AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 3, 1999
REGISTRATION NO. 333-83797
REGISTRATION NO. 333-75937
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
ADMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BANK UNITED CORP.
BANK UNITED CAPITAL TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 13-3528556
DELAWARE TO BE APPLIED FOR
(STATE OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
------------------------
3200 SOUTHWEST FREEWAY
SUITE 2600
HOUSTON, TX 77027
(713) 543-6500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
JONATHON K. HEFFRON, ESQ.
EXECUTIVE VICE PRESIDENT, CHIEF OPERATING OFFICER AND GENERAL COUNSEL
3200 SOUTHWEST FREEWAY
SUITE 2600
HOUSTON, TX 77027
(713) 543-6500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S AGENT FOR SERVICE)
------------------------
COPIES TO:
CRAIG M. WASSERMAN, ESQ. LEE MEYERSON, ESQ.
WACHTELL, LIPTON, ROSEN & KATZ SIMPSON THACHER & BARTLETT
51 WEST 52ND STREET 425 LEXINGTON AVENUE
NEW YORK, NY 10019 NEW YORK, NEW YORK 10017
(212) 403-1000 (212) 455-2000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this registration statement as determined by
market conditions.
------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, THE FORM
OF PROSPECTUS INCLUDED IN THIS REGISTRATION STATEMENT IS A COMBINED PROSPECTUS
WHICH ALSO RELATES TO AN AGGREGATE REMAINING AMOUNT OF $680,000,000 OF PREFERRED
STOCK, CLASS A COMMON STOCK, DEPOSITARY SHARES AND JUNIOR SUBORDINATED DEBT
SECURITIES OF BANK UNITED CORP. AND OF TRUST PREFERRED SECURITIES OF BANK UNITED
CAPITAL TRUST AND THE RELATED GUARANTEE BY BANK UNITED CORP. PREVIOUSLY
REGISTERED UNDER REGISTRATION STATEMENT ON FORM S-3 (NO. 333-75937). THIS
REGISTRATION STATEMENT IS A NEW REGISTRATION STATEMENT, CONSTITUTES
POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO. 333-75937, AND SUCH
POST-EFFECTIVE AMENDMENT SHALL HEREAFTER BECOME EFFECTIVE CONCURRENTLY WITH THE
EFFECTIVENESS OF THIS REGISTRATION STATEMENT AND IN ACCORDANCE WITH SECTION 8(C)
OF THE SECURITIES ACT OF 1933, AS AMENDED.
------------------------
WE HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE
NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL WE SHALL FILE A FURTHER AMENDMENT
THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER
BECOME EFFECTIVE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 8(A) OF THE
SECURITIES ACT, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
THE INFORMATION IN THIS PRELIMINARY PROSPECTUS SUPPLEMENT IS NOT COMPLETE AND
MAY BE CHANGED. THIS PRELIMINARY PROSPECTUS SUPPLEMENT IS NOT AN OFFER TO SELL
THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED AUGUST 3, 1999
PRELIMINARY PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED __________, 1999)
2,000,000 PREMIUM INCOME EQUITY SECURITIESSM ("PIES(SM)")
CONSISTING OF 2,000,000 CORPORATE PIES
[BANK UNITED CORP. LOGO]
Each PIES being offered will be a Corporate PIES, which is a unit consisting of
a stock purchase contract issued by Bank United Corp. and a share of preferred
stock also issued by Bank United Corp. In this prospectus supplement, we refer
to Bank United Corp. as "Bank United."
o The stock purchase contract will obligate the holder to purchase from Bank
United, no later than , 2002 for a price of $50, the following
number of shares of Bank United common stock:
o if the average closing price of the common stock over a 20-trading day
period before , 2002 equals or exceeds $ ,
shares of common stock;
o if the average closing price during that same period is less than
$ but greater than $ , a number of shares of common
stock equal to $50 divided by the average closing price; and
o if the average closing price during that period is less than or equal
to $ , shares of common stock.
o The share of preferred stock will have a liquidation preference of $50. The
holder will pledge the share of preferred stock to secure the holder's
obligation to purchase the common stock under the related stock purchase
contract.
o Payments will accumulate under the stock purchase contracts and the
preferred stock at the combined rate of % per year, payable on
, , and of each year, beginning on
, 1999.
We have applied to have the Corporate PIES listed on the NYSE. Trading of the
Corporate PIES on the New York Stock Exchange is expected to commence within a
5-day period after the initial delivery of the Corporate PIES.
INVESTING IN THE CORPORATE PIES INVOLVES RISKS.
FOR A DESCRIPTION OF THESE RISKS, SEE "RISK FACTORS" BEGINNING ON PAGE S-17.
PER CORPORATE PIES TOTAL
------------------ --------------
Public Offering Price................ $ 50 $ 100,000,000
Underwriting Discount................ $ $
Proceeds to Bank United.............. $ $
Any accumulated dividend payments on the preferred stock and any contract
adjustment payments on the stock purchase contracts that are a part of the
Corporate PIES from , 1999 should be added to the Public Offering
Price.
Bank United has granted the underwriter a 30-day option to purchase up to
300,000 additional Corporate PIES on the same terms and conditions described
above solely to cover over-allotments, if any.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
Lehman Brothers Inc. expects to deliver the Corporate PIES to purchasers on or
about , 1999.
LEHMAN BROTHERS
, 1999
"Premium Income Equity Securities" and "PIES" are service marks owned by
Lehman Brothers Inc.
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement and the accompanying prospectus contain
information about Bank United and about the PIES. They also refer to information
contained in other documents filed by Bank United with the Securities and
Exchange Commission. References to this prospectus supplement or the prospectus
also mean the information contained in those other documents. If this prospectus
supplement is inconsistent with the prospectus, rely on this prospectus
supplement.
You should rely on the information in this prospectus supplement or the
accompanying prospectus or in documents that are incorporated by reference into
the prospectus. Neither Bank United nor the underwriter has authorized anyone to
provide any different or additional information. We are not making an offer of
the PIES in any jurisdiction where the offer is not permitted. You should not
assume that information in these documents is correct or complete after the date
of this prospectus supplement.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
-----
Prospectus Supplement Summary........ S-3
Risk Factors......................... S-17
Use of Proceeds...................... S-20
Price Range of Common Stock and
Dividend Policy.................... S-20
Capitalization....................... S-21
Accounting Treatment................. S-22
Description of the PIES.............. S-23
Description of the Purchase
Contracts.......................... S-26
Certain Provisions of the Purchase
Contracts, the Purchase Contract
Agreement and the Pledge
Agreement.......................... S-34
Description of the Preferred Stock... S-37
Book-Entry Procedures and
Settlement......................... S-42
United States Federal Income Tax
Consequences....................... S-44
ERISA Considerations................. S-50
Underwriting......................... S-51
Legal Matters........................ S-53
Experts.............................. S-54
PROSPECTUS
PAGE
-----
Risk Factors......................... 1
Use of Proceeds...................... 4
Ratios of Earnings to Fixed Charges
and Earnings to Combined Fixed
Charges and Preferred Dividends.... 4
Bank United Corp. ................... 5
Bank United Capital Trust............ 6
Description of Offered Securities.... 8
Relationship Among the Trust
Preferred Securities, the Trust
Preferred Securities Guarantee and
the Junior Subordinated Notes Held
by Bank United Capital Trust....... 33
Selling Stockholders................. 34
Plan of Distribution................. 35
Legal Matters........................ 36
Experts.............................. 36
Forward-Looking Information.......... 36
About this Prospectus................ 37
Where You Can Find More
Information........................ 38
PROSPECTUS SUPPLEMENT SUMMARY
The following summary is qualified by the more detailed information and the
consolidated financial statements of Bank United appearing elsewhere in this
prospectus supplement or the accompanying prospectus or incorporated by
reference in the accompanying prospectus.
BANK UNITED CORP.
We are a broad-based financial services provider to consumers and
businesses in Texas and selected regional markets throughout the United States.
At June 30, 1999, we operated a 144-branch community banking network serving
nearly 284,000 households, as well as 18 commercial banking offices in 15 states
across the country. As of June 30, 1999, we were the largest publicly traded
financial institution headquartered in Texas, with $15.4 billion in assets, $7.2
billion in deposits and $732.8 million in stockholders' equity. Our address is
3200 Southwest Freeway, Suite 2600, Houston, Texas 77027, and our telephone
number is (713) 543-6500.
Our bank subsidiary's capital levels at June 30, 1999 and September 30,
1998 qualified it as "well-capitalized," the highest of five categories under
applicable regulatory definitions. Our bank subsidiary's capital ratios at June
30, 1999 and September 30, 1998 and the applicable regulatory capital
requirements were as follows:
JUNE 30, SEPTEMBER 30, CAPITAL ADEQUACY WELL-CAPITALIZED
1999 1998 REQUIREMENT REQUIREMENT
-------- ------------- ---------------- ----------------
Tangible capital..................... 6.60% 6.75% 1.50% --
Core/Leverage capital................ 6.62% 6.77% 3.00% 5.00%
Tier 1 capital....................... 9.29% 9.97% -- 6.00%
Total risk-based capital............. 11.24% 10.48% 8.00% 10.00%
RECENT DEVELOPMENTS
The following are selected financial data for the periods indicated. The
selected consolidated financial data as of June 30, 1999 and for the nine months
ended June 30, 1999 and 1998, respectively, are taken from our unaudited
consolidated financial statements, which in our opinion contain all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the results for these periods. These results of operations for
the nine months ended June 30, 1999 are not necessarily indicative of the
results of operations that may be obtained for the entire fiscal year. The
selected consolidated financial data as of September 30, 1998 are taken from
financial statements audited by Deloitte & Touche LLP, independent auditors,
which are incorporated into this prospectus supplement by reference.
AT AT
JUNE 30, SEPTEMBER 30,
1999 1998
-------------- -------------
(DOLLARS IN THOUSANDS)
STATEMENT OF FINANCIAL CONDITION
DATA:
Total assets....................... $ 15,426,756 $ 13,664,992
Mortgage-backed securities......... 1,069,315 932,058
Loans.............................. 12,386,846 10,803,744
Deposits........................... 7,213,264 6,798,237
Borrowings......................... 7,022,728 5,963,751
Minority interest, Bank Preferred
Stock.............................. 185,500 185,500
Total stockholders' equity......... 732,822 684,412
S-3
FOR THE NINE MONTHS
ENDED JUNE 30,
-------------------------------
1999 1998
-------------- -------------
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE DATA)
STATEMENT OF OPERATIONS DATA:
Net interest income................ $ 247,745 $ 214,589
Provision for credit losses........ 17,977 16,777
Non-interest income................ 88,563 54,110
Non-interest expense............... 172,338 138,783
Income before income taxes and
minority interest............... 145,993 113,139
Net income......................... 77,309 90,645
Net income applicable to common
shares............................. 77,309 90,645
Basic earnings per common share.... 2.45 2.87
Diluted earnings per common
share.............................. 2.40 2.80
AT OR FOR THE NINE MONTHS
ENDED JUNE 30,
-------------------------------
1999 1998
-------------- -------------
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE DATA)
OTHER DATA:
Mortgage servicing
portfolio -- period end............ $ 30,609,155 $ 29,349,450
Common shares outstanding
Period end...................... 31,703,646 31,595,596
Average -- basic................ 31,606,979 31,595,596
Average -- diluted.............. 32,239,062 32,360,747
Book value -- period end........... 23.11 21.19
Tangible book value -- period
end............................. 20.41 19.25
FOR THE NINE MONTHS
ENDED JUNE 30,
--------------------
1999 1998
--------- ---------
(DOLLARS IN
THOUSANDS,
EXCEPT PER SHARE
DATA)
CERTAIN RATIOS:
Return on average assets........... 0.83% 1.11%
Return on average common equity.... 14.48 19.18
Stockholders' equity to assets..... 4.75 5.11
Net yield on interest-earning
assets............................ 2.45 2.44
Efficiency ratio................... 49.93 50.23
Allowance for credit losses to net
nonaccrual loans.................. 84.67 67.55
Allowance for credit losses total
loans............................. 0.51 0.46
Net loan charge-offs to average
loans............................. 0.05 0.15
Nonperforming assets to total
assets............................ 0.65 0.65
REGULATORY CAPITAL RATIOS OF THE BANK:
Tangible capital................... 6.60 7.03
Core capital....................... 6.62 7.06
Total risk-based capital........... 11.24 10.93
S-4
Net income was $77.3 million or $2.40 per diluted share for the nine months
ended June 30, 1999, compared to $90.6 million or $2.80 per diluted share for
the nine months ended June 30, 1998. Two positive income tax adjustments
totalling $33.5 million recorded during the nine months ended June 30, 1998 were
the principal reasons for the decrease. Net interest income increased 15% or
$33.2 million due to higher levels of interest-earning assets, particularly in
the commercial lending businesses. Non-interest income increased $34.5 million
of 64%, due to an increase in the servicing portfolio and the average service
fee rates as well as increased mortgage banking gains resulting from single
family loan sales in the normal course of business. Non-interest expenses
increased $33.5 million or 24%, due primarily to higher levels of loan activity
and community bank branch expansion.
Net income was $24.8 million or $0.77 per diluted share for the quarter
ended June 30, 1999, compared to $23.9 million or $0.74 per diluted share for
the quarter ended June 30, 1998. Higher levels of interest-earning assets and an
increase in the net yield to 2.57% produced a 17% or $13.0 million increase in
net interest income. Partially offsetting this increase was a $12.3 million
increase in non-interest expense, primarily due to higher levels of loan
activity and community bank branch expansion.
Total assets increased $1.8 billion to $15.4 billion at June 30, 1999 from
$13.6 billion at September 30, 1998. This increase occurred primarily due to
growth in the commercial loan portfolio. FHLB advances and higher deposit levels
were the principal source of funds used to finance this growth.
THE OFFERING
CORPORATE PIES
Bank United is offering 2,000,000 Corporate PIES to the public for $50
each. Each Corporate PIES is a unit consisting of two parts:
o a purchase contract for shares of Bank United common stock; and
o a share of Bank United preferred stock.
PURCHASE CONTRACT
Bank United has entered into a purchase contract agreement with First
National Bank of Chicago, which will act as purchase contract agent for all the
holders of the Corporate PIES and the holders of the Treasury PIES described
below. Each Corporate PIES that you purchase will be issued under the purchase
contract agreement, which creates a contractual arrangement between you and Bank
United for the purchase of Bank United common stock.
Under the purchase contract, you will be obligated to purchase, for each of
your Corporate PIES, common stock at a purchase price of $50. You will not be
obligated to pay the purchase price, and you will not receive your common stock,
until , 2002, which has been set as the purchase contract
settlement date. The number of shares of common stock that you will be entitled
to receive on that date will depend on the average closing price of the common
stock over a 20-trading day period preceding that date. Until you actually
purchase the shares of common stock, your obligation to pay the $50 purchase
price will be secured by the share of Bank United preferred stock that is a part
of your Corporate PIES. That share of preferred stock will be pledged as
collateral. More information about the purchase contracts is provided under the
heading "Description of the Purchase Contracts" starting on page S-26.
PREFERRED STOCK
Each Corporate PIES you purchase will include a share of preferred stock of
Bank United. The liquidation preference of each share of preferred stock of Bank
United is $50.
S-5
On or after , 2002, the shares of preferred stock will be
redeemable at the option of Bank United, in whole or in part, at any time and
from time to time, at 100% of their liquidation preference. In addition, on
, 2004, all outstanding shares of preferred stock will be
redeemed by Bank United at 100% of their liquidation preference.
Each share of preferred stock will have the right to vote together with the
Bank United common stock on all matters submitted generally to stockholders of
Bank United for a vote. In addition, the preferred stock will be entitled to
vote separately as a class with respect to specified matters affecting the
interests of preferred stockholders. Preferred stockholders will also be
entitled to elect two additional directors to the Bank United board of
directors, if Bank United fails to pay dividends on the preferred stock for six
quarters.
PAYMENTS TO CORPORATE PIES HOLDERS
As a holder of Corporate PIES, you will be entitled to receive cash
payments consisting of (1) payments under the purchase contract and (2) dividend
payments on the share of preferred stock at a combined rate of % per year.
o PAYMENTS UNDER THE PURCHASE CONTRACT. Bank United will pay you
quarterly contract adjustment payments of $ , which is equal
to % per annum of the $50 stated amount, on your purchase contract.
Bank United will pay the contract adjustment payments on ,
, and of each year. The first payment will
be made on , 1999, and the last payment will be made on
, 2002, unless your purchase contract is settled or
terminates before that date.
o DIVIDEND PAYMENTS ON THE PREFERRED STOCK. In addition, Bank United
will pay you quarterly cash dividend payments on your share of
preferred stock on the same dates that contract adjustment payments
are made. You will receive a dividend payment of $ each
quarter. This amount is equal to % per annum of the $50 liquidation
preference. Dividend payments will accumulate from , 1999
and will continue until , 2002. If you continue to own
your share of preferred stock after that date, then Bank United will
pay you dividends on your share, which will accumulate from ,
2002 until , 2004, at a reset rate that is described in
more detail starting on page S-38.
LIMITED VOTING RIGHTS
As a holder of Corporate PIES, you will have limited voting rights. Each
share of preferred stock you hold will carry .10 of a vote in connection with
matters submitted generally to the holders of the common stock of Bank United,
voting together as a single class with shares of the common stock and other
capital stock of Bank United entitled to vote in respect of matters submitted to
stockholders generally. In addition, as a holder of Bank United preferred stock
you will be entitled to vote in connection with specified amendments to the
certificate of incorporation of Bank United and as otherwise required by law.
You will not have any voting or other rights with respect to the common stock
until you pay the $50 purchase price and purchase the common stock.
PLEDGE ARRANGEMENT
When you purchase a Corporate PIES, you will pledge your share of Bank
United preferred stock that is a part of that Corporate PIES as collateral to
secure your obligation to purchase common stock on , 2002 under the
related purchase contract. Bank United has entered into a pledge agreement under
which The Bank of New York will act as collateral agent and hold your share of
preferred stock until the $50 purchase price has been paid for the common stock.
Even though your share of preferred stock will be pledged as collateral, you
will be the beneficial owner of that share of preferred stock.
S-6
TREASURY PIES
Once you own Corporate PIES, you may create Treasury PIES by substituting
U.S. treasury securities for the preferred stock that is a part of the Corporate
PIES. A Treasury PIES will be a unit consisting of:
o a purchase contract for Bank United common stock that is identical to
the purchase contract that is a part of the Corporate PIES; and
o a 1/20 undivided beneficial ownership interest in a zero-coupon U.S.
treasury security that has a principal amount at maturity of $1,000
and matures on or earlier than the business day preceding the purchase
contract settlement date. We will refer to these treasury securities
as the "Treasury Securities."
TERMS OF SUBSTITUTION
You may substitute Treasury Securities for Bank United preferred stock at
any time on or before , 2002. This date is the seventh business day
preceding the purchase contract settlement date. Because the Treasury Security
has a principal amount at maturity of $1,000 and the Bank United preferred stock
has a liquidation preference of $50 per share, you must substitute Treasury PIES
for Corporate PIES in multiples of 20. In order to make a substitution, you
must:
o For each group of 20 Corporate PIES you wish to substitute, transfer a
Treasury Security to The Bank of New York, which is acting as the
securities intermediary under the pledge arrangement. The securities
intermediary then will deposit the Treasury Security in the collateral
account maintained under the pledge arrangement. The Treasury Security
will become the collateral supporting your obligation to purchase the
common stock, and the collateral agent will then release shares of
preferred stock with an aggregate liquidation preference of $1,000
from the pledge. Those shares of preferred stock will then be freely
tradable and will not be a part of any PIES.
o Submit your Corporate PIES in multiples of 20. For each group of 20
Corporate PIES you submit, you will receive 20 Treasury PIES.
o Pay to the collateral agent any fees or expenses incurred in
connection with the substitution.
PAYMENTS TO TREASURY PIES HOLDERS
If you substitute Treasury PIES for Corporate PIES, you will continue to
receive purchase contract adjustment payments under your purchase contract, but
you will not receive any other distributions on the Treasury PIES. Instead, you
will receive accrued original issue discount on the Treasury Securities that you
deposited with the securities intermediary. As long as you continue to own the
shares of preferred stock that had been a part of your Corporate PIES, you will
receive dividend payments on them, separately from the Treasury PIES.
RECREATING CORPORATE PIES
Once you have created Treasury PIES, you may subsequently recreate
Corporate PIES at any time on or prior to , 2002. Because
the Treasury Security has a principal amount at maturity of $1,000 and the Bank
United preferred stock has a liquidation preference of $50 per share, you must
recreate Corporate PIES from Treasury PIES in multiples of 20. In order to
recreate Corporate PIES, you must:
o For each group of 20 Corporate PIES to be recreated, transfer shares
of preferred stock with an aggregate liquidation preference of $1,000
to the securities intermediary. The securities intermediary then will
deposit those shares in the collateral account maintained under the
pledge arrangement. The shares of preferred stock with an aggregate
liquidation preference of
S-7
$1,000 will become the collateral supporting your obligation to
purchase the common stock, and then the collateral agent will release
the Treasury Security from the pledge. That Treasury Security will be
freely tradable and will not be a part of any PIES.
o Submit your Treasury PIES in multiples of 20. For each group of 20
Treasury PIES you submit, you will receive 20 Corporate PIES.
o Pay to the collateral agent any fees or expenses incurred in
connection with the substitution.
SETTLEMENT OF PURCHASE CONTRACTS; REMARKETING
CORPORATE PIES
For each purchase contract that is a part of your Corporate PIES, you will
be obligated to pay, on , 2002, $50 to purchase Bank United
common stock. You may choose to deliver a cash payment of $50, or, if you do
not, your share of Bank United preferred stock held as collateral under the
pledge arrangement will be sold to the public for $50. We call this the
"remarketing." The proceeds from the remarketed share of preferred stock will
be used to pay the amount due under your purchase contract. Bank United will be
responsible for all costs and expenses incurred in connection with the
remarketing.
REMARKETING OF PREFERRED STOCK
On , 2002, which is the third business day preceding the
purchase contract settlement date, Lehman Brothers will remarket:
o the preferred stock that is a part of Corporate PIES, if the holders
of those Corporate PIES either (1) elect to have their preferred stock
remarketed or (2) fail to deliver cash payments for the common stock
when those payments are due under the purchase contract; and
o preferred stock that is not a part of Corporate PIES, including as a
result of the creation of Treasury PIES, to the extent the holders of
the preferred stock elect to have the preferred stock remarketed.
After the preferred stock has been remarketed, the dividend payments on all
outstanding shares of preferred stock, including those shares that were not
remarketed, will be those determined by the remarketing. If Lehman Brothers
cannot remarket the preferred stock, the dividend payments will be equal to a
60-day "AA" composite commercial paper rate plus a spread ranging from 300 to
700 basis points depending on the credit ratings of the preferred stock at that
time.
REMARKETING PROCEDURES
Your preferred stock will be remarketed:
(1) if you do not notify the purchase contract agent that you will
pay cash for the common stock by 5:00 p.m., New York City time, on
, 2002, which is the seventh business day preceding the
purchase contract settlement date; or
(2) if you notify the purchase contract agent that you will pay cash
but you do not deliver the cash by 11:00 a.m., New York City time, on or
before , 2002, which is the fifth business day preceding
the purchase contract settlement date.
o On , 2002, Lehman Brothers will use commercially
reasonable efforts to sell your preferred stock, together with all
other preferred stock being remarketed, at a price of $50.25 per
share.
o If the remarketing is successful, then:
S-8
o Your shares of preferred stock will be sold, and the dividend payments
on the preferred stock will be reset to be the lowest rate that Lehman
Brothers determined was necessary to allow it to remarket the
preferred stock at a price of $50.25 per share.
o $50 per share of preferred stock received from the sale will be
delivered to Bank United as payment for the common stock.
o $0.25 per share of preferred stock received from the sale will be paid
to the remarketing agent.
o You will receive the shares of Bank United common stock.
FAILED REMARKETING
If Lehman Brothers cannot remarket the preferred stock, then Bank United
will be entitled to exercise its rights as a secured party and take possession
of your shares of preferred stock. Your obligation to purchase the common stock
will then be fully satisfied, and you will receive the shares of common stock.
CASH PAYMENT IN LIEU OF REMARKETING
If you choose not to participate in the remarketing and instead pay cash
for your shares of common stock, then:
o Bank United will receive $50 in cash from you for each of your
purchase contracts.
o You will receive the shares of common stock.
o Your shares of preferred stock will be released from the pledge
arrangement and distributed to you. Starting on the date of settlement
and continuing until , 2004, dividend payments on
the preferred stock will be payable at the new rate determined by
Lehman Brothers in the remarketing.
SETTLEMENT OF TREASURY PIES
Unless you notify the purchase contract agent that you will pay for the
common stock with cash, upon settlement of the Treasury PIES, Bank United will
receive the proceeds of the Treasury Securities being held as collateral under
the pledge arrangement. This will satisfy your obligation to deliver the
purchase price for the common stock, and you will receive the shares of common
stock.
NUMBER OF SHARES OF COMMON STOCK PURCHASED
Unless you elect to settle your purchase contracts early (see "Description
of the Purchase Contracts -- Early settlement" starting on page S-29), the
number of shares of common stock you will receive under each purchase contract
will depend on the average of the closing price per share, or the last reported
sale price, if no closing price is reported, of the common stock as reported on
the Nasdaq National Market for a period of 20 trading days ending on
, 2002. This date is the third trading day preceding the
purchase contract settlement date. If, for any trading day, the trading of the
common stock is suspended, or if the common stock does not trade at least once
on the Nasdaq National Market on that day, then that day will not be considered
to be part of the 20-trading day period.
The number of shares of common stock you will receive for each Corporate
PIES will be determined by one of the following settlement rates:
o If the average closing price during the relevant 20-trading day period
equals or exceeds $ , you will receive shares of common
stock.
S-9
o If the average closing price during that period is less than $ but
greater than $ , you will receive a number of shares of common
stock equal to $50 divided by the average closing price, rounded
upward or downward to the nearest 1/10,000th of a share.
o If the average closing price during that period is less than or equal
to $ , you will receive shares of common stock.
In some circumstances, the applicable settlement rate will be subject to
adjustment. You can find more information about the settlement rate starting on
page S-31.
Bank United will not issue any fractional shares of common stock. If,
however, you are settling more than one purchase contract, then any fractional
shares of common stock will be aggregated. For any fractional share not
issuable, Bank United will pay you the value of that fractional share in cash.
EARLY SETTLEMENT
You may satisfy your obligation to purchase common stock under your
purchase contract before the purchase contract settlement date on
, 2002. If you choose early settlement, you will pay $50 in
cash on or before:
(1) , 2002, if you are settling Corporate PIES;
this date is the seventh business day preceding the purchase contract
settlement date, or
(2) , 2002, if you are settling Treasury PIES; this
date is the second business day preceding the purchase contract settlement
date.
To effect early settlement:
o You must deliver to the purchase contract agent a notice indicating
your election to "settle early;" and
o You must deliver a cash payment of $50 for each purchase contract you
wish to settle.
You will receive, for each Corporate PIES or Treasury PIES you surrender,
both:
o shares of common stock, regardless of the market price of the
common stock on the date of early settlement and subject to adjustment
in certain circumstances; and
o Your share of preferred stock if you are settling a Corporate PIES or
a 1/20 undivided beneficial interest in a Treasury Security if you are
settling Treasury PIES.
You will not receive any further contract adjustment payments from Bank
United.
You may settle Treasury PIES early only in multiples of 20.
TERMINATION OF PURCHASE CONTRACTS
The purchase contracts will terminate immediately and automatically if
certain bankruptcy, insolvency or reorganization events occur with respect to
Bank United. If the purchase contracts terminate upon one of these events, then
your rights and obligations under your purchase contracts also will terminate,
including your right to receive accrued contract adjustment payments and your
obligation to pay for, and your right to receive, shares of common stock. Upon
termination, you will receive your share of Bank United preferred stock or your
Treasury Security. If Bank United becomes the subject of a bankruptcy case, then
there may be a delay between the time the purchase contracts terminate and the
time you receive your pledged share of preferred stock, in the case of Corporate
PIES, or Treasury Security, in the case of Treasury PIES. You may find more
information about how the purchase contracts terminate on page S-32.
S-10
CONCURRENT OFFERING
We are also offering, in a concurrent offering, 2,000,000 shares of a
different series of our preferred stock with a liquidation preference of $50 per
share. Dividends on the preferred stock of that series will be payable
quarterly, at a fixed annual rate. The preferred stock of that series will be
subject to mandatory redemption in full on the fifth anniversary of its issue
date at a redemption price equal to 100% of its liquidation preference plus
dividends accrued to the redemption date.
LISTING ON NYSE
The common stock of Bank United is traded on the Nasdaq National Market
under the ticker symbol "BNKU." We have applied to list the Corporate PIES on
the NYSE. If either the Treasury PIES or the preferred stock are traded at a
volume that satisfies applicable listing requirements, then Bank United will try
to list those securities on the national securities exchanges or associations on
which the Corporate PIES are then listed or quoted.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
Because a Corporate PIES will consist of a share of Bank United preferred
stock and a purchase contract, the purchase price of each Corporate PIES will be
allocated between the purchase contract and the related share of preferred stock
in proportion to their relative fair market values at the time of purchase.
We intend to report the contract adjustment payments as income to you, but
you may want to consult your tax advisor concerning alternative
characterizations.
If you own Corporate PIES, you will include in gross income the dividend
received on the preferred stock.
If you own Treasury PIES, you will be required to include in gross income
your allocable share of any original issue discount or acquisition discount on
the Treasury Securities that accrues in each year.
Because there is no statutory, judicial or administrative authority
directly addressing the tax treatment of the PIES or instruments similar to the
PIES, we urge you to consult your own tax advisor concerning the tax
consequences of an investment in the PIES. For additional information, see
"United States Federal Income Tax Consequences" starting on page S-44.
USE OF PROCEEDS
The estimated net proceeds from the sale of the Corporate PIES, after
deducting underwriting discounts and estimated fees and expenses, are expected
to be approximately $ , or $ if the underwriter's over-allotment option
is exercised in full. See "Use of Proceeds" on page S-20. Bank United will use
these net proceeds for general corporate purposes which may include enhancing
the equity capital of its bank subsidiary.
SELECTED FINANCIAL DATA OF BANK UNITED
The following selected financial data for each of the years ended September
30, 1994 through 1998 are derived from the audited consolidated financial
statements of Bank United. The following selected financial data for the six
months ended March 31, 1999 and March 31, 1998 are derived from the unaudited
consolidated financial statements of Bank United and include, in the opinion of
the management of Bank United, all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the data of those periods.
The information that appears below is only a summary and should be read in
conjunction with the consolidated financial statements, the notes to
S-11
those financial statements and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" incorporated by reference into
this prospectus supplement.
In reading the following selected financial information for Bank United,
please note the following:
o During fiscal 1997, Bank United sold some of its mortgage origination
offices. In connection with this sale, the remaining offices were
restructured or closed. The mortgage origination branches shown at
March 31, 1999 and 1998 and September 30, 1998 and 1997 are wholesale
mortgage origination offices, which are currently part of the
Financial Markets Group. See "Sale of mortgage offices" and
"Restructuring charges" items in the Summary of Operations.
o In connection with its acquisition, Bank United issued to the Federal
Deposit Insurance Corporation, as manager of the Federal Savings and
Loan Insurance Corporation Resolution Trust Fund, a warrant to acquire
158,823 shares of common stock of Bank United. Payments in lieu of
dividends related to the warrant, which was redeemed in August 1996.
See "Payments in lieu of dividends" item in the Summary of
Operations.
o The extraordinary loss appearing under "Extraordinary loss -- early
extinguishment of debt" in the Summary of Operations represents costs
and charges associated with the repurchase and retirement of a
majority of the senior notes of Bank United.
o Effective October 1, 1997, Bank United adopted Statement of Financial
Accounting Standard ("SFAS") No. 128, "Earnings per share," which
establishes standards for computing and presenting earnings per share
("EPS"). It requires dual presentation of basic and diluted EPS for
entities with complex capital structures. All prior period EPS data
were restated to comply with SFAS No. 128, but are not materially
different. See "Earnings per common share" item in the Summary of
Operations.
o "Return on average assets" under Certain Ratios and Other Data is
net income without deduction of minority interest, divided by average
total assets.
o "Net operating expense ratio" under Certain Ratios and Other Data is
total non-interest expense, less total non-interest income, as a
percentage of average assets for each period.
o "Efficiency ratio" under Certain Ratios and Other Data is
non-interest expense excluding goodwill amortization, divided by net
interest income plus non-interest income, excluding the gain on the
sale of mortgage offices.
o Adjusting items under Certain Ratios and Other Data -- Excluding
Adjusting Item are composed of the following for fiscal 1999, 1998,
1997, 1996 and 1994:
o 1999, decreased EPS $0.08: court of claims litigation expense
totaling $4.1 million, $2.6 million net of tax;
o 1998, increased EPS $0.76:
(1) two positive income tax adjustments totaling $33.5 million,
(2) an increase in the commercial loan allowance of $7.8 million,
$4.9 million net of tax and
(3) provisions for the impact of higher prepayments on the single
family loan and servicing portfolios totaling $6.7 million, $4.2
million net of tax;
o 1997, increased EPS $0.02:
(1) the gain on the sale of mortgage offices of $4.7 million, $2.9
million net of tax and
S-12
(2) an extraordinary loss on extinguishment of debt of $3.6 million,
$2.3 million net of tax.
o 1996, increased EPS $2.05:
(1) a one-time SAIF assessment charge of $33.7 million, $20.7
million net of tax,
(2) compensation expense of $7.8 million, $4.8 million net of tax,
(3) charges totaling $12.5 million, $7.7 million net of tax, related
to the restructuring of and items associated with the mortgage
origination business,
(4) a contractual payment to previous minority interests of $5.9
million, and
(5) an income tax benefit of $101.7 million.
o 1994, increased EPS $1.90: an income tax benefit of $58.2 million.
S-13
AT MARCH 31, AT SEPTEMBER 30,
------------- ----------------------------------------------------------
1999 1998 1997 1996 1995 1994
------------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS)
SUMMARY OF FINANCIAL CONDITION
ASSETS:
Cash and cash equivalents............ $ 237,251 $ 228,674 $ 121,000 $ 119,523 $ 112,931 $ 76,938
Securities purchased under
agreements to resell and federal
funds sold....................... 411,529 474,483 349,209 674,249 471,052 358,710
Securities and other investments... 124,373 91,350 77,809 65,693 117,094 115,126
Mortgage-backed securities, net.... 1,168,958 932,058 1,569,705 1,657,908 2,398,263 2,828,903
Loans, net
Single family-held for
investment..................... 4,978,688 4,686,600 5,795,179 6,113,318 7,000,303 4,144,787
Single family-held for sale...... 1,571,433 2,149,009 697,410 256,656 406,563 253,310
Commercial....................... 4,480,710 3,472,579 2,201,880 981,001 735,876 546,794
Consumer......................... 576,777 495,556 300,760 168,513 117,498 101,283
Mortgage servicing rights.......... 431,746 410,868 272,214 123,392 75,097 56,677
Other assets....................... 893,301 723,815 581,906 552,124 548,857 427,633
------------- ---------- ---------- ---------- ---------- ----------
Total assets..................... $14,874,766 $13,664,992 $11,967,072 $10,712,377 $11,983,534 $8,910,161
============= ========== ========== ========== ========== ==========
LIABILITIES, MINORITY INTEREST AND
STOCKHOLDERS' EQUITY
Deposits........................... $ 6,605,548 $6,320,476 $5,247,668 $5,147,945 $5,182,220 $4,764,204
Federal Home Loan Bank advances.... 5,744,594 4,783,294 3,992,344 3,490,386 4,383,895 2,620,329
Securities sold under agreements to
repurchase and federal fund
purchased........................ 576,007 811,742 1,308,600 832,286 1,172,533 553,000
Notes payable...................... 368,715 219,720 220,199 115,000 115,000 115,000
Other liabilities.................. 671,426 659,848 414,282 410,217 448,283 320,766
------------- ---------- ---------- ---------- ---------- ----------
Total liabilities................ 13,966,290 12,795,080 11,183,093 9,995,834 11,301,931 8,373,299
------------- ---------- ---------- ---------- ---------- ----------
Minority interest-Bank preferred
stock............................ 185,500 185,500 185,500 185,500 185,500 85,500
Stockholders' equity............... 722,976 684,412 598,479 531,043 496,103 451,362
------------- ---------- ---------- ---------- ---------- ----------
Total liabilities, minority
interest and stockholders'
equity......................... $14,874,766 $13,664,992 $11,967,072 $10,712,377 $11,983,534 $8,910,161
============= ========== ========== ========== ========== ==========
AT OR FOR THE
SIX MONTHS
ENDED MARCH 31, AT OR FOR THE YEAR ENDED SEPTEMBER 30,
---------------------- ---------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ---------- ---------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
SUMMARY OF OPERATIONS
Interest income...................... $ 478,775 $ 442,581 $ 898,746 $ 810,708 $ 812,312 $ 746,759 $ 494,706
Interest expense..................... 319,172 303,179 612,665 546,064 584,778 552,760 320,924
---------- ---------- ---------- ---------- ---------- ---------- ---------
Net interest income................ 159,603 139,402 286,081 264,644 227,534 193,999 173,782
Provisions for credit losses......... 12,384 14,963 20,123 18,107 16,469 24,293 6,997
---------- ---------- ---------- ---------- ---------- ---------- ---------
Net interest income after
provision for credit losses.... 147,219 124,439 265,958 246,537 211,065 169,706 166,785
Non-interest income
Net gains (losses)
Sales of single family servicing
rights and single family
loans.......................... 13,175 2,541 11,124 21,182 43,074 60,495 63,286
Securities and mortgage-backed
securities..................... 785 1,801 2,761 2,841 4,002 26 10,404
Other loans...................... 1,027 376 651 1,128 3,189 (1,210) 163
Sale of mortgage offices......... -- -- -- 4,748 -- -- --
(TABLE CONTINUED ON NEXT PAGE)
S-14
AT OR FOR THE
SIX MONTHS
ENDED MARCH 31, AT OR FOR THE YEAR ENDED SEPTEMBER 30,
---------------------- ---------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ---------- ---------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Loan servicing, net of related
amortization..................... 27,598 13,459 35,975 32,381 30,383 32,677 26,813
Other.............................. 18,711 13,280 30,426 21,152 15,541 12,162 13,295
---------- ---------- ---------- ---------- ---------- ---------- ---------
Total non-interest income.......... 61,296 31,457 80,937 83,432 96,189 104,150 113,961
---------- ---------- ---------- ---------- ---------- ---------- ---------
Non-interest expense
Compensation and benefits.......... 47,125 39,625 86,725 75,016 87,640 83,520 86,504
SAIF deposit insurance premiums.... 2,010 1,927 4,160 4,797 45,690 11,428 11,329
Court of Claims litigation......... 4,077 900 1,800 -- -- -- --
Restructuring charges.............. -- -- -- -- 10,681 -- --
Other.............................. 56,326 45,795 95,857 92,323 95,407 88,797 96,832
---------- ---------- ---------- ---------- ---------- ---------- ---------
Total non-interest expense......... 109,538 88,247 188,542 172,136 239,418 183,745 194,665
---------- ---------- ---------- ---------- ---------- ---------- ---------
Income before income taxes,
minority interest, and
extraordinary loss............... 98,977 67,649 158,353 157,833 67,836 90,111 86,081
Income tax expense (benefit)......... 37,365 (8,209) 25,722 60,686 (75,765) 37,415 (31,899)
---------- ---------- ---------- ---------- ---------- ---------- ---------
Income before minority interest and
extraordinary loss............... 61,612 75,858 132,631 97,147 143,601 52,696 117,980
Minority interest
Bank preferred stock dividends..... 9,126 9,126 18,253 18,253 18,253 10,600 8,653
Payments in lieu of dividends...... -- -- -- -- 6,413 377 357
---------- ---------- ---------- ---------- ---------- ---------- ---------
Income before extraordinary loss... 52,486 66,732 114,378 78,894 118,935 41,719 108,970
Extraordinary loss -- early
extinguishment of debt............. -- -- -- 2,323 -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ---------
Net income......................... $ 52,486 $ 66,732 $ 114,378 $ 76,571 $ 118,935 $ 41,719 $ 108,970
========== ========== ========== ========== ========== ========== =========
Net income applicable to diluted
earnings per common share........ $ 52,486 $ 66,732 $ 114,378 $ 76,571 $ 113,327 $ 38,824 $ 102,519
========== ========== ========== ========== ========== ========== =========
Earnings per common share
Basic.............................. $ 1.66 $ 2.11 $ 3.62 $ 2.42 $ 4.06 $ 1.45 $ 3.78
Diluted............................ 1.63 2.06 3.54 2.40 3.87 1.35 3.55
CERTAIN RATIOS AND OTHER DATA
Book value per common share.......... $ 22.91 $ 20.67 $ 21.67 $ 18.94 $ 16.81 $ 17.19 $ 15.64
Dividends per common share........... 0.32 0.32 0.64 0.56 3.16 -- --
Average common shares outstanding.... 31,565 31,596 31,595 31,596 29,260 28,863 28,863
Average common shares and potential
dilutive common shares............. 32,172 32,316 32,337 31,881 29,287 28,863 28,863
Regulatory capital ratios of Bank
United
Tangible capital................... 6.73% 7.02% 6.75% 7.72% 6.57% 6.20% 6.01%
Core capital....................... 6.75% 7.06% 6.77% 7.77% 6.64% 6.29% 6.17%
Total risk-based capital........... 11.92% 11.59% 10.48% 13.18% 13.09% 13.45% 14.02%
Return on average assets............. 0.86% 1.23% l.04% 0.85% 1.28% 0.50% 1.42%
Return on average common equity...... 14.91% 21.68% 17.78% 13.50% 23.06% 8.80% 26.32%
Stockholders' equity to assets....... 4.86% 4.98% 5.01% 5.00% 4.96% 4.14% 5.07%
Tangible stockholders' equity to
tangible assets.................... 4.30% 4.52% 4.59% 4.89% 4.81% 3.93% 4.68%
(TABLE CONTINUED ON NEXT PAGE)
S-15
AT OR FOR THE
SIX MONTHS
ENDED MARCH 31, AT OR FOR THE YEAR ENDED SEPTEMBER 30,
---------------------- ---------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ---------- ---------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Net yield on interest-earning
assets............................. 2.41% 2.42% 2.42% 2.52% 2.10% 1.92% 2.20%
Interest rate spread................. 2.23% 2.20% 2.21% 2.26% 1.78% 1.61% 1.95%
Average interest-earning assets to
average interest-bearing
liabilities........................ 1.03 1.04 1.04 1.05 1.06 1.06 1.06
Single family servicing portfolio.... $27,303,981 $23,887,887 $27,935,300 $24,518,396 $13,246,848 $12,532,472 $8,920,760
Fundings:
Single family...................... 2,399,057 1,959,019 3,789,389 2,188,273 3,602,009 3,226,324 5,424,550
Commercial......................... 2,040,570 1,219,141 2,876,328 1,492,931 891,306 547,117 364,604
Consumer........................... 142,620 180,030 367,097 152,665 125,596 99,249 94,153
---------- ---------- ---------- ---------- ---------- ---------- ---------
Total fundings....................... 4,582,247 3,358,190 7,032,814 3,833,869 4,618,911 3,872,690 5,883,307
---------- ---------- ---------- ---------- ---------- ---------- ---------
Loans purchased for held to maturity
portfolio.......................... 1,021,884 183,509 1,158,270 1,086,249 148,510 2,658,093 1,406,275
Non-interest expense to average total
assets............................. 1.53% 1.43% 1.48% 1.55% 2.13% 1.76% 2.35%
Net operating expense ratio.......... 0.67 0.92 0.84 0.80 1.28 0.76 0.97
Efficiency ratio..................... 48.36 50.39 49.88 49.20 72.23 58.26 63.36
Nonperforming assets to total
assets............................. 0.62 0.63 0.59 0.63 1.12 0.84 1.09
Net nonaccrual loans to total
loans.............................. 0.54 0.62 0.57 0.60 1.19 0.91 1.51
Allowance for credit losses to net
nonaccrual loans................... 93.34 71.44 75.91 72.61 44.24 48.74 30.73
Allowance for credit losses to
nonperforming assets............... 64.06 54.76 57.84 52.24 32.95 36.65 24.18
Allowance for credit losses to total
loans.............................. 0.50 0.44 0.44 0.43 0.52 0.44 0.46
Net loan charge-offs to average
loans.............................. 0.06 0.20 0.13 0.23 0.17 0.16 0.30
Full-time equivalent employees....... 2,234 1,689 1,927 1,541 2,310 2,663 2.894
Number of community banking
branches........................... 94 80 84 71 70 65 62
Number of commercial banking
origination offices................ 19 15 19 11 9 9 5
Number of mortgage origination
offices............................ 9 6 8 6 85 122 145
CERTAIN RATIOS AND OTHER DATA --
EXCLUDING ADJUSTING ITEM
Net income........................... $ 55,036 $ 42,298 $ 89,944 $ 75,970 $ 56,392 $ 41,719 $ 50,804
Net income applicable to diluted
earnings per common shares......... 55,036 42,298 89,944 75,970 53,295 38,824 47,585
Earnings per diluted share........... 1.71 1.31 2.78 2.38 1.82 1.35 1.65
Return on average assets............. 0.89% 0.83% 0.85% 0.85% 0.67% 0.50% 0.72%
Return on average common equity...... 15.61 13.82 14.28 13.41 11.47 8.80 12.27
Efficiency ratio..................... 46.52 48.48 48.98 49.20 55.80 58.26 63.36
S-16
RISK FACTORS
AN INVESTMENT IN PIES INVOLVES A NUMBER OF RISKS. BEFORE DECIDING TO BUY
ANY PIES, YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING INFORMATION, TOGETHER WITH
THE OTHER INFORMATION IN THIS PROSPECTUS SUPPLEMENT, THE ACCOMPANYING PROSPECTUS
AND THE DOCUMENTS THAT ARE INCORPORATED BY REFERENCE IN THE ACCOMPANYING
PROSPECTUS ABOUT RISKS CONCERNING AN INVESTMENT IN PIES.
THE CORPORATE PIES CONSIST OF SHARES OF PREFERRED STOCK OF BANK UNITED AND
PURCHASE CONTRACTS TO ACQUIRE BANK UNITED COMMON STOCK. WHEN CONSIDERING AN
INVESTMENT IN CORPORATE PIES, YOU ARE MAKING AN INVESTMENT DECISION WITH REGARD
TO THE COMMON STOCK AND THE PREFERRED STOCK AS WELL AS THE CORPORATE PIES. YOU
SHOULD CAREFULLY REVIEW THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS ABOUT ALL THESE SECURITIES.
RISK FACTORS RELATING TO THE PIES
THE NUMBER OF SHARES OF COMMON STOCK YOU WILL RECEIVE UNDER A PURCHASE
CONTRACT WILL DEPEND ON FUTURE COMMON STOCK PRICE; YOU WILL BEAR THE RISK OF
DECLINE IN EQUITY VALUE
The terms of the PIES differ from those of ordinary convertible securities.
The number of shares of common stock that you will receive upon the settlement
of a purchase contract is not fixed, but instead will depend on the market value
of the common stock near the time of settlement. The aggregate market value of
the common stock you may receive upon settlement of the purchase contract may be
more or less than the stated amount of $50 per PIES. If the market value of the
common stock near the time of settlement is less than $ , the aggregate
market value of the common stock issuable upon settlement generally will be less
than $50, and the investment in the PIES will result in a loss. Therefore, you
will bear the full risk of a decline in the market value of the common stock
prior to settlement of the purchase contracts.
OPPORTUNITY FOR EQUITY APPRECIATION IS LESS THAN COMMON STOCK OWNERSHIP
The market value of the common stock you may receive upon settlement of a
purchase contract generally will exceed the stated amount of $50 only if the
average closing price of the common stock over the 20-trading day period
preceding settlement equals or exceeds $ , which we call the "Threshold
Appreciation Price." The Threshold Appreciation Price represents an
appreciation of % over the current market price. Therefore, during the period
prior to settlement, an investment in the PIES affords less opportunity for
equity appreciation than a direct investment in the common stock. If the
applicable average closing price exceeds $ , which we call the "Reference
Price," but falls below the Threshold Appreciation Price, you will realize no
equity appreciation on the common stock for the period during which you own the
purchase contract. Furthermore, if the applicable average closing price equals
or exceeds the Threshold Appreciation Price, you will realize only % of the
equity appreciation for that period above the Threshold Appreciation Price. See
"Description of the Purchase Contracts -- General" starting on page S-26 for
an illustration of the number of shares of common stock that you would receive
at various average closing prices.
MARKET PRICE FOR THE COMMON STOCK IS UNCERTAIN
It is impossible to know whether the market price of the common stock will
rise or fall. Numerous factors influence the trading prices of the common stock.
These factors include changes in Bank United's financial condition, results of
operations and prospects and complex and interrelated political, economic,
financial and other factors that can affect the capital markets generally, the
stock exchanges or automated quotation systems on which the common stock is
traded and the market segments of which Bank United is a part.
The market for the common stock likely will influence, and be influenced
by, any market that develops for the PIES. For example, investors' anticipation
of the distribution into the market of substantial amounts of common stock,
including the additional common stock issuable upon settlement of the purchase
contracts, could depress the price of the common stock and increase their
volatility. If
S-17
the underwriter's over-allotment option is exercised in full, the largest number
of shares of common stock issuable upon settlement of the purchase contracts
would constitute approximately % of the common stock outstanding as of
, 1999. The price of the common stock also could be affected
by possible sales of the common stock by investors who view the PIES as a more
attractive means of equity participation in Bank United and by hedging or
arbitrage trading activity that may develop involving the PIES and the common
stock. See " -- Arbitrage opportunities may affect market prices of PIES,
preferred stock and common stock" below.
NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON SETTLEMENT OF PURCHASE
CONTRACTS WILL BE ADJUSTED ONLY FOR CERTAIN SPECIFIED TRANSACTIONS
The number of shares of common stock issuable upon settlement of each
purchase contract is subject to adjustment only for stock splits and
combinations, stock dividends and certain other specified transactions involving
Bank United. See "Description of the Purchase Contracts -- Anti-dilution
adjustments" starting on page S-31. The number of shares of common stock
issuable upon settlement of each purchase contract is not subject to adjustment
for other events, such as employee stock option grants, offerings of common
stock for cash or in connection with acquisitions or certain other transactions
involving Bank United, which may adversely affect the price of the common stock.
The terms of the PIES do not restrict the ability of Bank United to offer common
stock in the future or to engage in other transactions that could dilute the
common stock. Bank United has no obligation to consider the interests of the
holders of the PIES for any reason.
YOU WILL HAVE NO RIGHTS AS COMMON STOCKHOLDERS
Until you acquire common stock upon settlement of your purchase contract,
you will have no rights with respect to the common stock, including voting
rights, rights to respond to tender offers and rights to receive any dividends
or other distributions on the common stock. Upon settlement of your purchase
contract, you will be entitled to exercise the rights of a holder of common
stock only as to actions for which the applicable record date occurs after the
settlement date.
FIXED YIELD ON THE PIES COULD BE LESS THAN DIVIDEND YIELD ON THE COMMON
STOCK
There can be no assurance that the yield on the PIES will remain higher
than the dividend yield on the common stock. You will be entitled to receive
aggregate quarterly cash distributions at the rate of % of the $50 stated
amount of the Corporate PIES per annum, consisting of contract adjustment
payments of $ and cash dividend payments on the related shares of
preferred stock of $ . Bank United currently pays cash dividends at the
rate of $ per share per year. That rate is equivalent to % of the
$ Reference Price per year. See "Price Range of Common Stock and Dividend
Policy."
TRADING MARKETS FOR PIES AND PREFERRED STOCK ARE SUBJECT TO UNCERTAINTIES
It is impossible to predict how the Corporate PIES, the Treasury PIES and
the preferred stock will trade in the secondary market or whether the market for
any of these securities will be liquid or illiquid. The Corporate PIES and the
Treasury PIES are novel securities. There currently is no secondary market for
either of them or for the preferred stock, and there can be no assurance as to
the liquidity of any trading market that may develop, the ability of holders to
sell their securities in that market or whether any such market will continue.
We have applied to have the Corporate PIES listed on the NYSE. However,
listing on the NYSE does not guarantee the depth or liquidity of the market for
Corporate PIES. If holders of the Corporate PIES convert their Corporate PIES
into Treasury PIES by substituting Treasury Securities for the preferred stock,
the liquidity of the Corporate PIES could be adversely affected. Moreover, if
the number of Corporate PIES falls below the requirement of the NYSE for
continued listing, whether as a result of the conversion of Corporate PIES into
Treasury PIES or otherwise, the Corporate PIES could be delisted from the NYSE,
or trading in the Corporate PIES could be suspended.
S-18
ARBITRAGE OPPORTUNITIES MAY AFFECT MARKET PRICES OF PIES, PREFERRED STOCK
AND COMMON STOCK
Fluctuations in interest rates may create opportunities for arbitrage based
upon changes in the relative value of the common stock underlying the purchase
contracts and of the components of the PIES. Any arbitrage could affect, in
turn, the trading prices of the PIES, the preferred stock and the common stock.
YOUR PLEDGED SECURITIES WILL BE ENCUMBERED
Although holders of PIES will be beneficial owners of the underlying
pledged shares of preferred stock, in the case of Corporate PIES, and pledged
Treasury Securities, in the case of Treasury PIES, those pledged securities will
be pledged to secure the obligations of the holders under the purchase
contracts. Therefore, for so long as the purchase contracts remain in effect,
holders will not be allowed to withdraw their pledged securities from this
pledge agreement except in the limited circumstances described in this
prospectus supplement.
DELIVERY OF SECURITIES IS SUBJECT TO POTENTIAL DELAY IF BANK UNITED BECOMES
SUBJECT TO A BANKRUPTCY PROCEEDING
Notwithstanding the automatic termination of the purchase contracts, if
Bank United becomes the subject of a case under the Bankruptcy Code, imposition
of an automatic stay under Section 362 of the Bankruptcy Code may delay the
delivery to you of your securities being held as collateral under the pledge
arrangement.
PURCHASE CONTRACT AGENT HAS LIMITED OBLIGATIONS TO YOU
The purchase contract agent will have only limited obligations to you as a
holder of the PIES under the terms of the purchase contract agreement. The
purchase contract agreement is not an indenture under the Trust Indenture Act of
1939. Therefore, the purchase contract agent will not qualify as a trustee under
the Trust Indenture Act, and you will not benefit from the protections of that
law, such as disqualification of an indenture trustee for "conflicting
interests," provisions preventing an indenture trustee from improving its own
position at the expense of the security holders and the requirement that an
indenture trustee deliver reports at least annually with respect to the
indenture trustee and the securities. See "Certain Provisions of the Purchase
Contracts, the Purchase Contract Agreement and the Pledge
Agreement -- Information concerning the purchase contract agent" on page S-35.
BANK UNITED IS A HOLDING COMPANY AND WILL DEPEND ON DISTRIBUTIONS FROM ITS
BANK SUBSIDIARY TO ENABLE IT TO MEET ITS FINANCIAL OBLIGATIONS
Bank United, through a subsidiary, owns all the outstanding common stock of
its bank subsidiary. As a holding company without significant assets other than
its indirect ownership of all the common stock of its bank subsidiary, the
ability of Bank United to meet its cash obligations, including debt service, is
dependent upon the payment of dividends by its bank subsidiary on its common
stock. The declaration of dividends by the bank subsidiary is subject to the
discretion of the board of directors of the bank subsidiary, the terms of the
outstanding preferred stock of the bank subsidiary and applicable regulatory
requirements. While it is the present intention of the board of directors of the
bank subsidiary to declare dividends in an amount sufficient to provide Bank
United with the cash flow necessary to meet the obligations of Bank United, we
cannot assure you that circumstances which would limit or preclude the
declaration of dividends by the bank subsidiary on its common stock will not
exist in the future.
S-19
USE OF PROCEEDS
The net proceeds that will be received from the sale of the Corporate PIES,
after deducting the underwriting discounts and estimated fees and expenses, will
be approximately $ , or approximately $ if the underwriter's
over-allotment option is exercised in full. See "Underwriting" starting on
page S-51. Bank United will use the net proceeds for general corporate purposes
that may include enhancing the equity capital of its bank subsidiary.
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
The common stock is listed on the Nasdaq National Market under the symbol
"BNKU." The following table shows, for the fiscal quarters for the year ended
September 30 as indicated, the reported high and low sale prices as reported on
the Nasdaq National Market and the cash dividends declared on the common stock
for the periods indicated.
PRICE RANGE HIGH LOW DIVIDENDS
- ------------------------------------- --------- --------- ---------
1997
First Quarter................... $ 28.750 $ 23.375 $ 0.140
Second Quarter.................. 33.500 24.250 0.140
Third Quarter................... 39.000 28.125 0.140
Fourth Quarter.................. 44.500 35.375 0.140
1998
First Quarter................... 49.875 40.000 0.160
Second Quarter.................. 50.000 37.250 0.160
Third Quarter................... 56.500 44.500 0.160
Fourth Quarter.................. 49.750 30.000 0.160
1999
First Quarter................... 45.500 23.625 0.160
Second Quarter.................. 43.313 38.250 0.160
Third Quarter................... 44.000 38.250 0.185
Fourth Quarter (through August
, 1999).....................
On , 1999, the last reported sale price of the common
stock on the Nasdaq National Market was $ per share.
We have paid dividends on our common stock each quarter since our initial
public offering in August 1996. The payment of dividends is at the discretion of
our board of directors. We have subordinated debt outstanding that would
restrict our ability to pay dividends if we or any subsidiary was not in
compliance with any minimum capital maintenance requirement established by the
Federal Reserve Board or another banking regulator applicable to us or any
subsidiary.
S-20
CAPITALIZATION
The following table shows the capitalization of Bank United as of March 31,
1999 and as adjusted to reflect (1) the offering of the Corporate PIES and (2)
the concurrent offering of shares of a series of redeemable preferred stock. In
addition to the long-term debt of Bank United reflected below at March 31, 1999,
the Bank had long-term borrowings consisting of deposits, FHLB advances, and
certain other funding liabilities incurred in the ordinary course of business.
AT MARCH 31, 1999
---------------------------
HISTORICAL AS ADJUSTED
---------- -----------
(DOLLARS IN THOUSANDS)
Long-term debt(1).................... $ 368,715 $ 368,715
Redeemable preferred stock........... -- 200,000
Minority Interest -- Preferred Stock
of the bank subsidiary(2).......... 185,500 185,500
Stockholders' equity:
Preferred stock(3).............. -- --
Common stock.................... 316 316
Paid-in capital................. 129,343 126,643
Retained earnings............... 599,088 599,088
Accumulated other comprehensive
income-unrealized gains
(losses) on securities
available for sale, net of
tax............................ (4,708) (4,708)
Treasury stock, at cost......... (1,063) (1,063)
---------- -----------
Total stockholders' equity...... 722,976 720,276
---------- -----------
Total consolidated
capitalization......... $1,277,191 $ 1,474,491
========== ===========
Ratio of equity to assets............ 4.86% 4.84%
Ratio of tangible equity to tangible
assets............................. 4.30% 4.28%
Total shares of common stock
outstanding........................ 31,562,896 31,562,896
Book value per common share.......... 22.91 22.82
Tangible book value per share........ 20.15 20.06
- ------------
(1) Excludes FHLB advances with maturities greater than one year of $2,330,345
at March 31, 1999 and as adjusted.
(2) Minority interest consists of $185.5 million stated value of the preferred
stock of the bank subsidiary.
(3) We had 10,000,000 shares of preferred stock authorized, none of which were
issued as of March 31, 1999.
S-21
ACCOUNTING TREATMENT
The purchase contracts are forward transactions in Bank United common
stock. Upon settlement of a purchase contract, Bank United will receive the
stated amount of $50 on the purchase contract and will issue the required number
of shares of common stock. The stated amount received will be credited to
shareholders' equity and allocated between the common stock and paid-in capital
accounts. The present value of the contract adjustment payments will initially
be charged to equity, with an offsetting credit to liabilities.
Before the issuance of common stock upon settlement of the purchase
contracts, Bank United expects that the PIES will be reflected in Bank United's
earnings per share calculations using the treasury stock method. Under this
method, the number of shares of common stock used in calculating earnings per
share is deemed to be increased by the excess, if any, of the number of shares
issuable upon settlement of the purchase contracts over the number of shares
that could be purchased by Bank United in the market at the average market price
during the period using the proceeds receivable upon settlement. As a result,
Bank United expects there will be no dilutive effect on its earnings per share
except during periods when the average market price of the common stock is above
the Threshold Appreciation Price.
S-22
DESCRIPTION OF THE PIES
THE FOLLOWING SUMMARY DESCRIPTION OF THE PIES SUPPLEMENTS THE DESCRIPTION
OF THE STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS IN THE ACCOMPANYING
PROSPECTUS AND, TO THE EXTENT THIS DESCRIPTION IS INCONSISTENT WITH THE
PROSPECTUS, REPLACES THE DESCRIPTION IN THE PROSPECTUS. THE TERMS OF THE PIES
WILL INCLUDE THOSE STATED IN THE PURCHASE CONTRACT AGREEMENT BETWEEN BANK UNITED
AND THE PURCHASE CONTRACT AGENT. THE FOLLOWING DESCRIPTION OF THE PIES AND THE
SUMMARY DESCRIPTION OF THE PURCHASE CONTRACT AGREEMENT, THE PURCHASE CONTRACTS
AND THE PLEDGE AGREEMENT UNDER THE CAPTIONS "DESCRIPTION OF THE PURCHASE
CONTRACTS" AND "CERTAIN PROVISIONS OF THE PURCHASE CONTRACTS, THE PURCHASE
CONTRACT AGREEMENT AND THE PLEDGE AGREEMENT" IN THIS PROSPECTUS SUPPLEMENT
CONTAIN A DESCRIPTION OF ALL MATERIAL TERMS OF THE PIES, BUT DO NOT PURPORT TO
BE COMPLETE. FOR ADDITIONAL INFORMATION, YOU SHOULD REFER TO THE FORMS OF THE
PURCHASE CONTRACT AGREEMENT, INCLUDING THE FORMS OF THE PIES, AND THE PLEDGE
AGREEMENT, INCLUDING DEFINITIONS OF CERTAIN TERMS USED IN THOSE DOCUMENTS, THAT
HAVE BEEN FILED AS EXHIBITS TO THE REGISTRATION STATEMENT OF WHICH THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS ARE A PART.
CORPORATE PIES
Each offered Corporate PIES is a unit initially consisting of:
o a purchase contract under which (1) the holder will purchase from Bank
United on the purchase contract settlement date on ,
2002, or upon early settlement, for $50, a number of newly issued
shares of common stock equal to the Settlement Rate described below
under "Description of the Purchase Contracts -- General" and (2)
Bank United will pay contract adjustment payments to the holder; and
o a share of preferred stock with a liquidation preference of $50.
The share of preferred stock will be pledged under the pledge agreement to
secure the holder's obligation to purchase common stock under the purchase
contract.
The stated amount of each Corporate PIES will be allocated between the
purchase contract and the preferred stock comprising that Corporate PIES in
proportion to their respective fair market values at the time of purchase. Bank
United expects that, at the time of issuance, the fair market value of each
purchase contract will be $0 and the fair market value of each share of
preferred stock will be $50. This position generally will be binding on each
beneficial owner of a Corporate PIES, but not on the Internal Revenue Service.
See "United States Federal Income Tax Consequences -- Corporate
PIES -- Allocation of purchase price" on page S-45.
So long as the PIES are in the form of Corporate PIES, the related shares
of preferred stock will be pledged to the collateral agent to secure the
holders' obligations to purchase common stock under the related purchase
contracts.
CREATING TREASURY PIES BY SUBSTITUTING TREASURY SECURITIES
Each holder of Corporate PIES may create Treasury PIES by substituting for
the shares of preferred stock that are a part of the Corporate PIES Treasury
Securities having an aggregate principal amount at maturity equal to the
aggregate purchase price of those shares of preferred stock.
Each Treasury PIES will be a unit consisting of:
o a purchase contract under which (1) the holder will purchase from Bank
United on the purchase contract settlement date, or upon early
settlement, for $50, a number of newly issued shares of common stock
equal to the Settlement Rate and (2) Bank United will pay contract
adjustment payments to the holder; and
o a 1/20 undivided beneficial ownership interest in a related Treasury
Security having a principal amount at maturity equal to $1,000 and
maturing on or prior to the business day preceding the purchase
contract settlement date.
S-23
The term "business day" means any day other than Saturday or Sunday or a
day on which banking institutions in New York City are authorized or required by
law or executive order to remain closed.
The Treasury Security will be pledged under the pledge agreement to secure
the holder's obligation to purchase common stock under the purchase contract.
Holders of Corporate PIES may create Treasury PIES at any time on or before
the seventh business day preceding the purchase contract settlement date.
Because Treasury Securities are issued in integral multiples of $1,000 and the
Bank United preferred stock has a liquidation preference of $50 per share,
holders of Corporate PIES may create Treasury PIES only in integral multiples of
20.
To create 20 Treasury PIES, a Corporate PIES holder is required to:
o deposit with the securities intermediary a Treasury Security having a
total principal amount at maturity of $1,000; and
o transfer to the purchase contract agent 20 Corporate PIES, accompanied
by a notice stating that the Corporate PIES holder has deposited a
Treasury Security with the securities intermediary and requesting that
the purchase contract agent instruct the collateral agent to release
the related shares of preferred stock with aggregate liquidation
preference of $1,000.
Upon receiving instructions from the purchase contract agent and
confirmation of receipt of the Treasury Security by the securities intermediary,
the collateral agent will cause the securities intermediary to release the
related 20 shares of preferred stock from the pledge and deliver them to the
purchase contract agent, on behalf of the holder, free and clear of Bank
United's security interest. The purchase contract agent then will:
o cancel the 20 Corporate PIES;
o transfer the related shares of preferred stock with an aggregate
liquidation preference of $1,000 to the holder; and
o deliver 20 Treasury PIES to the holder.
The Treasury Security will be substituted for the preferred stock and will
be pledged to the collateral agent to secure the holder's obligation to purchase
common stock under the related purchase contracts. The preferred stock
thereafter will trade separately from the Treasury PIES.
Holders who create Treasury PIES or recreate Corporate PIES, as discussed
below, will be responsible for any fees or expenses payable to the collateral
agent in connection with substitutions of collateral. See "Certain Provisions
of the Purchase Contracts, the Purchase Contract Agreement and the Pledge
Agreement -- Miscellaneous" on page S-36.
RECREATING CORPORATE PIES
Each holder of Treasury PIES may recreate Corporate PIES by:
o depositing with the securities intermediary shares of preferred stock
with an aggregate liquidation preference of $1,000; and
o transferring to the purchase contract agent 20 Treasury PIES,
accompanied by a notice stating that that holder has deposited shares
of preferred stock with an aggregate liquidation preference of $1,000
with the securities intermediary and requesting that the purchase
contract agent instruct the collateral agent to release the related
Treasury Security.
Upon receiving instructions from the purchase contract agent and
confirmation of receipt of the shares of preferred stock by the securities
intermediary, the collateral agent will cause the securities intermediary to
release the related Treasury Security from the pledge and deliver it to the
purchase
S-24
contract agent, on behalf of the holder, free and clear of the security interest
of Bank United in that Treasury Security. The purchase contract agent then will:
o cancel the 20 Treasury PIES;
o transfer the related Treasury Security to the holder; and
o deliver 20 Corporate PIES to the holder.
Holders of Treasury PIES may recreate Corporate PIES at any time on or
before the seventh business day preceding the purchase contract settlement date.
CURRENT PAYMENTS
Holders of Corporate PIES will be entitled to receive aggregate cash
distributions at a rate of % of the $50 stated amount per annum from and
after , 1999, payable quarterly in arrears, subject to
increase as described under "Description of the Purchase Contracts -- Contract
adjustment payments" starting on page S-29. The quarterly payments on the
Corporate PIES will consist of (1) cumulative cash dividend payments payable on
the related shares of preferred stock at the rate of % of the liquidation
preference per annum and (2) contract adjustment payments payable by Bank United
at the rate of % of the stated amount per annum until ,
2002.
If a holder of Corporate PIES creates Treasury PIES by substituting
Treasury Securities for the preferred stock, the only payments that that holder
will receive on the Treasury PIES will be the quarterly contract adjustment
payments. Instead of payments with respect to preferred stock, original issue
discount will accrue on the related Treasury Securities.
LISTING OF THE CORPORATE PIES, THE TREASURY PIES AND THE PREFERRED STOCK
We have applied to have the Corporate PIES listed on the NYSE. If the
Treasury PIES and the preferred stock are separately traded to a sufficient
extent that applicable listing requirements are met, Bank United intends to try
to cause them to be listed or traded on the same national securities exchange or
automated quotation system as the Corporate PIES are listed or traded.
MISCELLANEOUS
Bank United or its affiliates may purchase from time to time any of the
offered PIES that are then outstanding by tender, in the open market or by
private agreement.
S-25
DESCRIPTION OF THE PURCHASE CONTRACTS
THE FOLLOWING SUMMARY DESCRIPTION OF THE PURCHASE CONTRACTS SUPPLEMENTS THE
DESCRIPTION OF THE STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS IN THE
ACCOMPANYING PROSPECTUS AND, TO THE EXTENT THIS DESCRIPTION IS INCONSISTENT WITH
THE PROSPECTUS, REPLACES THE DESCRIPTION IN THE PROSPECTUS. THE FOLLOWING
DESCRIPTION OF THE PURCHASE CONTRACTS AND THE SUMMARY DESCRIPTION OF CERTAIN
TERMS OF THE PURCHASE CONTRACTS UNDER THE CAPTION "CERTAIN PROVISIONS OF THE
PURCHASE CONTRACTS, THE PURCHASE CONTRACT AGREEMENT AND THE PLEDGE AGREEMENT"
IN THIS PROSPECTUS SUPPLEMENT CONTAIN A DESCRIPTION OF ALL MATERIAL TERMS OF THE
PURCHASE CONTRACTS, BUT DO NOT PURPORT TO BE COMPLETE. FOR ADDITIONAL
INFORMATION, YOU SHOULD REFER TO THE FORMS OF THE PURCHASE CONTRACT AGREEMENT,
INCLUDING THE FORMS OF THE PIES, AND THE PLEDGE AGREEMENT, INCLUDING DEFINITIONS
OF CERTAIN TERMS USED IN THOSE DOCUMENTS, THAT WILL BE FILED AS EXHIBITS TO THE
REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS ARE A PART.
GENERAL
In the discussion that follows:
o "Applicable Market Value" means the average of the Closing Prices of
the common stock on each of the 20 consecutive Trading Days ending on
the third Trading Day preceding the purchase contract settlement date.
o "Closing Price" of the common stock, on any date of determination,
means:
(1) the closing sale price or, if no closing sale price is reported,
the last reported sale price of the common stock on the Nasdaq
National Market on that date or, if the common stock is not listed
for trading on the Nasdaq National Market on that date, as reported
in the composite transactions for the principal United States
securities exchange on which the common stock is so listed; or
(2) if the common stock is not so reported, the last quoted bid price
for the common stock in the over-the-counter market as reported by
the National Quotation Bureau or a similar organization, or, if
that bid price is not available, the average of the mid-point of
the last bid and ask prices of the common stock on that date from
at least three nationally recognized independent investment banking
firms retained for this purpose by Bank United.
o "Trading Day" means a day on which the common stock:
(1) is not suspended from trading on any national or regional
securities exchange or association or over-the-counter market at
the close of business; and
(2) has traded at least once on the national or regional securities
exchange or association or over-the-counter market that is the
primary market for the trading of the common stock.
Each purchase contract that is a part of a PIES will obligate its holder to
purchase, and Bank United to sell, on the purchase contract settlement date, a
number of newly issued shares of common stock equal to the rate described below,
which we call the "Settlement Rate," for $50 in cash unless the purchase
contract terminates before that date or is settled early at the holder's option.
The number of shares of common stock that may be issued upon settlement of each
purchase contract on the purchase contract settlement date will be determined as
follows, subject to adjustment as described under " -- Anti-dilution
adjustments" below:
o If the Applicable Market Value is equal to or greater than the
Threshold Appreciation Price of $ , then each purchase contract
will be settled for shares of common stock. The Threshold Appreciation
Price represents an appreciation of % above the Reference Price
of $ .
o If the Applicable Market Value is less than the Threshold Appreciation
Price but greater than the Reference Price, then each purchase
contract will be settled for a number of shares of
S-26
common stock determined by dividing the stated amount of $50 by the
Applicable Market Value. Bank United would retain all appreciation in
the market value of the common stock for the relevant period.
o If the Applicable Market Value is less than or equal to the Reference
Price, then each purchase contract will be settled for shares
of common stock. As a result, the holder would realize the entire loss
on the decline in market value of the common stock for the relevant
period.
For illustrative purposes only, the following table shows the number of
shares of common stock that would be issued upon settlement of each purchase
contract at various assumed Applicable Market Values. The table assumes that
there will be no adjustments to the Settlement Rate described under
"-- Anti-dilution adjustments" below. There can be no assurance that the
actual Applicable Market Value will be within the range shown below.
Given the Reference Price of $ and the Threshold Appreciation Price
of $ , a holder of PIES would receive on the purchase contract settlement
date the following number of shares of common stock:
NUMBER OF SHARES
APPLICABLE MARKET VALUE OF COMMON STOCK
- ------------------------ ----------------
No fractional shares of common stock will be issued by Bank United upon
settlement of a purchase contract. In lieu of a fractional share, the holder
will receive an amount of cash equal to the applicable fraction multiplied by
the Applicable Market Value. If, however, a holder surrenders for settlement at
one time more than one purchase contract, then the number of shares of common
stock that may be issued pursuant to those purchase contracts will be computed
based upon the aggregate number of purchase contracts surrendered.
Before the settlement of a purchase contract, the common stock underlying
the purchase contract will not be outstanding for any purpose, and the holder of
the purchase contract will not have any voting rights, rights to dividends or
other distributions or other rights or privileges of a shareholder of Bank
United by virtue of holding that purchase contract.
By accepting a Corporate PIES or a Treasury PIES, a holder will be deemed
to have:
o irrevocably authorized the purchase contract agent as attorney-in-fact
to enter into and perform the related purchase contract on behalf of
that holder;
o agreed to be bound by, and to have consented to, the terms and
provisions of the related purchase contract;
o irrevocably authorized the purchase contract agent as attorney-in-fact
to enter into and perform the pledge agreement on behalf of that
holder; and
o agreed to be bound by the pledge arrangement contained in the pledge
agreement.
In addition, each of those holders will be deemed to have agreed to treat
itself as the owner of the related preferred stock, in the case of Corporate
PIES, or the Treasury Securities, in the case of Treasury PIES, in each case for
U.S. federal, state and local income and franchise tax purposes.
S-27
SETTLEMENT THROUGH REMARKETING
Holders of Corporate PIES who fail to notify the purchase contract agent,
on or before the seventh business day preceding the purchase contract settlement
date, of their intention to effect settlement of the related purchase contracts
with separate cash in the manner described under "-- Notice to settle with
cash," or who so notify the purchase contract agent but fail to deliver
separate cash on or before the fifth business day preceding the purchase
contract settlement date, will have their shares of preferred stock remarketed
on the third business day preceding the purchase contract settlement date. Under
the remarketing agreement between Bank United and Lehman Brothers, Lehman
Brothers will use its commercially reasonable efforts to remarket those shares
of preferred stock, together with any shares of preferred stock not then a part
of the Corporate PIES as to which the holders have requested remarketing, on
that date at a price of 100.50% of the aggregate liquidation preference of those
shares. The proceeds from the remarketing of the shares of preferred stock that
are a part of the Corporate PIES will automatically be applied to satisfy in
full those Corporate PIES holders' obligations to purchase common stock under
the related purchase contracts and to pay the remarketing fee to Lehman Brothers
for that remarketing. See "Description of the Preferred Stock -- Market Rate
Reset by Remarketing" starting on page S-38.
If Lehman Brothers cannot remarket the preferred stock, a "Failed
Remarketing" will occur, and Bank United will be entitled to exercise its
rights as a secured party and, subject to applicable law, retain the preferred
stock pledged as collateral under the pledge agreement or sell it in one or more
private sales. In either case, the obligations of the holders under the related
purchase contracts would be satisfied in full. If Bank United exercises its
rights as a secured creditor, any accrued and unpaid interest payments on shares
of preferred stock will be paid in cash by Bank United to the purchase contract
agent for payment to the holders of the Corporate PIES of which those shares are
a part. Bank United will cause a notice of the Failed Remarketing to be
published on the second business day preceding the purchase contract settlement
date in a daily newspaper in the English language of general circulation in New
York City, which is expected to be THE WALL STREET JOURNAL.
As long as the PIES or the preferred stock are evidenced by one or more
global security certificates deposited with The Depository Trust Company, Bank
United will request, not later than 15 nor more than 30 calendar days prior to
the remarketing date, that DTC notify its participants holding preferred stock
or Corporate PIES of the remarketing and of the procedures to be followed for
settlement with separate cash. See "Description of the PIES -- Book-entry
system" below. Bank United will try to have in effect a registration statement
covering the shares of preferred stock to be remarketed in a form that Lehman
Brothers may use in connection with the remarketing process.
NOTICE TO SETTLE WITH CASH
A holder of a Corporate PIES or a Treasury PIES wishing to settle the
related purchase contract with separate cash must notify the purchase contract
agent by delivering a "Notice to settle by separate cash" on or before 5:00
p.m., New York City time:
o on the seventh business day preceding the purchase contract settlement
date, in the case of a Corporate PIES; and
o on the second business day preceding the purchase contract settlement
date, in the case of a Treasury PIES.
A holder wishing to settle with separate cash must deliver to the
securities intermediary cash payment in the form of a certified or cashier's
check or by wire transfer, in each case in immediately available funds payable
to or upon the order of the securities intermediary. Payment must be delivered
before 11:00 a.m., New York City time, on the fifth business day before the
purchase contract settlement date in the case of a Corporate PIES, or on the
business day before the purchase contract settlement date in the case of
Treasury PIES. Upon receipt of the cash payment, the related shares of preferred
stock, in the case of Corporate PIES, or Treasury Securities, in the case of
Treasury PIES, will be released from the pledge arrangement and transferred to
the purchase contract agent for
S-28
distribution to the holder of the related Corporate PIES. If the payment is not
delivered by that time and date, then the related shares of preferred stock will
be remarketed or Bank United will receive at maturity the principal amount of
the related Treasury Securities in full satisfaction of that holder's
obligations under the related purchase contract.
Any cash received by the securities intermediary upon separate cash
settlement will be invested promptly in permitted investments and paid to Bank
United on the purchase contract settlement date. Any funds received by the
securities intermediary in respect of the investment earnings from those
investments will be distributed to the purchase contract agent for payment to
the holders who settled with cash.
EARLY SETTLEMENT
A holder of Corporate PIES or Treasury PIES may settle the related purchase
contracts prior to the purchase contract settlement date by delivering to the
purchase contract agent:
o a completed "Election to settle early" form; and
o payment, payable to Bank United in immediately available funds, in an
amount equal to $50 multiplied by the number of purchase contracts
being settled.
A holder of Corporate PIES may settle early the related purchase contracts
at any time on or before the seventh business day preceding the purchase
contract settlement date. A holder of Treasury PIES also may settle early at any
time before the second business day preceding the purchase contract settlement
date, but only in integral multiples of 20 Treasury PIES.
Upon early settlement, Bank United will issue, and the holder will be
entitled to receive, newly issued shares of common stock for each
Corporate PIES or Treasury PIES, regardless of the market price of the common
stock on the date of early settlement but subject to adjustment under the
circumstances described under " -- Anti-dilution adjustments" below. The
holder's right to receive future contract adjustment payments will terminate.
Bank United will cause (1) the common stock to be issued and (2) the related
shares of preferred stock, in the case of Corporate PIES, or Treasury
Securities, in the case of Treasury PIES, securing those purchase contracts to
be released from the pledge under the pledge agreement, and, within three
business days following the settlement date, each will be transferred to the
purchase contract agent for delivery to the holder or the holder's designee.
If the purchase contract agent receives a completed "Election to settle
early" and payment of $50 for each PIES being settled early by 5:00 p.m., New
York City time, on any business day, then that day will be considered the
settlement date. If the purchase contract agent receives the foregoing after
5:00 p.m., New York City time, on any business day or at any time on a day that
is not a business day, then the next business day will be considered the
settlement date. As long as the PIES are evidenced by one or more global
security certificates deposited with DTC, procedures for early settlement also
will be governed by standing arrangements between DTC and the purchase contract
agent.
CONTRACT ADJUSTMENT PAYMENTS
Contract adjustment payments will be fixed at a rate per annum of % of
the $50 stated amount per purchase contract, subject to increase as described
below. Contract adjustment payments payable for any period will be computed (1)
for any full quarterly period on the basis of a 360-day year of twelve 30-day
months and (2) for any period shorter than a full quarterly period, on the basis
of a 30-day month and, for periods of less than a month, on the basis of the
actual number of days elapsed per 30-day month. Contract adjustment payments
will accrue from , 1999 and will be payable quarterly in arrears on
, , , and , of each year, beginning on , 1999.
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If a Reset Transaction, as defined below, occurs, the rate at which the
contract adjustment payments accrue will be adjusted to equal the Adjusted
Contract Adjustment Payment Rate from the effective date of the Reset
Transaction to, but not including, the earlier of:
o the effective date of any later Reset Transaction, or
o the purchase contract settlement date.
"Reset Transaction" means a merger, consolidation or statutory share
exchange to which the entity that is the issuer of the common stock for which
the purchase contracts are then to be settled is a party, a sale of all or
substantially all the assets of that entity, a recapitalization of that common
stock or a distribution described in clause (4) of the first paragraph under
" -- Anti-dilution adjustments" below, after the effective date of which
transaction or distribution the purchase contracts are then to be settled for:
o shares of an entity the common stock of which had a Dividend Yield for
the four fiscal quarters of that entity preceding the public
announcement of that transaction or distribution that was more than
250 basis points (.250) higher than the Dividend Yield on the common
stock, or other common stock then issuable upon settlement of the
purchase contracts, for the four fiscal quarters preceding the public
announcement of such transaction or distribution, or
o shares of an entity that announces a dividend policy prior to the
effective date of the transaction or distribution which policy, if
implemented, would result in a Dividend Yield on that entity's common
stock for the next four fiscal quarters that would result in such a
250 basis point increase.
The "Adjusted Contract Adjustment Payment Rate," with respect to any
Reset Transaction, will be the rate per annum that is the arithmetic average of
the rates quoted by two Reference Dealers selected by Bank United or its
successor as the rate at which contract adjustment payments should accrue so
that the fair market value, expressed in dollars, of a Corporate PIES
immediately after the later of:
o the public announcement of the Reset Transaction, or
o the public announcement of a change in dividend policy in connection
with the Reset Transaction,
will equal the average Trading Price of a Corporate PIES for the 20 Trading Days
preceding the date of public announcement of the Reset Transaction. However, the
Adjusted Contract Adjustment Payment Rate will not be less than % per
annum.
The "Dividend Yield" on any security for any period means the dividends
paid or proposed to be paid pursuant to an announced dividend policy on that
security for that period divided by, if with respect to dividends paid on that
security, the average Closing Price of that security during that period and, if
with respect to dividends proposed to be paid on that security, the Closing
Price of that security on the effective date of the related Reset Transaction.
"Reference Dealer" means a dealer engaged in the trading of convertible
securities.
"Trading Price" of a security on any date of determination means:
o the closing sale price or, if no closing sale price is reported, the
last reported sale price of a security, regular way, on the NYSE on
that date;
o if that security is not listed for trading on the NYSE on any such
date, the closing sale price as reported in the composite transactions
for the principal United States securities exchange on which that
security is so listed;
o if that security is not so listed on a United States national or
regional securities exchange, the closing sale price as reported by
the Nasdaq National Market;
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o if that security is not so reported, the price quoted by Interactive
Data Corporation for that security or, if Interactive Data Corporation
is not quoting such price, a similar quotation service selected by
Bank United;
o if that security is not so quoted, the average of the mid-point of the
last bid and ask prices for that security from at least two dealers
recognized as market-makers for such security; or
o if that security is not so quoted, the average of the last bid and ask
prices for that security from a Reference Dealer.
Contract adjustment payments will be payable to the holders of purchase
contracts as they are registered on the books and records of the purchase
contract agent on the relevant record dates. So long as the PIES remain in
book-entry only form that date will be the business day preceding the relevant
payment dates. Contract adjustment payments will be paid through the purchase
contract agent, which will hold amounts received in respect of the contract
adjustment payments for the benefit of the holders of the purchase contracts
that are a part of those PIES. Subject to any applicable laws and regulations,
each payment will be made as described under " -- Book-entry issuance" below.
If the PIES do not remain in book-entry only form, the relevant record dates
will be the 15th business day before the relevant payment dates. If any date on
which contract adjustment payments are to be made is not a business day, then
payment of the contract adjustment payments payable on that date will be made on
the next day that is a business day and without any interest in respect of any
such delay. However, if such business day is in the next calendar year, payment
will be made on the prior business day.
ANTI-DILUTION ADJUSTMENTS
In this section, "Current Market Price" per share of common stock on any
day means the average of the daily Closing Prices for the five consecutive
Trading Days selected by Bank United beginning not more than 30 Trading Days
before, and ending not later than, the earlier of the day in question and the
day before the "ex date" with respect to the issuance or distribution
requiring that computation. In this paragraph, the term "ex date," when used
with respect to any issuance or distribution, will mean the first date on which
the common stock trades regular way on the applicable exchange or in the
applicable market without the right to receive that issuance or distribution.
The formula for determining the Settlement Rate will be subject to
adjustment upon the occurrence of specified events, including:
(1) the payment of dividends and other distributions on the common
stock made in common stock;
(2) the issuance to all holders of common stock of rights, options or
warrants entitling them, for a period of up to 45 days, to
subscribe for or purchase common stock at less than their Current
Market Price;
(3) subdivisions, splits or combinations of common stock;
(4) distributions to all holders of common stock of evidences of
indebtedness or assets, including securities but excluding any
dividend or distribution covered by clause (1) or (2) above and
any dividend or distribution paid exclusively in cash;
(5) distributions consisting exclusively of cash to all holders of
common stock in an aggregate amount that, together with (a) other
all-cash distributions made within the preceding 12 months and
(b) any cash plus the fair market value, as of the expiration of
the tender or exchange offer referred to below, of consideration
payable in respect of any tender or exchange offer by Bank United
or any of its subsidiaries for the common stock concluded within
the preceding 12 months, exceeds 15% of the total market
capitalization of Bank United on the date of the distribution;
total market capitalization is the product of the Current Market
Price of the common stock multiplied by the number of shares of
common stock then outstanding; and
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(6) the successful completion of a tender or exchange offer made by
Bank United or any of its subsidiaries for the common stock that
involves an aggregate consideration having a fair market value
that, together with (a) any cash and the fair market value of
other consideration payable in respect of any tender or exchange
offer by Bank United or any of its subsidiaries for the common
stock concluded within the preceding 12 months and (b) the total
amount of any all-cash distributions to all holders of Bank
United common stock made within the preceding 12 months, exceeds
15% of the total market capitalization of Bank United on the
expiration of that tender or exchange offer.
In the case of certain reclassifications, consolidations, mergers, sales or
transfers of assets or other transactions pursuant to which the common stock is
converted into the right to receive other securities, cash or property, each
purchase contract then outstanding would become, without the consent of the
holder of the related Corporate PIES or Treasury PIES, a contract to purchase
only the kind and amount of securities, cash and other property receivable upon
consummation of the transaction by a holder of the number of shares of common
stock that would have been received by the holder of the related Corporate PIES
or Treasury PIES immediately before the date of consummation of the transaction
if the holder had then settled that purchase contract.
If at any time Bank United makes a distribution of property to its
shareholders that would be taxable to shareholders as a dividend for United
States federal income tax purposes, for example, distributions of evidences of
indebtedness or assets of Bank United, but generally not stock dividends or
rights to subscribe to capital stock, and, pursuant to the Settlement Rate
adjustment provisions of the purchase contract agreement, the Settlement Rate is
increased, that increase may give rise to a taxable dividend to holders of the
PIES. See "United States Federal Income Tax Consequences -- Corporate
PIES -- Purchase Contracts -- Adjustment to settlement rate" on page S-48.
In addition, Bank United may make similar increases in the Settlement Rate
as it deems advisable in order to avoid or diminish any income tax to holders of
its capital stock resulting from any dividend or distribution of capital stock,
or rights to acquire capital stock, or from any event treated in that way for
income tax purposes or for any other reason.
Adjustments to the Settlement Rate will be calculated to the nearest
1/10,000th of a share. No adjustment in the Settlement Rate will be required
unless the adjustment would require an increase or decrease of at least 1% in
the Settlement Rate. However, any adjustments not required to be made by reason
of the above will be carried forward and taken into account in any subsequent
adjustment.
Whenever the Settlement Rate is adjusted, Bank United must deliver to the
purchase contract agent a certificate setting forth the Settlement Rate,
detailing the calculation of the Settlement Rate and describing the facts upon
which the adjustment is based. In addition, Bank United must notify the holders
of the PIES of the adjustment within 10 business days of any event requiring
that adjustment and describe in reasonable detail the method by which the
Settlement Rate was adjusted.
Each adjustment to the Settlement Rate will result in a corresponding
adjustment to the number of shares of common stock issuable upon early
settlement of a purchase contract.
If an adjustment is made to the Settlement Rate, an adjustment also will be
made to the Applicable Market Value solely to determine which Settlement Rate
will be applicable on the purchase contract settlement date.
TERMINATION
The purchase contracts and the obligations and rights of Bank United and of
the holders of the PIES under the purchase contracts, including the holders'
right to receive accrued contract adjustment payments and the obligation and
right to purchase and receive common stock, will terminate automatically upon
the occurrence of certain events of bankruptcy, insolvency or reorganization
with respect to Bank United. Upon termination, the collateral agent will release
the related preferred stock, in the case of Corporate PIES, or Treasury
Securities, in the case of Treasury PIES, from the pledge
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arrangement and cause the securities intermediary to transfer the preferred
stock or Treasury Securities to the purchase contract agent for distribution to
the PIES holders. Upon termination, however, that release and distribution may
be subject to a delay. In the event that Bank United becomes the subject of a
case under the Bankruptcy Code, the delay may occur as a result of the automatic
stay under the Bankruptcy Code and continue until such automatic stay has been
lifted. Bank United expects any delay to be limited.
PLEDGED SECURITIES AND PLEDGE AGREEMENT
The shares of preferred stock that are a part of the Corporate PIES or, if
substituted, the Treasury Securities that are a part of the Treasury PIES, which
we collectively call the "Pledged Securities," will be pledged to the
collateral agent for the benefit of Bank United under the pledge agreement to
secure the obligations of the holders of the PIES to purchase common stock under
the related purchase contracts. The rights of the holders of the PIES with
respect to the Pledged Securities will be subject to the security interest of
Bank United in the Pledged Securities. No holder of Corporate PIES or Treasury
PIES will be permitted to withdraw the Pledged Securities related to Corporate
PIES or Treasury PIES from the pledge arrangement except:
(1) to substitute Treasury Securities for preferred stock;
(2) to substitute preferred stock for Treasury Securities; and
(3) upon early settlement, settlement for separate cash or
termination of the related purchase contracts.
In connection with clauses (1) and (2) above, see "Description of the
PIES -- Creating Treasury PIES by substituting Treasury Securities" and
" -- Recreating Corporate PIES" on pages S-23 and S-24.
Subject to the security interest and the terms of the purchase contract
agreement and the pledge agreement, each holder of Corporate PIES will be
entitled, through the purchase contract agent and the collateral agent, to all
of the proportional rights and preferences of the related preferred stock,
including dividend payments, voting and repayment rights, and each holder of
Treasury PIES will retain beneficial ownership of the related Treasury
Securities pledged in respect of the related purchase contracts. Bank United
will have no interest in the Pledged Securities other than its security
interest.
The securities intermediary will distribute, upon receipt of interest on
the Pledged Securities, payments to the purchase contract agent, which in turn
will distribute those payments, together with contract adjustment payments
received from Bank United, to the holders in whose names the PIES are registered
at the close of business on the record date prior to the date of such
distribution.
BOOK-ENTRY ISSUANCE
The depositary for the PIES will be DTC. The PIES will be issued only as
fully-registered securities registered in the name of Cede & Co., DTC's nominee.
The PIES will be issued in accordance with the procedures described under
"Book-Entry Procedures and Settlement" below.
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CERTAIN PROVISIONS OF THE PURCHASE CONTRACTS,
THE PURCHASE CONTRACT AGREEMENT AND THE PLEDGE AGREEMENT
GENERAL
Distributions on the PIES will be payable, the purchase contracts and
documents related to the PIES will be settled and transfers of the PIES will be
able to be registered at the office of the purchase contract agent in the
Borough of Manhattan, New York City. In addition, if the PIES do not remain in
book-entry form, Bank United has the option to pay distributions on the PIES by
check mailed to the address of the person entitled to those distributions as
shown on the security register of Bank United.
No service charge will be made for any registration of transfer or exchange
of the PIES, except for any tax or other governmental charge that may be imposed
in connection with a transfer or exchange.
MODIFICATION
Subject to limited exceptions, Bank United and the purchase contract agent
may not modify the terms of the purchase contracts or the purchase contract
agreement without the consent of the holders of not less than a majority of the
outstanding purchase contracts, except that no modification may, without the
consent of the holder of each outstanding purchase contract affected thereby:
o change any payment date;
o change the amount or type of collateral required to be pledged to
secure a holder's obligations under the purchase contract, except for
the right of a holder of Corporate PIES to substitute Treasury
Securities for the pledged preferred stock or the right of a holder of
Treasury PIES to substitute preferred stock for the pledged Treasury
Securities, impair the right of the holder of any purchase contract to
receive interest on the collateral or otherwise adversely affect the
holder's rights in or to the collateral;
o reduce any contract adjustment payments or change the place or
currency of payment;
o impair the right to institute suit for the enforcement of a purchase
contract;
o reduce the number of shares of common stock purchasable under a
purchase contract, increase the purchase price of the common stock on
settlement of any purchase contract, change the purchase contract
settlement date or otherwise adversely affect the holder's rights
under a purchase contract; or
o reduce the above-stated percentage of outstanding purchase contracts
whose holders' consent is required for the modification or amendment
of the provisions of the purchase contracts or the purchase contract
agreement.
However, if any amendment or proposal would adversely affect only the
Corporate PIES or only the Treasury PIES, then only the affected class of
holders will be entitled to vote on the amendment or proposal, and the amendment
or proposal will not be effective except with the consent of the holders of not
less than a majority of the class or, if referred to in the listed items above,
all of the holders of the class.
Subject to limited exceptions, Bank United, the collateral agent, the
securities intermediary and the purchase contract agent may not modify the terms
of the pledge agreement without the consent of the holders of not less than a
majority of the outstanding purchase contracts, except that no modification may,
without the unanimous consent of the holders of each outstanding PIES adversely
affected thereby:
o change the amount or type of collateral underlying a PIES, except for
the right of a holder of Corporate PIES to substitute Treasury
Securities for the pledged preferred stock or the right of a holder of
Treasury PIES to substitute preferred stock for the pledged Treasury
Securities,
S-34
impair the right of the holder of any PIES to receive distributions on
the underlying collateral or otherwise adversely affect the holder's
rights in or to the collateral;
o otherwise effect any action that, under the purchase contract
agreement, would require the consent of the holders of each
outstanding PIES; or
o reduce the above-stated percentage of outstanding purchase contracts
whose holders' consent is required for the amendment.
However, if any amendment or proposal would adversely affect only the
Corporate PIES or only the Treasury PIES, then only the affected class of
holders will be entitled to vote on the amendment or proposal, and the amendment
or proposal will not be effective except with the consent of the holders of not
less than a majority of the class or, if referred to in the items listed above,
all of the holders of the class.
NO CONSENT TO ASSUMPTION
Each holder of Corporate PIES or Treasury PIES will be deemed under the
terms of the purchase contract agreement, by his or her acceptance of such PIES,
to have expressly withheld any consent to the assumption, also known as
affirmance, of the related purchase contracts by Bank United, its receiver,
liquidator or trustee in the event that Bank United becomes the subject of a
case under the Bankruptcy Code or other similar state or federal law providing
for reorganization or liquidation.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Bank United will agree in the purchase contract agreement that it will not
merge or consolidate with any other entity or sell, assign, transfer, lease or
convey all or substantially all of its properties and assets to any other entity
or group of affiliated entities unless:
o either Bank United is the continuing corporation or the successor
corporation is a corporation organized under the laws of the United
States of America, a state thereof or the District of Columbia and
that corporation expressly assumes all the obligations of Bank United
under the purchase contracts, the purchase contract agreement and the
pledge agreement by one or more supplemental agreements in form
reasonably satisfactory to the purchase contract agent and the
collateral agent; and
o Bank United or that successor corporation is not, immediately after
such merger, consolidation, sale, assignment, transfer, lease or
conveyance, in default in the performance of any or condition
underlying the purchase contract, the PIES or the pledge agreement.
GOVERNING LAW
The purchase contracts, the purchase contract agreement and the pledge
agreement will be governed by and construed in accordance with the laws of the
State of New York.
INFORMATION CONCERNING THE PURCHASE CONTRACT AGENT
First National Bank of Chicago will be the purchase contract agent. The
purchase contract agent will act as the agent for the holders of the PIES from
time to time. The purchase contract agent will not be obligated to take any
discretionary action in connection with a default under the terms of the PIES or
the purchase contract agreement.
The purchase contract agreement will contain provisions limiting the
liability of the purchase contract agent. The purchase contract agreement also
will contain provisions under which the purchase contract agent may resign or be
replaced. Resignation or replacement would be effective upon the appointment of
a successor.
INFORMATION CONCERNING THE COLLATERAL AGENT
The Bank of New York will be the collateral agent. The collateral agent
will act solely as the agent of Bank United and will not assume any obligation
or relationship of agency or trust for or with
S-35
any of the holders of the PIES except for the obligations owed by a pledgee of
property to the owner thereof under the pledge agreement and applicable law.
The pledge agreement will contain provisions limiting the liability of the
collateral agent. The pledge agreement also will contain provisions under which
the collateral agent may resign or be replaced. Resignation or replacement would
be effective upon the appointment of a successor.
INFORMATION CONCERNING THE SECURITIES INTERMEDIARY
The Bank of New York will be the securities intermediary. All property
delivered to the securities intermediary pursuant to the purchase contract
agreement or the pledge agreement will be credited to a collateral account
established by the securities intermediary for the collateral agent. The
securities intermediary will treat the purchase contract agent as entitled to
exercise all rights relating to any financial asset credited to such collateral
account, subject to the provisions of the pledge agreement.
MISCELLANEOUS
The purchase contract agreement will provide that Bank United will pay all
fees and expenses related to (1) the retention of the collateral agent and the
securities intermediary and (2) the enforcement by the purchase contract agent
of the rights of the holders of the PIES. However, holders who elect to
substitute the related Pledged Securities, thus creating Treasury PIES or
recreating Corporate PIES, will be responsible for any fees or expenses payable
in connection with the substitution, as well as for any commissions, fees or
other expenses incurred in acquiring the Pledged Securities to be substituted.
Bank United will not be responsible for any of those fees or expenses.
S-36
DESCRIPTION OF THE PREFERRED STOCK
GENERAL
ALL REFERENCES TO PREFERRED STOCK IN THIS PROSPECTUS SUPPLEMENT, INCLUDING
THIS SECTION, APPLY TO THE SERIES B PREFERRED STOCK OF BANK UNITED ONLY, UNLESS
WE OTHERWISE EXPRESSLY STATE. THE FOLLOWING SUMMARY DESCRIPTION SUPPLEMENTS THE
DESCRIPTION OF THE PREFERRED STOCK IN THE ACCOMPANYING PROSPECTUS AND, TO THE
EXTENT THIS DESCRIPTION IS INCONSISTENT WITH THE PROSPECTUS, REPLACES THE
DESCRIPTION IN THE PROSPECTUS. THE FOLLOWING DESCRIPTION OF THE PREFERRED STOCK
CONTAINS A DESCRIPTION OF ALL MATERIAL TERMS OF THE SERIES B PREFERRED STOCK,
BUT DOES NOT PURPORT TO BE COMPLETE. FOR ADDITIONAL INFORMATION, YOU SHOULD
REFER TO OUR CERTIFICATE OF INCORPORATION, OUR BY-LAWS AND THE CERTIFICATE OF
DESIGNATIONS FOR THE SERIES B PREFERRED STOCK. OUR CERTIFICATE OF INCORPORATION
AND BY-LAWS ARE FILED AS EXHIBITS TO THE REGISTRATION STATEMENTS OF WHICH THIS
PROSPECTUS SUPPLEMENT IS A PART. WE HAVE FILED A FORM OF THE CERTIFICATE OF
DESIGNATIONS AS AN EXHIBIT TO THE REGISTRATION STATEMENT OF WHICH THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS ARE A PART.
The Bank United board of directors has authorized the issuance of a series
of preferred stock consisting of up to 2,000,000 shares. These shares of
preferred stock will be issued in connection with the PIES offering and
constitute a single series of preferred stock of Bank United, which will be
called the "Series B Preferred Stock." Bank United may, in the future, issue
additional series of preferred stock. When issued and sold for the consideration
described in this prospectus supplement, the preferred stock will be duly and
validly issued, fully paid and nonassessable. The preferred stock will not be
convertible into shares of common stock or any other class or series of capital
stock of Bank United. The holders of the preferred stock will have no preemptive
rights with respect to any shares of Bank United capital stock or any other
securities convertible into or carrying rights or options to purchase any shares
of Bank United capital stock. The preferred stock will not be subject to any
sinking fund or other obligation by Bank United to repurchase or retire the
preferred stock. The registrar, transfer agent and dividend disbursing agent for
the preferred stock is .
RANKING
The preferred stock will rank senior to the common stock with respect to
the payment of dividends and upon liquidation, dissolution or winding up of Bank
United.
DIVIDENDS
Holders of the preferred stock will be entitled to receive, when and as
declared by the Bank United board of directors out of assets of Bank United
legally available for payment, cash dividends at the annual rate of % per
share, equivalent to $ per share, until the purchase contract settlement date
on , 2002, and at the Reset Rate thereafter. Dividends
on the preferred stock will be payable quarterly in arrears on
, , and of each
year, beginning on , 1999, or if that date is not a
business day, the next succeeding business day. Dividends on the preferred stock
will begin to accumulate and be cumulative from the date of original issuance
and will be payable to holders of record as they appear on the stock books of
Bank United on the record dates for the dividend payments. Those record dates
will be not more than 60 days nor less than 10 days preceding the payment dates
and will be fixed by the board of directors of Bank United. However, holders of
shares of preferred stock called for redemption on a redemption date falling
between a dividend payment record date and the dividend payment date will
receive the dividend payment together with all other accumulated and unpaid
dividends on the date fixed for redemption instead of on the dividend payment
date. Dividends payable on the preferred stock for any period longer or shorter
than a full dividend period will be computed on the basis of twelve 30-day
months, a 360-day year and the actual number of days elapsed in the period.
Dividends payable per share of preferred stock for each quarterly dividend
period will be computed by dividing the annual dividend amount of $ by four.
Holders of the preferred stock will not be entitled to any dividends, whether
payable in cash, property
S-37
or securities, in excess of the full cumulative dividends, as described in this
paragraph. No interest, or sum of money in lieu of interest, will be payable in
respect of any accumulated and unpaid dividends.
If dividends are not paid in full, or declared in full and sums set apart
for their payment, on the preferred stock and on any other capital stock ranking
equally as to dividends with the preferred stock, all dividends declared on
shares of preferred stock and shares of that other capital stock will be
declared and paid pro rata so that in all cases the amount of dividends declared
per share on the preferred stock and that other capital stock will bear to each
other the same ratio that accrued and unpaid dividends per share on the shares
of preferred stock and that other capital stock bear to each other. Except as
provided above, unless full cumulative dividends on all outstanding shares of
the preferred stock have been paid or declared and sums set aside for their
payment,
o dividends, other than dividends paid in common stock or other stock
ranking junior to the preferred stock as to dividends and upon
liquidation, dissolution or winding up, may not be declared or paid or
set apart for payment,
o other distributions may not be made on the common stock or on any
other stock of Bank United ranking junior to the preferred stock as to
dividends, or upon liquidation, dissolution or winding up, and
o any common stock or any other stock of Bank United ranking junior to
or on a parity with the preferred stock as to dividends or upon
liquidation, dissolution or winding up may not be redeemed, purchased
or otherwise acquired for any consideration by Bank United, except by
conversion into or exchange for stock of Bank United ranking junior to
the preferred stock as to dividends and upon liquidation, dissolution
or winding up.
DIVIDEND RATE RESET BY REMARKETING
The dividend rate on the preferred stock will be reset to the Reset Rate on
the third day preceding the purchase contract settlement date. The Reset Rate
will be the rate per annum that results from the remarketing of the shares of
preferred stock that are a part of the Corporate PIES as to which the holders
have not given notice of their election to settle the related purchase contracts
with cash, or have given notice but failed to deliver cash, and the shares of
preferred stock that are not a part of the Corporate PIES as to which the
holders have requested remarketing. On the remarketing date, Lehman Brothers
will use commercially reasonable efforts to remarket those shares of preferred
stock at a price equal to 100.50% of the aggregate liquidation preference of
those shares.
REMARKETING PROCEDURES. Below is a summary of the procedures to be
followed in connection with a remarketing of the preferred stock.
As long as the PIES or the preferred stock are evidenced by one or more
global security certificates deposited with DTC, Bank United will request, not
later than 15 nor more than 30 calendar days prior to the remarketing date, that
DTC notify its participants holding preferred stock or Corporate PIES of the
remarketing.
Not later than 5:00 p.m., New York City time, on the seventh business day
preceding the purchase contract settlement date, which is also four business
days prior to the remarketing date, any holder of shares of preferred stock that
are a part of the Corporate PIES may elect to have those shares remarketed.
Holders of Corporate PIES that do not give notice before that time of their
intention to settle their related purchase contracts for separate cash, and
holders who give notice but fail to deliver cash before 11:00 a.m., New York
City time, on the fifth business day preceding the purchase contract settlement
date, will be deemed to have consented to the disposition of the shares of
preferred stock that are a part of their Corporate PIES in the remarketing.
Holders of shares of preferred stock that are not a part of the Corporate PIES
who wish to have their shares remarketed must give notice of their election
before 11:00 a.m., New York City time, on that fifth business day. Any such
notice will be irrevocable and may not be conditioned upon the level at which
the Reset Rate is established in the remarketing.
S-38
If none of the holders elects to have preferred stock remarketed in the
remarketing, the Reset Rate will be the rate determined by Lehman Brothers, in
its sole discretion, as the rate that would have been established had a
remarketing been held on the remarketing date.
If Lehman Brothers determines that it will be able to remarket all the
shares of preferred stock tendered or deemed tendered for purchase at a price of
100.50% of the aggregate liquidation preference of those shares before 4:00
p.m., New York City time, on the remarketing date, Lehman Brothers will
determine the Reset Rate, which will be the rate, rounded to the nearest
one-thousandth (0.001) of one percent, per annum that Lehman Brothers
determines, in its sole judgment, to be the lowest rate per year that will
enable it to remarket all the shares of preferred stock tendered or deemed
tendered for remarketing at that price.
If, by 4:00 p.m., New York City time, on the remarketing date, Lehman
Brothers is unable to remarket all the shares of preferred stock tendered or
deemed tendered for purchase, a Failed Remarketing will be deemed to have
occurred, and Lehman Brothers will so advise DTC and Bank United. If a Failed
Remarketing occurs, the Reset Rate will be equal to (1) the "AA" Composite
Commercial Paper Rate, as defined in the next paragraph, plus (2) a spread
ranging from 300 to 700 basis points based on the credit ratings of the
preferred stock at that time.
" "AA' Composite Commercial Paper Rate" on any date means:
o the interest equivalent of the 60-day rate on commercial paper placed
on behalf of issuers whose corporate bonds are rated "AA" by S&P or
the equivalent of that rating by S&P or the equivalent of that rating
by S&P or another rating agency, as made available on a discount basis
or otherwise by the Federal Reserve Board for the business day
immediately preceding that date; or
o if the Federal Reserve Board does not make available any such rate,
then the arithmetic average of those rates, as quoted on a discount
basis or otherwise, by the Commercial Paper Dealers, as defined in the
next paragraph, to Lehman Brothers for the close of business on the
business day next preceding that date.
"Commercial Paper Dealers" means Lehman Commercial Paper Inc., Goldman,
Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated or their
affiliates or successors, if they are commercial paper dealers.
If any Commercial Paper Dealer does not quote a rate required to determine
the "AA" Composite Commercial Paper Rate, the "AA" Composite Commercial
Paper Rate will be determined on the basis of the quotation or quotations
furnished by the remaining Commercial Paper Dealer or Commercial Paper Dealers
and any substitute commercial paper dealer or substitute commercial paper
dealers selected by Lehman Brothers or, if Lehman Brothers does not select any
such substitute commercial paper dealer or substitute commercial paper dealers,
by the remaining Commercial Paper Dealer or Commercial Paper Dealers.
By approximately 4:30 p.m., New York City time, on the remarketing date, so
long as there has not been a Failed Remarketing, Lehman Brothers will advise:
o DTC and Bank United of the Reset Rate determined in the remarketing
and the number of shares of preferred stock sold in the remarketing;
o each person purchasing shares of preferred stock in the remarketing or
the appropriate DTC participant of the Reset Rate and the number of
shares of preferred stock that person is to purchase; and
o each of those purchasers to give instructions to its DTC participant
to pay the purchase price on the purchase contract settlement date in
same day funds against delivery of the shares of preferred stock
purchased through the facilities of DTC.
In accordance with DTC's normal procedures, on the purchase contract
settlement date, the transactions described above with respect to each share of
preferred stock tendered for purchase and
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sold in the remarketing will be executed through DTC, and the accounts of the
respective DTC participants will be debited and credited and those shares
delivered by book entry as necessary to effect purchases and sales of the shares
of preferred stock. DTC will make payment in accordance with its normal
procedures.
If any holder selling shares of preferred stock in the remarketing fails to
deliver those shares, the direct or indirect DTC participant of the selling
holder and of any other person that was to have purchased shares of preferred
stock in the remarketing may deliver to that other person a number of shares of
preferred stock that is less than the number of shares of preferred stock that
otherwise was to be purchased by that person. In that event, the number of
shares of preferred stock to be so delivered will be determined by the direct or
indirect participant, and delivery of the lesser number of shares of preferred
stock will constitute good delivery.
The right of each holder to have shares of preferred stock tendered for
purchase will be limited to the extent that:
o Lehman Brothers conducts a remarketing pursuant to the terms of the
remarketing agreement;
o shares of preferred stock tendered have not been called for
redemption;
o Lehman Brothers is able to find a purchaser or purchasers for tendered
shares of preferred stock; and
o the purchaser or purchasers deliver the purchase price for the shares
of preferred stock to Lehman Brothers.
Lehman Brothers is not obligated to purchase any shares of preferred stock
that would otherwise remain unsold in the remarketing. Neither Bank United nor
Lehman Brothers will be obligated in any case to provide funds to make payment
upon tender of preferred stock for remarketing.
Bank United will be liable for any and all costs and expenses incurred in
connection with the remarketing.
REMARKETING AGENT. The remarketing agent will be Lehman Brothers. Bank
United and Lehman Brothers will enter into the remarketing agreement which
provides that Lehman Brothers will act as the exclusive remarketing agent and
will use commercially reasonable efforts to remarket securities tendered or
deemed tendered for purchase in the remarketing at a price of 100.50% of their
liquidation preference. Under certain circumstances, some portion of the shares
of preferred stock tendered in the remarketing may be purchased by the
remarketing agent.
The remarketing agreement provides that the remarketing agent will incur no
liability to Bank United or to any holder of the Corporate PIES or the preferred
stock in its individual capacity or as remarketing agent for any action or
failure to act in connection with a remarketing or otherwise, except as a result
of the negligence or willful misconduct on its part. The remarketing agent will
receive .50% of the amount of the proceeds received in the remarketing as its
remarketing fee.
Bank United has agreed to indemnify the remarketing agent against certain
liabilities, including liabilities under the Securities Act, arising out of or
in connection with its duties under the remarketing agreement.
The remarketing agreement also will provide that the remarketing agent may
resign and be discharged from its duties and obligations under the remarketing
agreement. However, no resignation will become effective unless a nationally
recognized broker-dealer has been appointed by Bank United as successor
remarketing agent and the successor remarketing agent has entered into a
remarketing agreement with Bank United. In that case, Bank United will use
reasonable efforts to appoint a successor remarketing agent and enter into a
remarketing agreement with that person as soon as reasonably practicable.
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REDEMPTION
Shares of preferred stock will not be redeemable before , 2002. On or
after that date, the shares of preferred stock will be redeemable at the option
of Bank United, in whole or in part, at any time or from time to time, on not
less than 30 or more than 60 days notice by mail, at a redemption price of $50
per share, plus accrued and unpaid dividends to the date of redemption.
On , 2004, all outstanding shares of preferred stock will be redeemed
by Bank United on not less than 30 or more than 60 days notice by mail, at a
redemption price of $50 per share, plus accrued and unpaid dividends to the date
of redemption.
After the date of a redemption, unless Bank United is in default in
providing money for the payment of the redemption price, dividends will cease to
accrue on the preferred stock, and the shares of preferred stock will no longer
be deemed to be outstanding. On that date, all rights of the preferred stock
will cease, except the right to receive the moneys payable upon redemption,
without interest, upon surrender of the certificates evidencing the shares of
preferred stock.
LIQUIDATION RIGHTS
In the event of any liquidation, dissolution or winding up of Bank United,
whether voluntary or involuntary, the holders of shares of preferred stock will
be entitled to receive out of the assets of Bank United available for
distribution to stockholders the liquidation preference of $50 per share plus an
amount equal to all dividends, whether or not earned or declared, accumulated
and unpaid to the payment date before any payment or distribution of assets is
made to holders of common stock or of any other class of stock of Bank United
ranking junior to the preferred stock upon liquidation, dissolution or winding
up. If upon any liquidation, dissolution or winding up of Bank United, the
amounts payable with respect to the preferred stock and any other capital stock
ranking as to any asset distribution equally with the preferred stock are not
paid in full, the holders of the preferred stock and of that other capital stock
will share ratably in that distribution of assets in proportion to the full
respective preferential amounts to which they are entitled. After payment of the
full amount of the liquidation preference to which they are entitled, the
holders of shares of preferred stock will not be entitled to any further
participation in any distribution of assets of Bank United. Neither a
consolidation or merger of Bank United with another corporation nor a sale,
lease, exchange or transfer of all or part of the assets of Bank United for
cash, securities or other property will be considered a liquidation, dissolution
or winding up of Bank United for these purposes.
The liquidation preference amount relating to the preferred stock is not
necessarily indicative of the price at which the preferred stock will actually
trade at or after the time of their issuance. The preferred stock may trade at
prices below its liquidation preference amount. The market price of the
preferred stock can be expected to fluctuate with changes in the financial
markets and economic conditions, the financial condition and prospects of Bank
United and other factors that generally influence the market prices of
securities.
VOTING RIGHTS
Each share of preferred stock will carry .10 of a vote in connection with
matters submitted generally to the holders of the common stock of Bank United,
voting together as a single class with shares of the common stock and other
capital stock of Bank United entitled to vote in respect of matters submitted to
stockholders generally. Based on the number of shares of common stock of Bank
United outstanding as of the date of this prospectus supplement and assuming
that all offered shares are issued and outstanding, the shares of preferred
stock would represent, in the aggregate, approximately % of the combined
voting power of the shares of preferred stock and the common stock.
Whenever dividends on shares of the preferred stock have not been paid in
an aggregate amount equal to at least six quarterly dividends on those shares,
whether or not consecutive, the holders of the preferred stock, voting
separately as a class with the holders of any stock ranking equally as to
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dividends with the preferred stock on which similar voting rights have been
conferred and are exercisable, will be entitled to elect two directors to the
Bank United board of directors either by written consent or at an annual or
special meeting of stockholders of Bank United held during the period those
dividends remain in arrears. These voting rights will terminate when all those
dividends accrued and in default have been paid in full or declared and funds
for their payment in full have been set apart. At that time, the term of office
of all directors so elected will also terminate.
In addition, the affirmative vote or consent of the holders of at least
two-thirds of the outstanding shares of any series of preferred stock, voting as
a separate class, will be required for any amendment, alteration or repeal,
whether by merger, consolidation or otherwise, of any provisions of the
certificate of incorporation of Bank United that adversely affect the powers,
preferences, privileges or rights of the holders of the preferred stock. The
affirmative vote or consent of the holders of shares representing at least
two-thirds of the combined voting power of the preferred stock and any other
series of preferred stock of Bank United ranking equally with the preferred
stock as to dividends or upon liquidation, dissolution or winding up of Bank
United, voting as a single class without regard to series, will be required to
authorize or effect (1) the creation, authorization or issuance of, and (2) the
reclassification of any authorized stock of Bank United into any obligation or
security convertible into or evidencing the right to purchase any additional
class or series of stock ranking prior to the preferred stock as to dividends or
upon liquidation, dissolution or winding up of Bank United.
Except as described above in this section on voting rights, as described in
the accompanying prospectus or as required by law, the preferred stock will have
no other voting rights.
The above provisions are not applicable to the designation by the Bank
United board of directors of any series of preferred stock other than the Series
B Preferred Stock.
BOOK-ENTRY ISSUANCE
The preferred stock will be issued as one or more global certificates
registered in the name of DTC or its nominee. The depositary for the preferred
stock will be DTC. The preferred stock will be issued only as fully-registered
securities registered in the name of Cede & Co., DTC's nominee. The preferred
stock will be issued in accordance with the procedures described under
"Book-Entry Procedures and Settlement" below.
BOOK-ENTRY PROCEDURES AND SETTLEMENT
Upon issuance, all book-entry securities will be represented by one or more
fully registered global securities, without coupons. Each global security will
be deposited with, or on behalf of, DTC, a securities depository, and will be
registered in the name of DTC or a nominee of DTC. DTC will thus be the only
registered holder of these securities.
Purchasers of securities may only hold interests in the global notes
through DTC if they are participants in the DTC system. Purchasers may also hold
interests through a securities intermediary -- banks, brokerage houses and other
institutions that maintain securities accounts for customers -- that has an
account with DTC or its nominee. DTC will maintain accounts showing the security
holdings of its participants, and these participants will in turn maintain
accounts showing the security holdings of their customers. Some of these
customers may themselves be securities intermediaries holding securities for
their customers. Thus, each beneficial owner of a book-entry security will hold
that security indirectly through a hierarchy of intermediaries, with DTC at the
"top" and the beneficial owner's own securities intermediary at the
"bottom."
The securities of each beneficial owner of a book-entry security will be
evidenced solely by entries on the books of the beneficial owners' securities
intermediary. The actual purchaser of the securities will generally not be
entitled to have the securities represented by the global securities registered
in its name and will not be considered the owner under the declaration. In most
cases, a beneficial owner will also not be able to obtain a paper certificate
evidencing the holder's ownership of securities. The book-entry system for
holding securities eliminates the need for physical movement
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of certificates and is the system through which most publicly traded securities
are held in the United States. However, the laws of some jurisdictions require
some purchasers of securities to take physical delivery of their securities in
definitive form. These laws may impair the ability to transfer book-entry
securities.
A beneficial owner of book-entry securities represented by a global
security may exchange the securities for definitive (paper) securities only if:
o DTC is unwilling or unable to continue as depositary for such global
security and Lehman Brothers Holdings does not appoint a qualified
replacement for DTC within 90 days; or
o Bank United in its sole discretion decides to allow some or all
book-entry securities to be exchangeable for definitive securities in
registered form.
Unless we indicate otherwise, any global security that is exchangeable will
be exchangeable in whole for definitive securities in registered form, with the
same terms and of an equal aggregate principal amount. Definitive securities
will be registered in the name or names of the person or persons specified by
DTC in a written instruction to the registrar of the securities. DTC may base
its written instruction upon directions that it receives from its participants.
In this prospectus, for book-entry securities, references to actions taken
by security holders will mean actions taken by DTC upon instructions from its
participants, and references to payments and notices of redemption to security
holders will mean payments and notices of redemption to DTC as the registered
holder of the securities for distribution to participants in accordance with
DTC's procedures.
DTC is a limited purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered under section 17A of the Securities Exchange Act
of 1934. The rules applicable to DTC and it participants are on file with the
SEC.
DTC's management is aware that some computer applications, systems, and the
like for precessing dates that are dependent upon calendar dates, including
dates before, on, and after January 1, 2000, may encounter "Year 2000
problems." DTC has informed its participants and other members of the financial
community that it has developed and is implementing a program so that its
systems, as they relate to the timely payment of distributions to
securityholders, book-entry deliveries, and settlement of trades within DTC,
continue to function appropriately. This program includes a technical assessment
and a remediation plan, each of which is complete. Additionally, DTC's plan
includes a testing phase, which is expected to be completed within appropriate
time frames.
Bank United will not have any responsibility or liability for any aspect of
the records relating to, or payments made on account of, beneficial ownership
interest in the book-entry securities or for maintaining, supervising or
reviewing any records relating to the beneficial ownership interests.
DTC may discontinue providing its services as securities depositary at any
time by giving reasonable notice. Under such circumstances, in the event that a
successor securities depositary is not obtained, securities certificates are
required to be printed and delivered. Additionally, Bank United may decide to
discontinue use of the system of book-entry transfers through DTC or any
successor depositary with respect to the preferred securities. In that event,
certificates for the securities will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained form sources that Bank United believes to be reliable, but
Bank United does not take responsibility for the accuracy thereof.
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UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material United States federal income tax
consequences of the purchase, ownership and disposition of the PIES, the
preferred stock and the common shares acquired under a purchase contract. Unless
otherwise stated, this summary applies only to "U.S. Holders" who purchase
Corporate PIES upon original issuance for an amount equal to the initial
offering price and who hold the PIES, the preferred stock and the common shares
acquired under the purchase contract as capital assets.
A "U.S. Holder" is:
o a person who is a citizen or resident of the United States;
o a corporation or partnership created or organized in or under the laws
of the United States or any state thereof or the District of Columbia;
o an estate the income of which is subject to United States fe deral
income taxation, regardless of its source; or
o a trust (1) that is subject to the supervision of a court with the
United States and the control of one or more United States persons as
described in Section 7701(a)(30) of the Internal Revenue Code of 1986,
as amended or (2) that has a valid election in effect under applicable
U.S. Treasury regulations to be treated as a United States person.
The tax treatment of a holder may vary depending on the holder's particular
situation. This summary does not deal with special classes of holders. For
example, this summary does not address:
o tax consequences to holders who may be subject to special tax
treatment, such as banks, thrifts, real estate investment trusts,
regulated investment companies, insurance companies, dealers in
securities or currencies, or tax-exempt investors,
o tax consequences to persons who will hold the PIES, the preferred
stock or the common shares acquired under the purchase contract as a
position in a "straddle," "synthetic security," "hedge,"
"integrated transaction," "constructive sale transaction" or
"conversion transaction,"
o tax consequences to holders of PIES, preferred stock or common shares
acquired under a purchase contract whose functional currency is not
the U.S. dollar,
o tax consequences to shareholders, partners or beneficiaries of a
holder of PIES, preferred stock or common shares acquired under a
purchase contract,
o alternative minimum tax consequences, if any, or
o the consequences of any state, local or foreign tax laws or any
federal laws other than those pertaining to the income tax.
IF YOU ARE NOT A UNITED STATES PERSON WITHIN THE MEANING OF SECTION
7701(A)(30) OF THE INTERNAL REVENUE CODE, YOU ARE URGED TO CONSULT YOUR OWN TAX
ADVISORS REGARDING THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF AN
INVESTMENT IN THE PIES, INCLUDING THE POTENTIAL APPLICATION OF UNITED STATES
WITHHOLDING TAXES.
This summary is based upon the Internal Revenue Code, Treasury regulations,
including proposed Treasury regulations, issued thereunder, IRS rulings and
pronouncements and judicial decisions now in effect, all of which are subject to
change, possibly on a retroactive basis. Any changes may be applied
retroactively in a manner that could cause the tax consequences to vary
substantially from the consequences described below, possibly adversely
affecting a U.S. Holder.
No statutory, administrative or judicial authority directly addresses the
treatment of the PIES or instruments similar to the PIES for United States
federal income tax purposes. As a result, we cannot assure you that the IRS will
agree with the tax consequences described in this prospectus supplement. YOU ARE
URGED TO CONSULT YOUR OWN TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO
YOU OF
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THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE PIES IN LIGHT OF YOUR OWN
PARTICULAR CIRCUMSTANCES, INCLUDING THE TAX CONSEQUENCES UNDER FEDERAL, STATE,
LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED
STATES FEDERAL OR OTHER TAX LAWS.
CORPORATE PIES
ALLOCATION OF PURCHASE PRICE
A U.S. Holder's acquisition of a Corporate PIES will be treated as an
acquisition of a unit consisting of the preferred stock and the purchase
contract that comprise the Corporate PIES. The purchase price of each Corporate
PIES will be allocated between the preferred stock and the purchase contract in
proportion to their respective fair market values at the time of purchase. This
allocation will establish the U.S. Holder's initial tax bases in the preferred
stock and the purchase contract. Bank United will report the fair market value
of each preferred stock as $50 and the fair market value of each purchase
contract as $0. This position will be binding upon each U.S. Holder, but not on
the IRS, unless the U.S. Holder explicitly discloses a contrary position on a
statement attached to the U.S. Holder's timely filed United States federal
income tax return for the taxable year in which a Corporate PIES is acquired.
Thus, absent that disclosure, a U.S. Holder should allocate the purchase price
for a Corporate PIES in accordance with the foregoing. The remainder of this
discussion assumes that this allocation of the purchase price will be respected
for United States federal income tax purposes.
PREFERRED STOCK
DISTRIBUTIONS
Distributions on the shares of the preferred stock, other than
distributions in redemption of shares of the preferred stock subject to section
302(b) of the Internal Revenue Code, will constitute dividends for federal
income tax purposes to the extent paid from current or accumulated earnings and
profits of Bank United, as determined under federal income tax principles. Any
corporate U.S. Holder of the shares of the preferred stock that is otherwise
eligible for the 70% dividends-received deduction under the Internal Revenue
Code will be allowed that deduction with respect to dividends on the shares of
the preferred stock.
Bank United expects that its current and accumulated earnings and profits
will be sufficient so that all distributions paid on the shares of preferred
stock will qualify as dividends for federal income tax purposes. Nevertheless,
any distributions on the shares of the preferred stock in excess of Bank
United's current and accumulated earnings and profits will, to that extent, not
be eligible for the dividends-received deduction. This excess will generally be
treated for federal income tax purposes as a tax-free return of capital, to the
extent of a U.S. Holder's basis in its shares of preferred stock, and any
additional amount as a long-term or short-term capital gain. Distributions that
are treated as a return of capital reduce a U.S. Holder's basis in the shares of
the preferred stock and may subject the U.S. Holder to the payment of tax, at
long-term or short-term capital gain rates, when distributions are made in
excess of the U.S. Holder's remaining basis in its shares of the preferred stock
or if there is a subsequent sale or redemption of the U.S. Holder's preferred
stock.
U.S. Holders should consider that the Internal Revenue Code contains
several limitations on the availability of the dividends-received deduction even
if Bank United has sufficient current or accumulated earnings and profits.
Section 246(c) of the Internal Revenue Code disallows the dividends-received
deduction with respect to any dividend on shares of stock held for 45 days or
fewer during the 90-day period beginning on the date which is 45 days before the
date on which the shares became ex-dividend with respect to the dividend. Any
period in which a U.S. Holder has an option to sell, is under a contractual
obligation to sell, has made and not closed a short sale of, or has granted
certain options to buy, substantially identical stock or securities, or held one
or more other positions in substantially similar or related property that
diminishes the risk of loss from holding the preferred stock, will not be
counted toward the 45-day holding period requirement. Furthermore, U.S. Holders
should consider section 1059 of the Internal Revenue Code, which limits the
benefit of the
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dividends-received deduction by requiring a U.S. Holder to reduce its basis in
the preferred stock with respect to certain extraordinary dividends.
In addition, Section 246A of the Internal Revenue Code reduces the
dividends-received deduction allowed to a corporate U.S. Holder that has
incurred indebtedness "directly attributable" to its investment in portfolio
stock. U.S. Holders should be aware that in February 1999, the Clinton
Administration proposed to expand the applicability of Section 246A to include a
percentage of indirect financing. The proposed legislation would apply to
portfolio stock acquired after the date of enactment. It is not possible to
predict whether legislation modifying current rules regarding debt-financed
portfolio stock will be enacted, what form the legislation might take, or what
the effective date of any future legislation might be.
SALES, EXCHANGES OR OTHER DISPOSITIONS OF PREFERRED STOCK
A U.S. Holder will recognize capital gain or loss on a sale, exchange or
other disposition of preferred stock, including the remarketing thereof, in an
amount equal to the difference between the amount realized by the U.S. Holder on
the disposition of the preferred stock and the U.S. Holder's adjusted tax basis
in the preferred stock. Selling expenses incurred by a U.S. Holder will reduce
the amount of gain or increase the amount of loss recognized upon the sale,
exchange or other disposition of the preferred stock. Capital gains of
individuals derived from capital assets held for more than one year are subject
to reduced tax rates. A U.S. Holder's ability to deduct capital losses is
subject to limitations.
REDEMPTION
A redemption of the preferred stock will be treated under Section 302 of
the Internal Revenue Code as a dividend if Bank United has sufficient earnings
and profits, unless the redemption satisfies the test set forth in Section
302(b) of the Internal Revenue Code enabling the redemption to be treated as a
sale or exchange. The redemption will satisfy this test only if it (1) is
"substantially disproportionate," (2) constitutes a "complete termination of
the holder's stock interest" in Bank United or (3) is "not essentially
equivalent to a dividend," each within the meaning of Section 302(b). In
determining whether any of these tests are met, shares considered to be owned by
the U.S. Holder by reason of certain constructive ownership rules set forth in
the Internal Revenue Code, as well as shares actually owned, must generally be
taken into account. Because the determination as to whether any of the
alternative tests of Section 302(b) of the Internal Revenue Code is satisfied
with respect to a particular holder of the preferred stock will depend on the
facts and circumstances as of the time the determination is made, U.S. Holders
are advised to consult their own tax advisors to determine their tax treatment
in light of their own particular investment circumstances.
PURCHASE CONTRACTS
INCOME FROM CONTRACT ADJUSTMENT PAYMENTS
There is no direct authority addressing the treatment of the contract
adjustment payments under current law, and the treatment is unclear. Contract
adjustment payments may constitute taxable income to a U.S. Holder when received
or accrued, in accordance with the U.S. Holder's method of tax accounting. If
Bank United is required to file information returns with respect to contract
adjustment payments, it intends to report the contract adjustment payments as
taxable income to each U.S. Holder. U.S. Holders should consult their own tax
advisors concerning the treatment of contract adjustment payments, including the
possibility that any payment may be treated as a loan, purchase price
adjustment, rebate or payment analogous to an option premium, rather than being
includible in income on a current basis. The treatment of contract adjustment
payments could affect a U.S. Holder's tax basis in a purchase contract or, in
the common shares acquired under a purchase contract or the amount realized by a
U.S. Holder upon the sale or disposition of a PIES or the termination of a
purchase contract. See "-- Acquisition of common stock under a purchase
contract," "-- Termination of purchase contract" and "-- Sale or disposition
of PIES" below.
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ACQUISITION OF COMMON STOCK UNDER A PURCHASE CONTRACT
A U.S. Holder generally will not recognize gain or loss on the purchase of
shares of common stock under a purchase contract, except with respect to any
cash paid in lieu of a fractional share of common stock. Subject to the
discussion in this section, a U.S. Holder's aggregate initial tax basis in the
shares of common stock acquired under a purchase contract generally should equal
the purchase price paid for the shares of common stock plus the U.S. Holder's
tax basis in the purchase contract, if any, less the portion of the purchase
price and tax basis allocable to the fractional share. Payments of contract
adjustment payments that have been received in cash by a U.S. Holder but not
included in income should reduce the U.S. Holder's tax basis in the purchase
contract or in the shares of common stock to be received under the purchase
contract. See "-- Income from contract adjustment payments," above. The
holding period for shares of common stock acquired under a purchase contract
will commence on the date of the acquisition of those shares of common stock.
OWNERSHIP OF COMMON STOCK ACQUIRED UNDER THE PURCHASE CONTRACT
Any dividend on common shares paid by Bank United out of its current or
accumulated earnings and profits, as determined for United States federal income
tax purposes, will be includible in income by the U.S. Holder when received. Any
dividend includible in income will be eligible for the dividends received
deduction if received by an otherwise qualifying corporate U.S. Holder that
meets the holding period and other requirements for the dividends received
deduction.
Upon a sale or other disposition of shares of common stock, a U.S. Holder
generally will recognize capital gain or loss equal to the difference between
the amount realized and the U.S. Holder's adjusted tax basis in the common
shares. Capital gains of individuals derived in respect of capital assets held
for more than one year are subject to reduced tax rates. The deductibility of
capital losses is subject to limitations.
EARLY SETTLEMENT OF PURCHASE CONTRACT
A U.S. Holder will not recognize gain or loss on the receipt of the U.S.
Holder's proportionate share of preferred stock or Treasury Securities upon
early settlement of a purchase contract, and the holder will have the same tax
basis in the preferred stock or Treasury Securities as the holder had before the
early settlement.
TERMINATION OF PURCHASE CONTRACT
If a purchase contract terminates, a U.S. Holder will recognize capital
gain or loss equal to the difference between the amount realized, if any, upon
such termination and the U.S. Holder's adjusted tax basis, if any, in the
purchase contract at the time of the termination. Any contract adjustment
payments received by a U.S. Holder but not included in income should either
reduce the U.S. Holder's tax basis in the purchase contract or result in an
amount realized on the termination of the purchase contract. Any contract
adjustment payments included in a U.S. Holder's income but not paid should
increase the U.S. Holder's tax basis in the purchase contract (see "-- Income
from contract adjustment payments" above). Capital gains of individuals derived
in respect of capital assets held for more than one year are subject to reduced
maximum tax rates. A U.S. Holder's ability to deduct capital losses is subject
to limitations. A U.S. Holder will not recognize gain or loss on the receipt of
the U.S. Holder's proportionate share of preferred stock or Treasury Securities
upon termination of the purchase contract and will have the same tax basis in
that preferred stock or Treasury Securities as before the distribution.
If a termination of the purchase contract occurs when it has negative
value, see "-- Sale or Disposition of PIES" below. U.S. Holders should consult
their tax advisors regarding a termination of the purchase contract at a time
when the purchase contract has negative value.
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ADJUSTMENT TO SETTLEMENT RATE
U.S. Holders of PIES might be treated as receiving a constructive
distribution from Bank United if (1) the Settlement Rate is adjusted and as a
result of the adjustment the proportionate interest of U.S. Holders of PIES in
the assets or earnings and profits of Bank United is increased and (2) the
adjustment is not made pursuant to a bona fide, reasonable anti-dilution
formula. An adjustment in the Settlement Rate would not be considered made
pursuant to a bona fide formula if the adjustment were made to compensate a U.S.
Holder for certain taxable distributions with respect to the common shares.
Thus, under certain circumstances, an increase in the Settlement Rate might give
rise to a taxable dividend to U.S. Holders of PIES even though the U.S. Holders
would not receive any cash related thereto.
TREASURY PIES
SUBSTITUTION OF TREASURY SECURITIES TO CREATE TREASURY PIES
A U.S. Holder of Corporate PIES that delivers Treasury Securities to the
securities intermediary in substitution for the preferred stock generally will
not recognize gain or loss upon the delivery of the Treasury Securities or the
release of the preferred stock to the U.S. Holder. The U.S. Holder will continue
to include in income any dividends on the preferred stock, and the U.S. Holder's
basis in the preferred stock and the purchase contract will not be affected by
the delivery and release.
OWNERSHIP OF TREASURY SECURITIES
A U.S. Holder's initial tax basis in the Treasury Securities that are part
of the Treasury PIES will be equal to the amount paid for the Treasury
Securities. A U.S. Holder generally will include in income any original issue
discount or acquisition discount includible with respect to the Treasury
Securities. In general, a U.S. Holder will be required to include in income each
year that the U.S. Holder holds a Treasury Security the portion of the original
issue discount or acquisition discount that accrues on the Treasury Security in
that year.
SUBSTITUTION OF PREFERRED STOCK TO RECREATE CORPORATE PIES
A U.S. Holder of Treasury PIES that delivers preferred stock to the
securities intermediary to recreate Corporate PIES generally will not recognize
gain or loss upon the delivery of such preferred stock or the release of the
Treasury Securities to the U.S. Holder. The U.S. Holder will continue to include
in income any interest, original issue discount or acquisition discount with
respect to such Treasury Securities and the U.S. Holder's tax basis in the
Treasury Securities, the preferred stock and the purchase contract will not be
affected by such delivery and release.
SALE OR DISPOSITION OF PIES
Upon a disposition of PIES, a U.S. Holder will be treated as having sold,
exchanged or disposed of the purchase contracts and the preferred stock, or, in
the case of Treasury PIES, the Treasury Securities that comprise those PIES and
generally will have capital gain or loss equal to the difference between the
portion of the proceeds to the U.S. Holder allocable to the purchase contracts
and the preferred stock or Treasury Securities, as the case may be, and the U.S.
Holder's respective adjusted tax bases in the purchase contract and the
preferred stock or Treasury Securities. For purposes of determining gain or
loss, the U.S. Holder's proceeds will not include any amount equal to accrued
and unpaid interest on the Treasury Securities not previously included in
income, which amount will be treated as ordinary interest income. Capital gains
of individuals derived in respect of capital assets held for more than one year
are taxed at a reduced tax rate. The deductibility of capital losses is subject
to limitations. If a disposition of the PIES occurs when the purchase contract
has negative value, the U.S. Holder should be considered to have received
additional consideration for the preferred stock or Treasury Securities in an
amount equal to the negative value and to have paid the amount to be released
from the U.S. Holder's obligation under the purchase contract. U.S. Holders
should consult
S-48
their tax advisors regarding a disposition of the PIES at a time when the
purchase contract has negative value.
Payments to a U.S. Holder of contract adjustment payments that have not
previously been included in the income of the U.S. Holder should either reduce
the U.S. Holder's tax basis in the purchase contract or result in an increase in
the amount realized on the disposition of the purchase contract. Any contract
adjustment payments included in a U.S. Holder's income but not paid should
increase the U.S. Holder's tax basis in the purchase contract. See
"-- Corporate PIES -- Purchase contracts -- Income from contract adjustment
payments."
NON-UNITED STATES HOLDERS
The following summary discusses the tax consequences to Non-United States
Holders. You are a "Non-United States Holder" if you are not a U.S. Holder. As
discussed above, the PIES will be treated by the holders and by Bank United as a
unit consisting of a purchase contract and preferred stock or Treasury Security,
as the case may be. The following discussion is subject to the discussion below
concerning backup withholding.
Under present United States federal income tax laws, a Non-United States
Holder generally will be subject to United States federal income tax withholding
on dividend payments on the holder's preferred stock and any contract adjustment
payments at a rate of 30%. A Non-United States Holder may reduce or eliminate
the 30% withholding tax on dividends and contract adjustment payments discussed
above if the holder provides Bank United, or its paying agent, as the case may
be, with a properly executed:
o IRS Form W-8 or a substantially similar form,
o IRS Form 1001 (or successor form) properly claiming an exemption from,
or a reduction of, such withholding tax under the benefit of an
applicable tax treaty, or
o IRS Form 4224 (or successor form) stating that payment with respect to
the PIES, preferred stock, or common shares is not subject to
withholding tax because it is effectively connected with the
beneficial owner's conduct of a trade or business in the United
States.
Under future regulations generally applicable to payments made after
December 31, 2000, Non-United States Holders will generally be required to
provide an IRS Form W-8 in lieu of IRS Form 1001 and IRS Form 4224, although
alternative documentation may be applicable in certain situations. The future
regulations also modify certain certification requirements.
Generally, a Non-United States Holder will not be subject to United States
federal income taxes on any amount that constitutes gain upon a sale, exchange,
or other disposition of a PIES, preferred stock, Treasury Security or common
shares, provided the gain is not effectively connected with the conduct of a
trade or business in the United States by the Non-United States Holder. Certain
other exceptions may be applicable, and a Non-United States Holder should
consult its tax advisor in this regard. However, as discussed previously, a
redemption of the preferred stock may be treated as a dividend, for federal
income tax purposes, and therefore may be subject to withholding on dividend
payments as described above. See "Corporate PIES -- Preferred stock
redemption".
Finally, Bank United does not believe it is a "United States real property
holding corporation" for federal income tax purposes. However, if Bank United
is, was, or becomes, during the five year period preceding that disposition, a
"United States real property holding corporation," a Non-United States Holder
who holds or held more than five percent of the class of stock will be subject
to federal tax on the sale or other disposition of such stock, and those holders
should contact their tax advisors.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
Payments under the PIES, the preferred stock or the common shares acquired
under a purchase contract, the proceeds received with respect to a fractional
common share upon settlement of a purchase contract, and the sale of the PIES,
the preferred stock or the common shares acquired under
S-49
a purchase contract may be subject to information reporting and United States
federal backup withholding tax at the rate of 31% if the U.S. Holder thereof
fails to supply an accurate taxpayer identification number or otherwise fails to
comply with applicable United States information reporting or certification
requirements. No information reporting or backup withholding will be required
with respect to payments made by Bank United or any paying agent to Non-United
States Holders if a statement described above under "Non-United States
Holders" has been received and the payor does not have actual knowledge, or,
after December 31, 2000, reason to know, that the beneficial owner is a U.S.
Holder. Any amounts so withheld will be allowed as a credit against a U.S.
Holder's United States federal income tax liability.
ERISA CONSIDERATIONS
In this section, the term "Plans" means employee benefit plans that are
subject to the Employee Retirement Income Security Act of 1974 ("ERISA"),
plans, individual retirement accounts and other arrangements that are subject to
Section 4975 of the Internal Revenue Code and other entities whose underlying
assets are considered to include "plan assets" of those plans, accounts and
arrangements.
Generally, a Plan may purchase the Corporate PIES subject to the
determination by the investing fiduciary of the Plan that the Plan's investment
in the Corporate PIES satisfies ERISA's fiduciary responsibility requirements
and other requirements applicable to investments by Plans. Accordingly, among
other factors, the investing fiduciary should consider whether the investment
would satisfy the prudence and diversification requirements of ERISA and would
be consistent with the documents and instruments governing the Plan.
Under regulations issued by the U.S. Department of Labor, in the case of an
investment by a Plan in an equity interest of an entity that is not a
"publicly-offered security," the Plan's assets include both the equity
interest and an undivided interest in each of the entity's underlying assets,
unless it is established that the entity is an "operating company" or equity
participation in the entity by benefit plan investors is not significant.
In order to be considered "publicly-offered securities," the Corporate
PIES must be:
o freely transferrable,
o part of a class of securities that is widely held, and
o either (a) part of a class of securities registered under section
12(b) or 12(g) of the Securities Exchange Act of 1934 or (b) sold to
the Plan as part of an offering of securities to the public pursuant
to an effective registration statement under the Securities Act, as
long as the class of securities is registered under the Securities
Exchange Act within 120 days after the end of the relevant issuer's
fiscal year.
In order to be considered an "operating company," Bank United must be an
entity that is primarily engaged, directly or through a majority owned
subsidiary or subsidiaries, in the production or sale of a product or service
other than the investment of capital.
Under the regulations issued by the U.S. Department of Labor, an entity's
assets will not be deemed to be plan assets if ownership of the entity by Plans
is not "significant." In general, equity participation in an entity by a Plan
is not significant on any date if, immediately after the most recent acquisition
of an equity interest in an entity, less than 25% of the value of each class of
equity interests in the entity is held by Plans. No monitoring or other measures
will be taken to determine or ensure that the requirements of this or any other
exception are met with respect to the Corporate PIES. Accordingly, no assurances
can be given that an exception will apply to all or any transactions involving
these assets.
In addition, Section 406 of ERISA and Section 4975 of the Internal Revenue
Code prohibit Plans from engaging in specified transactions involving plan
assets with persons or entities who are "parties in interest," within the
meaning of ERISA, or "disqualified persons," within the meaning of Section
S-50
4975 of the Internal Revenue Code. The acquisition and/or ownership, or the
sale, of the Corporate PIES by a Plan with respect to which Bank United, another
entity affiliated with the Corporate PIES or any of their respective affiliates
is considered a party in interest or a disqualified person may constitute or
result in a prohibited transaction under Section 406 of ERISA or Section 4975 of
the Internal Revenue Code, unless those Corporate PIES are acquired and are held
in accordance with an applicable statutory, class or individual prohibited
transaction exemption. In this regard, the Department of Labor has issued
prohibited transaction class exemptions, which are called "PTCEs," that may
apply to the acquisition and holding of the Corporate PIES. These class
exemptions include PTCE 84-14 respecting transactions determined by independent
qualified professional asset managers, PTCE 90-1 respecting insurance company
pooled separate accounts, PTCE 91-38 respecting bank collective investment trust
funds, PTCE 95-60 respecting life insurance company general accounts and PTCE
96-23 respecting transactions determined by in-house asset managers.
Any fiduciary proposing to acquire the Corporate PIES for or on behalf of a
Plan, directly or indirectly, should consult with ERISA counsel for the Plan and
should not acquire the Corporate PIES unless it is determined that the
acquisition and holding of the Corporate PIES by the Plan:
o does not and will not constitute or result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Internal
Revenue Code and
o will satisfy the applicable fiduciary requirements imposed under ERISA.
Any acquisition of Corporate PIES by a Plan will be deemed a representation
by the Plan and the fiduciary effecting the investment for or on behalf of the
Plan that the acquisition and holding satisfies the applicable fiduciary
requirements of ERISA and is either (1) not a prohibited transaction under ERISA
or the Internal Revenue Code and is otherwise permissible under applicable law
or (2) entitled to exemptive relief from the prohibited transaction provisions
of ERISA and the Internal Revenue Code in accordance with one or more of the
PTCEs mentioned above or another available statutory, class or individual
prohibited transaction exemption.
UNDERWRITING
Bank United has entered into an underwriting agreement with Lehman
Brothers, pursuant to which, and subject to its terms and conditions, Bank
United has agreed to sell to Lehman Brothers and Lehman Brothers has agreed to
purchase from Bank United all of the Corporate PIES.
The underwriting agreement provides that the obligation of Lehman Brothers
to purchase the Corporate PIES is subject to the satisfaction of certain
conditions, including the approval of certain legal matters by its counsel.
Subject to the terms and conditions of the underwriting agreement, Lehman
Brothers must purchase all of the Corporate PIES if it purchases any of them.
Lehman Brothers has advised Bank United that it will offer the Corporate
PIES directly to the public initially at the offering price and to certain
dealers at the offering price less a selling concession not to exceed $ per
Corporate PIES. Lehman Brothers may allow and these dealers may reallow a
concession not to exceed $ per Corporate PIES to other dealers. After the
initial offering of the Corporate PIES, Lehman Brothers may change the public
offering price, the concession to selected dealers and the reallowance to other
dealers.
The following table shows the underwriting discount that Bank United will
pay to Lehman Brothers in connection with this offering. The amounts below
represent the underwriting discount assuming both exercise and no exercise of
the option of Lehman Brothers to purchase an additional 300,000 Corporate PIES
to cover over-allotments.
WITHOUT OVER-ALLOTMENT WITH OVER-ALLOTMENT
---------------------- -------------------
Per Corporate PIES................... $ $
Total................................ $ $
S-51
Bank United estimates that its expenses in connection with the offering of
the Corporate PIES will be approximately $ .
Bank United has granted to Lehman Brothers an option to purchase an
aggregate of up to an additional 300,000 Corporate PIES solely to cover
over-allotments, at the initial offering price to the public. Any or all of the
option may be exercised at any time on or before 30 days after the date of the
underwriting agreement. To the extent that the option is exercised, Lehman
Brothers will be committed, subject to certain conditions, to purchase up to
that number of additional Corporate PIES.
Bank United has agreed to indemnify Lehman Brothers against certain
liabilities, including liabilities under the Securities Act, and to contribute
to payments which Lehman Brothers would be required to make regarding any
liabilities that it may have under the Securities Act.
Before this offering, there has been no public market for the Corporate
PIES. We have applied to have the Corporate PIES listed on the NYSE. Trading of
the Corporate PIES on the New York Stock Exchange is expected to commence within
a 5-day period after the initial delivery of the Corporate PIES. In order to
meet one of the requirements for listing on the NYSE, Lehman Brothers has
undertaken to sell the Corporate PIES to a minimum of 400 beneficial owners.
Lehman Brothers has advised Bank United that it presently intends to make a
market in the Corporate PIES as permitted by applicable laws and regulations.
Lehman Brothers is not obligated to make a market in the Corporate PIES,
however, and it may discontinue this market making at any time in its sole
discretion. Accordingly, Bank United cannot assure investors that there will be
adequate liquidity or adequate trading markets for the Corporate PIES.
In connection with the offering of the Corporate PIES, Lehman Brothers may
engage in certain transactions that stabilize the price of the Corporate PIES
and the common stock. These transactions may consist of bids or purchases for
the purpose of pegging, fixing or maintaining the price of the Corporate PIES
and the common stock. If Lehman Brothers creates a short position in the
Corporate PIES or common stock in connection with this offering, by selling more
Corporate PIES than are listed on the cover page of this prospectus supplement
or by selling common stock that it does not own, then Lehman Brothers may reduce
that short position by purchasing Corporate PIES or common stock in the open
market. In general, the purchase of a security for the purpose of stabilization
or reducing a short position could cause the price of that security to be higher
than it might otherwise be in the absence of those purchases.
In addition, in connection with this offering, Lehman Brothers and selling
group members may engage in passive marketing making transactions in the common
stock on the Nasdaq National Market, before the pricing and completion of this
offering. Passive market making consists of displaying bids on the Nasdaq
National Market no higher than the bid prices of independent market makers and
making purchases at prices no higher than those independent bids and effected in
response to order flow. Net purchases by a passive market maker on each day are
limited to a specified percentage of the passive market maker's average daily
trading volume in the common stock during a specified period and must be
discontinued when that limit is reached. Passive market making may cause the
price of the common stock to be higher than the price that otherwise would exist
in the open market in the absence of those transactions.
S-52
Lehman Brothers and Bank United have agreed that, unless Bank United
receives the prior written consent of Lehman Brothers, Bank United may not,
during the period ending 90 days after the date of this prospectus supplement:
o directly or indirectly, offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any PIES, common stock, purchase contracts or
preferred stock of any series other than the series of preferred stock
which is the subject of a concurrent offering described in this
prospectus supplement, or any securities of Bank United similar to the
PIES, purchase contracts or preferred stock of any of those series, or
any security convertible into or exercisable or exchangeable for PIES,
common stock purchase contracts or preferred stock of any of those
series, or file any registration statement under the Securities Act
with respect to any of the above, however,
the restrictions described in the previous paragraph do not apply to:
o the sale of the PIES to Lehman Brothers as underwriter,
o Treasury PIES or Corporate PIES that may be created or recreated upon
substitution of pledged securities or common stock issuable upon early
settlement of the Corporate PIES or Treasury PIES,
o any share of common stock, or options to purchase any shares of common
stock, issued in a merger involving Bank United, in an acquisition
transaction or in specified similar transactions,
o any shares of common stock issued, or options to purchase any shares
of common stock granted, under existing employee benefit plans or
o any shares of common stock issued under any non-employee director
stock plan or dividend reinvestment plan.
Neither Bank United nor Lehman Brothers makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Corporate PIES. In addition,
neither Bank United nor Lehman Brothers makes any representation that anyone
will engage in these transactions or that these transactions, once they have
begun, will not be discontinued without notice.
Lehman Brothers has, directly and indirectly, provided investment and
commercial banking or financial advisory services to Bank United and its
affiliates, for which it has received customary fees and commissions, and
expects to provide these services to Bank United and its affiliates in the
future, for which it expects to receive customary fees and commissions.
Certain wholly owned subsidiaries of Lehman Brothers Inc. own an aggregate
of 1,529,557 shares of common stock of Bank United, which represents 5.4% of the
outstanding common stock.
LEGAL MATTERS
The validity of the PIES, the purchase contracts, the common stock and the
preferred stock which are being offered will be passed upon for us by Wachtell,
Lipton, Rosen & Katz, New York, New York. Certain legal matters will be passed
upon for Lehman Brothers by Simpson Thacher & Bartlett, New York, New York.
S-53
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this prospectus supplement by reference from Bank United Corp.'s
Annual Report on Form 10-K for the year ended September 30, 1998 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated by reference in this prospectus supplement, and
have been so incorporated in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information for the periods
ended December 31, 1998 and March 31, 1999 which are incorporated in this
prospectus supplement by reference, Deloitte & Touche have applied limited
procedures in accordance with professional standards for a review of such
information. However, as stated in their report included in Bank United Corp.'s
Quarterly Report on Form 10-Q they did not audit and they do not express an
opinion on that interim financial information. Accordingly, the degree of
reliance on their reports on such information should be restricted in light of
the limited nature of the review procedures applied. Deloitte & Touche are not
subject to the liability provisions of Section 11 of the Securities Act of 1933
for their reports on the unaudited interim financial information because those
reports are not "reports" or a "part" of the registration statement prepared
or certified by an accountant within the meaning of Sections 7 and 11 of the
Securities Act.
S-54
================================================================================
2,000,000 PREMIUM INCOME EQUITY SECURITIESSM ("PIESSM")
CONSISTING OF 2,000,000 CORPORATE PIES
[BANK UNITED CORP. LOGO]
---------------------------
PROSPECTUS SUPPLEMENT
, 1999
---------------------------
LEHMAN BROTHERS INC.
================================================================================
THE INFORMATION IN THIS PRELIMINARY PROSPECTUS SUPPLEMENT IS NOT COMPLETE AND
MAY BE CHANGED. THIS PRELIMINARY PROSPECTUS SUPPLEMENT IS NOT AN OFFER TO SELL
THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED AUGUST 3, 1999
PRELIMINARY PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED ______________, 1999)
2,000,000 SHARES
SERIES A PREFERRED STOCK
BANK UNITED CORP.
Bank United Corp. is selling 2,000,000 shares of its Series A preferred
stock. All of the shares of preferred stock will have a liquidation preference
of $50 per share. In this prospectus supplement, we refer to Bank United Corp.
as "Bank United".
Dividends on the preferred stock are cumulative from the date of issue and
will be payable on February , May , August and November of each year,
beginning on November , 1999, at the annual rate of % through the dividend
payment date on February , 2000, and thereafter at the annual rate of %.
The preferred stock is redeemable at any time on or after February , 2000
at 100% of its liquidation preference plus accrued dividends to the redemption
date. The preferred stock will be subject to mandatory redemption in full on
August , 2004 at the same price.
PER SHARE TOTAL
--------- -------------
Public Offering Price................... $ $
Underwriting Discount................... $ $
Proceeds to Bank United................. $ $
Any accumulated dividend payments on the preferred stock from
, 1999 should be added to the Public Offering Price.
Bank United has granted the underwriter a 30-day option to purchase up to
additional shares of preferred stock on the same terms and
conditions described above solely to cover over-allotments, if any.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
Lehman Brothers Inc. expects to deliver the preferred stock through the book
entry system of The Depository Trust Company on or about ,
1999.
LEHMAN BROTHERS
, 1999
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement and the accompanying prospectus contain
information about Bank United and about the preferred stock. They also refer to
information contained in other documents filed by Bank United with the
Securities and Exchange Commission. References to this prospectus supplement or
the prospectus also mean the information contained in those other documents. If
this prospectus supplement is inconsistent with the prospectus or the documents
incorporated herein by reference, rely on this prospectus supplement.
You should rely on the information in this prospectus supplement or the
accompanying prospectus or in documents that are incorporated by reference into
the prospectus. Neither Bank United nor the underwriter has authorized anyone to
provide any different or additional information. We are not making an offer of
the preferred stock in any jurisdiction where the offer is not permitted. You
should not assume that information in these documents is correct or complete
after the date of this prospectus supplement.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
----
Prospectus Supplement Summary........ S-3
Use of Proceeds...................... S-10
Capitalization....................... S-10
Description of the Preferred Stock... S-11
Book-Entry Procedures and
Settlement......................... S-13
Underwriting......................... S-15
United States Federal Income Tax
Consequences....................... S-16
Legal Matters........................ S-17
Experts.............................. S-17
PROSPECTUS
PAGE
----
Risk Factors......................... 1
Use of Proceeds...................... 4
Ratios of Earnings to Fixed Charges
and Earnings to Combined Fixed
Charges and Preferred Dividends.... 4
Bank United Corp. ................... 5
Bank United Capital Trust............ 6
Description of Offered Securities.... 8
Relationship Among the Trust
Preferred Securities, the Trust
Preferred Securities Guarantee and
the Junior Subordinated Notes Held
by Bank United Capital Trust....... 33
Selling Stockholders................. 34
Plan of Distribution................. 35
Legal Matters........................ 36
Experts.............................. 36
Forward-Looking Information.......... 36
About this Prospectus................ 37
Where You Can Find More
Information........................ 38
PROSPECTUS SUPPLEMENT SUMMARY
The following summary is qualified by the more detailed information and the
consolidated financial statements of Bank United appearing elsewhere in this
prospectus supplement or the accompanying prospectus or incorporated by
reference in the accompanying prospectus.
BANK UNITED CORP.
We are a broad-based financial services provider to consumers and
businesses in Texas and selected regional markets throughout the United States.
At June 30, 1999, we operated a 144-branch community banking network serving
nearly 284,000 households, as well as 18 commercial banking offices in 15 states
across the country. As of June 30, 1999, we were the largest publicly traded
financial institution headquartered in Texas, with $15.4 billion in assets, $7.2
billion in deposits and $732.8 million in stockholders' equity. Our address is
3200 Southwest Freeway, Suite 2600, Houston, Texas 77027, and our telephone
number is (713) 543-6500.
Our bank subsidiary's capital levels at June 30, 1999 and September 30,
1998 qualified it as "well-capitalized," the highest of five categories under
applicable regulatory definitions. Our bank subsidiary's capital ratios at June
30, 1999 and September 30, 1998 and the applicable regulatory capital
requirements were as follows:
JUNE 30, SEPTEMBER 30, CAPITAL ADEQUACY WELL-CAPITALIZED
1999 1998 REQUIREMENT REQUIREMENT
--------- -------------- ----------------- -----------------
Tangible capital..................... 6.60% 6.75% 1.50% --
Core/Leverage capital................ 6.62% 6.77% 3.00% 5.00%
Tier 1 capital....................... 9.29% 9.97% -- 6.00%
Total risk-based capital............. 11.24% 10.48% 8.00% 10.00%
RECENT DEVELOPMENTS
The following are selected financial data for the periods indicated. The
selected consolidated financial data as of June 30, 1999 and for the nine months
ended June 30, 1999 and 1998, respectively, are taken from our unaudited
consolidated financial statements, which in our opinion contain all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the results for these periods. These results of operations for
the nine months ended June 30, 1999 are not necessarily indicative of the
results of operations that may be obtained for the entire fiscal year. The
selected consolidated financial data as of September 30, 1998 are taken from
financial statements audited by Deloitte & Touche LLP, independent auditors,
which are incorporated into this prospectus supplement by reference.
AT AT
JUNE 30, SEPTEMBER 30,
1999 1998
----------- --------------
(DOLLARS IN THOUSANDS)
STATEMENT OF FINANCIAL CONDITION
DATA:
Total assets....................... $15,426,756 $ 13,664,992
Mortgage-backed securities......... 1,069,315 932,058
Loans.............................. 12,386,846 10,803,744
Deposits........................... 7,213,264 6,798,237
Borrowings......................... 7,022,728 5,963,751
Minority interest, Bank Preferred
Stock........................... 185,500 185,500
Total stockholders' equity......... 732,822 684,412
S-3
FOR THE NINE MONTHS
ENDED JUNE 30,
-----------------------------
1999 1998
----------- --------------
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE DATA)
STATEMENT OF OPERATIONS DATA:
Net interest income................ $ 247,745 $ 214,589
Provision for credit losses........ 17,977 16,777
Non-interest income................ 88,563 54,110
Non-interest expense............... 172,338 138,783
Income before income taxes and
minority interest............... 145,993 113,139
Net income......................... 77,309 90,645
Net income applicable to common
shares............................. 77,309 90,645
Basic earnings per common share.... 2.45 2.87
Diluted earnings per common
share.............................. 2.40 2.80
AT OR FOR THE NINE MONTHS
ENDED JUNE 30,
-----------------------------
1999 1998
----------- --------------
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE DATA)
OTHER DATA:
Mortgage servicing
portfolio -- period end......... $30,609,155 $ 29,349,450
Common shares outstanding
Period end...................... 31,703,646 31,595,596
Average-- basic................. 31,606,979 31,595,596
Average-- diluted............... 32,239,062 32,360,747
Book value-- period end............ 23.11 21.19
Tangible book value-- period end... 20.41 19.25
FOR THE NINE MONTHS
ENDED JUNE 30,
-----------------------------
1999 1998
----------- --------------
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE DATA)
CERTAIN RATIOS:
Return on average assets........... 0.83% 1.11%
Return on average common equity.... 14.48 19.18
Stockholders' equity to assets..... 4.75 5.11
Net yield on interest-earning
assets............................. 2.45 2.44
Efficiency ratio................... 49.93 50.23
Allowance for credit losses to net
nonaccrual loans................ 84.67 67.55
Allowance for credit losses total
loans........................... 0.51 0.46
Net loan charge-offs to average
loans........................... 0.05 0.15
Nonperforming assets to total
assets............................. 0.65 0.65
REGULATORY CAPITAL RATIOS OF THE
BANK:
Tangible capital................... 6.60 7.03
Core capital....................... 6.62 7.06
Total risk-based capital........... 11.24 10.93
Net income was $77.3 million or $2.40 per diluted share for the nine months
ended June 30, 1999, compared to $90.6 million or $2.80 per diluted share for
the nine months ended June 30, 1998.
S-4
Two positive income tax adjustments totalling $33.5 million recorded during the
nine months ended June 30, 1998 were the principal reasons for the decrease. Net
interest income increased $15% or $33.2 million due to higher levels of
interest-earning assets, particularly in the commercial lending businesses.
Non-interest income increased $34.5 million or 64%, due to an increase in the
servicing portfolio and the average service fee rates as well as increased
mortgage banking gains resulting from single family loan sales in the normal
course of business. Non-interest expenses increased $33.5 million, or 24%, due
primarily to higher levels of loan activity and community bank branch expansion.
Net income was $24.8 million or $0.77 per diluted share for the quarter
ended June 30, 1999, compared to $23.9 million or $0.74 per diluted share for
the quarter ended June 30, 1998. Higher levels of interest-earning assets and an
increase in the net yield to 2.57% produced a 17% or $13.0 million increase in
net interest income. Partially offsetting this increase was a $12.3 million
increase in non-interest expense, primarily due to higher levels of loan
activity and community bank branch expansion.
Total assets increased $1.8 billion to $15.4 billion at June 30, 1999 from
$13.6 billion at September 30, 1998. This increase occurred primarily due to
growth in the commercial loan portfolio. FHLB advances and higher deposit levels
were the principal source of funds used to finance this growth.
THE OFFERING
We are selling 2,000,000 shares of our Series A preferred stock in this
offering. All of the shares of preferred stock will have a liquidation
preference of $50 per share. Dividends on the preferred stock will be payable on
February , May , August and November of each year, beginning on November
, 1999, at the annual rate of % through the dividend payment date on
, 2000, and thereafter at the annual rate of %. The preferred stock
is redeemable at our option at any time on or after February , 2000 at 100% of
its liquidation preference plus accrued dividends to the redemption date. The
preferred stock will be subject to mandatory redemption in full on August ,
2004 at the same price. Each share of preferred stock will have the right to
vote together with our common stockholders on all matters submitted generally to
our stockholders for a vote, and will be entitled to vote separately as a class
with respect to certain matters affecting the interests of preferred
stockholders. Preferred stockholders will also be entitled to elect two
additional directors to our board if we fail to pay dividends on the preferred
stock for six quarters.
CONCURRENT OFFERING
We are also offering, in a concurrent offering, $100 million of our Premium
Income Equity SecuritiesSM ("PIESSM"). Each PIES consists of a unit comprised
of a stock purchase contract and a share of preferred stock, each issued by Bank
United. The stock purchase contract requires the holder to purchase shares of
common stock from Bank United prior to August , 2002. The number of shares of
common stock that each holder will be required to purchase pursuant to the stock
purchase contract will be determined based on the average closing price of the
common stock during a specified 20-day trading period. The preferred stock,
which will be pledged to secure each holder's obligations under the related
stock purchase contract, will pay dividends quarterly at the annual rate of %
through , 2002, and thereafter at a reset rate set through a
remarketing process. The preferred stock will be subject to mandatory redemption
on , 2004 at a price equal to % of its liquidation preference plus
accrued dividends to the redemption date.
USE OF PROCEEDS
The estimated net proceeds from the sale of the preferred stock, after
deducting underwriting discounts and estimated fees and expenses, are expected
to be approximately $ million, or
S-5
$ million if the underwriter's over-allotment option is exercised in full.
See "Use of Proceeds" on page S-10. We intend to use these net proceeds for
general corporate purposes.
SELECTED FINANCIAL DATA OF BANK UNITED
The following selected financial data for each of the years ended September
30, 1994 through 1998 are derived from the audited consolidated financial
statements of Bank United. The following selected financial data for the six
months ended March 31, 1999 and March 31, 1998 are derived from the unaudited
consolidated financial statements of Bank United and include, in the opinion of
the management of Bank United, all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the data of those periods.
The information that appears below is only a summary and should be read in
conjunction with the consolidated financial statements, the notes to those
financial statements and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" incorporated by reference into this
prospectus supplement.
In reading the following selected financial information for Bank United,
please note the following:
o During fiscal 1997, Bank United sold some of its mortgage origination
offices. In connection with this sale, the remaining offices were
restructured or closed. The mortgage origination branches shown at
March 31, 1999 and 1998 and September 30, 1998 and 1997 are wholesale
mortgage origination offices, which are currently part of the
Financial Markets Group. See "Sale of mortgage offices" and
"Restructuring charges" items in the Summary of Operations.
o In connection with its acquisition, Bank United issued to the Federal
Deposit Insurance Corporation, as manager of the Federal Savings and
Loan Insurance Corporation Resolution Trust Fund, a warrant to acquire
158,823 shares of common stock of Bank United. Payments in lieu of
dividends related to the warrant, which was redeemed in August 1996.
See "Payments in lieu of dividends" item in the Summary of
Operations.
o The extraordinary loss appearing under "Extraordinary loss -- early
extinguishment of debt" in the Summary of Operations represents costs
and charges associated with the repurchase and retirement of a
majority of the senior notes of Bank United.
o Effective October 1, 1997, Bank United adopted Statement of Financial
Accounting Standard ("SFAS") No. 128, "Earnings per share," which
establishes standards for computing and presenting earnings per share
("EPS"). It requires dual presentation of basic and diluted EPS for
entities with complex capital structures. All prior period EPS data
were restated to comply with SFAS No. 128, but are not materially
different. See "Earnings per common share" item in the Summary of
Operations.
o "Return on average assets" under Certain Ratios and Other Data is
net income without deduction of minority interest, divided by average
total assets.
o "Net operating expense ratio" under Certain Ratios and Other Data is
total non-interest expense, less total non-interest income, as a
percentage of average assets for each period.
o "Efficiency ratio" under Certain Ratios and Other Data is
non-interest expense excluding goodwill amortization, divided by net
interest income plus non-interest income, excluding the gain on the
sale of mortgage offices.
o Adjusting items under Certain Ratios and Other Data-Excluding
Adjusting Item are composed of the following for fiscal 1999, 1998,
1997, 1996 and 1994:
o 1999, decreased EPS $0.08: court of claims litigation expense
totaling $4.1 million, $2.6 million net of tax;
S-6
o 1998, increased EPS $0.76:
(1) two positive income tax adjustments totaling $33.5 million,
(2) an increase in the commercial loan allowance of $7.8
million, $4.9 million net of tax and
(3) provisions for the impact of higher prepayments on the
single family loan and servicing portfolios totaling
$6.7 million, $4.2 million net of tax;
o 1997, increased EPS $0.02:
(1) the gain on the sale of mortgage offices of $4.7 million, $2.9
million net of tax and
(2) an extraordinary loss on extinguishment of debt of $3.6
million, $2.3 million net of tax.
o 1996, increased EPS $2.05:
(1) a one-time SAIF assessment charge of $33.7 million, $20.7
million net of tax,
(2) compensation expense of $7.8 million, $4.8 million net of
tax,
(3) charges totaling $12.5 million, $7.7 million net of
tax, related to the restructuring of and items
associated with the mortgage origination business,
(4) a contractual payment to previous minority interests of
$5.9 million, and
(5) an income tax benefit of $101.7 million;
o 1994, increased EPS $1.90: an income tax benefit of $58.2 million.
AT SEPTEMBER 30,
AT MARCH 31, ---------------------------------------------------------
1999 1998 1997 1996 1995 1994
------------ ---------- ---------- ---------- ---------- ---------
(IN THOUSANDS)
SUMMARY OF FINANCIAL CONDITION
ASSETS
Cash and cash equivalents............... $ 237,251 $ 228,674 $ 121,000 $ 119,523 $ 112,931 $ 76,938
Securities purchased under
agreements to resell and federal
funds sold........................ 411,529 474,483 349,209 674,249 471,052 358,710
Securities and other investments.... 124,373 91,350 77,809 65,693 117,094 115,126
Mortgage-backed securities, net..... 1,168,958 932,058 1,569,705 1,657,908 2,398,263 2,828,903
Loans, net
Single family-held for
investment.................... 4,978,688 4,686,600 5,795,179 6,113,318 7,000,303 4,144,787
Single family-held for sale..... 1,571,433 2,149,009 697,410 256,656 406,563 253,310
Commercial...................... 4,480,710 3,472,579 2,201,880 981,001 735,876 546,794
Consumer........................ 576,777 495,556 300,760 168,513 117,498 101,283
Mortgage servicing rights........... 431,746 410,868 272,214 123,392 75,097 56,677
Other assets........................ 893,301 723,815 581,906 552,124 548,857 427,633
------------ ---------- ---------- ---------- ---------- ---------
Total assets.................... $14,874,766 $13,664,992 $11,967,072 $10,712,377 $11,983,534 $8,910,161
============ ========== ========== ========== ========== =========
LIABILITIES, MINORITY INTEREST AND
STOCKHOLDERS' EQUITY
Deposits............................ $6,605,548 $6,320,476 $5,247,668 $5,147,945 $5,182,220 $4,764,204
Federal Home Loan Bank advances..... 5,744,594 4,783,294 3,992,344 3,490,386 4,383,895 2,620,329
Securities sold under agreements to
repurchase and federal fund
purchased......................... 576,007 811,742 1,308,600 832,286 1,172,533 553,000
Notes payable....................... 368,715 219,720 220,199 115,000 115,000 115,000
Other liabilities................... 671,426 659,848 414,282 410,217 448,283 320,766
------------ ---------- ---------- ---------- ---------- ---------
Total liabilities............... 13,966,290 12,795,080 11,183,093 9,995,834 11,301,931 8,373,299
------------ ---------- ---------- ---------- ---------- ---------
Minority interest-Bank preferred
stock............................. 185,500 185,500 185,500 185,500 185,500 85,500
Stockholders' equity................ 722,976 684,412 598,479 531,043 496,103 451,362
------------ ---------- ---------- ---------- ---------- ---------
Total liabilities, minority
interest and stockholders'
equity........................ $14,874,766 $13,664,992 $11,967,072 $10,712,377 $11,983,534 $8,910,161
============ ========== ========== ========== ========== =========
S-7
AT OR FOR THE
SIX MONTHS
ENDED MARCH 31, AT OR FOR THE YEAR ENDED SEPTEMBER 30,
-------------------- -----------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
--------- --------- --------- --------- --------- --------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
SUMMARY OF OPERATIONS
Interest income...................... $ 478,775 $ 442,581 $ 898,746 $ 810,708 $ 812,312 $ 746,759 $ 494,706
Interest expense..................... 319,172 303,179 612,665 546,064 584,778 552,760 320,924
--------- --------- --------- --------- --------- --------- ---------
Net interest income................ 159,603 139,402 286,081 264,644 227,534 193,999 173,782
Provisions for credit losses......... 12,384 14,963 20,123 18,107 16,469 24,293 6,997
--------- --------- --------- --------- --------- --------- ---------
Net interest income after
provision for credit losses.... 147,219 124,439 265,958 246,537 211,065 169,706 166,785
Non-interest income
Net gains (losses)
Sales of single family servicing
rights and single family
loans.......................... 13,175 2,541 11,124 21,182 43,074 60,495 63,286
Securities and mortgage-backed
securities..................... 785 1,801 2,761 2,841 4,002 26 10,404
Other loans...................... 1,027 376 651 1,128 3,189 (1,210) 163
Sale of mortgage offices......... -- -- -- 4,748 -- -- --
Loan servicing, net of related
amortization..................... 27,598 13,459 35,975 32,381 30,383 32,677 26,813
Other.............................. 18,711 13,280 30,426 21,152 15,541 12,162 13,295
--------- --------- --------- --------- --------- --------- ---------
Total non-interest income.......... 61,296 31,457 80,937 83,432 96,189 104,150 113,961
--------- --------- --------- --------- --------- --------- ---------
Non-interest expense
Compensation and benefits.......... 47,125 39,625 86,725 75,016 87,640 83,520 86,504
SAIF deposit insurance premiums.... 2,010 1,927 4,160 4,797 45,690 11,428 11,329
Court of Claims litigation......... 4,077 900 1,800 -- -- -- --
Restructuring charges.............. -- -- -- -- 10,681 -- --
Other.............................. 56,326 45,795 95,857 92,323 95,407 88,797 96,832
--------- --------- --------- --------- --------- --------- ---------
Total non-interest expense......... 109,538 88,247 188,542 172,136 239,418 183,745 194,665
--------- --------- --------- --------- --------- --------- ---------
Income before income taxes,
minority interest, and
extraordinary loss............... 98,977 67,649 158,353 157,833 67,836 90,111 86,081
Income tax expense (benefit)......... 37,365 (8,209) 25,722 60,686 (75,765) 37,415 (31,899)
--------- --------- --------- --------- --------- --------- ---------
Income before minority interest and
extraordinary loss............... 61,612 75,858 132,631 97,147 143,601 52,696 117,980
Minority interest
Bank preferred stock dividends..... 9,126 9,126 18,253 18,253 18,253 10,600 8,653
Payments in lieu of dividends...... -- -- -- -- 6,413 377 357
--------- --------- --------- --------- --------- --------- ---------
Income before extraordinary loss... 52,486 66,732 114,378 78,894 118,935 41,719 108,970
Extraordinary loss -- early
extinguishment of debt............. -- -- -- 2,323 -- -- --
--------- --------- --------- --------- --------- --------- ---------
Net income......................... $ 52,486 $ 66,732 $ 114,378 $ 76,571 $ 118,935 $ 41,719 $ 108,970
========= ========= ========= ========= ========= ========= =========
Net income applicable to diluted
earnings per common share........ $ 52,486 $ 66,732 $ 114,378 $ 76,571 $ 113,327 $ 38,824 $ 102,519
========= ========= ========= ========= ========= ========= =========
Earnings per common share
Basic.............................. $ 1.66 $ 2.11 $ 3.62 $ 2.42 $ 4.06 $ 1.45 $ 13.78
Diluted............................ 1.63 2.06 3.54 2.40 3.87 1.35 3.55
CERTAIN RATIOS AND OTHER DATA
Book value per common share.......... $ 22.91 $ 20.67 $ 21.67 $ 18.94 $ 16.81 $ 17.19 $ 15.64
Dividends per common share........... 0.32 0.32 0.64 0.56 3.16 -- --
Average common shares outstanding.... 31,565 31,596 31,595 31,596 29,260 28,863 28,863
Average common shares and potential
dilutive common
shares............................. 32,172 32,316 32,337 31,881 29,287 28,863 28,863
S-8
AT OR FOR THE
SIX MONTHS
ENDED MARCH 31, AT OR FOR THE YEAR ENDED SEPTEMBER 30,
---------------------- ---------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ---------- ---------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
CERTAIN RATIOS AND OTHER
DATA -- CONTINUED
Regulatory capital ratios of Bank
United Tangible capital.......... 6.73% 7.02% 6.75% 7.72% 6.57% 6.20% 6.01%
Core capital....................... 6.75% 7.06% 6.77% 7.77% 6.64% 6.29% 6.17%
Total risk-based capital........... 11.92% 11.59% 10.48% 13.18% 13.09% 13.45% 14.02%
Return on average assets............. 0.86% 1.23% 1.04% 0.85% 1.28% 0.50% 1.42%
Return on average common equity...... 14.91% 21.68% 17.78% 13.50% 23.06% 8.80% 26.32%
Stockholders' equity to assets....... 4.86% 4.98% 5.01% 5.00% 4.96% 4.14% 5.07%
Tangible stockholders' equity to
tangible assets.................... 4.30% 4.52% 4.59% 4.89% 4.81% 3.93% 4.68%
Net yield on interest-earning
assets........................... 2.41% 2.42% 2.42% 2.52% 2.10% 1.92% 2.20%
Interest rate spread................. 2.23% 2.20% 2.21% 2.26% 1.78% 1.61% 1.95%
Average interest-earning assets to
average interest-bearing
liabilities........................ 1.03 1.04 1.04 1.05 1.06 1.06 1.06
Single family servicing portfolio.... $27,303,981 $23,887,887 $27,935,300 $24,518,396 $13,246,848 $12,532,472 $8,920,760
Fundings:
Single family...................... 2,399,057 1,959,019 3,789,389 2,188,273 3,602,009 3,226,324 5,424,550
Commercial......................... 2,040,570 1,219,141 2,876,328 1,492,931 891,306 547,117 364,604
Consumer........................... 142,620 180,030 367,097 152,665 125,596 99,249 94,153
---------- ---------- ---------- ---------- ---------- ---------- ---------
Total fundings....................... 4,582,247 3,358,190 7,032,814 3,833,869 4,618,911 3,872,690 5,883,307
---------- ---------- ---------- ---------- ---------- ---------- ---------
Loans purchased for held to maturity
portfolio.......................... 1,021,884 183,509 1,158,270 1,086,249 148,510 2,658,093 1,406,275
Non-interest expense to average total
assets............................. 1.53% 1.43% 1.48% 1.55% 2.13% 1.76% 2.35%
Net operating expense ratio.......... 0.67 0.92 0.84 0.80 1.28 0.76 0.97
Efficiency ratio..................... 48.36 50.39 49.88 49.20 72.23 58.26 63.36
Nonperforming assets to total
assets............................. 0.62 0.63 0.59 0.63 1.12 0.84 1.09
Net nonaccrual loans to total
loans.............................. 0.54 0.62 0.57 0.60 1.19 0.91 1.51
Allowance for credit losses to net
nonaccrual loans................... 93.34 71.44 75.91 72.61 44.24 48.74 30.73
Allowance for credit losses to
nonperforming assets............... 64.06 54.76 57.84 52.24 32.95 36.65 24.18
Allowance for credit losses to total
loans.............................. 0.50 0.44 0.44 0.43 0.52 0.44 0.46
Net loan charge-offs to average
loans.............................. 0.06 0.20 0.13 0.23 0.17 0.16 0.30
Full-time equivalent employees....... 2,234 1,689 1,927 1,541 2,310 2,663 2,894
Number of community banking
branches........................... 94 80 84 71 70 65 62
Number of commercial banking
origination offices................ 19 15 19 11 9 9 5
Number of mortgage origination
offices............................ 9 6 8 6 85 122 145
AT OR FOR THE
SIX MONTHS
ENDED MARCH 31, AT OR FOR THE YEAR ENDED SEPTEMBER 30,
---------------------- ---------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ---------- ---------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
CERTAIN RATIOS AND OTHER
DATA-EXCLUDING ADJUSTING ITEM
Net income........................... $ 55,036 $ 42,298 $ 89,944 $ 75,970 $ 56,392 $ 41,719 $ 50,804
Net income applicable to diluted
earnings per common shares......... 55,036 42,298 89,944 75,970 53,295 38,824 47,585
Earnings per diluted share........... 1.71 1.31 2.78 2.38 1.82 1.35 1.65
Return on average assets............. 0.89% 0.83% 0.85% 0.85% 0.67% 0.50% 0.72%
Return on average common equity...... 15.61 13.82 14.28 13.41 11.47 8.80 12.27
Efficiency ratio..................... 46.52 48.48 48.98 49.20 55.80 58.26 63.36
S-9
USE OF PROCEEDS
The net proceeds to be received by us from the sale of the preferred stock,
after deducting the underwriting discounts and estimated fees and expenses, will
be approximately $ million, or approximately $ million if the
underwriter's over-allotment option is exercised in full. See "Underwriting"
starting on page S-15. We intend to use the net proceeds for general corporate
purposes.
CAPITALIZATION
The following table shows the capitalization of Bank United as of March 31,
1999 and as adjusted to reflect (1) the issuance of the shares of preferred
stock offered hereby and (2) the concurrent offering of the Corporate PIES. In
addition to the long-term debt of Bank United reflected below at March 31, 1999,
our bank subsidiary had long-term borrowings consisting of deposits, FHLB
advances, and certain other funding liabilities incurred in the ordinary course
of business.
AT MARCH 31, 1999
-----------------------------
HISTORICAL AS ADJUSTED
----------- ------------
(DOLLARS IN THOUSANDS)
Long-term debt(1).................... $ 368,715 $ 368,715
Redeemable preferred stock........... -- 200,000
Minority Interest -- Preferred Stock
of the bank subsidiary(2).......... 185,500 185,500
Stockholders' equity:
Preferred stock(3).............. -- --
Common stock.................... 316 316
Paid-in capital................. 129,343 126,643
Retained earnings............... 599,088 599,088
Accumulated other comprehensive
income -- unrealized gains
(losses) on securities
available for sale, net of
tax........................... (4,708) (4,708)
Treasury stock, at cost......... (1,063) (1,063)
----------- ------------
Total stockholders' equity...... 722,976 720,276
----------- ------------
Total consolidated
capitalization..... $ 1,277,191 $ 1,474,491
=========== ============
Ratio of equity to assets............ 4.86% 4.84%
Ratio of tangible equity to tangible
assets............................. 4.30% 4.28%
Total shares of common stock
outstanding........................ 31,562,896 31,562,896
Book value per common share.......... 22.91 22.82
Tangible book value per share........ 20.15 20.06
- ------------
(1) Excludes FHLB advances with maturities greater than one year of $2,330,345
at March 31, 1999 and as adjusted.
(2) Minority interest consists of $185.5 million stated value of the preferred
stock of the bank subsidiary.
(3) Bank United had 10,000,000 shares of preferred stock authorized, none of
which were issued as of March 31, 1999.
S-10
DESCRIPTION OF THE PREFERRED STOCK
THE FOLLOWING SECTION DESCRIBES CERTAIN TERMS OF THE PREFERRED STOCK. IT
SUPPLEMENTS THE DESCRIPTION OF THE PREFERRED STOCK IN THE ACCOMPANYING
PROSPECTUS AND, TO THE EXTENT INCONSISTENT WITH THE PROSPECTUS, REPLACES THE
DESCRIPTION IN THE PROSPECTUS. THE FOLLOWING DESCRIPTION CONTAINS A DESCRIPTION
OF ALL MATERIAL TERMS OF THE PREFERRED STOCK, BUT DOES NOT PURPORT TO BE
COMPLETE AND IS SUBJECT TO AND QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
CERTIFICATE OF DESIGNATIONS RELATING TO THE PREFERRED STOCK. A FORM OF THE
CERTIFICATE OF DESIGNATIONS HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION AS AN EXHIBIT TO THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS ARE A PART.
GENERAL
The preferred stock will rank senior to our common stock with respect to
the payment of dividends and upon liquidation, dissolution or winding up of Bank
United.
The preferred stock will not be convertible into shares of common stock or
any other class or series of our capital stock and will not be subject to any
sinking fund or other obligation for its repurchase or retirement.
The registrar, transfer agent and disbursing agent for the preferred stock
is The Bank of New York.
DIVIDENDS
Holders of shares of the preferred stock will be entitled to receive, when
and as declared by our board of directors out of assets of Bank United legally
available for payment, cash dividends at the annual rate of % through the
dividend payment date on February , 2000 and thereafter at the annual rate of
%. Dividends on the preferred stock will be payable quarterly on February
, May , August and November of each year, commencing November , 1999,
at such annual rates.
Each such dividend will be payable to the holders of record as they appear
on the stock register on such record dates, not exceeding 45 days preceding the
relevant payment date, as shall be fixed by our board of directors. Dividends
will be cumulative from the date of issue. Dividends payable on the preferred
stock for any period greater or less than a full dividend period shall be
computed on the basis of twelve 30-day months, a 360-day year and the actual
number of days elapsed in the period. Dividends payable on the preferred stock
for each full dividend period shall be computed by annualizing the dividend rate
and dividing by four. The initial dividend on the preferred stock, which will be
for the period from August , 1999 to November , 1999, will be approximately
$ per share of preferred stock and will be payable on November , 1999.
Through a subsidiary, we own all the outstanding common stock of our bank
subsidiary. As a holding company without significant assets other than our
indirect ownership of all the common stock of our bank subsidiary, our ability
to meet our cash obligations, including debt service, is dependent upon the
payment of dividends by our bank subsidiary on its common stock. The declaration
of dividends by the bank subsidiary is subject to the discretion of the board of
directors of the bank subsidiary, the terms of the outstanding preferred stock
of the bank subsidiary and applicable regulatory requirements. While it is the
present intention of the board of directors of the bank subsidiary to declare
dividends in an amount sufficient to provide us with the cash flow necessary to
meet our obligations, including dividends and mandatory redemption payments on
the preferred stock, we cannot assure you that circumstances which would limit
or preclude the declaration of dividends by the bank subsidiary on its common
stock will not exist in the future.
ADDITIONAL AMOUNTS
In the unlikely event that any distributions on the preferred stock with
respect to any fiscal year are not eligible for the dividends-received deduction
under the Internal Revenue Code of 1986, as amended, solely because the
preferred stock is treated as indebtedness pursuant to a final
S-11
determination within the meaning of Section 1313(a) of the Internal Revenue Code
to which we or any U.S. corporate holder are parties ("Applicable
Distributions"), we will, within 45 days after our receipt of the
determination, provide notice thereof to the transfer agent. The transfer agent
will mail a copy of such notice to each U.S. corporate investor who received an
Applicable Distribution during such fiscal year at the address specified in the
records of the transfer agent as promptly as practicable after its receipt of
such notice from us. We will, within 15 days after such notice is given to the
transfer agent, pay to the transfer agent, out of funds legally available for
such payment, an amount equal to the aggregate Additional Amounts (as defined
below) with respect to all Applicable Distributions during such fiscal year.
Upon receipt of the aggregate Additional Amounts, the transfer agent will
distribute to each investor that certifies to the transfer agent, on a form
provided for that purpose, that it is (or was) otherwise qualified to receive
the dividends-received deduction under all relevant sections of the Internal
Revenue Code, the Additional Amount to which that investor is entitled with
respect to each Applicable Distribution received by the investor during the
fiscal year. Any portion of the aggregate Additional Amounts not distributed by
the transfer agent will be returned to us within 90 days of the transfer agent's
receipt of those amounts.
"Additional Amount(s)" means payment with respect to an Applicable
Distribution of an amount which, when taken together with such Applicable
Distribution, would cause the net yield in dollars, after federal income tax
consequences, from the aggregate of both the Applicable Distributions and the
Additional Amount, to be equal to the net yield in dollars after federal income
tax consequences that would have been realized by the investor if the amount of
the aggregate Applicable Distributions had been treated as a dividend, giving
effect to the dividends-received deduction, for federal income tax purposes. The
Additional Amount will be calculated with consideration given to the time value
of money, applying the corporate underpayment rate as defined in Section
6621(a)(2) of the Internal Revenue Code as the interest factor, assuming the
Additional Amount is subject to tax as ordinary income, and using the maximum
marginal corporate federal tax rate applicable to ordinary income.
REDEMPTION
Shares of the preferred stock will not be redeemable prior to February ,
2000. On or after such date, the shares of preferred stock will be redeemable at
our option, in whole or in part, at any time or from time to time on not less
than 30 or more than 60 days notice by mail, at a redemption price equal to 100%
of the liquidation preference, plus accrued and upaid dividends to the date of
redemption.
We will be required to redeem the preferred stock, in whole and not in
part, on August , 2004, at a redemption price equal to 100% of its liquidation
preference plus accrued and unpaid dividends to the date of redemption.
RIGHTS UPON LIQUIDATION
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of Bank United, the holders of the preferred stock at the time
outstanding will be entitled to receive out of the assets of Bank United
available for distribution to stockholders, before any distribution of assets is
made to the holders of common stock or any other class of stock ranking junior
to the preferred stock upon liquidation, dissolution or winding up, liquidating
distributions in the amount of $50 per share, plus an amount equal to accrued
and unpaid dividends for the then-current dividend period and all dividend
periods prior thereto.
VOTING RIGHTS
Each share of preferred stock will have the right to vote in connection
with matters submitted generally to the holders of the common stock of Bank
United, voting together as a single class with shares of the common stock and
other capital stock of Bank United entitled to vote in respect of matters
submitted to stockholders generally. Each share of preferred stock will have
0.10 vote for this purpose. Based on the number of shares of common stock of
Bank United outstanding as of the date
S-12
of this prospectus supplement and assuming that all shares offered hereby are
issued and outstanding, the shares of preferred stock would represent, in the
aggregate, approximately % of the combined voting power of the shares of
preferred stock and the common stock.
Whenever dividends on shares of the preferred stock have not been paid in
an aggregate amount equal to at least six quarterly dividends on those shares,
whether or not consecutive, the holders of the preferred stock, voting
separately as a class with the holders of any stock ranking equally as to
dividends with the preferred stock on which similar voting rights have been
conferred and are exercisable, will be entitled to elect two directors to our
board of directors either by written consent or at an annual or special meeting
of our stockholders held during the period those dividends remain in arrears.
These voting rights will terminate when all those dividends accrued and in
default have been paid in full or declared and funds for their payment in full
have been set apart. At that time, the term of office of all directors so
elected will also terminate.
In addition, the affirmative vote or consent of the holders of at least
two-thirds of the outstanding shares of preferred stock, voting as a separate
class, will be required for any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any provisions of our certificate of
incorporation that adversely affect the powers, preferences, privileges or
rights of the holders of the preferred stock. The affirmative vote or consent of
the holders of shares representing at least two-thirds of the combined voting
power of the preferred stock and any other series of preferred stock of Bank
United ranking on a parity with the preferred stock as to dividends or upon
liquidation, voting as a single class without regard to series, will be required
to authorize or effect (1) the creation, authorization or issuance of, (2) the
reclassification of any authorized stock of Bank United into or (3) the
creation, authorization or issuance of any obligation or security convertible
into or evidencing the right to purchase, any additional class or series of
stock ranking prior to the preferred stock as to dividends or upon liquidation,
dissolution or winding up of Bank United.
Except as described above in this section on voting rights, as described in
the accompanying prospectus or as required by law, the preferred stock will have
no other voting rights.
BOOK-ENTRY ISSUANCE
The preferred stock will be issued as one or more global certificates
registered in the name of The Depository Trust Company ("DTC") or its nominee.
The depositary for the preferred stock will be DTC. The preferred stock will be
issued in accordance with the procedures described under "Book-Entry Procedures
and Settlement" below.
BOOK-ENTRY PROCEDURES AND SETTLEMENT
Upon issuance, all book-entry securities will be represented by one or more
fully registered global securities, without coupons. Each global security will
be deposited with, or on behalf of, DTC, a securities depository, and will be
registered in the name of DTC or a nominee of DTC. DTC will thus be the only
registered holder of these securities.
Purchasers of securities may only hold interests in the global notes
through DTC if they are participants in the DTC system. Purchasers may also hold
interests through a securities intermediary -- banks, brokerage houses and other
institutions that maintain securities accounts for customers -- that has an
account with DTC or its nominee. DTC will maintain accounts showing the security
holdings of its participants, and these participants will in turn maintain
accounts showing the security holdings of their customers. Some of these
customers may themselves be securities intermediaries holding securities for
their customers. Thus, each beneficial owner of a book-entry security will hold
that security indirectly through a hierarchy of intermediaries, with DTC at the
"top" and the beneficial owner's own securities intermediary at the
"bottom."
The securities of each beneficial owner of a book-entry security will be
evidenced solely by entries on the books of the beneficial owner's securities
intermediary. The actual purchaser of the securities will generally not be
entitled to have the securities represented by the global securities
S-13
registered in its name and will not be considered the owner under Bank United's
charter or bylaws. In most cases, a beneficial owner will also not be able to
obtain a paper certificate evidencing the holder's ownership of securities. The
book-entry system for holding securities eliminates the need for physical
movement of certificates and is the system through which most publicly traded
stock is held in the United States. However, the laws of some jurisdictions
require some purchasers of securities to take physical delivery of their
securities in definitive form. These laws may impair the ability of a beneficial
owner to transfer book-entry securities.
A beneficial owner of book-entry securities represented by a global
security may exchange the securities for definitive (paper) securities only if:
o DTC is unwilling or unable to continue as depositary for such global
security and Bank United does not appoint a qualified replacement for
DTC within 90 days; or
o Bank United in its sole discretion decides to allow some or all
book-entry securities to be exchangeable for definitive securities in
registered form.
Any global security that is so exchanged will be exchanged in whole for
definitive securities in registered form, with the same terms and of an equal
aggregate liquidation preference. Definitive securities will be registered in
the name or names of the person or persons specified by DTC in a written
instruction to the registrar of the securities. DTC may base its written
instruction upon directions that it receives from its participants.
In this prospectus supplement and the related prospectus, references to
actions taken by security holders will mean actions taken by DTC upon
instructions from its participants, and references to payments and notices of
redemption to security holders will mean payments and notices of redemption to
DTC as the registered holder of the securities for distribution to participants
in accordance with DTC's procedures.
DTC is a limited purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered under section 17A of the Securities Exchange Act
of 1934. The rules applicable to DTC and its participants are on file with the
SEC.
DTC's management is aware that some computer applications, systems, and the
like for processing dates that are dependent upon calendar dates, including
dates before, on, and after January 1, 2000, may encounter "Year 2000
problems." DTC has informed its participants and other members of the financial
community that it has developed and is implementing a program so that its
systems, as they relate to the timely payment of distributions to
securityholders, book-entry deliveries, and settlement of trades within DTC,
continue to function appropriately. This program includes a technical assessment
and a remediation plan, each of which is complete. Additionally, DTC's plan
includes a testing phase, which is expected to be completed within appropriate
time frames.
Bank United will not have any responsibility or liability for any aspect of
the records relating to, or payments made on account of, beneficial ownership
interests in the book-entry securities or for maintaining, supervising or
reviewing any records relating to beneficial ownership interests.
DTC may discontinue providing its services as securities depositary at any
time by giving reasonable notice. Under such circumstances, in the event that a
successor securities depositary is not appointed, securities certificates are
required to be printed and delivered. Additionally, Bank United may decide to
discontinue use of the system of book-entry transfers through DTC or any
successor depositary with respect to the preferred securities. In that event,
certificates for the securities will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that Bank United believes to be reliable, but
Bank United does not take responsibility for the accuracy thereof.
S-14
UNDERWRITING
We have entered into an underwriting agreement with Lehman Brothers,
pursuant to which, and subject to its terms and conditions, we have agreed to
sell to Lehman Brothers and Lehman Brothers has agreed to purchase from us all
the offered shares of preferred stock.
The underwriting agreement provides that the obligation of Lehman Brothers
to purchase the preferred stock is subject to the satisfaction of certain
conditions, including the approval of certain legal matters by its counsel.
Subject to the terms and conditions of the underwriting agreement, Lehman
Brothers must purchase all of the shares of preferred stock offered hereby if it
purchases any of them.
Lehman Brothers has advised us that it will offer the preferred stock
directly to the public initially at the offering price and to certain dealers at
the offering price shown on the cover page of this prospectus supplement less a
selling concession not to exceed $ per share of preferred stock. Lehman
Brothers may allow and these dealers may reallow a concession not to exceed
$ per share of preferred stock to other dealers. After the initial offering
of the preferred stock, Lehman Brothers may change the public offering price,
the concession to selected dealers and the reallowance to other dealers.
The following table shows the underwriting discount that we will pay to
Lehman Brothers in connection with this offering. The amounts below represent
the underwriting discount assuming both exercise and no exercise of the option
of Lehman Brothers to purchase an additional shares of preferred stock to
cover over-allotments.
WITHOUT OVER-ALLOTMENT WITH OVER-ALLOTMENT
---------------------- -------------------
Per Share of Preferred Stock............ $ $
Total................................... $ $
We estimate that our expenses in connection with the offering of the
preferred stock will be approximately $ .
We have granted to Lehman Brothers an option to purchase an aggregate of up
to an additional shares of preferred stock solely to cover
over-allotments, at the initial offering price to the public. Any or all of the
option may be exercised at any time on or before 30 days after the date of the
underwriting agreement. To the extent that the option is exercised, Lehman
Brothers will be committed, subject to certain conditions, to purchase up to
that number of additional shares of preferred stock.
We have agreed to indemnify Lehman Brothers against certain liabilities,
including liabilities under the Securities Act, and to contribute to payments
which Lehman Brothers would be required to make regarding any liabilities that
it may have under the Securities Act.
There is no established trading market for the preferred stock. The
preferred stock will not be listed on any securities exchange or quoted on any
quotation system. Lehman Brothers has advised us that it presently intends to
make a market in the preferred stock as permitted by applicable laws and
regulations. Lehman Brothers is not obligated to make a market in the preferred
stock, however, and it may discontinue this market making at any time in its
sole discretion. Accordingly, we cannot assure investors that there will be
adequate liquidity or adequate trading markets for the preferred stock.
In connection with the offering of the preferred stock, Lehman Brothers may
engage in certain transactions that stabilize the price of the preferred stock.
These transactions may consist of bids or purchases for the purpose of pegging,
fixing or maintaining the price of the preferred stock. If Lehman Brothers
creates a short position in the preferred stock in connection with this
offering, by selling more shares of preferred stock than are listed on the cover
page of this prospectus supplement, then Lehman Brothers may reduce that short
position by purchasing preferred stock in the open market. In general, the
purchase of a security for the purpose of stabilization or reducing a short
S-15
position could cause the price of that security to be higher than it might
otherwise be in the absence of those purchases.
Neither we nor Lehman Brothers makes any representation or prediction as to
the direction or magnitude of any effect that the transactions described above
may have on the price of the preferred stock. In addition, neither we nor Lehman
Brothers makes any representation that anyone will engage in these transactions
or that these transactions, once they have begun, will not be discontinued
without notice.
Lehman Brothers has, directly and indirectly, provided investment and
commercial banking or financial advisory services to us and our affiliates, for
which it has received customary fees and commissions, and expects to provide
these services to us and our affiliates in the future, for which it expects to
receive customary fees and commissions.
Certain wholly owned subsidiaries of Lehman Brothers Inc. own an aggregate
of 1,529,557 shares of common stock of Bank United, which represents 5.4% of the
outstanding common stock.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following summary of certain of the United States federal income tax
consequences of the ownership of the preferred stock is for discussion purposes
only. It is based upon laws, regulations, rulings and decisions in effect, all
of which are subject to changes in application or interpretation that could
apply retroactively, resulting in U.S. federal income tax consequences different
from those discussed below. This summary deals only with preferred stock held as
capital assets and does not purport to deal with persons in special tax
situations, such as financial institutions, insurance companies, tax-exempt
entities, regulated investment companies, dealers in securities or currencies,
non-resident alien individuals, foreign corporations, foreign partnerships or
foreign estates or trusts, persons holding preferred stock as a hedge against
currency risk or as a position in a "straddle" for tax purposes, persons whose
functional currency is not the United States dollar, or persons subject to the
alternative minimum tax. This summary also does not address holders other than
original purchasers or the consequences of any laws other than those pertaining
to the U.S. federal income tax. Persons considering purchasing the preferred
stock should consult their own tax advisors concerning the application of United
States federal income tax laws to their particular situations as well as any
consequences of the purchase, ownership, and disposition of the preferred stock
under the laws of any other taxing jurisdiction.
We expect all distributions declared and paid by us on shares of preferred
stock:
o to be treated as dividends for federal income tax purposes to the
extent paid out of our current or accumulated earnings and profits, as
determined for federal income tax purposes, and
o to be eligible for the 70% dividends received deduction allowed to
qualifying U.S. corporate shareholders.
We expect to have sufficient earnings and profits to enable all
distributions on the preferred stock to qualify as dividends for federal income
tax purposes. We cannot assure prospective holders that we will have sufficient
current earnings and profits for all distributions on the preferred stock,
however, as our expectation is based in part on assumptions as to various
factors that are beyond our control. Although we expect that the preferred stock
will be treated as preferred stock for U.S. federal income tax purposes, it is
possible that it could be treated as indebtedness. In the unlikely event that it
were so treated, with the effect that recipients of distributions from us were
not eligible to receive the dividends-received deduction, an Additional Amount
would be payable by us in accordance with "Description of the Preferred
Stock -- Additional Amounts" above, and the tax consequences of income received
on the preferred stock could differ from those described in this section.
Prospective investors in shares of the preferred stock should consider the
effect of section 246A of the Internal Revenue Code, which reduces the
dividends-received deduction allowed to a corporate
S-16
shareholder that has incurred indebtedness that is "directly attributable" to
an investment in portfolio stock. Prospective investors should also consider the
effect of section 246(c) of the Internal Revenue Code, which among other things,
disallows the dividends-received deduction in respect of any dividend on a share
of stock that has been held for 45 days or less during the 90-day period
beginning on the date that is 45 days before the date on which such share
becomes ex-dividend with respect to such dividend. Any period will not be
counted toward the 45-day holding period if during that period the holder has an
option to sell, is under a contractual obligation to sell, has made (and not
closed) a short sale of, or has granted certain options to buy, substantially
identical stock or securities, or holds one or more other positions in
substantially similar or related property that diminish the risk of loss from
holding preferred stock. Prospective investors should also consider the effect
of section 1059 of the Internal Revenue Code, which reduces a shareholder's
basis in stock upon the receipt of an extraordinary dividend and in certain
other circumstances that could apply if we failed to pay dividends currently on
the preferred stock or the preferred stock were considered to have been issued
with an issue price in excess of its liquidation rights or stated redemption
price, which we believe is not the case.
In the past, legislation has been proposed that would have reduced the
dividends received deduction applicable to certain preferred stock. There can be
no assurance that similar legislation will not be enacted in the future or that
other legislation will not be enacted that would reduce the dividends-received
deduction available to corporate holders of the preferred stock.
Because the availability of the dividends-received deduction may be
affected by the particular circumstances of each U.S. corporate holder of the
stock, prospective U.S. corporate investors are encouraged to consult their tax
advisors.
LEGAL MATTERS
The validity of the preferred stock which is being offered will be passed
upon for us by Wachtell, Lipton, Rosen & Katz, New York, New York. Certain legal
matters will be passed upon for Lehman Brothers by Simpson Thacher & Bartlett,
New York, New York.
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this prospectus supplement by reference from Bank United Corp.'s
Annual Report on Form 10-K for the year ended September 30, 1998 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated by reference in this prospectus supplement, and
have been so incorporated in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information for the periods
ended December 31, 1998 and March 31, 1999 which are incorporated in this
prospectus supplement by reference, Deloitte & Touche have applied limited
procedures in accordance with professional standards for a review of such
information. However, as stated in their report included in Bank United Corp.'s
Quarterly Report on Form 10-Q they did not audit and they do not express an
opinion on that interim financial information. Accordingly, the degree of
reliance on their reports on such information should be restricted in light of
the limited nature of the review procedures applied. Deloitte & Touche are not
subject to the liability provisions of Section 11 of the Securities Act of 1933
for their reports on the unaudited interim financial information because those
reports are not "reports" or a "part" of the registration statement prepared
or certified by an accountant within the meaning of Sections 7 and 11 of the
Securities Act.
S-17
================================================================================
2,000,000 SHARES
SERIES A PREFERRED STOCK
BANK UNITED CORP.
---------------------------
PROSPECTUS SUPPLEMENT
, 1999
---------------------------
LEHMAN BROTHERS
================================================================================
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE, AND IT MAY CHANGE. THIS
PROSPECTUS IS INCLUDED IN A REGISTRATION STATEMENT THAT WE FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. NEITHER WE NOR THE SELLING STOCKHOLDERS CAN
SELL THESE SECURITIES UNTIL THAT REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES OR THE SOLICITATION OF AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JULY 27, 1999
PROSPECTUS
BANK
UNITED CORP.
----------------------------------------------
BANK UNITED CAPITAL TRUST
----------------------------------------------
$830,000,000
PREFERRED STOCK
CLASS A COMMON STOCK
DEPOSITARY SHARES
JUNIOR SUBORDINATED DEBT SECURITIES
GUARANTEE
STOCK PURCHASE CONTRACTS
STOCK PURCHASE UNITS
of Bank United Corp.
TRUST PREFERRED SECURITIES
of Bank United Capital Trust
INVESTING IN THE OFFERED SECURITIES INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 1.
Our Class A common stock is traded on the Nasdaq under the symbol "BNKU". On
July 26, 1999, the last reported sale price of our Class A common stock on the
Nasdaq was $37.00 per share. We urge prospective purchasers of the Class A
common stock to obtain current information as to market prices of the Class A
common stock.
We may use this prospectus to sell Class A common stock, preferred stock,
depositary shares, junior subordinated debt securities, guarantees, stock
purchase contracts or stock purchase units. We may also use this prospectus for
Bank United Capital Trust to sell trust preferred securities or for selling
stockholders to sell Class A common stock.
WE WILL PROVIDE SPECIFIC TERMS OF THESE SECURITIES IN SUPPLEMENTS TO
THIS PROSPECTUS. YOU SHOULD READ THIS PROSPECTUS AND ANY SUPPLEMENTS
CAREFULLY BEFORE YOU INVEST.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THIS PROSPECTUS MAY NOT BE USED TO SELL SECURITIES UNLESS ACCOMPANIED BY A
PROSPECTUS SUPPLEMENT.
THESE SECURITIES ARE NOT OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
------------------------
JULY , 1999
TABLE OF CONTENTS
PAGE
----
Risk Factors ............................................................ 1
Use of Proceeds ......................................................... 4
Ratios of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges
and Preferred Dividends ............................................... 4
Bank United Corp. ....................................................... 5
Bank United Capital Trust ............................................... 6
Description of Offered Securities ....................................... 8
Relationship Among the Trust Preferred Securities, the Trust Preferred
Securities Guarantee and the Junior Subordinated Notes Held by Bank
United Capital Trust .................................................. 33
Selling Stockholders .................................................... 34
Plan of Distribution .................................................... 35
Legal Matters ........................................................... 36
Experts ................................................................. 36
Forward-Looking Information ............................................. 36
About this Prospectus ................................................... 37
Where You Can Find More Information ..................................... 38
RISK FACTORS
An investment in any of the securities offered by this prospectus involves
certain risks. Before you decide to purchase any of these securities, you should
carefully consider the following risk factors, in addition to the other
information included in this prospectus and the applicable prospectus
supplement, before making an investment decision.
HOLDERS OF SHARES OF OUR COMMON STOCK COULD EXPERIENCE DILUTION.
We issued 31,595,596 shares in our IPO in August 1996. Since that time, we
have repurchased 34,200 shares and issued 142,250 shares, so that we currently
have 31,703,646 shares of common stock outstanding. Of the 31,595,596 shares
issued in our IPO, 12,075,000 were registered under the Securities Act of 1933
and sold to the public in the IPO, and 19,520,596 were subject to contractual
restrictions on sale which expired or expire at various times. We agreed to use
our best efforts to register these 19,520,596 shares under the Securities Act
and to maintain the effectiveness of these registrations for a specified period.
The restrictions on 11,314,818 shares expired prior to March 31, 1999, and the
contractual restrictions on the sale of 7,887,436 of the remaining 8,205,778
shares were terminated on June 4, 1999 and the restrictions on the remaining
318,342 shares will terminate on July 28, 1999.
OUR OBLIGATIONS UNDER THE TRUST PREFERRED SECURITIES GUARANTEE AND THE JUNIOR
SUBORDINATED DEBT SECURITIES ARE SUBORDINATED.
Our obligations under the trust preferred securities guarantee and under
the junior subordinated debt securities will rank junior in priority of payment
to all our senior indebtedness. This means that we cannot make any payments on
the trust preferred securities guarantee or the junior subordinated debt
securities if we default on a payment of senior indebtedness and do not cure the
default within the applicable grace period, or if the senior indebtedness
becomes immediately due because of a default and has not yet been paid in full.
In addition, our obligations under the trust preferred securities guarantee and
under the junior subordinated debt securities will rank junior to all existing
and future liabilities of our subsidiaries.
We cannot make any payments on the trust preferred securities guarantee if
we default on a payment on any of our other debt. In addition, in the event of
our bankruptcy, liquidation or dissolution, our assets would be available to pay
obligations under the trust preferred securities guarantee only after we have
made all payments on our other liabilities.
Neither the trust preferred securities of Bank United Capital Trust, our
junior subordinated debt securities nor our trust preferred securities guarantee
limit our ability or that of our subsidiaries to incur additional indebtedness,
including indebtedness that ranks senior in priority of payment to the junior
subordinated debt securities and the trust preferred securities guarantee.
BANK UNITED CAPITAL TRUST'S ABILITY TO MAKE PAYMENTS ON ITS TRUST PREFERRED
SECURITIES WILL DEPEND ENTIRELY ON OUR PAYMENTS ON OUR JUNIOR SUBORDINATED DEBT
SECURITIES.
The only assets of Bank United Capital Trust will be its investment in our
junior subordinated debt securities. Accordingly, the ability of Bank United
Capital Trust to pay scheduled distributions on its trust preferred securities,
as well as the redemption price and the liquidation amount of the trust
preferred securities, is solely dependent upon us paying, when due, the related
payments we are obligated to pay on the junior subordinated debt securities.
OUR OBLIGATIONS UNDER THE TRUST PREFERRED SECURITIES GUARANTEE ARE LIMITED.
The trust preferred securities guarantee only guarantees that we will make
distribution, redemption and liquidation payments on the trust preferred
securities of Bank United Capital Trust if it has the funds to do so itself but
does not. If we fail to pay in full principal or interest when due on our junior
subordinated debt securities, Bank United Capital Trust will not have sufficient
funds to make distribution, redemption or liquidation payments on the trust
preferred securities. In those
1
circumstances, you also will not be able to rely upon the trust preferred
securities guarantee for payment of these amounts.
Instead, you:
o may directly sue us or seek other remedies to collect your
proportionate share of payments owed; or
o rely on the Property Trustee to enforce Bank United Capital
Trust's rights under the junior subordinated debt securities.
OUR DEFERRAL OF DISTRIBUTIONS ON THE JUNIOR SUBORDINATED DEBT SECURITIES WOULD
NOT RELIEVE YOU OF LIABILITY FOR TAXES AND COULD AFFECT THE TRADING PRICE OF THE
TRUST PREFERRED SECURITIES.
So long as no event of default under the junior subordinated debt
securities has occurred and is continuing, we can, on one or more occasions,
defer interest payments on the junior subordinated debt securities for the
number of consecutive periods specified in the applicable prospectus supplement.
If we defer interest payments on the junior subordinated debt securities, Bank
United Capital Trust will defer distributions on the trust preferred securities
during such deferral period. However, distributions will still accumulate and
such deferred distributions will themselves accrue interest to the extent
permitted by law.
If we defer payments of interest on the junior subordinated debt securities
held by Bank United Capital Trust, you will be required to recognize interest
income for U.S. federal income tax purposes based on your proportionate share of
the interest on those junior subordinated debt securities before you receive any
cash relating to such interest. In addition, you will not receive such cash from
the trust if you sell the trust preferred securities before the end of any
deferral period or before the record date relating to distributions that are
paid.
We have no current intention of deferring interest payments on the junior
subordinated debt securities and believe that deferral is a remote possibility.
However, if we exercise our right to defer in the future, the trust preferred
securities may trade at a price that does not fully reflect the value of accrued
but unpaid interest on the junior subordinated debt securities. If you sell the
trust preferred securities during an interest deferral period, you may not
receive the same return on your investment as someone who continues to hold the
trust preferred securities.
Even if we do not exercise our right to defer interest payments on the
junior subordinated debt securities, our right to do so may make the market
price for the trust preferred securities more volatile than that of other
securities without this feature.
The prospectus supplement with respect to the trust preferred securities
will describe relevant U.S. federal income tax considerations applicable to the
purchase, holding and disposition of the trust preferred securities.
WE MAY REDEEM YOUR TRUST PREFERRED SECURITIES AT ANY TIME IF SPECIFIED CHANGES
IN TAX, INVESTMENT COMPANY OR BANK REGULATORY LAW OCCUR.
If any of the changes in tax, investment company or bank regulatory law
described in this prospectus occur and are continuing, and certain other
conditions are satisfied, we will have the right to redeem the junior
subordinated debt securities within 90 days of the event whether or not we could
otherwise have redeemed the junior subordinated debt securities at that time.
Any redemption will cause a mandatory redemption of trust preferred securities
having a total liquidation amount equal to the total principal amount of junior
subordinated debt securities to be redeemed. Prior to any such redemption, we
will obtain any required regulatory approvals. See "Description of the Offered
Securities -- Trust Preferred Securities -- Distribution of the Junior
Subordinated Debt Securities" and "-- Special Event Redemption."
2
HOLDERS OF THE TRUST PREFERRED SECURITIES WILL HAVE LIMITED VOTING RIGHTS.
You will have very limited voting rights if you own or hold trust preferred
securities. Among other things, we will have the power to elect or remove any of
the trustees of Bank United Capital Trust unless an event of default under the
junior subordinated debt securities has occurred and is continuing. See "Trust
Preferred Securities -- Voting Rights; Amendment of Declaration."
WE MAY TERMINATE BANK UNITED CAPITAL TRUST AT ANY TIME.
Subject to obtaining any required regulatory approval, we have the right to
terminate Bank United Capital Trust at any time. If we decide to exercise our
right to terminate Bank United Capital Trust, Bank United Capital Trust will
redeem its trust securities by distributing the junior subordinated debt
securities to holders of the trust securities on a proportionate basis.
Under current U.S. federal income tax law, a distribution of junior
subordinated debt securities to you upon the dissolution of Bank United Capital
Trust should not be a taxable event to you. However, if Bank United Capital
Trust is characterized for U.S. federal income tax purposes as an association
taxable as a corporation at the time it is dissolved or if there is a change in
law, the distribution of junior subordinated debt securities to you may be a
taxable event to you.
We have no current intention of terminating Bank United Capital Trust and
distributing junior subordinated debt securities to the holders of its trust
preferred securities. We anticipate that we would consider exercising this right
in the event that expenses associated with maintaining Bank United Capital Trust
were substantially greater than currently expected, such as if certain changes
in tax, investment company or bank regulatory law occurred. We cannot predict
the other circumstances under which we would exercise this right.
THE TRUST PREFERRED SECURITIES ARE A NEW SECURITY WITH NO PRIOR MARKET.
Prior to this offering there has been no public market for the trust
preferred securities, and we cannot assure you that a market will develop. The
trust preferred securities may not be listed on any securities exchange. The
underwriters may make a market in the trust preferred securities after the
consummation of this offering, as permitted by applicable laws and regulations;
however, the underwriters are not obligated to do so, and may discontinue any
such market making activities at any time without notice. If a trading market
for the trust preferred securities does develop, the trust preferred securities
may trade at a discount from their initial offering price depending on
prevailing interest rates, the market for similar securities, our performance
and other factors.
THERE MAY BE NO TRADING MARKET FOR THE JUNIOR SUBORDINATED DEBT SECURITIES.
Although we will use our best efforts to list the junior subordinated debt
securities on the exchange, if any, on which the trust preferred securities are
then listed if they are distributed, we cannot assure you that the junior
subordinated debt securities will be approved for listing on that exchange or
that a trading market will exist for those securities.
3
USE OF PROCEEDS
Unless we have indicated otherwise in the applicable prospectus supplement,
we expect to use the net proceeds we receive from any offering of these
securities for our general corporate purposes. Bank United Capital Trust will
use the net proceeds from the sale of its trust preferred securities to purchase
junior subordinated debt securities from us.
Neither we nor Bank United Capital Trust will receive any of the proceeds
from any sale of Class A common stock by any of the selling stockholders. See
"Selling Stockholders."
RATIOS OF EARNINGS TO FIXED CHARGES
AND EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS
Our ratios of earnings to fixed charges, which are computed on the basis of
the total enterprise (as defined by the Securities and Exchange Commission) by
dividing earnings before fixed charges and income taxes by fixed charges, are
shown below for the periods indicated. Also shown below are our ratios of
earnings to combined fixed charges and preferred stock dividends, which are
computed on the basis of the total enterprise by dividing earnings before fixed
charges and income taxes by fixed charges and preferred stock dividend
requirements, for the periods indicated. Fixed charges consist principally of
interest expense on all long- and short-term borrowings, excluding or including
interest on deposits as indicated.
SIX MONTHS ENDED
MARCH 31, YEAR ENDED SEPTEMBER 30,
-------------------- -----------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
--------- --------- --------- --------- --------- --------- ---------
EARNINGS TO FIXED CHARGES:
Excluding interest expense on
deposits......................... 1.56 1.41 1.50 1.54 1.21 1.30 1.72
Including interest expense on
deposits......................... 1.31 1.22 1.26 1.29 1.11 1.16 1.26
EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED DIVIDENDS:
Excluding interest expense on
deposits......................... 1.44 1.30 1.37 1.40 1.10 1.23 1.54
Including interest expense on
deposits......................... 1.25 1.17 1.20 1.22 1.06 1.13 1.21
4
BANK UNITED CORP.
We are a broad-based financial services provider to consumers and
businesses in Texas and selected regional markets throughout the United States.
At March 31, 1999, we operated a 94-branch community banking network serving
nearly 265,000 households, as well as 19 commercial banking offices in 16 states
across the country. As of March 31, 1999, we were the largest publicly traded
financial institution headquartered in Texas, with $14.9 billion in assets, $6.6
billion in deposits, and $723.0 million in stockholders' equity. Our address is
3200 Southwest Freeway, Suite 2600, Houston, Texas 77027 and our telephone
number is (713) 543-6500.
We were incorporated in Delaware on December 19, 1989 as USAT Holdings Inc.
and became the holding company for Bank United (the "Bank") upon its formation
on December 30, 1988. The Bank is a federally chartered savings bank, the
deposits of which are insured by the Savings Association Insurance Fund, which
is administered by the FDIC. In December 1996, we formed a wholly owned,
Delaware subsidiary, BNKU Holdings, Inc., which is now the direct parent company
of the Bank.
The Bank's capital levels at March 31, 1999 and September 30, 1998
qualified it as "well-capitalized," the highest of five categories under
applicable regulatory definitions. The Bank's capital ratios at March 31, 1999
and September 30, 1998, and the applicable regulatory capital requirements, were
as follows:
MARCH 31, SEPTEMBER 30, CAPITAL ADEQUACY WELL-CAPITALIZED
1999 1998 REQUIREMENT REQUIREMENT
----------- --------------- ----------------- -----------------
Tangible capital..................... 6.73% 6.75% 1.50% --
Core/leverage capital................ 6.75% 6.77% 3.00% 5.00%
Tier 1 capital....................... 9.86% 9.97% -- 6.00%
Total risk-based capital............. 11.92% 10.48% 8.00% 10.00%
5
BANK UNITED CAPITAL TRUST
Bank United Capital Trust is a statutory business trust newly formed under
Delaware law by (1) a declaration of trust executed by us, as sponsor for the
trust, and by the trustees for the trust, and (2) the filing of a certificate of
trust with the Delaware Secretary of State. The declaration will be amended and
restated in its entirety substantially in the form filed as an exhibit to the
registration statement of which this prospectus forms a part, as of the date
securities of Bank United Capital Trust are initially issued. The amended
declaration will be qualified as an indenture under the Trust Indenture Act of
1939.
Bank United Capital Trust exists for the exclusive purposes of (1) issuing
two classes of trust securities, trust preferred securities and trust common
securities, which together represent undivided beneficial interests in the
assets of Bank United Capital Trust; (2) investing the gross proceeds of the
trust securities in our junior subordinated debt securities; and (3) engaging in
only those other activities necessary or incidental thereto.
We will directly or indirectly own all of the trust common securities. The
trust common securities will rank equally in right of payment, and payments will
be made thereon proportionately, with the trust preferred securities except that
upon the occurrence and during the continuance of an event of default under the
amended declaration, the rights of the holders of the trust common securities to
payment in respect of distributions and payments upon liquidation, redemption
and otherwise will be subordinated to the rights of the holders of the trust
preferred securities. We will acquire, directly or indirectly, trust common
securities in a total liquidation amount equal to 3% of the total capital of
Bank United Capital Trust.
Bank United Capital Trust has a term of approximately 55 years, but may
terminate earlier as provided in its amended declaration. The business and
affairs of Bank United Capital Trust will be conducted by its trustees, who will
initially be appointed by us, as the direct or indirect holder of all the trust
common securities. We, as the direct or indirect holder of all of the trust
common securities of Bank United Capital Trust, will also be entitled to
appoint, remove or replace the Bank United Capital Trust trustees, unless an
event of default in respect of our junior subordinated debt securities held by
Bank United Capital Trust has occurred and is continuing.
The duties and obligations of the Bank United Capital Trust trustees will
be governed by the amended declaration. A majority of the Bank United Capital
Trust trustees (the "Regular Trustees") will be persons who are our employees,
officers, or affiliates.
One Bank United Capital Trust trustee will be a financial institution
unaffiliated with us that will act as property trustee and as indenture trustee
for purposes of the Trust Indenture Act, under the terms set forth in a
prospectus supplement (the "Property Trustee"). The Property Trustee will hold
title to the junior subordinated debt securities for the benefit of the holders
of the trust securities of Bank United Capital Trust. As holder of the junior
subordinated securities the Property Trustee will have the power to exercise all
rights, powers and privileges under the indenture related to the junior
subordinated debt securities. In addition, the Property 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 debt securities held by it for the benefit of the holders of the
trust preferred securities of Bank United Capital Trust. The Property Trustee
will make payments of distributions and payments on liquidation, redemption and
otherwise to the Property Account. Unless the Property Trustee maintains a
principal place of business in the State of Delaware, and otherwise meets the
requirements of applicable law, one Bank United Capital Trust trustee will have
its principal place of business or reside in the State of Delaware (the
"Delaware Trustee"). In limited circumstances that will be described in a
prospectus supplement relating to trust preferred securities, the holders of a
majority of the trust preferred securities will be entitled to appoint or remove
the Property Trustee or the Delaware Trustee.
6
The rights of the holders of the trust securities, including economic
rights, rights to information and voting rights, are contained in the amended
declaration, the Delaware Business Trust Act and the Trust Indenture Act. We
will pay all fees and expenses related to Bank United Capital Trust and the
offering of trust securities, the payment of which will be guaranteed by us. The
office of the Delaware Trustee for Bank United Capital Trust in the State of
Delaware is The Bank of New York (Delaware), White Clay Center, Route 273,
Newark, Delaware 19711. The principal place of business of Bank United Capital
Trust will be c/o Bank United Corp., 3200 Southwest Freeway, Suite 2600,
Houston, Texas 77027 and its telephone number is (713) 543-6500.
7
DESCRIPTION OF OFFERED SECURITIES
If so indicated in the applicable prospectus supplement, the terms of any
securities may differ from the terms set forth below.
CLASS A COMMON STOCK
As of July 22, 1999, we had 31,703,646 shares of Class A common stock
issued and outstanding and 3,762,270 shares reserved for issuance under our
stock option plans. The material provisions relating to our Class A common stock
can be found in our certificate of incorporation and by-laws, copies of which
have been filed with the Commission. See "Where You Can Find More
Information."
We have no other classes of common stock outstanding as of the date of this
prospectus.
PREFERRED STOCK
The following is a summary of the principal terms of our preferred stock.
This summary is not complete, may not contain all the information that is
important to you and is qualified in its entirety by the provisions of our
certificate of incorporation and by-laws, copies of which have been filed with
the Commission. See "Where You Can Find More Information."
Our board of directors is authorized by our certificate of incorporation to
provide, without further stockholder action, for the issuance of one or more
series of preferred stock. Our board of directors has the power to fix various
terms with respect to each series, including voting powers, designations,
preferences and relative, participating, optional or other special rights,
qualifications, limitations, restrictions and redemption, conversion or
exchangeability provisions.
The applicable prospectus supplement will contain the following principal
terms of the series of preferred stock offered thereby:
o the designation, number of shares and liquidation preference per
share;
o initial public offering price;
o the dividend rate or rates;
o the index, if any, upon which the amount of dividends, if any, is
determined;
o the dates on which dividends, if any, will accrue and be payable
and the designated record dates for determining the holders
entitled to such dividends;
o any redemption or sinking fund provisions;
o any conversion or exchange provisions;
o provisions for issuance of global securities;
o the securities exchange, if any, on which the preferred stock
will be listed;
o the currency, which may be composite currency, in which
dividends, if any, will be payable if other than U.S. dollars;
o voting rights; and
o any additional terms, preferences or rights.
Under regulations adopted by the Office of Thrift Supervision, if the
holders of shares of any series of our preferred stock become entitled to vote
for the election of directors because our board of directors has failed to
declare or pay dividends on that series, that series may then be deemed a class
of "voting securities." In that case, an institutional holder of 25% or more
of that series, or an institutional holder of five percent or more if it
otherwise exercises a "controlling influence" over us, may then be subject to
regulation as a savings and loan holding company in accordance with the Home
Owner's Loan Act. In addition, if and when a series is deemed a class of voting
securities, any other savings and loan holding company may be required to obtain
the prior approval of the OTS to acquire five percent or more of that series,
and any person other than a savings and loan holding company may be required to
obtain the prior approval of the OTS to acquire ten percent or more of that
series.
8
The shares of preferred stock will, when issued, be fully paid and
nonassessable and will have no preemptive rights to subscribe for any additional
securities that we may issue. Unless otherwise specified in the applicable
prospectus supplement, the preferred stock will rank on a parity in all respects
with any outstanding preferred stock we may have and will have priority over our
common stock as to dividends and distributions of assets. Therefore, the rights
of any preferred stock that may subsequently be issued may limit the rights of
the holders of our common stock and preferred stock.
The transfer agent, registrar, dividend disbursing agent and redemption
agent for each series of preferred stock will be specified in the applicable
prospectus supplement.
Because we are a holding company, our rights and the rights of our
creditors and our stockholders, including the holders of any shares of preferred
stock, to participate in any distribution of assets of any subsidiary upon the
subsidiary's liquidation or recapitalization will be subject to the prior claims
of the subsidiary's creditors, except to the extent that we may be a creditor
with recognized claims against the subsidiary.
The principal source of our revenues is dividends received from the Bank.
Various statutory provisions limit the amount of dividends the Bank and our
nonbank subsidiaries can pay without regulatory approval, and various
regulations can also restrict the payment of dividends. Changes in regulations
could further limit the ability of the Bank to pay dividends to us, and federal
statutes limit the ability of subsidiary banks to make loans to us.
DIVIDENDS. The holders of each series of our preferred stock will be
entitled to receive, when, as and if declared by our board of directors, out of
funds legally available for that purpose, cumulative or non-cumulative cash or
other dividends. We will describe the rate or rates and payment dates applicable
to each series of preferred stock in the applicable prospectus supplement. Those
rates may be fixed or variable or both. If variable, we will describe the
formula used for determining the dividend rate for each dividend period in the
applicable prospectus supplement. We will pay dividends to the holders of record
as they appear on our stock books on the record dates set by our board of
directors and specified in the applicable prospectus supplement. If our board of
directors fails to declare a dividend payable on a dividend payment date on any
series of the preferred stock for which dividends are noncumulative, then the
holders of these noncumulative series of the preferred stock will have no right
to receive a dividend in respect of the dividend period ending on that dividend
payment date, and we will have no obligation to pay a dividend for that period,
whether or not dividends on that series are declared payable on any future
dividend payment dates.
Unless otherwise indicated in the applicable prospectus supplement:
o we may not declare dividends on any other series or class of
preferred stock ranking on a parity as to dividends unless full
cumulative dividends on all outstanding shares of each series of
cumulative preferred stock have been paid in full or
contemporaneously are declared and paid through the most recent
dividend payment date; and
o in the event that full cumulative dividends on any series of
cumulative preferred stock have not been declared and paid or set
apart when due, we may not declare or pay any dividends or other
distributions on any other shares of our stock ranking junior to
the preferred stock, unless full cumulative dividends on that
series are made or set apart for payment; but
o we may, however, pay dividends or distributions in shares of
common stock, or using options, warrants or rights to subscribe
for or purchase shares of common stock or other junior ranking
stock.
REDEMPTION. The shares of any series of our preferred stock may be
redeemable at our option and may be subject to mandatory redemption under a
sinking fund or otherwise, in each case upon the terms, on the date or dates and
at the redemption price or prices set forth in the applicable prospectus
supplement. If fewer than all shares of preferred stock are to be redeemed, the
shares to be redeemed will be selected by us proportionately, by lot or by any
other method determined by our board of directors to be equitable.
9
If we have not paid any dividends on shares of any series of preferred
stock when due:
o we may not redeem shares of common stock or shares of capital
stock ranking junior to or on parity with the preferred stock;
o we may not redeem shares of that series of preferred stock unless
we simultaneously redeem all outstanding shares of that series;
and
o we may not purchase or otherwise acquire any shares of that
series; but
o we may, however, purchase or acquire shares of that series under
a purchase or exchange offer made on the same terms to holders of
all shares of that series.
Any notice of redemption will be given by mailing the notice to each record
holder of the shares to be redeemed, not less than 40 days nor more than 70 days
prior to the redemption date, to the addresses of the holders as they appear on
our stock books. Each notice will state:
o the redemption date;
o the number of shares and series of preferred stock that we will
redeem;
o the redemption price and the manner in which we will pay and
deliver the redemption price;
o the place or places where holders must surrender certificates for
the shares of preferred stock to be redeemed in exchange for
payment of the redemption price;
o that dividends on the shares of preferred stock to be redeemed
will cease to accrue on the redemption date; and
o if we are redeeming fewer than all shares of any series of
preferred stock held by any holder, the number of shares that we
will redeem.
If we have given notice of redemption, unless we have defaulted in
providing the requisite funds to redeem the shares we call for redemption, from
and after the redemption date for the shares of the series of the preferred
stock we call for redemption:
o dividends on the shares of preferred stock called for redemption
will cease to accrue;
o any right to convert the shares of preferred stock of that series
will terminate;
o shares of preferred stock of that series will no longer be deemed
to be outstanding; and
o rights of the holders of the shares of preferred stock of that
series as our stockholders, except the right to receive the
redemption price, will cease.
Once holders surrender certificates in accordance with the redemption
notice, we will provide funds to pay, and will cause to be paid, the redemption
price indicated in the notice. Any shares so redeemed must be properly endorsed
or assigned for transfer, if our board of directors so requires and the
redemption notice so states. If fewer than all of the shares represented by any
certificate are redeemed, a new certificate will be issued representing the
unredeemed shares without cost to the holder thereof.
LIQUIDATION PREFERENCE. Upon our liquidation, dissolution or winding up,
the holders of shares of each series of our preferred stock will be entitled to
receive, out of our assets available for distribution to stockholders and before
any distribution of assets is made to or set apart for the holders of common
stock or any other shares of our stock ranking junior as to such a distribution
to the shares of that preferred series, an amount described in the applicable
prospectus supplement. If, upon our liquidation, dissolution or winding up, our
assets or the proceeds thereof are insufficient to pay in full the amounts
payable with respect to shares of each series of preferred stock and any other
shares of our stock ranking on a parity, as to any such distribution with that
series of preferred stock, the holders of shares of that series of preferred
stock and the other parity shares will share ratably in the distribution of our
assets in proportion to the full respective preferential amounts to which they
are entitled. After payment to the holders of shares of that series of preferred
stock of the full preferential amounts to which they are entitled, those holders
will not be entitled to any further participation in
10
any distribution of assets by us, unless otherwise provided in the applicable
prospectus supplement. A consolidation or merger between us and one or more
corporations is not, for this purpose, a liquidation, dissolution or winding up.
The terms, if any, on which shares of any series of preferred stock are
convertible into or exchangeable for debt securities or common stock will be
contained in the applicable prospectus supplement. These terms may include
provisions for conversion or exchange, either mandatorily, at the option of the
holder or at our option, in which the number of shares of common stock to be
received by the holders of preferred stock would be calculated according to the
market price of common stock as of a time stated in the applicable prospectus
supplement.
DEPOSITARY SHARES
We may elect to offer fractional interests in shares of our preferred
stock, rather than full shares of preferred stock. In that case, we will cause a
bank or trust company we select, with its principal executive office in the
United States and a combined capital and surplus of at least $50,000,000 (a
"Depositary"), to issue to the public receipts (the "Depositary Receipts")
evidencing one or more fractional interests in a share of preferred stock we
deposit with the Depositary (the "Depositary Shares"). Each Depositary Share
will represent a fraction of a share of a particular series of preferred stock
as described below and detailed in the prospectus supplement relating to a
particular series of the preferred stock and the series of Depositary Shares
issued in respect thereof. The shares of any series of preferred stock
underlying the Depositary Shares will be deposited with a Depositary under a
separate deposit agreement (the "Deposit Agreement") between us and a
Depositary which may serve as a Depositary for more than one series of
Depositary Shares.
The following is a summary of the principal terms of the Depositary Shares
and the Deposit Agreement. This summary is not complete, may not contain all of
the information that is important to you and is qualified in its entirety by
reference to the Deposit Agreement and Depositary Receipts relating to each
series of preferred stock. We have filed the forms of Deposit Agreement and
Depositary Receipt as exhibits to the registration statement of which this
prospectus forms a part, or incorporate them by reference. Please review those
documents for further details not described in the summary below.
The applicable prospectus supplement relating to a series of Depositary
Shares will set forth the name and address of the principal executive office of
the Depositary. Subject to the terms of the Deposit Agreement, each owner of a
Depositary Share will be entitled, in proportion to the applicable fraction of a
share of preferred stock represented by that Depositary Share, to all the rights
and preferences of the preferred stock represented by that Depositary Share,
including dividend, voting, redemption, conversion and liquidation rights.
We may order the Depositary to issue temporary Depositary Receipts to
holders in the event the definitive Depositary Receipts are not ready at the
time of distribution. The temporary Depositary Receipts will be substantially
identical to, and will entitle holders to all the rights pertaining to, the
definitive Depositary Receipts. We will then have definitive Depositary Receipts
prepared without unreasonable delay. Holders will be able to exchange temporary
Depositary Receipts for definitive Depositary Receipts at our expense.
Holders of Depositary Shares may surrender Depositary Receipts to the
Depositary (unless we have previously called for redemption of the related
Depositary Shares) and receive the number of whole shares of the related series
of preferred stock and any money or other property represented by those
Depositary Receipts. Holders will be entitled to receive whole shares of
preferred stock on the basis described in the applicable prospectus supplement.
After surrender of Depositary Receipts, holders will not be entitled to deposit
under the Deposit Agreement the shares of preferred stock received or to receive
Depositary Receipts for such shares of preferred stock. If the Depositary
Receipts delivered by the holder evidence a number of Depositary Shares in
excess of the number of Depositary Shares representing the number of whole
shares of preferred stock to be withdrawn, the Depositary will deliver to that
holder at the same time a new Depositary Receipt evidencing the excess number of
Depositary Shares.
11
We do not expect that there will be any public trading market for the
preferred stock represented by Depositary Receipts except as represented by the
Depositary Shares.
DIVIDENDS AND OTHER DISTRIBUTIONS. The Depositary will distribute all cash
dividends or other cash distributions received from us in respect of the
underlying shares of preferred stock to the record holders of Depositary Shares
relating to the preferred stock in proportion to the number of Depositary Shares
owned by those holders on the relevant record date. The Depositary will
distribute only the amount, however, that it can distribute without attributing
to any holder of Depositary Shares a fraction of one cent, and any balance it
does not distribute will be added to and treated as part of the next amount it
receives for distribution to record holders of Depositary Shares.
In the event of a distribution other than in cash, the Depositary will
distribute property received from us to the record holders of Depositary Shares
entitled to the distribution. If the Depositary determines that it is not
feasible to make such a distribution, it may, with our approval, sell the
property and distribute the net proceeds from that sale to those holders.
The Deposit Agreement will also contain provisions relating to the manner
in which the Depositary will make available to holders of Depositary Shares any
subscription or similar rights offered by us to holders of the series of
preferred stock underlying Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES. If we decide to redeem a series of the
preferred stock represented by Depositary Shares, the Depositary will redeem the
Depositary Shares from the proceeds it will receive as a result of the
redemption of the underlying preferred stock. The Depositary will mail a notice
of redemption not less than 30 and not more than 60 days prior to the redemption
date to the addresses of the record holders of the Depositary Shares as they
appear in the Depositary's books. The redemption price per Depositary Share will
equal the applicable fraction of the redemption price per share payable with
respect to the underlying series of the preferred stock. Whenever we redeem
preferred stock held by the Depositary, the Depositary will redeem as of the
same redemption date the number of Depositary Shares representing the shares of
preferred stock so redeemed. If less than all the Depositary Shares are to be
redeemed, the Depositary will select the Depositary Shares to be redeemed,
either proportionately or by lot.
After the redemption date, the Depositary Shares called for redemption will
no longer be deemed to be outstanding and all rights of the holders of the
Depositary Shares will cease, except the right to receive the monies payable
upon redemption and any money or other property to which the holders of those
Depositary Shares were entitled upon redemption upon surrender to the Depositary
of the Depositary Receipts evidencing those Depositary Shares.
VOTING THE UNDERLYING PREFERRED STOCK. We will send to the Depositary all
notices of meetings at which the holders of shares of the series of preferred
stock held by the Depositary are entitled to vote. The Depositary will mail the
information contained in such a notice of meeting to the record holders of the
Depositary Shares relating to that series of preferred stock. Each record holder
of those Depositary Shares on the record date may instruct the Depositary how to
vote with respect to the number of shares of preferred stock represented by that
holder's Depositary Shares. The record date for Depositary Shares will be the
same date as the record date for the preferred stock. The Depositary will
endeavor, insofar as practicable, to vote the number of shares of preferred
stock underlying those Depositary Shares in accordance with any such
instructions. We will agree to take all actions deemed necessary by the
Depositary in order to enable the Depositary to do so. The Depositary will
abstain from voting shares of preferred stock for which it has not received
specific instructions from the holders of Depositary Shares representing those
shares of preferred stock.
TAXATION. The IRS will treat owners of Depositary Shares as if they were
owners of the preferred stock represented by those Depositary Shares, and,
accordingly, owners will be entitled to take into account for federal income tax
purposes, income and deductions to which they would be entitled if they were
holders of the preferred stock. In addition:
o owners will not recognize gain or loss for federal income tax
purposes upon the withdrawal of preferred stock in exchange for
Depositary Shares as provided in the Deposit Agreement;
12
o the tax basis of each share of preferred stock to an exchanging
owner of Depositary Shares will, upon the exchange, be the same
as the total tax basis of the Depositary Shares exchanged; and
o the holding period for the preferred stock in the hands of an
exchanging owner of Depositary Shares will include the period
during which that person owned those Depositary Shares.
AMENDMENT AND TERMINATION OF THE DEPOSITARY AGREEMENT. We and the
Depositary may at any time amend the form of Depositary Receipts evidencing the
Depositary Shares and any provision of the Deposit Agreement. However, we may
not make any amendment that materially and adversely alters the rights of the
existing holders of Depositary Shares unless the record holders of at least a
majority of the Depositary Shares then outstanding approve the amendment. We or
the Depositary may terminate a Deposit Agreement only if:
o we have redeemed all Depositary Shares outstanding under the
Deposit Agreement; or
o there has been a final distribution in respect of the series of
preferred stock underlying the Depositary Shares in connection
with our liquidation, dissolution or winding up, and that
distribution has been made to the holders of the related
Depositary Shares.
CHARGES OF DEPOSITARY. We will pay all transfer and other taxes and
governmental charges arising solely from the existence of the depositary
arrangements. We will also pay charges of the Depositary in connection with the
initial deposit of the underlying shares of preferred stock and any redemption
of the preferred stock. Holders of Depositary Shares must pay other transfer and
other taxes and governmental charges and such other charges that the Deposit
Agreement requires them to pay.
MISCELLANEOUS. We will provide to the Depositary, and the Depositary will
forward to the holders of Depositary Shares, all reports and communications from
us that we are required to furnish to the holders of the underlying preferred
stock.
Neither we nor the Depositary will be liable if we are or it is prevented
or delayed by law or any circumstance beyond our control in performing our
obligations under the Deposit Agreement. Our obligations and the Depositary's
obligations under the Deposit Agreement are limited to performance in good faith
of our and their respective duties under the Deposit Agreement. In addition,
neither we nor the Depositary will be obligated to prosecute or defend any legal
proceeding in respect of any Depositary Shares or shares of underlying preferred
stock unless satisfactory indemnity is furnished. We and the Depositary may rely
upon written advice of counsel or accountants, or information provided by
persons presenting preferred stock for deposit, holders of Depositary Shares or
other persons believed to be competent and on documents believed to be genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY. The Depositary may resign at any
time by delivering to us notice of its election to do so. We may also at any
time remove the Depositary. Any resignation or removal of the Depositary will
take effect upon our appointment of a successor Depositary and its acceptance of
that appointment. We must appoint a successor Depositary within 60 days after
delivery of any notice of resignation by, or removal of, the Depositary. The
successor Depositary must be a bank or trust company with its principal office
in the United States and must have a combined capital and surplus of at least
$50,000,000.
JUNIOR SUBORDINATED DEBT SECURITIES
The following is a summary of the principal terms of the junior
subordinated debt preferred securities in which Bank United Capital Trust will
invest the proceeds from the issuance and sale of the trust securities. This
summary is not complete, may not contain all the information that is important
to you, and is qualified in its entirety by reference to the junior subordinated
indenture, between us and the Bank of New York, as trustee (the "Indenture
Trustee"), the form of which is filed as an exhibit to the registration
statement of which this prospectus forms a part or is incorporated by reference,
as well as to the Trust Indenture Act. Wherever particular sections or defined
terms of the junior subordinated indenture are referred to, those sections or
defined terms are
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incorporated in this prospectus by reference as part of the statement made, and
the statement is qualified in its entirety by that reference.
Under certain circumstances involving the dissolution of Bank United
Capital Trust, subject to obtaining any required regulatory approval, junior
subordinated debt securities will be distributed to the holders of the trust
securities in liquidation of Bank United Capital Trust. See "Trust Preferred
Securities -- Special Event Redemption or Distribution."
If the junior subordinated debt securities are distributed to the holders
of the trust preferred securities, we will use our best efforts to have the
junior subordinated debt securities listed on any national securities exchange
or similar organization on which the trust preferred securities are then listed
or quoted.
The junior subordinated indenture will not contain covenants or other
provisions that would afford protection to the holders of the junior
subordinated debt securities in the event of a highly leveraged transaction,
reorganization, restructuring, merger or similar transaction involving us that
may adversely affect such holders.
We plan to sell junior subordinated debt securities to Bank United Capital
Trust under this prospectus. The applicable prospectus supplement relating to
the junior subordinated debt securities will contain the following terms:
o the title;
o any limit on the amount that may be issued;
o whether or not the junior subordinated debt securities will be
issued in global form, and if so, the terms and who the
depository will be;
o the securities exchange, if any, on which the junior subordinated
debt securities will be listed;
o the maturity date(s);
o the annual interest rate(s) (which may be fixed or variable) or
the method for determining the rate(s) and the date(s) interest
will begin to accrue, the date(s) interest will be payable and
the regular record dates for interest payment dates or the method
for determining those date(s);
o the place(s) where payments will be payable;
o our right, if any, to defer payment of interest and the maximum
length of any deferral period;
o the date, if any, after which, and the price(s) at which, the
junior subordinated debt securities may, under any optional
redemption provisions, be redeemed at our option, and other
related terms and provisions;
o the date(s), if any, on which, and the price(s) at which we are
obligated, under any mandatory sinking fund provisions or
otherwise, to redeem, or at the holder's option to purchase, the
junior subordinated debt securities and other related terms and
provisions;
o the denominations in which the junior subordinated debt
securities will be issued, if other than denominations of $1000
and any integral multiple thereof; and
o any other terms, none of which will be inconsistent with the
junior subordinated indenture.
CONVERSION OR EXCHANGE RIGHTS. The terms on which the junior subordinated
debt securities may be convertible into or exchangeable for Class A common stock
or any of our other securities will be contained in the applicable prospectus
supplement. These terms will include provisions as to whether conversion or
exchange is mandatory, at the option of the holder or at our option, and may
include provisions under which the number of shares of Class A common stock or
other securities to be received by the holders of the junior subordinated debt
securities would be subject to adjustment.
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CONSOLIDATION, MERGER OR SALE. The junior subordinated indenture will not
contain any covenant which restricts our ability to merge or consolidate, or
sell, convey, transfer or otherwise dispose of all or substantially all of our
assets. Any successor or acquirer of such assets, however, must assume all of
our obligations under the junior subordinated indenture or the junior
subordinated debt securities, as appropriate.
ADDITIONAL INTEREST. Pursuant to the junior subordinated indenture, we
will agree to pay any taxes, duties, assessments or governmental charges of
whatever nature (other than withholding taxes) imposed by the United States or
any other taxing authority on Bank United Capital Trust, so that the net amounts
received and retained by Bank United Capital Trust after paying any such taxes,
duties, assessments or other governmental charges will be not less than the
amounts Bank United Capital Trust would have received had no such taxes, duties,
assessments or other governmental charges been imposed.
OPTION TO EXTEND INTEREST PAYMENT PERIOD. We can defer interest payments
by extending the interest payment period for the number of consecutive extension
periods specified in the applicable prospectus supplement (each, an "Extension
Period"). No Extension Period may extend beyond the maturity of the junior
subordinated debt securities. At the end of the Extension Period(s), we will pay
all interest then accrued and unpaid, together with interest thereon compounded
quarterly at the rate specified for the junior subordinated debt securities to
the extent permitted by applicable law. During any Extension Period, we will not
make distributions related to our capital stock, including dividends,
redemptions, repurchases, liquidation payments, or guarantee payments. We may,
however, make distributions in connection with any of the following:
o repurchases, redemptions or other acquisitions of shares of our
capital stock in connection with any employment contract, benefit
plan or other similar arrangement with or for the benefit of
employees, officers, directors or consultants;
o an exchange or conversion of any class or series of our capital
stock for any other class or series of our capital stock; or
o the purchase of fractional interests in shares of our capital
stock under the conversion or exchange provisions of our capital
stock or the security being converted or exchanged.
In addition, during any Extension Period, we will not make distributions related
to our debt securities that rank equally with or junior to the junior
subordinated debt securities, including any payment of interest, principal or
premium, or repayments, repurchases or redemptions. During Extension Periods, we
will, however, be able to pay stock dividends where the dividend stock is the
same stock as that on which the dividend is being paid.
Prior to the termination of any Extension Period, we may further defer
payments of interest by extending the Extension Period. However, an extended
Extension Period, including all previous and further extensions, may not extend
beyond the maturity of the junior subordinated debt securities. Upon the
termination of any Extension Period and the payment of all amounts then due, we
may commence a new Extension Period, subject to the terms described in this
section. Interest will not be due or payable during an Extension Period, except
at the end of the Extension Period.
We have no present intention of exercising our right to defer payments of
interest by extending the interest payment period on the junior subordinated
debt securities. If the Property Trustee is the sole holder of the junior
subordinated debt securities, we will give the Regular Trustees and the Property
Trustee notice of our selection of an Extension Period one business day before
the earlier of:
o the date distributions on the trust preferred securities would be
payable, if not for that Extension Period; and
o the date the Regular Trustees are required to give notice to the
NYSE or other applicable self-regulatory organization, or to
holders of the trust preferred securities, of the record date or
the date that distribution would be payable, if not for that
Extension Period, but in any event one business day before the
record date.
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The Regular Trustees will give notice of our selection of an Extension
Period to the holders of the trust preferred securities. If the Property Trustee
is not the sole holder of the junior subordinated debt securities, we will give
the holders of the junior subordinated debt securities notice of our selection
of an Extension Period ten business days before the earlier of:
o the next succeeding interest payment date; and
o the date upon which we are required to give notice to the NYSE or
other applicable self-regulatory organization, or to holders of
the junior subordinated debt securities, of the record or payment
date of the related interest payment.
As used in this prospectus, the term "business day" means any day other
than Saturday, Sunday or any other day on which banking institutions in New York
City are permitted or required by any applicable law to close.
EVENTS OF DEFAULT UNDER THE JUNIOR SUBORDINATED INDENTURE. The following
are events of default under the junior subordinated indenture with respect to
junior subordinated debt securities that we may issue to Bank United Capital
Trust:
o our failure to pay interest when due and that failure continues
for 30 days and the time for payment has not been extended or
deferred;
o our failure to pay the principal, or premium, if any, when due;
o our failure to observe or perform any other covenant contained in
the junior subordinated debt securities or the junior
subordinated indenture, and that failure continues for 90 days
after we receive notice from the Indenture Trustee or holders of
at least 25% of the total principal amount of the outstanding
junior subordinated debt securities; and
o our bankruptcy, insolvency or reorganization.
If an event of default with respect to the junior subordinated debt
securities occurs and is continuing, the Indenture Trustee or the holders of at
least 25% of the total principal amount of the outstanding junior subordinated
debt securities, by notice in writing to us (and to the Indenture Trustee if
notice is given by those holders), may declare the unpaid principal of, premium,
if any, and accrued interest, if any, due and payable immediately.
The holders of at least a majority of the total liquidation amount of the
trust preferred securities may waive any default or event of default with
respect to and its consequences, except defaults or events of default regarding:
o payment of principal, premium, if any, or interest; or
o certain covenants containing limitations on our ability to pay
dividends and make payments on debt securities in certain
circumstances.
Any such waiver will cure any default or event of default, other than those
described immediately above.
Subject to the terms of the junior subordinated indenture, if an event of
default under the junior subordinated indenture occurs and is continuing, the
Indenture Trustee will be under no obligation to exercise any of its rights or
powers under the junior subordinated indenture at the request or direction of
any of the holders of the junior subordinated debt securities, unless those
holders have offered reasonable indemnity to the Indenture Trustee. The holders
of at least a majority of the total liquidation amount of the trust preferred
securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Indenture Trustee, or
exercising any trust or power conferred on the Indenture Trustee, with respect
to the junior subordinated debt securities, provided that:
o it is not in conflict with any law or the applicable provisions
of the junior subordinated indenture;
o the Indenture Trustee may take any other action deemed proper by
it which is not inconsistent with such direction; but
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o subject to its duties under the Trust Indenture Act, the
Indenture Trustee need not take any action that might involve it
in personal liability or might be unduly prejudicial to the
holders not involved in the proceeding.
A holder of the junior subordinated debt securities will only have the
right to institute a proceeding under the junior subordinated indenture or to
appoint a receiver or trustee, or to seek other remedies if:
o the holder has given written notice to the Indenture Trustee of a
continuing event of default;
o the holders of at least 25% of the total principal amount of the
outstanding junior subordinated debt securities have made written
request, and those holders have offered reasonable indemnity to
the Indenture Trustee to institute the proceedings as trustee;
and
o the Indenture Trustee does not institute the proceeding and does
not receive from the holders of a majority of the total principal
amount of the outstanding junior subordinated debt securities
other conflicting directions within 60 days after the relevant
notice and request and offer of reasonable indemnity to the
Indenture Trustee.
These limitations, however, do not apply to a suit instituted by a holder of
junior subordinated debt securities if we default in the payment of the
principal, premium, if any, or interest on, the junior subordinated debt
securities.
We will periodically file statements with the Indenture Trustee regarding
our compliance with certain of the covenants in the junior subordinated
indenture.
If an event of default under the amended declaration has occurred and is
attributable to our failure to pay principal, premium, if any, or interest on,
the junior subordinated debt securities, then each holder of the trust preferred
securities may sue us or seek other remedies to force payment to that holder of
the principal of, premium, if any, or interest on, the junior subordinated debt
securities having a principal amount equal to the total liquidation amount of
the trust preferred securities held by that holder. If you sue us to collect
payment, then we will assume your rights as a holder of trust preferred
securities under the amended declaration to the extent we make a payment to you
in any similar legal action. The holders of trust preferred securities will not
be able to exercise directly any other remedy available to the holders of the
junior subordinated debt securities.
CERTAIN COVENANTS. If the junior subordinated debt securities are issued
to Bank United Capital Trust or a trustee of Bank United Capital Trust in
connection with the issuance of trust preferred securities by Bank United
Capital Trust, and
o there has occurred and is continuing an event of default under
the junior subordinated indenture,
o we are in default with respect to our payment of any obligations
under the trust preferred securities guarantee, or
o we have given notice of our election to defer payments of
interest on the junior subordinated debt securities by extending
the interest payment period as provided in the junior
subordinated indenture and that period, or any extension thereof,
is continuing,
then:
o we may not make distributions related to our debt securities that
rank equally with or junior to the junior subordinated debt
securities, including any payment of interest, principal or
premium, or repayments, repurchases or redemptions, and
o may not make distributions related to our capital stock,
including dividends, redemptions, repurchases, liquidation
payments, or guarantee payments, except that we may make
distributions in connection with any of the following:
1) repurchases, redemptions or other acquisitions of shares of
our capital stock in connection with any employment
contract, benefit plan or other similar arrangement with or
for the benefit of employees, officers, directors or
consultants,
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2) an exchange or conversion of any class or series of our
capital stock for any other class or series of our capital
stock, or
3) the purchase of fractional interests in shares of our
capital stock under the conversion or exchange provisions of
such capital stock or the security being converted or
exchanged.
These prohibitions will not, however, apply to any stock dividends we pay where
the dividend stock is the same class of stock as that on which the dividend is
being paid.
In addition, as long as the trust preferred securities remain outstanding,
we will covenant:
o to directly or indirectly maintain 100% ownership of the trust
common securities of Bank United Capital Trust; provided,
however, that any permitted successor of ours under the junior
subordinated indenture may succeed to our ownership of the trust
common securities;
o to not voluntarily dissolve, wind-up or terminate Bank United
Capital Trust, except in connection with a distribution of junior
subordinated debt securities as described under "Distribution of
the Junior Subordinated Debt Securities" and in connection with
certain mergers, consolidations or amalgamations permitted by the
amended declaration;
o to timely perform our duties as sponsor of Bank United Capital
Trust; and
o to use reasonable efforts to cause Bank United Capital Trust to
1) remain a statutory business trust, except in connection with
the distribution of junior subordinated debt securities to
the holders of trust preferred securities in the event of
the liquidation of Bank United Capital Trust, the redemption
of all of the trust preferred securities of Bank United
Capital Trust, or certain mergers, consolidations or
amalgamations, each as permitted by the amended declaration,
and
2) otherwise continue to be classified as a grantor trust for
U.S. federal income tax purposes.
DISCHARGE AND DEFEASANCE. We may discharge all our obligations (except
those described below) to holders of the junior subordinated debt securities
issued under the junior subordinated indenture, which junior subordinated debt
securities have not already been delivered to the Indenture Trustee for
cancellation and which either have become due and payable or are by their terms
due and payable within one year, or are to be called for redemption within one
year, by depositing with the Indenture Trustee an amount certified to be
sufficient to pay when due the principal of and premium, if any, and interest on
all outstanding junior subordinated debt securities and to make any mandatory
sinking fund payments on those securities when due.
Unless otherwise specified in this prospectus with respect to the junior
subordinated debt securities:
(1) We, at our option, will be discharged from any and all obligations in
respect of the junior subordinated debt securities. However, we will
not be discharged from our obligations:
a) to pay all expenses of Bank United Capital Trust,
b) to register the transfer or exchange of junior subordinated debt
securities,
c) to replace mutilated, defaced, destroyed, lost or stolen junior
subordinated debt securities, and
d) to maintain paying agents and hold monies for payment in trust.
(2) If we deposit with the Indenture Trustee, in trust, money or U.S.
government obligations that through the payment of interest on that
money or those obligations and payment of their principal in
accordance with their terms will provide money in an amount sufficient
to pay all the principal of and premium, if any, and any interest on
the junior subordinated debt
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securities on the dates those payments are due, which may include one
or more redemption dates designated by us, in accordance with the
terms of the junior subordinated debt securities, then
a) we, at our option, need not comply with certain covenants
specified in this prospectus with respect to the junior
subordinated debt securities, and
b) the occurrence of an event described in the third bullet point of
the first paragraph under "-- Events of Default Under the Junior
Subordinated Indenture" above with respect to any defeased
covenant and any other event of default provided in the
applicable resolution of the board of directors or supplemental
indenture under which the junior subordinated debt securities are
issued will no longer be an event of default.
A trust described in clause (2) of the paragraph immediately above may only
be established, if, among other things, the Indenture Trustee has received an
opinion of counsel to the effect that the holders of the junior subordinated
debt securities will not recognize gain or loss for federal income tax purposes
as a result of any deposit or defeasance described in the paragraph immediately
above and will be subject to federal income tax in the same manner as if that
defeasance had not occurred, which, in the case of a discharge under clause (1)
above, must be based upon a ruling or administrative pronouncement of the IRS.
In the event we fail to comply with our remaining obligations under the junior
subordinated indenture after a defeasance of the junior subordinated indenture
with respect to the junior subordinated debt securities as described under
clause (2) above and the junior subordinated debt securities are declared due
and payable because of the occurrence of any undefeased event of default, the
amount of money and U.S. government obligations on deposit with the Indenture
Trustee may be insufficient to pay amounts due on the junior subordinated debt
securities at the time of the acceleration resulting from that event of default.
However, we will remain liable in respect of those payments.
MODIFICATION OF JUNIOR SUBORDINATED INDENTURE; WAIVER. Together with the
Indenture Trustee, we may change the junior subordinated indenture without the
consent of any holders with respect to a number of matters, including:
o to fix any ambiguity, defect or inconsistency in the junior
subordinated indenture; and
o to change anything that does not materially adversely affect the
interests of any holder of junior subordinated debt securities.
In addition, under the junior subordinated indenture, we and the Indenture
Trustee may change the rights of holders of the junior subordinated debt
securities with the written consent of the holders of at least a majority of the
total liquidation amount of the trust preferred securities. However, the
following changes may only be made with the consent of each holder of the junior
subordinated debt securities:
o extending the fixed maturity of the junior subordinated debt
securities;
o reducing the principal amount, reducing the rate of or extending
the time of payment of interest on or any premium payable upon
the redemption of any junior subordinated debt securities; or
o reducing the percentage of junior subordinated debt securities, the
holders of which are required to consent to any amendment or waive
our compliance with any covenant or past default.
If the consent of the Property Trustee, as holder of the junior
subordinated debt securities, is required to consent to any amendment,
modification or termination of the junior subordinated indenture, the Property
Trustee will request directions from the holders of the trust preferred
securities.
FORM, EXCHANGE, AND TRANSFER. The junior subordinated debt securities will
be issuable only in fully registered form without coupons and, unless otherwise
specified in the applicable prospectus supplement, in denominations of $1,000
and any integral multiple thereof.
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At the option of the holder, subject to the terms of the junior
subordinated indenture and the limitations applicable to global securities
described in the applicable prospectus supplement, junior subordinated debt
securities will be exchangeable for other junior subordinated debt securities,
in any authorized denomination and of like tenor and total principal amount.
Subject to the terms of the junior subordinated indenture and the
limitations applicable to global securities set forth in the applicable
prospectus supplement, junior subordinated debt securities may be presented for
exchange or for registration of transfer, duly endorsed or with the form of
transfer endorsed on them duly executed if we or the Indenture Trustee so
require, at the office of the security registrar or at the office of any
transfer agent we designate for that purpose. Unless otherwise provided in the
junior subordinated debt securities to be transferred or exchanged, no service
charge need be made for any registration of transfer or exchange, but we may
require the holder to pay any taxes or other governmental charges. We have
appointed the Indenture Trustee as security registrar. Any transfer agent in
addition to the security registrar we initially designate for any junior
subordinated debt securities will be named in the applicable prospectus
supplement. We may at any time designate additional transfer agents or rescind
the designation of any transfer agent or approve a change in the office through
which any transfer agent acts, except that we will be required to maintain a
transfer agent in each place of payment for the junior subordinated debt
securities.
If the junior subordinated debt securities are to be redeemed, we will not
be required to:
o issue, register the transfer of, or exchange any junior
subordinated debt securities during a period beginning at the
opening of business 15 days before the day of mailing of a notice
of redemption of any of the junior subordinated debt securities
that may be selected for redemption and ending at the close of
business on the day of such mailing, or
o register the transfer of or exchange any junior subordinated debt
securities so selected for redemption, in whole or in part,
except the unredeemed portion of any of the junior subordinated
debt securities being redeemed in part.
INFORMATION CONCERNING THE JUNIOR SUBORDINATED INDENTURE TRUSTEE. The
Indenture Trustee, other than during the occurrence and continuance of an event
of default under the junior subordinated indenture, undertakes to perform only
the duties that are specifically contained in the junior subordinated indenture
and, upon an event of default under an junior subordinated indenture, must use
the same degree of care as a prudent person would exercise or use in the conduct
of his or her own affairs. Subject to this provision, the Indenture Trustee is
under no obligation to exercise any of the powers given to it by the junior
subordinated indenture at the request of any holder of junior subordinated debt
securities unless it is offered reasonable security and indemnity against the
costs, expenses and liabilities that it might incur. The Indenture Trustee is
not required to spend or risk its own money or otherwise become financially
liable while performing its duties unless it reasonably believes that it will be
repaid or receive adequate indemnity.
PAYMENT AND PAYING AGENTS. Unless otherwise indicated in the applicable
prospectus supplement, payment of the interest on any junior subordinated debt
securities on any interest payment date will be made to the person in whose name
those junior subordinated debt securities, or one or more predecessor
securities, are registered at the close of business on the regular record date
for such interest.
Principal of and any premium and interest on the junior subordinated debt
securities will be payable at the office of the paying agents designated by us,
except that, unless otherwise indicated in the applicable prospectus supplement,
interest payments may be made by check mailed to the holder. Unless otherwise
indicated in the prospectus supplement, the corporate trust office of the
Indenture Trustee in the City of New York will be designated as our sole paying
agent for payments with respect to junior subordinated debt securities. We will
be required to maintain a paying agent in each place of payment for the junior
subordinated debt securities.
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All monies we pay to a paying agent or the Indenture Trustee for the
payment of the principal of or any premium or interest on any junior
subordinated debt securities which remains unclaimed at the end of two years
after the principal, premium or interest has become due and payable will be
repaid to us, and the holder of the security thereafter may look only to us for
payment thereof.
SUBORDINATION OF JUNIOR SUBORDINATED DEBT SECURITIES. The junior
subordinated debt securities will be unsecured and will be subordinate and
junior in priority of payment to certain of our other indebtedness to the extent
described in the applicable prospectus supplement. The junior subordinated
indenture does not limit the amount of junior subordinated debt securities which
we may issue, nor does it limit us from issuing any other secured or unsecured
debt.
GLOBAL SECURITIES. The junior subordinated debt securities may be issued
in whole or in part in the form of one or more global securities that will be
deposited with, or on behalf of, a depositary identified in the applicable
prospectus supplement (the "Global Securities"). Global Securities will be
issued in registered form and in either temporary or permanent form. Unless and
until it is exchanged for junior subordinated debt securities in definitive
form, a temporary Global Security may not be transferred except as a whole by
the depositary for that Global Security to a nominee of the depositary or any
such nominee to a successor of the depositary or a nominee of that successor.
The specific terms of the depositary arrangement with respect to the junior
subordinated debt securities will be described in the applicable prospectus
supplement. We anticipate that the following provisions will apply to any
depositary arrangements.
Upon the issuance of a Global Security, the depositary for the Global
Security or its nominee will credit the accounts of persons held with it with
the respective principal amounts of the securities represented by the Global
Security. Those accounts will be designated by the underwriters or agents with
respect to those securities or by us if such securities are offered and sold
directly by us. Ownership of beneficial interests in a Global Security will be
limited to participants, who are persons that have accounts with the depositary
for the Global Security or its nominee, or persons that may hold interests
through participants. Ownership of beneficial interests in the Global Security
will be shown on, and the transfer of that ownership will be effected only
through, records maintained by the depositary, with respect to participants'
interests, for the Global Security or by participants or persons that hold
securities through participants with respect to beneficial owners' interests.
FEES AND EXPENSES. The junior subordinated indenture provides that we will
pay all fees and expenses related to:
o the offering of the trust preferred securities and the junior
subordinated debt securities;
o the organization, maintenance and dissolution of Bank United
Capital Trust;
o the retention of the Bank United Capital Trust trustees; and
o the enforcement by the Property Trustee of the rights of the
holders of the trust preferred securities.
GOVERNING LAW. The junior subordinated indenture and the junior
subordinated debt securities will be governed by and construed in accordance
with the laws of the State of New York except to the extent that the Trust
Indenture Act is applicable.
TRUST PREFERRED SECURITIES
The following is a summary of the principal terms of the trust preferred
securities. This summary is not complete, may not include all the information
that is important to you, and is qualified in its entirety by reference to the
amended declaration, the Delaware Business Trust Act and the Trust Indenture
Act. The amended declaration is filed as an exhibit to the registration
statement of which this prospectus forms a part, or is incorporated by
reference. The terms of the trust preferred securities will include those stated
in the amended declaration and those made part of the amended declaration by the
Trust Indenture Act.
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The amended declaration authorizes the Regular Trustees to issue, on behalf
of Bank United Capital Trust, two classes of trust securities, trust preferred
securities and trust common securities, each of which will have the terms
described in the applicable prospectus supplement. The proceeds from the sale of
the trust preferred securities will be used by Bank United Capital Trust to
purchase our junior subordinated debt securities. These junior subordinated debt
securities will be held in trust by the Property Trustee for the benefit of the
holders of the trust securities.
We will guarantee the payments of distributions and payments on redemption
or liquidation with respect to the trust preferred securities, but only to the
extent Bank United Capital Trust has funds available to make those payments and
has not made the payments. See "Guarantees."
The assets of Bank United Capital Trust available for distribution to the
holders of trust preferred securities will be limited to payments from us under
the junior subordinated debt securities held by Bank United Capital Trust. If we
fail to make a payment on the junior subordinated debt securities, Bank United
Capital Trust will not have sufficient funds to make related payments, including
distributions, on its trust preferred securities.
The trust preferred securities guarantee, when taken together with our
obligations under the junior subordinated debt securities, the junior
subordinated indenture related thereto and the amended declaration, will provide
a full and unconditional guarantee of amounts due on the trust preferred
securities issued by Bank United Capital Trust.
The trust preferred securities will have the terms, including
distributions, redemption, voting, liquidation rights and other preferred,
deferred or other special rights or restrictions that are described in the
amended declaration or made part of the amended declaration by the Trust
Indenture Act or the Delaware Business Trust Act. The terms of the trust
preferred securities will mirror the terms of the junior subordinated debt
securities held by Bank United Capital Trust. In other words, the distribution
rate and the distribution payment dates and other payment dates for the trust
preferred securities will correspond to the interest rate and interest payment
dates and other payment dates on the junior subordinated debt securities.
The applicable prospectus supplement will set forth the principal terms of
the trust preferred securities that will be offered, including:
o the name of the trust preferred securities;
o the liquidation amount and number of trust preferred securities
issued;
o the annual distribution rate(s) or method of determining such
rate(s), the payment date(s) and the record dates used to
determine the holders who are to receive distributions;
o the date from which distributions will be cumulative;
o the optional redemption provisions, if any, including the prices,
time periods and other terms and conditions on which the trust
preferred securities will be purchased or redeemed, in whole or
in part;
o the terms and conditions, if any, upon which the junior
subordinated debt securities and the related trust preferred
securities guarantee may be distributed to holders of those trust
preferred securities;
o any securities exchange on which the trust preferred securities
will be listed;
o whether the trust preferred securities are to be issued in
book-entry form and represented by one or more global
certificates, and if so, the depository for those global
certificates and the specific terms of the depositary
arrangements; and
o any other relevant rights, preferences, privileges, limitations
or restrictions of the trust preferred securities.
The applicable prospectus supplement will also describe certain U.S. federal
income tax considerations applicable to the purchase, holding and disposition of
such trust preferred securities.
22
EXTENSIONS. We have the right under the junior subordinated indenture to
defer payments of interest on the junior subordinated debt securities by
extending the interest payment period from time to time on the junior
subordinated debt securities. The Regular Trustees will give the holders of the
trust preferred securities notice of any Extension Period upon their receipt of
notice thereof from us. If distributions are deferred, the deferred
distributions and accrued interest thereon will be paid to holders of record of
the trust preferred securities as they appear on the books and records of Bank
United Capital Trust on the record date next following the termination of such
deferral period. See "Description of the Junior Subordinated Debt
Securities -- Interest" and "-- Option to Extend Interest Payment Period."
Distributions on the trust preferred securities will be made on the dates
payable to the extent that Bank United Capital Trust has funds available for the
payment of distributions in the Property Account. Bank United Capital Trust's
funds available for distribution to the holders of the trust securities will be
limited to payments received from us on the junior subordinated debt securities.
We have guaranteed the payment of distributions out of monies held by Bank
United Capital Trust to the extent set forth under "-- Guarantees."
Distributions on the trust preferred securities will be payable to the
holders named on the securities register of Bank United Capital Trust at the
close of business on the relevant record dates, which, as long as the trust
preferred securities remain in book-entry only form, will be one business day
prior to the relevant payment dates. Distributions will be paid through the
Property Trustee who will hold amounts received in respect of the junior
subordinated debt securities in the Property Account for the benefit of the
holders of the trust securities. In the event that the trust preferred
securities do not continue to remain in book-entry only form, the relevant
record dates will conform to the rules of any securities exchange on which the
trust preferred securities are listed and, if none, the Regular Trustees will
have the right to select relevant record dates, which will be more than 14 days
but less than 60 days prior to the relevant payment dates. In the event that any
date on which distributions are to be made on the trust preferred securities is
not a business day, then payment of the distributions payable on that date will
be made on the next succeeding day which is a business day and without any
interest or other payment in respect of that delay, except that, if that
business day is in the next succeeding calendar year, the payment will be made
on the immediately preceding business day, in each case with the same force and
effect as if made on the record date.
MANDATORY REDEMPTION OF TRUST PREFERRED SECURITIES. The trust preferred
securities have no stated maturity date, but will be redeemed upon the maturity
of the junior subordinated debt securities or to the extent the junior
subordinated debt securities are redeemed prior to maturity. The junior
subordinated debt securities will mature on the date specified in the applicable
prospectus supplement and may be redeemed at any time, in whole but not in part,
in certain circumstances upon the occurrence of a Tax Event, an Investment
Company Event or a Regulatory Capital Event as described under "-- Special
Event Redemption."
Upon the maturity of the junior subordinated debt securities, the proceeds
of their repayment will simultaneously be applied to redeem all the outstanding
trust securities at the Redemption Price. Upon the redemption of the junior
subordinated debt securities, either at our option or as a result of a Tax
Event, an Investment Company Event or a Regulatory Capital Event, the proceeds
from the redemption will simultaneously be applied to redeem trust securities
having a total liquidation amount equal to the total principal amount of the
junior subordinated debt securities so redeemed at the redemption price;
provided, that holders of trust securities will be given not less than 30 nor
more than 60 days' notice of the redemption. In the event that fewer than all of
the outstanding trust securities are to be redeemed, the trust securities will
be redeemed proportionately.
SPECIAL EVENT REDEMPTION. Subject to obtaining any required regulatory
approval, if a Tax Event, an Investment Company Event or a Regulatory Capital
Event (each, a "Special Event") occurs and is continuing, we will have the
right, upon not less than 30 nor more than 60 days' notice, to redeem the junior
subordinated debt securities, in whole but not in part, for cash within 90 days
23
following the occurrence of that Special Event. Following the redemption, Bank
United Capital Trust will use the proceeds to redeem all the outstanding trust
securities. However, if at the time there is available to us or Bank United
Capital Trust the opportunity to eliminate, within that 90-day period, the
Special Event by taking some ministerial action, such as filing a form or making
an election or pursuing some other similar reasonable measure that will have no
adverse effect on us, Bank United Capital Trust, or the holders of the trust
securities, then we or Bank United Capital Trust will pursue that measure in
lieu of redemption.
The following events constitute Special Events for purposes of the
redemption provisions described in the preceding paragraph.
o "TAX EVENT" means that the Regular Trustees have received an
opinion of independent tax counsel experienced in those matters
to the effect that, as a result of:
1) any amendment to, change or announced proposed change in,
the laws or regulations of the United States or any of its
political subdivisions or taxing authorities, or
2) any official administrative pronouncement, action or
judicial decision interpreting or applying those laws or
regulations, which amendment or change becomes effective or
proposed change, pronouncement, action or decision is
announced on or after the date the trust preferred
securities are issued and sold
there is more than an insubstantial risk that:
a) Bank United Capital Trust is or within 90 days would be
subject to U.S. federal income tax with respect to
income accrued or received on the junior subordinated
debt securities,
b) interest payable to Bank United Capital Trust on the
junior subordinated debt securities is not or within 90
days would not be deductible, in whole or in part, by
us for U.S. federal income tax purposes, or
c) Bank United Capital Trust is or within 90 days would be
subject to a material amount of other taxes, duties or
other governmental charges.
o "INVESTMENT COMPANY EVENT" means that the Regular Trustees have
received an opinion of a nationally recognized independent
counsel to the effect that, as a result of an amendment to or
change in the Investment Company Act or regulations thereunder on
or after the date the trust preferred securities are issued and
sold, there is more than an insubstantial risk that Bank United
Capital Trust is or will be considered an "investment company"
and be required to be registered under the Investment Company
Act.
o "REGULATORY CAPITAL EVENT" means that we have received an opinion
of independent bank regulatory counsel experienced in those
matters to the effect that, as a result of
1) any amendment to or change (including any announced
prospective change) in the laws or any regulations
thereunder of the United States or any rules, guidelines or
policies of the applicable regulatory authorities having
jurisdictions over us, or
2) any official administrative pronouncement or judicial
decision interpreting or applying those laws or regulations
which is announced or becomes effective after the date of
original issuance of the trust preferred securities,
the trust preferred securities do not constitute, or within 90 days of
the date of that event would not constitute, Tier 1 capital or its then
equivalent applied as if we were a bank holding company, as that
concept is used in the guidelines or regulations issued by the Board of
Governors of the Federal Reserve System. However, the distribution of
junior subordinated debt securities by Bank United Capital Trust in
connection with its liquidation will not, in and of itself, be a
"Regulatory Capital Event" unless the liquidation occurs in
connection with a Tax Event or an Investment Company Event.
24
DISTRIBUTION OF THE JUNIOR SUBORDINATED DEBT SECURITIES. We will have the
right at any time to dissolve Bank United Capital Trust and, after satisfaction
of the liabilities of creditors of Bank United Capital Trust as provided by
applicable law, to cause junior subordinated debt securities to be distributed
to the holders of the trust preferred securities in a total stated principal
amount equal to the total stated liquidation amount of the trust preferred
securities then outstanding. Prior to any such dissolution, we will obtain any
required regulatory approvals. The right to dissolve the trust and distribute
the junior subordinated debt securities will be conditioned on our receipt of an
opinion rendered by an independent tax counsel that the distribution would not
result in the recognition of gain or loss for federal income tax purposes by the
holders.
If the junior subordinated debt securities are distributed to the holders
of the trust securities, we will use our best efforts to cause the junior
subordinated debt securities to be listed on the NYSE or on any other exchange
that the trust preferred securities are then listed.
After the date for any distribution of junior subordinated debt securities
upon dissolution of Bank United Capital Trust:
o the trust preferred securities will no longer be deemed to be
outstanding;
o the securities depositary or its nominee, as the record holder of
the trust preferred securities, will receive a registered global
certificate or certificates representing the junior subordinated
debt securities to be delivered upon such distribution; and
o any certificates representing trust preferred securities not held
by the depositary or its nominee will be deemed to represent
junior subordinated debt securities having a total principal
amount equal to the total stated liquidation amount of, with an
interest rate identical to the distribution rate of, and with
accrued and unpaid interest equal to accrued and unpaid
distributions on, those trust preferred securities until those
certificates are presented to us or our agent for transfer or
reissuance.
We cannot provide any assurance as to the market prices for either the
trust preferred securities or the junior subordinated debt securities that may
be distributed in exchange for the trust preferred securities if a dissolution
and liquidation of Bank United Capital Trust were to occur. Accordingly, the
trust preferred securities that an investor may purchase, whether as a result of
the offer made through this prospectus or in the secondary market, or the junior
subordinated debt securities that an investor may receive if a dissolution and
liquidation of Bank United Capital Trust were to occur, may trade at a discount
to the price that the investor paid to purchase the trust preferred securities
offered through this prospectus.
REDEMPTION PROCEDURES. Bank United Capital Trust may not redeem fewer than
all the outstanding trust securities unless all accrued and unpaid distributions
have been paid on all trust securities for all distribution periods terminating
on or before the date of redemption. In the event that fewer than all of the
outstanding trust securities are to be redeemed, the trust securities will be
redeemed proportionately.
If Bank United Capital Trust gives a notice of redemption in respect of the
trust securities, which notice will be irrevocable, then, by 12:00 noon, New
York City time, on the redemption date, and if we have paid to the Property
Trustee a sufficient amount of cash in connection with the related redemption or
maturity of the junior subordinated debt securities, the Property Trustee will
irrevocably deposit with the depositary funds sufficient to pay the applicable
Redemption Price and will give the depositary irrevocable instructions and
authority to pay the Redemption Price to the holders of the trust preferred
securities, and the paying agent will pay the applicable Redemption Price to the
holders of the trust common securities by check. If notice of redemption has
been given and funds deposited as required, then, immediately prior to the close
of business on the date of the deposit, distributions will cease to accrue and
all rights of holders of trust preferred securities so called for redemption
will cease, except the right of the holders of the trust preferred securities to
receive the Redemption Price but without interest on the Redemption Price. In
the event that any date fixed for redemption of trust
25
preferred securities is not a business day, then payment of the Redemption Price
payable on that date will be made on the next succeeding day that is a business
day, without any interest or other payment in respect of any such delay, except
that, if that business day falls in the next calendar year, payment will be made
on the immediately preceding business day. In the event that payment of the
Redemption Price in respect of trust preferred securities is improperly withheld
or refused and not paid either by Bank United Capital Trust or by us under the
trust preferred securities guarantee, distributions on the trust preferred
securities will continue to accrue at the then applicable rate from the original
redemption date to the date of payment, in which case the actual payment date
will be considered the date fixed for redemption for purposes of calculating the
Redemption Price.
Subject to the foregoing and applicable law, including, without limitation,
U.S. federal securities laws, we or our subsidiaries may at any time, and from
time to time, purchase outstanding trust preferred securities by tender, in the
open market or by private agreement.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION. The amended declaration states
that Bank United Capital Trust will be dissolved:
o on the expiration of the term of Bank United Capital Trust;
o upon our bankruptcy;
o upon the filing of a certificate of dissolution or its equivalent
with respect to us;
o upon the filing of a certificate of cancellation with respect to
Bank United Capital Trust after obtaining the consent of at least
a majority in liquidation amount of the trust preferred
securities, voting together as a single class;
o 90 days after the revocation of our charter, but only if the
charter is not reinstated during that 90-day period;
o upon the distribution of the related junior subordinated debt
securities directly to the holders of the trust securities;
o upon the redemption of all of the trust securities; or
o upon entry of a court order for the dissolution of us or Bank
United Capital Trust.
In the event of a dissolution, after Bank United Capital Trust pays all
amounts owed to creditors, the holders of the trust preferred securities will be
entitled to receive:
o cash equal to the total liquidation amount of each trust
preferred security specified in an accompanying prospectus
supplement, plus accumulated and unpaid distributions to the date
of payment, or
o junior subordinated debt securities in a total principal amount
equal to the total liquidation amount of the trust preferred
securities.
If Bank United Capital Trust cannot pay the full amount due on its trust
securities because insufficient assets are available for payment, then the
amounts payable by Bank United Capital Trust on its trust securities will be
paid proportionately. However, if an event of default under the related amended
declaration has occurred, the total amounts due on the trust preferred
securities will be paid before any distribution on the trust common securities.
DECLARATION EVENTS OF DEFAULT. An event of default under the junior
subordinated indenture relating to the junior subordinated debt securities is an
event of default under the amended declaration (a "Declaration Event of
Default"). See "-- Junior Subordinated Debt Securities -- Events of Default
Under the Junior Subordinated Indenture."
In addition, the voluntary or involuntary dissolution, winding up or
termination of Bank United Capital Trust is also a Declaration Event of Default,
except in connection with:
o the distribution of the junior subordinated debt securities to
holders of the trust securities of Bank United Capital Trust,
26
o the redemption of all of the trust securities of Bank United
Capital Trust, and
o mergers, consolidations or amalgamations permitted by the amended
declaration of Bank United Capital Trust.
Under the amended declaration, the holder of the trust common securities
will be deemed to have waived any Declaration Event of Default with respect to
the trust common securities until all Declaration Events of Default with respect
to the trust preferred securities have been cured, waived or otherwise
eliminated. Until all Declaration Events of Default with respect to the trust
preferred securities have been so cured, waived, or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the holders of
the trust preferred securities and only the holders of the trust preferred
securities will have the right to direct the Property Trustee with respect to
certain matters under the amended declaration and the junior subordinated
indenture. In the event that any Declaration Event of Default with respect to
the trust preferred securities is waived by the holders of the trust preferred
securities as provided in the amended declaration, under the amended declaration
the holders of trust common securities have agreed that the waiver also
constitutes a waiver of the Declaration Event of Default with respect to the
trust common securities for all purposes under the amended declaration without
any further act, vote or consent of the holders of trust common securities.
We and the Regular Trustees must file annually with the Property Trustee a
certificate evidencing compliance with all the applicable conditions and
covenants under the amended declaration.
Upon the occurrence of a Declaration Event of Default, the Property
Trustee, as the sole holder of the junior subordinated debt securities, will
have the right under the junior subordinated indenture to declare the principal
of, premium, if any, and interest on the junior subordinated debt securities to
be immediately due and payable.
If a Property Trustee fails to enforce its rights under the amended
declaration or the junior subordinated indenture to the fullest extent permitted
by law and subject to the terms of the amended declaration and the junior
subordinated indenture, any holder of trust preferred securities may sue us, or
seek other remedies, to enforce the Property Trustee's rights under the amended
declaration or the junior subordinated indenture without first instituting a
legal proceeding against the Property Trustee or any other person. If a
Declaration Event of Default occurs and is continuing as a result of our failure
to pay principal of or premium, if any, or interest on the junior subordinated
debt securities when payable, then a holder of the trust preferred securities
may directly sue us or seek other remedies, to collect its proportionate share
of payments owned. See "Relationship Among The Trust Preferred Securities, The
Trust Preferred Securities Guarantee And The Junior Subordinated Notes Held By
Bank United Capital Trust."
REMOVAL AND REPLACEMENT OF TRUSTEES. Only the holders of trust common
securities have the right to remove or replace the trustees of Bank United
Capital Trust, except that while an event of default in respect of the junior
subordinated debt securities has occurred or is continuing, the holders of a
majority of the trust preferred securities will have this right. The resignation
or removal of any trustee and the appointment of a successor trustee will be
effective only on the acceptance of appointment by the successor trustee in
accordance with the provisions of the amended declaration.
CONVERSION OR EXCHANGE RIGHTS. The terms on which the trust preferred
securities are convertible into or exchangeable for common stock or our other
securities will be contained in the applicable prospectus supplement. Those
terms will include provisions as to whether conversion or exchange is mandatory,
at the option of the holder or at our option, and may include provisions under
which the number of shares of common stock or our other securities to be
received by the holders of trust preferred securities would be subject to
adjustment.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS OF BANK UNITED CAPITAL
TRUST. Bank United Capital Trust may not consolidate, amalgamate, merge with or
into, or be replaced by or convey, transfer or lease their properties and assets
substantially as an entirety to any other corporation or other body (each, a
"Merger Event"), except as described below. Bank United Capital Trust may,
27
with the consent of a majority of its Regular Trustees and without the consent
of the holders of its trust securities, consolidate, amalgamate, merge with or
into, or be replaced by another trust, provided that:
o the successor entity either
1) assumes all of the obligations of Bank United Capital Trust
relating to its trust securities, or
2) substitutes other securities for the trust securities that
are substantially similar to the trust securities, so long
as the successor securities rank the same as the trust
securities for distributions and payments upon liquidation,
redemption and otherwise;
o we acknowledge a trustee of the successor entity who has the same
powers and duties as the Property Trustee of Bank United Capital
Trust, as the holder of the junior subordinated debt securities;
o the trust preferred securities are listed, or any successor
securities will be listed, upon notice of issuance, on the same
securities exchange or other organization that the trust
preferred securities are then listed;
o the Merger Event does not cause the trust preferred securities or
successor securities to be downgraded by any nationally
recognized rating agency;
o the Merger Event does not adversely affect the rights,
preferences and privileges of the holders of the trust securities
or successor securities in any material way, other than with
respect to any dilution of the holders' interest in the new
entity;
o the successor entity has a purpose identical to that of Bank
United Capital Trust;
o prior to the Merger Event, we have received an opinion of counsel
from a nationally recognized law firm stating that
1) the Merger Event does not adversely affect the rights of the
holders of the trust preferred securities or any successor
securities in any material way, other than with respect to
any dilution of the holders' interest in the new entity, and
2) following the Merger Event, neither Bank United Capital
Trust nor the successor entity will be required to register
as an investment company under the Investment Company Act;
and
o we guarantee the obligations of the successor entity under the
successor securities in the same manner as in the trust preferred
securities guarantee.
In addition, unless all of the holders of the trust preferred securities
and trust common securities approve otherwise, Bank United Capital Trust will
not consolidate, amalgamate, merge with or into, or be replaced by any other
entity or permit any other entity to consolidate, amalgamate, merge with or
into, or replace it, if, in the opinion of a nationally recognized tax counsel
experienced in such matters, the transaction would cause Bank United Capital
Trust or the successor entity to be classified other than as a grantor trust for
U.S. federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF DECLARATION. The holders of trust preferred
securities have no voting rights except as discussed under " -- Mergers,
Consolidations or Amalgamations of Bank United Capital Trust" and
"Guarantees -- Amendments and Assignment," and as otherwise required by law
and the amended declaration.
The amended declaration may be amended if approved by a majority of the
Regular Trustees of Bank United Capital Trust. However, if any proposed
amendment provides for, or the Regular Trustees otherwise propose to effect,
1) any action that would adversely affect the powers, preferences or
special rights of the trust securities, whether by way of
amendment to the amended declaration or otherwise, or
28
2) the dissolution, winding-up or termination of Bank United Capital
Trust other than under the terms of its amended declaration,
then the holders of the trust preferred securities as a single class will be
entitled to vote on the amendment or proposal. In that case, the amendment or
proposal will only be effective if approved by at least a majority in
liquidation amount of the trust preferred securities affected by the amendment
or proposal.
No amendment may be made to an amended declaration if that amendment would:
o cause Bank United Capital Trust to be characterized as other than
a grantor trust for U.S. federal income tax purposes;
o reduce or otherwise adversely affect the powers of the Property
Trustee; or
o cause Bank United Capital Trust to be deemed to be an "investment
company" which is required to be registered under the Investment
Company Act.
The holders of a majority of the total liquidation amount of the trust
preferred securities have the right to:
o direct the time, method and place of conducting any proceeding
for any remedy available to the Property Trustee; or
o direct the exercise of any trust or power conferred upon the
Property Trustee under the amended declaration, including the
right to direct the Property Trustee, as the holder of the junior
subordinated debt securities, to
1) exercise the remedies available under the junior
subordinated indenture with respect to the junior
subordinated debt securities,
2) waive any event of default under the junior subordinated
indenture that is waivable, or
3) cancel an acceleration of the principal of the junior
subordinated debt securities.
However, if the junior subordinated indenture requires the consent of the
holders of a super-majority of the total principal amount of the junior
subordinated debt securities, then the Property Trustee must get approval of the
holders of a super-majority in liquidation amount of the trust preferred
securities.
In addition, before taking any of the foregoing actions, the Property
Trustee must obtain an opinion of counsel stating that, as a result of that
action, Bank United Capital Trust will continue to be classified as a grantor
trust for U.S. federal income tax purposes.
The Property Trustee will notify all trust preferred securities holders of
any notice received from the Indenture Trustee with respect to the junior
subordinated debt securities held by Bank United Capital Trust.
As described in the amended declaration, the Property Trustee may hold a
meeting to have holders of trust preferred securities vote on a change or have
them approve a change by written consent.
If a vote by the holders of trust preferred securities is taken or a
consent is obtained, any trust preferred securities that are owned by us or any
of our affiliates will, for purposes of the vote or consent, be treated as if
they were not outstanding, which will have the following consequences:
o we and any of our affiliates will not be able to vote on or
consent to matters requiring the vote or consent of holders of
trust preferred securities; and
o any trust preferred securities owned by us or any of our
affiliates will not be counted in determining whether the
required percentage of votes or consents has been obtained.
INFORMATION CONCERNING THE PROPERTY TRUSTEE. For matters relating to
compliance with the Trust Indenture Act, the Property Trustee will have all of
the duties and responsibilities of an indenture trustee under the Trust
Indenture Act. The Property Trustee, other than during the occurrence and
continuance of a Declaration Event of Default, undertakes to perform only the
duties that are
29
specifically described in the amended declaration and, upon a Declaration Event
of Default, must use 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 given it by the applicable amended declaration at the request of any
holder of trust preferred securities unless it is offered reasonable security or
indemnity against the costs, expenses and liabilities that it might incur.
However, the holders of the trust preferred securities will not be required to
offer such an indemnity where the holders, by exercising their voting rights,
direct the Property Trustee to take any action following a Declaration Event of
Default.
MISCELLANEOUS. The Regular Trustees are authorized and directed to conduct
the affairs of and to operate Bank United Capital Trust in a way that:
o will not cause it to be deemed to be an "investment company"
required to be registered under the Investment Company Act;
o will cause it to be classified as a grantor trust for U.S.
federal income tax purposes; and
o will cause the junior subordinated debt securities it holds to be
treated as our indebtedness for U.S. federal income tax purposes.
We and the Regular Trustees are authorized to take any action, so long as
it is consistent with applicable law or the certificate of trust or amended
declaration, that we and the Regular Trustees determine to be necessary or
desirable for those purposes.
Holders of trust preferred securities have no preemptive or similar rights.
Bank United Capital Trust may not borrow money, issue debt, execute
mortgages or pledge any of its assets.
GOVERNING LAW. The amended declaration and the related trust preferred
securities will be governed by and construed in accordance with the laws of the
State of Delaware.
GUARANTEES
We will execute a trust preferred securities guarantee, for the benefit of
the holders of trust preferred securities, at the time that Bank United Capital
Trust issues the trust preferred securities. The trust preferred securities
guarantee will be qualified as an indenture under the Trust Indenture Act. The
Bank of New York will act as the trustee (the "Guarantee Trustee") under the
trust preferred securities guarantee for the purposes of compliance with the
Trust Indenture Act. The terms of the trust preferred securities guarantee will
be those contained in the trust preferred securities guarantee and those made
part of the trust preferred securities guarantee by the Trust Indenture Act. The
following is a summary of the principal terms of the trust preferred securities
guarantee. This summary is not complete and is qualified in its entirety by
reference to the form of trust preferred securities guarantee, which is filed as
an exhibit to the registration statement of which this prospectus forms a part
or is incorporated by reference, and the Trust Indenture Act. The Guarantee
Trustee will hold the trust preferred securities guarantee for the benefit of
the holders of trust preferred securities.
We will irrevocably agree, as described in the trust preferred securities
guarantee, to pay in full, to the holders of the trust preferred securities
issued by Bank United Capital Trust, the trust preferred securities guarantee
payments, except to the extent previously paid, when and as due, regardless of
any defense, right of set-off or counterclaim which Bank United Capital Trust
may have or assert. The following payments, to the extent not paid by Bank
United Capital Trust, will be covered by the trust preferred securities
guarantee:
o any accrued and unpaid distributions required to be paid on the
trust preferred securities, to the extent that Bank United
Capital Trust has funds available to make the payment;
o the redemption price, to the extent that Bank United Capital
Trust has funds available to make the payment; and
o upon a voluntary or involuntary dissolution and liquidation of
Bank United Capital Trust, other than in connection with a
distribution of junior subordinated debt securities to
30
holders of the trust preferred securities or the redemption of all
the trust preferred securities, the lesser of
1) the total of the liquidation amount specified in the
prospectus supplement for each trust preferred security plus
all accrued and unpaid distributions on the trust preferred
securities to the date of payment, to the extent Bank United
Capital Trust has funds available to make the payment, and
2) amount of assets of Bank United Capital Trust remaining
available for distribution to holders of its trust preferred
securities upon a dissolution and liquidation of the trust.
Our obligation to make a trust preferred securities guarantee payment may
be satisfied by directly paying the required amounts to the holders of the trust
preferred securities or by causing Bank United Capital Trust to pay the amounts
to the holders.
The trust preferred securities guarantee will be a guarantee on a
subordinated basis with respect to the trust preferred securities from the time
of issuance of the trust preferred securities, but will not apply to any payment
of distributions or redemption price, or to payments upon the dissolution,
winding-up or termination of Bank United Capital Trust, except to the extent
Bank United Capital Trust has funds available therefor. If we do not make
interest payments on the junior subordinated debt securities, Bank United
Capital Trust will not pay distributions on the trust preferred securities and
will not have funds available therefor. See "-- Junior Subordinated Debt
Securities."
No single document executed by us relating to the issuance of trust
preferred securities will provide for our full, irrevocable and unconditional
guarantee of the trust preferred securities. It is our obligations under the
junior subordinated indenture, the trust preferred securities guarantee and
amended declaration taken together that have the effect of providing a full,
irrevocable and unconditional guarantee of the trust's obligations under its
trust preferred securities.
STATUS OF THE TRUST PREFERRED SECURITIES GUARANTEE. Our obligations under
the trust preferred securities guarantee will rank junior in priority of payment
to all of our senior indebtedness. This means that we cannot make any payments
on the trust preferred securities guarantee if we default on a payment of senior
indebtedness and do not cure the default within the applicable grace period, or
if the senior indebtedness becomes immediately due because of a default and has
not yet been paid in full. In addition, our obligations under the trust
preferred securities guarantee will rank junior to all existing and future
liabilities of our subsidiaries.
The amended declaration will require that the holder of trust preferred
securities accept the subordination provisions and other terms of the trust
preferred securities guarantee. The trust preferred securities guarantee will
constitute a guarantee of payment and not of collection. In other words, the
holder of the guaranteed security may sue us, or seek other remedies, to enforce
its rights under the trust preferred securities guarantee without first suing
any other person or entity. A trust preferred securities guarantee will not be
discharged except by payment of the trust preferred securities guarantee
payments in full to the extent not previously paid or upon distribution of the
junior subordinated debt securities to the holders of trust preferred securities
under the amended declaration.
MATERIAL COVENANTS RELATED TO THE TRUST PREFERRED SECURITIES GUARANTEE. In
the trust preferred securities guarantee, we will covenant that, so long as any
trust preferred securities remain outstanding, if there is an event of default
under the trust preferred securities guarantee or the amended declaration:
o we will not make distributions related to our debt securities
that rank equally with or junior to the junior subordinated debt
securities, including any payment of interest, principal or
premium, or repayments, repurchases or redemptions; and
o we will not make distributions related to our capital stock,
including dividends, redemptions, repurchases, liquidation
payments, or guarantee payments. We may, however, make
distributions in connection with any of the following:
31
1) repurchases, redemptions or other acquisitions of shares of
our capital stock in connection with any employment
contract, benefit plan or other similar arrangement with or
for the benefit of employees, officers, directors or
consultants,
2) an exchange or conversion of any class or series of our
capital stock for any other class or series of our capital
stock, or
3) the purchase of fractional interests in shares of our
capital stock under the conversion or exchange provisions of
such capital stock or the security being converted or
exchanged.
The trust preferred securities guarantee, however, will except from the above
any stock dividends paid by us where the dividend stock is the same stock as
that on which the dividend is being paid.
AMENDMENTS AND ASSIGNMENT. Except with respect to any changes which do not
adversely affect the rights of holders of trust preferred securities in any
material respect, in which case no consent of those holders will be required, a
trust preferred securities guarantee may only be amended with the prior approval
of the holders of at least a majority of the total liquidation amount of the
trust preferred securities, excluding any such trust preferred securities held
by us or any of our affiliates. A description of the requirements for obtaining
any approval is described under "Trust Preferred Securities -- Voting Rights;
Amendment of Declaration." All guarantees and agreements contained in the trust
preferred securities guarantee will be binding on our successors, assigns,
receivers, trustees and representatives and are for the benefit of the holders
of the applicable trust preferred securities.
TRUST PREFERRED SECURITIES GUARANTEE EVENTS OF DEFAULT. An event of
default under the trust preferred securities guarantee will occur if we fail to
make any of our required payments or perform our obligations under the trust
preferred securities guarantee.
The holders of at least a majority of the total liquidation amount of the
trust preferred securities, excluding any trust preferred securities held by us
or any of our affiliates, will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee or to direct the exercise of any trust or power given to the Guarantee
Trustee under the trust preferred securities guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE. The Guarantee Trustee under
the trust preferred securities guarantee, other than during the occurrence and
continuance of an event of default under the trust preferred securities
guarantee, will only perform the duties that are specifically described in such
trust preferred securities guarantee. After such a default, the Guarantee
Trustee will 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 its
powers as described in the trust preferred securities guarantee at the request
of any holder of covered trust preferred securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that it might
incur.
TERMINATION OF THE TRUST PREFERRED SECURITIES GUARANTEE. The trust
preferred securities guarantee will terminate once the trust preferred
securities are paid in full or upon distribution of the junior subordinated debt
securities to the holders of the trust preferred securities. The trust preferred
securities guarantee will continue to be effective or will be reinstated if at
any time any holder of trust preferred securities must restore payment of any
sums paid under the trust preferred securities or the trust preferred securities
guarantee.
GOVERNING LAW. The trust preferred securities guarantee will be governed
by and construed in accordance with the laws of the State of New York.
STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
We may issue stock purchase contracts, including contracts obligating
holders to purchase from us, and we to sell to the holders, a specified number
of shares of common stock at a future date or dates. The consideration per share
of common stock may be fixed at the time the stock purchase contracts are issued
or may be determined by reference to a specific formula described in the stock
purchase contracts. We may issue the stock purchase contracts separately or as a
part of stock
32
purchase units consisting of a stock purchase contract and one or more shares of
our preferred stock or fractions thereof or a debt security or a debt obligation
of us or a third party, including a U.S. Treasury security. Our preferred stock
or our debt security or the debt obligation of a third party may serve as
collateral to secure the holders' obligations to purchase the shares of common
stock under the stock purchase contracts. The stock purchase contracts may
require us to make periodic payments to the holders of stock purchase contracts.
These payments may be unsecured or prefunded on some basis. The stock purchase
contracts may require holders to secure their obligations in a specified manner.
The applicable prospectus supplement will describe the specific terms of any
stock purchase contracts or stock purchase units.
RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES,
THE TRUST PREFERRED SECURITIES GUARANTEE
AND THE JUNIOR SUBORDINATED NOTES HELD BY BANK UNITED CAPITAL TRUST
We will guarantee payments of distributions and redemption and liquidation
payments due on the trust preferred securities, to the extent the trust has
funds available for the payments, to the extent described under "Description of
Offered Securities -- Guarantees." No single document executed by us in
connection with the issuance of the trust preferred securities will provide for
our full, irrevocable and unconditional guarantee of the trust preferred
securities. It is only the combined operation of our obligations under the trust
preferred securities guarantee, the amended declaration and the junior
subordinated indenture that has the effect of providing a full, irrevocable and
unconditional guarantee of Bank United Capital Trust's obligations under the
trust preferred securities.
As long as we make payments of interest and other payments when due on the
junior subordinated debt securities held by Bank United Capital Trust, those
payments will be sufficient to cover the payment of distributions and redemption
and liquidation payments due on the trust preferred securities issued by Bank
United Capital Trust, primarily because:
o the total principal amount of the junior subordinated debt
securities will be equal to the sum of the total liquidation
amount of the trust securities;
o the interest rate and interest and other payment dates on the
junior subordinated debt securities will match the distribution
rate and distribution and other payment dates for the trust
preferred securities;
o we will pay for any and all costs, expenses and liabilities
of Bank United Capital Trust except its obligations under
its trust preferred securities; and
o each amended declaration provides that Bank United Capital
Trust will not engage in any activity that is not consistent
with the limited purposes of Bank United Capital Trust.
If and to the extent that we do not make payments on the junior
subordinated debt securities, Bank United Capital Trust will not have funds
available to make payments of distributions or other amounts due on its trust
preferred securities. In those circumstances, you will not be able to rely upon
the trust preferred securities guarantee for payment of these amounts. Instead,
you may directly sue us or seek other remedies to collect your proportionate
share of payments owed. If you sue us to collect payment, then we will assume
your rights as a holder of trust preferred securities under the amended
declaration to the extent we make a payment to you in any such legal action.
33
SELLING STOCKHOLDERS
The selling stockholders are the general partners and some of the limited
partners of Hyperion Partners L.P., a Delaware limited partnership, and three
other entities with which an affiliate of Hyperion Partners has a fiduciary
relationship. The applicable prospectus supplement for any offering of Class A
common stock by selling stockholders will include the following information:
o the name of the selling stockholders;
o the number of shares held by each of the selling stockholders;
o the percentage of the class of shares held by each of the selling
stockholders; and
o the number of shares of Class A common stock offered by each of
the selling stockholders.
SELLING STOCKHOLDER LETTER AGREEMENT
The following summary of the material provisions of the letter agreement
that affects the selling stockholders is qualified in its entirety by reference
to the letter agreement that we filed as an exhibit to the registration
statement on Form S-1 (File No. 333-06229), which we filed with the Commission
on August 7, 1996 in connection with our IPO. Please review the exhibit for
further details not described in the summary in this section.
In connection with our IPO in August, 1996, some of the holders of our
common stock, including all of the selling stockholders with the exception of
the FDIC, entered into a letter agreement with us. This letter agreement
restricts the holders' ability to sell our common stock, other than the shares
sold in the IPO, for a specific period of time. Under the terms of the letter
agreement, each selling stockholder who retained shares of common stock
following the IPO was not permitted to sell such shares for (1) one year after
the IPO, if the stock was received in respect of general partnership interests
in Hyperion Partners, or (2) six months after the IPO, if the stock was received
in respect of limited partnership interests in Hyperion Partners (although a
regulated New Jersey insurance company was permitted to sell shares in a private
off-market transaction subject to Rule 144 limits and reasonable representations
requested by the underwriters). Each holder of 5% or more of our common stock
was permitted to sell up to 45% of such holder's shares of common stock in the
IPO, except for certain affiliates of Lehman Brothers Inc., which were
prohibited from selling any shares until August 8, 1998. Any other selling
stockholder was permitted to sell up to 16% of its shares in the IPO. Each
selling stockholder acknowledged that, except for shares that could have been
sold under the IPO but were not sold at the election of a 5% stockholder, no 5%
stockholder is permitted by our by-laws to acquire or transfer any shares of our
capital stock for three years following the IPO (or upon termination of the
letter agreement, if earlier) unless as of an earlier date our Board determines
that such acquisition or transfer would not be reasonably likely to have a
material adverse effect on our tax position.
At March 31, 1999, 8,205,778 shares of our common stock were still subject
to the restrictions of the letter agreement. The letter agreement was terminated
for 7,887,436 shares on June 4, 1999 and will terminate for the remaining
318,342 shares on July 28, 1999.
Under the letter agreement, we filed registration statements under the
Securities Act with respect to 19,520,596 shares of Class A common stock held by
the selling stockholders. We are obligated to take action to keep such
registration statements effective, subject to occasional periods of suspension
of effectiveness as necessary, until the first to occur of:
o the date on which all shares of common stock registered under the
registration statements have been sold;
o December 31, 1999; and
o the date on which such registration under the Securities Act is
no longer required to sell such shares without restriction.
34
These registration statements, of which this prospectus forms a part, which
register 8,205,778 shares still restricted under the letter agreement and the
966,037 shares that have not been registered is being filed in order to register
the remaining common shares subject to our registration obligation under the
letter agreement.
PLAN OF DISTRIBUTION
We may sell Class A common stock, preferred stock, depositary shares,
junior subordinated debt securities, Guarantees, stock purchase contracts or
stock purchase units. Bank United Capital Trust may sell trust preferred
securities; and the selling stockholders may sell Class A common stock. All of
these securities may be offered in one or more of the following ways from time
to time:
o to underwriters for resale to the public or to investors;
o directly to investors; or
o through agents to the public or to investors.
The applicable prospectus supplements will contain the terms of the
offering of the securities, including the name or names of any underwriters or
agents, the initial public offering price of the securities and the proceeds to
us, Bank United Capital Trust, or the selling stockholders, as the case may be,
from the sale, any underwriting discounts or agency fees and other items
constituting underwriters' or agents' compensation, any discounts or concessions
allowed or reallowed or paid to dealers and any securities exchanges on which
the securities may be listed.
If underwriters are used in the sale, the offered securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
Unless otherwise set forth in a prospectus supplement, the obligations of
the underwriters to purchase any series of securities will be subject to certain
conditions and the underwriters will be obligated to purchase all the securities
of the series, if any are purchased.
Underwriters and agents may be entitled under agreements entered into with
us and/or Bank United Capital Trust and/or the selling stockholders to
indemnification by us and/or Bank United Capital Trust and/or the selling
stockholders against certain civil liabilities, including liabilities under the
Securities Act, or to contribution with respect to payments which the
underwriters or agents may be required to make in respect thereof. Underwriters
and agents may be customers of, engage in transactions with, or perform services
for us and our affiliates in the ordinary course of business.
Each series of offered securities will be a new issue of securities and
will have no established trading market other than the Class A common stock,
which is listed on the Nasdaq, Any Class A common stock sold under a prospectus
supplement will be listed on the Nasdaq, subject to official notice of issuance.
Any underwriters to whom securities are sold by us, by Bank United Capital Trust
or the selling stockholders for public offering and sale may make a market in
the securities, but those underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. The securities may or
may not be listed on a national securities exchange.
We cannot assure you that we, Bank United Capital Trust or the selling
stockholders will offer or sell any securities under this prospectus.
Neither we nor Bank United Capital Trust will receive any proceeds from the
sales of shares of Class A common stock by the selling stockholders. We will,
however, bear certain expenses in connection with the registration of the
securities being offered under this prospectus by Bank United Capital Trust and
the selling stockholders, including all costs incident to the offering and sale
of the securities to the public other than any commissions and discounts of
underwriters, dealers or agents and any transfer taxes.
35
The selling stockholders, and any broker-dealer who acts in connection with
the sale of the offered securities may be deemed to be an "underwriter" as
that term is defined in the Securities Act, and any commissions received by them
and profit on any resale of the offered securities as principal may be deemed to
be underwriting discounts and commissions under the Securities Act.
We have not authorized anyone, including any salesman or broker, to give
oral or written information about this offering that is different from the
information included in this prospectus or that is not included in this
prospectus.
LEGAL MATTERS
Wachtell, Lipton, Rosen & Katz, New York, New York will pass upon the
validity of the Class A common stock, the preferred stock, the depositary
shares, the trust preferred securities, the junior subordinated debt securities,
the trust preferred securities guarantee, the stock purchase contracts, the
stock purchase units and certain related matters and certain U.S. federal income
tax matters for us, the selling stockholders and Bank United Capital Trust.
Simpson Thacher & Bartlett, New York, New York will pass upon certain legal
matters relating to the offered securities for the underwriters, as described in
the applicable prospectus supplement.
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this prospectus by reference from Bank United Corp.'s Annual
Report on Form 10-K for the year ended September 30, 1998 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report, which is
incorporated by reference in this prospectus, and have been so incorporated in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
With respect to the unaudited interim financial information for the periods
ended December 31, 1998 and March 31, 1999 which are incorporated herein by
reference, Deloitte & Touche have applied limited procedures in accordance with
professional standards for a review of such information. However, as stated in
their report included in Bank United Corp.'s Quarterly Report on Form 10-Q for
the quarters ended December 31, 1998 and March 31, 1999 and incorporated by
reference herein, they did not audit and they do not express an opinion on that
interim financial information. Accordingly, the degree of reliance on their
reports on such information should be restricted in light of the limited nature
of the review procedures applied. Deloitte & Touche are not subject to the
liability provisions of Section 11 of the Securities Act of 1933 for their
reports on the unaudited interim financial information because those reports are
not "reports" or a "part" of the registration statement prepared or
certified by an accountant within the meaning of Sections 7 and 11 of the
Securities Act.
FORWARD-LOOKING INFORMATION
Statements and financial discussion and analysis contained in this
prospectus that are not historical facts are forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements involve a number of risks and
uncertainties. The important factors that could cause actual results to differ
materially from the forward-looking statements include, without limitation:
INTEREST RATES AND ECONOMY
o changes in interest rates and economic conditions;
o changes in the levels of loan prepayments and the resulting
effects on the value of our loan and servicing portfolios and the
related hedging instruments;
36
o changes in local economic and business conditions adversely
affecting our borrowers and their ability to repay their loans
according to their terms or impacting the value of the related
collateral; and
o changes in local economic and business conditions adversely
affecting our customers other than borrowers and their ability to
transact profitable business with us.
COMPETITION AND PRODUCT AVAILABILITY
o Increased competition for deposits and loans adversely affecting
rates and terms;
o changes in availability of loans originated by other financial
institutions or our ability to purchase such loans on favorable
terms;
o changes in availability of single family servicing rights in the
marketplace and our ability to purchase such assets on favorable
terms; and
o various strategic alternatives that we consider from time to
time, including acquisitions of other depository institutions,
their assets or their liabilities on terms favorable to us, and
our successful integration of any such acquisitions.
CHANGE IN OUR ASSET MIX
o Increased credit risk in our assets and increased operating risk
caused by an increase in commercial and consumer loans and a
decrease in single family mortgage loans as a percentage of the
total loan portfolio.
LIQUIDITY AND CAPITAL
o Changes in the availability of funds resulting in increased costs
or reduced liquidity;
o changes in our ability to pay dividends on our common stock; and
o increased asset levels and changes in the composition of assets
and the resulting impact on the Bank's capital levels and
regulatory capital ratios.
SYSTEMS
o Our ability to acquire, operate and maintain cost effective and
efficient systems; and
o our ability to complete our project to assess and resolve any
Year 2000 problems on time.
PERSONNEL
o The loss of senior management or operating personnel and the
potential inability to hire qualified personnel at reasonable
compensation levels.
REGULATORY, COMPLIANCE AND LEGAL
o Changes in applicable statutes and government regulations or
their interpretations;
o claims of our noncompliance with statutory and regulatory
requirements;
o claims with respect to representations and warranties made by us
to purchasers and insurers of mortgage loans and to purchasers of
mortgage servicing rights; and
o changes in the status of litigation to which we are a party.
ABOUT THIS PROSPECTUS
This prospectus is part of registration statements that we filed with the
Commission utilizing a "shelf" registration procedure. Under this shelf
procedure, we, the selling stockholders and Bank United Capital Trust may, from
time to time, sell any combination of the securities described in this
prospectus in one or more offerings up to a total offering price of $830
million.
37
This prospectus provides you with a general description of the securities
that we, the selling stockholders or Bank United Capital Trust may offer. We
will provide a prospectus supplement that will contain specific information
about the terms of each offering of securities. The prospectus supplement may
also add, update or change information contained in this prospectus. You should
read both this prospectus and any prospectus supplement together with the
additional information described under the heading "Where You Can Find More
Information" below.
You should rely only on the information provided in this prospectus and in
any prospectus supplement, including the information incorporated by reference.
We have not authorized anyone to provide you with different information. You
should not assume that the information in this prospectus, or any supplement to
this prospectus, is accurate at any date other than the date indicated on the
cover page of these documents.
We are not offering the securities in any state where the offer is not
permitted.
WHERE YOU CAN FIND MORE INFORMATION
The rules and regulations of the Commission allow us to omit some of the
information included in the registration statement from this prospectus. The
registration statement, including the attached exhibits and schedules, contains
additional relevant information about us and our securities.
In addition, we file reports, proxy statements and other information with
the Commission under the Securities Exchange Act of 1934. You may read and copy
this information at the following locations of the Commission:
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois
60661-2511
You may obtain information on the operation of the Public Reference Room by
calling the Commission at 1-800-SEC-0330. The Commission also maintains an
Internet world wide web site that contains reports, proxy statements and other
information about issuers, like us, who file electronically with the Commission.
The address of that site is http://www.sec.gov.
The Commission allows us to "incorporate by reference" the information we
file with it, which means that we can disclose important information to you by
referring you to the other information we have filed with the Commission. The
information that we incorporate by reference is considered to be part of this
prospectus, and later information that we file with the Commission will
automatically update and supersede the information we've included in this
prospectus. We incorporate by reference the documents listed below:
o Our Annual Report on Form 10-K for the year ended September 30,
1998.
o Our Quarterly Reports on Form 10-Q for the quarters ended
December 31, 1998 and March 31, 1999.
o Our Current Reports on Form 8-K filed on March 24, 1999, April 2,
1999 and June 9, 1999, as amended by current report on Form 8-K/A
filed on June 23, 1999.
o The description of our Class A common stock contained in our Form
8-A dated July 12, 1996.
o Our Proxy Statement for the Annual Meeting of Stockholders dated
February 10, 1999.
We also incorporate by reference any future filings we will make with the
Commission under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of this prospectus but before the end of the offering of the securities
described in this prospectus.
38
You may request a free copy of these filings by writing or calling us at
the following address:
INVESTOR RELATIONS
BANK UNITED CORP.
3200 SOUTHWEST FREEWAY
SUITE 3100
HOUSTON, TX 77027
(713) 543-6926
This prospectus does not contain or incorporate by reference any separate
financial statements of Bank United Capital Trust. We do not believe that these
financial statements are material to prospective holders of the trust preferred
securities because:
o all of the voting securities of Bank United Capital Trust will be
owned, directly or indirectly, by us, and we are a reporting
company under the Exchange Act;
o Bank United Capital Trust has no independent operations but
exists for the sole purpose of issuing securities representing
undivided beneficial ownership interests in its assets and
investing these proceeds in the junior subordinated debt
securities issued by us; and
o the obligations of Bank United Capital Trust under the trust
preferred securities are guaranteed by us to the extent described
in this prospectus.
Bank United Capital Trust is not currently subject to the informational
reporting requirements of the Exchange Act. Bank United Capital Trust will
become subject to those requirements upon the effectiveness of the registration
statement of which this prospectus is a part, although we and Bank United
Capital Trust intend to seek and expect to receive exemptions from those
reporting requirements from the Commission.
39
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable in connection with the sale and
distribution of the securities being registered. All amounts except the
Commission registration fee are estimated.
ITEM AMOUNT
- ------------------------------------- --------
Registration fee..................... $ 41,700
Blue Sky fees and expenses........... 5,000
Printing and engraving expenses...... 10,000
Legal fees and expenses.............. 20,000
Accounting fees and expenses......... 20,000
Transfer Agent and Registrar fees.... 10,000
Miscellaneous........................ 10,000
--------
Total........................... $116,700
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Bank United Corp. is a Delaware corporation. Section 145 of the General
Corporation Law of the State of Delaware (the "DGCL") contains detailed
provisions on indemnification of directors and officers of a Delaware
corporation against expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with certain litigation.
Bank United Corp.'s Restated Certificate of Incorporation (the
"Certificate of Incorporation") provides that a director of Bank United Corp.
will not be personally liable to Bank United Corp. or its stockholders for
monetary damages for breach of fiduciary duty as a director, except, if required
by the DGCL as amended from time to time, for liability (i) for any breach of
the director's duty of loyalty to Bank United Corp. or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under Section 174 of the DGCL, which
concerns unlawful payments of dividends, stock purchases or redemptions, or (iv)
for any transaction from which the director derived an improper personal
benefit. Neither the amendment nor repeal of such provision will eliminate or
reduce the effect of such provision in respect of any matter occurring, or any
cause of action, suit or claim that, but for such provision, would accrue or
arise prior to such amendment or repeal.
While the Certificate of Incorporation provides directors with protection
from awards for monetary damages for breaches of their duty of care, it does not
eliminate such duty. Accordingly, the Certificate of Incorporation will have no
effect on the availability of equitable remedies such as an injunction or
rescission based on a director's breach of his or her duty of care.
The Certificate of Incorporation provides that each person who was or is
made a party or is threatened to be made a party to or is involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person, or a person of whom such
person is the legal representative, is or was a director or officer of Bank
United Corp. or is or was serving at the request of Bank United Corp. as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such proceeding is alleged action
in an official capacity as a director, officer, employee or agent or in any
other capacity while serving as a director, officer, employee or agent, will be
indemnified and held harmless by Bank United Corp. to the fullest extent
authorized by the DGCL, as the same exists or may hereafter be amended (but, in
the case of any such amendment, only to the extent that such amendment permits
Bank United Corp. to provide
II-1
broader indemnification rights than said law permitted Bank United Corp. to
provide prior to such amendment), against all expense, liability and loss
reasonably incurred or suffered by such person in connection therewith. Such
right to indemnification includes the right to have Bank United Corp. pay the
expenses incurred in defending any such proceeding in advance of its final
disposition, subject to the provisions of the DGCL. Such rights are not
exclusive of any other right which any person may have or thereafter acquire
under any statute, provision of the Certificate of Incorporation, By-Laws,
agreement, vote of stockholders or disinterested directors or otherwise. No
repeal or modification of such provision will in any way diminish or adversely
affect the rights of any director, officer, employee or agent of Bank United
Corp. thereunder in respect of any occurrence or matter arising prior to any
such repeal or modification. The Certificate of Incorporation also specifically
authorizes the Registrant to maintain insurance and to grant similar
indemnification rights to employees or agents of the Registrant.
Article 4 of the Amended and Restated Declaration of Trust of Bank United
Capital Trust (the "Amended Declaration") provides for the indemnification by
Bank United Corp. of the Property Trustee and the Delaware Trustee. Article 9 of
the Amended Declaration provides for the indemnification of the Regular Trustee,
the Property Trustee and the Delaware Trustee, and their affiliates, by Bank
United Capital Trust.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENTS AND SCHEDULES
(a) EXHIBITS
The following Exhibits are filed herewith or incorporated herein by
reference:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- -------------------------------------------------------------
1.1* -- Form of Underwriting Agreement relating
to Class A common stock.
1.2* -- Form of Underwriting Agreement relating
to trust preferred securities.
1.3 -- Form of Underwriting Agreement relating
to Premium Income Equity Securities
1.4 -- Form of Underwriting Agreement relating
to Series A Preferred Stock.
3.1** -- Form of Restated Certificate of
Incorporation of Bank United Corp.,
as amended (incorporated by reference
to Exhibit 3.1 to Form S-1,
Registration No. 333-06229).
3.2** -- Form of By-Laws of Bank United Corp.
(incorporated by reference to Exhibit
3.2 to Form S-1, Registration No.
333-06229).
4.1** -- Form of Class A Common Stock
(incorporated by reference to Form
8-A filed July 15, 1996).
4.2 -- Form of Certificate Evidencing Corporate PIES
(included as Exhibit A to the Form of Purchase
Contract Agreement filed as Exhibit 4.14).
4.3 -- Form of Certificate Evidencing Treasury PIES
(included as Exhibit B to the Form of Purchase
Contract Agreement filed as Exhibit 4.14).
4.4 -- Form of certificate of designation with respect
to Series A Preferred Stock.
4.5 -- Form of certificate of designation with respect
to Series B Preferred Stock.
4.6* -- Form of Deposit Agreement.
4.7* -- Form of Depositary Receipt (included
in Exhibit 4.3).
4.8** -- Form of Amended and Restated
Declaration of Trust of Bank United
Capital Trust.
4.9** -- Certificate of Trust of Bank United
Capital Trust.
4.10** -- Form of junior subordinated indenture
between Bank United Corp. and Bank of
New York, Indenture Trustee.
4.11** -- Form of trust preferred securities
guarantee between Bank United Corp.
and Bank of New York, Guarantee
Trustee.
4.12** -- Form of certificate of junior
subordinated debt securities
(included in Exhibit 4.7 above).
4.13** -- Form of certificate of trust
preferred securities of Bank United
Capital Trust (included in Exhibit
4.5 above).
4.14 -- Form of Purchase Contract Agreement
II-2
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- -------------------------------------------------------------
4.15 -- Form of Pledge Agreement
4.16 -- Form of Remarketing Agreement
5.1 -- Opinion of Wachtell, Lipton, Rosen &
Katz.
5.4* -- Opinion of Richards, Layton & Finger,
special Delaware counsel, as to
legality of the securities to be
issued by Bank United Capital Trust.
8.1 -- Opinion of Wachtell, Lipton, Rosen &
Katz as to certain federal income tax
matters.
12.1** -- Computation of ratio of earnings to
fixed charges and earnings to
combined fixed charges and preferred
dividends.
15.1** -- Letter from Deloitte & Touche LLP regarding
unaudited interim financial information.
23.1** -- Consent of Deloitte & Touche LLP.
23.2 -- Consent of Wachtell, Lipton, Rosen &
Katz (included in Exhibit 5.1).
23.5 -- Consent of Richards, Layton & Finger
(included in Exhibit 5.4).
23.6 -- Consent of Wachtell, Lipton, Rosen &
Katz (included in Exhibit 8.1).
24.1** -- Power of Attorney (see page II-6 of the Form
S-3 filed July 27, 1999).
25.1** -- Form T-1 Statement of Eligibility of
Bank of New York, Delaware to act as
Property Trustee and Delaware Trustee
under the Amended and Restated
Declaration of Trust of Bank United
Capital Trust.
25.2** -- Form T-1 Statement of Eligibility of
Bank of New York to act as Indenture
Trustee under the junior subordinated
indenture.
25.3** -- Form T-1 Statement of Eligibility of
Bank of New York to act as Guarantee
Trustee under the trust preferred
securities guarantee of Bank United
Capital Trust.
- ------------
* To be filed by amendment or by filing of a Form 8-K subsequently incorporated
by reference.
** Previously filed.
(b) FINANCIAL STATEMENTS AND SCHEDULES
Either not applicable or shown in the financial statements or notes
thereto.
ITEM 17. UNDERTAKINGS
Each of the undersigned Registrants hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement
(notwithstanding the foregoing, any increase or decrease in
the volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum
total offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration
Statement); and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement.
II-3
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment will be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time will be
deemed to be the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(4) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained
in a form of prospectus filed by each Registrant pursuant to Rule
424(b)(1) or (4) or 497 (h) under the Securities Act shall be deemed
to be part of this Registration Statement as of the time it was
declared effective. For the purpose of determining any liability under
the Securities Act, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial BONA FIDE
offering thereof.
(5) For purposes of determining any liability under the Securities Act,
each filing of the each Registrant's annual report pursuant to Section
13(a) or 15(d) of the Exchange Act (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d)
of the Exchange Act) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted as to directors, officers and controlling persons of each of
the Registrants pursuant to the DGCL, the organizational documents of the
Registrants, indemnification agreements entered into between Registrants and
their officers, directors or trustees, or otherwise, each Registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrants of expenses incurred or
paid by a director, officer, trustee or controlling person of the Registrants in
the successful defense of any action, suit, or proceeding) is asserted by such
director, officer, trustee or controlling person in connection with the
securities being registered, each Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the undersigned
Registrants certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing this Registration Statement on Form S-3 or
amendment thereto and has duly caused this Registration Statement or amendment
thereto to be signed on its behalf by the undersigned, thereunto duly
authorized, in Houston, Texas, on August 3, 1999.
BANK UNITED CAPITAL TRUST
(Registrant)
By:BANK UNITED CORP., as Sponsor
By: /s/ BARRY C. BURKHOLDER
Name: Barry C. Burkholder
Title: Chief Executive Officer
BANK UNITED CORP.
(Registrant)
By: /s/ ANTHONY J. NOCELLA
Name: Anthony J. Nocella
Title: Vice Chairman
II-5
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act, this Registration
Statement or amendment thereto has been signed by the following persons in the
capacities indicated on August 3, 1999.
SIGNATURE TITLE
- --------------------------------------------------- ------------------------------------------------------------
/s/BARRY C. BURKHOLDER Principal Executive Officer; Director
Barry C. Burkholder
* Principal Financial and Accounting Officer; Director
Anthony J. Nocella
Director
Lewis S. Ranieri
* Director
Lawrence Chimerine
* Director
David M. Golush
* Director
Paul M. Horvitz
Director
Alan E. Master
Director
Salvatore A. Ranieri
Director
Scott A. Shay
* Director
Patricia A. Sloan
* Director
Michael S. Stevens
* Director
Kendrick R. Wilson III
* The undersigned, by signing his name
hereto, does hereby sign this
registration statement on behalf of each
of the above-indicated directors and
officers of the registrant pursuant to a
Power of Attorney signed by such
directors and officers.
/s/ BARRY C. BURKHOLDER
-----------------------
Barry C. Burkholder
As Attorney-In-Fact
II-6
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- -------------------------------------------------------------
1.1* -- Form of Underwriting Agreement relating
to Class A common stock.
1.2* -- Form of Underwriting Agreement relating
to trust preferred securities.
1.3 -- Form of Underwriting Agreement relating
to Premium Income Equity Securities
1.4 -- Form of Underwriting Agreement relating
to Series A Preferred Stock.
3.1** -- Form of Restated Certificate of
Incorporation of Bank United Corp.,
as amended (incorporated by reference
to Exhibit 3.1 to Form S-1,
Registration No. 333-06229).
3.2** -- Form of By-Laws of Bank United Corp.
(incorporated by reference to Exhibit
3.2 to Form S-1, Registration No.
333-06229).
4.1** -- Form of Class A Common Stock
(incorporated by reference to Form
8-A filed July 15, 1996).
4.2 -- Form of Certificate Evidencing Corporate PIES
(included as Exhibit A to the Form of Purchase
Contract Agreement filed as Exhibit 4.14).
4.3 -- Form of Certificate Evidencing Treasury PIES
(included as Exhibit B to the Form of Purchase
Contract Agreement filed as Exhibit 4.14).
4.4 -- Form of certificate of designation with respect
to Series A Preferred Stock.
4.5 -- Form of certificate of designation with respect
to Series B Preferred Stock.
4.6* -- Form of Deposit Agreement.
4.7* -- Form of Depositary Receipt (included
in Exhibit 4.3).
4.8** -- Form of Amended and Restated
Declaration of Trust of Bank United
Capital Trust.
4.9** -- Certificate of Trust of Bank United
Capital Trust.
4.10** -- Form of junior subordinated indenture
between Bank United Corp. and Bank of
New York, Indenture Trustee.
4.11** -- Form of trust preferred securities
guarantee between Bank United Corp.
and Bank of New York, Guarantee
Trustee.
4.12** -- Form of certificate of junior
subordinated debt securities
(included in Exhibit 4.7 above).
4.13** -- Form of certificate of trust
preferred securities of Bank United
Capital Trust (included in Exhibit
4.5 above).
4.14 -- Form of Purchase Contract Agreement
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- -------------------------------------------------------------
4.15 -- Form of Pledge Agreement
4.16 -- Form of Remarketing Agreement
5.1 -- Opinion of Wachtell, Lipton, Rosen &
Katz.
5.4* -- Opinion of Richards, Layton & Finger,
special Delaware counsel, as to
legality of the securities to be
issued by Bank United Capital Trust.
8.1 -- Opinion of Wachtell, Lipton, Rosen &
Katz as to certain federal income tax
matters.
12.1** -- Computation of ratio of earnings to
fixed charges and earnings to
combined fixed charges and preferred
dividends.
15.1** -- Letter from Deloitte & Touche LLP regarding
unaudited interim financial information.
23.1** -- Consent of Deloitte & Touche LLP.
23.2 -- Consent of Wachtell, Lipton, Rosen &
Katz (included in Exhibit 5.1).
23.5 -- Consent of Richards, Layton & Finger
(included in Exhibit 5.4).
23.6 -- Consent of Wachtell, Lipton, Rosen &
Katz (included in Exhibit 8.1).
24.1** -- Power of Attorney (see page II-6 of the Form
S-3 filed July 27, 1999).
25.1** -- Form T-1 Statement of Eligibility of
Bank of New York, Delaware to act as
Property Trustee and Delaware Trustee
under the Amended and Restated
Declaration of Trust of Bank United
Capital Trust.
25.2** -- Form T-1 Statement of Eligibility of
Bank of New York to act as Indenture
Trustee under the junior subordinated
indenture.
25.3** -- Form T-1 Statement of Eligibility of
Bank of New York to act as Guarantee
Trustee under the trust preferred
securities guarantee of Bank United
Capital Trust.
- ------------
* To be filed by amendment or by filing of a Form 8-K subsequently incorporated
by reference.
** Previously filed.