<PAGE>
FILED PURSUANT TO
PROSPECTUS SUPPLEMENT RULE 424(b)(5)
(To Prospectus Dated August 24, 1994) REGISTRATION NO. 33-57218
$125,000,000
[LOGO OF H.F. AHMANSON & CO. APPEARS HERE]
7.875% SUBORDINATED NOTES DUE SEPTEMBER 1, 2004
----------------
Interest on the H. F. Ahmanson & Company ("Ahmanson") 7.875% Subordinated
Notes due September 1, 2004 ("Notes") is payable semi-annually on March 1 and
September 1 of each year, commencing March 1, 1995. See "Description of Notes."
The Notes are unsecured obligations of Ahmanson and will be subordinate to
Senior Indebtedness (as defined) of Ahmanson. The Notes may not be redeemed
prior to maturity.
The Notes will be represented by one or more Global Securities registered in
the name of a nominee of The Depository Trust Company ("DTC"), as Depository.
The Notes will be available for purchase in denominations of $100,000 or any
amount in excess thereof which is an integral multiple of $1,000. Beneficial
interests in the Notes will be shown on, and transfers thereof will be effected
only through, records maintained by the participants of the Depository. Except
as described in "Description of Notes--Book-Entry" and "--Limitations on Rights
of Beneficial Holders," Notes in certificated form will not be issued in
exchange for the Global Securities. Settlement for the Notes will be made in
immediately available funds. The Notes will trade in the Depository's Same-Day
Funds Settlement System until maturity, and secondary market trading activity
in the Notes will therefore settle in immediately available funds. See
"Description of Notes--Same-Day Settlement and Payment."
----------------
THE NOTES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF ANY
SAVINGS BANK OR NON-BANK SUBSIDIARY OF AHMANSON ANDARE NOT INSURED BY
THE FEDERAL INSURANCE DEPOSIT CORPORATION, BANK INSURANCE FUND,
SAVINGS ASSOCIATION INSURANCE FUND OR ANY OTHER GOVERNMENT
AGENCY.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Price to Underwriting Proceeds to
Public(1) Discount(2) Ahmanson(1)(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note............................... 99.534% .600% 98.934%
- --------------------------------------------------------------------------------
Total.................................. $124,417,500 $750,000 $123,667,500
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from August 31, 1994.
(2) Ahmanson has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deducting expenses payable by Ahmanson estimated at $100,000.
----------------
The Notes offered by this Prospectus Supplement are offered by the
Underwriters, as specified herein, subject to prior sale, withdrawal,
cancellation or modification of the offer without notice, to delivery to and
acceptance by the Underwriters and to certain further conditions. It is
expected that the Notes will be ready for delivery through the book-entry
facilities of The Depository Trust Company on or about August 31, 1994.
----------------
LEHMAN BROTHERS
CS FIRST BOSTON
SMITH BARNEY INC.
August 24, 1994
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT LEVELS ABOVE THOSE THAT MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
SELECTED FINANCIAL DATA
The selected financial and other data presented below are qualified in their
entirety by reference to the consolidated financial statements of H. F.
Ahmanson & Company and Subsidiaries contained in the documents incorporated
herein by reference. See "Documents Incorporated by Reference" in the
Prospectus. Interim unaudited data at June 30, 1994 and for the six months
ended June 30, 1994 and 1993 reflect, in the opinion of management, all
adjustments consisting of normal recurring adjustments necessary for a fair
presentation of such data. Results for the six months ended June 30, 1994 are
not necessarily indicative of results that may be expected for the year.
Certain amounts in prior periods' financial statements have been reclassified
to conform to the current presentation.
<TABLE>
<CAPTION>
AT
JUNE 30, AT DECEMBER 31,
----------- ---------------------------------------------------------------
1994 1993 1992 1991 1990 1989
----------- ----------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
SUMMARY OF FINANCIAL
CONDITION:
Consolidated assets:
Cash, cash equivalents
and other
investment securi-
ties.................. $ 3,218,870 $ 3,906,044 $ 2,362,563 $ 1,738,561 $ 3,392,833 $ 3,424,092
Mortgage-backed secu-
rities ("MBS")........ 10,444,882 6,919,997 3,915,508 4,683,742 7,468,290 6,669,926
Loans receivable....... 35,748,937 37,704,368 38,962,875 37,875,795 37,466,738 33,066,199
Real estate............ 601,075 623,519 1,127,271 950,532 909,864 777,341
Premises and equip-
ment.................. 664,768 673,879 686,693 699,836 688,060 958,263
Goodwill............... 399,870 428,444 478,017 516,168 550,181 590,357
All other assets....... 514,979 614,994 607,580 761,553 725,041 771,056
----------- ----------- ----------- ----------- ----------- -----------
Total assets......... $51,593,381 $50,871,245 $48,140,507 $47,226,187 $51,201,007 $46,257,234
=========== =========== =========== =========== =========== ===========
Consolidated liabilities
and stockholders' equi-
ty:
Deposits............... $37,631,543 $38,018,653 $39,273,192 $39,147,126 $38,605,538 $34,236,239
Borrowings............. 9,897,733 8,879,345 4,978,583 4,135,922 8,989,538 8,224,320
All other liabilities.. 1,098,387 1,024,216 1,143,088 1,286,768 1,263,752 1,555,456
----------- ----------- ----------- ----------- ----------- -----------
Total liabilities.... 48,627,663 47,922,214 45,394,863 44,569,816 48,858,828 44,016,015
Stockholders' equity... 2,965,718 2,949,031 2,745,644 2,656,371 2,342,179 2,241,219
----------- ----------- ----------- ----------- ----------- -----------
Total liabilities and
stockholders' equi-
ty.................. $51,593,381 $50,871,245 $48,140,507 $47,226,187 $51,201,007 $46,257,234
=========== =========== =========== =========== =========== ===========
OTHER DATA (AT END OF
PERIOD):
Yield on loans and MBS.. 6.32% 6.50% 7.22% 9.04% 10.35% 10.87%
Yield on investments.... 4.92 3.83 3.48 5.49 8.96 8.64
Yield on earning assets. 6.25 6.33 7.09 8.96 10.27 10.73
Cost of deposits........ 3.14 3.14 3.60 5.38 7.34 7.65
Cost of borrowings...... 5.25 4.73 5.99 8.69 8.46 9.20
Cost of money(1)........ 3.58 3.44 3.87 5.70 7.55 7.95
Interest rate spread(2). 2.67 2.89 3.22 3.26 2.72 2.78
Net interest margin(3).. 2.75 2.95 3.21 3.27 2.71 2.77
Ratio of equity to total
assets................. 5.75 5.80 5.70 5.62 4.57 4.85
Home Savings' regulatory
capital ratios:
Tangible capital....... 5.00 4.97 4.85 4.34 3.43 3.48
Core capital........... 5.38 5.72 5.77 5.10 4.17 4.38
Risk-based capital..... 12.05 12.59 12.99 10.35 8.96 7.12
Adjustable rate mortgage
loans ("ARMs") as
percentage of loan
portfolio (including
MBS)................... 94.2 93.6 94.9 91.6 91.3 88.8
Loans serviced for in-
vestors................ $14,184,060 $14,978,137 $16,637,042 $16,528,458 $13,514,271 $13,023,065
Number of branches open. 368 364 375 390 374 357
Number of lending of-
fices open............. 89 91 92 91 96 104
Number of states in
which savings
branches/lending of-
fices located.......... 7/12 7/12 9/13 9/13 9/13 9/19
</TABLE>
- -------
(1) The cost of money is the weighted average cost of deposits and borrowings.
(2) The interest rate spread is the difference between the weighted average
yield on interest-earning assets and weighted average rate paid on
interest-bearing liabilities.
(3) The net interest margin at the end of a period is the scheduled net
interest income based on contractual rates divided by total interest-
earning assets.
S-2
<PAGE>
<TABLE>
<CAPTION>
AT
JUNE 30 , AT DECEMBER 31,
--------- ----------------------------------------------------
1994 1993 1992 1991 1990 1989
--------- -------- ---------- ---------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
ASSET QUALITY DATA (AT
END OF PERIOD):
Nonperforming assets(1):
Single family.......... $694,573 $668,294 $1,568,175 $1,035,704 $444,228 $256,650
Multi-family........... 184,120 189,238 382,890 396,222 285,232 185,228
Commercial and indus-
trial real estate..... 64,503 102,730 270,268 335,151 173,828 134,238
-------- -------- ---------- ---------- -------- --------
Total nonperforming
assets.............. $943,196 $960,262 $2,221,333 $1,767,077 $903,288 $576,116
Troubled debt
restructurings......... 97,598 100,751 61,400 266,656 338,799 385,521
Allowance for possible
loan losses............ 447,098 438,786 434,114 303,804 213,339 105,784
Ratio of nonperforming
assets to total assets. 1.83% 1.89% 4.61% 3.74% 1.76% 1.25%
Ratio of nonperforming
assets and troubled
debt restructurings to
total assets........... 2.02 2.09 4.74 4.31 2.43 2.08
Ratio of net charge-offs
during the period to
average loan portfolio
(including MBS)
outstanding during the
period................. 0.45(2) 1.36 0.56 0.24 0.25 0.13
Ratio of allowance for
possible loan losses to
loan portfolio (includ-
ing MBS)............... 0.96 0.97 1.00 0.71 0.47 0.27
Ratio of allowances for
possible losses on
loans and REO to
nonperforming assets
and troubled debt
restructurings......... 45.98 44.81 20.68 15.56 17.84 12.59
Allowance for possible
losses on real estate
owned.................. $ 58,297 $ 66,453 $ 47,970 $ 15,041 $ 10,017 $ 17,478
Allowance for possible
losses on real estate
held for development
and investment......... 285,404 341,705 154,743 136,181 70,946 8,246
</TABLE>
- --------
(1) Nonperforming assets consist of nonaccrual loans and real estate owned.
(2) Annualized.
S-3
<PAGE>
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED JUNE 30, FOR THE YEARS ENDED DECEMBER 31,
------------------------- --------------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
---------- ---------- ----------- ----------- ---------- ----------- -----------
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS:
Interest income......... $1,481,452 $1,533,271 $ 3,003,422 $ 3,428,979 $4,386,785 $ 4,651,769 $ 4,311,289
Interest expense........ 793,966 848,278 1,666,350 2,070,413 3,114,522 3,456,976 3,266,236
---------- ---------- ----------- ----------- ---------- ----------- -----------
Net interest income.... 687,486 684,993 1,337,072 1,358,566 1,272,263 1,194,793 1,045,053
Provision for loan loss-
es..................... 108,581 504,834 574,970 367,366 195,062 215,854 89,031
---------- ---------- ----------- ----------- ---------- ----------- -----------
Net interest income af-
ter
provision for loan
losses................ 578,905 180,159 762,102 991,200 1,077,201 978,939 956,022
---------- ---------- ----------- ----------- ---------- ----------- -----------
Other income:
Gain (loss) on sales of
loans and MBS, net.... (5,167) 34,751 101,044 76,925 101,586 12,678 12,724
Loan servicing and
other fee
income................ 85,317 89,446 184,113 184,549 170,789 139,103 131,041
Operations of real es-
tate held for develop-
ment and
investment (REI)...... (10,292) (187,378) (229,300) (58,359) (72,804) (30,026) 40,022
Other operating income. 2,150 3,774 40,730 5,383 5,728 4,822 24,203
---------- ---------- ----------- ----------- ---------- ----------- -----------
Total other income..... 72,008 (59,407) 96,587 208,498 205,299 126,577 207,990
---------- ---------- ----------- ----------- ---------- ----------- -----------
Other expenses:
General and administra-
tive
expenses.............. 377,682 398,315 827,462 753,257 740,964 744,586 736,632
Operations of real es-
tate owned held for
sale (REO)............ 48,935 132,312 212,130 129,153 37,125 29,731 24,090
Amortization of good-
will.................. 11,981 13,463 39,163 27,674 31,408 32,713 33,921
---------- ---------- ----------- ----------- ---------- ----------- -----------
Total other expenses... 438,598 544,090 1,078,755 910,084 809,497 807,030 794,643
---------- ---------- ----------- ----------- ---------- ----------- -----------
Earnings (loss) before
provision for
income tax (benefit),
extraordinary loss and
cumulative effect of
accounting change ..... 212,315 (423,338) (220,066) 289,614 473,003 298,486 369,369
Provision for income
taxes (benefit)........ 83,419 (165,212) (82,034) 133,222 227,242 107,490 159,023
---------- ---------- ----------- ----------- ---------- ----------- -----------
Earnings (loss) before
extraordinary loss and
cumulative effect of
accounting change...... 128,896 (258,126) (138,032) 156,392 245,761 190,996 210,346
Extraordinary loss on
early extinguishment of
debt (net of tax bene-
fit)................... -- -- (21,607) -- -- -- --
Cumulative effect of
change in
accounting for income
taxes.................. -- -- -- 47,677 -- -- --
---------- ---------- ----------- ----------- ---------- ----------- -----------
Net earnings (loss)..... $ 128,896 $ (258,126) $ (159,639) $ 204,069 $ 245,761 $ 190,996 $ 210,346
========== ========== =========== =========== ========== =========== ===========
Net earnings (loss) per
common share:
Primary................ $0.88 $(2.33) $(1.69) $1.60 $2.06 $1.64 $1.80
Fully diluted.......... 0.87 (2.33) (1.69) 1.60 2.06 1.64 1.80
OTHER DATA (FOR PERIOD):
Loans originated ....... $5,156,242 $5,097,748 $11,575,944 $12,150,040 $9,003,847 $12,947,175 $11,019,832
Loans and MBS purchased. 520,708 1,180,559 1,864,582 702,485 93,693 73,991 236,585
Loans and MBS sold...... 940,091 1,282,510 4,345,560 4,502,992 5,684,186 2,345,170 2,904,500
Loans exchanged for MBS. 4,043,171 495,990 3,951,920 223,870 1,619,721 2,980,956 2,095,123
Net increase (decrease)
in deposits............ (387,110) (694,208) (1,254,539) 126,066 541,588 4,369,299 3,561,571
Net deposits acquired.. -- 100,546 396,589 1,266,242 1,018,908 154,254 --
Ratio of general and ad-
ministrative expenses
to average assets...... 1.49%(1) 1.60%(1) 1.66% 1.54% 1.46% 1.49% 1.64%
Return on average as-
sets................... 0.51(1) (1.04)(1) (0.32) 0.42 0.49 0.39 0.47
Return on average equi-
ty..................... 8.72(1) (18.19)(1) (5.58) 7.49 9.97 8.25 9.67
Return on average tangi-
ble equity............. 11.12(1) (20.65)(1) (5.01) 10.42 14.35 12.84 15.69
</TABLE>
- -------
(1) Annualized.
S-4
<PAGE>
RECENT DEVELOPMENTS
RECENT FINANCIAL RESULTS
During the second quarter of 1994 Ahmanson recorded improved earnings due to
improving asset quality, reduced general and administrative expenses and asset
growth.
The 1994 second quarter earnings were $73.5 million, or $0.51 per fully
diluted common share, an improvement of 33% over the 1994 first quarter. In the
1994 first quarter, Ahmanson earned $55.4 million, or $0.36 per fully diluted
common share, after setting aside $30 million, or $0.14 per fully diluted
common share on a net after tax basis, as a special addition to the allowance
for loan losses related to an estimate of real property losses sustained by its
borrowers due to the Northridge earthquake in January. The loss of $291.0
million, or $2.55 per fully diluted common share, in the second quarter of 1993
reflected the decision to sell $1.2 billion of nonaccrual loans and other steps
taken by Ahmanson during that period to position itself for future
opportunities. In the first six months of 1994, Ahmanson earned $128.9 million,
or $0.87 per fully diluted common share, compared to a loss of $258.1 million,
or $2.33 per fully diluted common share, in the first six months of 1993.
Net interest income totaled $336.9 million for the second quarter of 1994
compared to $350.6 million in the first quarter of 1994 and $345.2 million in
the second quarter of 1993. The declines in net interest income are primarily
due to the reduction in the net interest margin from 3.00% in the second
quarter of 1993 and 2.96% in the first quarter of 1994 to 2.81% in the second
quarter of 1994. This margin compression principally reflects the timing
difference between the repricing of the lagging 11th District Cost of Funds
Index, to which the bulk of Ahmanson's assets are tied, and the repricing of
the Company's deposits and borrowings in the increasing interest rate
environment during the quarter. This margin compression may continue,
especially if interest rates continue to rise.
CREDIT QUALITY
Ahmanson continues to reduce nonperforming assets, which fell by $14.4
million in the second quarter to $943.2 million, or 1.83% of total assets, at
June 30, 1994. This is the lowest level of nonperforming assets since December
1990. In addition, the level of delinquent loans, those 30-59 and 60-89 days
past due, continues to decline and loans in those categories reached their
lowest levels since 1990.
As the loan portfolio improves, credit costs decline. Total credit costs
(loss provisions and REO expense) were $54.9 million in the second quarter of
1994 compared to $102.6 million in the first quarter of 1994, which included
the $30 million special provision for earthquake-related losses, and $517.9
million in the second quarter of 1993, which reflected the decision to sell
$1.2 billion of nonaccrual loans.
During the second quarter of 1994, Ahmanson sold, through a competitive
sealed bid process, 479 single family nonaccrual loans with a loan balance of
$44.6 million. Existing loss allowances were adequate to absorb the losses
associated with the sale. Ahmanson may, from time to time, offer additional
packages of nonaccrual loans for competitive bid.
LOAN VOLUME
Ahmanson's primary loan product, the Adjustable Rate Mortgage ("ARM"), is
very attractive to home purchasers in the present interest rate environment and
gives Ahmanson a competitive marketing advantage. As a result, Ahmanson funded
$5.2 billion of residential mortgages in the first half of 1994, of which 92%
(in principal amount) were ARMs. This ratio has increased dramatically from 77%
of loans originated in 1993 and, as the current year progressed, from 84% of
loans originated in January to 99% in June.
Ahmanson has initiated programs directed toward the first-time home buyer
which involve higher loan-to-value ("LTV") ratios. Higher LTV loans (those
involving downpayments of 10% or less)
S-5
<PAGE>
accounted for 16% (in principal amount) of new mortgage business in the first
half of 1994. Ahmanson does not require private mortgage insurance on these
loans and, to recognize the additional risks associated with higher LTV loans,
these loans have higher contractual margins and higher initial interest rates
than loans with larger downpayments. Ahmanson adheres to strict underwriting
standards for these higher LTV loans.
In addition, as rates have moved higher throughout the first half of 1994,
amortization and prepayments on loans and mortgage-backed securities have
slowed, thus contributing to growth in the portfolio on an annualized basis of
7% from year-end 1993.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses ("G&A") both in absolute dollars and as a
percentage of average assets fell in the latest quarter when compared to the
first quarter of 1994 and the second quarter a year ago, as Ahmanson continues
to exercise strict control of its operating expenses. Ahmanson's stated goal
was to achieve a ratio of G&A to average assets of 1.50% for the year 1994. The
actual ratio of G&A to average assets for the first six months of 1994 was
1.49%. Ahmanson continues to concentrate its efforts on future technology-
generated savings in the manner in which it originates and services loans.
BRANCH ACQUISITIONS AND SALES
Since June 30, 1994, Ahmanson has announced that it was purchasing
approximately $1.2 billion of deposits in the 30 branches of five Southern
California thrifts at an average deposit premium of approximately 2%. A total
of 21 of these branches will be consolidated into nearby Home Savings branches,
increasing the average size and efficiency of those branches. In addition, on
July 25, 1994, Ahmanson announced that it had signed an agreement to sell
approximately $1.5 billion of deposits in its 26 Savings of America branches in
Illinois for a deposit premium of approximately 8.5%. Ahmanson intends to
continue and expand its mortgage lending business in the Chicago market.
Ahmanson intends to continue to evaluate potential branch purchases and sales
as opportunities to consolidate Ahmanson's presence in its key strategic
markets.
REGULATORY DEVELOPMENTS
Home Savings' deposits are insured by the Federal Deposit Insurance
Corporation ("FDIC") through the Savings Association Insurance Fund ("SAIF")
and the Bank Insurance Fund ("BIF") to the fullest extent permitted by law.
Under current law, the SAIF has three major obligations: beginning in 1995, to
fund losses associated with the failure of institutions with SAIF-insured
deposits; to increase its reserves to 1.25% of insured deposits over a
reasonable period of time; and to make interest payments on debt incurred to
provide funds to the former Federal Savings and Loan Insurance Corporation
("FICO debt"). The reserves of the SAIF are currently lower than the reserves
of the BIF, and the BIF does not have an obligation to pay interest on FICO
debt. Recent legislation authorizes the United States Treasury to provide up to
$8 billion to the SAIF, but use of such funds would require additional
Congressional action, and the funds could be used only to cover SAIF losses and
only under limited circumstances. Therefore, in the future, premiums assessed
on deposits insured by the SAIF may be higher than premiums on deposits insured
by the BIF. Such a premium structure could provide institutions whose deposits
are exclusively or primarily BIF-insured (such as almost all commercial banks)
certain competitive advantages over institutions whose deposits are primarily
SAIF-insured (such as Home Savings) in the pricing of loans and deposits and in
lower operating costs. Such a competitive disadvantage could have an adverse
effect on Ahmanson's results of operations.
The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA")
requires the OTS to prescribe minimum acceptable operational and managerial
standards, and standards for asset quality, earnings and valuation of publicly
traded shares, for savings institutions and their holding
S-6
<PAGE>
companies. Such standards were to be effective no later than December 1, 1993,
but have not yet been finalized. The operational standards must cover internal
controls, loan documentation, credit underwriting, interest rate exposure,
asset growth and employee compensation. The asset quality and earnings
standards must specify a maximum ratio of classified assets to capital, minimum
earnings sufficient to absorb losses, and minimum ratio of market value to book
value for publicly traded shares. Any institution or holding company that fails
to meet these standards must submit a plan for corrective action within 30
days. If a savings institution fails to submit or implement an acceptable plan,
the OTS must order it to correct the safety and soundness deficiency and may
require the institution to take any action that the OTS determines will best
carry out the purpose of prompt corrective action.
The OTS, the FDIC, the Federal Reserve Board and the Office of the
Comptroller of the Currency have jointly published a proposed regulation
prescribing the required safety and soundness standards for regulated financial
institutions. Among other things, the proposed regulation would set out asset
quality standards which specify that the ratio of a depository institution's
classified assets to the sum of (a) its total capital and (b) any allowances
for loan losses not included in total capital should not exceed 100%. Minimum
earnings standards would require that institutions be able to demonstrate pro
forma compliance with capital requirements if net earnings or losses over the
preceding four quarters continue over the next four quarters. If these
standards had been in effect at June 30, 1994, Home Savings would have been in
compliance. In addition, under the proposed regulation, the safety and
soundness standards would apply primarily at the savings institution level, and
savings and loan holding companies such as Ahmanson would only be required (i)
to ensure that their transactions with a subsidiary savings institution are not
detrimental to the institution, (ii) to avoid creating a serious risk that the
holding company's liabilities would be imposed on the institution, (iii) not to
take any action that would impede the institution's compliance with the safety
and soundness standards, and (iv) if the subsidiary institution is required to
submit a plan for corrective action, to take any corporate actions necessary to
enable the subsidiary to take the actions required by the plan. Under
legislation that has recently passed in the U.S. House of Representatives and
Senate, holding companies would be excluded entirely from the coverage of the
safety and soundness standards.
S-7
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of Ahmanson,
including deposits, at June 30, 1994, and as adjusted to give effect for the
issuance of the Notes offered hereby.
<TABLE>
<CAPTION>
JUNE 30, 1994
------------------------
ACTUAL AS ADJUSTED
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Deposits and borrowings(1):
Deposits........................................... $37,631,543 $37,631,543
Short-term borrowings under agreements to repur-
chase securities sold............................. 5,311,468 5,311,468
Other short-term borrowings........................ 120,000 120,000
FHLB advances...................................... 483,850 483,850
FHLB notes......................................... 1,765,348 1,765,348
Notes payable to regulatory agencies............... 376,510 376,510
Notes payable to Student Loan Marketing
Association....................................... 400,000 400,000
Medium-term floating rate notes.................... 199,839 199,839
Subordinated notes................................. 981,833 1,106,833
Other long-term borrowings......................... 258,885 258,885
----------- -----------
Total deposits and borrowings.................... 47,529,276 47,654,276
----------- -----------
Stockholders' equity:
Series B Preferred Stock, $0.01 par value (aggre-
gate
liquidation preference $175,000,000).............. 35 35
Series C Preferred Stock, $0.01 par value (aggre-
gate
liquidation preference $195,000,000).............. 8 8
Series D Preferred Stock, $0.01 par value
(aggregate
liquidation preference $250,000,000).............. 6 6
Common Stock, $0.01 par value...................... 1,169 1,169
Additional paid-in capital......................... 1,233,305 1,233,305
Net unrealized loss on securities available for
sale.............................................. (16,276) (16,276)
Retained earnings.................................. 1,749,355 1,749,355
Unearned compensation.............................. (1,884) (1,884)
----------- -----------
Total stockholders' equity....................... 2,965,718 2,965,718
----------- -----------
Total capitalization............................. $50,494,994 $50,619,994
=========== ===========
</TABLE>
- --------
(1) Deposits and borrowings are subject to fluctuation from time to time.
S-8
<PAGE>
USE OF PROCEEDS
The net proceeds from the sale of the Notes will be used to make a capital
contribution to Home Savings and/or for general corporate purposes.
DESCRIPTION OF NOTES
The Notes are to be issued under an indenture, to be dated as of August 24,
1994 (the "Indenture"), between Ahmanson and The First National Bank of
Chicago, as trustee (the "Trustee"), which, except as set forth in this
Prospectus Supplement, contains terms and conditions substantially similar to
the terms and conditions of the form of Indenture filed as an exhibit to the
Registration Statement, as defined in the Prospectus, of which this Prospectus
Supplement is a part. The Notes are a series of Debt Securities described in
the accompanying Prospectus. The following description of the terms of the
Notes, referred to in the Prospectus as "Offered Debt Securities," supplements,
and to the extent inconsistent therewith replaces, the description of the
general terms and provisions of Debt Securities set forth in the Prospectus, to
which description reference is hereby made. Capitalized terms not otherwise
defined herein have the meanings given to them in the Prospectus.
GENERAL
The Notes will be limited to $125,000,000 aggregate principal amount and will
mature on September 1, 2004. The Notes will bear interest at the rate per annum
shown on the cover of this Prospectus Supplement from August 31, 1994 or from
the most recent Interest Payment Date to which interest has been paid or
provided for, which will be payable semi-annually on March 1 and September 1 of
each year, commencing March 1, 1995, to the Person (who may be the Depository
or its nominee) in whose name the Note (or any predecessor Note) is registered
at the close of business on the February 15 and August 15, as the case may be,
next preceding such Interest Payment Date. The Notes will be issued as
registered notes in denominations of $100,000 and any integral multiple of
$1,000 in excess thereof.
The defeasance and covenant defeasance provisions in the Indenture described
under "Description of Debt Securities--Defeasance" in the Prospectus will apply
to the Notes.
SUBORDINATION
The payment of the principal of and interest on the Notes will, to the extent
set forth in the Indenture, be subordinated in right of payment to the prior
payment in full of all Senior Indebtedness. See "Description of Debt
Securities--Subordination" in the Prospectus. At June 30, 1994, Senior
Indebtedness outstanding aggregated approximately $247,124,000. The Indenture
does not limit or prohibit the incurrence of additional Senior Indebtedness.
The Notes will rank pari passu with Ahmanson's 9.875% Subordinated Notes Due
1999.
Because Ahmanson is a holding company, its rights and the rights of its
creditors, including the Holders of the Notes offered hereby, to participate in
the assets of any subsidiary upon the latter's liquidation or recapitalization
will be subject to the prior claims of the subsidiary's creditors except to the
extent that Ahmanson may itself be a creditor with recognized claims against
the subsidiary. Substantially all of the deposits and borrowings set forth
under "Capitalization" represent claims of the creditors of Ahmanson's
subsidiaries.
BOOK-ENTRY
Upon issuance, all Notes will be represented by one or more global securities
(the "Global Security"). The Global Security representing the Notes will be
deposited with or on behalf of the Depository and registered in the name of a
nominee of the Depository. Notes will not be exchangeable for certificated
notes; provided that if the Depository is at any time unwilling or unable to
continue as
S-9
<PAGE>
Depository and a successor depository is not appointed by Ahmanson within 90
days, Ahmanson will issue certificated notes in exchange for the Global
Security representing the Notes. (Section 305) In addition, Ahmanson may at any
time and in its sole discretion determine not to have the Notes represented by
the Global Security and, in such event, will issue certificated notes in
exchange therefor. (Section 305)
Principal and interest payments on the Notes registered in the name of the
Depository or its nominee will be made in immediately available funds to the
Depository or its nominee, as the case may be, as the registered owner of the
Global Security representing the Notes. Ahmanson expects that the Depository,
upon receipt of any payment of principal or interest in respect of the Global
Security, will immediately credit the accounts of Participants (as defined
below) with payments in amounts proportionate to their respective beneficial
interests in the principal amount of the Global Security as shown on the
records of the Depository. Ahmanson also expects that payments by Participants
to owners of beneficial interests in the Global Security held through such
Participants will be governed by standing instructions and industry practices,
as is now the case with securities held for the accounts of customers in bearer
form or registered in "street name," and will be the responsibility of such
Participants. None of Ahmanson, the Trustee, any paying agent or any registrar
for the Notes will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the Global Security or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
DTC will be the initial Depository with respect to the Notes. DTC has advised
Ahmanson that it is a limited-purpose trust company organized under the laws of
the State of New York, a "banking organization" within the meaning of the New
York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934 (the "Exchange Act"). DTC was created to hold
securities of its participating organizations ("Participants") and to
facilitate the clearance and settlement of securities transactions among its
Participants in such securities through electronic computerized book-entry
changes in accounts of the Participants, thereby eliminating the need for
physical movement of securities certificates. DTC's direct Participants include
securities brokers and dealers (including the Underwriters), banks, trust
companies, clearing corporations and certain other organizations, some of whom
(and/or their representatives) own DTC. Access to DTC's book-entry system is
also available to others, such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a direct
Participant, either directly or indirectly ("Indirect Participants"). Persons
who are not Participants may beneficially own securities held by DTC only
through Participants or Indirect Participants.
LIMITATIONS ON RIGHTS OF BENEFICIAL OWNERS
DTC has informed Ahmanson that under existing DTC policies and industry
practices, if Ahmanson requests any action of Holders, or if any owner of a
beneficial interest in such Global Security desires to give any notice or take
any action (including without limitation any action pursuant to Section 508 of
the Indenture) that a Holder is entitled to give or take under the Indenture or
the Global Security, DTC would authorize and cooperate with each Participant to
whose account any portion of the Notes represented by such Global Security is
credited on DTC's books and records to give such notice or take such action.
Any person owning a beneficial interest in such Global Security that is not a
Participant must rely on any contractual arrangements it has directly, or
indirectly through its immediate financial intermediary, with a Participant to
give such notice or take such action.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for, and payments of principal of and interest on, the Notes will
be made in immediately available funds. The Notes will trade in the
Depository's Same-Day Funds Settlement System until Maturity, and therefore the
Depository will require secondary trading activity in the Notes to be settled
in immediately available funds.
S-10
<PAGE>
REDEMPTION
The Notes will not be redeemable prior to Maturity.
No sinking fund is provided for the Notes.
GOVERNING LAW
The Indenture and the Notes shall be governed by and construed in accordance
with the laws of the State of New York.
S-11
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement") among Ahmanson and Lehman Brothers Inc., CS
First Boston Corporation and Smith Barney Inc. (the "Underwriters"), Ahmanson
has agreed to sell to the Underwriters, and the Underwriters have severally
agreed to purchase, the respective principal amounts of Notes set forth after
their names below. The Underwriting Agreement provides that the obligations of
the Underwriters are subject to certain conditions precedent and that the
Underwriters will be obligated to purchase all the Notes if any are purchased.
<TABLE>
<CAPTION>
UNDERWRITER PRINCIPAL AMOUNT
----------- ----------------
<S> <C>
Lehman Brothers Inc. .................................... $ 43,000,000
CS First Boston Corporation.............................. 41,000,000
Smith Barney Inc. ....................................... 41,000,000
------------
Total................................................... $125,000,000
============
</TABLE>
The Underwriters propose to offer the Notes in part directly to the public at
the initial public offering price set forth on the cover page of this
Prospectus Supplement and in part to certain securities dealers at such price
less a concession of 0.40% of the principal amount. The Underwriters may allow,
and such dealers may reallow, a concession not in excess of 0.25% of the
principal amount to certain brokers and dealers. After the Notes are released
for sale to the public, the offering price and other selling terms may from
time to time be varied by the Underwriters.
The Notes are a new issue of securities with no established trading market.
Ahmanson has been advised by the Underwriters that they intend to make a market
in the Notes but are not obligated to do so and may discontinue market making
at any time without notice. No assurance can be given as to the liquidity of
the trading market of the Notes.
Ahmanson has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under applicable securities laws or
contribute to payments the Underwriters may be required to make in respect
thereof.
LEGAL MATTERS
Certain legal matters with respect to the Notes offered hereby will be passed
upon for Ahmanson by Gibson, Dunn & Crutcher, Los Angeles, California. The
validity of the Notes offered hereby will be passed upon for the Underwriters
by Sullivan & Cromwell, Los Angeles, California. Arthur W. Schmutz, a director
of Ahmanson, is a retired former partner of Gibson, Dunn & Crutcher.
EXPERTS
The consolidated financial statements and schedules of Ahmanson as of
December 31, 1993 and 1992 and for each of the years in the three-year period
ended December 31, 1993 included in Ahmanson's Annual Report on Form 10-K for
the year ended December 31, 1993 have been incorporated herein by reference in
reliance on the reports of KPMG Peat Marwick LLP, independent certified public
accountants, incorporated herein by reference, and upon the authority of such
firm as experts in auditing and accounting.
S-12
<PAGE>
[LOGO OF H.F. AHMANSON & CO. APPEARS HERE]
PREFERRED STOCK AND PREFERRED STOCK WARRANTS
COMMON STOCK AND COMMON STOCK WARRANTS
DEBT SECURITIES AND DEBT WARRANTS
----------------
H. F. Ahmanson & Company, a Delaware corporation ("Ahmanson" and collectively
with its subsidiaries, the "Company"), may offer, from time to time, in one or
more series, shares of its Preferred Stock, $.01 par value per share (the
"Preferred Stock"), warrants to purchase Preferred Stock ("Preferred Stock
Warrants"), shares of its Common Stock, $.01 par value per share (the "Common
Stock"), warrants to purchase Common Stock ("Common Stock Warrants"), its
unsecured debt securities ("Debt Securities") and warrants to purchase Debt
Securities ("Debt Warrants," and collectively with the Preferred Stock Warrants
and Common Stock Warrants, the "Securities Warrants," the Securities Warrants,
Common Stock, Preferred Stock and Debt Securities being collectively referred
to herein as the "Securities"), having such prices and terms as are determined
in light of market conditions at the time of sale. In the case of Preferred
Stock, the Prospectus Supplement accompanying this Prospectus sets forth, with
respect to the particular series of Preferred Stock for which this Prospectus
and the Prospectus Supplement are being delivered, the number of shares,
designation, liquidation preference per share, issuance price, dividend rate
(or method of calculation), dividend payment dates, any redemption or sinking
fund provisions, any conversion rights or other special terms and the names of
the underwriters, if any. In addition, the Prospectus Supplement will describe
whether interests in the Preferred Stock will be represented by depositary
shares ("Depositary Shares") evidenced by depositary receipts. In the case of
Common Stock, the Prospectus Supplement accompanying this Prospectus sets forth
the number of shares, issuance price and the names of the underwriters. In the
case of Debt Securities, the Prospectus Supplement accompanying this Prospectus
sets forth, with respect to the particular series of Debt Securities for which
this Prospectus and the Prospectus Supplement are being delivered, the specific
aggregate principal amount, denominations (which may be in United States
dollars, in any other currency or in composite currencies), maturity, rate
(which may be fixed or variable) and time of payment of any interest, purchase
price, any terms for redemption or other special terms and the names of the
underwriters, if any. The Debt Securities may be unsecured Debt Securities (the
"Senior Debt Securities") or unsecured and subordinated Debt Securities (the
"Subordinated Debt Securities"). The Senior Debt Securities, when issued, will
rank on a parity with all other unsecured and unsubordinated indebtedness of
Ahmanson, and the Subordinated Debt Securities, when issued, will be
subordinate in right of payment to all obligations of Ahmanson to its other
creditors, except obligations ranking on a parity with or junior to the
Subordinated Debt Securities. In the case of Securities Warrants, the
Prospectus Supplement accompanying this Prospectus sets forth the duration,
offering price, exercise price, detachability, if applicable, and the names of
the underwriters, if any.
THE SECURITIES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF ANY
SAVINGS BANK OR NON-BANK SUBSIDIARY OF THE COMPANY AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, BANK INSURANCE FUND, SAVINGS ASSOCIATION
INSURANCE FUND OR ANY OTHER GOVERNMENT AGENCY.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
Prior to issuance there will have been no market for the Debt Securities,
Preferred Stock (or related Depository Shares, if applicable) or Securities
Warrants, as the case may be, and there can be no assurance that a secondary
market for any such Securities will develop. This Prospectus may not be used to
consummate sales of any Securities unless accompanied by a Prospectus
Supplement. The Securities may be offered through one or more different plans
of distribution, including offerings through underwriters. See "Plan of
Distribution" herein.
----------------
The date of this Prospectus is August 24, 1994.
<PAGE>
AVAILABLE INFORMATION
Ahmanson has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (together with all
amendments and exhibits thereto, the "Registration Statement") under the
Securities Act of 1933, as amended. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information, reference is made to the Registration Statement.
Ahmanson is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports and other information with the Commission. Reports, proxy statements
and other information concerning Ahmanson may be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549 and at the Commission's regional
offices at Seven World Trade Center,Suite 1300, New York, New York 10048 and
Room 1400, Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661.
Copies of that material may be obtained by mail from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. In addition, reports, proxy statements and other information
concerning Ahmanson may be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York, and the Pacific Stock Exchange,
115 Sansome Street, 2nd Floor, San Francisco, California 94104.
DOCUMENTS INCORPORATED BY REFERENCE
Ahmanson's (a) Annual Report on Form 10-K for the year ended December 31,
1993, (b) Quarterly Reports on Form 10-Q for the quarters ended March 31, 1994
and June 30, 1994, (c) the description of the Common Stock in Ahmanson's
Registration Statement on Form 8-B, dated June 19, 1985 and(d) the Current
Report on Form 8-K dated February 9, 1994, and all documents filed with the
Commission by Ahmanson pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act (which include Ahmanson's Annual Reports on Form 10-K and
Quarterly Reports on Form 10-Q) subsequent to the date of this Prospectus and
prior to the termination of the offering of the Securities made hereby shall be
deemed to be incorporated by reference into this Prospectus. Any statement
contained in a document deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein, in the Prospectus Supplement or in
any other subsequently filed document that is also incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
Any person, including any beneficial owner, receiving a copy of this
Prospectus may obtain without charge, upon request, a copy of any of the
documents incorporated by reference herein, except for the exhibits to such
documents (unless such exhibits are specifically incorporated by reference in
such documents). Written requests should be mailed to: H. F. Ahmanson &
Company, 4900 Rivergrade Road, Irwindale, California 91706, Attention: Investor
Relations. Telephone requests may be directed to (818) 814-7986.
2
<PAGE>
H. F. AHMANSON & COMPANY
Ahmanson is one of the largest residential real estate-oriented financial
services companies in the United States, owning subsidiaries principally
engaged in the savings bank business and related financial service activities.
Ahmanson was originally organized in 1928 in California and changed its state
of incorporation from California to Delaware in 1985. Ahmanson's executive
offices are located at 4900 Rivergrade Road, Irwindale, California 91706, and
its telephone number is (818) 960-6311.
Approximately 99% of Ahmanson's consolidated revenues in 1993 were derived
from the operations of Home Savings of America, FSB, a federally chartered
savings bank ("Home Savings"), which is wholly owned by Ahmanson and conducts
the majority of its business in California. Home Savings represented over 99%
of Ahmanson's consolidated assets at December 31, 1993. Home Savings is
currently the largest savings institution in the United States. Home Savings is
regulated by the Director (the "OTS Director") of the Office of Thrift
Supervision (the "OTS") and the Federal Deposit Insurance Corporation (the
"FDIC") which, through the Savings Association Insurance Fund (the "SAIF") and
the Bank Insurance Fund ("BIF"), insures the deposit accounts of savings
institutions, such as Home Savings. Home Savings is a member of the Federal
Home Loan Bank (the "FHLB") of San Francisco, which is one of the twelve
regional banks for federally insured depository institutions comprising the
Federal Home Loan Bank System. Home Savings is further subject to certain
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board") governing reserves required to be maintained against
deposits and other matters.
Ahmanson's principal business is attracting funds from the general public and
institutions and originating and investing in residential real estate mortgage
loans, mortgage-backed securities ("MBSs"), such as those issued or guaranteed
by the Federal National Mortgage Association, the Federal Home Loan Mortgage
Corporation and the Government National Mortgage Association, and investment
securities. Ahmanson's primary sources of revenue are interest earned on
mortgage loans and MBSs, income from investment securities, gains on sales of
loans and MBSs, fees earned in connection with loans and deposits, and income
earned on its portfolio of loans serviced for investors. Its principal expense
is interest incurred on interest-bearing liabilities, including deposits and
borrowings.
Ahmanson's principal sources of funds are cash dividends paid to it by Home
Savings and its other subsidiaries, investment income and borrowings. There are
significant restrictions on the ability of Home Savings to pay dividends to
Ahmanson. Savings institution subsidiaries of savings and loan holding
companies, such as Home Savings, must notify the OTS Director of their intent
to declare dividends 30 days before declaration. The OTS Director has the
authority to preclude those institutions from declaring a dividend.
OTS regulations impose limitations upon certain "capital distributions" by
savings institutions, including cash dividends, payments to repurchase or
otherwise acquire an institution's shares, payments to stockholders of another
institution in a cash-out merger and other distributions charged against
capital. The regulations establish a three-tiered system of regulation, with
the greatest flexibility being afforded to institutions that meet or exceed the
fully phased-in capital requirements. An association meets the fully phased-in
capital requirements if it meets the statutory and regulatory standards to be
applicable on January 1, 1995, after taking into account any applicable
individual minimum capital requirement.
An institution that has capital immediately prior to, and on a pro forma
basis after giving effect to, a proposed capital distribution that is at least
equal to its fully phased-in capital requirements is considered a Tier 1
institution ("Tier 1 Institution"). An institution that has capital immediately
prior to, and on a pro forma basis after giving effect to, a proposed capital
distribution that is at least equal to its minimum regulatory capital
requirement but less than its fully phased-in capital requirement is considered
a Tier 2 institution ("Tier 2 Institution"). An institution that does not meet
its minimum
3
<PAGE>
regulatory capital requirement immediately prior to, or on a pro forma basis
after giving effect to, a proposed capital distribution is considered a Tier 3
institution ("Tier 3 Institution"). The OTS retains discretion to treat a Tier
1 Institution as a Tier 2 or Tier 3 Institution if the OTS determines that the
institution is in need of more than normal supervision and has provided the
institution with notice to that effect.
A Tier 1 Institution may, without the approval of but with prior notice to
the OTS, make capital distributions during a calendar year up to the greater of
(1) 100% of its net income to date during the calendar year plus the amount
that would reduce the institution's "surplus capital ratio" (the excess over
its fully phased-in risk-based capital requirement) to one-half of its surplus
capital ratio at the beginning of the calendar year or (2) 75% of the
institution's net income over the most recent four quarter period. Any
additional capital distributions would require prior regulatory approval. Tier
2 and Tier 3 Institutions are subject to more restrictive limitations on
capital distributions. AtDecember 31, 1993 Home Savings was a Tier 1
Institution. The OTS retains the authority to prohibit any capital distribution
otherwise authorized under the regulations if the OTS determines that the
capital distribution would constitute an unsafe or unsound practice.
Ahmanson and Home Savings have also agreed with federal regulators that Home
Savings will not pay dividends in any one year that exceed the sum of (i) 50%
of the lesser of Home Savings' net income or net operating income in such year
and (ii) the amounts that could have been, but were not, paid as dividends in
prior years pursuant to such agreement, previous similar agreements and
applicable regulations and statutes. In connection with its supervisory
acquisitions, Ahmanson has also agreed with federal regulators to cause Home
Savings' regulatory capital to be maintained at the greater of (i) 3% of Home
Savings' total liabilities, with certain adjustments, and (ii) the level
required by regulation, and to cause sufficient equity capital to be
contributed to Home Savings if necessary to effect compliance with such
agreement. In no event may dividends from Home Savings to Ahmanson reduce Home
Savings' regulatory capital below such level.
Additionally, as of December 31, 1993, Home Savings' accumulated tax reserves
for losses on qualifying real property loans exceeded the reserve that could
have been accumulated under the experience method, and such excess could be
subject to recapture taxes of up to 51% on any dividend if Home Savings makes
distributions to Ahmanson that exceed Home Savings' current or accumulated
earnings and profits as calculated for federal income tax purposes.
The OTS has adopted regulations (the "Capital Regulations") that establish
three capital requirements--a "core capital requirement," a "tangible capital
requirement" and a "risk-based capital requirement." The capital standards
contained in the Capital Regulations generally must be no less stringent than
the capital standards applicable to national banks. The Capital Regulations
require savings institutions to maintain "core" capital of at least 3% of
adjusted total assets, "tangible" capital of at least 1.5% of adjusted total
assets, and "risk-based" capital of at least 8% of risk-weighted assets. In
addition, effective September 30, 1994, institutions whose exposure to
interest-rate risk is deemed to be above normal will be required to deduct a
portion of such exposure in calculating their risk-based capital. If this
interest-rate risk component had been in effect as of June 30, 1994, Home
Savings would not have been deemed to have above-normal exposure to interest-
rate risk. The OTS may establish, on a case-by-case basis, individual minimum
capital requirements for a savings institution that vary from the requirements
that would otherwise apply under the Capital Regulations. The OTS has not
established such individual minimum capital requirements for Home Savings. Home
Savings was in compliance with the Capital Regulations at June 30, 1994.
The Federal Deposit Insurance Corporation Improvement Act of 1991 directed
the FDIC to establish by January 1, 1994 a risk-based system for setting
deposit insurance assessments for FDIC-insured institutions such as Home
Savings. The FDIC has implemented such a system, under which an institution's
insurance assessments vary depending on the level of capital the institution
holds and the
4
<PAGE>
degree to which it is the subject of supervisory concern to the FDIC. Under
the FDIC's system, the assessment rate for both BIF deposits and SAIF deposits
varies from 0.23% of covered deposits of well-capitalized institutions that
are deemed to have no more than a few minor weaknesses, to 0.31% of covered
deposits for less than adequately capitalized institutions that pose
substantial supervisory concern. The FDIC in the future may determine to
change the assessment rates, or the parity of BIF and SAIF rates, based on the
condition of the BIF and the SAIF.
USE OF PROCEEDS
Unless otherwise disclosed in the accompanying Prospectus Supplement, the
net proceeds from the sale of the Securities will be used to make a capital
contribution to Home Savings, to finance future acquisitions and/or for other
general corporate purposes.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for the Company is computed by
dividing earnings by fixed charges. The ratio of earnings to combined fixed
charges and preferred stock dividends is computed by dividing earnings by the
sum of fixed charges and preferred stock dividend requirements. Earnings
consist primarily of income before income taxes and fixed charges. Fixed
charges represent interest expense and the proportion of rental expense deemed
representative of the interest factor.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
----------- ---------------------------
1994 1993 1993 1992 1991 1990 1989
----- ----- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Including interest on deposits... 1.26 --(1) --(2) 1.14 1.14 1.07 1.09
Excluding interest on customer
accounts........................ 1.93 --(1) --(2) 1.81 1.64 1.29 1.35
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock
Dividends:
Including interest on deposits... 1.20 --(1) --(2) 1.12 1.14 1.07 1.09
Excluding interest on customer
accounts........................ 1.64 --(1) --(2) 1.66 1.62 1.29 1.35
</TABLE>
- --------
(1) For the six months ended June 30, 1993 fixed charges exceeded earnings by
$423.3 million and combined fixed charges and preferred stock dividends
exceeded earnings by $447.1 million.
(2) For the year ended December 31, 1993, fixed charges exceeded earnings by
$258.0 million and combined fixed charges and preferred stock dividends
exceeded earnings by $318.8 million.
DESCRIPTION OF PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. The particular terms of any series of
Preferred Stock will be described in the Prospectus Supplement relating
hereto. If so indicated in a Prospectus Supplement, the terms of any such
series may differ from the terms set forth below.
The summary of terms of Ahmanson's preferred stock (including the Preferred
Stock) contained in this Prospectus does not purport to be complete and is
subject to, and qualified in its entirety by, the provisions of Ahmanson's
Certificate of Incorporation and the certificate of designations relating to
each series of Preferred Stock (the "Certificate of Designations"), which will
be filed as an exhibit to or incorporated by reference in the Registration
Statement of which this Prospectus is a part at or prior to the time of
issuance of such series of Preferred Stock.
Ahmanson's Certificate of Incorporation authorizes the issuance of
10,000,000 shares of preferred stock, par value $.01 per share, of which
3,500,000 shares of 9.60% Preferred Stock, Series B ("Series B Preferred
Stock"), 780,000 shares of 8.40% Preferred Stock, Series C (the "Series C
Preferred Stock"), and 500,000 shares of 6% Cumulative Convertible Preferred
Stock, Series D (the "Series D Preferred Stock") were outstanding as of the
date hereof. In addition, Ahmanson has reserved for issuance 1,100,000 shares
of its Series A Junior Participating Preferred Stock issuable pursuant to the
Rights Plan described under "Description of the Common Stock" below. Preferred
Stock may be issued
5
<PAGE>
from time to time hereunder in one or more series, without stockholder
approval. Subject to limitations prescribed by law, the Board of Directors is
authorized to determine the voting powers (if any), designation, preferences
and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, for each series of
preferred stock that may be issued, and to fix the number of shares of each
such series. Thus, the Board of Directors, without stockholder approval, could
authorize the issuance of Preferred Stock with voting, conversion and other
rights that could adversely affect the voting power and other rights of
holders of Common Stock or another series of preferred stock or that could
have the effect of delaying, deferring or preventing a change in control of
Ahmanson. See "--Certain Ownership Limitations" and "Description of Common
Stock--Factors Affecting Acquisitions of Control."
The Preferred Stock will have the dividend, liquidation, redemption and
voting rights set forth below unless otherwise provided in a Prospectus
Supplement relating to a particular series of Preferred Stock. Reference is
made to the Prospectus Supplement relating to the particular series of
Preferred Stock offered thereby for specific terms, which may include one or
more of the following: (i) the designation and stated value par share of such
Preferred Stock and the number of shares offered; (ii) the amount of
liquidation preference per share; (iii) the initial public offering price at
which such Preferred Stock will be issued; (iv) the dividend rate (or method
of calculation), the dates on which dividends will be payable, whether
dividends are cumulative or non-cumulative and the dates from which dividends
will commence to cumulate, if any; (v) any redemption or sinking fund
provisions; (vi) any conversion rights; (vii) whether Ahmanson has elected to
offer Depositary Shares as described below under "Description of Depositary
Shares;" (viii) whether such series of Preferred Stock will be issued in
registered or bearer form; and (ix) any additional voting, dividend,
liquidation, redemption, sinking fund and other rights, preferences,
privileges, limitations and restrictions.
GENERAL
The Preferred Stock offered hereby will be issued in one or more series. The
holders of Preferred Stock will have no preemptive rights. Preferred Stock
will be fully paid and nonassessable upon issuance against full payment of the
purchase price therefor. Neither the par value nor the liquidation preference
is indicative of the price at which the Preferred Stock will actually trade on
or after the date of issuance. For a description of certain tax consequences
relating to the purchase, ownership and disposition of the Preferred Stock,
see "Certain Federal Income Tax Considerations."
As described under "Description of Depositary Shares," Ahmanson may, at its
option, elect to offer depositary shares ("Depositary Shares") evidenced by
depositary receipts ("Depositary Receipts"), each representing a fractional
interest (to be specified in the Prospectus Supplement relating to the
particular series of Preferred Stock) in a share of the particular series of
Preferred Stock issued and deposited with a Depositary (as defined below).
RANK
The Preferred Stock will, with respect to dividend rights and rights on
liquidation, winding up and dissolution of Ahmanson, rank prior to Ahmanson's
Common Stock and to all other classes and series of equity securities of
Ahmanson now or hereafter authorized, issued or outstanding (the Common Stock
and such other classes and series of equity securities collectively may be
referred to herein as the "Junior Stock"), other than any classes or series of
equity securities of Ahmanson ranking on a parity with (the "Parity Stock") or
senior to (the "Senior Stock") the Preferred Stock as to dividend rights and
rights upon liquidation, winding up or dissolution of Ahmanson. The Preferred
Stock will be junior to all outstanding debt of Ahmanson. The Preferred Stock
will be subject to creation of Senior Stock, Parity Stock and Junior Stock to
the extent not expressly prohibited by Ahmanson's Certificate of
Incorporation.
DIVIDENDS
Holders of shares of Preferred Stock will be entitled to receive, when, as
and if declared by the Board of Directors out of funds of Ahmanson legally
available for payment, cash dividends, payable at
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such dates and at such rates per share per annum as set forth in the
accompanying Prospectus Supplement. Such rate may be fixed or variable or both.
Each declared dividend will be payable to holders of record as they appear at
the close of business on the stock books of Ahmanson (or, if applicable, on the
records of the Depositary referred to below under "Description of Depositary
Shares") on such record dates, not more than 60 calendar days preceding the
payment dates therefor, as are determined by the Board of Directors (each of
such dates, a "Record Date").
Such dividends may be cumulative or noncumulative, as provided in the
Prospectus Supplement. If dividends on a series of Preferred Stock are
noncumulative and if the Board of Directors fails to declare a dividend in
respect of a dividend period with respect to such series, then holders of such
Preferred Stock will have no right to receive a dividend in respect of such
dividend period, and Ahmanson will have no obligation to pay the dividend for
such period, whether or not dividends are declared payable on any future
dividend payment dates. Dividends on the shares of each series of Preferred
Stock for which dividends are cumulative will accrue from the date on which
Ahmanson initially issues shares of such series.
No full dividends shall be declared or paid or set apart for payment on
preferred stock of Ahmanson of any series ranking, as to dividends, on a parity
with or junior to the series of Preferred Stock offered by the Prospectus
Supplement attached hereto for any period unless full dividends for the
immediately preceding dividend period on such Preferred Stock (including any
accumulation in respect of unpaid dividends for prior dividend periods, if
dividends on such Preferred Stock are cumulative) have been or
contemporaneously are declared and paid or declared, and a sum sufficient for
the payment thereof is set apart for such payment. When dividends are not so
paid in full (or a sum sufficient for such full payment is not so set apart)
upon such Preferred Stock and any other preferred stock of Ahmanson ranking on
a parity as to dividends with the Preferred Stock, dividends upon shares of
such Preferred Stock and dividends on such other preferred stock shall be
declared pro rata so that the amount of dividends declared per share on such
Preferred Stock and such other preferred stock shall in all cases bear to each
other the same ratio that accrued dividends for the then-current dividend
period per share on the shares of such Preferred Stock (including any
accumulation in respect of unpaid dividends for prior dividend periods, if
dividends on such Preferred Stock are cumulative) and accrued dividends,
including required or permitted accumulations, if any, on shares of such other
preferred stock, bear to each other. Unless full dividends on the series of
Preferred Stock offered by the Prospectus Supplement attached hereto have been
declared and paid or set apart for payment for the immediately preceding
dividend period (including any accumulation in respect of unpaid dividends for
prior dividend periods, if dividends on such Preferred Stock are cumulative)
(a) no cash dividend or distribution (other than in shares of Junior Stock) may
be declared, set aside or paid on any Junior Stock, (b) Ahmanson may not
repurchase, redeem or otherwise acquire any shares of its Junior Stock (except
by conversion into or exchange for Junior Stock) and (c) Ahmanson may not,
directly or indirectly, repurchase, redeem or otherwise acquire any shares of
such Preferred Stock or Parity Stock otherwise than pursuant to certain pro
rata offers to purchase or a concurrent redemption of all, or a pro rata
portion, of the outstanding shares of such Preferred Stock and Parity Stock or
pursuant to the conversion of such Preferred Stock and Parity Stock into or in
exchange for Junior Stock.
SOURCES OF FUNDS FOR DIVIDEND PAYMENTS
Ahmanson is a legal entity separate and distinct from Home Savings and its
other subsidiaries. The principal source of Ahmanson's funds on an
unconsolidated basis is expected to be dividends from Home Savings. There are
significant limitations on the ability of Home Savings to pay dividends. See
"H. F. Ahmanson & Company."
CONVERTIBILITY
The Prospectus Supplement for any series of Preferred Stock (or related
Depositary Shares) will state whether shares in that series are convertible
into Common Stock or another series of Preferred
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Stock. See "Description of Common Stock." Unless otherwise provided in the
applicable Prospectus Supplement, if a series of Preferred Stock is convertible
into shares of Common Stock, holders of such shares of Preferred Stock will
have the right, at their option, to convert any or all of their shares of
Preferred Stock (or related Depositary Shares) into shares of Common Stock, at
any time and from time to time, at the conversion rate set forth on the cover
page of the Prospectus Supplement relating to such series (equivalent to the
conversion price set forth on such cover page), subject to adjustment from time
to time as described below. The right to convert any share of Preferred Stock
(or related Depositary Share) called for redemption will terminate at the close
of business on the redemption date in respect thereof.
Fractional shares of Common Stock will not be delivered upon conversion, but
cash will be paid in respect of such fractional shares, based on the "current
market price" (as defined in the Certificate of Designations) of the Common
Stock.
Shares of Preferred Stock (and the related Depositary Shares) surrendered for
conversion after the record date for a dividend payment and prior to the next
succeeding Dividend Payment Date for the Preferred Stock (except shares
redeemed during such period) must be accompanied by payment of an amount equal
to the dividend thereon, if any, which is to be paid on such Dividend Payment
Date. Therefore, if a holder exercises conversion rights other than on a
Dividend Payment Date, such holder will forego dividends for the period from
the preceding Dividend Payment Date to the date of conversion and may not be
entitled to dividends declared and paid on the Common Stock during that period.
The conversion rate is subject to adjustment upon the occurrence of certain
events, including (i) payment of a dividend on the Common Stock payable in
capital stock and stock splits, combinations or reclassifications of the Common
Stock, (ii) issuance to all holders of Common Stock (not being available on an
equivalent basis to holders of the Preferred Stock on conversion) of rights or
warrants to subscribe for or purchase shares of Common Stock at less than their
current market price (as defined in the Certificate of Designations), (iii)
certain distributions of evidences of indebtedness or assets (including
securities but excluding cash dividends or distributions paid out of retained
earnings or dividends payable in Common Stock) or of subscription rights and
warrants (excluding those referred to in (ii) above) to holders of Common Stock
and (iv) the events described in the following paragraph. Conversion rate
adjustments may, under certain circumstances, be treated as taxable dividends
to holders of Preferred Stock. See "Certain Federal Income Tax Considerations."
Ahmanson may, but is not obligated to, make such adjustments in the conversion
rate, in addition to those described above, as it considers to be advisable in
order that any event that otherwise would be treated for Federal income tax
purposes as a taxable dividend of stock or stock rights will not be taxable to
the recipient. No adjustment will be required to be made in the conversion rate
until cumulative adjustments require an adjustment of at least 1% of the
conversion rate as last adjusted. Except as set forth above, the conversion
rate will not be adjusted for the issuance of Common Stock or any securities
convertible into or exchangeable for Common Stock, or carrying the right or
option to purchase or otherwise acquire the foregoing, in exchange for cash,
other property or services.
In the event of any (i) consolidation or merger of Ahmanson with or into any
entity (other than a consolidation or merger that does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares of
the Common Stock), (ii) sale, transfer, lease or conveyance of all or
substantially all of the assets of Ahmanson or (iii) reclassification, capital
reorganization or change of the Common Stock (other than solely a change in par
value, or from par value to no par value), then any holder of the Preferred
Stock will be entitled, on or after the occurrence of any such event, to
receive on conversion of the Preferred Stock the kind and amount of shares of
stock or other securities, cash or other property (or any combination thereof)
that the holder would have received had such holder converted such holder's
Preferred Stock to Common Stock immediately prior to the occurrence of such
event. If the consideration into which the Preferred Stock is convertible
following any such event consists of common stock of the surviving entity, then
from and after the occurrence of such event the
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conversion price for the conversion of each share of Preferred Stock into such
common stock will be subject to the same anti-dilution and other adjustments
described in the preceding paragraph, applied as if such common stock were
Common Stock.
If after the distribution date fixed for purposes of distributing to holders
of the Common Stock any stockholder protection, "poison pill" or other similar
rights to subscribe for securities of Ahmanson or any other entity
("Stockholder Rights"), converting holders of the Preferred Stock are not
entitled to receive Stockholder Rights that would otherwise be attributable
(but for the date of conversion) to the shares of Common Stock received upon
such conversion, then adjustment of the conversion rate will be made under
clause (iii) of the second preceding paragraph as if the Stockholder Rights
were then being distributed to holders of Ahmanson's Common Stock. If such an
adjustment is made and the Stockholder Rights are later redeemed, invalidated
or terminated, then a corresponding reversing adjustment will be made to the
conversion rate, on an equitable basis, to take account of such event. However,
Ahmanson may elect to make provision with respect to Stockholder Rights so that
each share of the Common Stock issuable upon conversion of the Preferred Stock,
whether or not issued after the distribution date for such Stockholder Rights,
will be accompanied by the Stockholder Rights that would otherwise be
attributable (but for the date of conversion) to such shares of Common Stock,
in which event the preceding two sentences will not apply. In June 1988
Ahmanson adopted a stockholder rights plan. See "Description of Common Stock--
Stockholder Rights Plan."
REDEMPTION
The terms, if any, on which shares of Preferred Stock of any series may be
redeemed will be set forth in the related Prospectus Supplement.
LIQUIDATION
Unless otherwise specified in the related Prospectus Supplement, in the event
of a voluntary or involuntary liquidation, dissolution or winding up of the
affairs of Ahmanson, the holders of a series of Preferred Stock will be
entitled, subject to the rights of creditors, but before any distribution or
payment to the holders of Junior Stock, on liquidation, dissolution or winding
up of Ahmanson, to receive an amount per share as set forth in the related
Prospectus Supplement plus accrued and unpaid dividends for the then-current
dividend period (including any accumulation in respect of unpaid dividends for
prior dividend periods, if dividends on such series of Preferred Stock are
cumulative). If the amounts available for distribution with respect to the
Preferred Stock and all other outstanding stock of Ahmanson ranking on a parity
with the Preferred Stock upon liquidation are not sufficient to satisfy the
full liquidation rights of all the outstanding Preferred Stock and Parity
Stock, then the holders of each series of such stock will share ratably in any
such distribution of assets in proportion to the full respective preferential
amounts (which in the case of preferred stock (including the Preferred Stock)
may include accumulated dividends) to which they are entitled. After payment of
the full amount of the liquidation preference, the holders of shares of
Preferred Stock will not be entitled to any further participation in any
distribution of assets by Ahmanson.
VOTING
The Preferred Stock of a series will not be entitled to vote, except as
provided below or in the related Prospectus Supplement and as required by
applicable law. Unless otherwise specified in the related Prospectus
Supplement, at any time dividends in an amount equal to six quarterly dividend
payments on cumulative Preferred Stock have accrued and are unpaid, holders of
such Preferred Stock will have the right to a separate class vote (together
with the holders of shares of any Parity Stock upon which like voting rights
have been conferred and are exercisable, "Voting Parity Stock") to elect two
members of the Board of Directors at the next annual meeting of stockholders
and thereafter until dividends on such Preferred Stock have been paid in full
for four consecutive dividend periods, including
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the last preceding dividend period. Additionally, without the affirmative vote
of the holders of two-thirds of such series of Preferred Stock then outstanding
(voting separately as a class together with any Voting Parity Stock), Ahmanson
may not, either directly or indirectly or through merger or consolidation with
any other corporation, (i) approve the authorization, creation or issuance, or
an increase in the authorized or issued amount, of any Senior Stock or (ii)
amend, alter or repeal its Certificate of Incorporation or the Certificate of
Designations so as to materially and adversely change the specific terms of
such Preferred Stock. An amendment (including an amendment effected indirectly
through a merger or consolidation) that increases the number of authorized
shares of or authorizes the creation or issuance of other classes or series of
preferred stock ranking on a parity with or junior to the Preferred Stock with
respect to the payment of dividends or distribution of assets upon liquidation,
dissolution or winding up, or substitutes the surviving entity in a merger,
consolidation, reorganization or other business combination for Ahmanson, will
not be considered to be such an adverse change.
As more fully described under "Description of Depositary Shares" below, if
Ahmanson elects to issue Depositary Shares, each representing a fraction of a
share of a series of Preferred Stock, each such Depositary Share will, in
effect, be entitled to such fraction of a vote per Depositary Share.
CERTAIN OWNERSHIP LIMITATIONS
Purchasers of Voting Securities (as defined below) will be subject to certain
restrictions and disclosure obligations under various federal laws, including
the Change in Bank Control Act ("CIBCA") which became applicable to savings
institutions and their holding companies pursuant to provisions of the
Financial Institutions Reform, Recovery, and Enforcement Act of 1989
("FIRREA"). As used herein, "Voting Securities" means Ahmanson Common Stock and
any series of Preferred Stock (including any Depositary Shares relating
thereto), Offered Debt Securities (as defined below, see "Description of Debt
Securities--General") or Securities Warrants entitled, or that could become
entitled, upon conversion, exercise or otherwise, to vote for the election of
directors of Ahmanson.
Regulations issued by the OTS pursuant to the CIBCA require prior OTS
approval for an acquisition of control of an insured institution (as defined)
or holding company thereof (such as Ahmanson) by any person (or persons acting
in concert). Control is deemed to exist if, among other things, a person (or
persons acting in concert) acquires more than 25% of any class of voting stock
of an insured institution or holding company thereof. If the holders of any
Voting Securities are or become entitled to vote for the election of directors
of Ahmanson, such Voting Securities could be considered to be a separate class
of voting stock. Purchasers of Voting Securities should therefore consider the
possibility that, if any Voting Securities are or become entitled to vote, the
holders of such Voting Securities could be deemed to control Ahmanson for the
purpose of such OTS regulations. Control is rebuttably presumed if a person (or
persons acting in concert) acquires more than 10% of any class of voting stock
or 25% or more of any class of nonvoting stock and is subject to any of the
"control factors" set forth in such regulations. The control factors relate,
among other matters, to the percentage of such company's debt and/or equity
owned by the person (or persons acting in concert), agreements giving the
person (or persons acting in concert) influence over a material aspect of the
company's operations, and the number of seats on the board of directors of the
company held by the person (or persons acting in concert). A "control factor"
exists if the acquiror would have the ability to direct the votes of more than
25% of a class of voting stock in the future upon the occurrence of a future
event. Because the Common Stock is voting stock, and the shares of any series
of Preferred Stock (including any Depositary Shares with respect thereto) could
become voting stock, purchasers of Voting Securities should consider the
possibility that they could be deemed or rebuttably deemed to control Ahmanson
for the purpose of such OTS regulations at the time that they purchase the
Voting Securities.
If a series of Preferred Stock, Offered Debt Securities or Securities
Warrants is immediately convertible into, or exercisable for the purchase of,
Common Stock, it will also be deemed for purposes of CIBCA to be voting stock
together with the Common Stock that would be issued upon conversion or
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exercise. In calculating their existing percentage ownership of such voting
stock, holders of such series of Preferred Stock, Offered Debt Securities or
Securities Warrants are required to include the number of shares of Common
Stock that would be issued upon conversion or exercise. In making the
calculation of a particular stockholder's ownership percentage, the number of
such shares that would be issued upon conversion or exercise must be added to
both the numerator (the number of shares held by such stockholder) and the
denominator (the total number of shares outstanding). The denominator is not
increased by the total number of shares of Common Stock that would be issued
upon such conversion or exercise, but rather by only the number of shares of
Common Stock that would be issued to the particular stockholder upon conversion
or exercise. In addition to the foregoing, as noted above, a series of
Preferred Stock or Debt Securities could be deemed to be a separate class of
voting stock.
In addition, with certain specific exceptions, a savings and loan holding
company is prohibited from acquiring more than 5% of the "voting shares" of a
savings association that is not a subsidiary, or of another savings and loan
holding company that is not a subsidiary. Shares of Preferred Stock could be
deemed to be "voting shares" for purposes of the Savings and Loan Holding
Company Act and may limit the amount of Preferred Stock that may be purchased
by another savings and loan holding company.
NO OTHER RIGHTS
The shares of a series of Preferred Stock will not have any preferences,
voting powers or relative, participating, optional or other special rights
except as set forth above or in the related Prospectus Supplement, the
Certificate of Incorporation and in the Certificate of Designations for such
series or as otherwise required by law.
TRANSFER AGENT AND REGISTRAR
The transfer agent for each series of Preferred Stock will be identified in
the related Prospectus Supplement.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below) and of the Depositary
Shares and Depositary Receipts does not purport to be complete and is subject
to and qualified in its entirety by reference to the Deposit Agreement and
Depositary Receipts relating to each series of the Preferred Stock that will be
filed as an exhibit to or incorporated by reference in the Registration
Statement of which this Prospectus is a part at or prior to the time of the
issuance of such series of the Preferred Stock.
GENERAL
Ahmanson may, at its option, elect to offer fractional interests in shares of
Preferred Stock, rather than shares of Preferred Stock. In the event such
option is exercised, Ahmanson will provide for the issuance by a Depositary to
the public of receipts for Depositary Shares ("Depositary Receipts"), each of
which will represent and evidence a fractional interest (to be set forth in the
Prospectus Supplement relating to a particular series of the Preferred Stock),
the form of which will be filed as an exhibit to or incorporated by reference
in the Registration Statement of which this Prospectus is a part at or prior to
the time of the issuance of such series of Preferred Stock.
The shares of any series of Preferred Stock underlying the Depositary Shares
will be deposited under a separate Deposit Agreement (the "Deposit Agreement")
between Ahmanson and a bank or trust company selected by Ahmanson having its
principal office in the United States (the "Depositary"). The Prospectus
Supplement relating to a series of Depositary Shares will set forth the name
and
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address of the Depositary. Subject to the terms of the Deposit Agreement, each
owner of a Depositary Share will be entitled, in proportion to the applicable
fractional interest in a share of Preferred Stock underlying such Depositary
Share, to all the rights and preferences of the Preferred Stock underlying such
Depositary Share (including dividend, voting, redemption, conversion and
liquidation rights).
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of Ahmanson, issue temporary Depositary
Receipts substantially identical to (and entitling the holders thereof to all
the rights pertaining to) the definitive Depositary Receipts but not in
definitive form. Definitive Depositary Receipts will be prepared thereafter
without unreasonable delay, and temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts at Ahmanson's expense.
Upon surrender of Depositary Receipts at the office of the Depositary and
upon payment of the charges provided in the Deposit Agreement and subject to
the terms thereof, a holder of Depositary Shares is entitled to have the
Depositary deliver to such holder the whole shares of Preferred Stock
underlying the Depositary Shares evidenced by the surrendered Depositary
Receipts, but holders of such whole shares of Preferred Stock will not
thereafter be entitled to deposit such shares with the Depositary or to receive
Depositary Receipts evidencing Depositary Shares therefor.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash distributions
received in respect of the Preferred Stock to the record holders of Depositary
Shares relating to such Preferred Stock in proportion to the numbers of such
Depositary Shares owned by such holders on the relevant record date. The
Depositary will distribute only such amount, however, as can be distributed
without attributing to any holder of Depositary Shares a fraction of one cent,
and any balance not so distributed will be added to and treated as part of the
next sum received by the Depositary for distribution to record holders of
Depositary Shares.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
Ahmanson, sell such property and distribute the net proceeds from such sale to
such holders.
The Deposit Agreement will also contain provisions relating to the manner in
which any subscription or similar rights offered by Ahmanson to holders of the
Preferred Stock will be made available to holders of Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
If a series of Preferred Stock underlying the Depositary Shares is subject to
redemption, the Depositary Shares will be redeemed from the proceeds received
by the Depositary relating to the redemption, in whole or in part, of such
series of Preferred Stock held by the Depositary. The Depositary will mail
notice of redemption not less than 30 and not more than 60 days prior to the
date fixed for redemption to the record holders of the Depositary Shares to be
so redeemed at their respective addresses appearing in the Depositary's books.
The redemption price per Depositary Share will be equal to the applicable
fraction of the redemption price per share payable with respect to such series
of Preferred Stock. Whenever Ahmanson redeems shares of Preferred Stock held by
the Depositary, the Depositary will redeem as of the same redemption date the
number of Depositary Shares relating to shares of Preferred Stock so redeemed.
If less than all the Depositary Shares are to be redeemed, the Depositary
Shares to be redeemed will be selected by lot or pro rata as may be determined
by the Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding, and all rights of the
holders of the Depositary Shares will cease, except
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the right to receive the moneys payable upon such redemption and any money or
other property to which the holders of such Depositary Shares were entitled
upon such redemption upon surrender to the Depositary of the Depositary
Receipts evidencing such Depositary Shares.
CONVERSION
With respect to a series of Preferred Stock underlying the Depositary Shares
that is convertible into Common Stock of Ahmanson or another series of
Preferred Stock, a holder of Depositary Shares may participate in the
conversion in the manner specified in the pertinent Certificate of Designations
for holders of the underlying Preferred Stock. If the Depositary Shares are to
be converted in part only, a new Depositary Receipt or new Depositary Receipts
for the Depositary Shares not to be converted will be issued by the Depositary.
No fractional shares of Common Stock will be issued upon conversion, and if
such conversion will result in a fractional share being issued, an amount will
be paid in cash by Ahmanson equal to the value of the fractional interest based
on the current market price (as defined in the Certificate of Designations) of
the Common Stock.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Stock) will be entitled to instruct the Depositary as to the exercise
of the voting rights pertaining to the number of shares of Preferred Stock
underlying such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the number of shares of Preferred Stock
underlying such Depositary Shares in accordance with such instructions, and
Ahmanson will agree to take all action which may be deemed necessary by the
Depositary in order to enable the Depositary to do so. The Depositary will
abstain from voting shares of Preferred Stock to the extent it does not receive
specific instructions from the holders of Depositary Shares relating to such
Preferred Stock.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between Ahmanson and the Depositary. However, any amendment that materially and
adversely alters the rights of the existing holders of Depositary Shares will
not be effective unless such amendment has been approved by the record holders
of at least a majority of the Depositary Shares then outstanding. A Deposit
Agreement may be terminated by Ahmanson or the Depositary only if (i) all
outstanding Depositary Shares relating thereto have been redeemed or (ii) there
has been a final distribution in respect of the Preferred Stock of the relevant
series in connection with any liquidation, dissolution or winding up of
Ahmanson, and such distribution has been distributed to the holders of the
related Depositary Shares.
CHARGES OF DEPOSITARY
Ahmanson will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. Ahmanson will
pay the charges of the Depositary in connection with the initial deposit of the
Preferred Stock and any redemption of the Preferred Stock. Holders of
Depositary Shares will pay other transfer and other taxes and governmental
charges and such other charges as are expressly provided in the Deposit
Agreement to be for their accounts.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Shares all reports
and communications from Ahmanson that are delivered to the Depositary and that
Ahmanson is required to furnish to the holders of the Preferred Stock.
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Neither the Depositary nor Ahmanson will be liable if either is prevented or
delayed by law or any circumstance beyond either's control in performing their
respective obligations under the Deposit Agreement. The obligations of Ahmanson
and the Depositary under the Deposit Agreement will be limited to performance
in good faith of their respective duties thereunder, and they will not be
obligated to prosecute or defend any legal proceeding in respect of any
Depositary Shares or Preferred Stock unless satisfactory indemnity is
furnished. They may rely upon written advice of counsel or accountants, or
information provided by persons presenting Preferred Stock for deposit, holders
of Depositary Shares or other persons believed to be competent and on documents
believed to be genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to Ahmanson notice of its
election to do so, and Ahmanson may at any time remove the Depositary, any such
resignation or removal to take effect upon the appointment of a successor
Depositary and its acceptance of such appointment. Such successor Depositary
must be appointed within 60 days after delivery of the notice of resignation or
removal and must be a bank or trust company having its principal office in the
United States and a combined capital and surplus of at least $50,000,000.
DESCRIPTION OF COMMON STOCK
GENERAL
Ahmanson's Certificate of Incorporation authorizes the issuance of
220,000,000 shares of Common Stock, par value $.01 per share. Subject to the
rights of holders of preferred stock then outstanding, including the Preferred
Stock offered hereby and the Series B Preferred Stock, the Series C Preferred
Stock and the Series D Preferred Stock, the holders of Common Stock are
entitled to receive such dividends as may be declared by the Board of Directors
from funds legally available therefor and, in the event of liquidation,
dissolution, winding up or bankruptcy, to receive pro rata all assets remaining
after payment of all obligations.
Each holder of Common Stock is entitled to one vote for each share held. The
shares of Common Stock do not have preemptive, subscription, conversion or
redemption rights and are not subject to further call or assessment. Purchasers
or holders of shares of Ahmanson Common Stock could be subject to certain
restrictions and disclosure obligations under various federal laws, including
CIBCA. See "Description of Preferred Stock--Certain Ownership Limitations."
FACTORS AFFECTING ACQUISITIONS OF CONTROL
The Certificate of Incorporation and Bylaws of Ahmanson contain certain
provisions that could have the effect of reducing Ahmanson's vulnerability to
possible takeover attempts that have not been negotiated with or approved by
the Board of Directors. These provisions require: (a) the calling of special
meetings of stockholders only by the Board of Directors or a committee of the
Board of Directors authorized by the Board of Directors to do so; (b) certain
mergers, business combinations and similar transactions to be approved by the
affirmative vote of at least 80% of the total voting power of all outstanding
securities held by disinterested stockholders (as defined in Ahmanson's
Certificate of Incorporation), unless such transactions have been approved by
two-thirds of the unaffiliated directors (as defined in Ahmanson's Certificate
of Incorporation); (c) action by the stockholders to be taken only at an annual
or special meeting and not by written consent; and (d) the stockholder vote
required to amend or repeal the provisions of the Certificate of Incorporation
and Bylaws described in clauses (a), (b) and (c) above and this clause (d) to
be not less than 80% of the total voting power of all outstanding securities
held by disinterested stockholders.
STOCKHOLDER RIGHTS PLAN
Ahmanson has a stockholder rights plan (the "Rights Plan") pursuant to which
Ahmanson has distributed one Common Stock purchase right (a "Primary Right")
and one preferred stock purchase
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right (a "Secondary Right") for each share of Common Stock outstanding. The
Rights Plan provides, with certain exceptions, that if any person becomes the
beneficial owner of 15% or more of Ahmanson's outstanding Common Stock without
first complying with a specified procedure designed to provide fair treatment
to all Ahmanson stockholders, then each Primary Right will entitle the holder
(other than such 15% stockholder) to purchase shares of Common Stock at 20% of
the then market price of such shares. The total number of shares of Common
Stock that may be purchased upon the exercise in full of all Primary Rights is
equal to 50% of the number of shares of Common Stock outstanding at the time
the Primary Rights become exercisable.
The Rights Plan further provides that upon the occurrence of certain events
that would result in the ownership of 25% or more of Ahmanson's outstanding
Common Stock by any person, each Secondary Right will entitle the holder (other
than any such potential 25% stockholder) to purchase, at the then current
Secondary Right exercise price (initially $60), one-one hundredth of a share of
a newly issued series of preferred stock. Each share of such preferred stock is
anticipated to have a value approximately equal to the value of one hundred
shares of Common Stock. If any person becomes a 25% stockholder, each
previously unexercised Secondary Right will entitle the holder (other than the
25% stockholder) to purchase, at the then current Secondary Right exercise
price, Common Stock having a market value equal to two times the then current
Secondary Right exercise price. If Ahmanson is merged into another corporation
or 50% or more of Ahmanson's assets are sold after any person has become a 15%
stockholder, each previously unexercised Secondary Right will entitle the
holder (other than any person who became a 15% stockholder prior to such merger
or sale of assets) to purchase, at the then current Secondary Right exercise
price, shares of the common stock of the acquiring corporation having a market
value equal to two times the Secondary Right exercise price.
The Primary Rights and Secondary Rights expire on August 8, 1998 unless
earlier redeemed. A majority of the independent directors of Ahmanson may
authorize the redemption of either or both of the Primary Rights and Secondary
Rights in whole, but not in part, at a price of $.01 per Primary Right or
Secondary Right prior to the date such Primary Right or Secondary Right becomes
exercisable. Until the rights become exercisable (upon a "Distribution Date" as
defined) they will be represented by the certificates for the Common Stock.
DESCRIPTION OF DEBT SECURITIES
The Senior Debt Securities will be issued under an Indenture (the "Senior
Indenture"), between Ahmanson and a trustee, that will be filed as an exhibit
to or incorporated by reference in the Registration Statement of which this
Prospectus is a part. The Subordinated Debt Securities will be issued under an
Indenture (the "Subordinated Indenture" and collectively with the Senior
Indenture, the "Indenture"), between Ahmanson and a trustee (collectively with
the trustee under the Senior Indenture, the "Trustee"), that will be filed as
an exhibit to or incorporated by reference in the Registration Statement of
which this Prospectus is a part. The following summaries of certain provisions
of the Indenture do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all of the provisions of the
Indenture, including the definitions therein of certain terms capitalized in
this Prospectus. Wherever particular sections, articles or defined terms of the
Indenture are referred to herein or in a Prospectus Supplement, such sections,
articles or defined terms are incorporated herein or therein by reference.
Unless specific reference is set forth below to the Senior Indenture or the
Subordinated Indenture, the provisions described below are substantially
identical in each such Indenture.
The Debt Securities may be issued from time to time in one or more series.
The particular terms of each series of Debt Securities offered by any
Prospectus Supplement or Prospectus Supplements will be described in such
Prospectus Supplement or Prospectus Supplements relating to such series.
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GENERAL
The Indenture does not limit the aggregate amount of Debt Securities that may
be issued thereunder, and Debt Securities may be issued from time to time in
separate series up to the aggregate amount from time to time authorized by
Ahmanson for each series. The Senior Debt Securities will be unsecured and will
rank on a parity with other unsecured Senior Indebtedness of Ahmanson. The
Subordinated Debt Securities will be unsecured and will rank on a parity with
other subordinated debt of Ahmanson and, together with such other subordinated
debt, will be subordinate and junior in right of payment to the prior payment
in full of the Senior Indebtedness of Ahmanson, as described below under
"Subordination."
The applicable Prospectus Supplement or Prospectus Supplements will describe,
to the extent applicable, each of the following terms of the series of Debt
Securities ("Offered Debt Securities") in respect of which this Prospectus is
being delivered: (1) the title of such Debt Securities; (2) any limit on the
aggregate principal amount of such Debt Securities; (3) whether any of such
Debt Securities are to be issuable in registered, bearer or global form and, if
such Securities are to be registered in temporary or permanent global form, the
identity of the depositary for such Global Security, and the terms and
conditions, if any, upon which (i) any interest thereon payable on an Interest
Payment Date prior to the issuance of a permanent Global Security or definitive
bearer Debt Securities will be credited to the accounts of the persons entitled
thereto on such Interest Payment Date and (ii) interests in such Offered Debt
Securities in global form may be exchanged, in whole or in part, for the
individual Debt Securities represented thereby; (4) the person to whom any
interest on any Offered Debt Security of the series will be payable if other
than the person in whose name such Debt Security is registered on the Regular
Record Date; (5) the date or dates on which the Offered Debt Securities will
mature; (6) the price (expressed as a percentage of the aggregate principal
amount thereof) at which such Debt Securities will be issued, and the rate or
rates (which may be fixed or variable) at which such Debt Securities will bear
interest, if any; (7) the date or dates from which any such interest will
accrue, the Interest Payment Dates on which any such interest on the Offered
Debt Securities will be payable and the Regular Record Date for any interest
payable on any Interest Payment Date; (8) each office or agency where the
principal of, premium (if any) and interest on the Offered Debt Securities will
be payable; (9) the period or periods within which, the events upon the
occurrence of which, and the price or prices at which, the Offered Debt
Securities may, pursuant to any optional or mandatory provisions, be redeemed
or purchased, in whole or in part, by Ahmanson and any terms and conditions
relevant thereto; (10) the denominations in which any registered Offered Debt
Securities will be issuable, if other than denominations of $1,000 and any
integral multiple thereof, and the denomination or denominations in which any
Offered Debt Securities that are bearer Debt Securities will be issuable, if
other than the denomination of $5,000; (11) the currency or currencies,
including composite currencies, of payment of principal of, and any premium and
interest on, the Offered Debt Securities if other than United States dollars;
(12) any index or formula used to determine the amount of payments of principal
of and any premium and interest on the Offered Debt Securities; (13) if other
than the principal amount thereof, the portion of the principal amount of the
Offered Debt Securities of the series that will be payable upon declaration of
the acceleration of the maturity thereof; (14) the applicability of the
provisions described under "Restrictive Covenants;" (15) any Events of Default
with respect to the Securities of such series, if not otherwise set forth under
"Events of Default;" (16) the applicability of the provisions described under
"Defeasance;" (17) whether the Offered Debt Securities are convertible into
shares of Common Stock, Preferred Stock, Depositary Shares or other securities,
and the terms of such convertibility and the securities into which the Offered
Debt Securities are convertible; (18) whether the Offered Debt Securities are
subordinate to any other unsecured indebtedness of Ahmanson; (19) whether the
Offered Debt Securities are being issued in exchange for outstanding debt
securities with one or more persons for resale; and (20) any other terms of the
Offered Debt Securities not inconsistent with the provisions of the Indenture.
In the event the Offered Debt Securities are convertible into shares of
Ahmanson Common Stock or any other voting stock of Ahmanson, holders of such
Debt Securities could be
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subject to certain restrictions and disclosure obligations under various
federal laws, including CIBCA. See "Description of Preferred Stock-Certain
Ownership Limitations."
Debt Securities may be issued at a discount from their principal amount.
Certain federal income tax considerations and other special considerations
applicable to any such Original Issue Discount Securities may be described in
the applicable Prospectus Supplement.
If the purchase price of any of the Debt Securities is denominated in a
foreign currency or currencies or a foreign currency unit or units or if the
principal of and any premium and interest on any series of Debt Securities is
payable in a foreign currency or currencies or a foreign currency unit or
units, the restrictions, elections, general tax considerations, specific terms
and other information with respect to such issue of Debt Securities and such
foreign currency or currencies or foreign currency unit or units will be set
forth in the applicable Prospectus Supplement.
FORM, EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
Debt Securities of a series may be issuable in definitive form solely as
registered Debt Securities, solely as bearer Debt Securities, or as both
registered and bearer Debt Securities. Unless otherwise indicated in the
Prospectus Supplement, bearer Debt Securities other than bearer Debt Securities
issued as temporary or permanent Global Securities will have interest coupons
attached. The Indenture also provides that bearer or registered Debt Securities
of a series may be issuable as permanent Global Securities. (Section 201)
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal, premium (if any) and interest on Debt Securities issued in
registered form will be payable, and the exchange of and the transfer of such
Debt Securities will be registrable, at the office or agency of Ahmanson
maintained for such purpose and at any other office or agency maintained for
such purpose. (Sections 301, 305 and 1002) No bearer Debt Security or coupon
appertaining thereto will be mailed or delivered to any location in the United
States, except as otherwise described in the applicable Prospectus Supplement.
(Section 303) Unless otherwise indicated in the applicable Prospectus
Supplement, registered Debt Securities will be issued in denominations of
$1,000 or integral multiples thereof. (Section 302) No service charge will be
made for any registration of transfer or exchange of the Debt Securities, but
Ahmanson may require payment of a sum sufficient to cover any tax or other
governmental charge imposed in connection therewith. (Section 305)
Registered Debt Securities of any series will be exchangeable for other
registered Debt Securities of the same series of authorized denominations and
of a like aggregate principal amount, tenor and terms. In addition, if Debt
Securities of any series are issuable as both registered and bearer Debt
Securities, at the option of the Holder upon request confirmed in writing, and
subject to the terms of the applicable Indenture, bearer Debt Securities (with
all unmatured coupons, except as provided below, and all matured coupons in
default) of such series will be exchangeable into registered Debt Securities of
the same series of any authorized denominations and of a like aggregate
principal amount, tenor and terms. Bearer Debt Securities surrendered in
exchange for registered Debt Securities between the close of business on a
Regular Record Date or a Special Record Date and the relevant date for payment
of interest shall be surrendered without the coupon relating to such date for
payment of interest, and interest will not be payable in respect of the
registered Debt Security issued in exchange for such bearer Debt Security, but
will be payable only to the Holder of such coupon when due in accordance with
the terms of the applicable Indenture. Bearer Debt Securities will not be
issued in exchange for registered Debt Securities. (Section 305) Each bearer
Debt Security, other than a temporary Global Security issued in bearer form,
and each interest coupon will bear the following legend or any other legend
required by the Internal Revenue Code as then in effect: "Any United States
Person who holds this obligation will be subject to limitations under the
United States Federal income tax laws including the limitations provided in
Sections 165(j) and 1287(a) of the Internal Revenue Code."
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If the applicable Prospectus Supplement refers to any transfer agent
initially designated by Ahmanson with respect to any series of Debt Securities,
Ahmanson may at any time rescind the designation of any such transfer agent or
approve a change in the location through which any transfer agent acts, except
that, if Debt Securities of a series are issuable solely in registered form,
Ahmanson will be required to maintain a transfer agent in each Place of Payment
for such series and, if Debt Securities of a series are issuable in bearer
form, Ahmanson will be required to maintain a transfer agent in a Place of
Payment for such series located outside the United States. Ahmanson may at any
time designate additional transfer agents with respect to any series of Debt
Securities. (Section 1002)
Ahmanson will not be required (1) to issue, register the transfer of or
exchange Debt Securities of any particular series to be redeemed or exchanged
for a period of fifteen days preceding the first publication of the relevant
notice of redemption or, if registered Debt Securities are outstanding and
there is no publication, the mailing of the relevant notice of redemption or
exchange, (2) to register the transfer of or exchange any registered Debt
Securities so selected for redemption in whole or in part, except the
unredeemed or unchanged portion of any registered Debt Security being redeemed
in part or (3) to exchange any bearer Debt Security so selected for redemption
except that such a bearer Debt Security may be exchanged for a registered Debt
Security of like tenor and terms of that series; provided, however, that such
registered Debt Security shall be surrendered for redemption or exchange.
(Section 305)
All moneys paid by Ahmanson to a Paying Agent for the payment of principal or
any premium or interest on any Debt Security that remain unclaimed for two
years after such principal, premium or interest has become due and payable may
be repaid to Ahmanson, and thereafter the Holder of such Debt Security or any
coupon appertaining thereto may look only to Ahmanson for payment thereof.
(Section 1003)
BOOK-ENTRY DEBT SECURITIES
The Debt Securities of a series may be issued in the form of one or more
Global Securities that will be deposited with a Depositary or its nominee
identified in the applicable Prospectus Supplement. In such a case, one or more
Global Securities will be issued in a denomination or aggregate denominations
equal to the portion of the aggregate principal amount of outstanding Debt
Securities of the series to be represented by such Global Security or
Securities. Unless and until it is exchanged in whole or in part for Debt
Securities in registered form, a Global Security may not be registered for
transfer or exchange except as a whole by the Depositary for such Global
Security to a nominee of such Depositary and except in such circumstances as
may be described in the applicable Prospectus Supplement. (Sections 204 and
305)
The specific terms of the depositary arrangement with respect to any portion
of a series of Debt Securities to be represented by a Global Security will be
described in the applicable Prospectus Supplement. Ahmanson expects that the
following provisions will apply to depositary arrangements.
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities that are to be represented by a Global Security to be deposited with
or on behalf of a Depositary will be represented by a Global Security
registered in the name of such Depositary or its nominee. Upon the issuance of
such Global Security, and the deposit of such Global Security with or on behalf
of the Depositary for such Global Security, the Depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts
of the Debt Securities represented by such Global Security to the accounts of
institutions that have accounts with such Depositary or its nominee
("participants"). The accounts to be credited will be designated by the
underwriters or agents of such Debt Securities or by Ahmanson, if such Debt
Securities are offered and sold directly by Ahmanson. Ownership of beneficial
interests in such Global Security will be limited to participants or Persons
that may hold Interests through participants. Ownership of beneficial interests
by participants in such Global Security
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will be shown on, and the transfer of that ownership interest will be effected
only through, records maintained by the Depositary or its nominee for such
Global Security. Ownership of beneficial interests in such Global Security by
Persons that hold through a participant will be shown on, and the transfer of
that ownership interest within such participant will be effected only through,
records maintained by such participant. The laws of some jurisdictions require
that certain purchasers of securities take physical delivery of such securities
in certificated form. The foregoing limitations and such laws may impair the
ability to transfer beneficial interests in such Global Securities.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or Holder of the Securities
represented by such Global Security for all purposes under the Indenture.
Unless otherwise specified in the applicable Prospectus Supplement, owners of
beneficial interests in such Global Security will not be entitled to have Debt
Securities of the series represented by such Global Security registered in
their names, will not receive or be entitled to receive physical delivery of
Debt Securities of such series in certificated form and will not be considered
the Holders thereof for any purposes under the Indenture, except that the
rights of the beneficial owners of such interests to receive payment of the
principal of and interest on such Securities, on or after the respective due
dates expressed in such Securities, or to institute suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or
affected without the consent of the beneficial owners of such interests.
(Sections 204 and 305) Accordingly, each Person owning a beneficial interest in
such Global Security must rely on the procedures of the Depositary and, if such
Person is not a participant, on the procedures of the participant through which
such Person owns its interest, to exercise any rights of a Holder under the
Indenture. Ahmanson understands that under existing industry practices, if
Ahmanson requests any action of Holders or an owner of a beneficial interest in
such Global Security desires to give any notice or take any action a Holder is
entitled to give or take under the Indenture, the Depositary would authorize
the participants to give such notice or take such action, and participants
would authorize beneficial owners owning through such participants to give such
notice or take such action or would otherwise act upon the instructions of
beneficial owners owning through them.
Principal of and any premium and interest on a Global Security will be
payable in the manner described in the applicable Prospectus Supplement.
TEMPORARY GLOBAL SECURITIES
If so specified in the applicable Prospectus Supplement, all or any portion
of the Debt Securities of a series that are issuable as bearer Debt Securities
will initially be represented by one or more temporary Global Securities,
without interest coupons, to be deposited with a common depositary, appointed
by Ahmanson, for credit to designated accounts. On and after the date
determined as provided in any such temporary Global Security and described in
the applicable Prospectus Supplement, but within a reasonable time, each such
temporary Global Security will be exchangeable for definitive bearer Debt
Securities, definitive registered Debt Securities or all or a portion of a
permanent bearer Global Security, or any combination thereof, as specified in
such Prospectus Supplement. No definitive bearer Debt Security or permanent
bearer Global Security delivered in exchange for a portion of a temporary
Global Security shall be mailed or otherwise delivered to any location in the
United States in connection with such exchange. Additional information
regarding restrictions on and special United States federal income tax
consequences relating to temporary Global Securities will be set forth in the
Prospectus Supplement relating thereto.
PAYING AGENTS FOR BEARER DEBT SECURITIES
Unless otherwise indicated in the applicable Prospectus Supplement, payments
of principal of and premium, if any, and interest, if any, on bearer Debt
Securities will be payable, subject to any applicable laws and regulations, at
such Paying Agencies outside the United States (or its possessions) as
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Ahmanson may appoint from time to time. Unless otherwise indicated in the
applicable Prospectus Supplement, payment of interest on bearer Debt Securities
on any Interest Payment Date will be made only against surrender of the coupon
relating to such Interest Payment Date to a Paying Agent outside the United
States. (Sections 1001 and 1002) No payment with respect to any bearer Debt
Security will be made at any office or Paying Agency maintained by Ahmanson in
the United States nor will any such payment be made by transfer to an account,
or by mail to an address, in the United States. Notwithstanding the foregoing,
payments of principal of and premium, if any, and interest, if any, on bearer
Debt Securities will be made at an office or agency of, and designated by,
Ahmanson located in the United States, if payment of the full amount thereof at
all Paying Agencies outside the United States is illegal or effectively
precluded by exchange controls or other similar restrictions, and the Trustee
receives an opinion of counsel that such payment within the United States is
legal. (Section 1002)
The Paying Agents outside the United States initially appointed by Ahmanson
for a series of Debt Securities will be named in the applicable Prospectus
Supplement. Ahmanson may terminate the appointment of any of such Paying Agents
from time to time, except that Ahmanson will maintain at least one Paying Agent
in the City of New York for payments with respect to bearer Debt Securities
under the limited circumstances described above, and at least one Paying Agent
outside the United States so long as any bearer Debt Securities are
outstanding, where such bearer Debt Securities may be presented for payment and
may be surrendered for exchange, provided that so long as any series of Debt
Securities is listed on The International (London) Stock Exchange or any other
stock exchange located outside the United States, and such stock exchange shall
so require, Ahmanson will maintain a Paying Agent in London or any other
required city located outside the United States, as the case may be, for such
series of Debt Securities. (Section 1002)
RESTRICTIVE COVENANTS
The Indenture provides that, unless otherwise specified therein with respect
to a series of Offered Debt Securities, Ahmanson (a) will not (i) sell,
transfer or otherwise dispose of any shares of the Voting Stock of Home Savings
or (ii) permit Home Savings to issue, sell or otherwise dispose of shares of
its Voting Stock unless in either case Home Savings remains a Controlled
Subsidiary and (b) will not permit Home Savings to (i) merge or consolidate
unless the surviving entity is Ahmanson or a Controlled Subsidiary or (ii)
convey or transfer its properties and assets substantially as an entirety to
any person, except to Ahmanson or a Controlled Subsidiary. (Section 1008)
However, Ahmanson may avoid this restriction if prior to any such transaction
Home Savings unconditionally guarantees payment when due of the principal of,
premium, if any, and interest on the Debt Securities, Home Savings obtains all
regulatory approvals, if any, required to permit such guarantee, and Ahmanson
obtains an opinion of counsel pertaining to such guarantee. For purposes of
these covenants, Home Savings includes any successor but not a Subsidiary of
Home Savings, "Controlled Subsidiary" means any Person at least 80% of the
outstanding shares of Voting Stock (except for directors' qualifying shares) of
which is at the time owned directly or indirectly by Ahmanson and "Voting
Stock" of any Person means stock of any class or classes, however designated,
having ordinary voting power for the election of a majority of the board of
directors of such Person, other than stock having such power only by reason of
the occurrence of a contingency. (Sections 101 and 1008)
The Indenture also provides that, unless otherwise specified with respect to
a series of Offered Debt Securities, Ahmanson will not create, assume, incur or
suffer to exist, as security for indebtedness for borrowed money any mortgage,
pledge, encumbrance, lien or charge of any kind upon the Voting Stock of Home
Savings (other than directors' qualifying shares) without effectively providing
that such series of Offered Debt Securities is secured equally and ratably with
(or prior to) such indebtedness; provided, however, that Ahmanson may create,
assume, incur or suffer to exist any such mortgage, pledge, encumbrance, lien
or charge without regard to the foregoing provisions so long as after giving
effect thereto Ahmanson will own directly or indirectly at least 80% of the
Voting Stock of Home Savings then issued and outstanding, free and clear of any
such mortgage, pledge, encumbrance, lien or charge.
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Ahmanson may also avoid this restriction if prior to creating, assuming,
incurring or suffering to exist any such mortgage, pledge, encumbrance, lien or
charge, Home Savings unconditionally guarantees payment when due of the
principal of, premium, if any, and interest on the Debt Securities, Home
Savings obtains all regulatory approvals, if any, required to permit such
guarantee, and Ahmanson obtains an opinion of counsel pertaining to such
guarantee.
The Indenture does not restrict Ahmanson from incurring, assuming or becoming
liable for any type of debt or from creating, assuming, incurring or permitting
to exist any mortgage, pledge, encumbrance, lien or charge on its property
(except the Voting Stock of Home Savings). The Indenture does not require
Ahmanson to maintain any financial ratios or specified levels of net worth or
liquidity.
Unless otherwise indicated in the applicable Prospectus Supplement with
respect to a series of Offered Debt Securities, the covenants contained in the
Indenture would not necessarily provide Holders of Debt Securities any
protection in the event of a highly leveraged or other transaction involving
Ahmanson that may adversely affect Holders.
Any additional restrictive covenants with respect to any series of Offered
Debt Securities, and any variations from the foregoing restrictive covenants
applicable to any series of Offered Debt Securities, will be described in the
applicable Prospectus Supplement.
EVENTS OF DEFAULT
Unless otherwise specified in the Indenture relating to a series of Offered
Debt Securities, the following are Events of Default under the Indenture with
respect to Debt Securities of any series: (a) failure to pay principal of or
premium, if any, on any Debt Security of that series when due; (b) failure to
pay any interest on any Debt Security of that series when due, continued for 30
days; (c) failure to make any sinking fund payment, when due, in respect of any
Debt Security of that series; (d) failure to perform any other covenant of
Ahmanson in the Indenture (other than a covenant included in the Indenture
solely for the benefit of a series of Debt Securities other than that series),
continued for 60 days after written notice as provided in the Indenture; (e) a
default under any evidence of indebtedness for money borrowed by Ahmanson or
Home Savings (including a default with respect to Debt Securities of any other
series) having an aggregate principal amount outstanding of at least
$10,000,000 or under any instrument under which there may be issued or by which
there may be secured or evidenced any indebtedness for money borrowed by
Ahmanson or Home Savings (including the Indenture) having an aggregate
principal amount outstanding of at least $10,000,000, whether such indebtedness
exists as of the date of the Indenture or is thereafter created, which default
will constitute a failure to pay any portion of the principal of such
indebtedness when due and payable or will result in the acceleration of such
indebtedness, without such indebtedness having been discharged, or such
acceleration having been rescinded or annulled, within 35 days after written
notice to Ahmanson by the Trustee or by the Holders of at least 25% in
principal amount of the Outstanding Debt Securities of such series as provided
in the Indenture (unless Ahmanson or Home Savings is contesting the validity of
such event in good faith by appropriate proceedings); (f) certain events of
bankruptcy, insolvency or reorganization; and (g) any other Event of Default
provided with respect to Debt Securities of that series. (Section 501) If an
Event of Default with respect to Outstanding Debt Securities of any series
shall occur and be continuing, either the Trustee or the Holders of at least
25% in principal amount of the Outstanding Debt Securities of that series by
notice as provided in the Indenture may declare the principal amount (or, if
the Debt Securities of that series are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of that
series) of all Debt Securities of that series to be due and payable
immediately. However, at any time after a declaration of acceleration with
respect to Debt Securities of any series has been made, but before a judgment
or decree based on such acceleration has been obtained, the Holders of a
majority in principal amount of the Outstanding Debt Securities of that series
may, under certain circumstances, rescind and annul such acceleration. (Section
502) For information as to waiver of defaults, see "Modification and Waiver."
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Any additional Events of Default with respect to any series of Offered Debt
Securities, and any variations from the foregoing Events of Default applicable
to any series of Offered Debt Securities will be described in the applicable
Prospectus Supplement.
The Indenture provides that, subject to the duty of the Trustee during an
Event of Default to act with the required standard of care, the Trustee will be
under no obligation to exercise any of its rights or powers under the Indenture
at the request or direction of any of the Holders, unless such Holders have
offered to the Trustee reasonable security or indemnity. (Sections 601 and 603)
Subject to certain provisions, including those requiring security or
indemnification of the Trustee, the Holders of a majority in principal amount
of the Outstanding Debt Securities of any series will have the right to direct
the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee, with respect to the Debt Securities of that series. (Section 512)
Ahmanson will be required to furnish to the Trustee annually a statement as
to the performance by Ahmanson of its obligations under the Indenture and as to
any default in such performance. (Section 1004)
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by Ahmanson and the
Trustee with the consent of the Holders of not less than a majority in
principal amount of the Outstanding Debt Securities of each series affected
thereby; provided, however, that no such modification or amendment may, without
the consent of the Holder of each Outstanding Debt Security affected thereby:
(a) change the Stated Maturity of the principal of, or any installment of
principal of, or interest on, any Debt Security; (b) reduce the principal
amount of, the rate of interest on, or the premium, if any, payable upon the
redemption of, any Debt Security; (c) reduce the amount of principal of an
Original Issue Discount Security payable upon acceleration of the maturity
thereof; (d) change the place or currency of payment of principal of, or
premium, if any, or interest on any Debt Security; (e) impair the right to
institute suit for the enforcement of any payment on or with respect to any
Debt Security on or after the Stated Maturity or Redemption Date thereof; (f)
in the case of Debt Securities convertible into any security, impair any right
to convert such Debt Securities; (g) reduce the percentage in principal amount
of Outstanding Debt Securities of any series if the consent of the Holders of
such series is required for modification or amendment of the Indenture or for
waiver of compliance with certain provisions of the Indenture or for waiver of
certain defaults; or (h) in the case of Subordinated Debt Securities, modify
the provisions of the Indenture with respect to subordination of such
Subordinated Debt Securities in a manner adverse to the Holders. (Section 902)
The Holders of at least a majority in principal amount of the Outstanding Debt
Securities of any series may on behalf of the Holders of all Debt Securities of
that series waive, insofar as that series is concerned, compliance by Ahmanson
with certain covenants of the Indenture. (Section 1009) The Holders of not less
than a majority in principal amount of the Outstanding Debt Securities of any
series may, on behalf of the Holders of all Debt Securities of that series,
waive any past default under the Indenture with respect to that series, except
a default in the payment of the principal of, or premium, if any, or interest
on, any Debt Security of that series or in respect of a provision that under
the Indenture cannot be modified or amended without the consent of the Holder
of each Outstanding Debt Security of the series affected. (Section 513)
Each Indenture contains provisions for convening meetings of the Holders of
Debt Securities of a series issued thereunder if Debt Securities of that series
are issuable in whole or in part as bearer Debt Securities. (Section 1501 of
the Senior Indenture, Section 1601 of the Subordinated Indenture) A meeting may
be called at any time by the Trustee for such Debt Securities, or upon the
request of Ahmanson or the Holders of at least 10% in principal amount of the
Outstanding Debt Securities of such series, in any such case upon notice given
in accordance with the Indenture with respect thereto. (Section 1502 of the
Senior Indenture, Section 1602 of the Subordinated Indenture) Except as limited
by the proviso in the first sentence of the preceding paragraph, any resolution
presented at a meeting or adjourned meeting at which a quorum is present may be
adopted by the affirmative vote of the
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Holders of a majority in principal amount of the Outstanding Debt Securities of
that series; provided, however, that, except as limited by the proviso in the
first sentence of the preceding paragraph, any resolution with respect to any
demand, consent, waiver or other action that may be made, given or taken by the
Holders of a specified percentage that is less than a majority in principal
amount of the Outstanding Debt Securities of a series issued under an Indenture
may be adopted at a meeting or adjourned meeting at which a quorum is present
by the affirmative vote of the Holders of such specified percentage in
principal amount of the Outstanding Debt Securities of that series. (Section
1504 of the Senior Indenture, Section 1604 of the Subordinated Indenture)
Any resolution passed or decision taken at any meeting of Holders of Debt
Securities of any series duly held in accordance with the applicable Indenture
will be binding on all Holders of Debt Securities of that series and the
related coupons issued under that Indenture. The quorum at any meeting of
Holders of a series of Debt Securities called to adopt a resolution, and at any
reconvened meeting, will be persons holding or representing a majority in
principal amount of the Outstanding Debt Securities of such series. (Section
1504 of the Senior Indenture, Section 1604 of the Subordinated Indenture)
CONSOLIDATION, MERGER AND SALE OF ASSETS
Ahmanson, without the consent of any Holders of Outstanding Debt Securities,
may consolidate with or merge into, or transfer or lease its assets
substantially as an entirety to, any Person, and any other Person may
consolidate with or merge into, or transfer or lease its assets substantially
as an entirety to, Ahmanson, provided that (a) the Person (if other than
Ahmanson) formed by such consolidation or into which Ahmanson is merged or
which acquires or leases the assets of Ahmanson substantially as an entirety is
a Person organized and existing under the laws of any United States
jurisdiction and assumes Ahmanson's obligations on the Debt Securities and
under the Indenture, (b) after giving effect to such transaction no Event of
Default, and no event that, after notice or lapse of time or both, would become
an Event of Default, happened and is continuing, and (c) certain other
conditions are met. (Section 801)
DEFEASANCE
Unless otherwise indicated in the applicable Prospectus Supplement with
respect to the Debt Securities of a series, Ahmanson, at its option, (i) will
be discharged from any and all obligations in respect of the Debt Securities of
such series (except for certain obligations to register the transfer or
exchange of Debt Securities of such series, to replace destroyed, stolen, lost
or mutilated Debt Securities of such series, and to maintain Paying Agents and
hold moneys for payment in trust) or (ii) need not comply with the provisions
under Section 1005 through 1008, inclusive, in the Indenture, and the
occurrence of an event described in clause (d) under "Events of Default" above
with respect to any such covenant and clauses (e) and (g) of the "Events of
Default" above shall no longer be an Event of Default if, in either case,
Ahmanson deposits with the Trustee, in trust, money or U.S. Government
Obligations that through the payment of interest thereon and principal thereof
in accordance with their terms will provide money in an amount sufficient to
pay all the principal of (and premium, if any) and any interest on the Debt
Securities of such series on the dates such payments are due (which may include
one or more redemption dates designated by Ahmanson) in accordance with the
terms of such Debt Securities. (Sections 1402 and 1403) Such a trust may only
be established if, among other things, (a) no Event of Default or event that
with the giving of notice or lapse of time, or both, would become an Event of
Default under the Indenture has occurred and is continuing on the date of such
deposit, (b) no Event of Default described under clause (f) under "Events of
Default" above or event that with the giving of notice or lapse of time, or
both, would become an Event of Default described under such clause (f) shall
have occurred and be continuing at any time during the period ending on the
91st day following such date of deposit, and (c) Ahmanson shall have delivered
an Opinion of Counsel to the effect that the Holders of the Debt Securities
will not recognize gain or loss for Federal income tax purposes as a result of
such deposit or defeasance and will be subject to Federal
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income tax in the same manner as if such defeasance had not occurred. In the
event Ahmanson omits to comply with its remaining obligations under the
Indenture after a defeasance of the Indenture with respect to the Debt
Securities of any series as described under clause (ii) above, and the Debt
Securities of such series are declared due and payable because of the
occurrence of any Event of Default, the amount of money and U.S. Government
Obligations on deposit with the Trustee may be insufficient to pay amounts due
on the Debt Securities of such series at the time of the acceleration resulting
from such Event of Default. However, Ahmanson will remain liable in respect of
such payments. (Section 1404)
SUBORDINATION
The payment of the principal of and interest on the Subordinated Debt
Securities will, to the extent set forth in the Indenture relating thereto, be
subordinated in right of payment to the prior payment in full of all Senior
Indebtedness (as defined). 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, receivership or similar proceedings of Ahmanson, the
holders of all Senior Indebtedness will first be entitled to receive payment in
full of all amounts due or to become due thereon before the Holders of the
Subordinated Debt Securities will be entitled to receive any payment in respect
of the principal of or interest thereon. In the event of the acceleration of
the maturity of any Subordinated Debt Securities, the holders of all Senior
Indebtedness will first be entitled to receive payment in full of all amounts
due thereon before the Holders of the Subordinated Debt Securities will be
entitled to receive any payment upon the principal of or interest thereon. No
payments on account of principal or interest in respect of the Subordinated
Debt Securities may be made if there shall have occurred and be continuing
beyond any applicable grace period a default in any payment with respect to
Senior Indebtedness, or if there shall have occurred an event of default with
respect to any Senior Indebtedness permitting the holders thereof to accelerate
the maturity thereof, or if any judicial proceeding shall be pending with
respect to any such default. (Article Fifteen of the Subordinated Indenture)
By reason of such subordination, in the event of insolvency, Holders of the
Subordinated Debt Securities may recover less, ratably, than other creditors of
Ahmanson, including holders of Senior Indebtedness.
"Senior Indebtedness" is defined in the Indenture to mean the principal of
(and premium, if any) and interest on (a) all indebtedness of Ahmanson
(including indebtedness of others guaranteed by Ahmanson) other than the
Subordinated Debt Securities and other than Ahmanson's 9.875% Subordinated
Notes Due 1999, which is (i) for money borrowed or (ii) evidenced by a note or
similar instrument given in connection with the acquisition of any businesses,
properties or assets of any kind, (b) obligations of Ahmanson as lessee under
leases required to be capitalized on the balance sheet of the lessee under
generally accepted accounting principles and leases of property or assets made
as part of any sale and lease-back transaction to which Ahmanson is a party and
(c) amendments, renewals, extensions, modifications and refundings of any such
indebtedness or obligation, unless in any case in the instrument creating or
evidencing any such indebtedness or obligation or pursuant to which the same is
outstanding it is provided that such indebtedness or obligation is not superior
in right of payment to the Subordinated Debt Securities or such indebtedness or
obligation is subordinated to senior indebtedness of Ahmanson to substantially
the same extent as the Subordinated Debt Securities are subordinated to the
Senior Indebtedness, in each case whether such indebtedness or obligation is
outstanding on the date of the Indenture or thereafter created, incurred or
assumed. (Section 101 of the Subordinated Indenture) The Indenture relating to
the Subordinated Debt Securities does not prohibit or limit the incurrence of
additional Senior Indebtedness.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the state specified in the Indenture and the
applicable Prospectus Supplement. (Section 112)
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REGARDING THE TRUSTEE
The Indenture contains certain limitations on the right of the Trustee,
should it become a creditor of Ahmanson, to obtain payment of claims in certain
cases, or to realize for its own account on certain property received in
respect of any such claim as security or otherwise. (Section 613) The Trustee
will be permitted to engage in certain other transactions; provided, however,
that if it acquires any conflicting interest and there is a default under the
Debt Securities, it must eliminate such conflict or resign. (Section 608)
DESCRIPTION OF SECURITIES WARRANTS
Ahmanson may issue Securities Warrants for the purchase of Debt Securities,
Preferred Stock, Depositary Shares or Common Stock. Securities Warrants may be
issued independently or together with Debt Securities, Preferred Stock,
Depositary Shares or Common Stock offered by any Prospectus Supplement and may
be attached to or separate from such Debt Securities, Preferred Stock,
Depositary Shares or Common Stock. Each series of Securities Warrants will be
issued under a separate warrant agreement (a "Securities Warrant Agreement") to
be entered into between Ahmanson and a bank or trust company, as Securities
Warrant agent, all as set forth in the Prospectus Supplement relating to the
particular issue of offered Securities Warrants. The Securities Warrant agent
will act solely as an agent of the Company in connection with the Securities
Warrant certificates relating to the Securities Warrants and will not assume
any obligation or relationship of agency or trust for or with any holders of
Securities Warrant certificates or beneficial owners of Securities Warrants.
Copies of the forms of Securities Warrant Agreements, including the forms of
Securities Warrant certificates representing the Securities Warrants, are filed
as exhibits to the Registration Statement to which this Prospectus pertains.
The following summaries of certain provisions of the forms of Securities
Warrant Agreements and Securities Warrant certificates do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Securities Warrant Agreements and the Securities
Warrant certificates.
GENERAL
If Securities Warrants are offered, the applicable Prospectus Supplement will
describe the terms of such Securities Warrants, including, in the case of
Securities Warrants for the purchase of Debt Securities, the following where
applicable: (i) the offering price; (ii) denominations and terms of the series
of Debt Securities purchasable upon exercise of such Securities Warrants; (iii)
the designation and terms of any series of Debt Securities, Preferred Stock or
Depositary Shares with which such Securities Warrants are being offered and the
number of such Securities Warrants being offered with each such Debt Security,
Preferred Stock or Depositary Share; (iv) the date on and after which such
Securities Warrants and the related series of Debt Securities, Preferred Stock
or Depositary Shares will be transferable separately; (v) the principal amount
of the series of Debt Securities purchasable upon exercise of each such
Securities Warrant and the price at which such principal amount of Debt
Securities of such series may be purchased upon such exercise; (vi) the date on
which the right to exercise such Securities Warrants shall commence and the
date (the "Expiration Date") on which such right shall expire; (vii) whether
the Securities Warrants will be issued in registered or bearer form; (viii) any
special United States Federal income tax consequences; (ix) the terms, if any,
on which Ahmanson may accelerate the date by which the Securities Warrants must
be exercised; and (x) any other terms of such Securities Warrants.
In the case of Securities Warrants for the purchase of Preferred Stock,
Depositary Shares or Common Stock, the applicable Prospectus Supplement will
describe the terms of such Securities Warrants, including the following where
applicable; (i) the offering price; (ii) the aggregate number of shares
purchasable upon exercise of such Securities Warrants, the exercise price, and
in the case of Securities Warrants for Preferred Stock or Depositary Shares,
the designation, aggregate number and
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terms of the series of Preferred Stock purchasable upon exercise of such
Securities Warrants or underlying the Depositary Shares purchasable upon
exercise of such Securities Warrants; (iii) the designation and terms of the
series of Debt Securities, Preferred Stock or Depositary Shares with which
such Securities Warrants are being offered and the number of such Securities
Warrants being offered with each such Debt Security, Preferred Stock or
Depositary Share; (iv) the date on and after which such Securities Warrants
and the related series of Debt Securities, Preferred Stock, Depositary Shares
or Common Stock will be transferable separately; (v) the date on which the
right to exercise such Securities Warrants shall commence and the Expiration
Date; (vi) any special United States Federal income tax consequences; and
(vii) any other terms of such Securities Warrants. Securities Warrants for the
purchase of Preferred Stock, Depositary Shares or Common Stock will be offered
and exercisable for United States dollars only and will be in registered form
only.
Securities Warrant certificates may be exchanged for new Securities Warrant
certificates of different denominations, may (if in registered form) be
presented for registration of transfer, and may be exercised at the corporate
trust office of the Securities Warrant agent or any other office indicated in
the applicable Prospectus Supplement. Prior to the exercise of any Securities
Warrant to purchase Debt Securities, holders of such Securities Warrants will
not have any of the rights of Holders of the Debt Securities purchasable upon
such exercise, including the right to receive payments of principal of,
premium, if any, or interest, if any, on such Debt Securities or to enforce
covenants in the applicable indenture. Prior to the exercise of any Securities
Warrants to purchase Preferred Stock, Depositary Shares or Common Stock,
holders of such Securities Warrants will not have any rights of holders of
such Preferred Stock, Depositary Shares or Common Stock, including the right
to receive payments of dividends, if any, on such Preferred Stock or Common
Stock, or to exercise any applicable right to vote.
CERTAIN RISK CONSIDERATIONS
Any Securities Warrants issued by Ahmanson will involve a high degree of
risk, including risks arising from fluctuations in the price of the underlying
securities and general risks applicable to the stock market (or markets) on
which the underlying securities are traded.
Prospective purchasers of the Securities Warrants should recognize that the
Securities Warrants may expire worthless and, thus, purchasers should be
prepared to sustain a total loss of the purchase price of their Securities
Warrants. This risk reflects the nature of a Securities Warrant as an asset
which, other factors held constant, tends to decline in value over time and
which may, depending on the price of the underlying securities, become
worthless when it expires. The trading price of a Securities Warrant at any
time is expected to increase if the price, volatility or, if applicable,
dividend rate on the underlying securities, increases. Conversely, the trading
price of a Securities Warrant is expected to decrease as the time remaining to
expiration of the Securities Warrant decreases and as the price or, if
applicable, dividend rate on the underlying securities, decreases. Assuming
all other factors are held constant, the more a Securities Warrant is "out-of-
the-money" (i.e., the more the exercise price exceeds the price of the
underlying securities and the shorter its remaining term of expiration), the
greater the risk that a purchaser of the Securities Warrant will lose all or
part of his or her investment. If the price of the underlying securities does
not rise before the Securities Warrant expires to an extent sufficient to
cover a purchaser's cost of the Securities Warrant, the purchaser will lose
all or part of his or her investment in such Securities Warrant upon
expiration.
In addition, prospective purchasers of the Securities Warrants should be
experienced with respect to options and option transactions and understand the
risks associated with options and should reach an investment decision only
after careful consideration, with their financial advisers, of the suitability
of the Securities Warrants in light of their particular financial
circumstances and the information discussed herein and, if applicable, the
Prospectus Supplement. Before purchasing, exercising or selling any Securities
Warrants, prospective purchasers and holders of Securities Warrants should
carefully
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consider, among other things, (i) the trading price of the Securities Warrants,
(ii) the price of the underlying securities at such time, (iii) the time
remaining to expiration and (iv) any related transaction costs. Some of the
factors referred to above are in turn influenced by various political, economic
and other factors that can affect the trading price of the underlying
securities and should be carefully considered prior to making any investment
decisions.
Purchasers of the Securities Warrants should further consider that the
initial offering price of the Securities Warrants may be in excess of the price
that a purchaser of options might pay for a comparable option in a private,
less liquid transaction. In addition, it is not possible to predict the price
at which the Securities Warrants will trade in the secondary market or whether
any such market will be liquid. Ahmanson may file an application to list any
Securities Warrants issued on a United States national securities exchange. To
the extent that any Securities Warrants are exercised, the number of Securities
Warrants outstanding will decrease, which may result in a lessening of the
liquidity of the Securities Warrants. Finally, the Securities Warrants will
constitute direct, unconditional and unsecured obligations of Ahmanson and as
such will be subject to any changes in the perceived creditworthiness of
Ahmanson.
EXERCISE OF SECURITIES WARRANTS
Each Securities Warrant will entitle the holder thereof to purchase such
principal amount of Debt Securities or number of shares of Preferred Stock,
Depositary Shares or Common Stock, as the case may be, at such exercise price
as shall in each case be set forth in, or calculable from, the Prospectus
Supplement relating to the offered Securities Warrants. After the close of
business on the Expiration Date (or such later date to which such Expiration
Date may be extended by Ahmanson), unexercised Securities Warrants will become
void.
Securities Warrants may be exercised by delivering to the Securities Warrant
agent payment as provided in the applicable Prospectus Supplement of the amount
required to purchase the Debt Securities, Preferred Stock, Depositary Shares or
Common Stock, as the case may be, purchasable upon such exercise together with
certain information set forth on the reverse side of the Securities Warrant
certificate. Securities Warrants will be deemed to have been exercised upon
receipt of payment of the exercise price, subject to the receipt within five
(5) business days, of the Securities Warrant certificate evidencing such
Securities Warrants. Upon receipt of such payment and the Securities Warrant
certificate properly completed and duly executed at the corporate trust office
of the Securities Warrant agent or any other office indicated in the applicable
Prospectus Supplement, the Company will, as soon as practicable, issue and
deliver the Debt Securities, Preferred Stock, Depositary Shares or Common
Stock, as the case may be, purchasable upon such exercise. If fewer than all of
the Securities Warrants represented by such Securities Warrant certificate are
exercised, a new Securities Warrant certificate will be issued for the
remaining amount of Securities Warrants.
AMENDMENTS AND SUPPLEMENTS TO SECURITIES WARRANT AGREEMENTS
The Securities Warrant Agreements may be amended or supplemented without the
consent of the holders of the Securities Warrants issued thereunder to effect
changes that are not inconsistent with the provisions of the Securities
Warrants and that do not adversely affect the interests of the holders of the
Securities Warrants.
COMMON STOCK WARRANT ADJUSTMENTS
Unless otherwise indicated in the applicable Prospectus Supplement, the
exercise price of, and the number of shares of Common Stock covered by, a
Common Stock Warrant are subject to adjustment in certain events, including (i)
payment of a dividend on the Common Stock payable in
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capital stock and stock splits, combinations or reclassifications of the
Common Stock, (ii) issuance to all holders of Common Stock of rights or
warrants to subscribe for or purchase shares of Common Stock at less than
their current market price (as defined in the Securities Warrant Agreement for
such series of Common Stock Warrants), and (iii) certain distributions of
evidences of indebtedness or assets (including securities but excluding cash
dividends or distributions paid out of retained earnings or dividends payable
in Common Stock) or of subscription rights and warrants (excluding those
referred to above). If after the distribution date fixed for purposes of
distributing to holders of Common Stock any Stockholder Rights, exercising
holders of any Common Stock Warrant are not entitled to receive Stockholder
Rights that would otherwise be attributable (but for the date of exercise) to
the shares of Common Stock received upon such exercise, then adjustment of the
exercise price will be made under clause (iii) of this paragraph as if the
Stockholder Rights were then being distributed to holders of Ahmanson's Common
Stock. If such an adjustment is made and the Stockholder Rights are later
redeemed, invalidated or terminated, then a corresponding reversing adjustment
will be made to the number of shares of Common Stock issuable upon the
exercise of such Common Stock Warrant, on an equitable basis, to take account
of such event. However, Ahmanson may elect to make provision with respect to
Stockholder Rights so that each share of Common Stock issuable upon exercise
of such Common Stock Warrant whether or not issued after the distribution date
for such Stockholder Rights, will be accompanied by the Stockholder Rights
that would otherwise be attributable (but for the date of exercise) to such
shares of Common Stock, in which event the preceding two sentences will not
apply.
No adjustment in the exercise price of, and the number of shares of Common
Stock covered by, a Common Stock Warrant will be made for regular quarterly or
other periodic or recurring cash dividends or distributions or for cash
dividends or distributions to the extent paid from retained earnings. No
adjustment will be required unless such adjustment would require a change of
at least 1% in the exercise price then in effect. Except as stated above, the
exercise price of, and the number of shares of Common Stock covered by, a
Common Stock Warrant will not be adjusted for the issuance of Common Stock or
any securities convertible into or exchangeable for Common Stock, or carrying
the right or option to purchase or otherwise acquire the foregoing, in
exchange for cash, other property or services.
In the event of any (i) consolidation or merger of Ahmanson with or into any
entity (other than a consolidation or a merger that does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares
of Common Stock), (ii) sale, transfer, lease or conveyance of all or
substantially all of the assets of Ahmanson or (iii) reclassification, capital
reorganization or change of the Common Stock (other than solely a change in
par value or from par value to no par value), then any holder of a Common
Stock Warrant will be entitled, on or after the occurrence of any such event,
to receive on exercise of such Common Stock Warrant the kind and amount of
shares of stock or other securities, cash or other property (or any
combination thereof) that the holder would have received had such holder
exercised such holder's Common Stock Warrant immediately prior to the
occurrence of such event. If the consideration to be received upon exercise of
the Common Stock Warrant following any such event consists of common stock of
the surviving entity, then from and after the occurrence of such event, the
exercise price of such Common Stock Warrant will be subject to the same anti-
dilution and other adjustments described in the second preceding paragraph,
applied as if such common stock were Common Stock.
CERTAIN OWNERSHIP LIMITATIONS
In the event the Securities Warrants are convertible into shares of Ahmanson
Common Stock or any other voting stock of Ahmanson, holders of such Securities
Warrants could be subject to certain restrictions and disclosure obligations
under various federal laws, including CIBCA. See "Description of Preferred
Stock--Certain Ownership Limitations."
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is a summary of certain of the United States federal
income tax considerations that may be relevant to the purchase, ownership and
disposition of the Preferred Stock and Debt Securities by investors who hold
the Preferred Stock or Debt Securities as a capital asset and does not purport
to be a complete analysis of all the potential tax consequences thereof. The
discussion is based upon the Internal Revenue Code of 1986, as amended (the
"Code"), Treasury regulations and Internal Revenue Service ("IRS") rulings and
judicial decisions now in effect, all of which are subject to change at any
time by legislative, judicial or administrative action. Any such changes could
be retroactively applied in a manner that adversely affects holders of such
Securities. Potential investors should be aware that the discussion does not
address all of the tax considerations that may be relevant to particular
investors in light of their individual circumstances or to holders subject to
special treatment under United States federal income tax laws, such as dealers
in securities, insurance companies, foreign persons, tax-exempt organizations
and financial institutions.
EACH PROSPECTIVE INVESTOR SHOULD CONSULT HIS OR HER OWN TAX ADVISOR
CONCERNING THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES, AS WELL AS ALL
APPLICABLE STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF THE PURCHASE,
OWNERSHIP AND DISPOSITION OF ANY SERIES OF THE PREFERRED STOCK (INCLUDING
DEPOSITARY SHARES), DEBT SECURITIES, COMMON STOCK AND SECURITIES WARRANTS
OFFERED HEREBY.
TAX CONSEQUENCES TO INVESTORS WHO PURCHASE PREFERRED STOCK
Dividend Payments. Dividends paid on the Preferred Stock will be taxable to
the holder as ordinary income to the extent of Ahmanson's current or
accumulated earnings and profits for tax purposes. Dividends deemed to have
been paid out of earnings and profits will be eligible for the 70% dividends
received deduction allowable to corporations under Code Section 243, subject to
the holding period requirements and debt financed portfolio stock limitations
contained in Code Sections 246 and 246A. Corporate holders of the Preferred
Stock should also consider the application of the "extraordinary dividend"
rules of Section 1059 of the Code as well as the possible reduction or
elimination of the benefit of the dividends received deduction by the corporate
alternative minimum tax. Ahmanson anticipates that it will have accumulated
earnings and profits attributable to prior operations as of December 31, 1993.
Nevertheless, the amount of Ahmanson's current and accumulated earnings and
profits available to support dividends in future years could primarily depend
on its future profits (including those of Home Savings), which cannot be
accurately predicted. Dividends in excess of the current and accumulated
earnings and profits of Ahmanson will be treated for federal income tax
purposes first as a return of the holder's adjusted tax basis in the redeemed
shares and then as a gain from the sale or exchange of such shares.
Redemption. If any series of Preferred Stock is redeemable prior to maturity,
any such redemption will be a taxable event to the stockholders. Generally, any
redemption of the Preferred Stock for cash will be treated as a sale or
exchange if the redemption (a) results in a "complete termination" of the
stockholder's stock interest in Ahmanson under Section 302(b)(3) of the Code,
(b) is "substantially disproportionate" with respect to the stockholder under
Section 302(b)(2) of the Code, or (c) is "not essentially equivalent to a
dividend" with respect to the stockholder under Section 302(b)(1) of the Code.
In determining whether any of these tests has been met, shares considered to be
owned by the stockholder by reason of the constructive ownership rules set
forth in Section 318 of the Code (pursuant to which a stockholder will be
deemed to own shares owned by certain related individuals and entities or
shares subject to option), as well as shares actually owned, generally would be
taken into account. If the redemption of shares of a series of Preferred Stock
for cash satisfies any of the foregoing tests with respect to a stockholder,
such stockholder will recognize gain or loss based on the difference between
the amount of cash received and the holder's tax basis in the redeemed shares.
If the
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redemption does not satisfy any of the Section 302 tests, the gross proceeds
will be treated as a distribution taxable as a dividend to the extent of
Ahmanson's current or accumulated earnings and profits (subject in the case of
a corporate holder of any Preferred Stock to the dividends received and
"extraordinary dividend" provisions of the Code described above), and any
excess will be treated first as a return of the holder's adjusted tax basis in
the redeemed shares and then as a gain from the sale or exchange of such
shares.
Redemption Premium. Under Section 305 of the Code and Treasury regulations
promulgated thereunder, if the redemption price of any series of Preferred
Stock exceeds its issue price by more than a statutory de minimus amount,
holders of such stock may be deemed in certain circumstances to receive the
excess as distributions on such stock. Such constructive distributions would be
treated as a dividend to the extent of Ahmanson's current and accumulated
earnings and profits for tax purposes.
Conversion of Preferred Stock into Common Stock. With respect to any series
of Preferred Stock that is convertible into Common Stock, no gain or loss will
be recognized for federal income tax purposes upon the conversion of shares of
such series of Preferred Stock solely into shares of Common Stock. The tax
basis of the Common Stock received upon conversion will be equal to the tax
basis of the shares of Preferred Stock converted and the holding period of the
Common Stock will include the holding period of the shares of Preferred Stock
converted. The foregoing will not apply to cash received in lieu of fractional
shares, which is generally treated as an amount received in redemption of such
shares that is taxed under the redemption rules described above.
Adjustment of Conversion Rate. Pursuant to Treasury regulations issued under
Section 305 of the Code, adjustments in the conversion rate of any series of
Preferred Stock to reflect distributions to holders of Common Stock may be
treated under certain circumstances as a constructive distribution to the
holders of such Preferred Stock, taxable as a dividend to the extent of
Ahmanson's current and accumulated earnings and profits for tax purposes.
Sales of Preferred Stock. Gain or loss realized upon a sale or exchange of
Preferred Stock will be treated as long-term capital gain or loss, provided
that the Preferred Stock has been held as a capital asset for more than one
year.
Treatment of Depositary Shares. Owners of Depositary Shares will be treated
for federal income tax purposes as if they are owners of the Preferred Stock
underlying such Depositary Shares and, accordingly, must take into account for
federal income tax purposes income and deductions to which they would be
entitled if they were holders of such Preferred Stock.
TAX CONSEQUENCES TO INVESTORS WHO PURCHASE DEBT SECURITIES
Stated Interest. Except in the case of any Debt Securities issued with
original issue discount, interest paid to a holder of any series of Debt
Securities will generally be taken into income in accordance with the holder's
method of accounting for federal income tax purposes. Accordingly, holders of
Debt Securities using the accrual method of accounting will generally be
required to include interest in ordinary income as such interest accrues, while
a holder using the cash method will be required to include interest in income
when cash payments are received (or made available for receipt) by such holder.
Original Issue Discount. If any series of Debt Securities having a maturity
date of more than one year from the date of issue is issued with a stated
redemption price at maturity that exceeds the issue price by more than a
statutory de minimus amount, or does not provide for interest payable at least
annually based upon a fixed rate or qualified floating rate (as described in
proposed Treasury Regulations), such series of Debt Securities may be subject
to the original issue discount provisions of
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the Code. Holders of any series of Debt Securities subject to the original
issue discount provisions will be required to include such original issue
discount in taxable income based on an accrual to maturity method, regardless
of the holders' general method of accounting for federal income tax purposes.
Application of the original issue discount provisions may result in the
recognition of taxable income by holders of Debt Securities in excess of the
actual interest paid for a taxable year with respect to any series of Debt
Securities subject to the original issue discount rules.
Conversion of Debt Securities into Common Stock. With respect to any series
of Debt Securities that is convertible into Common Stock, no gain or loss will
be recognized for federal income tax purposes upon the conversion of any such
Debt Securities solely into shares of Common Stock. The tax basis of the Common
Stock received upon conversion will equal the tax basis of the Debt Securities
converted, and the holding period of the Common Stock will include the holding
period of the Debt Securities converted. The foregoing will not apply to cash
received in lieu of fractional shares, which will generally be treated as
capital gain or loss in accordance with the redemption rules discussed above.
Adjustments of Conversion Rate. Pursuant to Treasury Regulations issued under
Section 305 of the Code, adjustments in the conversion rate of any series of
Debt Securities convertible into shares of Common Stock to reflect
distributions to holders of Common Stock may be treated under certain
circumstances as a constructive distribution to the holders of such Debt
Securities, taxable as a dividend to the extent of the current and accumulated
earnings and profits of Ahmanson for federal income tax purposes.
Sales of Debt Securities. Subject to the market discount rules discussed
below, gain or loss realized upon a sale or exchange of Debt Securities
generally will be treated as long term capital gain or loss, provided that the
Debt Securities were held as a capital asset for more than one year, except to
the extent a holder realizes ordinary income attributable to accrued interest.
Market Discount. Purchasers of any Debt Securities should be aware that the
resale of Debt Securities may be affected by the market discount provisions of
Code. These provisions generally provide that if a subsequent holder of debt
security purchases the security at a discount in excess of a statutorily
defined de minimus amount, and thereafter recognizes gain upon a disposition
(including a redemption) of the security (or shares of common stock into which
it may have been converted), the lesser of such gain or the portion of the
market discount that accrued while the security was held by such holder will be
treated as ordinary income at the time of disposition. The holder of such a
market discount security may also be required to defer a portion of any
interest expense that may otherwise be deductible on any indebtedness incurred
or maintained to purchase or carry such a market discount security until the
holder disposes of it in a taxable transaction. If a holder of a debt security
purchased at market discount elects to include market discount in income
currently, however, both of the foregoing rules would not apply.
BEARER SECURITIES
Under Sections 165(i) and 1287(a) of the Code, United States holders of
bearer Debt Securities generally will not be entitled to deduct any loss on
such Debt Securities (including for this purpose any Debt Securities in global
form exchangeable for bearer Debt Securities) or coupons and must treat as
ordinary income any gain realized on the sale or other disposition (including
the receipt of principal) of bearer Debt Securities or coupons thereon (other
than bearer Debt Securities having a maturity of one year or less from their
date of issuance).
Certain information regarding restrictions on the offer, issuance, exchange
and transfer of, and special United States federal income tax considerations
relating to, bearer Debt Securities will be set forth in the applicable
Prospectus Supplement.
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FURTHER INFORMATION ON FEDERAL INCOME TAX CONSEQUENCES
Further information concerning the particular federal income tax treatment of
holders of certain series of Securities, including Debt Securities denominated
or payable in foreign currencies or foreign currency units and Debt Securities
issued at a discount or otherwise subject to the original issue discount
provisions of the Code, will be discussed in the Prospectus Supplement related
to such series.
PLAN OF DISTRIBUTION
Ahmanson may sell the Securities (and, in the case of Preferred Stock,
Depositary Shares representing fractional interests therein) to one or more
underwriters for public offering and sale by them or may sell the Securities
(or Depositary Shares) to investors directly or through agents. Any such
underwriter or agent involved in the offer and sale of the Securities (or
Depositary Shares) will be named in the related Prospectus Supplement. Ahmanson
has reserved the right to sell the Securities (or Depositary Shares) directly
to investors on its own behalf in those jurisdictions where it is authorized to
do so.
Underwriters may offer and sell the Securities (or Depositary Shares) at a
fixed price or prices that may be changed, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at
negotiated prices. Ahmanson also may offer and sell the Securities (or
Depositary Shares) in exchange for one or more of its outstanding series of
equity or debt securities (including any outstanding Securities). Ahmanson also
may, from time to time, authorize dealers, acting as Ahmanson's agents, to
offer and sell the Securities (or Depositary Shares) upon such terms and
conditions as are set forth in the related Prospectus Supplement. In connection
with the sale of the Securities (or Depositary Shares), underwriters may
receive compensation from Ahmanson in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of the Securities
(or Depositary Shares) for whom they may act as agent. Underwriters may sell
the Securities (or Depositary Shares) to or through dealers, and such dealers
may receive compensation in the form of discounts, concessions or commissions
from the underwriters and/or commissions from the purchasers for whom they may
act as agents.
Any underwriting compensation paid by Ahmanson to underwriters or agents in
connection with the offering of the Securities (or Depositary Shares), and any
discounts, concessions or commissions allowed by underwriters to participating
dealers, will be set forth in the related Prospectus Supplement. Dealers and
agents participating in the distribution of the Securities (or Depositary
Shares) may be deemed to be underwriters, and any discounts and commissions
received by them and any profit realized by them on resale of the Securities
(or Depositary Shares) may be deemed to be underwriting discounts and
commissions. Underwriters, dealers and agents may be entitled, under agreements
entered into with Ahmanson, to indemnification against and contribution toward
certain civil liabilities.
If so indicated in the related Prospectus Supplement, Ahmanson will authorize
dealers acting as Ahmanson's agents to solicit offers by certain institutions
to purchase the Securities (or Depositary Shares) from Ahmanson at the public
offering price set forth in the related Prospectus Supplement pursuant to
delayed delivery contracts ("Contracts") providing for payment and delivery on
the date or dates stated in a Prospectus Supplement. Each Contract will be for
an amount not less than, and the aggregate amount of the Securities (or
Depositary Shares), based on the liquidation value thereof, sold pursuant to
Contracts will be not less nor more than the respective amounts stated in a
Prospectus Supplement. Institutions with whom Contracts, when authorized, may
be made include commercial and savings banks, insurance companies, pension
funds, investment companies, educational and charitable institutions and other
institutions, but will in all cases be subject to the approval of Ahmanson.
Contracts will be subject to the condition that the purchase by an institution
of the Securities (or Depositary Shares) covered by Contracts will not at the
time of delivery be prohibited under the laws of any jurisdiction in the United
States to which such institution is subject.
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Any Securities issued hereunder (other than Common Stock) will be new issues
of securities with no established trading market. Any underwriters or agents to
or through whom Securities are sold by Ahmanson for public offering and sale
may make a market in such Securities, but such underwriters or agents will not
be obligated to do so and may discontinue any market making at any time without
notice. No assurance can be given as to the liquidity of the trading market for
any Securities.
Certain of the underwriters, dealers or agents and their associates may be
customers of, engage in transactions with, and perform services for, Ahmanson
and certain of its affiliates in the ordinary course of business. Except as
otherwise stated in the applicable Prospectus Supplement, any loans and
outstanding commitments to such underwriters, dealers or agents and their
associates will be made on terms, including interest rates and collateral, no
more favorable than those prevailing at the time for comparable transactions
with other persons and will not involve more than normal risk of
collectibility.
LEGAL MATTERS
Certain legal matters with respect to the Securities offered hereby will be
passed upon for Ahmanson by Gibson, Dunn & Crutcher, Los Angeles, California
and for any underwriters by counsel named in the related Prospectus Supplement.
Arthur W. Schmutz, a director of Ahmanson, is a retired former partner of
Gibson, Dunn & Crutcher.
EXPERTS
The consolidated financial statements of Ahmanson as of December 31, 1993 and
1992 and for each of the years in the three-year period ended December 31, 1993
included in Ahmanson's Annual Report on Form 10-K for the year ended December
31, 1993 have been incorporated herein by reference in reliance on the report
of KPMG Peat Marwick LLP, independent certified public accountants,
incorporated herein by reference, and upon the authority of such firm as
experts in auditing and accounting.
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PRO-
SPECTUS SUPPLEMENT OR THE PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY
AHMANSON OR ANY OF THE UNDERWRITERS. NEITHER THIS PROSPECTUS SUPPLEMENT NOR THE
PROSPECTUS CONSTITUTES AN OFFER OF ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR ANY OFFER TO SELL, OR THE SOLICITATION OF AN OFFER TO BUY,
TO ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION IS UNLAW-
FUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF AHMANSON SINCE THE DATE HEREOF
OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THE DATE HEREOF.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
Page
----
<S> <C>
Selected Financial Data.................................................... S-2
Recent Developments........................................................ S-5
Capitalization............................................................. S-8
Use of Proceeds............................................................ S-9
Description of Notes....................................................... S-9
Underwriting............................................................... S-12
Legal Matters.............................................................. S-12
Experts.................................................................... S-12
PROSPECTUS
Available Information...................................................... 2
Documents Incorporated by Reference........................................ 2
H. F. Ahmanson & Company................................................... 3
Use of Proceeds............................................................ 5
Ratio of Earnings to Fixed Charges......................................... 5
Description of Preferred Stock............................................. 5
Description of Depositary Shares........................................... 11
Description of Common Stock................................................ 14
Description of Debt Securities............................................. 15
Description of Securities Warrants......................................... 25
Certain Federal Income Tax
Considerations............................................................ 29
Plan of Distribution....................................................... 32
Legal Matters.............................................................. 33
Experts.................................................................... 33
</TABLE>
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$125,000,000
[LOGO OF H.F. AHMANSON & CO. APPEARS HERE]
7.875% SUBORDINATED NOTESDUE SEPTEMBER 1, 2004
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PROSPECTUS SUPPLEMENT
August 24, 1994
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LEHMAN BROTHERS
CS FIRST BOSTON
SMITH BARNEY INC.
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