<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 7, 1996
REG. NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
<TABLE>
<S> <C>
MBNA CAPITAL I
MBNA CAPITAL II
MBNA CORPORATION MBNA CAPITAL III
(Exact name of registrant as MBNA CAPITAL IV
specified in its charter) MBNA CAPITAL V
(Exact name of each registrant as
MARYLAND specified in its Trust Agreement)
(State or other jurisdiction of
Incorporation or organization) DELAWARE
(State or other jurisdiction of incorporation
52-1713008 or organization of each registrant)
(I.R.S. Employer
Identification No.) EACH TO BE APPLIED FOR
(I.R.S. Employer Identification No.)
WILMINGTON, DELAWARE 19884-0864 C/O MBNA CORPORATION
(800) 362-6255 WILMINGTON, DELAWARE 19884-0864
(Address, including zip code, and (800) 362-6255
telephone number, including area code, (Address, including zip code, and
of registrant's principal executive offices) telephone number, including area code, of
each registrant's principal executive offices)
</TABLE>
-------------------------
M. SCOT KAUFMAN
EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND CHIEF ACCOUNTING OFFICER
MBNA CORPORATION
WILMINGTON, DELAWARE 19884-0864
(800) 362-6255
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
With copies to:
John W. Scheflen John Tehan
Executive Vice President, Simpson Thacher & Bartlett
General Counsel & Secretary 425 Lexington Avenue
MBNA Corporation New York, New York 10017
Wilmington, Delaware 19884-0616
-------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the Registration Statement becomes effective.
-------------------------
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
/ /
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. /X/
<PAGE> 2
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
-------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 3
-------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE
- ---------------------------------------- ------------------ ------------------------- --------------------------- -----------------
<S> <C> <C> <C> <C>
Junior Subordinated Deferrable
Interest Debentures of MBNA
Corporation (2) . . . . . . . . . 40,000 $25 $1,000,000 $303.03
Preferred Securities of MBNA
Capital I, MBNA Capital II,
MBNA Capital III, MBNA
Capital IV and MBNA Capital V . . 40,000 $25 $1,000,000 NA
MBNA Corporation Guarantee
with respect to Preferred Securities
(3) (4). . . . . . . . . . . . . . . NA NA NA NA
Total . . . . . . . . . . . . . . . . . $1,000,000(5) 100% $1,000,000(5) $303.03
===================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee.
(2) The Junior Subordinated Deferrable Interest Debentures will be purchased
by MBNA Capital I, MBNA Capital II, MBNA Capital III, MBNA Capital IV and
MBNA Capital V with the proceeds of the sale of the Preferred Securities.
(3) No separate consideration will be received for the MBNA Corporation
Guarantee.
(4) This Registration Statement is deemed to cover the Junior Subordinated
Deferrable Interest Debentures of MBNA Corporation, the rights of holders
of Junior Subordinated Deferrable Interest Debentures of MBNA Corporation
under the Indenture, the rights of holders of Preferred Securities of MBNA
Capital I, MBNA Capital II, MBNA Capital III, MBNA Capital IV and MBNA
Capital V under each Trust Agreement, the rights of holders of the
Preferred Securities under the Guarantees, the Expense Agreement entered
into by MBNA Corporation and certain backup undertakings as described
herein.
(5) Such amount represents the principal amount of Junior Subordinated
Deferrable Interest Debentures issued at their principal amount and the
issue price rather than the principal amount of Junior Subordinated
Deferrable Interest Debentures issued at an original issue discount. Such
amount also represents the initial public offering price of the MBNA
Capital I, MBNA Capital II, MBNA Capital III, MBNA Capital IV and MBNA
Capital V Preferred Securities.
<PAGE> 4
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED NOVEMBER __,1996
$1,000,000
MBNA CORPORATION
JUNIOR SUBORDINATED DEFERRABLE
INTEREST DEBENTURES
MBNA CAPITAL I
MBNA CAPITAL II
MBNA CAPITAL III
MBNA CAPITAL IV
MBNA CAPITAL V
PREFERRED SECURITIES FULLY AND UNCONDITIONALLY
GUARANTEED, AS DESCRIBED HEREIN, BY
MBNA CORPORATION
MBNA Corporation, a Maryland corporation (the "Corporation"), may from
time to time offer in one or more series or issuances its junior subordinated
deferrable interest debentures (the "Junior Subordinated Debentures"). The
Junior Subordinated Debentures will be unsecured and subordinate and junior in
right of payment to Senior Debt, Subordinated Debt and, under certain
circumstances, Additional Senior Obligations (each as defined in "Description
of Junior Subordinated Debentures -- Subordination") of the Corporation. If
provided in an accompanying Prospectus Supplement, the Corporation will have
the right to defer payments of interest on any series of Junior Subordinated
Debentures by extending the interest payment period thereon at any time or from
time to time for such number of consecutive interest payment periods (which
shall not extend beyond the Stated Maturity (as defined herein) of the Junior
Subordinated Debentures) with respect to each deferral period as may be
specified in such Prospectus Supplement (each, an "Extension Period"). See
"Description of Junior Subordinated Debentures -- Option to Extend Interest
Payment Date."
MBNA Capital I, MBNA Capital II, MBNA Capital III, MBNA Capital IV and
MBNA Capital V, each a trust created under the laws of the State of Delaware
(each, an "Issuer," and collectively, the "Issuers"), may severally offer, from
time to time, preferred securities (the "Preferred Securities") representing
preferred beneficial interests in such Issuer. The Corporation will be the
owner of the common securities (the "Common Securities" and, together with the
Preferred Securities, the "Trust Securities") representing common beneficial
interests in such Issuer. The payment of periodic cash distributions
("Distributions") with respect to the Preferred Securities of each Issuer and
payments on liquidation or redemption with respect to such Preferred
Securities, in each case out of funds held by such Issuer, are each irrevocably
guaranteed by the Corporation to the extent described herein (each, a
"Guarantee"). See "Description of Guarantees". The obligations of the
Corporation under each Guarantee will be subordinate and junior in right of
payment to all Senior Debt, Subordinated Debt and, in certain circumstances,
Additional Senior Obligations of the Corporation. Concurrently with the
issuance by an Issuer of its Preferred Securities, such Issuer will invest the
proceeds thereof and contributions made in respect of the Common Securities in
a corresponding series of the Corporation's Junior Subordinated Debentures (the
"Corresponding Junior Subordinated Debentures") with terms corresponding to the
terms of that Issuer's Preferred Securities (the "Related Preferred
Securities"). The Corresponding Junior Subordinated Debentures and the right
to reimbursement of expenses under the related Expense Agreement (as defined
herein) will be the sole assets of each Issuer, and payments under the
Corresponding Junior Subordinated Debentures and the related Expense Agreement
will be the only revenue of each Issuer. If provided in an accompanying
Prospectus Supplement, the Corporation may, upon receipt of approval of the
Board of Governors of the Federal Reserve (if such approval is then required
under the applicable capital guidelines or policies of the Board of Governors
of the Federal Reserve), redeem the Corresponding Junior Subordinated
Debentures (and, after satisfaction of liabilities of such Issuer as required
by applicable law, cause the redemption of the Trust Securities) or may
terminate each Issuer and cause the Corresponding Junior Subordinated
Debentures to be distributed to the holders of Preferred Securities in
liquidation of their interests in such Issuer. See "Description of Preferred
Securities -- Liquidation Distribution Upon Termination."
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
-------------------
The date of this Prospectus is , 1996.
<PAGE> 5
Holders of the Preferred Securities will be entitled to receive
preferential cumulative cash Distributions accumulating from the date of
original issuance and payable periodically as specified in an accompanying
Prospectus Supplement. If provided in an accompanying Prospectus Supplement,
the Corporation will have the right to defer payments of interest on any series
of Corresponding Junior Subordinated Debentures by extending the interest
payment period thereon at any time or from time to time for one or more
Extension Periods (which shall not extend beyond the Stated Maturity of the
Corresponding Junior Subordinated Debentures). If interest payments are so
deferred, Distributions on the Related Preferred Securities will also be
deferred and the Corporation will not be permitted, subject to certain
exceptions set forth herein, to declare or pay any cash distributions with
respect to the Corporation's capital stock or debt securities that rank pari
passu with or junior to the Corresponding Junior Subordinated Debentures.
During an Extension Period, Distributions will continue to accumulate (and the
Preferred Securities will accumulate additional Distributions thereon at the
rate per annum set forth in the related Prospectus Supplement). See
"Description of Preferred Securities -- Distributions."
Taken together, the Corporation's obligations under each series of
Corresponding Junior Subordinated Debentures, the Indenture, the related Trust
Agreement, the related Expense Agreement and the related Guarantee (each, as
defined herein), in the aggregate, provide a full, irrevocable and
unconditional guarantee of payments of distributions and other amounts due on
the related series of Preferred Securities. See "Relationship Among the
Preferred Securities, the Corresponding Junior Subordinated Debentures and the
Guarantees--Full and Unconditional Guarantee."
The Junior Subordinated Debentures and Preferred Securities may be offered
in amounts, at prices and on terms to be determined at the time of offering;
provided, however, the aggregate initial public offering price of all Junior
Subordinated Debentures (other than Corresponding Junior Subordinated
Debentures) and Preferred Securities (including the Corresponding Junior
Subordinated Debentures) issued pursuant to the Registration Statement of which
this Prospectus forms a part shall not exceed $1,000,000. Certain specific
terms of the Junior Subordinated Debentures or Preferred Securities in respect
of which this Prospectus is being delivered will be described in an
accompanying Prospectus Supplement, including without limitation and where
applicable and to the extent not set forth herein, (a) in the case of Junior
Subordinated Debentures, the specific designation, aggregate principal amount,
denominations, Stated Maturity (including any provisions for the shortening or
extension thereof), interest payment dates, interest rate (which may be fixed
or variable) or method of calculating interest, if any, applicable Extension
Period or interest deferral terms, if any, place or places where principal,
premium, if any, and interest, if any, will be payable, any terms of
redemption, any sinking fund provisions, terms for any conversion or exchange
into other securities, initial offering or purchase price, methods of
distribution and any other special terms, and (b) in the case of Preferred
Securities, the identity of the Issuer, specific title, aggregate amount,
stated liquidation amount, number of securities, Distribution rate or method of
calculating such rate, Distribution payment dates, applicable Distribution
deferral terms, if any, place or places where Distributions will be payable,
any terms of redemption, exchange, initial offering or purchase price, methods
of distribution and any other special terms.
The Prospectus Supplement also will contain information, as applicable,
about certain United States Federal income tax consequences relating to the
Junior Subordinated Debentures or Preferred Securities.
The Junior Subordinated Debentures and Preferred Securities may be sold to
or through underwriters, dealers or agents or directly to purchasers. See
"Plan of Distribution." The names of any underwriters, dealers or agents
involved in the sale of Junior Subordinated Debentures or Preferred Securities
in respect of which this Prospectus is being delivered and any applicable fee,
commission or discount arrangements with them will be set forth in a Prospectus
Supplement. The Prospectus Supplement will state whether the Junior
Subordinated Debentures or Preferred Securities will be listed on any national
securities exchange or automated quotation system. If the Junior Subordinated
Debentures or Preferred Securities are not listed on any national securities
exchange or automated quotation system, there can be no assurance that there
will be a secondary market for the Junior Subordinated Debentures or Preferred
Securities.
This Prospectus may not be used to consummate sales of Junior Subordinated
Debentures or Preferred Securities unless accompanied by a Prospectus
Supplement.
-------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND ANY
ACCOMPANYING PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE OFFERING DESCRIBED
HEREIN AND THEREIN, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
CORPORATION, THE ISSUERS OR BY ANY UNDERWRITER, DEALER OR AGENT. NEITHER THIS
PROSPECTUS NOR ANY PROSPECTUS SUPPLEMENT SHALL CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OFFERED HEREUNDER IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION OR SALE IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER IMPLIES
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CORPORATION AT ANY TIME
SUBSEQUENT TO THE DATE HEREOF OR THAT THE INFORMATION HEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO ITS DATE.
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
and information statements and other information, including the documents
incorporated by reference herein, can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549; and at the Commission's regional offices at 75 Park
Place, New York, New York 10007 and Suite 1400, Northwestern Atrium Center, 500
West Madison Street, Chicago, Illinois 60661, or obtained through the
Commission's Internet address at http://www.sec.gov. Copies of such material
can be obtained from
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<PAGE> 6
the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Such material can also be
inspected and copied at the office of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.
The Corporation and the Issuers have filed with the Commission a
Registration Statement on Form S-3 (together with all amendments and exhibits
thereto, the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities offered hereby.
This Prospectus does not contain all the information set forth in the
Registration Statement, certain portions of which have been omitted as
permitted by the rules and regulations of the Commission. For further
information with respect to the Corporation and the securities offered hereby,
reference is made to the Registration Statement and the exhibits and the
financial statements, notes and schedules filed as a part thereof or
incorporated by reference therein, which may be inspected at the public
reference facilities of the Commission at the addresses set forth above.
Statements made in this Prospectus concerning the contents of any documents
referred to herein are not necessarily complete, and in each instance are
qualified in all respects by reference to the copy of such document filed as an
exhibit to the Registration Statement.
No separate financial statements of any Issuer have been included herein.
The Corporation and the Issuers do not consider that such financial statements
would be material to holders of the Preferred Securities because each Issuer is
a newly formed special purpose entity, has no operating history or independent
operations and is not engaged in and does not propose to engage in any activity
other than holding as trust assets the Corresponding Junior Subordinated
Debentures of the Corporation and issuing the Trust Securities. See "The
Issuers", "Description of Preferred Securities," "Description of Junior
Subordinated Debentures--Corresponding Junior Subordinated Debentures" and
"Description of Guarantees." In addition, the Corporation does not expect that
any of the Issuers will be filing reports under the Exchange Act with the
Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Corporation with the Commission are
incorporated into this Prospectus by reference:
1. The Corporation's Annual Report on Form 10-K for the year ended
December 31, 1995 as amended by Form 10-K/A-1 provided, however, that the
information referred to in Item 402(a)(8) of Regulation S-K promulgated by
the Commission shall not be deemed to be specifically incorporated by
reference herein.
2. The Corporation's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996 and June 30, 1996.
3. The Corporation's Current Reports on Form 8-K dated August 31,
1996, September 19, 1996, September 23, 1996, September 25, 1996,
September 30, 1996, October 15, 1996 and October 24, 1996.
Each document or report filed by the Corporation pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior
to the termination of any offering of securities made by this Prospectus shall
be deemed to be incorporated by reference into this Prospectus and to be a part
of this Prospectus from the date of filing of such document. Any statement
contained herein, or in a document all or a portion of which is incorporated or
deemed to be incorporated by reference herein, shall be deemed to be modified
or superseded for purposes of the Registration Statement and this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement or this Prospectus.
The Corporation will provide without charge to any person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference herein
(other than exhibits not specifically incorporated by reference into the texts
of such documents). Requests for such documents should be directed to: MBNA
Corporation, Wilmington, Delaware 19884, Attention: Investor Relations, (800)
362-6255.
MBNA CORPORATION
MBNA Corporation (the "Corporation"), is a registered bank holding company
incorporated under the laws of Maryland in 1990. It is the parent corporation
of MBNA America Bank, National Association, a national bank organized in
January 1991, as the successor to a national bank organized in 1982.
The Corporation's principal executive offices are located in Wilmington,
Delaware 19884, and its telephone number is (800) 362-6255.
-3-
<PAGE> 7
MBNA CORPORATION RATIO OF EARNINGS TO FIXED CHARGES
AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDEND REQUIREMENTS
The following are the consolidated ratio of earnings to fixed charges and
ratio of earnings to combined fixed charges and preferred stock dividend
requirements for the Corporation for each of the years in the five-year period
ended December 31, 1995 and the nine-month period ended September 30, 1996:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30 YEARS ENDED DECEMBER 31,
----------------- ------------------------------------------
1996* 1995 1994 1993** 1992 1991
----------------- ------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Earnings to Fixed Charges:
Including Interest on Deposits . . . . 1.9 2.0 2.4 2.0 2.1 1.6
Excluding Interest on Deposits . . . . 4.0 4.4 5.7 6.0 15.7 12.9
Earnings to Combined Fixed Charges and
Preferred Stock Dividends: . . . . . .
Including Interest on Deposits . . . . 1.8 2.0 2.4 2.0 2.1 1.6
Excluding Interest on Deposits . . . . 3.6 4.3 5.7 6.0 15.7 12.9
</TABLE>
- --------------
* Income before income taxes for the nine months ended September 30, 1996,
includes a charge of $54.3 million related to the launch of the MBNA
Platinum Plus Visa and MasterCard program. Without the charge, the ratio
of earnings to fixed charges, including and excluding interest on
deposits, would have been 2.0 and 4.3, respectively and the ratio of
earnings to combined fixed charges and preferred stock dividend
requirements, including and excluding interest on deposits, would have
been 1.9 and 3.9, respectively.
** Income before income taxes for 1993 includes a charge of $150.0 million
for the termination of a marketing agreement with an independent
third-party marketing organization. Without the charge, the ratio of
earnings to fixed charges and the ratio of earnings to combined fixed
charges and preferred stock dividend requirements, including and excluding
interest on deposits, would have each been 2.9 and 9.9, respectively.
The ratio of earnings to fixed charges is computed by dividing (i) income
before income taxes and fixed charges less interest capitalized during such
period, net of amortization of previously capitalized interest, by (ii) fixed
charges. The ratio of earnings to combined fixed charges and preferred stock
dividend requirements is computed by dividing (i) income before income taxes
and fixed charges less interest capitalized during such period, net of
amortization of previously capitalized interest, by (ii) fixed charges and
preferred stock dividend requirements. Fixed charges consist of interest
expense on borrowings, including capitalized interest (including or excluding
deposits, as the case may be), and the portion of rental expense which is
deemed representative of interest. The preferred stock dividend requirements
represent the pre-tax earnings which would be required to cover such dividend
requirements on the Corporation's preferred stock outstanding. The Corporation
did not have any preferred stock outstanding during the periods prior to 1995
presented above and accordingly there were no preferred stock dividend
requirements during such periods.
THE ISSUERS
Each Issuer is a statutory business trust created under Delaware law
pursuant to (i) a trust agreement executed by the Corporation, as sponsor of
the Issuer, and an Administrative Trustee (as defined herein) of such Issuer
and (ii) the filing of a certificate of trust with the Delaware Secretary of
State. Each trust agreement will be amended and restated in its entirety
(each, as so amended and restated, a "Trust Agreement") substantially in the
form filed as an exhibit to the Registration Statement of which this Prospectus
forms a part. Each Trust Agreement will be qualified as an indenture under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). Each
Issuer exists for the exclusive purposes of (i) issuing and selling its Trust
Securities, (ii) using the proceeds from the sale of such Trust Securities to
acquire a series of Corresponding Junior Subordinated Debentures issued by the
Corporation, and (iii) engaging in only those other activities necessary,
convenient or incidental thereto. Accordingly, the Corresponding Junior
Subordinated Debentures and the right to reimbursement of expenses under the
related Expense Agreement will be the sole assets of each Issuer, and payments
under the Corresponding Junior Subordinated Debentures and the related Expense
Agreement will be the sole revenue of each Issuer.
All of the Common Securities of each Issuer will be owned by the
Corporation. The Common Securities of an Issuer will rank pari passu, and
payments will be made thereon pro rata, with the Preferred Securities of such
Issuer, except that upon the occurrence
-4-
<PAGE> 8
and continuance of an event of default under a Trust Agreement resulting from a
Debenture Event of Default (as defined herein), the rights of the Corporation
as holder of the Common Securities to payment in respect of Distributions and
payments upon liquidation, redemption or otherwise will be subordinated to the
rights of the holders of the Preferred Securities of such Issuer. See
"Description of Preferred Securities -- Subordination of Common Securities."
The Corporation will acquire Common Securities in an aggregate liquidation
amount equal to not less than 3% of the total capital of each Issuer.
Unless otherwise specified in the applicable Prospectus Supplement, each
Issuer has a term of approximately 55 years, but may terminate earlier as
provided in the applicable Trust Agreement. Each Issuer's business and affairs
are conducted by its trustees, each appointed by the Corporation as holder of
the Common Securities. The trustees for each Issuer will be [________], as the
Property Trustee (the "Property Trustee"), [__________], as the Delaware
Trustee (the "Delaware Trustee"), and two individual trustees (the
"Administrative Trustees") who are employees or officers of or affiliated with
the Corporation (collectively, the "Issuer Trustees"). [_____________], as
Property Trustee, will act as sole indenture trustee under each Trust Agreement
for purposes of compliance with the Trust Indenture Act. [_________] will also
act as trustee under the Guarantees and the Indenture (each as defined herein).
See "Description of Guarantees" and "Description of Junior Subordinated
Debentures." The holder of the Common Securities of an Issuer, or the holders
of a majority in liquidation preference of the related Preferred Securities if
a Debenture Event of Default under the Trust Agreement for such Issuer has
occurred and is continuing, will be entitled to appoint, remove or replace the
Property Trustee and/or the Delaware Trustee for such Issuer. In no event will
the holders of the Preferred Securities have the right to vote to appoint,
remove or replace the Administrative Trustees; such voting rights are vested
exclusively in the holder of the Common Securities. The duties and obligations
of each Issuer Trustee are governed by the applicable Trust Agreement. The
Corporation will pay all fees and expenses related to each Issuer and the
offering of the Preferred Securities and will pay, directly or indirectly, all
ongoing costs, expenses and liabilities of each Issuer.
The principal executive office of each Issuer is Wilmington, Delaware
19884 and its telephone number is (800) 362-6255.
USE OF PROCEEDS
Except as otherwise set forth in the applicable Prospectus Supplement, the
Corporation intends to use the proceeds from the sale of its Junior
Subordinated Debentures (including Corresponding Junior Subordinated Debentures
issued to the Issuers in connection with the investment by the Issuers of all
of the proceeds from the sale of Trust Securities) for general corporate
purposes, including working capital, capital expenditures, investments in or
loans to subsidiaries, refinancing of debt, redemption of shares of its
outstanding common and preferred stock, the satisfaction of other obligations
or for such other purposes as may be specified in the applicable Prospectus
Supplement.
DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures are to be issued in one or more series
under a Junior Subordinated Indenture, as supplemented from time to time (as so
supplemented, the "Indenture"), between the Corporation and [_________] as
trustee (the "Debenture Trustee"). This summary of certain terms and provisions
of the Junior Subordinated Debentures, Corresponding Junior Subordinated
Debentures and the Indenture does not purport to be complete and is subject to,
and is qualified in its entirety by reference to, the Indenture, the form of
which is filed as an exhibit to the Registration Statement of which this
Prospectus forms a part, and to the Trust Indenture Act. The Indenture is
qualified under the Trust Indenture Act. Whenever particular defined terms of
the Indenture (as supplemented or amended from time to time) are referred to
herein or in a Prospectus Supplement, such defined terms are incorporated
herein or therein by reference.
GENERAL
Each series of Junior Subordinated Debentures will rank pari passu with
all other series of Junior Subordinated Debentures and will be unsecured and
subordinate and junior in right of payment to the extent and in the manner set
forth in the Indenture to all Senior Debt, Subordinated Debt and, under certain
circumstances, additional Senior obligations (each, as defined below) of the
Corporation. See "--Subordination." Because the Corporation is a holding
company, the right of the Corporation to participate in any distribution of
assets of any subsidiary, including the Bank, upon such subsidiary's
liquidation or reorganization or otherwise (and thus the ability of holders of
Preferred Securities to benefit indirectly from such distribution), is subject
to the prior claims of creditors of the subsidiary, except to the extent the
Corporation may itself be recognized as a creditor of that subsidiary.
Accordingly, the Junior Subordinated Debentures will be effectively
subordinated to all existing and future liabilities of the Corporation's
subsidiaries, and holders of Junior Subordinated Debentures should look only to
the assets of the Corporation for payments on the Junior Subordinated
Debentures. Except as otherwise provided in the applicable Prospectus
Supplement, the Indenture does not limit the incurrence or issuance of other
secured or unsecured debt of the Corporation, including Senior Debt,
Subordinated Debt or Additional Senior
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Obligations, whether under the Indenture, any other indenture that the
Corporation may enter into in the future or otherwise. See "--Subordination"
and the Prospectus Supplement relating to any offering of Preferred Securities.
The Junior Subordinated Debentures will be issuable in one or more series
pursuant to an indenture supplemental to the Indenture or a resolution of the
Corporation's Board of Directors or a committee thereof.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the Junior Subordinated Debentures: (1) the
title of the Junior Subordinated Debentures; (2) any limit upon the aggregate
principal amount of the Junior Subordinated Debentures; (3) the date or dates
on which the principal of the Junior Subordinated Debentures is payable (the
"Stated Maturity") or the method of determination thereof; (4) the rate or
rates, if any, at which the Junior Subordinated Debentures shall bear interest,
the Interest Payment Dates on which any such interest shall be payable, the
right, if any, of the Corporation to defer or extend an Interest Payment Date,
and the Regular Record Date for any interest payable on any Interest Payment
Date or the method by which any of the foregoing shall be determined; (5) the
place or places where, subject to the terms of the Indenture as described below
under "Payment and Paying Agents," the principal of and premium, if any, and
interest on the Junior Subordinated Debentures will be payable and where,
subject to the terms of the Indenture as described below under
"--Denominations, Registration and Transfer," the Junior Subordinated
Debentures may be presented for registration of transfer or exchange and the
place or places where notices and demands to or upon the Corporation in respect
of the Junior Subordinated Debentures and the Indentures may be made ("Place of
Payment"); (6) any period or periods within or date or dates on which, the
price or prices at which and the terms and conditions upon which Junior
Subordinated Debentures may be redeemed, in whole or in part, at the option of
the Corporation or a holder thereof; (7) the obligation or the right, if any,
of the Corporation or a holder thereof to redeem, purchase or repay the Junior
Subordinated Debentures and the period or periods within which, the price or
prices at which, the currency or currencies (including currency unit or units)
in which and the other terms and conditions upon which the Junior Subordinated
Debentures shall be redeemed, repaid or purchased, in whole or in part,
pursuant to such obligation; (8) the denominations in which any Junior
Subordinated Debentures shall be issuable if other than denominations of $25
and any integral multiple thereof; (9) if other than in U.S. Dollars, the
currency or currencies (including currency unit or units) in which the
principal of (and premium, if any) and interest, if any, on the Junior
Subordinated Debentures shall be payable, or in which the Junior Subordinated
Debentures shall be denominated; (10) any additions, modifications or deletions
in the Events of Default or covenants of the Corporation specified in the
Indenture with respect to the Junior Subordinated Debentures; (11) if other
than the principal amount thereof, the portion of the principal amount of
Junior Subordinated Debentures that shall be payable upon declaration of
acceleration of the maturity thereof; (12) any additions or changes to the
Indenture with respect to a series of Junior Subordinated Debentures as shall
be necessary to permit or facilitate the issuance of such series in bearer
form, registrable or not registrable as to principal, and with or without
interest coupons; (13) any index or indices used to determine the amount of
payments of principal of and premium, if any, on the Junior Subordinated
Debentures and the manner in which such amounts will be determined; (14) the
terms and conditions relating to the issuance of a temporary Global Security
representing all of the Junior Subordinated Debentures of such series and the
exchange of such temporary Global Security for definitive Junior Subordinated
Debentures of such series; (15) subject to the terms described under "-- Global
Junior Subordinated Debentures," whether the Junior Subordinated Debentures of
the series shall be issued in whole or in part in the form of one or more
Global Securities and, in such case, the Depositary for such Global Securities,
which Depositary shall be a clearing agency registered under the Exchange Act;
(16) the appointment of any Paying Agent or Agents; (17) the terms and
conditions of any obligation or right of the Corporation or a holder to convert
or exchange the Junior Subordinated Debentures into Preferred Securities; (18)
the form of Trust Agreement and Guarantee Agreement, if applicable; (19) the
relative degree, if any, to which such Junior Subordinated Debentures of the
series shall be senior to or be subordinated to other series of such Junior
Subordinated Debentures or other indebtedness of the Corporation in right of
payment, whether such other series of Junior Subordinated Debentures or other
indebtedness are outstanding or not; and (20) any other terms of the Junior
Subordinated Debentures not inconsistent with the provisions of the Indenture.
Junior Subordinated Debentures may be sold at a substantial discount below
their stated principal amount, bearing no interest or interest at a rate which
at the time of issuance is below market rates. Certain United States Federal
income tax consequences and special considerations applicable to any such
Junior Subordinated Debentures will be described in the applicable Prospectus
Supplement.
If the purchase price of any of the Junior Subordinated Debentures is
payable in one or more foreign currencies or currency units or if any Junior
Subordinated Debentures are denominated in one or more foreign currencies or
currency units or if the principal of, premium, if any, or interest, if any, on
any Junior Subordinated Debentures is payable in one or more foreign currencies
or currency units, the restrictions, elections, certain United States Federal
income tax consequences, specific terms and other information with respect to
such series of Junior Subordinated Debentures and such foreign currency or
currency units will be set forth in the applicable Prospectus Supplement.
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If any index is used to determine the amount of payments of principal of,
premium, if any, or interest on any series of Junior Subordinated Debentures,
special United States Federal income tax, accounting and other considerations
applicable thereto will be described in the applicable Prospectus Supplement.
DENOMINATIONS, REGISTRATION AND TRANSFER
Unless otherwise specified in the applicable Prospectus Supplement, the
Junior Subordinated Debentures will be issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof. Junior
Subordinated Debentures of any series will be exchangeable for other Junior
Subordinated Debentures of the same issue and series, of any authorized
denominations, of a like aggregate principal amount, of the same Original Issue
Date and Stated Maturity and bearing the same interest rate.
Junior Subordinated Debentures may be presented for exchange as provided
above, and may be presented for registration of transfer (with the form of
transfer endorsed thereon, or a satisfactory written instrument of transfer,
duly executed), at the office of the appropriate Securities Registrar or at the
office of any transfer agent designated by the Corporation for such purpose
with respect to any series of Junior Subordinated Debentures and referred to in
the applicable Prospectus Supplement, without service charge and upon payment
of any taxes and other governmental charges as described in the Indenture. The
Corporation will appoint the Debenture Trustee as Securities Registrar under the
Indenture. If the applicable Prospectus Supplement refers to any transfer
agents (in addition to the Securities Registrar) initially designated by the
Corporation with respect to any series of Junior Subordinated Debentures, the
Corporation may at any time rescind the designation of any such transfer agent
or approve a change in the location through which any such transfer agent acts,
provided that the Corporation maintains a transfer agent in each Place of
Payment for such series. The Corporation may at any time designate additional
transfer agents with respect to any series of Junior Subordinated Debentures.
In the event of any redemption, neither the Corporation nor the Debenture
Trustee shall be required to (i) issue, register the transfer of or exchange
Junior Subordinated Debentures of any series during a period beginning at the
opening of business 15 days before the day of selection for redemption of
Junior Subordinated Debentures of that series and ending at the close of
business on the day of mailing of the relevant notice of redemption or (ii)
transfer or exchange any Junior Subordinated Debentures so selected for
redemption, except, in the case of any Junior Subordinated Debentures being
redeemed in part, any portion thereof not to be redeemed.
GLOBAL JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures of a series may be issued in whole or
in part in the form of one or more Global Junior Subordinated Debentures that
will be deposited with, or on behalf of, a depositary (the "Depositary")
identified in the Prospectus Supplement relating to such series. Global Junior
Subordinated Debentures may be issued only in fully registered form and in
either temporary or permanent form. Unless and until it is exchanged in whole
or in part for the individual Junior Subordinated Debentures represented
thereby, a Global Junior Subordinated Debenture may not be transferred except
as a whole by the Depositary for such Global Junior Subordinated Debenture to a
nominee of such Depositary or by a nominee of such Depositary to such
Depositary or another nominee of such Depositary or by the Depositary or any
nominee to a successor Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of Junior Subordinated Debentures will be described in the Prospectus
Supplement relating to such series. The Corporation anticipates that the
following provisions will generally apply to depositary arrangements.
Upon the issuance of a Global Junior Subordinated Debenture, and the
deposit of such Global Junior Subordinated Debenture with or on behalf of the
Depositary, the Depositary for such Global Junior Subordinated Debenture or its
nominee will credit, on its book-entry registration and transfer system, the
respective principal amounts of the individual Junior Subordinated Debentures
represented by such Global Junior Subordinated Debenture to the accounts of
persons that have accounts with such Depositary ("Participants"). Such
accounts shall be designated by the dealers, underwriters or agents with
respect to such Junior Subordinated Debentures or by the Corporation if such
Junior Subordinated Debentures are offered and sold directly by the
Corporation. Ownership of beneficial interests in a Global Junior Subordinated
Debenture will be limited to Participants or persons that may hold interests
through Participants. Ownership of beneficial interests in such Global Junior
Subordinated Debenture will be shown on, and the transfer of that ownership
will be effected only through, records maintained by the applicable Depositary
or its nominee (with respect to interests of Participants) and the records of
Participants (with respect to interests of persons who hold through
Participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Junior Subordinated Debenture.
So long as the Depositary for a Global Junior Subordinated Debenture, or
its nominee, is the registered owner of such Global Junior Subordinated
Debenture, such Depositary or such nominee, as the case may be, will be
considered the sole owner or holder of the Junior Subordinated Debentures
represented by such Global Junior Subordinated Debenture for all purposes under
the Indenture
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governing such Junior Subordinated Debentures. Except as provided below,
owners of beneficial interests in a Global Junior Subordinated Debenture will
not be entitled to have any of the individual Junior Subordinated Debentures of
the series represented by such Global Junior Subordinated Debenture registered
in their names, will not receive or be entitled to receive physical delivery of
any such Junior Subordinated Debentures of such series in definitive form and
will not be considered the owners or holders thereof under the Indenture.
Payments of principal of (and premium, if any) and interest on individual
Junior Subordinated Debentures represented by a Global Junior Subordinated
Debenture registered in the name of a Depositary or its nominee will be made to
the Depositary or its nominee, as the case may be, as the registered owner of
the Global Junior Subordinated Debenture representing such Junior Subordinated
Debentures. None of the Corporation, the Debenture Trustee, any Paying Agent,
or the Securities Registrar for such Junior Subordinated Debentures will have
any responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of the Global Junior
Subordinated Debenture representing such Junior Subordinated Debentures or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The Corporation expects that the Depositary for a series of Junior
Subordinated Debentures or its nominee, upon receipt of any payment of
principal, premium or interest in respect of a permanent Global Junior
Subordinated Debenture representing any of such Junior Subordinated Debentures,
immediately will credit Participants' accounts with payments in amounts
proportionate to their respective beneficial interest in the principal amount
of such Global Junior Subordinated Debenture for such Junior Subordinated
Debentures as shown on the records of such Depositary or its nominee. The
Corporation also expects that payments by Participants to owners of beneficial
interests in such Global Junior Subordinated Debenture held through such
Participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in bearer
form or registered in "street name." Such payments will be the responsibility
of such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Depositary for a series of Junior Subordinated Debentures is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by the Corporation within 90 days, the Corporation
will issue individual Junior Subordinated Debentures of such series in exchange
for the Global Junior Subordinated Debenture representing such series of Junior
Subordinated Debentures. In addition, the Corporation may at any time and in
its sole discretion, subject to any limitations described in the Prospectus
Supplement relating to such Junior Subordinated Debentures, determine not to
have any Junior Subordinated Debentures of such series represented by one or
more Global Junior Subordinated Debentures and, in such event, will issue
individual Junior Subordinated Debentures of such series in exchange for the
Global Junior Subordinated Debenture or Securities representing such series of
Junior Subordinated Debentures. Further, if the Corporation so specifies with
respect to the Junior Subordinated Debentures of a series, an owner of a
beneficial interest in a Global Junior Subordinated Debenture representing
Junior Subordinated Debentures of such series may, on terms acceptable to the
Corporation, the Debenture Trustee and the Depositary for such Global Junior
Subordinated Debenture, receive individual Junior Subordinated Debentures of
such series in exchange for such beneficial interests, subject to any
limitations described in the Prospectus Supplement relating to such Junior
Subordinated Debentures. In any such instance, an owner of a beneficial
interest in a Global Junior Subordinated Debenture will be entitled to physical
delivery of individual Junior Subordinated Debentures of the series represented
by such Global Junior Subordinated Debenture equal in principal amount to such
beneficial interest and to have such Junior Subordinated Debentures registered
in its name. Individual Junior Subordinated Debentures of such series so
issued will be issued in denominations, unless otherwise specified by the
Corporation, of $25 and integral multiples thereof.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement,
payment of principal of (and premium, if any) and any interest on Junior
Subordinated Debentures will be made at the office of the Debenture Trustee in
the City of New York or at the office of such Paying Agent or Paying Agents as
the Corporation may designate from time to time in the applicable Prospectus
Supplement, except that at the option of the Corporation payment of any
interest may be made (i), except in the case of Global Junior Subordinated
Debentures, by check mailed to the address of the person entitled thereto as
such address shall appear in the Securities Register or (ii) by transfer to an
account maintained by the person entitled thereto as specified in the
Securities Register, provided that proper transfer instructions have been
received by the Regular Record Date. Unless otherwise indicated in the
applicable Prospectus Supplement, payment of any interest on Junior
Subordinated Debentures will be made to the person in whose name such Junior
Subordinated Debenture is registered at the close of business on the Regular
Record Date for such interest, except in the case of Defaulted Interest. The
Corporation may at any time designate additional Paying Agents or rescind the
designation of any Paying Agent; however the Corporation will at all times be
required to maintain a Paying Agent in each Place of Payment for each series of
Junior Subordinated Debentures.
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Any moneys deposited with the Debenture Trustee or any Paying Agent, or
then held by the Corporation in trust, for the payment of the principal of (and
premium, if any) or interest on any Junior Subordinated Debenture and remaining
unclaimed for two years after such principal (and premium, if any) or interest
has become due and payable shall, at the request of the Corporation, be repaid
to the Corporation and the holder of such Junior Subordinated Debenture shall
thereafter look, as a general unsecured creditor, only to the Corporation for
payment thereof.
OPTION TO DEFER INTEREST PAYMENT
If provided in the applicable Prospectus Supplement, the Corporation shall
have the right at any time and from time to time during the term of any series
of Junior Subordinated Debentures to defer payment of interest for such number
of consecutive interest payment periods as may be specified in the applicable
Prospectus Supplement (each, an "Extension Period"), subject to the terms,
conditions and covenants, if any, specified in such Prospectus Supplement,
provided that such Extension Period may not extend beyond the Stated Maturity
of such series of Junior Subordinated Debentures. Certain United States
Federal income tax consequences and special considerations applicable to any
such Junior Subordinated Debentures will be described in the applicable
Prospectus Supplement.
REDEMPTION
Unless otherwise indicated in the applicable Prospectus Supplement, Junior
Subordinated Debentures will not be subject to any sinking fund.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Corporation may, at its option and subject to receipt of prior approval by the
Board of Governors of the Federal Reserve System (the "Federal Reserve") if
then required under applicable capital guidelines or policies of the Federal
Reserve, redeem the Junior Subordinated Debentures of any series in whole at
any time or in part from time to time. If the Junior Subordinated Debentures
of any series are so redeemable only on or after a specified date or upon the
satisfaction of additional conditions, the applicable Prospectus Supplement
will specify such date or describe such conditions. Junior Subordinated
Debentures in denominations larger than $25 may be redeemed in part but only in
integral multiples of $25. Except as otherwise specified in the applicable
Prospectus Supplement, the redemption price for any Junior Subordinated
Debenture so redeemed shall equal any accrued and unpaid interest thereon to
the redemption date, plus 100% of the principal amount thereof.
Except as otherwise specified in the applicable Prospectus Supplement, if
a Debenture Tax Event (as defined below) in respect of a series of Junior
Subordinated Debentures shall occur and be continuing, the Corporation may, at
its option and subject to receipt of prior approval by the Federal Reserve if
then required under applicable capital guidelines or policies of the Federal
Reserve, redeem such series of Junior Subordinated Debentures in whole (but not
in part) at any time within 90 days of the occurrence of such Debenture Tax
Event, at a redemption price equal to 100% of the principal amount of such
Junior Subordinated Debentures then outstanding plus accrued and unpaid
interest to the date fixed for redemption.
"Debenture Tax Event" means the receipt by the Corporation of an opinion
of counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of issuance
of the applicable series of Junior Subordinated Debentures under the Indenture,
there is more than an insubstantial risk that interest payable by the
Corporation on such series of Junior Subordinated Debentures is not, or within
90 days of the date of such opinion will not be, deductible by the Corporation,
in whole or in part, for United States Federal income tax purposes.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Junior Subordinated
Debentures to be redeemed at its registered address. Unless the Corporation
defaults in payment of the redemption price, on and after the redemption date
interest ceases to accrue on such Junior Subordinated Debentures or portions
thereof called for redemption.
RESTRICTIONS ON CERTAIN PAYMENTS
The Corporation will covenant, as to each series of Junior Subordinated
Debentures, that it will not, and will not permit any subsidiary of the
Corporation to, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any
of the Corporation's capital stock, (ii) make any payment of principal,
interest or premium, if any, on or repay or repurchase or redeem any debt
securities of the Corporation (including other series of Junior Subordinated
Debentures) that rank pari passu with or junior in interest to the Junior
Subordinated Debentures or (iii) make any guarantee payments
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with respect to any guarantee by the Corporation of the debt securities of any
subsidiary of the Corporation if such guarantee ranks pari passu or junior in
interest to the Junior Subordinated Debentures (other than (a) dividends or
distributions in capital stock of the Corporation, (b) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption
or repurchase of any such rights pursuant thereto, (c) payments under any
Guarantee and (d) purchases of common stock related to the issuance of common
stock or rights under any of the Corporation's benefit plans for its directors,
officers or employees) if at such time (i) there shall have occurred any event
of which the Corporation has actual knowledge that (a) with the giving of
notice or the lapse of time, or both, would constitute an "Event of Default"
under the Indenture with respect to the Junior Subordinated Debentures of such
series and (b) in respect of which the Corporation shall not have taken
reasonable steps to cure, (ii) if such Junior Subordinated Debentures are held
by an Issuer of a series of Related Preferred Securities, the Corporation shall
be in default with respect to its payment of any obligations under the
Guarantee relating to such Related Preferred Securities or (iii) the
Corporation shall have given notice of its selection of an Extension Period as
provided in the Indenture with respect to the Junior Subordinated Debentures of
such series and shall not have rescinded such notice, or such Extension Period,
or any extension thereof, shall be continuing.
MODIFICATION OF INDENTURE
From time to time the Corporation and the Debenture Trustee may, without
the consent of the holders of any series of Junior Subordinated Debentures,
amend, waive or supplement the Indenture for specified purposes, including,
among other things, curing ambiguities, defects or inconsistencies (provided
that any such action does not materially adversely affect the interest of the
holders of any series of Junior Subordinated Debentures or, in the case of
Corresponding Junior Subordinated Debentures, the holders of the Related
Preferred Securities so long as they remain outstanding) and qualifying, or
maintaining the qualification of, the Indenture under the Trust Indenture Act.
The Indenture contains provisions permitting the Corporation and the Debenture
Trustee, with the consent of the holders of not less than a majority in
principal amount of each outstanding series of Junior Subordinated Debentures
affected, to modify the Indenture in a manner affecting the rights of the
holders of such series of the Junior Subordinated Debentures; provided, that no
such modification may, without the consent of the holder of each outstanding
Junior Subordinated Debenture so affected, (i) change the Stated Maturity of
any series of Junior Subordinated Debentures (except as otherwise specified in
the applicable Prospectus Supplement), or reduce the principal amount thereof,
or reduce the rate or extend the time of payment of interest thereon or (ii)
reduce the percentage of principal amount of Junior Subordinated Debentures of
any series, the holders of which are required to consent to any such
modification of the Indenture, provided that, in the case of Corresponding
Junior Subordinated Debentures, so long as any of the Related Preferred
Securities remain outstanding, no such modification may be made that adversely
affects the holders of such Preferred Securities in any material respect, and
no termination of the Indenture may occur, and no waiver of any Debenture Event
of Default or compliance with any covenant under the Indenture may be
effective, without the prior consent of the holders of at least a majority of
the aggregate liquidation preference of such Related Preferred Securities
unless and until the principal of the Corresponding Junior Subordinated
Debentures and all accrued and unpaid interest thereon have been paid in full
and certain other conditions are satisfied.
In addition, the Corporation and the Debenture Trustee may execute,
without the consent of any holder of Junior Subordinated Debentures, any
supplemental Indenture for the purpose of creating any new series of Junior
Subordinated Debentures.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to a series of Junior Subordinated Debentures that has
occurred and is continuing constitutes a "Debenture Event of Default" with
respect to such series of Junior Subordinated Debentures:
(i) failure for 30 days to pay any interest on such series of the
Junior Subordinated Debentures, when due (subject to the deferral of any
due date in the case of an Extension Period); or
(ii) failure to pay any principal or premium, if any, on such
series of Junior Subordinated Debentures when due whether at maturity,
upon redemption by declaration or otherwise; or
(iii) failure to observe or perform in any material respect certain
other covenants contained in the Indenture for 90 days after written
notice to the Corporation from the Debenture Trustee or the holders of at
least 25% in aggregate outstanding principal amount of such series of
outstanding Junior Subordinated Debentures; or
(iv) certain events in bankruptcy, insolvency or reorganization of
the Corporation.
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The holders of a majority in aggregate outstanding principal amount of
such series of Junior Subordinated Debentures have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Debenture Trustee. The Debenture Trustee or the holders of not less than
25% in aggregate outstanding principal amount of such series of Junior
Subordinated Debentures may declare the principal due and payable immediately
upon a Debenture Event of Default, and, in the case of Corresponding Junior
Subordinated Debentures, should the Debenture Trustee or such holders of such
Corresponding Junior Subordinated Debentures fail to make such declaration, the
holders of at least 25% in aggregate liquidation preference of the Related
Preferred Securities shall have such right. The holders of a majority in
aggregate outstanding principal amount of such series of Junior Subordinated
Debentures may annul such declaration and waive the default if the default
(other than the non-payment of the principal of such series of Junior
Subordinated Debentures which has become due solely by such acceleration) has
been cured and a sum sufficient to pay all matured installments of interest and
principal due otherwise than by acceleration has been deposited with the
Debenture Trustee. In the case of Corresponding Junior Subordinated
Debentures, should the holders of such Corresponding Junior Subordinated
Debentures fail to annul such declaration and waive such default, the holders
of a majority in aggregate liquidation preference of the Related Preferred
Securities shall have such right.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debentures affected thereby may, on behalf of the holders
of all the Junior Subordinated Debentures, waive any past default, except a
default in the payment of principal or interest (unless such default has been
cured and a sum sufficient to pay all matured installments of interest and
principal due otherwise than by acceleration has been deposited with the
Debenture Trustee) or a default in respect of a covenant or provision which
under the Indenture cannot be modified or amended without the consent of the
holder of each outstanding Junior Subordinated Debenture. In the case of
Corresponding Junior Subordinated Debentures, should the holders of such
Corresponding Junior Subordinated Debentures fail to annul such declaration and
waive such default, the holders of a majority in aggregate liquidation
preference of the Related Preferred Securities shall have such right. The
Corporation is required to file annually with the Debenture Trustee a
certificate as to whether or not the Corporation is in compliance with all the
conditions and covenants applicable to it under the Indenture.
In case a Debenture Event of Default shall occur and be continuing as to a
series of Corresponding Junior Subordinated Debentures, the Property Trustee
will have the right to declare the principal of and the interest on such
Corresponding Junior Subordinated Debentures, and any other amounts payable
under the Indenture, to be forthwith due and payable and to enforce its other
rights as a creditor with respect to such Corresponding Junior Subordinated
Debentures.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Corporation to pay interest or
principal on the Corresponding Junior Subordinated Debentures on the date such
interest or principal is otherwise payable, a holder of Preferred Securities
may institute a legal proceeding directly against the Corporation for
enforcement of payment to such holder of the principal of or interest on such
Corresponding Junior Subordinated Debentures having a principal amount equal to
the aggregate Liquidation Amount of the related Preferred Securities of such
holder (a "Direct Action"). The Corporation may not amend the Indenture to
remove the foregoing right to bring a Direct Action without the prior written
consent of the holders of all of the Preferred Securities. If the right to
bring a Direct Action is removed, the applicable Issuer may become subject to
the reporting obligations under the Exchange Act. The Corporation shall have
the right under the Indenture to set-off any payment made to such holder of
Preferred Securities by the Corporation in connection with a Direct Action.
The holders of the Preferred Securities would not be able to exercise
directly any remedies other than those set forth in the preceding paragraph
available to the holders of the Junior Subordinated Debentures unless there
shall have been an Event of Default under the Trust Agreement. See
"Description of Preferred Securities--Events of Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Corporation may consolidate with or merge
into any other person or convey, transfer or lease its properties and assets
substantially as an entirety to any person, provided that (i) in case the
Corporation consolidates with or merges into another person or conveys or
transfers its properties and assets substantially as an entirety to any person,
the successor person is organized under the laws of the United States or any
state or the District of Columbia, and such successor person expressly assumes
the Corporation's obligations on the Junior Subordinated Debentures issued
under the Indenture; (ii) immediately after giving effect thereto, no Debenture
Event of Default, and no event which, after notice or lapse of time or both,
would become a Debenture Event of Default, shall have occurred and be
continuing; (iii) in the case of Corresponding Junior Subordinated Debentures,
such transaction is permitted under the related Trust Agreement and Guarantee
and does not give rise to any breach or violation of the related Trust
Agreement or Guarantee, and (iv) certain other conditions as prescribed in the
Indenture are met.
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The general provisions of the Indenture do not afford holders of the
Junior Subordinated Debentures protection in the event of a highly leveraged or
other transaction involving the Corporation that may adversely affect holders
of the Junior Subordinated Debentures.
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all Junior
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation (i) have become due and payable or (ii) will become due and
payable at their Stated Maturity within one year, and the Corporation deposits
or causes to be deposited with the Debenture Trustee trust funds, in trust, for
the purpose and in an amount in the currency or currencies in which the Junior
Subordinated Debentures are payable sufficient to pay and discharge the entire
indebtedness on the Junior Subordinated Debentures not previously delivered to
the Debenture Trustee for cancellation, for the principal (and premium, if any)
and interest to the date of the deposit or to the Stated Maturity, as the case
may be, then the Indenture will cease to be of further effect (except as to the
Corporation's obligations to pay all other sums due pursuant to the Indenture
and to provide the officers' certificates and opinions of counsel described
therein), and the Corporation will be deemed to have satisfied and discharged
the Indenture.
CONVERSION OR EXCHANGE
If and to the extent indicated in the applicable Prospectus Supplement,
the Junior Subordinated Debentures of any series may be convertible or
exchangeable into Preferred Securities or other securities. The specific terms
on which Junior Subordinated Debentures of any series may be so converted or
exchanged will be set forth in the applicable Prospectus Supplement. Such
terms may include provisions for conversion or exchange, either mandatory, at
the option of the holder, or at the option of the Corporation, in which case
the number of shares of Preferred Securities or other securities to be received
by the holders of Junior Subordinated Debentures would be calculated as of a
time and in the manner stated in the applicable Prospectus Supplement.
SUBORDINATION
In the Indenture, the Corporation has covenanted and agreed that any
Junior Subordinated Debentures issued thereunder will be subordinate and junior
in right of payment to all Senior Debt, Subordinated Debt and Additional Senior
Obligations to the extent provided in the Indenture. Upon any payment or
distribution of assets to creditors upon any liquidation, dissolution, winding
up, reorganization, assignment for the benefit of creditors, marshaling of
assets or any bankruptcy, insolvency, debt restructuring or similar proceedings
in connection with any insolvency or bankruptcy proceeding of the Corporation,
the holders of Senior Debt, Subordinated Debt and Additional Senior Obligations
will first be entitled to receive payment in full of principal of (and premium,
if any) and interest, if any, on such Senior Debt, Subordinated Debt and
Additional Senior Obligations before the holders of Junior Subordinated
Debentures or, in the case of Corresponding Junior Subordinated Debentures, the
Property Trustee on behalf of the holders will be entitled to receive or retain
any payment in respect of the principal of (and premium, if any) or interest,
if any, on the Junior Subordinated Debentures.
In the event of the acceleration of the maturity of any Junior
Subordinated Debentures, the holders of all Senior Debt, Subordinated Debt and
Additional Senior Obligations outstanding at the time of such acceleration will
first be entitled to receive payment in full of all amounts due thereon
(including any amounts due upon acceleration) before the holders of Junior
Subordinated Debentures will be entitled to receive or retain any payment in
respect of the principal of (or premium, if any) or interest, if any, on the
Junior Subordinated Debentures; provided, however, that holders of Subordinated
Debt shall not be entitled to receive payment of any such amounts to the extent
that such Subordinated Debt is by its terms subordinated to trade creditors.
No payments on account of principal (or premium, if any) or interest, if
any, in respect of the Junior Subordinated Debentures may be made if there
shall have occurred and be continuing a default in any payment with respect to
Senior Debt, Subordinated Debt or Additional Senior Obligations or an event of
default with respect to any Senior Debt, Subordinated Debt or Additional Senior
Obligations resulting in the acceleration of the maturity thereof, or if any
judicial proceeding shall be pending with respect to any such default.
"Debt" means with respect to any person, whether recourse is to all or a
portion of the assets of such person and whether or not contingent, (i) every
obligation of such person for money borrowed; (ii) every obligation of such
person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such person; (iv) every obligation of such person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such person; and (vi) and
every obligation of the type referred to in clauses (i) through (v) of another
person and
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all dividends of another person the payment of which, in either case, such
person has guaranteed or is responsible or liable, directly or indirectly, as
obligor or otherwise.
"Senior Debt" means the principal of (and premium, if any) and interest,
if any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Corporation whether or not
such claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of the Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Junior Subordinated Debentures or to other
Debt which is pari passu with, or subordinated to, the Junior Subordinated
Debentures; provided, however, that Senior Debt shall not be deemed to include
(i) any Debt of the Corporation which when incurred and without respect to any
election under Section 1111(b) of the United States Bankruptcy Code of 1978, as
amended, was without recourse to the Corporation, (ii) any Debt of the
Corporation to any of its subsidiaries, (iii) Debt to any employee of the
Corporation, (iv) Debt which by its terms is subordinated to trade accounts
payable or accrued liabilities arising in the ordinary course of business to
the extent that payments made to the holders of such Debt by the holders of the
Junior Subordinated Debentures as a result of the subordination provisions of
the Indenture would be greater than such payments otherwise would have been as
a result of any obligation of such holders to pay amounts over to the obligees
on such trade accounts payable or accrued liabilities arising in the ordinary
course of business as a result of subordination provisions to which such Debt
is subject; (v) Debt which constitutes Subordinated Debt, and (vi) any other
debt securities issued pursuant to the Indenture.
"Subordinated Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Corporation
whether or not such claim for post-petition interest is allowed in such
proceeding), on Debt, whether incurred on or prior to the date of the Indenture
or thereafter incurred, which is by its terms expressly provided to be junior
and subordinate to other Debt of the Corporation (other than the Junior
Subordinated Debentures).
"Additional Senior Obligations" means all indebtedness of the Corporation
whether incurred on or prior to the date of the Indenture or thereafter
incurred, for claims in respect of derivative products such as interest and
foreign exchange rate contracts, commodity contracts and similar arrangements;
provided, however, that Additional Senior Obligations do not include claims in
respect of Senior Debt or Subordinated Debt or obligations which, by their
terms, are expressly stated to be not superior in right of payment to the
Junior Subordinated Debentures or to rank pari passu in right of payment with
the Junior Subordinated Securities Debentures. For purposes of this
definition, "claim" shall have the meaning assigned thereto in Section 101 (4)
of the United States Bankruptcy Code of 1978, as amended.
The Indenture places no limitation on the amount of Senior Debt,
Subordinated Debt or Additional Senior Obligations that may be incurred by the
Corporation. The Corporation expects from time to time to incur additional
indebtedness constituting Senior Debt, Subordinated Debt and Additional Senior
Obligations.
The Indenture provides that the foregoing subordination provisions,
insofar as they relate to any particular issue of Junior Subordinated
Debentures, may be changed prior to such issuance. Any such change would be
described in the applicable Prospectus Supplement.
GOVERNING LAW
The Indenture and the Junior Subordinated Debentures will be governed by
and construed in accordance with the laws of the State of New York.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of Junior Subordinated Debentures, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. The Debenture Trustee is not required to
expend or risk its own funds or otherwise incur personal financial liability in
the performance of its duties if the Debenture Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
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CORRESPONDING JUNIOR SUBORDINATED DEBENTURES
The Corresponding Junior Subordinated Debentures may be issued in one or
more series of Junior Subordinated Debentures under the Indenture with terms
corresponding to the terms of a series of Related Preferred Securities. In
that event, concurrently with the issuance of each Issuer's Preferred
Securities, such Issuer will invest the proceeds thereof and the consideration
paid by the Corporation for the Common Securities of such Issuer in a series of
Corresponding Junior Subordinated Debentures issued by the Corporation to such
Issuer. Each series of Corresponding Junior Subordinated Debentures will be in
the principal amount equal to the aggregate stated Liquidation Amount of the
Related Preferred Securities and the Common Securities of such Issuer and will
rank pari passu with all other series of Junior Subordinated Debentures.
Holders of the Related Preferred Securities for a series of Corresponding
Junior Subordinated Debentures will have the rights in connection with
modifications to the Indenture or upon occurrence of Debenture Events of
Default described under "--Modification of Indenture" and "--Debenture Events
of Default," unless provided otherwise in the Prospectus Supplement for such
Related Preferred Securities.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Tax Event (as defined below) in respect of an Issuer of Related Preferred
Securities shall occur and be continuing, the Corporation may, at its option
and subject to prior approval of the Federal Reserve if then so required under
applicable capital guidelines or policies of the Federal Reserve, redeem the
Corresponding Junior Subordinated Debentures at any time within 90 days of the
occurrence of such Tax Event, in whole but not in part, subject to the
provisions of the Indenture, and whether or not such Corresponding Junior
Subordinated Debentures are then otherwise redeemable at the option of the
Corporation. The redemption price for any Corresponding Junior Subordinated
Debentures shall be equal to 100% of the principal amount of such Corresponding
Junior Subordinated Debentures then outstanding plus accrued and unpaid
interest to the date fixed for redemption. For so long as the applicable
Issuer is the holder of all the outstanding series of Corresponding Junior
Subordinated Debentures, the proceeds of any such redemption will be used by
the Issuer to redeem the corresponding Trust Securities in accordance with
their terms. The Corporation may not redeem a series of Corresponding Junior
Subordinated Debentures in part unless all accrued and unpaid interest has been
paid in full on all outstanding Corresponding Junior Subordinated Debentures of
such series for all interest periods terminating on or prior to the Redemption
Date.
The Corporation will covenant in the Indenture, as to each series of
Corresponding Junior Subordinated Debentures, that if and so long as (i) the
Issuer of the related series of Trust Securities is the holder of all such
Corresponding Junior Subordinated Debentures, (ii) a Tax Event in respect of
such Issuer has occurred and is continuing and (iii) the Corporation has
elected, and has not revoked such election, to pay Additional Sums (as defined
under "Description of Preferred Securities--Redemption or Exchange") in respect
of such Trust Securities, the Corporation will pay to such Issuer such
Additional Sums. The Corporation will also covenant, as to each series of
Corresponding Junior Subordinated Debentures, (i) to maintain directly or
indirectly 100% ownership of the Common Securities of the Issuer to which
Corresponding Junior Subordinated Debentures have been issued, provided that
certain successors which are permitted pursuant to the Indenture may succeed to
the Corporation's ownership of the Common Securities, (ii) not to voluntarily
terminate, wind up or liquidate any Issuer, except if so specified in the
applicable Prospectus Supplement upon prior approval of the Federal Reserve if
then so required under applicable capital guidelines or policies of the Federal
Reserve, and (a) in connection with a distribution of Corresponding Junior
Subordinated Debentures to the holders of the Preferred Securities in exchange
therefor upon liquidation of such Issuer, or (b) in connection with certain
mergers, consolidations or amalgamations permitted by the related Trust
Agreement and (iii) to use its reasonable efforts, consistent with the terms
and provisions of the related Trust Agreement, to cause such Issuer to remain
classified as a grantor trust and not as an association taxable as a
corporation for United States Federal income tax purposes.
DESCRIPTION OF PREFERRED SECURITIES
Pursuant to the terms of the Trust Agreement for each Issuer, the Issuer
Trustees on behalf of such Issuer will issue the Preferred Securities and the
Common Securities. The Preferred Securities of a particular issue will
represent preferred beneficial interests in the Issuer and the holders thereof
will be entitled to a preference in certain circumstances with respect to
Distributions and amounts payable on redemption or liquidation over the Common
Securities of such Issuer, as well as other benefits as described in the
corresponding Trust Agreement. This summary of certain provisions of the
Preferred Securities and each Trust Agreement does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, all the
provisions of each Trust Agreement, including the definitions therein of
certain terms, and the Trust Indenture Act. Wherever particular defined terms
of a Trust Agreement (as amended or supplemented from time to time) are
referred to herein or in a Prospectus Supplement, such defined terms are
incorporated herein or therein by reference. The form of the Trust Agreement
has been filed as an exhibit to the Registration Statement of which this
Prospectus forms a part. Each of the Issuers is a legally separate entity and
the assets of one are not available to satisfy the obligations of any of the
others.
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GENERAL
The Preferred Securities of an Issuer will rank pari passu, and payments
will be made thereon pro rata, with the Common Securities of that Issuer except
as described under "--Subordination of Common Securities." Legal title to the
Corresponding Junior Subordinated Debentures will be held by the Property
Trustee in trust for the benefit of the holders of the related Preferred
Securities and Common Securities. Each Guarantee Agreement executed by the
Corporation for the benefit of the holders of an Issuer's Preferred Securities
(the "Guarantee" for such Preferred Securities) will be a guarantee on a
subordinated basis with respect to the related Preferred Securities but will
not guarantee payment of Distributions or amounts payable on redemption or
liquidation of such Preferred Securities when the related Issuer does not have
funds on hand available to make such payments. See "Description of
Guarantees."
DISTRIBUTIONS
Distributions on the Preferred Securities will be cumulative, will
accumulate from the date of original issuance and will be payable on such dates
as specified in the applicable Prospectus Supplement. In the event that any
date on which Distributions are payable on the Preferred Securities is not a
Business Day (as defined below), payment of the Distribution payable on such
date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect to any such delay) except
that, if such Business Day is in the next succeeding calendar year, payment of
such Distribution shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date (each date on
which Distributions are payable in accordance with the foregoing, a
"Distribution Date"). A "Business Day" shall mean any day other than a
Saturday or a Sunday, or a day on which banking institutions in the City of New
York are authorized or required by law or executive order to remain closed or a
day on which the corporate trust office of the Property Trustee or the
Debenture Trustee is closed for business.
Each Issuer's Preferred Securities represent preferred beneficial
interests in the applicable Issuer, and the Distributions on each Preferred
Security will be payable at a rate specified in the Prospectus Supplement for
such Preferred Securities. The amount of Distributions payable for any period
will be computed on the basis of a 360-day year of twelve 30-day months unless
otherwise specified in the applicable Prospectus Supplement. Distributions to
which holders of Preferred Securities are entitled will accumulate additional
Distributions at the rate per annum if and as specified in the applicable
Prospectus Supplement. The term "Distributions" as used herein includes any
such additional Distributions unless otherwise stated.
If provided in the applicable Prospectus Supplement, the Corporation has
the right under the Indenture, pursuant to which it will issue the
Corresponding Junior Subordinated Debentures, to defer the payment of interest
at any time or from time to time on any series of the Corresponding Junior
Subordinated Debentures for a period which will be specified in such Prospectus
Supplement relating to such series (each, an "Extension Period"), provided that
no Extension Period may extend beyond the Stated Maturity of the Corresponding
Junior Subordinated Debentures. As a consequence of any such extension,
Distributions on the corresponding Preferred Securities would be deferred (but
would continue to accumulate additional Distributions thereon at the rate per
annum set forth in the Prospectus Supplement for such Preferred Securities) by
the Issuer of such Preferred Securities during any such Extension Period.
During such Extension Period, the Corporation may not, and may not permit any
subsidiary of the Corporation to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Corporation's capital stock, (ii) make any payment
of principal, interest or premium, if any, on or repay, repurchase or redeem
any debt securities of the Corporation that rank pari passu with or junior in
interest to the Corresponding Junior Subordinated Debentures or (iii) make any
guarantee payments with respect to any guarantee by the Corporation of debt
securities of any subsidiary of the Corporation if such guarantee ranks pari
passu with or junior in interest to the Corresponding Junior Subordinated
Debentures (other than (a) dividends or distributions in capital stock of the
Corporation, (b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under any Guarantee and (d) purchases of common
stock related to the issuance of common stock or rights under any of the
Corporation's benefit plans for its directors, officers or employees).
The revenue of each Issuer available for distribution to holders of its
Preferred Securities will be limited to payments under the Corresponding Junior
Subordinated Debentures in which the Issuer will invest the proceeds from the
issuance and sale of its Trust Securities and the related Expense Agreement.
See "Description of Junior Subordinated Debentures--Corresponding Junior
Subordinated Debentures." If the Corporation does not make interest payments on
such Corresponding Junior Subordinated Debentures, the Property Trustee will
not have funds available to pay Distributions on the Related Preferred
Securities. The payment of Distributions (if and to the extent the Issuer has
funds legally available for the payment of such Distributions and cash
sufficient to make such payments) is guaranteed by the Corporation on a limited
basis as set forth herein under "Description of Guarantees."
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Distributions on the Preferred Securities will be payable to the holders
thereof as they appear on the register of such Issuer on the relevant record
dates, which, as long as the Preferred Securities remain in book-entry form,
will be one Business Day prior to the relevant Distribution Date. Subject to
any applicable laws and regulations and the provisions of the applicable Trust
Agreement, each such payment will be made as described under "Book--Entry
Issuance." In the event any Preferred Securities are not in book-entry form,
the relevant record date for such Preferred Securities shall be the date at
least 15 days prior to the relevant Distribution Date, as specified in the
applicable Prospectus Supplement.
REDEMPTION OR EXCHANGE
Mandatory Redemption. Upon the repayment or redemption, in whole or in
part, of any Corresponding Junior Subordinated Debentures, whether at maturity
or upon earlier redemption as provided in the Indenture, the proceeds from such
repayment or redemption shall be applied by the Property Trustee to redeem a
Like Amount (as defined below) of the Trust Securities, upon not less than 30
nor more than 60 days notice, at a redemption price (the "Redemption Price")
equal to the aggregate Liquidation Amount of such Trust Securities plus
accumulated but unpaid Distributions thereon to the date of redemption (the
"Redemption Date") and the related amount of the premium, if any, paid by the
Corporation upon the concurrent redemption of such Corresponding Junior
Subordinated Debentures. See "Description of Junior Subordinated
Debentures--Redemption." If less than all of any series of Corresponding
Junior Subordinated Debentures are to be repaid or redeemed on a Redemption
Date, then the proceeds from such repayment or redemption shall be allocated to
the redemption pro rata of the Related Preferred Securities and the Common
Securities. The amount of premium, if any, paid by the Corporation upon the
redemption of all or any part of any series of any Corresponding Junior
Subordinated Debentures to be repaid or redeemed on a Redemption Date shall be
allocated to the redemption pro rata of the Related Preferred Securities and
the Common Securities.
The Corporation will have the right to redeem any series of Corresponding
Junior Subordinated Debentures (i) on or after such date as may be specified in
the applicable Prospectus Supplement, in whole at any time or in part from time
to time or (ii) at any time, in whole (but not in part), upon the occurrence of
a Tax Event, in either case subject to receipt of prior approval by the Federal
Reserve if then required under applicable capital guidelines or policies of the
Federal Reserve.
Distribution of Corresponding Junior Subordinated Debentures. Subject to
the Corporation having received prior approval of the Federal Reserve if so
required under applicable capital guidelines or policies of the Federal
Reserve, the Corporation has the right at any time to liquidate the related
Issuer and, after satisfaction of the liabilities of creditors of such Issuer
as provided by applicable law, cause such Corresponding Junior Subordinated
Debentures to be distributed to the holders of such Preferred Securities and
Common Securities in exchange therefor upon liquidation of the Issuer.
Tax Event Redemption. If a Tax Event in respect of a series of Preferred
Securities and Common Securities shall occur and be continuing, the Corporation
has the right to redeem the Corresponding Junior Subordinated Debentures in
whole (but not in part) and thereby cause a mandatory redemption of such
Preferred Securities and Common Securities in whole (but not in part) at the
Redemption Price within 90 days following the occurrence of such Tax Event. In
the event a Tax Event in respect of a series of Preferred Securities and Common
Securities has occurred and is continuing and the Corporation does not elect to
redeem the Corresponding Junior Subordinated Debentures and thereby cause a
mandatory redemption of such Preferred Securities or to liquidate the related
Issuer and cause the Corresponding Junior Subordinated Debentures to be
distributed to holders of such Preferred Securities and Common Securities in
exchange therefor upon liquidation of the Issuer as described below, such
Preferred Securities will remain outstanding and Additional Sums (as defined
below) may be payable on the Corresponding Junior Subordinated Debentures.
"Additional Sums" means the additional amounts as may be necessary in
order that the amount of Distributions then due and payable by an Issuer on the
outstanding Preferred Securities and Common Securities of the Issuer shall not
be reduced as a result of any additional taxes, duties and other governmental
charges to which such Issuer has become subject as a result of a Tax Event.
"Like Amount" means (i) with respect to a redemption of any series of
Trust Securities, Trust Securities of such series having a Liquidation Amount
(as defined below) equal to that portion of the principal amount of
Corresponding Junior Subordinated Debentures to be contemporaneously redeemed
in accordance with the Indenture, allocated to the Common Securities and to the
Preferred Securities pro rata based upon the relative Liquidation Amounts of
such classes and the proceeds of which will be used to pay the Redemption Price
of such Trust Securities, and (ii) with respect to a distribution of
Corresponding Junior Subordinated Debentures to holders of any series of Trust
Securities in connection with a dissolution or liquidation of the related
Issuer, Corresponding Junior Subordinated Debentures having a principal amount
equal to the Liquidation Amount of the Trust Securities of the holder to whom
such Corresponding Junior Subordinated Debentures are distributed.
"Liquidation Amount" means the stated amount of $25 per Trust Security.
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"Tax Event" means the receipt by the Issuer of a series of Preferred
Securities of an opinion of counsel experienced in such matters to the effect
that, as a result of any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein, or
as a result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is announced on or after the date
of issuance of such Preferred Securities under the Trust Agreement, there is
more than an insubstantial risk that (i) such Issuer is, or will be within 90
days of the date of such opinion, subject to United States Federal income tax
with respect to income received or accrued on the corresponding series of
Corresponding Junior Subordinated Debentures, (ii) interest payable by the
Corporation on such series of Corresponding Junior Subordinated Debentures is
not, or within 90 days of the date of such opinion, will not be, deductible by
the Corporation, in whole or in part, for United States Federal income tax
purposes, or (iii) such Issuer is, or will be within 90 days of the date of
such opinion, subject to more than a de minimis amount of other taxes, duties
or other governmental charges.
After the liquidation date fixed for any distribution of Corresponding
Junior Subordinated Debentures for any series of Preferred Securities (i) such
series of Preferred Securities will no longer be deemed to be outstanding, (ii)
the Depositary or its nominee, as the record holder of such series of Preferred
Securities, will receive a registered global certificate or certificates
representing the Corresponding Junior Subordinated Debentures to be delivered
upon such distribution and (iii) any certificates representing such series of
Preferred Securities not held by the Depositary or its nominee will be deemed
to represent the Corresponding Junior Subordinated Debentures having a
principal amount equal to the stated Liquidation Amount of such series of
Preferred Securities, and bearing accrued and unpaid interest in an amount
equal to the accrued and unpaid Distributions on such series of Preferred
Securities until such certificates are presented to the Administrative Trustees
or their agent for transfer or reissuance.
There can be no assurance as to the market prices for the Preferred
Securities or the Corresponding Junior Subordinated Debentures that may be
distributed in exchange for Preferred Securities if a dissolution and
liquidation of an Issuer were to occur. Accordingly, the Preferred Securities
that an investor may purchase, or the Corresponding Junior Subordinated
Debentures that the investor may receive on dissolution and liquidation of an
Issuer, may trade at a discount to the price that the investor paid to purchase
the Preferred Securities offered hereby.
REDEMPTION PROCEDURES
Preferred Securities redeemed on each Redemption Date shall be redeemed at
the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Corresponding Junior Subordinated Debentures. Redemptions of
the Preferred Securities shall be made and the Redemption Price shall be
payable on each Redemption Date only to the extent that the related Issuer has
funds on hand available for the payment of such Redemption Price. See also
"--Subordination of Common Securities."
If an Issuer gives a notice of redemption in respect of its Preferred
Securities, then, by 12:00 noon, New York City time, on the Redemption Date, to
the extent funds are available, the Property Trustee will deposit irrevocably
with the Depositary funds sufficient to pay the applicable Redemption Price and
will give the Depositary irrevocable instructions and authority to pay the
Redemption Price to the holders of such Preferred Securities. If such
Preferred Securities are no longer in book-entry form, the Property Trustee, to
the extent funds are available, will irrevocably deposit with the paying agent
for such Preferred Securities funds sufficient to pay the applicable Redemption
Price and will give such paying agent irrevocable instructions and authority to
pay the Redemption Price to the holders thereof upon surrender of their
certificates evidencing such Preferred Securities. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date for any
Preferred Securities called for redemption shall be payable to the holders of
such Preferred Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit, all rights of the
holders of such Preferred Securities so called for redemption will cease,
except the right of the holders of such Preferred Securities to receive the
Redemption Price, but without interest on such Redemption Price, and such
Preferred Securities will cease to be outstanding. In the event that any date
fixed for redemption of Preferred Securities is not a Business Day, then
payment of the Redemption Price payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day falls
in the next calendar year, such payment will be made on the immediately
preceding Business Day. In the event that payment of the Redemption Price in
respect of Preferred Securities called for redemption is improperly withheld or
refused and not paid either by the Issuer or by the Corporation pursuant to the
Guarantee as described under "Description of Guarantees," Distributions on such
Preferred Securities will continue to accrue at the then applicable rate, from
the Redemption Date originally established by the Issuer for such Preferred
Securities to the date such Redemption Price is actually paid, in which case
the actual payment date will be the date fixed for redemption for purposes of
calculating the Redemption Price.
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Subject to applicable law (including, without limitation, United States
Federal securities law), the Corporation or its subsidiaries may at any time
and from time to time purchase outstanding Preferred Securities by tender, in
the open market or by private agreement.
Payment of the Redemption Price on the Preferred Securities and any
distribution of Corresponding Junior Subordinated Debentures to holders of
Preferred Securities shall be made to the applicable recordholders thereof as
they appear on the register for such Preferred Securities on the relevant
record date, which shall be one Business Day prior to the relevant Redemption
Date or liquidation date, as applicable; provided, however, that in the event
that any Preferred Securities are not in book-entry form, the relevant record
date for such Preferred Securities shall be a date at least 15 days prior to
the Redemption Date or liquidation date, as applicable, as specified in the
applicable Prospectus Supplement.
If less than all of the Preferred Securities and Common Securities issued
by an Issuer are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of such Preferred Securities and Common Securities to be
redeemed shall be allocated pro rata to the Preferred Securities and the Common
Securities based upon the relative Liquidation Amounts of such classes. The
particular Preferred Securities to be redeemed shall be selected on a pro rata
basis not more than 60 days prior to the Redemption Date by the Property
Trustee from the outstanding Preferred Securities not previously called for
redemption, by such method as the Property Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to $25 or an integral multiple of $25 in excess thereof) of the
Liquidation Amount of Preferred Securities of a denomination larger than $25.
The Property Trustee shall promptly notify the trust registrar in writing of
the Preferred Securities selected for redemption and, in the case of any
Preferred Securities selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For all purposes of each Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption of
Preferred Securities shall relate, in the case of any Preferred Securities
redeemed or to be redeemed only in part, to the portion of the aggregate
Liquidation Amount Preferred Securities which has been or is to be redeemed.
Unless the Issuer defaults in payment of the Redemption Price, on and after the
Redemption Date additional Distributions will cease to accumulate on such
Preferred Securities or portions thereof called for redemption.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each Holder of Trust Securities to be
redeemed at its registered address.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, each Issuer's
Preferred Securities and Common Securities, as applicable, shall be made pro
rata based on the Liquidation Amount of such Preferred Securities and Common
Securities; provided, however, that if on any Distribution Date or Redemption
Date a Debenture Event of Default shall have occurred and be continuing, no
payment or any Distribution on, or Redemption Price of, any of the Issuer's
Common Securities, and no other payment on account of the redemption,
liquidation or other acquisition of such Common Securities shall be made unless
payment in full in cash of all accumulated and unpaid Distributions on all of
the Issuer's outstanding Preferred Securities for all Distribution periods
terminating on or prior thereto or in the case of payment of the Redemption
Price the full amount of such Redemption Price on all of the Issuer's
outstanding Preferred Securities then called for redemption, shall have been
made or provided for, and all funds available to the Property Trustee shall
first be applied to the payment in full in cash of all Distributions on, or
Redemption Price of, the Issuer's Preferred Securities due and payable.
In the case of any Event of Default resulting from a Debenture Event of
Default, the Corporation as holder of such Issuer's Common Securities will be
deemed to have waived any right to act with respect to any such Event of
Default under the applicable Trust Agreement until the effect of all such
Events of Default with respect to such Preferred Securities have been cured,
waived or otherwise eliminated. Until any such Events of Default under the
applicable Trust Agreement with respect to the Preferred Securities have been
so cured, waived or otherwise eliminated, the Property Trustee shall act solely
on behalf of the holders of such Preferred Securities and not on behalf of the
Corporation as holder of the Issuer's Common Securities, and only the holders
of such Preferred Securities will have the right to direct the Property Trustee
to act on their behalf.
LIQUIDATION DISTRIBUTION UPON TERMINATION
Pursuant to each Trust Agreement, each Issuer shall automatically
terminate upon expiration of its term and shall terminate on the first to occur
of: (i) certain events of bankruptcy, dissolution or liquidation of the
Corporation; (ii) the distribution of a Like Amount of the Corresponding Junior
Subordinated Debentures to the holders of its Trust Securities, if the
Corporation, as Depositor, has given direction to the Property Trustee to
terminate such Issuer (which direction is optional and wholly within the
discretion of the Corporation, as Depositor); (iii) redemption of all of the
Issuer's Preferred Securities as described under "Description of Preferred
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Securities--Redemption or Exchange--Mandatory Redemption;" and (iv) the entry
of an order for the dissolution of the Issuer by a court of competent
jurisdiction.
If an early termination occurs as described in clause (i), (ii) or (iv)
above, the Issuer shall be liquidated by the Issuer Trustees as expeditiously
as the Issuer Trustees determine to be possible by distributing, after
satisfaction of liabilities to creditors of such Issuer as provided by
applicable law, to the holders of such Trust Securities a Like Amount of the
Corresponding Junior Subordinated Debentures, unless such distribution is
determined by the Property Trustee not to be practical, in which event such
holders will be entitled to receive out of the assets of the Issuer available
for distribution to holders, after satisfaction of liabilities to creditors of
such Issuer as provided by applicable law, an amount equal to, in the case of
holders of Preferred Securities, the aggregate of the Liquidation Amount plus
accrued and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"). If such Liquidation Distribution can be
paid only in part because such Issuer has insufficient assets available to pay
in full the aggregate Liquidation Distribution, then the amounts payable
directly by such Issuer on its Preferred Securities shall be paid on a pro rata
basis. The holder(s) of such Issuer's Common Securities will be entitled to
receive distributions upon any such liquidation pro rata with the holders of
its Preferred Securities, except that if a Debenture Event of Default has
occurred and is continuing, the Preferred Securities shall have a priority over
the Common Securities.
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under
each Trust Agreement (an "Event of Default") with respect to the Preferred
Securities issued thereunder:
(i) the occurrence of a Debenture Event of Default under the
Indenture (see "Description of Junior Subordinated Debentures--Debenture
Events of Default"); or
(ii) default by the Property Trustee in the payment of any
Distribution when it becomes due and payable, and continuation of such
default for a period of 30 days; or
(iii) default by the Property Trustee in the payment of any
Redemption Price of any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Issuer Trustees in such Trust
Agreement (other than a covenant or warranty a default in the performance
of which or the breach of which is dealt with in clause (ii) or (iii)
above), and continuation of such default or breach for a period of 60 days
after there has been given, by registered or certified mail, to the
defaulting Issuer Trustee or Trustees by the holders of at least 25% in
aggregate liquidation preference of the outstanding Preferred Securities
of the applicable Issuer, a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" under such Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency
with respect to the Property Trustee and the failure by the Corporation to
appoint a successor Property Trustee within 60 days thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of such Issuer's Preferred
Securities, the Administrative Trustees and the Corporation, as Depositor,
unless such Event of Default shall have been cured or waived. The Corporation,
as Depositor, and the Administrative Trustees are required to file annually
with the Property Trustee a certificate as to whether or not they are in
compliance with all the conditions and covenants applicable to them under each
Trust Agreement.
If a Debenture Event of Default has occurred and is continuing, the
Preferred Securities shall have a preference over the Common Securities upon
termination of each Issuer as described above. See "--Liquidation Distribution
Upon Termination." The existence of an Event of Default does not entitle the
holders of Preferred Securities to accelerate the maturity thereof.
REMOVAL OF ISSUER TRUSTEES
Unless a Debenture Event of Default shall have occurred and be continuing,
any Issuer Trustee may be removed at any time by the holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing,
the Property Trustee and the Delaware Trustee may be removed at such time by
the holders of a majority in Liquidation Amount of the outstanding Preferred
Securities. In no event will the holders of the Preferred Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in the Corporation as the holder of the
Common Securities. No resignation or removal of an Issuer Trustee and no
appointment of a successor trustee shall be effective until the acceptance of
appointment by the successor trustee in accordance with the provisions of the
applicable Trust Agreement.
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CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the trust property
may at the time be located, the Corporation, as the holder of the Common
Securities, and the Administrative Trustees shall have power to appoint one or
more persons either to act as a co-trustee, jointly with the Property Trustee,
of all or any part of such trust property, or to act as separate trustee of any
such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such person or persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of the applicable Trust Agreement. In case a
Debenture Event of Default has occurred and is continuing, the Property Trustee
alone shall have power to make such appointment.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any person resulting from any merger,
conversion or consolidation to which such Trustee shall be a party, or any
person succeeding to all or substantially all the corporate trust business of
such Trustee, shall be the successor of such Trustee under each Trust
Agreement, provided such person shall be otherwise qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE ISSUERS
An Issuer may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other person, except as
described below. An Issuer may, at the request of the Corporation, with the
consent of the Administrative Trustees and without the consent of the holders
of the Preferred Securities, merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to a trust organized as such under the laws of any
State; provided, that (i) such successor entity either (a) expressly assumes
all of the obligations of such Issuer with respect to the Preferred Securities
or (b) substitutes for the Preferred Securities other securities having
substantially the same terms as the Preferred Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the Preferred
Securities rank in priority with respect to distributions and payments upon
liquidation, redemption and otherwise, (ii) the Corporation expressly appoints
a trustee of such successor entity possessing the same powers and duties as the
Property Trustee as the holder of the Corresponding Junior Subordinated
Debentures, (iii) the Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or other organization on which the Preferred Securities are
then listed, if any, (iv) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Preferred
Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does
not adversely affect the rights, preferences and privileges of the holders of
the Preferred Securities (including any Successor Securities) in any material
respect, (vi) such successor entity has a purpose identical to that of the
Issuer, (vii) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Corporation has received an opinion from
independent counsel to the Issuer experienced in such matters to the effect
that (a) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights, preferences and
privileges of the holders of the Preferred Securities (including any Successor
Securities) in any material respect, and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease,
neither the Issuer nor such successor entity will be required to register as an
investment company under the Investment Company Act of 1940, as amended (the
"Investment Company Act") and (viii) the Corporation or any permitted successor
or assignee owns all of the Common Securities of such successor entity and
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee. Notwithstanding
the foregoing, an Issuer shall not, except with the consent of holders of 100%
in Liquidation Amount of the Preferred Securities, consolidate, amalgamate,
merge with or into, or be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to any other entity or
permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Issuer or the successor entity to
be classified as other than a grantor trust for United States Federal income
tax purposes.
VOTING RIGHTS; AMENDMENT OF EACH TRUST AGREEMENT
Except as provided below and under "Description of Guarantees--Amendments
and Assignment" and as otherwise required by law and the applicable Trust
Agreement, the holders of the Preferred Securities will have no voting rights.
Each Trust Agreement may be amended from time to time by the Corporation,
the Property Trustee, the Delaware Trustee and the Administrative Trustees,
without the consent of the holders of the Preferred Securities (i) to cure any
ambiguity, correct or supplement any provisions
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in such Trust Agreement that may be inconsistent with any other provision, or
to make any other provisions with respect to matters or questions arising under
such Trust Agreement, which shall not be inconsistent with the other provisions
of such Trust Agreement, or (ii) to modify, eliminate or add to any provisions
of such Trust Agreement to such extent as shall be necessary to ensure that the
Issuer will be classified for United States Federal income tax purposes as a
grantor trust at all times that any Trust Securities are outstanding or to
ensure that the Issuer will not be required to register as an "investment
company" under the Investment Company Act; provided, however, that in the case
of clause (i), such action shall not adversely affect in any material respect
the interests of any holder of Trust Securities, and any amendments of such
Trust Agreement shall become effective when notice thereof is given to the
holders of Trust Securities. Each Trust Agreement may be amended by the Issuer
Trustees and the Corporation with (i) the consent of holders representing not
less than a majority (based upon Liquidation Amounts) of the outstanding Trust
Securities, and (ii) receipt by the Issuer Trustees of an opinion of counsel to
the effect that such amendment or the exercise of any power granted to the
Issuer Trustees in accordance with such amendment will not affect the Issuer's
status as a grantor trust for United States Federal income tax purposes or the
Issuer's exemption from status as an "investment company" under the Investment
Company Act, provided that without the consent of each holder of Trust
Securities, such Trust Agreement may not be amended to (i) change the amount or
timing of any Distribution on the Trust Securities or otherwise adversely
affect the amount of any Distribution required to be made in respect of the
Trust Securities as of a specified date or (ii) restrict the right of a holder
of Trust Securities to institute suit for the enforcement of any such payment
on or after such date.
So long as any Corresponding Junior Subordinated Debentures are held by
the Property Trustee, the Issuer Trustees shall not (i) direct the time, method
and place of conducting any proceeding for any remedy available to the
Debenture Trustee, or executing any trust or power conferred on the Property
Trustee with respect to such Corresponding Junior Subordinated Debentures, (ii)
waive any past default that is waivable under the Indenture, (iii) exercise any
right to rescind or annul a declaration that the principal of all the Junior
Subordinated Debentures shall be due and payable or (iv) consent to any
amendment, modification or termination of the Indenture or such Corresponding
Junior Subordinated Debentures, where such consent shall be required, without,
in each case, obtaining the prior approval of the holders of a majority in
aggregate Liquidation Amount of all outstanding Preferred Securities; provided,
however, that where a consent under the Indenture would require the consent of
each holder of Corresponding Junior Subordinated Debentures affected thereby,
no such consent shall be given by the Property Trustee without the prior
consent of each holder of the corresponding Preferred Securities. The Issuer
Trustees shall not revoke any action previously authorized or approved by a
vote of the holders of the Preferred Securities except by subsequent vote of
the holders of the Preferred Securities. The Property Trustee shall notify
each holder of Preferred Securities of any notice of default with respect to
the Corresponding Junior Subordinated Debentures. In addition to obtaining the
foregoing approvals of the holders of the Preferred Securities, prior to taking
any of the foregoing actions, the Issuer Trustees shall obtain an opinion of
counsel experienced in such matters to the effect that such action would not
cause the Issuer to be classified as other than a grantor trust for United
States Federal income tax purposes.
Any required approval of holders of Preferred Securities may be given at a
meeting of holders of Preferred Securities convened for such purpose or
pursuant to written consent. The Property Trustee will cause a notice of any
meeting at which holders of Preferred Securities are entitled to vote, or of
any matter upon which action by written consent of such holders is to be taken,
to be given to each holder of record of Preferred Securities in the manner set
forth in each Trust Agreement.
No vote or consent of the holders of Preferred Securities will be required
for an Issuer to redeem and cancel its Preferred Securities in accordance with
the applicable Trust Agreement.
Notwithstanding that holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by the Corporation, the Issuer Trustees or any
affiliate of the Corporation or any Issuer Trustees, shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
GLOBAL PREFERRED SECURITIES
The Preferred Securities of a series may be issued in whole or in part in
the form of one or more Global Preferred Securities that will be deposited
with, or on behalf of, the Depositary identified in the Prospectus Supplement
relating to such series. Unless otherwise indicated in the applicable
Prospectus Supplement for such series, the Depositary will be The Depositary
Trust Company ("DTC"). Global Preferred Securities may be issued only in fully
registered form and in either temporary or permanent form. Unless and until it
is exchanged in whole or in part for the individual Preferred Securities
represented thereby, a Global Preferred Security may not be transferred except
as a whole by the Depositary for such Global Preferred Security to a nominee of
such Depositary or by a nominee of such Depositary to such Depositary or
another nominee of such Depositary or by the Depositary or any nominee to a
successor Depositary or any nominee of such successor.
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The specific terms of the depositary arrangement with respect to a series
of Preferred Securities will be described in the Prospectus Supplement relating
to such series. The Corporation anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Preferred Security, and the deposit of such
Global Preferred Security with or on behalf of the Depositary, the Depositary
for such Global Preferred Security or its nominee will credit, on its
book-entry registration and transfer system, the respective aggregate
Liquidation Amounts of the individual Preferred Securities represented by such
Global Preferred Securities to the accounts of Participants. Such accounts
shall be designated by the dealers, underwriters or agents with respect to such
Preferred Securities or by the Corporation if such Preferred Securities are
offered and sold directly by the Corporation. Ownership of beneficial
interests in a Global Preferred Security will be limited to Participants or
persons that may hold interests through Participants. Ownership of beneficial
interests in such Global Preferred Security will be shown on, and the transfer
of that ownership will be effected only through, records maintained by the
applicable Depositary or its nominee (with respect to interests of
Participants) and the records of Participants (with respect to interests of
persons who hold through Participants). The laws of some states require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limits and such laws may impair the ability to transfer
beneficial interests in a Global Preferred Security.
So long as the Depositary for a Global Preferred Security, or its nominee,
is the registered owner of such Global Preferred Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder
of the Preferred Securities represented by such Global Preferred Security for
all purposes under the applicable Trust Agreement governing such Preferred
Securities. Except as provided below, owners of beneficial interests in a
Global Preferred Security will not be entitled to have any of the
individual Preferred Securities of the series represented by such Global
Preferred Security registered in their names, will not receive or be entitled
to receive physical delivery of any such Preferred Securities of such series in
definitive form and will not be considered the owners or holders thereof under
the applicable Trust Agreement.
Payments of principal of (and premium, if any) and interest on individual
Preferred Securities represented by a Global Preferred Security registered in
the name of a Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner of the Global Preferred
Security representing such Preferred Securities. None of the Corporation, the
Issuer Trustees, any Paying Agent, or the Securities Registrar for such
Preferred Securities will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial ownership
interests of the Global Preferred Security representing such Preferred
Securities or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
The Corporation expects that the Depositary for a series of Preferred
Securities or its nominee, upon receipt of any payment of Liquidation Amount,
premium or Distributions in respect of a permanent Global Preferred Security
representing any of such Preferred Securities, immediately will credit
Participants' accounts with payments in amounts proportionate to their
respective beneficial interest in the aggregate Liquidation Amount of such
Global Preferred Security for such Preferred Securities as shown on the records
of such Depositary or its nominee. The Corporation also expects that payments
by Participants to owners of beneficial interests in such Global Preferred
Security held through such Participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name."
Such payments will be the responsibility of such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Depositary for a series of Preferred Securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is
not appointed by the Corporation within 90 days, the Corporation will issue
individual Preferred Securities of such series in exchange for the Global
Preferred Security representing such series of Preferred Securities. In
addition, the Corporation may at any time and in its sole discretion, subject
to any limitations described in the Prospectus Supplement relating to such
Preferred Securities, determine not to have any Preferred Securities of such
series represented by one or more Global Preferred Securities and, in such
event, will issue individual Preferred Securities of such series in exchange
for the Global Preferred Security or Securities representing such series of
Preferred Securities. Further, if the Corporation so specifies with respect to
the Preferred Securities of a series, an owner of a beneficial interest in a
Global Preferred Security representing Preferred Securities of such series may,
on terms acceptable to the Corporation, the Property Trustee and the Depositary
for such Global Preferred Security, receive individual Preferred Securities of
such series in exchange for such beneficial interests, subject to any
limitations described in the Prospectus Supplement relating to such Preferred
Securities. In any such instance, an owner of a beneficial interest in a
Global Preferred Security will be entitled to physical delivery of individual
Preferred Securities of the series represented by such Global Preferred
Security equal in principal amount to such beneficial interest and to have such
Preferred Securities registered in its name. Individual Preferred Securities
of such series so issued will be issued in denominations, unless otherwise
specified by the Corporation, of $25 and integral multiples thereof.
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PAYMENT AND PAYING AGENCY
Payments in respect of the Preferred Securities shall be made to the
Depositary, which shall credit the relevant accounts at the Depositary on the
applicable Distribution Dates or, if any Issuer's Preferred Securities are not
held by the Depositary, such payments shall be made by check mailed to the
address of the holder entitled thereto as such address shall appear on the
Register. Unless otherwise specified in the applicable Prospectus Supplement,
the paying agent (the "Paying Agent") shall initially be the Property Trustee
and any co-paying agent chosen by the Property Trustee and acceptable to the
Administrative Trustees and the Corporation. The Paying Agent shall be
permitted to resign as Paying Agent upon 30 days' written notice to the
Property Trustee and the Corporation. In the event that the Property Trustee
shall no longer be the Paying Agent, the Administrative Trustees shall appoint
a successor (which shall be a bank or trust company acceptable to the
Administrative Trustees and the Corporation) to act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
Unless otherwise specified in the applicable Prospectus Supplement, the
Property Trustee will act as registrar and transfer agent for the Preferred
Securities.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of each Issuer, but upon payment of any tax or other
governmental charges that may be imposed in connection with any transfer or
exchange. The Issuers will not be required to register or cause to be
registered the transfer of their Preferred Securities after such Preferred
Securities have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of
an Event of Default, undertakes to perform only such duties as are specifically
set forth in each Trust Agreement and, after such Event of Default, must
exercise the same degree of care and skill as a prudent person would exercise
or use in the conduct of his or her own affairs. Subject to this provision,
the Property Trustee is under no obligation to exercise any of the powers
vested in it by the applicable Trust Agreement at the request of any holder of
Preferred Securities unless it is offered reasonable indemnity against the
costs, expenses and liabilities that might be incurred thereby. If no Event of
Default has occurred and is continuing and the Property Trustee is required to
decide between alternative causes of action, construe ambiguous provisions in
the applicable Trust Agreement or is unsure of the application of any provision
of the applicable Trust Agreement, and the matter is not one on which holders
of Preferred Securities are entitled under such Trust Agreement to vote, then
the Property Trustee shall take such action as is directed by the Corporation
and if not so directed, shall take such action as it deems advisable and in the
best interests of the holders of the Trust Securities and will have no
liability except for its own bad faith, negligence or willful misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Issuers in such a way that no Issuer will be
deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as other than a grantor trust for United
States Federal income tax purposes and so that the Corresponding Junior
Subordinated Debentures will be treated as indebtedness of the Corporation for
United States Federal income tax purposes. In this connection, the Corporation
and the Administrative Trustees are authorized to take any action, not
inconsistent with applicable law, the certificate of trust of each Issuer or
each Trust Agreement, that the Corporation and the Administrative Trustees
determine in their discretion to be necessary or desirable for such purposes,
as long as such action does not materially adversely affect the interests of
the holders of the Related Preferred Securities.
Holders of the Preferred Securities have no preemptive or similar rights.
No Issuer may borrow money or issue debt or mortgage or pledge any of its
assets.
BOOK-ENTRY ISSUANCE
DTC will act as securities depositary for all of the Preferred Securities
and the Junior Subordinated Debentures, unless otherwise referred to in the
Prospectus Supplement relating to an offering of Preferred Securities or Junior
Subordinated Debentures. The Preferred Securities and the Junior Subordinated
Debentures will be issued only as fully-registered securities registered in the
name of Cede & Co. (DTC's nominee). One or more fully-registered global
certificates will be issued for the Preferred Securities of each Issuer and the
Junior Subordinated Debentures, representing in the aggregate the total number
of such Issuer's Preferred Securities
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or aggregate principal balance of Junior Subordinated Debentures, respectively,
and will be deposited with DTC or held by the Property Trustee or Debenture
Trustee, respectively, as custodian for DTC.
DTC is a limited purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Exchange
Act. DTC holds securities that its Participants deposit with DTC. DTC also
facilitates the settlement among Participants of securities transactions, such
as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. "Direct
Participants" include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations. DTC is owned by a
number of its Direct Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks and trust companies that clear through or
maintain custodial relationships with Direct Participants, either directly or
indirectly ("Indirect Participants"). The rules applicable to DTC and its
Participants are on file with the Commission.
Purchases of Preferred Securities or Junior Subordinated Debentures within
the DTC system must be made by or through Direct Participants, which will
receive a credit for the Preferred Securities or Junior Subordinated Debentures
on DTC's records. The ownership interest of each actual purchaser of each
Preferred Security and each Junior Subordinated Debenture ("Beneficial Owner")
is in turn to be recorded on the Direct and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from DTC of their
purchases, but Beneficial Owners are expected to receive written confirmations
providing details of the transactions, as well as periodic statements of their
holdings, from the Direct or Indirect Participants through which the Beneficial
Owners purchased Preferred Securities or Junior Subordinated Debentures.
Transfers of ownership interests in the Preferred Securities or Junior
Subordinated Debentures are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not
receive certificates representing their ownership interests in Preferred
Securities or Junior Subordinated Debentures, except in the event that use of
the book-entry system for the Preferred Securities of such issuer or Junior
Subordinated Debentures is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities or Junior Subordinated Debentures; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Preferred Securities
or Junior Subordinated Debentures are credited, which may or may not be the
Beneficial Owners. The Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners and the voting
rights of Direct Participants, Indirect Participants and Beneficial Owners will
be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices will be sent to Cede & Co. as the registered holder of
the Preferred Securities or Junior Subordinated Debentures. If less than all
of an Issuer's Preferred Securities or the Junior Subordinated Debentures are
being redeemed, DTC's current practice is to determine by lot the amount of the
interest of each Direct Participant to be redeemed.
Although voting with respect to the Preferred Securities or the Junior
Subordinated Debentures is limited to the holders of record of the Preferred
Securities or Junior Subordinated Debentures, in those instances in which a
vote is required, neither DTC nor Cede & Co. will itself consent or vote with
respect to Preferred Securities or Junior Subordinated Debentures. Under its
usual procedures, DTC would mail an omnibus proxy (the "Omnibus Proxy") to the
relevant Trustee as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants
to whose accounts such Preferred Securities or Junior Subordinated Debentures
are credited on the record date (identified in a listing attached to the
Omnibus Proxy).
Distribution payments on the Preferred Securities or the Junior
Subordinated Debentures will be made by the relevant Trustee to DTC. DTC's
practice is to credit Direct Participants' accounts on the relevant payment
date in accordance with their respective holdings shown on DTC's records unless
DTC has reason to believe that it will not receive payments on such payment
date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices and will be the responsibility of
such Participant and not of DTC, the relevant Trustee, the issuer thereof or
the Corporation, subject to any statutory or regulatory requirements as may be
in effect from time to time. Payment of Distributions to DTC is the
responsibility of the relevant Trustee, disbursement of such payments to Direct
Participants is the responsibility of DTC, and disbursements of such payments
to the Beneficial Owners is the responsibility of Direct and Indirect
Participants.
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<PAGE> 28
DTC may discontinue providing its services as securities depositary with
respect to any of the Preferred Securities or the Junior Subordinated
Debentures at any time by giving reasonable notice to the relevant Trustee and
the Corporation. In the event that a successor securities depositary is not
obtained, definitive Preferred Security or Junior Subordinated Debenture
certificates representing such Preferred Securities or Junior Subordinated
Debentures are required to be printed and delivered. The Corporation, at its
option, may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor depositary). After a Debenture Event of Default,
the holders of a majority in liquidation preference of Preferred Securities or
aggregate principal amount of Junior Subordinated Debentures may determine to
discontinue the system of book-entry transfers through DTC. In any such event,
definitive certificates for such Preferred Securities or Junior Subordinated
Debentures will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Issuers and the Corporation believe to
be accurate, but the Issuers and the Corporation assume no responsibility for
the accuracy thereof. Neither the Issuers nor the Corporation has any
responsibility for the performance by DTC or its Participants of their
respective obligations as described herein or under the rules and procedures
governing their respective operations.
DESCRIPTION OF GUARANTEES
A Guarantee will be executed and delivered by the Corporation concurrently
with the issuance by each Issuer of its Preferred Securities for the benefit of
the holders from time to time of such Preferred Securities. [____________]
will act as indenture trustee ("Guarantee Trustee") under each Guarantee for
the purposes of compliance with the Trust Indenture Act and each Guarantee will
be qualified as an indenture under the Trust Indenture Act. This summary of
certain provisions of the Guarantees does not purport to be complete and is
subject to, and qualified in its entirety by reference to, all of the
provisions of each Guarantee Agreement, including the definitions therein of
certain terms, and the Trust Indenture Act. The form of the Guarantee has been
filed as an exhibit to the Registration Statement of which this Prospectus
forms a part. Reference in this summary to Preferred Securities means that
Issuer's Preferred Securities to which a Guarantee relates. The Guarantee
Trustee will hold each Guarantee for the benefit of the holders of the related
Issuer's Preferred Securities.
GENERAL
The Corporation will irrevocably agree to pay in full on a subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined
below) to the holders of the Preferred Securities, as and when due, regardless
of any defense, right of set-off or counterclaim that such Issuer may have or
assert other than the defense of payment. The following payments with respect
to the Preferred Securities, to the extent not paid by or on behalf of the
related Issuer (the "Guarantee Payments"), will be subject to the Guarantee:
(i) any accumulated and unpaid Distributions required to be paid on such
Preferred Securities, to the extent that such Issuer has funds on hand
available therefor at such time, (ii) the Redemption Price with respect to any
Preferred Securities called for redemption to the extent that such Issuer has
funds on hand available therefor at such time, or (iii) upon a voluntary or
involuntary dissolution, winding up or liquidation of such Issuer (unless the
Corresponding Junior Subordinated Debentures are distributed to holders of such
Preferred Securities), the lesser of (a) the Liquidation Distribution and (b)
the amount of assets of such Issuer remaining available for distribution to
holders of Preferred Securities. The Corporation's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Corporation to the holders of the applicable Preferred Securities or by
causing the Issuer to pay such amounts to such holders.
Each Guarantee will be an irrevocable guarantee on a subordinated basis of
the related Issuer's obligations under the Preferred Securities, but will apply
only to the extent that such related Issuer has funds sufficient to make such
payments, and is not a guarantee of collection.
If the Corporation does not make interest payments on the Corresponding
Junior Subordinated Debentures held by the Issuer, the Issuer will not be able
to pay Distributions on the Preferred Securities and will not have funds
legally available therefor. Each Guarantee will rank subordinate and junior in
right of payment to all Senior Debt, Subordinated Debt and Additional Senior
Obligations of the Corporation. See "--Status of the Guarantees." Because the
Corporation is a holding company, the right of the Corporation to participate
in any distribution of assets of any subsidiary upon such subsidiary's
liquidation or reorganization or otherwise, is subject to the prior claims of
creditors of that subsidiary, except to the extent the Corporation may itself
be recognized as a creditor of that subsidiary. Accordingly, the Corporation's
obligations under the Guarantees will be effectively subordinated to all
existing and future liabilities of the Corporation's subsidiaries, and
claimants should look only to the assets of the Corporation for payments
thereunder. Except as otherwise provided in the applicable Prospectus
Supplement, the Guarantees do not limit the incurrence or issuance of other
secured or unsecured debt of the Corporation, including Senior Debt,
Subordinated Debt and Additional Senior Obligations, whether under the
Indenture, any other indenture that the Corporation may enter into in the
future or otherwise.
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<PAGE> 29
The Corporation has, through the applicable Guarantee, the applicable
Trust Agreement, the applicable series of Corresponding Junior Subordinated
Debentures, the Indenture and the applicable Expense Agreement, taken together,
fully, irrevocably and unconditionally guaranteed all of the Issuer's
obligations under the Preferred Securities. No single document standing alone
or operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these
documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Issuer's obligations under the Preferred
Securities. See "Relationship Among the Preferred Securities, the
Corresponding Junior Subordinated Debentures and the Guarantee."
STATUS OF THE GUARANTEES
Each Guarantee will constitute an unsecured obligation of the Corporation
and will rank subordinate and junior in right of payment to all Senior Debt,
Subordinated Debt and, under certain circumstances, Additional Senior
Obligations of the Corporation in the same manner as the Junior Subordinated
Debentures.
Each Guarantee will rank pari passu with all other Guarantees issued by
the Corporation. Each Guarantee will constitute a guarantee of payment and not
of collection (i.e., the guaranteed party may institute a legal proceeding
directly against the Guarantor to enforce its rights under the Guarantee
without first instituting a legal proceeding against any other person or
entity). Each Guarantee will be held for the benefit of the holders of the
Related Preferred Securities. Each Guarantee will not be discharged except by
payment of the Guarantee Payments in full to the extent not paid by the Issuer
or upon distribution to the holders of the Preferred Securities of the
Corresponding Junior Subordinated Debentures. None of the Guarantees places a
limitation on the amount of additional Senior Debt, Subordinated Debt or
Additional Senior Obligations that may be incurred by the Corporation. The
Corporation expects from time to time to incur additional indebtedness
constituting Senior Debt, Subordinated Debt and Additional Senior Obligations.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely
affect the rights of holders of the related Preferred Securities (in which case
no vote will be required), no Guarantee may be amended without the prior
approval of the holders of not less than a majority of the aggregate
Liquidation Amount of such outstanding Preferred Securities. The manner of
obtaining any such approval will be as set forth under "Description of the
Preferred Securities--Voting Rights; Amendment of Each Trust Agreement." All
guarantees and agreements contained in each Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of the Corporation
and shall inure to the benefit of the holders of the related Preferred
Securities then outstanding.
EVENTS OF DEFAULT
An event of default under each Guarantee will occur upon the failure of
the Corporation to perform any of its payment or other obligations thereunder.
The holders of not less than a majority in aggregate Liquidation Amount of the
related Preferred Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee in respect of such Guarantee or to direct the exercise of any trust or
power conferred upon the Guarantee Trustee under such Guarantee.
Any holder of the Preferred Securities may institute a legal proceeding
directly against the Corporation to enforce its rights under such Guarantee
without first instituting a legal proceeding against the Issuer, the Guarantee
Trustee or any other person or entity.
The Corporation, as guarantor, is required to file annually with the
Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Corporation in performance of any Guarantee, undertakes to
perform only such duties as are specifically set forth in each Guarantee and,
after default with respect to any Guarantee, must exercise the same degree of
care and skill as a prudent person would exercise or use in the conduct of his
or her own affairs. Subject to this provision, the Guarantee Trustee is under
no obligation to exercise any of the powers vested in it by any Guarantee at
the request of any holder of any Preferred Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby.
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<PAGE> 30
TERMINATION OF THE GUARANTEES
Each Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the related Preferred Securities, upon
full payment of the amounts payable upon liquidation of the related Issuer or
upon distribution of Corresponding Junior Subordinated Debentures to the
holders of the Related Preferred Securities. Each Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
holder of the Related Preferred Securities must restore payment of any sums
paid under such Preferred Securities or such Guarantee.
GOVERNING LAW
Each Guarantee will be governed by and construed in accordance with the
laws of the State of New York.
THE EXPENSE AGREEMENT
Pursuant to the Expense Agreement entered into by the Corporation under
each Trust Agreement (the "Expense Agreement"), the Corporation will
irrevocably and unconditionally guarantee to each person or entity to whom the
Issuer becomes indebted or liable, the full payment of any costs, expenses or
liabilities of the Issuer, other than obligations of the Issuer to pay to the
holders of any Preferred Securities or other similar interests in the Issuer of
the amounts due such holders pursuant to the terms of the Preferred Securities
or such other similar interests, as the case may be.
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE CORRESPONDING JUNIOR SUBORDINATED DEBENTURES
AND THE GUARANTEES
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Preferred
Securities (to the extent the Issuer has funds available for the payment of
such Distributions) are irrevocably guaranteed by the Corporation as and to the
extent set forth under "Description of Guarantees." Taken together, the
Corporation's obligations under each series of Corresponding Junior
Subordinated Debentures, the Indenture, the related Trust Agreement, the
related Expense Agreement, and the related Guarantee provide, in the aggregate,
a full, irrevocable and unconditional guarantee of payments of distributions
and other amounts due on the related series of Preferred Securities. No single
document standing alone or operating in conjunction with fewer than all of the
other documents constitutes such guarantee. It is only the combined operation
of these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Issuer's obligations under the Preferred
Securities. If and to the extent that the Corporation does not make payments
on any series of Corresponding Junior Subordinated Debentures, such Issuer will
not pay Distributions or other amounts due on its Preferred Securities. The
Guarantees do not cover payment of Distributions when the related Issuer does
not have sufficient funds to pay such Distributions. In such event, the remedy
of a holder of a series of Preferred Securities is to institute a legal
proceeding directly against the Corporation for enforcement of payment of such
Distributions to such holder. The obligations of the Corporation under each
Guarantee are subordinate and junior in right of payment to all Senior Debt,
Subordinated Debt and, under certain circumstances, Additional Senior
Obligations of the Corporation.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on
each series of Corresponding Junior Subordinated Debentures, such payments will
be sufficient to cover Distributions and other payments due on the related
Preferred Securities, primarily because (i) the aggregate principal amount of
each series of Corresponding Junior Subordinated Debentures will be equal to
the sum of the aggregate stated Liquidation Amount of the Related Preferred
Securities and related Common Securities; (ii) the interest rate and interest
and other payment dates on each series of Corresponding Junior Subordinated
Debentures will match the Distribution rate and Distribution and other payment
dates for the related Preferred Securities; (iii) the Corporation shall pay for
all and any costs, expenses and liabilities of such Issuer except the Issuer's
obligations to holders of its Preferred Securities or other similar interests
on the Issuer under such Preferred Securities or such other similar interests,
as the case may be; and (iv) each Trust Agreement further provides that the
Issuer will not engage in any activity that is not consistent with the limited
purposes of such Issuer.
Notwithstanding anything to the contrary in the Indenture, the Corporation
has the right to setoff any payment it is otherwise required to make thereunder
with and to the extent the Corporation has theretofore made, or is concurrently
on the date of such payment making, a payment under the related Guarantee.
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<PAGE> 31
ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES
A holder of any related Preferred Security may institute a legal
proceeding directly against the Corporation to enforce its rights under the
related Guarantee without first instituting a legal proceeding against the
Guarantee Trustee, the related Issuer or any other person or entity.
A default or event of default under any Senior Debt, Subordinated Debt or
Additional Senior Obligations of the Corporation would not constitute a default
or Event of Default. However, in the event of payment defaults under, or
acceleration of, Senior Debt, Subordinated Debt or Additional Senior
Obligations of the Corporation, the subordination provisions of the Indenture
provide that no payments may be made in respect of the Corresponding Junior
Subordinated Debentures until such Senior Debt, Subordinated Debt or Additional
Senior Obligations has been paid in full or any payment default thereunder has
been cured or waived. Failure to make required payments on any series of
Corresponding Junior Subordinated Debentures would constitute an Event of
Default.
LIMITED PURPOSE OF ISSUERS
Each Issuer's Preferred Securities evidence a beneficial interest in such
Issuer, and each Issuer exists for the sole purpose of issuing its Preferred
Securities and Common Securities and investing the proceeds thereof in
Corresponding Junior Subordinated Debentures. A principal difference between
the rights of a holder of a Preferred Security and a holder of a Corresponding
Junior Subordinated Debenture is that a holder of a Corresponding Junior
Subordinated Debenture is entitled to receive from the Corporation the
principal amount of and interest accrued on Corresponding Junior Subordinated
Debentures held, while a holder of Preferred Securities is entitled to receive
Distributions from such Issuer (or from the Corporation under the applicable
Guarantee) if and to the extent such Issuer has funds available for the payment
of such Distributions.
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary termination, winding-up or liquidation
of any Issuer involving the liquidation of the Corresponding Junior
Subordinated Debentures, the holders of the related Preferred Securities will
be entitled to receive, out of assets held by such Issuer, the Liquidation
Distribution in cash. See "Description of Preferred Securities -- Liquidation
Distribution Upon Termination." Upon any voluntary or involuntary liquidation
or bankruptcy of the Corporation, the Property Trustee, as holder of the
Corresponding Junior Subordinated Debentures, would be a subordinated creditor
of the Corporation, subordinated in right of payment to all Senior Debt,
Subordinated Debt and, under certain circumstances, Additional Senior
Obligations as set forth in the Indenture, but entitled to receive payment in
full of principal and interest, before any stockholders of the Corporation
receive payments or distributions. Since the Corporation is the guarantor
under each Guarantee and has agreed to pay for all costs, expenses and
liabilities of each Issuer (other than the Issuer's obligations to the holders
of its Preferred Securities), the positions of a holder of such Preferred
Securities and a holder of such Corresponding Junior Subordinated Debentures
relative to other creditors and to stockholders of the Corporation in the event
of liquidation or bankruptcy of the Corporation are expected to be
substantially the same.
PLAN OF DISTRIBUTION
The Junior Subordinated Debentures or the Preferred Securities may be sold
in a public offering to or through underwriters or dealers designated from time
to time or directly to purchasers. The names of any underwriters or dealers
involved in the sale of the Junior Subordinated Debentures or Preferred
Securities in respect of which this Prospectus is delivered, the amount or
number of Junior Subordinated Debentures and Preferred Securities to be
purchased by any such underwriters and any applicable commissions or discounts
will be set forth in the applicable Prospectus Supplement.
Underwriters may offer and sell Junior Subordinated Debentures or
Preferred Securities at a fixed price or prices, which may be changed, or from
time to time at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. In connection with
the sale of Preferred Securities, underwriters may be deemed to have received
compensation from the Corporation and/or the applicable Issuer in the form of
underwriting discounts or commissions. Underwriters may sell Junior
Subordinated Debentures or Preferred Securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters.
Any underwriting compensation paid by the Corporation and/or the
applicable Issuer to underwriters in connection with the offering of Junior
Subordinated Debentures or Preferred Securities, and any discounts, concessions
or commissions allowed by such underwriters to participating dealers, will be
described in an accompanying Prospectus Supplement. Underwriters and dealers
participating in the distribution of Junior Subordinated Debentures or
Preferred Securities may be deemed to be underwriters, and any discounts and
commissions received by them and any profit realized by them on resale of such
Junior Subordinated Debentures or
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<PAGE> 32
Preferred Securities may be deemed to be underwriting discounts and
commissions, under the Securities Act. Underwriters and dealers may be
entitled, under agreement with the Corporation and the applicable Issuer, to
indemnification against and contribution toward certain civil liabilities,
including liabilities under the Securities Act, and to reimbursement by the
Corporation for certain expenses.
In connection with the offering of the Preferred Securities of any Issuer,
such Issuer may grant to the underwriters an option to purchase additional
Preferred Securities to cover over-allotments, if any, at the initial public
offering price (with an additional underwriting commission), as may be set
forth in the accompanying Prospectus Supplement. If such Issuer grants any
over-allotment option, the terms of such over-allotment option will be set
forth in the Prospectus Supplement for such Preferred Securities.
Underwriters and dealers may engage in transactions with, or perform
services for, the Corporation and/or the applicable issuer and/or any of their
affiliates in the ordinary course of business.
The Junior Subordinated Debentures and the Preferred Securities will be
new issues of securities and will have no established trading market. Any
underwriters to whom Junior Subordinated Debentures or Preferred Securities are
sold for public offering and sale may make a market in such Junior Subordinated
Debentures and Preferred Securities, but such underwriters will not be
obligated to do so and may discontinue any market making at any time without
notice. Such Junior Subordinated Debentures or Preferred Securities may or may
not be listed on a national securities exchange or the Nasdaq National Market.
No assurance can be given as to the liquidity of or the existence of trading
markets for any Junior Subordinated Debentures or Preferred Securities.
VALIDITY OF SECURITIES
Unless otherwise indicated in the applicable Prospectus Supplement,
certain legal matters will be passed upon for the Corporation and the Issuers
by John W. Scheflen, Executive Vice President, General Counsel and Secretary of
the Corporation and for the Issuers by Richards, Layton & Finger, special
Delaware counsel to the Issuers and the Corporation. The validity of the
Guarantees and the Junior Subordinated Debentures will be passed upon for the
Underwriters by Simpson Thacher & Bartlett (a partnership which includes
professional corporations). Simpson Thacher & Bartlett will rely on the
opinion of Mr. Scheflen as to matters of Maryland law and the opinion of
Richards, Layton & Finger as to matters of Delaware law. Mr. Scheflen will
rely on the opinion of Simpson Thacher & Bartlett as to matters of New York
law. Mr. Scheflen owns beneficially 204,749 shares of common stock of the
Corporation, including options exercisable within sixty days under the
Corporation's 1991 Long Term Incentive Plan. Simpson Thacher & Bartlett and
Richards, Layton & Finger regularly perform legal services for the Corporation
and its subsidiaries.
EXPERTS
The consolidated financial statements of MBNA Corporation incorporated by
reference in MBNA Corporation's Annual Report (Form 10-K) for the year ended
December 31, 1995, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon incorporated by reference
therein and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
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<PAGE> 33
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
<TABLE>
<CAPTION>
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<S> <C>
Registration fee under the Securities Act of 1933, as amended . . . . . . . . . . . . . . . $303.03
Blue Sky fees and expenses (including counsel fees) . . . . . . . . . . . . . . . . . . . . *
Fees of rating agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
Trustees' fee and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
Printing and engraving . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
Accounting services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
Legal fees of Registrant's counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
--------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
- ------------
</TABLE>
* To be filed by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Articles of Incorporation and By-Laws provide that
the Registrant shall indemnify and advance expenses to its currently acting and
its former directors to the maximum extent permitted by the Maryland General
Corporation Law, and that the Registrant shall indemnify and advance expenses
to its officers to the same extent as its directors and to such further extent
as is consistent with law. The Maryland General Corporation Law provides that
a corporation may indemnify any director made a party to a proceeding by reason
of service in that capacity unless it is established that: (1) the act or
omission of the director was material to the matter giving rise to the
proceeding and (a) was committed in bad faith or (b) was the result of active
and deliberate dishonesty, or (2) the director actually received an improper
personal benefit in money, property or services, or (3) in the case of any
criminal proceeding, the director had reasonable cause to believe that the act
or omission was unlawful. To the extent that a director has been successful in
defense of any proceeding, the Maryland General Corporation Law provides that
he shall be indemnified against reasonable expenses incurred in connection
therewith. A Maryland corporation may indemnify its officers to the same
extent as its directors and to such further extent as is consistent with law.
Reference is made to the Underwriting Agreement which is filed as
Exhibit 1 to this Registration Statement which provides for indemnification of
directors and officers of the Corporation by the underwriters against certain
liabilities under the Securities Act of 1933, as amended, in certain instances.
Under the Trust Agreement, MBNA will agree to indemnify each of the
Trustees of the Issuer or any predecessor Trustee for the Issuer, and to hold
the Trustee harmless against, any loss, damage, claims, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the Trust Agreements,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers
or duties under the Trust Agreements.
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<PAGE> 34
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
- -------
<S> <C>
1 Form of Underwriting Agreement*
4(a) Certificate of Incorporation of the Corporation, as amended*
4(b) By-laws of the Corporation, as amended*
4(c) Form of Junior Subordinated Indenture between MBNA Corporation and ____________, as Debenture Trustee*
4(d) Certificate of Trust of MBNA Capital I (Certificates of Trust for each other Trust are substantially identical
except for name)*
4(e) Trust Agreement of MBNA Capital I (Trust Agreements for each other Trust are substantially identical except for
name)*
4(f) Form of Amended and Restated Trust Agreement of MBNA Capital I (Trust Agreements for each other Trust are
substantially identical except for name)*
4(g) Form of Preferred Security Certificate for MBNA Capital I (included in Exhibit 4(f)) (Certificates for each
other Trust are substantially identical except for name)*
4(h) Form of Guarantee Agreement for MBNA Capital I (Guarantees for each other Trust are substantially identical
except for name)*
4(i) Form of Junior Subordinated Debt Security (included in Exhibit 4(c))*
5(a) Opinion of John W. Scheflen, Executive Vice President, General Counsel and Secretary of the Corporation, as to
legality of the Junior Subordinated Debentures and the Guarantees to be issued by MBNA*
5(b) Opinion of Richards, Layton & Finger, special Delaware counsel as to legality of the Preferred Securities to be
issued by MBNA Capital I, MBNA Capital II, MBNA Capital III, MBNA Capital IV and MBNA Capital V*
12 Statement re: Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Fixed Charges and
Preferred Stock Dividends*
23(a) Consent of Ernst & Young L.L.P.
23(b) Consent of John W. Scheflen (included in Exhibit 5(a))
23(c) Consent of Richards, Layton & Finger (included in Exhibit 5(b))
24 Powers of Attorney (included in signature page)
25(a) Form T-1 Statement of Eligibility of [_______________] to act as trustee under the Junior Subordinated
Indenture*
25(b) Form T-1 Statement of Eligibility of [_______________] to act as trustee under the Amended and Restated Trust
Agreement of MBNA Capital I*
25(c) Form T-1 Statement of Eligibility of [_______________] to act as trustee under the Amended and Restated Trust
Agreement of MBNA Capital II*
25(d) Form T-1 Statement of Eligibility of [_______________] to act as trustee under the Amended and Restated Trust
Agreement of MBNA Capital III*
25(e) Form T-1 Statement of Eligibility of [_______________] to act as trustee under the Amended and Restated Trust
Agreement of MBNA Capital IV*
25(f) Form T-1 Statement of Eligibility of [_______________] to act as trustee under the Amended and Restated Trust
Agreement of MBNA Capital V*
25(g) Form T-1 Statement of Eligibility of [_______________] to act as trustee under the Guarantee for the benefit of
the holders of Preferred Securities of MBNA Capital I*
25(h) Form T-1 Statement of Eligibility of [_______________] to act as trustee under the Guarantee for the benefit of
the holders of Preferred Securities of MBNA Capital II*
25(i) Form T-1 Statement of Eligibility of [_______________] to act as trustee under the Guarantee for the benefit of
the holders of Preferred Securities of MBNA Capital III*
25(j) Form T-1 Statement of Eligibility of [_______________] to act as trustee under the Guarantee for the benefit of
the holders of Preferred Securities of MBNA Capital IV*
25(k) Form T-1 Statement of Eligibility of [_______________] to act as trustee under the Guarantee for the benefit of
the holders of Preferred Securities of MBNA Capital V*
</TABLE>
- -------------------------
* To be filed by amendment.
II-2
<PAGE> 35
ITEM 17. UNDERTAKINGS.
Each of the undersigned Registrants hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, as amended, each
filing a Registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 that is incorporated by reference in
this Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
each Registrant pursuant to the provisions described under Item 15 above, or
otherwise, each Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by each Registrant of expenses incurred or paid by a director, officer
or controlling person of each Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, each
Registrant will, unless in the opinion of its counsel the matter has been
settled by the controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue. Each of the undersigned Registrants hereby also undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most
recent post-effective amendment thereto) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in this Registration Statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424 (b)
if, in the aggregate, the changes in volume and price represent
no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table
in effective registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
provided, however, that paragraphs (1) (i) and (1) (ii) do not apply if
the information required to be included in post-effective amendment by those
paragraphs is contained in periodic reports filed by a Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(4) to provide to the underwriter at the closing specified in the
underwriting agreement certificates in such denominations and registered in
such names as required by the underwriter to permit prompt delivery to each
purchaser.
(5) That, for the purposes of determining any liability under the
Securities Act of 1933:
(i) The information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
the form of prospectus filed by the Registration pursuant to Rule 424 (b)
(1) or (4) or 487
II-3
<PAGE> 36
(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(ii) Each post-effective amendment that contains a form of
prospectus shall be deemed to be a new Registration Statement relating to
the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE> 37
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Wilmington, State of Delaware, on November 6,
1996.
MBNA CORPORATION
By: /s/ VERNON H.C. WRIGHT
---------------------------------
Name: Vernon H.C. Wright
Title: Executive Vice President and
Chief Corporate Finance Officer
The undersigned Directors and Officers of MBNA Corporation hereby
appoint Vernon H.C. Wright and John W. Scheflen, and each of them, as
attorneys-in-fact for the undersigned, with full power of substitution and
resubstitution, for, and in the name, place and stead of the undersigned, to
sign and file with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, any and all amendments (including post-effective
amendments) and exhibits to this Registration Statement and any and all
applications and other documents to be filed with the Securities and Exchange
Commission pertaining to the registration of the securities covered hereby,
with full power and authority to do and perform each and every act and thing
requisite and necessary or desirable, hereby ratifying and confirming all that
said attorneys-in-fact, or either of them, or their substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on November 6, 1996 by the following
persons in the capacities indicated.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ ALFRED LERNER Chairman and Chief Executive Officer (principal
- --------------------------------------------------- executive officer) and Director
Alfred Lerner
/s/ CHARLES M. CAWLEY President and Director
- ---------------------------------------------------
Charles M. Cawley
/s/ M. SCOT KAUFMAN Executive Vice President, Chief Financial Officer and
- --------------------------------------------------- Chief Accounting Officer and Treasurer (principal
M. Scot Kaufman financial and accounting officer)
/s/ JAMES H. BERICK, ESQ. Director
- ---------------------------------------------------
James H. Berick, Esq.
/s/ BENJAMIN R. CIVILETTI, ESQ. Director
- ---------------------------------------------------
Benjamin R. Civiletti, Esq.
/s/ RANDOLPH D. LERNER, ESQ. Director
- ---------------------------------------------------
Randolph D. Lerner, Esq.
/s/ STUART L. MARKOWITZ, M.D. Director
- ------------------------------------------------
Stuart L. Markowitz, M.D.
/s/ MICHAEL ROSENTHAL, PH.D. DIRECTOR
- ------------------------------------------------
Michael Rosenthal, Ph.D.
</TABLE>
II-5
<PAGE> 38
Pursuant to the requirements of the Securities Act of 1933, MBNA
Capital I certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wilmington, and State of Delaware on November 6,
1996.
MBNA CAPITAL I
By: MBNA Corporation, as
Depositor
By: /s/ M. SCOT KAUFMAN
---------------------------
M. Scot Kaufman
Pursuant to the requirements of the Securities Act of 1933, MBNA
Capital II certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Wilmington, and State of Delaware on November 6,
1996.
MBNA CAPITAL II
By: MBNA Corporation, as
Depositor
By: /s/ M. SCOT KAUFMAN
---------------------------
M. Scot Kaufman
II-6
<PAGE> 39
Pursuant to the requirements of the Securities Act of 1933, MBNA
Capital III certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be,signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Wilmington, and State of Delaware on November 6,
1996.
MBNA CAPITAL III
By: MBNA Corporation, as
Depositor
By: /s/ M. SCOT KAUFMAN
---------------------------
M. Scot Kaufman
Pursuant to the requirements of the Securities Act of 1933, MBNA
Capital IV certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Wilmington, and State of Delaware on November 6,
1996.
MBNA CAPITAL IV
By: MBNA Corporation, as
Depositor
By: /s/ M. SCOT KAUFMAN
---------------------------
M. Scot Kaufman
Pursuant to the requirements of the Securities Act of 1933, MBNA
Capital V certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wilmington, and State of Delaware on November 6,
1996.
MBNA CAPITAL V
By: MBNA Corporation, as Depositor
By: /s/ M. SCOT KAUFMAN
---------------------------
M. Scot Kaufman
II-7
<PAGE> 40
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
- -------
<S> <C>
1 Form of Underwriting Agreement*
4(a) Certificate of Incorporation of the Corporation, as amended*
4(b) By-laws of the Corporation, as amended*
4(c) Form of Junior Subordinated Indenture between MBNA Corporation and ____________, as Debenture Trustee*
4(d) Certificate of Trust of MBNA Capital I (Certificates of Trust for each other Trust are substantially identical
except for name)*
4(e) Trust Agreement of MBNA Capital I (Trust Agreements for each other Trust are substantially identical except for
name)*
4(f) Form of Amended and Restated Trust Agreement of MBNA Capital I (Trust Agreements for each other Trust are
substantially identical except for name)*
4(g) Form of Preferred Security Certificate for MBNA Capital I (included in Exhibit 4(f)) (Certificates for each
other Trust are substantially identical except for name)*
4(h) Form of Guarantee Agreement for MBNA Capital I (Guarantees for each other Trust are substantially identical
except for name)*
4(i) Form of Junior Subordinated Debt Security (included in Exhibit 4(c))*
5(a) Opinion of John W. Scheflen, Executive Vice President, General Counsel and Secretary of the Corporation, as to
legality of the Junior Subordinated Debentures and the Guarantees to be issued by MBNA*
5(b) Opinion of Richards, Layton & Finger, special Delaware counsel as to legality of the Preferred Securities to be
issued by MBNA Capital I, MBNA Capital II, MBNA Capital III, MBNA Capital IV and MBNA Capital V*
12 Statement re: Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Fixed Charges and
Preferred Stock Dividends*
23(a) Consent of Ernst & Young L.L.P.
23(b) Consent of John W. Scheflen (included in Exhibit 5(a))
23(c) Consent of Richards, Layton & Finger (included in Exhibit 5(b))
24 Powers of Attorney (included in signature page)
25(a) Form T-1 Statement of Eligibility of [_______________] to act as trustee under the Junior Subordinated
Indenture*
25(b) Form T-1 Statement of Eligibility of [_______________] to act as trustee under the Amended and Restated Trust
Agreement of MBNA Capital I*
25(c) Form T-1 Statement of Eligibility of [_______________] to act as trustee under the Amended and Restated Trust
Agreement of MBNA Capital II*
25(d) Form T-1 Statement of Eligibility of [_______________] to act as trustee under the Amended and Restated Trust
Agreement of MBNA Capital III*
25(e) Form T-1 Statement of Eligibility of [_______________] to act as trustee under the Amended and Restated Trust
Agreement of MBNA Capital IV*
25(f) Form T-1 Statement of Eligibility of [_______________] to act as trustee under the Amended and Restated Trust
Agreement of MBNA Capital V*
25(g) Form T-1 Statement of Eligibility of [_______________] to act as trustee under the Guarantee for the benefit of
the holders of Preferred Securities of MBNA Capital I*
25(h) Form T-1 Statement of Eligibility of [_______________] to act as trustee under the Guarantee for the benefit of
the holders of Preferred Securities of MBNA Capital II*
25(i) Form T-1 Statement of Eligibility of [_______________] to act as trustee under the Guarantee for the benefit of
the holders of Preferred Securities of MBNA Capital III*
25(j) Form T-1 Statement of Eligibility of [_______________] to act as trustee under the Guarantee for the benefit of
the holders of Preferred Securities of MBNA Capital IV*
25(k) Form T-1 Statement of Eligibility of [_______________] to act as trustee under the Guarantee for the benefit of
the holders of Preferred Securities of MBNA Capital V*
</TABLE>
- -------------------------
* To be filed by amendment.
<PAGE> 1
EXHIBIT 23(a)
Consent of Ernst & Young LLP
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 and related Prospectus of MBNA Corporation,
MBNA Capital I, MBNA Capital II, MBNA Capital III, MBNA Capital IV and MBNA
Capital V for the registration of $1,000,000 of Junior Subordinated Deferrable
Interest Debentures and Preferred Securities and to the incorporation by
reference therein of our report dated January 17, 1996 with respect to the
consolidated financial statements of MBNA Corporation incorporated by reference
in its Annual Report (Form 10-K) for the year ended December 31, 1995, filed
with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Baltimore, Maryland
November 4, 1996
