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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 19, 1997
REGISTRATION NO. 333-26669
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SECURITIES AND EXCHANGE COMMISSION
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WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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FIRST USA, INC. FIRST USA CAPITAL
(EXACT NAME OF REGISTRANT AS TRUST I
SPECIFIED IN ITS CHARTER) (EXACT NAME OF
REGISTRANT AS
SPECIFIED IN ITS
TRUST AGREEMENT)
DELAWARE
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)
DELAWARE
6153 (STATE OR OTHER
(PRIMARY STANDARD INDUSTRIAL JURISDICTION OF
CLASSIFICATION CODE NUMBER) INCORPORATION OR
ORGANIZATION)
75-2291060
(I.R.S. EMPLOYER IDENTIFICATION 6719
NO.) (PRIMARY STANDARD
INDUSTRIAL
CLASSIFICATION CODE
NUMBER)
1601 ELM STREET
DALLAS, TEXAS 75201
(214) 849-3738 75-2681598
(I.R.S. EMPLOYER
IDENTIFICATION NO.)
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
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PHILIP E. TAKEN, ESQ.
GENERAL COUNSEL AND SENIOR VICE PRESIDENT
FIRST USA, INC.
1601 ELM STREET
DALLAS, TEXAS 75201
(214) 849-3738
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENTS FOR SERVICE)
COPIES TO:
RANDALL H. DOUD, ESQ. NORMAN D. SLONAKER,
SKADDEN, ARPS, SLATE, MEAGHER & ESQ.
FLOM LLP BROWN & WOOD LLP
919 THIRD AVENUE ONE WORLD TRADE
NEW YORK, NEW YORK 10022 CENTER
(212) 735-3000 NEW YORK, NEW YORK
10048
--------------- (212) 839-5300
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
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THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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FIRST USA CAPITAL TRUST I
OFFER TO EXCHANGE ITS
9.33% SERIES B CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
9.33% SERIES A CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
FIRST USA, INC.
LOGO
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 9:00 A.M.,
NEW YORK CITY TIME, ON JUNE 19, 1997, UNLESS EXTENDED.
First USA Capital Trust I, a trust formed under the laws of the State of
Delaware (the "Trust"), hereby offers, upon the terms and subject to the
conditions set forth in this Prospectus (as the same may be amended or
supplemented from time to time, the "Prospectus") and in the accompanying
Letter of Transmittal (which together constitute the "Exchange Offer"), to
exchange up to $200,000,000 aggregate liquidation amount of its 9.33% Series B
Capital Securities (the "New Capital Securities") which have been registered
under the Securities Act of 1933, as amended (the "Securities Act"), pursuant
to a Registration Statement (as defined herein) of which this Prospectus
constitutes a part, for a like liquidation amount of its outstanding 9.33%
Series A Capital Securities (the "Old Capital Securities"), of which
$200,000,000 aggregate liquidation amount is outstanding. Pursuant to the
Exchange Offer, First USA, Inc., a Delaware corporation (the "Corporation" and,
together with the Trust, the "Registrants"), is also offering to exchange (i)
its guarantee of payments of cash distributions and payments on liquidation of
the Trust or redemption of the Old Capital Securities (the "Old Guarantee") for
a like guarantee in respect of the New Capital Securities (the "New Guarantee")
and (ii) $200,000,000 of its 9.33% Series B Junior Subordinated Deferrable
Interest Debentures due January 15, 2027 (the "New Junior Subordinated
Debentures") for a like aggregate principal amount of its 9.33% Series A Junior
Subordinated Deferrable Interest Debentures due January 15, 2027 (the "Old
Junior Subordinated Debentures"), which New Guarantee and New Junior
Subordinated Debentures also have been registered under the Securities Act. The
Old Capital Securities, the Old Guarantee and the Old Junior Subordinated
Debentures are collectively referred to herein as the "Old Securities" and the
New Capital Securities, the New Guarantee and the New Junior Subordinated
Debentures are collectively referred to herein as the "New Securities."
Upon the terms and subject to the conditions of an Agreement and Plan of
Merger, dated as of January 19, 1997 and amended as of April 23, 1997 (as
amended, the "Merger Agreement"), between the Corporation and BANC ONE
CORPORATION, an Ohio corporation ("BANC ONE"), the Corporation will be merged
with and into BANC ONE (the "Merger"), with BANC ONE as the surviving
corporation. Following the Merger and upon execution of appropriate documents,
BANC ONE, as successor to the Corporation, will succeed to the Corporation's
rights as the owner of the Common Securities (as defined herein), and to its
obligations as the guarantor under the Old Guarantee and the New Guarantee, the
issuer of the Old Junior Subordinated Debentures and the New Junior
Subordinated Debentures and the sponsor of the Trust. The Merger is expected to
be consummated in the second quarter of calendar 1997. BANC ONE will not
succeed to the Corporation's rights as the owner of the Common Securities or to
its obligations as guarantor under the Old Guarantee and the New Guarantee, the
issuer of the Old Junior Subordinated Debentures and the New Junior
Subordinated Debentures and as the sponsor of the Trust unless and until the
Merger is consummated. See "The Merger."
(Continued on the following page)
This Prospectus and the letter of transmittal (the "Letter of Transmittal")
are first being mailed to all holders of Old Capital Securities on May 20,
1997.
SEE "RISK FACTORS" COMMENCING ON PAGE 21 FOR CERTAIN INFORMATION THAT SHOULD
BE CONSIDERED BY HOLDERS IN DECIDING WHETHER TO TENDER OLD CAPITAL SECURITIES
IN THE EXCHANGE OFFER.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECU-
RITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRE-
SENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is May 20, 1997.
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(Continued from the previous page)
During the period that the Exchange Offer is open and thereafter, BANC ONE
may take various actions with respect to the Capital Securities, including,
without limitation, the solicitation of consents to modify the terms of the
Capital Securities and the purchase of all or part of the Capital Securities
by tender offer, in the open market or by private agreement.
The terms of the New Securities are identical in all material respects to
the respective terms of the Old Securities, except that (i) the New Securities
have been registered under the Securities Act and therefore will not be
subject to certain restrictions on transfer applicable to the Old Securities,
(ii) the New Capital Securities will not contain the $100,000 minimum
liquidation amount transfer restriction, (iii) the New Capital Securities will
not provide for any increase in the distribution rate thereon, (iv) the New
Junior Subordinated Debentures will not contain the $100,000 minimum principal
amount transfer restriction and (v) the New Junior Subordinated Debentures
will not provide for any liquidated damages. See "Description of Capital
Securities" and "Description of Junior Subordinated Debentures." The New
Capital Securities are being offered for exchange in order to satisfy certain
obligations of the Corporation and the Trust under the Registration Rights
Agreement dated as of December 20, 1996 (the "Registration Rights Agreement")
among the Corporation, the Trust and the Initial Purchasers (as defined
herein). In the event that the Exchange Offer is consummated, any Old Capital
Securities which remain outstanding after consummation of the Exchange Offer
and the New Capital Securities issued in the Exchange Offer will vote together
as a single class for purposes of determining whether holders of the requisite
percentage in outstanding liquidation amount thereof have taken certain
actions or exercised certain rights under the Trust Agreement (as defined
herein).
The New Capital Securities and the Old Capital Securities (collectively, the
"Capital Securities") represent beneficial interests in the assets of the
Trust. The Corporation is the owner of all of the beneficial interests
represented by the common securities of the Trust (the "Common Securities").
The Bank of New York is the Property Trustee of the Trust. The Trust exists
for the sole purpose of issuing the Trust Securities and investing the
proceeds thereof in the Junior Subordinated Debentures (as defined herein).
The Junior Subordinated Debentures will mature on January 15, 2027 (the
"Stated Maturity Date"). The Capital Securities have a preference over the
Common Securities under certain circumstances with respect to cash
distributions and amounts payable on liquidation, redemption or otherwise. See
"Description of Capital Securities--Subordination of Common Securities."
As used herein, (i) the "Indenture" means the Indenture, dated as of
December 20, 1996, as amended and supplemented from time to time, between the
Corporation and The Bank of New York, as Debenture Trustee (the "Debenture
Trustee"), (ii) the "Trust Agreement" means the Amended and Restated
Declaration of Trust, dated as of December 20, 1996, relating to the Trust
among the Corporation, as Sponsor, The Bank of New York, as Property Trustee
(the "Property Trustee"), The Bank of New York (Delaware), as Delaware Trustee
(the "Delaware Trustee"), and the administrative trustees (the "Administrative
Trustees") named therein (collectively, with the Property Trustee and Delaware
Trustee, the "Issuer Trustees"). In addition, as the context may require,
unless otherwise expressly stated, (i) the term "Capital Securities" includes
the Old Capital Securities and the New Capital Securities, (ii) the term
"Trust Securities" includes the Capital Securities and the Common Securities,
(iii) the term "Junior Subordinated Debentures" includes the Old Junior
Subordinated Debentures and the New Junior Subordinated Debentures and (iv)
the term "Guarantee" includes the Old Guarantee and the New Guarantee.
Holders of the Capital Securities will be entitled to receive cumulative
cash distributions arising from the payment of interest on the Junior
Subordinated Debentures, accruing from December 20, 1996, and payable semi-
annually in arrears on January 15 and July 15 of each year, commencing July
15, 1997, at the annual rate of 9.33% of the liquidation amount of $1,000 per
Capital Security ("Distributions"). The Corporation will have the right to
defer payments of interest on the Junior Subordinated Debentures at any time
and from time to time for a period not exceeding 10 consecutive semi-annual
periods with respect to each deferral period (each, an "Extension Period"),
provided that no Extension Period may extend beyond the Stated Maturity Date.
Upon the termination of any such Extension Period and the payment of all
amounts then due, the Corporation may elect to begin a new Extension Period,
subject to the requirements set forth herein. If and for so long as interest
payments
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(Continued from the previous page)
on the Junior Subordinated Debentures are so deferred, Distributions on the
Capital Securities will also be deferred and the Corporation will not be
permitted, subject to certain exceptions described herein, to declare or pay
any cash distributions with respect to the Corporation's capital stock (which
includes common and preferred stock) or to make any payment with respect to
debt securities of the Corporation that rank pari passu with or junior to the
Junior Subordinated Debentures. During an Extension Period, interest on the
Junior Subordinated Debentures will continue to accrue (and the amount of
Distributions to which holders of the Capital Securities are entitled will
accumulate) at the rate of 9.33% per annum, compounded semi-annually, and
holders of Capital Securities will be required to accrue interest income for
United States federal income tax purposes prior to the receipt of the cash
payments attributable to such interest income. See "Description of Junior
Subordinated Debentures--Option to Extend Interest Payment Date" and "Certain
Federal Income Tax Considerations--Interest Income and Original Issue
Discount."
Through the Guarantee, the guarantee agreement of the Corporation relating
to the Common Securities (the "Common Guarantee"), the Trust Agreement, the
Junior Subordinated Debentures and the Indenture, taken together, the
Corporation has guaranteed or will guarantee, as the case may be, fully,
irrevocably and unconditionally, all of the Trust's obligations under the
Trust Securities. See "Relationship Among the Capital Securities, the Junior
Subordinated Debentures and the Guarantee--Full and Unconditional Guarantee."
Currently, the Old Guarantee and the Common Guarantee guarantee, and,
following the Exchange Offer, the Common Guarantee, the Old Guarantee and the
New Guarantee will guarantee, payments of Distributions and payments on
liquidation or redemption of the Trust Securities, but in each case only to
the extent that the Trust holds funds on hand legally available therefor and
has failed to make such payments, as described herein. See "Description of
Guarantee." If the Corporation fails to make a required payment on the Junior
Subordinated Debentures, the Trust will not have sufficient funds to make the
related payments, including Distributions, on the Trust Securities. The
Guarantee and the Common Guarantee will not cover any such payment when the
Trust does not have sufficient funds on hand legally available therefor. In
such event, a holder of Capital Securities may institute a legal proceeding
directly against the Corporation to enforce its rights in respect of such
payment. See "Description of Junior Subordinated Debentures--Enforcement of
Certain Rights By Holders of Capital Securities." The obligations of the
Corporation under the Guarantee, the Common Guarantee and the Junior
Subordinated Debentures rank and will continue to rank subordinate and junior
in right of payment to all Senior Indebtedness (as defined herein). The
Corporation currently has no Senior Indebtedness on an unconsolidated basis.
See "Risk Factors--Ranking of Subordinated Obligations Under the Guarantee and
the Junior Subordinated Debentures."
The Trust Securities will be subject to mandatory redemption in a Like
Amount (as defined herein), (i) in whole but not in part, on the Stated
Maturity Date upon repayment of the Junior Subordinated Debentures at a
redemption price equal to the principal amount of, plus accrued but unpaid
interest on, the Junior Subordinated Debentures (the "Maturity Redemption
Price"), (ii) in whole but not in part, at any time prior to January 15, 2007,
contemporaneously with the optional prepayment of the Junior Subordinated
Debentures, upon the occurrence and continuation of a Special Event (as
defined herein) at a redemption price equal to the Special Event Prepayment
Price (as defined below) (the "Special Event Redemption Price"), and (iii) in
whole or in part, on or after January 15, 2007, contemporaneously with the
optional prepayment by the Corporation of the Junior Subordinated Debentures,
at a redemption price equal to the Optional Prepayment Price (as defined
below) (the "Optional Redemption Price"). Any of the Maturity Redemption
Price, the Special Event Redemption Price and the Optional Redemption Price
may be referred to herein as the "Redemption Price." See "Description of
Capital Securities--Redemption."
Subject to the Corporation having received any required regulatory approval,
the Junior Subordinated Debentures will be prepayable prior to the Stated
Maturity Date at the option of the Corporation (i) on or after January 15,
2007, in whole or in part, at a prepayment price (the "Optional Prepayment
Price") equal to 104.6650% of the principal amount thereof on January 15,
2007, declining ratably on each January 15 thereafter to 100% on or after
January 15, 2017, or (ii) prior to January 15, 2007, in whole but not in part,
upon the occurrence and continuation of a Special Event, at a prepayment price
(the "Special Event Prepayment Price")
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(Continued from the previous page)
equal to the greater of (a) 100% of the principal amount thereof or (b) the
sum, as determined by a Quotation Agent (as defined herein) of the present
values of the amount and premium payable with respect to an optional
redemption of the Junior Subordinated Debentures on January 15, 2007, together
with scheduled payments of interest on the Junior Subordinated Debentures from
the prepayment date to and including January 15, 2007, discounted to the
prepayment date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate (as defined herein) plus,
in each case, accrued and unpaid interest thereon to the date of prepayment.
Either of the Optional Prepayment Price or the Special Event Prepayment Price
may be referred to herein as the "Prepayment Price." See "Description of
Junior Subordinated Debentures--Optional Prepayment" and "--Special Event
Prepayment."
The Corporation will have the right at any time to terminate the Trust and
cause a Like Amount of the Junior Subordinated Debentures to be distributed to
the holders of the Trust Securities in liquidation of the Trust, subject to
(i) the Corporation having received an opinion of counsel to the effect that
such distribution will not be a taxable event to holders of Capital Securities
and (ii) any required regulatory approval. Unless the Junior Subordinated
Debentures are distributed to the holders of the Trust Securities, in the
event of a liquidation of the Trust as described herein, after satisfaction of
liabilities to creditors of the Trust as required by applicable law, the
holders of the Trust Securities generally will be entitled to receive a
liquidation amount of $1,000 per Trust Security plus accumulated Distributions
thereon to the date of payment. See "Description of Capital Securities--
Liquidation of the Trust and Distribution of Junior Subordinated Debentures."
The Trust is making the Exchange Offer of the New Capital Securities in
reliance on the position of the staff of the Division of Corporation Finance
of the Securities and Exchange Commission (the "Commission") as set forth in
certain interpretive letters addressed to third parties in other transactions.
However, neither the Corporation nor the Trust has sought its own interpretive
letter and there can be no assurance that the staff of the Division of
Corporation Finance of the Commission would make a similar determination with
respect to the Exchange Offer as it has in such interpretive letters to third
parties. Based on these interpretations by the staff of the Division of
Corporation Finance of the Commission, and subject to the two immediately
following sentences, the Corporation and the Trust believe that New Capital
Securities issued pursuant to this Exchange Offer in exchange for Old Capital
Securities may be offered for resale, resold and otherwise transferred by a
holder thereof (other than a holder who is a broker-dealer) without further
compliance with the registration and prospectus delivery requirements of the
Securities Act, provided that such New Capital Securities are acquired in the
ordinary course of such holder's business and that such holder is not
participating, and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the Securities Act) of
such New Capital Securities. However, any holder of Old Capital Securities who
is an "affiliate" of the Corporation (or, after the Merger, of BANC ONE) or
the Trust or who intends to participate in the Exchange Offer for the purpose
of distributing New Capital Securities, or any broker-dealer who purchased Old
Capital Securities from the Trust to resell pursuant to Rule 144A under the
Securities Act ("Rule 144A") or any other available exemption under the
Securities Act, (a) will not be able to rely on the interpretations of the
staff of the Division of Corporation Finance of the Commission set forth in
the above-mentioned interpretive letters, (b) will not be permitted or
entitled to tender such Old Capital Securities in the Exchange Offer and (c)
must comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any sale or other transfer of such Old
Capital Securities unless such sale is made pursuant to an exemption from such
requirements. In addition, as described below, if any broker-dealer holds Old
Capital Securities acquired for its own account as a result of market-making
or other trading activities and exchanges such Old Capital Securities for New
Capital Securities, then such broker-dealer must deliver a prospectus meeting
the requirements of the Securities Act in connection with any resales of such
New Capital Securities.
Each holder of Old Capital Securities who wishes to exchange Old Capital
Securities for New Capital Securities in the Exchange Offer will be required
to represent that (i) it is not an "affiliate" of the Corporation (or, after
the Merger, of BANC ONE), or the Trust, (ii) any New Capital Securities to be
received by it are being acquired in the ordinary course of its business,
(iii) it has no arrangement or understanding with any person to participate in
a distribution (within the meaning of the Securities Act) of such New Capital
Securities, and (iv) if
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such holder is not a broker-dealer, such holder is not engaged in, and does not
intend to engage in, a distribution (within the meaning of the Securities Act)
of such New Capital Securities. In addition, the Corporation and the Trust may
require such holder, as a condition to such holder's eligibility to participate
in the Exchange Offer, to furnish to the Corporation and the Trust (or an agent
thereof) in writing information as to the number of "beneficial owners" (within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as
amended) on behalf of whom such holder holds the Capital Securities to be
exchanged in the Exchange Offer. Each broker-dealer that receives New Capital
Securities for its own account pursuant to the Exchange Offer must acknowledge
that it acquired the Old Capital Securities for its own account as the result
of market-making activities or other trading activities and must agree that it
will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such New Capital Securities. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act. Based on the position taken by the staff of
the Division of Corporation Finance of the Commission in the interpretive
letters referred to above, the Corporation and the Trust believe that broker-
dealers who acquired Old Capital Securities for their own accounts, as a result
of market-making activities or other trading activities ("Participating Broker-
Dealers"), may fulfill their prospectus delivery requirements with respect to
the New Capital Securities received upon exchange of such Old Capital
Securities (other than Old Capital Securities which represent an unsold
allotment from the original sale of the Old Capital Securities) with a
prospectus meeting the requirements of the Securities Act, which may be the
prospectus prepared for an exchange offer so long as it contains a description
of the plan of distribution with respect to the resale of such New Capital
Securities. Accordingly, this Prospectus, as it may be amended or supplemented
from time to time, may be used by a Participating Broker-Dealer during the
period referred to below in connection with resales of New Capital Securities
received in exchange for Old Capital Securities where such Old Capital
Securities were acquired by such Participating Broker-Dealer for its own
account as a result of market-making or other trading activities. Subject to
certain provisions set forth in the Registration Rights Agreement, the
Corporation and the Trust have agreed that this Prospectus, as it may be
amended or supplemented from time to time, may be used by a Participating
Broker-Dealer in connection with resales of such New Capital Securities for a
period ending 90 days after the Expiration Date (as defined herein) (subject to
extension under certain limited circumstances described below) or, if earlier,
when all such New Capital Securities have been disposed of by such
Participating Broker-Dealer. See "Plan of Distribution." However, a
Participating Broker-Dealer who intends to use this Prospectus in connection
with the resale of New Capital Securities received in exchange for Old Capital
Securities pursuant to the Exchange Offer must notify the Corporation or the
Trust, or cause the Corporation or the Trust to be notified, on or prior to the
Expiration Date, that it is a Participating Broker-Dealer. Such notice may be
given in the space provided for that purpose in the Letter of Transmittal or
may be delivered to the Exchange Agent (as defined herein) at one of the
addresses set forth herein under "The Exchange Offer--Exchange Agent." Any
Participating Broker-Dealer who is an "affiliate" of the Corporation (or, after
the Merger, of BANC ONE) or the Trust may not rely on such interpretive letters
and must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale transaction. See "The Exchange
Offer--Resales of New Capital Securities."
In that regard, each Participating Broker-Dealer who surrenders Old Capital
Securities pursuant to the Exchange Offer will be deemed to have agreed, by
execution of the Letter of Transmittal, that, upon receipt of notice from the
Corporation or the Trust of the occurrence of any event or the discovery of any
fact which makes any statement contained or incorporated by reference in this
Prospectus untrue in any material respect or which causes this Prospectus to
omit to state a material fact necessary in order to make the statements
contained or incorporated by reference herein, in light of the circumstances
under which they were made, not misleading or of the occurrence of certain
other events specified in the Registration Rights Agreement, such Participating
Broker-Dealer will suspend the sale of New Capital Securities (or the New
Guarantee or the New Junior Subordinated Debentures, as applicable) pursuant to
this Prospectus until the Corporation or the Trust has amended or supplemented
this Prospectus to correct such misstatement or omission and has furnished
copies of the amended or supplemented Prospectus to such Participating Broker-
Dealer or the Corporation or the Trust has
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given notice that the sale of the New Capital Securities (or the New Guarantee
or the New Junior Subordinated Debentures, as applicable) may be resumed, as
the case may be. If the Corporation or the Trust gives such notice to suspend
the sale of the New Capital Securities (or the New Guarantee or the New Junior
Subordinated Debentures, as applicable), it shall extend the 90-day period
referred to above during which Participating Broker-Dealers are entitled to
use this Prospectus in connection with the resale of New Capital Securities by
the number of days during the period from and including the date of the giving
of such notice to and including the date when Participating Broker-Dealers
shall have received copies of the amended or supplemented Prospectus necessary
to permit resales of the New Capital Securities or to and including the date
on which the Corporation or the Trust has given notice that the sale of New
Capital Securities (or the New Guarantee or the New Junior Subordinated
Debentures, as applicable) may be resumed, as the case may be.
Prior to the Exchange Offer, there has been only a limited secondary market
and no public market for the Old Capital Securities. The New Capital
Securities will be a new issue of securities for which there currently is no
market. Although the Initial Purchasers have informed the Corporation and the
Trust that they each currently intend to make a market in the New Capital
Securities, they are not obligated to do so, and any such market making may be
discontinued at any time without notice. Accordingly, there can be no
assurance as to the development or liquidity of any market for the New Capital
Securities. The Corporation and the Trust currently do not intend to apply for
listing of the New Capital Securities on any securities exchange or for
quotation through the National Association of Securities Dealers Automated
Quotation System.
Any Old Capital Securities not tendered and accepted in the Exchange Offer
will remain outstanding and will be entitled to all the same rights and will
be subject to the same limitations applicable thereto under the Trust
Agreement (except for those rights which terminate upon consummation of the
Exchange Offer). Following consummation of the Exchange Offer, the holders of
Old Capital Securities will continue to be subject to all of the existing
restrictions upon transfer thereof and neither the Corporation nor the Trust
will have any further obligation to such holders (other than under certain
limited circumstances) to provide for registration under the Securities Act of
the Old Capital Securities held by them. To the extent that Old Capital
Securities are tendered and accepted in the Exchange Offer, a holder's ability
to sell untendered Old Capital Securities could be adversely affected. See
"Risk Factors--Consequences of a Failure to Exchange Old Capital Securities."
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ THIS
PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING
WHETHER TO TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.
Old Capital Securities may be tendered for exchange on or prior to 9:00
a.m., New York City time, on June 19, 1997 (such time on such date being
hereinafter called the "Expiration Date"), unless the Exchange Offer is
extended by the Corporation or the Trust (in which case the term "Expiration
Date" shall mean the latest date and time to which the Exchange Offer is
extended). Tenders of Old Capital Securities may be withdrawn at any time on
or prior to the Expiration Date. The Exchange Offer is not conditioned upon
any minimum Liquidation Amount of Old Capital Securities being tendered for
exchange. However, the Exchange Offer is subject to certain events and
conditions which may be waived by the Corporation or the Trust and to the
terms and provisions of the Registration Rights Agreement. Old Capital
Securities may be tendered in whole or in part having an aggregate Liquidation
Amount of not less than $100,000 (100 Capital Securities) or any integral
multiple of $1,000 Liquidation Amount (one Capital Security) in excess
thereof. The Corporation has agreed to pay all expenses of the Exchange Offer.
See "The Exchange Offer--Fees and Expenses." Holders of the Old Capital
Securities whose Old Capital Securities are accepted for exchange will not
receive Distributions on such Old Capital Securities and will be deemed to
have waived the right to receive any Distributions on such Old Capital
Securities accumulated from and after December 20, 1996. See "The Exchange
Offer--Distributions on Capital Securities."
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(Continued from the previous page)
Neither of the Registrants will receive any cash proceeds from the issuance
of the New Capital Securities offered hereby. No dealer-manager is being used
in connection with this Exchange Offer. See "Use of Proceeds" and "Plan of
Distribution."
----------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THIS EXCHANGE
OFFER AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION OR THE TRUST. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE CORPORATION OR THE TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OR A SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information.................................................... 8
Incorporation of Certain Documents by Reference.......................... 8
Summary.................................................................. 10
Risk Factors............................................................. 21
First USA, Inc........................................................... 26
BANC ONE CORPORATION..................................................... 26
The Merger............................................................... 27
Use of Proceeds.......................................................... 28
Ratios of Earnings to Fixed Charges...................................... 28
First USA Capital Trust I................................................ 29
The Exchange Offer....................................................... 30
Description of Capital Securities........................................ 39
Description of Junior Subordinated Debentures............................ 49
Description of Guarantee................................................. 58
Description of Old Securities............................................ 60
Relationship Among the Capital Securities, the Junior Subordinated
Debentures and the Guarantee............................................ 60
Certain Federal Income Tax Considerations................................ 62
ERISA Considerations..................................................... 65
Plan of Distribution..................................................... 66
Validity of New Capital Securities....................................... 67
Experts.................................................................. 67
</TABLE>
7
<PAGE>
AVAILABLE INFORMATION
The Corporation and BANC ONE are subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, file reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at
the Commission's regional offices located at 7 World Trade Center, 13th Floor,
Suite 1300, New York, New York 10048 and 14th Floor, Suite 1400, Citicorp
Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of such
material may also be obtained by mail from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. Such information may also be accessed electronically by means of the
Commission's home page on the Internet (http://www.sec.gov.). In addition, such
reports, proxy statements and other information concerning the Corporation and
BANC ONE can be inspected at the offices of the New York Stock Exchange, Inc.,
20 Broad Street, New York, New York 10005, on which exchange certain securities
of the Corporation and BANC ONE are listed.
No separate financial statements of the Trust have been included herein. The
Registrants do not consider that such financial statements would be material to
holders of the Capital Securities because the Trust is a newly formed special
purpose entity, has no operating history or independent operations and is not
engaged in and does not propose to engage in any activity other than holding as
trust assets the Junior Subordinated Debentures, issuing the Trust Securities
and incidental activities. See "First USA Capital Trust I," "Description of
Capital Securities," "Description of Junior Subordinated Debentures," and
"Description of Guarantee." In addition, the Corporation does not expect that
the Trust will file reports under the Exchange Act with the Commission.
This Prospectus constitutes a part of a registration statement on Form S-4
(the "Registration Statement") filed by the Registrants with the Commission
under the Securities Act. This Prospectus does not contain all the information
set forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission, and reference is
hereby made to the Registration Statement and to the exhibits relating thereto
for further information with respect to the Registrants and the New Securities.
Any statements contained herein concerning the provisions of any document are
not necessarily complete, and, in each instance, reference is made to the copy
of such document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission. Each such statement is qualified in its entirety by
such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed 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 fiscal year ended
June 30, 1996, as amended by Amendment No. 1 on Form 10-K/A filed April 24,
1997;
2. The Corporation's Quarterly Reports on Form 10-Q for the fiscal
quarters ended September 30, 1996, as amended by Amendment No. 1 on Form
10-Q/A filed April 24, 1997, December 31, 1996, as amended by Amendment No.
1 on Form 10-Q/A filed April 24, 1997, and March 31, 1997; and
3. The Corporation's Current Reports on Form 8-K filed August 21, 1996,
November 21, 1996, December 26, 1996, January 2, 1997, January 28, 1997,
February 12, 1997, April 9, 1997, April 24, 1997 and April 25, 1997.
The following documents filed by BANC ONE with the Commission are
incorporated into this Prospectus by reference:
1. BANC ONE's Annual Report on Form 10-K for the year ended December 31,
1996, as amended by Amendment No. 1 on Form 10-K/A filed March 21, 1997;
8
<PAGE>
2. BANC ONE's Quarterly Report on Form 10-Q for the quarter ended March
31, 1997; and
3. BANC ONE's Current Reports on Form 8-K filed January 28, 1997, January
29, 1997, April 17, 1997 and April 24, 1997.
All documents subsequently filed by the Corporation or BANC ONE pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof
and prior to the termination of the offering of the New Securities offered
hereby shall be deemed to be incorporated by reference into this Prospectus
and to be a part of this Prospectus from the date of filing of such document.
Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
As used herein, the terms "Prospectus" and "herein" mean this Prospectus
including the documents incorporated or deemed to be incorporated herein by
reference, as the same may be amended, supplemented or otherwise modified from
time to time. Statements contained in this Prospectus as to the contents of
any contract or other document referred to herein do not purport to be
complete, and where reference is made to the particular provisions of such
contract or other document, such provisions are qualified in all respects by
reference to all of the provisions of such contract or other document. THE
CORPORATION AND BANC ONE 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 ITS RESPECTIVE FILINGS WHICH ARE 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: INVESTOR RELATIONS, FIRST USA, INC. 1601 ELM STREET,
47TH FLOOR, DALLAS, TEXAS 75201, IN THE CASE OF DOCUMENTS FILED BY THE
CORPORATION, OR TO INVESTOR RELATIONS, OH1-0252, BANC ONE CORPORATION, 100
EAST BROAD STREET, COLUMBUS, OHIO 43271-0251, IN THE CASE OF DOCUMENTS FILED
BY BANC ONE. TELEPHONE REQUESTS MAY BE DIRECTED TO INVESTOR RELATIONS AT (214)
849-3738, IN THE CASE OF DOCUMENTS FILED BY THE CORPORATION, OR TO INVESTOR
RELATIONS AT (614) 248-6889, IN THE CASE OF DOCUMENTS FILED BY BANC ONE. IN
ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE
BY JUNE 12, 1997.
If the Merger is not consummated, the documents filed by BANC ONE and
incorporated herein by reference will not be relevant for purposes of the
Exchange Offer.
9
<PAGE>
SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus.
FIRST USA, INC.
The Corporation, incorporated in 1989, is a Delaware corporation, which,
through its wholly owned subsidiary, First USA Bank, is the fourth largest
issuer of Visa and MasterCard credit cards in the United States. The
Corporation's majority owned subsidiary, First USA Paymentech, Inc. ("First USA
Paymentech"), engages in the credit card industry primarily as a payment
processor of merchant bankcard transactions. The Corporation conducts its
business through its wholly owned subsidiary, First USA Financial, Inc. ("First
USA Financial"), which is the parent company of First USA Bank and the majority
stockholder of First USA Paymentech.
First USA Federal Savings Bank ("First USA FSB"), a wholly owned subsidiary
of First USA Financial, offers additional financial products including
mortgages, auto loans, insurance and installment loans. The Corporation's other
business units, conducted through other subsidiaries of First USA Financial,
provide services that complement First USA Bank's, First USA Paymentech's and
First USA FSB's business operations. The address of the principal executive
office of the Corporation is 1601 Elm Street, 47th Floor, Dallas, Texas 75201
and its telephone number is (214) 849-3738. See "First USA, Inc."
BANC ONE CORPORATION
BANC ONE is a multi-bank holding company incorporated under the laws of the
State of Ohio that, at March 31, 1997, operated approximately 1,500 banking
offices in Arizona, Colorado, Illinois, Indiana, Kentucky, Louisiana, Ohio,
Oklahoma, Texas, Utah, West Virginia and Wisconsin. At March 31, 1997, BANC ONE
had consolidated total assets of $101.6 billion, consolidated total deposits of
$72.2 billion and consolidated total shareholders' equity of $8.4 billion. The
address of the principal executive office of BANC ONE is 100 East Broad Street,
Columbus, Ohio 43271 and its telephone number is (614) 248-5944. See "BANC ONE
CORPORATION."
THE MERGER
On January 19, 1997, the Corporation entered into the Merger Agreement with
BANC ONE, which provides, among other things, for the Merger of the Corporation
with and into BANC ONE, with BANC ONE as the surviving corporation following
the Merger. Pursuant to the Merger Agreement, each share of the common stock,
par value $.01 per share, of the Corporation (the "Common Stock") issued and
outstanding immediately prior to the Merger (subject to certain exceptions)
will be converted into the right to receive 1.1659 shares of the common stock
of BANC ONE (subject to antidilution adjustments as provided in the Merger
Agreement).
On April 23, 1997, in connection with the restatement of financial statements
of the Corporation, BANC ONE and the Corporation agreed to amend the Merger
Agreement to provide, among other things, that BANC ONE would not assert such
restatement (or certain related effects) as a basis for terminating the Merger
Agreement. See "--Recent Developments."
Following the Merger, BANC ONE, as successor to the Corporation, will succeed
to the Corporation's rights as the owner of the Common Securities and to its
obligations as the guarantor under the Guarantee, the issuer of the Junior
Subordinated Debentures and the sponsor of the Trust. BANC ONE will not succeed
to the Corporation's rights as owner of the Common Securities or to its
obligations as the guarantor under the Guarantee, the issuer of the Junior
Subordinated Debentures and the sponsor of the Trust unless and until the
Merger is consummated. See "The Merger."
10
<PAGE>
During the period that the Exchange Offer is open and thereafter, BANC ONE
may take various actions with respect to the Capital Securities, including,
without limitation, the solicitation of consents to modify the terms of the
Capital Securities and the purchase of all or part of the Capital Securities by
tender offer, in the open market or by private agreement.
The Merger Agreement, as originally executed, is set forth as an exhibit to
the Current Report on Form 8-K of First USA filed on January 28, 1997, and the
April 23, 1997 amendment to the Merger Agreement is set forth as an exhibit to
the Current Report on Form 8-K of BANC ONE filed on April 24, 1997, and each is
incorporated herein by reference. See "Description of Securities--Description
of Junior Subordinated Debentures--Merger, Consolidation, Sale of Assets and
Other Transactions."
FIRST USA CAPITAL TRUST I
The Trust is a statutory business trust formed under Delaware law pursuant to
(i) the Trust Agreement executed by the Corporation, as Sponsor, The Bank of
New York, as Property Trustee, and The Bank of New York (Delaware), as Delaware
Trustee, and the three individual Administrative Trustees named therein, and
(ii) the filing of a certificate of trust with the Delaware Secretary of State
on December 11, 1996. Following the Merger, BANC ONE, as successor to the
Corporation, will become the sponsor of the Trust. The Trust's business and
affairs are conducted by the Issuer Trustees: the Property Trustee, the
Delaware Trustee and the three individual Administrative Trustees who are
officers of the Corporation. The Trust exists for the exclusive purposes of (i)
issuing and selling the Trust Securities, (ii) using the proceeds from the sale
of the Trust Securities to acquire the Junior Subordinated Debentures issued by
the Corporation and (iii) engaging in only those other activities necessary,
advisable or incidental thereto (such as registering the transfer of the Trust
Securities). The Junior Subordinated Debentures are and will continue to be the
sole assets of the Trust, and accordingly, payments under the Junior
Subordinated Debentures are and will continue to be the sole revenue of the
Trust. All of the Common Securities are and will continue to be owned by the
Corporation unless and until the Merger is consummated, whereupon BANC ONE will
succeed to the Corporation's rights as owner of the Common Securities.
11
<PAGE>
THE EXCHANGE OFFER
The Exchange Offer.......... Up to $200,000,000 aggregate Liquidation Amount
of New Capital Securities are being offered in
exchange for a like aggregate Liquidation Amount
of Old Capital Securities. Old Capital Securities
may be tendered for exchange in whole or in part
in a Liquidation Amount of $100,000 (100 Capital
Securities) or any integral multiple of $1,000
(one Capital Security) in excess thereof. The
Corporation and the Trust are making the Exchange
Offer in order to satisfy their obligations under
the Registration Rights Agreement relating to the
Old Capital Securities. For a description of the
procedures for tendering Old Capital Securities,
see "The Exchange Offer--Procedures for Tendering
Old Capital Securities."
Expiration Date.............
9:00 a.m., New York City time, on June 19, 1997,
unless the Exchange Offer is extended by the Cor-
poration or the Trust (in which case the Expira-
tion Date will be the latest date and time to
which the Exchange Offer is extended). See "The
Exchange Offer--Terms of the Exchange Offer."
Conditions to the Exchange The Exchange Offer is subject to certain condi-
Offer...................... tions, which may be waived by the Corporation and
the Trust in their sole discretion. The Exchange
Offer is not conditioned upon any minimum Liqui-
dation Amount of Old Capital Securities being
tendered. See "The Exchange Offer--Conditions to
the Exchange Offer."
Offer....................... The Corporation and the Trust reserve the right
in their sole and absolute discretion, subject to
applicable law, at any time and from time to
time, (i) to delay the acceptance of the Old Cap-
ital Securities for exchange, (ii) to terminate
the Exchange Offer if certain specified condi-
tions have not been satisfied, (iii) to extend
the Expiration Date of the Exchange Offer and re-
tain all Old Capital Securities tendered pursuant
to the Exchange Offer, subject, however, to the
right of holders of Old Capital Securities to
withdraw their tendered Old Capital Securities,
or (iv) to waive any condition or otherwise amend
the terms of the Exchange Offer in any respect.
See "The Exchange Offer--Terms of the Exchange
Offer."
Withdrawal Rights........... Tenders of Old Capital Securities may be with-
drawn at any time on or prior to the Expiration
Date by delivering a written notice of such with-
drawal to the Exchange Agent in conformity with
certain procedures set forth below under "The Ex-
change Offer--Withdrawal Rights."
Procedures for Tendering
Old Capital Securities.....
Brokers, dealers, commercial banks, trust compa-
nies and other nominees who hold Old Capital Se-
curities through the Depository Trust Company
("DTC") may effect tenders by book-entry transfer
in accordance with DTC's Automated Tender Offer
Program ("ATOP"). Holders of such Old Capital Se-
curities registered in the name of a broker,
dealer, commercial bank, trust company or other
nominee are urged to contact such person promptly
if they wish to tender Old Capital Securities. In
order for Old Capital Securities to be tendered
by a means other than by book-entry transfer, a
Letter of Transmittal must be completed and
signed in accordance with the
12
<PAGE>
instructions contained therein. The Letter of
Transmittal and any other documents required by
the Letter of Transmittal must be delivered to
The Bank of New York (the "Exchange Agent") by
mail, facsimile, hand delivery or overnight cou-
rier and either such Old Capital Securities must
be delivered to the Exchange Agent or specified
procedures for guaranteed delivery must be com-
plied with. See "The Exchange Offer--Procedures
for Tendering Old Capital Securities."
Letters of Transmittal and certificates repre-
senting Old Capital Securities should not be sent
to the Corporation or the Trust. Such documents
should only be sent to the Exchange Agent.
Resales of New Capital The Corporation and the Trust are making the Ex-
Securities................. change Offer in reliance on the position of the
staff of the Division of Corporation Finance of
the Commission as set forth in certain
interpretive letters addressed to third parties
in other transactions. However, neither the Cor-
poration nor the Trust has sought its own
interpretive letter and there can be no assurance
that the staff of the Division of Corporation Fi-
nance of the Commission would make a similar de-
termination with respect to the Exchange Offer as
it has in such interpretive letters to third par-
ties. Based on these interpretations by the staff
of the Division of Corporation Finance of the
Commission, and subject to the two immediately
following sentences, the Corporation and the
Trust believe that New Capital Securities issued
pursuant to this Exchange Offer in exchange for
Old Capital Securities may be offered for resale,
resold and otherwise transferred by a holder
thereof (other than a holder who is a broker-
dealer) without further compliance with the reg-
istration and prospectus delivery requirements of
the Securities Act, provided that such New Capi-
tal Securities are acquired in the ordinary
course of such holder's business and that such
holder is not participating, and has no arrange-
ment or understanding with any person to partici-
pate, in a distribution (within the meaning of
the Securities Act) of such New Capital Securi-
ties. However, any holder of Old Capital Securi-
ties who is an "affiliate" of the Corporation
(or, after the Merger, of BANC ONE) or the Trust
or who intends to participate in the Exchange Of-
fer for the purpose of distributing the New Capi-
tal Securities, or any broker-dealer who pur-
chased the Old Capital Securities from the Trust
to resell pursuant to Rule 144A or any other
available exemption under the Securities Act, (a)
will not be able to rely on the interpretations
of the staff of the Division of Corporation Fi-
nance of the Commission set forth in the above-
mentioned interpretive letters, (b) will not be
permitted or entitled to tender such Old Capital
Securities in the Exchange Offer and (c) must
comply with the registration and prospectus de-
livery requirements of the Securities Act in con-
nection with any sale or other transfer of such
Old Capital Securities unless such sale is made
pursuant to an exemption from such requirements.
In addition, as described below, if any broker-
dealer holds Old Capital Securities acquired for
its own account as a result of market-making or
other trading activities and exchanges such Old
Capital
13
<PAGE>
Securities for New Capital Securities, then such
broker-dealer must deliver a prospectus meeting
the requirements of the Securities Act in connec-
tion with any resales of such New Capital Securi-
ties.
Each holder of Old Capital Securities who wishes
to exchange Old Capital Securities for New Capi-
tal Securities in the Exchange Offer will be re-
quired to represent that (i) it is not an "affil-
iate" of the Corporation (or, after the Merger,
of BANC ONE) or the Trust, (ii) any New Capital
Securities to be received by it are being ac-
quired in the ordinary course of its business,
(iii) it has no arrangement or understanding with
any person to participate in a distribution
(within the meaning of the Securities Act) of
such New Capital Securities, and (iv) if such
holder is not a broker-dealer, such holder is not
engaged in, and does not intend to engage in, a
distribution (within the meaning of the Securi-
ties Act) of such New Capital Securities. Each
broker-dealer that receives New Capital Securi-
ties for its own account pursuant to the Exchange
Offer must acknowledge that it acquired the Old
Capital Securities for its own account as the re-
sult of market-making activities or other trading
activities and must agree that it will deliver a
prospectus meeting the requirements of the Secu-
rities Act in connection with any resale of such
New Capital Securities. The Letter of Transmittal
states that, by so acknowledging and by deliver-
ing a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter"
within the meaning of the Securities Act. Based
on the position taken by the staff of the Divi-
sion of Corporation Finance of the Commission in
the interpretive letters referred to above, the
Corporation and the Trust believe that Partici-
pating Broker-Dealers who acquired Old Capital
Securities for their own accounts as a result of
market-making activities or other trading activi-
ties may fulfill their prospectus delivery re-
quirements with respect to the New Capital Secu-
rities received upon exchange of such Old Capital
Securities (other than Old Capital Securities
which represent an unsold allotment from the
original sale of the Old Capital Securities) with
a prospectus meeting the requirements of the Se-
curities Act, which may be the prospectus pre-
pared for an exchange offer so long as it con-
tains a description of the plan of distribution
with respect to the resale of such New Capital
Securities. Accordingly, this Prospectus, as it
may be amended or supplemented from time to time,
may be used by a Participating Broker-Dealer in
connection with resales of New Capital Securities
received in exchange for Old Capital Securities
where such Old Capital Securities were acquired
by such Participating Broker-Dealer for its own
account as a result of market-making or other
trading activities. Subject to certain provisions
set forth in the Registration Rights Agreement
and to the limitations described below under "The
Exchange Offer--Resales of New Capital Securi-
ties," the Corporation and the Trust have agreed
that this Prospectus, as it may be amended or
supplemented from time to time, may be used by a
Participating Broker-Dealer in connection with
resales of such New Capital Securities for a pe-
riod ending 90 days after the Expira-
14
<PAGE>
tion Date (subject to extension under certain
limited circumstances) or, if earlier, when all
such New Capital Securities have been disposed of
by such Participating Broker-Dealer. See "Plan of
Distribution." Any Participating Broker-Dealer
who is an "affiliate" of the Corporation (or, af-
ter the Merger, of BANC ONE) or the Trust may not
rely on such interpretive letters and must comply
with the registration and prospectus delivery re-
quirements of the Securities Act in connection
with any resale transaction. See "The Exchange
Offer--Resales of New Capital Securities."
Exchange Agent..............
The Exchange Agent with respect to the Exchange
Offer is The Bank of New York. The addresses, and
telephone and facsimile numbers, of the Exchange
Agent are set forth in "The Exchange Offer--Ex-
change Agent" and in the Letter of Transmittal.
Use of Proceeds............. Neither the Corporation nor the Trust will re-
ceive any cash proceeds from the issuance of the
New Securities offered hereby. See "Use of Pro-
ceeds."
Certain Federal Income Tax
and ERISA Considerations.... Holders of Old Capital Securities should review
the information set forth under "Certain Federal
Income Tax Considerations" and "ERISA Considera-
tions" prior to tendering Old Capital Securities
in the Exchange Offer.
THE NEW CAPITAL SECURITIES
Securities Offered..........
Up to $200,000,000 aggregate liquidation amount
of the Trust's New Capital Securities which have
been registered under the Securities Act (liqui-
dation amount $1,000 per New Capital Security).
The New Capital Securities will be issued and the
Old Capital Securities were issued under the
Trust Agreement. The New Capital Securities and
any Old Capital Securities which remain outstand-
ing after consummation of the Exchange Offer will
vote together as a single class for purposes of
determining whether holders of the requisite per-
centage in outstanding liquidation amount thereof
have taken certain actions or exercised certain
rights under the Trust Agreement. See "Descrip-
tion of Capital Securities--Voting Rights; Amend-
ment of the Trust Agreement." The terms of the
New Capital Securities are identical in all mate-
rial respects to the terms of the Old Capital Se-
curities, except that the New Capital Securities
have been registered under the Securities Act,
will not be subject to the $100,000 minimum liq-
uidation amount transfer restriction and certain
other restrictions on transfer applicable to the
Old Capital Securities and will not provide for
any liquidated damages. See "The Exchange Offer--
Purpose of the Exchange Offer," "Description of
Capital Securities" and "Description of Old Secu-
rities."
Distribution Dates.......... January 15 and July 15 of each year, commencing
July 15, 1997.
15
<PAGE>
Distributions on the Capital Securities will be
Extension Periods........... deferred for the duration of any Extension Period
elected by the Corporation with respect to the
payment of interest on the Junior Subordinated
Debentures. No Extension Period will exceed 10
consecutive semi-annual periods or extend beyond
the Stated Maturity Date. See "Description of Ju-
nior Subordinated Debentures--Option to Extend
Interest Payment Date" and "Certain Federal In-
come Tax Considerations--Interest Income and
Original Issue Discount."
Ranking.....................
The New Capital Securities will rank pari passu,
and payments thereon will be made pro rata, with
the Old Capital Securities and the Common Securi-
ties except as described under "Description of
Capital Securities--Subordination of Common Secu-
rities." The New Junior Subordinated Debentures
will rank pari passu with the Old Junior Subordi-
nated Debentures, and all other junior subordi-
nated debentures to be issued by the Corporation
("Other Debentures"), which will be issued and
sold (if at all) to other trusts to be estab-
lished by the Corporation (if any), in each case
similar to the Trust ("Other Trusts"), and will
constitute unsecured obligations of the Corpora-
tion and will rank subordinate and junior in
right of payment to all Senior Indebtedness to
the extent and in the manner set forth in the In-
denture. See "Description of Junior Subordinated
Debentures." The New Guarantee will rank pari
passu with the Old Guarantee, and all other guar-
antees (if any) to be issued by the Corporation
with respect to capital securities (if any) is-
sued or to be issued by Other Trusts ("Other
Guarantees") and will constitute an unsecured ob-
ligation of the Corporation and will rank subor-
dinate and junior in right of payment to all Se-
nior Indebtedness to the extent and in the manner
set forth in the Guarantee Agreement. See "De-
scription of Guarantee."
Redemption.................. The Trust Securities are subject to mandatory re-
demption in a Like Amount, (i) in whole but not
in part, on the Stated Maturity Date upon repay-
ment of the Junior Subordinated Debentures, (ii)
in whole but not in part, at any time prior to
January 15, 2007, contemporaneously with the op-
tional prepayment of the Junior Subordinated De-
bentures by the Corporation upon the occurrence
and continuation of a Special Event and (iii) in
whole or in part, at any time on or after January
15, 2007 contemporaneously with the optional pre-
payment by the Corporation of the Junior Subordi-
nated Debentures, in each case at the applicable
Redemption Price. See "Description of Capital Se-
curities--Redemption."
Rating...................... The New Capital Securities, if issued before the
Merger, would be expected to be rated BB- by
Standard & Poor's Ratings Services and "ba3" by
Moody's Investors Service, Inc. Following the an-
nouncement of the Merger, Standard & Poor's Rat-
ings Services and Moody's Investors Service, Inc.
placed the ratings of the Corporation on review
for possible upgrade. The ratings of the New Cap-
ital
16
<PAGE>
Securities will be based in part upon the ratings
of their guarantor, and, depending on whether
they are issued before or after the consummation
of the Merger, such ratings may differ from what
is currently expected.
Absence of Market for the
New Capital Securities..... The New Capital Securities will be a new issue of
securities for which there currently is no mar-
ket. Although Merrill Lynch, Pierce, Fenner &
Smith Incorporated and J.P. Morgan Securities
Inc., the initial purchasers of the Old Capital
Securities (the "Initial Purchasers"), have in-
formed the Corporation and the Trust that they
each currently intend to make a market in the New
Capital Securities, they are not obligated to do
so, and any such market making may be discontin-
ued at any time without notice. Accordingly,
there can be no assurance as to the development
or liquidity of any market for the New Capital
Securities. The Trust and the Corporation do not
intend to apply for listing of the New Capital
Securities on any securities exchange or for quo-
tation through the National Association of Secu-
rities Dealers Automated Quotation System
("NASDAQ"). See "Plan of Distribution."
17
<PAGE>
SELECTED FINANCIAL DATA
The following tables present summary selected financial data for each of the
Corporation and BANC ONE on an historical basis.
The summary selected historical financial data for the Corporation for each
of the five years ended June 30, 1996 is based on and derived from, and should
be read in conjunction with, the historical consolidated financial statements
and the related notes thereto of the Corporation, as amended by Amendment No. 1
on Form 10-K/A, filed April 24, 1997, to the Corporation's Annual Report on
Form 10-K for the fiscal year ended June 30, 1996, which are incorporated by
reference herein. The summary selected historical financial data for the
Corporation for the periods ended March 31, 1997 and 1996 is unaudited and
should be read in conjunction with the Corporation's Quarterly Report on Form
10-Q for the quarterly period ended March 31, 1997, which is incorporated by
reference herein.
The summary selected historical financial data for BANC ONE for each of the
five years ended December 31, 1996 is based on and derived from, and should be
read in conjunction with, the historical consolidated financial statements and
the related notes thereto of BANC ONE, which are incorporated by reference
herein. The summary selected historical financial data for BANC ONE for the
periods ended March 31, 1997 and 1996 is unaudited and should be read in
conjunction with BANC ONE's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1997, which is incorporated by reference herein. Results
of the Corporation and BANC ONE for less than a full financial year are not
necessarily indicative of results expected for the entire year. See "Available
Information" and "Incorporation of Certain Documents by Reference."
SELECTED HISTORICAL FINANCIAL DATA OF THE CORPORATION
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
MARCH 31, YEAR ENDED JUNE 30,
--------------------- ------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ---------- ---------- ----------
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Total interest income
and other income....... $1,479,664 $1,234,072 $1,633,742 $1,192,059 $ 815,760 $ 495,947 $ 437,288
Income from continuing
operations............. 167,312 198,961 246,736 178,422 150,934 40,484 18,891
Income from continuing
operations per common
share.................. 1.22 1.49 1.84 1.36 1.23 0.36 0.16
Historical cash
dividends declared per
common share........... 0.165 0.09 0.12 0.06 0.04 0.025 --
Total assets (end of
period)................ 10,225,654 7,703,034 7,708,501 6,379,116 5,573,767 3,380,433 2,493,390
Long-term borrowings
(end of period)........ 1,783,516 1,142,496 1,230,637 1,087,299 918,526 201,000 357,367
Cumulative redeemable
preferred stock (end of
period)................ -- -- -- -- -- -- 35,533
Total stockholders'
equity
(end of period)........ 1,306,907 1,050,131 1,113,880 764,815 574,547 212,898 146,965
</TABLE>
The Corporation adopted Statement of Financial Accounting Standards ("SFAS")
No. 125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities," for all securitization transactions occurring
subsequent to December 31, 1996, including transfers of receivables pursuant to
existing securitization structures that occurred after December 31, 1996.
Because the Corporation restated its financial statements as discussed below,
and therefore has recorded gains on securitization transactions as a result of
the restatement, the adoption of SFAS No. 125 had no material effect on the
Corporation's consolidated financial statements as of and for the three months
ended March 31, 1997. However, by restating its financial statements and
recording gains on securitization transactions in prior periods, the
Corporation's net income for the quarter ended March 31, 1997 was less than it
would otherwise have been due to a reduction in the one-time effect of adopting
SFAS No. 125 of $53 million after-tax, or $0.38 per share. In addition, the
Corporation anticipates that the restatements will reduce net income from what
it would otherwise have been by approximately $176 million, or $1.28 per share,
for the 12 months ending December 31, 1997 because earnings expected to be
recognized in the 12-month period ending December 31, 1997 have been recognized
in the restatement of prior periods' results in accordance with the corrected
accounting policy. This non-cash earnings reduction is limited to calendar 1997
and should not have an adverse effect on subsequent periods.
18
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA OF BANC ONE
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31, YEAR ENDED DECEMBER 31,
---------------------- ------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
----------- ---------- ------------ ----------- ----------- ----------- -----------
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Total interest
income and
other income... $ 2,709,584 $2,487,557 $ 10,272,356 $ 8,970,888 $ 7,777,941 $ 7,547,130 $ 7,740,657
Income from
continuing
operations..... 370,665 345,881 1,426,533 1,277,863 1,005,109 1,172,103 922,227
Income from
continuing
operations per
common share... 0.86 0.77 3.23 2.91 2.20 2.62 2.06
Historical cash
dividends per
common share... 0.38 0.34 1.36 1.24 1.13 0.97 0.81
Total assets
(end of
period)........ 101,587,905 95,708,182 101,848,087 90,453,963 88,922,586 84,834,656 81,304,864
Long-term
borrowings..... 4,905,539 3,010,097 4,189,513 2,720,373 1,866,448 1,805,272 1,396,797
Total
stockholders'
equity......... 8,397,525 8,430,083 8,646,960 8,197,478 7,564,860 7,433,170 6,594,813
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Total interest
income and
other income...
Income from
continuing
operations.....
Income from
continuing
operations per
common share...
Historical cash
dividends per
common share...
Total assets
(end of
period)........
Long-term
borrowings.....
Total
stockholders'
equity.........
</TABLE>
RECENT DEVELOPMENTS
On April 24, 1997, the Corporation announced that it had restated its
financial statements to properly reflect two items. Prior to the restatement,
the Corporation had not recorded gains on securitization transactions
consistent with its belief and common industry assumption that such gains would
not be significant due to the relatively short life of the outstanding balances
and the narrow spread between the account yield and the sum of the cost of
servicing these accounts and investor yield on the securitizations. As a result
of a more detailed analysis of gains on all securitizations of credit card
receivable balances in connection with the preparation for the adoption of SFAS
No. 125, which is effective January 1, 1997, the Corporation restated its
financial statements to recognize gains in prior periods.
In addition, the Corporation, prior to the restatement, had been deferring
the costs to solicit new accounts. These costs were deferred and matched with
the future revenues from these new accounts over a 12-month period. The average
life of these new accounts, including all annual renewals, is expected to be
seven years. During the course of a review of the Corporation's accounting
policies in connection with the Merger, the Corporation learned that, while its
deferred costs were paid to independent third parties, these costs were not
eligible for deferral, and that its accounting policy regarding such
solicitation costs did not conform with the accounting policy of BANC ONE. As a
result, the Corporation restated its financial statements to expense these
costs in the period such costs were incurred.
The restatement of the financial statements did not affect the Corporation's
net cash flows, liquidity or regulatory capital compliance, nor did the
restatement have an effect on the Corporation's fiscal year 1996 and 1995 net
income. The restatement did, however, have an effect on previously reported
quarterly results of the 1996 and 1995 fiscal years and increased fiscal year
1994 earnings. The selected financial data set forth herein have been adjusted
to reflect the restatement of the Corporation's financial statements. See "--
Selected Financial Data."
On April 24, 1997, the Corporation filed with the Commission Amendment No. 1
on Form 10-K/A to its Annual Report on Form 10-K for the fiscal year ended June
30, 1996, Amendment No. 1 on Form 10-Q/A to its
19
<PAGE>
Quarterly Report on Form 10-Q for the period ended September 30, 1996 and
Amendment No. 1 on Form 10-Q/A to its Quarterly Report on Form 10-Q for the
period ended December 31, 1996 to reflect the restatement of its financial
statements. Each such Amendment is incorporated herein by reference. See
"Incorporation of Certain Documents by Reference."
On April 23, 1997, in connection with the restatement of financial statements
of the Corporation, BANC ONE and the Corporation agreed to amend the Merger
Agreement to provide, among other things, that BANC ONE would not assert such
restatement (or certain related effects) as a basis for terminating the Merger
Agreement. See "Incorporation of Certain Documents by Reference" and "The
Merger."
20
<PAGE>
RISK FACTORS
Prospective purchasers of the Capital Securities should carefully review the
information contained elsewhere in this Prospectus, and should particularly
consider the following matters.
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE GUARANTEE AND THE JUNIOR
SUBORDINATED DEBENTURES
The obligations of the Corporation under the Guarantee issued by it for the
benefit of the holders of Capital Securities, as well as under the Junior
Subordinated Debentures, will be unsecured and rank subordinate and junior in
right of payment to all Senior Indebtedness. In addition, in the case of a
bankruptcy or insolvency proceeding, the Corporation's obligations under the
Guarantee will also rank subordinate and junior in right of payment to all
liabilities (other than Other Guarantees) of the Corporation. At March 31,
1997, the Corporation had no outstanding Senior Indebtedness on an
unconsolidated basis. As a holding company, the right of the Corporation to
participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise (and thus the ability
of holders of the Capital Securities to benefit indirectly from such
distribution) is subject to the prior claims of creditors of that subsidiary,
except to the extent that the Corporation may itself be recognized as a
creditor of that subsidiary. At March 31, 1997, the subsidiaries of the
Corporation had an aggregate (excluding liabilities owed to the Corporation)
of approximately $6.8 billion of bank notes, interest-bearing deposits and
other borrowings outstanding. 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. In addition, the bank and thrift subsidiaries of the
Corporation (the "Banks") are subject to certain restrictions imposed by state
and federal law on any loans or extensions of credit to, investments in or
asset purchases from, the Corporation or its non-banking affiliates. Such
transactions by any of the Banks are generally limited in amount as to the
Corporation and as to each of such other affiliates to 10% of such Bank's
capital and surplus and as to the Corporation and all of such other affiliates
to an aggregate of 20% of such Bank's capital and surplus. Such restrictions
also prevent the Corporation and such other affiliates from borrowing from the
Banks unless the loans are secured in specified amounts. In addition, there
are state and federal regulatory limitations on the payment of dividends
directly or indirectly to the Corporation from the Banks. Federal and state
regulatory agencies also have the authority to limit payment of dividends by
the Corporation's bank and thrift subsidiaries based on the capital adequacy
of each such subsidiary and the safety and soundness of each such subsidiary
following payment of the proposed dividend. Upon the consummation of the
Merger, BANC ONE and its subsidiaries (including the Corporation's
subsidiaries) will continue to be subject to such restrictions and limitations
on the extension of credit, borrowing, transaction amounts and payment of
dividends. None of the Indenture, the Guarantee or the Trust Agreement places
any limitation on the amount of indebtedness, including Senior Indebtedness,
that may be incurred by the Corporation. See "Description of Guarantee--Status
of the New Guarantee" and "Description of Junior Subordinated Debentures--
Subordination."
The ability of the Trust to pay amounts due on the Capital Securities is
solely dependent upon the Corporation making payments on the Junior
Subordinated Debentures as and when required.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSIDERATIONS
So long as no Debenture Event of Default (as defined herein) shall have
occurred and be continuing, the Corporation will have the right under the
Indenture to defer payments of interest on the Junior Subordinated Debentures
at any time or from time to time for a period not exceeding 10 consecutive
semi-annual periods with respect to each Extension Period, provided that no
Extension Period may extend beyond the Stated Maturity Date. As a consequence
of any such deferral, semi-annual Distributions on the Capital Securities by
the Trust will be deferred (and the amount of Distributions to which holders
of the Capital Securities are entitled will accumulate additional
Distributions thereon at the rate of 9.33% per annum, compounded semi-
annually) from the relevant payment date for such Distributions during any
such Extension Period.
21
<PAGE>
Prior to the termination of any such Extension Period, the Corporation may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods or to
extend beyond the Stated Maturity Date. Upon the termination of any Extension
Period and the payment of all interest then accrued and unpaid on the Junior
Subordinated Debentures (together with interest thereon at the annual rate of
9.33%, compounded semi-annually, to the extent permitted by applicable law),
the Corporation may elect to begin a new Extension Period, subject to the
above requirements. There is no limitation on the number of times that the
Corporation may elect to begin an Extension Period. See "Description of
Capital Securities--Distributions" and "Description of Junior Subordinated
Debentures--Option to Extend Interest Payment Date."
Should the Corporation exercise its right to defer payments of interest on
the Junior Subordinated Debentures, each holder of Trust Securities will be
required to accrue income (as original issue discount ("OID")) in respect of
the deferred stated interest allocable to its Trust Securities for United
States federal income tax purposes, which will be allocated but not
distributed to holders of Trust Securities. As a result, each such holder of
Capital Securities will recognize income for United States federal income tax
purposes in advance of the receipt of cash and will not receive the cash
related to such income from the Trust if the holder disposes of the Capital
Securities prior to the record date for the payment of Distributions
thereafter. See "Certain Federal Income Tax Considerations--Interest Income
and Original Issue Discount" and "--Sales of Capital Securities."
Should the Corporation elect to exercise its right to defer payments of
interest on the Junior Subordinated Debentures in the future, the market price
of the Capital Securities is likely to be affected. A holder that disposes of
its Capital Securities during an Extension Period, therefore, might not
receive the same return on its investment as a holder that continues to hold
its Capital Securities. In addition, merely as a result of the existence of
the Corporation's right to defer payments of interest on the Junior
Subordinated Debentures, the market price of the Capital Securities may be
more volatile than the market prices of other securities on which OID accrues
and that are not subject to such deferrals.
SPECIAL EVENT REDEMPTION
Upon the occurrence and continuation of a Special Event (as defined herein),
the Corporation will have the right to prepay the Junior Subordinated
Debentures in whole (but not in part) prior to January 15, 2007, at the
Special Event Prepayment Price within 90 days following the occurrence of such
Special Event and therefore cause a mandatory redemption of the Trust
Securities at the Special Event Redemption Price. The exercise of such right
is subject to the Corporation having received any required regulatory
approval. See "Description of Capital Securities--Redemption" and "--
Liquidation of the Trust and Distribution of Junior Subordinated Debentures."
PROPOSED TAX LEGISLATION
On February 6, 1997, as part of President Clinton's Fiscal 1998 Budget
Proposal, the United States Treasury Department proposed legislation that
would, among other things, deny an issuer a deduction for United States
federal income tax purposes for the payment of interest on instruments with
characteristics similar to the Junior Subordinated Debentures. If the proposed
legislation were enacted in its current form, it is not expected to apply to
the Junior Subordinated Debentures since the proposed effective date for this
provision is the date of first committee action. There can be no assurances,
however, that the proposed legislation, if enacted, or similar legislation
enacted after the date hereof would not adversely affect the tax treatment of
the Junior Subordinated Debentures, resulting in a Tax Event (as defined
herein). The occurrence of a Tax Event may result in the redemption by the
Corporation of the Junior Subordinated Debentures held by the Trust for cash,
in which event the holders of the Capital Securities would receive cash in
redemption of their Capital Securities. See "Description of Capital
Securities--Redemption" and "--Description of Junior Subordinated Debentures--
Special Event Prepayment."
22
<PAGE>
POSSIBLE ADVERSE EFFECT ON MARKET PRICES
There can be no assurance as to the market prices for Capital Securities or
Junior Subordinated Debentures distributed to the holders of Capital
Securities if a termination of the Trust were to occur. Accordingly, the
Capital Securities or the Junior Subordinated Debentures may trade at a
discount from the price that the investor paid to purchase the Capital
Securities. Because holders of Capital Securities may receive Junior
Subordinated Debentures in liquidation of the Trust and because Distributions
are otherwise limited to payments on the Junior Subordinated Debentures,
prospective purchasers of Capital Securities are also making an investment
decision with regard to the Junior Subordinated Debentures and should
carefully review all the information regarding the Junior Subordinated
Debentures contained herein. See "Description of Junior Subordinated
Debentures."
RIGHTS UNDER THE GUARANTEE
The Bank of New York will act as Guarantee Trustee and will hold the
Guarantee for the benefit of the holders of the Capital Securities. The Bank
of New York will also act as Property Trustee and as Debenture Trustee under
the Indenture. The Bank of New York (Delaware) will act as Delaware Trustee
under the Trust Agreement. The Old Guarantee guarantees, and the New Guarantee
will guarantee, as the case may be, to the holders of the Capital Securities
the following payments, to the extent not paid by the Trust: (i) any
accumulated and unpaid Distributions required to be paid on the Capital
Securities, to the extent that the Trust has funds on hand legally available
therefor at such time, (ii) the applicable Redemption Price with respect to
any Capital Securities called for redemption, to the extent that the Trust has
funds on hand legally available therefor at such time, and (iii) upon a
voluntary or involuntary termination and liquidation of the Trust (unless the
Junior Subordinated Debentures are distributed to holders of the Capital
Securities), the lesser of (a) the aggregate of the Liquidation Amount and all
accumulated and unpaid Distributions to the date of payment, to the extent
that the Trust has funds on hand legally available therefor at such time and
(b) the amount of assets of the Trust remaining available for distribution to
holders of the Capital Securities upon a termination and liquidation of the
Trust. The holders of a majority in Liquidation Amount of the Capital
Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee or to direct the exercise of any trust power
conferred upon the Guarantee Trustee. Any holder of the Capital Securities may
institute a legal proceeding directly against the Corporation to enforce its
rights under the Guarantee without first instituting a legal proceeding
against the Trust, the Guarantee Trustee or any other person or entity. If the
Corporation defaults on its obligation to pay amounts payable under the Junior
Subordinated Debentures, the Trust will not have sufficient funds for the
payment of Distributions or amounts payable on liquidation of the trust or
redemption of the Capital Securities or otherwise, and, in such event, holders
of the Capital Securities will not be able to rely upon the Guarantee for
payment of such amounts. Instead, in the event a Debenture Event of Default
shall have occurred and be continuing and such event is attributable to the
failure of the Corporation to pay principal of (or premium, if any) or
interest on the Junior Subordinated Debentures on the payment date on which
such payment is due and payable, then a holder of Capital Securities may
institute a legal proceeding directly against the Corporation for enforcement
of payment to such holder of the principal of (or premium, if any) or interest
on such Junior Subordinated Debentures having a principal amount equal to the
Liquidation Amount of the Capital Securities of such holder (a "Direct
Action"). Notwithstanding any payments made to a holder of Capital Securities
by the Corporation in connection with a Direct Action, the Corporation will
remain obligated to pay the principal of (and premium, if any) and interest on
the Junior Subordinated Debentures, and the Corporation will be subrogated to
the rights of the holder of such Capital Securities with respect to payments
on the Capital Securities to the extent of any payments made by the
Corporation to such holder in any Direct Action. Except as described herein,
holders of Capital Securities will not be able to exercise directly any other
remedy available to the holders of the Junior Subordinated Debentures or to
assert directly any other rights in respect of the Junior Subordinated
Debentures. See "Description of Junior Subordinated Debentures--Debenture
Events of Default" and "--Enforcement of Certain Rights by Holders of Capital
Securities" and "Description of Guarantee." The Trust Agreement provides that
each holder of Capital Securities by acceptance thereof agrees to the
provisions of the Indenture.
23
<PAGE>
LIMITED VOTING RIGHTS
Holders of Capital Securities generally have limited voting rights relating
only to the modification of the Capital Securities, the termination or
liquidation of the Trust, and the exercise of the Trust's rights as holder of
Junior Subordinated Debentures. Holders of Capital Securities are not entitled
to vote to appoint, remove or replace the Property Trustee or the Delaware
Trustee, and such voting rights are vested exclusively in the holder of the
Common Securities except upon the occurrence of certain events described
herein. The Property Trustee, the Administrative Trustees and the Corporation
may amend the Trust Agreement without the consent of holders of Capital
Securities to ensure that the Trust will be classified for United States
federal income tax purposes as a grantor trust even if such action adversely
affects the interests of such holders. See "Description of Capital
Securities--Removal of Issuer Trustees" and "--Voting Rights; Amendment of the
Trust Agreement."
CONSEQUENCES OF A FAILURE TO EXCHANGE OLD CAPITAL SECURITIES
The Old Capital Securities have not been registered under the Securities Act
or any state securities laws and therefore may not be offered, sold or
otherwise transferred except in compliance with the registration requirements
of the Securities Act and any other applicable securities laws, or pursuant to
an exemption therefrom or in a transaction not subject thereto, and in each
case in compliance with certain other conditions and restrictions. Old Capital
Securities which remain outstanding after consummation of the Exchange Offer
will continue to bear a legend reflecting such restrictions on transfer. In
addition, upon consummation of the Exchange Offer, holders of Old Capital
Securities which remain outstanding will not be entitled to any rights to have
such Old Capital Securities registered under the Securities Act or to any
similar rights under the Registration Rights Agreement (subject to certain
limited exceptions). The Registrants do not intend to register under the
Securities Act any Old Capital Securities which remain outstanding after
consummation of the Exchange Offer (subject to such limited exceptions, if
applicable). To the extent that Old Capital Securities are tendered and
accepted in the Exchange Offer, a holder's ability to sell untendered Old
Capital Securities could be adversely affected.
The New Capital Securities and any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer will vote together as a
single class for purposes of determining whether holders of the requisite
percentage in outstanding Liquidation Amount thereof have taken certain
actions or exercised certain rights under the Trust Agreement. See
"Description of Capital Securities--Voting Rights; Amendment of the Trust
Agreement."
The Old Capital Securities provide, among other things, that, if a
registration statement relating to the Exchange Offer had not been filed by
May 19, 1997 and declared effective by June 18, 1997, the Distribution rate
borne by the Old Capital Securities commencing on June 19, 1997 would increase
by 0.25% per annum until the Exchange Offer is consummated. Upon consummation
of the Exchange Offer, holders of Old Capital Securities will not be entitled
to any increase in the Distribution rate thereon or any further registration
rights under the Registration Rights Agreement, except under limited
circumstances. See "Description of Old Securities."
ABSENCE OF PUBLIC MARKET
The Old Capital Securities were issued to, and the Corporation believes such
securities are currently owned by, a relatively small number of beneficial
owners. The Old Capital Securities have not been registered under the
Securities Act and will be subject to restrictions on transferability if they
are not exchanged for the New Capital Securities. Although the New Capital
Securities may be resold or otherwise transferred by the holders (who are not
affiliates of the Corporation (or, after the Merger, of BANC ONE) or the
Trust) without compliance with the registration requirements under the
Securities Act, they will constitute a new issue of securities with no
established trading market. Old Capital Securities may be transferred by the
holders thereof only in blocks having a Liquidation Amount of not less than
$100,000 (100 Old Capital Securities). New Capital Securities may be
transferred by the holders thereof in blocks having a Liquidation Amount of
$1,000 (one New Capital Security) or integral multiples thereof. The
Corporation and the Trust have been advised by the Initial Purchasers that the
24
<PAGE>
Initial Purchasers presently intend to make a market in the New Capital
Securities. However, the Initial Purchasers are not obligated to do so and any
market-making activity with respect to the New Capital Securities may be
discontinued at any time without notice. In addition, such market-making
activity will be subject to the limits imposed by the Securities Act and the
Exchange Act and may be limited during the Exchange Offer. Accordingly, no
assurance can be given that an active public or other market will develop for
the Capital Securities or as to the liquidity of or the trading market for the
Capital Securities. If an active public market does not develop, the market
price and liquidity of the Capital Securities may be adversely affected.
If a public trading market develops for the Capital Securities, future
trading prices will depend on many factors, including, among other things,
prevailing interest rates, the Corporation's results and the market for
similar securities. Depending on prevailing interest rates, the market for
similar securities and other factors, including the financial condition of the
Corporation, the Capital Securities may trade at a discount.
Notwithstanding the registration of the New Capital Securities in the
Exchange Offer, holders who are "affiliates" (as defined under Rule 405 of the
Securities Act) of the Registrants may publicly offer for sale or resell the
New Capital Securities only in compliance with the provisions of Rule 144
under the Securities Act.
Each broker-dealer that receives New Capital Securities for its own account
in exchange for Old Capital Securities, where such Old Capital Securities were
acquired by such broker-dealer as a result of market-making activities or
other trading activities, must acknowledge that it will deliver a prospectus
in connection with any resale of such New Capital Securities. See "Plan of
Distribution."
EXCHANGE OFFER PROCEDURES
Subject to the conditions set forth under "The Exchange Offer--Conditions to
the Exchange Offer," delivery of New Capital Securities in exchange for Old
Capital Securities tendered and accepted for exchange pursuant to the Exchange
Offer will be made only after timely receipt by the Exchange Agent of (i)
certificates for Old Capital Securities or a book-entry confirmation of a
book-entry transfer of Old Capital Securities into the Exchange Agent's
account at DTC, including an Agent's Message (as defined under "The Exchange
Offer--Acceptance for Exchange and Issuance of New Capital Securities") if the
tendering holder does not deliver a Letter of Transmittal, (ii) a completed
and signed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message in lieu of the Letter of Transmittal, and (iii) any other documents
required by the Letter of Transmittal. Therefore, holders of Old Capital
Securities desiring to tender such Old Capital Securities in exchange for New
Capital Securities should allow sufficient time to ensure timely delivery.
Neither the Company nor the Trust is under a duty to give notification of
defects or irregularities with respect to the tenders of Old Capital
Securities for exchange.
25
<PAGE>
FIRST USA, INC.
The Corporation, incorporated in 1989, is a Delaware corporation, which,
through its principal operating subsidiaries First USA Bank and First USA
Paymentech, is one of the nation's largest providers of Visa and MasterCard
services. First USA Bank is an issuer of Visa and MasterCard credit cards with
approximately 16.3 million credit cards issued and $22.9 billion in managed
credit card loans outstanding at March 31, 1997. First USA Bank's
profitability is affected by loan growth, interest rate spread, cardmember
usage, credit quality and marketing expenses. First USA Paymentech is the
third largest payment processor of credit and debit card transactions in the
United States, according to published industry sources, with approximately
$30.3 billion in sales volume processed and approximately 940.6 million total
transactions for the nine months ended March 31, 1997.
In March 1996, First USA Paymentech completed an initial public offering of
its common stock. Following the initial public offering, the Corporation owned
approximately 77% of the outstanding shares of common stock of First USA
Paymentech. In December, 1996 and January, 1997, the Corporation sold an
aggregate of approximately 4.4 million shares of First USA Paymentech common
stock and First USA Paymentech sold an aggregate of approximately 3.1 million
newly issued shares of First USA Paymentech common stock in a public offering.
As a result, the Corporation owns, and after the Merger BANC ONE will own,
approximately 57% of First USA Paymentech.
First USA FSB, a wholly owned subsidiary of First USA Financial, offers
additional financial products including mortgages, auto loans, insurance and
installment loans. The Corporation's other business units, conducted through
other subsidiaries of First USA Financial, provide services that complement
First USA Bank's, First USA Paymentech's and First USA FSB's business
operations. The address of the principal executive office of the Corporation
is 1601 Elm Street, 47th Floor, Dallas, Texas 75201 and its telephone number
is (214) 849-3738.
BANC ONE CORPORATION
GENERAL
BANC ONE is a multi-bank holding company which provides a full range of
consumer and commercial banking and related financial services. At March 31,
1997, BANC ONE operated approximately 1,500 banking offices in Arizona,
Colorado, Illinois, Indiana, Kentucky, Louisiana, Ohio, Oklahoma, Texas, Utah,
West Virginia and Wisconsin. At March 31, 1997, BANC ONE had consolidated
total assets of $101.6 billion, consolidated total deposits of $72.2 billion
and consolidated total shareholders' equity of $8.4 billion (8.3% of its
consolidated total assets). At December 31, 1996, BANC ONE ranked 10th among
the nation's publicly owned bank holding companies in terms of consolidated
average total assets and 9th in terms of consolidated average common equity.
Based on the S.N.L. Branch Migration Data Base dated June 30, 1996 (as
updated for mergers and acquisitions through February 28, 1997), at February
28, 1997 BANC ONE's bank subsidiaries (the "affiliate banks") held the largest
statewide share of total bank deposits in Arizona and Kentucky, the second
largest share of such deposits in Indiana, Ohio and West Virginia, and the
third largest share of such deposits in Colorado, Wisconsin and Texas. BANC
ONE has smaller statewide market shares in the other states in which BANC ONE
operates banks. At March 31, 1997, except for Bank One, Texas, N.A., no single
BANC ONE affiliate bank accounted for more than 20% of BANC ONE's consolidated
total assets. BANC ONE also owns nonbank subsidiaries that engage in credit
card and merchant processing, consumer and education finance, mortgage
banking, insurance, venture capital, investment and merchant banking, trust,
brokerage, investment management, equipment leasing and data processing.
Since its formation in 1968, BANC ONE has acquired over 100 banking
institutions and the number of banking offices of its affiliate banks has
increased from 24 to approximately 1,500. BANC ONE continues to explore
opportunities to acquire banks and nonbank companies permitted by the Bank
Holding Company Act. Discussions are continually being carried on relating to
such acquisitions. It is not presently known whether, or on what terms, such
discussions will result in further acquisitions. Such acquisitions may be
pending, from time to time, during the period that the Exchange Offer is open.
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BANC ONE is a legal entity separate and distinct from its affiliate banks
and its nonbank subsidiaries (collectively, the "BANC ONE Affiliates").
Accordingly, the right of BANC ONE, and thus the right of BANC ONE's creditors
and shareholders, to participate in any distribution of the assets or earnings
of any BANC ONE Affiliate is necessarily subject to the prior claims of
creditors of the BANC ONE Affiliate except to the extent that claims of BANC
ONE in its capacity as a creditor be recognized. The principal sources of BANC
ONE's revenues are dividends and fees from the BANC ONE affiliates.
Various federal and state statutory provisions limit the amount of dividends
BANC ONE's affiliate banks can pay to BANC ONE without regulatory approval.
The approval of the appropriate bank regulator is required for any dividend by
a national bank or by a state-chartered bank that is a member of the Federal
Reserve System (a "state member bank") if the total of all dividends declared
by the bank in any calendar year would exceed the total of its net profits, as
defined by regulatory agencies, for such year combined with its retained net
profits for the preceding two years. In addition, a national bank or a state
member bank may not pay a dividend in an amount greater than its net profits
then on hand. At December 31, 1996, $0.6 billion was available for payment of
dividends to BANC ONE without approval by the applicable regulatory authority.
BANC ONE is incorporated in Ohio and has functioned as a multi-bank holding
company since 1968. Its executive offices are located at 100 East Broad
Street, Columbus, Ohio 43271, and its telephone number is (614) 248-5944.
THE MERGER
On January 19, 1997, the Corporation entered into the Merger Agreement with
BANC ONE, which provides, among other things, for the Merger of the
Corporation with and into BANC ONE, with BANC ONE as the surviving corporation
following the Merger. Pursuant to the Merger Agreement, each share of the
Common Stock issued and outstanding immediately prior to the Merger (subject
to certain exceptions) will be converted into the right to receive 1.1659
shares of the common stock of BANC ONE (subject to antidilution adjustments as
provided in the Merger Agreement).
On April 23, 1997, in connection with the restatement of financial
statements of the Corporation, BANC ONE and the Corporation agreed to amend
the Merger Agreement to provide, among other things, that BANC ONE would not
assert such restatement (or certain related effects) as a basis for
terminating the Merger Agreement. See "Summary--Recent Developments."
Consummation of the Merger is subject to certain conditions, including the
approval of the Merger Agreement by the affirmative vote of the holders of a
majority of the shares of BANC ONE common stock outstanding and entitled to
vote thereon and the affirmative vote of the holders of a majority of voting
power of the shares of the Common Stock and the Convertible Preferred Stock
outstanding and entitled to vote thereon, voting as a single class, the
effectiveness of a registration statement on Form S-4 relating to the shares
of BANC ONE common stock to be issued in the Merger, the receipt of required
regulatory approvals for the Merger, receipt by the Corporation and BANC ONE
of opinions of counsel as to the tax-free nature of the Merger for federal
income tax purposes (except for cash in lieu of fractional shares), receipt by
BANC ONE and the Corporation of a letter from Coopers & Lybrand L.L.P. that
the Merger will qualify for "pooling of interests" accounting treatment, the
listing, subject to notice of issuance, on the New York Stock Exchange of the
BANC ONE common stock to be issued in the Merger, and certain other customary
closing conditions. BANC ONE's Registration Statement on Form S-4 relating to
the shares of BANC ONE common stock to be issued in the Merger was declared
effective by the Commission on May 14, 1997. BANC ONE has received all
required regulatory approvals for the Merger.
The Merger Agreement may be terminated at any time prior to the consummation
of the Merger (i) by mutual consent of BANC ONE and the Corporation by a
majority vote of the members of each company's entire Board of Directors, (ii)
by either BANC ONE or the Corporation if any governmental entity which must
grant a regulatory approval has denied approval of the Merger and such denial
has become final and non-appealable or
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<PAGE>
any governmental entity of competent jurisdiction has issued a final, non-
appealable order enjoining or otherwise prohibiting consummation of the
transactions contemplated by the Merger Agreement, (iii) except if the party
seeking termination is in breach of the Merger Agreement, by either BANC ONE or
the Corporation, (a) if the Merger has not been consummated by December 31,
1997 or (b) if there is a material breach by the other party of any
representation, warranty, covenant or agreement contained in the Merger
Agreement which is not timely cured, or (iv) by either BANC ONE or the
Corporation if the requisite shareholder approvals of either party have not
been obtained.
Following the Merger and upon execution of appropriate documents, BANC ONE,
as successor to the Corporation, will succeed to the Corporation's rights as
the owner of the Common Securities, or to its obligations as the guarantor
under the Guarantee, the issuer of the Junior Subordinated Debentures and the
sponsor of the Trust. BANC ONE will not succeed to the Corporation's rights as
the owner of the Common Securities or to its obligations as guarantor under the
Guarantee, the issuer of the Junior Subordinated Debentures and the sponsor of
the Trust unless and until the Merger is consummated.
During the period that the Exchange Offer is open and thereafter, BANC ONE
may take various actions with respect to the Capital Securities, including,
without limitation, the solicitation of consents to modify the terms of the
Capital Securities and the purchase of all or part of the Capital Securities by
tender offer, in the open market or by private agreement.
The Merger Agreement, as originally executed, is set forth as an exhibit to
the Current Report on Form 8-K of First USA filed on January 28, 1997, and the
April 23, 1997 amendment to the Merger Agreement is set forth as an exhibit to
the Current Report on Form 8-K of BANC ONE filed on April 24, 1997, and each is
incorporated herein by reference. See "Description of Junior Subordinated
Debentures--Merger, Consolidation, Sale of Assets and Other Transactions."
USE OF PROCEEDS
Neither of the Registrants will receive any cash proceeds from the issuance
of the New Capital Securities pursuant to the Exchange Offer. In consideration
for issuing the New Capital Securities in exchange for the Old Capital
Securities, the Trust will receive Old Capital Securities in like Liquidation
Amount. The Old Capital Securities surrendered in exchange for the New Capital
Securities will be retired and cancelled. The proceeds to the Trust (without
giving effect to expenses of the offering payable by the Corporation) from the
offering of the Old Capital Securities were $200,000,000. All of the proceeds
from the sale of Old Capital Securities and the Common Securities were invested
by the Trust in the Old Junior Subordinated Debentures. The Corporation used
the net proceeds from the sale of the Old Junior Subordinated Debentures for
general corporate purposes, including capital contributions to operating
subsidiaries.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges of the
Corporation for the respective periods indicated.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED JUNE 30,
MARCH 31, ------------------------------
1997 1996 1995 1994(1) 1993 1992
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Including interest-bearing
deposits......................... 1.79x 1.98x 1.91x 2.17x 1.44x 1.15x
Excluding interest-bearing
deposits......................... 1.99 2.37 2.77 5.08 2.14 1.36
</TABLE>
- --------
(1) Income before income taxes and extraordinary item for the year ended June
30, 1994 has been restated to reflect the recognition of gains on the
securitization of credit card loans and to expense certain costs to solicit
new accounts in the period they were incurred. The effect of such
restatements was an increase to income before income taxes and
extraordinary item of $73.0 million.
For purposes of computing the ratio of earnings to fixed charges, earnings
represent net income before extraordinary items plus applicable income taxes
and fixed charges. Fixed charges include gross interest expense (including or
excluding deposits, as the case may be) and the proportion deemed
representative of the interest factor of rent expense.
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FIRST USA CAPITAL TRUST I
The Trust is a statutory business trust formed under Delaware law pursuant to
(i) the Trust Agreement executed by the Corporation, as Sponsor, The Bank of
New York, as Property Trustee, The Bank of New York (Delaware), as Delaware
Trustee, and the three individual Administrative Trustees named therein, and
(ii) the filing of a certificate of trust with the Delaware Secretary of State
on December 11, 1996. Following the Merger, BANC ONE will succeed the
Corporation as sponsor of the Trust. The Trust exists for the exclusive
purposes of (i) issuing and selling the Trust Securities, (ii) using the
proceeds from the sale of Trust Securities to acquire the Junior Subordinated
Debentures and (iii) engaging in only those other activities necessary,
advisable or incidental thereto (such as registering the transfer of the Trust
Securities). The Junior Subordinated Debentures are the sole assets of the
Trust and, accordingly, payments under the Junior Subordinated Debentures are
and will continue to be the sole revenues of the Trust. All of the Common
Securities are and will continue to be owned by the Corporation unless and
until the Merger is consummated, whereupon BANC ONE will succeed to the
Corporation's rights as owner of the Common Securities. The Common Securities
rank pari passu, and payments will be made thereon pro rata, with the Capital
Securities, except that upon the occurrence and continuance of an event of
default under the Trust Agreement resulting from a Debenture Event of Default,
the rights of the Corporation as holder of the Common Securities to payments in
respect of Distributions and payments upon liquidation, redemption or otherwise
will be subordinated to the rights of the holders of the Capital Securities.
See "Description of Capital Securities--Subordination of Common Securities."
The Corporation has acquired Common Securities in a liquidation amount equal to
3% of the total capital of the Trust. The Trust has a term of 31 years, but may
terminate earlier as provided in the Trust Agreement. The Trust's business and
affairs are conducted by its trustees, each appointed by the Corporation as
holder of the Common Securities. The trustees for the Trust are The Bank of New
York, as the Property Trustee, The Bank of New York (Delaware), as the Delaware
Trustee, and three individual Administrative Trustees who are officers of the
Corporation. The Bank of New York, as Property Trustee, currently acts as sole
indenture trustee under the Trust Agreement. The Bank of New York also acts as
indenture trustee under the Guarantee and the Indenture. See "Description of
Guarantee" and "Description of Junior Subordinated Debentures." The holder of
the Common Securities or, if an Event of Default under the Trust Agreement has
occurred and is continuing, the holders of a majority in liquidation amount of
the Capital Securities is entitled to appoint, remove or replace the Property
Trustee and/or the Delaware Trustee. In no event do the holders of the Capital
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 Trust Agreement. The Corporation, as issuer of the
Junior Subordinated Debentures, has and will continue to pay all fees,
expenses, debts and obligations (other than the Trust's obligations with
respect to payments of principal, interest and premium (if any) on the Trust
Securities) related to the Trust and the offering of the Capital Securities and
has and will continue to pay, directly or indirectly, all ongoing costs,
expenses and liabilities of the Trust. The principal executive office of the
Trust is c/o First USA, Inc., 1601 Elm Street, 47th Floor, Dallas, Texas 75201.
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<PAGE>
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
In connection with the sale of the Old Capital Securities, the Corporation
and the Trust entered into the Registration Rights Agreement with the Initial
Purchasers, pursuant to which the Corporation and the Trust agreed to file and
to use their reasonable efforts to cause to become effective with the
Commission a registration statement with respect to the exchange of the Old
Capital Securities for New Capital Securities. A copy of the Registration
Rights Agreement has been filed as an Exhibit to the Registration Statement of
which this Prospectus is a part.
The Exchange Offer is being made to satisfy the contractual obligations of
the Corporation and the Trust under the Registration Rights Agreement. The
form and terms of the New Capital Securities are the same as the form and
terms of the Old Capital Securities except that the New Capital Securities
have been registered under the Securities Act and will not be subject to the
$100,000 minimum liquidation amount transfer restriction and certain other
restrictions on transfer applicable to the Old Capital Securities and will not
provide for any increase in the Distribution rate thereon. In that regard, the
Old Capital Securities provide, among other things, that, if a registration
statement relating to the Exchange Offer had not been filed by May 19, 1997
and declared effective by June 18, 1997, the Distribution rate borne by the
Old Capital Securities commencing on June 19, 1997 would increase by 0.25% per
annum until the Exchange Offer is consummated. Upon consummation of the
Exchange Offer, holders of Old Capital Securities will not be entitled to any
increase in the Distribution rate thereon or any further registration rights
under the Registration Rights Agreement, except under limited circumstances.
See "Risk Factors--Consequences of a Failure to Exchange Old Capital
Securities" and "Description of Old Securities."
The Exchange Offer is not being made to, nor will the Trust accept tenders
for exchange from, holders of Old Capital Securities in any jurisdiction in
which the Exchange Offer or the acceptance thereof would not be in compliance
with the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect to the
Exchange Offer means any person in whose name the Old Capital Securities are
registered on the books of the Trust or any other person who has obtained a
properly completed bond power from the registered holder, or any person whose
Old Capital Securities are held of record by DTC who desires to deliver such
Old Capital Securities by book-entry transfer at DTC.
Pursuant to the Exchange Offer, the Corporation will exchange, promptly
after the Expiration Date (as defined herein), the Old Guarantee for the New
Guarantee and the Old Junior Subordinated Debentures, in an amount
corresponding to the Old Capital Securities accepted for exchange, for a like
aggregate principal amount of the New Junior Subordinated Debentures. The New
Guarantee and New Junior Subordinated Debentures have been registered under
the Securities Act.
TERMS OF THE EXCHANGE OFFER
The Trust hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and in the accompanying Letter of Transmittal, to
exchange up to $200,000,000 aggregate liquidation amount of New Capital
Securities for a like aggregate liquidation amount of Old Capital Securities
properly tendered on or prior to the Expiration Date and not properly
withdrawn in accordance with the procedures described below. The Trust will
issue, promptly after the Expiration Date, an aggregate liquidation amount of
up to $200,000,000 of New Capital Securities in exchange for a like principal
amount of outstanding Old Capital Securities tendered and accepted in
connection with the Exchange Offer. Holders may tender their Old Capital
Securities in whole or in part in a liquidation amount of not less than
$100,000 (100 Capital Securities) or any integral multiple of $1,000
liquidation amount (one Capital Security) in excess thereof.
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<PAGE>
The Exchange Offer is not conditioned upon any minimum liquidation amount of
Old Capital Securities being tendered. As of the date of this Prospectus,
$200,000,000 aggregate liquidation amount of the Old Capital Securities is
outstanding.
Holders of Old Capital Securities do not have any appraisal or dissenters'
rights in connection with the Exchange Offer. Old Capital Securities which are
not tendered for or are tendered but not accepted in connection with the
Exchange Offer will remain outstanding and be entitled to the benefits of the
Trust Agreement, but will not be entitled to any further registration rights
under the Registration Rights Agreement, except under limited circumstances.
See "Risk Factors--Consequences of a Failure to Exchange Old Capital
Securities" and "Description of Old Securities."
If any tendered Old Capital Securities are not accepted for exchange because
of an invalid tender, the occurrence of certain other events set forth herein
or otherwise, certificates for any such unaccepted Old Capital Securities will
be returned, without expense, to the tendering holder thereof promptly after
the Expiration Date.
Holders who tender Old Capital Securities in connection with the Exchange
Offer will not be required to pay brokerage commissions or fees or, subject to
the instructions in the Letter of Transmittal, transfer taxes with respect to
the exchange of Old Capital Securities in connection with the Exchange Offer.
The Corporation, as issuer of the Junior Subordinated Debentures, will pay all
charges and expenses, other than certain applicable taxes described below, in
connection with the Exchange Offer. See "--Fees and Expenses."
NEITHER THE CORPORATION, THE BOARD OF DIRECTORS OF THE CORPORATION NOR ANY
ISSUER TRUSTEE OF THE TRUST MAKES ANY RECOMMENDATION TO HOLDERS OF OLD CAPITAL
SECURITIES AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY
PORTION OF THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN
ADDITION, NO ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS
OF OLD CAPITAL SECURITIES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER
PURSUANT TO THE EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF OLD CAPITAL
SECURITIES TO TENDER BASED ON SUCH HOLDERS OWN FINANCIAL POSITION AND
REQUIREMENTS.
The term "Expiration Date" means 9:00 a.m., New York City time, on June 19,
1997 unless the Exchange Offer is extended by the Corporation or the Trust (in
which case the term "Expiration Date" shall mean the latest date and time to
which the Exchange Offer is extended).
The Corporation and the Trust expressly reserve the right in their sole and
absolute discretion, subject to applicable law, at any time and from time to
time, (i) to delay the acceptance of the Old Capital Securities for exchange,
(ii) to terminate the Exchange Offer (whether or not any Old Capital
Securities have theretofore been accepted for exchange) if the Trust
determines, in its sole and absolute discretion, that any of the events or
conditions referred to under "--Conditions to the Exchange Offer" have
occurred or exist or have not been satisfied, (iii) to extend the Expiration
Date of the Exchange Offer and retain all Old Capital Securities tendered
pursuant to the Exchange Offer, subject, however, to the right of holders of
Old Capital Securities to withdraw their tendered Old Capital Securities as
described under "--Withdrawal Rights," and (iv) to waive any condition or
otherwise amend the terms of the Exchange Offer in any respect. If the
Exchange Offer is amended in a manner determined by the Corporation and the
Trust to constitute a material change, or if the Corporation and the Trust
waive a material condition of the Exchange Offer, the Corporation and the
Trust will promptly disclose such amendment by means of a prospectus
supplement that will be distributed to the holders of the Old Capital
Securities, and the Corporation and the Trust will extend the Exchange Offer
to the extent required by Rule 14e-1 under the Exchange Act.
Any such delay in acceptance, extension, termination or amendment will be
followed promptly by oral or written notice thereof to the Exchange Agent and
by making a public announcement thereof, and such announcement in the case of
an extension will be made no later than 9:00 a.m., New York City time, on the
next
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<PAGE>
business day after the previously scheduled Expiration Date. Without limiting
the manner in which the Corporation and the Trust may choose to make any
public announcement and subject to applicable law, the Corporation and the
Trust shall have no obligation to publish, advertise or otherwise communicate
any such public announcement other than by issuing a release to an appropriate
news agency.
ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF NEW CAPITAL SECURITIES
Upon the terms and subject to the conditions of the Exchange Offer, the
Trust will exchange, and will issue to the Exchange Agent, New Capital
Securities for Old Capital Securities validly tendered and not withdrawn
promptly after the Expiration Date.
In all cases, delivery of New Capital Securities in exchange for Old Capital
Securities tendered and accepted for exchange pursuant to the Exchange Offer
will be made only after timely receipt by the Exchange Agent of (i) Old
Capital Securities or a book-entry confirmation of a book-entry transfer of
Old Capital Securities into the Exchange Agent's account at the DTC, (ii) the
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees, or, in the case of a book-
entry transfer, an Agent's Message (as defined below) and (iii) any other
documents required by the Letter of Transmittal.
The term "Agent's Message" means a message, transmitted by a book-entry
transfer facility to, and received by, the Exchange Agent and forming a part
of a book-entry confirmation, which states that such book-entry transfer
facility has received an express acknowledgment from the participant in such
book-entry transfer facility tendering the Old Capital Securities that such
participant has received and agrees to be bound by the terms of the Letter of
Transmittal and that the purchaser may enforce such agreement against the
participant.
The term "book-entry confirmation" means a timely confirmation of a book-
entry transfer of Old Capital Securities into the Exchange Agent's account at
DTC.
Subject to the terms and conditions of the Exchange Offer, the Trust will be
deemed to have accepted for exchange, and thereby exchanged, Old Capital
Securities validly tendered and not withdrawn as, if and when the Trust gives
oral or written notice to the Exchange Agent of the Trust's acceptance of such
Old Capital Securities for exchange pursuant to the Exchange Offer. The
Exchange Agent will act as agent for the Trust for the purpose of receiving
tenders of Old Capital Securities, Letters of Transmittal and related
documents, and as agent for tendering holders for the purpose of receiving Old
Capital Securities, Letters of Transmittal and related documents and
transmitting New Capital Securities that will not be held in global form by
DTC or a nominee of DTC to validly tendering holders. Such exchange will be
made promptly after the Expiration Date. If for any reason whatsoever,
acceptance for exchange or the exchange of any Old Capital Securities tendered
pursuant to the Exchange Offer is delayed (whether before or after the Trust's
acceptance for exchange of Old Capital Securities) or the Trust extends the
Exchange Offer or is unable to accept for exchange or exchange Old Capital
Securities tendered pursuant to the Exchange Offer, then, without prejudice to
the Trust's rights set forth herein, the Exchange Agent may, nevertheless, on
behalf of the Trust and subject to Rule 14e-1(c) under the Exchange Act,
retain tendered Old Capital Securities and such Old Capital Securities may not
be withdrawn except to the extent tendering holders are entitled to withdrawal
rights as described under "--Withdrawal Rights."
Pursuant to an Agent's Message or the Letter of Transmittal, a holder of Old
Capital Securities will represent, warrant and agree that it has full power
and authority to tender, exchange, sell, assign and transfer Old Capital
Securities, that the Trust will acquire good, marketable and unencumbered
title to the tendered Old Capital Securities, free and clear of all liens,
restrictions, charges and encumbrances, and the Old Capital Securities
tendered for exchange are not subject to any adverse claims or proxies. The
holder also will warrant and agree that it will, upon request, execute and
deliver any additional documents deemed by the Trust or the Exchange Agent to
be necessary or desirable to complete the exchange, sale, assignment, and
transfer of the Old Capital Securities tendered pursuant to the Exchange
Offer. Tendering holders of Old Capital Securities that use ATOP will, by so
doing, acknowledge that they are bound by the terms of the Letter of
Transmittal.
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PROCEDURES FOR TENDERING OLD CAPITAL SECURITIES
Valid Tender. Except as set forth below, in order for Old Capital Securities
to be validly tendered pursuant to the Exchange Offer, a properly completed
and duly executed Letter of Transmittal (or facsimile thereof), with any
required signature guarantees, and any other required documents, must be
received by the Exchange Agent at one of its addresses set forth under "--
Exchange Agent," and either (i) tendered Old Capital Securities must be
received by the Exchange Agent, or (ii) such Old Capital Securities must be
tendered pursuant to the procedures for book-entry transfer set forth below
and a book-entry confirmation must be received by the Exchange Agent, in each
case on or prior to the Expiration Date, or (iii) the guaranteed delivery
procedures set forth below must be complied with.
If less than all of the Old Capital Securities are tendered, a tendering
holder should fill in the amount of Old Capital Securities being tendered in
the appropriate box on the Letter of Transmittal. The entire amount of Old
Capital Securities delivered to the Exchange Agent will be deemed to have been
tendered unless otherwise indicated.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN RECEIPT
REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
The Exchange Agent and DTC have confirmed that any Participant (as defined
in "Description of Exchange Securities--Description of Capital Securities--
Form, Denomination, Book-Entry Procedures and Transfer") in DTC's book-entry
transfer facility system may utilize DTC's ATOP procedures to tender Old
Capital Securities. The Exchange Agent will establish an account with respect
to the Old Capital Securities at DTC for purposes of the Exchange Offer within
two business days after the date of this Prospectus. Any Participant may make
a book-entry delivery of the Old Capital Securities by causing DTC to transfer
such Old Capital Securities into the Exchange Agent's account at DTC in
accordance with DTC's ATOP procedures for transfer. However, although delivery
of Old Capital Securities may be effected through book-entry transfer into the
Exchange Agent's account at DTC, an Agent's Message or a completed and signed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees and any other documents required by the Letter of Transmittal, must
in any case be delivered to and received by the Exchange Agent at one of its
addresses set forth under "--Exchange Agent" on or prior to the Expiration
Date, or the guaranteed delivery procedure set forth below must be complied
with.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
Signature Guarantees. Certificates for the Old Capital Securities need not
be endorsed and signature guarantees on the Letter of Transmittal are
unnecessary unless (a) a certificate for the Old Capital Securities is
registered in a name other than that of the person surrendering the
certificate or (b) such holder completes the box entitled "Special Issuance
Instructions" or "Special Delivery Instructions" in the Letter of Transmittal.
In the case of (a) or (b) above, such certificates for Old Capital Securities
must be duly endorsed or accompanied by a properly executed bond power, with
the endorsement or signature on the bond power and on the Letter of
Transmittal guaranteed by a firm or other entity identified in Rule 17Ad-15
under the Exchange Act as an "eligible guarantor institution," including (as
such terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal
securities broker or dealer or government securities broker or dealer; (iii) a
credit union; (iv) a national securities exchange, registered securities
association or clearing agency; or (v) a savings association that is a
participant in a Securities Transfer Association (an "Eligible Institution"),
unless surrendered on behalf of such Eligible Institution. See Instruction 1
to the Letter of Transmittal.
Guaranteed Delivery. If a holder desires to tender Old Capital Securities
pursuant to the Exchange Offer and the certificates for such Old Capital
Securities are not immediately available or time will not permit all
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<PAGE>
required documents to reach the Exchange Agent on or prior to the Expiration
Date, or the procedure for book-entry transfer cannot be completed on a timely
basis, such Old Capital Securities may nevertheless be tendered, provided that
all of the following guaranteed delivery procedures are complied with:
(a) such tenders are made by or through an Eligible Institution;
(b) a properly completed and duly executed notice of guaranteed delivery
("Notice of Guaranteed Delivery"), substantially in the form accompanying
the Letter of Transmittal, is received by the Exchange Agent, as provided
below, on or prior to the Expiration Date; and
(c) the certificates (or a book-entry confirmation) representing all
tendered Old Capital Securities, in proper form for transfer, together with
a properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message) and any other documents required
by the Letter of Transmittal, are received by the Exchange Agent within
three New York Stock Exchange trading days after the date of execution of
such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or transmitted
by facsimile or mail to the Exchange Agent and must include a guarantee by an
Eligible Institution in the form set forth in such notice.
Notwithstanding any other provision hereof, the delivery of New Capital
Securities in exchange for Old Capital Securities tendered and accepted for
exchange pursuant to the Exchange Offer will in all cases be made only after
timely receipt by the Exchange Agent of Old Capital Securities, or of a book-
entry confirmation with respect to such Old Capital Securities, and a properly
completed and duly executed Letter of Transmittal (or facsimile thereof),
together with any required signature guarantees (or, in the case of a book-
entry transfer, an Agent's Message) and any other documents required by the
Letter of Transmittal. Accordingly, the delivery of New Capital Securities
might not be made to all tendering holders at the same time and will depend
upon when Old Capital Securities, book-entry confirmations with respect to Old
Capital Securities and other required documents are received by the Exchange
Agent.
The Trust's acceptance for exchange of Old Capital Securities tendered
pursuant to any of the procedures described above will constitute a binding
agreement between the tendering holder and the Trust upon the terms and
subject to the conditions of the Exchange Offer.
Determination of Validity. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange
of any tendered Old Capital Securities will be determined by the Corporation
and the Trust, in their sole discretion, whose determination shall be final
and binding on all parties. The Corporation and the Trust reserve the absolute
right, in their sole and absolute discretion, to reject any and all tenders
determined by them not to be in proper form or the acceptance of which, or
exchange for, may, in the opinion of counsel to the Corporation and the Trust,
be unlawful. The Corporation and the Trust also reserve the absolute right,
subject to applicable law, to waive any of the conditions of the Exchange
Offer as set forth under "--Conditions to the Exchange Offer" or any condition
or irregularity in any tender of Old Capital Securities of any particular
holder whether or not similar conditions or irregularities are waived in the
case of other holders.
The interpretation by the Corporation and the Trust of the terms and
conditions of the Exchange Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding. No tender of Old Capital
Securities will be deemed to have been validly made until all irregularities
with respect to such tender have been cured or waived. Neither the
Corporation, the Trust, any affiliates or assigns of the Corporation or the
Trust, the Exchange Agent nor any other person shall be under any duty to give
any notification of any irregularities in tenders or incur any liability for
failure to give any such notification.
If any Letter of Transmittal, endorsement, bond power, power of attorney, or
any other document required by the Letter of Transmittal is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and unless waived by the
Corporation and the Trust, proper evidence satisfactory to the Corporation and
the Trust, in their sole discretion, of such person's authority to so act must
be submitted.
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A beneficial owner of Old Capital Securities that are held by or registered
in the name of a broker, dealer, commercial bank, trust company or other
nominee or custodian is urged to contact such entity promptly if such
beneficial holder wishes to participate in the Exchange Offer.
RESALES OF NEW CAPITAL SECURITIES
The Trust is making the Exchange Offer for the New Capital Securities in
reliance on the position of the staff of the Division of Corporation Finance
of the Commission as set forth in certain interpretive letters addressed to
third parties in other transactions. However, neither the Corporation nor the
Trust sought its own interpretive letter and there can be no assurance that
the staff of the Division of Corporation Finance of the Commission would make
a similar determination with respect to the Exchange Offer as it has in such
interpretive letters to third parties. Based on these interpretations by the
staff of the Division of Corporation Finance of the Commission, and subject to
the two immediately following sentences, the Corporation and the Trust believe
that New Capital Securities issued pursuant to this Exchange Offer in exchange
for Old Capital Securities may be offered for resale, resold and otherwise
transferred by a holder thereof (other than a holder who is a broker-dealer)
without further compliance with the registration and prospectus delivery
requirements of the Securities Act, provided that such New Capital Securities
are acquired in the ordinary course of such holder's business and that such
holder is not participating, and has no arrangement or understanding with any
person to participate, in a distribution (within the meaning of the Securities
Act) of such New Capital Securities. However, any holder of Old Capital
Securities who is an "affiliate" of the Corporation (or, after the Merger, of
BANC ONE) or the Trust or who intends to participate in the Exchange Offer for
the purpose of distributing New Capital Securities, or any broker-dealer who
purchased Old Capital Securities from the Trust to resell pursuant to Rule
144A or any other available exemption under the Securities Act, (a) will not
be able to rely on the interpretations of the staff of the Division of
Corporation Finance of the Commission set forth in the above-mentioned
interpretive letters, (b) will not be permitted or entitled to tender such Old
Capital Securities in the Exchange Offer and (c) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any sale or other transfer of such Old Capital Securities
unless such sale is made pursuant to an exemption from such requirements. In
addition, as described below, if any broker-dealer holds Old Capital
Securities acquired for its own account as a result of market-making or other
trading activities and exchanges such Old Capital Securities for New Capital
Securities, then such broker-dealer must deliver a prospectus meeting the
requirements of the Securities Act in connection with any resales of such New
Capital Securities.
Each holder of Old Capital Securities who wishes to exchange Old Capital
Securities for New Capital Securities in the Exchange Offer will be required
to represent that (i) it is not an "affiliate" of the Corporation (or, after
the Merger, of BANC ONE) or the Trust, (ii) any New Capital Securities to be
received by it are being acquired in the ordinary course of its business,
(iii) it has no arrangement or understanding with any person to participate in
a distribution (within the meaning of the Securities Act) of such New Capital
Securities, and (iv) if such holder is not a broker-dealer, such holder is not
engaged in, and does not intend to engage in, a distribution (within the
meaning of the Securities Act) of such New Capital Securities. In addition,
the Corporation and the Trust may require such holder, as a condition to such
holder's eligibility to participate in the Exchange Offer, to furnish to the
Corporation and the Trust (or an agent thereof) in writing information as to
the number of "beneficial owners" (within the meaning of Rule 13d-3 under the
Exchange Act) on behalf of whom such holder holds the Capital Securities to be
exchanged in the Exchange Offer. Each broker-dealer that receives New Capital
Securities for its own account pursuant to the Exchange Offer must acknowledge
that it acquired the Old Capital Securities for its own account as the result
of market-making activities or other trading activities and must agree that it
will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such New Capital Securities. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act. Based on the position taken by the staff of
the Division of Corporation Finance of the Commission in the interpretive
letters referred to above, the Corporation and the Trust believe that
Participating Broker-Dealers who acquired Old Capital Securities for their own
accounts as a result of market-making activities or other trading activities
may fulfill their prospectus delivery requirements with respect to the New
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Capital Securities received upon exchange of such Old Capital Securities
(other than Old Capital Securities which represent an unsold allotment from
the original sale of the Old Capital Securities) with a prospectus meeting the
requirements of the Securities Act, which may be the prospectus prepared for
an exchange offer so long as it contains a description of the plan of
distribution with respect to the resale of such New Capital Securities.
Accordingly, this Prospectus, as it may be amended or supplemented from time
to time, may be used by a Participating Broker-Dealer during the period
referred to below in connection with resales of New Capital Securities
received in exchange for Old Capital Securities where such Old Capital
Securities were acquired by such Participating Broker-Dealer for its own
account as a result of market-making or other trading activities. Subject to
certain provisions set forth in the Registration Rights Agreement, the
Corporation and the Trust have agreed that this Prospectus, as it may be
amended or supplemented from time to time, may be used by a Participating
Broker-Dealer in connection with resales of such New Capital Securities for a
period ending 90 days after the Expiration Date (subject to extension under
certain limited circumstances described below) or, if earlier, when all such
New Capital Securities have been disposed of by such Participating Broker-
Dealer. See "Plan of Distribution." However, a Participating Broker-Dealer who
intends to use this Prospectus in connection with the resale of New Capital
Securities received in exchange for Old Capital Securities pursuant to the
Exchange Offer must notify the Corporation or the Trust, or cause the
Corporation or the Trust to be notified, on or prior to the Expiration Date,
that it is a Participating Broker-Dealer. Such notice may be given in the
space provided for that purpose in the Letter of Transmittal or may be
delivered to the Exchange Agent at one of the addresses set forth herein under
"--Exchange Agent." Any Participating Broker-Dealer who is an "affiliate" of
the Corporation (or, after the Merger, of BANC ONE) or the Trust may not rely
on such interpretive letters and must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale transaction.
In that regard, each Participating Broker-Dealer who surrenders Old Capital
Securities pursuant to the Exchange Offer will be deemed to have agreed, by
execution of the Letter of Transmittal, that, upon receipt of notice from the
Corporation or the Trust of the occurrence of any event or the discovery of
any fact which makes any statement contained or incorporated by reference in
this Prospectus untrue in any material respect or which causes this Prospectus
to omit to state a material fact necessary in order to make the statements
contained or incorporated by reference herein, in light of the circumstances
under which they were made, not misleading or of the occurrence of certain
other events specified in the Registration Rights Agreement, such
Participating Broker-Dealer will suspend the sale of New Capital Securities
(or the New Guarantee or the New Junior Subordinated Debentures, as
applicable) pursuant to this Prospectus until the Corporation or the Trust has
amended or supplemented this Prospectus to correct such misstatement or
omission and has furnished copies of the amended or supplemented Prospectus to
such Participating Broker-Dealer or the Corporation or the Trust has given
notice that the sale of the New Capital Securities (or the New Guarantee or
the New Junior Subordinated Debentures, as applicable) may be resumed, as the
case may be. If the Corporation or the Trust gives such notice to suspend the
sale of the New Capital Securities (or the New Guarantee or the New Junior
Subordinated Debentures, as applicable), it shall extend the 90-day period
referred to above during which Participating Broker-Dealers are entitled to
use this Prospectus in connection with the resale of New Capital Securities by
the number of days during the period from and including the date of the giving
of such notice to and including the date when Participating Broker-Dealers
shall have received copies of the amended or supplemented Prospectus necessary
to permit resales of the New Capital Securities or to and including the date
on which the Corporation or the Trust has given notice that the sale of New
Capital Securities (or the New Guarantee or the New Junior Subordinated
Debentures, as applicable) may be resumed, as the case may be.
WITHDRAWAL RIGHTS
Except as otherwise provided herein, tenders of Old Capital Securities may
be withdrawn at any time on or prior to the Expiration Date.
In order for a withdrawal to be effective a written, telegraphic, telex or
facsimile transmission of such notice of withdrawal must be timely received by
the Exchange Agent at one of its addresses set forth under "--Exchange Agent"
on or prior to the Expiration Date. Any such notice of withdrawal must specify
the name
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of the person who tendered the Old Capital Securities to be withdrawn, the
aggregate principal amount of Old Capital Securities to be withdrawn, and (if
certificates for such Old Capital Securities have been tendered) the name of
the registered holder of the Old Capital Securities as set forth on the Old
Capital Securities, if different from that of the person who tendered such Old
Capital Securities. If Old Capital Securities have been delivered or otherwise
identified to the Exchange Agent, then prior to the physical release of such
Old Capital Securities, the tendering holder must submit the serial numbers
shown on the particular Old Capital Securities to be withdrawn and the
signature on the notice of withdrawal must be guaranteed by an Eligible
Institution, except in the case of Old Capital Securities tendered for the
account of an Eligible Institution. If Old Capital Securities have been
tendered pursuant to the procedures for book-entry transfer set forth in "--
Procedures for Tendering Old Capital Securities," the notice of withdrawal
must specify the name and number of the account at DTC to be credited with the
withdrawal of Old Capital Securities, in which case a notice of withdrawal
will be effective if delivered to the Exchange Agent by written, telegraphic,
telex or facsimile transmission. Withdrawals of tenders of Old Capital
Securities may not be rescinded. Old Capital Securities properly withdrawn
will not be deemed validly tendered for purposes of the Exchange Offer, but
may be retendered at any subsequent time on or prior to the Expiration Date by
following any of the procedures described above under "--Procedures for
Tendering Old Capital Securities."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Trust, in its
sole discretion, whose determination shall be final and binding on all
parties. Neither the Corporation, the Trust, any affiliates or assigns of the
Corporation or the Trust, the Exchange Agent nor any other person shall be
under any duty to give any notification of any irregularities in any notice of
withdrawal or incur any liability for failure to give any such notification.
Any Old Capital Securities which have been tendered but which are withdrawn
will be returned to the holder thereof promptly after withdrawal.
DISTRIBUTIONS ON CAPITAL SECURITIES
Holders of Old Capital Securities whose Old Capital Securities are accepted
for exchange will not receive Distributions on such Old Capital Securities and
will be deemed to have waived the right to receive any Distributions on such
Old Capital Securities accumulated from and after December 20, 1996.
Accordingly, holders of New Capital Securities as of the record date for the
payment of Distributions on July 15, 1997 will be entitled to receive
Distributions accumulated from and after December 20, 1996.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, or any extension
of the Exchange Offer, the Corporation and the Trust will not be required to
accept for exchange, or to exchange, any Old Capital Securities for any New
Capital Securities, and, as described below, may terminate the Exchange Offer
(whether or not any Old Capital Securities have theretofore been accepted for
exchange) or may waive any conditions to or amend the Exchange Offer, if any
of the following conditions have occurred or exists or have not been
satisfied:
(a) there shall occur a change in the current interpretation by the staff
of the Commission which permits the New Capital Securities issued pursuant
to the Exchange Offer in exchange for Old Capital Securities to be offered
for resale, resold and otherwise transferred by holders thereof (other than
broker-dealers and any such holder which is an "affiliate" of the
Corporation or the Trust within the meaning of Rule 405 under the
Securities Act) without compliance with the registration and prospectus
delivery provisions of the Securities Act provided that such New Capital
Securities are acquired in the ordinary course of such holders' business
and such holders have no arrangement or understanding with any person to
participate in the distribution of such New Capital Securities; or
(b) any law, statute, rule or regulation shall have been adopted or
enacted which, in the judgment of the Corporation or the Trust, would
reasonably be expected to impair its ability to proceed with the Exchange
Offer; or
(c) a stop order shall have been issued by the Commission or any state
securities authority suspending the effectiveness of the Registration
Statement or proceedings shall have been initiated or, to the knowledge
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of the Corporation or the Trust, threatened for that purpose or any
governmental approval has not been obtained, which approval the Corporation
or the Trust shall, in its sole discretion, deem necessary for the
consummation of the Exchange Offer as contemplated hereby; or
(d) there is a reasonable likelihood that, or a material uncertainty
exists as to whether, consummation of the Exchange Offer would result in a
material adverse tax consequence to the Company.
If the Corporation or the Trust determines in its sole and absolute
discretion that any of the foregoing events or conditions has occurred or
exists or has not been satisfied, it may, subject to applicable law, terminate
the Exchange Offer (whether or not any Old Capital Securities have theretofore
been accepted for exchange) or may waive any such condition or otherwise amend
the terms of the Exchange Offer in any respect. If such waiver or amendment
constitutes a material change to the Exchange Offer, the Corporation or the
Trust will promptly disclose such waiver or amendment by means of a prospectus
supplement that will be distributed to the registered holders of the Old
Capital Securities and will extend the Exchange Offer to the extent required
by Rule 14e-1 under the Exchange Act.
EXCHANGE AGENT
The Bank of New York has been appointed as Exchange Agent for the Exchange
Offer. Delivery of the Letters of Transmittal and any other required
documents, questions, requests for assistance, and requests for additional
copies of this Prospectus or of the Letter of Transmittal should be directed
to the Exchange Agent as follows:
By Registered or Certified Mail: By Hand or Overnight Delivery:
The Bank of New York
The Bank of New York 101 Barclay Street
101 Barclay Street, 7E New York, New York 10286
New York, New York 10286
Attention: Reorganization Section
Attention: Reorganization Section
Henry Lopez
Henry Lopez
Confirm By Telephone:
(212) 815-2742
Facsimile Transmissions:
(ELIGIBLE INSTITUTIONS ONLY)
(212) 571-3080
Delivery to other than the above addresses or facsimile number will not
constitute a valid delivery.
FEES AND EXPENSES
The Corporation, as issuer of the Junior Subordinated Debentures, has agreed
to pay the Exchange Agent reasonable and customary fees for its services and
will reimburse it for its reasonable out-of-pocket expenses in connection
therewith. The Corporation, as issuer of the Junior Subordinated Debentures,
will also pay brokerage houses and other custodians, nominees and fiduciaries
the reasonable out-of-pocket expenses incurred by them in forwarding copies of
this Prospectus and related documents to the beneficial owners of Old Capital
Securities, and in handling or tendering for their customers.
Holders who tender their Old Capital Securities for exchange will not be
obligated to pay any transfer taxes in connection therewith. If, however, New
Capital Securities are to be delivered to, or are to be issued in the name of,
any person other than the registered holder of the Old Capital Securities
tendered, or if a transfer tax is imposed for any reason other than the
exchange of Old Capital Securities in connection with the Exchange Offer, then
the amount of any such transfer taxes (whether imposed on the registered
holder or any other persons) will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes
will be billed directly to such tendering holder.
Neither of the Registrants will make any payment to brokers, dealers or
other nominees soliciting acceptances of the Exchange Offer.
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DESCRIPTION OF CAPITAL SECURITIES
Pursuant to the terms of the Trust Agreement, the Trust has issued the Old
Capital Securities and the Common Securities and will issue the New Capital
Securities. The New Capital Securities will represent beneficial interests in
the Trust and the holders of the New Capital Securities and the Old Capital
Securities will be entitled to a preference over the Common Securities in
certain circumstances with respect to Distributions and amounts payable on
redemption of the Trust Securities or liquidation of the Trust. See "--
Subordination of Common Securities." The Trust Agreement has been qualified
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"),
upon effectiveness of this Registration Statement. This summary of certain
provisions of the New Capital Securities and the 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 the Trust Agreement, including the
definitions therein of certain terms.
GENERAL
The Capital Securities (both the Old Capital Securities and the New Capital
Securities) are limited to $200,000,000 aggregate liquidation amount at any
one time outstanding. Legal title to the Junior Subordinated Debentures will
be held by the Property Trustee in trust for the benefit of the holders of the
Trust Securities. The New Guarantee will not guarantee payment of
Distributions or amounts payable on redemption of the New Capital Securities
or on liquidation of the Trust when the Trust does not have funds on hand
legally available for such payments. See "Description of Guarantee."
DISTRIBUTIONS
Distributions on the Trust Securities will be cumulative, will accumulate
from December 20, 1996 and will be payable semi-annually in arrears on January
15 and July 15 of each year, commencing July 15, 1997, at the annual rate of
9.33% of the liquidation amount to the holders of the Trust Securities on the
relevant record dates. The record dates will be the first day of the month in
which the relevant Distribution Date (as defined below) falls. The amount of
Distributions payable for any period will be computed on the basis of a 360-
day year of twelve 30-day months. In the event that any date on which
Distributions are payable on the Trust Securities is not a Business Day (as
defined below), payment of the Distribution payable on such date will be made
on the next succeeding day that is a Business Day (and without any interest or
other payment in respect to any such delay), in each case with the same force
and effect as if made on such date (each date on which Distributions are
payable in accordance with the foregoing, a "Distribution Date"). A "Business
Day" shall mean any day other than a Saturday or a Sunday, or a day on which
banking institutions in The City of New York or Wilmington, Delaware are
authorized or required by law or executive order to remain closed.
So long as no Debenture Event of Default shall have occurred and be
continuing, the Corporation will have the right under the Indenture to defer
the payment of interest on the Junior Subordinated Debentures at any time and
from time to time, for a period not exceeding 10 consecutive semi-annual
periods with respect to each Extension Period, provided that no Extension
Period may extend beyond the Stated Maturity Date. Upon any such election,
semi-annual Distributions on the Trust Securities will be deferred by the
Trust during any such Extension Period. Distributions to which holders of the
Trust Securities are entitled during any such Extension Period will accumulate
additional Distributions thereon at the rate per annum of 9.33% thereof,
compounded semi-annually from the relevant Distribution Date. The term
"Distributions," as used herein, shall include any such additional
Distributions.
Prior to the termination of any such Extension Period, the Corporation may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods or to
extend beyond the Stated Maturity Date. Upon the termination of any such
Extension Period and the payment of all amounts then due, and subject to the
foregoing limitations, the Corporation may elect to begin a new Extension
Period. The Corporation must give the Property Trustee, the Administrative
Trustees and the Debenture Trustee notice of its election of any such
Extension Period at least five Business Days prior to the
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earlier of (i) the date the Distributions on the Trust Securities would have
been payable except for the election to begin such Extension Period or (ii) the
date the Administrative Trustees are required to give notice to any securities
exchange or to holders of such Trust Securities of the record date or the date
such Distributions are payable but in any event not less than five Business
Days prior to such record date. There is no limitation on the number of times
that the Corporation may elect to begin an Extension Period. See "Description
of Junior Subordinated Debentures--Option to Extend Interest Payment Date" and
"Certain Federal Income Tax Considerations--Interest Income and Original Issue
Discount."
During any such Extension Period, the Corporation may not (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Corporation's capital stock
(which includes common and preferred stock) or (ii) make any payment of
principal of or premium, if any, or interest on or repay, repurchase or redeem
any debt securities of the Corporation (including Other Debentures) that rank
pari passu with or junior in right of payment to the Junior Subordinated
Debentures or (iii) make any guarantee payments with respect to any guarantee
by the Corporation of the debt securities of any subsidiary of the Corporation
(including any Other Guarantees) if such guarantee ranks pari passu with or
junior in right of payment to the Junior Subordinated Debentures (other than
(a) dividends or distributions in shares of, or options, warrants or rights to
subscribe for or purchase shares of, common stock of the Corporation, (b) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto,
(c) payments under the Guarantee, (d) as a result of a reclassification of the
Corporation's capital stock or the exchange or conversion of one class, or
series of the Corporation's capital stock for another class or series of the
Corporation's capital stock, (e) the purchase of fractional interests in shares
of the Corporation's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
and (f) purchases of common stock related to the issuance of common stock or
rights under any of the Corporation's benefit plans for its directors, officers
or employees or any of the Corporation's dividend reinvestment plans). The
Corporation has no current intention to exercise its option to defer payments
of interest on the Junior Subordinated Debentures.
The revenue of the Trust available for distribution to holders of the Trust
Securities will be limited to payments or the Junior Subordinated Debentures.
See "Description of Junior Subordinated Debentures--General." If the
Corporation does not make interest payments on the New Junior Subordinated
Debentures, the Property Trustee will not have funds available to pay
Distributions on the Trust Securities. The payment of Distributions (if and to
the extent the Trust has funds on hand legally available for the payment of
such Distributions) will be guaranteed by the Corporation on a limited basis as
set forth herein under "Description of Guarantee."
REDEMPTION
Upon the repayment on the Stated Maturity Date or prepayment prior to the
Stated Maturity Date of the Junior Subordinated Debentures, the proceeds from
such repayment or prepayment shall be applied by the Property Trustee to redeem
a Like Amount (as defined below) of the Trust Securities, upon not less than 30
nor more than 60 days notice of a date of redemption (the "Redemption Date"),
at the applicable Redemption Price, which shall be equal to (i) in the case of
the repayment of the Junior Subordinated Debentures on the Stated Maturity
Date, the Maturity Redemption Price, (ii) in the case of the optional
prepayment of the Junior Subordinated Debentures prior to January 15, 2007,
upon the occurrence and continuation of a Special Event, the Special Event
Redemption Price and (iii) in the case of the optional prepayment of the Junior
Subordinated Debentures on or after January 15, 2007, the Optional Redemption
Price. See "Description of Junior Subordinated Debentures--Optional Prepayment"
and "--Special Event Prepayment."
"Like Amount" means (i) with respect to a redemption of the Trust Securities,
Trust Securities having a liquidation amount equal to the principal amount of
Junior Subordinated Debentures to be paid in accordance with their terms and
(ii) with respect to a distribution of Junior Subordinated Debentures upon the
liquidation of
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the Trust, Junior Subordinated Debentures having a principal amount equal to
the liquidation amount of the Trust Securities of the holder to whom such
Junior Subordinated Debentures are distributed.
The Corporation will have the option to prepay the Junior Subordinated
Debentures, (i) in whole or in part, on or after January 15, 2007, at the
applicable Optional Prepayment Price and (ii) in whole but not in part, at any
time prior to January 15, 2007, upon the occurrence of a Special Event, at the
Special Event Prepayment Price, in each case subject to any required regulatory
approval.
LIQUIDATION OF THE TRUST AND DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES
The Corporation will have the right at any time to terminate the Trust and
cause the Junior Subordinated Debentures to be distributed to the holders of
the Trust Securities in liquidation of the Trust. Such right is subject to (i)
the Corporation having received an opinion of counsel to the effect that such
distribution will not be a taxable event to holders of Capital Securities and
(ii) any required regulatory approval.
The Trust shall automatically terminate upon the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of the Corporation;
(ii) the distribution of a Like Amount of the Junior Subordinated Debentures to
the holders of the Trust Securities, if the Corporation, as Sponsor, has given
written direction to the Property Trustee to terminate the Trust (which
direction is optional and, except as described above, wholly within the
discretion of the Corporation, as Sponsor); (iii) redemption of all of the
Trust Securities as described under "--Redemption"; (iv) expiration of the term
of the Trust; and (v) the entry of an order for the dissolution of the Trust by
a court of competent jurisdiction.
If a termination occurs as described in clause (i), (ii), (iv), or (v) above,
the Trust 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 the Trust as provided by applicable law, to the
holders of the Trust Securities a Like Amount of the Junior Subordinated
Debentures, unless such distribution is determined by the Property Trustee not
to be practicable, in which event such holders will be entitled to receive out
of the assets of the Trust legally available for distribution to holders, after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law, an amount equal to the aggregate of the liquidation amount plus
accumulated and unpaid Distributions thereon to the date of payment (such
amount being the "Liquidation Distribution"). If such Liquidation Distribution
can be paid only in part because the Trust has insufficient assets on hand
legally available to pay in full the aggregate Liquidation Distribution, then
the amounts payable directly by the Trust on the Trust Securities shall be paid
on a pro rata basis, except that if a Debenture Event of Default has occurred
and is continuing, the Capital Securities shall have a priority over the Common
Securities. See "--Subordination of Common Securities." If an early termination
occurs as described in clause (v) above, the Junior Subordinated Debentures
will be subject to optional prepayment, in whole but not in part, on or after
January 15, 2007.
If the Corporation elects not to prepay the Junior Subordinated Debentures
prior to maturity in accordance with their terms and either elects not to or is
unable to liquidate the Trust and distribute the Junior Subordinated Debentures
to holders of the Trust Securities, the Trust Securities will remain
outstanding until the repayment of the Junior Subordinated Debentures on the
Stated Maturity Date.
After the liquidation date is fixed for any distribution of Junior
Subordinated Debentures to holders of the Trust Securities, (i) the Trust
Securities will no longer be deemed to be outstanding, (ii) each registered
global certificate, if any, representing Trust Securities and held by DTC or
its nominee will receive a registered global certificate or certificates
representing the Junior Subordinated Debentures to be delivered upon such
distribution and (iii) any certificates representing Trust Securities not held
by DTC or its nominee will be deemed to represent Junior Subordinated
Debentures having a principal amount equal to the liquidation amount of such
Trust Securities, and bearing accrued and unpaid interest in an amount equal to
the accumulated and unpaid Distributions on such Trust Securities until such
certificates are presented to the Administrative Trustees or their
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agent for cancellation, whereupon the Corporation will issue to such holder,
and the Debenture Trustee will authenticate, a certificate representing such
Junior Subordinated Debentures.
There can be no assurance as to the market prices for the Capital Securities
or the Junior Subordinated Debentures that may be distributed in exchange for
the Trust Securities if a dissolution and liquidation of the Trust were to
occur. Accordingly, the Capital Securities or the Junior Subordinated
Debentures that an investor may receive on dissolution and liquidation of the
Trust may trade at a discount to the price that the investor paid to purchase
the Capital Securities.
REDEMPTION PROCEDURES
If applicable, Trust Securities shall be redeemed at the applicable
Redemption Price with the proceeds from the contemporaneous repayment or
prepayment of the Junior Subordinated Debentures. Any redemption of Trust
Securities shall be made and the applicable Redemption Price shall be payable
on the Redemption Date only to the extent that the Trust has funds legally
available for the payment of such applicable Redemption Price. See also "--
Subordination of Common Securities."
If the Trust gives a notice of redemption in respect of the Trust
Securities, then, by 12:00 noon, New York City time, on the Redemption Date,
to the extent funds are legally available, with respect to the Trust
Securities held by DTC or its nominees, the Property Trustee will deposit
irrevocably with DTC funds sufficient to pay the applicable Redemption Price.
See "--Form, Denomination, Book-Entry Procedures and Transfer." With respect
to the Trust Securities held in certificated form, the Property Trustee, to
the extent funds are legally available, will irrevocably deposit with the
paying agent for the Capital Securities funds sufficient to pay the applicable
Redemption Price and will give such paying agent irrevocable instructions and
authority to pay the applicable Redemption Price to the holders thereof upon
surrender of their certificates evidencing the Trust Securities. See "--
Payment and Paying Agency." Notwithstanding the foregoing, Distributions
payable on or prior to the Redemption Date shall be payable to the holders of
such Trust 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 the Trust Securities will cease, except the right of the holders of
the Trust Securities to receive the applicable Redemption Price, but without
interest on such Redemption Price, and the Trust Securities will cease to be
outstanding. In the event that any Redemption Date of Trust Securities is not
a Business Day, then the applicable Redemption Price payable on such date will
be paid on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day. In the event that payment of the
applicable Redemption Price is improperly withheld or refused and not paid
either by the Trust or by the Corporation pursuant to the New Guarantee as
described under "Description of Guarantee," Distributions on Trust Securities
will continue to accumulate at the then applicable rate, from the Redemption
Date originally established by the Trust to the date such applicable
Redemption Price is actually paid, in which case the actual payment date will
be the Redemption Date for purposes of calculating the applicable Redemption
Price.
Subject to applicable law (including, without limitation, United States
federal securities law), the Corporation or its subsidiaries may at any time
and from time to time purchase outstanding Capital Securities by tender, in
the open market or by private agreement.
Notice of any redemption will be mailed at least 30 days but not more than
60 days prior to the Redemption Date to each holder of Trust Securities at its
registered address. Unless the Corporation defaults in payment of the
applicable Prepayment Price on, or in the repayment of, the Junior
Subordinated Debentures, on and after the Redemption Date Distributions will
cease to accrue on the Trust Securities called for redemption.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, the Trust
Securities, as applicable, shall be made pro rata based on the Liquidation
Amount of the Capital Securities and Common Securities; provided, however,
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that if on any Distribution Date or Redemption Date a Debenture Event of
Default shall have occurred and be continuing, no payment of any Distribution
on, or applicable Redemption Price of, any of the Common Securities, and no
other payment on account of the redemption, liquidation or other acquisition
of the Common Securities, shall be made unless payment in full in cash of all
accumulated and unpaid Distributions on all of the outstanding Capital
Securities for all Distribution periods terminating on or prior thereto, or in
the case of payment of the applicable Redemption Price the full amount of such
Redemption Price, shall have been made or provided for, and all funds
available to the Property Trustee shall first be applied to the payment in
full in cash of all Distributions on, or Redemption Price of, the Capital
Securities then due and payable.
In the case of any Event of Default, the Corporation as holder of the Common
Securities will be deemed to have waived any right to act with respect to such
Event of Default until the effect of such Event of Default shall have been
cured, waived or otherwise eliminated. Until any such Event of Default has
been so cured, waived or otherwise eliminated, the Property Trustee shall act
solely on behalf of the holders of the Capital Securities and not on behalf of
the Corporation as holder of the Common Securities, and only the holders of
the Capital Securities will have the right to direct the Property Trustee to
act on their behalf.
EVENTS OF DEFAULT; NOTICE
The occurrence of a Debenture Event of Default (see "Description of Junior
Subordinated Debentures--Debenture Events of Default") constitutes an "Event
of Default" under the Trust Agreement.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the Capital Securities, the
Administrative Trustees and the Corporation, as Sponsor, unless such Event of
Default shall have been cured or waived. The Corporation, as Sponsor, and the
Administrative Trustees are required to file annually with the Property
Trustee a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under the Trust Agreement.
If a Debenture Event of Default has occurred and is continuing, the Capital
Securities shall have a preference over the Common Securities as described
under "--Liquidation of the Trust and Distribution of Junior Subordinated
Debentures" and "--Subordination of Common Securities."
REMOVAL OF ISSUER TRUSTEES
Unless a Debenture Event of Default shall have occurred and be continuing,
any Issuer Trustee may be removed at any time by the holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing,
the Property Trustee and the Delaware Trustee may be removed at such time by
the holders of a majority in Liquidation Amount of the outstanding Capital
Securities. In no event will the holders of the Capital Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in the Corporation as the holder of the
Common Securities. No resignation or removal of an Issuer Trustee and no
appointment of a successor trustee shall be effective until the acceptance of
appointment by the successor trustee in accordance with the provisions of the
Trust Agreement.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any corporation into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which such Issuer Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of such Issuer Trustee, shall be the successor of such Issuer
Trustee under the Trust Agreement, provided such corporation shall be
otherwise qualified and eligible.
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MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST
The Trust may not merge with or into, consolidate, amalgamate or be replaced
by, or convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to any corporation or other person, except as
described below. The Trust may, at the request of the Corporation, as Sponsor,
with the consent of the Administrative Trustees but without the consent of the
holders of the Capital Securities, merge with or into, consolidate, amalgamate
or be replaced by or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to a trust organized as such under
the laws of any State; provided, that (i) such successor entity either (a)
expressly assumes all of the obligations of the Trust with respect to the
Trust Securities or (b) substitutes for the Trust Securities other securities
having substantially the same terms as the Trust Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the Trust
Securities rank in priority with respect to distributions and payments upon
liquidation, redemption and otherwise, (ii) the Corporation expressly appoints
a trustee of such successor entity possessing the same powers and duties as
the Property Trustee with respect to the Junior Subordinated Debentures, (iii)
the Successor Securities are listed, or any Successor Securities will be
listed upon notification of issuance, on any national securities exchange or
other organization on which the Capital Securities are then listed, if any,
(iv) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause the Trust 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 Trust Securities (including
any Successor Securities) in any material respect, (vi) such successor entity
has a purpose identical to that of the Trust, (vii) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, the
Corporation has received an opinion from independent counsel to the Trust
experienced in such matters to the effect that (a) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of the Trust
Securities (including any Successor Securities) in any material respect, and
(b) following such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, neither the Trust nor such successor entity
will be required to register as an investment company under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), and (viii) the
Corporation or any permitted successor or assignee owns all of the common
securities of such successor entity and guarantees the obligations of such
successor entity under the Successor Securities at least to the extent
provided by the Guarantee. Notwithstanding the foregoing, the Trust shall not,
except with the consent of holders of 100% in Liquidation Amount of the Trust
Securities, consolidate, amalgamate, merge with or into, or be replaced by or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or
lease would cause the Trust or the successor entity not to be classified as a
grantor trust for United States federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF THE TRUST AGREEMENT
Except as provided below and under "--Mergers, Consolidations, Amalgamations
or Replacements of the Trust" and "Description of Guarantee--Amendments and
Assignment" and as otherwise required by law and the Trust Agreement, the
holders of the Capital Securities will have no voting rights.
The Trust Agreement may be amended from time to time by the Corporation, the
Property Trustee and the Administrative Trustees, without the consent of the
holders of the Trust Securities (i) to cure any ambiguity, correct or
supplement any provisions in the Trust Agreement that may be inconsistent with
any other provision, or to make any other provisions with respect to matters
or questions arising under the Trust Agreement, which shall not be
inconsistent with the other provisions of the Trust Agreement, or (ii) to
modify, eliminate or add to any provisions of the Trust Agreement to such
extent as shall be necessary to ensure that the Trust will be classified for
United States federal income tax purposes as a grantor trust at all times that
any Trust Securities are outstanding or to ensure that the Trust will not be
required to register as an "investment company" under the Investment Company
Act; provided, however, that in the case of clause (i), such action shall not
adversely affect in any material respect the interests of the holders of the
Trust Securities, and any amendments of the
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Trust Agreement shall become effective when notice thereof is given to the
holders of the Trust Securities. The Trust Agreement may be amended by the
Issuer Trustees and the Corporation (i) with the consent of holders
representing a majority (based upon Liquidation Amount) of the outstanding
Trust Securities, and (ii) upon receipt by the Issuer Trustees of an opinion
of a nationally recognized tax counsel experienced in such matters to the
effect that such amendment or the exercise of any power granted to the Issuer
Trustees in accordance with such amendment will not affect the Trust's status
as a grantor trust for United States federal income tax purposes or the
Trust's exemption from status as an "investment company" under the Investment
Company Act, provided that, without the consent of each holder of Trust
Securities, the 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; it being understood that the Capital Securities and any
Old Capital Securities which remain outstanding after consummation of the
Exchange Offer will vote together as a single class for purposes of
determining whether holders of the requisite percentage in outstanding
Liquidation Amount thereof have taken certain actions or exercised certain
rights under the Trust Agreement.
So long as any Junior Subordinated Debentures are held by the Property
Trustee, the Issuer Trustees shall not (i) direct the time, method and place
of conducting any proceeding for any remedy available to the Debenture
Trustee, or executing any trust or power conferred on such Property Trustee
with respect to the Junior Subordinated Debentures, (ii) waive certain past
defaults under the Indenture, (iii) exercise any right to rescind or annul a
declaration of acceleration of the maturity of the principal of the Junior
Subordinated Debentures or (iv) consent to any amendment, modification or
termination of the Indenture or the Junior Subordinated Debentures, where such
consent shall be required, without, in each case, obtaining the prior approval
of the holders of a majority in Liquidation Amount of all outstanding Capital
Securities; provided, however, that where a consent under the Indenture would
require the consent of each holder of Junior Subordinated Debentures affected
thereby, no such consent shall be given by the Property Trustee without the
prior approval of each holder of the Capital Securities. The Issuer Trustees
shall not revoke any action previously authorized or approved by a vote of the
holders of the Capital Securities except by subsequent vote of such holders.
The Property Trustee shall notify each holder of Capital Securities of any
notice of default with respect to the Junior Subordinated Debentures. In
addition to obtaining the foregoing approvals of such holders of the Capital
Securities, prior to taking any of the foregoing actions, the Issuer Trustees
shall obtain an opinion of a nationally recognized tax counsel experienced in
such matters to the effect that the Trust will not be classified as an
association taxable as a corporation for United States federal income tax
purposes on account of such action.
Any required approval of holders of Capital Securities may be given at a
meeting of such holders convened for such purpose or pursuant to written
consent. The Property Trustee will cause a notice of any meeting at which
holders of Capital Securities are entitled to vote, or of any matter upon
which action by written consent of such holders is to be taken, to be given to
each holder of record of Capital Securities in the manner set forth in the
Trust Agreement.
No vote or consent of the holders of Capital Securities will be required for
the Trust to redeem and cancel the Capital Securities in accordance with the
Trust Agreement.
Notwithstanding that holders of the Capital Securities are entitled to vote
or consent under any of the circumstances described above, any of the Capital
Securities that are owned by the Corporation, the Issuer Trustees or any
affiliate of the Corporation or any Issuer Trustees, shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
FORM, DENOMINATION, BOOK-ENTRY PROCEDURES AND TRANSFER
The Capital Securities initially will be represented by one or more Capital
Securities in registered, global form ("Global Capital Securities"). The
Global Capital Securities will be deposited upon issuance with the
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Property Trustee as custodian for DTC, in New York, New York, and registered
in the name of DTC or its nominee, for credit to an account of a direct or
indirect participant in DTC as described below.
Except as set forth below, the Global Capital Securities may be transferred,
in whole and not in part, only to another nominee of DTC or to a successor of
DTC or its nominee. Beneficial interests in the Global Capital Securities may
not be exchanged for Capital Securities in certificated form except in the
limited circumstances described below.
DTC has advised the Trust and the Corporation that DTC is a limited purpose
trust company created to hold securities for its participating organizations
(collectively, the "Participants") and to facilitate the clearance and
settlement of transactions in those securities between Participants through
electronic book-entry changes in accounts of its Participants. The
Participants include securities brokers and dealers (including the Initial
Purchasers), banks, trust companies, clearing corporations and certain other
organizations. Access to DTC's system is also available to other entities such
as banks, brokers, dealers and trust companies that clear through or maintain
a custodial relationship with a Participant, either directly or indirectly
(collectively, the "Indirect Participants"). Persons who are not Participants
may beneficially own securities held by or on behalf of DTC only through the
Participants or the Indirect Participants. The ownership interest and transfer
of ownership interest of each actual purchaser of each security held by or on
behalf of DTC are recorded on the records of the Participants and Indirect
Participants.
DTC has also advised the Trust and the Corporation that, pursuant to
procedures established by it, (i) upon deposit of the Global Capital
Securities, DTC will credit the accounts of Participants with portions of the
Liquidation Amount of the Global Capital Securities and (ii) ownership of such
interests in the Global Capital Securities will be shown on, and the transfer
of ownership thereof will be effected only through, records maintained by DTC
(with respect to the Participants) or by the Participants and the Indirect
Participants (with respect to other owners of beneficial interests in the
Global Capital Securities).
Except as described below, owners of interests in the Global Capital
Securities will not have Capital Securities registered in their name, will not
receive physical delivery of Capital Securities in certificated form and will
not be considered the registered owners or holders thereof under the Trust
Agreement for any purpose.
Payments in respect of a Global Capital Security registered in the name of
DTC or its nominee will be payable by the Property Trustee to DTC in its
capacity as the registered holder under the Trust Agreement. Under the terms
of the Trust Agreement, the Property Trustee will treat the persons in whose
names the Capital Securities, including the Global Capital Securities, are
registered as the owners thereof for the purpose of receiving such payments
and for any and all other purposes whatsoever. Consequently, neither the
Property Trustee nor any agent thereof has or will have any responsibility or
liability for (i) any aspect of DTC's records or any Participant's or Indirect
Participant's records relating to or payments made on account of beneficial
interests in the Global Capital Securities, or for maintaining, supervising or
reviewing any of DTC's records or any Participant's or Indirect Participant's
records relating to the beneficial ownership interests in the Global Capital
Securities or (ii) any other matter relating to the actions and practices of
DTC or any of its Participants or Indirect Participants. DTC has advised the
Trust and the Corporation that its current practice, upon receipt of any
payment in respect of securities such as the Capital Securities, is to credit
the accounts of the relevant Participants with the payment on the payment
date, in amounts proportionate to their respective holdings in Liquidation
Amount of beneficial interests in the relevant security as shown on the
records of DTC unless DTC has reason to believe it will not receive payment on
such payment date. Payments by the Participants and the Indirect Participants
to the beneficial owners of Capital Securities will be governed by standing
instructions and customary practices and will be the responsibility of the
Participants or the Indirect Participants and will not be the responsibility
of DTC, the Property Trustee, the Trust or the Corporation. Neither the Trust
or the Corporation nor the Property Trustee will be liable for any delay by
DTC or any of its Participants in identifying the beneficial owners of the
Capital Securities, and the Trust or the Corporation and the Property Trustee
may conclusively rely on and will be protected in relying on instructions from
DTC or its nominee for all purposes.
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Secondary market trading activity in interests in the Global Capital
Securities will settle in immediately available funds, subject in all cases to
the rules and procedures of DTC and its Participants. Transfers between
Participants in DTC will be effected in accordance with DTC's procedures, and
will be settled in same-day funds.
DTC has advised the Trust and the Corporation that it will take any action
permitted to be taken by a holder of Capital Securities only at the direction
of one or more Participants to whose account with DTC interests in the Global
Capital Securities are credited and only in respect of such portion of the
Liquidation Amount of the Capital Securities as to which such Participant or
Participants has or have given such direction. However, if there is an Event
of Default under the Trust Agreement, DTC reserves the right to exchange the
Global Capital Securities for Capital Securities in certificated form and to
distribute such Capital Securities to its Participants.
The information in this section concerning DTC and its book-entry system has
been obtained from sources that the Trust and the Corporation believe to be
reliable, but neither the Trust nor the Corporation takes responsibility for
the accuracy thereof.
Although DTC has agreed to the foregoing procedures to facilitate transfers
of interest in the Global Capital Securities among Participants in DTC, it is
under no obligation to perform or to continue to perform such procedures, and
such procedures may be discontinued at any time. Neither the Trust nor the
Corporation nor the Property Trustee will have any responsibility for the
performance by DTC or its Participants or Indirect Participants of its
obligations under the rules and procedures governing its operations.
Exchange of Book-Entry Capital Securities for Certificated Capital Securities
A Global Capital Security is exchangeable for Capital Securities in
registered certificated form if (i) DTC (x) notifies the Trust that it is
unwilling or unable to continue as depositary for the Global Capital Security
and the Trust thereupon fails to appoint a successor depositary within 90 days
or (y) has ceased to be a clearing agency registered under the Exchange Act,
(ii) the Corporation in its sole discretion elects to cause the issuance of
the Capital Securities in certificated form or (iii) there shall have occurred
and be continuing an Event of Default or any event which after notice or lapse
of time or both would be an Event of Default under the Trust Agreement. In
addition, beneficial interests in a Global Capital Security may be exchanged
for certificated Capital Securities upon request but only upon at least 20
days prior written notice given to the Property Trustee by or on behalf of DTC
in accordance with customary procedures. In all cases, certificated Capital
Securities delivered in exchange for any Global Capital Security or beneficial
interests therein will be registered in the names, and issued in any approved
denominations, requested by or on behalf of the Depositary (in accordance with
its customary procedures), unless the Property Trustee determines otherwise in
compliance with applicable law.
Exchange of Certificated Capital Securities for Book-Entry Securities
Capital Securities that were offered and sold to institutional accredited
investors in transactions exempt from registration under the Securities Act
not made in reliance on Rule 144A ("Other Capital Securities"), which will be
issued in certificated form, may not be exchanged for beneficial interests in
any Global Capital Security unless such exchange occurs in connection with a
transfer of such Other Capital Securities and the transferor first delivers to
the Property Trustee a written certificate (in the form provided in the Trust
Agreement) to the effect that such transfer will comply with the appropriate
transfer restrictions applicable to such Capital Securities.
PAYMENT AND PAYING AGENCY
Payments in respect of the Capital Securities held in global form shall be
made to the Depositary, which shall credit the relevant accounts at the
Depositary on the applicable Distribution Dates or in respect of the Capital
Securities that are not held by the Depositary, such payments shall be made by
check mailed to the address of the holder entitled thereto as such address
shall appear on the register. The paying agent (the "Paying
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Agent") shall initially be the Property Trustee and any co-paying agent chosen
by the Property Trustee and acceptable to the Administrative Trustees and the
Corporation. The Paying Agent shall be permitted to resign as Paying Agent
upon 30 days written notice to the Property Trustee and the Corporation. In
the event that the Property Trustee shall no longer be the Paying Agent, the
Administrative Trustees shall appoint a successor (which shall be a bank or
trust company acceptable to the Administrative Trustees and the Corporation)
to act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
The Property Trustee will act as registrar and transfer agent for the
Capital Securities.
Registration of transfers of the Capital Securities will be effected without
charge by or on behalf of the Trust, but upon payment of any tax or other
governmental charges that may be imposed in connection with any transfer or
exchange. The Trust will not be required to register or cause to be registered
the transfer of the Capital Securities after they have been called for
redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of an
Event of Default, undertakes to perform only such duties as are specifically
set forth in the 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 Trust Agreement at the request of any holder of Trust
Securities unless it is offered reasonable indemnity against the costs,
expenses and liabilities that might be incurred thereby. If no Event of
Default has occurred and is continuing and the Property Trustee is required to
decide between alternative causes of action, construe ambiguous provisions in
the Trust Agreement or is unsure of the application of any provision of the
Trust Agreement, and the matter is not one on which holders of the Capital
Securities or the Common Securities are entitled under the 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 Trust in such a way that the Trust will not be
deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as an association taxable as a
corporation for United States federal income tax purposes and so that the
Junior Subordinated Debentures will be treated as indebtedness of the
Corporation for United States federal income tax purposes. In this connection,
the Corporation and the Administrative Trustees are authorized to take any
action, not inconsistent with applicable law, the certificate of trust of the
Trust or the 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 Trust Securities.
Holders of the Trust Securities have no preemptive or similar rights.
The Trust may not borrow money, issue debt, execute mortgages or pledge any
of its assets.
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DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
The Old Junior Subordinated Debentures were issued and the New Junior
Subordinated Debentures will be issued as a separate series under the
Indenture. The Indenture will be qualified under the Trust Indenture Act upon
effectiveness of this Registration Statement. This summary of certain terms
and provisions of the Junior Subordinated Debentures and the Indenture does
not purport to be complete, and where reference is made to particular
provisions of the Indenture, such provisions, including the definitions of
certain terms, some of which are not otherwise defined herein, are qualified
in their entirety by reference to all of the provisions of the Indenture and
those terms made a part of the Indenture by the Trust Indenture Act.
GENERAL
Concurrently with the issuance of the Capital Securities, the Trust invested
the proceeds thereof, together with the consideration paid by the Corporation
for the Common Securities, in Old Junior Subordinated Debentures issued by the
Corporation. Pursuant to the Exchange Offer, the Corporation will exchange the
Old Junior Subordinated Debentures, in an amount corresponding to the Old
Capital Securities accepted for exchange, for a like aggregate principal
amount of the New Junior Subordinated Debentures as soon as practicable after
the Expiration Date.
The New Junior Subordinated Debentures will bear interest at the annual rate
of 9.33% of the principal amount thereof, payable semi-annually in arrears on
January 15 and July 15 of each year (each, an "Interest Payment Date"),
commencing July 15, 1997, to the person in whose name each Junior Subordinated
Debenture is registered, subject to certain exceptions, at the close of
business on the first day of the month in which the relevant payment date
falls. It is anticipated that, until the liquidation, if any, of the Trust,
each New Junior Subordinated Debenture will be held in the name of the
Property Trustee in trust for the benefit of the holders of the Trust
Securities. The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. In the event that any
date on which interest is payable on the New Junior Subordinated Debentures is
not a Business Day, then payment of the interest payable on such date will be
made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), with the same force
and effect as if made on the date such payment was originally payable. Accrued
interest that is not paid on the applicable Interest Payment Date will bear
additional interest on the amount thereof (to the extent permitted by law) at
the rate per annum of 9.33% thereof, compounded semi-annually. The term
"interest", as used herein, shall include semi-annual interest payments,
interest on semi-annual interest payments not paid on the applicable Interest
Payment Date and Additional Sums (as defined below), as applicable.
The New Junior Subordinated Debentures will be issued in denominations of
$1,000 and integral multiples thereof. The New Junior Subordinated Debentures
will mature on January 15, 2027 (the "Stated Maturity Date").
The New Junior Subordinated Debentures will rank pari passu with all Other
Debentures and will be unsecured and will rank subordinate and junior in right
of payment to all Senior Indebtedness to the extent and in the manner set
forth in the Indenture. See "--Subordination."
The Corporation is a non-operating holding company and almost all of the
operating assets of the Corporation and its consolidated subsidiaries are
owned by such subsidiaries. The Corporation is a legal entity separate and
distinct from its banking and non-banking affiliates. The principal sources of
the Corporation's income are dividends and interest from its banking and non-
banking affiliates. The Corporation relies primarily on dividends from
subsidiaries to meet its obligations. The Banks are subject to certain
restrictions imposed by state and federal law on any loans or extensions of
credit to, investments in, or asset purchases from, the Corporation or its
non-banking affiliates. Such transactions by any of the Banks are generally
limited in amount as to the Corporation and as to each of such other
affiliates to 10% of such Bank's capital and surplus and as to the Corporation
and all of such other affiliates to an aggregate of 20% of such Bank's capital
and surplus. Such restrictions also prevent the Corporation and such other
affiliates from borrowing from the Banks unless the loans are secured in
specified amounts. In addition, there are state and federal regulatory
limitations on the payment of
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dividends directly or indirectly to the Corporation from the Banks. Federal
and state regulatory agencies also have the authority to limit payment of
dividends by the Corporation's bank and thrift subsidiaries based on the
capital adequacy of each such subsidiary and the safety and soundness of each
such subsidiary following payment of the proposed dividend. Upon the
consummation of the Merger, BANC ONE and its subsidiaries (including the
Corporation's subsidiaries) will continue to be subject to such restrictions
and limitations on the extension of credit, borrowing, transaction amounts and
payment of dividends.
Because the Corporation is a holding company, the right of the Corporation
to participate in any distribution of assets of any subsidiary, upon such
subsidiary's liquidation or reorganization or otherwise, is subject to the
prior claims of creditors of the subsidiary (including depositors, in the case
of the Banks), except to the extent the Corporation may itself be recognized
as a creditor of that subsidiary. Accordingly, the New Junior Subordinated
Debentures will be effectively subordinated to all existing and future
liabilities of the Corporation's subsidiaries, and holders of New Junior
Subordinated Debentures should not rely upon the assets of the Corporation's
subsidiaries for repayment of the New Junior Subordinated Debentures. The
Indenture does not limit the incurrence or issuance of other indebtedness of
the Corporation, including Senior Indebtedness. See "--Subordination."
FORM, REGISTRATION AND TRANSFER
If the Junior Subordinated Debentures are distributed to holders of the
Trust Securities, such Junior Subordinated Debentures may be represented by
one or more global certificates registered in the name of Cede & Co. as the
nominee of DTC. The depositary arrangements for such Junior Subordinated
Debentures are expected to be substantially similar to those in effect for the
Capital Securities. For a description of DTC and the terms of the depositary
arrangements relating to payments, transfers, voting rights, redemptions and
other notices and other matters, see "Description of Capital Securities--Form,
Denomination, Book-Entry Procedures and Transfer."
PAYMENT AND PAYING AGENTS
Payment of principal of (and premium, if any) and any interest on Junior
Subordinated Debentures will be made at the office of the Debenture Trustee in
The City of New York or at the office of such Paying Agent or Paying Agents as
the Corporation may designate from time to time, except that at the option of
the Corporation payment of any interest may be made except in the case of
Junior Subordinated Debentures in global form, (i) by check mailed to the
address of the person entitled thereto as such address shall appear in the
register for Junior Subordinated Debentures or (ii) by transfer to an account
maintained by the person entitled thereto as specified in such register,
provided that proper transfer instructions have been received by the relevant
Record Date. Payment of any interest on any Junior Subordinated Debenture will
be made to the person in whose name such Junior Subordinated Debenture is
registered at the close of business on the Record Date for such interest,
except in the case of defaulted interest. The Corporation may at any time
designate additional Paying Agents or rescind the designation of any Paying
Agent; however the Corporation will at all times be required to maintain a
Paying Agent in each place of payment for the Junior Subordinated Debentures.
Any moneys deposited with the Debenture Trustee or any Paying Agent, or then
held by the Corporation in trust, for the payment of the principal of (and
premium, if any) or interest on any Junior Subordinated Debenture and
remaining unclaimed for two years after such principal (and premium, if any)
or interest has become due and payable shall, at the request of the
Corporation, be repaid to the Corporation and the holder of such Junior
Subordinated Debenture shall thereafter look, as a general unsecured creditor,
only to the Corporation for payment thereof.
OPTION TO EXTEND INTEREST PAYMENT DATE
So long as no Debenture Event of Default has occurred and is continuing, the
Corporation will have the right under the Indenture at any time, and from time
to time, during the term of the Junior Subordinated Debentures to defer the
payment of interest for a period not exceeding 10 consecutive semi-annual
periods with respect to each Extension Period, provided that no Extension
Period may extend beyond the Stated Maturity Date. At the end of such
Extension Period, the Corporation must pay all interest then accrued and
unpaid
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(together with interest thereon at the annual rate of 9.33%, compounded semi-
annually, to the extent permitted by applicable law). During an Extension
Period, interest will continue to accrue and holders of Junior Subordinated
Debentures (and holders of the Trust Securities while Trust Securities are
outstanding) will be required to accrue interest income for United States
federal income tax purposes prior to the receipt of cash attributable to such
income. See "Certain Federal Income Tax Considerations--Interest Income and
Original Issue Discount."
During any such Extension Period, the Corporation may not (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Corporation's capital stock
(which includes common and preferred stock) or (ii) make any payment of
principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities of the Corporation (including any Other Debentures) that rank
pari passu with or junior in right of payment to the Junior Subordinated
Debentures or (iii) make any guarantee payments with respect to any guarantee
by the Corporation of the debt securities of any subsidiary of the Corporation
(including any Other Guarantees) if such guarantee ranks pari passu with or
junior in right of payment to the Junior Subordinated Debentures (other than
(a) dividends or distributions in shares of or options, warrants or rights to
subscribe for or purchase shares of, common stock of the Corporation, (b) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto,
(c) payments under the Guarantee, (d) as a result of a reclassification of the
Corporation's capital stock or the exchange or conversion of one class or
series of the Corporation's capital stock for another class or series of the
Corporation's capital stock, (e) the purchase of fractional interests in
shares of the Corporation's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, and (f) purchases of common stock related to the issuance of common
stock or rights under any of the Corporation's benefit plans for its
directors, officers or employees or any of the Corporation's dividend
reinvestment plans).
Prior to the termination of any such Extension Period, the Corporation may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods or to
extend beyond the Stated Maturity Date. Upon the termination of any such
Extension Period and the payment of all amounts then due on any Interest
Payment Date, the Corporation may elect to begin a new Extension Period,
subject to the above requirements. No interest shall be due and payable during
an Extension Period, except at the end thereof. The Corporation must give the
Property Trustee, the Administrative Trustees and the Debenture Trustee notice
of its election of any Extension Period (or an extension thereof) at least
five Business Days prior to the earlier of (i) the date the Distributions on
the Trust Securities would have been payable except for the election to begin
or extend such Extension Period or (ii) the date the Administrative Trustees
are required to give notice to any securities exchange or to holders of
Capital Securities of the record date or the date such Distributions are
payable, but in any event not less than five Business Days prior to such
record date. The Debenture Trustee shall give notice of the Corporation's
election to begin or extend a new Extension Period to the holders of the
Capital Securities. There is no limitation on the number of times that the
Corporation may elect to begin an Extension Period.
OPTIONAL PREPAYMENT
The Junior Subordinated Debentures will be prepayable, in whole or in part,
at the option of the Corporation on or after January 15, 2007 (the "Initial
Optional Prepayment Date"), subject to the Corporation having received any
required regulatory approval, at a prepayment price (the "Optional Prepayment
Price") equal to the percentage of the outstanding principal amount of the
Junior Subordinated Debentures specified below, plus, in each case, accrued
interest thereon to the date of prepayment if redeemed during the 12-month
period beginning January 15 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2007......................................................... 104.6650%
2008......................................................... 104.1985%
2009......................................................... 103.7320%
</TABLE>
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<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2010......................................................... 103.2655%
2011......................................................... 102.7990%
2012......................................................... 102.3325%
2013......................................................... 101.8660%
2014......................................................... 101.3995%
2015......................................................... 100.9330%
2016......................................................... 100.4665%
2017 and thereafter.......................................... 100.0000%
</TABLE>
SPECIAL EVENT PREPAYMENT
If a Special Event occurs and is continuing, the Corporation may, at its
option, and subject to receipt of any required regulatory approval, prepay the
Junior Subordinated Debentures in whole (but not in part) at any time prior to
January 15, 2007 within 90 days of the occurrence of such Special Event, at a
prepayment price (the "Special Event Prepayment Price") equal to the greater
of (i) 100% of the principal amount of such Junior Subordinated Debentures or
(ii) the sum, as determined by a Quotation Agent, of the present values of the
principal amount and premium payable with respect to an optional redemption of
the Junior Subordinated Debentures on the Initial Optional Prepayment Date,
together with scheduled payments of interest on the Junior Subordinated
Debentures from the prepayment date to and including the Initial Optional
Prepayment Date (the "Remaining Life"), discounted to the prepayment date on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Adjusted Treasury Rate (as defined below), plus, in each case, accrued
interest thereon to the date of prepayment.
A "Special Event" means a Tax Event or a Regulatory Capital Event (each as
defined below) as the case may be.
A "Tax Event" means the receipt by the Corporation and the Trust of an
opinion of a nationally recognized tax counsel experienced in such matters to
the effect that, as a result of any amendment to, or change (including any
announced prospective change) in, the laws or any regulations thereunder of
the United States or any political subdivision or taxing authority thereof or
therein, or as a result of any official administrative pronouncement or
judicial decision interpreting or applying such laws or regulations, which
amendment or change is effective or which pronouncement or decision is
announced on or after December 20, 1996, there is more than an insubstantial
risk that (i) the Trust is, or will be within 90 days of the date of such
opinion, subject to United States federal income tax with respect to income
received or accrued on the Junior Subordinated Debentures, (ii) interest
payable by the Corporation on the Junior Subordinated Debentures is not, or
within 90 days of the date of such opinion will not be, deductible by the
Corporation, in whole or in part, for United States federal income tax
purposes, or (iii) the Trust is, or will be within 90 days of the date of such
opinion, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
A "Regulatory Capital Event" shall occur at any time, following the date
(the "Election Date") on which the Corporation shall effectively elect to
treat the Capital Securities as Tier I Capital (or its equivalent), that the
Corporation shall have received an opinion of independent bank regulatory
counsel experienced in such matters to the effect that, as a result of (a) any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any rules,
guidelines or policies of the Federal Reserve Board or, if applicable, the
Office of Thrift Supervision or, in each case, its successors, or (b) any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such pronouncement or decision is announced on or after the Election Date, the
Capital Securities do not constitute, or within 90 days of the date thereof
will not constitute, Tier I Capital (or its then equivalent).
"Adjusted Treasury Rate" means, with respect to any prepayment date, the
rate per annum equal to (i) the yield, under the heading which represents the
average for the immediately prior week, appearing in the most
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recently published statistical release designated "H.15 (519)" or any
successor publication which is published weekly by the Federal Reserve Board
and which establishes yields on actively traded United States Treasury
securities adjusted to constant maturity under the caption "Treasury Constant
Maturities," for the maturity corresponding to the Remaining Life (if no
maturity is within three months before or after the maturity corresponding to
the Remaining Life, yields for the two published maturities most closely
corresponding to the Remaining Life shall be interpolated, and the Adjusted
Treasury Rate shall be interpolated or extrapolated from such yields on a
straight-line basis, rounding to the nearest month) or (ii) if such release
(or any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (as defined below)
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price (as defined below) for such prepayment date, in each case
calculated on the third Business Day preceding the prepayment date, plus in
each case (a) 1.25% if such prepayment date occurs on or prior to December 31,
1997, and (b) 0.50% in all other cases.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the
Remaining Life of the Junior Subordinated Debentures that would be utilized,
at the time of selection and in accordance with customary financial practice,
in pricing new issues of corporate debt securities of comparable maturity to
the Remaining Life of the Junior Subordinated Debentures. If no United States
Treasury security has a maturity which is within a period from three months
before to three months after the Initial Optional Prepayment Date, the two
most closely corresponding United States Treasury securities shall be used as
the Comparable Treasury Issue, and the Adjusted Treasury Rate shall be
interpolated or extrapolated on a straight-line basis, rounding to the nearest
month, using such securities.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Corporation. "Reference Treasury Dealer" means (i) Merrill Lynch Government
Securities, Inc. and its respective successors; provided, however, that if the
foregoing shall cease to be a primary U.S. Government securities dealer in New
York City (a "Primary Treasury Dealer"), the Corporation shall substitute
therefor another Primary Treasury Dealer; and (ii) any other Primary Treasury
Dealer selected by the Corporation.
"Comparable Treasury Price" means, with respect to any prepayment date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such prepayment date, as set forth in the daily
statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for
U.S. Government Securities" or (ii) if such release (or any successor release)
is not published or does not contain such prices on such Business Day, (A) the
average of five Reference Treasury Dealer Quotations (as defined below) for
such prepayment date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (B) if the Debenture Trustee obtains fewer than
three such Reference Treasury Dealer Quotations, the average of all such
Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any prepayment date, the average, as determined by the
Debenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted
in writing to the Debenture Trustee by such Reference Treasury Dealer at 5:00
p.m., New York City time, on the third Business Day preceding such prepayment
date.
"Additional Sums" means such additional amounts as may be necessary in order
that the amount of Distributions then due and payable by the Trust on the
outstanding Trust Securities shall not be reduced as a result of any
additional taxes, duties or other governmental charges to which the Trust has
become subject as a result of a Tax Event.
Notice of any prepayment will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Junior Subordinated
Debentures to be prepaid at its registered address. Unless the
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Corporation defaults in payment of the prepayment price, on and after the
prepayment date interest ceases to accrue on such Junior Subordinated
Debentures called for prepayment.
If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Corporation will pay as
additional amounts on the Junior Subordinated Debentures the Additional Sums.
RESTRICTIONS ON CERTAIN PAYMENTS
The Corporation will also covenant that it will not, (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Corporation's capital stock
(which includes common and preferred stock) or (ii) make any payment of
principal, interest or premium, if any, on or repay or repurchase or redeem
any debt securities of the Corporation (including Other Debentures) that rank
pari passu with or junior in right of payment to the Junior Subordinated
Debentures or (iii) make any guarantee payments with respect to any guarantee
by the Corporation of the debt securities of any subsidiary of the Corporation
(including any Other Guarantees) if such guarantee ranks pari passu or junior
in right of payment to the Junior Subordinated Debentures (other than (a)
dividends or distributions in shares of, or options, warrants or rights to
subscribe for or purchase shares of, common stock of the Corporation, (b) any
declaration of a dividend in connection with the implementation of a
stockholder's rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto,
(c) payments under the Guarantee, (d) as a result of a reclassification of the
Corporation's capital stock or the exchange or conversion of one class or
series of the Corporation's capital stock for another class or series of the
Corporation's capital stock, (e) the purchase of fractional interests in
shares of the Corporation's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, and (f) purchases of common stock related to the issuance of common
stock or rights under any of the Corporation's benefit plans for its
directors, officers or employees or any of the Corporation's dividend
reinvestment plans) if at such time (1) there shall have occurred any event of
which the Corporation has actual knowledge that (a) is, or with the giving of
notice or the lapse of time, or both, would be, a Debenture Event of Default
and (b) in respect of which the Corporation shall not have taken reasonable
steps to cure, (2) if such Junior Subordinated Debentures are held by the
Trust, the Corporation shall be in default with respect to its payment of any
obligations under the New Guarantee or (3) the Corporation shall have given
notice of its election of an Extension Period as provided in the Indenture and
shall not have rescinded such notice, and such Extension Period, or any
extension thereof, shall have commenced.
MODIFICATION OF INDENTURE
From time to time the Corporation and the Debenture Trustee may, without the
consent of the holders of Junior Subordinated Debentures, amend, waive or
supplement the Indenture for specified purposes, including, among other
things, curing ambiguities, defects or inconsistencies (provided that any such
action does not materially adversely affect the interest of the holders of
Junior Subordinated Debentures) and qualifying, or maintaining the
qualification of, the Indenture under the Trust Indenture Act. The Indenture
contains provisions permitting the Corporation and the Debenture Trustee, with
the consent of the holders of a majority in principal amount of Junior
Subordinated Debentures, to modify the Indenture in a manner affecting the
rights of the holders of Junior Subordinated Debentures; provided, that no
such modification may, without the consent of the holders of each outstanding
Junior Subordinated Debenture so affected, (i) change the Stated Maturity, or
reduce the principal amount of the Junior Subordinated Debentures or reduce
the rate or extend the time of payment of interest thereon or (ii) reduce the
percentage of principal amount of Junior Subordinated Debentures, the holders
of which are required to consent to any such modification of the Indenture.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to the Junior Subordinated Debentures constitutes a
"Debenture Event of Default" (whatever the reason for such Debenture
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<PAGE>
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(i) failure for 30 days to pay any interest on the Junior Subordinated
Debentures or any Other Debentures when due (subject to the deferral of any
due date in the case of an Extension Period); or
(ii) failure to pay any principal or premium, if any, on the Junior
Subordinated Debentures or any Other Debentures when due whether at
maturity, upon redemption, by declaration of acceleration of maturity or
otherwise; or
(iii) failure to observe or perform in any material respect certain other
covenants contained in the Indenture for 90 days after written notice to
the Corporation from the Debenture Trustee or the holders of at least 25%
in aggregate outstanding principal amount of Junior Subordinated
Debentures; or
(iv) certain events in bankruptcy, insolvency or reorganization of the
Corporation.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debentures have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Debenture
Trustee. The Debenture Trustee or the holders of not less than 25% in
aggregate outstanding principal amount of the Junior Subordinated Debentures
may declare the principal due and payable immediately upon a Debenture Event
of Default. The holders of a majority in aggregate outstanding principal
amount of the Junior Subordinated Debentures may annul such declaration and
waive the default if the default (other than the non-payment of the principal
of the Junior Subordinated Debentures which has become due solely by such
acceleration) has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration has
been deposited with the Debenture Trustee.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debentures affected thereby may, on behalf of the holders
of all the Junior Subordinated Debentures, waive any past default, except a
default in the payment of principal (or premium, if any) or interest (unless
such default has been cured and a sum sufficient to pay all matured
installments of interest (and premium, if any) and principal due otherwise
than by acceleration has been deposited with the Debenture Trustee) or a
default in respect of a covenant or provision which under the Indenture cannot
be modified or amended without the consent of the holder of each outstanding
Junior Subordinated Debenture.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES
If a Debenture Event of Default shall have occurred and be continuing and
shall be attributable to the failure of the Corporation to pay interest (or
premium, if any) on or principal of the Junior Subordinated Debentures on the
due date, a holder of Capital Securities may institute a Direct Action. The
Corporation may not amend the Indenture to remove the foregoing right to bring
a Direct Action without the prior written consent of the holders of all of the
Capital Securities. If the right to bring a Direct Action is removed following
the Exchange Offer, the Trust may become subject to the reporting obligations
under the Exchange Act. Notwithstanding any payments made to a holder of
Capital Securities by the Corporation in connection with a Direct Action, the
Corporation shall remain obligated to pay the principal of (or premium, if
any) or interest on the Junior Subordinated Debentures, and the Corporation
shall be subrogated to the rights of the holder of such Capital Securities
with respect to payments on the Capital Securities to the extent of any
payments made by the Corporation to such holder in any Direct Action.
The holders of the Capital Securities will not be able to exercise directly
any remedies, other than those set forth in the preceding paragraph, available
to the holders of the Junior Subordinated Debentures unless there shall have
been an Event of Default under the Trust Agreement. See "Description of
Capital Securities--Events of Default; Notice."
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MERGER, CONSOLIDATION, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Corporation shall not consolidate with or
merge into any other person or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to any person, and no
person shall consolidate with or merge into the Corporation or convey, transfer
or lease its properties and assets as an entirety or substantially as an
entirety to the Corporation, unless: (i) in case the Corporation consolidates
with or merges into another person or conveys or transfers its properties and
assets substantially as an entirety to any person, the successor person is
organized under the laws of the United States or any State or the District of
Columbia, and such successor person expressly assumes the Corporation's
obligations on the Junior Subordinated Debentures; (ii) immediately after
giving effect thereto, no Debenture Event of Default, and no event which, after
notice or lapse of time or both, would become a Debenture Event of Default,
shall have occurred and be continuing; and (iii) certain other conditions as
prescribed in the Indenture are met.
The general provisions of the Indenture do not afford holders of the Junior
Subordinated Debentures protection in the event of a highly leveraged or other
transaction involving the Corporation that may adversely affect holders of the
Junior Subordinated Debentures.
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all Junior Subordinated
Debentures not previously delivered to the Debenture Trustee for cancellation
(i) have become due and payable or (ii) will become due and payable at maturity
within one year, and the Corporation deposits or causes to be deposited with
the Debenture Trustee funds, in trust, for the purpose and in an amount
sufficient to pay and discharge the entire indebtedness on the Junior
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation, for the principal (and premium, if any) and interest to the date
of the deposit or to the Stated Maturity Date, as the case may be, then the
Indenture will cease to be of further effect (except as to the Corporation's
obligations to pay all other sums due pursuant to the Indenture and to provide
the officers' certificates and opinions of counsel described therein), and the
Corporation will be deemed to have satisfied and discharged the Indenture.
SUBORDINATION
The Indenture provides that the Junior Subordinated Debentures issued
thereunder will be subordinate and junior in right of payment to all Senior
Indebtedness. No payment of principal (including redemption payments), premium,
if any, or interest on the Junior Subordinated Debentures may be made at any
time when (i) any Senior Indebtedness is not paid when due, (ii) any applicable
grace period with respect to such default has ended and such default has not
been cured or waived or ceased to exist, or (iii) the maturity of any Senior
Indebtedness has been accelerated because of a default.
Upon any 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, all Senior Indebtedness must be paid
in full before the holders of the Junior Subordinated Debentures are entitled
to receive or retain any payment in respect thereof.
In the event of the acceleration of the maturity of Junior Subordinated
Debentures, the holders of all Senior Indebtedness outstanding at the time of
such acceleration will first be entitled to receive payment in full before the
holders of Junior Subordinated Debentures will be entitled to receive or retain
any payment in respect of the Junior Subordinated Debentures.
"Senior Indebtedness" shall mean all Indebtedness for Money Borrowed (as
defined herein), whether outstanding on the date of execution of the Indenture
or thereafter created, assumed or incurred, unless the terms thereof
specifically provide that it is not superior in right of payment to the Junior
Subordinated Debentures, and any deferrals, renewals or extensions of such
Senior Indebtedness.
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"Indebtedness for Money Borrowed" shall mean any obligation of, or any
obligation guaranteed by, the Corporation for the repayment of borrowed money,
whether or not evidenced by bonds, debentures, notes or other written
instruments, but shall not include (i) any trade accounts payable in the
ordinary course of business, (ii) any such indebtedness that by its terms
ranks pari passu with or junior in right of payment to the Junior Subordinated
Debentures, (iii) all other debt securities, and guarantees in respect of
those debt securities, issued to any other trust, or a trustee of such trust,
partnership or other entity affiliated with the Corporation that is a
financing vehicle of the Corporation (a "financing entity") in connection with
the issuance by such financing entity of equity securities or other securities
guaranteed by the Corporation pursuant to an instrument that ranks pari passu
with or junior in right of payment to the Guarantee, and (iv) any other
indebtedness that would otherwise qualify as "Indebtedness for Money Borrowed"
to the extent that such indebtedness by its terms ranks pari passu with or
junior in right of payment to any of the indebtedness described in (i), (ii)
or (iii).
The Corporation is a non-operating holding company and almost all of the
operating assets of the Corporation and its consolidated subsidiaries are
owned by such subsidiaries. The Corporation is a legal entity separate and
distinct from its banking and non-banking affiliates. The principal sources of
the Corporation's income are dividends and interest from its banking and non-
banking affiliates. The Corporation relies primarily on dividends from
subsidiaries to meet its obligations. The Banks are subject to certain
restrictions imposed by state and federal law on any loans or extensions of
credit to, investments in, or asset purchases from, the Corporation or its
non-banking affiliates. Such transactions by any of the Banks are generally
limited in amount as to the Corporation and as to each of such other
affiliates to 10% of such Bank's capital and surplus and as to the Corporation
and all of such other affiliates to an aggregate of 20% of such Bank's capital
and surplus. Such restrictions also prevent the Corporation and such other
affiliates from borrowing from the Banks unless the loans are secured in
specified amounts. In addition, there are state and federal regulatory
limitations on the payment of dividends directly or indirectly to the
Corporation from the Banks. Federal and state regulatory agencies also have
the authority to limit payment of dividends by the Corporation's bank and
thrift subsidiaries based on the capital adequacy of each such subsidiary and
the safety and soundness of each such subsidiary following payment of the
proposed dividend. Upon the consummation of the Merger, BANC ONE and its
subsidiaries (including the Corporation's subsidiaries) will continue to be
subject to such restrictions and limitations on the extension of credit,
borrowing, transaction amounts and payment of dividends.
Because the Corporation is a holding company, the right of the Corporation
to participate in any distribution of assets of any subsidiary, upon such
subsidiary's liquidation or reorganization or otherwise, is subject to the
prior claims of creditors of the subsidiary (including depositors, in the case
of the Banks), 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 not rely upon the assets of the Corporation's
subsidiaries for repayment of the Junior Subordinated Debentures. The
Indenture does not limit the incurrence or issuance of other indebtedness of
the Corporation, including Senior Indebtedness. See "--Subordination."
The Indenture places no limitation on the amount of additional Senior
Indebtedness that may be incurred by the Corporation. The Corporation expects
from time to time to incur additional indebtedness constituting Senior
Indebtedness.
GOVERNING LAW
The Indenture is, 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
Following the Exchange Offer and the qualification of the Indenture under
the Trust Indenture Act, the Debenture Trustee shall have and be subject to
all the duties and responsibilities specified with respect to an indenture
trustee under the Trust Indenture Act. Subject to such provisions, the
Debenture Trustee is under no
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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.
DESCRIPTION OF GUARANTEE
The Old Guarantee was executed and delivered by the Corporation concurrently
with the issuance by the Trust of the Old Capital Securities for the benefit
of the holders from time to time of the Old Capital Securities. Promptly after
the Expiration Date, the New Guarantee will be executed by the Corporation for
the benefit of the holders from time to time of the New Capital Securities.
The New Guarantee will be qualified under the Trust Indenture Act upon
effectiveness of this Registration Statement. This summary of certain
provisions of the Guarantee does not purport to be complete and is subject to,
and qualified in its entirety by reference to, all of the provisions of the
Guarantee, including the definitions therein of certain terms, and the Trust
Indenture Act. The Guarantee Trustee will hold the Guarantee for the benefit
of the holders of the Capital Securities.
GENERAL
The Corporation will irrevocably agree to pay in full on a subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined
below) to the holders of the Capital Securities, as and when due, regardless
of any defense, right of set-off or counterclaim that the Trust may have or
assert other than the defense of payment. The following payments with respect
to the Capital Securities, to the extent not paid by or on behalf of the Trust
(the "Guarantee Payments"), will be subject to the New Guarantee: (i) any
accumulated and unpaid Distributions required to be paid on Capital
Securities, to the extent that the Trust has funds on hand legally available
therefor at such time, (ii) the applicable Redemption Price with respect to
Capital Securities called for redemption, to the extent that the Trust has
funds on hand legally available therefor at such time, or (iii) upon a
voluntary or involuntary termination and liquidation of the Trust, the lesser
of (a) the Liquidation Distribution and (b) the amount of assets of the Trust
remaining available for distribution to holders of Capital Securities. The
Corporation's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Corporation to the holders of
the Capital Securities or by causing the Trust to pay such amounts to such
holders.
The New Guarantee will rank subordinate and junior in right of payment to
all Senior Indebtedness to the extent provided therein. See "--Status of New
Guarantee". Because the Corporation is a holding company, the right of the
Corporation to participate in any distribution of assets of any subsidiary
upon such subsidiary's liquidation or reorganization or otherwise, is subject
to the prior claims of creditors of that subsidiary, except to the extent the
Corporation may itself be recognized as a creditor of that subsidiary.
Accordingly, the Corporation's obligations under the New Guarantee will be
effectively subordinated to all existing and future liabilities of the
Corporation's subsidiaries, and claimants should look only to the assets of
the Corporation for payments thereunder. See "Description of Junior
Subordinated Debentures--General." The New Guarantee does not limit the
incurrence or issuance of other indebtedness of the Corporation, including
Senior Indebtedness, whether under the Indenture, any other indenture that the
Corporation may enter into in the future or otherwise.
The Corporation will, through the Guarantee, the Trust Agreement, the Junior
Subordinated Debentures and the Indenture, taken together, fully, irrevocably
and unconditionally guarantee all of the Trust's obligations under the Capital
Securities. No single document standing alone or operating in conjunction with
fewer than all of the other documents constitutes such guarantee. It is only
the combined operation of these documents that has the effect of providing a
full, irrevocable and unconditional guarantee of the Trust's obligations under
the Capital Securities. See "Relationship Among the Capital Securities, the
Junior Subordinated Debentures and the Guarantee."
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STATUS OF NEW GUARANTEE
The Guarantee will constitute an unsecured obligation of the Corporation and
will rank subordinate and junior in right of payment to all Senior
Indebtedness in the same manner as Junior Subordinated Debentures, except in
the case of a bankruptcy or insolvency proceeding in respect of the
Corporation, in which case the Guarantee will rank subordinate and junior in
right of payment to all liabilities (other than Other Guarantees) of the
Corporation.
The New Guarantee will rank pari passu with the Old Guarantee and with all
Other Guarantees issued by the Corporation. The New Guarantee will constitute
a guarantee of payment and not of collection (i.e., the guaranteed party may
institute a legal proceeding directly against the Corporation to enforce its
rights under the New Guarantee without first instituting a legal proceeding
against any other person or entity). The New Guarantee will be held for the
benefit of the holders of the New Capital Securities. The New Guarantee will
not be discharged except by payment of the Guarantee Payments in full to the
extent not paid by the Trust or upon distribution to the holders of the
Capital Securities of the Junior Subordinated Debentures. The Guarantee does
not place a limitation on the amount of additional Senior Indebtedness that
may be incurred by the Corporation. The Corporation expects from time to time
to incur additional indebtedness constituting Senior Indebtedness.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely affect
the rights of holders of the Capital Securities (in which case no vote will be
required), the New Guarantee may not be amended without the prior approval of
the holders of a majority of the Liquidation Amount of such outstanding
Capital Securities. The manner of obtaining any such approval will be as set
forth under "Description of Capital Securities--Voting Rights; Amendment of
the Trust Agreement." All guarantees and agreements contained in the Guarantee
Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Corporation and shall inure to the benefit of the
holders of the Capital Securities then outstanding.
EVENTS OF DEFAULT
An event of default under the New Guarantee will occur upon the failure of
the Corporation to perform any of its payment or other obligations thereunder.
The holders of a majority in Liquidation Amount of the Capital Securities will
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of the
New Guarantee or to direct the exercise of any trust or power conferred upon
the Guarantee Trustee under the New Guarantee.
Any holder of the Capital Securities may institute a legal proceeding
directly against the Corporation to enforce its rights under the New Guarantee
without first instituting a legal proceeding against the Trust, the Guarantee
Trustee or any other person or entity.
The Corporation, as guarantor, will be required to file annually with the
New Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
New Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of a
default by the Corporation in performance of the Guarantee, will undertake to
perform only such duties as are specifically set forth in the Guarantee and,
after default with respect to the Guarantee, must exercise the same degree of
care and skill as a prudent person would exercise or use in the conduct of his
or her own affairs. Subject to this provision, the Guarantee Trustee will be
under no obligation to exercise any of the powers vested in it by the
Guarantee at the request of any holder of the Capital Securities unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby.
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TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon full
payment of the applicable Redemption Price of the Capital Securities, upon
full payment of the Liquidation Amount payable upon liquidation of the Trust
or upon distribution of Junior Subordinated Debentures to the holders of the
Capital Securities. The Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of the Capital
Securities must restore payment of any sums paid under the Capital Securities
or the Guarantee.
GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the laws
of the State of New York.
DESCRIPTION OF OLD SECURITIES
The terms of the Old Securities are identical in all materials respects to
the New Securities, except that (i) the Old Securities have not been
registered under the Securities Act, are subject to certain restrictions on
transfer and are entitled to certain rights under the applicable Registration
Rights Agreement (which rights will terminate upon consummation of the
Exchange Offer, except under limited circumstances), (ii) the New Capital
Securities will not contain the $100,000 minimum liquidation amount transfer
restriction and certain other restrictions on transfer applicable to Old
Capital Securities, (iii) the New Capital Securities will not provide for any
increase in the Distribution rate thereon, (iv) the Junior Subordinated
Debentures will not contain the $100,000 minimum principal amount transfer
restriction and (v) the New Junior Subordinated Debentures will not provide
for any liquidated damages. The Old Securities provide that, in the event that
a registration statement relating to the Exchange Offer had not been filed by
May 19, 1997 and been declared effective by June 18, 1997, or, in certain
limited circumstances, in the event a shelf registration statement (the "Shelf
Registration Statement") with respect to the resale of the Old Capital
Securities is not declared effective by June 18, 1997, then interest would be
payable on the Old Junior Subordinated Debentures in an amount equal to 0.25%
per annum of the principal amount of the Old Junior Subordinated Debentures
and Distributions would accrue (in addition to the stated Distribution rate on
the Old Capital Securities) at the rate of 0.25% per annum on the liquidation
amount of the Old Capital Securities, for the period from the occurrence of
such event until such time as such required Exchange Offer is consummated or
any required Shelf Registration Statement is effective. The New Securities are
not, and upon consummation of the Exchange Offer the Old Securities will not
be, entitled to any such liquidated damages or Distributions. Accordingly,
holders of Old Capital Securities should review the information set forth
under "Risk Factors--Consequences of a Failure to Exchange Old Capital
Securities" and "Description of Capital Securities."
RELATIONSHIP AMONG THE CAPITAL SECURITIES, THE
JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Capital Securities
(to the extent the Trust has funds on hand legally available for the payment
of such Distributions) will be irrevocably guaranteed by the Corporation as
and to the extent set forth under "Description of Guarantee." Taken together,
the Corporation's obligations under the Junior Subordinated Debentures, the
Indenture, the Trust Agreement and the Guarantee will provide, in the
aggregate, a full, irrevocable and unconditional guarantee of payments of
Distributions and other amounts due on the Capital Securities. No single
document standing alone or operating in conjunction with fewer than all of the
other documents constitutes such guarantee. It is only the combined operation
of these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Trust's obligations under the Capital
Securities. If and to the extent that the Corporation does not make the
required payments on the Junior Subordinated Debentures, the Trust will not
have sufficient funds to make the related
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payments, including Distributions, on the Capital Securities. The Guarantee
will not cover any such payment when the Trust does not have sufficient funds
on hand legally available therefor. In such event, the remedy of a holder of
Capital Securities is to institute a Direct Action. The obligations of the
Corporation under the Guarantee will be subordinate and junior in right of
payment to all Senior Indebtedness.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on the
Junior Subordinated Debentures, such payments will be sufficient to cover
Distributions and other payments due on the Capital Securities, primarily
because: (i) the aggregate principal amount or Prepayment Price of the Junior
Subordinated Debentures will be equal to the sum of the liquidation amount or
Redemption Price, as applicable, of the Trust, (ii) the interest rate and
interest and other payment dates on the Junior Subordinated Debentures will
match the Distribution rate and Distribution and other payment dates for the
Trust Securities; (iii) the Corporation, as issuer of the Junior Subordinated
Debentures, shall pay for all and any costs, expenses and liabilities of the
Trust except the Trust's obligations to holders of Trust Securities under such
Trust Securities; and (iv) the Trust Agreement provides that the Trust is not
authorized to engage in any activity that is not consistent with the limited
purposes thereof.
ENFORCEMENT RIGHTS OF HOLDERS OF CAPITAL SECURITIES
A holder of any Capital Security may institute a legal proceeding directly
against the Corporation to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Guarantee Trustee, the Trust
or any other person or entity. A default or event of default under any Senior
Indebtedness would not constitute a default or Event of Default under the
Trust Agreement. However, in the event of payment defaults under, or
acceleration of, Senior Indebtedness, the subordination provisions of the
Indenture provide that no payments may be made in respect of the Junior
Subordinated Debentures until such Senior Indebtedness has been paid in full
or any payment default thereunder has been cured or waived. Failure to make
required payments on Junior Subordinated Debentures would constitute an Event
of Default under the Trust Agreement.
RIGHTS UPON TERMINATION
Unless the Junior Subordinated Debentures are distributed to holders of the
Trust Securities, upon any voluntary or involuntary termination and
liquidation of the Trust, the holders of the Trust Securities will be entitled
to receive, out of assets held by the Trust, the Liquidation Distribution in
cash. See "Description of Capital Securities--Liquidation of the Trust and
Distribution of Junior Subordinated Debentures." Upon any voluntary or
involuntary liquidation or bankruptcy of the Corporation, the Property
Trustee, as holder of the Junior Subordinated Debentures, would be a
subordinated creditor of the Corporation, subordinated in right of payment to
all Senior Indebtedness as set forth in the Indenture, but entitled to receive
payment in full of principal (and premium, if any) and interest, before any
stockholders of the Corporation receive payments or distributions. Since the
Corporation will be the guarantor under the Guarantee and will agree to pay
for all costs, expenses and liabilities of the Trust (other than the Trust's
obligations to the holders of its Trust Securities), the positions of a holder
of Trust Securities and a holder of Junior Subordinated Debentures relative to
stockholders of the Corporation in the event of liquidation or bankruptcy of
the Corporation are expected to be substantially the same.
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
GENERAL
The following is a summary of certain of the material United States federal
income tax consequences of the purchase, ownership and disposition of Capital
Securities held as capital assets by a holder who purchased such Old Capital
Securities upon initial issuance, except as discussed below. It does not deal
with special classes of holders such as banks, thrifts, real estate investment
trusts, regulated investment companies, insurance companies, dealers in
securities or currencies, tax-exempt investors, or persons that will hold the
Capital Securities as a position in a "straddle," as part of a "synthetic
security" or "hedge," as part of a "conversion transaction" or other
integrated investment, or as other than a capital asset. This summary also
does not address the tax consequences to persons that have a functional
currency other than the U.S. dollar or the tax consequences to shareholders,
partners or beneficiaries of a holder of Capital Securities. Further, it does
not include any description of any alternative minimum tax consequences or the
tax laws of any state or local government or of any foreign government that
may be applicable to the Capital Securities. This summary is based on the
Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations
promulgated thereunder, the administrative and judicial interpretations
thereof, as of the date hereof, all of which are subject to change, possibly
on a retroactive basis.
EXCHANGE OF CAPITAL SECURITIES
The exchange of Old Securities for New Securities pursuant to the Exchange
Offer should not be treated as an "exchange" for United States federal income
tax purposes because the New Securities should not be considered to differ
materially in kind or extent from the Old Securities and because the exchange
will occur by operation of the terms of the Old Securities. Accordingly, the
New Junior Subordinated Debentures should have the same issue price as the Old
Junior Subordinated Debentures, and a holder should have the same adjusted tax
basis and holding period in the New Capital Securities as the holder had in
the Old Capital Securities immediately before the exchange.
EFFECT OF THE MERGER
A holder of Capital Securities should not recognize gain or loss as a result
of the Merger.
MARKET DISCOUNT AND BOND PREMIUM
A holder who purchased Old Capital Securities subsequent to the initial
issuance of such securities, or a holder who purchases New Capital Securities,
may be subject to the "market discount" or "amortizable bond premium" rules
contained in the Code. Holders are urged to consult their tax advisors
regarding the applicability of such rules to their ownership of Capital
Securities.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES
The Corporation intends to take the position that the Junior Subordinated
Debentures will be classified for United States federal income tax purposes as
indebtedness of the Corporation under current law, and, by acceptance of a
Capital Security, each holder covenants to treat the Junior Subordinated
Debentures as indebtedness and the Capital Securities as evidence of an
indirect beneficial ownership interest in the Junior Subordinated Debentures.
No assurance can be given, however, that such position will not be challenged
by the Internal Revenue Service (the "IRS") or, if challenged, that such a
challenge will not be successful. The remainder of this discussion assumes
that the Junior Subordinated Debentures will be classified as indebtedness of
the Corporation for United States federal income tax purposes.
CLASSIFICATION OF THE TRUST
In connection with the issuance of the Old Capital Securities, Skadden,
Arps, Slate, Meagher & Flom LLP ("Tax Counsel") rendered its opinion generally
to the effect that, under then current law and assuming full compliance with
the terms of the Trust Agreement and the Indenture (and certain other
documents), and based on certain facts and assumptions contained in such
opinion, the Trust will be classified for United States federal income tax
purposes as a grantor trust and not as an association taxable as a
corporation.
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An opinion of Tax Counsel, however, is not binding on the IRS or the courts.
Holders of Capital Securities and prospective investors should note that no
rulings have been or are expected to be sought from the IRS with respect to
any of these issues and no assurance can be given that the IRS will not take
contrary positions. Moreover, no assurance can be given that the opinion
expressed herein will not be challenged by the IRS or, if challenged, that
such a challenge would not be successful.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under recently issued Treasury regulations (the "Regulations") applicable to
debt instruments issued on or after August 13, 1996, a "remote" contingency
that stated interest will not be timely paid will be ignored in determining
whether a debt instrument is issued with OID. The Corporation believes that
the likelihood of its exercising its option to defer payments of interest is
"remote" since exercising that option would, among other things, prevent the
Corporation from declaring dividends on any class of its equity securities.
Accordingly, the Corporation intends to take the position that the Junior
Subordinated Debentures will not be considered to be issued with OID and,
accordingly, stated interest on the Junior Subordinated Debentures generally
will be taxable to a holder as ordinary income at the time it is paid or
accrued in accordance with such holder's method of accounting.
Under the Regulations, if the Corporation were to exercise its option to
defer payments of interest, the Junior Subordinated Debentures would at that
time be treated as issued with OID, and all stated interest on the Junior
Subordinated Debentures would thereafter be treated as OID as long as the
Junior Subordinated Debentures remain outstanding. In such event, all of a
holder's taxable interest income with respect to the Junior Subordinated
Debentures would thereafter be accounted for on an economic accrual basis
regardless of such holder's method of tax accounting, and actual distributions
of stated interest would not be reported as taxable income. Consequently, a
holder of Capital Securities would be required to include in gross income OID
even though the Corporation would not make actual cash payments during an
Extension Period. Moreover, under the Regulations, if the option to defer the
payment of interest was determined not to be "remote," the Junior Subordinated
Debentures would be treated as having been originally issued with OID. In such
event, all of a holder's taxable interest income with respect to the Junior
Subordinated Debentures would be accounted for on an economic accrual basis
regardless of such holder's method of tax accounting, and actual distributions
of stated interest would not be reported as taxable income.
The Regulations have not yet been addressed in any rulings or other
interpretations by the IRS, and it is possible that the IRS could take a
position contrary to the interpretation herein.
Because income on the Capital Securities will constitute interest or OID,
corporate holders of the Capital Securities will not be entitled to a
dividends-received deduction with respect to any income recognized with
respect to the Capital Securities.
RECEIPT OF JUNIOR SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF THE
TRUST
The Corporation will have the right at any time to liquidate the Trust and
cause the Junior Subordinated Debentures to be distributed to the holders of
the Trust Securities. Under current law, such a distribution, for United
States federal income tax purposes, would be treated as a nontaxable event to
each holder, and each holder would receive an aggregate tax basis in the
Junior Subordinated Debentures equal to such holder's aggregate tax basis in
its Capital Securities. A holder's holding period in the Junior Subordinated
Debentures so received in liquidation of the Trust would include the period
during which the Capital Securities were held by such holder. If, however, the
Trust is characterized for United States federal income tax purposes as an
association taxable as a corporation at the time of its dissolution, the
distribution of the Junior Subordinated Debentures may constitute a taxable
event to holders of Capital Securities and a holder's holding period in the
Junior Subordinated Debentures would begin on the date such Junior
Subordinated Debentures were received.
Under certain circumstances described herein (see "Description of Capital
Securities"), the Junior Subordinated Debentures may be redeemed for cash and
the proceeds of such redemption distributed to holders in redemption of their
Capital Securities. Under current law, such a redemption would, for United
States federal
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income tax purposes, constitute a taxable disposition of the redeemed Capital
Securities, and a holder could recognize gain or loss as if it sold such
redeemed Capital Securities for cash. See "--Sales of Capital Securities."
SALES OF CAPITAL SECURITIES
A holder that sells Capital Securities (including any redemption of the
Capital Securities by the Corporation) will recognize gain or loss equal to
the difference between its adjusted tax basis in the Capital Securities and
the amount realized on the sale of such Capital Securities (other than with
respect to accrued and unpaid interest which has not yet been included in
income, which will be treated as ordinary income). A holder's adjusted tax
basis in the Capital Securities generally will be the amount paid by such
holder for the Capital Securities increased by OID (if any) previously
includable in such holder's gross income to the date of disposition and
decreased by payments (if any) received on the Capital Securities in respect
of OID. Such gain or loss generally will be a capital gain or loss and
generally will be long-term capital gain or loss if the Capital Securities
have been held for more than one year.
The Capital Securities may trade at a price that does not accurately reflect
the value of accrued but unpaid interest with respect to the underlying Junior
Subordinated Debentures. A holder who uses the accrual method of accounting
for tax purposes (and a cash method holder, if the Junior Subordinated
Debentures are deemed to have been issued with OID) who disposes of his
Capital Securities between record dates for payments of distributions thereon
will be required to include accrued but unpaid interest on the Junior
Subordinated Debentures through the date of disposition in income as ordinary
income (i.e., interest or, possibly, OID), and to add such amount to his
adjusted tax basis in his pro rata share of the underlying Junior Subordinated
Debentures deemed disposed of. To the extent the selling price is less than
the holder's adjusted tax basis (which will include all accrued but unpaid
interest) a holder will recognize a capital loss. Subject to certain limited
exceptions, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes.
PROPOSED LEGISLATION
On February 6, 1997, as part of President Clinton's Fiscal 1998 Budget
Proposal, the United States Treasury Department proposed legislation that
would, among other things, deny an issuer a deduction for United States
federal income tax purposes for the payment of interest on instruments with
characteristics similar to the Junior Subordinated Debentures. If the proposed
legislation were enacted in its current form, it is not expected to apply to
the Junior Subordinated Debentures since the proposed effective date for this
provision is the date of first committee action. There can be no assurances,
however, that the proposed legislation, if enacted, or similar legislation
enacted after the date hereof would not adversely affect the tax treatment of
the Junior Subordinated Debentures, resulting in a Tax Event. The occurrence
of a Tax Event may result in the redemption of the Junior Subordinated
Debentures for cash, in which event the holders of the Capital Securities
would receive cash in redemption of their Capital Securities. See "Description
of Capital Securities--Redemption" and "Description of Junior Subordinated
Debentures--Special Event Prepayment."
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is not a U.S.
Holder for United States federal income tax purposes. A "U.S. Holder" is a
holder of Capital Securities who or which is (i) a citizen or individual
resident of the United States for federal income tax purposes, (ii) a
corporation or partnership created or organized in or under the laws of the
United States or any political subdivision thereof, (iii) an estate the income
of which is includable in its gross income for federal income tax purposes
without regard to its source or (iv) a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more United States trustees have the authority to control all
substantial decisions of the trust. Under present United States federal income
tax laws: (i) payments by the Trust or any of its paying agents to any holder
of a Capital Security who or which is a United States Alien Holder will not be
subject to United States federal withholding tax; provided that, (a) the
beneficial owner of the Capital Security does not actually or constructively
own 10 percent or more of the total
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combined voting power of all classes of stock of the Corporation entitled to
vote, (b) the beneficial owner of the Capital Security is not a controlled
foreign corporation that is related to the Corporation through stock
ownership, and (c) either (A) the beneficial owner of the Capital Security
certifies to the Trust or its agent, under penalties of perjury, that it is
not a United States holder and provides its name and address or (B) a
securities clearing organization, bank or other financial institution that
holds customers' securities in the ordinary course of its trade or business (a
"Financial Institution"), and holds the Capital Security in such capacity,
certifies to the Trust or its agent, under penalties of perjury, that such
statement has been received from the beneficial owner by it or by a Financial
Institution between it and the beneficial owner and furnishes the Trust or its
agent with a copy thereof; and (ii) a United States Alien Holder of a Capital
Security will not be subject to United States federal withholding tax on any
gain realized upon the sale or other disposition of a Capital Security.
INFORMATION REPORTING TO HOLDERS
Generally, income on the Capital Securities will be reported to holders on
Forms 1099, which forms should be mailed to holders of Capital Securities by
January 31 following each calendar year.
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, the Capital Securities may
be subject to a "backup" withholding tax of 31 percent unless the holder
complies with certain identification requirements. Any withheld amounts will
be allowed as a credit against the holder's United States federal income tax,
provided the required information is provided to the IRS.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A
HOLDER'S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH
RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF THE CAPITAL SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER
STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES
IN UNITED STATES FEDERAL OR OTHER TAX LAWS.
ERISA CONSIDERATIONS
Each of the Corporation (or, after the Merger, BANC ONE) (the obligor with
respect to the Junior Subordinated Debentures held by the Trust), and its
affiliates and the Property Trustee may be considered a "party in interest"
(within the meaning of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) or a "disqualified person" (within the meaning of Section
4975 of the Code) with respect to many employee benefit plans ("Plans") that
are subject to ERISA. Any purchaser proposing to acquire New Capital
Securities with assets of any Plan should consult with its counsel. The
purchase and/or holding of Capital Securities by a Plan that is subject to the
fiduciary responsibility provisions of ERISA or the prohibited transaction
provisions of Section 4975 of the Code (including individual retirement
arrangements and other plans described in Section 4975(e)(1) of the Code) and
with respect to which the Corporation, the Property Trustee or any affiliate
is a service provider (or otherwise is a party in interest or a disqualified
person) may constitute or result in a prohibited transaction under ERISA or
Section 4975 of the Code, unless such Capital Securities are acquired pursuant
to and in accordance with an applicable exemption, such as Prohibited
Transaction Class Exemption ("PTCE") 84-14 (an exemption for certain
transactions determined by an independent qualified professional asset
manager), PTCE 91-38 (an exemption for certain transactions involving bank
collective investment funds), PTCE 90-1 (an exemption for certain transactions
involving insurance company pooled separate accounts), PTCE 95-60 (an
exemption for transactions involving certain insurance company general
accounts) or PTCE 96-23 (an exemption for certain transactions determined by
an in-house asset manager). In addition, a Plan fiduciary considering the
purchase of New Capital Securities should be aware that the assets of the
Trust may be considered "plan assets" for ERISA purposes. In such event,
service providers with respect to
65
<PAGE>
the assets of the Trust may become parties in interest or disqualified persons
with respect to investing Plans, and certain discretionary authority exercised
with respect to the Junior Subordinated Debentures by such persons could be
deemed to constitute a prohibited transaction under ERISA or the Code. Because
of such potential prohibited transactions, each investing Plan, by purchasing
the Capital Securities, will be deemed to have directed the Trust to invest in
the Junior Subordinated Debentures and to have appointed the Property Trustee.
PLAN OF DISTRIBUTION
Each Participating Broker-Dealer that receives New Capital Securities for
its own account in connection with the Exchange Offer must acknowledge that it
will deliver a prospectus in connection with any resale of such New Capital
Securities. This Prospectus, as it may be amended or supplemented from time to
time, may be used by Participating Broker-Dealers during the period referred
to below in connection with resales of New Capital Securities received in
exchange for Old Capital Securities if such Old Capital Securities were
acquired by such Participating Broker-Dealers for their own accounts as a
result of market-making activities or other trading activities. The
Corporation and the Trust have agreed that this Prospectus, as it may be
amended or supplemented from time to time, may be used by a Participating
Broker-Dealer in connection with resales of such New Capital Securities for a
period ending 90 days after the Expiration Date (subject to extension under
certain limited circumstances described herein) or, if earlier, when all such
New Capital Securities have been disposed of by such Participating Broker-
Dealer. However, a Participating Broker-Dealer who intends to use this
Prospectus in connection with the resale of New Capital Securities received in
exchange for Old Capital Securities pursuant to the Exchange Offer must notify
the Corporation or the Trust, or cause the Corporation or the Trust to be
notified, on or prior to the Expiration Date, that it is a Participating
Broker-Dealer. Such notice may be given in the space provided for that purpose
in the Letter of Transmittal or may be delivered to the Exchange Agent at one
of the addresses set forth herein under "The Exchange Offer--Exchange Agent."
See "The Exchange Offer--Resales of Capital Securities."
The Corporation or the Trust will not receive any cash proceeds from the
issuance of the New Capital Securities offered hereby. New Capital Securities
received by Participating Broker-Dealers for their own accounts in connection
with the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the New Capital Securities or a combination
of such methods of resale, at market prices prevailing at the time of resale,
at prices related to such prevailing market prices or at negotiated prices.
Any such resale may be made directly to purchasers or to or through brokers or
dealers who may receive compensation in the form of commissions or concessions
from any such broker-dealer and/or the purchasers of any such New Capital
Securities.
Any Participating Broker-Dealer that resells New Capital Securities that
were received by it for its own account in connection with the Exchange Offer
and any broker or dealer that participates in a distribution of such New
Capital Securities may be deemed to be an "underwriter" within the meaning of
the Securities Act, and any profit on any such resale of New Capital
Securities and any commissions or concessions received by any such persons may
be deemed to be underwriting compensation under the Securities Act. The Letter
of Transmittal states that by acknowledging that it will deliver and by
delivering a prospectus, a Participating Broker-Dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of 90 days after the Expiration Date, the Trust and the
Corporation will promptly send additional copies of this Prospectus and any
amendment or supplement to this Prospectus to any Participating Broker-Dealer
that requests such documents in the Letter of Transmittal. The Corporation has
agreed to pay all expenses incident to the Exchange Offer other than
commissions or concessions of any brokers or dealers and will indemnify the
holders of the Capital Securities (including any broker-dealers) against
certain liabilities, including liabilities under the Securities Act.
66
<PAGE>
VALIDITY OF NEW CAPITAL SECURITIES
The validity of the New Capital Securities, as obligations of the Trust, and
the validity of the New Guarantee and the New Junior Subordinated Debentures,
as obligations of the Corporation, will be passed upon for the Trust and the
Corporation by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York.
Certain matters relating to United States federal income tax considerations
will also be passed upon for the Corporation by Skadden, Arps, Slate, Meagher
& Flom LLP, New York, New York.
EXPERTS
The consolidated financial statements of the Corporation included in
Amendment No. 1 on Form 10-K/A, dated April 24, 1997, to the Corporation's
Annual Report on Form 10-K for the fiscal year ended June 30, 1996, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included 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.
The consolidated financial statements of BANC ONE and its subsidiaries
incorporated in this Registration Statement by reference to the BANC ONE
Annual Report on Form 10-K for the year ended December 31, 1996 (as amended by
Amendment No. 1 on Form 10-K/A filed on March 21, 1997) have been so
incorporated in reliance on the report dated February 21, 1997 of Coopers &
Lybrand L.L.P., independent accountants, given on the authority of said firm
as experts in auditing and accounting.
67
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As authorized by Section 145 of the General Corporation Law of the State of
Delaware, each director and officer of the Corporation may be indemnified by
the Corporation against expenses (including attorney's fees, judgments, fines
and amounts paid in settlement) actually and reasonably incurred in connection
with the defense or settlement of any threatened, pending or completed legal
proceedings in which he is involved by reason of the fact that he is or was a
director or officer of the Company if he acted in good faith and in a manner
that he reasonably believed to be in or not opposed to the best interests of
the Corporation and, with respect to any criminal action or proceeding, if he
had no reasonable cause to believe that his conduct was unlawful. If the legal
proceeding, however, is by or in the right of the Corporation, the director or
officer may not be indemnified in respect of any claim, issue or matter as to
which he shall have been adjudged to be liable for negligence or misconduct in
the performance of his duty to the Corporation unless a court determines
otherwise.
In addition, the Corporation maintains a directors' and officers' liability
policy.
Article Seventh of the Restated Certificate of Incorporation of the
Corporation and Article IX of the Bylaws of the Corporation provide that, to
the fullest extent permitted by law, directors of the Corporation will not be
liable for monetary damages to the Corporation or its stockholders for
breaches of their fiduciary duties.
II-1
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
EXHIBIT
<TABLE>
<C> <S>
2.1 Agreement and Plan of Merger, dated January 19, 1997, between BANC ONE
CORPORATION and First USA, Inc., filed as exhibit 2 to the First USA,
Inc. Current Report on Form 8-K filed January 28, 1997 and incorporated
by reference herein
2.2 Amendment, dated April 23, 1997, to Agreement and Plan of Merger, dated
January 19, 1997, between BANC ONE CORPORATION and First USA, Inc.,
filed as Exhibit 2.2 to the BANC ONE CORPORATION Current Report on Form
8-K filed April 24, 1997 and incorporated by reference herein
4.1 Indenture of First USA, Inc., dated as of December 20, 1996, between
First USA, Inc., and The Bank of New York, as trustee, relating to the
Junior Subordinated Debentures, filed as Exhibit 4.6 to First USA,
Inc.'s Quarterly Report on 10-Q for the Fiscal Quarter ended December
31, 1996 (as amended by Amendment No. 1 on Form 10-Q/A filed on April
24, 1997), and incorporated by reference herein
4.2 Form of Certificate of Junior Subordinated Debenture (included as
Exhibit A to Exhibit 4.1)
4.3+ Certificate of Trust of First USA Capital Trust I
4.4+ Declaration of Trust of First USA Capital Trust I
4.5 Amended and Restated Declaration of Trust for First USA Capital Trust I,
dated as of December 20, 1996, among the administrative trustees, The
Bank of New York (Delaware), as Delaware trustee, The Bank of New York,
as property trustee and First USA, Inc., as sponsor, filed as exhibit
4.8 to First USA, Inc.'s Quarterly Report on Form 10-Q for the Fiscal
Quarter ended December 31, 1996 (as amended by Amendment No. 1 on Form
10-Q/A filed on April 24, 1997), and incorporated by reference herein
4.6 Form of Capital Security Certificate for First USA Capital Trust I
(included as Exhibit A-1 to Exhibit 4.5)
4.7+ Form of Guarantee of First USA, Inc. relating to the New Capital
Securities
4.8 Registration Rights Agreement, dated as of December 20, 1996, among
First USA, Inc., First USA Capital Trust I and Merrill Lynch, Pierce,
Fenner & Smith Incorporated and J.P. Morgan Securities Inc., as initial
purchasers, filed as Exhibit 10.10 to First USA, Inc.'s Quarterly Report
on Form 10-Q for the Fiscal Quarter ended December 31, 1996 (as amended
by Amendment No. 1 on Form 10-Q/A filed on April 24, 1997) and
incorporated by reference herein
4.10 Revolving Credit Agreement dated June 30, 1994 among First USA
Financial, Inc., First USA Merchant Services, Inc., the lenders listed
therein and NationsBank of Texas, N.A., as Agent, including the form of
Promissory Notes thereto, filed as Exhibit 4.1 to First USA, Inc.'s
Annual Report on Form 10-K for the Fiscal Year ended June 30, 1994 and
incorporated by reference herein
4.11 Form of Global Bank Note, Floating Rate, filed as Exhibit 4.4.4 to First
USA, Inc.'s Quarterly Report on Form 10-Q for the Fiscal Quarter ended
March 31, 1994 and incorporated by reference herein
4.12 Form of Global Bank Note, Fixed Rate, filed as Exhibit 4.4.5 to the
First USA, Inc.'s Quarterly Report on Form 10-Q for the Fiscal Quarter
ended March 31, 1994 and incorporated by reference herein
5.1* Opinion of Skadden, Arps, Slate, Meagher & Flom LLP to as to legality of
the New Junior Subordinated Debentures and the New Guarantee to be
issued by First USA, Inc. and the New Capital Securities to be issued by
First USA Capital Trust I
8.1* Opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special tax
counsel, as to certain federal income tax matters
12.1* Computation of ratio of earnings to fixed charges
23.1* Consent of Ernst & Young LLP
23.2* Consent of Coopers & Lybrand L.L.P.
23.3* Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit
5.1 and Exhibit 8.1)
</TABLE>
II-2
<PAGE>
<TABLE>
<C> <S>
24.1+ Power of Attorney of certain officers and directors of First USA, Inc.
(included on signature pages hereto)
25.1+ Form T-1 Statement of Eligibility of The Bank of New York to act as
trustee under the Indenture
25.2+ Form T-1 Statement of Eligibility of The Bank of New York to act as
trustee under the Amended and Restated Declaration of Trust of First USA
Capital Trust I
25.3+ Form T-1 Statement of Eligibility of The Bank of New York under the New
Guarantee for the benefit of the holders of New Capital Securities of
First USA Capital Trust I
99.1* Form of Letter of Transmittal
99.2* Form of Notice of Guaranteed Delivery
99.3* Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees
99.4* Form of Letter to Clients
</TABLE>
- --------
* Filed herewith.
+ Filed previously.
ITEM 22. UNDERTAKINGS
Each of the undersigned Registrants hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of a Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d)
of the Securities Exchange Act of 1934) that is incorporated by reference in
this Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
each undersigned Registrant pursuant to the foregoing provisions, or
otherwise, each Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by each undersigned Registrant of expenses incurred or paid by a
director, officer of controlling person of each Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, each Registrant will, unless in the opinion of its counsel the
matter has been settled by the controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
The undersigned Registrants hereby undertake to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
The undersigned Registrants hereby undertake to supply by means of a post-
effective amendment all information concerning a transaction, and the company
being acquired or involved therein, that was not the subject of and included
in the registration statement when it became effective.
II-3
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, First USA, Inc.
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas, on May 19, 1997.
First USA, Inc.
/s/ Philip E. Taken
By___________________________________
PHILIP E. TAKEN
Senior Vice President andGeneral
Counsel
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on May 19, 1997.
SIGNATURE TITLE
Chairman, Chief ExecutiveOfficer and
* Director(Chief Executive Officer)
- -------------------------------------
(JOHN C. TOLLESON)
President and Director
*
- -------------------------------------
(RICHARD W. VAGUE)
Vice Chairman and ChiefFinancial
* Officer(Principal Financial
- ------------------------------------- andAccounting Officer)
(JACK M. ANTONINI)
Director
*
- -------------------------------------
(GERALD S. ARMSTRONG)
Director
*
- -------------------------------------
(GENE H. BISHOP)
Director
*
- -------------------------------------
(RUPINDER S. SIDHU)
Director
*
- -------------------------------------
(ROGER T. STAUBACH)
/s/ Philip E. Taken
*By_____________________________
PHILIP E. TAKEN
*Attorney-in-fact
II-4
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, FIRST USA CAPITAL
TRUST I CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
OF THE REQUIREMENTS FOR FILING ON FORM S-4 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF DALLAS, STATE OF TEXAS, ON MAY 19, 1997.
First USA Capital Trust I
/s/ Peter W. Atwater,
By___________________________________
PETER W. ATWATER,
AS ADMINISTRATIVE TRUSTEE
/s/ Jack M. Antonini,
By___________________________________
JACK M. ANTONINI,
AS ADMINISTRATIVE TRUSTEEE
/s/ Philip E. Taken,
By___________________________________
PHILIP E. TAKEN,
AS ADMINISTRATIVE TRUSTEE
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
----------- ----------- ----
<C> <S> <C>
2.1 Agreement and Plan of Merger, dated January 19, 1997,
between BANC ONE CORPORATION and First USA, Inc., filed as
Exhibit 2 to the First USA, Inc. Current Report on Form 8-K
filed January 28, 1997 and incorporated by reference herein
2.2 Amendment, dated April 23, 1997, to Agreement and Plan of
Merger, dated January 19, 1997, between BANC ONE
CORPORATION and First USA, Inc., filed as Exhibit 2.2 to
the BANC ONE CORPORATION Current Report on Form 8-K filed
April 24, 1997 and incorporated by reference herein
4.1 Indenture of First USA, Inc., dated as of December 20,
1997, between First USA, Inc. and The Bank of New York, as
trustee, relating to the Junior Subordinated Debentures,
filed as Exhibit 4.6 to First USA, Inc.'s Quarterly Report
on Form 10-Q for the Fiscal Quarter ended December 31, 1996
(as amended by Amendment No. 1 on Form 10-Q/A filed on
April 24, 1997), and incorporated by reference herein
4.2 Form of Certificate of Junior Subordinated Debenture
(included as Exhibit A to Exhibit 4.1)
4.3+ Certificate of Trust of First USA Capital Trust I
4.4+ Declaration of Trust of First USA Capital Trust I
4.5 Amended and Restated Declaration of Trust for First USA
Capital Trust I, dated as of December 20, 1996, among the
administrative trustees, The Bank of New York (Delaware) as
Delaware trustee, The Bank of New York, as property trustee
and First USA, Inc., as sponsor, filed as Exhibit 4.8 to
First USA, Inc.'s Quarterly Report on Form 10-Q for the
Fiscal Quarter ended December 31, 1996 (as amended by
Amendment No. 1 on Form 10-Q/A filed on April 24, 1997),
and incorporated by reference herein
4.6 Form of Capital Security Certificate for First USA Capital
Trust I (included as Exhibit A-1 to Exhibit 4.5)
4.7+ Form of New Guarantee of First USA, Inc. relating to the
New Capital Securities
4.8 Registration Rights Agreement, dated as of December 20,
1996, among First USA, Inc., First USA Capital Trust I and
Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P.
Morgan Securities Inc., as initial purchasers, filed as
Exhibit 10.10 to First USA, Inc.'s Quarterly Report on Form
10-Q for the Fiscal Quarter ended December 31, 1996 (as
amended by Amendment No. 1 on Form 10-Q/A filed on April
24, 1997), and incorporated by reference herein
4.10 Revolving Credit Agreement dated June 30, 1994 among First
USA Financial, Inc., First USA Merchant Services, Inc., the
lenders listed therein and NationsBank of Texas, N.A., as
Agent, including the form of Promissory Notes thereto,
filed as Exhibit 4.1 to First USA, Inc.'s Annual Report on
Form 10-K for the Fiscal Year ended June 30, 1994 and
incorporated by reference herein
4.11 Form of Global Bank Note, Floating Rate, filed as Exhibit
4.4.4 to First USA, Inc.'s Quarterly Report on Form 10-Q
for the Fiscal Quarter ended March 31, 1994 and
incorporated by reference herein
4.12 Form of Global Bank Note, Fixed Rate, filed as Exhibit
4.4.5 to First USA, Inc.'s Quarterly Report on Form 10-Q
for the Fiscal Quarter ended March 31, 1994 and
incorporated by reference herein
5.1* Opinion and consent of Skadden, Arps, Slate, Meagher & Flom
LLP as to legality of the New Junior Subordinated
Debentures and the New Guarantee to be issued by First USA,
Inc. and the New Capital Securities to be issued by First
USA Capital Trust I
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
----------- ----------- ----
<C> <S> <C>
8.1* Opinion of Skadden, Arps, Slate, Meagher & Flom LLP,
special tax counsel, as to certain federal income tax
matters
12.1* Computation of ratio of earnings to fixed charges
23.1* Consent of Ernst & Young LLP
23.2* Consent of Coopers & Lybrand L.L.P.
23.3* Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.1 and Exhibit 8.1)
24.1+ Power of Attorney of certain officers and directors of
First USA, Inc.
25.1+ Form T-1 Statement of Eligibility of The Bank of New York
to act as trustee under the Indenture
25.2+ Form T-1 Statement of Eligibility of The Bank of New York
to act as trustee under the Amended and Restated
Declaration of Trust of First USA Capital Trust I
25.3+ Form T-1 Statement of Eligibility of The Bank of New York
under the New Guarantee for the benefit of the holders of
New Capital Securities of First USA Capital Trust I
99.1* Form of Letter of Transmittal
99.2* Form of Notice of Guaranteed Delivery
99.3* Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees
99.4* Form of Letter to Clients
</TABLE>
- --------
* Filed herewith.
+ Filed previously.
2
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF SKADDEN, ARPS, SLATE, MEAGER & FLOM LLP]
May 19, 1997
First USA Capital Trust I
First USA, Inc.
c/o First USA, Inc.
1601 Elm Street
Dallas, Texas 75201
Re: First USA, Inc. and First USA Capital
Trust I Registration Statement on Form S-4
------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to First USA, Inc., a Delaware
corporation (the "Company"), and First USA Capital Trust I, a business trust
formed under the Business Trust Act of the State of Delaware (Chapter 38, Title
12, of the Delaware Code, 12 Del. L. Sec. 3801 et. seq.) (the "Trust"), in
--- ----
connection with the preparation of the registration statement on Form S-4 filed
by the Company and the Trust with respect to the registration pursuant to an
exchange offer (the "Exchange Offer") under the Securities Act of 1933, as
amended (the "Act"), of (i) $200,000,000 aggregate liquidation amount of 9.33%
capital securities, liquidation amount of $1,000 per capital security (the
"Series B Capital Securities"), to be issued by the Trust, (ii) the guarantee by
the Company of the Series B Capital Securities with respect to payments of cash
distributions and payments upon liquidation, redemption and otherwise pursuant
to the Series B Guarantee Agreement to be entered into between the Company and
The Bank of New York, as capital securities guarantee trustee (the "Series B
Guarantee Agreement"), and (iii) $200,000,000 aggregate principal amount of
9.33% Series B Junior Subordinated Deferrable Interest Debentures due January
15, 2027 (the "Series B Junior Subordinated Debentures") to be issued by the
Company.
<PAGE>
First USA Capital Trust I
First USA, Inc.
May 19, 1997
Page 2
This opinion is being furnished in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Act.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the registration
statement on Form S-4 (File No. 333-26669) as filed by the Company and the Trust
with the Securities and Exchange Commission (the "Commission") on May 8, 1997
under the Act, and Amendment No. 1 thereto filed with the Commission on May 19,
1997 (such registration statement, as so amended, being hereinafter referred to
as the "Registration Statement"), (ii) the Certificate of Trust of the Trust
filed with the Secretary of State of the State of Delaware on December 11, 1996,
(iii) an executed copy of the Amended and Restated Declaration of Trust of the
Trust, dated as of December 20, 1996 (the "Declaration") among Peter W. Atwater,
Jack M. Antonini and Philip E. Taken, as administrative trustees, The Bank of
New York, as property trustee (the "Property Trustee"), and The Bank of New York
(Delaware), as Delaware trustee, (iv) the form of the Series B Capital
Securities, (v) an executed copy of the Registration Rights Agreement, dated as
of December 20, 1996 (the "Registration Rights Agreement"), among the Company,
the Trust and each of Merrill Lynch, Pierce, Fenner & Smith Incorporated and
J.P. Morgan Securities Inc., (vi) an executed copy of the Indenture, dated as of
December 20, 1996 (the "Indenture"), between The Bank of New York, as Indenture
Trustee, and the Company, (vii) the form of the Series B Junior Subordinated
Debentures, (viii) the form of the Series B Guarantee Agreement, (ix) the
Restated Certificate of Incorporation of the Company and the By-Laws of the
Company, each as amended to the date hereof and (x) certain resolutions of the
Company, dated December 11,
<PAGE>
First USA Capital Trust I
First USA, Inc.
May 19, 1997
Page 3
1996, relating to the creation of the Trust, the issuance of the Series B
Capital Securities, the Exchange Offer and other matters. We have also examined
originals or copies, certified or otherwise identified to our satisfaction, of
such other documents, certificates and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. In making our
examination of documents executed by parties other than the Company and the
Trust, we have assumed that such parties had the power, corporate or other, to
enter into and perform all obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or other, and execution and
delivery by such parties of such documents and the validity and binding effect
thereof on such parties. As to any facts material to the opinions expressed
herein which we did not independently establish or verify, we have relied upon
oral or written statements and representations of officers, trustees and other
representatives of the Company, the Trust and others.
Members of our firm are admitted to the Bars of the States of New York
and Delaware, and we do not express any opinion as to the laws of any
jurisdiction other than the States of New York and Delaware.
Based upon and subject to the foregoing, and further assuming that the
Registration Statement will become effective and the Series B Guarantee
Agreement, the
<PAGE>
First USA Capital Trust I
First USA, Inc.
May 19, 1997
Page 4
Declaration and the Indenture will be qualified under the Trust Indenture Act of
1939, as amended, we are of the opinion that:
1. The Series B Guarantee Agreement has been duly authorized by the
Company, and when the Series B Guarantee Agreement is duly executed and
delivered by the Company and issued in the Exchange Offer as contemplated by the
Registration Rights Agreement and the Registration Statement, the Series B
Guarantee Agreement will constitute a valid and binding obligation of the
Company in favor of the holders of Series B Capital Securities, enforceable
against the Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by (1) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws now or
hereafter in effect relating to creditors' rights generally and (2) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity).
2. The Series B Junior Subordinated Debentures have been duly authorized
for issuance by the Company, and when the Series B Junior Subordinated
Debentures are duly executed, authenticated and issued in accordance with the
Indenture and delivered and issued in the Exchange Offer as contemplated by the
Registration Rights Agreement and the Registration Statement, the Series B
Junior Subordinated Debt Securities will constitute valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, except to the extent that enforcement thereof may be limited by (1)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws now or hereafter in effect relating to creditors' rights
generally and (2) general principles of equity (regard-
<PAGE>
First USA Capital Trust I
First USA, Inc.
May 19, 1997
Page 5
less of whether enforceability is considered in a proceeding at law or in
equity).
3. The Series B Capital Securities have been duly authorized for issuance
by the Trust, and when the Series B Capital Securities are duly executed,
authenticated and issued in accordance with the Declaration and delivered and
issued in the Exchange Offer as contemplated by the Registration Rights
Agreement and the Registration Statement, the Series B Capital Securities will
represent, subject to the qualifications set forth in paragraph 4 below, fully
paid and nonassessable undivided beneficial interests in the assets of the Trust
and will entitle the holders thereof to the benefits of the Declaration except
to the extent that enforcement of the Declaration may be limited by (1)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws now or hereafter in effect relating to creditors' rights
generally and (2) general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).
4. The holders of the Series B Capital Securities will be entitled to the
same limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware. We bring to your attention, however, that the holders of the Series
B Capital Securities may be obligated, pursuant to the Declaration, to (i)
provide indemnity and/or security in connection with, and pay taxes or
governmental charges arising from, transfers of Series B Capital Securities and
the issuance of replacement Series B Capital Securities and (ii) provide
security and indemnity in connection with requests of or directions to the
Property Trustee to exercise its rights and powers under the Declaration.
<PAGE>
First USA Capital Trust I
First USA, Inc.
May 19, 1997
Page 6
We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement. We also consent to the reference to
our firm under the caption "Validity of New Capital Securities" in the
prospectus which forms a part of the Registration Statement. In giving this
consent, we do not thereby admit that we are included in the category of persons
whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission. This opinion is expressed as of the date hereof,
and we disclaim any undertaking to advise you of any subsequent changes in the
facts stated or assumed herein or of any subsequent changes in applicable law.
Very truly yours,
/s/ Skadden, Arps, Slate,
Meagher & Flom LLP
<PAGE>
EXHIBIT 8.1
[LETTERHEAD OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP]
May 19, 1997
First USA, Inc.
1601 Elm Street
Dallas, Texas 75201
First USA Capital Trust I
1601 Elm Street
Dallas, Texas 75201
Re: Registration Statement on Form S-4
Registration No. 333-26669
---------------------------------
Ladies and Gentlemen:
We have acted as counsel for First USA, Inc., a Delaware corporation
(the "Company"), and First USA Capital Trust I, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"), in connection with
the above-captioned registration statement on Form S-4 (the "Registration
Statement") filed with the Securities and Exchange Commission (the "Commission")
for the purpose of (i) registering (a) the guarantee by the Company of 200,000
of the Trust's 9.33% Series B Capital Securities, liquidation amount of $1,000
per capital security (the "Exchange Capital Securities") with respect to
distributions and payments upon liquidation, redemption and otherwise (the
"Exchange Guarantee"), (b) $200,000,000 principal amount of 9.33% Series B
Junior Subordinated Deferrable Interest Debentures due January 15, 2027 (the
"Exchange Junior Subordinated Debt Securities") to be issued by the Company and
(c) an aggregate of 200,000 Exchange Capital Securities (liquidation amount of
$1,000 per security) of the Trust, and (ii) exchanging (a) such Exchange
Guarantee for the previously issued guarantee, (b) such Exchange Junior
Subordinated Debt Securities for the previously issued junior subordinated debt
securities and (c) such Exchange Capital Securities for the previously issued
capital securities
<PAGE>
First USA, Inc.
First USA Capital Trust I
May 19, 1997
Page 2
(the "Old Capital Securities", and together with the Exchange Capital
Securities, the "Capital Securities").
We hereby confirm that, although the discussion set forth under the
heading "CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS" in the
Registration Statement does not purport to discuss all possible United States
federal income tax consequences of the purchase, ownership and disposition of
the Capital Securities, in our opinion, based upon current law, such discussion
constitutes in all material respects a fair and accurate summary of the United
States federal income tax consequences of the purchase, ownership and
disposition of the Capital Securities by a holder which purchased Old Capital
Securities upon initial issuance. It is possible that contrary positions may be
taken by the Internal Revenue Service and that a court may agree with such
contrary positions.
Except as set forth above, we express no other opinion. This opinion
is furnished to you solely for your benefit in connection with the filing of
the Registration Statement and is not to be used, circulated, quoted or
otherwise referred to for any other purpose or relied upon by any other person
for any purpose without our prior written consent. We disclaim any undertaking
to advise you of any subsequent changes of the facts stated or assumed herein or
any subsequent changes in applicable law.
Very truly yours,
/s/ Skadden, Arps, Slate,
Meagher & Flom LLP
<PAGE>
EXHIBIT 12.1
FIRST USA, INC. AND SUBSIDIARIES
RATIO OF EARNINGS TO FIXED CHARGES FOR EACH OF THE FIVE FISCAL YEARS ENDED JUNE
30, 1996 AND FOR THE NINE MONTHS ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED JUNE 30,
MARCH 31, ---------------------------------------------------
1997 1996 1995 1994 1993 1992
----------- --------- --------- --------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
EARNINGS
Income before income
taxes and extraordinary
item................... $266,314 $ 390,284 $ 281,599 $ 238,150 $ 65,363 $ 25,079
Interest expense....... 332,706 391,939 305,548 201,271 147,001 167,807
Interest portion of
rent expense.......... 5,174 5,435 3,371 2,697 2,639 2,488
-------- --------- --------- --------- -------- --------
Earnings including
interest-bearing
deposits.............. 604,194 787,658 590,518 442,118 215,003 195,374
Interest on interest-
bearing deposits...... (69,734) (113,435) (149,869) (145,555) (92,219) (99,854)
-------- --------- --------- --------- -------- --------
Earnings excluding
interest-bearing
deposits.............. $534,460 $ 674,223 $ 440,649 $ 296,563 $122,784 $ 95,520
======== ========= ========= ========= ======== ========
FIXED CHARGES
Interest expense....... $332,706 $ 391,939 $ 305,548 $ 201,271 $147,001 $167,807
Interest portion of
rent expense.......... 5,174 5,435 3,371 2,697 2,639 2,488
-------- --------- --------- --------- -------- --------
Fixed charges including
interest-bearing
deposits.............. 337,880 397,374 308,919 203,968 149,640 170,295
Interest on interest-
bearing deposits...... (69,734) (113,435) (149,869) (145,555) (92,219) (99,854)
-------- --------- --------- --------- -------- --------
Fixed charges excluding
interest-bearing
deposits.............. $268,146 $ 283,939 $ 159,050 $ 58,413 $ 57,421 $ 70,441
======== ========= ========= ========= ======== ========
RATIO OF EARNINGS TO
FIXED CHARGES
Including interest-
bearing deposits...... 1.79X 1.98X 1.91X 2.17X 1.44X 1.15X
Excluding interest-
bearing deposits...... 1.99 2.37 2.77 5.08 2.14 1.36
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated July 17, 1996, except for Notes D and A as to which
the dates are August 19, 1996 and April 22, 1997, respectively, incorporated
by reference in Amendment No. 1 to the Registration Statement (Form S-4 333-
26669) of First USA, Inc. and First USA Capital Trust I for the exchange and
registration of $200,000,000 of 9.33% Series B Capital Securities of First USA
Capital Trust I.
/s/ Ernst & Young LLP
Dallas, Texas
May 15, 1997
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
First USA, Inc. on Form S-4 (File No. 333-26669) of our report dated February
21, 1997, on our audits of the consolidated financial statements of BANC ONE
CORPORATION and Subsidiaries, as of December 31, 1996 and 1995 and for the
years ended December 31, 1996, 1995, and 1994, incorporated by reference in
BANC ONE CORPORATION 's Annual Report on Form 10-K, as amended, for the year
ended December 31, 1996. We also consent to the reference to our Firm under
the caption of "Experts" on Form S-4.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Columbus, Ohio
May 19, 1997
<PAGE>
LETTER OF TRANSMITTAL
FIRST USA CAPITAL TRUST I
OFFER FOR ANY AND ALL OUTSTANDING
9.33% SERIES A CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
IN EXCHANGE FOR
9.33% SERIES B CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
UNCONDITIONALLY GUARANTEED BY
FIRST USA, INC.
PURSUANT TO THE PROSPECTUS DATED MAY 20, 1997
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 9:00
A.M., NEW YORK CITY TIME, ON JUNE 19, 1997, UNLESS THE OFFER IS
EXTENDED. TENDERS MAY BE WITHDRAWN PRIOR TO 9:00 A.M., NEW YORK
CITY TIME, ON THE EXPIRATION DATE.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
THE BANK OF NEW YORK
Facsimile Transmissions: By Registered Or
By Hand Or Overnight (Eligible Institutions Certified Mail:
Delivery: Only) The Bank of New York
101 Barclay Street, 7E
The Bank of New York New York, New York 10286
101 Barclay Street (212) 571-3080 Attn: Reorganization
Corporate Trust Services Section
Window
To Confirm by Telephone Henry Lopez
Ground Level or for Information Call:
New York, New York 10286
(212) 815-2742
Attn: Reorganization
Section
Henry Lopez
The undersigned acknowledges that he or she has received the Prospectus,
dated May 20, 1997 (the "Prospectus"), of First USA, Inc., a Delaware
corporation (the "Corporation"), and First USA Capital Trust I, a Delaware
business trust (the "Trust"), and this Letter of Transmittal, which together
constitute the Corporation's and the Trust's offer (the "Exchange Offer") to
exchange an aggregate Liquidation Amount of up to $200,000,000 9.33% Series B
Capital Securities due January 15, 2027 (the "New Capital Securities"), which
have been registered under the Securities Act of 1933, as amended (the
"Securities Act") of the Trust for a like Liquidation Amount of the issued and
outstanding 9.33% Series A Capital Securities due January 15, 2027 (the "Old
Capital Securities") of the Trust from the holders thereof.
Delivery of this letter of transmittal to an address other than as set forth
above or transmission of this letter of transmittal via facsimile to a number
other than as set forth above does not constitute a valid delivery.
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
<PAGE>
Capitalized terms used but not defined herein shall have the same meaning
given them in the Prospectus.
Holders who are participants ("Participants") in the book-entry facility
system of the Depository Trust Company ("DTC") tendering by book-entry
transfer execute such tender through the Automated Tender Offer Program
("ATOP") of DTC. A holder using ATOP should transmit its acceptance to DTC on
or prior to 9:00 a.m. on June 19, 1997 (the "Expiration Date"). DTC will
verify such acceptance, execute a book-entry transfer of the tendered Old
Capital Securities into the Exchange Agent's account at DTC and then send to
the Bank of New York (the "Exchange Agent") confirmation of such book-entry
transfer (a "book-entry confirmation"), including an agent's message ("Agent's
Message") confirming that DTC has received an express acknowledgement from
such holder that such holder has received and agrees to be bound by this
Letter of Transmittal and that the Trust and the Corporation may enforce this
Letter of Transmittal against such holder. The book-entry confirmation must be
received by the Exchange Agent in order for the tender relating thereto to be
effective. Book-entry transfer to DTC in accordance with DTC's procedures does
not constitute delivery of the book-entry confirmation to the Exchange Agent.
If the tender is not made through ATOP, certificates, as well as this Letter
of Transmittal (or facsimile thereof), properly completed and duly executed,
with any required signature guarantees, and any other documents required by
this Letter of Transmittal, must be received by the Exchange Agent at its
address set forth herein on or prior to the Expiration Date in order for such
tender to be effective.
This Letter of Transmittal is to be completed by holders of Old Capital
Securities (as defined below) either if Old Capital Securities are to be
forwarded herewith or if tenders of Old Capital Securities are to be made by
book-entry transfer to an account maintained by the Exchange Agent at DTC
pursuant to the procedures set forth in "The Exchange Offer--Procedures for
Tendering Old Capital Securities" in the Prospectus.
Holders of Old Capital Securities whose certificates for such Old Capital
Securities are not immediately available or who cannot deliver their
certificates and all other required documents to the Exchange Agent on or
prior to the Expiration Date or who cannot complete the procedures for book-
entry transfer on a timely basis, must tender their Old Capital Securities
according to the guaranteed delivery procedures set forth in "The Exchange
Offer--Procedures for Tendering Old Capital Securities" in the Prospectus.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
The undersigned has completed the appropriate boxes below and signed this
Letter of Transmittal to indicate the action the undersigned desires to take
with respect to the Exchange Offer.
<TABLE>
<CAPTION>
DESCRIPTION
OF OLD
CAPITAL
SECURITIES 1 2 3
- ---------------------------------------------------------------
<S> <C> <C> <C>
NAME(S) AND
ADDRESS(ES) LIQUIDATION
OF AMOUNT OF
REGISTERED AGGREGATE OLD CAPITAL
HOLDER(S): LIQUIDATION SECURITIES
(PLEASE AMOUNT OF TENDERED**
FILL IN, IF CERTIFICATE OLD CAPITAL (IF LESS THAN
BLANK) NUMBER(S)* SECURITIES ALL)
- ---------------------------------------------------------------
------------------------
------------------------
------------------------
------------------------
TOTAL
</TABLE>
- -------------------------------------------------------------------------------
* Need not be completed if Old Capital Securities are being tendered by
book-entry holders.
** Old Capital Securities may be tendered in whole or in part in
denominations of $100,000 and integral multiples of $1,000 in excess
thereof, provided that if any Old Capital Securities are tendered for
exchange in part, the untendered principal amount thereof must be
$100,000 or any integral multiple of $1,000 in excess thereof. See
instruction 4. Unless otherwise indicated in the column, a holder will
be deemed to have tendered all Old Capital Securities represented by the
Old Capital Securities indicated in Column 2. See Instruction 4.
2
<PAGE>
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
[_]CHECK HERE IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED BY BOOK-
ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH
THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution _________________________________________
Account Number ________________________________________________________
Transaction Code Number _______________________________________________
[_]CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE
FOLLOWING:
Name of Registered Holder(s) __________________________________________
Window Ticket Number (if any) _________________________________________
Date of Execution of Notice of Guaranteed Delivery ____________________
Name of Institution which Guaranteed Delivery _________________________
If Guaranteed Delivery is to be made By Book-Entry Transfer:
Name of Tendering Institution _________________________________________
Account Number ________________________________________________________
Transaction Code Number _______________________________________________
[_]CHECK HERE IF OLD CAPITAL SECURITIES TENDERED BY BOOK-ENTRY TRANSFER AND
NON-EXCHANGED OLD CAPITAL SECURITIES ARE TO BE RETURNED BY CREDITING THE
BOOK-ENTRY TRANSFER FACILITY ACCOUNT NUMBER SET FORTH ABOVE.
[_]CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD CAPITAL
SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER
TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name: ______________________________________________________________________
Address: ___________________________________________________________________
3
<PAGE>
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to First USA Capital Trust I, a trust formed under
the laws of the State of Delaware (the "Trust"), and First USA, Inc., a
Delaware (the "Corporation"), the above described aggregate Liquidation Amount
of the Trust's 9.33% Series A Capital Securities (the "Old Capital
Securities") in exchange for a like aggregate Liquidation Amount of the
Trust's 9.33% Series B Capital Securities (the "New Capital Securities") which
have been registered under the Securities Act of 1933, as amended (the
"Securities Act"), upon the terms and subject to the conditions set forth in
the Prospectus dated May 20, 1997 (as the same may be amended or supplemented
from time to time, the "Prospectus"), receipt of which is hereby acknowledged,
and in this Letter of Transmittal (which, together with the Prospectus,
constitute the "Exchange Offer").
Subject to and effective upon the acceptance for exchange of all or any
portion of the Old Capital Securities tendered herewith in accordance with the
terms and conditions of the Exchange Offer (including, if the Exchange Offer
is extended or amended, the terms and conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to or upon the
order of the Trust all right, title and interest in and to such Old Capital
Securities as are being tendered herewith. The undersigned hereby irrevocably
constitutes and appoints The Bank of New York (the "Exchange Agent") as its
agent and attorney-in-fact (with full knowledge that the Exchange Agent is
also acting as agent of the Corporation and the Trust in connection with the
Exchange Offer) with respect to the tendered Old Capital Securities, with full
power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest) subject only to the right of
withdrawal described in the Prospectus, to (i) deliver certificates for Old
Capital Securities to the Corporation or the Trust together with all
accompanying evidences of transfer and authenticity to, or upon the order of,
the Trust, upon receipt by the Exchange Agent, as the undersigned's agent, of
the New Capital Securities to be issued in exchange for such Old Capital
Securities, (ii) present certificates for such Old Capital Securities for
transfer, and to transfer the Old Capital Securities on the books of the
Trust, and (iii) receive for the account of the Trust all benefits and
otherwise exercise all rights of beneficial ownership of such Old Capital
Securities, all in accordance with the terms and conditions of the Exchange
Offer.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS FULL
POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE OLD
CAPITAL SECURITIES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR
EXCHANGE, THE TRUST WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE
THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES,
AND THAT THE OLD CAPITAL SECURITIES TENDERED HEREBY ARE NOT SUBJECT TO ANY
ADVERSE CLAIMS OR PROXIES. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND
DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY THE CORPORATION, THE TRUST OR THE
EXCHANGE AGENT TO BE NECESSARY OR DESIRABLE TO COMPLETE THE EXCHANGE,
ASSIGNMENT AND TRANSFER OF THE OLD CAPITAL SECURITIES TENDERED HEREBY, AND THE
UNDERSIGNED WILL COMPLY WITH ITS OBLIGATIONS UNDER THE REGISTRATION RIGHTS
AGREEMENT (AS DEFINED IN THE PROSPECTUS). THE UNDERSIGNED HAS READ AND AGREES
TO ALL OF THE TERMS OF THE EXCHANGE OFFER.
The name(s) and address(es) of the registered holder(s) of the Old Capital
Securities tendered hereby should be printed above, if they are not already
set forth above, as they appear on the Certificates representing such Old
Capital Securities. The certificate number(s) and the Old Capital Securities
that the undersigned wishes to tender should be indicated in the appropriate
boxes above.
If any tendered Old Capital Securities are not exchanged pursuant to the
Exchange Offer for any reason, or if certificates are submitted for more Old
Capital Securities than are tendered or accepted for exchange, certificates
for such nonexchanged or nontendered Old Capital Securities will be returned
(or, in the case of Old Capital Securities tendered by book-entry transfer,
such Old Capital Securities will be credited to an account maintained at DTC),
without expense to the tendering holder, promptly following the expiration or
termination of the Exchange Offer.
4
<PAGE>
The undersigned understands that tenders of Old Capital Securities pursuant
to any one of the procedures described in "The Exchange Offer--Procedures for
Tendering Old Capital Securities" in the Prospectus and in the instructions
attached hereto will, upon the Corporation's and the Trust's acceptance for
exchange of such tendered Old Capital Securities, constitute a binding
agreement between the undersigned, the Corporation and the Trust upon the
terms and subject to the conditions of the Exchange Offer. The undersigned
recognizes that, under certain circumstances set forth in the Prospectus, the
Corporation and the Trust may not be required to accept for exchange any of
the Old Capital Securities tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby directs that the New Capital
Securities be issued in the name(s) of the undersigned or, in the case of a
book-entry transfer of Old Capital Securities, that such New Capital
Securities be credited to the account indicated above maintained at DTC. If
applicable, substitute certificates representing Old Capital Securities not
exchanged or not accepted for exchange will be issued to the undersigned or,
in the case of a book-entry transfer of Old Capital Securities, will be
credited to the account indicated above maintained at DTC. Similarly, unless
otherwise indicated under "Special Delivery Instructions," please deliver New
Capital Securities to the undersigned at the address shown below the
undersigned's signature.
BY TENDERING OLD CAPITAL SECURITIES AND EXECUTING THIS LETTER OF
TRANSMITTAL, THE UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT (I) THE
UNDERSIGNED IS NOT AN "AFFILIATE" OF THE CORPORATION OR THE TRUST, (II) ANY
NEW CAPITAL SECURITIES TO BE RECEIVED BY THE UNDERSIGNED ARE BEING ACQUIRED IN
THE ORDINARY COURSE OF ITS BUSINESS, (III) THE UNDERSIGNED HAS NO ARRANGEMENT
OR UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN A DISTRIBUTION (WITHIN THE
MEANING OF THE SECURITIES ACT) OF NEW CAPITAL SECURITIES TO BE RECEIVED IN THE
EXCHANGE OFFER, AND (IV) IF THE UNDERSIGNED IS NOT A BROKER-DEALER, THE
UNDERSIGNED IS NOT ENGAGED IN, AND DOES NOT INTEND TO ENGAGE IN, A
DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF SUCH NEW CAPITAL
SECURITIES. BY TENDERING OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER
AND EXECUTING THIS LETTER OF TRANSMITTAL, A HOLDER OF OLD CAPITAL SECURITIES
WHICH IS A BROKER-DEALER REPRESENTS AND AGREES, CONSISTENT WITH CERTAIN
INTERPRETIVE LETTERS ISSUED BY THE STAFF OF THE DIVISION OF CORPORATION
FINANCE OF THE SECURITIES AND EXCHANGE COMMISSION TO THIRD PARTIES, THAT (A)
SUCH OLD CAPITAL SECURITIES HELD BY THE BROKER-DEALER ARE HELD ONLY AS A
NOMINEE, OR (B) SUCH OLD CAPITAL SECURITIES WERE ACQUIRED BY SUCH BROKER-
DEALER FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER
TRADING ACTIVITIES AND IT WILL DELIVER THE PROSPECTUS (AS AMENDED OR
SUPPLEMENTED FROM TIME TO TIME) MEETING THE REQUIREMENTS OF THE SECURITIES ACT
IN CONNECTION WITH ANY RESALE OF SUCH NEW CAPITAL SECURITIES (PROVIDED THAT,
BY SO ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, SUCH BROKER-DEALER WILL
NOT BE DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER" WITHIN THE MEANING OF THE
SECURITIES ACT).
THE CORPORATION AND THE TRUST HAVE AGREED THAT, SUBJECT TO THE PROVISIONS OF
THE REGISTRATION RIGHTS AGREEMENT, THE PROSPECTUS, AS IT MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME, MAY BE USED BY A PARTICIPATING BROKER-DEALER
(AS DEFINED BELOW) IN CONNECTION WITH RESALES OF NEW CAPITAL SECURITIES
RECEIVED IN EXCHANGE FOR OLD CAPITAL SECURITIES, WHERE SUCH OLD CAPITAL
SECURITIES WERE ACQUIRED BY SUCH PARTICIPATING BROKER-DEALER FOR ITS OWN
ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES,
FOR A PERIOD ENDING 90 DAYS AFTER THE EXPIRATION DATE (SUBJECT TO EXTENSION
UNDER CERTAIN LIMITED CIRCUMSTANCES DESCRIBED IN THE PROSPECTUS) OR, IF
EARLIER, WHEN ALL SUCH NEW CAPITAL SECURITIES HAVE BEEN DISPOSED OF BY SUCH
PARTICIPATING BROKER-DEALER. IN THAT REGARD, EACH BROKER-DEALER WHO ACQUIRED
OLD CAPITAL SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR
OTHER TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER"), BY TENDERING SUCH
OLD CAPITAL SECURITIES AND
5
<PAGE>
EXECUTING THIS LETTER OF TRANSMITTAL, AGREES THAT, UPON RECEIPT OF NOTICE FROM
THE CORPORATION OR THE TRUST OF THE OCCURRENCE OF ANY EVENT OR THE DISCOVERY
OF ANY FACT WHICH MAKES ANY STATEMENT CONTAINED OR INCORPORATED BY REFERENCE
IN THE PROSPECTUS UNTRUE IN ANY MATERIAL RESPECT OR WHICH CAUSES THE
PROSPECTUS TO OMIT TO STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE
STATEMENTS CONTAINED OR INCORPORATED BY REFERENCE THEREIN, IN LIGHT OF THE
CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING OR OF THE OCCURRENCE
OF CERTAIN OTHER EVENTS SPECIFIED IN THE REGISTRATION RIGHTS AGREEMENT, SUCH
PARTICIPATING BROKER-DEALER WILL SUSPEND THE SALE OF NEW CAPITAL SECURITIES
PURSUANT TO THE PROSPECTUS UNTIL THE CORPORATION AND THE TRUST HAVE AMENDED OR
SUPPLEMENTED THE PROSPECTUS TO CORRECT SUCH MISSTATEMENT OR OMISSION AND HAVE
FURNISHED COPIES OF THE AMENDED OR SUPPLEMENTED PROSPECTUS TO THE
PARTICIPATING BROKER-DEALER OR THE CORPORATION OR THE TRUST HAS GIVEN NOTICE
THAT THE SALE OF THE NEW CAPITAL SECURITIES MAY BE RESUMED, AS THE CASE MAY
BE. IF THE CORPORATION OR THE TRUST GIVES SUCH NOTICE TO SUSPEND THE SALE OF
THE NEW CAPITAL SECURITIES, THEY SHALL EXTEND THE 90-DAY PERIOD REFERRED TO
ABOVE DURING WHICH PARTICIPATING BROKER-DEALERS ARE ENTITLED TO USE THE
PROSPECTUS IN CONNECTION WITH THE RESALE OF NEW CAPITAL SECURITIES BY THE
NUMBER OF DAYS DURING THE PERIOD FROM AND INCLUDING THE DATE OF THE GIVING OF
SUCH NOTICE TO AND INCLUDING THE DATE WHEN PARTICIPATING BROKER-DEALERS SHALL
HAVE RECEIVED COPIES OF THE SUPPLEMENTED OR AMENDED PROSPECTUS NECESSARY TO
PERMIT RESALES OF THE NEW CAPITAL SECURITIES OR TO AND INCLUDING THE DATE ON
WHICH THE CORPORATION OR THE TRUST HAS GIVEN NOTICE THAT THE SALE OF NEW
CAPITAL SECURITIES MAY BE RESUMED, AS THE CASE MAY BE.
AS A RESULT, A PARTICIPATING BROKER-DEALER WHO INTENDS TO USE THE PROSPECTUS
IN CONNECTION WITH RESALES OF NEW CAPITAL SECURITIES RECEIVED IN EXCHANGE FOR
OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER MUST NOTIFY THE
CORPORATION AND THE TRUST, OR CAUSE THE CORPORATION AND THE TRUST TO BE
NOTIFIED, ON OR PRIOR TO THE EXPIRATION DATE, THAT IT IS A PARTICIPATING
BROKER-DEALER. SUCH NOTICE MAY BE GIVEN IN THE SPACE PROVIDED ABOVE OR MAY BE
DELIVERED TO THE EXCHANGE AGENT AT THE ADDRESS SET FORTH IN THE PROSPECTUS
UNDER "THE EXCHANGE OFFER--EXCHANGE AGENT."
Holders of Old Capital Securities whose Old Capital Securities are accepted
for exchange will not receive Distributions on such Old Capital Securities and
the undersigned waives the right to receive any Distributions on such Old
Capital Securities accumulated from and including December 20, 1996.
Accordingly, holders of New Capital Securities as of the record date for the
payment of Distributions on July 15, 1997, will be entitled to Distributions
accumulated from and including December 20, 1996.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Corporation or the Trust to be necessary or desirable
to complete the sale, assignment and transfer of the Old Capital Securities
tendered hereby. All authority herein conferred or agreed to be conferred in
this Letter of Transmittal shall survive the death or incapacity of the
undersigned and any obligation of the undersigned hereunder shall be binding
upon the heirs, executors, administrators, personal representatives, trustees
in bankruptcy, legal representatives, successors and assigns of the
undersigned. Except as stated in the Prospectus, this tender is irrevocable.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD CAPITAL
SECURITIES" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE
OLD CAPITAL SECURITIES AS SET FORTH IN SUCH BOX.
6
<PAGE>
HOLDER(S) SIGN HERE
(SEE INSTRUCTIONS 2, 5, AND 6)
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON PAGE 7)
NOTE: SIGNATURES(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 2)
Must be signed by registered holder(s) exactly as name(s) appear(s) on
certificate(s) for the Old Capital Securities hereby tendered or on the
register of holders maintained by the Trust, or by any person(s) authorized
to become the registered holder(s) by endorsements and documents
transmitted herewith (including such opinions of counsel, certifications
and other information as may be required by the Trust or the Trustee for
the Old Capital Securities to comply with the restrictions on transfer
applicable to the Old Capital Securities). If signature is by an attorney-
in-fact, executor, administrator, trustee, guardian, officer of a
corporation or another acting in a fiduciary capacity or representative
capacity, please set forth the signer's full title. See Instruction 5.
(SIGNATURE(S) OF HOLDER(S))
Date: __________________, 199
Name(s)________________________________________________________________
________________________________________________________________________
(PLEASE PRINT)
Capacity (full title) _________________________________________________
Address________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number ________________________________________
----------------------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER(S))
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 2 AND 5)
----------------------------------------------------------------------------
(AUTHORIZED SIGNATURE)
Date: __________________, 199
Name of Firm __________________________________________________________
Capacity (full title) _________________________________________________
(PLEASE PRINT)
Address________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number ________________________________________
7
<PAGE>
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6) (SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if New To be completed ONLY if New
Capital Securities or Old Capital Capital Securities or Old Capital
Securities not tendered are to be Securities not tendered are to be
issued in the name of someone sent to someone other than the
other than the registered holder registered holder of the Old
of the Old Capital Securities Capital Securities whose name(s)
whose name(s) appear(s) above. appear(s) above, or such
registered holder(s) at an address
other than that shown above.
Issue
[_] Old Capital Securities not
tendered to: Mail
[_] New Capital Securities to:
[_] Old Capital Securities not
tendered to:
Name(s): __________________________ [_] New Capital Securities to:
(PLEASE PRINT)
Name(s): __________________________
Address: __________________________ (PLEASE PRINT)
(PLEASE PRINT)
Address: __________________________
___________________________________ (PLEASE PRINT)
(INCLUDE ZIP CODE)
___________________________________
___________________________________ (INCLUDE ZIP CODE)
(AREA CODE AND TELEPHONE NUMBER)
___________________________________
___________________________________ (AREA CODE AND TELEPHONE NUMBER)
(TAX IDENTIFICATION OR SOCIAL ___________________________________
SECURITY NUMBER(S))
(TAX IDENTIFICATION OR SOCIAL
SECURITY NUMBER(S))
8
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. BOOK-ENTRY TRANSFER; DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES;
GUARANTEED DELIVERY PROCEDURES. This Letter of Transmittal is to be completed
either if (a) Certificates are to be forwarded herewith or (b) tenders are to
be made pursuant to the procedures for tender by book-entry transfer set forth
in "The Exchange Offer--Procedures for Tendering Old Capital Securities" in the
Prospectus. Holders who are DTC Participants tendering by book-entry transfer
must execute such tender through DTC's ATOP system. A holder using ATOP should
transmit its acceptance to DTC on or prior to the Expiration Date. DTC will
verify such acceptance, execute a book-entry transfer of the tendered Old
Capital Securities into the Exchange Agent's account at DTC and then send to
the Exchange Agent a book-entry confirmation, including an Agent's Message
confirming that DTC has received an express acknowledgement from such holder
that such holder has received and agrees to be bound by this Letter of
Transmittal and that the Trust and the Corporation may enforce this Letter of
Transmittal against such holder. The book-entry confirmation must be received
by the Exchange Agent in order for the tender relating thereto to be effective.
Book-entry transfer to DTC in accordance with DTC's procedure does not
constitute delivery of the book-entry confirmation to the Exchange Agent.
If the tender is not made through ATOP, certificates representing Old Capital
Securities, as well as this Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
and any other documents required by this Letter of Transmittal, must be
received by the Exchange Agent at its address set forth herein on or prior to
the Expiration Date in order for such tender to be effective.
Old Capital Securities may be tendered in whole or in part in the principal
amount of $100,000 (100 Capital Securities) and integral multiples of $1,000 in
excess thereof, provided that, if any Old Capital Securities are tendered for
exchange in part, the untendered principal amount thereof must be $100,000 (100
Capital Securities) or any integral multiple of $1,000 in excess thereof.
Holders who wish to tender their Old Capital Securities and (i) whose Old
Capital Securities are not immediately available or (ii) who cannot deliver
their Old Capital Securities, this Letter of Transmittal and all other required
documents to the Exchange Agent on or prior to the Expiration Date or (iii) who
cannot complete the procedures for delivery by book-entry transfer on a timely
basis, may tender their Old Capital Securities by properly completing and duly
executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery
procedures set forth in "The Exchange Offer--Procedures for Tendering Old
Capital Securities" in the Prospectus. Pursuant to such procedures: (i) such
tender most be made by or through an Eligible Institution (as defined below);
(ii) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form made available by the Trust, must be received by the
Exchange Agent on or prior to the Expiration Date; and (iii) the certificates
(or a book-entry confirmation (as defined in this Prospectus)) representing all
tendered Old Capital Securities, in proper form for transfer, together with a
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
within three New York Stock Exchange, Inc. trading days after the date of
execution of such Notice of Guaranteed Delivery, all as provided in "The
Exchange Offer--Procedures for Tendering Old Capital Securities" in the
Prospectus.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile or mail to the Exchange Agent, and must include a guarantee by an
Eligible Institution in the form set forth in such Notice. For Old Capital
Securities to be properly tendered pursuant to the guaranteed delivery
procedure, the Exchange Agent must receive a Notice of Guaranteed Delivery on
or prior to the Expiration Date. As used herein and in the Prospectus,
"Eligible Institution" means a firm or other entity identified in Rule 17Ad-15
under the Exchange Act as "an eligible guarantor institution," including (as
such terms are defined therein) (i) a bank; (ii) a broker, dealer, municipal
securities broker or dealer or government securities broker or dealer; (iii) a
credit union; (iv) a national securities exchange, registered securities
association or clearing agency; or (v) a savings association that is a
participant in a Securities Transfer Association.
9
<PAGE>
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN
ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Neither the Corporation nor the Trust will accept any alternative,
conditional or contingent tenders. Each tendering holder, by book-entry
transfer through ATOP or execution of a Letter of Transmittal (or facsimile
thereof), waives any right to receive any notice of the acceptance of such
tender.
2. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered holder (which term,
for purposes of this document, shall include any participant in DTC whose
name appears on the register of holders maintained by the Trust as the
owner of the Old Capital Securities) of Old Capital Securities tendered
herewith, unless such holder(s) has completed either the box entitled
"Special Issuance Instructions" or the box entitled "Special Delivery
Instructions" above, or
(ii) such Old Capital Securities are tendered for the account of a firm that is
an Eligible Institution.
In all other cases, an Eligible Institution must guarantee the signature(s)
on this Letter of Transmittal. See Instruction 5.
3. INADEQUATE SPACE. If the space provided in the box captioned "Description
of Old Capital Securities" is inadequate, the Certificate number(s) and/or the
principal amount of Old Capital Securities and any other required information
should be listed on a separate signed schedule which is attached to this Letter
of Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Old Capital Securities
will be accepted only in the principal amount of $100,000 (100 Capital
Securities) and integral multiples of $1,000 in excess thereof, provided that
if any Old Capital Securities are tendered for exchange in part, the untendered
principal amount thereof must be $100,000 (100 Capital Securities) or any
integral multiple of $1,000 in excess thereof. If less than all the Old Capital
Securities evidenced by any Certificate submitted are to be tendered, fill in
the principal amount of Old Capital Securities which are to be tendered in the
box entitled "Liquidation Amount of Old Capital Securities Tendered (if less
than all)." In such case, new certificate(s) for the remainder of the Old
Capital Securities that were evidenced by your old certificate(s) will only be
sent to the holder of the Old Capital Security, promptly after the Expiration
Date. All Old Capital Securities represented by certificates delivered to the
Exchange Agent will be deemed to have been tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Old Capital Securities may be
withdrawn at any time on or prior to the Expiration Date. In order for a
withdrawal to be effective on or prior to that time, a written, telegraphic,
telex or facsimile transmission of such notice of withdrawal must be timely
received by the Exchange Agent at one of its addresses set forth above or in
the Prospectus on or prior to the Expiration Date. Any such notice of
withdrawal must specify the name of the person who tendered the Old Capital
Securities to be withdrawn, the aggregate principal amount of Old Capital
Securities to be withdrawn, and (if Certificates for Old Capital Securities
have been tendered) the name of the registered holder of the Old Capital
Securities as set forth on the certificate for the Old Capital Securities, if
different from that of the person who tendered such Old Capital Securities. If
certificates for the Old Capital Securities have been delivered or otherwise
identified to the Exchange Agent, then prior to the physical release of such
certificates for the Old Capital Securities, the tendering holder must submit
the serial numbers shown on the particular certificates for the Old Capital
Securities to be withdrawn and the signature on the notice of withdrawal must
be guaranteed by an Eligible Institution, except in the case of Old Capital
Securities tendered for the account of an Eligible Institution. If Old Capital
Securities have been tendered pursuant to the procedures for book-entry
transfer set forth in the Prospectus under "The Exchange Offer--Procedures for
Tendering Old Capital Securities," the notice of withdrawal must specify the
name and number of the account at DTC to be credited with the withdrawal of Old
Capital Securities,
10
<PAGE>
in which case a notice of withdrawal will be effective if delivered to the
Exchange Agent by written, telegraphic, telex or facsimile transmission.
Withdrawals of tenders of Old Capital Securities may not be rescinded. Old
Capital Securities properly withdrawn will not be deemed validly tendered for
purposes of the Exchange Offer, but may be retendered at any subsequent time on
or prior to the Expiration Date by following any of the procedures described in
the Prospectus under "The Exchange Offer--Procedures for Tendering Old Capital
Securities."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Corporation and
the Trust, in their sole discretion, whose determination shall be final and
binding on all parties. None of the Corporation, the Trust, any affiliates or
assigns of the Corporation or the Trust, the Exchange Agent or any other person
shall be under any duty to give any notification of any irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification. Any Old Capital Securities which have been tendered but which are
withdrawn will be returned to the holder thereof without cost to such holder
promptly after withdrawal.
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS. If a
Letter of Transmittal is signed by the registered holder(s) of the Old Capital
Securities tendered hereby, the signature(s) must correspond exactly with the
name(s) as written on the face of the Certificate(s) without alteration,
enlargement or any change whatsoever or as recorded in DTC's book-entry
transfer facility system, as the case may be.
If any of the Old Capital Securities tendered hereby are owned of record by
two or more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Old Capital Securities are registered in different name(s) on
several certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal (or facsimiles thereof) as there are different
registrations of certificates.
If this Letter of Transmittal or any certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity,
such persons should so indicate when signing and must submit proper evidence
satisfactory to the Corporation and the Trust, in their sole discretion, of
each such person's authority so to act.
When this Letter of Transmittal is signed by the registered owner(s) of the
Old Capital Securities listed and transmitted hereby, no endorsement(s) of
certificate(s) or separate bond power(s) are required unless New Capital
Securities are to be issued in the name of a person other then the registered
holder(s). Signature(s) on such certificate(s) or bond power(s) must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the registered
owner(s) of the Old Capital Securities listed, the certificates must be
endorsed or accompanied by appropriate bond powers, signed exactly as the name
or names of the registered owner(s) appear(s) on the certificates, and also
must be accompanied by such opinions of counsel, certifications and other
information as the Corporation, the Trust or the Trustee for the Old Capital
Securities may require in accordance with the restrictions on transfer
applicable to the Old Capital Securities. Signatures on such certificates or
bond powers must be guaranteed by an Eligible Institution.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If New Capital Securities are
to be issued in the name of a person other than the signer of this Letter of
Transmittal, or if New Capital Securities are to be sent to someone other than
the signer of this Letter of Transmittal or to an address other than that shown
above, the appropriate boxes on this Letter of Transmittal should be completed.
Certificates for Old Capital Securities not exchanged will be returned by mail
or, if tendered by book-entry transfer, by crediting the account indicated
above maintained at DTC. See Instruction 4.
7. IRREGULARITIES. The Corporation and the Trust will determine, in their
sole discretion, all questions as to the form of documents, validity,
eligibility (including time of receipt) and acceptance for exchange of any
tender of Old Capital Securities, which determination shall be final and
binding on all parties. The Corporation and the Trust reserve the absolute
right to reject any and all tenders determined by either of
11
<PAGE>
them not to be in proper form or the acceptance of which, or exchange for
which, may, in the view of counsel to the Corporation and the Trust, be
unlawful. The Corporation and the Trust also reserve the absolute right,
subject to applicable law, to waive any of the conditions of the Exchange
Offer set forth in the Prospectus under "The Exchange Offer--Conditions to the
Exchange Offer" or any conditions or irregularity in any tender of Old Capital
Securities of any particular holder whether or not similar conditions or
irregularities are waived in the case of other holders. The Corporation's and
the Trust's interpretation of the terms and conditions of the Exchange Offer
(including this Letter of Transmittal and the instructions hereto) will be
final and binding. No tender of Old Capital Securities will be deemed to have
been validly made until all irregularities with respect to such tender have
been cured or waived. The Corporation, the Trust, any affiliates or assigns of
the Corporation, the Trust, the Exchange Agent, or any other person shall not
be under any duty to give notification of any irregularities in tenders or
incur any liability for failure to give such notification.
8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions and
requests for assistance may be directed to the Exchange Agent at its address
and telephone number set forth on the front of this Letter of Transmittal.
Additional copies of the Prospectus, the Notice of Guaranteed Delivery and the
Letter of Transmittal my be obtained from the Exchange Agent or from your
broker, dealer, commercial bank, trust company or other nominee.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a holder whose tendered Old Capital Securities are accepted for
exchange is required to provide the Exchange Agent with such holder's correct
taxpayer identification number ("TIN") on Substitute Form W-9 below. If the
Exchange Agent is not provided with the correct TIN, the Internal Revenue
Service (the "IRS") may subject the holder or other payee to a $50 penalty. In
addition, payments to such holders or other payees with respect to Old Capital
Securities exchanged pursuant to the Exchange Offer may be subject to 31%
backup withholding.
The box in Part 2 of the Substitute Form W-9 may be checked if the tendering
holder has not been issued a TIN and has applied for a TIN or intends to apply
for a TIN in the near future. If the box in Part 2 is checked, the holder or
other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 2 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments made prior to the time a properly certified TIN
is provided to the Exchange Agent. The Exchange Agent will retain such amounts
withheld during the 60-day period following the date of the Substitute Form W-
9. If the holder furnishes the Exchange Agent with its TIN within 60 days
after the date of the Substitute Form W-9, the amounts retained during the 60-
day period will be remitted to the holder and no further amounts shall be
retained or withheld from payments made to the holder thereafter. If, however,
the holder has not provided the Exchange Agent with its TIN within such 60-day
period, amounts withheld will be remitted to the IRS as backup withholding. In
addition, 31% of all payments made thereafter will be withheld and remitted to
the IRS until a correct TIN is provided.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the Old Capital Securities or of the last transferee appearing on the
transfers attached to, or endorsed on, the Old Capital Securities. If the Old
Capital Securities are registered in more than one name or are not in the name
of the actual owner, consult the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for additional guidance
on which number to report.
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" on the
face thereof, to avoid possible erroneous backup withholding. A foreign person
may qualify as an exempt recipient by submitting a properly completed IRS Form
W-8, signed under penalties of perjury, attesting to that holder's exempt
status. Please consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
holders are exempt from backup withholding.
12
<PAGE>
Backup withholding is not an additional U.S. Federal income tax. Rather, the
U.S. Federal income tax liability of a person subject to backup withholding
will be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained.
10. WAIVER OF CONDITIONS. The Corporation and the Trust reserve the absolute
right to waive satisfaction of any or all conditions enumerated in the
Prospectus.
11. NO CONDITIONAL TENDERS. No alternative, conditional, irregular or
contingent tenders will be accepted. All tendering holders of Old Capital
Securities, by execution of this Letter of Transmittal, shall waive any right
to receive notice of the acceptance of Old Capital Securities for exchange.
Neither the Corporation, the Trust, the Exchange Agent nor any other person
is obligated to give notice of any defect or irregularity with respect to any
tender of Old Capital Securities nor shall any of them incur any liability for
failure to give any such notice.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s)
representing Old Capital Securities have been lost, destroyed or stolen, the
holder should promptly notify the Exchange Agent. The holder will then be
instructed as to the steps that must be taken in order to replace the
Certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, destroyed or stolen
certificate(s) have been followed.
13. SECURITY TRANSFER TAXES. Holders who tender their Old Capital Securities
for exchange will not be obligated to pay any transfer taxes in connection
therewith. If, however, New Capital Securities are to be delivered to, or are
to be issued in the name of, any person other than the registered holder of
the Old Capital Securities tendered, or if a transfer tax is imposed for any
reason other than the exchange of Old Capital Securities in connection with
the Exchange Offer, then the amount of any such transfer tax (whether imposed
on the registered holder or any other persons) will be payable by the
tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with the Letter of Transmittal, the
amount of such transfer taxes will be billed directly to such tendering
holder.
13
<PAGE>
IMPORTANT: THIS LETTER OF TRANSMITTAL (0R FACSIMILE THEREOF)
AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE
EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE.
TO BE COMPLETED BY ALL TENDERING SECURITYHOLDERS
(SEE INSTRUCTION 9)
PAYER'S NAME: THE BANK OF NEW YORK
TIN
SUBSTITUTE PART I--PLEASE PROVIDE
FORM W-9 YOUR TIN ON THE LINE AT _____________________________
RIGHT AND CERTIFY BY
SIGNING AND DATING BELOW Social Security Number or
Employer Identification
Number
------------------------------------------------------------
DEPARTMENT OF THE
TREASURY INTERNAL
REVENUE SERVICE
PART II--TIN Applied for [_]
PAYOR'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER ("TIN") AND CERTIFICATION
(1) the number shown on this form is my correct tax-
payer identification number (or I am waiting for a
number to be issued to me).
-----------------------------------------------------------
CERTIFICATION--UNDER THE PENALTIES OF PERJURY, I CERTIFY
THAT:
(2) I am not subject to backup withholding either be-
cause (i) I am exempt from backup withholding,
(ii) I have not been notified by the Internal Rev-
enue Service ("IRS") that I am subject to backup
withholding as a result of a failure to report all
interest or dividends, or (iii) the IRS has noti-
fied me that I am no longer subject to backup
withholding, and
(3) any other information provided on this form is
true and correct.
Signature ___________________ Date ____ , 1997
You must cross out item (iii) in Part (2) above if you have been notified by
the IRS that you are subject to backup withholding because of underreporting
interest or dividends on your tax return and you have not been notified by the
IRS that you are no longer subject to backup withholding.
NOTE: FAILURE TO COMPLETE THIS FORM MAY IN CERTAIN CIRCUMSTANCES RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT TO THE
EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION
OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2
OF
SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the
time of payment, 31% of all payments made to me on account of the New
Capital Securities shall be retained until I provide a taxpayer
identification number to the Exchange Agent and that, if I do not provide
my taxpayer identification number within 60 days, such retained amounts
shall be remitted to the Internal Revenue Service as backup withholding and
31% of all reportable payments made to me thereafter will be withheld and
remitted to the Internal Revenue Service until I provide a taxpayer
identification number.
Signature _______________________ Date _______________ , 1997
14
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
ANY AND ALL OUTSTANDING 9.33% SERIES A CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
OF
FIRST USA CAPITAL TRUST I
FULLY AND UNCONDITIONALLY GUARANTEED BY
FIRST USA, INC.
This Notice of Guaranteed Delivery, or one substantially equivalent to this
form, must be used to accept the Exchange Offer (as defined below) if (i)
certificates for the Trust's (as defined below) 9.33% Series A Capital
Securities (the "Old Capital Securities") are not immediately available, (ii)
Old Capital Securities, the Letter of Transmittal and all other required
documents cannot be delivered to The Bank of New York (the "Exchange Agent")
on or prior to 9:00 A.M. New York City time, on June 19, 1997 (the "Expiration
Date") or (iii) the procedures for delivery by book-entry transfer cannot be
completed on a timely basis. This Notice of Guaranteed Delivery may be
delivered by hand, overnight courier or mail, or transmitted by facsimile
transmission, to the Exchange Agent. See "The Exchange Offer--Procedures for
Tendering Old Capital Securities" in the Prospectus. In addition, in order to
utilize the guaranteed delivery procedure to tender Old Capital Securities
pursuant to the Exchange Offer, a completed, signed and dated Letter of
Transmittal relating to the Old Capital Securities (or facsimile thereof) must
also be received by the Exchange Agent on or prior to 9:00 A.M. New York City
time, on the Expiration Date. Capitalized terms not defined herein have the
meanings assigned to them in the Prospectus.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
THE BANK OF NEW YORK
By Hand Or Overnight Facsimile Transmissions: By Registered Or Certified
Delivery: Mail:
The Bank of New York
(Eligible Institutions Only)
101 Barclay Street (212) 571-3080 The Bank of New York
Corporate Trust Services 101 Barclay Street, 7E
Window
New York, New York 10286
To Confirm by Telephone
Ground Level
or for Information Call:
New York, New York 10286 Attn: Reorganization Section
(212) 815-2742
Attn: Reorganization Section Henry Lopez
Henry Lopez
Delivery of this Notice of Guaranteed Delivery to an address other than as
set forth above or transmission of this Notice of Guaranteed Delivery via
facsimile to a number other than as set forth above will not constitute a
valid delivery.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to First USA Capital Trust I, a Delaware
business trust (the "Trust"), and to First USA, Inc., a Delaware Corporation
(the "Corporation"), upon the terms and subject to the conditions set forth in
the Prospectus dated May 20, 1997 (as the same may be amended or supplemented
from time to time, the "Prospectus"), and the related Letter of Transmittal
(which together constitute the "Exchange Offer"), receipt of which is hereby
acknowledged, the aggregate principal amount of Old Capital Securities set
forth below pursuant to the guaranteed delivery procedures set forth in the
Prospectus under the caption "The Exchange Offer--Procedures for Tendering Old
Capital Securities."
Aggregate Liquidation Amount Name(s) of Registered Holder(s): ____
Amount Tendered: $__________________* _____________________________________
Certificate No(s)
(if available): _____________________
_____________________________________
Total Liquidation Amount
Represented by Old Capital
Securities Certificate(s)
$____________________________________
If Old Capital Securities will be tendered by book-entry transfer, provide the
following information:
DTC Account Number: _________________
Date: _______________________________
_____________________________________
* Must be in denominations of a Liquidation Amount of $1,000 and any integral
multiple thereof, and not less than $100,000 aggregate Liquidation Amount.
...............................................................................
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
...............................................................................
PLEASE SIGN HERE
X ___________________________________ _____________________________________
X ___________________________________ _____________________________________
Signature(s) of Owners(s) or Date
Authorized Signatory
Area Code and Telephone Number: ______________
<PAGE>
Must be signed by the holder(s) of the Old Capital Securities as their
name(s) appear(s) on certificates for Old Capital Securities or on a security
position listing, or by person(s) authorized to become registered holder(s) by
endorsement and documents transmitted with this Notice of Guaranteed Delivery.
If signature is by a trustee, executor, administrator, guardian, attorney-in-
fact, officer or other person acting in a fiduciary or representative
capacity, such person must set forth his or her full title below.
Please print name(s) and address(es)
Name(s):
___________________________________________________________________
Capacity:
___________________________________________________________________
___________________________________________________________________
Address(es):
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity identified in Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) a bank; (ii)
a broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker or government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association
or clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association recognized program (each of the foregoing
being referred to as an "Eligible Institution"), hereby guarantees to deliver
to the Exchange Agent, at one of its addresses set forth above, either the Old
Capital Securities tendered hereby in a proper form for transfer, or
confirmation of the book-entry transfer of such Old Capital Securities to the
Exchange Agent's account at The Depository Trust Company ("DTC"), pursuant to
the procedures for book-entry transfer set forth in the Prospectus, together
with one or more properly completed and duly executed Letter(s) of Transmittal
(or facsimile thereof), or, in the case of a book-entry transfer, an Agent's
Message properly completed and duly executed with any required signature
guarantees and any other required documents within three business days after
the date of execution of this Notice of Guaranteed Delivery.
The undersigned acknowledges that it must deliver the Letter(s) of
Transmittal and the Old Capital Securities tendered hereby to the Exchange
Agent within the time period set forth above and that failure to do so could
result in a financial loss to the undersigned.
_____________________________________ _____________________________________
Name of Firm Authorized Signature
_____________________________________ _____________________________________
Address Title
_____________________________________ _____________________________________
Zip Code (Please Type or Print)
Area Code and Telephone No. _________ Dated: ______________________________
NOTE: DO NOT SEND CERTIFICATES FOR OLD CAPITAL SECURITIES WITH THIS FORM.
CERTIFICATES FOR OLD CAPITAL SECURITIES SHOULD ONLY BE SENT WITH YOUR LETTER
OF TRANSMITTAL.
<PAGE>
EXHIBIT 99.3
FIRST USA CAPITAL TRUST I
OFFER FOR ALL OUTSTANDING
9.33% SERIES A CAPITAL SECURITIES
IN EXCHANGE FOR
9.33% SERIES B CAPITAL SECURITIES
To: Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
First USA Capital Trust I (the "Trust") is offering, upon and subject to the
terms and conditions set forth in a Prospectus dated May 20, 1997 (the
"Prospectus"), and the enclosed letter of transmittal (the "Letter of
Transmittal"), to exchange (the "Exchange Offer") its 9.33% Series B Capital
Securities for any and all of its outstanding 9.33% Series A Capital
Securities (the "Old Capital Securities"). The Exchange Offer is being made in
order to satisfy certain obligations of the Trust and First USA, Inc. (the
"Corporation") contained in the registration rights agreement dated December
20, 1996, among the Trust, the Corporation and the initial purchasers referred
to therein.
We are requesting that you contact your clients for whom you hold Old
Capital Securities regarding the Exchange Offer. For your information and for
forwarding to your clients for whom you hold Old Capital Securities registered
in your name or in the name of your nominee, or who hold Old Capital
Securities registered in their own names, we are enclosing the following
documents:
1. The Prospectus dated May 20, 1997;
2. The Letter of Transmittal for your use and for the information (or the
use, where relevant) of your clients;
3. A Notice of Guaranteed Delivery to be used to accept the Exchange
Offer if certificates for Old Capital Securities are not immediately
available or time will not permit all required documents to reach the
Exchange Agent prior to the Expiration Date (as defined below) or if the
procedure for book-entry transfer cannot be completed on a timely basis;
4. A form of letter which may be sent to your clients for whose account
you hold Old Capital Securities registered in your name or the name of your
nominee, with space provided for obtaining such clients' instructions with
regard to the Exchange Offer; and
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
YOUR PROMPT ACTION IS REQUESTED. THE EXCHANGE OFFER WILL EXPIRE AT 9:00
A.M., NEW YORK CITY TIME, ON JUNE 19, 1997, OR ON SUCH LATER DATE OR TIME TO
WHICH THE CORPORATION OR THE TRUST MAY EXTEND THE EXCHANGE OFFER (THE
"EXPIRATION DATE"). THE OLD CAPITAL SECURITIES TENDERED PURSUANT TO THE
EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME BEFORE THE EXPIRATION DATE.
To participate in the Exchange Offer, your clients must tender by having you
execute for them a book-entry transfer of tendered Old Capital Securities into
the account of The Bank of New York, as Exchange Agent, at The Depository
Trust Company ("DTC") using DTC's Automated Tender Offer Program. Your clients
may also tender by having certificates representing the Old Capital
Securities, a duly executed and properly completed Letter of Transmittal (or
facsimile thereof), with any required signature guarantees, and any other
required documents delivered to such Exchange Agent. The Letter of Transmittal
and the Prospectus should be consulted for complete instructions and
information about participation in the Exchange Offer.
If holders of Old Capital Securities wish to tender, but it is impracticable
for them to forward their certificates for Old Capital Securities prior to the
expiration of the Exchange Offer or to comply with the book-entry transfer
procedures on a timely basis, a tender may be effected by following the
guaranteed delivery procedures described in the Prospectus under "The Exchange
Offer--Procedures for Tendering Old Capital Securities--Guaranteed Delivery."
<PAGE>
The Trust will, upon request, reimburse brokers, dealers, commercial banks
and trust companies for reasonable and necessary costs and expenses incurred
by them in forwarding the Prospectus and the related documents to the
beneficial owners of Old Capital Securities held by them as nominee or in a
fiduciary capacity. The Trust will pay or cause to be paid all stock transfer
taxes applicable to the exchange of Old Capital Securities pursuant to the
Exchange Offer, except as set forth in Instruction 6 of the Letter of
Transmittal.
Any inquiries you may have with respect to the Exchange Offer, or requests
for additional copies of the enclosed materials, should be directed to The
Bank of New York, the Exchange Agent for the Old Capital Securities, at its
address and telephone number set forth on the front of the Letter of
Transmittal.
Very truly yours,
FIRST USA CAPITAL TRUST I
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF THE TRUST, THE CORPORATION OR THE EXCHANGE AGENT, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS
ON BEHALF OF ANY OF THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR
STATEMENTS EXPRESSLY MADE IN THE PROSPECTUS OR THE LETTER OF TRANSMITTAL.
Enclosures
2
<PAGE>
EXHIBIT 99.4
FIRST USA CAPITAL TRUST I
OFFER FOR ALL OUTSTANDING
9.33% SERIES A CAPITAL SECURITIES
IN EXCHANGE FOR
9.33% SERIES B CAPITAL SECURITIES
To Our Clients:
Enclosed for your consideration is a Prospectus dated May 20, 1997 (the
"Prospectus"), and the related letter of transmittal (the "Letter of
Transmittal"), relating to the offer (the "Exchange Offer") of First USA
Capital Trust I (the "Trust") and First USA, Inc. (the "Corporation") to
exchange the Trust's 9.33% Series B Capital Securities (the "New Capital
Securities") for any and all of the Trust's outstanding 9.33% Series A Capital
Securities (the "Old Capital Securities"), upon the terms and subject to the
conditions described in the Prospectus. The Exchange Offer is being made in
order to satisfy certain obligations of the Trust and the Corporation
contained in the registration rights agreement dated December 20, 1996, among
the Trust, the Corporation and the initial purchasers referred to therein.
This material is being forwarded to you as the beneficial owner of the Old
Capital Securities carried by us in your account but not registered in your
name. A TENDER OF SUCH OLD CAPITAL SECURITIES MAY ONLY BE MADE BY US AS THE
HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS.
Accordingly, we request instructions as to whether you wish us to tender on
your behalf the Old Capital Securities held by us for your account, pursuant
to the terms and conditions set forth in the enclosed Prospectus and Letter of
Transmittal.
Your instructions should be forwarded to us as promptly as possible in order
to permit us to tender the Old Capital Securities on your behalf in accordance
with the provisions of the Exchange Offer. The Exchange Offer shall expire at
9:00 a.m., New York City time, on June 19, 1997, or on such later date or time
to which the Corporation or the Trust may extend the Exchange Offer. Any Old
Capital Securities tendered pursuant to the Exchange Offer may be withdrawn at
any time before the Expiration Date.
You attention is directed to the following:
1. The Exchange Offer is for any and all Old Capital Securities.
2. The Exchange Offer is subject to certain conditions set forth in the
Prospectus in the section captioned "The Exchange Offer--Conditions to the
Exchange Offer."
3. Any transfer taxes incident to the transfer of Old Capital Securities
from the holder to the Corporation will be paid by the Trust, except as
otherwise provided in the Instructions in the Letter of Transmittal.
4. The Exchange Offer expires at 9:00 a.m., New York City time, on June
19, 1997, or on such later date or time to which the Corporation or the
Trust may extend the Exchange Offer.
If you wish to have us tender your Old Capital Securities, please so
instruct us by completing, executing and returning to us the instruction form
on the back of this letter. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR
INFORMATION ONLY AND MAY NOT BE USED DIRECTLY BY YOU TO TENDER OLD CAPITAL
SECURITIES.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE EXCHANGE OFFER
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Exchange Offer made by First USA
Capital Trust I with respect to its Old Capital Securities.
This will instruct you to tender the Old Capital Securities held by you for
the account of the undersigned, upon and subject to the terms and conditions
set forth in the Prospectus and the related Letter of Transmittal.
Please tender the Old Capital Securities held by you for my account as
indicated below:
AGGREGATE PRINCIPAL AMOUNT AT MATURITY OF OLD
CAPITAL SECURITIES TENDERED
9.33% Series A
Securities
----------------------------------------------------
[_]Please do not tender
any Old Capital
Securities held by
you for my account.
----------------------------------------------------
----------------------------------------------------
Signature(s)
----------------------------------------------------
Dated: ___________ , 1997 Please print name(s) here
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
Addresses
----------------------------------------------------
Area Code and Telephone Number
----------------------------------------------------
Tax Identification or Social Security No(s).
None of the Old Capital Securities held by us for your account will be
tendered unless we receive written instructions from you to do so. Unless a
specific contrary instruction is given in the space provided, your
signature(s) hereon shall constitute an instruction to us to tender all the
Old Capital Securities held by us for your account.
2
