Notwithstanding the
foregoing, Paragraphs 19, 21 and 23 shall survive the termination of this
Agreement. Upon any termination of this Agreement, you shall promptly deliver
to the Trust any certificates for Securities, funds or property then held by
you as Exchange Agent under this Agreement.
30. This Agreement shall be binding and effective as of the date
hereof.
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Please acknowledge receipt of this Agreement and confirm the
arrangements herein provided by signing and returning the enclosed copy.
AMCORE CAPITAL TRUST I
By:
------------------------------------
Name: John R. Hecht
Title: Administrative Trustee
Accepted as the date
first above written:
THE FIRST NATIONAL BANK OF CHICAGO,
as Exchange Agent
By:
----------------------------
Name:
Title:
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