OFFERING MEMORANDUM$300,000,000

CoreStates Capital III

Floating Rate Capital Trust
Pass-through Securities SM (TRUPS S M )*CoreStates

Liquidation A m o u n t $1,000 per Capital Security)
Fully a n d U n c o n d i t i o n a l l y Guaranteed, a s d e s c r i b e d herein, by

CoreStates Bank, N.A.

The Floating Rate Capital Trust Pass-through Securities SM (the "Capital Securities") offered hereby represent undivided beneficial
ownership interests in the assets of CoreStates Capital III, a Delaware statutory business trust (the "Trust"). CoreStates Bank, N.A., anational banking association (the "Company"), will be the owner of all of the beneficial ownership interests represented by common
securities of the Trust (the "Common Securities"; together with the Capital Securities, the "Trust Securities"). The Trust exists for thesole purpose of issuing the Capital Securities and the Common Securities and investing the proceeds thereof in Floating Rate Junior
Subordinated Debentures (the "Junior Subordinated Debentures") to be issued by the Company. The Junior Subordinated Debentures
will mature on February 15, 2027 (the "Stated Maturity"). Each holder of a Capital Security will have the right to receive $1,000 per
Capital Security in the event of liquidation (the "liquidation amount") and at maturity. The Capital Securities will have a preference
under certain circumstances with respect to cash distributions and amounts payable on liquidation, redemption or otherwise over the
Common Securities. See "Description of Capital Securities—Subordination of Common Securities."
Capital Securities issued in registered, global form will be deposited with a custodian for and registered in the name a nominee of The
Depository Trust Company ("DTC") and beneficial interests in such Capital Securities will be shown on and transfers thereof will beeffected through records maintained by DTC and its participants. Capital Securities sold in reliance on Rule 144A under the Securities
Act of 1933, as amended (the "Securities Act") will be evidenced by global Capital Securities in fully registered form and beneficial
Interests in such Capital Securities will trade in DTC's Same-Day Funds Settlement System and secondary market trading activity insuch interests will therefore settle in immediately available funds. Capital Securities sold in reliance on Regulation S ("Regulation S")
under the Securities Act, will be evidenced by a separate temporary global Capital Security which will be exchangeable for a permanent
global Capital Security not earlier than 40 days after the closing date upon certification of non-U.S. beneficial ownership, and any
Capital Securities sold other than in reliance on Rule 144A or Regulation S will be issued in certificated form.
Application has been made to list the Capital Securities on the Luxembourg Stock Exchange.
See "Risk Factors" beginning on page 12 hereof for certain information relevant to an Investment in the Capital Securities.
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, ANY STATESECURITIES LAWS, OR PART 16 OF THE REGULATIONS OF THE OFFICE OF THE COMPTROLLER OF THE CURRENCY (THE
"OCC") AND MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATIONREQUIREMENTS OF THE SECURITIES ACT. ACCORDINGLY, THE SECURITIES ARE BEING OFFERED HEREBY OUTSIDE THE
UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT. IN ADDITION, RESPECTIVE
AFFILIATES OF THE INITIAL PURCHASERS AND THE COMPANY, MAY OFFER AND SELL THE SECURITIES OFFEREDHEREBY IN THE UNITED STATES ONLY (i) TO QUALIFIED INSTITUTIONAL BUYERS (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN RELIANCE ON AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS PROVIDED BY RULE 144A
OR (ii) TO A LIMITED NUMBER OF OTHER INSTITUTIONAL ACCREDITED INVESTORS (AS DEFINED IN RULE 501(a)(1), (2), (3)OR (7) UNDER THE SECURITIES ACT) THAT EXECUTE AND DELIVER A LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS. PROSPECTIVE PURCHASERS ARE HEREBY NOTIFIED THAT SELLERS OF THE SECURITIES MAY BE
RELYING UPON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT AND FROM PART 16 OF
THE OCC'S REGULATIONS PROVIDED BY RULE 144A, REGULATION S OR OTHER EXEMPTIONS. FOR CERTAIN
RESTRICTIONS ON RESALES, SEE "NOTICE TO INVESTORS".
THE SECURITIES OFFERED HEREBY ARE DIRECT AND UNSECURED OBLIGATIONS OF THE COMPANY, DO NOT EVIDENCEDEPOSITS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (THE "FDIC") OR ANY OTHER
INSURER OR GOVERNMENT AGENCY. THE SECURITIES OFFERED HEREBY WILL BE SUBORDINATE TO THE CLAIMS OFDEPOSITORS AND CERTAIN OTHER CREDITORS OF THE COMPANY AND WILL BE INELIGIBLE AS COLLATERAL TO SECURE
A LOAN FROM THE COMPANY.
The Initial Purchasers have agreed to purchase the Capital Securities from the Trust at $990,345 per Capital Security. The Capital
Securities offered hereby are being offered by the Initial Purchasers, subject to prior sale, when, as and if delivered to and acceptedby the Initial Purchasers and subject to various prior conditions, including their right to reject orders in whole or in part. It is expectedthat delivery of the Capital Securities will be made in book-entry form through the facilities of The Depository Trust Company and incertain circumstances in certificated form on or about January 31, 1997 at the offices of Salomon Brothers Inc, New York, New Yorkagainst payment therefor in immediately available funds.
* Salomon Brothers Inc has filed applications with the United State Patent and Trademark Office for the registration of the "Capital Trust Pass-throughSecurities" and " T R U P S " service marks.

Salomon Brothers Inc
Lehman Brothers
The date of this Offering Memorandum is January 27, 1997.

Bear, Stearns & Co. Inc.

IN CONNECTION WITH THIS OFFERING, SALOMON BROTHERS INC MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
CAPITAL SECURITIES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
Holders of the Capital Securities will be entitled to receive cumulative cash distributions accruing
from the date of original issuance and payable quarterly in arrears on the 15th day of February, May,
August and November of each year, commencing May 15, 1997, at a variable annual rate equal to
LIBOR (as defined herein) plus .57% on the liquidation amount of $1,000 per Capital Security("Distributions"). The distribution rate and the distribution payment dates and other payment dates for
the Capital Securities will correspond to the interest rate and interest payment dates and otherpayment dates on the Junior Subordinated Debentures, which will be the sole assets of the Trust. The
Company will guarantee the payment of Distributions and payments on liquidation of the Trust or
redemption of the Capital Securities, but only in each case to the extent of funds held by the Trust, as
described herein (the "Guarantee"). See "Description of Guarantee." If the Company does not makeinterest payments on the Junior Subordinated Debentures held by the Trust, the Trust will haveinsufficient funds to pay Distributions on the Capital Securities. The Company's obligations under the
Guarantee, taken together with its obligations under the Junior Subordinated Debentures and theIndenture (as defined herein), including its obligation to pay all costs, expenses and liabilities of theTrust (other than with respect to the Capital Securities), constitute a full and unconditional guaranteeof all of the Trust's obligations under the Capital Securities. The obligations of the Company under the
Guarantee and the Junior Subordinated Debentures are subordinate and junior in right of payment to
all Indebtedness (as defined in "Description of Junior Subordinated Debentures—Subordination") of
the Company and will be structurally subordinated to all liabilities and obligations of the Company's
subsidiaries. As of September 30, 1996, approximately $33 billion (which includes approximately $32
billion of bank deposits) aggregate principal amount of Indebtedness (restated to include the accountsof New Jersey National Bank ("New Jersey National"), which was merged into the Company on
December 6, 1996) was outstanding. The terms of the Junior Subordinated Debentures place nolimitation on the amount of Indebtedness that may be incurred by the Company or on the amount ofliabilities and obligations of the Company's subsidiaries. See "Description of Junior SubordinatedDebentures—Subordination."
The Company has the right to defer payment of interest on the Junior Subordinated Debenturesat any time or from time to time for a period not exceeding 20 consecutive quarters with respect toeach deferral period (each, an "Extension Period"), provided that no Extension Period may extend
beyond the Stated Maturity of the Junior Subordinated Debentures. Upon the termination of any such
Extension Period and the payment of all amounts then due on any Interest Payment Date (as defined
herein), the Company may elect to begin a new Extension Period subject to the requirements set forth
herein. Accordingly, there could be multiple Extension Periods of varying lengths throughout the termof the Junior Subordinated Debentures. If interest payments on the Junior Subordinated Debenturesare so deferred, distributions on the Capital Securities will also be deferred and the Company may not,and may not permit any subsidiary of the Company to, (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a liquidation payment with respect to, the Company's
capital stock or (ii) make any payment of principal, interest or premium, if any, on or repay, repurchaseor redeem any debt securities that rank pari passu with or junior to the Junior SubordinatedDebentures or make any guarantee payments with respect to any guarantee by the Company of thedebt securities of any subsidiary of the Company if such guarantee ranks pari passu with or junior to
the Junior Subordinated Debentures (other than (a) repurchases, redemptions or other acquisitions ofshares of capital stock of the Company in connection with any employment contract, benefit plan orother similar arrangement with or for the benefit of any one or more employees, officers, directors or
consultants, or in connection with a dividend reinvestment or stockholder stock purchase plan, (b) as
a result of an exchange or conversion of any class or series of the Company's capital stock (or any
capital stock of a subsidiary of the Company) for any class or series of the Company's capital stock or2

of any class or series of the Company's indebtedness for any class or series of the Company's capitalstock, (c) the purchase of fractional interests in shares of the Company's capital stock pursuant to theconversion or exchange provisions of such capital stock or the security being converted or exchanged,(d) any declaration of a dividend in connection with any stockholder's rights plan, or the issuance ofrights, stock or other property under any stockholder's rights plan, or the redemption or repurchase ofrights pursuant thereto, or (e) any dividend in the form of stock, warrants, options or other rights where
the dividend stock or the stock issuable upon exercise of such warrants, options or other rights is thesame stock as that on which the dividend is being paid (or ranks pari passu with or junior to suchstock)). During an Extension Period, interest on the Junior Subordinated Debentures will continue toaccrue (and the amount of Distributions to which holders of the Capital Securities are entitled willaccumulate) at a variable rate equal to LIBOR plus .57%, compounded quarterly, and holders of theCapital Securities will be required to accrue interest income for United States federal income tax
purposes prior to receipt of the cash related to such interest income. See "Description of Junior
Subordinated Debentures—Option to Extend Interest Payment Period" and "Certain United States
Federal Income Tax Consequences—Interest Income and Original Issue Discount."
The Junior Subordinated Debentures are not redeemable prior to February 15, 2007 unless aSpecial Event (as defined herein) has occurred. The Junior Subordinated Debentures are redeemableprior to maturity at the option of the Company, subject to the receipt of any necessary prior approval
from the OCC (i) on or after February 15, 2007, in whole or in part, at a redemption price equal to theprincipal amount of the Junior Subordinated Debentures so redeemed plus the accrued and unpaid
interest thereon to the redemption date, or (ii) at any time, in whole (but not in part), upon theoccurrence and continuation of a Special Event, at such redemption price. The Capital Securities are
subject to mandatory redemption, in whole or in part, upon repayment of the Junior SubordinatedDebentures at Stated Maturity or their earlier redemption, in an amount equal to the amount of related
Junior Subordinated Debentures maturing or being redeemed and at a redemption price equal to theredemption price of such Junior Subordinated Debentures, in each case plus accumulated and unpaid
Distributions thereon to the date of redemption.
Upon the occurrence and continuation of a Special Event, the Company will have the right, subject
to the receipt of any necessary prior approval from the OCC, to dissolve the Trust and cause the Junior
Subordinated Debentures to be distributed to the holders of the Capital Securities and the Common
Securities in liquidation of the Trust. See "Description of Capital Securities—Redemption—Special
Event Redemption or Distribution of Junior Subordinated Debentures."In the event of the liquidation of the Trust, after satisfaction of the claims of creditors of the Trust,
if any, as provided by applicable law, the holders of the Capital Securities will be entitled to receive aliquidation amount of $1,000 per Capital Security plus accumulated and unpaid Distributions thereon
to the date of payment, which may be in the form of a distribution of such amount in Junior
Subordinated Debentures as described above. If such liquidation amount can be paid only in part
because the Trust has insufficient assets available to pay in full the aggregate liquidation amount, thenthe amounts payable directly by the Trust on the Capital Securities shall be paid on a pro rata basis.
The holder(s) of the Common Securities will be entitled to receive distributions upon any suchliquidation pro rata with the holders of the Capital Securities, except that if an Indenture Event of
Default (as defined herein) has occurred and is continuing, the Capital Securities will have a priority
over the Common Securities. See "Description of Capital Securities—Liquidation Distribution Upon
Dissolution."
Each person receiving this Offering Memorandum acknowledges that (i) such person has beenafforded an opportunity to request and to review, and has received, all additional informationconsidered by it to be necessary to verify the accuracy of or to supplement the information herein and(ii) such person has not relied on the Initial Purchasers or any person affiliated with the Initial
Purchasers in connection with its investigation of the accuracy of such information or its investment
decision.
The distribution of this Offering Memorandum and the offering of the Capital Securities in certain
jurisdictions may be restricted by law. Persons into whose possession this Offering Memorandum3

comes are required by the Initial Purchasers, the Trust and the Company to inform themselves about
and to observe any such restrictions. This Offering Memorandum does not constitute, and may not be
used for or in connection with, an offer or solicitation by anyone in any jurisdiction in which such offer
or solicitation is not authorized or to any person to whom it is unlawful to make such offer orsolicitation. For a further description of restrictions on offers and sales, see "Plan of Distribution" and"Notice to Investors."
No action has been taken by the Company, the Trust or the Initial Purchasers that would permit
an offering of the Capital Securities or the circulation or distribution of this Offering Memorandum or
any offering material in relation to the Company, the Trust or the Capital Securities in any country or
jurisdiction where action for that purpose is required.
THE CONTENTS OF THIS OFFERING MEMORANDUM ARE NOT TO BE CONSTRUED AS
LEGAL, BUSINESS OR TAX ADVICE. EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITSOWN ATTORNEY, BUSINESS ADVISOR OR TAX ADVISOR AS TO LEGAL, BUSINESS AND TAXADVICE.
IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE COMPANY, THE TRUST AND THE TERMS OF THE OFFERING,INCLUDING THE MERITS AND RISKS INVOLVED. THE CAPITAL SECURITIES HAVE NOT BEEN
RECOMMENDED BY THE OCC OR ANY FEDERAL OR STATE SECURITIES COMMISSION OR
REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOTCONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE,
THE CAPITAL SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY ANDRESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT, PART 16 OF THE REGULATIONS OF THE OCC AND APPLICABLE STATESECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORSSHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THISINVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, IS MADE BY THE INITIAL
PURCHASERS AS TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION SETFORTH HEREIN, AND NOTHING CONTAINED IN THIS OFFERING MEMORANDUM IS, OR SHALL
BE RELIED UPON AS, A PROMISE OR REPRESENTATION WHETHER AS TO THE PAST OR THE
FUTURE. THE INITIAL PURCHASERS HAVE NOT INDEPENDENTLY VERIFIED ANY OF SUCHINFORMATION AND ASSUME NO RESPONSIBILITY FOR ITS ACCURACY OR COMPLETENESS.
NO EMPLOYEE BENEFIT OR OTHER PLAN OR INDIVIDUAL RETIREMENT ACCOUNTSUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED(EACH, A "PLAN"), NO ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY
REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY (A "PLAN ASSET ENTITY"), AND NOPERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THE CAPITALSECURITIES OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASE OR HOLDING IS
COVERED BY THE EXEMPTIVE RELIEF PROVIDED BY U.S. DEPARTMENT OF LABORPROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 96-23, 95-60, 91-38, 90-1 OR 84-14
OR ANOTHER APPLICABLE EXEMPTION WITH RESPECT TO SUCH PURCHASE OR HOLDING.
ANY PURCHASER OR HOLDER OF THE CAPITAL SECURITIES OR ANY INTEREST THEREIN
WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THATEITHER (A) THE PURCHASER AND HOLDER IS NOT A PLAN OR A PLAN ASSET ENTITY AND IS
NOT PURCHASING SUCH SECURITIES ON BEHALF OF OR WITH "PLAN ASSETS" OF ANY PLAN
OR (B) THE PURCHASE AND HOLDING OF THE CAPITAL STOCKS IS COVERED BY THE
EXEMPTIVE RELIEF PROVIDED BY PTCE 96-23, 95-60, 91-38, 90-1, OR 84-14 OR ANOTHERAPPLICABLE EXEMPTION WITH RESPECT TO SUCH PURCHASE OR HOLDING.
4NOTICE TO NEW HAMPSHIRE INVESTORSNEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A
LICENSE HAS BEEN FILED UNDER CHAPTER 421-B WITH THE STATE OF NEW HAMPSHIRENOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS
LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE
SECRETARY OF STATE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE
AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR
EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE
SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS
OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY, OR
TRANSACTION. IT IS UNLAWFUL TO MAKE OR CAUSE TO BE MADE TO ANY PROSPECTIVE
PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE
PROVISIONS OF THIS PARAGRAPH.

5

AVAILABLE INFORMATIONThe Company submits quarterly to the OCC certain reports called "Consolidated Reports ofCondition and Income" ("Call Reports"). The Call Reports are publicly available at the OCC, 250 E
Street, S.W., Washington, D.C. 20219. Each Call Report consists of a Balance Sheet, Income
Statement, Changes in Equity Capital and other supporting schedules as of and for the period to which
the report relates. The Call Reports are prepared in accordance with regulatory instructions issued by
the Federal Financial Institutions Examination Council. Because of the special supervisory, regulatory
and economic policy needs served by these Call Reports, those regulatory instructions do not in allcases follow generally accepted accounting principles. White the Call Reports are supervisory andregulatory documents, not primarily accounting documents, and do not provide a complete range offinancial disclosure about the Company, the reports nevertheless provide important information
concerning the Company.
The Company is a wholly-owned subsidiary of CoreStates Financial Corp (the "Holding
Corporation" and together with its subsidiaries, "Holdings"), a bank holding company organized under
the laws of the Commonwealth of Pennsylvania. The Holding Corporation is subject to the reporting
requirements of Sections 13 and 15(d) of the Securities Exchange Act of 1934, as amended (the"Exchange Act"). Any reports and other information filed by the Holding Corporation with the Securities
and Exchange Commission (the "Commission") may be inspected and copied at the public reference
facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the Commission's regional offices in Chicago, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and in New York, Seven World Trade Center, 13th Floor, New York, New York
10048. Copies of such material may also be obtained by mail from the Public Reference Section of
the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Commission maintains a Web site (http://www.sec.gov) that contains reports, proxy andinformation statements and other information regarding registrants, such as the Holding Corporation,that file electronically with the Commission.
No separate financial statements of the Trust have been included herein and no separate financial
statements will be prepared in the future. The Company and the Trust do not consider that suchfinancial statements would be material to holders of the securities offered hereby because (i) all of thevoting securities of the Trust will be owned, directly or indirectly, by the Company, (ii) the Trust has no
independent operations and exists for the sole purpose of issuing securities representing undivided
beneficial interests in the assets of the Trust and investing the proceeds thereof in the representative
series of Junior Subordinated Debentures issued by the Company, and (iii) the obligations of the Trustunder its Capital Securities are fully and unconditionally guaranteed by the Company to the extent theTrust has funds available to meet such obligations.
The Company has agreed that it will furnish to holders and beneficial owners of the Capital
Securities and the prospective purchasers designated by such holders the information required to bedelivered pursuant to Rule 144(d)(4) under the Securities Act (or any successor regulation or a statute)to permit compliance with Rule 144A in connection with the resales of the Capital Securities.

6

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Call Reports filed with the OCC by the Company and by New Jersey National, (a whollyowned subsidiary of the Holding Corporation that was merged into the Company on December 6,
1996) for the quarter ended September 30, 1996 are incorporated herein by reference.
In addition to the Call Reports referred to above, the following documents, which have been filedby the Holding Corporation with the Commission, are incorporated by reference in this Offering
Memorandum:(i) the Holding Corporation's Annual Report on Form 10-K for the year ended December 31,
1995;(ii) the Holding Corporation's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1996, June 30, 1996 and September 30, 1996; and(iii) the Holding Corporation's Current Reports on Form 8-K dated January 8, 1996, January
17, 1996, April 3, 1996, April 9, 1996, April 17, 1996, June 13, 1996, June 28, 1996, July 17, 1996,
October 16, 1996, January 22, 1997 and on Form 8-K/A on July 17, 1996.
All documents filed by the Holding Corporation pursuant to Sections 13(a), 14 or 15(d) of the
Exchange Act, and the non-confidential portions of all Call Reports filed by the Company with the OCC,
after the date of this Offering Memorandum and prior to the termination of the offering hereunder shallbe deemed to be incorporated by reference in this Offering Memorandum and to be a part hereof fromthe date of filing of such documents. Any statement contained in a document incorporated by referenceor deemed to be incorporated by reference herein shall be deemed to be modified or superseded forall purposes of this Offering Memorandum to the extent that a statement contained herein or in any
subsequently filed document that is also incorporated or deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified or superseded shallnot be deemed, except as so modified or superseded, to constitute a part of this Offering
Memorandum.
All information relating to the Holding Corporation is included or incorporated by reference
herein for informational purposes only and the Offered Securities are neither obligations of nor
guaranteed by the Holding Corporation or any of its affiliates other than the Company and theTrust.
The Company will provide without charge to each person to whom a copy of this Offering
Memorandum has been delivered, on the written or oral request of such person, a copy of any or all of
the documents referred to above that have been or may be incorporated in this Offering Memorandum
by reference, other than exhibits to such documents, unless such exhibits are specifically incorporated
by reference therein. Requests for such copies should be directed to: CoreStates Financial Corp,
Centre Square, West Tower, 1500 Market Street, Philadelphia, PA 19101, Attention: Investor
Relations. In addition, such documents are available, free of charge, from Chase Manhattan Bank
Luxembourg, S.A., 5 Rue Plaetia, L-2338, Luxembourg.

7

OFFERING MEMORANDUM SUMMARY
This summary is qualified by the more detailed information and financial statements appearing
elsewhere, or incorporated by reference, in this Offering Memorandum. Prospective investors are
urged to read this Offering Memorandum in its entirety.
The Company
The Company is a national banking association with its principal office in Philadelphia,
Pennsylvania. The Company offers a wide range of domestic and international commercial banking,retail banking and trust and asset management services to its customers. At September 30, 1996, theCompany had total assets of $34.2 billion, total loans (net of unearned income) of $24.3 billion, total
deposits of $25.9 billion and total equity capital of $2.6 billion. On December 6, 1996, New Jersey
National merged with and into the Company. At September 30, 1996, New Jersey National had total
assets of $8.0 billion, total loans (net of unearned income) of $5.1 billion, total deposits of $7.0 billion
and total equity capital of $0.5 billion. The Company was created, pursuant to a merger of two banks,
on October 1, 1990.
The Company's business is subject to examination and regulation by federal banking authorities.
Its primary federal bank regulatory authority is the OCC. The Company is a wholly-owned subsidiaryof the Holding Corporation, a bank holding company organized under the laws of the Commonwealthof Pennsylvania. The Holding Corporation, through its subsidiaries, provides a broad range of financial
services.
The Company's principal address is Centre Square, West Tower, 1500 Market St., Philadelphia,
PA 19101.

The Trust
Securities Offered

Distributions

Junior SubordinatedDebentures

The Offering
CoreStates Capital III, a Delaware statutory business trust. The soleassets of the Trust will be the Junior Subordinated Debentures.
Capital Securities evidencing undivided beneficial ownership interests in the assets of the Trust. The holders thereof will be entitledto a preference in certain circumstances with respect to Distributions and amounts payable on redemption, liquidation or otherwise
over the Common Securities. See "Description of Capital Securities—Subordination of Common Securities."
Holders of the Capital Securities will be entitled to receive cumulative cash distributions at a variable annual rate equal to LIBOR plus
.57% on the liquidation amount of $1,000 per Capital Security, accruing from the date of original issuance and payable quarterly inarrears on the 15th day of February, May, August and November of
each year commencing on May 15, 1997. The distribution rate andthe distribution and other payment dates for the Capital Securities
will correspond to the interest rate and interest and other payment
dates on the Junior Subordinated Debentures. See "Description of
Capital Securities."
The Trust will invest the proceeds from the issuance of the Capital
Securities and Common Securities in an equivalent principal
amount of Junior Subordinated Debentures of the Company. The
Junior Subordinated Debentures will mature on February 15, 2027.
The Junior Subordinated Debentures will rank subordinate and ju-

8nior in right of payment to all Indebtedness of the Company to theextent described herein. In addition, the Company's obligations under the Junior Subordinated Debentures will be effectively subordinated to all existing and future liabilities and obligations of its subsidiaries. See "Risk Factors—Ranking of Subordinated Obligations
Under the Guarantee and the Junior Subordinated Debentures" and"Description of Junior Subordinated Debentures—Subordination."
Guarantee

Payment of distributions out of moneys held by the Trust, and payments on liquidation of the Trust or the redemption of Capital Securities, are guaranteed by the Company to the extent the Trust has
funds available therefor. If the Company does not make principal orinterest payments on the Junior Subordinated Debentures, the Trust
will not have sufficient funds to make Distributions on the Capital
Securities, in which event the Guarantee shall not apply to such
Distributions until the Trust has sufficient funds available therefor.
The Company's obligations under the Guarantee, taken together
with its obligations under the Junior Subordinated Debentures andthe Indenture, including its obligation to pay all costs, expenses andliabilities of the Trust (other than with respect to the Capital Securities), constitute a full and unconditional guarantee of all of theTrust's obligations under the Capital Securities. See "Description of
Guarantee" and "Relationship Among the Capital Securities, the Junior Subordinated Debentures and the Guarantee." The obligationsof the Company under the Guarantee are subordinate and junior inright of payment to all Indebtedness of the Company to the extent
described herein. See "Risk Factors—Ranking of Subordinated Obligations Under the Guarantee and the Junior Subordinated Debentures" and "Description of Guarantee."Right to Defer Interest

The Company has the right to defer payment of interest on the Junior Subordinated Debentures by extending the interest payment
period on the Junior Subordinated Debentures, from time to time,
for up to 20 consecutive quarters. There could be multiple Extension
Periods of varying lengths throughout the term of the Junior Subordinated Debentures. If interest payments on the Junior Subordinated Debentures are so deferred, distributions on the Capital Securities will also be deferred for an equivalent period and the Company may not, and may not permit any subsidiary of the Company
to, (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to,
the Company's capital stock or (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any
debt securities that rank pari passu with or junior to the Junior Subordinated Debentures or make any guarantee payments with respect to any guarantee by the Company of the debt securities ofany subsidiary of the Company if such guarantee ranks pari passu
with or junior to the Junior Subordinated Debentures (other than (a)repurchases, redemptions or other acquisitions of shares of capitalstock of the Company in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of9any one or more employees, officers, directors or consultants, or inconnection with a dividend reinvestment or stockholder stock purchase plan, (b) as a result of an exchange or conversion of any
class or series of the Company's capital stock (or any capital stockof a subsidiary of the Company) for any class or series of theCompany's capital stock or of any class or series of the Company's
indebtedness for any class or series of the Company's capital stock,(c) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions ofsuch capital stock or the security being converted or exchanged, (d)any declaration of a dividend in connection with any stockholder's
rights plan, or the issuance of rights, stock or other property under
any stockholder's rights plan, or the redemption or repurchase ofrights pursuant thereto, or (e) any dividend in the form of stock,
warrants, options or other rights where the dividend stock or thestock issuable upon exercise of such warrants, options or otherrights is the same stock as that on which the dividend is being paid(or ranks pari passu with or junior to such stock)). During an Extension Period, interest on the Junior Subordinated Debentures willcontinue to accrue (and the amount of Distributions to which holdersof the Capital Securities are entitled will accumulate) at a variableannual rate equal to LIBOR plus .57%, compounded quarterly. During an Extension Period, holders of Capital Securities will be required to include the interest (and the de minimis OID) accrued on
their pro rata share of the Junior Subordinated Debentures in theirgross income as original issue discount ("OID") even though the
cash payments attributable thereto have not been made. See "Description of Junior Subordinated Debentures—Option to Extend Interest Payment Period" and "Certain United States Federal Income
Tax Consequences—Interest Income and Original Issue Discount."
Redemption

The Junior Subordinated Debentures are redeemable by the Company in whole or in part on or after February 15, 2007, or at any
time, in whole but not in part, upon the occurrence of a Special
Event, in either case subject to any necessary prior approval of the
OCC. If the Junior Subordinated Debentures are redeemed, theTrust must redeem Trust Securities having an aggregate liquidation
amount equal to the aggregate principal amount of the Junior Subordinated Debentures so redeemed. The Trust Securities will be redeemed upon maturity of the Junior Subordinated Debentures. See"Description of Capital Securities—Redemption—Mandatory Redemption" and "—Special Event Redemption or Distribution of Junior Subordinated Debentures."

Liquidation of the Trust

Upon the occurrence and continuation of a Special Event, the Company will have the right, subject to any necessary prior approval of
the OCC, to dissolve the Trust and cause the Junior SubordinatedDebentures to be distributed to the holders of the Capital Securities
and the Common Securities in liquidation of the Trust. See "Description of Capital Securities—Redemption—Special Event Redemption or Distribution of Junior Subordinated Debentures."10

In the event of the liquidation of the Trust, after satisfaction of theclaims of creditors of the Trust, if any, as provided by applicablelaw, the holders of the Capital Securities will be entitled to receive aliquidation amount of $1,000 per Capital Security plus accumulated
and unpaid Distributions thereon to the date of payment, which may
be in the form of a distribution of such amount in Junior Subordinated Debentures as described above. If such Liquidation Distribution (as defined herein) can be paid only in part because the Trust
has insufficient assets available to pay in full the aggregate Liquidation Distribution, then the amounts payable directly by the Trust on
the Capital Securities shall be paid on a pro rata basis. The holders) of the Common Securities will be entitled to receive distributions upon any such liquidation pro rata with the holders of the Capital Securities, except that if an Indenture Event of Default has occurred and is continuing, the Capital Securities shall have a priority
over the Common Securities. See "Description of Capital Securities—Liquidation Distribution Upon Dissolution."
Use of Proceeds

The proceeds from the sale of the Capital Securities will be used topurchase the Junior Subordinated Debentures. The Company expects to use the proceeds from the sale of the Junior SubordinatedDebentures for general corporate purposes, which may include therepayment of indebtedness, investments in and extensions of credit
to its subsidiaries and the financing of possible acquisitions. Although the Company from time to time evaluates potential acquisitions, it currently has no understandings, commitments or agreements with respect to any acquisitions. See "Use of Proceeds."

Ratings

It is expected that the Capital Securities will be rated " a 1 " byMoody's Investors Service, Inc. and " A – " by Standard & Poor's
Ratings Group. A security rating is not a recommendation to buy,sell or hold securities and may be subject to revision or withdrawal
at any time by the assigning rating organization.

Form of Capital Securities .

Capital Securities offered and sold to qualified institutional buyers inreliance on Rule 144A initially will be represented by one or more
Capital Securities in registered, global form. Capital Securities offered and sold to institutional accredited investors in transactions
exempt from registration under the Securities Act not made in reliance on Rule 144A or Regulation S will be issued only in registered,certificated form. Capital Securities offered and sold outside of theUnited States in reliance on Regulation S under the Securities Act
will be issued in the form of a single temporary global Capital Security which will be exchanged for beneficial interests in a single permanent global Capital Security upon the later of (i) the Restricted
Period (as defined herein) and (ii) the first date on which the requisite certifications are provided to the Property Trustee as describedunder "Book-Entry Issuance—Payments; Certifications by Holders
of Regulation S Temporary Capital Securities."

Listing/Application

Application has been made to list the Capital Securities on the
Luxembourg Stock Exchange.

11

RISK FACTORS
Prospective purchasers of the Capital Securities should carefully review the information contained
elsewhere in this Offering Memorandum and should particularly consider the following matters. Certain
statements in this Offering Memorandum and documents incorporated herein by reference are forwardlooking and are identified by the use of forward-looking words or phrases such as "intended," "will bepositioned," "expects," is or are "expected," "anticipates," and "anticipated." These forward-looking
statements are based on the Company's current expectation. To the extent any of the information
contained or incorporated by reference in this Offering Memorandum constitutes a "forward-looking
statement" as defined in Section 21E(i)(1) of the Exchange Act, the risk factors set forth below are
cautionary statements identifying important factors that could cause actual results to differ materiallyfrom those in the forward-looking statement.
Ranking of Subordinated Obligations under the Guarantee and the Junior SubordinatedDebentures
The obligations of the Company under the Guarantee issued by the Company for the benefit of
the holders of Capital Securities and under the Junior Subordinated Debentures are unsecured andrank subordinate and junior in right of payment to all Indebtedness of the Company to the extent
described herein. At September 30, 1996, the Indebtedness of the Company (restated to include theaccounts of New Jersey National which was merged into the Company in December 1996) aggregatedapproximately $33 billion (which includes approximately $32 billion in bank deposits). Neither the
Indenture, the Guarantee nor the Declaration (as defined herein) places any limitation on the amountof secured or unsecured Indebtedness that may be incurred by the Company or on the amount ofliabilities and obligations of the Company's subsidiaries. See "Description of Guarantee—Status of the
Guarantee and Description of Junior Subordinated Debentures–Subordination."
Enforcement of Certain Rights by Holders of Capital Securities
If a Trust Enforcement Event (as defined herein) occurs and is continuing, then the holders ofCapital Securities would rely on the enforcement by the Property Trustee (as defined herein) of its
rights as a holder of the Junior Subordinated Debentures against the Company. The holders of amajority in liquidation amount of the Capital Securities will have the right to direct the time, method andplace of conducting any proceeding for any remedy available to the Property Trustee or to direct theexercise of any trust or power conferred upon the Property Trustee under the Declaration, including
the right to direct the Property Trustee to exercise the remedies available to it as a holder of the Junior
Subordinated Debentures. If the Property Trustee fails to enforce its rights with respect to the Junior
Subordinated Debentures held by the Trust, any record holder of Capital Securities may, to the fullest
extent permitted by law, institute legal proceedings directly against the Company to enforce theProperty Trustee's rights under such Junior Subordinated Debentures without first instituting any legal
proceedings against such Property Trustee or any other person or entity.
If the Company were to default on its obligation to pay amounts payable under the Junior
Subordinated Debentures, the Trust would lack funds for the payment of Distributions or amounts
payable on redemption of the Capital Securities or otherwise, and, in such event, holders of the Capital
Securities would not be able to rely upon the Guarantee for payment of such amounts. However, inthe event the Company failed to pay interest on or principal of the Junior Subordinated Debentures on
the payment date on which such payment is due and payable, then a holder of Capital Securities may
institute a proceeding directly against the Company under the indenture for enforcement of payment
to such holder of the interest on or principal of Junior Subordinated Debentures having a principal
amount equal to the aggregate liquidation amount of the Capital Securities of such holder (a "Direct
Action"). In connection with such Direct Action, the Company will be subrogated to the rights of suchholder of Capital Securities under the Declaration to the extent of any payment made by the Company
12

to such holder of Capital Securities in such Direct Action. Except as set forth herein, holders of Capital
Securities will not be able to exercise directly any other remedy available to the holders of Junior
Subordinated Debentures or assert directly any other rights in respect of the Junior SubordinatedDebentures. See "Description of Capital Securities—Trust Enforcement Events", "Description of
Guarantee" and "Description of Junior Subordinated Debentures—Indenture Events of Default." The
Declaration provides that each holder of Capital Securities by acceptance thereof agrees to theprovisions of the Guarantee and the Indenture.
Option to Extend Interest Payment Period; Tax Consequences
The Company has the right under the Indenture to defer the payment of interest on the Junior
Subordinated Debentures at any time or from time to time for a period not exceeding 20 consecutive
quarters, provided that no Extension Period may extend beyond the Stated Maturity of the Junior
Subordinated Debentures. As a consequence of any such deferral, quarterly Distributions on the
Capital Securities by the Trust will be deferred during any such Extension Period but would continue
to accumulate at a variable annual rate equal to LIBOR plus .57%, compounded quarterly during any
such Extension Period. During any such Extension Period, the Company may not, and may not permit
any subsidiary of the Company to, (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of the Company's capital stockor (ii) make any payment of principal, interest or premium, if any, on or repay, repurchase or redeem
any debt securities of the Company that rank pari passu with or junior to the Junior SubordinatedDebentures or make any guarantee payments with respect to any guarantee by the Company of thedebt securities of any subsidiary of the Company if such guarantee ranks pari passu with or junior to
the Junior Subordinated Debentures (other than (a) repurchases, redemptions or other acquisitions ofshares of capital stock of the Company in connection with any employment contract, benefit plan orother similar arrangement with or for the benefit of any one or more employees, officers, directors or
consultants, or in connection with a dividend reinvestment or stockholder stock purchase plan, (b) as
a result of an exchange or conversion of any class or series of the Company's capital stock (or any
capital stock of a subsidiary of the Company) for any class or series of the Company's capital stock orof any class or series of the Company's indebtedness for any class or series of the Company's capitalstock, (c) the purchase of fractional interests in shares of the Company's capital stock pursuant to theconversion or exchange provisions of such capital stock or the security being converted or exchanged,(d) any declaration of a dividend in connection with any stockholder's rights plan, or the issuance ofrights, stock or other property under any stockholder's rights plan, or the redemption or repurchase ofrights pursuant thereto, or (e) any dividend in the form of stock, warrants, options or other rights where
the dividend stock or the stock issuable upon exercise of such warrants, options or other rights is thesame stock as that on which the dividend is being paid (or ranks pari passu with or junior to suchstock)). Prior to the termination of any such Extension Period, the Company may further extend theExtension Period, provided that no Extension Period may exceed 20 consecutive quarters or extend
beyond the Stated Maturity of the Junior Subordinated Debentures. Upon the termination of any
Extension Period and the payment of all amounts then due on any Interest Payment Date, theCompany may elect to begin a new Extension Period subject to the above requirements. See"Description of Capital Securities—Distributions" and "Description of Junior Subordinated Debentures—Option to Extend Interest Payment Period."
Should the Company defer payment of interest on the Junior Subordinated Debentures, a holder
of Capital Securities will be required to accrue income (in the form of OID) (which will include bothstated interest and the de minimus OID on the Junior Subordinated Debentures) for United Statesfederal income tax purposes in respect of its pro rata share of the Junior Subordinated Debentures
held by the Trust. As a result, a holder of Capital Securities will be required to include such interest
13

income in gross income for United States federal income tax purposes in advance of the receipt ofcash attributable to such interest income, and will not receive the cash related to such income fromthe Trust if the holder disposes of the Capital Securities prior to the record date for the payment ofDistributions with respect to such Extension Period. See "Certain United States Federal Income Tax
Consequences—Interest Income and Original Issue Discount" and "—Sales of Capital Securities."
The Company has no current intention of exercising its right to defer payments of interest byextending the interest payment period on the Junior Subordinated Debentures. However, should theCompany elect to exercise such right in the future, the market price of the Capital Securities is likely
to be adversely affected. A holder that disposes of its Capital Securities during an Extension Period,
therefore, might not receive the same return on its investment as a holder that continues to hold its
Capital Securities. In addition, as a result of the Company's right to defer interest payments, the market
price of the Capital Securities (which represent undivided beneficial ownership interests in the Junior
Subordinated Debentures) may be more volatile than the market prices of other similar securities
where the issuer does not have such right to defer interest payments.
Special Event Redemption; Proposed Tax Law Changes
Upon the occurrence and continuation of a Special Event, the Company has the right, subject to
any necessary prior approval of the OCC, to redeem the Junior Subordinated Debentures in whole (butnot in part) within 90 days following the occurrence of such Special Event and thereby cause amandatory redemption of the Capital Securities and Common Securities. A "Special Event" means aTax Event, a Regulatory Capital Event or an Investment Company Event (each as defined herein).
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill") was introduced in the104th Congress which would have, among other things, generally denied interest deductions forinterest on an instrument, issued by a corporation, that has a maximum term of more than 20 years
and that is not shown as indebtedness on the separate balance sheet of the issuer or, where theinstrument is issued to a related party (other than a corporation), where the holder or some otherrelated party issues a related instrument that is not shown as indebtedness on the issuer's
consolidated balance sheet. This provision of the Bill was proposed to be effective generally for
instruments issued on or after December 7, 1995. If this provision were to apply to the Junior
Subordinated Debentures, the Company would not be able to deduct interest on the Junior
Subordinated Debentures. However, on March 29, 1996, the Chairmen of the Senate Finance andHouse Ways and Means Committees issued a joint statement (the "Joint Statement") to the effect that
it was their intention that the effective date of the Bill, if enacted, would be no earlier than the date of
appropriate Congressional action. In addition, subsequent to the publication of the Joint Statement,
Senator Daniel Patrick Moynihan and Representatives Sam M. Gibbons and Charles B. Rangel wrote
letters to Treasury Department officials concurring with the view expressed in the Joint Statement (the"Democrat Letters"). The 104th Congress adjourned without enacting the Bill. Moreover, if theprinciples contained in the Joint Statement and the Democrat Letters were followed, any similar
legislation that is subsequently enacted would not apply to the Junior Subordinated Debentures. It is
possible that similar legislative proposals may be offered by the Administration and considered by
Congress in 1997. There can be no assurance that future legislative or administrative proposals or final
legislation will not adversely affect the ability of the Company to deduct interest on the Junior
Subordinated Debentures or otherwise affect the tax treatment described herein. Such a change,
therefore, could give rise to a Tax Event, which would permit the Company to cause a redemption of
the Capital Securities or to dissolve the Trust and distribute the Junior Subordinated Debentures to theholders of Trust Securities in liquidation of the Trust as described more fully under "Description of
Capital Securities—Redemption—Special Event Redemption or Distribution of Junior SubordinatedDebentures."14

Liquidation Distribution of Junior Subordinated Debentures
Upon the occurrence and continuation of a Special Event the Company will have the right, subject
to any necessary prior approval of the OCC, to dissolve the Trust and, after satisfaction of the claimsof creditors of the Trust, if any, as provided by applicable law, cause the Junior SubordinatedDebentures to be distributed to the holders of the Capital Securities and the Common Securities inliquidation of the Trust. In addition, upon liquidation of the Trust and certain other events, aftersatisfaction of the claims of creditors of the Trust, if any, as provided by applicable law, the Junior
Subordinated Debentures may be distributed to such holders. Under current United States federal
income tax law and interpretations thereof and assuming, as expected, the Trust is treated as a grantor
trust for United States federal income tax purposes, a distribution by the Trust of the Junior
Subordinated Debentures pursuant to a liquidation of the Trust will not be a taxable event to the Trustor to holders of the Capital Securities, and will result in a holder of the Capital Securities receiving
directly such holder's pro rata share of the Junior Subordinated Debentures (previously held indirectly
through the Trust). If, however, the liquidation of the Trust were to occur because the Trust is subject
to United States federal income tax with respect to income accrued or received on the Junior
Subordinated Debentures as a result of the occurrence of a Tax Event or otherwise, the distribution of
Junior Subordinated Debentures to holders of the Capital Securities by the Trust could be a taxable
event to the Trust and each such holder, and holders of the Capital Securities may be required torecognize gain or loss as if they had exchanged their Capital Securities for the Junior SubordinatedDebentures they receive upon the liquidation of the Trust. See "Certain United States Federal Income
Tax Consequences—Distribution of Junior Subordinated Debentures or Cash Upon Liquidation of theTrust."
There can be no assurance as to the market prices for Capital Securities or Junior SubordinatedDebentures that may be distributed in exchange for Capital Securities if a liquidation of the Trustoccurs. Accordingly, the Capital Securities that an investor may purchase, whether pursuant to theoffer made hereby or in the secondary market, or the Junior Subordinated Debentures that a holder ofCapital Securities may receive on liquidation of the Trust, may trade at a discount to the price that theinvestor paid to purchase the Capital Securities offered hereby. Because holders of Capital Securities
may receive Junior Subordinated Debentures on termination of the Trust, prospective purchasers ofCapital Securities are also making an investment decision with regard to the Junior SubordinatedDebentures and should carefully review all the information regarding the Junior SubordinatedDebentures contained herein. See "Description of Capital Securities—Redemption—Special Event
Redemption or Distribution of Junior Subordinated Debentures" and "Description of Junior
Subordinated Debentures—General."
Limited Voting Rights
Holders of Capital Securities generally will have limited voting rights relating only to themodification of the Capital Securities and certain other matters described herein. Holders of Capital
Securities will not be entitled to vote to appoint, remove or replace any of the Trustees (as defined
below), which voting rights are vested exclusively in the holder of the Common Securities, unless a
Declaration Event of Default shall have occurred and is continuing. The Trustees and the Company
may amend the Declaration without the consent of holders of Capital Securities to ensure that the Trust
will be classified as a grantor trust for United States federal income tax purposes even if such action
adversely affects the interests of such holders. See "Description of Capital Securities—Voting Rights;
Amendment of the Declaration."
Absence of Public Market; Restrictions on Transfer
Prior to this offering there has been no public market for the Capital Securities. The Initial
Purchasers have advised the Company that they intend to make a market in the Capital Securities
15

after the consummation of this offering, as permitted by applicable laws and regulations; however, theInitial Purchasers are not obligated to do so, and may discontinue any such market making activities
at any time without notice. Therefore, there can be no assurance that an active market for the Capital
Securities will develop. If a trading market for the Capital Securities does develop, the Capital
Securities may trade at a discount from their initial offering price depending upon prevailing interest
rates, the market for similar securities, the performance of the Company and other factors. Application
has been made to list the Securities on the Luxembourg Stock Exchange.
The Capital Securities have not been registered under the Securities Act or Part 16 of theregulations of the OCC. The Capital Securities may only be offered or sold pursuant to an exemption
from the registration requirements of the Securities Act, Part 16 of the OCC's regulations andapplicable state securities laws or pursuant to an effective registration statement under the Securities
Act, Part 16 of the OCC's regulations and applicable state securities laws. See "Description of Capital
Securities" and "Plan of Distribution."
Consequences of Highly Leveraged Transaction
The Indenture does not contain any provisions that afford holders of the Junior SubordinatedDebentures protection in the event of a highly leveraged transaction, including a change of control, orother similar transactions involving the Company that may adversely affect such holders. See"Description of Junior Subordinated Debentures."16

USE OF PROCEEDSAll of the net proceeds from the sale of Capital Securities which total approximately $297,103,500
will be invested by the Trust in Junior Subordinated Debentures. The Company expects to use theproceeds from the sale of such Junior Subordinated Debentures for general corporate purposes, which
may include the repayment of indebtedness, investments in or extensions of credit to its subsidiaries
and the financing of possible acquisitions. Although the Company from time to time evaluates potential
acquisitions, it currently has no understandings, commitments or agreements with respect to any
acquisitions. Pending such use, the net proceeds may be temporarily invested in short-term
obligations. The precise amounts and timing of the application of proceeds will depend upon thefunding requirements of the Company and its subsidiaries and the availability of other funds. The
Company may engage in other financings in the future.
RATIO OF EARNINGS TO FIXED CHARGESThe Company's consolidated ratios of earnings to fixed charges for each of the periods indicatedare set forth below (unaudited):

Earnings to Fixed Charges:
Excluding Interest on Deposits
Including Interest on Deposits

Nine Months
Ended
September 30,
1996(a)

1995

1994

7.61
1.82

5.48
1.71

3.94
1.59

Year Ended
December 31,(a) Restated to include the accounts of affiliated banks (New Jersey National, Meridian Bank—Pennsylvania, Delaware Trust
Company, Meridian Bank—New Jersey and United Counties) which were merged into the Company at various times since
December 31, 1995.

For purposes of computing the ratios of earnings to fixed charges, earnings represent net income
plus applicable income taxes and fixed charges. Fixed charges, excluding interest on deposits,
represent interest expense (except interest on deposits), capitalized interest and the interest factor
included in rents. Fixed charges, including interest on deposits, represent all interest expense,
capitalized interest and the interest factor included in rents. There were no shares of preferred stock
outstanding during any of the periods above indicated.
ACCOUNTING TREATMENT
For financial reporting purposes, the Trust will be treated as a subsidiary of the Company and,accordingly, the accounts of the Trust will be included in the consolidated financial statements of theCompany. The Capital Securities will be presented in the consolidated balance sheet of the Company
as a separate line item directly above stockholders' equity under the caption "Minority Interests—
Preferred Stock Issued by Subsidiaries" or a similar caption. The Company will record Distributions
payable on the Capital Securities as minority interest expense in its consolidated statement of income.

17

CAPITALIZATION
The following table sets forth the consolidated capitalization of the Company and its subsidiaries
as of September 30, 1996, and as adjusted to give effect to the issuance of the guaranteed preferredbeneficial interests in the Company's Junior Subordinated Debentures, issued December 19, 1996,
and the consummation of the offering of the Capital Securities. Other than the adjustment described in
the previous sentence, there has been no material change in the capitalization of the Company since
September 30, 1996.
September 30, 1996(a)ActualAs Adjusted(Dollars in thousands)

Long-term debt:
Direct obligations of Company (b)Obligations of Company subsidiaries$ 622,475
1,000$ 622,475
1,000

Total long-term debt

623,475

623,475——

450,000
300,000—

750,000—
37,3082,603,464
3,448
527,374—
37,3082,603,464
3,448
527,374

Minority Interests:
Preferred Stock Issued by Subsidiaries—issued December 19, 1996
and issued January 23, 1997 (c)Preferred Stock Issued by Subsidiaries—the Capital Securities (d)Shareholder's equity:
Preferred stock
Common stock
Contributed capital
Net unrealized gain on investment securities available for sale
Retained earnings
Total shareholder's equity

3,171,594
3,171,594$3,795,069 $4,545,069

Total capitalization
Capital ratios (e):Tier 1 capital to risk-based assets
Total capital to risk-based assets
Leverage

8.04%
10.60
6.97

(a)
(b)
(c)
(d)

10.06%
12.61
8.60

Restated to include the accounts of New Jersey National which was merged into the Company on December 6, 1996.
Includes $355 million due CoreStates Capital Corporation, a subsidiary of the Holding Corporation,
Reflects the issuance of capital securities by CoreStates Capital I and CoreStates Capital II.
Reflects the Capital Securities. The Trust holds the Junior Subordinated Debentures as its sole asset. The Company owns
all of the Common Securities of the Trust.
(e) "As Adjusted" capital ratios assume, for the purpose of calculating pro forma risk weighted assets, that the $450 million
proceeds from issuance of the previously issued capital securities and the Capital Securities offered hereby qualify as Tier 1
capital and are invested in time balances due from banks.

18

SELECTED UNAUDITED FINANCIAL DATA OF THE COMPANY
The selected unaudited financial data for the Company presented in the accompanying tables
have been derived from the Call Reports for the nine months ended September 30, 1996 and 1995,
and the years ended December 31, 1995 and 1994 as filed with the OCC and restated to include in all
periods presented the accounts of affiliate banks including New Jersey National, Meridian Bank—
Pennsylvania, Delaware Trust Company, Meridian Bank New Jersey and United Counties Bank, whichwere all merged into the Company at various times since December 31, 1995. The Call Reports areprepared in accordance with regulatory accounting principles, which differ, in certain cases, fromgenerally accepted accounting principles used to prepare consolidated financial statements of theHolding Corporation. The financial data presented below is unaudited but, in the opinion ofmanagement, all material adjustments necessary for a fair presentation of the Company's results ofoperations for such periods have been made. All such adjustments were of a normal recurring nature.
The results for the nine months ended September 30, 1996, are not necessarily indicative of the results
for the full year or any other interim period.
Balance Sheet Data
September 30,
December 31,
1994
1995
1995
(in thousands)$41,209,718 $41,259,290 $42,082,060 $43,085,718
3,986,138
5,834,311
5,361,199
7,039,386
29,382,947
27,733,189
27,473,815
27,690,201
615,072
579,138
570,262
549,189
32,759,016
34,734,766
35,339,797
33,556,306
623,475
589,135
574,961
453,881$
37,308 $37,30837,308 $37,308 $2,603,464
2,891,306
2,911,175
2,846,063
530,822
653,471646,635
627,868$ 3,171,594 $ 3,582,085 $ 3,595,118 $ 3,511,239
1996

Total assets
Investment securities
Loans
Allowance for loan losses
Deposits
Long-term debt
Common stock
Surplus
Undivided profits
Total shareholder's equity
Income Statement Data

Interest income
Interest expense
Net interest income
Provision for loan losses
Non-interest income
Gains on investment securities
Non-financial expenses
Income before income taxes
Provision for income taxes
Net income

Nine Months Ended
Twelve Months Ended
September 30,
December 31,
1994
1996
1995
1995
(in thousands)$2,054,829$2,956,664$2,603,370$2,232,075
732,963863,259
1,134,271
845,311
1,321,866
1,368,816
1,822,393
1,758,059
116,073
233,433
62,56673,868593,597
577,092
780,832
714,4822,901
9,810
14,036
7,518
1,187,197
1,721,937
1,334,482
1,733,618
615,094558,670
821,456
513,008
212,397
184,923
273,689
161,212$ 402,697$ 373,747$ 547,767 $ 351,796

19

THE TRUSTThe Trust is a statutory business trust created under the Delaware Business Trust Act, as amended (the"Trust Act"), pursuant to a declaration of trust, dated as of January 31, 1997 (as so amended and restated, the"Declaration"), among the Trustees (as defined below) and CoreStates Bank, N.A., as sponsor, and the filing ofa certificate of trust with the Secretary of State of the State of Delaware. The Company will acquire Common
Securities in an aggregate liquidation amount equal to at least 3% of the total capital of the Trust. The Trust will
use all the proceeds derived from the issuance of the Capital Securities and the Common Securities to purchase
the Junior Subordinated Debentures and, accordingly, the assets of the Trust will consist solely of the Junior
Subordinated Debentures. The Trust exists for the exclusive purpose of (i) issuing the Trust Securities
representing undivided beneficial ownership interests in the assets of the Trust, (ii) investing the gross proceedsof the Trust Securities in the Junior Subordinated Debentures, and (iii) engaging in only those other activities
necessary or incidental thereto. The Declaration does not limit the aggregate liquidation amount of Trust
Securities that may be issued thereunder, provided that prior to issuing any additional Trust Securities, theTrustees shall have received an opinion of counsel to the effect that the issuance of such Trust Securities will notaffect the Trust status as a grantor trust for United States federal income tax purposes.
Pursuant to the Declaration, there will initially be five trustees (the "Trustees") for the Trust. Three of theTrustees (the "Regular Trustees") will be individuals who are employees or officers of or who are affiliated with
the Company. The fourth trustee will be a financial institution that is unaffiliated with the Company (the "Property
Trustee"). The fifth trustee will be an entity that maintains its principal place of business in the State of Delaware(the "Delaware Trustee"). Initially, The Chase Manhattan Bank will act as Property Trustee, and its affiliate, The
Chase Manhattan Bank Delaware, will act as Delaware Trustee until, in each case, removed or replaced by theholder of the Common Securities. The Chase Manhattan Bank will also act as trustee under the Guarantee (the"Guarantee Trustee") and trustee under the Indenture (the "Indenture Trustee").
The Property Trustee will hold title to the Junior Subordinated Debentures for the benefit of the holders of
the Trust Securities, and the Property Trustee will have the power to exercise all rights, powers and privileges
with respect to the Junior Subordinated Debentures under the Indenture pursuant to which the Junior
Subordinated Debentures are issued, as the holder of such Junior Subordinated Debentures. In addition, theProperty Trustee will maintain exclusive control of a segregated non-interest bearing bank account (the "Property
Account") to hold all payments made in respect of the Junior Subordinated Debentures for the benefit of theholders of the Trust Securities. The Guarantee Trustee will hold the Guarantee for the benefit of the holders of
the Capital Securities. The Company, as the holder of all the Common Securities, will have the right to appoint,
remove or replace any of the Trustees and to increase or decrease the number of Trustees, provided there shallalways be a Delaware Trustee, a Property Trustee and a Regular Trustee.
Under the Indenture, the Company, or the borrower, has agreed to pay all fees and expenses related to theorganization and operations of the Trust (including any taxes, duties, assessments or governmental charges ofwhatever nature (other than withholding taxes) imposed by the United States or any other domestic taxing
authority upon the Trust) and the offering of the Capital Securities and be responsible for all debts and obligationsof the Trust (other than with respect to the Capital Securities). See "Description of Capital Securities—Expenses
and Taxes."
For so long as the Capital Securities remain outstanding, the Company will covenant (i) to maintain directly
or indirectly 100% ownership of the Common Securities, (ii) to cause the Trust to remain a statutory businesstrust and not to voluntarily dissolve, wind-up, liquidate or be terminated, except as permitted by the Declaration,(iii) to use its commercially reasonable efforts to ensure that the Trust will not be an "investment company" forpurposes of the Investment Company Act of 1940, as amended, and (iv) to take no action that would bereasonably likely to cause the Trust to be classified as an association or a publicly traded partnership taxable asa corporation for United States federal income tax purposes.
The Declaration and the Guarantee incorporate by reference the terms of the Trust Indenture Act. The rightsof the holders of the Capital Securities, including economic rights, rights to information and voting rights, are set
forth in the Declaration and the Trust Indenture Act. See "Description of Capital Securities."
The location of the principal executive office of the Trust is Centre Square, West Tower, 1500 Market Street,
Philadelphia, PA 19101.
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DESCRIPTION OF CAPITAL SECURITIES
Pursuant to the terms of the Declaration, the Regular Trustees on behalf of the Trust will issue
the Capital Securities and the Common Securities. The Capital Securities will represent undivided
beneficial ownership interests in the assets of the Trust and the holders thereof will be entitled to apreference in certain circumstances with respect to Distributions and amounts payable on redemption
or liquidation over the Common Securities, as well as other benefits as described in the Declaration.
This summary of certain provisions of the Capital Securities and the Declaration does not purport tobe complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the
Declaration, including the definitions therein of certain terms, and the Trust Indenture Act. Whereverparticular defined terms of the Declaration (as supplemented or amended from time to time) arereferred to herein, the definitions of such defined terms are incorporated herein by reference.
GeneralThe Capital Securities will rank pari passu, and payments will be made thereon pro rata, with theCommon Securities except as described under "—Subordination of Common Securities." Legal title to
the Junior Subordinated Debentures will be held by the Property Trustee in trust for the benefit of theholders of the Capital Securities and the Common Securities. The Guarantee executed by theCompany for the benefit of the holders of the Capital Securities will be a guarantee on a subordinatedbasis with respect to the Capital Securities but will not guarantee payment of Distributions or amounts
payable on redemption or liquidation of the Capital Securities when the Trust does not have sufficient
funds available to make such payments. See "Description of Guarantee." The Company's obligations
under the Guarantee, taken together with its obligations under the Junior Subordinated Debentures
and the Indenture, including its obligation to pay all costs, expenses and liabilities of the Trust (otherthan with respect to the Capital Securities), constitute a full and unconditional guarantee of all of theTrust's obligations under the Capital Securities. The Capital Securities are neither obligations of nor
guaranteed by the Holding Corporation or any of its affiliates other than the Company and the Trust.
The denomination of the Capital Securities is the liquidation amount. Any institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act who is apurchaser must buy in minimum principal amounts of $100,000.
Holders of the Capital Securities have no preemptive or similar rights.
Distributions
Distributions on each Capital Security will be payable in U.S. dollars at a variable annual rateequal to LIBOR plus .57% (which is the same rate payable on the Junior Subordinated Debentures)on the liquidation amount of $1,000, payable quarterly in arrears on the 15th day of February, May,
August and November of each year. See "Description of Junior Subordinated Debentures—Interest."
Distributions will accumulate from the date of original issuance and commence on May 15, 1997. The
amount of Distributions payable for any period will be computed on the basis of the actual number ofdays elapsed in a year of twelve 30-day months.
Distributions on the Capital Securities must be paid on the dates payable to the extent that theTrust has funds available for the payment of such Distributions. The revenue of the Trust available for
distribution to holders of its Capital Securities will be limited to payments under the Junior
Subordinated Debentures in which the Trust will invest the proceeds from the issuance and sate of theCapital Securities and the Common Securities. See "Description of Junior Subordinated Debentures."If the Company does not make interest payments on the Junior Subordinated Debentures, the Property
Trustee will not have funds available to pay Distributions on the Capital Securities.
The Company will have the right under the Indenture to defer the payment of interest on the Junior
Subordinated Debentures at any time or from time to time for a period not exceeding 20 consecutive
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quarters (each, an "Extension Period"), provided that no Extension Period may extend beyond theStated Maturity of the Junior Subordinated Debentures. Accordingly, there could be multiple Extension
Periods of varying lengths throughout the term of the Junior Subordinated Debentures. As aconsequence of any such extension, quarterly Distributions on the Capital Securities will be deferredby the Trust during any such Extension Period. Distributions to which holders of the Capital Securities
are entitled will accumulate and compound quarterly at a variable annual rate equal to LIBOR plus
.57% from the relevant payment date for such Distributions. The term "Distributions" as used hereinshall include any such compounded amounts unless the context otherwise requires. During any such
Extension Period, the Company may not, and may not permit any subsidiary of the Company to, (i)declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation
payment with respect to, any of the Company's capital stock or (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt securities of the Company
that rank pari passu with or junior to the Junior Subordinated Debentures or make any guarantee
payments with respect to any guarantee by the Company of the debt securities of any subsidiary of
the Company if such guarantee ranks pari passu with or junior in interest to the Junior SubordinatedDebentures (other than (a) repurchases, redemptions or other acquisitions of shares of capital stockof the Company in connection with any employment contract, benefit plan or other similar arrangementwith or for the benefit of any one or more employees, officers, directors or consultants, or in connection
with a dividend reinvestment or stockholder stock purchase plan, (b) as a result of an exchange orconversion of any class or series of the Company's capital stock (or any capital stock of a subsidiaryof the Company) for any class or series of the Company's capital stock or of any class or series of theCompany's indebtedness for any class or series of the Company's capital stock, (c) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged, (d) any declaration of adividend in connection with any stockholder's rights plan, or the issuance of rights, stock or otherproperty under any stockholder's rights plan, or the redemption or repurchase of rights pursuant
thereto, or (e) any dividend in the form of stock, warrants, options or other rights where the dividend
stock or the stock issuable upon exercise of such warrants, options or other rights is the same stockas that on which the dividend is being paid (or ranks pari passu with or junior to such stock)). Prior to
the termination of any such Extension Period, the Company may further extend the Extension Period,
provided that no Extension Period may exceed 20 consecutive quarters or extend beyond the StatedMaturity of the Junior Subordinated Debentures. Upon the termination of any such Extension Period
and the payment of all amounts then due on any Interest Payment Date, the Company may elect tobegin a new Extension Period subject to the foregoing requirements. See "Description of Junior
Subordinated Debentures—Option to Extend Interest Payment Period." The Company has no current
intention of exercising its right to defer payments of interest by extending the interest payment periodof the Junior Subordinated Debentures.
The Property Trustee will cause the rate of Distributions, amount of Distributions, the payment
dates for each Distribution and the Extension Period, if any, to be provided to the Luxembourg Stock
Exchange and published in a daily newspaper in Luxembourg (which is expected to be theLuxemburger Wort) as soon as possible after the determination thereof.
In the event that any date on which Distributions are payable on the Capital Securities is not a
Business Day, then payment of the Distributions payable on such date will be made on the next
succeeding day that is a Business Day (and without any additional Distributions or other payment inrespect of any such delay), with the same force and effect as if made on the date such payment was
originally payable (each date on which Distributions are payable in accordance with the foregoing, a"Distribution Date"). A "Business Day" shall mean any day other than a Saturday or a Sunday, or a
day on which banking institutions in The City of New York or the City of Philadelphia are authorized or
required by law or executive order to remain closed or a day on which the corporate trust office of theProperty Trustee or the Indenture Trustee (as defined herein) is closed for business.
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Distributions on the Capital Securities (other than distributions on a Redemption Date (as defined
herein)) will be payable to the holders thereof as they appear on the register of the Trust on therelevant record dates, which shall be the first day of the month of the relevant Distribution Date.
Distributions payable on any Capital Securities that are not punctually paid on any Distribution Datewill cease to be payable to the person in whose name such Capital Securities are registered on therelevant record date, and such defaulted Distribution will instead be payable to the person in whosename such Capital Securities are registered on the special record date or other specified date
determined in accordance with the Declaration.
Holders of interests in the Regulation S Temporary Global Capital Security shall only receive any
Distributions, Redemption Price or any other payment due on such Regulation S Temporary Global
Capital Security upon certification of non-U.S. beneficial ownership to the Property Trustee. See"Book-Entry Issuance—Payments; Certification by Holders of the Regulation S Temporary Global
Capital Security."
Redemption
Mandatory Redemption. Unless a Special Event has occurred, the Capital Securities will not be
redeemable prior to February 15, 2007. The Capital Securities will mature at their liquidation amount,unless redeemed prior thereto, on February 15, 2027. Upon the repayment or redemption, in whole orin part, of the Junior Subordinated Debentures, whether at Stated Maturity or upon earlier redemption
as provided in the Indenture, the proceeds from such repayment or redemption shall be applied by theProperty Trustee to redeem Capital Securities and Common Securities upon not less than 30 nor morethan 60 days' notice prior to the date fixed for repayment or redemption. If less than all of the Junior
Subordinated Debentures are to be repaid or redeemed on a Redemption Date, then the proceedsfrom such repayment or redemption shall be allocated to the redemption pro rata of the Capital
Securities and the Common Securities.
Special Event Redemption or Distribution of Junior Subordinated Debentures. If a Special Eventshall occur and be continuing, the Company will have the right, subject to the receipt of any necessaryprior approval of the OCC, to either (i) redeem within 90 days following the occurrence of such Special
Event the Junior Subordinated Debentures on the date of redemption (the "Redemption Date") inwhole (but not in part) and thereby cause a mandatory redemption of the Capital Securities in whole(but not in part) at a redemption price with respect to the Capital Securities equal to the redemption
price in respect of the Junior Subordinated Debentures or (ii) to dissolve the Trust and, aftersatisfaction of the claims of creditors of the Trust as provided by applicable law, cause the Junior
Subordinated Debentures to be distributed to the holders of the Capital Securities in liquidation of theTrust. Under current United States federal income tax law and interpretations thereof and assuming,as expected, the Trust is treated as a grantor trust, a distribution of the Junior SubordinatedDebentures should not be a taxable event to holders of the Capital Securities. Should there be achange in law, a change in legal interpretation, certain Tax Events or other circumstances, however,the distribution could be a taxable event to holders of the Capital Securities. See "Certain UnitedStates Federal Income Tax Consequences—Distribution of Junior Subordinated Debentures or Cashupon Liquidation of the Trust."
If the Company does not elect either option described above, the Capital Securities will remain
outstanding until the repayment of the Junior Subordinated Debentures, whether at Stated Maturity or
their earlier redemption, and in the event a Tax Event has occurred and is continuing, the Company
will be obligated to pay any additional taxes, duties, assessments and other governmental charges(other than withholding taxes) to which the Trust has become subject as a result of a Tax Event.
A "Special Event" means a Tax Event, a Regulatory Capital Event or an Investment Company
Event. A "Tax Event" means the receipt by the Company of an opinion of counsel, rendered by a law
23

firm having a recognized national tax practice, to the effect that, as a result of any amendment to orchange (including any announced prospective change, which announced prospective change may
have a retroactive effect) in the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, or as a result of any official or administrative
pronouncement or action or judicial decision interpreting or applying such laws or regulations, whichamendment or change is adopted or which prospective change, pronouncement or action or decision
is announced or which action is taken on or after the date of original issuance of the Capital Securities,
there is more than an insubstantial risk that (i) the Trust is, or will be within 90 days of the date of such
opinion, subject to United States federal income tax with respect to income received or accrued on the
Junior Subordinated Debentures, (ii) interest payable by the Company on such Junior SubordinatedDebentures is not, or within 90 days of the date of such opinion, will not be, deductible by theCompany, in whole or in part, for United States federal income tax purposes, or (iii) the Trust is, or will
be within 90 days of the date of such opinion, subject to more than a de minimis amount of other taxes,
duties or other governmental charges. A "Regulatory Capital Event" means that the Company shallhave received an opinion of independent bank regulatory counsel experienced in such matters to theeffect that, as a result of (a) any amendment to or change (including any announced prospective
change) in the laws (or any regulations thereunder) of the United States or any rules, guidelines orpolicies of the OCC or the Board of Governors of the Federal Reserve System (the "Federal Reserve")or (b) any official or administrative pronouncement or action or judicial decision interpreting or applying
such laws or regulations, which amendment or change is effective or such pronouncement or action ordecision is announced on or after the date of original issuance of the Capital Securities, the Capital
Securities do not constitute, or within 90 days of the date thereof, will not constitute (x) either Tier 1
capital (or its then equivalent) or Tier 2 capital (or its then equivalent), in the case of the Company, or(y) Tier 1 capital in the case of the Holding Corporation; provided, however, that the distribution of the
Junior Subordinated Debentures in connection with the liquidation of the Trust by the Company shallnot in and of itself constitute a Regulatory Capital Event unless such liquidation shall have occurred inconnection with a Tax Event or an Investment Company Event. "Investment Company Event" means
the receipt by the Trust of an opinion of counsel, rendered by a law firm having a recognized national
securities practice, to the effect that, as a result of the occurrence of a change in law or regulation ora change in interpretation or application of law or regulation by any legislative body, court,
governmental agency or regulatory authority (a "Change in 1940 Act Law"), the Trust is or will beconsidered an "investment company" that is required to be registered under the Investment Company
Act of 1940, as amended, which Change in 1940 Act Law becomes effective on or after the date oforiginal issuance of the Capital Securities.
Redemption Procedures
Capital Securities redeemed on each Redemption Date shall be redeemed at the redemption pricereceived by the Trust in respect of the Junior Subordinated Debentures (the "Redemption Price") withthe applicable proceeds from the contemporaneous redemption or payment at Stated Maturity of the
Junior Subordinated Debentures. Redemptions of the Capital Securities shall be made and theRedemption Price shall be payable on each Redemption Date only to the extent that the Trust has
sufficient funds available for the payment of such Redemption Price. See also "—Subordination ofCommon Securities." Holders of interests in the Regulation S Temporary Global Capital Security shall
only receive any Distributions, Redemption Price or any other payments due on such Regulation S
Temporary Global Capital Security upon certification of non-U.S. beneficial ownership. See "BookEntry Issuance—Payments; Certifications by Holders of the Regulation S Temporary Global Capital
Security."
Notice of any redemption will be mailed at least 30 days but not more than 60 days before theRedemption Date to each holder of Capital Securities to be redeemed at its registered address. If theTrust gives a notice of redemption in respect of the Capital Securities, then, by 12:00 noon, New York
City time, on the Redemption Date, to the extent funds are available, the Property Trustee will deposit
irrevocably with DTC or its nominee funds sufficient to pay the applicable Redemption Price for all24

securities held in DTC and will give DTC irrevocable instructions and authority to pay the Redemption
Price to the holders of the Capital Securities held through DTC. See "Book-Entry Issuance." If any
Capital Securities are held in certificated form, the Trust, to the extent funds are available, will
irrevocably deposit with the paying agent for such Capital Securities funds sufficient to pay theapplicable Redemption Price and will give the paying agent irrevocable instructions and authority to
pay the Redemption Price to the holders thereof upon surrender of their certificates evidencing theCapital Securities. Notwithstanding the foregoing, Distributions payable on or prior to the Redemption
Date for any Capital Security called for redemption shall be payable to the holders of such Capital
Security on the relevant record dates for the related Distribution Dates. If notice of redemption shallhave been given and funds deposited as required, then upon the date of such deposit, all rights of theholders of such Capital Securities so called for redemption will cease, except the right of the holdersof such Capital Securities to receive the Redemption Price, but without interest on such Redemption
Price, and such Capital Securities will cease to be outstanding. In the event that any date fixed forredemption of Capital Securities is not a Business Day, then payment of the Redemption Price payableon such date will be made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such Business Day falls in thenext calendar year, such payment will be made on the immediately preceding Business Day, in eachcase with the same force and effect as if made on the date such payment was originally payable. In
the event that payment of the Redemption Price in respect of Capital Securities called for redemption
is improperly withheld or refused and not paid either by the Trust or by the Company pursuant to the
Guarantee as described under "Description of Guarantee", Distributions on such Capital Securities willcontinue to accrue at the then applicable rate, from the Redemption Date originally established by theTrust for the Capital Securities to the date such Redemption Price is actually paid, in which case theactual payment date will be the date fixed for redemption for purposes of calculating the Redemption
Price.
Subject to applicable law (including, without limitation, United States federal securities law) and to
the provisions of the Declaration, the Company or its subsidiaries may at any time and from time totime purchase outstanding Capital Securities by tender, in the open market or by private agreement.
The Trust may not redeem fewer than all of the outstanding Capital Securities unless all accrued
and unpaid Distributions have been paid on all Capital Securities for all quarterly distribution periods
terminating on or prior to the date of redemption. If less than all of the Capital Securities and Common
Securities issued by the Trust are to be redeemed on a Redemption Date, then the aggregate amountof such Capital Securities and Common Securities to be redeemed shall be allocated pro rata among
the Capital Securities and the Common Securities. If the Capital Securities are in book-entry form, they
will be redeemed as described below under "Book-Entry Issuance" If not, the particular Capital
Securities to be redeemed shall be selected on a pro rata basis not more than 60 days prior to the
Redemption Date by the Property Trustee from the outstanding Capital Securities not previously called
for redemption, by such method as the Property Trustee shall deem fair and appropriate and which
may provide for the selection for redemption of portions (equal to $1,000 or an integral multiple of$1,000 in excess thereof) of the liquidation amount of Capital Securities of a denomination larger than
$1,000. The Property Trustee shall promptly notify the Trust registrar in writing of the Capital Securities
selected for redemption and, in the case of any Capital Security selected for partial redemption, theliquidation amount thereof to be redeemed. For all purposes of the Declaration, unless the context
otherwise requires, all provisions relating to the redemption of Capital Securities shall relate, in thecase of any Capital Security redeemed or to be redeemed only in part, to the portion of the aggregateliquidation amount of Capital Securities which has been or is to be redeemed.
Subordination of Common Securities
Payment of Distributions on, and the Redemption Price of, the Capital Securities and the Common
Securities, as applicable, shall be made pro rata based on the liquidation amount of such Capital
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Securities and Common Securities; provided, however, that if on any Distribution Date or Redemption
Date an Indenture Event of Default shall have occurred and be continuing, no payment of any
Distribution on, or Redemption Price of, any of the Common Securities, and no other payment on
account of the redemption, liquidation or other acquisition of such Common Securities, shall be madeunless payment in full in cash of all accumulated and unpaid Distributions on all of the outstanding
Capital Securities for all Distribution periods terminating on or prior thereto, or in the case of paymentof the Redemption Price, the full amount of such Redemption Price on all of the outstanding Capital
Securities then called for redemption, shall have been made or provided for, and all funds available to
the Property Trustee shall first be applied to the payment in full in cash of all Distributions on, or
Redemption Price of, the Capital Securities then due and payable.
Liquidation Distribution Upon Dissolution
Pursuant to the Declaration, the Trust shall automatically dissolve upon expiration of its term andshall dissolve on the first to occur of: (i) any liquidation, insolvency or similar proceeding with respect
to the Company or all or substantially all of its property, (ii) the distribution of the Junior SubordinatedDebentures to the holders of the Capital Securities and Common Securities; (iii) the repayment of allof the Capital Securities in connection with the maturity or redemption of all of the Junior SubordinatedDebentures; and (iv) the entry by a court of competent jurisdiction of an order for the dissolution of theTrust. Notice of such liquidation shall be given to the holders of the Common Securities and Capital
Securities by the Trustees within 30 days of such event.
If an early dissolution occurs as described in clause (i), (ii) or (iv) above, the Trust shall beliquidated by the Trustees as expeditiously as the Trustees determine to be possible by distributing,after satisfaction of liabilities to creditors of the Trust as provided by applicable law, to the holders of
the Capital Securities and Common Securities their pro rata interest in the Junior SubordinatedDebentures, unless such distribution is determined by the Property Trustee not to be practicable, inwhich event such holders will be entitled to receive out of the assets of the Trust available for
distribution to holders, after satisfaction of liabilities to creditors of the Trust as provided by applicablelaw, an amount equal to, in the case of holders of Capital Securities, the aggregate of the liquidation
amount plus accrued and unpaid Distributions thereon to the date of payment (such amount being the"Liquidation Distribution"). If such Liquidation Distribution can be paid only in part because the Trust
has insufficient assets available to pay in full the aggregate Liquidation Distribution, then the amounts
payable directly by the Trust on the Capital Securities shall be paid on a pro rata basis. The holder(s)of the Common Securities will be entitled to receive distributions upon any such liquidation pro rata
with the holders of the Capital Securities, except that if an Indenture Event of Default has occurredand is continuing, the Capital Securities shall have a priority over the Common Securities.
Upon any liquidation in which the Junior Subordinated Debentures are distributed, if at any timeof such liquidation the Capital Securities are (i) rated by at least one nationally recognized statisticalrating organization, (ii) listed on the Luxembourg Stock Exchange or (iii) eligible for quotation in
PORTAL, the Company shall use its best efforts to (a) obtain from at least one nationally recognizedstatistical rating organization, a rating for the Junior Subordinated Debentures, (b) list the Junior
Subordinated Debentures on the Luxembourg Stock Exchange or (c) qualify the Junior SubordinatedDebentures for quotation in PORTAL, as the case may be.
The OCC's risk-based capital guidelines currently provide that a national bank's capital
instruments may be redeemed prior to maturity only with the prior approval of the OCC, and that the
OCC typically will consider requests for the redemption of capital instruments when the instruments areto be redeemed with the proceeds of, or are replaced by a like amount, of a similar or higher quality
capital instrument. In the event the Company, as the holder of all of the Common Securities, terminates
the Trust prior to the stated maturity of the Capital Securities and the termination of the Trust isdeemed to constitute the redemption of capital instruments by the OCC under its risk-based capital
26

guidelines or policies, the termination of the Trust by the Company would be subject to the priorapproval of the OCC under its capital guidelines and policies as currently in effect.
After the liquidation date is fixed for any distribution of Junior Subordinated Debentures to holdersof the Capital Securities (i) the Capital Securities will no longer be deemed to be outstanding, (ii) DTC
or its nominee, as a record holder of Capital Securities, will receive a registered global certificate orcertificates representing the Junior Subordinated Debentures to be delivered to it upon such
distribution and (iii) any certificates representing Capital Securities held in certificated form will bedeemed to represent Junior Subordinated Debentures having a principal amount equal to theliquidation amount of such Capital Securities, and bearing accrued and unpaid interest in an amountequal to the accrued and unpaid Distributions on such Capital Securities until such certificates arepresented for cancellation whereupon the Company will issue to such holder, and the Indenture
Trustee will authenticate, a certificate representing such Junior Subordinated Debentures.
Trust Enforcement Events
An Indenture Event of Default constitutes a Trust Enforcement Event under the Declaration withrespect to the Trust Securities, provided that pursuant to the Declaration, the holder of the Common
Securities will be deemed to have waived any Trust Enforcement Event with respect to the Common
Securities until all Trust Enforcement Events with respect to the Capital Securities have been cured,
waived or otherwise eliminated. Until such Trust Enforcement Event with respect to the Capital
Securities has been so cured, waived or otherwise eliminated, the Property Trustee will be deemed tobe acting solely on behalf of the holders of the Capital Securities and only the holders of the Capital
Securities will have the right to direct the Property Trustee with respect to certain matters under the
Declaration, and therefore the Indenture.
Upon the occurrence of a Trust Enforcement Event, the Indenture Trustee or the Property Trustee
as the holder of the Junior Subordinated Debentures will have the right under the Indenture to declare
the principal of and interest on the Junior Subordinated Debentures to be immediately due andpayable. Each of the Company and the Trust is required to file annually with the Property Trustee anofficer's certificate as to its compliance with all conditions and covenants under the Declaration.
If the Property Trustee fails to enforce its rights with respect to the Junior SubordinatedDebentures held by the Trust, any record holder of Capital Securities may, to the fullest extent
permitted by law, institute legal proceedings directly against the Company to enforce the Property
Trustee's rights under such Junior Subordinated Debentures without first instituting any legal
proceedings against such Property Trustee or any other person or entity. In addition, if a Trust
Enforcement Event has occurred and is continuing and such event is attributable to the failure of theCompany to pay interest, principal or other required payments on the Junior Subordinated Debentures
issued to the Trust on the date such interest, principal or other payment is otherwise payable, then arecord holder of Capital Securities may, on or after the respective due dates specified in the Junior
Subordinated Debentures, institute a proceeding directly against the Company under the Indenture for
enforcement of payment on Junior Subordinated Debentures having a principal amount equal to theaggregate liquidation amount of the Capital Securities held by such holder. In connection with such
Direct Action, the Company will be subrogated to the rights of such record holder of Capital Securities
to the extent of any payment made by the Company to such record holder of Capital Securities.
Voting Rights; Amendment of the Declaration
Except as provided below and under "Description of Guarantee—Amendments and Assignment"
and as otherwise required by law and the Declaration, the holders of the Capital Securities will haveno voting rights. The Regular Trustees are required to call a meeting of the holders of the Capital
Securities if directed to do so by holders of at least 10% in aggregate liquidation amount thereof.
27

So long as any Junior Subordinated Debentures are held by the Property Trustee, the Trustees
shall not (i) direct the time, method and place of conducting any proceeding for any remedy available
to the Indenture Trustee or executing any trust or power conferred on the Property Trustee with respect
to such Junior Subordinated Debentures, (ii) waive any past default that is waivable under the
Indenture, (iii) exercise any right to rescind or annul a declaration that the principal of all the Junior
Subordinated Debentures shall be due and payable, or (iv) consent to any amendment, modificationor termination of the Indenture or such Junior Subordinated Debentures, where such consent shall be
required, without, in each case, obtaining the prior approval of the holders of a majority in aggregateliquidation amount of all outstanding Capital Securities; provided, however, that where a consent underthe Indenture would require the consent of each holder of Junior Subordinated Debentures affected
thereby, no such consent shall be given by the Property Trustee without the prior consent of eachholder of Capital Securities. The Trustees shall not revoke any action previously authorized orapproved by a vote of the holders of the Capital Securities except pursuant to a subsequent vote of
the holders of the Capital Securities. The Property Trustee shall notify each holder of record of theCapital Securities of any notice of default which it receives with respect to the Junior SubordinatedDebentures. In addition to obtaining the foregoing approvals of the holders of the Capital Securities,
prior to taking any of the foregoing actions, the Trustees shall receive an opinion of counsel
experienced in such matters to the effect that the Trust will not be classified as other than a grantor
trust for United States federal income tax purposes on account of such action.
The Declaration may be amended from time to time by the holders of a majority of the Common
Securities and the Regular Trustee (and in certain circumstances the Property Trustee and theDelaware Trustee), without the consent of the holders of the Capital Securities, (i) to cure any
ambiguity, correct or supplement any provisions in the Declaration that may be inconsistent with anyother provision, or to make any other provisions with respect to matters or questions arising under the
Declaration that shall not be inconsistent with the other provisions of the Declaration or (ii) to modify,
eliminate or add to any provisions of the Declaration to such extent as shall be necessary to ensurethat the Trust will be classified as a grantor trust for United States federal income tax purposes at all
times that any Capital Securities and Common Securities are outstanding or to ensure that the Trust
will not be required to register as an "investment company" under the Investment Company Act or (iii)
to conform to any change in Rule 3a-7 under the Investment Company Act or written change ininterpretation or application of such Rule 3a-7 by any legislative body, court, government agency or
regulatory authority which amendment does not have a material adverse effect on the rights,
preferences or privileges of the Holders; provided, however, that such action shall not adversely affectin any material respect the interests of any holder of Capital Securities or Common Securities, and any
amendments of the Declaration shall become effective when notice thereof is given to the holders ofCapital Securities and Common Securities. The Declaration may also be amended by the holders of amajority in aggregate liquidation amount of the Common Securities and the Regular Trustee with (i)the consent of holders representing not less than a majority (based upon liquidation amounts) of theoutstanding Capital Securities and (ii) receipt by the Regular Trustees of an opinion of counsel to theeffect that such amendment or the exercise of any power granted to the Regular Trustees inaccordance with such amendment will not affect the Trust's status as a grantor trust for United Statesfederal income tax purposes or the Trust's exemption from status as an "investment company" underthe Investment Company Act, provided, that without the consent of each holder of Capital Securities
and Common Securities affected thereby, the Declaration may not be amended to (i) change theamount or timing of any Distribution on the Capital Securities and Common Securities or otherwise
adversely affect the amount of any Distribution required to be made in respect of the Capital Securities
and Common Securities as of a specified date or (ii) restrict the right of a holder of Capital Securities
or Common Securities to institute suit for the enforcement of any such payment on or after such date.
Any required approval of holders of Capital Securities may be given at a meeting of holders ofCapital Securities convened for such purpose or pursuant to written consent. The Regular Trustees will28

cause a notice of any meeting at which holders of Capital Securities are entitled to vote, or of any
matter upon which action by written consent of such holders is to be taken, to be given to each holderof record of Capital Securities in the manner set forth in the Declaration.
No vote or consent of the holders of Capital Securities will be required for the Trust to redeem
and cancel its Capital Securities in accordance with the Declaration.
Notwithstanding that holders of Capital Securities are entitled to vote or consent under any of thecircumstances described above, any of the Capital Securities that are owned by the Company, theTrustees or any affiliate of the Company or any Trustees, shall, for purposes of such vote or consent,
be treated as if they were not outstanding.
Expenses and Taxes
In the Indenture, the Company, as borrower, has agreed to pay all debts and other obligations(other than with respect to the Capital Securities) and all costs and expenses of the Trust (including
costs and expenses relating to the organization of the Trust, the fees and expenses of the Trustees
and the costs and expenses relating to the operation of the Trust) and to pay any and all taxes and all
costs and expenses with respect thereto (other than United States withholding taxes) to which theTrust might become subject. The Company has also agreed in the Indenture to execute such additional
agreements as may be necessary or desirable to give full effect to the foregoing.
Notices
All notices to holders of Capital Securities shall be validly given if in writing and mailed by firstclass mail to them at their respective addresses in the register of holders of Capital Securities
maintained by the registrar of the Trust and so long as the Capital Securities are listed on the
Luxembourg Stock Exchange and the Luxembourg Stock Exchange and the rules of such Exchange
so require, by publication, in a leading newspaper having general circulation in Luxembourg (which is
expected to be the Luxemburger Wort). Any such notice shall be deemed to have been given on thelater of the date of such publication and the seventh day after being so mailed.
Registrar and Transfer Agent
The Chase Manhattan Bank will act as the initial registrar and The Chase Manhattan Bank andChase Manhattan Bank Luxembourg S.A. will act as transfer agent for the Capital Securities. The
Company and the Trust shall at all times maintain in the City of New York and, so long as the Capital
Securities are listed on the Luxembourg Stock Exchange and the Luxembourg Stock Exchange andthe rules of the Luxembourg Stock Exchange so require, a transfer agent in Luxembourg. Definitive
Capital Securities may be presented to the Luxembourg transfer agent for transfer.
Registration of transfers of Capital Securities will be effected without charge by or on behalf of theTrust, but the Trust may require payment of any tax or other governmental charges that may be
imposed in connection with any transfer or exchange. The Trust will not be required (i) to register orcause to be registered the transfer or exchange of the Capital Securities during a period beginning at
the opening of business 15 days before the day of the mailing of the relevant notice of redemption andending at the close of business on the day of mailing of such notice of redemption or (ii) to register orcause to be registered the transfer or exchange of any Capital Securities so selected for redemption,
except in the case of any Capital Securities being redeemed in part, any portion thereof not to beredeemed.
Information Concerning the Property Trustee
The Property Trustee, other than during the occurrence and continuance of a Trust Enforcement
Event, undertakes to perform only such duties as are specifically set forth in the Declaration and, after
29

such Trust Enforcement Event, must exercise the same degree of care and skill as a prudent person
would exercise or use in the conduct of his or her own affairs. Subject to this provision, the Property
Trustee is under no obligation to exercise any of the powers vested in it by the Declaration at therequest of any holder of Capital Securities unless it is offered reasonable indemnity against the costs,
expenses and liabilities that might be incurred thereby. If no Trust Enforcement Event has occurredand is continuing and the Property Trustee is required to decide between alternative causes of action,
construe ambiguous provisions in the Declaration or is unsure of the application of any provision of
the Declaration, and the matter is not one on which holders of Capital Securities are entitled under the
Declaration to vote, then the Property Trustee may, but shall be under no duty to, take such action as
is directed by the Company and, if not so directed, shall take such action as it deems advisable and in
the best interests of the holders of the Capital Securities and the Common Securities and will have noliability except for its own bad faith, negligence or willful misconduct.
The Company and certain of its affiliates conduct banking and other transactions with the Property
Trustee and its affiliates in the ordinary course of their business.
Payment and Paying Agency
Payments in respect of the Global Capital Securities (as defined herein) shall be made to DTC,
which shall credit the relevant accounts at DTC on the applicable Distribution Dates or, if the Capital
Securities are held in certificated form, such payments shall be made by check mailed to the addressof the holder entitled thereto as such address shall appear on the register maintained by the registrar.
The paying agent (the "Paying Agent") shall initially be the Property Trustee and any co-paying agent
chosen by the Property Trustee and acceptable to the Regular Trustees and the Company. Initially,
Chase Manhattan Bank Luxembourg S.A. will act as co-paying agent. The Company and the Trustshall at all times and so long as the Capital Securities are listed on the Luxembourg Stock Exchange,
and the Luxembourg Stock Exchange so requires, maintain a paying agent in Luxembourg. The Paying
Agent shall be permitted to resign as Paying Agent upon 30 days' written notice to the Property
Trustee and the Company. In the event that the Property Trustee shall no longer be the Paying Agent,
the Regular Trustees shall appoint a successor (which shall be a bank or trust company acceptable to
the Regular Trustees and the Company) to act as Paying Agent.
Mergers, Consolidations, Amalgamations or Replacements of the Trust
The Trust may not merge with or into, consolidate, amalgamate, or be replaced by, or convey,transfer or lease its properties and assets substantially as an entirety to any entity, except as described
below or as otherwise described in the Declaration. The Trust may, at the request of the Company withthe consent of the holders of at least a majority in aggregate liquidation amount of the Capital
Securities, merge with or into, consolidate, amalgamate, be replaced by or convey, transfer or lease
its properties and assets substantially as an entirety to a trust organized as such under the laws of
any State; provided that (i) such successor entity (if not the Trust) either (a) expressly assumes all of
the obligations of the Trust with respect to the Capital Securities or (b) substitutes for the Capital
Securities other securities having substantially the same terms as the Capital Securities (the"Successor Securities") so long as the Successor Securities rank the same as the Capital Securities
rank in priority with respect to distributions and payments upon liquidation, redemption and otherwise,(ii) if the Trust is not the successor entity, the Property Trustee expressly appoints a trustee of suchsuccessor entity possessing the same powers and duties as the Property Trustee as the holder of the
Junior Subordinated Debentures, (iii) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Capital Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical rating organization, (iv) suchmerger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of the Capital Securities (including any
Successor Securities) in any material respect, (v) such successor entity has a purpose substantially30

identical to that of the Trust, (vi) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer, or lease, the Company has received an opinion from independent counsel to theTrust experienced in such matters to the effect that (a) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights, preferences andprivileges of the holders of the Capital Securities (including any Successor Securities) in any material
respect and (b) following such merger, consolidation, amalgamation, replacement, conveyance,transfer or lease, (1) neither the Trust nor such successor entity will be required to register as aninvestment company under the Investment Company Act and (2) the Trust or the successor entity willcontinue to be classified as a grantor trust for United States federal income tax purposes, (vii) the
Company or any permitted successor or assignee owns all of the Common Securities of suchsuccessor entity and guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee, and (viii) such successor entity (if not theTrust) expressly assumes all of the obligations of the Trust with respect to the Trustees.
Notwithstanding the foregoing, the Trust shall not, except with the consent of holders of 100% in
aggregate liquidation amount of the Capital Securities, consolidate, amalgamate, merge with or into,
be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to any
other entity or permit any other entity to consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease would cause
the Trust or the successor entity to be classified as other than a grantor trust for United States federal
income tax purposes.
Merger or Consolidation of Trustees
Any corporation into which the Property Trustee, the Delaware Trustee or any Regular Trustee
may be merged or converted or with which It may be consolidated, or any corporation resulting fromany merger, conversion or consolidation to which such Trustee shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of such Trustee, shall be thesuccessor of such Trustee under the Declaration, provided such corporation shall be otherwise
qualified and eligible.
Governing Law
The Declaration and the Capital Securities will be governed by, and construed in accordance with,the laws of the State of Delaware, without regard to principles of conflict of laws.
Miscellaneous
1. The Capital Securities represented by a Regulation S temporary global or permanent global
security have been accepted for clearance through the CEDEU and Euroclear systems with a Common
Code of .007342691. The CUSIP Number for the Capital Securities represented by the Restricted
Global Capital Securities is 21869MAA5, the CUSIP Number for the Regulation S Global Capital
Securities is U20665AA0 and the CUSIP Number for the Other Capital Securities represented byregistered, certificated securities is 21869MAB3. The International Securities Identification Number("ISIN") for the Capital Securities represented by the Regulation S temporary global or permanent
global security is USU 20665AA05.
2. Application has been made to list the Capital Securities on the Luxembourg Stock Exchange.
The legal notice relating to the issue of the Capital Securities and the Articles of Incorporation of theCompany will be registered prior to the listing with the Registrar of the District Court in Luxembourg(Greffier en Chef du Tribunal d'Arrondissement de et a Luxembourg), where such documents areavailable for inspection and where copies thereof can be obtained upon request. As long as the Capital
Securities are listed on the Luxembourg Stock Exchange, the Company will maintain a paying agent
and a transfer agent in Luxembourg.
31

3. Each of the Company and the Trust has obtained all necessary contents, approvals andauthorizations in connection with the issue and performance of the Capital Securities, except as
disclosed in this Offering Memorandum.
4. Except as disclosed in this Offering Memorandum, there has been no material adverse change
in the financial position or prospects of the Company or any of its subsidiaries since September 30,
1996.
5. Other than as referred to elsewhere in this Offering Memorandum, neither the Company nor
any of its subsidiaries is involved in any litigation or arbitration proceedings that may have, or have
had during the 12 months preceding the date of this document, a significant effect on the financial
position of the Company or any of its subsidiaries, nor is the Company or any of its subsidiaries awarethat any such proceedings are pending or threatened.
6. A copy of the Articles of Association of the Company and copies of the Indenture, theDeclaration, the Guarantee and the Purchase Agreement (or, pending execution thereof, drafts thereof
subject to modification) will, for so long as the Capital Securities are listed on the Luxembourg Stock
Exchange, be available for inspection during usual business hours on any weekday (except public
holidays) at the offices of the transfer agent in Luxembourg. As long as any Capital Securities remain
outstanding, copies of the latest Call Report of the Company, as at December 31 in each year and thequarterly Call Reports as at March 31, June 30 and September 30 in each year may be obtained (freeof charge) at the offices of the Company specified above and at the specified offices of the paying
agents. Other than Call Reports, the Company does not publish interim or other financial statements.
7. Approval for the issuance of the Capital Securities was granted by the Board of Directors of
the Company on January 21, 1997.
8. The Capital Securities will initially be offered to investors at 99.0345% of the liquidation amountper Capital Security.
9. The Company has taken all reasonable care to insure that the information contained in thisOffering Memorandum in relation to the Company and the Capital Securities is true and accurate in allmaterial respects and that in relation to the Company and the Capital Securities, there are no material
facts the omission of which would make misleading any statement herein, whether fact of opinion. The
Company accepts responsibility for the information contained in this Offering Memorandum.

32

DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURESThe Junior Subordinated Debentures are to be issued under an Indenture (the "Indenture")
between the Company and The Chase Manhattan Bank, as trustee (the "Indenture Trustee"). Thissummary of certain terms and provisions of the Junior Subordinated Debentures and the Indenture
does not purport to be complete and is subject to, and is qualified in its entirety by reference to, theIndenture.
GeneralConcurrently with the issuance of the Capital Securities, the Trust will invest the proceeds thereof
and the consideration paid by the Company for the Common Securities in the Junior SubordinatedDebentures issued by the Company. The Junior Subordinated Debentures will be issued in an
aggregate principal amount equal to the aggregate liquidation amount of the Capital Securities and theCommon Securities. It is anticipated that, until the liquidation, if any, of the Trust, each Junior
Subordinated Debenture will be held in the name of the Property Trustee in trust for the benefit of theholders of the Capital Securities and the Common Securities. The Junior Subordinated Debentures willbear interest at a variable annual rate equal to LIBOR plus .57% on the principal amount thereof,
payable quarterly in arrears on the 15th day of February, May, August and November of each year
(each, an "Interest Payment Date"), commencing May 15, 1997, to the person in whose name each
Junior Subordinated Debenture is registered, subject to certain exceptions, at the close of business on
the first day of the month of the relevant Interest Payment Date. The amount of interest payable forany period will be computed on the basis of the actual number of days elapsed in a year of twelve 30day months. In the event that any date on which interest is payable on the Junior SubordinatedDebentures is not a Business Day, then payment of the interest payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest or other payment in respectof any such delay), with the same force and effect as if made on the date such payment was originally
payable. Accrued interest that is not paid on the applicable Interest Payment Date will bear additional
interest on the amount thereof (to the extent permitted by law) at a variable annual rate equal to LIBOR
plus .57%, compounded quarterly. The term "interest" as used herein shall include quarterly interest
payments and interest on quarterly interest payments not paid on the applicable Interest Payment
Date, as applicable. Interest on the Junior Subordinated Debentures shall accrue from January 31,
1997.
The Junior Subordinated Debentures will mature on February 15, 2027.
The Junior Subordinated Debentures will be unsecured and will rank junior and be subordinate inright of payment to all Indebtedness of the Company to the extent described herein. The Indenture
does not limit the incurrence or issuance of other secured or unsecured debt of the Company, whether
under the Indenture or any existing or other indenture that the Company may enter into in the future
or otherwise. See "—Subordination."
The federal banking agencies possess broad powers to take corrective action as deemed
appropriate for an insured depositary institution, including without limitation, under certain
circumstances, the ability to prohibit the payment of principal or interest on subordinated debt. See"Supervision, Regulation and Other Matters."
The Indenture does not limit the aggregate principal amount of Junior Subordinated Debenturesthat may be issued thereunder.
The general provisions of the Indenture do not afford holders of the Junior SubordinatedDebentures protection in the event of a highly leveraged or other transaction involving the Company
that may adversely affect holders of the Junior Subordinated Debentures.
33

Interest
The Chase Manhattan Bank, as Calculation Agent (the "Calculation Agent"), will calculate theinterest rate for each quarterly interest period based on LIBOR determined as of two London Business
Days (defined as any day, other than a Saturday or Sunday, on which banks are open for business in
London) prior to the first day of such interest period (each, a "Determination Date"). "LIBOR" means,with respect to a quarterly interest period relating to an Interest Payment Date (in the following orderof priority):(i) the rate (expressed as a percentage per annum) for Eurodollar deposits having a threemonth maturity that appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the related
Determination Date;(ii) if such rate does not appear on Telerate Page 3750 as of 11:00 a.m. (London time) on
the related Determination Date, LIBOR will be the arithmetic mean (if necessary rounded upwards
to the nearest whole multiple of .00001%) of the rates (expressed as percentages per annum) for
Eurodollar deposits having a three-month maturity that appear on Reuters Monitor Money Rates
Page LIBO ("Reuters Page LIBO") as of 11:00 a.m. (London time) on such Determination Date;(iii) if such rate does not appear on Reuters Page LIBO as of 11:00 a.m. (London time) on
the related Determination Date, the Calculation Agent will request the principal London offices offour leading banks in the London interbank market to provide such banks' offered quotations(expressed as percentages per annum) to prime banks in the London interbank market forEurodollar deposits having a three-month maturity as of 11:00 a.m. (London time) on such
Determination Date. If at least two quotations are provided, LIBOR will be the arithmetic mean (ifnecessary rounded upwards to the nearest whole multiple of .00001%) of such quotations;(iv) if fewer than two such quotations are provided as requested in clause (iii) above, theCalculation Agent will request four major New York City banks to provide such banks' offeredquotations (expressed as percentages per annum) to leading European banks for loans inEurodollars as of 11:00 a.m. (London time) on such Determination Date. If at least two suchquotations are provided, LIBOR will be the arithmetic mean (if necessary rounded upwards to thenearest whole multiple of .00001%) of such quotations; and(v) if fewer than two such quotations are provided as requested in clause (iv) above, LIBOR
will be LIBOR determined with respect to the interest period immediately preceding such current
interest period.
If the rate for Eurodollar deposits having a three-month maturity that initially appears on Telerate
Page 3750 or Reuters Page LIBO, as the case may be, as of 11:00 a.m. (London time) on the related
Determination Date is superseded on Telerate Page 3750 or Reuters Page LIBO, as the case may be,
by a corrected rate before 12:00 noon (London time) on such Determination Date, the corrected rate
as so substituted on the applicable page will be the applicable LIBOR for such Determination Date.
Absent manifest error, the Calculation Agent's determination of LIBOR and its calculation of theapplicable interest rate for each interest period will be final and binding. Investors may obtain theinterest rates for the current and preceding interest period by writing or calling Corporate Trust
Administration at the Calculation Agent at The Chase Manhattan Bank, 450 West 33rd Street, New
York, New York 10001.
Option to Extend Interest Payment Period
So long as no Indenture Event of Default has occurred and is continuing, the Company has theright under the Indenture to defer the payment of interest at any time or from time to time for a period
not exceeding 20 consecutive quarters with respect to each Extension Period, provided that no
Extension Period may extend beyond the Stated Maturity of the Junior Subordinated Debentures. At
the end of such Extension Period, the Company must pay all interest then accrued and unpaid(together with interest thereon at a variable annual rate equal to LIBOR plus .57%, compounded34

quarterly, to the extent permitted by applicable law). During an Extension Period, interest will continue
to accrue and holders of Junior Subordinated Debentures (or holders of Capital Securities while theCapital Securities are outstanding) will be required to accrue interest income (as OID) for United Statesfederal income tax purposes. See "Certain United States Federal Income Tax Consequences—Interest
Income and Original Issue Discount."
During any such Extension Period, the Company may not, and may not permit any subsidiary of
the Company to, (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire, ormake a liquidation payment with respect to, any of the Company's capital stock or (ii) make any
payment of principal, interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company that rank pari passu with or junior in interest to the Junior SubordinatedDebentures or make any guarantee payments with respect to any guarantee by the Company of thedebt securities of any subsidiary of the Company if such guarantee ranks pari passu with or junior ininterest to the Junior Subordinated Debentures (other than (a) repurchases, redemptions or otheracquisitions of shares of capital stock of the Company in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers,
directors or consultants, or in connection with a dividend reinvestment or stockholder stock purchaseplan, (b) as a result of an exchange or conversion of any class or series of the Company's capital stock(or any capital stock of a subsidiary of the Company) for any other class or series of the Company's
capital stock or of any class or series of the Company's indebtedness for any class or series of theCompany's capital stock, (c) the purchase of fractional interests in shares of the Company's capitalstock pursuant to the conversion or exchange provisions of such capital stock or the security being
converted or exchanged, (d) any declaration of a dividend in connection with any stockholder's rights
plan, or the issuance of rights, stock or other property under any stockholder's rights plan, or theredemption or repurchase of rights pursuant thereto, or (e) any dividend in the form of stock, warrants,
options or other rights where the dividend stock or the stock issuable upon exercise of such warrants,
options or other rights is the same stock as that on which the dividend is being paid (or ranks paripassu with or junior to such stock)). Prior to the termination of any such Extension Period, theCompany may further extend the Extension Period, provided that no Extension Period may exceed 20
consecutive quarters or extend beyond the Stated Maturity of the Junior Subordinated Debentures.
Upon the termination of any such Extension Period and the payment of all amounts then due on any
Interest Payment Date, the Company may elect to begin a new Extension Period subject to the above
requirements. No interest shall be due and payable during an Extension Period, except at the end
thereof. The Company must give the Property Trustee, the Regular Trustees and the Indenture Trustee
notice of its election of such Extension Period not less than one Business Day prior to such record
date. The Property Trustee shall give notice of the Company's election to begin a new Extension
Period to the holders of the Capital Securities.
Redemption
The Junior Subordinated Debentures are not redeemable prior to February 15, 2007 unless aSpecial Event has occurred. The Junior Subordinated Debentures are redeemable prior to maturity at
the option of the Company, subject to the receipt of any necessary prior approval of the OCC, (i) on orafter February 15, 2007, in whole or in part at any time, at a redemption price equal to the principal
amount of the Junior Subordinated Debentures so redeemed plus accrued and unpaid interest, if any,
to the date of redemption, or (ii) at any time in whole (but not in part), within 90 days of the occurrenceof a Special Event, at such redemption price.
If the Junior Subordinated Debentures are redeemed, the Trust must redeem Trust Securities
having an aggregate liquidation amount equal to the aggregate principal amount of Junior
Subordinated Debentures so redeemed. See "Description of Capital Securities—RedemptionMandatory Redemption."
35

Notice of any redemption will be mailed at least 30 days but not more than 60 days before theredemption date to each holder of Junior Subordinated Debentures to be redeemed at its registeredaddress. Unless the Company defaults in payment of the redemption price, on and after theredemption date interest will cease to accrue on such Junior Subordinated Debentures or portions
thereof called for redemption.
The OCC's risk-based capital guidelines currently provide that a national bank's capital
instruments may be redeemed prior to maturity only with the prior approval of the OCC, and that the
OCC typically will consider requests for the redemption of capital instruments when the instruments areto be redeemed with the proceeds of, or are replaced by, a like amount of a similar or higher quality
capital instrument.
The redemption of the Junior Subordinated Debentures by the Company prior to their StatedMaturity would constitute the redemption of capital instruments under the OCC's current risk-based
capital guidelines and would be subject to the prior approval of the OCC.
Certain Covenants of the Company
The Company will covenant in the Indenture that if and so long as the Trust is the holder of all
Junior Subordinated Debentures, the Company, as borrower, will pay to the Trust all fees andexpenses related to the Trust and the offering of the Capital Securities and will pay, directly or
indirectly, all ongoing costs, expenses and liabilities of the Trust (including any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding taxes) imposed by
the United States or any domestic taxing authority upon the Trust but excluding obligations under the
Capital Securities).
The Company will also covenant that it will not, and will not permit any subsidiary of the Company
to, (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make aliquidation payment with respect to, any of the Company's capital stock or (ii) make any payment ofprincipal, interest or premium, if any, on or repay or repurchase or redeem any debt securities of theCompany that rank pari passu with or junior in interest to the Junior Subordinated Debentures or makeany guarantee payments with respect to any guarantee by the Company of the debt securities of any
subsidiary of the Company if such guarantee ranks pari passu with or junior in interest to the Junior
Subordinated Debentures (other than (a) repurchases, redemptions or other acquisitions of shares ofcapital stock of the Company in connection with any employment contract, benefit plan or other similararrangement with or for the benefit of any one or more employees, officers, directors or consultants,
or in connection with a dividend reinvestment or stockholder stock purchase plan, (b) as a result of an
exchange or conversion of any class or series of the Company's capital stock (or any capital stock of
a subsidiary of the Company) for any other class or series of the Company's capital stock or of any
class or series of the Company's indebtedness for any class or series of the Company's capital stock,(c) the purchase of fractional interests in shares of the Company's capital stock pursuant to theconversion or exchange provisions of such capital stock or the security being converted or exchanged,(d) any declaration of a dividend in connection with any stockholder's rights plan, or the issuance ofrights, stock or other property under any stockholder's rights plan, or the redemption or repurchase ofrights pursuant thereto, or (e) any dividend in the form of stock, warrants, options or other rights where
the dividend stock or the stock issuable upon exercise of such warrants, options or other rights is thesame stock as that on which the dividend is being paid (or ranks pari passu with or junior to suchstock)) if at such time (x) there shall have occurred any event of which the Company has actual
knowledge that (I) with the giving of notice or the lapse of time, or both, would constitute an Indenture
Event of Default with respect to Junior Subordinated Debentures and (II) in respect of which theCompany shall not have taken reasonable steps to cure, (y) the Company shall be in default withrespect to its payment of any obligations under the Guarantee or (z) the Company shall have given
notice of its election of an Extension Period as provided in the indenture and shall not have rescinded
such notice, or such Extension Period, or any extension thereof, shall be continuing.
36

Subordination
In the Indenture, the Company has covenanted and agreed that any Junior SubordinatedDebentures issued thereunder will be subordinated and junior in right of payment to all Indebtedness
to the extent provided in the Indenture. Upon any payment or distribution of assets of the Company
upon any liquidation, dissolution, winding-up, reorganization, assignment for the benefit of creditors,
marshaling of assets or any bankruptcy, insolvency, debt restructuring or similar proceedings inconnection with any insolvency or bankruptcy proceeding of the Company, the holders of Indebtedness
will first be entitled to receive payment in full of the principal of and premium, if any, and interest, if
any, on such Indebtedness before the holders of Junior Subordinated Debentures or the Property
Trustee on behalf of the holders of Capital Securities will be entitled to receive or retain any payment
in respect of the principal of and premium, if any, or interest, if any, on the Junior SubordinatedDebentures; provided, however, that holders of Indebtedness shall not be entitled to receive paymentof any such amounts to the extent that such holders would be required by the subordination provisionsof such Indebtedness to pay such amounts over to the obligees on trade accounts payable or otherliabilities arising in the ordinary course of the Company's business.
In the event of the acceleration of the maturity of any Junior Subordinated Debentures, the holdersof all Indebtedness outstanding at the time of such acceleration will first be entitled to receive payment
in full of all amounts then due thereon (including any amounts due upon acceleration thereof) before
the holders of Junior Subordinated Debentures will be entitled to receive or retain any payment inrespect of the principal of and premium, if any, or interest, if any, on the Junior SubordinatedDebentures; provided, however, that holders of Indebtedness shall not be entitled to receive paymentof any such amounts to the extent that such holders would be required by the subordination provisionsof such Indebtedness to pay such amounts over to the obligees on trade accounts payable or otherliabilities arising in the ordinary course of the Company's business.
No payments on account of principal (or premium, if any) or interest, if any, in respect of the Junior
Subordinated Debentures may be made if there shall have occurred and be continuing a default in any
payment with respect to Indebtedness, or an event of default with respect to any Indebtedness
resulting in the acceleration of the maturity thereof, or if any judicial proceeding shall be pending withrespect to any such default.
"Indebtedness" means, whether recourse is to all or a portion of the assets of the Company andwhether or not contingent, (i) every obligation of the Company for money borrowed; (ii) every obligationof the Company evidenced by bonds, debentures, notes or other similar instruments, including
obligations incurred in connection with the acquisition of property, assets or businesses; (iii) every
reimbursement obligation of the Company with respect to letters of credit, bankers' acceptances orsimilar facilities issued for the account of the Company; (iv) every obligation of the Company issued orassumed as the deferred purchase price of property or services (but excluding trade accounts payableor accrued liabilities arising in the ordinary course of business); (v) every capital lease obligation of theCompany; (vi) every obligation of the Company for claims (as defined in Section 101(4) of the UnitedStates Bankruptcy Code of 1978, as amended) in respect of derivative products such as interest andforeign exchange rate contracts, commodity contracts and similar arrangements; and (vii) every
obligation of the type referred to in clauses (i) through (vi) of another person and all dividends ofanother person the payment of which, in either case, the Company has guaranteed or is responsible
or liable for, directly or indirectly, as obligor or otherwise; provided that "Indebtedness" shall notinclude (i) any obligations which, by their terms, are expressly stated to rank pari passu in right of
payment with, or to not be superior in right of payment to, the Junior Subordinated Debentures, (ii) any
Indebtedness of the Company which when incurred was without recourse to the Company, (iii) any
Indebtedness of the Company to any of its subsidiaries, (iv) Indebtedness to any employee of theCompany, or (v) any indebtedness in respect of debt securities issued to any trust, or a trustee of such
trust, partnership or other entity affiliated with the Company that is a financing entity of the Company
37

in connection with the issuance by such financing entity of securities that are similar to the Capital
Securities.
The Indenture places no limitation on the amount of additional Indebtedness that may be incurredby the Company or any indebtedness or other liabilities that may be incurred by the Company's
subsidiaries. As of September 30, 1996, Indebtedness of the Company (restated to include theaccounts of New Jersey National, which was merged into the Company on December 6, 1996)
aggregated approximately $33 billion (which includes approximately $32 billion of bank deposits) towhich the Junior Subordinated Debentures would be effectively subordinated.
Indenture Events of Default
The Indenture provides that any one or more of the following described events with respect to the
Junior Subordinated Debentures that has occurred and is continuing constitutes an "Indenture Eventof Default" with respect to the Junior Subordinated Debentures:(i) failure for 30 days to pay any interest on the Junior Subordinated Debentures when due(subject to the deferral of any due date in the case of an Extension Period); or(ii) failure to pay any principal on the Junior Subordinated Debentures when due whether atmaturity, upon redemption by declaration or otherwise; or(iii) failure to observe or perform in any material respect any other covenant contained in the
Indenture for 90 days after written notice to the Company from the Indenture Trustee or theholders of at least 25% in aggregate outstanding principal amount of outstanding Junior
Subordinated Debentures; or(iv) the liquidation, insolvency or similar proceeding with respect to the Company or all or
substantially all its property.
The holders of a majority in aggregate outstanding principal amount of Junior SubordinatedDebentures have the right to direct the time, method and place of conducting any proceeding for any
remedy available to the Indenture Trustee. The Indenture Trustee or the holders of not less than 25%
in aggregate outstanding principal amount of Junior Subordinated Debentures may declare theprincipal due and payable immediately upon an Indenture Event of Default, and, should the Indenture
Trustee or such holders of such Junior Subordinated Debentures fail to make such declaration, theholders of at least 25% in aggregate liquidation amount of the Capital Securities shall have such right.
The holders of a majority in aggregate outstanding principal amount of Junior SubordinatedDebentures may annul such declaration and waive the default if the default (other than the nonpayment of the principal of Junior Subordinated Debentures which has become due solely by suchacceleration) has been cured and a sum sufficient to pay all matured installments of interest andprincipal due otherwise than by acceleration has been deposited with the Indenture Trustee, andshould the holders of such Junior Subordinated Debentures fail to annul such declaration and waive
such default, the holders of a majority in aggregate liquidation amount of the Capital Securities shallhave such right.
The holders of a majority in aggregate outstanding principal amount of the Junior SubordinatedDebentures affected thereby may, on behalf of the holders of all the Junior Subordinated Debentures,
waive any past default, except a default in the payment of principal or interest (unless such default has
been cured and a sum sufficient to pay all matured installments of interest and principal due otherwise
than by acceleration has been deposited with the Indenture Trustee) or a default in respect of acovenant or provision which under the Indenture cannot be modified or amended without the consent
of the holder of each outstanding Junior Subordinated Debenture, and should the holders of such
Junior Subordinated Debentures fail to waive such default, the holders of a majority in aggregateliquidation amount of the Capital Securities shall have such right. The Company is required to file38

annually with the Indenture Trustee a certificate as to whether or not the Company is in compliancewith all the conditions and covenants applicable to it under the Indenture.
In case an Indenture Event of Default shall occur and be continuing, the Property Trustee will havethe right to declare the principal of and the interest on such Junior Subordinated Debentures and anyother amounts payable under the Indenture to be forthwith due and payable and to enforce its otherrights as a creditor with respect to such Junior Subordinated Debentures.
Enforcement of Certain Rights by Holders of Capital Securities
If an Indenture Event of Default has occurred and is continuing and such event is attributable tothe failure of the Company to pay interest or principal on the Junior Subordinated Debentures on thedate such interest or principal is otherwise payable, a holder of Capital Securities may institute a Direct
Action for payment. The Company may not amend the Indenture to remove the foregoing right to bringa Direct Action without the prior written consent of the holders of all of the Capital Securities.
Notwithstanding any payment made to such holder of Capital Securities by the Company in connection
with a Direct Action, the Company shall remain obligated to pay such principal of or interest on the
Junior Subordinated Debentures held by the Trust or the Property Trustee and the Company shall besubrogated to the rights of the holder of such Capital Securities with respect to payments on the
Capital Securities to the extent of any payments made by the Company to such holder in any Direct
Action. Except as otherwise described herein, the holders of Capital Securities will not be able toexercise directly any other remedy available to the holders of the Junior Subordinated Debentures.
Consolidation, Merger, Sale of Assets and Other Transactions
The Indenture provides that the Company shall not consolidate with or merge into any other
Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person,
unless (i) in case the Company consolidates with or merges into another Person or conveys, transfersor leases its properties and assets substantially as an entirety to any Person, the successor Person isorganized under the laws of the United States or any state or the District of Columbia, and suchsuccessor Person expressly assumes the Company's obligations on the Junior SubordinatedDebentures issued under the Indenture; (ii) immediately after giving effect thereto, no Indenture Eventof Default, and no event which, after notice or lapse of time or both, would become an Indenture Eventof Default, shall have happened and be continuing; (iii) if at the time any Capital Securities areoutstanding, such transaction is permitted under the Declaration and Guarantee and does not give riseto any breach or violation of the Declaration or Guarantee; (iv) any such lease shall provide that it willremain in effect so long as any Junior Subordinated Debentures are outstanding; and (v) certain otherconditions prescribed in the Indenture are met.
Modification of Indenture
From time to time the Company and the Indenture Trustee may, without the consent of the holdersof the Junior Subordinated Debentures, amend, waive or supplement the Indenture for specified
purposes, including, among other things, curing ambiguities, defects or inconsistencies (provided thatany such action does not materially adversely affect the interest of the holders of Junior SubordinatedDebentures), qualifying, or maintaining the qualification of, the Indenture under the Trust Indenture Act
and to add to, delete from or revise the terms of the Junior Subordinated Debentures to provide fortransfer procedures and restrictions substantially similar to those applicable to the Capital Securities(for purposes of assuring that no registration of Junior Subordinated Debentures is required under the
Securities Act or Part 16 of the regulations of the OCC). The Indenture contains provisions permitting
the Company and the Indenture Trustee, with the consent of the holders of not less than a majority inprincipal amount of outstanding Junior Subordinated Debentures affected, to modify the Indenture in amanner affecting the rights of the holders of such Junior Subordinated Debentures; provided that nosuch modification may, without the consent of the holder of each outstanding Junior Subordinated39Debentures so affected, (i) change the stated maturity of Junior Subordinated Debentures, or reduce
the principal amount thereof, or reduce the rate or extend the time of Payment of interest thereon(except such extension as is contemplated hereby) or (ii) reduce the Percentage of principal amount ofJunior Subordinated Debentures the holders of which are required to consent to any such modificationof the Indenture, provided that, so long as any Capital Securities remain outstanding, no suchmodification may be made that adversely affects the holders of such Capital Securities in any material
respect, and no termination of the Indenture may occur, and no waiver of any Indenture Event of
Default or compliance with any covenant under the Indenture may be effective, without the priorconsent of the holders of at least a majority of the aggregate liquidation amount of the outstanding
Capital Securities unless and until the principal of the Junior subordinated Debentures and all accrued
and unpaid interest thereon have been paid in full and certain other conditions are satisfied.
Defeasance and Discharge
The Indenture provides that the Company, at the Company's option: (a) will be discharged fromany and all obligations in respect of the Junior Subordinated Debentures (except for certain obligations
to register the transfer or exchange of Junior Subordinated Debentures, replace stolen, lost or
mutilated Junior Subordinated Debentures, maintain paying agencies and hold moneys for payment intrust) or (b) need not comply with certain restrictive covenants of the Indenture (including that
described in the second paragraph under "Certain Covenants of the Company"), in each case if theCompany deposits, in trust with the Indenture Trustee, money or u.s. Government Obligations which
through the payment of interest thereon and principal thereof in accordance with their terms will
provide money, in an amount sufficient to pay all the principal of, and interest and premium, if any, on
the Junior Subordinated Debentures on the dates such payments are due in accordance with the termsof such junior subordinated Debentures. To exercise any such option, the Company is required todeliver to the Indenture Trustee an opinion of counsel to the effect that the deposit and related
defeasance would not cause the holders of the Junior Subordinated Debentures to recognize income,gain or loss for United States federal income tax purposes and, in the case of a discharge pursuant toclause (a), such opinion shall be accompanied by a private letter ruling to the effect received by theCompany from the United States Internal Revenue Service or revenue ruling pertaining to acomparable form of transaction to such effect published by the United states Internal Revenue
Service.
Distributions of Junior Subordinated Debentures; Book-Entry Issuance
Under certain circumstances involving the termination of the Trust, Junior SubordinatedDebentures may be distributed to the holders of the Capital securities in liquidation of the Trust aftersatisfaction of liabilities to creditors of the Trust as provided by applicable law. If distributed to holders
of Capital Securities in liquidation, the Junior Subordinated debentures will initially be issued in theform of global securities and certificated securities. DTC, or any successor depositary, will act as
depositary for such global securities. It is anticipated that the depositary arrangements for and certain
restrictions with respect to such global securities would be Substantially identical to those in effect for
the Capital Securities. For a description of global securities and certificated securities, see "Book-Entry
Issuance."
There can be no assurance as to the market price of any Junior Subordinated Debentures that
may be distributed to the holders of Capital Securities.
Payment and Paying Agents
The Company initially will act as Paying Agent with respect to the Junior Subordinated Debentures
except that, if the Junior Subordinated Debentures are distributed to the holders of the Capital
Securities in liquidation of such holders' interests in the Trust, the Indenture Trustee will act as the40

Paying Agent. The Company at any time may designate additional Paying Agents or rescind thedesignation of any Paying Agent or approve a change in the office through which any Paying Agentacts, except that the Company will be required to maintain a Paying Agent at the place of payment.
Any moneys deposited with the Indenture Trustee or any Paying Agent, or then held by theCompany in trust, for the payment of the principal of and premium, if any, or interest on any Junior
Subordinated Debentures and remaining unclaimed for two years after such principal and premium, ifany, or interest has become due and payable shall, at the request of the Company, be repaid to theCompany and the holder of such Junior Subordinated Debentures shall thereafter look, as a general
unsecured creditor, only to the Company for payment thereof.
Governing Law
The Indenture and the Junior Subordinated Debentures will be governed by and construed inaccordance with the laws of the State of New York.
Information Concerning the Indenture Trustee
The Indenture Trustee shall have and be subject to all the duties and responsibilities specified withrespect to an indenture trustee under the Trust Indenture Act. Subject to such provisions, the Indenture
Trustee is under no obligation to exercise any of the powers vested in it by the Indenture at the requestof any holder of Junior Subordinated Debentures, unless offered reasonable indemnity by such holder
against the costs, expenses and liabilities which might be incurred thereby. The Indenture Trustee is
not required to expend or risk its own funds or otherwise incur personal financial liability in theperformance of its duties if the Indenture Trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it.
The Company and certain of its affiliates conduct banking and other transactions with the
Indenture Trustee and its affiliates in the ordinary course of their business.

41

DESCRIPTION OF GUARANTEEThe Guarantee will be executed and delivered by the Company concurrently with the issuance by
the Trust of the Capital Securities for the benefit of the holders from time to time of such Capital
Securities. The Chase Manhattan Bank will act as trustee ("Guarantee Trustee") under the Guarantee.
This summary of certain provisions of the Guarantee does not purport to be complete and is subject
to, and qualified in its entirety by reference to, all of the provisions of the Guarantee, including thedefinitions therein of certain terms. The Guarantee Trustee will hold the Guarantee for the benefit of
the holders of the Capital Securities.
GeneralThe Company will irrevocably and unconditionally agree to pay in full on a subordinated basis, tothe extent set forth in the Guarantee and described herein, the Guarantee Payments (as defined
below) to the holders of the Capital Securities, as and when due, regardless of any defense, right of
set-off or counterclaim that the Trust may have or assert other than the defense of payment. The
following payments with respect to the Capital Securities, to the extent not paid by or on behalf of theTrust (the "Guarantee Payments"), will be subject to the Guarantee: (i) any accumulated and unpaid
Distributions required to be paid on the Capital Securities, to the extent that the Trust has sufficient
funds available therefor at the time, (ii) the redemption price with respect to any Capital Securities
called for redemption, to the extent that the Trust has sufficient funds available therefor at such time,or (iii) upon a voluntary or involuntary dissolution, winding up or liquidation of the Trust (unless the
Junior Subordinated Debentures are distributed to holders of the Capital Securities), the lesser of (a)the aggregate liquidation amount of the Capital Securities and all accrued and unpaid Distributions
thereon to the date of payment and (b) the amount of assets of the Trust remaining available for
distribution to holders of Capital Securities. The Company's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by the Company to the holders of theapplicable Capital Securities or by causing the Trust to pay such amounts to such holders.
The Guarantee will be an irrevocable guarantee on a subordinated basis of the Trust's obligations
under the Capital Securities, but will apply only to the extent that the Trust has sufficient funds
available to make such payments.
If the Company does not make interest payments on the Junior Subordinated Debentures held by
the Trust, the Trust will not be able to pay Distributions on the Capital Securities and will not havefunds legally available therefor. The Guarantee will rank subordinate and junior in right of payment to
all Indebtedness of the Company to the same extent as the Junior Subordinated Debenture. See "—Status of the Guarantee." The Guarantee does not limit the incurrence or issuance of other secured
or unsecured debt of the Company, whether under the Indenture or any existing or other indenture that
the Company may enter into in the future or otherwise.
The Company has, through the Guarantee, the Junior Subordinated Debentures and theIndenture, taken together, fully and unconditionally guaranteed all of the Trust's obligations under the
Capital Securities. No single document standing alone or operating in conjunction with fewer than allof the other documents constitutes such guarantee. It is only the combined operation of these
documents that has the effect of providing a full and unconditional guarantee of the Trust's obligations
under the Capital Securities. See "Relationship Among the Capital Securities, the Junior SubordinatedDebentures and the Guarantee."
Status of the Guarantee
The Guarantee will constitute an unsecured obligation of the Company and will rank subordinate
and junior in right of payment to all Indebtedness of the Company to the same extent as the Junior
Subordinated Debenture. The Guarantee does not place a limitation on the amount of additional
Indebtedness that may be incurred by the Company.
42

The Guarantee will constitute a guarantee of payment and not of collection (i.e., the guaranteed
party may institute a legal proceeding directly against the Guarantor to enforce its rights under the
Guarantee without first instituting a legal proceeding against any other person or entity). The
Guarantee will be held by the Guarantee Trustee for the benefit of the holders of the Capital Securities.
The Guarantee will not be discharged except by payment of the Guarantee Payments in full to theextent not paid by the Trust or upon distribution of the Junior Subordinated Debentures to the holdersof the Capital Securities in exchange for all of the Capital Securities.
Amendments and Assignment
Except with respect to any changes that do not materially adversely affect the rights of holders of
the Capital Securities (in which case no vote will be required), the Guarantee may not be amended
without the prior approval of the holders of not less than a majority of the aggregate liquidation amountof the outstanding Capital Securities. The manner of obtaining any such approval will be as set forth
under "Description of Capital Securities—Voting Rights; Amendment of the Declaration." Allguarantees and agreements contained in the Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of the Company and shall inure to the benefit of the registered holders of
the Capital Securities then outstanding.
Events of Default
An event of default under the Guarantee will occur upon the failure of the Company to perform
any of its payment or other obligations thereunder. The holders of a majority in aggregate liquidation
amount of the Capital Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of the Guarantee or to direct
the exercise of any trust or power conferred upon the Guarantee Trustee under the Guarantee.
Any holder of the Capital Securities may institute a legal proceeding directly against the Company
to enforce its rights under the Guarantee without first instituting a legal proceeding against the Trust,the Guarantee Trustee or any other person or entity.
The Company, as guarantor, is required to file annually with the Guarantee Trustee a certificate
as to whether or not the Company is in compliance with all the conditions and covenants applicable toit under the Guarantee.
Information Concerning the Guarantee Trustee
The Guarantee Trustee, other than during the occurrence and continuance of a default by theCompany in performance of the Guarantee, undertakes to perform only such duties as are specificallyset forth in the Guarantee and, after default with respect to the Guarantee, must exercise the same
degree of care and skill as a prudent person would exercise or use in the conduct of his or her own
affairs. Subject to this provision, the Guarantee Trustee is under no obligation to exercise any of thepowers vested in it by the Guarantee at the request of any holder of any Capital Security unless it isoffered reasonable indemnity against the costs, expenses and liabilities that might be incurred thereby.
The Company and certain of its affiliates conduct banking and other transactions with the
Guarantee Trustee and its affiliates in the ordinary course of their business.
Termination of the Guarantee
The Guarantee will terminate and be of no further force and effect upon full payment of the
Redemption Price of all of the Capital Securities, upon full payment of the amounts payable uponliquidation of the Trust or upon distribution of Junior Subordinated Debentures to the holders of theCapital Securities in exchange for all of the Capital Securities. The Guarantee will continue to beeffective or will be reinstated, as the case may be, if at any time any holder of the Capital Securities
must restore payment of any sums paid under the Capital Securities or the Guarantee.
Governing Law
The Guarantee will be governed by and construed in accordance with the laws of the State of New
York.
43

RELATIONSHIP AMONG THE CAPITAL SECURITIES,THE JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
Payments of Distributions and other amounts due on the Capital Securities (to the extent the Trust
has funds available for the payment of such Distributions) are irrevocably guaranteed by the Company
as and to the extent set forth under "Description of Guarantee." If and to the extent that the Company
does not make payments under the Junior Subordinated Debentures, the Trust will not pay
Distributions or other amounts due on the Capital Securities. The Guarantee does not cover payment
of Distributions when the Trust does not have sufficient funds to pay such Distributions. In such event,a holder of Capital Securities may institute a legal proceeding directly against the Company under the
Indenture to enforce payment of such Distributions to such holder after the respective due dates.
Taken together, the Company's obligations under the Junior Subordinated Debentures, the Indenture
and the Guarantee provide, in the aggregate, a full and unconditional guarantee of payments of
distributions and other amounts due on the Capital Securities. No single document standing alone oroperating in conjunction with fewer than all of the other documents constitutes such guarantee. It isonly the combined operation of these documents that has the effect of providing a full andunconditional guarantee of the Trust's obligations under the Capital Securities. The obligations of theCompany under the Guarantee and the Junior Subordinated Debentures are subordinate and junior inright of payment to all Indebtedness of the Company to the extent described herein.

Sufficiency of Payments
As long as payments of interest and other payments are made when due on the Junior
Subordinated Debentures, such payments will be sufficient to cover Distributions and other payments
due on the Capital Securities, primarily because (i) the aggregate principal amount of the Junior
Subordinated Debentures will be equal to the sum of the aggregate stated liquidation amount of theCapital Securities and the Common Securities; (ii) the interest rate and interest and other payment
dates on the Junior Subordinated Debentures will match the Distribution rate and Distribution and otherpayment dates for the related Capital Securities; (iii) the Company will pay for all and any costs,
expenses and liabilities of the Trust except the Trust's obligations under the Capital Securities; and (iv)the Declaration further provides that the Trust will not engage in any activity that is not consistent withthe limited purposes of the Trust.
Notwithstanding anything to the contrary in the Indenture, the Company has the right to set-off any
payment it is otherwise required to make there under with and to the extent the Company has
theretofore made, or is concurrently on the date of such payment making, a related payment under
the Guarantee.
Enforcement Rights of Holders of Capital Securities
A holder of Capital Securities may institute a legal proceeding directly against the Company toenforce its rights under the Guarantee without first instituting a legal proceeding against the Guarantee
Trustee, the Trust or any other person or entity.
A default or event of default under any Indebtedness of the Company will not constitute a default
or Indenture Event of Default. In addition, in the event of payment defaults under, or acceleration of,Indebtedness of the Company, the subordination provisions of the Indenture provide that, except asotherwise specified therein, no payments may be made in respect of the Junior SubordinatedDebentures until such Indebtedness has been paid in full or any payment default thereunder has been
cured or waived. Failure to make required payments on the Junior Subordinated Debentures would
constitute an Indenture Event of Default under the Indenture.
44

Limited Purpose of Trust
The Capital Securities evidence a beneficial ownership interest in the assets of the Trust, and theTrust exists for the sole purpose of issuing the Capital Securities and the Common Securities andinvesting the proceeds thereof in Junior Subordinated Debentures. A principal difference between therights of a holder of Capital Securities and a holder of Junior Subordinated Debentures is that a holder
of Junior Subordinated Debentures is entitled to receive from the Company the principal amount of andinterest accrued on Junior Subordinated Debentures held, while a holder of Capital Securities is
entitled to receive Distributions from the Trust (or from the Company under the Guarantee) if and to
the extent the Trust has funds available for the payment of such Distributions.
Rights Upon Termination
Upon any voluntary or involuntary termination, winding-up or liquidation of the Trust involving theliquidation of the Junior Subordinated Debentures, the holders of the Capital Securities will be entitled
to receive, out of assets held by the Trust, the liquidation distribution in cash. See "Description of
Capital Securities—Liquidation Distribution Upon Dissolution." Upon any voluntary or involuntaryliquidation or bankruptcy of the Company, the Property Trustee, as holder of the Junior SubordinatedDebentures, would be a subordinated creditor of the Company, subordinated in right of payment to all
Indebtedness to the extent described herein, but entitled to receive payment in full of principal andinterest before any stockholders of the Company receive payments or distributions. Since theCompany is the guarantor under the Guarantee and has agreed to pay for all costs, expenses andliabilities of the Trust (other than the Trust's obligations to the holders of the Capital Securities), thepositions of a holder of Capital Securities and a holder of the Junior Subordinated Debentures relative
to other creditors and to stockholders of the Company in the event of liquidation or bankruptcy of theCompany would be substantially the same.

45

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Simpson Thacher & Bartlett, in its capacity as special tax counsel to the Company
and the Trust ("Tax Counsel"), the following summary accurately describes the material United Statesfederal income tax consequences that may be relevant to the purchase, ownership and disposition of
the Capital Securities. Unless otherwise stated, this summary deals only with Capital Securities held
as capital assets by United States Persons (defined below) who purchase the Capital Securities uponoriginal issuance at their original offering price. As used herein, a "United States Person" means (i) aperson that is a citizen or resident of the United States, (ii) a corporation, partnership or other entity
created or organized in or under the laws of the United States or any political subdivision thereof, (iii)
an estate the income of which is subject to United States federal income taxation regardless of its
source, or (iv) any trust, if a court within the United States is able to exercise primary supervision over
the administration of such trust and one or more United States fiduciaries have the authority to control
all the substantial decisions of such trust. The tax treatment of a holder may vary depending on its
particular situation. This summary does not address all the tax consequences that may be relevant toa particular holder or to holders that may be subject to special tax treatment, such as banks, real estate
investment trusts, regulated investment companies, insurance companies, dealers in securities orcurrencies, or tax-exempt investors. In addition, this summary does not include any description of any
alternative minimum tax consequences or the tax laws of any state, local or foreign government that
may be applicable to a holder of Capital Securities. This summary is based on the Internal Revenue
Code of 1986, as amended (the "Code"), the Treasury regulations promulgated thereunder andadministrative and judicial interpretations thereof, as of the date hereof, all of which are subject tochange, possibly on a retroactive basis. The authorities on which this summary is based are subject tovarious interpretations, and the opinions of Tax Counsel are not binding on the Internal Revenue
Service ("IRS") or the courts, either of which could take a contrary position. Moreover, no rulings havebeen or will be sought from the IRS with respect to the transactions described herein. Accordingly,
there can be no assurance that the IRS will not challenge the opinions or that a court
would not sustain such a challenge. Nevertheless, Tax Counsel has advised that it is of the view that,
if challenged, the opinions expressed herein would be sustained by a court with jurisdiction in aproperly presented case.
HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAXCONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
CAPITAL SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,FOREIGN, AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITEDSTATES FEDERAL OR OTHER TAX LAWS. FOR A DISCUSSION OF THE POSSIBLE
REDEMPTION OF THE CAPITAL SECURITIES UPON THE OCCURRENCE OF CERTAIN TAXEVENTS SEE "DESCRIPTION OF CAPITAL SECURITIES—REDEMPTION—SPECIAL EVENTREDEMPTION OR DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES."Classification of the Trust
In connection with the issuance of the Capital Securities, Tax Counsel will deliver an opinion that
under current law and assuming full compliance with the terms of the Declaration and otherdocuments, the Trust will be classified as a grantor trust and will not be taxable as a corporation for
United States federal income tax purposes. Accordingly, for United States federal income tax
purposes, each holder of Capital Securities will be treated as owning an undivided beneficial interestin the Junior Subordinated Debentures and, thus, will be required to include in its gross income its pro
rata share of interest income or original issue discount that is paid or accrued on the Junior
Subordinated Debentures.
Classification of the Junior Subordinated Debentures
The Company, the Trust and the holders of the Capital Securities (by the acceptance of abeneficial interest in a Capital Security) will agree to treat the Junior Subordinated Debentures asindebtedness for all United States federal income tax purposes. In connection with the issuance of the
Junior Subordinated Debentures, Tax Counsel will deliver an opinion that, under current law, andbased on the representations, facts and assumptions set forth herein, the Junior SubordinatedDebentures will be classified as indebtedness for United States federal income tax purposes.
46

Interest Income and Original Issue DiscountUnder the applicable Treasury regulations, the Junior Subordinated Debentures will not be treatedas issued with "original issue discount" ("OID") within the meaning of section 1273(a) of the Code.
Accordingly, except as set forth below, stated interest on the Junior Subordinated Debenturesgenerally will be taxable to a holder as ordinary income at the time it is paid or accrued in accordancewith such holder's regular method of tax accounting.
If, however, the Company exercises its right to defer payments of interest on the Junior
Subordinated Debentures, the Junior Subordinated Debentures will become OID instruments at suchtime and all holders of the Junior Subordinated Debentures and, consequently, holders of the Capital
Securities will be required to accrue their pro rata share of OID (which will include both the statedinterest and the de minimis OID on the Junior Subordinated Debentures) on a daily economic accrualbasis during the Extension Period even though the Company will not pay such interest until the end of
the Extension Period, and even though some holders may use the cash method of tax accounting.
Moreover, thereafter the Junior Subordinated Debentures will be taxed as OID instruments for as longas they remain outstanding. Thus, even after the end of an Extension Period, all holders would be
required to continue to include the stated interest (and the de minimis OID) on the Junior SubordinatedDebentures in income on a daily basis, regardless of their method of tax accounting and in advance ofreceipt of the cash attributable to such interest income. Under the OID economic accrual rules, aholder would accrue an amount of interest income each year that approximates the stated interest
payments called for under the terms of the Junior Subordinated Debentures, and actual cash payments
of interest on the Junior Subordinated Debentures would not be reported separately as taxable income.
Any amount of OID included in a holder's gross income (whether or not during an Extension Period)
with respect to a Capital Security will increase such holder's tax basis in such Capital Security, andthe amount of Distributions received by a holder in respect of such accrued OID will reduce the tax
basis of such Capital Security.
The Treasury regulations described above have not yet been addressed in any rulings or otherinterpretations by the IRS, and it is possible that the IRS could take a contrary position. If the IRS wereto assert successfully that the stated interest on the Junior Subordinated Debentures was OID
regardless of whether the Company exercises its option to defer payments of interest on suchdebentures, all holders of Capital Securities would be required to include such stated interest in income
on a daily economic accrual basis as described above.
Corporate holders of Capital Securities will not be entitled to a dividends-received deduction withrespect to any income recognized by such holders with respect to the Capital Securities.
Distribution of Junior Subordinated Debentures or Cash upon Liquidation of the TrustAs described under the caption "Description of Junior Subordinated Debentures—Distribution of
Junior Subordinated Debentures; Book-Entry Issuance," Junior Subordinated Debentures may be
distributed to holders in exchange for the Capital Securities and in liquidation of the Trust. Under
current law, such a distribution would be non-taxable, and will result in the holder receiving directly its
pro rata share of the Junior Subordinated Debentures previously held indirectly through the Trust, witha holding period and aggregate tax basis equal to the holding period and aggregate tax basis suchholder had in its Capital Securities before such distribution. If, however, the liquidation of the Trust
were to occur because the Trust is subject to United States federal income tax with respect to income
accrued or received on the Junior Subordinated Debentures, the distribution of the Junior SubordinatedDebentures to holders would be a taxable event to the Trust and to each holder and a holder would
recognize gain or loss as if the holder had exchanged its Capital Securities for the Junior SubordinatedDebentures it received upon liquidation of the Trust. A holder would accrue interest in respect of the
Junior Subordinated Debentures received from the Trust in the manner described above under "—Interest Income and Original Issue Discount."
Under certain circumstances described herein (see "Description of Capital Securities—
Redemption—Special Event Redemption or Distribution of Junior Subordinated Debentures"), the47

Junior Subordinated Debentures may be redeemed for cash, with the proceeds of such redemption
distributed to holders in redemption of their Capital Securities. Under current law, such a redemption
would constitute a taxable disposition of the redeemed Capital Securities for United States federal
income tax purposes, and a holder would recognize gain or loss as if it sold such redeemed Capital
Securities for cash. See "—Sales of Capital Securities."
Sales of Capital Securities
A holder that sells Capital Securities will recognize gain or loss equal to the difference between
the amount realized by such holder on the sale of the Capital Securities (except to the extent that suchamount realized is characterized as a payment in respect of accrued but unpaid interest on suchholder's allocable share of the Junior Subordinated Debentures that the holder had not included ingross income previously) and the holder's adjusted tax basis in the Capital Securities sold. Such gainor loss generally will be a capital gain or loss and generally will be taxable as a long-term capital gainor loss if the Capital Securities have been held for more than one year. Subject to certain limited
exceptions, capital losses cannot be applied to offset ordinary income for United States federal income
tax purposes.
Proposed Tax Law Changes
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill") was introduced in the104th Congress which would have, among other things, generally denied interest deductions forinterest on an instrument, issued by a corporation that has a maximum term of more than 20 years
and that is not shown as indebtedness on the separate balance sheet of the issuer or, where theinstrument is issued to a related party (other than a corporation) where the holder or some otherrelated party issues a related instrument that is not shown as indebtedness on the issuer's
consolidated balance sheet. This provision of the Bill was proposed to be effective generally for
instruments issued on or after December 7, 1995. If this provision were to apply to the Junior
Subordinated Debentures, the Company would not be able to deduct interest on the Junior
Subordinated Debentures. However, on March 29, 1996, the Chairmen of the Senate Finance andHouse Ways and Means Committees issued the Joint Statement to the effect that it was their intention
that the effective date of the Bill, if enacted, would be no earlier than the date of appropriate
Congressional action. In addition, subsequent to the publication of the Joint Statement, Senator Daniel
Patrick Moynihan and Representatives Sam M. Gibbons and Charles B. Rangel sent the Democrat
Letters to Treasury Department officials concurring with the views expressed in the Joint Statement.
The 104th Congress adjourned without enacting the Bill. Moreover, if the principles contained in the
Joint Statement and Democrat Letters were followed, any similar legislation that is subsequently
enacted would not apply to the Junior Subordinated Debentures. It is possible that similar legislative
proposals may be offered by the Administration and considered by Congress in 1997. There can be
no assurance that future legislative or administrative proposals or final legislation will not adversely
affect the ability of the Company to deduct interest on the Junior Subordinated Debentures orotherwise affect the tax treatment described herein. Such a change, therefore, could give rise to a Tax
Event, which would permit the Company to cause the redemption of the Capital Securities or toterminate the Trust and distribute the Junior Subordinated Debentures to the holders of Trust
Securities in liquidation of the Trust as described more fully under "Description of Capital Securities—
Redemption—Special Event Redemption or Distribution of Junior Subordinated Debentures."
Non-United States Holders
As used herein, the term "Non-United States Holder" means any holder that is not a United States
Person (as defined above). As discussed above, the Capital Securities will be treated as evidence ofan indirect beneficial ownership interest in the Junior Subordinated Debentures. See "—Classificationof the Trust." Thus, under present United States federal income tax law, and subject to the discussion
below concerning backup withholding:(a) no withholding of United States federal income tax will be required with respect to thepayment by the Trust or the Company or any paying agent of principal or interest (which for48

purposes of this discussion includes any OID) with respect to the Capital Securities (or on the
Junior Subordinated Debentures) to a Non-United States Holder, provided (i) that the beneficial
owner of the Capital Securities ("Beneficial Owner") does not actually or constructively own 10%
or more of the total combined voting power of all classes of stock of the Company entitled to votewithin the meaning of section 871(h)(3) of the Code and the regulations thereunder, (ii) the
Beneficial Owner is not a controlled foreign corporation that is related to the Company throughstock ownership, (iii) the Beneficial Owner is not a bank whose receipt of interest with respect to
the Capital Securities (or on the Junior Subordinated Debentures) is described in section
881(c)(3)(A) of the Code and (iv) the Beneficial Owner satisfies the statement requirement(described generally below) set forth in section 871(h) and section 881(c) of the Code and theregulations thereunder; and(b) no withholding of United States federal income tax will be required with respect to any gain
realized by a Non-United States Holder upon the sale or other disposition of the Capital Securities(or Junior Subordinated Debentures).
To satisfy the requirement referred to in (a)(iv) above, the Beneficial Owner, or a financial
institution holding the Capital Securities on behalf of such owner, must provide, in accordance withspecified procedures, to the Trust or its paying agent, a statement to the effect that the Beneficial
Owner is not a United States Person. Pursuant to current temporary Treasury regulations, theserequirements will be met if (1) the Beneficial Owner provides his name and address, and certifies,
under penalties of perjury, that it is not a United States Person (which certification may be made on
an IRS Form W-8 (or successor form)) or (2) a financial institution holding the Capital Securities onbehalf of the Beneficial Owner certifies, under penalties of perjury, that such statement has been
received by it and furnishes a paying agent with a copy thereof.
If a Non-United States Holder cannot satisfy the requirements of the "portfolio interest" exception
described in (a) above, payments of interest (including any OID) made to such Non-United States
Holder will be subject to a 30% withholding tax unless the Beneficial Owner provides the Trust or theCompany or any paying agent, as the case may be, with a properly executed (1) IRS Form 1001 (orsuccessor form) claiming an exemption from, or a reduction of, such withholding tax under the benefitof a tax treaty or (2) IRS Form 4224 (or successor form) stating that interest paid with respect to theCapital Securities (or on the Junior Subordinated Debentures) is not subject to withholding tax because
it is effectively connected with the Beneficial Owner's conduct of a trade or business in the UnitedStates.
If a Non-United States Holder is engaged in a trade or business in the United States and intereston the Junior Subordinated Debentures is effectively connected with the conduct of such trade orbusiness, the Non-United States Holder, although exempt from the withholding tax discussed above,
will be subject to United States federal income tax on such interest income on a net income basis in
the same manner as if it were a United States Person. In addition, if such Non-United States Holder isa foreign corporation, it may be subject to a branch profits tax equal to 30% of its effectively connected
earnings and profits for the taxable year, subject to adjustments. For this purpose, such interest
income would be included in such foreign corporation's earnings and profits.
Any gain realized upon the sale or other disposition of the Capital Securities (or the Junior
Subordinated Debentures) generally will not be subject to United States federal income tax unless (i)such gain is effectively connected with a trade or business in the United States of the Non-UnitedStates Holder, (ii) in the case of a Non-United States Holder who is an individual, such individual ispresent in the United States for 183 days or more in the taxable year of such sale, exchange orretirement, and certain other conditions are met, or (iii) in the case of any gain representing accrued
interest on the Junior Subordinated Debentures, the requirements of the "portfolio interest" exception
described in (a) above are not satisfied.
As discussed above, legislation was introduced in the 104th Congress that would have denied aninterest deduction to the Company for the interest payable on the Junior Subordinated Debentures.
49

Such legislation also may have caused the Junior Subordinated Debentures to have been classified
as equity (rather than indebtedness) of the Company for United States federal income purposes and,thus, caused the income derived from the Junior Subordinated Debentures to be characterized as
dividend, rather than interest, income for such purposes. Dividend income is not eligible for the"portfolio interest" exception described in (a) above. Therefore, if such legislation had been enacted,
income derived by a Non-United States Holder on the Capital Securities may have been subject to the
30% United States federal withholding tax described above, unless a reduction or elimination of suchtax was available under an applicable tax treaty or such dividend income was effectively connectedwith a trade or business carried on in the United States by such Non-United States Holder. The 104th
Congress adjourned without enacting such legislation. However, it is possible that legislation could beenacted in the future that could affect the characterization of income paid on the Capital Securities (orthe Junior Subordinated Debt Securities) or otherwise adversely affect a Non-United States Holder.
See "—Proposed Tax Law Changes".
Information Reporting and Backup Withholding
The amount of interest (or OID, if any) accrued on the Capital Securities (or the Junior
Subordinated Debentures) held of record by United States Persons (other than corporations and otherexempt holders) will be reported annually to such holders and to the IRS. The Property Trustee
currently intends to deliver such reports to holders of record prior to January 31 following eachcalendar year. It is anticipated that persons who hold Capital Securities as nominees for beneficial
holders will report the required tax information to beneficial holders on Form 1099.
"Backup withholding" at a rate of 3 1 % will apply to payments of interest (or OID, if any) to nonexempt United States Persons unless the holder furnishes its taxpayer identification number in themanner prescribed in applicable Treasury regulations, certifies that such number is correct, certifies as
to no loss of exemption from backup withholding and meets certain other conditions.
No information reporting or backup withholding will be required with respect to payments made by
the Trust or any paying agent to Non-United States Holders if a statement described in (a)(iv) under"Non-United States Holders" has been received and the payor does not have actual knowledge thatthe beneficial owner is a United States Person.
In addition, backup withholding and information reporting will not apply if payments of the principal,
interest, OID or premium on the Junior Subordinated Debentures are paid or collected by a foreign
office of a custodian, nominee or other foreign agent on behalf of the Beneficial Owner, or if a foreign
office of a broker (as defined in applicable Treasury regulations) pays the proceeds of the sale of theCapital Securities (or the Junior Subordinated Debentures) to the owner thereof. If, however, suchnominee, custodian, agent or broker is, for United States federal income tax purposes, a United States
Person, a controlled foreign corporation or a foreign person that derives 50% or more of its grossincome for certain periods from the conduct of a trade or business in the United States, such payments
will not be subject to backup withholding but will be subject to information reporting, unless (1) suchcustodian, nominee, agent or broker has documentary evidence in its records that the Beneficial
Owner is not a United States Person and certain other conditions are met or (2) the Beneficial Owner
otherwise establishes an exemption.
Payment of the proceeds from disposition of Capital Securities (or the Junior SubordinatedDebentures) to or through a United States office of a broker is subject to information reporting andbackup withholding unless the holder or beneficial owner establishes an exemption from information
reporting and backup withholding.
Any amounts withheld from a holder of the Capital Securities under the backup withholding rules
will be allowed as a refund or a credit against such holder's United States federal income tax liability,
provided the required information is furnished to the IRS.
50

BOOK-ENTRY ISSUANCE
Capital Securities offered and sold to qualified institutional buyers in reliance on Rule 144A ("Rule144A Capital Securities") initially will be represented by one or more Capital Securities in registered,global form (collectively, the "Restricted Global Capital Securities"). Capital Securities offered and soldto institutional accredited investors in transactions exempt from registration under the Securities Act
not made in reliance on Rule 144A or Regulation S ("Other Capital Securities") will be issued only inregistered, certificated (i.e., non-global) form. Capital Securities offered and sold outside of the UnitedStates in reliance on Regulation S under the Securities Act will be issued in the form of a single
temporary global note (the "Regulation S Temporary Global Capital Securities"). Beneficial interests in
a Regulation S Temporary Global Capital Security will be exchanged for beneficial interests in a single
permanent global note (the "Regulation S Permanent Capital Securities" and, together with theRegulation S Temporary Global Note, the "Regulation S Global Capital Securities") upon the later of(i) the Restricted Period (as defined herein) and (ii) the first date on which the requisite certifications
are provided to the Property Trustee as described under "—Payments; Certifications by Holders ofRegulation S Temporary Capital Securities." Regulation S Global Capital Securities together with
Restricted Global Capital Securities are referred to herein as the "Global Capital Securities."
The Global Capital Securities will be deposited upon issuance with the Property Trustee ascustodian for The Depository Trust Company ("DTC"), in New York, New York, and registered in thename of DTC or its nominee, in each case for credit to an account of a direct or indirect participant in
DTC as described below. Through and including the 40th day after the later of the commencement of
the offering and the issue date (such period through and including such 40th day, the "Restricted
Period"), beneficial interests in the Regulation S Global Capital Securities may be held only throughthe Euroclear System ("Euroclear") and Cedel, S.A. ("CEDEL") (as indirect participants in DTC),
unless transferred to a person that takes delivery through the Restricted Global Capital Securities inaccordance with the certification requirements described below. Beneficial interests in the Restricted
Global Capital Securities may not be exchanged for beneficial interests in the Regulation S Global
Capital Securities at any time except in the limited circumstances described below. See "—Exchanges
between Regulation S Capital Securities and Rule 144A Capital Securities."
Except as set forth below, the Global Capital Securities may be transferred, in whole and not inpart, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in
the Global Capital Securities may not be exchanged for Capital Securities in certificated form except
in the limited circumstances described below. See "Exchange of Book-Entry Capital Securities for
Certificated Capital Securities."
Other Capital Securities may not be exchanged for beneficial interests in any Global Capital
Securities except in the limited circumstances described below. See "Exchange of Certificated Capital
Securities for Book-Entry Capital Securities."
Capital Securities (including beneficial interests in the Restricted Global Capital Securities) will be
subject to certain restrictions on transfer and (other than Regulation S Global Capital Securities) willbear a restrictive legend as described under "Notice to Investors." In addition, transfer of beneficial
interests in the Global Capital Securities will be subject to the applicable rules and procedures of DTC
and its direct or indirect participants (including, if applicable, those of Euroclear and CEDEL), which
may change from time to time.
Depositary Procedures
DTC has advised the Trust and the Company that DTC is a limited-purpose trust company createdto hold securities for its participating organizations (collectively, the "Participants") and to facilitate theclearance and settlement of transactions in those securities between Participants through electronic
book-entry changes in accounts of its Participants. The Participants include securities brokers and51

dealers (including the Initial Purchasers), banks, trust companies, clearing corporations and certain
other organizations. Access to DTC's system is also available to other entities such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial relationship with a Participant,either directly or indirectly (collectively, the "Indirect Participants"). Persons who are not Participants
may beneficially own securities held by or on behalf of DTC only through the Participants or the Indirect
Participants. The ownership interest and transfer of ownership interest of each actual purchaser of
each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect
Participants.
DTC has also advised the Trust and the Company that, pursuant to procedures established by it,(i) upon deposit of the Global Capital Securities, DTC will credit the accounts of Participants
designated by the Initial Purchasers with portions of the principal amount of the Global Capital
Securities and (ii) ownership of such interests in the Global Capital Securities will be shown on, andthe transfer of ownership thereof will be effected only through, records maintained by DTC (withrespect to the Participants) or by the Participants and the Indirect Participants (with respect to otherowners of beneficial interests in the Global Capital Securities).
Investors in the Restricted Global Capital Securities may hold their interests therein directly
through DTC if they are participants in such system, or indirectly through organizations (including
Euroclear and CEDEL) which are participants in such system. Investors in the Regulation S Global
Capital Securities must initially hold their interests therein through Euroclear or CEDEL, if they areparticipants in such systems, or indirectly through organizations which are participants in such
systems. After the latter of the expiration of the Restricted Period and the first date on which therequisite certificates are provided to the Property Trustee as described under "—Payments;
Certifications by Holders of the Regulation S Temporary Global Capital Security" (but not earlier),
investors may also hold interests in the Regulation S Global Capital Securities through organizations
other than Euroclear and CEDEL that are participants in the DTC system. Euroclear and CEDEL willhold interests in the Regulation S Global Capital Securities on behalf of their participants throughcustomers' securities accounts in their respective names on the books of their respective depositaries,
which are Morgan Guaranty Trust Company of New York, Brussels office, as operator of Euroclear,and Citibank, N.A., as depository of CEDEL. The depositaries, in turn, will hold such interests in theRegulation S Global Capital Securities in customers' securities accounts in the depositaries' names on
the books of DTC. All interest in a Global Capital Security, including those held through Euroclear or
CEDEL, may be subject to the procedures and requirements of DTC. Those interests held throughEuroclear or CEDEL may also be subject to the procedures and requirements of such system. The
laws of some states require that certain persons take physical delivery in certificated form of securities
that they own. Consequently, the ability to transfer beneficial interests in a Global Capital Security tosuch persons will be limited to that extent. Because DTC can act only on behalf of Participants, which
in turn act on behalf of Indirect Participants and certain banks, the ability of a person having beneficial
interests in a Global Capital Security to pledge such interests to persons or entities that do notparticipate in the DTC system, or otherwise take actions in respect of such interests, may be affectedby the lack of a physical certificate evidencing such interests. For certain other restrictions on thetransferability of the Capital Securities, see "—Exchange of Book-Entry Capital Securities for
Certificated Capital Securities," "—Exchange of Certificated Capital Securities for Book-Entry Capital
Securities" and "—Exchanges Between Regulation S Capital Securities and Rule 144A Capital
Securities" below.
Except as described below, owners of interests in the Global Capital Securities will not have
Capital Securities registered in their name, will not received physical delivery of Capital Securities incertificated form and will not be considered the registered owners or holders thereof for any purpose.
Payments in respect of the Global Capital Security registered in the name DTC or its nominee will
be payable by the Property Trustee to DTC in its capacity as the registered holder. The Property
52

Trustee will treat the persons in whose names the Capital Securities, including the Global Capital
Securities, are registered as the owners thereof for the purpose of receiving such payments and forany and all other purposes whatsoever. Consequently, neither the Property Trustee nor any agent
thereof has or will have any responsibility or liability for (i) any aspect of DTC's records or any
Participant's or Indirect Participant's records relating to or payments made on account of beneficial
ownership interests in the Global Capital Securities, or for maintaining, supervising or reviewing any of
DTC's records or any Participant's or Indirect Participant's records relating to the beneficial ownershipinterests in the Global Capital Securities or (ii) any other matter relating to the actions and practices of
DTC or any of its Participants or Indirect Participants. DTC has advised the Trust and the Company
that its current practice, upon receipt of any payment in respect of securities such as the Capital
Securities, is to credit the accounts of the relevant Participants with the payment on the payment dateunless DTC has reason to believe it will not receive payment on such payment date. Payments by theParticipants and the Indirect Participants to the beneficial owners of Capital Securities will be governedby standing instructions and customary practices and will be the responsibility of the Participants or
the Indirect Participants and will not be the responsibility of DTC, the Property Trustee or the Trust.
Neither the Trust nor the Property Trustee will be liable for any delay by DTC or any of its Participantsin identifying the beneficial owners of the Capital Securities, and the Trust and the Property Trustee
may conclusively rely on and will be protected in relying on instructions from DTC or its nominee forall purposes.
Except for trades involving only Euroclear or CEDEL participants, interests in the Global Capital
Securities will trade in DTC's Same-Day Funds Settlement System and secondary market trading
activity in such interests will therefore settle in immediately available funds, subject in all cases to therules and procedures of DTC and its participants.
Transfers between Participants in DTC will be effected in accordance with DTC's procedures, andwill be settled in same-day funds. Transfers between participants in Euroclear or CEDEL will beeffected in the ordinary way in accordance with their respective rules and operating procedures.
Subject to compliance with the transfer restrictions applicable to the Capital Securities describedherein, cross-market transfers between the Participants in DTC, on the one hand, and Euroclear or
CEDEL participants, on the other hand, will be effected through DTC in accordance with DTC's rules
on behalf of Euroclear or CEDEL, as the case may be, by its respective depositary; however, suchcross-market transactions will require delivery of instructions to Euroclear or CEDEL, as the case may
be, by the counterparty in such system in accordance with the rules and procedures and within theestablished deadlines (Brussels time) of such system. Euroclear or CEDEL, as the case may be, will,
if the transaction meets its settlement requirements, deliver instructions to its respective depositary totake action to effect final settlement on its behalf by delivering or receiving interests in the relevant
Global Capital Securities in DTC, and making or receiving payment in accordance with normal
procedures for same-day funds settlement applicable to DTC. Euroclear participants and CEDEL
participants may not deliver instructions directly to the depositaries for Euroclear or CEDEL.
Because of time zone differences, the securities account of a Euroclear or CEDEL participant
purchasing an interest in a Global Capital Security from a Participant in DTC will be credited, and any
such crediting will be reported to the relevant Euroclear of CEDEL participant, during the securities
settlement processing day (which must be a business day for Euroclear and CEDEL) immediately
following the settlement date of DTC. Cash received in Euroclear or CEDEL as a result of sales ofinterest in a Global Capital Security by or through a Euroclear or CEDEL participant to a Participant in
DTC will be received with value on the settlement date of DTC but will be available in the relevant
Euroclear or CEDEL cash account only as of the business day for Euroclear or CEDEL following DTC's
settlement date.
DTC has advised the Trust and the Company that it will take any action permitted to be taken bya holder of Capital Securities only at the direction of one or more Participants to whose account with53

DTC interests in the Global Capital Securities are credited. However, if there is an Event of Default,
DTC reserves the right to exchange the Global Capital Securities for legended Capital Securities incertificated form and to distribute such Capital Securities to its Participants.
The information in this section concerning DTC, Euroclear and CEDEL and their book-entry
systems has been obtained from sources that the Trust and the Company believe to be reliable, butneither the Trust nor the Company takes responsibility for the accuracy thereof.
Although DTC, Euroclear and CEDEL have agreed to the foregoing procedures to facilitatetransfers of interest in the Regulation S Global Capital Securities and in the Restricted Global Capital
Securities among participants in DTC, Euroclear and CEDEL, they are under no obligation to perform
or to continue to perform such procedures, and such procedures may be discontinued at any time.
Neither the Trust nor the Property Trustee will have any responsibility for the performance by DTC,
Euroclear or CEDEL or their respective participants or indirect participants of their respective
obligations under the rules and procedures governing their operations.
Exchange of Book-Entry Capital Securities for Certificated Capital Securities
A Global Capital Security is exchangeable for Capital Securities in registered certificated form if(i) DTC (x) notifies the Trust that it is unwilling or unable to continue as Depositary for the Global
Capital Security and the Trust thereupon fails to appoint a successor Depositary or (y) has ceased to
be a clearing agency registered under the Exchange Act, (ii) the Company in its sole discretion elects
to cause the issuance of the Capital Securities in certificated form or (iii) there shall have occurred andbe continuing an Event of Default or any event which after notice or lapse of time or both would be an
Event of Default under the Declaration. In addition, beneficial interests in a Global Capital Security may
be exchanged for certificated Capital Securities upon request but only upon at least 20 days' priorwritten notice given to the Property Trustee by or on behalf of DTC in accordance with customary
procedures. In all cases, certificated Capital Securities delivered in exchange for any Global Capital
Security or beneficial interests therein will be registered in the names, and issued in any approved
denominations, requested by or on behalf of the Depositary (in accordance with its customary
procedures) and will bear, in the case of the Restricted Global Capital Security, the restrictive legend
referred to in "Notice to Investors."
Exchange of Certificated Capital Securities for Book-Entry Capital Securities
Other Capital Securities which will be issued in certificated form may not be exchanged forbeneficial interests in any Global Capital Security unless such exchange occurs in connection with atransfer of such Other Capital Securities and the transferor first delivers to the Property Trustee awritten certificate to the effect that such transfer will comply with the appropriate transfer restrictions
applicable to such Capital Securities as set forth in Appendix A hereto. In the case of any suchexchange for an interest in the Regulation S Global Capital Security, such transfer must occur pursuant
to Regulation S or Rule 144 (if available).
Exchanges Between Regulation S Capital Securities and Rule 144A Capital Securities
Prior to the expiration of the Restricted Period, beneficial interests in the Regulation S Global
Capital Security may be exchanged for beneficial interests in the Restricted Global Capital Security
only if such exchange occurs in connection with a transfer of the Capital Securities pursuant to Rule
144A and the transferor first delivers to the Property Trustee a written certificate to the effect that the
Capital Securities are being transferred to a person who the transferor reasonably believes is aqualified institutional buyer within the meaning of Rule 144A under the Securities Act, purchasing for
its own account or the account of a qualified institutional buyer in a transaction meeting therequirements of Rule 144A and in accordance with all applicable securities laws of the states of theUnited States and other jurisdictions.
54

Beneficial interests in the Restricted Global Capital Securities may be transferred to a person who
takes delivery in the form of an interest in the Regulation S Global Capital Securities, whether before
or after the expiration of the Restricted Period, only if the transferor first delivers to the Property
Trustee a written certificate to the effect that such transfer is being made in accordance with Rule 903
or 904 of Regulation S or Rule 144 (if available) and that, if such transfer occurs prior to the expirationof the Restricted Period, the interest transferred will be held immediately thereafter through Euroclear
or CEDEL.
Transfers involving an exchange of a beneficial interest in the Regulation S Global Capital
Securities for a beneficial interest in the Restricted Global Capital Securities or vice versa will beeffected in DTC by means of an instruction originated by the Property Trustee through the DTC
Deposit/Withdraw at Custodian ("DWAC") system.
Any beneficial interest in one of the Global Capital Securities that is transferred to a person who
takes delivery in the form of an interest in the other Global Capital Security will, upon transfer, cease
to be an interest in such Global Capital Security and will become an interest in the other Global Capital
Security and, accordingly, will thereafter be subject to all transfer restrictions and other procedures
applicable to beneficial interest in such other Global Capital Security for so long as it remains such aninterest.
Payments; Certifications by Holders of the Regulation S Temporary Global Capital Security
A holder of a beneficial interest in a Regulation S Temporary Global Capital Security must provide
Euroclear or CEDEL as the case may be, with a certificate in the form required by the Declaration
certifying that the beneficial owner of the interest in such Capital Security is not a U.S. Person, andEuroclear or CEDEL, as the case may be, must provide to the Property Trustee (or the paying agent if
other than the Property Trustee) a certificate in the form required by the Declaration, prior to (i) the
payment of Distributions, Redemption Price or any other payment with respect to such holder'sbeneficial interest in the Regulation S Temporary Global Capital Security and (ii) any exchange of such
beneficial interest for a beneficial interest in a Regulation S Permanent Global Capital Security.

NOTICE TO INVESTORS
Purchasers are advised to consult legal counsel prior to selling the Capital Securities. Each
purchaser of the Capital Securities, by its acceptance thereof, will be deemed to have acknowledged,
represented and agreed with the Initial Purchasers, the Company and the Trust as follows:(1) It understands and acknowledges that the Capital Securities have not been registered under
the Securities Act or any other applicable securities law or Part 16 of the regulations of the OCC and,
unless so registered, may not be offered, sold or otherwise transferred except in compliance with theregistration requirements of the Securities Act, Part 16 of the regulations of the OCC or any otherapplicable securities law, pursuant to an exemption therefrom or in a transaction not subject thereto,and in each case, in compliance with the conditions for transfer set forth in paragraph (4) below.
(2) It is:(a) a QIB within the meaning of Rule 144A under the Securities Act and is aware that any
sale of the Capital Securities to it will be made in reliance on Rule 144A. Such acquisition will befor its own account or for the account of another QIB;(b) an institutional "accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7)under the Securities Act (an "institutional accredited investor") that is purchasing Capital
55

Securities with a principal amount of at least $100,000, and if the Capital Securities are to bepurchased for one or more accounts ("investor accounts") for which it is acting as fiduciary or
agent, each such account is an institutional accredited investor that is purchasing Capital
Securities with a principal amount of at least $100,000. In the normal course of its business or its
investing activities, it invests in or purchases securities similar to the Capital Securities and it hassuch knowledge and experience in financial business matters that it is capable of evaluating themerits and risks of purchasing the Capital Securities. It is aware that it (or any investor account)
may be required to bear the economic risk of an investment in the Capital Securities for anindefinite period of time and it (or such account) is able to bear such risk for an indefinite period
and that it will be required to sign an agreement in the form attached hereto as Appendix A; or(c) a non-U.S. person and is acting in reliance upon Regulation S under the Securities Act.
As used herein "U.S. Person" has the meaning given it under Regulation S.
(3) It acknowledges that none of the Company, the Trust or the Initial Purchasers, or any person
representing such parties, has made any representation to it with respect to the Company, the Trustor the offering of the Capital Securities, other than in this offering Memorandum, which has beendelivered to it and upon which it is relying in making its investment decision with respect to the Capital
Securities. Accordingly, it acknowledges that no representation or warranty is made by the Initial
Purchasers as to the accuracy or completeness of such materials. It has had access to such financial
and other information concerning the Company, the Trust and the Capital Securities as it deemednecessary in connection with its decision to purchase any of the Capital Securities, including an
opportunity to ask questions and request information from the Company and the Initial Purchasers.
(4) It is purchasing the capital securities for its own account or for one or more investor, accounts
for which it is acting as a fiduciary or agent, in each case for investment, and not with a view to, or for
offer or sale in connection with, any distribution thereof in violation of the Securities Act or Part 16 of
the regulations of the OCC, subject to any requirement of law that the disposition of its property or theproperty of such investor account or accounts be at all times within its or their control and subject toits or their ability to resell such Capital Securities pursuant to Rule 144A, Regulation S or any
exemption from registration available under the Securities Act and Part 16 of the regulations of the
OCC. It agrees on its own behalf and on behalf of any investor account for which it is purchasing theCapital Securities, and each subsequent holder of the Capital Securities by its acceptance thereof willagree, to offer, sell or otherwise transfer such Capital Securities prior to the date which is three years
after the later of the date of original issue and the last date on which the Company or any affiliate of
the Company was the owner of such Capital Securities (or any predecessor thereto) (the "Resale
Restriction Termination Date") only (a) to the Company, (b) pursuant to a registration statement which
has been declared effective under the Securities Act and Part 16 of the regulations of the OCC, (c) forso long as the Capital Securities are eligible for resale pursuant to Rule 144A, to a person it reasonably
believes is a QIB that purchases for its own account or for the account of a QIB to whom notice isgiven that the transfer is being made in reliance on Rule 144A, (d) outside the United States in atransaction meeting the requirements of Rule 904 under the Securities Act, (e) to an institutional"accredited investor," within the meaning of subparagraph (a) (1), (2), (3) or (7) of Rule 501 under the
Securities Act that is acquiring the Capital Securities for its own account or for the account of such an
institutional "accredited investor," for investment purposes and not with a view to, or for offer or salein connection with, any distribution in violation of the Securities Act or Part 16 of the regulations of the
OCC or (f) pursuant to another available exemption from the registration requirements of the Securities
Act and Part 16 of the regulations of the OCC and, in each case, in accordance with the applicablesecurities laws of any state of the United States or any other applicable jurisdiction and subject to any
requirement of law that the disposition of its property or the property of such investor account or
accounts be at all times within its or their control. The foregoing restrictions on resale will not apply
subsequent to the Resale Restriction Termination Date. Each purchaser acknowledges that the56Company and the Property Trustee reserve the right prior to any offer, sale or other transfer prior to
the Resale Restriction Termination Date of the Capital Securities pursuant to clauses (d), (e) or (f)above to require the delivery of an opinion of counsel, certifications or other information acceptable to
the Company and the Property Trustee in form and substance. Each purchaser acknowledges thateach Capital Security will contain a legend substantially to the following effect: "THIS SECURITY (ORITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), ANY STATE SECURITIES LAWS OR PART 16 OF THE
REGULATIONS OF THE OFFICE OF THE CONTROLLER OF THE CURRENCY ("OCC") AND
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED,SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBYNOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONSOF SECTION 5 OF THE SECURITIES ACT AND PART 16 OF THE OCC'S REGULATIONSPROVIDED BY RULE 144A, REGULATION S OR ANOTHER EXEMPTION THEREUNDER. THE
HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, REPRESENTS, ACKNOWLEDGESAND AGREES FOR THE BENEFIT OF THE COMPANY THAT: (I) IT HAS ACQUIRED A"RESTRICTED" SECURITY WHICH HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACTOR PART 16 OF THE REGULATIONS OF THE OCC; (II) IT WILL NOT OFFER, SELL OR
OTHERWISE TRANSFER THIS SECURITY PRIOR TO THE LATER OF THE DATE WHICH IS
THREE YEARS AFTER THE DATE OF ORIGINAL ISSUANCE HEREOF AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF SUCH
RESTRICTED SECURITIES (OR ANY PREDECESSOR) EXCEPT (A) TO THE COMPANY, (B)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT AND PART 16 OF THE REGULATIONS OF THE OCC, (C) FOR SO
LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSONWHO THE SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (ASDEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (D) OUTSIDE THE UNITED STATES IN A TRANSACTIONMEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR," WITHIN THE MEANING OF SUBPARAGRAPH (A)(1),(2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE
SECURITIES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR PART 16 OF THE REGULATIONS OF THE OCC, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OR PART 16 OF THE REGULATIONS OF THE OCC, AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITEDSTATES OR ANY APPLICABLE JURISDICTION; AND (III) IT WILL, AND EACH SUBSEQUENTHOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THIS SECURITY OF THE
RESALE RESTRICTIONS SET FORTH IN (II) ABOVE. ANY OFFER, SALE OR OTHERDISPOSITION PURSUANT TO THE FOREGOING CLAUSES (II)(D) (E) AND (F) IS SUBJECT TO
THE RIGHT OF THE ISSUER OF THIS SECURITY AND THE PROPERTY TRUSTEE FOR SUCHSECURITIES TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS OR
OTHER INFORMATION ACCEPTABLE TO THEM IN FORM AND SUBSTANCE."(5) It understands and acknowledges that the purchase by it of any Capital Security constitutes a
representation by it that it either (a) is not a Plan or a Plan Asset Entity and is not purchasing such
Capital Securities on behalf of or with "plan assets" of any Plan or (b) is eligible for the exemptive relief
available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 with respect to such purchase. Capitalized
terms used in this representation have the meanings therefor set out under "Benefit Plan
Considerations."
57

(6) It acknowledges that the Company, the Initial Purchasers, the Trust and others will rely upon
the truth and accuracy of the foregoing acknowledgments, representations and agreements andagrees that, if any of the acknowledgments, representations and agreements deemed to have been
made by purchase of the Capital Securities are no longer accurate, it shall promptly notify the Initial
Purchasers. If it is acquiring any Capital Securities as a fiduciary or agent for one or more investor
accounts, it represents that it has sole investment discretion with respect to each such account and it
has full power to make the foregoing acknowledgments and agreements on behalf of each suchaccount.

BENEFIT PLAN CONSIDERATIONSBefore authorizing an investment in the Capital Securities, fiduciaries of pension, profit sharing orother employee benefit plans subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), should consider, among other matters, (a) ERISA's fiduciary standards (including
its prudence and diversification requirements), (b) whether such fiduciaries have authority to makesuch investment in the Capital Securities under the applicable Plan investment policies and governing
instruments, and (c) rules under ERISA and the Code that prohibit Plan fiduciaries from causing a Plan
to engage in a "prohibited transaction."
Section 406 of ERISA and Section 4975 of the Code prohibit Plans, as well as individual
retirement accounts and Keogh plans subject to Section 4975 of the Code (also "Plans"), from, among
other things, engaging in certain transactions involving "plan assets" with persons who are "parties ininterest" under ERISA or "disqualified persons" under the Code with respect to such Plan. A violationof these "prohibited transaction" rules may result in an excise tax or other liabilities under ERISA
and/or Section 4975 of the Code for such persons, unless exemptive relief is available under anapplicable statutory or administrative exemption. Employee benefit plans that are governmental plans(as defined in Section 3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA)
and foreign plans (as described in Section 4(b)(5) of ERISA) are not subject to the requirements of
ERISA or Section 4975 of the Code.
The Department of Labor ("DOL") has issued a regulation (29 C.F.R. § 2510.3-101) (the "Plan
Assets Regulation") concerning the definition of what constitutes the assets of a Plan. The Plan Assets
Regulation provides that as a general rule, the underlying assets and properties of corporations,partnerships, trusts and certain other entities in which a plan makes an "equity" investment will bedeemed for purposes of ERISA to be assets of the investing plan unless certain exceptions apply.
Pursuant to an exception contained in the Plan Assets Regulation, the assets of the Trust would
not be deemed to be "plan assets" of investing Plans if, immediately after the most recent acquisitionof any equity interest in the Trust, less than 25% of the value of each class of equity interest in the
Trust were held by Plans, other employee benefit plans not subject to ERISA or Section 4975 of theCode (such as governmental, church and foreign plans) and entities holding assets deemed to be"plan assets" of any Plan (collectively, "Benefit Plan Investors"). No assurance can be given that thevalue of the Capital Securities held by Benefit Plan Investors will be less than 25% of the total valueof such Capital Securities at the completion of the initial offering or thereafter, and no monitoring orother measures will be taken with respect to the satisfaction of the conditions to this exception. All of
the Common Securities will be purchased and held directly by the Company.
There can be no assurance that any of the exceptions set forth in the Plan Assets Regulation will
apply to the purchase of Capital Securities offered hereby and, as a result, an investing Plan's assets
could be considered to include an undivided interest in the Junior Subordinated Debentures held by
the Trust. In the event that assets of the Trust are considered assets of an investing Plan, theTrustees, the Company and other persons, in providing services with respect to the Junior
58

Subordinated Debentures, may be considered fiduciaries to such Plan and subject to the fiduciary
responsibility provisions of Title I of ERISA. In addition, certain transactions involving the Trust and/or
the Capital Securities could be deemed to constitute direct or indirect prohibited transactions under
ERISA and Section 4975 of the Code with respect to a Plan. For example, if the Company is a Partyin Interest with respect to an investing Plan (either directly or by reason of its ownership of the Banksor other subsidiaries), extensions of credit between the Company and the Trust (as represented by the
Junior Subordinated Debentures and the Guarantee) would likely be prohibited by Section 406(a)(1)(B)of ERISA and Section 4975(c)(1)(B) of the Code.
The DOL has issued five prohibited transaction class exemptions ("PTCEs") that may provide
exemptive relief for direct or indirect prohibited transactions resulting from the purchase or holding of
the Capital Securities, assuming that assets of the Trust were deemed to be "plan assets" of Plans
investing in the Trust (see above). Those class exemptions are PTCE 96-23 (for certain transactions
determined by in-house asset managers), PTCE 91-38 (for certain transactions involving bankcollective investment funds), PTCE 95-60 (for certain transactions involving PTCE 90-1 (for certaintransactions involving insurance company pooled separate accounts) and PTCE 84-14 (for certaintransactions determined by independent qualified professional asset managers).
Because of ERISA's prohibitions and those of Section 4975 of the Code, the Capital Securities
may not be purchased or held by any Plan, any entity whose underlying assets include "plan assets"
by reason of any Plan's investment in the entity (a "Plan Asset Entity") or any person having "planassets" of any Plan, unless such purchase or holding is covered by the exemptive relief provided by
PTCE 95-23, 95-60, 91-38, 90-1 or 84-14 or another applicable exemption. If a purchaser or holder of
the Capital Securities that is a Plan or a Plan Asset Entity elects to rely on an exemption other than
PTCE 96-23, 95-60, 91-38, 90-1 or 84-14, the Company and the Trust may require a satisfactory
opinion of counsel or other evidence with respect to the availability of such exemption for such
purchase and holding. Any purchaser or holder of the Capital Securities or any interest therein will bedeemed to have represented by its purchase and holding thereof that either (a) the purchaser andholder is not a Plan or a Plan Asset Entity and is not purchasing such securities on behalf of or with"plan assets" of any Plan or (b) the purchase and holding of the Capital Securities is covered by the
exemptive relief provided by PTCE 96-23, 95-60, 91-38, 90-1, or 84-14 or another applicable
exemption. See "Notice to Investors" herein.
Any Plans or other entities whose assets include Plan assets subject to ERISA or Section 4975 of
the Code proposing to acquire Capital Securities should consult with their own counsel.
Governmental Plans, as defined in Section 3(32) of ERISA, are not subject to ERISA, and are also
not subject to the prohibited transaction provisions of Section 4975 of the Code. However, state laws
or regulations governing the investment and management of the assets of such plans may containfiduciary and prohibited transaction provisions similar to those under ERISA and the Code discussed
above. Accordingly, fiduciaries of government plans, in consultation with their advisers, should
consider the impact of their respective state laws on investments in the Capital Securities, and theconsiderations discussed above, to the extent applicable.

59

SUPERVISION, REGULATION AND OTHER MATTERS
The following information is not intended to be an exhaustive description of the statutes andregulations applicable to the Company or the Holding Corporation. The discussion is qualified in its
entirety by reference to all particular statutory or regulatory provisions. Additional information regarding
supervision and regulation is included in the documents incorporated herein by reference. See"Incorporation of Certain Information by Reference."
The business of the Company is influenced by prevailing economic conditions and governmental
policies, both foreign and domestic. The actions and policy directives of the Federal Reserve determine
to a significant degree the cost and the availability of funds obtained from money market sources forlending and investing. The Federal Reserve's policies and regulations also influence, directly andindirectly, the rates of interest paid by commercial banks on their time and savings deposits. The
nature and impact on the Company of future changes in economic conditions and monetary and fiscal
policies, both foreign and domestic, are not predictable.
The Company is subject to supervision and examination by federal bank regulatory authorities.
The Company's primary bank regulatory authority is the OCC.
The federal banking regulatory authorities have each adopted risk-based capital guidelines towhich the Company is subject. These guidelines are based on an international agreement developedby the Basle Committee on Banking Regulations and Supervisory Practices, which consists ofrepresentatives of central banks and supervisory authorities in 12 countries including the UnitedStates. The guidelines establish a systematic analytical framework that makes regulatory capitalrequirements more sensitive to differences in risk profiles among banking organizations, takes offbalance sheet exposures into explicit account in assessing capital adequacy and minimizes
disincentives to holding liquid, low-risk assets. Risk-based assets are determined by allocating assets
and specified off-balance sheet commitments and exposures into four weighing categories, with higher
levels of capital being required for the categories perceived as representing greater risk.
All banks are required to maintain a minimum total risk-based ratio of 8%, of which half (4%) mustbe "Tier 1" capital. In addition, the federal bank regulators have established leverage ratio (Tier 1
capital to total adjusted average assets) guidelines providing for a minimum leverage ratio of 3% forbanks meeting certain specified criteria, including excellent asset quality, high liquidity, low interest rate
exposure and the highest regulatory rating or which are not experiencing or anticipating significant
growth. Institutions not meeting these criteria are expected to maintain a ratio which exceeds the 3%
minimum by at least 100 to 200 basis points. The federal bank regulatory authorities may, however,set higher capital requirements when a bank's particular circumstances warrant. As of September 30,
1996, the Company's total risk-based capital ratio was 10.6%, of which 8.04% constituted Tier 1
capital. The Company's leverage ratio at such date was 6.97%. These ratios have been restated toinclude New Jersey National which was merged into the Company on December 6, 1996.
Effective January 17, 1995, the federal bank regulatory agencies, including the FDIC, the Federal
Reserve Board and the OCC, amended their respective agency risk-based capital standards to include
concentration of credit risk and the risks of non-traditional activities. The Federal Reserve Board, the
OCC and the FDIC also issued a joint policy statement, effective June 26, 1996, that provides
guidance on sound practices for interest rate risk management. The policy describes critical factors
affecting the agencies' evaluation of a bank's interest rate risk when making a determination of capital
adequacy.
The federal banking agencies possess broad powers to take corrective action as deemed
appropriate for an insured depository institution and its holding companies. The extent of these powers
depends upon whether the institution in question is considered "well capitalized," "adequately
60

capitalized," "undercapitalized," "significantly undercapitalized" or "critically undercapitalized."
Generally, as an institution is deemed to be less well capitalized, the scope and severity of theagencies' powers increase. The agencies' corrective powers can include, among other things, requiring
an insured financial institution to adopt a capital restoration plan which cannot be approved unlessguaranteed by the institution's parent holding company; placing limits on asset growth and restrictions
on activities; placing restrictions on transactions with affiliates; restricting the interest rates theinstitution may pay on deposits; prohibiting the institution from accepting deposits from correspondentbanks; prohibiting the payment of principal or interest on subordinated debt; prohibiting the holding
company from making capital distributions without prior regulatory approval; and, ultimately, appointing
a receiver for the institution. Business activities may also be influenced by an institution's capitalclassification. For instance, only a "well capitalized" depository institution may accept brokered
deposits without prior regulatory approval and only an "adequately capitalized" depository institution
may accept brokered deposits with prior regulatory approval. At September 30, 1996, the Company
exceeded the required minimum ratios for classification as "well capitalized."Powers of the FDIC in Connection with the Insolvency of an Insured Depository Institution
A depository institution insured by the FDIC can be held liable for any loss incurred by, or
reasonably expected to be incurred by, the FDIC in connection with (i) the default of a commonlycontrolled FDIC-insured depository institution or (ii) any assistance provided by the FDIC to acommonly-controlled FDIC-insured depository institution in danger of default. "Default" is generally
defined as the appointment of a receiver or conservator and "in danger of default" is defined generally
as the existence of certain conditions indicating that a "default" is likely to occur in the absence ofregulatory assistance. Such liability by a depository institution to the FDIC would be subordinated inright of payment to deposit liabilities, secured obligations, any other general or senior liability and any
obligation subordinated to obligations to depositors or other general creditors (such as the Junior
Subordinated Debentures), other than obligations owed to any affiliate of the depository institution (withcertain exceptions) and obligations to shareholders of such depository institution in their capacity assuch.
If the FDIC is appointed conservator or receiver for an insured depository institution, the FDIC may
disaffirm or repudiate any contract or lease to which such institution is a party, the performance of
which is determined by the FDIC to be burdensome and the disaffirmance or repudiation of which isdetermined by the FDIC to promote the orderly administration of the institution's affairs. If the FDIC
were to repudiate the Junior Subordinated Debentures, the effect of such repudiation would be toaccelerate the maturity of such securities. To the Company's knowledge, the FDIC has not taken theposition that such repudiation would impair the right of a holder of such securities to make a claim forprincipal and interest accrued through the date of the appointment of the conservator or receiver. The
amount paid upon this claim would depend upon, among other factors, the amount of receivershipassets available for the payment of unsecured claims and the priority of this claim relative to the priorityof other unsecured creditors. If the maturity of the Junior Subordinated Debentures were so
accelerated and a claim relating to the Junior Subordinated Debentures were paid by theconservatorship or receivership, depending upon economic conditions, the holders of such Junior
Subordinated Debentures might not be able to reinvest any amounts paid on such securities at acomparable rate of interest. In addition, although the terms of the Junior Subordinated Debentures
permit the holders to accelerate the maturity of such securities in the event of the appointment of areceiver or conservator for the Company, the FDIC as receiver or conservator may enforce most typesof contracts, including the Junior Subordinated Debentures, pursuant to their terms, notwithstanding
any such acceleration provision. The FDIC as conservator or receiver may also transfer to a new
obligor any of the Company's assets and liabilities, including the Junior Subordinated Debentures,without the approval or consent of the Company's creditors, including holders of the Junior
Subordinated Debentures.
61

Pursuant to federal law, the FDIC may not take any action that would have the effect of increasing
the losses to a deposit insurance fund by protecting depositors for more than the insured portion of
their deposits, or creditors other than depositors (such as holders of the Junior SubordinatedDebentures). The FDIC is also authorized to settle all uninsured and unsecured claims in theinsolvency of an insured depository institution by making a final settlement payment after thedeclaration of insolvency. The rate of such final settlement is to be a percentage rate determined by
the FDIC reflecting an average of the FDIC's receivership recovery experience. Such a payment would
constitute full payment and disposition of the FDIC's obligations to claimants, regardless of the assetsof the insolvent institution actually available for distribution to creditors.
Federal law also provides that in the event of the liquidation or other resolution of an insured
depository institution, administrative expenses of the receiver and the claims of depositors of suchinstitution (including claims by the FDIC as subrogee of insured depositors) are entitled to priority inpayment over the claims of other general creditors of the institution.
The Bank Holding Company Act of 1956, as amended, currently permits adequately capitalized
and adequately managed bank holding companies from any state to acquire banks and bank holding
companies located in any other state, subject to certain conditions. States may affirmatively opt-in
earlier, which Delaware, New Jersey and Pennsylvania (among other states) have done. Competition

62

PLAN OF DISTRIBUTION
The Company and the Trust have entered into an agreement (the "Purchase Agreement") with
the initial purchasers named below (the "Initial Purchasers") pursuant to which, on the terms andsubject to the conditions thereof, the Trust and the Company have agreed that the Trust will sell to theInitial Purchasers, and the Initial Purchasers have agreed to purchase, $300,000,000 liquidation
amount of Capital Securities.

Initial Purchasers

Liquidation
Amount of
CapitalSecurities$210,000,000
45,000,000
45,000,000

Salomon Brothers Inc
Lehman Brothers Inc
Bear, Steams & Co. Inc
Total$300,000,000

The Purchase Agreement provides that the obligations of the Initial Purchasers to pay for andaccept delivery of the Capital Securities are subject to the approval of certain legal matters by theircounsel and to certain other conditions. The Initial Purchasers are obligated to take and pay for$300,000,000 aggregate liquidation amount of the Capital Securities offered hereby if any are taken.
In the Purchase Agreement, the Company and the Trust have agreed to indemnify the Initial
Purchasers against certain liabilities, including liabilities under the Securities Act, or to contribute to
payments that the Initial Purchasers may be required to make in respect thereof.
The Initial Purchasers have agreed that they will offer or sell the Capital Securities at 99.0345%
of the liquidation amount, outside the United States only in offshore transactions complying with Rule903 or Rule 904 of Regulation S under the Securities Act, and inside the United States, only (i) topersons whom they reasonably believe to be qualified institutional buyers in reliance on Rule 144A
under the Securities Act and (ii) to a limited number of institutional accredited investors within themeaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act.
In view of the fact that the proceeds from the sale of the Capital Securities will be used topurchase the Junior Subordinated Debentures issued by the Company, the Purchase Agreement
provides that the Company will pay as compensation for the Initial Purchasers' arranging theinvestment therein of such proceeds an amount of $8.75 per Capital Security for the accounts of theInitial Purchasers.
The Initial Purchasers have acknowledged and agreed that, except as permitted by the Purchase
Agreement, they will not offer, sell or deliver the Capital Securities within the United States or to, or forthe account or benefit of, U.S. Persons (i) as part of the distribution at any time or (ii) otherwise until
40 days after the later of the commencement of the offering and the Closing Date, that they will sendto each dealer to which they sell Capital Securities in reliance on Regulation S during the restrictedperiod a confirmation or other notice setting forth the restrictions on offers and sales of the Capital
Securities within the U.S. or to, or for the account or benefit of, U.S. Persons. Terms used in thisparagraph have the meaning given to them by Regulation S under the Securities Act.
The Offered Securities have not been registered under the Securities Act or Part 16 of theregulations of the OCC and may not be offered or sold within the United States except in certaintransactions exempt from, or not subject to, the registration requirements of the Securities Act and Part
16 of the regulations of the OCC. See "Notice to Investors."

63

The Company and the Trust have been advised by the Initial Purchasers that they intend to makea market in the Capital Securities as permitted by applicable laws and regulations. The Initial
Purchasers are not obligated, however, to make a market in the Capital Securities and any suchmarket making may be discontinued at any time at the sole discretion of the Initial Purchasers.
Accordingly, no assurance can be given as to the liquidity of, or trading markets for, the Capital
Securities.
The Initial Purchasers and their affiliates from time to time perform investment banking and otherfinancial advisory services for the Company and its affiliates for which they receive customarycompensation.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the Trust Securities and the formation of
the Trust will be passed upon on behalf of the Trust by Richards, Layton & Finger P.A., special
Delaware counsel to the Company and the Trust. The validity under New York law of the Junior
Subordinated Debentures and the Guarantee will be passed upon for the Company and the Trust by
Simpson Thacher & Bartlett, (a partnership which includes professional corporations), New York, New
York. Certain United States federal income tax matters will be passed upon for the Company and theTrust by Simpson Thacher & Bartlett. Certain legal matters will be passed upon for the Initial
Purchasers by Cleary, Gottlieb, Steen & Hamilton, New York, New York.

INDEPENDENT AUDITORS
The consolidated financial statements of the Holding Corporation and its affiliates incorporated byreference in this Offering Memorandum, have been audited by Ernst & Young LLP, independent
auditors, as stated in their report. The Company's Call Reports incorporated by reference in thisOffering Memorandum are unaudited.

64

APPENDIX A
FORM OF INSTITUTIONAL ACCREDITED INVESTOR LETTERCoreStates Capital III
CoreStates Bank, N.A.
[Address]
Dear Sirs:
In connection with our proposed purchase from you of Floating Rate Subordinated Capital Income
Securities (the "Restricted Securities") of CoreStates Capital III, a Delaware statutory business trust(the "Trust"), which Trust's common securities are owned by CoreStates Bank, N.A. (the "Company"),
we represent, warrant and agree on our own behalf and on behalf of any investor account (ashereinafter defined) for which we are purchasing the Restricted Securities as follows:
1. We are an institutional "accredited investor" within the meaning of Rule 501(a)(1), (2), (3)or (7) under the Securities Act (an "Institutional Accredited Investor") that is purchasing Restricted
Securities with a principal amount of at least $100,000, and if the Restricted Securities are to bepurchased for one or more accounts ("investor accounts") for which we are acting as fiduciary or
agent, each such account is an Institutional Accredited Investor that is purchasing Restricted
Securities with a principal amount of at least $100,000. In the normal course of our business, weinvest in or purchase securities similar to the Restricted Securities and we have such knowledge
and experience in financial business matters as to be capable of evaluating the merits and risksof purchasing the Restricted Securities. We are aware that we (or any investor account) may berequired to bear the economic risk of an investment in the Restricted Securities for an indefinite
period of time and we are (or such account is) able to bear such risk for an indefinite period.
2. We acknowledge that none of the Company, the Trust or the Initial Purchasers (as definedin the Offering Memorandum), or any person representing the Company, the Trust or the Initial
Purchasers, has made any representation to us with respect to the Company, the Trust or theoffering of the Restricted Securities, other than the Offering Memorandum dated January 29, 1997
(the "Offering Memorandum"), a copy of which has been delivered to us and upon which we arerelying in making our investment decision with respect to the Restricted Securities. Accordingly,
we acknowledge that no representation or warranty is made by the Initial Purchasers as to theaccuracy or completeness of such materials. We have had access to such financial and otherinformation concerning the Company and the Restricted Securities as we deemed necessary inconnection with our decision to purchase the Restricted Securities, including an opportunity to ask
questions and request information from the Company and the Initial Purchasers. We acknowledge
that we have read and agreed to the matters stated under the caption "Notice to Investors" in such
Offering Memorandum and the restrictions on duplication and circulation of such Offering
Memorandum.
3. We understand that any subsequent transfer of the Restricted Securities is subject tocertain restrictions and conditions set forth in the Offering Memorandum under the caption "Noticeto Investors" and we agree to be bound by, and not to resell, pledge or otherwise transfer the
Restricted Securities except in compliance with such restrictions and conditions and the Securities
Act of 1933, as amended (the "Securities Act") and Part 16 of the regulations of the Office of theComptroller of the Currency (the "OCC").
4. We understand and hereby acknowledge that the Restricted Securities have not beenregistered under the Securities Act or Part 16 of the regulations of the OCC, and may not be sold
except as permitted in the following sentence. We agree to offer, sell or otherwise transfer such
Restricted Securities prior to the date which is three years after the later of the date of original
A-1

issue and the last date on which the Company or any affiliate of the Company was the owner ofsuch Restricted Securities (or any predecessor thereto) (the "Resale Restriction Termination
Date") only (a) to the Company, (b) pursuant to a registration statement which has been declaredeffective under the Securities Act and Part 16 of the regulations of the OCC, (c) for so long as the
Restricted Securities are eligible for resale pursuant to Rule 144A under the Securities Act, to aperson we reasonable believe is qualified institutional buyer under Rule 144A ("QIB") thatpurchases for its own account or for the account of a QIB to whom notice is given that the transfer
is being made in reliance on Rule 144A, (d) outside the United States in a transaction meeting
the requirements of Rule 904 of Regulation S under the Securities Act, (e) to an Institutional"accredited investor," with the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under
the Securities Act that is acquiring the securities for its own account or for the account of such an
institutional "accredited investor," for investment purposes and not with a view to, or for offer orsale in connection with, and distribution in violation of the Securities Act or Part 16 of theregulations of the OCC or (f) pursuant to any other available exemption from the registration
requirements of the Securities Act and Part 16 of the regulations of the OCC, and, in each case,in accordance with the applicable securities laws of any state of the United States or any otherapplicable jurisdiction and subject to any requirement of law that the disposition of our property or
the property of such investor account or accounts be at all times within our or their control. The
foregoing restriction on resale will not apply subsequent to the Resale Restriction Termination
Date. We acknowledge that the Company and the Property Trustee reserve the right prior to any
offer, sale or other transfer prior to the Resale Restriction Termination Date of the Restricted
Securities pursuant to clause (d), (e) or (f) above to require the delivery of an opinion of counsel,
certifications or other information acceptable to the Company and the Property Trustee in form andsubstance. We acknowledge that the Restricted Securities purchased by us will be in the form ofdefinitive physical certificates and will bear a legend reflecting the substance of this paragraph 4.
5. Prior to any proposed transfer of the Restricted Securities (other than pursuant to aneffective registration statement) occurring before the Resale Restriction Termination Date, wemust check the appropriate box set forth on the reverse of the certificate(s) evidencing such
Restricted Securities relating to the manner of such transfer and submit such certificate(s) to theProperty Trustee. We understand that the Property Trustee will not be required to accept any
Restricted Securities for registration of transfer, except upon presentation of evidence satisfactory
to the Company and to the Property Trustee that the foregoing restrictions on transfer have been
complied with.
6. We are acquiring the Restricted Securities for our own account or for one or moreaccounts (each of which is an "institutional accredited investor") as to each of which we exercise
sole investment discretion.
7. We are not acquiring the Restricted Securities with a view to, or for offer or sale inconnection with, any distribution in violation of the Securities Act or Part 16 of the regulations of
the OCC.
8. We shall provide to any person purchasing any Restricted Securities from us a noticeadvising such purchaser that transfers of the Restricted Securities are restricted as set forth
herein.
9. We understand and acknowledge that our purchase of any Capital Security constitutes a
representation by us that we either (a) are not a Plan or a Plan Asset Entity and are notpurchasing such Capital Securities on behalf of or with "plan assets" of any Plan or (b) are eligible
for the exemptive relief available under PTCE 96-23, 95-60, 91 -38, 90-1, or 84-14 with respect tosuch purchase. Capitalized terms used in this representation have the meanings therefor set out
under the caption "Benefit Plan Considerations" in the Offering Memorandum.
A-2

We acknowledge that you and others will rely upon our confirmations, acknowledgments andagreements set forth herein, and we agree to notify you promptly in writing if any of our representations
or warranties herein ceases to be accurate and complete. You are irrevocably authorized to produce
this letter or a copy hereof to any interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF CONFLICTS OF LAW TO THE EXTENT THAT APPLICATION OF ANOTHER JURISDICTIONWOULD BE REQUIRED THEREBY.

Very truly yours,(Name of Purchaser)
By:
Name:
Title:
Address:A-3

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PRINCIPAL EXECUTIVE OFFICE OF CORESTATES BANK, N.A.
CoreStates Bank, N.A.
Centre Square, West Tower
1500 Market Street
Philadelphia, PA 19101

PROPERTY TRUSTEEThe Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001

PAYING AGENTS AND TRANSFER AGENTS
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001

Chase Manhattan Bank Luxembourg, S.A.
5, Rue Plaetia
L-2338, Luxembourg

LEGAL ADVISORS
To the Company and the Trust as to U.S. law
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017

To the initial Purchasers as to U.S. law
Cleary, Gottlieb, Steen & Hamilton
One Liberty PlazaNew York, New York 10006

To the Company and the Trust as to Delaware law
Richards, Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899

INDEPENDENT AUDITORS FOR CORESTATES FINANCIAL CORP
Ernst & Young LLP
2001 Market Street
Two Commerce Square
Philadelphia, Pennsylvania 19103

LISTING AGENT
Kredietbank S.A.
Luxembourgeoise 43
Boulevard Royal
L-2955 Luxembourg

$300,000,000

No person has been authorized to give any
information or to make any representations
other than those contained in this Offering
Memorandum, and, if given or made, such information or representation must not be relied upon as having been authorized. This
Offering Memorandum does not constitutean offer to sell or the solicitation of an offer
to buy any securities other than the securities described in this Offering Memorandum
or an offer to sell or the solicitation of an offer to buy such securities in any circumstances in which such offer or solicitation is
unlawful. Neither the delivery of this Offering
Memorandum nor any sale made hereundershall, under any circumstances, create any
implication that the information contained
herein is correct as of any time subsequent
to the date of such information.

CoreStates Capital III
Floating Rate Capital Trust
Pass-through Securities SM(TRUPS SM)(Liquidation Amount $1,000 per Capital
Security)
Fully and Unconditionally Guaranteed, as
describedherein, by

CoreStates Bank, N.A.
TABLE OF CONTENTS
Page

Available Information
Incorporation of Certain Information by
Reference
Offering Memorandum Summary
Risk Factors
Use of Proceeds
Ratio of Earnings to Fixed Charges
Accounting Treatment
Capitalization
Selected Unaudited Financial Data of theCompany
The Trust
Description of Capital Securities
Description of Junior SubordinatedDebentures
Description of Guarantee
Relationship Among the Capital
Securities, the Junior SubordinatedDebentures and the Guarantee
Certain United States Federal Income
Tax Consequences
Book-Entry Issuance
Notice to Investors
Benefit Plan Considerations
Supervision, Regulation and Other
Matters
Plan of Distribution
Legal Matters
Independent Auditors
Appendix A—Form of Institutional
Accredited Investor Letter

6
7
8
12
17
17
17
18

CoreStates

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20
21
33
42
44
46
51
55
58
60
63
64
64
A-1

Salomon Brothers
Lehman Brothers
Bear Stearns & Co. Inc.

Offering Memorandum
Dated January 27,1997