-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UEyIrO0QYMHehzeJyS5Oh56GnI/TWQ03cdjOxeBRi0OEbbarjBJuQKG7/G2TXNSf PNsitNF+asXDCP/g58cWeg== 0000898430-95-002496.txt : 19951130 0000898430-95-002496.hdr.sgml : 19951130 ACCESSION NUMBER: 0000898430-95-002496 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 6 REFERENCES 429: 033-60206 FILED AS OF DATE: 19951128 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GREAT WESTERN FINANCIAL CORP CENTRAL INDEX KEY: 0000043512 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 951913457 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 033-63057 FILM NUMBER: 95596783 BUSINESS ADDRESS: STREET 1: 9200 OAKDALE AVENUE CITY: CHATSWORTH STATE: CA ZIP: 91311 BUSINESS PHONE: 8187753411 MAIL ADDRESS: STREET 1: 9200 OAKDALE AVENUE CITY: CHATSWORTH STATE: CA ZIP: 91311 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GREAT WESTERN FINANCIAL TRUST I /DE/ CENTRAL INDEX KEY: 0001001571 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 033-63057-01 FILM NUMBER: 95596784 BUSINESS ADDRESS: STREET 1: 9200 OAKDALE AVE CITY: CHATSWORTH STATE: CA ZIP: 91311 BUSINESS PHONE: 8187753411 MAIL ADDRESS: STREET 1: C/O GREAT WESTERN FINANCIAL CORP STREET 2: 9200 OAKDALE AVENUE CITY: CHATWORTH STATE: CA ZIP: 91311 S-3/A 1 FORM S-3/A AMENDMENT NO. 2 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 28, 1995 REGISTRATION NO. 33-63057 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------- AMENDMENT NO. 2 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------- GREAT WESTERN DELAWARE 95-1913457 FINANCIAL CORPORATION GREAT WESTERN DELAWARE FINANCIAL TRUST I 95-6996765 (EXACT NAME OF (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER REGISTRANT AS INCORPORATION OR ORGANIZATION) IDENTIFICATION SPECIFIED IN ITS NUMBER) CHARTER) -------------- 9200 OAKDALE AVENUE CHATSWORTH, CALIFORNIA 91311 (818) 775-3411 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES) -------------- J. LANCE ERIKSON, ESQ. EXECUTIVE VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL GREAT WESTERN FINANCIAL CORPORATION 9200 OAKDALE AVENUE CHATSWORTH, CALIFORNIA 91311 (818) 775-3411 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) -------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the effective date of this Registration Statement as determined by market conditions. If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_] If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [_]
CALCULATION OF REGISTRATION FEE - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TITLE OF EACH CLASS OF PROPOSED MAXIMUM AMOUNT OF SECURITIES TO BE REGISTERED AGGREGATE OFFERING PRICE REGISTRATION FEE - ------------------------------------------------------------------------------- Debt Securities.................... (1)(2) NA - ------------------------------------------------------------------------------- Preferred Stock ($1.00 par value).. (1)(3) NA - ------------------------------------------------------------------------------- Depositary Shares.................. (1)(3)(4) NA - ------------------------------------------------------------------------------- Common Stock ($1.00 par value)..... (1)(5) NA - ------------------------------------------------------------------------------- Preferred Securities of Great Western Financial Trust I......... (1)(6) NA - ------------------------------------------------------------------------------- Guarantee of Preferred Securities of Great Western Financial Trust I... (1)(7) NA - ------------------------------------------------------------------------------- Securities Warrants................ (1)(8) NA - ------------------------------------------------------------------------------- Total.............................. $750,000,000 $77,586(9) - ------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
(footnotes on following page) THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (footnotes from preceding page) (1) In no event will the aggregate maximum offering price of all securities issued pursuant to this Registration Statement exceed $750,000,000 (or its equivalent in foreign currency) or, if any Debt Securities are issued with original issue discount, such greater amount as shall result in an aggregate offering price of $750,000,000 (or its equivalent in foreign currency). Any securities registered hereunder may be sold separately or as units with other securities registered hereunder. (2) Subject to Footnote (1), there is being registered hereunder an indeterminate principal amount of Debt Securities (which may be senior or subordinated). Without limiting the generality of the forgoing, Subordinated Debt Securities may be issued and sold to Great Western Financial Trust I, in which event such Subordinated Debt Securities may later be distributed to the holders of Preferred Securities upon a dissolution of Great Western Financial Trust I. (3) Subject to Footnote (1), there is being registered hereunder an indeterminate number of shares of Preferred Stock (par value $1.00 per share) as may be sold, from time to time, by Great Western Financial Corporation ("GWFC"). There is also being registered hereunder an indeterminate number of shares of Preferred Stock and Depositary Shares as shall be issuable upon conversion of Debt Securities registered hereby. (4) Subject to Footnote (1), there is being registered hereunder an indeterminate number of Depositary Shares to be issued pursuant to one or more Deposit Agreements. In the event GWFC elects to offer to the public fractional interests in shares of the Preferred Stock registered hereunder, Depositary Receipts will be distributed to those persons purchasing such fractional interests, and the shares of Preferred Stock will be issued to the Depositary under any such Deposit Agreement. (5) Subject to Footnote (1), there is being registered hereunder an indeterminate number of shares of Common Stock as may be sold, from time to time, by GWFC (including Rights appurtenant thereto). There is also being registered hereunder an indeterminate number of shares of Common Stock (including Rights appurtenant thereto) as shall be issuable upon conversion of the Preferred Stock or Debt Securities registered hereby. (6) Subject to Footnote (1), there is being registered hereunder an indeterminate number of Preferred Securities as may be sold, from time to time, by Great Western Financial Trust I. (7) Includes the rights of holders of the Preferred Securities under the Guarantee and the obligations of GWFC with respect to the Preferred Securities under the Amended and Restated Declaration of Trust included herein as Exhibit 4.14 and the Second Supplemental Indenture included herein as Exhibit 4.12. No separate consideration will be received for the Guarantee. (8) Subject to Footnote (1), there is being registered hereunder an indeterminate number of Senior Debt Securities Warrants, Subordinated Debt Securities Warrants, Preferred Stock Warrants, Depositary Shares Warrants and Common Stock Warrants representing rights to purchase Senior Debt Securities, Subordinated Debt Securities, Preferred Stock, Depositary Shares and Common Stock, respectively, registered pursuant to this Registration Statement. (9) Previously paid. Calculated pursuant to Rule 457(o) of the rules and regulations under the Securities Act of 1933, as amended. Includes $525,000,000 aggregate amount of Securities which were previously registered under Great Western Financial Corporation's Registration Statement on Form S-3 (Registration No. 33-60206). The registration statement fee specified in the table has been computed on the basis of $225,000,000 aggregate amount of Securities registered hereby, prior to including the previously registered and unsold Securities referred to above. THIS REGISTRATION STATEMENT INCLUDES $525,000,000 AGGREGATE AMOUNT OF SECURITIES WHICH WERE PREVIOUSLY REGISTERED UNDER GREAT WESTERN FINANCIAL CORPORATION'S REGISTRATION STATEMENT ON FORM S-3 (33-60206) AND REMAIN UNSOLD AS OF THE DATE HEREOF. AS PERMITTED BY RULE 429, THE PROSPECTUS WITH RESPECT TO THIS REGISTRATION STATEMENT ALSO RELATES TO THE PREVIOUSLY UNSOLD SECURITIES COVERED HEREBY. ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A + +REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE + +SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY + +OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT + +BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR + +THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE + +SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE + +UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF + +ANY SUCH STATE. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ SUBJECT TO COMPLETION, DATED NOVEMBER 28, 1995 PROSPECTUS [LOGO OF GREAT WESTERN] GREAT WESTERN FINANCIAL TRUST I SECURITIES Great Western Financial Corporation (the "Company") may offer from time to time, in one or more series, its unsecured senior debt securities (the "Senior Debt Securities"), warrants to purchase Senior Debt Securities (the "Senior Debt Securities Warrants"), its unsecured subordinated debt securities (the "Subordinated Debt Securities"), warrants to purchase Subordinated Debt Securities (the "Subordinated Debt Securities Warrants"), shares of its Preferred Stock, par value $1.00 per share (the "Preferred Stock"), warrants to purchase Preferred Stock (the "Preferred Stock Warrants"), Depositary Shares (as defined below), warrants to purchase Depositary Shares (the "Depositary Shares Warrants"), shares of its Common Stock, par value $1.00 per share (the "Common Stock"), and warrants to purchase Common Stock (the "Common Stock Warrants," and with the Senior Debt Securities Warrants, the Subordinated Debt Securities Warrants, the Preferred Stock Warrants and the Depositary Shares Warrants, being collectively referred to herein as the "Securities Warrants"). Great Western Financial Trust I (the "Trust") may offer from time to time preferred securities representing undivided beneficial interests in the assets of the Trust (the "Preferred Securities"). The payment of periodic cash distributions with respect to the Preferred Securities out of moneys held by the Trust and payments on liquidation, redemption or otherwise with respect to the Preferred Securities, will be guaranteed by the Company to the extent described herein (the "Guarantee"). The Senior Debt Securities, the Subordinated Debt Securities, the Preferred Stock, the Common Stock, the Securities Warrants, the Preferred Securities and the Guarantee are collectively referred to herein as the "Securities." Securities will have an aggregate offering price of $750,000,000 and will be offered on terms to be determined at the time of offering. In the case of Senior Debt Securities or Subordinated Debt Securities (collectively, the "Debt Securities"), the specific title, the aggregate principal amount, the purchase price, the maturity, the rate (or method of calculation) and time of payment of any interest, if any, the right of the Company, if any, to defer payment of interest on the Debt Securities and the maximum length of such deferral period, any redemption or sinking fund provisions, any conversion provisions and any other specific term of the Debt Securities will be set forth in the accompanying supplement to this Prospectus (the "Prospectus Supplement"). In the case of Preferred Stock, the specific number of shares, designation, stated value per share, liquidation preference per share, issuance price, dividend rate (or method of calculation), dividend payment dates, any redemption or sinking fund provisions, any conversion rights and other specific terms of the series of Preferred Stock will be set forth in the accompanying Prospectus Supplement. In addition, the Prospectus Supplement will describe whether interests in the Preferred Stock will be represented by depositary shares (the "Depositary Shares") evidenced by depositary receipts. In the case of Common Stock, the specific number of shares and issuance price per share will be set forth in the accompanying Prospectus Supplement. In the case of Securities Warrants, the duration, offering price, exercise price and detachability, if applicable, will be set forth in the accompanying Prospectus Supplement. In the case of Preferred Securities, the designation, number of securities, liquidation preference per security, purchase price, distribution rate (or method of calculation thereof), dates on which distributions shall be payable and dates from which distributions shall accrue, any voting rights, terms for any conversion or exchange into other securities, any redemption, exchange or sinking fund provisions and any other rights, preferences, privileges, limitations or restrictions related to the Preferred Securities and the terms upon which the proceeds of the sale of the Preferred Securities shall be used to purchase Subordinated Debt Securities of the Company will be set forth in the accompanying Prospectus Supplement. The Prospectus Supplement will also disclose whether the Securities will be listed on a national securities exchange and if they are not to be listed, the possible effects thereof on their marketability. Securities may be sold directly, through agents from time to time or through underwriters and/or dealers. If any agent of the Company or the Trust or any underwriter is involved in the sale of the Securities, the name of such agent or underwriter and any applicable commission or discount will be set forth in the accompanying Prospectus Supplement. See "Plan of Distribution." The Senior Debt Securities, if issued, will rank on a parity with all other unsecured and unsubordinated indebtedness of the Company. The Subordinated Debt Securities, if issued, will be unsecured and subordinated to all present and future Senior Indebtedness (as defined) of the Company. See "Description of Debt Securities." THE SECURITIES WILL NOT BE SAVINGS ACCOUNTS OR DEPOSITS AND WILL NOT BE INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES. ----------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. , 1995 THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH CAROLINA, NOR HAS THE COMMISSIONER OF INSURANCE RULED UPON THE ACCURACY OR THE ADEQUACY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT HERETO. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information can be inspected and copied at Room 1024 of the offices of the Commission, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and should be available for inspection and copying at the regional offices of the Commission located at Seven World Trade Center, 13th Floor, New York, New York 10048 and Suite 1400, Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of such material can be obtained from the principal offices of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Reports, proxy materials and other information concerning the Company may also be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005, at the office of the Pacific Stock Exchange, 301 Pine Street, San Francisco, California 94104, and at the offices of The International Stock Exchange of the United Kingdom and the Republic of Ireland. No separate financial statements of the Trust have been included herein. The Company does not consider that such financial statements would be material to holders of the Preferred Securities because (i) all of the voting securities of the Trust will be owned directly or indirectly by the Company, a reporting company under the Exchange Act, (ii) the Trust has no independent operations but exists for the sole purpose of issuing securities representing undivided beneficial interests in the assets of the Trust and investing the proceeds thereof in Subordinated Debt Securities issued by the Company, and (iii) the obligations of the Trust under the Trust Securities (as defined herein) are fully and unconditionally guaranteed by the Company to the extent that the Trust has funds available to meet such obligations. For financial statement purposes, the Trust will be consolidated with the Company. See "Description of Debt Securities--Particular Terms of the Subordinated Debt Securities Issued to the Trust" and "Description of Guarantee." This Prospectus does not contain all the information set forth in the Registration Statement and exhibits thereto which the Company has filed with the Commission under the Securities Act of 1933, and reference is hereby made to such Registration Statement, including the exhibits thereto. ---------------- INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE There are incorporated herein by reference the following documents of the Company filed with the Commission: (1) Annual Report on Form 10-K for the fiscal year ended December 31, 1994, as amended by the Form 10K-A dated April 24, 1995; (2) Quarterly Report on Form 10-Q for the quarters ended March 31, 1995, June 30, 1995 and September 30, 1995; (3) Current Report on Form 8-K dated June 30, 1995; and (4) all documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering of the Securities. Any statement contained 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 2 contained herein, in a Prospectus Supplement or in any subsequently filed document which is incorporated by reference herein modifies or supersedes such statements. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide without charge to each person, including any beneficial holder, to whom a copy of this Prospectus is delivered, upon the written or oral request of any such person, a copy of any or all the foregoing documents incorporated by reference herein, including exhibits specifically incorporated by reference in such documents but excluding all other exhibits to such documents. Requests should be made to the Corporate Secretary of the Company at 9200 Oakland Avenue, Chatsworth, California 91311, telephone number (818) 775-3411. 3 THE COMPANY GENERAL The Company is a savings and loan holding company organized in 1955 under the laws of the State of Delaware. The principal assets of the Company are the capital stock of Great Western Bank, a Federal Savings Bank ("GWB") and Aristar, Inc. ("Aristar"). GWB is a federally chartered stock savings bank. GWB conducts most of its retail banking through approximately 418 offices located primarily in California and Florida. Real estate lending operations are conducted directly by GWB or by direct subsidiaries through approximately 254 offices in 23 states with concentration in California, Florida and Washington. Directly or through its subsidiaries, GWB also engages in mortgage banking and other related financial services. Aristar conducts consumer finance operations through 476 offices in 21 states, most of which operate principally under the names Blazer Financial Services or City Finance and provide direct installment loans and related credit insurance services and purchase retail installment contracts. At September 30, 1995, the Company had consolidated total assets of approximately $44.7 billion. GWB is regulated by the Office of Thrift Supervision ("OTS") and the Federal Deposit Insurance Corporation ("FDIC") which, through the Savings Association Insurance Fund, insures the deposit accounts of savings associations. GWB is a member of the Federal Home Loan Bank of San Francisco, which is one of several regional banks for federally insured savings institutions comprising the Federal Home Loan Bank System. GWB is further subject to certain regulations of the Board of Governors of the Federal Reserve System governing reserves required to be maintained against deposits and other matters. The Company is a legal entity separate and distinct from GWB. The principal source of the Company's revenues on an unconsolidated basis has been dividends, interest and management fees from GWB. Various statutory and regulatory restrictions and tax considerations, however, can limit, directly or indirectly, the amount of dividends, interest and management fees payable by GWB. Dividends from Aristar continue to be a source of revenue to the Company. The operations of savings associations such as GWB are significantly influenced by general economic conditions, the monetary and fiscal policies of the federal government, and the policies of regulatory authorities, including the Federal Reserve Board, the OTS and the FDIC. Deposit flows and costs of funds are influenced by interest rates on competing investments and general market rates of interest. The Company competes with commercial banks and other financial intermediaries for funds. Lending and other investment activities are affected by the demand for mortgage financing and consumer and other types of loans, which in turn are affected by the interest rates at which such financing may be offered and other factors affecting the supply of housing and the availability of funds. The Company from time to time engages in merger discussions with other financial institutions and reviews various acquisition opportunities, including transactions with governmental agencies. No assurances can be given that the Company will complete any particular transaction. The Company's executive offices are located at 9200 Oakdale Avenue, Chatsworth, California 91311, and its telephone number is (818) 775-3411. THE TRUST The Trust is a statutory business trust formed under Delaware law pursuant to (i) a declaration of trust (the "Declaration") executed by the Company, as sponsor for the Trust (the "Sponsor"), and Trustees (as defined herein) of the Trust and (ii) the filing of a certificate of trust with the Secretary of State of the State of Delaware on September 27, 1995. The Trust exists for the exclusive purpose of (i) issuing the Preferred Securities and common securities representing undivided beneficial interests in the assets of the Trust (the "Common Securities" and, together with the Preferred Securities, the "Trust Securities"), (ii) investing the 4 gross proceeds from the sale of the Trust Securities in Subordinated Debt Securities of the Company and (iii) engaging in only those other activities necessary or incidental thereto. All of the Common Securities will be directly or indirectly owned by the Company. The Common Securities will rank pari passu, and payments will be made thereon pro rata with the Preferred Securities, except that, upon an event of default under the Declaration, the rights of the holders of the Common Securities to payment in respect of distributions and payments upon liquidation, redemption and otherwise will be subordinated to the rights of the holders of the Preferred Securities. The Company will directly or indirectly acquire Common Securities in an aggregate liquidation amount equal to 3% of the total capital of the Trust. The Trust has a term of approximately 55 years but may terminate earlier, as provided in the Declaration. The Trust's business and affairs will be conducted by the trustees (the "Trustees") appointed by the Company as the direct or indirect holder of all the Common Securities. The holder of the Common Securities will be entitled to appoint, remove or replace any of, or increase or reduce the number of, the Trustees of the Trust. The duties and obligations of the Trustees shall be governed by the Declaration. A majority of the Trustees of the Trust will be persons who are employees or officers of, or who are affiliated with, the Company (the "Regular Trustees"). One Trustee of the Trust will be either a natural person who is a resident of the State of Delaware or an entity which has its principal place of business in the State of Delaware (the "Delaware Trustee"). A financial institution that is not affiliated with the Company and has a specified minimum amount of aggregate capital, surplus and undivided profits of not less than $50,000,000 shall act as property trustee and as indenture trustee for the purposes of the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), pursuant to the terms set forth in a Prospectus Supplement (the "Property Trustee"). The Property Trustee will be the only trustee of the Trust that will be a trustee for purposes of the Trust Indenture Act. The Company will pay all debts and obligations of the Trust (other than with respect to Trust Securities) and all fees and expenses related to the Trust and the offering of the Trust Securities. The initial Delaware Trustee for the Trust is Michael J. Majchrzak, FCC National Bank, 300 King Street, Wilmington, Delaware 19801. The initial Property Trustee is The First National Bank of Chicago, One First National Plaza, Suite 0126, Chicago, Illinois 60670-0126. The address for the Trust is c/o Great Western Financial Corporation, the Sponsor of the Trust, at the Company's corporate headquarters at 9200 Oakdale Avenue, Chatsworth, California 91311. USE OF PROCEEDS Except as otherwise disclosed in the accompanying Prospectus Supplement, the net proceeds from the sale of the Securities by the Company (including the sale of any Subordinated Debt Securities to the Trust) are intended to be used for general corporate purposes, which may include lending and investment activities, repayment or purchase of outstanding debt, investments in or extensions of credit to subsidiaries or development of new business. The Trust will use all proceeds received from the sale of Preferred Securities to purchase Subordinated Debt Securities from the Company. 5 SELECTED FINANCIAL DATA The following table sets forth selected financial and other data for the Company and its consolidated subsidiaries for the periods indicated. Such information is qualified in its entirety by the more detailed financial information set forth in the financial statements and the notes thereto incorporated by reference herein. See "Incorporation of Certain Documents by Reference."
AT OR FOR THE YEAR ENDED DECEMBER 31, ----------------------------------------------------------- 1994 1993 1992 1991 1990 ----------- ----------- ----------- ----------- ----------- (DOLLARS IN THOUSANDS, EXCEPT PER SHARE) SUMMARY OF OPERATIONS Interest income......... $ 2,629,718 $ 2,680,784 $ 3,091,093 $ 3,718,796 $ 4,073,085 Interest expense........ 1,307,448 1,297,930 1,668,731 2,453,540 2,905,134 ----------- ----------- ----------- ----------- ----------- Net interest income..... 1,322,270 1,382,854 1,422,362 1,265,256 1,167,951 Provision for loan losses................. 207,200 463,000 420,000 149,900 285,000 ----------- ----------- ----------- ----------- ----------- Net interest income after provision for loan losses............ 1,115,070 919,854 1,002,362 1,115,356 882,951 Other income............ 367,897 327,855 282,131 257,582 192,393 Noninterest expense..... 1,076,433 1,155,662 1,188,981 867,508 799,670 ----------- ----------- ----------- ----------- ----------- Earnings before taxes on income................. 406,534 92,047 95,512 505,430 275,674 Federal and state taxes on income.............. 155,300 30,000 41,600 207,300 148,600 Accounting changes...... -- -- 31,094 -- -- ----------- ----------- ----------- ----------- ----------- Net earnings............ $ 251,234 $ 62,047 $ 85,006 $ 298,130 $ 127,074 =========== =========== =========== =========== =========== SUMMARY OF FINANCIAL CONDITION Cash and securities..... $ 2,065,660 $ 1,846,780 $ 1,660,485 $ 1,397,529 $ 1,819,823 Loans receivable and mortgage-backed securities............. 37,647,975 33,850,799 33,752,661 35,115,730 34,767,295 Real estate............. 256,967 434,077 1,153,383 1,123,043 960,815 Other assets............ 2,247,655 2,216,704 1,872,657 1,963,326 1,857,874 ----------- ----------- ----------- ----------- ----------- Total assets............ $42,218,257 $38,348,360 $38,439,186 $39,599,628 $39,405,807 =========== =========== =========== =========== =========== Customer accounts....... $28,700,947 $31,531,563 $30,908,665 $30,570,368 $29,649,038 Borrowings and debentures............. 10,120,660 3,479,341 4,151,052 5,592,453 6,539,388 Other liabilities....... 912,864 914,055 929,735 1,115,747 1,207,539 Stockholders' equity.... 2,483,786 2,423,401 2,449,734 2,321,060 2,009,842 ----------- ----------- ----------- ----------- ----------- Total liabilities and equity................. $42,218,257 $38,348,360 $38,439,186 $39,599,628 $39,405,807 =========== =========== =========== =========== =========== PER COMMON SHARE DATA Fully diluted earnings ....................... $ 1.69 $ .28 $ .53 $ 2.24 $ .99 Dividends............... .92 .92 .91 .87 .83
6 RATIO OF EARNINGS TO FIXED CHARGES The following table sets forth the ratio of earnings to fixed charges for the Company for each of the periods indicated. Earnings represent earnings before income taxes, accounting changes and fixed charges. Fixed charges, excluding interest on customer accounts, represent other interest expense (including capitalized interest) and one-third (the proportion deemed representative of the interest factor) of rents. Fixed charges, including interest on customer accounts, represent all interest expense (including capitalized interest) and one-third of rents.
YEAR ENDED DECEMBER 31, ------------------------ 1994 1993 1992 1991 1990 ---- ---- ---- ---- ---- Excluding interest on customer accounts................ 2.05 1.23 1.26 1.96 1.30 Including interest on customer accounts................ 1.30 1.07 1.05 1.20 1.09
DESCRIPTION OF DEBT SECURITIES Senior Debt Securities may be issued from time to time in series under an Indenture dated as of September 12, 1990, between the Company and First Interstate Bank, Ltd., as amended and supplemented by a First Supplemental Indenture, dated April 30, 1993 (as amended and supplemented, the "Senior Indenture"), among the Company, First Interstate Bank, Ltd. and Citibank, N.A., as Trustee (the "Senior Trustee"). Subordinated Debt Securities may be issued from time to time in series under an Indenture dated as of September 12, 1990, as amended and supplemented by a First Supplemental Indenture, dated April 30, 1993 (as amended and supplemented, the "Subordinated Indenture"), between the Company and Harris Trust and Savings Bank, as Trustee (the "Subordinated Trustee"). The Senior Indenture and the Subordinated Indenture are sometimes referred to collectively as the "Indentures," and the Senior Trustee and the Subordinated Trustee are sometimes referred to collectively as the "Indenture Trustees." As used under this caption, unless the context otherwise requires, Offered Senior Debt Securities, Offered Subordinated Debt Securities and Offered Debt Securities shall mean the Senior Debt Securities, the Subordinated Debt Securities and the Debt Securities, respectively, offered by this Prospectus and the accompanying Prospectus Supplement. The statements under this caption are summaries of the material general provisions contained in the Indentures, do not purport to be complete and are qualified in their entirety by reference to the Indentures, including the definition therein of certain terms, copies of which are incorporated by reference as exhibits to the Registration Statement of which this Prospectus is a part. The following sets forth material general terms and provisions of the Debt Securities. Further material terms of the Offered Debt Securities will be summarized in the Prospectus Supplement relating thereto. GENERAL Each Indenture provides for the issuance of Debt Securities in series, and does not limit the principal amount of Debt Securities which may be issued thereunder. The Debt Securities will not be savings accounts or deposits and will not be insured by the Federal Deposit Insurance Corporation, the United States or any agency or fund of the United States. Reference is made to the Prospectus Supplement for the following terms of the Offered Debt Securities: (1) the specific title of the Offered Debt Securities; (2) whether the Offered Debt Securities are Senior Debt Securities or Subordinated Debt Securities; (3) the aggregate principal amount of the Offered Debt Securities; (4) the percentage of their principal amount at which the Offered Debt Securities will be issued; (5) the date on which the Offered Debt Securities will mature; (6) the rate or rates per annum or the method for determining such rate or rates, if any, at which the Offered Debt Securities will bear interest; (7) the times at which any such interest will be payable; (8) any provisions relating to optional or mandatory redemption of the Offered Debt Securities at the option of the Company or pursuant to sinking fund or analogous provisions; (9) the denominations in which the Offered Debt Securities are authorized to be issued; (10) any provisions relating to the conversion or exchange of the Offered Debt Securities into Common Stock, Preferred Stock or 7 into Debt Securities of another series; (11) whether the Offered Debt Securities are to be issued in fully registered form without coupons or in bearer form with interest coupons or both; (12) whether the Offered Debt Securities are denominated in United States dollars or a foreign currency or units of two or more of such foreign currencies and whether interest is payable in a currency other than the currency in which the Offered Debt Securities are denominated; (13) the place or places at which the Company will make payments of principal (and premium, if any) and interest, if any, and the method of such payment; (14) whether the Offered Debt Securities will be issued in whole or in part in global form; (15) any additional covenants and Events of Default and the remedies with respect thereto not currently set forth in the respective Indenture; and (16) any other specific terms of the Offered Debt Securities. The applicable Prospectus Supplement with respect to a series of Offered Subordinated Debt Securities issued by the Company to the Trust will describe the rights, if any, of the Company to defer payments of interest on the Offered Subordinated Debt Securities by extending the interest payment period, and the duration of any such extensions. One or more series of the Debt Securities may be issued as discounted Debt Securities (bearing no interest or bearing interest at a rate which at the time of issuance is below market rates) to be sold at a substantial discount below their stated principal amount. Tax and other special considerations applicable to any such discounted Debt Securities will be described in the Prospectus Supplement relating thereto. STATUS OF SENIOR DEBT SECURITIES The Senior Debt Securities will be unsecured and unsubordinated obligations of the Company and will rank on a parity with all other unsecured and unsubordinated indebtedness of the Company. However, since the Company is a savings and loan holding company, the right of the Company, and hence the right of creditors of the Company (including the holders of the Senior Debt Securities), to participate in any distribution of the assets of any subsidiary upon its liquidation or reorganization or otherwise is necessarily subject to the prior claims of creditors of the subsidiary, except to the extent that claims of the Company itself as a creditor of the subsidiary may be recognized. In addition, dividends, loans and advances from certain subsidiaries, including GWB, to the Company are subject to statutory and regulatory restrictions and tax considerations. SUBORDINATION OF SUBORDINATED DEBT SECURITIES The obligations of the Company pursuant to Subordinated Debt Securities will be subordinate in right of payment to all Senior Indebtedness of the Company. "Senior Indebtedness" of the Company is defined to mean the principal of, and premium, if any, and interest (including interest accruing subsequent to the commencement of any proceeding for the bankruptcy or reorganization of the Company under any applicable bankruptcy, insolvency or similar law now or hereafter in effect) on (a) all indebtedness of the Company whether heretofore or hereafter incurred (i) for borrowed money or (ii) incurred in connection with the acquisition by the Company or a subsidiary of assets other than in the ordinary course of business, for the payment of which the Company is liable directly or indirectly by guarantee, letter of credit, obligation to purchase or acquire or otherwise, or the payment of which is secured by a lien, charge or encumbrance on assets acquired by the Company unless the terms of the instrument evidencing such indebtedness or pursuant to which such indebtedness is issued specifically provide that such indebtedness is not superior in right of payment to the Subordinated Debt Securities, (b) amendments, modifications, renewals, extensions and deferrals of any such indebtedness, and (c) any indebtedness issued in exchange for any such indebtedness. The Subordinated Indenture does not contain any limitations on the amount of Senior Indebtedness which may be hereafter incurred by the Company. No payment pursuant to the Subordinated Debt Securities may be made unless all amounts of principal (and premium, if any) and interest then due on all Senior Indebtedness of the Company shall have been paid in full or if there shall have occurred and be continuing beyond any applicable grace period a default in any 8 payment with respect to any such Senior Indebtedness, or if there shall have occurred any event of default with respect to any Senior Indebtedness permitting the holders thereof to accelerate the maturity thereof, or if any judicial proceeding shall be pending with respect to any such default. Upon any distribution of the assets of the Company upon dissolution, winding-up, liquidation or reorganization, the holders of Senior Indebtedness of the Company will be entitled to receive payment in full of principal, premium, if any, and interest (including interest accruing subsequent to the commencement of any proceeding for the bankruptcy or reorganization of the Company under any applicable bankruptcy, insolvency or similar law now or hereafter in effect) before any payment is made on the Subordinated Debt Securities. By reason of such subordination, in the event of insolvency of the Company, holders of Senior Indebtedness of the Company may receive more, ratably, and holders of the Subordinated Debt Securities having a claim pursuant to the Subordinated Debt Securities may receive less, ratably, than the other creditors of the Company. Such subordination will not prevent the occurrence of any Event of Default in respect of the Subordinated Debt Securities. The Prospectus Supplement relating to an issue of Subordinated Debt Securities will set forth the aggregate amount of outstanding indebtedness as of the most recent practicable date that by the terms of such Subordinated Debt Securities will be senior to the Subordinated Debt Securities. The Prospectus Supplement will also describe any limitations on the issuance of additional Senior Indebtedness. CONVERSION RIGHTS The terms, if any, on which Debt Securities of a series may be exchanged for or converted into shares of Common Stock, Preferred Stock or Debt Securities of another series will be set forth in the Prospectus Supplement relating thereto. ABSENCE OF RESTRICTIVE COVENANTS The Company is not restricted by the Indentures from paying dividends or from incurring, assuming or becoming liable for any type of debt or other obligations or, except as noted below, from creating liens on its property for any purpose. The Indentures do not require the maintenance of any financial ratios or specified levels of net worth or liquidity. Except as set forth in the Indenture and described under the heading "Covenants for Debt Securities" below, there are no provisions of the Indentures which afford holders of the Debt Securities protection in the event of a highly leveraged transaction involving the Company. COVENANTS FOR DEBT SECURITIES With respect to both the Senior Debt Securities and the Subordinated Debt Securities, the Indentures contain the following covenants: Limitations on Liens. The Company may not create, assume, incur or permit to exist any indebtedness for borrowed money secured by a pledge, lien or other encumbrance (except for certain liens specifically permitted by the Indentures, including liens in favor of the United States or any state thereof) on the Voting Stock (as defined in the Indentures) of GWB owned directly or indirectly by the Company without making effective provision whereby the outstanding Debt Securities will be secured equally and ratably with such secured indebtedness, except that the foregoing shall not restrict any such pledge, lien or other encumbrance if (i) GWB (having obtained any necessary regulatory approval) has guaranteed payment of the principal of and interest on the outstanding Debt Securities, or (ii) after giving effect to such pledge, lien or other encumbrance, the Company will own directly or indirectly more than 80% of the outstanding shares of the Voting Stock (except for directors' qualifying shares) of GWB (which term includes any successor by merger, assumption, conversion or otherwise) free of any such pledge, lien or other encumbrance. Limitations on Disposition of Voting Stock of, and Merger and Sale of Assets by, GWB. The Company (which term includes any successor by merger, assumption or otherwise) will own directly or indirectly more than 80% of the outstanding shares of the Voting Stock (except for directors' qualifying shares) of GWB (which term includes any successor by merger, assumption, conversion or otherwise); except that the foregoing shall not restrict (i) any transfer where the proceeds are invested, within 30 days of such transfer, 9 in an 80% owned subsidiary (including any corporation or other entity which upon such investment becomes such a subsidiary) engaged principally in a savings, banking or other depository institution business, (ii) any disposition in exchange for (or in connection with which the Company becomes the owner of) more than 80% of the stock of any savings, banking or other depository institutions, or (iii) any transfer following a guarantee by GWB (having obtained any necessary regulatory approval) of payment of the principal of and interest on the outstanding Debt Securities. EVENTS OF DEFAULT An Event of Default with respect to Debt Securities of any series is defined in each of the Indentures as being: (a) failure to pay principal of or any premium on any Debt Security of that series when due; (b) failure to pay any interest on any Debt Security of that series when due, continued for 30 days; (c) failure to deposit any sinking fund payment when due, in respect of any Debt Security of that series; (d) failure to perform any other covenant of the Company in the Indenture (other than a covenant included in the Indenture solely for the benefit of one or more series of Debt Securities other than that series), continued for 60 days after written notice as provided in the Indenture; (e) certain events of bankruptcy, insolvency, conservatorship, receivership or reorganization of the Company; (f) a default under any mortgage, indenture or instrument evidencing any indebtedness for borrowed money by the Company (including the Indenture) resulting in an aggregate principal amount exceeding $10,000,000 becoming or being declared due and payable prior to its maturity date or constituting a failure to pay at maturity an aggregate principal amount exceeding $10,000,000, unless such acceleration has been rescinded or annulled or such indebtedness has been discharged within 10 days after written notice to the Company by the Indenture Trustee or Holders of at least 25% in aggregate principal amount of the outstanding Debt Securities declaring a default, or the Company is contesting the validity of such default in good faith by appropriate proceedings; and (g) any other Event of Default provided with respect to the Debt Securities of that series. If an Event of Default with respect to the outstanding Debt Securities of any series occurs and is continuing, either the Indenture Trustee or the Holders of at least 25% in aggregate principal amount of the outstanding Debt Securities of that series may declare the principal amount (or, if the Debt Securities of that series are original issue discount Debt Securities, such portion of the principal amount as may be specified in the terms of that series) of all the outstanding Debt Securities of that series to be due and payable immediately. At any time after the declaration of acceleration with respect to the Debt Securities of any series has been made, but before a judgment or decree based on acceleration has been obtained, the Holders of a majority in aggregate principal amount of the outstanding Debt Securities of that series may, under certain circumstances, rescind and annul such acceleration. The Indentures provide that, subject to the duty of the Indenture Trustee during default to act with the required standard of care, the Indenture Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request or direction of any of the Holders, unless such Holders shall have offered to the Indenture Trustee reasonable indemnity. Subject to such provisions for the indemnification of the Indenture Trustee and subject to certain limitations, the Holders of a majority in aggregate principal amount of the outstanding Debt Securities of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Indenture Trustee, or exercising any trust or power conferred on the Indenture Trustee, with respect to the Debt Securities of that series. The Company is required to furnish to the Indenture Trustees annually a statement as to the performance by the Company of certain of its obligations under the Indentures and as to any default in such performance. MODIFICATION AND WAIVER Modifications and amendments of each of the Indentures may be made by the Company and the respective Indenture Trustee without the consent of any Holders to, among other things, (a) evidence the succession of another corporation to the Company, (b) add to the covenants of the Company or surrender any right or power conferred upon the Company, (c) cure any ambiguity, correct or supplement any provision 10 which may be defective or inconsistent or make any other provisions, provided that such action does not adversely affect the interests of the Holders of Debt Securities of any series in any material respect, or (d) evidence and provide for a successor Indenture Trustee. Modifications and amendments of each of the Indentures may be made by the Company and the respective Indenture Trustee with the consent of the Holders of a majority in aggregate principal amount of the outstanding Debt Securities of each series affected by such modifications or amendment; provided, however, that no such modification or amendment may, without the consent of the Holder of each outstanding Debt Security affected thereby, (a) change the stated maturity date of the principal of, or any installment of principal of or interest, if any, on any Debt Security, (b) reduce the principal amount of, or premium or interest, if any, on any Debt Security, (c) reduce the amount of principal of an original issue discount Debt Security payable upon acceleration of the maturity thereof, (d) change the currency of payment of the principal of, or premium or interest, if any, on any Debt Security, (e) impair the right to institute suit for the enforcement of any payment on or with respect to any Debt Security, (f) in the case of Subordinated Debt Securities, modify the subordination provisions in a manner adverse to the Holders of the outstanding Subordinated Debt Securities, (g) modify the conversion provisions, if any, of any Debt Security in a manner adverse to the Holder of that Debt Security, or (h) reduce the percentage in principal amount of the outstanding Debt Security of any series, the consent of whose Holders is required for modification or amendment of that Indenture or for waiver of compliance with certain provisions of that Indenture or for waiver of certain defaults. The Holders of a majority in aggregate principal amount of the outstanding Debt Securities of each series may, on behalf of all Holders of the Debt Securities of that series, waive, insofar as that series is concerned, compliance by the Company with certain restrictive provisions of the Indentures. The Holders of a majority in aggregate principal amount of the outstanding Debt Securities of each series may, on behalf of all Holders of the Debt Securities of that series, waive any past default under the Indentures with respect to the Debt Securities of that series, except a default in the payment of principal or premium or interest, if any, or a default in respect of a covenant or provision which under the terms of the Indentures cannot be modified or amended without the consent of the Holder of each outstanding Debt Security of the series affected. CONSOLIDATION, MERGER AND SALE OF ASSETS Each of the Indentures provide that the Company, without the consent of the Holders of any of the Debt Securities, may consolidate or merge with or into, or transfer its assets substantially as an entirety to, any corporation organized under the laws of the United States or any state, provided that the successor corporation assumes the Company's obligations under the Indentures, that after giving effect to the transaction no Event of Default, and no event which, after notice or lapse of time, would become an Event of Default, shall have occurred and be continuing, and that certain other conditions are met. PARTICULAR TERMS OF THE SUBORDINATED DEBT SECURITIES ISSUED TO THE TRUST In the event Subordinated Debt Securities are issued to the Trust (or a Trustee of the Trust) in connection with the issuance of Trust Securities by the Trust, such Subordinated Debt Securities subsequently may be distributed pro rata to the holders of the Trust Securities in connection with the dissolution of the Trust upon the occurrence of certain events to be described in the Prospectus Supplement relating to the Trust Securities. Only one series of Subordinated Debt Securities will be issued to the Trust, or a Trustee of the Trust. If Subordinated Debt Securities of the Company are issued to the Trust or a Trustee of the Trust in connection with the issuance of Trust Securities and (i) there shall have occurred any event that would constitute an Event of Default, (ii) the Company shall be in default with respect to its payment of any obligations under the Guarantee (as defined herein) or Common Securities guarantee (see "Description of Guarantee"), or (iii) the Company shall have given notice of its election to defer payments of interest on such Subordinated Debt Securities by extending the interest payment period as provided with respect to that series 11 of Subordinated Debt Securities and such period, or any extension thereof, shall be continuing, then (a) the Company shall not, and shall cause any subsidiary of the Company that is not a wholly owned subsidiary of the Company not to, declare or pay any dividend on, make any distribution with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any of its capital stock or the capital stock of any such subsidiary, and (b) the Company shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities (including guarantees) issued by the Company that rank pari passu with or junior to such Subordinated Debt Securities; provided however, that, restriction (a) above will not apply to any stock dividend paid by the Company or any of its subsidiaries where the dividend stock is the same stock as that on which the dividend is being paid. In the event Subordinated Debt Securities are issued to the Trust or a Trustee of the Trust in connection with the issuance of Trust Securities, for so long as the Trust Securities remain outstanding, the Company will covenant (i) to directly or indirectly maintain 100% ownership of the Common Securities; provided, however, that any permitted successor of the Company under the Indenture may succeed to the Company's ownership of the Common Securities and (ii) to use its reasonable efforts to cause the Trust (a) to remain a statutory business trust, except in connection with the distribution of Subordinated Debt Securities to the holders of Trust Securities in liquidation of the Trust, the redemption of all of the Trust Securities, or certain mergers, consolidations or amalgamations, each as permitted by the Declaration, and (b) to otherwise continue to be classified as a grantor trust for United States federal income tax purposes. If Subordinated Debt Securities are issued to the Trust or a Trustee of the Trust in connection with the issuance of Trust Securities, (i) the aggregate principal amount of the Subordinated Debt Securities will be equal to the sum of the aggregate stated liquidation amount of the Trust Securities; (ii) the interest rate and payment dates on the Subordinated Debt Securities will match the distribution rate and distribution and other payment dates on the Trust Securities; and (iii) the Company will agree to pay all costs, expenses, debts and obligations of the Trust other than with respect to the Trust Securities. If Subordinated Debt Securities are issued to the Trust or a Trustee of the Trust in connection with the issuance of Trust Securities and an Event of Default with respect to the Subordinated Debt Securities, constituting the failure to pay interest or principal on the Subordinated Debt Securities on the date such interest or principal is otherwise payable, has occurred and is continuing, then a holder of Trust Securities may directly institute a proceeding for enforcement of payment to such holder directly of the principal of or interest on the Subordinated Debt Securities having a principal amount equal to the aggregate liquidation amount of the Trust Securities of such holder on or after the respective due date specified in the Subordinated Debt Securities. The holders of Trust Securities will not be able to exercise directly any other remedy available to the holders of the Subordinated Debt Securities unless the Trustee of the Trust fails to do so. GLOBAL SECURITIES The Debt Securities of a series may be issued in whole or in part in global form (the "Global Securities"). The Global Securities will be deposited with a depositary (the "Depositary"), or with a nominee for a Depositary, identified in the Prospectus Supplement. In such case, one or more Global Securities will be issued in a denomination or aggregate denominations equal to the portion of the aggregate principal amount of outstanding Debt Securities of the series to be represented by such Global Security or Securities. Unless and until it is exchanged in whole or in part for Debt Securities in definitive form, a Global Security may not be transferred except as a whole by the Depositary for such Global Security to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a successor of such Depositary or a nominee of such successor. The specific material terms of the depositary arrangement with respect to any portion of a series of Debt Securities to be represented by a Global Security will be described in the Prospectus Supplement. The Company anticipates that the following provisions will apply to all depositary arrangements. 12 Upon the issuance of a Global Security, the Depositary for such Global Security will credit, on its book-entry registration and transfer system, the respective principal amounts of the Debt Securities represented by such Global Security to the accounts of persons that have accounts with such Depositary ("participants"). The accounts to be credited shall be designated by any underwriters or agents participating in the distribution of such Debt Securities. Ownership of beneficial interests in a Global Security will be limited to participants or persons that may hold interests through participants. Ownership of beneficial interests in such Global Security will be shown on, and the transfer of that ownership will be effected only through, records maintained by the Depositary for such Global Security (with respect to interests or participants) or by participants or persons that hold through participants (with respect to interest of persons other than participants). So long as the Depositary for a Global Security, or its nominee, is the registered owner of such Global Security, such Depositary or such nominee, as the case may be, will be considered the sole owner or Holder of the Debt Securities represented by such Global Security for all purposes under the Indenture; provided, however, that for purposes of obtaining any consents or directions required to be given by the Holders of the Debt Securities, the Company, the Indenture Trustee and their respective agents will treat a person as the holder of such principal amount of Debt Securities as specified in a written statement of the Depositary. In addition, notwithstanding any other provisions to the contrary in the Indenture, the rights of the beneficial owners of the Debt Securities to receive payment of the principal of and interest on such Debt Securities, on or after the respective due dates expressed in such Debt Securities, or to institute suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of the beneficial owners. Except as set forth herein or otherwise provided in the Prospectus Supplement, owners of beneficial interests in a Global Security will not be entitled to have the Debt Securities represented by such Global Security registered in their names, will not receive physical delivery of such Debt Securities in definitive form and will not be considered the owners or Holders thereof under the Indenture. Principal, premium, if any, and interest payments on Debt Securities represented by a Global Security registered in the name of a Depositary or its nominee will be made to such Depositary or its nominee, as the case may be, as the registered owner of such Global Security. None of the Company, the Indenture Trustee or any Paying Agent for such Debt Securities will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in such Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. The Company expects that the Depositary for any Debt Securities represented by a Global Security, upon receipt of any payment of principal, premium, if any, or interest will immediately credit participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Global Security as shown on the records of such Depositary. The Company also expects that payments by participants will be governed by standing instructions and customary practices, as is now the case with the securities held for the accounts of customers registered in "street names" and will be the responsibility of such participants. If the Depositary for any Debt Securities represented by a Global Security is at any time unwilling or unable to continue as Depositary and a successor Depositary is not appointed by the Company within 90 days, the Company will issue such Debt Securities in definitive form in exchange for such Global Security. In addition, the Company may at any time and in its sole discretion determine not to have any of the Debt Securities of a series represented by one or more Global Securities and, in such event, will issue Debt Securities of such series in definitive form in exchange for all of the Global Security or Securities representing such Debt Securities. The laws of some states require that certain purchasers of securities take physical delivery of such securities in definitive form. Such laws may impair the ability to transfer beneficial interests in Debt Securities represented by Global Securities. 13 REGARDING THE INDENTURE TRUSTEES Senior Trustee The Company maintains deposit accounts and banking relationships with the Senior Trustee and engages in various investments and borrowing transactions with the Senior Trustee. Subordinated Trustee GWB maintains deposit accounts and banking relationships with the Subordinated Trustee and engages in various investments and borrowing transactions with the Subordinated Trustee. DESCRIPTION OF PREFERRED STOCK The following description of the terms of the Preferred Stock sets forth material general terms and provisions of the Preferred Stock to which any Prospectus Supplement may relate. Other material terms of any series of the Preferred Stock offered by any Prospectus Supplement will be described in such Prospectus Supplement. The description of the provisions of the Preferred Stock set forth below and in any Prospectus Supplement does not purport to be complete and is subject to and qualified in its entirety by reference to the Company's Restated Certificate of Incorporation (the "Certificate of Incorporation"), and the certificate of designations (a "Certificate of Designations") relating to each series of the Preferred Stock which will be filed with the Commission and incorporated by reference as an exhibit to the Registration Statement of which this Prospectus is a part at or prior to the time of the issuance of such series of the Preferred Stock. Further material provisions of the Preferred Stock will be summarized in the Prospectus Supplement relating thereto. GENERAL The authorized capital stock of the Company consists of 200,000,000 shares of Common Stock, $1.00 par value per share, and 10,000,000 shares of preferred stock, $1.00 par value per share ("preferred stock of the Company," which term, as used herein, includes the Preferred Stock offered hereby). See "Description of Common Stock." Under the Certificate of Incorporation, the Board of Directors of the Company is authorized without further stockholder action to provide for the issuance of up to 10,000,000 shares of preferred stock of the Company, in one or more series, with such voting powers, full or limited, and with such designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, as shall be stated in the resolution or resolutions providing for the issue of a series of such stock, adopted, at any time or from time to time, by the Board of Directors of the Company (as used herein the term "Board of Directors of the Company" includes any duly authorized committee thereof). As described under "Description of Depositary Shares," the Company may, at its option, elect to offer Depositary Shares evidenced by depositary receipts (the "Depositary Receipts"), each representing a fraction (to be specified in the Prospectus Supplement relating to the particular series of the Preferred Stock) of a share of the particular series of the Preferred Stock issued and deposited with a depositary, in lieu of offering full shares of such series of the Preferred Stock. Under regulations adopted by the OTS, if the holders of shares of any series of Preferred Stock of the Company become entitled to vote for the election of directors because dividends on such series are in arrears, such series may then be deemed a "class of voting securities" and a holder of more than 25% of such series (or a holder of more than 10% if it has any "control factor" with respect to the Company or a holder of any shares of Preferred Stock if it exercises a "controlling influence" over the Company) may then be subject to regulation as a savings and loan holding company in accordance with the Savings and Loan Holding Company Act, as amended. In addition, at such time as such series is deemed a class of voting securities, (i) any other savings and loan holding company may be required to obtain the approval of the OTS under the Savings and Loan Holding Company Act, as amended, to acquire or retain more than 5% of such series and (ii) any person other than a savings and loan holding company may be required to obtain the approval of the OTS under the Change in Bank Control Act to acquire or retain more than 10% of such series. 14 The Preferred Stock shall have the dividend, liquidation, redemption and voting rights set forth below unless otherwise provided in a Prospectus Supplement relating to a particular series of the Preferred Stock. Reference is made to the Prospectus Supplement relating to the particular series of the Preferred Stock offered thereby for specific terms, including: (i) the designation and stated value per share of such Preferred Stock and the number of shares offered; (ii) the amount of liquidation preference per share; (iii) the initial public offering price at which such Preferred Stock will be issued; (iv) the dividend rate (or method of calculation), the dates on which dividends shall be payable and the dates from which dividends shall commence to cumulate, if any; (v) any redemption or sinking fund provisions; (vi) any conversion rights; (vii) whether the Company has elected to offer Depositary Shares as described below under "Description of Depositary Shares;" and (viii) any additional voting, dividend, liquidation, redemption, sinking fund and other rights, preferences, privileges, limitations and restrictions. The Preferred Stock will, when issued, be fully paid and nonassessable and will have no preemptive rights. Unless otherwise stated in a Prospectus Supplement relating to a particular series of the Preferred Stock, each series of the Preferred Stock will rank on a parity as to dividends and distributions of assets with each other series of the Preferred Stock. The rights of the holders of each series of the Preferred Stock will be subordinate to those of the Company's general creditors. CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION Pursuant to the Certificate of Incorporation, the Company's Board of Directors is classified into three classes, such classes to include as nearly equal a number of directors as possible. Each class of directors serves for a term of three years, with one class being elected each year. As of the date of this Prospectus, there are eleven directors. The Certificate of Incorporation provides that (i) notwithstanding any increase or decrease in the authorized number of directors, each director then serving shall continue as a director until the expiration of his term, (ii) no director may be removed except for cause, and (iii) any vacancy in any class of directors, including a vacancy arising through an increase in the number of directors, shall be filled by a majority of the remaining directors of such class or by the sole remaining director of such class or, if none, by a majority of the remaining directors. Notwithstanding the foregoing, whenever the stockholders of any class of stock or series thereof are entitled to elect one or more directors of the Company by the provisions of the Certificate of Incorporation, including any Certificate of Designations, vacancies and newly created directorships of such class or series may be filled by a majority of the directors elected by such class or series thereof then in office, or by the sole remaining director so elected. The affirmative vote of stockholders representing at least 75 percent of the shares entitled to vote thereon is required to amend or repeal the provisions described in the preceding two sentences or the classification of the Company's Board of Directors into three classes. Certain of the foregoing provisions of the Certificate of Incorporation will likely make it more difficult for another entity to effect certain business combinations with the Company or to take control of the Board of Directors of the Company. In addition, the foregoing summary of certain provisions of the Certificate of Incorporation does not purport to be complete or to give effect to provisions of statutory or common law. The foregoing summary is subject to, and qualified in its entirety by reference to, the provisions of applicable law and the Certificate of Incorporation, a copy of which is incorporated by reference as an exhibit to the Registration Statement of which this Prospectus is a part. DIVIDEND RIGHTS Holders of the Preferred Stock of each series will be entitled to receive, when, as and if declared by the Board of Directors of the Company, out of funds of the Company legally available therefor, cash dividends on such dates and at such rates as are set forth in, or as are determined by the method described in, the Prospectus Supplement relating to such series of the Preferred Stock. Such rate may be fixed or variable or both. Each such dividend will be payable to the holders of record as they appear on the stock books of the Company (or, if applicable, the records of the Share Depositary (as hereinafter defined) referred to under "Description of Depositary Shares") on such record dates, fixed by the Board of Directors of the Company, as specified in the Prospectus Supplement relating to such series of Preferred Stock. 15 Such dividends may be cumulative or noncumulative, as provided in the Prospectus Supplement relating to such series of Preferred Stock. If the Board of Directors of the Company fails to declare a dividend payable on a dividend payment date on any series of Preferred Stock for which dividends are noncumulative, then the right to receive a dividend in respect of the dividend period ending on such dividend payment date will be lost, and the Company shall have no obligation to pay the dividend accrued for such period, whether or not dividends on such series are declared payable on any future dividend payment dates. Dividends on the shares of each series of Preferred Stock for which dividends are cumulative will accrue from the date on which the Company initially issues shares of such series. So long as the shares of any series of the Preferred Stock shall be outstanding, unless (i) full dividends (including if such Preferred Stock is cumulative, dividends for prior dividend periods) shall have been paid or declared and set apart for payment on all outstanding shares of the Preferred Stock of such series and all other classes and series of preferred stock of the Company (other than Junior Stock, as defined below) and (ii) the Company is not in default or in arrears with respect to the mandatory or optional redemption or mandatory repurchase or other mandatory retirement of, or with respect to any sinking or other analogous fund for, any shares of Preferred Stock of such series or any shares of any other preferred stock of the Company of any class or series (other than Junior Stock), the Company may not declare any dividends on any shares of Common Stock of the Company or any other stock of the Company ranking as to dividends or distributions of assets junior to such series of Preferred Stock (the Common Stock and any such other stock being herein referred to as "Junior Stock"), or make any payment on account of, or set apart money for, the purchase, redemption or other retirement of, or for a sinking or other analogous fund for, any shares of Junior Stock or make any distribution in respect thereof, whether in cash or property or in obligations or stock of the Company, other than Junior Stock which is neither convertible into, nor exchangeable or exercisable for, any securities of the Company other than Junior Stock and other than the redemption of Rights (as defined below) of the Company. LIQUIDATION PREFERENCE In the event of any liquidation, dissolution or winding up of the Company, voluntary or involuntary, the holders of each series of the Preferred Stock will be entitled to receive out of the assets of the Company available for distribution to stockholders, before any distribution of assets is made to the holders of Common Stock or any other shares of stock of the Company ranking junior as to such distribution to such series of the Preferred Stock, the amount set forth in the Prospectus Supplement relating to such series of the Preferred Stock. If, upon any voluntary or involuntary liquidation, dissolution or winding up of the Company, the amounts payable with respect to the Preferred Stock of any series and any other shares of preferred stock of the Company (including any other series of the Preferred Stock) ranking as to any such distribution on a parity with such series of the Preferred Stock are not paid in full, the holders of the Preferred Stock of such series and of such other shares of preferred stock of the Company will share ratably in any such distribution of assets of the Company in proportion to the full respective preferential amounts to which they are entitled. After payment to the holders of the Preferred Stock of each series of the full preferential amounts of the liquidating distribution to which they are entitled, the holders of each such series of the Preferred Stock will be entitled to no further participation in any distribution of assets by the Company. REDEMPTION A series of the Preferred Stock may be redeemable, in whole or from time to time in part, at the option of the Company, and may be subject to mandatory redemption pursuant to a sinking fund or otherwise, in each case upon terms, at the times and at the redemption prices set forth in the Prospectus Supplement relating to such series. Shares of the Preferred Stock redeemed by the Company will be restored to the status of authorized but unissued shares of preferred stock of the Company. In the event that fewer than all of the outstanding shares of a series of the Preferred Stock are to be redeemed, whether by mandatory or optional redemption, the number of shares to be redeemed will be 16 determined by lot or pro rata (subject to rounding to avoid fractional shares) as may be determined by the Company or by any other method as may be determined by the Company in its sole discretion to be equitable. From and after the redemption date (unless default shall be made by the Company in providing for the payment of the redemption price plus accumulated and unpaid dividends, if any), dividends shall cease to accumulate on the shares of the Preferred Stock called for redemption and all rights of the holders thereof (except the right to receive the redemption price plus accumulated and unpaid dividends, if any) shall cease. So long as any dividends on shares of any series of the Preferred Stock or any other series of preferred stock of the Company ranking on a parity as to dividends and distribution of assets with such series of the Preferred Stock are in arrears, no shares of any such series of the Preferred Stock or such other series of preferred stock of the Company will be redeemed (whether by mandatory or optional redemption) unless all such shares are simultaneously redeemed, and the Company will not purchase or otherwise acquire any such shares; provided, however, that the foregoing will not prevent the purchase or acquisition of such shares pursuant to a purchase or exchange offer made on the same terms to holders of all such shares outstanding. CONVERSION RIGHTS The terms, if any, on which shares of Preferred Stock of any series may be exchanged for or converted (mandatorily or otherwise) into shares of Common Stock or another series of Preferred Stock will be set forth in the Prospectus Supplement relating thereto. See "Description of Common Stock." VOTING RIGHTS Except as indicated below or in a Prospectus Supplement relating to a particular series of the Preferred Stock, or except as required by applicable law, the holders of the Preferred Stock will not be entitled to vote for any purpose. So long as any shares of the Preferred Stock of a series remain outstanding, the consent or the affirmative vote of the holders of at least 66 2/3% of the votes entitled to be cast with respect to the then outstanding shares of such series of the Preferred Stock together with any Other Preferred Stock (as defined below), voting as one class, either expressed in writing or at a meeting called for that purpose, will be necessary (i) to permit, effect or validate the authorization, or any increase in the authorized amount, of any class or series of shares of the Company ranking prior to the Preferred Stock of such series as to dividends, voting or upon distribution of assets and (ii) to repeal, amend or otherwise change any of the provisions applicable to the Preferred Stock of such series in any manner which adversely affects the powers, preferences, voting power or other rights or privileges of such series of the Preferred Stock. In case any series of the Preferred Stock would be so affected by any such action referred to in clause (ii) above in a different manner than one or more series of the Other Preferred Stock then outstanding, the holders of shares of the Preferred Stock of such series, together with any series of the Other Preferred Stock which will be similarly affected, will be entitled to vote as a class, and the Company will not take such action without the consent or affirmative vote, as above provided, of at least 66 2/3% of the total number of votes entitled to be cast with respect to each such series of the Preferred Stock and the Other Preferred Stock, then outstanding, in lieu of the consent or affirmative vote hereinabove otherwise required. With respect to any matter as to which the Preferred Stock of any series is entitled to vote, holders of the Preferred Stock of such series and any other series of preferred stock of the Company ranking on a parity with such series of the Preferred Stock as to dividends and distributions of assets and which by its terms provides for similar voting rights (the "Other Preferred Stock") will be entitled to cast the number of votes set forth in the Prospectus Supplement with respect to that series of Preferred Stock. As a result of the provisions described in the preceding paragraph requiring the holders of shares of a series of the Preferred Stock to vote together as a class with the holders of shares of one or more series of Other Preferred Stock, it is possible that the holders of such shares of Other Preferred Stock could approve action that would adversely affect such series of Preferred Stock, including the creation of a class of capital stock ranking prior to such series of Preferred Stock as to dividends, voting or distributions of assets. 17 As more fully described below under "Description of Depositary Shares," if the Company elects to issue Depositary Shares, each representing a fraction of a share of a series of the Preferred Stock, each such Depositary Share will, in effect, be entitled to such fraction of a vote per Depositary Share. TRANSFER AGENT AND REGISTRAR Unless otherwise indicated in a Prospectus Supplement relating thereto, Harris Trust Company of California will be the transfer agent, dividend and redemption price disbursement agent and registrar for shares of each series of the Preferred Stock. DESCRIPTION OF DEPOSITARY SHARES The description set forth below and in any Prospectus Supplement of the material general provisions of the Deposit Agreement (as defined below) and of the Depositary Shares and Depositary Receipts do not purport to be complete and are subject to and qualified in their entirety by reference to the Deposit Agreement and Depositary Receipts relating to each series of the Preferred Stock which will be filed with the Commission and incorporated by reference as an exhibit to the Registration Statement of which this Prospectus is a part at or prior to the time of the issuance of such series of the Preferred Stock. The forms of Deposit Agreement and Depositary Receipt are filed as exhibits to the Registration Statement of which this Prospectus is a part. Further material provisions of the Depositary Shares will be summarized in the Prospectus Supplement relating thereto. GENERAL The Company may, at its option, elect to offer fractional shares of Preferred Stock rather than full shares of Preferred Stock. In the event such option is exercised, the Company will issue to the public receipts for Depositary Shares, each of which will represent a fraction (to be set forth in the Prospectus Supplement relating to a particular series of the Preferred Stock) of a share of a particular series of the Preferred Stock as described below. The shares of any series of the Preferred Stock represented by Depositary Shares will be deposited under a separate deposit agreement (the "Deposit Agreement") among the Company, a bank or trust company selected by the Company (the "Share Depositary") and the holders from time to time of the Depositary Receipts. Subject to the terms of the Deposit Agreement, each owner of a Depositary Share will be entitled, in proportion to the applicable fraction of a share of Preferred Stock represented by such Depositary Share, to all the rights and preferences of the Preferred Stock represented thereby (including dividend, voting, redemption and liquidation rights). The Depositary Shares relating to any series of the Preferred Stock will be evidenced by Depositary Receipts issued pursuant to the related Deposit Agreement. Depositary Receipts will be distributed to those persons purchasing such Depositary Shares in accordance with the terms of the offering made by the related Prospectus Supplement. Upon surrender of Depositary Receipts at the office of the Share Depositary and upon payment of the charges provided in the Deposit Agreement and subject to the terms thereof, a holder of Depositary Receipts is entitled to have the Share Depositary deliver to such holder the whole shares of Preferred Stock underlying the Depositary Shares evidenced by the surrendered Depositary Receipts. DIVIDENDS AND OTHER DISTRIBUTIONS The Share Depositary will distribute all cash dividends or other cash distributions received in respect of the Preferred Stock to the record holders of Depositary Receipts relating to such Preferred Stock in proportion, insofar as practicable, to the respective numbers of Depositary Shares evidenced by such Depositary Receipts held by such holders on the relevant record date. The Depositary shall distribute only 18 such amount, however, as can be distributed without attributing to any holder of Depositary Receipts a fraction of one cent, and any balance not so distributed shall be added to and treated as part of the next sum received by the Depositary for distribution to record holders of Depositary Receipts then outstanding. In the event of a distribution other than in cash, the Share Depositary will distribute such amounts of the securities or property received by it as are, as nearly as practicable, in proportion to the respective numbers of Depositary Shares evidenced by the Depositary Receipts held by such holders on the relevant record date, unless the Share Depositary determines that it is not feasible to make such distribution, in which case the Share Depositary may, with the approval of the Company, adopt such method as it deems equitable and practicable for the purpose of effecting such distribution, including the sale of such securities or property. The Deposit Agreement will also contain provisions relating to the manner in which any subscription or similar rights offered by the Company to holders of the Preferred Stock shall be made available to holders of Depositary Receipts. The amount distributed in all of the foregoing cases will be reduced by any amounts required to be withheld by the Company or the Depositary on account of taxes and governmental charges. REDEMPTION OF DEPOSITARY SHARES If a series of the Preferred Stock represented by Depositary Shares is subject to redemption, the Depositary Shares will be redeemed from the proceeds received by the Share Depositary resulting from the redemption, in whole or in part, of such series of the Preferred Stock held by the Share Depositary. The Share Depositary shall mail notice of redemption not less than 30 and not more than 60 days prior to the date fixed for redemption to the record holders of the Depositary Receipts evidencing the Depositary Shares to be so redeemed at their respective addresses appearing in the Share Depositary's books. The redemption price per Depositary Share will be equal to the applicable fraction of the redemption price per share payable with respect to such series of the Preferred Stock plus all money and other property, if any, payable with respect to such Depositary Share, including all amounts payable by the Company in respect of any accumulated but unpaid dividends. Whenever the Company redeems shares of Preferred Stock held by the Share Depositary, the Share Depositary will redeem as of the same redemption date the number of Depositary Shares representing shares of Preferred Stock so redeemed. If less than all the Depositary Shares are to be redeemed, the Depositary Shares to be redeemed will be selected by lot or pro rata (subject to rounding to avoid fractions of Depositary Shares) as may be determined by the Depositary. After the date fixed for redemption, the Depositary Shares so called for redemption will no longer be deemed to be outstanding and all rights of the holders of Depositary Receipts evidencing such Depositary Shares will cease, except the right to receive the moneys payable upon such redemption and any money or other property to which such holders were entitled upon such redemption upon surrender to the Share Depositary of the Depositary Receipts evidencing such Depositary Shares. VOTING THE PREFERRED STOCK Upon receipt of notice of any meeting or action to be taken by written consent at or as to which the holders of the Preferred Stock are entitled to vote or consent, the Share Depositary will mail the information contained in such notice of meeting or action to the record holders of the Depositary Receipts evidencing the Depositary Shares relating to such Preferred Stock. Each record holder of such Depositary Receipts on the record date (which will be the same date as the record date for the Preferred Stock) will be entitled to instruct the Share Depositary as to the exercise of the voting rights or the giving or refusal of consent, as the case may be, pertaining to the number of shares of the Preferred Stock represented by the Depositary Shares evidenced by such holder's Depositary Receipts. The Share Depositary will endeavor, insofar as practicable, to vote, or give or withhold consent with respect to, the maximum number of whole shares of the Preferred Stock represented by all Depositary Shares as to which any particular voting or consent instructions are 19 received, and the Company will agree to take all action which may be deemed necessary by the Share Depositary in order to enable the Depositary to do so. The Share Depositary will abstain from voting, or giving consents with respect to, shares of the Preferred Stock to the extent it does not receive specific instructions from the holders of Depositary Receipts evidencing Depositary Shares representing such Preferred Stock. AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT The form of Depositary Receipt evidencing the Depositary Shares relating to any series of Preferred Stock and any provision of the related Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Share Depositary in any respect which they may deem necessary or desirable. However, any amendment which imposes or increases any fees, taxes or charges upon holders of Depositary Shares or Depositary Receipts relating to any series of Preferred Stock or which materially and adversely alters the existing rights of such holders will not be effective unless such amendment has been approved by the record holders of Depositary Receipts evidencing at least a majority of such Depositary Shares then outstanding. Notwithstanding the foregoing, no such amendment may impair the right of any holder of Depositary Shares or Depositary Receipts to receive any moneys or other property to which such holder may be entitled under the terms of such Depositary Receipts or the Deposit Agreement at the times and in the manner and amount provided for therein. A Deposit Agreement may be terminated by the Company or the Share Depositary only after (i) all outstanding Depositary Shares relating thereto have been redeemed and any accumulated and unpaid dividends on the Preferred Stock represented by the Depositary Shares, together with all other moneys and property, if any, to which holders of the related Depositary Receipts are entitled under the terms of such Depositary Receipts or the related Deposit Agreement, have been paid or distributed as provided in the Deposit Agreement or provision therefor has been duly made, (ii) there has been a final distribution in respect of the Preferred Stock of the relevant series in connection with any liquidation, dissolution or winding up of the Company and such distribution has been distributed to the holders of the related Depositary Receipts, or (iii) in the event the Depositary Shares relate to a series of Preferred Stock which is convertible into shares of Common Stock or another series of Preferred Stock, all outstanding Depositary Shares have been converted into shares of Common Stock or another series of Preferred Stock. MISCELLANEOUS The Share Depositary will forward to record holders of Depositary Receipts, at their respective addresses appearing in the Depositary's books, all reports and communications from the Company which are delivered to the Share Depositary and which the Company is required to furnish to the holders of the Preferred Stock or Depositary Receipts. The Company will pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements. The Company will pay charges of the Depositary in connection with the initial deposit of the Preferred Stock and the initial issuance of the Depositary Receipts evidencing the Depositary Shares, any redemption of the Preferred Stock and any withdrawals of Preferred Stock by the holders of Depositary Shares. Holders of Depositary Shares will pay other transfer and other taxes and governmental charges and such other charges as are expressly provided in the Deposit Agreement to be for their accounts. The Deposit Agreement will contain provisions relating to adjustments in the fraction of a share of Preferred Stock represented by a Depositary Share in the event of a change in par or stated value, split-up, combination or other reclassification of the Preferred Stock or upon any recapitalization, merger or sale of substantially all of the assets of the Company. Neither the Share Depositary nor any of its agents nor any registrar nor the Company will be (i) liable if it is prevented or delayed by law or any circumstance beyond its control in performing its obligations under the Deposit Agreement, (ii) subject to any liability under the Deposit Agreement to holders of Depositary 20 Receipts other than for the relevant party's gross negligence or willful misconduct, or (iii) obligated to prosecute or defend any legal proceeding in respect of any Depositary Receipts, Depositary Shares or the Preferred Stock unless satisfactory indemnity is furnished. They may rely upon written advice of counsel or accountants, or information provided by holders of Depositary Receipts or other persons in good faith believed to be competent and on documents reasonably believed to be genuine. RESIGNATION OR REMOVAL OF DEPOSITARY The Depositary may resign at any time by delivering to the Company notice of its election to do so, and the Company may at any time remove the Share Depositary, any such resignation or removal to take effect upon the appointment of a successor Share Depositary and its acceptance of such appointment. Such successor Depositary must be appointed within 60 days after delivery of the notice of resignation or removal. DESCRIPTION OF COMMON STOCK GENERAL The holders of the outstanding shares of Common Stock have full voting rights, one vote for each share held of record. Subject to the rights of holders of preferred stock of the Company, holders of Common Stock are entitled to receive such dividends as may be declared by the Board of Directors of the Company out of funds legally available therefor. Upon liquidation, dissolution, or winding up of the Company (but subject to the rights of holders of preferred stock of the Company), the assets legally available for distribution to holders of Common Stock shall be distributed ratably among such holders. Holders of Common Stock have no preemptive or other subscription or conversion rights, and no liability for further calls upon shares. The Common Stock is not subject to assessment. The Transfer Agent and Registrar for the Common Stock is Harris Trust Company of California. RIGHTS On June 24, 1986, the Board of Directors of the Company adopted a Rights Plan pursuant to which the Company distributed one right (a "Right") for each outstanding share of Common Stock held as of the close of business on July 14, 1986. As a result of the five for two stock dividend paid on May 28, 1987 to holders of record of the Common Stock on May 14, 1987, effective May 28, 1987 each Right was proportionally adjusted so that each share of Common Stock is accompanied by two-fifths of a Right instead of one full Right. Only full Rights will be exercisable if the Rights become exercisable. In addition, the Rights Plan was amended by amendments dated as of February 19, 1988 and June 27, 1995. Each full Right, if it becomes exercisable, initially entitles the holder to purchase from the Company a unit of one one-hundredth of a share of Series A Junior Participating Preferred Stock, par value $1.00 per share, at a purchase price of $175 per unit, subject to adjustment. The Rights attach to shares of Common Stock issued after July 14, 1986, and will expire on July 14, 1996 unless redeemed earlier. The Rights may not be exercised, and will not detach or trade separately from the Common Stock, except as described below. The Rights will detach from the Common Stock and may be exercised only if a person or group becomes the beneficial owner of 15% or more of the Common Stock (a "Stock Acquisition"). If a Stock Acquisition occurs (except pursuant to an offer for all outstanding shares of the Common Stock which the Company's independent directors determine is fair to and otherwise in the best interests of the Company and its stockholders), the Rights "flip-in" and each Right not owned by such person will entitle the holder to purchase, at the Right's then current exercise price, Common Stock (or, if the number of shares of authorized Common Stock is insufficient to permit the full exercise of the Rights, cash, property or other securities of the Company) having a formula value equal to twice the Right's exercise price. In addition, if at any time following a Stock Acquisition, (i) the Company is acquired in a merger or other business combination transaction in which the Company is not the surviving corporation (other than a merger which follows an 21 offer at the same price and for the same consideration as the offer approved by the Board of Directors of the Company as described in the immediately preceding sentence), or (ii) 50% or more of the Company's assets or earnings power is sold or transferred, the Rights "flip-over" and each unexercised Right will entitle its holder to purchase, at the Right's then current exercise price, common shares of the other person having a formula value equal to twice the Right's exercise price. The Rights may be redeemed by the Company at any time prior to ten days following the date of a Stock Acquisition (which period may be extended by the Company's Board of Directors at any time while the Rights are still redeemable). Upon the occurrence of a "flip-in" or "flip-over" event, if the Rights are not redeemed, the Rights would result in substantial dilution to any person who has acquired 15% or more of the outstanding Common Stock or who attempts to merge or consolidate with the Company. As a result, the Rights may deter potential attempts to acquire control of the Company without the approval of the Company's Board of Directors. On June 27, 1995, the Board of Directors of the Company also declared a dividend distribution of one Right (each a "New Right") for each outstanding share of Common Stock to stockholders of record at the close of business on the earlier of the date on which the current Rights Plan expires or the date on which the existing Rights are redeemed in accordance with the provisions of the current Rights Plan. Each New Right is identical to the existing Rights, except that the New Rights will initially entitle the holder to purchase from the Company a unit of one one-hundredth of a share of Series A Junior Participating Preferred Stock, par value $1.00 per share, at a purchase price of $80.00 per unit, subject to adjustment, and the New Rights will expire on July 14, 2006. DESCRIPTION OF PREFERRED SECURITIES Set forth below is a summary of information concerning the Preferred Securities which may be issued by the Trust. The Declaration authorizes the Regular Trustees of the Trust to issue on behalf of the Trust one series of Preferred Securities having the terms described in the Prospectus Supplement relating thereto. The Declaration will be qualified as an indenture under the Trust Indenture Act. The terms of the Preferred Securities will be those set forth in the Declaration and those made part of the Declaration by the Trust Indenture Act. This summary of the material general provisions of the Preferred Securities does not purport to be complete and is subject in all respects to the provisions of, and is qualified in its entirety by reference to, the form of Declaration, as amended and restated, which is filed as an exhibit to the Registration Statement of which this Prospectus is a part, and the Trust Indenture Act. Further material provisions of the Preferred Securities will be summarized in the Prospectus Supplement relating thereto. The Preferred Securities will have such terms, including distribution, redemption, voting, liquidation and such other preferred, deferred or other special rights or such restrictions as shall be set forth in the Declaration or made part of the Declaration by the Trust Indenture Act. Reference is made to the Prospectus Supplement relating to the Preferred Securities for specific terms, including (i) the distinctive designation of the Preferred Securities, (ii) the number of Preferred Securities and the date or dates upon which such distributions shall be payable (provided, however, that distributions on the Preferred Securities shall be payable on a quarterly basis to holders of the Preferred Securities as of a record date in each quarter during which the Preferred Securities are outstanding), (iii) the annual distribution rate (or method for determining such rate) for the Preferred Securities, (iv) whether distributions on Preferred Securities issued by the Trust shall be cumulative, and, in the case of Preferred Securities having such cumulative distribution rights, the date or dates or method of determining the date or dates from which distributions on Preferred Securities shall be cumulative, (v) the amount or amounts which shall be paid out of the assets of the Trust to the holders of Preferred Securities upon voluntary or involuntary liquidation, dissolution, winding-up or termination of the Trust, (vi) the obligation, if any, of the Trust to purchase or redeem Preferred Securities and the price or prices at which, the period or periods within which and the terms and conditions upon which the Preferred Securities shall be purchased or redeemed, in whole or in part, pursuant to such obligation, (vii) the voting rights, if any, of Preferred Securities in addition to those required by law, including the number of votes per Preferred Security and any requirement for the approval by the holders of Preferred 22 Securities, as a condition to specified action or amendments to the Declaration, and (viii) any other relevant rights, preferences, privileges, limitations or restrictions on Preferred Securities consistent with the Declaration and applicable law. All Preferred Securities offered hereby will be guaranteed by the Company to the extent set forth below under "Description of Guarantee." Certain United States federal income tax considerations applicable to any offering of Preferred Securities will be described in the Prospectus Supplement relating thereto. In connection with the issuance of Preferred Securities, the Trust will issue one series of Common Securities having such terms including distribution, redemption, voting, liquidation and such other preferred, deferred or other special rights or such restrictions as shall be set forth therein. The terms of the Common Securities will be substantially identical to the terms of the Preferred Securities and the Common Securities will rank pari passu, and payments will be made thereon pro rata with the Preferred Securities except that, upon an event of default under the Declaration, the rights of the holders of the Common Securities to payment in respect of distributions and payments upon liquidation, redemption and otherwise will be subordinated to the rights of the holders of the Preferred Securities. Except in certain limited circumstances, the Common Securities will also carry the right to vote and to appoint, remove or replace any of the Trustees of the Trust. All of the Common Securities will be directly or indirectly owned by the Company. DESCRIPTION OF GUARANTEE Set forth below is a summary of information concerning the Guarantee that will be executed and delivered by the Company for the benefit of the holders of Preferred Securities. The Guarantee will be qualified as an indenture under the Trust Indenture Act. The First National Bank of Chicago will act as indenture trustee under the Guarantee (the "Guarantee Trustee"). The terms of the Guarantee will be those set forth in the Guarantee and those made part of the Guarantee by the Trust Indenture Act. This summary of the material general provisions of the Guarantee does not purport to be complete and is subject in all respects to the provisions of, and is qualified in its entirety by reference to, the form of Guarantee, which is filed as an exhibit to the Registration Statement of which this Prospectus forms a part, and the Trust Indenture Act. The Guarantee will be held by the Guarantee Trustee for the benefit of the holders of the Preferred Securities. Further material provisions of the Guarantee will be summarized in the Prospectus Supplement relating thereto. GENERAL Pursuant to the Guarantee, the Company will irrevocably and unconditionally agree, to the extent set forth therein, to pay in full to the holders of the Preferred Securities, the Guarantee Payments (as defined herein) (except to the extent paid by the Trust), as and when due, regardless of any defense, right of set-off or counterclaim that the Trust may have or assert. The following amounts with respect to the Preferred Securities (the "Guarantee Payments"), to the extent not paid by the Trust, will be subject to the Guarantee (without duplication): (i) any accrued and unpaid distributions that are required to be paid on the Preferred Securities, to the extent the Trust shall have funds available therefor, which funds would exist only to the extent the Company has made a payment of interest or principal on the Subordinated Debt Securities, (ii) the redemption price, including all accrued and unpaid distributions (the "Redemption Price"), to the extent the Trust has funds available therefor with respect to any Preferred Securities called for redemption by the Trust, which funds would exist only to the extent the Company has paid the redemption price for the Subordinated Debt Securities called for redemption and (iii) upon a voluntary or involuntary liquidation, dissolution, winding-up or termination of the Trust (other than in connection with the distribution of Subordinated Debt Securities of the Company to the holders of Preferred Securities or the redemption of all the Preferred Securities upon maturity or redemption of the Subordinated Debt Securities), the lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid distributions on the Preferred Securities to the date of payment to the extent the Trust has funds available therefor or (b) the amount of assets of the Trust remaining 23 available for distribution to holders of the Preferred Securities in liquidation of the Trust. The Company's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Company to the holders of Preferred Securities or by causing the Trust to pay such amounts to such holders. The Guarantee will be a guarantee on a subordinated basis with respect to the Preferred Securities from the time of issuance, but will not apply to any payment of distributions except to the extent the Trust shall have funds available therefor. If the Company does not make interest payments on the Subordinated Debt Securities purchased by the Trust, the Trust will not pay distributions on the Preferred Securities and will not have funds available therefor. See "Description of Debt Securities--Particular Terms of the Subordinated Debt Securities Issued to the Trust." The obligations of the Company under the Declaration, the Guarantee, the Subordinated Indenture and the Subordinated Debt Securities will collectively provide a full and unconditional guarantee on a subordinated basis by the Company of payments due on the Preferred Securities. The Company has also agreed to irrevocably and unconditionally guarantee the obligations of the Trust with respect to the Common Securities (the "Common Securities guarantee") to the same extent as the Guarantee, except that, upon an Event of Default under the Subordinated Indenture, holders of Preferred Securities under the Guarantee shall have priority over holders of Common Securities under the Common Securities guarantee with respect to distributions and payments on liquidation, redemption or otherwise. CERTAIN COVENANTS OF THE COMPANY In the Guarantee, the Company will covenant that, so long as any Preferred Securities issued by the Trust remain outstanding, if there shall have occurred any event that would constitute an event of default under the Guarantee or the Declaration, then (a) the Company shall not, and shall cause any subsidiary of the Company which is not a wholly-owned subsidiary of the Company not to, declare or pay any dividend on, or make any distribution with respect to, or redeem, purchase or acquire or make a liquidation payment with respect to, any of its capital stock or the capital stock of any such subsidiary and (b) the Company shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities (including guarantees) issued by the Company which rank pari passu with or junior to such Subordinated Debt Securities. However, the restriction in (a) above will not apply to any stock dividend paid by the Company, or any of its subsidiaries, where the dividend stock is the same stock as that on which the dividend is being paid. MODIFICATIONS OF THE GUARANTEE; ASSIGNMENT Except with respect to any changes that do not adversely affect the rights of holders of the Preferred Securities (in which case no vote will be required), the Guarantee may be amended only with the prior approval of the holders of not less than 66 2/3% in liquidation amount of the Preferred Securities then outstanding. All guarantees and agreements contained in a Guarantee shall bind the successors, assigns, receivers, trustees and representatives of the Company and shall inure to the benefit of the holders of the Preferred Securities then outstanding. EVENTS OF DEFAULT An Event of Default under the Guarantee will occur upon the failure of the Company to make any of the payments required by the Guarantee or to perform its other obligations thereunder. The holders of a majority in liquidation amount of the Preferred Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee in respect of the Guarantee or to direct the exercise of any trust or power conferred upon the Guarantee Trustee under the Guarantee. Any holder of Preferred Securities may institute a legal proceeding directly against the Company to enforce its rights under the Guarantee, without first instituting a legal proceeding against the Trust, the Guarantee Trustee or any other person. 24 The Company will be required to provide annually to the Guarantee Trustee a statement as to the performance by the Company of certain of its obligations under the Guarantee and as to any default in such performance. INFORMATION CONCERNING THE GUARANTEE TRUSTEE The Guarantee Trustee, prior to the occurrence of a default, undertakes to perform only such duties as are specifically set forth in the Guarantee and, after default with respect to the Guarantee, shall exercise the same degree of care a prudent person would exercise under the circumstances in the conduct of his or her own affairs. Subject to such provision, the Guarantee Trustee is under no obligation to exercise any of the powers vested in it by the Guarantee at the request of any holder of the Preferred Securities unless it is offered reasonable indemnity against the costs, expenses and liabilities that might be incurred thereby. TERMINATION OF THE GUARANTEE The Guarantee will terminate as to the Preferred Securities upon full payment of the Redemption Price of all Preferred Securities, upon distribution of the Subordinated Debt Securities of the Company held by the Trust to the holders of the Preferred Securities or upon full payment of the amounts payable in accordance with the Declaration upon liquidation of the Trust. The Guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any holder of Preferred Securities must restore payment of any sums paid under the Preferred Securities or the Guarantee. STATUS OF THE GUARANTEE The Guarantee will constitute an unsecured obligation of the Company and will rank (i) subordinate and junior in right of payment to all other liabilities of the Company (other than the Common Securities guarantee or any guarantee now or hereafter entered into by the Company in respect of any preferred or preference stock of any affiliate of the Company), (ii) pari passu with the most senior preferred or preference stock now or hereafter issued by the Company and with any guarantee now or hereafter entered into by the Company in respect of any preferred or preference stock of any affiliate of the Company and (iii) senior to the Company's Common Stock. The terms of the Preferred Securities provide that each holder of Preferred Securities by acceptance thereof agrees to the subordination provisions and other terms of the Guarantee. The Guarantee will constitute a guarantee of payment and not of collection (that is, the guaranteed party may institute a legal proceeding directly against the Company as the guarantor to enforce its rights under the Guarantee without instituting a legal proceeding against any other person or entity). GOVERNING LAW The Guarantee will be governed by and construed in accordance with the internal laws of the State of New York. DESCRIPTION OF SECURITIES WARRANTS The Company may issue Securities Warrants for the purchase of Debt Securities, Preferred Stock, Depositary Shares or Common Stock. Securities Warrants may be issued independently or together with Debt Securities, Preferred Stock, Depositary Shares or Common Stock offered by any Prospectus Supplement and may be attached to or separate from such Debt Securities, Preferred Stock, Depositary Shares or Common Stock. Each series of Securities Warrants will be issued under a separate warrant agreement (a "Securities Warrant Agreement") to be entered into between the Company and a bank or trust company, as Securities Warrant agent, all as set forth in the Prospectus Supplement relating to the particular issue of offered Securities Warrants. The Securities Warrant agent will act solely as an agent of the Company in connection with the Securities Warrant certificates relating to the Securities Warrants and will not assume any obligation or relationship of agency or trust for or with any holders of Securities Warrant certificates or beneficial owners 25 of Securities Warrants. The following summaries of the material general provisions of the Securities Warrant Agreements and Securities Warrants do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all the provisions of the Securities Warrant Agreement and the Securities Warrant certificates relating to each series of Security Warrants which will be filed with the Commission and incorporated by reference as an exhibit to the Registration Statement of which this Prospectus is a part at or prior to the time of the issuance of such series of Securities Warrants. Further material provisions of the Securities Warrants will be summarized in the Prospectus Supplement relating thereto. GENERAL If Securities Warrants are offered, the applicable Prospectus Supplement will describe the terms of such Securities Warrants, including, in the case of Securities Warrants for the purchase of Debt Securities, the following where applicable: (i) the offering price; (ii) the denominations and terms of the series of Debt Securities purchasable upon exercise of such Securities Warrants and whether such Debt Securities are Senior Debt Securities or Subordinated Debt Securities; (iii) the designation and terms of any series of Debt Securities with which such Securities Warrants are being offered and the number of such Securities Warrants being offered with each such Debt Security; (iv) the date, if any, on and after which such Securities Warrants and the related series of Debt Securities will be transferable separately; (v) the principal amount of the series of Debt Securities purchasable upon exercise of each such Securities Warrant and the price at which such principal amount of Debt Securities of such series may be purchased upon such exercise; (vi) the date on which the right to exercise such Securities Warrants shall commence and the date (the "Expiration Date") on which such right shall expire; (vii) whether the Securities Warrants will be issued in registered or bearer form; (viii) any special United States Federal income tax consequences; (ix) the terms, if any, on which the Company may accelerate the date by which the Securities Warrants must be exercised; and (x) any other terms of such Securities Warrants. In the case of Securities Warrants for the purchase of Preferred Stock, Depositary Shares or Common Stock, the applicable Prospectus Supplement will describe the terms of such Securities Warrants, including the following where applicable: (i) the offering price; (ii) the aggregate number of shares purchasable upon exercise of such Securities Warrants, the exercise price, and in the case of Securities Warrants for Preferred Stock or Depositary Shares, the designation, aggregate number and terms of the series of Preferred Stock purchasable upon exercise of such Securities Warrants or underlying the Depositary Shares purchasable upon exercise of such Securities Warrants; (iii) the designation and terms of the series of Preferred Stock or Depositary Shares with which such Securities Warrants are being offered and the number of such Securities Warrants being offered with each such shares of Preferred Stock or Depositary Share; (iv) the date, if any, on and after which such Securities Warrants and the Common Stock or related series of Preferred Stock or Depositary Shares will be transferable separately; (v) the date on which the right to exercise such Securities Warrants shall commence and the Expiration Date; (vi) any special United States Federal income tax consequences; and (vii) any other terms of such Securities Warrants. Securities Warrants for the purchase of Preferred Stock, Depositary Shares or Common Stock will be offered and exercisable for United States dollars only and will be in registered form only. Securities Warrant certificates may be exchanged for new Securities Warrant certificates of different denominations, may (if in registered form) be presented for registration of transfer, and may be exercised at the corporate trust office of the Securities Warrant agent or any other office indicated in the applicable Prospectus Supplement. Prior to the exercise of any Securities Warrant to purchase Debt Securities, holders of such Securities Warrants will not have any of the rights of Holders of the Debt Securities purchasable upon such exercise, including the right to receive payments of principal of, premium, if any, or interest, if any, on such Debt Securities or to enforce covenants in the applicable indenture. Prior to the exercise of any Securities Warrants to purchase Preferred Stock, Depositary Shares or Common Stock, holders of such Securities Warrants will not have any rights of holders of such Preferred Stock, Depositary Shares or Common Stock, including the right to receive payments of dividends, if any, on such Preferred Stock or Common Stock, or to exercise any applicable right to vote. 26 CERTAIN RISK CONSIDERATIONS Any Securities Warrants issued by the Company will involve a certain degree of risk, including risks arising from fluctuations in the price of the underlying securities and general risks applicable to the stock market (or markets) on which the underlying securities are traded. Prospective purchasers of the Securities Warrants should recognize that the Securities Warrants may expire worthless and, thus, purchasers should be prepared to sustain a total loss of the purchase price of their Securities Warrants. This risk reflects the nature of a Securities Warrant as an asset which, other factors held constant, tends to decline in value over time and which may, depending on the price of the underlying securities, become worthless when it expires. The trading price of a Securities Warrant at any time is expected to increase if the price or, if applicable, dividend rate on the underlying securities, increases. Conversely, the trading price of a Securities Warrant is expected to decrease as the time remaining to expiration of the Securities Warrant decreases and as the price or, if applicable, dividend rate on the underlying securities, decreases. Assuming all other factors are held constant, the more a Securities Warrant is "out-of-the-money" (i.e., the more the exercise price exceeds the price of the underlying securities and the shorter its remaining term to expiration), the greater the risk that a purchaser of the Securities Warrant will lose all or part of his or her investment. If the price of the underlying securities does not rise before the Securities Warrant expires to an extent sufficient to cover a purchaser's cost of the Securities Warrant, the purchaser will lose all or part of his or her investment in such Securities Warrant upon expiration. In addition, prospective purchasers of the Securities Warrants should be experienced with respect to options and option transactions and understand the risks associated with options and should reach an investment decision only after careful consideration, with their financial advisers, of the suitability of the Securities Warrants in light of their particular financial circumstances and the information discussed herein and, if applicable, the Prospectus Supplement. Before purchasing, exercising or selling any Securities Warrants, prospective purchasers and holders of Securities Warrants should carefully consider, among other things, (i) the trading price of the Securities Warrants, (ii) the price of the underlying securities at such time, (iii) the time remaining to expiration and (iv) any related transaction costs. Some of the factors referred to above are in turn influenced by various political, economic and other factors that can affect the trading price of the underlying securities and should be carefully considered prior to making any investment decisions. Purchasers of the Securities Warrants should further consider that the initial offering price of the Securities Warrants may be in excess of the price that a purchaser of options might pay for a comparable option in a private, less liquid transaction. In addition, it is not possible to predict the price at which the Securities Warrants will trade in the secondary market or whether any such market will be liquid. The Company may, but is not obligated to, file an application to list any Securities Warrants issued on a United States national securities exchange. To the extent that any Securities Warrants are exercised, the number of Securities Warrants outstanding will decrease, which may result in a lessening of the liquidity of the Securities Warrants. Finally, the Securities Warrants will constitute direct, unconditional and unsecured obligations of the Company and as such will be subject to any changes in the perceived creditworthiness of the Company. EXERCISE OF SECURITIES WARRANTS Each Securities Warrant will entitle the holder thereof to purchase such principal amount of Debt Securities or number of shares of Preferred Stock, Depositary Shares or Common Stock, as the case may be, at such exercise price as shall in each case be set forth in, or calculable from, the Prospectus Supplement relating to the offered Securities Warrants. After the close of business on the Expiration Date (or such later date to which such Expiration Date may be extended by the Company), unexercised Securities Warrants will become void. Securities Warrants may be exercised by delivering to the Securities Warrant agent payment as provided in the applicable Prospectus Supplement of the amount required to purchase the Debt Securities, Preferred Stock, Depositary Shares or Common Stock, as the case may be, purchasable upon such exercise together 27 with certain information set forth on the reverse side of the Securities Warrant certificate. Securities Warrants will be deemed to have been exercised upon receipt of payment of the exercise price, subject to the receipt within five (5) business days, of the Securities Warrants certificate evidencing such Securities Warrants. Upon receipt of such payment and the Securities Warrant certificate properly completed and duly executed at the corporate trust office of the Securities Warrant agent or any other office indicated in the applicable Prospectus Supplement, the Company will, as soon as practicable, issue and deliver the Debt Securities, Preferred Stock, Depositary Shares or Common Stock, as the case may be, purchasable upon such exercise. If fewer than all of the Securities Warrants represented by such Securities Warrant certificate are exercised, a new Securities Warrant certificate will be issued for the remaining amount of Securities Warrants. AMENDMENTS AND SUPPLEMENTS TO SECURITIES WARRANT AGREEMENTS The Securities Warrant Agreements may be amended or supplemented without the consent of the holders of the Securities Warrants issued thereunder to effect changes that are not inconsistent with the provisions of the Securities Warrants and that do not adversely affect the interests of the holders of the Securities Warrants. COMMON STOCK WARRANT ADJUSTMENTS Unless otherwise indicated in the applicable Prospectus Supplement, the exercise price of, and the number of shares of Common Stock covered by, a Common Stock Warrant are subject to adjustment in certain events, including (i) payment of a dividend on the Common Stock payable in capital stock and stock splits, combinations or reclassifications of the Common Stock, (ii) issuance to all holders of Common Stock of rights or warrants to subscribe for or purchase shares of Common Stock at less than their current market price (as defined in the Securities Warrant Agreement for such series of Common Stock Warrants), and (iii) certain distributions of evidences of indebtedness or assets (including securities but excluding cash dividends or distributions paid out of consolidated earnings or retained earnings or dividends payable in Common Stock) or of subscription rights and warrants (excluding those referred to above). If after the distribution date fixed for purposes of distributing to holders of Common Stock any Rights, exercising holders of any Common Stock Warrant are not entitled to receive Rights that would otherwise be attributable (but for the date of exercise) to the shares of Common Stock received upon such exercise, then adjustment of the exercise price will be made under clause (iii) of this paragraph as if the Rights were then being distributed to holders of Common Stock. If such an adjustment is made and the Rights are later redeemed, invalidated or terminated, then a corresponding reversing adjustment will be made to the number of shares of Common Stock issuable upon the exercise of such Common Stock Warrant, on an equitable basis, to take account of such event. However, the Company may elect to make provision with respect to Rights so that each share of Common Stock issuable upon exercise of such Common Stock Warrant whether or not issued after the distribution date for such Rights, will be accompanied by the Rights that would otherwise be attributable (but for the date of exercise) to such shares of Common Stock, in which event the preceding two sentences will not apply. No adjustment in the exercise price of, and the number of shares of Common Stock covered by, a Common Stock Warrant will be made for regular quarterly or other periodic or recurring cash dividends or distributions or for cash dividends or distributions to the extent paid from consolidated earnings or retained earnings. No adjustment will be required unless such adjustment would require a change of at least 1% in the exercise price then in effect. Except as stated above, the exercise price of, and the number of shares of Common Stock covered by, a Common Stock Warrant will not be adjusted for the issuance of Common Stock or any securities convertible into or exchangeable for Common Stock, or carrying the right or option to purchase or otherwise acquire the foregoing, in exchange for cash, other property or services. In the event of any (i) consolidation or merger of the Company with or into any entity (other than a consolidation or a merger that does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock), (ii) sale, transfer, lease or conveyance of all or substantially all of the assets of the Company or (iii) reclassification, capital reorganization or change of the Common Stock (other 28 than solely a change in par value or from par value to no par value), then any holder of a Common Stock Warrant will be entitled, on or after the occurrence of any such event, to receive on exercise of such Common Stock Warrant the kind and amount of shares of stock or other securities, cash or other property (or any combination thereof) that the holder would have received had such holder exercised such holder's Common Stock Warrant immediately prior to the occurrence of such event. If the consideration to be received upon exercise of the Common Stock Warrant following any such event consists of common stock of the surviving entity, then from and after the occurrence of such event, the exercise price of such Common Stock Warrant will be subject to the same anti- dilution and other adjustments described in the second preceding paragraph, applied as if such common stock were Common Stock. PLAN OF DISTRIBUTION The Company and/or the Trust may sell the Securities to one or more underwriters for public offering and sale by them or may sell the Securities to investors directly or through agents. Any such underwriter or agent involved in the offer and sale of Securities will be named in the applicable Prospectus Supplement. Each of the Company and the Trust has reserved the right to sell Securities directly to investors on its own behalf in those jurisdictions where and in such manner as it is authorized to do so. Underwriters may offer and sell Securities at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. Each of the Company and the Trust also may, from time to time, authorize dealers, acting as agents of the Company and/or the Trust, to offer and sell Securities upon the terms and conditions as are set forth in the applicable Prospectus Supplement. In connection with the sale of Securities, underwriters may receive compensation from the Company or the Trust in the form of underwriting discounts or commissions and may also receive commissions from purchasers of the Securities for whom they may act as agent. Underwriters may sell Securities to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agent. Any underwriting compensation paid by the Company or the Trust to underwriters or agents in connection with the offering of Securities, and any discounts, concessions or commissions allowed by underwriters to participating dealers, will be set forth in the applicable Prospectus Supplement. Dealers and agents participating in the distribution of Securities may be deemed to be underwriters, and any discounts and commissions received by them and any profit realized by them on resale of the Securities may be deemed to be underwriting discounts and commissions. Underwriters, dealers and agents may be entitled, under agreements entered into with the Company or the Trust, to indemnification against and contribution toward certain civil liabilities. EXPERTS The consolidated financial statements incorporated in this Prospectus by reference to the Annual Report on Form 10-K of the Company for the year ended December 31, 1994, have been so incorporated in reliance on the report of Price Waterhouse LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting. 29 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY IN- FORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPO- RATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY AGENT, DEALER OR UNDERWRITER. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUN- DER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE 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 UN- LAWFUL TO MAKE SUCH OFFER OR SOLICITATION. ---------------- TABLE OF CONTENTS
PAGE ---- PROSPECTUS Available Information...................................................... 2 Incorporation of Certain Documents by Reference............................ 2 The Company................................................................ 4 The Trust.................................................................. 4 Use of Proceeds............................................................ 5 Selected Financial Data.................................................... 6 Ratio of Earnings to Fixed Charges......................................... 7 Description of Debt Securities............................................. 7 Description of Preferred Stock............................................. 13 Description of Depositary Shares........................................... 18 Description of Common Stock................................................ 21 Description of Preferred Securities........................................ 22 Description of Guarantee................................................... 23 Description of Securities Warrants......................................... 25 Plan of Distribution....................................................... 29 Experts.................................................................... 29
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- $750,000,000 [LOGO OF GREAT WESTERN FINANCIAL CORPORATION] SECURITIES ---------------- PROSPECTUS ---------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. Registration fee................................................... $ 77,586 Rating agency fees................................................. 75,000 Printing and engraving expenses.................................... 150,000 Accounting fees and expenses....................................... 100,000 Legal fees and expenses............................................ 200,000 Blue sky fees and expenses......................................... 30,000 Fees and expenses of Transfer Agent or Trustee..................... 30,000 Miscellaneous...................................................... 12,414 -------- Total............................................................ $675,000 ========
- -------- * Expenses are estimated except for the registration fee. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Article TWELFTH of the Restated Certificate of Incorporation of the Company eliminates, to the fullest extent permitted by Delaware law, director liability for monetary damages for breaches of the directors' fiduciary duty of care. The Company's Bylaws as well as certain employment agreements and other indemnity agreements also provide that the Company shall indemnify directors and officers under certain circumstances for liabilities and expenses incurred by reason of their actions as agents of the Company. In addition, the Company maintains no insurance policy that indemnifies directors and officers against certain liabilities. ITEM 16. EXHIBITS.
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT ------- ---------------------- 4.1 Restated Certificate of Incorporation of the Company (included as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1992 and incorporated herein by reference). 4.2 Rights Agreement, dated as of June 24, 1986 (filed as an exhibit to the Company's Current Report on Form 8-K, dated July 3, 1986, and incorporated herein by reference). 4.3 First Amendment to Rights Agreement, dated as of February 19, 1988 (filed as an exhibit to the Company's Current Report on Form 8-K, dated February 24, 1988, and incorporated herein by reference). 4.4 Second Amendment to Rights Agreement, dated as of June 27, 1995 (filed as an exhibit to the Company's Current Report on Form 8-K dated June 30, 1995 and incorporated herein by reference). 4.5 New Rights Agreement, dated as of June 27, 1995, between the Company and First Chicago Trust Company of New York (filed as an exhibit to the Company's Current Report on Form 8-K dated June 30, 1995 and incorporated herein by reference). 4.6 Form of Deposit Agreement (filed as an exhibit to Registration Statement No. 33-60206 and incorporated herein by reference).
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EXHIBIT NUMBER DESCRIPTION OF EXHIBIT ------- ---------------------- 4.7 Form of Depositary Receipt (attached as Exhibit A to Deposit Agreement included as Exhibit 4.6 hereto). 4.8 Indenture, dated as of September 12, 1990, between the Company and First Interstate Bank, Ltd., relating to the Senior Debt Securities (included as an exhibit to Registration Statement No. 33-34322 and incorporated herein by reference). 4.9 First Supplemental Indenture, dated as of April 30, 1993, to Indenture dated as of September 12, 1990, among the Company, First Interstate Bank, Ltd. and Citibank, N.A. (filed as an exhibit to Registration Statement No. 33-60206 and incorporated herein by reference). 4.10 Indenture, dated as of September 12, 1990, between the Company and Harris Trust and Savings Bank, relating to the Subordinated Debt Securities (included as an exhibit to Registration Statement No. 33- 34322 and incorporated herein by reference). 4.11 First Supplemental Indenture, dated as of April 30, 1993, to Indenture dated as of September 12, 1990, between the Company and Harris Trust and Savings Bank (filed as an exhibit to Registration Statement No. 33-60206 and incorporated herein by reference). 4.12 Form of Second Supplemental Indenture to Indenture dated as of September 12, 1990, as amended, between the Company and Harris Trust and Savings Bank. *4.13 Declaration of Trust of Great Western Financial Trust I. 4.14 Form of Amended and Restated Declaration of Trust of Great Western Financial Trust I. 4.15 Form of Preferred Security (attached as Annex 1 to Exhibit A to the Form of Amended and Restated Declaration of Trust included as Exhibit 4.14 hereto). 4.16 Form of Guarantee Agreement with respect to Preferred Securities. *4.17 Form of Certificate of Designations with respect to a series of Preferred Stock. *5.1 Opinion of O'Melveny & Myers as to the validity of the Securities other than the Preferred Securities. *5.2 Opinion of Skadden, Arps, Slate, Meagher & Flom as to the validity of the Preferred Securities. 12 Computation of Ratio of Earnings to Fixed Charges (included as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1994 and the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995, June 30, 1995 and September 30, 1995 and incorporated herein by reference). 23.1 Consent of Price Waterhouse LLP *23.2 Consent of O'Melveny & Myers (included in Exhibit 5.1). *23.3 Consent of Skadden, Arps, Slate, Meagher & Flom (included in Exhibit 5.2). *24 Power of Attorney. **25.1 Form T-1 Statement of Eligibility of Citibank, N.A. with respect to the Senior Indenture. *25.2 Form T-1 Statement of Eligibility of Harris Trust and Savings Bank with respect to the Subordinated Indenture. *25.3 Form T-1 Statement of Eligibility of The First National Bank of Chicago with respect to the Amended and Restated Declaration of Trust of Great Western Financial Trust I. *25.4 Form T-1 Statement of Eligibility of The First National Bank of Chicago with respect to the Guarantee. 99.1 Form of Prospectus Supplement for an offering of Preferred Securities.
- -------- *Previously filed. **To be filed by amendment or pursuant to a Form 8-K. II-2 ITEM 17. UNDERTAKINGS. Each of the undersigned Registrants hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to the Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the Prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement (notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) promulgated under the Securities Act of 1933 if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement); (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; ; provided, however, that paragraph (1)(i) and (1)(ii) above shall not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the Company's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of each of the Registrants pursuant to the provisions described in Item 15 above, or otherwise, each of the Registrants 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 a Registrant of expenses incurred or paid by a director, officer or controlling person of the 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 of the Registrants will, unless in the opinion of its counsel the matter has been settled by 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 Company hereby undertakes to file an application for the purpose of determining the eligibility of the trustee under the Senior Indenture to act under subsection (a) of Section 310 of the Trustee Indenture Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Trust Indenture Act. II-3 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT NO. 2 TO REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF LOS ANGELES, STATE OF CALIFORNIA, ON NOVEMBER 28, 1995. Great Western Financial Corporation By /s/ Carl F. Geuther ---------------------------------- CARL F. GEUTHER EXECUTIVE VICE PRESIDENT PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 2 TO REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE *James F. Montgomery Chairman and Chief November 28, 1995 - ------------------------------------ Executive (Principal JAMES F. MONTGOMERY Executive Officer) and Director *John F. Maher President and Chief November 28, 1995 - ------------------------------------ Operating Officer JOHN F. MAHER and Director /s/ Carl F. Geuther Executive Vice November 28, 1995 - ------------------------------------ President and CARL F. GEUTHER Chief Financial Officer (Principal Financial Officer and Chief Accounting Officer) Director - ------------------------------------ DR. DAVID ALEXANDER *H. Frederick Christie Director November 28, 1995 - ------------------------------------ H. FREDERICK CHRISTIE
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SIGNATURE TITLE DATE *S. E. Frank Director November 28, 1995 - ------------------------------------ STEPHEN E. FRANK *John V. Giovenco Director November 28, 1995 - ------------------------------------ JOHN V. GIOVENCO Director - ------------------------------------ FIRMIN A. GRYP *Enrique Hernandez, Jr. Director November 28, 1995 - ------------------------------------ ENRIQUE HERNANDEZ, JR. *Charles D. Miller Director November 28, 1995 - ------------------------------------ CHARLES D. MILLER Director - ------------------------------------ DR. ALBERTA E. SIEGEL *Willis B. Wood, Jr. Director November 28, 1995 - ------------------------------------ WILLIS B. WOOD, JR. *By /s/ Carl F. Geuther --------------------------------- CARL F. GEUTHER Attorney-in-fact
Pursuant to the requirements of the Securities Act of 1933, Great Western Financial Trust I certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-3 and has duly caused this Amendment No. 2 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Los Angeles, State of California on the 28th day of November 1995. Great Western Financial Trust I By: /s/ Carl F. Geuther __________________________________ Carl F. Geuther, as Trustee By: /s/ J. Lance Erikson __________________________________ J. Lance Erikson, as Trustee By: /s/ Bruce F. Antenberg __________________________________ Bruce F. Antenberg, as Trustee II-5 EXHIBIT INDEX
EXHIBIT SEQUENTIALLY NUMBER DESCRIPTION OF EXHIBIT NUMBERED PAGE ------- ---------------------- ------------- 4.1 Restated Certificate of Incorporation of the Company (included as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1992 and incorporated herein by reference). 4.2 Rights Agreement, dated as of June 24, 1986 (filed as an exhibit to the Company's Current Report on Form 8- K, dated July 3, 1986, and incorporated herein by reference). 4.3 First Amendment to Rights Agreement, dated as of February 19, 1988 (filed as an exhibit to the Company's Current Report on Form 8-K, dated February 24, 1988, and incorporated herein by reference). 4.4 Second Amendment to Rights Agreement, dated as of June 27, 1995 (filed as an exhibit to the Company's Current Report on Form 8-K dated June 30, 1995 and incorporated herein by reference). 4.5 New Rights Agreement, dated as of June 27, 1995, between the Company and First Chicago Trust Company of New York (filed as an exhibit to the Company's Current Report on Form 8-K dated June 30, 1995 and incorporated herein by reference). 4.6 Form of Deposit Agreement (filed as an exhibit to Registration Statement No. 33-60206 and incorporated herein by reference). 4.7 Form of Depositary Receipt (attached as Exhibit A to Deposit Agreement included as Exhibit 4.6 hereto). 4.8 Indenture, dated as of September 12, 1990, between the Company and First Interstate Bank, Ltd., relating to the Senior Debt Securities (included as an exhibit to Registration Statement No. 33-34322 and incorporated herein by reference). 4.9 First Supplemental Indenture, dated as of April 30, 1993, to Indenture dated as of September 12, 1990, among the Company, First Interstate Bank, Ltd. and Citibank, N.A. (filed as an exhibit to Registration Statement No. 33-60206 and incorporated herein by reference). 4.10 Indenture, dated as of September 12, 1990, between the Company and Harris Trust and Savings Bank, relating to the Subordinated Debt Securities (included as an exhibit to Registration Statement No. 33-34322 and incorporated herein by reference). 4.11 First Supplemental Indenture, dated as of April 30, 1993, to Indenture dated as of September 12, 1990, between the Company and Harris Trust and Savings Bank (filed as an exhibit to Registration Statement No. 33- 60206 and incorporated herein by reference). 4.12 Form of Second Supplemental Indenture to Indenture dated as of September 12, 1990, as amended, between the Company and Harris Trust and Savings Bank. *4.13 Declaration of Trust of Great Western Financial Trust I. 4.14 Form of Amended and Restated Declaration of Trust of Great Western Financial Trust I. 4.15 Form of Preferred Security (attached as Annex 1 to Exhibit A to the Form of Amended and Restated Declaration of Trust included as Exhibit 4.14 hereto). 4.16 Form of Guarantee Agreement with respect to Preferred Securities.
EXHIBIT INDEX
EXHIBIT SEQUENTIALLY NUMBER DESCRIPTION OF EXHIBIT NUMBERED PAGE ------- ---------------------- ------------- *4.17 Form of Certificate of Designations with respect to a series of Preferred Stock. *5.1 Opinion of O'Melveny & Myers as to the validity of the Securities other than the Preferred Securities. *5.2 Opinion of Skadden, Arps, Slate, Meagher & Flom as to the validity of the Preferred Securities. 12 Computation of Ratio of Earnings to Fixed Charges (included as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1994 and the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995, June 30, 1995 and September 30, 1995 and incorporated herein by reference). 23.1 Consent of Price Waterhouse LLP. *23.2 Consent of O'Melveny & Myers (included in Exhibit 5.1). *23.3 Consent of Skadden, Arps, Slate, Meagher & Flom (included in Exhibit 5.2). *24 Power of Attorney. **25.1 Form T-1 Statement of Eligibility of Citibank, N.A. with respect to the Senior Indenture. *25.2 Form T-1 Statement of Eligibility of Harris Trust and Savings Bank with respect to the Subordinated Indenture. *25.3 Form T-1 Statement of Eligibility of The First National Bank of Chicago with respect to the Amended and Restated Declaration of Trust of Great Western Financial Trust I. *25.4 Form T-1 Statement of Eligibility of The First National Bank of Chicago with respect to the Guarantee. 99.1 Form of Prospectus Supplement for an offering of Preferred Securities.
- -------- *Previously filed. **To be filed by amendment or pursuant to a Form 8-K. EX-4.12 2 FORM OF SECOND SUPPLEMENTAL INDENTURE EXHIBIT 4.12 ================================================================================ GREAT WESTERN FINANCIAL CORPORATION TO HARRIS TRUST AND SAVINGS BANK, as Trustee --------------------- SECOND SUPPLEMENTAL INDENTURE dated as of , 1995 -------- --------------------- % Subordinated Deferrable ---- Interest Notes Due 2025 ================================================================================ Table of Contents Page ---- ARTICLE I Definitions............................. 2 Section 1.1. Definition of Terms......................................... 2 ------------------- ARTICLE II General Terms and Conditions of the Notes.............. 3 Section 2.1. Designation and Principal Amount............................ 3 -------------------------------- Section 2.2. Maturity.................................................... 3 -------- Section 2.3. Form and Payment............................................ 4 ---------------- Section 2.4. Global Note................................................. 5 ----------- Section 2.5. Interest.................................................... 6 -------- ARTICLE III Redemption of the Notes....................... 8 Section 3.1. Tax Event Redemption........................................ 8 -------------------- Section 3.2. Regulatory Redemption Event................................. 9 --------------------------- Section 3.3. Optional Redemption by Company.............................. 9 ------------------------------ Section 3.4 Clean Up Redemption by the Company.......................... 10 ---------------------------------- Section 3.5 Redemption Procedures....................................... 10 --------------------- Section 3.6. No Sinking Fund............................................. 10 --------------- ARTICLE IV Extension of Interest Payment Period................. 10 Section 4.1. Extension of Interest Payment Period........................ 10 ------------------------------------ Section 4.2. Notice of Extension......................................... 11 ------------------- ARTICLE V Expenses............................... 11 Section 5.1. Payment of Expenses......................................... 11 ------------------- ARTICLE VI Subordination............................ 12 Section 6.1. Agreement to Subordinate.................................... 12 ------------------------ i ARTICLE VII CONVERSION OF NOTES.......................... 12 Section 7.1. Conversion Privilege......................................... 12 -------------------- Section 7.2. Exercise of Retention Privilege.............................. 13 ------------------------------- ARTICLE VIII Covenants............................... 13 Section 8.1. Listing on an Exchange....................................... 13 ---------------------- Section 8.2. Notification of Regulatory Event............................. 14 -------------------------------- Section 8.3 Limitation on Dividends; Transactions with Affiliates........ 14 ----------------------------------------------------- Section 8.4 Covenants as to the Trust.................................... 15 ------------------------- ARTICLE IX Events of Default........................... 15 Section 9.1. Events of Default............................................ 15 ----------------- ARTICLE X Form of Note.............................. 15 Section 10.1. Form of Note................................................. 15 ------------ ARTICLE XI Original Issue of Notes........................ 23 Section 11.1. Original Issue of Notes...................................... 23 ----------------------- ARTICLE XII Miscellaneous............................. 23 Section 12.1. Ratification of Indenture................................... 23 ------------------------- Section 12.2. Trustee Not Responsible for Recitals........................ 23 ------------------------------------ Section 12.3. Governing Law............................................... 23 ------------- Section 12.4. Separability................................................ 23 ------------ Section 12.5. Counterparts................................................ 24 ------------ Section 12.6. Third Party Beneficiaries................................... 24 ------------------------- ii SECOND SUPPLEMENTAL INDENTURE, dated as of , 1995 (the -------------- "Second Supplemental Indenture"), between Great Western Financial Corporation, a Delaware corporation (the "Company"), Harris Trust and Savings Bank, as trustee (the "Trustee") under the Indenture dated as of September 12, 1990, as amended and supplemented by the First Supplemental Indenture, dated as of April 30, 1993, between the Company and the Trustee (the "Indenture"). WHEREAS, the Company executed and delivered the Indenture to the Trustee to provide for the future issuance of the Company's unsecured and subordinated debt securities to be issued from time to time in one or more series as might be determined by the Company under the Indenture, in an unlimited aggregate principal amount which may be authenticated and delivered as provided in the Indenture; WHEREAS, pursuant to the terms of the Indenture, the Company desires to provide for the establishment of a new series of its Securities to be known as its " % Subordinated Deferrable Interest Notes due 2025" (the "Notes"), the ---- form and substance of such Notes and the terms, provisions and conditions thereof to be set forth as provided in the Indenture and this Second Supplemental Indenture; WHEREAS, Great Western Financial Trust I, a Delaware statutory business trust (the "Trust"), has offered to the public $[ ] aggregate liquidation amount of its % Trust Originated Preferred Securities (the "Preferred ---- Securities"), representing undivided beneficial interests in the assets of the Trust and proposes to invest the proceeds from such offering in $[ ] aggregate principal amount of the Notes; and WHEREAS, the Company has requested that the Trustee execute and deliver this Second Supplemental Indenture and all requirements necessary to make this Second Supplemental Indenture a valid instrument in accordance with its terms and to make the Notes, when executed by the Company and authenticated and delivered by the Trustee, the valid obligations of the Company have been performed, and the execution and delivery of this Second Supplemental Indenture has been duly authorized in all respects; NOW THEREFORE, in consideration of the purchase and acceptance of the Notes by the Holders thereof, and for the purpose of setting forth, as provided in the Indenture, the form and substance of the Notes and the terms, provisions and conditions thereof, the Company covenants and agrees with the Trustee as follows: 1 ARTICLE I Definitions Section 1.1. Definition of Terms. ------------------- Unless the context otherwise requires: (a) a term defined in the Indenture has the same meaning when used in this Second Supplemental Indenture; (b) a term defined anywhere in this Second Supplemental Indenture has the same meaning throughout; (c) the singular includes the plural and vice versa; (d) a reference to a Section or Article is to a Section or Article of this Second Supplemental Indenture; (e) headings are for convenience of reference only and do not affect interpretation; (f) for purposes of the Notes only, the following terms have the meanings given to them in the Declaration notwithstanding a contrary definition in the Indenture: (i) Business Day; (ii) Common Securities; (iii) Delaware Trustee; (iv) Depositary; (v) Dissolution Tax Opinion; (vi) Ministerial Action; (vii) No Recognition Opinion; (viii) Preferred Securities Guarantee; (ix) Property Trustee; (x) Redemption Tax Opinion; (xi) Regular Trustees; (xii) Regulatory Event; (xiii) Regulatory Redemption Event; (xiv) Special Event; (xv) Trust Securities; and (xvi) Tax Event; and (g) the following terms have the meanings given to them in this Section 1.1(g): "Additional Interest" has the meaning given such term in Section 2.5(c). "Compounded Interest" has the meaning given such term in Section 4.1. "Coupon Rate" has the meaning given such term in Section 2.5. "Deferred Interest" means Additional Interest and Compounded Interest. "Declaration" means the Amended and Restated Declaration of Trust of the Trust dated , 1995. ------------ "Depositary Shares" means the Depositary Shares of the Company, $25.00 liquidation preference per share, each representing a one-tenth interest in a share of % Cumulative --- 2 Preferred Stock of the Company, $250 liquidation preference per share (the "Cumulative Preferred"). The rights and preferences of the Cumulative Preferred are as established in the Certificate of Designations of Rights and Preferences of Preferred Stock filed with the Secretary of State of the State of Delaware on , 1995. - ------- "Dissolution Event" means that as a result of the occurrence and continuation of a Special Event or as a result of a Regulatory Event, the Trust is to be dissolved in accordance with the Declaration, and the Notes held by the Property Trustee are to be distributed to the holders of the Trust Securities issued by the Trust pro rata in accordance with the Declaration. "Extended Maturity Date" means, if the Company elects to extend the Maturity Date in accordance with Section 2.2(b), the date selected by the Company which is after the Stated Maturity Date but before , 2044. -------------- "Extended Interest Payment Period" has the meaning given such term in Section 4.1. "Global Note" has the meaning given such term in Section 2.4(a)(i). "Maturity Date" means the date on which the Notes mature and on which the principal shall be due and payable together with all accrued and unpaid interest thereon, including Deferred Interest, if any. "Non Book-Entry Preferred Securities" has the meaning given such term in Section 2.4(a)(ii). "Redemption Price," for purposes of the Notes, has the meaning given such term in Section 3.1(b). ARTICLE II General Terms and Conditions of the Notes Section 2.1. Designation and Principal Amount. -------------------------------- There is hereby authorized a series of Debt Securities designated the " % --- Subordinated Deferrable Interest Notes due 2025", limited in aggregate principal amount to $[ million], which amount shall be as set forth in any written Company Order for the authentication and delivery of Notes pursuant to Section 303 of the Indenture. Section 2.2. Maturity. -------- (a) The Maturity Date will be either: (i) , 2025; or -------------------- 3 (ii) if the Company elects to extend the Maturity Date beyond , 2025 in accordance with Section 2.2(b), the ---------------- Extended Maturity Date; (b) the Company may at any time before the day which is 90 days before , 2025, elect to extend the Maturity Date only once to the ------------ Extended Maturity Date, provided that the following conditions in this -------- ---- Section 2.2(b) are satisfied both at the date the Company gives notice in accordance with Section 2.2(c) of its election to extend the Maturity Date and at , 2025: ---------- (i) the Company is not in bankruptcy or otherwise insolvent; (ii) the Company is not in default on any Notes issued to the Trust or any trustee of the Trust or to any trust or trustee of the Trust in connection with the issuance of Trust Securities by the Trust; (iii) the Company has made timely payments on the Notes for the immediately preceding 18 months without deferrals; (iv) the Trust is not in arrears on payments of Distributions on the Trust Securities issued by it; and (v) the Notes are rated in one of the four highest rating categories by any one of Standard & Poor's Corporation, Moody's Investors Service, Inc., Fitch Investor Services, Duff & Phelps Credit Rating Company or any other nationally recognized statistical rating organization; and (c) if the Company elects to extend the Maturity Date in accordance with Section 2.2(b), the Company shall give notice to Holders of the Notes, the Property Trustee, the Trust and the Trustee of the extension of the Maturity Date and the Extended Maturity Date at least 90 days before , 2025. -------------- Section 2.3. Form and Payment. ---------------- Except as provided in Section 2.4, the Notes shall be issued as Registered Debt Securities in fully registered certificated form without interest coupons. So long as the Holder of any Notes is the Property Trustee, the payment of the principal of and interest, including Deferred Interest, if any, on such Notes held by the Property Trustee will be made at such place and to such account as may be designated by the Property Trustee. 4 Section 2.4. Global Note. ----------- (a) In connection with a Dissolution Event: (i) the Notes in certificated form may be presented to the Trustee by the Property Trustee in exchange for one or more global Notes in an aggregate principal amount equal to all Outstanding Notes (a "Global Note") to be registered in the name of the Depositary, or its nominee, and delivered by the Trustee to or for the account of the Depositary for crediting to the accounts of its participants pursuant to the instructions of the Regular Trustees. The Company upon any such presentation shall execute a Global Note in such aggregate principal amount and deliver the same to the Trustee for authentication and delivery in accordance with the Indenture and this Second Supplemental Indenture. Payments on the Notes issued as a Global Note will be made to the Depositary; and (ii) if any Preferred Securities are held in non book-entry certificated form, the Notes in certificated form may be presented to the Trustee by the Property Trustee and any Preferred Security Certificate which represents Preferred Securities other than Preferred Securities held by the Depositary or its nominee ("Non Book-Entry Preferred Securities") will be deemed to represent beneficial interests in Notes presented to the Trustee by the Property Trustee having an aggregate principal amount equal to the aggregate liquidation amount of the Non Book- Entry Preferred Securities until such Preferred Security Certificates are presented to the Debt Securities Registrar for transfer or reissuance at which time such Preferred Security Certificates will be cancelled and a Note registered in the name of the holder of the Preferred Security Certificate or the transferee of the holder of such Preferred Security Certificate, as the case may be, with an aggregate principal amount equal to the aggregate liquidation amount of the Preferred Security Certificate cancelled will be executed by the Company and delivered to the Trustee for authentication and delivery in accordance with the Indenture and this Second Supplemental Indenture. On issue of such Notes, Notes with an equivalent aggregate principal amount that were presented by the Property Trustee to the Trustee will be deemed to have been cancelled. 5 (b) A Global Note may be transferred, in whole but not in part only to another nominee of the Depositary, or to a successor Depositary selected or approved by the Company or to a nominee of such successor Depositary. (c) If at any time the Depositary notifies the Company that it is unwilling or unable to continue as Depositary or if at any time the Depositary for such series shall no longer be registered or in good standing under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation, and a successor Depositary for such series is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such condition, as the case may be, the Company will execute, and, subject to the Indenture, the Trustee will authenticate and deliver the Notes in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Note in exchange for such Global Note. In addition, the Company may at any time determine that the Notes shall no longer be represented by a Global Note. In such event the Company will execute and, subject to Article Two of the Indenture, the Trustee will authenticate and deliver the Notes in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Note in exchange for such Global Note. Upon the exchange of the Global Note for such Notes in definitive registered form without coupons, in authorized denominations, the Global Note shall be cancelled by the Trustee. Such Notes in definitive registered form issued in exchange for the Global Note shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Notes to the Depositary for delivery to the Persons in whose names such Notes are so registered. Section 2.5. Interest. -------- (a) Each Note will bear interest at the rate of % per annum (the --- "Coupon Rate") from the original date of issuance until the principal thereof becomes due and payable, and on any overdue principal and (to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the Coupon Rate, compounded quarterly, payable (subject to the provisions of Article Four of this Second Supplemental Indenture) quarterly in arrears on March 31, June 30, September 30 and December 31 of each year (each, an "Interest Payment Date", 6 commencing on , 1995), to the Person in whose name such -------------- Note or any predecessor Note is registered, at the close of business on the regular record date for such interest installment, which, in respect of any Notes of which the Property Trustee is the Holder of or a Global Note, shall be the close of business on the Business Day next preceding that Interest Payment Date. Notwithstanding the foregoing sentence, if the Preferred Securities are no longer in book-entry only form or if pursuant to the Indenture the Notes are not represented by a Global Note, the Company may select a regular record date for such interest installment which shall be any date at least one Business Day before an Interest Payment Date. (b) Notwithstanding the foregoing, upon the occurrence of a Regulatory Event, for a period of 90 days following written notice to the Trustee of the occurrence of a Regulatory Event, the Company may elect to reduce the annual interest rate on the Notes to % per annum, ---- effective for all periods on and after the date of distribution of the Notes to holders of Preferred Securities pursuant to a Dissolution Event; provided, however, that if the Company has elected to defer payments of interest as set forth in Article IV, all deferred interest payments and accrued interest thereon shall be paid before the distribution of the Notes to holder of Preferred Securities. On and after the effective date of such reduction, the term "Coupon Rate" shall mean % per annum and all references to the Notes herein shall --- be to Notes with the revised Coupon Rate for all periods on and after the date of distribution of the Notes to holders of Preferred Securities pursuant to a Dissolution Event. (c) The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months. Except as provided in the following sentence, the amount of interest payable for any period shorter than a full quarterly period for which interest is computed, will be computed on the basis of the actual number of days elapsed in such a 30-day month. In the event that any date on which interest is payable on the Notes is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, notwithstanding the provisions of Section 113 of the Indenture, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. 7 (d) If at any time while the Property Trustee is the Holder of any Notes, the Trust or the Property Trustee is required to pay any taxes, duties, assessments or governmental charges of whatever nature (other than withholding taxes) imposed by the United States, or any other taxing authority, then, in any case, the Company will pay as additional interest ("Additional Interest") on the Notes held by the Property Trustee, such additional amounts as shall be required so that the net amounts received and retained by the Trust and the Property Trustee after paying such taxes, duties, assessments or other governmental charges will be equal to the amounts the Trust and the Property Trustee would have received had no such taxes, duties, assessments or other governmental charges been imposed. ARTICLE III Redemption of the Notes Section 3.1. Tax Event Redemption. -------------------- If a Tax Event has occurred and is continuing and: (a) the Company has received a Redemption Tax Opinion; or (b) after receiving a Dissolution Tax Opinion, the Regular Trustees shall have been informed by tax counsel rendering the Dissolution Tax Opinion that a No Recognition Opinion cannot be delivered to the Trust, then, notwithstanding Section 3.3(a) but subject to Section 3.1(c), the Company shall have the right upon not less than 30 days nor more than 60 days notice to the Holders of the Notes to redeem the Notes in whole or in part for cash within 90 days following the occurrence of such Tax Event (the "90-Day Period"), provided that, if at the time there is available to the Company the opportunity to eliminate, within the 90-Day Period, the Tax Event by taking some Ministerial Action, the Company shall pursue such Ministerial Action in lieu of redemption, and provided, further, that the Company shall have no right to redeem the Notes while the Trust is pursuing any Ministerial Action pursuant to its obligations under the Declaration. A redemption price equal to 100% of the principal amount of the Notes redeemed plus any accrued and unpaid interest thereon to the date of redemption plus Additional and Compounded Interest, if any (the "Redemption Price"), shall be paid. 8 Section 3.2. Regulatory Redemption Event. --------------------------- If a Regulatory Redemption Event has occurred, for a period of 90 days following written notice to the Trustee of the occurrence of a Regulatory Redemption Event, the Company shall have the right to redeem the Notes in whole at the Redemption Price. Section 3.3. Optional Redemption by Company. ------------------------------ Subject to the provisions of Section 3.5(b) and to the provisions of Article Eleven of the Indenture, except as otherwise may be specified in this Second Supplemental Indenture, the Company shall have the right to redeem the Notes, in whole or in part, from time to time, on or after , 2000, at the Redemption Price. -------------- 9 Section 3.4 Clean Up Redemption by the Company. ----------------------------------- If (i) a Regulatory Event has occurred and Notes with a reduced Coupon Rate have been distributed to holders of Preferred Securities as contemplated by Section 2.5(b) hereof and (ii) immediately after such distribution $___________ or less of aggregate principal amount of Notes remain outstanding, the Company shall have the right to redeem the Notes in whole at the Redemption Price at any time during the period from the Interest Payment Date on which such Notes were distributed to holders of Preferred Securities to and including the next succeeding Interest Payment Date. Section 3.5 Redemption Procedures. ---------------------- (a) Any redemption pursuant to this Article III will be made upon not less than 30 nor more than 60 days' notice to the Holder of the Notes at the Redemption Price. If the Notes are only partially redeemed, the Notes will be redeemed pro rata or by lot or by any other method utilized by the Trustee; provided that, if at the time of redemption the Notes are registered as a Global Note, the Depositary shall determine by lot the principal amount of such Notes held by each Holder of Notes to be redeemed. The Redemption Price shall be paid prior to 12:00 noon, New York time, on the date of such redemption or at such earlier time as the Company determines provided that the Company shall deposit with the Trustee an amount sufficient to pay the Redemption Price by 10:00 a.m. on the date such Redemption Price is to be paid. (b) If a partial redemption of the Notes would result in the delisting of the Preferred Securities issued by the Trust from any national securities exchange or other organization on which the Preferred Securities are then listed, the Company shall not be permitted to effect such partial redemption and may only redeem the Notes in whole. Section 3.6. No Sinking Fund. --------------- The Notes are not entitled to the benefit of any sinking fund. ARTICLE IV Extension of Interest Payment Period Section 4.1. Extension of Interest Payment Period. ------------------------------------ The Company shall have the right, at any time during the term of the Notes, from time to time, to defer payments of interest by extending the interest payment period of such Notes for up to 20 consecutive quarters (the "Extended Interest Payment Period"). To the extent permitted by applicable law, interest, the payment of which has been deferred because of the extension of the interest payment period pursuant to this Section 4.1, will bear interest thereon at the Coupon Rate compounded quarterly for each quarter of the Extended Interest Payment Period ("Compounded Interest"). At the end of the Extended Interest Payment Period the Company shall pay all interest accrued and unpaid on the Notes, including any Deferred Interest that shall be payable, to the Holders of the Notes in whose names the Notes are registered in the Security Register on the first record date after the end of the Extended Interest Payment Period. Before the termination of any Extended Interest Payment Period, the Company may further extend such period, provided that such period together with all such further extensions thereof shall not exceed 20 consecutive quarters. Upon the termination of any Extended Interest Payment Period and upon the payment of all Deferred Interest then due, the Company may commence a new Extended Interest Payment Period as if no Extended Interest Payment Period had previously been declared, subject to the foregoing requirements. No interest 10 shall be due and payable during an Extended Interest Payment Period, except at the end thereof. Section 4.2. Notice of Extension. ------------------- (a) If the Property Trustee is the only registered Holder of the Notes at the time the Company selects an Extended Interest Payment Period, the Company shall give written notice to the Regular Trustees, the Property Trustee and the Trustee of its selection of such Extended Interest Payment Period one Business Day before the earlier of (a) the next succeeding date on which Distributions on the Trust Securities issued by the Trust are payable, or (b) the date the Trust is required to give notice of the record date or the date such Distributions are payable to the New York Stock Exchange or other applicable self- regulatory organization or to holders of the Preferred Securities issued by the Trust, but in any event at least one Business Day before such record date. (b) If the Property Trustee is not the only Holder of the Notes at the time the Company selects an Extended Interest Payment Period, the Company shall give the Holders of the Notes and the Trustee written notice of its selection of such Extended Interest Payment Period 10 Business Days before the earlier of (i) the next succeeding Interest Payment Date, or (ii) the date the Company is required to give notice of the record or payment date of such interest payment to the New York Stock Exchange or other applicable self-regulatory organization or to Holders of the Notes. (c) The quarter in which any notice is given pursuant to paragraphs (a) or (b) of this Section 4.2 shall be counted as one of the 20 quarters permitted in the maximum Extended Interest Payment Period permitted under Section 4.1. ARTICLE V Expenses Section 5.1. Payment of Expenses. ------------------- In connection with the offering, sale and issuance of the Notes to the Property Trustee in connection with the sale of the Trust Securities by the Trust, and in connection with the maintenance of the Trust for so long as the Trust Securities are outstanding, the Company shall: (a) pay all costs and expenses relating to the offering, sale and issuance of the Notes, including commissions to the underwriters payable pursuant to the Underwriting Agreement and compensation of the Trustee 11 under the Indenture in accordance with the provisions of Section 607 of the Indenture; (b) pay all debts and obligations of the Trust (other than with respect to the Trust Securities) and all costs and expenses of the Trust (including, but not limited to, costs and expenses relating to the organization of the Trust, the offering, sale and issuance of the Trust Securities (including commissions to the underwriters in connection therewith), the fees and expenses of the Regular Trustees, the Property Trustee and the Delaware Trustee, the costs and expenses relating to the operation of the Trust, including without limitation, costs and expenses of accountants, attorneys, statistical or bookkeeping services, expenses or printing and engraving and computing or accounting equipment, paying agent(s), registrar(s), transfer agent(s), duplicating, travel and telephone and other telecommunications expenses and costs and expenses incurred in connection with the acquisition, financing, and disposition of Trust assets); (c) pay any and all taxes (other than United States withholding taxes attributable to the Trust or its assets) and all liabilities, costs and expenses with respect to such taxes of the Trust; and (d) pay any and all fees and expenses related to the enforcement by the Property Trustee of the rights of the holders of the Preferred Securities. ARTICLE VI Subordination Section 6.1. Agreement to Subordinate. ------------------------ The Company covenants and agrees, and each Holder of Notes issued hereunder by such Holder's acceptance thereof likewise covenants and agrees, that all Notes shall be issued subject to the provisions of Article THIRTEEN of the Indenture; and each Holder of a Note, whether upon original issue or upon transfer or assignment thereof, accepts and agrees to be bound by such provisions. ARTICLE VII CONVERSION OF NOTES Section 7.1. Conversion Privilege. -------------------- If the Company has elected to adjust the annual interest rate on the Notes as provided in Section 2.5(b), then on the next Interest Payment Date which is at least 30 days after notice to 12 the holders of Trust Securities of the Company's election to adjust the annual interest rate on the Notes as a result of a Regulatory Event, each Note shall be converted into Depositary Shares with a liquidation preference equal to the principal amount of the Notes converted, plus, in cash, any accrued but unpaid interest on the Notes to the date of conversion, unless prior to such conversion the holder of the Trust Securities elects not to convert such Note (the "Retention Privilege"), in which event such holder shall be entitled to receive the Note. Section 7.2. Exercise of Retention Privilege. ------------------------------- In order to exercise the Retention Privilege, if available, the Holder of any Note or right to receive any Note shall surrender Preferred Securities, duly endorsed or assigned to the Company or in blank, with a liquidation preference equal to the principal amount of Notes to be retained, accompanied by written notice to the Company and delivered to any office or agency of the Company maintained for that purpose, or if less than the entire principal amount of Notes to which such holder is entitled is to be retained, the portion thereof to be retained. Notes shall be deemed to be converted as of the date Notes are otherwise distributed to holders of Preferred Securities pursuant to a Dissolution Event as a result of a Regulatory Event, and at such time the rights of such Holder to Notes shall cease, and the Person or Persons entitled to receive the Depositary Shares issuable upon conversion shall be treated for all purposes as the record holder or holders of such Depositary Shares at such time. In the case of any Note converted in part only, upon such conversion the Company shall execute and the Trustee shall authenticate and deliver to the Holder thereof, at the expense of the Company, a new Note of authorized denominations in aggregate principal amount to the unconverted portion of the principal amount of such Note. ARTICLE VIII Covenants Section 8.1. Listing on an Exchange. ---------------------- If the Notes are to be issued as a Global Note in connection with the distribution of the Notes to the holders of the Preferred Securities issued by the Trust upon a Dissolution Event and/or Depositary Shares are issued upon conversion as provided in Article VII, the Company will use its best efforts to list such Notes or Depositary Shares, as the case may be, on the New York Stock Exchange or on such other exchange as the Preferred Securities are then listed. 13 Section 8.2. Notification of Regulatory Event. -------------------------------- The Company shall promptly notify the Regular Trustees and the Trustee of the occurrence of a Regulatory Event. Section 8.3 Limitation on Dividends; Transactions with Affiliates. ----------------------------------------------------- (a) If Notes are issued to the Trust or a trustee of the Trust and (i) there shall have occurred any event that would constitute an Event of Default or (ii) the Company shall be in default with respect of its payment or any other obligations under the Preferred Securities Guarantee, then (A) the Company shall not, and shall cause any subsidiary of the Company that is not a wholly owned subsidiary of the Company not to, declare or pay any dividend on, make any distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any of its capital stock or the capital stock of any such subsidiary, and (B) the Company shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities (including guarantees) issued by the Company which rank pari passu with or junior to the Notes, provided that the foregoing restriction in clause (A) does not apply to any stock dividends paid by the Company, or any of its subsidiaries, where the dividend stock is the same stock as that on which the dividend is being paid. (b) If Notes are issued to the Trust or a trustee of the Trust and the Company shall have given notice of its election to defer payments of interest on the Notes by extending the interest payment period as provided in Article IV hereof and such period, or any extension thereof, shall be continuing, then (A) the Company shall not, and shall cause any subsidiary of the Company that is not a wholly owned subsidiary of the Company not to, declare or pay any dividend on, make any distributions with respect to, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock or the capital stock of any such subsidiary, and (B) the Company shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities (including guarantees) issued by the Company which rank pari passu with or junior to the Notes, provided that the foregoing restriction in clause (A) does not apply to any stock dividends paid by the Company, or any of its subsidiaries, where the dividend stock is the same as that on which the dividend is being paid. 14 Section 8.4 Covenants as to the Trust. ------------------------- For so long as such Trust Securities remain outstanding, the Company will (i) maintain 100% direct or indirect ownership of the Common Securities of the Trust; provided, however, that any permitted successor of the Company under the Indenture may succeed to the Company's ownership of the Common Securities, and (ii) use its reasonable efforts to cause the Trust (A) to remain a statutory business trust, except in connection with a distribution of Notes as provided in the Declaration, the redemption of all of the Trust Securities or certain mergers, consolidations or amalgamations permitted by the Declaration, and (B) otherwise continue to be treated as a grantor trust for United States federal income tax purposes. ARTICLE IX Events of Default Section 9.1. Events of Default. ----------------- For the Notes only, a valid extension of the interest payment period in accordance with Article IV hereof shall not constitute a Default or Event of Default under Section 501(1) or (8) of the Indenture. For the Notes only, the voluntary or involuntary dissolution, winding-up or termination of the Trust, except in connection with the distribution of the Notes to the holders of the Trust Securities in liquidation of the Trust, the redemption of all the Trust Securities, or mergers, consolidations or amalgamations, each as permitted by the Declaration, shall constitute an Event of Default. ARTICLE X Form of Note Section 10.1. Form of Note. ------------ The Notes and the Trustee's Certificate of Authentication to be endorsed thereon are to be substantially in the following forms: (FORM OF FACE OF NOTE) (IF THE NOTE IS TO BE A GLOBAL NOTE, INSERT - This Note is a Global Note within the meaning of the Indenture hereinafter referred to and is registered in the name of a Depositary or a nominee of a Depositary. This Note is exchangeable for Global Notes registered in the name of a person other than the Depositary or its nominee only in the limited circumstances described in the Indenture, and no transfer of this Note (other than a transfer of this Note as a whole by the Depositary to a 15 nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary) may be registered except in limited circumstances. Every Note delivered upon registration of transfer of, or in exchange for, or in lieu of, this Global Security shall be a Global Security, subject to the foregoing, except in the limited circumstances described above. Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC") to the issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as requested by an authorized representative of DTC (or to such other entity as is requested by an authorized representative of DTC) and any payment is made to Cede & Co. (or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.) No. ------------------ $ ----------------- CUSIP No. ---------------------- % SUBORDINATE DEFERRABLE INTEREST NOTE ----- DUE 2025 Great Western Financial Corporation, a Delaware corporation (the "Company"), which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to , or registered assigns, the principal sum of - --------------- -------------- Dollars on , 2025, (or on such later date before , 2044, ----------------- ------- if the Company elects to extend the maturity date as further described herein), and to pay interest on said principal sum from , 1995, or from --------------- the most recent interest payment date (each such date, an "Interest Payment Date") to which interest has been paid or duly provided for, quarterly (subject to deferral as set forth herein) in arrears on March 31, June 30, September 30 and December 31 of each year commencing , 199__, at the rate of ----------------- % per annum (or at % per annum if the Company elects to reduce the - ----- --- interest rate per annum as further described herein) until the principal hereof shall have become due and payable, and on any overdue principal and premium, if any, and (without duplication and to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the same rate per annum compounded quarterly. The amount of interest payable on any Interest Payment Date shall 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 this Note is not a Business Day, then payment of interest payable on such date will be made on the next 16 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 is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. The interest installment so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Notes, as defined in said Indenture) is registered at the close of business on the regular record date for such interest installment, which shall be the close of business on the Business Day next preceding such Interest Payment Date. [IF PURSUANT TO THE PROVISIONS OF THE INDENTURE THE NOTES ARE NO LONGER REPRESENTED BY A GLOBAL NOTE -- which shall be the close of business of the Business ---- Day next preceding such Interest Payment Date.] Any such interest installment not punctually paid or duly provided for shall forthwith cease to be payable to the registered Holders on such regular record date and may be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on a special record date to be fixed by the Trustee for the payment of such defaulted interest, notice whereof shall be given to the registered Holders of this series of Notes not less than 10 days prior to such special record date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. The principal of (and premium, if any) and the interest on this Note shall be payable at the office or agency of the Trustee maintained for that purpose in any coin or currency of the United States of America that at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Company by check mailed to the registered Holder at such address as shall appear in the Security Register. Notwithstanding the foregoing, so long as the Holder of this Note is the Property Trustee, the payment of the principal of (and premium, if any) and interest on this Note will be made at such place and to such account as may be designated by the Property Trustee. The indebtedness evidenced by this Note is, to the extent provided in the Indenture, subordinate and junior in right of payment to the prior payment in full of all Senior Indebtedness, and this Note is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Note, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination so provided and (c) appoints the Trustee his or her attorney-in-fact for any and all such purposes. Each Holder hereof, by his or her acceptance hereof, hereby waives all notice of the acceptance of the 17 subordination provisions contained herein and in the Indenture by each holder of Senior Indebtedness, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions. This Note shall not be entitled to any benefit under the Indenture hereinafter referred to, be valid or become obligatory for any purpose until the Certificate of Authentication hereon shall have been signed by or on behalf of the Trustee. Unless the Certificate of Authentication hereon has been executed by the Trustee referred to on the reverse side hereof, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. The provisions of this Note are continued on the reverse side hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place. IN WITNESS WHEREOF, the Company has caused this instrument to be executed. Dated --------------------- GREAT WESTERN FINANCIAL CORPORATION By ---------------------------------- { } Attest: By -------------------------- Secretary 18 (FORM OF CERTIFICATE OF AUTHENTICATION) CERTIFICATE OF AUTHENTICATION This is one of the Notes of the series of Notes described in the within- mentioned Indenture. HARRIS TRUST AND SAVINGS BANK, as Trustee HARRIS TRUST AND SAVINGS BANK, --------------------------------- as Trustee or as Authentication Agent By By ------------------------------ -------------------------------- Authorized Signatory Authorized Signatory (FORM OF REVERSE OF NOTE) This Note is one of a duly authorized series of Notes of the Company (herein sometimes referred to as the "Notes"), specified in the Indenture, all issued or to be issued in one or more series under and pursuant to an Indenture dated as of September 12, 1990, as amended and supplemented by a First Supplemental Indenture dated as of April 30, 1993 and a Second Supplemental Indenture dated as of , 1995, duly executed and delivered ------------------ between the Company and Harris Trust and Savings Bank, as Trustee (the "Trustee") (the Indenture as so supplemented, the "Indenture"), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Notes. By the terms of the Indenture, the Notes are issuable in series that may vary as to amount, date of maturity, rate of interest and in other respects as provided in the Indenture. This series of Notes is limited in aggregate principal amount as specified in said First Supplemental Indenture. The Company shall have the right to redeem this Note at the option of the Company, without premium or penalty, in whole or in part at any time on or after , 2000 (a "Optional Redemption") or at any time in certain ---------------- circumstances upon the occurrence of a Tax Event, or in whole for a limited time as further described below, at the Company's election upon the occurrence of a Regulatory Redemption Event, at a redemption price equal to 100% of the principal amount plus any accrued but unpaid interest, to the date of such redemption (the "Redemption 19 Price"). Any redemption pursuant to this paragraph will be made upon not less than 30 nor more than 60 days' notice, at the Optional Redemption Price. If the Notes are only partially redeemed by the Company pursuant to an Optional Redemption, the Notes will be redeemed pro rata or by lot or by any other method utilized by the Trustee; provided that if, at the time of redemption, the Notes are registered as a Global Note, the Depositary shall determine by lot the principal amount of such Notes held by each Holder of Notes to be redeemed. Upon the occurrence of a Regulatory Event, the Company may elect to reduce the interest rate per annum on this Note by 50 basis points, effective for all periods on and after the date of distribution of this Note to holders of Trust Securities; provided, however, that if the Company has elected to defer payments of interest as set forth below, all deferred interest payments and accrued interest thereon shall be paid before the distribution of this Note to holders of Preferred Securities. If the interest rate per annum on this Note is reduced, on the date of the next Interest Payment Date which is at least 30 days after notice to the holders of Trust Securities of the Company's election to reduce the interest rate per annum on the Notes, this Note shall be converted into Depositary Shares of the Company with a liquidation preference equal to the principal amount of this Note, plus in cash any accrued but unpaid interest on this Note to the date of conversion, unless prior to such conversion the holder of this Note elects not to convert this Note, in whole or in part, in which event such holder shall be entitled to receive this Note or a new Note with a principal amount equal to the portion of this Note not converted. Depositary Shares have a liquidation preference of $25 per share, each representing a one- tenth interest in a share of % Cumulative Preferred Stock of the Company, --- $250 liquidation preference per share. In the event of a redemption or conversion of this Note in part only, a new Note for the unredeemed or unconverted portion thereof will be issued in the name of the Holder hereof upon cancellation hereof. In case an Event of Default, as defined in the Indenture, shall have occurred and be continuing, the principal of all of the Notes may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the Holders of not less than a majority in aggregate principal amount of the Notes of each series affected at the time outstanding, as defined in the Indenture, to execute supplemental indentures for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or of modifying in any manner the rights of the Holders of the Notes; provided, -------- however, that no such supplemental - ------- 20 indenture shall (i) extend the fixed maturity of any Notes of any series, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof, without the consent of the Holder of each Note so affected, or (ii) reduce the aforesaid percentage of Notes, the Holders of which are required to consent to any such supplemental indenture, without the consent of the Holders of each Note then outstanding and affected thereby. The Indenture also contains provisions permitting the Holders of a majority in aggregate principal amount of the Notes of any series at the time outstanding affected thereby, on behalf of all of the Holders of the Notes of such series, to waive any past default in the performance of any of the covenants contained in the Indenture, or established pursuant to the Indenture with respect to such series, and its consequences, except a default in the payment of the principal of or premium, if any, or interest on any of the Notes of such series. Any such consent or waiver by the registered Holder of this Note (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and owners of this Note and of any Note issued in exchange herefor or in place hereof (whether by registration of transfer or otherwise), irrespective of whether or not any notation of such consent or waiver is made upon this Note. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and premium, if any, and interest on this Note at the time and place and at the rate and in the money herein prescribed. The Company shall have the right at any time during the term of the Notes from time to time to extend the interest payment period of such Notes to up to 20 consecutive quarters (an "Extended Interest Payment Period"), at the end of which period the Company shall pay all interest then accrued and unpaid (together with interest thereon at the rate specified for the Notes to the extent that payment of such interest is enforceable under applicable law). Before the termination of any such Extended Interest Payment Period, the Company may further extend such Extended Interest Payment Period, provided that such Extended Interest Payment Period together with all such further extensions thereof shall not exceed 20 consecutive quarters. At the termination of any such Extended Interest Payment Period and upon the payment of all accrued and unpaid interest and any additional amounts then due, the Company may commence a new Extended Interest Payment Period. As provided in the Indenture and subject to certain limitations therein set forth, this Note is transferable by the registered Holder hereof on the Security Register of the Company, upon surrender of this Note for registration of transfer at the office or agency of the Company in the City and State of New York 21 accompanied by a written instrument or instruments of transfer in form satisfactory to the Company or the Trustee duly executed by the registered Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of authorized denominations and for the same aggregate principal amount and series will be issued to the designated transferee or transferees. No service charge will be made for any such transfer, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in relation thereto. Prior to due presentment for registration of transfer of this Note, the Company, the Trustee, any paying agent and any Security Registrar may deem and treat the registered Holder hereof as the absolute owner hereof (whether or not this Note shall be overdue and notwithstanding any notice of ownership or writing hereon made by anyone other than the Security Registrar) for the purpose of receiving payment of or on account of the principal hereof and premium, if any, and interest due hereon and for all other purposes, and neither the Company nor the Trustee nor any paying agent nor any Security Registrar shall be affected by any notice to the contrary. No recourse shall be had for the payment of the principal of or the interest on this Note, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture, against any incorporator, stockholder, officer or director, past, present or future, as such, of the Company or of any predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issuance hereof, expressly waived and released. The notes of this series are issuable only in registered form without coupons in denominations of $25 and any integral multiple thereof. This Global Note is exchangeable for Notes in definitive form only under certain limited circumstances set forth in the Indenture. Notes of this series so issued are issuable only in registered form without coupons in denominations of $25 and any integral multiple thereof as provided in the Indenture and subject to certain limitations herein and therein set forth. Notes of this series so issued are exchangeable for a like aggregate principal amount of Notes of this series of a different authorized denomination, as requested by the Holder surrendering the same. All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture. 22 ARTICLE XI Original Issue of Notes Section 11.1. Original Issue of Notes. ----------------------- Notes in the aggregate principal amount of $ may, upon ------- execution of this Second Supplemental Indenture, be executed by the Company and delivered to the Trustee for authentication, and the Trustee shall thereupon authenticate and deliver said Notes to or upon the written order of the Company, signed by its Chairman of the Board, its President, or one of its Vice Presidents and attested to by its Secretary or one of its Assistant Secretaries, without any further action by the Company. ARTICLE XII Miscellaneous Section 12.1. Ratification of Indenture. ------------------------- The Indenture, as supplemented by this Second Supplemental Indenture, is in all respects ratified and confirmed, and this Second Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided. Section 12.2. Trustee Not Responsible for Recitals. ------------------------------------ The recitals herein contained are made by the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representation as to the validity or sufficiency of this Second Supplemental Indenture. Section 12.3. Governing Law. ------------- This Second Supplemental Indenture and each Note shall be deemed to be a contract made under the internal laws of the State of New York, and for all purposes shall be construed in accordance with the laws of said State. Section 12.4. Separability. ------------ In case any one or more of the provisions contained in this Second Supplemental Indenture or in the Notes shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Second Supplemental Indenture or of the Notes, but this Second Supplemental Indenture and the Notes shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein. 23 Section 12.5. Counterparts. ------------ This Second Supplemental Indenture may be executed in any number of counterparts each of which shall be an original; but such counterparts shall together constitute but one and the same instrument. Section 12.6. Third Party Beneficiaries. ------------------------- The holders of the Preferred Securities are each entitled to enforce and exercise the rights and remedies under the Indenture to the extent set forth in Section 5(b) of Exhibit A to the Delaration. IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, on the date or dates indicated in the acknowledgements and as of the day and year first above written. GREAT WESTERN FINANCIAL CORPORATION By --------------------------------- Attest: - ---------------------------- Secretary HARRIS TRUST AND SAVINGS BANK, as Trustee By --------------------------------- Attest: --------------------------- Secretary 24 EX-4.14 3 AMENDED AND RESTATED DECLARATION EXHIBIT 4.14 =============================================================================== FORM OF AMENDED AND RESTATED DECLARATION OF TRUST GREAT WESTERN FINANCIAL TRUST I Dated as of ________, 1995 ============================================================================= TABLE OF CONTENTS Page # ------ ARTICLE I Interpretation and Definitions..................... 2 Section 1.1 Definitions............................................. 2 ----------- ARTICLE II Trust Indenture Act.......................... 8 Section 2.1 Trust Indenture Act; Application........................ 8 -------------------------------- Section 2.2 Lists of Holders of Trust Securities.................... 8 ------------------------------------ Section 2.3 Reports by the Property Trustee......................... 9 ------------------------------- Section 2.4 Periodic Reports to Property Trustee.................... 9 ------------------------------------ Section 2.5 Evidence of Compliance with Conditions -------------------------------------- Precedent............................................... 9 --------- Section 2.6 Events of Default; Waiver............................... 10 ------------------------- Section 2.7 Event of Default; Notice................................ 11 ------------------------ ARTICLE III Organization.............................. 12 Section 3.1 Name.................................................... 12 ---- Section 3.2 Office.................................................. 12 ------ Section 3.3 Purpose................................................. 12 ------- Section 3.4 Authority............................................... 13 --------- Section 3.5 Title to Property of the Trust.......................... 13 ------------------------------ Section 3.6 Powers and Duties of the Regular -------------------------------- Trustees................................................ 13 -------- Section 3.7 Prohibition of Actions by the Trust and --------------------------------------- the Trustees............................................ 16 ------------ Section 3.8 Powers and Duties of the Property --------------------------------- Trustee................................................. 17 ------- Section 3.9 Certain Duties and Responsibilities of -------------------------------------- the Property Trustee.................................... 19 -------------------- Section 3.10 Certain Rights of Property Trustee...................... 22 ---------------------------------- Section 3.11 Delaware Trustee........................................ 24 ---------------- Section 3.12 Execution of Documents.................................. 25 ---------------------- Section 3.13 Not Responsible for Recitals or Issuance ---------------------------------------- of Trust Securities..................................... 25 ------------------- Section 3.14 Duration of Trust....................................... 25 ----------------- Section 3.15 Mergers................................................. 25 ------- ARTICLE IV Sponsor................................ 27 Section 4.1 Sponsor's Purchase of Common Securities................. 27 --------------------------------------- Section 4.2 Responsibilities of the Sponsor......................... 27 ------------------------------- ARTICLE V Trustees................................ 28 Section 5.1 Number of Trustees....................................... 28 ------------------ Section 5.2 Delaware Trustee......................................... 28 ---------------- Section 5.3 Property Trustee; Eligibility............................ 28 ----------------------------- Section 5.4 Qualifications of Regular Trustees and -------------------------------------- Delaware Trustee Generally............................... 29 -------------------------- Section 5.5 Initial Trustees......................................... 30 ---------------- Section 5.6 Appointment, Removal and Resignation of --------------------------------------- Trustees................................................. 30 -------- Section 5.7 Vacancies Among Trustees................................. 32 ------------------------ Section 5.8 Effect of Vacancies...................................... 32 ------------------- Section 5.9 Meetings................................................. 32 -------- Section 5.10 Delegation of Power...................................... 33 ------------------- ARTICLE VI Distributions.............................. 33 Section 6.1 Distributions............................................ 33 ------------- ARTICLE VII Issuance of Trust Securities....................... 33 Section 7.1 General Provisions Regarding Trust ---------------------------------- Securities............................................... 33 ---------- ARTICLE VIII Termination............................... 35 Section 8.1 Termination of Trust..................................... 35 -------------------- ARTICLE IX Transfer of Interest........................... 36 Section 9.1 Transfer of Trust Securities............................. 36 ---------------------------- Section 9.2 Transfer of Certificates................................. 36 ------------------------ Section 9.3 Deemed Trust Security Holders............................ 37 ----------------------------- Section 9.4 Book Entry Interests..................................... 37 -------------------- Section 9.5 Notices to Depositary.................................... 38 --------------------- Section 9.6 Appointment of Successor Depositary...................... 38 ----------------------------------- Section 9.7 Definitive Preferred Security ------------------------------ Certificates............................................. 38 ------------ Section 9.8 Mutilated, Destroyed, Lost or Stolen ------------------------------------ Certificates............................................. 39 ------------ ARTICLE X Limitation of Liability of Holders of Trust Securities, Trustees or Others................. 40 Section 10.1 Liability................................................ 40 --------- Section 10.2 Exculpation.............................................. 40 ----------- Section 10.3 Fiduciary Duty........................................... 41 -------------- Section 10.4 Indemnification.......................................... 42 --------------- Section 10.5 Outside Businesses....................................... 43 ------------------ ARTICLE XI Accounting................................ 43 Section 11.1 Fiscal Year.............................................. 43 ----------- Section 11.2 Certain Accounting Matters............................... 43 -------------------------- Section 11.3 Banking................................................ 44 ------- Section 11.4 Withholding............................................ 44 ----------- ARTICLE XII Amendments and Meetings....................... 45 Section 12.1 Amendments............................................. 45 ---------- Section 12.2 Meetings of the Holders of Trust -------------------------------- Securities; Action by Written Consent.................. 47 ------------------------------------- ARTICLE XIII Representations and Warranties of Property Trustee.......... 49 Section 13.1 Representations and Warranties of --------------------------------- Property Trustee....................................... 49 ---------------- ARTICLE XIV Miscellaneous............................ 50 Section 14.1 Notices................................................ 50 ------- Section 14.2 Governing Law.......................................... 51 ------------- Section 14.3 Intention of the Parties............................... 51 ------------------------ Section 14.4 Headings............................................... 52 -------- Section 14.5 Successors and Assigns................................. 52 ---------------------- Section 14.6 Partial Enforceability................................. 52 ---------------------- Section 14.7 Counterparts........................................... 52 ------------ EXHIBIT A................................................................. A-1 ANNEX I................................................................... I-1 ANNEX II.................................................................. II-1 AMENDED AND RESTATED DECLARATION OF TRUST AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and effective as of , 1995, by the undersigned trustees (together with all -------- other Persons from time to time duly appointed and serving as trustees in accordance with the provisions of this Declaration, the "Trustees"), Great Western Financial Corporation, a Delaware corporation, as trust sponsor (the "Sponsor"), 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 established a trust (the "Trust") under the Delaware Business Trust Act pursuant to a Declaration of Trust dated as of September 25, 1995, (the "Original Declaration") and a Certificate of ------------ Trust filed with the Secretary of State of Delaware on September 27, 1995, for ------------ the sole purpose of issuing and selling certain securities representing undivided beneficial interests in the assets of the Trust and investing the proceeds thereof in certain Notes of the Note Issuer (as hereinafter defined); WHEREAS, as of the date hereof, no interests in the Trust have been issued; WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend and restate each and every term and provision of the Original Declaration; and NOW, THEREFORE, it being the intention of the parties hereto to continue the Trust as a business trust under the Business Trust Act and that this Declaration, including Exhibit A hereto which is expressly made a part hereof, constitute 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. 1 ARTICLE I Interpretation and Definitions Section 1.1 Definitions. ----------- (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; (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 as modified, supplemented or amended from time to time; (d) all references in this Declaration to Articles and Sections and Exhibits are to Articles and Sections of and Exhibits to this Declaration unless otherwise specified; (e) a term defined in the Trust Indenture Act has the same meaning when used in this Declaration unless otherwise defined in this Declaration or unless the context otherwise requires; and (f) a reference to the singular includes the plural and vice versa. "Affiliate" has the same meaning as given to that term in Rule 405 of the Securities Act or any successor rule thereunder. "Authorized Officer" of a Person means any Person that is authorized to bind such Person. "Book Entry Interest" means a beneficial interest in a Global Certificate, ownership and transfers of which shall be maintained and made through book entries by a Depositary as described in Section 9.4. "Business Day" means any day other than a day on which banking institutions in New York, New York or Los Angeles, California are authorized or required by any applicable law to close. "Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to time. -- --- "Certificate" means a Common Security Certificate or a Preferred Security Certificate. "Closing Date" means , 1995. --------- 2 "Code" means the Internal Revenue Code of 1986, as amended from time to time, or any successor legislation. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Common Security" has the meaning specified in Section 7.1. "Common Securities Guarantee" means the guarantee agreement to be dated as of , 1995, of the Sponsor in respect of the Common Securities. -------- "Common Security Certificate" means a definitive certificate in fully registered form representing a Common Security substantially in the form of Annex II to Exhibit A. "Covered Person" means: (a) any officer, director, shareholder, partner, member, representative, employee or agent of (i) the Trust or (ii) the Trust's Affiliates; and (b) any Holder of Trust Securities. "Delaware Trustee" has the meaning set forth in Section 5.2. "Definitive Preferred Security Certificates" has the meaning set forth in Section 9.4. "Depositary" means an organization registered as a clearing agency pursuant to Section 17A of the Exchange Act that is acting as depositary for the Preferred Securities and in whose name or in the name of a nominee of that organization shall be registered a Global Certificate and which shall undertake to effect book entry transfers and pledges of the Preferred Securities. "Depositary Participant" means a broker, dealer, bank, other financial institution or other Person for whom from time to time the Depositary effects book entry transfers and pledges of securities deposited with the Depositary. "Depositary Shares" means the Depositary Shares of the Note Issuer, having a liquidation preference of $25.00 per share, each representing a one-tenth interest in a share of % Cumulative Preferred Stock of the Note Issuer, $250 ---- liquidation preference per share (the "Cumulative Preferred"). The rights and preferences of the Cumulative Preferred are as established in the Certificate of Designations of Rights and Preferences of Preferred Stock filed with the Secretary of State of Delaware on , 1995. ------- 3 "Direction" by a Person means a written direction signed: (a) if the Person is a natural person, by that Person; or (b) in any other case, in the name of such Person by one or more Authorized Officers of that Person. "Distribution" means a distribution payable to Holders of Trust Securities in accordance with Section 6.1. "DTC" means The Depository Trust Company, the initial Depositary. "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, or any successor legislation. "Event of Default" in respect of the Trust Securities means an Event of Default (as defined in the Indenture) has occurred and is continuing in respect of the Notes. "Guarantees" means, collectively, the Common Securities Guarantee and the Preferred Securities Guarantee. "Holder" means a Person in whose name a Certificate representing a Trust Security is registered on the books and records of the Trust, such Person being a beneficial owner within the meaning of the Business Trust Act, provided, that, -------- ---- in determining whether the holders of the requisite percentage of Preferred Securities have given any request, notice, consent or waiver hereunder, "Holder" shall not include the Sponsor, as guarantor of the Trust Securities, or any Affiliate of the Sponsor. "Indemnified Person" means (a) any Trustee; (b) any Affiliate of any Trustee; (c) any officers, directors, shareholders, members, partners, employees, representatives or agents of any Trustee; or (d) any employee or agent of the Trust or its Affiliates. "Indenture" means the Indenture dated as of September 12, 1990 between the Note Issuer and the Note Trustee as amended and supplemented by a First Supplemental Indenture, dated April 30, 1993 and the Second Supplemental Indenture dated , 1995. --------- "Investment Company" means an investment company as defined in the Investment Company Act. "Investment Company Act" means the Investment Company Act of 1940, as amended from time to time, or any successor legislation. "Investment Company Event" has the meaning set forth in Exhibit A. 4 "Legal Action" has the meaning set forth in Section 3.6(g). "Ministerial Action" has the meaning set forth in Exhibit A. "Majority in liquidation amount of the Trust Securities" means, except as provided in the terms of the Preferred Securities and the Trust Indenture Act, Holder(s) of outstanding Trust Securities voting together as a single class or, as the context may require, Holders of outstanding Preferred Securities or Holders of outstanding Common Securities voting separately as a class, who are the record owners of more than 50% of the aggregate liquidation amount (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) of all outstanding Trust Securities of the relevant class. "Note Issuer" means the Sponsor in its capacity as issuer of the Notes. "Note Trustee" means Harris Trust and Savings Bank, as trustee under the Indenture until a successor is appointed thereunder, and thereafter means such successor trustee. "Notes" means the series of debt securities of the Note Issuer under the Indenture to be held by the Property Trustee for the benefit of the Holders. "Officers' Certificate" means, with respect to any Person, a certificate signed by two Authorized Officers of such Person. Any Officers' Certificate delivered with respect to compliance with a condition or covenant provided for in this Declaration shall include: (a) a statement that each officer signing the Certificate has read the covenant or condition and the definition relating thereto; (b) a brief statement of the nature and scope of the examination or investigation undertaken by each officer in rendering the Certificate; (c) 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 (d) a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with. "Paying Agent" has the meaning specified in Section 3.8(h). 5 "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. "Preferred Securities Guarantee" means the guarantee agreement to be dated as of , 1995, of the Sponsor in respect of the Preferred Securities. ---------- "Preferred Security" has the meaning specified in Section 7.1. "Preferred Security Beneficial Owner" means, with respect to a Book Entry Interest, a Person who is the beneficial owner of such Book Entry Interest, as reflected on the books of the Depositary, or on the books of a Person maintaining an account with such Depositary (directly as a Depositary Participant or as an indirect participant, in each case in accordance with the rules of such Depositary). "Preferred Security Certificate" means a certificate representing a Preferred Security substantially in the form of Annex I to Exhibit A. "Property Trustee" means the Trustee meeting the eligibility requirements set forth in Section 5.3. "Property Trustee Account" has the meaning set forth in Section 3.8(c). "Purchase Agreement" means the Purchase Agreement for the offering and sale of Preferred Securities. "Quorum" means a majority of the Regular Trustees or, if there are only two Regular Trustees, both of them. "Regular Trustee" means any Trustee other than the Property Trustee and the Delaware Trustee. "Regulatory Event" has the meaning set forth in Exhibit A. "Regulatory Redemption Event" has the meaning set forth in Exhibit A. "Related Party" means, with respect to the Sponsor, any direct or indirect wholly owned subsidiary of the Sponsor or any other Person that owns, directly or indirectly, 100% of the outstanding voting securities of the Sponsor. 6 "Responsible Officer" means, with respect to the Property Trustee, any vice-president, any assistant vice-president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, any trust officer or assistant trust officer or any other officer in the Corporate Trust Services Division of the Property 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. "Rule 3a-5" means Rule 3a-5 under the Investment Company Act. "Securities Act" means the Securities Act of 1933, as amended from time to time, or any successor legislation. "66-2/3% in liquidation amount of the Trust Securities" means, except as provided in the terms of the Preferred Securities and by the Trust Indenture Act, Holders of outstanding Trust Securities voting together as a single class or, as the context may require, Holders of outstanding Preferred Securities or Holder(s) of outstanding Common Securities voting separately as a class, representing at least 66-2/3% of the aggregate liquidation amount (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) of all outstanding Trust Securities of the relevant class. "Special Event" has the meaning set forth in Exhibit A. "Sponsor" means Great Western Financial Corporation, a Delaware corporation, or any successor entity in a merger, consolidation or amalgamation, in its capacity as sponsor of the Trust. "Tax Event" has the meaning set forth in Exhibit A. "10% in liquidation amount of the Trust Securities" means, except as provided in the terms of the Trust Securities or by the Trust Indenture Act, Holders of outstanding Trust Securities voting together as a single class or, as the context may require, Holders of outstanding Preferred Securities or Holders of outstanding Common Securities, voting separately as a class, representing at least 10% of the aggregate liquidation amount (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) of all outstanding Trust Securities of the relevant class. "Treasury Regulations" means the income tax regulations, including temporary and proposed regulations, promulgated under 7 the Code by the United States Treasury, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations). "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 references herein to a Trustee or the Trustees shall refer to such Person or Persons solely in their capacity as trustees hereunder. "Trust Indenture Act" means the Trust Indenture Act of 1939 as in effect at the date as of which this instrument was executed, provided, however, that in -------- ------- the event the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. "Trust Securities" means collectively the Common Securities and the Preferred Securities. ARTICLE II Trust Indenture Act Section 2.1 Trust Indenture Act; Application. -------------------------------- (a) This Declaration is subject to the provisions of the Trust Indenture Act that are required to be part of this Declaration and shall, to the extent applicable, be governed by such provisions. (b) The Property Trustee shall be the only Trustee which is a Trustee for the purposes of the Trust Indenture Act. (c) If and to the extent that any provision of this Declaration limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such duties imposed by the Trust Indenture Act shall control. (d) The application of the Trust Indenture Act to this Declaration shall not affect the nature of the Trust Securities as equity securities representing undivided beneficial interests in the assets of the Trust. Section 2.2 Lists of Holders of Trust Securities. ------------------------------------ (a) Each of the Sponsor and the Regular Trustees on behalf of the Trust shall provide the Property Trustee (i) within 14 days after each record date for payment 8 of Distributions, a list, in such form as the Property Trustee may reasonably require, of the names and addresses of the Holders of the Trust Securities ("List of Holders") as of such record date, provided -------- that none of the Sponsor or the Regular Trustees on behalf of the ---- Trust shall 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 Property Trustee by the Sponsor and the Regular Trustees on behalf of the Trust, and (ii) at any other time, within 30 days of receipt by the Trust 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 Property Trustee. The Property Trustee shall preserve, in as current a form as is reasonably practicable, all information contained in Lists of Holders given to it or which it receives in the capacity as Paying Agent (if acting in such capacity) provided that the Property Trustee may destroy any List of Holders -------- ---- previously given to it on receipt of a new List of Holders. (b) The Property Trustee shall comply with the obligations of an indenture trustee under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act. Section 2.3 Reports by the Property Trustee. ------------------------------- Within 60 days after of each year, the Property Trustee shall --------- provide to the Holders of the Preferred Securities 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 Property Trustee shall also comply with the requirements of Section 313(d) of the Trust Indenture Act. Section 2.4 Periodic Reports to Property Trustee. ------------------------------------ Each of the Sponsor and the Regular Trustees on behalf of the Trust shall provide to the Property 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. Section 2.5 Evidence of Compliance with Conditions Precedent. ------------------------------------------------ Each of the Sponsor and the Regular Trustees on behalf of the Trust shall provide to the Property Trustee such evidence of compliance with any conditions precedent, if any, provided for in this Declaration that relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or 9 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. ------------------------- (a) The Holders of a Majority in liquidation amount of Preferred Securities may, by vote, on behalf of the Holders of all of the Preferred Securities, waive any past Event of Default in respect of the Preferred Securities and its consequences, provided that, if the underlying Event of Default under the Indenture: (i) is not waivable under the Indenture, the Event of Default under the Declaration shall also not be waivable; or (ii) requires the consent or vote of all or a Super-Majority of the holders of the Notes to be waived under the Indenture, the Event of Default under the Declaration may only be waived by the vote of all of the Holders of the Preferred Securities or such proportion thereof in liquidation amount as represents the relevant Super-Majority of the aggregate principal amount of the Notes outstanding, as applicable. Upon such waiver, any such default shall cease to exist, and any Event of Default with respect to the Preferred Securities arising therefrom shall be deemed to have been cured, for every purpose of this Declaration, but no such waiver shall extend to any subsequent or other default or an Event of Default with respect to the Preferred Securities or impair any right consequent thereon. Any waiver by the Holders of the Preferred Securities of an Event of Default with respect to the Preferred Securities shall also be deemed to constitute a waiver by the Holders of the Common Securities of any such Event of Default with respect to the Common Securities for all purposes of this Declaration without any further act, vote, or consent of the Holders of the Common Securities. (b) The Holders of a Majority in liquidation amount of the Common Securities may, by vote, on behalf of the Holders of all of the Common Securities, waive any past Event of Default with respect to the Common Securities and its consequences, provided that, if the underlying -------- ---- Event of Default under the Indenture: (i) Which is not waivable under the Indenture, except where the Holders of the Common Securities are deemed to have waived such Event of Default under the Declaration as provided below in this Section 10 2.6(b), the Event of Default under the Declaration shall also not be waivable; or (ii) which requires the consent or vote of a Super-Majority to be waived, except where the Holders of the Common Securities are deemed to have waived such Event of Default under the Declaration as provided below in this Section 2.6(b), the Event of Default under the Declaration may only be waived by the vote of the Holders of at least the proportion in liquidation amount of the Preferred Securities as represents the relevant Super-Majority of the aggregate principal amount of the Notes outstanding; provided that, each Holder of Common Securities will be deemed to have -------- ---- waived any such Event of Default and all Events of Default with respect to the Common Securities and its consequences until all Events of Default with respect to the Preferred Securities have been cured, waived or otherwise eliminated, and until such Events of Default have been so cured, waived or otherwise eliminated, the Property Trustee will be deemed to be acting solely on behalf of the Holders of the Preferred Securities and only the Holders of the Preferred Securities will have the right to direct the Property Trustee in accordance with the terms of the Trust Securities. Subject to the foregoing provisions of this Section 2.6(b), upon such waiver, any such default shall cease to exist and any Event of Default with respect to the Common Securities arising therefrom shall be deemed to have been cured for every purpose of this Declaration but no such waiver shall extend to any subsequent or other default or Event of Default with respect to the Common Securities or impair any right consequent thereon. (c) A waiver of an Event of Default under the Indenture by the Property Trustee at the direction of the Holders of the Preferred Securities, constitutes a waiver of the corresponding Event of Default under this Declaration. Section 2.7 Event of Default; Notice. ------------------------ (a) The Property Trustee shall, within 90 days after the occurrence of an Event of Default, transmit by mail, first class postage prepaid, to the Holders of the Trust Securities, notices of all defaults with respect to the Trust Securities known to the Property Trustee, unless such defaults have been cured before the giving of such notice (the term "defaults" for the purposes of this Section 2.7(a) being hereby defined to be an Event of Default as defined in the Indenture, not including 11 any periods of grace provided for therein and irrespective of the giving of any notice provided therein; provided that, except for a -------- ---- default in the payment of principal of (or premium, if any) or interest on any of the Notes or in the payment of any sinking fund installment established for the Notes, the Property 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 Officers of the Property Trustee in good faith determines that the withholding of such notice is in the interests of the Holders of the Trust Securities. (b) The Property Trustee shall not be deemed to have knowledge of any default except: (i) a default under Sections 501(1) and 501(2) of the Indenture; or (ii) any default as to which the Property Trustee shall have received written notice or a Responsible Officer charged with the administration of the Declaration shall have obtained written notice. ARTICLE III Organization Section 3.1 Name. ---- The Trust is named "Great Western Financial Trust I", as such name may be modified from time to time by the Regular Trustees following written notice to the Holders of Trust Securities. The Trust's activities may be conducted under the name of the Trust or any other name deemed advisable by the Regular Trustees. Section 3.2 Office. ------ The address of the principal office of the Trust is c/o Great Western Financial Corporation, 9200 Oakdale Avenue, Chatsworth, California 91311. On ten Business Days written notice to the Holders of Trust Securities, the Regular Trustees may designate another principal office. Section 3.3 Purpose. ------- The exclusive purposes and functions of the Trust are (a) to issue and sell Trust Securities and use the proceeds from such sale to acquire the Notes and (b) except as otherwise limited herein, to engage in only those other activities necessary, or incident thereto. The Trust shall not borrow money, issue debt 12 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 3.4 Authority. --------- Subject to the limitations provided in this Declaration and to the specific duties of the Property Trustee, the Regular Trustees shall have exclusive and complete authority to carry out the purposes of the Trust. An action taken by the Regular Trustees in accordance with their powers shall constitute the act of and serve to bind the Trust and an action taken by the Property Trustee in accordance with its powers shall constitute the act of and serve to bind the Trust. In dealing with the Trustees acting on behalf of the Trust, no Person shall be required to inquire into the authority of the Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely conclusively on the power and authority of the Trustees as set forth in this Declaration. Section 3.5 Title to Property of the Trust. ------------------------------ Except as provided in Section 3.8 with respect to the Notes and the Property Trustee Account or as otherwise provided in this Declaration, legal title to all assets of the Trust shall be vested in the Trust. The Holders shall not have legal title to any part of the assets of the Trust, but shall have an undivided beneficial interest in the assets of the Trust. Section 3.6 Powers and Duties of the Regular Trustees. ----------------------------------------- The Regular Trustees shall have the exclusive power, duty and authority to cause the Trust to engage in the following activities: (a) to issue and sell the Preferred Securities and the Common Securities in accordance with this Declaration; provided, however, that the Trust -------- ------- may issue no more than one series of Preferred 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 Trust Securities, and the issuance of Trust Securities shall be limited to a one-time, simultaneous issuance of both Preferred Securities and Common Securities on the Closing Date; (b) in connection with the issue and sale of the Preferred Securities, at the direction of the Sponsor, to: 13 (i) execute and file with the Commission the Registration Statement on Form S-3 prepared by the Sponsor, including any amendments thereto, pertaining to the Preferred Securities; (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 Preferred Securities in any State in which the Sponsor has determined to qualify or register such Preferred Securities for sale; (iii) execute and file an application, prepared by the Sponsor, to the New York Stock Exchange or any other national stock exchange or the NASDAQ National Market System for listing upon notice of issuance of any Preferred Securities; (iv) execute and file with the Commission a registration statement on Form 8-A, including any amendments thereto, prepared by the Sponsor relating to the registration of the Preferred Securities under Section 12(b) of the Exchange Act; and (v) execute and enter into the Purchase Agreement providing for the sale of the Preferred Securities; (c) to acquire the Notes with the proceeds of the sale of the Preferred Securities and the Common Securities; provided, however, that the -------- ------- Regular Trustee shall cause legal title to the Notes to be held of record in the name of the Property Trustee for the benefit of the Holders of the Preferred Securities and the Holders of Common Securities; (d) to give the Sponsor and the Property Trustee prompt written notice of the occurrence of a Special Event; provided that the Regular Trustees -------- ---- shall consult with the Sponsor and the Property Trustee before taking or refraining from taking any Ministerial Action in relation to a Special Event; (e) to establish a record date with respect to all actions to be taken hereunder that require a record date be established, including and with respect to, for the purposes of Section 316(c) of the Trust Indenture Act, Distributions, voting rights, redemptions and exchanges, and to issue relevant notices to the Holders of Preferred Securities and Holders of Common 14 Securities as to such actions and applicable record dates; (f) to take all actions and perform such duties as may be required of the Regular Trustees pursuant to the terms of the Trust Securities; (g) to bring or defend, pay, collect, compromise, arbitrate, resort to legal action, or otherwise adjust claims or demands of or against the Trust ("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee has the exclusive power to bring such Legal Action; (h) to employ or otherwise engage employees and agents (who may be designated as officers with titles) and managers, contractors, advisors, and consultants and pay reasonable compensation for such services; (i) to cause the Trust to comply with the Trust's obligations under the Trust Indenture Act; (j) to give the certificate required by Section 314(a)(4) of the Trust Indenture Act to the Property Trustee, which certificate may be executed by a Regular Trustee; (k) to incur expenses that are necessary or incidental to carry out any of the purposes of the Trust; (l) to act as, or appoint another Person to act as, registrar and transfer agent for the Trust Securities; (m) to give prompt written notice to the Holders of the Trust Securities of any notice received from the Note Issuer of its election (i) to defer payments of interest on the Notes by extending the interest payment period under the Indenture or, (ii) to extend the scheduled maturity date on the Notes; (n) 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; (o) to take all action that may be necessary or appropriate for the preservation and the continuation of the Trust's valid existence, rights, franchises and privileges as a statutory business trust under the laws of the State of Delaware and of each other jurisdiction in which such existence is necessary to protect the limited liability of the Holders of the Trust Securities or to enable the Trust to effect the purposes for which the Trust was created; 15 (p) to take any action, not inconsistent with this Declaration or with applicable law, that the Regular Trustees determine in their discretion to be necessary or desirable in carrying out the activities of the Trust as set out in this Section 3.6, including, but not limited to: (i) causing the Trust not to be deemed to be an Investment Company required to be registered under the Investment Company Act; (ii) causing the Trust to be classified for United States federal income tax as a grantor trust; and (iii) cooperating with the Note Issuer to ensure that the Notes will be treated as indebtedness of the Note Issuer for United States federal income tax purposes, provided that such action does not adversely affect the interests of -------- ---- Holders of the Preferred Securities; and (q) to take all action necessary to cause all applicable tax returns and tax information reports that are required to be filed with respect to the Trust to be duly prepared and filed by the Regular Trustees, on behalf of the Trust. The Regular Trustees must exercise the powers set forth in this Section 3.6 in a manner that is consistent with the purposes and functions of the Trust set out in Section 3.3, and the Regular Trustees shall not take, or cause or permit the Trust to take, any action that is inconsistent with the purposes and functions of the Trust set forth in Section 3.3. Subject to this Section 3.6, the Regular Trustees shall have none of the powers or the authority of the Property Trustee set forth in Section 3.8. Section 3.7 Prohibition of Actions by the Trust and the Trustees ---------------------------------------------------- (a) The Trust shall not, and the Trustees (including the Property Trustee) shall not, engage in any activity other than as required or authorized by this Declaration. In particular, the Trust shall not and the Trustees (including the Property Trustee) shall cause the Trust not to: (i) invest any proceeds received by the Trust from holding the Notes, but shall distribute all such proceeds to Holders of Trust Securities pursuant 16 to the terms of this Declaration and of the Trust Securities; (ii) acquire any assets other than as expressly provided herein; (iii) possess Trust property for other than a Trust purpose; (iv) make any loans or incur any indebtedness other than loans represented by the Notes; (v) possess any power or otherwise act in such a way as to vary the Trust assets or the terms of the Trust Securities in any way whatsoever; (vi) issue any securities or other evidences of beneficial ownership of, or beneficial interest in, the Trust other than the Trust Securities; or (vii) (A) direct the time, method and place of exercising any trust or power conferred upon the Note Trustee with respect to the Notes, (B) waive any past default that is waivable under Section 513 of the Indenture, (C) exercise any right to rescind or annul any declaration that the principal of all the Notes shall be due and payable or (D) consent to any amendment, modification or termination of the Indenture or the Notes where such consent shall be required unless the Trust shall have received an opinion of independent counsel experienced in such matters to the effect that such action will not cause more than an insubstantial risk that for United States federal income tax purposes the Trust will not be classified as a grantor trust. Section 3.8 Powers and Duties of the Property Trustee. ----------------------------------------- (a) The legal title to the Notes shall be owned by and held of record in the name of the Property Trustee in trust for the benefit of the Holders of the Trust Securities. The right, title and interest of the Property Trustee to the Notes shall vest automatically in each Person who may hereafter be appointed as Property Trustee in accordance with Section 5.6. Such vesting and cessation of title shall be effective whether or not conveyancing documents with regard to the Notes have been executed and delivered. (b) The Property Trustee shall not transfer its right, title and interest in the Notes to the Regular Trustees 17 or to the Delaware Trustee (if the Property Trustee does not also act as Delaware Trustee). (c) The Property Trustee shall: (i) establish and maintain a segregated non-interest bearing trust account (the "Property Trustee Account") in the name of and under the exclusive control of the Property Trustee on behalf of the Holders of the Trust Securities and, upon the receipt of payments of funds made in respect of the Notes held by the Property Trustee, deposit such funds into the Property Trustee Account and make payments to the Holders of the Preferred Securities and Holders of the Common Securities from the Property Trustee Account in accordance with Section 6.1. Funds in the Property Trustee Account shall be held uninvested until disbursed in accordance with this Declaration. The Property Trustee Account shall be an account that is maintained with a banking institution the rating on whose long term unsecured indebtedness is at least equal to the then outstanding rating assigned to the Preferred Securities by a "nationally recognized statistical rating organization", as that term is defined for purposes of Rule 436(g)(2) under the Securities Act; (ii) engage in such ministerial activities as shall be necessary or appropriate to effect the redemption of the Preferred Securities and the Common Securities to the extent the Notes are redeemed or mature; and (iii) upon notice of distribution issued by the Regular Trustees in accordance with the terms of the Preferred Securities and forms of the Common Securities, engage in such ministerial activities as shall be necessary or appropriate to effect the distribution of the Notes to Holders of Trust Securities in accordance with such Holders' interests therein upon the occurrence of certain special events (as may be defined in the terms of the Trust Securities) arising from a change in law or a change in legal interpretation or other specified circumstances pursuant to the terms of the Trust Securities. (d) The Property Trustee shall take all actions and perform such duties as may be specifically required of the Property Trustee pursuant to the terms of the Trust Securities. 18 (e) The Property Trustee shall take any Legal Action which arises out of or in connection with an Event of Default or the Property Trustee's duties and obligations under this Declaration or the Trust Indenture Act. (f) The Property Trustee shall not resign as a Trustee unless either: (i) the Trust has been completely liquidated and the proceeds of the liquidation distributed to the Holders of Trust Securities pursuant to the terms of the Trust Securities; or (ii) a Successor Property Trustee has been appointed and has accepted that appointment in accordance with Section 5.6. (g) The Property Trustee shall have the legal power to exercise all of the rights, powers and privileges of a holder of Notes under the Indenture and, if an Event of Default occurs and is continuing, the Property Trustee shall, for the benefit of Holders of the Trust Securities, enforce its rights as holder of the Notes subject to the rights of the Holders pursuant to the terms of such Trust Securities. (h) The Property Trustee may authorize one or more Persons (each, a "Paying Agent") to pay Distributions, redemption payments or liquidation payments on behalf of the Trust with respect to all Trust Securities and any such Paying Agent shall comply with Section 317(b) of the Trust Indenture Act. Any Paying Agent may be removed by the Property Trustee at any time and a successor Paying Agent or additional Paying Agents may be appointed at any time by the Property Trustee. (i) Subject to this Section 3.8, the Property Trustee shall have none of the duties, liabilities, powers or the authority of the Regular Trustees set forth in Section 3.6. The Property Trustee must exercise the powers set forth in this Section 3.8 in a manner that is consistent with the purposes and functions of the Trust set out in Section 3.3, and the Property Trustee shall not take any action that is inconsistent with the purposes and functions of the Trust set out in Sections 3.3 and 3.7. Section 3.9 Certain Duties and Responsibilities of the Property Trustee. ----------------------------------------------------------- 19 (a) The Property 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 Declaration and no implied covenants shall be read into this Declaration against the Property Trustee. In case an Event of Default has occurred (that has not been cured or waived pursuant to Section 2.6), the Property Trustee shall exercise such of the rights and powers vested in it by this Declaration, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (b) No provision of this Declaration shall be construed to relieve the Property 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 an 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 Property Trustee shall be determined solely by the express provisions of this Declaration and the Property Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Declaration, and no implied covenants or obligations shall be read into this Declaration against the Property Trustee; and (B) in the absence of bad faith on the part of the Property Trustee, the Property 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 Property Trustee and conforming to the requirements of this Declaration; but in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Property Trustee, the Property Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Declaration; (ii) the Property Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Property Trustee, 20 unless it shall be proved that the Property Trustee was negligent in ascertaining the pertinent facts; (iii) the Property 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 not less than a Majority in liquidation amount of the Trust Securities at the time outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Property Trustee, or exercising any trust or power conferred upon the Property Trustee under this Declaration; (iv) no provision of this Declaration shall require the Property 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 it 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 Declaration or adequate indemnity against such risk or liability is not reasonably assured to it; (v) the Property Trustee's sole duty with respect to the custody, safekeeping and physical preservation of the Notes and the Property Trustee Account shall be to deal with such property in a similar manner as the Property Trustee deals with similar property for its own account, subject to the protections and limitations on liability afforded to the Property Trustee under this Declaration and the Trust Indenture Act; (vi) the Property Trustee shall have no duty or liability for or with respect to the value, genuineness, existence or sufficiency of the Notes or the payment of any taxes or assessments levied thereon or in connection therewith; (vii) the Property Trustee shall not be liable for any interest on any money received by it except as it may otherwise agree with the Sponsor. Money held by the Property Trustee need not be segregated from other funds held by it except in relation to the Property Trustee Account maintained by the Property Trustee pursuant to Section 3.8(c)(i) and except to the extent otherwise required by law; and 21 (viii) the Property Trustee shall not be responsible for monitoring the compliance by the Regular Trustees or the Sponsor with their respective duties under this Declaration, nor shall the Property Trustee be liable for the default or misconduct of the Regular Trustees or the Sponsor. Section 3.10 Certain Rights of Property Trustee. ---------------------------------- (a) Subject to the provisions of Section 3.9: (i) the Property Trustee may 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 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 Sponsor or the Regular Trustees contemplated by this Declaration shall be sufficiently evidenced by a Direction or an Officers' Certificate; (iii) whenever in the administration of this Declaration, the Property Trustee shall deem it desirable that a matter be proved or established before taking, suffering or omitting any action hereunder, the Property Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part request and rely upon an Officers' Certificate which, upon receipt of such request, shall be promptly delivered by the Sponsor or the Regular Trustees; (iv) the Property Trustee shall have no duty to see to any recording, filing or registration of any instrument (including any financing or continuation statement or any filing under tax or securities laws) (or any rerecording, refiling or registration thereof); (v) the Property Trustee may consult with counsel or other experts and the advice or opinion of such counsel and experts with respect to legal matters or advice within the scope of such experts' area of expertise 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. Except as otherwise specified herein, 22 such counsel may be counsel to the Sponsor or any of its Affiliates, and may include any of its employees. The Property Trustee shall have the right at any time to seek instructions concerning the administration of this Declaration from any court of competent jurisdiction; (vi) the Property Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Declaration at the request or direction of any Holder, unless such Holder shall have provided to the Property Trustee adequate security and indemnity, which would satisfy a reasonable person in the position of the Property Trustee, against the costs, expenses (including attorneys' fees and expenses) 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 Property Trustee provided, that, nothing contained in this Section 3.10(a)(vi) shall be taken to relieve the Property Trustee, upon the occurrence of an Event of Default, of its obligation to exercise the rights and powers vested in it by this Declaration; (vii) the Property 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 Property Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit; (viii) the Property Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Property 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 Property Trustee or its agents hereunder shall bind the Trust and the Holders of the Trust Securities, and the signature of the Property Trustee or its agents alone shall be sufficient and effective to perform any such action and no third party shall be required to inquire as to the authority of the Property Trustee to so act or as to its compliance with any of the terms and provisions of this Declaration, 23 both of which shall be conclusively evidenced by the Property Trustee's or its agent's taking such action; (x) whenever in the administration of this Declaration the Property Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder the Property Trustee (i) may request instructions from the Holders of the Trust Securities which instructions may only be given by the Holders of the same proportion in liquidation amount of the Trust Securities as would be entitled to direct the Property Trustee under the terms of the Trust Securities in respect of such remedy, right or action, (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 acting in accordance with such instructions; and (xi) except as otherwise expressly provided by this Declaration, the Property Trustee shall not be under any obligation to take any action that is discretionary under the provisions of this Declaration. (b) No provision of this Declaration shall be deemed to impose any duty or obligation on the Property 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 Property 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 Property Trustee shall be construed to be a duty. Section 3.11 Delaware Trustee. ---------------- Notwithstanding any other provision of this Declaration other than Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers, nor shall the Delaware Trustee have any of the duties and responsibilities of the Regular Trustees or the Property Trustee described in this Declaration. Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for the sole and limited purpose of fulfilling the requirements of Section 3807 of the Business Trust Act. 24 Section 3.12 Execution of Documents. ---------------------- Unless otherwise determined by the Regular Trustees, and except as otherwise required by the Business Trust Act, a majority of or, if there are only two, both of the Regular Trustees are authorized to execute on behalf of the Trust any documents that the Regular Trustees have the power and authority to execute pursuant to Section 3.6; provided that, any listing application prepared by the Sponsor referred to in Section 3.6(b)(iii) may be executed by one Regular Trustee. Section 3.13 Not Responsible for Recitals or Issuance of Trust ------------------------------------------------- Securities. ---------- The recitals contained in this Declaration and the Trust Securities 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 or the Trust Securities. Section 3.14 Duration of Trust. ----------------- The Trust, unless terminated pursuant to the provisions of Article VIII hereof, shall have existence for 55 years from the Closing Date. Section 3.15 Mergers. ------- (a) The Trust may not consolidate, amalgamate, merge with or into, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to any corporation or other body, except as described in Section 3.15(b) and (c). (b) The Trust may, with the consent of a majority of the Regular Trustees and without the consent of the Holders of the Trust Securities, the Delaware Trustee or the Property Trustee, consolidate, amalgamate, merge with or into, convey, transfer or lease its properties and assets substantially as an entirety to, or be replaced by a trust organized as such under the laws of any State; provided that: -------- ---- (i) such successor entity (the "Successor Entity") either: (A) expressly assumes all of the obligations of the Trust under 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 25 Securities rank the same as the Preferred Securities rank with respect to Distributions and payments upon liquidation, redemption and maturity; (ii) the Note Issuer expressly acknowledges a trustee of the Successor Entity that possesses the same powers and duties as the Property Trustee as the holder of the Notes; (iii) the Preferred Securities or any Successor Securities are listed, or any Successor Securities will be listed upon notification of issuance, on any national securities exchange, the NASDAQ National Market System or other organization on which the Preferred Securities are then listed or quoted; (iv) such merger, consolidation, amalgamation or replacement does not cause the Preferred Securities (including any Successor Securities) to be downgraded by any nationally recognized statistical rating organization; (v) such merger, consolidation, amalgamation or replacement does not adversely affect the rights, preferences and privileges of the Holders of the Trust Securities (including any Successor Securities) in any material respect (other than with respect to any dilution of the Holders' interest in the new entity); (vi) such successor entity has a purpose identical to that of the Trust; (vii) prior to such merger, consolidation, amalgamation or replacement, the Sponsor has received an opinion of independent counsel to the Trust experienced in such matters to the effect that: (A) such merger, consolidation, amalgamation or replacement does not adversely affect the rights, preferences and privileges of the Holders of the Trust Securities (including any Successor Securities) in any material respect (other than with respect to any dilution of the Holders' interest in the new equity); and (B) following such merger, consolidation, amalgamation or replacement, neither the Trust nor the Successor Entity will be 26 required to register as an Investment Company; and (viii) the Sponsor guarantees the obligations of such Successor Entity under the Successor Securities at least to the extent provided by the Guarantees. (c) Notwithstanding Section 3.15(b), the Trust shall, except with the consent of Holders of 100% in liquidation amount of the Trust Securities, not consolidate, amalgamate, merge with or into, or be replaced by any other entity or permit any other entity to consolidate, amalgamate, merge with or into, or replace it if such consolidation, amalgamation, merger or replacement would cause the Trust or Successor Entity for United States federal income tax purposes not to be classified as a grantor trust. ARTICLE IV Sponsor Section 4.1 Sponsor's Purchase of Common Securities. --------------------------------------- On the Closing Date the Sponsor will purchase all the Common Securities issued by the Trust, in an amount equal to 3% of the capital of the Trust, at the same time as the Preferred Securities are sold. Section 4.2 Responsibilities of the Sponsor. ------------------------------- In connection with the issue and sale of the Preferred Securities, the Sponsor shall have the exclusive right and responsibility to engage in the following activities: (a) to prepare for filing by the Trust with the Commission a Registration Statement on Form S-3 in relation to the Preferred Securities, including any amendments thereto; (b) to determine the States in which to take appropriate action to qualify or register for sale all or part of the Preferred Securities and to do any and 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 order to comply with the applicable laws of any such States; (c) to prepare for filing by the Trust an application to the New York Stock Exchange or any other national stock exchange or the NASDAQ National Market System for 27 listing upon notice of issuance of any Preferred Securities; (d) to prepare for filing by the Trust with the Commission a registration statement on Form 8-A relating to the registration of the Preferred Securities under Section 12(b) of the Exchange Act, including any amendments thereto; and (e) to negotiate the terms of the Purchase Agreement providing for the sale of the Preferred Securities. ARTICLE V Trustees Section 5.1 Number of Trustees. ------------------ The number of Trustees shall initially be five (5), and: (a) at any time before the issuance of any Trust Securities, the Sponsor may, by written instrument, increase or decrease the number of Trustees; and (b) after the issuance of any Trust Securities the number of Trustees may be increased or decreased by vote of the Holders of a Majority in liquidation amount of the Common Securities voting as a class at a meeting of the Holders of the Common Securities. Section 5.2 Delaware Trustee. ---------------- If required by the Business Trust Act, one Trustee (the "Delaware Trustee") shall be: (a) a natural person who is a resident of the State of Delaware; or (b) if not a natural person, an entity which has its principal place of business in the State of Delaware, and otherwise meets the requirements of applicable law, provided that, if the Property Trustee has its principal place of business in - -------- ---- the State of Delaware and otherwise meets the requirements of applicable law, then the Property Trustee shall also be the Delaware Trustee and Section 3.11 shall have no application. Section 5.3 Property Trustee; Eligibility. ----------------------------- (a) There shall at all times be one Trustee which shall act as Property Trustee which shall: 28 (i) not be an Affiliate of the Sponsor; (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 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 5.3(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. (b) If at any time the Property Trustee shall cease to be eligible to so act under Section 5.3(a), the Property Trustee shall immediately resign in the manner and with the effect set forth in Section 5.6(c). (c) If the Property Trustee has or shall acquire any "conflicting interest" within the meaning of Section 310(b) of the Trust Indenture Act, the Property Trustee and the Holder of the Common Securities (as if it were the obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act. (d) The Preferred Securities Guarantee shall be deemed to be specifically described in this Declaration for purposes of clause (i) of the first provision contained in Section 310(b) of the Trust Indenture Act. Section 5.4 Qualifications of Regular Trustees and Delaware ----------------------------------------------- Trustee Generally. ----------------- Each Regular Trustee and the Delaware Trustee (unless the Property Trustee also acts as Delaware Trustee) shall be either a natural person who is at least 21 years of age or a legal entity that shall act through one or more Authorized Officers. 29 Section 5.5 Initial Trustees. The initial Regular Trustees shall be: Carl F. Geuther J. Lance Erikson Bruce F. Antenberg Great Western Financial Corporation 9200 Oakdale Avenue Chatsworth, California 91311 The initial Delaware Trustee shall be: Michael J. Majchrzak FCC National Bank 300 King Street Wilmington, Delaware 19801 The Initial Property Trustee shall be: The First National Bank of Chicago One First National Plaza Suite 0126 Chicago, Illinois 60670-0126 Attention: Section 5.6 Appointment, Removal and Resignation of Trustees. ------------------------------------------------ (a) Subject to Section 5.6(b), Trustees may be appointed or removed without cause at any time: (i) until the issuance of any securities, by written instrument executed by the Sponsor; and (ii) after the issuance of any Trust Securities by vote of the Holders of a Majority in liquidation amount of the Common Securities voting as a class at a meeting of the Holders of the Common Securities; and (b) (i) The Trustee that acts as Property Trustee shall not be removed in accordance with Section 5.6(a) until a Successor Property Trustee has been appointed and has accepted such appointment by written instrument executed by such Successor Property Trustee and delivered to the Regular Trustees and the Sponsor; and (ii) the Trustee that acts as Delaware Trustee shall not be removed in accordance with this Section 5.6(a) until a successor Trustee possessing the qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a "Successor Delaware Trustee") has been appointed and has 30 accepted such appointment by written instrument executed by such Successor Delaware Trustee and delivered to the Regular Trustees and the Sponsor. (c) A Trustee appointed to office shall hold office until his successor shall have been appointed or until his death, removal or resignation. Any Trustee may resign from office (without need for prior or subsequent accounting) by any instrument in writing signed by the Trustee and delivered to the Sponsor and the Trust, which resignation shall take effect upon such delivery or upon such later date as is specified therein; provided, however, that: -------- ------- (i) No such resignation of the Trustee that acts as the Property Trustee shall be effective: (A) until a Successor Property Trustee has been appointed and has accepted such appointment by instrument executed by such Successor Property Trustee and delivered to the Trust, the Sponsor and the resigning Property Trustee; or (B) until the assets of the Trust have been completely liquidated and the proceeds thereof distributed to the Holders of the Trust Securities; and (ii) no such resignation of the Trustee that acts as the Delaware Trustee shall be effective until a Successor Delaware Trustee has been appointed and has accepted such appointment by instrument executed by such Successor Delaware Trustee and delivered to the Trust, the Sponsor and the resigning Delaware Trustee. (d) The Holders of the Common Securities shall use their best efforts to promptly appoint a Successor Delaware Trustee or Successor Property Trustee as the case may be as the Property Trustee or the Delaware Trustee delivers an instrument of resignation in accordance with this Section 5.6. (e) If no Successor Property Trustee or Successor Delaware Trustee shall have been appointed and accepted appointment as provided in this Section 5.6 within 60 days after delivery to the Sponsor and the Trust of an instrument of resignation, the resigning Property Trustee or Delaware Trustee, as applicable, may petition any court of competent jurisdiction for appointment of a Successor Property Trustee or Successor Delaware Trustee. Such court may thereupon, 31 after prescribing such notice, if any, as it may deem proper, appoint a Successor Property Trustee or Successor Delaware Trustee, as the case may be. Section 5.7 Vacancies Among Trustees. ------------------------ If a Trustee ceases to hold office for any reason and the number of Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A resolution certifying the existence of such vacancy by a majority of the Regular Trustees shall be conclusive evidence of the existence of such vacancy. The vacancy shall be filled with a Trustee appointed in accordance with Section 5.6. Section 5.8 Effect of Vacancies. ------------------- The death, resignation, retirement, removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to perform the duties of a Trustee shall not operate to annul the Trust. Whenever a vacancy in the number of Regular Trustees shall occur, until such vacancy is filled by the appointment of a Regular Trustee in accordance with Section 5.6, the Regular Trustees in office, regardless of their number, shall have all the powers granted to the Regular Trustees and shall discharge all the duties imposed upon the Regular Trustees by this Declaration. Section 5.9 Meetings. -------- Meetings of the Regular Trustees shall be held from time to time upon the call of any Regular Trustee. Regular meetings of the Regular Trustees may be held at a time and place fixed by resolution of the Regular Trustees. Notice of any in-person meetings of the Regular Trustees shall be hand delivered or otherwise delivered in writing (including by facsimile, with a hard copy by overnight courier) not less than 48 hours before such meeting. Notice of any telephonic meetings of the Regular Trustees or any committee thereof shall be hand delivered or otherwise delivered in writing (including by facsimile, with a hard copy by overnight courier) not less than 24 hours before a meeting. Notices shall contain a brief statement of the time, place and anticipated purposes of the meeting. The presence (whether in person or by telephone) of a Regular Trustee at a meeting shall constitute a waiver of notice of such meeting except where a Regular Trustee attends a meeting for the express purpose of objecting to the transaction of any activity on the ground that the meeting has not been lawfully called or convened. Unless provided otherwise in this Declaration, any action of the Regular Trustees may be taken at a meeting by vote of a majority of the Regular Trustees present (whether in person or by telephone) and eligible to vote with respect to such matter, provided that a Quorum is present, or without a meeting by the unanimous written consent of the Regular Trustees. 32 Section 5.10 Delegation of Power. ------------------- (a) Any Regular 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 purpose of executing any documents contemplated in Section 3.6, including any registration statement or amendment thereto filled with the Commission, or making any other governmental filing; and (b) the Regular Trustees shall have power to delegate from time to time to such of their number or to officers of the Trust the doing of such things and the execution of such instruments either in the name of the Trust or the names of the Regular Trustees or otherwise as the Regular Trustees may deem expedient, to the extent such delegation is not prohibited by applicable law or contrary to the provisions of the Trust, as set forth herein. ARTICLE VI Distributions Section 6.1 Distributions. ------------- Holders shall receive Distributions in accordance with the applicable terms of the relevant Holder's Trust Securities. Distributions shall be made on the Preferred Securities and the Common Securities in accordance with the preferences set forth in their respective terms. If and to the extent that the Note Issuer makes a payment of interest (including Deferred Interest (as defined in the Indenture)), premium and principal on the Notes held by the Property Trustee (the amount of any such payment being a "Payment Amount"), the Property Trustee shall and is directed, to the extent funds are available for that purpose, to make a distribution (a "Distribution") of the Payment Amount on the next succeeding Distribution Date (as defined in Exhibit A) to Holders of record in accordance with the terms of the Trust Securities. ARTICLE VII Issuance of Trust Securities Section 7.1 General Provisions Regarding Trust Securities. --------------------------------------------- (a) The Regular Trustees shall on behalf of the Trust issue one class of preferred securities representing undivided beneficial interests in the assets of the Trust having such terms as are set forth in Exhibit A (the "Preferred Securities") and one class of common securities representing undivided beneficial interests 33 in the assets of the Trust having such terms as are set forth in Exhibit A (the "Common Securities"). The Preferred Securities shall represent a 97% ownership interest in the Trust and the Common Securities shall represent a 3% interest in the Trust. The Trust shall have no securities or other interests in the assets of the Trust other than the Preferred Securities and the Common Securities. (b) The Certificates shall be signed on behalf of the Trust by the Regular Trustees (or if there are more than two Regular Trustees by any two of the Regular Trustees). Such signatures may be the manual or facsimile signatures of the present or any future Regular Trustee. Typographical and other minor errors or defects in any such reproduction of any such signature shall not affect the validity of any Certificate. In case any Regular Trustee of the Trust who shall have signed any of the Trust Securities shall cease to be such Regular Trustee before the Certificates so signed shall be delivered by the Trust, such Certificates nevertheless may be delivered as though the person who signed such Certificates had not ceased to be such Regular Trustee; and any Certificate may be signed on behalf of the Trust by such persons who, at the actual date of execution of such Trust Security, shall be the Regular Trustees of the Trust, although at the date of the execution and delivery of the Declaration any such person was not such a Regular Trustee. Certificates shall be printed, lithographed or engraved or may be produced in any other manner as is reasonably acceptable to the Regular Trustees, as evidenced by their execution thereof, and may have such letters, numbers or other marks or identification or designation and such legends or endorsements as the Regular Trustees may deem appropriate, or as may be required to comply with any law or with any rule or regulation of any stock exchange on which Trust Securities may be listed, or to conform to usage. (c) The consideration received by the Trustee for the issuance of the Trust Securities shall constitute a contribution to the capital of the Trust and shall not constitute a loan to the Trust. (d) Upon issuance of the Trust Securities as provided in this Declaration, the Trust Securities so issued shall be deemed to be validly issued, fully paid and non-assessable. (e) Every Person, by virtue of having become a Holder or a Preferred Security Beneficial Owner in accordance with the terms of this Declaration, shall be deemed to have 34 expressly assented and agreed to the terms of, and shall be bound by, this Declaration. ARTICLE VIII Termination Section 8.1 Termination of Trust. -------------------- (a) The Trust shall terminate: (i) upon the bankruptcy of the Holder of the Common Securities or the Sponsor; (ii) upon the filing of a certificate of dissolution or its equivalent with respect to the Holder of the Common Securities or the Sponsor; the filing of a certificate of cancellation with respect to the Trust or the revocation of the Holder of the Common Securities or the Sponsor's charter and the expiration of 90 days after the date of revocation without a reinstatement thereof; (iii) upon the entry of a decree of judicial dissolution of the Holder of the Common Securities, the Sponsor or the Trust; (iv) when all of the Trust Securities shall have been called for redemption and the amounts necessary for redemption thereof shall have been paid to the Holders in accordance with the terms of the Trust Securities; (v) upon the occurrence and continuation of a Special Event or Regulatory Event pursuant to which the Trust shall have been dissolved in accordance with the terms of the Trust Securities and all of the Notes and/or Depositary Shares, as the case may be, shall have been distributed to the Holders of Trust Securities in exchange for all of the Trust Securities; (vi) before the issuance of any Trust Securities, with the consent of all of the Regular Trustees and the Sponsor; or (vii) , 2050. --------- (b) As soon as is practicable after the occurrence of an event referred to in Section 8.1(a), the Trustees shall file a certificate of cancellation with the Secretary of State of the State of Delaware. 35 (c) The provisions of Section 3.9 and Article X shall survive the termination of the Trust. ARTICLE IX Transfer of Interest Section 9.1 Transfer of Trust Securities. ---------------------------- (a) Trust Securities may only be transferred, in whole or in part, in accordance with the terms and conditions set forth in this Declaration and in the terms of the Trust Securities. Any transfer or purported transfer of any Trust Security not made in accordance with this Declaration shall be null and void. (b) Subject to this Article IX, Preferred Securities shall be freely transferable. (c) Subject to this Article IX, the Sponsor and any Related Party may only transfer Common Securities to the Sponsor or a Related Party of the Sponsor; provided that, any such transfer is subject to the conditions -------- ---- precedent that the transferor obtain the written opinion of independent counsel experienced in such matters that such transfer would not cause more than an insubstantial risk that: (i) the Trust would not be classified for United States federal income tax purposes as a grantor trust; and (ii) the Trust would be an Investment Company or the transferee would become an Investment Company. Section 9.2 Transfer of Certificates. ------------------------ The Regular Trustees shall provide for the registration of Certificates and of transfers of Certificates, which will be effected without charge but only upon payment (with such indemnity as the Regular Trustees may require) in respect of any tax or other government charges that may be imposed in relation to it. Upon surrender for registration of transfer of any Certificate, the Regular Trustees shall cause one or more new Certificates to be issued in the name of the designated transferee or transferees. Every Certificate surrendered for registration of transfer shall be accompanied by a written instrument of transfer in form satisfactory to the Regular Trustees duly executed by the Holder of such Holder's attorney duly authorized in writing. Each Certificate surrendered for registration of transfer shall be canceled by the Regular Trustees. A transferee of a Certificate shall be entitled to the rights and subject to the obligations of a Holder hereunder upon 36 the receipt by such transferee of a Certificate. By acceptance of a Certificate, each transferee shall be deemed to have agreed to be bound by this Declaration and the documents incorporated by reference herein. Section 9.3 Deemed Trust Security Holders. ----------------------------- The Trustees may treat the Person in whose name any Certificate shall be registered on the books and records of the Trust as the sole Holder of such Certificate and of the Trust Securities represented by such Certificate for purposes of receiving Distributions and for all other purposes whatsoever and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such Certificate or in the Trust Securities represented by such Certificate on the part of any Person, whether or not the Trust shall have actual or other notice thereof. Section 9.4 Book Entry Interests. -------------------- Unless otherwise specified in the terms of the Preferred Securities, the Preferred Securities Certificates, on original issuance, will be issued in the form of one or more, fully registered, global Preferred Security Certificates (each a "Global Certificate"), to be delivered to DTC, the initial Depositary, by, or on behalf of, the Trust. Such Global Certificates shall initially be registered on the books and records of the Trust in the name of Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner will receive a definitive Preferred Security Certificate representing such Preferred Security Beneficial Owner's interests in such Global Certificates, except as provided in Section 9.7. Unless and until definitive, fully registered Preferred Security Certificates (the "Definitive Preferred Security Certificates") have been issued to the Preferred Security Beneficial Owners pursuant to Section 9.7: (a) the provisions of this Section 9.4 shall be in full force and effect; (b) the Trust and the Trustees shall be entitled to deal with the Depositary for all purposes of this Declaration (including the payment of Distributions on the Global Certificates and receiving approvals, votes or consents hereunder) as the Holder of the Preferred Securities and the sole Holder of the Global Certificates and shall have no obligation to the Preferred Security Beneficial Owners; (c) to the extent that the provisions of this Section 9.4 conflict with any other provisions of the Declaration, the provisions of this Section 9.4 shall control; and 37 (d) the rights of the Preferred Security Beneficial Owners shall be exercised only through the Depositary and shall be limited to those established by law and agreements between such Preferred Security Beneficial Owners and the Depositary and/or the Depositary Participants and receive and transmit payments of Distributions on the Global Certificates to such Depositary Participants. DTC will make book entry transfers among the Depositary Participants. Section 9.5 Notices to Depositary. --------------------- Whenever a notice or other communication to the Preferred Security Holder is required under this Declaration, unless and until Definitive Preferred Security Certificates shall have been issued to the Preferred Security Beneficial Owners pursuant to Section 9.7 the Regular Trustees shall give all such notices and communications specified herein to be given to the Preferred Security Holders to the Depositary, and shall have no notice obligations to the Preferred Security Beneficial Owners. Section 9.6 Appointment of Successor Depositary. ----------------------------------- If any Depositary elects to discontinue its services as securities depositary with respect to the Preferred Securities, the Regular Trustees may, in their sole discretion, appoint a successor Depositary with respect to such Preferred Securities. Section 9.7 Definitive Preferred Security Certificates. ------------------------------------------ If: (a) a Depositary elects to discontinue its services as securities depositary with respect to the Preferred Securities and a successor Depositary is not appointed within 90 days after such discontinuance pursuant to Section 9.6; or (b) the Regular Trustees elect with the consent of the Sponsor to terminate the book entry system through the Depositary with respect to the Preferred Securities, then: (c) Definitive Preferred Security Certificates shall be prepared by the Regular Trustees on behalf of the Trust with respect to such Preferred Securities; and (d) upon surrender of the Global Certificates by the Depositary, accompanied by registration instructions, the Regular Trustees shall cause Definitive Certificates to be delivered to Preferred Security Beneficial Owners in accordance with the instructions of the 38 Depositary. Neither the Trustees nor the Trust shall be liable for any delay in delivery of such instructions and each of them may conclusively rely on and shall be protected in relying on, said instructions of the Depositary. The Definitive Preferred Security Certificates shall be printed, lithographed or engraved or may be produced in any other manner as is reasonably acceptable to the Regular Trustees, as evidenced by their execution thereof, and may have such letters, numbers or other marks of identification or designation and such legends or endorsements as the Regular Trustees may deem appropriate, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which Preferred Securities may be listed, or to conform to usage. Section 9.8 Mutilated, Destroyed, Lost or Stolen Certificates. ------------------------------------------------- If: (a) any mutilated Certificates should be surrendered to the Regular Trustees, or if the Regular Trustees shall receive evidence to their satisfaction of the destruction, loss or theft of any Certificate; and (b) there shall be delivered to the Regular Trustees such security or indemnity as may be required by them to keep each of them harmless. then: In the absence of notice that such Certificate shall have been acquired by a bona fide purchaser, any two Regular Trustees on behalf of the Trust shall execute and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like denomination. In connection with the issuance of any new Certificate under this Section 9.8, the Regular Trustees may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. Any duplicate Certificate issued pursuant to this Section shall constitute conclusive evidence of an ownership interest in the relevant Trust Securities, as if originally issued, whether or not the lost, stolen or destroyed Certificate shall be found at any time. 39 ARTICLE X Limitation of Liability of Holders of Trust Securities, Trustees or Others Section 10.1 Liability. --------- (a) Except as expressly set forth in this Declaration, the Preferred Securities Guarantees, the Common Securities Guarantee and the terms of the Trust Securities the Sponsor shall not be: (i) personally liable for the return of any portion of the capital contributions (or any return thereon) of the Holders of the Trust Securities which shall be made solely from assets of the Trust; and (ii) be required to pay to the Trust or to any Holder of Trust Securities any deficit upon dissolution of the Trust or otherwise. (b) The Holder of the Common Securities shall be liable for all of the debts and obligations of the Trust (other than with respect to the Trust Securities) to the extent not satisfied out of the Trust's assets. (c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders of the Preferred Securities shall be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. Section 10.2 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 gross negligence (or, in the case of the Property Trustee, 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 Trust and upon such information, opinions, reports or statements presented to the Trust by any Person as to matters the 40 Indemnified Person reasonably believes are 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 Trust Securities might properly be paid. Section 10.3 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 (other than the duties imposed on the Property Trustee under the Trust Indenture Act), 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 an Indemnified Person and any Covered Person; 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 Trust 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 this Indemnified 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. 41 (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 10.4 Indemnification. --------------- (a) To the fullest extent permitted by applicable law, the Sponsor shall indemnify and hold harmless each Indemnified Person from and against any loss, damage, liability, tax, penalty, expense or claim of any kind or nature whatsoever incurred by such Indemnified Person by reason of the creation, operation or termination of the Trust or 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 authority conferred on such Indemnified Person by this Declaration, except that no Indemnified Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Indemnified Person by reason of gross negligence (or, in the case of the Property Trustee, negligence) or willful misconduct with respect to such acts or omissions. (b) To the fullest extent permitted by applicable law, expenses (including legal fees) incurred by an Indemnified Person in defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Sponsor prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Sponsor of an undertaking by or on behalf of the Indemnified Person to repay such amount if it shall be determined that the Indemnified Person is not entitled to be indemnified as authorized in Section 10.4(a). The indemnification shall survive the termination of this Declaration. 42 Section 10.5 Outside Businesses. ------------------ Any Covered Person, the Sponsor, the Note Issuer, the Delaware Trustee and the Property 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 Trust 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, the Note Issuer, the Delaware Trustee, or the Property 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, the Note Issuer, the Delaware Trustee and the Property 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, the Delaware Trustee and the Property 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 act on any committee or body of holders of, securities or other obligations of the Sponsor or its Affiliates. ARTICLE XI Accounting Section 11.1 Fiscal Year. ----------- The fiscal year ("Fiscal Year") of the Trust shall be the calendar year, or such other year as is required by the Code. Section 11.2 Certain Accounting Matters. -------------------------- (a) At all times during the existence of the Trust, the Regular Trustees shall keep, or cause to be kept, full books of account, records and supporting documents, which shall reflect in reasonable detail, each transaction of the Trust. The books of account shall be maintained on the accrual method of accounting, in accordance with generally accepted accounting principles, consistently applied. The Trust shall use the accrual method of accounting for United States federal income tax purposes. The books of account and the records of the Trust shall be examined by and reported upon as of the end of each Fiscal Year by a firm of independent certified public accountants selected by the Regular Trustees. 43 (b) The Regular Trustees shall cause to be prepared and delivered to each of the Holders of Trust Securities, within 90 days after the end of each Fiscal Year of the Trust, annual financial statements of the Trust, including a balance sheet of the Trust as of the end of such Fiscal Year, and the related statements of income or loss. (c) The Regular Trustees shall cause to be duly prepared and delivered to each of the Holders of Trust Securities, any annual United States federal income tax information statement, required by the Code, containing such information with regard to the Trust Securities held by each Holder as is required by the Code and the Treasury Regulations. Notwithstanding any right under the Code to deliver any such statement at a later date, the Regular Trustees shall endeavor to deliver all such statements within 30 days after the end of each Fiscal Year of the Trust. (d) The Regular Trustees shall cause to be duly prepared and filed with the appropriate taxing authority, an annual United States federal income tax return, on a Form 1041 or such other form required by United States federal income tax law, and any other annual income tax returns required to be filed by the Regular Trustees on behalf of the Trust with any state or local taxing authority. Section 11.3 Banking. ------- The Trust shall maintain one or more bank accounts in the name and for the sole benefit of the Trust; provided, however, that all payments of -------- ------- funds in respect of the Notes held by the Property Trustee shall be made directly to the Property Trustee Account and no other funds of the Trust shall be deposited in the Property Trustee Account. The signatories for such accounts shall be designated by the Regular Trustees; provided, however, that the -------- ------- Property Trustee shall designate the sole signatories for the Property Trustee Account. Section 11.4 Withholding. ----------- The Trust and the Regular Trustees shall comply with all withholding requirements under United States federal, state and local law. The Trust shall request, and the Holders shall provide to the Trust, such forms or certificates as are necessary to establish an exemption from withholding with respect to each Holder, and any representations and forms as shall reasonably be requested by the Trust to assist it in determining the extent of, and in fulfilling, its withholding obligations. The Regular Trustee shall file required forms with applicable jurisdictions and, unless an exemption from withholding is properly established 44 by a Holder, shall remit amounts withheld with respect to the Holder to applicable jurisdictions. To the extent that the Trust is required to withhold and pay over any amounts to any authority with respect to distributions or allocations to any Holder, the amount withheld shall be deemed to be a distribution in the amount of the withholding to the Holder. In the event of any claimed over withholding, Holders shall be limited to an action against the applicable jurisdiction. If the amount required to be withheld was not withheld from actual Distributions made, the Trust may reduce subsequent Distributions by the amount of such withholding. ARTICLE XII Amendments and Meetings Section 12.1 Amendments. ---------- (a) Except as otherwise provided in this Declaration or by any applicable terms of the Trust Securities, this Declaration may only be amended by a written instrument approved and executed by: (i) the Regular Trustees (or, if there are more than two Regular Trustees a majority of the Regular Trustees); (ii) if the amendment affects the rights, powers, duties, obligations or immunities of the Property Trustee, the Property Trustee; and (iii) if the amendment affects the rights, powers, duties, obligations or immunities of the Delaware Trustee, the Delaware Trustee; (b) No amendment shall be made, and any purported amendment shall be void and ineffective: (i) unless, in the case of any proposed amendment, the Property Trustee shall have first received an Officers' Certificate from each of the Trust and the Sponsor that such amendment is permitted by, and conforms to, the terms of this Declaration (including the terms of the Trust Securities); (ii) unless, in the case of any proposed amendment which affects the rights, powers, duties, obligations or immunities of the Property Trustee, the Property Trustee shall have first received: (A) an Officers' Certificate from each of the Trust and the Sponsor that such amendment is permitted by, and conforms to, the terms of 45 this Declaration (including the terms of the Trust Securities); and (B) an opinion of counsel (who may be counsel to the Sponsor or the Trust) that such amendment is permitted by, and conforms to, the terms of this Declaration (including the terms of the Trust Securities); and (iii) to the extent the result of such amendment would be to: (A) cause the Trust to fail to continue to be classified for purposes of United States federal income taxation as a grantor trust; (B) reduce or otherwise adversely affect the powers of the Property Trustee in contravention of the Trust Indenture Act; or (C) cause the Trust to be deemed to be an Investment Company required to be registered under the Investment Company Act. (c) at such time after the Trust has issued any Trust Securities that remain outstanding, any amendment that would adversely affect the rights, privileges or preferences of any Holder of Trust Securities may be effected only with such additional requirements as may be set forth in the terms of such Trust Securities; (d) Section 9.1(c) and this Section 12.1 shall not be amended without the consent of all of the Holders of the Trust Securities; (e) Article IV shall not be amended without the consent of the Holders of a Majority in liquidation amount of the Common Securities and; (f) the rights of the Holders of the Common Securities under Article V to increase or decrease the number of, and appoint and remove Trustees shall not be amended without the consent of the Holders of a Majority in liquidation amount of the Common Securities; and (g) notwithstanding Section 12.1(c), this Declaration may be amended without the consent of the Holders of the Trust Securities to: (i) cure any ambiguity; 46 (ii) correct or supplement any provision in this Declaration that may be defective or inconsistent with any other provision of this Declaration; (iii) add to the covenants, restrictions or obligations of the Sponsor; and (iv) conform to any change in Rule 3a-5 or other exemption from the requirement to register as an Investment Company under the Investment Company Act or written change in the interpretation or application thereof by any legislative body, court, government agency or regulatory authority which amendment does not have a material adverse effect on the rights, preferences or privileges of the Holders. Section 12.2 Meetings of the Holders of Trust Securities; Action by Written -------------------------------------------------------------- Consent. ------- (a) Meetings of the Holders of any class of Trust Securities may be called at any time by the Regular Trustees (or as provided in the terms of the Trust Securities) to consider and act on any matter on which Holders of such class of Trust Securities are entitled to act under the terms of this Declaration, the terms of the Trust Securities or the rules of any stock exchange, the NASDAQ National Market System or other organization on which the Preferred Securities are listed or admitted for trading. The Regular Trustees shall call a meeting of the Holders of such class if directed to do so by the Holders of at least 10% in liquidation amount of such class of Trust Securities. Such direction shall be given by delivering to the Regular Trustees one or more calls in a writing stating that the signing Holders of Trust Securities wish to call a meeting and indicating the general or specific purpose for which the meeting is to be called. Any Holders of Trust Securities calling a meeting shall specify in writing the Certificates held by the Holders of Trust Securities exercising the right to call a meeting and only those Trust Securities specified shall be counted for purposes of determining whether the required percentage set forth in the second sentence of this paragraph has been met. (b) Except to the extent otherwise provided in the terms of the Trust Securities, the following provisions shall apply to meetings of Holders of Trust Securities: (i) notice of any such meeting shall be given to all the Holders of Trust Securities having a right to vote thereat at least 7 days and not more than 60 47 days before the date of such meeting. Whenever a vote, consent or approval of the Holders of Trust Securities is permitted or required under this Declaration or the rules of any stock exchange, the NASDAQ National Market System or other organization on which the Preferred Securities are listed or admitted for trading, such vote, consent or approval may be given at a meeting of the Holders of Trust Securities. Any action that may be taken at a meeting of the Holders of Trust Securities may be taken without a meeting if a consent in writing setting forth the action so taken is signed by the Holders of Trust Securities owning not less than the minimum amount of Trust Securities in liquidation amount that would be necessary to authorize or take such action at a meeting at which all Holders of Trust Securities having a right to vote thereon were present and voting. Prompt notice of the taking of action without a meeting shall be given to the Holders of Trust Securities entitled to vote who have not consented in writing. The Regular Trustees may specify that any written ballot submitted to a Holder for the purpose of taking any action without a meeting shall be returned to the Trust within the time specified by the Regular Trustees; (ii) each Holder of a Trust Security may authorize any Person to act for it by proxy on all matters in which a Holder of Trust Securities is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. No proxy shall be valid after the expiration of 11 months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Holder of Trust Securities executing it. Except as otherwise provided herein, all matters relating to the giving, voting or validity of proxies shall be governed by the General Corporation Law of the State of Delaware relating to proxies, and judicial interpretations thereunder, as if the Trust were a Delaware corporation and the Holders of the Trust Securities were stockholders of a Delaware corporation; (iii) each meeting of the Holders of the Trust Securities shall be conducted by the Regular Trustees or by such other Person that the Regular Trustees may designate; and 48 (iv) unless the Business Trust Act, this Declaration, the terms of the Trust Securities, the Trust Indenture Act or the listing rules of any stock exchange, the NASDAQ National Market System or other organization on which the Preferred Securities are then listed or trading, otherwise provides, the Regular Trustees, in their sole discretion, shall establish all other provisions relating to meetings of Holders of Trust Securities, including notice of the time, place or purpose of any meeting at which any matter is to be voted on by any Holders of Trust Securities, waiver of any such notice, action by consent without a meeting, the establishment of a record date, quorum requirements, voting in person or by proxy or any other matter with respect to the exercise of any such right to vote. ARTICLE XIII Representations and Warranties of Property Trustee Section 13.1 Representations and Warranties of Property Trustee. -------------------------------------------------- The Trustee that acts as initial Property Trustee represents and warrants to the Trust and to the Sponsor at the date of this Declaration, and each Successor Property Trustee represents and warrants to the Trust and the Sponsor at the time of the Successor Property Trustee's acceptance of its appointment as Property Trustee that: (a) The Property Trustee is a banking corporation with trust powers, duly organized, validly existing and in good standing under the laws of the United States or the State of Delaware, with trust power and authority to execute and deliver, and to carry out and perform its obligations under the terms of, the Declaration and with its principal place of business in Illinois. (b) The execution, delivery and performance by the Property Trustee of the Declaration has been duly authorized by all necessary corporate action on the part of the Property Trustee. The Declaration has been duly executed and delivered by the Property Trustee, and it constitutes a legal, valid and binding obligation of the Property Trustee, enforceable against it in accordance with its terms, subject to applicable bankruptcy, reorganization, moratorium, insolvency, and other similar laws affecting creditors' rights generally and to general principles of equity and the discretion of the court (regardless of whether the 49 enforcement of such remedies is considered in a proceeding in equity or at law). (c) The execution, delivery and performance of the Declaration by the Property Trustee does not conflict with or constitute a breach of the charter or By-laws of the Property Trustee. (d) No consent, approval or authorization of, or registration with or notice to, any State or Federal banking authority is required for the execution, delivery or performance by the Property Trustee, of the Declaration. (e) The Property Trustee, pursuant to the Declaration, shall hold legal title and a valid ownership interest in the Notes. (f) If the Property Trustee does not also act as the Delaware Trustee, the Delaware Trustee shall be a natural person who is a resident of the State of Delaware or, if not a natural person, an entity which has its principal place of business in the State of Delaware. (g) The Delaware Trustee has been authorized to perform its obligations under the Certificate of Trust and the Declaration. The Declaration under Delaware law constitutes a legal, valid and binding obligation of the Delaware Trustee, enforceable against it in accordance with its terms, subject to applicable bankruptcy, reorganization, moratorium, insolvency, and other similar laws affecting creditors' rights generally and to general principles of equity and the discretion of the court (regardless of whether the enforcement of such remedies is considered in a proceeding in equity or at law). ARTICLE XIV Miscellaneous Section 14.1 Notices. ------- All notices provided for in this Declaration shall be in writing, duly signed by the party giving such notice, and shall be delivered, telecopied or mailed by registered or certified mail, as follows: (a) if given to the Trust, in care of the Regular Trustees at the Trust's mailing address set forth below (or such other address as the Trust may give notice of to the Holders of the Trust Securities): 50 GREAT WESTERN FINANCIAL TRUST I 9200 Oakdale Avenue Chatsworth, California 91311 (b) if given to the Property Trustee, at the mailing address set forth below (or such other address as the Property Trustee may give notice of to the Holders of the Trust Securities): The First National Bank of Chicago One First National Plaza, Suite 0126 Chicago, Illinois 60670-0126 Attention: (c) if given to the Holder of the Common Securities, at the mailing address of the Sponsor set forth below (or such other address as the Holder of the Common Securities may give notice to the Trust): Great Western Financial Corporation 9200 Oakdale Avenue Chatsworth, California 91311 Attention: [ ] (d) if given to any other Holder, at the address set forth on the books and records of the Trust. 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. Section 14.2 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 principles of conflict of laws. Section 14.3 Intention of the Parties. ------------------------ It is the intention of the parties hereto that the Trust not be characterized for United States federal income tax purposes as an association taxable as a corporation or a partnership but rather that the Trust be characterized as a grantor trust or otherwise in a manner such that each Holder of Trust Securities will be treated as owning an undivided beneficial interest in the 51 Notes. The provisions of this Declaration shall be interpreted to further this intention of the parties. Section 14.4 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. Section 14.5 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 14.6 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 it is held invalid, shall not be affected thereby. Section 14.7 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. 52 IN WITNESS WHEREOF, the undersigned has caused these presents to be executed as of the day and year first above written. CARL F. GEUTHER, as Trustee ------------------------------ J. LANCE ERIKSON, as Trustee ------------------------------ BRUCE F. ANTENBERG, as Trustee ----------------------------- MICHAEL J. MAJCHRZAK, as Delaware Trustee ------------------------------ THE FIRST NATIONAL BANK OF CHICAGO, as Property Trustee By: ------------------------------- Name: ----------------------------- Title: ---------------------------- GREAT WESTERN FINANCIAL CORPORATION, as Sponsor By: ------------------------------- Name: ----------------------------- Title: ---------------------------- 53 EXHIBIT A TERMS OF % TRUST ORIGINATED PREFERRED SECURITIES -- % TRUST ORIGINATED COMMON SECURITIES -- Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust, dated as of , 1995 (as amended from time to time, the --------------- "Declaration"), the designation, rights, privileges, restrictions, preferences and other terms and provisions of the Preferred Securities and the Common Securities are set out below (each capitalized term used but not defined herein has the meaning set forth in the Declaration or, if not defined in such Declaration, as defined in the Prospectus referred to below): 1. Designation and Number. ---------------------- (a) "Preferred Securities." Preferred Securities of the ------------- Trust with an aggregate liquidation amount with respect to the assets of the Trust of $ million ($ ) and a --------------- ----------- liquidation amount with respect to the assets of the Trust of $25 per Preferred Security, are hereby designated for the purposes of identification only as " % Trust Originated Preferred Securities" ---- (the "Preferred Securities"). The Certificates evidencing the Preferred Securities shall be substantially in the form attached hereto as Annex I, with such changes and additions thereto or deletions therefrom as may be required by ordinary usage, custom or practice or to conform to the rules of any stock exchange on which the Preferred Securities are listed. (b) "Common Securities." Common Securities of the Trust with --------------- an aggregate liquidation amount with respect to the assets of the Trust of $ million ($ ) and a liquidation amount ---------- ---------- with respect to the assets of the Trust of $25 per Common Security, are hereby designated for the purposes of identification only as " % Trust Originated Common Securities" (the "Common Securities"). ---- The Certificates evidencing the Common Securities shall be substantially in the form attached hereto as Annex II, with such changes and additions thereto or deletions therefrom as may be required by ordinary usage, custom or practice. A-1 2. Distributions. ------------- (a) Distributions payable on each Trust Security will be fixed at a rate per annum of [ ]% (the "Coupon Rate") of the stated liquidation amount of $25 per Trust Security, such rate being the rate of interest payable on the Notes to be held by the Property Trustee. Distributions in arrears for more than one quarter will bear interest thereon compounded quarterly at the Coupon Rate (to the extent permitted by applicable law). The term "Distributions" as used herein includes any such interest payable unless otherwise stated. A Distribution is payable only to the extent that payments are made in respect of the Notes held by the Property Trustee. The amount of Distributions payable for any period will be computed for any full quarterly Distribution period on the basis of a 360-day year of twelve 30-day months, and for any period shorter than a full quarterly Distribution period for which Distributions are computed, on the basis of the actual number of days elapsed per 30-day month. (b) Distributions on the Trust Securities will be cumulative, will accrue from , 1995, and will be payable quarterly in ------------------ arrears, on March 31, June 30, September 30, and December 31 of each year (each a "Distribution Date") to the Holders of record on the applicable record date, commencing on , 199__, when, as ------------ and if available for payment, except as otherwise described below. The Note Issuer has the right under the Indenture to defer payments of interest by extending the interest payment period from time to time on the Notes for a period not exceeding 20 consecutive quarters (each an "Extension Period") and, during such Extension Period, Distributions will also be deferred. Despite such deferral, quarterly Distributions will continue to accrue with interest thereon (to the extent permitted by applicable law) at the Coupon Rate compounded quarterly during any such Extension Period. Prior to the termination of any such Extension Period, the Note Issuer may further extend such Extension Period; provided that such Extension Period together with all such previous and further extensions thereof may not exceed 20 consecutive quarters. Payments of accrued Distributions will be payable to Holders as they appear on the books and records of the Trust on the first record date after the end of the Extension Period. Upon the termination of any Extension Period and the payment of all amounts then due, the Note Issuer may commence a new Extension Period as if no Extension Period had previously been declared, subject to the above requirements. A-2 (c) Distributions on the Trust Securities will be payable to the Holders thereof as they appear on the books and records of the Trust on the relevant record dates. While the Preferred Securities remain in book- entry only form, the relevant record dates shall be one Business Day prior to the relevant payment dates which payment dates correspond to the interest payment dates on the Notes. Such distributions will be paid through the Property Trustee, who will hold amounts received in respect of the Subordinated Notes for the benefit of the holders of the Trust Securities. Subject to any applicable laws and regulations and the provisions of the Declaration, each such payment in respect of the Preferred Securities will be made as described under the heading "Description of the Preferred Securities -- Book-Entry Only Issuance -- The Depository Trust Company" in the Prospectus Supplement dated , 1995 (the "Prospectus Supplement"), to the ------------------ Prospectus dated , 1995 (together, the "Prospectus"), ----------------- of the Trust included in the Registration Statement on Form S-3 of the Sponsor and the Trust. The relevant record dates for the Common Securities shall be the same record date as for the Preferred Securities. If the Preferred Securities shall not continue to remain in book-entry only form, the relevant record dates for the Preferred Securities, shall conform to the rules of any securities exchange on which the securities are listed and, if none, shall be selected by the Regular Trustees, which dates shall be at least one Business Day but less than 60 Business Days before the relevant payment dates, which payment dates correspond to the interest payment dates on the Notes. Distributions payable on any Trust Securities that are not punctually paid on any Distribution payment date, as a result of the Note Issuer having failed to make a payment under the Notes, will cease to be payable to the Person in whose name such Trust Securities are registered on the relevant record date, and such defaulted Distribution will instead be payable to the Person in whose name such Trust Securities are registered on the special record date or other specified date determined in accordance with the Indenture. If any date on which Distributions are payable on the Trust Securities is not a Business Day, then 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 of any such delay) except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. (d) In the event that there is any money or other property held by or for the Trust that is not accounted for hereunder, such property shall be distributed Pro Rata A-3 (as defined herein) among the Holders of the Trust Securities. 3. Liquidation Distribution Upon Dissolution. ----------------------------------------- In the event of any voluntary or involuntary liquidation, dissolution, winding-up or termination of the Trust, the Holders of the Trust Securities on the date of the liquidation, dissolution, winding-up or termination, as the case may be, will be entitled to receive out of the assets of the Trust available for distribution to Holders of Trust Securities after satisfaction of liabilities of creditors an amount equal to the aggregate of the stated liquidation amount of $25 per Trust Security plus accrued and unpaid Distributions thereon to the date of payment (such amount being the "Liquidation Distribution"), unless, in connection with such liquidation, dissolution, winding-up or termination, Notes in an aggregate principal amount and/or Depositary Shares in an aggregate stated liquidation amount, as applicable, equal to the aggregate stated liquidation amount of such Trust Securities and bearing accrued and unpaid interest in an amount equal to the accrued and unpaid Distributions on, such Trust Securities, shall be distributed on a Pro Rata basis to the Holders of the Trust Securities in exchange for such Trust Securities. If, upon any such liquidation, dissolution, winding-up or termination, the Liquidation Distribution can be paid only in part because the Trust has insufficient assets 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. 4. Redemption and Distribution. --------------------------- (a) Upon the repayment of the Notes in whole or in part, whether at maturity or upon redemption, the proceeds from such repayment or payment shall be simultaneously applied to redeem Trust Securities having an aggregate liquidation amount equal to the aggregate principal amount of the Notes so repaid or redeemed at a redemption price of $25 per Trust Security plus an amount equal to accrued and unpaid Distributions thereon at the date of the redemption, payable in cash (the "Redemption Price"). Holders will be given not less than 30 nor more than 60 days notice of such redemption. (b) If fewer than all the outstanding Trust Securities are to be so redeemed, the Common Securities and the Preferred Securities will be redeemed Pro Rata and the Preferred Securities to be redeemed will be as described in Paragraph 4(h)(ii) below. A-4 (c) If a Special Event (as defined below) shall occur and be continuing the Regular Trustees shall dissolve the Trust and, after satisfaction of creditors, cause Notes held by the Property Trustee, having an aggregate principal amount equal to the aggregate stated liquidation amount of, with an interest rate identical to the Coupon Rate of, and accrued and unpaid interest equal to accrued and unpaid Distributions on and having the same record date for payment as the Trust Securities, to be distributed to the Holders of the Trust Securities in liquidation of such Holders' interests in the Trust on a Pro Rata basis, within 90 days following the occurrence of such Special Event (the "90-Day Period"); provided, however, that, in the case of the -------- ------- occurrence of a Tax Event (as defined below), as a condition of such dissolution and distribution, the Regular Trustees shall have received an opinion of independent tax counsel experienced in such matters (a "No Recognition Opinion"), which opinion may rely on published revenue rulings of the Internal Revenue Service, to the effect that the Holders of the Trust Securities will not recognize any gain or loss for United States federal income tax purposes as a result of the dissolution of the Trust and the distribution of Notes, and provided, -------- further, that, if at the time there is available to the Trust the ------- opportunity to eliminate, within the 90-Day Period, the Special Event by taking some ministerial action, such as filing a form or making an election, or pursuing some other similar reasonable measure that has no adverse effect on the Trust, the Note Issuer, the Sponsor or the Holders of the Trust Securities ("Ministerial Action"), the Trust or the Note Issuer will pursue such Ministerial Action in lieu of such dissolution and distribution. In the case of the occurrence of a Tax Event, if (i) after receipt of a Dissolution Tax Opinion (as hereafter defined) by the Regular Trustees the Note Issuer has received an opinion (a "Redemption Tax Opinion") of independent tax counsel experienced in such matters that, as a result of a Tax Event, there is more than an insubstantial risk that the Note Issuer would be precluded from deducting the interest on the Notes for United States federal income tax purposes even if the Notes were distributed to the Holders of Trust Securities in liquidation of such Holders' interests in the Trust as described in this paragraph 4(c), or (ii) the Regular Trustees shall have been informed by such tax counsel that a No Recognition Opinion cannot be delivered to the Trust, the Note Issuer shall have the right at any time, upon not less than 30 nor more than 60 days notice, to redeem the A-5 Notes in whole or in part for cash within the 90-Day Period and following such redemption, Trust Securities with an aggregate liquidation amount equal to the aggregate principal amount of the Notes so redeemed shall be redeemed by the Trust at the Redemption Price on a Pro Rata basis; provided, however, that, if at the time -------- ------- there is available to the Trust or the Note Issuer the opportunity to eliminate within such 90-Day Period, the Tax Event by taking some Ministerial Action, the Trust or the Note Issuer will pursue such Ministerial Action in lieu of redemption. "Special Event" means a Tax Event or an Investment Company Event (as defined below). "Tax Event" means that the Regular Trustees shall have received an opinion of independent tax counsel experienced in such matters (a "Dissolution Tax Opinion") to the effect that on or after the date of the Prospectus Supplement, 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, with respect to clause (ii) below, any political subdivision or taxing authority thereof or therein, or (b) any amendment to, or change in, an interpretation or application of any such laws or regulations by any legislative body, court, governmental agency or regulatory authority, which amendment or change is enacted, promulgated, issued or announced or which interpretation or pronouncement is issued or announced or which action is taken (irrespective of any retroactive effect), in each case on or after the date of the Prospectus Supplement, there is more than an insubstantial risk that (i) the Trust is or will be within 90 days of the date thereof, subject to United States federal income tax with respect to interest accrued or receive on the Notes, (ii) the Trust is, or will be within 90 days of the date thereof, subject to more than a de minimis amount of other taxes, duties or other governmental charges, or (iii) interest payable by the Note Issuer to the Trust on the Notes is not, or within 90 days of the date thereof will not be, deductible by the Note Issuer for United States federal income tax purposes. "Investment Company Event" means that the Regular Trustees shall have received an opinion from independent counsel experienced in such matters to the effect that, as a result of the occurrence of a change in law or regulation or a written change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority, there is more than an insubstantial risk that the Trust is or will within 90 days of the date thereof be considered an "investment company" which is required to be registered under the Investment Company A-6 Act of 1940, as amended, which change becomes effective on or after the date of the Prospectus Supplement. On and from the date fixed by the Regular Trustees for any distribution of Notes and dissolution of the Trust: (i) the Trust Securities will no longer be deemed to be outstanding, (ii) The Depository Trust Company (the "Depositary") or its nominee (or any successor Depositary or its nominee), as the record Holder of the Preferred Securities, will receive a registered global certificate or certificates representing the Notes to be delivered upon such distribution, and (iii) any certificates representing Trust Securities not held by the Depositary or its nominee (or any successor Depositary or its nominee), will be deemed to represent beneficial interests in the Notes having an aggregate principal amount equal to the aggregate stated liquidation amount of such Trust Securities until such certificates are presented to the Note Issuer or its agent for transfer or reissue. (d) Upon the occurrence of a Regulatory Event (as defined below), the Note Issuer may, for a period of 90 days following written notice to the Regular Trustees of the occurrence of a Regulatory Event, notify the Regular Trustees in writing that the Note Issuer has elected to reduce the annual interest rate on the Notes by 50 basis points effective upon distribution of the adjusted Notes to the Holders of the Trust Securities; provided, however, that if the Note Issuer has elected to defer payments of interest to the holders of the Trust Securities as set in Paragraph 2(a) above, all deferred distributions and accrued interest thereon shall be paid before the adjusted Notes are distributed. If notice of the Note Issuer's election as specified above is not given within the 90-day period, the Note Issuer will forfeit the right to make such election. If the Note Issuer elects to lower the annual interest rate on the Notes as described above, at least 30 but not more than 60 days prior to the distribution of the adjusted Notes, notice of such election will be sent to the Holders of the Trust Securities. Such notice will state that (i) a Regulatory Event has occurred and that the Note Issuer has elected to reduce the interest rate on the Notes, (ii) that on the specified date (which shall be the next Distribution Date which is at least 30 days after the date of such notice), the adjusted Notes will be converted into Depositary Shares with an aggregate liquidation preference equal to the principal amount of the adjusted Notes converted, unless prior to such conversion the Holder of Trust Securities elects not to A-7 convert such Holder's adjusted Notes, in which case such Holder will be entitled to receive the adjusted Notes, (iii) that the Trust will be dissolved and that the Holders of Trust Securities will receive adjusted Notes and/or Depositary Shares, as the case may be, (iv) the date upon which the adjusted Notes and/or Depositary Shares, as the case may be, will be distributed, and (v) the procedure for a Holder of Trust Securities to exercise his or her right not to have the adjusted Notes to which such Holder is entitled converted to Depositary Shares. If the Note Issuer elects to lower the annual interest rate on the Notes, on the next Distribution Date which is at least 30 days after notice to the Holders of Trust Securities as provided above, (i) the adjusted Notes will be converted into Depositary Shares having a liquidation preference equal to the principal amount of the adjusted Notes converted, unless prior to such conversion the Holder of Trust Securities elects not to convert such Holder's adjusted Notes, in which event such Holder will be entitled to receive the adjusted Notes and (ii) the Trust shall be dissolved, with the result that the adjusted Notes and/or the Depositary Shares, as the case may be, will be distributed to the Holders of the Trust Securities in lieu of any cash distribution. After the date for any distribution of adjusted Notes upon dissolution of the Trust, (i) the Trust Securities will no longer be deemed to be outstanding, (ii) the Depositary or its nominee, as the record holder of the Trust Securities, will receive a registered global certificate or certificates representing the adjusted Notes or the Depositary Shares, as the case may be, to be delivered upon such distribution and (iii) any certificates representing Trust Securities not held by the Depositary or its nominee will be deemed to represent adjusted Notes having an aggregate principal amount or Depositary Shares having an aggregate stated liquidation amount, as the case may be, equal to the aggregate stated liquidation amount of such Trust Securities, until such certificates are presented to the Note Issuer or its agent for transfer or reissue. "Regulatory Event" means that (i) the Note Issuer (or its successor) is, becomes or pursuant to law or regulation will become within 180 days, subject to capital requirements under which all or any portion of the Preferred Securities would not constitute Tier 1 capital (as that concept is used in the guidelines or regulations issued by the Board of Governors of the Federal Reserve System as of the date of this Declaration) or its then equivalent ("Tier 1 Capital"), and (ii) as a result, based upon the Note Issuer's then existing capital ratios, the Note Issuer would, within 180 days, fail to be "well capitalized" (as that term is defined in 12 CFR (S)(S)208.33(b)(1) of the regulations promulgated by the Board of Governors of the Federal Reserve System as if the Note Issuer were a state member bank and as applied to bank holding companies or, in the event that section is eliminated, to a reasonably equivalent standard applicable to bank holding companies). The Regulatory Event will be deemed to occur on the date the condition in clause (ii) is satisfied. A-8 (e) Note Issuer shall promptly notify the Regular Trustees of the occurrence of a Regulatory Redemption Event. During a period of 90 days after the occurrence of a Regulatory Redemption Event, the Note Issuer may elect to redeem the Notes in whole only, for cash. If the Note Issuer elects to redeem the Notes in whole for cash, the written notice of its election shall specify a date for such redemption, which shall not be less than 30 nor more than 60 days after such notice. "Regulatory Redemption Event" means that (i) the Note Issuer (or its successor) is, becomes or pursuant to law or regulation will become within 180 days, subject to capital requirements under which all or any portion of the Preferred Securities would not constitute Tier 1 Capital and (ii)(a) a bank, savings and loan association, savings bank, or bank or savings and loan holding company (each a "Depository Institution") has issued or has been the sponsor of a trust or other entity (including but not limited to a general or limited partnership or limited liability company) that has issued securities that constitute Tier 1 Capital, and which issued securities, or the securities underlying such issued securities, are to be treated by such Depository Institution as indebtedness for U.S. federal income tax purposes, as evidenced by the disclosure document pursuant to which such securities were offered, and (b) the Note Issuer has within 90 days of such issuance, received an opinion of independent counsel experienced in such matters that securities having substantially identical terms (except for rate, maturity and payment dates), if issued by the Note Issuer or by a Note Issuer sponsored trust or other entity, should constitute Tier 1 Capital for the Note Issuer if the securities issued by such Depository Institution constituted Tier 1 Capital and should be treated as indebtedness for U.S. federal income tax purposes. (f) The Trust may not redeem fewer than all the outstanding Trust Securities unless all accrued and unpaid Distributions have been paid on all Trust Securities for all quarterly Distribution periods terminating on or before the date of redemption. (g) If the Notes and/or Depositary Shares are distributed to Holders of the Trust Securities, pursuant to the terms of the Indenture, the Note Issuer will use its best efforts to have the Notes listed on the New York Stock Exchange or on such other exchange, the NASDAQ National Market System or other organization as the Preferred Securities were listed immediately prior to the distribution of the Notes; provided, -------- however, that if the Note Issuer has given notice of its intention to ------- redeem the Notes, the Note Issuer will not be under an obligation to use its best efforts to have the Notes listed. (h) "Redemption or Distribution Procedures." (i) Notice of any redemption of, or notice of distribution of Notes in exchange for the Trust Securities (a) "Redemption/Distribution Notice" will be given by the Trust by mail to each Holders of Trust Securities to be redeemed or exchanged not fewer than 30 nor more than 60 days before the date fixed for redemption or exchange thereof which, in the case of a redemption, will be the date fixed for redemption of the Notes. For purposes of the calculation of the date of redemption or exchange and the dates on which notices are given pursuant to this paragraph 4(h)(i), a Redemption/Distribution Notice shall be deemed to be given on the day such notice is first A-9 mailed by first-class mail, postage prepaid, to Holders of Trust Securities. Each Redemption/Distribution Notice shall be addressed to the Holders of Trust Securities at the address of each such Holder appearing in the books and records of the Trust. No defect in the Redemption/Distribution Notice or in the mailing of either thereof with respect to any Holder shall affect the validity of the redemption or exchange proceedings with respect to any other Holder. (ii) In the event that fewer than all the outstanding Trust Securities are to be redeemed, the Trust Securities to be redeemed shall be redeemed Pro Rata and, in the event Preferred Securities are held in book-entry only form by the Depositary or its nominee (or any successor Depositary or its nominee), the Depositary will reduce Pro Rata the amount of the interest of each Depositary Participant in the Preferred Securities to be redeemed in accordance with its procedures; provided, that if, as a result of -------- ---- such Pro Rata redemption, Depositary Participants would hold fractional interests in the Preferred Securities, the Depositary will adjust the amount of the interest of each Depositary Participant to be redeemed to avoid such fractional interests; provided, however, if the partial redemption of the Preferred Securities would result in the delisting of the Preferred Securities from any exchange on which they are then listed, the Preferred Securities may only be redeemed in whole. (iii) If Trust Securities are to be redeemed and the Trust gives a Redemption/Distribution Notice, which notice may only be issued if the Notes are redeemed as set out in this paragraph 4 (which notice will be irrevocably), then (A) while the Preferred Securities are in book-entry only form, with respect to the Preferred Securities, by 12:00 noon, New York City time, on the redemption date, provided that the Note Issuer has paid the Property Trustee a sufficient amount of cash in connection with the related redemption or maturity of the Notes, the Property Trustee will deposit irrevocably with the Depositary (or successor Depositary) funds sufficient to pay the applicable Redemption Price with respect to the Preferred Securities and will give the Depositary irrevocable instructions and authority to pay the Redemption Price to the Holders of the Preferred Securities, and (B) with respect to Preferred A-10 Securities issued in definitive form and Common Securities, provided, that the Note Issuer has paid the Property Trustee a -------- ---- sufficient amount of cash in connection with the related redemption or maturity of the Notes, the Property Trustee will pay the relevant Redemption Price to the Holders of such Trust Securities by check mailed to the address of the relevant Holder appearing on the books and records of the Trust on the redemption date. If a Redemption/Distribution Notice shall have been given and funds deposited as required, if applicable, then immediately prior to the close of business on the date of such deposit, or on the redemption date, if later, as applicable, Distributions will cease to accrue on the Trust Securities so called for redemption and all rights of Holders of such Trust Securities so called for redemption will cease, except the right of the Holders of such Trust Securities to receive the Redemption Price, but without interest on such Redemption Price. Neither the Regular Trustees nor the Trust shall be required to register or cause to be registered the transfer of any Trust Securities that have been so called for redemption. If any date fixed for redemption of Trust Securities is not a Business Day, then payment of the Redemption Price payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day falls in the next calendar year, such payment will be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date fixed for redemption. If payment of the Redemption Price in respect of any Trust Securities is improperly withheld or refused and not paid either by the Property Trustee or by the Sponsor as guarantor pursuant to the Preferred Securities Guarantee or Common Securities Guarantee, as the case may be, Distributions on such Trust Securities will continue to accrue from the original redemption date to the actual date of payment, in which case the actual payment date will be considered the date fixed for redemption for purpose of calculating the Redemption Price. (iv) Redemption/Distribution Notices shall be sent by the Regular Trustees on behalf of the Trust to (A) in respect of the Preferred Securities, the Depositary or its nominee (or any successor Depositary or its nominee) if the Global Certificates have been issued or, if Definitive A-11 Preferred Security Certificates have been issued, to the Holder thereof, and (B) in respect of the Common Securities to the Holder thereof. (v) Subject to the foregoing and applicable law (including, without limitation, United States federal securities laws), provided the acquirer is not the Holder of the Common Securities or the obligor under the Indenture, the Sponsor or any of its subsidiaries may at any time and from time to time purchase outstanding Preferred Securities by tender, in the open market or by private agreement. 5. Voting Rights - Preferred Securities. ------------------------------------ (a) Except as provided under paragraphs 5(b) and 7 and as otherwise required by law and the Declaration, the Holders of the Preferred Securities will have no voting rights. (b) Subject to the requirements set forth in this paragraph, the Holders of a majority in liquidation amount of the Preferred Securities, voting separately as a class, may direct the time, method, and place of conducting any proceeding for any remedy available to the Property Trustee, or direct the exercise of any trust or power conferred upon the Property Trustee under the Declaration, including (i) directing the time, method, place of conducting any proceeding for any remedy available to the Note Trustee, or exercising any trust or power conferred on the Note Trustee with respect to the Notes, (ii) waive any past default and its consequences that is waivable under Section 513 of the Indenture, or (iii) exercise any right to rescind or annul a declaration that the principal of all the Notes shall be due and payable, provided, however, that, where a consent under the Indenture -------- ------- would require the consent or act of the Holders of all of or of greater than a majority of the Holders in principal amount of Notes affected thereby (a "Super-Majority"), the Property Trustee may only give such consent or take such action at the direction of the Holders of all of or of at least the proportion in liquidation amount of the Preferred Securities which the relevant Super-Majority represents of the aggregate principal amount of the Notes outstanding, as applicable. The Property Trustee shall not revoke any action previously authorized or approved by a vote of the applicable Holders of the Preferred Securities as aforesaid. Other than with respect to directing the time, method and place of conducting any remedy available to the A-12 Property Trustee or the Note Trustee as set forth above, the Property Trustee shall not take any action in accordance with the directions of the Holders of the Preferred Securities under this paragraph unless the Property Trustee has obtained an opinion of independent tax counsel experienced in such matters to the effect that for the purposes of United States federal income tax the Trust will not fail to be classified as a grantor trust on account of such action. If an Event of Default with respect to the Notes, constituting the failure to pay interest or principal on the Notes on the date such interest or principal is otherwise payable, has occurred and is continuing, then a holder of Trust Securities may directly institute a proceeding for enforcement of payment to such holder directly of the principal of or interest on the Notes having a principal amount equal to the aggregate liquidation amount of the Trust Securities of such holder on or after the respective due date specified in the Notes. The holders of Trust Securities will not be able to exercise directly any other remedy available to the holders of the Notes unless the Property Trustee fails to do so. Any approval or direction of Holders of Preferred Securities may be given at a separate meeting of Holders of Preferred Securities convened for such purpose, at a meeting of all of the Holders of Trust Securities in the Trust or pursuant to written consent. The Regular Trustees will cause a notice of any meeting at which Holders of Preferred Securities are entitled to vote, or of any matter upon which action by written consent of such Holders is to be taken, to be mailed to each Holder of record of Preferred Securities. Each such notice will include a statement setting forth (i) the date of such meeting or the date by which such action is to be taken, (ii) a description of any resolution proposed for adoption at such meeting on which such Holders are entitled to vote or of such matter upon which the written consent is sought and (iii) instructions for the delivery of proxies or consents. No vote or consent of the Holders of the Preferred Securities will be required for the Trust to redeem and cancel Preferred Securities or to distribute the Notes or Depositary Shares in accordance with the Declaration and the terms of the Trust Securities. Notwithstanding that Holders of Preferred Securities are entitled to vote or consent under any of the circumstances described above, any of the Preferred Securities that are owned by the Sponsor or any Affiliate of the Sponsor shall not be entitled to vote or consent and shall, for purposes of such vote or consent, be treated as if they were not outstanding. A-13 6. Voting Rights - Common Securities. --------------------------------- (a) Except as provided under paragraphs 6(b), 6(c) and 7 or as otherwise required by law and the Declaration, the Holders of the Common Securities will have no voting rights. (b) The Holders of the Common Securities are entitled, in accordance with Article V of the Declaration, to vote to appoint, remove or replace any Trustee or to increase or decrease the number of Trustees. (c) Subject to Section 2.6 of the Declaration and only after an Event of Default with respect to the Preferred Securities has been cured, waived or otherwise eliminated and to the requirements of the second to last sentence of this paragraph, the Holders of a Majority in liquidation amount of the Common Securities, voting separately as a class, may direct the time, method and place of conducting any proceeding for any remedy available to the Property Trustee, or exercising any trust or power conferred upon the Property Trustee under the Declaration, including (i) directing the time, method, place of conducting any proceeding for any remedy available to the Note Trustee, or exercising any trust or power conferred on the Note Trustee with respect to the Notes, (ii) waive any past default and its consequences that is waivable under Section 513 of the Indenture, or (iii) exercise any right to rescind or annul a declaration that the principal of all the Notes shall be due and payable, provided, -------- however, that, where a consent or action under the Indenture would ------- require the consent or act of the Holders of all of or of greater than a majority in principal amount of Notes affected thereby (a "Super- Majority"), the Property Trustee may only give such consent or take such action at the direction of the Holders of all of or of at least the proportion in liquidation amount of the Common Securities which the relevant Super-Majority represents of the aggregate principal amount of the Notes outstanding, as applicable. Pursuant to this paragraph 6(c), the Property Trustee shall not revoke any action previously authorized or approved by a vote of the applicable Holders of the Preferred Securities as aforesaid. Other than with respect to directing the time, method and place of conducting any remedy available to the Property Trustee or the Note Trustee as set forth above, the Property Trustee shall not take any action in accordance with the directions of the Holders of the Common Securities under this paragraph unless the Property Trustee has obtained an opinion of independent tax counsel experienced in such matters to the effect A-14 that for the purposes of United States federal income tax the Trust will not fail to be classified as a grantor trust on account of such action. If the Property Trustee fails to enforce its rights under the Declaration, any Holder of Common Securities may after written request to the Property Trustee to enforce such rights, institute a legal proceeding directly against any Person to enforce the Property Trustee's rights under the Declaration, without first instituting a legal proceeding against the Property Trustee or any other person. Any approval or direction of Holders of Common Securities may be given at a separate meeting of Holders of Common Securities convened for such purpose, at a meeting of all of the Holders of Trust Securities in the Trust or pursuant to written consent. The Regular Trustees will cause a notice of any meeting at which Holders of Common Securities are entitled to vote, or of any matter upon which action by written consent of such Holders is to be taken, to be mailed to each Holder of record of Common Securities. Each such notice will include a statement setting forth (i) the date of such meeting or the date by which such action is to be taken, (ii) a description of any resolution proposed for adoption at such meeting on which such Holders are entitled to vote or of such matter upon which written consent is sought and (iii) instructions for the delivery of proxies or consents. No vote or consent of the Holders of the Common Securities will be required for the Trust to redeem and cancel Common Securities or to distribute the Notes in accordance with the Declaration and the terms of the Trust Securities. 7. Amendments to Declaration and Indenture. --------------------------------------- (a) In addition to any requirements under Section 12.1 of the Declaration, if any proposed amendment to the Declaration provides for, or the Regular Trustees otherwise propose to effect (i) any action that would adversely affect the powers, preferences or special rights of the Trust Securities, whether by way of amendment to the Declaration or otherwise, or (ii) the liquidation, dissolution, winding-up or termination of the Trust, other than as described in Section 8.1 of the Declaration, then the Holders of outstanding Trust Securities, voting together as a single class, will be entitled to vote on such amendment or proposal (but not on any other amendment or proposal) and such amendment or proposal shall not be effective except with the approval of the Holders of at least 66-2/3% in A-15 liquidation amount of the Trust Securities, voting together as a single class; provided, however, if any amendment or proposal referred -------- ------- to in clause (i) above would adversely affect only the Preferred Securities or only the Common Securities, then only the affected class will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of 66-2/3% in liquidation amount of such class of Trust Securities. (b) In the event the consent of the Property Trustee as the holder of the Notes, the Preferred Securities Guarantee and the Common Securities Guarantee is required under the Indenture or the applicable Guarantee Agreement with respect to any amendment, modifications or termination on the Indenture, the Notes, the Preferred Securities Guarantees or the Common Securities Guarantee, the Property Trustee shall request the direction of the Holders of the Trust Securities with respect to such amendment, modification or termination and shall vote with respect to such amendment, modification or termination as directed by a Majority in liquidation amount of the Trust Securities voting together as a single class; provided, however, that where a consent -------- ------- under the Indenture or the applicable Guarantee Agreement would require the consent of all of the Holders or a Super-Majority, the Property Trustee may only give such consent at the direction of the Holders of all of or of at least the proportion in liquidation amount of the Trust Securities which the relevant Super-Majority represents of the aggregate principal amount of the Notes outstanding, as applicable; provided, further, that the Property Trustee shall not -------- ------- take any action in accordance with the directions of the Holders of the Trust Securities under this paragraph 7(b) unless the Property Trustee has obtained an opinion of independent tax counsel experienced in such matters to the effect that for the purposes of United States federal income tax the Trust will not be classified as other than a grantor trust on account of such action. 8. Pro Rata. -------- A reference to any payment, distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder of Trust Securities according to the aggregate liquidation amount of the Trust Securities held by the relevant Holder in relation to the aggregate liquidation amount of all Trust Securities outstanding unless, in relation to a payment, an Event of Default under the Indenture has occurred and is continuing, in which case any funds available to make such payment shall be paid first to each Holder of the Preferred Securities pro rata according to the aggregate liquidation amount of Preferred Securities held by the relevant Holder relative to the aggregate liquidation amount of all A-16 Preferred Securities outstanding, and only after satisfaction of all amounts owed to the Holders of the Preferred Securities, to each Holder of Common Securities pro rata according to the aggregate liquidation amount of Common Securities held by the relevant Holder relative to the aggregate liquidation amount of all Common Securities outstanding. 9. Ranking. ------- The Preferred Securities rank pari passu and payment thereon shall be made Pro Rata with the Common Securities except that, where an Event of Default occurs and is continuing hereunder, the rights of Holders of the Common Securities to payment in respect of Distributions and payments upon liquidation, redemption and otherwise are subordinated to the rights to payment of the Holders of the Preferred Securities. 10. Listing. ------- The Regular Trustees shall use their best efforts to cause the Preferred Securities to be listed for quotation on the New York Stock Exchange. 11. Acceptance of Trust Securities Guarantee and Indenture. ------------------------------------------------------ Each Holder of Preferred Securities and Common Securities, by the acceptance thereof, agrees to the provisions of the Preferred Securities Guarantee and the Common Securities Guarantee, respectively, including the subordination provisions therein and to the provisions of the Indenture. 12. No Preemptive Rights. -------------------- The Holders of the Trust Securities shall have no preemptive rights to subscribe for any additional securities. 13. Miscellaneous. ------------- These terms constitute a part of the Declaration. The Sponsor will provide a copy of the Declaration, the Preferred Securities Guarantee or the Common Securities Guarantee (as may be appropriate), and the Indenture to a Holder without charge on written request to the Trust at its principal place of business. A-17 ANNEX I IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - This Preferred Security is a Global Certificate within the meaning of the Declaration hereinafter referred to and is registered in the name of The Depository Trust Company, a New York Corporation (the "Depositary") or a nominee of the Depositary. This Preferred Security is exchangeable for Preferred Securities registered in the name of a person other than the Depositary or its nominee only in the limited circumstances described in the Declaration and no transfer of this Preferred Security (other than a transfer of this Preferred Security as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary) may be registered except in limited circumstances. Unless this Preferred Security is presented by an authorized representative of the Depositary to the Trust or its agent for registration of transfer, exchange or payment, and any Preferred Security issued is registered in the name of Cede & Co. or such other name as is requested by an authorized representative of the Depositary and any payment hereon is made to Cede & Co. or such other entity as is requested by an authorized representative of the Depositary, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.] Certificate Number Number of Preferred Securities CUSIP NO. ------------ Certificate Evidencing Preferred Securities of GREAT WESTERN FINANCIAL TRUST I Preferred Securities (liquidation amount $25 per Preferred Security) GREAT WESTERN FINANCIAL TRUST I, a statutory business trust formed under the laws of the State of Delaware (the "Trust"), hereby certifies that (the "Holder") is the registered owner of preferred - ------------------------ securities of the Trust representing undivided beneficial interests in the assets of the Trust designated the % Trust Originated Preferred Securities ------ (liquidation amount $25 per Preferred Security) (the "Preferred Securities"). The Preferred Securities are transferable on the books and records of the Trust, in person or by a duly authorized I-1 attorney, upon surrender of this certificate duly endorsed and in proper form for transfer. The designation, rights, privileges, restrictions, preferences and other terms and provisions of the Preferred Securities represented hereby are issued and shall in all respects be subject to the provision of the Amended and Restated Declaration of Trust of the Trust dated as of , 1995, ------------- as the same may be amended from time to time (the "Declaration"), including the designation of the terms of the Preferred Securities as set forth in Exhibit A to the Declaration. Capitalized terms used herein but not defined shall have the meaning given them in the Declaration. The Holder is entitled to the benefits of the Preferred Securities Guarantee to the extent provided therein. The Sponsor will provide a copy of the Declaration, the Preferred Securities Guarantee and the Indenture to a Holder without charge upon written request to the Trust at its principal place of business. Upon receipt of this certificate, the Holder is bound by the Declaration and is entitled to the benefits thereunder. By acceptance, the Holder agrees to treat for United States federal income tax purposes, the Notes as indebtedness and the Preferred Securities as evidence of indirect beneficial ownership in the Notes. IN WITNESS WHEREOF, the Trust has executed this certificate this day ----- of , 199 . ---------------- -- CARL F. GEUTHER, as Trustee ------------------------------ J. LANCE ERIKSON, as Trustee ------------------------------ BRUCE F. ANTENBERG, as Trustee ------------------------------ I-2 ASSIGNMENT FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred Security Certificate to: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Insert assignee's social security or tax identification number) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Insert address and zip code of assignee) and irrevocably appoints) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- agent to transfer this Preferred Security Certificate on the books of the Trust. The agent may substitute another to act for him or her. Date: ----------------------- Signature: ----------------------------------------- (Sign exactly as your name appears on the other side of this Preferred Security Certificate) Signature(s) must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Property Trustee, which requirements include membership or participation in STAMP or such other "signature guaranty program" as may be determined by the Property Trustee in addition to or in substitution for STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. I-3 ANNEX II Certificate Number Number of Common Securities Certificate Evidencing Common Securities of GREAT WESTERN FINANCIAL TRUST I Common Securities (liquidation amount $25 per Common Security) GREAT WESTERN FINANCIAL TRUST I, a statutory business trust formed under the laws of the State of Delaware (the "Trust"), hereby certifies that (the "Holder") is the registered owner of common securities of - --------------- the Trust representing undivided beneficial interests in the assets of the Trust designated the % Trust Originated Common Securities (liquidation --------- amount $25 per Common Security) (the "Common Securities"). The Common Securities are transferable on the books and records of the Trust, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer. The designation, rights, privileges, restrictions, preferences and other terms and provisions of the Common Securities represented hereby are issued and shall in all respects be subject to the provisions of the Amended and Restated Declaration of Trust of the Trust dated as of , 1995, as the same may be amended from time to --------------------- time (the "Declaration"), including the designation of the terms of the Common Securities as set forth in Exhibit A to the Declaration. Capitalized terms used herein but not defined shall have the meaning given them in the Declaration. The Holder is entitled to the benefits of the Common Securities Guarantee to the extent provided therein. The Trust will provide a copy of the Declaration, the Common Securities Guarantee and the Indenture to the Holder without charge upon written request to the Trust at its principal place of business. Upon receipt of this certificate, the Sponsor is bound by the Declaration and is entitled to the benefits thereunder. By acceptance, the Holder agrees to treat for United States federal income tax purposes the Notes as indebtedness and the Common Securities as evidence of indirect beneficial ownership in the Notes. II-1 IN WITNESS WHEREOF, the Trust has executed this certificate this day ----- of , 199 . ------------------ -- CARL F. GEUTHER, as Trustee ------------------------------ J. LANCE ERIKSON, as Trustee ------------------------------ BRUCE F. ANTENBERG, as Trustee ------------------------------ II-2 ASSIGNMENT FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security Certificate to: - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (Insert assignee's social security or tax identification number) - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (Insert address and zip code of assignee) and irrevocably appoints) - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- agent to transfer this Common Security Certificate on the books of the Trust. The agent may substitute another to act for him or her. Date: ------------------------- Signature: ---------------------------------- (Sign exactly as your name appears on the other side of this Common Security Certificate) Signature(s) must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Property Trustee, which requirements include membership or participation in STAMP or such other "signature guaranty program" as may be determined by the Property Trustee in addition to or in substitution for STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. II-3 EX-4.16 4 GUARANTEE AGREEMENT EXHIBIT 4.16 ======================================== PREFERRED SECURITIES GUARANTEE AGREEMENT GREAT WESTERN FINANCIAL TRUST I Dated as of , 1995 ------------ ======================================== TABLE OF CONTENTS Section Page - ------- ---- ARTICLE I Definitions and Interpretation....................... 2 Section 1.1. Definitions and Interpretation................................ 2 ------------------------------ ARTICLE II Trust Indenture Act............................ 5 Section 2.1. Trust Indenture Act; Application.............................. 5 -------------------------------- Section 2.2. Lists of Holders of Trust Securities.......................... 5 ------------------------------------ Section 2.3. Reports by the Preferred Guarantee Trustee.................... 6 ------------------------------------------ Section 2.4. Periodic Reports to Preferred Guarantee --------------------------------------- Trustee....................................................... 6 ------- Section 2.5. Evidence of Compliance with Conditions -------------------------------------- Precedent..................................................... 6 --------- Section 2.6. Events of Default; Waiver..................................... 7 ------------------------- Section 2.7. Event of Default; Notice...................................... 7 ------------------------ Section 2.8. Conflicting Interests......................................... 7 --------------------- ARTICLE III Power, Duties and Rights of Preferred Guarantee Trustee........................ 7 Section 3.1. Powers and Duties of the Preferred Guarantee -------------------------------------------- Trustee....................................................... 7 ------- Section 3.2. Certain Rights of Preferred Guarantee Trustee................. 10 --------------------------------------------- Section 3.3. Not Responsible for Recitals or Issuance of ------------------------------------------- Guarantee..................................................... 12 --------- ARTICLE IV Preferred Guarantee Trustee........................ 12 Section 4.1. Preferred Guarantee Trustee; Eligibility...................... 12 ---------------------------------------- Section 4.2. Appointment Removal and Resignation of -------------------------------------- Preferred Guarantee Trustees.................................. 13 ---------------------------- ARTICLE V Guarantee................................. 14 Section 5.1. Guarantee..................................................... 14 --------- Section 5.2. Subordination................................................. 14 ------------- Section 5.3. Waiver of Notice and Demand................................... 14 --------------------------- Section 5.4. Obligations Not Affected...................................... 15 ------------------------ Section 5.5. Rights of Holders............................................. 16 ----------------- Section 5.6. Guarantee of Payment.......................................... 16 -------------------- Section 5.7. Subrogation................................................... 16 ----------- Section 5.8. Independent Obligations....................................... 17 ----------------------- ARTICLE VI Limitation of Transactions; Subordination................. 17 Section 6.1. Limitation of Transactions.................................... 17 -------------------------- Section 6.2. Ranking....................................................... 17 ------- i ARTICLE VII Termination................................ 18 Section 7.1. Termination................................................... 18 ----------- ARTICLE VIII Indemnification.............................. 18 Section 8.1. Exculpation................................................... 18 ----------- Section 8.2. Indemnification............................................... 19 --------------- ARTICLE IX Miscellaneous............................... 19 Section 9.1. Successors and Assigns........................................ 19 ---------------------- Section 9.2. Amendments.................................................... 19 ---------- Section 9.3. Notices....................................................... 20 ------- Section 9.4. Benefit....................................................... 20 ------- Section 9.5. Governing Law................................................. 20 ------------- ii PREFERRED SECURITIES GUARANTEE AGREEMENT This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of , ----------- 1995, is executed and delivered by Great Western Financial Corporation, a Delaware corporation (the "Guarantor"), and The First National Bank of Chicago, a , not individually but solely as trustee (the "Preferred Guarantee ----------- Trustee"), for the benefit of the Holders (as defined herein) from time to time of the Preferred Securities (as defined herein) of Great Western Financial Trust I, a Delaware statutory business trust (the "Issuer"). RECITALS WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the "Declaration"), dated as of , 1995, among the trustees of the Issuer ------------ named therein, 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 $ aggregate stated liquidation amount of ------------ Preferred Securities designated the % Trust Originated Preferred Securities ----- (the "Preferred Securities"); WHEREAS, as incentive for the Holders (as hereinafter defined) to purchase the Preferred Securities, the Guarantor desires irrevocably and unconditionally to agree, to the extent set forth in this Guarantee Agreement, to pay to the Holders of the Preferred Securities the Guarantee Payments (as defined herein) and to make certain other payments on the terms and conditions set forth herein; and WHEREAS, the Guarantor is also executing and delivering a guarantee agreement (the "Common Securities Guarantee Agreement") with substantially identical terms to this Guarantee Agreement for the benefit of the holders of the Common Securities (as defined herein) except that if an Event of Default (as defined in the Indenture (as defined herein)), has occurred and is continuing, the rights of holders of the Common Securities to receive Guarantee Payments under the Common Securities Guarantee Agreement are subordinated to the rights of Holders of Preferred Securities to receive Guarantee Payments under this Guarantee Agreement. NOW, THEREFORE, in consideration of the purchase by each Holder of Preferred Securities, which purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes 1 and delivers this Guarantee Agreement for the benefit of the Holders. ARTICLE I Definitions and Interpretation Section 1.1. Definitions and Interpretation. ------------------------------ In this Guarantee Agreement, unless the context otherwise requires: (a) Capitalized terms used in this Guarantee Agreement but not defined in the preamble above have the respective meanings assigned to them in this Section 1.1; (b) a term defined anywhere in this Guarantee Agreement has the same meaning throughout; (c) all references to "the Guarantee Agreement" or "this Guarantee Agreement" are to this Guarantee Agreement as modified, supplemented or amended from time to time; (d) all references in this Guarantee Agreement to Articles and Sections are to Articles and Sections of this Guarantee Agreement unless otherwise specified; (e) a term defined in the Trust Indenture Act has the same meaning when used in this Guarantee Agreement unless otherwise defined in this Guarantee Agreement or unless the context otherwise requires; and (f) a reference to the singular includes the plural and vice versa. "Affiliate" has the same meaning as given to that term in Rule 405 of the Securities Act or any successor rule thereunder. "Authorized Officer" of a Person means any Person that is authorized to bind such Person. "Common Securities" means the common securities representing undivided beneficial interests in the assets of the Issuer. "Covered Person" means any Holder or beneficial owner of Preferred Securities. "Direction" by a Person means a written direction signed: (a) if the Person is a natural person by that Person; or 2 (b) in any other case, in the name of such Person by one or more Authorized Officers of that Person. "Event of Default" means a default by the Guarantor on any of its payment or other obligations under this Guarantee Agreement. "Guarantee Payments" means the following payments or distributions, without duplication, with respect to the Preferred Securities, to the extent not paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined in the Declaration) that are required to be paid on such Preferred Securities to the extent the Issuer shall have received a payment of interest or principal on the Notes therefor, (ii) the redemption price, including all accrued and unpaid Distributions to the date of redemption (the "Redemption Price") to the extent the Issuer has received a payment of interest or principal on the Notes with respect to any Preferred Securities called for redemption by the Issuer, and (iii) upon a voluntary or involuntary liquidation, dissolution, winding-up or termination of the Issuer (other than in connection with the distribution of Notes to the Holders in exchange for Preferred Securities as provided in the Declaration) or the redemption of all of the Preferred Securities upon the maturity or redemption of the Notes, the lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid Distributions on the Preferred Securities to the date of payment to the extent the Issuer has received a payment on the Notes therefor, and (b) the amount of assets of the Issuer remaining available for distribution to Holders in liquidation of the Issuer (in either case, the "Liquidation Distribution"). "Holder" shall mean any holder, as registered on the books and records of the Issuer of any Preferred Securities; provided, that, in determining -------- ---- whether the holders of the requisite percentage of Preferred 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 Preferred Guarantee Trustee, any Affiliate of the Preferred Guarantee Trustee, or any officers, directors, shareholders, members, partners, employees, representatives or agents of the Preferred Guarantee Trustee. "Indenture" means the Indenture dated as of September 12, 1990, as amended and supplemented by a First Supplemental Indenture, dated as of April 30, 1993, and the Second Supplemental Indenture dated as of , 1995, ---------- among the Note Issuer and Harris Trust and Savings Bank, as trustee, and any indenture supplemental thereto pursuant to which certain Notes are to be issued. 3 "Majority in liquidation amount of the Trust Securities" means, except as provided by the Trust Indenture Act, a vote by Holder(s) of Preferred Securities, voting separately as a class, of more than 50% of the liquidation amount (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) of all Preferred Securities. "Note Issuer" means the Guarantor in its capacity as issuer of the Notes. "Notes" means the subordinated debt securities of the Note Issuer issued pursuant to the Indenture and acquired by the Issuer. "Officers' Certificate" means, with respect to any Person, a certificate signed by two Authorized Officers of such Person. Any Officers' Certificate delivered with respect to compliance with a condition or covenant provided for in this Guarantee Agreement shall include: (a) a statement that each officer signing the Officers' Certificate has read the covenant or condition and the definition relating thereto; (b) a brief statement of the nature and scope of the examination or investigation undertaken by each officer in rendering the Officers' Certificate; (c) 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 (d) a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with. "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. "Preferred Guarantee Trustee" means The First National Bank of Chicago until a Successor Preferred Guarantee Trustee has been appointed and has accepted such appointment pursuant to the terms of this Guarantee Agreement and thereafter means each such Successor Preferred Guarantee Trustee. 4 "Responsible Officer" means, with respect to the Preferred Guarantee Trustee, any vice-president, any assistant vice-president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, any trust officer or assistant trust officer or any other officer of 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. "Securities Act" means the Securities Act of 1933, as amended from time to time, or any successor legislation. "Successor Preferred Guarantee Trustee" means a successor Preferred Guarantee Trustee possessing the qualifications to act as Preferred Guarantee Trustee under Section 4.1. "Trust Indenture Act" means the Trust Indenture Act of 1939, in effect at the date as of which this instrument was executed; provided, however, that in -------- ------- the event the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. "Trust Securities" means collectively the Common Securities and the Preferred Securities. ARTICLE II Trust Indenture Act Section 2.1. Trust Indenture Act; Application. -------------------------------- (a) This Guarantee Agreement is subject to the provisions of the Trust Indenture Act that are required to be part of this Guarantee Agreement and shall, to the extent applicable, be governed by such provisions; and (b) if and to the extent that any provision of this Guarantee Agreement limits, qualifies or conflicts with the duties imposed by Section 310 to 317, inclusive, of the Trust Indenture Act, such duties imposed by the Trust Indenture Act shall control. Section 2.2. Lists of Holders of Trust Securities. ------------------------------------ (a) The Guarantor shall provide the Preferred Guarantee Trustee with a list, in such form as the Preferred Guarantee Trustee may reasonably require, of the names and addresses of the Holders of the Preferred 5 Securities ("List of Holders") as of such date, (i) within 14 days after and 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 Preferred 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 Preferred Guarantee Trustee by the Guarantor. The Preferred Guarantee Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders. (b) The Preferred Guarantee Trustee shall comply with its obligations under Section 311(a), 311(b) and Section 312(b) of the Trust Indenture Act. Section 2.3. Reports by the Preferred Guarantee Trustee. ------------------------------------------ Within 60 days after of each year, the Preferred ------------ Guarantee Trustee shall provide to the Holders of the Preferred Securities 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 Preferred Guarantee Trustee shall also comply with the requirements of Section 313(d) of the Trust Indenture Act. Section 2.4. Periodic Reports to Preferred Guarantee Trustee. ----------------------------------------------- The Guarantor shall provide to the Preferred 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. Section 2.5. Evidence of Compliance with Conditions Precedent. ------------------------------------------------ The Guarantor shall provide to the Preferred Guarantee Trustee such evidence of compliance with any conditions precedent, if any, provided for in this Guarantee Agreement 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. 6 Section 2.6. Events of Default; Waiver. ------------------------- The Holders of a Majority in liquidation amount of Preferred Securities may, by vote, on behalf of the Holders of all of the Preferred Securities, 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 Guarantee Agreement, but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. Section 2.7. Event of Default; Notice. ------------------------ (a) The Preferred Guarantee Trustee shall, within 90 days after the occurrence of an Event of Default, transmit by mail, first class postage prepaid, to the Holders of the Preferred Securities, notices of all Events of Default known to the Preferred Guarantee Trustee, unless such defaults have been cured before the giving of such notice, provided, that, the Preferred 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 Officers of the Preferred Guarantee Trustee in good faith determines that the withholding of such notice is in the interests of the Holders of the Preferred Securities. (b) The Preferred Guarantee Trustee shall not be deemed to have knowledge of any Event of Default unless the Preferred Guarantee Trustee shall have received written notice, or a Responsible Officer shall have obtained written notice, of such Event of Default. Section 2.8. Conflicting Interests. --------------------- The Declaration shall be deemed to be specifically described in this Guarantee Agreement for the purposes of the first proviso contained in Section 310(b) of the Trust Indenture Act. ARTICLE III Power, Duties and Rights of Preferred Guarantee Trustee Section 3.1. Powers and Duties of the Preferred Guarantee Trustee. ---------------------------------------------------- (a) This Guarantee Agreement shall be held by the Preferred Guarantee Trustee for the benefit of the Holders of the Preferred Securities, and the Preferred Guarantee 7 Trustee shall not transfer this Guarantee Agreement to any Person except a Holder of Preferred Securities exercising his or her rights pursuant to Section 5.4(b) or to a Successor Preferred Guarantee Trustee on acceptance by such Successor Preferred Guarantee Trustee of its appointment to act as Successor Preferred Guarantee Trustee. The right, title and interest of the Preferred Guarantee Trustee shall automatically vest in any Successor Preferred Guarantee Trustee, and such vesting and cessation of title shall be effective whether or not conveyancing documents have been executed and delivered pursuant to the appointment of such Successor Preferred Guarantee Trustee. (b) If an Event of Default has occurred and is continuing, the Preferred Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the Holders of the Preferred Securities. (c) The Preferred 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 Guarantee Agreement, and no implied covenants shall be read into this Guarantee Agreement against the Preferred Guarantee Trustee. In case an Event of Default has occurred (that has not been cured or waived pursuant to Section 2.6), the Preferred Guarantee Trustee shall exercise such of the rights and powers vested in it by this Guarantee Agreement, 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 Guarantee Agreement shall be construed to relieve the Preferred 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 Preferred Guarantee Trustee shall be determined solely by the express provisions of this Guarantee Agreement, and the Preferred Guarantee Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Guarantee Agreement, and no implied covenants or 8 obligations shall be read into this Guarantee Agreement against the Preferred Guarantee Trustee; and (B) in the absence of bad faith on the part of the Preferred Guarantee Trustee, the Preferred 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 Preferred Guarantee Trustee and conforming to the requirements of this Guarantee Agreement; but in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Guarantee Agreement; (ii) the Preferred Guarantee Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Preferred Guarantee Trustee, unless it shall be proved that the Preferred Guarantee Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made; (iii) the Preferred 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 not less than a Majority in liquidation amount of the Preferred Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Preferred Guarantee Trustee, or exercising any trust or power conferred upon the Preferred Guarantee Trustee under this Guarantee Agreement; and (iv) no provision of this Guarantee Agreement shall require the Preferred 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 Preferred 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 Guarantee Agreement or adequate indemnity against such risk or liability is not reasonably assured to it. 9 Section 3.2. Certain Rights of Preferred Guarantee Trustee. --------------------------------------------- (a) Subject to the provisions of Section 3.1: (i) The Preferred Guarantee Trustee may 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 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 Guarantee Agreement shall be sufficiently evidenced by a Direction or an Officers' Certificate. (iii) Whenever, in the administration of this Guarantee Agreement, the Preferred Guarantee Trustee shall deem it desirable that a matter be proved or established before taking, suffering or omitting any action hereunder, the Preferred Guarantee Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, request and rely upon an Officers' Certificate which, upon receipt of such request, shall be promptly delivered by the Guarantor. (iv) The Preferred 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 Preferred Guarantee Trustee may consult with counsel, and the written 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 Preferred Guarantee Trustee shall have the right at any time to seek instructions concerning the administration of this Guarantee Agreement from any court of competent jurisdiction. (vi) The Preferred Guarantee Trustee shall be under no obligation to exercise any of the rights or powers 10 vested in it by this Guarantee Agreement at the request or direction of any Holder, unless such Holder shall have provided to the Preferred Guarantee Trustee such adequate security and indemnity as would satisfy a reasonable person in the position of the Preferred Guarantee Trustee, against the costs, expenses (including attorneys' fees and expenses) 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 Preferred Guarantee Trustee; provided that, nothing contained in this Section 3.2(a)(vi) shall be taken to relieve the Preferred Guarantee Trustee, upon the occurrence of an Event of Default, of its obligation to exercise the rights and powers vested in it by this Guarantee Agreement. (vii) The Preferred 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 Preferred Guarantee Trustee, in its discretion may make such further inquiry or investigation into such facts or matters as it may see fit. (viii)The Preferred Guarantee Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, and the Preferred 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 Preferred Guarantee Trustee or its agents hereunder shall bind the Holders of the Preferred Securities, and the signature of the Preferred 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 Preferred Guarantee Trustee to so act or as to its compliance with any of the terms and provisions of this Guarantee Agreement, both of which shall be conclusively evidenced by the Preferred Guarantee Trustee's or its agent's taking such action. (x) Whenever in the administration of this Guarantee Agreement the Preferred Guarantee Trustee shall 11 deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Preferred Guarantee Trustee (i) may request instructions from the Holders of the Preferred 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 acting in accordance with such instructions. (b) No provision of this Guarantee Agreement shall be deemed to impose any duty or obligation on the Preferred 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 Preferred 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 Preferred Guarantee Trustee shall be construed to be a duty. Section 3.3. Not Responsible for Recitals or Issuance of Guarantee. ----------------------------------------------------- The recitals contained in this Guarantee shall be taken as the statements of the Guarantor, and the Preferred Guarantee Trustee does not assume any responsibility for their correctness. The Preferred Guarantee Trustee makes no representation as to the validity or sufficiency of this Guarantee Agreement. ARTICLE IV Preferred Guarantee Trustee Section 4.1. Preferred Guarantee Trustee; Eligibility. ---------------------------------------- (a) There shall at all times be a Preferred 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. 12 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. (b) If at any time the Preferred Guarantee Trustee shall cease to be eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall immediately resign in the manner and with the effect set out in Section 4.2(c). (c) If the Preferred Guarantee Trustee has or shall acquire any "conflicting interest" within the meaning of Section 310(b) of the Trust Indenture Act, the Preferred 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 Preferred Guarantee ---------------------------------------------------------- Trustees. -------- (a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be appointed or removed without cause at any time by the Guarantor. (b) The Preferred Guarantee Trustee shall not be removed in accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has been appointed and has accepted such appointment by written instrument executed by such Successor Preferred Guarantee Trustee and delivered to the Guarantor. (c) The Preferred Guarantee Trustee appointed to office shall hold office until a Successor Preferred Guarantee Trustee shall have been appointed or until its removal or resignation. The Preferred Guarantee Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing executed by the Preferred Guarantee Trustee and delivered to the Guarantor, which resignation shall not take effect until a Successor Preferred Guarantee Trustee has been appointed and has accepted such appointment by instrument in writing executed by such Successor Preferred Guarantee Trustee and delivered to 13 the Guarantor and the resigning Preferred Guarantee Trustee. (d) If no Successor Preferred Guarantee Trustee shall have been appointed and accepted appointment as provided in this Section 4.2 within 60 days after delivery to the Guarantor of an instrument of resignation, the resigning Preferred Guarantee Trustee may petition any court of competent jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor Preferred Guarantee Trustee. 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. Subordination. ------------- If an event of default under the Indenture has occurred and is continuing, the rights of holders of the Common Securities to receive payments under the Common Securities Guarantee Agreement are subordinated to the rights of Holders of Preferred Securities to receive Guarantee Payments. Section 5.3. Waiver of Notice and Demand. --------------------------- The Guarantor hereby waives notice of acceptance of this Guarantee Agreement 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. 14 Section 5.4. Obligations Not Affected. ------------------------ The obligations, covenants, agreements and duties of the Guarantor under this Guarantee Agreement 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 Preferred 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 Preferred Securities or the extension of time for the performance of any other obligation under, arising out of, or in connection with, the Preferred Securities (other than an extension of time for payment of Distributions, Redemption Price, Liquidation Distribution or other sums payable that results from the extension of any interest payment period on the Notes or any extension of the maturity date of the Notes 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 Preferred 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) invalidity of, or defect or deficiency in the Preferred Securities; (f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred; or (g) 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 hereunder shall be absolute and unconditional under any and all circumstances. 15 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 5.5. Rights of Holders. ----------------- (a) The Holders of a Majority in liquidation amount of the Preferred Securities have the right to direct the time, method and place of conducting of any proceeding for any remedy available to the Preferred Guarantee Trustee in respect of this Guarantee Agreement or to direct the exercise of any trust or power conferred upon the Preferred Guarantee Trustee under this Guarantee Agreement. (b) Any Holder of Preferred Securities may institute a legal proceeding directly against the Guarantor to enforce its rights under this Guarantee Agreement, without first instituting a legal proceeding against the Issuer, the Preferred Guarantee Trustee or any other Person. Section 5.6. Guarantee of Payment. -------------------- This Guarantee Agreement creates a guarantee of payment and not of collection. Section 5.7. Subrogation. ----------- The Guarantor shall be subrogated to all (if any) rights of the Holders of Preferred Securities against the Issuer in respect of any amounts paid to such Holders by the Guarantor under this Guarantee Agreement; 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 Guarantee Agreement, if, at the time of any such payment, any amounts are due and unpaid under this Guarantee Agreement. 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. 16 Section 5.8. Independent Obligations. ----------------------- The Guarantor acknowledges that its obligations hereunder are independent of the obligations of the Issuer with respect to the Preferred Securities, and that the Guarantor shall be liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Guarantee Agreement notwithstanding the occurrence of any event referred to in subsections (a) through (g), inclusive, of Section 5.4 hereof. ARTICLE VI Limitation of Transactions; Subordination Section 6.1. Limitation of Transactions. -------------------------- So long as any Preferred Securities remain outstanding, if there shall have occurred an Event of Default or an event of default under the Declaration, then (a) the Guarantor shall not, and shall cause any subsidiary of Guarantor that is not a wholly owned subsidiary of Guarantor not to, declare or pay any dividend on, or make any distribution with respect to, or redeem, purchase or acquire or make a liquidation payment with respect to, any of its capital stock or the capital stock of any such subsidiary and (b) the Guarantor shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by the Guarantor which rank pari passu with or junior to the Notes, provided, that, the foregoing restriction in this Section 6.1(a) shall not apply to any stock dividends paid by Guarantor, or any of its subsidiaries, where the dividend stock is the same stock as that on which the dividend is being paid. Section 6.2. Ranking. ------- This Guarantee Agreement will constitute an unsecured obligation of the Guarantor and will rank (i) subordinate and junior in right of payment to all other liabilities of the Guarantor (other than the Common Securities Guarantee or any guarantee now or hereafter entered into by the Guarantor in respect of any preferred or preference stock of any Affiliate of the Guarantor), (ii) pari passu with the most senior preferred or preference stock now or hereafter issued by the Guarantor and with 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. 17 ARTICLE VII Termination Section 7.1. Termination. ----------- This Guarantee Agreement shall terminate and the Guarantee will no longer be deemed to be outstanding upon (i) full payment of the Redemption Price of all Preferred Securities, (ii) upon the distribution of the Notes to the Holders of all Preferred Securities or (iii) upon full payment of the amounts payable in accordance with the Declaration upon liquidation of the Issuer. Notwithstanding the foregoing, this Guarantee Agreement will continue to be effective or will be reinstated, as the case may be, if at any time any Holder of Preferred Securities must restore payment of any sums paid under the Preferred Securities or under this Preferred 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 Guarantee Agreement 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 Guarantee Agreement 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 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 Preferred Securities might properly be paid. 18 Section 8.2. Indemnification. --------------- (a) To the fullest extent permitted by applicable law, the Guarantor shall indemnify and hold harmless each Indemnified Person from and against any loss, damage or claim incurred by such Indemnified Person by reason of any act or omission performed or omitted by such Indemnified Person in good faith in accordance with this Guarantee Agreement and in a manner such Indemnified Person reasonably believed to be within the scope of authority conferred on such Indemnified Person by this Guarantee Agreement, except that no Indemnified Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Indemnified Person by reason of negligence or willful misconduct with respect to such acts or omissions. (b) To the fullest extent permitted by applicable law, expenses (including legal fees) incurred by an Indemnified Person in defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Guarantor prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Guarantor of any undertaking by or on behalf of the Indemnified Person to repay such amount if it shall be determined that the Indemnified Person is not entitled to be indemnified as authorized in Section 8.2(a). ARTICLE IX Miscellaneous Section 9.1. Successors and Assigns. ---------------------- All guarantees and agreements contained in this Guarantee Agreement shall bind the successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to the benefit of the Holders of the Preferred Securities then outstanding. Section 9.2. Amendments. ---------- Except with respect to any changes that do not adversely affect the rights of Holders (in which case no consent of Holders will be required), this Guarantee Agreement may only be amended with the prior approval of the Holders of at least 66-2/3% in liquidation amount (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) of all the outstanding Preferred Securities. The provisions of Section 12.2 of the Declaration with respect to meetings of Holders of the Trust Securities apply to the giving of such approval. 19 Section 9.3. Notices. ------- All notices provided for in this Guarantee Agreement shall be in writing, duly signed by the party giving such notice, and shall be delivered, telecopied or mailed by registered or certified mail as follows: (a) If given to the Preferred Guarantee Trustee, at the Preferred Guarantee Trustee's mailing address set forth below (or such other address as the Preferred Guarantee Trustee may give notice of to the Holders of the Preferred Securities): The First National Bank of Chicago One First Financial Plaza Suite 0126 Chicago, Illinois 60670-0126 Telecopy No. (312) 407-1708 (b) 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 of the Preferred Securities): Great Western Financial Corporation 9200 Oakdale Avenue Chatsworth, California 91311 Telecopy Number: (818) 775-3434 (c) If given to any Holder of Preferred Securities, at the address set forth in 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. Section 9.4. Benefit. ------- This Guarantee Agreement is solely for the benefit of the Holders of the Preferred Securities and, subject to Section 3.1(a), is not separately transferable from the Preferred Securities. Section 9.5. Governing Law. ------------- THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 20 IN WITNESS WHEREOF, the parties hereto have caused this Guarantee Agreement to be executed by their respective officers thereunto duly authorized, as of the day and year first above written. GREAT WESTERN FINANCIAL CORPORATION By:_______________________________ Name: Title: THE FIRST NATIONAL BANK OF CHICAGO, as Preferred Guarantee Trustee By:________________________________ Name: Title: 21 EX-23.1 5 CONSENT OF INDEPENDENT ACCOUNTANTS EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Prospectus constituting part of this Registration Statement on Form S-3 of our report dated January 18, 1995, which appears on page 74 of Great Western Financial Corporation's Annual Report on Form 10-K for the year ended December 31, 1994. We also consent to the reference to us under the heading "Experts" in such Prospectus. Price Waterhouse LLP Los Angeles, California November 28, 1995 EX-99.1 6 FORM OF PROSPECTUS SUPPLEMENT ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +THIS PRELIMINARY PROSPECTUS SUPPLEMENT AND THE INFORMATION CONTAINED HEREIN + +ARE SUBJECT TO COMPLETION OR AMENDMENT AND PROSPECTIVE PURCHASERS ARE + +REFERRED TO THE RELATED FINAL PROSPECTUS SUPPLEMENT FOR DEFINITIVE + +INFORMATION ON ANY MATTER CONTAINED HEREIN. NEITHER THIS PRELIMINARY + +PROSPECTUS SUPPLEMENT NOR THE ACCOMPANYING PROSPECTUS SHALL CONSTITUTE AN + +OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY + +SALE OF THESE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, + +SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION + +UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ SUBJECT TO COMPLETION, DATED , 1995 PROSPECTUS SUPPLEMENT (TO PROSPECTUS DATED , 1995) [ ] PREFERRED SECURITIES GREAT WESTERN FINANCIAL TRUST I % TRUST ORIGINATED PREFERRED SECURITIES SM ("TOPRS SM") (LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY) GUARANTEED TO THE EXTENT SET FORTH HEREIN BY GREAT WESTERN FINANCIAL CORPORATION ---------- The % Trust Originated Preferred Securities (the "Preferred Securities") offered hereby represent preferred undivided beneficial interests in the assets of Great Western Financial Trust I, a statutory business trust formed under the laws of the State of Delaware (the "Trust"). Great Western Financial Corporation, a Delaware corporation ("GWFC"), will own all the common securities (the "Common Securities" and, together with the Preferred Securities, the "Trust Securities") representing undivided beneficial interests in the assets of the Trust. The Trust exists for the sole purpose of issuing the Preferred Securities and Common Securities and investing the proceeds thereof in an equivalent amount of % Subordinated Deferrable Interest Notes due 2025 (the "Subordinated Notes") of GWFC. The amount of interest payable on the Subordinated Notes may be reduced under the limited circumstances (a "Regulatory Event") described under "Description of the Offered Preferred Securities--Regulatory Event Distribution or Conversion." Upon an event of a default under the Declaration (as defined herein), the holders of Preferred Securities will have a preference over the holders of the Common Securities with respect to payments in respect of distributions and payments upon redemption, liquidation and otherwise. (CONTINUED ON NEXT PAGE) ---------- SEE "RISK FACTORS" COMMENCING ON PAGE S-4 FOR CERTAIN INFORMATION RELEVANT TO AN INVESTMENT IN THE PREFERRED SECURITIES, INCLUDING THE PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS OF DISTRIBUTIONS MAY BE DEFERRED ON THE PREFERRED SECURITIES AND ANY SUBORDINATED NOTES OR ADJUSTED SUBORDINATED NOTES THAT MAY BE ISSUED IN EXCHANGE THEREFOR AND THE RELATED UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF ANY SUCH DEFERRAL. The Preferred Securities have been approved for listing on the New York Stock Exchange, Inc. (the "New York Stock Exchange"). Trading of the Preferred Securities on the New York Stock Exchange is expected to commence within a 30- day period after the initial delivery of the Preferred Securities. See "Underwriting." ---------- THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
INITIAL PUBLIC UNDERWRITING PROCEEDS TO THE TRUST OFFERING PRICE(1) COMMISSION(2) (3)(4) - ------------------------------------------------------------------------------ Per Preferred Securi- ty.................... $25.00 (3) $25.00 - ------------------------------------------------------------------------------ Total.................. $ (3) $
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (1) Plus accrued distributions, if any, from , 1995. (2) GWFC and the Trust have agreed to indemnify the several Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. See "Underwriting." (3) In view of the fact that the proceeds of the sale of Preferred Securities will be invested in Subordinated Notes of GWFC, GWFC has agreed to pay the Underwriters as compensation ("Underwriters' Compensation") for their arranging the investment therein of such proceeds $. per Preferred Security (or $ in the aggregate); provided that such compensation for sales of 10,000 or more Preferred Securities to a single purchaser will be $ per Preferred Security. Therefore, to the extent of such sales, the actual amount of Underwriters' Compensation will be less than the aggregate amount specified in the preceding sentence. See "Underwriting." (4) Expenses of the offering which are payable by GWFC are estimated to be $ . ---------- The Preferred Securities offered hereby are offered severally by the Underwriters, as specified herein, subject to receipt and acceptance by them and subject to their right to reject any order in whole or in part. It is expected that delivery of the Preferred Securities will be made only in book- entry form through the facilities of The Depository Trust Company, on or about , 1995. ---------- MERRILL LYNCH & CO. GOLDMAN, SACHS & CO. ---------- The date of this Prospectus Supplement is , 1995. SM"Trust Originated Preferred Securities" and "TOPrS" are service marks of Merrill Lynch & Co., Inc. (continued from previous page) Holders of the Preferred Securities are entitled to receive cumulative cash distributions at an annual rate of % of the liquidation amount of $25 per Preferred Security ("distributions"), accruing from the date of original issuance and payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, commencing , 199 (each a "Distribution Date"). The payment of distributions out of moneys held by the Trust and payments on liquidation of the Trust or the redemption of Preferred Securities, as set forth below, are guaranteed by GWFC (the "Guarantee") to the extent the Trust has funds available therefor as described under "Description of Guarantee" in the accompanying Prospectus. The obligations of GWFC under the Guarantee are subordinate and junior in right of payment to all other liabilities of GWFC and pari passu with the most senior preferred or preference stock issued, from time to time, if any, by GWFC. The obligations of GWFC under the Subordinated Notes are subordinate and junior in right of payment to all present and future Senior Indebtedness (as defined herein) of GWFC, which aggregated approximately $673 million at September 30, 1995, and rank pari passu with GWFC's other general unsecured creditors. In addition, because GWFC is a holding company, its obligations under the Guarantee and the Subordinated Notes will be effectively subordinated to all existing and future liabilities of its subsidiaries. At September 30, 1995, the subsidiaries of GWFC had total liabilities of approximately $41.2 billion. The distribution rate and the distribution and other payment dates for the Preferred Securities will correspond to the interest rate and interest and other payment dates on the Subordinated Notes, which will be the sole assets of the Trust. As a result, if principal or interest is not paid on the Subordinated Notes, no amounts will be paid on the Preferred Securities. If GWFC does not make principal or interest payments on the Subordinated Notes, the Trust will not have sufficient funds to make distributions on the Preferred Securities, in which event the Guarantee will not apply to such distributions until the Trust has sufficient funds available therefor. GWFC has the right to defer payments of interest on the Subordinated Notes by extending the interest payment period on the Subordinated Notes at any time for up to 20 consecutive quarters (each an "Extension Period"). If interest payments are so deferred, distributions will also be deferred. During such Extension Period, distributions will continue to accrue with interest thereon (to the extent permitted by applicable law) at the then applicable annual rate compounded quarterly, and during any Extension Period, holders of Preferred Securities will be required to include deferred interest income in their gross income for United States federal income tax purposes in advance of receipt of the cash distributions with respect to such deferred interest payments. There could be multiple Extension Periods of varying lengths throughout the term of the Subordinated Notes and hence on the Preferred Securities. Extension of the interest payment period will not extend the maturity date of the Subordinated Notes. See "Risk Factors--Option to Extend Interest Payment Period," "Description of the Subordinated Notes--Option to Extend Interest Payment Period" and "Certain Federal Income Tax Consequences--Original Issue Discount." The Subordinated Notes are redeemable by GWFC, in whole or in part, from time to time, on or after , 2000, or at any time in certain circumstances upon the occurrence of a Tax Event (as defined herein) or in whole for a limited time upon the occurrence of a Regulatory Redemption Event (as defined herein). If GWFC redeems Subordinated Notes, the Trust must redeem Trust Securities having an aggregate liquidation amount equal to the aggregate principal amount of the Subordinated Notes to be redeemed at $25 per Trust Security plus accrued and unpaid distributions thereon (the "Redemption Price") to the date fixed for redemption. See "Description of the Offered Preferred Securities--Mandatory Redemption." The Trust Securities will be redeemed upon maturity of the Subordinated Notes. The Subordinated Notes mature on , 2025, but the maturity date may be extended only once, for up to an additional 19 years at the option of GWFC, provided certain financial covenants are met. See "Description of the Subordinated Notes--Option to Extend Maturity Date." In addition, upon the occurrence of a Special Event (as defined herein) arising from a change in law or a change in legal interpretation, unless the Subordinated Notes are redeemed in the limited circumstances described herein, the Trust shall be dissolved, with the result that the Subordinated Notes will be distributed to the holders of the Trust Securities, on a pro rata basis. See S-2 "Description of the Offered Preferred Securities-- Special Event Redemption or Distribution." If the Subordinated Notes are distributed to the holders of the Preferred Securities, GWFC will use its best efforts to have the Subordinated Notes listed on the New York Stock Exchange or on such other exchange as the Preferred Securities are then listed. See "Description of the Offered Preferred Securities--Special Event Redemption or Distribution" and "Description of the Subordinated Notes." Upon the occurrence of a Regulatory Event (as defined herein), GWFC may, at its election, reduce the annual interest rate on the Subordinated Notes by 50 basis points (the "Reduction Election"). If GWFC exercises the Reduction Election, on the next Distribution Date occurring at least 30 days after notice to the holders of Trust Securities of the Reduction Election, (i) the Subordinated Notes will be converted into Depositary Shares of GWFC, having a liquidation preference of $25.00 per share (the "Depositary Shares"), each representing a one-tenth interest in a share of % Cumulative Preferred Stock of GWFC, $250 liquidation preference per share (the "Preferred Stock"), unless prior to such conversion the holder of Trust Securities elects not to convert such holder's Subordinated Notes, in which event such holder will be entitled to receive Subordinated Notes with the lower interest rate, and (ii) the Trust shall be dissolved, with the result that the Subordinated Notes with the lower interest rate and/or the Depositary Shares, as the case may be, will be distributed to the holders of the Trust Securities. See "Description of the Offered Preferred Securities--Regulatory Event Distribution or Conversion," "Description of the Subordinated Notes," "Description of Depositary Shares" and "Description of Cumulative Preferred Stock." In the event of the involuntary or voluntary liquidation, dissolution, winding up or termination of the Trust prior to a Reduction Election, the holders of the Preferred Securities will be entitled to receive for each Preferred Security a liquidation amount of $25 plus accrued and unpaid distributions thereon (including interest thereon) to the date of payment, unless, in connection with such dissolution, the Subordinated Notes are distributed to the holders of the Preferred Securities. See "Description of the Offered Preferred Securities--Liquidation Distribution Upon Dissolution." ---------------- IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES OFFERED HEREBY AT LEVELS ABOVE THOSE THAT MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING TRANSACTIONS, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. S-3 RISK FACTORS Prospective purchasers of Preferred Securities should carefully review the information contained elsewhere in this Prospectus Supplement and in the accompanying Prospectus and should particularly consider the following matters: RANKING OF SUBORDINATE OBLIGATIONS UNDER THE GUARANTEE AND SUBORDINATED NOTES GWFC's obligations under the Guarantee are subordinate and junior in right of payment to all liabilities of GWFC and pari passu with the most senior preferred or preference stock outstanding, from time to time, if any, by GWFC. The obligations of GWFC under the Subordinated Notes are subordinate and junior in right of payment to all present and future Senior Indebtedness of GWFC and pari passu with obligations to or rights of GWFC's other general unsecured creditors. As of September 30, 1995, Senior Indebtedness aggregated approximately $673 million. In addition, because GWFC is a holding company, its obligations under the Guarantee and the Subordinated Notes will be effectively subordinated to all existing and future liabilities of its subsidiaries. At September 30, 1995, such subsidiaries had total liabilities of approximately $41.2 billion. There are no terms in the Preferred Securities, the Subordinated Notes or the Guarantee that limit the ability of GWFC or its subsidiaries (other than the Trust) to incur additional indebtedness, including indebtedness that ranks senior to the Subordinated Notes and the Guarantee. See "Description of Guarantee--Status of the Guarantee" and "Description of Debt Securities-- Particular Terms of Subordinated Debt Issued to the Trust" in the accompanying Prospectus, and "Description of the Subordinated Notes--Subordination" herein. RIGHTS UNDER THE GUARANTEE The Guarantee will be qualified as an indenture under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). The First National Bank of Chicago will act as indenture trustee under the Guarantee for the purposes of compliance with the Trust Indenture Act (the "Guarantee Trustee"). The Guarantee Trustee will hold the Guarantee for the benefit of the holders of the Preferred Securities. The Guarantee guarantees to the holders of the Preferred Securities the payment of (i) any accrued and unpaid distributions that are required to be paid on the Preferred Securities, to the extent the Trust has funds available therefor, (ii) the Redemption Price, including all accrued and unpaid distributions with respect to Preferred Securities called for redemption by the Trust, to the extent the Trust has funds available therefor, and (iii) upon a voluntary or involuntary liquidation, dissolution, winding-up or termination of the Trust (other than in connection with the distribution of Subordinated Notes to the holders of Preferred Securities or a redemption of all the Preferred Securities), the lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid distributions on the Preferred Securities to the date of the payment to the extent the Trust has funds available therefor or (b) the amount of assets of the Trust remaining available for distribution to holders of the Preferred Securities in liquidation of the Trust. The holders of a majority in liquidation amount of the Preferred Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee or to direct the exercise of any trust or power conferred upon the Guarantee Trustee under the Guarantee. If GWFC were to default on its obligation to pay amounts payable on the Subordinated Notes, the Trust would lack available funds for the payment of distributions or amounts payable on redemption of the Preferred Securities or otherwise, and, in such event, holders of the Preferred Securities would not be able to rely upon the Guarantee for payment of such amounts. Instead, holders of the Preferred Securities would rely on the enforcement of the rights against GWFC pursuant to the terms of the Subordinated Notes. See "Description of Guarantee" and "Description of Debt Securities--Particular Terms of the Subordinated Debt Securities Issued to the Trust" in the accompanying Prospectus. The Declaration provides that each holder of Preferred Securities, by acceptance thereof, agrees to the provisions of the Guarantee, including the subordinated provisions thereof, and the Subordinated Indenture (as defined in the accompanying Prospectus). ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES If a Declaration Event of Default (as defined herein) occurs and is continuing, then the holders of a majority in aggregate liquidation amount of the Preferred Securities will have the right to direct the time, S-4 method and place of conducting any proceeding for any remedy available to the Property Trustee or to direct the exercise of any trust or power conferred upon the Property Trustee under the Declaration, including the right to direct the Property Trustee to exercise the remedies available to it as a holder of the Subordinated Notes. If an Event of Default with respect to the Subordinated Notes, constituting the failure to pay interest or principal on the Subordinated Notes on the date such interest or principal is otherwise payable, has occurred and is continuing, then a holder of Preferred Securities may directly institute a proceeding for enforcement of payment to such holder directly of the principal of or interest on the Subordinated Notes having a principal amount equal to the aggregate liquidation amount of the Preferred Securities of such holder on or after the respective due date specified in the Subordinated Notes. The holders of Preferred Securities will not be able to exercise directly any other remedy available to the holders of the Subordinated Notes unless the Property Trustee fails to do so. OPTION TO EXTEND INTEREST PAYMENT PERIOD GWFC has the right under the Subordinated Indenture to defer payments of interest on the Subordinated Notes by extending the interest payment period at any time, and from time to time, on the Subordinated Notes in accordance with the terms thereof. As a consequence of such an extension, quarterly distributions on the Preferred Securities would be deferred (but despite such deferral would continue to accrue with interest thereon compounded quarterly) by the Trust during any such extended interest payment period. Such right to extend the interest payment period for the Subordinated Notes is limited to a period not exceeding 20 consecutive quarters. The extension of the interest payment period will not extend the maturity date of the Subordinated Notes. In the event that GWFC exercises this right to defer interest payments, then (a) GWFC shall not, and shall cause any subsidiary of GWFC that is not a wholly owned subsidiary of GWFC not to, declare or pay dividends on, or make any distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any of its capital stock or the capital stock of any such subsidiary and (b) GWFC shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities (including guarantees) issued by GWFC that rank pari passu with or junior to the Subordinated Notes; provided, however, that restriction (a) above does not apply to any stock dividend paid by GWFC, or any of its subsidiaries, where the dividend stock is the same stock as that on which the dividend is being paid. Prior to the termination of any such Extension Period (as defined), GWFC may further extend the interest payment period; provided that such Extension Period, together with all such previous and further extensions thereof, may not exceed 20 consecutive quarters. Upon the termination of any Extension Period and the payment of all amounts then due, GWFC may commence a new Extension Period, as if no Extension Period had previously been declared, subject to the above requirements. See "Description of the Offered Preferred Securities--Distributions" and "Description of the Subordinated Notes--Option to Extend Interest Payment Period." Should GWFC exercise its right to defer payments of interest on the Subordinated Notes by extending the interest payment period thereon, each holder of Preferred Securities will continue to accrue income (as original issue discount) in respect of the deferred interest allocable to its Preferred Securities for United States federal income tax purposes, which will be allocated but not distributed, to holders of record of Preferred Securities. As a result, each such holder of Preferred Securities will recognize income for United States federal income tax purposes in advance of the receipt of cash and will not receive the cash from the Trust related to such income if such holder disposes of its Preferred Securities prior to the record date for the date on which distributions of such amounts are made. GWFC has no intention of exercising its right to defer payments of interest by extending the interest payment period on the Subordinated Notes and considers it unlikely that it will exercise that right in the future. However, should GWFC determine to exercise such right in the future, the market price of the Preferred Securities is likely to be affected. A holder that disposes of its Preferred Securities during an Extension Period, therefore, might not receive the same return on its investment as a holder that continues to hold its Preferred Securities. In addition, as a result of the existence of GWFC's right to defer interest payments, the market price of the Preferred Securities (which represent an undivided beneficial interest in the Subordinated Notes) may be more volatile than other securities on which original issue discount accrues to which such rights do not apply. See "Certain Federal Income Tax Consequences--Original Issue Discount." S-5 SPECIAL EVENT REDEMPTION OR DISTRIBUTION Upon the occurrence of a Special Event, the Trust shall be dissolved, except in the limited circumstance described below under "Description of the Offered Preferred Securities--Special Event Redemption or Distribution," with the result that the Subordinated Notes would be distributed to the holders of the Trust Securities in connection with the liquidation of the Trust. In certain circumstances relating to a Tax Event, GWFC shall have the right to redeem the Subordinated Notes, in whole or in part, in lieu of a distribution of the Subordinated Notes by the Trust, in which event the Trust will redeem the Trust Securities on a pro rata basis to the same extent as the Subordinated Notes are redeemed by GWFC. See "Description of the Offered Preferred Securities--Special Event Redemption or Distribution." There can be no assurance as to the market prices for the Preferred Securities or the Subordinated Notes that may be distributed in exchange for Preferred Securities if a dissolution or liquidation of the Trust were to occur. Accordingly, the Preferred Securities that an investor may purchase, whether pursuant to the offer made hereby or in the secondary market, or the Subordinated Notes that a holder of Preferred Securities may receive on dissolution and liquidation of the Trust, may trade at a discount to the price that the investor paid to purchase the Preferred Securities. Because holders of Preferred Securities may receive Subordinated Notes upon the occurrence of a Special Event, prospective purchasers of Preferred Securities are also making an investment decision with regard to the Subordinated Notes and should carefully review all the information regarding the Subordinated Notes contained herein and in the accompanying Prospectus. See "Description of the Offered Preferred Securities--Special Event Redemption or Distribution" and "Description of the Subordinated Notes." REGULATORY EVENT DISTRIBUTION OR CONVERSION During a period of 90 days after the occurrence of a Regulatory Event, GWFC may elect to reduce the annual interest rate on the Subordinated Notes by 50 basis points effective upon the distribution of the Subordinated Notes (the "Adjusted Subordinated Notes") to the holders of the Trust Securities. If GWFC exercises the Reduction Election, on the next Distribution Date occurring at least 30 days after notice to the holders of Trust Securities of the Reduction Election, (i) the Adjusted Subordinated Notes will be converted into Depositary Shares of GWFC, with a liquidation preference equal to the principal amount of the Adjusted Subordinated Notes converted, each Depositary Share representing a one-tenth interest in a share of % Cumulative Preferred Stock of GWFC, unless prior to such conversion the holder of Trust Securities elects not to convert such holder's Adjusted Subordinated Notes, in which event such holder will be entitled to receive the Adjusted Subordinated Notes and (ii) the Trust shall be dissolved, with the result that the Adjusted Subordinated Notes and/or the Depositary Shares, as the case may be, will be distributed to the holders of the Trust Securities. See "Description of the Offered Preferred Securities-- Regulatory Event Distribution or Conversion," "Description of the Subordinated Notes," "Description of Depositary Shares" and "Description of Cumulative Preferred Stock." There can be no assurance as to the market prices for the Adjusted Subordinated Notes or the Depositary Shares, if distributed to holders of Trust Securities. Accordingly, the Preferred Securities that an investor may purchase, whether pursuant to the offer made hereby or in the secondary market, or the Adjusted Subordinated Notes or Depositary Shares that a holder of Preferred Securities may receive, may trade at a discount to the price that the investor paid to purchase the Preferred Securities. Because holders of Preferred Securities may receive Adjusted Subordinated Notes or Depositary Shares upon the occurrence of a Regulatory Event, prospective purchasers should also consider carefully the information regarding the Subordinated Notes (including the Adjusted Subordinated Notes) and the Depositary Shares contained herein and in the accompanying Prospectus. REGULATORY REDEMPTION EVENT For a period of 90 days after the occurrence of a Regulatory Redemption Event, GWFC may elect to redeem the then outstanding Subordinated Notes or Depositary Shares, in each case in whole only, for cash. See "Description of the Offered Preferred Securities--Regulatory Redemption Event" and "Description of Cumulative Preferred Stock--Redemption." S-6 LIMITED VOTING RIGHTS Holders of Preferred Securities will have limited voting rights and will not be entitled to vote to appoint, remove or replace, or to increase or decrease the number of Regular Trustees, which voting rights are vested exclusively in the holder of the Common Securities. TRADING PRICE The Preferred Securities may trade at a price that does not fully reflect the value of accrued but unpaid interest with respect to the underlying Subordinated Notes. A holder who disposes of his or her Preferred Securities between record dates for payments of distributions thereon will be required to include accrued but unpaid interest on the Subordinated Notes through the date of disposition in income as ordinary income (i.e., OID), and to add such amount to his or her adjusted tax basis in his or her pro rata share of the underlying Subordinated Notes deemed disposed of. To the extent the selling price is less than the holder's adjusted tax basis (which will include, in the form of OID, 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. See "Certain Federal Income Tax Consequences--Original Issue Discount" and "--Sale of Preferred Securities." S-7 RECENT FINANCIAL RESULTS The following table sets forth selected financial data of GWFC and its consolidated subsidiaries for the nine months ended September 30, 1995 and 1994 and at September 30, 1995 and 1994. This selected financial data is derived from GWFC's unaudited consolidated financial statements which are incorporated herein by reference and which include, in the opinion of management, all adjustments (consisting of only normal, recurring accruals) necessary for the fair presentation of the consolidated results of operations and consolidated financial condition of GWFC for the periods and at the dates presented. The operating results for the nine months ended September 30, 1995 are not necessarily indicative of the results to be expected for the full year.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, ------------------------ 1995 1994 ----------- ----------- (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS) SUMMARY OF OPERATIONS Interest income..................................... $ 2,403,824 $ 1,925,107 Interest expense.................................... 1,452,536 922,372 Net interest income................................. 951,288 1,002,735 Provision for loan losses........................... 137,400 154,400 Operating and administrative expenses............... 736,829 745,925 Earnings before taxes on income..................... 268,555 270,660 Taxes on income..................................... 106,100 108,100 Net earnings........................................ 162,455 162,560 Fully diluted earnings per share.................... 1.05 1.08 Cash dividends per common share..................... .69 .69 Ratio of earnings to fixed charges(1) Excluding interest on customer accounts............ 1.46x 2.08x Including interest on customer accounts............ 1.18x 1.29x Ratio of earnings to fixed charges and preferred stock dividends(1): Excluding interest on customer accounts............ 1.39x 1.85x Including interest on customer accounts............ 1.16x 1.24x
AT SEPTEMBER 30, ----------------------- 1995 1994 ----------- ----------- (DOLLARS IN THOUSANDS) SUMMARY OF FINANCIAL CONDITION Cash and securities................................... $ 2,190,674 $ 1,773,218 Loans receivable, net................................. 29,633,224 30,123,801 Mortgage-backed securities............................ 10,532,266 5,825,664 Total assets.......................................... 44,693,014 39,996,606 Customer accounts..................................... 29,432,176 29,406,989 Borrowings............................................ 11,591,999 7,269,743 Stockholders' equity.................................. 2,654,299 2,443,806
- -------- (1) For purposes of computing the ratio of earnings to fixed charges and the ratio of earnings to fixed charges and preferred stock dividends, earnings represent earnings before income taxes and fixed charges. Fixed charges, excluding interest on customer accounts, represent other interest expense (including capitalized interest) and one-third (the proportion deemed representative of the interest factor) of rents. Fixed charges, including interest on customer accounts, represent all interest expense (including capitalized interest) and one-third of rents. S-8 CAPITALIZATION OF GWFC The following table sets forth the unaudited summary capitalization of GWFC and its consolidated subsidiaries as of September 30, 1995, and as adjusted to reflect issuance of [ ] Preferred Securities and the application of the estimated net proceeds therefrom. See "Use of Proceeds" below. The table should be read in conjunction with GWFC's consolidated financial statements and notes thereto and other financial data incorporated by reference herein. See "Incorporation of Certain Documents by Reference" in the accompanying Prospectus.
AT SEPTEMBER 30, 1995 ----------------------- ACTUAL AS ADJUSTED ----------- ----------- (IN THOUSANDS) Borrowings: Federal Home Loan Bank.............................. $ 115,000 $ 115,000 Commercial paper.................................... 1,177,877 1,177,877 Other short-term debt............................... 792,934 792,934 Senior debt......................................... 2,253,165 2,253,165 Securities sold under agreement to repurchase....... 7,253,023 7,253,023 ----------- ----------- Total Borrowings.................................. 11,591,999 11,591,999 Company-Obligated Mandatorily Redeemable Preferred Securities of Great Western Financial Trust I (1).... -- Preferred stock....................................... 294,375 294,375 Common stockholders' equity........................... 2,359,924 2,359,924 ----------- ----------- Total Capitalization.............................. $14,246,298 $ =========== ===========
- -------- (1) As described in this Prospectus Supplement, the sole assets of the Trust will be $ aggregate principal amount of % Subordinated Deferrable Interest Notes due 2025 of GWFC. ACCOUNTING TREATMENT The financial statements of the Trust will be reflected in GWFC's consolidated financial statements with the Preferred Securities shown as Company-obligated preferred securities of subsidiary trust. The sole assets of the Trust will be the Subordinated Notes. USE OF PROCEEDS All of the proceeds from the sale of the Preferred Securities will be invested by the Trust in the Subordinated Notes described herein and ultimately will be used by GWFC for general corporate purposes, which may include investments in or extensions of credit to subsidiaries of GWFC. DESCRIPTION OF THE OFFERED PREFERRED SECURITIES The Preferred Securities will be issued pursuant to the terms of the Declaration. The Declaration will be qualified as an indenture under the Trust Indenture Act. The Property Trustee, The First National Bank of Chicago, will act as the indenture trustee under the Declaration for purposes of compliance with the provisions of the Trust Indenture Act. The terms of the Preferred Securities will include those stated in the Declaration and those made part of the Declaration by the Trust Indenture Act. The following summary of the material terms and provisions of the Preferred Securities does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Declaration, a copy of which is filed as an exhibit to the Registration Statement of which this Prospectus Supplement is a part, the Delaware Business Trust Act (the "Trust Act") and the Trust Indenture Act. S-9 GENERAL The Declaration authorizes the Regular Trustees to issue on behalf of the Trust the Trust Securities, which represent undivided beneficial interests in the assets of the Trust. All of the Common Securities will be owned, directly or indirectly, by GWFC. The Common Securities rank pari passu, and payments will be made thereon on a pro rata basis, with the Preferred Securities, except that upon the occurrence of a Declaration Event of Default, the rights of the holders of the Common Securities to receive payment of periodic distributions and payments upon liquidation, redemption and otherwise will be subordinated to the rights to payment of the holders of the Preferred Securities. The Declaration does not permit the issuance by the Trust of any securities other than the Trust Securities or the incurrence of any indebtedness by the Trust. Pursuant to the Declaration, the Property Trustee will own the Subordinated Notes purchased by the Trust for the benefit of the holders of the Trust Securities. The payment of distributions out of money held by the Trust, and payments upon redemption of the Preferred Securities or liquidation of the Trust, are guaranteed by GWFC to the extent described under "Description of Guarantee" in the accompanying Prospectus. The Guarantee will be held by The First National Bank of Chicago, the Guarantee Trustee, for the benefit of the holders of the Preferred Securities. The Guarantee does not cover payment of distributions when the Trust does not have sufficient available funds to pay such distributions. The Preferred Securities will not be savings accounts or deposits and will not be insured by the Federal Deposit Insurance Corporation (the "FDIC"), the United States or any agency or fund of the United States. DISTRIBUTIONS Distributions on the Preferred Securities will be fixed at a rate per annum of % of the stated liquidation amount of $25 per Preferred Security. Distributions in arrears for more than one quarter will bear interest thereon at the rate per annum of % compounded quarterly. The term "distribution" as used herein includes any such interest payable unless otherwise stated. The amount of distributions payable for any period will be computed on the basis of a 360-day year of twelve 30-day months (or for any period shorter than a full quarterly period, on the basis of the actual number of days elapsed per 30-day month). Distributions on the Preferred Securities will be cumulative, will accrue from , 1995, and will be payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year to the holders of record on the applicable record date, commencing , 199 , when, as and if available for payment, except as otherwise described below. GWFC has the right under the Subordinated Indenture to defer payments of interest on the Subordinated Notes by extending the interest payment period from time to time on the Subordinated Notes, which, if exercised, would defer quarterly distributions on the Preferred Securities (though such distributions would continue to accrue with interest thereon, compounded quarterly (to the extent permitted by applicable law), since interest would continue to accrue on the Subordinated Notes) during any such extended interest payment period. Such right to extend the interest payment period for the Subordinated Notes is limited to a period not exceeding 20 consecutive quarters. In the event that GWFC exercises this right, then (a) GWFC shall not, and shall cause any subsidiary of GWFC that is not a wholly owned subsidiary of GWFC not to, declare or pay dividends on, make any distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any of its capital stock or the capital stock of any such subsidiary and (b) GWFC shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities (including guarantees) issued by GWFC that rank pari passu with or junior to such Subordinated Notes; provided, however, that, the foregoing restriction (a) does not apply to any stock dividend paid by GWFC, or any of its subsidiaries, where the dividend stock is the same stock as that on which the dividend is being paid. Prior to the termination of any such Extension Period, GWFC may further defer payments of interest by extending the interest payment period, provided that such Extension Period, together with all such previous and further extensions thereof, may not exceed 20 consecutive quarters. Upon the termination of any Extension Period and the payment of all amounts then due, GWFC may select a new S-10 Extension Period as if no Extension Period had previously been declared, subject to the above requirements. See "Description of the Subordinated Notes-- Interest" and "--Option to Extend Interest Payment Period." If distributions are deferred, the deferred distributions and accrued interest thereon shall be paid to holders of record of the Preferred Securities as they appear on the books and records of the Trust on the record date next following the termination of such Extension Period. Distributions on the Preferred Securities must be paid on the dates payable to the extent that the Trust has funds available for the payment of such distributions. The Trust's funds available for distribution to the holders of the Preferred Securities will be limited to payments received from GWFC on the Subordinated Notes. See "Description of the Subordinated Notes." The payment of distributions out of moneys held by the Trust is guaranteed by GWFC to the extent set forth under "Description of Guarantee" in the accompanying Prospectus. Distributions on the Preferred Securities will be payable to the holders thereof as they appear on the books and records of the Trust on the relevant record dates, which, as long as the Preferred Securities remain in book-entry only form, will be one Business Day prior to the relevant payment dates. Such distributions will be paid through the Property Trustee who will hold amounts received in respect of the Subordinated Notes for the benefit of the holders of the Trust Securities. Subject to any applicable laws and regulations and the provisions of the Declaration, each such payment will be made as described under "Book-Entry Only Issuance--The Depository Trust Company" below. In the event that the Preferred Securities do not continue to remain in book-entry only form, the Regular Trustees shall have the right to select relevant record dates, which shall be more than one but less than 60 Business Days prior to the relevant payment dates. In the event that any date on which distributions are to be made on the Preferred Securities is not a Business Day, then payment of the distributions payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such distribution date. A "Business Day" shall mean any day other than Saturday, Sunday or any other day on which banking institutions in the City of New York or Los Angeles, California are authorized or required by any applicable law to close. MANDATORY REDEMPTION The Subordinated Notes will mature on , 2025, unless the maturity date is extended at the option of GWFC (provided certain financial covenants are met), and may be redeemed, in whole or in part, at any time on or after , 2000, or at any time in certain circumstances upon the occurrence of a Tax Event or in whole for a limited time upon the occurrence of a Regulatory Redemption Event. Upon the repayment of the Subordinated Notes, whether at maturity or upon redemption, the proceeds from such repayment or payment shall simultaneously be applied to redeem Trust Securities having an aggregate liquidation amount equal to the aggregate principal amount of the Subordinated Notes so repaid or redeemed at the Redemption Price; provided that, holders of Trust Securities shall be given not less than 30 nor more than 60 days notice of such redemption. See "Description of the Subordinated Notes--Optional Redemption." SPECIAL EVENT REDEMPTION OR DISTRIBUTION "Tax Event" means that the Regular Trustees shall have received an opinion from independent tax counsel experienced in such matters (a "Dissolution Tax Opinion") 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, with respect to clause (iii) below, any political subdivision or taxing authority thereof or therein or (b) any amendment to, or change in, an interpretation or application of such laws or regulations, there is more than an insubstantial risk that (i) the Trust would be subject to United S-11 States federal income tax with respect to income accrued or received on the Subordinated Notes, (ii) interest payable to the Trust on the Subordinated Notes would not be deductible by GWFC for United States federal income tax purposes or (iii) the Trust would be subject to more than a de minimis amount of other taxes, duties or other governmental charges, which change or amendment is enacted (irrespective of any retroactive effect) on or after the date of this Prospectus Supplement. "Investment Company Event" means that the Regular Trustees shall have received an opinion from independent counsel experienced in such matters to the effect that, as a result of the occurrence of a change in law or regulation or a written change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in 1940 Act Law"), there is more than an insubstantial risk that the Trust is or will within 90 days of the date of such opinion be considered an "investment company" which is required to be registered under the Investment Company Act of 1940, as amended (the "1940 Act"), which Change in 1940 Act Law becomes effective on or after the date of this Prospectus Supplement. If, at any time, a Tax Event or an Investment Company Event (each, as defined above, a "Special Event") shall occur and be continuing, the Trust shall, except in the circumstances described below, be dissolved with the result that Subordinated Notes with an aggregate principal amount equal to the aggregate stated liquidation amount of the Trust Securities would be distributed to the holders of the Trust Securities, in liquidation of such holders' interests in the Trust on a pro rata basis, within 90 days following the occurrence of such Special Event; provided, however, that in the case of the occurrence of a Tax Event, as a condition of such dissolution and distribution, the Regular Trustees shall have received an opinion from independent tax counsel experienced in such matters (a "No Recognition Opinion"), which opinion may rely on published revenue rulings of the Internal Revenue Service, to the effect that the holders of the Trust Securities will not recognize any gain or loss for United States federal income tax purposes as a result of such dissolution and distribution of Subordinated Notes; and provided, further, that, if at the time there is available to the Trust the opportunity to eliminate, within such 90 day period, the Special Event by taking some ministerial action, such as filing a form or making an election, or pursuing some other similar reasonable measure, which has no adverse effect on the Trust, GWFC or the holders of the Trust Securities, the Trust will pursue such measure in lieu of such dissolution and distribution. Furthermore, if in the case of the occurrence of a Tax Event, (i) GWFC has received an opinion (a "Redemption Tax Opinion") from independent tax counsel experienced in such matters that, as a result of a Tax Event, there is more than an insubstantial risk that GWFC would be precluded from deducting the interest on the Subordinated Notes for United States federal income tax purposes even if the Subordinated Notes were distributed to the holders of Trust Securities in liquidation of such holders' interests in the Trust as described above or (ii) the Regular Trustees shall have been informed by such tax counsel that a No Recognition Opinion cannot be delivered, GWFC shall have the right, upon not less than 30 nor more than 60 days notice, to redeem the Subordinated Notes in whole or in part for cash within 90 days following the occurrence of such Tax Event, and, following such redemption, Trust Securities with an aggregate liquidation amount equal to the aggregate principal amount of the Subordinated Notes so redeemed shall be redeemed by the Trust at the Redemption Price on a pro rata basis; provided, however, that, if at the time there is available to GWFC or the Trust the opportunity to eliminate, within such 90 day period, the Tax Event by taking some ministerial action, such as filing a form or making an election, or pursuing some other similar reasonable measure which has no adverse effect on the Trust, or the holders of the Trust Securities or GWFC, the Trust or GWFC will pursue such measure in lieu of redemption. If Subordinated Notes are distributed to the holders of the Preferred Securities, GWFC will use its best efforts to have the Subordinated Notes listed on the New York Stock Exchange or on such other exchange as the Preferred Securities are then listed. After the date for any distribution of Subordinated Notes upon dissolution of the Trust, (i) the Preferred Securities and Guarantee will no longer be deemed to be outstanding, (ii) the depositary or its nominee, as the record holder of the Preferred Securities, will receive a registered global certificate or certificates S-12 representing the Subordinated Notes to be delivered upon such distribution and (iii) any certificates representing Preferred Securities and the Guarantee not held by the depositary or its nominee will be deemed to represent Subordinated Notes having an aggregate principal amount equal to the aggregate stated liquidation amount of such Preferred Securities, until such certificates are presented to GWFC or its agent for transfer or reissuance. There can be no assurance as to the market prices for the Preferred Securities or the Subordinated Notes that may be distributed in exchange for the Preferred Securities if a dissolution and liquidation of the Trust were to occur. Accordingly, the Preferred Securities that an investor may purchase, or the Subordinated Notes that the 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 Preferred Securities. REGULATORY EVENT DISTRIBUTION OR CONVERSION "Regulatory Event" means that (i) GWFC (or its successor) is, becomes or pursuant to law or regulation will become within 180 days, subject to capital requirements under which all or any portion of the Preferred Securities would not constitute Tier 1 capital (as that concept is used in the guidelines or regulations issued by the Board of Governors of the Federal Reserve System as of the date of this Prospectus Supplement) or its then equivalent ("Tier 1 Capital"), and (ii) as a result, based upon GWFC's then existing capital ratios, GWFC would, within 180 days, fail to be "well capitalized" (as that term is defined in 12 CFR (S)208.33(b)(1) of the regulations promulgated by the Board of Governors of the Federal Reserve System as if GWFC were a state member bank and as applied to bank holding companies or, in the event that section is eliminated, to a reasonably equivalent standard applicable to bank holding companies). The Regulatory Event will be deemed to occur on the date the condition in clause (ii) is satisfied. GWFC shall promptly notify the Regular Trustees of the occurrence of a Regulatory Event. During a period of 90 days after the occurrence of a Regulatory Event, GWFC may notify the Regular Trustees in writing that GWFC has elected to reduce the annual interest rate on all of the outstanding Subordinated Notes by 50 basis points (i.e. from % per annum to % per annum) effective upon distribution of the Adjusted Subordinated Notes to the holders of the Trust Securities; provided, however, that if GWFC has elected to defer payments of interest on the Subordinated Notes as described under "Distributions" above, all deferred distributions and accrued interest thereon shall be paid before the Adjusted Subordinated Notes are distributed. If GWFC elects to lower the annual interest rate on the Subordinated Notes as described above, at least 30 but not more than 60 days prior to the distribution of the Adjusted Subordinated Notes, notice of such election will be sent to the holders of the Trust Securities. Such notice will state (i) that a Regulatory Event has occurred and that GWFC has elected to reduce the interest rate on the Subordinated Notes, (ii) that on the specified date (which shall be the next Distribution Date occurring at least 30 days after the date of such notice), the Adjusted Subordinated Notes will be converted into Depositary Shares with a liquidation preference equal to the principal amount of the Adjusted Subordinated Notes converted, unless prior to such conversion the holder of Trust Securities elects not to convert such holder's Adjusted Subordinated Notes, in which case such holder will be entitled to receive the Adjusted Subordinated Notes, (iii) that the Trust will be dissolved and that the holders of Trust Securities will receive Adjusted Subordinated Notes and/or Depositary Shares, as the case may be, (iv) the date upon which the Adjusted Subordinated Notes and/or Depositary Shares, as the case may be, will be distributed, and (v) the procedure for a holder of Trust Securities to exercise his or her right not to have the Adjusted Subordinated Notes to which such holder is entitled converted into Depositary Shares. See "Description of Depositary Shares" and "Description of Cumulative Preferred Stock" for a description of the terms of the Depositary Shares and the related Preferred Stock. If GWFC elects to lower the annual interest rate on the Subordinated Notes, on the next Distribution Date occurring at least 30 days after notice to the holders of Trust Securities as described in the previous paragraph, (i) the Adjusted Subordinated Notes will be converted into Depositary Shares of GWFC having a S-13 liquidation preference equal to the principal amount of the Adjusted Subordinated Notes converted, each Depositary Share representing a one-tenth interest in a share of % Cumulative Preferred Stock of GWFC, unless prior to such conversion the holder of Trust Securities elects not to convert such holder's Adjusted Subordinated Notes, in which event such holder will be entitled to receive the Adjusted Subordinated Notes, and (ii) the Trust shall be dissolved, with the result that the Adjusted Subordinated Notes and/or the Depositary Shares, as the case may be, will be distributed to the holders of the Trust Securities. If Adjusted Subordinated Notes and/or Depositary Shares are distributed to any holder of Preferred Securities, GWFC will use its best efforts to have the Adjusted Subordinated Notes and the Depositary Shares, as the case may be, listed on the New York Stock Exchange or on such other exchange as the Preferred Securities are then listed. GWFC will not attempt to have Adjusted Subordinated Notes listed on any exchange if it has given notice of its intent to redeem such Adjusted Subordinated Notes as described under "Description of the Subordinated Notes--Optional Redemption." After the date for any distribution of Adjusted Subordinated Notes, upon dissolution of the Trust,(i) the Preferred Securities and Guarantee will no longer be deemed to be outstanding, (ii) the depositary or its nominee, as the record holder of the Preferred Securities, will receive a registered global certificate or certificates representing the Adjusted Subordinated Notes or the Depositary Shares, as the case may be, to be delivered upon such distribution and (iii) any certificates representing Preferred Securities not held by the depositary or its nominee will be deemed to represent Adjusted Subordinated Notes having an aggregate principal amount, or Depositary Shares having an aggregate stated liquidation amount, as the case may be, equal to the aggregate stated liquidation amount of such Preferred Securities, until such certificates are presented to GWFC or its agent for transfer or reissuance. There can be no assurance as to the market prices for the Preferred Securities, the Adjusted Subordinated Notes or the Depositary Shares that may be distributed in exchange for the Preferred Securities if a dissolution and liquidation of the Trust were to occur. Accordingly, the Preferred Securities that an investor may purchase, or the Adjusted Subordinated Notes or the Depositary Shares that the 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 Preferred Securities. REGULATORY REDEMPTION EVENT "Regulatory Redemption Event" means that (i) GWFC (or its successor) is, becomes or pursuant to law or regulation will become within 180 days, subject to capital requirements under which all or any portion of the Preferred Securities would not constitute Tier 1 Capital and (ii) (a) a bank, savings and loan association, savings bank, or bank or savings and loan holding company (each a "Depository Institution") has issued or has been the sponsor of a trust or other entity (including but not limited to a general or limited partnership or limited liability company) that has issued securities that constitute Tier 1 Capital, and which issued securities, or the securities underlying such issued securities, are to be treated by such Depository Institution as indebtedness for U.S. federal income tax purposes, as evidenced by the disclosure document pursuant to which such securities were offered, and (b) GWFC has within 90 days of such issuance, received an opinion of independent counsel experienced in such matters that securities having substantially identical terms (except for rate, maturity and payment dates), if issued by GWFC or by a GWFC sponsored trust or other entity, should constitute Tier 1 Capital for GWFC if the securities issued by such Depository Institution constituted Tier 1 Capital and should be treated as indebtedness for U.S. federal income tax purposes. GWFC shall promptly notify the Regular Trustees of the occurrence of a Regulatory Redemption Event. During a period of 90 days following the occurrence of a Regulatory Redemption Event, GWFC may elect to redeem the Subordinated Notes (which may be in the form of Adjusted Subordinated Notes) in whole only, for cash. See "Description of the Subordinated Notes--Optional Redemption." See also "Description of Cumulative Preferred Stock--Redemption" for a description of the possible redemption of Depositary Shares, if issued, upon the occurrence of a Regulatory Redemption Event. If GWFC elects to redeem the Subordinated Notes for cash, the written notice of its election shall specify a date for such redemption, which shall not be less than 30 nor more than 60 days after such notice. Upon S-14 the redemption of the Subordinated Notes, the Trust Securities, if still outstanding, with an aggregate liquidation amount equal to the aggregate principal amount of the Subordinated Notes so redeemed shall be redeemed by the Trust at the Redemption Price. REDEMPTION PROCEDURES The Trust may not redeem fewer than all of the outstanding Preferred Securities unless all accrued and unpaid distributions have been paid on all Preferred Securities for all quarterly distribution periods terminating on or prior to the date of redemption. If the Trust gives a notice of redemption in respect of Preferred Securities (which notice will be irrevocable), then by 12:00 noon, New York City time, on the redemption date, and if GWFC has paid to the Property Trustee a sufficient amount of cash in connection with the related redemption or maturity of the Subordinated Notes, then GWFC through the Property Trustee will irrevocably deposit with the depositary funds sufficient to pay the applicable Redemption Price and will give the depositary irrevocable instructions and authority to pay the Redemption Price to holders of the Preferred Securities. See "Book- Entry Only Issuance--The Depository Trust Company" below. If notice of redemption shall have been given and funds deposited as required, then, immediately prior to the close of business on the date of such deposit or redemption date, if later, distributions will cease to accrue and all rights of holders of such Preferred Securities so called for redemption will cease, except the right of the holders of such Preferred Securities to receive the Redemption Price but without interest on such Redemption Price. In the event that any date fixed for redemption of Preferred Securities is not a Business Day, then payment of the Redemption Price payable on such date will be made on the next succeeding day that is a Business Day (without any interest or other payment in respect of any such delay), except that, if such Business Day falls in the next calendar year, such payment will be made on the immediately preceding Business Day. In the event that payment of the Redemption Price in respect of Preferred Securities is improperly withheld or refused and not paid either by the Trust, or by GWFC pursuant to the Guarantee, distributions on such Preferred Securities will continue to accrue at the then applicable rate from the original redemption date to the actual date of payment, in which case the actual payment date will be considered the date fixed for redemption for purposes of calculating the Redemption Price. In the event that fewer than all of the outstanding Preferred Securities are to be redeemed, the Preferred Securities will be redeemed pro rata as described below under "Book-Entry Only Issuance--The Depository Trust Company" below; provided, however, that if the partial redemption of the Preferred Securities would result in the delisting of the Preferred Securities, Preferred Securities may only be redeemed in whole. Subject to the foregoing and applicable law (including, without limitation, United States federal securities laws), GWFC or its subsidiaries may at any time, and from time to time, purchase outstanding Preferred Securities by tender, in the open market or by private agreement, provided that the acquiror is not the holder of the Common Securities or the obligor under the Subordinated Indenture. LIQUIDATION DISTRIBUTION UPON DISSOLUTION In the event of any voluntary or involuntary liquidation, dissolution, winding-up or termination of the Trust (each a "Liquidation"), the then holders of the Preferred Securities will be entitled to receive out of the assets of the Trust, after satisfaction of liabilities to creditors, an amount equal to the aggregate of the stated liquidation amount of $25 per Preferred Security plus accrued and unpaid distributions thereon to the date of payment (the "Liquidation Distribution"), unless, in connection with such Liquidation, Subordinated Notes, Adjusted Subordinated Notes and/or Depositary Shares, as the case may be, in an aggregate stated principal or liquidation amount, as applicable, equal to the aggregate stated liquidation amount of the Preferred Securities have been distributed on a pro rata basis to the holders of the Preferred Securities in exchange for such Preferred Securities. If, upon any such Liquidation, the Liquidation Distribution can be paid only in part because the Trust has insufficient assets available to pay in full the aggregate Liquidation Distribution, then the amounts payable S-15 directly by the Trust on the Preferred Securities shall be paid on a pro rata basis. The holders of the Common Securities will be entitled to receive distributions upon any such dissolution pro rata with the holders of the Preferred Securities, except that if a Declaration Event of Default has occurred and is continuing, the Preferred Securities shall have a preference over the Common Securities with regard to such distributions. Pursuant to the Declaration, the Trust shall terminate (i) on , 2050, the expiration of the term of the Trust, (ii) upon the bankruptcy of GWFC or the holder of the Common Securities, (iii) upon the filing of a certificate of dissolution or its equivalent with respect to the holder of the Common Securities or GWFC, the filing of a certificate of cancellation with respect to the Trust, or the revocation of the charter of the holder of the Common Securities or GWFC and the expiration of 90 days after the date of revocation without a reinstatement thereof, (iv) upon the distribution of Subordinated Notes upon the occurrence of a Special Event or upon the distribution of Adjusted Subordinated Notes and/or Depositary Shares as a result of a Regulatory Event, (v) upon the entry of a decree of a judicial dissolution of the holder of the Common Securities, GWFC or the Trust, or (vi) upon the redemption of all the Trust Securities. DECLARATION EVENTS OF DEFAULT An event of default under the Subordinated Indenture (an "Indenture Event of Default") constitutes an event of default under the Declaration with respect to the Trust Securities (a "Declaration Event of Default"); provided that, pursuant to the Declaration, the holder of the Common Securities will be deemed to have waived any Declaration Event of Default with respect to the Common Securities until all Declaration Events of Default with respect to the Preferred Securities have been cured, waived or otherwise eliminated. Until such Declaration Events of Default with respect to the Preferred Securities have been so cured, waived, or otherwise eliminated, the Property Trustee will be deemed to be acting solely on behalf of the holders of the Preferred Securities and only the holders of the Preferred Securities will have the right to direct the Property Trustee with respect to certain matters under the Declaration, and therefore the Subordinated Indenture. See "Voting Rights" below. Upon the occurrence of a Declaration Event of Default, the Property Trustee as sole holder of the Subordinated Notes will have the right under the Subordinated Indenture to declare the principal of and interest on the Subordinated Notes to be immediately due and payable. GWFC and the Trust are each required to file annually with the Property Trustee an officer's certificate as to its compliance with all conditions and covenants under the Declaration. If an Event of Default with respect to the Subordinated Notes, constituting the failure to pay interest or principal on the Subordinated Notes on the date such interest or principal is otherwise payable, has occurred and is continuing, then a holder of Trust Securities may directly institute a proceeding for enforcement of payment to such holder directly of the principal of or interest on the Subordinated Notes having a principal amount equal to the aggregate liquidation amount of the Trust Securities of such holder on or after the respective due date specified in the Subordinated Notes. The holders of Trust Securities will not be able to exercise directly any other remedy available to the holders of the Subordinated Notes unless the Property Trustee fails to do so. VOTING RIGHTS Except as described herein, under the Trust Act, the Trust Indenture Act and under "Description of Guarantee--Modifications of the Guarantee; Assignment" in the accompanying Prospectus, and as otherwise required by law and the Declaration, the holders of the Preferred Securities will have no voting rights. Subject to the requirement of the Property Trustee obtaining a tax opinion in certain circumstances set forth in the last sentence of this paragraph, the holders of a majority in aggregate liquidation amount of the Preferred Securities, voting separately as a class, have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Property Trustee, or to direct the exercise of any trust or power conferred upon the Property Trustee under the Declaration, including the right to direct the Property Trustee, as holder of the Subordinated Notes, to (i) exercise the remedies available under the Indenture with respect to the Subordinated Notes, (ii) waive any past Indenture Event of Default that is S-16 waivable under the Subordinated Indenture, or (iii) exercise any right to rescind or annul a declaration that the principal of all the Subordinated Notes shall be due and payable; provided, however, that, where a consent or action under the Subordinated Indenture would require the consent or act of more than a majority of the holders in aggregate principal amount of Subordinated Notes (a "Super-Majority") affected thereby (or all of such holders, as applicable), only the holders of at least such Super-Majority of the Preferred Securities (or all of such holders, as applicable) may direct the Property Trustee to give such consent to take such action. The Property Trustee shall notify all holders of the Preferred Securities of any notice of default received from the Indenture Trustee with respect to the Subordinated Notes. Such notice shall state that such Indenture Event of Default also constitutes a Declaration Event of Default. Except with respect to directing the time, method and place of conducting a proceeding for a remedy, the Property Trustee shall not take any of the actions described in clauses (i), (ii) or (iii) above unless the Property Trustee has obtained an opinion of independent tax counsel experienced in such matters to the effect that, as a result of such action, the Trust will not fail to be classified as a grantor trust for United States federal income tax purposes. In the event the consent of the Property Trustee, as the holder of the Subordinated Notes, is required under the Subordinated Indenture with respect to any amendment, modification or termination of the Subordinated Indenture, the Property Trustee shall request the direction of the holders of the Trust Securities with respect to such amendment, modification or termination and shall vote with respect to such amendment, modification or termination as directed by a majority in liquidation amount of the Trust Securities voting together as a single class; provided, however, that where a consent under the Subordinated Indenture would require the consent of a Super Majority, the Property Trustee may only give such consent at the direction of the holders of at least the proportion in liquidation amount of the Trust Securities which the relevant Super Majority represents of the aggregate principal amount of the Subordinated Notes outstanding. The Property Trustee shall not take any such action in accordance with the directions of the holders of the Trust Securities unless the Property Trustee has obtained an opinion of independent tax counsel experienced in such matters to the affect that for the purposes of United States federal income tax the Trust will not be classified as other than a grantor trust. A waiver of an Indenture Event of Default will constitute a waiver of the corresponding Declaration Event of Default. Any required approval or direction of holders of Preferred Securities may be given at a separate meeting of holders of Preferred Securities convened for such purpose, at a meeting of all of the holders of Trust Securities or pursuant to written consent. The Regular Trustees will cause a notice of any meeting at which holders of Preferred Securities are entitled to vote, or of any matter upon which action by written consent of such holders is to be taken, to be mailed to each holder of record of Preferred Securities. Each such notice will include a statement setting forth the following information: (i) the date of such meeting or the date by which such action is to be taken; (ii) a description of any resolution proposed for adoption at such meeting on which such holders are entitled to vote or of such matter upon which written consent is sought; and (iii) instructions for the delivery of proxies or consents. No vote or consent of the holders of Preferred Securities will be required for the Trust to redeem and cancel Preferred Securities or distribute Subordinated Notes, Adjusted Subordinated Notes or Depositary Shares in accordance with the Declaration. The Regular Trustees shall be obligated to call a meeting of the holders of the Preferred Securities if directed to do so by the holders of at least 10% in liquidation amount of the Preferred Securities requesting such meeting in accordance with the terms of the Declaration. Notwithstanding that holders of Preferred Securities are entitled to vote or consent under any of the circumstances described above, any of the Preferred Securities that are owned at such time by GWFC or any entity directly or indirectly controlling or controlled by, or under direct or indirect common control with, GWFC shall not be entitled to vote or consent and shall, for purposes of such vote or consent, be treated as if such Preferred Securities were not outstanding. The procedures by which holders of Preferred Securities may exercise their voting rights are described below. See "Book-Entry Only Issuance--The Depository Trust Company" below. S-17 Holders of the Preferred Securities will have no rights to appoint or remove the Regular Trustees, who may be appointed, removed or replaced solely by GWFC as the indirect or direct holder of all the Common Securities. MODIFICATION OF THE DECLARATION The Declaration may be modified and amended if approved by a majority of the Regular Trustees (and in certain circumstances the Property Trustee), provided that, if any proposed amendment provides for, or the Regular Trustees otherwise propose to effect, (i) any action that would adversely affect the powers, preferences or special rights of the Trust Securities, whether by way of amendment to the Declaration or otherwise, or (ii) the liquidation, dissolution, winding-up or termination of the Trust other than pursuant to the terms of the Declaration, then the holders of the Trust Securities voting together as a single class will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of at least 66 2/3% in liquidation amount of the Trust Securities; provided that, if any amendment or proposal referred to in clause (i) above would adversely affect only the Preferred Securities or the Common Securities, then only the affected class will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of 66 2/3% in liquidation amount of such class of Trust Securities. Notwithstanding the foregoing, no amendment or modification may be made to the Declaration if such amendment or modification would (i) cause the Trust to be classified for purposes of United States federal income taxation as other than a grantor trust, (ii) reduce or otherwise adversely affect the powers of the Property Trustee in contravention of the Trust Indenture Act or (iii) cause the Trust to be deemed an "investment company" which is required to be registered under the 1940 Act. MERGERS, CONSOLIDATIONS OR AMALGAMATIONS The Trust may not consolidate, amalgamate, merge or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to, any corporation or other body, except as described below. The Trust may, with the consent of a majority of the Regular Trustees and without the consent of the holders of the Trust Securities, consolidate, amalgamate, merge with or into, or be replaced by a trust organized as such under the laws of any State; provided that, (i) such successor entity either (x) expressly assumes all of the obligations of the Trust under the Trust Securities or (y) substitutes for the Trust Securities other securities having substantially the same terms of the Trust Securities (the "Successor Securities"), so long as the Successor Securities rank the same as the Trust Securities rank with respect to distributions and payments upon liquidation, redemption and otherwise, (ii) GWFC expressly acknowledges a trustee of such successor entity possessing the same powers and duties as the Property Trustee as the holder of the Subordinated Notes, (iii) the Preferred Securities or any Successor Securities are listed, or any Successor Securities will be listed upon notification of issuance, on any national securities exchange or with another organization on which the Preferred Securities are then listed or quoted, (iv) such merger, consolidation, amalgamation or replacement does not cause the Preferred Securities (including any Successor Securities) to be downgraded by any nationally recognized statistical rating organization, (v) such merger, consolidation, amalgamation or replacement does not adversely affect the rights, preferences and privileges of the holders of the Trust Securities (including any Successor Securities) in any material respect (other than with respect to any dilution of the holders' interest in the new entity), (vi) such successor entity has a purpose identical to that of the Trust, (vii) prior to such merger, consolidation, amalgamation or replacement, GWFC has received an opinion of independent counsel to the Trust experienced in such matters to the effect that, (A) such merger, consolidation, amalgamation or replacement does not adversely affect the rights, preferences and privileges of the holders of the Trust Securities (including any Successor Securities) in any material respect (other than with respect to any dilution of the holders' interest in the new entity), and (B) following such merger, consolidation, amalgamation or replacement, neither the Trust nor such successor entity will be required to register as an investment company under the 1940 Act and (viii) GWFC guarantees the obligations of such successor entity under the Successor Securities at least to the extent provided by the Guarantee and the Common Securities guarantee (as defined in the accompanying Prospectus). 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 any other entity or permit any other entity to S-18 consolidate, amalgamate, merge with or into, or replace it, if such consolidation, amalgamation, merger or replacement would cause the Trust or such successor entity to be classified as other than a grantor trust for United States federal income tax purposes. There are no provisions which afford the holders of the Preferred Securities protection in the event of a highly leveraged transaction, reorganization, restructuring, merger or similar transaction involving GWFC. There are also no provisions which require the repurchase of the Preferred Securities upon a change in control of GWFC. BOOK-ENTRY ONLY ISSUANCE--THE DEPOSITORY TRUST COMPANY The Depository Trust Company ("DTC") will act as initial securities depositary for the Preferred Securities. The Preferred Securities will be issued only as fully-registered securities registered in the name of Cede & Co. (DTC's nominee). One or more fully-registered global Preferred Securities certificates, representing the total aggregate number of Preferred Securities, will be issued to or on behalf of DTC. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of securities in definitive form. Such laws may impair the ability to transfer beneficial interests in the global Preferred Securities as represented by a global certificate. DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations ("Direct Participants"). DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others, such as securities brokers and dealers, banks and trust companies that clear transactions through or maintain a direct or indirect custodial relationship with a Direct Participant either directly or indirectly ("Indirect Participants"). The rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. Purchases of Preferred Securities within the DTC system must be made by or through Direct Participants, which will receive a credit for the Preferred Securities on DTC's records. The ownership interest of each actual purchaser of each Preferred Security ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchases, but Beneficial Owners are expected to receive written confirmations providing details of the transactions, as well as periodic statements of their holdings, from the Direct or Indirect Participants through which the Beneficial Owners purchased Preferred Securities. Transfers of ownership interests in the Preferred Securities are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Preferred Securities, except in the event that use of the book-entry system for the Preferred Securities is discontinued. To facilitate subsequent transfers, all the Preferred Securities deposited by Participants with DTC are registered in the name of DTC's nominee, Cede & Co. The deposit of Preferred Securities with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Preferred Securities. DTC's records reflect only the identity of the Direct Participants to whose accounts such Preferred Securities are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. S-19 Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements that may be in effect from time to time. Redemption notices shall be sent to Cede & Co. If less than all of the Preferred Securities are being redeemed, DTC will reduce the amount of the interest of each Direct Participant in such Preferred Securities in accordance with its procedures; provided that if, as a result of such redemption, Direct Participants would hold fractional interests in the Preferred Securities, DTC will adjust the amount of the interest of each Direct Participant to be redeemed to avoid such fractional interest. Although voting with respect to the Preferred Securities is limited, in those cases where a vote is required, neither DTC nor Cede & Co. will itself consent or vote with respect to Preferred Securities. Under its usual procedures, DTC would mail an Omnibus Proxy to the Trust as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. consenting or voting rights to those Direct Participants to whose accounts the Preferred Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). GWFC and the Trust believe that the arrangements among DTC, Direct and Indirect Participants, and Beneficial Owners will enable the Beneficial Owners to exercise rights equivalent in substance to the rights that can be directly exercised by a holder of a beneficial interest in the Trust. Distribution payments on the Preferred Securities will be made to DTC. DTC's practice is to credit Direct Participants' accounts on the relevant payment date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payments on such payment date. Payments by participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the account of customers in bearer form or registered in "street name," and such payments will be the responsibility of such Participant and not of DTC, the Trust or GWFC, subject to any statutory or regulatory requirements to the contrary that may be in effect from time to time. Payment of distributions to DTC is the responsibility of the Trust, disbursement of such payments to the Beneficial Owners is the responsibility of Direct and Indirect Participants. Except as provided herein, a Beneficial Owner in a global Preferred Security certificate will not be entitled to receive physical delivery of Preferred Securities. Accordingly, each Beneficial Owner must rely on the procedures of DTC to exercise any rights under the Preferred Securities. DTC may discontinue providing its services as securities depositary with respect to the Preferred Securities at any time by giving reasonable notice to the Trust. Under such circumstances, in the event that a successor securities depositary is not obtained, Preferred Securities certificates are required to be printed and delivered. Additionally, the Regular Trustees (with the consent of GWFC) may decide to discontinue use of the system of book-entry transfers through DTC (or any successor depositary) with respect to the Preferred Securities. In that event, certificates for the Preferred Securities will be printed and delivered. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that GWFC and the Trust believe to be reliable, but neither GWFC nor the Trust takes responsibility for the accuracy thereof. INFORMATION CONCERNING THE PROPERTY TRUSTEE The Property Trustee, prior to the occurrence of a default with respect to the Trust Securities, undertakes to perform only such duties as are specifically set forth in the Declaration and, after default, shall exercise the same degree of care as a prudent individual would exercise in the conduct of his or her own affairs. Subject to such provisions, the Property Trustee is under no obligation to exercise any of the powers vested in it by the Declaration at the request of any holder of Preferred Securities, unless offered reasonable indemnity by such holder against the costs, expenses and liabilities which might be incurred thereby. S-20 PAYING AGENT In the event that the Preferred Securities do not remain in book-entry only form, the following provisions would apply: The Property Trustee will act as paying agent, and may designate an additional or substitute paying agent at any time. Registration of transfers of Preferred Securities will be effected without charge by or on behalf of the Trust, but upon payment (with the giving of such indemnity as the Trust or GWFC may require) in respect of any tax or other government charges that may be imposed in relation to it. The Trust will not be required to register or cause to be registered the transfer of Preferred Securities after such Preferred Securities have been called for redemption. GOVERNING LAW The Declaration and the Preferred Securities will be governed by, and construed in accordance with, the internal laws of the State of Delaware. MISCELLANEOUS The Regular Trustees are authorized and directed to operate the Trust in such a way so that the Trust will not be required to register as an "investment company" under the 1940 Act or be characterized as other than a grantor trust for United States federal income tax purposes. GWFC is authorized and directed to conduct its affairs so that the Subordinated Notes will be treated as indebtedness of GWFC for United States federal income tax purposes. In this connection, GWFC and the Regular Trustees are authorized to take any action, not inconsistent with applicable law, the certificate of trust of the Trust or the certificate of incorporation of GWFC, as applicable, that each of GWFC and the Regular Trustees determines in its discretion to be necessary or desirable to achieve such end, as long as such action does not adversely affect the interests of the holders of the Preferred Securities. Holders of the Preferred Securities have no preemptive rights. DESCRIPTION OF THE SUBORDINATED NOTES Set forth below is a description of the specific terms of the Subordinated Notes in which the Trust will invest the proceeds from the issuance and sale of the Trust Securities. This description supplements the description of the general terms and provisions of the Subordinated Notes set forth in the accompanying Prospectus under the caption "Description of Debt Securities" and in particular "Description of Debt Securities--Particular Terms of the Subordinated Debt Securities Issued to the Trust." The following description of the material terms and provisions of the Subordinated Notes does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the description in the accompanying Prospectus and the Indenture, dated as of September 12, 1990, as amended and supplemented by a First Supplemental Indenture, dated April 30, 1993 and a Second Supplemental Indenture, dated as of , 1995 (as amended and supplemented, the "Subordinated Indenture"), between the Company and Harris Trust and Savings Bank, as Indenture Trustee, filed as an exhibit to the Registration Statement of which this Prospectus Supplement and the accompanying Prospectus form a part. Certain capitalized terms used herein are defined in the Subordinated Indenture. Under certain circumstances involving the dissolution of the Trust following the occurrence of a Special Event or Regulatory Event, Subordinated Notes or Adjusted Subordinated Notes may be distributed to the holders of the Trust Securities in liquidation of the Trust. See "Description of the Offered Preferred Securities--Special Event Redemption or Distribution" and "-- Regulatory Event Distribution or Conversion." S-21 If the Subordinated Notes or Adjusted Subordinated Notes are distributed to the holders of the Preferred Securities, GWFC will use its best efforts to have the Subordinated Notes or Adjusted Subordinated Notes, as the case may be, listed on the New York Stock Exchange or on such other exchange on which the Preferred Securities are then listed or quoted. The terms of the Adjusted Subordinated Notes, if issued, will be identical to the terms of the Subordinated Notes, except for the reduction of the annual interest rate. The following discussion of the terms of the Subordinated Notes applies to the Adjusted Subordinated Notes, except as otherwise expressly stated. The Subordinated Notes will not be savings accounts or deposits and will not be insured by the FDIC, the United States or any agency or fund of the United States. GENERAL The Subordinated Notes will be issued as unsecured debt under the Subordinated Indenture. The Subordinated Notes will be limited in aggregate principal amount to approximately $[ ], such amount being the sum of the aggregate stated liquidation of the Preferred Securities and the capital contributed by GWFC in exchange for the Common Securities (the "GWFC Payment"). The Subordinated Notes are not subject to a sinking fund provision. The entire principal amount of the Subordinated Notes will mature and become due and payable, together with any accrued and unpaid interest thereon including Compound Interest (as hereinafter defined) and Additional Interest (as hereinafter defined), if any, on , 2025, subject to the election of GWFC to extend the scheduled maturity date of the Subordinated Notes to a date not later than , 2044, which election is subject to GWFC's satisfying certain financial covenants. See "Option to Extend Maturity" below. If Subordinated Notes or Adjusted Subordinated Notes are distributed to holders of Preferred Securities in liquidation of such holders' interests in the Trust, such Subordinated Notes or Adjusted Subordinated Notes, as the case may be, will initially be issued as a Global Security (as defined below). As described herein, under certain limited circumstances, Subordinated Notes or Adjusted Subordinated Notes may be issued in certificated form in exchange for a Global Security (as defined below). See "Book-Entry and Settlement" below. In the event that Subordinated Notes or Adjusted Subordinated Notes are issued in certificated form, such Subordinated Notes or Adjusted Subordinated Notes will be in denominations of $25 and integral multiples thereof and may be transferred or exchanged at the offices described below. Payments on Subordinated Notes or Adjusted Subordinated Notes, as the case may be, issued as a Global Security will be made to DTC, a successor depositary or, in the event that no depositary is used, to a Paying Agent for the Subordinated Notes or Adjusted Subordinated Notes, as the case may be. In the event Subordinated Notes or Adjusted Subordinated Notes are issued in certificated form, principal and interest will be payable, the transfer of the Subordinated Notes or Adjusted Subordinated Notes will be registrable and Subordinated Notes or Adjusted Subordinated Notes will be exchangeable for Subordinated Notes or Adjusted Subordinated Notes, as the case may be, of other denominations of a like aggregate principal amount at the corporate trust office of the Indenture Trustee in [ ]; provided that, payment of interest may be made at the option of GWFC by check mailed to the address of the persons entitled thereto. INTEREST Except as described under "Description of the Offered Preferred Securities-- Regulatory Event Distribution or Conversion," each Subordinated Note shall bear interest at the rate of % per annum (the "Original Coupon Rate") from the original date of issuance, payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year (each, an "Interest Payment Date"), commencing , 199 , to the person in whose name such Subordinated Note is registered, subject to certain exceptions, at the close of business on the Business Day next preceding such Interest Payment Date. In the event the Subordinated Notes shall not continue to remain in book-entry only form, GWFC shall have the right to select such record dates which shall be not less than one Business Day prior to each Interest Payment Date. S-22 In the event the Adjusted Subordinated Notes are issued, each Adjusted Subordinated Note shall bear interest at the rate of % per annum (the "Adjusted Rate" and together with the Original Coupon Rate, the "Coupon Rate") from the date the Adjusted Subordinated Notes are distributed to holders of Trust Securities, and shall otherwise have payment and other terms identical to the terms of the Subordinated Notes. The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months. The amount of interest payable for any period shorter than a full quarterly period will be computed on the basis of the actual number of days elapsed per 30-day month. In the event that any date on which interest is payable on the Subordinated Notes is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. If at any time the Trust shall be required to pay any taxes, duties, assessments or governmental charges of whatever nature (other than withholding taxes) imposed by the United States, or any other taxing authority, then, in any case, GWFC will pay as additional interest ("Additional Interest") such additional amounts as shall be required so that the net amounts received and retained by the Trust after paying such taxes, duties, assessments or other governmental changes will be not less than the amounts the Trust would have received had no such taxes, duties, assessments or other governmental charges been imposed. This right shall not accrue to any holder of the Subordinated Notes other than the Trust. OPTION TO EXTEND MATURITY DATE The maturity date of the Subordinated Notes is , 2025 (the "Scheduled Maturity Date"). GWFC, however, may, before the Scheduled Maturity Date, extend such maturity date no more than one time, for up to an additional 19 years from the Scheduled Maturity Date, provided that (a) GWFC is not in bankruptcy or otherwise insolvent, (b) GWFC is not in default on the Subordinated Notes, (c) GWFC has made timely payments on the Subordinated Notes for the immediately preceding 18 months without deferrals, (d) the Trust is not in arrears on payments of distributions on the Preferred Securities, and (e) the Subordinated Notes are rated in one of the four highest rating categories by either Standard & Poor's Rating Group, Moody's Investors Service, Inc., Fitch Investor Services, Inc., Duff & Phelps Credit Rating Company or any other nationally recognized statistical rating organization. Pursuant to the Declaration, the Regular Trustees are required to give notice of GWFC's election to extend the Scheduled Maturity Date to the holders of the Preferred Securities. OPTION TO EXTEND INTEREST PAYMENT PERIOD GWFC shall have the right at any time, and from time to time, during the term of the Subordinated Notes to defer payments of interest by extending the interest payment period for a period not exceeding 20 consecutive quarters. To the extent permitted by applicable law, interest, the payment of which has been deferred during such Extension Period, will bear interest at the applicable Coupon Rate, compounded quarterly ("Compound Interest") during the term of such Extension Period. At the end of any such Extension Period, GWFC shall pay all interest then accrued and unpaid (including any Compound Interest and Additional Interest); provided, that, during any such Extension Period, (a) GWFC shall not, and shall cause any subsidiary of GWFC that is not a wholly owned subsidiary of GWFC not to, declare or pay any dividend on, make any distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any of its capital stock or the capital stock of any such subsidiary, and (b) GWFC shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities (including guarantees) issued by GWFC which rank pari passu with or junior to the Subordinated Notes; provided, however, that the foregoing restriction (a) does not apply to any stock dividend paid by GWFC, or any of its subsidiaries, where the dividend stock is the same stock as that on which the dividend is being paid. Prior to the termination of any such Extension Period, GWFC may further defer payments of interest by extending the interest payment period, provided that such Extension Period together with all such S-23 previous and further extensions thereof may not exceed 20 consecutive quarters. Upon the termination of any Extension Period and the payment of all amounts then due, GWFC may select a new Extension Period, as if no Extension Period had previously been declared, subject to the above requirements. No interest during an Extension Period, except at the end thereof, shall be due and payable. GWFC has no intention of exercising its rights to defer payments of interest by extending the interest payment period on the Subordinated Notes and considers it unlikely that it will exercise that right in the future. If the Property Trustee shall be the sole holder of the Subordinated Notes, GWFC shall give the Regular Trustees and the Property Trustee notice of its selection of such Extension Period one Business Day prior to the earlier of (i) the date distributions on the Preferred Securities are payable or (ii) the date the Regular Trustees are required to give notice to the New York Stock Exchange or other applicable self-regulatory organization or to holders of the Preferred Securities of the record date or the date such distribution is payable, but in any event no less than one Business Day prior to such record date. The Regular Trustees shall give notice of GWFC's selection of such Extension Period to the holders of the Preferred Securities. If the Property Trustee shall not be the sole holder of the Subordinated Notes, GWFC shall give the holders of the Subordinated Notes notice of its selection of such Extension Period ten Business Days prior to the earlier of (i) the Interest Payment Date or (ii) the date GWFC is required to give notice to the New York Stock Exchange or other applicable self-regulatory organization or to holders of the Subordinated Notes of the record or payment date of such related interest payment. OPTIONAL REDEMPTION GWFC shall have the right to redeem the Subordinated Notes, in whole or in part, from time to time, on or after , 2000, or at any time in certain circumstances upon the occurrence of a Tax Event or in whole for a limited time upon the occurrence of a Regulatory Redemption Event as described under "Description of the Offered Preferred Securities--Special Event Redemption or Distribution" and "--Regulatory Redemption Event," upon not less than 30 nor more than 60 days' notice, at a Redemption Price equal to 100% of the principal amount to be redeemed plus any accrued and unpaid interest, including Compound and Additional Interest, if any, to the redemption date. If a partial redemption of the Preferred Securities resulting from a partial redemption of the Subordinated Notes would result in the delisting of the Preferred Securities, GWFC may only redeem the Subordinated Notes in whole. If, following a distribution of Adjusted Subordinated Notes, holders of Adjusted Subordinated Notes having an aggregate principal amount of 10% or less of the original aggregate principal amount of Subordinated Notes purchased by the Trust elect not to have their Adjusted Subordinated Notes converted into Depositary Shares, GWFC will have the option to redeem all outstanding Adjusted Subordinated Notes at such Redemption Price on any Business Day during the period from the Distribution Date on which the conversion of Adjusted Subordinated Notes into Depositary Shares is to occur, to and including the next succeeding Distribution Date. GWFC will give notice of its intent to redeem such Adjusted Subordinated Notes to the holders thereof at least 30 but not more than 60 days prior to the date on which such redemption is to occur. SUBORDINATION The Subordinated Indenture provides that the Subordinated Notes are subordinated and junior in right of payment to all present and future Senior Indebtedness of GWFC. See "Description of Debt Securities--Subordination of Subordinated Debt Securities" in the accompanying Prospectus. The Subordinated Indenture does not limit the aggregate amount of Senior Indebtedness which may be issued by GWFC. As of September 30, 1995, Senior Indebtedness of GWFC aggregated approximately $ million. In addition, because GWFC is a holding company, its obligations under the Subordinated Notes will be effectively subordinated to all existing and future liabilities of its subsidiaries. At September 30, 1995, such subsidiaries had total liabilities of approximately $ billion. CERTAIN COVENANTS If (i) there shall have occurred any event that would constitute an Event of Default under the Subordinated Indenture or (ii) GWFC shall be in default with respect to its payment of any obligations under S-24 the Guarantee, then (a) GWFC shall not, and shall cause any subsidiary of GWFC that is not a wholly owned subsidiary of GWFC not to, declare or pay any dividend on, make any distributions with respect to, or redeem, purchase or make a liquidation payment with respect to, any of its capital stock or the capital stock of any such subsidiary, and (b) GWFC shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities (including guarantees) issued by GWFC which rank pari passu with or junior to the Subordinated Notes; provided, however, that the foregoing restriction (a) does not apply to any stock dividend paid by GWFC, or any of its subsidiaries, where the dividend stock is the same stock as that on which the dividend is being paid. If GWFC shall have given notice of its election of an Extension Period as provided in the Subordinated Indenture and such period, or any extension thereof, shall be continuing, then (a) GWFC shall not, and shall cause any subsidiary of GWFC that is not a wholly owned subsidiary of GWFC not to, declare or pay any dividend on, make any distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any of its capital stock or the capital stock of any such subsidiary, and (b) GWFC shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities (including guarantees) issued by GWFC which rank pari passu with or junior to the Subordinated Notes; provided, however, that the foregoing restriction (a) does not apply to any stock dividend paid by GWFC, or any of its subsidiaries, where the dividend stock is the same stock as that on which the dividend is being paid. For so long as the Trust Securities remain outstanding, GWFC will covenant (i) to directly or indirectly maintain 100% ownership of the Common Securities of the Trust; provided, however, that any permitted successor of GWFC under the Subordinated Indenture may succeed to GWFC's ownership of such Common Securities, and (ii) to use its reasonable efforts to cause the Trust (a) to remain a statutory business trust, except in connection with the distribution of Subordinated Notes or Adjusted Subordinated Notes to the holders of Trust Securities in liquidation of the Trust, the redemption of all of the Trust Securities of the Trust, or certain mergers, consolidations or amalgamations, each as permitted by the Declaration, and (b) to otherwise continue to be classified as a grantor trust for United States federal income tax purposes. INDENTURE EVENTS OF DEFAULT An Indenture Event of Default is: (a) the failure to pay principal of any of the Subordinated Notes when due; provided, however, that a valid extension by GWFC of the maturity for the Subordinated Notes shall not constitute a default in the payment for this purpose; (b) the failure to pay any interest on any of the Subordinated Notes when due, continued for 10 days; provided, however, that a valid extension by GWFC of the interest payment period for the Subordinated Notes shall not constitute a default in the payment for this purpose; (c) failure to perform any other covenant of GWFC in the Subordinated Indenture (other than a covenant included in the Subordinated Indenture solely for the benefit of one or more series of Debt Securities other than the Subordinated Notes), continued for 60 days after written notice as provided in the Subordinated Indenture; (d) certain events of bankruptcy, insolvency, conservatorship, receivership or reorganization; (e) a default under any mortgage, indenture or instrument evidencing any indebtedness for borrowed money by GWFC (including the Subordinated Indenture) resulting in an aggregate principal amount exceeding $10,000,000 becoming or being declared due and payable prior to its maturity date or constituting a failure to pay at a maturity an aggregate principal amount exceeding $10,000,000 unless such acceleration has been rescinded or annulled or such indebtedness has been discharged within 10 days after written notice to GWFC by the Indenture Trustee or holders of at least 25% in aggregate principal amount of the outstanding Subordinated Notes declaring a default or GWFC is contesting the validity of such default in good faith by appropriate proceedings; and (f) the voluntary or involuntary liquidation, dissolution, winding-up or termination of the Trust to which (or to the Trustee of the Trust to which) Subordinated Notes were issued in connection with the issuance of the Trust Securities by the Trust, except in connection with the distribution of the Subordinated Notes to the holders of Trust Securities in liquidation of the Trust, the redemption of all the Trust Securities, or certain mergers, consolidations or amalgamations, each as permitted by the Declaration. S-25 If any Indenture Event of Default shall occur and be continuing, the Property Trustee, as the holder of the Subordinated Notes, will have the right to declare the principal of and the interest on the Subordinated Notes (including any Compound Interest and Additional Interest, if any) and any other amounts payable under the Subordinated Indenture to be forthwith due and payable and to enforce its other rights as a creditor with respect to the Subordinated Notes. See "Description of Debt Securities--Events of Default" in the accompanying Prospectus for a description of the Events of Default. An Indenture Event of Default also constitutes a Declaration Event of Default. The holders of Preferred Securities in certain circumstances have the right to direct the Property Trustee to exercise its rights as the holder of the Subordinated Notes. See "Description of the Offered Preferred Securities--Declaration Events of Default" and "--Voting Rights." BOOK-ENTRY AND SETTLEMENT If distributed to holders of Preferred Securities in connection with the involuntary or voluntary dissolution, winding-up or liquidation of the Trust as a result of the occurrence of a Special Event or Regulatory Event, the Subordinated Notes or Adjusted Subordinated Notes, as the case may be, will be issued in the form of one or more global certificates (each a "Global Security") registered in the name of the depositary or its nominee. Except under the limited circumstances described below, Subordinated Notes or Adjusted Subordinated Notes represented by the Global Security will not be exchangeable for, and will not otherwise be issuable as, Subordinated Notes or Adjusted Subordinated Notes, as the case may be, in definitive form. The Global Securities described above may not be transferred except by the depositary to a nominee of the depositary or by a nominee of the depositary to the depositary or another nominee of the depositary or to a successor depositary or its nominee. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of such securities in definitive form. Such laws may impair the ability to transfer beneficial interests in such a Global Security. Except as provided below, owners of beneficial interests in such a Global Security will not be entitled to receive physical delivery of Subordinated Notes or Adjusted Subordinated Notes in definitive form and will not be considered the holders (as defined in the Subordinated Indenture) thereof for any purpose under the Subordinated Indenture, and no Global Security representing Subordinated Notes or Adjusted Subordinated Notes shall be exchangeable, except for another Global Security of like denomination and tenor to be registered in the name of the depositary or its nominee or to a successor depositary or its nominee. Accordingly, each Beneficial Owner must rely on the procedures of the depositary or if such person is not a Participant, on the procedures of the Participant through which such person owns its interest to exercise any rights of a holder under the Subordinated Indenture. THE DEPOSITARY If Subordinated Notes or Adjusted Subordinated Notes are distributed to holders of Preferred Securities in liquidation of such holders' interests in the Trust, DTC will act as securities depositary for the Subordinated Notes or Adjusted Subordinated Notes, as the case may be. For a description of DTC and the specific terms of the depositary arrangements, see "Description of the Offered Preferred Securities--Book-Entry Only Issuance--The Depository Trust Company." As of the date of this Prospectus Supplement, the description therein of DTC's book-entry system and DTC's practices as they relate to purchases, transfers, notices and payments with respect to the Preferred Securities apply in all material respects to any debt obligations represented by one or more Global Securities held by DTC. GWFC may appoint a successor to DTC or any successor depositary in the event DTC or such successor depositary is unable or unwilling to continue as a depositary for the Global Securities. None of GWFC, the Trust, the Indenture Trustee, any paying agent and any other agent of GWFC or the Indenture Trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Security for such Subordinated Notes or Adjusted Subordinated Notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. S-26 DISCONTINUANCE OF THE DEPOSITARY'S SERVICES A Global Security shall be exchangeable for Subordinated Notes or Adjusted Subordinated Notes, as the case may be, registered in the names of persons other than the depositary or its nominee only if (i) the depositary notifies GWFC that it is unwilling or unable to continue as a depositary for such Global Security and no successor depositary shall have been appointed, (ii) the depositary, at any time, ceases to be registered to act as such depositary and no successor depositary shall have been appointed, or (iii) GWFC, in its sole discretion, determines that such Global Security shall be so exchangeable. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Subordinated Notes or Adjusted Subordinated Notes, as the case may be, registered in such names as the depositary shall direct. It is expected that such instructions will be based upon directions received by the depositary from its Participants with respect to ownership of beneficial interests in such Global Security. MISCELLANEOUS The Subordinated Indenture will provide that GWFC, in its capacity as issuer of the Subordinated Notes, will pay all costs, expenses, debts and obligations of the Trust other than with respect to the Trust Securities. EFFECT OF OBLIGATIONS UNDER THE SUBORDINATED NOTES AND THE GUARANTEE As set forth in the Declaration, the sole purpose of the Trust is to issue the Trust Securities evidencing undivided beneficial interests in the assets of the Trust, and to invest the proceeds from such issuance and sale in the Subordinated Notes. As long as payments of interest and other payments are made when due on the Subordinated Notes, such payments will be sufficient to cover distributions and payments due on the Trust Securities primarily because (i) the aggregate principal amount of Subordinated Notes will be equal to the sum of the aggregate stated liquidation amount of the Trust Securities; (ii) the interest rate and payment dates on the Subordinated Notes will match the distribution rate and distribution and other payment dates for the Preferred Securities; (iii) GWFC shall pay for all costs, expenses debts and obligations of the Trust (other than with respect to the Trust Securities); and (iv) the Declaration provides that the Regular Trustees shall not take or cause or permit the Trust to, among other things, engage in any activity that is not consistent with the purposes of the Trust. Payments of distributions (to the extent funds therefor are available) and other payments due on the Preferred Securities (to the extent funds therefor are available) are guaranteed by GWFC as and to the extent set forth under "Description of Guarantee" in the accompanying Prospectus. If GWFC does not make interest payments on the Subordinated Notes purchased by the Trust, it is expected that the Trust will not have sufficient funds to pay distributions on the Preferred Securities. The Guarantee does not apply to any payment of distributions unless and until the Trust has sufficient funds for the payment of such distributions. If GWFC fails to make interest or other payments on the Subordinated Notes when due (taking into account any Extension Period), the Declaration provides a mechanism whereby the holders of the Preferred Securities, using the procedures described in "Description of the Offered Preferred Securities--Voting Rights," may direct the Property Trustee to enforce its rights under the Subordinated Notes, including proceeding directly against GWFC to enforce the Subordinated Notes. If GWFC fails to make payments under the Guarantee, the Guarantee provides a mechanism whereby the holders of the Preferred Securities may direct the Guarantee Trustee to enforce its rights thereunder. Any holder of Preferred Securities may institute a legal proceeding directly against GWFC to enforce the Guarantee Trustee's rights under the Guarantee, without first instituting a legal proceeding against the Trust, the Guarantee Trustee or any other person or entity. The obligations of GWFC under the Declaration, the Guarantee, the Subordinated Notes and the Subordinated Indenture, taken together, provide a full and unconditional guarantee on a subordinated basis by GWFC of payments due on the Preferred Securities. See "Description of Guarantee--General" in the accompanying Prospectus. S-27 DESCRIPTION OF DEPOSITARY SHARES The following summary description of the Depositary Shares supplements the information set forth under the heading "Description of Depositary Shares" in the accompanying Prospectus, to which reference is hereby made. The following description of the material terms and provisions of the Depositary Shares does not purport to be complete and is subject to and qualified in its entirety by reference to the Deposit Agreement referred to below which will be filed with the Securities and Exchange Commission at or prior to the time of the issuance of the Depositary Shares. GENERAL Each Depositary Share represents a one-tenth interest in a share of the Preferred Stock. The shares of the Preferred Stock underlying the Depositary Shares will be deposited with Harris Trust Company of California, as depositary ("Share Depositary"), under a Deposit Agreement (the "Deposit Agreement") among GWFC, the Share Depositary and the holders from time to time of the depositary receipts issued by the Share Depositary thereunder (the "Depositary Receipts"). The Depositary Receipts so issued will evidence the Depositary Shares. Subject to the terms of the Deposit Agreement, each owner of a Depositary Share will be entitled through the Share Depositary, in proportion to the one-tenth interest in a share of the Preferred Stock underlying such Depositary Share, to all rights and preferences of a share of the Preferred Stock (including dividend, voting, redemption and liquidation rights). Since each share of the Preferred Stock entitles the holder thereof to one vote on matters on which the Preferred Stock is entitled to vote, each Depositary Share will, in effect, entitle the holder thereof to one-tenth of a vote thereon, rather than one full vote. See "Description of Cumulative Preferred Stock--Voting Rights" herein and "Description of Depositary Shares" in the accompanying Prospectus. If the Depositary Shares are distributed to the holders of Preferred Securities, GWFC will use its best efforts to have the Depositary Shares listed on the New York Stock Exchange or on such other exchange on which the Preferred Securities are then listed or quoted. The Depositary Shares will not be savings accounts or deposits and will not be insured by the FDIC, the United States or any agency or fund of the United States. CHARGES OF DEPOSITARY GWFC will pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements. GWFC will pay charges of the Share Depositary in connection with the initial deposit of the Preferred Stock and the initial issuance of the Depositary Receipts evidencing the Depositary Shares, any redemption of the Preferred Stock and any withdrawals of Preferred Stock by the holders of Depositary Shares. Holders of Depositary Shares will pay other transfer and other taxes and governmental charges and such other charges as are expressly provided in the Deposit Agreement to be for their accounts. BOOK-ENTRY SETTLEMENT If distributed upon the conversion of Adjusted Subordinated Notes, the Depositary Receipts will be issued in the form of one or more global certificates (each a "Global Security") registered in the name of the depositary or its nominee. Except under the limited circumstances described below, Depositary Receipts represented by the Global Security will not be exchangeable for, and will not otherwise be issuable as, Depositary Receipts in definitive form. The Global Securities described above may not be transferred except by the depositary to a nominee of the depositary or by a nominee of the depositary to the depositary or another nominee of the depositary or to a successor depositary or its nominee. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of such securities in definitive form. Such laws may impair the ability to transfer beneficial interests in such a Global Security. S-28 Except as provided below, owners of beneficial interests in such a Global Security will not be entitled to receive physical delivery of Depositary Receipts in definitive form and will not be considered the holders (as defined in the Deposit Agreement) thereof for any purpose under the Deposit Agreement and no Global Security representing Depositary Receipts shall be exchangeable, except for another Global Security of like denomination and tenor to be registered in the name of the Depositary or its nominee or to a successor Depositary or its nominee. Accordingly, each Beneficial Owner must rely on the procedures of the Depositary or, if such person is not a Participant, on the procedures of the Participant through which such person owns its interest to exercise any rights of a holder under the Deposit Agreement. THE DEPOSITARY If Depositary Receipts are distributed, DTC will act as securities depositary for the Depositary Receipts. For a description of DTC and the specific terms of the depositary arrangements, see "Description of the Offered Preferred Securities--Book-Entry Only Issuance--The Depository Trust Company." As of the date of this Prospectus Supplement, the description therein of DTC's book-entry system and DTC's practices as they relate to purchases, transfers, notices and payments with respect to the Preferred Securities apply in all material respects to any obligations represented by one or more Global Securities held by DTC. GWFC may appoint a successor to DTC or any successor depositary in the event DTC or such successor depositary is unable or unwilling to continue as a depositary for the Global Securities. None of GWFC, the Share Depositary and any agent of GWFC or the Share Depositary will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Security for such Depositary Receipts or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. DISCONTINUANCE OF THE DEPOSITARY'S SERVICES A Global Security shall be exchangeable for Depositary Receipts registered in the names of persons other than the Depositary or its nominee only if (i) the depositary notifies GWFC that it is unwilling or unable to continue as a depositary for such Global Security and no successor depositary shall have been appointed, (ii) the Depositary at any time, ceases to be so registered to act as such depositary and no successor Depositary shall have been appointed, or (iii) GWFC, in its sole discretion, determines that such Global Security shall be so exchangeable. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Depositary Receipts registered in such names as the Depositary shall direct. It is expected that such instructions will be based upon directions received by the Depositary from its Participants with respect to ownership of beneficial interests in such Global Security. DESCRIPTION OF CUMULATIVE PREFERRED STOCK The following description of the particular terms of the shares of % Cumulative Preferred Stock supplements the information set forth under the heading "Description of Preferred Stock" in the accompanying Prospectus, to which description reference is hereby made. The description of the material provisions of the Preferred Stock set forth below does not purport to be complete and is subject to and qualified in its entirety by reference to the Certificate of Designations relating to the Preferred Stock which will be filed with the Securities and Exchange Commission at or prior to the time of the issuance of the Depositary Shares. RANK The Preferred Stock will rank on a parity as to payment of dividends and distribution of assets upon dissolution, liquidation or winding up of GWFC with each other outstanding series of the preferred stock of GWFC. The Preferred Stock will rank prior to the Common Stock, $1.00 par value per share, of GWFC (the "Common Stock") as to the payment of dividends and distribution of assets upon dissolution, liquidation or winding up of GWFC. As of June 30, 1995, the only shares of preferred stock of GWFC outstanding were 517,500 shares of GWFC's 8 3/4% Cumulative Convertible Preferred Stock (the "Convertible Preferred") and 660,000 shares of GWFC's 8.30% Cumulative Preferred Stock (the "Cumulative Preferred"). The S-29 Convertible Preferred is subject to redemption, in whole or in part, at the option of GWFC at $260.9375 per share during the period from May 1, 1996 through April 30, 1997 and at decreasing prices thereafter to $250 per share, in each case plus accrued and unpaid dividends to the redemption date. The Convertible Preferred is convertible at any time into Common Stock at a conversion rate of 12.255 shares of Common Stock for each share of Convertible Preferred. The Cumulative Preferred is subject to redemption in whole or in part, at any time on or after November 1, 1997, at $250 per share plus accrued and unpaid dividends to the redemption date. See "Description of Common Stock--Rights" in the accompanying Prospectus for a description of GWFC's Series A Junior Participating Preferred Stock, none of which is outstanding as of the date of this Prospectus Supplement. The Preferred Stock will rank prior to such Series A Preferred Stock as to both the payment of dividends and any distribution of assets upon dissolution, liquidation or winding up of GWFC. DIVIDENDS Holders of shares of the Preferred Stock will be entitled to receive, when, as and if declared by the Board of Directors of GWFC out of funds of GWFC legally available for payment, cash dividends at the rate of % per annum (equivalent to $ per Depositary Share). Dividends on the Preferred Stock will be payable quarterly on February 1, May 1, August 1 and November 1 of each year (each a "Dividend Payment Date"), commencing on the first Dividend Payment Date following the issuance of the Preferred Stock, at such annual rate. Each dividend will be payable to holders of record as they appear on the stock books of GWFC (or, if applicable, the records of the Depositary) on such record dates, not exceeding 45 days preceding the payment dates thereof, as shall be fixed by the Board of Directors of GWFC. Dividends will be cumulative from the date of original issue. Dividends payable on the Preferred Stock for any period greater or less than a full dividend period shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends payable on the Preferred Stock for each full dividend period shall be computed by dividing the annual dividend rate by four. REDEMPTION Except as noted below, shares of the Preferred Stock will not be redeemable prior to , 2000. The shares of the Preferred Stock will be redeemable at the option of GWFC, in whole or in part, at any time or from time to time, on or after such date, on not less than 30 nor more than 60 days notice by mail, at a redemption price of $250 per share (equivalent to $25 per Depositary Share) plus accrued and unpaid dividends to the redemption date (the "Share Redemption Price"). In addition, during a period of 90 days after the occurrence of a Regulatory Redemption Event, GWFC may elect to redeem the shares of Preferred Stock in whole on not less than 30 nor more than 60 days notice by mail, at the Share Redemption Price. Under certain circumstances, the redemption of the Preferred Stock may require the prior consent of GWFC's then banking supervisory authority. The Preferred Stock will not be subject to any sinking fund or other obligation of GWFC to redeem or retire the Preferred Stock. LIQUIDATION RIGHTS In the event of any voluntary or involuntary liquidation, dissolution or winding up of GWFC, the holders of shares of Preferred Stock are entitled to receive out of assets of GWFC available for distribution to stockholders, before any distribution of assets is made to holders of Common Stock or of any other shares of stock of GWFC ranking as to such a distribution junior to the shares of Preferred Stock, liquidating distributions in the amount of $250 per share (equivalent to $25 per Depositary Share) plus accrued and unpaid dividends. After payment of such liquidating distributions, the holders of shares of Preferred Stock will not be entitled to any further participation in any distribution of assets by GWFC. VOTING RIGHTS Except as indicated below and under "Description of Preferred Stock--Voting Rights" in the accompanying Prospectus, or except as expressly required by applicable law, the holders of the Preferred Stock will not be entitled to vote for any purpose. S-30 If the equivalent of six quarterly dividends payable on the Preferred Stock are in arrears, the number of directors of GWFC will be increased by two and the holders of Preferred Stock, voting separately as a class with the holders of shares of any one or more other series of preferred stock ranking on a parity with the Preferred Stock as to payment of dividends and the distribution of assets upon liquidation, dissolution or winding up of GWFC and upon which like voting rights have been conferred and are exercisable, will be entitled to elect two directors to fill such vacancies. Such right to elect two additional directors shall continue until all dividends in arrears have been paid or declared and set apart for payment. Each director elected by the holders of shares of the Preferred Stock and all other classes of preferred stock whose holders are so entitled to vote shall continue to serve as such director for the full term for which he shall have been elected, notwithstanding that prior to the end of such term such default shall cease to exist. CONVERSION RIGHTS Shares of the Preferred Stock will not be convertible into shares of any other class or series of the capital stock of GWFC. CERTAIN FEDERAL INCOME TAX CONSEQUENCES GENERAL The following summary of certain United States federal income tax consequences of the purchase, ownership and disposition of the Preferred Securities is based upon laws, regulations, rulings and decisions now in effect, all of which are subject to change (with possible retroactive effect) and possible differing interpretations. This discussion deals only with Preferred Securities held as capital assets and does not purport to deal with persons in special tax situations, such as financial institutions, insurance companies, regulated investment companies, dealers in securities or currencies, or persons whose functional currency is not the United States dollar. This discussion also does not deal with holders other than the original purchasers of the Preferred Securities or with holders who are not U.S. Holders (as defined below). Persons considering the purchase of the Preferred Securities should consult their tax advisors concerning the application of United States federal income tax laws to their particular situations as well as any consequences of the purchase, ownership and disposition of the Preferred Securities arising under the laws of any other taxing jurisdiction. As used herein, the term "U.S. Holder" means a beneficial owner of a Preferred Security that is for United States federal income tax purposes (i) a citizen or resident of the United States, (ii) a corporation, partnership or other entity created or organized in or under the laws of the United States or of any political subdivision thereof, (iii) an estate or trust the income of which is subject to United States federal income taxation regardless of its source, or (iv) any other person whose income or gain in respect of a Preferred Security is effectively connected with the conduct of a United States trade or business. As used herein, the term "non-U.S. Holder" means a holder of a Preferred Security that is not a U.S. Holder. CLASSIFICATION OF THE TRUST In connection with the issuance of the Preferred Securities, Skadden, Arps, Slate, Meagher & Flom, special tax counsel to GWFC and the Trust, has rendered its opinion to the effect that, under then current law and assuming full compliance with the terms of the Declaration and the Subordinated 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. Accordingly, for United States federal income tax purposes, each U.S. Holder of a Preferred Security will generally be considered the owner of an undivided interest in the Subordinated Notes, and each U.S. Holder will be required to include in its gross income the original issue discount (as described below) accrued with respect to its undivided interest in those Subordinated Notes. CLASSIFICATION OF THE SUBORDINATED NOTES In connection with the issuance of the Subordinated Debentures, Skadden, Arps, Slate, Meagher & Flom, special tax counsel to GWFC and the Trust, will render its opinion generally to the effect that, under then current law United States federal income tax law and assuming full compliance with the terms of the S-31 Indenture (and certain other documents), and based on certain facts and assumptions contained in such opinion, the Subordinated Notes held by the Trust will be classified for United States federal income tax purposes as indebtedness of GWFC. By acceptance of a Preferred Security, each holder covenants to treat the Subordinated Notes as indebtedness and the Preferred Securities as evidence of an indirect beneficial ownership in the Subordinated Notes. ORIGINAL ISSUE DISCOUNT Because GWFC has the option, under the terms of the Subordinated Notes, to defer payments of interest by extending interest payment periods for up to 20 quarters, all of the stated interest payments on the Subordinated Notes will be treated as original issue discount ("OID"). U.S. Holders of debt instruments issued with OID may be required to include that discount in income on an economic accrual basis before the receipt of cash attributable to the interest, regardless of their method of tax accounting. Generally, all of a U.S. Holder's taxable interest income with respect to the Subordinated Notes will accrue as OID, and actual distributions of stated interest will not be separately reported as taxable income. The amount of OID that accrues for any quarter will approximately equal the amount of the interest that accrues on the Subordinated Notes in that quarter at the stated interest rate. In the event that the interest payment period is extended, U.S. Holders will continue to accrue OID approximately equal to the amount of the interest payment due at the end of the extended interest payment period, even though no payments of stated interest are being made. Corporate U.S. Holders of Preferred Securities will not be entitled to a dividends received deduction with respect to any income recognized with respect to the Preferred Securities. MARKET DISCOUNT AND BOND PREMIUM U.S. Holders of Preferred Securities, other than U.S. Holders who purchased the Preferred Securities for a price equal to their par amount plus accrued interest upon their original issuance, may be considered to have acquired their undivided interests in the Subordinated Notes at a market discount, premium or acquisition premium as such phrases are defined for United States federal income tax purposes. Such U.S. Holders are advised to consult their tax advisors as to the income tax consequences of the acquisition, ownership and disposition of the Preferred Securities. RECEIPT OF SUBORDINATED NOTES OR CASH UPON LIQUIDATION OF THE TRUST Under certain circumstances, as described under the caption "Description of the Offered Preferred Securities--Special Event Redemption or Distribution," Subordinated Notes may be distributed to U.S. Holders in exchange for the Preferred Securities and in liquidation of the Trust. Under current law, such a distribution, for United States federal income tax purposes, would be treated as a non-taxable event to each U.S. Holder, and each U.S. Holder would receive an aggregate tax basis in the Subordinated Notes equal to such U.S. Holder's aggregate tax basis in its Preferred Securities. A U.S. Holder's holding period in the Subordinated Notes so received in liquidation of the Trust would include the period during which the Preferred Securities were held by such U.S. Holder. Under certain circumstances described herein (see "Description of the Offered Preferred Securities"), the Subordinated Notes may be redeemed for cash and the proceeds of such redemption distributed to U.S. Holders in redemption of their Preferred Securities. Under current law, such a redemption would, for United States federal income tax purposes, constitute a taxable disposition of the redeemed Preferred Securities, and a U.S. Holder would recognize gain or loss as if it sold such redeemed Preferred Securities for cash. See "Sales of Preferred Securities" below. ADJUSTED SUBORDINATED NOTES AND CONVERSION TO DEPOSITARY SHARES A U.S. Holder that either receives Adjusted Subordinated Notes or Depositary Shares as a result of a Regulatory Event described under the caption "Description of the Offered Preferred Securities--Regulatory Event Distribution or Conversion," should not recognize gain or loss for U.S. federal income tax purposes at that time. Accordingly, (i) the tax basis of Adjusted Subordinated Notes or Depositary Shares received by an owner of Preferred Securities should, upon receipt, equal the aggregate tax basis of such owner in such S-32 Preferred Securities and (ii) the holding period for the Adjusted Subordinated Notes or Depositary Shares in the hands of an owner of Preferred Securities should include the period during which such person owned such Preferred Securities. DEPOSITARY SHARES Owners of the Depositary Shares, if issued, will be treated for United States federal income tax purposes as if they were owners of the Preferred Stock represented by such Depositary Shares and, accordingly, will be entitled to take into account for United States federal income tax purposes income and deductions to which they would be entitled if they were holders of such Preferred Stock. The dividends on the Depositary Shares will qualify as dividends for purposes of the dividends received deduction to the extent that such dividends are paid out of GWFC's current or accumulated earnings and profits (and subject to certain generally applicable limitations). In addition, (i) no gain or loss will be recognized for United States federal income tax purposes upon the withdrawal of Preferred Stock in exchange for Depositary Shares as provided in the Deposit Agreement, (ii) the tax basis of each share of Preferred Stock to an exchanging owner of Depositary Shares will, upon such exchange, be the same as the aggregate tax basis of the Depositary Shares exchanged therefor, and (iii) the holding period for shares of the Preferred Stock in the hands of an exchanging owner of Depositary Shares will include the period during which such person owned such Depositary Shares. SALES OF PREFERRED SECURITIES A U.S. Holder that sells a Preferred Security will recognize gain or loss equal to the difference between its adjusted tax basis in the Preferred Securities and the amount realized on the sale of such Preferred Securities. A U.S. Holder's adjusted tax basis in the Preferred Securities will generally be its initial purchase price increased by the amount of OID previously includible in such U.S. Holder's gross income to the date of disposition and decreased by the amount of payments received on the Preferred Securities (whether denominated as interest or principal). Such gain or loss will generally be a capital gain or loss and generally will be a long-term capital gain or loss if the Preferred Securities have been held for more than one year. INFORMATION REPORTING TO U.S. HOLDERS Income on the Preferred Securities will be reported to U.S. Holders on Forms 1099, which forms should be mailed to U.S. Holders of Preferred Securities by January 31 following each calendar year. BACKUP WITHHOLDING Backup withholding of the United States federal income tax at a rate of 31% may apply to payments made in respect of Subordinated Notes to registered owners who are not "exempt recipients" or who fail to comply with certain procedures for providing certain identifying information (such as the registered owner's taxpayer identification number) in the required manner. Upon the sale of Subordinated Notes to (or through) certain brokers, the broker must withhold 31% of the entire purchase price, unless either (i) the broker determines that the seller is an exempt recipient or (ii) the seller provides, in the required manner, certain identifying information. Any amounts withheld under the backup withholding rules from a payment to a beneficial owner would be allowed as a refund or a credit against such beneficial owner's United States federal income tax provided the required information is furnished to the Internal Revenue Service. THE 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 PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS. S-33 UNDERWRITING Subject to the terms and conditions set forth in an underwriting agreement (the "Underwriting Agreement"), the Trust has agreed to sell to each of the Underwriters named below, and each of the Underwriters, for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated and Goldman, Sachs & Co. are acting as representatives (the "Representatives"), has severally agreed to purchase the number of Preferred Securities set forth opposite its name below. In the Underwriting Agreement, the several Underwriters have agreed, subject to the terms and conditions set forth therein, to purchase all the Preferred Securities offered hereby if any of the Preferred Securities are purchased. In the event of default by an Underwriter, the Underwriting Agreement provides that, in certain circumstances, the purchase commitments of the nondefaulting Underwriters may be increased or the Underwriting Agreement may be terminated.
NUMBER OF UNDERWRITERS PREFERRED SECURITIES ------------ -------------------- Merrill Lynch, Pierce, Fenner & Smith Incorporated................................ Goldman, Sachs & Co.................................. ----- Total........................................... [ ] =====
The Underwriters propose to offer the Preferred Securities, in part, directly to the public at the initial public offering price set forth on the cover page of this Prospectus Supplement, and, in part, to certain securities dealers at such price less a concession of $ per Preferred Security. The Underwriters may allow, and such dealers may reallow, a concession not in excess of $ per Preferred Security to certain brokers and dealers. After the Preferred Securities are released for sale to the public, the offering price and other selling terms may from time to time be varied by the Representatives. In view of the fact that the proceeds of the sale of the Preferred Securities will ultimately be used to purchase the Subordinated Notes of GWFC, the Underwriting Agreement provides that GWFC will pay as compensation ("Underwriters' Compensation") to the Underwriters' arranging the investment therein of such proceeds, an amount in New York Clearing House (next day) funds of $ per Preferred Security (or $ in the aggregate) for the accounts of the several Underwriters; provided that, such compensation for sales of 10,000 or more Preferred Securities to any single purchaser will be $ per Preferred Security. Therefore, to the extent of such sales, the actual amount of Underwriters Compensation will be less than the aggregate amount specified in the preceding sentence. During a period of 30 days from the date of the Prospectus Supplement, neither GWFC nor the Trust will, without the prior written consent of the Underwriters, directly or indirectly, sell, offer to sell, grant any option for the sale of, or otherwise dispose of, any Preferred Securities, any security convertible into or exchangeable into or exercisable for Preferred Securities or Subordinated Notes or any debt securities substantially similar to the Subordinated Notes or equity securities substantially similar to the Preferred Securities (except for the Subordinated Notes and the Preferred Securities offered hereby). The Preferred Securities have been approved for listing on the New York Stock Exchange. Trading of the Preferred Securities on the New York Stock Exchange is expected to commence within a 30-day period after the initial delivery of the Preferred Securities. The Representatives have advised the Trust that they intend to make a market in the Preferred Securities prior to the commencement of trading on the New York Stock Exchange. The Representatives will have no obligation to make a market in the Preferred Securities, however, and may cease market making activities, if commenced, at any time. Prior to this offering there has been no public market for the Preferred Securities. In order to meet one of the requirements for listing the Preferred Securities on the New York Stock Exchange, the Underwriters will undertake to sell lots of 100 or more Preferred Securities to a minimum of 400 beneficial holders. S-34 The Trust and GWFC have agreed to indemnify the Underwriters against, or contribute to payments that the Underwriters may be required to make in respect of, certain liabilities, including liabilities under the Securities Act of 1933, as amended. Certain of the Underwriters engage in transactions with, and, from time to time, have performed services for, GWFC and its subsidiaries in the ordinary course of business. LEGAL MATTERS The validity of the Preferred Securities will be passed upon by Skadden, Arps, Slate, Meager & Flom, special counsel to the Trust. The validity of the Subordinated Notes, the Guarantee, the Depositary Shares and the Preferred Stock and certain matters relating thereto will be passed upon for GWFC by O'Melveny & Myers. Brown & Wood will act as counsel to the Underwriters. S-35 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR IN- CORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PRO- SPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY GREAT WESTERN FINANCIAL CORPORATION, GREAT WEST- ERN FINANCIAL TRUST I OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PRO- SPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF GREAT WESTERN FINANCIAL CORPORATION OR GREAT WESTERN FINANCIAL TRUST I SINCE THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE 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 PROSPECTUS SUPPLEMENT
PAGE ---- Risk Factors.............................................................. S-4 Recent Financial Results.................................................. S-8 Capitalization of GWFC.................................................... S-9 Accounting Treatment...................................................... S-9 Use of Proceeds........................................................... S-9 Description of the Offered Preferred Securities........................... S-9 Description of the Subordinated Notes..................................... S-21 Effect of Obligations Under the Subordinated Notes and the Guarantee...... S-27 Description of Depositary Shares.......................................... S-28 Description of Cumulative Preferred Stock................................. S-29 Certain Federal Income Tax Consequences................................... S-31 Underwriting.............................................................. S-34 Legal Matters............................................................. S-35
PROSPECTUS Available Information....................................................... 2 Incorporation of Certain Documents by Reference............................. 2 The Company................................................................. 4 The Trust................................................................... 4 Use of Proceeds............................................................. 5 Selected Financial Data..................................................... 6 Ratio of Earnings to Fixed Charges.......................................... 7 Description of Debt Securities.............................................. 7 Description of Preferred Stock.............................................. 14 Description of Depositary Shares............................................ 18 Description of Common Stock................................................. 21 Description of Preferred Securities......................................... 22 Description of Guarantee.................................................... 23 Description of Securities Warrants.......................................... 25 Plan of Distribution........................................................ 29 Experts..................................................................... 29
- ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- [ ] PREFERRED SECURITIES GREAT WESTERN FINANCIAL TRUST I % TRUST ORIGINATED PREFERRED SECURITIES ("TOPRS") SM GUARANTEED TO THE EXTENT SET FORTH HEREIN BY GREAT WESTERN FINANCIAL CORPORATION ---------------------- PROSPECTUS SUPPLEMENT ---------------------- MERRILL LYNCH & CO. GOLDMAN, SACHS & CO. , 1995 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----