<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 8, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
--------------
WASHINGTON, D.C. 20549
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------
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 DELAWARE
(STATE OR OTHER JURISDICTION OF (STATE OR OTHER
INCORPORATION OR ORGANIZATION) JURISDICTION OF
INCORPORATION OR
ORGANIZATION)
6153
(PRIMARY STANDARD INDUSTRIAL 6719
CLASSIFICATION CODE NUMBER) (PRIMARY STANDARD
INDUSTRIAL
CLASSIFICATION CODE
75-2291060 NUMBER)
(I.R.S. EMPLOYER IDENTIFICATION 75-2681598
NO.) (I.R.S. EMPLOYER
IDENTIFICATION NO.)
1601 ELM STREET
DALLAS, TEXAS 75201
(214) 849-3738
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
--------------
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. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
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<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) FEE(2)
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<S> <C> <C> <C> <C>
Series B Capital
Securities of First USA
Capital Trust I........ $200,000,000 100% $200,000,000 $60,606.07
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Series B Junior
Subordinated Deferrable
Interest Debentures of
First USA, Inc.(2).....
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First USA, Inc. Series B
Guarantee with respect
to Series B Capital
Securities(3)..........
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Total................... $200,000,000(4) 100% $200,000,000(5) $60,606.07
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</TABLE>
(1) Estimated solely for the purpose of computing the registration fee.
(2) No separate consideration will be received for the Series B Junior
Subordinated Deferrable Interest Debentures of First USA, Inc. (the "New
Junior Subordinated Debentures") distributed upon any liquidation of First
USA Capital Trust I.
(3) No separate consideration will be received for the First USA, Inc. Series
B Guarantee.
(4) This Registration Statement is deemed to cover rights of holders of New
Junior Subordinated Debentures under the Indenture, the rights of holders
of Series B Capital Securities of First USA Capital Trust I (the "New
Capital Securities") under the Trust Agreement, the rights of holders of
the New Capital Securities under the Series B Guarantee and certain backup
undertakings as described herein.
(5) Such amount represents the liquidation amount of the New Capital
Securities to be exchanged hereunder and the principal amount of New
Junior Subordinated Debentures that may be distributed to holders of the
New Capital Securities upon any liquidation of First USA Capital Trust I.
--------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MAY 8, 1997
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.
[FIRST USA LOGO]
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 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, 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 are first being mailed to all
holders of Old Capital Securities on , 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.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURI-
TIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1997.
<PAGE>
(Continued from the previous page)
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.
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,"
and together with the Capital Securities, the "Trust 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 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 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
2
<PAGE>
(Continued from the previous page)
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. 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") 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
3
<PAGE>
(Continued from the previous page)
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 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
4
<PAGE>
(Continued from the previous page)
"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 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 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
5
<PAGE>
(Continued from the previous page)
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 5:00
p.m., New York City time, on , 1997 (such time on such date being
hereinafter called the "Expiration Date"), unless the Exchange Offer is
extended by the Corporation or the Trust (in which case the term "Expiration
Date" shall mean the latest date and time to which the Exchange Offer is
extended). Tenders of Old Capital Securities may be withdrawn at any time on
or prior to the Expiration Date. The Exchange Offer is not conditioned upon
any minimum Liquidation Amount of Old Capital Securities being tendered for
exchange. However, the Exchange Offer is subject to certain events and
conditions which may be waived by the Corporation or the Trust and to the
terms and provisions of the Registration Rights Agreement. Old Capital
Securities may be tendered in whole or in part having an aggregate Liquidation
Amount of not less than $100,000 (100 Capital Securities) or any integral
multiple of $1,000 Liquidation Amount (one Capital Security) in excess
thereof. The Corporation has agreed to pay all expenses of the Exchange Offer.
See "The Exchange Offer--Fees and Expenses." Holders of the Old Capital
Securities whose Old Capital Securities are accepted for exchange will not
receive Distributions on such Old Capital Securities and will be deemed to
have waived the right to receive any Distributions on such Old Capital
Securities accumulated from and after December 20, 1996. See "The Exchange
Offer--Distributions on Capital Securities."
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."
----------------
6
<PAGE>
(Continued from the previous page)
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THIS EXCHANGE
OFFER AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION OR THE TRUST. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE CORPORATION OR THE TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER OR A SOLICITATION BY ANYONE IN ANY JURISDICTION
IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR 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............................ 48
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................................ 61
ERISA Considerations..................................................... 65
Plan of Distribution..................................................... 66
Validity of New Securities............................................... 66
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, files 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 and December 31, 1996, each as amended by
the respective Amendment No. 1 on Form 10-Q/A filed April 24, 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 in 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;
and
2. BANC ONE's Current Reports on Form 8-K filed January 28, 1997, January
29, 1997, April 17, 1997 and April 24, 1997.
8
<PAGE>
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 , 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).
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>
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............. 5:00 p.m., New York City time, on , 1997, un-
less the Exchange Offer is extended by the Corpo-
ration or the Trust (in which case the Expiration
Date will be the latest date and time to which
the Exchange Offer is extended). See "The Ex-
change Offer--Terms of the Exchange Offer."
Conditions to the Exchange
Offer...................... The Exchange Offer is subject to certain condi-
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..... Tendering holders of Old Capital Securities must
complete and sign a Letter of Transmittal in ac-
cordance with the instructions contained therein
and forward the same by mail, facsimile or hand
delivery, together with any other required docu-
ments, to the Exchange Agent, either with the Old
Capital Securities to be tendered or in compli-
ance with the specified procedures for guaranteed
delivery of Old
12
<PAGE>
Capital Securities. Certain brokers, dealers,
commercial banks, trust companies and other nomi-
nees may also effect tenders by book-entry trans-
fer. Holders of Old Capital Securities registered
in the name of a broker, dealer, commercial bank,
trust company or other nominee are urged to con-
tact such person promptly if they wish to tender
Old Capital Securities pursuant to the Exchange
Offer. 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 "Exchange
Agent"). The addresses, and telephone and facsim-
ile numbers, of the Exchange Agent are set forth
in "The Exchange Offer--Exchange Agent" and in
the Letter of Transmittal.
Use of Proceeds............. Neither the Corporation nor the Trust will 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 (as
defined herein) to the extent and in the manner
set forth in the Indenture. See "Description of
Junior Subordinated Debentures." The New Guaran-
tee will rank pari passu with the Old Guarantee,
and all other guarantees (if any) to be issued by
the Corporation with respect to capital securi-
ties (if any) issued or to be issued by Other
Trusts ("Other Guarantees") and will constitute
an unsecured obligation of the Corporation and
will rank subordinate and junior in right of pay-
ment to all Senior Indebtedness to the extent and
in the manner set forth in the Guarantee Agree-
ment. See "Description 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 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 BANC
ONE and the Corporation on an historical basis.
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 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 financial data for the
Corporation for the periods ended December 31, 1996 and 1995 is unaudited and
should be read in conjunction with the Corporation's Quarterly Report on Form
10-Q for the quarterly period ended December 31, 1996 (as amended by Amendment
No. 1 on Form 10-Q/A filed April 24, 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 BANC ONE
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
1996 1995 1994 1993 1992
------------ ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Total interest income
and other income....... $ 10,272,356 $ 8,970,888 $ 7,777,941 $ 7,547,130 $ 7,740,657
Income from continuing
operations............. 1,426,533 1,277,863 1,005,109 1,172,103 922,227
Income from continuing
operations per common
share.................. 3.23 2.91 2.20 2.62 2.06
Historical cash
dividends declared per
common share........... 1.36 1.24 1.13 0.97 0.81
Total assets (end of
period)................ 101,848,087 90,453,963 88,922,586 84,834,656 81,304,864
Long-term borrowings
(end of period)........ 4,189,513 2,720,373 1,866,448 1,805,272 1,396,797
Total stockholders'
equity
(end of period)........ 8,646,960 8,197,478 7,564,860 7,433,170 6,594,813
</TABLE>
RECENT DEVELOPMENTS--BANC ONE
1997 FIRST QUARTER RESULTS OF BANC ONE
On April 15, 1997, BANC ONE announced its financial results for the quarterly
period ended March 31, 1997.
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31,
-----------------------------
1997 1996
-------------- --------------
(UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT
PER SHARE DATA)
<S> <C> <C>
Interest income................................. $ 2,124,161 $ 1,984,982
Income before income taxes...................... 566,045 516,055
Net income...................................... 370,665 345,881
Net income per common share..................... 0.86 0.77
Weighted average common shares outstanding
(000).......................................... 426,146 444,027
</TABLE>
18
<PAGE>
LIBERTY BANCORP, INC. MERGER
On December 28, 1996, BANC ONE OKLAHOMA CORPORATION ("BANC ONE OKLAHOMA") and
Liberty Bancorp, Inc. ("LBI") entered into a merger agreement dated as of
December 28, 1996, which provides for the merger (the "LBI Merger") of LBI with
and into BANC ONE OKLAHOMA, an Oklahoma corporation and a wholly-owned
subsidiary of BANC ONE. On March 31, 1997, the requisite vote of LBI
shareholders was received in favor of the LBI Merger. On April 29, 1997, the
Federal Reserve Board announced its approval of the LBI Merger. The LBI Merger
remains subject to other customary conditions. Pursuant to the merger agreement
relating to the LBI Merger, each share of common stock of LBI, par value $.01
per share, will be converted into 1.175 shares of BANC ONE's common stock. BANC
ONE expects to issue a maximum of approximately 12.2 million shares of BANC
ONE's common stock in connection with the LBI Merger. Although no assurances
can be given, BANC ONE currently expects that the LBI Merger will be
consummated in the second quarter of BANC ONE's 1997 fiscal year.
SELECTED HISTORICAL FINANCIAL DATA OF THE CORPORATION
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
DECEMBER 31, YEAR ENDED JUNE 30,
---------------------- ------------------------------------------------------
1996 1995 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....... $ 1,037,372 $ 796,552 $1,633,742 $1,192,059 $ 815,760 $ 495,947 $ 437,288
Income from continuing
operations............. 143,188 113,962 246,736 178,422 150,934 40,484 18,891
Income from continuing
operations per common
share.................. 1.05 0.86 1.84 1.36 1.23 0.36 0.16
Historical cash
dividends declared per
common share........... 0.105 0.06 0.12 0.06 0.04 0.025 --
Total assets (end of
period)................ 10,278,579 7,397,120 7,708,501 6,379,116 5,573,767 3,380,433 2,493,390
Long-term borrowings
(end of period)........ 1,743,448 1,230,765 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)........ 1,278,350 881,557 1,113,880 764,815 574,547 212,898 146,965
</TABLE>
RECENT DEVELOPMENTS--THE CORPORATION
FINANCIAL RESULTS
On April 24, 1997, the Corporation announced its financial results for the
three months ended March 31, 1997.
The Corporation's reported net income for the quarter was $24.1 million, or
$0.17 per share, compared with restated net income of $85.0 million, or $0.63
per share, for the quarter ended March 31, 1996.
Managed loans outstanding at the end of the quarter were $23.2 billion,
compared with $18.3 billion at March 31, 1996. The Corporation's net interest
margin on managed loans for the quarter was 6.41%, compared with 6.06% for the
quarter ended March 31,1996. The Corporation's net credit loss rate on managed
loans for the quarter was 5.01%, compared with 3.36% for the quarter ended
March 31,1996. The delinquency rate on managed loans at the end of the quarter
was 4.96%, compared with 4.04% at March 31, 1996.
19
<PAGE>
RESTATEMENT OF FINANCIAL STATEMENTS
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
Statement of Financial Accounting Standards 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 change relating to the recording of gains on securitizations
will reduce previously expected earnings by $176 million for the twelve months
ending December 31, 1997. 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 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 December 31,
1996, 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 December 31, 1996, 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 has 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 will increase by
0.25% per annum until the Exchange Offer is consummated. Upon consummation of
the Exchange Offer, holders of Old Capital Securities will not be entitled to
any increase in the Distribution rate thereon or any further registration
rights under the Registration Rights Agreement, except under limited
circumstances. See "Description of Old 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
Issuance of the New Capital Securities in exchange for Old Capital
Securities pursuant to the Exchange Offer will be made only after a timely
receipt by the Trust of such Old Capital Securities, a properly completed and
duly executed Letter of Transmittal and all other required documents.
Therefore, holders of the 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 of the Registrants is under
any 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.
At June 30, 1996 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 nonbanking 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.
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 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
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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, 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.
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>
SIX MONTHS
ENDED YEAR ENDED JUNE 30,
DECEMBER 31, ------------------------------
1996 1996 1995 1994(1) 1993 1992
------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed
Charges:
Including interest-bearing
deposits........................ 2.04x 1.98x 1.91x 2.17x 1.44x 1.15x
Excluding interest-bearing
deposits........................ 2.31 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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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 has 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 will increase by 0.25% per
annum until the Exchange Offer is consummated. Upon consummation of the
Exchange Offer, holders of Old Capital Securities will not be entitled to any
increase in the Distribution rate thereon or any further registration rights
under the Registration Rights Agreement, except under limited circumstances.
See "Risk Factors--Consequences of a Failure to Exchange Old Capital
Securities" and "Description of Old Securities."
The Exchange Offer is not being made to, nor will the Trust accept tenders
for exchange from, holders of Old Capital Securities in any jurisdiction in
which the Exchange Offer or the acceptance thereof would not be in compliance
with the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect to the
Exchange Offer means any person in whose name the Old Capital Securities are
registered on the books of the Trust or any other person who has obtained a
properly completed bond power from the registered holder, or any person whose
Old Capital Securities are held of record by The Depository Trust Company
("DTC") who desires to deliver such Old Capital Securities by book-entry
transfer at DTC.
Pursuant to the Exchange Offer, the Corporation will exchange, 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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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 5:00 p.m., New York City time, on , 1997
unless the Exchange Offer is extended by the Corporation or the Trust (in
which case the term "Expiration Date" shall mean the latest date and time to
which the Exchange Offer is extended).
The Corporation and the Trust expressly reserve the right in their sole and
absolute discretion, subject to applicable law, at any time and from time to
time, (i) to delay the acceptance of the Old Capital Securities for exchange,
(ii) to terminate the Exchange Offer (whether or not any Old Capital
Securities have theretofore been accepted for exchange) if the Trust
determines, in its sole and absolute discretion, that any of the events or
conditions referred to under "--Conditions to the Exchange Offer" have
occurred or exist or have not been satisfied, (iii) to extend the Expiration
Date of the Exchange Offer and retain all Old Capital Securities tendered
pursuant to the Exchange Offer, subject, however, to the right of holders of
Old Capital Securities to withdraw their tendered Old Capital Securities as
described under "--Withdrawal Rights," and (iv) to waive any condition or
otherwise amend the terms of the Exchange Offer in any respect. If the
Exchange Offer is amended in a manner determined by the Corporation and the
Trust to constitute a material change, or if the Corporation and the Trust
waive a material condition of the Exchange Offer, the Corporation and the
Trust will promptly disclose such amendment by means of a prospectus
supplement that will be distributed to the holders of the Old Capital
Securities, and the Corporation and the Trust will extend the Exchange Offer
to the extent required by Rule 14e-1 under the Exchange Act.
Any such delay in acceptance, extension, termination or amendment will be
followed promptly by oral or written notice thereof to the Exchange Agent and
by making a public announcement thereof, and such announcement in the case of
an extension will be made no later than 9:00 a.m., New York City time, on the
next
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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 to validly tendering holders. Such
exchange will be made promptly after the Expiration Date. If for any reason
whatsoever, acceptance for exchange or the exchange of any Old Capital
Securities tendered pursuant to the Exchange Offer is delayed (whether before
or after the Trust's acceptance for exchange of Old Capital Securities) or the
Trust extends the Exchange Offer or is unable to accept for exchange or
exchange Old Capital Securities tendered pursuant to the Exchange Offer, then,
without prejudice to the Trust's rights set forth herein, the Exchange Agent
may, nevertheless, on behalf of the Trust and subject to Rule 14e-1(c) under
the Exchange Act, retain tendered Old Capital Securities and such Old Capital
Securities may not be withdrawn except to the extent tendering holders are
entitled to withdrawal rights as described under "--Withdrawal Rights."
Pursuant to the Letter of Transmittal, a holder of Old Capital Securities
will warrant and agree in the Letter of Transmittal 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.
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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, or an Agent's Message (in the case of a book-
entry transfer) 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.
Book-Entry Transfer. 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
financial institution that is a participant in DTC's book-entry transfer
facility system 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 procedures for transfers.
However, although delivery of Old Capital Securities may be effected through
book-entry transfer into the Exchange Agent's account at DTC, the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or an Agent's Message in connection with a
book-entry delivery of Old Capital Securities, and any other required
documents, must in any case be delivered to and received by the Exchange Agent
at its address 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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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,
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 Department
Attention: Reorganization Department 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.
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
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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 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
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<PAGE>
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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<PAGE>
<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, 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 (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price 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 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,
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 Guarantee Agreement will be qualified under the Trust Indenture Act upon
effectiveness of this Registration Statement. This summary of certain
provisions of the Guarantee Agreement 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 Agreement, 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 has 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 will 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 will accrue
(in addition to the stated Distribution rate on the Old Capital Securities) at
the rate of 0.25% per annum on the Liquidation Amount of the Old Capital
Securities, for the period from the occurrence of such event until such time as
such required Exchange Offer is consummated or any required Shelf Registration
Statement is effective. The New Securities are not, and upon consummation of
the Exchange Offer the Old Securities will not be, entitled to any such
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.
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
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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.
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.
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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 income tax purposes, constitute a taxable disposition of the
redeemed Capital Securities, and a holder could
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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 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 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 the
65
<PAGE>
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 broker-dealer that receives 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 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 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 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 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 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 Capital Securities offered hereby. Capital Securities received
by broker-dealers for their own accounts in connection with the Exchange Offer
may be sold from time to time in one or more transactions in the over-the-
counter market, in negotiated transactions, through the writing of options on
the 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 Capital Securities.
Any broker-dealer that resells 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 Capital Securities may be
deemed to be an "underwriter" within the meaning of the Securities Act, and any
profit on any such resale of Capital Securities and any commissions or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The Letter of Transmittal states that by
acknowledging that it will deliver and by delivering a prospectus, a broker-
dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
VALIDITY OF NEW SECURITIES
The validity of the New Capital Securities, as obligations of the Trust, and
the validity of 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.
66
<PAGE>
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 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
</TABLE>
- --------
* To be filed by amendment.
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 the 8th day of May,
1997.
First USA, Inc.
/s/ Philip E. Taken
By___________________________________
PHILIP E. TAKEN
II-4
<PAGE>
POWER OF ATTORNEY
We, the undersigned directors and officers of First USA, Inc. and each of
us, do hereby constitute and appoint Philip E. Taken, our true and lawful
attorney and agent, with power of substitution, to do any and all acts and
things in our name and behalf in our capacities as directors and officers and
to execute any and all instruments for us and in our names in the capacities
indicated above, which said attorney and agent may deem necessary or advisable
to enable said corporation to comply with the Securities Act of 1933, as
amended, and any rules, regulations and requirements of the Securities and
Exchange Commission (the "Commission"), in connection with this Registration
Statement on Form S-4, and any and all amendments to said Registration
Statement and all instruments necessary or incidental in connection therewith,
including specifically, but without limitation, power and authority to sign
for us or any of us in our names, in the capacities indicated below, any and
all amendments hereto, and to file the same with the Commission. Said attorney
shall have full power and authority to do and perform in the name and on
behalf of each of the undersigned, in any and all capacities, every act
whatsoever requisite or necessary to be done in the premises as fully and to
all intents and purposes as each of the undersigned might or could do in
person, hereby ratifying and approving the acts of said attorneys and each of
them.
SIGNATURE TITLE DATE
/s/ John C. Tolleson Chairman, Chief May 8, 1997
- ------------------------------------- Executive Officer
(JOHN C. TOLLESON) and Director (Chief
Executive Officer)
/s/ Richard W. Vague President and May 8, 1997
- ------------------------------------- Director
(RICHARD W. VAGUE)
/s/ Jack M. Antonini Vice Chairman and May 8, 1997
- ------------------------------------- Chief Financial
(JACK M. ANTONINI) Officer (Principal
Financial and
Accounting Officer)
/s/ Gerald S. Armstrong Director May 8, 1997
- -------------------------------------
(GERALD S. ARMSTRONG)
/s/ Gene H. Bishop Director May 8, 1997
- -------------------------------------
(GENE H. BISHOP)
Director May , 1997
- -------------------------------------
(CHARLES T. RUSSELL)
/s/ Rupinder S. Sidhu Director May 8, 1997
- -------------------------------------
(RUPINDER S. SIDHU)
/s/ Roger T. Staubach Director May 8, 1997
- -------------------------------------
(ROGER T. STAUBACH)
Director May , 1997
- -------------------------------------
(CARL H. WESTCOTT)
II-5
<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 THE 8TH DAY OF MAY,
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-6
<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. (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
</TABLE>
- --------
* To be filed by amendment.
2
<PAGE>
EXHIBIT 4.3
CERTIFICATE OF TRUST
OF
FIRST USA CAPITAL TRUST I
This Certificate of Trust is being executed as of December 11, 1996
for the purposes of organizing a business trust pursuant to the Delaware
Business Trust Act, 12 Del. C. (S)(S) 3801 et seq. (the "Act").
---- -- -- ---
The undersigned hereby certifies as follows:
1. Name. The name of the business trust is "First USA Capital Trust
----
I" (the "Trust").
2. Delaware Trustee. The name and business address of the Delaware
----------------
resident trustee of the Trust meeting the requirements of Section 3807 of the
Act are as follows:
The Bank of New York (Delaware)
23 White Clay Center
Route 273
Newark, Delaware 19711
3. Effective. This Certificate of Trust shall be effective
---------
immediately upon filing in the Office of the Secretary of State of the State of
Delaware.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being all of the trustees of the
Trust, have duly executed this Certificate of Trust as of the day and year first
above written.
The Bank of New York (Delaware),
as Delaware Trustee
By: /s/ Joseph G. Ernst
--------------------------
Name: Joseph G. Ernst
Title: Assistant Vice President
ADMINISTRATIVE TRUSTEE
By: /s/ Peter W. Atwater
---------------------------
Name: Peter W. Atwater
Title:
ADMINISTRATIVE TRUSTEE
By: /s/ Jack M. Antonini
-------------------------------
Name: Jack M. Antonini
Title:
ADMINISTRATIVE TRUSTEE
By: /s/ Philip Taken
----------------------------
Name: Philip E. Taken
Title:
FIRST USA, INC.,
as Sponsor
By: /s/ Philip Taken
-----------------------------
Name: Philip E. Taken
Title:
<PAGE>
EXHIBIT 4.4
________________________________________________________________________________
DECLARATION OF TRUST
First USA Capital Trust I
Dated as of December 11, 1996
________________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
ARTICLE I
DEFINITIONS
<S> <C> <C>
SECTION 1.1 Definitions................................ 1
ARTICLE II
ORGANIZATION
SECTION 2.1 Name....................................... 4
SECTION 2.2 Office..................................... 5
SECTION 2.3 Purpose.................................... 5
SECTION 2.4 Authority.................................. 5
SECTION 2.5 Title to Property of the Trust............. 5
SECTION 2.6 Powers of the Trustees..................... 6
SECTION 2.7 Filing of Certificate of Trust............. 7
SECTION 2.8 Duration of Trust.......................... 7
SECTION 2.9 Responsibilities of the Sponsor............ 7
SECTION 2.10 Declaration Binding on Holders
of Securities............................. 8
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees................................... 8
SECTION 3.2 Delaware Trustee........................... 9
SECTION 3.3 Execution of Documents..................... 9
SECTION 3.4 Not Responsible for Recitals
or Sufficiency of Declaration.............. 10
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 Exculpation................................ 10
SECTION 4.2 Fiduciary Duty............................. 11
SECTION 4.3 Indemnification............................ 12
SECTION 4.4 Outside Businesses......................... 16
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments................................. 17
SECTION 5.2 Termination of Trust....................... 17
SECTION 5.3 Governing Law.............................. 17
SECTION 5.4 Headings................................... 18
SECTION 5.5 Successors and Assigns..................... 18
SECTION 5.6 Partial Enforceability..................... 18
SECTION 5.7 Counterparts............................... 18
</TABLE>
i
<PAGE>
DECLARATION OF TRUST
OF
FIRST USA CAPITAL TRUST I
December 11, 1996
DECLARATION OF TRUST ("Declaration") dated and effective as of
December 11, 1996 by the Trustees (as de fined herein), the Sponsor (as defined
herein), and by the holders, from time to time, of undivided beneficial
interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor desire to establish a trust (the
"Trust") pursuant to the Business Trust Act (as defined herein) for the sole
purpose of (i) issuing and selling certain securities representing undivided
beneficial interests in the assets of the Trust (ii) holding certain Debentures
of the Debenture Issuer (each as defined herein) and (iii) engaging in only
those other activities necessary, advisable or incidental thereto; and
NOW, THEREFORE, it being the intention of the parties hereto that the
Trust constitute a business trust under the Business Trust Act and that this
Declaration constitutes the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions
-----------
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this
Section 1.1;
<PAGE>
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to this
Declaration of Trust as modified, supplemented or amended from time to
time;
(d) all references in this Declaration to Articles and Sections are to
Articles and Sections of this Declaration unless otherwise specified;
(e) a reference to the singular includes the plural and vice versa;
(f) a reference to any Person shall include its successors and assigns;
(g) a reference to any agreement or instrument shall mean such agreement
or instrument as supplemented, modified, amended and restated and in
effect from time to time; and
(h) a reference to any statute, law, rule or regulation, shall include any
amendments thereto and any successor, statute, law, rule or
regulation.
"Administrative Trustee" means any Trustee other than the Delaware
----------------------
Trustee and Property Trustees.
"Affiliate" has the same meaning as given to that term in Rule 405 of
---------
the Securities Act or any successor rule thereunder.
"Business Day" means any day other than a day on which banking
------------
institutions in New York, New York or in Dallas, Texas are authorized or
required by any applicable law or executive order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
------------------
Code, 12 Del. C. (S)(S) 3801 et seq., as it may be amended from time to time, or
--- - -- ---
any successor legislation.
"Capital Security" means a security representing an undivided
----------------
interest in the assets of the Trust with
2
<PAGE>
such terms as may be set out in any amendment to this Declaration.
"Commission" means the Securities and Exchange Commission.
----------
"Common Security" means a security representing an undivided
---------------
beneficial interest in the assets of the Trust with such terms as may be set out
in any amendment to this Declaration.
"Company Indemnified Person" means (a) any Administrative Trustee; (b)
--------------------------
any Affiliate of any Administrative Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Administrative Trustee; or (d) any employee or agent of the Trust or its
Affiliates.
"Covered Person" means any officer, director, shareholder, partner,
--------------
member, representative, employee or agent of the Trust or the Trust's
Affiliates.
"Debenture Issuer" means First USA in its capacity as the issuer of
----------------
the Debentures under the Indenture.
"Debentures" means Debentures to be issued by the Debenture Issuer and
----------
acquired by the Trust.
"Debenture Trustee" means the original trustee under the Indenture
-----------------
until a successor is appointed thereunder, and thereafter means any such
successor trustee.
"Delaware Trustee" has the meaning set forth in Section 3.1.
----------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended
------------
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
----------------------------
4.3(b).
"First USA" means First USA, Inc., a Delaware corporation or any
---------
successor entity in a merger.
3
<PAGE>
"Indemnified Person" means a Company Indemnified Person or a
------------------
Fiduciary Indemnified Person.
"Indenture" means the indenture to be entered into between First USA
---------
and the Debenture Trustee pursuant to which the Debentures are to be issued.
"Person" means a legal person, including any individual, corporation,
------
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Property Trustee" has the meaning set forth in Section 3.1.
----------------
"Securities" means collectively the Common Securities and the Capital
----------
Securities.
"Securities Act" means the Securities Act of 1933, as amended from
--------------
time to time, or any successor legislation.
"Sponsor" means First USA in its capacity as sponsor of the Trust.
-------
"Trustee" or "Trustees" means each Person who has signed this
------- --------
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and reference herein to a Trustee or the Trustees shall refer
to such Person or Persons solely in their capacity as trustees hereunder.
ARTICLE II
ORGANIZATION
SECTION 2.1 Name
----
The Trust created by this Declaration is named "First USA Capital
Trust I". The Trust's activities may be conducted under the name of the Trust or
any other name deemed advisable by the Administrative Trustees.
4
<PAGE>
SECTION 2.2 Office
------
The address of the principal office of the Trust is First USA, Inc.,
1601 Elm Street, Dallas, Texas 75201, Attention: Peter W. Atwater. On ten
Business Days written notice to the holders of Securities, the Administrative
Trustees may designate another principal office.
SECTION 2.3 Purpose
-------
The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities, (b) purchase and hold certain Debentures of the Debenture
Issuer and (c) engage in only those other activities necessary, advisable or
incidental thereto. The Trust shall not borrow money, issue debt or reinvest
proceeds derived from investments, pledge any of its assets, or otherwise
undertake (or permit to be undertaken) any activity that would cause the Trust
not to be classified for United States federal income tax purposes as a grantor
Trust.
SECTION 2.4 Authority
---------
Subject to the limitations provided in this Declaration, the
Administrative Trustees shall have exclusive and complete authority to carry out
the purposes of the Trust. An action taken by the Administrative Trustees in
accordance with their powers shall constitute the act of and serve to bind the
Trust. In dealing with the Administrative Trustees acting on behalf of the
Trust, no person shall be required to inquire into the authority of the
Administrative Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Administrative
Trustees as set forth in this Declaration.
SECTION 2.5 Title to Property of the Trust
------------------------------
Legal title to all assets of the Trust shall be vested in the Trust.
5
<PAGE>
SECTION 2.6 Powers of the Trustees
----------------------
The Administrative Trustees shall have the exclusive power and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Capital Securities and the Common Securities
in accordance with this Declaration; provided, however, that the Trust may issue
-------- -------
no more than one series of Capital Securities and no more than one series of
Common Securities, and, provided further, that there shall be no interests in
-------- -------
the Trust other than the Securities;
(b) in connection with the issue and sale of the Capital Securities,
at the direction of the Sponsor, to:
(i) execute, if necessary, an offering memorandum (the "Offering
Memorandum") in preliminary and final form prepared by the Sponsor, in
relation to the offering and sale of Capital Securities (i) to qualified
institutional buyers in reliance on Rule 144A under the Securities Act of
1933, as amended (the "Securities Act") and (ii) to institutional
"accredited investors" (as defined in Rule 501(a)(1),(2),(3) or (7) under
the Securities Act);
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary in order to
qualify or register all or part of the Capital Securities in any State or
foreign jurisdiction in which the Sponsor has determined to qualify or
register such Capital Securities for sale;
(iii) execute and deliver letters, documents, or instruments with
The Depository Trust Company relating to the Capital Securities;
(iv) execute and enter into subscription agreements, purchase
agreements, registration rights agreements and other related agreements
providing for the sale of the Common Securities and the Capital Securities;
6
<PAGE>
(c) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and provide for reasonable compensation for such services;
(d) to incur expenses that are necessary or incidental to carry out
any of the purposes of this Declaration, which expenses shall be paid for by the
Sponsor in al respects; and
(e) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
SECTION 2.7 Filing of Certificate of Trust
------------------------------
On or after the date of execution of this Declaration, the Trustees
shall cause the filing of the Certificate of Trust for the Trust in the form
attached hereto as Exhibit A with the Secretary of State of the State of
Delaware.
SECTION 2.8 Duration of Trust
-----------------
The Trust, absent termination pursuant to the provisions of Section
5.2, shall have existence for thirty-one (31) years from the date hereof.
SECTION 2.9 Responsibilities of the Sponsor
-------------------------------
In connection with the issue and sale of the Capital Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare the Offering Memorandum, including any amendments or
supplements thereto;
(b) to determine the States and foreign jurisdictions in which to ask
appropriate action to qualify or register for sale all or part of the Capital
Securities and to do any an all such acts, other than actions which must be
taken by the Trust, and advise the Trust of actions it must take, and prepare
for execution and filing any documents to be executed and filed by the Trust, as
the Sponsor deems necessary or advisable in
7
<PAGE>
order to comply with the applicable laws of any such States and foreign
jurisdictions; and
(c) to negotiate the terms of subscription agreements, purchase
agreements, registration rights and other related agreements providing for the
sale of the Common Securities and Capital Securities.
SECTION 2.10 Declaration Binding on Holders of Securities
--------------------------------------------
Every Person by virtue of having become a holder of a Security or any
interest therein in accordance with the terms of this Declaration, shall be
deemed to have expressly assented and agreed to the terms of, and shall be bound
by, this Declaration.
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees
--------
The number of Trustees initially shall be four (4), and thereafter the
number of Trustees shall be such number as shall be fixed from time to time by a
written instrument signed by the Sponsor. The Sponsor is entitled to appoint or
remove without cause any Trustee at any time; provided, however that the number
-------- -------
of Trustees shall in no event be less than two (2); provided further that (1)
-------- -------
one Trustee, in the case of a natural person, shall be a person who is a
resident of the State of Delaware or which, if not a natural person, is an
entity which has its principal place of business in the State of Delaware (the
"Delaware Trustee") and (2) there shall be at least one Administrative Trustee
who is an employee or officer of, or is affiliated with, the Sponsor.
Except as expressly set forth in this Declaration, if there are more
than two Administrative Trustees, any power of such Administrative Trustees may
be exercised by, or with the consent of, a majority of such Administrative
Trustees; provided that if there are two Administrative Trustees, any power of
--------
such Administrative Trustees shall be exercised by both Administrative Trustees;
provided further that if there is only one Adminis trative Trustee, all powers
- -------- -------
of the Administrative Trust-
8
<PAGE>
ees shall be exercised by such one Administrative Trustee.
The initial Administrative Trustee(s) shall be:
Peter W. Atwater
Jack M. Antonini
Philip E. Taken
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
Prior to the issuance of the Capital Securities and Common Securities,
the Sponsor shall appoint another trustee (the "Property Trustee") meeting the
requirements of the Trust Indenture Act of 1939, as amended, by the execution of
an amendment to this Declaration executed by the Administrative Trustees, the
Sponsor, the Property Trustee and the Delaware Trustee.
SECTION 3.2 Delaware Trustee.
----------------
Notwithstanding any other provision of this Declaration, the Delaware
Trustee shall not be entitled to exercise any of the powers, nor shall the
Delaware Trustee have any of the duties and responsibilities of the
Administrative Trustees described in this Declaration. The Delaware Trustee
shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of (S) 3807 of the Business Trust Act. Notwithstanding anything
herein to the contrary, the Delaware Trustee shall not be liable for the acts or
omissions to act of the Trust or of the Administrative Trustees except such acts
as the Delaware Trustee is expressly obligated or authorized to undertake under
this Declaration or the Business Trust Act and except for the [gross] negligence
or willful misconduct of the Delaware Trustee.
SECTION 3.3 Execution of Documents.
----------------------
(a) Unless otherwise determined by the Administrative Trustees, and
except as otherwise required by the Business Trust Act, any Administrative
Trustee is, or if there are more than two Administrative Trustees, any two
Administrative Trustees are, authorized to execute on behalf of the Trust any
documents which the Administra-
9
<PAGE>
tive Trustees have the power and authority to cause the Trust to execute
pursuant to Section 2.6; and
(b) a Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purposes of signing any documents which the Administrative
Trustees have power and authority to cause the Trust to execute pursuant to
Section 2.6.
SECTION 3.4 Not Responsible for Recitals
or Sufficiency of Declaration.
-----------------------------
The recitals contained in this Declaration shall be taken as the
statements of the Sponsor, and the Trustees do not assume any responsibility for
their correctness. The Trustees make no representations as to the value or
condition of the property of the Trust or any part thereof. The Trustees make
no representations as to the validity or sufficiency of this Declaration.
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 Exculpation.
-----------
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions; and
(b) an Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are
10
<PAGE>
within such other Person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Trust, including
information, opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts pertinent to the
existence and amount of assets from which distributions to holders of Securities
might properly be paid.
SECTION 4.2 Fiduciary Duty.
--------------
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions
of this Declaration, to the extent that they restrict the duties and
liabilities of an Indemnified Person otherwise existing at law or in equity, are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person;
(b) unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemni-
11
<PAGE>
fied Person shall not constitute a breach of this Declaration or any other
agreement contemplated herein or of any duty or obligation of the Indemnified
Person at law or in equity or otherwise; and
(c) whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests
and factors as it desires, including its own interests, and shall have
no duty or obligation to give any consideration to any interest of or
factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not
be subject to any other or different standard imposed by this
Declaration or by applicable law.
SECTION 4.3 Indemnification.
---------------
(a) (i) The Sponsor shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Trust) by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Trust, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the Company Indemnified Person did not act in
good faith and in a manner which he reasonably believed to be in or not
12
<PAGE>
opposed to the best interests of the Trust, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his conduct was
unlawful.
(ii) The Sponsor shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in the
right of the Trust to procure a judgment in its favor by reason of the fact that
he is or was a Company Indemnified Person against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Trust, except that no such indemnification shall be made in respect of any
claim, issue or matter as to which such Company Indemnified Person shall have
been adjudged to be liable to the Trust unless and only to the extent that the
Court of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such Court
of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action without
prejudice or the settlement of an action without admission of liability) in
defense of any action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 4.3(a), or in defense of any claim, issue or matter therein, he
shall be indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 4.3(a) (unless ordered by a court) shall be made by the Debenture Issuer
only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the circumstances
because he has met the applicable standard of conduct set forth in paragraphs
(i) and (ii). Such determination shall be made (1) by the Admi-
13
<PAGE>
nistrative Trustees by a majority vote of a quorum consisting of such
Administrative Trustees who were not parties to such action, suit or proceeding,
(2) if such a quorum is not obtainable, or, even if obtainable, if a quorum of
disinterested Administrative Trustees so directs, by independent legal counsel
in a written opinion, or (3) by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 4.3(a) shall be paid by the Debenture Issuer in advance of the
final disposition of such ac tion, suit or proceeding upon receipt of an
undertaking by or on behalf of such Company Indemnified Person to repay such
amount if it shall ultimately be determined that he is not entitle to be
indemnified by the Debenture Issuer as authorized in this Section 4.3(a)
Notwithstanding the foregoing, no advance shall be made by the Debenture Issuer
if a determination is reasonably and promptly made (i) by the Administrative
Trustees by a majority vote of a quorum of disinterested Administrative
Trustees, (ii) if such a quorum is not obtainable, or, even if obtainable, if a
quorum of disinterested Administrative Trustees so directs, by independent
legal counsel in a written opinion or (iii) the Common Security Holder of the
Trust, that, based upon the facts known to the Regular Trustees, counsel or the
Common Security Holder at the time such determination is made, such Company
Indemnified Person acted in bad faith or in a manner that such person did not
believe to be in or not opposed to the best interests of the Trust, or, with
respect to any criminal proceeding, that such Company Indemnified Person
believed or had reasonable cause to believe his conduct was unlawful. In no
event shall any advance be made in instances where the Administrative Trustees,
independent legal counsel or Common Security Holder reasonably determine that
such person deliberately breached his duty to the Trust or the Common Security
or Capital Security Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 4.3(a) shall not be
deemed exclusive of any other rights to which those seeking indemnification and
advancement of expenses may be enti-
14
<PAGE>
tled under any agreement, vote of stockholders or disinterested directors of
the Debenture Issuer or Capital Security Holders of the Trust or otherwise, both
as to action in his official capacity and as to action in another capacity while
holding such office. All rights to indemnification under this Section 4.3(a)
shall be deemed to be provided by a contract between the Debenture Issuer and
each Company Indemnified Person who serves in such capacity at any time while
this Section 4.3(a) is in effect. Any repeal or modification of this Section
4.3(a) shall not affect any rights or obligations then existing.
(vii) The Sponsor or the Trust may purchase and maintain on behalf of
any person who is or was a Company Indemnified Person against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Debenture Issuer would have the power to
indemnify him against such liability under the provisions of this Section
4.3(a).
(viii) For purposes of this Section 4.3(a), references to "the Trust"
shall include, in addition to the resulting or surviving entity, any constituent
entity (including any constituent of a constituent) absorbed in a consolidation
or merger, so that any person who is or was a director, trustee, officer or
employee of such constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent of
another entity, shall stand in the same position under the provisions of this
Section 4.3(a) with respect to the resulting or surviving entity as he would
have with respect to such constituent entity if its separate existence had
continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 4.3(a) shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a Company
Indemnified Person and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(b) The Sponsor agrees to indemnify the (i) the Delaware Trustee,
(ii) any Affiliate of the Delaware Trustee, and (iii) any officers, directors,
shareholders,
15
<PAGE>
members, partners, employees, representatives, nominees, custodians or agents of
the Delaware Trustee (each of the Persons in (i) through (iii) being referred to
as a "Fiduciary Indemnified Person") for, and to hold each Fiduciary Indemnified
Person harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses (including reasonable legal fees and expenses) of defending
itself against, or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The
obligation to indemnify as set forth in this Section 4.3(b) shall survive the
termination of this Declaration.
SECTION 4.4 Outside Businesses.
------------------
Any Covered Person, the Sponsor and the Delaware Trustee may engage
in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the business
of the Trust, and the Trust and the holders of Securities shall have no rights
by virtue of this Declaration in and to such independent ventures or the income
or profits derived therefrom and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. No Covered Person, the Sponsor or the Delaware Trustee shall be
obligated to present any particular investment or other opportunity to the Trust
even if such opportunity is of a character that, if presented to the Trust,
could be taken by the Trust, and any Covered Person, the Sponsor and the
Delaware Trustee shall have the right to take for its own account (individually
or as a partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Covered Person and the Delaware Trustee
may engage or be interested in any financial or other transaction with the
Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee
or agent for or may act on any committee or body of holders of, securities or
other obligations of the Sponsor or its Affiliates.
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
16
<PAGE>
SECTION 5.1 Amendments.
----------
At any time before the issue of any Securities, this Declaration may
be amended by, and only by, a written instrument executed by all of the
Administrative Trustees and the Sponsor.
SECTION 5.2 Termination of Trust.
--------------------
(a) The Trust shall terminate and be of no further force or effect:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor or the revocation of the
Sponsor's charter or of the Trust's certificate of trust;
(iii) upon the entry of a decree of judicial dissolution of the
Sponsor or the Trust; and
(iv) before the issuance of any Securities, with the consent of
all of the Adminis trative Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 5.2(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
SECTION 5.3 Governing Law.
-------------
THIS DECLARATION AND THE RIGHTS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT
REGARD TO ITS PRINCIPLES OF CONFLICT OF LAWS.
SECTION 5.4 Headings.
--------
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
17
<PAGE>
SECTION 5.5 Successors and Assigns.
----------------------
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 5.6 Partial Enforceability.
----------------------
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder
of this Declaration, or the application of such provision to persons or
circumstances other than those to which its is held invalid, shall not be
affected thereby.
SECTION 5.7 Counterparts.
------------
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
[Remainder of this page intentionally left blank.]
18
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Declaration to be
executed as of the day and year first above written.
/s/ Peter W. Atwater
------------------------------------
Name: Peter W. Atwater
As Administrative Trustee
/s/ Jack M. Antonini
------------------------------------
Name: Jack M. Antonini
As Administrative Trustee
/s/ Philip Taken
------------------------------------
Name: Philip E. Taken
As Administrative Trustee
The Bank of New York (Delaware),
as Delaware Trustee
By: /s/ Melissa Beneduce
-------------------------------
Name: Melissa J. Beneduce
Title: Assistant Vice President
FIRST USA, INC.,
as Sponsor
By: /s/ Peter W. Atwater
------------------------------------
Name: Peter W. Atwater
Title: Executive Vice President
<PAGE>
CERTIFICATE OF TRUST
OF
FIRST USA CAPITAL TRUST I
This Certificate of Trust is being executed as of December 11, 1996
for the purposes of organizing a business trust pursuant to the Delaware
Business Trust Act, 12 Del. C. (S)(S) 3801 et seq. (the "Act").
---- -- -- ---
The undersigned hereby certifies as follows:
1. Name. The name of the business trust is "First USA Capital Trust
----
I" (the "Trust").
2. Delaware Trustee. The name and business address of the Delaware
----------------
resident trustee of the Trust meeting the requirements of Section 3807 of the
Act are as follows:
The Bank of New York (Delaware)
23 White Clay Center
Route 273
Newark, Delaware 19711
3. Effective. This Certificate of Trust shall be effective
---------
immediately upon filing in the Office of the Secretary of State of the State of
Delaware.
20
<PAGE>
IN WITNESS WHEREOF, the undersigned, being all of the trustees of the
Trust, have duly executed this Certificate of Trust as of the day and year first
above written.
The Bank of New York (Delaware),
as Delaware Trustee
By: ___________________________________
Name:
Title:
ADMINISTRATIVE TRUSTEE
By: ___________________________________
Name: Peter W. Atwater
Title:
ADMINISTRATIVE TRUSTEE
By: ___________________________________
Name: Jack M. Antonini
Title:
ADMINISTRATIVE TRUSTEE
By: ___________________________________
Name: Philip E. Taken
Title:
FIRST USA, INC.,
as Sponsor
By: ___________________________________
Name: Philip E. Taken
Title:
<PAGE>
EXHIBIT 4.7
====================================
SERIES B CAPITAL SECURITIES GUARANTEE AGREEMENT
First USA, Inc.
Dated as of , 1997
====================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
ARTICLE I
DEFINITIONS AND INTERPRETATION
<S> <C> <C>
SECTION 1.1 Definitions and Interpretation.......................... 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application........................ 6
SECTION 2.2 Lists of Holders of Securities.......................... 6
SECTION 2.3 Reports by the Capital Securities
Guarantee Trustee....................................... 6
SECTION 2.4 Periodic Reports to Capital Securities
Guarantee Trustee....................................... 7
SECTION 2.5 Evidence of Compliance with Conditions
Precedent............................................... 7
SECTION 2.6 Events of Default; Waiver............................... 7
SECTION 2.7 Event of Default; Notice................................ 8
SECTION 2.8 Conflicting Interests................................... 8
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital
Securities Guarantee Trustee............................ 8
SECTION 3.2 Certain Rights of Capital Securities
Guarantee Trustee....................................... 11
SECTION 3.3. Not Responsible for Recitals or Issuance
of Series B Capital Securities Guarantee................ 13
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee;
Eligibility............................................. 13
SECTION 4.2 Appointment, Removal and Resignation of Capital
Securities Guarantee Trustee............................ 14
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee............................................... 15
SECTION 5.2 Waiver of Notice and Demand............................. 15
SECTION 5.3 Obligations Not Affected................................ 15
SECTION 5.4 Rights of Holders....................................... 16
SECTION 5.5 Guarantee of Payment.................................... 17
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 5.6 Subrogation............................................. 17
SECTION 5.7 Independent Obligations................................. 17
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.............................. 18
SECTION 6.2 Ranking................................................. 19
ARTICLE VII
TERMINATION
SECTION 7.1 Termination............................................. 19
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation............................................. 19
SECTION 8.2 Indemnification......................................... 20
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.................................. 20
SECTION 9.2 Amendments.............................................. 21
SECTION 9.3 Notices................................................. 21
SECTION 9.4 Exchange Offer.......................................... 22
SECTION 9.5 Benefit................................................. 22
SECTION 9.6 Governing Law........................................... 22
</TABLE>
ii
<PAGE>
Series B CAPITAL SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Series B Capital Securities
Guarantee"), dated as of , 1997 is executed and delivered by First
USA, Inc., a Delaware corporation (the "Guarantor"), and The Bank of New York, a
New York banking corporation, as trustee (the "Capital Securities Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the Series B Capital Securities (as defined herein) of First USA Capital
Trust I, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of December 20, 1996 among the trustees of the Issuer,
the Guarantor, as sponsor, and the holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer is issuing on
the date hereof 200,000 capital securities, having an aggregate liquidation
amount of $200,000,000, such capital securities being designated the 9.33%
Series B Capital Securities (collectively the "Series B Capital Securities") in
connection with the consummation of the Exchange Offer (as defined in the
Declaration).
WHEREAS, as incentive for the Holders to exchange the Series A Capital
Securities (as defined herein) for the Series B Capital Securities in the
Exchange Offer, the Guarantor desires irrevocably and unconditionally to agree,
to the extent set forth in this Series B Capital Securities Guarantee, to pay to
the Holders of the Series B Capital Securities the Guarantee Payments (as
defined below). The Guarantor agrees to make certain other payments on the
terms and conditions set forth herein.
WHEREAS, the Guarantor has executed and delivered a guarantee
agreement (the "Common Securities Guarantee"), with substantially identical
terms to this Series B Capital Securities Guarantee, for the benefit of the
holders of the Common Securities (as defined herein), except that if an Event of
Default (as defined in the Declaration) has occurred and is continuing, the
rights of holders of the Common Securities to receive Guarantee Payments under
the Common Securities Guarantee are subordinated, to the extent and in the
manner set forth in the Common Securities Guarantee, to the rights of holders of
Series B Capital Securities and the Series A Capital Securities to receive
Guarantee Payments under this Series B Capital Securities Guarantee and the
Series A Capital Securities Guarantee, as the case may be.
NOW, THEREFORE, in consideration of the purchase by each Holder, which
purchase the Guarantor hereby acknowledges shall benefit the Guarantor, the
Guarantor executes and delivers this Series B Capital Securities Guarantee for
the benefit of the Holders.
<PAGE>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
------------------------------
In this Series B Capital Securities Guarantee, unless the context
otherwise requires:
(a) Capitalized terms used in this Series B Capital Securities
Guarantee but not defined in the preamble above have the
respective meanings assigned to them in this Section 1.1;
(b) Terms defined in the Declaration as at the date of execution of
this Series B Capital Securities Guarantee have the same meaning
when used in this Series B Capital Securities Guarantee unless
otherwise defined in this Series B Capital Securities Guarantee;
(c) a term defined anywhere in this Series B Capital Securities
Guarantee has the same meaning throughout;
(d) all references to "the Series B Capital Securities Guarantee" or
"this Series B Capital Securities Guarantee" are to this Series B
Capital Securities Guarantee as modified, supplemented or amended
from time to time;
(e) all references in this Series B Capital Securities Guarantee to
Articles and Sections are to Articles and Sections of this Series
B Capital Securities Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning
when used in this Series B Capital Securities Guarantee, unless
otherwise defined in this Series B Capital Securities Guarantee
or unless the context otherwise requires; and
(g) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405
---------
under the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday or a Sunday, or a
------------
day on which banking institutions in The City of New
2
<PAGE>
York or Wilmington, Delaware are authorized or required by law or executive
order to close.
"Capital Securities Guarantee Trustee" means The Bank of New York,
------------------------------------
until a Successor Capital Securities Guarantee Trustee has been appointed and
has accepted such appointment pursuant to the terms of this Series B Capital
Securities Guarantee and thereafter means each such Successor Capital Securities
Guarantee Trustee.
"Common Securities" means the securities representing common undivided
-----------------
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Capital Securities
----------------------
Guarantee Trustee at which the corporate trust business of the Capital
Securities Guarantee Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this Agreement is located
at 101 Barclay Street, 21 West, New York, New York 10286.
"Covered Person" means any Holder or beneficial owner of Series B
--------------
Capital Securities.
"Debentures" means the series of subordinated debt securities of the
----------
Guarantor designated the 9.33% Series B Junior Subordinated Deferrable Interest
Debentures due January 15, 2027 held by the Property Trustee (as defined in the
Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
----------------
payment or other obligations under this Series B Capital Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
------------------
without duplication, with respect to the Series B Capital Securities, to the
extent not paid or made by the Issuer: (i) any accumulated and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
such Series B Capital Securities to the extent the Issuer has funds on hand
legally available therefor at such time, (ii) the redemption price, including
all accumulated and unpaid Distributions to the date of redemption (the
"Redemption Price") to the extent the Issuer has funds on hand legally available
therefor at such time, with respect to any Series B Capital Securities called
for redemption by the Issuer, and (iii) upon a voluntary or involuntary
termination and liquidation of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for Series B Capital
Securities as provided in the Declaration), the lesser of (a) the aggregate of
the liquidation amount and all accumulated and unpaid Distributions on the
Series B Capital Securities to the date of payment, to the extent the Issuer has
3
<PAGE>
funds on hand legally available therefor, and (b) the amount of assets of the
Issuer remaining available for distribution to Holders in liquidation of the
Issuer. If an Event of Default has occurred and is continuing, no Guarantee
Payments under the Common Securities Guarantee with respect to the Common
Securities or any guarantee payment under any Other Common Securities Guarantees
shall be made until the Holders shall be paid in full the Guarantee Payments to
which they are entitled under this Series B Capital Securities Guarantee.
"Holder" shall mean any holder, as registered on the books and records
------
of the Issuer, of any Series B Capital Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Series B Capital
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Capital Securities Guarantee Trustee,
------------------
any Affiliate of the Capital Securities Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Capital Securities Guarantee Trustee.
"Indenture" means the Indenture dated as of December 20, 1996, among
---------
the Guarantor (the "Debenture Issuer") and The Bank of New York, as trustee,
pursuant to which the Debentures are to be issued to the Property Trustee of the
Issuer.
"Majority in liquidation amount of the Series B Capital Securities"
-----------------------------------------------------------------
means, except as provided by the Trust Indenture Act, a vote by Holder(s) of
Series B Capital Securities, voting separately as a class, of more than 50% of
the aggregate liquidation amount (including the stated amount that would be paid
on redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are determined) of
all Series B Capital Securities.
"Officers' Certificate" means, with respect to any person, a
---------------------
certificate signed by the Chairman, a Vice Chairman, the Chief Executive
Officer, the President, a Vice President, the Comptroller, the Group Director,
Asset/Liability Management, the Clerk or an Assistant Clerk, the Secretary or an
Assistant Secretary of the Guarantor. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this Series B
Capital Securities Guarantee shall include:
(h) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
4
<PAGE>
(i) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(j) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Other Common Securities Guarantees" shall have the same meaning as
----------------------------------
"Other Guarantees" in the Common Securities Guarantee.
"Other Debentures" means all junior subordinated debentures issued by
----------------
the Guarantor from time to time and sold to trusts to be established by the
Guarantor (if any), in each case similar to the Issuer.
"Other Guarantees" means all guarantees issued by the Guarantor with
----------------
respect to capital securities (if any) similar to the Series B Capital
Securities issued by other trusts to be established by the Guarantor (if any),
in each case similar to the Issuer.
"Person" means a legal person, including any individual, corporation,
------
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Registration Rights Agreement" means the Registration Rights
-----------------------------
Agreement, dated as of December 20, 1996, by and among the Guarantor, the Issuer
and the Initial Purchasers named therein as such agreement may be amended,
modified or supplemented from time to time.
"Responsible Officer" means, with respect to the Capital Securities
-------------------
Guarantee Trustee, any officer within the Corporate Trust Office of the Capital
Securities Guarantee Trustee, including any vice president, any assistant vice
president, any assistant secretary, the treasurer, any assistant treasurer or
other officer of the Corporate Trust Office of the Capital Securities Guarantee
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"Successor Capital Securities Guarantee Trustee" means a successor
----------------------------------------------
Capital Securities Guarantee Trustee possessing the
5
<PAGE>
qualifications to act as Capital Securities Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended.
"Trust Securities" means the Common Securities and the Series B
----------------
Capital Securities and Series A Capital Securities, collectively.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
--------------------------------
(a) This Series B Capital Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Series B Capital Securities Guarantee and shall, to the extent applicable, be
governed by such provisions; and
(b) if and to the extent that any provision of this Series B Capital
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 Lists of Holders of Securities
------------------------------
(a) The Guarantor shall provide the Capital Securities Guarantee
Trustee (unless the Capital Securities Guarantee Trustee is otherwise the
registrar of the Capital Securities) with a list, in such form as the Capital
Securities Guarantee Trustee may reasonably require, of the names and addresses
of the Holders of the Series B Capital Securities ("List of Holders") as of such
date, (i) within one Business Day after June 1 and December 1 of each year, and
(ii) at any other time within 30 days of receipt by the Guarantor of a written
request for a List of Holders as of a date no more than 14 days before such List
of Holders is given to the Capital Securities Guarantee Trustee provided, that
---------
the Guarantor shall not be obligated to provide such List of Holders at any time
the List of Holders does not differ from the most recent List of Holders given
to the Capital Securities Guarantee Trustee by the Guarantor. The Capital
Securities Guarantee Trustee may destroy any List of Holders previously given to
it on receipt of a new List of Holders.
(b) The Capital Securities Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
6
<PAGE>
SECTION 2.3 Reports by the Capital Securities Guarantee Trustee
---------------------------------------------------
Within 60 days after December 15 of each year, commencing December 15,
1997, the Capital Securities Guarantee Trustee shall provide to the Holders such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Capital Securities Guarantee Trustee shall also comply with the requirements
of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Capital Securities Guarantee Trustee
--------------------------------------------------------
The Guarantor shall provide to the Capital Securities Guarantee
Trustee such documents, reports and information as required by Section 314 (if
any) and the compliance certificate required by Section 314 of the Trust
Indenture Act in the form, in the manner and at the times required by Section
314 of the Trust Indenture Act. Delivery of such reports, information and
documents to the Capital Securities Guarantee Trustee is for informational
purposes only and the Capital Securities Guarantee Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Guarantor's
compliance with any of its covenants hereunder (as to which the Capital
Securities Guarantee Trustee is entitled to rely exclusively on Officers'
Certificates).
SECTION 2.5 Evidence of Compliance with Conditions Precedent
------------------------------------------------
The Guarantor shall provide to the Capital Securities Guarantee
Trustee such evidence of compliance with any conditions precedent, if any,
provided for in this Series B Capital Securities Guarantee that relate to any of
the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
-------------------------
The Holders of a Majority in liquidation amount of Series B Capital
Securities may, by vote, on behalf of all of the Holders, waive any past Event
of Default and its consequences. Upon such waiver, any such Event of Default
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Series B Capital Securities
Guarantee, but no such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon.
7
<PAGE>
SECTION 2.7 Event of Default; Notice
------------------------
(a) The Capital Securities Guarantee Trustee shall, within 90 days
after the occurrence of a default with respect to this Capital Securities
Guarantee, mail by first class postage prepaid, to all Holders, notices of all
defaults actually known to a Responsible Officer of the Capital Securities
Guarantee Trustee, unless such defaults have been cured before the giving of
such notice, provided, that, except in the case of default in the payment of any
Guarantee Payment, the Capital Securities Guarantee Trustee shall be protected
in withholding such notice if and so long as the board of directors, the
executive committee, or a trust committee of directors and/or Responsible
Officer in good faith determines that the withholding of such notice is in the
interests of the Holders.
(b) The Capital Securities Guarantee Trustee shall not be deemed to
have knowledge of any Event of Default unless the Capital Securities Guarantee
Trustee shall have received written notice, or a Responsible Officer charged
with the administration of the Declaration shall have obtained actual knowledge,
of such Event of Default.
SECTION 2.8 Conflicting Interests
---------------------
The Declaration shall be deemed to be specifically described in this
Series B Capital Securities Guarantee for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Securities Guarantee Trustee
-------------------------------------------------------------
(a) This Series B Capital Securities Guarantee shall be held by the
Capital Securities Guarantee Trustee for the benefit of the Holders, and the
Capital Securities Guarantee Trustee shall not transfer this Series B Capital
Securities Guarantee to any Person except a Holder exercising his or her rights
pursuant to Section 5.4(b) or to a Successor Capital Securities Guarantee
Trustee on acceptance by such Successor Capital Securities Guarantee Trustee of
its appointment to act as Successor Capital Securities Guarantee Trustee. The
right, title and interest of the Capital Securities Guarantee Trustee shall
automatically vest in any Successor Capital Securities Guarantee Trustee, and
such vesting and succession of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant
8
<PAGE>
to the appointment of such Successor Capital Securities Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer has
occurred and is continuing, the Capital Securities Guarantee Trustee shall
enforce this Series B Capital Securities Guarantee for the benefit of the
Holders.
(c) The Capital Securities Guarantee Trustee, before the occurrence of
any Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Series B Capital Securities Guarantee, and no implied covenants
shall be read into this Series B Capital Securities Guarantee against the
Capital Securities Guarantee Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) and is actually
known to a Responsible Officer, the Capital Securities Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Series B Capital
Securities Guarantee, and use the same degree of care and skill in its exercise
thereof, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(d) No provision of this Series B Capital Securities Guarantee shall
be construed to relieve the Capital Securities Guarantee Trustee from liability
for its own negligent action, its own negligent failure to act, or its own
willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Capital Securities
Guarantee Trustee shall be determined solely by the express provisions
of this Series B Capital Securities Guarantee, and the Capital
Securities Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Series B Capital Securities Guarantee, and no implied
covenants or obligations shall be read into this Series B Capital
Securities Guarantee against the Capital Securities Guarantee Trustee;
and
(B) in the absence of bad faith on the part of the Capital
Securities Guarantee Trustee, the Capital Securities Guarantee Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Capital Securities Guaran-
9
<PAGE>
tee Trustee and conforming to the requirements of this Series B
Capital Securities Guarantee; but in the case of any such certificates
or opinions that by any provision hereof are specifically required to
be furnished to the Capital Securities Guarantee Trustee, the Capital
Securities Guarantee Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Series B Capital Securities Guarantee;
(ii) the Capital Securities Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer, unless
it shall be proved that the Capital Securities Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment was
made;
(iii) the Capital Securities Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of a Majority in
liquidation amount of the Series B Capital Securities relating to the time,
method and place of conducting any proceeding for any remedy available to
the Capital Securities Guarantee Trustee, or exercising any trust or power
conferred upon the Capital Securities Guarantee Trustee under this Series B
Capital Securities Guarantee; and
(iv) no provision of this Series B Capital Securities Guarantee shall
require the Capital Securities Guarantee Trustee to expend or risk its own
funds or otherwise incur personal financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers, if the
Capital Securities Guarantee Trustee shall have reasonable grounds for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Series B Capital Securities Guarantee
or indemnity, reasonably satisfactory to the Capital Securities Guarantee
Trustee, against such risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Capital Securities Guarantee Trustee
------------------------------------------------------
(a) Subject to the provisions of Section 3.1:
(i) The Capital Securities Guarantee Trustee may conclusively rely,
and shall be fully protected in acting or refraining from acting, upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed
10
<PAGE>
by it to be genuine and to have been signed, sent or presented by the
proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Series B Capital Securities Guarantee may be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Series B Capital
Securities Guarantee, the Capital Securities Guarantee Trustee shall deem
it desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Capital Securities
Guarantee Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and conclusively rely
upon an Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Guarantor.
(iv) The Capital Securities Guarantee Trustee shall have no duty to
see to any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Capital Securities Guarantee Trustee may consult with counsel
of its selection, and the advice or opinion of such counsel with respect to
legal matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates and may include any of
its employees. The Capital Securities Guarantee Trustee shall have the
right at any time to seek instructions concerning the administration of
this Series B Capital Securities Guarantee from any court of competent
jurisdiction.
(vi) The Capital Securities Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Series B Capital Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Capital Securities
Guarantee Trustee such security and indemnity, reasonably satisfactory to
the Capital Securities Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the Capital
Securities Guarantee Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by the
Capital Securities Guarantee Trustee; provided that, nothing contained in
this Section 3.2(a)(vi) shall be taken to relieve the Capital Securities
Guarantee Trustee, upon the occurrence of an Event of Default, of its
11
<PAGE>
obligation to exercise the rights and powers vested in it by this Series B
Capital Securities Guarantee.
(vii) The Capital Securities Guarantee Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Capital Securities
Guarantee Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
(viii) The Capital Securities Guarantee Trustee may execute any of
the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, nominees, custodians or attorneys, and
the Capital Securities Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder.
(ix) Any action taken by the Capital Securities Guarantee Trustee
or its agents hereunder shall bind the Holders, and the signature of the
Capital Securities Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action. No third party shall
be required to inquire as to the authority of the Capital Securities
Guarantee Trustee to so act or as to its compliance with any of the terms
and provisions of this Series B Capital Securities Guarantee, both of which
shall be conclusively evidenced by the Capital Securities Guarantee
Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Series B Capital
Securities Guarantee the Capital Securities Guarantee Trustee shall deem
it desirable to receive instructions with respect to enforcing any remedy
or right or taking any other action hereunder, the Capital Securities
Guarantee Trustee (i) may request instructions from the Holders of a
Majority in liquidation amount of the Series B Capital Securities, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in accordance with such instructions.
(xi) The Capital Securities Guarantee Trustee shall not be liable
for any action taken, suffered, or omitted to be taken by it in good faith,
without negligence, and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Series
B Capital Securities Guarantee.
12
<PAGE>
(b) No provision of this Series B Capital Securities Guarantee shall
be deemed to impose any duty or obligation on the Capital Securities Guarantee
Trustee to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Capital Securities Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Capital Securities Guarantee
Trustee shall be construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Series B Capital
------------------------------------------------------------
Securities Guarantee
--------------------
The recitals contained in this Series B Capital Securities Guarantee
shall be taken as the statements of the Guarantor, and the Capital Securities
Guarantee Trustee does not assume any responsibility for their correctness. The
Capital Securities Guarantee Trustee makes no representation as to the validity
or sufficiency of this Series B Capital Securities Guarantee.
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee; Eligibility
-------------------------------------------------
(a) There shall at all times be a Capital Securities Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
13
<PAGE>
(b) If at any time the Capital Securities Guarantee Trustee shall
cease to be eligible to so act under Section 4.1(a), the Capital Securities
Guarantee Trustee shall immediately resign in the manner and with the effect
set out in Section 4.2(c).
(c) If the Capital Securities Guarantee Trustee has or shall acquire
any "conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Capital Securities Guarantee Trustee and Guarantor shall in
all respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Capital Securities
----------------------------------------------------------
Guarantee Trustee
-----------------
(a) Subject to Section 4.2(b), the Capital Securities Guarantee
Trustee may be appointed or removed without cause at any time by the Guarantor
except during an Event of Default.
(b) The Capital Securities Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Capital Securities Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Capital Securities Guarantee Trustee and
delivered to the Guarantor.
(c) The Capital Securities Guarantee Trustee shall hold office until
a Successor Capital Securities Guarantee Trustee shall have been appointed or
until its removal or resignation. The Capital Securities Guarantee Trustee may
resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Capital Securities Guarantee Trustee and
delivered to the Guarantor, which resignation shall not take effect until a
Successor Capital Securities Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Capital Securities Guarantee Trustee and delivered to the Guarantor and the
resigning Capital Securities Guarantee Trustee.
(d) If no Successor Capital Securities Guarantee Trustee shall have
been appointed and accepted appointment as provided in this Section 4.2 within
60 days after delivery of an instrument of removal or resignation, the Capital
Securities Guarantee Trustee resigning or being removed may petition any court
of competent jurisdiction for appointment of a Successor Capital Securities
Guarantee Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a Successor Capital Securities Guarantee
Trustee.
(e) No Capital Securities Guarantee Trustee shall be liable for the
acts or omissions to act of any Successor Capital Securities Guarantee Trustee.
14
<PAGE>
(f) Upon termination of this Series B Capital Securities Guarantee
or removal or resignation of the Capital Securities Guarantee Trustee pursuant
to this Section 4.2, the Guarantor shall pay to the Capital Securities Guarantee
Trustee all amounts due to the Capital Securities Guarantee Trustee accrued to
the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
---------
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of set-
off or counterclaim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
---------------------------
The Guarantor hereby waives notice of acceptance of this Series B
Capital Securities Guarantee and of any liability to which it applies or may
apply, presentment, demand for payment, any right to require a proceeding first
against the Issuer or any other Person before proceeding against the Guarantor,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
SECTION 5.3 Obligations Not Affected
------------------------
The obligations, covenants, agreements and duties of the Guarantor
under this Series B Capital Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Series B Capital Securities to be
performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Series B Capital Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Series B Capital Securities (other than an
extension of time for payment of Distributions,
15
<PAGE>
Redemption Price, Liquidation Distribution or other sum payable that results
from the extension of any interest payment period on the Debentures permitted by
the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Series B Capital
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt of, or other similar proceedings affecting, the Issuer or any of the
assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Series B
Capital Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred;
(g) the consummation of the Exchange Offer; or
(h) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor with respect to the
Guarantee Payments shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
-----------------
(a) The Holders of a Majority in liquidation amount of the Series B
Capital Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Capital Securities
Guarantee Trustee in respect of this Series B Capital Securities Guarantee or
exercising any trust or power conferred upon the Capital Securities Guarantee
Trustee under this Series B Capital Securities Guarantee.
(b) If the Capital Securities Guarantee Trustee fails to enforce such
Series B Capital Securities Guarantee, any Holder may institute a legal
proceeding directly against the Guarantor to enforce the Capital Securities
Guarantee Trustee's rights
16
<PAGE>
under this Series B Capital Securities Guarantee, without first instituting a
legal proceeding against the Issuer, the Capital Securities Guarantee Trustee or
any other person or entity. The Guarantor waives any right or remedy to require
that any action be brought first against the Issuer or any other person or
entity before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
--------------------
This Series B Capital Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 5.6 Subrogation
-----------
The Guarantor shall be subrogated to all (if any) rights of the
Holders against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this Series B Capital Securities Guarantee; provided, however,
that the Guarantor shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any right that it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Series B Capital
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Series B Capital Securities Guarantee. If any amount shall
be paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.
SECTION 5.7 Independent Obligations
-----------------------
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Series B
Capital Securities, and that the Guarantor shall be liable as principal and as
debtor hereunder to make Guarantee Payments pursuant to the terms of this Series
B Capital Securities Guarantee notwithstanding the occurrence of any event
referred to in subsections (a) through (h), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
--------------------------
So long as any Capital Securities remain outstanding, the Guarantor
shall 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
Guarantor's capital stock (which includes common and preferred stock) or (ii)
make any payment of principal, interest or premium, if any, on or
17
<PAGE>
repay or repurchase or redeem any debt securities of the Guarantor (including
any Other Debentures) that rank pari passu with or junior in right of payment to
the Debentures or (iii) make any guarantee payments with respect to any
guarantee by the Guarantor of the debt securities of any subsidiary of the
Guarantor (including Other Guarantees) if such guarantee ranks pari passu or
junior in right of payment to the Debentures (other than (a) dividends or
distributions in shares of, or options, warrants, rights to subscribe for or
purchase shares of, common stock of the Guarantor, (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 Capital
Securities Guarantee, (d) as a result of a reclassification of the Guarantor's
capital stock or the exchange or the conversion of one class or series of the
Guarantor's capital stock for another class or series of the Guarantor's capital
stock, (e) the purchase of fractional interests in shares of the Guarantor'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
Guarantor's benefit plans for its directors, officers or employees or any of the
Guarantor's dividend reinvestment plans) if at such time (i) there shall have
occurred any event of which the Guarantor has actual knowledge that (a) is, or
with the giving of notice or the lapse of time, or both, would be an Event of
Default and (b) in respect of which the Guarantor shall not have taken
reasonable steps to cure, (ii) if such Debentures are held by the Property
Trustee, the Guarantor shall be in default with respect to its payment of any
obligations under this Series B Capital Securities Guarantee or (iii) the
Guarantor shall have given notice of its election of the exercise of its right
to extend the interest payment period pursuant to Section 16.01 of the Indenture
and any such extension shall be continuing.
SECTION 6.2 Ranking
-------
This Series B Capital Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and junior
in right of payment to Senior Indebtedness (as defined in the Indenture), to
the same extent and in the same manner that the Debentures are subordinated to
Senior Indebtedness pursuant to the Indenture (except as indicated below), it
being understood that the terms of Article XV of the Indenture shall apply to
the obligations of the Guarantor under this Series B Capital Securities
Guarantee as if (x) such Article XV were set forth herein in full and (y) such
obligations were substituted for the term "Securities" appearing in such Article
XV, except that with respect to Section 15.03 of the Indenture only, the term
"Senior Indebtedness" shall mean all liabilities
18
<PAGE>
of the Guarantor, whether or not for money borrowed (other than obligations in
respect of Other Guarantees), (ii) pari passu with the most senior preferred or
preference stock now or hereafter issued by the Guarantor and with any Other
Guarantee (as defined herein) and any Other Common Securities Guarantee and any
guarantee now or hereafter entered into by the Guarantor in respect of any
preferred or preference stock of any Affiliate of the Guarantor, and (iii)
senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
-----------
This Series B Capital Securities Guarantee shall terminate (i) upon
full payment of the Redemption Price (as defined in the Declaration) of all
Series B Capital Securities, or (ii) upon liquidation of the Issuer, the full
payment of the amounts payable in accordance with the Declaration or the
distribution of the Debentures to all of the Holders. Notwithstanding the
foregoing, this Series B Capital Securities Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid under the Series B Capital Securities or
under this Series B Capital Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
-----------
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Series B
Capital Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Series B Capital Securities Guarantee or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable
19
<PAGE>
care by or on behalf of the Guarantor, including information, opinions, reports
or statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Series B Capital Securities might properly be
paid.
SECTION 8.2 Indemnification
---------------
The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination of this
Series B Capital Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
----------------------
All guarantees and agreements contained in this Series B Capital
Securities Guarantee shall bind the successors, assigns, receivers, trustees
and representatives of the Guarantor and shall inure to the benefit of the
Holders of the Series B Capital Securities then outstanding.
SECTION 9.2 Amendments
----------
Except with respect to any changes that do not materially adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Series B Capital Securities Guarantee may only be amended with
the prior approval of the Holders of a Majority in liquidation amount of the
Securities (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined). The provisions of Section
12.2 of the Declaration with respect to meetings of Holders of the Securities
apply to the giving of such approval.
SECTION 9.3 Notices
-------
All notices provided for in this Series B Capital Securities Guarantee
shall be in writing, duly signed by the
20
<PAGE>
party giving such notice, and shall be delivered, telecopied or mailed by first
class mail, as follows:
(a) If given to the Issuer, in care of the Administrative Trustee at
the Issuer's mailing address set forth below (or such other address as the
Issuer may give notice of to the Holders):
First USA Capital Trust I
c/o First USA, Inc.
1601 Elm Street
47th Floor
Dallas, Texas 75201
Attention: Jack M. Antonini
Telecopy: (214) 849-2950
(b) If given to the Capital Securities Guarantee Trustee, at the
Capital Securities Guarantee Trustee's mailing address set forth below (or such
other address as the Capital Securities Guarantee Trustee may give notice of to
the Holders):
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
Telecopy: (212) 815-5915
(c) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders):
First USA, Inc.
1601 Elm Street
47th Floor
Dallas, Texas 75201
Attention: Philip E. Taken
Telecopy: (214) 849-2068
(d) If given to any Holder, at the address set forth on the books and
records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
21
<PAGE>
SECTION 9.4 Benefit
-------
This Series B Capital Securities Guarantee is solely for the benefit
of the Holders and, subject to Section 3.1(a), is not separately transferable
from the Series B Capital Securities.
SECTION 9.5 Governing Law
-------------
THIS Series B CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
22
<PAGE>
THIS Series B CAPITAL SECURITIES GUARANTEE is executed as of the day
and year first above written.
FIRST USA, INC. as
Guarantor
By:_____________________________
Name:
Title:
The Bank of New York, as Capital
Securities Guarantee Trustee
By:_____________________________
Name:
Title:
<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 SIX MONTHS ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED JUNE 30,
DECEMBER 31, ---------------------------------------------------
1996 1996 1995 1994 1993 1992
------------ --------- --------- --------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
EARNINGS
Income before income
taxes and extraordinary
item................... $223,457 $ 390,284 $ 281,599 $ 238,150 $ 65,363 $ 25,079
Interest expense....... 210,655 391,939 305,548 201,271 147,001 167,807
Interest portion of
rent expense.......... 3,449 5,435 3,371 2,697 2,639 2,488
-------- --------- --------- --------- -------- --------
Earnings including
interest-bearing
deposits.............. 437,561 787,658 590,518 442,118 215,003 195,374
Interest on interest-
bearing deposits...... (44,104) (113,435) (149,869) (145,555) (92,219) (99,854)
-------- --------- --------- --------- -------- --------
Earnings excluding
interest-bearing
deposits.............. $393,457 $ 674,223 $ 440,649 $ 296,563 $122,784 $ 95,520
======== ========= ========= ========= ======== ========
FIXED CHARGES
Interest expense....... $210,655 $ 391,939 $ 305,548 $ 201,271 $147,001 $167,807
Interest portion of
rent expense.......... 3,449 5,435 3,371 2,697 2,639 2,488
-------- --------- --------- --------- -------- --------
Fixed charges including
interest-bearing
deposits.............. 214,104 397,374 308,919 203,968 149,640 170,295
Interest on interest-
bearing deposits...... (44,104) (113,435) (149,869) (145,555) (92,219) (99,854)
-------- --------- --------- --------- -------- --------
Fixed charges excluding
interest-bearing
deposits.............. $170,000 $ 283,939 $ 159,050 $ 58,413 $ 57,421 $ 70,441
======== ========= ========= ========= ======== ========
RATIO OF EARNINGS TO
FIXED CHARGES
Including interest-
bearing deposits...... 2.04X 1.98X 1.91X 2.17X 1.44X 1.15X
Excluding interest-
bearing deposits...... 2.31 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 the Registration Statement (Form S-4) 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 5, 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- ) 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 6, 1997
<PAGE>
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
EXHIBIT 25.1
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [_]
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
FIRST USA, INC.
(Exact name of obligor as specified in its charter)
Delaware 75-2291060
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1601 Elm Street
Dallas, Texas 75201
(Address of principal executive offices) (Zip code)
----------------------
Series B Junior Subordinated Deferrable Interest Debentures
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-
29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-
44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 21st day of April, 1997.
THE BANK OF NEW YORK
By: /s/ WALTER N. GITLIN
---------------------------------
Name: WALTER N. GITLIN
Title: VICE PRESIDENT
-4-
<PAGE>
- --------------------------------------------------------------------------------
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin................... $ 4,404,522
Interest-bearing balances............. 732,833
Securities:
Held-to-maturity securities........... 789,964
Available-for-sale securities......... 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold.................... 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ...................28,728,602
LESS: Allowance for loan and
lease losses ................584,525
LESS: Allocated transfer risk
reserve..........................429
Loans and leases, net of unearned
income, allowance, and reserve 28,143,648
Assets held in trading accounts......... 1,004,242
Premises and fixed assets (including
capitalized leases)................... 605,668
Other real estate owned................. 41,238
Investments in unconsolidated
subsidiaries and associated
companies............................. 205,031
Customers' liability to this bank on
acceptances outstanding............... 949,154
Intangible assets....................... 490,524
Other assets............................ 1,305,839
-----------
Total assets............................ $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices................... $20,441,318
Noninterest-bearing .........8,158,472
Interest-bearing ...........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs...... 11,710,903
Noninterest-bearing ............46,182
Interest-bearing ...........11,664,721
Federal funds purchased in
domestic offices of the
bank:
Federal funds purchased............... 1,565,288
Demand notes issued to the U.S.
Treasury.............................. 293,186
Trading liabilities..................... 826,856
Other borrowed money:
With original maturity of one year
or less............................. 2,103,443
With original maturity of more than
one year............................ 20,766
Bank's liability on acceptances exe-
cuted and outstanding................. 951,116
Subordinated notes and debentures....... 1,020,400
Other liabilities....................... 1,522,884
-----------
Total liabilities....................... 40,456,160
-----------
EQUITY CAPITAL
Common stock............................ 942,284
Surplus................................. 525,666
Undivided profits and capital
reserves.............................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale
securities............................ ( 2,073)
Cumulative foreign currency transla-
tion adjustments...................... ( 8,403)
-----------
Total equity capital.................... 3,586,850
-----------
Total liabilities and equity
capital .............................. $44,043,010
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot )
Thomas A. Renyl ) Directors
Alan R. Griffith )
- --------------------------------------------------------------------------------
<PAGE>
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO
RULE 901(d) OF REGULATION S-T
EXHIBIT 25.2
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [_]
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
FIRST USA CAPITAL TRUST I
(Exact name of obligor as specified in its charter)
Delaware
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1601 Elm Street
Dallas, Texas 75201
(Address of principal executive offices) (Zip code)
----------------------
Series B Capital Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State 2 Rector Street, New York,
of New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-
29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-
44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 21st day of April, 1997.
THE BANK OF NEW YORK
By: /s/ WALTER N. GITLIN
-----------------------------
Name: WALTER N. GITLIN
Title: VICE PRESIDENT
-4-
<PAGE>
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin..................... $ 4,404,522
Interest-bearing balances............. 732,833
Securities:
Held-to-maturity securities........... 789,964
Available-for-sale securities......... 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold...................... 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ...................28,728,602
LESS: Allowance for loan and
lease losses ................584,525
LESS: Allocated transfer risk
reserve..........................429
Loans and leases, net of unearned
income, allowance, and reserve 28,143,648
Assets held in trading accounts......... 1,004,242
Premises and fixed assets (including
capitalized leases)................... 605,668
Other real estate owned................. 41,238
Investments in unconsolidated
subsidiaries and associated
companies............................. 205,031
Customers' liability to this bank on
acceptances outstanding............... 949,154
Intangible assets....................... 490,524
Other assets............................ 1,305,839
-----------
Total assets............................ $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices................... $20,441,318
Noninterest-bearing .........8,158,472
Interest-bearing ...........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs...... 11,710,903
Noninterest-bearing ............46,182
Interest-bearing ...........11,664,721
Federal funds purchased in
domestic offices of the
bank:
Federal funds purchased............... 1,565,288
Demand notes issued to the U.S.
Treasury.............................. 293,186
Trading liabilities..................... 826,856
Other borrowed money:
With original maturity of one year
or less............................. 2,103,443
With original maturity of more than
one year............................ 20,766
Bank's liability on acceptances exe-
cuted and outstanding................. 951,116
Subordinated notes and debentures....... 1,020,400
Other liabilities....................... 1,522,884
-----------
Total liabilities....................... 40,456,160
-----------
EQUITY CAPITAL
Common stock............................ 942,284
Surplus................................. 525,666
Undivided profits and capital
reserves.............................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale
securities............................ ( 2,073)
Cumulative foreign currency transla-
tion adjustments...................... ( 8,403)
-----------
Total equity capital.................... 3,586,850
-----------
Total liabilities and equity
capital ........................... $44,043,010
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
- --------------------------------------------------------------------------------
<PAGE>
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT
TO RULE 901(d) OF REGULATION S-T
EXHIBIT 25.3
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [_]
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
FIRST USA, INC.
(Exact name of obligor as specified in its charter)
Delaware 75-2291060
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1601 Elm Street
Dallas, Texas 75201
(Address of principal executive offices) (Zip code)
----------------------
Guarantee of Series B Capital Securities
of First USA Capital Trust I
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Name Address
- -------------------------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-
29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-
44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 21st day of April, 1997.
THE BANK OF NEW YORK
By: /s/ WALTER N. GITLIN
---------------------------------
Name: WALTER N. GITLIN
Title: VICE PRESIDENT
-4-
<PAGE>
- --------------------------------------------------------------------------------
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin................... $ 4,404,522
Interest-bearing balances............. 732,833
Securities:
Held-to-maturity securities........... 789,964
Available-for-sale securities......... 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold.................... 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ...................28,728,602
LESS: Allowance for loan and
lease losses ................584,525
LESS: Allocated transfer risk
reserve..........................429
Loans and leases, net of unearned
income, allowance, and reserve 28,143,648
Assets held in trading accounts......... 1,004,242
Premises and fixed assets (including
capitalized leases)................... 605,668
Other real estate owned................. 41,238
Investments in unconsolidated
subsidiaries and associated
companies............................. 205,031
Customers' liability to this bank on
acceptances outstanding............... 949,154
Intangible assets....................... 490,524
Other assets............................ 1,305,839
-----------
Total assets............................ $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices................... $20,441,318
Noninterest-bearing .........8,158,472
Interest-bearing ...........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs...... 11,710,903
Noninterest-bearing ............46,182
Interest-bearing ...........11,664,721
Federal funds purchased in
domestic offices of the
bank:
Federal funds purchased............... 1,565,288
Demand notes issued to the U.S.
Treasury.............................. 293,186
Trading liabilities..................... 826,856
Other borrowed money:
With original maturity of one year
or less............................. 2,103,443
With original maturity of more than
one year............................ 20,766
Bank's liability on acceptances exe-
cuted and outstanding................. 951,116
Subordinated notes and debentures....... 1,020,400
Other liabilities....................... 1,522,884
-----------
Total liabilities....................... 40,456,160
-----------
EQUITY CAPITAL
Common stock............................ 942,284
Surplus................................. 525,666
Undivided profits and capital
reserves.............................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale
securities............................ ( 2,073)
Cumulative foreign currency transla-
tion adjustments...................... ( 8,403)
-----------
Total equity capital.................... 3,586,850
-----------
Total liabilities and equity
capital ........................... $44,043,010
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot )
Thomas A. Renyl ) Directors
Alan R. Griffith )
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT 99.1
LETTER OF TRANSMITTAL
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.
PURSUANT TO THE PROSPECTUS DATED MAY , 1997
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P. M., NEW
YORK CITY TIME, ON JUNE , 1997, UNLESS THE OFFER IS EXTENDED. TENDERS MAY
BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION
DATE.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
THE BANK OF NEW YORK
By Hand Or Overnight Delivery:
Facsimile By Registered Or
The Bank of New York Transmissions: Certified Mail:
101 Barclay Street (Eligible
Institutions Only) The Bank of New York
Corporate Trust Services Window
Ground Level 101 Barclay Street, 7E
New York, New York 10286 (212) 571-3080 New York, New York 10286
Attn: Reorganization Department Attn: Reorganization
Henry Lopez To Confirm by Department
Telephone Henry Lopez
or for Information
Call: (212) 815-2742
Delivery of this letter of transmittal to an address other than as set forth
above or transmission of this letter of transmittal via facsimile to a number
other than as set forth above does not constitute a valid delivery.
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
Capitalized terms used but not defined herein shall have the same meaning
given them in the Prospectus (as defined below).
This Letter of Transmittal is to be completed 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 Bank of New York (the
"Exchange Agent") at The Depository Trust Company ("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 (the "Certificates")
for such Old Capital Securities are not immediately available or who cannot
deliver their Certificates and all other required documents to the Exchange
Agent on or prior to the Expiration Date (as defined in the Prospectus) or who
cannot complete the procedures for book-entry transfer on a timely basis, must
tender their Old Capital Securities according to the guaranteed delivery
procedures set forth in "The Exchange Offer--Procedures for Tendering Old
Capital Securities" in the Prospectus.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
ALL TENDERING HOLDERS COMPLETE THIS BOX:
DESCRIPTION OF OLD CAPITAL SECURITIES TENDERED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
IF BLANK,
PLEASE
PRINT NAME
AND
ADDRESS OF
REGISTERED OLD CAPITAL SECURITIES TENDERED (ATTACH ADDITIONAL
HOLDER. LIST IF NECESSARY)
- ---------------------------------------------------------------
PRINCIPAL
AGGREGATE AMOUNT OF
PRINCIPAL OLD CAPITAL
AMOUNT OF SECURITIES
CERTIFICATE OLD CAPITAL (IF LESS THAN
NUMBER(S)* SECURITIES ALL)**
-----------------------
-----------------------
-----------------------
-----------------------
-----------------------
-----------------------
<S> <C> <C> <C>
TOTAL AMOUNT TEN-
DERED
</TABLE>
- --------------------------------------------------------------------------------
* Need not be completed by book-entry holders.
** Old Capital Securities may be tendered in whole or in part in
denominations of $100,000 and integral multiples of $1,000 in excess
thereof, provided that if any Old Capital Securities are tendered for
exchange in part, the untendered principal amount thereof must be
$100,000 or any integral multiple of $1,000 in excess thereof. All Old
Capital Securities held shall be deemed tendered unless a lesser number
is specified in this column. See 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
DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: _____________________________________________
DTC Account Number: ________________________________________________________
Transaction Code Number: ___________________________________________________
[_]CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE
FOLLOWING:
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: ______________________________________
DTC Account Number: _________________________________________________
Transaction Code Number: ____________________________________________
[_]CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD CAPITAL
SECURITIES ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET FORTH
ABOVE.
[_]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 THEREOF.
Name: ______________________________________________________________________
Address: ___________________________________________________________________
3
<PAGE>
Ladies and Gentlemen:
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 (the "Securities Act"),
upon the terms and subject to the conditions set forth in the Prospectus dated
May , 1997 (as the same may be amended or supplemented from time to time, the
"Prospectus"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which, together with the Prospectus, constitute the "Exchange
Offer").
Subject to and effective upon the acceptance for exchange of all or any
portion of the Old Capital Securities tendered herewith in accordance with the
terms and conditions of the Exchange Offer (including, if the Exchange Offer
is extended or amended, the terms and conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to or upon the
order of the Trust all right, title and interest in and to such Old Capital
Securities as are being tendered herewith. The undersigned hereby irrevocably
constitutes and appoints the Exchange Agent as its agent and attorney-in-fact
(with full knowledge that the Exchange Agent is also acting as agent of the
Corporation and the Trust in connection with the Exchange Offer) with respect
to the tendered Old Capital Securities, with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest) subject only to the right of withdrawal described in the Prospectus,
to (i) deliver Certificates for Old Capital Securities to the Corporation or
the Trust together with all accompanying evidences of transfer and
authenticity to, or upon the order of, the Trust, upon receipt by the Exchange
Agent, as the undersigned's agent, of the New Capital Securities to be issued
in exchange for such Old Capital Securities, (ii) present Certificates for
such Old Capital Securities for transfer, and to transfer the Old Capital
Securities on the books of the Trust, and (iii) receive for the account of the
Trust all benefits and otherwise exercise all rights of beneficial ownership
of such Old Capital Securities, all in accordance with the terms and
conditions of the Exchange Offer.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS FULL
POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE OLD
CAPITAL SECURITIES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR
EXCHANGE, THE TRUST WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE
THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES,
AND THAT THE OLD CAPITAL SECURITIES TENDERED HEREBY ARE NOT SUBJECT TO ANY
ADVERSE CLAIMS OR PROXIES. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND
DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY THE CORPORATION, THE TRUST OR THE
EXCHANGE AGENT TO BE NECESSARY OR DESIRABLE TO COMPLETE THE EXCHANGE,
ASSIGNMENT AND TRANSFER OF THE OLD CAPITAL SECURITIES TENDERED HEREBY, AND THE
UNDERSIGNED WILL COMPLY WITH ITS OBLIGATIONS UNDER THE REGISTRATION RIGHTS
AGREEMENT. THE UNDERSIGNED HAS READ AND AGREES TO ALL OF THE TERMS OF THE
EXCHANGE OFFER.
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
5
<PAGE>
OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES (A
"PARTICIPATING BROKER-DEALER"), BY TENDERING SUCH OLD CAPITAL SECURITIES AND
EXECUTING THIS LETTER OF TRANSMITTAL, 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 an 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 FROM W-9 ON PAGE 11)
NOTE: SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 2)
X __________________________________________________________________________
X __________________________________________________________________________
SIGNATURE(S) OF HOLDER(S)
Dated: ________________________ , 1997
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.
____________________________________________________________________________
NAME (PLEASE PRINT)
____________________________________________________________________________
CAPACITY (FULL TITLE)
____________________________________________________________________________
ADDRESS
____________________________________________________________________________
ZIP CODE
____________________________________ ____________________________________
(AREA CODE) TELEPHONE NUMBER TAX IDENTIFICATION OR SOCIAL
SECURITY NUMBER
SIGNATURE GUARANTEE
(SEE INSTRUCTIONS 2 AND 5)
X __________________________________________________________________________
AUTHORIZED SIGNATURE
____________________________________________________________________________
NAME (PLEASE PRINT)
______________________________________ ____________________________________
CAPACITY (FULL TITLE) NAME OF FIRM
____________________________________________________________________________
ADDRESS
____________________________________________________________________________
ZIP CODE
______________________________________
AREA CODE AND TELEPHONE NUMBER
Dated: ________________________ , 1997
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)
(TAXPAYER IDENTIFICATION OR SOCIAL
SECURITY NUMBER(S)) ___________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL
SECURITY NUMBER(S))
8
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed either if (a)
Certificates are to be forwarded herewith or (b) tenders are to be made
pursuant to the procedures for tender by book-entry transfer set forth in "The
Exchange Offer--Procedures for Tendering Old Capital Securities" in the
Prospectus. Certificates, or timely confirmation of a book-entry transfer of
such Old Capital Securities into the Exchange Agent's account at DTC, as well
as this Letter of Transmittal (or facsimile thereof), properly completed and
duly executed, with any required signature guarantees, and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
at its address set forth herein on or prior to the Expiration Date. 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 fox 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.
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN
ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Neither the Corporation nor the Trust will accept any alternative,
conditional or contingent tenders. Each tendering holder, by execution of a
Letter of Transmittal (or facsimile thereof), waives any right to receive any
notice of the acceptance of such tender.
9
<PAGE>
2. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered holder (which term,
for purposes of this document, shall include any participant in DTC whose
name appears on a security position listing as the owner of the Old
Capital Securities) 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 ore tendered for the account of a firm that
is an Eligible Institution.
In all other cases, an Eligible Institution must guarantee the signature(s)
on this Letter of Transmittal. See Instruction 5.
3. INADEQUATE SPACE If the space provided in the box captioned "Description
of Old Capital Securities" is inadequate, the Certificate number(s) and/or the
principal amount of Old Capital Securities and any other required information
should be listed on a separate signed schedule which is attached to this
Letter of Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Old Capital Securities
will be accepted only in the principal amount of $100,000 (100 Capital
Securities) and integral multiples of $1,000 in excess thereof, provided that
if any Old Capital Securities are tendered for exchange in part, the
untendered principal amount thereof must be $100,000 (100 Capital Securities)
or any integral multiple of $1,000 in excess thereof. If less than all the Old
Capital Securities evidenced by any Certificate submitted are to be tendered,
fill in the principal amount of Old Capital Securities which are to be
tendered in the box entitled "Principal Amount of Old Capital Securities
Tendered." In such case, new Certificate(s) for the remainder of the Old
Capital Securities that were evidenced by your old Certificate(s) will only be
sent to the holder of the Old Capital Security, promptly after the Expiration
Date. All Old Capital Securities represented by Certificates delivered to the
Exchange Agent will be deemed to have been tendered unless otherwise
indicated.
Except as otherwise provided herein, tenders of Old Capital Securities may
be withdrawn at any time on or prior to the Expiration Date. In order for a
withdrawal to be effective on or prior to that time, a written, telegraphic,
telex or facsimile transmission of such notice of withdrawal must be timely
received by the Exchange Agent at one of its addresses set forth above or in
the Prospectus on or prior to the Expiration Date. Any such notice of
withdrawal must specify the name of the person who tendered the Old Capital
Securities to be withdrawn, the aggregate principal amount of Old Capital
Securities to be withdrawn, and (if Certificates for Old Capital 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 bookentry
transfer set forth in the Prospectus under "The Exchange Offer--Procedures for
Tendering Old Capital Securities," the notice of withdrawal must specify the
name and number of the account at DTC to be credited with the withdrawal of
Old Capital Securities, in which case a notice of withdrawal will be effective
if delivered to the Exchange Agent by written, telegraphic, telex or facsimile
transmission. Withdrawals of tenders of Old Capital Securities may not be
rescinded. Old Capital Securities properly withdrawn will not be deemed
validly tendered for purposes of the Exchange Offer, but may be retendered at
any subsequent time on or prior to the Expiration Date by following any of the
procedures described in the Prospectus under "The Exchange Offer--Procedures
for Tendering Old Capital Securities."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Corporation and
the Trust, in their sole discretion, whose determination shall be final and
binding on all parties. Neither the Corporation, the Trust, any affiliates or
assigns of the Corporation or the
10
<PAGE>
Trust, the Exchange Agent nor any other person shall be under any duty to give
any notification of any irregularities in any notice of withdrawal or incur
any liability for failure to give any such notification. Any Old Capital
Securities which have been tendered but which are withdrawn will be returned
to the holder thereof without cost to such holder promptly after withdrawal.
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS. If 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.
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 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
11
<PAGE>
have been cured or waived. The Corporation, the Trust, any affiliates or
assigns of the Corporation, the Trust, the Exchange Agent, or any other person
shall not be under any duty to give notification of any irregularities in
tenders or incur any liability for failure to give such notification.
8. QUESTIONS, REQUESTS FOR THE ASSISTANCE AND ADDITIONAL COPIES. Questions
and requests for assistance may be directed to the Exchange Agent at its
address and telephone number set forth on the front of this Letter of
Transmittal. Additional copies of the Prospectus, the Notice of Guaranteed
Delivery and the Letter of Transmittal 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 each 60-day
period, amounts withheld will be remitted to the IRS as backup withholding. In
addition, 31% of all payments made thereafter will be withheld and remitted to
the IRS until a correct TIN is provided.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the Old Capital Securities or of the last transferee appearing on the transfers
attached to, or endorsed on, the Old Capital Securities. If the Old Capital
Securities are registered in more than one name or are not in the name of the
actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" on the face
thereof, to avoid possible erroneous backup withholding. A foreign person may
qualify as an exempt recipient by submitting a properly completed IRS Form W-8,
signed under penalties of perjury, attesting to that holder's exempt status.
Please consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
holders are exempt from backup withholding.
Backup withholding is not an additional U.S. Federal income tax. Rather, the
U.S. Federal income tax liability of a person subject to backup withholding
will be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained.
10. WAIVER OF CONDITIONS. The Corporation and the Trust reserve the absolute
right to waive satisfaction of any or all conditions enumerated in the
Prospectus.
12
<PAGE>
11. NO CONDITIONAL TENDERS. No alternative, conditional or contingent
tenders will be accepted. All tendering holders of Old Capital Securities, by
execution of this Letter of Transmittal, shall waive any right to receive
notice of the acceptance of Old Capital Securities for exchange.
Neither the Corporation, the Trust, the Exchange Agent nor any other person
is obligated to give notice of any defect or irregularity with respect to any
tender of Old Capital Securities nor shall any of them incur any liability for
failure to give any such notice.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Certificate(s)
representing Old Capital Securities have been lost, destroyed or stolen, the
holder should promptly notify the Exchange Agent. The holder will then be
instructed as to the steps that must be taken in order to replace the
Certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, destroyed or stolen
Certificate(s) have been followed.
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 THEREFORE)
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
PAYER'S NAME: THE BANK OF NEW YORK
- -------------------------------------------------------------------------------
PART I--PLEASE PROVIDE TIN
SUBSTITUTE YOUR TIN IN THE BOX AT
FORM W-9 RIGHT AND CERTIFY BY __________________________
SIGNING AND DATING BELOW. (Social Security or
Employee Identification
Number)
------------------------------------------------------------
DEPARTMENT OF THE
TREASURY INTERNAL
REVENUE SERVICE
PART II--TIN Applied for [ ]
PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER (TIN) AND CERTIFICATION
-----------------------------------------------------------
CERTIFICATION--UNDER PENALTIES OF PERJURY, I CERTIFY
THAT:
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).
2. I am not subject to backup withholding because: (i)
I am exempt from backup withholding, (ii) I have
not been notified by the Internal Revenue 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 notified me that I
am no longer subject to backup withholding, and
3. any other information provided in this form is true
and correct.
CERTIFICATION INSTRUCTIONS--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.
Signature: _______________________ Dated : ______ , 1997
NOTE: FAILURE TO COMPLETE THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF
ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. IN ADDITION, FAILURE TO
PROVIDE SUCH INFORMATION MAY RESULT IN A PENALTY IMPOSED BY THE INTERNAL
REVENUE SERVICE. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION
OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATION IF YOU WROTE "APPLIED FOR"
INSTEAD OF A TIN IN THE 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
any 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: ___________________________ Dated: __________________ , 1997
14
<PAGE>
EXHIBIT 99.2
FORM OF NOTICE OF GUARANTEED DELIVERY
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
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 the Expiration Date (as defined in the Prospectus referred to
below) or (iii) the procedures for delivery by book-entry transfer cannot be
completed on a timely basis. This Notice of Guaranteed Delivery may be
delivered by hand, overnight courier or mail, or transmitted by facsimile
transmission, to the Exchange Agent. See "The Exchange Offer--Procedures for
Tendering Old Capital Securities" in the Prospectus. In addition, in order to
utilize the guaranteed delivery procedure to tender Old Capital Securities
pursuant to the Exchange Offer, a completed, signed and dated Letter of
Transmittal relating to the Old Capital Securities (or facsimile thereof) must
also be received by the Exchange Agent on or prior to the Expiration Date.
Capitalized terms not defined herein have the meanings assigned to them in the
Prospectus.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
THE BANK OF NEW YORK
BY REGISTERED OR FACSIMILE TRANSMISSION:
CERTIFIED MAIL BY HAND OR OVERNIGHT DELIVERY
(Eligible Institutions Only)The Bank of New York
The Bank of New York (212) 571-3080 101 Barclay Street
101 Barclay Street, 7E
Corporate Trust Services Window
New York, New York 10286 TO CONFIRM BY TELEPHONE: Ground Level
Attn: Reorganization (212) 815-2742 New York, New York 10286
Department
Attn: Reorganization Department
Henry Lopez FOR INFORMATION CALL: Henry Lopez
(212) 815-2742
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 , 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: ______________
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,
<PAGE>
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):
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
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, in either
case together with one or more properly completed and duly executed Letter(s)
of Transmittal (or facsimile thereof) and any other required documents within
three business days after the date of execution of this Notice of Guaranteed
Delivery.
The undersigned acknowledges that it must deliver the Letter(s) of
Transmittal and the Old Capital Securities tendered hereby to the Exchange
Agent within the time period set forth above and that failure to do so could
result in a financial loss to the undersigned.
_____________________________________ _____________________________________
Name of Firm Authorized Signature
_____________________________________ _____________________________________
Address Title
_____________________________________ _____________________________________
Zip Code (Please Type or Print)
Area Code and Telephone No. _________ Dated: ______________________________
NOTE: DO NOT SEND CERTIFICATES FOR OLD CAPITAL SECURITIES WITH THIS FORM.
CERTIFICATES FOR OLD CAPITAL SECURITIES SHOULD ONLY BE SENT WITH YOUR LETTER
OF TRANSMITTAL.
