Aon plc, et al. – ‘424B3’ on 4/4/97

As of:  Friday, 4/4/97   ·   Accession #:  950131-97-2401   ·   File #s:  333-21237, -01

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Prospectus   —   Rule 424(b)(3)
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Document/Exhibit                   Description                      Pages   Size 

 1: 424B3       Prospectus Dated 03/28/97                             75    417K 

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                                                            FILE NO. 333-21237
                                                    THIS DOCUMENT IS BEING FILED
                                                      PURSUANT TO RULE 424(b)(3)

PROSPECTUS                                                                      

AON CAPITAL A 

OFFER TO EXCHANGE ITS 8.205% CAPITAL SECURITIES WHICH HAVE BEEN REGISTERED  
UNDER THE SECURITIES ACT OF 1933 FOR ANY AND ALL OF ITS OUTSTANDING 8.205%  
CAPITAL SECURITIES  

(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY) FULLY AND UNCONDITIONALLY  
GUARANTEED, AS DESCRIBED HEREIN, BY AON CORPORATION 

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK 
CITY TIME, ON MAY 5, 1997, UNLESS EXTENDED.                                     

Aon Capital A, a trust created under the laws of the State of Delaware (the 
"Trust"), hereby offers, upon the terms and subject to the conditions set       
forth in this Prospectus (as the same may be amended or supplemented from time  
to time, the "Prospectus") and in the accompanying Letter of Transmittal        
(which together constitute the "Exchange Offer"), to exchange up to             
$800,000,000 aggregate Liquidation Amount of its 8.205% Capital Securities      
(the "New Capital Securities") which have been registered under the Securities  
Act of 1933, as amended (the "Securities Act"), pursuant to a Registration      
Statement (as defined under "Available Information") of which this Prospectus   
constitutes a part, for a like aggregate Liquidation Amount of its outstanding  
8.205% Capital Securities (the "Old Capital Securities"), of which              
$800,000,000 aggregate Liquidation Amount is outstanding. Pursuant to the       
Exchange Offer, Aon Corporation, a Delaware corporation (the "Company" or       
"Aon"), will exchange its guarantee of the payment of Distributions and         
payments on liquidation or redemption of the Old Capital Securities (the "Old   
Guarantee") for a like guarantee of the New Capital Securities (the "New        
Guarantee") and all of its 8.205% Junior Subordinated Deferrable Interest       
Debentures (the "Old Junior Subordinated Debentures"), of which $824,000,000    
aggregate principal amount is outstanding, for a like aggregate principal       
amount of its 8.205% Junior Subordinated Deferrable Interest Debentures (the    
"New Junior Subordinated Debentures"), which New Guarantee and New Junior       
Subordinated Debentures also have been registered under the Securities Act.     
The Old Capital Securities, the Old Guarantee and the Old Junior Subordinated   
Debentures are collectively referred to herein as the "Old Securities" and the  
New Capital Securities, the New Guarantee and the New Junior Subordinated       
Debentures are collectively referred to herein as the "New Securities."         

The forms and terms of the New Securities are identical in all material     
respects to the respective forms and terms of the Old Securities, except that   
(i) the New Securities have been registered under the Securities Act and        
therefore will not be subject to certain restrictions on transfer applicable    
to the Old Securities, (ii) the New Capital Securities will not provide for     
any increase in the Distribution rate thereon and (iii) the New Junior          
Subordinated Debentures will not provide for any increase in the interest rate  
thereon. See "Description of Securities" and "Description of Old Securities."   
The New Capital Securities are being offered for exchange, and the New          
Guarantee and New Junior Subordinated Debentures will be exchanged, in order    
to satisfy certain obligations of the Company and the Trust under three         
Registration Rights Agreements, each dated as of January 13, 1997               
(collectively, the "Registration Rights Agreement"), among the Company, the     
Trust and the Initial Purchasers (as defined herein). In the event that the     
Exchange Offer is consummated, any Old Capital Securities that remain           
outstanding and the New Capital Securities issued in the Exchange Offer will    
vote together as a single class for purposes of determining whether holders of  
the requisite percentage in outstanding Liquidation Amount thereof have taken   
certain actions or exercised certain rights under the Amended and Restated      
Trust Agreement of the Trust. In the event the Exchange Offer is consummated,   
(i) the New Guarantee will apply to any Old Capital Securities that remain      
outstanding and to any New Capital Securities issued in the Exchange Offer,     
(ii) the Old Junior Subordinated Debentures will be retired and canceled and    
(iii) the New Junior Subordinated Debentures will be issued to The Bank of New  
York, as Property Trustee under the Trust.                                      
                                                      (continued on next page)

----------------  

SEE "RISK FACTORS" COMMENCING ON PAGE 18 FOR CERTAIN INFORMATION THAT SHOULD
BE CONSIDERED BY HOLDERS WHO TENDER OLD CAPITAL SECURITIES IN THE EXCHANGE      
OFFER.                                                                          

----------------  

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND  
EXCHANGE  COMMISSION  OR  ANY  STATE  SECURITIES COMMISSION  NOR  HAS  THE  
SECURITIES AND  EXCHANGE COMMISSION  OR ANY STATE  SECURITIES COMMISSION  
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESEN-  
TATION TO THE CONTRARY IS A CRIMINAL OFFENSE.                         

----------------  

The date of this Prospectus is March 28, 1997.      

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 Old Capital Securities may be tendered for exchange on or prior to 5:00 p.m.,
New York City time, on May 5, 1997 (such time on such date being hereinafter    
called the "Expiration Date"), unless the Exchange Offer is extended by the     
Company and the Trust (in which case the term "Expiration Date" shall mean the  
latest date and time to which the Exchange Offer is extended). Tenders of Old   
Capital Securities may be withdrawn at any time on or prior to the Expiration   
Date. The Exchange Offer is not conditioned upon any minimum Liquidation Amount 
of Old Capital Securities being tendered for exchange. However, the Exchange    
Offer is subject to certain conditions which may be waived by the Company and   
the Trust in their reasonable discretion and to the terms and provisions of the 
Registration Rights Agreement. Old Capital Securities may be tendered for       
exchange in whole or in part having a Liquidation Amount of not less than       
$100,000 (100 Old Capital Securities) or any integral multiple of $1,000        
Liquidation Amount (1 Old Capital Security) in excess thereof. The Company has  
agreed to pay all expenses of the Trust, including expenses related to the      
Exchange Offer. See "The Exchange Offer--Fees and Expenses." Each New Capital   
Security will accumulate Distributions from the most recent Distribution Date   
(as defined in "Description of Securities--Description of Capital Securities--  
Distributions") on the Old Capital Securities surrendered in exchange for such  
New Capital Securities or, if no Distributions have been paid or provided for   
on such Old Capital Securities, from January 1, 1997. As a result, holders of   
Old Capital Securities that are accepted for exchange will not receive          
accumulated Distributions on such Old Capital Securities for any period from    
and after the most recent Distribution Date on such Old Capital Securities or,  
if no Distributions have been paid or provided for on such Old Capital          
Securities, from and after January 1, 1997, and such holders will be deemed to  
have waived the right to receive any Distributions on such Old Capital          
Securities.                                                                     

Neither the Company nor the Trust will receive any cash or other proceeds   
from the issuance of the New Capital Securities offered hereby. No dealer-      
manager is being used in connection with this Exchange Offer. See "Use of       
Proceeds From the Sale of Old Capital Securities" and "Plan of Distribution."   

As the context may require, unless expressly stated otherwise, (i) "Capital 
Securities" means the Old Capital Securities and, in the event the Exchange     
Offer is consummated, the New Capital Securities, (ii) "Junior Subordinated     
Debentures" means the Old Junior Subordinated Debentures and, in the event the  
Exchange Offer is consummated, the New Junior Subordinated Debentures, (iii)    
"Guarantee" means the Old Guarantee and, in the event the Exchange Offer is     
consummated, the New Guarantee and (iv) "Securities" means the Old Securities   
and, in the event the Exchange Offer is consummated, the New Securities. In     
addition, as used herein, (i) the "Indenture" means the Junior Subordinated     
Indenture dated as of January 13, 1997, as amended and supplemented from time   
to time, between the Company and The Bank of New York, as trustee (the          
"Debenture Trustee"), (ii) the "Trust Agreement" means the Amended and Restated 
Trust Agreement dated as of January 13, 1997 relating to the Trust among the    
Company, as Depositor, The Bank of New York, as Property Trustee (the "Property 
Trustee"), The Bank of New York (Delaware), as Delaware Trustee (the "Delaware  
Trustee"), the Administrative Trustees named therein (the "Administrative       
Trustees" and, collectively with the Property Trustee and Delaware Trustee, the 
"Issuer Trustees") and the holders, from time to time, of the Capital           
Securities, (iii) the "Guarantee Agreement" means the Capital Securities        
Guarantee Agreement dated as of January 13, 1997 (the "Old Guarantee            
Agreement") between the Company and The Bank of New York, as trustee (the       
"Guarantee Trustee"), and, in the event the Exchange Offer is consummated, the  
Capital Securities Guarantee Agreement to be entered into between the Company   
and the Guarantee Trustee (the "New Guarantee Agreement") relating to the Old   
Guarantee and the New Guarantee, respectively, and (iv) the "Expense Agreement" 
means the Agreement as to Expenses and Liabilities dated as of January 13, 1997 
between the Company and the Trust.                                              

 The Capital Securities represent undivided beneficial interests in the assets
of the Trust. The Company is the owner of all of the beneficial interests       
represented by common securities of the Trust (the "Common Securities" and,     
collectively with the Capital Securities, the "Trust Securities"). The Bank of  
New York is the Property Trustee. The Trust exists for the purpose of issuing   
the Trust Securities and investing the proceeds thereof in the Junior           
Subordinated Debentures. The Junior Subordinated Debentures mature on January   
1, 2027                                                                         

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(the "Stated Maturity"). The Capital Securities have a preference under         
certain circumstances with respect to cash distributions and amounts payable    
on liquidation, redemption or otherwise over the Common Securities. See         
"Description of Securities--Description of Capital Securities--Subordination    
of Common Securities."                                                          

Holders of Capital Securities are entitled to receive preferential          
cumulative cash distributions and the holder of the Common Securities is        
entitled to receive cumulative cash distributions arising from the payment of   
interest on the Junior Subordinated Debentures accumulating from January 1,     
1997 and payable semi-annually in arrears on the 1st day of January and July    
of each year, commencing July 1, 1997, at the annual rate of 8.205% of the      
Liquidation Amount of $1,000 per Capital Security and at the annual rate of     
8.205% of the Liquidation Amount of $1,000 per Common Security                  
("Distributions"). The Company has the right to defer payments of interest on   
the Junior Subordinated Debentures at any time or from time to time for a       
period not exceeding 10 consecutive semi-annual periods with respect to each    
deferral period (each, an "Extension Period"), provided that no Extension       
Period may extend beyond the Stated Maturity or any earlier prepayment date.    
At any time following the termination of any Extension Period and the payment   
of all amounts then due, the Company may elect to begin a new Extension         
Period, subject to the foregoing requirements. If interest payments on the      
Junior Subordinated Debentures are so deferred, Distributions on the Capital    
Securities and on the Common Securities will also be deferred and the Company   
will not be permitted, subject to certain exceptions described herein, to       
declare or pay any cash distributions with respect to the Company's capital     
stock (which includes common and preferred stock) or to make any payment with   
respect to debt securities of the Company that rank on a parity with or junior  
to the Junior Subordinated Debentures. During an Extension Period, interest on  
the Junior Subordinated Debentures will continue to accrue (and the amount of   
Distributions to which holders of the Capital Securities are entitled will      
accumulate) at the rate of 8.205% per annum, compounded semi-annually, and      
holders of Capital Securities will be required to accrue interest income for    
United States federal income tax purposes. See "Description of Securities--     
Description of Junior Subordinated Debentures--Option to Defer Interest         
Payments" and "Certain Federal Income Tax Consequences--Interest Income and     
Original Issue Discount."                                                       

The Company has, through the Guarantee, the Guarantee Agreement, the Trust  
Agreement, the Junior Subordinated Debentures, the Indenture and the Expense    
Agreement, taken together, fully, irrevocably and unconditionally guaranteed    
on a subordinated basis all of the Trust's obligations under the Old Capital    
Securities and the New Capital Securities. The combined operation of these      
documents provides a full, irrevocable and unconditional guarantee of the       
Trust's obligations under the Old Capital Securities and the New Capital        
Securities. See "Relationship Among the Capital Securities, the Junior          
Subordinated Debentures, the Guarantee and the Expense Agreement--Full and      
Unconditional Guarantee." The Guarantee of the Company guarantees the payment   
of Distributions and payments on liquidation or redemption of the Capital       
Securities, but only in each case to the extent of funds held by the Trust, as  
described herein. See "Description of Securities--Description of Guarantee."    
If the Company does not make interest payments on the Junior Subordinated       
Debentures held by the Trust, the Trust will have insufficient funds to pay     
Distributions on the Capital Securities. The Guarantee does not cover payment   
of Distributions when the Trust does not have sufficient funds to pay such      
Distributions. In the event of a Debenture Event of Default (as defined in      
"Description of Securities--Description of Junior Subordinated Debentures--     
Debenture Events of Default") under the Indenture, a holder of Capital          
Securities may institute a legal proceeding directly against the Company to     
enforce payment of such Distributions to such holder. See "Description of       
Securities--Description of Junior Subordinated Debentures--Enforcement of       
Certain Rights By Holders of Capital Securities." The obligations of the        
Company under the Guarantee and the Junior Subordinated Debentures are          
unsecured and are subordinate and junior in right of payment to all Senior      
Indebtedness (as defined in "Description of Securities--Description of Junior   
Subordinated Debentures--Subordination") of the Company. Senior Indebtedness    
of the Company includes existing and future senior debt, senior subordinated    
debt and subordinated debt of the Company. As of December 31, 1996, there was   
approximately $735 million of Senior Indebtedness of the Company outstanding.   

The Capital Securities are subject to mandatory redemption in whole but not 
in part (i) at the Stated Maturity upon repayment of the Junior Subordinated    
Debentures at a redemption price equal to the principal amount of, plus         
accrued interest on, the Junior Subordinated Debentures (the "Maturity          
Redemption Price") and (ii) contemporaneously with the optional prepayment by   
the Company of the Junior Subordinated                                          

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Debentures upon the occurrence and continuation of a Tax Event or an            
Investment Company Event (each as defined in "Risk Factors--Tax Event or        
Investment Company Event Redemption") at a redemption price equal to the Event  
Prepayment Price (as defined below) (the "Event Redemption Price"). The         
Maturity Redemption Price and the Event Redemption Price may be referred to     
herein as the "Redemption Price." See "Description of Securities--Description   
of Capital Securities--Redemption." The Junior Subordinated Debentures are      
prepayable prior to the Stated Maturity at the option of the Company at any     
time, in whole but not in part, upon the occurrence and continuation of a Tax   
Event or an Investment Company Event at the Event Prepayment Price equal to     
the greater of (a) 100% of the principal amount thereof or (b) as determined    
by the Quotation Agent (as defined in "Description of Securities--Description   
of Junior Subordinated Debentures--Tax Event or Investment Company Event        
Prepayment"), the sum of the present value of 100% of the principal amount      
that would be payable on January 1, 2027, together with the present values of   
scheduled payments of interest from the prepayment date to January 1, 2027, in  
each case, discounted to the prepayment date on a semi-annual basis (assuming   
a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury     
Rate (as defined in "Description of Securities--Description of Junior           
Subordinated Debentures--Tax Event or Investment Company Event Prepayment"),    
plus, in each case, accrued interest thereon to but excluding the date of       
prepayment. The Event Prepayment Price may also be referred to herein as the    
"Prepayment Price." See "Description of Securities--Description of Junior       
Subordinated Debentures" and "--Tax Event or Investment Company Event           
Prepayment."                                                                    

The Company has the right to terminate the Trust at any time and, after     
satisfaction of liabilities to creditors of the Trust as required by            
applicable laws, cause the Junior Subordinated Debentures to be distributed to  
the holders of the Capital Securities in liquidation of the Trust subject to    
the Company having received an opinion of counsel to the effect that such       
distribution will not be a taxable event to holders of Capital Securities. See  
"Description of Securities--Capital Securities--Liquidation of the Trust and    
Distribution of Junior Subordinated Debentures" and "Certain Federal Income     
Tax Consequences--Distribution of Junior Subordinated Debentures to Holders of  
Capital Securities."                                                            

The Trust is making the Exchange Offer for the Capital Securities in        
reliance on the position of the staff of the Division of Corporation Finance    
of the Securities and Exchange Commission (the "Commission") as set forth in    
certain interpretive letters addressed to third parties in other transactions.  
Based on these interpretations by the staff of the Division of Corporation      
Finance, and subject to the conditions described herein, the Company and the    
Trust believe that a holder of Old Capital Securities (other than a holder who  
is (a) a broker-dealer who purchased the Old Capital Securities directly from   
the Trust to resell pursuant to Rule 144A under the Securities Act ("Rule       
144A") or any other available exemption under the Securities Act, (b) a person  
participating in the distribution of the Old Capital Securities or (c) a        
person who is an "affiliate" of the Company or the Trust) who exchanges Old     
Capital Securities in the Exchange Offer for New Capital Securities and then    
resells such New Capital Securities will be viewed by the staff no differently  
than a non-affiliated purchaser of registered securities who purchases such     
securities in a registered primary offering of securities and, after            
completion of such registered offering, may resell the New Capital Securities   
without further compliance with the registration and prospectus delivery        
requirements of the Securities Act, provided that such New Capital Securities   
are acquired in the ordinary course of such holder's business and that such     
holder is not participating, and has no arrangement or understanding with any   
person to participate, in a distribution (within the meaning of the Securities  
Act) of such New Capital Securities. Subject to the conditions described        
herein, the Company and the Trust also believe that a broker-dealer may         
participate in the Exchange Offer with respect to Old Capital Securities        
acquired for its own account as a result of market-making activities or other   
trading activities, provided that in connection with any resales of New         
Capital Securities received in exchange for such Old Capital Securities, such   
broker-dealer delivers a prospectus meeting the requirements of the Securities  
Act, which may be this Prospectus. See "Exchange Offer--Resales of New Capital  
Securities" and "Plan of Distribution."                                         

Prior to the Exchange Offer, there has been only a limited secondary market 
and no public market for the Old Capital Securities. The New Capital            
Securities will be a new issue of securities for which there currently is no    
market. Although Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co.,    
the initial purchasers of the Old Capital Securities (the "Initial              
Purchasers"), have advised the Company and the Trust that they currently        
intend to make a market in the New Capital Securities, the Initial Purchasers   
are not obligated to do                                                         

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so, and any market-making activity with respect to the New Capital Securities   
may be interrupted or discontinued at any time without notice. Accordingly, no  
assurance can be given that an active public or other market will develop for   
the New capital Securities or as to the liquidity of or the trading market for  
the New Capital Securities. The Company and the Trust will not apply for        
listing of the New Capital Securities on any securities exchange or for         
quotation through the National Association of Securities Dealers Automated      
Quotation System.                                                               

Any Old Capital Securities not tendered and accepted in the Exchange Offer  
will remain outstanding and will be entitled to the same rights and will be     
subject to the same limitations applicable thereto under the Trust Agreement    
(except for those rights which terminate upon consummation of the Exchange      
Offer). Following consummation of the Exchange Offer, the holders of any Old    
Capital Securities that remain outstanding will continue to be subject to all   
of the existing restrictions upon transfer thereof and neither the Company nor  
the Trust will have any further obligation to such holders (other than under    
certain limited circumstances) to provide for registration under the            
Securities Act of the Old capital Securities held by them. To the extent that   
Old Capital Securities are tendered and accepted in the Exchange Offer, a       
holder's ability to sell untendered Old Capital Securities could be adversely   
affected. See "Risk Factors--Consequences of a Failure to Exchange Old Capital  
Securities."                                                                    

THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT     
INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ THIS           
PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING      
WHETHER TO TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.  

----------------  

FOR NORTH CAROLINA INVESTORS: THESE SECURITIES HAVE NOT BEEN APPROVED OR    
DISAPPROVED BY THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH CAROLINA    
(THE "NORTH CAROLINA INSURANCE COMMISSIONER") NOR HAS THE NORTH CAROLINA        
INSURANCE COMMISSIONER RULED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.  

----------------  

THE NEW CAPITAL SECURITIES WILL BE ISSUED, AND MAY BE TRANSFERRED, ONLY IN  
BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100 NEW CAPITAL   
SECURITIES). ANY TRANSFER, SALE OR OTHER DISPOSITION OF NEW CAPITAL SECURITIES  
IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED    
TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE      
DEEMED NOT TO BE THE HOLDER OF SUCH NEW CAPITAL SECURITIES FOR ANY PURPOSE,     
INCLUDING BUT NOT LIMITED TO THE RECEIPT OF DISTRIBUTIONS ON SUCH NEW CAPITAL   
SECURITIES, AND SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER  
IN SUCH NEW CAPITAL SECURITIES.                                                 

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AVAILABLE INFORMATION 

The Company is subject to the informational requirements of the Securities  
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance        
therewith files reports, proxy statements and other information with the        
Commission. Such reports, proxy statements and other information can be         
inspected and copied at the public reference facilities of the Commission at    
450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional offices of   
the Commission located at 7 World Trade Center, Suite 1300, New York, New York  
10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,        
Illinois 60661. Copies of such material can also be obtained at prescribed      
rates by writing to the Public Reference Section of the Commission at 450       
Fifth Street, N.W., Washington, D.C. 20549. Such material may also be accessed  
electronically by means of the Commission's home page on the Internet at        
http://www.sec.gov. In addition, such reports, proxy statements and other       
information can be inspected at the offices of the New York Stock Exchange on   
which certain of the Company's securities are listed.                           

No separate financial statements of the Trust have been included herein. The
Company and the Trust do not consider that such financial statements would be   
material to holders of the Capital Securities because the Trust is a newly      
formed special purpose entity, has no operating history or independent          
operations and is not engaged in and does not propose to engage in any          
activity other than holding as trust assets the Junior Subordinated Debentures  
and issuing the Trust Securities. See "Aon Capital A" and "Description of       
Securities." In addition, the Company does not expect that the Trust will file  
reports under the Exchange Act with the Commission.                             

In connection therewith, the Company represents the following:              

(i) the Capital Securities will be presented on the consolidated balance
sheets of the Company as a separate line item entitled "Company-obligated   
Mandatorily Redeemable Preferred Capital Securities of Subsidiary Trust     
holding solely the Company's Securities";                                   

(ii) a footnote to the consolidated financial statements of the Company 
will disclose that the sole asset of the Trust is $824,000,000 aggregate    
principal amount of the Company's 8.205% Junior Subordinated Deferrable     
Interest Debentures due January 1, 2027; and                                

(iii) it will include in an audited footnote to the consolidated        
financial statements of the Company disclosure that (x) the Trust is wholly 
owned; (y) the sole asset of the Trust is $824,000,000 aggregate principal  
amount of the Company's 8.205% Junior Subordinated Deferrable Interest      
Debentures due January 1, 2027; and (z) the back-up guarantees, in the      
aggregate, provide a full and unconditional guarantee of the Trust's        
obligations under the Capital Securities.                                   

This Prospectus constitutes a part of a registration statement on Form S-4, 
as amended (the "Registration Statement") filed by the Company and the Trust    
with the Commission under the Securities Act. This Prospectus does not contain  
all the information set forth in the Registration Statement, certain parts of   
which are omitted in accordance with the rules and regulations of the           
Commission, and reference is hereby made to the Registration Statement and to   
the exhibits relating thereto for further information with respect to the       
Company and the New Securities. Any statements contained herein concerning the  
provisions of any document are not necessarily complete, and, in each           
instance, reference is made to the copy of such document filed as an exhibit    
to the Registration Statement or otherwise filed with the Commission. Each      
such statement is qualified in its entirety by such reference.                  

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 

The Company hereby incorporates by reference in this Prospectus the         
following reports filed with the Commission pursuant to Section 13 of the       
Exchange Act:                                                                   

(a) the Company's Annual Report on Form 10-K for the year ended December
31, 1996; and                                                               

(b) the Company's Current Report on Form 8-K dated January 15, 1997.    

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All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or  
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior   
to the termination of the offering of the New Securities offered hereby shall   
be deemed to be incorporated by reference into this Prospectus and to be a part 
hereof from the date of filing of such documents.                               

THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED 
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST FROM   
AON CORPORATION, 123 NORTH WACKER DRIVE, CHICAGO, ILLINOIS 60606, TELEPHONE:    
(312) 701-3000, ATTENTION: TREASURER. IN ORDER TO ENSURE TIMELY DELIVERY OF THE 
DOCUMENTS, ANY REQUEST SHOULD BE MADE BY APRIL 28, 1997.                        

Any statement contained in a document incorporated or deemed to be          
incorporated by reference herein shall be deemed to be modified or superseded   
for purposes of this Prospectus to the extent that a statement contained herein 
or in any other subsequently filed document which also is deemed to be          
incorporated by reference herein modifies or supersedes such statement. Any     
such statement so modified or superseded shall not be deemed, except as so      
modified or superseded, to constitute a part of this Prospectus.                

As used herein, the terms "Prospectus" and "herein" mean this Prospectus,   
including the documents incorporated or deemed to be incorporated herein by     
reference, as the same may be amended, supplemented or otherwise modified from  
time to time. Statements contained in this Prospectus as to the contents of any 
contract or other document referred to herein do not purport to be complete,    
and where reference is made to the particular provisions of such contract or    
other document, such provisions are qualified in all respects by reference to   
all of the provisions of such contract or other document.                       

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SUMMARY 

The following summary is qualified in its entirety by the more detailed     
information appearing elsewhere in this Prospectus or incorporated by reference 
herein.                                                                         

AON CAPITAL A 

The Trust is a statutory business trust, created under Delaware law pursuant
to the filing of a certificate of trust with the Delaware Secretary of State,   
which is governed by the Trust Agreement. The Trust's business and affairs are  
conducted by the Issuer Trustees: The Bank of New York, as Property Trustee,    
The Bank of New York (Delaware), as Delaware Trustee, and three individual      
Administrative Trustees who are employees or officers of or affiliated with the 
Company. The Trust exists for the exclusive purposes of (i) issuing and selling 
the Trust Securities, (ii) using the proceeds from the sale of the Common       
Securities and Old Capital Securities to acquire the Old Junior Subordinated    
Debentures, (iii) exchanging the Old Junior Subordinated Debentures for New     
Junior Subordinated Debentures in the Exchange Offer pursuant to the Indenture  
and (iv) engaging in only those other activities necessary, convenient or       
incidental thereto (such as registering the transfer of Capital Securities).    
Accordingly, the Junior Subordinated Debentures will be the sole assets of the  
Trust, and payments by the Company under the Junior Subordinated Debentures and 
the Expense Agreement will be the sole revenues of the Trust. All of the Common 
Securities are owned by the Company.                                            

The principal executive office of the Trust is c/o Aon Corporation, 123 N.  
Wacker Drive, Chicago, Illinois 60606-1700, and its telephone number is (312)   
701-3000.                                                                       

AON CORPORATION 

 Aon Corporation (the "Company") is an insurance services holding company that
comprises a family of insurance brokerage, consulting and consumer insurance    
companies. Through its insurance brokerage operations, the Company offers       
commercial insurance brokerage, alternative risk solutions, risk management,    
employee benefit and human resources consulting and managing general            
underwriting services. In addition, the Company's insurance underwriting        
businesses provide a variety of insurance products, including accident and      
health coverage, traditional life insurance, extended warranties and credit     
insurance. The Company's revenues were $3.5 billion in 1995 and $3.9 billion in 
1996. Based on 1995 insurance brokerage and consulting revenues and without     
giving effect to the acquisition of Alexander & Alexander Services Inc.         
("A&A"), management believes that the Company is the second largest insurance   
brokerage company in the world.                                                 

The principal executive offices of the Company are located at 123 N. Wacker 
Drive, Chicago, Illinois 60606-1700, and its telephone number is (312) 701-     
3000.                                                                           

ACQUISITION OF ALEXANDER & ALEXANDER

On January 15, 1997, Subsidiary Corporation, Inc. ("Purchaser"), a wholly   
owned subsidiary of the Company, consummated its cash tender offer (the         
"Offer") for all the outstanding shares of Common Stock, par value $1.00 per    
share (the "Common Stock"), and associated preferred stock purchase rights      
(collectively, the "Shares"), of A&A at a price of $17.50 net cash per Share.   
Pursuant to the Offer, Purchaser acquired approximately 44,293,552 Shares, or   
97% of the outstanding Shares. All Shares validly tendered and not withdrawn    
before expiration of the Offer at 12:00 midnight, New York City time, on        
January 14, 1997, were accepted for payment, including approximately 1,846,882  
Shares tendered pursuant to guaranteed delivery                                 

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procedures. The Offer was made pursuant to the Agreement and Plan of Merger,    
dated December 11, 1996, as amended (the "Merger Agreement"), among the         
Company, Purchaser and A&A. On February 20, 1997, the stockholders of A&A       
approved the merger of Purchaser into A&A (the "Merger"), and the Merger was    
effected promptly thereafter. Pursuant to the Merger, all remaining Shares      
(other than stock of A&A owned by A&A, the Company or any of their respective   
subsidiaries) were converted into the right to receive $17.50 cash per Share.   

On December 11, 1996, the Company and American International Group, Inc.    
("AIG") entered into the Stock Purchase and Sale Agreement ("Stock Purchase and 
Sale Agreement"). Pursuant to the Stock Purchase and Sale Agreement, the        
Company agreed to buy and AIG agreed to sell for $317.5 million, plus accrued   
dividends, all outstanding shares of 8% Series B Cumulative Convertible         
Preferred Stock, par value $1.00 per share (the "Series B Preferred Stock"), of 
A&A. On January 17, 1997, the Company purchased all 4,846,232 shares of Series  
B Preferred Stock. Each share of Series B Preferred Stock is currently          
convertible into approximately 2.94 shares of Class D Common Stock of A&A,      
which Class D Common Stock is exchangeable for Common Stock on a share-for-     
share basis.                                                                    

Purchaser's payment of approximately $775 million for the aggregate purchase
price of the Shares purchased by Purchaser in the Offer was funded with capital 
contributions to Purchaser by the Company. The Company derived the funds        
necessary for such capital contribution and the funds necessary to purchase the 
Series B Preferred Stock from cash on hand, the proceeds from the sale of       
commercial paper and fixed maturities and the proceeds of the sale of the Old   
Capital Securities. See "Pro Forma Consolidated Financial Information."         

 A&A is an insurance holding company which, through its subsidiaries, provides
professional risk management consulting, insurance brokerage and human resource 
management consulting on a global basis. A&A's revenues were $1.3 billion in    
1995 and $1.0 billion for the nine-month period ended September 30, 1996. Based 
on 1995 revenues, management of the Company believes that A&A is the fourth     
largest brokerage company in the world. Since 1994, A&A has engaged in a        
significant restructuring of its operations and, for the nine months ended      
September 30, 1996, A&A reported net income of $47.7 million, a 41.7% decrease  
from its net income of $81.9 million for the same period in the previous year.  

THE EXCHANGE OFFER

The Exchange Offer..........                                                    
                           Up to $800,000,000 aggregate Liquidation Amount
                          of New Capital Securities are being offered in
                            exchange for a like aggregate Liquidation Amount
                             of Old Capital Securities. Old Capital Securities
                            may be tendered for exchange in whole or in part
                        having a Liquidation Amount of not less than
                            $100,000 (100 Old Capital Securities) or any in-
                           tegral multiple of $1,000 Liquidation Amount (1
                             Old Capital Security) in excess thereof. The Com-
                            pany and the Trust are making the Exchange Offer
                           in order to satisfy their obligations under the
                             Registration Rights Agreement relating to the Old
                           Securities. For a description of the procedures
                          for tendering Old Capital Securities, see "The
                             Exchange Offer--Procedures for Tendering Old Cap-
ital Securities."   

Expiration Date.............                                                    
                         5:00 p.m., New York City time, on May 5, 1997
                            (such time on such date being hereinafter called
                            the "Expiration Date") unless the Exchange Offer
                        is extended by the Company and the Trust (in
                            which case the term "Expiration Date" shall mean
                          the latest date and time to which the Exchange
                            Offer is extended). See "The Exchange Offer--Ex-
                   piration Date; Extensions; Amendments."

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Conditions to the Exchange                                                      
Offer......................  The Exchange Offer is subject to certain condi-  
                            tions which may be waived by the Company and the
                           Trust in their reasonable discretion and to the
                           terms and conditions of the Registration Rights
                            Agreement. The Exchange Offer is not conditioned
                            upon any minimum Liquidation Amount of Old Capi-
                           tal Securities being tendered for exchange. See
                           "The Exchange Offer--Conditions to the Exchange
Offer."             

                           The Company and the Trust expressly reserve the
                             right, subject to applicable law, at any time and
                             from time to time, (i) to delay the acceptance of
                            the Old Capital Securities for exchange, (ii) to
                            terminate the Exchange Offer (whether or not any
                             Old Capital Securities have been accepted for ex-
                           change) if the Company or the Trust determines,
                         in its reasonable discretion, that any of the
                          conditions referred to under "The Exchange Of-
                           fer--Conditions to the Exchange Offer" have oc-
                             curred or exist or have not been satisfied, (iii)
                            to extend the Expiration Date and retain all Old
                           Capital Securities tendered pursuant to the Ex-
                           change Offer, subject, however, to the right of
                         holders of Old Capital Securities to withdraw
                           their tendered Old Capital Securities, and (iv)
                         to waive any condition or otherwise amend the
                           terms of the Exchange Offer in any respect. See
                             "The Exchange Offer--Expiration Date; Extensions;
Amendments."        

Procedures for Tendering                                                        
Old Capital Securities.....                                                   
                            Brokers, dealers, commercial banks, trust compa-
                            nies and other nominees who hold Old Capital Se-
                         curities through The Depository Trust Company
                             ("DTC") may effect tenders by book-entry transfer
                           in accordance with DTC's Automated Tender Offer
                             Program ("ATOP"). Holders of such Old Capital Se-
                        curities registered in the name of a broker,
                           dealer, commercial bank, trust company or other
                             nominee are urged to contact such person promptly
                             if they wish to tender Old Capital Securities. In
                           order for Old Capital Securities to be tendered
                           by a means other than by book-entry transfer, a
                       Letter of Transmittal must be completed and
                           signed in accordance with the instructions con-
                             tained therein. The Letter of Transmittal and any
                            other documents required by the Letter of Trans-
                            mittal must be delivered to The Bank of New York
                           (the "Exchange Agent") by mail, facsimile, hand
                             delivery or overnight carrier and either such Old
                           Capital Securities must be delivered to the Ex-
                            change Agent or specified procedures for guaran-
                             teed delivery must be complied with. See "The Ex-
                      change Offer--Procedures for Tendering Old
Capital Securities."

                             Letters of Transmittal, certificates for Old Cap-
                            ital Securities and any other documents required
                             by the Letter of Transmittal should not be deliv-
                            ered to the Company or the Trust. Such documents
                           should only be delivered to the Exchange Agent.
                          Questions regarding how to tender and requests
                         for information should be directed to the Ex-
                           change Agent. See "The Exchange Offer--Exchange
Agent."             

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Withdrawal Rights...........  Tenders of Old Capital Securities may be with-    
                           drawn at any time on or prior to the Expiration
                             Date by delivering a written notice of such with-
                           drawal to the Exchange Agent in conformity with
                             certain procedures set forth below under "The Ex-
             change Offer--Withdrawal Rights."

Resales of New Capital                                                          
Securities.................                                                   
                            Based on certain interpretations by the staff of
                           the Division of Corporation Finance of the Com-
                            mission, and subject to the conditions described
                            herein, the Company and the Trust believe that a
                          holder of Old Capital Securities (other than a
                           holder who is (a) a broker-dealer who purchased
                        the Old Capital Securities directly from the
                        Trust to resell pursuant to Rule 144A or any
                          other available exemption under the Securities
                            Act, (b) a person participating in the distribu-
                            tion of the Old Capital Securities or (c) a per-
                           son who is an "affiliate" of the Company or the
                          Trust) who exchanges Old Capital Securities in
                             the Exchange Offer for New Capital Securities and
                            then resells such New Capital Securities will be
                             viewed by the staff no differently than a non-af-
                           filiated purchaser of registered securities who
                             purchases such securities in a registered primary
                           offering of securities and, after completion of
                             such registered offering, may resell the New Cap-
                           ital Securities without further compliance with
                             the registration and prospectus delivery require-
                           ments of the Securities Act, provided that such
                            New Capital Securities are acquired in the ordi-
                          nary course of such holder's business and that
                            such holder is not participating, and has no ar-
                         rangement or understanding with any person to
                            participate, in a distribution (within the mean-
                          ing of the Securities Act) of such New Capital
                            Securities. Any holder of Old Capital Securities
                           who uses the Exchange Offer to participate in a
                            distribution of the New Capital Securities to be
                             acquired in the Exchange Offer, any broker-dealer
                           who receives New Capital Securities in exchange
                          for Old Capital Securities that were purchased
                         directly from the Trust to resell pursuant to
                            Rule 144A or any other available exemption under
                           the Securities Act, any person participating in
                          the distribution of the Old Capital Securities
                          who receives New Capital Securities in the Ex-
                           change Offer and any "affiliate" of the Company
                            or the Trust who receives New Capital Securities
                         in the Exchange Offer (a) will not be able to
                           rely on the interpretations of the staff of the
                            Division of Corporation Finance set forth in the
                             above-described interpretive letters and (b) must
                           comply with the registration and prospectus de-
                             livery requirements of the Securities Act in con-
                           nection with any sale or other transfer of such
                            New Capital Securities, unless such sale is made
                            pursuant to an exemption from such requirements.
                           Any such resale transaction must be made by de-
                         livery of a prospectus containing the selling
                            securityholder information required by the rules
                           of the Commission under the Securities Act. See
                           "The Exchange Offer--Resales of the New Capital
Securities."        

                            Each holder (including any broker-dealer) of Old
                         Capital Securities who wishes to exchange Old
              Capital Securities for New Capital

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                             Securities in the Exchange Offer will be required
                             to represent that (i) it is not an "affiliate" of
                          the Company or the Trust, (ii) any New Capital
                         Securities to be received by it are being ac-
                          quired in the ordinary course of its business,
                             (iii) it has no arrangement or understanding with
                       any person to participate in a distribution
                         (within the meaning of the Securities Act) of
                             such New Capital Securities, and (iv) such holder
                            is not engaged in, and does not intend to engage
                             in, a distribution (within the meaning of the Se-
                             curities Act) of such New Capital Securities. The
                             Letter of Transmittal contains the foregoing rep-
resentations.       

                            A broker-dealer who holds Old Capital Securities
                            for its own account as a result of market-making
                          activities or other trading activities and who
                           receives New Capital Securities in exchange for
                           such Old Capital Securities pursuant to the Ex-
                             change Offer may be deemed to be an "underwriter"
                             within the meaning of the Securities Act and will
                           be required to deliver a prospectus meeting the
                            requirements of the Securities Act in connection
                           with any resale of such New Capital Securities.
                             Based upon the position taken by the staff of the
                             Division of Corporation Finance of the Commission
                          in the interpretive letters referred to above,
                            the Company and the Trust believe that a broker-
                             dealer may participate in the Exchange Offer with
                          respect to Old Capital Securities acquired for
                            its own account as a result of market-making ac-
                             tivities or other trading activities (a "Partici-
                            pating Broker-Dealer"), provided that in connec-
                           tion with any resales of New Capital Securities
                             received in exchange for such Old Capital Securi-
                          ties, such broker-dealer delivers a prospectus
                           meeting the requirements of the Securities Act,
                           which may be the prospectus prepared for an ex-
                             change offer so long as it contains a description
                           of the plan of distribution with respect to the
                             resale of such New Capital Securities. According-
                           ly, the Company and the Trust will require each
                          broker-dealer who tenders, pursuant to the Ex-
                          change Offer, Old Capital Securities that were
                         acquired for its own account as the result of
                             market-making activities or other trading activi-
                           ties to acknowledge that it will deliver a pro-
                           spectus meeting the requirements of the Securi-
                         ties Act in connection with any resale of New
                            Capital Securities received in exchange for such
                           Old Capital Securities pursuant to the Exchange
                         Offer. The Letter of Transmittal contains the
                           foregoing acknowledgement. A Participating Bro-
                          ker-Dealer may fulfill its prospectus delivery
                         requirement in connection with resales of New
                           Capital Securities received in exchange for Old
                         Capital Securities that were acquired by such
                           Participating Broker-Dealer for its own account
                            as a result of market-making activities or other
                          trading activities with this Prospectus, as it
                             may be amended or supplemented from time to time,
                            during the 90-day period referred to below. Sub-
                            ject to certain provisions set forth in the Reg-
                             istration Rights Agreement and to the limitations
                          described under "The Exchange Offer--Resale of
                        New Capital Securities," the Company and the
                             Trust have agreed that this Prospectus, as it may
                             be amended or supplemented from time to time, may
be                  

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                            used by a Participating Broker-Dealer in connec-
                            tion with resales of such New Capital Securities
                            for a period ending 90 days after the Expiration
                          Date or, if earlier, when all such New Capital
                             Securities have been disposed of by such Partici-
                            pating Broker-Dealer. See "Plan of Distribution"
                           and "The Exchange Offer--Resales of New Capital
Securities."        

                            In that regard, each Participating Broker-Dealer
                             who surrenders Old Capital Securities pursuant to
                             the Exchange Offer will be deemed to have agreed,
                            by execution of the Letter of Transmittal or de-
                          livery of an Agent's Message (as defined under
                            "The Exchange Offer--Acceptance for Exchange and
                        Issuance of New Capital Securities") in lieu
                          thereof, that, upon receipt of notice from the
                         Company or the Trust of the occurrence of any
                          event or the discovery of any fact which makes
                             any statement contained or incorporated by refer-
                          ence in this Prospectus untrue in any material
                           respect or which causes this Prospectus to omit
                          to state a material fact necessary in order to
                            make the statements contained or incorporated by
                           reference herein, in light of the circumstances
                            under which they were made, not misleading or of
                            the occurrence of certain other events specified
                           in the Registration Rights Agreement, such Par-
                             ticipating Broker-Dealer will suspend the sale of
                           New Capital Securities (or the New Guarantee or
                             the New Junior Subordinated Debentures, as appli-
                             cable) pursuant to this Prospectus until the Com-
                         pany or the Trust has amended or supplemented
                           this Prospectus to correct such misstatement or
                            omission and has furnished copies of the amended
                            or supplemented Prospectus to such Participating
                         Broker-Dealer or the Company or the Trust has
                             given notice that the sale of the New Capital Se-
                            curities (or the New Guarantee or the New Junior
                          Subordinated Debentures, as applicable) may be
                          resumed, as the case may be. See "The Exchange
                      Offer--Resales of New Capital Securities."

Exchange Agent..............  The Exchange Agent is The Bank of New York. The   
                            addresses and telephone and facsimile numbers of
                             the Exchange Agent are set forth in "The Exchange
                       Offer--Exchange Agent" and in the Letter of
Transmittal.        

Use of Proceeds.............                                                    
                          Neither the Company nor the Trust will receive
                           any cash or other proceeds from the issuance of
                          the New Capital Securities offered hereby. See
                             "Use of Proceeds From the Sale of Old Capital Se-
curities."          

Certain United States                                                           
Federal Income Tax                                                            
Considerations; ERISA                                                         
Considerations.............                                                   
                           Holders of Old Capital Securities should review
                           the information set forth under "Certain United
                         States Federal Income Tax Considerations" and
                         "ERISA Considerations" prior to tendering Old
                     Capital Securities in the Exchange Offer.

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THE CAPITAL SECURITIES

Securities Offered..........  Up to $800,000,000 aggregate Liquidation Amount   
                          of the Trust's 8.205% Capital Securities which
                         have been registered under the Securities Act
                             (Liquidation Amount $1,000 per Capital Security).
                             The New Capital Securities will be issued and the
                        Old Capital Securities were issued under the
                           Trust Agreement. The New Capital Securities and
                            any Old Capital Securities that remain outstand-
                             ing after consummation of the Exchange Offer will
                            constitute a single series of Capital Securities
                            under the Trust Agreement and, accordingly, will
                           vote together as a single class for purposes of
                             determining whether holders of the requisite per-
                             centage in outstanding Liquidation Amount thereof
                           have taken certain actions or exercised certain
                           rights under the Trust Agreement. See "Descrip-
                            tion of Securities--Description of Capital Secu-
                            rities--General." The forms and terms of the New
                             Securities are identical in all material respects
                            to the respective forms and terms of the Old Se-
                             curities, except that (i) the New Securities have
                        been registered under the Securities Act and
                             therefore are not subject to certain restrictions
                         on transfer applicable to the Old Securities,
                            (ii) the New Capital Securities will not provide
                             for any increase in the Distribution rate thereon
                            and (iii) the New Junior Subordinated Debentures
                             will not provide for any increase in the interest
                             rate thereon. Accordingly, as the context may re-
                         quire, unless expressly stated otherwise, (i)
                            "Capital Securities" means the Old Capital Secu-
                          rities and, in the event the Exchange Offer is
                         consummated, the New Capital Securities, (ii)
                          "Junior Subordinated Debentures" means the Old
                            Junior Subordinated Debentures and, in the event
                             the Exchange Offer is consummated, the New Junior
                            Subordinated Debentures, (iii) "Guarantee" means
                            the Old Guarantee and, in the event the Exchange
                            Offer is consummated, the New Guarantee and (iv)
                             "Securities" means the Old Securities and, in the
                            event the Exchange Offer is consummated, the New
                           Securities. See "The Exchange Offer--Purpose of
                            the Exchange Offer," "Description of Securities"
                and "Description of Old Securities."

Distribution Dates..........  January 1 and July 1 of each year, commencing     
July 1, 1997.       

Extension Periods...........  Distributions on Capital Securities will be de-   
                           ferred for the duration of any Extension Period
                           elected by the Company with respect to the pay-
                           ment of interest on the Junior Subordinated De-
                             bentures. No Extension Period will exceed 10 con-
                             secutive semi-annual periods or extend beyond the
                           Stated Maturity or any earlier prepayment date.
                          See "Description of Securities--Description of
                           Junior Subordinated Debentures--Option to Defer
                          Interest Payments" and "Certain Federal Income
                          Tax Consequences--Interest Income and Original
Issue Discount."    

Ranking.....................  The Capital Securities rank on a parity, and pay- 
                         ments thereon will be made pro rata, with the
                            Common Securities except as described under "De-
                           scription of Securities--Description of Capital
Securities          

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                             --Subordination of Common Securities." The Junior
                             Subordinated Debentures rank on a parity with all
                             other junior subordinated debentures which may be
                            issued by the Company with substantially similar
                        subordination terms ("Other Debentures") and
                             which may be issued and sold (if at all) to other
                            trusts to be established by the Company (if any)
                            ("Other Trusts"), and are unsecured and subordi-
                             nate and junior in right of payment to all Senior
                            Indebtedness to the extent and in the manner set
                          forth in the Indenture. Senior Indebtedness of
                           the Company includes existing and future senior
                           debt, senior subordinated debt and subordinated
                         debt of the Company. As of December 31, 1996,
                          there was approximately $735 million of Senior
                             Indebtedness of the Company outstanding. See "De-
                          scription of Securities--Description of Junior
                            Subordinated Debentures." The Guarantee ranks on
                        a parity with all other guarantees (if any),
                           which may be issued by the Company with respect
                           to capital securities (if any), to be issued by
                           Other Trusts ("Other Guarantees") and will con-
                          stitute an unsecured obligation of the Company
                            and will rank subordinate and junior in right of
                            payment to all liabilities of the Company to the
                             extent and in the manner set forth in the Guaran-
                           tee Agreement. See "Description of Securities--
      Description of Guarantee."

Redemption..................  The Capital Securities are subject to mandatory   
                          redemption in whole but not in part (i) at the
                             Stated Maturity upon repayment of the Junior Sub-
                           ordinated Debentures and (ii) contemporaneously
                          with the optional prepayment by the Company of
                           the Junior Subordinated Debentures upon the oc-
                          currence and continuation of a Tax Event or an
                             Investment Company Event, in each case at the ap-
                          plicable Redemption Price. See "Description of
                           Securities--Description of Capital Securities--
Redemption."        

Rating......................  The Capital Securities have not been rated by     
                            Standard & Poor's Ratings Services ("S&P") or by
                            Moody's Investors Services, Inc. ("Moody's"). On
                         February 4, 1997, S&P announced that the pre-
                           ferred stock of the Company was downgraded from
                         "AA-" to "A" and that the Company was removed
                           from CreditWatch (where it had been placed fol-
                             lowing the Company's announcement that it had en-
                          tered into the Merger Agreement with A&A). The
                             preferred stock of the Company is currently rated
"a3" by Moody's.    

Transfer Restrictions.......  The New Capital Securities will be issued, and    
                            may be transferred, only in blocks having a Liq-
                          uidation Amount of not less than $100,000 (100
                            New Capital Securities). See "Description of Se-
                            curities--Description of Capital Securities--Re-
                          strictions on Transfer." Any transfer, sale or
                        other disposition of Capital Securities in a
                          block having a Liquidation Amount of less than
                             $100,000 shall be deemed to be void and of no le-
  gal effect whatsoever.

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Absence of Market for the                                                       
Capital Securities.........  The New Capital Securities will be a new issue of
                           securities for which there currently is no mar-
                             ket. Although the Initial Purchasers have advised
                             the Company and the Trust that they currently in-
                            tend to make a market in the New Capital Securi-
                             ties, the Initial Purchasers are not obligated to
                          do so, and any market-making activity with re-
                             spect to the New Capital Securities may be inter-
                          rupted or discontinued at any time without no-
                             tice. Accordingly, no assurance can be given that
                             an active public or other market will develop for
                             the New Capital Securities or as to the liquidity
                            of or the trading market for the New Capital Se-
                            curities. The Company and the Trust will not ap-
                            ply for listing of the New Capital Securities on
                            any securities exchange or for quotation through
                          the National Association of Securities Dealers
       Automated Quotation System.

For additional information regarding the New Securities, see "Description of
Securities" and "Certain Federal Income Tax Consequences."                      

RISK FACTORS

Holders tendering Old Capital Securities in the Exchange Offer should       
carefully consider the matters set forth under "Risk Factors" beginning on page 
18.                                                                             

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SELECTED FINANCIAL DATA 

AON CORPORATION 
CONSOLIDATED SELECTED HISTORICAL FINANCIAL DATA 

 The following table sets forth selected historical financial data for Aon for
each of the five years in the period ended December 31, 1996. The data for each 
of the five years in the period ended December 31, 1996 have been derived from  
the audited financial statements and the notes thereto, and should be read in   
conjunction with, the audited consolidated financial statements and other       
financial information contained in Aon's Annual Report on Form 10-K for the     
year ended December 31, 1996, incorporated by reference herein. See also        
"Available Information" and "Incorporation of Certain Documents By Reference."  

                                                                [Download Table]

                                         YEAR ENDED DECEMBER 31,                
                                 ---------------------------------------        
                                  1996    1995    1994    1993    1992          
                                 ------- ------- ------- ------- -------        
                                        (MILLIONS EXCEPT PER SHARE DATA)        
                                                                                
INCOME STATEMENT DATA                                                           
Brokerage commissions and fees.  $ 1,919 $ 1,651 $ 1,389 $ 1,190 $   714        
Premiums earned................    1,527   1,427   1,322   1,278   1,275        
Net investment income..........      384     329     257     227     223        
Realized investment gains......        8      13      19      30      24        
Other income...................       50      46      54      46      42        
                                 ------- ------- ------- ------- -------        
  Total revenue................  $ 3,888 $ 3,466 $ 3,041 $ 2,771 $ 2,278        
                                 ======= ======= ======= ======= =======        
Income from continuing opera-                                                   
 tions.........................  $   292 $   304 $   269 $   228 $   134        
Income from discontinued opera-                                                 
 tions.........................       43      99      91      96      72        
                                 ------- ------- ------- ------- -------        
Net income.....................  $   335 $   403 $   360 $   324 $   127        
                                 ======= ======= ======= ======= =======        
BALANCE SHEET DATA                                                              
Total assets...................  $13,723 $19,736 $17,922 $16,279 $14,290        
                                 ======= ======= ======= ======= =======        
Liabilities and Stockholders'                                                   
 Equity                                                                         
 Policy liabilities............  $ 4,360 $ 9,556 $ 9,310 $ 8,776 $ 7,759        
 Notes payable.................      521     554     561     594     556        
 General liabilities...........    5,959   6,902   5,744   4,621   3,871        
                                 ------- ------- ------- ------- -------        
  Total liabilities............   10,840  17,012  15,615  13,991  12,186        
 Redeemable preferred stock....       50      50      50     --      --         
 Stockholders' equity..........    2,833   2,674   2,257   2,288   2,104        
                                 ------- ------- ------- ------- -------        
Total liabilities and                                                           
 stockholders' equity..........  $13,723 $19,736 $17,922 $16,279 $14,290        
                                 ======= ======= ======= ======= =======        
PER SHARE DATA*                                                                 
Income from continuing opera-                                                   
 tions.........................  $  1.65 $  1.71 $  1.52 $  1.27 $  0.83        
Net income.....................     1.91    2.32    2.09    1.87    0.78        
Stockholders' equity...........    16.21    1.52   12.20   12.63   11.65        
Dividends paid on Common Stock.     0.95    0.89    0.84    0.79    0.74        
Market price at year end.......   41.375   33.25  21.375   21.50   24.00        

--------                                                                        

*  Per share data have been restated to reflect the 3 for 2 stock split         
approved by the Company's board of directors on March 21, 1997 payable on 
  May 14, 1997 to stockholders of record as of the close of business on May 1,
1997.                                                                     

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RISK FACTORS  

Holders tendering Old Capital Securities in the Exchange Offer should       
carefully review the information contained elsewhere in this Prospectus and     
should particularly consider the matters set forth below. The forms and terms   
of the New Securities are identical in all material respects to the respective  
forms and terms of the Old Securities, except that (i) the New Securities have  
been registered under the Securities Act and therefore will not be subject to   
certain restrictions on transfer applicable to the Old Securities, (ii) the     
New Capital Securities will not provide for any increase in the Distribution    
rate thereon and (iii) the New Junior Subordinated Debentures will not provide  
for any increase in the interest rate thereon. Accordingly, as the context may  
require, unless expressly stated otherwise, (i) "Capital Securities" means the  
Old Capital Securities and, in the event the Exchange Offer is consummated,     
the New Capital Securities, (ii) "Junior Subordinated Debentures" means the     
Old Junior Subordinated Debentures and, in the event the Exchange Offer is      
consummated, the New Junior Subordinated Debentures, (iii) "Guarantee" means    
the Old Guarantee and, in the event the Exchange Offer is consummated, the New  
Guarantee and (iv) "Securities" means the Old Securities and, in the event the  
Exchange Offer is consummated, the New Securities.                              

RANKING OF OBLIGATIONS UNDER THE GUARANTEE AND THE JUNIOR SUBORDINATED          
DEBENTURES                                                                      

The obligations of the Company under the Junior Subordinated Debentures are 
unsecured and rank subordinate and junior in right of payment to all Senior     
Indebtedness of the Company. The obligations of the Company under the           
Guarantee are unsecured and rank subordinate and junior in right of payment to  
all liabilities of the Company, including obligations under the Junior          
Subordinated Debentures, other than any liabilities which expressly by their    
terms are made pari passu with or subordinate to the obligations of the         
Company under the Guarantee. At December 31, 1996, the aggregate outstanding    
Senior Indebtedness of the Company was approximately $735 million. None of the  
Indenture, the Guarantee or the Trust Agreement places any limitation on the    
amount of secured or unsecured debt, including Senior Indebtedness, that may    
be incurred by the Company. See "Description of Securities--Description of      
Guarantee--Status of the Guarantee" and "Description of Securities--            
Description of Junior Subordinated Debentures--Subordination." Since the        
Company is a holding company, the right of the Company to participate in any    
distribution of assets of any subsidiary upon such subsidiary's liquidation or  
reorganization or otherwise (and thus the ability of holders of Capital         
Securities to benefit indirectly from such distribution) is subject to the      
prior claims of creditors of that subsidiary, except to the extent that the     
Company may itself be a creditor of that subsidiary. Claims on the Company's    
subsidiaries by creditors other than the Company include long-term debt and     
certain other short-term borrowings. Accordingly, the Junior Subordinated       
Debentures and the Company's obligations under the Guarantee will be            
effectively subordinated to all existing and future liabilities of the          
Company's subsidiaries, and holders of Junior Subordinated Debentures and       
claimants under the Guarantee should look only to the assets of the Company     
for payments on the Junior Subordinated Debentures or the Guarantee.            

The ability of the Trust to pay amounts due on the Capital Securities is    
solely dependent upon the Company making payments on the Junior Subordinated    
Debentures as and when required.                                                

OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES                      

So long as no Debenture Event of Default has occurred or is continuing, the 
Company has the right under the Indenture to defer the payment of interest on   
the Junior Subordinated Debentures at any time or from time to time for a       
period not exceeding 10 consecutive semi-annual periods, during which           
Extension Period the Company has the right to make partial payments of          
interest on any Interest Payment Date. No Extension Period may extend beyond    
the Stated Maturity or any earlier prepayment date. As a consequence of any     
such deferral, semi-annual Distributions on the Capital Securities by the       
Trust will be deferred during any Extension Period. Distributions to which      
holders of the Capital Securities are entitled will accumulate additional       
Distributions thereon ("Additional Distributions") at the rate of 8.205% per    
annum, compounded semi-annually from the relevant payment date for such         
Distributions, but not exceeding the interest rate then accruing on the Junior  
Subordinated Debentures.                                                        

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During any such Extension Period, the Company may not, and may not permit   
any subsidiary of the Company to (i) declare or pay any dividends or            
distributions on, or redeem, purchase, acquire or make a liquidation payment    
with respect to, any of the Company's capital stock (which includes common and  
preferred stock) or (ii) make any payment of principal, interest or premium,    
if any, on or repay, repurchase or redeem any debt securities of the Company    
(including Other Debentures) that rank on a parity with or junior to the        
Junior Subordinated Debentures or make any guarantee payments with respect to   
any guarantee by the Company of the debt securities of any subsidiary of the    
Company (including Other Guarantees) if such guarantee ranks on a parity with   
or junior to the Junior Subordinated Debentures (other than (a) dividends or    
distributions in common stock of the Company, (b) any declaration of a          
dividend in connection with the implementation of a stockholders' rights plan,  
or the issuance of capital stock under any such plan, or the redemption or      
repurchase of any such rights pursuant thereto, (c) payments under the          
Guarantee and (d) purchases of common stock related to the issuance of common   
stock or rights under any of the Company's benefit plans for its directors,     
officers, employees, consultants or advisers). Prior to the termination of any  
such Extension Period, the Company may further extend such Extension Period,    
provided that such extension does not cause such Extension Period to exceed 10  
consecutive semi-annual periods or to extend beyond the Stated Maturity or any  
earlier prepayment date. At any time following the termination of any           
Extension Period and the payment of all amounts then due, the Company may       
elect to begin a new Extension Period, subject to the foregoing requirements.   
There is no limitation on the number of times that the Company may elect to     
begin an Extension Period. See "Description of Securities--Description of       
Capital Securities--Distributions" and "Description of Securities--Description  
of Junior Subordinated Debentures--Option to Defer Interest Payments."          

Should an Extension Period occur, a holder of Capital Securities will       
continue to accrue income for United States federal income tax purposes (in     
the form of original issue discount) in respect of its pro rata share of the    
Junior Subordinated Debentures held by the Trust. As a result, a holder of      
Capital Securities will include such income in gross income for United States   
federal income tax purposes in advance of the receipt of cash, 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" and "--Sales or Redemptions of Capital             
Securities."                                                                    

The Company has no present intention of exercising its right to defer       
payments of interest. However, should the Company elect to exercise such right  
in the future, the market price of the Capital Securities is likely to be       
affected. A holder that disposes of any Capital Securities during an Extension  
Period, therefore, might not receive the same return on its investment as a     
holder that continues to hold its Capital Securities. In addition, as a result  
of the existence of the Company's right to defer interest payments, the market  
price of the Capital Securities (which represent undivided beneficial           
interests in the assets of the Trust) may be more volatile than the market      
prices of other securities on which original issue discount accrues that are    
not subject to such deferrals.                                                  

TAX EVENT OR INVESTMENT COMPANY EVENT REDEMPTION                                

Upon the occurrence and continuation of a Tax Event or an Investment Company
Event, the Company has the right to prepay the Junior Subordinated Debentures   
in whole (but not in part) within 90 days of the occurrence of such Tax Event   
or Investment Company Event and therefore cause a mandatory redemption of all   
Capital Securities at the Event Redemption Price. See "Description of           
Securities--Description of Capital Securities--Redemption."                     

A "Tax Event" means the receipt by the Company and the Trust of an opinion  
of counsel experienced in such matters to the effect that, as a result of any   
amendment to, or change (including any announced prospective change) in, the    
laws (or any regulations thereunder) of the United States or any political      
subdivision or taxing authority thereof or therein, or as a result of any       
official administrative pronouncement or judicial decision interpreting or      
applying such laws or regulations, which amendment or change is effective or    
which pronouncement or decision is announced on or after January 13, 1997,      
there is more than an insubstantial risk that (i) the Trust is, or will be      
within 90 days after the date of such opinion, subject to United States         
federal income tax with respect to income received or accrued on the Junior     
Subordinated Debentures, (ii) interest                                          

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payable by the Company on the Junior Subordinated Debentures is not, or within  
90 days after the date of such opinion, will not be, deductible by the          
Company, in whole or in part, for United States federal income tax purposes or  
(iii) the Trust is, or will be within 90 days after the date of such opinion,   
subject to more than a de minimis amount of other taxes, duties, assessments    
or other governmental charges.                                                  

See "--Possible Tax Law Changes Affecting the Capital Securities" for a     
discussion of certain legislative proposals that, if adopted, could give rise   
to a Tax Event, which may permit the Company to cause a redemption of all       
Capital Securities prior to January 1, 2027.                                    

An "Investment Company Event" means the receipt by the Trust of an opinion  
of counsel experienced in such matters to the effect that, as a result of the   
occurrence of a change in law or regulation or change in interpretation or      
application of law or regulation by any legislative body, court, governmental   
agency or regulatory authority (a "Change in 1940 Act Law"), the Trust is or    
will be considered an investment company that is required to be registered      
under the Investment Company Act of 1940, as amended, which Change in 1940 Act  
Law becomes effective on or after January 13, 1997.                             

EXCHANGE OF JUNIOR SUBORDINATED DEBENTURES FOR CAPITAL SECURITIES               

The Company has the right to terminate the Trust at any time and, after     
satisfaction of liabilities to creditors as required by applicable law, cause   
the Junior Subordinated Debentures to be distributed to the holders of the      
Capital Securities in liquidation of the Trust. The exercise of such right is   
subject to the Company having received an opinion of counsel to the effect      
that such distribution will not be a taxable event to holders of Capital        
Securities for United States federal income tax purposes. See "Description of   
Securities--Description of Capital Securities--Liquidation of the Trust and     
Distribution of Junior Subordinated Debentures."                                

RIGHTS UNDER THE GUARANTEE                                                      

The Bank of New York acts as the Guarantee Trustee and will hold the New    
Guarantee for the benefit of the holders of all Capital Securities. The Bank    
of New York also acts as Debenture Trustee for the Junior Subordinated          
Debentures and as Property Trustee under the Trust Agreement and its affiliate  
The Bank of New York (Delaware) acts as Delaware Trustee under the Trust        
Agreement. The Guarantee guarantees to the holders of the Capital Securities    
the following payments, to the extent not paid by or on behalf of the Trust:    
(i) any accumulated and unpaid Distributions required to be paid on the         
Capital Securities, to the extent the Trust has funds on hand available         
therefor at such time, (ii) the applicable Redemption Price with respect to     
Capital Securities called for redemption, to the extent the Trust has funds on  
hand available therefor at such time and (iii) upon a voluntary or involuntary  
termination, dissolution, winding-up or liquidation of the Trust (unless the    
Junior Subordinated Debentures are distributed to holders of the Capital        
Securities), the lesser of (a) the aggregate of the Liquidation Amount and      
accumulated and unpaid Distributions on the Capital Securities to the date of   
payment, to the extent the Trust has funds on hand available therefor at such   
time, and (b) the amount of assets of the Trust remaining available for         
distribution to holders of the Capital Securities in liquidation of the Trust.  

ENFORCEMENT RIGHTS OF HOLDERS OF CAPITAL SECURITIES                             

The holders of not less than a majority in aggregate Liquidation Amount of  
the Capital Securities have the right to direct the time, method and place of   
conducting any proceeding for any remedy available to the Guarantee Trustee in  
respect of the Guarantee or to direct the exercise of any trust or power        
conferred upon the Guarantee Trustee under the Guarantee Agreement. Any holder  
of Capital Securities may institute a legal proceeding directly against the     
Company to enforce its rights under the Guarantee, without first instituting a  
proceeding against the Trust, the Guarantee Trustee or any other person or      
entity. If the Company were to default on its obligation to pay amounts         
payable under the Junior Subordinated Debentures, the Trust would lack funds    
for the payment of Distributions or amounts payable on redemption of the        
Capital Securities or otherwise, and, in such event, holders of the Capital     
Securities would not be able to rely upon the Guarantee for payment of          

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such amounts. Instead, in the event a Debenture Event of Default shall have     
occurred and be continuing and such event is attributable to the failure of     
the Company to pay interest on or principal of the Junior Subordinated          
Debentures on the payment date on which such payment is due and payable, then   
a holder of Capital Securities may institute a suit directly against the        
Company for enforcement of payment to such holder of the principal of or        
interest on such Junior Subordinated Debentures having a principal amount       
equal to the aggregate Liquidation Amount of the Capital Securities of such     
holder (a "Direct Action"). Notwithstanding any payments made to a holder of    
Capital Securities by the Company in connection with a Direct Action, the       
Company shall remain obligated to pay the principal of and interest on the      
Junior Subordinated Debentures, and the Company shall be subrogated to the      
rights of the holder of such Capital Securities with respect to payments on     
the Capital Securities to the extent of any payments made by the Company to     
such holder in any Direct Action. Except as described herein, holders of        
Capital Securities will not be able to exercise directly any other remedy       
available to the holders of the Junior Subordinated Debentures or assert        
directly any other rights in respect of the Junior Subordinated Debentures.     
See "Description of Securities--Description of Junior Subordinated              
Debentures--Enforcement of Certain Rights by Holders of Capital Securities,"    
"Description of Securities--Description of Junior Subordinated Debentures--     
Debenture Events of Default" and "Description of Securities--Description of     
Guarantee." The Trust Agreement provides that each holder of Capital            
Securities by acceptance thereof agrees to the provisions of the Guarantee      
Agreement and the Indenture.                                                    

SUFFICIENCY OF PAYMENTS                                                         

As long as payments of interest and other payments are made when due on the 
Junior Subordinated Debentures, such payments will be sufficient to cover       
Distributions and other payments due on the Capital Securities, primarily       
because (i) the aggregate principal amount of the Junior Subordinated           
Debentures will be equal to the sum of the aggregate Liquidation Amount or      
Redemption Price, as applicable, of the Capital Securities and Common           
Securities; (ii) the interest rate and interest and other payment dates on the  
Junior Subordinated Debentures will match the Distribution rate and             
Distribution and other payment dates for the Trust Securities; (iii) under the  
Expense Agreement, the Company shall pay for all and any costs, expenses and    
liabilities of the Trust except the Trust's obligations to holders of Trust     
Securities under such Trust Securities; and (iv) the Trust Agreement further    
provides that the Trust will not engage in any activity that is not consistent  
with the limited purposes thereof. If and to the extent that the Company does   
not make payments on the Junior Subordinated Debentures or as required by the   
Expense Agreement, the Trust will not pay Distributions or other amounts due    
on the Capital Securities. The Guarantee does not cover payments of             
Distributions when the Trust does not have sufficient funds to pay such         
Distributions.                                                                  

LIMITED VOTING RIGHTS                                                           

Holders of Capital Securities will generally have limited voting rights     
relating only to the modification of the Capital Securities and the exercise    
of the Trust's rights as holder of Junior Subordinated Debentures. Holders of   
Capital Securities will have limited authority to vote to remove or replace     
the Issuer Trustees. The Property Trustee, the Administrative Trustees and the  
Company may amend the Trust Agreement without the consent of holders of         
Capital Securities to ensure that the Trust will be classified for United       
States federal income tax purposes as a grantor trust provided that such        
action does not adversely affect the interests of such holders. See             
"Description of Securities--Description of Capital Securities--Voting Rights;   
Amendment of the Trust Agreement" and "Description of Securities--Description   
of Capital Securities--Removal of Issuer Trustees; Appointment of Successors."  

CONSEQUENCES OF A FAILURE TO EXCHANGE OLD CAPITAL SECURITIES                    

The Old Capital Securities have not been registered under the Securities Act
or any state securities laws and therefore may not be offered, sold or          
otherwise transferred except in compliance with the registration requirements   
of the Securities Act and any other applicable securities laws, or pursuant to  
an exemption therefrom or in a transaction not subject thereto, and in each     
case in compliance with certain other conditions                                

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and restrictions. Old Capital Securities which remain outstanding after         
consummation of the Exchange Offer will continue to bear a legend reflecting    
such restrictions on transfer. In addition, upon consummation of the Exchange   
Offer, holders of Old Capital Securities which remain outstanding will not be   
entitled to any rights to have such Old Capital Securities registered under     
the Securities Act or to any similar rights under the Registration Rights       
Agreement (subject to certain limited exceptions). The Company and the Trust    
do not intend to register under the Securities Act any Old Capital Securities   
which remain outstanding after consummation of the Exchange Offer (subject to   
such limited exceptions, if applicable).                                        

To the extent that Old Capital Securities are tendered and accepted in the  
Exchange Offer, a holder's ability to sell untendered Old Capital Securities    
could be adversely affected. In addition, although the Old Capital Securities   
have been designated for trading in the Private Offerings, Resale and Trading   
through Automatic Linkages ("PORTAL") market, to the extent that Old Capital    
Securities are tendered and accepted in connection with the Exchange Offer,     
any trading market for Old Capital Securities which remain outstanding after    
the Exchange Offer could be adversely affected.                                 

The New Capital Securities and any Old Capital Securities which remain      
outstanding after consummation of the Exchange Offer will constitute a single   
series of Capital Securities under the Trust Agreement and, accordingly, will   
vote together as a single class for purposes of determining whether holders of  
the requisite percentage in outstanding Liquidation Amount thereof have taken   
certain actions or exercised certain rights under the Trust Agreement.          

The Old Capital Securities provide that, if the Exchange Offer is not       
consummated by August 11, 1997, the Distribution rate borne by the Old Capital  
Securities will increase by 0.25% per annum commencing on August 12, 1997,      
until the Exchange Offer is consummated. See "Description of Old Capital        
Securities." Following consummation of the Exchange Offer, neither the Old      
Capital Securities nor the New Capital Securities will be entitled to any       
increase in the Distribution rate thereon.                                      

ABSENCE OF PUBLIC MARKET                                                        

The Old Capital Securities were issued to, and the Company believes are     
currently owned by, a relatively small number of beneficial owners. The Old     
Capital Securities have not been registered under the Securities Act and will   
continue to be subject to restrictions on transferability to the extent that    
they are not exchanged for New Capital Securities. Although the New Capital     
Securities will generally be permitted to be resold or otherwise transferred    
by the holders (who are not affiliates of the Company or the Trust) without     
compliance with the registration requirements under the Securities Act, they    
will constitute a new issue of securities with no established trading market.   
Capital Securities may be transferred by the holders thereof only in blocks     
having a Liquidation Amount of not less than $100,000 (100 Capital              
Securities). The Company and the Trust have been advised by the Initial         
Purchasers that the Initial Purchasers currently intend to make a market in     
the New Capital Securities. However, the Initial Purchasers are not obligated   
to do so and any market-making activity with respect to the New Capital         
Securities may be interrupted or discontinued at any time without notice. In    
addition, such market-making activity will be subject to the limits imposed by  
the Securities Act and the Exchange Act and may be limited during the Exchange  
Offer. Accordingly, no assurance can be given that an active public or other    
market will develop for the New Capital Securities or the Old Capital           
Securities or as to the liquidity of or the trading market for the New Capital  
Securities or the Old Capital Securities. If an active public market does not   
develop, the market price and liquidity of the New Capital Securities may be    
adversely affected.                                                             

If a public trading market develops for the New Capital Securities, future  
trading prices of such securities will depend on many factors, including,       
among other things, prevailing interest rates, results of operations and the    
market for similar securities. Depending on prevailing interest rates, the      
market for similar securities and other factors, including the financial        
condition of the Company, the New Capital Securities may trade at a discount.   

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Notwithstanding the registration of the New Capital Securities in the       
Exchange Offer, holders who are "affiliates" (as defined under Rule 405 of the  
Securities Act) of the Company or the Trust may publicly offer for sale or      
resell the New Capital Securities only in compliance with the provisions of     
Rule 144 under the Securities Act.                                              

Each broker-dealer that receives New Capital Securities for its own account 
in exchange for Old Capital Securities, where such Old Capital Securities were  
acquired by such broker-dealer as a result of market-making activities or       
other trading activities, must acknowledge that it will deliver a prospectus    
in connection with any resale of such New Capital Securities. See "Plan of      
Distribution."                                                                  

EXCHANGE OFFER PROCEDURES                                                       

Subject to the conditions set forth under "The Exchange Offer--Conditions to
the Exchange Offer," delivery of New Capital Securities in exchange for Old     
Capital Securities tendered and accepted for exchange pursuant to the Exchange  
Offer will be made only after timely receipt by the Exchange Agent of (i)       
certificates for Old Capital Securities or a book-entry confirmation of a       
book-entry transfer of Old Capital Securities into the Exchange Agent's         
account at DTC, including an Agent's Message (as defined under "The Exchange    
Offer--Acceptance for Exchange and Issuance of New Capital Securities") if the  
tendering holder does not deliver a Letter of Transmittal, (ii) a completed     
and signed Letter of Transmittal (or facsimile thereof), with any required      
signature guarantees, or, in the case of a book-entry transfer, an Agent's      
Message in lieu of the Letter of Transmittal, and (iii) any other documents     
required by the Letter of Transmittal. Therefore, holders of Old Capital        
Securities desiring to tender such Old Capital Securities in exchange for New   
Capital Securities should allow sufficient time to ensure timely delivery.      
Neither the Company nor the Trust is under a duty to give notification of       
defects or irregularities with respect to the tenders of Old Capital            
Securities for exchange.                                                        

POSSIBLE TAX LAW CHANGES AFFECTING THE CAPITAL SECURITIES                       

On February 6, 1997, President Clinton's budget proposal for fiscal year    
1998 was released. Included in the budget proposal is a provision which, if     
enacted, would generally treat instruments such as the Junior Subordinated      
Debentures as equity for United States federal income tax purposes if the       
instruments (i) have a maximum term of more than 15 years and (ii) are not      
shown as indebtedness on the separate balance sheet of the issuer. The          
provision is proposed to be effective generally for instruments issued on or    
after the date of first committee action by Congress. As of the date hereof,    
no such action has been taken. If the provision applied to the Junior           
Subordinated Debentures, among other things, the Company would be unable to     
deduct interest on the Junior Subordinated Debentures for United States         
federal income tax purposes. A similar provision was included in President      
Clinton's budget proposal for fiscal year 1997, but the 104th Congress          
adjourned without taking action on such provision. There can be no assurance    
that the current budget provision or future legislative proposals, future       
regulations or official administrative pronouncements or future judicial        
decisions will not affect the ability of the Company to deduct interest on the  
Junior Subordinated Debentures. Such a change could give rise to a Tax Event,   
which may permit the Company to cause a redemption of the Capital Securities.   
See "Description of Securities--Description of Capital Securities--Redemption"  
and "Certain Federal Income Tax Consequences--Possible Tax Law Changes."        

USE OF PROCEEDS FROM THE SALE OF THE OLD CAPITAL SECURITIES 

Neither the Company nor the Trust will receive any cash or other proceeds   
from the issuance of the New Capital Securities offered hereby. In              
consideration for issuing the New Capital Securities in exchange for Old        
Capital Securities as described in this Prospectus, the Trust will receive Old  
Capital Securities in like Liquidation Amount. The Old Capital Securities       
surrendered in exchange for the New Capital Securities will be retired and      
cancelled.                                                                      

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The proceeds to the Trust from the offering of the Old Capital Securities   
was approximately $800,000,000. All of the proceeds from the sale of Old        
Capital Securities were invested by the Trust in Old Junior Subordinated        
Debentures. The net proceeds from the sale of the Old Junior Subordinated       
Debentures were used by the Company to finance, in part, the acquisition of     
Common Stock of A&A and the purchase by the Company of the Series B Preferred   
Stock. See "Acquisition of Alexander & Alexander." The Company paid or          
reimbursed the Trust for the expenses associated with the offering of the Old   
Capital Securities and the compensation to the Initial Purchasers.              

AON CAPITAL A 

Aon Capital A is a statutory business trust, created under Delaware law     
pursuant to the filing of a certificate of trust with the Delaware Secretary    
of State, which is governed by the Trust Agreement. The Trust exists for the    
exclusive purposes of (i) issuing and selling the Trust Securities, (ii) using  
the proceeds from the sale of Common Securities and the Old Capital Securities  
to acquire the Old Junior Subordinated Debentures, (iii) exchanging the Old     
Junior Subordinated Debentures for New Junior Subordinated Debentures in the    
Exchange Offer pursuant to the Indenture and (iv) engaging in only those other  
activities necessary, convenient or incidental thereto (such as registering     
the transfer of Capital Securities). Accordingly, the Junior Subordinated       
Debentures will be the sole assets of the Trust and payments by the Company     
under the Junior Subordinated Debentures and the Expense Agreement will be the  
sole revenues of the Trust. All of the Common Securities are owned by the       
Company. The Common Securities rank on a parity, and payments are made thereon  
pro rata, with the Capital Securities except that upon the occurrence and       
continuance of an event of default under the Trust Agreement resulting from a   
Debenture Event of Default, the rights of the Company as holder of the Common   
Securities to payment in respect of Distributions and payments upon             
liquidation, redemption or otherwise will be subordinated to the rights of the  
holders of the Capital Securities. See "Description of Securities--Description  
of Capital Securities--Subordination of Common Securities." The Company owns    
Common Securities in an aggregate liquidation amount equal to 3% of the         
outstanding Capital Securities.                                                 

The Trust has a term of approximately 31 years, but may terminate earlier as
provided in the Trust Agreement. The Trust's business and affairs are           
conducted by its trustees, each appointed by the Company as holder of the       
Common Securities. Under the Trust Agreement, the trustees for the Trust are    
The Bank of New York, as the Property Trustee, The Bank of New York             
(Delaware), as the Delaware Trustee, and three individual Administrative        
Trustees who are employees or officers of or affiliated with the Company        
(collectively, the "Issuer Trustees"). The Bank of New York also acts as        
trustee under the Indenture and the Old Guarantee Agreement and will act as     
trustee under the New Guarantee Agreement. See "Description of Securities--     
Description of Guarantee" and "Description of Securities--Description of        
Junior Subordinated Debentures." The duties and obligations of each Issuer      
Trustee are governed by the Trust Agreement. The Company will pay all fees and  
expenses related to the Trust, the offering of the Old Capital Securities and   
this Exchange Offer and will pay, directly or indirectly, all ongoing costs,    
expenses and liabilities of the Trust.                                          

Pursuant to the Expense Agreement, the Company has irrevocably and          
unconditionally guaranteed to each person or entity to whom the Trust becomes   
indebted or liable, the full payment of any costs, expenses or liabilities of   
the Trust, other than obligations of the Trust to pay to the holders of any     
Capital Securities or other similar interests in the Trust of the amounts due   
such holders pursuant to the terms of the Capital Securities or such other      
similar interests, as the case may be.                                          

The principal executive office of the Trust is c/o Aon Corporation, 123 N.  
Wacker Drive, Chicago, Illinois 60606-1700, and its telephone number is (312)   
701-3000.                                                                       

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AON CORPORATION 

The Company is an insurance services holding company that comprises a family
of insurance brokerage, consulting and consumer insurance companies. Through    
its insurance brokerage operations, the Company offers commercial insurance     
brokerage, alternative risk solutions, risk management, employee benefit and    
human resources consulting and managing general underwriting services. In       
addition, the Company's insurance underwriting businesses provide a variety of  
insurance products, including accident and health coverage, traditional life    
insurance, extended warranties and credit insurance. The Company's revenues     
were $3.5 billion in 1995 and $3.9 billion in 1996. Based on 1995 insurance     
brokerage and consulting revenues and without giving effect to the acquisition  
of A&A, management believes that the Company is the second largest insurance    
brokerage company in the world.                                                 

The principal executive offices of the Company are located at 123 N. Wacker 
Drive, Chicago, Illinois 60606-1700, and its telephone number is (312) 701-     
3000.                                                                           

ACQUISITION OF ALEXANDER & ALEXANDER  

On January 15, 1997, Purchaser, a wholly owned subsidiary of the Company,   
consummated the Offer for all the outstanding Shares of A&A at a price of       
$17.50 net cash per Share. Pursuant to the Offer, Purchaser acquired            
approximately 44,293,552 Shares, or 97% of the outstanding Shares. All Shares   
validly tendered and not withdrawn before expiration of the Offer at 12:00      
midnight, New York City time, on January 14, 1997, were accepted for payment,   
including approximately 1,846,882 Shares tendered pursuant to guaranteed        
delivery procedures. The Offer was made pursuant to the Merger Agreement among  
the Company, Purchaser and A&A. On February 20, 1997, the stockholders of A&A   
approved the Merger of Purchaser into A&A, and the Merger was effected          
promptly thereafter. Pursuant to the Merger, all remaining Shares (other than   
stock of A&A owned by A&A, the Company or any of their respective               
subsidiaries) were converted into the right to receive $17.50 cash per Share.   

On December 11, 1996, the Company and AIG entered into the Stock Purchase   
and Sale Agreement. Pursuant to the Stock Purchase and Sale Agreement, the      
Company agreed to buy and AIG agreed to sell for $317.5 million, plus accrued   
dividends, all outstanding shares of 8% Series B Preferred Stock, par value     
$1.00 of A&A. On January 17, 1997, the Company purchased all 4,846,232 shares   
of Series B Preferred Stock. Each share of Series B Preferred Stock is          
currently convertible into approximately 2.94 shares of Class D Common Stock,   
which Class D Common Stock is exchangeable for Common Stock on a share-for-     
share basis.                                                                    

Purchaser's payment of approximately $775 million for the aggregate purchase
price of the Shares purchased by Purchaser in the Offer was funded with         
capital contributions to Purchaser by the Company. The Company derived the      
funds necessary for such capital contribution and the funds necessary to        
purchase the Series B Preferred Stock from cash on hand, the proceeds from the  
sale of commercial paper and fixed maturities and the proceeds of the sale of   
the Old Capital Securities. See "Pro Forma Consolidated Financial               
Information."                                                                   

A&A is an insurance holding company which, through its subsidiaries,        
provides professional risk management consulting, insurance brokerage and       
human resource management consulting on a global basis. A&A's revenues were     
$1.3 billion in 1995 and $1.0 billion for the nine-month period ended           
September 30, 1996. Based on 1995 revenues, management of the Company believes  
that A&A is the fourth largest brokerage company in the world. Since 1994, A&A  
has engaged in a significant restructuring of its operations and, for the nine  
months ended September 30, 1996, A&A reported net income of $47.7 million, a    
41.7% decrease from its net income of $81.9 million for the same period in the  
previous year.                                                                  

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PRO FORMA CONSOLIDATED FINANCIAL INFORMATION  

The following unaudited pro forma consolidated financial information for the
Company is based on historical financial statements of the Company and of A&A.  
The audited consolidated financial statements of the Company for the year       
ended December 31, 1995 are contained in the Company's Annual Report on Form    
10-K for the year ended December 31, 1996, incorporated by reference herein,    
and the unaudited consolidated financial statements of the Company for the      
nine months ended September 30, 1996 are contained in the Company's Quarterly   
Report on Form 10-Q for the quarter ended September 30, 1996, which has been    
filed with the Commission. The historical financial statements of A&A are       
contained in the Company's Current Report on Form 8-K dated January 15, 1997,   
incorporated by reference herein. The unaudited pro forma condensed             
consolidated statement of financial position at September 30, 1996 has been     
prepared as if the acquisition of A&A and the issuance of the Capital           
Securities and other financing had been consummated on September 30, 1996, and  
the unaudited pro forma condensed consolidated statements of income for the     
year ended December 31, 1995 and the nine months ended September 30, 1996 have  
been prepared as if the acquisition of A&A and the issuance of the Capital      
Securities and other financing had been consummated on January 1, 1995.         
Unaudited pro forma financial data do not purport to be indicative of either    
the future results of operations or the results of operations that would have   
occurred if these transactions had been consummated on the indicated dates.     
The pro forma adjustments are based upon available information and certain      
assumptions that the Company believes to be reasonable.                         

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AON CORPORATION 

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS OF SEPTEMBER 30, 1996
(IN MILLIONS) 

                                                                [Download Table]

                                  HISTORICAL                                     
                             ---------------------                               
                                         ALEXANDER                               
                                 AON         &       PRO FORMA       PRO FORMA   
                             CORPORATION ALEXANDER  ADJUSTMENTS   CONSOLIDATED(1)
                             ----------- ---------  -----------   ---------------
                                                                                 
ASSETS                                                                           
  Fixed maturities avail-                                                        
   able for sale...........   $ 2,707.4  $    --      $(200.0)(1)    $ 2,507.4   
  Equity securities........       821.3       --          --             821.3   
  Short-term investments...     1,174.2     286.1         --           1,460.3   
  Other investments........       219.6      21.4         --             241.0   
  Cash.....................       226.4     758.2      (100.0)(1)        884.6   
  Brokerage and other re-                                                        
   ceivables...............     3,920.2   1,200.7         --           5,120.9   
  Intangible assets includ-                                                      
   ing goodwill............     1,393.4     221.2       850.5 (2)      2,465.1   
  Assets held under special                                                      
   contracts...............       305.9       --          --             305.9   
  Other assets.............     1,458.6     434.4         --           1,893.0   
                              ---------  --------     -------        ---------   
      Total Assets.........   $12,227.0  $2,922.0     $ 550.5        $15,699.5   
                              =========  ========     =======        =========   
LIABILITIES AND STOCKHOLD-                                                       
 ERS' EQUITY                                                                     
  Total policy liabilities.   $ 3,795.2  $    --      $   --         $ 3,795.2   
  Insurance premiums pay-                                                        
   able....................     3,394.1   1,775.9         --           5,170.0   
  Short term borrowings....        59.6      21.5       153.0 (1)        234.1   
  Notes payable and debt                                                         
   guarantee of employee                                                         
   stock ownership plan....       522.9     142.4         --             665.3   
  Liabilities held under                                                         
   special contracts.......       305.9       --          --             305.9   
  Other liabilities........     1,381.2     519.7        60.0 (2)      1,960.9   
                              ---------  --------     -------        ---------   
      Total Liabilities....     9,458.9   2,459.5       213.0         12,131.4   
                              ---------  --------     -------        ---------   
Redeemable Preferred Stock.        50.0       --          --              50.0   
Company-obligated                                                                
 Mandatorily Redeemable                                                          
 Preferred Capital Securi-                                                       
 ties of Subsidiary Trust                                                        
 holding solely the                                                              
 Company's Securities (3)..         --        --        800.0 (1)        800.0   
STOCKHOLDERS' EQUITY                                                             
  Preferred stock                                                                
    8% cumulative perpetual                                                      
     preferred stock.......         5.5       --          --               5.5   
    6.25% cumulative                                                             
     convertible                                                                 
     exchangeable preferred                                                      
     stock.................         2.1       --          --               2.1   
    Series A Preferred                                                           
     Stock.................         --        2.3        (2.3)(4)          --    
    Series B Preferred                                                           
     Stock.................         --        4.8        (4.8)(5)          --    
  Common stock.............       111.5      43.4       (43.4)           111.5   
  Paid-in additional capi-                                                       
   tal.....................       454.1     666.7      (666.7)           454.1   
  Retained earnings and                                                          
   other less treasury                                                           
   stock...................     2,144.9    (254.7)      254.7          2,144.9   
                              ---------  --------     -------        ---------   
      Total Stockholders'                                                        
       Equity..............     2,718.1     462.5      (462.5)(2)      2,718.1   
                              ---------  --------     -------        ---------   
      Total Liabilities and                                                      
       Stockholders' Equi-                                                       
       ty..................   $12,227.0  $2,922.0     $ 550.5        $15,699.5   
                              =========  ========     =======        =========   

See accompanying notes. 

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AON CORPORATION 

NOTES TO THE PRO FORMA CONDENSED CONSOLIDATED 
STATEMENT OF FINANCIAL POSITION 

AS OF SEPTEMBER 30, 1996  

1. Reflects the acquisition of A&A at a price of $1,253 million and funding 
sources for the acquisition as follows (in millions):                           

                                                                [Download Table]
                                                                         
Sale of fixed maturities........................................ $  200.0
Issuance of commercial paper....................................    153.0
Issuance of Capital Securities..................................    800.0
A&A cash used to finance transaction............................    100.0
                                                                 --------
  Purchase Price................................................ $1,253.0
                                                                 ========

The effect of Aon's acquisition of the Bain Hogg Group plc ("Bain Hogg") on 
October 18, 1996 is not included. The purchase price was $260 million. Bain     
Hogg's total assets as of September 30, 1996 were approximately $1.0 billion.   

2. Assumes that Aon's purchase price allocation resulted in additional      
goodwill of $850.5 million which was calculated as follows (in millions):       

                                                                [Download Table]
                                                                          
Purchase price.................................................. $1,253.0 
A&A stockholders' equity........................................   (462.5)
Purchase related liabilities net of tax.........................     60.0 
                                                                 -------- 
Goodwill........................................................ $  850.5 
                                                                 ======== 

3. The sole asset of the Trust Subsidiary is $824,000,000 principal amount  
of the Company's 8.205% Junior Subordinated Deferrable Interest Debentures due  
January 1, 2027.                                                                

4. Assumes that all of the Series A Preferred Stock was converted to cash at
a cost of $121 million to Aon.                                                  

5. Reflects the purchase by Aon of all of the Series B Preferred Stock for  
$318 million.                                                                   

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AON CORPORATION 

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME

YEAR ENDED DECEMBER 31, 1995
(MILLIONS EXCEPT PER SHARE DATA)

                                                                [Download Table]

                               HISTORICAL                                          
                          ------------------------                                 
                                         ALEXANDER                                 
                              AON            &         PRO FORMA       PRO FORMA   
                          CORPORATION    ALEXANDER    ADJUSTMENTS   CONSOLIDATED(1)
                          -----------    ---------    -----------   ---------------
                                                                                   
REVENUE                                                                            
  Brokerage commissions                                                            
   and fees.............   $1,651.3(2)   $1,219.5       $  --          $2,870.8    
  Premiums earned.......    1,426.5           --           --           1,426.5    
  Net investment income.      329.4          82.1        (20.3)(3)        391.2    
  Realized investment                                                              
   gains................       13.1           --           --              13.1    
  Other income..........       45.4(2)       32.7          --              78.1    
                           --------      --------       ------         --------    
    Total Revenue.......    3,465.7       1,334.3        (20.3)         4,779.7    
                           --------      --------       ------         --------    
BENEFITS AND EXPENSES                                                              
  Commissions and gen-                                                             
   eral expenses........    1,982.3       1,147.4          --           3,129.7    
  Benefits to policy-                                                              
   holders..............      698.5           --           --             698.5    
  Interest expense......       37.3          18.6          8.2 (4)         64.1    
  Amortization of de-                                                              
   ferred policy acqui-                                                            
   sition costs.........      207.5           --           --             207.5    
  Amortization of intan-                                                           
   gible assets.........       82.1          12.3         34.1 (5)        128.5    
                           --------      --------       ------         --------    
    Total Benefits and                                                             
     Expenses...........    3,007.7       1,178.3         42.3          4,228.3    
                           --------      --------       ------         --------    
INCOME FROM CONTINUING                                                             
 OPERATIONS BEFORE IN-                                                             
 COME TAX AND MINORITY                                                             
 INTEREST...............      458.0         156.0        (62.6)           551.4    
  Provision for income                                                             
   tax (benefit)........      154.3          60.9        (10.6)(6)        204.6    
                           --------      --------       ------         --------    
INCOME FROM CONTINUING                                                             
 OPERATIONS BEFORE MI-                                                             
 NORITY INTEREST........      303.7          95.1        (52.0)           346.8    
Minority interest, in-                                                             
 cluding subsidiary dis-                                                           
 tributions.............        --           (5.7)       (41.3)(7)        (47.0)   
                           --------      --------       ------         --------    
INCOME FROM CONTINUING                                                             
OPERATIONS..............      303.7          89.4(8)     (93.3)           299.8    
Preferred stock divi-                                                              
 dends..................      (24.7)        (25.4)        25.4 (9)        (24.7)   
                           --------      --------       ------         --------    
INCOME FROM CONTINUING                                                             
 OPERATIONS ATTRIBUTABLE                                                           
 TO COMMON STOCKHOLDERS.   $  279.0      $   64.0       $(67.9)        $  275.1    
                           ========      ========       ======         ========    
Income from continuing                                                             
 operations per share                                                              
 attributable to common                                                            
 stockholders...........   $   1.71(10)                                $   1.69(10)
Average common and com-                                                            
 mon equivalent shares                                                             
 outstanding............      163.1(10)                                   163.1(10)

See accompanying notes. 

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AON CORPORATION 

NOTES TO THE PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME 

YEAR ENDED DECEMBER 31, 1995  

1. Reflects the acquisition of A&A at a price of $1,253 million and funding 
sources for the acquisition as follows (in millions):                           

                                                                [Download Table]
                                                                         
Sale of fixed maturities........................................ $  200.0
Issuance of commercial paper....................................    153.0
Issuance of Capital Securities..................................    800.0
A&A cash used to finance transaction............................    100.0
                                                                 --------
Purchase Price.................................................. $1,253.0
                                                                 ========

The effect of Aon's acquisition of Bain Hogg on October 18, 1996 is not     
included. The purchase price was $260 million. Bain Hogg's revenue and pretax   
income for the year ended December 31, 1995 were $333 million and $33 million,  
respectively.                                                                   

The unaudited pro forma condensed consolidated statement of income does not 
include the potential effect of one-time restructuring charges which            
management of Aon expects to be incurred in the next twelve months in the       
range of $100 to $150 million related to the A&A and Bain Hogg acquisitions.    
This statement also does not include any anticipated cost savings that may be   
realized as a result of the restructuring. Management of Aon estimates cost     
savings related to the A&A and Bain Hogg acquisitions should be in excess of    
$100 million annually.                                                          

2. Certain historical amounts have been reclassified to conform to the      
presentation for the nine months ended September 30, 1996.                      

3. Reflects foregone investment income on cash of $100 million at an assumed
rate of 5.35% held by A&A and on fixed maturities of $200 million at an         
assumed rate of 7.5% held by Aon.                                               

4. Reflects interest expense on $153 million of commercial paper at an      
assumed rate of 5.35%.                                                          

5. Assumes Aon amortizes intangible assets over a 25 year period.           

6. Assumes an effective tax rate of 37% on the pro forma adjustments        
excluding amortization of intangible assets.                                    

7. Reflects Distributions on the Capital Securities of $65.6 million net of 
a tax benefit of $24.3 million.                                                 

8. Includes non-recurring revenues of $30.4 million ($20.1 million after    
tax) related to A&A's sale of certain operations and non-recurring              
restructuring and special charges of $17.6 million.                             

9. Reflects elimination of the dividends on the Series A Preferred Stock and
the Series B Preferred Stock.                                                   

10. Per share and average shares outstanding data have been restated to     
reflect the 3 for 2 stock split approved by the Company's board of directors    
on March 21, 1997 payable on May 14, 1997 to stockholders of record as of the   
close of business on May 1, 1997.                                               

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AON CORPORATION 

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME

NINE MONTHS ENDED SEPTEMBER 30, 1996
(MILLIONS EXCEPT PER SHARE DATA)

                                                                [Download Table]

                               HISTORICAL                                      
                          -----------------------                              
                                        ALEXANDER                              
                              AON           &      PRO FORMA       PRO FORMA   
                          CORPORATION   ALEXANDER ADJUSTMENTS   CONSOLIDATED(1)
                          -----------   --------- -----------   ---------------
                                                                               
REVENUE                                                                        
  Brokerage commissions                                                        
   and fees.............   $1,368.0      $920.6     $  --          $2,288.6    
  Premiums earned.......    1,141.4         --         --           1,141.4    
  Net investment income.      269.7        57.4      (15.2)(2)        311.9    
  Realized investment                                                          
   income...............        3.1         --         --               3.1    
  Other income..........       36.6         0.6        --              37.2    
                           --------      ------     ------         --------    
    Total Revenue.......    2,818.8       978.6      (15.2)         3,782.2    
                           --------      ------     ------         --------    
BENEFITS AND EXPENSES                                                          
  Commissions and gen-                                                         
   eral expenses........    1,621.4       867.4        --           2,488.8    
  Benefits to policy-                                                          
   holders..............      582.1         --         --             582.1    
  Interest expense......       28.4        11.8        6.1 (3)         46.3    
  Amortization of de-                                                          
   ferred policy acqui-                                                        
   sition costs.........      156.4         --         --             156.4    
  Amortization of intan-                                                       
   gible assets.........       55.6        11.7       25.5 (4)         92.8    
                           --------      ------     ------         --------    
    Total Benefits and                                                         
     Expenses...........    2,443.9       890.9       31.6          3,366.4    
                           --------      ------     ------         --------    
INCOME FROM CONTINUING                                                         
 OPERATIONS BEFORE                                                             
 INCOME TAX AND MINORITY                                                       
 INTEREST...............      374.9        87.7      (46.8)           415.8    
  Provision for income                                                         
   tax (benefit)........      129.3        35.0       (7.9)(5)        156.4    
                           --------      ------     ------         --------    
INCOME FROM CONTINUING                                                         
 OPERATIONS BEFORE MI-                                                         
 NORITY INTEREST........      245.6        52.7      (38.9)           259.4    
Minority interest, in-                                                         
 cluding subsidiary dis-                                                       
 tributions.............        --         (5.0)     (31.0)(6)        (36.0)   
                           --------      ------     ------         --------    
INCOME FROM CONTINUING                                                         
 OPERATIONS.............      245.6        47.7      (69.9)           223.4    
Preferred stock divi-                                                          
 dends..................      (15.2)      (19.9)      19.9 (7)        (15.2)   
                           --------      ------     ------         --------    
INCOME FROM CONTINUING                                                         
 OPERATIONS ATTRIBUTABLE                                                       
 TO COMMON STOCKHOLDERS.   $  230.4      $ 27.8     $(50.0)        $  208.2    
                           ========      ======     ======         ========    
Income from continuing                                                         
 operations per share                                                          
 attributable to common                                                        
 stockholders...........   $   1.41(8)                             $   1.27(8) 
Average common and                                                             
 common equivalent                                                             
 shares outstanding.....      164.6(8)                                164.6(8) 

See accompanying notes. 

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AON CORPORATION 

NOTES TO THE PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME 

NINE MONTHS ENDED SEPTEMBER 30, 1996  

1. Reflects the acquisition of A&A at a price of $1,253 million and funding 
sources for the acquisition as follows (in millions):                           

                                                                [Download Table]
                                                                         
Sale of fixed maturities........................................ $  200.0
Issuance of commercial paper....................................    153.0
Issuance of Capital Securities..................................    800.0
A&A cash used to finance transaction............................    100.0
                                                                 --------
  Purchase Price................................................ $1,253.0
                                                                 ========

The effect of Aon's acquisition of Bain Hogg on October 18, 1996 is not     
included. The purchase price was $260 million. Bain Hogg's revenue and pretax   
income for the nine months ended September 30, 1996 were $245 million and $16   
million, respectively.                                                          

The unaudited pro forma condensed consolidated statement of income does not 
include the potential effect of one-time restructuring charges which            
management of Aon expects to be incurred in the next twelve months in the       
range of $100 to $150 million related to the A&A and Bain Hogg acquisitions.    
This statement also does not include any anticipated cost savings that may be   
realized as a result of restructuring. Management of Aon estimates cost         
savings related to the A&A and Bain Hogg acquisitions should be in excess of    
$100 million annually.                                                          

2. Reflects foregone investment income on cash of $100 million held by A&A  
at an assumed rate of 5.35% and on fixed maturities of $200 million held by     
Aon at an assumed rate of 7.5%.                                                 

3. Reflects interest expense on $153 million of commercial paper at an      
assumed rate of 5.35%.                                                          

4. Assumes that Aon amortizes intangible assets over a 25 year period.      

5. Assumes an effective tax rate of 37% on the pro forma adjustments        
excluding amortization of intangible assets.                                    

6. Reflects Distributions on the Capital Securities of $49.2 million net of 
a tax benefit of $18.2 million.                                                 

7. Reflects elimination of the dividends on the Series A Preferred Stock and
the Series B Preferred Stock.                                                   

8. Per share and average shares outstanding data have been restated to      
reflect the 3 for 2 stock split approved by the Company's board of directors    
on March 21, 1997 payable on May 14, 1997 to stockholders of record as of the   
close of business on May 1, 1997.                                               

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RATIOS OF EARNINGS TO FIXED CHARGES 

The following table sets forth Aon's historical ratios of Earnings to Fixed 
Charges for the periods indicated.                                              

                                                                [Download Table]

                                                        YEAR ENDED DECEMBER 31, 
                                                        ------------------------
                                                        1996 1995 1994 1993 1992
                                                        ---- ---- ---- ---- ----
                                                                                
Ratios of Earnings to Fixed Charges.................... 6.7  6.6  5.9  5.4  3.6 

The following table sets forth Aon's pro forma ratios of Earnings to Fixed  
Charges for the periods indicated.                                              

                                                                [Download Table]

                                                      NINE MONTHS              
                                                         ENDED      YEAR ENDED 
                                                     SEPTEMBER 30, DECEMBER 31,
                                                         1996          1995    
                                                     ------------- ------------
                                                                               
Pro Forma Ratios of Earnings to Fixed Charges (1)...      4.1          3.7     
Supplemental Pro Forma Ratios of Earnings to Fixed                             
 Charges (2)........................................      3.5          3.4     

--------                                                                        
(1) Gives effect to the increase in Fixed Charges as a result of the issuance   
of the Capital Securities.                                              
(2) Gives effect to the increase in Fixed Charges as a result of the issuance   
of the Capital Securities and the acquisition of A&A as reflected in the
pro forma condensed consolidated statements of income. The supplemental 
pro forma ratios exclude any restructuring charges that may be incurred 
and any cost savings Aon may realize. See "Pro Forma Consolidated       
Financial Information."                                                 

For purposes of computing the foregoing ratios: (i) Earnings consist of     
income from continuing operations before provision for income taxes and         
excluding cumulative effects of accounting changes plus Fixed Charges; and      
(ii) Fixed Charges consist of interest on indebtedness, the portion of rental   
payments on operating leases estimated to represent an interest component and   
interest related to the Company's guarantees of the debt of its Employee Stock  
Ownership Plan.                                                                 

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ACCOUNTING TREATMENT FOR THE TRUST  

For financial reporting purposes, the Trust is treated as a subsidiary of   
the Company and, accordingly, the accounts of the Trust are included in the     
consolidated financial statements of the Company. The Capital Securities will   
be presented as a separate line item in the consolidated balance sheet of the   
Company and appropriate disclosures about the Capital Securities, the           
Guarantee and the Junior Subordinated Debentures will be included in the notes  
to the consolidated financial statements. For financial reporting purposes,     
the Company will record Distributions payable on the Capital Securities as a    
charge in the consolidated statement of income.                                 

THE EXCHANGE OFFER  

PURPOSE AND EFFECT OF THE EXCHANGE OFFER                                        

In connection with the sale of the Old Capital Securities, the Company and  
the Trust entered into the Registration Rights Agreement with the Initial       
Purchasers, pursuant to which the Company and the Trust agreed to file and to   
use their reasonable best efforts to cause to become effective with the         
Commission a registration statement with respect to the exchange of the Old     
Capital Securities for capital securities with terms identical in all material  
respects to the terms of the Old Capital Securities. A copy of the              
Registration Rights Agreement has been filed as an exhibit to the Registration  
Statement of which this Prospectus is a part.                                   

The Exchange Offer is being made to satisfy the contractual obligations of  
the Company and the Trust under the Registration Rights Agreement. The forms    
and terms of the New Capital Securities are identical in all material respect   
to the forms and terms of the Old Capital Securities, except that the New       
Capital Securities have been registered under the Securities Act and therefore  
will not be subject to certain restrictions on transfer applicable to the Old   
Capital Securities and will not provide for any increase in the Distribution    
rate thereon. In that regard, the Old Capital Securities provide, among other   
things, that, if the Exchange Offer is not consummated by August 11, 1997, the  
Distribution rate borne by the Old Capital Securities commencing on August 12,  
1997, will increase by 0.25% per annum until the Exchange Offer is              
consummated. Upon consummation of the Exchange Offer, holders of Old Capital    
Securities will not be entitled to any increase in the Distribution rate        
thereon or any further registration rights under the Registration Rights        
Agreement, except under limited circumstances. See "Risk Factors--Consequences  
of a Failure to Exchange Old Capital Securities" and "Description of Old        
Capital Securities."                                                            

The Exchange Offer is not being made to, nor will the Trust or the Company  
accept tenders for exchange from, holders of Old Capital Securities in any      
jurisdiction in which the Exchange Offer or the acceptance thereof would not    
be in compliance with the securities or blue sky laws of such jurisdiction.     

Unless the context requires otherwise, the term "holder" with respect to the
Exchange Offer means any person in whose name the Old Capital Securities are    
registered on the books of the Company or any other person who has obtained a   
properly completed bond power from the registered holder, or any person who     
beneficially owns Old Capital Securities which are held of record by DTC who    
desires to deliver such Old Capital Securities by book-entry transfer into the  
Exchange Agent's account at DTC, or any person who beneficially owns Old        
Capital Securities which are held of record by a nominee other than DTC (or     
its nominee).                                                                   

Pursuant to the Exchange Offer, the Company will exchange as soon as        
practicable after the date hereof, the Old Guarantee for the New Guarantee and  
all of the Old Junior Subordinated Debentures, of which $824,000,000 aggregate  
principal amount is outstanding, for a like aggregate principal amount of the   
New Junior Subordinated Debentures. The New Guarantee and New Junior            
Subordinated Debentures have been registered under the Securities Act.          

TERMS OF THE EXCHANGE                                                           

The Trust hereby offers, upon the terms and subject to the conditions set   
forth in this Prospectus and in the accompanying Letter of Transmittal, to      
exchange up to $800,000,000 aggregate Liquidation Amount of New                 

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Capital Securities for a like aggregate Liquidation Amount of Old Capital       
Securities properly tendered on or prior to the Expiration Date and not         
properly withdrawn in accordance with the procedures described below. The       
Trust will issue, promptly after the Expiration Date, an aggregate Liquidation  
Amount of up to $800,000,000 of New Capital Securities in exchange for a like   
aggregate Liquidation Amount of outstanding Old Capital Securities tendered     
and accepted in connection with the Exchange Offer. Holders may tender their    
Old Capital Securities for exchange in whole or in part having a Liquidation    
Amount of not less than $100,000 (100 Old Capital Securities) or any integral   
multiple of $1,000 (1 Old Capital Security) in excess thereof.                  

The Exchange Offer is not conditioned upon any minimum Liquidation Amount of
Old Capital Securities being tendered. As of the date of this Prospectus,       
$800,000,000 aggregate Liquidation Amount of Old Capital Securities is          
outstanding.                                                                    

Holders of Old Capital Securities do not have any appraisal or dissenters'  
rights in connection with the Exchange Offer. Old Capital Securities which are  
not tendered for or are tendered but not accepted in connection with the        
Exchange Offer will remain outstanding and remain entitled to the benefits of   
the Trust Agreement, but will not be entitled to any further registration       
rights under the Registration Rights Agreement, except under limited            
circumstances. See "Risk Factors--Consequences of a Failure to Exchange Old     
Capital Securities" and "Description of Old Securities."                        

If any tendered Old Capital Securities are not accepted for exchange because
of an invalid tender, the occurrence of certain other events set forth herein   
or otherwise, certificates for any such unaccepted Old Capital Securities will  
be returned, without expense, to the tendering holder thereof promptly after    
the Expiration Date. Holders who tender Old Capital Securities in connection    
with the Exchange Offer will not be required to pay brokerage commissions or    
fees or transfer taxes with respect to the exchange of Old Capital Securities   
in connection with the Exchange Offer, except under those circumstances         
described in the Letter of Transmittal. The Company will pay all charges and    
expenses, other than certain applicable taxes described below, in connection    
with the Exchange Offer. See "--Fees and Expenses."                             

NEITHER THE BOARD OF DIRECTORS OF THE COMPANY NOR THE TRUSTEES OF THE TRUST 
MAKES ANY RECOMMENDATION TO HOLDERS OF OLD CAPITAL SECURITIES AS TO WHETHER TO  
TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF THEIR OLD CAPITAL        
SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO ONE HAS BEEN         
AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF OLD CAPITAL SECURITIES   
MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE EXCHANGE OFFER   
AND, IF SO, THE AGGREGATE LIQUIDATION AMOUNT OF OLD CAPITAL SECURITIES TO       
TENDER AFTER READING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND          
CONSULTING WITH THEIR ADVISERS, IF ANY, BASED ON THEIR OWN FINANCIAL POSITION   
AND REQUIREMENTS.                                                               

EXPIRATION DATE; EXTENSIONS; AMENDMENTS                                         

The term "Expiration Date" means 5:00 p.m., New York City time, on May 5,   
1997 unless the Exchange Offer is extended by the Company and the Trust (in     
which case the term "Expiration Date" shall mean the latest date and time to    
which the Exchange Offer is extended).                                          

The Company and the Trust expressly reserve the right, subject to applicable
law, at any time and from time to time, (i) to delay the acceptance of the Old  
Capital Securities for exchange, (ii) to terminate the Exchange Offer (whether  
or not any Old Capital Securities have been accepted for exchange) if the       
Company or the Trust determines, in its reasonable discretion, that any of the  
conditions referred to under "--Conditions to the Exchange Offer" have          
occurred or exist or have not been satisfied, (iii) to extend the Expiration    
Date and retain all Old Capital Securities tendered pursuant to the Exchange    
Offer, subject, however, to the right of holders of Old Capital Securities to   
withdraw their tendered Old Capital Securities as described under "--           
Withdrawal Rights," and (iv) to waive any condition or otherwise amend the      
terms of the Exchange Offer in any respect. If the Exchange Offer is amended    
in a manner determined by the Company and the Trust to constitute a material    

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change, or if the Company and the Trust waive a material condition of the       
Exchange Offer, the Company and the Trust will promptly disclose such           
amendment by means of a prospectus supplement that will be distributed to the   
registered holders of the Old Capital Securities, and the Company and the       
Trust will extend the Exchange Offer to the extent required by Rule 14e-1       
under the Exchange Act. If the Company or the Trust becomes aware of any        
material information with respect to the Exchange Offer, including the plan of  
distribution, not previously disclosed in this Prospectus or any material       
change to such information in this Prospectus, the Company and the Trust will   
promptly file a post-effective amendment to the Registration Statement. In      
such event, the Company and the Trust will extend the Exchange Offer to the     
extent required by Rule 14e-1 under the Exchange Act.                           

Any such delay in acceptance, extension, termination or amendment will be   
followed promptly by oral or written notice thereof to the Exchange Agent and   
by making a public announcement thereof, and such announcement in the case of   
an extension will be made no later than 9:00 a.m., New York City time, on the   
next business day after the previously scheduled Expiration Date. Without       
limiting the manner in which the Company and the Trust may choose to make any   
public announcement and subject to applicable law, the Company and the Trust    
shall have no obligation to publish, advertise or otherwise communicate any     
such public announcement other than by issuing a release to an appropriate      
news agency.                                                                    

ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF NEW CAPITAL SECURITIES                  

Upon the terms and subject to the conditions of the Exchange Offer, the     
Trust will exchange New Capital Securities for Old Capital Securities validly   
tendered and not withdrawn (pursuant to the withdrawal rights described under   
"--Withdrawal Rights") promptly after the Expiration Date.                      

Subject to the conditions set forth under "--Conditions to the Exchange     
Offer," delivery of New Capital Securities in exchange for Old Capital          
Securities tendered and accepted for exchange pursuant to the Exchange Offer    
will be made only after timely receipt by the Exchange Agent of (i)             
certificates for Old Capital Securities or a book-entry confirmation of a       
book-entry transfer of Old Capital Securities into the Exchange Agent's         
account at DTC, including an Agent's Message if the tendering holder does not   
deliver a Letter of Transmittal, (ii) a completed and signed Letter of          
Transmittal (or facsimile thereof), with any required signature guarantees,     
or, in the case of a book-entry transfer, an Agent's Message in lieu of the     
Letter of Transmittal, and (iii) any other documents required by the Letter of  
Transmittal. Accordingly, the delivery of New Capital Securities might not be   
made to all tendering holders at the same time, and will depend upon when       
certificates for Old Capital Securities, book-entry confirmations with respect  
to Old Capital Securities and other required documents are received by the      
Exchange Agent.                                                                 

The term "book-entry confirmation" means a timely confirmation of a book-   
entry transfer of Old Capital Securities into the Exchange Agent's account at   
DTC. See "--Procedures for Tendering Old Capital Securities--Book-Entry         
Transfer." The term "Agent's Message" means a message, transmitted by DTC to    
and received by the Exchange Agent and forming a part of a book-entry           
confirmation, which states that DTC has received an express acknowledgment      
from the tendering participant, which acknowledgment states that such           
participant has received and agrees to be bound by the Letter of Transmittal    
and that the Trust and the Company may enforce such Letter of Transmittal       
against such participant.                                                       

Subject to the terms and conditions of the Exchange Offer, the Company and  
the Trust will be deemed to have accepted for exchange, and thereby exchanged,  
Old Capital Securities validly tendered and not withdrawn as, if and when the   
Trust gives oral or written notice to the Exchange Agent of the Company's and   
the Trust's acceptance of such Old Capital Securities for exchange pursuant to  
the Exchange Offer. The Exchange Agent will act as agent for the Company and    
the Trust for the purpose of receiving tenders of Old Capital Securities,       
Letters of Transmittal and related documents, and as agent for tendering        
holders for the purpose of receiving Old Capital Securities, Letters of         
Transmittal and related documents and transmitting New Capital Securities       
which will not be held in global form by DTC or a nominee of DTC to validly     
tendering holders. Such exchange will be made promptly after the Expiration     
Date. If for any reason whatsoever, acceptance for exchange or the exchange of  
any Old Capital Securities tendered pursuant to the Exchange Offer is delayed   
(whether before or                                                              

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after the Company's and the Trust's acceptance for exchange of Old Capital      
Securities) or the Company and the Trust extend the Exchange Offer or are       
unable to accept for exchange or exchange Old Capital Securities tendered       
pursuant to the Exchange Offer, then, without prejudice to the Company's and    
the Trust's rights set forth herein, the Exchange Agent may, nevertheless, on   
behalf of the Company and the Trust and subject to Rule 14e-1(c) under the      
Exchange Act, retain tendered Old Capital Securities and such Old Capital       
Securities may not be withdrawn except to the extent tendering holders are      
entitled to withdrawal rights as described under "--Withdrawal Rights."         

Pursuant to an Agent's Message or a Letter of Transmittal, a holder of Old  
Capital Securities will represent, warrant and agree in the Letter of           
Transmittal that it has full power and authority to tender, exchange, sell,     
assign and transfer Old Capital Securities, that the Trust will acquire good,   
marketable and unencumbered title to the tendered Old Capital Securities, free  
and clear of all liens, restrictions, charges and encumbrances, and the Old     
Capital Securities tendered for exchange are not subject to any adverse claims  
or proxies. The holder also will warrant and agree that it will, upon request,  
execute and deliver any additional documents deemed by the Trust or the         
Exchange Agent to be necessary or desirable to complete the exchange, sale,     
assignment, and transfer of the Old Capital Securities tendered pursuant to     
the Exchange Offer.                                                             

PROCEDURES FOR TENDERING OLD CAPITAL SECURITIES                                 

Valid Tender. Except as set forth below, in order for Old Capital Securities
to be validly tendered by book-entry transfer, an Agent's Message or a          
completed and signed Letter of Transmittal (or facsimile thereof), with any     
required signature guarantees, and in either case any other documents required  
by the Letter of Transmittal, must be delivered to the Exchange Agent by mail,  
facsimile, hand delivery or overnight carrier at one of the Exchange Agent's    
addresses set forth under "--Exchange Agent" on or prior to the Expiration      
Date and either (i) such Old Capital Securities must be tendered pursuant to    
the procedures for book-entry transfer set forth below or (ii) the guaranteed   
delivery procedures set forth below must be complied with.                      

Except as set forth below, in order for Old Capital Securities to be validly
tendered by a means other than by book-entry transfer, a completed and signed   
Letter of Transmittal (or facsimile thereof), with any required signature       
guarantees, and any other documents required by the Letter of Transmittal,      
must be delivered to the Exchange Agent by mail, facsimile, hand delivery or    
overnight carrier at one of the Exchange Agent's addresses set forth under "--  
Exchange Agent" on or prior to the Expiration Date and either (i) such Old      
Capital Securities must be delivered to the Exchange Agent on or prior to the   
Expiration Date or (ii) the guaranteed delivery procedures set forth below      
must be complied with.                                                          

If less than all Old Capital Securities are tendered, a tendering holder    
should fill in the amount of Old Capital Securities being tendered in the       
appropriate box on the Letter of Transmittal. The entire amount of Old Capital  
Securities delivered to the Exchange Agent will be deemed to have been          
tendered unless otherwise indicated.                                            

THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL   
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING        
HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE     
EXCHANGE AGENT. IF DELIVERY IS TO BE BY MAIL, THE USE OF REGISTERED MAIL,       
RETURN RECEIPT REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE    
IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE       
TIMELY DELIVERY.                                                                

Book-Entry Transfer. The Exchange Agent and DTC have confirmed that any     
Participant (as defined in "Description of Securities--Description of Capital   
Securities--Form, Denomination, Book-Entry Procedures and Transfer--Depositary  
Procedures") in DTC's book-entry transfer facility system may utilize DTC's     
ATOP procedures to tender Old Capital Securities. The Exchange Agent will       
establish an account with respect to the Old Capital Securities at DTC for      
purposes of the Exchange Offer within two business days after the date of this  
Prospectus. Any Participant may make a book-entry delivery of the Old Capital   
Securities by causing DTC to                                                    

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transfer such Old Capital Securities into the Exchange Agent's account at DTC   
in accordance with DTC's ATOP procedures for transfer. However, although        
delivery of Old Capital Securities may be effected through book-entry transfer  
into the Exchange Agent's account at DTC, an Agent's Message or a completed     
and signed Letter of Transmittal (or facsimile thereof), with any required      
signature guarantees and any other documents required by the Letter of          
Transmittal, must in any case be delivered to and received by the Exchange      
Agent at one of its addresses set forth under "--Exchange Agent" on or prior    
to the Expiration Date, or the guaranteed delivery procedure set forth below    
must be complied with. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S    
PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.                  

Signature Guarantees. Certificates for Old Capital Securities need not be   
endorsed and signature guarantees on a Letter of Transmittal are unnecessary    
unless (a) a certificate for the Old Capital Securities is registered in a      
name other than that of the person surrendering the certificate or (b) such     
registered holder completes the box entitled "Special Issuance Instructions"    
or "Special Delivery Instructions" in the Letter of Transmittal. In the case    
of (a) or (b) above, such certificates for Old Capital Securities must be duly  
endorsed or accompanied by a properly executed bond power, with the             
endorsement or signature on the bond power and on the Letter of Transmittal     
guaranteed by a firm or other entity identified in Rule 17Ad-15 under the       
Exchange Act as an "eligible guarantor institution," including (as such terms   
are defined therein): (i) a bank; (ii) a broker, dealer, municipal securities   
broker or dealer or government securities broker or dealer; (iii) a credit      
union; (iv) a national securities exchange, registered securities association   
or clearing agency; or (v) a savings association that is a participant in a     
Securities Transfer Association (an "Eligible Institution"), unless             
surrendered on behalf of such Eligible Institution. See Instructions 4 and 7    
to the Letter of Transmittal.                                                   

Guaranteed Delivery. If a holder desires to tender Old Capital Securities   
pursuant to the Exchange Offer and the certificates for such Old Capital        
Securities are not immediately available or time will not permit all required   
documents to reach the Exchange Agent on or before the Expiration Date, or the  
procedures for book-entry transfer cannot be completed on a timely basis, such  
Old Capital Securities may nevertheless be tendered, provided that all of the   
following guaranteed delivery procedures are complied with:                     

(i) such tenders are made by or through an Eligible Institution;        

(ii) a completed and signed Notice of Guaranteed Delivery, substantially
in the form accompanying the Letter of Transmittal, is delivered to the     
Exchange Agent, as provided below, on or prior to Expiration Date; and      

(iii) the certificates (or a book-entry confirmation) representing all  
tendered Old Capital Securities, in proper form for transfer, together with 
a completed and signed Letter of Transmittal (or facsimile thereof) or, in  
the case of a book-entry transfer, an Agent's Message in lieu of the Letter 
of Transmittal, with any required signature guarantees and any other        
documents required by the Letter of Transmittal, are received by the        
Exchange Agent within five New York Stock Exchange trading days after the   
date of execution of such Notice of Guaranteed Delivery.                    

The Notice of Guaranteed Delivery may be delivered by hand, or transmitted  
by facsimile or mail to the Exchange Agent and must include a guarantee by an   
Eligible Institution in the form set forth in such notice.                      

The Company's and the Trust's acceptance for exchange of Old Capital        
Securities tendered pursuant to any of the procedures described above will      
constitute a binding agreement between the tendering holder, the Company and    
the Trust upon the terms and subject to the conditions of the Exchange Offer.   

Determination of Validity. All questions as to the form of documents,       
validity, eligibility (including time of receipt) and acceptance for exchange   
of any tendered Old Capital Securities will be determined by the Company and    
the Trust, in their sole discretion, whose determination shall be final and     
binding on all parties. The Company and the Trust reserve the absolute right,   
in their sole and absolute discretion, to reject any and all tenders            
determined by them not to be in proper form or the acceptance of which, or      
exchange for, may, in the view of counsel to the Company and the Trust, be      
unlawful. The Company and the Trust also reserve the right,                     

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in their reasonable discretion and subject to applicable law, to waive any of   
the conditions of the Exchange Offer as set forth under "--Conditions to the    
Exchange Offer" or any condition, defect or irregularity in any tender of Old   
Capital Securities of any particular holder whether or not similar conditions,  
defects or irregularities are waived in the case of other holders.              

The Company's and the Trust's interpretation of the terms and conditions of 
the Exchange Offer (including the Letter of Transmittal and the instructions    
thereto) will be final and binding on all parties. No tender of Old Capital     
Securities will be deemed to have been validly made until all irregularities    
with respect to such tender have been cured or waived. Neither the Company,     
the Trust, any affiliates or assigns of the Company or the Trust, the Exchange  
Agent nor any other person shall be under any duty to give any notification of  
any defects or irregularities in tenders or incur any liability for failure to  
give any such notification.                                                     

If any Letter of Transmittal, endorsement, bond power, power of attorney or 
any other document required by the Letter of Transmittal is signed by a         
trustee, executor, administrator, guardian, attorney-in-fact, officer of a      
corporation or other person acting in a fiduciary or representative capacity,   
such person should so indicate when signing and, unless waived by the Company   
and the Trust, proper evidence satisfactory to the Company and the Trust, in    
their sole discretion, of such person's authority to so act must be submitted.  

A beneficial owner of Old Capital Securities that are held by or registered 
in the name of a broker, dealer, commercial bank, trust company or other        
nominee or custodian is urged to contact such entity promptly if such           
beneficial holder wishes to participate in the Exchange Offer.                  

RESALES OF NEW CAPITAL SECURITIES                                               

The Trust is making the Exchange Offer for the Capital Securities in        
reliance on the position of the staff of the Division of Corporation Finance    
of the Commission as set forth in certain interpretive letters addressed to     
third parties in other transactions. However, neither the Company nor the       
Trust sought its own interpretive letter and there can be no assurance that     
the staff of the Division of Corporation Finance of the Commission would make   
a similar determination with respect to the Exchange Offer as it has in such    
interpretive letters to third parties. Based on these interpretations by the    
staff of the Division of Corporation Finance, and subject to the conditions     
described below, the Company and the Trust believe that a holder of Old         
Capital Securities (other than a holder who is (a) a broker-dealer who          
purchased the Old Capital Securities directly from the Trust to resell          
pursuant to Rule 144A or any other available exemption under the Securities     
Act, (b) a person participating in the distribution of the Old Capital          
Securities or (c) a person who is an "affiliate" of the Company or the Trust)   
who exchanges Old Capital Securities in the Exchange Offer for New Capital      
Securities and then resells such New Capital Securities will be viewed by the   
staff no differently than a non-affiliated purchaser of registered securities   
who purchases such securities in a registered primary offering of securities    
and, after completion of such registered offering, may resell the New Capital   
Securities without further compliance with the registration and prospectus      
delivery requirements of the Securities Act, provided that such New Capital     
Securities are acquired in the ordinary course of such holder's business and    
that such holder is not participating, and has no arrangement or understanding  
with any person to participate, in a distribution (within the meaning of the    
Securities Act) of such New Capital Securities. Any holder of Old Capital       
Securities who uses the Exchange Offer to participate in a distribution of the  
New Capital Securities to be acquired in the Exchange Offer, any broker-dealer  
who receives New Capital Securities in exchange for Old Capital Securities      
that were purchased directly from the Trust to resell pursuant to Rule 144A or  
any other available exemption under the Securities Act, any person              
participating in the distribution of the Old Capital Securities who receives    
New Capital Securities in the Exchange Offer and any "affiliate" of the         
Company or the Trust who receives New Capital Securities in the Exchange Offer  
(a) will not be able to rely on the interpretations of the staff of the         
Division of Corporation Finance set forth in the above-described interpretive   
letters and (b) must comply with the registration and prospectus delivery       
requirements of the Securities Act in connection with any sale or other         
transfer of such New Capital Securities, unless such sale is made pursuant to   
an exemption from such requirements. Any such resale transaction must be made   
by delivery of a prospectus containing the selling securityholder information   
required by the rules of the Commission under the Securities Act.               

Each holder (including any broker-dealer) of Old Capital Securities who     
wishes to exchange Old Capital Securities for New Capital Securities in the     
Exchange Offer will be required to represent that (i) it is not an              

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"affiliate" of the Company or the Trust, (ii) any New Capital Securities to be  
received by it are being acquired in the ordinary course of its business,       
(iii) it has no arrangement or understanding with any person to participate in  
a distribution (within the meaning of the Securities Act) of such New Capital   
Securities, and (iv) such holder is not engaged in, and does not intend to      
engage in, a distribution (within the meaning of the Securities Act) of such    
New Capital Securities. The Letter of Transmittal contains the foregoing        
representations. In addition, the Company and the Trust may require a holder,   
as a condition to such holder's eligibility to participate in the Exchange      
Offer, to furnish to the Company and the Trust (or an agent thereof) in         
writing information as to the number of "beneficial owners" (within the         
meaning of Rule 13d-3 under the Exchange Act) on behalf of whom such holder     
holds the Capital Securities to be exchanged in the Exchange Offer.             

A broker-dealer who holds Old Capital Securities for its own account as a   
result of market-making activities or other trading activities and who          
receives New Capital Securities in exchange for such Old Capital Securities     
pursuant to the Exchange Offer may be deemed to be an "underwriter" within the  
meaning of the Securities Act and will be required to deliver a prospectus      
meeting the requirements of the Securities Act in connection with any resale    
of such New Capital Securities. Based upon the position taken by the staff of   
the Division of Corporation Finance of the Commission in the interpretive       
letters referred to above, the Company and the Trust believe that a broker-     
dealer may participate in the Exchange Offer with respect to Old Capital        
Securities acquired for its own account as a result of market-making            
activities or other trading activities (a "Participating Broker-Dealer"),       
provided that in connection with any resales of New Capital Securities          
received in exchange for such Old Capital Securities, such broker-dealer        
delivers a prospectus meeting the requirements of the Securities Act, which     
may be the prospectus prepared for an exchange offer so long as it contains a   
description of the plan of distribution with respect to the resale of such New  
Capital Securities. Accordingly, the Company and the Trust will require each    
broker-dealer who tenders, pursuant to the Exchange Offer, Old Capital          
Securities that were acquired for its own account as the result of market-      
making activities or other trading activities to acknowledge that it will       
deliver a prospectus meeting the requirements of the Securities Act in          
connection with any resale of New Capital Securities received in exchange for   
such Old Capital Securities pursuant to the Exchange Offer. The Letter of       
Transmittal contains the foregoing acknowledgment. However, the Letter of       
Transmittal states that by so acknowledging and by delivering a prospectus, a   
broker-dealer will not be deemed to admit that it is an "underwriter" within    
the meaning of the Securities Act. Also based upon the position taken by the    
staff of the Division of Corporation Finance of the Commission in the           
interpretive letters referred to above, the Company and the Trust believe that  
a Participating Broker-Dealer may fulfill its prospectus delivery requirement   
in connection with resales of New Capital Securities received in exchange for   
Old Capital Securities that were acquired by such Participating Broker-Dealer   
for its own account as a result of market-making activities or other trading    
activities with this Prospectus, as it may be amended or supplemented from      
time to time, during the 90-day period referred to below. Subject to certain    
provisions set forth in the Registration Rights Agreement and to the            
limitations described herein, the Company and the Trust have agreed that this   
Prospectus, as it may be amended or supplemented from time to time, may be      
used by a Participating Broker-Dealer in connection with resales of such New    
Capital Securities for a period ending 90 days after the Expiration Date or,    
if earlier, when all such New Capital Securities have been disposed of by such  
Participating Broker-Dealer. See "Plan of Distribution."                        

In that regard, each Participating Broker-Dealer who surrenders Old Capital 
Securities pursuant to the Exchange Offer will be deemed to have agreed, by     
execution of the Letter of Transmittal or delivery of any Agent's Message in    
lieu thereof, that, upon receipt of notice from the Company or the Trust of     
the occurrence of any event or the discovery of any fact which makes any        
statement contained or incorporated by reference in this Prospectus untrue in   
any material respect or which causes this Prospectus to omit to state a         
material fact necessary in order to make the statements contained or            
incorporated by reference herein, in light of the circumstances under which     
they were made, not misleading or of the occurrence of certain other events     
specified in the Registration Rights Agreement, such Participating Broker-      
Dealer will suspend the sale of New Capital Securities (or the New Guarantee    
or the New Junior Subordinated Debentures, as applicable) pursuant to this      
Prospectus until the Company or the Trust has amended or supplemented this      
Prospectus to correct such misstatement or omission and has furnished copies    
of the amended or supplemented Prospectus to such Participating Broker-Dealer   
or the Company or the Trust has given notice that the sale of the New Capital   
Securities (or the New Guarantee or the New Junior Subordinated Debentures, as  
applicable) may be resumed, as the case may be.                                 

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WITHDRAWAL RIGHTS                                                               

As set forth below, tenders of Old Capital Securities may be withdrawn at   
any time on or prior to the Expiration Date.                                    

In order for a withdrawal to be effective a written or facsimile            
transmission of such notice of withdrawal must be received by the Exchange      
Agent at one of its addresses set forth under "--Exchange Agent" on or prior    
to the Expiration Date. Any such notice of withdrawal must specify the name of  
the person who tendered the Old Capital Securities to be withdrawn, the         
aggregate Liquidation Amount of Old Capital Securities to be withdrawn, and     
(if certificates for such Old Capital Securities have been tendered) the name   
of the registered holder of the Old Capital Securities as set forth on the      
certificate for the Old Capital Securities, if different from that of the       
person who tendered such Old Capital Securities. If certificates for the Old    
Capital Securities have been delivered or otherwise identified to the Exchange  
Agent, then prior to the physical release of such certificates for the Old      
Capital Securities, the tendering holder must submit the serial numbers shown   
on the particular certificates for the Old Capital Securities to be withdrawn   
and the signature on the notice of withdrawal must be guaranteed by an          
Eligible Institution, except in the case of Old Capital Securities tendered     
for the account of an Eligible Institution. If Old Capital Securities have      
been tendered pursuant to the procedures for book-entry transfer set forth in   
"--Procedures for Tendering Old Capital Securities," the notice of withdrawal   
must specify the name and number of the account at DTC to be credited with the  
withdrawn Old Capital Securities. Withdrawals of tenders of Old Capital         
Securities may not be rescinded. Old Capital Securities properly withdrawn      
will not be deemed validly tendered for purposes of the Exchange Offer, but     
may be retendered at any subsequent time on or prior to the Expiration Date by  
following any of the procedures described above under "--Procedures for         
Tendering Old Capital Securities."                                              

All questions as to the validity, form and eligibility (including time of   
receipt) of such withdrawal notices will be determined by the Company and the   
Trust, in their sole discretion, whose determination shall be final and         
binding on all parties. Neither the Company, the Trust, any affiliates or       
assigns of the Company or the Trust, the Exchange Agent nor any other person    
shall be under any duty to give any notification of any irregularities in any   
notice of withdrawal or incur any liability for failure to give any such        
notification. Any Old Capital Securities which have been tendered but which     
are withdrawn will be returned to the holder thereof promptly after             
withdrawal.                                                                     

DISTRIBUTIONS ON NEW CAPITAL SECURITIES                                         

Each New Capital Security will accumulate Distributions from the most recent
Distribution Date on the Old Capital Securities surrendered in exchange for     
such New Capital Securities or, if no Distributions have been paid or provided  
for on such Old Capital Securities, from January 1, 1997. As a result, holders  
of Old Capital Securities that are accepted for exchange will not receive       
accumulated Distributions on such Old Capital Securities for any period from    
and after the most recent Distribution Date on such Old Capital Securities or,  
if no Distributions have been paid or provided for on such Old Capital          
Securities, from and after January 1, 1997, and such holders will be deemed to  
have waived the right to receive any Distributions on such Old Capital          
Securities.                                                                     

CONDITIONS TO THE EXCHANGE OFFER                                                

Notwithstanding any other provisions of the Exchange Offer, or any extension
of the Exchange Offer, the Company and the Trust will not be required to        
accept any Old Capital Securities for exchange or to exchange any New Capital   
Securities for any Old Capital Securities, and, as described below, may         
terminate the Exchange Offer (whether or not any Old Capital Securities have    
been accepted for exchange) or may waive any conditions to or amend the         
Exchange Offer, if any of the following conditions have occurred or exists or   
have not been satisfied:                                                        

 (a) there shall occur a change in the current interpretation by the staff
of the Commission which permits the New Capital Securities issued pursuant  
to the Exchange Offer in exchange for Old Capital Securities to be offered  
for resale, resold and otherwise transferred by holders thereof (other than 
broker-dealers and any such holder which is an "affiliate" of the Company   
or the Trust within the meaning of Rule 405 under the Securities Act)       
without compliance with the registration and prospectus delivery provisions 
of the Securities Act provided that such New Capital Securities are         
acquired in the ordinary                                                    

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course of such holders' business and such holders have no arrangement or    
understanding with any person to participate in the distribution of such    
New Capital Securities;                                                     

(b) any action or proceeding shall have been instituted or threatened in
any court or by or before any governmental agency or body with respect to   
the Exchange Offer which, in the Company's and the Trust's judgment, would  
reasonably be expected to impair the ability of the Company or the Trust to 
proceed with the Exchange Offer;                                            

(c) any law, statute, rule or regulation shall have been adopted or     
enacted which, in the Company's and the Trust's judgment, would reasonably  
be expected to impair the ability of the Company or the Trust to proceed    
with the Exchange Offer;                                                    

(d) trading on the New York Stock Exchange or generally in the United   
States over-the-counter market shall have been suspended by order of the    
Commission or any other governmental authority which, in the Company's and  
the Trust's judgment, would reasonably be expected to impair the ability of 
the Company or the Trust to proceed with the Exchange Offer;                

(e) a stop order shall have been issued by the Commission or any state  
securities authority suspending the effectiveness of the Registration       
Statement or proceedings shall have been initiated or, to the knowledge of  
the Company or the Trust, threatened for that purpose, or any governmental  
approval has not been obtained, which approval the Company and the Trust    
shall, in their reasonable discretion, deem necessary for the consummation  
of the Exchange Offer as contemplated hereby; or                            

 (f) any change, or any development involving a prospective change, in the
business or financial affairs of the Company or any of its subsidiaries has 
occurred which, in the reasonable judgment of the Company and the Trust,    
might materially impair the ability of the Company or the Trust to proceed  
with the Exchange Offer.                                                    

If the Company and the Trust determine in their reasonable discretion that  
any of the foregoing events or conditions has occurred or exists or has not     
been satisfied, the Company and the Trust may, subject to applicable law,       
terminate the Exchange Offer (whether or not any Old Capital Securities have    
theretofore been accepted for exchange) or may waive any such condition or      
otherwise amend the terms of the Exchange Offer in any respect. If such waiver  
or amendment constitutes a material change to the Exchange Offer, the Company   
and the Trust will promptly disclose such waiver by means of a prospectus       
supplement that will be distributed to the registered holders of the Old        
Capital Securities, and the Company and the Trust will extend the Exchange      
Offer to the extent required by Rule 14e-1 under the Exchange Act.              

EXCHANGE AGENT                                                                  

The Bank of New York has been appointed as Exchange Agent for the Exchange  
Offer. Delivery of a Letter of Transmittal and any other documents required by  
the Letter of Transmittal, questions, requests for assistance, and requests     
for additional copies of this Prospectus or of a Letter of Transmittal should   
be directed to the Exchange Agent as follows:                                   

By Registered or             By Facsimile:        By Hand/Overnight     
Certified Mail:                                  Carrier:             

The Bank of New York  
The Bank of New York        Attn: Enrique Lopez     The Bank of New York    
101 Barclay Street--7E         (212) 571-3080        101 Barclay Street       
New York, New York 10286                              Corporate Trust Services  
                                  Window

Attn: Reorganization           (For Eligible                                
Section              Institutions Only)      Ground Level     
                           Confirm by Telephone     New York, New York 10286
                          (212) 815-6333        Attn: Reorganization
                                   Section

For Information Call: 
(212) 815-6333  

Delivery to other than the above addresses or facsimile number will not     
constitute a valid delivery.                                                    

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FEES AND EXPENSES                                                               

The Company has agreed to pay all expenses of the Trust, including expenses 
related to the Exchange Offer. The Company has agreed to pay the Exchange       
Agent reasonable and customary fees for its services and will reimburse it for  
its reasonable out-of-pocket expenses in connection therewith. The Company      
will also pay brokerage houses and other custodians, nominees and fiduciaries   
the reasonable out-of-pocket expenses incurred by them in forwarding copies of  
this Prospectus and related documents to the beneficial owners of Old Capital   
Securities, and in handling or tendering for their customers.                   

Holders who tender their Old Capital Securities for exchange will not be    
obligated to pay any transfer taxes in connection therewith. If, however, New   
Capital Securities are to be delivered to, or are to be issued in the name of,  
any person other than the registered holder of the Old Capital Securities       
tendered, or if a transfer tax is imposed for any reason other than the         
exchange of Old Capital Securities in connection with the Exchange Offer, then  
the amount of any such transfer taxes (whether imposed on the registered        
holder or any other persons) will be payable by the tendering holder. If        
satisfactory evidence of payment of such taxes or exemption therefrom is not    
submitted with the Letter of Transmittal, the amount of such transfer taxes     
will be billed directly to such tendering holder.                               

Neither the Company nor the Trust will make any payment to brokers, dealers 
or others soliciting acceptances of the Exchange Offer.                         

DESCRIPTION OF SECURITIES 

DESCRIPTION OF CAPITAL SECURITIES 

Pursuant to the terms of the Trust Agreement, the Trust has issued Old      
Capital Securities and Common Securities and, in the event the Exchange Offer   
is consummated, will issue New Capital Securities. New Capital Securities will  
represent undivided beneficial interests in the assets of the Trust and the     
holders thereof will be entitled to a preference in certain circumstances with  
respect to Distributions and amounts payable on redemption of the Trust         
Securities or liquidation of the Trust over the Common Securities. See "--      
Subordination of Common Securities." The Trust Agreement has been qualified     
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").  
The forms and terms of the New Capital Securities are identical in all          
material respects to the forms and terms of the Old Capital Securities, except  
that the New Capital Securities have been registered under the Securities Act   
and therefore are not subject to certain restrictions on transfer applicable    
to the Old Capital Securities (see "--Restrictions on Transfer and Removal of   
Certain Restrictions") and will not provide for any increase in the             
Distribution rate thereon. Accordingly, as the context may require, unless      
expressly stated otherwise, "Capital Securities" means the Old Capital          
Securities and, in the event the Exchange Offer is consummated, the New         
Capital Securities. The following is a summary of all material provisions of    
the Capital Securities, the Common Securities and the Trust Agreement;          
however, the summary does not purport to be complete and is subject to, and is  
qualified in its entirety by reference to, all the provisions of the Trust      
Agreement, including the definitions therein of certain terms.                  

GENERAL                                                                         

The Capital Securities (including the Old Capital Securities and the New    
Capital Securities) are limited to $800,000,000 aggregate Liquidation Amount    
at any one time outstanding. The Capital Securities rank on a parity, and       
payments are made thereon pro rata, with the Common Securities except as        
described under "--Subordination of Common Securities." The New Capital         
Securities and any Old Capital Securities that remain outstanding after         
consummation of the Exchange Offer will constitute a single series of Capital   
Securities under the Trust Agreement and, accordingly, will vote together as a  
single class for purposes of determining whether holders of the requisite       
percentage in outstanding Liquidation Amount thereof have taken certain         
actions or exercised certain rights under the Trust Agreement. Legal title to   
the Old Junior Subordinated Debentures is (and legal title to the New Junior    
Subordinated Debentures will be) held by the Property Trustee in trust for the  

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benefit of the holders of Capital Securities and Common Securities. The New     
Guarantee to be executed by the Company for the benefit of the holders of       
Capital Securities will be a guarantee on a subordinated basis but will not     
guarantee payment of Distributions or amounts payable on redemption of Capital  
Securities or on liquidation of the Trust when the Trust does not have funds    
on hand available to make such payments. See "Description of Guarantee."        

DISTRIBUTIONS                                                                   

Distributions on the Capital Securities are cumulative, accumulate from     
January 1, 1997 and are payable semi-annually in arrears at the annual rate of  
8.205% of the Liquidation Amount on January 1 and July 1 of each year,          
commencing July 1, 1997, to the holders of the Capital Securities on the        
relevant record dates. The record dates are the immediately preceding December  
15 and June 15, respectively. The amount of Distributions payable for any       
period is computed on the basis of a 360-day year of twelve 30-day months. In   
the event that any date on which Distributions are payable on the Capital       
Securities is not a Business Day (as defined below), payment of the             
Distribution payable on such date will be made on the next succeeding day that  
is a Business Day (and without any interest or other payment in respect to any  
such delay), in each case with the same force and effect as if made on such     
date (each date on which Distributions are payable in accordance with the       
foregoing, a "Distribution Date"). A "Business Day" means any day which is not  
a Saturday or Sunday and which is neither a legal holiday nor a day on which    
banking institutions in The City of New York are authorized or required by law  
or executive order to close or a day on which the principal corporate trust     
office of the Property Trustee or the Debenture Trustee is closed for           
business.                                                                       

So long as no Debenture Event of Default has occurred and is continuing, the
Company has the right under the Indenture to defer the payment of interest on   
the Junior Subordinated Debentures at any time or from time to time for a       
period not exceeding 10 consecutive semi-annual periods, during which           
Extension Period the Company has the right to make partial payments of          
interest on any Interest Payment Date. No Extension Period may extend beyond    
the Stated Maturity or any earlier prepayment date. As a consequence of any     
such deferral, semi-annual Distributions on the Capital Securities by the       
Trust will be deferred during any such Extension Period. Distributions to       
which holders of the Capital Securities are entitled will accumulate            
Additional Distributions at the rate of 8.205% per annum, compounded semi-      
annually from the relevant payment date for such Distributions, but not         
exceeding the interest rate then accruing on the Junior Subordinated            
Debentures. The term "Distributions" as used herein shall include any such      
Additional Distributions and Additional Tax Sums, if applicable.                

During any such Extension Period, the Company may not, and may not permit   
any subsidiary of the Company to (i) declare or pay any dividends or            
distributions on, or redeem, purchase, acquire or make a liquidation payment    
with respect to, any of the Company's capital stock (which includes common and  
preferred stock) or (ii) make any payment of principal, interest or premium,    
if any, on or repay, repurchase or redeem any debt securities of the Company    
(including Other Debentures) that rank on a parity with or junior to the        
Junior Subordinated Debentures or make any guarantee payments with respect to   
any guarantee by the Company of the debt securities of any subsidiary of the    
Company (including Other Guarantees) if such guarantee ranks on a parity with   
or junior to the Junior Subordinated Debentures (other than (a) dividends or    
distributions in common stock of the Company, (b) any declaration of a          
dividend in connection with the implementation of a stockholders' rights plan,  
or the issuance of capital stock under any such plan, or the redemption or      
repurchase of any such rights pursuant thereto, (c) payments under the          
Guarantee and (d) purchases of common stock related to the issuance of common   
stock or rights under any of the Company's benefit plans for its directors,     
officers, employees, consultants or advisers).                                  

Prior to the termination of any such Extension Period, the Company may      
further extend such Extension Period, provided that such extension does not     
cause such Extension Period to exceed 10 consecutive semi-annual periods or to  
extend beyond the Stated Maturity or any earlier prepayment date. At any time   
following the termination of any such Extension Period and the payment of all   
amounts then due, the Company may elect to begin a new Extension Period,        
subject to the foregoing requirements. The Company must give the Property       

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Trustee and the Debenture Trustee notice of its election to begin or extend     
any Extension Period at least five Business Days prior to the earlier of (i)    
the next succeeding date the Distributions on the Capital Securities would      
have been payable but for the election to begin or extend such Extension        
Period or (ii) the date the Administrative Trustees are required to give        
notice to any securities exchange or other applicable self-regulatory           
organization or to holders of Capital Securities of the record date or the      
date such Distributions are payable, but in any event not fewer than five       
Business Days prior to such record date. There is no limitation on the number   
of times that the Company may elect to begin an Extension Period. See           
"Description of Junior Subordinated Debentures--Option to Defer Interest        
Payments" and "Certain Federal Income Tax Consequences--Interest Income and     
Original Issue Discount."                                                       

The revenue of the Trust available for distribution to holders of the       
Capital Securities will be limited to payments under the Junior Subordinated    
Debentures. See "Description of Junior Subordinated Debentures--General." If    
the Company does not make interest payments on the Junior Subordinated          
Debentures, the Property Trustee will not have funds available to pay           
Distributions on the Capital Securities. The payment of Distributions (if and   
to the extent the Trust has funds legally available for the payment of such     
Distributions and cash sufficient to make such payments) is guaranteed by the   
Company on a subordinated basis as set forth under "Description of Guarantee."  

REDEMPTION                                                                      

Upon the repayment in full at the Stated Maturity or prepayment in whole    
(but not in part) of the Junior Subordinated Debentures, the proceeds from      
such repayment or prepayment shall be applied by the Property Trustee to        
redeem the Trust Securities, upon not less than 15 nor more than 60 days'       
notice of a date of redemption (the "Redemption Date"), at the applicable       
Redemption Price, which shall be equal to (i) in the case of the repayment in   
full of the Junior Subordinated Debentures at the Stated Maturity, the          
Maturity Redemption Price (equal to the principal of, and accrued interest on,  
the Junior Subordinated Debentures) or (ii) in the case of the optional         
prepayment by the Company in whole but not in part of the Junior Subordinated   
Debentures upon the occurrence and continuation of a Tax Event or an            
Investment Company Event at the Event Redemption Price (which is equal to the   
Event Prepayment Price in respect of the Junior Subordinated Debentures) (see   
"Description of Junior Subordinated Debentures--Tax Event or Investment         
Company Event Prepayment").                                                     

LIQUIDATION OF THE TRUST AND DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES     

The Company has the right to terminate the Trust at any time and, after     
satisfaction of liabilities to creditors of the Trust as provided by            
applicable law, cause the Junior Subordinated Debentures to be distributed to   
the holders of the Trust Securities in liquidation of the Trust. Such right is  
subject to the Company's having received an opinion of counsel to the effect    
that such distribution will not be a taxable event to holders of Capital        
Securities for United States federal income tax purposes.                       

Under current United States federal income tax law and interpretations and  
assuming, as expected, the Trust is treated as a grantor trust, a distribution  
of the Junior Subordinated Debentures will 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   
could be a taxable event to holders of the Capital Securities. See "Certain     
Federal Income Tax Consequences--Distribution of Junior Subordinated            
Debentures to Holders of Capital Securities."                                   

The Trust shall automatically terminate upon the first to occur of: (i)     
certain events of bankruptcy, a receivership of the Company or dissolution or   
liquidation of the Company; (ii) the dissolution or liquidation of the          
Company; (iii) distribution of a Like Amount (as defined below) of the Junior   
Subordinated Debentures to the holders of the Trust Securities if the Company,  
as Depositor, has given written direction to the Property Trustee to terminate  
the Trust (which direction is optional and wholly within the discretion of the  
Company, as Depositor, subject to the requirement that the Company receive an   
opinion of counsel to the effect that such                                      

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distribution will not be a taxable event to holders of Capital Securities for   
United States federal income tax purposes); (iv) redemption of all of the       
Trust Securities in connection with the repayment of all Junior Subordinated    
Debentures as described above under "--Redemption"; (v) the entry of an order   
for the dissolution of the Trust by a court of competent jurisdiction and (vi)  
the expiration of the term of the Trust on January 1, 2028.                     

If a termination occurs as described in clause (i), (ii), (iii) or (v)      
above, the Trust shall be liquidated by the Issuer Trustees as expeditiously    
as the Issuer Trustees determine to be possible by distributing, after          
satisfaction of liabilities to creditors of the Trust as provided by            
applicable law, to the holders of the Trust Securities a Like Amount of the     
Junior Subordinated Debentures, unless such distribution is determined by the   
Property Trustee not to be practicable, in which event such holders will be     
entitled to receive out of the liquidation of the assets of the Trust           
available for distribution to holders, after satisfaction of liabilities to     
creditors of the Trust as provided by applicable law, an amount equal to the    
aggregate of the Liquidation Amount plus accumulated and unpaid Distributions   
thereon to the date of payment (such amount being the "Liquidation              
Distribution"). If such Liquidation Distribution can be paid only in part       
because the Trust has insufficient assets available to pay in full the          
aggregate Liquidation Distribution, then the amounts payable directly by the    
Trust on the Trust Securities shall be paid on a pro rata basis. The holder(s)  
of the Common Securities will be entitled to receive Liquidation Distributions  
upon any such liquidation pro rata with the holders of the Capital Securities,  
except that if a Debenture Event of Default has occurred and is continuing,     
the Capital Securities shall have a priority over the Common Securities. See    
"--Subordination of Common Securities."                                         

"Like Amount" means Junior Subordinated Debentures having a principal amount
equal to the Liquidation Amount of the Trust Securities of the holder to whom   
such Junior Subordinated Debentures are distributed.                            

If there is no early termination of the Trust, the Capital Securities will  
remain outstanding until the repayment of the Junior Subordinated Debentures    
at the Stated Maturity.                                                         

After the liquidation date for any distribution of Junior Subordinated      
Debentures to holders of the Trust Securities, (i) the Capital Securities will  
no longer be deemed to be outstanding, (ii) DTC or its nominee, as the record   
holder of the Capital Securities, will receive a registered global certificate  
or certificates representing the Junior Subordinated Debentures to be           
delivered upon such distribution and (iii) any certificates representing        
Capital Securities not held by DTC or its nominee will be deemed to represent   
Junior Subordinated Debentures having a principal amount equal to the           
Liquidation Amount of such Capital Securities and bearing accrued and unpaid    
interest in an amount equal to the accrued and unpaid Distributions on such     
Capital Securities until such certificates are presented to the Administrative  
Trustees or their agent for cancellation, whereupon the Company will issue to   
such holder, and the Debenture Trustee will authenticate, a certificate         
representing such Junior Subordinated Debentures.                               

REDEMPTION PROCEDURES                                                           

Trust Securities shall be redeemed, if at all, at the applicable Redemption 
Price with the proceeds from the contemporaneous repayment or prepayment of     
the Junior Subordinated Debentures. Redemptions of the Trust Securities shall   
be made and the applicable Redemption Price shall be payable on the Redemption  
Date only to the extent that the Trust has funds on hand available for the      
payment of such applicable Redemption Price. See "--Subordination of Common     
Securities."                                                                    

If the Property Trustee gives a notice of redemption in respect of any      
Capital Securities, then, by 10:00 a.m., New York City time, on the Redemption  
Date, the Company shall deposit sufficient funds with the Property Trustee to   
pay the applicable Redemption Price. If such deposit has been made, then by     
12:00 noon, New York City time, on the Redemption Date, to the extent funds     
are available, with respect to the Capital Securities held in global form, the  
Property Trustee will irrevocably deposit with DTC funds sufficient to pay the  
applicable Redemption Price and will give DTC irrevocable instructions and      
authority to pay the applicable Redemption Price to the holders of the Capital  
Securities. See "--Form, Denomination, Book-Entry Procedures and                

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Transfer" and "--Payment and Paying Agency." With respect to the Capital        
Securities held in certificated form, the Property Trustee, to the extent       
funds are available, will irrevocably deposit with the paying agent for the     
Capital Securities funds sufficient to pay the applicable Redemption Price and  
will give such paying agent irrevocable instructions and authority to pay the   
applicable Redemption Price to the holders thereof upon surrender of their      
certificates evidencing the Capital Securities. See "--Payment and Paying       
Agency." Notwithstanding the foregoing, Distributions payable on or prior to    
the Redemption Date for any Capital Securities called for redemption shall be   
payable to the holders of such Capital Securities on the relevant record dates  
for the related Distribution Dates. If notice of redemption shall have been     
given and funds deposited as required, then upon the date of such deposit, all  
rights of the holders of the Capital Securities will cease, except the right    
of the holders of the Capital Securities to receive the applicable Redemption   
Price and any Distribution payable on or prior to the Redemption Date, but      
without interest, and the Capital Securities will cease to be outstanding. In   
the event that any Redemption Date of Capital Securities is not a Business      
Day, then payment of the applicable Redemption Price 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). In the event that      
payment of the applicable Redemption Price is improperly withheld or refused    
and not paid either by the Trust or by the Company pursuant to the Guarantee    
as described under "Description of Guarantee," Distributions on Capital         
Securities will continue to accumulate at the then applicable rate, from the    
Redemption Date originally established by the Trust to but excluding the date   
such applicable Redemption Price is actually paid, in which case the actual     
payment date will be the date fixed for redemption for purposes of calculating  
the applicable Redemption Price.                                                

Subject to applicable law (including, without limitation, United States     
federal securities law), the Company 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.                                            

Payment of the applicable Redemption Price on, and any distribution of      
Junior Subordinated Debentures to holders of, the Trust Securities shall be     
made to the applicable recordholders thereof as they appear on the register     
therefor on the relevant record date, which shall be a date not more than 45    
days nor less than 15 days prior to the Redemption Date or liquidation date,    
as applicable.                                                                  

Notice of any redemption will be mailed at least 15 days but not more than  
60 days before the Redemption Date to each holder of Trust Securities at its    
registered address. Unless the Company defaults in payment of the applicable    
Prepayment Price on, or in the repayment of, the Junior Subordinated            
Debentures, on and after the Redemption Date Distributions will cease to        
accumulate on the Trust Securities called for redemption.                       

SUBORDINATION OF COMMON SECURITIES                                              

Payment of Distributions on, and the Redemption Price of, the Capital       
Securities and Common Securities, as applicable, shall be made pro rata based   
on the Liquidation Amounts of the Capital Securities and Common Securities;     
provided, however, that if on any Distribution Date or Redemption Date a        
Debenture Event of Default shall have occurred and be continuing, no payment    
of any Distribution on, or applicable Redemption Price of, any of the Common    
Securities, and no other payment on account of the redemption, liquidation or   
other acquisition of the Common Securities, shall be made unless payment in     
full in cash of all accumulated and unpaid Distributions on all of the          
outstanding Capital Securities for all Distribution periods terminating on or   
prior thereto, or in the case of payment of the applicable Redemption Price     
the full amount of such Redemption Price on all outstanding Capital             
Securities, shall have been made or provided for, and all funds immediately     
available to the Property Trustee shall first be applied to the payment in      
full in cash of all Distributions on, or Redemption Price of, the Capital       
Securities then due and payable.                                                

In the case of any Event of Default under the Trust Agreement resulting from
a Debenture Event of Default, the Company as holder of the Common Securities    
will be deemed to have waived any right to act with respect to                  

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any such Event of Default until the effect of all such Events of Default has    
been cured, waived or otherwise eliminated. Until any such Events of Default    
have been so cured, waived or otherwise eliminated, the Property Trustee shall  
act solely on behalf of the holders of the Capital Securities and not on        
behalf of the Company as holder of the Common Securities, and only the holders  
of the Capital Securities will have the right to direct the Property Trustee    
to act on their behalf.                                                         

EVENTS OF DEFAULT; NOTICE                                                       

Any one of the following events constitutes an Event of Default under the   
Trust Agreement (an "Event of Default") (whatever the reason for such Event of  
Default and whether it shall be voluntary or involuntary or be effected by      
operation of law or pursuant to any judgment, decree or order of any court or   
any order, rule or regulation of any administrative or governmental body):      

(i) the occurrence of a Debenture Event of Default (see "Description of 
Junior Subordinated Debentures--Debenture Events of Default"); or           

(ii) default by the Property Trustee in the payment of any Distribution 
when it becomes due and payable, and continuation of such default for a     
period of 30 days; or                                                       

(iii) default by the Property Trustee in the payment of any Redemption  
Price of any Trust Security when it becomes due and payable; or             

(iv) default in the performance, or breach, in any material respect, of 
any covenant or warranty of the Issuer Trustees in the Trust Agreement      
(other than a covenant or warranty a default in the performance of which or 
the breach of which is addressed in clause (ii) or (iii) above) and         
continuation of such default or breach for a period of 60 days after there  
has been given, by registered or certified mail, to the defaulting Issuer   
Trustee or Trustees by the holders of at least 25% in aggregate Liquidation 
Amount of the outstanding Capital Securities, a written notice specifying   
such default or breach and requiring it to be remedied and stating that     
such notice is a "Notice of Default" under the Trust Agreement; or          

(v) the occurrence of certain events of bankruptcy or insolvency with   
respect to the Property Trustee and the failure to appoint a successor      
Property Trustee within 60 days thereof.                                    

Within 90 days after the occurrence of any Event of Default actually known  
to the Property Trustee, the Property Trustee shall transmit notice of such     
Event of Default to the holders of the Capital Securities, the Administrative   
Trustees and the Company, as Depositor, unless such Event of Default shall      
have been cured or waived. The Company, as Depositor, and the Administrative    
Trustees are required to file annually with the Property Trustee a certificate  
as to whether or not they are in compliance with all the conditions and         
covenants applicable to them under the Trust Agreement.                         

If a Debenture Event of Default has occurred and is continuing, the Capital 
Securities shall have a preference over the Common Securities with respect to   
payments of Distributions or upon termination of the Trust as described above.  
See "--Liquidation of the Trust and Distribution of Junior Subordinated         
Debentures" and "--Subordination of Common Securities."                         

REMOVAL OF ISSUER TRUSTEES; APPOINTMENT OF SUCCESSORS                           

The holders of a majority in Liquidation Amount of Capital Securities may   
remove the Property Trustee or the Delaware Trustee if a Debenture Event of     
Default has occurred and is continuing. If the Property Trustee or the          
Delaware Trustee is removed at a time when a Debenture Event of Default has     
occurred and is continuing, the holders of a majority in Liquidation Amount of  
Capital Securities may appoint a successor Property Trustee or Delaware         
Trustee. If no Debenture Event of Default has occurred and is continuing at     
such time, the Company, as holder of the Common Securities, may appoint a       
successor Property Trustee or Delaware Trustee. If an Administrative Trustee    
is removed, the Company, as holder of the Common Securities, shall promptly     
appoint a successor. In no event will the holders of Capital Securities have    
the right to vote to remove the Administrative Trustees, which voting rights    
are vested exclusively in the Company, as holder of the Common Securities. If   
a                                                                               

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successor has not been so appointed, any holder of Capital Securities or        
Common Securities (who has been a holder for at least six months), or a         
resigning Trustee, in the case of the failure to appoint its successor, may     
petition a court of competent jurisdiction to appoint a successor. Any          
Delaware Trustee must meet the applicable requirements of Delaware law. Any     
Property Trustee must be a national or state-chartered bank and at the time of  
appointment have securities rated in one of the three highest rating            
categories by a nationally recognized statistical rating organization and have  
capital and surplus of at least $50,000,000. Each Administrative Trustee shall  
be a current officer of the Company. No resignation or removal of an Issuer     
Trustee and no appointment of a successor trustee shall be effective until the  
acceptance of appointment by the successor trustee in accordance with the       
provisions of the Trust Agreement.                                              

MERGER OR CONSOLIDATION OF ISSUER TRUSTEES                                      

Any entity into which the Property Trustee or the Delaware Trustee may be   
merged or converted or with which it may be consolidated, or any entity         
resulting from any merger, conversion or consolidation to which such Issuer     
Trustee shall be a party, or any entity succeeding to all or substantially all  
the corporate trust business of such Issuer Trustee, shall be the successor of  
such Issuer Trustee under the Trust Agreement, provided such entity shall be    
otherwise qualified and eligible.                                               

MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST             

The Trust may not merge with or into, consolidate, amalgamate or be replaced
by, or convey, transfer or lease its properties and assets substantially as an  
entirety to any corporation or other entity, except as described below or       
pursuant to a liquidation as described above in "--Liquidation of the Trust     
and Distribution of Junior Subordinated Debentures." The Trust may, at the      
request of the Company, as Depositor, and with the consent of the               
Administrative Trustees, but without the consent of the holders of the Capital  
Securities, the Property Trustee or the Delaware Trustee, merge with or into,   
consolidate, amalgamate or be replaced by or convey, transfer or lease its      
properties and assets substantially as an entirety to a trust organized as      
such under the laws of any State; provided, however, that (i) such successor    
entity either (a) expressly assumes all of the obligations of the Trust with    
respect to the Capital Securities or (b) substitutes for the Capital            
Securities other securities having substantially the same terms as the Capital  
Securities (the "Successor Securities") so long as the Successor Securities     
rank the same as the Capital Securities rank in priority with respect to        
distributions and payments upon liquidation, redemption and otherwise, (ii)     
the Company expressly appoints a trustee of such successor entity possessing    
the same powers and duties as the Property Trustee as the holder of the Junior  
Subordinated Debentures, (iii) the Successor Securities are listed or traded,   
or any Successor Securities will be listed upon notification of issuance, on    
any national securities exchange or other organization on which the Capital     
Securities are then listed, if any, (iv) such merger, consolidation,            
amalgamation, replacement, conveyance, transfer or lease does not cause the     
Capital Securities (including any Successor Securities) to be downgraded by     
any nationally recognized statistical rating organization, (v) such merger,     
consolidation, amalgamation, replacement, conveyance, transfer or lease does    
not adversely affect the rights, preferences and privileges of the holders of   
the Capital Securities (including any Successor Securities) in any material     
respect, (vi) such successor entity has a purpose substantially identical to    
that of the Trust, (vii) prior to such merger, consolidation, amalgamation,     
replacement, conveyance, transfer or lease, the Company has received an         
opinion from independent counsel to the Trust experienced in such matters to    
the effect that (a) such merger, consolidation, amalgamation, replacement,      
conveyance, transfer or lease does not adversely affect the rights,             
preferences and privileges of the holders of the Capital Securities (including  
any Successor Securities) in any material respect, and (b) following such       
merger, consolidation, amalgamation, replacement, conveyance, transfer or       
lease, neither the Trust nor such successor entity will be required to          
register as an investment company under the Investment Company Act of 1940, as  
amended (the "Investment Company Act"), and (viii) the Company or any           
permitted successor or assignee owns all of the common securities of such       
successor entity and guarantees the obligations of such successor entity under  
the Successor Securities at least to the extent provided by the Guarantee.      
Notwithstanding the foregoing, the Trust shall not, except with the consent of  
holders of 100% in Liquidation Amount of the Capital Securities, consolidate,   
amalgamate, merge with or into, or be replaced by or convey, transfer or lease  
its                                                                             

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properties and assets substantially as an entirety to any other entity or       
permit any other entity to consolidate, amalgamate, merge with or into, or      
replace it if such consolidation, amalgamation, merger, replacement,            
conveyance, transfer or lease would cause the Trust or the successor entity to  
be classified as other than a grantor trust for United States federal income    
tax purposes.                                                                   

VOTING RIGHTS; AMENDMENT OF THE TRUST AGREEMENT                                 

Except as provided below and under "Description of Guarantee--Amendments and
Assignment" and as otherwise required by law and the Trust Agreement, the       
holders of the Capital Securities have no voting rights.                        

The Trust Agreement may be amended from time to time by the Company, the    
Property Trustee, the Delaware Trustee and the Administrative Trustees,         
without the consent of the holders of the Trust Securities, (i) to cure any     
ambiguity, to correct or supplement any provisions in the Trust Agreement that  
may be inconsistent with any other provision or to make any other provision     
with respect to matters or questions arising under the Trust Agreement, which   
shall not be inconsistent with the other provisions of the Trust Agreement,     
(ii) to modify, eliminate or add to any provisions of the Trust Agreement to    
such extent as shall be necessary to ensure that the Trust will be classified   
for United States federal income tax purposes as a grantor trust at all times   
that any Trust Securities are outstanding or to ensure that the Trust will not  
be required to register as an "investment company" under the Investment         
Company Act or (iii) to provide the Property Trustee with the authority to      
execute on behalf of the Administrative Trustees Capital Securities             
certificates in certificated, fully registered form; provided, however, that    
in the case of clauses (i) and (ii), such action shall not adversely affect in  
any material respect the interests of any holder of Trust Securities or the     
Property Trustee or the Delaware Trustee, and any amendments of the Trust       
Agreement shall become effective when notice thereof is given to the holders    
of the Trust Securities. The Trust Agreement may be amended by the Issuer       
Trustees and the Company with (i) the consent of holders representing not less  
than a majority (based upon Liquidation Amounts) of the outstanding Trust       
Securities and (ii) receipt by the Issuer Trustees of an opinion of counsel to  
the effect that such amendment or the exercise of any power granted to the      
Issuer Trustees in accordance with such amendment will not affect the Trust's   
status as a grantor trust for United States federal income tax purposes or the  
Trust's exemption from status as an "investment company" under the Investment   
Company Act. The Trust Agreement may not be amended without the consent of      
each holder of Trust Securities to (i) change the amount or timing of any       
Distribution on the Trust Securities or otherwise adversely affect the amount   
of any Distribution required to be made in respect of the Trust Securities as   
of a specified date or (ii) restrict the right of a holder of Trust Securities  
to institute suit for the enforcement of any such payment on or after such      
date.                                                                           

So long as any Junior Subordinated Debentures are held by the Property      
Trustee, the Issuer Trustees shall not (i) direct the time, method and place    
of conducting any proceeding for any remedy available to the Debenture Trustee  
or executing any trust or power conferred on the Debenture Trustee with         
respect to the Junior Subordinated Debentures, (ii) waive any past default      
that is waivable under the Indenture, (iii) exercise any right to rescind or    
annul a declaration that the principal of all the Junior Subordinated           
Debentures shall be due and payable or (iv) consent to any amendment,           
modification or termination of the Indenture or the Junior Subordinated         
Debentures, where the consent of the holders of the Junior Subordinated         
Debentures shall be required, without, in each case, obtaining the prior        
approval of the holders of at least a majority in Liquidation Amount of all     
outstanding Capital Securities; provided, however, that where a consent under   
the Indenture would require the consent of each holder of Junior Subordinated   
Debentures affected thereby, no such consent shall be given by the Property     
Trustee without the prior written consent of each holder of the Capital         
Securities. The Issuer Trustees shall not revoke any action previously          
authorized or approved by a vote of the holders of the Capital Securities,      
except by a subsequent vote of such holders. The Property Trustee shall notify  
each holder of Capital Securities of any notice of default with respect to the  
Junior Subordinated Debentures unless such default shall have been cured or     
waived. In addition to obtaining the foregoing approvals of such holders of     
the Capital Securities, prior to taking any of the foregoing actions, the       
Issuer Trustees shall obtain an opinion of counsel experienced in such matters  
to the effect that such action will not cause the Trust to be classified as an  
association taxable as a corporation for United States federal income tax       
purposes.                                                                       

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Any required approval of holders of Trust Securities may be given at a      
meeting of such holders convened for such purpose. Any action that may be       
taken by holders of Trust Securities at a meeting may be taken without a        
meeting if holders of Trust Securities holding more than a majority of          
outstanding Trust Securities (based upon their Liquidation Amount) shall        
consent to the action in writing. The Property Trustee will cause a notice of   
any meeting at which holders of Trust Securities are entitled to vote, or of    
any matter upon which action by written consent of such holders is to be        
taken, to be given to each holder of record of Trust Securities in the manner   
set forth in the Trust Agreement.                                               

No vote or consent of the holders of Capital Securities is required for the 
Trust to redeem and cancel the Capital Securities in accordance with the Trust  
Agreement.                                                                      

Notwithstanding that holders of the Capital Securities are entitled to vote 
or consent under any of the circumstances described above, any of the Capital   
Securities that are owned by the Company, the Issuer Trustees or any affiliate  
of the Company or any Issuer Trustee, shall, for purposes of such vote or       
consent, be treated as if they were not outstanding.                            

FORM, DENOMINATION, BOOK-ENTRY PROCEDURES AND TRANSFER                          

In the event that New Capital Securities are issued in certificated form,   
such New Capital Securities will be in blocks having a Liquidation Amount of    
not less than $100,000 (100 New Capital Securities) and may be transferred or   
exchanged in such blocks in the manner and at the offices described below.      

In the event that New Capital Securities are issued in registered, global   
form (collectively, the "Global Capital Securities"), the Global Capital        
Securities will be deposited upon issuance with the Property Trustee as         
custodian for DTC, in New York, New York, and registered in the name of DTC or  
its nominee, in each case for credit to an account of a direct or indirect      
participant in DTC as described below.                                          

Except as set forth below, Global Capital Securities may be transferred, in 
whole and not in part, only to another nominee of DTC or to a successor of DTC  
or its nominee. Beneficial interests in Global Capital Securities may not be    
exchanged for New Capital Securities in certificated form except in the         
limited circumstances described below. See "--Exchange of Book-Entry New        
Capital Securities for Certificated New Capital Securities."                    

Depositary Procedures                                                         

DTC has advised the Trust and the Company that DTC is a limited-purpose     
trust company created to hold securities for its participating organizations    
(collectively, the "Participants") and to facilitate the clearance and          
settlement of transactions in those securities between Participants through     
electronic book-entry changes in accounts of its Participants. The              
Participants include securities brokers and dealers (including the Initial      
Purchasers), banks, trust companies, clearing corporations and certain other    
organizations. Access to DTC's system is also available to other entities such  
as banks, brokers, dealers and trust companies that clear through or maintain   
a custodial relationship with a Participant, either directly or indirectly      
(collectively, the "Indirect Participants"). Persons who are not Participants   
may beneficially own securities held by or on behalf of DTC only through the    
Participants or the Indirect Participants. The ownership interest and transfer  
of ownership interest of each actual purchaser of each security held by or on   
behalf of DTC are recorded on the records of the Participants and Indirect      
Participants.                                                                   

DTC has also advised the Trust and the Company that, pursuant to procedures 
established by it, (i) upon deposit of Global Capital Securities, DTC will      
credit the accounts of Participants designated by the Exchange Agent with       
portions of the Liquidation Amount of such Global Capital Securities and (ii)   
ownership of such interests in such Global Capital Securities will be shown     
on, and the transfer of ownership thereof will be effected only through,        
records maintained by DTC (with respect to the Participants) or by the          
Participants and the Indirect Participants (with respect to other owners of     
beneficial interests in the Global Capital Securities).                         

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EXCEPT AS DESCRIBED BELOW, OWNERS OF INTERESTS IN GLOBAL CAPITAL SECURITIES 
WILL NOT HAVE NEW CAPITAL SECURITIES REGISTERED IN THEIR NAME, WILL NOT         
RECEIVE PHYSICAL DELIVERY OF NEW CAPITAL SECURITIES IN CERTIFICATED FORM AND    
WILL NOT BE CONSIDERED THE REGISTERED OWNERS OR HOLDERS THEREOF UNDER THE       
TRUST AGREEMENT FOR ANY PURPOSE.                                                

Payments in respect of a Global Capital Security registered in the name of  
DTC or its nominee will be payable by the Property Trustee to DTC in its        
capacity as the registered holder under the Trust Agreement. Under the terms    
of the Trust Agreement, the Property Trustee will treat the persons in whose    
names the New Capital Securities, including Global Capital Securities, are      
registered as the owners thereof for the purpose of receiving such payments     
and for any and all other purposes whatsoever. Consequently, neither the        
Property Trustee nor any agent thereof has or will have any responsibility or   
liability for (i) any aspect of DTC's records or any Participant's or Indirect  
Participant's records relating to or payments made on account of beneficial     
ownership interests in Global Capital Securities, or for maintaining,           
supervising or reviewing any of DTC's records or any Participant's or Indirect  
Participant's records relating to the beneficial ownership interests in Global  
Capital Securities or (ii) any other matter relating to the actions and         
practices of DTC or any of its Participants or Indirect Participants. DTC has   
advised the Trust and the Company that its current practice, upon receipt of    
any payment in respect of securities such as the New Capital Securities, is to  
credit the accounts of the relevant Participants with the payment on the        
payment date, in amounts proportionate to their respective holdings in          
Liquidation Amount of beneficial interests in the relevant security as shown    
on the records of DTC unless DTC has reason to believe it will not receive      
payment on such payment date. Payments by the Participants and the Indirect     
Participants to the beneficial owners of New Capital Securities will be         
governed by standing instructions and customary practices and will be the       
responsibility of the Participants or the Indirect Participants and will not    
be the responsibility of DTC, the Property Trustee or the Trust. Neither the    
Trust nor the Property Trustee will be liable for any delay by DTC or any of    
its participants in identifying the beneficial owners of the New Capital        
Securities, and the Trust and the Property Trustee may conclusively rely on     
and will be protected in relying on instructions from DTC or its nominee for    
all purposes.                                                                   

Interests in Global Capital Securities will trade in DTC's Same-Day Funds   
Settlement System and secondary market trading activity in such interests will  
therefore settle in immediately available funds, subject in all cases to the    
rules and procedures of DTC and its participants.                               

Transfers between Participants in DTC will be effected in accordance with   
DTC's procedures, and will be settled in same-day funds.                        

DTC has advised the Trust and the Company that it will take any action      
permitted to be taken by a holder of New Capital Securities only at the         
direction of one or more Participants to whose account with DTC interests in    
Global Capital Securities are credited and only in respect of such portion of   
the aggregate Liquidation Amount of the New Capital Securities as to which      
such Participant or Participants has or have given such direction. However, if  
there is an Event of Default under the Trust Agreement, DTC reserves the right  
to exchange Global Capital Securities for legended New Capital Securities in    
certificated form and to distribute such New Capital Securities to its          
Participants.                                                                   

The information in this section concerning DTC and their book-entry systems 
has been obtained from sources that the Trust and the Company believe to be     
reliable, but neither the Trust nor the Company takes responsibility for the    
accuracy thereof.                                                               

Exchange of Book-Entry New Capital Securities for Certificated New Capital    
Securities                                                                      

A Global Capital Security is exchangeable for New Capital Securities in     
registered certificated form if (i) DTC (x) notifies the Trust that it is       
unwilling or unable to continue as Depositary for the Global Capital Security   
or (y) has ceased to be a clearing agency registered under the Exchange Act     
and the Company fails to appoint a successor Depositary within 90 days, (ii)    
the Company in its sole discretion elects to cause the issuance of the New      
Capital Securities in certificated form or (iii) there shall have occurred and  
be continuing an Event of                                                       

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Default or any event which after notice or lapse of time or both would be an    
Event of Default under the Trust Agreement. In all cases, certificated New      
Capital Securities delivered in exchange for any Global Capital Security or     
beneficial interests therein will be registered in the names, and issued in     
any approved denominations, requested by or on behalf of the Depositary (in     
accordance with its customary procedures).                                      

PAYMENT AND PAYING AGENCY                                                       

Payments in respect of Global Capital Securities shall be made to DTC, which
shall credit the relevant accounts at DTC on the applicable Distribution        
Dates, or in respect of New Capital Securities that are not held by DTC, such   
payments shall be made by check mailed to the address of the holder entitled    
thereto as such address shall appear on the register. The paying agent (the     
"Paying Agent") shall initially be the Property Trustee and any co-paying       
agent chosen by the Property Trustee and acceptable to the Administrative       
Trustees and the Company. The Paying Agent shall be permitted to resign as      
Paying Agent upon 30 days' written notice to the Property Trustee and the       
Company. In the event that the Property Trustee shall no longer be the Paying   
Agent, the Administrative Trustees shall appoint a successor (which shall be a  
bank or trust company acceptable to the Administrative Trustees and the         
Company) to act as Paying Agent.                                                

RESTRICTIONS ON TRANSFER AND REMOVAL OF CERTAIN RESTRICTIONS                    

The New Capital Securities will be issued, and may be transferred only, in  
blocks having a Liquidation Amount of not less than $100,000 (100 New Capital   
Securities). Any attempted transfer, sale or other disposition of Capital       
Securities in a block having a Liquidation Amount of less than $100,000 shall   
be deemed to be void and of no legal effect whatsoever. Any such transferee     
shall be deemed not to be the holder of such Capital Securities for any         
purpose, including but not limited to the receipt of Distributions on such      
Capital Securities, and such transferee shall be deemed to have no interest     
whatsoever in such Capital Securities.                                          

The Old Capital Securities have not been registered under the Securities Act
or any state securities laws and therefore may not be offered, sold or          
otherwise transferred except in compliance with the registration requirements   
of the Securities Act and any other applicable securities laws, or pursuant to  
an exemption therefrom or in a transaction not subject thereto, and in each     
case in compliance with certain other conditions and restrictions. Old Capital  
Securities which remain outstanding after consummation of the Exchange Offer    
will continue to bear a legend reflecting such restrictions on transfer. New    
Capital Securities acquired in accordance with the Exchange Offer will not      
bear a legend reflecting such restrictions on transfer.                         

RATING                                                                          

The Capital Securities have not been rated by S&P or Moody's. On February 4,
1997, S&P announced that the preferred stock of the Company was downgraded      
from "AA-" to "A" and that the Company was removed from CreditWatch (where it   
had been placed following the Company's announcement that it had entered into   
the Merger Agreement with A&A). The preferred stock of the Company is           
currently rated "a3" by Moody's.                                                

REGISTRAR AND TRANSFER AGENT                                                    

The Property Trustee will act as registrar and transfer agent for the New   
Capital Securities. The Property Trustee also acts as registrar and transfer    
agent for the Old Capital Securities.                                           

Registration of transfers of the Capital Securities may be effected without 
charge by or on behalf of the Trust, but the registrar may require payment of   
a sum sufficient to cover any tax or governmental charge that may be imposed    
in connection with any transfer or exchange. The Trust will not be required to  
register or cause to be registered the transfer of the Capital Securities       
after they have been called for redemption.                                     

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INFORMATION CONCERNING THE PROPERTY TRUSTEE                                     

The Property Trustee, other than during the occurrence and continuance of an
Event of Default, undertakes to perform only such duties as are specifically    
set forth in the Trust Agreement and, after such Event of Default, must         
exercise the same degree of care and skill as a prudent person would exercise   
or use in the conduct of his or her own affairs. Subject to this provision,     
the Property Trustee is under no obligation to exercise any of the powers       
vested in it by the Trust Agreement at the request of any holder of Trust       
Securities unless it is offered reasonable indemnity against the costs,         
expenses and liabilities that might be incurred thereby. If no Event of         
Default has occurred and is continuing and the Property Trustee is required to  
decide between alternative causes of action, construe ambiguous or              
inconsistent provisions in the Trust Agreement or is unsure of the application  
of any provision of the Trust Agreement, and the matter is not one on which     
holders of the Capital Securities are entitled under the Trust Agreement to     
vote, then the Property Trustee shall take such action as is directed by the    
Company and if not so directed, shall take such action as it deems advisable    
and in the best interests of the holders of the Trust Securities and will have  
no liability except for its own bad faith, negligence or willful misconduct.    

MISCELLANEOUS                                                                   

The Administrative Trustees are authorized and directed to conduct the      
affairs of and to operate the Trust in such a way that the Trust will not be    
deemed to be an "investment company" required to be registered under the        
Investment Company Act or classified as other than a grantor trust for United   
States federal income tax purposes and so that the Junior Subordinated          
Debentures will be treated as indebtedness of the Company for United States     
federal income tax purposes. In this connection, the Company and the            
Administrative Trustees are authorized to take any action, not inconsistent     
with applicable law, the certificate of trust of the Trust or the Trust         
Agreement, that the Company and the Administrative Trustees determine in their  
discretion to be necessary or desirable for such purposes, as long as such      
action does not materially adversely affect the interests of the holders of     
the Trust Securities.                                                           

Holders of the Trust Securities have no preemptive or similar rights.       

The Trust may not borrow money or issue debt or mortgage or pledge any of   
its assets.                                                                     

DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES 

The Old Junior Subordinated Debentures were issued and the New Junior       
Subordinated Debentures will be issued as a separate series under the           
Indenture. The Indenture has been qualified under the Trust Indenture Act. In   
the event the Exchange Offer is consummated, the Company will exchange the New  
Junior Subordinated Debentures for the Old Junior Subordinated Debentures. The  
form and terms of the New Junior Subordinated Debentures are identical in all   
material respects to the form and terms of the Old Junior Subordinated          
Debentures, except that the New Junior Subordinated Debentures have been        
registered under the Securities Act and therefore are not subject to certain    
restrictions on transfer applicable to the Old Junior Subordinated Debentures   
and will not provide for any increase in the interest rate thereon.             
Accordingly, as the context may require, unless expressly stated otherwise,     
"Junior Subordinated Debentures" means the Old Junior Subordinated Debentures   
and, in the event the Exchange Offer is consummated, the New Junior             
Subordinated Debentures. The following is a summary of all material terms and   
provisions of the Junior Subordinated Debentures and the Indenture; however,    
the summary does not purport to be complete, and where reference is made to     
particular provisions of the Indenture, such provisions, including the          
definitions of certain terms, some of which are not otherwise defined herein,   
are qualified in their entirety by reference to all of the provisions of the    
Indenture and those terms made a part of the Indenture by the Trust Indenture   
Act.                                                                            

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GENERAL                                                                         

Concurrently with the issuance of the Old Capital Securities, the Trust     
invested the proceeds thereof, together with the consideration paid by the      
Company for the Common Securities, in the Old Junior Subordinated Debentures.   
Pursuant to the Exchange Offer, the Company will exchange the Old Junior        
Subordinated Debentures as soon as practicable after the consummation of the    
Exchange Offer and the Old Junior Subordinated Debentures will be retired and   
cancelled.                                                                      

The Junior Subordinated Debentures bear interest at the annual rate of      
8.205% of the principal amount thereof, payable semi-annually in arrears on     
January 1 and July 1 of each year (each, an "Interest Payment Date"),           
commencing July 1, 1997, to the person in whose name each Junior Subordinated   
Debenture is registered, subject to certain exceptions, at the close of         
business on the Business Day next preceding such Interest Payment Date. It is   
anticipated that until the liquidation, if any, of the Trust, each Junior       
Subordinated Debenture will be held in the name of the Property Trustee in      
trust for the benefit of the holders of the Trust Securities. The amount of     
interest payable for any period will be computed on the basis of a 360-day      
year of twelve 30-day months. In the event that any date on which interest is   
payable on the Junior Subordinated Debentures is not a Business Day, then       
payment of the interest payable on such date will be made on the next           
succeeding day that is a Business Day (and without any interest or other        
payment in respect of any such delay), in each case with the same force and     
effect as if made on the date such payment was originally payable. Accrued      
interest that is not paid on the applicable Interest Payment Date will bear     
additional interest ("Additional Interest") on the amount thereof (to the       
extent permitted by law) at the rate per annum of 8.205% thereof, compounded    
semi-annually. The term "interest" as used herein shall include semi-annual     
interest payments, Additional Interest and Additional Tax Sums (as defined      
below), as applicable.                                                          

The Junior Subordinated Debentures mature on January 1, 2027. The Junior    
Subordinated Debentures are unsecured and rank junior and subordinate in right  
of payment to all Senior Indebtedness of the Company. Because the Company is a  
holding company, the right of the Company to participate in any distribution    
of assets of any subsidiary, upon such subsidiary's liquidation or              
reorganization or otherwise (and thus the ability of holders of the Capital     
Securities to benefit indirectly from such distribution), is subject to the     
prior claims of creditors of that subsidiary, except to the extent that the     
Company may itself be recognized as a creditor of that subsidiary. Claims on    
the Company's subsidiaries by creditors other than the Company include long-    
term debt and certain other short-term borrowings. Accordingly, the Junior      
Subordinated Debentures are subordinated to all Senior Indebtedness of the      
Company and effectively subordinated to all existing and future liabilities of  
the Company's subsidiaries, and holders of Junior Subordinated Debentures       
should look only to the assets of the Company for payments on the Junior        
Subordinated Debentures. The Indenture does not limit the incurrence or         
issuance of other secured or unsecured debt of the Company, including Senior    
Indebtedness.                                                                   

DENOMINATIONS, REGISTRATION AND TRANSFER                                        

The New Junior Subordinated Debentures will be represented by one           
certificate registered in the name of The Bank of New York as Property Trustee  
of the Trust. If distributed to holders of Capital Securities in connection     
with a Tax Event or an Investment Company Event, the New Junior Subordinated    
Debentures may be represented by one or more global certificates registered in  
the name of Cede & Co. as the nominee of DTC and one or more New Junior         
Subordinated Debentures in certificated form. Beneficial interests in New       
Junior Subordinated Debentures in global form will be shown on, and transfers   
thereof will be effected only through, records maintained by participants in    
DTC. Except as described below, New Junior Subordinated Debentures in           
certificated form will not be issued in exchange for the global certificates.   

A global security shall be exchangeable for New Junior Subordinated         
Debentures registered in the names of persons other than Cede & Co. only if     
(i) DTC notifies the Company that it is unwilling or unable to continue as a    
depositary for such global security and no successor depositary shall have      
been appointed, or if at any time DTC ceases to be a "clearing agency"          
registered under the Exchange Act, at a time when DTC is required to be so      
registered to act as such depositary, (ii) the Company in its sole discretion   
determines that such global security                                            

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shall be so exchangeable or (iii) there shall have occurred and be continuing   
a Debenture Event of Default. Any global security that is exchangeable          
pursuant to the preceding sentence shall be exchangeable for certificates       
registered in such names as DTC shall direct. It is expected that such          
instructions will be based upon directions received by DTC from its             
Participants with respect to ownership of beneficial interests in such global   
security. In the event that New Junior Subordinated Debentures are issued in    
certificated form, such New Junior Subordinated Debentures will be in minimum   
denominations of $100,000 and integral multiples of $1,000 in excess thereof    
and may be transferred or exchanged only in such minimum denominations and in   
the manner and at the offices described below.                                  

Payments on New Junior Subordinated Debentures represented by a global      
security will be made to DTC, as the depositary for the New Junior              
Subordinated Debentures. In the event New Junior Subordinated Debentures are    
issued in certificated form, principal and interest will be payable, the        
transfer of the New Junior Subordinated Debentures will be registrable, and     
New Junior Subordinated Debentures will be exchangeable for New Junior          
Subordinated Debentures of other denominations of a like aggregate principal    
amount, at the corporate office of the Debenture Trustee in New York, New       
York, or at the offices of any paying agent or transfer agent appointed by the  
Company, provided that payment of interest may be made at the option of the     
Company by check mailed to the address of the persons entitled thereto or by    
wire transfer. In addition, if the New Junior Subordinated Debentures are       
registered to a holder other than the Property Trustee or a nominee of DTC,     
the record dates will be the immediately preceding December 15 and June 15,     
respectively.                                                                   

For a description of DTC and the terms of the depositary arrangements       
relating to payments, transfers, voting rights, redemptions and other notices   
and other matters, see "Description of Capital Securities--Form, Denomination,  
Book-Entry Procedures and Transfer." If the New Junior Subordinated Debentures  
are distributed to the holders of the Trust Securities upon the termination of  
the Trust, the form, denomination, book-entry and transfer procedures with      
respect to the Capital Securities as described under "Description of Capital    
Securities--Form, Denomination, Book-Entry Procedures and Transfer," shall      
apply to the New Junior Subordinated Debentures mutatis mutandis.               

PAYMENT AND PAYING AGENTS                                                       

Payment of principal of (and premium, if any) and any interest on Junior    
Subordinated Debentures will be made at the office of the Debenture Trustee in  
The City of New York or at the office of such Paying Agent or Paying Agents as  
the Company may designate from time to time, except that at the option of the   
Company payment of any interest may be made, except in the case of Junior       
Subordinated Debentures in global form, (i) by check mailed to the address of   
the Person entitled thereto as such address shall appear in the register for    
Junior Subordinated Debentures or (ii) by transfer to an account maintained by  
the Person entitled thereto as specified in such register, provided that        
proper transfer instructions have been received by the relevant record date.    
Payment of any interest on any Junior Subordinated Debenture will be made to    
the Person in whose name such Junior Subordinated Debenture is registered at    
the close of business on the record date for such interest, except in the case  
of a call for redemption after a record date and prior to such Interest         
Payment Date and defaulted interest. The Company may at any time designate      
additional Paying Agents or rescind the designation of any Paying Agent;        
however, the Company will at all times be required to maintain a Paying Agent   
in each place of payment for the Junior Subordinated Debentures.                

Any moneys deposited with the Debenture Trustee or any Paying Agent, or then
held by the Company in trust, for the payment of the principal of (and          
premium, if any) or interest on any Junior Subordinated Debenture and           
remaining unclaimed for two years after such principal (and premium, if any)    
or interest has become due and payable shall, at the request of the Company,    
be repaid to the Company and the holder of such Junior Subordinated Debenture   
shall thereafter look, as a general unsecured creditor, only to the Company     
for payment thereof.                                                            

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OPTION TO DEFER INTEREST PAYMENTS                                               

So long as no Debenture Event of Default has occurred and is continuing, the
Company has the right under the Indenture to defer the payment of interest at   
any time or from time to time for a period not exceeding 10 consecutive semi-   
annual periods, during which Extension Period the Company has the right to      
make partial payments of interest on any Interest Payment Date. No Extension    
Period may extend beyond the Stated Maturity or any earlier prepayment date.    
At the end of such Extension Period, the Company must pay all interest then     
accrued and unpaid (together with interest thereon at the annual rate of        
8.205%, compounded semi-annually, to the extent permitted by applicable law).   
During an Extension Period, interest will continue to accrue and holders of     
Junior Subordinated Debentures (and holders of the Capital Securities while     
Capital Securities are outstanding) will be required to accrue interest income  
for United States federal income tax purposes. See "Certain Federal Income Tax  
Consequences--Interest Income and Original Issue Discount."                     

During any such Extension Period, the Company may not, and may not permit   
any subsidiary of the Company to (i) declare or pay any dividends or            
distributions on, or redeem, purchase, acquire, or make a liquidation payment   
with respect to, any of the Company's capital stock (which includes common and  
preferred stock) or (ii) make any payment of principal of or interest or        
premium, if any, on or repay, repurchase or redeem any debt securities of the   
Company (including Other Debentures) that rank on a parity with or junior to    
the Junior Subordinated Debentures or make any guarantee payments with respect  
to any guarantee by the Company of the debt securities of any subsidiary of     
the Company (including Other Guarantees) if such guarantee ranks on a parity    
with or junior to the Junior Subordinated Debentures (other than (a) dividends  
or distributions in common stock of the Company, (b) any declaration of a       
dividend in connection with the implementation of a stockholders' rights plan,  
the issuance of capital stock under any such plan in the future, or the         
redemption or repurchase of any such rights distributed pursuant thereto, (c)   
payments under the Guarantee and (d) purchases of common stock related to the   
issuance of common stock or rights under any of the Company's benefit plans     
for its directors, officers, employees, consultants or advisers). Prior to the  
termination of any such Extension Period, the Company may further extend such   
Extension Period, provided that such extension does not cause such Extension    
Period to exceed 10 consecutive semi-annual periods or to extend beyond the     
Stated Maturity or any earlier prepayment date. At any time following the       
termination of any Extension Period and the payment of all amounts then due,    
the Company may elect to begin a new Extension Period, subject to the           
foregoing requirements. No interest shall be due and payable during an          
Extension Period, except at the end thereof. The Company must give the          
Property Trustee and Debenture Trustee notice of its election to begin or       
extend any Extension Period at least five Business Days prior to the earlier    
of (i) the next succeeding date the Distributions on the Capital Securities     
would have been payable but for the election to begin or extend such Extension  
Period or (ii) the date the Administrative Trustees are required to give        
notice to any securities exchange or other applicable self-regulatory           
organization or to holders of Capital Securities of the record date or the      
date such Distributions are payable, but in any event not fewer than five       
Business Days prior to such record date. An Administrative Trustee shall give   
notice of the Company's election to begin or extend an Extension Period to the  
holders of the Capital Securities. There is no limitation on the number of      
times that the Company may elect to begin an Extension Period.                  

TAX EVENT OR INVESTMENT COMPANY EVENT PREPAYMENT                                

If a Tax Event or an Investment Company Event (each as defined below) shall 
occur and be continuing, the Company may, at its option, prepay the Junior      
Subordinated Debentures in whole (but not in part) at any time within 90 days   
of the occurrence of such Tax Event or Investment Company Event, at a           
prepayment price (the "Event Prepayment Price") equal to the greater of (i)     
100% of the principal amount of such Junior Subordinated Debentures or (ii) as  
determined by the Quotation Agent (as defined below), the sum of the present    
value of 100% of the principal amount that would be payable on January 1,       
2027, together with the present values of scheduled payments of interest from   
the prepayment date to January 1, 2027 (the "Remaining Life"), in each case     
discounted to the prepayment date on a semi-annual basis (assuming a 360-day    
year consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus,   
in each case, accrued interest thereon to but excluding the date of             
prepayment.                                                                     

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If the Trust is required to pay any additional taxes, duties or other       
governmental charges as a result of a Tax Event, the Company will also pay any  
Additional Tax Sums on the Junior Subordinated Debentures.                      

Notice of any prepayment will be mailed at least 30 days but not more than  
60 days before the redemption date to each holder of Junior Subordinated        
Debentures to be prepaid at its registered address. Unless the Company          
defaults in payment of the prepayment price, on and after the prepayment date   
interest will cease to accrue on such Junior Subordinated Debentures called     
for prepayment.                                                                 

"Adjusted Treasury Rate" means, with respect to any prepayment date, the    
Treasury Rate plus (i) 1.00% if such prepayment date occurs on or before        
January 1, 1998 or (ii) 0.50% if such prepayment date occurs after January 1,   
1998.                                                                           

"Treasury Rate" means (i) the yield, under the heading which represents the 
average for the immediately prior week, appearing in the most recently          
published statistical release designated "H.15(519)" or any successor           
publication which is published weekly by the Federal Reserve 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 prepayment date. The Treasury   
Rate shall be calculated on the third Business Day preceding the prepayment     
date.                                                                           

"Comparable Treasury Issue" means with respect to any prepayment date the   
United States Treasury security selected by the Quotation Agent as having a     
maturity comparable to the Remaining Life that would be used, 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 January 1, 2027, 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.                                                                

"Quotation Agent" means Morgan Stanley & Co. Incorporated.                  

"Reference Treasury Dealer" means (i) Morgan Stanley & Co. Incorporated and 
Goldman, Sachs & Co. and their respective successors; provided, however, that   
if any of the foregoing shall cease to be a primary U.S. Government securities  
dealer in New York City (a "Primary Treasury Dealer"), the Company shall        
substitute therefor another Primary Treasury Dealer; and (ii) any other         
Primary Treasury Dealer selected by the Debenture Trustee after consultation    
with the Company.                                                               

"Comparable Treasury Price" means, with respect to any prepayment date, (A) 
the average of five Reference Treasury Dealer Quotations for such prepayment    
date, after excluding the highest and lowest such Reference Treasury Dealer     
Quotations, or (B) if the Debenture Trustee obtains fewer than three such       
Reference Treasury Dealer Quotations, the average of all such Quotations.       

"Liquidation Amount" means the stated amount of $1,000 per Capital Security.

"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any prepayment date, the average, as determined by the      
Debenture 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                                                                   

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the Debenture Trustee by such Reference Treasury Dealer at 5:00 p.m. on the     
third Business Day preceding such prepayment date.                              

"Additional Tax Sums" means the additional amounts as may be necessary in   
order that the amount of Distributions then due and payable by the Trust on     
the outstanding Capital Securities and Common Securities shall not be reduced   
as a result of any additional taxes, duties and other governmental charges to   
which the Trust has become subject as a result of a Tax Event.                  

"Tax Event" means the receipt by the Trust of an opinion of counsel         
experienced in such matters to the effect that, as a result of any amendment    
to, or change (including any announced prospective change) in, the laws (or     
any regulations thereunder) of the United States or any political subdivision   
or taxing authority thereof or therein, or as a result of any official          
administrative pronouncement or judicial decision interpreting or applying      
such laws or regulations, which amendment or change is effective or which       
pronouncement or decision is announced on or after January 13, 1997, there is   
more than an insubstantial risk that (i) the Trust is, or will be within 90     
days after the date of such opinion, subject to United States federal income    
tax with respect to income received or accrued on the Junior Subordinated       
Debentures, (ii) interest payable by the Company on the Junior Subordinated     
Debentures is not, or within 90 days after the date of such opinion, will not   
be, deductible by the Company, in whole or in part, for United States federal   
income tax purposes or (iii) the Trust is, or will be within 90 days after the  
date of such opinion, subject to more than a de minimis amount of other taxes,  
duties, assessments or other governmental charges.                              

"Investment Company Event" means the receipt by the Trust of an opinion of  
counsel experienced in such matters to the effect that, as a result of the      
occurrence of a change in law or regulation or change in interpretation or      
application of law or regulation by any legislative body, court, governmental   
agency or regulatory authority (a "Change in 1940 Act Law"), the Trust is or    
will be considered an investment company that is required to be registered      
under the Investment Company Act of 1940, as amended, which Change in 1940 Act  
Law becomes effective on or after January 13, 1997.                             

RESTRICTIONS ON CERTAIN PAYMENTS                                                

The Company also covenanted that it will not, and will not permit any       
subsidiary of the Company to, (i) declare or pay any dividends or               
distributions on, or redeem, purchase, acquire, or make a liquidation payment   
with respect to, any of the Company's capital stock (which includes common and  
preferred stock) or (ii) make any payment of principal, interest or premium,    
if any, on or repay or repurchase or redeem any debt securities of the Company  
(including other Debentures) that rank on a parity with or junior to the        
Junior Subordinated Debentures or make any guarantee payments with respect to   
any guarantee by the Company of the debt securities of any subsidiary of the    
Company (including other Guarantees) if such guarantee ranks on a parity with   
or junior to the Junior Subordinated Debentures (other than (a) dividends or    
distributions in common stock of the Company, (b) any declaration of a          
dividend in connection with the implementation of a stockholder's rights        
plan, or the issuance of any capital stock under any such plan in the future,   
or the redemption or repurchase of any such rights pursuant thereto, (c)        
payments under the Guarantee and (d) purchases of common stock related to the   
issuance of common stock or rights under any of the Company's benefit plans     
for its directors, officers, employees consultants or advisers) if at such      
time (i) there shall have occurred any event of which the Company has actual    
knowledge that (a) with the giving of notice or the lapse of time, or both,     
would constitute a "Debenture Event of Default" and (b) in respect of which     
the Company shall not have taken reasonable steps to cure, (ii) the Company     
shall be in default with respect to its payment of any obligations under the    
Guarantee or (iii) the Company shall have given notice of its election of an    
Extension Period as provided in the Indenture and shall not have rescinded      
such notice, or such Extension Period, or any extension thereof, shall          
be continuing.                                                                  

MODIFICATION OF INDENTURE                                                       

From time to time, the Company and the Debenture Trustee may, without the   
consent of the holders of the Junior Subordinated Debentures, amend, waive or   
supplement the Indenture for specified purposes, including,                     

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among other things, curing ambiguities, defects or inconsistencies (provided    
that any such action does not materially adversely affect the interest of the   
holders of the Junior Subordinated Debentures or the holders of Capital         
Securities so long as they remain outstanding) and qualifying, or maintaining   
the qualification of, the Indenture under the Trust Indenture Act.              

The Indenture contains a provision permitting the Company and the Debenture 
Trustee, with the consent of the holders of not less than a majority in         
principal amount of the Junior Subordinated Debentures, to modify the rights    
of the holders of Junior Subordinated Debentures, provided that no such         
modification may (i) change the fixed maturity of any Junior Subordinated       
Debentures, or reduce the rate or extend the time of payment of any interest    
thereon or on any overdue principal amount, or reduce the principal amount      
thereof, or reduce any amount payable upon any redemption thereof, or change    
the currency of payment of principal of or any interest thereon or on any       
overdue principal amount, without the consent of the holder of each Junior      
Subordinated Debenture so affected, (ii) reduce the aforesaid percentage of     
Junior Subordinated Debentures, the holders of which are required to consent    
to any such supplemental indenture, without the consent of the holders of all   
Junior Subordinated Debentures then outstanding, (iii) modify certain           
provisions of the Indenture relating to waiver of compliance with covenants,    
waiver of defaults or modification of the Indenture, except to increase the     
percentage of holders required for such waiver or modification, without the     
consent of the holders of all Junior Subordinated Debentures then outstanding,  
or (iv) modify the provisions of the Indenture with respect to the              
subordination of outstanding Junior Subordinated Debentures in a manner         
adverse to the holders thereof without the consent of the holder of each        
Junior Subordinated Debentures so affected; provided further that, so long as   
any of the Capital Securities remain outstanding, no such modification may be   
made that adversely affects the holders of such Capital Securities in any       
material respect, and no termination of the Indenture may occur, and no waiver  
of any Event of Default or compliance with any covenant under the Indenture     
may be effective, without the prior consent of the holders of at least a        
majority of the aggregate Liquidation Amount of such Capital Securities unless  
and until the principal of the underlying Junior Subordinated Debentures and    
all accrued and unpaid interest thereon have been paid in full and certain      
other conditions are satisfied.                                                 

DEBENTURE EVENTS OF DEFAULT                                                     

A Debenture Event of Default with respect to the Junior Subordinated        
Debentures is defined in the Indenture as being: (a) default for 30 days in     
payment of any installment of interest on the Junior Subordinated Debentures    
(subject to the deferral of any due date in the case of an Extension Period);   
(b) default in payment of any principal or premium, if any, on Junior           
Subordinated Debentures; (c) failure by the Company in performance in any       
material respect of any of the covenants or agreements (other than covenants    
to pay interest, principal and premium, which are subject to the foregoing      
clauses (a) and (b)) in the Indenture specifically contained therein for the    
benefit of the Junior Subordinated Debentures which shall not have been         
remedied for a period of 60 days after written notice to the Company by the     
Debenture Trustee or to the Company and the Debenture Trustee by the holders    
of not less than 25% in principal amount of the Junior Subordinated Debentures  
outstanding; or (d) certain events of bankruptcy, insolvency or reorganization  
of the Company.                                                                 

The Indenture provides that if a Debenture Event of Default under clause    
(a), (b) or (c) above shall have occurred and be continuing (but, in the case   
of clause (c), only if the Debenture Event of Default is with respect to less   
than all Junior Subordinated Debentures outstanding under the Indenture),       
either the Debenture Trustee or the holders of not less than 25% in principal   
amount of the then outstanding Junior Subordinated Debentures (each series of   
Junior Subordinated Debentures voting as a separate class in the case of        
clauses (a) and (b) above, and all series voting as one class in the case of    
clause (c) above) may declare the principal of all the Junior Subordinated      
Debentures, together with any accrued interest, to be immediately due and       
payable. Should the Debenture Trustee or holders of such Junior Subordinated    
Debentures fail to make such declaration, the holders of at least 25% in        
aggregate liquidation amount of the Capital Securities shall have such right.   
The Indenture also provides that if a Debenture Event of Default under clause   
(c) or (d) above shall have occurred and be continuing (but, in the case of     
clause (c), only if the Debenture Event of Default is with respect to all       
Junior Subordinated Debentures outstanding under the Indenture), either the     
Debenture Trustee or the holders of not less than 25% in principal amount of    
the then outstanding Junior Subordinated Debentures (all series voting as       

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one class) may declare the principal of all the Junior Subordinated             
Debentures, together with any accrued interest, to be immediately due and       
payable. Should the Debenture Trustee or holders of such Junior Subordinated    
Debentures fail to make such declaration, the holders of at least 25% in        
aggregate liquidation amount of the Capital Securities shall have such right.   
Upon certain conditions, such declaration (including a declaration caused by a  
default in the payment of principal or interest, the payment for which has      
subsequently been provided) may be annulled by the holders of at least a        
majority in principal amount of the Junior Subordinated Debentures. Should the  
holders of the Junior Subordinated Debentures fail to annul such declaration,   
the holders of at least a majority in aggregate liquidation amount of the       
Capital Securities shall have such right. In addition, past defaults may be     
waived by the holders of a majority in principal amount of the Junior           
Subordinated Debentures, except a default in the payment of principal of or     
interest on the Junior Subordinated Debentures or in respect of a covenant or   
provision of the Indenture which cannot be modified or amended without the      
consent of the holder of each Junior Subordinated Debenture so affected.        
Should the holders of the Junior Subordinated Debentures fail to waive such     
default, the holders of a majority in aggregate liquidation amount of the       
Capital Securities shall have such right.                                       

The Indenture contains a provision entitling the Debenture Trustee, subject 
to the duty of the Debenture Trustee during default to act with the required    
standard of care, to be indemnified by the holders of Junior Subordinated       
Debentures issued under the Indenture before proceeding to exercise any right   
or power under the Indenture at the request of such holders. The Indenture      
also provides that the holders of a majority in principal amount of the         
outstanding Junior Subordinated Debentures issued thereunder may direct the     
time, method and place of conducting any proceeding for any remedy available    
to the Debenture Trustee, or exercising any trust or power conferred on the     
Debenture Trustee.                                                              

The Indenture contains a covenant that the Company will file annually with  
the Debenture Trustee a certificate as to the absence of any default or         
specifying any default that exists.                                             

ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES                  

If a Debenture Event of Default has occurred and is continuing and such     
event is attributable to the failure of the Company to pay interest or          
principal on the Junior Subordinated Debentures on the date such interest or    
principal is otherwise payable, a holder of Capital Securities may institute a  
legal proceeding directly against the Company for enforcement of payment to     
such holder of the principal of or interest on such related Junior              
Subordinated Debentures having a principal amount equal to the aggregate        
Liquidation Amount of the related Capital Securities of such holder (a "Direct  
Action"). The Company may not amend the Indenture to remove the foregoing       
right to bring a Direct Action without the prior written consent of the         
holders of all of the Capital Securities. If the right to bring a Direct        
Action is removed, the Trust may become subject to reporting obligations under  
the Securities Exchange Act of 1934, as amended. Notwithstanding any payments   
made to a holder of Capital Securities by the Company in connection with a      
Direct Action, the Company shall remain obligated to pay the principal of or    
interest on the Junior Subordinated Debentures, and the Company shall be        
subrogated to the rights of the holder of such Capital Securities with respect  
to payments on the Capital Securities to the extent of any payments made by     
the Company to such holder in any Direct Action.                                

The holders of the Capital Securities would not be able to exercise directly
any remedies, other than those set forth in the preceding paragraph, available  
to the holders of the Junior Subordinated Debentures unless there shall have    
been an Event of Default under the Trust Agreement. See "Description of         
Capital Securities--Events of Default; Notice."                                 

CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS                    

The Indenture provides that the Company may not merge or consolidate or sell
or convey all or substantially all of its assets unless (i) the successor       
entity (if other than the Company) is a U.S. entity that assumes the Company's  
obligations under such Indenture and on the Junior Subordinated Debentures      
issued under such Indenture, and, after giving effect to such transaction, the  
Company or the successor would not be in default under such Indenture; and      
(ii) certain other conditions as prescribed in the Indenture are met.           

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The provisions of the Indenture do not afford holders of the Junior         
Subordinated Debentures protection in the event of a highly leveraged or other  
transaction involving the Company that may adversely affect holders of the      
Junior Subordinated Debentures.                                                 

SATISFACTION AND DISCHARGE                                                      

The Indenture provides that when, among other things, all Junior            
Subordinated Debentures not previously delivered to the Debenture Trustee for   
cancellation (i) have become due and payable or (ii) will become due and        
payable at their Stated Maturity within one year, and the Company deposits or   
causes to be deposited with the Debenture Trustee funds, in trust, for the      
purpose and in an amount sufficient to pay and discharge the entire             
indebtedness on the Junior Subordinated Debentures not previously delivered to  
the Debenture Trustee for cancellation, for the principal (and premium, if      
any) and interest to the date of the deposit or to the Stated Maturity, as the  
case may be, then the Indenture will cease to be of further effect (except as   
to remaining rights of registration of transfer, conversion, substitution and   
exchange, the rights and obligations of the Debenture Trustee, the Company's    
obligations to pay all other sums due pursuant to the Indenture and to provide  
the officers' certificates and opinions of counsel described therein), and the  
Company will be deemed to have satisfied and discharged the Indenture.          

SUBORDINATION                                                                   

In the Indenture, the Company has covenanted and agreed that the obligations
of the Company to make any payment on account of the principal of and interest  
on the Junior Subordinated Debentures will be subordinate and junior in right   
of payment to the Company's obligations to the holders of Senior Indebtedness   
of the Company to the extent described in the next two paragraphs. Senior       
Indebtedness of the Company with respect to the Junior Subordinated Debentures  
will include the existing and future senior notes, senior subordinated notes    
and subordinated notes of the Company and means (i) any indebtedness of the     
Company for borrowed or purchased money, whether or not evidenced by bonds,     
debentures, notes or other written instruments, (ii) obligations under letters  
of credit, (iii) any indebtedness or other obligations of the Company with      
respect to commodity contracts, interest rate and currency swap agreements,     
cap, floor and collar agreements, currency spot and forward contracts, and      
other similar agreements or arrangements designed to protect against            
fluctuations in currency exchange or interest rates, and (iv) any guarantees,   
endorsements (other than by endorsement of negotiable instruments for           
collection in the ordinary course of business) or other similar contingent      
obligations in respect of obligations of others of a type described in (i),     
(ii) or (iii) above, whether or not such obligation is classified as a          
liability on a balance sheet prepared in accordance with generally accepted     
accounting principles, in each case listed in (i), (ii), (iii) and (iv) above,  
whether outstanding on the date of execution of the Indenture or thereafter     
incurred, other than obligations "ranking on a parity" with the Junior          
Subordinated Debentures or "ranking junior" to the Junior Subordinated          
Debentures (as those terms are defined in the Indenture); provided, however,    
that the Junior Subordinated Debentures will not be subordinate and junior in   
right of payment to trade creditors. As of September 30, 1996, there was        
approximately $583 million of Senior Indebtedness of the Company outstanding.   
The Indenture does not limit the amount of future increase in Senior            
Indebtedness of the Company. The Company expects from time to time to issue     
additional indebtedness constituting Senior Indebtedness.                       

No payments on account of principal (or premium, if any) or interest, if    
any, in respect of the Junior Subordinated Debentures may be made if there      
shall have occurred and be continuing a default in any payment with respect to  
Senior Indebtedness, or an event of default with respect to any Senior          
Indebtedness resulting in the acceleration of the maturity thereof, or if any   
judicial proceeding shall be pending with respect to any such default.          

In the case of any insolvency, receivership, conservatorship,               
reorganization, readjustment of debt, marshaling of assets and liabilities or   
similar proceedings or any liquidation or winding-up of or relating to the      
Company as a whole, whether voluntary or involuntary, all obligations of the    
Company to holders of Senior Indebtedness of the Company shall be entitled to   
be paid in full before any payment shall be made on account of the principal    
of or interest on the Junior Subordinated Debentures. In the event of any such  
proceeding, after                                                               

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payment in full of all sums owing with respect to Senior Indebtedness of the    
Company, the holders of the Junior Subordinated Debentures, together with the   
holders of any obligations of the Company ranking on a parity with the Junior   
Subordinated Debentures, shall be entitled to be paid from the remaining        
assets of the Company the amount at the time due and owing on account of        
unpaid principal of and interest on the Junior Subordinated Debentures before   
any payment or other distribution, whether in cash, property or otherwise,      
shall be made on account of any capital stock or any obligations of the         
Company ranking junior to the Junior Subordinated Debentures. By reason of      
such subordination, in the event of the insolvency of the Company, holders of   
Senior Indebtedness of the Company may receive more, ratably, and holders of    
the Junior Subordinated Debentures having a claim pursuant to the Junior        
Subordinated Debentures may receive less, ratably, than the other creditors of  
the Company. Such subordination will not prevent the occurrence of any Event    
of Default in respect of the Junior Subordinated Debentures.                    

RESTRICTIONS ON TRANSFER                                                        

The New Junior Subordinated Debentures will be issued, and may be           
transferred only, in minimum denominations of not less than $100,000 and        
multiples of $1,000 in excess thereof. Any transfer, sale or other disposition  
of Junior Subordinated Debentures in a denomination of less than $100,000       
shall be deemed to be void and of no legal effect whatsoever. Any such          
transferee shall be deemed not to be the holder of such Junior Subordinated     
Debentures for any purpose, including but not limited to the receipt of         
payments on such Junior Subordinated Debentures, and such transferee shall be   
deemed to have no interest whatsoever in such Junior Subordinated Debentures.   

GOVERNING LAW                                                                   

The Indenture is and the New Junior Subordinated Debentures will be governed
by and construed in accordance with the laws of the State of New York.          

INFORMATION CONCERNING THE DEBENTURE TRUSTEE                                    

The Debenture Trustee is subject to all the duties and responsibilities     
specified with respect to an indenture trustee under the Trust Indenture Act.   
Subject to such provisions, the Debenture Trustee is under no obligation to     
exercise any of the powers vested in it by the Indenture at the request of any  
holder of Junior Subordinated Debentures, unless offered reasonable indemnity   
by such holder against the costs, expenses and liabilities which might be       
incurred thereby. The Debenture Trustee is not required to expend or risk its   
own funds or otherwise incur personal financial liability in the performance    
of its duties if the Debenture Trustee reasonably believes that repayment or    
adequate indemnity is not reasonably assured to it.                             

DESCRIPTION OF GUARANTEE  

The Old Guarantee was executed and delivered by the Company concurrently    
with the issuance by the Trust of the Old Capital Securities for the benefit    
of the holders from time to time of the Old Capital Securities. In the event    
the Exchange Offer is consummated, the Company will exchange the New Guarantee  
for the Old Guarantee. The New Guarantee Agreement has been qualified under     
the Trust Indenture Act. The form and terms of the New Guarantee are identical  
in all material respects to the form and terms of the Old Guarantee, except     
that the New Guarantee has been registered under the Securities Act.            
Accordingly, as the context may require, unless expressly stated otherwise,     
"Guarantee" means the Old Guarantee and, in the event the Exchange Offer is     
consummated, the New Guarantee. The following is a summary of all material      
terms and provisions of the Old Guarantee Agreement and the New Guarantee       
Agreement; however, the summary does not purport to be complete and is subject  
to, and qualified in its entirety by reference to, all of the provisions of     
the Old Guarantee Agreement and the New Guarantee Agreement, including the      
definitions therein of certain terms, and the Trust Indenture Act. The Bank of  
New York will act as Guarantee Trustee and will hold the New Guarantee for the  
benefit of the holders of all Capital Securities.                               

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GENERAL                                                                         

Under the New Guarantee the Company will irrevocably agree (and under the   
Old Guarantee has agreed) to pay in full on a subordinated basis, to the        
extent set forth herein, the Guarantee Payments (as defined below) to the       
holders of all Capital Securities, as and when due, regardless of any defense,  
right of set-off or counterclaim that the Trust may have or assert other than   
the defense of payment. The following payments with respect to the Capital      
Securities, to the extent not paid by or on behalf of the Trust (the            
"Guarantee Payments"), will be subject to the Guarantee: (i) any accumulated    
and unpaid Distributions required to be paid on the Capital Securities, to the  
extent that the Trust has funds on hand available therefor at such time, (ii)   
the applicable Redemption Price with respect to Capital Securities called for   
redemption, to the extent that the Trust has funds on hand available therefor   
at such time and (iii) upon a voluntary or involuntary termination,             
dissolution, winding-up or liquidation of the Trust (unless the Junior          
Subordinated Debentures are distributed to holders of the Capital Securities),  
the lesser of (a) the aggregate of the Liquidation Amount plus accumulated and  
unpaid Distributions on the Capital Securities to the date of payment, to the   
extent that the Trust has funds on hand available therefor at such time, and    
(b) the amount of assets of the Trust remaining available for distribution to   
holders of Capital Securities in liquidation of the Trust. The Company's        
obligation to make a Guarantee Payment may be satisfied by direct payment of    
the required amounts by the Company to the holders of the Capital Securities    
or by causing the Trust to pay such amounts to such holders.                    

The Guarantee is an irrevocable guarantee on a subordinated basis of the    
Trust's related obligations under all Capital Securities, but will apply only   
to the extent that the Trust has funds sufficient to make such payments, and    
is not a guarantee of collection. If the Company does not make interest         
payments on the Junior Subordinated Debentures held by the Trust, the Trust     
will not be able to pay Distributions on the Capital Securities and will not    
have funds legally available therefor. In such event, holders of the Capital    
Securities would not be able to rely on the Guarantee for such payments.        

The Guarantee ranks subordinate and junior in right of payment to all       
liabilities of the Company, other than any liabilities which expressly by       
their terms are made pari passu with or subordinate to the obligations of the   
Company under the Guarantee (including Other Guarantees). See "--Status of the  
Guarantee." Since the Company is a holding company, the right of the Company    
to participate in any distribution of assets of any subsidiary upon such        
subsidiary's liquidation or reorganization or otherwise (and thus the ability   
of holders of Capital Securities to benefit indirectly from such                
distribution), is subject to the prior claims of creditors of that subsidiary,  
except to the extent that the Company may itself be recognized as a creditor    
of that subsidiary. Claims on the Company's subsidiaries by creditors other     
than the Company include long-term debt and certain other short-term            
borrowings. Accordingly, the Company's obligations under the Guarantee will be  
effectively subordinated to all existing and future liabilities of the          
Company's subsidiaries, and claimants should look only to the assets of the     
Company for payments thereunder. The Guarantee does not limit the incurrence    
or issuance of other secured or unsecured debt of the Company, including        
Senior Indebtedness, whether under the Indenture or any other indenture that    
the Company may enter into in the future or otherwise.                          

The Company has, through the Guarantee, the Guarantee Agreement, the Trust  
Agreement, the Junior Subordinated Debentures, the Indenture and the Expense    
Agreement, taken together, fully, irrevocably and unconditionally guaranteed    
on a subordinated basis all of the Trust's obligations under the Capital        
Securities. No single document standing alone or operating in conjunction with  
fewer than all of the other documents constitutes such guarantee. It is only    
the combined operation of these documents that provides a full, irrevocable     
and unconditional guarantee of the Trust's obligations under the Capital        
Securities. See "Relationship Among the Capital Securities, the Junior          
Subordinated Debentures, the Guarantee and the Expense Agreement."              

STATUS OF THE GUARANTEE                                                         

The Guarantee constitutes an unsecured obligation of the Company and ranks  
subordinate and junior in right of payment to all liabilities of the Company    
(including obligations under the Junior Subordinated Debentures), other than    
any liabilities which expressly by their terms are made pari passu with or      
subordinate to the obligations of the Company under the Guarantee.              

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The Guarantee ranks pari passu with all Other Guarantees issued by the      
Company. The Guarantee constitutes a guarantee of payment and not of            
collection (i.e., the guaranteed party may institute a legal proceeding         
directly against the Company to enforce its rights under the Guarantee without  
first instituting a legal proceeding against any other person or entity). The   
Guarantee is held for the benefit of the holders of all Capital Securities.     
The Guarantee will not be discharged except by payment of the Guarantee         
Payments in full to the extent not paid by the Trust or upon distribution of    
the Junior Subordinated Debentures to the holders of the Capital Securities.    
The Guarantee does not place a limitation on the amount of additional Senior    
Indebtedness that may be incurred by the Company. The Company expects from      
time to time to incur additional indebtedness constituting Senior               
Indebtedness.                                                                   

AMENDMENTS AND ASSIGNMENT                                                       

Except with respect to any changes which do not adversely affect the rights 
of holders of the Capital Securities in any material respect (in which case no  
vote will be required), the Guarantee Agreement may not be amended without the  
prior approval of the holders of not less than a majority of the aggregate      
Liquidation Amount of outstanding Capital Securities. The manner of obtaining   
any such approval will be as set forth under "Description of Capital            
Securities--Voting Rights; Amendment of the Trust Agreement." All guarantees    
and agreements contained in the Guarantee Agreement shall bind the successors,  
assigns, receivers, trustees and representatives of the Company and shall       
inure to the benefit of the holders of the Capital Securities then              
outstanding.                                                                    

EVENTS OF DEFAULT                                                               

An event of default under the Guarantee Agreement will occur upon the       
failure of the Company to perform any of its payment or other obligations       
thereunder. The holders of not less than 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   
Guarantee Trustee in respect of the Guarantee or to direct the exercising of    
any trust or power conferred upon the Guarantee Trustee under the Guarantee     
Agreement.                                                                      

Any holder of the Capital Securities may institute a legal proceeding       
directly against the Company to enforce its rights under the Guarantee without  
first instituting a legal proceeding against the Trust, the Guarantee Trustee   
or any other person or entity.                                                  

The Company, as guarantor, is required to file annually with the Guarantee  
Trustee a certificate as to whether or not the Company is in compliance with    
all the conditions and covenants applicable to it under the Guarantee           
Agreement.                                                                      

CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS                    

The Guarantee Agreement provides that the Company shall not consolidate with
or merge into any other entity or convey, transfer or lease all or              
substantially all of its properties and assets to any other entity, and no      
entity shall consolidate with or merge into the Company or convey, transfer or  
lease all or substantially all of its properties and assets to the Company,     
unless (i) either the Company shall be the continuing corporation or the        
successor entity is organized under the laws of the United States or any state  
or the District of Columbia and such successor entity expressly assumes the     
Company's obligations on the Guarantee; (ii) immediately after giving effect    
thereto, no event of default under the Guarantee Agreement and no event which,  
after notice or lapse of time or both, would become an event of default under   
the Guarantee Agreement, shall have happened and be continuing; and (iii)       
certain other conditions as prescribed in the Guarantee Agreement are met.      

INFORMATION CONCERNING THE GUARANTEE TRUSTEE                                    

The Guarantee Trustee, other than during the occurrence and continuance of a
default by the Company in performance of the Guarantee, undertakes to perform   
only such duties as are specifically set forth in the                           

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Guarantee Agreement and, after default with respect to the Guarantee, must      
exercise the same degree of care and skill as a prudent person would exercise   
or use in the conduct of his or her own affairs. Subject to this provision,     
the Guarantee Trustee is under no obligation to exercise any of the powers      
vested in it by the Guarantee Agreement at the request of any holder of the     
Capital Securities unless it is offered reasonable indemnity against the        
costs, expenses and liabilities that might be incurred thereby.                 

TERMINATION OF THE GUARANTEE                                                    

The Guarantee will terminate and be of no further force and effect upon full
payment of the applicable Redemption Price of the Capital Securities, upon      
full payment of the amounts payable upon liquidation of the Trust or upon       
distribution of Junior Subordinated Debentures to the holders of the Capital    
Securities. The Guarantee will continue to be effective or will be reinstated,  
as the case may be, if at any time any holder of the Capital Securities must    
restore payment of any sums paid under the Capital Securities or the            
Guarantee.                                                                      

GOVERNING LAW                                                                   

The Old Guarantee is and the New Guarantee will be governed by and construed
in accordance with the laws of the State of New York.                           

THE EXPENSE AGREEMENT                                                           

Pursuant to the Expense Agreement, the Company has irrevocably and          
unconditionally guaranteed to each person or entity to whom the Trust becomes   
indebted or liable, the full payment of any costs, expenses or liabilities of   
the Trust, other than obligations of the Trust to pay to the holders of any     
Trust Securities or other similar interests in the Trust of the amounts due     
such holders pursuant to the terms of the Trust Securities or such other        
similar interests, as the case may be.                                          

DESCRIPTION OF OLD SECURITIES 

The forms and terms of the Old Securities are identical in all material     
respects to the forms and terms of the New Securities, except that (i) the Old  
Securities have not been registered under the Securities Act, are subject to    
certain restrictions on transfer and are entitled to certain rights under the   
Registration Rights Agreement (which rights will terminate upon consummation    
of the Exchange Offer, except under limited circumstances); (ii) the New        
Capital Securities will not provide for any increase in the Distribution rate   
thereon; and (iii) the New Junior Subordinated Debentures will not provide for  
any increase in the interest rate thereon. The Old Securities provide that, in  
the event that the Exchange Offer is not consummated on or prior to August 11,  
1997, or, in certain limited circumstances, in the event a shelf registration   
statement (the "Shelf Registration Statement") with respect to the resale of    
the Old Capital Securities is not declared effective on or prior to August 11,  
1997, then interest will accrue (in addition to the stated interest rate on     
the Junior Subordinated Debentures) at the rate of 0.25% per annum on the       
principal amount of the Junior Subordinated Debentures and Distributions will   
accumulate (in addition to the stated Distribution rate on the Capital          
Securities) at the rate of 0.25% per annum on the Liquidation Amount of the     
Capital Securities, for the period from the occurrence of such event until      
such time as the Exchange Offer is consummated or any required Shelf            
Registration Statement is effective. The New Securities are not, and upon       
consummation of the Exchange Offer the Old Securities will not be, entitled to  
any such additional interest or Distributions. Accordingly, holders of Old      
Capital Securities should review the information set forth under "Risk          
Factors--Certain Consequences of a Failure to Exchange Old Capital Securities"  
and "Description of Securities."                                                

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RELATIONSHIP AMONG THE CAPITAL SECURITIES, THE JUNIOR SUBORDINATED      

DEBENTURES, THE GUARANTEE AND THE EXPENSE AGREEMENT       

FULL AND UNCONDITIONAL GUARANTEE                                                

Payments of Distributions and other amounts due on the Capital Securities   
(to the extent the Trust has funds available for the payment of such            
Distributions) are and will continue to be irrevocably guaranteed by the        
Company as and to the extent set forth under "Description of Securities--       
Description of Guarantee." Taken together, the Company's obligations under the  
Junior Subordinated Debentures, the Indenture, the Trust Agreement, the         
Expense Agreement, the Guarantee Agreement and the Guarantee provide, in the    
aggregate, a full, irrevocable and unconditional guarantee of payments of       
Distributions and other amounts due on the Capital Securities. No single        
document standing alone or operating in conjunction with fewer than all of the  
other documents constitutes such guarantee. It is only the combined operation   
of these documents that provides a full, irrevocable and unconditional          
guarantee of the Trust's obligations under the Capital Securities. If and to    
the extent that the Company does not make payments on the Junior Subordinated   
Debentures, the Trust will not pay Distributions or other amounts due on the    
Capital Securities. The Guarantee does not cover payment of Distributions when  
the Trust does not have sufficient funds to pay such Distributions. In such     
event, the remedy of a holder of Capital Securities is to institute a Direct    
Action. The obligations of the Company under the Guarantee are subordinate and  
junior in right of payment to all liabilities of the Company to the extent and  
in the manner set forth in the Guarantee Agreement.                             

SUFFICIENCY OF PAYMENTS                                                         

As long as payments of interest and other payments are made when due on the 
Junior Subordinated Debentures, such payments will be sufficient to cover       
Distributions and other payments due on the Capital Securities, primarily       
because (i) the aggregate principal amount of the Junior Subordinated           
Debentures will be equal to the sum of the aggregate Liquidation Amount or      
Redemption Price, as applicable, of the Capital Securities and Common           
Securities; (ii) the interest rate and interest and other payment dates on the  
Junior Subordinated Debentures will match the Distribution rate and             
Distribution and other payment dates for the Trust Securities; (iii) under the  
Expense Agreement, the Company shall pay for all and any costs, expenses and    
liabilities of the Trust except the Trust's obligations to holders of Trust     
Securities under such Trust Securities; and (iv) the Trust Agreement further    
provides that the Trust will not engage in any activity that is not consistent  
with the limited purposes thereof.                                              

ENFORCEMENT RIGHTS OF HOLDERS OF CAPITAL SECURITIES                             

A holder of any Capital Security may institute a legal proceeding directly  
against the Company to enforce its rights under the Guarantee without first     
instituting a legal proceeding against the Guarantee Trustee, the Trust or any  
other person or entity.                                                         

A default or event of default under any Senior Indebtedness would not       
constitute a default or Event of Default under the Trust Agreement. However,    
in the event of payment defaults under, or acceleration of, Senior              
Indebtedness, the subordination provisions of the Indenture provide that no     
payments may be made in respect of the Junior Subordinated Debentures until     
such Senior Indebtedness has been paid in full or any payment default           
thereunder has been cured or waived. Failure to make required payments on       
Junior Subordinated Debentures would constitute an Event of Default under the   
Trust Agreement.                                                                

LIMITED PURPOSES OF THE TRUST                                                   

The Capital Securities evidence an undivided beneficial interest in the     
assets of the Trust, and the Trust exists for the exclusive purposes of         
issuing and selling the Trust Securities, using the proceeds from the sale of   
the Common Securities and Old Capital Securities to acquire the Old Junior      
Subordinated Debentures and exchanging the Old Junior Subordinated Debentures   
for New Junior Subordinated Debentures in the Exchange Offer pursuant to the    
Indenture, and engaging in only those other activities necessary, convenient    
or incidental                                                                   

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thereto (such as registering the transfer of Capital Securities). A principal   
difference between the rights of a holder of a Capital Security and a holder    
of a Junior Subordinated Debenture is that a holder of a Junior Subordinated    
Debenture is entitled to receive from the Company the principal amount of and   
interest accrued on Junior Subordinated Debentures held, while a holder of      
Capital Securities is entitled to receive Distributions from the Trust (or      
from the Company under the Guarantee) if and to the extent the Trust has funds  
available for the payment of such Distributions.                                

RIGHTS UPON TERMINATION                                                         

Upon any voluntary or involuntary termination, winding-up or liquidation of 
the Trust involving the liquidation of the Junior Subordinated Debentures,      
after satisfaction of liabilities to creditors as required by applicable law,   
the holders of the Trust Securities will be entitled to receive, out of assets  
held by the Trust, the Liquidation Distribution in cash. See "Description of    
Securities--Description of Capital Securities--Liquidation of the Trust and     
Distribution of Junior Subordinated Debentures." Upon any voluntary or          
involuntary liquidation or bankruptcy of the Company, the Property Trustee, as  
holder of the Junior Subordinated Debentures, would be a subordinated creditor  
of the Company, subordinated in right of payment to all Senior Indebtedness as  
set forth in the Indenture, but entitled to receive payment in full of          
principal and interest, before any stockholders of the Company receive          
payments or distributions. Since the Company is the guarantor under the         
Guarantee and has agreed under the Expense Agreement to pay for all costs,      
expenses and liabilities of the Trust (other than the Trust's obligations to    
the holders of its Trust Securities), the positions of a holder of Capital      
Securities and a holder of Junior Subordinated Debentures relative to other     
creditors and to stockholders of the Company in the event of liquidation or     
bankruptcy of the Company are expected to be substantially the same.            

CERTAIN FEDERAL INCOME TAX CONSEQUENCES 

The following is a summary of the principal United States federal income tax
consequences of the purchase, ownership and disposition of Capital Securities   
to beneficial owners thereof ("Securityholders"). This summary does not         
address all tax consequences that may be applicable to Securityholders, nor     
does it address the tax consequences to (i) persons that may be subject to      
special treatment under United States federal income tax law, such as banks,    
insurance companies, thrift institutions, regulated investment companies, real  
estate investment trusts, tax-exempt organizations and dealers in securities    
or currencies, (ii) persons that will hold 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, (iii)        
persons whose functional currency is not the United States dollar or (iv)       
persons that do not hold Capital Securities as capital assets.                  

The statements of law or legal conclusion set forth in this summary         
constitute the opinion of Sidley & Austin, counsel to the Company and the       
Trust. Such opinion has not been confirmed by the Internal Revenue Service, by  
private ruling or otherwise, and is not binding on the Internal Revenue         
Service or the courts. This summary is based upon the Internal Revenue Code of  
1986, as amended (the "Code"), Treasury Regulations promulgated thereunder,     
Internal Revenue Service rulings and pronouncements and judicial decisions now  
in effect, all of which are subject to change at any time. Such changes may be  
applied retroactively in a manner that could cause the tax consequences to      
vary substantially from the consequences described below, possibly affecting a  
beneficial owner of Capital Securities adversely. In particular, legislation    
has been proposed that could affect adversely the Company's ability to deduct   
interest on the Junior Subordinated Debentures, which may in turn permit the    
Company to cause a redemption of the Capital Securities. See "--Possible Tax    
Law Changes." The authorities on which this summary is based are subject to     
various interpretations, and it is therefore possible that the federal income   
tax treatment of the purchase, ownership and disposition of Capital Securities  
may differ from the treatment described below.                                  

HOLDERS OF CAPITAL SECURITIES ARE ADVISED TO CONSULT WITH THEIR OWN TAX     
ADVISORS IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE FEDERAL TAX   
CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF CAPITAL SECURITIES,  
AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.                  

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EXCHANGE OF OLD CAPITAL SECURITIES FOR NEW CAPITAL SECURITIES                   

Under current United States federal income tax law, the exchange of Old     
Capital Securities for New Capital Securities pursuant to the Exchange Offer    
will not be a taxable event to Securityholders. The New Capital Securities      
will be treated as a continuation of the Old Capital Securities. Accordingly,   
a Securityholder will have the same adjusted tax basis and holding period in    
the New Capital Securities that such Securityholder had in the Old Capital      
Securities exchanged therefor.                                                  

CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES                            

In connection with the issuance of the Old Capital Securities, Sidley &     
Austin has rendered its opinion to the effect that, under then-current law and  
assuming compliance with the Indenture, and based on certain facts and          
assumptions contained in such opinion, the Junior Subordinated Debentures held  
by the Trust will be classified for United States federal income tax purposes   
as indebtedness of the Company.                                                 

CLASSIFICATION OF THE TRUST                                                     

In connection with the issuance of the Old Capital Securities, Sidley &     
Austin has rendered its opinion to the effect that, under then-current law and  
assuming compliance with the terms of the Trust Agreement, and based on         
certain facts and assumptions contained in such opinion, the Trust will be      
classified as a grantor trust and not as an association taxable as a            
corporation for United States federal income tax purposes. As a result, each    
Securityholder will be treated as owning an undivided beneficial interest in    
the Junior Subordinated Debentures. By its acceptance of a Capital Security,    
each Securityholder agrees to treat such Capital Security consistently with     
the foregoing opinions. Accordingly, each Securityholder will be required to    
include in its gross income its pro rata share of income on the Junior          
Subordinated Debentures. See "--Interest Income and Original Issue Discount."   
No amount included in income with respect to the Capital Securities will be     
eligible for the dividends-received deduction.                                  

INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT                                     

The Company has the option, under the terms of the Junior Subordinated      
Debentures, to defer payments of interest by extending interest payment         
periods for up to ten consecutive semi-annual periods. See "Description of      
Securities--Description of Junior Subordinated Debentures--Option to Defer      
Interest Payments." Under Treasury Regulations, this option should cause        
stated interest payments on the Junior Subordinated Debentures to be treated    
as original issue discount ("OID") and the Company intends to so treat the      
Junior Subordinated Debentures. Holders of debt instruments issued with OID     
must include that discount in income on an economic accrual basis before the    
receipt of cash attributable to the discount, regardless of their method of     
tax accounting. Generally, all of a Securityholder's taxable interest income    
with respect to the Junior Subordinated Debentures will be accounted for as     
OID, and actual distributions of stated interest will not be reported           
separately as taxable income. The amount of OID that accrues in any semi-       
annual period will approximately equal the amount of the interest that accrues  
on the Junior Subordinated Debentures in that period at the stated interest     
rate. In the event that the interest payment period is extended,                
Securityholders will continue to accrue OID approximately equal to the amount   
of the interest payment due at the end of the extended interest payment period  
on an economic accrual basis over the length of the extended interest period.   
Under recently issued Treasury Regulations, it is possible that the Junior      
Subordinated Debentures could be considered to have terms and conditions that   
make the likelihood of the Company's deferring the payment of interest a        
"remote contingency" for purposes of the OID rules. In that event, (a) the      
Junior Subordinated Debentures would not be subject to the OID rules at the     
time of their original issuance, (b) a Securityholder would include its share   
of interest on the Junior Subordinated Debentures in income in accordance with  
such holder's regular method of tax accounting and (c) if the Company were to   
defer the payment of interest, the Junior Subordinated Debentures would         
generally become subject to the OID rules described above.                      

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MARKET DISCOUNT AND PREMIUM                                                     

Securityholders that did not acquire their interest in the Capital          
Securities pursuant to an acquisition of Old Capital Securities on their        
original issue at their original offering price or pursuant to an exchange of   
such Old Capital Securities for New Capital Securities pursuant to the          
Exchange Offer may be considered to have acquired their undivided interest in   
the Junior Subordinated Debentures with market discount, amortizable bond       
premium or acquisition premium as such terms are defined for United States      
federal income tax purposes. Such Securityholders are advised to consult their  
tax advisors as to the income tax consequences of the acquisition, ownership    
and disposition of the Capital Securities.                                      

DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES TO HOLDERS OF CAPITAL            
SECURITIES                                                                      

A distribution by the Trust of the Junior Subordinated Debentures as        
described under the caption "Description of Securities--Description of Capital  
Securities--Liquidation of the Trust and Distribution of Junior Subordinated    
Debentures" is conditioned on receipt by the Company of an opinion of counsel   
to the effect that such distribution will not be a taxable event to             
Securityholders for United States federal income tax purposes. Under current    
United States federal income tax law, such a distribution would not be a        
taxable event to Securityholders and such a distribution would result in a      
Securityholder's receiving directly its pro rata share of the Junior            
Subordinated Debentures previously held indirectly through the Trust, with a    
holding period and aggregate tax basis equal to the holding period and          
aggregate tax basis such Securityholder had in its Capital Securities before    
such distribution. A Securityholder would recognize interest income in respect  
of Junior Subordinated Debentures received from the Trust in the manner         
described above under "--Interest Income and Original Issue Discount."          

SALES OR REDEMPTIONS OF CAPITAL SECURITIES                                      

Gain or loss will be recognized by a Securityholder on a sale of Capital    
Securities (including a redemption for cash) in an amount equal to the          
difference between the amount realized (which for this purpose, will exclude    
amounts attributable to accrued interest or OID not previously included in      
income) and the Securityholder's adjusted tax basis in the Capital Securities   
sold (or so redeemed). Gain or loss recognized by a Securityholder on Capital   
Securities held for more than one year will generally be taxable as long-term   
capital gain or loss. Amounts attributable to accrued interest with respect to  
a Securityholder's pro rata share of the Junior Subordinated Debentures not     
previously included in income will be taxable as ordinary income.               

BACKUP WITHHOLDING TAX AND INFORMATION REPORTING                                

The Trust will report the interest and original issue discount that accrued 
during the year with respect to the Junior Subordinated Debentures, and any     
gross proceeds received by the Trust from the retirement or redemption of the   
Junior Subordinated Debentures, annually to the holders of record of the        
Capital Securities and the Internal Revenue Service. The Trust currently        
intends to deliver such reports to holders of record prior to January 31        
following each calendar year. It is anticipated that persons who hold Capital   
Securities as nominees for beneficial owners will report the required tax       
information to beneficial owners on Form 1099.                                  

Payments made on, and proceeds from the sale of, Capital Securities may be  
subject to a "backup" withholding tax of 31% unless the Securityholder          
complies with certain identification requirements. Any withheld amounts will    
generally be allowed as a credit against the Securityholder's federal income    
tax, provided the required information is timely filed with the Internal        
Revenue Service.                                                                

UNITED STATES ALIEN SECURITYHOLDERS                                             

For purposes of this discussion, a United States Alien Securityholder is any
Securityholder that is a corporation, individual, partnership, estate or trust  
that, for United States federal income tax purposes, is a foreign corporation,  
a non-resident alien individual, a foreign partnership or a foreign estate or   
trust. This discussion assumes that income with respect to the Capital          
Securities is not effectively connected with a trade or business in the United  
States in which the United States Alien Securityholder is engaged.              

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Under current United States federal income tax law:                         

(i) payments by the Trust or any of its paying agents to any United     
States Alien Securityholder generally will not be subject to withholding or 
other United States federal income tax, provided that, in the case of       
payments with respect to interest (including OID), (a) the United States    
Alien Securityholder does not actually or constructively own 10% or more of 
the total combined voting power of all classes of stock of the Company      
entitled to vote, (b) the United States Alien Securityholder is not a       
controlled foreign corporation that is related to the Company through stock 
ownership, and (c) either (A) the United States Alien Securityholder        
certifies to the Trust or its agent, under penalties of perjury, that it is 
a United States Alien Securityholder and provides its name and address or   
(B) a securities clearing organization, bank or other financial institution 
that holds customers' securities in the ordinary course of its trade or     
business (a "Financial Institution") and holds the Capital Securities in    
such capacity certifies to the Trust or its agent under penalties of        
perjury that such statement has been received from the United States Alien  
Securityholder by it or by a Financial Institution between it and the       
United States Alien Securityholder and furnishes the Trust or its agent     
with a copy thereof; and                                                    

(ii) a United States Alien Securityholder generally will not be subject 
to withholding or other United States federal income tax on any gain        
realized upon the sale or other disposition of Capital Securities.          

POSSIBLE TAX LAW CHANGES                                                        

On February 6, 1997, President Clinton's budget proposal for fiscal year    
1998 was released. Included in the budget proposal is a provision which, if     
enacted, would generally treat instruments such as the Junior Subordinated      
Debentures as equity for United States federal income tax purposes if the       
instruments (i) have a maximum term of more than 15 years and (ii) are not      
shown as indebtedness on the separate balance sheet of the issuer. The          
provision is proposed to be effective generally for instruments issued on or    
after the date of first committee action by Congress. As of the date hereof,    
no such action has been taken. If the provision applied to the Junior           
Subordinated Debentures, among other things, the Company would be unable to     
deduct interest on the Junior Subordinated Debentures for United States         
federal income tax purposes. A similar provision was included in President      
Clinton's budget proposal for fiscal year 1997, but the 104th Congress          
adjourned without taking action on such provision. There can be no assurance    
that the current budget provision or future legislative proposals, future       
regulations or official administrative pronouncements or future judicial        
decisions will not affect the ability of the Company to deduct interest on the  
Junior Subordinated Debentures. Such a change could give rise to a Tax Event,   
which may permit the Company to cause a redemption of the Capital Securities.   
See "Description of Securities--Description of Capital Securities--Redemption"  
and "Description of Securities--Description of Junior Subordinated              
Debentures--Tax Event or Investment Company Event Prepayment." Such a tax law   
change would not alter the United States federal income tax consequences of     
the purchase, ownership and disposition of Capital Securities to                
Securityholders.                                                                

ERISA CONSIDERATIONS  
GENERAL                                                                         

A fiduciary of an employee benefit plan subject to Title I of ERISA should  
consider fiduciary standards under ERISA in the context of the particular       
circumstances of such plan before authorizing an investment in the Capital      
Securities. Such fiduciary should consider whether the investment satisfies     
ERISA's diversification and prudence requirements, whether the investment       
constitutes unauthorized delegation of fiduciary authority and whether the      
investment is in accordance with the documents and instruments governing the    
plan. In addition, ERISA and the Code prohibit a wide range of transactions     
("Prohibited Transactions") involving the assets of a plan subject to ERISA or  
the assets of an individual retirement account or plan subject to Section 4975  
of the Code (hereinafter an "ERISA Plan") and persons who have certain          
specified relationships to the ERISA Plan ("parties in interest," within the    
meaning of ERISA, and "disqualified persons," within the meaning of the Code).  
Such transactions may require "correction" and may cause the ERISA Plan         
fiduciary to incur certain liabilities and the parties in interest or           
disqualified persons to be subject to excise taxes.                             

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The acquisition of any Capital Security by any person who is using for such 
acquisition the assets of an ERISA Plan shall constitute a representation by    
such person to the Company that (i) if the Company is a "party in interest" or  
a "disqualified person" with respect to such ERISA Plan, then such security is  
being acquired pursuant to an exemption from the Prohibited Transaction rules   
under ERISA and the Code, and (ii) the Company is not a "fiduciary," within     
the meaning of Section 3(21) of ERISA and the regulations thereunder, with      
respect to such person's interest in the Capital Securities or the Junior       
Subordinated Debentures.                                                        

Governmental plans and certain church plans (each as defined under ERISA)   
are not subject to the Prohibited Transaction rules. Such plans may, however,   
be subject to federal, state or local laws or regulations which may affect      
their investment in the Capital Securities. Any fiduciary of such a             
governmental or church plan considering an investment in the Capital            
Securities should determine the need for, and the availability, if necessary,   
of any exemptive relief under such laws or regulations.                         

THE DISCUSSION HEREIN OF ERISA IS GENERAL IN NATURE AND IS NOT INTENDED TO  
BE ALL INCLUSIVE. ANY FIDUCIARY OF AN ERISA PLAN, GOVERNMENTAL PLAN OR CHURCH   
PLAN CONSIDERING AN INVESTMENT IN THE CAPITAL SECURITIES SHOULD CONSULT WITH    
ITS LEGAL ADVISORS REGARDING THE CONSEQUENCES OF SUCH INVESTMENT.               

PROHIBITED TRANSACTIONS                                                         

The Company may be a party in interest or a disqualified person with respect
to an ERISA Plan investing in the Capital Securities, and, therefore, such      
investments by an ERISA Plan may give rise to a Prohibited Transaction.         
Consequently, before investing in the Capital Securities, any person who is,    
or who in acquiring such securities is using the assets of, an ERISA Plan       
should determine that either a statutory or an administrative exemption from    
the Prohibited Transaction rules discussed below or otherwise available is      
applicable to such person's investment in the Capital Securities, or that its   
investment in such securities will not result in a Prohibited Transaction.      

Certain statutory or administrative exemptions from the Prohibited          
Transaction rules under ERISA and the Code may be available to an ERISA Plan    
which is investing in the Capital Securities. Included among these exemptions   
are: Prohibited Transaction Class Exemption ("PTCE") 90-1, regarding            
investments by insurance company pooled separate accounts; PTCE 91-38,          
regarding investments by bank collective investment funds; PTCE 84-14,          
regarding transactions effected by qualified professional asset managers; PTCE  
96-23, regarding transactions effected by in-house asset managers; or PTCE 95-  
60, regarding investments by insurance company general accounts.                

TRUST ASSETS AS "PLAN ASSETS"                                                   

The Department of Labor has issued final regulations (the "Labor            
Regulations") as to what constitutes assets of an employee benefit plan ("plan  
asset") under ERISA. The Labor Regulations provide that, as a general rule,     
when an ERISA Plan acquires an equity interest in an entity and such interest   
does not represent a "publicly offered security" nor a security issued by an    
investment company registered under the Investment Company Act of 1940, the     
ERISA Plan's assets include both the equity interest and an undivided interest  
in each of the underlying assets of the entity, unless it is established        
either that the entity is an operating company or that equity participation in  
the entity by "benefit plan investors" is not "significant." For purposes of    
the Labor Regulations, the Trust will not be an investment company nor an       
operating company and the Old Capital Securities will not constitute a          
"publicly offered security." As discussed below, at the time of the Exchange    
Offer, the New Capital Securities may qualify as "publicly offered securities"  
for purposes of the Labor Regulations, but such result cannot be assured.       

Under the Labor Regulations, equity participation by benefit plan investors 
will not be considered "significant" on any date only if, immediately after     
the most recent acquisition of Capital Securities, the aggregate interest in    
the Capital Securities held by benefit plan investors will be less than 25% of  
the value of the Capital Securities. Although it is possible that the equity    
participation by benefit plan investors on any date                             

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will not be "significant" for purposes of the Labor Regulations, such result    
cannot be assured. Consequently, if ERISA Plans or investors using plan assets  
of ERISA plans purchase the Capital Securities, the Trust's assets could be     
deemed to be "plan assets" of such ERISA Plans for purposes of the fiduciary    
responsibility provisions of ERISA and the Code. Under ERISA, any person who    
exercises any authority or control respecting the management or disposition of  
the assets of an ERISA Plan is considered to be a fiduciary of such ERISA       
Plan. For example, the Property Trustee could therefore become a fiduciary of   
the ERISA Plans that invest in the Capital Securities and be subject to the     
general fiduciary requirements of ERISA in exercising its authority with        
respect to the management of the assets of the Trust. However, the Property     
Trustee will have only limited discretionary authority with respect to the      
Trust's assets and the remaining functions and responsibilities performed by    
the Property Trustee will be for the most part custodial and ministerial in     
nature. Inasmuch as the Property Trustee or another person with authority or    
control respecting the management or disposition of the Trust assets may        
become a fiduciary with respect to the ERISA Plans that will purchase the       
Capital Securities, there may be an improper delegation by such ERISA Plans of  
the responsibility to manage plan assets.                                       

The New Capital Securities may qualify as "publicly offered securities"     
under the Labor Regulations if, in addition to such distribution and            
registration, at the time of the Exchange Offer they are also "widely held"     
and "freely transferable." Under the Labor Regulations, a class of securities   
is "widely held" only if it is a class of securities that is owned by 100 or    
more investors independent of the issuer and of one another. Although it is     
possible that at the time of the Exchange Offer the New Capital Securities      
will be "widely held," such result cannot be assured. Whether a security is     
"freely transferable" for purposes of the Labor Regulations is a factual        
question to be determined on the basis of all relevant facts and                
circumstances. If, at the time of the Exchange Offer, the New Capital           
Securities qualify as "publicly offered securities," the assets of the Trust    
should not be "plan assets" as of such time. If, at the time of the Exchange    
Offer, the New Capital Securities do not qualify as "publicly offered           
securities," the "plan asset" considerations discussed in the immediately       
preceding paragraph in connection with the Capital Securities could also be     
applicable in connection with the investment by ERISA Plans or investors'       
using plan assets of ERISA Plans in the New Capital Securities.                 

PLAN OF DISTRIBUTION  

The Company and the Trust will require each broker-dealer who tenders,      
pursuant to the Exchange Offer, Old Capital Securities that were acquired for   
its own account as the result of market-making activities or other trading      
activities to acknowledge that it will deliver a prospectus meeting the         
requirements of the Securities Act in connection with any resale of New         
Capital Securities received in exchange for such Old Capital Securities         
pursuant to the Exchange Offer. The Company and the Trust believe that          
Participating Broker-Dealers may fulfill their prospectus delivery requirement  
in connection with resales of New Capital Securities received in exchange for   
Old Capital Securities that were acquired by such Participating Broker-Dealer   
for its own account as a result of market-making activities or other trading    
activities with this Prospectus, as it may be amended or supplemented from      
time to time, during the 90-day period referred to below. The Company has       
agreed that this Prospectus, as it may be amended or supplemented from time to  
time, may be used by a Participating Broker-Dealer in connection with resales   
of such New Capital Securities for a period ending 90 days after the            
Expiration Date (subject to extension under certain limited circumstances       
described herein) or, if earlier, when all such New Capital Securities have     
been disposed of by such Participating Broker-Dealer. See "The Exchange         
Offer--Resales of New Capital Securities." The Company will not receive any     
cash or other proceeds from the issuance of the New Capital Securities offered  
hereby. New Capital Securities received by broker-dealers for their own         
accounts in connection with the Exchange Offer may be sold from time to time    
in one or more transactions in the over-the-counter market, in negotiated       
transactions, through the writing of options on the New Capital Securities or   
a combination of such methods of resale, at market prices prevailing at the     
time of resale, at prices related to such prevailing market prices or at        
negotiated prices. Any such resale may be made directly to purchasers or to or  
through brokers or dealers who may receive compensation in the form of          
commissions or concessions from any such broker-dealer and/or the purchasers    
of any such New Capital Securities. Any broker-dealer that resells New Capital  
Securities that were received by it for its own account in connection with the  

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Exchange Offer and any broker or dealer that participates in a distribution of  
such New Capital Securities may be deemed to be an "underwriter" within the     
meaning of the Securities Act, and any profit on any such resale of New         
Capital Securities and any commissions or concessions received by any such      
persons may be deemed to be underwriting compensation under the Securities      
Act. The Letter of Transmittal states that by acknowledging that it will        
deliver and by delivering a prospectus, a broker-dealer will not be deemed to   
admit that it is an "underwriter" within the meaning of the Securities Act.     

VALIDITY OF SECURITIES  

Certain matters of Delaware law relating to the validity of the New Capital 
Securities and the creation of the Trust have been passed upon by Richards,     
Layton & Finger, P.A., Wilmington, Delaware, special Delaware counsel to the    
Company and the Trust. The validity of the New Guarantee and the New Junior     
Subordinated Debentures have been passed upon for the Company by Sidley &       
Austin, Chicago, Illinois. Certain matters relating to United States federal    
income tax considerations have been passed upon for the Company by Sidley &     
Austin, Chicago, Illinois.                                                      

EXPERTS 

The consolidated financial statements and schedules of the Company, included
in and incorporated by reference in the Company's Annual Report (Form 10-K)     
for the year ended December 31, 1996, have been audited by Ernst & Young LLP,   
independent auditors, as set forth in their reports thereon included and        
incorporated by reference therein and incorporated herein by reference. Such    
consolidated financial statements and schedules are incorporated herein by      
reference in reliance upon such reports given upon the authority of such firm   
as experts in accounting and auditing.                                          

The financial statements and schedules of Alexander & Alexander as of       
December 31, 1995 and 1994 and for each of the three years in the period ended  
December 31, 1995 included in the Company's Current Report (Form 8-K) dated     
January 15, 1997 and incorporated by reference in this Prospectus have been     
audited by Deloitte & Touche LLP, independent auditors, as stated in their      
reports incorporated by reference in this Prospectus. Such financial            
statements and schedules are incorporated herein by reference in reliance upon  
such reports given upon the authority of such firm as experts in accounting     
and auditing.                                                                   

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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY  
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR IN-    
CORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE    
BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS   
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE TRUST.  
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UN-   
DER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN     
THE AFFAIRS OF THE COMPANY OR THE TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS  
DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN   
WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAK-  
ING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM   
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.                              

----------------- 

TABLE OF CONTENTS 

                                                                [Download Table]

                                                                           PAGE
                                                                           ----
                                                                               
Available Information.....................................................   6 
Incorporation of Certain Documents by Reference...........................   6 
Summary...................................................................   8 
Risk Factors..............................................................  18 
Use of Proceeds from the Sale of Old Capital Securities...................  23 
Aon Capital A.............................................................  24 
Aon Corporation...........................................................  25 
Acquisition of Alexander & Alexander......................................  25 
Pro Forma Consolidated Financial Information..............................  26 
Ratios of Earnings to Fixed Charges.......................................  33 
Accounting Treatment for the Trust........................................  34 
The Exchange Offer........................................................  34 
 Description of Securities................................................  43 
 Description of Capital Securities........................................  43 
 Description of Junior Subordinated Debentures............................  54 
 Description of Guarantee.................................................  63 
Description of Old Securities.............................................  66 
Relationship Among the Capital Securities, the Junior Subordinated             
 Debentures, the Guarantee and the Expense Agreement......................  67 
Certain Federal Income Tax Consequences...................................  68 
ERISA Considerations......................................................  71 
Plan of Distribution......................................................  73 
Validity of Securities....................................................  74 
Experts...................................................................  74 

UNTIL JULY 2, 1997, ALL DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SE-
CURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED    
TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATIONS OF DEALERS TO   
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UN-  
SOLD ALLOTMENT OR SUBSCRIPTIONS.                                                

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AON CAPITAL A 

OFFER TO EXCHANGE ITS 
8.205% CAPITAL SECURITIES WHICH 
HAVE BEEN REGISTERED UNDER THE  
SECURITIES ACT OF 1933 FOR ANY  
AND ALL OF ITS OUTSTANDING 8.205% 
CAPITAL SECURITIES  

(LIQUIDATION AMOUNT $1,000  
PER CAPITAL SECURITY) 
FULLY AND UNCONDITIONALLY 
GUARANTEED, AS DESCRIBED HEREIN,  
BY AON CORPORATION  

----------------- 

PROSPECTUS  

----------------- 

MARCH 28, 1997      

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Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘424B3’ Filing		Date		First		Last			Other Filings
		1/1/28		46
		1/1/27		2		58
		1/1/98		58
		8/12/97		22		34
		8/11/97		22		66
		7/2/97		75
		7/1/97		3		55
		5/14/97		17		32
		5/5/97		1		35
		5/1/97		17		32
		4/28/97		7
Filed on:		4/4/97
		3/28/97		1		75
		3/21/97		17		32
		2/20/97		9		25
		2/6/97		23		71			S-4
		2/4/97		15		53
		1/17/97		9		25			SC 14F1
		1/15/97		6		74			8-K,  8-K/A,  SC 13D/A,  SC 14D1/A
		1/14/97		8		25
		1/13/97		1		59
		1/1/97		2		44
		12/31/96		3		74			10-K
		12/11/96		9		25
		10/18/96		28		32
		9/30/96		9		62			10-Q
		12/31/95		26		74			10-K405,  11-K
		1/1/95		26
		12/31/94		74					10-K405,  11-K
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