<PAGE> 1
Filed Pursuant to Rule 424(B)(3)
Registration No. 33-55295
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED NOVEMBER 23, 1994)
[LOGO] U.S. $2,165,775,000
THE CHASE MANHATTAN CORPORATION
SENIOR EURO MEDIUM-TERM NOTES, SERIES B AND
SUBORDINATED EURO MEDIUM-TERM NOTES, SERIES B
DUE FROM NINE MONTHS FROM DATE OF ISSUE
------------------------
The Chase Manhattan Corporation (the "Company"), may offer from time to
time up to $2,165,775,000 aggregate initial public offering price of its Senior
Euro Medium-Term Notes, Series B (the "Senior Notes") and Subordinated Euro
Medium-Term Notes, Series B (the "Subordinated Notes") Due From Nine Months From
Date of Issue (collectively, the "Notes"). Each Note will mature nine months or
longer from its date of issue, as selected by the purchaser and agreed to by the
Company, except in the case of Notes denominated in certain currencies (see
"DESCRIPTION OF NOTES -- General" in this Prospectus Supplement). The
Subordinated Notes will be subordinated to all Senior Indebtedness of the
Company (see "THE SUBORDINATED SECURITIES -- Subordination" in the accompanying
Prospectus). At March 31, 1995, the outstanding Senior Indebtedness of the
Company, exclusive of guarantees and other contingent obligations, was
approximately $2.7 billion. Unless otherwise indicated in the applicable Pricing
Supplement to this Prospectus Supplement (a "Pricing Supplement"), a Note may
not be redeemed at the option of the Company or be repaid at the option of the
registered holder thereof prior to its stated maturity except in the event that
certain additional payments are required to be made with respect to a Note and
then only in certain specified circumstances. See "DESCRIPTION OF NOTES -- Tax
Redemption" in this Prospectus Supplement. Each Note may be denominated in U.S.
dollars, other currencies or composite currencies, such as the European Currency
Unit ("ECU"), as may be described in an applicable Pricing Supplement (the
"Specified Currency"). See "FOREIGN CURRENCY RISKS" in this Prospectus
Supplement. Unless otherwise specified in the applicable Pricing Supplement, the
Notes will be issued in denominations of $1,000 or any integral multiple
thereof, or, in the case of Notes having a Specified Currency other than U.S.
dollars, in such other minimum denomination of the Specified Currency as is set
forth herein (see "DESCRIPTION OF NOTES -- General" in this Prospectus
Supplement) or in an applicable Pricing Supplement. (Cover page continued on
next page)
------------------------
THE NOTES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK OR
NON-BANK SUBSIDIARY OF THE COMPANY AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, BANK INSURANCE FUND OR ANY OTHER GOVERNMENT AGENCY.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
=================================================================================================================
<S> <C> <C> <C>
PRICE TO PUBLIC(1) AGENTS' COMMISSIONS(2) PROCEEDS TO COMPANY(2)(3)
- -----------------------------------------------------------------------------------------------------------------
Per Note.................. 100% .125% - .750% 99.875% - 99.250%
- -----------------------------------------------------------------------------------------------------------------
Total(4).................. $2,165,775,000 $2,707,218.75 - $16,243,312.50 $2,163,067,781.25 - $2,149,531,687.50
=================================================================================================================
<FN>
(1) Unless otherwise specified in the applicable Pricing Supplement, each Note
will be issued at 100% of its principal amount.
(2) Chase Investment Bank Limited, Bear, Stearns International Limited, CS First
Boston Limited, Goldman Sachs International, Lehman Brothers International
(Europe), Merrill Lynch International Limited and Salomon Brothers
International Limited (each, an "Agent" and collectively, the "Agents"),
will purchase the Notes, as principal, from the Company, for resale to
investors and other purchasers at varying prices relating to prevailing
market prices at the time of resale as determined by the applicable Agent,
or if so specified in an applicable Pricing Supplement, for resale at a
fixed public offering price. Unless otherwise indicated in the applicable
Pricing Supplement, any Note sold to an Agent as principal will be purchased
by such Agent at a price equal to 100% of the principal amount thereof less
a percentage equal to the commission applicable to an agency sale (as
described below) of a Note of identical maturity, If agreed to by the
Company and the applicable Agent, such Agent may utilize its best efforts on
an agency basis to solicit offers to purchase the Notes at 100% of the
principal amount thereof, unless otherwise specified in an applicable
Pricing Supplement. The Company will pay a commission to each such Agent,
ranging from .125% to .750% of the principal amount of a Note, depending
upon its maturity, sold through such Agent. Commissions and discounts with
respect to Notes with maturities in excess of 30 years will be negotiated
between the Company and such Agent at the time of such sale. See "PLAN OF
DISTRIBUTION OF NOTES."
(3) Before deducting expenses payable by the Company estimated at $450,000.
(4) Or the equivalent thereof in one or more currencies or composite currencies
other than U.S. dollars.
</TABLE>
------------------------
ARRANGERS
CHASE INVESTMENT BANK LIMITED CHASE BANK A.G.
(ARRANGER FOR DEUTSCHE
MARK -- DENOMINATED NOTES)
AGENTS
CHASE INVESTMENT BANK LIMITED
BEAR, STEARNS INTERNATIONAL LIMITED
CS FIRST BOSTON LIMITED
GOLDMAN SACHS INTERNATIONAL
LEHMAN BROTHERS
MERRILL LYNCH INTERNATIONAL LIMITED
SALOMON BROTHERS INTERNATIONAL LIMITED
------------------------
The date of this Prospectus Supplement is May 2, 1995.
<PAGE> 2
(Cover page -- Continued)
The interest rate or interest rate formula and Specified Currency for each
Note will be established by the Company on the date of issuance of such Note
(the "Original Issue Date") and will be set forth therein and specified in a
Pricing Supplement. Interest rates and interest rate formulas are subject to
change by the Company, but no change will affect any Note already issued or as
to which an offer to purchase has been accepted by the Company. Unless otherwise
indicated in the applicable Pricing Supplement, each Note will bear interest at
a fixed rate ("Fixed Rate Notes"), or at a floating rate ("Floating Rate
Notes"). See "DESCRIPTION OF NOTES" in this Prospectus Supplement and
"DESCRIPTION OF DEBT SECURITIES" in the accompanying Prospectus.
Unless otherwise specified in an applicable Pricing Supplement, the Notes
will be issued in fully registered form and will be represented by a global
security or securities registered either in the name of a nominee of The
Depository Trust Company ("DTC") relating to the Notes held by or through
participants in DTC or in the name of a common depositary for Morgan Guaranty
Trust Company of New York, Brussels office, as operator for the Euroclear System
("Euroclear"), and Cedel Bank, societe anonyme ("Cedel") relating to Notes held
by participants in Euroclear and Cedel. Beneficial interests in Notes in
book-entry form will be shown on, and transfers thereof will be effected only
through, records maintained by DTC, Euroclear and Cedel and their respective
participants. Except as described in "DESCRIPTION OF NOTES -- Book-Entry Notes"
in this Prospectus Supplement, owners of beneficial interests in Notes issued in
book-entry form will not be entitled to physical delivery of Notes in
certificated form and will not be considered the holders thereof. In certain
circumstances, the Company may agree to issue Notes sold pursuant to an offering
made outside the United States to non-U.S. persons in bearer form. See
"DESCRIPTION OF NOTES -- Bearer Notes" in this Prospectus Supplement.
The Notes are not being offered for sale, or resale in connection with
their original issuance, in the United States. In addition to the offering of
the Notes made hereby, the Company may offer other notes of the same series or
other series (see "DESCRIPTION OF NOTES -- General" in this Prospectus
Supplement) in registered form in the United States, and the sale of such notes
will reduce the amount of Notes that may be sold hereunder.
Payments on the Notes will be made without deduction for United States
withholding taxes to the extent described herein.
Application has been made to list the Notes on the Luxembourg Stock
Exchange. Notice of such listing will be provided to initial purchasers of such
Notes in the applicable Pricing Supplement. Notes may be issued that are not
intended to be listed on any stock exchange.
------------------------
The Notes are being offered on a continuous basis by the Company through
the Agents. The Company may also sell Notes directly to investors and other
purchasers on its own behalf in those jurisdictions where it is authorized to do
so. There can be no assurance that any Notes will be sold or that there will be
a secondary market for the Notes. The Company reserves the right to withdraw,
cancel or modify any offer to sell Notes without notice and may reject orders in
whole or in part whether placed directly with the Company or through an Agent.
Each Agent will have the right, in its discretion, reasonably exercised, to
reject, in whole or in part any offer to purchase Notes received by it on an
agency basis. See "PLAN OF DISTRIBUTION OF NOTES" in this Prospectus Supplement.
The Agents, whether acting as agent or principal, may be deemed to be
"underwriters" under the Securities Act of 1933, as amended.
This Prospectus Supplement and the accompanying Prospectus may be used by
Chase Investment Bank Limited and Chase Securities, Inc., wholly-owned direct or
indirect subsidiaries of the Company, in connection with offers and sales
related to market-making transactions in the Notes. Chase Investment Bank
Limited and Chase Securities, Inc. 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.
<PAGE> 3
IMPORTANT INFORMATION
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT (INCLUDING ANY ACCOMPANYING PRICING SUPPLEMENT) AND THE
ACCOMPANYING PROSPECTUS, IN CONNECTION WITH THE OFFER AND SALE OF NOTES, AND, IF
GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY OF THE AGENTS.
THE DISTRIBUTION OF THIS PROSPECTUS SUPPLEMENT, THE ACCOMPANYING PROSPECTUS
AND ANY PRICING SUPPLEMENT AND THE OFFERING OF THE NOTES IN CERTAIN
JURISDICTIONS MAY BE RESTRICTED BY LAW. PERSONS INTO WHOSE POSSESSION THIS
PROSPECTUS SUPPLEMENT, THE ACCOMPANYING PROSPECTUS AND ANY PRICING SUPPLEMENT
COMES ARE REQUIRED BY THE COMPANY AND THE AGENTS TO INFORM THEMSELVES ABOUT AND
TO OBSERVE ANY SUCH RESTRICTIONS. THIS PROSPECTUS SUPPLEMENT, THE ACCOMPANYING
PROSPECTUS AND ANY PRICING SUPPLEMENT DO NOT CONSTITUTE, AND MAY NOT BE USED FOR
OR IN CONNECTION WITH, AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. FOR A FURTHER
DESCRIPTION OF CERTAIN RESTRICTIONS ON OFFERING, SALE AND DELIVERY OF NOTES AND
ON DISTRIBUTION OF THIS PROSPECTUS SUPPLEMENT, THE ACCOMPANYING PROSPECTUS AND
ANY PRICING SUPPLEMENT, SEE "PLAN OF DISTRIBUTION OF NOTES" IN THIS PROSPECTUS
SUPPLEMENT.
THERE ARE RESTRICTIONS ON THE OFFER AND SALE OF THE NOTES AND THE
DISTRIBUTION OF DOCUMENTS ISSUED IN CONNECTION WITH THE NOTES IN CERTAIN
JURISDICTIONS. SEE "PLAN OF DISTRIBUTION OF NOTES" IN THIS PROSPECTUS
SUPPLEMENT.
IN CONNECTION WITH THE ISSUE OF NOTES UNDER THE PROGRAM DESCRIBED HEREIN,
THE AGENT WHO IS SPECIFIED IN THE PRICING SUPPLEMENT IN RELATION TO THE RELEVANT
ISSUE OF NOTES MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILISE OR MAINTAIN
THE MARKET PRICE OF THE NOTES OF SUCH ISSUE AT A LEVEL WHICH MIGHT NOT OTHERWISE
PREVAIL. SUCH STABILISING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
Certain documents are incorporated by reference in the accompanying
prospectus. See "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE" in the
accompanying Prospectus. The Company accepts responsibility for information
contained in this Prospectus Supplement, the accompanying Prospectus and any
Pricing Supplement. To the best of the knowledge and belief of the Company
(which has taken all reasonable care to ensure that such is the case), the
information contained in this Prospectus Supplement and the accompanying
Prospectus (as supplemented by the Pricing Supplement and documents incorporated
by reference) is in accordance with the facts and does not omit anything likely
to affect the import of such information.
Unless otherwise indicated in the applicable Pricing Supplement, currency
amounts in this Prospectus Supplement, the accompanying Prospectus and any
Pricing Supplement are stated in United States dollars ("$", "dollars", "U.S.
dollars", "United States dollars", "U.S.$" or "USD").
DOCUMENTS INCORPORATED BY REFERENCE
Any of the documents incorporated in the Prospectus by reference can be
inspected and copied at the office of the United States Securities and Exchange
Commission (the "Commission") at 450 Fifth Street, N.W., Washington D.C. 20549
and the Commission's Regional Offices in New York (7 World Trade Center, Suite
1300, New York, New York 10048) and Chicago (Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661) and copies of such materials can be
obtained from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. In addition, such material
can be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005. Copies of the documents incorporated by
reference in the Prospectus will be made available free of charge at the office
of Banque Internationale a Luxembourg S.A., 69 Route d'Esch, L-1470, Luxembourg
(the "Listing Agent"). Any person receiving a copy of this Prospectus Supplement
may obtain, without charge, upon written or oral request, a copy of any document
incorporated by reference herein, except for the exhibits to such documents
(unless such exhibits are specifically incorporated by reference). Written
requests should be addressed to The Chase Manhattan Bank, N.A., Attention:
Corporate Trust Department, Woolgate House, Coleman Street, London EC2P 2HD.
Telephone requests can be directed to The Chase Manhattan Bank, N.A. at
44-71-726-7155.
S-2
<PAGE> 4
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes supplements,
and to the extent inconsistent therewith replaces, the description of the
general terms and provisions of the Debt Securities (as defined in the
accompanying Prospectus) set forth under the heading "DESCRIPTION OF DEBT
SECURITIES" in the accompanying Prospectus, to which description reference is
hereby made. The following description will apply to each Note unless otherwise
specified in the applicable Pricing Supplement. Certain terms not defined in
this Prospectus Supplement are defined in the accompanying Prospectus.
GENERAL
The Notes will be either Senior Notes or Subordinated Notes (referred to in
the accompanying Prospectus as "Senior Securities" and "Subordinated
Securities," respectively). The Senior Notes (to be sold outside the United
States pursuant to this Prospectus Supplement and to be sold in the United
States by means of a separate prospectus supplement) will be issued from a
series designated Senior Medium-Term Notes, Series B, and will constitute a
single series to be issued under an Indenture dated as of July 1, 1986, as
supplemented by a First Supplemental Indenture, dated as of November 1, 1990,
and a Second Supplemental Indenture, dated as of May 1, 1991 (as supplemented,
the "Senior Indenture"), between the Company and Bankers Trust Company (the
"Senior Trustee"). The Subordinated Notes (to be sold outside the United States
pursuant to this Prospectus Supplement and to be sold in the United States by
means of a separate prospectus supplement) will be issued from a series
designated Subordinated Medium-Term Notes, Series B, and will constitute a
single series to be issued under an Amended and Restated Indenture dated as of
September 1, 1993 (the "Subordinated Indenture"), between the Company and
Chemical Bank (the "Subordinated Trustee"). The Senior Indenture and the
Subordinated Indenture are collectively referred to herein as the "Indentures."
The Senior Trustee and the Subordinated Trustee are collectively referred to
herein as the "Trustees." At the date hereof, the maximum aggregate amount of
Debt Securities authorized for issuance is $2,165,775,000. This Prospectus
Supplement, together with the accompanying Prospectus and any Pricing
Supplement, may be used in connection with the offer, sale and listing of Notes
in an aggregate initial public offering price of up to U.S. $2,165,775,000 (or
its equivalent in other currencies or composite currencies), subject to
reduction as a result of future sales of the Company's senior notes and
subordinated notes of the same series or other series in the United States and
the future sale of other Securities.
The Indentures do not limit the aggregate principal amount of Debt
Securities that may be issued thereunder and provide that Debt Securities may be
issued in one or more series up to the aggregate principal amount that may be
authorized from time to time by the Company. Debt Securities of any series need
not all be issued at the same time, and a series may be reopened either for
issuances of additional Debt Securities of such series or to establish
additional terms of such series.
The Senior Notes will be unsecured and unsubordinated obligations and will
rank pari passu with all other unsecured and unsubordinated indebtedness of the
Company. The Subordinated Notes will be subordinate and junior in right of
payment to the Company's obligations to the holders of Senior Indebtedness of
the Company (as defined in the Subordinated Indenture), including general
creditors, as described under "THE SUBORDINATED SECURITIES -- Subordination" in
the accompanying Prospectus. At March 31, 1995, the outstanding Senior
Indebtedness of the Company, exclusive of guarantees and other contingent
obligations of the Company, was approximately $2.7 billion.
Except as may be set forth in a supplement to this Prospectus Supplement,
the Subordinated Notes are not convertible into any other securities and are not
Securities for which Capital Securities are exchangeable, and the Company will
not designate funds with regard to the Subordinated Notes as Available Funds or
Optional Available Funds (as such terms are defined in the Subordinated
Indenture). See "THE SUBORDINATED SECURITIES -- Exchangeability" in the
accompanying Prospectus.
Payment of principal of the Subordinated Notes may be accelerated only in
case of the bankruptcy, insolvency or reorganization of the Company. There is no
right of acceleration of the payment of principal of the Subordinated Notes upon
a default in the payment of principal of or interest on such Notes or in the
performance of any covenant of the Company contained in the Subordinated
Indenture. See "THE
S-3
<PAGE> 5
SUBORDINATED SECURITIES -- Events of Default and Waiver Thereof" in the
accompanying Prospectus.
The Notes will be offered on a continuous basis and will mature on any day
nine months or longer from the date of issue, as selected by the purchaser and
agreed to by the Company. Notes denominated in sterling will have maturities
longer than one year, to and including 5 years, and Notes denominated in
Deutsche Marks will have minimum maturities of 2 years, or in each case such
other minimum maturities or range of maturities as may be allowed or required
from time to time by the relevant central bank or equivalent governmental body
(however designated) or by any laws or regulations applicable to the Notes or to
the relevant Specified Currency.
Unless otherwise indicated in the Pricing Supplement, the Notes will bear
interest at a fixed rate, or at floating rates determined by reference to one or
more of the Base Rates (as hereinafter defined) described below, which may be
adjusted by a Spread and/or Spread Multiplier (as hereinafter defined)
applicable to such Floating Rate Notes, or any combination of fixed and floating
rates, until the principal thereof is paid or made available for payment. See
"Fixed Rate Notes" and "Floating Rate Notes" below. Notes may be issued as
discounted securities (bearing no interest or interest at rates which at the
time of issuance are below market rates), at prices below their stated principal
amounts, which securities will provide that upon redemption or acceleration of
the maturity thereof amounts less than the principal amounts thereof shall
become due and payable, or as other Notes which for United States Federal income
tax purposes would be considered to have original issue discount ("Original
Issue Discount Notes"). See "UNITED STATES TAXATION" in this Prospectus
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, if the
principal of any Original Issue Discount Note is declared to be due and payable
immediately as described in the accompanying Prospectus under "THE SENIOR
SECURITIES -- Events of Default and Waiver Thereof" or "THE SUBORDINATED
SECURITIES -- Events of Default and Waiver Thereof," the amount of principal due
and payable with respect to such Note shall be its Amortized Face Amount (as
hereinafter defined). See "Optional Redemption and Optional Repayment" below.
Interest, if any, will be payable as specified under "Fixed Rate Notes" and
"Floating Rate Notes" below. Interest payable and punctually paid or duly
provided for on any date on which interest is payable (an "Interest Payment
Date") and on the stated maturity date or upon earlier redemption or repayment
(such stated maturity date or the date of redemption or repayment, as the case
may be, being collectively hereinafter referred to as the "Maturity Date"), or
on a later date on which payment may be made hereunder in respect of such
Interest Payment Date, will be paid to the person in whose name a Note is
registered at the close of business on the Regular Record Date (as hereinafter
defined) next preceding such Interest Payment Date; provided, however, that the
first payment of interest on any Note with an Original Issue Date (as set forth
in the Pricing Supplement) between a Regular Record Date and an Interest Payment
Date or on an Interest Payment Date will be made on the Interest Payment Date
following the next succeeding Regular Record Date to the registered holder on
such next succeeding Regular Record Date; provided, further, that interest
payable at maturity or upon earlier redemption or repayment will be payable to
the person to whom principal shall be payable.
The Notes will be issued in such minimum denominations as may be agreed
between the Company and the relevant purchasers and as indicated in the relevant
Pricing Supplements, except that the minimum denomination of each Note
denominated in U.S. dollars, denominated in sterling (or where the purchase
price shall be received in the United Kingdom) or denominated in Yen shall be
$1,000, L100,000 or Y1,000,000, respectively, or such other minimum denomination
as may be allowed or required from time to time by any relevant central bank or
equivalent governmental body, however designated, or by any laws or regulations
applicable to the Notes or to the relevant Specified Currency. The Notes will be
issued in integral multiples of 1,000 units of any Specified Currency in excess
of their minimum denominations.
The Company will pay any administrative costs imposed by banks in
connection with making payments of principal, interest or premium, by wire
transfer, but any tax, assessment or governmental charge imposed upon payments
will be borne by owners of beneficial interests in Notes issued in book-entry
form in respect of which payments are made.
S-4
<PAGE> 6
With respect to Notes issued in book-entry form and represented by global
Notes registered in the name of DTC, Euroclear or Cedel or their respective
nominees, all references herein to "registered holders" or "holders" will be to
DTC, Euroclear or Cedel or their respective nominees, and not to owners of
beneficial interests in such Notes, except as otherwise provided. See
"Book-Entry Notes" below.
Unless otherwise specified in the applicable Pricing Supplement, and
except, under certain circumstances, for Notes denominated in a Specified
Currency other than U.S. dollars, payments in respect of Notes will be made by
the Company only in the Specified Currency. See "FOREIGN CURRENCY RISKS" in this
Prospectus Supplement.
BOOK-ENTRY NOTES
The Notes will be issued (i) in whole or in part in the form of one or more
fully registered global Notes (each, a "Global Book-Entry Note") or (ii) as
temporary global notes exchangeable for permanent global Notes in bearer form
or, if canceled, for definitive Notes in bearer form. See "-- Bearer Notes"
below. Any Note issued in book-entry form will be represented by (i) a Global
Book-Entry Note (a "DTC Global Note") deposited with The Chase Manhattan Bank,
N.A. (the "Bank"), as custodian (the "Custodian") for DTC, and registered in the
name of Cede & Co., as nominee of DTC, and/or (ii) a Global Book-Entry Note (a
"Euroclear/Cedel Global Note") deposited with the Bank, as common depositary
(the "Common Depositary") for Morgan Guaranty Trust Company of New York,
Brussels office, as operator of Euroclear, and Cedel.
Ownership of beneficial interests in a DTC Global Note or a Euroclear/Cedel
Global Note will be shown on, and the transfer of such interests will be
effected only through, records maintained by DTC, Euroclear or Cedel, as the
case may be. The laws of some states of the United States may require that
certain purchasers of securities take physical delivery of such securities in
certificated form. Such transfer restrictions and such laws may impair the
ability to own, transfer or pledge beneficial interests in a DTC Global Note or
a Euroclear/Cedel Global Note.
So long as DTC or its nominee for a DTC Global Note, or Euroclear or Cedel
or the nominee of the Common Depositary for a Euroclear/Cedel Global Note, is
the registered holder of its respective Global Book-Entry Note, DTC or its
nominee or Euroclear or Cedel or the nominee of the Common Depositary, as the
case may be, will be considered the sole owner or holder of the Notes
represented by such Global Book-Entry Note for all purposes under the applicable
Indenture. Except as provided below, owners of beneficial interests in a Global
Book-Entry Note will not be entitled to have Notes represented by such Global
Book-Entry Note registered in their names, will not receive or be entitled to
receive physical delivery of such Notes in certificated form and will not be
considered the owners or holders thereof under the applicable Indenture. Except
as otherwise provided herein, the holder of the relevant Global Book-Entry Note
shall be the only person entitled to receive payments with respect to Notes
represented by such Global Book-Entry Note. The Company will in every case be
discharged by payment to, or to the order of, the holder of such Global Book-
Entry Note in the amount so paid. Each of the persons shown in the records of a
holder of a Global Book-Entry Note as an owner of a beneficial interest therein
must look solely to the holder of such Global Book-Entry Note for its share of
any such payment so made by the Company.
Transfers between owners of beneficial interests in a DTC Global Note
through DTC ("DTC Holders") will occur in accordance with DTC rules. Transfers
between persons owning beneficial interests in a Euroclear/Cedel Global Note
through Euroclear or Cedel ("Euroclear Holders" or "Cedel Holders,"
respectively) will occur in accordance with the applicable rules and operating
procedures of Euroclear or Cedel, as the case may be. Transfers between DTC
Holders, on the one hand, and Euroclear Holders or Cedel Holders on the other,
of Global Book-Entry Notes will be effected in accordance with DTC, Euroclear or
Cedel rules by the Bank as Common Depositary for Euroclear or Cedel and as
Custodian for DTC; however, such transactions will be effected on a
free-of-payment basis only, not on a delivery-against-payment basis, and will
require delivery of instructions to DTC, Euroclear or Cedel, as the case may be,
by the counterparty on any such system in accordance with its rules and
procedures and within its established deadlines. DTC, Euroclear or Cedel will,
if the transaction meets its settlement requirements, deliver instructions to
the Bank as Common Depositary and as Custodian for DTC to take action to effect
final settlement on its behalf by delivering or receiving Notes in DTC,
Euroclear or Cedel, as the case may be. DTC Holders, Euroclear Holders and Cedel
Holders may not deliver instructions directly to the Bank as Custodian for DTC
or as Common Depositary for Euroclear and Cedel.
S-5
<PAGE> 7
Because of time-zone differences, credits of Notes received in Euroclear or
Cedel as a result of a transaction with a DTC Holder will be made during
subsequent securities settlement processing as of the business day of Euroclear
or Cedel following the DTC settlement date and such credits or any transactions
in such Notes settled during such processing will be reported to the relevant
Euroclear Holders or Cedel Holders on such day.
THE DEPOSITORY TRUST COMPANY. DTC has advised the Company and the Agents
that it is a limited-purpose trust company organized under the laws of the State
of New York, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended. DTC was created to hold securities for its
participating organizations ("DTC Participants") and facilitate the clearance
and settlement of securities transactions between DTC Participants through
electronic book-entry changes in accounts of such DTC Participants, thereby
eliminating the need for physical movement of certificates. DTC Participants
include securities brokers and dealers (including the Agents), banks, trust
companies and clearing corporations and may include certain other organizations.
Indirect access to the DTC system also is available to others such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a DTC Participant, either directly or indirectly ("Indirect
DTC Participants").
DTC can act only on behalf of DTC Participants. Owners of beneficial
interests in a DTC Global Note that are not DTC Participants or Indirect DTC
Participants but desire to purchase, sell or otherwise transfer ownership of
such interests may do so only through DTC Participants and Indirect DTC
Participants. In addition, principal, premium (if any) and interest payments (if
any) on Notes represented by a DTC Global Note will be made by the Company to
DTC or its nominee, as the case may be, as the registered owner of such DTC
Global Note. The Company expects that DTC or its nominee, upon any receipt of
any payment of principal, premium or interest in respect of a DTC Global Note,
will credit immediately the accounts of the DTC Participants with payment in
amounts proportionate to their respective holdings in principal amount of
beneficial interest in such DTC Global Note as shown on the records of DTC.
Neither the Company nor any Trustee nor any Paying Agent (as hereinafter
defined) will have any responsibility or liability for any aspect of the records
relating to or payments made on account of owners of beneficial interests in a
DTC Global Note, or for maintaining, supervising or reviewing any records
relating to such beneficial interests. The Company also expects that payments by
DTC Participants to owners of beneficial interests in a DTC Global Note held
through such DTC Participants will be governed by standing customer instructions
and customary practices, as is now the case with securities registered in
"street name." Such instructions will be the responsibility of such DTC
Participants.
Under the rules, regulations and procedures creating and affecting DTC and
its operations, DTC is required to make book-entry transfers among DTC
Participants on whose behalf it acts with respect to a DTC Global Note and is
required to receive and transmit distributions of principal of, and premium (if
any) and interest (if any) on, such DTC Global Note. DTC Participants and
Indirect DTC Participants with which owners of beneficial interests in a DTC
Global Note have accounts similarly are required to make book-entry transfers
and receive and transmit such payments on behalf of such owners.
Because DTC can only act on behalf of DTC Participants, who in turn act on
behalf of Indirect DTC Participants and certain banks, the ability of owners of
beneficial interests in a DTC Global Note to pledge such interests to persons or
entities that do not participate in the DTC system, or otherwise take actions in
respect of such interests, may be limited due to lack of physical certificates
for the Notes.
CEDEL. Cedel is incorporated under the laws of Luxembourg as a
professional depositary. Cedel holds securities for its participating
organizations ("Cedel Participants") and facilitates the clearance and
settlement of securities transactions between Cedel Participants through
electronic book-entry changes in accounts of Cedel Participants, thereby
eliminating the need for physical movement of certificates. Transactions may be
settled in Cedel in any of 30 currencies, including U.S. dollars. Cedel provides
to Cedel Participants, among other things, services for safekeeping,
administration, clearance and settlement of internationally-traded securities
and securities lending and borrowing. Cedel interfaces with domestic markets in
several countries. As a professional depositary, Cedel is subject to regulation
by the Luxembourg Monetary Institute. Cedel Participants are recognized
financial institutions around the world, including underwriters, securities
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brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations and may include the Agents. Indirect access to Cedel is also
available to others, such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a Cedel Participant,
either directly or indirectly.
EUROCLEAR. Euroclear was created in 1968 to hold securities for its
participants ("Euroclear Participants") and to clear and settle transactions
between Euroclear Participants through simultaneous electronic book-entry
delivery against payment, thereby eliminating the need for physical movement of
certificates and any risk from lack of simultaneous transfers of securities and
cash. Transactions may now be settled in any of 29 currencies, including U.S.
dollars. Euroclear includes various other services, including securities lending
and borrowing and interfaces with domestic markets in several countries in a
manner generally similar to the arrangements for cross-market transfers with DTC
described above. Euroclear is operated by Morgan Guaranty Trust Company of New
York, Brussels, Belgium office (the "Euroclear Operator"), under contract with
Euro-clear Clearance System S.C., a Belgian cooperative corporation (the
"Cooperative"). All operations are conducted by the Euroclear Operator, and all
Euroclear securities clearance accounts and Euroclear cash accounts are accounts
with the Euroclear Operator, not the Cooperative. The Cooperative establishes
policy for Euroclear on behalf of Euroclear Participants. Euroclear Participants
include banks (including central banks), securities brokers and dealers and
other professional financial intermediaries and may include the Agents. Indirect
access to Euroclear is also available to other firms that clear through or
maintain a custodial relationship with a Euroclear Participant, either directly
or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Board of Governors of the Federal Reserve System
and the New York State Banking Department, as well as the Belgian Banking
Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of Euroclear, and applicable Belgian law
(collectively, the "Euroclear Terms and Conditions"). The Euroclear Terms and
Conditions govern transfers of securities and cash within Euroclear, withdrawal
of securities and cash from Euroclear, and receipts of payments with respect to
securities in Euroclear. All securities in Euroclear are held on a fungible
basis without attribution of specific certificates to specific securities
clearance accounts. The Euroclear Operator acts under the Euroclear Terms and
Conditions only on behalf of Euroclear Participants, and has no record of or
relationship with persons holding through Euroclear Participants.
PAYMENTS ON EUROCLEAR/CEDEL GLOBAL NOTE. Principal of, premium (if any)
and interest (if any) on Notes represented by a Euroclear/Cedel Global Note will
be paid only to Euroclear or Cedel or the Common Depositary. All such payments
will be made in immediately available funds. Each of Euroclear and Cedel will
undertake in such circumstances to credit such principal, premium and interest
received by it in respect of any portion of a Euroclear/Cedel Global Note to the
respective accounts having an interest therein. Distributions with respect to
beneficial interests in a Euroclear/Cedel Global Note will be credited to the
cash accounts of Euroclear Participants or Cedel Participants in accordance with
the relevant system's rules and procedures, to the extent received by such
system or by the Common Depositary.
ALTERNATE PROCEDURES. Although DTC, Euroclear and Cedel have agreed to the
foregoing procedures in order to facilitate transfers of beneficial interests in
Global Book-Entry Notes among their respective participants, they are under no
obligation to perform or continue to perform such procedures and such procedures
may be discontinued at any time.
If DTC, Euroclear or Cedel is at any time unwilling, unable or ineligible
to continue as a depositary and a successor depositary is not appointed by the
Company within 90 days, the Company will issue registered Notes in certificated
form in exchange for beneficial interests in each DTC Global Note or
Euroclear/Cedel Global Note, as the case may be. In addition, the Company may at
any time determine not to have Notes represented by Global Book-Entry Notes,
and, in such event, will issue registered Notes in certificated form in exchange
for Global Book-Entry Notes. In any such instance, an owner of a beneficial
interest in a Global Book-Entry Note will be entitled to physical delivery in
certificated form of Notes equal in principal amount to such beneficial interest
and to have such Notes registered in its name. Unless otherwise indicated in the
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applicable Pricing Supplement, Notes so issued in certificated form will be
issued in denominations of U.S. $1,000 (or the minimum denomination at which
Notes may be newly issued, in the case of Notes denominated in a Specified
Currency other than U.S. dollars) or any amount in excess thereof that is an
integral multiple of 1,000 units of the Specified Currency in which the Notes
are denominated and will be issued in registered form only, without coupons.
Notes issued in certificated form may be transferred or exchanged in the
offices described in the immediately following paragraph. Notes issued in
book-entry form through the facilities of DTC, Euroclear or Cedel may be
transferred or exchanged through a participating member of DTC, Euroclear or
Cedel. No service charge will be made for any registration of transfer or
exchange of Notes issued in certificated form, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith.
In the case of Notes issued in certificated form, principal, premium (if
any) and interest (if any) will be payable, the transfer of such Notes will be
registrable, and such Notes will be exchangeable for registered Notes bearing
identical terms and provisions, and in the same minimum denominations, at the
office or agency of the Company in The City of New York designated for such
purpose; provided, however, that payment of interest, other than interest
payable on the Maturity Date, may be made at the option of the Company by check
mailed to the address of the person in whose name the applicable Note is
registered at the close of business on the relevant Regular Record Date.
Notwithstanding the foregoing, a registered holder of U.S. $10,000,000 or more
(or the equivalent in a Specified Currency other than U.S. dollars) in aggregate
principal amount of Notes issued in certificated form (whether having identical
or different terms and provisions) shall be entitled to receive payments of
interest by the transfer of immediately available funds to an account at a bank
located in The City of New York (or other bank consented to by the Company)
designated by such holder (provided that such bank has appropriate facilities
therefor).
BEARER NOTES
In certain circumstances, the Company may agree to issue Notes sold
pursuant to an offering made outside the United States to non-U.S. persons in
bearer form. In that event, the Notes will be represented initially by one or
more temporary global Notes in bearer form without interest coupons (the
"Temporary Global Certificates") delivered to the Common Depositary on behalf of
Euroclear and Cedel. Euroclear or Cedel, as the case may be, will credit the
account of each subscriber with the principal amount of Notes being subscribed
for by such subscriber. While the Notes are represented by a Temporary Global
Certificate, payment of principal and interest, if any, due prior to the
Exchange Date (as hereinafter defined) will be made upon presentation of such
Temporary Global Certificate only to the extent that certification of beneficial
ownership as required by United States Treasury regulations has been received by
Euroclear and/or Cedel from the holders of beneficial interests in the Temporary
Global Certificate. On and after the date (the "Exchange Date") which is the
later of (i) 40 days after the date on which a Temporary Global Certificate is
issued or (ii) the date of completion of the distribution of the Notes as
certified by the applicable Agent, interests in such Temporary Global
Certificate representing the Notes will be exchangeable upon request being given
by Euroclear and/or Cedel acting on the instructions of the holders of
beneficial interests in such Temporary Global Certificate for one or more
permanent global Notes in bearer form (the "Permanent Global Notes") or, if the
Permanent Global Notes have been canceled and definitive Notes in bearer form
issued in exchange therefore, for definitive Notes in bearer form against
certification of beneficial ownership as required by United States Treasury
regulations in accordance with the terms of such Temporary Global Certificate
unless certification has already been given as provided in the preceding
sentence. Such certification will be to the effect that the Notes are not being
acquired by or on behalf of a United States person (other than by or through
certain foreign branches of United States financial institutions) or by a person
who has purchased the Notes for resale within the United States or to United
States persons. Until such certification has been received, a holder's
beneficial interest will continue to be represented by such Temporary Global
Certificate. No definitive Note delivered in exchange for a portion of a
Temporary Global Certificate or a Permanent Global Note will be mailed or
otherwise delivered to any location in the United States in connection with such
an exchange. Delivery of the definitive Notes and exchanges of beneficial
interests in a
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Temporary Global Certificate for beneficial interests in the Permanent Global
Note will be made without charge (save for any costs of postage and postal
insurance).
Such Temporary Global Certificate will provide that interest due prior to
the Exchange Date will be paid to Euroclear and Cedel, as the case may be, in
respect of the portion of such Temporary Global Certificate held for its
account. Each of Euroclear and Cedel has undertaken to credit such interest
received by it in respect of a Temporary Global Certificate to the respective
accounts for which it holds such Temporary Global Certificate only upon receipt
of the certification described above. Interest in respect of any portion of a
Temporary Global Certificate payable prior to or after the Exchange Date but as
to which such certification has not been received will be paid by Euroclear or
Cedel, as the case may be, to the Paying Agents identified below and will be
paid by the Paying Agents to the beneficial owner thereof only upon issuance of
the Permanent Global Note or definitive Notes in bearer form related thereto
after receipt of such certification.
The following legend will appear on the face of the Temporary Global
Certificate, the Permanent Global Notes, definitive Notes, receipts and interest
coupons:
"Any United States person (as defined in the Internal Revenue
Code of the United States) who holds this obligation will be
subject to limitations under the United States income tax laws,
including the limitations provided in Sections 165(j) and
1287(a) of the Internal Revenue Code."
PAYING AGENTS
The initial Paying Agents are (i) The Chase Manhattan Bank, N.A., acting
through its corporate trust offices in The City of New York and at Woolgate
House, Coleman Street, London EC2P 2HD, and (ii) Chase Manhattan Bank Luxembourg
S.A., 5 Rue Plaetis, L-2338 Luxembourg. The Company reserves the right at any
time to vary or terminate the appointment of any Paying Agent and to appoint
additional or other Paying Agents and to approve any change in the office
through which any Paying Agent acts, provided that, so long as any Notes remain
outstanding, there will at all times be a Paying Agent in The City of New York
and a Paying Agent in at least one city in Europe, which, so long as the Notes
are listed on the Luxembourg Stock Exchange and that exchange shall so require,
shall include Luxembourg. Notice of any such termination or appointment and of
any changes in the specified offices of any Paying Agent will be given to the
holders of the Notes in accordance with the procedures set forth in "Notices"
below.
REGISTRAR, TRANSFER AGENTS AND GLOBAL EXCHANGE AGENT
The initial Registrar and Global Exchange Agent is The Chase Manhattan
Bank, N.A., acting through its principal corporate trust offices in The City of
New York. The initial Transfer Agents are (i) The Chase Manhattan Bank, N.A.,
acting through its offices in The City of New York and at Woolgate House,
Coleman Street, London EC2P 2HD, and (ii) Chase Manhattan Bank Luxembourg S.A.,
5 Rue Plaetis, L-2338 Luxembourg. The Company reserves the right at any time to
vary or terminate the appointment of the Registrar, any transfer agent and the
Global Exchange Agent and to appoint additional Registrars, Transfer Agents and
Global Exchange Agents and to approve any change in the office through which the
Registrar, a Transfer Agent or the Global Exchange Agent acts, provided that,
(i) so long as any Notes remain outstanding, the Company will maintain in The
City of New York one or more offices or agencies where Notes may be presented
for registration of transfer and exchange and (ii) so long as any Notes are
listed on the Luxembourg Stock Exchange, the Company will maintain a transfer
agent for the Notes in Luxembourg.
OPTIONAL REDEMPTION AND OPTIONAL REPAYMENT
If set forth in the applicable Pricing Supplement, the Notes will be
subject to redemption by the Company on and after the initial redemption date
fixed at the time of sale (the "Initial Redemption Date"). If no Initial
Redemption Date is indicated with respect to a Note, such Note will not be
redeemable prior to its stated Maturity Date, except in the event that
additional payments are required to be paid with respect to such Note as
discussed under "Tax Redemption" below. On and after the Initial Redemption Date
with respect to any Note, such Note will be redeemable in whole or in part in
increments of 1,000 units of the Specified Currency (provided that any remaining
principal amount of such Note shall be at least $1,000 (or in the case of Notes
denominated in a Specified Currency other than U.S. dollars, the minimum
denomination at
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which Notes may be issued in such Specified Currency)), at the option of the
Company at a redemption price (the "Redemption Price") determined in accordance
with the following paragraph, together with interest thereon payable to the date
of redemption, on notice given to the holder of a Note not more than 60 nor less
than 30 days prior to the date of redemption.
The Redemption Price for each Note subject to redemption may initially be
equal to a certain premium (the "Initial Redemption Percentage") in excess of
100% of the principal amount of such Note to be redeemed, which may decline at
each anniversary of the Initial Redemption Date with respect to such Note by a
percentage (the "Annual Redemption Percentage Reduction") of the principal
amount to be redeemed until the Redemption Price equals 100% of such principal
amount. Any Initial Redemption Percentage and any Annual Redemption Percentage
Reduction with respect to each Note subject to redemption prior to the stated
Maturity Date will be fixed at the time of sale and set forth in the applicable
Pricing Supplement and in the applicable Note.
If set forth in the applicable Pricing Supplement, the Notes will be
subject to repayment at the option of the holders thereof in accordance with the
terms of the Notes on their respective optional repayment dates fixed at the
time of sale (each an "Optional Repayment Date"). If no Optional Repayment Date
is indicated with respect to a Note, such Note will not be repayable at the
option of the holder thereof prior to the stated Maturity Date. On any Optional
Repayment Date with respect to any Note, such Note will be repayable in whole or
in part in increments of 1,000 units of the Specified Currency, (provided that
any remaining principal amount of such Note shall be at least $1,000 (or in the
case of Notes denominated in a Specified Currency other than U.S. dollars, the
minimum denomination at which Notes may be issued in such Specified Currency))
at the option of such holder at a price equal to 100% of the principal amount to
be repaid, together with interest thereon accrued to the date of repayment, on
notice to the Paying Agent, given not more than 60 nor less than 30 days prior
to the Optional Repayment Date.
While the Notes are represented by the Global Book-Entry Note held by or on
behalf of the Custodian and/or Common Depositary, and registered in the name of
DTC or its nominee for a DTC Global Note, or Euroclear or Cedel or the nominee
of the Common Depositary for a Euroclear/Cedel Global Note, the option for
repayment may be exercised by the applicable DTC, Euroclear or Cedel
Participant, on behalf of the beneficial owners of the Global Book-Entry Notes,
by delivering a written notice substantially similar to the above mentioned form
to the applicable Paying Agent at its corporate trust office (or such other
address of which the Company shall from time to time notify the holders), not
more than 60 nor less than 30 days prior to the date of repayment. Notices of
elections from DTC, Euroclear or Cedel Participants on behalf of beneficial
owners of the Global Book-Entry Note to exercise their option to have such
Book-Entry Notes repaid must be received by the applicable Paying Agent by 5:00
P.M., New York City time, on the last day for giving such notice. In order to
ensure that a notice is received by the applicable Paying Agent on a particular
day, the beneficial owner of the Global Book-Entry Note must direct the
applicable Participant before such Participant's deadline for accepting
instructions for that day. Different Participants may have different deadlines
for accepting instructions from their customers. Accordingly, beneficial owners
of the Global Book-Entry Notes should consult the applicable Participants
through which they own their interest therein for the respective deadlines for
such Participants. All notices shall be executed by a duly authorized officer of
such Participant (with signature guaranteed) and shall be irrevocable. In
addition, beneficial owners of the Global Book-Entry Notes shall effect delivery
by causing the applicable Participant to transfer such beneficial owner's
interest in the Global Book-Entry Notes, on the Custodian and/or Common
Depositary's records, to the applicable Paying Agent. See "Book-Entry Notes".
If applicable, the Company will comply with the requirements of Rule 14a-1
under the Securities Exchange Act of 1934, as amended, and any other securities
laws or regulations in connection with any such repayment.
The Company may at any time purchase Notes at any price or prices in the
open market or otherwise. Notes so purchased by the Company may be held or
resold or, at the discretion of the Company, may be surrendered to the Trustee
for cancellation.
Notwithstanding anything in this Prospectus Supplement to the contrary, if
a Note is an Original Issue Discount Note (other than an Indexed Note (as
hereinafter defined)), the amount payable on such Note in the event of
redemption or repayment prior to the stated Maturity Date shall be the Amortized
Face Amount
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of such Note as of the date of redemption or the date of repayment, as the case
may be. The "Amortized Face Amount" of an Original Issue Discount Note shall be
the amount equal to (i) the issue price set forth in the applicable Pricing
Supplement plus (ii) that portion of the difference between the issue price and
the principal amount of such Note that has accrued at the yield to maturity
(computed in accordance with generally accepted United States bond yield
computation principles) by such date of redemption or repayment, as calculated
by the Calculation Agent (as hereinafter defined), but in no event shall the
Amortized Face Amount of an Original Issue Discount Note exceed its principal
amount.
The Initial Redemption Date or the first Optional Repayment Date of any
Notes subject to redemption or repayment, respectively, shall in no event be
less than the minimum maturities for Notes denominated in the Specified
Currency, as set forth under "DESCRIPTION OF NOTES -- General" in this
Prospectus Supplement.
TAX REDEMPTION
Unless otherwise provided in the applicable Pricing Supplement, each Note
will be subject to redemption as a whole but not in part at the option of the
Company, at a redemption price equal to the principal amount thereof (or in the
case of Original Issue Discount Notes at the Amortized Face Amount thereof)
together with accrued and unpaid interest (if any) to the date fixed for
redemption, upon notice given as described above to the holder of a Note or upon
publication of a notice as described below under "-- Notices", if the Company
determines that as a result of any change in or amendment to the laws (or any
regulations or rulings promulgated thereunder) of the United States or of any
political subdivision or taxing authority thereof or therein affecting taxation,
or any change in the application or official interpretation of such laws,
regulations or rulings, which change or amendment becomes effective on or after
the date hereof, the Company has or will become obligated to pay Additional
Amounts (as hereinafter defined) with respect to Notes as described in the first
paragraph under "Payment of Additional Amounts" below; provided that no such
notice of redemption shall be given earlier than 90 days prior to the earliest
date on which the Company would be obligated to pay such Additional Amounts were
a payment in respect of Notes then due.
The Company will make its determination as soon as practicable after it
becomes aware of an event that might give rise to such a determination. The
Trustee of the Notes that are to be redeemed will give notice to the holders of
the affected Notes, within 15 days after the date such Trustee is notified of
the Company's election to redeem Notes as described above or pay Additional
Amounts as defined below. Such notice will state the nature of the Company's
election, the reasons for and the nature of such determination and the last day
by which redemption may be made.
PAYMENT OF ADDITIONAL AMOUNTS
The Company will, subject to the limitations and exceptions set forth
below, pay to a holder on behalf of an owner of a beneficial interest (an
"Owner") of any Note or any coupon appertaining thereto who is a United States
Alien (as hereinafter defined) such additional amounts (the "Additional
Amounts") as may be necessary so that every net payment to such Owner of
principal and premium (if any) and interest (if any) on such Note, after
deduction or withholding for or on account of any present or future tax,
assessment or other governmental charge imposed upon such Owner, or by reason of
the making of such net or additional payment, by the United States, or any
political subdivision or taxing authority thereof or therein, will not be less
than the amount provided for in such Note to be then due and payable. However,
the Company shall not be required to make any such payment of Additional Amounts
for or on account of:
(1) any tax, assessment or other governmental charge which would not
have been imposed but for (i) the existence of any present or former
connection between such Owner (or between a fiduciary, settlor or
beneficiary of, or possessor of a power over, such Owner, if such Owner is
an estate or a trust, or between a member or shareholder of such Owner, if
such Owner is a partnership or corporation) and the United States,
including, without limitation, such Owner (or such fiduciary, settlor,
beneficiary, possessor, member or shareholder) being or having been a
citizen or resident or treated as a resident thereof, or being or having
been engaged in a trade or business or present therein, or having or having
had a permanent establishment therein, or (ii) the presentation of a Note
or any coupon appertaining thereto
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for payment on a date more than 15 days after the date on which such
payment became due and payable or the date on which payment thereof is duly
provided for, whichever occurs later;
(2) any estate, inheritance, gift, sales, transfer, personal property
or any similar tax, assessment or other governmental charge;
(3) any tax, assessment or other governmental charge imposed by reason
of such Owner's past or present status (i) as a private foundation or other
tax exempt organization or a domestic or foreign personal holding company
with respect to the United States, (ii) as a corporation that accumulates
earnings to avoid United States income taxes, (iii) as a controlled foreign
corporation with respect to the United States, (iv) as the owner, actually
or constructively, of 10% or more of the total combined voting power of all
classes of stock of the Company entitled to vote, or (v) as a bank that
acquires a Note as an extension of credit made pursuant to a loan agreement
entered into in the ordinary course of its trade or business;
(4) any tax, assessment or other governmental charge which is payable
primarily otherwise than by deduction or withholding from payments on a
Note;
(5) any tax, assessment or other governmental charge that would not
have been imposed but for a failure to comply with applicable
certification, information or other reporting requirements concerning the
nationality, residence, identity or connection with the United States of
the holder or Owner of a Note if, without regard to any tax treaty, such
compliance is required by statute or regulation of the United States as a
precondition to relief or exemption from such tax, assessment or other
governmental charge;
(6) any tax, assessment or other governmental charge required to be
withheld by any Paying Agent from a payment on a Note, if such payment can
be made without such withholding by any other Paying Agent of the Company
outside the United States;
(7) any tax, assessment or other governmental charge that would not
have been so imposed but for the Owner being or having been a person within
a country with respect to which the United States Treasury Department has
determined under Sections 871(h)(6) and 881(c)(6) of the Internal Revenue
Code of 1986, as amended (the "Code"), on or before the Original Issue Date
specified in the applicable Pricing Supplement that payments of interest to
persons within such country are not subject to the repeal of the United
States withholding tax provided for in Sections 871(h) and 881(c) of the
Code; or
(8) any combination of items (1), (2), (3), (4), (5), (6) or (7),
above;
nor shall Additional Amounts be paid to any holder on behalf of any Owner who is
a fiduciary or partnership or other than the sole Owner of the Note to the
extent that a beneficiary or settlor with respect to such fiduciary, a member of
such partnership or the Owner would not have been entitled to payment of the
Additional Amount had such beneficiary, settlor, member or Owner been the sole
Owner of the Note. The term "United States Alien" means any person who, for
United States Federal income tax purposes, is a foreign corporation, a
nonresident alien individual, a nonresident alien fiduciary of a foreign estate
or trust, or a foreign partnership one or more of the members of which is, for
United States Federal income tax purposes, a foreign corporation, a nonresident
alien individual or a nonresident alien fiduciary of a foreign estate or trust.
Except as specifically provided above, the Company will not be required to
make any payment with respect to any tax, assessment or other governmental
charge imposed by any government or any political subdivision or taxing
authority thereof or therein.
NOTICES
Notices to holders of Global Book-Entry Notes will be given by publication
in a daily newspaper of general circulation in The City of New York, London,
and, so long as the Notes are listed on the Luxembourg Stock Exchange and the
Luxembourg Stock Exchange so requires, Luxembourg or, if not practicable,
elsewhere in Europe on a Business Day at least twice. Such publication is
expected to be made in The Wall Street Journal in New York, the Financial Times
in London and the Luxemburger Wort in Luxembourg. In addition, notices to the
holders of Global Book-Entry Notes will be mailed to the holders' addresses
listed in the register maintained by the Registrar.
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All notices regarding definitive Notes in bearer form will be published (i)
in one leading English language daily newspaper with circulation in London which
is expected to be the Financial Times in London and (ii) in respect of any Notes
listed on the Luxembourg Stock Exchange and so long as the rules of that
exchange so require, in a Luxembourg daily newspaper with general circulation in
Luxembourg which is expected to be the Luxemburger Wort. The Company will also
ensure that notices are duly published in a manner which complies with the rules
and regulations of any other stock exchange on which the Notes are for the time
being listed. Any such notice shall be deemed to have been given on the date of
the first publication.
Until such time as any definitive Notes in bearer form are issued there
may, so long as Temporary Global Certificates or Permanent Global Notes are held
in their entirety on behalf of Euroclear and Cedel and/or another approval
clearing system, be substituted for such publication in such newspaper the
delivery of the relevant notice to Euroclear and Cedel and such other clearing
system for communication by them to the beneficial owners of interests in the
Temporary Global Certificates or Permanent Global Notes, as the case may be;
provided, however, that, so long as the rules of that exchange so require, such
publication will nevertheless be made as described in the preceding paragraph in
respect of definitive Notes in bearer form listed on the Luxembourg Stock
Exchange. Any such notice shall be deemed to have been given to the beneficial
owners of interests in the Temporary Global Certificates or Permanent Global
Notes, as the case may be, on the seventh day after the day on which said notice
was given to Euroclear and/or Cedel and/or such other clearing system.
Notices to be given by a holder of definitive Notes in bearer form should
be in writing and delivered, together with the related Note or Notes, to the
Common Depositary. While Notes are represented by a Temporary Global Certificate
or as Permanent Global Notes, such notice may be given by the beneficial owner
thereof to the Common Depositary via Euroclear and/or Cedel and/or another
approved clearing system in such manner as the Common Depositary and Euroclear
and/or Cedel and/or such other clearing system, as the case may be, may approve
for this purpose.
FIXED RATE NOTES
Each Fixed Rate Note will bear interest from the Original Issue Date at the
rate per annum stated on the face thereof (which may be zero) until the
principal amount thereof is paid or duly made available for payment. Unless
otherwise provided in the applicable Pricing Supplement, interest on Fixed Rate
Notes will be computed on the basis of a 360-day year consisting of twelve
30-day months. Unless otherwise specified in the applicable Pricing Supplement,
interest on Fixed Rate Notes will be payable semi-annually on April 15 and
October 15 of each year during the term of the Note (each an "Interest Payment
Date") and on the Maturity Date. Unless otherwise provided in the applicable
Pricing Supplement with respect to Global Book-Entry Notes, the "Regular Record
Date" for Fixed Rate Notes will be the April 1 or October 1 immediately
preceding an Interest Payment Date or, if the Interest Payment Dates are other
than April 15 and October 15, the calendar day fifteen days preceding each
Interest Payment Date, whether or not such day is a Business Day (as hereinafter
defined). Unless otherwise provided in the applicable Pricing Supplement with
respect to definitive Notes in bearer form, the interest payable on any Interest
Payment Date will, subject to certain exceptions, be paid upon presentation and
surrender of the coupons attached to, or at maturity, the definitive Note in
bearer form, at the principal office of any of the Paying Agents. If any
Interest Payment Date or the Maturity Date on a Fixed Rate Note falls on a day
that is not a Business Day, the payment shall be made on the next succeeding day
that is a Business Day as if it were made on the date such payment was due and
no additional interest will accrue on the amount so payable for the period from
and after such Interest Payment Date or the Maturity Date, as the case may be.
Interest payments will be in the amount of interest accrued from and including
the next preceding Interest Payment Date in respect of which interest has been
paid or duly provided for (or from and including the Original Issue Date if no
interest has been paid or duly provided for with respect to such Note) to but
excluding the Interest Payment Date or the Maturity Date, as the case may be.
FLOATING RATE NOTES
Each Floating Rate Note will bear interest from the Original Issue Date at
the rates determined as described below until the principal thereof is paid or
duly made available for payment. Unless otherwise indicated in the applicable
Pricing Supplement, interest on Floating Rate Notes will be determined by
reference to a "Base Rate", which may be one or more of the following (a) the
"Certificate of Deposit Rate"
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("Certificate of Deposit Rate Notes"), (b) the "CMT Rate" ("CMT Rate Notes"),
(c) the "Commercial Paper Rate" ("Commercial Paper Rate Notes"), (d) the
"Federal Funds Rate" ("Federal Funds Rate Notes"), (e) "LIBOR" ("LIBOR Notes"),
(f) "LIBID" ("LIBID Notes"), (g) the "Prime Rate" ("Prime Rate Notes"), (h) the
"Treasury Rate" ("Treasury Rate Notes") or (i) such other Base Rate or interest
rate formula as may be set forth in an applicable Pricing Supplement. The Base
Rate will be based upon the Index Maturity (as hereinafter defined) and adjusted
by a Spread and/or Spread Multiplier, if any, as specified in the applicable
Pricing Supplement. The interest rate on each Floating Rate Note will be
calculated by reference to the specified Base Rate, plus or minus the Spread
and/or multiplied by the Spread Multiplier, if any. The "Spread" is the number
of basis points above or below the Base Rate applicable to such Floating Rate
Note, and the "Spread Multiplier" is the percentage of the Base Rate applicable
to the interest rate for such Floating Rate Note. The "Index Maturity" is the
period to maturity of the instrument or obligation with respect to which the
Base Rate is calculated. The Spread, Spread Multiplier, Index Maturity and other
variable terms of the Floating Rate Notes are subject to change by the Company
from time to time, but no such change will affect any Floating Rate Note
theretofore issued or as to which an offer to purchase has been accepted by the
Company.
The applicable Pricing Supplement will specify for each Floating Rate Note
the following terms: Original Issue Date, the Base Rate, Initial Interest Rate
(as hereinafter defined), Initial Interest Rate Reset Date, Interest Payment
Dates, Index Maturity, Maturity Date, Maximum Interest Rate (as hereinafter
defined) and/or Minimum Interest Rate (as hereinafter defined), if any, Spread
and/or Spread Multiplier, if any, Initial Redemption Date, if any, Initial
Redemption Percentage, if any, Annual Redemption Percentage Reduction, if any,
Optional Repayment Dates and Optional Repayment Prices, if any, and defeasance
provisions, if any.
The rate of interest on each Floating Rate Note will be reset daily,
weekly, monthly, quarterly, semi-annually, annually or based upon another
specified period (each, an "Interest Rate Reset Period," and the first day of
each Interest Rate Reset Period being an "Interest Rate Reset Date"), as
specified in the applicable Pricing Supplement. Unless otherwise provided in the
applicable Pricing Supplement, the Interest Rate Reset Date will be, in the case
of Floating Rate Notes which reset (a) daily, each Business Day; (b) weekly, the
Wednesday of each week (with the exception of weekly reset Treasury Rate Notes,
the Interest Rate Reset Date of which shall be Tuesday of each week except as
provided below); (c) monthly, the third Wednesday of each month; (d) quarterly,
the third Wednesday of March, June, September and December of each year; (e)
semi-annually, the third Wednesday of the two months specified in the applicable
Pricing Supplement; and (f) annually, the third Wednesday of the month specified
in the applicable Pricing Supplement. If any Interest Rate Reset Date for any
Floating Rate Note would be a day that is not a Business Day, such Interest Rate
Reset Date will be postponed to the next succeeding day that is a Business Day,
except that in the case of a LIBOR Note or a LIBID Note, if the next succeeding
Business Day is in the next succeeding calendar month, such Interest Rate Reset
Date shall be the next preceding Business Day. Unless otherwise specified in the
applicable Pricing Supplement, "Business Day" means any day, other than a
Saturday or Sunday, that meets each of the following applicable requirements:
the day is (a) not a day on which banking institutions are authorized or
required by law, regulation or executive order to be closed in the City of
London or in Luxembourg, (b) if the Note is denominated or payable in a
Specified Currency other than U.S. dollars, (i) not a day on which banking
institutions are authorized or required by law, regulation or executive order to
close in the principal financial center of the country issuing the Specified
Currency (which in the case of the ECU shall include the financial center of
each country that issues a component currency of the ECU) and (ii) a day on
which banking institutions in such financial center are carrying out
transactions in such Specified Currency, (c) with respect to LIBOR and LIBID
Notes, not a day on which banking institutions in the City of London are
authorized or required by law, regulation or executive order to close or a day
on which dealings in deposits in the LIBOR Currency (as hereinafter defined) are
transacted in the London interbank market (a "London Banking Day") and (d) with
respect to any Notes where the Specified Currency is the ECU, a day that is an
"ECU Settlement Day." An "ECU Settlement Day" means any day that (a) is not
either (i) a Saturday or a Sunday or (ii) a day which appears as an ECU
Non-Settlement Day on the display designated as Page "ISDE" on the Reuters
Monitor Money Rates Service (or a day so designated by the ECU Banking
Association, if ECU Non-Settlement Days do not appear on that page) and, if ECU
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Non-Settlement Days do not appear on that page (and are not so designated), a
day on which payments in the ECU cannot be settled in the international
interbank market and (b) is a day on which payments in the ECU can be settled by
commercial banks and in foreign exchange markets in the place in which the
relevant account for payment is located.
A Floating Rate Note may also have either or both of the following: (i) a
maximum limit, or ceiling (the "Maximum Interest Rate"), on the rate of interest
which may accrue during any period; and (ii) a minimum limit, or floor (the
"Minimum Interest Rate"), on the rate of interest which may accrue during any
period. Notwithstanding any Maximum Interest Rate which may be applicable to any
Floating Rate Note pursuant to the above provisions, the interest rate on
Floating Rate Notes will in no event be higher than the maximum rate permitted
by New York law as the same may be modified by United States law of general
application. Under present New York law, the maximum rate of interest, subject
to certain exceptions, for any loan in an amount less than $250,000, is 16%, and
for any loan in the amount of $250,000 or more but less than $2,500,000, is 25%,
per annum on a simple interest basis. These limits do not apply to loans of
$2,500,000 or more.
Unless otherwise indicated in the applicable Pricing Supplement, the
interest rate in effect with respect to a Floating Rate Note during the period
commencing on an Interest Rate Reset Date will be the rate determined on the
"Interest Determination Date." The Interest Determination Date with respect to
an Interest Rate Reset Date for Certificate of Deposit Rate Notes, CMT Rate
Notes, Commercial Paper Rate Notes, Federal Funds Rate Notes and Prime Rate
Notes will be the second Business Day preceding such Interest Rate Reset Date.
The Interest Determination Date with respect to an Interest Rate Reset Date for
LIBOR Notes and LIBID Notes will be the second London Banking Day preceding such
Interest Rate Reset Date. Unless otherwise specified in the applicable Pricing
Supplement, the Interest Determination Date with respect to an Interest Rate
Reset Date for Treasury Rate Notes will be the day of the week in which the
Interest Rate Reset Date falls on which Treasury bills are auctioned (Treasury
bills are normally sold at auction on Monday of each week, unless that day is a
legal holiday, in which case the auction is normally held on the following
Tuesday, except that such auction may be held on the preceding Friday);
provided, however, that if as a result of a legal holiday an auction is held on
the Friday of the week preceding an Interest Rate Reset Date, the related
Interest Determination Date will be such preceding Friday; and provided further,
that if an auction shall fall on any day that would otherwise be an Interest
Rate Reset Date for a Treasury Rate Note, then the Interest Rate Reset Date will
instead be the first Business Day following the date of such auction.
Unless otherwise indicated in the applicable Pricing Supplement, the
interest rate in effect with respect to a Floating Rate Note on each day that is
not an Interest Rate Reset Date will be the interest rate determined as of the
Interest Determination Date pertaining to the immediately preceding Interest
Rate Reset Date, and the interest rate in effect on any day that is an Interest
Rate Reset Date will be the interest rate determined as of the Interest
Determination Date pertaining to such Interest Rate Reset Date, subject in
either case to any Maximum or Minimum Interest Rate limitation referred to
above; provided, however, that the interest rate in effect with respect to a
Floating Rate Note for the period from the Original Issue Date to the Initial
Interest Rate Reset Date (the "Initial Interest Rate") will be specified in the
applicable Pricing Supplement.
Except as provided below or in the applicable Pricing Supplement, interest
will be payable, in the case of Floating Rate Notes which reset (a) daily,
weekly or monthly, on the third Wednesday of each month or on the third
Wednesday of March, June, September and December of each year, as specified in
the applicable Pricing Supplement; (b) quarterly, on the third Wednesday of
March, June, September and December of each year; (c) semi-annually, on the
third Wednesday of the two months of each year specified in the applicable
Pricing Supplement; and (d) annually, on the third Wednesday of the month of
each year specified in the applicable Pricing Supplement (each, an "Interest
Payment Date") and, in each case, on the Maturity Date.
Unless otherwise indicated in the applicable Pricing Supplement, interest
payments will be in the amount of interest accrued from and including the next
preceding Interest Payment Date in respect of which interest has been paid or
duly provided for (or from and including the Original Issue Date if no interest
has been paid or duly provided for with respect to such Note) to but excluding
the Interest Payment Date or the Maturity Date, as the case may be.
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With respect to Global Book-Entry Notes, the "Regular Record Date" for
Floating Rate Notes with respect to any Interest Payment Date will be the
fifteenth calendar day, whether or not such date is a Business Day, prior to
such Interest Payment Date. With respect to definitive Notes in bearer form, the
interest payable on any Interest Payment Date will, subject to certain
exceptions, be paid upon presentation and surrender of the coupons attached to,
or at maturity, the definitive Note in bearer form, at the principal office of
any of the Paying Agents.
If any Interest Payment Date for any Floating Rate Note (other than an
Interest Payment Date that occurs on the Maturity Date) would otherwise fall on
a day that is not a Business Day with respect to such Note, such Interest
Payment Date shall be the next succeeding day that is a Business Day, except
that in the case of a LIBOR Note or a LIBID Note, if the next succeeding
Business Day falls in the next succeeding calendar month, the Interest Payment
Date will be advanced to the immediately preceding Business Day. If the Maturity
Date of any Floating Rate Note shall fall on a day that is not a Business Day
with respect to such Note, the payment of interest, principal or premium (if
any) due on such date shall be made on the next succeeding day that is a
Business Day and no additional interest on such amounts shall accrue from the
Maturity Date to and including the date on which any such payment is required to
be made.
Unless otherwise indicated in the applicable Pricing Supplement, The Chase
Manhattan Bank, N.A. will be the Calculation Agent. Upon the request of the
holder of a Floating Rate Note, the Calculation Agent will provide the interest
rate then in effect and, if determined, the interest rate that will become
effective as a result of a determination made for the next Interest Rate Reset
Date with respect to such Floating Rate Note. The Calculation Agent will also
make certain calculations, specified below, on or prior to the "Calculation
Date." Unless otherwise specified in the applicable Pricing Supplement, the
"Calculation Date," where applicable, pertaining to any Interest Determination
Date will be the earlier of (i) the tenth calendar day after such Interest
Determination Date or, if any such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day next preceding the applicable
Interest Payment Date or Maturity Date, as the case may be.
Unless otherwise indicated in the applicable Pricing Supplement, accrued
interest on any Floating Rate Note will be determined by multiplying the face
amount of such Floating Rate Note by an accrued interest factor. Such accrued
interest factor will be computed by adding the interest factor calculated for
each day from and including the Original Issue Date, or from but excluding the
last date to which interest has been paid, as the case may be, to and including
the date for which accrued interest is being calculated. Unless otherwise
indicated in the applicable Pricing Supplement, the interest factor for each
such day will be computed by dividing the interest rate applicable to such day
by 360 (or, in the case of Treasury Rate Notes or CMT Rate Notes, by the actual
number of days in the year).
Unless otherwise indicated in the applicable Pricing Supplement, all
percentages resulting from any calculation of the rate of interest on Floating
Rate Notes will be rounded, if necessary, to the nearest one hundred-thousandth
of a percentage point, with five one-millionths of a percentage point rounded
upward (e.g., 9.876545% (or .09876545) will be rounded upward to 9.87655% (or
.0987655)), and all U.S. dollar amounts used in or resulting from such
calculation on Floating Rate Notes will be rounded to the nearest cent (with
one-half cent being rounded upward), or in the case of Floating Rate Notes
denominated in a Specified Currency other than U.S. dollars, to the smallest
unit of the Specified Currency (with one-half unit being rounded upward).
The interest rate that will become effective on each subsequent Interest
Rate Reset Date will be determined by the Calculation Agent (calculated with
reference to the Base Rate and the Spread and/or Spread Multiplier, if any,
specified in the applicable Pricing Supplement) as follows (such determination,
in the absence of manifest error, to be binding upon all parties):
CERTIFICATE OF DEPOSIT RATE: Unless otherwise indicated in the applicable
Pricing Supplement, "Certificate of Deposit Rate" means, with respect to any
Interest Determination Date relating to a Certificate of Deposit Rate Note (a
"Certificate of Deposit Rate Interest Determination Date"), the rate on that day
for negotiable U.S. dollar certificates of deposit having the Index Maturity
specified in the applicable Pricing Supplement as published by the Board of
Governors of the Federal Reserve System in "Statistical Release H.15(519),
Selected Interest Rates," or any successor publication ("H.15(519)"), under the
heading
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"CDs (Secondary Market)," or, if such rate is not so published by 3:00 P.M., New
York City time, on the applicable Calculation Date, the Certificate of Deposit
Rate will be the rate on such Certificate of Deposit Rate Interest Determination
Date for negotiable certificates of deposit of the Index Maturity specified in
the applicable Pricing Supplement as published by the Federal Reserve Bank of
New York in its daily statistical release "Composite 3:30 P.M. Quotations for
U.S. Government Securities" ("Composite Quotations") under the heading
"Certificates of Deposit." If such rate is not published by 3:00 P.M., New York
City time, on such Calculation Date, then the Certificate of Deposit Rate for
that Certificate of Deposit Rate Interest Determination Date will be calculated
by the Calculation Agent and will be the arithmetic mean of the secondary market
offered rates as of 10:00 A.M., New York City time, on such Certificate of
Deposit Rate Interest Determination Date, of three leading nonbank dealers in
negotiable U.S. dollar certificates of deposit in The City of New York (which
may include the Agents or their affiliates) selected by the Calculation Agent,
after consultation with the Company, for negotiable certificates of deposit of
major United States money center banks (in the market for negotiable
certificates of deposit) with a remaining maturity closest to the Index Maturity
specified in the applicable Pricing Supplement in denominations of $5,000,000;
provided, however, that if the dealers selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the Certificate of Deposit
Rate will be the Certificate of Deposit Rate in effect on such Certificate of
Deposit Rate Interest Determination Date.
CMT RATE NOTES: CMT Rate Notes will bear interest at the rates (calculated
with reference to the CMT Rate and the Spread and/or Spread Multiplier, if any)
specified in such CMT Rate Notes and any applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "CMT Rate"
means, with respect to any Interest Determination Date relating to a CMT Rate
Note or any Floating Rate Note for which the interest rate is determined with
reference to the CMT Rate (a "CMT Rate Interest Determination Date"), the rate
displayed on the Designated CMT Telerate Page (as hereinafter defined) under the
caption ". . . Treasury Constant Maturities . . . Federal Reserve Board Release
H.15 . . . Mondays Approximately 3:45 P.M.," under the column for the Designated
CMT Maturity Index (as hereinafter defined) for (i) if the Designated CMT
Telerate Page is 7055, the rate on such CMT Rate Interest Determination Date and
(ii) if the Designated CMT Telerate Page is 7052, the week, or the month, as
applicable, ended immediately preceding the week in which the related CMT Rate
Interest Determination Date occurs. If such rate is no longer displayed on the
relevant page, or if not displayed by 3:00 P.M., New York City time, on the
related Calculation Date, then the CMT Rate for such CMT Rate Interest
Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index as published in the relevant H.15(519). If such
rate is no longer published, or if not published by 3:00 P.M., New York City
time, on the related Calculation Date, then the CMT Rate for such CMT Rate
Interest Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the CMT Rate Interest Determination Date with
respect to such Interest Rate Reset Date as may then be published by either the
Board of Governors of the Federal Reserve System or the United States Department
of the Treasury that the Calculation Agent, after consultation with the Company,
determines to be comparable to the rate formerly displayed on the Designated CMT
Telerate Page and published in the relevant H.15(519). If such information is
not provided by 3:00 P.M., New York City time, on the related Calculation Date,
then the CMT Rate for the CMT Rate Interest Determination Date will be
calculated by the Calculation Agent and will be a yield to maturity, based on
the arithmetic mean of the secondary market closing offer side prices as of
approximately 3:30 P.M., New York City time, on the CMT Rate Interest
Determination Date reported, according to their written records, by three
leading primary United States government securities dealers (each, a "Reference
Dealer") in The City of New York (which may include the Agents or their
affiliates) selected by the Calculation Agent, after consultation with the
Company, (from five such Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for the most recently issued direct noncallable fixed rate obligations
of the United States ("Treasury Notes") with an original maturity of
approximately the Designated CMT Maturity Index and a remaining term to maturity
of not less than such Designated CMT Maturity Index minus one year. If the
Calculation Agent cannot obtain three such Treasury Note quotations, the CMT
Rate for such
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CMT Rate Interest Determination Date will be calculated by the Calculation Agent
and will be a yield to maturity based on the arithmetic mean of the secondary
market offer side prices as of approximately 3:30 P.M., New York City time, on
the CMT Rate Interest Determination Date of three Reference Dealers in The City
of New York (from five such Reference Dealers selected by the Calculation Agent,
after consultation with the Company, and eliminating the highest quotation (or,
in the event of equality, one of the highest) and the lowest quotation (or, in
the event of quality, one of the lowest)), for Treasury Notes with an original
maturity of the number of years that is the next highest to the Designated CMT
Maturity Index and a remaining term to maturity closest to the Designated CMT
Maturity Index and in an amount of at least $100 million. If three or four (and
not five) of such Reference Dealers are quoting as described above, then the CMT
Rate will be based on the arithmetic mean of the offer prices obtained and
neither the highest nor the lowest of such quotes will be eliminated; provided,
however, that if fewer than three Reference Dealers selected by the Calculation
Agent are quoting as described herein, the CMT Rate will be the CMT Rate in
effect on such CMT Rate Interest Determination Date. If two Treasury Notes with
an original maturity as described in the third preceding sentence have remaining
terms to maturity equally close to the Designated CMT Maturity Index, the quotes
for the Treasury Note with the shorter remaining term to maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service on the page designated in the applicable Pricing Supplement (or any
other page as may replace such page on that service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519)), for the
purpose of displaying Treasury Constant Maturities as reported in H.15(519). If
no such page is specified in the applicable Pricing Supplement, the Designated
CMT Telerate Page shall be 7052, for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20, or 30 years)
specified in the applicable Pricing Supplement with respect to which the CMT
Rate will be calculated. If no such maturity is specified in the applicable
Pricing Supplement, the Designated CMT Maturity Index shall be 2 years.
COMMERCIAL PAPER RATE: Unless otherwise indicated in the applicable
Pricing Supplement, "Commercial Paper Rate" means, with respect to any Interest
Determination Date relating to a Commercial Paper Rate Note (a "Commercial Paper
Rate Interest Determination Date"), the Money Market Yield (as hereinafter
defined) on such date of the rate for commercial paper having the Index Maturity
specified in the applicable Pricing Supplement as published in H.15(519) under
the heading "Commercial Paper." In the event that such rate is not published by
3:00 P.M., New York City time, on the Calculation Date pertaining to such
Commercial Paper Rate Interest Determination Date, then the Commercial Paper
Rate shall be the Money Market Yield on such Commercial Paper Rate Interest
Determination Date of the rate for commercial paper of the Index Maturity
specified in the applicable Pricing Supplement as published in Composite
Quotations under the heading "Commercial Paper." If the rate for a Commercial
Paper Rate Interest Determination Date is not published in either H.15(519) or
Composite Quotations by 3:00 P.M., New York City time, on such Calculation Date,
the Commercial Paper Rate for that Commercial Paper Rate Interest Determination
Date shall be calculated by the Calculation Agent and shall be the Money Market
Yield of the arithmetic mean of the offered rates, as of 11:00 A.M., New York
City time, on such Commercial Paper Rate Interest Determination Date, of three
leading dealers of commercial paper in The City of New York (which may include
the Agents or their affiliates) selected by the Calculation Agent, after
consultation with the Company, for commercial paper of the specified Index
Maturity placed for an industrial issuer whose bond rating is "AA," or the
equivalent, from a nationally recognized statistical rating agency; provided,
however, that if the dealers selected as aforesaid by the Calculation Agent are
not quoting as mentioned in this sentence, the Commercial Paper Rate will be the
Commercial Paper Rate in effect on such Commercial Paper Rate Interest
Determination Date.
"Money Market Yield" shall be the yield (expressed as a percentage)
calculated in accordance with the following formula:
D X 360
Money Market Yield = ------------------- X 100
360 - (D X M)
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where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal, and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
FEDERAL FUNDS RATE: Unless otherwise indicated in the applicable Pricing
Supplement, "Federal Funds Rate" means, with respect to any Interest
Determination Date relating to a Federal Funds Rate Note (a "Federal Funds Rate
Interest Determination Date"), the rate on that day for Federal Funds as
published in H.15(519) under the heading "Federal Funds (Effective)" or, if not
so published by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Federal Funds Rate Interest Determination Date, the Federal
Funds Rate will be the rate on such Federal Funds Rate Interest Determination
Date as published in Composite Quotations under the heading "Federal
Funds/Effective Rate." If such rate has not been published in either H.15(519)
or Composite Quotations by 3:00 P.M., New York City time, on such Calculation
Date, the Federal Funds Rate will be calculated by the applicable Calculation
Agent and will be the arithmetic mean of the rates for the last transaction in
overnight Federal Funds arranged by each of three leading brokers of Federal
Funds transactions in The City of New York (which may include the Agents or
their affiliates) selected by the Calculation Agent, after consultation with the
Company, prior to 9:00 A.M., New York City time, on such Federal Funds Rate
Interest Determination Date; provided, however, that if the brokers selected as
aforesaid by the Calculation Agent are not quoting as described above, the
Federal Funds Rate in effect for the applicable period will be the Federal Funds
Rate in effect on such Federal Funds Rate Interest Determination Date.
LIBOR: Unless otherwise indicated in the applicable Pricing Supplement,
LIBOR will be determined by the Calculation Agent in accordance with the
following provisions:
(i) With respect to any Interest Determination Date relating to a
LIBOR Note (a "LIBOR Interest Determination Date"), LIBOR will be either
(a) if "LIBOR Reuters" is specified in the applicable Pricing Supplement,
the arithmetic mean of the offered rates (unless the specified Designated
LIBOR Page (as defined below) by its terms provides only for a single rate,
in which case such single rate shall be used) for deposits in the LIBOR
Currency (as hereinafter defined) having the Index Maturity designated in
the applicable Pricing Supplement, as of 11:00 A.M., London time (unless
such rate is superseded by a corrected rate before 12:00 noon, London time,
in which case such corrected rate shall be the applicable rate), on that
LIBOR Interest Determination Date, if at least two such offered rates
appear (unless, as aforesaid, only a single rate is required) on such
Designated LIBOR Page or (b) if "LIBOR Telerate" is specified in the
applicable Pricing Supplement, the rate for deposits in the LIBOR Currency
having the Index Maturity designated in the applicable Pricing Supplement
commencing on the second London Banking Day immediately following that
LIBOR Interest Determination Date that appears on the Designated LIBOR Page
specified in the applicable Pricing Supplement as of 11:00 A.M., London
time (unless such rate is superseded by a corrected rate before 12:00 noon,
London time, in which case such corrected rate shall be the applicable
rate), on that LIBOR Interest Determination Date. If LIBOR cannot be
determined under clause (a) or (b) of this paragraph (i), as applicable,
LIBOR in respect of the related LIBOR Interest Determination Date will be
determined as if the parties had specified the rate described in paragraph
(ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which
LIBOR cannot be determined under paragraph (i) above, the Calculation Agent
will request that the London offices of each of four major banks in London
selected by the Calculation Agent, after consultation with the Company,
provide such Calculation Agent with its offered quotations for deposits in
the LIBOR Currency for the period of the Index Maturity specified in the
applicable Pricing Supplement to prime banks in the London interbank market
as of approximately 11:00 A.M., London time, on such LIBOR Interest
Determination Date, commencing on the second London Banking Day immediately
following such LIBOR Interest Determination Date and in a principal amount
that is representative for a single transaction in such market at such
time. If at least two such quotations are provided, LIBOR for such LIBOR
Interest Determination Date will be the arithmetic mean of such quotations.
If fewer than two such quotations are provided, LIBOR for such LIBOR
Interest Determination Date will be the arithmetic mean of the rates quoted
at approximately 11:00 A.M., in the applicable Principal Financial Center
(as hereinafter defined), on such LIBOR Interest Determination Date by
three major banks in such Principal Financial
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Center selected by the Calculation Agent, after consultation with the
Company, for loans commencing on the second London Banking Day immediately
following such LIBOR Interest Determination Date in the LIBOR Currency to
major European banks having the Index Maturity specified in the applicable
Pricing Supplement and in a principal amount that is representative for a
single transaction in such LIBOR Currency in such market at such time. If
at least two such quotations are provided, LIBOR for such LIBOR Interest
Determination Date will be the arithmetic mean of such quotations. If fewer
than two such quotations are provided as requested, LIBOR will be LIBOR in
effect on such LIBOR Interest Determination Date.
"Designated LIBOR Page" means either (a) If "LIBOR Reuters" is specified in
the applicable Pricing Supplement, the display on the Reuters Monitor Money
Rates Service for the purpose of displaying the London interbank rates of major
banks for the applicable LIBOR Currency, or (b) if "LIBOR Telerate" is specified
in the applicable Pricing Supplement, the display on the Dow Jones Telerate
Service (or such other service as may be nominated by the British Bankers'
Association as the information vendor for the purposes of displaying British
Bankers' Association interest settlement rates) for the purpose of displaying
the London interbank rates of major banks for the applicable LIBOR Currency. If
neither LIBOR Reuters nor LIBOR Telerate is specified in the applicable Pricing
Supplement, LIBOR for the applicable LIBOR Currency will be determined as if
LIBOR Telerate (and, if the U.S. dollar is the LIBOR Currency, Page 3750 (or
such other page as may replace Page 3750 on that service)) had been specified.
"LIBOR Currency" means the currency (including composite currencies)
specified in the applicable Pricing Supplement as the currency for which LIBOR
shall be calculated. If no such currency is specified in the applicable Pricing
Supplement, the LIBOR Currency shall be the U.S. dollar.
"Principal Financial Center" will generally be the capital city of the
country of the specified LIBOR Currency, except that with respect to the U.S.
dollar, the Deutsche mark and the ECU, the Principal Financial Center shall be
The City of New York, Frankfurt and Luxembourg, respectively.
LIBID: Unless otherwise indicated in the applicable Pricing Supplement,
LIBID will be determined by the Calculation Agent in accordance with the
following provisions:
(i) With respect to any Interest Determination Date relating to a
LIBID Note (a "LIBID Interest Determination Date"), LIBID will be
determined on the basis of the bid rates quoted to prime banks in the
London interbank market at approximately 11:00 A.M., London time, for
deposits in U.S. dollars of not less than U.S. $1 million, for the period
of the Index Maturity specified in the applicable Pricing Supplement,
commencing on the second London Banking Day immediately following such
LIBID Interest Determination Date, by the London offices of four major
banks in the London interbank market named on the Reuters Screen LIBO Page
(as defined below) and selected by the Calculation Agent, after
consultation with the Company (the "LIBID Reference Banks"), on the LIBID
Interest Determination Date. If at least two such quotations appear on the
Reuters Screen LIBO Page, LIBID for such LIBID Interest Determination Date
will be the arithmetic mean of such quotations as determined by the
Calculation Agent. If fewer than two such quotations appear on such page,
LIBID for such LIBID Interest Determination Date will be determined as if
the parties had specified the rate described in (ii) below. As used herein,
"Reuters Screen LIBO Page" means the display designated as Page "LIBO" on
the Reuters Monitor Money Rates Service (or such other page as may replace
the LIBO Page on that service) for the purpose of displaying London
interbank offered rates of major banks.
(ii) With respect to a LIBID Interest Determination Date on which
fewer than two such quotations appear on the Reuters Screen LIBO Page, the
Calculation Agent will request that each LIBID Reference Bank provide such
Calculation Agent with a quotation of the bid rate quoted to such bank by
the head offices of major banks in The City of New York for deposits in
United States dollars of not less than U.S. $1 million for the period of
the Index Maturity as specified in the applicable Pricing Supplement, as of
approximately 11:00 A.M., London time, on such LIBID Interest Determination
Date, such deposits commencing on the second London Banking Day immediately
following such LIBID Interest Determination Date, that is representative
for a single transaction in such market at such time. If at least two such
quotations are provided, LIBID for such LIBID Interest Determination Date
will be the arithmetic mean of such quotations. If fewer than two such
quotations are provided, LIBID for such
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<PAGE> 22
LIBID Interest Determination Date will be the arithmetic mean of the rates
quoted at approximately 11:00 A.M., New York City time, on such LIBID
Interest Determination Date by three major banks in The City of New York
selected by the Calculation Agent, after consultation with the Company, for
loans in U.S. dollars of not less than U.S. $1 million to leading European
banks, having the Index Maturity designated in the applicable Pricing
Supplement and in the principal amount equal to an amount of not less than
U.S., $1 million that is representative for a single transaction in such
market at such time; provided, however, that if the banks selected as
aforesaid by the Calculation Agent are not quoting as described above,
LIBID will be LIBID in effect on such LIBID Interest Determination Date.
If LIBID with respect to any LIBID Note is indexed to the bid rates for
deposits in a Specified Currency other than U.S. dollars, the applicable Pricing
Supplement will set forth the method for determining such rate.
PRIME RATE: Unless otherwise indicated in the applicable Pricing
Supplement, "Prime Rate" means, with respect to any Interest Determination Date
relating to a Prime Rate Note (a "Prime Rate Interest Determination Date"), the
arithmetic mean of the prime rates, as of the close of business on such Prime
Rate Interest Determination Date, quoted on the basis of the actual number of
days in the year divided by 360, by three major money center banks in The City
of New York selected by the Calculation Agent, after consultation with the
Company. If fewer than three quotations are provided, the Prime Rate shall be
calculated by the Calculation Agent and shall be determined as the arithmetic
mean on the basis of the prime rates, as of the close of business on such Prime
Rate Interest Determination Date, quoted in The City of New York by three
substitute banks or trust companies organized and doing business under the laws
of the United States, or any State thereof, each having total equity capital of
at least $500 million and being subject to supervision or examination by a
Federal or State authority, selected by the Calculation Agent after consultation
with the Company; provided, however, that if the banks or trust companies
selected as aforesaid by the Calculation Agent are not quoting as described
above, the Prime Rate will be the Prime Rate in effect on such Prime Rate
Interest Determination Date.
TREASURY RATE: Unless otherwise indicated in the applicable Pricing
Supplement, "Treasury Rate" means, with respect to any Interest Determination
Date relating to a Treasury Rate Note (a "Treasury Rate Interest Determination
Date"), the rate applicable to the most recent auction of direct obligations of
the United States ("Treasury bills") having the Index Maturity specified in the
applicable Pricing Supplement, as published in H.15(519) under the heading
"Treasury bills -- auction average (investment)" or, if not so published by 3:00
P.M., New York City time, on the Calculation Date pertaining to such Treasury
Rate Interest Determination Date, the auction average rate (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and applied
on a daily basis) as otherwise announced by the United States Department of the
Treasury. In the event that the results of the auction of Treasury bills having
the specified Index Maturity are not announced as provided by 3:00 P.M., New
York City time, on such Calculation Date, or if no such auction is held in a
particular week, then the Treasury Rate shall be a yield to maturity (expressed
as a bond equivalent on the basis of a year of 365 or 366 days, as applicable,
and applied on a daily basis) of the arithmetic mean of the secondary market bid
rates, as of approximately 3:30 P.M., New York City time, on such Treasury Rate
Interest Determination Date, of three leading primary United States government
securities dealers (which may include the Agents or their affiliates), selected
by the Calculation Agent after consultation with the Company, for the issue of
Treasury bills with a remaining maturity closest to the applicable Index
Maturity; provided, however, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as described above, the rate of interest in
effect for the applicable period will be the rate of interest in effect on such
Treasury Rate Interest Determination Date.
FOREIGN-CURRENCY NOTES
If any Note is not to be denominated in U.S. dollars, certain provisions
with respect thereto will be set forth in an applicable Pricing Supplement,
which will indicate the Specified Currency, along with any other terms relating
to the non-U.S. dollar denomination that are not specified herein. See "FOREIGN
CURRENCY RISKS" in this Prospectus Supplement.
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INDEXED NOTES
General. The Company may from time to time offer Notes ("Indexed Notes")
with respect to which the principal amount payable at maturity (the "Indexed
Principal Amount") and/or the interest payable on any Interest Payment Date will
be determined by reference to a measure (the "Index") which will be related to
(i) the rate of exchange between the Specified Currency for such Note and the
other currency or composite currency (the "Indexed Currency") specified in the
applicable Pricing Supplement on specified dates (such Indexed Notes, "Currency
Indexed Notes"); (ii) the difference in the level of a specified commodities
index (the "Commodities Index"), which may be based on one or more commodities,
on specified dates (such Indexed Notes, "Commodity Indexed Notes"); (iii) the
difference in the level of a specified securities index (the "Securities
Index"), which may be based on one or more U.S. or other securities, on
specified dates (such Indexed Notes, "Securities Indexed Notes"); or (iv) such
other objective price or economic measures as are described in the applicable
Pricing Supplement. The manner of determining the Indexed Principal Amount of an
Indexed Note (if other than as specified below), and historical and other
information concerning the Indexed Currency, Commodities Index, Securities Index
or other Index used in making such determination, will be set forth in the
applicable Pricing Supplement, together with information concerning tax
consequences to the holders of such Indexed Notes.
If the determination of the Indexed Principal Amount of an Indexed Note is
based on an Index calculated or announced by a third party and such third party
either suspends the calculation or announcement of such Index or changes the
basis upon which such Index is calculated (other than changes consistent with
policies in effect at the time such Indexed Note was issued and permitted
changes described in the applicable Pricing Supplement), then such Index shall
be calculated for purposes of such Indexed Note by the determination agent named
or provided for in the Pricing Supplement (the "Determination Agent") on the
same basis, and subject to the same conditions and controls, as applied to the
original third party. If for any reason such Index cannot be calculated on the
same basis, and subject to the same conditions and controls as applied to the
original third party, then the Indexed Principal Amount of such Indexed Note
shall be calculated in the manner set forth in the applicable Pricing
Supplement. Any determination of such Determination Agent shall, in the absence
of manifest error, be binding on all parties.
Unless otherwise specified in the applicable Pricing Supplement, any
interest on an Indexed Note will be payable by the Company based on the amount
designated in the applicable Pricing Supplement as the face amount of such
Indexed Note (the "Face Amount"). The applicable Pricing Supplement will
describe whether the principal amount of the related Indexed Note that would be
payable upon redemption or repayment prior to its stated maturity will be the
Face Amount of such Indexed Note, the Indexed Principal Amount of such Indexed
Note at the time of redemption or repayment, or another amount described in such
Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, (a) for
the purpose of determining whether holders of the requisite principal amount of
Debt Securities outstanding under the applicable Indenture have made a demand or
given a notice of waiver or taken any other action, the outstanding principal
amount of Indexed Notes will be deemed to be the Face Amount thereof, and (b) in
the event of an acceleration of the maturity of an Indexed Note, the principal
amount payable to the holder of such Indexed Note upon acceleration will be the
principal amount determined by reference to the formula by which the principal
amount of such Indexed Note would be determined on the date of the maturity
thereof as if the date of acceleration were the date of the maturity.
Currency Indexed Notes. The Company may from time to time offer Currency
Indexed Notes with respect to which the principal amount payable at maturity,
and/or the interest payable on each Interest Payment Date and at maturity, is
determined by the rate of exchange on specified dates between the currency or
currency unit in which such Notes are denominated (the "Denominated Currency")
and the other currency or currency unit designated as the Indexed Currency in
the applicable Pricing Supplement. Unless otherwise indicated in the applicable
Pricing Supplement, holders of Currency Indexed Notes (i) will be entitled to
receive a principal amount of such Currency Indexed Notes exceeding the Face
Amount if, at maturity, the rate at which the Denominated Currency can be
exchanged for the Indexed Currency is greater than the rate of such exchange
designated as the "base exchange rate" in the applicable Pricing Supplement (the
"Base
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<PAGE> 24
Exchange Rate"), and will be entitled to receive a principal amount of such
Currency Indexed Notes less than the Face Amount of such Currency Indexed Notes,
if, at maturity, the rate at which the Denominated Currency can be exchanged for
the Indexed Currency is less than such Base Exchange Rate and/or (ii) will be
entitled to receive an amount of interest on each Interest Payment Date or at
maturity at an interest rate greater than the base interest rate of such
Currency Indexed Note as designated in the applicable Pricing Supplement (the
"Base Interest Rate") if, on such Interest Payment Date or at maturity, as the
case may be, the rate at which the Denominated Currency can be exchanged into
the Indexed Currency is greater than the Base Interest Rate, and will be
entitled to receive an amount of interest on each Interest Payment Date or at
maturity at an interest rate less than the Base Interest Rate if, on such
Interest Payment Date or at maturity, as the case may be, the rate at which the
Denominated Currency can be exchanged into the Indexed Currency is less than the
Base Exchange Rate, in each case determined as described below. Information as
to the relative historical value of the applicable Denominated Currency against
the applicable Indexed Currency, any exchange controls applicable to such
Denominated Currency or Indexed Currency, and the tax consequences to owners of
beneficial interests in Currency Indexed Notes will be set forth in the
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, principal
of a Currency Indexed Note will be payable by the Company in the Denominated
Currency at maturity in an amount equal to the Face Amount of the Currency
Indexed Note, plus or minus an amount determined by the Determination Agent by
reference to the difference between the Base Exchange Rate and the rate at which
the Denominated Currency can be exchanged for the Indexed Currency (the "Spot
Rate") as determined on the second Exchange Rate Day (as hereinafter defined)
prior to the Maturity Date of such Currency Indexed Note (the "Determination
Date") in the manner specified in the applicable Pricing Supplement. The
principal amount of the Currency Indexed Notes determined by the Determination
Agent to be payable at maturity will be payable to the holders thereof in the
manner set forth herein and in the applicable Pricing Supplement. In the absence
of manifest error, the determination by the Determination Agent of the Spot Rate
and the principal amount of Currency Indexed Notes payable at maturity shall be
final and binding on the Company and the holders of such Currency Indexed Notes.
Any formulas to be used by the Determination Agent to determine the
principal amount of a Currency Indexed Note payable at maturity will be
specified in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the term
"Exchange Rate Day" shall mean any day which is a Business Day in The City of
New York and (a) if the Denominated Currency or Indexed Currency is the Canadian
Dollar, in Toronto, Canada, (b) if the Denominated Currency or Indexed Currency
is the Japanese Yen, in Tokyo, Japan, (c) if the Denominated Currency or Indexed
Currency is the Pound Sterling, in London, England, (d) if the Denominated
Currency or the Indexed Currency is the Australian Dollar, in Melbourne or
Sydney, Australia, (e) if the Denominated Currency or the Indexed Currency is
the ECU, in each of the financial centers of each country that issues a
component currency of the ECU and/or (f) if the Denominated Currency or Indexed
Currency is any other currency or composite currency (other than the U.S.
dollar), in the capital and the principal financial center of the country or
countries of such Denominated Currency or Indexed Currency.
Unless otherwise specified in the applicable Pricing Supplement, interest
will be payable by the Company in the Denominated Currency based on the Face
Amount of the Currency Indexed Notes and such interest will be payable at the
rate and times and in the manner set forth herein and in the applicable Pricing
Supplement. In the event that the applicable Pricing Supplement specifies that
interest on the Currency Indexed Notes will be determined by reference to an
Indexed Currency and unless otherwise specified in such Pricing Supplement,
interest will be payable by the Company in the Denominated Currency on each
Interest Payment Date and at maturity at a rate per annum equal to the Base
Interest Rate multiplied by an Interest Index Factor. The "Interest Index
Factor" shall be an amount determined by the Determination Agent by reference to
the following formula:
Interest Spot Rate
------------------
Base Exchange Rate
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<PAGE> 25
where, "Interest Spot Rate" is (i) if at an Interest Payment Date, the rate at
which the Denominated Currency can be exchanged for the Indexed Currency as
determined as of the Interest Determination Date, which shall be the second
Exchange Rate Day prior to such Interest Payment Date, by the Determination
Agent in the manner specified in the applicable Pricing Supplement, for an
amount of Indexed Currency equal to (a) the product of (x) the aggregate Face
Amount of such Currency Indexed Notes and (y) the Base Interest Rate specified
in the applicable Pricing Supplement, multiplied by (b) the Base Exchange Rate
and (ii) if at maturity, the Spot Rate. The amount of interest determined by the
Determination Agent to be payable on any Interest Payment Date and at maturity
in respect of the Currency Indexed Notes will be payable to the holders thereof
in the manner set forth herein and in the applicable Pricing Supplement. In the
absence of manifest error, the determination by the Determination Agent of the
Interest Index Factor, the Interest Spot Rate and the amount of interest payable
on each Interest Payment Date and on the Maturity Date, shall be final and
binding on the Company and the holders of such Currency Indexed Notes.
Unless otherwise specified in the applicable Pricing Supplement, on the
basis of the aforesaid determinations by the Determination Agent, (i) if the
Base Exchange Rate equals the Interest Spot Rate on any Interest Determination
Date or the Spot Rate on the Maturity Date for any Currency Indexed Note, then
the amount of interest payable in respect of such Currency Indexed Note on the
applicable Interest Payment Date or at maturity, as the case may be, would
represent an interest rate equal to the Base Interest Rate of such Currency
Indexed Note; (ii) if the Interest Spot Rate on any Interest Determination Date
or the Spot Rate on the Maturity Date exceeds the Base Exchange Rate (i.e., the
Denominated Currency has appreciated against the Indexed Currency during the
term of the Currency Indexed Note), then the amount of interest so payable would
represent an interest rate greater than the Base Interest Rate of such Currency
Indexed Note; (iii) if the Interest Spot Rate on any Interest Determination Date
or the Spot Rate on the Maturity Date is less than the Base Exchange Rate (i.e.,
the Denominated Currency has depreciated against the Indexed Currency during the
term of the Currency Indexed Note) but is greater than zero, then the amount of
interest so payable would represent an interest rate less than the Base Interest
Rate of such Currency Indexed Note; and (iv) if the Interest Spot Rate on any
Interest Determination Date or the Spot Rate on the Maturity Date is less than
or equal to zero, then the Interest Spot Rate or Spot Rate, as the case may be,
will be deemed to be zero and no amount of interest would be payable in respect
of the Currency Indexed Note on the applicable Interest Payment Date or at
maturity, as the case may be. If the methods of determining interest amounts set
forth above are applicable to a Currency Indexed Note, then, unless otherwise
specified in the applicable Pricing Supplement, there would be no maximum amount
of interest payable in respect of such Currency Indexed Note on any Interest
Payment Date or at maturity, but the minimum amount of interest so payable would
be zero.
Securities and Commodity Indexed Notes. The Company may from time to time
offer Notes with respect to which the principal and/or interest will be
determined by reference to the price of one or more specified securities or
commodities, to one or more securities or commodities exchange indices or other
indices or by other similar methods or formulas. The Pricing Supplement relating
to any such Note will set forth the method by which the amount of interest
payable and the amount payable at maturity in respect of such Note will be
determined, the tax consequences to owners of beneficial interests in such
Notes, a description of certain risks associated with investments in such Notes
and other information relating to such Notes.
PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS
AS TO THE RISKS ENTAILED BY ANY INVESTMENT IN INDEXED NOTES. SUCH INDEXED NOTES
ARE NOT AN APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED WITH
RESPECT TO FOREIGN CURRENCY TRANSACTIONS, COMMODITY PRICES AND COMMODITY AND
FINANCIAL OR NON-FINANCIAL INDICES.
DUAL CURRENCY NOTES
The Company may from time to time offer Notes ("Dual Currency Notes") with
respect to which the Company will have the option of making each scheduled
payment of principal and interest due on such Notes in either the currency in
which the Face Amount thereof is specified in the applicable Pricing Supplement
(the "Face Amount Currency") or another currency specified therein (the
"Optional Payment Currency"). If the Company elects to make a payment in the
Optional Payment Currency, the amount payable in such Optional Payment Currency
shall be determined using the exchange rate specified in such Pricing Supplement
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<PAGE> 26
(the "Designated Exchange Rate"). If the Company chooses to make any payment in
the Optional Payment Currency instead of the Face Amount Currency, payments of
interest and principal may be worth less, at the then current exchange rate,
than if the Company had made such payment in the Face Amount Currency.
Accordingly, a holder of Dual Currency Notes may receive a principal payment at
maturity which, at the then current exchange rate, is less than such holder's
investment denominated in the Face Amount Currency. See "FOREIGN CURRENCY RISKS"
in this Prospectus Supplement. Information as to the relative historical value
of the applicable Face Amount Currency against the applicable Optional Payment
Currency, any exchange controls applicable to such Face Amount Currency or
Optional Payment Currency, and the tax consequences to owners of beneficial
interests in Dual Currency Notes will be set forth in the applicable Pricing
Supplement.
Scheduled Payments of Principal and Interest. Interest on the Dual
Currency Notes will be payable based on the Face Amount of the Dual Currency
Notes at the rate stated in the applicable Pricing Supplement on each Interest
Payment Date until the principal thereof is paid or made available for payment.
The principal amount of each Dual Currency Note will be payable at maturity.
The Pricing Supplement for each issuance of Dual Currency Notes will
specify, among other things, the Face Amount of the Dual Currency Notes of such
issuance, the Face Amount Currency and Optional Payment Currency of such
issuance and the Designated Exchange Rate for such issuance, which will be a
fixed exchange rate used for converting amounts denominated in the Face Amount
Currency into amounts denominated in the Optional Payment Currency. The Pricing
Supplement will also specify the Option Election Dates (as hereinafter defined)
and Interest Payment Dates for the related issue of Dual Currency Notes. Each
"Option Election Date" will be approximately 10 days before an Interest Payment
Date or the Maturity Date, as the case may be, and will be the date on which the
Company must elect to make payments due on the related Interest Payment Date or
the Maturity Date in the Face Amount Currency or the Optional Payment Currency.
If such election is made, notice of such election shall be provided within four
Business Days of the Option Election Date and shall state (i) the Interest
Payment Date or the Maturity Date and (ii) the Designated Exchange Rate. Any
such notice by the Company, once given, may not be withdrawn. If the Company
elects on any Option Election Date to pay the amounts due on the succeeding
Interest Payment Date in the Optional Payment Currency, then it shall pay all
amounts due with respect to the affected issue of Dual Currency Notes in the
Optional Payment Currency on such Interest Payment Date or Maturity Date. If the
Company does not elect on an Option Election Date to pay the amount due on the
related Interest Payment Date or the Maturity Date in the Optional Payment
Currency, then such payment shall be made in the Face Amount Currency and no
notice of the manner of such payment will be given.
Payment Due Upon Redemption or Acceleration. If any Dual Currency Note is
redeemed prior to its maturity, or if the payment of principal of any Dual
Currency Note is accelerated in accordance with the provisions described under
"THE SENIOR SECURITIES -- Events of Default and Waiver Thereof" and "THE
SUBORDINATED SECURITIES -- Events of Default and Waiver Thereof" in the
accompanying Prospectus, then the Company shall pay to the holder of such Dual
Currency Note on the redemption date or the date of acceleration an amount equal
to (i) the Face Amount thereof in the Face Amount Currency plus accrued interest
in such currency to but excluding the redemption date or date of acceleration,
as the case may be, minus (ii) the product of the Total Option Value (as
hereinafter defined) multiplied by a fraction, the numerator of which is the
Face Amount of such Dual Currency Note and the denominator of which is the
aggregate Face Amount of all Dual Currency Notes of the same issue as such Dual
Currency Note.
The "Total Option Value" of any Dual Currency Note is an amount (calculated
as of the date (the "Option Value Calculation Date") on which the Company
notifies the Trustee for such Note that such Dual Currency Note will be
redeemed, or the date of acceleration, as the case may be, by the option value
calculation agent who will be designated in the applicable Pricing Supplement
(the "Option Value Calculation Agent")) equal to the sum of the Option Values
(calculated as of such date by the Option Value Calculation Agent) for all
Interest Payment Dates occurring after the Option Value Calculation Date up to
and including the Maturity Date. The "Option Value" for an Interest Payment Date
is the amount calculated by the Option Value Calculation Agent to be the
arithmetic mean of the prices quoted on the Option Value Calculation Date by
three reference banks (which banks shall be selected by the Option Value
Calculation
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<PAGE> 27
Agent and shall be reasonably acceptable to the Company) for the right on the
Option Election Date immediately preceding such Interest Payment Date to
purchase for value on such Interest Payment Date from such reference banks (A)
the aggregate amount of the Face Amount Currency due on such Interest Payment
Date with respect to all of the Dual Currency Notes of the issue of such Dual
Currency Note in exchange for (B) the amount of the Optional Payment Currency
that would be received if the amount in clause (A) were converted into the
Optional Payment Currency at the Designated Exchange Rate.
PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS
AS TO THE RISKS ENTAILED BY AN INVESTMENT IN DUAL CURRENCY NOTES. DUAL CURRENCY
NOTES ARE NOT AN APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED
WITH RESPECT TO FOREIGN CURRENCY TRANSACTIONS.
GOVERNING LAW
The Indentures and the Notes will be governed by, and construed in
accordance with, the laws of the State of New York, United States of America.
CERTAIN INVESTMENT CONSIDERATIONS
An investment in Notes indexed, as to principal, premium and/or interest,
to one or more values of currencies (including exchange rates between
currencies), commodities, securities or interest rate indices entails
significant risks that are not associated with similar investments in a
conventional fixed-rate debt security. If the interest rate of such a Note is so
indexed, it may result in an interest rate that is less than that payable on a
conventional fixed-rate debt security issued at the same time, including the
possibility that no interest will be paid, and, if the principal of and/or
premium, if any, on such a Note is so indexed, the amount of principal and/or
premium payable in respect thereof may be less than the original purchase price
of such Note if allowed pursuant to the terms thereof, including the possibility
that no such amount will be paid. There can be no assurance that there will be a
secondary market for Notes so indexed or liquidity in the secondary market if
one develops. The secondary market, if any, for such Notes will be affected by a
number of factors, independent of the creditworthiness of the Company and the
value of the applicable currency, commodity, security or interest rate index,
including the volatility of the applicable currency, commodity, security or
interest rate index, the time remaining to the maturity of such Notes, the
amount outstanding of such Notes and market interest rates. The value of the
applicable currency, commodity, security or interest rate index depends on a
number of interrelated factors, including economic, financial and political
events, over which the Company has no control. Additionally, if the formula used
to determine the amount of principal, premium, if any, and/or interest payable
with respect to such Notes contains a multiple or leverage factor, the effect of
any change in the applicable currency, commodity, security or interest rate
index will be increased. The historical experience of the relevant currencies,
commodities, securities or interest rate indices should not be taken as an
indication of future performance of such currencies, commodities, securities or
interest rate indices during the term of any Note. The credit ratings assigned
to the Company's debt securities are a reflection of the Company's credit status
and, in no way are a reflection of the potential impact of the factors discussed
above, or any other factors, on the market value of the Notes. Accordingly,
prospective investors should consult their own financial and legal advisors as
to the risks entailed by an investment in such Notes and the suitability of such
Notes in light of their particular circumstances.
FOREIGN CURRENCY RISKS
EXCHANGE RATES AND EXCHANGE CONTROLS
An investment in Notes that are denominated in, or the payment of which is
related to the value of, a Specified Currency other than the currency of the
country in which a purchaser is resident or the currency (including any
composite currency) in which a purchaser conducts its business (the "home
currency") entails significant risks that are not associated with a similar
investment in a security denominated in the home currency. Such risks include,
without limitation, the possibility of significant changes in rates of exchange
between the home currency and the Specified Currency and the possibility of the
imposition or modification of foreign exchange controls with respect to the
Specified Currency. Such risks generally depend on factors over which the
Company has no control, such as economic and political events and the supply of
and demand for
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<PAGE> 28
the relevant currencies. In recent years, rates of exchange for certain
currencies have been highly volatile, and such volatility may be expected to
continue in the future. Fluctuations in any particular exchange rate that have
occurred in the past are not necessarily indicative, however, of fluctuations in
the rate that may occur during the term of any Note. Depreciation of the
Specified Currency in which a Note is payable against the relevant home currency
would result in a decrease in the effective yield of such Note below its stated
rate of interest, and in certain circumstances, could result in a loss to the
investor on a home currency basis. In addition, depending on the specific terms
of a Note, changes in exchange rates relating to any of the currencies involved
may result in a decrease in its effective yield and, in certain circumstances,
could result in a loss to the investor of all or a substantial portion of the
principal of a Note.
Governments have from time to time imposed, and may in the future impose,
exchange controls that could affect exchange rates as well as the availability
of a Specified Currency on an Interest Payment Date or the Maturity Date with
respect to a Note. There can be no assurances that exchange controls will not
restrict or prohibit payments of principal or interest in any such currency or
composite currency. Even if there are not actual exchange controls, it is
possible that on an Interest Payment Date or Maturity Date with respect to any
particular Note, a Specified Currency for such Note would not be available to
the Company to make payments of interest and principal then due. In that event,
the Company will make required payments in U.S. dollars on the basis of the
Market Exchange Rate (as hereinafter defined) on the date of such payment, or if
such rate of exchange is not then available, on the basis of the Market Exchange
Rate as of the most recent date for which the Market Exchange Rate is available.
See "Payment Currency" below.
THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT DESCRIBE
ALL THE RISKS OF AN INVESTMENT IN CURRENCY INDEXED NOTES OR IN NOTES DENOMINATED
IN, OR THE PAYMENT OF WHICH IS RELATED TO THE VALUE OF, A CURRENCY (INCLUDING
ANY COMPOSITE CURRENCY) OTHER THAN A PROSPECTIVE PURCHASER'S HOME CURRENCY, AND
THE COMPANY AND THE AGENTS DISCLAIM ANY RESPONSIBILITY TO ADVISE PROSPECTIVE
PURCHASERS OF SUCH RISKS AS THEY EXIST AT THE DATE OF THIS PROSPECTUS SUPPLEMENT
OR AS SUCH RISKS MAY CHANGE FROM TIME TO TIME. PROSPECTIVE PURCHASERS SHOULD
CONSULT THEIR OWN FINANCIAL, LEGAL AND TAX ADVISORS AS TO THE RISKS ENTAILED BY
AN INVESTMENT IN CURRENCY INDEXED NOTES OR IN NOTES DENOMINATED IN, OR THE
PAYMENT OF WHICH IS RELATED TO THE VALUE OF, CURRENCIES (INCLUDING COMPOSITE
CURRENCIES) OTHER THAN THE PARTICULAR HOME CURRENCY. SUCH NOTES ARE NOT AN
APPROPRIATE INVESTMENT FOR PERSONS WHO ARE UNSOPHISTICATED WITH RESPECT TO
FOREIGN CURRENCY TRANSACTIONS.
Pricing Supplements relating to Notes denominated in a Specified Currency
other than the U.S. dollar may contain information concerning historical
exchange rates for such Specified Currency against the U.S. dollar, a
description of the currency or composite currency and any exchange controls
affecting such currency or composite currency. The information contained therein
shall constitute a part of this Prospectus Supplement, will be furnished as a
matter of information only and should not be regarded as indicative of the range
of or trends in fluctuations in currency exchange rates that may occur in the
future.
PAYMENT CURRENCY
Purchasers are required to pay for the Notes in the currency specified in
the applicable Pricing Supplement. Currently, there are limited facilities in
various countries for conversion of home currencies into foreign currencies, and
vice versa. In addition, many banks do not offer foreign currency denominated
checking or savings account facilities.
Payments of principal, premium (if any) and interest (if any) on each Note
will be made in its Specified Currency (see "DESCRIPTION OF NOTES -- General" in
this Prospectus Supplement) unless otherwise specified in the applicable Pricing
Supplement. Except as set forth below, if payment on a Note is required to be
made in a currency other than U.S. dollars and such currency is unavailable due
to the imposition of exchange controls or other circumstances beyond the
Company's control, or is no longer used by the
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<PAGE> 29
government of the country issuing such currency or for the settlement of
transactions by public institutions in that country or within the international
banking community, then all payments due on that due date with respect to such
Note shall be made in U.S. dollars until such currency is again available or so
used. The amount so payable on any date in such foreign currency shall be
converted into U.S. dollars at a rate determined by the Exchange Rate Agent on
the basis of the most recently available Market Exchange Rate or as otherwise
indicated in an applicable Pricing Supplement.
The initial Exchange Rate Agent will be The Chase Manhattan Bank, N.A. Any
payment required to be made on Notes denominated in a Specified Currency other
than U.S. dollars which is instead made in U.S. dollars under the circumstances
described above will not constitute a default of any obligation under the
Indenture under which such Notes shall have been issued.
Payments in Yen to a non-resident of Japan may be made only by transfer to
a non-resident account maintained by the payee with, or by a check drawn upon,
an authorized foreign exchange bank.
Unless otherwise specified in the applicable Pricing Supplement, a holder
of a Note denominated in a Specified Currency other than U.S. dollars may
subsequent to the issuance thereof request that future payments be converted, or
not be converted, as the case may be, to U.S. dollars by transmitting a written
request for such payments to the Paying Agent on or prior to the Regular Record
Date or at least 16 days prior to maturity or earlier redemption or repayment,
as the case may be. Such request shall include appropriate payment instructions
and shall be in writing (mail or hand delivered) or by cable, telex or facsimile
transmission. A holder may elect to receive all future payments of principal,
premium, if any, and interest, if any, in either the Specified Currency or in
U.S. dollars, as specified in the written request, and need not file a separate
election for each payment. Such election will remain in effect until revoked by
a subsequent election made in the manner and at the times prescribed in this
paragraph. Owners of beneficial interests in Global Book-Entry Notes should
contact their broker or nominee to determine whether and how an election to
receive payments in the Specified Currency may be made.
In order for a holder of a Note who will, either by the terms of the Note
or pursuant to an election of such holder, receive payments of principal,
premium (if any) and interest (if any) in a Specified Currency other than U.S.
dollars by wire transfer, such holder must designate an appropriate account with
a bank located in the country of the Specified Currency. Such designation shall
be made by filing the appropriate information with the Paying Agent on or prior
to the Regular Record Date or at least 16 days prior to maturity or earlier
redemption or repayment, as the case may be. The Paying Agent will, subject to
applicable laws and regulations and until it receives notice to the contrary,
make such payment and all succeeding payments to such holder of a Note by wire
transfer to the designated account. If a payment cannot be made by wire transfer
because the required information has not been received by the Paying Agent on or
before the requisite date, payment will be made by check or draft mailed to the
holder of a Note at its registered address.
The "Market Exchange Rate" with respect to any currency other than U.S.
dollars means, for any day, the noon dollar buying rate in The City of New York
on such day for cable transfers of such currency as published by the Federal
Reserve Bank of New York, or, if such rate is not published for such day, the
equivalent rate as determined by the Exchange Rate Agent.
All determinations made by the Exchange Rate Agent shall be at its sole
discretion and, in the absence of manifest error, shall be conclusive for all
purposes and binding on holders of the Notes and the Exchange Rate Agent shall
have no liability therefor.
VALUE OF THE ECU
Subject to the provisions in "Payment Currency" above, where any Notes are
to be denominated in ECUs, "ECU" shall mean at any time an amount equal in value
to one European Currency Unit and "European Currency Unit" denotes the unit of
account that is used from time to time as the unit of account of the European
Communities in the European Union. At the date of this Prospectus Supplement,
the ECU is valued, pursuant to Council Regulation (EEC) No. 3180/78 of December
18, 1978, as amended by Council
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<PAGE> 30
Regulation (EEC) No. 1971/89 of June 19, 1989 (as amended from time to time), on
the basis of specified amounts of the currencies as follows:
<TABLE>
<S> <C> <C> <C>
0.6242 German mark 0.130 Luxembourg franc
0.08784 Pound sterling 0.1976 Danish krone
1.332 French franc 0.008552 Irish pound
151.8 Italian lira 1.440 Greek drachma
0.2198 Dutch guilder 6.885 Spanish peseta
3.301 Belgian franc 1.393 Portuguese escudo
</TABLE>
The components of the ECU, or the specified amount of any component, may be
changed from time to time by the European Community.
If payment in respect of a Note is required to be made in ECUs and ECUs are
unavailable or the ECU is not then used in the European Union, then the Exchange
Rate Agent shall, without liability on its part, choose a component currency
(the "Payment Currency") of the ECU in which all payments in respect of such
Note shall be made until the ECU is again so used. The amount of each payment in
such Payment Currency shall be computed on the basis of the equivalent of the
ECU in that currency, determined as described below, as of the fourth Luxembourg
business day prior to the date on which such payment is due. Any payment in
respect of such Note made under such circumstances in the Payment Currency will
not constitute a default of any obligation under the Indenture under which such
Note shall have been issued.
Notwithstanding the foregoing, on the first Luxembourg business day on
which the ECU is no longer used in the European Union, the Exchange Rate Agent
shall, without liability on its part, choose a Payment Currency in which all
payments in respect of Notes denominated in ECU having a due date prior thereto
but not yet paid are to be made. The amount of each payment in such Payment
Currency shall be computed on the basis of the equivalent of the ECU in that
currency, determined as described below, as of such first Luxembourg business
day. Any payment in respect of such Notes made in the Payment Currency under
such circumstances will not constitute a default of any obligation under the
Indenture under which such Notes shall have been issued.
The equivalent of the ECU in the relevant Payment Currency as of any date
(the "Day of Valuation") shall be determined by the Exchange Rate Agent on the
following basis. The component currencies of the ECU for this purpose (the
"Components") shall be the currency amounts that were components of the ECU when
the ECU was most recently used in the European Union or for the settlement of
transactions by public institutions of or within the European Community. The
equivalent of the ECU in the Payment Currency shall be calculated by, first,
aggregating the U.S. dollar equivalents of the Components, and then, using the
rate used for determining the U.S. dollar equivalent of the Components in the
Payment Currency as set forth below, calculating the equivalent in the Payment
Currency of such aggregate amount in U.S. dollars.
The U.S. dollar equivalent of each of the Components shall be determined by
the Exchange Rate Agent on the basis of the middle spot delivery quotations
prevailing at 2:30 p.m. Luxembourg time on the Day of Valuation, as obtained by
the Exchange Rate Agent from one or more major banks in the country of issue of
the Component in question.
If the official unit of any component currency of the ECU is altered by way
of combination or subdivision, the number of units of that currency as a
Component shall be divided or multiplied in the same proportion. If two or more
component currencies are consolidated into a single currency, the amounts of
those currencies as Components shall be replaced by an amount in such single
currency equal to the sum of the amounts of the consolidated component
currencies expressed in such single currency. If any component currency is
divided into two or more currencies, the amount of that currency as a Component
shall be replaced by amounts of such two or more currencies, each of which shall
be equal to the amount of the former component currency divided by the number of
currencies into which that currency was divided.
If no direct quotations are available for a Component on a Day of Valuation
from any of the banks selected for this purpose, because foreign exchange
markets are closed in the country of issue of that Component, or for any other
reason, then, in computing the U.S. dollar equivalent of such Component the
Exchange Rate Agent shall (except as provided below) use the most recent direct
quotations for such
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<PAGE> 31
Component obtained by it; provided that such most recent quotations may be used
only if they were prevailing in the country of issue not more than two
Luxembourg business days before such Day of Valuation. Beyond such period of two
Luxembourg business days, the Exchange Rate Agent shall determine the U.S.
dollar equivalent of such Component on the basis of cross rates derived from the
middle spot delivery quotations for such Component and for the U.S. dollar
prevailing at 2:30 p.m. Luxembourg time on such Day of Valuation, as obtained by
the Exchange Rate Agent from one or more major banks in a country other than the
country of issue of such Component. Notwithstanding the foregoing, within such
period of two Luxembourg business days, the Exchange Rate Agent shall determine
the U.S. dollar equivalent of such Component on the basis of such cross rates if
the Exchange Rate Agent and the Company judge that the equivalent so calculated
is more representative than the U.S. dollar equivalent calculated on the basis
of such most recent direct quotations. If there is more than one market for
dealing in any component currency by reason of foreign exchange regulations or
for any other reason, the market to be referred to in respect of such currency
shall be that upon which a non-resident issuer of securities denominated in such
currency would purchase such currency in order to make payments in respect of
such securities.
FOREIGN CURRENCY JUDGMENTS
The Notes will be governed by and construed in accordance with the law of
the State of New York, United States of America. Courts in the United States
customarily have not rendered judgments for money damages denominated in any
currency other than the U.S. dollar. The Judiciary Law of the State of New York
provides, however, that an action based upon an obligation denominated in a
currency other than U.S. dollars will be rendered in the foreign currency of the
underlying obligation and converted into U.S. dollars at the rate of exchange
prevailing on the date of the entry of the judgment or decree.
UNITED STATES TAXATION
The following is a summary of the principal United States federal income
and certain estate tax consequences of the purchase, ownership and disposition
of a Note based upon laws, regulations, rulings and decisions now in effect, all
of which are subject to change. The summary is based upon the advice of Charles
E. Chromow, a Vice President of the Bank. This summary deals only with Notes
beneficially owned by non-United States Holders (as hereinafter defined) in
fully registered certificated or book-entry form without coupons, not issued for
more than the amount payable at maturity, and held as capital assets by the
initial purchasers thereof. This summary does not discuss all of the tax
consequences that may be relevant to a particular holder of a beneficial
interest in any Note in light of the holder's circumstances or to holders of
beneficial interests subject to special rules, such as financial institutions,
insurance companies, dealers in securities or currencies, persons holding the
Notes as a hedge against currency risks or as a position in a "straddle" for tax
purposes, or persons whose functional currency is not the U.S. dollar.
Prospective purchasers of Notes should consult their own tax advisors in
determining the United States, as well as any state, local or foreign, tax
consequences to them of the purchase, ownership and disposition of Notes.
As used herein, the term "United States Holder" means a holder of a
beneficial interest in a Note that is a United States person for United States
federal income tax purposes or any other holder of a beneficial interest in a
Note to the extent that income attributable to a Note is effectively connected
with such person's conduct of a United States trade or business. The term
"non-United States Holder" means a holder of a beneficial interest in a Note
that is not a United States Holder.
Under United States federal tax law now in effect, and subject to the
discussion of backup withholding in the following paragraphs:
(a) Principal and Interest. Payments of principal, premium (if any)
and interest (which for purposes of this discussion includes original issue
discount, if any) by the Company or any Paying Agent to any non-United
States Holder of a Note will not be subject to United States federal
withholding tax, provided, in the case of amounts treated as interest, that
(i) such non-United States Holder does not actually or constructively own
10% or more of the total combined voting power of all classes of stock of
the Company entitled to vote, (ii) such non-United States Holder is not,
for United States Federal income tax purposes, a controlled foreign
corporation related to the Company through stock ownership,
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<PAGE> 32
(iii) such non-United States Holder is not a bank that acquires a Note on
an extension of credit made pursuant to a loan agreement entered into in
the ordinary course of its trade or business, and (iv) either (A) the
beneficial owner of the Note certifies, under penalties of perjury, to the
Company or its Paying Agent, as the case may be, that he is a non-United
States Holder that meets the preceding qualifications and provides his name
and address (which certification shall be made on Internal Revenue Service
Form W-8 or a substantially similar substitute form), or (B) a securities
clearing organization, bank or other financial institution that holds
customers' securities in the ordinary course of its trade or business (a
"Financial Institution") and which holds the Note certifies, under
penalties of perjury, to the Company or its Paying Agent, as the case may
be, that such certificate has been received from the beneficial owner by it
or by a Financial Institution between it and the beneficial owner and
furnishes the payor with a copy thereof. A certificate described in this
paragraph is effective only with respect to payments of interest made to
the certifying non-United States Holder after the issuance of the
certificate in the calendar year of its issuance and the two immediately
succeeding calendar years;
(b) Sale, Exchange or Retirement of the Notes. A non-United States
Holder of a Note will not be subject to United States federal income tax on
any gain or income realized upon the sale, exchange or retirement or other
disposition of a Note unless (i) such gain or income is effectively
connected with a trade or business in the United States of the non-United
States Holder, or (ii) in the case of a non-United States Holder who is an
individual, the non-United States Holder is present in the United States
for 183 days or more in the taxable year of such sale, exchange, retirement
or other disposition and certain other conditions are met or the gain is
attributable to an office or other fixed place of business maintained by
such individual in the United States; and
(c) Estate Tax. A Note beneficially owned by an individual who is a
non-United States Holder at the time of death will not be subject to United
States federal estate tax as a result of such individual's death if the
beneficial owner does not own, actually or constructively, 10% or more of
the total combined voting power of all classes of stock of the Company
entitled to vote and if at the time of such individual's death, payments
with respect to the Note would not have been effectively connected with a
United States trade or business of such individual.
(d) U.S. Trade or Business. If a non-United States Holder of a Note
is engaged in a trade or business in the United States and interest on the
Note is effectively connected with the conduct of such trade or business,
the non-United States Holder, although exempt from the withholding tax
discussed in subparagraph (a) above, will generally be subject to regular
United States income tax on such interest in the same manner as if it were
a United States Holder. In addition, if such a non-United States Holder is
a foreign corporation, it may be subject to a branch profits tax equal to
30% of its effectively connected earnings and profits for the taxable year,
subject to adjustments. For purposes of the branch profits tax, interest
(including original issue discount) on a Note will be included in earnings
and profits if such interest (or original issue discount) is effectively
connected with the conduct by the non-United States Holder of a trade or
business in the United States.
Backup Withholding and Information Reporting. Under current Treasury
Regulations, backup withholding will not apply to payments of principal, premium
(if any) and interest (which for purposes of this discussion includes Original
Issue Discount, if any) made to a non-United States Holder by the Company or any
Paying Agent thereof on a Note with respect to which the holder has provided the
required certification under penalties of perjury of its non-United States
Holder status or has otherwise established an exemption, provided in each case
that the Company or its Paying Agent, as the case may be, does not have actual
knowledge that the payee is a United States Holder. Interest payments to
non-United States Holders on a Note will be subject to information reporting on
Form 1042S. Payments of principal and premium (if any) to a non-United States
Holder on a Note will not be subject to information reporting if the holder has
provided certification of its non-United States Holder status, as described
above.
Under current Treasury Regulations, payments on the sale, exchange,
retirement or other disposition of a Note to or through a foreign office of a
broker will not be subject to backup withholding. However, if such broker is a
United States person, a controlled foreign corporation for United States tax
purposes, or a foreign person 50% or more of whose gross income is derived from
its conduct of a United States trade or business for
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<PAGE> 33
a specified three-year period, information reporting will be required unless the
broker has in its records documentary evidence that the beneficial owner of such
Note is not a United States person and certain other conditions are met or the
beneficial owner otherwise establishes an exemption. Payments to or through the
United States office of a broker will be subject to backup withholding and
information reporting unless the non-United States Holder certifies under
penalties of perjury to its non-United States Holder status or otherwise
establishes an exemption.
Any amounts withheld from a payment to an owner of a beneficial interest
under the backup withholding rules will be allowed as a credit against such
person's United States federal income tax, and may entitle such holder to a
refund, provided that the required information is furnished to the United States
Internal Revenue Service.
The circumstances under which information reporting and backup withholding
will be required are currently under review by the United States Treasury
Department, and thus the rules discussed above may change prospectively with
respect to payments on the Notes or proceeds from the sale of the Notes.
Prospective purchasers should therefore consult their tax advisors regarding the
application of information reporting and backup withholding to their particular
situations, the availability of an exemption therefrom, and the procedure for
obtaining such an exemption, if available.
PLAN OF DISTRIBUTION OF NOTES
The Notes are being offered on a continuous basis for sale by the Company
through the Agents, each of which will purchase the Notes as principal from the
Company for resale to investors and other purchasers at varying prices relating
to prevailing market prices at the time of resale as determined by the
applicable Agent, or, if so specified in an applicable Pricing Supplement, for
resale at a fixed public offering price. Unless otherwise specified in an
applicable Pricing Supplement, any Note sold to an Agent as principal will be
purchased by such Agent at a price equal to 100% of the principal amount thereof
less a percentage of the principal amount equal to the commission applicable to
an agency sale (as described below) of a Note of identical maturity. If agreed
to by the Company and the applicable Agent, such Agent may utilize its
reasonable efforts on an agency basis to solicit offers to purchase the Notes at
100% of the principal amount thereof, unless otherwise specified in an
applicable Pricing Supplement. The Company will pay the applicable Agent a
commission which, depending on the maturity of the Notes, will range from .125%
to .750% of the principal amount of any Note sold through such Agent.
Commissions and discounts with respect to Notes with maturities in excess of 30
years will be negotiated between the Company and such Agent at the time of such
sale. The Company may also sell Notes directly to investors and other purchasers
on its own behalf in those jurisdictions where it is authorized to do so.
In addition, the Agents may offer the Notes they have purchased as
principal to other dealers for resale to investors, and may allow any portion of
the discount received in connection with such purchases from the Company to such
dealers. After the initial offering of Notes to be resold to investors and other
purchasers the public offering price (in the case of Notes to be resold on a
fixed public offering price basis), concession and discount may be changed.
The Company reserves the right to withdraw, cancel or modify any offer to
purchase Notes without notice and may reject orders in whole or in part whether
placed directly with the Company or through an Agent. Each Agent will have the
right, in its discretion reasonably exercised, to reject, in whole or in part,
any offer to purchase Notes received by it on an agency basis.
The Notes have not been, and will not be, registered under the Securities
and Exchange Law of Japan. The Company and the Agents will agree not to offer or
sell any Note directly or indirectly in Japan or to residents of Japan or for
the benefit of any Japanese person (which term as used herein means any person
resident in Japan, including any corporation or other entity organized under the
laws of Japan) or to others for reoffering or resale directly or indirectly in
Japan or to any Japanese person it will not do so except in circumstances that
result in compliance with any applicable laws, regulations and ministerial
guidelines of Japan taken as a whole.
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<PAGE> 34
The issue of Notes denominated in Deutsche marks ("DM") will take place in
compliance with the guidelines of the German Central Bank regarding the issuance
of DM-denominated debt securities. In particular, only credit institutions
domiciled in Germany will act as agents with respect to such Notes ("DM Agents")
except in the case of an issue of DM-denominated Notes as part of a syndicated
placement (which will be lead managed by a credit institution domiciled in
Germany). Prior to the issuance of any DM-denominated Notes, the Company will
enter into an agreement with one or more DM Agents with respect to the
distribution of such Notes, which agreement may take the form of an accession
letter to the existing distribution agreement between the Company and the
Agents. The names of any DM Agents will be set forth in the Pricing Supplement
relating to any offering of DM-denominated Notes.
Each underwriter, dealer, agent and remarketing firm participating in the
distribution of Notes will agree that it will not offer or sell Notes in the
United Kingdom, so long as Part III of the Companies Act 1985 remains in force
in relation to the Notes, by means of this Prospectus Supplement, the
accompanying Prospectus or any other document, other than to persons whose
ordinary business it is to buy or sell shares or debentures, whether as
principal or agent (except under circumstances that do not constitute an offer
to the public within the meaning of the Companies Act 1985), and that it will
comply with all applicable provisions of The Financial Services Act 1986 in
respect to anything done or to be done in relation to the Notes in, from or
otherwise involving the United Kingdom. Furthermore, each underwriter, dealer,
agent and remarketing firm participating in the distribution of Notes will agree
that it will only issue or pass on in the United Kingdom any publication or
document received by it in connection with the issue of such Notes to persons
who are persons falling within Article 9(3) of The Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1988 (as amended) or who are
persons to whom such publications or documents may otherwise lawfully be issued
or passed on, and, once the provisions of law to replace Part III of the
Companies Act 1985 come into force in relation to the Notes, that it will not,
directly or indirectly, make any offer to the public (within the meaning of
those provisions) of any Notes in circumstances which would require (for the
avoidance of any contravention of those provisions) the publication of a
prospectus in accordance with those provisions.
There can be no assurance as to the existence of a secondary market for any
Notes, or that any Notes will be sold.
Each underwriter and agent participating in the distribution of any Notes
of a series which are issuable in bearer form will agree that it will not offer,
sell or deliver, directly or indirectly, Notes of such series in bearer form, in
connection with the sale thereof during the restricted period, in the United
States or to United States persons other than the United States offices of
certain exempt distributors, certain international organizations, certain
foreign central banks, certain foreign branches of United States financial
institutions and certain United States persons who acquire such Notes through
foreign branches of United States financial institutions. See "DESCRIPTION OF
NOTES -- Bearer Notes" in this Prospectus Supplement.
The Agents, whether acting as agent or as principal, may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"). The Company has agreed to indemnify the Agents against
certain liabilities, including liabilities under the Securities Act, or to
contribute to payments that the Agents may be required to make in respect
thereof. The Agents may engage in transactions with, or perform services for,
the Company in the ordinary course of business.
The Agents may from time to time purchase and sell Notes in the secondary
market, but they are not obligated to do so, and there can be no assurance that
there will be a secondary market for the Notes or liquidity in the secondary
market if one develops. From time to time, each of the Agents may make a market
in the Notes, but no Agent is obligated to do so and may discontinue any
market-making at any time.
In addition to Notes being offered through the Agents as described herein,
other notes of the same series or other series that may have terms identical or
similar to the terms of the Notes may be concurrently offered by the Company on
a continuous basis in the United States pursuant to a distribution agreement or
agreements with the Agents, their affiliates or other agents. Pursuant to such
agreement, such agents may also purchase notes as principal for their own
account or for resale, and the Company may make direct sales of notes on its own
behalf. Any notes so offered and sold, and any other securities offered and sold
pursuant to the accompanying
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<PAGE> 35
Prospectus in excess of certain limits, will reduce correspondingly the maximum
aggregate principal amount of Notes that may be offered by this Prospectus
Supplement and the accompanying Prospectus.
The offering of Notes will conform to the requirements set forth in
applicable sections of Schedule E to the By-laws of the National Association of
Securities Dealers, Inc.
GENERAL INFORMATION
The issuance of the Notes was authorized by action of the Board of
Directors of the Company on December 16, 1992 and June 15, 1994, and by action
of an authorized officer of the Company as of May 2, 1995.
Application has been made to list the Notes on the Luxembourg Stock
Exchange. In connection with the listing application, the Restated Certificate
of Incorporation and By-laws of the Company and a legal notice relating to the
issuance of the Notes will be deposited prior to listing with the Chief
Registrar of the District Court of Luxembourg, where copies thereof may be
obtained upon request. So long as the Notes are listed on the Luxembourg Stock
Exchange, copies of each Pricing Supplement, the Registration Statement and the
documents incorporated by reference therein, the Distribution Agreement between
the Company and the Agents, the Indentures, the Company's Restated Certificate
of Incorporation and By-laws, the annual and quarterly reports or similar
material of the Company may be inspected at the office of the Listing Agent or
at the office of the Paying Agent in Luxembourg. In addition, copies of such
documents may be obtained at the office of such Paying Agent.
The Agents listed on the cover of this Prospectus Supplement may be
contacted at the following addresses: Chase Investment Bank Limited, at Woolgate
House, Coleman Street, London EC2P 2HD, England; Bear, Stearns International
Limited, at One Canada Square, London, E14 5AD, England; CS First Boston
Limited, at 1 Cabot Square, London, E14 4QJ, England; Goldman Sachs
International, at Peterborough Court, 133 Fleet Street, London EC4A 2BB,
England; Lehman Brothers International (Europe), at One Broadgate, London EC2M
7HA, England; Merrill Lynch International Limited, at Ropemaker Place, 25
Ropemaker Street, London EC2Y 9LY, England; and Salomon Brothers International
Limited, at Victoria Plaza, 111 Buckingham Palace Road, London SW1W 0SB,
England.
The Company confirms that the information contained in this Prospectus
Supplement is true and accurate in all material respects and is not misleading.
Neither the Prospectus Supplement, together with the accompanying Prospectus and
Pricing Supplement, nor any amendment or supplement thereto, will contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein not misleading. The Company has given an
undertaking in connection with the listing of the Notes on the Luxembourg Stock
Exchange to the effect that, so long as any Notes remain outstanding and listed
on such Exchange, in the event of any material adverse change in the business,
financial condition or otherwise of the Company and its subsidiaries considered
as a whole which is not reflected in the Prospectus Supplement, together with
the accompanying Prospectus as then amended or supplemented, the Company will
prepare an amendment or supplement to the Prospectus Supplement or publish a new
Prospectus Supplement for use in connection with any subsequent offering and
listing of Notes by the Company. Neither the delivery of this Prospectus
Supplement (including any accompanying Pricing Supplement) and the Prospectus
nor any sale of Notes shall, under any circumstances, create any implication
that there has been no change in the affairs of the Company since the dates as
of which information is given in this Prospectus Supplement (including any
accompanying Pricing Supplement) and the accompanying Prospectus.
As of the date of this Prospectus Supplement, there has been no material
adverse change in the condition, financial or otherwise, of the Company since
the date of the latest audited financial statements contained or incorporated by
reference in this Prospectus Supplement or the accompanying Prospectus.
Except as otherwise disclosed herein, as of the date of this Prospectus
Supplement, the Company is not involved in any litigation or arbitration
proceedings relating to claims or amounts which, if determined adversely to the
Company, would individually or in the aggregate have a material adverse effect
or the condition, financial or otherwise, of the Company or which it believes
will be material in the context of the
S-34
<PAGE> 36
issue of the Notes, and the Company is not aware that any such litigation or
arbitration proceedings are pending or threatened.
The Notes have been accepted for clearance through Euroclear and Cedel. Any
appropriate CUSIP Number, ISIN and Euroclear and Cedel Common Code will be
contained in the relevant Pricing Supplement.
EXPERTS
The Company only and consolidated financial statements of the Corporation
as of December 31, 1994 and 1993 and for each of the years in the three-year
period ended December 31, 1994 incorporated in this Prospectus by reference to
the Company's Annual Report on Form 10-K for the year ended December 31, 1994,
have been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
LEGAL OPINIONS
The validity of the Notes is being passed upon for the Company by Robert B.
Adams, Senior Vice President and Deputy General Counsel of the Company and the
Bank, and on behalf of the Agents by Brown & Wood, New York, New York.
THIS PROSPECTUS SUPPLEMENT (INCLUDING ANY PRICING SUPPLEMENT) AND THE
ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF
AN OFFER TO BUY, ANY OF THE SECURITIES DESCRIBED HEREIN IN ANY JURISDICTION
WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
S-35
<PAGE> 37
FINANCIAL DATA
CAPITALIZATION
The following table sets forth the consolidated capitalization of The Chase
Manhattan Corporation and its consolidated subsidiaries (the "Corporation") as
of March 31, 1995 and 1994.
<TABLE>
<CAPTION>
AS OF MARCH 31,
----------------------
1995 1994
------- -------
<S> <C> <C>
(in millions of U.S. dollars)
(unaudited) (unaudited)
Intermediate- and Long-Term Debt................................... $ 5,298 $ 5,509
Preferred Stock (Without Par Value):
Authorized Shares: 100,000,000
Nonredeemable Preferred Stock:
Outstanding Shares: 56,000,000 and 51,439,738................. 1,400 1,399
Common Stockholders' Equity:
Common Stock (Par Value $2.00 Per Share):
Number of Shares: 1995 1994
Authorized 500,000,000 500,000,000
Issued 186,049,941 184,797,798
Outstanding 177,549,941 184,797,798 372 370
Surplus............................................................ 3,958 3,935
Net Unrealized Gains (Losses) on Investment Securities --
Available for Sale............................................... (38) 10
Retained Earnings.................................................. 3,138 2,440
Treasury Stock:
At cost (8,500,000 Shares)....................................... (306) --
------- -------
Total Common Stockholders' Equity............................. $ 7,124 $ 6,755
------- -------
Total Capitalization............................................... $13,822 $13,663
======= =======
</TABLE>
Federal Funds Purchased and Securities Sold Under Repurchase Agreements,
Commercial Paper and Other Short-Term Borrowings, which include borrowings with
original maturities of less than one year, amounted to $15,842 million at March
31, 1995 and $12,736 million at March 31, 1994.
S-36
<PAGE> 38
SUMMARY OF CONSOLIDATED FINANCIAL DATA OF THE CORPORATION
The following tables set forth certain summary consolidated financial data
regarding the Corporation as of and for the years ended December 31, 1994 and
1993 and for the three month period ended March 31, 1995. The information for
the three months ended March 31, 1995 should be read in conjunction with the
financial and other information included in the Company's Current Report on Form
8-K dated April 17, 1995 and the information for 1994 and 1993 should be read in
conjunction with the financial and other information appearing in the Company's
Annual Report on Form 10-K for the year ended December 31, 1994.
CONDENSED CONSOLIDATED STATEMENT OF CONDITION OF THE CORPORATION
(in millions)
<TABLE>
<CAPTION>
AS OF
MARCH
31, AS OF DECEMBER 31,
-------- ---------------------
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
(unaudited) (audited) (audited)
ASSETS
Cash and Due from Banks...................................... $ 4,424 $ 4,713 $ 6,068
Interest-Bearing Deposits Placed with Banks.................. 6,521 6,791 5,309
Federal Funds Sold and Securities Purchased Under
Resale Agreements.......................................... 7,347 7,280 6,586
Trading Account Assets....................................... 20,550 15,109 6,933
Investment Securities........................................
Held to Maturity........................................... 2,043 2,084 1,384
Available for Sale......................................... 5,256 5,135 7,690
Loans........................................................ 64,135 63,038 60,493
Less: Reserve for Possible Credit Losses................... 1,419 1,414 1,425
-------- -------- --------
Loans, Net.............................................. 62,716 61,624 59,068
Assets Held for Accelerated Disposition...................... -- -- 222
Customers' Liability on Acceptances.......................... 889 520 689
Other Assets................................................. 10,976 10,782 8,154
-------- -------- --------
Total Assets.......................................... $120,722 $114,038 $102,103
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-Bearing........................................ $ 13,236 $ 14,310 $ 16,690
Interest-Bearing........................................... 55,061 55,646 54,819
Federal Funds Purchased and Securities Sold Under
Repurchase Agreements...................................... 11,489 9,312 7,890
Commercial Paper............................................. 1,713 1,766 1,465
Other Short-Term Borrowings.................................. 2,640 2,884 1,813
Trading Account Liabilities.................................. 14,651 9,664 --
Acceptances Outstanding...................................... 893 525 696
Accounts Payable, Accrued Expenses and Other Liabilities..... 7,217 6,502 4,967
-------- -------- --------
106,900 100,609 88,340
Intermediate- and Long-Term Debt............................. 5,298 5,070 5,641
-------- -------- --------
Total Liabilities.......................................... 112,198 105,679 93,981
Stockholders' Equity......................................... 8,524 8,359 8,122
-------- -------- --------
Total Liabilities and Stockholders' Equity................... $120,722 $114,038 $102,103
======== ======== ========
</TABLE>
S-37
<PAGE> 39
CONDENSED CONSOLIDATED STATEMENT OF INCOME OF THE CORPORATION
(in millions)
<TABLE>
<CAPTION>
FOR THE THREE FOR THE YEAR
MONTHS ENDED ENDED
MARCH 31, DECEMBER 31,
-------------- ----------------
1995 1994 1993
-------------- ------ ------
<S> <C> <C> <C>
(unaudited) (audited) (audited)
Interest Revenue.......................................... $2,042 $8,134 $8,468
Interest Expense.......................................... 1,157 4,445 4,605
------- ------ ------
Net Interest Revenue...................................... 885 3,689 3,863
Provision for Possible Credit Losses...................... 65 500 995
Provision for Loans Held for Accelerated Disposition...... -- -- 566
------- ------ ------
Net Interest Revenue After Provisions for Possible
Credit Losses and Loans Held for Accelerated
Disposition............................................. 820 3,189 2,302
Other Operating Revenue................................... 672 3,053 2,949
Other Operating Expenses.................................. 1,078 4,472 4,520
------- ------ ------
Income Before Taxes....................................... 414 1,770 731
Applicable Income Taxes................................... 154 565 265
------- ------ ------
Net Income Before Cumulative Effect of Change in
Accounting Principle.................................... 260 1,205 466
Cumulative Effect of Change in Accounting Principle --
Adoption of SFAS 109.................................... -- -- 500
------- ------ ------
Net Income.............................................. $ 260 $1,205 $ 966
============== ====== ======
Net Income Applicable to Common Stock................... $ 229 $1,078 $ 826
============== ====== ======
</TABLE>
S-38
<PAGE> 40
PROSPECTUS
[LOGO]
$2,827,525,000
THE CHASE MANHATTAN CORPORATION
DEBT SECURITIES, DEBT WARRANTS, PREFERRED STOCK,
CURRENCY WARRANTS, INDEX WARRANTS AND INTEREST RATE WARRANTS
------------------------
The Chase Manhattan Corporation (the "Company") may offer from time to time
pursuant hereto its (i) unsecured debt securities which may be either Senior
(the "Senior Securities") or Subordinated (the "Subordinated Securities") in
priority of payment, consisting of debentures, notes or other evidences of
indebtedness (collectively, "Debt Securities"), (ii) warrants to purchase Debt
Securities (the "Debt Warrants"), (iii) shares of its preferred stock without
par value ("Preferred Stock"), (iv) warrants entitling the holders thereof to
receive from the Company, upon exercise, the cash value of the right to sell
("Currency Put Warrants") and to purchase ("Currency Call Warrants" and,
together with the Currency Put Warrants, the "Currency Warrants") a certain
amount of one currency or currency unit for a certain amount of a different
currency or currency unit, all as shall be designated by the Company at the
time of offering, (v) warrants entitling the holders thereof to receive from
the Company, upon exercise, an amount in cash determined by reference to
decreases ("Index Put Warrants") or increases ("Index Call Warrants") in the
level of a specified index (an "Index") which may be based on one or more U.S.
or foreign stocks, bonds or other securities, one or more U.S. or foreign
interest rates, one or more currencies or currency units, or any combination
of the foregoing, or determined by reference to the differential between any
two Indices ("Index Spread Warrants" and, together with the Index Put Warrants
and the Index Call Warrants, the "Index Warrants"), all as shall be designated
by the Company at the time of offering, and (vi) warrants entitling the holders
thereof to receive from the Company, upon exercise, an amount in cash
determined by reference to decreases ("Interest Rate Put Warrants") or
increases ("Interest Rate Call Warrants" and, together with the Interest Rate
Put Warrants, the "Interest Rate Warrants") in the yield, closing price or rate
of one or more specified debt instruments issued either by the United States
Government or by a foreign government (the "Government Debt Instrument"), in
the interest rate or interest rate swap rate established from time to time by
one or more specified financial institutions (the "Financial Institution Rate")
or in any specified combination of Government Debt Instruments and/or Financial
Institution Rates, all as shall be designated by the Company at the time of
offering. The Debt Securities, Debt Warrants, Preferred Stock, Currency
Warrants, Index Warrants and Interest Rate Warrants are collectively referred
to as the "Securities." The Debt Warrants, Currency Warrants, Index Warrants
and Interest Rate Warrants are collectively referred to as the "Warrants."
The Company may issue Securities at an aggregate initial offering price
which will result in proceeds to the Company of not more than $2,827,525,000 or,
if applicable, the equivalent thereof in any other currency or currency units.
The Securities may be offered as separate series in amounts, at prices and on
terms to be set forth in the applicable Prospectus Supplement. The terms of each
series of Securities, including, where applicable, the specific designation,
priority, aggregate principal amount or number of shares, authorized
denominations or stated value per share, maturity, interest or dividend rate or
rates (or method of ascertaining same), interest or dividend payment dates, any
optional or mandatory redemption terms, any conversion, exchange or sinking fund
provisions, any initial public offering price, the proceeds to the Company,
listing on any securities exchange, and any other specific terms of or in
connection with the offering and sale of such series (the "Offered Securities")
also will be set forth in the applicable Prospectus Supplement. As used herein,
Securities shall include securities denominated in United States dollars or, at
the option of the Company, if so specified in the applicable Prospectus
Supplement, in any other currency, currency unit or composite of currencies or
in amounts determined by reference to an index.
The Senior Securities will rank equally with all other unsubordinated and
unsecured indebtedness of the Company. The Subordinated Securities will be
subordinated to all existing and future Senior Indebtedness of the Company (as
defined below). At September 30, 1994, the outstanding Senior Indebtedness of
the Company, exclusive of guarantees and other contingent obligations, was
approximately $2.8 billion. See "DESCRIPTION OF DEBT SECURITIES -- General."
When Warrants are offered, the Prospectus Supplement will set forth the
specific terms, such as, where applicable, the specific designation, aggregate
number of Warrants, the initial public offering price, exercise price,
detachability, the currency or currency unit for which the Warrants may be
purchased, the currency or currency unit in which the cash settlement value or
the exercise price is payable, the method of calculation of the cash settlement
value, the date on which such Warrants become exercisable and the expiration
date, provisions, if any, for the automatic exercise and/or cancellation prior
to the expiration date, a discussion of certain United States federal income
tax, accounting or other special considerations applicable thereto and any other
terms in connection with such offering and sale.
The Securities may be sold directly by the Company, through agents
designated from time to time or to or through underwriters or dealers. See "PLAN
OF DISTRIBUTION." If any agents of the Company or any underwriters are involved
in the sale of any Offered Securities in respect of which this Prospectus is
being delivered, the names of such agents or underwriters and any applicable
commissions or discounts will be set forth in the applicable Prospectus
Supplement. The net proceeds to the Company from such sale also will be set
forth in the applicable Prospectus Supplement.
------------------------
THE OFFERED SECURITIES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER
OBLIGATIONS OF ANY BANK OR NONBANK SUBSIDIARY OF THE COMPANY AND ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, BANK INSURANCE FUND OR ANY OTHER
GOVERNMENT AGENCY.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS OR THE PROSPECTUS SUPPLEMENT TO WHICH IT
RELATES. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
------------------------
THE DATE OF THIS PROSPECTUS IS NOVEMBER 23, 1994.
<PAGE> 41
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, files
reports and other information with the Securities and Exchange Commission (the
"SEC"). Proxy statements, reports and other information concerning the Company
can be inspected and copied at the SEC's office at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and the SEC's Regional Offices in New York (7 World Trade
Center, Suite 1300, New York, New York 10048) and Chicago (Northwestern Atrium
Center, 500 W. Madison Street, Suite 1400, Chicago, Illinois 60661), and copies
of such material can be obtained from the Public Reference Section of the SEC at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Proxy
statements, reports and other information concerning the Company also may be
inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street,
New York, New York 10005. This Prospectus does not contain all the information
set forth in the Registration Statement and Exhibits thereto which the Company
has filed with the SEC under the Securities Act of 1933 (the "Act") and to which
reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are incorporated herein by reference the following documents of the
Company heretofore filed by it with the SEC:
(i) Annual Report on Form 10-K for the year ended December 31, 1993,
filed pursuant to Section 13 of the Exchange Act, including the portions of
THE CHASE MANHATTAN CORPORATION 1993 ANNUAL REPORT incorporated therein
(the "1993 Annual Report").
(ii) Quarterly Reports on Form 10-Q for the quarters ended March 31,
1994, June 30, 1994 and September 30, 1994, filed pursuant to Section 13 of
the Exchange Act.
(iii) Current Reports on Form 8-K dated January 18, 1994, January 20,
1994, April 18, 1994, April 29, 1994, May 18, 1994, July 18, 1994, August
3, 1994, August 3, 1994, August 11, 1994, October 18, 1994 and November 18,
1994 filed pursuant to Section 13 of the Exchange Act.
(iv) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 10 filed pursuant to Section 12 of
the Exchange Act on April 11, 1969, as amended by amendments thereto on
Form 8 filed on June 20, 1969, April 8, 1988, May 17, 1990 and April 19,
1993 and the description of the Company's Junior Participating Preferred
Stock Purchase Rights contained in the Company's Registration Statement on
Form 8-A filed on February 17, 1989, including all amendments and reports
filed for the purpose of updating such descriptions prior to the
termination of the offering of the Securities of the Company offered
hereby.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Securities of the Company offered hereby
shall be deemed to be incorporated by reference into this Prospectus. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
ANY PERSON RECEIVING A COPY OF THIS PROSPECTUS MAY OBTAIN, WITHOUT CHARGE,
UPON WRITTEN OR ORAL REQUEST, A COPY OF ANY OF THE DOCUMENTS INCORPORATED BY
REFERENCE HEREIN, EXCEPT FOR THE EXHIBITS TO SUCH DOCUMENTS (OTHER THAN EXHIBITS
EXPRESSLY INCORPORATED BY REFERENCE THEREIN). WRITTEN REQUESTS SHOULD BE
DIRECTED TO:
THE CHASE MANHATTAN CORPORATION
1 CHASE MANHATTAN PLAZA
NEW YORK, NEW YORK 10081
ATTENTION: OFFICE OF THE SECRETARY
TELEPHONE REQUESTS MAY BE DIRECTED TO (212) 552-6511.
------------------------
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement thereto are stated in United States dollars ("$",
"dollars" or "U.S.$").
2
<PAGE> 42
THE CHASE MANHATTAN CORPORATION
The Company is a bank holding company that was incorporated in 1969 and
whose principal subsidiary is The Chase Manhattan Bank (National Association)
(the "Bank"). As used herein, the term "Corporation" means the Company and its
consolidated subsidiaries and the term "Bank" means the Bank and its
subsidiaries.
In addition to the Bank, the Corporation holds investments in other
subsidiaries that provide a variety of financial services, including commercial
and consumer financing, investment banking, securities trading and investment
advisory services. The Corporation's primary strategy is that of a global bank
with a diversified domestic base serving three interrelated franchises: global
financial services, domestic consumer products and regional banking in the
northeastern United States. Over the last few years, the Corporation has focused
its business and marketing efforts on two types of customers -- retail
(individuals and small and medium-sized businesses) and wholesale (primarily
large corporations and institutions). The Corporation's business groups serving
retail customers are National Consumer Product Companies, Regional Banking and
Global Private Banking; those serving wholesale customers are Global Corporate
Finance, Global Markets and Transaction and Information Services. In addition to
these core business groups, the Real Estate Finance Sector manages the
Corporation's loan portfolio related to the domestic commercial real estate
business and the LDC Portfolio Management group oversees the Corporation's
portfolio of cross-border extensions of credit to refinancing countries.
The Company's ability to pay dividends on its preferred and common stock is
derived from several sources, including, among other sources, dividends from its
banking and nonbanking subsidiaries. The ability of the Company's banking
subsidiaries to pay dividends is subject to certain restrictions.
National banks are subject to various legal limitations which prohibit the
payment of dividends in certain circumstances and restrict the amount that may
be paid without the prior approval of the Office of the Comptroller of the
Currency ("OCC"). Under these limitations as recently amended, a national bank
may not pay a dividend in an amount greater than its undivided profits. The
approval of the OCC is required if the total of all dividends declared by a
national bank in any calendar year exceeds such bank's net income for that year,
combined with its retained net income for the preceding two calendar years, less
any required transfers to surplus.
At September 30, 1994, under the more restrictive of these limitations, the
Bank could declare dividends during the remainder of 1994 of approximately $1.3
billion, combined with an additional amount equal to its net income from
September 30, 1994 up to the date of any dividend declaration. Under applicable
state and federal laws, The Chase Manhattan Bank (USA) ("Chase USA") and Chase
Bank of Maryland ("Chase Maryland") could declare dividends during the remainder
of 1994 of approximately $1 billion and $6 million, respectively, combined with
an additional amount equal to their respective retained net profits from
September 30, 1994 up to the date of any dividend declaration. The payment of
dividends by bank holding companies and their banking subsidiaries may also be
limited by other factors, including applicable regulatory capital guidelines and
leverage limitations.
The Company is a legal entity separate and distinct from the Bank and the
Company's other subsidiaries. There are various legal limitations on the extent
to which banks, such as the Bank, Chase USA and Chase Maryland, that are insured
by the Federal Deposit Insurance Corporation (the "FDIC"), may finance or
otherwise supply funds to certain of their affiliates. In particular, each bank
that is a subsidiary of the Company is subject to certain restrictions on any
extensions of credit to, or other covered transactions, such as certain
purchases of assets, with the Company or such affiliates. Such restrictions
prevent banking subsidiaries of the Company from lending to the Company and
their affiliates unless such extensions of credit are secured by collateral in
specified amounts and are made on terms and conditions that are substantially
the same as those prevailing for comparable transactions with non-affiliated
companies. Further, such covered transactions by any such bank are limited in
amount as to the Company or any such affiliate to 10 percent of such bank's
capital and surplus and as to the Company and all such affiliates in the
aggregate to 20 percent of such bank's capital and surplus.
3
<PAGE> 43
The Company's Executive Office is located at 1 Chase Manhattan Plaza, New
York, New York 10081 and its telephone number at said office is (212) 552-2222.
REGULATORY DEVELOPMENTS
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") was enacted, among other things, to increase funding for the FDIC's
Bank Insurance Fund, and establish standards for, and restrictions on,
activities of depository institutions based upon capital status and supervisory
evaluation by federal banking regulators. Federal banking agencies were required
to adopt various rules and regulations implementing FDICIA, most of which have
already been promulgated; others of which are still in the rulemaking process.
Through September 30, 1994, regulations have been promulgated under FDICIA
covering a variety of matters including assessment of risk-based deposit
insurance and prompt corrective action measures available to federal regulators
based on the capital category of an institution. Based upon its assessment of
the impact of all of the regulations issued under FDICIA, the Company does not
expect any of them to have a material effect on its operations.
Further rules have been proposed under FDICIA, governing such matters as
accounting and capital requirements. Until the various regulations are adopted
in final form, however, it is difficult to assess how they will impact the
Company's financial condition or operations.
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement, the net
proceeds from the sale of the Securities will be applied to general corporate
purposes, including, without limitation, advances to or investments in banking
and non-banking subsidiaries of the Company and the repayment of commercial
paper or other indebtedness of the Company.
The Company expects that it will, from time to time, engage in additional
private or public financings in character and amount to be determined as market
conditions warrant and as the need arises.
RATIOS OF EARNINGS TO FIXED CHARGES
The following are the consolidated ratios of earnings to fixed charges for
the Corporation for the nine-month period ending September 30, 1994 and for each
of the years in the five-year period ended December 31, 1993:
<TABLE>
<CAPTION>
YEAR ENDED
NINE MONTHS DECEMBER 31,
ENDED --------------------------------
SEPTEMBER 30, 1994 1993 1992 1991 1990 1989
------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Excluding Interest on Deposits.................. 1.9x 1.3 x 1.4 x 1.3 x * *
Including Interest on Deposits.................. 1.4 1.1 1.2 1.1 * *
- ---------------
<FN>
* For the years ended December 31, 1990 and 1989, earnings did not cover fixed
charges by $91 million and $449 million, respectively, primarily as a result
of large additions to the reserve for possible credit losses and special
charges.
</TABLE>
For purposes of computing the consolidated ratios, earnings represent net
income (loss) plus applicable income taxes and fixed charges, less cumulative
effect of change in accounting principle (for the year ended December 31, 1993)
and equity in undistributed earnings (losses) of unconsolidated subsidiaries and
associated companies. Fixed charges represent interest expense (exclusive of
interest on deposits in one case and inclusive of such interest in the other),
amortization of debt discount and issuance costs and one-third (the amount
deemed to represent an interest factor) of net rental expense under all lease
commitments.
4
<PAGE> 44
RATIOS OF EARNINGS TO FIXED CHARGES AND
PREFERRED STOCK DIVIDEND REQUIREMENTS
The following are the consolidated ratios of earnings to fixed charges and
preferred stock dividend requirements for the Corporation for the nine-month
period ended September 30, 1994 and for each of the years in the five-year
period ended December 31, 1993:
<TABLE>
<CAPTION>
YEAR ENDED
NINE MONTHS DECEMBER 31,
ENDED --------------------------------
SEPTEMBER 30, 1994 1993 1992 1991 1990 1989
------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Excluding Interest on Deposits.................. 1.7x 1.2 x 1.2 x 1.2 x * *
Including Interest on Deposits.................. 1.4 1.1 1.1 1.1 * *
- ---------------
<FN>
* For the years ended December 31, 1990 and 1989, earnings did not cover fixed
charges and preferred stock dividend requirements by $231 million and $580
million, respectively, primarily as a result of large additions to the reserve
for possible credit losses and special charges.
</TABLE>
For purposes of computing the consolidated ratios, earnings represent net
income (loss) applicable to common stock plus applicable income taxes, fixed
charges and preferred stock dividend requirements, less cumulative effect of
change in accounting principle (for the year ended December 31, 1993) and equity
in undistributed earnings (losses) of unconsolidated subsidiaries and associated
companies. Fixed charges and preferred stock dividend requirements represent
interest expense (exclusive of interest on deposits in one case and inclusive of
such interest in the other), amortization of debt discount and issuance costs,
one-third (the amount deemed to represent an interest factor) of net rental
expense under all lease commitments and dividend requirements on the outstanding
preferred stock.
DESCRIPTION OF DEBT SECURITIES
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 Debt Securities may be issued from time to
time in one or more series. The particular terms of each series of Debt
Securities offered by any Prospectus Supplement and the extent, if any, to which
such general provisions may apply to the Debt Securities so offered will be
described in the applicable Prospectus Supplement.
The Senior Securities will be issued under an Indenture, dated as of July
1, 1986, as supplemented by a First Supplemental Indenture, dated as of November
1, 1990, and a Second Supplemental Indenture, dated as of May 1, 1991, between
the Company and Bankers Trust Company, as Trustee (the "Senior Trustee") (said
Indenture as so supplemented, the "Senior Indenture"). The Subordinated
Securities will be issued under the Amended and Restated Indenture, dated as of
September 1, 1993, between the Company and Chemical Bank, as Trustee (the
"Subordinated Trustee") (said Indenture is referred to as the "Subordinated
Indenture"). The Senior Indenture and the Subordinated Indenture are hereinafter
collectively referred to as the "Indentures."
The statements under this caption relating to the Debt Securities include
brief summaries of certain provisions of the Indentures, do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, the applicable Indenture, each of which is filed as an exhibit to the
Registration Statement. Such summaries encompass all the material provisions of
the Debt Securities and their related Indentures, including the definitions
therein of certain terms. All article and section references appearing herein
are to articles and sections of the applicable Indenture, and all capitalized
terms not defined herein have the meanings specified in such Indenture. Whenever
terms which are defined in an Indenture are referred to, it is intended that
such defined terms shall be incorporated herein by reference.
Because the Company is a holding company, its rights and the rights of its
creditors, including the Holders of the Debt Securities, to participate in the
assets of any subsidiary upon the latter's liquidation or recapitalization would
be subject to the prior claims of such subsidiary's creditors except to the
extent that the Company may itself be a creditor with recognized claims against
such subsidiary. There is no restriction in the
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Debt Securities or either Indenture against the incurring of indebtedness by the
Company, the Bank or any other subsidiary of the Company.
The Debt Securities may be issued either in registered form ("Registered
Securities") or bearer form ("Bearer Securities") with coupons attached or both.
The Bearer Securities will be offered only to non-United States persons and to
offices of certain United States financial institutions located outside the
United States.
GENERAL
Neither Indenture limits the amount of Debt Securities which may be issued
thereunder and Debt Securities may be issued thereunder up to the aggregate
principal amount which may be authorized from time to time by the Company. The
Senior Securities will be unsecured and will rank on a parity with all other
unsecured and unsubordinated indebtedness of the Company. The Subordinated
Securities will be unsecured and will be subordinate and junior in right of
payment to the Company's obligations to the Holders of Senior Indebtedness of
the Company. See "THE SUBORDINATED SECURITIES -- Subordination." Unless
otherwise set forth in the applicable Prospectus Supplement, neither the
Indentures nor the Debt Securities contain provisions which would afford holders
of Debt Securities protection in the event of a takeover, recapitalization or
similar restructuring involving the Company, which could adversely affect the
Debt Securities.
Reference is made to the applicable Prospectus Supplement that will contain
the specific terms of the series of Debt Securities that are Offered Securities,
including where applicable: (1) the title and priority of the Offered
Securities; (2) any limit on the aggregate principal amount of the Offered
Securities; (3) the price or prices (expressed as a percentage of the aggregate
principal amount thereof) at which the Offered Securities will be issued; (4)
the date or dates on which the Offered Securities will mature; (5) the rate or
rates (which may be fixed or variable) per annum at which the Offered Securities
will bear interest, if any, or the method of determining the same, and the date
or dates from which such interest, if any, will accrue; (6) the Interest Payment
Dates, if any, for the interest payable on the Offered Securities and the
Regular Record Dates for the interest payable on Registered Securities and
whether any such payments may be postponed or deferred; (7) whether interest in
respect of any portion of a temporary global Debt Security representing the
Offered Securities which is payable in respect of an Interest Payment Date prior
to the issuance of definitive Debt Securities will be credited to the Persons
entitled thereto on such Interest Payment Date; (8) any mandatory or optional
sinking fund, amortization or analogous provisions; (9) the place or places
where the principal of (and premium, if any) and interest, if any, on the
Offered Securities will be payable if other than solely at the Principal Trust
Office (as defined under "Payment and Paying Agents" below); (10) the date, if
any, after which and the price or prices at which the Offered Securities may,
pursuant to any optional or mandatory redemption provisions, be redeemed, in
whole or in part, and the other detailed terms and provisions of any such
optional or mandatory redemption provisions; (11) whether the Offered Securities
are to be issuable as Registered Securities or Bearer Securities or both, any
restrictions applicable to the offer, sale or delivery of Bearer Securities,
whether the Offered Securities may be issued in global form, and, if so, the
circumstances under which such Offered Securities may be exchanged for Offered
Securities of like tenor issued in a different form, and the name of the
depository with respect to any global Offered Security; (12) any special
provisions for the payment of additional amounts with respect to the Offered
Securities; (13) the denominations in which any Offered Securities which are
Registered Securities will be issuable if other than denominations of $1,000 and
any integral multiple thereof, and the denominations in which any Offered
Securities which are Bearer Securities will be issuable if other than the
denomination of $5,000; (14) the currency, currency unit or currencies of
payment of principal of (and premium, if any) and interest, if any, on the
Offered Securities if other than dollars; (15) any index, currency exchange
rate, commodity or derivative instrument price, or other publicly available data
used to determine the amount of payments of principal of (and premium, if any)
and interest, if any, on the Offered Securities; (16) any special United States
tax considerations applicable to any Offered Securities; (17) any special
provisions relating to defeasance of the Senior Securities; (18) any conversion
or exchange provisions; and (19) any other terms of the Offered Securities not
inconsistent with the provisions of the applicable Indenture.
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Debt Securities may be issued as Original Issue Discount Securities (as
defined in the applicable Indenture) to be sold at a substantial discount below
their principal amount. Special United States federal income tax considerations
applicable to Debt Securities issued at an original issue discount, including
Original Issue Discount Securities and other special considerations applicable
to such series of Debt Securities will be set forth in the applicable Prospectus
Supplement.
REGISTRATION AND TRANSFER
Unless otherwise provided with respect to any series of Debt Securities,
the Debt Securities of each series will be issuable as Registered Securities. If
so provided with respect to a series of Debt Securities, however, Debt
Securities may be issued solely as Bearer Securities, or in a combination of
both Registered Securities and Bearer Securities. Unless otherwise specified
with respect to such series of Debt Securities, Debt Securities issued in bearer
form shall have interest coupons attached. (Indentures Section 201) Bearer
Securities may not be offered, sold, resold or delivered in connection with
their original issuance in the United States or to United States persons (each
as defined below) other than offices located outside the United States of
certain United States financial institutions. Purchasers of Bearer Securities
will be subject to certification procedures, and may be affected by certain
limitations under United States tax laws. (Indentures Section 311) See
"-- Limitations on Issuance of Bearer Securities."
If Debt Securities of any series are issuable as both Registered Securities
and Bearer Securities, at the option of the Holder and subject to the terms of
the respective Indenture, (i) Bearer Securities (with all unmatured coupons,
except as provided below, and all matured coupons in default) of such series
will be exchangeable into an equal aggregate principal amount of Registered
Securities of the same series of any authorized denominations and like tenor and
(ii) Registered Securities of such series will be exchangeable into an equal
aggregate principal amount of Registered Securities of the same series of
different authorized denominations and like tenor. Bearer Securities surrendered
in exchange for Registered Securities between a Regular Record Date and the
relevant Interest Payment Date shall be surrendered without the coupon relating
to such Interest Payment Date. (Indentures Section 305) Bearer Securities will
not be issued in exchange for Registered Securities.
Debt Securities may be presented for exchange as provided above, and
Registered Securities may be presented for transfer (with the form of transfer
endorsed thereon duly executed), at the office of the Security Registrar and at
the office of any transfer agent appointed by the Company for such purpose with
respect to Debt Securities of a series and referred to in the applicable
Prospectus Supplement without service charge and upon payment of any taxes and
other governmental charges as described in the Indentures. Such transfer or
exchange will be effected upon the Security Registrar or such transfer agent, as
the case may be, being satisfied with the documents of title and identity of the
person making the request. (Indentures Section 305) Unless otherwise specified
in the applicable Prospectus Supplement with respect to any Offered Securities,
the Bank, acting through its office in The City of New York where at any
particular time its corporate agency business is conducted, is designated as
Security Registrar. (Indentures Section 1002)
The Company shall not be required to (i) issue, register the transfer of or
exchange Debt Securities of any series for a period of 15 days immediately
preceding the date notice of redemption is given; (ii) register the transfer of
or exchange any Registered Security called for redemption in whole or in part,
except the unredeemed portion of any Registered Security being redeemed in part;
or (iii) exchange any Bearer Security called for redemption, except to exchange
such Bearer Security for a Registered Security of that series which is
immediately surrendered for redemption. (Indentures Section 305) The
Subordinated Indenture also provides that the Company shall not be required to
(i) issue, register the transfer of or exchange Subordinated Securities of any
series during a period beginning at the opening of business 15 days before the
day of mailing of a notice of exchange of Capital Securities (as defined below)
for Subordinated Securities of that series selected for exchange of Capital
Securities therefor and ending at the close of business on the day of such
mailing; or (ii) register the transfer of or exchange any security of a series
selected for exchange for Capital Securities. (Subordinated Indenture Section
305)
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LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with United States federal tax and securities laws and
regulations, Bearer Securities may not be offered, sold, resold or delivered, as
part of their issuance at any time or otherwise until 40 days after their
closing date, in the United States or to United States persons other than to
offices of United States financial institutions located outside the United
States which agree in writing to comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended (the
"Code"), and the regulations thereunder, and any underwriters, agents and
dealers participating in the offering of Debt Securities will agree that they
will not offer any Bearer Securities for sale or resale during the restricted
period in the United States or to United States persons (other than the
financial institutions described above) nor deliver Bearer Securities within the
United States. Bearer Securities will bear a legend substantially to the
following effect: "Any United States person who holds this obligation will be
subject to limitations under the United States income tax laws, including the
limitations provided in Sections 165(j) and 1287(a) of the Internal Revenue
Code."
As used herein, "United States person" means any citizen or resident of the
United States, any corporation or partnership or other entity created or
organized in or under the laws of the United States or any state thereof or any
estate or trust the income of which is subject to United States federal income
taxation regardless of its source, and "United States" means the United States
of America (including the States and the District of Columbia), its territories,
its possessions and other areas subject to its jurisdiction. (Indentures Section
311)
TEMPORARY GLOBAL DEBT SECURITIES
Pending the availability of definitive Debt Securities, Debt Securities
which are issuable as Bearer Securities initially may be represented by one or
more temporary global Debt Securities, without interest coupons, to be deposited
with a common depositary in London for the Euroclear System ("Euroclear") and
Cedel S.A. for credit to the designated accounts against certifications to the
effect described below. Unless otherwise indicated in the applicable Prospectus
Supplement, any such temporary global Debt Security will be exchangeable only
for definitive Bearer Securities. Such exchange may occur following the
availability of definitive forms of Bearer Securities, subject to any further
limitations described in the applicable Prospectus Supplement, and only upon
certification that such Bearer Securities are not being acquired by or on behalf
of a United States person (other than by or through certain foreign branches of
United States financial institutions) or by a person who has purchased the
Bearer Securities for resale within the United States or to United States
persons. No such Bearer Security delivered in exchange for a portion of a
temporary global Debt Security shall be mailed or otherwise delivered to any
location in the United States in connection with such exchange. (Indentures
Sections 304, 311)
If so specified in the applicable Prospectus Supplement, interest in
respect of any portion of a temporary global Debt Security payable in respect of
an Interest Payment Date prior to the issuance of definitive Bearer Securities
will be paid to each of Euroclear and Cedel S.A. with respect to the portion of
such temporary global Debt Security held for its account. Each of Euroclear and
Cedel S.A. will undertake in such circumstances to credit such interest received
by it in respect of a temporary global Debt Security to the respective accounts
for which it holds such temporary global Debt Security only upon receipt in each
case of certification that, as of the relevant Interest Payment Date, the
portion of such temporary global Debt Security on which such interest is to be
so credited is either not beneficially owned by a United States person (other
than by or through certain foreign branches of United States financial
institutions) or by a person who has purchased the Bearer Securities for resale
to United States persons. (Indentures Sections 304, 311)
PERMANENT GLOBAL DEBT SECURITIES
If any Debt Securities of a series are issuable in permanent global form,
the applicable Prospectus Supplement will describe the circumstances, if any,
under which beneficial owners of interests in any such permanent global Debt
Security may exchange such interests for Debt Securities of such series and of
like tenor and principal amount in any authorized form and denomination. No
Bearer Debt Security delivered in
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exchange for any portion of a permanent global Debt Security shall be mailed or
otherwise delivered to any location in the United States or its possessions in
connection with such exchange. Principal of (and premium, if any) and interest,
if any, on any permanent global Debt Security will be payable in the manner
described in the applicable Prospectus Supplement. (Indentures Sections 305,
1002)
PAYMENT AND PAYING AGENTS
Payment of principal of (and premium, if any) and interest, if any, on
Bearer Securities will be payable in the currency, currency unit or currencies
designated in the applicable Prospectus Supplement, subject to any applicable
laws and regulations, at the offices of such Paying Agents outside the United
States as the Company may designate. Unless otherwise indicated in the
applicable Prospectus Supplement, payment of interest on Bearer Securities on
any Interest Payment Date will be made only against surrender of the coupon
relating to such Interest Payment Date. Unless otherwise indicated in the
applicable Prospectus Supplement, such payment of principal of (and premium, if
any) and interest, if any, on such Bearer Security will be made by a check in
the designated currency or currency unit or, if requested in writing by the
Holder, by transfer to an account in the designated currency or currency unit
maintained by the payee with a bank located outside the United States. No
payment with respect to any Bearer Security will be made at any office or agency
maintained by the Company in the United States nor will any such payment be made
by transfer to an account, or by mail to an address, in the United States.
Notwithstanding the foregoing, payments of principal of (and premium, if any)
and interest, if any, on Bearer Securities will be made in dollars at the
principal office of the Bank in The City of New York where at any particular
time its corporate trust business shall be administered (the "Principal Trust
Office") if payment of the full amount thereof in dollars at all offices or
agencies outside the United States is illegal or effectively precluded by
exchange controls or other similar restrictions. (Indentures Sections 301, 1001,
1002)
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal (and premium, if any) on Registered Securities will be made in the
currency, currency unit or currencies designated in the applicable Prospectus
Supplement against surrender of such Registered Securities at the Principal
Trust Office or by check in the designated currency or currency unit mailed to
the person in whose name such Debt Security is registered. Unless otherwise
indicated in the applicable Prospectus Supplement, payment of any instalment 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 interest. Unless otherwise indicated in the applicable Prospectus
Supplement, payments of such interest will be made at the Principal Trust Office
or, at the option of the Company, by a check in the designated currency or
currency unit mailed to the Holder at such Holder's registered address.
(Indentures Sections 307, 1002)
The Bank acting through the Principal Trust Office has been designated as
the Company's Paying Agent in The City of New York. The Company may at any time
designate additional Paying Agents or rescind the designation of any Paying
Agent or approve a change in the office through which any Paying Agent acts,
except that the Company will maintain at least one Paying Agent in The City of
New York for payments with respect to Registered Securities of each series and,
if Debt Securities of a series are issuable as Bearer Securities, at least one
Paying Agent in a city outside the United States where Debt Securities of such
series may be presented and surrendered for payment, provided that, if the Debt
Securities of such series are listed on The Stock Exchange of the United Kingdom
and the Republic of Ireland Limited or the Luxembourg Stock Exchange or any
other stock exchange located outside the United States and such stock exchange
shall so require, the Company will maintain a Paying Agent in London or
Luxembourg or any other required city located outside the United States, as the
case may be, for the Debt Securities of such series, so long as the Debt
Securities of such series are listed on such exchange. (Indentures Section 1002)
Any money paid by the Company to a Paying Agent for the payment of
principal of (and premium, if any) or interest on any Debt Security which remain
unclaimed at the end of two years after such principal (and premium, if any) or
interest has become due and payable will be repaid to the Company and the Holder
of such Debt Security or any coupon may thereafter look only to the Company for
payment thereof. (Indentures Section 1003)
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RESTRICTIONS ON DISPOSITION OF BANK STOCK
The Senior Indenture provides that, so long as any Senior Securities issued
thereunder are Outstanding, the Company will not create a security interest in
more than 20% of the shares of Capital Stock of the Bank, or permit more than
20% of such shares (exclusive of directors' qualifying shares) to be held
directly or indirectly other than (i) by the Company or (ii) by any corporation
which is wholly-owned (except for directors' qualifying shares) by the Company.
(Section 1006) The term "Capital Stock of the Bank" is defined in the Senior
Indenture as the capital stock, par value $15.00 per share, of the Bank as such
capital stock exists on the date of execution of such Indenture and such other
shares of stock of the Bank as shall have ordinary power to vote for election of
directors of the Bank and shall not have any preference as to distribution of
assets upon any dissolution or winding-up of the Bank. (Section 101) The Senior
Indenture does not contain any restriction on sales by the Bank of its assets.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Each Indenture provides that the Company may, without the consent of the
Holders of any of the Outstanding Debt Securities under such Indenture,
consolidate with, merge into or transfer its assets substantially as an entirety
to any corporation organized and existing under the laws of the United States,
any State or the District of Columbia, provided that the successor corporation
assumes the Company's obligations on the Debt Securities and under the
Indenture, and provided that after giving effect to the transaction no Event of
Default shall have happened and be continuing and that certain other conditions
are met. (Indentures Section 801)
CONVERSION RIGHTS
The terms, if any, on which Debt Securities may be convertible into or
exchangeable for other securities, including, without limitation, other
securities of the Company and securities of other entities, will be set forth in
the applicable Prospectus Supplement.
EXCHANGE OR REDEMPTION
Debt Securities may be subject to redemption and exchange in certain
events, in the manner, at the places and subject to the restrictions set forth
in or established pursuant to the applicable Indenture and set forth in the Debt
Securities and the applicable Prospectus Supplement.
MEETINGS
The Senior Indenture contains provisions for convening meetings of the
Holders of Senior Securities of a series if Senior Securities of that series are
issuable as Bearer Securities. (Senior Indenture Section 1301) The Subordinated
Indenture also contains provisions for convening meetings of the Holders of
Subordinated Securities. (Subordinated Indenture Section 1601) A meeting may be
called at any time by the respective Trustee, and also, upon request, by the
Company or the Holders of at least 10% in principal amount of the Outstanding
Securities of such series, in any such case upon notice given in accordance with
"-- Notices" below. (Senior Indenture Section 1302, Subordinated Indenture
Section 1602) Except as limited by the provisos in "THE SENIOR
SECURITIES -- Modifications and Waiver" and "THE SUBORDINATED
SECURITIES -- Modifications and Waiver", any resolution presented at a meeting
or adjourned meeting duly reconvened at which a quorum is present may be adopted
by the affirmative vote of the Holders of a majority in principal amount of the
Outstanding Securities of that series; provided, however, that, except as
limited by such provisos, any resolution with respect to any consent or waiver
which may be given by the Holders of not less than 66 2/3% in principal amount
of the Outstanding Securities of a series may be adopted at a meeting or an
adjourned meeting duly reconvened at which a quorum is present only by the
affirmative vote of the Holders of 66 2/3% in principal amount of the
Outstanding Securities of that series; and provided, further, that, except as
limited by the provisos referred to immediately above, any resolution with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which may be made, given or taken by the Holders of a
specified percentage, which is less than a majority, in principal amount of the
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Outstanding Securities of a series may be adopted at a meeting or adjourned
meeting duly reconvened at which a quorum is present by the affirmative vote of
the Holders of such specified percentage in principal amount of the Outstanding
Securities of that series. Any resolution passed or decision taken at any
meeting of Holders of Outstanding Securities of any series duly held in
accordance with the applicable Indenture will be binding on all Holders of Debt
Securities of that series and any related coupons. The quorum at any meeting
called to adopt a resolution, and at any reconvened meeting, will be persons
holding or representing a majority in principal amount of the Outstanding
Securities of a series; provided, however, that if any action is to be taken at
such meeting with respect to a consent or waiver which may be given by the
Holders of not less than 66 2/3% in principal amount of the Outstanding
Securities of a series, the persons holding or representing 66 2/3% in principal
amount of the Outstanding Securities of such series will constitute a quorum.
(Senior Indenture Section 1304, Subordinated Indenture Section 1604)
NOTICES
Except as otherwise provided in the relevant Indenture, notices to Holders
of Bearer Securities will be given by publication at least twice in a daily
newspaper in The City of New York and, if Debt Securities of such series are
then listed on The Stock Exchange of the United Kingdom and the Republic of
Ireland Limited or the Luxembourg Stock Exchange or any other stock exchange
located outside the United States and such stock exchange shall so require, in a
daily newspaper in London or Luxembourg or any other required city located
outside the United States, as the case may be, or, if not practicable, elsewhere
in Europe. Notices to Holders of Registered Securities will be given by mail to
the addresses of such Holders as they appear in the Security Register.
(Indentures Sections 101, 106)
TITLE
Title to any Bearer Security, any coupons appertaining thereto and any
temporary global Debt Security will pass by delivery. The Company, the Senior
Trustee or the Subordinated Trustee, as the case may be, and any agent of the
Company or of such Trustee may treat the bearer of any Bearer Security and the
bearer of any coupon and the registered owner of any Registered Security as the
absolute owner thereof (whether or not any such Debt Security or coupon shall be
overdue and notwithstanding any notice to the contrary) for the purpose of
making payment and for all other purposes. (Indentures Section 308)
REPLACEMENT OF SECURITIES AND COUPONS
Any Debt Security (including any coupons appertaining to Bearer Securities)
that becomes mutilated, destroyed, lost or stolen will be replaced by the
Company at the expense of the Holder upon delivery to the Trustee of the Debt
Security and any coupons appertaining thereto or evidence of the destruction,
loss or theft thereof satisfactory to the Company and such Trustee. An indemnity
satisfactory to such Trustee and the Company may be required before a
replacement Debt Security or coupon will be issued. (Indentures Section 306)
GOVERNING LAW
Each Indenture, the Debt Securities and the coupons will be governed by and
construed in accordance with the laws of the State of New York. (Senior
Indenture Section 113, Subordinated Indenture Section 112)
THE SENIOR SECURITIES
EVENTS OF DEFAULT AND WAIVER THEREOF
The Senior Indenture provides that the happening of one or more of the
following events shall constitute an Event of Default with respect to the Senior
Securities of any series: (i) default in the payment of interest on any Senior
Security of such series for a period of 30 days; (ii) default in the payment of
the principal of (or premium, if any, on) any Senior Security of such series;
(iii) default in performance, or breach, of any covenant or warranty of the
Company contained in the Senior Indenture for the benefit of Senior Securities
of
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such series for a period of 60 days after notice has been given to the Company;
(iv) certain events of insolvency of the Company; and (v) any other Event of
Default specifically provided for by the terms of the Senior Securities of such
series. (Section 501) Any additional Events of Default with respect to any
series of Senior Securities will be specified in the applicable Prospectus
Supplement relating to such series. In case an Event of Default shall have
occurred and be continuing with respect to the Senior Securities of any series,
the Senior Trustee or the Holders of not less than 25% in principal amount of
the Senior Securities of such series then outstanding may declare the principal
of the Senior Securities of such series (or, if the Senior Securities of such
series were issued as discounted Senior Securities, such portion of the
principal as may be specified in the terms of that series) to be due and payable
immediately, but such declaration may be annulled, and certain past defaults
waived, by the Holders of not less than a majority in principal amount of the
Senior Securities of such series, upon the conditions provided in the Senior
Indenture. (Sections 502, 513)
The Senior Indenture provides that, subject to the duty of the Senior
Trustee during a default to act with the required standard of care, the Senior
Trustee will be under no obligation to exercise any of its rights or powers
under the Senior Indenture at the request or direction of any of the Holders,
unless such Holders shall have offered to the Senior Trustee reasonable
indemnity. (Sections 601, 603) Subject to such provisions for the
indemnification of the Senior Trustee and certain other conditions, the Holders
of a majority in principal amount of the Outstanding Senior Securities of any
series will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Senior Trustee, or exercising any
trust or power conferred on the Senior Trustee, with respect to the Senior
Securities of that series. (Section 512)
The Company is required to furnish to the Senior Trustee annually a
statement as to the performance by the Company of certain of its obligations
under the Senior Indenture and as to any default in such performance. (Section
1007)
MODIFICATION AND WAIVER
Modifications and amendments of the Senior Indenture may be made by the
Company and the Senior Trustee with the consent of the Holders of not less than
66 2/3% in principal amount of the Outstanding Senior Securities of each series
affected by such modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the Holder of each
Outstanding Senior Security affected thereby, (1) change the Stated Maturity of
the principal of, or any instalment of principal of or interest on, any Senior
Security; (2) reduce the principal amount of any Senior Security or change the
rate of interest or the method of calculation of interest thereon (except as
provided in the Senior Indenture or in such Senior Security), or any premium
payable upon the redemption thereof; (3) change any obligation of the Company to
pay additional amounts pursuant to the Senior Indenture; (4) reduce the amount
of principal of an Original Issue Discount Senior Security payable upon
acceleration of the maturity thereof; (5) adversely affect the right of
repayment, if any, at the option of the Holder thereof; (6) change the coin or
currency in which any Senior Security or any premium or any interest thereon is
payable; (7) impair the right to institute suit for the enforcement of any
payment on or with respect to any Senior Security; (8) reduce the percentage in
principal amount of Outstanding Senior Securities of any series, the consent of
whose Holders is required for modification or amendment of the Senior Indenture
or for waiver of compliance with certain provisions of the Senior Indenture or
for waiver of certain defaults; (9) change any obligation of the Company to
maintain an office or agency in the Borough of Manhattan, The City of New York,
or any obligation of the Company to maintain an office or agency outside the
United States pursuant to the Senior Indenture; or (10) modify certain
provisions of the Senior Indenture requiring consent of specified percentages of
Holders except to increase any such percentage. (Section 902)
The Holders of at least 66 2/3% in principal amount of the Outstanding
Senior Securities of each series may, on behalf of all Holders of Senior
Securities of that series, waive, insofar as that series is concerned,
compliance by the Company with certain restrictive provisions of the Senior
Indenture. (Section 1008) The Holders of not less than a majority in principal
amount of the Outstanding Senior Securities of each series may, on behalf of the
Holders of all the Senior Securities of that series and any coupons appertaining
thereto, waive any past default under the Senior Indenture with respect to
Senior Securities of that series, except a default (i) in the payment of
principal of (or premium, if any) or interest, if any, on any Senior Security of
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such series, or (ii) in respect of a covenant or provision of the Senior
Indenture which cannot be modified or amended without the consent of the Holder
of each Outstanding Senior Security of such series affected thereby. (Section
513)
DEFEASANCE
The Company may elect to defease and be discharged from its obligations
under the Senior Indenture with respect to Senior Securities of any series on
the terms and subject to the conditions contained in the Senior Indenture, by
(a) depositing irrevocably with the Senior Trustee as trust funds (i) in the
case of Senior Securities denominated in a foreign currency, money in such
foreign currency or Foreign Government Obligations (as defined below) of the
foreign government or governments issuing such foreign currency, in each case in
an amount which through the payment of interest, principal or premium, if any,
in respect thereof in accordance with their terms will provide (without any
reinvestment of such interest, principal or premium), not later than one
Business Day before the due date of any payment, money in such foreign currency
or (ii) in the case of Senior Securities denominated in U.S. dollars, U.S.
dollars or U.S. Government Obligations (as defined below), in each case in an
amount which through the payment of interest, principal or premium, if any, in
respect thereof in accordance with their terms will provide (without any
reinvestment of such interest, principal or premium), not later than one
Business Day before the due date of any payment, U.S. dollars or (iii) a
combination of U.S. dollars and U.S. Government Obligations or Foreign
Government Obligations, as applicable, sufficient to pay the principal of or
premium, if any, and interest, if any, on the Senior Securities of such series
as are due and (b) satisfying certain other conditions precedent specified in
the Senior Indenture. Such deposit and defeasance is conditioned, among other
things, upon the Company's delivery to the Senior Trustee of an opinion of
counsel that the Holders of the Senior Securities of such series will have no
federal income tax consequences as a result of such deposit and termination.
(Article Fifteen)
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, under
clauses (i) or (ii) are not callable or redeemable at the option of the issuer
thereof. "Foreign Government Obligations" means securities denominated in a
foreign currency that are (i) direct obligations of a foreign government for the
payment of which its full faith and credit is pledged or (ii) obligations of a
Person controlled or supervised by and acting as an agency or instrumentality of
a foreign government the payment of which is unconditionally guaranteed as a
full faith and credit obligation by such foreign government, which, in either
case, under clauses (i) or (ii) have, at the time of defeasance, a rating from a
nationally recognized rating agency in their country of issue or the United
States at least equivalent to the highest rating given to the Senior Securities
being defeased by Moody's Investors Service, Inc. or Standard & Poor's
Corporation at any time since the issuance of such Senior Securities, and are
not callable or redeemable at the option of the issuer thereof. (Section 101)
REGARDING THE SENIOR TRUSTEE
Bankers Trust Company, the Senior Trustee under the Senior Indenture, has
its principal corporate trust office at Four Albany Street, New York, New York
10006. Bankers Trust Company also serves as trustee under the indentures with
the Company relating to the Floating Rate Notes Due 1999, the 8 1/2% Notes Due
1996, the 7 7/8% Notes Due 1997, the fixed and floating rate Medium-Term Notes
and Senior Medium-Term Notes, Series A and Series B of the Company. The
Corporation has normal banking relationships with the Senior Trustee.
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THE SUBORDINATED SECURITIES
EVENTS OF DEFAULT AND WAIVER THEREOF
The Subordinated Indenture defines an Event of Default with respect to
Subordinated Securities of any series as certain events involving the
bankruptcy, insolvency or reorganization of the Company and such other events as
may be established for any series of Subordinated Securities. However, the
inability of the Company to pay its debts as they become due and the appointment
of a conservator with respect to a depository institution subsidiary of the
Company insured by the FDIC or any successor agency do not constitute Events of
Default under the Subordinated Indenture. (Section 501) If an Event of Default
with respect to Subordinated Securities of any series at the time outstanding
occurs and is continuing, either the Subordinated Trustee or the Holders of not
less than 25% in aggregate principal amount of the Outstanding Subordinated
Securities of that series, by notice as provided in the Subordinated Indenture,
may declare the principal amount (or, if the Subordinated Securities of that
series are Original Issue Discount Subordinated Securities, such portion of the
principal amount as may be specified in the terms of that series) of all the
Subordinated Securities of that series to be due and payable immediately in
cash. The foregoing provision would be subject as to enforcement to the broad
equity powers of a federal bankruptcy court and to the determination by that
court of the nature of the rights of the Holders of the Subordinated Securities
of such series. At any time after a declaration of acceleration with respect to
Subordinated Securities of any series has been made, but before a judgment or
decree for payment of the money due has been obtained by the Subordinated
Trustee, the Holders of a majority in aggregate principal amount of the
Outstanding Subordinated Securities of that series may, under certain
circumstances, rescind and annul such declaration. (Sections 502, 513)
The Subordinated Indenture does not provide for any right of acceleration
of the payment of principal of the Subordinated Securities of any series upon a
default in the payment (including any obligation to exchange Capital Securities
(as defined below) for Subordinated Securities of such series) of principal of
(or premium, if any) or interest, if any, on the Subordinated Securities of such
series, or in the performance of any covenant or agreement in the Subordinated
Indenture or in the terms of the Subordinated Securities of such series. In the
event of any such default (including a default in such payment or exchange at
the stated maturity date of the Subordinated Securities of such series), the
Company will, upon demand of the Subordinated Trustee, pay to it, for the
benefit of the Holders of the Subordinated Securities of such series, the whole
amount then due and payable on the Subordinated Securities of such series for
principal (and premium, if any) and interest, if any, including the delivery of
any Capital Securities then required to be delivered. The Subordinated Indenture
provides that if the Company fails to pay such amount (or to deliver any such
Capital Securities) forthwith upon such demand, the Subordinated Trustee may,
among other things, institute a judicial proceeding for the collection thereof
or for delivery of any Capital Securities required to be delivered. The
Subordinated Indenture also provides that if Capital Securities are exchangeable
for Subordinated Securities of such series and the Company shall fail to elect
the type of Capital Securities to be exchanged for Subordinated Securities of
such series on the relevant exchange date or shall fail to issue or deliver such
Capital Securities on or prior to such exchange date, the Company shall be
liable to the Holders of Subordinated Securities of such series for the payment
of the principal amount of Subordinated Securities of such series (or the
applicable percentage thereof) in cash on the earlier of the relevant proposed
exchange date or the stated maturity date of Subordinated Securities of such
series. The limitation on the right of acceleration described above permits
limited amounts of Subordinated Securities with certain original weighted
average maturities to qualify as supplementary or "Tier 2" capital of the
Company under current regulatory guidelines for bank holding companies. Any
additional Events of Default with respect to any series of Subordinated
Securities, including any related right of acceleration, will be specified in
the applicable Prospectus Supplement. (Section 503)
The Subordinated Indenture provides that, subject to the duty of the
Subordinated Trustee during the continuance of an Event of Default or Default to
act with the required standard of care, the Subordinated Trustee will be under
no obligation to exercise any of its rights or powers under the Subordinated
Indenture at the request or direction of any of the Holders of the Subordinated
Securities of any series, unless such Holders shall have offered to the
Subordinated Trustee reasonable indemnity. Subject to such provisions for the
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<PAGE> 54
indemnification of the Subordinated Trustee, the Holders of a majority in
aggregate principal amount of the Outstanding Subordinated Securities of any
series will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Subordinated Trustee, or
exercising any trust or power conferred on the Subordinated Trustee, with
respect to the Subordinated Securities of such series. (Sections 512, 601, 603)
The Subordinated Indenture provides that notwithstanding any other
provision of the Subordinated Indenture, each Holder of Subordinated Securities
of any series shall have the right to institute suit for the enforcement of any
payment (including any delivery of Capital Securities to be exchanged for such
Subordinated Securities) of principal of (and premium, if any) and interest, if
any, on such Subordinated Securities on the respective stated maturity dates
expressed in such Subordinated Securities or on the Exchange Date or the
redemption date thereof, as the case may be, and that such right shall not be
impaired without the consent of such Holder. (Section 508)
The Holders of not less than a majority in principal amount of the
Outstanding Subordinated Securities of any series may, on behalf of the holders
of all Subordinated Securities of such series, waive any past default under the
Subordinated Indenture with respect to Subordinated Securities of such series
and its consequences, except a default (i) in the payment (including any
obligation to exchange Capital Securities for Subordinated Securities of such
series) of principal of (or premium, if any) or interest, if any, on any
Subordinated Security of such series, or (ii) in respect of a covenant or
provision of the Subordinated Indenture which cannot be modified or amended
without the consent of the Holder of each Outstanding Subordinated Security of
such series affected thereby. (Section 513)
The Company is required to file annually with the Subordinated Trustee a
written statement as to the existence or non-existence of defaults. (Section
1006)
MODIFICATION AND WAIVER
The Subordinated Indenture provides that, with the consent of the Holders
of not less than 66 2/3% in principal amount of the Outstanding Subordinated
Securities of each series affected thereby, modifications and alterations of the
Subordinated Indenture may be made which affect the rights of the Holders of the
Subordinated Securities of such series, but no such modification or alteration
may be made without the consent of the Holder of each Subordinated Security
affected thereby which would (i) change the fixed maturity of the principal of,
or any instalment of principal of or interest on, any Subordinated Security, or
reduce the principal amount thereof or change the rate or rates (or the method
of ascertaining the rate or rates) of interest thereon (except as provided in
the Subordinated Indenture or in the Subordinated Securities of such series) or
any premium payable upon the redemption thereof, or reduce the portion of the
principal amount of any Original Issue Discount Subordinated Security payable
upon acceleration of the maturity thereof, or change any place where, or the
coin or currency in which, the principal amount of any Subordinated Security or
any premium or interest thereon is payable, or impair any right to institute
suit for the enforcement of any right to receive payment of the principal of
(and premium, if any) and interest, if any, on such Subordinated Security on the
respective stated maturity dates expressed in such Subordinated Security (or, in
the case of redemption, on the redemption date), or, if applicable, to have
delivered Capital Securities to be exchanged for such Subordinated Security and
to have such Capital Securities sold in a secondary offering to the extent
provided in such Subordinated Security and in the Subordinated Indenture, or
modify the provisions of the Subordinated Indenture with respect to the
subordination of the Subordinated Securities of such series in a manner adverse
to the Holders, or (ii) reduce the above-stated percentage in principal amount
of Outstanding Subordinated Securities of such series required to modify or
alter the Subordinated Indenture, or (iii) impair the right of any Holder of
Subordinated Securities of such series, subject to the provisions of the
Subordinated Indenture and of Subordinated Securities of such series, to receive
on any exchange date for Subordinated Securities of such series Capital
Securities with a market value equal to the amount established with respect to
the Securities of such series held by such Holder. (Sections 902, 1007)
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EXCHANGEABILITY
If so provided in the applicable Prospectus Supplement, Subordinated
Securities may be exchangeable, either upon the occurrence of certain events
described in the applicable Prospectus Supplement or at the option of the
Company or both, for Capital Securities, and certain funds may be designated
with regard to the Subordinated Securities as Available Funds (as defined in the
applicable Prospectus Supplement) or Optional Available Funds (as defined in the
applicable Prospectus Supplement) for United States bank regulatory purposes. In
certain circumstances, Subordinated Securities may also provide Holders with the
right to elect to receive cash for Capital Securities issued in exchange for
Offered Subordinated Securities. The applicable Prospectus Supplement will set
forth the terms, conditions and restrictions relating to any of the foregoing
provisions applicable to a series of Subordinated Securities. (Sections 1301,
1310, 1401)
"Capital Securities" means any securities issued by the Company which
consist of any one of the following: (i) Common Stock (as defined in the
Subordinated Indenture), (ii) Perpetual Preferred Stock (as defined in the
Subordinated Indenture), or (iii) other securities which at the date of issuance
are securities of a type that may constitute capital of the Company in unlimited
amounts for which Subordinated Securities are permitted to be exchanged under
regulations of, or other determinations by, the Company's Primary Federal
Regulator (as defined in the applicable Prospectus Supplement), provided that if
any securities under (iii) are (a) issued in exchange for Subordinated
Securities under the Subordinated Indenture and (b) debt obligations for which
Capital Securities are exchangeable, the Company shall have received the
approval of the Company's Primary Federal Regulator for such issuance. Capital
Securities may have such terms, rights and preferences as may be determined by
the Company. (Section 101)
The staff of the SEC has advised that Rule 13e-4 and Rule 14e-1 of the
SEC's rules and regulations relating to tender offers, as currently interpreted
and in effect, would be applicable to the exchange of Capital Securities for
Subordinated Securities and to the related secondary offering. If the staff were
to continue to take this position, the Company intends, subject to its right to
seek appropriate relief (which may or may not be available) from the application
of such rules, at the time of the exchange of Capital Securities for
Subordinated Securities and the related secondary offering to comply with Rule
13e-4 and Rule 14e-1 (or any successor rules), as then interpreted and in
effect, and to afford holders of Subordinated Securities all rights under, and
to make all filings required by, such rules (or successor rules).
SUBORDINATION
The obligation of the Company to make any payment on account of the
principal of (and premium, if any) and interest, if any, on the Subordinated
Securities will be subordinate and junior in right of payment to the Company's
obligations to the holders of Senior Indebtedness of the Company to the extent
described in the next paragraph. "Senior Indebtedness of the Company" is defined
in the Subordinated Indenture to mean the obligations of the Company to its
creditors other than the Holders of the Subordinated Securities, whether
outstanding on the date of execution of the Subordinated Indenture or thereafter
incurred, except obligations "ranking on a parity with the [Subordinated]
Securities" or "ranking junior to the [Subordinated] Securities" (as those terms
are defined in the Subordinated Indenture). The obligations of the Company in
respect of the Subordinated Securities will rank on a parity with the Company's
obligations in respect of the Floating Rate Subordinated Notes Due 1997, the
7 1/2% Subordinated Notes Due 1997, the 10% Subordinated Notes Due 1999, the 8%
Subordinated Notes Due 1999, the 7 3/4% Subordinated Notes due 1999, the
Floating Rate Subordinated Notes Due 2000, the 9 3/8% Subordinated Notes Due
2001, the 9 3/4% Subordinated Notes Due 2001, the 7.50% Subordinated Notes Due
2003, the Floating Rate Subordinated Notes Due 2003, the Floating Rate
Subordinated Notes Due August 1, 2003, the 8% Subordinated Notes Due 2004, the
7 7/8% Subordinated Notes Due 2004, the 6.50% Subordinated Notes Due 2005, the
6.75% Subordinated Notes Due 2008, the 6 1/8% Subordinated Notes Due 2008, the
6.50% Subordinated Notes Due 2009, the Floating Rate Subordinated Notes Due 2009
and the Subordinated Medium-Term Notes, Series A and Series B, issued by the
Company and any other obligations of the Company ranking on a parity with the
Subordinated Securities. The obligations of the Company in respect of the
Subordinated Securities of any series will rank on a parity with the obligations
of the Company in respect of the Subordinated Securities of each other series.
(Section 1201)
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In the case of any insolvency, receivership, conservatorship,
reorganization, readjustment of debt, marshalling of assets and liabilities or
similar proceedings or any liquidation or winding-up of or relating to the
Company as a whole, whether voluntary or involuntary, all obligations of the
Company to Holders of Senior Indebtedness of the Company shall be entitled to be
paid in full before any payment shall be made on account of the principal of
(and premium, if any) and interest, if any, on the Subordinated Securities. At
September 30, 1994, the outstanding Senior Indebtedness of the Company,
exclusive of guarantees and other contingent obligations, was approximately $2.8
billion. In the event of any such proceeding, after payment in full of all sums
owing with respect to Senior Indebtedness of the Company, the Holders of the
Subordinated Securities, together with the holders of any obligations of the
Company ranking on a parity with the Subordinated Securities, shall be entitled
to be paid from the remaining assets of the Company the amounts at the time due
and owing on account of unpaid principal of (and premium, if any) and interest,
if any, on the Subordinated Securities before any payment or other distribution,
whether in cash, property or otherwise, shall be made on account of any capital
stock or any obligations of the Company ranking junior to the Subordinated
Securities. By reason of such subordination, in the event of the insolvency of
the Company, Holders of Senior Indebtedness of the Company may receive more,
ratably, and Holders of the Subordinated Securities having a claim pursuant to
the Subordinated Securities may receive less, ratably, than the other creditors
of the Company. Such subordination will not prevent the occurrence of any Event
of Default in respect of the Subordinated Securities. See "-- Events of Default
and Waiver Thereof " for limitations on the right of acceleration of
Subordinated Securities. (Section 1201)
REGARDING THE SUBORDINATED TRUSTEE
Chemical Bank, the Subordinated Trustee under the Subordinated Indenture,
has its principal corporate trust office at 450 West 33rd Street, New York, New
York 10001. Chemical Bank serves as Trustee with respect to the 7 1/2%
Subordinated Notes Due 1997, the 10% Subordinated Notes Due 1999, the 8%
Subordinated Notes Due 1999, the 7 3/4% Subordinated Notes due 1999, the 9 3/8%
Subordinated Notes Due 2001, the 9 3/4% Subordinated Notes Due 2001, the 7.50%
Subordinated Notes Due 2003, the Floating Rate Subordinated Notes Due 2003, the
Floating Rate Subordinated Notes Due August 1, 2003, the 8% Subordinated Notes
Due 2004, the 7 7/8% Subordinated Notes Due 2004, the 6.50% Subordinated Notes
Due 2005, the 6.75% Subordinated Notes Due 2008, the 6 1/8% Subordinated Notes
Due 2008, the 6.50% Subordinated Notes Due 2009 and the Subordinated Medium-Term
Notes, Series A and Series B, of the Company, which are currently outstanding
under the Subordinated Indenture. The Corporation has normal banking
relationships with the Subordinated Trustee.
DESCRIPTION OF PREFERRED STOCK
The following description of Preferred Stock sets forth certain general
terms and provisions of the series of Preferred Stock to which any Prospectus
Supplement may relate. Certain other terms of any particular series of Preferred
Stock (including Preferred Stock issuable upon conversion or exchange of any
Debt Security) will be described in the applicable Prospectus Supplement. If so
indicated in the applicable Prospectus Supplement, the terms of any such series
of Preferred Stock may differ from the terms set forth below. The description of
Preferred Stock set forth below and the description of the terms of a particular
series of Preferred Stock set forth in the applicable Prospectus Supplement do
not purport to be complete and are qualified in their entirety by reference to
the Company's Restated Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), and the Certificate of Designation, Preferences
and Rights relating to such series of Preferred Stock, which will be filed or
incorporated by reference as an exhibit to the Registration Statement to which
this Prospectus relates. Preferred Stock, if so indicated in the applicable
Prospectus Supplement, may be issuable in exchange for a series of Debt
Securities or upon conversion thereof.
GENERAL
Under the Certificate of Incorporation, the Board of Directors of the
Company is authorized to issue up to 100,000,000 shares of Preferred Stock,
without par value, in one or more series, with such voting powers, full or
limited but not to exceed one vote per share, or without voting powers, and with
such designations,
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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 the
Certificate of Incorporation. As used herein the term "Board of Directors" means
the Board of Directors of the Company and includes any duly authorized committee
thereof. Prior to the issuance of each series of Preferred Stock, the Board of
Directors will adopt resolutions creating and designating such series as a
series of preferred stock of the Company.
As of September 30, 1994, there were 56,000,000 shares of preferred stock
of the Company outstanding and having an aggregate stated value of approximately
$1,400,000,000. Unless otherwise specified in the applicable Prospectus
Supplement, the shares of each series of Preferred Stock will rank on a parity
as to dividends and distributions of assets with each other and with the
currently outstanding series of preferred stock of the Company which have been
designated as Preferred Stock, 10 1/2% Series G, with a stated value of $25 per
share, Preferred Stock, 9.76% Series H, with a stated value of $25 per share,
Preferred Stock, 10.84% Series I, with a stated value of $25 per share,
Preferred Stock, 9.08% Series J, with a stated value of $25 per share, Preferred
Stock, 8 1/2% Series K, with a stated value of $25 per share, Preferred Stock,
8.32% Series L, with a stated value of $25 per share, Preferred Stock, 8.40%
Series M, with a stated value of $25 per share, and Preferred Stock, Adjustable
Rate Series N, with a stated value of $25 per share, and will rank senior to the
Company's authorized but unissued Junior Participating Preferred Stock.
Under regulations adopted by the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), if the holders of shares of any series of
preferred stock of the Company become entitled to vote for the election of
directors because dividends on such series are in arrears (see "Voting Rights"),
such series may then be deemed a "class of voting securities" and a holder of 25
percent or more of such series (or a holder of 5 percent 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 percent or
more of such series.
Reference is made to the Prospectus Supplement relating to either the
particular series of Preferred Stock offered thereby or the particular series of
Debt Securities offered thereby which is convertible or exchangeable for a
particular series of Preferred Stock for certain specific terms thereof,
including: (i) the designation, number of shares and stated value per share;
(ii) the amount of liquidation preference; (iii) the initial public offering
price at which shares of such series of Preferred Stock will be sold; (iv) the
dividend rate or rates (or method of ascertaining the same); (v) the dates on
which dividends shall be payable, the date from which dividends shall accrue and
the record dates for determining the holders entitled to such dividends; (vi)
any redemption or sinking fund provisions; (vii) any conversion or exchange
provisions; and (viii) any additional dividend, redemption, liquidation or other
preferences or rights and qualifications, limitations or restrictions thereof.
The shares of Preferred Stock will, when issued, be fully paid and
nonassessable and will have no preemptive rights.
Unless otherwise specified in the applicable Prospectus Supplement, the
transfer agent, registrar and dividend disbursing agent for shares of each
series of Preferred Stock will be Mellon Securities Trust Company.
VOTING RIGHTS
Holders of shares of Preferred Stock will have no voting rights, except as
set forth below or otherwise required by law.
In the event that six quarterly dividends (whether or not consecutive)
payable on any share or shares of any series of preferred stock of the Company
shall be in arrears, the holders of shares of each series of Preferred Stock,
voting separately as a class with the holders of shares of any one or more other
series of
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preferred stock of the Company upon which like voting rights have been conferred
(including any other series of Preferred Stock), shall be entitled at the
Company's next annual meeting of stockholders (and at each subsequent annual
meeting of stockholders), unless all dividends in arrears have been paid or
declared and set apart for payment prior to such meeting (or such subsequent
meeting), to cast one-fortieth ( 1/40) of one vote for each $25 of involuntary
liquidation preference (exclusive of accrued and unpaid dividends thereon) for
each share of such series of Preferred Stock held of record (but not more than
one vote per share) for the election of two directors of the Company, with the
remaining directors of the Company to be elected by the holders of shares of any
other class or classes or series of stock entitled to vote therefor. Until the
arrears in payments of all dividends which permitted the election of such
directors shall cease to exist, any director who has been so elected pursuant to
the preceding sentence may be removed at any time, either with or without cause,
only by the affirmative vote of the holders of the shares at the time entitled
to cast a majority of the votes entitled to be cast for the election of any such
director at a special meeting of such holders called for that purpose, and any
vacancy thereby created may be filled by the vote of such holders. If and when
such arrears shall cease to exist, the holders of shares of such series of
Preferred Stock shall be divested of the foregoing special voting rights,
subject to revesting in the event of each and every subsequent like arrears in
payments of dividends. Upon the termination of each such special voting right,
the terms of office of all persons who may have been elected directors by vote
of the holders of such shares of preferred stock of the Company pursuant to such
special voting right shall immediately terminate.
Without the consent of the holders of shares entitled to cast at least
two-thirds of the votes entitled to be cast by the holders of the total number
of shares of preferred stock of the Company then outstanding, voting as a class
without regard to series, with the holders of shares of each series of Preferred
Stock being entitled to cast one-fortieth ( 1/40) of one vote for each $25 of
involuntary liquidation preference (exclusive of accrued and unpaid dividends
thereon) for each share of such series of Preferred Stock (but not more than one
vote per share), the Company may not: (a) create any class or series of stock
which shall have preference as to dividends or distributions of assets over any
outstanding series of preferred stock of the Company (other than a series which
has no right to object to such creation) or (b) alter or change the provisions
of the Certificate of Incorporation so as to adversely affect the voting power,
preferences or special rights of the holders of shares of preferred stock of the
Company; provided, however, that if such creation or such alteration or change
would adversely affect the voting power, preferences or special rights of one or
more, but not all, series of preferred stock of the Company at the time
outstanding, consent of the holders of shares entitled to cast at least two-
thirds of the votes entitled to be cast by the holders of all of the shares of
all such series so affected, voting as a class, shall be required in lieu of the
consent of the holders of shares entitled to cast at least two-thirds of the
votes entitled to be cast by the holders of the total number of shares of
preferred stock of the Company at the time outstanding. Without limiting the
generality of the foregoing, the creation of any class or series of stock
entitled to vote as a class together with the holders of shares of any series of
Preferred Stock on the matters set forth in this paragraph, the holders of
shares of which are entitled to cast more than one-fortieth ( 1/40) of one vote
for each $25 of involuntary liquidation preference (exclusive of accrued and
unpaid dividends thereon) to which the holders of such shares of such class or
series are entitled, shall be deemed to adversely affect the voting power of
such series of Preferred Stock.
DIVIDENDS
The holders of shares of each series of Preferred Stock shall be entitled
to receive, when and as declared by the Board of Directors, out of funds legally
available therefor, cumulative or non-cumulative cash or other dividends on such
dates and at such rate or rates as are set forth in, or as are determined by the
method described in, the applicable Prospectus Supplement. Dividends on the
shares of each series of Preferred Stock will accrue from the date on which the
Company initially issues shares of such series or as otherwise set forth in the
applicable Prospectus Supplement. Each dividend will be payable to holders of
record as they appear on the stock register of the Company on the record dates
fixed by the Board of Directors, as specified in the applicable Prospectus
Supplement.
So long as the shares of any series of Preferred Stock shall be
outstanding, unless (i), when applicable, full cumulative dividends shall have
been paid or declared and set apart for payment on all outstanding shares
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of Preferred Stock and other classes and series of preferred stock of the
Company (other than Junior Stock, as defined below) and (ii) the Company shall
not be in default or in arrears with respect to any sinking or other analogous
fund or other agreement for the purchase, redemption or other retirement of any
shares of preferred stock of the Company (other than Junior Stock), the Company
may not declare any dividends on any shares of Common Stock, par value $2.00 per
share, of the Company ("Common Stock") or any other stock of the Company ranking
as to dividends or distributions of assets junior to each series of Preferred
Stock (the Common Stock and any such other stock being herein referred to as
"Junior Stock"), or make any payment on account of, or set apart money for, a
sinking or other analogous fund for the purchase, redemption or other retirement
of any shares of Junior Stock or make any distribution in respect thereof,
whether in cash or property or in obligations or stock of the Company, other
than Junior Stock. In the event that there shall be outstanding shares of any
other series of preferred stock of the Company (including any other series of
Preferred Stock) ranking on a parity as to dividends with any series of
Preferred Stock and dividends on shares of such series of Preferred Stock or
such other series of preferred stock of the Company are in arrears, the Company,
in making any dividend payment on account of such arrears, is required to make
payments ratably on all outstanding shares of such series of Preferred Stock and
such other series of preferred stock of the Company in proportion to the
respective amounts of dividends in arrears on all such outstanding shares of
such series of Preferred Stock and such other series of preferred stock of the
Company to the date of such dividend payment. Holders of shares of any series of
Preferred Stock shall not be entitled to any dividend, whether payable in cash,
property or stock, in excess of full cumulative dividends on shares of such
series of Preferred Stock. No interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment or payments which may be in
arrears.
REDEMPTION
The shares of any series of Preferred Stock may be redeemable at the option
of the Company and may be subject to mandatory redemption pursuant to a sinking
fund or otherwise, in each case upon the terms, at the times and at the
redemption prices set forth in the applicable Prospectus Supplement.
If any dividends on shares of any series of Preferred Stock are in arrears,
no shares of such series shall be redeemed unless all outstanding shares of such
series are simultaneously redeemed, and the Company shall not purchase or
otherwise acquire any shares of such series; provided, however, that the
foregoing shall not prevent the purchase or acquisition of shares of such series
pursuant to a purchase or exchange offer made on the same terms to holders of
all outstanding shares of such series.
LIQUIDATION PREFERENCE
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company, the holders of shares of each series of Preferred
Stock shall be entitled to receive out of the assets of the Company available
for distribution to stockholders, before any distribution of assets is made to
the holders of Common Stock or of any other shares of stock of the Company
ranking as to such a distribution junior to the shares of such series, an amount
described in the applicable Prospectus Supplement. The holders of the presently
outstanding shares of preferred stock of the Company are entitled to receive
amounts equal to the stated value of such shares. If upon any voluntary or
involuntary liquidation, dissolution or winding up of the Company, the amounts
payable with respect to shares of each series of Preferred Stock and any other
shares of stock of the Company ranking as to any such distribution on a parity
with shares of such series of Preferred Stock are not paid in full, the holders
of shares of such series of Preferred Stock and of such other shares will share
ratably in any such distribution of assets of the Company in proportion to the
full respective preferential amounts to which they are entitled. After payment
to the holders of shares of such series of Preferred Stock of the full
preferential amounts to which they are entitled, the holders of shares of such
series of Preferred Stock will not be entitled to any further participation in
any distribution of assets by the Company, unless otherwise provided in the
applicable Prospectus Supplement. The consolidation or merger of the Company
with or into any other corporation, or the sale of substantially all the assets
of the Company in consideration for the issuance of equity securities of another
corporation, shall not be regarded as a liquidation, dissolution or winding up
of the
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Company, if the voting power, preferences or special rights of the holders of
shares of such series of Preferred Stock are not impaired thereby.
CONVERSION AND EXCHANGEABILITY PROVISIONS
The terms, if any, on which shares of any series of Preferred Stock are
convertible into or exchangeable for shares of Common Stock will be set forth in
the applicable Prospectus Supplement. Such terms may include provisions for
conversion or exchange, either mandatory, at the option of the holder, or at the
option of the Company, in which the number of shares of Common Stock to be
received by the holders of Preferred Stock would be calculated by reference to
the market price of Common Stock as of a time stated in the applicable
Prospectus Supplement. See "DESCRIPTION OF COMMON STOCK."
DESCRIPTION OF COMMON STOCK
If so specified in the Prospectus Supplement relating to the Offered
Securities, the Offered Securities are convertible into or exchangeable for
shares of Common Stock. The statements below describing the Common Stock are in
general terms and are in all respects subject to, and are qualified in their
entirety by reference to, the applicable provisions of the Certificate of
Incorporation.
The Company is authorized to issue 500,000,000 shares of Common Stock. At
September 30, 1994, 181,289,886 shares of Common Stock were outstanding,
19,011,983 shares of Common Stock were reserved for issuance pursuant to the
Chase Lincoln First Bank, N.A. 1982 Incentive Stock Plan, The Chase Manhattan
1982 Long-Term Incentive Plan, The Chase Manhattan 1987 Long-Term Incentive
Plan, and The Chase Manhattan 1994 Long-Term Incentive Plan, 3,310,875 shares of
Common Stock were reserved for issuance pursuant to warrants issued in
settlement of a legal action, 14,000,000 shares of Common Stock were reserved
for issuance pursuant to The Chase Manhattan Stock Option Program for Employees,
and 9,596,151 shares of Common Stock were reserved for issuance pursuant to the
Company's Dividend Reinvestment and Stock Purchase Plan.
Holders of shares of Common Stock are entitled to one vote per share and,
subject to the rights, if any, of holders of shares of the outstanding series of
preferred stock of the Company (as described above under "DESCRIPTION OF
PREFERRED STOCK"), have equal rights to participate in dividends when declared
and, in the event of liquidation, in the net assets of the Company available for
distribution to stockholders. The Company may not declare any dividends on, or
make any payment on account of the purchase, redemption or other retirement of,
its Common Stock unless full cumulative dividends, where applicable, have been
paid or declared and set apart for payment upon all outstanding shares of the
preferred stock of the Company and the Company is not in default or in arrears
with respect to any sinking or other analogous fund or any call for tender
obligations, or any other agreement for the purchase, redemption or other
retirement of any shares of the preferred stock of the Company. The holders of
shares of Common Stock do not have redemption or sinking fund rights, and none
of the holders of shares of Common Stock is entitled to preemptive rights or
preferential rights to subscribe for shares of Common Stock or any other
securities of the Company, except for certain Junior Participating Preferred
Stock Purchase Rights that were distributed in 1989 as dividends to holders of
Common Stock on or after February 27, 1989 which are exercisable or transferable
separately from shares of Common Stock only upon the occurrence of certain
events including the acquisition by a person or group of affiliated or
associated persons of 20% or more of the outstanding shares of Common Stock of
the Company. Such rights are more fully described in the 1993 Annual Report of
the Company and will be more fully described in any Prospectus Supplement
applicable to Preferred Stock that is convertible or exchangeable into Company
Stock. Shares of Common Stock are fully paid and nonassessable; however, federal
law (12 U.S.C. Section 55) provides for the enforcement of any pro rata
assessment of stockholders of a national bank to cover impairment of capital by
sale, to the extent necessary, of the stock of any assessed stockholder failing
to pay his assessment, and the Company, as the stockholder of the Bank and other
national banking subsidiaries, is subject to such assessment and sale. The
shares of Common Stock are listed on the New York Stock Exchange. The transfer
agent and registrar for the Common Stock of the Company is Mellon Securities
Trust Company.
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The Certificate of Incorporation includes a "fair price provision" that
would require a 75% stockholder vote for approval of certain business
combinations, including certain mergers, asset sales, security issuances,
recapitalizations and liquidations, involving the Company or its subsidiaries
and certain acquiring persons (namely, a person, entity or specified group which
beneficially owns more than 10% of the voting stock of the Company), unless the
"fair price" and other procedural requirements of the provision are met, or
unless approved by a majority of directors who are not affiliated with the
acquiring party. This provision includes a requirement of a 75% stockholder vote
to amend or repeal it. The Certificate of Incorporation also provides for
classification of the Board of Directors into three classes and includes related
provisions requiring (i) advance notice of stockholder nominations of directors,
(ii) limitations on filling newly created directorships and vacancies, (iii)
removal of directors only for cause and by vote of the holders of at least 75%
of the shares entitled to vote, (iv) a limitation on action by written consent
of holders of Common Stock other than at a meeting of stockholders and (v) a
requirement of a 75% stockholder vote to amend or repeal such provision.
DESCRIPTION OF WARRANTS
The Company may issue, together with any Debt Securities of a series
offered or separately, Debt Warrants for the purchase of other Debt Securities
of any series or Currency Warrants, Index Warrants and Interest Rate Warrants.
The Warrants are to be issued under separate Warrant Agreements (each a "Warrant
Agreement" and respectively a "Debt Warrant Agreement," a "Currency Warrant
Agreement," an "Index Warrant Agreement" and an "Interest Rate Warrant
Agreement") to be entered into between the Company and a bank or trust company,
as Warrant Agent (each a "Warrant Agent" and respectively a "Debt Warrant
Agent," a "Currency Warrant Agent," an "Index Warrant Agent" and an "Interest
Rate Warrant Agent"), all as set forth in the applicable Prospectus Supplement.
A copy of the form of each type of Warrant Agreement, including the form of
Warrant Certificate representing each type of Warrant (the "Warrant
Certificates"), reflecting the alternative provisions to be included in the
Warrant Agreements that will be entered into with respect to particular
offerings of Warrants, is filed as an exhibit to the Registration Statement of
which this Prospectus forms a part. The following summaries of certain
provisions of the Warrant Agreements and the Warrant Certificates do not purport
to be complete and are subject to, and are qualified in their entirety by
reference to, all provisions of the Warrant Agreements and the Warrant
Certificates, respectively, including the definition therein of certain terms.
Such summaries encompass all the material provisions contained in the form of
Warrant Agreements and the form of Warrant Certificates.
DEBT WARRANTS
The applicable Prospectus Supplement will describe the following terms of
the Debt Warrants being offered thereby, the Debt Warrant Agreement relating to
such Debt Warrants and the Debt Warrant Certificates representing such Debt
Warrants: (1) the number of Debt Warrants offered; (2) the designation,
aggregate principal amount and terms of the Debt Securities purchasable upon
exercise of such Debt Warrants; (3) the designation and terms of any related
Debt Securities with which such Debt Warrants are issued and the number of such
Debt Warrants issued with each such Debt Security; (4) the date, if any, on and
after which such Debt Warrants and the related Debt Securities will be
separately transferable; (5) the principal amount of Debt Securities purchasable
upon exercise of one Debt Warrant and the price at which such principal amount
of Debt Securities may be purchased upon such exercise; (6) the date on which
the right to exercise the Debt Warrants shall commence and the date on which
such right shall expire (the "Debt Warrant Expiration Date"); (7) the form in
which the Debt Warrants represented by the Debt Warrant Certificates will be
issued and where the Debt Warrants represented by Debt Warrant Certificates may
be transferred and registered; and (8) any other terms of the Debt Warrants. The
applicable Prospectus Supplement will contain a summary of the United States
federal income tax, accounting and other consequences with respect to the Debt
Warrants.
If issued in definitive form, Debt Warrant Certificates will be
exchangeable for new Debt Warrant Certificates of authorized denominations at
the corporate trust office of the Debt Warrant Agent or any other office
indicated in the applicable Prospectus Supplement. Prior to the exercise of Debt
Warrants, holders of such Debt Warrants will not have any of the rights of
Holders of the Debt Securities purchasable upon such
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exercise and will not be entitled to payments of principal of (or premium, if
any) or interest, if any, on the Debt Securities purchasable upon such exercise.
EXERCISE OF DEBT WARRANTS
Each Debt Warrant will entitle the holder, upon payment of the exercise
price, if any, to purchase such principal amount of Debt Securities at such
exercise price as shall in each case be set forth in, or calculable from, the
applicable Prospectus Supplement. Debt Warrants will be exercisable (i) at any
time up to the close of business on the Debt Warrant Expiration Date set forth
in the applicable Prospectus Supplement or (ii) only at maturity. After the
close of business on the Expiration Date (or such later date to which such
Expiration Date may be extended by the Company), unexercised Debt Warrants will
become void.
Debt Warrants may be exercised by delivery to the Debt Warrant Agent of
payment as provided in the applicable Prospectus Supplement of the amount
required to purchase the Debt Securities purchasable upon such exercise together
with certain information set forth on the reverse side of the Debt Warrant
Certificate. Debt Warrants will be deemed to have been exercised upon receipt of
the exercise price, subject to the receipt, within five business days, of the
Debt Warrant Certificate evidencing such Debt Warrants. Upon receipt of such
payment and the Debt Warrant Certificate properly completed and duly exercised
at the corporate trust office of the Debt Warrant Agent or any other office
indicated in the applicable Prospectus Supplement, the Company will, as soon as
practicable, issue and deliver pursuant to the applicable Indenture the Debt
Securities purchasable upon such exercise. If fewer than all of the Debt
Warrants represented by such Debt Warrant Certificate are exercised, a new Debt
Warrant Certificate will be issued for the remaining amount of outstanding Debt
Warrants.
CURRENCY WARRANTS
The Company may issue, together with Debt Securities, Debt Warrants, Index
Warrants or Interest Rate Warrants, or separately, Currency Warrants (a) in the
form of Currency Put Warrants, entitling the owners thereof to receive from the
Company the Currency Warrant Cash Settlement Value (as defined in the applicable
Prospectus Supplement) of the right to sell a specified amount of one currency
(whether U.S. dollars or a foreign currency or foreign currency unit) (a "Base
Currency") for a specified amount of a different currency (whether U.S. dollars
or a foreign currency or foreign currency unit) (a "Reference Currency"), (b) in
the form of Currency Call Warrants, entitling the owners thereof to receive from
the Company the Currency Warrant Cash Settlement Value of the right to purchase
a specified amount of a Base Currency for a specified amount of a Reference
Currency, or (c) in such other form as specified in the applicable Prospectus
Supplement. The applicable Prospectus Supplement will set forth the formula
pursuant to which the Currency Warrant Cash Settlement Value will be determined,
including any multipliers, if applicable.
The applicable Prospectus Supplement will describe the following terms of
the Currency Warrants being offered thereby, the Currency Warrant Agreement
relating to such Currency Warrants and the Currency Warrant Certificates
representing such Currency Warrants: (1) the title and number of such Currency
Warrants offered; (2) the aggregate amount of such Currency Warrants; (3) the
initial offering price of such Currency Warrants; (4) the exercise price, if
any; (5) the currency or currency unit in which the initial offering price, the
exercise price, if any, and the Currency Warrant Cash Settlement Value of such
Currency Warrants is payable; (6) the Base Currency and the Reference Currency
for such Currency Warrants; (7) whether such Currency Warrants shall be Currency
Put Warrants, Currency Call Warrants or otherwise; (8) the formula for
determining the Currency Warrant Cash Settlement Value, if applicable, of each
Currency Warrant; (9) whether and under what circumstances a minimum and/or
maximum expiration value is applicable upon the expiration or exercise of such
Currency Warrants; (10) the effect or effects, if any, of the occurrence of a
Market Disruption Event or Force Majeure Event (each as defined in the
applicable Prospectus Supplement); (11) the date on which the right to exercise
such Currency Warrants shall commence and the date (the "Currency Warrant
Expiration Date") on which such right shall expire; (12) any minimum number of
Currency Warrants which must be exercised at any one time, other than upon
automatic exercise; (13) the maximum number, if any, of such Currency Warrants
that may, subject to
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election by the Company, be exercised by all owners (or by any person or entity)
on any day; (14) any provisions for the automatic exercise of such Currency
Warrants other than at expiration; (15) whether and under what circumstances
such Currency Warrants may be canceled by the Company prior to their expiration
date; (16) any other procedures and conditions relating to the exercise of such
Currency Warrants; (17) the identity of the Currency Warrant Agent; (18) any
national securities exchange on which such Currency Warrants will be listed;
(19) provisions, if any, for issuing such Currency Warrants in certificated
form; (20) if such Currency Warrants are not issued in book-entry form, the
place or places at which payments in respect of such Currency Warrants are to be
made by the Company; (21) if applicable, a discussion of certain United States
federal income tax, accounting or other special considerations applicable
thereto; and (22) any other terms of the Currency Warrants.
Other important information concerning Currency Warrants is set forth below
under "Certain Items Applicable to Currency Warrants, Index Warrants and
Interest Rate Warrants."
INDEX WARRANTS
The Company may issue, together with Debt Securities, Debt Warrants,
Currency Warrants or Interest Rate Warrants, or separately, Index Warrants (a)
in the form of Index Put Warrants, entitling the owners thereof to receive from
the Company the Index Warrant Cash Settlement Value (as defined in the
applicable Prospectus Supplement) in cash, which amount will be determined by
reference to the amount, if any, by which the Fixed Amount (as defined in the
applicable Prospectus Supplement) at the time of exercise exceeds the Index
Value (as defined in the applicable Prospectus Supplement), (b) in the form of
Index Call Warrants, entitling the owners thereof to receive from the Company
the Index Warrant Cash Settlement Value in cash, which amount will be determined
by reference to the amount, if any, by which the Index Value at the time of
exercise exceeds the Fixed Amount, (c) in the form of Index Spread Warrants,
entitling the owners thereof to receive from the Company the Index Warrant Cash
Settlement Value in cash, which amount will be determined by reference to the
amount, if any, by which the Reference Index Value (as defined in the applicable
Prospectus Supplement) at the time of exercise exceeds the Base Index Value (as
defined in the applicable Prospectus Supplement) or (d) in such other form as
shall be specified in the applicable Prospectus Supplement. The applicable
Prospectus Supplement will set forth the formula pursuant to which the Index
Warrant Cash Settlement Value will be determined, including any multipliers, if
applicable.
The applicable Prospectus Supplement will describe the following terms of
the Index Warrants being offered thereby, the Index Warrant Agreement relating
to such Index Warrants and the Index Warrant Certificate representing such Index
Warrants: (1) the title and number of such Index Warrants offered; (2) the
aggregate amount of such Index Warrants; (3) the initial offering price of such
Index Warrants; (4) the exercise price, if any; (5) the currency or currency
unit in which the initial offering price, the exercise price, if any, and the
Index Warrant Cash Settlement Value of such Index Warrants is payable; (6) the
Index or Indices for such Index Warrants, which may be based on one or more U.S.
or foreign stocks, bonds, or other securities, one or more U.S. or foreign
interest rates, one or more currencies or currency units, or any combination of
the foregoing, and may be a preexisting U.S. or foreign index compiled and
published by a third party or an index based on one or more securities, interest
rates or currencies selected by the Company solely in connection with the
issuance of such Index Warrants, and certain information regarding such Index or
Indices and the underlying securities, interest rates or currencies (including,
to the extent possible, the policies of the publisher of the Index with respect
to additions, deletions and substitutions of such securities, interest rates or
currencies); (7) whether such Index Warrants shall be Index Put Warrants, Index
Call Warrants, Index Spread Warrants or otherwise; (8) the method of providing
for a substitute Index or Indices or otherwise determining the amount payable in
connection with the exercise of such Index Warrants if any Index changes or
ceases to be made available by its publisher, which determination will be made
by an independent expert; (9) the formula for determining the Index Warrant Cash
Settlement Value, if applicable, of each Index Warrant; (10) whether and under
what circumstances a minimum and/or maximum expiration value is applicable upon
the expiration or exercise of such Index Warrants; (11) the effect or effects,
if any, of the occurrence of a Market Disruption Event or Force Majeure Event
(as defined in the applicable Prospectus
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Supplement); (12) the date on which the right to exercise such Index Warrants
shall commence and the date (the "Index Warrant Expiration Date") on which such
right shall expire; (13) any minimum number of Index Warrants which must be
exercised at any one time, other than upon automatic exercise; (14) the maximum
number, if any, of such Index Warrants that may, subject to election by the
Company, be exercised by all owners (or by any person or entity) on any day;
(15) any provisions for the automatic exercise of such Index Warrants other than
at expiration; (16) whether and under what circumstances such Index Warrants may
be canceled by the Company prior to their expiration date; (17) any provisions
permitting a Holder to condition any notice of exercise on the absence of
certain specified changes in the Index Value, the Base Index Value or the
Reference Index Value after the date of exercise; (18) any other procedures and
conditions relating to the exercise of such Index Warrants; (19) the identity of
the Index Warrant Agent; (20) any national securities exchange on which such
Index Warrants will be listed; (21) provisions, if any, for issuing such Index
Warrants in certificated form; (22) if such Index Warrants are not issued in
book-entry form, the place or places at which payments in respect of such Index
Warrants are to be made by the Company; (23) if applicable, a discussion of
certain United States federal income tax, accounting or other special
considerations applicable thereto; and (24) any other terms of such Index
Warrants.
Other important information concerning Index Warrants is set forth below
under "Certain Items Applicable to Currency Warrants, Index Warrants and
Interest Rate Warrants."
INTEREST RATE WARRANTS
The Company may issue, together with Debt Securities, Debt Warrants,
Currency Warrants or Index Warrants, or separately, Interest Rate Warrants (a)
in the form of Interest Rate Put Warrants, entitling the owners thereof to
receive from the Company the Interest Rate Warrant Cash Settlement Value (as
defined in the applicable Prospectus Supplement) in cash, which amount will be
determined by reference to the amount, if any, by which the Spot Amount (as
defined in the applicable Prospectus Supplement) is less than the Strike Amount
(as defined in the applicable Prospectus Supplement) on the applicable valuation
date following exercise, (b) in the form of Interest Rate Call Warrants,
entitling the owners thereof to receive from the Company the Interest Rate
Warrant Cash Settlement Value in cash, which amount will be determined by
reference to the amount, if any, by which the Spot Amount on the applicable
valuation date following exercise exceeds the Strike Amount or (c) in such other
form as shall be specified in the applicable Prospectus Supplement. The
applicable Prospectus Supplement will set forth the formula pursuant to which
the Interest Rate Warrant Cash Settlement Value will be determined, including
any multipliers, if applicable. The Strike Amount may either be a fixed yield,
price or rate of a Government Debt Instrument, a Financial Institution Rate or
any combination of Government Debt Instrument and/or Financial Institution Rates
or a yield, price or rate that varies during the term of the Interest Rate
Warrants in accordance with a schedule or formula. The Government Debt
Instrument will be one or more instruments specified in the applicable
Prospectus Supplement issued either by the United States government or by a
foreign government. The Financial Institution Rate will be one or more interest
rates or interest rate swap rates established from time to time by
one or more financial institutions specified in the applicable Prospectus
Supplement.
The applicable Prospectus Supplement will describe the following terms of
the Interest Rate Warrants being offered thereby, the Interest Rate Warrant
Agreement relating to such Interest Rate Warrants and the Interest Rate Warrant
Certificate representing such Interest Rate Warrants: (1) the title and number
of such Interest Rate Warrants offered, (2) the aggregate amount of such
Interest Rate Warrants; (3) the initial offering price of such Interest Rate
Warrants; (4) the exercise price, if any; (5) the currency or currency unit in
which the initial offering price, the exercise price, if any, and the Interest
Rate Warrant Cash Settlement Value of such Interest Rate Warrants is payable;
(6) the Government Debt Instrument (which may be one or more debt instruments
issued either by the United States government or by a foreign government), the
Financial Institution Rate (which may be one or more interest rates or interest
rate swap rates established from time to time by one or more specified financial
institutions) or the other yield, price or rate utilized for such Interest Rate
Warrants, and certain information regarding such Government Debt Instrument or
Financial Institution Rate; (7) whether such Interest Rate Warrants shall be
Interest Rate Put Warrants, Interest Rate Call Warrants or otherwise; (8) the
Strike Amount, the method of determining the Spot
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Amount and the method of expressing movements in the yield or closing price of
the Government Debt Instrument or in the level of the Financial Institution Rate
as a cash amount in the currency in which the Interest Rate Warrant Cash
Settlement Value of such Warrants is payable; (9) the formula for determining
the Interest Rate Warrant Cash Settlement Value, if applicable, of each Interest
Rate Warrant; (10) whether and under what circumstances a minimum and/or maximum
expiration value is applicable upon the expiration or exercise of such Interest
Rate Warrants (as defined in the applicable Prospectus Supplement); (11) the
effect or effects, if any, of the occurrence of a Market Disruption Event or
Force Majeure Event (as defined in the applicable Prospectus Supplement); (12)
the date on which the right to exercise such Interest Rate Warrants shall
commence and the date (the "Interest Rate Warrant Expiration Date") on which
such right shall expire; (13) any minimum number of Interest Rate Warrants which
must be exercised at any one time, other than upon automatic exercise; (14) the
maximum number, if any, of such Interest Rate Warrants that may, subject to
election by the Company, be exercised by all owners (or by any person or entity)
on any day; (15) any provisions for the automatic exercise of such Interest Rate
Warrants other than at expiration; (16) whether and under what circumstances
such Interest Rate Warrants may be canceled by the Company prior to their
expiration date; (17) any provisions permitting a Holder to condition any notice
of exercise on the absence of certain specified changes in the Spot Amount after
the date of exercise; (18) any other procedures and conditions relating to the
exercise of such Interest Rate Warrants; (19) the identity of the Interest Rate
Warrant Agent; (20) any national securities exchange on which such Interest Rate
Warrants will be listed; (21) provisions, if any, for issuing such Interest Rate
Warrants in certified form; (22) if such Interest Rate Warrants are not issued
in book-entry form, the place or places at which payments in respect of such
Interest Rate Warrants are to be made by the Company; (23) if applicable, a
discussion of certain United States federal income tax, accounting or other
special considerations applicable thereto; and (24) any other terms of such
Interest Rate Warrants.
Other important information concerning Interest Rate Warrants is set forth
below under "Certain Items Applicable to Currency Warrants, Index Warrants and
Interest Rate Warrants."
CERTAIN ITEMS APPLICABLE TO CURRENCY WARRANTS, INDEX WARRANTS AND INTEREST RATE
WARRANTS
Exercise of Warrants
Unless otherwise specified in the applicable Prospectus Supplement, (a)
each Currency Warrant, Index Warrant and Interest Rate Warrant will entitle the
holder, upon payment of the exercise price, if any, to the applicable Cash
Settlement Value of such Warrant, on the applicable Exercise Date, in each case
as such terms will further be defined in the applicable Prospectus Supplement
(Section 1.1 of the applicable Warrant Agreement) and (b) if not exercised prior
to 1:30 p.m., New York City time on the applicable Warrant Expiration Date, the
Warrants will be deemed automatically exercised on such Warrant Expiration Date
(Section 2.3). As described below, Currency Warrants, Index Warrants and
Interest Rate Warrants may also be deemed to be automatically exercised if they
are delisted. Procedures for exercise of the Currency Warrants, Index Warrants
and Interest Rate Warrants will be set out in the applicable Prospectus
Supplement.
Market Disruption and Force Majeure Events
If so specified in the applicable Prospectus Supplement, following the
occurrence of a Market Disruption Event or Force Majeure Event (as each term
shall be defined therein), the Cash Settlement Value of a Currency Warrant, an
Index Warrant or an Interest Rate Warrant may be determined on a different basis
than under normal exercise of a Warrant or the determination of the applicable
Cash Settlement Value. In addition, if so specified in the applicable Prospectus
Supplement, Currency Warrants, Index Warrants and Interest Rate Warrants may, in
certain circumstances, be canceled by the Company prior to their expiration date
and the holders thereof will be entitled to receive only the applicable
Cancellation Amount. The Cancellation Amount may be either a fixed amount or an
amount that varies during the term of the Warrants in accordance with a schedule
or formula.
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Settlement Currency
Currency Warrants, Index Warrants and Interest Rate Warrants will be
settled only in U.S. dollars (unless settlement in a foreign currency is
specified in the applicable Prospectus Supplement and is permissible under
securities exchange rules approved by the SEC) and accordingly will not require
or entitle an owner to sell, deliver, purchase or take delivery of the currency,
security or other instrument underlying such Warrants. If any of the Currency
Warrants, Index Warrants or Interest Rate Warrants are sold for, or if the
exercise price, if any, is payable in, foreign currencies or foreign currency
units or if the amount payable by the Company in respect of any series of
Currency Warrants, Index Warrants or Interest Rate Warrants is payable in
foreign currencies or foreign currency units, the restrictions, elections, tax
consequences, specific terms and other information with respect to such issue of
Warrants and such currencies or currency units will be set forth in the
applicable Prospectus Supplement.
Listing
Unless otherwise specified in the applicable Prospectus Supplement, each
issue of Currency Warrants, Index Warrants and Interest Rate Warrants will be
listed on a national securities exchange, as specified in the applicable
Prospectus Supplement, subject only to official notice of issuance, as a
pre-condition to the sale of any such Warrants. It may be necessary in certain
circumstances for such national securities exchange to obtain the approval of
the SEC in connection with any such listing. Unless otherwise specified in the
applicable Prospectus Supplement, in the event that such Warrants are delisted
from, or permanently suspended from trading on, such exchange, and, at or prior
to such delisting or suspension, such Warrants shall not have been listed on
another national securities exchange or traded pursuant to the rules of another
self-regulatory organization, any such Warrants not previously exercised will be
deemed automatically exercised on the date such delisting or permanent trading
suspension becomes effective (Section 2.3 of the applicable Warrant Agreement).
The applicable Cash Settlement Value to be paid in such event will be as set
forth in the applicable Prospectus Supplement. The Company will notify holders
of such Warrants as soon as practicable of such delisting or permanent trading
suspension. The applicable Warrant Agreement will contain a covenant of the
Company not to seek delisting of such Warrants from, or permanent suspension of
their trading on, such exchange (Section 2.4 of the Currency Warrant Agreement
and the Interest Rate Warrant Agreement and Section 2.5 of the Index Warrant
Agreement).
PLAN OF DISTRIBUTION
The Company may sell Securities to one or more underwriters for public
offering and sale by them or may sell Securities to investors directly or
through agents which solicit or receive offers on behalf of the Company or
through dealers or through a combination of any such methods of sale. Any such
underwriter or agent involved in the offer and sale of the Offered Securities
will be named in the applicable Prospectus Supplement.
Underwriters may offer and sell the Offered Securities at a fixed price or
prices, which may be changed, or 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. The Company also may offer and sell the Offered Securities in
exchange for one or more of its outstanding issues of debt or convertible debt
securities. The Company may, from time to time, authorize agents acting on a
best efforts basis as agents of the Company to solicit or receive offers to
purchase the Offered Securities upon the terms and conditions as are set forth
in the applicable Prospectus Supplement. In connection with the sale of Offered
Securities, underwriters or agents may be deemed to have received compensation
from the Company in the form of underwriting discounts or commissions and may
also receive commissions from purchasers of Offered Securities for whom they may
act as agents. Underwriters may sell Offered Securities to or through dealers,
and such dealers may receive compensation in the form of discounts, concessions
or commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agent.
Any compensation paid by the Company to underwriters or agents in
connection with the offering of Offered Securities, and any discounts,
concessions or commissions allowed by underwriters to participating
27
<PAGE> 67
dealers, will be set forth in the applicable Prospectus Supplement.
Underwriters, dealers and agents participating in a distribution of the Offered
Securities (including agents only soliciting or receiving offers to purchase
Offered Securities on behalf of the Company) may be deemed to be underwriters,
and any discounts and commissions received by them and any profit realized by
them on resale of the Offered Securities may be deemed to be underwriting
discounts and commissions, under the Act. Underwriters, dealers and agents may
be entitled, under agreements entered into with the Company, to indemnification
against and contribution toward certain civil liabilities, including liabilities
under the Act. The Company may agree to reimburse underwriters or agents for
certain expenses incurred in connection with the distribution of the Offered
Securities.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize agents or dealers acting as the Company's agents to solicit offers by
certain institutions to purchase Offered Securities from the Company at the
public offering price set forth in such Prospectus Supplement pursuant to
delayed delivery contracts ("Contracts") providing for payment and delivery on
the date or dates stated in such Prospectus Supplement. Each Contract will be
for an amount not less than, and the aggregate principal amount of Offered
Securities sold pursuant to Contracts shall be not less nor more than, the
respective amounts stated in such Prospectus Supplement. Institutions with whom
Contracts, when authorized, may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions, and other institutions but will in all cases be subject
to the approval of the Company. Contracts will not be subject to any conditions
except (i) the purchase by an institution of the Offered Securities covered by
its Contracts shall not at the time of delivery be prohibited under the laws of
any jurisdiction in the United States to which such institution is subject, and
(ii) if the Offered Securities are being sold to underwriters, the Company shall
have sold to such underwriters the total principal amount of the Offered
Securities less the principal amount thereof covered by Contracts.
Each underwriter, dealer and agent participating in the distribution of any
Offered Securities which are issuable as Bearer Securities will agree that it
will not offer, sell or deliver, directly or indirectly, Bearer Securities in
the United States or to United States persons (other than qualifying financial
institutions), in connection with the original issuance of the Offered
Securities. See "THE DEBT SECURITIES -- Limitations on Issuance of Bearer
Securities."
Offers of the Securities may not be made in Great Britain except to persons
whose ordinary business it is to buy or sell shares or debentures, whether as
principal or agent, and this Prospectus and any Prospectus Supplement or any
other offering material relating to the Securities may not be distributed in or
from Great Britain except to persons whose business involves the acquisition and
disposal, or the holding, of securities, whether as principal or as agent.
Certain of the underwriters, dealers or agents and their associates may be
customers of, engage in transactions with, and perform services for, the Company
in the ordinary course of business.
Each offering of the Offered Securities will be conducted in compliance
with any applicable requirements of Schedule E to the By-Laws of the National
Association of Securities Dealers, Inc. This Prospectus may be used by an
affiliate of the Company in connection with offers and sales related to market
making activities. Any such affiliate may act as principal or agent in any such
transactions. Such sales will be made at prices related to the prevailing market
prices at the time of sale.
EXPERTS
The Company only and consolidated financial statements of the Corporation
as of December 31, 1993 and 1992 and for each of the years in the three-year
period ended December 31, 1993 incorporated in this Prospectus by reference to
the Company's Annual Report on Form 10-K for the year ended December 31, 1993,
have been so incorporated in reliance on the report of Price Waterhouse,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
28
<PAGE> 68
LEGAL OPINION
The legality of the Securities offered hereby will be passed upon for the
Company by Robert B. Adams, Senior Vice President and Deputy General Counsel of
the Company and the Bank. As of September 30, 1994, Mr. Adams was the beneficial
owner of or had options to purchase less than 0.1% of the outstanding shares of
Common Stock of the Company.
29
<PAGE> 69
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NO DEALER, SALESMAN OR ANY OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IN
CONNECTION WITH ANY OFFERING OF THE NOTES REFERRED TO IN THIS PROSPECTUS
SUPPLEMENT (INCLUDING ANY PRICING SUPPLEMENT) AND THE ACCOMPANYING PROSPECTUS.
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR THE AGENTS. THIS PROSPECTUS SUPPLEMENT
(INCLUDING ANY PRICING SUPPLEMENT) AND THE ACCOMPANYING PROSPECTUS DO NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM,
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT (INCLUDING ANY PRICING SUPPLEMENT) AND THE ACCOMPANYING
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT (INCLUDING ANY PRICING
SUPPLEMENT) OR THE ACCOMPANYING PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY
SINCE THE DATE HEREOF.
------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
<S> <C>
Important Information.................. S-2
Documents Incorporated by Reference.... S-2
Description of Notes................... S-3
Certain Investment Considerations...... S-26
Foreign Currency Risks................. S-26
United States Taxation................. S-30
Plan of Distribution of Notes.......... S-32
General Information.................... S-34
Experts................................ S-35
Legal Opinions......................... S-35
Financial Data......................... S-36
PROSPECTUS
Available Information.................. 2
Incorporation of Certain Documents by
Reference............................ 2
The Chase Manhattan Corporation........ 3
Regulatory Developments................ 4
Use of Proceeds........................ 4
Ratios of Earnings to Fixed Charges.... 4
Ratios of Earnings to Fixed Charges and
Preferred Stock Dividend
Requirements......................... 5
Description of Debt Securities......... 5
The Senior Securities.................. 11
The Subordinated Securities............ 14
Description of Preferred Stock......... 17
Description of Common Stock............ 21
Description of Warrants................ 22
Plan of Distribution................... 27
Experts................................ 28
Legal Opinion.......................... 29
</TABLE>
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- ------------------------------------------------------
- ------------------------------------------------------
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LOGO
U.S. $2,165,775,000
THE CHASE MANHATTAN
CORPORATION
SENIOR EURO
MEDIUM -TERM NOTES,
SERIES B
AND
SUBORDINATED EURO
MEDIUM -TERM NOTES,
SERIES B
---------------------------
PROSPECTUS SUPPLEMENT
---------------------------
ARRANGERS
---------
CHASE INVESTMENT BANK LIMITED
CHASE BANK A.G.
AGENTS
------
CHASE INVESTMENT BANK LIMITED
BEAR, STEARNS INTERNATIONAL LIMITED
CS FIRST BOSTON LIMITED
GOLDMAN SACHS INTERNATIONAL
LEHMAN BROTHERS
MERRILL LYNCH INTERNATIONAL LIMITED
SALOMON BROTHERS INTERNATIONAL LIMITED
MAY 2, 1995
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