++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. NEITHER THIS PROSPECTUS SUPPLEMENT NOR THE PROSPECTUS TO +
+WHICH IT RELATES SHALL CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN +
+OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN +
+WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO +
+REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JANUARY 21, 1997
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JANUARY , 1997
$165,000,000
GREAT WESTERN FINANCIAL TRUST II
% CAPITAL SECURITIES, SERIES A
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
GREAT WESTERN FINANCIAL CORPORATION
-----------
The % Capital Securities, Series A (the "Capital Securities") offered hereby
represent preferred undivided beneficial interests in the assets of Great
Western Financial Trust II, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"). Great Western Financial Corporation, a
Delaware corporation ("GWFC"), will own all the common securities (the "Common
Securities" and, together with the Capital Securities, the "Trust Securities")
representing undivided beneficial interests in the assets of the Trust. The
Trust exists for the sole purpose of issuing the Trust Securities and investing
the proceeds thereof in an equivalent amount of % Subordinated Deferrable
Interest Notes due 2027 (the "Subordinated Notes") of GWFC. The Subordinated
Notes will mature on , 2027, subject to GWFC's right to shorten the
maturity. Upon an event of a default under the Declaration (as defined herein),
the holders of Capital Securities will have a preference over the holders of
the Common Securities with respect to payments in respect of distributions and
payments upon redemption, liquidation and otherwise.
(continued on next page)
-----------
SEE "RISK FACTORS" COMMENCING ON PAGE S-4 FOR CERTAIN INFORMATION RELEVANT TO
AN INVESTMENT IN THE CAPITAL SECURITIES.
-----------
THESE SECURITIES ARE NOT SAVINGS ACCOUNTS OR DEPOSITS AND WILL NOT BE
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED
STATES.
-----------
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH
IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------
INITIAL PUBLIC UNDERWRITING PROCEEDS TO THE
OFFERING PRICE(1) COMMISSION(2) TRUST(1)(3)(4)
----------------- ------------- ---------------
Per Capital Security............ $1,000.00 (3) $1,000.00
Total........................... $165,000,000 (3) $165,000,000
- -----
(1) Plus accrued distributions, if any, from the date of original issuance.
(2) GWFC and the Trust have agreed to indemnify the several Underwriters
against certain liabilities, including liabilities under the Securities Act
of 1933, as amended. See "Underwriting."
(3) In view of the fact that the proceeds of the sale of Capital Securities
will be invested in Subordinated Notes of GWFC, GWFC has agreed to pay the
Underwriters as compensation for their arranging the investment therein of
such proceeds $ per Capital Security (or $ in the aggregate). See
"Underwriting."
(4) Before deducting estimated expenses of $ payable by GWFC.
-----------
The Capital Securities offered hereby are offered severally by the
Underwriters, as specified herein, subject to receipt and acceptance by them
and subject to their right to reject any order in whole or in part. It is
expected that the Capital Securities will be ready for delivery in book-entry
form only through the facilities of The Depository Trust Company in New York,
New York, on or about January , 1997, against payment therefor in immediately
available funds.
GOLDMAN, SACHS & CO. MERRILL LYNCH & CO.
LEHMAN BROTHERS SMITH BARNEY INC.
-----------
The date of this Prospectus Supplement is January , 1997.
(continued from previous page)
Holders of the Capital Securities are entitled to receive cumulative cash
distributions at an annual rate of % of the liquidation amount of $1,000 per
Capital Security ("distributions"), accruing from the date of original
issuance and payable semi-annually in arrears on and of each year,
commencing , 1997 (each a "Distribution Date"). The first distribution will
be in an amount equal to $ per Capital Security. The payment of
distributions out of moneys held by the Trust and payments on liquidation of
the Trust or the redemption of Capital Securities, as set forth below, are
guaranteed by GWFC (the "Guarantee") to the extent the Trust has funds
available therefor as described under "Description of Guarantee" in the
accompanying Prospectus. The obligations of GWFC under the Guarantee are
subordinate and junior in right of payment to all other liabilities of GWFC
and pari passu with the most senior preferred or preference stock issued, from
time to time, if any, by GWFC. The obligations of GWFC under the Subordinated
Notes are subordinate and junior in right of payment to all present and future
Senior Indebtedness (as defined herein) and any other subordinated debt
(unless otherwise stated) of GWFC, which aggregated approximately $673 million
at September 30, 1996, and rank pari passu with GWFC's other general unsecured
creditors. In addition, because GWFC is a holding company, its obligations
under the Guarantee and the Subordinated Notes will be effectively
subordinated to all existing and future liabilities of its subsidiaries. At
September 30, 1996, the subsidiaries of GWFC had total liabilities of
approximately $39.9 billion.
The distribution rate and the distribution and other payment dates for the
Capital Securities will correspond to the interest rate and interest and other
payment dates on the Subordinated Notes, which will be the sole assets of the
Trust. As a result, if principal or interest is not paid on the Subordinated
Notes, no amounts will be paid on the Capital Securities. If GWFC does not
make principal or interest payments on the Subordinated Notes, the Trust will
not have sufficient funds to make distributions on the Capital Securities, in
which event the Guarantee will not apply to such distributions until the Trust
has sufficient funds available therefor.
GWFC has the right to defer payments of interest on the Subordinated Notes
by extending the interest payment period on the Subordinated Notes at any time
for up to 10 consecutive semi-annual periods (each an "Extension Period"). If
interest payments are so deferred, distributions will also be deferred. During
such Extension Period, distributions will continue to accrue with interest
thereon (to the extent permitted by applicable law) at the then applicable
annual rate compounded semi-annually, and during any Extension Period, holders
of Capital Securities will be required to include deferred interest income in
their gross income for United States federal income tax purposes in advance of
receipt of the cash distributions with respect to such deferred interest
payments. There could be multiple Extension Periods of varying lengths
throughout the term of the Subordinated Notes and hence on the Capital
Securities. Extension of the interest payment period will not extend the
maturity date of the Subordinated Notes. See "Risk Factors--Option to Extend
Interest Payment Period," "Description of the Subordinated Notes--Option to
Extend Interest Payment Period" and "Certain Federal Income Tax Consequences--
Interest Income and Original Issue Discount."
The Subordinated Notes are redeemable by GWFC, in whole or in part, from
time to time, on or after , 2007, or at any time in certain circumstances
upon the occurrence of a Tax Event (as defined herein) or in whole (but not in
part) for a limited time upon the occurrence of a Capital Treatment Event (as
defined herein). If GWFC redeems Subordinated Notes, the Trust must redeem
Trust Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Subordinated Notes to be redeemed at $1,000 per Trust
Security plus accrued and unpaid distributions thereon and the related amount
of premium, if any, paid by GWFC upon the concurrent redemption of
Subordinated Notes (the "Redemption Price") to the date fixed for redemption.
See "Description of the Offered Capital Securities--Redemption." The Trust
Securities will be redeemed upon maturity of the Subordinated Notes. The
Subordinated Notes mature on , 2027, but the maturity date may be shortened
as described under "Description of the Subordinated Notes--Right to Shorten
Maturity." In addition, upon the occurrence of a Special Event (as defined
herein) arising from a change in law or a change in legal interpretation,
unless the Subordinated Notes are redeemed in the limited circumstances
described herein, the Trust shall be dissolved, with the result that the
Subordinated Notes will be distributed to
S-2
the holders of the Trust Securities, on a pro rata basis. See "Description of
the Offered Capital Securities--Special Event Redemption or Distribution" and
"Description of the Subordinated Notes."
GWFC will have the right at any time to terminate the Trust and cause the
Subordinated Notes to be distributed to the holders of the Capital Securities
in liquidation of the Trust. See "Description of Offered Capital Securities--
Liquidation of Trust and Distribution of Subordinated Notes to Holders." In
the event of the termination of the Trust, after satisfaction of liabilities
to creditors of the Trust as required by applicable law, the holders of the
Capital Securities will be entitled to receive a liquidation amount of $1,000
per Capital Security plus accumulated and unpaid distributions thereon to the
date of payment, which may be in the form of a distribution of such amount in
Subordinated Notes, subject to certain exceptions. See "Description of Offered
Capital Securities--Liquidation Distribution Upon Dissolution."
In the event of the involuntary or voluntary liquidation, dissolution,
winding up or termination of the Trust, the holders of the Trust Securities
will be entitled to receive for each Trust Security a liquidation amount of
$1,000 plus accrued and unpaid distributions thereon (including interest
thereon) to the date of payment, unless, in connection with such dissolution,
the Subordinated Notes are distributed to the holders of the Trust Securities.
See "Description of the Offered Capital Securities--Liquidation Distribution
Upon Dissolution."
The Capital Securities will be represented by global certificates registered
in the name of The Depository Trust Company ("DTC") or its nominee. Beneficial
interests in the Capital Securities will be shown on, and transfers thereof
will be effected only through, records maintained by participants in DTC.
Except as described in this Prospectus Supplement and in the accompanying
Prospectus, Capital Securities in certificated form will not be issued in
exchange for the global certificates. See "Book-Entry Only Issuance--The
Depositary Trust Company."
----------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT LEVELS ABOVE THOSE THAT MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING TRANSACTIONS, IF COMMENCED, MAY BE DISCONTINUED AT
ANY TIME.
S-3
RISK FACTORS
Prospective purchasers of Capital Securities should carefully review the
information contained elsewhere in this Prospectus Supplement and in the
accompanying Prospectus and should particularly consider the following
matters:
RANKING OF SUBORDINATE OBLIGATIONS UNDER THE GUARANTEE AND SUBORDINATED NOTES
GWFC's obligations under the Guarantee are subordinate and junior in right
of payment to all liabilities of GWFC and pari passu with the most senior
preferred or preference stock outstanding, from time to time, if any, of GWFC.
The obligations of GWFC under the Subordinated Notes are subordinate and
junior in right of payment to all present and future Senior Indebtedness and
any other subordinated debt (unless otherwise stated) of GWFC and pari passu
with obligations to or rights of GWFC's other general unsecured creditors. As
of September 30, 1996, Senior Indebtedness aggregated approximately $673
million. In addition, because GWFC is a holding company, its obligations under
the Guarantee and the Subordinated Notes will be effectively subordinated to
all existing and future liabilities of its subsidiaries. At September 30,
1996, such subsidiaries had total liabilities of approximately $39.9 billion.
There are no terms in the Capital Securities, the Subordinated Notes or the
Guarantee that limit the ability of GWFC or its subsidiaries (other than the
Trust) to incur additional indebtedness, including indebtedness that ranks
senior to the Subordinated Notes and the Guarantee. See "Description of
Guarantee--Status of the Guarantee" and "Description of Debt Securities--
Particular Terms of the Subordinated Debt Securities Issued to the Trust" in
the accompanying Prospectus, and "Description of the Subordinated Notes--
Subordination" herein.
The ability of the Trust to pay amounts on the Capital Securities is solely
dependent upon GWFC making payments on the Subordinated Notes as and when
required.
RIGHTS UNDER THE GUARANTEE
The Guarantee will be qualified as an indenture under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"). The First National Bank
of Chicago will act as indenture trustee under the Guarantee for the purposes
of compliance with the Trust Indenture Act (the "Guarantee Trustee"). The
Guarantee Trustee will hold the Guarantee for the benefit of the holders of
the Capital Securities.
The Guarantee guarantees to the holders of the Capital Securities the
payment of (i) any accrued and unpaid distributions that are required to be
paid on the Capital Securities, to the extent the Trust has funds available
therefor, which funds would exist only to the extent GWFC has made a payment
of interest or principal on the Subordinated Notes, (ii) the Redemption Price,
including all accrued and unpaid distributions with respect to Capital
Securities called for redemption by the Trust, to the extent the Trust has
funds available therefor, which funds would exist only to the extent GWFC has
made a payment of interest or principal or premium, if any, on the
Subordinated Notes, and (iii) upon a voluntary or involuntary liquidation,
dissolution, winding-up or termination of the Trust (other than in connection
with the distribution of Subordinated Notes to the holders of Capital
Securities or the redemption of all the Capital Securities), the lesser of (a)
the aggregate of the liquidation amount and all accrued and unpaid
distributions on the Capital Securities to the date of the payment to the
extent the Trust has funds available therefor and (b) the amount of assets of
the Trust remaining available for distribution to holders of the Capital
Securities in liquidation of the Trust. The holders of a majority in
liquidation amount of the Capital Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available
to the Guarantee Trustee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee. If GWFC were to
default on its obligation to pay amounts payable on the Subordinated Notes,
the Trust would lack available funds for the payment of distributions or
amounts payable on redemption of the Capital Securities or otherwise, and, in
such event, holders of the Capital Securities would not be able to rely upon
the Guarantee for payment of such amounts. Instead, holders of the Capital
Securities would rely on the enforcement of the rights against GWFC pursuant
to the terms of the Subordinated Notes. See "Description of Guarantee" and
"Description of Debt Securities--Particular Terms of the Subordinated Debt
Securities Issued to the Trust" in the accompanying Prospectus. The
Declaration provides that each holder of Capital Securities, by acceptance
thereof, agrees to the provisions of the Guarantee, including the
subordination provisions thereof, and the Subordinated Indenture (as defined
in the accompanying Prospectus).
S-4
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES
If a Declaration Event of Default (as defined herein) occurs and is
continuing, then the holders of a majority in aggregate liquidation amount of
the Capital Securities will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Property
Trustee or to direct the exercise of any trust or power conferred upon the
Property Trustee under the Declaration, including the right to direct the
Property Trustee to exercise the remedies available to it as a holder of the
Subordinated Notes. If an Event of Default with respect to the Subordinated
Notes, constituting the failure to pay interest or principal or premium, if
any, on the Subordinated Notes on the date such interest or principal or
premium is otherwise payable, has occurred and is continuing, then a holder of
Capital Securities may directly institute a proceeding for enforcement of
payment to such holder directly of the principal of or premium, if any, or
interest on the Subordinated Notes having a principal amount equal to the
aggregate liquidation amount of the Capital Securities of such holder on or
after the respective due date specified in the Subordinated Notes. The holders
of Capital Securities will not be able to exercise directly any other remedy
available to the holders of the Subordinated Notes unless the Property Trustee
fails to do so.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
GWFC has the right under the Subordinated Indenture to defer payments of
interest on the Subordinated Notes by extending the interest payment period at
any time, and from time to time, on the Subordinated Notes in accordance with
the terms thereof. As a consequence of such an extension, semi-annual
distributions on the Capital Securities would be deferred (but despite such
deferral would continue to accrue with interest thereon compounded semi-
annually) by the Trust during any such extended interest payment period. Such
right to extend the interest payment period for the Subordinated Notes is
limited to a period not exceeding 10 consecutive semi-annual periods. The
extension of the interest payment period will not extend the maturity date of
the Subordinated Notes. In the event that GWFC exercises this right to defer
interest payments, then (a) GWFC shall not, and shall cause any subsidiary of
GWFC that is not a wholly owned subsidiary of GWFC not to, declare or pay
dividends on, or make any distributions with respect to, or redeem, purchase
or acquire, or make a liquidation payment with respect to, any of its capital
stock or the capital stock of any such subsidiary, and (b) GWFC shall not make
any payment of interest, principal or premium, if any, on or repay, repurchase
or redeem any debt securities (including guarantees) issued by GWFC that rank
pari passu with or junior to the Subordinated Notes; provided, however, that
the foregoing restriction (a) above does not apply to any stock dividend paid
by GWFC, or any of its subsidiaries, where the dividend stock is the same
stock as that on which the dividend is being paid. Prior to the termination of
any such Extension Period (as defined), GWFC may further extend the interest
payment period; provided that such Extension Period, together with all such
previous and further extensions thereof, may not exceed 10 consecutive semi-
annual periods. Upon the termination of any Extension Period and the payment
of all amounts then due, GWFC may commence a new Extension Period, as if no
Extension Period had previously been declared, subject to the above
requirements. See "Description of the Offered Capital Securities--
Distributions" and "Description of the Subordinated Notes--Option to Extend
Interest Payment Period."
Should GWFC exercise its right to defer payments of interest on the
Subordinated Notes by extending the interest payment period thereon, each
holder of Capital Securities will be required to accrue income (in the form of
original issue discount) in respect of its pro rata share of the Subordinated
Notes held by the Trust for United States federal income tax purposes. As a
result, a holder of Capital Securities will be required to include such income
in gross income for United States federal income tax purposes in advance of
the receipt of cash attributable to such income, and will not receive the cash
related to such income from the Trust if the holder disposes of the Capital
Securities prior to the record date for the payment of distributions. See
"Certain Federal Income Tax Consequences--Interest Income and Original Issue
Discount."
GWFC has no intention of exercising its right to defer payments of interest
by extending the interest payment period on the Subordinated Notes and
considers the likelihood of it exercising that right is remote. However,
should GWFC determine to exercise such right in the future, the market price
of the Capital Securities is likely to be affected. A holder that disposes of
its Capital Securities during an Extension Period,
S-5
therefore, might not receive the same return on its investment as a holder
that continues to hold its Capital Securities. In addition, as a result of the
existence of GWFC's right to defer interest payments, the market price of the
Capital Securities (which represent an undivided beneficial interest in the
Subordinated Notes) may be more volatile than other securities to which such
rights do not apply.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
Upon the occurrence of a Special Event, the Trust shall be dissolved, except
in the limited circumstance described below under "Description of the Offered
Capital Securities--Special Event Redemption or Distribution," with the result
that the Subordinated Notes would be distributed to the holders of the Trust
Securities in connection with the liquidation of the Trust. In certain
circumstances relating to a Tax Event, GWFC shall have the right to redeem the
Subordinated Notes, in whole or in part, in lieu of a distribution of the
Subordinated Notes by the Trust, in which event the Trust will redeem the
Trust Securities on a pro rata basis to the same extent as the Subordinated
Notes are redeemed by GWFC. See "Description of the Offered Capital
Securities--Special Event Redemption or Distribution."
There can be no assurance as to the market prices for the Capital Securities
or the Subordinated Notes that may be distributed in exchange for Capital
Securities if a dissolution or liquidation of the Trust were to occur.
Accordingly, the Capital Securities that an investor may purchase, whether
pursuant to the offer made hereby or in the secondary market, or the
Subordinated Notes that a holder of Capital Securities may receive on
dissolution and liquidation of the Trust, may trade at a discount to the price
that the investor paid to purchase the Capital Securities. Because holders of
Capital Securities may receive Subordinated Notes upon the occurrence of a
Special Event, prospective purchasers of Capital Securities are also making an
investment decision with regard to the Subordinated Notes and should carefully
review all the information regarding the Subordinated Notes contained herein
and in the accompanying Prospectus. See "Description of the Offered Capital
Securities--Special Event Redemption or Distribution" and "Description of the
Subordinated Notes."
See "Possible Tax Law Changes Affecting the Capital Securities" below for a
discussion of certain legislative proposals that, if adopted, could give rise
to a Tax Event, which may permit GWFC to cause a redemption of the Capital
Securities prior to , 2007 or to shorten the maturity of the Subordinated
Notes to a date not earlier than 19 1/2 years after the date of initial
issuance of the Subordinated Notes, which would result in the redemption of
the Capital Securities on such date.
CAPITAL TREATMENT EVENT REDEMPTION
Upon the occurrence and during the continuation of a Capital Treatment
Event, GWFC has the right to redeem the Subordinated Notes in whole (but not
in part) at any time within 90 days following the occurrence of such Capital
Treatment Event and thereby cause a mandatory redemption of the Capital
Securities.
A "Capital Treatment Event" means that GWFC (or its successor) is, becomes
or pursuant to law or regulation will become within 180 days, subject to
capital requirements under which all or any portion of the Capital Securities
would not constitute Tier 1 Capital applied as if GWFC (or its successor) 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
("Federal Reserve Board") as of the date of this Prospectus Supplement) or its
then equivalent ("Tier 1 Capital").
EXCHANGE OF CAPITAL SECURITIES FOR SUBORDINATED NOTES
GWFC will have the right at any time to terminate the Trust and after
satisfaction of liabilities to creditors of the Trust as required by
applicable law, to cause Subordinated Notes to be distributed to the holders
of the Capital Securities in exchange therefor upon liquidation of the Trust.
See "Description of Offered Capital Securities--Liquidation of Trust and
Distribution of Subordinated Notes to Holders."
S-6
Under current United States federal income tax law and interpretations, a
distribution of the Subordinated Notes upon liquidation of the Trust should
not be a taxable event to holders of the Capital Securities. However, if a Tax
Event were to occur which would cause the Trust to be subject to United States
federal income tax with respect to income received or accrued on the
Subordinated Notes, a distribution of the Subordinated Notes by the Trust
could be a taxable event to the holders of the Capital Securities. See
"Certain Federal Income Tax Consequences--Receipt of Subordinated Notes or
Cash Upon Liquidation of the Trust."
LIMITED VOTING RIGHTS
Holders of Capital Securities will have limited voting rights and will not
be entitled to vote to appoint, remove or replace, or to increase or decrease
the number of Regular Trustees, which voting rights are vested exclusively in
the holder of the Common Securities.
TRADING PRICE
GWFC and the Trust do not intend to have the Capital Securities listed on
any securities exchange. If the Underwriters do not make a market for the
Capital Securities, the liquidity of the Capital Securities could be adversely
affected. The Capital Securities may trade at a price that does not fully
reflect the value of accrued but unpaid interest with respect to the
underlying Subordinated Notes. Accordingly, the Capital Securities may trade
at a discount to the price that an investor paid to purchase the Capital
Securities offered hereby. To the extent the selling price is less than the
holder's adjusted tax basis, a holder will recognize a capital loss. Subject
to certain limited exceptions, capital losses cannot be applied to offset
ordinary income for United States federal income tax purposes. See "Certain
Federal Income Tax Consequences--Interest Income and Original Issue Discount"
and "--Sale of Capital Securities."
POSSIBLE TAX LAW CHANGES AFFECTING THE CAPITAL SECURITIES
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill") was
released which would have, among other things, generally denied interest
deductions for interest on an instrument issued by a corporation that has a
maximum weighted average maturity of more than 40 years. The Bill would also
have generally denied interest deductions for interest on an instrument issued
by a corporation that has a maximum term of more than 20 years and that is not
shown as indebtedness on the separate balance sheet of the issuer or, where
the instrument is issued to a related party (other than a corporation), where
the holder or some other related party issues a related instrument that is not
shown as indebtedness on the issuer's consolidated balance sheet. For purposes
of determining the weighted average maturity or the term of an instrument, any
right to extend would be treated as exercised. The above-described provisions
of the Bill were proposed to be effective generally for instruments issued on
or after December 7, 1995. If either provision were to apply to the
Subordinated Notes, GWFC would not be able to deduct interest on the
Subordinated Notes. However, on March 29, 1996, the Chairmen of the Senate
Finance and House Ways and Means Committees issued a joint statement (the
"Joint Statement") to the effect that it was their intention that the
effective date of the President's legislative proposals, if adopted, would be
no earlier than the date of appropriate Congressional action. In addition,
subsequent to the publication of the Joint Statement, Senator Daniel Patrick
Moynihan and Representatives Sam M. Gibbons and Charles B. Rangel wrote
letters to Treasury Department officials concurring with the view expressed in
the Joint Statement (the "Democrat Letters"). If the principles contained in
the Joint Statement and the Democrat Letters were enacted, such legislation
would not apply to the Subordinated Notes. Under current law, GWFC will be
able to deduct interest on the Subordinated Notes. There can be no assurance,
however, that current or future legislative proposals or final legislation
will not adversely affect the ability of GWFC to deduct interest on the
Subordinated Notes. Such a change could give rise to a Tax Event, which would
permit GWFC to cause a redemption of the Capital Securities before , 2007,
or to shorten the maturity of the Subordinated Notes to a period of not less
than 19 1/2 years from the date of initial issuance, which will result in
redemption of the Capital Securities as of such earlier maturity. See
"Description of the Subordinated Notes--Redemption," "Description of the
Offered Capital Securities--Mandatory Redemption" and "--Right to Shorten
Maturity," and "Certain Federal Income Tax Consequences--Possible Tax Law
Changes."
S-7
RECENT FINANCIAL RESULTS
The following table sets forth selected financial data of GWFC and its
consolidated subsidiaries for the nine months ended September 30, 1996 and
1995 and at September 30, 1996 and 1995. This selected financial data is
derived from GWFC's unaudited consolidated financial statements which are
incorporated herein by reference and which include, in the opinion of
management, all adjustments (consisting of only normal, recurring accruals)
necessary for the fair presentation of the consolidated results of operations
and consolidated financial condition of GWFC for the periods and at the dates
presented. The operating results for the nine months ended September 30, 1996
are not necessarily indicative of the results to be expected for the full
year.
FOR THE NINE MONTHS
ENDED SEPTEMBER 30,
------------------------
1996 1995
----------- -----------
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE
DATA AND RATIOS)
SUMMARY OF OPERATIONS
Interest income.................................... $ 2,432,384 $ 2,403,824
Interest expense................................... 1,389,378 1,452,536
Net interest income................................ 1,043,006 951,288
Provision for loan losses.......................... 123,071 137,400
Operating and administrative expenses(1)........... 956,574 736,829
Earnings before taxes on income.................... 181,090 268,555
Taxes on income.................................... 70,400 106,100
Net earnings(1).................................... 110,690 162,455
Fully diluted earnings per share................... .68 1.05
Cash dividends per common share.................... .73 .69
Ratio of earnings to fixed charges(2)
Excluding interest on deposits................... 1.34x 1.46x
Including interest on deposits................... 1.13x 1.18x
Ratio of earnings to fixed charges and preferred
stock dividends(2):
Excluding interest on deposits................... 1.27x 1.39x
Including interest on deposits................... 1.11x 1.16x
AT SEPTEMBER 30,
------------------------
1996 1995
----------- -----------
(DOLLARS IN THOUSANDS)
SUMMARY OF FINANCIAL CONDITION
Cash and securities................................ $ 2,011,912 $ 2,190,674
Loans receivable, net.............................. 30,760,376 29,633,224
Mortgage-backed securities......................... 8,593,389 10,532,266
Total assets....................................... 43,548,593 44,693,014
Deposits........................................... 28,852,700 29,432,176
Borrowings......................................... 10,874,586 11,591,999
Stockholders' equity............................... 2,616,781 2,654,299
- --------
(1) Includes in 1996 a $188.4 million pre-tax charge with respect to a one-
time special assessment in connection with the recapitalization of the
Savings Association Insurance Fund.
(2) For purposes of computing the ratio of earnings to fixed charges and the
ratio of earnings to fixed charges and preferred stock dividends, earnings
represent earnings before income taxes and fixed charges. Fixed charges,
excluding interest on deposits, represent other interest expense
(including capitalized interest) and one-third (the proportion deemed
representative of the interest factor) of rents. Fixed charges, including
interest on deposits, represent all interest expense (including
capitalized interest) and one-third of rents.
S-8
CAPITALIZATION OF GWFC
The following table sets forth the unaudited summary capitalization of GWFC
and its consolidated subsidiaries as of September 30, 1996, and as adjusted to
reflect issuance of the Capital Securities and the application of the
estimated net proceeds therefrom immediately after the sale. See "Use of
Proceeds" below. The table should be read in conjunction with GWFC's
consolidated financial statements and notes thereto and other financial data
incorporated by reference herein. See "Incorporation of Certain Documents by
Reference" in the accompanying Prospectus.
AT SEPTEMBER 30, 1996
-----------------------
ACTUAL AS ADJUSTED
----------- -----------
(IN THOUSANDS)
Borrowings:
Federal Home Loan Bank.............................. $ 1,678,039 $ 1,678,039
Short-term debt..................................... 1,350,969 1,350,969
Long-term debt...................................... 3,258,933 3,258,933
Securities sold under agreement to repurchase....... 4,586,645 4,586,645
----------- -----------
Total borrowings.................................. 10,874,586 10,874,586
Company-obligated mandatorily redeemable preferred
securities of GWFC's subsidiary trust, holding solely
subordinated deferrable interest notes of GWFC(1).... 100,000 100,000
Company-obligated mandatorily redeemable capital
securities of GWFC's subsidiary trust, holding solely
subordinated deferrable interest notes of GWFC(2).... -- 165,000
Preferred stock....................................... 165,000 165,000
Common stockholders' equity........................... 2,451,781 2,451,781
----------- -----------
Total capitalization.............................. $13,591,367 $13,741,367
=========== ===========
- --------
(1) The Company-obligated mandatorily redeemable preferred securities of
GWFC's subsidiary trust represents interests in such trust, the sole
assets of which are approximately $103,093,000 aggregate principal amount
of 8.25% subordinated deferred interest notes, due 2025, of GWFC.
(2) The Company-obligated mandatorily redeemable capital securities of GWFC's
subsidiary trust represents interests in the Trust, the sole assets of
which are approximately $ aggregate principal amount of %
subordinated deferrable interest notes, due 2027, of GWFC.
S-9
ACCOUNTING TREATMENT
For financial reporting purposes, the Trust will be treated as a subsidiary
of GWFC and, accordingly, the accounts of the Trust will be included in the
consolidated financial statements of GWFC. All future reports of GWFC filed
under the Securities Exchange Act of 1934, as amended, will (i) reflect the
consolidation of the Trust into GWFC's consolidated financial statements, with
the $165 million of Capital Securities shown in GWFC's balance sheet as
Company-obligated mandatorily redeemable capital securities of GWFC's
subsidiary trust, holding solely subordinated deferrable interest notes of
GWFC, (ii) include in the financial statement footnotes of GWFC disclosure
that the sole assets of the Trust will be approximately $ million aggregate
principal amount of % Subordinated Deferrable Interest Notes of GWFC due
2027, and (iii) if Staff Accounting Bulletin 53 treatment is sought, include
in a footnote to the audited financial statements disclosure that the Trust is
wholly owned, that the sole assets of the Trust are the Subordinated Notes
(specifying the principal amount, interest rate and maturity date of the
Subordinated Notes held), and that the Guarantee, taken together with GWFC's
obligation under the Subordinated Notes, the Subordinated Indenture and the
Declaration, provides a full and unconditional guarantee on a subordinated
basis by GWFC of payments due on the Capital Securities issued by the Trust.
REASON FOR TRANSACTION
On October 21, 1996, the Federal Reserve Board issued a press release (the
"Federal Reserve Press Release") announcing that it had approved the use of
certain cumulative preferred stock instruments, such as the Capital
Securities, as "Tier 1 Capital" for purposes of the Federal Reserve Board's
capital guidelines for bank holding companies. GWFC is not currently subject
to those capital guidelines but GWFC (or its successor) may become subject to
those or similar capital guidelines in the future. In that event GWFC (or its
successor) intends to treat the Capital Securities as Tier 1 Capital and,
since under current United States federal income tax law, the Capital
Securities will receive a tax deduction for interest in respect of the
Subordinated Notes, the issuance of the Capital Securities is a cost effective
method of raising capital on an after-tax basis.
USE OF PROCEEDS
All of the proceeds from the sale of the Capital Securities will be invested
by the Trust in the Subordinated Notes described herein and ultimately will be
used by GWFC for general corporate purposes, which may include investments in
or extensions of credit to subsidiaries of GWFC or to fund the redemption of
GWFC's 8.30% Cumulative Preferred Stock on or after November 1, 1997.
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DESCRIPTION OF THE OFFERED CAPITAL SECURITIES
The Capital Securities will be issued pursuant to the terms of the
Declaration. The Declaration will be qualified as an indenture under the Trust
Indenture Act. The Property Trustee, The First National Bank of Chicago, will
act as the indenture trustee under the Declaration for purposes of compliance
with the provisions of the Trust Indenture Act. The terms of the Capital
Securities will include those stated in the Declaration and those made part of
the Declaration by the Trust Indenture Act. The following summary of the
material terms and provisions of the Capital Securities does not purport to be
complete and is subject to, and qualified in its entirety by reference to, the
Declaration, a copy of which is filed as an exhibit to the Registration
Statement of which this Prospectus Supplement is a part, the Delaware Business
Trust Act (the "Trust Act") and the Trust Indenture Act. The Capital
Securities are referred to as Preferred Securities in the accompanying
Prospectus.
GENERAL
The Declaration authorizes the Regular Trustees to issue on behalf of the
Trust the Trust Securities, which represent undivided beneficial interests in
the assets of the Trust. All of the Common Securities will be owned, directly
or indirectly, by GWFC. The Common Securities rank pari passu, and payments
will be made thereon on a pro rata basis, with the Capital Securities, except
that upon the occurrence of a Declaration Event of Default, the rights of the
holders of the Common Securities to receive payment of periodic distributions
and payments upon liquidation, redemption and otherwise will be subordinated
to the rights to payment of the holders of the Capital Securities. The
Declaration does not permit the issuance by the Trust of any securities other
than the Trust Securities or the incurrence of any indebtedness by the Trust.
Pursuant to the Declaration, the Property Trustee will own the Subordinated
Notes purchased by the Trust for the benefit of the holders of the Trust
Securities. The payment of distributions out of money held by the Trust, and
payments upon redemption of the Capital Securities or liquidation of the
Trust, are guaranteed by GWFC to the extent described under "Description of
Guarantee" in the accompanying Prospectus. The Guarantee will be held by The
First National Bank of Chicago, the Guarantee Trustee, for the benefit of the
holders of the Capital Securities. The Guarantee does not cover payment of
distributions when the Trust does not have sufficient available funds to pay
such distributions.
The Capital Securities will not be savings accounts or deposits and will not
be insured by the Federal Deposit Insurance Corporation (the "FDIC"), the
United States or any agency or fund of the United States.
DISTRIBUTIONS
Distributions on the Capital Securities will be fixed at a rate per annum of
% of the stated liquidation amount of $1,000 per Capital Security.
Distributions in arrears for more than one semi-annual period will bear
interest thereon at the rate per annum of % compounded semi-annually. The
term "distribution" as used herein includes any such interest payable unless
otherwise stated. The amount of distributions payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months (or for any
period shorter than a full semi-annual period, on the basis of the actual
number of days elapsed per 30-day month).
Distributions on the Capital Securities will be cumulative, will accrue from
January , 1997, and will be payable semi-annually in arrears on and
of each year to the holders of record on the applicable record date,
commencing , 1997, when, as and if available for payment, except as
otherwise described below. The first distribution will be in an amount equal
to $ per Capital Security.
GWFC has the right under the Subordinated Indenture to defer payments of
interest on the Subordinated Notes by extending the interest payment period
from time to time on the Subordinated Notes, which, if exercised, would defer
semi-annual distributions on the Capital Securities (though such distributions
would continue to accrue with interest thereon, compounded semi-annually (to
the extent permitted by applicable law), since interest would continue to
accrue on the Subordinated Notes) during any such extended interest payment
period. Such right to extend the interest payment period for the Subordinated
Notes is limited to a period not exceeding
S-11
10 consecutive semi-annual periods. In the event that GWFC exercises this
right, then (a) GWFC shall not, and shall cause any subsidiary of GWFC that is
not a wholly owned subsidiary of GWFC not to, declare or pay dividends on,
make any distributions with respect to, or redeem, purchase or acquire, or
make a liquidation payment with respect to, any of its capital stock or the
capital stock of any such subsidiary and (b) GWFC shall not make any payment
of interest, principal or premium, if any, on or repay, repurchase or redeem
any debt securities (including guarantees) issued by GWFC that rank pari passu
with or junior to such Subordinated Notes; provided, however, that, the
foregoing restriction (a) does not apply to any stock dividend paid by GWFC,
or any of its subsidiaries, where the dividend stock is the same stock as that
on which the dividend is being paid. Prior to the termination of any such
Extension Period, GWFC may further defer payments of interest by extending the
interest payment period, provided that such Extension Period, together with
all such previous and further extensions thereof, may not exceed 10
consecutive semi-annual periods. Upon the termination of any Extension Period
and the payment of all amounts then due, GWFC may select a new Extension
Period as if no Extension Period had previously been declared, subject to the
above requirements. See "Description of the Subordinated Notes--Interest" and
"--Option to Extend Interest Payment Period." If distributions are deferred,
the deferred distributions and accrued interest thereon shall be paid to
holders of record of the Capital Securities as they appear on the books and
records of the Trust on the record date next following the termination of such
Extension Period.
Distributions on the Capital Securities must be paid on the dates payable to
the extent that the Trust has funds available for the payment of such
distributions. The Trust's funds available for distribution to the holders of
the Capital Securities will be limited to payments received from GWFC on the
Subordinated Notes. See "Description of the Subordinated Notes." The payment
of distributions out of moneys held by the Trust is guaranteed by GWFC to the
extent set forth under "Description of Guarantee" in the accompanying
Prospectus.
Distributions on the Capital Securities will be payable to the holders
thereof as they appear on the books and records of the Trust on the relevant
record dates, which, as long as the Capital Securities remain in book-entry
only form, will be one Business Day prior to the relevant payment dates. Such
distributions will be paid through the Property Trustee who will hold amounts
received in respect of the Subordinated Notes for the benefit of the holders
of the Trust Securities. Subject to any applicable laws and regulations and
the provisions of the Declaration, each such payment will be made as described
under "Book-Entry Only Issuance--The Depository Trust Company" below. In the
event that the Capital Securities do not continue to remain in book-entry only
form, the Regular Trustees shall have the right to select relevant record
dates, which shall be more than one but less than 60 Business Days prior to
the relevant payment dates. In the event that any date on which distributions
are to be made on the Capital Securities is not a Business Day, then payment
of the distributions payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such distribution date. A "Business Day" shall mean any day other than
Saturday, Sunday or any other day on which banking institutions in the City of
New York or Los Angeles, California are authorized or required by any
applicable law to close.
REDEMPTION
The Subordinated Notes will mature on , 2027, unless shortened as
described under "Right to Shorten Maturity" below, and may be redeemed, (i) in
whole or in part, at any time on or after , 2007, or (ii) at any time in
certain circumstances upon the occurrence of a Tax Event or in whole (but not
in part) for a limited time upon the occurrence of a Capital Treatment Event.
Upon the repayment of the Subordinated Notes, whether at maturity or upon
redemption, the proceeds from such repayment or payment shall simultaneously
be applied to redeem Trust Securities having an aggregate liquidation amount
equal to the aggregate principal amount of the Subordinated Notes so repaid or
redeemed at the Redemption Price; provided that, holders of Trust Securities
shall be given not less than 30 nor more than 60 days notice of such
redemption. See "Description of the Subordinated Notes--Optional Redemption."
S-12
The Redemption Price, in the case of a redemption under (i) above or, on or
after , 2007, under (ii) above, shall equal the following prices,
expressed in percentages of the liquidation amount, together with accumulated
distributions to the redemption date, if redeemed during the 12-month period
beginning :
REDEMPTION
YEAR PRICE
---- ----------
2007........................................................... %
2008...........................................................
2009...........................................................
2010...........................................................
2011...........................................................
2012...........................................................
2013...........................................................
2014...........................................................
2015...........................................................
2016...........................................................
and at 100% on or after , 2017.
The Redemption Price, in the case of a redemption prior to , 2007,
following a Tax Event or Capital Treatment Event as described under (ii)
above, will equal for each Capital Security the Make-Whole Amount for a
corresponding $1,000 principal amount of Subordinated Notes together with
accumulated distributions to the redemption date. The "Make-Whole Amount" will
be equal to the greater of (i) 100% of the principal amount of such
Subordinated Notes or (ii) as determined by a Quotation Agent (as defined
below), the sum of the present values of the principal amount and premium
payable as part of the Redemption Price with respect to an optional redemption
of such Subordinated Notes on , 2007, together with the present values of
the scheduled payments of interest from the redemption date to , 2007 (the
"Remaining Life"), in each case discounted to the redemption date on a semi-
annual basis (assuming a 360-day year consisting of twelve 30-day months) at
the Adjusted Treasury Rate (as defined below).
"Adjusted Treasury Rate" means, with respect to any redemption date, the
Treasury Rate (as defined below) plus (i) . % if such redemption date occurs
on or before , 1998 or (ii) . % if such Redemption Date occurs after ,
1998.
"Quotation Agent" means Goldman, Sachs & Co. and its successors; provided,
however, that if the foregoing shall cease to be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer"), GWFC shall
substitute therefor another Primary Treasury Dealer.
"Treasury Rate" means, with respect to any redemption date, (i) the yield,
under the heading which represents the average for the week immediately prior
to the calculation date, appearing in the most recently published statistical
release designated "H.15(519)" or any successor publication which is published
weekly by the Board of Governors of the Federal Reserve System and which
establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant
Maturities," for the maturity corresponding to the Remaining Life (if no
maturity is within three months before or after the Remaining Life, yields for
the two published maturities most closely corresponding to the Remaining Life
shall be determined and the Treasury Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding to the
nearest month) or (ii) if such release (or any successor release) is not
published during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such redemption date. The
calculation date shall be the third Business Day preceding the redemption
date.
S-13
"Comparable Treasury Issue" means, with respect to any redemption date, the
United States Treasury security selected by the Quotation Agent as having a
maturity comparable to the Remaining Life that would be utilized, at the time
of selection and in accordance with customary financial practice, in pricing
new issues of corporate debt securities of comparable maturity to the
Remaining Life. If no United States Treasury security has a maturity which is
within a period from three months before to three months after , 2007, the
two most closely corresponding United States Treasury securities shall be used
as the Comparable Treasury Issue, and the Treasury Rate shall be interpolated
or extrapolated on a straight-line basis, rounding to the nearest month using
such securities.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of five Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (ii) if the Indenture Trustee obtains fewer than five such
Reference Treasury Dealer Quotations, the average of all such quotations.
"Reference Treasury Dealer" means (i) the Quotation Agent and (ii) any other
Primary Treasury Dealer selected by the Indenture Trustee after consultation
with GWFC.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Indenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted
in writing to the Indenture Trustee by such Reference Treasury Dealer at 5:00
p.m., New York City time, on the third Business Day preceding such redemption
date.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
"Tax Event" means that the Regular Trustees shall have received an opinion
from independent tax counsel experienced in such matters (a "Dissolution Tax
Opinion") to the effect that, as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or, with respect to clause (iii) below, any
political subdivision or taxing authority thereof or therein or (b) any
amendment to, or change in, an interpretation or application of such laws or
regulations, there is more than an insubstantial risk that (i) the Trust would
be subject to United States federal income tax with respect to income accrued
or received on the Subordinated Notes, (ii) interest payable to the Trust on
the Subordinated Notes would not be deductible by GWFC for United States
federal income tax purposes or (iii) the Trust would be subject to more than a
de minimis amount of other taxes, duties or other governmental charges, which
change or amendment is enacted (irrespective of any retroactive effect) on or
after the date of this Prospectus Supplement.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion from independent counsel experienced in such matters to
the effect that, as a result of the occurrence of a change in law or
regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), there is more than an insubstantial
risk that the Trust is or will within 90 days of the date of such opinion be
considered an "investment company" which is required to be registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), which Change
in 1940 Act Law becomes effective on or after the date of this Prospectus
Supplement.
If, at any time, a Tax Event or an Investment Company Event (each, as
defined above, a "Special Event") shall occur and be continuing, the Trust
shall, except in the circumstances described below, be dissolved with the
result that Subordinated Notes with an aggregate principal amount equal to the
aggregate stated liquidation amount of the Trust Securities would be
distributed to the holders of the Trust Securities, in liquidation of such
holders' interests in the Trust on a pro rata basis, within 90 days following
the occurrence of such Special Event; provided, however, that in the case of
the occurrence of a Tax Event, as a condition of such dissolution and
distribution, the Regular Trustees shall have received an opinion from
independent tax counsel experienced in
S-14
such matters (a "No Recognition Opinion"), which opinion may rely on published
revenue rulings of the Internal Revenue Service, to the effect that the
holders of the Trust Securities will not recognize any gain or loss for United
States federal income tax purposes as a result of such dissolution and
distribution of Subordinated Notes; and provided, further, that, if at the
time there is available to the Trust the opportunity to eliminate, within such
90 day period, the Special Event by taking some ministerial action, such as
filing a form or making an election, or pursuing some other similar reasonable
measure, which has no adverse effect on the Trust, GWFC or the holders of the
Trust Securities, the Trust will pursue such measure in lieu of such
dissolution and distribution. Furthermore, if in the case of the occurrence of
a Tax Event, (i) GWFC has received an opinion (a "Redemption Tax Opinion")
from independent tax counsel experienced in such matters that, as a result of
a Tax Event, there is more than an insubstantial risk that GWFC would be
precluded from deducting the interest on the Subordinated Notes for United
States federal income tax purposes even if the Subordinated Notes were
distributed to the holders of Trust Securities in liquidation of such holders'
interests in the Trust as described above or (ii) the Regular Trustees shall
have been informed by such tax counsel that a No Recognition Opinion cannot be
delivered, GWFC shall have the right, upon not less than 30 nor more than 60
days notice, to redeem the Subordinated Notes in whole or in part for cash
within 90 days following the occurrence of such Tax Event, and, following such
redemption, Trust Securities with an aggregate liquidation amount equal to the
aggregate principal amount of the Subordinated Notes so redeemed shall be
redeemed by the Trust at the Redemption Price on a pro rata basis; provided,
however, that, if at the time there is available to GWFC or the Trust the
opportunity to eliminate, within such 90 day period, the Tax Event by taking
some ministerial action, such as filing a form or making an election, or
pursuing some other similar reasonable measure which has no adverse effect on
the Trust, or the holders of the Trust Securities or GWFC, the Trust or GWFC
will pursue such measure in lieu of redemption.
After the date for any distribution of Subordinated Notes upon dissolution
of the Trust, (i) the Capital Securities and Guarantee will no longer be
deemed to be outstanding, (ii) the depositary or its nominee, as the record
holder of the Capital Securities, will receive a registered global certificate
or certificates representing the Subordinated Notes to be delivered upon such
distribution and (iii) any certificates representing Capital Securities and
the Guarantee not held by the depositary or its nominee will be deemed to
represent Subordinated Notes having an aggregate principal amount equal to the
aggregate stated liquidation amount of such Capital Securities, until such
certificates are presented to GWFC or its agent for transfer or reissuance.
There can be no assurance as to the market prices for the Capital Securities
or the Subordinated Notes that may be distributed in exchange for the Capital
Securities if a dissolution and liquidation of the Trust were to occur.
Accordingly, the Capital Securities that an investor may purchase, or the
Subordinated Notes that the investor may receive on dissolution and
liquidation of the Trust, may trade at a discount to the price that the
investor paid to purchase the Capital Securities.
CAPITAL TREATMENT EVENT REDEMPTION
Upon the occurrence and during the continuation of a Capital Treatment
Event, GWFC has the right to redeem the Subordinated Notes in whole (but not
in part) at any time within 90 days following the occurrence of such Capital
Treatment Event and thereby cause a mandatory redemption of the Capital
Securities. See "Redemption" above.
RIGHT TO SHORTEN MATURITY
If a Tax Event occurs which relates to the deductibility of interest payable
by GWFC on the Subordinated Notes, and if the Redemption Tax Opinion relating
to such Tax Event states that the risk of non-deductibility would be avoided
if the maturity of the Subordinated Notes were shortened, GWFC shall have the
right to shorten the maturity of the Subordinated Notes by the amount stated
in such opinion to be the minimum extent required in order to avoid such risk,
but in no event may GWFC shorten the maturity of the Subordinated Notes to a
stated maturity of less than 19 1/2 years from the date of initial issuance.
In such event, the Capital Securities would be redeemed as of such earlier
stated maturity of the Subordinated Notes. In addition, upon the exercise of
the right to shorten the maturity of the Subordinated Notes, GWFC will no
longer have the right to redeem
S-15
the Subordinated Notes prior to the new stated maturity upon the occurrence of
a Tax Event or to further shorten the maturity of the Subordinated Notes.
REDEMPTION PROCEDURES
The Trust may not redeem fewer than all of the outstanding Capital
Securities unless all accrued and unpaid distributions have been paid on all
Capital Securities for all semi-annual distribution periods terminating on or
prior to the date of redemption.
If the Trust gives a notice of redemption in respect of Capital Securities
(which notice will be irrevocable), then by 12:00 noon, New York City time, on
the redemption date, and if GWFC has paid to the Property Trustee a sufficient
amount of cash in connection with the related redemption or maturity of the
Subordinated Notes, then GWFC through the Property Trustee will irrevocably
deposit with the depositary funds sufficient to pay the applicable Redemption
Price and will give the depositary irrevocable instructions and authority to
pay the Redemption Price to holders of the Capital Securities. See "Book-Entry
Only Issuance--The Depository Trust Company" below. If notice of redemption
shall have been given and funds deposited as required, then, immediately prior
to the close of business on the date of such deposit or redemption date, if
later, distributions will cease to accrue and all rights of holders of such
Capital Securities so called for redemption will cease, except the right of
the holders of such Capital Securities to receive the Redemption Price but
without interest on such Redemption Price. In the event that any date fixed
for redemption of Capital Securities is not a Business Day, then payment of
the Redemption Price payable on such date will be made on the next succeeding
day that is a Business Day (without any interest or other payment in respect
of any such delay), except that, if such Business Day falls in the next
calendar year, such payment will be made on the immediately preceding Business
Day. In the event that payment of the Redemption Price in respect of Capital
Securities is improperly withheld or refused and not paid either by the Trust,
or by GWFC pursuant to the Guarantee, distributions on such Capital Securities
will continue to accrue at the then applicable rate from the original
redemption date to the actual date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes of
calculating the Redemption Price.
In the event that fewer than all of the outstanding Capital Securities are
to be redeemed, the Capital Securities will be redeemed pro rata as described
below under "Book-Entry Only Issuance--The Depository Trust Company."
Subject to the foregoing and applicable law (including, without limitation,
United States federal securities laws), GWFC or its subsidiaries may at any
time, and from time to time, purchase outstanding Capital Securities by
tender, in the open market or by private agreement, provided that the acquiror
is not the holder of the Common Securities or the obligor under the
Subordinated Indenture.
LIQUIDATION OF TRUST AND DISTRIBUTION OF SUBORDINATED NOTES TO HOLDERS
GWFC will have the right at any time to liquidate the Trust and cause
Subordinated Notes to be distributed to the holders of the Capital Securities
in exchange therefor upon liquidation of the Trust.
Under current United States federal income tax law, a distribution of
Subordinated Notes in exchange for Capital Securities should not be a taxable
event to holders of the Capital Securities. Should there be a change in law, a
change in legal interpretation, a Tax Event or other circumstances, however,
the distribution of the Subordinated Notes could be a taxable event to holders
of the Capital Securities. See "Certain Federal Income Tax Consequences--
Receipt of Subordinated Notes or Cash Upon Liquidation of the Trust." If GWFC
elects neither to redeem the Subordinated Notes prior to maturity nor to
liquidate the Trust and distribute the Notes to holders of the Capital
Securities in exchange therefor, the Capital Securities will remain
outstanding until the stated maturity of the Subordinated Notes.
If GWFC elects to liquidate the Trust and thereby causes the Subordinated
Notes to be distributed to holders of the Capital Securities in exchange
therefor upon liquidation of the Trust, GWFC shall continue to have the
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right to shorten the maturity of the Subordinated Notes, subject to certain
conditions as described under "Description of the Subordinated Notes--Right to
Shorten Maturity."
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust (each a "Liquidation"), the then
holders of the Capital Securities will be entitled to receive out of the
assets of the Trust, after satisfaction of liabilities to creditors, an amount
equal to the aggregate of the stated liquidation amount of $1,000 per Capital
Security plus accrued and unpaid distributions thereon to the date of payment
(the "Liquidation Distribution"), unless, in connection with such Liquidation,
Subordinated Notes in an aggregate stated principal or liquidation amount, as
applicable, equal to the aggregate stated liquidation amount of the Capital
Securities, with accrued and unpaid interest or dividends, as the case may be,
equal to accrued and unpaid distributions on the Capital Securities, have been
distributed on a pro rata basis to the holders of the Capital Securities in
exchange for such Capital Securities.
If, upon any such Liquidation, the Liquidation Distribution can be paid only
in part because the Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Capital Securities shall be paid on a pro rata basis. The holders
of the Common Securities will be entitled to receive distributions upon any
such dissolution pro rata with the holders of the Capital Securities, except
that if a Declaration Event of Default has occurred and is continuing, the
Capital Securities shall have a preference over the Common Securities with
regard to such distributions.
Pursuant to the Declaration, the Trust shall terminate (i) on March 31,
2052, the expiration of the term of the Trust, (ii) upon the bankruptcy of
GWFC or the holder of the Common Securities, (iii) upon the filing of a
certificate of dissolution or its equivalent with respect to the holder of the
Common Securities or GWFC, the filing of a certificate of cancellation with
respect to the Trust, or the revocation of the charter of the holder of the
Common Securities or GWFC and the expiration of 90 days after the date of
revocation without a reinstatement thereof, (iv) upon the distribution of
Subordinated Notes upon the occurrence of a Special Event, (v) upon the entry
of a decree of a judicial dissolution of the holder of the Common Securities,
GWFC or the Trust, or (vi) upon the redemption of all the Trust Securities.
DECLARATION EVENTS OF DEFAULT
An event of default under the Subordinated Indenture (an "Indenture Event of
Default") constitutes an event of default under the Declaration with respect
to the Trust Securities (a "Declaration Event of Default"); provided that,
pursuant to the Declaration, the holder of the Common Securities will be
deemed to have waived any Declaration Event of Default with respect to the
Common Securities until all Declaration Events of Default with respect to the
Capital Securities have been cured, waived or otherwise eliminated. Until such
Declaration Events of Default with respect to the Capital 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 Capital Securities and
only the holders of the Capital Securities will have the right to direct the
Property Trustee with respect to certain matters under the Declaration, and
therefore the Subordinated Indenture. See "Voting Rights" below.
Upon the occurrence of a Declaration Event of Default, the Property Trustee
as sole holder of the Subordinated Notes will have the right under the
Subordinated Indenture to declare the principal of, premium, if any, and
interest on the Subordinated Notes to be immediately due and payable. GWFC and
the Trust are each required to file annually with the Property Trustee an
officer's certificate as to its compliance with all conditions and covenants
under the Declaration.
If an Event of Default with respect to the Subordinated Notes, constituting
the failure to pay interest or principal or premium, if any, on the
Subordinated Notes on the date such interest or principal or premium, if any,
is otherwise payable, has occurred and is continuing, then a holder of Trust
Securities may directly institute a proceeding for enforcement of payment to
such holder directly of the principal of, premium, if any, or interest
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on the Subordinated Notes having a principal amount equal to the aggregate
liquidation amount of the Trust Securities of such holder on or after the
respective due date specified in the Subordinated Notes. The holders of Trust
Securities will not be able to exercise directly any other remedy available to
the holders of the Subordinated Notes unless the Property Trustee fails to do
so.
VOTING RIGHTS
Except as described herein, under the Trust Act, the Trust Indenture Act and
under "Description of Guarantee--Modifications of the Guarantee; Assignment"
in the accompanying Prospectus, and as otherwise required by law and the
Declaration, the holders of the Capital Securities will have no voting rights.
Subject to the requirement of the Property Trustee obtaining a tax opinion
in certain circumstances set forth in the last sentence of this paragraph, the
holders of a majority in aggregate liquidation amount of the Capital
Securities, voting separately as a class, have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Property Trustee, or to direct the exercise of any trust or power conferred
upon the Property Trustee under the Declaration, including the right to direct
the Property Trustee, as holder of the Subordinated Notes, to (i) exercise the
remedies available under the Indenture with respect to the Subordinated Notes,
(ii) waive any past Indenture Event of Default that is waivable under the
Subordinated Indenture, or (iii) exercise any right to rescind or annul a
declaration that the principal of all the Subordinated Notes shall be due and
payable; provided, however, that, where a consent or action under the
Subordinated Indenture would require the consent or act of more than a
majority of the holders in aggregate principal amount of Subordinated Notes (a
"Super-Majority") affected thereby (or all of such holders, as applicable),
only the holders of at least such Super-Majority of the Capital Securities (or
all of such holders, as applicable) may direct the Property Trustee to give
such consent to take such action. The Property Trustee shall notify all
holders of the Capital Securities of any notice of default received from the
Indenture Trustee with respect to the Subordinated Notes. Such notice shall
state that such Indenture Event of Default also constitutes a Declaration
Event of Default. Except with respect to directing the time, method and place
of conducting a proceeding for a remedy, the Property Trustee shall not take
any of the actions described in clauses (i), (ii) or (iii) above unless the
Property Trustee has obtained an opinion of independent tax counsel
experienced in such matters to the effect that, as a result of such action,
the Trust will not fail to be classified as a grantor trust for United States
federal income tax purposes.
In the event the consent of the Property Trustee, as the holder of the
Subordinated Notes, is required under the Subordinated Indenture with respect
to any amendment, modification or termination of the Subordinated Indenture,
the Property Trustee shall request the direction of the holders of the Trust
Securities with respect to such amendment, modification or termination and
shall vote with respect to such amendment, modification or termination as
directed by a majority in liquidation amount of the Trust Securities voting
together as a single class; provided, however, that where a consent under the
Subordinated Indenture would require the consent of a Super-Majority, the
Property Trustee may only give such consent at the direction of the holders of
at least the proportion in liquidation amount of the Trust Securities which
the relevant Super-Majority represents of the aggregate principal amount of
the Subordinated Notes outstanding. The Property Trustee shall not take any
such action in accordance with the directions of the holders of the Trust
Securities unless the Property Trustee has obtained an opinion of independent
tax counsel experienced in such matters to the affect that for the purposes of
United States federal income tax the Trust will not be classified as other
than a grantor trust.
A waiver of an Indenture Event of Default will constitute a waiver of the
corresponding Declaration Event of Default.
Any required approval or direction of holders of Capital Securities may be
given at a separate meeting of holders of Capital Securities convened for such
purpose, at a meeting of all of the holders of Trust Securities or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which holders of Capital Securities are entitled to vote, or of any matter
upon which action by written consent of such holders is to be taken, to be
mailed to each holder of record of Capital Securities. Each such notice will
include a statement
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setting forth the following information: (i) the date of such meeting or the
date by which such action is to be taken; (ii) a description of any resolution
proposed for adoption at such meeting on which such holders are entitled to
vote or of such matter upon which written consent is sought; and
(iii) instructions for the delivery of proxies or consents. No vote or consent
of the holders of Capital Securities will be required for the Trust to redeem
and cancel Capital Securities or distribute Subordinated Notes in accordance
with the Declaration. The Regular Trustees shall be obligated to call a
meeting of the holders of the Capital Securities if directed to do so by the
holders of at least 10% in liquidation amount of the Capital Securities
requesting such meeting in accordance with the terms of the Declaration.
Notwithstanding that holders of Capital Securities are entitled to vote or
consent under any of the circumstances described above, any of the Capital
Securities that are owned at such time by GWFC or any entity directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, GWFC shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if such Capital Securities
were not outstanding.
The procedures by which holders of Capital Securities may exercise their
voting rights are described below. See "Book-Entry Only Issuance--The
Depository Trust Company" below.
Holders of the Capital Securities will have no rights to appoint or remove
the Regular Trustees, who may be appointed, removed or replaced solely by GWFC
as the indirect or direct holder of all the Common Securities.
MODIFICATION OF THE DECLARATION
The Declaration may be modified and amended if approved by a majority of the
Regular Trustees (and in certain circumstances the Property Trustee); provided
that, if any proposed amendment provides for, or the Regular Trustees
otherwise propose to effect, (i) any action that would adversely affect the
powers, preferences or special rights of the Trust Securities, whether by way
of amendment to the Declaration or otherwise, or (ii) the liquidation,
dissolution, winding-up or termination of the Trust other than pursuant to the
terms of the Declaration, then the holders of the Trust Securities voting
together as a single class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of at least 66 2/3% in liquidation amount of the Trust Securities;
provided that, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Capital Securities or the Common Securities,
then only the affected class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of 66 2/3% in liquidation amount of such class of Trust Securities.
Notwithstanding the foregoing, no amendment or modification may be made to
the Declaration if such amendment or modification would (i) cause the Trust to
be classified for purposes of United States federal income taxation as other
than a grantor trust, (ii) reduce or otherwise adversely affect the powers of
the Property Trustee in contravention of the Trust Indenture Act or (iii)
cause the Trust to be deemed an "investment company" which is required to be
registered under the 1940 Act.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any corporation or other body, except as
described below. The Trust may, with the consent of a majority of the Regular
Trustees and without the consent of the holders of the Trust Securities,
consolidate, amalgamate, merge with or into, or be replaced by a trust
organized as such under the laws of any State; provided that, (i) such
successor entity either (x) expressly assumes all of the obligations of the
Trust under the Trust Securities or (y) substitutes for the Trust Securities
other securities having substantially the same terms as the Trust Securities
(the "Successor Securities"), so long as the Successor Securities rank the
same as the Capital Securities rank with respect to distributions and payments
upon liquidation, redemption and maturity, (ii) GWFC expressly acknowledges a
trustee of such successor entity possessing the same powers and duties as the
Property Trustee as the holder of the Subordinated Notes, (iii) such
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merger, consolidation, amalgamation or replacement does not cause the Capital
Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (iv) such merger,
consolidation, amalgamation or replacement does not adversely affect the
rights, preferences and privileges of the holders of the Trust Securities
(including any Successor Securities) in any material respect (other than with
respect to any dilution of the holders' interest in the new entity), (v) such
successor entity has a purpose identical to that of the Trust, (vi) prior to
such merger, consolidation, amalgamation or replacement, GWFC has received an
opinion of independent counsel to the Trust experienced in such matters to the
effect that, (A) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges of the holders of
the Trust Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of the holders' interest in
the new entity), and (B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor such successor entity will be required to
register as an investment company under the 1940 Act and (vii) GWFC guarantees
the obligations of such successor entity under the Successor Securities at
least to the extent provided by the Guarantee and the Common Securities
guarantee (as defined in the accompanying Prospectus). Notwithstanding the
foregoing, the Trust shall not, except with the consent of holders of 100% in
liquidation amount of the Trust Securities, consolidate, amalgamate, merge
with or into, or be replaced by any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it, if such
consolidation, amalgamation, merger or replacement would cause the Trust or
such successor entity to be classified as other than a grantor trust for
United States federal income tax purposes.
There are no provisions which afford the holders of the Capital Securities
protection in the event of a highly leveraged transaction, reorganization,
restructuring, merger or similar transaction involving GWFC. There are also no
provisions which require the repurchase of the Capital Securities upon a
change in control of GWFC.
BOOK-ENTRY ONLY ISSUANCE--THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC") will act as initial securities
depositary for the Capital Securities. The Capital Securities will be issued
only as fully-registered securities registered in the name of Cede & Co.
(DTC's nominee). One or more fully-registered global Capital Securities
certificates, representing the total aggregate number of Capital Securities,
will be issued to or on behalf of DTC.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of securities in definitive form. Such laws may impair
the ability to transfer beneficial interests in the global Capital Securities
as represented by a global certificate.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). DTC holds securities
that its participants ("Participants") deposit with DTC. DTC also facilitates
the settlement among Participants of securities transactions, such as
transfers and pledges, in deposited securities through electronic computerized
book-entry changes in Participants' accounts, thereby eliminating the need for
physical movement of securities certificates. Direct Participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations ("Direct Participants"). DTC is owned by a
number of its Direct Participants and by the New York Stock Exchange, the
American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others, such as
securities brokers and dealers, banks and trust companies that clear
transactions through or maintain a direct or indirect custodial relationship
with a Direct Participant either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on file
with the Securities and Exchange Commission.
Purchases of Capital Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Capital
Securities on DTC's records. The ownership interest of each actual
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purchaser of each Capital Security ("Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants' records. Beneficial Owners
will not receive written confirmation from DTC of their purchases, but
Beneficial Owners are expected to receive written confirmations providing
details of the transactions, as well as periodic statements of their holdings,
from the Direct or Indirect Participants through which the Beneficial Owners
purchased Capital Securities. Transfers of ownership interests in the Capital
Securities are to be accomplished by entries made on the books of Participants
acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in the Capital Securities,
except in the event that use of the book-entry system for the Capital
Securities is discontinued.
To facilitate subsequent transfers, all the Capital Securities deposited by
Participants with DTC are registered in the name of DTC's nominee, Cede & Co.
The deposit of Capital Securities with DTC and their registration in the name
of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge
of the actual Beneficial Owners of the Capital Securities. DTC's records
reflect only the identity of the Direct Participants to whose accounts such
Capital Securities are credited, which may or may not be the Beneficial
Owners. The Participants will remain responsible for keeping account of their
holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements that may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the
Capital Securities are being redeemed, DTC will reduce the amount of the
interest of each Direct Participant in such Capital Securities in accordance
with its procedures; provided that if, as a result of such redemption, Direct
Participants would hold fractional interests in the Capital Securities, DTC
will adjust the amount of the interest of each Direct Participant to be
redeemed to avoid such fractional interest.
Although voting with respect to the Capital Securities is limited, in those
cases where a vote is required, neither DTC nor Cede & Co. will itself consent
or vote with respect to Capital Securities. Under its usual procedures, DTC
would mail an Omnibus Proxy to the Trust as soon as possible after the record
date. The Omnibus Proxy assigns Cede & Co. consenting or voting rights to
those Direct Participants to whose accounts the Capital Securities are
credited on the record date (identified in a listing attached to the Omnibus
Proxy). GWFC and the Trust believe that the arrangements among DTC, Direct and
Indirect Participants, and Beneficial Owners will enable the Beneficial Owners
to exercise rights equivalent in substance to the rights that can be directly
exercised by a holder of a beneficial interest in the Trust.
Distribution payments on the Capital Securities will be made to DTC. DTC's
practice is to credit Direct Participants' accounts on the relevant payment
date in accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payments on such
payment date. Payments by participants to Beneficial Owners will be governed
by standing instructions and customary practices, as is the case with
securities held for the account of customers in bearer form or registered in
"street name," and such payments will be the responsibility of such
Participant and not of DTC, the Trust or GWFC, subject to any statutory or
regulatory requirements to the contrary that may be in effect from time to
time. Payment of distributions to DTC is the responsibility of the Trust;
disbursement of such payments to the Beneficial Owners is the responsibility
of Direct and Indirect Participants.
Except as provided herein, a Beneficial Owner in a global Capital Security
certificate will not be entitled to receive physical delivery of Capital
Securities. Accordingly, each Beneficial Owner must rely on the procedures of
DTC to exercise any rights under the Capital Securities.
DTC may discontinue providing its services as securities depositary with
respect to the Capital Securities at any time by giving reasonable notice to
the Trust. Under such circumstances, in the event that a successor
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securities depositary is not obtained, Capital Securities certificates are
required to be printed and delivered. Additionally, the Regular Trustees (with
the consent of GWFC) may decide to discontinue use of the system of book-entry
transfers through DTC (or any successor depositary) with respect to the
Capital Securities. In that event, certificates for the Capital Securities
will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that GWFC and the Trust believe to be reliable,
but neither GWFC nor the Trust takes responsibility for the accuracy thereof.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, prior to the occurrence of a default with respect to
the Trust Securities, undertakes to perform only such duties as are
specifically set forth in the Declaration and, after default, shall exercise
the same degree of care as a prudent individual would exercise in the conduct
of his or her own affairs. Subject to such provisions, the Property Trustee is
under no obligation to exercise any of the powers vested in it by the
Declaration at the request of any holder of Capital Securities, unless offered
reasonable indemnity by such holder against the costs, expenses and
liabilities which might be incurred thereby.
PAYING AGENT
In the event that the Capital Securities do not remain in book-entry only
form, the following provisions would apply:
The Property Trustee will act as paying agent, and may designate an
additional or substitute paying agent at any time.
Registration of transfers of Capital Securities will be effected without
charge by or on behalf of the Trust, but upon payment (with the giving of such
indemnity as the Trust or GWFC may require) in respect of any tax or other
government charges that may be imposed in relation to it.
The Trust will not be required to register or cause to be registered the
transfer of Capital Securities after such Capital Securities have been called
for redemption.
GOVERNING LAW
The Declaration and the Capital Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
MISCELLANEOUS
The Regular Trustees are authorized and directed to operate the Trust in
such a way so that the Trust will not be required to register as an
"investment company" under the 1940 Act or be characterized as other than a
grantor trust for United States federal income tax purposes. GWFC is
authorized and directed to conduct its affairs so that the Subordinated Notes
will be treated as indebtedness of GWFC for United States federal income tax
purposes. In this connection, GWFC and the Regular Trustees are authorized to
take any action, not inconsistent with applicable law, the certificate of
trust of the Trust or the certificate of incorporation of GWFC, as applicable,
that each of GWFC and the Regular Trustees determines in its discretion to be
necessary or desirable to achieve such end, as long as such action does not
adversely affect the interests of the holders of the Capital Securities.
Holders of the Capital Securities have no preemptive rights.
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DESCRIPTION OF THE SUBORDINATED NOTES
Set forth below is a description of the specific terms of the Subordinated
Notes in which the Trust will invest the proceeds from the issuance and sale
of the Trust Securities. This description supplements the description of the
general terms and provisions of the Subordinated Notes set forth in the
accompanying Prospectus under the caption "Description of Debt Securities" and
in particular "Description of Debt Securities--Particular Terms of the
Subordinated Debt Securities Issued to the Trust." The following description
of the material terms and provisions of the Subordinated Notes does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, the description in the accompanying Prospectus and the
Indenture, dated as of September 12, 1990, as amended and supplemented by a
First Supplemental Indenture, dated April 30, 1993, a Second Supplemental
Indenture, dated as of December 6, 1995, and the Third Supplemental Indenture,
dated as of January , 1997 (as amended and supplemented, the "Subordinated
Indenture"), between the Company and Harris Trust and Savings Bank, as
Indenture Trustee, filed as an exhibit to the Registration Statement of which
this Prospectus Supplement and the accompanying Prospectus form a part.
Certain capitalized terms used herein are defined in the Subordinated
Indenture.
Under certain circumstances, Subordinated Notes may be distributed to the
holders of the Trust Securities in liquidation of the Trust. See "Description
of the Offered Capital Securities--Special Event Redemption or Distribution"
and "--Liquidation of Trust and Distribution of Subordinated Notes to
Holders."
The Subordinated Notes will not be savings accounts or deposits and will not
be insured by the FDIC, the United States or any agency or fund of the United
States.
GENERAL
The Subordinated Notes will be issued as unsecured debt under the
Subordinated Indenture. The Subordinated Notes will be limited in aggregate
principal amount to $ , such amount being the sum of the aggregate stated
liquidation amount of the Capital Securities and the capital contributed by
GWFC in exchange for the Common Securities (the "GWFC Payment").
The Subordinated Notes are not subject to a sinking fund provision. The
entire principal amount of the Subordinated Notes will mature and become due
and payable, together with any accrued and unpaid interest thereon including
Compound Interest (as hereinafter defined) and Additional Interest (as
hereinafter defined), if any, on , 2027, subject to the election of GWFC
to shorten the maturity as described under "Right to Shorten Maturity" below.
If Subordinated Notes are distributed to holders of Capital Securities in
liquidation of such holders' interests in the Trust, such Subordinated Notes
will initially be issued as a Global Security (as defined below). As described
herein, under certain limited circumstances, Subordinated Notes may be issued
in certificated form in exchange for a Global Security (as defined below). See
"Book-Entry and Settlement" below. In the event that Subordinated Notes are
issued in certificated form, such Subordinated Notes will be in denominations
of $1,000 and integral multiples thereof and may be transferred or exchanged
at the offices described below. Payments on Subordinated Notes issued as a
Global Security will be made to DTC, a successor depositary or, in the event
that no depositary is used, to a Paying Agent for the Subordinated Notes. In
the event Subordinated Notes are issued in certificated form, principal and
interest will be payable, the transfer of the Subordinated Notes will be
registrable and Subordinated Notes will be exchangeable for Subordinated Notes
of other denominations of a like aggregate principal amount at the corporate
trust office of the Indenture Trustee; provided that, payment of interest may
be made at the option of GWFC by check mailed to the address of the persons
entitled thereto.
INTEREST
Each Subordinated Note shall bear interest at the rate of % per annum (the
"Original Coupon Rate") from the original date of issuance, payable semi-
annually in arrears on and
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of each year (each, an "Interest Payment Date"), commencing , 1997,
to the person in whose name such Subordinated Note is registered, subject to
certain exceptions, at the close of business on the Business Day next
preceding such Interest Payment Date. In the event the Subordinated Notes
shall not continue to remain in book-entry only form, GWFC shall have the
right to select such record dates which shall be not less than one Business
Day prior to each Interest Payment Date.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. The amount of interest payable for
any period shorter than a full semi-annual period will be computed on the
basis of the actual number of days elapsed per 30-day month. In the event that
any date on which interest is payable on the Subordinated Notes is not a
Business Day, then payment of the interest payable on such date will be made
on the next succeeding day which is a Business Day (and without any interest
or other payment in respect of any such delay), except that, if such Business
Day is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
If at any time the Trust shall be required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other taxing authority, then, in
any such case, GWFC will pay as additional interest ("Additional Interest")
such additional amounts as shall be required so that the net amounts received
and retained by the Trust after paying such taxes, duties, assessments or
other governmental charges will be not less than the amounts the Trust would
have received had no such taxes, duties, assessments or other governmental
charges been imposed. This right shall not accrue to any holder of the
Subordinated Notes other than the Trust.
RIGHT TO SHORTEN MATURITY
If a Tax Event occurs which relates to the deductibility of interest payable
by GWFC on the Subordinated Notes, and if the Redemption Tax Opinion relating
to such Tax Event states that the risk of non-deductibility would be avoided
if the maturity of the Subordinated Notes were shortened, GWFC shall have the
right to shorten the maturity of the Subordinated Notes by the amount stated
in such opinion to be the minimum extent required in order to avoid such risk,
but in no event may GWFC shorten the maturity of the Subordinated Notes to a
stated maturity of less than 19 1/2 years from the date of initial issuance.
In such event, the Capital Securities would be redeemed as of such earlier
stated maturity of the Subordinated Notes. In addition, upon the exercise of
the right to shorten the maturity of the Subordinated Notes, GWFC will no
longer have the right to redeem the Subordinated Notes prior to the new stated
maturity upon the occurrence of a Tax Event or to further shorten the maturity
of the Subordinated Notes.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
GWFC shall have the right at any time, and from time to time, during the
term of the Subordinated Notes to defer payments of interest by extending the
interest payment period for a period not exceeding 10 consecutive semi-annual
periods. To the extent permitted by applicable law, interest, the payment of
which has been deferred during such Extension Period, will bear interest at
the applicable Coupon Rate, compounded semi-annually ("Compound Interest")
during the term of such Extension Period. At the end of any such Extension
Period, GWFC shall pay all interest then accrued and unpaid (including any
Compound Interest and Additional Interest); provided, that, during any such
Extension Period, (a) GWFC shall not, and shall cause any subsidiary of GWFC
that is not a wholly owned subsidiary of GWFC not to, declare or pay any
dividend on, make any distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital
stock or the capital stock of any such subsidiary, and (b) GWFC shall not make
any payment of interest, principal or premium, if any, on or repay, repurchase
or redeem any debt securities (including guarantees) issued by GWFC which rank
pari passu with or junior to the Subordinated Notes; provided, however, that
the foregoing restriction (a) does not apply to any stock dividend paid by
GWFC, or any of its subsidiaries, where the dividend stock is the same stock
as that on which the dividend is being paid. Prior to the termination of any
such Extension Period, GWFC may further defer payments of interest by
extending the interest payment period, provided that
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such Extension Period together with all such previous and further extensions
thereof may not exceed 10 consecutive semi-annual periods or extend beyond the
maturity of the Subordinated Notes. Upon the termination of any Extension
Period and the payment of all amounts then due, GWFC may select a new
Extension Period, as if no Extension Period had previously been declared,
subject to the above requirements. No interest during an Extension Period,
except at the end thereof, shall be due and payable. GWFC has no intention of
exercising its rights to defer payments of interest by extending the interest
payment period on the Subordinated Notes and considers it unlikely that it
will exercise that right in the future. If the Property Trustee shall be the
sole holder of the Subordinated Notes, GWFC shall give the Regular Trustees
and the Property Trustee notice of its selection of such Extension Period one
Business Day prior to the earlier of (i) the date distributions on the Capital
Securities are payable or (ii) the date the Regular Trustees are required to
give notice to holders of the Capital Securities of the record date or the
date such distribution is payable, but in any event no less than one Business
Day prior to such record date. The Regular Trustees shall give notice of
GWFC's selection of such Extension Period to the holders of the Capital
Securities. If the Property Trustee shall not be the sole holder of the
Subordinated Notes, GWFC shall give the holders of the Subordinated Notes
notice of its selection of such Extension Period ten Business Days prior to
the earlier of (i) the Interest Payment Date or (ii) the date GWFC is required
to give notice to holders of the Subordinated Notes of the record or payment
date of such related interest payment.
OPTIONAL REDEMPTION
GWFC shall have the right to redeem the Subordinated Notes, (i) in whole or
in part, from time to time, on or after , 2007, or (ii) at any time in
certain circumstances upon the occurrence of a Tax Event or in whole (but not
in part) for a limited time upon the occurrence of a Capital Treatment Event
as described under "Description of the Offered Capital Securities--Special
Event Redemption or Distribution" and "--Capital Treatment Event Redemption,"
upon not less than 30 nor more than 60 days' notice, at the Redemption Price
described below.
The Redemption Price for the Subordinated Notes in the case of a redemption
under (i) above or, on or after , 2007, under (ii) above, shall equal the
following prices, expressed in percentages of the principal amount, plus any
accrued and unpaid interest, including any Compound Interest and Additional
Interest, to the date fixed for redemption, if redeemed during the 12-month
period beginning :
REDEMPTION
YEAR PRICE
---- ----------
2007........................................................... %
2008...........................................................
2009...........................................................
2010...........................................................
2011...........................................................
2012...........................................................
2013...........................................................
2014...........................................................
2015...........................................................
2016...........................................................
and at 100% on or after , 2017.
The Redemption Price for the Subordinated Notes, in the case of a redemption
prior to , 2007 following a Tax Event or Capital Treatment Event, as
described under (ii) above, will equal the Make-Whole Amount (as defined under
"Description of Capital Securities--Redemption"), plus any accrued interest,
including any Compound Interest and Additional Interest, to the date fixed for
redemption.
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SUBORDINATION
The Subordinated Indenture provides that the Subordinated Notes are
subordinated and junior in right of payment to all present and future Senior
Indebtedness of GWFC. See "Description of Debt Securities--Subordination of
Subordinated Debt Securities" in the accompanying Prospectus. The Subordinated
Notes will also be subordinated to all other subordinated debt (unless
otherwise stated) of GWFC, other than subordinated debt issued to trusts
similar to the Trust. The Subordinated Indenture does not limit the aggregate
amount of Senior Indebtedness which may be issued by GWFC. As of September 30,
1996, Senior Indebtedness of GWFC aggregated approximately $673 million. In
addition, because GWFC is a holding company, its obligations under the
Subordinated Notes will be effectively subordinated to all existing and future
liabilities of its subsidiaries. At September 30, 1996, such subsidiaries had
total liabilities of approximately $39.9 billion.
CERTAIN COVENANTS
If (i) there shall have occurred any event that would constitute an Event of
Default under the Subordinated Indenture or (ii) GWFC shall be in default with
respect to its payment of any obligations under the Guarantee, then (a) GWFC
shall not, and shall cause any subsidiary of GWFC that is not a wholly owned
subsidiary of GWFC not to, declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase or make a liquidation
payment with respect to, any of its capital stock or the capital stock of any
such subsidiary, and (b) GWFC shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities (including guarantees) issued by GWFC which rank pari passu with or
junior to the Subordinated Notes; provided, however, that the foregoing
restriction (a) does not apply to any stock dividend paid by GWFC, or any of
its subsidiaries, where the dividend stock is the same stock as that on which
the dividend is being paid.
If GWFC shall have given notice of its election of an Extension Period as
provided in the Subordinated Indenture and such period, or any extension
thereof, shall be continuing, then (a) GWFC shall not, and shall cause any
subsidiary of GWFC that is not a wholly owned subsidiary of GWFC not to,
declare or pay any dividend on, make any distributions with respect to, or
redeem, purchase or acquire, or make a liquidation payment with respect to,
any of its capital stock or the capital stock of any such subsidiary, and (b)
GWFC shall not make any payment of interest, principal or premium, if any, on
or repay, repurchase or redeem any debt securities (including guarantees)
issued by GWFC which rank pari passu with or junior to the Subordinated Notes;
provided, however, that the foregoing restriction (a) does not apply to any
stock dividend paid by GWFC, or any of its subsidiaries, where the dividend
stock is the same stock as that on which the dividend is being paid.
For so long as the Trust Securities remain outstanding, GWFC will covenant
(i) to directly or indirectly maintain 100% ownership of the Common Securities
of the Trust; provided, however, that any permitted successor of GWFC under
the Subordinated Indenture may succeed to GWFC's ownership of such Common
Securities, and (ii) to use its reasonable efforts to cause the Trust (a) to
remain a statutory business trust, except in connection with the distribution
of Subordinated Notes to the holders of Trust Securities in liquidation of the
Trust, the redemption of all of the Trust Securities of the Trust, or certain
mergers, consolidations or amalgamations, each as permitted by the
Declaration, and (b) to otherwise continue to be classified as a grantor trust
for United States federal income tax purposes.
INDENTURE EVENTS OF DEFAULT
An Indenture Event of Default is: (a) the failure to pay principal or
premium, if any, of any of the Subordinated Notes when due; (b) the failure to
pay any interest on any of the Subordinated Notes when due, continued for 10
days; provided, however, that a valid extension by GWFC of the interest
payment period for the Subordinated Notes shall not constitute a default in
the payment for this purpose; (c) failure to perform any other covenant of
GWFC in the Subordinated Indenture (other than a covenant included in the
Subordinated Indenture solely for the benefit of one or more series of Debt
Securities other than the Subordinated Notes), continued for 60 days after
written notice as provided in the Subordinated Indenture; (d) certain events
of bankruptcy, insolvency, conservatorship, receivership or reorganization;
(e) a default under any mortgage,
S-26
indenture or instrument evidencing any indebtedness for borrowed money by GWFC
(including the Subordinated Indenture) resulting in an aggregate principal
amount exceeding $10,000,000 becoming or being declared due and payable prior
to its maturity date or constituting a failure to pay at a maturity an
aggregate principal amount exceeding $10,000,000 unless such acceleration has
been rescinded or annulled or such indebtedness has been discharged within 10
days after written notice to GWFC by the Indenture Trustee or holders of at
least 25% in aggregate principal amount of the outstanding Subordinated Notes
declaring a default or GWFC is contesting the validity of such default in good
faith by appropriate proceedings; and (f) the voluntary or involuntary
liquidation, dissolution, winding-up or termination of the Trust to which (or
to the Trustee of the Trust to which) Subordinated Notes were issued in
connection with the issuance of the Trust Securities by the Trust, except in
connection with the distribution of the Subordinated Notes to the holders of
Trust Securities in liquidation of the Trust, the redemption of all the Trust
Securities, or certain mergers, consolidations or amalgamations, each as
permitted by the Declaration.
If any Indenture Event of Default shall occur and be continuing, the
Property Trustee, as the holder of the Subordinated Notes, will have the right
to declare the principal of and the interest on the Subordinated Notes
(including any Compound Interest and Additional Interest, if any) and any
other amounts payable under the Subordinated Indenture to be forthwith due and
payable and to enforce its other rights as a creditor with respect to the
Subordinated Notes. See "Description of Debt Securities--Events of Default" in
the accompanying Prospectus for a description of the Events of Default. An
Indenture Event of Default also constitutes a Declaration Event of Default.
The holders of Capital Securities in certain circumstances have the right to
direct the Property Trustee to exercise its rights as the holder of the
Subordinated Notes. See "Description of the Offered Capital Securities--
Declaration Events of Default" and "--Voting Rights."
BOOK-ENTRY AND SETTLEMENT
If distributed to holders of Capital Securities in connection with the
involuntary or voluntary dissolution, winding-up or liquidation of the Trust
as a result of the occurrence of a Special Event, the Subordinated Notes will
be issued in the form of one or more global certificates (each a "Global
Security") registered in the name of the depositary or its nominee. Except
under the limited circumstances described below, Subordinated Notes
represented by the Global Security will not be exchangeable for, and will not
otherwise be issuable as, Subordinated Notes in definitive form. The Global
Securities described above may not be transferred except by the depositary to
a nominee of the depositary or by a nominee of the depositary to the
depositary or another nominee of the depositary or to a successor depositary
or its nominee.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of such securities in definitive form. Such laws may
impair the ability to transfer beneficial interests in such a Global Security.
Except as provided below, owners of beneficial interests in such a Global
Security will not be entitled to receive physical delivery of Subordinated
Notes in definitive form and will not be considered the holders (as defined in
the Subordinated Indenture) thereof for any purpose under the Subordinated
Indenture, and no Global Security representing Subordinated Notes shall be
exchangeable, except for another Global Security of like denomination and
tenor to be registered in the name of the depositary or its nominee or to a
successor depositary or its nominee. Accordingly, each Beneficial Owner must
rely on the procedures of the depositary or if such person is not a
Participant, on the procedures of the Participant through which such person
owns its interest to exercise any rights of a holder under the Subordinated
Indenture.
THE DEPOSITARY
If Subordinated Notes are distributed to holders of Capital Securities in
liquidation of such holders' interests in the Trust, DTC will act as
securities depositary for the Subordinated Notes. For a description of DTC and
the specific terms of the depositary arrangements, see "Description of the
Offered Capital Securities--Book-Entry Only Issuance--The Depository Trust
Company." As of the date of this Prospectus Supplement, the description
S-27
herein of DTC's book-entry system and DTC's practices as they relate to
purchases, transfers, notices and payments with respect to the Capital
Securities apply in all material respects to any debt obligations represented
by one or more Global Securities held by DTC. GWFC may appoint a successor to
DTC or any successor depositary in the event DTC or such successor depositary
is unable or unwilling to continue as a depositary for the Global Securities.
None of GWFC, the Trust, the Indenture Trustee, any paying agent and any
other agent of GWFC or the Indenture Trustee will have any responsibility or
liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests in a Global Security for such
Subordinated Notes or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
DISCONTINUANCE OF THE DEPOSITARY'S SERVICES
A Global Security shall be exchangeable for Subordinated Notes registered in
the names of persons other than the depositary or its nominee only if (i) the
depositary notifies GWFC that it is unwilling or unable to continue as a
depositary for such Global Security and no successor depositary shall have
been appointed, (ii) the depositary, at any time, ceases to be registered to
act as such depositary and no successor depositary shall have been appointed,
or (iii) GWFC, in its sole discretion, determines that such Global Security
shall be so exchangeable. Any Global Security that is exchangeable pursuant to
the preceding sentence shall be exchangeable for Subordinated Notes registered
in such names as the depositary shall direct. It is expected that such
instructions will be based upon directions received by the depositary from its
Participants with respect to ownership of beneficial interests in such Global
Security.
MISCELLANEOUS
The Subordinated Indenture will provide that GWFC, in its capacity as issuer
of the Subordinated Notes, will pay all costs, expenses, debts and obligations
of the Trust other than with respect to the Trust Securities.
EFFECT OF OBLIGATIONS UNDER THE
SUBORDINATED NOTES AND THE GUARANTEE
As set forth in the Declaration, the sole purpose of the Trust is to issue
the Trust Securities evidencing undivided beneficial interests in the assets
of the Trust, and to invest the proceeds from such issuance and sale in the
Subordinated Notes.
As long as payments of interest and other payments are made when due on the
Subordinated Notes, such payments will be sufficient to cover distributions
and payments due on the Trust Securities primarily because (i) the aggregate
principal amount of Subordinated Notes will be equal to the sum of the
aggregate stated liquidation amount of the Trust Securities; (ii) the interest
rate and payment dates on the Subordinated Notes will match the distribution
rate and distribution and other payment dates for the Capital Securities;
(iii) GWFC shall pay for all costs, expenses, debts and obligations of the
Trust (other than with respect to the Trust Securities); and (iv) the
Declaration provides that the Regular Trustees shall not take any action, or
cause or permit the Trust to, among other things, engage in any activity, that
is not consistent with the purposes of the Trust.
Payments of distributions (to the extent funds therefor are available) and
other payments due on the Capital Securities (to the extent funds therefor are
available) are guaranteed by GWFC as and to the extent set forth under
"Description of Guarantee" in the accompanying Prospectus. If GWFC does not
make interest payments on the Subordinated Notes purchased by the Trust, it is
expected that the Trust will not have sufficient funds to pay distributions on
the Capital Securities. The Guarantee does not apply to any payment of
distributions unless and until the Trust has sufficient funds for the payment
of such distributions.
If GWFC fails to make interest or other payments on the Subordinated Notes
when due (taking into account any Extension Period), the Declaration provides
a mechanism whereby the holders of the Capital Securities,
S-28
using the procedures described in "Description of the Offered Capital
Securities--Voting Rights," may direct the Property Trustee to enforce its
rights under the Subordinated Notes, including proceeding directly against
GWFC to enforce the Subordinated Notes.
If GWFC fails to make payments under the Guarantee, the Guarantee provides a
mechanism whereby the holders of the Capital Securities may direct the
Guarantee Trustee to enforce its rights thereunder. Any holder of Capital
Securities may institute a legal proceeding directly against GWFC to enforce
the Guarantee Trustee's rights under the Guarantee, without first instituting
a legal proceeding against the Trust, the Guarantee Trustee or any other
person or entity.
The obligations of GWFC under the Declaration, the Guarantee, the
Subordinated Notes and the Subordinated Indenture, taken together, provide a
full, irrevocable and unconditional guarantee on a subordinated basis by GWFC
of payments due on the Capital Securities. See "Description of Guarantee--
General" in the accompanying Prospectus.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following summary of certain United States federal income tax
consequences of the purchase, ownership and disposition of the Capital
Securities is based upon laws, regulations, rulings and decisions now in
effect, all of which are subject to change (with possible retroactive effect)
and possible differing interpretations. This discussion deals only with
Capital Securities held as capital assets and (i) does not purport to deal
with persons in special tax situations, such as financial institutions,
insurance companies, regulated investment companies, dealers in securities or
currencies, or persons whose functional currency is not the United States
dollar, (ii) does not include any description of the tax laws of any state or
local government or of any foreign government that may be applicable to the
Capital Securities, and (iii) does not deal with persons holding Capital
Securities as part of a position in a "straddle" or as part of a "hedging,"
"conversion" or other integrated investment transaction for federal income tax
purposes. This discussion also does not deal with holders other than the
original purchasers of the Capital Securities or with holders who are not U.S.
Holders (as defined below). Persons considering the purchase of the Capital
Securities should consult their tax advisors concerning the application of
United States federal income tax laws to their particular situations as well
as any consequences of the purchase, ownership and disposition of the Capital
Securities arising under the laws of any other taxing jurisdiction.
As used herein, the term "U.S. Holder" means a beneficial owner of a Capital
Security that is for United States federal income tax purposes (i) a citizen
or resident of the United States, (ii) a corporation, partnership or other
entity created or organized in or under the laws of the United States or of
any political subdivision thereof, (iii) an estate or trust the income of
which is subject to United States federal income taxation regardless of its
source, or (iv) any other person whose income or gain in respect of a Capital
Security is effectively connected with the conduct of a United States trade or
business. As used herein, the term "non-U.S. Holder" means a holder of a
Capital Security that is not a U.S. Holder.
CLASSIFICATION OF THE TRUST
In connection with the issuance of the Capital Securities, O'Melveny & Myers
LLP, special tax counsel to GWFC and the Trust, has rendered its opinion to
the effect that, under then current law and assuming full compliance with the
terms of the Declaration and the Subordinated Indenture (and certain other
documents), and based on certain facts and assumptions contained in such
opinion, the Trust will be classified for United States federal income tax
purposes as a grantor trust and not as an association taxable as a
corporation. Accordingly, for United States federal income tax purposes, each
U.S. Holder of a Capital Security will generally be considered the owner of an
undivided interest in the Subordinated Notes, and each U.S. Holder will be
required to include in its gross income its pro rata share of the interest
income, including original issue discount (as described below), paid or
accrued with respect to its undivided interest in those Subordinated Notes
whether or not cash is actually distributed to the U.S. Holder. See "Interest
Income and Original Issue Discount."
S-29
CLASSIFICATION OF THE SUBORDINATED NOTES
In connection with the issuance of the Subordinated Notes, O'Melveny & Myers
LLP, special tax counsel to GWFC and the Trust, will render its opinion
generally to the effect that, under then current United States federal income
tax law and assuming full compliance with the terms of the Subordinated
Indenture (and certain other documents), and based on certain facts and
assumptions contained in such opinion, the Subordinated Notes held by the
Trust will be classified for United States federal income tax purposes as
indebtedness of GWFC. By acceptance of a Capital Security, each holder
covenants to treat the Subordinated Notes as indebtedness and the Capital
Securities as evidence of an indirect beneficial ownership in the Subordinated
Notes.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under recently issued Treasury regulations applicable to debt instruments
issued on or after August 13, 1996 (the "Regulations"), a "remote" contingency
that stated interest will not be timely paid will be ignored in determining
whether a debt instrument is issued with original issue discount ("OID"). GWFC
believes that the likelihood of its exercising its option to defer payments is
remote. Based on the foregoing, GWFC believes that the Subordinated Notes will
not be considered to be issued with OID at the time of their original issuance
and, accordingly, a holder of a Capital Security should include in gross
income such holder's allocable share of interest on the Subordinated Notes.
Under the Regulations, if GWFC exercised its option to defer any payment of
interest, the Subordinated Notes would at that time be treated as issued with
OID, and all stated interest on the Subordinated Notes would thereafter be
treated as OID as long as the Subordinated Notes remained outstanding. In such
event, all of a holder's taxable interest income with respect to the
Subordinated Notes would be accounted for as OID on an economic accrual basis
regardless of such holder's method of tax accounting, and actual distributions
of stated interest would not be reported as taxable income. Consequently, a
holder would be required to include in gross income OID even though GWFC would
not make any actual cash payments during an Extension Period.
The Regulations have not been addressed in any rulings or other
interpretations by the Internal Revenue Service (the"IRS"), and it is possible
that the IRS could take a position contrary to the interpretation herein.
Subsequent uses of the term "interest" in this summary include income in the
form of OID.
Corporate U.S. Holders of Capital Securities will not be entitled to a
dividends received deduction with respect to any income recognized with
respect to the Capital Securities.
MARKET DISCOUNT AND BOND PREMIUM
U.S. Holders of Capital Securities, other than U.S. Holders who purchased
the Capital Securities for a price equal to their par amount plus accrued
interest upon their original issuance, may be considered to have acquired
their undivided interests in the Subordinated Notes at a market discount,
premium or acquisition premium as such phrases are defined for United States
federal income tax purposes. Such U.S. Holders are advised to consult their
tax advisors as to the income tax consequences of the acquisition, ownership
and disposition of the Capital Securities.
RECEIPT OF SUBORDINATED NOTES OR CASH UPON LIQUIDATION OF THE TRUST
Under certain circumstances, as described under the captions "Description of
the Offered Capital Securities--Special Event Redemption or Distribution," and
"--Liquidation of Trust and Distribution of Subordinated Notes to Holders,"
Subordinated Notes may be distributed to U.S. Holders in exchange for the
Capital Securities and in liquidation of the Trust. Under current law, such a
distribution, for United States federal income tax purposes, would be treated
as a non-taxable event to each U.S. Holder, and each U.S. Holder would receive
an aggregate tax basis in the Subordinated Notes equal to such U.S. Holder's
aggregate tax basis in its Capital Securities. A U.S. Holder's holding period
in the Subordinated Notes so received in liquidation of the Trust would
include the period during which the Capital Securities were held by such U.S.
Holder.
S-30
If, however, the liquidation of the Trust were to occur because the Trust is
subject to United States federal income tax with respect to income accrued or
received on the Subordinated Notes, the distribution of the Subordinated Notes
to holders of Capital Securities by the Trust would be a taxable event to the
Trust and each holder, and the holder would recognize gain or loss as if the
holder had exchanged its Capital Securities for the Subordinated Notes it
received upon the liquidation of the Trust. A holder of Capital Securities
will include interest in income in respect of Subordinated Notes received from
the Trust in the manner described above under "Interest Income and Original
Issue Document."
Under certain circumstances described herein (see "Description of the
Offered Capital Securities"), the Subordinated Notes may be redeemed for cash
and the proceeds of such redemption distributed to U.S. Holders in redemption
of their Capital Securities. Under current law, such a redemption would, for
United States federal income tax purposes, constitute a taxable disposition of
the redeemed Capital Securities, and a U.S. Holder would recognize gain or
loss as if it sold such redeemed Capital Securities for cash. See "Sales of
Capital Securities" below.
SALES OF CAPITAL SECURITIES
A holder that sells (including a redemption for cash) Capital Securities
will recognize gain or loss equal to the difference between its adjusted tax
basis in the Capital Securities and the amount realized on the sale of such
Capital Securities. Assuming that GWFC does not exercise its option to defer
payment of interest on the Subordinated Notes, and the Capital Securities are
not considered issued with OID, a holder's adjusted tax basis in the Capital
Securities generally will be its initial purchase price. If the Subordinated
Notes are deemed to be issued with OID as a result of GWFC's deferral of any
interest payment or otherwise, a holder's tax basis in the Capital Securities
generally will be its initial purchase price, increased by OID previously
includible in such holder's gross income to the date of disposition and
decreased by distributions or other payments received on the Capital
Securities since and including the date of the first Extension Period. Such
gain or loss generally will be a capital gain or loss (except to the extent
any amount realized is treated as a payment of accrued interest with respect
to such holder's pro rata share of the Subordinated Notes required to be
included in income) and generally will be long-term capital gain or loss if
the Capital Securities have been held for more than one year.
Should GWFC exercise its option to defer any payment of interest on the
Subordinated Notes, the Capital Securities may trade at a price that does not
accurately reflect the value of accrued but unpaid interest with respect to
the underlying Subordinated Notes. In the event of such a deferral, a holder
who disposes of its Capital Securities between record dates for payments of
distributions thereon will be required to include in income as ordinary income
accrued but unpaid interest on the Subordinated Notes to the date of
disposition as OID and to add such amount to its adjusted tax basis in its pro
rata share of the underlying Subordinated Notes deemed disposed of. To the
extent the selling price is less than the holder's adjusted tax basis, such
holder will recognize a capital loss. Subject to certain limited exceptions,
capital losses cannot be applied to offset ordinary income for United States
federal income tax purposes.
INFORMATION REPORTING TO U.S. HOLDERS
Income on the Capital Securities will be reported to U.S. Holders on Forms
1099, which forms should be mailed to U.S. Holders of Capital Securities by
January 31 following each calendar year.
BACKUP WITHHOLDING
Backup withholding of the United States federal income tax at a rate of 31%
may apply to payments made in respect of Subordinated Notes to registered
owners who are not "exempt recipients" or who fail to comply with certain
procedures for providing certain identifying information (such as the
registered owner's taxpayer identification number) in the required manner.
S-31
Upon the sale of Subordinated Notes to (or through) certain brokers, the
broker must withhold 31% of the entire purchase price, unless either (i) the
broker determines that the seller is an exempt recipient or (ii) the seller
provides, in the required manner, certain identifying information.
Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States federal income tax provided the required
information is furnished to the Internal Revenue Service.
POSSIBLE TAX LAW CHANGES
On March 19, 1996, President Clinton proposed the Bill, which would have,
among other things, generally denied corporate issuers a deduction for
interest in respect of certain debt obligations, such as the Subordinated
Notes issued on or after December 7, 1995. On March 29, 1996, Senate Finance
Committee Chairman William V. Roth, Jr. and House Ways and Means Committee
Chairman Bill Archer issued the joint statement, which indicated their intent
that the Bill, if adopted by either of the tax-writing committees of Congress,
would have an effective date that is no earlier than the date of "appropriate
Congressional action." In addition, Senator Daniel Patrick Moynihan and
Representatives Sam M. Gibbons and Charles B. Rangel wrote the Democrat
Letters, which supported the view expressed in the Joint Statement. Based upon
the Joint Statement, it is expected that if the Bill were to be enacted, such
legislation would not apply to the Subordinated Notes. There can be no
assurances, however, that the effective date guidance contained in the Joint
Statement and Democrat Letters will be incorporated into the Bill, if enacted,
or that other legislation enacted after the date hereof will not otherwise
adversely affect the ability of GWFC to deduct the interest payable on the
Subordinated Notes. Accordingly, there can be no assurance that a Tax Event
will not occur. See "Description of the Offered Capital Securities--Special
Event Redemption or Distribution" and "Risk Factors--Possible Tax Law Changes
Affecting the Capital Securities."
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT
TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF
THE CAPITAL SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR
OTHER TAX LAWS.
CERTAIN ERISA CONSIDERATIONS
Each fiduciary of a pension, profit-sharing or other employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA") (a "Plan"), should consider the fiduciary standards of ERISA in the
context of the Plan's particular circumstances before authorizing an
investment in the Capital Securities. Accordingly, among other factors, the
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.
Section 406 of ERISA and Section 4975 of the Code prohibit Plans, as well as
individual retirement accounts and Keogh plans subject to Section 4975 of the
Code (also "Plans"), from engaging in certain transactions involving "plan
assets" with persons who are "parties in interest" under ERISA or
"disqualified persons" under the Code ("Parties in Interest") with respect to
such Plan. A violation of these "prohibited transaction" rules may result in
an excise tax or other liabilities under ERISA and/or Section 4975 of the Code
for such persons, unless exemptive relief is available under an applicable
statutory or administrative exemption. Employee benefit plans that are
governmental plans (as defined in Section 3(32) of ERISA), certain church
plans (as defined in Section 3(33) of ERISA) and foreign plans (as described
in Section 4(b)(5) of ERISA) are not subject to the requirements of ERISA or
Section 4975 of the Code.
S-32
Under a regulation (the "Plan Assets Regulation") issued by the U.S.
Department of Labor (the "DOL"), the assets of the Trust would be deemed to be
"plan assets" of a Plan for purposes of ERISA and Section 4975 of the Code if
"plan assets" of the Plan were used to acquire an equity interest in the Trust
and no exception were applicable under the Plan Assets Regulation. An "equity
interest" is defined under the Plan Assets Regulation as any interest in an
entity other than an instrument which is treated as indebtedness under
applicable local law and which has no substantial equity features and
specifically includes a beneficial interest in a trust.
Pursuant to an exception contained in the Plan Assets Regulation, the assets
of the Trust would not be deemed to be "plan assets" of investing Plans if,
immediately after the most recent acquisition of any equity interest in the
Trust, less than 25% of the value of each class of equity interests in the
Trust were held by Plans, other employee benefit plans not subject to ERISA or
Section 4975 of the Code (such as governmental, church and foreign plans), and
entities holding assets deemed to be "plan assets" of any Plan (collectively,
"Benefit Plan Investors"), or if the Capital Securities were "publicly-offered
securities" for purposes of the Plan Assets Regulation. No assurance can be
given that the value of the Capital Securities held by Benefit Plan Investors
will be less than 25% of the total value of such Capital Securities at the
completion of the initial offering or thereafter, and no monitoring or other
measures will be taken with respect to the satisfaction of the conditions to
this exception. In addition, the Capital Securities may be "publicly-offered
securities" under the Plan Assets Regulation if they are widely held (i.e.,
held by 100 or more investors independent of the Trust and each other) and
freely transferable; no assurance can be given that these conditions will be
met. All of the Common Securities will be purchased and initially held by
GWFC.
Certain transactions involving the Trust could be deemed to constitute
direct or indirect prohibited transactions under ERISA and Section 4975 of the
Code with respect to a Plan if the Capital Securities were acquired with "plan
assets" of such Plan and the assets of the Trust were deemed to be "plan
assets" of Plans investing in the Trust. For example, if GWFC is a Party in
Interest with respect to an investing Plan (either directly or by reason of
its ownership of its subsidiaries), extensions of credit between GWFC and the
Trust (as represented by the Subordinated Notes and the Guarantee) would
likely be prohibited by Section 406(a)(1)(B) of ERISA and Section
4975(c)(1)(B) of the Code, unless exemptive relief were available under an
applicable administrative exemption (see below). In addition, if GWFC were
considered to be a fiduciary with respect to the Notes as a result of certain
powers it holds (such as the powers to remove and replace the Property
Trustee), certain operations of the Notes, including the optional redemption
of the Subordinated Notes, could be considered to be prohibited transactions
under Section 406(b) of ERISA and Section 4975(c)(1)(E) of the Code. In
addition, each investing plan, by purchasing the Capital Securities, will be
deemed to have directed the Trust to invest in the Subordinated Notes, to have
appointed the Property Trustee, and to have agreed that GWFC is not a
fiduciary with respect to such plan's interest in the Capital Securities.
The DOL has issued five prohibited transaction class exemptions ("PTCEs")
that may provide exemptive relief if required for direct or indirect
prohibited transactions that may arise from the purchase or holding of the
Capital Securities if assets of the Trust were deemed to be "plan assets" of
Plans investing in the Trust as described above. Those class exemptions are
PTCE 96-23 (for certain transactions determined by in-house asset managers),
PTCE 95-60 (for certain transactions involving insurance company general
accounts), PTCE 91-38 (for certain transactions involving bank collective
investment funds), PTCE 90-1 (for certain transactions involving insurance
company separate accounts), and PTCE 84-14 (for certain transactions
determined by independent qualified asset managers).
Because the Capital Securities may be deemed to be equity interests in the
Trust for purposes of applying ERISA and Section 4975 of the Code, the Capital
Securities may not be purchased or held by any Plan, any entity whose
underlying assets include "plan assets" by reason of any Plan's investment in
the entity (a "Plan Asset Entity") or any person investing "plan assets" of
any Plan, unless such purchaser or holder is eligible for the exemptive relief
available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or another applicable
exemption. Any purchaser or holder of the Capital Securities or any interest
therein will be deemed to have represented by its purchase and holding thereof
that it either (a) is not a Plan or (b) is eligible for the exemptive relief
available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or another applicable
exemption with respect to such purchase
S-33
or holding. If a purchaser or holder of the Capital Securities that is a Plan
or a Plan Asset Entity elects to rely on an exemption other than PTCE 96-23,
95-60, 91-38, 90-1 or 84-14, GWFC and the Trust may require a satisfactory
opinion of counsel or other evidence with respect to the availability of such
exemption for such purpose and holding.
Due to the complexity of these rules and the penalties that may be imposed
upon persons involved in non-exempt prohibited transactions, it is
particularly important that fiduciaries or other persons considering
purchasing the Capital Securities on behalf of or with "plan assets" of any
Plan consult with their counsel regarding the potential consequences if the
assets of the Trust were deemed to be "plan assets" and the availability of
exemptive relief under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or any other
applicable exemption.
S-34
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, GWFC and
the Trust have agreed that the Trust will sell to each of the Underwriters
named below, and each of such Underwriters has severally agreed to purchase
from the Trust, the respective number of Capital Securities set forth opposite
its name below:
NUMBER OF
CAPITAL
UNDERWRITER SECURITIES
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Goldman, Sachs & Co. .............................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated......................................................
Lehman Brothers Inc. .............................................
Smith Barney Inc. ................................................
-------
Total......................................................... 165,000
=======
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all the Capital Securities
offered hereby, if any are taken.
The Underwriters propose to offer the Capital Securities in part directly to
the public at the initial public offering price set forth on the cover page of
this Prospectus Supplement and in part to certain securities dealers at such
price less a concession of $ per Capital Security. The Underwriters may
allow, and such dealers may reallow, a concession not in excess of $ per
Capital Security to certain brokers and dealers. After the Capital Securities
are released for sale to the public, the offering price and other selling
terms may from time to time be varied by the Underwriters.
In view of the fact that the proceeds from the sale of the Capital
Securities will be used to purchase the Subordinated Notes issued by GWFC, the
Underwriting Agreement provides that GWFC will pay as Underwriters'
compensation for the Underwriters' arranging the investment therein of such
proceeds an amount of $ per Capital Security for the accounts of the
several Underwriters.
GWFC and the Trust have agreed that, during the period beginning from the
date of the Underwriting Agreement and continuing to and including ,
they will not offer, sell, contract to sell or otherwise dispose of any
Capital Securities, any other beneficial interests in the assets of the Trust,
or any capital securities or any other securities of the Trust or GWFC which
are substantially similar to the Capital Securities, including any guarantee
of such securities, or any securities convertible into or exchangeable for or
representing the right to receive securities, preferred securities or any such
substantially similar securities of either the Trust or GWFC, without the
prior written consent of the Underwriters, except for the Capital Securities
offered in connection with this offering.
Prior to this offering, there has been no public market for the Capital
Securities. The Underwriters have advised GWFC that they intend to make a
market in the Capital Securities, but are not obligated to do so and may
discontinue market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for the Capital Securities.
S-35
GWFC and the Trust have agreed to indemnify the several Underwriters
against, or contribute to payments that the Underwriters may be required to
make in respect of, certain liabilities, including liabilities under the
Securities Act of 1933.
Certain of the Underwriters or their affiliates have provided from time to
time, and expect to provide in the future, investment or commercial banking
services to GWFC and its affiliates, for which such Underwriters or their
affiliates have received or will receive customary fees and commissions.
LEGAL MATTERS
The validity of the Capital Securities will be passed upon by Skadden, Arps,
Slate, Meager & Flom (Delaware), special counsel to the Trust. The validity of
the Subordinated Notes, the Guarantee and certain matters relating thereto
will be passed upon for GWFC by O'Melveny & Myers LLP. Brown & Wood LLP will
act as counsel to the Underwriters.
S-36
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHOR-IZED. THIS PROSPECTUS SUPPLEMENT AND
THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PRO-
SPECTUS SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS
NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CRE-
ATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF GWFC SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO ITS DATE.
-----------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
----
Risk Factors.............................................................. S-4
Recent Financial Results.................................................. S-8
Capitalization of GWFC.................................................... S-9
Accounting Treatment...................................................... S-9
Reason for Transaction.................................................... S-9
Use of Proceeds........................................................... S-9
Description of the Offered Capital Securities............................. S-11
Description of the Subordinated Notes..................................... S-23
Effect of Obligations Under the Subordinated Notes and the Guarantee...... S-28
Certain Federal Income Tax Consequences................................... S-29
Certain ERISA Considerations.............................................. S-32
Underwriting.............................................................. S-35
Legal Matters............................................................. S-36
PROSPECTUS
Available Information....................................................... 2
Incorporation of Certain Documents by Reference............................. 2
The Company................................................................. 4
The Trust................................................................... 4
Use of Proceeds............................................................. 5
Selected Financial Data..................................................... 6
Ratio of Earnings to Fixed Charges.......................................... 7
Description of Debt Securities.............................................. 7
Description of Preferred Stock.............................................. 14
Description of Depositary Shares............................................ 18
Description of Common Stock................................................. 21
Description of Preferred Securities......................................... 22
Description of Guarantee.................................................... 23
Description of Securities Warrants.......................................... 26
Plan of Distribution........................................................ 29
Experts..................................................................... 29
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GREAT WESTERN FINANCIAL TRUST II
% CAPITAL SECURITIES, SERIES A
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
GREAT WESTERN FINANCIAL CORPORATION
-----------
PROSPECTUS SUPPLEMENT
-----------
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
LEHMAN BROTHERS
SMITH BARNEY INC.
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