0000950132-95-000324.txt : 19950829 0000950132-95-000324.hdr.sgml : 19950829 ACCESSION NUMBER: 0000950132-95-000324 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 19950825 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MELLON BANK CORP CENTRAL INDEX KEY: 0000064782 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 251233834 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 033-62151 FILM NUMBER: 95567304 BUSINESS ADDRESS: STREET 1: ONE MELLON BANK CENTER STREET 2: 500 GRANT ST CITY: PITTSBURGH STATE: PA ZIP: 15258-0001 BUSINESS PHONE: 4122345000 FORMER COMPANY: FORMER CONFORMED NAME: MELLON NATIONAL CORP DATE OF NAME CHANGE: 19841014 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MELLON FINANCIAL CO CENTRAL INDEX KEY: 0000317598 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 251233834 STATE OF INCORPORATION: PA FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 033-62151-01 FILM NUMBER: 95567305 BUSINESS ADDRESS: STREET 1: 500 GRANT ST STREET 2: ONE MELLON BANK CENTER CITY: PITTSBURGH STATE: PA ZIP: 15258 BUSINESS PHONE: 4122345000 S-3 1 FORM S-3 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 23, 1995 REGISTRATION NO. 33- ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ----------- MELLON FINANCIAL COMPANY MELLON BANK CORPORATION (Exact name of registrants as specified in their charters) PENNSYLVANIA PENNSYLVANIA (State or other jurisdiction of (State or other jurisdiction of incorporation or organization) incorporation or organization) 25-1387025 25-1233834 (I.R.S. Employer Identification (I.R.S. Employer Identification Number) Number) ONE MELLON BANK CENTER 500 GRANT STREET PITTSBURGH, PENNSYLVANIA 15258 412-234-5000 (Address, including zip code, and telephone number, including area code, of registrants' principal executive offices) JAMES M. GOCKLEY, ESQ. ASSISTANT GENERAL COUNSEL AND SECRETARY MELLON BANK CORPORATION ONE MELLON BANK CENTER 500 GRANT STREET PITTSBURGH, PENNSYLVANIA 15258 412-234-5222 (Name, address, including zip code, and telephone number, including area code, of agent for service) COPY TO: MARK J. WELSHIMER, ESQ. SULLIVAN & CROMWELL 125 BROAD STREET NEW YORK, NEW YORK 10004 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. [X] CALCULATION OF REGISTRATION FEE ------------------------------------------------------------------------------- -------------------------------------------------------------------------------
PROPOSED PROPOSED TITLE OF EACH CLASS OF MAXIMUM MAXIMUM SECURITIES AMOUNT TO BE AGGREGATE AGGREGATE AMOUNT OF TO BE REGISTERED REGISTERED PRICE PER UNIT OFFERING PRICE REGISTRATION FEE ----------------------------------------------------------------------------------------------- Debt Securities......... $1,500,000,000(1) 100%(2) $1,500,000,000 $517,242 Guarantees--constituting guarantees of the Debt Securities by Mellon Bank Corporation........ $1,500,000,000 (3) (3) none -----------------------------------------------------------------------------------------------
------------------------------------------------------------------------------- (1) In no event will the aggregate initial offering price of the Debt Securities issued under this Registration Statement exceed $1,500,000,000 or the equivalent thereof in foreign currencies or currency units. (2) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457. (3) No separate consideration will be received for the Guarantees. The registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- PROSPECTUS MELLON FINANCIAL COMPANY (A WHOLLY OWNED SUBSIDIARY OF MELLON BANK CORPORATION) $1,500,000,000 DEBT SECURITIES UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST, IF ANY, BY MELLON BANK CORPORATION Mellon Financial Company (the "Company") may issue from time to time in one or more series up to $1,500,000,000 (or the equivalent thereof in foreign currencies or currency units) aggregate principal amount of its unsecured debt securities consisting of debentures, notes and/or other unsecured evidences of indebtedness (the "Debt Securities"), which may be either senior (the "Senior Securities") or subordinated (the "Subordinated Securities") in priority of payment. All Senior Securities will be unconditionally guaranteed on a senior basis as to payment of principal, premium, if any, and interest, if any, by Mellon Bank Corporation (the "Corporation"). All Subordinated Securities will be unconditionally guaranteed on a subordinated basis as to payment of principal, premium, if any, and interest, if any, by the Corporation. The Debt Securities may be offered as separate series in amounts, at prices and on terms to be determined at the time of sale and to be set forth in supplements to this Prospectus (the "Prospectus Supplement"). The terms of each series of Debt Securities, including, where applicable, the specific designation, priority, aggregate principal amount, denominations, maturity, premium, if any, rate or rates and time or times of payment of interest, if any, terms for redemption at the option of the Company or the holder, if any, terms for sinking or purchase fund payments, if any, the initial public offering price, the proceeds to the Company, and any other specific terms in connection with the offering and sale of the Debt Securities in respect of which this Prospectus is being delivered, are set forth in the accompanying Prospectus Supplement. The Subordinated Indenture does not provide for any right of acceleration of the payment of principal of the Subordinated Securities upon a default in the payment of principal or interest or in the performance of any covenant or agreement in the Subordinated Securities or the Subordinated Indenture. See "Subordinated Securities--Events of Default and Limited Rights of Acceleration". As used herein, Debt Securities shall include securities denominated in United States dollars or, at the option of the Company if so specified in the Prospectus Supplement, in any other currency or in composite currencies or in amounts determined by reference to an index. Debt Securities of a series will be issued in registered form without coupons and may be issued, at the option of the Company, in the form of a certificate in definite form (a "Certificated Security") or in the form of one or more global securities in registered form (each a "Global Security"). The Debt Securities may be sold by the Company directly to purchasers, through agents designated from time to time, through underwriting syndicates led by one or more managing underwriters or through one or more underwriters acting alone. If the Company, directly or through agents, solicits offers to purchase the Debt Securities, the Company reserves the sole right to accept and, together with its agents, to reject, in whole or in part, any such offer. See "Plan of Distribution". If any agent of the Company, or any underwriter, is involved in the sale of the Debt Securities, the name of such agent or underwriter, the principal amount to be purchased by it, any applicable commissions or discounts and the net proceeds to the Company from such sale are set forth in, or may be calculated from, the Prospectus Supplement. The aggregate net proceeds to the Company from the sale of all the Debt Securities will be the public offering or purchase price of the Debt Securities sold less the aggregate of such commissions and discounts and other expenses of issuance and distribution. See "Plan of Distribution" for possible indemnification and contribution arrangements with agents or underwriters. ------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMIS- SION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------ THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS OR DEPOSIT ACCOUNTS AND ARE NOT INSURED BY THE BANK INSURANCE FUND OR SAVINGS ASSOCIATION INSURANCE FUND OF THE FEDERAL DEPOSIT INSURANCE CORPORATION. ------------ THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF DEBT SECURITIES UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT AND/OR AN ABBREVIATED TERM SHEET UNDER RULE 434 OF THE SECURITIES ACT OF 1933. ------------ The date of this Prospectus is , 1995 NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE CORPORATION OR ANY UNDERWRITER OR AGENT. THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY DEBT SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR THE CORPORATION SINCE SUCH DATE. STATEMENT OF AVAILABLE INFORMATION The Corporation is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information can be inspected and copied at the public reference facilities of the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the Commission's regional offices at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, Suite 1300, New York, New York 10048. Copies of such material can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, such reports, proxy statements and other information concerning the Corporation can be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005. The Company and the Corporation have filed with the Commission a Registration Statement under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the Debt Securities and the related guarantees. This Prospectus does not contain all the information set forth in the Registration Statement, certain portions of which have been omitted as permitted by the rules and regulations of the Commission. For further information with respect to the Company and the Corporation and the Debt Securities and related guarantees, reference is made to the Registration Statement, including the exhibits thereto. The Registration Statement may be inspected by anyone without charge at the principal office of the Commission in Washington, D.C., and copies of all or part of it may be obtained from the Commission upon payment of the prescribed fees. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents heretofore filed with the Commission by the Corporation are incorporated in this Prospectus by reference and made a part hereof: (1) The Corporation's Annual Report on Form 10-K for the year ended December 31, 1994, filed pursuant to Section 13 of the Exchange Act. (2) The Corporation's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995 and June 30, 1995, each filed pursuant to Section 13 of the Exchange Act. (3) The Corporation's Current Reports on Form 8-K dated January 13, 1995, April 18, 1995, June 12, 1995, June 14, 1995, and July 18, 1995, each filed pursuant to Section 13 of the Exchange Act. Each document or report subsequently filed by the Corporation with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the termination of the offering of the Debt Securities shall be deemed to be incorporated by reference into this Prospectus and to be a part of this 2 Prospectus from the date of filing of such document. Any statement contained herein, or in a document all or a portion of which is incorporated or deemed to be incorporated by reference herein, shall be deemed to be modified or superseded for purposes of the Registration Statement and this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of the Registration Statement or this Prospectus. The Corporation will provide without charge to any person to whom this Prospectus is delivered, on the written or oral request of such person, a copy of any or all of the foregoing documents incorporated by reference, other than certain exhibits to such documents. Written requests should be directed to: Secretary, Mellon Bank Corporation, Room 1820, One Mellon Bank Center, 500 Grant Street, Pittsburgh, Pennsylvania 15258. Telephone requests may be directed to the Corporation at (412) 234-5222. ------------ MELLON BANK CORPORATION The Corporation is a multibank holding company incorporated under the laws of Pennsylvania and registered under the Bank Holding Company Act of 1956, as amended. At December 31, 1994, the Corporation was the twenty-fourth largest bank holding company in the United States in terms of assets. Its principal wholly owned subsidiaries are Mellon Bank, N.A. ("Mellon Bank"), The Boston Company, Inc. ("The Boston Company"), Mellon Bank (DE) National Association, Mellon Bank (MD), Mellon PSFS (NJ) National Association and the companies known as the Mellon Financial Services Corporations. The Corporation also owns a federal savings bank located in New Jersey, Mellon Bank, F.S.B. The Dreyfus Corporation ("Dreyfus"), one of the nation's largest mutual fund companies, is a wholly owned subsidiary of Mellon Bank. The Corporation's banking subsidiaries engage in retail banking, commercial banking, trust and investment management services, residential real estate loan financing, mortgage servicing, mutual fund and various securities-related activities. Through various non-bank subsidiaries, the Corporation provides a broad range of bank-related services, including commercial financial services, equipment leasing, commercial loan financing, stock transfer services, cash management and numerous trust and investment management services. The Corporation's principal executive office is located at One Mellon Bank Center, 500 Grant Street, Pittsburgh, Pennsylvania 15258 (telephone (412) 234- 5000). MELLON FINANCIAL COMPANY The Company is a wholly owned subsidiary of the Corporation incorporated under the laws of Pennsylvania to function as a financing entity for the Corporation and its subsidiaries and affiliates through the issuance of commercial paper and other debt guaranteed by the Corporation. Financial data for the Company and the Corporation are combined for financial reporting purposes due to the limited function of the Company and the unconditional guarantees of all of the Company's obligations by the Corporation. The registered office of the Company is located at One Mellon Bank Center, 500 Grant Street, Pittsburgh Pennsylvania 15258 (telephone (412) 234-5000). USE OF PROCEEDS The Company will apply the net proceeds from the sale of the Debt Securities offered hereby to its general funds to be used for its corporate financing purposes, including extensions of credit to the Corporation and to subsidiaries and affiliates of the Corporation, including its bank subsidiaries, which will use the proceeds of such 3 extensions of credit for general corporate purposes, possibly including acquisitions, and repayment at maturity of commercial paper and other outstanding indebtedness. The precise amounts and timing of the application of proceeds will depend upon funding requirements of the Corporation and its subsidiaries and affiliates and the amount of Debt Securities offered from time to time pursuant to this Prospectus. For a more precise description regarding the application of the proceeds, see "Use of Proceeds" in the Prospectus Supplement. In view of its anticipated funding requirements, the Company expects that it may, on a recurring basis, engage in additional private or public financings of a character and amount to be determined as the need arises. CERTAIN REGULATORY CONSIDERATIONS GENERAL The Company and the Corporation (together sometimes referred to herein as the "parent Corporation") are legal entities separate and distinct from the Corporation's bank subsidiaries, although the principal source of the parent Corporation's cash revenues are payments of interest and dividends from such subsidiaries. There are various legal and regulatory limitations on the extent to which the Corporation's bank subsidiaries can finance or otherwise supply funds to the Corporation and certain of its other affiliates. The prior approval of the Comptroller of the Currency (the "Comptroller") is required if the total of all dividends declared by any such national bank subsidiary in any calendar year exceeds its net profits (as defined by the Comptroller) for that year combined with its retained net profits for the preceding two calendar years. Additionally, national bank subsidiaries may not declare dividends in excess of net profits on hand (as defined), after deducting the amount by which the principal amount of all loans on which interest is past due for a period of six months or more exceeds the reserve for credit losses. Under the first and currently more restrictive of the foregoing dividend limitations, the Corporation's national bank subsidiaries can, without prior regulatory approval, declare dividends for the remainder of 1995 subsequent to June 30, 1995 of up to approximately $490 million of their retained earnings of approximately $2.103 billion at June 30, 1995, less any dividends declared and plus or minus net profits or losses, as defined, between July 1, 1995, and the date of any such dividend declaration. The payment of dividends is also limited by minimum capital requirements imposed on all national bank subsidiaries by the Comptroller. The Corporation's national bank subsidiaries exceed these minimum requirements. The national bank subsidiaries declared dividends to the parent Corporation of $201 million in the first six months of 1995, $366 million in 1994, $185 million in 1993 and $154 million in 1992. Dividends paid to the parent Corporation by non-bank subsidiaries totaled $13 million in the first six months of 1995, $122 million in 1994, $116 million in 1993 and $26 million in 1992. In addition, Mellon Bank returned $300 million of paid-in surplus to the parent Corporation in the second quarter of 1995, and The Boston Company returned $100 million and $300 million of capital to the parent Corporation in 1994 and 1993, respectively. The Federal Reserve Board and the Comptroller also have issued guidelines that require bank holding companies and national banks to continuously evaluate the level of cash dividends in relation to the organization's operating income, capital needs, asset quality and overall financial condition. The Comptroller also has authority under the Financial Institutions Supervisory Act to prohibit national banks from engaging in any activity which, in the Comptroller's opinion, constitutes an unsafe or unsound practice in conducting their businesses. The payment of a dividend by a bank could, depending upon the financial condition of such bank and other factors, be construed by the Comptroller to be such an unsafe or unsound practice. The Comptroller has stated that a dividend by a national bank should bear a direct correlation to the level of the bank's current and expected earnings stream, the bank's need to maintain an adequate capital base and the marketplace's perception of the bank and should not be governed by the financing needs of the bank's parent corporation. As a result, notwithstanding the level of dividends that could be declared without regulatory approval by the Corporation's national bank subsidiaries as set forth in the preceding paragraph, the level of dividends from such bank subsidiaries to the Corporation in 1995 generally is not expected to exceed the earnings for those subsidiaries. If the ability of such subsidiaries to pay dividends to the Corporation were to become restricted, the Corporation would need to rely on alternative means of raising funds to satisfy its cash requirements, which 4 might include, but would not be restricted to, non-bank subsidiary dividends, asset sales or other capital market transactions. The Financial Institutions Reform, Recovery and Enforcement Act of 1989 contains a "cross-guarantee" provision that could result in any insured depository institution owned by the Corporation (i.e., any bank subsidiary) being assessed for losses incurred by the Federal Deposit Insurance Corporation (the "FDIC") in connection with assistance provided to, or the failure of, any other depository institution owned by the Corporation. Under Federal Reserve Board policy, the Corporation may be expected to act as a source of financial strength to each of its bank subsidiaries and to commit resources to support each such bank in circumstances where such bank might not be in a financial position to do so. FDICIA The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") substantially revised the bank regulatory and funding provisions of the Federal Deposit Insurance Act and made revisions to several other federal banking statutes. Among other things, FDICIA requires the federal banking agencies to take "prompt corrective action" in respect of depository institutions that do not meet minimum capital requirements. FDICIA establishes five capital tiers: "well capitalized," "adequately capitalized," "undercapitalized," "significantly undercapitalized" and "critically undercapitalized." Rules adopted by the federal banking agencies under FDICIA provide that an institution is deemed to be: "well capitalized" if the institution has a total (Tier I plus Tier II) risk-based capital ratio of 10.0% or greater, a Tier I risk-based ratio of 6.0% or greater, and a leverage ratio of 5.0% or greater, and the institution is not subject to an order, written agreement, capital directive, or prompt corrective action directive to meet and maintain a specific level for any capital measure; "adequately capitalized" if the institution has a total risk-based capital ratio of 8.0% or greater, a Tier I risk-based capital ratio of 4.0% or greater, and a leverage ratio of 4.0% or greater (or a leverage ratio of 3.0% or greater if the institution is rated composite 1 in its most recent report of examination, subject to appropriate federal banking agency guidelines), and the institution does not meet the definition of a well-capitalized institution; "undercapitalized" if the institution has a total risk-based capital ratio that is less than 8.0%, a Tier I risk-based capital ratio that is less than 4.0% or a leverage ratio that is less than 4.0% (or a leverage ratio that is less than 3.0% if the institution is rated composite 1 in its most recent report of examination, subject to appropriate federal banking agency guidelines) and the institution does not meet the definition of a significantly undercapitalized or critically undercapitalized institution; "significantly undercapitalized" if the institution has a total risk-based capital ratio that is less than 6.0%, a Tier I risk-based capital ratio that is less than 3.0%, or a leverage ratio that is less than 3.0% and the institution does not meet the definition of a critically undercapitalized institution; and "critically undercapitalized" if the institution has a ratio of tangible equity to total assets that is equal to or less than 2.0%. FDICIA imposes progressively more restrictive constraints on operations, management and capital distributions, depending on the capital category in which an institution is classified. At June 30, 1995, all of the Corporation's banking subsidiaries qualified as well capitalized based on the ratios and guidelines noted above. A bank's capital category, however, is determined solely for the purpose of applying the prompt corrective action rules and may not constitute an accurate representation of the bank's overall financial condition or prospects. The appropriate federal banking agency may, under certain circumstances, reclassify a well capitalized insured depository institution as adequately capitalized. The appropriate agency is also permitted to require an adequately capitalized or undercapitalized institution to comply with the supervisory provisions as if the institution were in the next lower category (but not treat a significantly undercapitalized institution as critically undercapitalized) based on supervisory information other than the capital levels of the institution. The statute provides that an institution may be reclassified if the appropriate federal banking agency determines (after notice and opportunity for hearing) that the institution is in an unsafe or unsound condition or deems the institution to be engaging in an unsafe or unsound practice. 5 FDICIA generally prohibits a depository institution from making any capital distribution (including payment of a dividend) or paying any management fee to its holding company if the depository institution would thereafter be undercapitalized. Undercapitalized depository institutions are subject to growth limitations and are required to submit a capital restoration plan. The federal banking agencies may not accept a capital restoration plan without determining, among other things, that the plan is based on realistic assumptions and is likely to succeed in restoring the depository institution's capital. In addition, for a capital restoration plan to be acceptable, the depository institution's parent holding company must guarantee that the institution will comply with such capital restoration plan. The aggregate liability of the parent holding company is limited to the lesser of (i) an amount equal to 5.0% of the depository institution's total assets at the time it became undercapitalized, and (ii) the amount which is necessary (or would have been necessary) to bring the institution into compliance with all capital standards applicable with respect to such institution as of the time it fails to comply with the plan. If a depository institution fails to submit an acceptable plan, it is treated as if it is significantly undercapitalized. Significantly undercapitalized depository institutions may be subject to a number of requirements and restrictions, including orders to sell sufficient voting stock to become adequately capitalized, requirements to reduce total assets and cessation of receipt of deposits from correspondent banks. Critically undercapitalized institutions are subject to the appointment of a receiver or conservator. FDICIA also contains a variety of other provisions that may affect the operation of the Corporation, including new reporting requirements, regulatory standards for real estate lending, "truth in savings" provisions, and the requirement that a depository institution give 90 days prior notice to customers and regulatory authorities before closing any branch. CAPITAL The risk-based capital guidelines for bank holding companies and banks adopted by the federal banking agencies were fully phased in at the end of 1992. The minimum ratio of qualifying total capital to risk-weighted assets (including certain off-balance sheet items, such as standby letters of credit) under the fully phased in guidelines is 8.0%. At least half of the total capital is to be comprised of common stock, retained earnings, noncumulative perpetual preferred stocks, minority interests and, for bank holding companies, a limited amount of qualifying cumulative perpetual preferred stock, less goodwill and certain other intangibles ("Tier I capital"). The remainder ("Tier II capital") may consist of other preferred stock, certain other instruments, and limited amounts of subordinated debt and the reserve for credit losses. In addition, the federal banking agencies have established minimum leverage ratio (Tier I capital to total average assets less goodwill and certain other intangibles) guidelines for bank holding companies and banks. These guidelines provide for a minimum leverage ratio of 3.0% for bank holding companies and banks that meet certain specified criteria, including that they have the highest regulatory rating. All other banking organizations will be required to maintain a leverage ratio of 3.0% plus an additional cushion of at least 100 to 200 basis points. The guidelines also provide that banking organizations experiencing internal growth or making acquisitions will be expected to maintain strong capital positions substantially above the minimum supervisory levels, without significant reliance on intangible assets. Furthermore, the guidelines indicate that the Federal Reserve Board will continue to consider a "tangible Tier I leverage ratio" in evaluating proposals for expansion of new activities. The tangible Tier I leverage ratio is the ratio of Tier I capital, less intangibles not deducted from Tier I capital, to total assets, less all intangibles. Neither the Corporation nor any of its banking subsidiaries has been advised of any specific minimum leverage ratio applicable to it. The federal banking agencies have revised their risk-based capital standards to ensure that such standards take adequate account of concentrations of credit risk and the risks of nontraditional activities. Institutions with high or moderate levels of risks are expected to operate above minimum capital standards. In November 1994, the federal banking agencies announced that they determined not to adopt a proposed rule to amend regulatory capital regulations to incorporate the recent change in generally accepted accounting 6 principles made by Statement of Financial Accounting Standards No. 115, which requires that unrealized gains and losses, net of the related tax effect, on securities classified as available for sale be reported as a separate component of stockholders' equity. The federal banking agencies have adopted rules to incorporate an interest rate risk component into their risk-based capital standards. Certain consolidated ratios of the Corporation are included herein under "Mellon Bank Corporation--Consolidated Summary Financial Data." FDIC INSURANCE ASSESSMENTS Substantially all of the deposits of the banking subsidiaries of the Corporation are insured up to applicable limits by the Bank Insurance Fund ("BIF") of the FDIC and are subject to deposit insurance assessments to maintain the BIF. The FDIC has adopted a risk-based assessment system to replace the previous flat-rate system. The risk-based system imposes insurance premiums based upon a matrix that takes into account a bank's capital level and supervisory rating. In August 1995, the FDIC approved a reduction in the assessment rates imposed on banks for BIF deposit insurance. As a result of such reduction, such rates now range from 4 cents for each $100 of domestic deposits for the healthiest institutions to 31 cents for each $100 of domestic deposits for the weakest institutions. INTERSTATE BANKING AND BRANCHING LEGISLATION On September 29, 1994, the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the "Interstate Act") was enacted into Federal law. Under the Interstate Act, commencing on September 29, 1995, bank holding companies will be permitted to acquire banks located in any state regardless of the state law in effect at the time. The Interstate Act also provides for the nationwide interstate branching of banks. Under the Interstate Act, both national and state-chartered banks will be permitted to merge across state lines (and thereby create interstate branches) commencing June 1, 1997. States are permitted to "opt-out" of the interstate branching authority by taking action prior to the commencement date. States may also "opt-in" early (i.e., prior to June 1, 1997) to the interstate branching provisions. 7 MELLON BANK CORPORATION CONSOLIDATED SUMMARY FINANCIAL DATA This summary is qualified in its entirety by the detailed information and financial statements included in the documents incorporated herein by reference. See "Incorporation of Certain Documents by Reference".
YEAR ENDED DECEMBER 31, ------------------------------------------- 1994 1993 1992 1991 1990 (DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE AMOUNTS) ------- ------- ------- ------- ------- Consolidated Statement of Operations Data: Net interest revenue.......................... $ 1,508 $ 1,329 $ 1,182 $ 1,012 $ 912 Provision for credit losses................... 70 125 185 250 315 Net interest revenue after provision for losses....................................... 1,438 1,204 997 762 597 Fee revenue................................... 1,652 1,538 1,154 1,007 933 Gains (losses) on sale of securities.......... (5) 100 129 81 28 Gain on sale of consumer finance subsidiary... -- -- -- -- 74 Operating expense............................. 2,374 2,084 1,648 1,440 1,355 Provision for income taxes.................... 278 298 104 62 41 ------- ------- ------- ------- ------- Net income.................................... $ 433 $ 460 $ 528 $ 348 $ 236 Net income applicable to common stock......... 358 397 477 299 186 Consolidated Per Common Share Data: Primary net income............................ $ 2.42 $ 2.73 $ 3.56 $ 2.39 $ 1.57 Dividends..................................... 1.57 1.01 0.93 0.93 0.93 Book value at period-end...................... 25.06 24.28 21.37 18.44 16.60 Average common shares and equivalents outstanding (in thousands)................... 149,069 147,083 134,858 126,554 120,981 Results Excluding Certain Items(A): Net income.................................... $ 652 $ 519 $ 398 $ 259 $ 182 Net income per common share................... 4.00 3.14 2.60 1.69 1.12 Return on average common shareholders' equity. 16.02% 13.71% 13.13% 8.97% 5.85% Return on average assets...................... 1.71 1.46 1.29 0.87 0.59 Consolidated Balance Sheet--Average Balances(B): Money market investments...................... $ 1,656 $ 3,821 $ 1,905 $ 1,566 $ 2,927 Securities.................................... 5,149 4,804 6,500 5,778 5,238 Loans......................................... 25,097 21,763 18,235 18,514 18,845 Total interest-earning assets................. 32,282 30,657 26,948 26,167 27,288 Total assets.................................. 38,106 35,635 30,758 29,878 31,078 Deposits...................................... 27,248 26,541 22,684 21,438 22,084 Notes and debentures (with original maturities over one year)............................... 1,768 1,991 1,365 1,448 1,722 Redeemable preferred stock.................... -- -- -- 51 94 Common shareholders' equity................... 3,691 3,323 2,603 2,190 2,042 Total shareholders' equity.................... 4,277 3,964 3,112 2,614 2,437 Consolidated Percentages: Return on average common shareholders' equity(B).................................... 9.79% 12.08% 18.45% 13.78% 9.30% Return on average assets(B)................... 1.14 1.29 1.72 1.16 0.76 Net interest margin(B): Taxable equivalent basis(C).................. 4.71 4.39 4.46 3.99 3.49 Without taxable equivalent increments........ 4.67 4.34 4.39 3.86 3.34 Dividends per common share as a percentage of primary net income per common share.......... 54.66 31.28 21.11 29.52 43.95 Capital Ratios: Common shareholders' equity to assets(D)...... 9.54% 9.57% 8.85% 7.91% 6.67% Average common shareholders' equity to average assets....................................... 9.68 9.32 8.46 7.33 6.57 Tier I capital ratio(D)....................... 9.48 9.70 10.20 9.05 7.42 Total (Tier I plus Tier II) capital ratio(D).. 12.90 13.22 13.83 13.16 11.28 Leverage capital ratio(D)..................... 8.67 9.00 9.45 8.62 6.91
8
YEAR ENDED DECEMBER 31, ------------------------------------------- 1994 1993 1992 1991 1990 (DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE AMOUNTS) ------- ------- ------- ------- ------- Asset Quality Ratios (E): Reserve for credit losses as a percentage of: Total loans(D)....................... 2.27% 2.45% 2.54% 3.12% 2.80% Nonperforming loans(D)............... 403 297 152 113 100 Net credit losses as a percentage of average loans........................ 0.27 0.64 1.52 1.24 2.15 Total nonperforming assets as a percentage of total loans and net acquired property(D)............. 0.89 1.39 2.94 4.78 4.11 Ratio of Earnings to Fixed Charges: Mellon Bank Corporation (parent Corporation)(F)...................... 5.56 3.03 2.73 2.42 1.75(H) Mellon Bank Corporation and its Subsidiaries:(G) Excluding interest on deposits....... 3.35 4.17 3.62 2.15 1.41(H) Including interest on deposits....... 1.84 2.09 1.72 1.30 1.11(H)
-------- Note: The August 1994 merger with Dreyfus was accounted for as a pooling of interests. Therefore, all amounts, except for dividends per share, prior to August 1994 have been restated to reflect the merger. Per share amounts have also been restated to reflect the three-for-two common stock split that occurred in November 1994. The comparability of the information set forth above and on the prior page has been affected by the Corporation's December 1993 acquisition of AFCO Credit Corporation and CAFO, Inc., the May 1993 acquisition of The Boston Company, the December 1992 acquisition of certain assets and deposit liabilities of Meritor Savings Bank ("Meritor"), the December 1991 acquisition of United Penn Bank and by the May 1990 acquisition of 54 branch offices of PSFS from Meritor. These are described in detail in the Corporation's Annual Reports on Form 10-K for the years ended December 31, 1990 through 1994. Footnotes on following page. 9 (A) Results for 1994 exclude a $130 million after tax securities lending charge, $79 million after tax of Dreyfus merger-related expenses, $10 million after tax of one-time losses on the disposition of securities available for sale previously owned by Dreyfus and $16 million of preferred stock dividends recorded in connection with the redemption of the Series H preferred stock. Results for 1993 exclude $112 million after tax of merger expenses and $53 million after tax of gains on the sale of securities related to the acquisition of The Boston Company. Results for periods prior to 1993 were calculated by applying a normalized effective tax rate of approximately 38% to pretax income. The unrecorded tax benefit that existed at the beginning of the periods, prior to 1993, was included in the determination of the return on common shareholders' equity. (B) Computed on a daily average basis. (C) Calculated on a taxable equivalent basis, at tax rates approximating 35% for 1994 and 1993 and 34% in all other years presented. Loan fees, nonaccrual loans and the related effect on income have been included in the calculation of the net interest margin. (D) Period-end ratio. (E) Segregated assets acquired in the 1992 Meritor acquisition are not reported as loans and therefore are not included in nonperforming loans. The reserve for segregated assets is not included in the reserve for credit losses. (F) The parent Corporation ratios include the accounts of the Corporation and the Company, a wholly owned subsidiary of the Corporation that functions as a financing entity for the Corporation and its subsidiaries by issuing commercial paper and other debt guaranteed by the Corporation. For purposes of computing these ratios, earnings represent parent Corporation income before income taxes, and before equity in undistributed net income (loss) of subsidiaries, plus the fixed charges of the parent Corporation. Fixed charges represent interest expense, one-third (the proportion deemed representative of the interest factor) of rental expense net of income from subleases, and amortization of debt issuance costs. Because these ratios exclude from earnings the equity in undistributed net income (loss) of subsidiaries, these ratios vary with the payment of dividends by such subsidiaries. (G) For purposes of computing these ratios, earnings represent consolidated income before income taxes plus consolidated fixed charges. Fixed charges, excluding interest on deposits, include interest expense (other than on deposits), one-third (the proportion deemed representative of the interest factor) of rental expense net of income from subleases, and amortization of debt issuance costs. Fixed charges, including interest on deposits, include all interest expense, one-third (the proportion deemed representative of the interest factor) of rental expense net of income from subleases, and amortization of debt issuance costs. (H) Excludes the $74 million gain on the sale of the Corporation's consumer finance subsidiary. Including this gain, the ratio of earnings to fixed charges would have been 2.25 for the parent Corporation. Including this gain, the ratio of earnings to fixed charges would have been 1.56 excluding interest on deposits, and 1.15 including interest on deposits for the Corporation and its subsidiaries. 10 DESCRIPTION OF DEBT SECURITIES AND GUARANTEES The following description of the terms of the Debt Securities sets forth certain general terms and provisions of the Debt Securities and the guarantees thereof by the Corporation (the "Guarantees") to which any Prospectus Supplement may relate (the "Offered Debt Securities"). The particular terms of the Offered Debt Securities and the extent, if any, to which such general provisions may apply to the Debt Securities and the Guarantees so offered will be described in the Prospectus Supplement relating to such Offered Debt Securities. Except where specifically noted, the following description applies to both Senior Securities and Subordinated Securities. DEBT SECURITIES The Debt Securities will be unsecured obligations of the Company and are not insured by the Savings Association Insurance Fund or the Bank Insurance Fund of the Federal Deposit Insurance Corporation. The Debt Securities will constitute either senior debt of the Company (the "Senior Securities") or subordinated debt of the Company (the "Subordinated Securities"). The Senior Securities will be issued under an Indenture dated as of May 2, 1988, as supplemented by the First Supplemental Indenture, dated as of November 29, 1990 (the "Senior Indenture"), among the Company, the Corporation and The Chase Manhattan Bank (National Association), as Trustee ("Chase"). The Subordinated Securities will be issued under an Indenture, dated as of August 25, 1995 (the "Subordinated Indenture"), among the Company, the Corporation and First Interstate Bank of California, as Trustee ("First Interstate"). The Senior Indenture and the Subordinated Indenture are collectively referred to herein as the "Indentures". References to the "Trustee" shall mean Chase or First Interstate, as applicable. The statements which follow under this caption are brief summaries of certain provisions contained in the Indentures, do not purport to be complete and are qualified in their entirety by reference to all the provisions of the applicable Indenture, copies of which have been filed with the Commission as exhibits to the Registration Statement or incorporated by reference therein. Whenever defined terms are used but not defined herein, such terms shall have the meanings ascribed to them in the applicable Indenture, it being intended that such defined terms shall be incorporated herein by reference. References to Sections are references to Sections in the applicable Indenture or, where appropriate, to both Indentures. Neither Indenture limits the aggregate principal amount of Debt Securities which may be issued thereunder and each Indenture provides that Debt Securities of any series may be issued thereunder up to the aggregate principal amount which may be authorized from time to time by the Company. Neither the Indentures nor the Debt Securities will limit or otherwise restrict the amount of other indebtedness which may be incurred or the other securities which may be issued by the Company or any of its affiliates. Reference is made to the Prospectus Supplement for a description of the following terms, where applicable, of each series of the Offered Debt Securities in respect of which this Prospectus is being delivered: (1) the title of the Offered Debt Securities; (2) any limit upon the aggregate principal amount or aggregate initial public offering price of the Offered Debt Securities; (3) the Person to whom any interest on an Offered Debt Security shall be payable, if other than the Person in whose name the Offered Debt Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest; (4) the date or dates on which the principal of the Offered Debt Securities is payable; (5) the rate or rates at which the Offered Debt Securities shall bear interest, if any, or the Floating or Adjustable Rate Provision pursuant to which such rates are determined, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable and the Regular Record Date for the interest payable on any Interest Payment Date; (6) the place or places where the principal of (and premium, if any) and interest on, or the principal (and premium, if any) only of, Offered Debt Securities shall be payable; (7) the period or periods within which, the price or prices at which and the terms and conditions upon which Offered Debt Securities may be redeemed, in whole or in part, at the option of the Company; (8) the obligation, if any, of the Company to redeem or purchase Offered Debt Securities pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof 11 and the period or periods within which, the price or prices at which and the terms and conditions upon which Offered Debt Securities shall be redeemed or purchased, in whole or in part, pursuant to such obligations; (9) if other than denominations of $100,000 and any integral multiple of $1,000 in excess thereof, the denominations in which Offered Debt Securities shall be issuable; (10) any other Event or Events of Default applicable with respect to Offered Debt Securities in addition to those provided in Section 601 of the applicable Indenture; (11) if other than the principal amount thereof, the portion of the principal amount of Offered Debt Securities which shall be payable upon declaration of acceleration of the Maturity thereof; (12) any other covenant or warranty included for the benefit of Offered Debt Securities in addition to (and not inconsistent with) those included in the applicable Indenture for the benefit of all Debt Securities; (13) whether the Offered Debt Securities shall be Certificated Securities or shall be issued in whole or in part in the form of one or more Global Securities and, in such case, the Depositary for such Global Security or Securities; (14) the currency or currencies, including composite currencies, in which payment of the principal of and any premium and interest on the Offered Debt Securities shall be payable if other than the currency of the United States of America; (15) if the amount of payments of principal of and any premium or interest on the Offered Debt Securities may be determined with reference to an index, the manner in which such amounts shall be determined; (16) if the principal of (and premium, if any) or interest on the Offered Debt Securities are to be payable, at the election of the Company or a Holder thereof, in a coin or currency other than that in which the Offered Debt Securities are stated to be payable, the coin or currency in which payment of the principal of (and premium, if any) or interest on Offered Debt Securities as to which such election is made shall be payable, the period or periods within which, and the terms and conditions upon which, such election may be made; (17) whether the Offered Debt Securities are Senior Securities or Subordinated Securities; (18) the price or prices (which may be expressed as a percentage of the aggregate principal amount thereof) at which the Offered Debt Securities will be issued; (19) any other terms of the Offered Debt Securities (which terms shall not be inconsistent with the provisions of the applicable Indenture). (Section 301) If any of the Offered Debt Securities are sold for one or more foreign currencies or foreign currency units or if the principal or premium, if any, or interest, if any, on any series of Offered Debt Securities is payable in one or more foreign currencies or foreign currency units, the restrictions, elections, tax consequences, specific terms and other information with respect to such issue of Offered Debt Securities and such currencies or currency units will be set forth in the Prospectus Supplement relating thereto. Debt Securities may be issued as Original Issue Discount Securities (bearing no interest or interest at a rate which at the time of issuance is below market rates), to be sold at a substantial discount below the stated principal amount thereof due at the Stated Maturity of such Original Issue Discount Securities. In the event of an acceleration of the Maturity of any Original Issue Discount Security, the amount payable to the holder of such Original Issue Discount Security upon such acceleration will be determined in accordance with the applicable Prospectus Supplement, the terms of such security and the applicable Indenture, but will be an amount less than the amount payable at the Maturity of the principal of such Original Issue Discount Security. (Section 101) Special Federal income tax, accounting and other considerations applicable to Original Issue Discount Securities will be described in the Prospectus Supplement relating thereto. GUARANTEES The Corporation will unconditionally guarantee the due and punctual payment of the principal of, and premium, if any, and interest, if any, and sinking fund payments, if any, on the Debt Securities, when and as the same shall become due and payable, whether at maturity, by acceleration or redemption or otherwise. The Guarantees of the Senior Securities rank pari passu with all other general credit obligations of the Corporation. The Guarantees of the Subordinated Securities are subordinate in right of payment to all Senior Indebtedness of the Corporation. (Section 401) Because the Corporation is a holding company, the rights of its creditors, including the Holders of the Debt Securities in the event the Guarantees are enforced, to share in the distribution of the assets of any subsidiary 12 upon the subsidiary's liquidation or recapitalization will be subject to the prior claims of the subsidiary's creditors (including in the case of the Corporation's bank subsidiaries, their depositors), except to the extent that the Corporation may itself be a creditor with recognized claims against the subsidiary. In addition, there are certain regulatory limitations on the payment of dividends and on loans and other transfers of funds to the Corporation by its bank subsidiaries. See "Certain Regulatory Considerations". REGISTRATION AND TRANSFER Unless otherwise indicated in the Prospectus Supplement relating thereto, the Offered Debt Securities will be issued only in fully registered form without coupons in denominations of U.S. $100,000 and any integral multiple of $1,000 in excess thereof, or in the case of foreign currency notes, in the denominations indicated in the applicable Prospectus Supplement, and no service charge will be made for any transfer or exchange of such Offered Debt Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. (Sections 302 and 305) Certificated Securities may be presented for transfer (with the form of transfer endorsed thereon duly executed) or exchange for other Debt Securities of the same series at the office of the Security Registrar specified according to the terms of the applicable Indenture. (Section 305) The Company has agreed in each of the Indentures that, with respect to Debt Securities having The City of New York as a place of payment, the Company will appoint an office or agency located in The City of New York where Debt Securities of that series may be surrendered for such transfer or exchange. (Section 1102) Such transfer or exchange shall be made without service charge, but the Company may require payment of any taxes or other governmental charges as described in the applicable Indenture. GLOBAL SECURITIES Debt Securities of like tenor and having the same date of issue may be issued in whole or in part in the form of one or more Global Securities that will be deposited with, or on behalf of, a depositary (the "Depositary") identified in the Prospectus Supplement relating thereto. Global Securities will be issued in registered form. Unless and until it is exchanged in whole or in part for the individual Debt Securities represented thereby, 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 the Depositary or any such nominee to a successor Depositary or any nominee of such successor. The specific terms of the depositary arrangement with respect to any offered Debt Securities will be described in the Prospectus Supplement relating thereto. The Company anticipates that the following provisions will generally apply to depositary arrangements. Upon the issuance of a Global Security, the Depositary for such Global Security or its nominee will credit, on its book-entry registration and transfer system, the respective principal amounts of the individual Debt Securities represented by such Global Security to the accounts of persons that have accounts with such Depositary ("participants"). Such accounts will be designated by the underwriters or agents with respect to such Debt Securities or by the Company if such Debt Securities are offered and sold directly by the Company. Ownership of beneficial interests in a Global Security will be limited to participants of the applicable Depositary or persons that may hold interests through such 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 applicable Depositary or its nominee (with respect to interests of participants) and the records of participants (with respect to interests of persons other than participants). The laws of some states require that certain purchasers of securities take physical delivery of such securities in definitive form. Such limits and such laws may impair the ability to transfer beneficial interests in a Global Security. 13 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 and Holder of the Debt Securities represented by such Global Security for all purposes under the Indenture governing such Debt Securities. Except as provided below, owners of beneficial interests in a Global Security will not be entitled to have any of the individual Debt Securities represented by such Global Security registered in their names, will not receive or be entitled to receive physical delivery of any such Debt Securities in definitive form and will not be considered the owners or Holders thereof under the Indenture governing such Debt Securities. Accordingly, each person owning a beneficial interest in the Global Security must rely on the procedures of the Depositary and, if such person is not a participant, on the procedures of the participant through which such person owns its interest, to exercise any rights of a Holder under the Indenture. The Indenture provides that the Depositary may grant proxies and otherwise authorize participants to take any action which a Holder is entitled to take under the Indenture. The Company understands that under existing industry practice, in the event that the Company requests any action of Holders or a beneficial owner desires to take any action a Holder is entitled to take, the Depositary would authorize the participants to take such action and that the participants would authorize beneficial owners owning through such participants to take such action or would otherwise act upon the instructions of beneficial owners owning through them. Payments of principal of, premium, if any, and interest, if any, on individual Debt Securities represented by a Global Security registered in the name of a Depositary or its nominee will be made to the Depositary or its nominee, as the case may be, as the registered owner of the Global Security representing such Debt Securities. None of the Company, the Corporation, the Trustee for such Debt Securities, any Paying Agent, the Security Registrar for such Debt Securities or any agent for such persons will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of the Global Security for such Debt Securities or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. The Company and the Corporation expect that the Depositary for Debt Securities or its nominee, upon receipt of any payment of principal, premium or interest in respect of a Global Security representing any of such Debt Securities immediately will credit participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Global Security for such Debt Securities as shown on the records of such Depositary or its nominee. The Company and the Corporation also expect that payments by participants to owners of beneficial interests in such Global Security held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in "street name". Such payments will be the responsibility of such participants. If (i) the Depositary for any series of Offered Debt Securities is at any time unwilling, unable or ineligible to continue as depositary and a successor depositary is not appointed by the Company within 90 days or (ii) an Event of Default shall occur and be continuing with respect to such series, the Company will issue individual Debt Securities of such series in definitive form in exchange for the Global Security representing such Debt Securities. In addition, the Company may at any time and in its sole discretion, subject to any limitations described in the Prospectus Supplement relating to such Offered Debt Securities, determine not to have any Debt Securities of a series represented by one or more Global Securities and, in such event, will issue individual Debt Securities of such series in definitive form in exchange for the Global Security or Securities representing such series of Debt Securities. (Section 305) Further, if the Company so specifies with respect to the Debt Securities of a series, an owner of a beneficial interest in a Global Security representing Debt Securities of such series may, on terms acceptable to the Company, the applicable Trustee and the Depositary for such Global Security, receive Debt Securities of such series in definitive form in exchange for such beneficial interest, subject to any limitations described in the Prospectus Supplement relating to such Debt Securities. In any such instance, an owner of a beneficial interest in a Global Security will be entitled to physical delivery in definitive form of Debt Securities of the series represented by such Global Security equal in principal amount to such beneficial interest and to have such Debt Securities registered in its name. Debt Securities of such series so issued in definitive 14 form will be issued in denominations, unless otherwise specified by the Company, of $100,000 and any integral multiple of $1,000 in excess thereof, or, in the case of foreign currency notes, in the denominations indicated in the applicable Prospectus Supplement. PAYMENT AND PAYING AGENTS Unless otherwise indicated in the applicable Prospectus Supplement, payment of principal of, premium, if any, and interest, if any, on Offered Debt Securities will be made at the office of such Paying Agent or Paying Agents as the Company may designate from time to time, except that, at the option of the Company, payment of any interest may be made (i) by check mailed to the address of the person entitled thereto as such address shall appear in the applicable Security Register or (ii) by wire transfer to an account maintained by the person entitled thereto as specified in the applicable Security Register. (Section 1102) Unless otherwise indicated in an applicable Prospectus Supplement, payment of any instalment of interest on Debt Securities will be made to the person in whose name such Debt Security is registered at the close of business on the Regular Record Date for such payment. (Section 307) CONSOLIDATION, MERGER OR SALE OF ASSETS Each Indenture provides that each of the Company and the Corporation may, without the consent of the holders of any of the Debt Securities outstanding under the applicable Indenture, consolidate with, merge into or transfer its assets substantially as an entirety to any person, provided that (i) any such successor assumes the Company's or the Corporation's obligations on the applicable Debt Securities and under the applicable Indenture, (ii) after giving effect thereto, no Event of Default (as defined in the Senior Indenture) in the case of the Senior Securities, or Event of Default or Default (each as defined in the Subordinated Indenture) in the case of the Subordinated Securities, shall have happened and be continuing and (iii) certain other conditions under the applicable Indenture are met. (Sections 901 and 903) MODIFICATION AND WAIVER Modifications and amendments of each Indenture may be made by the Company, the Corporation and the applicable Trustee with the consent of the Holders of 66 2/3% in principal amount of the Outstanding Debt Securities of each series affected thereby; provided, however, that no such modification or amendment may, without the consent of the Holder of each Outstanding Debt Security affected thereby, (1) change the Stated Maturity of the principal of, or any instalment or principal of or interest on, any Debt Security; (2) reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof; (3) reduce the amount of the Principal of an Original Issue Discount Security that would be due and payable upon acceleration of the Maturity thereof; (4) change any Place of Payment where, or the coin or currency in which, the principal of any Debt Security or any premium, or interest thereon is payable; (5) impair the right to institute suit for the enforcement of any such payment on or with respect to a Debt Security; (6) in the case of Subordinated Securities, modify the provisions of the Subordinated Indenture with respect to the subordination of such Debt Securities and the Guarantees thereof in a manner adverse to the Holders thereof; (7) reduce the percentage in principal amount of the Outstanding Debt Securities of any series, the consent of whose Holders is required for any such modification or amendment or for waiver of certain defaults; (8) change certain provisions relating to modification of the terms of each Indenture and waiver of defaults thereunder; or (9) modify or affect in any manner adverse to the Holders the terms and conditions of the Guarantees. (Section 1002) Each Indenture provides that the Holders of 66 2/3% in principal amount of the Outstanding Debt Securities of any series may on behalf of the Holders of all Debt Securities of that series waive, insofar as that series is concerned, compliance by the Company or the Corporation with certain restrictive provisions of such Indenture. (Section 1108) Also, the Holders of a majority in principal amount of the Outstanding Debt Securities of any series may on behalf of the Holders of all Debt Securities of that series waive any past default under the Indenture with respect to that series, except a default (i) in the payment of the principal of, or premium, if any, or interest, if any, on any Debt Security of that series or (ii) in respect of a provision which under the Indenture 15 cannot be modified or amended without the consent of the Holder of each Outstanding Debt Security of that series affected. (Section 613) EVENTS OF DEFAULT If an Event of Default with respect to Debt Securities of any series at the time Outstanding shall occur and be continuing, then and in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Debt Securities of that series may declare to be due and payable immediately by a notice in writing to the Company and to the Corporation (and to the Trustee if given by Holders) the principal amount (or, if the Debt Securities of that series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of that series) of all Debt Securities of that series. However, at any time after such a declaration of acceleration with respect to Debt Securities of any series has been made, but before a judgment or decree based on such acceleration has been obtained, the Holders of a majority in principal amount of Outstanding Debt Securities of that series may, under certain circumstances, rescind and annul such acceleration if all Events of Default, and, in the case of Subordinated Securities, all Defaults, with respect to Debt Securities of that series have been cured or waived as provided in the applicable Indenture. (Section 602) For information as to waiver of defaults, see "Modification and Waiver". The term "Event of Default" is defined differently in the Senior Indenture than in the Subordinated Indenture. (Section 601) For information as to what constitutes Events of Default, see "Senior Securities--Events of Default" and "Subordinated Securities--Events of Default and Limited Rights of Acceleration". Reference is made to the Prospectus Supplement relating to each series of Debt Securities which are Original Issue Discount Securities for the particular provisions relating to acceleration of the Maturity of a portion of the principal amount of such Original Issue Discount Securities upon the occurrence of an Event of Default and the continuation thereof. Each Indenture provides that the Trustee thereunder will be under no obligation, subject to the duty of the Trustee during a default to act with the required standard of care, to exercise any of its rights or powers under such Indenture at the request or direction of any of the Holders, unless such Holders shall have offered to the Trustee reasonable indemnity. (Section 703) Subject to such provisions for indemnification of the Trustee, the Holders of a majority in principal amount of the Outstanding Debt Securities of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Debt Securities of that series. (Section 612) No Holder of any Debt Security of any series will have the right to institute any proceeding with respect to the applicable Indenture or for any remedy thereunder unless such Holder shall have previously given to the Trustee written notice of a continuing Event of Default or, in the case of Subordinated Securities, a Default, with respect to Debt Securities of that series and unless also the Holders of at least 25% in principal amount of the Outstanding Debt Securities of that series shall have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as Trustee, and the Trustee shall not have received from the Holders of a majority in principal amount of the Outstanding Debt Securities of that series a direction inconsistent with such request and shall have failed to institute such proceeding within 60 days. (Section 607) However, the Holders of any Debt Security will have an absolute right to receive payment of the principal of, and premium, if any, and interest, if any, on such Debt Security on or after the due dates expressed in such Debt Security and to institute suit for the enforcement of any such payment. (Section 608) The Company and the Corporation are required to file annually with each Trustee a written statement of officers as to performance or fulfillment of certain of their obligations under each Indenture and as to the existence or non-existence of defaults under each Indenture or the Debt Securities issued thereunder. (Sections 1105 and 1106) 16 SENIOR SECURITIES PRIORITY The Senior Securities will rank pari passu with all outstanding senior indebtedness of the Company. The Guarantees of the Senior Securities will rank pari passu with all outstanding senior indebtedness of the Corporation. LIMITATION UPON DISPOSITION OF VOTING STOCK AND CERTAIN TRANSACTIONS The Senior Indenture contains a covenant by the Corporation that, so long as any of the Senior Securities are outstanding, it will not sell, assign, transfer, grant a security interest in or otherwise dispose of any shares of, or securities convertible into, or options, warrants or rights to subscribe for or purchase shares of, Voting Stock of the Bank or the Company, nor will it permit the Bank or the Company to issue, except to the Corporation and except for directors' qualifying shares, any shares of, or securities convertible into, or options, warrants or rights to subscribe for or purchase shares of, Voting Stock of the Bank or the Company, unless, in the case of Voting Stock of the Bank (i) any such sale, assignment, transfer, grant of a security interest or other disposition by the Corporation, or any such issuance by the Bank, is made for fair market value, and (ii) the Corporation will own at least 80% of the issued and outstanding Voting Stock of the Bank free and clear of any security interest after giving effect to such transaction. The covenant also provides that so long as any of the Senior Securities are outstanding, but subject to the provisions of Article Nine (Consolidation, Merger and Sale), the Corporation will not permit the Bank or the Company (a) to merge or consolidate with another corporation or (b) to sell, assign, transfer, grant a security interest in or otherwise dispose of ("Transfer") or lease all or substantially all of the assets of the Bank or the Company unless, in the case of the Bank, (i) any such Transfer or lease by the Bank or any such merger or consolidation with the Bank is made for fair market value (provided, however, that satisfaction of this fair market value provision will not be required in the event the Transfer, lease, merger or consolidation is to or with a corporation at least 80% of the issued and outstanding Voting Stock of which is owned, directly or indirectly, by the Corporation), and (ii) after giving effect to such transaction, the Corporation will own, directly or indirectly, at least 80% of the issued and outstanding shares of Voting Stock of the Bank free and clear of any security interest. As used in this paragraph, the terms "the Bank" and "the Company" include any successor corporation. (Section 1107) Unless otherwise indicated in the applicable Pricing Supplement, neither the Senior Indenture nor the Senior Securities contains covenants specifically designed to protect Holders in the event of a highly leveraged transaction involving the Company, the Corporation or the Bank. EVENTS OF DEFAULT The following will be Events of Default under the Senior Indenture with respect to Senior Securities of any series: (1) failure to pay any interest on any Senior Security of that series when due, continued for 30 days; (2) failure to pay principal of, or premium, if any, on any Senior Security of that series when due; (3) failure to deposit any sinking fund payment, when due, in respect of any Senior Security of that series; (4) failure to perform or breach of any other covenant of the Company or the Corporation in the Senior Indenture (other than a covenant included in the Senior Indenture solely for the benefit of a series of Senior Securities other than that series), continued for 60 days after written notice; (5) certain events of bankruptcy, insolvency or reorganization of the Company, the Corporation or the Bank; and (6) any other Event of Default provided in the applicable Prospectus Supplement with respect to Senior Securities of that series. (Section 601) REGARDING CHASE The Corporation's bank subsidiaries maintain deposit accounts and conduct other banking transactions with Chase in the ordinary course of their banking businesses. Chase is the Agent Bank and a participant in the $300 million revolving credit facility created to provide back-up support for the Corporation's commercial paper borrowings. 17 SUBORDINATED SECURITIES SUBORDINATION The Subordinated Securities will be subordinate in right of payment to all Senior Indebtedness of the Company. The Guarantees of the Subordinated Securities will be subordinate in right of payment to all Senior Indebtedness of the Corporation. Upon any distribution of assets of the Company and/or the Corporation upon dissolution, winding up, liquidation or reorganization of the Company or the Corporation, as the case may be, the payment of the principal of, premium, if any, and interest, if any, on the Subordinated Securities, in the case of the Company, and on the Guarantees thereof, in the case of the Corporation, is to be subordinated in right of payment to the extent provided in the Subordinated Indenture to the prior payment in full of all Senior Indebtedness of the Company or the Corporation, as the case may be. In addition, no payment may be made of the principal of, premium, if any, and interest on the Subordinated Securities or the Guarantees thereof, or in respect of any redemption, retirement, purchase or other acquisition thereof, at any time when there is a default in the payment of the principal of, premium, if any, interest, if any, on or otherwise in respect of any Senior Indebtedness of the Company or the Corporation, as the case may be. (Section 1401, Section 1402) Except as described above, the obligation of the Company and the Corporation to make payment of the principal of, premium, if any, and interest, if any, on the Subordinated Securities or on the Guarantees thereof, as the case may be, will not be affected. By reason of such subordination, in the event of a distribution of assets upon any dissolution, winding up, liquidation or reorganization of the Company and/or the Corporation, Holders of Senior Indebtedness of the Company or the Corporation may recover more, ratably, than Holders of the Subordinated Securities. Subject to payment in full of all Senior Indebtedness of the Company, the rights of the Holders of Subordinated Securities will be subrogated to the rights of the Holders of Senior Indebtedness of the Company to receive payments or distribution of cash, property or securities of the Company applicable to Senior Indebtedness of the Company. Subject to payment in full of all Senior Indebtedness of the Corporation, the rights of Holders of Subordinated Securities under the Guarantees endorsed thereon will be subject to the rights of Holders of Senior Indebtedness of the Corporation to receive payments or distributions of cash, property or securities of the Corporation applicable to Senior Indebtedness of the Corporation. Senior Indebtedness of the Company is defined in the Subordinated Indenture as any obligation of the Company to its creditors, whether now outstanding or subsequently incurred, except (i) the 9 3/4% Subordinated Debentures Due 2001, the 9 1/4% Subordinated Debentures Due 2001 and the 6 7/8% Subordinated Debentures due March 1, 2003, each issued under the indenture, dated as of April 15, 1991, among the Guarantor, the Company and Continental Bank, National Association, as trustee, and all other notes and obligations that may be issued under such indenture, as the same may be amended from time to time, (ii) any obligation as to which in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is provided that such obligation is not Senior Indebtedness and (iii) obligations evidenced by the Subordinated Securities. Senior Indebtedness of the Guarantor is defined in the Subordinated Indenture as any obligation of the Guarantor to its creditors, whether now outstanding or subsequently incurred, except (i) the 7 1/4% Convertible Subordinated Capital Notes due 1999 issued under the indenture, dated as of September 10, 1987, between the Guarantor and Bank of New York, as trustee, (ii) guarantee of the Guarantor of the 9 3/4% Subordinated Debentures Due 2001, the 9 1/4% Subordinated Debentures Due 2001 and the 6 7/8% Subordinated Debentures due March 1, 2003, each issued under the indenture, dated as of April 15, 1991, among the Guarantor, the Company and Continental Bank, National Association, as trustee, and all guarantees of the Guarantor of any other notes and obligations which may be issued under such indenture, as the same may be amended from time to time; (iii) any obligation as to which, in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is provided that such obligation is not Senior Indebtedness; and (iv) obligations evidenced by the Guarantees of the Subordinated Securities. (Section 101) There is no limitation on the issuance of additional Senior Indebtedness of the Company or the Corporation. The Company and the Corporation expect from time to time to incur additional indebtedness constituting Senior Indebtedness. As of June 30, 1995, the aggregate principal amount of Senior Indebtedness of the Company 18 outstanding was approximately $950 million and the aggregate principal amount of the Senior Indebtedness of the Corporation (including all Senior Indebtedness of the Company is guaranteed by the Corporation) outstanding was approximately $950 million. LIMITATION UPON DISPOSITION OF VOTING STOCK AND CERTAIN TRANSACTIONS The Subordinated Indenture contains a covenant by the Corporation that, so long as any of the Subordinated Securities are outstanding, but subject to the provisions of Article Nine (Consolidation, Merger and Sale), the Corporation will not sell, assign, transfer, grant a security interest in or otherwise dispose of any shares of, securities convertible into or options, warrants or rights to subscribe for or purchase shares of, Voting Stock of the Company, nor will it permit the Company (or any successor thereto) (a) to issue, except to the Corporation, any shares of, securities convertible into or options, warrants or rights to subscribe for or purchase shares of, Voting Stock of the Company, (b) to merge or consolidate with another Person, other than the Corporation, or (c) to sell, assign, transfer, grant a security interest in or otherwise dispose of or lease all or substantially all of the assets of the Company. (Section 1107) Unless otherwise indicated in the applicable Pricing Supplement, neither the Subordinated Indenture nor the Subordinated Securities contains covenants specifically designed to protect Holders in the event of a highly leveraged transaction involving the Company, the Corporation or the Bank. EVENTS OF DEFAULT AND LIMITED RIGHTS OF ACCELERATION The Subordinated Indenture defines an Event of Default as being only certain events involving the bankruptcy, insolvency or reorganization of the Corporation or the Bank. (Section 601) The rights of First Interstate, as Trustee, and the Holders upon the occurrence of an Event of Default are described in "Description of Debt Securities and Guarantees--Events of Default". The Subordinated Indenture does not define an Event of Default as including, or provide for any right of acceleration of the payment of principal of the Subordinated Securities upon, a bankruptcy, insolvency or reorganization of the Company alone or a default in the payment of principal or interest or in the performance of any covenant or agreement in the Subordinated Securities or the Subordinated Indenture. Currently, neither the Company nor the Corporation are in default in the payment of principal, premium or interest on any outstanding subordinated indebtedness. The Subordinated Indenture defines a Default as being (1) the failure to pay interest on any Subordinated Securities when due, whether or not such payment is prohibited by the subordination provisions of the Subordinated Indenture, continued for 30 days, (2) the failure to pay principal on any Subordinated Securities when due, whether or not such payment is prohibited by the subordination provisions of the Subordinated Indenture, or (3) the failure to perform any other covenant of the Corporation, or a breach by the Corporation of a warranty in the Subordinated Indenture, continued for 60 days after written notice is given as provided in the Subordinated Indenture. If an Event of Default or a Default shall occur and be continuing, the Trustee may, subject to certain limitations and conditions, seek to enforce payment of such principal or accrued interest or the performance of such covenant or agreement through appropriate judicial proceedings against the Company or the Corporation. (Section 603) REGARDING FIRST INTERSTATE The Corporation's bank subsidiaries maintain deposit accounts and conduct other banking transactions with First Interstate in the ordinary course of their banking businesses. First Interstate is a participant in the $300 million revolving credit facility created to provide back-up support for the Corporation's commercial paper borrowings. CERTAIN TAX CONSIDERATIONS The Company will be required to withhold the Pennsylvania Corporate Loans Tax from interest payments on Debt Securities held by or for those subject to such tax, principally individuals and partnerships resident in Pennsylvania and resident trustees of Pennsylvania trusts. The tax, at the current rate of four mills on each dollar of nominal value ($4.00 per $1,000), will be withheld, at any time when it is applicable, from any interest payment to taxable holders at the annual rate of $4.00 per $1,000 principal amount of the Debt Securities. The Debt Securities will be exempt, under current law, from personal property taxes imposed by political subdivisions in Pennsylvania. 19 See the accompanying Prospectus Supplement for additional information concerning certain tax considerations relating to specific series of Offered Debt Securities. Holders of Debt Securities should consult their tax advisors as to the applicability to the Debt Securities and interest, if any, payable thereon of Federal, state and local taxes. PLAN OF DISTRIBUTION The Company may offer and sell Debt Securities to or through underwriters, acting as principals for their own accounts or as agents. The Company also may sell Debt Securities to purchasers directly or through agents. The Prospectus Supplement sets forth the terms of the offering of the Offered Debt Securities including the names of any underwriters, agents or dealers, the purchase price of the Offered Debt Securities and the proceeds to the Company from the sale, any underwriting discounts and other items constituting underwriters' compensation and any discounts and commissions allowed or reallowed or paid to dealers or agents. Any initial public offering price and any discounts or commissions allowed or reallowed or paid to dealers or agents may be changed from time to time. The distribution of the Debt Securities may be effected from time to time in one or more transactions 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. The Company also may offer and sell Debt Securities in exchange for one or more of its outstanding issues of debt or convertible debt securities. In connection with the sale of Debt Securities, underwriters may be deemed to have received compensation from the Company in the form of underwriting discounts or commissions and may also receive commissions from purchasers of Debt Securities for whom they may act as agent. Underwriters may sell Debt 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. Underwriters, dealers and agents participating in the distribution of Debt Securities may be deemed to be underwriters, and any discounts or commissions received by them and any profit realized by them on resale of the Debt Securities may be deemed to be underwriting discounts and commissions, under the Securities Act. Under agreements which may be entered into by the Company and the Corporation, underwriters, dealers and agents who participate in the distribution of Debt Securities may be entitled to indemnification by the Company and the Corporation against certain liabilities, including liabilities under the Securities Act, or to contribution in respect thereof. If so indicated in the Prospectus Supplement, the Company will authorize underwriters or other persons acting as the Company's agents to solicit offers by certain institutions to purchase Offered Debt Securities from the Company at the public offering price set forth in such Prospectus Supplement pursuant to delayed delivery contracts providing for payment and delivery on a future date. Each such contract will be for an amount not less than, and the aggregate principal amount of Debt Securities sold pursuant to such contracts shall be for an amount not less nor more than, the respective amounts stated in the Prospectus Supplement. Institutions with which such contracts may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and others, but in all cases such institutions must be approved by the Company. The obligations of any purchaser under any such contract will not be subject to any conditions except that (i) the purchase of the Offered Debt Securities shall not at the time of delivery be prohibited under the laws of the jurisdiction to which such purchaser is subject and (ii) if the Debt Securities are also being sold to underwriters, such underwriters shall have purchased the Debt Securities not sold for delayed delivery. The underwriters and such other persons will not have any responsibility in respect of the validity or performance of such contracts. Certain of the underwriters, dealers or agents may be customers of (including borrowers from), engage in transactions with, and perform services for, the Company, the Corporation, the Corporation's bank subsidiaries or one or more of their affiliates in the ordinary course of business. 20 VALIDITY OF DEBT SECURITIES AND GUARANTEES The validity of the Offered Debt Securities and related Guarantees will be passed upon for the Company and the Corporation by James M. Gockley, Esq., Assistant General Counsel and Secretary of the Corporation, One Mellon Bank Center, Pittsburgh, Pennsylvania 15258. Information set forth under "Certain Tax Considerations" has been passed upon by Michael K. Hughey, Esq., Senior Vice President and Director of Taxes of the Bank. As of June 30, 1995, Mr. Gockley owned approximately 1,780 shares of the Corporation's Common Stock and options covering an additional 10,050 shares of Common Stock. As of June 30, 1995, Mr. Hughey was the beneficial owner of 1,798 shares of Common Stock and options covering an additional 17,203 shares of Common Stock. Unless otherwise indicated in the Prospectus Supplement relating thereto, if the Debt Securities are being distributed in an underwritten offering, the validity of the Debt Securities and related Guarantees will be passed upon for the underwriters by Sullivan & Cromwell, 125 Broad Street, New York, New York 10004, who will rely upon the opinion of Mr. Gockley as to matters of Pennsylvania law. Sullivan & Cromwell from time to time performs legal services for the Corporation. EXPERTS The consolidated financial statements of the Corporation and its subsidiaries included in the Corporation's 1994 Annual Report to Shareholders, which is incorporated by reference into the Corporation's Annual Report on Form 10-K for the year ended December 31, 1994, have been incorporated herein by reference in reliance upon the report of KPMG Peat Marwick LLP, independent certified public accountants, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. The report of KPMG Peat Marwick LLP, covering the December 31, 1994, financial statements refers to a change in the method of accounting for certain investments in debt and equity securities pursuant to Statement of Financial Accounting Standards No. 115. 21 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following is an estimate of the expenses which will be incurred in connection with the issuance and distribution of the Debt Securities and Guarantees being registered, other than underwriting discounts and commissions: To be borne by Company: Registration Fee............................................ $ 517,242 Printing.................................................... 75,000* Rating Agency Fees.......................................... 500,000* Legal Fees and Expenses..................................... 100,000* Accounting Fees............................................. 120,000* Trustees' Fees.............................................. 20,000* Blue Sky Fees and Expenses.................................. 15,000* Miscellaneous............................................... 15,000* ---------- Total................................................... $1,362,242* ==========
-------- *Estimated. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Restated Articles of Incorporation, as amended, of the Corporation (the "Articles") provide that, except as prohibited by law, every director and officer of the Corporation shall be entitled as of right to be indemnified by the Corporation against expenses and any liability paid or incurred by such person in connection with any actual or threatened claim, action, suit or proceeding, civil, criminal, administrative, investigative or other, whether brought by or in the right of the Corporation or otherwise, in which such person may be involved (subject to certain limitations in the case of actions by such person against the Corporation) by reason of such person being or having been a director or officer of the Corporation or serving or having served at the request of the Corporation as a director, officer, employee, fiduciary or other representative of another entity. The Articles also give to indemnitees the right to have their expenses in defending such actions paid in advance by the Corporation, subject to any obligation imposed by law or otherwise to reimburse the Corporation in certain events. The Corporation has entered into an indemnity agreement (the "Indemnity Agreement") with each director and certain of its officers which provides a contractual right to indemnification against such expenses and liabilities (subject to certain limitations and exceptions) and a contractual right to advancement of expenses and contains additional provisions regarding determination of entitlement, defense of claims, rights of contribution and other matters. The Pennsylvania Business Corporation Law permits a corporation to indemnify its directors and officers, and to pay their expenses in advance, subject to certain limitations and exceptions. The specific indemnity provisions, which are by their terms not intended to be exclusive, are, in general, not as broad as the provisions of the Articles and the Indemnity Agreement; however, one provision would preclude indemnification in any case where the act or failure to act giving rise to the claim for indemnification is determined by a court to have constituted willful misconduct or recklessness, and another provision requires that advances of expenses may be made by a corporation only upon receipt of an undertaking to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation. II-1 The Corporation has purchased liability insurance policies covering its directors and officers to insure against claims arising out of certain alleged wrongful acts on the part of such directors and officers and against claims arising out of certain alleged breaches of fiduciary duty under the Employee Retirement Income Security Act of 1974 on the part of such directors and officers. Article Seventh of the Articles and Article Two of the Corporation's By- Laws, as amended, both adopted by the shareholders of the Corporation at their annual meeting on April 20, 1987, further provide that, to the fullest extent that the laws of Pennsylvania, as in effect on January 27, 1987 or as thereafter amended, permit elimination or limitation of the liability of directors, no director of the Corporation shall be personally liable for monetary damages as such for any action taken, or any failure to take any action, as a director. The Pennsylvania Business Corporation Law provides that whenever the by-laws of a corporation by a vote of the shareholders to provide, a director shall not be personally liable for monetary damages as such for any action taken, or failure to take any action, unless (i) the director has breached or failed to perform the duties of his office under the standard of care and justifiable reliance specified in the Act and (ii) the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness. These provisions do not apply to (i) responsibility or liability of a director pursuant to any criminal statute or (ii) the liability of a director for payment of taxes. ITEM 16. EXHIBITS The following exhibits are filed herewith or incorporated by reference herein as part of this Registration Statement:
NUMBER DESCRIPTION ------ ----------- 1.1 Form of Underwriting Agreement 4.1 Trust Indenture dated as of May 2, 1988 among the Company, the Corporation and The Chase Manhattan Bank (National Association), as Trustee 4.2 First Supplemental Indenture dated as of November 29, 1990 among the Company, the Corporation and The Chase Manhattan Bank (National Association), as Trustee 4.3 Form of Subordinated Trust Indenture dated as of August 25, 1995 among the Company, the Corporation and First Interstate Bank of California, as Trustee 5.1 Opinion of James M. Gockley, Esq., as to the validity of the Debt Securities and Guarantees being registered 8.1 Opinion of Michael K. Hughey, Esq., regarding tax matters 12.1 Computation of Ratio of Earnings to Fixed Charges (Parent Corporation) 12.2 Computation of Ratio of Earnings to Fixed Charges (Mellon Bank Corporation and Subsidiaries) 23.1 Consent of James M. Gockley, Esq. (included in Exhibit 5.1) 23.2 Consent of Michael K. Hughey, Esq. (included in Exhibit 8.1) 23.3 Consent of KPMG Peat Marwick LLP 24.1 Powers of Attorney 25.1 Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of The Chase Manhattan Bank (National Association) 25.2 Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of First Interstate Bank of California
ITEM 17. UNDERTAKINGS (a) Rule 415 Offering. The undersigned Corporation and the undersigned Company hereby undertake: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, unless the information required to be included in such post-effective amendment is contained in a periodic report filed II-2 by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 and incorporated herein by reference; (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, unless the information required to be included in such post-effective amendment is contained in a periodic report filed by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 and incorporated herein by reference; and (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. (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. (b) Filings Incorporating Subsequent Exchange Act Documents by Reference. The undersigned Corporation and the undersigned Company hereby undertake that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Corporation's Annual Report pursuant to Section 13(a) or 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. (c) Acceleration of Effectiveness. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Company and the Corporation pursuant to the provisions described in Item 15 above, or otherwise, the Company and the Corporation have 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 the Company or the Corporation of expenses incurred or paid by a director, officer or controlling person of the Company or the Corporation 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, the Company and the Corporation will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-3 SIGNATURES MELLON BANK CORPORATION PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, MELLON BANK CORPORATION CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF PITTSBURGH, COMMONWEALTH OF PENNSYLVANIA, ON THE 25TH DAY OF AUGUST, 1995. Mellon Bank Corporation By /s/Frank V. Cahouet ________________________________________ Frank V. Cahouet Chairman, President and Chief Executive Officer PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON THE 25TH DAY OF AUGUST, 1995. By /s/ Steven G. Elliott ________________________________________ Steven G. Elliott Principal Financial Officer and Principal Accounting Officer BURTON C. BORGELT, Director; CAROL R. BROWN, Director; FRANK V. CAHOUET, Director and Principal Executive Officer; J. W. CONNOLLY, Director; CHARLES A. CORRY, Director; C. FREDERICK FETTEROLF, Director; IRA J. GUMBERG, Director; PEMBERTON HUTCHINSON, Director; ROTAN E. LEE, Director; ANDREW W. MATHIESON, Director; EDWARD J. McANIFF, Director; ROBERT MEHRABIAN, Director; SEWARD PROSSER MELLON, Director; DAVID S. SHAPIRA, Director; W. KEITH SMITH, Director; HOWARD STEIN, Director; JOAB L. THOMAS, Director; WESLEY W. von SCHACK, Director; WILLIAM J. YOUNG, Director. By /s/ James M. Gockley ________________________________________ James M. Gockley Attorney-in-fact II-4 SIGNATURES MELLON FINANCIAL COMPANY PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, MELLON FINANCIAL COMPANY CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF PITTSBURGH, COMMONWEALTH OF PENNSYLVANIA, ON THE 25TH DAY OF AUGUST, 1995. Mellon Financial Company By /s/ Steven G. Elliott ________________________________________ Steven G. Elliott President and Chief Executive Officer PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON THE 25TH DAY OF AUGUST, 1995. By /s/ Michael K. Hughey ________________________________________ Michael K. Hughey Principal Accounting Officer and Principal Financial Officer STEVEN G. ELLIOTT, Director, and Principal Executive Officer; MICHAEL K. HUGHEY, Director; W. KEITH SMITH, Director. By /s/ James M. Gockley ________________________________________ James M. Gockley Attorney-in-fact II-5 EXHIBIT INDEX
NUMBER DESCRIPTION METHOD OF FILING ------ ----------- ---------------- 1.1 Form of Underwriting Agreement Filed herewith 4.1 Trust Indenture dated as of May 2, 1988 among the Previously filed as Company, the Corporation and The Chase Manhattan Exhibit 4.1 to Bank (National Association), as Trustee Registration Statement on Form S-3 (Registration No. 33-55226) and incorporated herein by reference. 4.2 First Supplemental Indenture dated as of November 29, Previously filed as 1990 among the Company, the Corporation and The Chase Exhibit 4.2 to Manhattan Bank (National Association), as Trustee Registration Statement on Form S-3 (Registration No. 33-55226) and incorporated herein by reference. 4.3 Form of Subordinated Trust Indenture dated as of August Filed herewith , 1995 among the Company, the Corporation and First Interstate Bank of California, as Trustee 5.1 Opinion of James M. Gockley, Esq., as to the validity Filed herewith of the Debt Securities and Guarantees being registered 8.1 Opinion of Michael K. Hughey, Esq., regarding tax Filed herewith matters 12.1 Computation of Ratio of Earnings to Fixed Charges Filed herewith (Parent Corporation) 12.2 Computation of Ratio of Earnings to Fixed Charges Filed herewith (Mellon Bank Corporation and Subsidiaries) 23.1 Consent of James M. Gockley, Esq. (included in Exhibit Filed herewith 5.1) 23.2 Consent of Michael K. Hughey, Esq. (included in Exhibit Filed herewith 8.1) 23.3 Consent of KPMG Peat Marwick LLP Filed herewith 24.1 Powers of Attorney Filed herewith 25.1 Form T-1 Statement of Eligibility and Qualification Previously filed as under the Trust Indenture Act of 1939 of The Chase Exhibit 26.1 to Manhattan Bank (National Association) Registration Statement in Form S-3 (Registration No. 33-55226) and incorporated herein by reference. 25.2 Form T-1 Statement of Eligibility and Qualification Filed herewith under the Trust Indenture Act of 1939 of First Interstate Bank of California
EX-1.1 2 UNDERWRITING AGREEMENT EX-1.1 UNDERWRITING AGREEMENT [Date] Mellon Financial Company and Mellon Bank Corporation One Mellon Bank Center Pittsburgh, Pennsylvania 15258 Dear Sirs: [Underwriters], as Underwriters (the "Underwriters"), understand that Mellon Financial Company, a Pennsylvania corporation (the "Company"), proposes to issue and sell $________ aggregate principal amount of [title of series] (the "Offered Securities"), which are to be unconditionally guaranteed (as described in the Prospectus Supplement and Prospectus referred to below) as to payments of principal, premium, if any, and interest, if any, by Mellon Bank Corporation, a Pennsylvania corporation registered as a bank holding cmopany under the Bank Holding Company Act (the "Guarantor"). Subject to the terms and conditions set forth herein or incorporated by reference herein, the Company hereby agrees to sell, the Guarantor agrees to guarantee, and the Underwriters agree to purchase, severally and not jointly, the principal amounts of such Offered Securities set forth opposite their names on Schedule A hereto at ____% of their principal amount, yielding total proceeds at closing of $________. The Underwriters will pay for such Offered Securities in immediately available funds upon delivery thereof at the offices of Sullivan & Cromwell, 125 Broad Street, New York, New York, 10004, at ____ _.m. (localtime) on [date], or at such other time, not later than [date], as shall be designated by the Underwriters. The Offered Securities shall have the terms set forth in the Company's and Guarantor's Prospectus Supplement, dated [date], and the Prospectus, dated [date], particularly as follows: Maturity: [date] Interest Rate: _____% per annum Redemption Provisions: _____________ Interest Payment Dates: __________ __ and __________ __, commencing _______________ __, _____ All the provisions contained in the documents entitled Mellon Financial Company Underwriting Agreement Standard Provisions (Debt), dated [date], a copy of which you have previously received, are herein incorporated by reference in their entirety and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein. Please confirm your agreement by having an authorized officer sign a copy of this Agreement in the appropriate space set forth below. This Agreement may be signed in any number of counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument. Very truly yours, [Underwriters] By: [Underwriter] By: ___________________________________ Name: Title: Accepted: [date] MELLON FINANCIAL COMPANY By: __________________________________ Name: Title: Accepted: [date] MELLON BANK CORPORATION By: __________________________________ Name: Title: -2- SCHEDULE A Principal Amount Underwriters of Notes ------------ ---------------- [Underwriter]............................................ $ [Underwriter]............................................ ---------- Total.......................................... $ -3- MELLON FINANCIAL COMPANY UNDERWRITING AGREEMENT STANDARD PROVISIONS (DEBT) [Date] From time to time Mellon Financial Company, a Pennsylvania corporation (the "Company"), and Mellon Bank Corporation, a Pennsylvania corporation registered as a bank holding company under the Bank Holding Company Act (the "Guarantor"), may enter into one or more underwriting agreements that provide for the sale of designated securities to the several underwriters named herein. The standard provisions set forth herein may be incorporated by reference in any such underwriting agreement (an "Underwriting Agreement"). The Underwriting Agreement, including the provisions incorporated therein by reference, is herein referred to as "this Agreement". Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined. I. The Company proposes to issue from time to time debt securities consisting of debentures, notes and/or other unsecured evidences of indebtedness (the "Securities") to be issued pursuant to the provisions of the Indenture, dated as of May 2, 1988, as supplemented by the First Supplemental Indenture, dated as of November 29, 1990, among the Company, the Guarantor and The Chase Manhattan Bank (National Association), as trustee and/or pursuant to the provisions of the Indenture, dated as of August 23, 1995, among the Company, the Guarantor and First Interstate Bank of California, as trustee, as the same may be from time to time amended or supplemented (the applicable indenture being referred to herein as the "Indenture" and the trustee thereunder being referred to herein as the "Trustee"). The Securities will have varying designations, maturities, rates and times of payment of interest, selling prices and redemption terms. The Securities will be guaranteed as to payment of principal, premium, if any, and interest, if any, by the Guarantor. The Company and the Guarantor have filed with the Securities and Exchange Commission (the "Commission") a registration statement, including a prospectus relating to the Securities and to the unconditional guarantee by the Guarantor of payment of principal, premium, if any, and interest, if any (the "Guarantees"), and have filed with, or mailed for filing to, the Commission a prospectus supplement specifically relating to the Offered Securities and related Guarantees (the "Offered Guarantees") pursuant to Rule 424 of the rules and regulations promulgated under the Securities Act of 1933 (the "Securities Act"). The term Registration Statement means the registration statement as amended to the date of the Underwriting Agreement. The term Basic Prospectus means the prospectus included in the Registration Statement. The term Prospectus means the Basic Prospectus together with the prospectus supplement specifically relating to the Offered Securities and Offered Guarantees as filed with, or mailed for filing to, the Commission pursuant to Rule 424. The term preliminary prospectus means a preliminary prospectus supplement specifically relating to the Offered Securities and Offered Guarantees together with the Basic Prospectus. As used herein, the terms "Registration Statement", "Basic Prospectus", "Prospectus" and "preliminary prospectus" shall include in each case the material, if any, incorporated by reference therein. The term Underwriters' Securities means the Offered Securities to be purchased by the Underwriters herein. The term Contract Securities means the Offered Securities, if any, to be purchased pursuant to the delayed delivery contracts referred to below. II. If the Prospectus provides for sales of Offered Securities pursuant to delayed delivery contracts, the Company hereby authorizes the Underwriters to solicit offers to purchase Contract Securities on the terms and subject to the conditions set forth in the Prospectus pursuant to delayed delivery contracts substantially in the form of Schedule I attached hereto ("Delayed Delivery Contracts") but with such changes therein as the Company may authorize or approve. Delayed Delivery Contracts are to be with institutional investors approved by the Company and of the types set forth in the Prospectus. On the Closing Date (as hereinafter defined), the Company will pay the Manager as compensation, for the accounts of the Underwriters, the fee set forth in the Underwriting Agreement in respect of the principal amount of Contract Securities. The Underwriters will not have any responsibility in respect of the validity or the performance of Delayed Delivery Contracts. If the Company executes and delivers Delayed Delivery Contracts with institutional investors, the Contract Securities shall be deducted from the Offered Securities to be purchased by the several Underwriters, and the aggregate principal amount of Offered Securities to be purchased by each Underwriter shall be reduced pro rata in proportion to the principal amount of Offered Securities set forth opposite each Underwriter's name in the Underwriting Agreement, except to the extent that the Manager determines that such reduction shall be otherwise and so advises the Company. -2- III. The Company is advised by the Manager that the Underwriters propose to make a public offering of their respective portions of the Underwriters' Securities as soon after this Agreement is entered into as in the Manager's judgment is advisable. The Underwriters will offer the Underwriters' Securities for sale upon the terms and conditions set forth in the Prospectus. IV. Payment for the Underwriters' Securities shall be made by certified or official bank check or checks drawn on a bank approved by the Company and payable to the order of the Company in New York Clearing House funds at the time and place set forth in the Underwriting Agreement, upon delivery to the Manager for the respective accounts of the several Underwriters of the Underwriters' Securities registered in such names and in such denominations as the Manager shall request in writing not less than two full business days prior to the date of delivery. The time and date of such payment and delivery with respect to the Underwriters' Securities are herein referred to as the Closing Date. The Offered Securities will be made available for checking and packaging at least twenty-four hours prior to the time for delivery. V. The several obligations of the Underwriters hereunder are subject to the following conditions: (a) No stop order suspending the effectiveness of the Registration Statement shall be in effect, and no proceedings for such purpose shall be pending before or threatened by the Commission, and the Manager shall have received on the Closing Date a certificate, dated the Closing Date and signed by an executive officer of the Company, to the foregoing effect. The officer making such certificate may rely upon the best of his knowledge as to proceedings pending or threatened. (b) The Manager shall have received on the Closing Date an opinion of the General Counsel or Assistant General Counsel of the Guarantor and counsel to the Company, dated the Closing Date, to the effect set forth in Exhibit A. (c) The Manager shall have received on the Closing Date an opinion of Sullivan & Cromwell, as counsel to the Underwriters, dated the Closing Date, with respect to the incorporation of the Company and the Guarantor, the validity of the Indenture, the Offered Securities and the Offered -3- Guarantees, the Registration Statement, the Prospectus and other related matters as the Manager may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters. (d) The Manager shall have received on the Closing Date letters, dated the Closing Date and in form and substance satisfactory to the Manager, from KPMG Peat Marwick LLP, independent public accountants to the Guarantor, to the effect set forth in Exhibit B. (e) Since the respective dates as of which information is given in the Prospectus, there shall not have been any material and adverse change, or any development involving a prospective material and adverse change, in the creditworthiness of the Company or the Guarantor, otherwise than as set forth or contemplated in the Prospectus, the effect of which is in the reasonable judgment of the Manager so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Offered Securities on the terms and in the manner contemplated in the Prospectus. (f) On or after the date of this Agreement (i) no downgrading shall have occurred in the rating accorded the debt securities of or guaranteed by the Guarantor or the preferred stock of the Guarantor by any "nationally recognized statistical rating organization," as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any debt securities of or guaranteed by the Guarantor or preferred stock of the Guarantor. (g) On or after the date of this Agreement there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange; (ii) a general moratorium on commercial banking activities in New York declared by either Federal or New York State authorities; or (iii) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war, if the effect of any such events specified in this clause (iii) in the judgment of the Underwriters makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Securities being delivered on the Closing Date on the terms and in the manner contemplated by the Prospectus. -4- VI. In further consideration of the agreements of the Underwriters contained in this Agreement, the Company and the Guarantor hereby covenant: (a) to furnish the Manager without charge a signed copy of the Registration Statement, including exhibits and materials, if any, incorporated by reference therein, and during the period mentioned in paragraph (c) below, as many copies of the Prospectus, any documents incorporated by reference therein and any supplements and amendments thereto as the Manager may reasonably request. (The terms "supplement" and "amendment" or "amend" as used in this Agreement shall include all documents filed by the Company with the Commission pursuant to the Securities Exchange Act of 1934 (the "Exchange Act") subsequent to the date of the Basic Prospectus that are deemed to be incorporated by reference in the Prospectus); (b) before amending or supplementing the Registration Statement or the Prospectus with respect to the Offered Securities and the Offered Guarantees, to furnish the Manager a copy of each such proposed amendment or supplement; (c) if, during such period after the date of the first public offering of the Offered Securities as in the opinion of counsel for the Underwriters the Prospectus is required by law to be delivered, any event shall occur as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if it is necessary to amend or supplement the Prospectus to comply with law, forthwith to prepare and furnish at its own expense to the Underwriters, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in light of the circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus will comply with law; (d) to endeavor to qualify the Offered Securities and the Offered Guarantees for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Manager shall reasonably request, provided that, in connection therewith, neither the Company nor the Guarantor shall be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction, and to pay all expenses (including fees and disbursements of counsel) in connection with the -5- determination of the eligibility of the Offered Securities and the Offered Guarantees for investment under the laws of such jurisdictions as the Manager may designate; (e) to make generally available to the Guarantor's security holders as soon as practicable an earnings statement covering a twelve-month period beginning after the date of the Underwriting Agreement, which shall satisfy the provision of Section 11(a) of the Securities Act; and (f) during the period beginning on the date of the Underwriting Agreement and continuing to and including the Closing Date, not to offer, sell, contract to sell or otherwise dispose of any debt securities issued or guaranteed by the Guarantor that in the reasonable judgment of the Manager are substantially similar to the Offered Securities, without the prior written consent of the Manager. VII. Each of the Company and the Guarantor represents and warrants to each Underwriter that (i) each document, if any, filed or to be filed pursuant to the Exchange Act and incorporated by reference in the Prospectus complied or will comply when so filed in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder, (ii) each part of the registration statement (including the documents incorporated by reference therein) filed with the Commission pursuant to the Securities Act relating to the Securities and the Guarantees, when such part became effective, did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, (iii) each preliminary prospectus, if any, filed pursuant to Rule 424 under the Securities Act complied when so filed in all material respects with the requirements of the Securities Act and the applicable rules and regulations thereunder, (iv) the Registration Statement and the Prospectus comply and, as amended or supplemented, if applicable, will comply in all material respects with the requirements of the Securities Act and the applicable rules and regulations thereunder and (v) the Registration Statement and the Prospectus do not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; except that these representations and warranties do not apply to statements or omissions in the Registration Statement, any preliminary Prospectus or the Prospectus based -6- upon information furnished to the Company in writing by any Underwriter expressly for use therein. The Company and the Guarantor jointly and severally agree to indemnify and hold harmless each Underwriter and each person, if any, who controls such Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any preliminary prospectus or the Prospectus (if used within the period set forth in paragraph (c) of Article VI hereof and as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements in the Registration Statement not misleading, or the statements in any preliminary prospectus, the Prospectus or any document incorporated by reference in the Registration Statement, in light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information furnished in writing to the Company or the Guarantor by any Underwriter expressly for use therein. Each Underwriter agrees to indemnify and hold harmless the Company and the Guarantor, the directors of either, the officers of either who sign the Registration Statement and any person controlling the Company or the Guarantor to the same extent as the foregoing indemnity from the Company and the Guarantor to each Underwriter, but only with respect to information relating to such Underwriter furnished in writing by such Underwriter expressly for use in the Registration Statement, any preliminary prospectus or the Prospectus. In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to either of the two preceding paragraphs, such person (the "indemnified party") shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing, and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the -7- indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm for all such indemnified parties. Such firm shall be designated in writing by the Manager in the case of parties indemnified pursuant to the second preceding paragraph and by the Company in the case of parties indemnified pursuant to the first preceding paragraph. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent but, if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. If the indemnification provided for in this Article VII is unavailable to an indemnified party under the second or third paragraphs hereof or insufficient in respect of any losses, claims, damages, or liabilities referred to therein, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantor on the one hand and the Underwriters on the other from the offering of the Offered Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Guarantor on the one hand and of the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received (by the Company and the Guarantor on the one hand and the Underwriters on the other) in connection with the offering of the Offered Securities shall be deemed to be in the same proportion as the total net proceeds from the offering of such Offered Securities received by the Company (before deducting expenses) bear to the total underwriting discounts and commissions received by the Underwriters in respect thereof. The relative fault of the Company and the Guarantor on the one hand and of the Underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and -8- the Guarantor or by the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statements or omission. The Company, the Guarantor and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Article VII were determined by pro rata allocation or by any other method of allocation which does not take account of the considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Article VII, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Offered Securities and Offered Guarantees underwritten and distributed to the public by such Underwriter exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute pursuant to this Article VII are several, in proportion to the respective principal amounts of Offered Securities purchased by each of such Underwriters, and not joint. VIII. The indemnity and contribution agreements contained in Article VII hereof and the representations and warranties of the Company and the Guarantor in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by any Underwriter or on behalf of any Underwriter or any person controlling any Underwriter or by or on behalf of the Company, the Guarantor or the directors or officers or any person controlling the Company or the Guarantor and (iii) acceptance of any payment for any of the Offered Securities. IX. If any Underwriter shall default in its obligation to purchase the Offered Securities which it has agreed to purchase hereunder, the Underwriters may in their discretion arrange for themselves or another party or other parties to purchase such Offered Securities on the terms contained herein. If within -9- thirty-six hours after such default by any Underwriter the Underwriters do not arrange for the purchase of such Offered Securities, then the Company and the Guarantor shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to the Underwriters to purchase such Offered Securities on such terms. In the event that, within the respective prescribed periods, the Underwriters notify the Company and the Guarantor that they have so arranged for the purchase of such Offered Securities, or the Company and the Guarantor notify the Underwriters that they have so arranged for the purchase of such Offered Securities, the Underwriters or the Company and the Guarantor shall have the right to postpone the Closing Date for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus, or in any other documents or arrangements, and the Company and the Guarantor agree to file promptly any amendments or supplements to the Registration Statement or the Prospectus which in the reasonable opinion of the Manager may thereby be made necessary. The term "Underwriters" as used in this Agreement shall include any person substituted under this Section IX with like effect as if such person has originally been a party to this Agreement with respect to such Offered Securities. If, after giving effect to any arrangements for the purchase of the Offered Securities of a defaulting Underwriter or Underwriters as provided in the immediately preceding paragraph hereof, the aggregate principal amount of such Offered Securities which remains unpurchased does not exceed one-eleventh of the aggregate principal amount of all the Offered Securities, then the Guarantor and the Company shall have the right to require each non-defaulting Underwriter to purchase the principal amount of Offered Securities which such Underwriter agreed to purchase hereunder and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the principal amount of Offered Securities which such Underwriter agreed to purchase hereunder) of the Offered Securities of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default. If, after giving effect to any arrangements for the purchase of the Offered Securities of a defaulting Underwriter or Underwriters as provided in the first paragraph of this Section IX, the aggregate principal amount of Offered Securities which remains unpurchased exceeds one-eleventh of the aggregate principal amount of all the Offered Securities or if the Guarantor and the Company shall not exercise the right described in the immediately preceding paragraph to require non-defaulting Underwriters to purchase Offered Securities of a defaulting Underwriter or Underwriters, then this Agreement shall thereupon -10- terminate, without liability on the part of any non-defaulting Underwriters or the Company or the Guarantor, except for the expenses to be borne by the Company, the Guarantor and the Underwriters as provided in Section X hereof and the indemnity and contribution agreements in Section VII hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default. X. Each of the Guarantor and the Company covenants and agrees with the several Underwriters that the Company and the Guarantor will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Guarantor's and the Company's counsel and accountants in connection with the registration of the Offered Securities and the Offered Guarantees under the Securities Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and to dealers; (ii) the cost of printing this Agreement, the Indenture and any Blue Sky and legal investment memoranda; (iii) all expenses in connection with the qualification of the Offered Securities and the Offered Guarantees for offering and sale under state securities laws as provided in Section VI(d) hereof, including the fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky and legal investment surveys; (iv) any fees charged by securities rating services for rating the Offered Securities; (v) the cost of preparing the Offered Securities; (vi) the fees and expenses of the Trustee and any agent of the Trustee and the fees and disbursements of counsel for the Trustee in connection with the Indenture, the Offered Securities and the Offered Guarantees; and (vii) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section X. It is understood, however, that, except as provided in this Section X and Sections VII and XI hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel, transfer taxes on resale of any of the Offered Securities by them and any advertising expenses connected with any offers they may make. XI. If this Agreement shall be terminated by the Underwriters, or any of them, because of any failure or refusal on the part of the Company or the Guarantor to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company or the Guarantor shall be unable to perform its obligations under this Agreement, the Company and the -11- Guarantor will reimburse the Underwriters, or such Underwriters as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred by such Underwriters in connection with the Offered Securities. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. -12- Schedule I DELAYED DELIVERY CONTRACT , 199 Dear Sirs: The undersigned hereby agrees to purchase from Mellon Financial Company, a Pennsylvania corporation (the "Company"), and the Company agrees to sell to the undersigned $....................... principal amount of the Company's [state title of issue], which are guaranteed as to payment of principal, premium, if any, and interest, if any, by Mellon Bank Corporation (the "Securities"), offered by the Prospectus dated , 199 and Prospectus Supplement dated , 199 , receipt of copies of which are hereby acknowledged, at a purchase price of % of the principal amount thereof plus accrued interest and on the further terms and conditions set forth in this contract. The undersigned does not contemplate selling Securities prior to making payment therefor. The undersigned will purchase from the Company Securities in the principal amounts and on the delivery dates set forth below:
Delivery Principal Plus Accrued Date Amount Interest From: -------- --------- -------------- .......................... $........ ............... .......................... $........ ............... .......................... $........ ...............
Each such date on which Securities are to be purchased hereunder is hereinafter referred to as a "Delivery Date." Payment for the Securities which the undersigned has agreed to purchase on each Delivery Date shall be made to the Company or its order by certified or official bank check drawn on a bank approved by the Company and in New York Clearing House funds at the office of , New York, N.Y., at 10:00 A.M. (New York time) on the Delivery Date, upon delivery to the undersigned of the Securities to be purchased by the undersigned on the Delivery Date, in such denominations and registered in such names as the undersigned may designate by written or telegraphic communication addressed to the Company not less than five full business days prior to the Delivery Date. The obligation of the undersigned to take delivery of and make payment for the Securities on the Delivery Date shall be subject to the conditions that (1) the purchase of Securities to be made by the undersigned shall not at the time of delivery be prohibited under the laws of the jurisdiction to which the undersigned is subject and (2) the Company shall have sold, and delivery shall have taken place to the underwriters (the "Underwriters") named in the Prospectus Supplement referred to above, of such part of the Securities as is to be sold to them. Promptly after completion of sale and delivery to the Underwriters, the Company will mail or deliver to the undersigned at its address set forth below notice to such effect, accompanied by a copy of the opinion of counsel for the Company delivered to the Underwriters in connection therewith. Failure to take delivery of and make payment for Securities by any purchaser under any other Delayed Delivery Contract shall not relieve the undersigned of its obligations under this contract. This contract will inure to the benefit of and be binding upon the parties hereto and their respective successors, but will not be assignable by either party hereto without the written consent of the other. If this contract is acceptable to the Company, it is requested that the Company sign the form of acceptance below and mail or deliver one of the counterparts hereof to the undersigned at its address set forth below. This will become a binding contract, as of the date first above written, between the Company and the undersigned when such counterpart is so mailed or delivered. This contract shall be governed by and construed in accordance with the laws of the State of New York. -2- Very truly yours, ......................... (Purchaser) By....................... ......................... (Title) ......................... ......................... (Address) Accepted: MELLON FINANCIAL COMPANY By......................... PURCHASER--PLEASE COMPLETE AT TIME OF SIGNING The name, telephone number and department of the representative of the Purchaser with whom details of delivery on the Delivery Date may be discussed is as follows: (Please print.)
Telephone No. Name (Including Area Code) Department ---- --------------------- ---------- ..................................... ..................... .............. ..................................... ..................... .............. ..................................... ..................... .............. ..................................... ..................... .............. ..................................... ..................... .............. ..................................... ..................... ..............
-3- Exhibit A Opinion of the Counsel of the Guarantor And Counsel to the Company --------------------------------------- The opinion of the General Counsel or Assistant General Counsel of the Guarantor and counsel to the Company to be delivered pursuant to Article V, paragraph (b) of the document entitled Mellon Financial Company Underwriting Agreement Standard Provisions (Debt) shall be to the following effect (all terms used herein which are defined in the Agreement have the meanings set forth therein): (i) Each of the Guarantor and the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the Commonwealth of Pennsylvania, and each has the corporate power and authority to own its properties and conduct its business as described in the Prospectus; and each of the Guarantor's principal wholly owned banking subsidiaries, as described in the prospectus, has been duly established and is validly existing as a national banking association or a state bank, as the case may be, under the laws of the jurisdiction of its formation. (ii) The Guarantor has an authorized equity capitalization as set forth in the Prospectus and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and are owned by the Guarantor, free and clear of all liens, encumbrances, equities or claims. (iii) The Guarantor has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, or is subject to no material liability or disability by reason of failure to be so qualified in any such jurisdiction. (iv) All of the issued and outstanding capital stock of each subsidiary of the Guarantor has been duly authorized and validly issued, is fully paid and non-assessable (except, in the case of each of its national bank subsidiaries, as provided in 12 U.S.C. Section 55, as amended), and, except for directors' qualifying shares, is owned by the Guarantor, free and clear of any mortgage, pledge, lien, encumbrance, claim or equity. (v) To the best of such counsel's knowledge there are no legal or governmental proceedings pending to which the Company, the Guarantor or any of its subsidiaries is a party or of which any property of the Company, the Guarantor or any of its subsidiaries is the subject, other than as set forth in the Prospectus, which, taking into account the likelihood of the outcome, the damages or other relief sought and other relevant factors, would individually or in the aggregate have a material adverse effect on the financial position, shareholders' equity or results of operation of the Company or the Guarantor and its subsidiaries on a consolidated basis; and to the best of such counsel's knowledge no such proceedings are threatened or contemplated by governmental authorities or threatened by others. (vi) This Agreement has been duly authorized, executed and delivered by the Company and by the Guarantor. (vii) The Offered Securities have been duly authorized, executed, authenticated, issued and delivered and constitute valid and legally binding obligations of the Company entitled to the benefits provided by the Indenture; and the Offered Securities, the Offered Guarantees and the Indenture conform to the descriptions thereof in the Prospectus. (viii) The Offered Guarantees have been duly authorized, endorsed on the Offered Securities and executed, and, upon due execution, authentication and delivery of the Offered Securities pursuant to this Agreement, the Offered Guarantees will have been duly delivered and will constitute valid and legally binding obligations of the Guarantor entitled to the benefits provided by the Indenture. -2- (ix) The Indenture has been duly authorized, executed and delivered by the Guarantor and the Company and constitutes a valid and legally binding instrument, enforceable against the Company and the Guarantor in accordance with its terms, subject, as to enforcement, to bankruptcy, moratorium, insolvency, fraudulent transfer, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; the Indenture has been duly qualified under the Trust Indenture Act of 1939 (the "Trust Indenture Act"), and all taxes and fees required to be paid with respect to the execution of the Indenture and the issuance of the Offered Securities and the Offered Guarantees have been paid. (x) The issue and sale of the Offered Securities and the compliance by the Company and the Guarantor with all of the provisions of the Offered Securities, the Offered Guarantees, the Indenture and this Agreement and the consummation of the transactions herein contemplated will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Company, the Guarantor or any of its subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument known to such counsel to which the Company, the Guarantor or any of its subsidiaries is a party or by which the Company, the Guarantor or any of its subsidiaries is bound or to which any of the property or assets of the Company, the Guarantor or any of its subsidiaries is subject, nor will such action result in any violation of the provisions of the Articles of Incorporation, as amended, or the By-Laws of the Company or of the Guarantor, or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company, the Guarantor or any of its subsidiaries or any of their properties; and no consent, approval, authorization, order, registration or qualification of or with any court or any such regulatory authority or other governmental body is required for the issue and sale of the Offered Securities, the execution and delivery of the Offered Guarantees or the consummation of -3- the other transactions contemplated by this Agreement, the Offered Guarantees or the Indenture, except such as have been obtained under the Securities Act of 1933 (the "Securities Act") and the Trust Indenture Act and the exemption of the Company from the provisions of the Investment Company Act of 1940, as amended, and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the sale and distribution of the Offered Securities and the Offered Guarantees. (xi) The documents incorporated by reference in the Prospectus (other than the financial statements and related schedules therein, as to which such counsel need express no opinion), when they were filed with the Commission, complied as to form in all material respects with the requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and the rules and regulations of the Commission thereunder; and such counsel has no reason to believe that any of such documents, when they were so filed, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such documents were so filed, not misleading, in each case after excluding any statement in any such document which does not constitute part of the Registration Statement or the Prospectus pursuant to Rule 412 of Regulation C under the Securities Act. (xii) The Registration Statement and the Prospectus and any further amendments and supplements thereto made by the Company or the Guarantor prior to the Closing Date (other than the financial statements and related schedules therein, as to which such counsel need express no opinion) comply as to form in all material respects with the requirements of the Securities Act and the Trust Indenture Act and the rules and regulations thereunder; such counsel has no reason to believe that either the Registration Statement, as of its effective date and as of the Closing Date, or the Prospectus or any further amendment or supplement thereto made by the Company or the Guarantor prior to the Closing Date, as of the date of the most recent -4- amendment or supplement thereto and as of the Closing Date, contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and such counsel does not know of any contracts or other documents of a character required to be filed as exhibits to the Registration Statement or required to be incorporated by reference into the Prospectus or required to be described in the Registration Statement or the Prospectus which are not filed or incorporated by reference or described as required. (xiii) The Company is exempt from the registration and other provisions of the Investment Company Act of 1940, as amended. In rendering such opinion, such counsel may rely as to matters of fact upon certificates of officers of the Guarantor and its subsidiaries, provided that such counsel shall state that he believes he is justified in relying upon such certificates. -5- EXHIBIT B Pursuant to Article V, paragraph (d) of the Mellon Financial Company Underwriting Agreement Standard Provisions (Debt) (the "Standard Provisions"), KPMG Peat Marwick LLP shall furnish letters to the Underwriters to the effect that: (i) They are independent certified public accountants with respect to the Guarantor and its subsidiaries within the meaning of the Act and the applicable published rules and regulations thereunder; (ii) In their opinion, the financial statements and any supplementary financial information and schedules audited by them and included or incorporated by reference in the Registration Statement or the Prospectus comply as to form in all material respects with the applicable accounting requirements of the Act or the Exchange Act, as applicable, and the published rules and regulations thereunder; and, if applicable, they have made a review in accordance with standards established by the American Institute of Certified Public Accountants of the consolidated interim financial statements, selected financial data and/or condensed financial statements derived from audited financial statements of the Guarantor for the periods specified in such letter, as indicated in their reports thereon, copies of which have been furnished to the representatives of the Underwriters (the "Representatives"); (iii) The unaudited selected financial information with respect to the consolidated results of operations and financial position of the Guarantor for the five most recent fiscal years included in the Prospectus and included or incorporated by reference in Item 6 of the Guarantor's Annual Report on Form 10-K for the most recent fiscal year agrees with the corresponding amounts (after restatement where applicable) in the audited consolidated financial statements for such fiscal years which were included or incorporated by reference in the Guarantor's Annual Reports on Form 10-K for such five fiscal years; (iv) On the basis of limited procedures, not constituting an audit in accordance with generally accepted auditing standards, consisting of a reading of the unaudited financial statements and other information referred to below, a reading of the latest available interim financial statements of the Guarantor and its subsidiaries, inspection of the minute books of the Guarantor and its subsidiaries since the date of the latest audited financial statements included or incorporated by reference in the Prospectus, inquiries of officials of the Guarantor and its subsidiaries responsible for financial and accounting matters and such other inquiries and procedures as may be specified in such letter, nothing came to their attention that caused them to believe that: (A) the unaudited condensed consolidated statements of income, consolidated balance sheets and consolidated statements of changes in financial position included or incorporated by reference in the Guarantor's Quarterly Reports on Form 10-Q incorporated by reference in the Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the Exchange Act as it applies to Form 10-Q and the related published rules and regulations thereunder or are not in conformity with generally accepted accounting principles applied on a basis substantially consistent with the basis for the audited consolidated statements of income, consolidated balance sheets and consolidated statements of changes in financial position included or incorporated by reference in the Guarantor's Annual Report on Form 10-K for the most recent fiscal year; (B) any other unaudited income statement data and balance sheet items included in the Prospectus do not agree with the corresponding items in the unaudited consolidated financial statements from which such data and items were derived, and any such unaudited data and items were not determined on a basis substantially consistent with the basis for the corresponding amounts in the audited consolidated financial statements included or incorporated by reference in the Guarantor's Annual Report on Form 10-K for the most recent fiscal year; -2- (C) the unaudited financial statements which were not included in the Prospectus but from which were derived the unaudited condensed financial statements referred to in Clause (A) and any unaudited income statement data and balance sheet items included in the Prospectus and referred to in Clause (B) were not determined on a basis substantially consistent with the basis for the audited financial statements included or incorporated by reference in the Guarantor's Annual Report on Form 10-K for the most recent fiscal year; (D) any unaudited pro forma consolidated condensed financial statements included or incorporated by reference in the Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the Act and the published rules and regulations thereunder or the pro forma adjustments have not been properly applied to the historical amounts in the compilation of those statements; (E) as of a specified date not more than five days prior to the date of delivery of such letter, there have been any changes in the consolidated capital stock (other than issuances of capital stock pursuant to employee stock plans, upon earn-outs of performance shares and upon conversions of convertible securities, in each case which were outstanding on the date of the latest balance sheet included or incorporated by reference in the Prospectus) or any increase in the consolidated long-term debt of the Guarantor and its subsidiaries, or any decreases in the consolidated amount of shareholders' equity or reserve for credit losses or other items specified by the Representatives, or any increases in any items specified by the Representatives, in each case as compared with amounts shown in the latest balance sheet included or incorporated by reference in the Prospectus, except in each case for changes, increases or decreases which the Prospectus discloses have occurred or may occur or which are described in such letter; and - 3 - (E) for the period from the date of the latest complete financial statements included or incorporated by reference in the Prospectus to the specified date referred to in Clause (E) there were any decreases in consolidated net interest revenue, net interest revenue after the provision for credit losses, net income applicable to common stock or net income per common share or other items specified by the Representatives, or any increases in any items specified by the Representatives, in each case as compared with the comparable period of the preceding year and with any other period of corresponding length specified by the Representatives, except in each case for increases or decreases which the Prospectus discloses have occurred or may occur or which are described in such letter; and (v) In addition to the audit referred to in their report(s) included or incorporated by reference in the Prospectus and the limited procedures, inspection of minute books, inquiries and other procedures referred to in subparagraphs (iii) and (iv) above, they have carried out certain specified procedures, not constituting an audit in accordance with generally accepted auditing standards, with respect to certain amounts, percentages and financial information specified by the Representatives which are derived from the general accounting records of the Guarantor and its subsidiaries, which appear in the Prospectus (excluding documents incorporated by reference) or in Part II of, or in exhibits and schedules to, the Registration Statement specified by the Representatives or in documents incorporated by reference in the Prospectus specified by the Representatives, and have compared certain such amounts, percentages and financial information with the accounting records of the Guarantor and its subsidiaries and have found them to be in agreement. All references in this Exhibit B to the Prospectus shall be deemed to refer to the Prospectus (including the documents incorporated by reference therein), as defined in the Standard Provisions as of the date of the letter delivered on the date of the Underwriting Agreement for purposes of such letter and to the Prospectus as amended or supplemented (including the -4- documents incorporated by reference therein) in relation to the applicable Offered Securities and Offered Guarantees for purposes of the letter delivered at the Time of Delivery for such Offered Securities and Offered Guarantees. -5- EX-4.3 3 INDENTURE EDGAR VERSION ONLY -- EXHIBIT 4.3 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- MELLON FINANCIAL COMPANY, ISSUER AND MELLON BANK CORPORATION, GUARANTOR TO FIRST INTERSTATE BANK OF CALIFORNIA, TRUSTEE ---------------- INDENTURE DATED AS OF AUGUST 25, 1995 ---------------- PROVIDING FOR ISSUANCE OF SUBORDINATED DEBT SECURITIES IN SERIES FROM TIME TO TIME -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Mellon Financial Company and Mellon Bank Corporation Certain Sections of this Indenture relating to Sections 310 through 318, in- clusive, of the Trust Indenture Act of 1939:
TRUST INDENTURE INDENTURE ACT SECTION SECTION (S)310(a)(1)..................................................... 709 (a)(2)..................................................... 709 (a)(3)..................................................... Not Applicable (a)(4)..................................................... Not Applicable (b)........................................................ 708 710 (S)311(a)........................................................ 713 (b)........................................................ 713 (b)(2)..................................................... 803(a) 803(b) (S)312(a)........................................................ 801 802(a) (b)........................................................ 802(b) (c)........................................................ 802(c) (S)313(a)........................................................ 803(a) (b)........................................................ 803(a) (c)........................................................ 803(a) (d)........................................................ 803(b) (S)314(a)........................................................ 804 (a)(4)..................................................... 101 1104 (b)........................................................ Not Applicable (c)(1)..................................................... 102 (c)(2)..................................................... 102 (c)(3)..................................................... Not Applicable (d)........................................................ Not Applicable (e)........................................................ 102 (S)315(a)........................................................ 701 (b)........................................................ 702 803(a) (c)........................................................ 701 (d)........................................................ 701 (e)........................................................ 614 (S)316(a)........................................................ 101 (a)(1)(A).................................................. 602 612 (a)(1)(B).................................................. 613
---------- NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture.
TRUST INDENTURE INDENTURE ACT SECTION SECTION (a)(2)..................................................... Not Applicable (b)........................................................ 608 (c)........................................................ 104(c) (S)317(a)(1)..................................................... 603 (a)(2)..................................................... 604 (b)........................................................ 1103 (S)318(a)........................................................ 107
---------- NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture. TABLE OF CONTENTS
PAGE ---- Parties.................................................................. 1 Recitals of the Company.................................................. 1 Recitals of the Guarantor................................................ 1 ARTICLE ONE Definitions and Other Provisions of General Application Section 101. Definitions: Act....................................................... 2 Affiliate; control........................................ 2 Authenticating Agent...................................... 2 Bank...................................................... 2 Board of Directors........................................ 2 Board Resolution.......................................... 2 Business Day.............................................. 3 Commission................................................ 3 Company................................................... 3 Company Request; Company Order; Guarantor Request; Guarantor Order......................................... 3 Corporate Trust Office.................................... 3 Corporation............................................... 3 Default................................................... 3 Defaulted Interest........................................ 3 Depositary................................................ 3 Event of Default.......................................... 3 Floating or Adjustable Rate Provision..................... 3 Floating or Adjustable Rate Security...................... 4 Global Security........................................... 4 Guarantee................................................. 4 Guarantor................................................. 4 Holder.................................................... 4 Indenture................................................. 4 Interest.................................................. 4 Interest Payment Date..................................... 4 Maturity.................................................. 4 Officers' Certificate..................................... 5 Opinion of Counsel........................................ 5 Original Issue Discount Security.......................... 5 Outstanding............................................... 5 Paying Agent.............................................. 6 Periodic Offering......................................... 6 Person.................................................... 6 Place of Payment.......................................... 6
---------- NOTE: This table of contents shall not, for any purpose, be deemed to be a part of the Indenture.
PAGE ---- Predecessor Security....................................... 6 Redemption Date............................................ 7 Redemption Price........................................... 7 Regular Record Date........................................ 7 Securities................................................. 7 Security Register; Security Registrar...................... 7 Senior Indebtedness of the Company......................... 7 Senior Indebtedness of the Guarantor....................... 7 Special Record Date........................................ 8 Stated Maturity............................................ 8 Subsidiary................................................. 8 Trustee.................................................... 8 Trust Indenture Act........................................ 8 Vice President............................................. 8 Voting Stock of the Company................................ 8 Section 102. Compliance Certificates and Opinions....................... 8 Section 103. Form of Documents Delivered to Trustee..................... 9 Section 104. Acts of Holders; Record Dates.............................. 10 Section 105. Notices, Etc., to Trustee, Company and Guarantor........... 11 Section 106. Notice to Holders; Waiver.................................. 11 Section 107. Conflict with Trust Indenture Act.......................... 12 Section 108. Effect of Headings and Table of Contents................... 12 Section 109. Successors and Assigns..................................... 12 Section 110. Separability Clause........................................ 12 Section 111. Benefits of Indenture...................................... 12 Section 112. Governing Law.............................................. 12 Section 113. Legal Holidays............................................. 13 ARTICLE TWO Forms of Securities and Guarantees Section 201. Forms Generally............................................ 13 Section 202. Form of Face of Security................................... 14 Section 203. Form of Reverse of Security................................ 16 Section 204. Additional Provisions Required in Global Security.......... 21 Section 205. Form of Certificate of Authentication...................... 22 Section 206. Form of Guarantee.......................................... 22 ARTICLE THREE The Securities Section 301. Amount Unlimited; Issuable in Series....................... 24 Section 302. Denominations.............................................. 27
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PAGE ---- Section 303. Execution, Authentication, Delivery and Dating............ 27 Section 304. Temporary Securities...................................... 30 Section 305. Registration, Registration of Transfer and Exchange....... 31 Section 306. Mutilated, Destroyed, Lost and Stolen Securities.......... 33 Section 307. Payment of Interest; Interest Rights Preserved............ 34 Section 308. Persons Deemed Owners..................................... 35 Section 309. Cancellation.............................................. 35 Section 310. Computation of Interest................................... 36 ARTICLE FOUR Guarantee of Securities Section 401. Unconditional Guarantee................................... 36 Section 402. Execution of Guarantees................................... 37 ARTICLE FIVE Satisfaction and Discharge Section 501. Satisfaction and Discharge of Indenture................... 38 Section 502. Application of Trust Money................................ 39 ARTICLE SIX Remedies Section 601. Events of Default......................................... 39 Section 602. Acceleration of Maturity; Rescission and Annulment........ 40 Section 603. Collection of Indebtedness and Suits for Enforcement by Trustee................................................. 42 Section 604. Trustee May File Proofs of Claim.......................... 43 Section 605. Trustee May Enforce Claims Without Possession of Securities.............................................. 44 Section 606. Application of Money Collected............................ 44 Section 607. Limitation on Suits....................................... 44 Section 608. Unconditional Right of Holders to Receive Principal, Premium and Interest.................................... 45 Section 609. Restoration of Rights and Remedies........................ 45 Section 610. Rights and Remedies Cumulative............................ 46 Section 611. Delay or Omission Not Waiver.............................. 46 Section 612. Control by Holders........................................ 46 Section 613. Waiver of Past Defaults................................... 47 Section 614. Undertaking for Costs..................................... 48 Section 615. Waiver of Stay or Extension Laws.......................... 48
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PAGE ---- ARTICLE SEVEN The Trustee Section 701. Certain Duties and Responsibilities....................... 48 Section 702. Notice of Defaults........................................ 48 Section 703. Certain Rights of Trustee................................. 49 Section 704. Not Responsible for Recitals or Issuance of Securities and Guarantees.............................................. 50 Section 705. May Hold Securities....................................... 50 Section 706. Money Held in Trust....................................... 50 Section 707. Compensation and Reimbursement............................ 51 Section 708. Disqualification; Conflicting Interests................... 51 Section 709. Corporate Trustee Required; Eligibility................... 51 Section 710. Resignation and Removal; Appointment of Successor......... 52 Section 711. Acceptance of Appointment by Successor.................... 53 Section 712. Merger, Conversion, Consolidation or Succession to Business................................................ 55 Section 713. Preferential Collection of Claims Against Company and Guarantor............................................... 55 Section 714. Appointment of Authenticating Agent....................... 55 ARTICLE EIGHT Holders' Lists and Reports by Trustee, Company and Guarantor Section 801. Company and Guarantor to Furnish Trustee Names and Addresses of Holders.................................... 57 Section 802. Preservation of Information; Communications to Holders.... 57 Section 803. Reports by Trustee........................................ 58 Section 804. Reports by Company and Guarantor.......................... 58 ARTICLE NINE Consolidation, Merger and Sale Section 901. Company May Consolidate, Etc., Only on Certain Terms...... 58 Section 902. Successor Corporation Substituted for Company............. 59 Section 903. Guarantor May Consolidate, Etc., Only on Certain Terms.... 59 Section 904. Successor Corporations Substituted for Guarantor.......... 60 Section 905. Assumption by Guarantor................................... 61
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PAGE ---- ARTICLE TEN Supplemental Indentures Section 1001. Supplemental Indentures Without Consent of Holders........ 61 Section 1002. Supplemental Indentures With Consent of Holders........... 62 Section 1003. Execution of Supplemental Indentures...................... 63 Section 1004. Effect of Supplemental Indentures......................... 63 Section 1005. Conformity with Trust Indenture Act....................... 63 Section 1006. Reference in Securities to Supplemental Indentures........ 65 ARTICLE ELEVEN Covenants Section 1101. Payment of Principal, Premium and Interest................ 65 Section 1102. Maintenance of Office or Agency........................... 65 Section 1103. Money for Security Payments to Be Held in Trust........... 66 Section 1104. Corporate Existence....................................... 67 Section 1105. Company Statement as to Compliance........................ 68 Section 1106. Guarantor Statement as to Compliance...................... 68 Section 1107. Limitation Upon Disposition of Voting Stock of Company.... 69 Section 1108. Waiver of Certain Covenants............................... 69 ARTICLE TWELVE Redemption of Securities Section 1201. Applicability of Article.................................. 69 Section 1202. Election to Redeem; Notice to Trustee..................... 70 Section 1203. Selection by Security Registrar of Securities to Be Redeemed................................................ 70 Section 1204. Notice of Redemption...................................... 70 Section 1205. Deposit of Redemption Price............................... 71 Section 1206. Securities Payable on Redemption Date..................... 71 Section 1207. Securities Redeemed in Part............................... 72 ARTICLE THIRTEEN Sinking Funds Section 1301. Applicability of Article.................................. 72 Section 1302. Satisfaction of Sinking Fund Payments with Securities..... 73 Section 1303. Redemption of Securities for Sinking Fund................. 73
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PAGE ---- ARTICLE FOURTEEN Subordination of Securities and Guarantees Section 1401. Securities Subordinate to Senior Indebtedness of the Company.................................................. 76 Section 1402. Guarantees Subordinate to Senior Indebtedness of the Guarantor................................................ 78 Section 1403. Trustee and Holders of Securities May Rely on Certificate of Liquidating Agent; Trustee May Require Further Evidence as to Ownership of Senior Indebtedness; Trustee Not Fiduciary to Holders of Senior Indebtedness.......... 81 Section 1404. Payment Permitted If No Default............................ 82 Section 1405. Trustee Not Charged with Knowledge of Prohibition.......... 82 Section 1406. Trustee to Effectuate Subordination........................ 83 Section 1407. Rights of Trustee as Holder of Senior Indebtedness of the Company or Senior Indebtedness of the Guarantor.......... 83 Section 1408. Article Applicable to Paying Agents........................ 83 Testimonium............................................................... 84 Signatures and Seals...................................................... 85 Acknowledgments........................................................... 85
vi INDENTURE, dated as of August 25, 1995, among Mellon Financial Company, a corporation duly organized and existing under the laws of the Commonwealth of Pennsylvania having its principal executive office at 500 Grant Street, Pitts- burgh, Pennsylvania 15258 (herein called the "Company"), Mellon Bank Corpora- tion, a corporation duly organized and existing under the laws of the Common- wealth of Pennsylvania having its principal executive office at 500 Grant Street, Pittsburgh, Pennsylvania 15258 (herein called the "Guarantor"), and First Interstate Bank of California, a state banking association duly orga- nized and existing under the laws of the State of California having its prin- cipal executive office at 707 Wilshire Boulevard, W11-1, Los Angeles, Califor- nia 90017, as Trustee (herein called the "Trustee"). Recitals of the Company The Company deems it necessary to issue its unsecured debentures, notes or other evidences of indebtedness (herein called the "Securities") from time to time for its lawful purposes and has duly authorized the execution and deliv- ery of this Indenture to provide for the issuance of such Securities in one or more series and at such time or times as in this Indenture provided. All things necessary to make this Indenture a valid agreement of the Compa- ny, in accordance with its terms, have been done. Recitals of the Guarantor The Guarantor has duly authorized the Guarantees provided for herein, and to provide therefor the Guarantor has duly authorized the execution and delivery of this Indenture. All things necessary to make the Guarantees, when endorsed on the Securities to which they relate and executed by the Guarantor, the valid obligations of the Guarantor, and to make this Indenture a valid agreement of the Guarantor, in accordance with their and its terms, have been done. Now, Therefore, This Indenture Witnesseth: For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities or of series there- of, as follows: 1 ARTICLE ONE Definitions and Other Provisions of General Application Section 101. Definitions. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; and (3) the words "herein", "hereof" and "hereunder" and other words of sim- ilar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. "Act", when used with respect to any Holder, has the meaning specified in Section 104. "Affiliate" of any specified Person means any other Person directly or indi- rectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the forego- ing. "Authenticating Agent" means any authenticating agent appointed by the Trustee pursuant to Section 714 to act on behalf of the Trustee to authenti- cate Securities of one or more series. "Bank" means Mellon Bank, N.A., and any successor or successors thereto. "Board of Directors" means the board of directors of the Company or of the Guarantor, as the case may be, or any duly authorized committee of such board. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company or the Guarantor, as the case may be, 2 101 to have been duly adopted by its Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Business Day", when used with respect to any Place of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are generally authorized or ob- ligated by law or executive order to close. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or, if at any time after the execution of this instrument such Commission is not exist- ing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person. "Company Request", "Company Order", "Guarantor Request" and "Guarantor Or- der" mean, respectively, a written request or order signed in the name of the Company or the Guarantor by the Chairman of the Board, a Vice Chairman, the President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee. "Corporate Trust Office" means the principal office of the Trustee, Security Registrar, Paying Agent or Authenticating Agent, as the case may be, at which at any particular time its corporate trust business shall be administered; at the date hereof the Corporate Trust Office of the Trustee is located at 707 Wilshire Boulevard, W11-1, Los Angeles, California 90017, Attention: Corporate Trust Department. "corporation" means a corporation, association, company or business trust. "Default" has the meaning specified in Section 603. "Defaulted Interest" has the meaning specified in Section 307. "Depositary" means, with respect to the Securities of any series issuable or issued in whole or in part in the form of one or more Global Securities, the Person designated as Depositary for such series by the Company pursuant to Section 301. "Event of Default" has the meaning specified in Section 601. "Floating or Adjustable Rate Provision" means a formula or provision, speci- fied in a Board Resolution of the Company or an indenture supplemental 3 101 hereto, providing for the determination, whether pursuant to objective factors or pursuant to the sole discretion of any Person (including the Company, the Guarantor or the Bank), and periodic adjustment of the interest rate per annum borne by a Floating Rate Security. "Floating or Adjustable Rate Security" means any Security which provides for interest to be payable thereon at a rate per annum that may vary from time to time over the term thereof in accordance with a Floating or Adjustable Rate Provision. "Global Security" means a Security bearing the legend specified in Section 204 evidencing all or part of a series of Securities, issued to the Depositary for such series or its nominee, and registered in the name of such Depositary or nominee. "Guarantee" means the Guarantor's unconditional guarantee of the payment of the Securities as more fully described in Article Four. "Guarantor" means the Person named as the "Guarantor" in the first paragraph of this instrument until a successor corporation shall have become such pursu- ant to the applicable provisions of this Indenture, and thereafter "Guarantor" shall mean such successor corporation. "Holder" means a Person in whose name a Security is registered in the Secu- rity Register. "Indenture" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument, and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and gov- ern this instrument and any such supplemental indenture, respectively. The term "Indenture" shall also include the terms of particular series of Securi- ties established as contemplated by Section 301. "interest", when used with respect to an Original Issue Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity. "Interest Payment Date", when used with respect to any Security, means the Stated Maturity of an instalment of interest on such Security. "Maturity", when used with respect to any Security, means the date on which the principal of such Security or an instalment of principal becomes due 4 101 and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise. "Officers' Certificate" means a certificate signed by the Chairman of the Board, a Vice Chairman, the President or a Vice President, and by the Treasur- er, an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company or the Guarantor, as the case may be, and delivered to the Trustee. "Opinion of Counsel" means a written opinion of counsel, who may be an em- ployee of or counsel for the Company or the Guarantor, or who may be other counsel, acceptable to the Trustee. "Original Issue Discount Security" means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 602. "Outstanding", when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except: (i) Securities theretofore cancelled by the Trustee, or any Authenticat- ing Agent, or delivered to the Trustee, or any Authenticating Agent, for cancellation; (ii) Securities or portions thereof for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided that, if such Securities or portions thereof are to be redeemed, notice of such re- demption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and (iii) Securities which have been paid pursuant to Section 306 or in ex- change for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser; provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, (i) the princi- pal amount of an Original Issue Discount Security that shall be deemed to be Outstanding shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon acceleration of the Maturity 5 101 thereof pursuant to Section 602, (ii) the principal amount of a security de- nominated in a foreign currency or currencies shall be the U.S. dollar equiva- lent, determined on the date of original issuance of such Security, of the principal amount (or, in the case of an Original Issue Discount Security, the U.S. dollar equivalent on the date of original issuance of such Security of the amount determined as provided in (i) above) of such Security, and (iii) Securities owned by the Company, the Guarantor or any other obligor upon the Securities or any Affiliate of the Company or of the Guarantor or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which the Trustee knows to be so owned shall be so disregard- ed. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company, the Guarantor or any other obligor upon the Secu- rities or any Affiliate of the Company or the Guarantor or of such other obli- gor. "Paying Agent" means any Person authorized by the Company to pay the princi- pal of (and premium, if any) or interest on any Securities on behalf of the Company. "Periodic Offering" means an offering of Securities of a series from time to time the specific terms of which Securities including without limitation the rate or rates of interest, if any, thereon, the Stated Maturity or Maturities thereof, and the redemption provisions, if any, with respect thereto, are to be determined by the Company or its agents upon the issuance of such Securi- ties. "Person" means any individual, corporation, partnership, joint venture, as- sociation, joint-stock company, trust, unincorporated organization or govern- ment or any agency or political subdivision thereof. "Place of Payment", when used with respect to the Securities of any series, means the place or places where the principal of (and premium, if any) and in- terest on, or, if so specified, the principal (and premium, if any) only of, the Securities of that series are payable as specified as contemplated by Sec- tion 301, or, if not so specified, as specified in Section 1102. "Predecessor Security" of any particular Security means every previous Secu- rity evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security. 6 101 "Redemption Date", when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture. "Redemption Price", when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture. "Regular Record Date" for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 301. "Securities" has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture. "Security Register" and "Security Registrar" have the respective meanings specified in Section 305. "Senior Indebtedness of the Company" means any obligation of the Company to its creditors, whether now outstanding or subsequently incurred, except (i) the 9 3/4% Subordinated Debentures Due 2001, the 9 1/4% Subordinated Deben- tures Due 2001 and the 6 7/8% Subordinated Debentures due March 1, 2003, each issued under the indenture, dated as of April 15, 1991, among the Guarantor, the Company and Continental Bank, National Association, as trustee, and all other notes and obligations that may be issued under such indenture, as the same may be amended from time to time, (ii) any obligation as to which in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is provided that such obligation is not Senior Indebtedness; and (iii) obligations evidenced by the Securities. "Senior Indebtedness of the Guarantor" means any obligation of the Guarantor to its creditors, whether now outstanding or subsequently incurred, except (i) the 7 1/4% Convertible Subordinated Capital Notes due 1999 issued under the indenture, dated as of September 10, 1987, between the Guarantor and The Bank of New York, as trustee; (ii) the guarantee of the Guarantor of the 9 3/4% Subordinated Debentures Due 2001, the 9 1/4% Subordinated Debentures Due 2001 and the 6 7/8% Subordinated Debentures due March 1, 2003, each issued under the indenture, dated as of April 15, 1991, among the Guarantor, the Company and Continental Bank, National Association, as trustee, and all guarantees of the Guarantor of any other notes or obligations which may be issued under such indenture, as the same may be amended from time to time; (iii) any obligation as to which, in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is provided that such obligation is not Se- nior Indebtedness; and (iv) obligations evidenced by the Guarantees. 7 101 "Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 307. "Stated Maturity", when used with respect to any Security or any instalment of principal thereof or interest thereon, means the date specified in such Se- curity as the fixed date on which the principal of such Security or such in- stalment of principal or interest is due and payable. "Subsidiary" means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or the Guaran- tor, as the case may be, or by one or more other of its Subsidiaries, or by the Company or the Guarantor, as the case may be, and one or more other of its Subsidiaries. For the purposes of this definition, "voting stock" means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency. "Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, "Trustee" as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series. "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force 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. "Vice President", when used with respect to the Company, the Guarantor or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title "vice president". "Voting Stock of the Company" means stock of any class or classes, however designated, having ordinary voting power for the election of a majority of the Board of Directors of the Company, other than stock having such power only by reason of the happening of any contingency. Section 102. Compliance Certificates and Opinions. Except as otherwise expressly provided by this Indenture, upon any applica- tion or request by the Company or the Guarantor to the Trustee to take any ac- tion under any provision of this Indenture, the Company or the Guarantor, as the case may be, shall furnish to the Trustee such certificates and opinions as may 8 101,102 be required under the Trust Indenture Act. Each such certificate or opinion shall be given in the form of an Officers' Certificate, if to be given by an officer of the Company or the Guarantor, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Inden- ture Act and any other requirements set forth in this Indenture. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such cer- tificate or opinion are based; (3) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condi- tion has been complied with; and (4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. Section 103. Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or cov- ered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Company or the Guarantor may be based, insofar as it relates to legal matters, upon a certificate or opin- ion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company or the Guarantor, as the case may be, stating that the information with respect to such factual matters is in the possession of the Company or the Guarantor, as the case may be, unless such counsel knows, or in the exercise of reason- able care should know, that the certificate or opinion or representations with respect to such matters are erroneous. 9 102,103 Where any Person is required to make, give or execute two or more applica- tions, requests, consents, certificates, statements, opinions or other instru- ments under this Indenture, they may, but need not, be consolidated and form one instrument. Section 104. Acts of Holders; Record Dates. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially simi- lar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company and the Guarantor. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Hold- ers signing such instrument or instruments. Proof of execution of any such in- strument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 701) conclusive in favor of the Trustee and the Company and the Guarantor, if made in the manner provided in this Section. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instru- ment or writing acknowledged to him the execution thereof. Where such execu- tion is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writ- ing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient. (c) The Company may, in the circumstances permitted by the Trust Indenture Act, fix any day as the record date for the purpose of determining the Holders of Securities of any series entitled to give or take any request, demand, au- thorization, direction, notice, consent, waiver or other action, or to vote on any action, authorized or permitted to be given or taken by Holders of Securi- ties of such series. If not set by the Company prior to the first solicitation of a Holder of Securities of such series made by any Person in respect of any such action, or, in the case of any such vote, prior to such vote, the record date for any such action or vote shall be the 30th day (or, if later, the date of the most recent list of Holders required to be provided pursuant to Section 801) prior to such first solicitation or vote, as the case may be. With regard to any record date for action 10 103,104 to be taken by the Holders of one or more series of Securities, only the Hold- ers of Securities of such series on such date (or their duly designated prox- ies) shall be entitled to give or take, or vote on, the relevant action. (d) The ownership of Securities shall be proved by the Security Register. (e) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registra- tion of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee, any Paying Agent, any Security Registrar, any Authenticating Agent, the Company or the Guarantor in reliance thereon, whether or not notation of such action is made upon such Security. Section 105. Notices, Etc., to Trustee, Company and Guarantor. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with, (1) the Trustee by any Holder or by the Company or the Guarantor shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, At- tention: Corporate Trust Department, or (2) the Company or the Guarantor by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein ex- pressly provided) if in writing and mailed, first-class postage prepaid, to the Company or the Guarantor, as the case may be, addressed to the at- tention of its Secretary at the address of its principal office specified in the first paragraph of this instrument or at any other address previ- ously furnished in writing to the Trustee by the Company or the Guarantor. Section 106. Notice to Holders; Waiver. Where this Indenture provides for notice to Holders of any event, such no- tice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his address as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the suf- ficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, 11 104,105,106 either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall con- stitute a sufficient notification for every purpose hereunder. Section 107. Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under such Act to be a part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be. Section 108. Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. Section 109. Successors and Assigns. All covenants and agreements in this Indenture by the Company and the Guar- antor shall bind their respective successors and assigns, whether so expressed or not. Section 110. Separability Clause. In case any provision in this Indenture or in the Securities shall be inval- id, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 111. Benefits of Indenture. Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereun- der, any Paying Agent, any Security Registrar, any Authenticating Agent, the holders of Senior Indebtedness of the Company and the Guarantor and the Hold- ers, any benefit or any legal or equitable right, remedy or claim under this Indenture. Section 112. Governing Law. This Indenture, the Securities and the Guarantees shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, ex- cept that the rights, immunities, duties and liabilities of the Trustee as a trustee and any rights and immunities limiting such liability shall be gov- erned by the laws of the State of California. 12 106,107,108,109,110,111,112 Section 113. Legal Holidays. In any case where any Interest Payment Date, Redemption Date or Stated Matu- rity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities (other than a provision of the Securities of any series which specifically states that such provision shall apply in lieu of this Section) ) payment of interest or principal (and premium, if any) need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Inter- est Payment Date or Redemption Date, or at the Stated Maturity, provided that no interest shall accrue for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be. ARTICLE TWO Forms of Securities and Guarantees Section 201. Forms Generally. The Securities of each series and the Guarantees relating thereto shall be in substantially the form set forth in this Article, or in such other form as shall be established by or pursuant to a Board Resolution of the Company, in the case of Securities, and of the Guarantor, in the case of Guarantees, or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, con- sistently herewith, be determined by the officers executing such Securities or Guarantees, as evidenced by their execution thereof. If the form of Securities of any series or the Guarantees relating thereto is established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company or the Guarantor, as the case may be, and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 303 for the authentication and delivery of the Securities of such series initially de- livered by the Company to the Trustee. The Trustee's certificates of authentication shall be in substantially the form set forth in this Article. The definitive Securities of any series shall be printed, lithographed or engraved or produced by any combination of these methods on steel engraved borders or may be produced in any other manner permitted by the rules of any 13 113,201 securities exchange on which such Securities may be listed, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities. Section 202. Form of Face of Security. [If the Security is an Original Issue Discount Security, insert--For pur- poses of Section 1232 of the United States Internal Revenue Code of 1954, as amended, the issue price of this Security is. . . .% of its principal amount and the issue date is. . . . . . . . . ., 19. . . .] MELLON FINANCIAL COMPANY No. $ Mellon Financial Company, a corporation duly organized and existing under the laws of the Commonwealth of Pennsylvania (herein called 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 . [If the Security is to bear interest prior to Maturity, insert--, and to pay interest thereon from or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on and in each year, commencing , at [If the Security is to bear interest at a fixed rate, insert-- the rate of % per annum,] [If the Security is a Floating or Adjustable Rate Security insert-- a rate per annum [computed--determined] in accordance with the [insert defined name of Floating or Adjustable Rate Provision] set forth below], until the principal hereof is paid or made avail- able for payment [If applicable insert--, and (to the extent that the payment of such interest shall be legally enforceable) at the rate of....% per annum on any overdue principal and premium and on any overdue instalment of interest]. The interest so payable, and punctually paid or duly provided for, on any In- terest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is regis- tered at the close of business on the Regular Record Date for such interest, which shall be the or (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punc- tually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such De- faulted Interest to be fixed by 14 201,202 the Trustee, notice whereof shall be given to Holders of Securities of this se- ries not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully pro- vided in said Indenture. [At this point in the Form of Security of any series of Floating or Adjust- able Rate Securities, the text of the Floating or Adjustable Rate Provision re- lating thereto should be inserted.]] [If the Security is not to bear interest prior to Maturity, insert--The prin- cipal of this Security shall not bear interest except in the case of a default in payment of principal upon acceleration, upon redemption or at Stated Matu- rity and in such case the overdue principal of this Security shall bear inter- est at the rate of % per annum (to the extent that the payment of such inter- est shall be legally enforceable), which shall accrue from the date of such de- fault in payment to the date payment of such principal has been made or duly provided for. Interest on any overdue principal shall be payable on demand. Any such interest on any overdue principal that is not so paid on demand shall bear interest at the rate of % per annum (to the extent that the payment of such interest shall be legally enforceable), which shall accrue from the date of such demand for payment to the date payment of such interest has been made or duly provided for, and such interest shall also be payable on demand.] Payment of the principal of (and premium, if any) and [if applicable, in- sert--any such] interest on this Security will be made at the office or agency of the Company maintained for that purpose in [insert at least one Place of Payment] [if applicable, insert-- and [if applicable, insert--, with respect to principal (and premium, if any) only,] at the office or agency of the Company maintained for that purpose in [insert one or more additional Places of Pay- ment]], in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register. Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. 15 202 Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof, or an Authenticating Agent, by man- ual signature, neither this Security nor the Guarantee endorsed hereon shall be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. In Witness Whereof, the Company has caused this instrument to be duly exe- cuted under its corporate seal. Dated: MELLON FINANCIAL COMPANY By..................................... [Authorized Signature] Attest: ....................................... [Authorized Signature] Section 203. Form of Reverse of Security. This Security is one of a duly authorized series of Securities of the Com- pany (herein called the "Securities"), of the series hereinafter specified, issued and to be issued under an Indenture, dated as of August 25, 1995 (herein called the "Indenture"), among the Company, the Guarantor and First Interstate Bank of California, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a state- ment of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Guarantor, the Trustee, the holders of Senior Indebtedness of the Company and the Guarantor and the Holders of the Securi- ties and of the terms upon which the Securities are, and are to be, authenti- cated and delivered. The Securities may be issued in different series, as in the Indenture provided. This Security is one of the series designated on the face hereof, issued under and entitled to the benefits of the Indenture [and limited (except as otherwise provided in the Indenture) to an aggregate prin- cipal amount of $ ]. [If applicable, insert--The Securities of this series are redeemable at the option of the Company, upon not less than 30 days nor more than 60 days notice by mail, [if applicable, insert--(1) on in any year commencing with the year and ending with the year through operation of the sinking fund for this series at a Redemption Price equal to 100% of the principal amount, 16 202,203 and (2)] at any time [on or after , 19 ,] as a whole or from time to time in part, at the following Redemption Prices (expressed as percentages of the prin- cipal amount): If redeemed [on or before , %, and if redeemed] during the 12-month period beginning of the years indicated,
YEAR REDEMPTION PRICE YEAR REDEMPTION PRICE ---- ---------------- ---- ----------------
and thereafter at a Redemption Price equal to % of the principal amount, to- gether in the case of any such redemption [if applicable, insert--(whether through operation of the sinking fund or otherwise)] with accrued interest to the Redemption Date, but interest instalments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securi- ties, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.] [If applicable, insert--The Securities of this series are redeemable at the option of the Company upon not less than 30 days nor more than 60 days notice by mail, (1) on in any year commencing with the year.....and ending with the year through operation of the sinking fund for this series at the Redemp- tion Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below, and (2) at any time [on or after ], as a whole or in part, at the election of the 17 203 Company, at the Redemption Prices for redemption otherwise than through opera- tion of the sinking fund (expressed as percentages of the principal amount) set forth in the table below: If redeemed during the 12-month period beginning of the years indicated,
REDEMPTION PRICE REDEMPTION PRICE FOR FOR REDEMPTION REDEMPTION OTHERWISE THROUGH OPERATION THAN THROUGH OF THE OPERATION OF THE YEAR SINKING FUND SINKING FUND ---- ----------------- --------------------
and thereafter at a Redemption Price equal to % of the principal amount, to- gether in the case of any such redemption (whether through operation of the sinking fund or otherwise) with accrued interest to the Redemption Date, but interest instalments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Prede- cessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.] [Notwithstanding the foregoing, the Company may not, prior to , redeem any Securities of this series as contemplated by [Clause (2) of] the preceding par- agraph as a part of, or in anticipation of, any refunding operation by the ap- plication, directly or indirectly, of moneys borrowed having an interest cost to the Company (calculated in accordance with generally accepted financial practice) of less than % per annum.] [The sinking fund for this series provides for the redemption on in each year beginning with the year and ending with the year of [not less than] $ [("mandatory sinking fund") and not more than $ ] aggregate prin- cipal amount of Securities of this series. [Securities of this series acquired or redeemed by the Company otherwise than 18 203 through [mandatory] sinking fund payments may be credited against subsequent [mandatory] sinking fund payments otherwise required to be made--in the inverse order in which they become due.] In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof or any transferee designated by such Holder upon the cancellation hereof. [If the Security is not an Original Issue Discount Security,--If an Event of Default with respect to Securities of this series shall occur and be continu- ing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.] [If the Security is an Original Issue Discount Security,--If an Event of De- fault with respect to Securities of this series shall occur and be continuing, an amount of principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. Such amount shall be equal to--insert formula for determining the amount. Upon pay- ment (i) of the amount of principal so declared due and payable and (ii) of in- terest on any overdue principal and overdue interest (in each case to the ex- tent that the payment of such interest shall be legally enforceable), all of the Company's obligations in respect of the payment of the principal of and in- terest, if any, on the Securities of this series shall terminate.] The indebtedness evidenced by this Security is, to the extent provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness of the Company, and this Security is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination so provided and (c) appoints the Trustee his attorney-in-fact for any and all such purposes. The Indenture permits, with certain exceptions as therein provided, the amend- ment thereof and the modification of the rights and obligations of the Company and the Guarantor and the rights of the Holders of the Securities of each se- ries to be affected under the Indenture at any time by the Company, the Guaran- tor and the Trustee with the consent of the Holders of not less than 66 2/3% in aggregate principal amount of the Securities at the time Outstanding of each 19 203 series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Securi- ties of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company or the Guarantor with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all fu- ture Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not no- tation of such consent or waiver is made upon this Security. The Guarantor, or a Subsidiary thereof, may directly assume, by a supplemen- tal indenture, the due and punctual payment of the principal of (and premium, if any) and interest on all the Securities, in which case the Company shall be released from its liability as obligor on the Securities. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is ab- solute and unconditional, to pay the principal of (and premium, if any) and in- terest on this Security at the times, places and [rate--rates], and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at [the--each] of- fice or agency of the Company, in [the--each] place referred to on the face hereof, where the principal of (and premium, if any) and interest on [if appli- cable, insert--, or the principal (and premium, if any) only of,] this Security are payable, duly endorsed by, or accompanied by a written instrument of trans- fer in form satisfactory to the Company and the Security Registrar duly exe- cuted by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of au- thorized denominations and for the same aggregate principal amount, will be is- sued to the designated transferee or transferees. The Securities of this series are issuable only in registered form without coupons in denominations of $ and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securi- ties of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor and of a different authorized de- nomination, as requested by the Holder surrendering the same. 20 203 No service charge shall be made for any such registration of transfer or ex- change, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Security for registration of transfer, the Company, the Guarantor and the Trustee and any agent of the Company, the Guar- antor or the Trustee may treat the Person in whose name this Security is regis- tered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Guarantor, the Trustee nor any such agent shall be affected by notice to the contrary. All terms used in this Security undefined herein which are defined in the In- denture shall have the meanings assigned to them in the Indenture. Section 204. Additional Provisions Required in Global Security. Any Global Security issued hereunder shall, in addition to the provisions contained in Sections 202 and 203, bear a legend in substantially the following form: "UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES OF THIS SERIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT 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 OR BY THE DE- POSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH DE- POSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF SUCH A TRANSFERROR TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF SUCH A TRANSFEREE OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTA- TIVE OF SUCH A TRANSFERROR AND ANY PAYMENT IS MADE TO SUCH A TRANSFEREE, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, SUCH A TRANSFERROR, HAS AN IN- TEREST HEREIN." 21 203,204 Section 205. Form of Certificate of Authentication. The certificates of authentication shall be in substantially the following form: This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. FIRST INTERSTATE BANK FIRST INTERSTATE BANK OF CALIFORNIA, as Trustee OF CALIFORNIA, as Trustee By .............................. Authorized Signatory Section 206. Form of Guarantee. The form of Guarantee to be endorsed on all Securities shall be substantially as follows: Guarantee Of Mellon Bank Corporation For value received, Mellon Bank Corporation, a corporation duly organized and existing under the laws of the Commonwealth of Pennsylvania (herein called the "Guarantor"), hereby unconditionally guarantees to the Holder of the Security upon which this Guarantee is endorsed the due and punctual payment of the prin- cipal of (and premium, if any) and interest on [if the Security upon which the Guarantee is endorsed is not to bear interest prior to Maturity, insert--any overdue principal of] said Security [if applicable, insert--and the due and punctual payment of the sinking fund payments required with respect to said Se- curity,] when and as the same shall become due and payable, whether at maturi- ty, by acceleration or redemption or otherwise, according to the terms thereof and of the Indenture referred to therein. In case of the failure of Mellon Fi- nancial Company or any successor thereto (the "Company") punctually to pay any such principal, premium [, --or] interest [or sinking fund payment], the Guar- antor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at maturity, upon acceleration or redemption or otherwise, and as if such payment were made by the Company. 22 205,206 The Guarantor hereby agrees that its obligations hereunder shall be as prin- cipal and not merely as surety, and shall be absolute and unconditional, irre- spective of, and shall be unaffected by, any invalidity, irregularity or unen- forceability of said Security or said Indenture, any failure to enforce the provisions of said Security or said Indenture, or any waiver, modification, consent or indulgence granted to the Company with respect thereto, by the Holder of said Security or the Trustee under said Indenture, the recovery of any judgment against the Company or any action to enforce the same, or any other circumstances which may otherwise constitute a legal or equitable dis- charge of a surety or guarantor. The Guarantor hereby waives diligence, pre- sentment, demand of payment, filing of claims with a court in the event of merger, insolvency or bankruptcy of the Company, any right to require a pro- ceeding first against the Company, protest or notice with respect to said Se- curity or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged except by payment in full of the principal, premium, if any, [or] interest on [any overdue principal of] [or any sinking fund payment required with respect to] said Security and the complete performance of all other obligations contained in said Security. The Guarantor shall be subrogated to all rights of the Holder of said Secu- rity against the Company in respect of any amounts paid to such Holder by the Guarantor pursuant to the provisions of this Guarantee; provided, however, that the Guarantor shall not be entitled to enforce, or to receive any pay- ments arising out of or based upon, such right of subrogation until the prin- cipal of (and premium, if any) and interest on [any overdue principal of] [and the sinking fund payments required with respect to] all Securities issued un- der said Indenture shall have been paid in full. Subject to the next following paragraph, the Guarantor hereby certifies and warrants that all acts, conditions and things required to be done and per- formed and to have happened precedent to the creation and issuance of this Guarantee and to constitute the same the valid obligation of the Guarantor have been done and performed and have happened in due compliance with all ap- plicable laws. Claims under this Guarantee are, to the extent provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness of the Guarantor, and this Guarantee is issued subject to the provisions of the Indenture with respect thereto. Each Holder of a Se- curity upon which this Guarantee is endorsed, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropri- ate to effectuate the subordination so provided and (c) appoints the Trustee his attorney-in-fact for any and all such purposes. 23 206 This Guarantee shall not be valid or become obligatory for any purpose until the certificate of authentication on said Security shall have been signed man- ually by or on behalf of the Trustee under said Indenture. This Guarantee shall be deemed to be a contract made under the laws of the Commonwealth of Pennsylvania, and for all purposes shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, ex- cept as otherwise required by mandatory provisions of law. In Witness Whereof, the Guarantor has caused this Guarantee to be duly exe- cuted in facsimile by its duly authorized officer under its corporate seal. MELLON BANK CORPORATION [Date of initial issuance of series] By..................................... [Authorized Signature] Attest: ....................................... [Authorized Signature] ARTICLE THREE The Securities Section 301. Amount Unlimited; Issuable in Series. The aggregate principal amount of Securities which may be authenticated and delivered and may be Outstanding under this Indenture is unlimited. The Securities may be issued in one or more series. There shall be estab- lished in or pursuant to a Board Resolution of the Company, and, subject to Section 303, set forth or determined in the manner provided, in an Officers' Certificate of the Company, or established in one or more indentures supple- mental hereto, prior to the issuance of Securities of any series, (1) the title of the Securities of the series (which shall distinguish the Securities of the series from all Securities of any other series); (2) any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 304, 24 206,301 305, 306, 1006 or 1207 and except for any Securities which, pursuant to Sec- tion 303, are deemed never to have been authenticated and delivered hereun- der); (3) the Person to whom any interest on a Security of the series shall be payable, if other than the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest; (4) the date or dates on which the principal of the Securities of the series is payable; (5) the rate or rates at which the Securities of the series shall bear in- terest, if any, or the Floating or Adjustable Rate Provision pursuant to which such rates are determined, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable and the Regular Record Date for the interest payable on any Interest Payment Date; (6) the place or places where the principal of (and premium, if any) and in- terest on, or the principal (and premium, if any) only of, Securities of the series shall be payable; (7) the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Company; (8) the obligation, if any, of the Company to redeem or purchase Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation; (9) if other than denominations of $100,000 and any integral multiple of $1,000 in excess thereof, the denominations in which Securities shall be issu- able; (10) any other event or events of default applicable with respect to Securi- ties of the series in addition to those provided in Section 601; (11) if other than the principal amount thereof, the portion of the princi- pal amount of Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 602; (12) any other covenant or warranty included for the benefit of Securities of the series in addition to (and not inconsistent with) those included in this Indenture for the benefit of Securities of all series; 25 301 (13) whether the Securities of the series shall be issued in whole or in part in the form of one or more Global Securities and, in such case, the De- positary for such Global Security or Securities, which Depositary shall be a clearing agency registered under the Securities Exchange Act of 1934, as amended; (14) the currency or currencies, including composite currencies, in which payment of the principal of and any premium and interest on the Securities of the series shall be payable if other than the currency of the United States of America and the manner of determining the equivalent thereof in the currency of the United States of America for purposes of the definition of "Outstand- ing" in Section 101; (15) if the amount of payments of principal of and any premium or interest on the Securities of the series may be determined with reference to an index, the manner in which such amounts shall be determined; (16) if the principal of (and premium, if any) or interest on the Securities of the series are to be payable, at the election of the Company or a Holder thereof, in a coin or currency other than that in which the Securities are stated to be payable, the coin or currency in which payment of the principal of (and premium, if any) or interest on Securities of such series as to which such election is made shall be payable, the period or periods within which, and the terms and conditions upon which, such election may be made; (17) any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture, except as permitted by Section 1001(5)). The payment of principal and premium, if any, and interest and sinking fund payments, if any, on or relating to the Securities of each series shall be un- conditionally guaranteed by the Guarantor. Unless otherwise provided in or pursuant to such Board Resolution of the Company and set forth in such Officers' Certificate of the Company or in any such indenture supplemental hereto, if Securities of any series are to be re- deemed they may be redeemed with funds from any source, including without lim- itation proceeds from the sale of one or more series of Securities. All Securities of any one series shall be substantially identical except for necessary or proper variations between temporary and definitive Securities or Securities of different denominations and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Sec- tion 303) set forth in the Officers' Certificate referred to above or in any such indenture supplemental hereto. 26 301 If any of the terms of the Securities of a series are established by action taken pursuant to a Board Resolution of the Company, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Sec- retary of the Company and delivered to the Trustee at or prior to the delivery of the Officers' Certificate of the Company setting forth the terms of the Se- curities of such series. With respect to Securities of a series offered in a Periodic Offering, such Board Resolution or action may provide general terms or parameters for Securities of such series and provide either that the spe- cific terms of particular Securities of such series shall be specified in a Company Order or that such terms shall be determined by the Company or its agents in accordance with a Company Order as contemplated by the first proviso of the third paragraph of Section 303. The Securities of each series and the Guarantees endorsed thereon shall be subordinated in right of payment to Senior Indebtedness of the Company and the Guarantor, respectively, as provided in Article Fourteen. Section 302. Denominations. The Securities of each series shall be issuable in such denominations as shall be specified as contemplated by Section 301. In the absence of any such provisions with respect to the Securities of any particular series, the Secu- rities of such series shall be issuable only as registered Securities without coupons in denominations of $100,000 and any integral multiple of $1,000 in excess thereof. Section 303. Execution, Authentication, Delivery and Dating. The Securities shall be executed on behalf of the Company and the Guarantees endorsed thereon shall be executed on behalf of the Guarantor by, respective- ly, its Chairman of the Board, one of its Vice Chairmen, its President or one of its Vice Presidents, under its corporate seal reproduced thereon attested by its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Securities or Guarantees may be manual or facsimile. Securities and Guarantees bearing the manual or facsimile signatures of in- dividuals who were at any time the proper officers of the Company or the Guar- antor, respectively, shall bind the Company and the Guarantor, respectively, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities and Guar- antees or did not hold such offices at the date of such Securities and Guaran- tees. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company, and with Guarantees endorsed thereon executed by the Guarantor, to the Trustee or Authenticating Agent for authentication, together with a Com- pany 27 301,302,303 Order for the authentication and delivery of such Securities, and the Trustee or Authenticating Agent in accordance with the Company Order shall authenti- cate and deliver such Securities; provided, however, that, with respect to Se- curities of a series offered in a Periodic Offering, (a) the Trustee or Au- thenticating Agent shall authenticate and deliver Securities of such series original issue from time to time, in an aggregate principal amount not exceed- ing the aggregate principal amount established for such series, pursuant to a Company Order or pursuant to such other procedures acceptable to the Trustee as may be specified from time to time by a Company Order, (b) the maturity date or dates, original issue date or dates, currency or currencies or compos- ite currencies, interest rate or rates and any other terms of the Securities of such series shall be determined by Company Order or pursuant to such proce- dures and (c) if provided for in such procedures, such Company Order may au- thorize authentication and delivery pursuant to oral or electronic instruc- tions from the Company or its duly authorized agent or agents, which instruc- tions shall be promptly confirmed in writing, including via facsimile, prior to delivery. If the form or terms of the Securities of the series or the form of the Guarantee relating thereto have been established in or pursuant to one or more Board Resolutions as permitted by Sections 201 and 301, in authenti- cating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive at the time of the initial delivery by the Company of Securities of such series to the Trustee or Authenticating Agent for authentication, and (subject to Section 701) shall be fully protected in relying upon, an Opinion of Counsel stating, (a) if the form of such Securities or Guarantees has been established by or pursuant to Board Resolution as permitted by Section 201, that such form has been established in conformity with the provisions of this Inden- ture; (b) if the terms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 301, that such terms have been established in conformity with the provisions of this Indenture; and (c) that such Securities, when authenticated and delivered by the Trustee or Authenticating Agent and issued by the Company, and such Guar- antees when endorsed on such Securities, all in the manner and subject to any conditions specified in such Opinion of Counsel, will be the legal, valid and binding obligations of the Company and the Guarantor, respec- tively, enforceable in accordance with their terms and entitled to the benefits of this Indenture, subject, as to enforcement, to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting generally the enforcement of creditors' rights and to 28 303 general principles of equity; provided, however, that, with respect to Se- curities of a series offered in a Periodic Offering, the Trustee shall be entitled to receive such Opinion of Counsel in connection only with the first authentication of Securities of such series and that the opinions de- scribed in clauses (b) and (c) above may state, respectively, (x) that, when the terms of such Securities shall have been estab- lished pursuant to a Company Order or pursuant to such procedures as may be specified from time to time by a Company Order, all as contem- plated by a Board Resolution or action taken pursuant thereto, such terms will have been duly authorized by the Company and will have been established in conformity with the provisions of this Indenture; and (y) that such Securities, when completed, authenticated and deliv- ered by the Trustee or Authenticating Agent and issued by the Company, and such Guarantees when endorsed on such Securities, all in the man- ner and subject to any conditions specified in such Opinion of Coun- sel, will be the legal, valid and binding obligations of the Company and the Guarantor, respectively, enforceable in accordance with their terms and entitled to the benefits of this Indenture, subject, as to enforcement, to applicable bankruptcy, insolvency, fraudulent trans- fer, reorganization, moratorium and similar laws relating to or af- fecting generally the enforcement of creditors' rights and to general principles of equity. With respect to Securities of a series offered in a Periodic Offering, the Trustee may rely, as to the authorization by the Company of any of such Securi- ties and by the Guarantor of any such Guarantees, the form and terms thereof and the legality, validity, binding effect and enforceability thereof, upon the Opinion of Counsel, Company Order and other documents delivered pursuant to Sections 201 and 301 and this Section, as applicable, delivered at or prior to the first authentication of Securities of such series unless and until such opinion or other documents have been superseded or revoked. The Trustee or Authenticating Agent may, but shall not be obligated to, au- thenticate the Securities of any series the form or terms of which, or the form of the Guarantees relating to which, have been so established and with respect to which it would not be or have been obligated, pursuant to the second sen- tence of Section 1003, to execute, if no Securities of such series have been authenticated, at the time such authentication is requested, or, if Securities of such series have been authenticated, at the time of the initial authentica- tion of Securities of such series, an indenture supplemental hereto containing such form or terms. 29 303 Notwithstanding the provisions of Section 301 and of the third paragraph of this Section 303, if any Securities of a series are to be offered in a Peri- odic Offering, it shall not be necessary to deliver the Opinion of Counsel, Company Order and other documents otherwise required pursuant to Sections 201 and 301 and this Section at or prior to the time of authentication of each Se- curity of such series if such documents are delivered at or prior to the time of authentication upon original issuance of the first Security of such series to be issued. Each Security shall be dated the date of authentication of such Security. Each Guarantee shall be dated the date of the initial issuance of Securities of the series to which it pertains. No Security or Guarantee endorsed thereon shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee or Authenticating Agent by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenti- cated and delivered hereunder. Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such security to the Trustee for cancellation as provided in Section 309 together with a written statement (which need not comply with Section 102 and need not be accompanied by an Opinion of Counsel) stating that such Security has never been issued and sold by the Company, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture. The Trustee or Authenticating Agent shall have the right to decline to au- thenticate and deliver any Securities under this Section if the Trustee or Au- thenticating Agent, being advised by counsel, determines that such action may not lawfully be taken by the Company or the Guarantor or if the issue of such Securities pursuant to this Indenture will affect the Trustee's own rights, duties or immunities under this Indenture in a manner not reasonably accept- able to the Trustee. Section 304. Temporary Securities. Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee or Authenticating Agent shall authenticate and deliver, temporary Securities (having Guarantees duly en- dorsed thereon) which are printed, lithographed, typewritten, mimeographed or 30 303,304 otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such ap- propriate insertions, omissions, substitutions and other variations as the of- ficers executing such Securities may determine, as evidenced by their execution of such Securities. If temporary Securities of any series are issued, the Company will cause de- finitive Securities of that series to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company designated pursuant to Section 1102 in a Place of Payment for Securities of that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any se- ries, the Company shall execute and the Trustee or Authenticating Agent shall authenticate and deliver in exchange therefor one or more definitive Securities of the same series and of a like aggregate principal amount and tenor of autho- rized denominations. Until so exchanged, the temporary Securities of any series and the Guarantees endorsed thereon shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series and tenor and the Guarantees endorsed thereon. Section 305. Registration, Registration of Transfer and Exchange. The Company will keep at an office or agency to be maintained by the Company as provided in Section 1102 a register (hereinafter referred to as the "Secu- rity Register") in which, subject to such reasonable regulations as it may pre- scribe, the Company shall provide for the registration of Securities and the registration of transfers of Securities. At all reasonable times, the Security Register shall be open to inspection by the Trustee. Unless and until otherwise determined by the Company, by Board Resolution, the Security Register shall be kept in the City of Pittsburgh, Pennsylvania, at the Corporate Trust Office of the Bank, which is hereby initially appointed security registrar ("Security Registrar", which term includes any successor appointed pursuant to this Sec- tion) for the purpose of registering Securities and transfers of Securities as herein provided. Upon surrender for registration of transfer of any Security of any series at the office or agency of the Company maintained pursuant to Section 1102 for such purpose in a Place of Payment for Securities of that series, the Company shall execute, and the Trustee or Authenticating Agent shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new 31 304,305 Securities of like tenor of the same series (having Guarantees duly endorsed thereon), of any authorized denominations and of a like aggregate principal amount and tenor. At the option of the Holder, Securities of any series may be exchanged for other Securities of like tenor of the same series (having Guarantees duly en- dorsed thereon), of any authorized denominations and of a like aggregate prin- cipal amount and tenor, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee or Authenticating Agent shall au- thenticate and deliver, the Securities which the Holder making the exchange is entitled to receive and the Guarantor shall execute the Guarantees endorsed thereon. All Securities and the Guarantees endorsed thereon issued upon any registra- tion of transfer or exchange of Securities shall be the valid obligations, re- spectively, of the Company and the Guarantor evidencing the same debt, and en- titled to the same benefits under this Indenture, as the Securities and the Guarantees endorsed thereon surrendered upon such registration of transfer or exchange. Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Security Registrar) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company duly executed, by the Holder thereof or his attor- ney duly authorized in writing. No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursu- ant to Section 304, 1006 or 1207 not involving any transfer. The Company shall not be required (i) to issue, register the transfer of or exchange any Security of any series during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Se- curities of such series selected for redemption under Section 1203 and ending at the close of business on the day of such mailing, or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. Notwithstanding the foregoing, any Global Security shall be exchangeable pur- suant to this Section 305 for Securities registered in the names of Persons other than the Depositary for such Security or its nominee only if (i) such De- 32 305 positary notifies the Company that it is unwilling or unable to continue as De- positary for such Global Security or if at any time such Depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, (ii) the Company executes and delivers to the Trustee a Company Order that such Global Security shall be so exchangeable or (iii) there shall have occurred and be continuing an Event of Default with respect to the Securities. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Securities registered in such names as such Deposi- tary shall direct. Unless and until any Global Security is exchanged in whole or in part for Se- curities of this series in certificated form, such Global Security may not be transferred except 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 or by the Depositary or any such nominee to a successor Depositary or a nominee of such Depositary. Unless a certificate representing a Global Se- curity is presented by an authorized representative of such a transferror to the Company or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of such a transferee or such other name as requested by an authorized representative of such a transferror and any payment is made to such a transferee, any transfer, pledge or other use thereof for value or otherwise by or to any person is wrongful since the regis- tered owner thereof, such a transferror has an interest therein. No holder of any beneficial interest in any Global Security held on its be- half by a Depositary shall have any rights under this Indenture with respect to such Global Security, and such Depositary may be treated by the Company, the Guarantor, the Trustee, and any agent of the Company, the Guarantor or the Trustee as the owner of such Global Security for all purposes whatsoever. Not- withstanding the foregoing, nothing herein shall impair, as between a Deposi- tary and such holders of beneficial interests, the operation of customary prac- tices governing the exercise of the rights of the Depositary as Holder of any Security. Section 306. Mutilated, Destroyed, Lost and Stolen Securities. If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee or Authenticating Agent shall authenticate and deliver in exchange therefor a new Security of the same series, with a Guarantee duly endorsed thereon, and of like tenor and principal amount and bearing a serial number not contemporaneously outstanding. If there shall be delivered to the Company, the Guarantor and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Secu- rity 33 305,306 and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company, the Guarantor or the Trustee that such Security has been ac- quired by a bona fide purchaser, the Company shall execute and the Trustee or Authenticating Agent shall authenticate and deliver, in lieu of any such de- stroyed, lost or stolen Security, a new Security of the same series, with a Guarantee duly endorsed thereon by the Guarantor, and of like tenor and princi- pal amount and bearing a serial number not contemporaneously outstanding. In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security of the same series, pay such Security. Upon the issuance of any new Security under this Section, the Company may re- quire the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (includ- ing the fees and expenses of the Trustee) connected therewith. Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company guaranteed by the Guarantor, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities and Guarantees of the same series duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the ex- tent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. Section 307. Payment of Interest; Interest Rights Preserved. Except as otherwise provided as contemplated by Section 301 with respect to any series of Securities, interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Se- curities) is registered at the close of business on the Regular Record Date for such interest. Any interest on any Security of a particular series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such 34 306,307 Defaulted Interest may be paid by the Company or the Guarantor, at its elec- tion in each case, as provided in Clause (1) or (2) below: (1) The Company or the Guarantor may elect to make payment of any De- faulted Interest to the Persons in whose names the Securities of such se- ries (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such De- faulted Interest, which shall be fixed in the following manner. The Com- pany or the Guarantor shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Company or the Guarantor, as the case may be, shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for deposit with the Trustee or designated Paying Agent prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company or the Guarantor, as the case may be, of such Special Record Date and, in the name and at the expense of the Company or the Guarantor, as the case may be, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of Securities of such series at his address as it appears in the Security Register, not less than 10 days prior to such Spe- cial Record Date. Notice of the proposed payment of such Defaulted Inter- est and the Special Record Date therefor having been so mailed, such De- faulted Interest shall be paid to the Persons in whose names the Securi- ties of such series (or their respective Predecessor Securities) are reg- istered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following Clause (2). (2) The Company or the Guarantor may make payment of any Defaulted In- terest on the Securities of any series in any other lawful manner not in- consistent with the requirements of any securities exchange on which Secu- rities of such series may be listed, and upon such notice as may be re- quired by such exchange, if, after notice given by the Company or the Guarantor to the Trustee of the proposed payment pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee. 35 307 Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security of the same series shall carry the rights to inter- est accrued and unpaid, and to accrue, which were carried by such other Secu- rity. Section 308. Persons Deemed Owners. Prior to due presentment of a Security for registration of transfer, the Company, the Guarantor, the Trustee and any agent of the Company, the Guaran- tor or the Trustee may treat the Person in whose name such Security is regis- tered as the owner of such Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 307) interest on such Security and for all other purposes whatsoever, whether or not such Secu- rity be overdue, and neither the Company, the Guarantor, the Trustee nor any agent of the Company, the Guarantor or the Trustee shall be affected by notice to the contrary. Section 309. Cancellation. All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surren- dered to any Person other than the Trustee or an Authenticating Agent, be de- livered to the Trustee or an Authenticating Agent and shall be promptly can- celled by it. The Company or the Guarantor may at any time deliver to the Trustee or an Authenticating Agent for cancellation any Securities previously authenticated and delivered hereunder which the Company or the Guarantor may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall be promptly cancelled by the Trustee or an Authenticating Agent. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. The Trustee and any Authenticating Agent shall destroy all cancelled Securities held by it and shall deliver to the Company a certificate with respect to such destruction. Section 310. Computation of Interest. Except as otherwise specified as contemplated by Section 301 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months. 36 307,308,309,310 ARTICLE FOUR Guarantee of Securities Section 401. Unconditional Guarantee. The Guarantor hereby unconditionally guarantees to each Holder of a Security of any series authenticated and delivered by the Trustee or Authenticating Agent the due and punctual payment of the principal of and premium, if any, and interest on such Security and the due and punctual payment of the sinking fund payments, if any, provided for pursuant to the terms of such Security, when and as the same shall become due and payable, whether at maturity, by acceleration or redemption or otherwise, in accordance with the terms of such Security and of this Indenture. In case of the failure of the Company punctually to pay any such principal, premium, interest or sinking fund payment, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at maturity, upon acceleration or redemp- tion or otherwise, and as if such payment were made by the Company. The Guarantor hereby agrees that its obligations hereunder shall be as prin- cipal and not merely as surety, and shall be absolute and unconditional, irre- spective of, and shall be unaffected by, any invalidity, irregularity or unen- forceability of such Security or this Indenture, any failure to enforce the provisions of any such Security or this Indenture, or any waiver, modification, consent or indulgence granted to the Company with respect thereto, by the Holder of such Security or the Trustee, the recovery of any judgment against the Company or any action to enforce the same, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or guaran- tor. The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger, insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to any such Security or the indebtedness evi- denced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged except by payment in full of the principal of and premi- um, if any, and interest on, and any sinking fund payments required with re- spect to, the Securities and the complete performance of all other obligations contained in the Securities. The Guarantor shall be subrogated to all rights of the Holder of any Security against the Company in respect of any amounts paid to such Holder by the Guar- antor pursuant to the provisions of this Guarantee; provided, however, that the Guarantor shall not be entitled to enforce, or to receive any payments arising out of or based upon, such right of subrogation until the principal of and premi- 37 401 um, if any, and interest on, and any sinking fund payments required with re- spect to, all Securities shall have been paid in full. Claims under the Guarantee are, to the extent provided in this Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness of the Guarantor, and the Guarantee is issued subject to the provisions of this Indenture with respect thereto. Each Holder of a Secu- rity upon which the Guarantee is endorsed, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effec- tuate the subordination so provided and (c) appoints the Trustee his attorney- in-fact for any and all such purposes. Section 402. Execution of Guarantees. To evidence its Guarantee to the Holders specified in Section 401, the Guar- antor hereby agrees to execute the Guarantee in substantially the form above recited to be endorsed on each Security authenticated and delivered by the Trustee or Authenticating Agent. Each such Guarantee shall be executed on be- half of the Guarantor and dated as set forth in Section 303 prior to the au- thentication of the Security on which it is endorsed, and the delivery of such Security by the Trustee or Authenticating Agent, after the authentication thereof hereunder, shall constitute due delivery of such Guarantee on behalf of the Guarantor. The Guarantee set forth in this Article shall not be valid or become obliga- tory for any purpose with respect to a Security until the certificate of au- thentication on such Security shall have been signed by the Trustee or Authen- ticating Agent. ARTICLE FIVE Satisfaction and Discharge Section 501. Satisfaction and Discharge of Indenture. This Indenture shall cease to be of further effect (except as to any surviv- ing rights of registration of transfer, exchange or replacement of Securities herein expressly provided for), and the Trustee, on demand of and at the ex- pense of the Company and the Guarantor, shall execute proper instruments ac- knowledging satisfaction and discharge of this Indenture, when (1) either (A) all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been 38 401,402,501 replaced or paid as provided in Section 306 and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or dis- charged from such trust, as provided in Section 1103) have been delivered to the Trustee for cancellation; or (B) all such Securities not theretofore delivered to the Trustee for cancellation (i) have become due and payable, or (ii) will become due and payable at their Stated Maturity within one year, or (iii) are to be called for redemption within one year under ar- rangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company and the Guarantor, and the Company or the Guarantor, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any) and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be; (2) the Company or the Guarantor has paid or caused to be paid all other sums payable hereunder by the Company and the Guarantor; and (3) the Company and the Guarantor have delivered to the Trustee an Offi- cers' Certificate and an Opinion of Counsel, each stating that all condi- tions precedent herein provided for relating to the satisfaction and dis- charge of this Indenture have been complied with. Notwithstanding the satisfaction and discharge of this Indenture, the obliga- tions of the Company and the Guarantor to the Trustee under Section 707, the obligations of the Trustee to any Authenticating Agent under Section 714 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of this Section, the obligations of the Trustee under Section 502 and the last paragraph of Section 1103 shall survive. 39 501 Section 502. Application of Trust Money. Subject to the provisions of the last paragraph of Section 1103, all money deposited with the Trustee pursuant to Section 501 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this In- denture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and inter- est for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except as required by law. ARTICLE SIX Remedies Section 601. Events of Default. "Event of Default," wherever used herein with respect to Securities of any series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be ef- fected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (1) a court or Federal or State regulatory agency having jurisdiction in the premises shall enter a decree or order for relief in respect of the Guarantor or the Bank in an involuntary case under any applicable bank- ruptcy, insolvency or other similar law now or hereafter in effect, or ap- pointing a receiver, liquidator, assignee, custodian, trustee, sequestra- tor (or similar official) of the Guarantor or the Bank or substantially all of such Person's assets (other than appointment of a conservator with respect to the Bank), or ordering the winding up or liquidation of such Person's affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (2) the Guarantor or the Bank shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an invol- untary case under any such law, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or similar official) of the Guarantor or the Bank or sub- stantially all of such Person's assets (other than appointment of a con- servator with respect to the Bank), or shall make any general assignment for the benefit of creditors. 40 502,601 Upon receipt by the Trustee of any Notice of Default pursuant to this Section 601 with respect to Securities of a series all or part of which is represented by a Global Security, a record date shall be established for determining Hold- ers of Outstanding Securities of such series entitled to join in such notice of default, which record date shall be at the close of business on the date the Trustee receives such notice of default. The Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to join in such notice of default, whether or not such Holders remain Holders after such record date; provided, that unless Holders of at least 10% in principal amount of the Outstanding Securities of such series, or their proxies shall have joined in such notice of default prior to the day which is 90 days after such record date, such notice of default shall automatically and without fur- ther action by any Holder be cancelled and of no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from giving, af- ter expiration of such 90-day period, a new notice of default identical to a notice of default which has been cancelled pursuant to the proviso to the pre- ceding sentence, in which event a new record date shall be established pursuant to the provisions of this Section 601. Section 602. Acceleration of Maturity; Rescission and Annulment. If an Event of Default with respect to Securities of any series at the time Outstanding occurs and is continuing, then and in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Se- curities of that series may declare the principal amount (or, if any of the Se- curities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified in the terms there- of), of all of the Securities of that series to be due and payable immediately, by a notice in writing to the Company and the Guarantor (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or specified amount) shall become immediately due and payable. At any time after such a declaration of acceleration with respect to Securi- ties of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Se- curities of that series, by written notice to the Company, the Guarantor and the Trustee, may rescind and annul such declaration and its consequences if (1) the Company or the Guarantor has paid or deposited with the Trustee a sum sufficient to pay (A) all overdue instalments of interest on all Securities of that series, 41 601,602 (B) the principal of (and premium, if any, on) any Securities of that series which have become due otherwise than by such declaration of acceleration and interest thereon at the rate or rates prescribed therefor in such Securities, (C) to the extent that payment of such interest is lawful, interest upon overdue instalments of interest at the rate or rates prescribed therefor in such Securities, and (D) all sums paid or advanced by the Trustee hereunder and the rea- sonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and (2) all Events of Default and Defaults with respect to Securities of that series, other than the non-payment of the principal of Securities of that series which have become due solely by such declaration of accelera- tion, have been cured or waived as provided in Section 613. No such rescission shall affect any subsequent default or impair any right con- sequent thereon. Upon receipt by the Trustee of any written notice declaring such an accelera- tion, or rescission and annulment thereof, with respect to Securities of a se- ries all or part of which is represented by a Global Security, a record date shall be established for determining Holders of Outstanding Securities of such series entitled to join in such notice, which record date shall be at the close of business on the day the Trustee receives such notice. The Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to join in such notice, whether or not such Holders remain Holders af- ter such record date; provided, that unless such declaration of acceleration, or rescission and annulment, as the case may be, shall have become effective by virtue of the requisite percentage having joined in such notice prior to the day which is 90 days after such record date, such notice of declaration of ac- celeration, or rescission and annulment, as the case may be, shall automati- cally and without further action by any Holder be cancelled and of no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of a Hold- er, from giving, after expiration of such 90-day period, a new written notice of declaration of acceleration, or rescission and annulment thereof, as the case may be, that is identical to a written notice which has been cancelled pursuant to the proviso to the preceding sentence, in which event a new record date shall be established pursuant to the provisions of this Section 602. 42 602 Section 603. Collection of Indebtedness and Suits for Enforcement by Trustee. "Default", wherever used herein, means any one of the following events (what- ever the reason for such Default and whether it shall be occasioned by the pro- visions of Article Fourteen or be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (1) default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a pe- riod of 30 days, or (2) default is made in the payment of the principal of any Security at the Maturity thereof, or (3) default is made in the performance of any covenant or a breach oc- curs in any warranty of the Company in this Indenture (other than a cove- nant or warranty a default in whose performance or whose breach is else- where in this Section specifically dealt with or which has expressly been included in this Indenture solely for the benefit of Securities of any se- ries other than that series), and such default or breach continues for a period of 60 days after there has been given, by registered or certified mail, to the Company and the Guarantor by the Trustee or to the Company and the Guarantor and the Trustee by the Holders of at least 25% in prin- cipal amount of the Outstanding Securities of that series, a written no- tice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder. The Company covenants that if any Event of Default or Default under Clause (1) or (2) above shall occur, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holder of such Security, the whole amount then due and payable on such Security for principal (and premium, if any) and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal (and premium, if any) and on any overdue in- terest, at the rate or rates prescribed therefor in such Security, and, in ad- dition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. If the Company or the Guarantor fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and un- paid, 43 603 may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or the Guarantor or any other obligor upon such Secu- rity and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or the Guarantor or any other obligor upon such Security, wherever situated. If an Event of Default or Default with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such se- ries by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific en- forcement of any covenant or agreement in this Indenture or in aid of the exer- cise of any power granted herein, or to enforce any other proper remedy. Section 604. Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bank- ruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company, the Guarantor or any other obligor upon the Securities or the property of the Company, the Guarantor or such other obligor or their creditors, the Trustee shall be entitled and empowered, by interven- tion in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be au- thorized to collect and receive any moneys or other property payable or deliv- erable on any such claims and to distribute the same; and any receiver, assign- ee, custodian, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and ad- vances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 707. No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in re- spect of the claim of any Holder in any such proceeding. Section 605. Trustee May Enforce Claims Without Possession of Securities. All rights of action and claims under this Indenture or the Securities or the Guarantees may be prosecuted and enforced by the Trustee without the posses- 44 603,604,605 sion of any of the Securities or the production thereof in any proceeding re- lating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered. Section 606. Application of Money Collected. Subject to Article Fourteen, any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (or premium, if any) or interest, upon presentation of the Securi- ties and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: First: To the payment of all amounts due the Trustee under Section 707; and Second: To the payment of the amounts then due and unpaid for principal of (and premium, if any) and interest on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal (and premium, if any) and in- terest, respectively. Section 607. Limitation on Suits. No Holder of any Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (1) such Holder has previously given written notice to the Trustee of a continuing Event of Default or Default with respect to the Securities of that series; (2) the Holders of not less than 25% in principal amount of the Out- standing Securities of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default or Default in its own name as Trustee hereunder; (3) such Holder or Holders have offered to the Trustee reasonable indem- nity against the costs, expenses and liabilities to be incurred in compli- ance with such request; 45 605,606,607 (4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities of that series; it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders. Section 608. Unconditional Right of Holders to Receive Principal, Premium and Interest. Notwithstanding any other provision in this Indenture, the Holder of any Se- curity shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and (subject to Section 307) interest on such Security on the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder. Section 609. Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Guarantor, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall con- tinue as though no such proceeding had been instituted. Section 610. Rights and Remedies Cumulative. No right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter 46 607,608,609,610 existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent as- sertion or employment of any other appropriate right or remedy. Section 611. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Securities to ex- ercise any right or remedy accruing upon any Event of Default or Default shall impair any such right or remedy or constitute a waiver of any such Event of De- fault or Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. Section 612. Control by Holders. The Holders of a majority in principal amount of the Outstanding Securities of any series shall have the right to direct the time, method and place of con- ducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such series, provided that (1) such direction shall not be in conflict with any rule of law or with this Indenture, and (2) such direction shall not be unduly prejudicial to the rights of Holders not joining therein nor expose the Trustee to personal liability. (3) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. Upon receipt by the Trustee of any written notice directing the time, method or place of conducting any such proceeding or exercising any such trust or pow- er, with respect to Securities of a series all or part of which is represented by a Global Security, a record date shall be established for determining Hold- ers of Outstanding Securities of such series entitled to join in such notice, which record date shall be at the close of business on the day the Trustee re- ceives such notice. The Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to join in such notice, whether or not such Holders remain Holders after such record date; provided, that unless the Holders of a majority in principal amount of the Outstanding Securities of such series shall have joined in such notice prior to the day which is 90 days after such record date, such notice shall automatically and without further action by any Holder be 47 610,611,612 cancelled and of no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from giving, after expiration of such 90-day period, a new notice identical to a notice which has been cancelled pursuant to the proviso to the preceding sentence, in which event a new record date shall be established pursuant to the provisions of this Section 612. Section 613. Waiver of Past Defaults. The Holders of not less than a majority in principal amount of the Outstand- ing Securities of any series may on behalf of the Holders of all the Securities of such series waive any past default hereunder with respect to the Securities of such series and its consequences, except a default (1) in the payment of the principal of (or premium, if any) or interest on any Security of such series, or (2) in respect of a covenant or provision hereof which under Article Ten cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Persons entitled to waive any past default hereun- der. If a record date is fixed, the Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to waive any de- fault hereunder, whether or not such Holders remain Holders after such record date; provided that unless such majority in principal amount shall have waived such default prior to the date which is 90 days after such record date, any such waiver previously given shall automatically and without further action by any Holder be cancelled and of no further effect. Upon any such waiver, such default shall cease to exist, and any Event of De- fault or Default arising therefrom shall be deemed to have been cured, for ev- ery purpose of this Indenture; but no such waiver shall extend to any subse- quent or other default or impair any right consequent thereon. Section 614. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit, and may assess costs against any such party litigant, in the manner and to the extent provided in the Trust In- denture Act; 48 612,613,614 provided that neither this Section nor the Trust Indenture Act shall be deemed to authorize any court to require such an undertaking or to make such an as- sessment in any suit instituted by the Company or the Guarantor. Section 615. Waiver of Stay or Extension Laws. The Company and the Guarantor covenant (to the extent that they may lawfully do so) that they will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company and the Guarantor (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law and covenant that they will not hin- der, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE SEVEN The Trustee Section 701. Certain Duties and Responsibilities. (a) The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or other- wise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate in- demnity against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Inden- ture relating to the conduct or affecting the liability of or affording pro- tection to the Trustee shall be subject to the provisions of this Section. (b) All indemnifications and releases from liability granted herein to the Trustee shall extend to the directors, officers, employees and agents of the Trustee. Section 702. Notice of Defaults. If a default occurs hereunder with respect to Securities of any series of which a responsible officer of the Trustee has actual knowledge, the Trustee shall give the Holders of Securities of such series notice of such default 49 614,615,701,702 order, bond, debenture, note, other evidence of indebtness or other paper or document, but the Trustee, in its discretion, may make such further in- quiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investiga- tion, it shall be entitled to examine the books, records and premises of the Company and the Guarantor, personally or by agent (including an Au- thenticating Agent) or attorney; provided, that if the payment within a reasonable time to the trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such inquiry on investigation is, in the opinion of the Trustee, not reasonably assured the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such expenses or liabilities as a condition to proceeding; the reasonable expenses of every such examination shall be paid by the Company or, if advanced by the Trustee, shall be re- paid by the Company upon demand; and (g) the 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 Trustee shall not be responsible for any misconduct or negligence on the part of any agent (including any Authenticating Agent) or attorney appointed with due care by it hereunder. Section 704. Not Responsible for Recitals or Issuance of Securities and Guarantees. The recitals contained herein and in the Securities and Guarantees, except the Trustee's certificates of authentication, shall be taken as the statements of the Company or the Guarantor, as the case may be, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. Neither the Trustee nor any Authenticating Agent makes any representations as to the validity or sufficiency of this Indenture or of the Securities or the Guarantees. Neither the Trustee nor any Authenticating Agent shall be account- able for the use or application by the Company or the Guarantor of Securities or the proceeds thereof. Section 705. May Hold Securities. The Trustee, any Paying Agent, any Security Registrar, any Authenticating Agent or any other agent of the Company or the Guarantor, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 708 and 713, may otherwise deal with the Company and the Guarantor with the same rights it would have if it were not Trustee, Paying Agent, Secu- rity Registrar, Authenticating Agent or such other agent. 50 703,704,705 (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, officer's certificate, certifi- cate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company and the Guarantor, personally or by agent (includ- ing an Authenticating Agent) or attorney; provided, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabili- ties likely to be incurred by it in the making of such inquiry or investi- gation is, in the opinion of the Trustee, not reasonably assured the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such expenses or liabili- ties as a condition to proceeding; the reasonable expenses of every such examination shall be paid by the Guarantor and or, if advanced by the Trustee, shall be repaid by the Guarantor Company upon demand; and (g) the 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 Trustee shall not be responsible for any misconduct or negligence on the part of any agent (including any Authenticating Agent) or attorney appointed with due care by it hereunder. Section 704. Not Responsible for Recitals or Issuance of Securities and Guarantees. The recitals contained herein and in the Securities and Guarantees, except the Trustee's certificates of authentication, shall be taken as the statements of the Company or the Guarantor, as the case may be, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. Neither the Trustee nor any Authenticating Agent makes any representations as to the validity or sufficiency of this Indenture or of the Securities or the Guarantees. Neither the Trustee nor any Authenticating Agent shall be account- able for the use or application by the Company or the Guarantor of Securities or the proceeds thereof. Section 705. May Hold Securities. The Trustee, any Paying Agent, any Security Registrar, any Authenticating Agent or any other agent of the Company or the Guarantor, in its individual or 51 703,704,705 any other capacity, may become the owner or pledgee of Securities and, subject to Sections 708 and 713, may otherwise deal with the Company and the Guarantor with the same rights it would have if it were not Trustee, Paying Agent, Secu- rity Registrar, Authenticating Agent or such other agent. Section 706. Money Held in Trust. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as other- wise agreed with the Company or the Guarantor. Section 707. Compensation and Reimbursement. The Company and the Guarantor agree (1) to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents, including any Authenticating Agents, and counsel), except any such expense, disbursement or advance as may be at- tributable to its negligence or bad faith; and (3) to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administra- tion of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the ex- ercise or performance of any of its powers or duties hereunder. As security for the performance of the obligations of the Company and the Guarantor under this Section the Trustee shall have a lien prior to the Securi- ties and Guarantees upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of (and premium, if any) or interest on particular Securities. 52 705,706,707 Section 708. Disqualification; Conflicting Interests. If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provi- sions of, the Trust Indenture Act and this Indenture. Section 709. Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder which shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a com- bined capital and surplus of at least $50,000,000, and subject to supervision or examination by Federal or State authority and having a Corporate Trust Of- fice in the City of Pittsburgh, Pennsylvania or the Borough of Manhattan, The City of New York, New York or Los Angeles, California. If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Sec- tion, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condi- tion so published. If at any time the Trustee shall cease to be eligible in ac- cordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. Section 710. Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Trustee and no appointment of a succes- sor Trustee pursuant to this Article shall become effective until the accept- ance of appointment by the successor Trustee in accordance with the applicable requirements of Section 711. (b) The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company and the Guaran- tor. If the instrument of acceptance by a successor Trustee required by Section 711 shall not have been delivered to the Trustee within 30 days after the giv- ing of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with re- spect to the Securities of such series. (c) The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Out- standing Securities of such series, delivered to the Trustee and to the Company and the Guarantor. 53 708,709,710 (d) If at any time: (1) the Trustee shall fail to comply with Section 708 after written re- quest therefor by the Company or the Guarantor or by any Holder who has been a bona fide Holder of a Security for at least six months, or (2) the Trustee shall cease to be eligible under Section 709 and shall fail to resign after written request therefor by the Company or the Guar- antor or by any such Holder, or (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilita- tion, conservation or liquidation, then, in any such case, (i) the Company or the Guarantor by a Board Resolution may remove the Trustee with respect to all Securities, or (ii) subject to Sec- tion 614, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, peti- tion any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trust- ees. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Se- curities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with re- spect to the Securities of any particular series) and shall comply with the ap- plicable requirements of Section 711. If, within one year after such resigna- tion, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 711, become the suc- cessor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company or the Guarantor. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Guarantor or the Holders and accepted appointment in the manner required 54 710 by Section 711, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the ap- pointment of a successor Trustee with respect to the Securities of such series. (f) The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 106; provided, that failure of the Company to give such notice shall not effect the resigna- tion or removal of such Trustee. Each notice shall include the name of the suc- cessor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office. Section 711. Acceptance of Appointment by Successor. (a) In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, ac- knowledge and deliver to the Company, the Guarantor and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or re- moval of the retiring Trustee shall become effective and such successor Trust- ee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the re- quest of the Company, the Guarantor or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder, subject nevertheless to its lien, if any, provided for in Section 707. (b) In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the Guaran- tor, the retiring Trustee and each successor Trustee with respect to the Secu- rities of one or more series shall execute and deliver an indenture supplemen- tal hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securi- ties of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to the Secu- rities of all series for which it is the Trustee hereunder, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of 55 710,711 the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the adminis- tration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall be- come vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the ap- pointment of such successor Trustee relates; but, on request of the Company, the Guarantor or any successor Trustee, such retiring Trustee shall duly as- sign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates. (c) Upon request of any such successor Trustee, the Company and the Guarantor shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts re- ferred to in paragraph (a) or (b) of this Section, as the case may be. (d) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. Section 712. Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any cor- poration succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, with- out the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, con- version or consolidation to such authenticating Trustee may adopt such authen- tication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. 56 711,712 ARTICLE EIGHT Holders' Lists and Reports by Trustee, Company and Guarantor Section 801. Company and Guarantor to Furnish Trustee Names and Addresses of Holders. The Company and the Guarantor will furnish or cause to be furnished to the Trustee (a) semi-annually, either (i) not later than July 15 and January 15 in each year in the case of Original Issue Discount Securities of any series which by their terms bear interest only after Maturity, or (ii) not more than 15 days after each Regular Record Date in the case of Securities of any other series, a list for each such series, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Secu- rities of such series as of the preceding June 30 or December 31 or as of such Regular Record Date, as the case may be, and (b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company or the Guarantor of any such re- quest, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished, excluding from any such list names and addresses received by the Trustee in its capacity as Security Registrar. Section 802. Preservation of Information; Communications to Holders. (a) The Trustee shall preserve, in as current a form as is reasonably prac- ticable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 801. The Trustee may destroy any list furnished to it as provided in Section 801 upon receipt of a new list so furnished. (b) The rights of the Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corre- sponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act. (c) Every Holder of Securities, by receiving and holding the same, agrees with the Company, the Guarantor and the Trustee that neither the Company, the Guarantor nor the Trustee nor any agent of either of them shall be held ac- countable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act. 57 801,802 corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent without the execution or filing of any paper or any fur- ther act on the part of the Trustee or the Authenticating Agent. An Authenticating Agent may at any time resign by giving written notice of resignation to the Trustee and to the Company and the Guarantor. The Trustee may at any time terminate the agency of an Authenticating Agent by giving writ- ten notice of termination to such Authenticating Agent and to the Company and the Guarantor. Upon receiving such a notice of resignation or upon such a ter- mination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may ap- point a successor Authenticating Agent which shall be acceptable to the Company and the Guarantor and shall mail notice of such appointment to all Holders of Securities of the series with respect to which such Authenticating Agent will serve, as their names and addresses appear on the Security Register. Any suc- cessor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereun- der, with like effect as if originally named as an Authenticating Agent herein. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section. The Trustee agrees to pay to each Authenticating Agent from time to time rea- sonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed for such payments, in accordance with the provi- sions of Section 707. ARTICLE EIGHT Holders' Lists and Reports by Trustee, Company and Guarantor Section 801. Company and Guarantor to Furnish Trustee Names and Addresses of Holders. The Company and the Guarantor will furnish or cause to be furnished to the Trustee (a) semi-annually, either (i) not later than July 15 and January 15 in each year in the case of Original Issue Discount Securities of any series which by their terms bear interest only after Maturity, or (ii) not more than 15 days after each Regular Record Date in the case of Securities of any other series, a list for each such series, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Secu- rities of such series as of the preceding June 30 or December 31 or as of such Regular Record Date, as the case may be, and 58 714,801 (b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company or the Guarantor of any such re- quest, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished, excluding from any such list names and addresses received by the Trustee in its capacity as Security Registrar. Section 802. Preservation of Information; Communications to Holders. (a) The Trustee shall preserve, in as current a form as is reasonably practi- cable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 801. The Trustee may destroy any list furnished to it as provided in Section 801 upon receipt of a new list so furnished. (b) The rights of the Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corre- sponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act. (c) Every Holder of Securities, by receiving and holding the same, agrees with the Company, the Guarantor and the Trustee that neither the Company, the Guarantor nor the Trustee nor any agent of either of them shall be held ac- countable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act. Section 803. Reports by Trustee. (a) The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto. (b) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which any Secu- rities are listed, with the Commission and with the Company and the Guarantor. The Company or the Guarantor will notify the Trustee when any Securities are listed on any stock exchange. Section 804. Reports by Company and Guarantor. The Company and the Guarantor shall file with the Trustee and the Commission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trust Indenture 59 802,803,804 Act at the times and in the manner provided pursuant to such Act; provided that any such information, documents or reports required to be filed with the Com- mission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be filed with the Trustee within 15 days after the same is so required to be filed with the Commission. ARTICLE NINE Consolidation, Merger and Sale Section 901. Company May Consolidate, Etc., Only on Certain Terms. Nothing contained in this Indenture or in any of the Securities or Guarantees shall prevent any consolidation or merger of the Company with or into any other corporation or corporations (whether or not affiliated with the Company), or successive consolidations or mergers in which the Company or its successor or successors shall be a party or parties, or shall prevent any conveyance, trans- fer or lease of the property of the Company as an entirety or substantially as an entirety, to any other corporation (whether or not affiliated with the Com- pany) authorized to acquire and operate the same; provided, however, that: (1) in case the Company shall consolidate with or merge into another corporation or convey, transfer or lease its properties and assets sub- stantially as an entirety to any Person, the corporation formed by such consolidation or into which the Company is merged or the Person which ac- quires by conveyance or transfer, or which leases, the properties and as- sets of the Company substantially as an entirety shall be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an indenture (or indentures, if at such time there is more than one Trust- ee) supplemental hereto, executed and delivered by the successor corpora- tion and the Guarantor to the Trustee, in form satisfactory to the Trust- ee, the due and punctual payment of the principal of (and premium, if any) and interest on all the Securities and the performance of every covenant of this Indenture on the part of the Company to be performed or observed; (2) immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Company or a Subsidiary as a result of such transaction as having been incurred by the Company or such Subsidiary at the time of such transaction, no Event of Default, and no event (including, without limitation, default under Section 1107) which, after notice or lapse of time or both, would become an Event of De- fault or Default, shall have happened and be continuing; 60 804,901 (3) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and such supplemental indenture comply with this Article and that all conditions precedent herein provided for relat- ing to such transaction have been complied with; and (4) the Guarantor has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that the Guarantees remain in full force and effect. Section 902. Successor Corporation Substituted for Company. Upon any consolidation or merger or any conveyance, transfer or lease of the properties and assets of the Company substantially as an entirety to any Person in accordance with Section 901, the successor corporation formed by such con- solidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may ex- ercise every right and power of, the Company under this Indenture with the same effect as if such successor corporation had been named as the Company herein, and thereafter, except in the case of a lease to another Person, the predeces- sor corporation shall be relieved of all obligations and covenants under this Indenture and the Securities. Section 903. Guarantor May Consolidate, Etc., Only on Certain Terms. Nothing contained in this Indenture or in any of the Securities or Guarantees shall prevent any consolidation or merger of the Guarantor with or into any other corporation or corporations (whether or not affiliated with the Guaran- tor), or successive consolidations or mergers in which the Guarantor or its successor or successors shall be a party or parties, or shall prevent any con- veyance, transfer or lease of the property of the Guarantor as an entirety or substantially as an entirety, to any other corporation (whether or not affili- ated with the Guarantor) authorized to acquire and operate the same; provided, however, that (1) in case the Guarantor shall consolidate with or merge into another corporation or convey, transfer or lease its properties and assets sub- stantially as an entirety to any Person, the corporation formed by such consolidation or into which the Guarantor is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Guarantor substantially as an entirety shall be a corpora- tion organized and existing under the laws of the United States of Ameri- ca, any State thereof or the District of Columbia and shall expressly as- sume, by an indenture (or 61 902,903 indentures, if at such time there is more than one Trustee) supplemental hereto, executed and delivered by the Guarantor and the Company to the Trustee, in form satisfactory to the Trustee, the Guarantees endorsed on the Securities and the performance of every covenant of this Indenture on the part of the Guarantor to be performed or observed; (2) immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Guarantor or a Subsidiary as a result of such transaction as having been incurred by the Guarantor or such Subsidiary at the time of such transaction, no Event of Default or Default, and no event which, after notice or lapse of time or both, would become an Event of Default or Default, shall have happened and be continu- ing; and (3) the Guarantor has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and such supplemental indenture comply with this Article and that all conditions precedent herein provided for relat- ing to such transaction have been complied with. Section 904. Successor Corporation Substituted for Guarantor. Upon any consolidation or merger or any conveyance, transfer or lease of the properties and assets of the Guarantor substantially as an entirety to any Per- son in accordance with Section 903, the successor corporation formed by such consolidation or into which the Guarantor is merged or to which such convey- ance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Guarantor under this Indenture with the same effect as if such successor corporation had been named as the Guaran- tor herein, and thereafter, except in the case of a lease to another Person, the predecessor corporation shall be relieved of all obligations and covenants under this Indenture and the Guarantees. Section 905. Assumption by Guarantor. The Guarantor, or a Subsidiary thereof, may directly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfac- tory to the Trustee, the due and punctual payment of the principal of (and pre- mium, if any) and interest on all the Securities and the performance of every covenant of this Indenture on the part of the Company to be performed or ob- served. Upon any such assumption, the Guarantor or such Subsidiary shall suc- ceed to, and be substituted for and may exercise every right and power of, the 62 903,904,905 Company under this Indenture with the same effect as if the Guarantor or such Subsidiary had been named as the Company herein and the Company shall be re- leased from its liability as obligor on the Securities. No such assumption shall be permitted unless the Guarantor has delivered to the Trustee an Offi- cers' Certificate and an Opinion of Counsel, each stating that such assumption and supplemental indenture comply with this Article, and that all conditions precedent herein provided for relating to such transaction have been complied with and that, in the event of assumption by a Subsidiary, the Guarantees re- main in full force and effect. ARTICLE TEN Supplemental Indentures Section 1001. Supplemental Indentures Without Consent of Holders. Without the consent of any Holders, the Company and the Guarantor, when au- thorized by Board Resolutions, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satis- factory to the Trustee, for any of the following purposes: (1) to evidence the succession of another Person to the Company or the Guarantor and the assumption by any such successor of the covenants of the Company or the Guarantor herein and in the Securities or the Guarantees; or (2) to add to the covenants of the Company or the Guarantor for the ben- efit of the Holders of all or any series of Securities (and if such cove- nants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein con- ferred upon the Company or the Guarantor; or (3) to add any additional Events of Default or Defaults; or (4) to add to or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Secu- rities in bearer form, registrable or not registrable as to principal, and with or without interest coupons; or (5) to add to, change or eliminate any of the provisions of this Inden- ture in respect of one or more series of Securities, provided that any such 63 905,1001 addition, change or elimination (i) shall neither (A) apply to any Secu- rity of any series created prior to the execution of such supplemental in- denture and entitled to the benefit of such provision nor (B) modify the rights of the Holder of any such Security with respect to such provision or (ii) shall become effective only when there is no such Security Out- standing; or (6) to establish the form or terms of Securities of any series or the form of Guarantees relating thereto as permitted by Sections 201 and 301; or (7) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more se- ries and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 711(b); (8) to cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, provided that such action pursuant to this Clause (8) shall not adversely affect the interests of the Holders of Securities of any series in any material respect; or (9) to effect assumption by the Guarantor or a Subsidiary thereof pursu- ant to Section 905. Section 1002. Supplemental Indentures With Consent of Holders. With the consent of the Holders of not less than 66 2/3% in principal amount of the Outstanding Securities of each series affected by such supplemental in- denture, by Act of said Holders delivered to the Company, the Guarantor and the Trustee, the Company and the Guarantor, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or elimi- nating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the con- sent of the Holder of each Outstanding Security affected thereby, (1) change the Stated Maturity of the principal of, or any instalment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon (including any change in the Floating or Adjustable Rate Provision pursuant to which such rate is de- termined that 64 1001,1002 would reduce such rate for any period) or any premium payable upon the re- demption thereof, or reduce the amount of the principal of an Original Is- sue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 602, or change any Place of Payment where, or the coin or currency in which, any Security or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or modify the provisions of this Indenture with respect to the subordination of the Securities and the Guarantees in a manner ad- verse to the Holders, or (2) reduce the percentage in principal amount of the Outstanding Securi- ties of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or (3) modify any of the provisions of this Section, Section 613 or Section 1107, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby; provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to "the Trustee" and concomitant changes in this Section and Article Eleven, or the deletion of this proviso, in accordance with the requirements of Sec- tions 711(b) and 1001(7), or (4) modify or affect in any manner adverse to the Holders the terms and conditions of the obligation of the Guarantor in respect of the due and punctual payment of the principal of, premium, if any, or interest or sinking fund payments, if any, on the Securities. A supplemental indenture which changes or eliminates any covenant or other pro- vision of this Indenture which has expressly been included solely for the bene- fit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such cove- nant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Persons entitled to consent to any indenture supple- 65 1002 mental hereto. If a record date is fixed, the Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to con- sent to such supplemental indenture, whether or not such Holders remain Holders after such record date; provided, that unless such consent shall have become effective by virtue of the requisite percentage having been obtained prior to the date which is 90 days after such record date, any such consent previously given shall automatically and without further action by any Holder be cancelled and of no further effect. It shall not be necessary for any Act of Holders under this Section to ap- prove the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. Section 1003. Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (sub- ject to Section 701) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. Section 1004. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this In- denture shall be modified in accordance therewith, and such supplemental inden- ture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. Section 1005. Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act. Section 1006. Reference in Securities to Supplemental Indentures. Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any mat- ter provided for in such supplemental indenture. If the Company or the Guaran- tor 66 1002,1003,1004,1005,1006 shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Boards of Directors of the Company and the Guarantor, to any such supplemental indenture may be prepared and executed by the Company, with the Guarantee of the Guarantor endorsed thereon, and authen- ticated and delivered by the Trustee in exchange for Outstanding Securities of such series. ARTICLE ELEVEN Covenants Section 1101. Payment of Principal, Premium and Interest. The Company covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of (and premium, if any) and interest on the Securities of that series in accordance with the terms of the Securities of such series and this Indenture. Section 1102. Maintenance of Office or Agency. The Company or the Guarantor will maintain in each Place of Payment for any series of Securities an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange and where notices and de- mands to or upon the Company or the Guarantor in respect of the Securities of that series and the Guarantees relating thereto and this Indenture may be served; provided, however, that at the option of the Company payment of inter- est may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register. With respect to the Se- curities of any series, such office or agency and each Place of Payment shall be as specified as contemplated by Section 301. In the absence of any such pro- visions with respect to the Securities of any series, (i) the Places of Payment for such Securities shall be the City of Pittsburgh, Pennsylvania and the Bor- ough of Manhattan, The City of New York (except that as to payment of interest the City of Pittsburgh, Pennsylvania shall be the only Place of Payment) and (ii) such office or agency for payment for Securities of such series shall ini- tially be the principal office of the Bank in the City of Pittsburgh, Pennsyl- vania and, with respect to principal (and premium, if any) only, the Trustee's agent office in the Borough of Manhattan, The City of New York, and such office or agency for surrender for registration of transfer or exchange of and for service of notices and demands in respect of Securities of such series shall initially be the principal office of the 67 1006,1101,1102 Bank in the City of Pittsburgh, Pennsylvania and the Bank's facility in the Borough of Manhattan, The City of New York. The Company and the Guarantor will give prompt written notice to the Trustee of the location, and any change in the location, of any such office or agency. If at any time the Company and the Guarantor shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, sur- renders, notices and demands may be made or served at the Corporate Trust Of- fice of the Trustee, and the Company and the Guarantor each hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands. The Company and the Guarantor may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company or the Guarantor of its ob- ligation to maintain an office or agency in each Place of Payment for Securi- ties of any series for such purposes. The Company and the Guarantor will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. Section 1103. Money for Securities Payments to Be Held in Trust. If the Company shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of (and premium, if any) or interest on any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or interest so becom- ing due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or fail- ure so to act. Whenever the Company shall have one or more Paying Agents for any series of Securities, it will, prior to each due date of the principal of (and premium, if any) or interest on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act and (unless such Paying Agent is the Trustee) the Com- pany will promptly notify the Trustee of its action or failure so to act. The Company will cause each Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will (i) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent and (ii) during the contin- 68 1102,1103 uance of any default by the Company or the Guarantor (or any other obligor upon the Securities of that series) in the making of any payment in respect of the Securities of that series, and upon the written request of the Trustee, forth- with pay to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Securities of that series. The Company or the Guarantor may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order or Guarantor Order, as the case may be, direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Pay- ing Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be re- leased from all further liability with respect to such money. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (and premium, if any) or interest on any Security of any series and remaining unclaimed for three years after such principal (and premium, if any) or interest has become due and pay- able shall be paid to the Company on Company Request (or if deposited by the Guarantor, paid to the Guarantor on Guarantor Request), or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company and the Guarantor for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of gen- eral circulation in the Borough of Manhattan, The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company or the Guar- antor, as the case may be. Section 1104. Corporate Existence. Subject to Article Nine, the Company and the Guarantor will do or cause to be done all things necessary to preserve and keep in full force and effect their respective corporate existences and that of the Bank and their respective rights (charter and statutory) and franchises and those of the Bank; provided, however, that neither the Company, the Guarantor, nor the Bank shall be re- quired to 69 1103,1104 preserve any such right or franchise if the Company, the Guarantor or the Bank, as the case may be, shall determine that the preservation thereof is no longer desirable in the conduct of its business and that the loss thereof is not dis- advantageous in any material respect to the Holders. Section 1105. Company Statement as to Compliance. The Company will deliver to the Trustee, within 120 days after the end of each fiscal year, a written statement, which need not comply with Section 102, signed by the Chairman of the Board, a Vice Chairman, the President or a Vice President and by the Treasurer or an Assistant Treasurer of the Company, stat- ing, as to each signer thereof, that (1) a review of the activities of the Company during such year and of performance under this Indenture has been made under his supervision, and (2) to the best of his knowledge, based on such review, (a) the Company has fulfilled all its obligations under this Indenture throughout such year, or, if there has been a default in the fulfillment of any such obli- gation, specifying each such default known to him and the nature and sta- tus thereof, and (b) no event has occurred and is continuing which is, or after notice or lapse of time or both would become, an Event of Default under Section 601, or a Default under Section 603, or, if such an event has occurred and is continuing, specifying each such event known to him and the nature and status thereof. Section 1106. Guarantor Statement as to Compliance. The Guarantor will deliver to the Trustee, within 120 days after the end of each fiscal year, a written statement, which need not comply with Section 102, signed by the Chairman of the Board, a Vice Chairman, the President or a Vice President and by the Treasurer or an Assistant Treasurer of the Guarantor, stating, as to each signer thereof, that (1) a review of the activities of the Guarantor during such year and of performance under this Indenture has been made under his supervision, and (2) to the best of his knowledge, based on such review, (a) the Guaran- tor has fulfilled all its obligations under this Indenture throughout such year, or, if there has been a default in the fulfillment of any such obli- gation, specifying each such default known to him and the nature and sta- tus thereof, and (b) no event has occurred and is continuing which is, or after notice or lapse of time or both would become, an Event of Default under Section 601, 70 1104,1105,1106 or a Default under Section 603 or, if such an event has occurred and is continuing, specifying each such event known to him and the nature and status thereof. Section 1107. Limitation Upon Disposition of Voting Stock of Company. So long as any of the Securities shall be Outstanding, but subject to the provisions of Article Nine, the Guarantor will not sell, assign, transfer, grant a security interest in or otherwise dispose of any shares of, securities convertible into or options, warrants or rights to subscribe for or purchase shares of, Voting Stock of the Company, nor will it permit the Company (or any successor thereto) (a) to issue, except to the Guarantor, any shares of, secu- rities convertible into or options, warrants or rights to subscribe for or pur- chase shares of, Voting Stock of the Company, (b) to merge or consolidate with another Person, other than the Guarantor, or (c) to sell, assign, transfer, grant a security interest in or otherwise dispose of or lease all or substan- tially all of the assets of the Company. Section 1108. Waiver of Certain Covenants. The Company or the Guarantor, as the case may be, may omit in any particular instance to comply with any covenant or condition set forth in Sections 1104 and 1107 with respect to the Securities of any series if before the time for such compliance the Holders of at least 66 2/3% in principal amount of the Out- standing Securities of such series shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such cove- nant or condition, but no such waiver shall extend to or affect such covenant or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the Guarantor and the duties of the Trustee in respect of any such covenant or condition shall remain in full force and effect. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Persons entitled to waive any such term, provision or condition. If a record date is fixed, the Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to waive any such term, provision or condition hereunder, whether or not such Holders remain Holders after such record date; provided, that unless the Hold- ers of at least 66 2/3% in principal amount of the Outstanding securities of such series shall have waived such term, provision or condition prior to the date which is 90 days after such record date, any such waiver previously given shall automatically and without further action by any Holder be cancelled and of no further effect. 71 1106,1107,1108 ARTICLE TWELVE Redemption of Securities Section 1201. Applicability of Article. Securities of any series which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for Securities of any series) in ac- cordance with this Article. Section 1202. Election to Redeem; Notice to Trustee. The election of the Company to redeem any Securities of any series pursuant to Section 1201 shall be evidenced by a Board Resolution. In case of any re- demption at the election of the Company of less than all the Securities of any series, the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Securi- ties of such series to be redeemed and, if applicable, of the tenor of the Se- curities to be redeemed. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers' Certificate evidencing compliance with such restric- tion. Section 1203. Selection by Security Registrar of Securities to Be Redeemed. If less than all the Securities of any series are to be redeemed, the Company and the Guarantor shall cause the particular Securities of such series to be redeemed to be selected not more than 60 days prior to the Redemption Date by the Security Registrar, from the Outstanding Securities of such series not pre- viously called for redemption, at random or by such method as the Security Reg- istrar shall deem fair and appropriate, and which may provide for the selection for redemption of portions (equal to the minimum authorized denomination for Securities of that series or any integral multiple thereof) of the principal amount of Securities of such series of a denomination larger than the minimum authorized denomination for Securities of that series. The Company and the Guarantor shall cause the Security Registrar promptly to notify the Company and the Trustee in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed. 72 1201,1202,1203 For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed. Section 1204. Notice of Redemption. Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his address appearing in the Secu- rity Register. All notices of redemption shall state: (1) the Redemption Date, (2) the Redemption Price, (3) if less than all the Outstanding Securities of any series are to be redeemed, the identification (and, in the case of partial redemption of any Securities, the principal amounts) of the particular Securities of such series to be redeemed, from the Holder to whom such notice is given, (4) that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date, (5) the place or places where such Securities are to be surrendered for payment of the Redemption Price, and (6) that the redemption is for a sinking fund, if such is the case. Notice of redemption of Securities to be redeemed at the election of the Com- pany shall be given by the Company or, at the Company's request, by the Secu- rity Registrar in the name and at the expense of the Company. Section 1205. Deposit of Redemption Price. Prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, seg- regate and hold in trust as provided in Section 1103) an amount of money suffi- cient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities of the particular series or portions thereof which are to be redeemed on that date. 73 1203,1204,1205 Section 1206. Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemp- tion Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest to the Re- demption Date; provided, however, that, unless otherwise specified as contem- plated by Section 301, instalments of interest whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securi- ties, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provi- sions of Section 307. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, subject to Section 113, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security. Section 1207. Securities Redeemed in Part. Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series and of like tenor, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered. If a Global Security is so surrendered, such new Security so issued shall be a new Global Security. ARTICLE THIRTEEN Sinking Funds Section 1301. Applicability of Article. The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of a series except as otherwise specified as con- templated by Section 301 for Securities of such series. 74 1206,1207,1301 The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a "mandatory sinking fund payment", and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an "optional sinking fund payment". If provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 1302. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series. Section 1302. Satisfaction of Sinking Fund Payments with Securities. The Company (1) may deliver to the Trustee for cancellation Outstanding Secu- rities of a series (other than any previously called for redemption) and (2) may apply as a credit Securities of a series which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of such Securities as provided for by the terms of such Securities; provided that such Securities have not been previ- ously so credited. Such Securities shall be received and credited for such pur- pose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. Section 1303. Redemption of Securities for Sinking Fund. Not less than 75 days prior to each sinking fund payment date for any series of Securities, the Company will deliver to the Trustee an Officers' Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of that series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities of that series pursuant to Section 1302 and will also deliver to the Trustee any Securities to be so de- livered if not theretofor delivered. Not less than 60 days before each such sinking fund payment date the Company and the Guarantor shall cause to be se- lected the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 1203 and shall cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 1204. The Company shall deposit the amount of cash, if any, required for such sinking fund payment with the Trustee or a Paying Agent in the manner 75 1301,1302,1303 provided in Section 1205. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sec- tions 1206 and 1207. ARTICLE FOURTEEN Subordination of Securities and Guarantees Section 1401. Securities Subordinate to Senior Indebtedness of the Company. The Company covenants and agrees that anything in this Indenture or the Secu- rities of any series to the contrary notwithstanding, the indebtedness evi- denced by the Securities of each series is subordinate and junior in right of payment to all Senior Indebtedness of the Company to the extent provided here- in, and each Holder of Securities of each series, by his acceptance thereof, likewise covenants and agrees to the subordination herein provided and shall be bound by the provisions hereof. Senior Indebtedness of the Company shall con- tinue to be Senior Indebtedness of the Company and entitled to the benefits of these subordination provisions irrespective of any amendment, modification or waiver of any term of the Senior Indebtedness of the Company or extension or renewal of the Senior Indebtedness of the Company. In the event that the Company shall default in the payment of any principal of (or premium, if any) or interest on any Senior Indebtedness of the Company when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise, then, upon written notice of such default to the Company by the holders of Senior Indebtedness or any trustee therefor, unless and until such default shall have been cured or waived or shall have ceased to exist, no direct or indirect payment (in cash, proper- ty, securities, by set-off or otherwise) shall be made or agreed to be made on account of the principal of or interest on any of the Securities, or in respect of any redemption, retirement, purchase or other acquisition of any of the Se- curities. In the event of (a) any insolvency, bankruptcy, receivership, liquidation, reorganiza- tion, readjustment, composition or other similar proceeding relating to the Company, its creditors or its property, (b) any proceeding for the liquidation, dissolution or other winding up of the Company, voluntary or involuntary, whether or not involving insol- vency or bankruptcy proceedings, (c) any assignment by the Company for the benefit of creditors, or (d) any other marshalling of the assets of the Company, 76 1303,1401 all Senior Indebtedness of the Company (including any interest thereon accruing after the commencement of any such proceedings) shall first be paid in full be- fore any payment or distribution, whether in cash, securities or other proper- ty, shall be made to any Holder of any of the Securities on account thereof. Any payment or distribution, whether in cash, securities or other property (other than securities of the Company or any other corporation provided for by a plan of reorganization or readjustment the payment of which is subordinate, at least to the extent provided in these subordination provisions with respect to the indebtedness evidenced by the Securities, to the payment of all Senior Indebtedness of the Company at the time outstanding and to any securities is- sued in respect thereof under any such plan of reorganization or readjustment), which would otherwise (but for these subordination provisions) be payable or deliverable in respect of the Securities of any series shall be paid or deliv- ered directly to the holders of Senior Indebtedness of the Company in accor- dance with the priorities then existing among such holders until all Senior In- debtedness of the Company (including any interest thereon accruing after the commencement of any such proceedings) shall have been paid in full. In the event that, notwithstanding the foregoing, any payment or distribution of any character or any security, whether in cash, securities or other property (other than securities of the Company or any other corporation provided for by a plan of reorganization or readjustment the payment of which are subordinate, at least to the extent provided in these subordination provisions with respect to the indebtedness evidenced by the Securities, to the payment of all Senior Indebtedness of the Company at the time outstanding and to any securities is- sued in respect thereof under any such plan of reorganization or readjustment), shall be received by the Trustee or any Holder in contravention of any of the terms hereof such payment or distribution or security shall be received in trust for the benefit of, and shall be paid over or delivered and transferred to, the holders of the Senior Indebtedness of the Company at the time outstand- ing in accordance with the priorities then existing among such holders for ap- plication to the payment of all Senior Indebtedness of the Company remaining unpaid, to the extent necessary to pay all such Senior Indebtedness of the Com- pany in full. In the event of the failure of the Trustee or any Holder to en- dorse or assign any such payment, distribution or security, each holder of Se- nior Indebtedness of the Company is hereby irrevocably authorized to endorse or assign the same. No present or future holder of any Senior Indebtedness of the Company shall be predjudiced in the right to enforce subordination of the indebtedness evi- denced by the Securities by any act or failure to act on the part of the Compa- ny. Nothing contained herein shall impair, as between the Company and the Hold- ers of Securities of each series, the obligation of the Company to pay to such 77 1401 Holders the principal of and interest on such Securities or prevent the Trustee or the Holder from exercising all rights, powers and remedies otherwise permit- ted by applicable law or hereunder upon a Default or Event of Default hereun- der, all subject to the rights of the holders of the Senior Indebtedness of the Company to receive cash, securities or other property otherwise payable or de- liverable to the Holders. Senior Indebtedness of the Company shall not be deemed to have been paid in full unless the holders thereof shall have received cash, securities or other property equal to the amount of such Senior Indebtedness of the Company then outstanding. Upon the payment in full of all Senior Indebtedness of the Compa- ny, the Holders of Securities of each series shall be subrogated to all rights of any holders of Senior Indebtedness of the Company to receive any further payments or distributions applicable to the Senior Indebtedness of the Company until the indebtedness evidenced by the Securities of such series shall have been paid in full, and such payments or distributions received by such Holders, by reason of such subrogation, of cash, securities or other property which oth- erwise would be paid or distributed to the holders of Senior Indebtedness of the Company, shall, as between the Company and its creditors other than the holders of Senior Indebtedness of the Company, on the one hand, and such Hold- ers, on the other hand, be deemed to be a payment by the Company on account of Senior Indebtedness of the Company, and not on account of the Securities of such series. The Trustee and Holders will take such action (including, without limitation, the delivery of this Indenture to an agent for the holders of Senior Indebted- ness of the Company or consent to the filing of a financing statement with re- spect thereto) as may, in the opinion of counsel designated by the holders of a majority in principal amount of the Senior Indebtedness of the Company at the time outstanding, be necessary or appropriate to assure the effectiveness of the subordination effected by these provisions. Section 1402. Guarantees Subordinate to Senior Indebtedness of the Guarantor. The Guarantor covenants and agrees that, anything in this Indenture, the Se- curities or the Guarantees to the contrary notwithstanding, the obligations of the Guarantor under the Guarantees relating to payment of principal of and in- terest on the Securities are subordinate and junior in right of payment to all Senior Indebtedness of the Guarantor to the extent provided herein, and each Holder, by his acceptance thereof, likewise covenants and agrees to the subor- dination herein provided and shall be bound by the provisions hereof. Senior Indebtedness of the Guarantor shall continue to be Senior Indebtedness of the Guarantor and entitled to the benefits of these subordination provisions irre- spective of any amendment, modification or waiver of any term of the Senior 78 1401,1402 time outstanding, be necessary or appropriate to assure the effectiveness of the subordination effected by these provisions. Section 1403. Trustee and Holders of Securities May Rely on Certificate of Liquidating Agent; Trustee May Require Further Evidence as to Ownership of Senior Indebtedness; Trustee Not Fiduciary to Holders of Senior Indebtedness. Upon any payment or distribution of assets of the Company or the Guarantor referred to in this Article Fourteen, the Trustee and the Holders shall be en- titled to rely upon an order or decree made by any court of competent juris- diction in which such dissolution or winding up or liquidation or reorganiza- tion or arrangement proceedings are pending or upon a certificate of the trustee in bankruptcy, receiver, assignee for the benefit of creditors or other person making such payment or distribution, delivered to the Trustee or to the Holders, for the purpose of ascertaining the persons entitled to par- ticipate in such distribution, the holders of the Senior Indebtedness and other indebtedness of the Company, the Senior Indebtedness and other indebted- ness of the Guarantor, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article Fourteen. In the absence of any such bankruptcy trustee, re- ceiver, assignee or other person, the Trustee shall be entitled to rely upon a written notice by a Person representing himself to be a holder of Senior In- debtedness of the Company or the Guarantor (or a trustee or representative on behalf of such Holder) as evidence that such Person is a holder of such Senior Indebtedness (or is such a trustee or representative). In the event that the Trustee determines, in good faith, that further evidence is required with re- spect to the right of any person as a holder of Senior Indebtedness of the Company or Senior Indebtedness of the Guarantor to participate in any payments or distributions pursuant to this Article Fourteen, the Trustee may request such person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness of the Company or Senior Indebtedness of the Guarantor, as the case may be, held by such person, as to the extent to which such person is entitled to participate in such payment or distribution, and as to other facts pertinent to the rights of such person under this Arti- cle Fourteen, and if such evidence is not furnished, the Trustee may offer any payment to such person pending judicial determination as to the right of such person to receive such payment. The Trustee, however, shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness of the Company or Senior Indebtedness of the Guarantor. Section 1404. Payment Permitted If No Default. Nothing contained in this Article Fourteen or elsewhere in this Indenture, or in any of the Securities or the Guarantees, shall prevent (a) the Company, at 79 1402,1403,1404 In the event that, notwithstanding the foregoing, any payment or distribution under the Guarantees of any character or any security, whether in cash, securi- ties or other property (other than securities of the Guarantor or any other corporation provided for by a plan of reorganization or readjustment the pay- ment of which is subordinate, at least to the extent provided in these subordi- nation provisions with respect to the Guarantees, to the payment of all Senior Indebtedness of the Guarantor at the time outstanding and to any securities is- sued in respect thereto under any such plan of reorganization or readjustment), shall be received by the Trustee or any Holder of any of the Securities in con- travention of any of the terms hereof, such payment or distribution or security shall be received in trust for the benefit of, and shall be paid over or deliv- ered and transferred to, the holders of the Senior Indebtedness of the Guaran- tor at the time outstanding in accordance with the priorities then existing among such holders for application to the extent necessary to pay all such Se- nior Indebtedness of the Guarantor in full. In the event of the failure of the Trustee or any Holder to endorse or assign any such payment, distribution or security, each holder of Senior Indebtedness of the Guarantor is hereby irrevo- cably authorized to endorse or assign the same. No present or future holder of any Senior Indebtedness of the Guarantor shall be prejudiced in the right to enforce subordination of the Guarantees by any act or failure to act on the part of the Guarantor. Nothing contained herein shall impair, as between the Guarantor and the Holders, the obligation of the Guarantor under the Guarantees, which is absolute and unconditional, to pay to the Holders of Securities of each series the principal of and interest on the Securities of such series, as and when the same shall become due and payable, or prevent the Trustee or the Holders of Securities of such series from exer- cising all rights, powers and remedies otherwise permitted by applicable law or hereunder upon a Default or Event of Default hereunder, all subject to the rights of the holders of the Senior Indebtedness of the Guarantor to receive cash, securities or other property otherwise payable or deliverable under the Guarantees to such Holders. Senior Indebtedness of the Guarantor shall not be deemed to have been paid in full unless the holders thereof shall have received cash, securities or other property equal to the amount of such Senior Indebtedness of the Guarantor then outstanding. Upon the payment in full of all Senior Indebtedness of the Guaran- tor, the Trustee and the Holders of Securities of each series shall be subrogated to all rights of any holders of Senior Indebtedness of the Guarantor to receive any further payments or distributions applicable to the Senior In- debtedness of the Guarantor until the Securities of such series shall have been paid in full, and such payments or distributions received by the Trustee and the Holders of Securities of such series by reason of such subrogation, of cash, securities or other property which otherwise would be paid or distributed to the holders of Senior 80 1402 for which they were received and shall not be affected by any notice to the contrary which may be received by it on or after such date. The Company and the Guarantor shall give prompt written notice to the Trustee and to the Pay- ing Agent of any facts which would prohibit the payment of monies to or by the Trustee or any Paying Agent. Section 1406. Trustee to Effectuate Subordination. Each Holder of Securities by his acceptance thereof authorizes and directs the Trustee in his behalf to take such action as may be necessary or appropri- ate to effectuate the subordination as between such Holder and holders of Se- nior Indebtedness of the Company or the Guarantor, as the case may be, as pro- vided in this Article and appoints the Trustee its attorney-in-fact for any and all such purposes. Section 1407. Rights of Trustee as Holder of Senior Indebtedness of the Company or Senior Indebtedness of the Guarantor. The Trustee shall be entitled to all the rights set forth in this Article with respect to any Senior Indebtedness of the Company or Senior Indebtedness of the Guarantor which may at the time be held by it, to the same extent as any other holder of Senior Indebtedness of the Company or Senior Indebtedness of the Guarantor; provided that nothing in this Indenture shall deprive the Trustee of any of its rights as such holder and provided further that nothing in this Article shall apply to claims of, or payments to, the Trustee under or pursuant to Section 707. Section 1408. Article Applicable to Paying Agents. In case at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term "Trustee" as used in this Article shall in such case (unless the context shall otherwise require) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if the Paying Agent were named in this Article in addition to or in place of the Trustee; provided, however, that Sections 1405 and 1407 shall not apply to the Company or the Guarantor or any Affiliate of the Company or the Guarantor if the Company or the Guarantor or such Affiliate acts as Paying Agent. This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 81 1405,1406,1407,1408 In Witness Whereof, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and at- tested, all as of the day and year first above written. Mellon Financial Company [Corporate Seal] By...................................... President and Chief Executive Officer Attest: ........................................ Secretary Mellon Bank Corporation [Corporate Seal] By...................................... Vice Chairman, Chief Financial Officer and Treasurer Attest: ........................................ Secretary First Interstate Bank, of California By...................................... Vice President 82 Commonwealth of Pennsylvania ) County of Allegheny ) ss: On the day of August, 1995, before me personally came Steven G. Elliott, to me known, who, being by me duly sworn, did depose and say that he is Presi- dent and Chief Executive Officer of Mellon Financial Company, one of the cor- porations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like au- thority. [Notarial Seal] Notary Public Commonwealth of Pennsylvania ) County of Allegheny ) ss: On the day of August, 1995, before me personally came Steven G. Elli- ott, to me known, who, being by me duly sworn, did depose and say that he is Vice Chairman, Chief Financial Officer and Treasurer of Mellon Bank Corpora- tion, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority. [Notarial Seal] Notary Public 83 1405 and 1407 shall not apply to the Company or the Guarantor or any Affiliate of the Company or the Guarantor if the Company or the Guarantor or such Affiliate acts as Paying Agent. This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. In Witness Whereof, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. Mellon Financial Company [Corporate Seal] /s/ Steven G. Elliott By..................................... President and Chief Executive Officer Attest: /s/ Carole C. Wise ....................................... Secretary Mellon Bank Corporation [Corporate Seal] /s/ Steven G. Elliott By..................................... Vice Chairman, Chief Financial Officer and Treasurer Attest: /s/ James M. Gockley ....................................... Secretary First Interstate Bank of California, as Trustee /s/ Donald R. McEachren By..................................... Vice President 1408 84 Commonwealth of Pennsylvania ) County of Allegheny ) ss: On the 25th day of August, 1995, before me personally came Steven G. Elliott, to me known, who, being by me duly sworn, did depose and say that he is President and Chief Executive Officer of Mellon Financial Company, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority. [Notarial Seal] /s/ Judith-Ann Ayoub ------------------------- Notary Public Notarial Seal Judith-Ann Ayoub, Notary Public Pitts- burgh, Allegheny County My Commission Expires May 29, 1999 Member, Pennsylvania Association of Notaries Commonwealth of Pennsylvania ) County of Allegheny ) ss: On the 25th day of August, 1995, before me personally came Steven G. Elliott, to me known, who, being by me duly sworn, did depose and say that he is Vice Chairman, Chief Financial Officer and Treasurer of Mellon Bank Corporation, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority. [Notarial Seal] /s/ Judith-Ann Ayoub ------------------------- Notary Public Notarial Seal Judith-Ann Ayoub, Notary Public Pitts- burgh, Allegheny County My Commission Expires May 29, 1999 Member, Pennsylvania Association of Notaries 85 State of California County of Los Angeles ss: On August 25, 1995 before me, Sheila Harding, Notary Public, personally ap- peared D. R. McEachren [X] personally known to me or [_] proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are sub- scribed to the within instrument and acknowledged to me that he/she/they exe- cuted the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Sheila Harding [Notarial Seal] SHEILA HARDING Comm. #971942 Notary Public-Cali- fornia Los Angeles County My Comm. Expires Aug. 23, 1996 86 EX-5.1 4 OPINION OF J. GOCKLEY EX-5.1 and EX-23.1 August 25, 1995 Mellon Bank Corporation 500 Grant Street Pittsburgh, PA 15258 Re: Mellon Bank Corporation Mellon Financial Company Debt Securities Registration Statement on Form S-3 Gentlemen: I am the Assistant General Counsel of Mellon Bank Corporation, a Pennsylvania corporation (the "Corporation"), and, in that capacity, have acted as counsel for the Corporation and for the Corporation's wholly owned subsidiary, Mellon Financial Company (the "Company"), in connection with the preparation of a Registration Statement on Form S-3 (the "Registration Statement") relating to the proposed offering of up to $1.5 billion aggregate principal amount of debt securities to be issued from time to time by the Company (the "Debt Securities") and guaranteed as to payment of principal, premium, if any, and interest, if any, by the Corporation (the "Guarantees"). The Debt Securities will constitute either senior indebtedness of the Company (the "Senior Securities") or subordinated indebtedness of the Company (the "Subordinated Securities"). The Senior Securities and the related Guarantees are to be issued under an Indenture dated as of May 2, 1988, as supplemented by the First Supplemental Indenture dated as of November 29, 1990 (the "Senior Indenture"), among the Company, the Corporation and The Chase Manhattan Bank (National Association), as Trustee. The Subordinated Securities and the related Guarantees are to be issued under a Subordinated Indenture dated as of August 25, 1995 (the "Subordinated Indenture"), among the Company, the Corporation and First Interstate Bank of California, as Trustee. The Senior Indenture and the Subordinated Indenture are collectively referred to herein as the "Indentures". This opinion is being furnished pursuant to the requirements of Form S-3 and Item 601 of Regulation S-K under the Securities Act of 1933, as amended. Mellon Bank Corporation August 25, 1995 Page 2 In furnishing this opinion, I have examined the Registration Statement, as well as the prospectus included therein (the "Prospectus"), to be filed with the Securities and Exchange Commission, in connection with which this opinion is to be filed as an Exhibit. I have also examined the Senior Indenture, the Subordinated Indenture and such other documents, legal opinions and precedents, corporate and other records of the Company and the Corporation and certificates of public officials and officers of the Company and the Corporation as I have deemed necessary or appropriate to provide a basis for the opinions set forth herein. In such examination, I have assumed the genuineness of all signatures, the authenticity of all documents submitted to me as originals and the conformity to original documents of all documents submitted to me as certified or photostatic copies. Based upon the foregoing, I am of the opinion that: 1. The Company and the Corporation have been duly incorporated and are validly existing as corporations under the laws of the Commonwealth of Pennsylvania; 2. The Registration Statement has been duly authorized by all necessary corporate action of the Company and the Corporation, respectively; 3. The Debt Securities, when (i) the terms thereof have been duly authorized and such securities have been duly executed and authenticated, all pursuant to the Indentures and (ii) issued, sold and delivered as contemplated by the Prospectus against payment therefor, will constitute valid and legally binding obligations of the Company entitled to the benefits provided by the Indentures; 4. The Guarantees, when endorsed upon the Debt Securities and duly executed and upon the due execution, authentication and issuance of the Debt Securities, will constitute valid and legally binding obligations of the Corporation entitled to the benefits provided by the Indentures; 5. The Senior Indenture has been duly authorized by all necessary corporate action on behalf of the Company and the Corporation and constitutes a valid and legally binding instrument; and Mellon Bank Corporation August 25, 1995 Page 3 6. The Subordinated Indenture has been duly authorized by all necessary corporate action on behalf of the Company and the Corporation and constitutes a valid and legally binding instrument. The opinions set forth in paragraphs 3 through 6 hereof are qualified to the extent that the obligations of the Company and the Corporation may be limited by bankruptcy, moratorium, insolvency, reorganization or other laws of general applicability relating to or affecting the enforcement of creditors' rights, and by general equity principles. I hereby consent to the filing of this opinion as an Exhibit to the Registration Statement and to the use of my name in the Prospectus under the heading "Validity of Debt Securities and Guarantees." By giving such consent, I do not thereby admit that I am within the category of persons whose consents are required under Section 7 of the Securities Act of 1933, as amended. Very truly yours, JAMES M. GOCKLEY EX-8.1 5 OPINION OF MK HUGHEY EX-8.1 and EX-23.2 August 23, 1995 Mellon Bank Corporation 500 Grant Street Pittsburgh, PA 15258 Re: Mellon Bank Corporation Mellon Financial Company Debt Securities Registration Statement on Form S-3 Gentlemen: I am the Senior Vice President, Controller and Director of Taxes of Mellon Bank, N.A., the principal subsidiary of Mellon Bank Corporation, a Pennsylvania corporation (the "Corporation"). In that capacity, I am responsible for the corporate tax affairs of the Corporation and its subsidiaries, and I have acted as tax counsel for the Corporation in connection with the preparation of a Registration Statement on Form S-3 (the "Registration Statement"), including the prospectus (the "Prospectus") contained therein as filed with the Securities and Exchange Commission. I hereby confirm my opinion as set forth under the heading "Certain Tax Considerations" in the Prospectus. I hereby consent to the filing of this opinion as an Exhibit to the Registration Statement and to the use of my name in the Prospectus under the heading "Validity of Debt Securities and Guarantees." By giving such consent, I do not thereby admit that I am within the category of the persons whose consents are required under Section 7 of the Securities Act of 1933, as amended. Very truly yours, MICHAEL K. HUGHEY EX-12.1 6 RATIO OF EARNINGS Ex-12.1 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS Mellon Bank Corporation (parent Corporation)(a)
Year ended December 31, -------------------------------------------------------------------- (dollar amounts in thousands) 1994 1993 1992 1991 1990 -------- -------- -------- -------- -------- 1. Income before income taxes and equity in undistributed net income (loss) of subsidiaries $434,035 $224,869 $137,594 $145,777 $112,669 (c) 2. Fixed charges: interest expense, one-third of rental expense net of income from subleases, and amortization of debt issuance costs 95,193 110,739 79,709 103,001 149,446 -------- -------- -------- -------- -------- 3. Income before income taxes and equity in undistributed net income (loss) of subsidiaries, plus fixed charges (line 1 + line 2) $529,228 $335,608 $217,303 $248,778 $262,115 ======== ======== ======== ======== ======== 4. Preferred stock dividend requirements (b) $124,260 $103,792 $ 61,197 $ 57,618 $ 58,951 ======== ======== ======== ======== ======== 5. Ratio of earnings (as defined) to fixed charges (line 3 divided by line 2) 5.56 3.03 2.73 2.42 1.75 (c) 6. Ratio of earnings (as defined) to combined fixed charges and preferred stock dividends [line 3 divided by (line 2 + line 4)] 2.41 1.56 1.54 1.55 1.26 (c)
------------------ (a) The parent Corporation ratios include the accounts of Mellon Bank Corporation (the "Corporation") and Mellon Financial Company, a wholly owned subsidiary of the Corporation that functions as a financing entity for the Corporation and its subsidiaries by issuing commercial paper and other debt guaranteed by the Corporation. For purposes of computing these ratios, earnings represent parent Corporation income before taxes and equity in undistributed net income (loss) of subsidiaries, plus the fixed charges of the parent Corporation. Fixed charges represent interest expense, one-third (the proportion deemed representative of the interest factor) of rental expense net of income from subleases, and amortization of debt issuance costs. Because the ratio excludes from earnings the equity in undistributed net income (loss) of subsidiaries, the ratio varies with the payment of dividends by such subsidiaries. (continued) Ex-12.1 (continued) COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS Mellon Bank Corporation (parent Corporation)(a) (b) Preferred stock dividend requirements for all years presented represent the pretax amount required to cover preferred stock dividends. Series K Nonredeemable Preferred Stock was issued on January 25, 1993; Series J Nonredeemable Preferred Stock was issued on January 21, 1992; Series I Nonredeemable Preferred Stock was issued August 8, 1991 and Series H Nonredeemable Preferred Stock was issued March 29, 1990. Accordingly, preferred stock dividends were not accrued for these securities prior to their respective issue dates. In the first quarter of 1990, common stock was issued in exchange for approximately 83% of the outstanding shares of Series D preferred stock in order to avoid exceeding the limitation on the amount of preferred stock that could qualify as Tier I capital under the Federal Reserve Board's 1992 risk-based capital regulations. The remaining Series D preferred stock was converted to common stock in the third quarter of 1994. The Series C-1 Stated Rate Auction Preferred Stock was redeemed on July 18, 1990, the Series A Redeemable Preferred Stock was redeemed on July 19, 1991, the Series G preferred stock was redeemed on November 15, 1991, the Series C-2 State Rate Auction Preferred Stock was redeemed on November 16, 1992 and the Series B preferred stock was redeemed on December 1, 1993. Accordingly, preferred stock dividends were not accrued for these securities subsequent to their respective redemption dates. In December 1994, the Corporation announced its commitment to redeem the Series H preferred stock on March 1, 1995. Preferred stock dividends for 1994 include $16 million for the Series H redemption premium, the write-off of unamortized issuance costs and dividends accrued through the redemption date. (c) The ratio of earnings to fixed charges and the ratio of earnings to combined fixed charges and preferred stock dividends for the year ended December 31, 1990, exclude from earnings (as defined) the $73,562,000 gain on sale of a Chicago-based consumer finance subsidiary. Had these computations included this gain, the ratio of earnings (as defined) to fixed charges would have been 2.25 and the ratio of earnings (as defined) to combined fixed charges and preferred stock dividends would have been 1.61. EX-12.2 7 RATIO OF EARNINGS Ex-12.2 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS Mellon Bank Corporation and its subsidiaries(a)
Year ended December 31, ---------------------------------------------------------------------- (dollar amounts in thousands) 1994 1993 1992 1991 1990 ---------- ---------- ---------- ---------- ---------- 1. Net income $ 433,365 $ 460,213 $ 527,955 $ 347,451 $ 162,748 (c) 2. Provision for income taxes 278,040 298,034 104,099 62,199 40,538 ---------- ---------- ---------- ---------- ---------- 3. Net income before provision for income taxes (line 1 + line 2) $ 711,405 $ 758,247 $ 632,054 $ 409,650 $ 203,286 ========== ========== ========== ========== ========== 4. Fixed charges: a. Interest expense (excluding interest on deposits) $ 263,054 $ 200,915 $ 211,998 $ 326,437 $ 467,271 b. One-third of rental expense (net of income from subleases) and amortization of debt issuance costs 40,140 38,190 29,446 30,300 28,172 ---------- ---------- ---------- ---------- ---------- c. Total fixed charges (excluding interest on deposits)(line 4a + line 4b) 303,194 239,105 241,444 356,737 495,443 d. Interest on deposits 538,715 454,458 636,719 1,006,566 1,325,631 ---------- ---------- ---------- ---------- ---------- e. Total fixed charges (line 4c + line 4d) $ 841,909 $ 693,563 $ 878,163 $1,363,303 $1,821,074 ========== ========== ========== ========== ========== 5. Preferred stock dividend requirements (b) $ 124,260 $ 103,792 $ 61,197 $ 57,618 $ 58,951 ========== ========== ========== ========== ========== 6. Net income before provision for income taxes, plus total fixed charges: a. Excluding interest on deposits (line 3 + line 4c) $1,014,599 $ 997,352 $ 873,498 $ 766,387 $ 698,729 ========== ========== ========== ========== ========== b. Including interest on deposits (line 3 + line 4e) $1,553,314 $1,451,810 $1,510,217 $1,772,953 $2,024,360 ========== ========== ========== ========== ==========
(continued) Ex-12.2 (continued) COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS Mellon Bank Corporation and its subsidiaries(a)
Year ended December 31, ---------------------------------------------------------------------- 1994 1993 1992 1991 1990 ---------- ---------- ---------- ---------- ---------- 7. Ratio of earnings (as defined) to fixed charges: a. Excluding interest on deposits (line 6a divided by line 4c) 3.35 4.17 3.62 2.15 1.41 (c) b. Including interest on deposits (line 6b divided by line 4e) 1.84 2.09 1.72 1.30 1.11 (c) 8. Ratio of earnings (as defined) to combined fixed charges and preferred stock dividends a. Excluding interest on deposits 2.37 2.91 2.89 1.85 1.26 (c) [line 6a divided by (line 4c + line 5)] b. Including interest on deposits [line 6b divided by (line 4e + line 5)] 1.61 1.82 1.61 1.25 1.08 (c)
------------------ (a) For purposes of computing these ratios, earnings represent consolidated net income, before income taxes plus consolidated fixed charges. Fixed charges, excluding interest on deposits, include interest expense (other than on deposits), one-third (the proportion deemed representative of the interest factor) of rental expense net of income from subleases, and amortization of debt issuance costs. Fixed charges, including interest on deposits, include all interest expense, one-third (the proportion deemed representative of the interest factor) of rental expense net of income from subleases, and amortization of debt issuance costs. (b) Preferred stock dividend requirements for all years presented represent the pretax amount required to cover preferred stock dividends. Series K Nonredeemable Preferred Stock was issued on January 25, 1993; Series J Nonredeemable Preferred Stock was issued on January 21, 1992; Series I Nonredeemable Preferred Stock was issued August 8, 1991 and Series H Nonredeemable Preferred Stock was issued March 29, 1990. Accordingly, preferred stock dividends were not accrued for these securities prior to their respective issue dates. In the first quarter of 1990, common stock was issued in exchange for approximately 83% of the outstanding shares of Series D preferred stock in order to avoid exceeding the limitation on the amount of preferred stock that could qualify as Tier I capital under the Federal Reserve Board's 1992 risk-based capital regulations. The remaining Series D preferred stock was converted to common stock in the third quarter of 1994. The Series C-1 Stated Rate Auction Preferred Stock was redeemed on July 18, 1990, the Series A Redeemable Preferred Stock was redeemed on July 19, 1991, the Series G preferred stock was redeemed on November 15, 1991, the Series C-2 Stated Rate Auction Preferred Stock was redeemed on November 16, 1992, and the Series B preferred stock was redeemed on December 1, 1993. Accordingly, preferred stock dividends were not accrued for these securities subsequent to their respective redemption dates. In December 1994, the Corporation announced its commitment to redeem the Series H preferred stock on March 1, 1995. Preferred stock dividends for 1994 include $16 million for the Series H redemption premium, the write-off of unamortized issuance costs and dividends accrued through the redemption date. (c) The ratio of earnings to fixed charges and the ratio of earnings to combined fixed charges and preferred stock dividends for the year ended December 31, 1990, exclude from earnings (as defined) the $73,562,000 gain on the sale of a Chicago-based consumer finance subsidiary. Had these computations included this gain, the ratio of earnings (as defined) to fixed charges would have been 1.56 excluding interest on deposits, and 1.15 including interest on deposits. Including this gain, the ratio of earnings to combined fixed charges and preferred stock dividends would have been 1.39 excluding interest on deposits, and 1.12 including interest on deposits. EX-23.3 8 CONSENT OF KPMG PEAT MARWICK EX-23.3 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS The Board of Directors of Mellon Bank Corporation: We consent to the use of our report incorporated herein by reference and to the reference to our firm under the heading "Experts" in the Prospectus. Our report refers to a change in the method of accounting for certain investments in debt and equity securities pursuant to Statement of Financial Accounting Standards No. 115. KPMG PEAT MARWICK LLP Pittsburgh, Pennsylvania August 22, 1995 EX-24.1 9 POWER OF ATTORNEY EX-24.1 POWER OF ATTORNEY MELLON BANK CORPORATION Know all men by these presents, that each person whose signature appears below constitutes and appoints James M. Gockley and William E. Marquis, and each of them, such person's true and lawful attorney-in-fact and agent, with full power of substitution and revocation, for such person and in such person's name, place and stead, in any and all capacities, to sign one or more Registration Statements pursuant to the Securities Act of 1933, as amended, with respect to the registration of up to $1.5 billion aggregate principal amount of senior and/or subordinated debt securities and any and all amendments (including post- effective amendments) thereto, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent and each of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. WITNESS the due execution hereof by the following persons in the capacities indicated on this 21st day of March, 1995. FRANK V. CAHOUET CHARLES A. CORRY Frank V. Cahouet, Director and Charles A. Corry, Director Principal Executive Officer BURTON C. BORGELT C. FREDERICK FETTEROLF Burton C. Borgelt, Director C. Frederick Fetterolf, Director CAROL R. BROWN IRA J. GUMBERG Carol R. Brown, Director Ira J. Gumberg, Director J. W. CONNOLLY PEMBERTON HUTCHINSON J. W. Connolly, Director Pemberton Hutchinson, Director ROTAN E. LEE W. KEITH SMITH Rotan E. Lee, Director W. Keith Smith, Director ANDREW W. MATHIESON HOWARD STEIN Andrew W. Mathieson, Director Howard Stein, Director EDWARD J. McANIFF JOAB L. THOMAS Edward J. McAniff, Director Joab L. Thomas, Director ROBERT MEHRABIAN WESLEY W. VON SCHACK Robert Mehrabian, Director Wesley W. von Schack, Director SEWARD PROSSER MELLON WILLIAM J. YOUNG Seward Prosser Mellon, Director William J. Young, Director DAVID S. SHAPIRA David S. Shapira, Director -2- EX-24.1 POWER OF ATTORNEY MELLON FINANCIAL COMPANY Know all men by these presents, that each person whose signature appears below constitutes and appoints James M. Gockley and Ann M. Sawchuck and each of them such person's true and lawful attorney-in-fact and agent, with full power of substitution and revocation, for such person and in such person's name, place and stead, in any and all capacities, to sign one or more Registration Statements pursuant to the Securities Act of 1933, as amended, with respect to the issuance and registration of up to $1.5 billion of debt securities, wherein Mellon Financial Company is a registrant, and any and all amendments (including post-effective amendments) thereto, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent and each of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. WITNESS the due execution hereof by the following persons in the capacities indicated on this 22nd day of August, 1995. W. KEITH SMITH W. Keith Smith Director STEVEN G. ELLIOTT Steven G. Elliott Director and Principal Executive Officer MICHAEL K. HUGHEY Michael K. Hughey Director EX-25.2 10 FORM T-1 EX-25.2 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) --------------- FIRST INTERSTATE BANK OF CALIFORNIA (Exact name of trustee as specified in its charter) California 95-0593085 (Jurisdiction of Incorporation (I.R.S. Employer or organization Identification No.) if not a U.S. national bank) 707 WILSHIRE BOULEVARD, LOS ANGELES, CALIFORNIA 90017 (Address of principal executive offices) (Zip Code) T. William Opdyke, Esq., Sheppard, Mullin, Richter & Hampton 333 South Hope Street, Forty-Eighth Floor, Los Angeles, CA 90071 (213) 620-1780 (Name address and telephone number of agent for service) MELLON FINANCIAL COMPANY MELLON BANK CORPORATION (Exact name of obligor as specified in its charter) Pennsylvania 25-1387025 25-1233834 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Mellon Bank Center, 500 Grant Street, Pittsburgh, Pennsylvania 15258 (Address of principal executive offices) (Zip Code) SUBORDINATED DEBT SECURITIES (Title of the indenture securities) FORM T-1 -------- Item 1. GENERAL INFORMATION. Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. STATE BANKING DEPARTMENT 235 Montgomery Street, San Francisco, California 94104 FEDERAL RESERVE BANK OF SAN FRANCISCO 101 Market Street, San Francisco, California 94105 FEDERAL DEPOSIT INSURANCE CORPORATION Washington, D.C. 20429 (b) Whether it is authorized to exercise corporate trust powers. Trustee is authorized to exercise corporate trust powers. Item 2. AFFILIATIONS WITH THE OBLIGOR. If the obligor is an affiliate of the Trustee, describe each such affiliation. No such affiliation. Item 3 through Item 15. Not applicable. Item 16. LIST OF EXHIBITS. *EXHIBIT 1. A copy of the Restated Articles of Incorporation of the Trustee as presently in effect (incorporated by reference to Exhibit T-1A on Form T-1, Securities and Exchange Commission File No. 2-91947). *EXHIBIT 2. A copy of the certificate of the Superintendent of Banks, State of California, authorizing First Interstate bank of California to commence business of banking (incorporated by reference to Exhibit T-1a(b) on Form T-1, Securities and Exchange Commission File No. 2-41187). *EXHIBIT 3. A copy of the certificate of the Superintendent of Banks, State of California, authorizing First Interstate Bank of California to transact trust banking business (incorporated by reference to Exhibit T-1A(b) on Form T-1, Securities and Exchange Commission File No. 2-41187). -1- A copy of the Certificate as to Merger of First Western Bank and Trust Company, San Francisco, California, into California Bank, Los Angeles, California (United California Bank after said Merger), and as to Purchase by First Western Bank and Trust Company, Los Angeles, California (New Bank) from said United California Bank of the Business of Certain Branches of the Former First Western Bank and Trust Company, San Francisco, California (incorporated by reference to Exhibit T-1A(c) on Form T-1, Securities and Exchange Commission File No. 2-41187). EXHIBIT 4. The By-Laws of the Trustee as presently in effect. *EXHIBIT 6. The consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939 (incorporated by reference to Exhibit 6 on Form T-1, Securities and Exchange Commission File No. 2-41187). EXHIBIT 7. A copy of the latest report of condition of the Trustee published pursuant to law or the requirements of its supervising or examining authority. * Exhibits thus designated are incorporated herein by reference. These exhibits were previously filed by the Trustee with the Securities and Exchange Commission and are incorporated with the same respective designations in this statement by specific reference thereto. -2- SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, First Interstate Bank of California, a corporation organized and existing under the laws of the state of California, has duly caused this Statement of Eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Los Angeles, State of California, on August 23, 1995. FIRST INTERSTATE BANK OF CALIFORNIA By: /s/ Yona Binder ------------------------------- Yona Binder Vice President -3- Exhibit 4 BY-LAWS OF FIRST INTERSTATE BANK OF CALIFORNIA ARTICLE I MEETINGS OF SHAREHOLDERS Section 1. SHAREHOLDERS' ANNUAL MEETING: Annual meetings of Shareholders shall ---------------------------------------- be held at the First Interstate World Center, 633 West Fifth Street, Los Angeles, California, or at such other California location as the shareholders or this Board shall direct. Annual meetings shall take place at one-fifteen on the third Monday in April of each year, if not a legal holiday, and if a legal holiday, then on the next succeeding day not a legal holiday. Section 2. NOTICE OF SHAREHOLDERS' ANNUAL MEETING: The notice of the annual ------------------------------------------------- meeting of the Shareholders shall be given by the Secretary, or in the event of his absence, refusal or failure to act, by an Assistant Secretary, or a Secretary Pro Tem appointed for that purpose by the Chairman of the Board, the President, or by any Vice President, or by the Executive Committee. Said notice shall be given in the manner and for the time required by law. Section 3. SPECIAL SHAREHOLDERS' MEETINGS: Special meetings of the shareholders ----------------------------------------- shall be held at the principal executive office of the Corporation and may be called by order of the Chairman of the Board, the President, or by the Board of Directors, or at the request of the holders at the meeting which represent not less than one-tenth in amount of the shares of the capital stock of the Corporation issued and outstanding. Notice of special meetings of the shareholders shall be given by the Secretary, or in the case of his absence, refusal, or failure to act, by an Assistant Secretary, or Secretary Pro Tem appointed for that purpose by the Chairman of the Board, the President, or by any Vice President, or by the Executive Committee; such notice shall be given by mailing through the United States mails, postage prepaid, a written or printed notice thereof stating the time, place and general nature of the business to be transacted at the meeting, addressed to each shareholder of record entitled to vote at such meeting at the address of such shareholder appearing on the books of the Corporation, or given by the shareholder to the Corporation for the purpose of notice, or if no such address appears or is given, at the place where the principal executive office of the Corporation is located. Said notice shall be mailed by placing the same in any regular place of deposit for United States mail not less than ten (10) nor more than sixty (60) days before the day on which the meeting is to be held. Section 4. ADJOURNMENT OF SHAREHOLDERS' MEETINGS: Any meeting of the ------------------------------------------------ shareholders may be adjourned from time to time by the vote of a majority of the shares, the Sholders of which are either present in person or represented by proxy. 1 ARTICLE II MEETINGS OF DIRECTORS Section 1. ANNUAL MEETING: The Board of Directors shall meet for the purpose -------------------------- of organization, the election of officers, and the transaction of other business, immediately after each annual election of directors on the same day on which the shareholders' meeting at which they have been elected has been held. Notice of such meeting need not be given. Section 2. REGULAR MEETINGS OF DIRECTORS: The regular meetings of the Board ---------------------------------------- shall be held at least once each calendar quarter at such hour and on such day during such month as shall from time to time be fixed by standing resolution of the Board, except during the month of April when the annual meeting shall constitute the regular meeting and shall be held immediately after the annual election of directors. In the event that the day fixed for a regular meeting of directors shall fall on a legal holiday, then such regular meeting shall be held at the same hour upon such day as the Board of Directors may previously designate by resolution, and if no such day be designated, the said meeting shall be held on the next succeeding day not a holiday. No notice of regular meetings of directors is required. Section 3. SPECIAL MEETINGS OF THE DIRECTORS: Special meetings of the Board may -------------------------------------------- be called by the Chairman of the Board, the President, the Secretary or any two (2) directors. Notice of special meetings of the Board shall state the time and place of the meeting but need not state the purpose thereof. Such notice may be in writing and shall be sufficient if given by United States mail, telegraph, personal service or by telephone; if by mail then the notice shall be deposited, postage prepaid, in any regular place of deposit for United States mail in the City of Los Angeles at least four (4) days before the time of the meeting, addressed to the director at his last post office address as known to the officer giving the notice; if by telegraph then the telegram containing the notice shall be delivered to a telegraph office in the City of Los Angeles, transmission charges prepaid, at least twenty-four (24) hours before the time of the meeting, addressed to the director at his last post office address as known to the officer giving the notice; if by personal service or by telephonic means at least twenty-four (24) hours before the time of the meeting. A record of such notice, by whom given and the manner in which given shall be entered upon the minutes of any special meeting of the Board, and the said minutes on being read and approved at any subsequent meeting of the Board shall be presumptive upon the question of service. The attendance of any director at any meeting of the Board, without protest of lack of notice to him, either prior to or at the commencement of the meeting shall constitute a waiver of any such notice. A director may execute a waiver of notice of any meeting of the Board either before or after such meeting. Section 4. PLACE AND TIME OF MEETINGS OF DIRECTORS: Regular meetings of the -------------------------------------------------- Board shall be held without call or notice at such time and place as shall from time to time be fixed by standing resolution of the Board. Special meetings of the Board shall be held at the time and place stated in the notice of such meeting. Section 5. ACTION WITHOUT MEETING: Any action by the Board may be taken ---------------------------------- without a meeting if all members of the Board shall individually or collectively consent in writing to such 2 action. Such written consent or consents shall be filed with the minutes of the proceedings of the Board. Section 6. TELEPHONIC MEETINGS: A meeting of the Board of Directors or of any ------------------------------- Committee thereof may be held through the use of conference telephone or similar communications equipment, so long as all members participating in such meeting can hear one another. Participation in such a meeting shall constitute presence at such meeting. ARTICLE III DIRECTORS Section 1. Wherever in these By-Laws the term "BOARD" is used, the same is --------- intended to designate the Board of Directors of the Corporation. Subject to limitations of the Articles of Incorporation, of these By-Laws, of the California General Corporation Law, and of the California Financial Code as to action to be authorized or approved by the shareholders, and subject to the duties of Directors as prescribed by these By-Laws, all corporate powers shall be exercised by or subject to the direction of, and business and affairs of the Corporation shall be managed by or under the direction of, the Board. Without prejudice to such general powers, but subject to the same limitations, it is hereby expressly declared that the Board shall have the following powers: a. To control the election, the appointment, the authority, responsibility and the qualifications of all persons in charge of the business and the affairs of the Corporation. b. To cause to be kept a record of all their meetings and proceedings and of all the meetings of the shareholders, and to cause to be presented at the annual meeting of the shareholders a statement showing the assets and liabilities of the Corporation. c. To require from the officers and from other persons in charge of the business and affairs of the Corporation respectively, such bond or security as it may see fit for the faithful performance of their duties. d. To appoint such committees and members thereof as it may deem proper and to define the powers and duties of such committees, and to determine their compensation. e. Make any distribution to its shareholders at a rate or in a periodic amount or within a price range as it may deem proper and in a manner provided by law. f. To cause to be issued to the shareholders, in proportion to their several interests, certificates of stock not to exceed in the aggregate the authorized capital. g. To fix by general and uniform resolution or resolutions the compensation of each director for serving as director and to make such changes therein from time to time as it may deem proper. 3 Section 2. The authorized number of Directors of this Corporation shall not be --------- less than eight (8) nor more than fifteen (15). The exact number of Directors shall be fixed, within these limits, by approval of the Board of Directors or the Shareholders, within the limits and in the manner prescribed by law. ARTICLE IV OFFICERS Section 1. NUMBER AND TITLES: The Corporation shall have (a) a Chairman of the ----------------------------- Board, (b) a President, and (c) a Secretary. The Corporation may also have one or more Vice Chairmen, one or more Executive Vice Presidents, one or more Senior Vice Presidents, one or more Vice Presidents, one or more Assistant Vice Presidents, one or more Assistant Cashiers, one or more Assistant Secretaries, a General Counsel, one or more Assistant General Counsel, one or more Managing Counsel, one or more Senior Counsel, one or more Counsel, one of more Assistant Counsel, two or more Trust Officers of whom one or more may be designated Senior Trust Officer, a General Auditor, one or more Audit Officers, a Chief Financial Officer, a Comptroller, one or more Financial Analysis Officers, one or more Accounting Officers, one or more Managers, one or more Assistant Managers, one or more Operations Officers, one or more Corporate Banking Officers, one or more Banking Officers, and one or more International Banking Officers. There may also be such other officers as may from time to time be designated by resolution of the Board of Directors. Section 2. APPOINTMENT AND TERM OF OFFICE: The Chairman of the Board, the ----------------------------------------- President, the Vice Chairmen, the Executive Vice Presidents, the Senior Vice Presidents, the Secretary, the General Counsel, the Assistant General Counsel, the Senior Trust Officers, the General Auditor, the Chief Financial Officer and the Comptroller shall be chosen by the Board at the first meeting after the election of the Board and shall hold office at the pleasure of the Board. The Board may also appoint such officers from time to time at any regular or special meeting of the Board. All other officers designated by resolution of the Board as provided in Section 1, may be appointed by the Chairman of the Board or the President. All persons authorized to sign on behalf of the Corporation, other than officers, may be appointed by the Chairman of the Board, or the President. Section 3. CHAIRMAN OF THE BOARD: The Chairman of the Board shall preside at --------------------------------- all meetings of the shareholders and all meetings of the Board and of the Executive Committee. He shall be the chief executive officer of the Corporation with general executive supervision of its business and affairs. He shall act as Chairman of all committees of which he is a member, except as may be provided in the resolution or order appointing such committee or committees. In the absence or disability of the Chairman of the Board, the following officers in the following order shall act in his stead: the President, an officer designated by the Chairman of the Board, an officer designated by the Board of Directors or Executive Committee. In the absence or disability of the Chairman of the Board, the President, and all officers so designated, if any, the Board of Directors shall elect a temporary Chairman of the Board to act during such absence or disability of said officers. The Chairman of the Board shall at all times have on file with the Secretary his 4 written designation of the officer from time to time so designated by him to act as the chief executive officer in his absence or disability and in the absence or disability of the President. Section 4. PRESIDENT: The President shall have such powers and duties as may --------------------- be prescribed by these By-Laws, the Board, the Executive Committee or the Chairman of the Board. Subject to the authority of the Chairman of the Board, the President shall have general executive supervision of the business and affairs of the Corporation and shall be senior in authority to all officers other than the Chairman of the Board. In the absence or disability of the Chairman of the Board, the President shall exercise the powers and perform the duties of the Chairman of the Board. Section 5. VICE CHAIRMEN: The Vice Chairmen shall perform the duties imposed ------------------------- upon them by the By-Laws, the Board of Directors, the Executive Committee, the Chairman of the Board or the President. Section 6. EXECUTIVE VICE PRESIDENTS: The Executive Vice Presidents shall ------------------------------------- perform the duties imposed upon them by the By-Laws, the Board, the Executive Committee, the Chairman of the Board or the President. Section 7. SENIOR VICE PRESIDENTS: The Senior Vice Presidents shall perform ---------------------------------- the duties imposed upon them by the By-Laws, the Board, the Executive Committee, the Chairman of the Board or the President. Section 8. SECRETARY: The Secretary shall keep full and complete minutes of --------------------- each meeting of the Board, of the Executive Committee and of the shareholders and give notice, as required, of all such meetings. He shall maintain custody of and keep such other records of the Corporation as are required by the Board and, generally, perform all duties which pertain to his office and which are required by the Board. Section 9. GENERAL AUDITOR: The General Auditor shall be responsible to the --------------------------- Board, through the Audit Committee, for the systems of internal audit and for testing and evaluating the systems of protective controls. The office of the General Auditor shall make such examinations and reports as the General Auditor deems advisable or as may be required by the Audit Committee. The General Auditor shall have the duty to report to the Chairman of the Board on all matters concerning which the General Auditor deems advisable or which the Chairman of the Board may request and shall perform such other duties as the Chairman of the Board may prescribe. Additionally, the General Auditor shall have the duty of reporting independently of all officers of the Corporation to the Audit Committee at least quarterly on all matters concerning which the General Auditor deems advisable or which the Audit Committee may request. Section 10. CHIEF FINANCIAL OFFICER: The Chief Financial Officer shall keep ------------------------------------ and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, surplus and shares. He shall be responsible for all the money, funds and valuables belonging to the Corporation. He shall deposit all money and other valuables in the name of and to the credit of the Corporation with such depositories as are 5 authorized by law. He shall render to the Chairman of the Board, the President and Board, whenever they request it, an account of all of his transactions as Chief Financial Officer and of the financial condition of the Corporation, and shall have such other powers and perform such other duties as are prescribed by the Board, the Executive Committee, the By-Laws, the Chairman of the Board or the President. Section 11. OTHER OFFICERS: Each other officer shall have such authority and --------------------------- perform such duties as are prescribed by the By-Laws, the Board, the Executive Committee, the Chairman of the Board or the President. ARTICLE V COMMITTEES OF THE BOARD OF DIRECTORS Section 1. EXECUTIVE COMMITTEE: There shall be an Executive Committee ------------------------------- consisting of the Chairman of the Board, the President and at least three non- officer directors to be appointed for respective terms to be fixed by the Board. A majority of the members of the Committee shall constitute a quorum for the transaction of business. The Board may from time to time appoint an additional director or directors as an alternate member or members of the Committee to serve only at a meeting if there otherwise may not be a quorum present at such meeting. The alternate member or members so appointed shall act in the place and stead of any regular member or members who may be absent from such meeting. The Executive Committee shall have all of the powers and authority of the Board in the management of the business and affairs of the Corporation during the intervals between meetings of the Board, except the power to declare dividends and to adopt, amend or repeal By-Laws or as otherwise prohibited by law. The Executive Committee may establish and appoint such other committees not otherwise provided for by these By-Laws or the Board of Directors as it may deem advisable and may prescribe the powers and duties of such committees. The Chairman of the Board or a member of the Committee designated by the Chairman of the Board, shall preside over meetings of the Committee. Meetings of the Committee may be held at the call of the Chairman of the Board or the President or any two other members of the Committee at the time and place stated in the notice of such meeting. The transactions of any meetings of the Executive Committee however called or noticed or wherever held shall be as valid as though had at a meeting duly held after the regular call and notice, if a quorum be present and if, either before or after the meeting each of the members of the Committee not present sign a written waiver of notice or a consent to the holding of such meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the records of the Committee or made a part of the minutes of the meeting. Section 2. OTHER COMMITTEES: The Board of Directors may designate one or more ---------------------------- committees from time to time, each consisting of two or more directors to serve at the pleasure of the Board. The Board of Directors may designate one or more directors as alternate members of 6 any committee, who may replace any absent member at any meeting of the committee. Any such committee, to the extent provided in the resolution of the Board of Directors shall have all the authority of the Board, except with respect to: a. The approval of any action for which shareholder approval is also required. b. The filling of vacancies on the Board or in any Committee. c. The fixing of compensation of the directors for serving on the Board or on any committee. d. The amendment or repeal of By-Laws or the adoption of new By-Laws. e. The amendment or repeal of any resolution of the Board which by its express terms is not so amendable or repealable. f. A distribution to the shareholders of the corporation as defined in Section 166 of the California Corporations Code, except at a rate or in a periodic amount or within a price range determined by the Board. g. The appointment of other committees of the Board or the members thereof. h. The approval of any action for which the entire Board is required. ARTICLE VI INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES (a) Indemnification of Directors, Officers and Employees. Each person who was --------------------------------------------------------- or is a party or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she is or was a director, officer or employee of the Corporation, or of any predecessor corporation, or is or was serving at the request of the Corporation as a director, officer, employee or other agent of another corporation or of a partnership, joint venture, trust or other enterprise (including service with respect to employee benefit plans), whether the basis of such proceeding is alleged action in an official capacity as a director, officer or employee or in any other capacity while serving as a director, officer or employee, shall be indemnified and held harmless by the Corporation to the fullest extent permissible under California law and the Corporation's Articles of Incorporation, against all expense, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) actually and reasonably incurred or suffered by such person in connection therewith. Such indemnification shall continue as to a person who has ceased to be a director, officer or employee and shall inure to the benefit of his or her heirs, executors and administrators. Notwithstanding the foregoing, the Corporation shall indemnify any such person in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. The right to indemnification conferred in this Article shall include the right to be paid by the Corporation the expenses incurred in defending any proceeding in advance of final disposition to the fullest extent permitted by law; provided, however, that the payment 7 under this Article of such expenses in advance of the final disposition of a proceeding may be conditioned upon the delivery to the Corporation of such undertakings by or on behalf of such director, officer or employee to repay all amounts so advanced as may be required or permitted by law. (b) Exclusions. Notwithstanding the foregoing or any other provisions under --------------- this Article, the Corporation shall not be liable under this Article to indemnify a director, officer or employee against, or make any advances or other payments in connection with, any proceeding against a director, officer or employee based upon, arising out of, resulting from, relating to or in consequence of (1) transactions or activities in which such person gained or sought to gain, any improper personal profit or advantage, or (2) the intentional misconduct of such person which such person knew, or reasonably should have known, would violate the law or any policy of the Corporation or (3) the knowing fraud or deliberately dishonest actions of such person. (c) Successful Defense. To the extent that a director, officer or employee has ----------------------- been successful on the merits in defense of any proceeding referred to in paragraph (a) or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him or her in connection therewith. (d) Non-Exclusivity of Rights. The right to indemnification provided by this ------------------------------ Article shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, by-law, agreement, vote of shareholders or disinterested directors, or otherwise. ARTICLE VII CERTIFICATE OF STOCK Certificates for shares of the capital stock of the Corporation shall be of such form as the Board may prescribe and shall be signed by the President or a Vice President and the Secretary or an Assistant Secretary, or be authenticated by facsimiles of the signatures of the President and the Secretary, or by a facsimile of the signature of the President and the written signature of the Secretary or an Assistant Secretary. Every certificate authenticated by a facsimile of a signature must be countersigned by a transfer agent or transfer clerk, and be registered by an incorporated bank or trust company as registrar of transfers, before issuance. ARTICLE VIII TRANSFER OF STOCK Section 1. Shares of the capital stock of the Corporation may be transferred by --------- the holders thereof, or by attorney legally constituted, or by their legal representatives, by endorsement on the certificates of stock, but no such transfer shall be valid until the certificate is surrendered and acknowledgment made on the books of the Corporation. Section 2. No new certificates shall be issued for the surrendered certificates --------- unless the surrendered certificates have been duly canceled. If a certificate shall be lost or destroyed, the Board or the Executive Committee may order a new certificate in lieu thereof issued upon such 8 guaranty or indemnity of the person claiming the same as the Board or the Executive Committee may deem proper and satisfactory. Section 3. The Board may fix a time in the future as a record date for the --------- determination of the shareholders entitled to notice of and to vote at any meeting of shareholders or entitled to receive any dividend or distribution, or any allotment of rights, or to exercise rights in respect to any change, conversion, or exchange of shares. The record date so fixed shall be not more than sixty (60) nor less than ten (10) days prior to the date of the meeting or event for the purposes of which it is fixed. When a record date is so fixed, only shareholders of record on that date are entitled to notice of and to vote at the meeting or to receive the dividend, distribution, or allotment of rights, or to exercise the rights, as the case may be, notwithstanding any transfer of any shares on the books of the Corporation after the record date. At any meeting of shareholders as to which the Board has not fixed a record date for the determination of the shareholders entitled to notice of and to vote at such meeting, only shareholders of record at the close of business on the business day next preceding the day on which notice is given or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held shall be entitled to vote thereat. ARTICLE IX DEPOSITS Section 1. All deposits made by the shareholders shall be entitled to the same --------- rights, privileges and benefits as those of other depositors. ARTICLE X SEAL Section 1. The seal of the Corporation shall be in such form as the Board may --------- prescribe. In the execution on behalf of this Corporation of any instrument, document, writing, notice or paper it shall not be necessary to affix the corporate seal of this Corporation thereon, and any such instrument, document, writing, notice or paper when executed without said seal affixed thereon shall be of the same force and effect and as binding on this Corporation as if said corporate seal had been affixed thereon in each instance. Said seal, if required, may be affixed, imprinted or reproduced by facsimile on any instrument or document, including certificates for shares of the stock of this Corporation. ARTICLE XI AMENDMENT TO BY-LAWS Section 1. Subject to the right of shareholders to adopt, amend or repeal By- --------- Laws, as provided in Section 211 of the Corporations Code of California, By-Laws may be adopted, amended or repealed by the Board, except that a By-Law or amendment thereof changing the authorized number of directors may be adopted, amended or repealed by the Board only pursuant to Section 212 of said Corporations Code. 9 I, Yona Binder, Vice President of FIRST INTERSTATE BANK OF CALIFORNIA, a California corporation, hereby certify that the foregoing eleven (11) articles represent a full, true and correct copy of the Code of By-Laws of First Interstate Bank of California as amended, and that the same is in full force and effect as of April 26, 1994. WITNESS my hand and the seal of said Corporation this 23rd day of August, 1995 /s/ Yona Binder --------------- Vice President of FIRST INTERSTATE BANK OF CALIFORNIA BYLAWS 10 Exhibit 7 Board of Governors of the Federal Reserve System QMB Number: 7100-0036 Federal Deposit Insurance Corporation QMB Number: 3064-0052 Office of the Comptroller of the Currency QMB Number: 1557-0041 Expires July 31, 1995 Federal Financial Institutions Examination Council -------------------------------------------------------------------------------- [1] Please refer to page i, Table of Contents, for the required disclosure of estimated burden. -------------------------------------------------------------------------------- Consolidated Reports of Condition and Income for A Bank With Domestic and Foreign Offices--FFIEC 031 Report at the close of business March 31, 1995 (950331) -------- (RCRI 9999) This report is required by law: 12 U.S.C. (section)324 (state member banks); 12 U.S.C. (section)1817 (State nonmember banks); and 12 U.S.C. (section)161 (National banks). This report form is to be filed by banks with branches and consolidated subsidiaries in U.S. territories and possessions, Edge or Agreement subsidiaries, foreign branches, consolidated foreign subsidiaries, or International Banking Facilities. -------------------------------------------------------------------------------- NOTE: The Reports of Condition and Income must be signed by an authorized officer and the Report of Condition must be attested to by not less than two directors (trustees) for State nonmember banks and three directors for State member and National banks. I, Roger H. Molvar Senior Vice President & Comptroller --------------------------------------------------- Name and Title of Officer Authorized to Sign Report of the named bank do hereby declare that these Reports of Condition and Income (including the supporting schedules) have been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and are true to the best of my knowledge and belief. /s/ Roger H. Molvar ------------------------------------------------------ Signature of Officer Authorized to Sign Report April 28, 1995 ------------------------------------------------------ Date of Signature The Reports of Condition and Income are to be prepared in accordance with Federal regulatory authority instructions. NOTE: These instructions may in some cases differ from generally accepted accounting principles. We, the undersigned directors (trustees), attest to the correctness of this Report of Condition (including the supporting schedules) and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. /s/ Bruce G. Willison ------------------------------------------------------ Director (Trustee) /s/ Ivan J. Houston ------------------------------------------------------ Director (Trustee) /s/ William ?. Siart ------------------------------------------------------ Director (Trustee) -------------------------------------------------------------------------------- For Banks Submitting Hard Copy Report Forms: State Member Banks: Return the original and one copy to the appropriate Federal Reserve District Bank. State Nonmember Banks: Return the original only in the special return address envelope return address envelope provided. If express mail is used in lieu of the special return address envelope, return the original only to the FDIC, c/o Quality Data Systems, 2127 Espey Court, Suite 204, Crofton, MD 21114. National Banks: Return the original only in the special return address envelope provided. If express mail is used in lieu of the special return address envelope, return the original only to the FDIC, c/o Quality Data Systems, 2127 Espey Court, Suite 204, Crofton, MD 21114. -------------------------------------------------------------------------------- FDIC Certificate Number / / / / / / -- -- -- -- -- (RCN 3060) FIRST INTERSTATE BANK CA 1200 W. 7TH ST., G-9-35 LOS ANGELES CA 90017 L060755000 120607550000 01226 31 Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency First Interstate Bank of California Call Date: 03/31/95 ST-BK: 66-6 FFIEC 031 1200 W. 7th St. Vendor ID: D CERT: 01226 Page RC- 1 Los Angeles, CA 90017
Transit Number: 12200021 11 Consolidated Report of Condition for Insured Commercial and State-Chartered Savings Banks for March 31, 1995 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, report the amount outstanding as of the last business day of the quarter. Schedule RC - Balance Sheet
C400 (- Dollar Amounts in Thousands ------------------------------------------------------------------------------------------------------------------------------------ Assets 1. Cash and balances due from depository institutions (from Schedule RC-A): RCFD ---- a. Noninterest-bearing balances and currency and coin(1) 0081.... 3,148,682 1.a -------------------------- b. Interest-bearing balances(2) 0071.... 25,960 1.b --------------------------------------------------- 2. Securities a. Held-to-maturity securities (from Schedule RC-B, column A) 1754.... 5,875,376 2.a --------------------- b. Available-for-sale securities(from Schedule RC-B, column D) 1773.... 63,831 2.b -------------------- 3. Federal funds sold and securities purchased under agreements to resell in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: a. Federal funds sold 0276.... 1,565,150 3.a ------------------------------------------------------------- b. Securities purchased under agreements to resell 0277.... 0 3.b -------------------------------- 4. Loans and Lease financing receivables: RCFD a. Loans and leases, net of unearned income ---- (from Schedule RC-C) 2122.... 14,514,192 ........................ 4.a -------------------------------- b. LESS: Allowance for loans and lease losses 3123.... 444,436 ........................ 4.b ---------- c. LESS: Allocated transfer risk reserve 3128.... 0 ........................ 4.c -------------- d. Loans and leases, net of unearned income, allowance, and reserve (item 4.a minus 4.b and 4.c) 2125.... 14,069,756 4.d ---------------------------- 5. Trading assets (from Schedule RC-D) 3545.... 2,182 5. ------------------------------------------------ 6. Premises and fixed assets (including capitalized leases) 2145.... 406,481 6. --------------------------- 7. Other real estate owned (from Schedule RC-M) 2150.... 57,247 7. --------------------------------------- 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) 2130.... 12,204 8. -------------------------------------------------------------- 9. Customers' liability to this bank on acceptances outstanding 2155.... 10,125 9. ---------------------- 10. Intangible assets (from Schedule RC-M) 2143.... 376,104 10. --------------------------------------------- 11. Other assets (from Schedule RC-F) 2160.... 482,361 11. -------------------------------------------------- 12. Total assets (sum of items 1 through 11) 2170.... 26,095,459 12. -------------------------------------------
-------- (1) Includes cash items in process of collection and unposted debits. (2) Includes time certificates of deposit not held for trading. First Interstate Bank of California Call Date: 03/31/95 ST-BK: 66-6 FFIEC 031 1200 W. 7th St. Vendor ID: D CERT: 01226 Page RC- 2 Los Angeles, CA 90017
Transit Number: 12200021 12 Schedule RC - Continued
Dollar Amounts in Thousands ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES 13. Deposits: RCON a. In domestic offices (sum of totals of columns A and C ---- from Schedule RC-E, Part I) 2200.... 20,732,183 13.a ---------------------------------------------------- (1) Noninterest-bearing (1) 6631.... 8,268,476 ........................ 13.a.1 -------------------------- (2) Interest-bearing 6636.... 12,463,707 ........................ 13.a.2 -------------------------------- RCFN b. In foreign offices, Edge and Agreement subsidiaries, and ---- IBFs (from Schedule RC-E, part II) 2200.... 230,354 13.b -------------------------------------------- (1) Noninterest-bearing 6631.... 0 ......................... 13.b.1 ----------------------------- (2) Interest-bearing 6636.... 230,354 ......................... 13.b.2 -------------------------------- 14. Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: RCFD ---- a. Federal funds purchased 0278.... 2,338,979 14.a -------------------------------------------------------- b. Securities sold under agreements to repurchase 0279.... 353,572 14.b --------------------------------- RCON 15. a. Demand notes issued to the U.S. Treasury 2840.... 0 15.a -------------------------------------- RCFD ---- b. Trading liabilities (from Schedule RC-D) 3548.... 0 15.b -------------------------------------- 16. Other borrowed money: a. With original maturity of one year or less 2332.... 3,990 16.a ------------------------------------- b. With original maturity of more than one year 2333.... 0 16.b ----------------------------------- 17. Mortgage indebtedness and obligations under capitalized leases 2910.... 89,139 17. -------------------- 18. Bank's liability on acceptances executed and outstanding 2920.... 10,125 18. -------------------------- 19. Subordinated notes and debentures 3200.... 75,000 19. ------------------------------------------------- 20. Other liabilities (from Schedule RC-G) 2930.... 288,715 20. -------------------------------------------- 21. Total liabilities (sum of items 13 through 20) 2948.... 24,122,057 21. ------------------------------------ 22. Limited-life preferred stock and related surplus 3282.... 0 22. ---------------------------------- EQUITY CAPITAL RCFD ---- 23. Perpetual preferred stock and related surplus 3838.... 0 23. -------------------------------------- 24. Common stock 3230.... 428,182 24. ----------------------------------------------------------------------- 25. Surplus (excluded all surplus related to preferred stock) 3839.... 664,694 25. -------------------------- 26. a. Undivided profits and capital reserves 3632.... 879,750 26.a ----------------------------------------- b. Net unrealized holding gains (losses) on available-for-sale securities 8434.... 776 26.b ---------------------------------------------------------------------- 27. Cumulative foreign currency translation adjustments 3284.... 0 27. -------------------------------- 28. Total equity capital (sum of items 23 through 27) 3210.... 1,973,402 28. ---------------------------------- 29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21, 22, and 28) 3300.... 26,095,459 29. ---------------------------------------------- Memorandum To be reported only with the March Report of Condition. 1. Indicate in the box at the right the number of the statement below that best describes the most RCFD Number comprehensive level of auditing work performed for the bank ---- ------ by independent external auditors as of any date during 1994 6724.... 2 M.1 ------------------------
1=Independent audit of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the bank 2=Independent audit of the bank's parent holding company conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the consolidated holding company (but not on the bank separately) 3=Directors' examination of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm (may be required by state chartering authority) 4=Director's examination of the bank performed by other external auditors (may be required by state chartering authority) 5=Review of the bank's financial statements by external auditors 6=Compilation of the bank's financial statements by external auditors 7=Other audit procedures (excluding tax preparation work) 8=No External audit work _____________ (1) Includes total demand deposits and noninterest-bearing time and savings deposits.