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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 23, 1999
REGISTRATION NO.
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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BANK ONE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 31-0738296
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
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ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS, 60670, (312) 732-4000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
ROBERT A. ROSHOLT
CHIEF FINANCIAL OFFICER
BANK ONE CORPORATION
ONE FIRST NATIONAL PLAZA
CHICAGO, ILLINOIS 60670
(312) 732-3209
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
With Copies to:
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<S> <C>
LAURENCE GOLDMAN, ESQ. B. ROBBINS KIESSLING, ESQ.
BANK ONE CORPORATION CRAVATH, SWAINE & MOORE
ONE FIRST NATIONAL PLAZA WORLDWIDE PLAZA
CHICAGO, ILLINOIS 60670 825 EIGHTH AVENUE
NEW YORK, NEW YORK 10019
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement, subject to
market conditions and other factors.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1)(2)(3) PER UNIT(2) PRICE(1)(4) REGISTRATION FEE
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Debt securities...... 100%
Warrants to purchase Debt
Securities......... --
Foreign Currency
Warrants........... --
Stock Index Warrants... --
Other Warrants....... --
Preferred Stock(5)... $10,000,000,000 -- $10,000,000,000 $2,780,000
Depositary Shares
representing Preferred
Stock(6)........... --
Preferred Stock Warrants... --
Common Stock Warrants... --
Common Stock, $.01 par
value per share(7).. --
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</TABLE>
(1) In no event will the aggregate initial offering price of the securities
issued under this Registration Statement, and not previously registered
under the Securities Act of 1933, as amended (the "Act"), exceed
$10,000,000,000, or the equivalent thereof in one or more foreign currencies
or currency units.
(2) Or if any Debt Securities are issued at original issue discount, such
greater amount as may result in the initial offering prices for Debt
Securities and Warrants to purchase Debt Securities.
(3) This Registration Statement also serves to register such indeterminate
amount of securities that are to be offered and sold in connection with
market making activities by an affiliate of the Registrant.
(4) Estimated solely for the purpose of calculating the registration fee. Any
offering of Debt Securities or Warrants denominated in any foreign currency
or currency unit will be treated as the equivalent in U.S. dollars based on
the exchange rate applicable to the purchase of such Debt Securities or
Warrants from the Registrant. No separate consideration will be received for
Common Stock, Preferred Stock or Debt Securities that are issued upon
conversion or exchange of Debt Securities, Preferred Stock or Depositary
Shares registered hereunder.
(5) Including such indeterminate number of shares of Preferred Stock as may from
time to time be issued at indeterminate prices or issuable upon conversion
or exchange of Debt Securities or exercise of Warrants.
(6) To be evidenced by Depositary Receipts issued pursuant to a Deposit
Agreement, in the event the Registrant elects to offer to the public
fractional interests in shares of the Preferred Stock registered hereunder.
Depositary Receipts will be distributed to those persons purchasing such
fractional interests and the shares of the Preferred Stock will be issued to
the Depositary under the Deposit Agreement.
(7) Including such indeterminate number of shares of Common Stock as may from
time to time be issued (i) at indeterminate prices or (ii) upon exercise of
Warrants or conversion or exchange of Debt Securities or Preferred Stock to
the extent any of such Debt Securities or shares of Preferred Stock are, by
their terms convertible into Common Stock, registered hereunder.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
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<PAGE> 2
PROSPECTUS
[BANK ONE LOGO]
BANK ONE CORPORATION
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670
(312) 732-4000
$10,000,000,000
DEBT SECURITIES AND DEBT WARRANTS
CURRENCY WARRANTS, STOCK-INDEX WARRANTS AND OTHER WARRANTS
PREFERRED STOCK, DEPOSITARY SHARES AND PREFERRED STOCK WARRANTS
COMMON STOCK AND COMMON STOCK WARRANTS
From time to time, we may sell any of the following securities:
- DEBT SECURITIES which may be
-- senior or subordinated in priority of payment
-- convertible or exchangeable into other of our securities or the
securities of another issuer
- DEBT WARRANTS which would allow a buyer to purchase our debt securities
- CURRENCY WARRANTS which would allow a buyer to receive a cash payment
based on the difference in value between two currencies or currency units
- STOCK-INDEX WARRANTS which would allow a buyer to receive a cash payment
based on an increase or decrease in the level of a stock index
- OTHER WARRANTS which would allow a buyer to purchase government
securities, commodities or some other item or to receive a cash payment
based upon the increase or decrease of some index other than a stock
index
- PREFERRED STOCK which may be convertible into our common stock or
exchangeable for our debt securities
- DEPOSITARY SHARES which represent a fractional share of our preferred
stock
- PREFERRED STOCK WARRANTS which would allow a buyer to purchase our
preferred stock
- COMMON STOCK
- COMMON STOCK WARRANTS which would allow a buyer to purchase our common
stock
When we decide to sell a particular series of securities, we will prepare a
Prospectus Supplement describing such securities offering and the particular
terms of the securities. You should read this Prospectus and any Prospectus
Supplement carefully.
Our common stock is listed on the New York Stock Exchange under the trading
symbol "ONE".
One or more of our subsidiaries may buy and sell any of the securities
after the securities are issued as part of their business as a broker-dealer.
Those subsidiaries may use this Prospectus and the related Prospectus Supplement
in such transactions. Any such sale will be made at the prevailing market price
at the time of sale.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THE SECURITIES TO BE ISSUED UNDER THIS
PROSPECTUS OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR ADEQUATE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THESE SECURITIES ARE NOT
SAVINGS OR DEPOSIT ACCOUNTS OR OTHER OBLIGATIONS OF ANY BANK OR NONBANK
SUBSIDIARY OF BANK ONE CORPORATION, AND THEY ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE BANK INSURANCE FUND OR ANY OTHER GOVERNMENTAL
AGENCY.
------------------------------
THE DATE OF THIS PROSPECTUS IS FEBRUARY , 1999.
<PAGE> 3
ABOUT THIS PROSPECTUS
This Prospectus is part of a Registration Statement that we filed with the
Securities and Exchange Commission (the "Commission") utilizing a "shelf"
registration process. Under this shelf process, we may, from time to time over
approximately the next two years, sell any combination of the securities
described in this Prospectus in one or more offerings up to a total dollar
amount of $10,000,000,000 or the equivalent of this amount in foreign currencies
or foreign currency units.
This Prospectus provides you with a general description of the securities
we may offer. Each time we sell securities, we will provide a Prospectus
Supplement that will contain specific information about the terms of that
offering. The Prospectus Supplement may also add, update or change information
contained in this Prospectus. You should read both this Prospectus and any
Prospectus Supplement together with additional information described under the
heading "Where You Can Find More Information" beginning on page 2 of this
Prospectus.
You should rely only on the information provided in this Prospectus and in
any Prospectus Supplement including the information incorporated by reference.
We have not authorized anyone to provide you with different information. We are
not offering the securities in any state where the offer is not permitted. You
should not assume that the information in this Prospectus, or any supplement to
this Prospectus, is accurate at any date other than the date indicated on the
cover page of these documents.
WHERE YOU CAN FIND MORE INFORMATION
The Company has filed with the Commission a Registration Statement under
the Securities Act that registers the distribution of the securities (the
"Registration Statement"). The Registration Statement, including the attached
exhibits and schedules, contains additional relevant information about the
Company and the Company's securities. The rules and regulations of the
Commission allow us to omit certain information included in the Registration
Statement from this Prospectus.
In addition, we file reports, proxy statements and other information with
the Commission under the Exchange Act. Our predecessor corporations, BANC ONE
CORPORATION ("BANC ONE") and First Chicago NBD Corporation ("FCN"), filed
similar information with the Commission under the Exchange Act. You may read and
copy this information at the following locations of the SEC.
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Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois 60661-2511
</TABLE>
You may also obtain copies of this information by mail from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, at prescribed rates. You may obtain information on the
operation of the Public Reference Room by calling the Commission at 1-800-SEC-
0330.
The Commission also maintains an Internet world wide web site that contains
reports, proxy statements and other information about issuers, like the Company,
who file electronically with the Commission. The address of that site is
http://www.sec.gov.
You can also inspect reports, proxy statements and other information about
the Company, BANC ONE and FCN at the offices of the New York Stock Exchange, 20
Broad Street, New York, New York, and the Chicago Stock Exchange, 440 South
LaSalle Street, Chicago, Illinois.
The Commission allows us to "incorporate by reference" information into
this Prospectus. This means that we can disclose important information to you by
referring you to another document filed separately with the Commission. The
information incorporated by reference is considered to be a part of this
Prospectus, except for any information that is superseded by information that is
included directly in this document.
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This Prospectus incorporates by reference the documents listed below that
the Company, BANC ONE and FCN have previously filed with the Commission. They
contain important information about us and our predecessors.
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COMPANY SEC FILINGS PERIOD
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Current Reports of Form 8-K................................ Dated:
- October 2, 1998
- October 6, 1998, as amended by the Form 8K/A
filed October 16, 1998
- October 22, 1998
- November 13, 1998
- November 20, 1998
- December 16, 1998
- January 19, 1999
Registration Statement on Form S-4 (Registration No. Filed:
333-60313)............................................... - July 31, 1998
The description of the Company Common Stock set forth in Dated:
our Current Report on Form 8-K........................... - October 2, 1998
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BANC ONE SEC FILINGS PERIOD
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Annual Report on Form 10-K................................. Year ended December 31, 1997
Quarterly Reports on Form 10-Q............................. Quarters ended March 31, 1998 and
June 30, 1998
Current Reports on Form 8-K................................ Dated:
- January 26, 1998
- April 14, 1998, as amended by the Form 8-K/A
filed April 21, 1998, as amended by the Form
8-K/A filed May 19, 1998, as amended by the
Form 8-K/A filed August 17, 1998
- April 22, 1998
- July 21, 1998
- July 22, 1998
- July 24, 1998, as amended by a Form 8-K/A
filed August 11, 1998
- July 24, 1998
- August 28, 1998
- September 11, 1998
- September 17, 1998
</TABLE>
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FCN SEC FILINGS PERIOD
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Annual Report on Form 10-K................................. Year ended December 31, 1997
Quarterly Reports on Form 10-Q............................. Quarters ended March 31, 1998 and
June 30, 1998
Current Reports on Form 8-K................................ Dated:
- January 16, 1998
- February 17, 1998
- April 10, 1998
- April 13, 1998
- April 21, 1998
- May 19, 1998
- July 13, 1998
- August 17, 1998
- September 11, 1998
- September 15, 1998
</TABLE>
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The Company incorporates by reference additional documents that it may file
with the Commission between the date of this Prospectus and the termination of
the offering of the securities. These documents include periodic reports, such
as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K, as well as proxy statements.
You can obtain any of the documents incorporated by reference in this
document through us, or from the Commission through the Commission's web site at
the address described above. Documents incorporated by reference are available
from us without charge, excluding any exhibits to those documents unless the
exhibit is specifically incorporated by reference as an exhibit in this
Prospectus. You can obtain documents incorporated by reference in this
Prospectus by requesting them in writing or by telephone from us at the
following addresses:
Investor Relations
BANK ONE CORPORATION
One First National Plaza
Mail Suite 0460
Chicago, Illinois 60670
Telephone (312) 732-4812
If you request any incorporated documents from us, we will mail them to you
by first class mail, or another equally prompt means, within one business day
after we receive your request.
FORWARD-LOOKING STATEMENTS
This Prospectus (including information included or incorporated by
reference herein) contains certain forward-looking statements with respect to
the financial condition, results of operations, plans, objectives, future
performance and business of the Company and its predecessors, BANC ONE and FCN,
as well as certain information relating to the merger of BANC ONE and FCN to
form the Company, including, without limitation, statements relating to the cost
savings, revenue enhancement and restructuring charges estimated to result from
the merger and statements preceded by, followed by or that included the words
"believes," "expects," "anticipates," "estimates" or similar expressions. These
forward-looking statements involve certain risks and uncertainties. Actual
results may differ materially from those contemplated by such forward-looking
statements due to, among others, the following factors: (a) expected cost
savings and revenue enhancements from the merger may not be fully realized or
realized within the expected time frame; (b) revenues following the merger may
be lower than expected, or deposit attrition, operating costs or customer loss
and business disruption following the merger may be greater than expected; (c)
competitive pressures among depository and other financial institutions may
increase significantly; (d) costs or difficulties related to the integration of
the business of BANC ONE and FCN may be greater than expected; (e) changes in
the interest rate environment may reduce margins; (f) general economic or
business conditions, either nationally or in the states in which the Company is
doing business, may be less favorable than expected resulting in, among other
things, a deterioration in credit quality or a reduced demand for credit; (g)
legislative or regulatory changes may adversely affect the business in which the
Company is engaged; (h) technological changes (including the costs of
remediating or failing to remediate "Year 2000" and "Euro" data systems
compliance issues, including those of the Company and those of other persons by
whom the Company's business may be affected) may be more difficult or expensive
than anticipated; and (i) changes may occur in the securities and capital
markets.
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BANK ONE CORPORATION
BANK ONE CORPORATION (the "Company") is a multi-bank holding company
organized in 1998 under the laws of the State of Delaware to effect the merger,
effective October 2, 1998 (the "Merger"), of First Chicago NBD Corporation
("FCN") with BANC ONE CORPORATION ("BANC ONE").
Through its bank subsidiaries, the Company provides domestic retail
banking, worldwide corporate and institutional banking, and trust and investment
management services. The Company operates banking offices in Arizona, Colorado,
Florida, Illinois, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma,
Texas, Utah, West Virginia and Wisconsin. The Company also owns nonbank
subsidiaries that engage in businesses related to banking and finance, including
credit card and merchant processing, consumer and education finance, mortgage
lending and servicing, insurance, venture capital, investment and merchant
banking, trust, brokerage, investment management, leasing, community development
and data processing.
The Company is a legal entity separate and distinct from its affiliate
banks and its nonbank subsidiaries (collectively, the "affiliates").
Accordingly, the right of the Company, and thus the right of the Company's
creditors and shareholders, to participate in any distribution of the assets or
earnings of any affiliate is necessarily subject to the prior claims of
creditors of the affiliate except to the extent that claims of the Company in
its capacity as a creditor may be recognized. The principal sources of the
Company's revenues are dividends, interest on loans and fees from its
affiliates.
Like its predecessors, the Company continually evaluates its business
operations and organizational structures and routinely explores opportunities to
(i) acquire financial institutions and other financial services-related
businesses and assets, and (ii) enter into strategic alliances to expand the
scope of its services and its customer base. When consistent with its overall
business strategy, the Company also will sell assets or exit certain businesses
and markets.
The Company's executive offices are located at One First National Plaza,
Chicago, Illinois 60670, and the telephone number is (312) 732-4000.
RATIO OF EARNINGS TO FIXED CHARGES
The ratios of earnings to fixed charges for the Company, which are computed
on the basis of the total enterprise (as defined by the Commission) by dividing
earnings before fixed charges and income taxes by fixed charges, are set forth
below for the periods indicated. Also set forth below are the ratios of earnings
to combined fixed charges and preferred stock dividends, which are computed on
the basis of the total enterprise by dividing earnings before fixed charges and
income taxes by fixed charges and preferred stock dividend requirements for the
periods indicated. Fixed charges consist principally of interest expense on all
long- and short-term borrowings, excluding or including interest on deposits as
indicated.
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NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
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1997 1996 1995 1994 1998
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Earnings to Fixed Charges:
Excluding interest expense on deposits........... 2.4 2.6 2.2 2.6 2.6
Including interest expense on deposits........... 1.5 1.6 1.5 1.6 1.7
Earnings to Combined Fixed Charges and Preferred
Dividends:
Excluding interest expense on deposits........... 2.3 2.5 2.1 2.5 2.6
Including interest expense on deposits........... 1.5 1.6 1.5 1.6 1.7
</TABLE>
USE OF PROCEEDS
The Company currently intends to use the net proceeds from the sale of any
Securities for general corporate purposes, which may include the reduction of
its short-term indebtedness, investments at the holding company level,
investments in or extensions of credit to its affiliates and other banks and
companies engaged in other financial service activities, possible acquisitions
and such other purposes as may be stated in any Prospectus Supplement. Pending
such use, the Company may temporarily invest the net proceeds. The
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precise amounts and timing of the application of proceeds will depend upon the
funding requirements of the Company and its affiliates and the availability of
other funds. Except as may be described in any Prospectus Supplement, specific
allocations of the proceeds to such purposes will not have been made at the date
of such Prospectus Supplement. Based upon the historical and anticipated future
growth of the Company and the financial needs of its affiliates, the Company
anticipates that it will, on a recurrent basis, engage in additional financings
of a character and amount to be determined as the need arises.
REGULATORY MATTERS
The following discussion sets forth certain of the material elements of the
regulatory framework applicable to bank holding companies and their subsidiaries
and provides certain specific information relevant to the Company. This
regulatory framework is intended primarily for the protection of depositors and
the federal deposit insurance funds and not for the protection of security
holders. To the extent that the following information describes statutory and
regulatory provisions, it is qualified in its entirety by reference to those
provisions. A change in the statutes, regulations or regulatory policies
applicable to the Company or its subsidiaries may have a material effect on the
business of the Company.
GENERAL
As a bank holding company, the Company is subject to regulation under the
Bank Holding Company Act of 1956, as amended (the "BHCA"), and to inspection,
examination and supervision by the Board of Governors of the Federal Reserve
System (the "Federal Reserve"). Under the BHCA, bank holding companies generally
may not acquire the ownership or control of more than 5% of the voting shares or
substantially all the assets of any company, including a bank, without the
Federal Reserve's prior approval. In addition, bank holding companies generally
may engage, directly or indirectly, only in banking and such other activities as
are determined by the Federal Reserve to be closely related to banking.
Various governmental requirements, including Sections 23A and 23B of the
Federal Reserve Act, as amended, limit borrowings by the Company and its nonbank
subsidiaries from the Company's affiliate banks. These requirements also limit
various other transactions between the Company and its nonbank subsidiaries, on
the one hand, and the Company's affiliate banks, on the other. For example,
Section 23A limits to no more than 10% of its total capital the aggregate
outstanding amount of any bank's loans and other "covered transactions" with any
particular nonbank affiliate, and limits to no more than 20% of its total
capital the aggregate outstanding amount of any bank's covered transactions with
all of its nonbank affiliates. Section 23A also generally requires that a bank's
loans to its nonbank affiliates be secured, and Section 23B generally requires
that a bank's transactions with its nonbank affiliates be on arms' length terms.
Most of the Company's affiliate banks (the "Banks") are national banking
associations and, as such, are subject to regulation primarily by the Office of
the Comptroller of the Currency ("OCC") and, secondarily, by the Federal Deposit
Insurance Corporation ("FDIC") and the Federal Reserve. The Company's
state-chartered banks also are subject to regulation by the FDIC and the Federal
Reserve and, in addition, by their respective state banking departments. The
Company and its subsidiaries also are affected by the fiscal and monetary
policies of the federal government and the Federal Reserve, and by various other
governmental requirements and regulations.
LIABILITY FOR BANK SUBSIDIARIES
The Federal Reserve has a policy to the effect that a bank holding company
is expected to act as a source of financial and managerial strength to each of
its subsidiary banks and to maintain resources adequate to support each such
subsidiary bank. This support may be required at times when the Company may not
have the resources to provide it. In addition, Section 55 of the National Bank
Act, as amended, permits the OCC to order the pro rata assessment of
shareholders of a national bank whose capital has become impaired. If a
shareholder fails within three months to pay such an assessment, the OCC can
order the sale of the shareholder's stock to cover the deficiency. In the event
of a bank holding company's bankruptcy, any
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commitment by the bank holding company to a federal bank regulatory agency to
maintain the capital of a subsidiary bank would be assumed by the bankruptcy
trustee and entitled to priority of payment.
Any depository institution insured by the FDIC can be held liable for any
loss incurred, or reasonably expected to be incurred, by the FDIC in connection
with (i) the default of a commonly controlled FDIC-insured depository
institution or (ii) any assistance provided by the FDIC to a commonly controlled
FDIC-insured depository institution in danger of default. "Default" is defined
generally as the appointment of a conservator or receiver and "in danger of
default" is defined generally as the existence of certain conditions indicating
that a "default" is likely to occur in the absence of regulatory assistance. All
of the Company's subsidiary banks are FDIC-insured institutions. Also, in the
event that such a default occurred with respect to a bank, any capital loans to
the bank from its parent holding company would be subordinate in right of
payment to payment of the bank's depositors and certain of its other
obligations.
CAPITAL REQUIREMENTS
The Company is subject to capital requirements and guidelines imposed by
the Federal Reserve, which are substantially similar to the capital requirements
and guidelines imposed by the Federal Reserve, the OCC and the FDIC on the
depository institutions within their respective jurisdictions. For this purpose,
a depository institution's or holding company's assets and certain specified
off-balance sheet commitments are assigned to four risk categories, each
weighted differently based on the level of credit risk that is ascribed to such
assets or commitments. In addition, risk weighted assets are adjusted for
low-level recourse and market risk equivalent assets. A depository
institutions's or holding company's capital, in turn, is divided into three
tiers: core ("Tier 1") capital, which includes common equity, non-cumulative
perpetual preferred stock and a limited amount of cumulative perpetual preferred
stock and related surplus (excluding auction rate issues), and minority
interests in equity accounts of consolidated subsidiaries, less goodwill,
certain identifiable intangible assets and certain other assets; and
supplementary ("Tier 2") capital, which includes, among other items, perpetual
preferred stock not meeting the Tier 1 definition, mandatory convertible
securities, subordinated debt and allowances for loan and lease losses, subject
to certain limitations, less certain required deductions; and market risk ("Tier
3") capital, which includes qualifying unsecured subordinated debt.
The Company, like other bank holding companies, currently is required to
maintain Tier 1 and total capital (the sum of Tier 1, Tier 2 and Tier 3 capital)
equal to at least 4% and 8% of its total risk-weighted assets, respectively. At
September 30, 1998, the Company met both requirements, with Tier 1 and total
capital equal to 8.6% and 12.4% of its total risk-weighted assets, respectively.
The Federal Reserve, the FDIC and the OCC have adopted rules to incorporate
market and interest rate risk components into their risk-based capital
standards. Amendments to the risk-based capital requirements, incorporating
market risk, became effective January 1, 1998. Under the new market risk
requirements, capital will be allocated to support the amount of market risk
related to a financial institution's ongoing trading activities.
The Federal Reserve also requires bank holding companies to maintain a
minimum "leverage ratio" (Tier 1 capital to adjusted total assets) of 3%, if the
holding company has the highest regulatory rating or has implemented the
risk-based capital measures for market risk, or 4% if the holding company does
not meet these requirements. At September 30, 1998, the Company's leverage ratio
was 8.5%.
The Federal Reserve may set capital requirements higher than the minimums
noted above for holding companies whose circumstances warrant it. For example,
holding companies experiencing or anticipating significant growth may be
expected to maintain capital ratios including tangible capital positions well
above the minimum levels. The Federal Reserve has not, however, imposed any such
special capital requirement on the Company.
Each of the Banks is subject to similar risk-based and leverage capital
requirements adopted by its applicable federal banking agency. Each of the
Company's Banks was in compliance with the applicable minimum capital
requirements as of September 30, 1998.
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Failure to meet capital requirements could subject a bank to a variety of
enforcement remedies, including the termination of deposit insurance by the
FDIC, and to certain restrictions on its business, which are described below.
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), among other things, identifies five capital categories for insured
depository institutions (well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized and critically
undercapitalized) and requires the respective Federal regulatory agencies to
implement systems for "prompt corrective action" for insured depository
institutions that do not meet minimum capital requirements within such
categories. FDICIA imposes progressively more restrictive constraints on
operations, management and capital distributions, depending on the category in
which an institution is classified. Failure to meet the capital guidelines could
also subject a depository institution to capital raising requirements. An
"undercapitalized" depository institution must develop a capital restoration
plan and its parent holding company must guarantee that bank's compliance with
the plan. The liability of the parent holding company under any such guarantee
is limited to the lesser of 5% of the depository institution's assets at the
time it became "undercapitalized" or the amount needed to comply with the plan.
Furthermore, in the event of the bankruptcy of the parent holding company, such
guarantee would take priority over the parent's general unsecured creditors. In
addition, FDICIA requires the various regulatory agencies to prescribe certain
non-capital standards for safety and soundness relating generally to operations
and management, asset quality and executive compensation and permits regulatory
action against a financial institution that does not meet such standards.
As of December 31, 1998, each Bank was "well capitalized," based on the
"prompt corrective action" ratios and guidelines described above. It should be
noted, however, that a Bank's capital category is determined solely for the
purpose of applying the OCC's (or the FDIC's) "prompt corrective action"
regulations and that the capital category may not constitute an accurate
representation of the Bank's overall financial condition or prospects.
DIVIDEND RESTRICTIONS
Various federal and state statutory provisions limit the amount of
dividends the Company's affiliate banks can pay to the Company without
regulatory approval. Dividend payments by national banks are limited to the
lesser of (i) the level of undivided profits and (ii) absent regulatory
approval, an amount not in excess of net income for the current year combined
with retained net income for the preceding two years. Likewise, the approval of
the appropriate bank regulator is required for any dividend by a state-chartered
bank that is a member of the Federal Reserve System (a "state member bank") if
the total of all dividends declared by the bank in any calendar year would
exceed the total of its net profits, as defined by regulatory agencies, for such
year combined with its retained net profits for the preceding two years. In
addition, a state member bank may not pay a dividend in an amount greater than
its net profits then on hand. At September 30, 1998, $1.8 billion of the total
stockholders' equity of the affiliate banks was available for payment of
dividends to the Company without approval by the applicable regulatory
authority.
In addition, federal bank regulatory authorities have authority to prohibit
the Company's affiliate banks from engaging in an unsafe or unsound practice in
conducting their business. The payment of dividends, depending upon the
financial condition of the bank in question, could be deemed to constitute such
an unsafe or unsound practice. The ability of the Company's affiliate banks to
pay dividends in the future is currently, and could be further, influenced by
bank regulatory policies and capital guidelines.
DEPOSIT INSURANCE ASSESSMENTS
The deposits of each of the Company's affiliate banks are insured up to
regulatory limits by the FDIC and, accordingly, are subject to deposit insurance
assessments to maintain the Bank Insurance Fund ("BIF") and Savings Association
Insurance Fund ("SAIF") administered by the FDIC. The FDIC has adopted
regulations establishing a permanent risk-related deposit insurance assessment
system. Under this system, the FDIC places each insured bank in one of nine risk
categories based on (a) the bank's capitalization and
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(b) supervisory evaluations provided to the FDIC by the institution's primary
federal regulator. Each insured bank's insurance assessment rate is then
determined by the risk category in which it is classified by the FDIC.
Effective January 1, 1997, the annual insurance premiums on bank deposits
insured by the BIF and SAIF vary between $0.00 per $100 of deposits for banks
classified in the highest capital and supervisory evaluation categories to $0.27
per $100 of deposits for banks classified in the lowest capital and supervisory
evaluation categories.
The Deposit Insurance Funds Act of 1996 provides for assessments to be
imposed on insured depository institutions with respect to deposits insured by
the BIF and the SAIF (in addition to assessments currently imposed on depository
institutions with respect to BIF- and SAIF-insured deposits) to pay for the cost
of Financing Corporation ("FICO") funding. The FDIC established the FICO
assessment rates effective January 1, 1997 at $0.013 per $100 annually for
BIF-assessable deposits and $0.0648 per $100 annually for SAIF-assessable
deposits. The Company's affiliate banks held approximately $10.4 billion of
SAIF-assessable deposits as of September 30, 1998. The FICO assessments do not
vary depending upon a depository institution's capitalization or supervisory
evaluations.
DEPOSITOR PREFERENCE STATUTE
Federal legislation has been enacted providing that deposits and certain
claims for administrative expenses and employee compensation against an insured
depository institution would be afforded a priority over other general unsecured
claims against such institution, including federal funds and letters of credit,
in the "liquidation or other resolution" of the institution by any receiver.
BROKERED DEPOSITS
Under FDIC regulations, no FDIC-insured depository institution can accept
brokered deposits unless it (a) is well capitalized, or (b) is adequately
capitalized and receives a waiver from the FDIC. In addition, these regulations
prohibit any depository institution that is not well capitalized from (i) paying
an interest rate on deposits in excess of 75 basis points over certain
prevailing market rates or (ii) offering "pass through" deposit insurance on
certain employee benefit plan accounts unless it provides certain notice to
affected depositors.
INTERSTATE BANKING
Under the Riegle-Neal Interstate Banking and Branching Efficiency Act of
1994 ("Riegle-Neal"), subject to certain concentration limits and other
requirements, (a) bank holding companies such as the Company are permitted, to
acquire banks and bank holding companies located in any state; (b) any bank that
is a subsidiary of a bank holding company is permitted to receive deposits,
renew time deposits, close loans, service loans and receive loan payments as an
agent for any other bank subsidiary of that holding company; and (c) banks are
permitted to acquire branch offices outside their home states by merging with
out-of-state banks, purchasing branches in other states, and establishing de
novo branch offices in other states; provided that, in the case of any such
purchase or opening of individual branches, the host state has adopted
legislation "opting in" to those provisions of Riegle-Neal; and provided that,
in the case of a merger with a bank located in another state, the host state has
not adopted legislation "opting out" of that provision of Riegle-Neal. The
Company might use Riegle-Neal to acquire banks in additional states and to
consolidate its affiliate banks under a smaller number of separate charters.
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DESCRIPTION OF DEBT SECURITIES
GENERAL
The debt securities will be unsecured (the "Debt Securities") and may be
issued in one or more series. Such Debt Securities may be either senior (the
"Senior Securities") or subordinated (the "Subordinated Securities") in priority
of payment. The Senior Securities will be issued under an Indenture dated as of
March 3, 1997, originally between BANC ONE and The Chase Manhattan Bank
("Chase"), as trustee, which was supplemented by a First Supplemental Indenture
dated as of October 2, 1998, between the Company and Chase, as trustee (as so
supplemented, the "Senior Indenture"). The Subordinated Securities will be
issued under an Indenture dated as of March 3, 1997, originally between BANC ONE
and Chase, as trustee, which was supplemented by a First Supplemental Indenture
dated as of October 2, 1998, between the Company and Chase, as trustee (as so
supplemented, the "Subordinated Indenture"). The Senior Indenture and the
Subordinated Indenture are collectively referred to as the "Indentures".
References to the "Trustee" shall mean Chase in its capacity as trustee under
the Senior Indenture or the Subordinated Indenture, as applicable. The
statements under this caption are brief summaries of certain provisions
contained in the Indentures, do not purport to be complete and are qualified in
their entirety by reference to the applicable Indenture, copies of which are
exhibits to the Registration Statement. Whenever defined terms are used but not
defined in this Prospectus, such terms shall have the meanings given to them in
the applicable Indenture.
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of any Debt Securities
and the extent, if any, to which such general provisions may apply to such Debt
Securities will be described in the Prospectus Supplement relating to such Debt
Securities.
Neither of the Indentures limits the aggregate principal amount of Debt
Securities which may be issued under it. Rather, each Indenture provides that
Debt Securities of any series may be issued under it up to the aggregate
principal amount which may be authorized from time to time by the Company and
may be denominated in any currency or currency unit designated by the Company.
Neither the Indentures nor the Debt Securities will limit or otherwise restrict
the amount of other indebtedness which may be incurred or the other securities
which may be issued by the Company or any of its subsidiaries.
Debt Securities of a series may be issuable in registered form without
coupons ("Registered Securities"), in bearer form with or without coupons
attached ("Bearer Securities") or in the form of one or more global securities
in registered or bearer form (each a "Global Security"). Bearer Securities, if
any, will be offered only to non-United States persons and to offices located
outside the United States of certain United States financial institutions.
Reference is made to the Prospectus Supplement for a description of the
following terms, where applicable, of each series of Debt Securities in respect
of which this Prospectus is being delivered:
- the title of such Debt Securities;
- the limit, if any, on the aggregate principal amount or aggregate
initial public offering price of such Debt Securities;
- the priority of payment of such Debt Securities;
- the price or prices (which may be expressed as a percentage of the
aggregate principal amount thereof) at which the Debt Securities will be
issued;
- the date or dates on which the principal of the Debt Securities will
be payable;
- the rate or rates (which may be fixed or variable) per annum at
which such Debt Securities will bear interest, if any, or the method of
determining the same;
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- the date or dates from which such interest, if any, on the Debt
Securities will accrue, the date or dates on which such interest, if any,
will be payable, the date or dates on which payment of such interest, if
any, will commence and the Regular Record Dates for such Interest Payment
Dates;
- the extent to which any of the Debt Securities will be issuable in
temporary or permanent global form, or the manner in which any interest
payable on a temporary or permanent global Debt Security will be paid;
- each office or agency where, subject to the terms of the applicable
Indenture, the Debt Securities may be presented for registration of
transfer or exchange;
- the place or places where the principal of (and premium, if any) and
interest, if any, on the Debt Securities will be payable;
- the date or dates, if any, after which such Debt Securities may be
redeemed or purchased in whole or in part, at the option of the Company or
mandatorily pursuant to any sinking, purchase or analogous fund or may be
required to be purchased or redeemed at the option of the holder, and the
redemption or repayment price or prices thereof;
- the terms, if any, upon which the Debt Securities may be convertible
into or exchanged for securities or indebtedness of any kind of the Company
or of any other issuer or obligor and the terms and conditions upon which
such conversion or exchange shall be effected, including the initial
conversion or exchange price or rate, the conversion period and any other
additional provisions;
- the denomination or denominations in which such Debt Securities are
authorized to be issued;
- the currency, currencies or units based on or related to currencies
for which the Debt Securities may be purchased and the currency, currencies
or currency units in which the principal of, premium, if any, and any
interest on such Debt Securities may be payable;
- any index used to determine the amount of payments of principal of,
premium, if any, and interest on the Debt Securities;
- whether any of the Debt Securities are to be issuable as Bearer
Securities and/or Registered Securities, and if issuable as Bearer
Securities, any limitations on issuance of such Bearer Securities and any
provisions regarding the transfer or exchange of such Bearer Securities
(including exchange for registered Debt Securities of the same series);
- the payment of any additional amounts with respect to the Debt
Securities;
- whether any of the Debt Securities will be issued as Original Issue
Discount Securities (as defined below);
- information with respect to book-entry procedures, if any;
- any additional covenants or Events of Default not currently set
forth in the applicable Indenture; and
- any other terms of such Debt Securities not inconsistent with the
provisions of the applicable Indenture.
If any of the Debt Securities are sold for one or more foreign currencies
or foreign currency units or if the principal of, premium, if any, or interest
on any series of Debt Securities is payable in one or more foreign currencies or
foreign currency units, the restrictions, elections, tax consequences, specific
terms and other information with respect to such issue of Debt Securities and
such currencies or currency units will be set forth in the applicable Prospectus
Supplement. A judgment for money damages by courts in the United States,
including a money judgment based on an obligation expressed in a foreign
currency, will ordinarily be rendered only in U.S. dollars. New York statutory
law provides that a court shall render a judgment or decree in the foreign
currency of the underlying obligation and that the judgment or decree shall be
converted into U.S. dollars at the exchange rate prevailing on the date of entry
of the judgment or decree.
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Debt Securities may be issued as original issue discount Debt Securities
(bearing no interest or interest at a rate which at the time of issuance is
below market rates) ("Original Issue Discount Securities"), to be sold at a
substantial discount below the stated principal amount thereof due at the stated
maturity of such Debt Securities. There may not be any periodic payments of
interest on Original Issue Discount Securities. In the event of an acceleration
of the maturity of any Original Issue Discount Security, the amount payable to
the holder of such Original Issue Discount Security upon such acceleration will
be determined in accordance with the Prospectus Supplement, the terms of such
security and the Indenture, but will be an amount less than the amount payable
at the maturity of the principal of such Original Issue Discount Security.
Federal income tax considerations with respect to Original Issue Discount
Securities will be set forth in the Prospectus Supplement relating thereto.
REGISTRATION AND TRANSFER
Unless otherwise indicated in the applicable Prospectus Supplement, Debt
Securities will be issued only as Registered Securities. If Bearer Securities
are issued, the United States Federal income tax consequences and other special
considerations, procedures and limitations relating to such Bearer Securities
will be described in the applicable Prospectus Supplement.
Debt Securities issued as Registered Securities will be without interest
coupons. Debt Securities issued as Bearer Securities shall have interest coupons
attached, unless issued as zero coupon securities.
Registered Securities (other than a Global Security) may be presented for
transfer (with the form of transfer endorsed thereon duly executed) or exchanged
for other Debt Securities of the same series at the office of the Note Registrar
specified according to the terms of the applicable Indenture. The Company has
agreed in each of the Indentures that, with respect to Registered Securities
having The City of New York as a place of payment, the Company will appoint a
Note Registrar or Co-Note Registrar located in The City of New York for such
transfer or exchange. Such transfer or exchange shall be made without service
charge, but the Company may require payment of any taxes or other governmental
charges as described in the applicable Indenture. Provisions relating to the
exchange of Bearer Securities for other Debt Securities of the same series
(including, if applicable, Registered Securities) will be described in the
applicable Prospectus Supplement. In no event, however, will Registered
Securities be exchangeable for Bearer Securities.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities. Each Global Security will be deposited
with, or on behalf of, a depositary (the "Depositary") identified in the
applicable Prospectus Supplement. Global Securities may be issued in either
registered or bearer form and in either temporary or permanent form. Unless and
until it is exchanged in whole or in part for the individual Debt Securities
which it represents, a Global Security may not be transferred except as a whole
by the Depositary for such Global Security to a nominee of such Depositary or by
a nominee of such Depositary to such Depositary or another nominee of such
Depositary or by the Depositary or any nominee to a successor Depositary or any
nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of Debt Securities and certain limitations and restrictions relating to a series
of Bearer Securities in the form of one or more Global Securities will be
described in the applicable Prospectus Supplement. The Company anticipates that
the following provisions will generally apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit, on its book-entry registration and transfer
system, the respective principal amounts of the individual Debt Securities
represented by such Global Security to the accounts of persons that have
accounts with such Depositary. The underwriters or agents for such Debt
Securities will designate such accounts. Ownership of beneficial interests in a
Global Security will be limited to persons that have accounts with the
applicable Depositary ("participants") or persons that may hold interests
through participants. Ownership of beneficial interests in such Global Security
will be shown on, and the transfer of that ownership will be effected only
through, records maintained by the applicable Depositary or its nominee (with
respect to interests of
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participants) and the records of participants (with respect to interests of
persons other than participants). The laws of some states require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and such laws may impair the ability to transfer beneficial
interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture governing such Debt Securities. Except as provided below, owners of
beneficial interests in a Global Security will not be entitled to have any of
the individual Debt Securities of the series represented by such Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of any such Debt Securities of such series in definitive form and will
not be considered the owners or holders thereof under the Indenture governing
such Debt Securities.
Payments of principal of, premium, if any, and interest, if any, on
individual Debt Securities represented by a Global Security registered in the
name of a Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner of the Global Security
representing such Debt Securities. Neither the Company, the Trustee for such
Debt Securities, any Paying Agent, nor the Note Registrar for such Debt
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the Global Security for such Debt Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
Subject to certain restrictions relating to Bearer Securities, the Company
expects that the Depositary for a series of Debt Securities or its nominee, upon
receipt of any payment of principal, premium or interest in respect of a
permanent Global Security representing any of such Debt Securities will credit
participants' accounts immediately with payments in amounts proportionate to
their respective beneficial interests in the principal amount of such Global
Security for such Debt Securities as shown on the records of such Depositary or
its nominee. The Company also expects that payments by participants to owners of
beneficial interests in such Global Security held through such participants will
be governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name". Such payments will be the responsibility of such participants.
With respect to owners of beneficial interests in a temporary Global Security
representing Bearer Securities, receipt by such beneficial owners of payments of
principal, premium or interest in respect thereof will be subject to additional
restrictions.
A Global Security is exchangeable for definitive Debt Securities registered
in the name of, and a transfer of a Global Security may be registered to, any
person other than the Depositary or its nominee, only if:
(i) the Depositary for a series of Debt Securities is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by the Company within 90 days;
(ii) the Company at any time and in its sole discretion, subject to
any limitations described in the Prospectus Supplement relating to such
Debt Securities, determines not to have any Debt Securities of a series
represented by one or more Global Securities or the Company, in its
discretion, specifies with respect to the Debt Securities of a series, that
an owner of a beneficial interest in a Global Security representing Debt
Securities of such series may, on terms acceptable to the Company, the
Trustee and the Depositary for such Global Security, receive Debt
Securities of such series in definitive form in exchange for such
beneficial interests, subject to any limitations described in the
applicable Prospectus Supplement.
In any such instance, an owner of a beneficial interest in a Global
Security will be entitled to physical delivery in definitive form of Debt
Securities of the series represented by such Global Security equal in principal
amount to such beneficial interest and to have such Debt Securities registered
in its name (if the Debt Securities of such series are issuable as Registered
Securities). Debt Securities of such series so issued in definitive form will be
issued (a) as Registered Securities in denominations, unless otherwise specified
by the
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Company, of $1,000 and integral multiples thereof if the Debt Securities of such
series are issuable as Registered Securities, (b) as Bearer Securities in the
denomination, unless otherwise specified by the Company, of $5,000 if the Debt
Securities of such series are issuable as Bearer Securities or (c) as either
Registered or Bearer Securities, if the Debt Securities of such series are
issuable in either form. Certain restrictions may apply, however, on the
issuance of a Bearer Security in definitive form in exchange for an interest in
a Global Security.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of, premium, if any, and any interest on Registered Securities will
be made at the office of such Paying Agent or Paying Agents as the Company may
designate from time to time. In addition, at the option of the Company, payment
of any interest may be made (i) by check mailed to the address of the person
entitled thereto as such address shall appear in the applicable Note Register or
(ii) by wire transfer to an account maintained by the person entitled thereto as
specified in the applicable Note Register. Unless otherwise indicated in an
applicable Prospectus Supplement, payment of any installment of interest on
Registered Securities will be made to the person in whose name such Debt
Security is registered at the close of business on the Regular Record Date for
such payment.
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of, premium, if any, and any interest on Bearer Securities will be
payable, subject to any applicable laws and regulations, at the offices of such
Paying Agents outside the United States as the Company may designate from time
to time, at the option of the Holder, by check or by transfer to an account
maintained by the payee with a bank located outside the United States. Unless
otherwise indicated in an applicable Prospectus Supplement, payment of interest
on Bearer Securities will be made only against surrender of the coupon relating
to such Interest Payment Date. No payment with respect to any Bearer Security
will be made at any office or agency of the Company in the United States or by
check mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States.
CONSOLIDATION, MERGER OR SALE OF ASSETS
Each Indenture provides that the Company may, without the consent of the
holders of any of the Debt Securities outstanding under the applicable
Indenture, consolidate with, merge into or transfer its assets substantially as
an entirety to any person, provided that (i) any such successor assumes the
Company's obligations on the applicable Debt Securities and under the applicable
Indenture, (ii) after giving effect thereto, no Event of Default (as defined in
the Senior Indenture) in the case of the Senior Securities, or Default (as
defined in the Subordinated Indenture) in the case of the Subordinated
Securities, shall have happened and be continuing and (iii) certain other
conditions under the applicable Indenture are met. Accordingly, any such
consolidation, merger or transfer of assets substantially as an entirety, which
meets the conditions described above, would not create any Event of Default or
Default which would entitle holders of the Debt Securities, or the Trustee on
their behalf, to take any of the actions described below under "Senior
Securities--Events of Default, Waivers, etc." or "Subordinated
Securities--Events of Default, Waivers, etc."
LEVERAGED AND OTHER TRANSACTIONS
Each Indenture and the Debt Securities do not contain, among other things,
provisions which would afford holders of the Debt Securities protection in the
event of a highly leveraged or other transaction involving the Company which
could adversely affect the holders of Debt Securities.
MODIFICATION OF THE INDENTURE; WAIVER OF COVENANTS
Each Indenture provides that, with the consent of the holders of not less
than a majority in aggregate principal amount of the outstanding Debt Securities
of each affected series, modifications and alterations of such Indenture may be
made which affect the rights of the holders of such Debt Securities; provided,
however, that no such modification or alteration may be made without the consent
of the holder of each Debt Security so affected which would, among other things,
(i) change the maturity of the principal of, or of any installment
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of interest (or premium, if any) on, any Debt Security issued pursuant to such
Indenture, or reduce the principal amount thereof or any premium thereon, or
change the method of calculation of interest or the currency of payment of
principal or interest (or premium, if any) on, or reduce the minimum rate of
interest thereon, or impair the right to institute suit for the enforcement of
any such payment on or with respect to any such Debt Security, or reduce the
amount of principal of an Original Issue Discount Security that would be due and
payable upon an acceleration of the maturity thereof; or (ii) reduce the
above-stated percentage in principal amount of outstanding Debt Securities
required to modify or alter such Indenture.
REGARDING CHASE
Chase is the Trustee under both the Senior Indenture and the Subordinated
Indenture. Chase serves as trustee for certain subordinated debt securities
issued by the Company under indentures originally dated as of July 1, 1986, July
15, 1992, April 30, 1993, May 17, 1995 and December 1, 1995. Chase also serves
as the institutional or property trustee under declarations of trust for three
statutory business trusts formed under the laws of the State of Delaware and
sponsored by the Company. In connection with those transactions, Chase also
serves as the debt trustee under indentures originally dated as of November 15,
1996 and as of January 1, 1997, with respect to junior subordinated debentures
of the Company purchased by such trusts and is the also the guarantee trustee
under each of three guarantee agreements dated as of December 3, 1996, December
5, 1996 and January 31, 1997, respectively, from the Company to the applicable
trust guaranteeing certain payments to such trust. Chase has a principal
corporate trust office at 450 West 33rd Street, New York, New York 10001.
Chase Manhattan Bank Delaware ("Chase Delaware"), an affiliate of Chase,
serves as trustee for subordinated debt securities issued by the Company under
an indenture originally dated March 1, 1989. Chase Delaware also serves as the
Delaware trustee for the three Delaware business trusts described in the
preceding paragraph.
The Company and its affiliates have normal banking relationships with
Chase, Chase Delaware and their affiliates in the ordinary course of business.
SENIOR SECURITIES
The Senior Securities will be direct, unsecured obligations of the Company
and will rank pari passu with all outstanding unsecured senior indebtedness of
the Company.
EVENTS OF DEFAULT, WAIVERS, ETC.
An Event of Default with respect to Senior Securities of any series is
defined in the Senior Indenture as
(i) default in the payment of principal of or premium, if any, on any
of the Senior Securities of that series outstanding under the Senior
Indenture when due;
(ii) default in the payment of interest on any of the Senior
Securities of that series outstanding under the Senior Indenture when due
and continuance of such default for 30 days;
(iii) default in the performance of any other covenant of the Company
in the Senior Indenture with respect to Senior Securities of such series
and continuance of such default for 90 days after written notice;
(iv) certain events of bankruptcy, insolvency or reorganization of the
Company; and
(v) any other event that may be specified in a Prospectus Supplement
with respect to any series of Senior Securities.
If an Event of Default with respect to any series of Senior Securities for
which there are Senior Securities outstanding under the Senior Indenture occurs
and is continuing, either the applicable Trustee or the holders of not less than
25% in aggregate principal amount of the Senior Securities of such series
outstanding may declare the principal amount (or if such Senior Securities are
Original Issue Discount Securities, such portion of the principal amount as may
be specified in the terms of that series) of all Senior Securities of that
series to
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be immediately due and payable. The holders of a majority in aggregate principal
amount of the Senior Securities of any series outstanding under the Senior
Indenture may waive an Event of Default resulting in acceleration of such Senior
Securities, but only if all Events of Default with respect to Senior Securities
of such series have been remedied and all payments due (other than those due as
a result of acceleration) have been made.
If an Event of Default occurs and is continuing, the applicable Trustee
may, in its discretion, and at the written request of holders of not less than a
majority in aggregate principal amount of the Senior Securities of any series
outstanding under the Senior Indenture and upon reasonable indemnity against the
costs, expenses and liabilities to be incurred in compliance with such request
and subject to certain other conditions set forth in the Senior Indenture shall,
proceed to protect the rights of the holders of all the Senior Securities of
such series. Prior to acceleration of maturity of the Senior Securities of any
series outstanding under the Senior Indenture, the holders of a majority in
aggregate principal amount of such Senior Securities may waive any past default
under the Senior Indenture except a default in the payment of principal of,
premium, if any, or interest on the Senior Securities of such series.
The Senior Indenture provides that upon the occurrence of an Event of
Default specified in clauses (i) or (ii) of the first paragraph under "-- Events
of Defaults, Waivers, etc.", the Company will, upon demand of the applicable
Trustee, pay to it, for the benefit of the holder of any such Senior Security,
the whole amount then due and payable on such Senior Securities for principal,
premium, if any, and interest. The Senior Indenture further provides that if the
Company fails to pay such amount forthwith upon such demand, such Trustee may,
among other things, institute a judicial proceeding for the collection thereof.
The Senior Indenture also provides that notwithstanding any other provision
of the Senior Indenture, the holder of any Senior Security of any series shall
have the right to institute suit for the enforcement of any payment of principal
of, premium, if any, and interest on such Senior Securities when due and that
such right shall not be impaired without the consent of such holder.
The Company is required to file annually with the applicable Trustee a
written statement of officers as to the existence or non-existence of defaults
under the Senior Indenture or the Senior Securities.
SUBORDINATED SECURITIES
The Subordinated Securities will be direct, unsecured obligations of the
Company and, unless otherwise specified in the Prospectus Supplement relating to
a particular series of Subordinated Securities offered thereby, will be subject
to the subordination provisions described below.
SUBORDINATION
The Company intends that the Subordinated Securities issued by it be
treated as capital for calculation of regulatory capital ratios. The Federal
Reserve has issued interpretations of its capital regulations indicating, among
other things, that subordinated debt of bank holding companies issued on or
after September 4, 1992 is includable in capital for calculation of regulatory
capital ratios only if the subordination of the debt meets certain criteria and
if the debt may be accelerated only for bankruptcy, insolvency and similar
matters (the "Subordination Interpretations"). Accordingly, the Subordinated
Indenture contains subordination and acceleration provisions for the
Subordinated Securities which are intended to be consistent with the
Subordination Interpretations. Subordinated debt of the Company (including any
of its predecessor corporations) issued after September 4, 1992, which meets the
Subordination Interpretations are referred to herein as "New Subordinated
Securities". Unless otherwise specified in the Prospectus Supplement relating to
a particular series of Subordinated Securities offered thereby, Subordinated
Securities offered pursuant to this Prospectus will constitute New Subordinated
Securities. See "Events of Default, Defaults, Waivers, etc." below.
Upon any distribution of assets of the Company upon any dissolution,
winding up, liquidation or reorganization, the payment of the principal of,
premium, if any, and interest on the Subordinated Securities is to be
subordinated in right of payment, to the extent provided in the Subordinated
Indenture, to the prior
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payment in full of all Senior Indebtedness. In certain events of bankruptcy or
insolvency, the payment of the principal of and interest on the Subordinated
Securities will, to the extent provided in the Subordinated Indenture, also be
effectively subordinated in right of payment to the prior payment in full of all
General Obligations (as defined below).
Upon any distribution of assets of the Company upon any dissolution,
winding up, liquidation or reorganization, the holders of Senior Indebtedness
will first be entitled to receive payment in full of all amounts due or to
become due before the holders of the Subordinated Securities will be entitled to
receive any payment in respect of the principal of, premium, if any, or interest
on the Subordinated Securities. If upon any such payment or distribution of
assets there remain, after giving effect to such subordination provisions in
favor of the holders of Senior Indebtedness, any amounts of cash, property or
securities available for payment or distribution in respect of the Subordinated
Securities ("Excess Proceeds") and if, at such time, any creditors in respect of
General Obligations have not received payment in full of all amounts due or to
become due on or in respect of such General Obligations, then such Excess
Proceeds shall first be applied to pay or provide for the payment in full of
such General Obligations before any payment or distribution may be made in
respect of the Subordinated Securities. The other New Subordinated Securities
issued prior to the date of this Prospectus contain similar provisions
subordinating any payment or distribution on such New Subordinated Securities to
the payment of amounts due or to become due on or in respect of general
obligations of the Company.
In addition, no payment may be made of the principal of, premium, if any,
or interest on the Subordinated Securities, or in respect of any redemption,
retirement, purchase or other acquisition of any of the Subordinated Securities,
at any time when (i) there is a default in the payment of the principal of,
premium, if any, interest on or otherwise in respect of any Senior Indebtedness
or (ii) any event of default with respect to any Senior Indebtedness has
occurred and is continuing, or would occur as a result of such payment on the
Subordinated Securities or any redemption, retirement, purchase or other
acquisition of any of the Subordinated Securities, permitting the holders of
such Senior Indebtedness to accelerate the maturity thereof. Except as described
above, the obligation of the Company to make payment of the principal of,
premium, if any, or interest on the Subordinated Securities will not be
affected.
By reason of such subordination in favor of the holders of Senior
Indebtedness, in the event of a distribution of assets upon any dissolution,
winding up, liquidation or reorganization, certain creditors of the Company who
are not holders of Senior Indebtedness or of the Subordinated Securities may
recover less, ratably, than holders of Senior Indebtedness and may recover more,
ratably, than holders of the Subordinated Securities. By reason of the
subordination of payments and distributions on the New Subordinated Securities
to creditors in respect of general obligations, in the event of a distribution
of assets upon any dissolution, winding up, liquidation or reorganization,
holders of Old Subordinated Securities (as defined herein) may recover less,
ratably, than creditors in respect of general obligations and may recover more,
ratably, than the holders of New Subordinated Securities.
Subject to payment in full of all Senior Indebtedness, the holders of
Subordinated Securities will be subrogated to the rights of the holders of
Senior Indebtedness to receive payments or distributions of cash, property or
securities of the Company applicable to Senior Indebtedness. Subject to payment
in full of all General Obligations, the holders of the New Subordinated
Securities will be subrogated to the rights of the creditors in respect of
General Obligations to receive payments or distributions of cash, property or
securities of the Company applicable to such creditors in respect of General
Obligations.
"Senior Indebtedness" for purposes of the Subordinated Indenture is the
principal of, premium, if any, and interest on (i) all of the Company's
indebtedness for money borrowed, other than subordinated securities (including
the Subordinated Securities) issued under the Subordinated Indenture, the
Company's 7.25% Subordinated Notes Due August 1, 2002, the Company's 8.74%
Subordinated Notes Due September 15, 2003, the Company's 7.00% Subordinated
Notes due July 15, 2005 (the "July 2005 Notes"), the Company's 9.875%
Subordinated Notes Due March 1, 2009, the Company's 10.00% Subordinated Notes
Due August 15, 2010, the Company's 7.75% Subordinated Debentures due on July 15,
2025 (the "July 2025 Debentures"), the Company's 7.625% Subordinated Debentures
due October 15, 2026 (the "2026 Debentures"), the
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Company's 9 7/8% Subordinated Notes Due July 1999, the Company's 9% Subordinated
Notes Due June 15, 1999, the Company's 9 7/8% Subordinated Notes Due August 15,
2000, the Company's 11 1/4% Subordinated Notes Due February 20, 2001, the
Company's 10 1/4% Subordinated Notes Due May 1, 2001, the Company's 9 1/4%
Subordinated Notes Due November 15, 2001, the Company's 8 7/8% Subordinated
Notes Due March 15, 2002, the Company's 8 1/4% Subordinated Notes Due June 15,
2002, the Company's 9 1/5% Subordinated Notes Due December 17, 2001, the
Company's 7 5/8% Subordinated Notes Due January 15, 2003 (the "January 2003
Notes"), the Company's 6 7/8% Subordinated Notes Due June 15, 2003 (the "June
2003 Notes"), the Company's Floating Rate Subordinated Notes Due July 28, 2003
(the "July 2003 Notes"), the Company's 6 3/8% Subordinated Notes Due January 30,
2009 (the "January 2009 Notes"), the Company's 7 1/8% Subordinated Notes Due
2007 (the "2007 Notes"), the Company's 7 1/4% Subordinated Debentures Due 2004
(the "2004 Notes"), the Company's 8.10% Subordinated Notes Due 2002, the
Company's 7.40% Subordinated Debenture due May 10, 2023 (the "2023 Debentures"),
the Company's Floating Rate Subordinated Notes Due 2005, the Company's 6 1/8%
Subordinated Notes Due February 15, 2006 (the "February 2006 Notes"), the
subordinated notes issued pursuant to FCN's Medium-Term Note Program, Series G
(the "FCN MTN Notes") and the subordinated notes issued pursuant to the
Company's Medium-Term Note Program, Series A (the "Series A MTN Notes")
(collectively, all of the foregoing notes and debentures are hereinafter
referred to as the "Existing Subordinated Indebtedness"), whether outstanding on
the date of execution of the Subordinated Indenture or thereafter created,
assumed or incurred, except such indebtedness as is by its terms expressly
stated to be not superior in right of payment to the subordinated securities
issued under the Subordinated Indenture or the Existing Subordinated
Indebtedness or to rank pari passu with the subordinated securities issued under
the Subordinated Indenture or the Existing Subordinated Indebtedness; and (ii)
any deferrals, renewals or extensions of any such Senior Indebtedness. The term
"indebtedness for money borrowed" as used in the prior sentence includes,
without limitation, any obligation of, or any obligation guaranteed by, the
Company for the repayment of borrowed money, whether or not evidenced by bonds,
debentures, notes or other written instruments, and any deferred obligation for
the payment of the purchase price of property or assets. There is no limitation
on the issuance of additional Senior Indebtedness of the Company.
Subordinated securities (including the Subordinated Securities) issued
under the Subordinated Indenture, the January 2003 Notes, the June 2003 Notes,
the July 2003 Notes, the July 2005 Notes, the February 2006 Notes, the January
2009 Notes, the 2007 Notes, the 2023 Debentures, the July 2025 Debentures, the
October 2026 Debentures, the FCN MTN Notes and the Series A MTN Notes all
constitute New Subordinated Securities; all other Existing Subordinated
Indebtedness constitutes "Old Subordinated Securities".
The Subordinated Securities rank and will rank pari passu with the Existing
Subordinated Indebtedness, subject to the obligations of the holders of
Subordinated Securities (and, generally, holders of other New Subordinated
Securities) to pay over to creditors in respect of general obligations any
proceeds remaining after payments and distributions to holders of Senior
Indebtedness. Thus, in the event of a distribution of assets of the Company upon
any dissolution, winding up, liquidation or reorganization, the holders of the
New Subordinated Securities (including holders of the Subordinated Securities
offered hereby) may receive less, ratably, than holders of Old Subordinated
Securities. The Subordinated Securities rank and will rank senior to Junior
Subordinated Indebtedness (as defined herein) of the Company.
Unless otherwise specified in the Prospectus Supplement relating to a
particular series of Subordinated Securities offered thereby, "General
Obligations" means all obligations of the Company to make payment on account of
claims in respect of derivative products such as interest and foreign exchange
rate contracts, commodity contracts and similar arrangements, other than (i)
obligations on account of Senior Indebtedness, (ii) obligations on account of
indebtedness for money borrowed ranking pari passu with or subordinate to the
Subordinated Securities and (iii) obligations which by their terms are expressly
stated not to be superior in right of payment to the Subordinated Securities or
to rank on parity with the Subordinated Securities; provided, however, that
notwithstanding the foregoing, in the event that any rule, guideline or
interpretation promulgated or issued by the Federal Reserve (or other competent
regulatory agency or authority), as from time to time in effect, establishes or
specifies criteria for the inclusion in regulatory capital of subordinated
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debt of a bank holding company requiring that such subordinated debt be
subordinated to obligations to creditors in addition to those set forth above,
then the term "General Obligations" shall also include such additional
obligations to creditors, as from time to time in effect pursuant to such rules,
guidelines or interpretations. For purposes of this definition, "claim" shall
have the meaning assigned thereto in Section 101(4) of the Bankruptcy Code of
1978, as amended to the date of the Subordinated Indenture.
Unless otherwise specified in the Prospectus Supplement relating to a
particular series of Subordinated Securities offered thereby, "Junior
Subordinated Indebtedness", with respect to the Subordinated Securities, means
the principal of, premium, if any, and interest on all of the Company's
indebtedness for money borrowed (but excluding trade accounts payable arising in
the ordinary course of business) whether outstanding on the date of execution of
the Subordinated Indenture or thereafter created, assumed or incurred and any
deferrals, renewals or extensions of such debt, provided such debt (i) is by its
terms subordinated to the Subordinated Securities, (ii) is between or among the
Company and certain affiliated financing entities including all debt securities
and guarantees in respect of those debt securities issued to certain financing
entities or a trustee of a financing entity sponsored by the Company, (iii) is
evidenced by securities issued under one of the indentures dated either as of
November 15, 1996 or as of January 1, 1997, each between the Company and The
Chase Manhattan Bank, as trustee (unless such securities are by their terms
senior in right of payment to the securities heretofore issued under said
indentures), or (iv) is a guarantee of the Company on a subordinated basis under
certain guarantee agreements dated December 3, 1996, December 5, 1996 or January
31, 1997, relating to securities issued by certain financing entities affiliated
with the Company. The term "indebtedness for money borrowed" as used in the
prior sentence includes, without limitation, any obligation of, or any
obligation guaranteed by, the Company for the repayment of borrowed money,
whether or not evidenced by bonds, debentures, notes or other written
instruments, and any deferred obligation for the payment of the purchase price
of property or assets.
As of September 30, 1998, the aggregate amount of Senior Indebtedness and
General Obligations of the Company was approximately $7.9 billion.
LIMITED RIGHTS OF ACCELERATION
Unless otherwise specified in the Prospectus Supplement relating to any
series of Subordinated Securities, payment of principal of the Subordinated
Securities may be accelerated only in case of the bankruptcy, insolvency or
reorganization of the Company. There is no right of acceleration in the case of
a default in the payment of principal of, premium, if any, or interest on the
Subordinated Securities or the performance of any other covenant of the Company
in the Subordinated Indenture. Payment of principal of the Old Subordinated
Securities may be accelerated in the case of the bankruptcy, insolvency or
reorganization of the Company. For certain Old Subordinated Securities, payment
of principal also may be accelerated in the case of insolvency or receivership
of The First National Bank of Chicago or NBD Bank, Detroit, Michigan.
EVENTS OF DEFAULT, DEFAULTS, WAIVERS, ETC.
An Event of Default with respect to Subordinated Securities of any series
is defined in the Subordinated Indenture as certain events involving the
bankruptcy, insolvency or reorganization of the Company and any other Event of
Default provided with respect to Subordinated Securities of that series. A
"Default" with respect to Subordinated Securities of any series is defined in
the Subordinated Indenture as
(i) an Event of Default with respect to such series,
(ii) default in the payment of the principal of or premium, if any, on
any Subordinated Security of such series when due,
(iii) default in the payment of interest upon any Subordinated
Security of such series when due and the continuance of such default for a
period of 30 days,
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(iv) default in the performance of any other covenant or agreement of
the Company in the Subordinated Indenture with respect to Subordinated
Securities of such series and continuance of such default for 90 days after
written notice; or
(v) any other Default provided with respect to Subordinated Securities
of any series.
If an Event of Default with respect to any series of Subordinated
Securities for which there are Subordinated Securities outstanding under the
Subordinated Indenture occurs and is continuing, either the applicable Trustee
or the holders of not less than 25% in aggregate principal amount of the
Subordinated Securities of such series may declare the principal amount (or if
such Subordinated Securities are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of that series)
of all Subordinated Securities of that series to be immediately due and payable.
The holders of a majority in aggregate principal amount of the Subordinated
Securities of any series outstanding under the Subordinated Indenture may waive
an Event of Default resulting in acceleration of such Subordinated Securities,
but only if all Defaults have been remedied and all payments due (other than
those due as a result of acceleration) have been made.
If a Default occurs and is continuing, the Trustee may in its discretion,
and at the written request of holders of not less than a majority in aggregate
principal amount of the Subordinated Securities of any series outstanding under
the Subordinated Indenture and upon reasonable indemnity against the costs,
expenses and liabilities to be incurred in compliance with such request and
subject to certain other conditions set forth in the Subordinated Indenture
shall, proceed to protect the rights of the holders of all the Subordinated
Securities of such series. Prior to acceleration of maturity of the Subordinated
Securities of any series outstanding under the Subordinated Indenture, the
holders of a majority in aggregate principal amount of such Subordinated
Securities may waive any past default under the Subordinated Indenture except a
default in the payment of principal of, premium, if any, or interest on the
Subordinated Securities of such series.
The Subordinated Indenture provides that in the event of a Default
specified in clauses (ii) or (iii) of the definition thereof in payment of
principal of, premium, if any, or interest on any Subordinated Security of any
series, the Company will, upon demand of the applicable Trustee, pay to it, for
the benefit of the holder of any such Subordinated Security, the whole amount
then due and payable on such Subordinated Security for principal, premium, if
any, and interest. The Subordinated Indenture further provides that if the
Company fails to pay such amount forthwith upon such demand, the applicable
Trustee may, among other things, institute a judicial proceeding for the
collection thereof.
The Subordinated Indenture also provides that notwithstanding any other
provision of the Subordinated Indenture, the holder of any Subordinated Security
of any series shall have the right to institute suit for the enforcement of any
payment of principal of, premium, if any, and interest on such Subordinated
Security on the respective Stated Maturities (as defined in the Subordinated
Indenture) expressed in such Subordinated Security and that such right shall not
be impaired without the consent of such holder.
The Company is required to file annually with the applicable Trustee a
written statement of officers as to the existence or non-existence of defaults
under the Subordinated Indenture or the Subordinated Securities.
DESCRIPTION OF DEBT WARRANTS
The Company may issue warrants for the purchase of Debt Securities ("Debt
Warrants"). Debt Warrants may be issued independently or together with any
Securities offered by any Prospectus Supplement and may be attached to or
separate from such Securities. The Debt Warrants are to be issued under warrant
agreements (each a "Debt Warrant Agreement") to be entered into between the
Company and a warrant agent which will be designated in the applicable
Prospectus Supplement (the "Debt Warrant Agent"), all as set forth in the
Prospectus Supplement relating to the particular issue of Debt Warrants (the
"Offered Debt Warrants"). The Debt Warrant Agent will act solely as an agent of
the Company in connection with the Debt Warrants and will not assume any
obligation or relationship of agency or trust for or with any holders or
beneficial owners of Debt Warrants. The following summaries of certain
provisions of the form of Debt Warrant Agreement and form of certificate, if
any, representing the Debt Warrants (the "Debt Warrant
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Certificates"), do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all the provisions of the Debt
Warrant Agreement and the Debt Warrant Certificates, respectively, including the
definitions therein of certain terms, which Agreement and Certificate, if any,
will be filed as exhibits to or incorporated by reference in the Registration
Statement of which this Prospectus forms a part.
If Debt Warrants are offered, the Prospectus Supplement will describe the
terms of the Offered Debt Warrants, the Debt Warrant Agreement relating to the
Offered Debt Warrants and, if applicable, the Debt Warrant Certificates,
including the following:
- the offering price;
- the currency or currency unit in which the price for the Offered
Debt Warrants may be payable;
- the designation, aggregate principal amount and terms of the Debt
Securities purchasable upon exercise of the Offered Debt Warrants;
- if applicable, the designation and terms of the Securities with
which the Offered Debt Warrants are issued and the number of Offered Debt
Warrants issued with each such Security;
- if the Debt Securities purchasable upon exercise of Offered Debt
Warrants are denominated in a currency or currency unit other than U.S.
dollars, the denomination of such Debt Securities and the currency or units
based on or relating to currencies (including ECU) in which the principal
of, premium, if any, and interest on such Debt Securities will be payable;
- if applicable, the date on and after which the Offered Debt Warrants
and the related Securities will be separately transferable;
- the principal amount of Debt Securities purchasable upon exercise of
an Offered Debt Warrant and the price at which, and currency or currency
units based on or relating to currencies (including ECU) in which, such
principal amount of Debt Securities may be purchased upon such exercise;
- the date on which the right to exercise the Offered Debt Warrants
shall commence and the date on which such right shall expire;
- if applicable, a discussion of certain Federal income tax,
accounting and other special considerations, procedures and limitations;
- whether the Debt Warrants will be represented by certificates or
issued in book-entry form; and
- any other terms of the Offered Debt Warrants, including terms,
procedures and limitations relating to the exchange and exercise of the
Offered Debt Warrants.
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DESCRIPTION OF CURRENCY WARRANTS
The Company may issue options, warrants or other rights relating to the
exchange of certain currencies ("Currency Warrants") which, upon exercise at a
permitted time or times in the future, entitle any holder thereof to receive the
Cash Settlement Value (as defined below) of two designated currencies. Currency
Warrants may be issued independently or together with any Securities offered by
any Prospectus Supplement and may be attached to or separate from such
Securities. The Currency Warrants are to be issued under warrant agreements
(each a "Currency Warrant Agreement") to be entered into between the Company and
a warrant agent which will be designated in the applicable Prospectus Supplement
(the "Currency Warrant Agent"), all as set forth in the Prospectus Supplement
relating to the particular issue of Currency Warrants (the "Offered Currency
Warrants"). The Currency Warrant Agent will act solely as an agent of the
Company in connection with the Currency Warrants and will not assume any
obligation or relationship of agency or trust for or with any holder or
beneficial owners of Currency Warrants. The following summaries of certain
provisions of the form of Currency Warrant Agreement and the form of
certificate, if any, representing the Currency Warrants (the "Currency Warrant
Certificates") do not purport to be complete and are subject to and are
qualified in their entirety by reference to all the provisions of the Currency
Warrant Agreement and the Currency Warrant Certificates, respectively, including
the definitions therein of certain terms, which Agreement and Certificate, if
any, will be filed as an exhibit to or incorporated by reference in the
Registration Statement of which this Prospectus forms a part.
The Currency Warrants will not require, or entitle, any holder thereof to
sell any foreign currency to the Company. The Company will make only a U.S.
dollar cash settlement upon exercise of a Currency Warrant and will not be
obligated to purchase or take delivery of any foreign currency from any holder
of a Currency Warrant.
The "Cash Settlement Value" of an exercised Currency Warrant will be an
amount stated in U.S. dollars which is the greater of (i) zero and (ii) an
amount equal to (a) the nominal amount of such Currency Warrant, minus (b) an
amount equal to the nominal amount of such Currency Warrant times a fraction,
the numerator of which is the Strike Price of such Currency Warrant and the
denominator of which is the Spot Rate of such Currency Warrant on the Exercise
Date. The "nominal amount" of a Currency Warrant refers to the principal amount,
expressed in U.S. dollars, of a currency (the "Base Currency") which is to be
compared to another currency (the "Second Currency") upon exercise of such
Currency Warrant. Unless otherwise specified in the applicable Prospectus
Supplement, the Base Currency shall be U.S. dollars. The "Strike Price" is the
designated rate of exchange of the Base Currency for the Second Currency which
the Company will specify in the Prospectus Supplement relating to the Offered
Currency Warrants. The "Spot Rate" refers to the floating rate of exchange of
the Base Currency for the Second Currency on any given date, as quoted by a
reference bank or banks or other institution at a designated time of day, such
source of quotations and time to be specified in the applicable Prospectus
Supplement. The "Exercise Date" refers to the effective date on which the holder
of a Currency Warrant exercises such Currency Warrant.
If Currency Warrants are offered, the Prospectus Supplement will describe
the terms of the Offered Currency Warrants, the Currency Warrant Agreement
relating to the Offered Currency Warrants and, if applicable, the Currency
Warrant Certificates, including the following:
- the aggregate number of Offered Currency Warrants;
- the nominal amount of each Offered Currency Warrant;
- the price of the Offered Currency Warrants;
- the Base Currency and the Second Currency;
- the Strike Price for the Offered Currency Warrants;
- the reference bank or banks or other institution and time of day to
be used to determine the Spot Rate;
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- the date on which the right to exercise the Offered Currency
Warrants shall begin and the date on which such right shall terminate;
- if applicable, the minimum or maximum amount of Offered Currency
Warrants which may be exercised at any one time;
- the place or places at which payment of the Cash Settlement Value is
to be made by the Company;
- whether the Offered Currency Warrants will be represented by
certificates or issued in book-entry form;
- the method by which the Offered Currency Warrants are to be
exercised;
- the Federal income tax consequences and other special
considerations, procedures and limitations applicable to such Offered
Currency Warrants; and
- any other terms of the Offered Currency Warrants, including risk
factors specifically relating to the Base Currency or Second Currency and
Currency Warrants relating to such currencies.
DESCRIPTION OF STOCK-INDEX WARRANTS
The Company may issue options, warrants or other rights which, upon
exercise at a permitted time or times in the future, entitle any holder thereof
to receive an amount of cash determined by references to increases and/or
decreases in the level of a specified stock index ("Stock-Index Warrants").
Stock-Index Warrants may be issued independently or together with other
Securities offered by any Prospectus Supplement and may be attached to or
separate from such other Securities. The Stock-Index Warrants are to be issued
under one or more warrant agreements (each a "Stock-Index Warrant Agreement") to
be entered into between the Company and a bank or trust company, as stock-index
warrant agent which will be designated in the applicable Prospectus Supplement
(the "Stock-Index Warrant Agent"), all as set forth in the Prospectus Supplement
relating to the particular issue of Stock-Index Warrants (the "Offered
Stock-Index Warrants"). The Stock-Index Warrant Agent will act solely as an
agent of the Company in connection with the Stock-Index Warrants and will not
assume any obligation or relationship of agency or trust for or with any holder
or beneficial owners of Stock-Index Warrants. The following summaries of certain
provisions of the form of Stock-Index Warrant Agreement and form of certificate,
if any, representing the Stock-Index Warrants (the "Stock-Index Warrant
Certificates") do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all the provisions of the
Stock-Index Warrant Agreement and the Stock-Index Warrant Certificates,
respectively, including the definitions therein of certain terms, which
Agreement and Certificate, if any, will be filed as an exhibit to or
incorporated by reference in the Registration Statement of which this Prospectus
forms a part.
The Company may issue Stock-Index Warrants either in the form of
"Stock-Index Put Warrants" entitling the holders thereof to receive from the
Company the Stock-Index Cash Settlement Value (as described in the applicable
Prospectus Supplement) in U.S. dollars, which amount will be determined by
reference to the amount, if any, by which the Stock-Index Exercise Price (as
described in the applicable Prospectus Supplement) exceeds the closing value of
the Index on the valuation date (the "Index Value") at the time of exercise, or
in the form of "Stock-Index Call Warrants" entitling the holders thereof to
receive from the Company the Stock-Index Cash Settlement Value in U.S. dollars,
which amount will be determined by reference to the amount, if any, by which the
Index Value at the time of exercise exceeds the Stock-Index Exercise Price.
The Prospectus Supplement for the Offered Stock-Index Warrants will set
forth the formula pursuant to which the Stock-Index Cash Settlement Value will
be determined. In addition, if so specified in the applicable Prospectus
Supplement, following the occurrence of a Market Disruption Event (as defined
therein), the Stock-Index Cash Settlement Value may be determined on a different
basis than under normal exercise of a Stock-Index Warrant.
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Unless otherwise indicated in the Prospectus Supplement, a Stock-Index
Warrant will be settled only in cash and, accordingly, will not require or
entitle a holder thereof to sell, deliver, purchase or take delivery of any
shares of any underlying stock or any other securities. The holders will not be
entitled to any of the rights of the holders of any underlying stock.
If Stock-Index Warrants are offered, the Prospectus Supplement will
describe the terms of the Offered Stock-Index Warrants, the Stock-Index Warrant
Agreement relating to the Offered Stock-Index Warrants and, if applicable, the
Stock-Index Warrant Certificates, including the following:
- whether such Stock-Index Warrants are Stock-Index Put Warrants,
Stock-Index Call Warrants or both;
- the aggregate number of Offered Stock-Index Warrants;
- the offering price;
- the stock index for the Offered Stock-Index Warrants, which may be
based on one or more U.S. or foreign stocks or a combination thereof and
may be a preexisting U.S. or foreign stock index compiled and published by
a third party or an index based on one or more underlying stock or stocks
selected by the Company solely in connection with the issuance of the
Offered Stock-Index Warrants, and certain information regarding such stock
index and the underlying stock or stocks;
- the date on which the right to exercise the Offered Stock-Index
Warrants commences and the date on which such right expires;
- the procedures and conditions relating to exercise;
- the circumstances, if any, which will cause the Offered Stock-Index
Warrants to be deemed to be automatically exercised;
- the minimum number, if any, of Stock-Index Warrants to be exercised
at any one time other than upon automatic exercise and any other
restrictions on exercise;
- the maximum number, if any, of the Offered Stock-Index Warrants that
may, subject to the Company's election, be exercised by all owners (or by
any person or entity) on any day;
- the method of providing for a substitute index or otherwise
determining the amount payable in connection with the exercise of the
Offered Stock-Index Warrants if the stock index changes or ceases to be
made available by its publisher, which determination will be made by an
independent expert;
- the national securities exchange on which the Offered Stock-Index
Warrants will be listed, if any;
- whether the Offered Stock-Index Warrants will be issued in
certificated or book-entry form;
- the place or places at which payment of the Stock-Index Cash
Settlement Value is to be made by the Company;
- information with respect to book-entry procedures, if any;
- the plan of distribution of the Offered Stock-Index Warrants;
- the identity of the Stock-Index Warrant Agent;
- any provisions permitting a holder of a Stock-Index Warrant to
condition a stock-index exercise notice on the absence of certain specified
changes in the Index Value after the Stock-Index Warrant exercise date; and
- any other terms of the Offered Stock-Index Warrants, including risk
factors specifically relating to fluctuations in the applicable stock index
and possible illiquidity in the secondary market.
Prospective purchasers of Stock-Index Warrants should be aware that special
U.S. Federal income tax, accounting and other considerations may be applicable
to instruments such as Stock-Index Warrants. The Prospectus Supplement relating
to any issue of Stock-Index Warrants will describe such considerations.
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DESCRIPTION OF OTHER WARRANTS
The Company may issue other options, warrants or rights ("Other Warrants"),
if permitted under applicable law, to buy or sell debt securities of or
guaranteed by the United States, to buy or sell a commodity or a unit of a
commodity index or to buy or sell some other item or unit of an index other than
indices covered by Stock-Index Warrants (collectively, "Exercise Items"). Owners
of Other Warrants will be entitled to receive from the Company the cash
settlement value in U.S. dollars of the right to buy or sell the Exercise Items
(the "Other Warrant Cash Settlement Value"). An Owner of Other Warrants will
receive a cash payment upon exercise only if the Other Warrants have an Other
Warrant Cash Settlement Value in excess of zero at that time.
Other Warrants may be issued independently or together with other
Securities offered by any Prospectus Supplement and may be attached to or
separate from such other Securities. The Other Warrants are to be issued under
one or more other warrant agreements (the "Other Warrant Agreements") to be
entered into between the Company and a bank or trust company, as warrant agent
which will be designated in the applicable Prospectus Supplement (the "Other
Warrant Agent"), all as set forth in the Prospectus Supplement relating to the
particular issue of Other Warrants. The Other Warrant Agent will act solely as
an agent of the Company in connection with the Other Warrants and will not
assume any obligation or relationship of agency or trust for or with any holder
or beneficial owners of the Other Warrants. The following summaries of certain
provisions of the form of Other Warrant Agreement and form of certificate, if
any, representing the Other Warrants (the "Other Warrant Certificates") do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all the provisions of the Other Warrant Agreement and the Other
Warrant Certificates, respectively, including the definitions therein of certain
terms which Agreement and Certificate, if any, will be filed as an exhibit to or
incorporated by reference in the Registration Statement of which this Prospectus
forms a part.
Unless otherwise indicated in the Prospectus Supplement, an Other Warrant
will be settled only in cash, in U.S. dollars, and accordingly, will not require
or entitle an owner thereof to sell, deliver, purchase or take delivery of any
Exercise Items.
If Other Warrants are offered, the applicable Prospectus Supplement will
describe the terms of such Other Warrants, including, where applicable, the
following:
- the title and aggregate number of such Other Warrants;
- the offering price;
- the Exercise Items that such Other Warrants represent the right to
buy or sell;
- the procedures and conditions relating to exercise;
- the date on which the right to exercise the Other Warrants shall
commence and the date such right shall expire (the "Other Warrant
Expiration Date");
- the method of determining the Other Warrant Cash Settlement Value;
- whether such Other Warrants will be issued in certificated or
book-entry form;
- whether such Other Warrants will be listed on a national securities
exchange;
- information with respect to book-entry procedures, if any;
- the identity of the Other Warrant Agent; and
- any other terms of such Other Warrants, including risk factors
relating to significant fluctuations in the market for the applicable
Exercise Item, the potential illiquidity of the secondary market and the
risk that the Other Warrants may expire worthless.
Prospective purchasers of Other Warrants should be aware that special U.S.
Federal income tax, accounting and other considerations may be applicable to
instruments such as Other Warrants. The Prospectus Supplement relating to any
issue of Other Warrants will describe such considerations.
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DESCRIPTION OF PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. Certain other terms of any series of Preferred
Stock offered by any Prospectus Supplement will be specified in the applicable
Prospectus Supplement. If so specified in the applicable Prospectus Supplement,
the terms of any series of Preferred Stock may differ from the terms set forth
below. The description of the terms of the Preferred Stock set forth below and
in any Prospectus Supplement does not purport to be complete and is subject to
and qualified in its entirety by reference to the Certificate of Designation
relating to the applicable series of Preferred Stock, which Certificate will be
filed as an exhibit to or incorporated by reference in the Registration
Statement of which this Prospectus forms a part.
GENERAL
Pursuant to the Company's Restated Certificate of Incorporation (the
"Certificate of Incorporation"), the Board of Directors of the Company has the
authority, without further stockholder action, to issue from time to time a
maximum of 50,000,000 shares of preferred stock, $0.01 par value, in one or more
series and for such consideration, as may be fixed from time to time by the
Board of Directors of the Company, and to fix before the issuance of any shares
of preferred stock of a particular series, the designation of such series, the
number of shares to comprise such series, the dividend rate or rates payable
with respect to the shares of such series, the redemption price or prices, if
any, and the terms and conditions of the redemption, the voting rights, any
sinking fund provisions for the redemption or purchase of the shares of such
series, the terms and conditions upon which the shares are convertible, if they
are convertible, and any other relative rights, preferences and limitations
pertaining to such series.
As of October 2, 1998, there were issued and outstanding 1,191,000 shares
of the Company's Preferred Stock with Cumulative and Adjustable Dividends,
Series B ($100 stated value) (the "Series B Preferred Stock") and 713,800 shares
of the Company's Preferred Stock with Cumulative and Adjustable Dividends,
Series C ($100 stated value) (the "Series C Preferred Stock") (collectively, the
"Existing Preferred Stock"). In addition, the Company has issued 6,000,000
preferred share purchase units ("Preferred Purchase Units") which may require
the holder of which to purchase, no later than 2023, the Company's 7 1/2%
Cumulative Preferred Stock (the "7 1/2% Preferred Stock"). See "Description of
Existing Preferred Stock and Preferred Purchase Units" herein.
As described under "Description of Depositary Shares" below, the Company
may, at its option, elect to offer depositary shares ("Depositary Shares")
evidenced by depositary receipts, each representing a fraction (to be specified
in the Prospectus Supplement relating to the particular series of Preferred
Stock) of a share of the particular series of the Preferred Stock issued and
deposited with a depositary, in lieu of offering full shares of such series of
the Preferred Stock.
Under interpretations adopted by the Federal Reserve Board, if the holders
of Preferred Stock of any series become entitled to vote for the election of
directors because dividends on such series are in arrears as described under
"Voting Rights" below, such series may then be deemed a "class of voting
securities" and a holder of 25% or more of such series (or a holder of 5% or
more if it otherwise exercises a "controlling influence" over the Company) may
then be subject to regulation as a bank holding company in accordance with the
Bank Holding Company Act of 1956, as amended. In addition, at such time as such
series is deemed a class of voting securities, any other bank holding company
may be required to obtain the prior approval of the Federal Reserve Board to
acquire 5% or more of such series, and any person other than a bank holding
company may be required to obtain the prior approval of the Federal Reserve
Board to acquire 10% or more of such series.
The Preferred Stock shall have the dividend, liquidation, redemption,
voting and conversion rights set forth below unless otherwise specified in the
applicable Prospectus Supplement. Reference is made to the Prospectus Supplement
relating to the particular series of Preferred Stock offered thereby for
specific terms, including:
- the designation, stated value and liquidation preference of such
Preferred Stock and the number of shares offered;
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- the initial public offering price at which such shares will be
issued;
- the dividend rate or rates (or method of calculation), the dividend
periods, the date on which dividends shall be payable and whether such
dividends shall be cumulative or noncumulative and, if cumulative, the
dates from which dividends shall commence to cumulate;
- any redemption or sinking fund provisions;
- any conversion provisions;
- whether the Company has elected to offer Depositary Shares as
described below under "Description of Depositary Shares"; and
- any additional dividend, liquidation, redemption, sinking fund and
other rights, preferences, privileges, limitations and restrictions of such
Preferred Stock.
The Preferred Stock will, when issued, be fully paid and nonassessable.
Unless otherwise specified in the applicable Prospectus Supplement, the shares
of each series of Preferred Stock will upon issuance rank on a parity in all
respects with the Company's Existing Preferred Stock, described below, and each
other then outstanding series of preferred stock of the Company. The Preferred
Stock will have no preemptive rights to subscribe for any additional securities
which may be issued by the Company. Unless otherwise specified in the applicable
Prospectus Supplement, First Chicago Trust Company of New York, or an affiliate,
will be the transfer agent and registrar for the Preferred Stock.
Because the Company is a holding company, its rights and the rights of
holders of its securities, including the holders of Preferred Stock, to
participate in the assets of any Company subsidiary upon the latter's
liquidation or recapitalization will be subject to the prior claims of such
subsidiary's creditors and preferred stockholders, except to the extent the
Company may itself be a creditor with recognized claims against such subsidiary
or a holder of preferred shares of such subsidiary.
DIVIDENDS
The holders of the Preferred Stock will be entitled to receive, when, as
and if declared by the Board of Directors of the Company, out of funds legally
available therefor, dividends at such rates and on such dates as will be
specified in the applicable Prospectus Supplement. Such rates may be fixed or
variable or both. If variable, the formula used for determining the dividend
rate for each dividend period will be specified in the applicable Prospectus
Supplement. Dividends will be payable to the holders of record as they appear on
the stock books of the Company (or, if applicable, the records of the Depositary
referred to below under "Description of Depositary Shares") on such record dates
as will be fixed by the Board of Directors of the Company. Dividends may be paid
in the form of cash, Preferred Stock (of the same or a different series) or
Common Stock of the Company, in each case as specified in the applicable
Prospectus Supplement.
Dividends on any series of Preferred Stock may be cumulative or
noncumulative, as specified in the applicable Prospectus Supplement. If the
Board of Directors of the Company fails to declare a dividend payable on a
dividend payment date on any Preferred Stock for which dividends are
noncumulative ("Noncumulative Preferred Stock"), then the holders of such
Preferred Stock will have no right to receive a dividend in respect of the
dividend period relating to such dividend payment date, and the Company will
have no obligation to pay the dividend accrued for such period, whether or not
dividends on such Preferred Stock are declared or paid on any future dividend
payment dates.
The Company shall not declare or pay or set apart for payment any dividends
on any series of its preferred shares ranking, as to dividends, on a parity with
or junior to the outstanding Preferred Stock of any series unless (i) if such
Preferred Stock has a cumulative dividend ("Cumulative Preferred Stock"), full
cumulative dividends have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for such payment
on such Preferred Stock for all dividend periods terminating on or prior to the
date of payment of any such dividends on such other series of preferred shares
of the Company, or (ii) if such Preferred Stock is Noncumulative Preferred
Stock, full dividends for the then-current dividend
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period on such Preferred Stock have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for such
payment.
When dividends are not paid in full upon Preferred Stock of any series and
any other shares of preferred stock of the Company ranking on a parity as to
dividends with such Preferred Stock, all dividends declared upon such Preferred
Stock and any other preferred shares of the Company ranking on a parity as to
dividends with such Preferred Stock shall be declared pro rata so that the
amount of dividends declared per share on such Preferred Stock and such other
shares shall in all cases bear to each other the same ratio that the accrued
dividends per share on such Preferred Stock (which shall not, if such Preferred
Stock is Noncumulative Preferred Stock, include any accumulation in respect of
unpaid dividends for prior dividend periods) and such other preferred shares
bear to each other.
Except as set forth in the preceding paragraph, unless full dividends on
the outstanding Cumulative Preferred Stock of any series have been paid for all
past dividend periods and full dividends for the then-current dividend period on
the outstanding Noncumulative Preferred Stock of any series have been declared
and paid or declared and a sum sufficient for the payment thereof set apart for
such payment, no dividends(other than in Common Stock of the Company or other
shares of the Company ranking junior to such Preferred Stock as to dividends and
upon liquidation) shall be declared or paid or set aside for payment, nor shall
any other distribution be made on the Common Stock of the Company or on any
other shares of the Company ranking junior to or on a parity with such Preferred
Stock as to dividends or upon liquidation. Unless full dividends on the
Cumulative Preferred Stock of any series have been paid for all past dividend
periods and full dividends for the then-current dividend period on the
Noncumulative Preferred Stock of any series have been declared and paid or
declared and a sum sufficient for the payment thereof set apart for such
payment, no Common Stock or any other shares of the Company ranking junior to or
on a parity with such Preferred Stock as to dividends or upon liquidation shall
be redeemed, purchased or otherwise acquired for any consideration (or any
moneys be paid or made available for a sinking fund for the redemption of any
such shares) by the Company or any subsidiary of the Company except by
conversion into or exchange for shares of the Company ranking junior to such
Preferred Stock as to dividends and upon liquidation.
REDEMPTION
A series of the Preferred Stock may be redeemable, in whole or in part, at
the option of the Company, and may be subject to mandatory redemption pursuant
to a sinking fund or otherwise, in each case upon terms, at the times and at the
redemption prices specified in the applicable Prospectus Supplement and subject
to the rights of holders of other securities of the Company. Preferred Stock
redeemed by the Company will be restored to the status of authorized but
unissued preferred shares.
The Prospectus Supplement relating to a series of Preferred Stock that is
subject to mandatory redemption will specify the number of shares of such
Preferred Stock that shall be redeemed by the Company in each year commencing
after a date to be specified, at a redemption price per share to be specified,
together with an amount equal to all accrued and unpaid dividends thereon (which
shall not, if such Preferred Stock is Noncumulative Preferred Stock, include any
accumulation in respect of unpaid dividends for prior dividend periods) to the
date of redemption. The redemption price may be payable in cash or other
property, as specified in the applicable Prospectus Supplement. If the
redemption price for Preferred Stock of any series is payable only from the net
proceeds of the issuance of capital stock of the Company, the terms of such
Preferred Stock may provide that, if no such capital stock shall have been
issued or to the extent the net proceeds from any issuance are insufficient to
pay in full the aggregate redemption price then due, such Preferred Stock shall
automatically and mandatorily be converted into shares of the applicable capital
stock of the Company pursuant to conversion provisions specified in the
applicable Prospectus Supplement.
If fewer than all the outstanding shares of Preferred Stock of any series
are to be redeemed, the number of shares to be redeemed will be determined in a
manner designated by the Board of Directors of the Company and such shares shall
be redeemed pro rata from the holders of record of such shares in proportion to
the number of such shares held by such holders (with adjustments to avoid
redemption of fractional shares) or by lot or by any other method as may be
determined by the Board of Directors of the Company.
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Notwithstanding the foregoing, if any dividends, including any
accumulation, on Cumulative Preferred Stock of any series are in arrears, no
Preferred Stock of such series shall be redeemed unless all outstanding
Preferred Stock of such series is simultaneously redeemed and the Company shall
not purchase or otherwise acquire any Preferred Stock of such series; provided,
however, that the foregoing shall not prevent the purchase or acquisition of
Preferred Stock of such series pursuant to a purchase or exchange offer provided
such offer is made on the same terms to all holders of the Preferred Stock of
such series.
Notice of redemption shall be given by mailing the same to each record
holder of the Preferred Stock to be redeemed, not less than 30 nor more than 60
days prior to the date fixed for redemption thereof, to the respective addresses
of such holders as the same shall appear on the stock books of the Company. Each
notice shall state:
(i) the redemption date;
(ii) the number of shares and series of the Preferred Stock to be
redeemed;
(iii) the redemption price;
(iv) the place or places where certificates for such Preferred Stock
are to be surrendered for payment of the redemption price;
(v) that dividends on the shares to be redeemed will cease to accrue
on such redemption date; and
(vi) the date upon which the holder's conversion rights, if any, as to
such shares, shall terminate.
If fewer than all the shares of Preferred Stock of any series held by any
holder are to be redeemed, the notice mailed to such holder shall also specify
the number of shares of Preferred Stock to be redeemed from such holder.
If notice of redemption of any shares of Preferred Stock has been given,
from and after the redemption date for such shares (unless the Company defaults
in providing money for the payment of the redemption price of such shares),
dividends on such shares shall cease to accrue and such shares shall no longer
be deemed to be outstanding, and all rights of the holders thereof as
shareholders of the Company (except the right to receive the redemption price)
shall cease. Upon surrender in accordance with such notice of the certificates
representing any such shares (properly endorsed or assigned for transfer, if the
Board of Directors of the Company shall so require and the notice shall so
state), the redemption price set forth above shall be paid out of the funds
provided by the Company. If fewer than all the shares represented by any such
certificate are redeemed, a new certificate shall be issued representing the
unredeemed shares without cost to the holder thereof.
CONVERSION RIGHTS
The Prospectus Supplement relating to a series of the Preferred Stock that
is convertible will state the terms on which shares of such series are
convertible into the Company's Common Stock, or another series of Preferred
Stock.
RIGHTS UPON LIQUIDATION
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company, the holders of Preferred Stock shall be entitled to
receive out of the assets of the Company available for distribution to
shareholders, before any distribution of assets is made to holders of Common
Stock or any other class or series of shares ranking junior to such Preferred
Stock upon liquidation, liquidating distributions in the amount of the
liquidation preference of such Preferred Stock plus accrued and unpaid dividends
(which shall not, if such Preferred Stock is Noncumulative Preferred Stock,
include any accumulation in respect of unpaid dividends for prior dividend
periods). If, upon any voluntary or involuntary liquidation, dissolution or
winding up of the Company the amounts payable with respect to Preferred Stock of
any series and any other shares of the Company ranking as to any such
distribution on a parity with such Preferred Stock are not paid in full, the
holders of such Preferred Stock and of such other shares will share ratably in
any such distribution of assets of
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the Company in proportion to the full respective preferential amounts to which
they are entitled. After payment of the full amount of the liquidating
distribution to which they are entitled, the holders of Preferred Stock of any
series will not be entitled to any further participation in any distribution of
assets by the Company.
VOTING RIGHTS
Except as indicated below or in the applicable Prospectus Supplement, or
except as expressly required by applicable law, the holders of the Preferred
Stock will not be entitled to vote. In the event the Company issues full shares
of any series of Preferred Stock, each such share will be entitled to one vote
on matters on which holders of such series of the Preferred Stock are entitled
to vote. However, as more fully described under "Description of Depositary
Shares" below, if the Company elects to issue Depositary Shares representing a
fraction of a share of a series of Preferred Stock, each such Depositary Share
will, in effect, be entitled to such fraction of a vote, rather than a full
vote, per Depositary Share. Since each full share of any series of Preferred
Stock of the Company shall be entitled to one vote, the voting power of such
series, on matters on which holders of such series and holders of other series
of Preferred Stock are entitled to vote as a single class, shall depend on the
number of shares in such series, not the aggregate stated value, liquidation
preference or initial offering price of the shares of such series of Preferred
Stock.
If the equivalent of six quarterly dividends payable on any series of
Preferred Stock are in default, the number of directors of the Company will be
increased by two and the holders of all outstanding series of Preferred Stock,
voting as a single class without regard to series, will be entitled to elect
such additional two directors until all dividends in default have been paid or
declared and set apart for payment.
The affirmative vote or consent of the holders of at least 66 2/3 percent
of the outstanding shares of Preferred Stock of any series, voting as a class,
will be required for any amendment to the Company's Certificate of Incorporation
(or any certificate supplemental thereto) that will adversely affect the powers,
preferences, privileges or rights of the Preferred Stock of such series. The
affirmative vote or consent of the holders of at least 66 2/3 percent of the
outstanding shares of Preferred Stock of any series and any other series of
preferred shares of the Company ranking on a parity with the Preferred Stock of
such series as to dividends or upon liquidation, voting as a single class
without regard to series, will be required to authorize, effect or validate the
creation, authorization or issue of any shares of any class of stock of the
Company ranking prior to the Preferred Stock of such series as to dividends or
upon liquidation, or the reclassification of any authorized stock of the Company
into any such prior shares, or the creation, authorization or issue of any
obligation or security convertible into or evidencing the right to purchase any
such prior shares.
Subject to such affirmative vote or consent of the holders of the
outstanding shares of Preferred Stock of any series, the Company may, by
resolution of its Board of Directors or as otherwise permitted by law, from time
to time alter or change the preferences, rights or powers of the Preferred Stock
of such series. The holders of the Preferred Stock of such series shall not be
entitled to participate in any such vote if, at or prior to the time when any
such alteration or change is to take effect, provision is made for the
redemption of all the Preferred Stock of such series at the time outstanding.
Nothing in this section shall be taken to require a class vote or consent in
connection with the authorization, designation, increase or issuance of any
shares of any class or series (including additional Preferred Stock of any
series) that rank junior to or on a parity with the Preferred Stock of such
series as to dividends and liquidation rights or in connection with the
authorization, designation, increase or issuance of any bonds, mortgages,
debentures or other obligations of the Company.
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
The Company may, at its option, elect to offer fractional shares of
Preferred Stock, rather than full shares of Preferred Stock. If such option is
exercised, the Company will issue to the public receipts for depositary shares,
each of which will represent a fraction (to be set forth in the Prospectus
Supplement relating to a
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particular series of Preferred Stock) of a share of a particular series of
Preferred Stock as described below (the "Depositary Shares").
The shares of any series of Preferred Stock represented by Depositary
Shares will be deposited under a Deposit Agreement (the "Deposit Agreement")
between the Company and a bank or trust company selected by the Company having
its principal office in the United States and having a combined capital and
surplus of at least $50,000,000 (the "Preferred Stock Depositary"). Subject to
the terms of the Deposit Agreement, each owner of a Depositary Share will be
entitled, in proportion to the applicable fraction of a share of Preferred Stock
represented by such Depositary Share, to all the rights and preferences of the
Preferred Stock represented thereby (including dividend, voting, redemption,
conversion and liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts
will be distributed to those persons purchasing the fractional shares of
Preferred Stock in accordance with the terms of the offering. Copies of the
forms of Deposit Agreement and Depositary Receipt will be filed as exhibits to,
or incorporated by reference in, the Registration Statement of which this
Prospectus is a part, and the following summary is qualified in its entirety by
reference to such exhibits.
Pending the preparation of definitive engraved Depositary Receipts, the
Preferred Stock Depositary may, upon the written order of the Company, issue
temporary Depositary Receipts. Such temporary Definitive Receipts will be
substantially identical to (and entitle the holders thereof to all the rights
pertaining to) the definitive Depositary Receipts but will not be in definitive
form. Definitive Depositary Receipts will be prepared thereafter without
unreasonable delay, and temporary Depositary Receipts will be exchangeable for
definitive Depositary Receipts at the Company's expense.
Upon surrender of Depositary Receipts at the principal office of the
Preferred Stock Depositary (unless the related Depositary Shares have previously
been called for redemption), the owner of the Depositary Shares evidenced
thereby is entitled to delivery at such office, to or upon his order, of the
number of whole shares of Preferred Stock and any money or other property
represented by such Depositary Shares. Partial shares of Preferred Stock will
not be issued. If the Depositary Receipts delivered by the holder evidence a
number of Depositary Shares in excess of the number of Depositary Shares
representing a number of whole shares of Preferred Stock to be withdrawn, the
Preferred Stock Depositary will deliver to such holder at the same time a new
Depositary Receipt evidencing such excess number of Depositary Shares. Holders
of shares of Preferred Stock thus withdrawn will not thereafter be entitled to
deposit such shares under the Deposit Agreement or to receive Depositary Shares
therefor. The Company does not expect that there will be any public trading
market for withdrawn shares of Preferred Stock.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all cash dividends or other
cash distributions received in respect of the Preferred Stock to the record
holders of Depositary Shares relating to such Preferred Stock in proportion to
the numbers of such Depositary Shares owned by such holders. The Preferred Stock
Depositary shall distribute only such amount, however, as can be distributed
without attributing to any holder of Depositary Shares a fraction of one cent,
and any balance not so distributed shall be added to and treated as part of the
next sum received by the Preferred Stock Depositary for distribution to record
holders of Depositary Shares.
In the event of a distribution other than in cash, the Preferred Stock
Depositary will distribute property received by it to the record holders of
Depositary Shares entitled thereto, unless the Preferred Stock Depositary
determines that it is not feasible to make such distribution, in which case the
Preferred Stock Depositary may, with the approval of the Company, sell such
property and distribute the net proceeds from such sale to such holders.
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REDEMPTION OF DEPOSITARY SHARES
If a series of Preferred Stock represented by Depositary Shares is subject
to redemption, the Depositary Shares will be redeemed from the proceeds received
by the Preferred Stock Depositary resulting from the redemption, in whole or in
part, of such series of Preferred Stock held by the Preferred Stock Depositary.
The Preferred Stock Depositary shall mail notice of redemption not less than 30
nor more than 60 days prior to the date fixed for redemption to the record
holders of the Depositary Shares to be so redeemed at their respective addresses
appearing in the Preferred Stock Depositary's books. The redemption price per
Depositary Share will be equal to the applicable fraction of the redemption
price per share payable with respect to such series of Preferred Stock. Whenever
the Company redeems shares of Preferred Stock held by the Preferred Stock
Depositary, the Preferred Stock Depositary will redeem as of the same redemption
date the number of Depositary Shares representing shares of Preferred Stock so
redeemed. If less than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot or pro rata as may be
determined by the Preferred Stock Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which the
holders of such Depositary Shares were entitled upon such redemption upon
surrender to the Preferred Stock Depositary of the Depositary Receipts
evidencing such Depositary Shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Preferred Stock Depositary will mail the
information contained in such notice of meeting to the record holders of the
Depositary Shares relating to such Preferred Stock. Each record holder of such
Depositary Shares on the record date (which will be the same date as the record
date for the Preferred Stock) will be entitled to instruct the Preferred Stock
Depositary as to the exercise of the voting rights pertaining to the amount of
the Preferred Stock represented by such holder's Depositary Shares. The
Preferred Stock Depositary will endeavor, insofar as practicable, to vote the
amount of the Preferred Stock represented by such Depositary Shares in
accordance with such instructions, and the Company will agree to take all action
which may be deemed necessary by the Preferred Stock Depositary in order to
enable the Preferred Stock Depositary to do so. The Preferred Stock Depositary
will abstain from voting shares of the Preferred Stock to the extent it does not
receive specific instructions from the holders of Depositary Shares representing
such Preferred Stock.
TAXATION
Owners of the Depositary Shares will be treated for Federal income tax
purposes as if they were owners of the series of Preferred Stock represented by
such Depositary Shares and, accordingly, will be entitled to take into account
for Federal income tax purposes income and deductions to which they would be
entitled if they were holders of such series of Preferred Stock. In addition,
(i) no gain or loss will be recognized for Federal income tax purposes upon the
withdrawal of Preferred Stock in exchange for Depositary Shares as provided in
the Deposit Agreement, (ii) the tax basis of each share of Preferred Stock to an
exchanging owner of Depositary Shares will, upon such exchange, be the same as
the aggregate tax basis of the Depositary Shares exchanged therefor and (iii)
the holding period for shares of the Preferred Stock in the hands of an
exchanging owner of Depositary Shares who held such Depositary Shares as a
capital asset at the time of the exchange thereof for Preferred Stock will
include the period during which such person owned such Depositary Shares.
AMENDMENT AND TERMINATION OF THE DEPOSITARY AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Preferred Stock Depositary. However, any amendment
which materially and adversely alters the rights of the holders of Depositary
Shares will not be effective unless such amendment has been approved by the
holders of at least a
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<PAGE> 34
majority of the Depositary Shares then outstanding. The Deposit Agreement may be
terminated by the Company or the Preferred Stock Depositary only if (i) all
outstanding Depositary Shares have been redeemed or (ii) there has been a final
distribution in respect of the Preferred Stock in connection with any
liquidation, dissolution or winding up of the Company and such distribution has
been distributed to the holders of Depositary Receipts.
CHARGES OF PREFERRED STOCK DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Preferred Stock Depositary in connection with the
initial deposit of the Preferred Stock and any redemption of the Preferred
Stock. Holders of Depositary Receipts will pay other transfer and other taxes
and governmental charges and such other charges as are expressly provided in the
Deposit Agreement to be for their accounts.
MISCELLANEOUS
The Preferred Stock Depositary will forward to the holders of Depositary
Shares all reports and communications from the Company which are delivered to
the Preferred Stock Depositary and which the Company is required to furnish to
the holders of the Preferred Stock.
Neither the Preferred Stock Depositary nor the Company will be liable if it
is prevented or delayed by law or any circumstance beyond its control in
performing its obligations under the Deposit Agreement. The obligations of the
Company and the Preferred Stock Depositary under the Deposit Agreement will be
limited to performance in good faith of their duties thereunder and they will
not be obligated to prosecute or defend any legal proceeding in respect of any
Depositary Shares or Preferred Stock unless satisfactory indemnity is furnished.
They may rely upon written advice of counsel or accountants, or information
provided by persons presenting Preferred Stock for deposit, holders of
Depositary Receipts or other persons believed to be competent and on documents
believed to be genuine.
RESIGNATION AND REMOVAL OF PREFERRED STOCK DEPOSITARY
The Preferred Stock Depositary may resign at any time by delivering to the
Company notice of its election to do so, and the Company may at any time remove
the Preferred Stock Depositary, any such resignation or removal to take effect
upon the appointment of a successor Preferred Stock Depositary and its
acceptance of such appointment. Such successor Preferred Stock Depositary must
be appointed within 60 days after delivery of the notice of resignation or
removal and must be a bank or trust company having its principal office in the
United States and having a combined capital and surplus of at least $50,000,000.
DESCRIPTION OF EXISTING PREFERRED STOCK AND PREFERRED PURCHASE UNITS
The outstanding Series B Preferred Stock and Series C Preferred Stock of
the Company were issued as of October 2, 1998, as part of the Merger in exchange
for two similar series of preferred stock of FCN outstanding at the effective
time of the Merger. The two series of FCN preferred stock were originally issued
by a predecessor corporation in February 1983, and February 1984, respectively.
The dividend rate on each series is adjusted quarterly, based on a formula that
considers the interest rates for selected short- and long-term U.S. Treasury
securities prevailing at the time the rate is set. The Existing Preferred Stock
ranks prior to the Company's Common Stock, both as to dividends and upon
liquidation, but has no general voting rights (except as described under
"Description of Preferred Stock -- Voting Rights"). Each series of the Existing
Preferred Stock ranks pari passu with the other series of the Existing Preferred
Stock with respect to dividends and liquidation rights.
The Series B Preferred Stock is subject to a minimum and maximum annual
dividend rate of 6.00 percent and 12.00 percent, respectively. The annualized
dividend rate for the quarterly period ended February 28, 1999, is 6.00 percent.
Shares of this series are redeemable, at the option of the Company, at
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<PAGE> 35
their stated value of $100 per share plus accrued and unpaid dividends. Shares
of this series are not convertible into other securities of the Company.
The Series C Preferred Stock is subject to a minimum and maximum annual
dividend rate of 6.50 percent and 12.50 percent, respectively. The annualized
dividend rate for the quarterly period ended February 28, 1999, is 6.50 percent.
Shares of this series are redeemable, at the option of the Company, at their
stated value of $100 per share plus accrued and unpaid dividends. Shares of this
series are not convertible into other securities of the Company.
The shares of the outstanding Existing Preferred Stock are listed on the
New York Stock Exchange. First Chicago Trust Company of New York, or an
affiliate, serves as transfer agent, registrar and dividend disbursing agent for
shares of the Existing Preferred Stock.
In addition, on May 11, 1993, the Company issued 6,000,000 Preferred
Purchase Units each of which consisted of a 30-year subordinated debenture and a
purchase contract requiring the purchase by the holder thereof on May 10, 2023
(or earlier at the Company's election) of the Company's 7 1/2% Preferred Stock
at a purchase price of $25 per share. The Company may redeem any or all of the
Preferred Purchase Units at anytime after May 10, 1998, at par, and, as a
result, some or all of the 7 1/2% Preferred Stock may not be issued by the
Company. The 7 1/2% Preferred Stock would rank prior to the Company's Common
Stock, but would have no voting rights except if the Preferred Purchase Units
were in default or the Certificate of Incorporation was proposed to be amended
in a manner adverse to the holders of the 7 1/2% Preferred Stock. The 7 1/2%
Preferred Stock would rank pari passu with each other series of Existing
Preferred Stock with respect to dividends and liquidation rights. The 7 1/2%
Preferred Stock, if issued, would not be convertible into other securities of
the Company. The shares of preferred stock which could be issued pursuant to the
purchase contracts have been reserved by the Company on its stock records.
DESCRIPTION OF PREFERRED STOCK WARRANTS
The Company may issue warrants for the purchase of Preferred Stock
("Preferred Stock Warrants"). Preferred Stock Warrants may be issued
independently or together with other Securities offered by any Prospectus
Supplement and may be attached to or separate from such other Securities. Each
series of Preferred Stock Warrants will be issued under one or more warrant
agreements (each a "Preferred Stock Warrant Agreement") to be entered into
between the Company and a bank or trust company, as preferred stock warrant
agent which will be designated in the applicable Prospectus Supplement (the
"Preferred Stock Warrant Agent"), all as set forth in the Prospectus Supplement
relating to the particular issue of Preferred Stock Warrants. The Preferred
Stock Warrant Agent will act solely as an agent of the Company in connection
with the Preferred Stock Warrants and will not assume any obligation or
relationship of agency or trust for or with any holders of Preferred Stock
Warrant Certificates or beneficial owners of Preferred Stock Warrants. The
following summaries of certain provisions of the form of Preferred Stock Warrant
Agreement and form of certificate, if any, representing the Preferred Stock
Warrants (the "Preferred Stock Warrant Certificates") do not purport to be
complete and are subject to and are qualified in their entirety by reference to,
all the provisions of the Preferred Stock Warrant Agreement and the Preferred
Stock Warrant Certificates which Agreement and Certificate will be filed as an
exhibit to or incorporated by reference in the Registration Statement of which
this Prospectus forms a part.
If Preferred Stock Warrants are offered, the applicable Prospectus
Supplement will describe the terms of such Preferred Stock Warrants, the
Preferred Stock Warrant Agreement and, if applicable, the Preferred Stock
Warrant Certificates, including the following, where applicable:
- the offering price;
- the designation, aggregate number and terms of the series of
Preferred Stock purchasable upon exercise of such Preferred Stock Warrants
and minimum number of Preferred Stock Warrants that are exercisable;
34
<PAGE> 36
- if applicable, the designation and terms of the Securities with
which such Preferred Stock Warrants are being offered and the number of
such Preferred Stock Warrants being offered with each such Security;
- if applicable, the date on and after which such Preferred Stock
Warrants and the related Securities will be transferable separately;
- the number and stated values of the series of Preferred Stock
purchasable upon exercise of each such Preferred Stock Warrant and the
price at which such number of shares of Preferred Stock of such series may
be purchased upon such exercise;
- the date on which the right to exercise such Preferred Stock
Warrants shall commence and the date on which such right shall expire;
- whether the Preferred Stock Warrants represented by the Preferred
Stock Warrant Certificates will be issued in registered or bearer form;
- information with respect to book-entry procedures, if any; and
- any other terms of such Preferred Stock Warrants for the purchase of
shares of Preferred Stock.
Preferred Stock Warrant Certificates may be exchanged for new Preferred
Stock Warrant Certificates of different denominations, may (if in registered
form) be presented for registration of transfer, and may be exercised at the
corporate trust office of the Preferred Stock Warrant Agent or any other office
indicated in the applicable Prospectus Supplement. Prior to the exercise of any
Preferred Stock Warrant, a holder thereof shall have no rights of a holder of
shares of the Preferred Stock purchasable upon such exercise, including the
right to receive payment of dividends, if any, on the underlying Preferred Stock
or the right to vote such underlying Preferred Stock.
Prospective purchasers of Preferred Stock Warrants should be aware that
special U.S. Federal income tax, accounting and other considerations may be
applicable to instruments such as Preferred Stock Warrants. The Prospectus
Supplement relating to any issue of Preferred Stock Warrants will describe such
considerations.
DESCRIPTION OF COMMON STOCK WARRANTS
The Company may issue warrants for the purchase of Common Stock ("Common
Stock Warrants"). Common Stock Warrants may be issued independently or together
with other Securities offered by any Prospectus Supplement and may be attached
to or separate from such Securities. Each series of Common Stock Warrants will
be issued under one or more warrant agreements (each a "Common Stock Warrant
Agreement") to be entered into between the Company and a bank or trust company,
as common stock warrant agent which will be designated in the applicable
Prospectus Supplement (the "Common Stock Warrant Agent"), all as set forth in
the Prospectus Supplement relating to the particular issue of Common Stock
Warrants. The Common Stock Warrant Agent will act solely as an agent of the
Company in connection with the Common Stock Warrants and will not assume any
obligation or relationship of agency or trust for or with any holders or
beneficial owners of Common Stock Warrants. The following summaries of certain
provisions of the form of Common Stock Warrant Agreement and certificate , if
any, representing Common Stock Warrants (the "Common Stock Warrant
Certificates") do not purport to be complete and are subject to and are
qualified in their entirety by reference to, all the provisions of the Common
Stock Warrant Agreement and the Common Stock Warrant Certificate which Agreement
and Certificate will be filed as an exhibit to or incorporated by reference in
the Registration Statement which this Prospectus forms a part of.
35
<PAGE> 37
If Common Stock Warrants are offered, the related Prospectus Supplement
will describe the terms of such Common Stock Warrants, the Common Stock Warrant
Agreement and, if applicable, the Common Stock Warrant Certificates, including
the following, where applicable:
- the offering price;
- the aggregate number of shares of Common Stock purchasable upon
exercise of such Common Stock Warrants and minimum number of Common Stock
Warrants that are exercisable;
- if applicable, the designation and terms of the Securities with
which such Common Stock Warrants are being offered and the number of such
Common Stock Warrants being offered with each such Security;
- if applicable, the date on and after which such Common Stock
Warrants and the related Securities will be transferable separately;
- the number of shares of Common Stock purchasable upon exercise of
each such Common Stock Warrant and the price at which such number of shares
of Common Stock may be purchased upon such exercise;
- the date on which the right to exercise such Common Stock Warrants
shall commence and the date on which such right shall expire;
- whether the Common Stock Warrants represented by the Common Stock
Warrant Certificates will be issued in registered or bearer form;
- information with respect to book-entry procedures, if any; and
- any other terms of such Common Stock Warrants for the purchase of
shares of Common Stock.
Common Stock Warrant Certificates may be exchanged for new Common Stock
Warrant Certificates of different denominations, may (if in registered form) be
presented for registration of transfer, and may be exercised at the corporate
trust office of the Common Stock Warrant Agent or any other office indicated in
the applicable Prospectus Supplement. Prior to the exercise of any Common Stock
Warrant a holder thereof shall have no rights of a holder of shares of the
Common Stock purchasable upon such exercise, including the right to receive
payments of dividends, if any, on the Common Stock purchasable upon such
exercise or to exercise any applicable right to vote.
Prospective purchasers of Common Stock Warrants should be aware that
special U.S. Federal income tax, accounting and other considerations may be
applicable to instruments such as Common Stock Warrants. The Prospectus
Supplement relating to any issue of Common Stock Warrants will describe such
considerations.
DESCRIPTION OF COMMON STOCK
GENERAL
The Company is authorized to issue 2,500,000,000 shares of common stock,
$0.01 par value per share (the "Common Stock"). As of October 2, 1998, there
were outstanding 1,179,702,784 shares of the Company's Common Stock.
Holders of the Company's Common Stock are entitled to receive dividends
when, as and if declared by the Board of Directors out of any funds legally
available therein provided that, so long as any shares of the Company's
preferred stock are outstanding, no dividends (other than dividends payable in
Common Stock) or other distributions (including redemptions and purchases) may
be made with respect to the Common Stock unless full cumulative dividends on the
Company's preferred stock have been made. Holders of the Company's Common Stock
are entitled upon the liquidation or winding up of the Company, after claims of
creditors and preferences of the Company's Existing Preferred Stock and any
other series of preferred stock hereafter authorized, to receive pro rata the
net assets of the Company.
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<PAGE> 38
The holders of the Common Stock are entitled to one vote for each share
held and are vested with all of the voting power except as the Board of
Directors of the Company has provided with respect to the outstanding shares of
the Company's Existing Preferred Stock or may provide, in the future, with
respect to any other series of preferred stock which it may hereafter authorize.
Generally, holders of the Company's Series B Preferred Stock and Series C
Preferred Stock have no voting rights.
The shares of Common Stock have non-cumulative voting rights, which means
that the holders of more than 50% of the shares of Common Stock voting for the
election of directors can elect 100% of the directors standing for election at
any meeting if they choose to do so and, in such event, the holders of the
remaining shares voting for the election of directors will not be able to elect
any person or persons to the Board of Directors of the Company at that meeting.
The Company's Certificate of Incorporation includes specific provisions
with respect to mergers and other business combinations. In general, these
provisions require that, in the case of a proposed merger or other business
combination involving the Company and an Interested Stockholder (as defined in
the Certificate of Incorporation), the approving vote of the holders of at least
a majority of the voting power of all shares of voting stock held by persons who
are not Interested Stockholders or persons affiliated with Interested
Stockholders is required, unless the business combination has been approved by a
majority of directors not affiliated with the Interested Stockholder or unless
certain conditions regarding minimum price and procedural protections are met
with respect to each class of the Company's then outstanding voting stock. The
provisions of the Certificate of Incorporation also require that the Board of
Directors will not approve a proposal for a business combination or a tender
offer until the Board of Directors has evaluated the proposal in light of its
effect on the stockholders and employees of the Company and the communities
served by the Company. These provisions of the Certificate of Incorporation
could be used to make more difficult a change in control of the Company.
The issued and outstanding shares of the Company's Common Stock are fully
paid and nonassessable. The holders of the Company's Common Stock do not have
any preemptive rights to subscribe for additional shares of capital stock of the
Company. The holders of Common Stock have no conversion rights, the Common Stock
is not subject to redemption by either the Company or a stockholder, and there
is no restriction on the purchase by the Company of shares of Common Stock
except for certain regulatory limits.
The Company's Common Stock is listed on the New York and Chicago Stock
Exchanges. First Chicago Trust Company of New York, or an affiliate thereof, is
the transfer agent, registrar and dividend disbursing agent for the Common
Stock.
PLAN OF DISTRIBUTION
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices (which may be changed from time
to time), at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. Each Prospectus
Supplement will describe the method of distribution of the Securities offered
therein.
The Company may sell Securities directly, through agents designated from
time to time, through underwriting syndicates led by one or more managing
underwriters or through one or more underwriters acting alone. Each Prospectus
Supplement will set forth the terms of the Securities to which such Prospectus
Supplement relates, including the name or names of any underwriters or agents
with whom the Company has entered into arrangements with respect to the sale of
such Securities, the public offering or purchase price of such Securities and
the net proceeds to the Company from such sale, any underwriting discounts and
other items constituting underwriters' compensation, any discounts and
commissions allowed or paid to dealers, if any, any commissions allowed or paid
to agents, and the securities exchange or exchanges, if any, on which such
Securities will be listed. Dealer trading may take place in certain of the
Securities, including Securities not listed on any securities exchange.
Securities may be purchased to be reoffered to the public through
underwriting syndicates led by one or more managing underwriters, or through one
or more underwriters acting alone. The underwriter or
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<PAGE> 39
underwriters with respect to each underwritten offering of Securities will be
named in the Prospectus Supplement relating to such offering and, if an
underwriting syndicate is used, the managing underwriter or underwriters will be
set forth on the cover page of such Prospectus Supplement. Unless otherwise set
forth in the applicable Prospectus Supplement, the obligations of the
underwriters to purchase the Securities will be subject to certain conditions
precedent and each of the underwriters with respect to a sale of Securities will
be obligated to purchase all of its Securities if any are purchased. Any initial
public offering price and any discounts or concession allowed or reallowed or
paid to dealers may be changed from time to time.
Securities may be offered and sold by the Company through agents designated
by the Company from time to time. Any agent involved in the offer and sale of
any Securities will be named, and any commissions payable by the Company to such
agent will be set forth, in the Prospectus Supplement relating to such offering.
Unless otherwise indicated in such Prospectus Supplement, any such agent will be
acting on a reasonable efforts basis for the period of its appointment.
Offers to purchase Securities may be solicited directly by the Company and
sales thereof may be made by the Company directly to institutional investors or
others who may be deemed to be underwriters within the meaning of the Securities
Act with respect to any resale thereof. The terms of any such sales will be
described in the Prospectus Supplement relating thereto. The Company may also
issue contracts under which the counterparty may be required to purchase
Securities. Such contracts would be issued with Securities in amounts, at prices
and on terms to be set forth in a Prospectus Supplement.
The anticipated place and time of delivery of Securities will be set forth
in the applicable Prospectus Supplement.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize underwriters or agents to solicit offers by certain institutions to
purchase Securities from the Company pursuant to delayed delivery contracts
providing for payment and delivery at a future date. Institutions with which
such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases such institutions must be approved by
the Company. Unless otherwise set forth in the applicable Prospectus Supplement,
the obligations of any purchaser under any such contract will not be subject to
any conditions except that (i) the purchase of the Securities shall not at the
time of delivery be prohibited under the laws of the jurisdiction to which such
purchaser is subject, and (ii) if the Securities are also being sold to
underwriters acting as principals for their own account, the underwriters shall
have purchased such Securities not sold for delayed delivery. The underwriters
and such other persons will not have any responsibility in respect of the
validity or performance of such contracts.
Any underwriter or agent participating in the distribution of the
Securities may be deemed to be an underwriter, as that term is defined in the
Securities Act, of the Securities so offered and sold and any discounts or
commissions received by them from the Company and any profit realized by them on
the sale or resale of the Securities may be deemed to be underwriting discounts
and commissions under the Securities Act.
Underwriters and agents may be entitled, under agreements entered into with
the Company, to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which such underwriters or agents may be required to
make in respect thereof. Certain of any such underwriters and agents including
their associates, may be customers of, engage in transactions with and perform
services for, the Company and its subsidiaries in the ordinary course of
business. One or more affiliates of the Company may from time to time act as an
agent or underwriter in connection with the sale of the Securities to the extent
permitted by applicable law. The participation of any such affiliate in the
offer and sale of the Securities will comply with Rule 2720 of the Conduct Rules
of the National Association of Securities Dealers, Inc. regarding the offer and
sale of securities of an affiliate.
This Prospectus and related Prospectus Supplements may be used by one or
more affiliates of the Company in connection with offers and sales related to
secondary market transactions in the Securities to the
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<PAGE> 40
extent permitted by applicable law. Any such affiliate may act as principal or
agent in such transactions. Such sales will be made at prices related to
prevailing market prices at the time of sale.
LEGAL OPINIONS
Certain legal matters relating to the Securities offered hereby will be
passed upon for the Company by Sherman I. Goldberg, General Counsel and
Secretary of the Company, and for any underwriters, selling agents and certain
other purchasers by Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue,
New York, New York 10019. Cravath, Swaine & Moore performs legal services for
the Company from time to time.
EXPERTS
The consolidated financial statements of BANC ONE and its subsidiaries,
incorporated in this Prospectus by reference to the BANC ONE Annual Report on
Form 10-K for the year ended December 31, 1997, have been audited by
PricewaterhouseCoopers LLP, independent accountants, as set forth in their
report dated February 12, 1998 accompanying such financial statements, and are
incorporated herein by reference in reliance upon the report of such firm, which
report is given upon their authority as experts in accounting and auditing.
The consolidated financial statements of FCN included in the Annual Report
on Form 10-K for the year ended December 31, 1997, incorporated herein by
reference have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are
incorporated herein by reference in reliance upon the authority of said firm as
expert in accounting and auditing in giving said report.
The supplemental consolidated financial statements of the Company appearing
in the Current Report on Form 8-K dated October 6, 1998 have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are incorporated herein by reference in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said report.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
SEC Filing Fee.............................................. $2,780,000
Rating Agency Fees.......................................... 800,000*
Legal Fees and Expenses..................................... 100,000*
Trustees' Fees and Expenses................................. 150,000*
Printing and Engraving Expenses............................. 200,000*
Accounting Fees and Expense................................. 300,000*
Miscellaneous Expenses...................................... 20,000*
----------
Total............................................. $4,350,000*
==========
</TABLE>
- ---------------
* Estimated
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Registrant is a Delaware corporation. Section 145 of the General
Corporation Law of the State of Delaware contains detailed provisions on
indemnification of directors and officers of a Delaware corporation against
expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred in connection with certain litigation.
The Registrant's Restated Certificate of Incorporation (the "Certificate"),
provides for indemnification of directors and officers. The Registrant's
Certificate provides that the Registrant will indemnify each director, officer,
employee or agent of the Registrant or any individual serving in such a capacity
with another business entity at the Registrant's request (an "Indemnitee") to
the full extent permitted by the General Corporation Law of the State of
Delaware ("Delaware Law") or any other applicable laws as presently or
hereinafter in effect against all expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such Indemnitee in connection therewith. The Registrant's Certificate also
authorizes the Registrant to enter into agreements with any person providing for
indemnification greater or different than that provided therein. The
Registrant's Certificate provides that expenses incurred by a director, officer
or employee in defending an action, suit or proceeding shall be paid by the
Registrant in advance of the final disposition of such action upon receipt of an
undertaking by or on behalf of such person that he will repay such amount if it
is ultimately determined that he is not entitled to be indemnified by the
Registrant. The Registrant's Certificate and the Delaware Law also provide that
the indemnification provisions of the Registrant's Certificate and the statute
are not exclusive of any other right to which a person seeking indemnification
and advancement of expenses may be entitled under any statute, by-laws,
agreement, vote of stockholders or disinterested directors or otherwise.
The directors and officers of the Registrant are covered by an insurance
policy indemnifying them against certain civil liabilities, including
liabilities under the federal securities laws, which might be incurred by them
in such capacity.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
Registrant pursuant to the foregoing provisions, the Registrant has been
informed that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
II-1
<PAGE> 42
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
1.1 Form of Debt Securities Underwriting Agreement (incorporated
by reference to Exhibit 1.1 to the BANC ONE CORPORATION'S
Registration Statement on Form S-3, File No. 33-60807).
1.2 Form of Debt Securities Distribution Agreement (incorporated
by reference to Exhibit 1.2 to the BANC ONE CORPORATION'S
Registration Statement on Form S-3 (File No. 333-22413).
1.3 Form of Warrant Underwriting Agreement.**
1.4 Form of Preferred Stock Underwriting Agreement.**
1.5 Form of Common Stock Underwriting Agreement.**
3.1 Restated Certificate of Incorporation, of the Registrant.
3.2 By-laws of the Registrant (incorporated by reference to
Exhibit 3.2 to the Registrant's Registration Statement on
Form S-3 (File No. 333-65427)).
4.1 Form of Indenture relating to senior securities between the
Registrant and The Chase Manhattan Bank, as trustee
(incorporated by reference to Exhibit 4.1 to BANC ONE
CORPORATION'S Registration Statement on Form S-3 (File No.
333-22413)).
4.1 (b) Form of First Supplemental Indenture relating to senior
securities between the Registrant and The Chase Manhattan
Bank, as trustee (incorporated by reference to Exhibit
4.1(b) to the Registrant's Registration Statement on Form
S-3 (File No. 333-38387)).
4.2 Form of Indenture relating to subordinated securities
between the Registrant and The Chase Manhattan Bank, as
trustee (incorporated by reference to Exhibit 4.2 to BANC
ONE CORPORATION'S Registration Statement on Form S-3 (File
No. 333-22413)).
4.2(b) Form of First Supplemental Indenture relating to
subordinated securities between the Registrant and The Chase
Manhattan Bank, as trustee (incorporated by reference to
Exhibit 4.2(b) to the Registrant's Registration Statement on
Form S-3 (File No. 333-38387)).
4.3 Form of Senior Note (incorporated by reference to Exhibit
4.3 to the Registrant's Registration Statement on Form S-3
(File No. 333-38387)).
4.4 Form of Subordinated Note (incorporated by reference to
Exhibit 4.4 to the Registrant's Registration Statement on
Form S-3 (File No. 333-38387)).
4.5 Form of Senior Medium-Term Note (Fixed Rate) (incorporated
by reference to Exhibit 4.5 to the Registrant's Registration
Statement on Form S-3 (File No. 333-38387)).
4.6 Form of Senior Medium-Term Note (Floating Rate)
(incorporated by reference to Exhibit 4.6 to the
Registrant's Registration Statement on Form S-3 (File No.
333-38387)).
4.7 Form of Subordinated Medium-Term Note (Fixed Rate)
(incorporated by reference to Exhibit 4.7 to the
Registrant's Registration Statement on Form S-3 (File No.
333-38387)).
4.8 Form of Subordinated Medium-Term Note (Floating Rate)
(incorporated by reference to Exhibit 4.8 to the
Registrant's Registration Statement on Form S-3 (File No.
333-38387)).
4.9 Form of Debt Warrant Agreement (for Warrants attached to
Debt Securities, including form of Debt Warrant
Certificate).**
4.10 Form of Debt Warrant Agreement (for Warrants not attached to
Debt Securities, including form of Debt Warrant
Certificate).**
4.11 Form of Currency Warrant Agreement (including form of Global
Warrant Certificate).**
4.12 Form of Stock Index Warrant Agreement (including form of
Stock Index Warrant Certificate).**
</TABLE>
II-2
<PAGE> 43
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
4.13 Form of Other Warrant Agreement (including form of Other
Warrant Certificate).**
4.14 Form of Deposit Agreement, with form of Depositary Receipt
as an exhibit thereto.**
4.15 Form of Preferred Stock Warrant Agreement (including form of
Preferred Stock Warrant Certificate).**
4.16 Form of Common Stock Warrant Agreement (including form of
Common Stock Warrant Certificate).**
5 Opinion of Sherman I. Goldberg, Secretary and General
Counsel of the Registrant, including consent.
12 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Sherman I. Goldberg, Secretary and General
Counsel of the Registrant (included in Exhibit 5).
23.3 Consent of Arthur Andersen LLP.
23.4 Consent of Arthur Andersen LLP.
24 Powers of Attorney.
25.1 Form T-1 Statement of Eligibility of The Chase Manhattan
Bank under the Trust Indenture Act of 1939 with respect to
senior Debt Securities.
25.2 Form T-1 Statement of Eligibility of The Chase Manhattan
Bank under the Trust Indenture Act of 1939 with respect to
subordinated Debt Securities.
</TABLE>
- ---------------
** To be incorporated by reference herein in connection with the offering of
each series of Securities.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement: (i) to
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933; (ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement (notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement); and (iii) to include any material
information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement. Provided, however, that (1)(i)
and (1)(ii) do not apply if the information required to be included in a
post-effective amendment by those items is contained in periodic reports
filed by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference to this
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
II-3
<PAGE> 44
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the provisions described
under Item 15 above or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted
against the Registrant by such director, officer or controlling person in
connection with the securities being registered, the Registrant will,
unless the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
(6) To file an application for the purpose of determining the
eligibility of the trustee to act under subsection (a) of Section 310 of
the Trust Indenture Act in accordance with the rules and regulations
prescribed by the Commission under Section 305(b)(2) of the Trust Indenture
Act.
II-4
<PAGE> 45
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this Registration Statement on Form S-3 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State of
Illinois, on February 23, 1999.
BANK ONE CORPORATION
By: /s/ M. EILEEN KENNEDY
------------------------------------
M. Eileen Kennedy
Treasurer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ JOHN H. BRYAN* Director February 23, 1999
- -----------------------------------------------------
John H. Bryan
/s/ SIEGFRIED BUSCHMANN* Director February 23, 1999
- -----------------------------------------------------
Siegfried Buschmann
/s/ JAMES S. CROWN* Director February 23, 1999
- -----------------------------------------------------
James S. Crown
/s/ BENNETT DORRANCE* Director February 23, 1999
- -----------------------------------------------------
Bennett Dorrance
/s/ DR. MAUREEN A. FAY, O.P.* Director February 23, 1999
- -----------------------------------------------------
Dr. Maureen A. Fay, O.P.
/s/ JOHN R. HALL* Director February 23, 1999
- -----------------------------------------------------
John R. Hall
/s/ VERNE G. ISTOCK* Director February 23, 1999
- -----------------------------------------------------
Verne G. Istock
/s/ LABAN P. JACKSON, JR.* Director February 23, 1999
- -----------------------------------------------------
Laban P. Jackson, Jr.
/s/ JOHN W. KESSLER* Director February 23, 1999
- -----------------------------------------------------
John W. Kessler
/s/ RICHARD J. LEHMANN* Director February 23, 1999
- -----------------------------------------------------
Richard J. Lehmann
/s/ WILLIAM G. LOWRIE* Director February 23, 1999
- -----------------------------------------------------
William G. Lowrie
Director February 23, 1999
- -----------------------------------------------------
Richard A. Manoogian
</TABLE>
II-5
<PAGE> 46
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
Director February 23, 1999
- -----------------------------------------------------
William T. McCormick
/s/ JOHN B. MCCOY* Director and Principal February 23, 1999
- ----------------------------------------------------- Executive Officer
John B. McCoy
/s/ THOMAS E. REILLY, JR.* Director February 23, 1999
- -----------------------------------------------------
Thomas E. Reilly, Jr.
/s/ JOHN W. ROGERS, JR.* Director February 23, 1999
- -----------------------------------------------------
John W. Rogers, Jr.
/s/ THEKLA R. SHACKELFORD* Director February 23, 1999
- -----------------------------------------------------
Thekla R. Shackelford
/s/ ALEX SHUMATE* Director February 23, 1999
- -----------------------------------------------------
Alex Shumate
/s/ FREDERICK P. STRATTON, JR.* Director February 23, 1999
- -----------------------------------------------------
Frederick P. Stratton, Jr.
/s/ JOHN C. TOLLESON* Director February 23, 1999
- -----------------------------------------------------
John C. Tolleson
/s/ DAVID J. VITALE* Director February 23, 1999
- -----------------------------------------------------
David J. Vitale
/s/ ROBERT D. WALTER* Director February 23, 1999
- -----------------------------------------------------
Robert D. Walter
/s/ ROBERT A. ROSHOLT* Principal Financial Officer February 23, 1999
- -----------------------------------------------------
Robert A. Rosholt
/s/ WILLIAM J. ROBERTS* Principal Accounting Officer February 23, 1999
- -----------------------------------------------------
William J. Roberts
</TABLE>
- ---------------
* The undersigned, by signing her name hereto, does hereby sign this
Registration Statement on behalf of each of the above-indicated directors and
officers of the Registrant pursuant to a power of attorney signed by such
directors and officers.
/s/ M. EILEEN KENNEDY
--------------------------------------
M. Eileen Kennedy
Attorney-in-Fact
II-6
<PAGE> 47
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
NO. DESCRIPTION NUMBER
------- ----------- ------
<C> <S> <C>
1.1 Form of Debt Securities Underwriting Agreement (incorporated
by reference to Exhibit 1.1 to the BANC ONE CORPORATION'S
Registration Statement on Form S-3, File No. 33-60807).
1.2 Form of Debt Securities Distribution Agreement (incorporated
by reference to Exhibit 1.2 to the BANC ONE CORPORATION'S
Registration Statement on Form S-3 (File No. 333-22413).
1.3 Form of Warrant Underwriting Agreement.**
1.4 Form of Preferred Stock Underwriting Agreement.**
1.5 Form of Common Stock Underwriting Agreement.**
3.1 Restated Certificate of Incorporation, of the Registrant.
3.2 By-laws of the Registrant (incorporated by reference to
Exhibit 3.2 to the Registrant's Registration Statement on
Form S-3 (File No. 333-65427)).
4.1 Form of Indenture relating to senior securities between the
Registrant and The Chase Manhattan Bank, as trustee
(incorporated by reference to Exhibit 4.1 to BANC ONE
CORPORATION'S Registration Statement on Form S-3 (File No.
333-22413)).
4.1 (b) Form of First Supplemental Indenture relating to senior
securities between the Registrant and The Chase Manhattan
Bank, as trustee (incorporated by reference to Exhibit
4.1(b) to the Registrant's Registration Statement on Form
S-3 (File No. 333-38387)).
4.2 Form of Indenture relating to subordinated securities
between the Registrant and The Chase Manhattan Bank, as
trustee (incorporated by reference to Exhibit 4.2 to BANC
ONE CORPORATION'S Registration Statement on Form S-3 (File
No. 333-22413)).
4.2(b) Form of First Supplemental Indenture relating to
subordinated securities between the Registrant and The Chase
Manhattan Bank, as trustee (incorporated by reference to
Exhibit 4.2(b) to the Registrant's Registration Statement on
Form S-3 (File No. 333-38387)).
4.3 Form of Senior Note (incorporated by reference to Exhibit
4.3 to the Registrant's Registration Statement on Form S-3
(File No. 333-38387)).
4.4 Form of Subordinated Note (incorporated by reference to
Exhibit 4.4 to the Registrant's Registration Statement on
Form S-3 (File No. 333-38387)).
4.5 Form of Senior Medium-Term Note (Fixed Rate) (incorporated
by reference to Exhibit 4.5 to the Registrant's Registration
Statement on Form S-3 (File No. 333-38387)).
4.6 Form of Senior Medium-Term Note (Floating Rate)
(incorporated by reference to Exhibit 4.6 to the
Registrant's Registration Statement on Form S-3 (File No.
333-38387)).
4.7 Form of Subordinated Medium-Term Note (Fixed Rate)
(incorporated by reference to Exhibit 4.7 to the
Registrant's Registration Statement on Form S-3 (File No.
333-38387)).
4.8 Form of Subordinated Medium-Term Note (Floating Rate)
(incorporated by reference to Exhibit 4.8 to the
Registrant's Registration Statement on Form S-3 (File No.
333-38387)).
4.9 Form of Debt Warrant Agreement (for Warrants attached to
Debt Securities, including form of Debt Warrant
Certificate).**
</TABLE>
<PAGE> 48
<TABLE>
<CAPTION>
EXHIBIT PAGE
NO. DESCRIPTION NUMBER
------- ----------- ------
<C> <S> <C>
4.10 Form of Debt Warrant Agreement (for Warrants not attached to
Debt Securities, including form of Debt Warrant
Certificate).**
4.11 Form of Currency Warrant Agreement (including form of Global
Warrant Certificate).**
4.12 Form of Stock Index Warrant Agreement (including form of
Stock Index Warrant Certificate).**
4.13 Form of Other Warrant Agreement (including form of Other
Warrant Certificate).**
4.14 Form of Deposit Agreement, with form of Depositary Receipt
as an exhibit thereto.**
4.15 Form of Preferred Stock Warrant Agreement (including form of
Preferred Stock Warrant Certificate).**
4.16 Form of Common Stock Warrant Agreement (including form of
Common Stock Warrant Certificate).**
5 Opinion of Sherman I. Goldberg, Secretary and General
Counsel of the Registrant, including consent.
12 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Sherman I. Goldberg, Secretary and General
Counsel of the Registrant (included in Exhibit 5).
23.3 Consent of Arthur Andersen LLP.
23.4 Consent of Arthur Andersen LLP.
24 Powers of Attorney.
25.1 Form T-1 Statement of Eligibility of The Chase Manhattan
Bank under the Trust Indenture Act of 1939 with respect to
senior Debt Securities.
25.2 Form T-1 Statement of Eligibility of The Chase Manhattan
Bank under the Trust Indenture Act of 1939 with respect to
subordinated Debt Securities.
</TABLE>
- ---------------
** To be incorporated by reference herein in connection with the offering of
each series of Securities.
<PAGE> 1
EXHIBIT 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
BANK ONE CORPORATION
BANK ONE CORPORATION, a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), originally filed its
Certificate of Incorporation on April 9, 1998, under the name "Hornet
Reorganization Corporation." This Restated Certificate of Incorporation (the
"Restated Certificate") has been duly adopted in accordance with Section 245 of
the General Corporation Law of the State of Delaware. The Restated Certificate
only restates and integrates and does not further amend the provisions of the
Corporation's Certificate of Incorporation, as amended (the "Certificate"), and
there is no discrepancy between the provisions of the Certificate and the
provisions of the Restated Certificate. The Certificate is hereby restated to
read in its entirety as follows:
FIRST. The name of the corporation is
BANK ONE CORPORATION.
SECOND. The address of its registered office in the State of Delaware
is 1209 Orange Street, County of New Castle, Wilmington, Delaware 19801. The
name of its registered agent at such address is The Corporation Trust Company.
THIRD. The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
FOURTH. The total number of shares of all classes of stock which the
Corporation shall have authority to issue is two billion five hundred fifty
million (2,550,000,000) shares which shall be divided into two classes as
follows:
(a) Two billion five hundred million (2,500,000,000) shares of common
stock, par value $0.01 per share("Common Stock"); and
(b) Fifty million (50,000,000) shares of Preferred Stock, par value
$0.01 per share ("Preferred Stock").
The designations, voting powers, preferences and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions of the above classes of stock and other general provisions
relating thereto shall be as follows:
PART I
PREFERRED STOCK
(a) Shares of Preferred Stock may be issued in one or more series at
such time or times and for such consideration or considerations as the Board of
Directors may determine. All shares
1
<PAGE> 2
of any one series shall be of equal rank and identical in all respects except
that the dates from which dividends accrue or accumulate with respect thereto
may vary.
(b) The Board of Directors is expressly authorized at any time, and
from time to time, to provide for the issuance of shares of Preferred Stock in
one or more series, with such voting powers, full or limited, or without voting
powers, and with such designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, as shall be stated and expressed in the resolution or
resolutions providing for the issue thereof adopted by the Board of Directors,
and as are not stated and expressed in this Restated Certificate, or any
amendment thereto, including (but without limiting the generality of the
foregoing) the following:
(i) The distinctive designation and number of shares
comprising such series, which number may (except where otherwise provided by the
Board of Directors in creating such series) be increased or decreased (but not
below the number of shares then outstanding) from time to time by action of the
Board of Directors.
(ii) The dividend rate or rates on the shares of such series
and the relation which such dividends shall bear to the dividends payable on any
other class of capital stock or on any other series of Preferred Stock, the
terms and conditions upon which and the periods in respect of which dividends
shall be payable, whether and upon what conditions such dividends shall be
cumulative and, if cumulative, the date or dates from which dividends shall
accumulate.
(iii) Whether the shares of such series shall be redeemable,
and, if redeemable, whether redeemable for cash, property or rights, including
securities of any other corporation, at the option of either the holder or the
corporation or upon the happening of a specified event, the limitations and
restrictions with respect to such redemption, the time or times when, the price
or prices or rate or rates at which, the adjustments with which and the manner
in which such shares shall be redeemable, including the manner of selecting
shares of such series for redemption if less than all shares are to be redeemed.
(iv) The rights to which the holders of shares of such series
shall be entitled, and the preferences, if any, over any other series (or of any
other series over such series), upon the voluntary or involuntary liquidation,
dissolution, distribution or winding up of the corporation, which rights may
vary depending on whether such liquidation, dissolution, distribution or winding
up is voluntary or involuntary, and, if voluntary, may vary at different dates.
(v) Whether the shares of such series shall be subject to the
operation of a purchase, retirement or sinking fund, and, if so, whether and
upon what conditions such purchase, retirement or sinking fund shall be
cumulative or noncumulative, the extent to which and the manner in which such
fund shall be applied to the purchase or redemption of the shares of such series
for retirement or to other corporate purposes and the terms and provisions
relative to the operation thereof.
(vi) Whether the shares of such series shall be convertible
into or exchangeable for shares of any other class or of any other series of any
class of capital stock of the corporation, and, if so convertible or
exchangeable, the price or prices or the rate or rates of conversion or exchange
and the method, if any, of adjusting the same, and any other terms and
conditions of such conversion or exchange.
2
<PAGE> 3
(vii) The voting powers, full and/or limited, if any, of the
shares of such series, and whether and under what conditions the shares of such
series (along or together with the shares of one or more other series having
similar provisions) shall be entitled to vote separately as a single class, for
the election of one or more additional directors of the corporation in case of
dividend arrearages or other specified events, or upon other matters.
(viii) Whether the issuance of any additional shares of such
series, or of any shares of any other series, shall be subject to restrictions
as to issuance, or as to the powers, preferences or rights of any such other
series.
(ix) Any other preferences, privileges and powers and
relative, participating, optional or other special rights, and qualifications,
limitations or restrictions of such series, as the Board of Directors may deem
advisable and as shall not be inconsistent with the provisions of this Restated
Certificate.
(c) Unless and except to the extent otherwise required by law or
provided in the resolution or resolutions of the Board of Directors creating any
series of Preferred Stock pursuant to this Part I, the holders of the Preferred
Stock shall have no voting power with respect to any matter whatsoever. In no
event shall the Preferred Stock be entitled to more than one vote in respect of
each share of stock.
(d) Shares of Preferred Stock redeemed, converted, exchanged,
purchased, retired or surrendered to the corporation, or which have been issued
and reacquired in any manner, may, upon compliance with any applicable
provisions of the General Corporation Law of the State of Delaware, be given the
status of authorized and unissued shares of Preferred Stock and may be reissued
by the Board of Directors as part of the series of which they were originally a
part or may be reclassified into and reissued as part of a new series or as a
part of any other series, all subject to the protective conditions or
restrictions of any outstanding series of Preferred Stock.
(e) Pursuant to the authority conferred by this Article FOURTH upon the
Board of Directors, the two series of Preferred Stock described in Annexes A and
B, which are attached hereto and incorporated herein by reference, have been
designated by the Board of Directors, each such series consisting of such number
of shares, and having such relative rights, preferences and limitations thereof
as are stated and expressed in such Annexes A and B with respect to such series.
PART II
COMMON STOCK
(a) Except as otherwise required by law or by any amendment to this
Restated Certificate, each holder of Common Stock shall have one vote for each
share of stock held by him on all matters voted upon by the stockholders.
(b) Subject to the preferential dividend rights, if any, applicable to
shares of Preferred Stock and subject to applicable requirements, if any, with
respect to the setting aside of sums for purchase, retirement or sinking funds
for Preferred Stock, the holders of Common Stock shall be
3
<PAGE> 4
entitled to receive, to the extent permitted by law, such dividends as may be
declared from time to time by the Board of Directors.
(c) In the event of the voluntary or involuntary liquidation,
dissolution, distribution of assets or winding up of the corporation, after
distribution in full of the preferential amounts, if any, to be distributed to
the holders of shares of Preferred Stock, holders of Common Stock shall be
entitled to receive all of the remaining assets of the corporation of whatever
kind available for distribution to stockholders ratably in proportion to the
number of shares of Common Stock held by them respectively. The Board of
Directors may distribute in kind to the holders of Common Stock such remaining
assets of the corporation, or may sell, transfer, or otherwise dispose of all or
any part of such remaining assets to any corporation, trust or entity, or any
combination thereof, and may sell all or any part of the consideration so
received and distribute any balance thereof in kind to holders of Common Stock.
The merger or consolidation of the corporation into or with any other
corporation, or the merger of any other corporation into it, or any purchase or
redemption of shares of stock of the corporation of any class, shall not be
deemed to be a dissolution, liquidation or winding up of the corporation for the
purposes of this paragraph.
(d) Such numbers of shares of Common Stock as may from time to time be
required for such purpose shall be reserved for issuance (i) upon conversion of
any shares of Preferred Stock or any obligation of the corporation convertible
into shares of Common Stock which is at the time outstanding or issuable upon
exercise of any options or warrants at the time outstanding and (ii) upon
exercise of any options or warrants at the time outstanding to purchase shares
of Common Stock.
PART III
GENERAL PROVISIONS
(a) At any meeting of stockholders, the presence in person or by proxy
of the holders of record of a majority of the outstanding shares of stock of the
corporation entitled to be voted at such meeting shall constitute a quorum for
all purposes, except as otherwise provided by this Restated Certificate or
required by applicable law.
(b) Subject to the protective conditions or restrictions of any
outstanding series of Preferred Stock, any amendment to this Restated
Certificate which shall increase or decrease the authorized capital stock of any
class or classes may be adopted by the affirmative vote of the holders of a
majority of the stock of the corporation entitled to vote.
(c) No holder of stock of any class of the corporation shall be
entitled as a matter of right to purchase or subscribe for any part of any
unissued stock of any class, or of any additional stock of any class of capital
stock of the corporation, or of any bonds, certificates of indebtedness,
debentures, or other securities, whether or not convertible into stock of the
corporation, now or hereafter authorized, but any such stock or other securities
may be issued and disposed of pursuant to resolution by the Board of Directors
to such persons, firms, corporations or associations and upon such terms and for
such consideration (not less than the par value or stated value thereof) as the
Board of Directors in the exercise of its discretion may
4
<PAGE> 5
determine and may be permitted by law without action by the stockholders. The
Board of Directors may provide for payment therefor to be received by the
corporation in cash, personal property, real property (or leases thereof) or
services. Any and all shares of stock so issued for which the consideration so
fixed has been paid or delivered, shall be deemed fully paid and not liable to
any further call or assessment.
FIFTH. Subject to any provision contained in any resolution of the
Board of Directors adopted pursuant to Part I of Article Fourth of this Restated
Certificate requiring an increase or increases in the number of directors, the
number of directors constituting the Board of Directors shall be that number as
shall be fixed from time to time in the manner provided by Article Tenth of this
Restated Certificate and by By-laws in conformity therewith. Election of
directors need not be by written ballot unless the By-laws of the corporation
shall so provide.
In addition to all of the powers conferred by statute, the Board of
Directors is expressly authorized to make, alter or repeal the By-laws of the
corporation.
Wherever the term "Board of Directors" is used in this Restated
Certificate, such term shall mean the Board of Directors of the corporation;
provided, however, that, to the extent any committee of directors of the
corporation is lawfully entitled to exercise the powers of the Board of
Directors, such committee may exercise any right or authority of the Board of
Directors under this Restated Certificate.
SIXTH. No contract or transaction between the corporation and one or
more of its directors or officers, or between the corporation and any other
corporation, partnership, association, or other organization in which one or
more of its directors or officers are directors or officers, or have a financial
interest, shall be void or voidable solely for this reason, or solely because
the director or officer is present at or participates in the meeting of the
Board of Directors or committee thereof which authorizes the contract or
transaction, or solely because his or their votes are counted for such purpose,
if:
(a) The material facts as to his relationship or interest and as to the
contract or transaction are disclosed or are known to the Board of Directors or
the committee, and the Board of Directors or committee in good faith authorizes
the contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less than a
quorum; or
(b) The material facts as to his relationship or interest and as to the
contract or transaction are disclosed or are known to the stockholders entitled
to vote thereon, and the contract or transaction is specifically approved in
good faith by vote of the stockholders; or
(c) The contract or transaction is fair as to the corporation as of the
time it is authorized, approved or ratified, by the Board of Directors, a
committee thereof, or the stockholders.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or of a committee
which authorizes the contract or transaction.
SEVENTH. (a) The corporation shall indemnify any person who was or is a
party, or is threatened to be made a party, to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative by reason of the fact that he is or was a
5
<PAGE> 6
director, officer or employee of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, to the
fullest extent permitted by the General Corporation Law of the State of
Delaware, as the same exists or may hereafter be amended (but, in the case of
any such amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification rights than said law permitted
the corporation to provide prior to such amendment) or any other applicable laws
as presently or hereinafter in effect against all expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection therewith. Without limiting the generality of the
foregoing, the corporation may enter into one or more agreements with any person
that provide for indemnification greater or different than that provided in this
Article Seventh.
(b) Expenses incurred by a director, officer or employee in defending a
civil or criminal action, suit or proceeding shall be paid by the corporation in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of the director, officer or employee to repay
such amount if it shall ultimately be determined that he is not entitled to be
indemnified by the corporation.
(c) The indemnification and advancement of expenses provided by this
Article shall not be deemed exclusive of any other rights to which a person
seeking indemnification and advancement of expenses may be entitled under any
statute, by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefits of the
heirs, executors and administrators of such a person.
(d) For the purposes of this Article Seventh, references to "the
corporation" include, in addition to the resulting or surviving corporation, any
constituent corporation (including any constituent of a constituent) absorbed in
a consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, and employees
or agents, so that any person who is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under the provisions of this Article Seventh
with respect to the resulting or surviving corporation as he would have with
respect to such constituent corporation if its separate existence had continued.
(e) Neither the corporation nor its directors or officers nor any
person acting on its behalf shall be liable to any person for any determination
as to the existence or absence of conduct that would provide a basis for making
or refusing to make any payment under this Article Seventh, in reliance upon the
advice of counsel.
(f) A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholder, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
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violation of law, (iii) under Section 174 of the General Corporation Law of the
State of Delaware or (iv) for any transaction from which the director derived
any improper personal benefit. If the General Corporation Law of the State of
Delaware is hereafter amended to authorize corporate action further eliminating
or limiting the personal liability of directors, then the liability of a
director of the corporation shall be eliminated or limited to the fullest extent
permitted by the General Corporation Law of the State of Delaware, as so
amended.
Any repeal or modification of the foregoing paragraph by the
stockholders of the corporation shall not adversely affect any right or
protection of a director of the corporation existing at the time of such repeal
or modification.
(g) Neither the amendment nor repeal of this Article Seventh, nor the
adoption of any provision of this Restated Certificate inconsistent with this
Article Seventh, shall eliminate or reduce the effect of this Article Seventh in
respect of any matter occurring, or any cause of action, suit or claim that
would accrue or arise, prior to such amendment, repeal or adoption of an
inconsistent provision.
EIGHTH. The corporation shall have perpetual existence.
NINTH. The corporation reserves the right to amend, alter, change or
repeal any provision contained in this Restated Certificate, in the manner now
or hereafter prescribed by the laws of Delaware, and all rights conferred herein
upon stockholders and directors are granted subject to this reservation.
TENTH. Board of Directors.
(a) Number, Election and Terms of Directors: The business and affairs
of the corporation shall be managed by or under the direction of a Board of
Directors. The number of the directors of the corporation shall be fixed from
time to time by resolution adopted by the affirmative vote of a majority of the
entire Board of Directors of the corporation, except that the minimum number of
directors shall be fixed at no less than eleven (11) and the maximum number of
directors shall be fixed at no more than thirty (30). At each annual meeting of
stockholders, successors of the directors shall be elected for a term expiring
at the annual meeting next following such annual meeting.
(b) Stockholder Nomination of Director Candidates: Nominations for
election to the Board of Directors of the corporation at a meeting of
stockholders may be made by the Board of Directors, on behalf of the Board of
Directors by any nominating committee appointed by the Board of Directors, or by
any stockholder of the corporation entitled to vote for the election of
directors at the meeting. Nominations, other than those made by or on behalf of
the Board of Directors, shall be made by notice in writing delivered to or
mailed, postage prepaid, and received by the Secretary of the corporation at
least 60 days but no more than 90 days prior to the anniversary date of the
immediately preceding Annual Meeting of Stockholders. The notice shall set forth
(i) the name and address of the stockholder who intends to make the nomination;
(ii) the name, age, business address and, if known, residence address of each
nominee; (iii) the principal occupation or employment of each nominee; (iv) the
number of shares of stock of the corporation which are beneficially owned by
each nominee and by the nominating stockholder; (v) any other information
concerning the nominee that must be disclosed of nominees in proxy solicitation
pursuant to Regulation 14A of the Securities Exchange Act of 1934 (or any
subsequent
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provisions replacing such Regulation); and (vi) the executed consent of each
nominee to serve as a director of the corporation, if elected. The chairman of
the meeting of stockholders may, if the facts warrant, determine that a
nomination was not made in accordance with the foregoing procedures, and if the
chairman should so determine, the chairman shall so declare to the meeting and
the defective nomination shall be disregarded.
(c) Newly Created Directorships and Vacancies: Newly created
directorships resulting from any increase in the number of directors and any
vacancies on the Board of Directors resulting from death, resignation,
disqualification, removal or other cause shall be filled by the affirmative vote
of a majority of the remaining directors then in office, even though less than a
quorum, or by a sole remaining director. A director, including any director
chosen to fill a newly created directorship or any vacancy, shall hold office
until the next annual meeting following his election or appointment to the Board
of Directors, as applicable, and until such director's successor shall have been
elected and qualified. In no case will a decrease in the number of directors
shorten the term of any incumbent director.
(d) Preferred Stock: Notwithstanding the foregoing paragraphs, whenever
the holders of any one or more classes or series of Preferred Stock issued by
the corporation shall have the right, voting separately by class or series, to
elect directors at an annual or special meeting of stockholders, the election,
term of office, filling of vacancies and other features of such directorships
shall be governed by the terms of the Certificate of Incorporation applicable
thereto. The then authorized number of directors of the corporation shall be
increased by the number of additional directors to be elected, and such
directors so elected shall not be divided into classes pursuant to this Article
Tenth unless expressly provided by such terms.
ELEVENTH. Stockholder Action.
Any action required or permitted to be taken by any stockholders of the
corporation must be effected at a duly called annual or special meeting of such
stockholders and may not be effected by any consent in writing by such
stockholders. Except as may be otherwise required by law, special meetings of
stockholders of the corporation may be called only by the Board of Directors
pursuant to a resolution approved by a majority of the Board of Directors.
Notwithstanding anything contained in this Restated Certificate or the By-laws
of the corporation to the contrary, the affirmative vote of at least 80% of the
voting power of all the shares of the corporation entitled to vote generally in
the election of directors, voting together as a single class, shall be required
to alter, amend or adopt any provision inconsistent with the purpose and intent
of this Article Eleventh.
TWELFTH. (a) In addition to any affirmative vote required by law or by
or under this Restated Certificate or the By-laws and except as otherwise
expressly herein provided in this Article Twelfth, the approval or authorization
of a Business Combination (which together with certain other terms used in this
Article, are hereinafter defined) shall require the affirmative vote of a
majority of the voting power of all the shares of Voting Stock held by
stockholders other than an Interested Stockholder, with which or by or on whose
behalf, directly or indirectly, a Business Combination is proposed, voting
together as a single class. Such affirmative vote shall be required
notwithstanding the fact that no vote may be required or that a lesser
percentage or separate class vote may be otherwise required.
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(b) The provisions of paragraph (a) of this Article Twelfth shall not
be applicable to any particular Business Combination, and such Business
Combination shall require only such affirmative vote, if any, as is required by
law or by or under any other provision of this Restated Certificate, or the
By-laws of the corporation, or otherwise, if all the conditions specified in
either of the following paragraphs First or Second are met:
First: The Business Combination shall have been approved by a majority
(whether such approval is made prior to or subsequent to the acquisition of
beneficial ownership of the Voting Stock that caused the Interested Stockholder
to become an Interested Stockholder) of the Continuing Directors; or
Second: All of the following conditions shall have been met:
(1) The aggregate amount of the cash, and the Fair Market Value as of
the date of the consummation of the Business Combination of consideration other
than cash, to be received per share by holders of Common Stock in such Business
Combination shall be at least equal to the highest amount determined under
subparagraphs (i) and (ii) below:
(i) The highest per share price (including any brokerage
commissions, transfer taxes and soliciting dealers' fees) paid by or on behalf
on the Interested Stockholder for any shares of Common Stock in connection with
the acquisition by the Interested Stockholder of beneficial ownership of shares
of Common Stock (a) within the two-year period immediately prior to the first
public announcement of the proposed Business Combination (the "Announcement
Date") or (b) in the transaction in which it became an Interested Stockholder,
whichever is higher; and
(ii) The Fair Market Value per share of Common Stock on the
Announcement Date or on the date on which the Interested Stockholder became an
Interested Stockholder (the "Determination Date"), whichever is higher.
All per share prices shall be adjusted to reflect any intervening stock
splits, stock dividends, and reverse stock splits.
(2) The aggregate amount of the cash, and the Fair Market Value as of
the date of the consummation of the Business Combination of consideration other
than cash, to be received per share by holders of shares of any class or series
of outstanding Voting Stock, other than Common Stock, shall be at least equal to
the highest amount determined under clauses (i), (ii), and (iii) below.
(i) The highest per share price (including any brokerage
commissions, transfer taxes, and soliciting dealers' fees) paid by or on behalf
of the Interested Stockholder for any share of such class or series of Voting
Stock in connection with the acquisition by the Interested Stockholder of
beneficial ownership of shares of such class or series of Voting Stock (a)
within the two- year period immediately prior to the Announcement Date or (b) in
the transaction in which it became an Interested Stockholder, whichever is
higher.
(ii) The Fair Market Value per share of such class or series
of Voting Stock on the Announcement Date or on the Determination Date, whichever
is higher; and
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(iii) The highest preferential amount per share to which the
holders of shares of such class or series of Voting Stock would be entitled, if
any, in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the corporation, regardless of whether the Business Combination to
be consummated constitutes such an event.
All per share prices shall be adjusted for intervening stock splits,
stock dividends, and reverse stock splits.
The provisions of this paragraph 2 shall be required to be met with
respect to every class or series of outstanding Voting Stock, whether or not the
Interested Stockholder has previously acquired beneficial ownership of any
shares of a particular class or series of Voting Stock.
(3) After such Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such Business Combination: (i)
except as approved by a majority of the Continuing Directors, there shall have
been no failure to declare and pay at the regular date therefor any full
periodic dividends (whether or not cumulative) in accordance with the terms of
any outstanding Preferred Stock; (ii) there shall have been (a) no reduction in
the annual rate of dividend paid on the Common Stock (except as necessary to
reflect any stock split, stock dividend or subdivision of the Common Stock),
except as approved by a majority of the Continuing Directors, and (b) an
increase in such annual rate of dividends as necessary to reflect any
reclassification (including any reverse stock split), recapitalization,
reorganization, or any similar transaction which has the effect of reducing the
number of outstanding shares of Common Stock, unless the failure so to increase
such annual rate is approved by a majority of the Continuing Directors, and
(iii) such Interested Stockholder shall have not become the beneficial owner of
any additional shares of Voting Stock except as part of the transaction which
results in such Interested Stockholder becoming an Interested Stockholder and
except in a transaction that, after giving effect thereto, would not result in
any increase in the Interested Stockholder's percentage of beneficial ownership
of any class or series of capital stock.
(4) After such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder shall not have received the benefit,
directly or indirectly (except proportionately as a stockholder), of any loans,
advances, guarantees, pledges, or other financial assistance or any tax credits
or other tax advantages provided by the corporation, whether in anticipation of
or in connection with such Business Combination or otherwise.
(5) A proxy or information statement describing the proposed Business
Combination and complying with the requirements of the Securities Exchange Act
of 1934 and the rules and regulations thereunder (or any subsequent provisions
replacing such Act, rules or regulations) shall be mailed to stockholders of the
corporation at least 30 days prior to the consummation of such Business
Combination (whether or not such proxy or information statement is required to
be mailed pursuant to such Act or subsequent provisions).
(6) Such Interested Stockholder shall not have made any major change in
the corporation's business or equity capital structure without the approval of a
majority of the Continuing Directors.
(c) For the purposes of this Article Twelfth:
(i) The term "Business Combination" shall mean:
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(A) any merger or consolidation of the corporation or any Subsidiary
(as hereinafter defined) with (x) any Interested Stockholder or (y) any other
company (whether or not such other company is an Interested Stockholder) which
is, or after such merger or consolidation would be, an Affiliate or Associate of
an Interested Stockholder; or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition or security arrangement, investment, loan, advance, guarantee,
agreement to purchase, agreement to pay, extension of credit, joint venture
participation or other arrangement (in one transaction or a series of
transactions) with or for the benefit of any Interested Stockholder or any
Affiliate or Associate of any Interested Stockholder involving any Substantial
Part of the assets, securities or commitments of the corporation, any Subsidiary
or any Interested Stockholder or any Affiliate or Associate of any Interested
Stockholder; or
(C) the adoption of any plan or proposal for the liquidation or
dissolution of the corporation proposed by or on behalf of any Interested
Stockholder or any Affiliate or Associate of any Interested Stockholder; or
(D) any reclassification of securities (including any reverse stock
split), or recapitalization of the corporation or any merger or consolidation of
the corporation with any of its Subsidiaries or any other transaction (whether
or not with or otherwise involving an Interested Stockholder) that has the
effect, directly or indirectly, of increasing the proportionate share of the
outstanding shares of any class or series of Voting Stock, or any securities
convertible into Voting Stock, or into equity securities of any Subsidiary, that
is beneficially owned by an Interested Stockholder or any Affiliate or Associate
of any Interested Stockholder; or
(E) any agreement, contract, or other arrangement providing for any one
or more of the actions specified in the foregoing clauses (a) through (d).
(ii) The term "Voting Stock" shall mean all outstanding shares
of capital stock of the corporation of whatever class or series which is
entitled to vote under any circumstances in the election of directors of the
corporation.
(iii) A "person" shall mean any individual, firm, corporation,
partnership, trust or other entity and shall include any group comprised of any
person and any other person with whom such person or any Affiliate or Associate
of such person has any agreement, arrangement or understanding, directly or
indirectly, for the purpose of acquiring, holding, voting, or disposing of
Voting Stock.
(iv) "Interested Stockholder" shall mean any person (other
than the corporation or any Subsidiary and other than any profit-sharing,
employee stock ownership or other employee benefit plan of the corporation or
any Subsidiary or any trustee of or fiduciary with respect to any such plan when
acting in such capacity) who or which:
(A) is a person who is the beneficial owner, directly or indirectly, of
more than 10% of the voting power of the then outstanding Voting Stock; or
(B) is an Affiliate or Associate of the corporation and at any time
within the two-year period immediately prior to the date in question was the
beneficial owner of 10% or more of the voting power of the then outstanding
Voting Stock; or
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(C) is an assignee of or has otherwise succeeded to any shares of
Voting Stock which were at any time within the two-year period immediately prior
to the date in question beneficially owned by any Interested Stockholder, if
such assignment or succession shall have occurred in the course of a transaction
or series of transactions not involving a public offering within the meaning of
the Securities Act of 1933, as amended.
(v) A person shall be a "beneficial owner" of any Voting
Stock:
(A) which such person or any of its Affiliates or Associates
beneficially owns, directly or indirectly; or
(B) which such person or any of its Affiliates or Associates has (1)
the right to acquire (whether such right is exercisable immediately or only
after the passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (2) the right to vote pursuant to any
agreement, arrangement or understanding; or
(C) which are beneficially owned, directly or indirectly, by any other
person with which such person or any of its Affiliates or Associates has any
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of any shares of Voting Stock. For the purposes of
determining whether a person is an Interested Stockholder pursuant to paragraph
(c)(iv) of this Article, the number of shares of capital stock deemed to be
outstanding shall include shares deemed beneficially owned by such person
through application of paragraph (c)(v) of this Article but shall not include
any other shares of Voting Stock that may be issuable pursuant to any agreement,
arrangement or understanding, or upon exercise of conversion rights, warrants or
options, or otherwise.
(vi) An "Affiliate" of, or a person "affiliated" with, a
specified person, is a person that directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the person specified.
(vii) "Associate" used to indicate a relationship with any
person, means (1) any corporation or organization (other than the corporation or
a majority-owned subsidiary of the corporation) of which such person is an
officer or partner or is, directly or indirectly, the beneficial owner of 10% or
more of any class of equity securities, (2) any trust or other estate in which
such person has a substantial beneficial interest or as to which such person
serves as trustee or in a similar fiduciary capacity, and (3) any relative or
spouse of such person, or any relative of such spouse, who has the same home as
such person.
(viii) "Subsidiary" means any company of which a majority of
any class of equity security is owned, directly or indirectly, by the
corporation.
(ix) The term "Substantial Part" shall mean an amount equal to
or greater than an amount equal to fifteen (15) percent of the stockholders'
equity of the corporation as reflected in the most recent fiscal year-end
consolidated balance sheet of the corporation.
(x) "Continuing Director" means any member of the Board of
Directors of the corporation (the "Board") while such person is a member of the
Board, who is not an Affiliate or Associate or representative of the Interested
Stockholder and was a member of the Board prior to the time that the Interested
Stockholder became an Interested Stockholder, and any successor of a
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Continuing Director, while such successor is a member of the Board, who is not
an Affiliate or Associate or representative of the Interested Stockholder and is
recommended to succeed the Continuing Director by a majority of Continuing
Directors then on the Board.
(xi) "Fair Market Value" means (a) in the case of stock, the
highest closing sale price during the 30-day period immediately preceding the
date in question of a share of such stock on the Composite Tape for New York
Stock Exchange-Listed Stocks, or, if such stock is not quoted on the Composite
Tape for the New York Stock Exchange, or if such stock is not listed on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934 on which such stock is listed, or if such
stock is not listed on any such exchange, the highest closing bid quotation with
respect to a share of such stock during the 30-day period preceding the date in
question on the National Association of Securities Dealers, Inc. Automated
Quotations System or any system then in use, or if no such quotations are
available, the Fair Market Value on the date in question of a share of such
stock as determined by a majority of the Continuing Directors in good faith and
(b) in the case of property other than cash or stock, the Fair Market Value of
such property on the date in question as determined in good faith by a majority
of Continuing Directors then on the Board.
(xii) In the event of any Business Combination in which the
corporation survives, the phrase "consideration other than cash to be received"
as used in paragraphs (b) Second (1) and (2) of this Article shall include the
shares of Common Stock and/or the shares of any other class of outstanding
Voting Stock retained by the holders of such shares.
(d) The Board shall have the power and duty to determine for the
purposes of this Article Twelfth, on the basis of information known to it after
reasonable inquiry (i) whether a person is an Interested Stockholder; (ii) the
number of shares of Voting Stock beneficially owned by any person; (iii) whether
a person is an Affiliate or Associate of another; (iv) whether the requirements
of paragraph (b) Second of this Article have been met with respect to any
Business Combination; and (v) whether any sale, lease, exchange, mortgage,
pledge, transfer or other disposition or security arrangement, investment, loan,
advance, guarantee, agreement to purchase, agreement to pay, extension of
credit, joint venture participation or other arrangement (in one transaction or
a series of transactions) with or for the benefit of any Interested Stockholder
or any Affiliate or Associate of any Interested Stockholder involving any
assets, securities or commitments of the corporation, any Subsidiary, or any
Interested Stockholder, or any Affiliate or Associate of any Interested
Stockholder constitutes a Substantial Part. Any such determination made in good
faith shall be binding and conclusive on all parties.
(e) The Board of Directors shall not approve, adopt or recommend any
proposal to enter into a Business Combination, or any offer of any person, other
than the corporation, to make a tender or exchange offer for any capital stock
of the corporation, unless and until the Board of Directors shall first
establish a procedure for evaluating, and shall have evaluated, the proposal or
offer, and determined that it would be in compliance with all applicable laws
and in the best interests of the corporation and its stockholders. In connection
with its evaluation, the Board of Directors may seek and obtain the advice of
independent investment counsel, may seek and rely upon an opinion of legal
counsel and other independent advisers, and may test such compliance with laws
in any state or federal court or before any state or federal administrative
agency which may have appropriate jurisdiction. In connection with its
evaluation as to the best interests of the
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corporation and its stockholders, the Board of Directors shall consider all
factors which it deems relevant, or the stockholders might deem relevant,
including without limitation: (i) the adequacy and fairness of the consideration
to be received by the corporation and/or its stockholders considering the future
prospects for the corporation and its business, historical trading prices of the
corporation's capital stock, the price that might be achieved in a negotiated
sale of the corporation as a whole, and premiums over trading prices which have
been proposed or offered with respect to the securities of other companies in
the past in connection with similar offers; (ii) the business, financial
condition and earnings prospects of the acquiring person or entity and the
competence, experience and integrity of the acquiring person or entity and their
or its management, and (iii) the potential social and economic impact of the
offer and its consummation on the communities in which the corporation and its
subsidiaries operate or are located and upon the corporation, its subsidiaries,
and their employees, depositors, and loan and other customers.
(f) The Board of Directors shall not approve, adopt or recommend any
offer of any person, other than the corporation, to make a tender or exchange
offer for any capital stock of the corporation in which the Fair Market Value
per share of the consideration to be received by one or more stockholders is
substantially more than the Fair Market Value per share of the consideration to
be received by other stockholders holding shares of the same class and series,
or any tender or exchange offer the consummation of which is reasonably likely,
in the good faith determination of the Board of Directors, in one transaction or
a series of transactions, to have that result.
(g) Nothing contained in this Article Twelfth shall be construed to
relieve any Interested Stockholder from any fiduciary obligation imposed by law.
(h) The fact that any Business Combination complies with the provisions
of paragraph (b)(2) of this Article Twelfth shall not be construed to impose any
fiduciary duty, obligation, or responsibility on the Board of Directors, or any
member thereof, to approve such Business Combination or recommend its adoption
or approval to the stockholders of the corporation, nor shall such compliance
limit, prohibit or otherwise restrict in any manner the Board of Directors, or
any member thereof, with respect to evaluations of or actions and responses
taken with respect to such Business Combination.
(i) Notwithstanding any other provisions of this Restated Certificate
or the By-laws of the corporation (and notwithstanding the fact that a lesser
percentage may be specified by law, this Restated Certificate or the By-laws of
the corporation), the affirmative vote of the holders of at least 80% of the
voting power of all the shares of the Voting Stock, voting together as a single
class, shall be required to alter, amend or adopt any provisions inconsistent
with or to repeal this Article Twelfth; provided, however, that if such action
has been proposed, directly or indirectly, on behalf of an Interested
Stockholder, it must also be approved by the affirmative vote of a majority of
the voting power of all the shares of Voting Stock held by stockholders other
than such Interested Stockholder.
THIRTEENTH. This Restated Certificate of Incorporation shall be
effective upon its filing with the Secretary of State of the State of Delaware
in accordance with the General Corporation Law of the State of Delaware.
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IN WITNESS WHEREOF, BANK ONE CORPORATION has caused its corporate seal to be
hereunto affixed and this Restated Certificate of Incorporation to be signed by
M. Eileen Kennedy, its Treasurer, and the same to be attested by Ilona M. Berry,
its Assistant Secretary, this 20th day of October, 1998.
BANK ONE CORPORATION
BY: /s/ M. Eileen Kennedy
-------------------------
Treasurer
(CORPORATE SEAL)
ATTEST:
BY: /s/ Ilona M. Berry
---------------------------
Assistant Secretary
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Annex A
PREFERRED STOCK WITH CUMULATIVE AND ADJUSTABLE DIVIDENDS, SERIES B
(Par Value $.01 per share)
OF
BANK ONE CORPORATION
(a) Designation.
The designation of the series of Preferred Stock created by this
resolution shall be "Preferred Stock with Cumulative and Adjustable Dividends,
Series B" (hereinafter called this "Series") and the number of shares
constituting this Series is 1,191,000. Shares of this Series shall have a stated
value of $100 per share. The number of authorized shares of this Series may be
reduced by further resolution duly adopted by the Board and by the filing of a
certificate pursuant to the provisions of the General Corporation Law of the
State of Delaware stating that such reduction has been so authorized, but the
number of authorized shares of this Series shall not be increased.
(b) Dividend Rate.
(1) Dividend rates on the shares of this Series shall be for each
quarterly dividend period (hereinafter referred to as a "Quarterly Dividend
Period"; and any Quarterly Dividend Period being hereinafter individually
referred to as a "Dividend Period" and collectively referred to as "Dividend
Periods"), which Quarterly Dividend Periods shall commence on March 1, June 1,
September 1 and December 1 in each year and shall end on and include the day
next preceding the first day of the next Quarterly Dividend Period, at a rate
per annum of the stated value thereof 3.75% below the Applicable Rate (as
defined in paragraph (2) of this Section (b)) in respect of such Quarterly
Dividend Period. Anything to the contrary herein notwithstanding, the dividend
rate for any Quarterly Dividend Period shall in no event be less than 6.00% or,
greater than 12.00% per annum. Such dividends shall be cumulative from September
1, 1998, and shall be payable, when and as declared by the Board, on the last
day of February, May, August and November of each year, commencing the last day
of November, 1998. Each such dividend shall be paid to the holders of record of
shares of this Series as they appear on the stock register of the Corporation on
such record date, not exceeding 30 days preceding the payment date thereof, as
shall be fixed by the Board. Dividends on account of arrears for any past
Dividend Periods may be declared and paid at any time, without reference to any
regular dividend payment date, to holders of record on such date, not exceeding
45 days preceding the payment date thereof, as may be fixed by the Board.
(2) Except as provided below in this paragraph, the "Applicable Rate"
for any Quarterly Dividend Period shall be the highest of the Treasury Bill
Rate, the Ten Year Constant Maturity Rate or the Twenty Year Constant Maturity
Rate (each as hereinafter defined) for such Dividend Period. In the event that
the Corporation determines in good faith that for any reason one or more of such
rates cannot be determined for any Quarterly Dividend Period, then the
Applicable Rate for such Dividend Period shall be the higher of whichever of
such rates can be so
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determined. In the event that the Corporation determines in good faith that none
of such rates can be determined for any Quarterly Dividend Period, then the
Applicable Rate in effect for the preceding Dividend Period shall be continued
for such Dividend Period.
(3) Except as provided below in this paragraph, the "Treasury Bill
Rate" for each Quarterly Dividend Period shall be the arithmetic average of the
two most recent weekly per annum market discount rates (or the one weekly per
annum market discount rate, if only one such rate shall be published during the
relevant Calendar Period as provided below) for three-month U.S. Treasury bills,
as published weekly by the Federal Reserve Board during the Calendar Period
immediately prior to the ten calendar days immediately preceding the last day of
February, May, August or November, as the case may be, prior to the Quarterly
Dividend Period for which the dividend rate on this Series is being determined.
In the event that the Federal Reserve Board does not publish such a weekly per
annum market discount rate during such Calendar Period, then the Treasury Bill
Rate for such Dividend Period shall be the arithmetic average of the two most
recent weekly per annum market discount rates (or the one weekly per annum
market discount rate, if only one such rate shall be published during the
relevant Calendar Period as provided below) for three-month U.S. Treasury bills,
as published weekly during such Calendar Period by any Federal Reserve Bank or
by any U.S. Government department or agency selected by the Corporation. In the
event that a per annum market discount rate for three-month U.S. Treasury bills
shall not be published by the Federal Reserve Board or by any Federal Reserve
Bank or by any U.S. Government department or agency during such Calendar Period,
then the Treasury Bill Rate for such Dividend Period shall be the arithmetic
average of the two most recent weekly per annum market discount rates (or the
one weekly per annum market discount rate, if only one such rate shall be
published during the relevant Calendar Period as provided below) for all of the
U.S. Treasury bills then having maturities of not less than 80 nor more than 100
days, as published during such Calendar Period by the Federal Reserve Board or,
if the Federal Reserve Board shall not publish such rates, by any Federal
Reserve Bank or by any U.S. Government department or agency selected by the
Corporation. In the event that the Corporation determines in good faith that for
any reason no such U.S. Treasury Bill Rates are published as provided above
during such Calendar Period, then the Treasury Bill Rate for such Dividend
Period shall be the arithmetic average of the per annum market discount rates
based upon the closing bids during such Calendar Period for each of the issues
of marketable noninterest-bearing U.S. Treasury securities with a maturity of
not less than 80 nor more than 100 days from the date of each such quotation, as
quoted daily for each business day in New York City (or less frequently if daily
quotations shall not be generally available) to the Corporation by at least
three recognized U.S. Government securities dealers selected by the Corporation.
In the event that the Corporation determines in good faith that for any reason
the Corporation cannot determine the Treasury Bill Rate for any Quarterly
Dividend Period as provided above in this paragraph, the Treasury Bill Rate for
such Dividend Period shall be the arithmetic average of the per annum market
discount rates based upon the closing bids during such Calendar Period for each
of the issues of marketable interest-bearing U.S. Treasury securities with a
maturity of not less than 80 nor more than 100 days from the date of each such
quotation, as quoted daily for each business day in New York City (or less
frequently if daily quotations shall not be generally available) to the
Corporation by at least three recognized U.S. Government securities dealers
selected by the Corporation.
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<PAGE> 19
(4) Except as provided below in this paragraph, the "Ten Year Constant
Maturity Rate" for each Quarterly Dividend Period shall be the arithmetic
average of the two most recent weekly per annum Ten Year Average Yields (or the
one weekly per annum Ten Year Average Yield, if only one such Yield shall be
published during the relevant Calendar Period as provided below), as published
weekly by the Federal Reserve Board during the Calendar Period immediately prior
to the ten calendar days immediately preceding the last day of February, May,
August or November, as the case may be, prior to the Quarterly Dividend Period
for which the dividend rate on this Series is being determined. In the event
that the Federal Reserve Board does not publish such a weekly per annum Ten Year
Average Yield during such Calendar Period, then the Ten Year Constant Maturity
Rate for such Dividend Period shall be the arithmetic average of the two most
recent weekly per annum Ten Year Average Yields (or the one weekly per annum Ten
Year Average Yield, if only one such Yield shall be published during the
relevant Calendar Period as provided below), as published weekly during such
Calendar Period by any Federal Reserve Bank or by any U.S. Government department
or agency selected by the Corporation. In the event that a per annum Ten Year
Average Yield shall not be published by the Federal Reserve Board or by any
Federal Reserve Bank or by any U.S. Government department or agency during such
Calendar Period, then the Ten Year Constant Maturity Rate for such Dividend
Period shall be the arithmetic average of the two most recent weekly per annum
average yields to maturity (or the one weekly average yield to maturity, if only
one such yield shall be published during the relevant Calendar Period as
provided below) for all of the actively traded marketable U.S. Treasury fixed
interest rate securities (other than Special Securities) then having maturities
of not less than eight nor more than twelve years, as published during such
Calendar Period by the Federal Reserve Board or, if the Federal Reserve Board
shall not publish such yields, by any Federal Reserve Bank or by any U.S.
Government department or agency selected by the Corporation. In the event that
the Corporation determines in good faith that for any reason the Corporation
cannot determine the Ten Year Constant Maturity Rate for any Quarterly Dividend
Period as provided above in this paragraph, then the Ten Year Constant Maturity
Rate for such Dividend Period shall be the arithmetic average of the per annum
average yields to maturity based upon the closing bids during such Calendar
Period for each of the issues of actively traded marketable U.S. Treasury fixed
interest rate securities (other than Special Securities) with a final maturity
date not less than eight nor more than twelve years from the date of each such
quotation, as quoted daily for each business day in New York City (or less
frequently if daily quotations shall not be generally available) to the
Corporation by at least three recognized U.S. Government securities dealers
selected by the Corporation.
(5) Except as provided below in this paragraph, the "Twenty Year
Constant Maturity Rate" for each Quarterly Dividend Period shall be the
arithmetic average of the two most recent weekly per annum Twenty Year Average
Yields (or the one weekly per annum Twenty Year Average Yield, if only one such
Yield shall be published during the relevant Calendar Period as provided below),
as published weekly by the Federal Reserve Board during the Calendar Period
immediately prior to the ten calendar days immediately preceding the last day of
February, May, August or November, as the case may be, prior to the Quarterly
Dividend Period for which the dividend rate on this Series is being determined.
In the event that the Federal Reserve Board does not publish such a weekly per
annum Twenty Year Average Yield during such Calendar Period, then the Twenty
Year Constant Maturity Rate for such Dividend Period shall be the arithmetic
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<PAGE> 20
average of the two most recent weekly per annum Twenty Year Average Yields (or
the one weekly per annum Twenty Year Average Yield, if only one such Yield shall
be published during the relevant Calendar Period as provided below), as
published weekly during such Calendar Period by any Federal Reserve Bank or by
any U.S. Government department or agency selected by the Corporation. In the
event that a per annum Twenty Year Average Yield shall not be published by any
Federal Reserve Board or by any Federal Reserve Bank or by any U.S. Government
department or agency during such Calendar Period, then the Twenty Year Constant
Maturity Rate for such Dividend Period shall be the arithmetic average of the
two most recent weekly per annum average yields to maturity (or the average
yield to maturity, if only one such yield shall be published during the relevant
Calendar Period as provided below) for all of the actively traded marketable
U.S. Treasury fixed interest rate securities (other than Special Securities)
then having maturities of not less than eighteen nor more than twenty-two years,
as published during such Calendar Period by the Federal Reserve Board or, if the
Federal Reserve Board shall not publish such yields, by any Federal Reserve Bank
or by any U.S. Government department or agency selected by the Corporation. In
the event that the Corporation determines in good faith that for any reason the
Corporation cannot determine the Twenty Year Constant Maturity Rate for any
Quarterly Dividend Period as provided above in this paragraph, then the Twenty
Year Constant Maturity Rate for such Dividend Period shall be the arithmetic
average of the per annum average yields to maturity based upon the closing bids
during such Calendar Period for each of the issues of actively traded marketable
U.S. Treasury fixed interest rate securities (other than Special Securities)
with a final maturity date not less than eighteen nor more than twenty-two years
from the date of each such quotation, as quoted daily for each business day in
New York City (or less frequently if daily quotations shall not be generally
available) to the Corporation by at least three recognized U.S.
Government securities dealers selected by the Corporation.
(6) The Treasury Bill Rate, the Ten Year Constant Maturity Rate and the
Twenty Year Constant Maturity Rate shall each be rounded to the nearest five
hundredths of a percentage point.
(7) The dividend rate with respect to each Quarterly Dividend Period
will be calculated as promptly as practicable by the Corporation according to
the appropriate method described herein. The mathematical accuracy of each such
calculation will be confirmed in writing by independent accountants of
recognized standing. The Corporation will cause each dividend rate to be
published in a newspaper of general circulation in New York City prior to the
commencement of the new Quarterly Dividend Period to which it applies and will
cause notice of such dividend rate to be enclosed with the dividend payment
checks next mailed to the holders of shares of this Series.
(8) For purposes of this Section (b), the term
(i) "Calendar Period" shall mean 14 calendar days;
(ii) "Special Securities" shall mean securities which can, at
the option of the holder, be surrendered at face value in payment of any Federal
estate tax or which provide tax benefits to the holder and are priced to reflect
such tax benefits or which were originally issued at a deep or substantial
discount;
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<PAGE> 21
(iii) "Ten Year Average Yield" shall mean the average yield to
maturity for actively traded marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities of ten years); and
(iv) "Twenty Year Average Yield" shall mean the average yield
to maturity for actively traded marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities of 20 years).
(9) No full dividends shall be declared or paid or set apart for
payment on Preferred Stock of any series ranking, as to dividends, on a parity
with or junior to this Series for any period unless full cumulative dividends
have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for such payment on this Series for
all dividend payment periods terminating on or prior to the date of payment of
such full cumulative dividends. When dividends are not paid in full, as
aforesaid, upon the shares of this Series and any other Preferred Stock ranking
on a parity as to dividends with this Series, all dividends declared upon shares
of this Series and any other Preferred Stock ranking on a parity as to dividends
with this Series shall be declared pro rata so that the amount of dividends
declared per share on this Series and such other Preferred Stock shall in all
cases bear to each other the same ratio that accrued dividends per share on the
shares of this Series and such other Preferred Stock bear to each other. Holders
of shares of this Series shall not be entitled to any dividend, whether payable
in cash, property or stocks, in excess of full cumulative dividends, as herein
provided, on this Series. No interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment or payments on this Series
which may be in arrears.
(10) So long as any shares of this Series are outstanding, no dividend
(other than a dividend in Common Stock or in any other stock ranking junior to
this Series as to dividends and upon liquidation and other than as provided in
paragraph (9) of this Section (b)) shall be declared or paid or set aside for
payment or other distribution declared or made upon the Common Stock or upon any
other stock ranking junior to or on a parity with this Series as to dividends or
upon liquidation, nor shall any Common Stock or any other stock of the
Corporation ranking junior to or on a parity with this Series as to dividends or
upon liquidation be redeemed, purchased or otherwise acquired for any
consideration (or any moneys paid to or made available for a sinking fund for
the redemption of any shares of any such stock) by the Corporation (except by
conversion into or exchange for stock of the Corporation ranking junior to this
Series as to dividends and upon liquidation) unless, in each case, the full
cumulative dividends on all outstanding shares of this Series shall have been
paid for all past dividend payment periods.
(11) Dividends payable on each share of this Series for each full
Quarterly Dividend Period shall be computed by dividing the dividend rate for
such Quarterly Dividend Period by four and applying such rate against the stated
value per share of this Series. Dividends payable on this Series for any period
less than a full Quarterly Dividend Period shall be computed on the basis of a
360 day year consisting of 30 day months.
(c) Redemption.
(1) The Corporation, at its option, may redeem shares of this Series,
as a whole or in part, at any time or from time to time, at a redemption price
of $100 per share, plus, in each case, accrued and unpaid dividends thereon to
the date fixed for redemption.
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<PAGE> 22
(2) In the event that fewer than all the outstanding shares of this
Series are to be redeemed, the number of shares to be redeemed shall be
determined by the Board and the shares to be redeemed shall be determined by lot
or pro rata as may be determined by the Board or by any other method as may be
determined by the Board in its sole discretion to be equitable.
(3) In the event the Corporation shall redeem shares of this Series,
notice of such redemption shall be given by first class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the redemption date, to
each holder of record of the shares to be redeemed, at such holder's address as
the same appears on the stock register of the Corporation. Each such notice
shall state: (i) the redemption date; (ii) the number of shares of this Series
to be redeemed and, if fewer than all the shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such holder; (iii) the
redemption price; (iv) the place or places where certificates for such shares
are to be surrendered for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date.
(4) Notice having been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in providing
money for the payment of the redemption price) dividends on the shares of this
Series so called for redemption shall cease to accrue, and said shares shall no
longer be deemed to be outstanding, and all rights of the holders thereof as
stockholders of the Corporation (except the right to receive from the
Corporation the redemption price) shall cease. Upon surrender in accordance with
said notice of the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board shall so require and the notice shall so
state), such shares shall be redeemed by the Corporation at the redemption price
aforesaid. In case fewer than all the shares represented by any such certificate
are redeemed, a new certificate shall be issued representing the unredeemed
shares without cost to the holder thereof.
(5) Any shares of this Series which shall at any time have been
redeemed shall, after such redemption, have the status of authorized but
unissued shares of Preferred Stock, without designation as to series until such
shares are once more designated as part of a particular series by the Board.
(6) Notwithstanding the foregoing provisions of this Section (c), if
any dividends on this Series are in arrears, no shares of this Series shall be
redeemed unless all outstanding shares of this Series are simultaneously
redeemed, and the Corporation shall not purchase or otherwise acquire any shares
of this Series; provided, however, that the foregoing shall not prevent the
purchase or acquisition of shares of this Series pursuant to a purchase or
exchange offer made on the same terms to holders of all outstanding shares of
this Series.
(d) Conversion or Exchange.
The holders of shares of this Series shall not have any rights herein
to convert such shares into or exchange such shares for shares of any other
class or classes or of any other series of any class or classes of capital stock
of the Corporation.
(e) Voting.
The shares of this Series shall not have any voting powers either
general or special, except that
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<PAGE> 23
(1) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least
66-2/3% of all of the shares of this Series at the time outstanding, given in
person or by proxy, either in writing or by a vote at a meeting called for the
purpose at which the holders of shares of this Series shall vote together as a
separate class, shall be necessary for authorizing, effecting or validating the
amendment, alteration, or repeal of any of the provisions of the Restated
Certificate or of any certificate amendatory thereof or supplemental thereto
(including any Certificate of Designation, Preferences and Rights or any similar
document relating to any series of Preferred Stock) which would adversely affect
the preferences, rights, powers or privileges of this Series;
(2) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least
66-2/3% of all of the shares of this Series and all other series of Preferred
Stock ranking on a parity with shares of this Series, either as to dividends or
upon liquidation, at the time outstanding, given in person or by proxy, either
in writing or by a vote at a meeting called for the purpose at which the holders
of shares of this Series and such other series of Preferred Stock shall vote
together as a single class without regard to series, shall be necessary for
authorizing, effecting or validating the creation, authorization or issue of any
shares of any class of stock of the Corporation ranking prior to the shares of
this Series as to dividends or upon liquidation, or the reclassification of any
authorized stock of the Corporation into any such prior shares, or the creation,
authorization or issue of any obligation or security convertible into or
evidencing the right to purchase any such prior shares;
(3) If at any time a default in preference dividends on the Preferred
Stock shall exist, the number of directors constituting the Board of Directors
of the Corporation shall be increased by two, and the holders of the Preferred
Stock of all series shall have the right at an annual or special meeting of
stockholders, voting together as a single class without regard to series, to the
exclusion of the holders of Common Stock, to elect two directors of the
Corporation to fill such newly created directorships. Such right shall continue
until there are no dividends in arrears upon the Preferred Stock. Each director
elected by the holders of shares of Preferred Stock (herein called a "Preferred
Director") shall continue to serve as such director until the next annual
meeting, notwithstanding that prior to such time a default in preference
dividends shall cease to exist. Any Preferred Director may be removed by, and
shall not be removed except by, the vote of the holders of record of the
outstanding shares of Preferred Stock, voting together as a single class without
regard to series, at a meeting of the stockholders, or of the holders of shares
of Preferred Stock, called for that purpose. So long as a default in any
preference dividends on the Preferred Stock shall exist, (A) any vacancy in the
office of a Preferred Director may be filled (except as provided in the
following clause (B)) by an instrument in writing signed by the remaining
Preferred Director and filed with the Corporation and (B) in the case of the
removal of any Preferred Director, the vacancy may be filled by the vote of the
holders of the outstanding shares of Preferred Stock, voting together as a
single class without regard to series, at the same meeting at which such removal
shall be voted. Each director appointed as aforesaid by the remaining Preferred
Director shall be deemed, for all purposes hereof, to be a Preferred Director.
Whenever the term of office of the Preferred Directors shall end and a default
in preference dividends shall no longer exist, the number of directors
constituting the Board of Directors of the Corporation shall be reduced by two.
For the purposes hereof, a "default in preference dividends" on the Preferred
Stock shall be deemed to have occurred whenever the amount of accrued
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<PAGE> 24
dividends upon any series of the Preferred Stock shall be equivalent to six full
quarter-yearly dividends or more, and, having so occurred, such default shall
be deemed to exist thereafter until, but only until, all accrued dividends on
all shares of Preferred Stock of each and every series then outstanding shall
have been paid to the end of the last preceding quarterly dividend period.
(f) Liquidation Rights.
(1) Upon the dissolution, liquidation or winding up of the Corporation,
the holders of the shares of this Series shall be entitled to receive out of the
assets of the Corporation, before any payment or distribution shall be made on
the Common Stock or on any other class of stock ranking junior to the Preferred
Stock upon liquidation, the amount of $100 per share, plus a sum equal to all
dividends (whether or not earned or declared) on such shares accrued and unpaid
thereon to the date of final distribution.
(2) Neither the sale of all or substantially all the property or
business of the Corporation, nor the merger or consolidation of the Corporation
into or with any other corporation or the merger or consolidation of any other
corporation into or with the Corporation, shall be deemed to be a dissolution,
liquidation or winding up, voluntary or involuntary, for the purposes of this
Section (f).
(3) After the payment to the holders of the shares of this Series of
the full preferential amounts provided for in this Section (f), the holders of
this Series as such shall have no right or claim to any of the remaining assets
of the Corporation.
(4) In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any dissolution,
liquidation or winding up of the Corporation, whether voluntary or involuntary,
shall be insufficient to pay in full all amounts to which such holders are
entitled pursuant to paragraph (1) of this Section (f), no such distribution
shall be made on account of any shares of any other class or series of Preferred
Stock ranking on a parity with the shares of this Series upon such dissolution,
liquidation or winding up unless proportionate distributive amounts shall be
paid on account of the shares of this Series, ratably, in proportion to the full
distributable amounts for which holders of all such parity shares are
respectively entitled upon such dissolution, liquidation or winding up.
(5) Upon the dissolution, liquidation or winding up of the Corporation,
the holders of shares of this Series then outstanding shall be entitled to be
paid out of the assets of the Corporation available for distribution to its
stockholders all amounts to which such holders are entitled pursuant to
paragraph (1) of this Section (f) before any payment shall be made to the
holders of any class of capital stock of the Corporation ranking junior upon
liquidation to this Series.
(g) For purposes of this resolution, any stock of any class or classes
of the Corporation shall be deemed to rank:
(1) prior to the shares of this Series, either as to dividends or upon
liquidation, if the holders of such class or classes shall be entitled to the
receipt of dividends or of amounts distributable upon dissolution, liquidation
or winding up of the Corporation, as the case may be, in preference or priority
to the holders of shares of this Series;
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(2) on a parity with shares of this Series, either as to dividends or
upon liquidation, whether or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share or sinking fund provisions, if any,
be different from those of this Series, if such stock is the Corporation's
Preferred Stock with Cumulative and Adjustable Dividends, Series C (Without Par
Value), the Corporation's 5 3/4% Cumulative Convertible Preferred Stock, Series
B (Stated Value $5,000 per share), or if the holders of such stock shall be
entitled to the receipt of dividends or of amounts distributable upon
dissolution, liquidation or winding up of the Corporation, as the case may be,
in proportion to their respective dividend rates or liquidation prices, without
preference or priority, one over the other, as between the holders of such stock
and the holders of shares of this Series; and
(3) junior to shares of this Series, either as to dividends or upon
liquidation, if such class shall be Common Stock or if the holders of shares of
this Series shall be entitled to receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the Corporation, as
the case may be, in preference or priority to the holders of shares of such
class or classes.
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Annex B
THE PREFERRED STOCK WITH CUMULATIVE AND ADJUSTABLE DIVIDENDS, SERIES C
(Par Value $.01 per share)
OF
BANK ONE CORPORATION
(a) Designation.
The designation of the series of Preferred Stock created by this
resolution shall be "Preferred Stock with Cumulative and Adjustable Dividends,
Series C" (hereinafter called this "Series") and the number of shares
constituting this Series is 713,800. Shares of this Series shall have a stated
value of $100 per share. The number of authorized shares of this Series may be
reduced by further resolution duly adopted by the Board and by the filing of a
certificate pursuant to the provisions of the General Corporation Law of the
State of Delaware stating that such reduction has been so authorized, but the
number of authorized shares of this Series shall not be increased.
(b) Dividend Rate.
(1) Dividend rates on the shares of this Series shall be for each
quarterly dividend period (hereinafter referred to as a "Quarterly Dividend
Period"; and any Quarterly Dividend Period being hereinafter individually
referred to as a "Dividend Period" and collectively referred to as "Dividend
Periods"), which Quarterly Dividend Periods shall commence on, March 1, June 1,
September 1 and December 1 in each year and shall end on and include the day
next preceding the first day of the next Quarterly Dividend Period, at a rate
per annum of the stated value thereof 1.80% below the Applicable Rate (as
defined in paragraph (2) of this Section (b)) in respect of such Quarterly
Dividend Period. Anything to the contrary herein notwithstanding, the dividend
rate for any Quarterly Dividend Period shall in no event be less than 6.50% or
greater than 12.50% per annum. Such dividends shall be cumulative from September
1, 1998 and shall be payable, when and as declared by the Board, on the last day
of February, May, August and November of each year, commencing the last day of
November, 1998. Each such dividend shall be paid to the holders of record of
shares of this Series as they appear on the stock register of the Corporation on
such record date, not exceeding 30 days preceding the payment date thereof, as
shall be fixed by the Board. Dividends on account of arrears for any past
Dividend Periods may be declared and paid at any time, without reference to any
regular dividend payment date, to holders of record on such date, not exceeding
45 days preceding the payment date thereof, as may be fixed by the Board.
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<PAGE> 27
(2) Except as provided below in this paragraph, the "Applicable Rate"
for any Quarterly Dividend Period shall be the highest of the Treasury Bill
Rate, the Ten Year Constant Maturity Rate or the Twenty Year Constant Maturity
Rate (each as hereinafter defined) for such Dividend Period. In the event that
the Corporation determines in good faith that for any reason one or more of such
rates cannot be determined for any Quarterly Dividend Period, then the
Applicable Rate for such Dividend Period shall be the higher of whichever of
such rates can be so determined. In the event that the Corporation determines in
good faith that none of such rates can be determined for any Quarterly Dividend
Period, then the Applicable Rate in effect for the preceding Dividend Period
shall be continued for such Dividend Period.
(3) Except as provided below in this paragraph, the "Treasury Bill
Rate" for each Quarterly Dividend Period shall be the arithmetic average of the
two most recent weekly per annum market discount rates (or the one weekly per
annum market discount rate, if only one such rate shall be published during the
relevant Calendar Period as provided below) for three-month U.S. Treasury bills,
as published weekly by the Federal Reserve Board during the Calendar Period
immediately prior to the ten calendar days immediately preceding the last day of
February, May, August or November, as the case may be, prior to the Quarterly
Dividend Period for which the dividend rate on this Series is being determined.
In the event that the Federal Reserve Board does not publish such a weekly per
annum market discount rate during such Calendar Period, then the Treasury Bill
Rate for such Dividend Period shall be the arithmetic average of the two most
recent weekly per annum market discount rates (or the one weekly per annum
market discount rate, if only one such rate shall be published during the
relevant Calendar Period as provided below) for three-month U.S. Treasury bills,
as published weekly during such Calendar Period by any Federal Reserve Bank or
by any U.S. Government department or agency selected by the Corporation. In the
event that a per annum market discount rate for three-month U.S. Treasury bills
shall not be published by the Federal Reserve Board or by any Federal Reserve
Bank or by any U.S. Government department or agency during such Calendar Period,
then the Treasury Bill Rate for such Dividend Period shall be the arithmetic
average of the two most recent weekly per annum market discount rates (or the
one weekly per annum market discount rate, if only one such rate shall be
published during the relevant Calendar Period as provided below) for all of the
U.S. Treasury bills then having maturities of not less than 80 nor more than 100
days, as published during such Calendar Period by the Federal Reserve Board or,
if the Federal Reserve Board shall not publish such rates, by any Federal
Reserve Bank or by any U.S. Government department or agency selected by the
Corporation. In the event that the Corporation determines in good faith that for
any reason no such U.S. Treasury Bill Rates are published as provided above
during such Calendar Period, then the Treasury Bill Rate for such Dividend
Period shall be the arithmetic average of the per annum market discount rates
based upon the closing bids during such Calendar Period for each of the issues
of marketable noninterest-bearing U.S. Treasury securities with a maturity of
not less than 80 nor more than 100 days from the date of each such quotation, as
quoted daily for each business day in New York City (or less frequently if daily
quotations shall not be generally available) to the Corporation by at least
three recognized U.S. Government securities dealers selected by the Corporation.
In the event that the Corporation determines in good faith that for any reason
the Corporation cannot determine the Treasury Bill Rate for any Quarterly
Dividend Period as provided above in this paragraph, the Treasury Bill Rate for
such Dividend Period shall be the
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<PAGE> 28
arithmetic average of the per annum market discount rates based upon the closing
bids during such Calendar Period for each of the issues of marketable
interest-bearing U.S. Treasury securities with a maturity of not less than 80
nor more than 100 days from the date of each such quotation, as quoted daily for
each business day in New York City (or less frequently if daily quotations shall
not be generally available) to the Corporation by at least three recognized U.S.
Government securities dealers selected by the Corporation.
(4) Except as provided below in this paragraph, the "Ten Year Constant
Maturity Rate" for each Quarterly Dividend Period shall be the arithmetic
average of the two most recent weekly per annum Ten Year Average Yields (or the
one weekly per annum Ten Year Average Yield, if only one such Yield shall be
published during the relevant Calendar Period as provided below), as published
weekly by the Federal Reserve Board during the Calendar Period immediately prior
to the ten calendar days immediately preceding the last day of February, May,
August or November, as the case may be, prior to the Quarterly Dividend Period
for which the dividend rate on this Series is being determined. In the event
that the Federal Reserve Board does not publish such a weekly per annum Ten Year
Average Yield during such Calendar Period, then the Ten Year Constant Maturity
Rate for such Dividend Period shall be the arithmetic average of the two most
recent weekly per annum Ten Year Average Yields (or the one weekly per annum Ten
Year Average Yield, if only one such Yield shall be published during the
relevant Calendar Period as provided below), as published weekly during such
Calendar Period by any Federal Reserve Bank or by any U.S. Government department
or agency selected by the Corporation. In the event that a per annum Ten Year
Average Yield shall not be published by the Federal Reserve Board or by any
Federal Reserve Bank or by any U.S. Government department or agency during such
Calendar Period, then the Ten Year Constant Maturity Rate for such Dividend
Period shall be the arithmetic average of the two most recent weekly per annum
average yields to maturity (or the one weekly average yield to maturity, if only
one such yield shall be published during the relevant Calendar Period as
provided below) for all of the actively traded marketable U.S. Treasury fixed
interest rate securities (other than Special Securities) then having maturities
of not less than eight nor more than twelve years, as published during such
Calendar Period by the Federal Reserve Board or, if the Federal Reserve Board
shall not publish such yields, by any Federal Reserve Bank or by any U.S.
Government department or agency selected by the Corporation. In the event that
the Corporation determines in good faith that for any reason the Corporation
cannot determine the Ten Year Constant Maturity Rate for any Quarterly Dividend
Period as provided above in this paragraph, then the Ten Year Constant Maturity
Rate for such Dividend Period shall be the arithmetic average of the per annum
average yields to maturity based upon the closing bids during such Calendar
Period for each of the issues of actively traded marketable U.S. Treasury fixed
interest rate securities (other than Special Securities) with a final maturity
date not less than eight nor more than twelve years from the date of each such
quotation, as quoted daily for each business day in New York City (or less
frequently if daily quotations shall not be generally available) to the
Corporation by at least three recognized U.S. Government securities dealers
selected by the Corporation.
(5) Except as provided below in this paragraph, the "Twenty Year
Constant Maturity Rate" for each Quarterly Dividend Period shall be the
arithmetic average of the two most recent weekly per annum Twenty Year Average
Yields (or the one weekly per annum Twenty Year Average Yield, if only one such
Yield shall be published during the relevant Calendar Period as
28
<PAGE> 29
provided below), as published weekly by the Federal Reserve Board during the
Calendar Period immediately prior to the ten calendar days immediately preceding
the last day of February, May, August or November, as the case may be, prior to
the Quarterly Dividend Period for which the dividend rate on this Series is
being determined. In the event that the Federal Reserve Board does not publish
such a weekly per annum Twenty Year Average Yield during such Calendar Period,
then the Twenty Year Constant Maturity Rate for such Dividend Period shall be
the arithmetic average of the two most recent weekly per annum Twenty Year
Average Yields (or the one weekly per annum Twenty Year Average Yield, if only
one such Yield shall be published during the relevant Calendar Period as
provided below), as published weekly during such Calendar Period by any Federal
Reserve Bank or by any U.S. Government department or agency selected by the
Corporation. In the event that a per annum Twenty Year Average Yield shall not
be published by any Federal Reserve Board or by any Federal Reserve Bank or by
any U.S. Government department or agency during such Calendar Period, then the
Twenty Year Constant Maturity Rate for such Dividend Period shall be the
arithmetic average of the two most recent weekly per annum average yields to
maturity (or the one weekly average yield to maturity, if only one such yield
shall be published during the relevant Calendar Period as provided below) for
all of the actively traded marketable U.S. Treasury fixed interest rate
securities (other than Special Securities) then having maturities of not less
than eighteen nor more than twenty-two years, as published during such Calendar
Period by the Federal Reserve Board or, if the Federal Reserve Board shall not
publish such yields, by any Federal Reserve Bank or by any U.S. Government
department or agency selected by the Corporation. In the event that the
Corporation determines in good faith that for any reason the Corporation cannot
determine the Twenty Year Constant Maturity Rate for any Quarterly Dividend
Period as provided above in this paragraph, then the Twenty Year Constant
Maturity Rate for such Dividend Period shall be the arithmetic average of the
per annum average yields to maturity based upon the closing bids during such
Calendar Period for each of the issues of actively traded marketable U.S.
Treasury fixed interest rate securities (other than Special Securities) with a
final maturity date not less than eighteen nor more than twenty-two years from
the date of each such quotation, as quoted daily for each business day in New
York City (or less frequently if daily quotations shall not be generally
available) to the Corporation by at least three recognized U.S. Government
securities dealers selected by the Corporation.
(6) The Treasury Bill Rate, the Ten Year Constant Maturity Rate and the
Twenty Year Constant Maturity Rate shall each be rounded to the nearest five
hundredths of a percentage point.
(7) The dividend rate with respect to each Quarterly Dividend Period
will be calculated as promptly as practicable by the Corporation according to
the appropriate method described herein. The mathematical accuracy of each such
calculation will be confirmed in writing by independent accountants of
recognized standing. The Corporation will cause each dividend rate to be
published in a newspaper of general circulation in New York City prior to the
commencement of the new Quarterly Dividend Period to which it applies and will
cause notice of such dividend rate to be enclosed with the dividend payment
checks next mailed to the holders of shares of this Series.
(8) For purposes of this Section (b), the term
29
<PAGE> 30
(i) "Calendar Period" shall mean 14 calendar days;
(ii) "Special Securities" shall mean securities which can, at
the option of the holder, be surrendered at face value in payment of any Federal
estate tax or which provide tax benefits to the holder and are priced to reflect
such tax benefits or which were originally issued at a deep or substantial
discount;
(iii) "Ten Year Average Yield" shall mean the average yield to
maturity for actively traded marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities of ten years); and
(iv) "Twenty Year Average Yield" shall mean the average yield
to maturity for actively traded marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities of 20 years).
(9) No full dividends shall be declared or paid or set apart for
payment on Preferred Stock of any series ranking, as to dividends, on a parity
with or junior to this Series for any period unless full cumulative dividends
have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for such payment on this Series for
all dividend payment periods terminating on or prior to the date of payment of
such full cumulative dividends. When dividends are not paid in full, as
aforesaid, upon the shares of this Series and any other Preferred Stock ranking
on a parity as to dividends with this Series, all dividends declared upon shares
of this Series and any other Preferred Stock ranking on a parity as to dividends
with this Series shall be declared pro rata so that the amount of dividends
declared per share on this Series and such other Preferred Stock shall in all
cases bear to each other the same ratio that accrued dividends per share on the
shares of this Series and such other Preferred Stock bear to each other. Holders
of shares of this Series shall not be entitled to any dividend, whether payable
in cash, property or stocks, in excess of full cumulative dividends, as herein
provided, on this Series. No interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment or payments on this Series
which may be in arrears.
(10) So long as any shares of this Series are outstanding, no dividend
(other than a dividend in Common Stock or in any other stock ranking junior to
this Series as to dividends and upon liquidation and other than as provided in
paragraph (9) of this Section (b)) shall be declared or paid or set aside for
payment or other distribution declared or made upon the Common Stock or upon any
other stock ranking junior to or on a parity with this series as to dividends or
upon liquidation, nor shall any Common Stock or any other stock of the
Corporation ranking junior to or on a parity with this Series as to dividends or
upon liquidation be redeemed, purchased or otherwise acquired for any
consideration (or any moneys paid to or made available for a sinking fund for
the redemption of any shares of any such stock) by the Corporation (except by
conversion into or exchange for stock of the Corporation ranking junior to this
Series as to dividends and upon liquidation) unless, in each case, the full
cumulative dividends on all outstanding shares of this Series shall have been
paid for all past dividend payment periods.
(11) Dividends payable on each share of this Series for each full
Quarterly Dividend Period shall be computed by dividing the dividend rate for
such Quarterly Dividend Period by four and applying such rate against the stated
value per share of this Series. Dividends payable
30
<PAGE> 31
on this Series for any period less than a full Quarterly Dividend Period shall
be computed on the basis of a 360 day year consisting of 30 day months.
(c) Redemption.
(1) The Corporation, at its option, may redeem shares of this Series,
as a whole or in part, at any time or from time to time, at a redemption price
of $100 per share, plus, in each case, accrued and unpaid dividends thereon to
the date fixed for redemption.
(2) In the event that fewer than all the outstanding shares of this
Series are to be redeemed, the number of shares to be redeemed shall be
determined by the Board and the shares to be redeemed shall be determined by lot
or pro rata as may be determined by the Board or by any other method as may be
determined by the Board in its sole discretion to be equitable.
(3) In the event the Corporation shall redeem shares of this Series,
notice of such redemption shall be given by first class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the redemption date, to
each holder of record of the shares to be redeemed, at such holder's address as
the same appears on the stock register of the Corporation. Each such notice
shall state: (i) the redemption date; (ii) the number of shares of this Series
to be redeemed and, if fewer than all the shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such holder; (iii) the
redemption price; (iv) the place or places where certificates for such shares
are to be surrendered for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date.
(4) Notice having been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in providing
money for the payment of the redemption price) dividends on the shares of this
Series so called for redemption shall cease to accrue, and said shares shall no
longer be deemed to be outstanding, and all rights of the holders thereof as
stockholders of the Corporation (except the right to receive from the
Corporation the redemption price) shall cease. Upon surrender in accordance with
said notice of the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board shall so require and the notice shall so
state), such shares shall be redeemed by the Corporation at the redemption price
aforesaid. In case fewer than all the shares represented by any such certificate
are redeemed, a new certificate shall be issued representing the unredeemed
shares without cost to the holder thereof.
(5) Any shares of this Series which shall at any time have been
redeemed shall, after such redemption, have the status of authorized but
unissued shares of Preferred Stock, without designation as to series until such
shares are once more designated as part of a particular series by the Board.
(6) Notwithstanding the foregoing provisions of this Section (c), if
any dividends on this Series are in arrears, no shares of this Series shall be
redeemed unless all outstanding shares of this Series are simultaneously
redeemed, and the Corporation shall not purchase or otherwise acquire any shares
of this Series; provided, however, that the foregoing shall not prevent the
purchase or acquisition of shares of this Series pursuant to a purchase or
exchange offer made on the same terms to holders of all outstanding shares of
this Series.
(d) Conversion or Exchange.
31
<PAGE> 32
The holders of shares of this Series shall not have any rights herein
to convert such shares into or exchange such shares for shares of any other
class or classes or of any other series of any class or classes of capital stock
of the Corporation.
(e) Voting.
The shares of this Series shall not have any voting powers either
general or special, except that
(1) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least
66-2/3% of all of the shares of this Series at the time outstanding, given in
person or by proxy, either in writing or by a vote at a meeting called for the
purpose at which the holders of shares of this Series shall vote together as a
separate class, shall be necessary for authorizing, effecting or validating the
amendment, alteration or repeal of any of the provisions of the Restated
Certificate or of any certificate amendatory thereof or supplemental thereto
(including any Certificate of Designation, Preferences and Rights or any similar
document relating to any series of Preferred Stock) which would adversely affect
the preferences, rights, powers or privileges of this Series;
(2) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least
66-2/3% of all of the shares of this Series and all other series of Preferred
Stock ranking on a parity with shares of this Series, either as to dividends or
upon liquidation, at the time outstanding, given in person or by proxy, either
in writing or by a vote at a meeting called for the purpose at which the holders
of shares of this Series and such other series of Preferred Stock shall vote
together as a single class without regard to series, shall be necessary for
authorizing, effecting or validating the creation, authorization or issue of any
shares of any class of stock of the Corporation ranking prior to the shares of
this Series as to dividends or upon liquidation, or the reclassification of any
authorized stock of the Corporation into any such prior shares, or the creation,
authorization or issue of any obligation or security convertible into or
evidencing the right to purchase any such prior shares;
(3) If at any time a default in preference dividends on the Preferred
Stock shall exist, the number of directors constituting the Board of Directors
of the Corporation shall be increased by two, and the holders of the Preferred
Stock of all series shall have the right at an annual or special meeting of
stockholders, voting together as a single class without regard to series, to the
exclusion of the holders of Common Stock, to elect two directors of the
Corporation to fill such newly created directorships. Such right shall continue
until there are no dividends in arrears upon the Preferred Stock. Each director
elected by the holders of shares of Preferred Stock (herein called a "Preferred
Director") shall continue to serve as such director until the next annual
meeting, notwithstanding that prior to such time a default in preference
dividends shall cease to exist. Each director elected by the holders of shares
of Preferred Stock (herein called a "Preferred Director") shall continue to
serve as such director until the next annual meeting, notwithstanding that prior
to such time a default in preference dividends shall cease to exist. Any
Preferred Director may be removed by, and shall not be removed except by, the
vote of the holders of record of the outstanding shares of Preferred Stock,
voting together as a single class without regard to series, at a meeting of the
stockholders, or of the holders of shares of Preferred Stock,
32
<PAGE> 33
called for that purpose. So long as a default in any preference dividends on the
Preferred Stock shall exist, (A) any vacancy in the office of a Preferred
Director may be filled (except as provided in the following clause (B)) by an
instrument in writing signed by the remaining Preferred Director and filed with
the Corporation and (B) in the case of the removal of any Preferred Director,
the vacancy may be filled by the vote of the holders of the outstanding shares
of Preferred Stock, voting together as a single class without regard to series,
at the same meeting at which such removal shall be voted. Each director
appointed as aforesaid by the remaining Preferred Director shall be deemed, for
all purposes hereof, to be a Preferred Director. Whenever the term of office of
the Preferred Directors shall end and a default in preference dividends shall no
longer exist, the number of directors constituting the Board of Directors of the
Corporation shall be reduced by two. For the purposes hereof, a "default in
preference dividends" on the Preferred Stock shall be deemed to have occurred
whenever the amount of accrued dividends upon any series of the Preferred Stock
shall be equivalent to six full quarter-yearly dividends or more, and, having
so occurred, such default shall be deemed to exist thereafter until, but only
until, all accrued dividends on all shares of Preferred Stock of each and every
series then outstanding shall have been paid to the end of the last preceding
quarterly dividend period.
(f) Liquidation Rights.
(1) Upon the dissolution, liquidation or winding up of the Corporation,
the holders of the shares of this Series shall be entitled to receive out of the
assets of the Corporation, before any payment or distribution shall be made on
the Common Stock or on any other class of stock ranking junior to the Preferred
Stock upon liquidation, the amount of $100 per share, plus a sum equal to all
dividends (whether or not earned or declared) on such shares accrued and unpaid
thereon to the date of final distribution.
(2) Neither the sale of all or substantially all the property or
business of the Corporation, nor the merger or consolidation of the Corporation
into or with any other corporation or the merger or consolidation of any other
corporation into or with the Corporation, shall be deemed to be a dissolution,
liquidation or winding up, voluntary or involuntary, for the purposes of this
Section (f).
(3) After the payment to the holders of the shares of this Series of
the full preferential amounts provided for in this Section (f), the holders of
this Series as such shall have no right or claim to any of the remaining assets
of the Corporation.
(4) In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any dissolution,
liquidation or winding up of the Corporation, whether voluntary or involuntary,
shall be insufficient to pay in full all amounts to which such holders are
entitled pursuant to paragraph (1) of this Section (f), no such distribution
shall be made on account of any shares of any other class or series of Preferred
Stock ranking on a parity with the shares of this Series upon such dissolution,
liquidation or winding up unless proportionate distributive amounts shall be
paid on account of the shares of this Series, ratably, in proportion to the full
distributable amounts for which holders of all such parity shares are
respectively entitled upon such dissolution, liquidation or winding up.
(5) Upon the dissolution, liquidation or winding up of the Corporation,
the holders of shares of this Series then outstanding shall be entitled to be
paid out of the assets of the
33
<PAGE> 34
Corporation available for distribution to its stockholders all amounts to which
such holders are entitled pursuant to paragraph (1) of this Section (f) before
any payment shall be made to the holders of any class of capital stock of the
Corporation ranking junior upon liquidation to this Series.
(g) For purposes of this resolution, any stock of any class or classes
of the Corporation shall be deemed to rank:
(1) prior to the shares of this Series, either as to dividends or upon
liquidation, if the holders of such class or classes shall be entitled to the
receipt of dividends or of amounts distributable upon dissolution, liquidation
or winding up of the Corporation, as the case may be, in preference or priority
to the holders of shares of this Series;
(2) on a parity with shares of this Series, either as to dividends or
upon liquidation, whether or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share or sinking fund provisions, if any,
be different from those of this Series, if such stock is the Corporation's
Preferred Stock with Cumulative and Adjustable Dividends, Series B (Without Par
Value), or if the holders of such stock shall be entitled to the receipt of
dividends or of amounts distributable upon dissolution, liquidation or winding
up of the Corporation, as the case may be, in proportion to their respective
dividend rates or liquidation prices, without preference or priority, one over
the other, as between the holders of such stock and the holders of shares of
this Series; and
(3) junior to shares of this Series, either as to dividends or upon
liquidation, if such class shall be Common Stock or if the holders of shares of
this Series shall be entitled to receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the Corporation, as
the case may be, in preference or priority to the holders of shares of such
class or classes.
34
<PAGE> 1
Exhibit 5 and 23.2
February 23, 1999
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: BANK ONE CORPORATION
Form S-3 Registration Statement
Ladies and Gentlemen:
I am General Counsel and Secretary of BANK ONE CORPORATION, a Delaware
corporation (the "Company"), and in such capacity, I, or members of my staff
subject to my supervision, have represented the Company in connection with the
preparation of the Company's Registration Statement on Form S-3 concurrently
being filed with the Securities and Exchange Commission (the "Registration
Statement") relating to (i) debt securities which may be either senior (the
"Senior Securities") or subordinated (the "Subordinated Securities")
(collectively, the "Debt Securities"), either of which may be convertible or
exchangeable into the Company's common stock, $0.01 par value per share (the
"Common Stock"), the Company's preferred stock (the "Preferred Stock"), other
Debt Securities, Debt Warrants (as defined herein), Preferred Stock Warrants (as
defined herein) or Common Stock Warrants (as defined herein), (ii) warrants to
purchase Debt Securities (the "Debt Warrants"), (iii) currency warrants (the
"Currency Warrants"), (iv) stock-index warrants (the "Stock-Index Warrants"),
(v) warrants relating to other indices (the "Other Warrants"), (vi) shares of
Preferred Stock which may be convertible into shares of Common Stock or
exchangeable for Debt Securities, (vii) shares of Preferred Stock represented by
depositary shares (the "Depositary Shares"), (viii) warrants to purchase shares
of Preferred Stock (the "Preferred Stock Warrants"), (ix) shares of Common
Stock, and (x) warrants to purchase shares of Common Stock (the "Common Stock
Warrants"). The Debt Warrants, Currency Warrants, Stock-Index Warrants, Other
Warrants, Preferred Stock Warrants and Common Stock Warrants are referred to
herein collectively as the "Warrants"; the Debt Securities, Warrants, shares of
Preferred Stock, Depositary Shares and shares of Common Stock are referred to
herein as the "Offered Securities".
<PAGE> 2
CONTINUING OUR LETTER OF FEBRUARY 23, 1999
SHEET NO. 2
The Offered Securities will be sold or delivered from time to time as
set forth in the Registration Statement, any amendment thereto, the prospectus
contained therein (the "Prospectus") and supplements to the Prospectus (the
"Prospectus Supplement"). The Senior Securities will be issued under an
Indenture dated as of March 3, 1997, between the Company and The Chase Manhattan
Bank, as trustee, as supplemented by a First Supplemental Indenture dated as of
October 2, 1998 (the "Senior Indenture"). The Subordinated Securities will be
issued under an Indenture dated as of March 3, 1997, between the Company and The
Chase Manhattan Bank, as trustee, as supplemented by a First Supplemental
Indenture dated as of October 2, 1998 (the "Subordinated Indenture"). The Senior
Indenture and Subordinated Indenture are exhibits to the Registration Statement.
I have reviewed such corporate records and other documents and have
made such further examinations and inquiries as I have deemed necessary to
enable me to express the opinions set forth herein.
Based on the foregoing, and subject to the qualifications and
limitations stated herein, it is my opinion that:
(i) upon the issuance, authentication and delivery of the Debt
Securities in accordance with the provisions of the applicable Senior
Indenture or Subordinated Indenture, as the case may be, against
payment therefor, the Debt Securities will constitute legal, valid and
binding obligations of the Company enforceable in accordance with their
terms subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity;
(ii) upon the due execution of the debt warrant agreement and
the issuance, authentication and delivery of the Debt Warrants in
accordance with the provisions of such debt warrant agreement against
payment therefor, the Debt Warrants will constitute legal, valid and
binding obligations of the Company enforceable in accordance with their
terms subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity;
(iii) upon the due execution of the currency warrant agreement
and the issuance, authentication and delivery of the Currency Warrants
in accordance with the provisions of such currency warrant agreement
against payment therefor, the Currency Warrants will constitute legal,
valid and binding obligations of the Company enforceable in accordance
with their terms subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other laws
affecting creditors'
<PAGE> 3
CONTINUING OUR LETTER OF FEBRUARY 23, 1999
SHEET NO. 3
rights generally from time to time in effect and to general principles
of equity;
(iv) upon the due execution of the stock-index warrant
agreement and the issuance, authentication and delivery of the
Stock-Index Warrants in accordance with the provisions of such
stock-index warrant agreement against payment therefor, the Stock-Index
Warrants will constitute legal, valid and binding obligations of the
Company enforceable in accordance with their terms subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect and to general principles of
equity;
(v) upon the due execution of the warrant agreement and the
issuance, authentication and delivery of the Other Warrants in
accordance with the provisions of such warrant agreement against
payment therefor, the Other Warrants will constitute legal, valid and
binding obligations of the Company enforceable in accordance with their
terms subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity;
(vi) upon the due execution of the preferred stock warrant
agreement and the issuance, authentication and delivery of the
Preferred Stock Warrants in accordance with the provisions of such
preferred stock warrant agreement against payment therefor, the
Preferred Stock Warrants will constitute legal, valid and binding
obligations of the Company enforceable in accordance with their terms
subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity;
(vii) upon the due execution of the common stock warrant
agreement and the issuance, authentication and delivery of the Common
Stock Warrants in accordance with the provisions of such common stock
warrant agreement against payment therefor, the Common Stock Warrants
will constitute legal, valid and binding obligations of the Company
enforceable in accordance with their terms subject, as to enforcement
of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally from
time to time in effect and to general principles of equity;
(viii) upon designation of the preferences and relative,
participating, optional and other special rights, and qualifications,
limitations or restrictions of the Preferred Stock by the Company's
Board of Directors or by a duly authorized committee thereof, and
thereafter upon proper filing with the Secretary of State of the State
of Delaware of a Certificate of Designations relating to the Preferred
Stock and when such shares of Preferred Stock are issued and sold as
<PAGE> 4
CONTINUING OUR LETTER OF FEBRUARY 23, 1999
SHEET NO. 4
contemplated in the Registration Statement and in accordance with their
respective terms, such shares of Preferred Stock will be legally
issued, fully paid and nonassessable;
(ix) when the deposit agreement relating to the issuance of
the Depositary Shares has been duly authorized, executed and delivered
by the Company and the applicable depositary, the depositary receipts
evidencing the Depositary Shares have been duly executed and delivered
by the applicable depositary and duly countersigned by a registrar and
the depositary pursuant to the terms of the Deposit Agreement as
contemplated in the Registration Statement, the Depositary Shares will
be legally issued, valid and binding obligations of the Company
entitled to the benefits of the deposit agreement; and
(x) when issued as contemplated in the Registration Statement
and in accordance with its terms and, if applicable, the terms of the
Debt Securities, Preferred Stock or Common Stock Warrants which are
convertible, exchangeable or exercisable, as the case may be, into such
shares of Common Stock, the shares of the Common Stock will be legally
issued, fully paid and nonassessable.
<PAGE> 5
CONTINUING OUR LETTER OF FEBRUARY 23, 1999
SHEET NO. 5
I am a member of the Bar of the State of Illinois, and I do not express
any opinion herein concerning any law other than the law of the State of
Illinois, the federal law of the United States and the Delaware General
Corporation Law.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of my name whenever it appears in such
Registration Statement, including the Prospectus and any Prospectus Supplement
constituting a part hereof, as originally filed or as subsequently amended.
Very truly yours,
/s/Sherman I. Goldberg
<PAGE> 1
Exhibit 12
STATEMENT REGARDING COMPUTATION OF RATIOS
The ratios of earnings to fixed charges for BANK ONE CORPORATION have been
computed on the basis of the total enterprise (as defined by the Securities and
Exchange Commission) by dividing earnings before fixed charges and income taxes
by fixed charges. Fixed charges consist principally of interest expense on all
long-term and short-term borrowings, excluding or including interest on
deposits as indicated.
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement
on Form S-3 of BANK ONE CORPORATION, of our report dated February 12, 1998 on
our audits of the consolidated financial statements of BANC ONE CORPORATION as
of December 31, 1997 and 1996, and for each of the three years in the period
ended December 31, 1997, included in BANC ONE CORPORATION's Annual Report on
Form 10-K for the year ended December 31, 1997. We also consent to the reference
to our Firm under the caption "Experts" in this Registration Statement.
/s/ PricewaterhouseCoopers LLP
Columbus, Ohio
February 18, 1999
<PAGE> 1
Exhibit 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO BANK ONE CORPORATION:
As independent public accountants, we hereby consent to the incorporation
by reference in this Form S-3 Registration Statement of our report dated
January 15, 1998, on the consolidated financial statements of First Chicago NBD
Corporation included in the Form 10-K of First Chicago NBD Corporation as of
December 31, 1997 and 1996 and for the three years ended December 31, 1997 and
to the reference to our Firm under the caption "Experts" included in this
Registration Statement.
/s/ ARTHUR ANDERSEN LLP
Chicago, Illinois,
February 17, 1999
<PAGE> 1
Exhibit 23.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To BANK ONE CORPORATION:
As independent public accountants, we hereby consent to the incorporation
by reference in this Form S-3 Registration Statement of our report dated October
6, 1998 on the supplemental consolidated financial statements of BANK ONE
CORPORATION as of December 31, 1997 and 1996, and for the three years ended
December 31, 1997, and to the reference to our firm under the caption "Experts"
included in this Registration Statement.
/s/ ARTHUR ANDERSEN LLP
Chicago, Illinois,
February 17, 1999
<PAGE> 1
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Verne G. Istock, John B. McCoy, Richard J.
Lehmann, David J. Vitale, Sherman I. Goldberg, Robert A. Rosholt and M. Eileen
Kennedy, jointly and severally, his attorney-in-fact, each with power of
substitution, for him in any and all capacities to sign one or more
Registration Statements on Form S-3 relating to debt obligations of, warrants,
options, rights, preferred stock and common stock (the "Securities") of BANK
ONE CORPORATION (the "Corporation") and any amendments thereto (including any
post-effective amendments) and any subsequent registration statement filed by
the Corporation pursuant to Rule 462(b) of the Securities Act of 1933 with
respect to such Securities, in either case pursuant to resolutions adopted by
the Board of Directors of the Corporation as of February 16, 1999, and to file
the same, with exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission hereby ratifying and confirming all
that each of said attorneys-in-fact, or his substitutes, may do or cause to be
done by virtue hereof.
Signature Title
--------- -----
/s/ John H. Bryan Director
- -----------------------------
John H. Bryan
/s/ Siegfried Buschmann Director
- -----------------------------
Siegfried Buschmann
/s/ James S. Crown Director
- -----------------------------
James S. Crown
/s/ Bennett Dorrance Director
- -----------------------------
Bennett Dorrance
/s/ Dr. Maureen A. Fav, O.P. Director
- -----------------------------
Dr. Maureen A. Fav, O.P.
/s/ John R. Hall Director
- -----------------------------
John R. Hall
<PAGE> 2
/s/ Verne G. Istock Director
______________________________
Verne G. Istock
/s/ Laban P. Jackson, Jr. Director
______________________________
Laban P. Jackson, Jr.
/s/ John W. Kessler Director
______________________________
John W. Kessler
/s/ Richard J. Lehmann Director
______________________________
Richard J. Lehmann
/s/ William G. Lowrie Director
______________________________
William G. Lowrie
Director
______________________________
Richard A. Manoogian
Director
_______________________________
William T. McCormick
/s/ John B. McCoy Director and Principal Executive Officer
______________________________
John B. McCoy
/s/ Thomas E. Reilly, Jr. Director
______________________________
Thomas E. Reilly, Jr.
/s/ John W. Rogers, Jr. Director
______________________________
John W. Rogers, Jr.
/s/ Thekla R. Shackelford Director
______________________________
Thekla R. Shackelford
/s/ Alex Shumate Director
______________________________
Alex Shumate
/s/ Frederick P. Stratton, Jr. Director
______________________________
Frederick P. Stratton, Jr.
<PAGE> 3
/s/ John C. Tolleson Director
- --------------------------
John C. Tolleson
/s/ David J. Vitale Director
- --------------------------
David J. Vitale
/s/ Robert D. Walter Director
- --------------------------
Robert D. Walter
/s/ William J. Roberts Principal Accounting Officer
- --------------------------
William J. Roberts
/s/ Robert A. Rosholt Principal Financial Officer
- --------------------------
Robert A. Rosholt
Dated: February 16, 1999
<PAGE> 1
Exhibit 25.1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
-------------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
-------------------------------------------
BANK ONE CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE 31-0738296
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
ONE FIRST NATIONAL PLAZA
CHICAGO, ILLINOIS 60670
(Address of principal executive offices) (Zip Code)
-------------------------------------------
DEBT SECURITIES
(Title of the indenture securities)
================================================================================
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4
to Form T-1 filed in connection with Registration Statement No. 333-06249,
which is incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or examining
authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 17th day of February, 1999.
THE CHASE MANHATTAN BANK
By: /s/ Glenn G. McKeever
------------------------
Glenn G. McKeever
Vice President
- 3 -
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1998,
in accordance with a call made by the Federal Reserve
Bank of this District pursuant to the provisions of
the Federal Reserve Act.
Dollar Amounts
ASSETS IN MILLIONS
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin .............................................. $ 11,951
Interest-bearing balances ...................................... 4,551
Securities: ........................................................
Held to maturity securities.......................................... 1,740
Available for sale securities........................................ 48,537
Federal funds sold and securities purchased under
agreements to resell ........................................... 29,730
Loans and lease financing receivables:
Loans and leases, net of unearned income............... $127,379
Less: Allowance for loan and lease losses.............. 2,719
Less: Allocated transfer risk reserve ................. 0
--------
Loans and leases, net of unearned income,
allowance, and reserve ......................................... 124,660
Trading Assets ...................................................... 51,549
Premises and fixed assets (including capitalized
leases)......................................................... 3,009
Other real estate owned ............................................. 272
Investments in unconsolidated subsidiaries and
associated companies............................................ 300
Customers' liability to this bank on acceptances
outstanding .................................................... 1,329
Intangible assets ................................................... 1,429
Other assets ........................................................ 13,563
--------
TOTAL ASSETS ........................................................ $292,620
=========
- 4 -
<PAGE> 5
LIABILITIES
Deposits
In domestic offices .............................................. $98,760
Noninterest-bearing .......................... $39,071
Interest-bearing ............................. 59,689
In foreign offices, Edge and Agreement,
subsidiaries and IBF' ............................................ 75,403
Noninterest-bearing .......................... $ 3,877
Interest-bearing ............................. 71,526
Federal funds purchased and securities sold under agree-
ments to repurchase ................................................... 34,471
Demand notes issued to the U.S. Treasury .............................. 1,000
Trading liabilities ..................................................... 41,589
Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less .................... 3,781
With a remaining maturity of more than one year
through three years............................................. 213
With a remaining maturity of more than three years................ 104
Bank's liability on acceptances executed and outstanding .............. 1,329
Subordinated notes and debentures ..................................... 5,408
Other liabilities ..................................................... 12,041
TOTAL LIABILITIES ..................................................... 274,099
-------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ......................... 0
Common stock .......................................................... 1,211
Surplus (exclude all surplus related to preferred stock).............. 10,441
Undivided profits and capital reserves ................................ 6,287
Net unrealized holding gains (losses)
on available-for-sale securities ...................................... 566
Cumulative foreign currency translation adjustments ................... 16
TOTAL EQUITY CAPITAL .................................................. 18,521
------
TOTAL LIABILITIES AND EQUITY CAPITAL .................................. $292,620
========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
-5-
<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-----------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue 10017
New York, New York (Zip Code)
(Address of principal executive offices)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
------------------------------------
Bank One Corporation
(Exact name of obligor as specified in its charter)
Delaware 31-0738296
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
One First National Plaza 60670
Chicago, Illinois (Zip Code)
(Address of principal executive offices)
------------------------------------
Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4
to Form T-1 filed in connection with Registration Statement No. 333-06249,
which is incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or examining
authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 17th day of February, 1999.
THE CHASE MANHATTAN BANK
By: /s/ GLENN G. MCKEEVER
-----------------------
Glenn G. McKeever
Vice President
- 3 -
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1998,
in accordance with a call made by the Federal Reserve
Bank of this District pursuant to the provisions of
the Federal Reserve Act.
Dollar Amounts
ASSETS IN MILLIONS
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ............................................... $ 11,951
Interest-bearing balances ....................................... 4,551
Securities: .........................................................
Held to maturity securities........................................... 1,740
Available for sale securities......................................... 48,537
Federal funds sold and securities purchased under
agreements to resell ................................................29,730
Loans and lease financing receivables:
Loans and leases, net of unearned income .......... $127,379
Less: Allowance for loan and lease losses ......... 2,719
Less: Allocated transfer risk reserve ............. 0
--------
Loans and leases, net of unearned income,
allowance, and reserve ........................................... 124,660
Trading Assets ........................................................ 51,549
Premises and fixed assets (including capitalized
leases)........................................................... 3,009
Other real estate owned ............................................... 272
Investments in unconsolidated subsidiaries and
associated companies.............................................. 300
Customers' liability to this bank on acceptances
outstanding ...................................................... 1,329
Intangible assets ..................................................... 1,429
Other assets .......................................................... 13,563
--------
TOTAL ASSETS .......................................................... $292,620
========
- 4 -
<PAGE> 5
LIABILITIES
Deposits
In domestic offices .............................................. $ 98,760
Noninterest-bearing ............................. $39,071
Interest-bearing ................................ 59,689
In foreign offices, Edge and Agreement, subsidiaries and IBF's ... 75,403
Noninterest-bearing ............................. $ 3,877
Interest-bearing ................................ 71,526
Federal funds purchased and securities sold under agree-
ments to repurchase ................................................... 34,471
Demand notes issued to the U.S. Treasury .............................. 1,000
Trading liabilities ................................................... 41,589
Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less .................... 3,781
With a remaining maturity of more than one year
through three years ............................................ 213
With a remaining maturity of more than three years................ 104
Bank's liability on acceptances executed and outstanding............... 1,329
Subordinated notes and debentures ..................................... 5,408
Other liabilities ..................................................... 12,041
TOTAL LIABILITIES ..................................................... 274,099
-------
EQUITY CAPITAL
Perpetual preferred stock and related surplus.......................... 0
Common stock .......................................................... 1,211
Surplus (exclude all surplus related to preferred stock).............. 10,441
Undivided profits and capital reserves ................................ 6,287
Net unrealized holding gains (losses)
on available-for-sale securities ...................................... 566
Cumulative foreign currency translation adjustments ................... 16
TOTAL EQUITY CAPITAL .................................................. 18,521
------
TOTAL LIABILITIES AND EQUITY CAPITAL .................................. $292,620
========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
-5-
