<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 20, 1994
REGISTRATION STATEMENT NO. 33-49965
<TABLE>
<S> <C>
POST-EFFECTIVE AMENDMENT NO. 3 TO
REGISTRATION STATEMENT NO. 33-57104 POST-EFFECTIVE AMENDMENT NO. 2 TO
REGISTRATION STATEMENT NO. 33-32409
POST-EFFECTIVE AMENDMENT NO. 2 TO
REGISTRATION STATEMENT NO. 33-53306 POST-EFFECTIVE AMENDMENT NO. 2 TO
REGISTRATION STATEMENT NO. 33-13062
POST-EFFECTIVE AMENDMENT NO. 2 TO
REGISTRATION STATEMENT NO. 33-47105 POST-EFFECTIVE AMENDMENT NO. 2 TO
REGISTRATION STATEMENT NO. 2-98344
POST-EFFECTIVE AMENDMENT NO. 3 TO
REGISTRATION STATEMENT NO. 33-45228 POST-EFFECTIVE AMENDMENT NO. 2 TO
REGISTRATION STATEMENT NO. 33-4031
POST-EFFECTIVE AMENDMENT NO. 2 TO
REGISTRATION STATEMENT NO. 33-36164 POST-EFFECTIVE AMENDMENT NO. 2 TO
REGISTRATION STATEMENT NO. 33-12987
POST-EFFECTIVE AMENDMENT NO. 2 TO
REGISTRATION STATEMENT NO. 33-15230
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
POST-EFFECTIVE
AMENDMENT NO. 1
to
Form S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
------------------------------------
CHEMICAL BANKING CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 270 PARK AVENUE 13-2624428
(State or other jurisdiction NEW YORK, NEW YORK 10017 (I.R.S. Employer Identification
of incorporation or (212) 270-6000 No.)
organization) (Address, including zip code,
and
telephone number, including area
code,
of registrant's principal
executive offices)
</TABLE>
JOHN B. WYNNE, ESQ.
CHEMICAL BANKING CORPORATION
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(212) 270-7122
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES TO:
<TABLE>
<S> <C>
PETER J. TOBIN WILLIAM H. MCDAVID, ESQ.
EXECUTIVE VICE PRESIDENT GENERAL COUNSEL
CHEMICAL BANKING CORPORATION CHEMICAL BANKING CORPORATION
270 PARK AVENUE 270 PARK AVENUE
NEW YORK, NEW YORK 10017 NEW YORK, NEW YORK 10017
JEREMIAH L. THOMAS, ESQ. C. ALLEN PARKER, ESQ.
SIMPSON THACHER & BARTLETT CRAVATH, SWAINE & MOORE
425 LEXINGTON AVENUE WORLDWIDE PLAZA
NEW YORK, NEW YORK 10017 825 EIGHTH AVENUE
NEW YORK, NEW YORK 10019
</TABLE>
------------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC: FROM
TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT AS
DETERMINED BY MARKET CONDITIONS.
------------------------------------
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING
BOX. / /
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON
A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND
OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING BOX. /X/
------------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
EXPLANATORY NOTE
The prospectus filed with this Post-Effective Amendment contains a form of
market maker prospectus intended for use by direct or indirect wholly-owned
subsidiaries of Chemical Banking Corporation, including Chemical Securities
Inc., in connection with offers and sales related to secondary market
transactions in debt securities that have been previously registered by Chemical
Banking Corporation under the Securities Act of 1933 pursuant to the
above-referenced registration statements on file with the Securities and
Exchange Commission and in certain debt securities that are initially offered
and sold by or on behalf of Chemical Banking Corporation after the effective
date of this Post-Effective Amendment. The market maker prospectus is in
addition to, and not in substitution for, the prospectuses relating to the
referenced registration statements currently on file with the Securities and
Exchange Commission.
<PAGE> 3
SUBJECT TO COMPLETION, DATED JANUARY 20, 1994
PROSPECTUS
CHEMICAL BANKING CORPORATION
DEBT SECURITIES
WARRANTS
Chemical Banking Corporation (the "Company") may offer from time to time in
one or more series its debt securities (the "CBC Debt Securities"), which may be
either senior (the "CBC Senior Securities") or subordinated (the "CBC
Subordinated Securities").
In connection with the merger of Manufacturers Hanover Corporation ("MHC")
with and into the Company on December 31, 1991, the Company assumed the
obligations of MHC with respect to certain senior (the "MHC Senior Securities")
and certain subordinated (the "MHC Subordinated Securities" or the "Assumed MHC
Subordinated Indebtedness") series of debt securities (collectively, the "MHC
Debt Securities"). The CBC Senior Securities and the MHC Senior Securities are
collectively referred to as the "Senior Securities." The CBC Subordinated
Securities and the MHC Subordinated Securities are collectively referred to as
the "Subordinated Securities."
The Senior Securities will rank equally with all other unsubordinated and
unsecured indebtedness of the Company. The CBC Subordinated Securities will be
subordinate to all existing and future Senior Indebtedness of the Company (as
defined herein) and certain series of such CBC Subordinated Securities (as more
fully described herein) will be subordinate to Additional Senior Obligations (as
defined herein) under certain circumstances. The MHC Subordinated Securities are
subordinate to Senior Indebtedness, Additional Senior Obligations and all other
obligations of the Company to its creditors other than any obligation of the
Company as is by its terms expressly stated to be not superior in right of
payment to or to rank pari passu in right of payment with such Assumed MHC
Subordinated Indebtedness. The holders of the Subordinated Securities of any
series may be obligated at maturity to exchange such securities for Capital
Securities (as defined herein) of the Company. Unless otherwise indicated in
this Prospectus, the maturity of the Subordinated Securities will be subject to
acceleration only in the event of certain events of bankruptcy or reorganization
of the Company.
The Company may from time to time issue warrants (the "Securities Warrants")
to purchase CBC Debt Securities, preferred stock, par value $1 per share (the
"Preferred Stock"), or Common Stock, par value $1 per share (the "Common
Stock"), or currency warrants entitling the holder to receive the cash value in
U.S. dollars of the right to purchase or the right to sell foreign currencies or
composite currencies, including European Currency Units ("ECU") ("Currency
Warrants").
The following CBC Debt Securities are issued and outstanding as of September
30, 1993 with respect to which offers and sales relating to secondary market
transactions may be made by direct or indirect wholly-owned subsidiaries of the
Company:
<TABLE>
<S> <C>
$100,000,000 aggregate principal amount of 8.70%
Senior
Notes due May 15, 1994 $100,000,000 aggregate principal amount of 10 3/8%
Subordinated Notes Due 1999
$100,000,000 aggregate principal amount of Floating
Rate
Senior Notes Due 1994 $300,000,000 aggregate principal amount of 9 3/4%
Subordinated Capital Notes Due 1999
$100,000,000 Floating Rate Notes Due August 3, 1994
$150,000,000 aggregate principal amount of 10 1/8%
$100,000,000 aggregate principal amount of Floating Subordinated Capital Notes Due 2000
Rate Senior Notes Due December 1, 1994
$200,000,000 aggregate principal amount of 8 1/2%
$300,000,000 aggregate principal amount of Floating Subordinated Notes Due 2002
Rate Senior Notes Due February 15, 1995
$150,000,000 aggregate principal amount of 8 5/8%
$100,000,000 aggregate principal amount of Floating Subordinated Debentures Due 2002
Rate Senior Notes Due 1995
$100,000,000 aggregate principal amount of 8 1/8%
$100,000,000 aggregate principal amount of Floating Subordinated Notes Due June 15, 2002
Rate Senior Notes Due March 11, 1996
$200,000,000 aggregate principal amount of 7 5/8%
$150,000,000 aggregate principal amount of Floating Subordinated Notes Due 2003
Rate Senior Notes Due May 6, 1996
$200,000,000 aggregate principal amount of 7 1/8%
$100,000,000 aggregate principal amount of 7 3/8% Subordinated Debentures Due 2005
Senior Notes Due 1997
$1,682,300,000 aggregate principal amount of Senior
$300,000,000 aggregate principal amount of 6 5/8% Medium-Term Notes, Series C, Due from 9 months to
Senior Notes Due 1998 30 Years from Date of Issue
</TABLE>
The following MHC Debt Securities are issued and outstanding as of September
30, 1993 with respect to which offers and sales relating to secondary market
transactions may be made by direct or indirect wholly-owned subsidiaries of the
Company:
<TABLE>
<S> <C>
$100,000,000 aggregate principal amount of 9 1/2%
Notes
Due March 15, 1994 $150,000,000 aggregate principal amount of 8 1/2%
Subordinated Capital Notes Due February 15, 1999
$150,000,000 aggregate principal amount of 8 1/8%
Notes
Due January 15, 1997 $8,500,000 of Medium Term Notes
</TABLE>
------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------------------
This Prospectus has been prepared by Chemical Securities Inc. ("CSI") in
connection with offers and sales related to secondary market transactions in the
CBC Debt Securities and MHC Debt Securities (the "Debt Securities"). CSI 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.
THE DATE OF THIS PROSPECTUS IS JANUARY 20, 1994.
<PAGE> 4
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the offices of
the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, as well as at the following regional offices of the
Commission: Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511, and Seven World Trade Center, New York, New York
10048. Copies of such material can also be obtained from the Commission's Public
Reference Section, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington D.C. 20549, at prescribed rates. Certain of the Company's securities
are listed on the New York Stock Exchange, and reports, proxy material and other
information concerning the Company may be inspected at the offices of the New
York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company are
incorporated by reference in this Prospectus:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1992;
(b) The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1993, June 30, 1993 and September 30, 1993;
(c) The Company's Current Reports on Form 8-K dated January 21, 1993,
January 29, 1993, April 22, 1993, May 25, 1993, June 22, 1993, July 6,
1993, July 23, 1993, October 21, 1993 and November 19, 1993; and
(d) The descriptions of the Common Stock, the preferred stock and the
purchase rights for units of Junior Participating Preferred Stock set forth
in the Company's Registration Statements filed pursuant to Section 12 of
the Exchange Act and any amendment or report filed for the purpose of
updating those descriptions.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Debt Securities offered hereby shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents. 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.
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY
OF ANY OR ALL OF THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE, OTHER THAN
EXHIBITS TO SUCH DOCUMENTS (UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED
BY REFERENCE INTO SUCH DOCUMENTS). REQUESTS SHOULD BE DIRECTED TO: CHEMICAL
BANKING CORPORATION, 270 PARK AVENUE, NEW YORK, NEW YORK 10017, ATTENTION:
OFFICE OF THE SECRETARY, TELEPHONE (212) 270-4040.
Unless otherwise indicated, currency amounts in this Prospectus are stated
in United States dollars
("$", "dollars", "U.S. dollars" or "U.S.$").
2
<PAGE> 5
CHEMICAL BANKING CORPORATION
GENERAL
The Company is a bank holding company organized under the laws of Delaware
in 1968 and registered under the Bank Holding Company Act of 1956, as amended
(the "BHCA"). On December 31, 1991, Manufacturers Hanover Corporation was merged
with and into the Company (the "Merger"). The Company conducts domestic and
international financial services businesses through various bank and non-bank
subsidiaries. The principal bank subsidiaries of the Company are Chemical Bank,
a New York banking corporation ("Chemical Bank"), and the bank subsidiaries of
Texas Commerce Bancshares, Inc. ("Texas Commerce").
At September 30, 1993, the Company had total assets of approximately $149.4
billion and stockholders' equity of approximately $10.9 billion. The Company is
the third largest bank holding company in the United States in terms of total
assets. Chemical Bank is the third largest bank in the United States in terms of
deposits. At September 30, 1993, Chemical Bank had total assets of approximately
$111.3 billion, total loans of approximately $62.1 billion and total deposits of
approximately $74.1 billion. Texas Commerce is the second largest bank holding
company in Texas in terms of total deposits and, as of September 30, 1993, had
total assets of approximately $22.0 billion. The Company owns a 40% interest in
The CIT Group Holdings, Inc., which engages in diversified financial services
activities, including asset-based financing and leasing, sales financing and
factoring.
BUSINESS
The activities of the Company and its subsidiaries are internally
organized, for management information purposes, into three principal lines of
business. A brief description of each principal line of business is presented
below.
GLOBAL BANK
The Global Bank is organized into three principal management entities: (i)
Banking and Corporate Finance (domestic wholesale banking, corporate finance and
venture capital activities); (ii) Asia, Europe and Capital Markets
(international wholesale banking and corporate finance and the Company's trading
and treasury functions); and (iii) Developing Markets (trade finance, corporate
finance and advisory services in emerging markets).
REGIONAL BANK
The Regional Bank includes Retail Banking (consumer banking, commercial and
professional banking, retail card services and national consumer business);
Regional Relationship Banking (middle market, private banking and Chemical New
Jersey Holdings, Inc.); and Geoserve (cash management, funds transfer, trade,
corporate trust and securities services worldwide). The Company's Technology and
Operations Group is also managed within this organizational structure.
TEXAS COMMERCE
Texas Commerce is one of Texas' leading commercial banking institutions,
with over 120 locations statewide. At September 30, 1993, Texas Commerce ranked,
in terms of total deposits, first in the Houston and third in the Dallas/Fort
Worth banking markets and had total assets of approximately $22.0 billion.
3
<PAGE> 6
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The following are the consolidated ratios of earnings to fixed charges for
each of the periods indicated:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------- ----------------------------------------
1993 1992 1992 1991 1990 1989 1988
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings to Fixed Charges:
Excluding Interest on Deposits.......... 2.2 1.7 1.7 1.1 1.1 0.8 1.6
Including Interest on Deposits.......... 1.5 1.2 1.3 1.0 1.1 0.9 1.3
</TABLE>
For the year ended December 31, 1989, earnings were insufficient to cover
fixed charges, both excluding interest on deposits and including interest on
deposits, by $832 million.
For purposes of computing the ratios of earnings to fixed charges, earnings
represent net income from continuing operations plus total taxes based on income
and fixed charges. Fixed charges, excluding interest on deposits, include
interest expense (other than on deposits), one-third (the proportion deemed
representative of the interest factor) of rents, net of income from subleases,
and capitalized interest. Fixed charges, including interest on deposits, include
all interest expense, one-third (the proportion deemed representative of the
interest factor) of rents, net of income from subleases, and capitalized
interest.
4
<PAGE> 7
DESCRIPTION OF CBC DEBT SECURITIES
The statements under this caption are brief summaries of certain provisions
contained in the CBC Indentures (as defined below), do not purport to be
complete and are qualified in their entirety by reference to such CBC
Indentures, copies of which are exhibits to the Registration Statement of which
this Prospectus is a part. Numerical references in parentheses below are to
sections of the applicable Indenture. Wherever capitalized terms are used but
not defined herein, such terms shall have the meanings assigned to them in the
applicable CBC Indenture, it being intended that such referenced sections of the
CBC Indentures and such defined terms shall be incorporated herein by reference.
GENERAL
The CBC Senior Securities have been issued in series under an Indenture
dated as of December 1, 1989 between the Company and The Chase Manhattan Bank
(National Association), as Trustee (the "CBC Senior Trustee") (the "CBC Senior
Indenture"). The CBC Subordinated Securities have been issued under an Indenture
dated as of April 1, 1987, as amended and restated as of December 15, 1992,
between the Company and Morgan Guaranty Trust Company of New York, as Trustee
(the "CBC Subordinated Trustee") (the "CBC Subordinated Indenture"). The CBC
Debt Securities may be offered together with warrants to purchase the CBC Debt
Securities (the "Debt Warrants"), warrants to purchase shares of common stock,
par value $1 per share, of the Company (the "Common Stock Warrants") and
currency warrants entitling the holder to receive the cash value in U.S. dollars
of the right to purchase or the right to sell foreign currencies or composite
currencies, including European Currency Units ("ECU") (the "Currency Warrants").
The CBC Senior Indenture and the CBC Subordinated Indenture shall be
collectively referred to as the "CBC Indentures."
Neither CBC Indenture limits the amount of CBC Debt Securities which may be
issued thereunder and CBC Debt Securities may be issued under either of the CBC
Indentures up to the aggregate principal amount which may be authorized from
time to time by the Company. Since the Company is a holding company, the right
of the Company to participate in any distribution of assets of any subsidiary,
including Chemical Bank and Texas Commerce, upon such subsidiary's liquidation
or reorganization or otherwise (and thus the ability of holders of the CBC Debt
Securities to benefit indirectly from such distribution), is subject to the
prior claims of creditors of that subsidiary, except to the extent that the
Company may itself be recognized as a creditor of that subsidiary. Claims on the
Company's subsidiaries by creditors other than the Company include long-term
debt and substantial obligations with respect to deposit liabilities, Federal
funds purchased, securities sold under repurchase agreements, commercial paper
and other short-term borrowings.
Reference is made to the applicable description below for the following
terms and other information with respect to an issue of CBC Debt Securities,
including, where applicable: (i) the specific title of such CBC Debt Securities;
(ii) any limit on the aggregate principal amount or aggregate initial offering
price of such CBC Debt Securities; (iii) the purchase price of such CBC Debt
Securities (expressed as a percentage of the principal amount thereof); (iv) the
date or dates on which the principal of such CBC Debt Securities will be payable
and the provisions, if any, for extension of such payment date or dates (v) the
rate or rates per annum at which such CBC Debt Securities will bear interest, if
any, including the rate of interest, if any, applicable to overdue payments of
principal, or the method by which any such rate or rates will be determined and
the dates on which such interest, if any, will be payable, the record dates for
such interest payment dates and the date from which such interest, if any, will
accrue; (vi) the place or places where the principal of (and premium, if any)
and interest, if any, with respect to the CBC Debt Securities will be payable;
(vii) the terms of any mandatory or optional redemption provisions applicable to
the CBC Debt Securities; (viii) the terms of any sinking fund and analogous
provisions with respect to the CBC Debt Securities; (ix) authorized
denominations of the Debt Securities (if other than denominations of $1,000 and
integral multiples thereof); (x) if other than the currency of the United
States, the currency or currencies, including ECU and other composite
currencies, in which payment of the principal of (and premium, if any) and
interest, if any, on the CBC Debt Securities will be payable (which may be
different for principal, premium and interest); (xi) if the principal of (and
premium, if any) or interest, if any, on such CBC Debt Securities are to be
payable at the election of the Company or a holder thereof in one or more
currencies or composite currencies, the currencies or composite
5
<PAGE> 8
currencies in which payment may be made and the manner of making such election;
(xii) any provisions relating to the conversion or exchange of such CBC Debt
Securities; (xiii) the index, if any, with reference to which the amount of
payments of principal of (and premium, if any) or interest, if any, on such CBC
Debt Securities will be determined; (xiv) whether such CBC Debt Securities are
CBC Senior Securities or CBC Subordinated Securities, or include both; (xv) the
portion of the principal amount of such CBC Debt Securities which will be
payable upon declaration of acceleration of the maturity thereof, if other than
the principal amount thereof; (xvi) any Events of Default applicable to such CBC
Debt Securities (if not set forth in the applicable CBC Indenture); (xvii) if
such CBC Debt Securities are CBC Senior Securities, whether the provisions of
the CBC Senior Indenture relating to "Defeasance and Covenant Defeasance" will
be applicable to such series of CBC Senior Securities; (xviii) whether any of
such CBC Debt Securities are to be issuable in permanent global form; (xix) the
terms of any Currency Warrants or Securities Warrants being offered with such
CBC Debt Securities; and (xx) any other specific terms of such CBC Debt
Securities (including any covenants applicable to the CBC Debt Securities if not
set forth in the applicable CBC Indenture).
The CBC Debt Securities have been issued only in fully registered form
without coupons. The CBC Indentures also provide that CBC Debt Securities of a
series may be issued as permanent global CBC Debt Securities. See "Permanent
Global CBC Debt Securities" herein. No service charge will be made for any
transfer or exchange of the CBC Debt Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Unless a particular issue of CBC Debt Securities is represented by a
permanent global note, principal of (and premium, if any) and interest, if any,
on the CBC Debt Securities will be payable, and the CBC Debt Securities will be
transferable or exchangeable, at the corporate trust office of Chemical Bank in
New York City, provided that payment of interest on any CBC Debt Securities may
be made at the option of the Company by check mailed to the registered holders
of the CBC Debt Securities at their registered addresses. The Company will have
the right to require a holder of any CBC Debt Security, in connection with the
payment of the principal of (and premium, if any) and interest, if any, on such
CBC Debt Security, to certify information to the Company or, in the absence of
such certification, the Company will be entitled to rely on any legal
presumption to enable the Company to determine its duties and liabilities, if
any, to deduct or withhold taxes, assessments or governmental charges from such
payment. If the principal of (and premium, if any) or interest, if any, on any
CBC Debt Securities are to be payable in any currency other than U.S. dollars
or, at the election of the Company or a holder thereof, in one or more
currencies or composite currencies, or if any index is used to determine the
amount of payments of principal of (and premium, if any) or interest, if any, on
any series of CBC Debt Securities, any special Federal income tax, accounting
and other considerations applicable thereto, if any, are described below.
Some of the CBC Debt Securities may have been issued as original issue
discount CBC Debt Securities (bearing no interest or interest at a rate which at
the time of issuance is below market rates), to be sold at a discount below
their stated principal amount. If any such CBC Debt Securities have been so
issued, the Federal income tax, accounting and other special considerations
applicable to any such original issue discount CBC Debt Securities, if any, are
described below.
Neither CBC Indenture contains any restriction on the Company's ability to
enter into a highly leveraged transaction or any provision affording special
protection to holders of CBC Debt Securities in the event the Company engages in
a highly leveraged transaction. Further, neither CBC Indenture contains any
provisions that would provide protection to holders of CBC Debt Securities upon
a sudden and dramatic decline in the credit quality of the Company resulting
from a takeover, recapitalization or similar restructuring of the Company.
The CBC Debt Securities of certain series may be issued under the CBC
Indentures upon the exercise of Securities Warrants issued with other CBC Debt
Securities or upon exchange or conversion of exchangeable or convertible CBC
Debt Securities. The specific terms of any such Securities Warrants, the
specific terms of exchange or conversion of any such CBC Debt Securities and the
specific terms of the CBC Debt Securities
6
<PAGE> 9
issuable upon the exercise of any such Securities Warrants or upon any such
exchange or conversion, if any, are described below.
CBC SENIOR SECURITIES
The CBC Senior Securities are direct, unsecured obligations of the Company
and will constitute Senior Indebtedness issued on a parity with the other Senior
Indebtedness of the Company. As of September 30, 1993, Senior Indebtedness and
Additional Senior Obligations of the Company aggregated approximately $5.6
billion. See "Description of CBC Debt Securities--CBC Subordinated
Securities--Subordination" below.
Limitation on Disposition of Stock of Chemical Bank. The CBC Senior
Indenture contains a covenant by the Company that, so long as any of the CBC
Senior Securities are outstanding, but subject to the rights of the Company in
connection with its consolidation with or merger into another person or a sale
of the Company's assets, neither the Company nor any Intermediate Subsidiary
will sell, assign, transfer, grant a security interest in or otherwise dispose
of any shares of, or securities convertible into, or options, warrants or rights
to subscribe for or purchase shares of, Voting Stock of Chemical Bank (except to
the Company or an Intermediate Subsidiary), nor will the Company or any
Intermediate Subsidiary permit Chemical Bank to issue any shares of, or
securities convertible into, or options, warrants or rights to subscribe for or
purchase shares of, Voting Stock of Chemical Bank, nor will the Company permit
any Intermediate Subsidiary that owns any shares of, or securities convertible
into, or options, warrants or rights to subscribe for or purchase shares of,
Voting Stock of Chemical Bank to cease to be an Intermediate Subsidiary, unless
(i) any such sale, assignment, transfer, grant of a security interest or other
disposition is made for fair market value, as determined by the Board of
Directors of the Company or such Intermediate Subsidiary, and (ii) the Company
and any one or more Intermediate Subsidiaries will collectively own at least 80%
of the issued and outstanding Voting Stock of Chemical Bank (or any successor to
Chemical Bank) free and clear of any security interest after giving effect to
such transaction. The foregoing, however, shall not preclude Chemical Bank from
being consolidated with or merged into another domestic banking corporation, if
after such merger or consolidation the Company, or any successor thereto in a
permissible merger, and any one or more Intermediate Subsidiaries own or owns at
least 80% of the Voting Stock of the resulting bank and, giving effect to the
transaction, no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall have happened and be
continuing. An Intermediate Subsidiary is defined in the CBC Senior Indenture as
a Subsidiary (i) that is organized under the laws of any domestic jurisdiction
and (ii) of which all the shares of each class of capital stock issued and
outstanding, and all securities convertible into, and options, warrants and
rights to subscribe for or purchase shares of, such capital stock, are owned
directly by the Company, free and clear of any security interest. The limitation
on the disposition of the Voting Stock of Chemical Bank does not prevent
Chemical Bank from engaging in a sale of assets to the extent otherwise
permitted by the CBC Senior Indenture. (Section 1006).
Events of Default. The CBC Senior Indenture defines an Event of Default
with respect to any series of CBC Senior Securities as any one of the following
events: (i) default in the payment of interest on any CBC Senior Security of
that series and continuance of such default for 30 days; (ii) default in the
payment of principal of (or premium, if any, on) any CBC Senior Security of that
series at Maturity; (iii) default in the deposit of any sinking fund payment,
when and as due by the terms of a CBC Senior Security of that series, and
continuance of such default for 5 days; (iv) failure by the Company for 60 days
after due notice in performance of any other of the covenants or warranties in
the CBC Senior Indenture (other than a covenant or warranty included in the CBC
Senior Indenture solely for the benefit of a series of CBC Senior Securities
other than that series); (v)(A) failure by the Company to pay indebtedness for
money borrowed, including CBC Senior Securities of other series, in an aggregate
principal amount exceeding $25,000,000, at the later of final maturity or upon
the expiration of any applicable period of grace with respect to such principal
amount or (B) acceleration of the maturity of any of the Company's indebtedness
for money borrowed, including CBC Senior Securities of other series, in an
aggregate principal amount exceeding $25,000,000, if such failure to pay or
acceleration results from a default under the instrument giving rise to, or
securing, such indebtedness for money borrowed and is not rescinded or annulled
within 30 days after due notice, unless such default is
7
<PAGE> 10
contested in good faith by appropriate proceedings; (vi) certain events of
bankruptcy, insolvency or reorganization of the Company or Chemical Bank; and
(vii) any other Event of Default provided with respect to CBC Senior Securities
of that series. (Section 501).
If any Event of Default with respect to CBC Senior Securities of any series
at the time Outstanding occurs and is continuing, either the CBC Senior Trustee
or the holders of not less than 25% in principal amount of the Outstanding CBC
Senior Securities of that series may declare the principal amount (or, if the
CBC Senior Securities of that series are Original Issue Discount Securities,
such portion of the principal amount as may be specified in the terms of that
series) of all CBC Senior Securities of that series to be due and payable
immediately (provided that no such declaration is required upon certain events
of bankruptcy); but upon certain conditions such declaration may be annulled and
past defaults (except, unless theretofore cured, a default in payment of
principal of (or premium, if any) or interest on the CBC Senior Securities of
that series and certain other specified defaults) may be waived by the holders
of a majority in principal amount of the Outstanding CBC Senior Securities of
that series on behalf of the holders of all CBC Senior Securities of that
series. (Sections 502 and 513).
With respect to any series of CBC Senior Securities which are Original
Issue Discount Securities, reference is made below to the terms of such series
for the particular provisions relating to acceleration of the Maturity of a
portion of the principal amount of such Original Issue Discount Securities upon
the occurrence of an Event of Default and the continuation thereof.
The CBC Senior Indenture provides that the CBC Senior Trustee will, within
90 days after the occurrence of a default known to it with respect to CBC Senior
Securities of any series at the time Outstanding with respect to which it is
trustee, give to the holders of the Outstanding CBC Senior Securities of that
series notice of such default if uncured or not waived, provided that, except in
the case of default in the payment of principal of (or premium, if any) or
interest, if any, on any CBC Senior Security of that series, or in the payment
of any sinking fund installment which is provided for such series, the CBC
Senior Trustee will be protected in withholding such notice if the CBC Senior
Trustee in good faith determines that the withholding of such notice is in the
interest of the holders of the Outstanding CBC Senior Securities of such series
and, provided further, that such notice shall not be given until 60 days after
the occurrence of a default with respect to Outstanding CBC Senior Securities of
any series in the performance of a covenant in the CBC Senior Indenture other
than for the payment of the principal of (or premium, if any) or interest, if
any, on any CBC Senior Security of such series or the deposit of any sinking
fund payment with respect to the CBC Senior Securities of such series. The term
"default" with respect to any series of Outstanding CBC Senior Securities for
the purpose only of this provision means any event which is, or after notice or
lapse of time or both would become, an Event of Default with respect to CBC
Senior Securities of such series. (Section 602).
The CBC Senior Indenture provides that, subject to the duty of the CBC
Senior Trustee during default to act with the required standard of care, the CBC
Senior Trustee will not be under any obligation to exercise any of its rights or
powers under the CBC Senior Indenture at the request or direction of any of the
holders, unless such holders shall have offered to the CBC Senior Trustee
reasonable security or indemnity. (Section 603). The CBC Senior Indenture
provides that the holders of a majority in principal amount of Outstanding CBC
Senior Securities of any series may direct the time, method and place of
conducting any proceeding for any remedy available to the CBC Senior Trustee for
that series, or exercising any trust or other power conferred on such CBC Senior
Trustee, provided that such CBC Senior Trustee may decline to act if such
direction is contrary to law or the CBC Senior Indenture. (Section 512).
The CBC Senior Indenture includes a covenant that the Company will file
annually with the CBC Senior Trustee a certificate of no default, or specifying
any default that exists. (Section 1007).
Defeasance and Covenant Defeasance. The CBC Senior Indenture provides, if
such provision is made applicable to the CBC Senior Securities of any series
pursuant to Section 301 of the CBC Senior Indenture (which, if applicable, with
respect to a particular series of CBC Senior Securities will be indicated
below), that the Company may elect (i) to defease and be discharged from all of
its obligations with respect to such CBC Senior Securities then outstanding
(except for the obligations to register the transfer or exchange of such CBC
Senior Securities, to replace temporary or mutilated, destroyed, lost or stolen
CBC Senior Securities, to
8
<PAGE> 11
maintain an office or agency in respect of the CBC Senior Securities and to hold
moneys for payment in trust) ("defeasance") and/or (ii) to be released from its
obligations with respect to such CBC Senior Securities then outstanding under
Section 1005 and Section 1006 (and any other sections applicable to such CBC
Senior Securities that are determined pursuant to Section 301 to be subject to
covenant defeasance) and the consequences of the occurrence of an event of
default specified in Section 501(4) (insofar as it is with respect to Section
1005, Section 1006 or any other section applicable to such CBC Senior Securities
that is determined pursuant to Section 301 to be subject to covenant defeasance)
or Section 501(5) of the CBC Senior Indenture (Section 1005 containing the
covenant to pay taxes and other claims, Section 1006 containing the restrictions
described above under "Limitation on Disposition of Stock of Chemical Bank" and
Sections 501(4) and 501(5) containing the provisions described above under
"Events of Default" relating to covenant defaults and cross-defaults,
respectively) ("covenant defeasance"), in either case upon the deposit with the
CBC Senior Trustee (or other qualifying trustee), in trust for such purpose, of
money, and/or U.S. Government Obligations which through the payment of principal
and interest in accordance with their terms will provide money in an amount
sufficient, without reinvestment, to pay the principal of (and premium, if any)
and interest, if any, on such CBC Senior Securities to maturity or redemption,
as the case may be, and any mandatory sinking fund or analogous payments
thereon. As a condition to defeasance or covenant defeasance, the Company must
deliver to the CBC Senior Trustee an Opinion of Counsel (as specified in the CBC
Senior Indenture) to the effect that the holders of such CBC Senior Securities
will not recognize income, gain or loss for Federal income tax purposes as a
result of such defeasance or covenant defeasance and will be subject to Federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such defeasance or covenant defeasance had not
occurred. Such opinion, in the case of defeasance under clause (i) above, must
refer to and be based upon a ruling of the Internal Revenue Service issued to
the Company or published as a revenue ruling or upon a change in applicable
Federal income tax law, in any such case after the date of the CBC Senior
Indenture.
Under current Federal income tax law, defeasance would likely be treated as
a taxable exchange of such CBC Senior Securities for interests in the defeasance
trust. As a consequence, a holder would recognize gain or loss equal to the
difference between the holder's cost or other tax basis for such CBC Senior
Securities and the value of the holder's proportionate interest in the
defeasance trust, and thereafter would be required to include in income a
proportionate share of the income, gain or loss, as the case may be, of the
defeasance trust. Under current Federal income tax law, covenant defeasance
would ordinarily not be treated as a taxable exchange of such CBC Senior
Securities. Purchasers of such CBC Senior Securities should consult their own
advisors with respect to the tax consequences to them of such defeasance and
covenant defeasance, including the applicability and effect of tax laws other
than the Federal income tax law.
If the Company exercises its covenant defeasance option with respect to any
series of CBC Senior Securities, payment of such CBC Senior Securities may not
be accelerated by reference to the covenants relating to covenant defeasance
described above. The Company may exercise its defeasance option with respect to
such CBC Senior Securities notwithstanding its prior exercise of its covenant
defeasance option. If the Company exercises its defeasance option, payment of
such CBC Senior Securities may not be accelerated because of any Event of
Default. If the Company exercises its defeasance option or covenant defeasance
option and an acceleration were to occur, the realizable value at the
acceleration date of the money and U.S. Government Obligations in the defeasance
trust could be less than the principal and interest then due on such CBC Senior
Securities, in that the required deposit in the defeasance trust is based upon
scheduled cash flows rather than market value, which will vary depending upon
interest rates and other factors.
Modification of the Indenture. Modification and amendments of the CBC
Senior Indenture may be made by the Company and the CBC Senior Trustee with the
consent of the holders of not less than a majority in principal amount of each
series of Outstanding CBC Senior Securities affected thereby, by executing
supplemental indentures adding any provisions to or changing or eliminating any
of the provisions of the CBC Senior Indenture or modifying the rights of the
holders of Outstanding CBC Senior Securities of such series, except that no such
supplemental indenture may (i) change the Stated Maturity of any CBC Senior
Security of any series, or reduce the principal amount thereof (or premium, if
any, thereon), or reduce the rate of payment of interest thereon, or change
certain other provisions relating to the yield of the CBC Senior
9
<PAGE> 12
Securities or change the currency or currencies in which the same is payable;
(ii) reduce the aforesaid percentage of Outstanding CBC Senior Securities of any
series, the consent of the holders of which is required for any supplemental
indenture, or reduce the percentage of principal amount of Outstanding CBC
Senior Securities necessary for waiver of compliance with certain provisions of
the CBC Senior Indenture or for waiver of certain covenants and defaults; or
(iii) modify the provisions of the CBC Senior Indenture relating to modification
and amendment of the CBC Senior Indenture. The CBC Senior Indenture provides,
however, that each of the amendments and modifications listed in clauses (i)
through (iii) above may be made with the consent of the holder of each
Outstanding CBC Senior Security affected thereby. (Section 902).
Consolidation, Merger and Sale of Assets. The Company, without the consent
of the holders of any of the CBC Senior Securities under the CBC Senior
Indenture, may consolidate with or merge into any other person or transfer or
lease its assets substantially as an entirety to any person or may permit any
corporation to merge into the Company, provided that: (i) the successor is a
person organized under the laws of any domestic jurisdiction; (ii) the successor
person, if other than the Company, assumes the Company's obligations on the CBC
Senior Securities and under the CBC Senior Indenture; (iii) after giving effect
to the transaction, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have occurred and
be continuing; and (iv) certain other conditions are met. (Section 801).
Outstanding CBC Senior Securities. The CBC Senior Indenture provides that,
in determining whether the holders of the requisite principal amount of
Outstanding CBC Senior Securities have given any request, demand, authorization,
direction, notice, consent or waiver, (i) the portion of the principal amount of
an Original Issue Discount Security that shall be deemed to be Outstanding for
such purpose shall be that portion of the principal amount thereof that would be
due and payable as of the date of such determination upon acceleration of the
Maturity thereof; (ii) the portion of the principal amount of a CBC Senior
Security denominated in a foreign or composite currency or currencies that shall
be deemed to be Outstanding for such purpose shall be the U.S. dollar
equivalent, determined on the date of original issuance of such CBC Senior
Security, of the principal amount (or, in the case of an Original Issue Discount
Security, the U.S. dollar equivalent on the date of original issuance of such
CBC Senior Security of the amount determined as provided in (i) above) of such
CBC Senior Security; (iii) the portion of the principal amount of a CBC Senior
Security for which the amount of payments of principal of and any premium or
interest on such CBC Senior Security may be determined with reference to an
index that shall be deemed to be Outstanding for such purpose shall be
determined as of the date of original issuance of such CBC Senior Security; and
(iv) CBC Senior Securities owned by the Company, any of its Affiliates or any
other obligor upon the CBC Senior Securities shall not be deemed to be
Outstanding. (Section 101).
Set forth below are the principal terms of the CBC Senior Securities issued
and outstanding as of September 30, 1993, with respect to which offers and sales
relating to secondary market transactions may be made by direct or indirect
wholly-owned subsidiaries of the Company. Reference is made to the Glossary for
the definition of some of the terms used herein.
TERMS AND PROVISIONS OF 8.70% SENIOR NOTES DUE MAY 15, 1994
The 8.70% Senior Notes Due May 15, 1994 (the "8.70% 1994 Notes") are
limited to $100,000,000 aggregate principal amount and will mature on May 15,
1994. The 8.70% 1994 Notes are not redeemable prior to maturity and no sinking
fund is provided for the 8.70% 1994 Notes. The 8.70% 1994 Notes bear interest
from May 15, 1991, payable semiannually in arrears on May 15 and November 15 to
the persons in whose names the 8.70% 1994 Notes are registered at the close of
business on the first day of May or November preceding such May 15 or November
15.
TERMS AND PROVISIONS OF FLOATING RATE SENIOR NOTES DUE 1994
The Floating Rate Senior Notes Due 1994 (the "Floating Rate 1994 Notes")
are limited to $100,000,000 aggregate principal amount and will mature on June
16, 1994. The Floating Rate 1994 Notes are not redeemable prior to maturity and
no sinking fund is provided for the Floating Rate 1994 Notes. The Floating Rate
1994 Notes bear interest for each Interest Period at a rate per annum equal to
LIBOR, plus a margin of
10
<PAGE> 13
0.30%, from their original issue date, payable quarterly in arrears on the
Interest Payment Date in each March, June, September and December, commencing
with the Interest Payment Date in September 1992, and on the date of maturity.
Such interest is payable to the person in whose name such Floating Rate 1994
Note is registered at the close of business on the fifteenth calendar day prior
to such Interest Payment Date.
TERMS AND PROVISIONS OF FLOATING RATE NOTES DUE AUGUST 3, 1994
The Floating Rate Notes Due August 3, 1994 (the "Floating Rate August 3,
1994 Notes") are limited to $100,000,000 aggregate principal amount and will
mature on August 3, 1994. The Floating Rate August 3, 1994 Notes are not
redeemable prior to maturity and no sinking fund is provided for the Floating
Rate August 3, 1994 Notes. The Floating Rate August 3, 1994 Notes bear interest
for each Interest Period at a rate per annum equal to LIBOR, plus a margin of
0.25%, from their original issue date, payable quarterly in arrears on the
Interest Payment Date in each February, May, August and November, commencing
with the Interest Payment Date in November 1992, and on the date of maturity.
Such interest is payable to the person in whose name such Floating Rate August
3, 1994 Note is registered at the close of business on the fifteenth calendar
day prior to such Interest Payment Date.
TERMS AND PROVISIONS OF FLOATING RATE SENIOR NOTES DUE DECEMBER 1, 1994
The Floating Rate Senior Notes Due December 1, 1994 (the "Floating Rate
December 1, 1994 Notes") are limited to $100,000,000 aggregate principal amount
and will mature on December 1, 1994. The Floating Rate December 1, 1994 Notes
are not redeemable prior to maturity and no sinking fund is provided for the
Floating Rate December 1, 1994 Notes. The Floating Rate December 1, 1994 Notes
bear interest for each Interest Period at a rate per annum equal to LIBOR, plus
a margin of 0.40%, from their original issue date, payable quarterly in arrears
on the Interest Payment Date in each March, June, September, and December,
commencing with the Interest Payment Date in March 1993, and on the date of
maturity. Such interest is payable to the person in whose name such Floating
Rate December 1, 1994 Note is registered at the close of business on the
fifteenth calendar day prior to such Interest Payment Date.
TERMS AND PROVISIONS OF FLOATING RATE SENIOR NOTES DUE FEBRUARY 15, 1995
The Floating Rate Senior Notes Due February 15, 1995 (the "Floating Rate
February 15, 1995 Notes") are limited to $300,000,000 aggregate principal amount
and will mature on February 15, 1995. The Floating Rate February 15, 1995 Notes
are not redeemable prior to maturity and no sinking fund is provided for the
Floating Rate February 15, 1995 Notes. The Floating Rate February 15, 1995 Notes
bear interest for each Interest Period at a rate per annum equal to LIBOR, plus
a margin of 0.30%, from their original issue date, payable quarterly in arrears
on the Interest Payment Date in each February, May, August and November,
commencing with the Interest Payment Date in May 1993, and on the date of
maturity. Such interest is payable to the person in whose name such Floating
Rate February 15, 1995 Note is registered at the close of business on the
fifteenth calendar day prior to such Interest Payment Date.
TERMS AND PROVISIONS OF FLOATING RATE SENIOR NOTES DUE 1995
The Floating Rate Senior Notes Due 1995 (the "Floating Rate 1995 Notes")
are limited to $100,000,000 aggregate principal amount and will mature on June
8, 1995. The Floating Rate 1995 Notes are not redeemable prior to maturity and
no sinking fund is provided for the Floating Rate 1995 Notes. The Floating Rate
1995 Notes bear interest for each Interest Period at a rate per annum equal to
LIBOR, plus a margin of 0.35%, from their original issue date, payable quarterly
in arrears on the Interest Payment Date in each March, June, September, and
December, commencing with the Interest Payment Date in September 1992, and on
the date of maturity. Such interest is payable to the person in whose name such
Floating Rate 1995 Note is registered at the close of business on the fifteenth
calendar day prior to such Interest Payment Date.
11
<PAGE> 14
TERMS AND PROVISIONS OF FLOATING RATE SENIOR NOTES DUE MARCH 11, 1996
The Floating Rate Senior Notes Due March 11, 1996 (the "Floating Rate March
11, 1996 Notes") are limited to $100,000,000 aggregate principal amount and will
mature on March 11, 1996. The Floating Rate March 11, 1996 Notes are not
redeemable prior to maturity and no sinking fund is provided for the Floating
Rate March 11, 1996 Notes. The Floating Rate March 11, 1996 Notes bear interest
for each Interest Period at a rate per annum equal to LIBOR, plus a margin of
0.50% (but in no event shall the interest rate for any Interest Period be more
than 7.00% per annum), from their original issue date, payable quarterly in
arrears on the Interest Payment Date in each March, June, September, and
December, commencing with the Interest Payment Date in June 1993, and on the
date of maturity. Such interest is payable to the person in whose name such
Floating Rate March 11, 1996 Note is registered at the close of business on the
fifteenth calendar day prior to such Interest Payment Date.
TERMS AND PROVISIONS OF FLOATING RATE SENIOR NOTES DUE MAY 6, 1996
The Floating Rate Senior Notes Due May 6, 1996 (the "Floating Rate May 6,
1996 Notes") are limited to $150,000,000 aggregate principal amount and will
mature on May 6, 1996. The Floating Rate May 6, 1996 Notes may not be redeemed
prior to the Interest Payment Date occurring on May 18, 1994. The Floating Rate
May 6, 1996 Notes may be redeemed on any Interest Payment Date occurring on or
after May 18, 1994 at the option of the Company, in whole or in part, upon not
less than 30 nor more than 60 days' notice, at 100% of the principal amount
thereof, plus accrued and unpaid interest to the date of redemption. No sinking
fund is provided for the Floating Rate May 6, 1996 Notes. The Floating Rate May
6, 1996 Notes bear interest for each Interest Period at a rate per annum equal
to LIBOR, plus a margin of 0.25%, from their original issue date, payable
quarterly in arrears on the Interest Payment Date in each February, May, August
and November, commencing August 18, 1993, and on the date of maturity. Such
interest is payable to the person in whose name such Floating Rate May 6, 1996
Note is registered at the close of business on the fifteenth calendar day prior
to such Interest Payment Date.
TERMS AND PROVISIONS OF 7 3/8% SENIOR NOTES DUE 1997
The 7 3/8% Senior Notes Due 1997 (the "7 3/8% 1997 Notes") are limited to
$100,000,000 aggregate principal amount and will mature on June 15, 1997. The
7 3/8% 1997 Notes are not redeemable prior to maturity and no sinking fund is
provided for the 7 3/8% 1997 Notes. The 7 3/8% 1997 Notes bear interest from May
26, 1992, payable semiannually in arrears on June 15 and December 15 to the
persons in whose names the 7 3/8% 1997 Notes are registered at the close of
business on the first day of June or December preceding such June 15 or December
15.
TERMS AND PROVISIONS OF 6 5/8% SENIOR NOTES DUE 1998
The 6 5/8% Senior Notes Due 1998 (the "6 5/8% 1998 Notes") are limited to
$300,000,000 aggregate principal amount and will mature on January 15, 1998. The
6 5/8% 1998 Notes are not redeemable prior to maturity and no sinking fund is
provided for the 6 5/8% 1998 Notes. The 6 5/8% 1998 Notes bear interest from
January 19, 1993, payable semiannually in arrears on January 15 and July 15 to
the persons in whose names the 6 5/8% 1998 Notes are registered at the close of
business on the first day of January or July preceding such January 15 or July
15.
12
<PAGE> 15
TERMS AND PROVISIONS OF SENIOR MEDIUM-TERM NOTES, SERIES C
Set forth below is a table indicating the issuance date and the maturities
of the $1,682,300,000 aggregate principal amount of Senior Medium-Term Notes,
Series C (the "Senior Medium Term Notes") issued and outstanding as of September
30, 1993. The Senior Medium-Term Notes are not subject to any sinking fund and
are not redeemable prior to their stated maturity. The Senior Medium-Term Notes
have either (a) fixed interest rates or (b) floating interest rates which are
either reset daily, monthly, quarterly, semiannually or annually based on the CD
Rate, Commercial Paper Rate, the Federal Funds Effective Rate, the Treasury Rate
or LIBOR, adjusted by a Spread or Spread Multiplier, as applicable.
<TABLE>
<CAPTION>
ISSUANCE DATE PRINCIPAL AMOUNT MATURITY DATE RATE
- ---------------------- ---------------- ---------------------- --------------------------------
<S> <C> <C> <C>
February 3, 1992...... $ 5,000,000 February 3, 1994...... LIBOR Reset Semiannually + 0.50%
June 21, 1991......... $ 5,000,000 February 4, 1994...... 8.95%
February 5, 1990...... $ 25,000,000 February 7, 1994...... LIBOR Reset Semiannually + 0.40%
February 9, 1990...... $ 2,000,000 February 9, 1994...... LIBOR Reset Quarterly + 0.35%
February 14, 1992..... $ 25,000,000 February 14, 1994..... LIBOR Reset Quarterly + 0.35%
February 12, 1990..... $ 5,000,000 February 14, 1994..... LIBOR Reset Quarterly + 0.40%
February 15, 1990..... $ 14,000,000 February 15, 1994..... LIBOR Reset Quarterly + 0.375%
February 16, 1990..... $ 2,000,000 February 16, 1994..... LIBOR Reset Quarterly + 0.35%
February 23, 1990..... $ 12,000,000 February 23, 1994..... LIBOR Reset Quarterly + 0.375%
February 28, 1990..... $ 5,000,000 February 28, 1994..... LIBOR Reset Quarterly + 0.375%
February 26, 1990..... $ 10,000,000 February 28, 1994..... LIBOR Reset Quarterly + 0.375%
March 1, 1990......... $ 5,000,000 March 1, 1994......... LIBOR Reset Quarterly + 0.375%
March 1, 1990......... $ 5,000,000 March 1, 1994......... LIBOR Reset Quarterly + 0.375%
March 6, 1990......... $ 10,000,000 March 7, 1994......... LIBOR Reset Quarterly + 0.40%
March 21, 1990........ $ 10,000,000 March 23, 1994........ LIBOR Reset Quarterly + 0.40%
April 30, 1992........ $ 5,000,000 April 28, 1994........ LIBOR Reset Quarterly + 0.25%
April 30, 1992........ $ 5,000,000 April 28, 1994........ LIBOR Reset Quarterly + 0.25%
May 15, 1991.......... $ 10,000,000 May 16, 1994.......... LIBOR Reset Quarterly + 1.05%
May 16, 1991.......... $ 6,000,000 May 16, 1994.......... 8.82%
June 17, 1992......... $ 50,000,000 June 15, 1994......... LIBOR Reset Quarterly + 0.30%
June 7, 1991.......... $ 10,000,000 June 15, 1994......... 8.67%
July 29, 1992......... $ 5,000,000 July 29, 1994......... LIBOR Reset Quarterly + 0.25%
July 30, 1992......... $ 10,000,000 July 29, 1994......... 4.71%
September 22, 1992.... $ 5,000,000 September 22, 1994.... LIBOR Reset Quarterly + 0.25%
October 9, 1992....... $ 5,000,000 October 11, 1994...... LIBOR Reset Quarterly + 0.25%
October 16, 1992...... $ 10,000,000 October 17, 1994...... LIBOR Reset Quarterly + 0.25%
November 4, 1992...... $ 10,000,000 November 4, 1994...... LIBOR Reset Quarterly + 0.25%
November 18, 1991..... $ 7,800,000 November 18, 1994..... 7.42%
November 20, 1992..... $100,000,000 November 21, 1994..... LIBOR Reset Quarterly + 0.35%
December 8, 1992...... $ 5,000,000 December 8, 1994...... LIBOR Reset Quarterly + 0.40%
December 16, 1992..... $ 25,000,000 December 21, 1994..... LIBOR Reset Quarterly + 0.375%
December 31, 1992..... $ 6,000,000 January 3, 1995....... LIBOR Reset Quarterly + 0.35%
January 30, 1992...... $ 25,000,000 January 30, 1995...... 6.46%
February 13, 1990..... $ 5,000,000 February 13, 1995..... LIBOR Reset Quarterly + 0.35%
February 22, 1993..... $ 5,000,000 February 22, 1995..... 4.68%
February 22, 1993..... $ 10,000,000 February 22, 1995..... LIBOR Reset Quarterly + 0.30%
February 22, 1993..... $ 5,000,000 February 22, 1995..... LIBOR Reset Quarterly + 0.30%
February 22, 1993..... $ 25,000,000 February 22, 1995..... LIBOR Reset Quarterly + 0.30%
February 22, 1993..... $ 22,000,000 February 22, 1995..... LIBOR Reset Quarterly + 0.30%
February 6, 1992...... $ 30,000,000 February 28, 1995..... 6.63%
</TABLE>
13
<PAGE> 16
<TABLE>
<CAPTION>
ISSUANCE DATE PRINCIPAL AMOUNT MATURITY DATE RATE
- ---------------------- ---------------- ---------------------- --------------------------------
<S> <C> <C> <C>
March 2, 1993......... $ 50,000,000 March 2, 1995......... LIBOR Reset Quarterly + 0.30%
March 29, 1993........ $ 25,000,000 March 29, 1995........ See Note 1 below.
April 15, 1993........ $ 50,000,000 April 14, 1995........ LIBOR Reset Quarterly + 0.25%
April 15, 1993........ $ 50,000,000 April 14, 1995........ LIBOR Reset Quarterly + 0.25%
April 27, 1993........ $ 25,000,000 April 27, 1995........ LIBOR Reset Quarterly + 0.20%
May 12, 1993.......... $100,000,000 May 15, 1995.......... 3.55% fixed until May 16, 1994;
May 16, 1994 to maturity, LIBOR
Reset Quarterly + 0.20%
May 17, 1991.......... $ 6,000,000 May 17, 1995.......... 9.23%
June 8, 1992.......... $ 5,000,000 June 8, 1995.......... LIBOR Reset Quarterly + 0.35%
April 13, 1993........ $100,000,000 April 15, 1996........ LIBOR Reset Quarterly + 0.30%
April 26, 1993........ $ 10,000,000 April 26, 1996........ LIBOR Reset Quarterly + 0.50%
and see Note 2 below.
June 4, 1993.......... $ 25,000,000 June 4, 1996.......... 5.00%
June 21, 1991......... $ 4,500,000 June 21, 1996......... 9.80%
July 12, 1993......... $ 25,000,000 July 15, 1996......... LIBOR Reset Quarterly + 0.1875%
July 12, 1993......... $ 25,000,000 July 15, 1996......... LIBOR Reset Quarterly + 0.1875%
July 28, 1993......... $ 75,000,000 July 29, 1996......... LIBOR Reset Quarterly + 0.15%
July 28, 1993......... $ 10,000,000 July 29, 1996......... LIBOR Reset Quarterly + 0.15%
June 16, 1993......... $ 15,000,000 December 18, 1996..... See Note 3 below.
June 16, 1993......... $ 5,000,000 December 18, 1996..... See Note 3 below.
June 16, 1993......... $ 5,000,000 December 18, 1996..... See Note 3 below.
February 24, 1993..... $ 5,000,000 February 24, 1997..... LIBOR Reset Semiannually +
0.35%, converts to 8.20% fixed
on February 24, 1995
May 20, 1993.......... $100,000,000 May 20, 1997.......... Prime Rate Reset Daily - 2.00%
May 28, 1993.......... $ 5,000,000 May 28, 1997.......... LIBOR Reset Quarterly + 0.30%
June 28, 1993......... $ 26,000,000 June 30, 1997......... LIBOR Reset Quarterly + 0.25%
November 2, 1992...... $ 5,000,000 December 17, 1997..... LIBOR Reset Quarterly + 0.40%
February 23, 1993..... $ 5,000,000 February 23, 1998..... LIBOR Reset Semiannually +
0.50%, converts to 8.00% fixed
on February 23, 1996
May 11, 1993.......... $150,000,000 May 11, 1998.......... LIBOR Reset Quarterly + 0.35%
August 9, 1993........ $ 5,000,000 August 10, 1998....... LIBOR Reset Quarterly + 0.25%
August 18, 1993....... $100,000,000 August 19, 1996....... LIBOR Reset Quarterly + 0.20%
</TABLE>
- ---------------
(1) Until March 29, 1994, the rate shall be the lower of (i) three-month LIBOR
plus 0.50% or (ii) 9.00% minus three-month LIBOR, but in no event shall the
rate be less than zero. From March 29, 1994 up to but excluding September
29, 1994, the rate shall be the lower of (i) three-month LIBOR plus 0.50%
or (ii) 10.00% minus three-month LIBOR, but in no event shall the rate be
less than zero. From and after September 29, 1994, the rate shall be the
lower of (i) three-month LIBOR plus 0.50% or (ii) 11.00% minus three-month
LIBOR, but in no event shall the rate be less than zero.
(2) Until April 26, 1994 the rate shall be LIBOR plus 0.50%, but in no event
shall the rate exceed 4.75%. From April 26, 1994 up to but excluding April
26, 1995 the rate shall be LIBOR plus 0.50%, but in no event shall the rate
exceed 6.00%. From and after April 26, 1994, the rate shall be LIBOR plus
0.50%, but in no event shall the rate exceed 7.50%.
(3) From December 15, 1993 up to but excluding December 21, 1994, the rate shall
be 9.00% minus LIBOR, but in no event shall the rate be less than zero.
From December 21, 1994 up to but excluding December 20, 1995, the rate
shall be 10.00% minus LIBOR, but in no event shall the rate be less than
zero. From and after December 20, 1995, the rate shall be 11.00% minus
LIBOR, but in no event shall the rate be less than zero.
14
<PAGE> 17
CBC SUBORDINATED SECURITIES
General. The CBC Subordinated Securities are direct, unsecured obligations
of the Company. The obligations of the Company pursuant to the CBC Subordinated
Securities are subordinate in right of payment to all Senior Indebtedness and,
in certain circumstances relating to the dissolution, winding-up, liquidation or
reorganization of the Company, to all Additional Senior obligations, whether
outstanding as of the date hereof or hereafter created, assumed or incurred, as
discussed below under "Subordination." The CBC Subordinated Indenture does not
contain any restriction on the amount of Senior Indebtedness or Additional
Senior Obligations which the Company may incur.
Unless otherwise indicated below with respect to a particular series of CBC
Subordinated Securities, the maturity of the CBC Subordinated Securities will be
subject to acceleration only in the event of bankruptcy or reorganization of the
Company. See "Defaults and Waivers Thereof" below.
The holders of any series of CBC Subordinated Securities which are
specified below and are convertible into Common Stock ("Subordinated Convertible
Securities") will be entitled, as specified below, subject to prior redemption,
repayment or repurchase, to convert any Subordinated Convertible Securities of
such series into Common Stock, at the conversion price specified below, subject
to adjustment and to such other terms as are set forth below.
The holders of a particular series of CBC Subordinated Securities may be
obligated at maturity, or at any earlier time as set forth below with respect to
such series, to exchange them for Capital Securities of the Company. (Article
Seventeen). The terms of any such exchange and the Capital Securities issuable
upon such exchange are, to the extent applicable to a particular series of CBC
Subordinated Securities, described below. "Capital Securities" may consist of
Common Stock, perpetual preferred stock or other capital securities of the
Company acceptable to its primary Federal banking regulator. Currently, the
Company's primary Federal banking regulator is the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board"). Whenever CBC Subordinated
Securities are exchangeable for Capital Securities, the Company will be
obligated to deliver Capital Securities with a market value equal to the
principal amount of such CBC Subordinated Securities. In addition, the Company
will unconditionally undertake, at the expense of the Company, to sell the
Capital Securities in a sale (the "Secondary Offering") on behalf of any holders
who elect to receive cash for the Capital Securities. The Common Stock is
described below under "Description of Capital Stock -- Common Stock". A general
description of the preferred stock of the Company is set forth below under
"Description of Capital Stock -- Preferred Stock".
The staff of the Commission has advised the Company that Rule 13e-4 of the
Commission's rules and regulations relating to tender offers by issuers, as
currently in effect and interpreted, would be applicable to the exchange of CBC
Subordinated Securities of any series for Capital Securities and to any
Secondary Offering. If, at the time of the exchange of CBC Subordinated
Securities of any series for Capital Securities and the Secondary Offering, Rule
13e-4 (or any successor rule or rules) applies to such transactions, the Company
will comply with such rule (or any successor rule or rules) and will afford
holders of such CBC Subordinated Securities all rights and will make all filings
required by such rule (or successor rule or rules). If fewer than all of the CBC
Subordinated Securities of a series may be exchanged for Capital Securities
pursuant to the terms of such CBC Subordinated Securities, the particular CBC
Subordinated Securities to be exchanged shall be selected by the CBC
Subordinated Trustee utilizing a method such Trustee deems fair and equitable,
provided that such method shall comply with the requirements of applicable law,
including Federal securities law.
Subordination. On August 28, 1992, the Federal Reserve Board revised the
risk-based capital guidelines to impose additional restrictions on subordinated
debt securities in order for such securities to qualify as Tier II Capital. See
"Certain Regulatory Matters -- Capital Ratios." In response to the new
guidelines, the Company and the CBC Subordinated Trustee amended and restated
the CBC Subordinated Indenture as of December 15, 1992 to permit the Company to
issue CBC Subordinated Securities that would qualify as Tier II Capital. CBC
Subordinated Securities issued prior to the amendment and restatement of the CBC
Subordinated Indenture are collectively referred to herein as "Antecedent CBC
Subordinated Indebtedness" and CBC Subordinated Securities issued on after the
date of the amendment and restatement of the
15
<PAGE> 18
CBC Subordinated Indenture are collectively referred to herein as
"Post-Amendment CBC Subordinated Indebtedness".
Antecedent CBC Subordinated Indebtedness includes the following CBC
Subordinated Securities: (i) the 10 1/8% Subordinated Capital Notes Due 2000;
(ii) the 9 3/4% Subordinated Capital Notes Due 1999; (iii) the Floating Rate
Subordinated Capital Notes Due 1999; (iv) the 8 1/2% Subordinated Notes Due
2002; (v) the 8 5/8% Subordinated Debentures Due 2002; (vi) the 8 1/8%
Subordinated Notes Due 2002; (vii) the 10 3/8% Subordinated Notes Due 1999; and
(viii) the Floating Rate Subordinated Notes Due 1998. At September 30, 1993, an
aggregate principal amount of $1.19 billion of Antecedent CBC Subordinated
Indebtedness was outstanding.
Post-Amendment CBC Subordinated Indebtedness includes the following CBC
Subordinated Securities (i) the 7 5/8% Subordinated Notes Due 2003; and (ii) the
7 1/8% Subordinated Debentures Due 2005. At September 30, 1993, an aggregate
principal amount of approximately $400,000,000 of Post-Amendment CBC
Subordinated Indebtedness was outstanding.
The CBC Subordinated Indenture provides that "Senior Indebtedness" shall
mean the principal of (and premium, if any) and interest on (i) all indebtedness
of the Company for money borrowed, whether outstanding on the date of execution
of the CBC Subordinated Indenture or thereafter created, assumed or incurred,
except (A) Post-Amendment CBC Subordinated Indebtedness, (B) Antecedent CBC
Subordinated Indebtedness, (C) Assumed MHC Subordinated Indebtedness (as defined
below) and (D) such other indebtedness of the Company which by its terms is
expressly stated to be not superior in right of payment to the CBC Subordinated
Securities or to rank pari passu in right of payment with the CBC Subordinated
Securities (such other indebtedness hereinafter referred to as "Other
Subordinated Indebtedness") and (ii) any deferrals, renewals or extensions of
any such Senior Indebtedness. The term "indebtedness of the Company for money
borrowed" shall mean any obligations of, or any obligation guaranteed by, the
Company for the repayment of money borrowed, whether or not evidenced by bonds,
debentures, notes or other written instruments, and any deferred obligation for
payment of the purchase price of property or assets.
Assumed MHC Subordinated Indebtedness includes the following outstanding
subordinated indebtedness of the Company which are MHC Subordinated Securities
and which were assumed by the Company as a result of the Merger: (i) the
Floating Rate Subordinated Notes Due 1997; (ii) the 8.50% Subordinated Capital
Notes Due 1999; and (iii) the Subordinated Note Due 1996. At September 30, 1993,
an aggregate principal amount of $273 million of Assumed MHC Subordinated
Indebtedness and an aggregate principal amount of approximately $100 million of
Other Subordinated Indebtedness was outstanding.
The CBC Subordinated Indenture provides that "Additional Senior
Obligations" shall mean all indebtedness of the Company, whether outstanding on
December 15, 1992 or thereafter created, assumed or incurred, for claims in
respect of derivative products such as interest and foreign exchange rate
contracts, commodity contracts and similar arrangements; provided, however, that
Additional Senior Obligations do not include claims in respect of Senior
Indebtedness or obligations which, by their terms, are expressly stated to be
not superior in right of payment to the Post-Amendment CBC Subordinated
Securities or to rank pari passu in right of payment with the PostAmendment CBC
Subordinated Securities. For purposes of this definition, "claim" shall have the
meaning assigned thereto in Section 101(4) of the United States Bankruptcy Code
of 1978, as amended and in effect on December 15, 1992.
The CBC Subordinated Securities (irrespective of whether such CBC
Subordinated Securities are Antecedent or Post-Amendment CBC Subordinated
Indebtedness) are subordinate in right of payment to all Senior Indebtedness. No
payment pursuant to the CBC Subordinated Securities, or exchange for Capital
Securities, may be made, and no holder of the CBC Subordinated Securities shall
be entitled to demand or receive any such payment or exchange unless all amounts
of principal (and premium, if any) and interest, if any, then due with respect
to all Senior Indebtedness of the Company shall have been paid in full or duly
provided for, and unless at the time of such payment or exchange and immediately
after giving effect thereto, there shall not exist with respect to any such
Senior Indebtedness any event of default permitting the holders thereof to
accelerate the maturity thereof or any event which, with notice or lapse of time
or both, would become such an event of default. Such subordination will not
prevent the occurrence of any default in respect
16
<PAGE> 19
of the CBC Subordinated Securities. See "Defaults and Waiver Thereof" below for
limitations on the rights of acceleration.
The Post-Amendment CBC Subordinated Securities are subordinate in right of
payment to Senior Indebtedness as described above and, in certain circumstances
relating to the dissolution or winding-up of the Company, to Additional Senior
Obligations. Accordingly, upon any distribution of the assets of the Company
upon dissolution, winding-up, liquidation or reorganization, (i) the holders of
Senior Indebtedness will be entitled to receive payment in full of principal
(and premium, if any) and interest, if any, before any payment or distribution
is made on the CBC Subordinated Securities, and (ii) if, after giving effect to
the operation of clause (i) above, (A) amounts remain available for payment or
distribution in respect of the CBC Subordinated Securities and (B) creditors in
respect of Additional Senior Obligations have not received payment in full of
amounts due or to become due thereon or payment of such amounts has not been
duly provided for, then such amounts available for payment or distribution in
respect of the Post-Amendment CBC Subordinated Indebtedness shall first be
applied to pay or provide for the payment in full of all such Additional Senior
Obligations before any payment may be made on the Post-Amendment CBC
Subordinated Indebtedness.
The Antecedent CBC Subordinated Indebtedness will not be subordinated to
indebtedness of the Company which is not Senior Indebtedness, the Post-Amendment
CBC Subordinated Indebtedness will not be subordinated to indebtedness of the
Company which is not Senior Indebtedness or Additional Senior Obligations, and
the creditors of the Company who do not hold Senior Indebtedness or Additional
Senior Obligations will not benefit from the subordination provisions described
herein. In the event of the bankruptcy or reorganization of the Company before
or after maturity of the CBC Subordinated Securities (and prior to any exchange
or conversion thereof), such other creditors would rank pari passu in right of
payment with holders of the CBC Subordinated Securities, subject, however, to
the broad equity powers of a Federal bankruptcy court pursuant to which such
court may, among other things, reclassify the claims of holders of any series of
CBC Subordinated Securities into a class of claims having a different relative
priority with respect to the claims of such other creditors or any other claims
against the Company.
Summary of Subordination Provisions Relating to CBC Subordinated
Securities. No series of subordinated debt securities of the Company,
including, without limitation, the Post-Amendment CBC Subordinated Indebtedness,
the Antecedent CBC Subordinated Indebtedness, the Assumed MHC Subordinated
Indebtedness and the Other Subordinated Indebtedness, is subordinated to any
other series of subordinated debt securities of the Company. However, Antecedent
CBC Subordinated Indebtedness is subordinated, by its terms, only to Senior
Indebtedness; Post-Amendment CBC Subordinated Indebtedness and Other
Subordinated Indebtedness are subordinated, by their terms, to Senior
Indebtedness and, in certain circumstances relating to the dissolution,
winding-up, liquidation or reorganization of the Company, to Additional Senior
Obligations; and MHC Subordinated Securities (otherwise referred to as Assumed
MHC Subordinated Indebtedness) are subordinated, by their terms, to Senior
Indebtedness, Additional Senior Obligations and all other obligations of the
Company to its creditors other than any obligation of the Company as is by its
terms expressly stated to be not superior in right of payment to or to rank pari
passu in right of payment with such MHC Subordinated Securities. As a result of
the differences between the subordination provisions applicable to the
Post-Amendment CBC Subordinated Indebtedness, the Antecedent CBC Subordinated
Indebtedness, the MHC Subordinated Securities (otherwise referred to herein as
Assumed MHC Subordinated Indebtedness) and the Other Subordinated Indebtedness,
in the event of a dissolution, winding-up, liquidation or reorganization of the
Company, the holders of Post-Amendment CBC Subordinated Indebtedness and Other
Subordinated Indebtedness may receive less, ratably, than the holders of
Pre-Amendment CBC Subordinated Indebtedness, but more, ratably, than the holders
of MHC Subordinated Securities.
Limitation on Disposition of Voting Stock of Chemical Bank. With respect
to Post-Amendment CBC Subordinated Indebtedness, the CBC Subordinated Indenture
contains no covenant that the Company will not sell, transfer or otherwise
dispose of any shares of, or securities convertible into, or options, warrants
or rights to subscribe for or purchase shares of, voting stock of Chemical Bank,
nor does it prohibit Chemical Bank from issuing any shares of, securities
convertible into, or options, warrants or rights to subscribe for or purchase
shares of, voting stock of Chemical Bank. However, the CBC Subordinated
Indenture does contain a
17
<PAGE> 20
covenant by the Company, for the exclusive benefit of the Antecedent CBC
Subordinated Indebtedness and subject to the provisions described below under
"Consolidation, Merger and Sale of Assets," that the Company will not sell,
transfer or otherwise dispose of any shares of, or securities convertible into,
or options, warrants or rights to subscribe for or purchase shares of, voting
stock of Chemical Bank, nor will it permit Chemical Bank to issue any shares of,
securities convertible into, or options, warrants or rights to subscribe for or
purchase shares of, voting stock of Chemical Bank, with the following
exceptions: (i) issuances or sales of directors' qualifying shares; (ii)
issuances or sales of shares to the Company; (iii) sales or other dispositions
or issuances for fair market value, as determined by the Board of Directors of
the Company, if after giving effect to such sales, dispositions or issuances and
to the issuance of any shares issuable upon conversion of convertible securities
or upon the exercise of options, warrants or rights, the Company would own
directly or indirectly through subsidiaries not less than 80% of the issued and
outstanding shares of voting stock of Chemical Bank; (iv) sales or other
dispositions or issuances made in compliance with an order or direction of a
court or regulatory authority of competent jurisdiction; and (v) sales of voting
stock by Chemical Bank to its shareholders if such sales do not reduce the
percentage of shares of voting stock owned by the Company. (Section 5.07).
Defaults and Waiver Thereof. The CBC Subordinated Indenture defines an
Event of Default (i) with respect to Antecedent CBC Subordinated Indebtedness,
any one of certain events of bankruptcy, insolvency and reorganization affecting
the Company; (ii) with respect to Post-Amendment CBC Subordinated Indebtedness,
any one of certain events of bankruptcy or reorganization affecting the Company;
and (iii) with respect to any CBC Subordinated Securities, any other Event of
Default specifically provided for by the terms of such series of CBC
Subordinated Securities, as may be described below with respect to such series.
(Section 7.01). In case an Event of Default shall have occurred and be
continuing with respect to any series of CBC Subordinated Securities then
outstanding under the CBC Subordinated Indenture, the CBC Subordinated Trustee
or the holders of at least 25% in aggregate principal amount of the CBC
Subordinated Securities of that series which are then outstanding may declare
the principal (or, in the case of original issue discount CBC Subordinated
Securities, such lesser amount of principal as may be provided therein) of all
CBC Subordinated Securities of that series to be due and payable immediately in
cash, but such declaration may be annulled, and certain past defaults may be
waived, by the holders of not less than a majority in aggregate principal amount
of the CBC Subordinated Securities of that series, upon the conditions provided
in the CBC Subordinated Indenture. (Section 7.01). The right of the holders of
the CBC Subordinated Securities of a series to demand payment in cash would
exist upon the occurrence and continuance of an Event of Default before or after
the stated maturity of the CBC Subordinated Securities of such series, so long
as the CBC Subordinated Securities of such series have not been exchanged or
converted as provided in the CBC Subordinated Indenture. Any such right to
payment in cash would, in the event of the bankruptcy or reorganization of the
Company, 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 and status
of the payment claims of the holders of the CBC Subordinated Securities. Prior
to any declaration accelerating the maturity of the CBC Subordinated Securities
of any series, the holders of a majority in aggregate principal amount of the
CBC Subordinated Securities of that series at the time outstanding may on behalf
of the holders of all CBC Subordinated Securities of that series waive any past
default or Event of Default and its consequences, except a default in the
payment of the principal of (or premium, if any) or interest, if any, on the CBC
Subordinated Securities of that series. (Section 7.07).
Unless otherwise provided in the terms of a series of CBC Subordinated
Securities, there will be no right of acceleration of the payment of principal
of the CBC Subordinated Securities of such series upon a default in the payment
of principal or interest or a default in the performance of any covenant or
agreement in the CBC Subordinated Securities or the CBC Subordinated Indenture.
In the event of a default in the payment of interest or principal (including the
delivery of any Capital Securities in exchange for CBC Subordinated Securities)
or the performance of any covenant or agreement in the CBC Subordinated
Securities or the CBC Subordinated Indenture, the CBC Subordinated Trustee may,
subject to certain limitations and conditions, seek to enforce payment of such
interest or principal (including the delivery of any Capital Securities in
exchange for CBC Subordinated Securities) or the performance of such covenant or
agreement.
18
<PAGE> 21
The CBC Subordinated Indenture provides that the CBC Subordinated Trustee
shall, within 90 days after the occurrence of a default with respect to the CBC
Subordinated Securities of any series, give to the holders of the CBC
Subordinated Securities of that series notice of all uncured defaults known to
it (the term "default" being defined to include the events specified above
without grace periods or notice), provided, that except in the case of an Event
of Default that relates to the bankruptcy or reorganization of the Company or a
default in payment of principal (or premium, if any) or interest, if any, in
respect of the CBC Subordinated Securities of that series, or the obligation to
deliver Capital Securities in exchange for such CBC Subordinated Securities, the
CBC Subordinated Trustee shall be protected in withholding such notice if and so
long as the board of directors or trustees, the executive committee or a trust
committee of directors or responsible officers or both, of the CBC Subordinated
Trustee, in good faith determines that the withholding of such notice is in the
interest of such holders. (Section 7.08). The Company will be required to
furnish to the CBC Subordinated Trustee annually an officers' certificate as to
the absence of defaults under the CBC Subordinated Indenture. (Section 5.06).
Subject to the provisions of the CBC Subordinated Indenture relating to the
duties of the CBC Subordinated Trustee, the CBC Subordinated Trustee will be
under no obligation to exercise any of its rights or powers under the CBC
Subordinated Indenture at the request, order or direction of any of the holders
of the CBC Subordinated Securities, unless such holders shall have offered to
the CBC Subordinated Trustee reasonable security or indemnity. Subject to such
provision for security or indemnification, the holders of a majority in
principal amount of the CBC Subordinated Securities of any series then
outstanding under the CBC Subordinated Indenture will have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to, or exercising any trust or power conferred on, the CBC Subordinated Trustee
with respect to the CBC Subordinated Securities of such series. (Sections 7.07
and 8.02).
Modification of the CBC Subordinated Indenture. The CBC Subordinated
Indenture contains provisions permitting the Company and the CBC Subordinated
Trustee, with the consent of the holders of not less than a majority in
principal amount of the CBC Subordinated Securities at the time outstanding of
each series affected by such modification, to modify the CBC Subordinated
Indenture or any supplemental indenture or the rights of the holders of the CBC
Subordinated Securities, provided that no such modification shall, without the
consent of the holder of each CBC Subordinated Security affected thereby: (i)
change the stated maturity date of the principal of, or any installment of
principal of or interest on, any such CBC Subordinated Security; (ii) reduce the
principal amount of (or premium, if any) or interest, if any, on any such CBC
Subordinated Security; (iii) reduce the portion of the principal amount of an
original issue discount CBC Subordinated Security payable upon acceleration of
the maturity thereof; (iv) reduce any amount payable upon redemption of any CBC
Subordinated Security; (v) change the place or places where, or the coin or
currency in which, any CBC Subordinated Security or any premium or the interest
thereon is payable; (vi) change the definition of "Market Value"; (vii) impair
the right of any holders of CBC Subordinated Securities of any series to receive
on any Exchange Date for CBC Subordinated Securities of such series Capital
Securities with a Market Value equal to that required by the terms of the CBC
Subordinated Securities; (viii) impair the conversion rights of any holders of
CBC Subordinated Securities of a series entitled to the conversion rights set
forth in Article Nineteen of the CBC Subordinated Indenture; (ix) impair the
right of a holder to institute suit for the enforcement of any payment on or
with respect to any such CBC Subordinated Security (including any right of
redemption at the option of the holder of such CBC Subordinated Security) or
impair any rights to the delivery of Capital Securities in exchange for any CBC
Subordinated Security or to require the Company to sell Capital Securities in a
Secondary Offering or to require the delivery of Common Stock, CBC Debt
Securities or other property upon conversion of CBC Subordinated Securities; (x)
reduce the above-stated percentage of CBC Subordinated Securities of any series
the consent of the holders of which is necessary to modify or amend the CBC
Subordinated Indenture or reduce the percentage of CBC Subordinated Securities
of any series the holders of which are required to waive any past default or
Event of Default; or (xi) modify the foregoing requirements. (Section 11.02).
The CBC Subordinated Indenture permits the Company and the CBC Subordinated
Trustee to amend the CBC Subordinated Indenture in certain circumstances without
the consent of the holders of CBC Subordinated Securities to evidence the merger
of the Company or the replacement of the CBC Subordinated
19
<PAGE> 22
Trustee, to effect modifications which do not affect any series of CBC
Subordinated Securities already outstanding and for certain other purposes.
(Section 11.01).
Consolidation, Merger and Sale of Assets. The Company may not merge or
consolidate with any other corporation or sell or convey all or substantially
all of its assets as an entirety to any other corporation, unless (i) either the
Company shall be the continuing corporation or the successor corporation shall
expressly assume the payment of the principal of (including issuance and
delivery of Capital Securities) (and premium, if any) and interest, if any, on
the CBC Subordinated Securities and the performance and observance of all the
covenants and conditions of the CBC Subordinated Indenture binding upon the
Company, and (ii) the Company or such successor corporation shall not,
immediately after such merger or consolidation or such sale or conveyance, be in
default in the performance of any such covenant or condition. (Article Twelve).
Set forth below are the principal terms of the CBC Subordinated Securities
issued and outstanding as of September 30, 1993, with respect to which offers
and sales relating to secondary market transactions may be made by direct or
indirect wholly-owned subsidiaries of the Company. Reference is made to the
Glossary for the definition of some of the terms used herein.
TERMS AND PROVISIONS OF 10 3/8% SUBORDINATED NOTES DUE 1999
The 10 3/8% Subordinated Notes Due 1999 (the "10 3/8% 1999 Notes") are
limited to $100,000,000 aggregate principal amount and will mature on March 15,
1999. The 10 3/8% 1999 Notes are not redeemable prior to maturity and no sinking
fund is provided for the 10 3/8% 1999 Notes. The 10 3/8% 1999 Notes bear
interest from March 15, 1989, payable semiannually in arrears on each March 15
and September 15, commencing September 15, 1989 to the persons in whose names
the 10 3/8% 1999 Notes are registered at the close of business on the first day
of March or September preceding such March 15 or September 15. The happening of
one or more of the following events shall constitute an Event of Default with
respect to the 10 3/8% 1999 Notes: (i) default for 30 days in the payment of any
installment of interest on any 10 3/8% 1999 Note; (ii) default in the payment,
when due, of the principal of any 10 3/8% 1999 Note; (iii) default, for 60 days
after appropriate written notice, in the observance of performance of any other
covenants or agreements of the Company contained in the 10 3/8% 1999 Notes or in
the Indenture for the benefit of the 10 3/8% 1999 Notes; and (iv) certain events
of bankruptcy, insolvency and reorganization affecting the Company or Chemical
Bank.
TERMS AND PROVISIONS OF 9 3/4% SUBORDINATED CAPITAL NOTES DUE 1999
The 9 3/4% Subordinated Capital Notes Due 1999 (the "9 3/4% 1999 Notes")
are limited to $300,000,000 aggregate principal amount and will mature on June
15, 1999. The 9 3/4% 1999 Notes are not redeemable prior to maturity, except
upon the occurrence of certain events relating to the Federal income tax
treatment of the 9 3/4% 1999 Notes to the Company, and no sinking fund is
provided for the 9 3/4% 1999 Notes. The 9 3/4% 1999 Notes bear interest from
June 22, 1987, payable semiannually in arrears on each June 15 and December 15,
commencing December 15, 1987 to the persons in whose names the 9 3/4% 1999 Notes
are registered at the close of business on the first day of June or December
preceding such June 15 or December 15. At maturity, the 9 3/4% 1999 Notes will
be exchanged for Capital Securities having a Market Value equal to the principal
amount of the 9 3/4% 1999 Notes, except to the extent that the Company, at its
option, elects to pay in cash the principal amount of the 9 3/4% 1999 Notes, in
whole or in part, from amounts representing proceeds of other issuances of
Capital Securities which the Company has theretofore designated for such use
("Designated Proceeds"). The Company has Designated Proceeds sufficient to pay
the 9 3/4% 1999 Notes in cash at maturity.
TERMS AND PROVISIONS OF 10 1/8% SUBORDINATED CAPITAL NOTES DUE 2000
The 10 1/8% Subordinated Capital Notes Due 2002 (the "10 1/8% 2000 Notes")
are limited to $150,000,000 aggregate principal amount and will mature on
November 1, 2000. The 10 1/8% 2000 Notes are not subject to redemption prior to
maturity, except upon the occurrence of certain events relating to the Federal
income tax treatment of the 10 1/8% 2000 Notes to the Company, and no sinking
fund is provided for 10 1/8% 2000 Notes. The 10 1/8% 2000 Notes bear interest
from November 1, 1988, payable semiannually in arrears on each May 1 and
November 1, commencing May 1, 1989 to the persons in whose names the 10 1/8%
2000 Notes are
20
<PAGE> 23
registered at the close of business on the fifteenth day of April or October
preceding such May 1 or November 1. At maturity, the 10 1/8% 2000 Notes will be
exchanged for Capital Securities having a Market Value equal to the principal
amount of the 10 1/8% 2000 Notes, except to the extent that the Company, at its
option, elects to pay in cash the principal amount of the 10 1/8% 2000 Notes, in
whole or in part, from Designated Proceeds. The Company has Designated Proceeds
sufficient to pay the 10 1/8% 2000 Notes in cash at maturity.
TERMS AND PROVISIONS OF 8 1/2% SUBORDINATED NOTES DUE 2002
The 8 1/2% Subordinated Notes Due 2002 (the "8 1/2% 2002 Notes") are
limited to $200,000,000 aggregate principal amount and will mature on February
15, 2002. The 8 1/2% 2002 Notes are not redeemable prior to maturity and no
sinking fund is provided for the 8 1/2% 2002 Notes. The 8 1/2% 2002 Notes bear
interest from February 10, 1992, payable semiannually in arrears on each
February 15 and August 15, commencing August 15, 1992 to the persons in whose
names the 8 1/2% 2002 Notes are registered at the close of business on the first
day of February or August preceding such February 15 or August 15. The happening
of one or more of the following events shall constitute an Event of Default with
respect to the 8 1/2% 2002 Notes: (i) default for 30 days in the payment of any
installment of interest on any 8 1/2% 2002 Note; (ii) default in the payment,
when due, of the principal of any 8 1/2% 2002 Note; (iii) default, for 60 days
after appropriate written notice, in the observance or performance of any other
covenants or agreements of the Company contained in the 8 1/2% 2002 Notes; and
(iv) certain events of bankruptcy, insolvency and reorganization affecting the
Company or Chemical Bank.
TERMS AND PROVISIONS OF 8 5/8% SUBORDINATED DEBENTURES DUE 2002
The 8 5/8% Subordinated Notes Due 2002 (the "8 5/8% 2002 Notes") are
limited to $150,000,000 aggregate principal amount and will mature on May 1,
2002. The 8 5/8% 2002 Notes are not redeemable prior to maturity and no sinking
fund is provided for the 8 5/8% 2002 Notes. The 8 5/8% 2002 Notes bear interest
from May 1, 1992, payable semiannually in arrears on each May 1 and November 1,
commencing November 1, 1992 to the persons in whose names the 8 5/8% 2002 Notes
are registered at the close of business on the fifteenth day of April or October
preceding such May 1 or November 1.
TERMS AND PROVISIONS OF 8 1/8% SUBORDINATED NOTES DUE JUNE 15, 2002
The 8 1/8% Subordinated Notes Due June 15, 2002 (the "8 1/8% June 15, 2002
Notes") are limited to $100,000,000 aggregate principal amount and will mature
on June 15, 2002. The 8 1/8% June 15, 2002 Notes are not redeemable prior to
maturity and no sinking fund is provided for the 8 1/8% June 15, 2002 Notes. The
8 1/8% June 15, 2002 Notes bear interest from June 15, 1992, payable
semiannually in arrears on each June 15 and December 15, commencing December 15,
1992 to the persons in whose names the 8 1/8% June 15, 2002 Notes are registered
at the close of business on the first day of June or December preceding such
June 15 or December 15.
TERMS AND PROVISIONS OF 7 5/8% SUBORDINATED NOTES DUE 2003
The 7 5/8% Subordinated Notes Due 2003 (the "7 5/8% 2003 Notes") are
limited to $200,000,000 aggregate principal amount and will mature on January
15, 2003. The 7 5/8% 2003 Notes are not redeemable prior to maturity and no
sinking fund is provided for the 7 5/8% 2003 Notes. The 7 5/8% 2003 Notes bear
interest from January 22, 1993, payable semiannually in arrears on each January
15 and July 15, commencing July 15, 1993 to the persons in whose names the
7 5/8% 2003 Notes are registered at the close of business on the first day of
January or July preceding such January 15 or July 15.
TERMS AND PROVISIONS OF 7 1/8% SUBORDINATED DEBENTURES DUE 2005
The 7 1/8% Subordinated Debentures Due 2005 (the "7 1/8% 2005 Debentures")
are limited to $200,000,000 aggregate principal amount and will mature on March
1, 2005. The 7 1/8% 2005 Debentures are not redeemable prior to maturity and no
sinking fund is provided for the 7 1/8% 2005 Debentures. The 7 1/8%
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<PAGE> 24
2005 Debentures bear interest from March 1, 1993, payable semiannually in
arrears on each March 1 and September 1, commencing September 1, 1993 to the
persons in whose names the 7 1/8% 2005 Debentures are registered at the close of
business on the fifteenth day of February or August preceding such March 1 or
September 1.
TERMS AND PROVISIONS OF SUBORDINATED MEDIUM-TERM NOTES, SERIES A
The Subordinated Medium-Term Notes, Series A (the "Subordinated Medium-Term
Notes") mature from 9 months to 30 years from their date of issue, as mutually
agreed between the purchaser and the Company. The Subordinated Medium-Term Notes
are not subject to any sinking fund and are not redeemable prior to their stated
maturity. The Subordinated Medium-Term Notes have either (a) fixed interest
rates or (b) floating interest rates which are either reset daily, monthly,
quarterly, semiannually or annually based on the CD Rate, Commercial Paper Rate,
the Federal Funds Effective Rate, the Treasury Rate or LIBOR, adjusted by a
Spread or Spread Multiplier, as applicable.
As of September 30, 1993 no Subordinated Medium Term Notes were
outstanding.
PERMANENT GLOBAL CBC DEBT SECURITIES
Certain series of the CBC Debt Securities were issued in permanent global
form. See "Permanent Global Debt Securities" for a discussion of the rights of
beneficial owner of interest in permanent global debt securities.
INFORMATION CONCERNING THE TRUSTEES
The Company, Chemical Bank and certain other subsidiaries of the Company
maintain deposits with, and conduct other banking transactions with, the
trustees under each of the CBC Indentures in the ordinary course of business.
Morgan Guaranty Trust Company of New York is trustee under the MHC Senior
Indenture.
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<PAGE> 25
DESCRIPTION OF MHC DEBT SECURITIES
The statements under this caption are brief summaries of certain provisions
contained in the MHC Indentures (as defined below), do not purport to be
complete and are qualified in their entirety by reference to such MHC
Indentures, copies of which are exhibits to the Registration Statement of which
this Prospectus is a part. Wherever capitalized terms are used but not defined
herein, such terms shall have the meanings assigned to them in the applicable
MHC Indenture, it being intended that such referenced sections of the MHC
Indentures and such defined terms shall be incorporated herein by reference.
GENERAL
The MHC Senior Securities have been issued under an Indenture, dated as of
June 1, 1982, between MHC and Morgan Guaranty Trust Company of New York, as
Trustee (the "MHC Senior Trustee"), as amended by the First Supplemental
Indenture dated as of January 15, 1986, the Second Supplemented Indenture dated
as of March 13, 1991 and the Third Supplemented Indenture dated as of December
31, 1991 (the "MHC Senior Indenture"). The MHC Subordinated Securities have been
issued under an Indenture, dated as of June 1, 1985, between MHC and IBJ
Schroder Bank & Trust Company (the "MHC Subordinated Trustee"), as amended by
the First Supplemented Indenture dated as of December 31, 1991 (the "MHC
Subordinated Indenture"). The MHC Senior Indenture and the MHC Subordinated
Indenture shall be collectively referred to as the "MHC Indentures." As a result
of the Merger, the Company has assumed the obligations and liabilities of MHC
under the MHC Indentures and the MHC Debt Securities.
Since the Company is a holding company, the right of the Company to
participate in any distribution of assets of any subsidiary, including Chemical
Bank and Texas Commerce, upon such subsidiary's liquidation or reorganization or
otherwise (and thus the ability of holders of the MHC Debt Securities to benefit
indirectly from such distribution), is subject to the prior claims of creditors
of that subsidiary, except to the extent that the Company may itself be
recognized as a creditor of that subsidiary. Claims on the Company's
subsidiaries by creditors other than the Company include long-term debt and
substantial obligations with respect to deposit liabilities, Federal funds
purchased, securities sold under repurchase agreements, commercial paper and
other short-term borrowings.
The MHC Debt Securities have been issued in fully registered form only and
may be transferred, combined or split up into authorized denominations without
payment of any charge other than stamp taxes or other governmental charges.
Neither MHC Indenture contains any restriction on the Company's ability to enter
into a highly leveraged transaction or any provision affording special
protection to holders of MHC Debt Securities in the event the Company engages in
a highly leveraged transaction. Further, neither MHC Indenture contains any
provisions that would provide protection to holders of MHC Debt Securities upon
a sudden and dramatic decline in the credit quality of the Company resulting
from a takeover, recapitalization or similar restructuring of the Company.
MHC SENIOR SECURITIES
The MHC Senior Securities are direct, unsecured obligations of the Company
and constitute Senior Indebtedness issued on a parity with the other Senior
Indebtedness of the Company. See "Description of CBC Debt Securities--CBC
Subordinated Securities" above.
Limitation on Disposition of Voting Stock of Chemical Bank. The MHC Senior
Indenture contains a covenant by the Company that, so long as any of the MHC
Senior Securities are outstanding, it will not sell, assign, transfer or
otherwise dispose of any shares of, securities convertible into, or options,
warrants or rights to subscribe for or purchase shares of, voting stock of
Chemical Bank (the successor by merger to Manufacturers Hanover Trust Company),
nor will it permit Chemical Bank to issue any shares of, securities convertible
into or options, warrants or rights to subscribe for or purchase shares of,
voting stock of Chemical Bank, unless (a) any such sale, assignment, transfer or
other disposition is made for fair market value, as determined by the Board of
Directors of the Company and (b) the Company will own at least 80% of the issued
and outstanding voting stock of Chemical Bank after giving effect to such
transaction.
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<PAGE> 26
Defaults and Waiver Thereof. The MHC Senior Indenture provides that the
happening of one or more of the following events shall constitute an Event of
Default with respect to any series of MHC Senior Securities then outstanding
under the MHC Senior Indenture: (i) default for 30 days in the payment of any
installment of interest on any MHC Senior Securities of that series; (ii)
default in the payment, when due, of the principal of (or premium if any, on)
any MHC Senior Securities of that series; (iii) default, for 60 days after
written notice, in the observance or performance of any other of the covenants
or agreements of the Company in the MHC Senior Securities of that series or in
the MHC Senior Indenture relating to that series; and (iv) certain events of
insolvency. In case an Event of Default shall have occurred and be continuing
with respect to any series of MHC Senior Securities then outstanding under the
MHC Senior Indenture, the MHC Senior Trustee or the holders of at least 25% in
aggregate principal amount of the MHC Senior Securities of that series which are
then outstanding may declare the principal, or, in the case of discounted MHC
Senior Securities, such lesser amount of principal as may be provided therein,
of all MHC Senior Securities 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 aggregate principal amount of the MHC
Senior Securities of that series, upon the conditions provided in the MHC Senior
Indenture. The MHC Senior Indenture provides that the MHC Senior Trustee shall,
within 90 days after the occurrence of a default with respect to the MHC Senior
Securities of any series, give to the holders of the MHC Senior Securities of
that series notice of all uncured defaults known to it (the term "default" being
defined to include the events specified above without grace periods or notice);
provided that, except in the case of default in payment of principal (or
premium, if any) or interest, if any, in respect of the MHC Senior Securities of
that series, the MHC Senior Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee, or a
trust committee of directors or responsible officers or both, of the trustee, in
good faith determines that the withholding of such notice is in the interest of
such holders. The Company is required to furnish to the MHC Senior Trustee
annually an officers' certificate to the effect that the Company is not in
default under any provision of the MHC Senior Indenture.
Subject to the provisions of the MHC Senior Indenture relating to the
duties of the MHC Senior Trustee, the MHC Senior Trustee is under no obligation
to exercise any of its rights or powers under the MHC Senior Indenture at the
request, order or direction of any of the holders of the MHC Senior Securities,
unless such holders have offered to the MHC Senior Trustee reasonable indemnity.
Subject to such provision for indemnification, the holders of a majority in
principal amount of the MHC Senior Securities of any series then outstanding
under the MHC Senior Indenture have the right to direct the time, method and
place of conducting any proceeding for any remedy available to, or exercising
any trust or power conferred on, the MHC Senior Trustee with respect to the MHC
Senior Securities of such series.
Modification of the Indenture. The MHC Senior Indenture provides that,
with the consent of the holders of not less than 66 2/3% in aggregate principal
amount of the MHC Senior Securities of the series to be affected then
outstanding under the MHC Senior Indenture (voting as one class), modifications
and alterations of the MHC Senior Indenture may be made which affect the rights
of the holders of the MHC Senior Securities of each such series, but no such
modification or alteration may be made which would (i) extend the fixed maturity
of any MHC Senior Security or reduce the principal amount thereof or reduce the
rate or extend the time of payment of any interest thereon or (ii) reduce the
above-stated percentage of holders required to modify or alter the MHC Senior
Indenture, without consent of all the holders of the MHC Senior Securities then
outstanding under the MHC Senior Indenture to be affected thereby.
Set forth below are the principal terms of the MHC Senior Securities issued
and outstanding as of September 30, 1993, with respect to which offers and sales
relating to secondary market transactions may be made by direct or indirect
wholly-owned subsidiaries of the Company. Reference is made to the Glossary for
the definition of some of the terms used herein.
TERMS AND PROVISIONS OF 8 1/8% NOTES DUE JANUARY 15, 1997
The 8 1/8% Notes Due January 15, 1997 (the "8 1/8% January 15, 1997 Notes")
are limited to $150,000,000 aggregate principal amount and will mature on
January 15, 1997. The 8 1/8% January 15, 1997 Notes are not redeemable prior to
maturity and no sinking fund is provided for the 8 1/8% January 15, 1997 Notes.
The 8 1/8%
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<PAGE> 27
January 15, 1997 Notes bear interest from January 20, 1987, payable
semi-annually in arrears on each January 15 and July 15, commencing July 15,
1987 to the persons in whose names the 8 1/8% January 15, 1997 Notes are
registered at the close of business on the first day of January or July
preceding such January 15 or July 15.
TERMS AND PROVISIONS OF 9 1/2% NOTES DUE MARCH 15, 1994
The 9 1/2% Notes Due March 15, 1994 (the "9 1/2% March 15, 1994 Notes") are
limited to $100,000,000 aggregate principal amount and will mature on March 15,
1994. The 9 1/2% March 15, 1994 Notes are not redeemable prior to maturity and
no sinking fund is provided for the 9 1/2% March 15, 1994 Notes. The 9 1/2%
March 15, 1994 Notes bear interest from March 20, 1991, payable semi-annually on
each March 15 and September 15, commencing September 15, 1991 to the persons in
whose names the 9 1/2% March 15, 1994 Notes are registered at the close of
business on the first day of March or September preceding such March 15 or
September 15. The 9 1/2% March 15, 1994 Notes are represented by one or more
permanent global certificates registered in the name of the Depositary or its
nominee.
TERMS AND PROVISIONS OF MHC MEDIUM-TERM NOTES
Set forth below is a table indicating the issuance date and the maturities
of the $8,500,000 aggregate principal amount of MHC Medium-Term Notes (the "MHC
Medium-Term Notes") issued and outstanding as of September 30, 1993. The MHC
Medium-Term Notes will mature from 9 months to 15 years from their date of
issue. The MHC Medium-Term Notes are not subject to any sinking fund and are not
redeemable prior to maturity.
<TABLE>
<CAPTION>
ISSUANCE DATE PRINCIPAL AMOUNT MATURITY DATE RATE
---------------------- ---------------- ---------------------- -----
<S> <C> <C> <C>
February 13, 1987..... $ 500,000 January 18, 1994...... 7.85%
February 17, 1987..... $5,000,000 February 17, 1994..... 7.88%
March 6, 1987......... $3,000,000 March 6, 1994......... 7.82%
</TABLE>
MHC SUBORDINATED SECURITIES
MHC Subordinated Securities are unsecured debt obligations of the Company.
Payment of the principal of the MHC Subordinated Securities is subject to
acceleration only in the event of bankruptcy, insolvency or reorganization of
the Company. The provisions of the MHC Subordinated Indenture do not restrict
the ability of the Company to incur additional MHC Senior Indebtedness (as
defined below) from time to time.
Subordination. The MHC Subordinated Securities are subordinated, by their
terms, to Senior Indebtedness, Additional Senior Obligations and all other
obligations of the Company to its creditors other than any obligation of the
Company as is by its terms expressly stated to be not superior in right of
payment to or to rank pari passu in right of payment with such MHC Subordinated
Securities (collectively, "MHC Senior Indebtedness"). The MHC Subordinated
Securities are also referred to in this Prospectus as Assumed MHC Subordinated
Indebtedness.
No payment pursuant to the MHC Subordinated Securities may be made, and no
holder of MHC Subordinated Securities shall be entitled to demand or receive any
such payment unless all amounts of principal, premium, if any, and interest then
due on all MHC Senior Indebtedness shall have been paid in full or if, at the
time of such payment or immediately after giving effect thereto, there shall
exist with respect to any such MHC Senior Indebtedness any event of default
permitting the holders thereof to accelerate the maturity thereof or any event
which, with notice or lapse of time or both, would become such an event of
default. Such subordination will not prevent the occurrence of any default in
respect of the MHC Subordinated Securities. See "Defaults and Waivers Thereof"
below.
Upon any distribution of the assets of the Company upon dissolution,
winding-up, liquidation or reorganization, the holders of MHC Senior
Indebtedness will be entitled to receive payment in full of principal, premium,
if any, and interest before any payment is made on the MHC Subordinated
Securities. By reason of such subordination, in the event of the insolvency of
the Company, holders of MHC Senior
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<PAGE> 28
Indebtedness may receive more ratably, and holders of MHC Subordinated
Securities may receive less ratably, than other creditors of the Company,
including holders of CBC Subordinated Securities. See "Description of CBC Debt
Securities -- CBC Subordinated Securities".
The MHC Subordinated Securities will not be subordinated to indebtedness of
the Company which is not MHC Senior Indebtedness, and the creditors of the
Company who do not act hold MHC Senior Indebtedness, and the creditors of the
Company who do act hold MHC Senior Indebtedness will not benefit from the
subordination provisions described herein. In the event of the bankruptcy or
reorganization of the Company, such other creditors would rank pari passu in
right of payment with holders of the MHC Subordinated Securities, subject,
however, to the broad equity powers of a Federal bankruptcy court pursuant to
which such court may, among other things, reclassify the claims of holders of
any series of MHC Subordinated Securities into a class of claims having a
different relative priority with respect to the claims of such other creditors
or any other claims against the Company.
Defaults and Waiver Thereof. The MHC Subordinated Indenture provides that
the happening of one or more of the following events shall constitute an Event
of Default with respect to any series of MHC Subordinated Securities then
outstanding under the MHC Subordinated Indenture: (i) default for 30 days in the
payment of any instalment of interest on any MHC Subordinated Securities of that
series; (ii) default in the payment, when due, of the principal of (or premium,
if any, on) any MHC Subordinated Securities of that series; (iii) default, for
60 days after written notice, in the observance or performance of any other of
the covenants or agreements of the Company in the MHC Subordinated Securities of
that series or in the MHC Subordinated Indenture relating to that series; and
(iv) certain events of insolvency. In case (a) an Event of Default shall have
occurred and be continuing with respect to any series of MHC Subordinated
Securities then outstanding under the MHC Subordinated Indenture (other than MHC
Subordinated Securities designated as Primary Capital Securities), or (b)
certain events of insolvency with respect to the Company shall have occurred and
be continuing with respect to any series of MHC Subordinated Securities then
outstanding under the MHC Subordinated Indenture that has been designated as
Primary Capital Securities, then, the MHC Subordinated Trustee or the holders of
at least 25% in aggregate principal amount of the MHC Subordinated Securities of
that series which are then outstanding may declare the principal of all MHC
Subordinated Securities 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 aggregate principal amount of the MHC
Subordinated Securities of that series, upon the conditions provided in the MHC
Subordinated Indenture. The MHC Subordinated Indenture provides that the MHC
Subordinated Trustee shall, within 90 days after the occurrence of a default
with respect to the MHC Subordinated Securities of any series, give to the
holders of the MHC Subordinated Securities of that series notice of all uncured
defaults known to it (the term "default" being defined to include the events
specified above without grace periods or notice); provided that, except in the
case of default in payment of principal (or premium, if any) or interest, if
any, in respect of the MHC Subordinated Securities of that series, the MHC
Subordinated Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee, or a trust committee of
directors or responsible officers or both, of the MHC Subordinated Trustee, in
good faith determines that the withholding of such notice is in the interest of
such holders. The Company is required to furnish to the MHC Subordinated Trustee
annually an officers' certificate to the effect that the Company is not in
default under any provision of the Indenture.
Subject to the provisions of the MHC Subordinated Indenture relating to the
duties of the MHC Subordinated Trustee, the MHC Subordinated Trustee is under no
obligation to exercise any of its rights or powers under the MHC Subordinated
Indenture at the request, order or direction of any of the holders of the MHC
Subordinated Securities, unless such holders have offered to the MHC
Subordinated Trustee reasonable indemnity. Subject to such provision for
indemnification, the holders of a majority in principal amount of the MHC
Subordinated Securities of any series then outstanding under the MHC
Subordinated Indenture have the right to direct the time, method and place of
conducting any proceeding for any remedy available to, or exercising any trust
or power conferred on, the MHC Subordinated Trustee with respect to the MHC
Subordinated Securities of such series.
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<PAGE> 29
Modification of the MHC Subordinated Indenture. The MHC Subordinated
Indenture provides that, with the consent of the holders of not less than
66 2/3% in aggregate principal amount then outstanding under the MHC
Subordinated Indenture of the MHC Subordinated Securities of all series to be
affected (voting as one class), modifications and alterations of the MHC
Subordinated Indenture may be made which affect the rights of the holders of the
MHC Subordinated Securities of each such series, but no such modification or
alteration may be made which would (i) extend the fixed maturity of any MHC
Subordinated Security or reduce the principal amount thereof or reduce the rate
or extend the time of payment of interest thereon or (ii) reduce the
above-stated percentage of holders required to modify or alter the MHC
Subordinated Indenture, without the consent of all the holders of the MHC
Subordinated Securities and other securities then outstanding under the MHC
Subordinated Indenture to be affected thereby.
Set forth below are the principal terms of the MHC Subordinated Securities
issued and outstanding as of September 30, 1993, with respect to which offers
and sales relating to secondary market transactions may be made by direct or
indirect wholly-owned subsidiaries of the Company. Reference is made to the
Glossary for some of the definitions of the terms used herein.
TERMS AND PROVISIONS OF 8 1/2% SUBORDINATED CAPITAL NOTES DUE FEBRUARY 15, 1999
The 8 1/2% Subordinated Capital Notes Due February 15, 1999 (the "8 1/2%
February 15, 1999 Notes") are limited to $150,000,000 aggregate principal amount
and will mature on February 15, 1999. The 8 1/2% February 15, 1999 Notes are not
redeemable prior to maturity and no sinking fund is provided for the 8 1/2%
February 15, 1999 Notes. The 8 1/2% February 15, 1999 Notes will bear interest
from February 24, 1987, payable semi-annually on each February 15 and August 15,
commencing August 15, 1987 to the persons in whose names the 8 1/2% February 15,
1999 Notes are registered at the close of business on the first day of February
or August preceding such February 15 or August 15. At maturity, the 8 1/2%
February 15, 1999 Notes will be exchanged for Capital Securities of the Company
having a Market Value equal to the principal amount of the 8 1/2% February 15,
1999 Notes, except to the extent that the Company, at its option, elects to pay
in cash the principal amount of the 8 1/2% February 15, 1999 Notes, in whole or
in part, from Designated Proceeds. The Company has Designated Proceeds
sufficient to pay the 8 1/2% February 15, 1999 Notes in cash at maturity.
PERMANENT GLOBAL MHC DEBT SECURITIES
Certain series of the MHC Senior Securities were issued in permanent global
form. See "Permanent Global Debt Securities" for a discussion of the rights of
beneficial owner of interest in permanent global debt securities.
INFORMATION CONCERNING THE TRUSTEES
The Company, Chemical Bank and certain other subsidiaries of the Company
maintain deposits with, and conduct other business transactions with, the
trustees under each of the MHC Indentures in the ordinary course of business.
Morgan Guaranty Trust Company of New York is the trustee under the CBC
Subordinated Indenture.
PERMANENT GLOBAL DEBT SECURITIES
Certain series of Debt Securities may have been issued as permanent global
Debt Securities. Each such global Debt Security has been deposited with, or on
behalf of, The Depository Trust Company, as depositary (the "Depositary"), or
its nominee and registered in the name of a nominee of the Depositary. Except
under the limited circumstances described below, permanent global Debt
Securities will not be exchangeable for definitive certificated Debt Securities.
Ownership of beneficial interests in a permanent global Debt Security will
be limited to institutions that have accounts with the Depositary or its nominee
("participants") or persons that may hold interests through participants. In
addition, ownership of beneficial interests by participants in a permanent
global Debt Security will be evidenced only by, and the transfer of that
ownership interest will be effected only through, records
27
<PAGE> 30
maintained by the Depositary or its nominee for a permanent global Debt
Security. Ownership of beneficial interests in such permanent global Debt
Security by persons that hold through participants will be evidenced only by,
and the transfer of that ownership interest within such participant will be
effected only through, records maintained by such participant. The Depositary
has no knowledge of the actual beneficial owners of the Debt Securities.
Beneficial owners will not receive written confirmation from the Depositary of
their purchase, but beneficial owners are expected to receive written
confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the participants through which the beneficial
owners entered the transaction. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such laws may impair the ability to transfer beneficial
interests in a permanent global Debt Security.
The Company has been advised by the Depositary that upon the issuance of a
permanent global Debt Security and the deposit of such permanent global Debt
Security with the Depositary, the Depositary will immediately credit, on its
book-entry registration and transfer system, the respective principal amounts
represented by such permanent global Debt Security to the accounts of such
participants.
Payment of principal of, and interest on, Debt Securities represented by a
permanent global Debt Security registered in the name of or held by the
Depositary or its nominee will be made to the Depositary or its nominee, as the
case may be, as the registered owner and holder of the permanent global Debt
Security representing such Debt Securities. The Company has been advised by the
Depositary that upon receipt of any payment of principal of, or interest on, a
permanent global Debt Security, the Depositary will immediately credit, on its
book-entry registration and transfer system, accounts of participants with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such permanent global Debt Security as shown in the
records of the Depositary. Payments by participants to owners of beneficial
interests in a permanent global Debt Security held through such participants
will be governed by standing instructions and customary practices, as is now the
case with securities held for the accounts of customers in bearer form or
registered in "street name", and will be the sole responsibility of such
participants, subject to any statutory or regulatory requirements as may be in
effect from time to time.
None of the Company, the trustees or any other agent of the Company or the
trustees will have any responsibility or liability for any aspect of the records
of the Depositary, any nominee or any participant relating to, or payments made
on account of, beneficial interests in a permanent global Debt Security or for
maintaining, supervising or reviewing any of the records of the Depositary, any
nominee or any participant relating to such beneficial interests.
A permanent global Debt Security is exchangeable for definitive Debt
Securities registered in the name of, and a transfer of a permanent global Debt
Security may be registered to, any person other than the Depositary or its
nominee, only if:
(a) the Depositary notifies the Company that it is unwilling or unable
to continue as Depositary for such permanent global Debt Security or if at
any time the Depositary ceases to be registered under the Exchange Act;
(b) the Company in its sole discretion determines that such permanent
global Debt Security shall be exchangeable for definitive Debt Securities
in registered form; or
(c) there shall have occurred and be continuing an Event of Default or
an event which, with notice or the lapse of time or both, would constitute
an Event of Default under the CBC Debt Securities.
Any permanent global Debt Security that is exchangeable pursuant to the
preceding sentence will be exchangeable in whole for definitive Debt Securities
in registered form, of like tenor and of an equal aggregate principal amount as
the permanent global Debt Security, in denominations of $1,000 and integral
multiples thereof. Such definitive Debt Securities will be registered in the
name or names of such persons as the Depositary shall instruct the registrar. It
is expected that such instructions may be based upon directions received by the
Depositary from its participants with respect to ownership of beneficial
interests in such permanent global Debt Security. Any principal and interest
will be payable, the transfer of the definitive Debt Securities will be
registerable and the definitive Debt Securities will be exchangeable at the
corporate trust
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<PAGE> 31
office of Chemical Bank in the Borough of Manhattan, The City of New York,
provided that payment of interest may be made at the option of the Company by
check mailed to the address of the person entitled thereto as of the record date
and as shown on the register for the Debt Securities.
Except as provided above, owners of the beneficial interests in a permanent
global Debt Security will not be entitled to receive physical delivery of Debt
Securities in definitive form and will not be considered the holders thereof for
any purpose under the Indentures, and no permanent global Debt Security shall be
exchangeable except for another permanent global Debt Security of like
denomination and tenor to be registered in the name of the Depositary or its
nominee. Accordingly, each person owning a beneficial interest in such permanent
global Debt Security must rely on the procedures of the Depositary and, if such
person is not a participant, on the procedures of the participant through which
such person owns its interest, to exercise any rights of a holder under the
permanent global Debt Security or the Indentures.
The Company understands that, under existing industry practices, in the
event that the Company requests any action of holders, or an owner of a
beneficial interest in such permanent global Debt Security desires to give or
take any action that a holder is entitled to give or take under the Debt
Securities or the Indentures, the Depositary would authorize the participants
holding the relevant beneficial interests to give or take such action, and such
participants would authorize beneficial owners owning through such participants
to give or take such action or would otherwise act upon the instructions of
beneficial owners owning through them.
The Depositary has advised the Company that the Depositary is a limited
purpose trust company organized under the laws of the State of New York, a
"banking organization" within the meaning of the New York Banking Law, a member
of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code and a "clearing agency" registered under
the Exchange Act. The Depositary was created to hold securities of its
participants and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical movement of securities certificates. The Depositary's participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. The Depositary is owned by a
number of its participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc. Access to the Depositary's book-entry system is also available to
others, such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly. The rules applicable to the Depositary and its participants are on
file with the Commission.
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GLOSSARY
As used in the descriptions of CBC Debt Securities (whether CBC Senior
Securities or CBC Subordinated Securities, but excluding Senior Medium-Term
Notes) the following terms shall have the following meanings:
"Calculation Agent" means Chemical Bank in such capacity.
"Interest Payment Date" means with respect to (i) the Floating Rate Senior
Notes Due 1994, the sixteenth day of each March, June, September and December;
(ii) the Floating Rate Notes Due August 3, 1994, the third day of each February,
May, August and November; (iii) the Floating Rate Senior Notes Due December 1,
1994, the first day of each March, June, September and December; (iv) the
Floating Rate Senior Notes Due February 15, 1995, the fifteenth day of each
February, May, August and November; (v) the Floating Rate Senior Notes Due 1995,
the eighth day of each March, June, September and December; (vi) the Floating
Rate Senior Notes Due March 11, 1996, the tenth day of each March, June,
September and December; and (vii) the Floating Rate Senior Notes Due May 6,
1996, the third Wednesday of each February, May, August and November.
"Interest Period" means with respect to each CBC Debt Security the period
beginning on and including the issue date of such CBC Debt Security and ending
on but excluding the first Interest Payment Date and each successive period
beginning on and including an Interest Payment Date and ending on but excluding
the next succeeding Interest Payment Date.
"LIBOR" will be determined by the Calculation Agent in accordance with the
following provisions:
(i) For each Interest Period, LIBOR will be determined on the
applicable Interest Determination Date on the basis of the offered rates
for deposits of not less than U.S. $1,000,000 having a maturity of three
months commencing on the second London Business Day immediately following
such Interest Determination Date, which appear on the Reuters Screen LIBO
Page as of 11:00 A.M., London time, on such Interest Determination Date. If
at least two such offered rates appear on the Reuters Screen LIBO Page, the
rate in respect of such Interest Determination Date will be the arithmetic
mean (rounded to the nearest one-hundredth of a percent, with five
one-thousandths of a percent rounded upwards) of such offered rates as
determined by the Calculation Agent. If fewer than two offered rates
appear, LIBOR in respect of such Interest Determination Date will be
determined as described in (ii) below.
(ii) On any Interest Determination Date on which fewer than two
offered rates for deposits of not less than U.S. $1,000,000 having a
maturity of three months appear on the Reuters Screen LIBO Page as
specified in (i) above, LIBOR will be determined on the basis of the rates
at which deposits in U.S. dollars having a maturity of three months
commencing on the second London Business Day immediately following such
Interest Determination Date and in a principal amount of not less than U.S.
$1,000,000 that is representative for a single transaction in such market
at such time are offered by four major banks in the London interbank market
selected by the Calculation Agent at approximately 11:00 A.M., London time,
on such Interest Determination Date to prime banks in the London interbank
market. The Calculation Agent will request the principal London office of
each of such banks to provide a quotation of its rate. If at least two such
quotations are provided, LIBOR in respect of such Interest Determination
Date will be the arithmetic mean (rounded to the nearest one-hundredth of a
percent, with five one-thousandths of a percent rounded upwards) of such
quotations. If fewer than two quotations are provided, LIBOR in respect of
such Interest Determination Date will be the arithmetic mean (rounded to
the nearest one-hundredth of a percent, with five one-thousandths of a
percent rounded upwards) of the rates quoted by three major banks in New
York City selected by the Calculation Agent at approximately 11:00 A.M.,
New York City time, on such Interest Determination Date for loans in U.S.
dollars to leading European banks having a maturity of three months
commencing on the second London Business Day immediately following such
Interest Determination Date and in a principal amount of not less than U.S.
$1,000,000 that is representative for a single transaction in such market
at such time; provided, however, that if fewer than three banks selected as
aforesaid by the Calculation Agent are quoting as mentioned in this
sentence, LIBOR will be LIBOR in effect on such Interest Determination
Date.
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For the purpose of calculating LIBOR, the following terms shall have the
following meanings:
"Interest Determination Date" for any Interest Period shall mean the second
London Business Day preceding the Interest Payment Date commencing such Interest
Period or, in the case of the first Interest Period, the second London Business
Day preceding the original issue date of the Notes.
"London Business Day" means a Business Day on which dealings in deposits in
U.S. Dollars are transacted in the London interbank market.
"Reuters Screen LIBO Page" shall mean 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).
As used in the description and in the description of the Senior Medium-Term
Notes above, the following terms shall have the following meanings:
"Business Day" means any day that is not a Saturday or Sunday and that, in
New York City, is not a day on which banking institutions are authorized or
required by law or executive order to close.
"Calculation Agent" means the agent appointed by the Company to calculate
interest rates for Floating Rate Notes.
"Calculation Date" means the date on which the Calculation Agent is to
calculate an interest rate for a Floating Rate Note. Unless otherwise specified
in such Note and the description with respect to the relevant Medium-Term Notes,
the Calculation Date, where applicable, pertaining to an Interest Determination
Date for a Floating Rate Note will be the first to occur of (i) the tenth
calendar day after such Interest Determination Date or, if such day is not a
Business Day, the next succeeding Business Day or (B) the Business Day preceding
the applicable Interest Payment Date or date of maturity (or the date of
redemption or repayment, if any) of such Note, as the case may be.
"CD Rate" means, with respect to any Interest Determination Date, the rate
on such date for negotiable certificates of deposit having the Index Maturing
designated in the description with respect to the relevant Medium-Term Notes as
published in H.15(519) under the heading "CDs (Secondary Market)" or, if not so
published by 9:00 A.M., New York City time, on the Calculation Date pertaining
to such Interest Determination Date, the CD Rate will be the rate on such
Interest Determination Date for negotiable certificates of deposit of the Index
Maturity designated in the description with respect to the relevant Medium-Term
Notes as published in Composite Quotations under the heading "Certificates of
Deposit". If such rate is not yet published by 3:00 P.M., New York City time, on
the Calculation Date pertaining to such Interest Determination Date, then the CD
Rate on such Interest Determination Date will be calculated by the Calculation
Agent and will be the arithmetic mean (rounded to the nearest one-hundredth of a
percent, with five one-thousandths of a percent rounded upwards) of the
secondary market offered rates as of 10:00 A.M., New York City time, on such
Interest Determination Date, quoted by three leading nonbank dealers in
negotiable U.S. dollar certificates of deposit in New York City selected by the
Calculation Agent for negotiable certificates of deposit in a denomination of
$5,000,000 of major United States money market banks of the highest credit
standing (in the market for negotiable certificates of deposit) with a remaining
maturity closet to the Index Maturity designated in the pricing Supplement;
provided, however, that if fewer than three dealers selected as aforesaid by the
Calculation Agent are quoting as mentioned in this sentence, the CD Rate will be
the CD Rate in effect on such Interest Determination Date.
"Commercial Paper Rate" means, with respect to any Interest Determination
Date, the Money Market Yield (as defined below) of the rate on such date for
commercial paper having the Index Maturity designated in description with
respect to the relevant Medium-Term Notes as published in H.15(519) under the
heading "Commercial paper" or, if not so published by 9:00 A.M., New York city
time, on the Calculation Date pertaining to such Interest Determination Date,
the Commercial Paper Rate will be the Money Market Yield of the rate on such
Interest Determination Date for commercial paper having the Index Maturity
designated in the description with respect to the relevant Medium-Term Notes as
published in Composite Quotations under the heading "Commercial Paper". If such
rate is not yet published by 3:00 P.M., New York City time,
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<PAGE> 34
on the Calculation Date pertaining to such Interest Determination Date, then the
Commercial Paper Rate for such Interest Determination Date will be calculated by
the Calculation Agent and will be the Money Market Yield of the arithmetic mean
(rounded to the nearest one-hundredth of a percent, with five one-thousandths of
a percent rounded upwards) of the offered rates of three leading dealers of
commercial paper in New York City selected by the Calculation Agent as of 11:00
A.M., New York City time, on such Interest Determination Date for commercial
paper having the Index Maturity designated in the applicable Pricing Supplement
placed for an industrial issuer whose bond rate is "Aa", or the equivalent, from
a nationally recognized statistical rating organization; provided, however, that
if fewer than three dealers selected as aforesaid by the Calculation Agent are
quoting as mentioned in this sentence, the Commercial Paper Rate will be the
Commercial Paper Rate in effect on such Interest Determination Date.
"Composite Quotations" means the daily statistical release entitled
"Composite 3:30 P.M. Quotations for U.S. Government Securities", or any
successor publication, published by the Federal Reserve Bank of New York.
"Money Market Yield" means a yield (expressed as a percentage rounded to
the nearest one-hundredth of a percent, with five one-thousandths of a percent
rounded upwards) calculated in accordance with the following formula:
<TABLE>
<S> <C> <C>
D X 360
Money Market Yield = --------------- X 100
360 - (D X M)
</TABLE>
where "D" refers to the per annum rate for the 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.
"Designated LIBOR Page" means either, (a) if "LIBOR Reuters" is designated
in the related LIBOR Note and the description with respect to the relevant
Medium-Term Notes, the display on the Reuters Monitor Money Rates Service for
the purpose of displaying the London interbank rates of major banks for the
applicable Index Currency, or (b) if "LIBOR Telerate" is designated in the
related LIBOR Note and the description with respect to the relevant Medium-Term
Notes, the display on the Dow Jones Telerate service for the purpose of
displaying the London interbank rates of major banks for the applicable Index
Currency. If neither LIBOR Reuters nor LIBOR Telerate is so specified, LIBOR for
the applicable Index Currency will be determined as if LIBOR Telerate had been
specified.
"Federal Funds Effective Rate" means, with respect to any Interest
Determination Date, the rate on such date for Federal Funds as published in H.15
(519) under the heading "Federal Funds (Effective)" or, if not so published by
9:00 A.M., New York City time, on the Calculation Date pertaining to such
Interest Determination Date, the Federal Funds Effective Rate will be the rate
on such Interest Determination Date as published in Composite Quotations under
the heading "Federal Funds/Effective Rate". If such rate is not yet published by
3:00 P.M., New York City time, on the Calculation Date pertaining to such
Interest Determination Date, the Federal Funds Effective Rate for such Interest
Determination Date will be calculated by the Calculation Agent and will be the
arithmetic mean (rounded to the nearest one-hundredth of a percent, with five
one-thousandths of a percent rounded upwards) of the rates for the last
transaction in overnight Federal funds arranged by three leading brokers of
Federal funds transactions in New York City selected by the Calculation Agent as
of 9:00 A.M., New York City time, on such Interest Determination Date; provided,
however, that if fewer than three brokers selected as aforesaid by the
Calculation Agent are quoting as mentioned in this sentence, the Federal Funds
Effective Rate will be the Federal Funds Effective Rate in effect on such
Interest Determination Date.
"Fixed Rate Note" means a Note that bears interest at a fixed rate or
rates.
"Floating Rate Note" means a Note on which interest rates are determined,
and adjusted periodically, by reference to an interest rate basis or formula
(which may include the CD Rate, the Commercial Paper Rate, the Federal Funds
Effective Rate, LIBOR, the Treasury Rate or the Prime Rate), adjusted by a
Spread or Spread Multiplier, if any.
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<PAGE> 35
"H.15(519)" means the publication entitled "Statistical Release H.15(519),
Selected Interest Rates", or any successor publication, published by the Board
of Governors of the Federal Reserve System.
"Index Currency" means the currency (including composite currencies)
specified in the related LIBOR Note and the description with respect to the
relevant Medium-Term Notes as the currency for which LIBOR shall be calculated.
If no currency is so specified, the Index Currency shall be U.S. dollars.
"Index Maturity" means the period of time designated as the representative
maturity of the certificates of deposit, the commercial paper, the Index
Currency or the Treasury bills, respectively, by reference to transactions in
which the CD Rate, the Commercial Paper Rate, LIBOR and the Treasury Rate,
respectively, are to be calculated, as set forth in a Note bearing interest at
one of those rates and the description with respect to the relevant Medium-Term
Notes.
"Interest Determination Date" means the date as of which the interest rate
for a Floating Rate Note is to be calculated, to be effective as of the
following Reset Date and calculated on the related Calculation Date (except in
the case of LIBOR, which is calculated on the Interest Determination Date).
Unless otherwise specified in such Note and the description with respect to the
relevant Medium-Term Notes, (i) the Interest Determination Date pertaining to a
Reset Date for a CD Rate Note, Commercial Paper Rate Note, Federal Funds
Effective Rate Note or Prime Rate Note will be the second Business Day preceding
such Reset Date, (ii) the Interest Determination Date pertaining to a Reset Date
for a LIBOR Note will be the second London Business Day preceding such Reset
Date and (iii) the Interest Determination Date pertaining to a Reset Date for a
Treasury Rate Note will be the day of the week during which such Reset Date
falls on which Treasury bills of the Index Maturity designated in the
description with respect to the relevant Medium-Term Notes are auctioned.
Treasury bills are usually sold at auction on Monday of each week, unless that
day is a legal holiday, in which case the auction is usually held on the
following Tuesday, except that such auction may be held on the preceding Friday.
If, as the result of a legal holiday, an auction is so held on the preceding
Friday, such Friday will be the Interest Determination Date pertaining to the
Reset Date occurring in the next succeeding week.
"Interest Payment Date" means the date on which payments of interest on a
Note (other than payments on maturity) are to be made.
"LIBOR" will be determined by the Calculation Agent in accordance with the
following provisions:
(i) On each Interest Determination Date, LIBOR will be either, (a) if
"LIBOR Reuters" is specified in the related LIBOR Note and the description
with respect to the relevant Medium-Term Notes, the arithmetic mean of the
offered rates (unless the specified Designated LIBOR Page by its terms
provides only for a single rate, in which case such single rate shall be
used) for deposits in the Index Currency having the Index Maturity
designated in the related LIBOR Note and the description with respect to
the relevant Medium-Term Notes commencing on the second London Business Day
immediately following the applicable Interest Determination Date that
appears on the Designated LIBOR Page specified in the related LIBOR Note
and the description with respect to the relevant Medium-Term Notes as of
11:00 a.m., London time, on that 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 related LIBOR Note and the description with respect to the
relevant Medium-Term Notes, the rate for deposits in the Index Currency
having the Index Maturity designated in the related LIBOR Note and the
description with respect to the relevant Medium-Term Notes, commencing on
the second London Business Day immediately following the applicable
Interest Determination Date that appears on the Designated LIBOR Page
specified in the related LIBOR Note and the description with respect to the
relevant Medium-Term Notes as of 11:00 a.m., London time, on that Interest
Determination Date. If fewer than two offered rates appear (unless, as
aforesaid, only a single rate is required), or no rate appears, as
applicable, LIBOR in respect of the related Interest Determination Date
will be determined as if the parties had specified the rate described in
clause (ii) below.
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<PAGE> 36
(ii) On any Interest Determination Date on which fewer than two
offered rates for the applicable Index Maturity appear on the applicable
Designated LIBOR Page as specified in (i) above (unless the specified
Designated LIBOR Page by its terms provides only for a single rate), or no
rate appears, as applicable, LIBOR will be determined on the basis of the
rates at which deposits in the Index Currency having the Index Maturity
designated in the related LIBOR Note and the description with respect to
the relevant Medium-Term Notes commencing on the second London Business Day
immediately following such Interest Determination Date and in a principal
amount that is representative for a single transaction in such market at
such time are offered by four major banks in the London interbank market
selected by the Calculation Agent at approximately 11:00 A.M., London time,
on such Interest Determination Date to prime banks in the London interbank
market. The Calculation Agent will request the principal London office of
each of such banks to provide a quotation of its rate. If at least two such
quotations are provided, LIBOR in respect of such Interest Determination
Date will be the arithmetic mean (rounded to the nearest one-hundredth of a
percent, with five one-thousandths of a percent rounded upwards) of such
quotations. If fewer than two quotations are provided, LIBOR in respect of
such Interest Determination Date will be the arithmetic mean (rounded to
the nearest one-hundredth of a percent, with five one-thousandths of a
percent rounded upwards), of the rates quoted by three major banks in New
York City selected by the Calculation Agent at approximately 11:00 A.M.,
New York City time, on such Interest Determination Date for loans in the
Index Currency to leading European banks having the Index Maturity
designated in the related LIBOR Note and the description with respect to
the relevant Medium-Term Notes commencing on the second London Business Day
immediately following such Interest Determination Date and in a principal
amount that is representative for a single transaction in such market at
such time; provided, however, that if fewer than three banks selected as
aforesaid by the Calculation Agent are quoting as mentioned in this
sentence, LIBOR will be LIBOR in effect on such Interest Determination
Date.
"London Business Day" means a Business Day on which dealings in deposits in
U.S. Dollars are transacted in the London interbank market.
"Prime Rate" means, with respect to any Interest Determination Date, the
prime rate or lease lending rate on that date as such rate is published in
H.15(519) under the heading "Bank Prime Loan". In the event that such rate is
not published by 9:00 a.m., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, then the Prime Rate for such
Interest Determination Date will be calculated by the Calculation Agent and will
be the arithmetic mean (rounded to the nearest one-hundredth of a percent, with
five one-thousandths of a percent rounded upwards) of the rates of interest
publicly announced by each bank that appears on the Reuters Screen NYMF Page as
such bank's prime rate or base lending rate as in effect for such Interest
Determination Date. If fewer than four such rates appear on the Reuters Screen
NYMF Page on such Interest Determination Date, then the Prime Rate shall be the
arithmetic mean (rounded to the nearest one-hundredth of a percent, with five
one-thousandths of a percent rounded upwards) of the prime rates or base lending
rates (quoted on the basis of the actual number of days in the year divided by a
360-day year) as of the close of business on such Interest Determination Date by
three major banks in The City of New York selected by the calculation Agent;
provided, however, that if fewer than three banks selected as aforesaid by the
Calculation Agent are quoting as mentioned in this sentence, the Prime Rate
shall be the Prime Rate in effect on such Interest Determination Date.
"Record Date" means the date on which a Note must be held in order for the
holder to receive an interest payment on the next Interest Payment Date. Unless
otherwise specified in a Note, the Record Date for any Interest Payment Date
will be the fifteenth day (whether or not a Business Day or a London Business
Day) next preceding such Interest Payment Date.
"Reset Date" means the date on which a Floating Rate Note will begin to
bear interest at the interest rate determined as of any Interest Determination
Date. Unless otherwise specified in such Note and the description with respect
to the relevant Medium Term Notes, the Reset Dates will be: (i) in the case of
Floating Rate Notes that reset daily, each Business Day; (ii) in the case of
Floating Rate Notes (other than Treasury Rate Notes) that reset weekly,
Wednesday of each week; (iii) in the case of Treasury Rate Notes that reset
weekly, Tuesday of each week; (iv) in the case of Floating Rate Notes that reset
monthly, the third
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<PAGE> 37
Wednesday of each month; (v) in the case of Floating Rate Notes that reset
quarterly, the third Wednesday of March, June, September and December of each
year; (vi) in the case of Floating Rates Notes that reset semi-annually, the
third Wednesday of each of two months of each year specified in the description
with respect to the relevant Medium-term Notes; and (vii) in the case of
Floating Rate Notes that reset annually, the third Wednesday of one month of
each year specified in the description with respect to the relevant Medium-Term
Notes. If a Reset Date for any Floating Rate Note would otherwise be a day that
is not a Business Day (or, in the case of a LIBOR Note, a day that is not a
London Business Day), such Reset Date shall be postponed to the succeeding
Business Day or London Business Day, as the case may be, (except that, in the
case of a LIBOR Note, if such London Business Day is in the next succeeding
calendar month, such Reset Date shall be the preceding London Business Day). If
a Treasury bill auction (as described in the definition of "Interest
Determination Date") will be held on any day that would otherwise be a Reset
Date for a Treasury Rate Note, then such Reset Date will instead be the Business
Day following such auction date.
"Reuters Screen NYMF Page" means the display page designated as page "NYMF"
on the Reuters Monitor Money Rates Service (or such other page as may replace
the NYMF page on that service for the purpose of displaying prime rates or base
lending rates of major United States banks).
"Spread" means the constant amount, if any, to be added to the CD Rate, the
Commercial Paper Rate, the Federal Funds Effective Rate, LIBOR, the Treasury
Rate, the Prime Rate or any other interest rate index in effect from time to
time with respect to a Note, which amount will be set forth in such Note and
description with respect to the relevant Medium-Term Notes.
"Spread Multiplier" means the percentage by which the CD Rate, the
Commercial Paper Rate, the Federal Funds Effective Rate, LIBOR, the Treasury
Rate, the Prime Rate or any other interest rate index in effect from time to
time with respect to a Note is to be multiplied, which percentage will be set
forth in such Note and description with respect to the relevant Medium-Term
Notes.
"Treasury Rate" means, with respect to any Interest Determination Date, the
rate for the most recent auction of direct obligations of the United States
("Treasury bills") having the Index Maturity designated in the description with
respect to the relevant Medium-Term Notes as published in H.15(519) under the
heading "U.S. Government Securities-auction average (investment)" or, if not so
published by 9:00 A.M., New York City time, on the Calculation Date pertaining
to such Interest Determination Date, the Treasury Rate will be the auction
average rate (expressed as a bond equivalent, rounded to the nearest
one-hundredth of a percent, with five one-thousandths of a percent rounded
upwards, 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. Treasury bills are usually sold at auction on Monday of each week,
unless that day is a legal holiday, in which case the auction is usually held on
the following Tuesday, except that such auction may be held on the preceding
Friday. If the results of the auction of Treasury bills having the Index
Maturity designated in the description with respect to the relevant Medium-Term
Notes are not published or announced as provided above 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 will be calculated by the Calculation
Agent and will be a yield to maturity (expressed as a bond equivalent, rounded
to the nearest one-hundredth of a percent, with five one-thousandths of a
percent rounded upwards, 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 Interest Determination Date of three leading primary United States
government securities dealers selected by the Calculation Agent for the issue of
Treasury bills with a remaining maturity closest to the Index Maturity
designated in the applicable Pricing Supplement; provided, however, that if
fewer than three dealers selected as aforesaid by the Calculation Agent are
quoting as mentioned in this sentence, the Treasury Rate with respect to such
Interest Determination Date will be the Treasury Rate in effect on such Interest
Determination Date.
DESCRIPTION OF CAPITAL STOCK
The following summary does not purport to be complete and is subject in all
respects to the applicable provisions of the General Corporation Law of the
State of Delaware, the Company's Certificate of
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<PAGE> 38
Incorporation, including Certificates of Designations pursuant to which the
outstanding series of preferred stock were issued and the terms of the Rights
Agreement dated as of April 13, 1989, as amended (the "Rights Agreement"),
described below.
COMMON STOCK
The Company is authorized to issue up to 400,000,000 shares of Common
Stock. At September 30, 1993, the Company had outstanding 252,766,539 shares of
Common Stock (including 515,782 shares held in its treasury). As of September
30, 1993, approximately 15,500,000 shares of Common Stock were reserved for
issuance under various employee incentive and stock purchase plans and under the
Company's dividend reinvestment plan. In addition, as of such date, the Company
had also reserved 7,700,000 shares of Common Stock for issuance upon the
conversion of its 10% Convertible Preferred Stock (the "10% Preferred").
Holders of Common Stock are entitled to receive dividends when, as and if
declared by the Board of Directors of the Company out of funds legally available
therefor, provided that, so long as any shares of preferred stock are
outstanding, no dividends (other than dividends payable in Common Stock) or
other distributions (including redemptions and purchases) may be made with
respect to the Common Stock unless full dividends on the shares of preferred
stock, including accumulations in the case of cumulative preferred stock, have
been paid.
Subject to the rights, if any, of the holders of any series of preferred
stock, all voting rights are vested in the holders of shares of Common Stock,
each share being entitled to one vote on all matters presented for a vote,
including the election of directors. Holders of shares of Common Stock have
noncumulative voting rights, which means that the holders of more than 50% of
the shares voting for the election of directors can elect 100% of the directors,
and, in such event, the holders of the remaining shares voting for the election
of directors will not be able to elect any directors.
In the event of the liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, after there have been paid or set aside for
the holders of all series of preferred stock the full preferential amounts to
which such holders are entitled, the holders of Common Stock will be entitled to
share equally and ratably in any assets remaining after the payment of all debts
and liabilities.
The issued and outstanding shares of Common Stock are fully paid and
nonassessable. Holders of shares of Common Stock are not entitled to preemptive
rights. Shares of Common Stock are not convertible into shares of any other
class of capital stock.
Chemical Bank is the transfer agent, registrar and dividend disbursement
agent for the Common Stock.
SHAREHOLDERS' RIGHTS PLAN
The Company has adopted a Shareholders' Rights Plan which is intended to
protect stockholders in the event of unsolicited offers or attempts to acquire
the Company, including offers that do not treat all stockholders equally,
acquisitions in the open market of shares constituting control without offering
fair value to all stockholders and other coercive or unfair takeover tactics
that could impair the Board of Directors' ability to represent stockholders'
interests fully. Pursuant to the Shareholders' Rights Plan, the Board of
Directors declared a dividend distribution of one right (a "Right") for each
outstanding share of Common Stock to stockholders of record at the close of
business on April 24, 1989 (the "Record Date"), and authorized the issuance of
one Right (as adjusted pursuant to the Rights Agreement, as described below) for
each share of Common Stock issued between the Record Date and the Chemical
Distribution Date (as described below). Each Right entitles the registered
holder to purchase from the Company a unit consisting of one one-hundredth of a
share (a "Unit") of Junior Participating Preferred Stock at a price of $150 per
Unit, subject to adjustment. The description and terms of the Rights are set
forth in the Rights Agreement between the Company and Chemical Bank, as Rights
Agent. One Right will be distributed with each share of Common Stock issued by
the Company, including shares of Common Stock issued (i) upon the conversion of
any CBC Subordinated Securities into shares of Common Stock, (ii) in exchange
for CBC Subordinated Securities that are exchangeable for Common Stock or (iii)
upon exercise of Common Stock Warrants.
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<PAGE> 39
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person that attempts to acquire the Company without
the approval of the Board of Directors unless the offer is conditioned on a
substantial number of Rights being acquired. The Rights, however, should not
affect offers for all outstanding shares of Common Stock at a fair price and
otherwise in the best interests of the Company and its stockholders as
determined by the Board of Directors, since the Board of Directors may, at its
option, redeem all, but not fewer than all, the then outstanding Rights.
Initially, the Rights are and will be attached to all certificates
representing Common Stock at the time outstanding. The Rights will separate from
the Common Stock on the Chemical Distribution Date, which is defined as (i) 10
days after a person acquires 20% or more of Common Stock or voting power of the
Company, (ii) 10 business days following commencement of a tender offer for 25%
or more of the Common Stock or voting power of the Company or (iii) 10 business
days after an owner of 10% or more of the Common Stock or voting power of the
Company is determined by the unaffiliated "Continuing Directors" (as defined in
the Rights Agreement) to be an "Adverse Person". An Adverse Person is one who
intends to have the Company repurchase such person's ownership interest, who
intends to pressure the Company into action for the financial gain of such
person or whose ownership is likely to cause a material adverse impact on the
Company (including, but not limited to, impairment of the Company's (i)
relationships with customers, (ii) ability to maintain its capital position,
(iii) ability to meet the convenience and needs of the communities it serves,
(iv) business reputation or (v) ability to deal with governmental agencies) to
the detriment of the Company's stockholders.
If a "Flip-in Event" occurs, the holder of a Right is entitled to receive
Common Stock or other property of the Company valued at two times the exercise
price of the Right. A Flip-in Event occurs if a person acquires 20% or more of
the Common Stock or voting power of the Company (except certain offers to
acquire all of the Common Stock deemed by the Continuing Directors to be fair
and in the best interests of the Company) or if a person is determined to be an
Adverse Person.
If a "Triggering Event" occurs, the holder of a Right is entitled to
receive common stock of a company that has acquired the Company valued at two
times the exercise price of the Right. A Triggering Event occurs if the Company
is acquired in a merger or other business combination in which the Company is
not the survivor or if 50% or more of the Company's assets or earning power is
sold or transferred.
Following the occurrence of a Flip-in Event or a Triggering Event, all
Rights that are beneficially owned by an acquiring person or an Adverse Person
will be null and void.
To avoid the consequences of a Flip-in Event, the Company may redeem the
Rights in whole, but not in part, at a redemption price of $0.01 per Right.
PREFERRED STOCK
Under the Company's Certificate of Incorporation, the Board of Directors is
authorized, without further stockholder action, to provide for the issuance of
up to 200,000,000 shares of Preferred Stock, in one or more series, with such
voting powers and with such designations, preferences and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions, as shall be set forth in resolutions providing for the issue
thereof adopted by the Board of Directors or a duly authorized committee
thereof.
At September 30, 1993, there were issued and outstanding: (i) 33,647,591
shares of Adjustable Rate Cumulative Preferred Stock, Series C (the "Series C
Preferred"); (ii) 2,000,000 shares of 10 3/4% Cumulative Preferred Stock (the
"10 3/4% Preferred"); (iii) 4,000,000 shares of 10.96% Preferred Stock (the
"10.96% Preferred"); (iv) 4,000,000 shares of the 10% Preferred; (v) 14,000,000>
shares of 8 3/8% Preferred Stock (the "8 3/8% Preferred"); (vi) 2,000,000 shares
of 7.92% Cumulative Preferred Stock (the "7.92% Preferred"); (vii) 2,000,000
shares of 7.58% Cumulative Preferred Stock (the "7.58% Preferred"); and (viii)
2,000,000 shares of 7 1/2% Cumulative Preferred Stock (the "7 1/2% Preferred").
In addition, as of September 30, 1993, 4,000,000 shares of Preferred Stock,
designated as Junior Participating Preferred Stock, were reserved for issuance
pursuant to the Rights Agreement. The Company redeemed the 10 3/4% Preferred on
December 31, 1993.
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<PAGE> 40
All series of outstanding Preferred Stock rank on a parity with each other
series and all have preference over the Common Stock with respect to the payment
of dividends and the distribution of assets in the event of the liquidation or
dissolution of the Company.
Dividends on all outstanding series of Preferred Stock are cumulative. The
amounts of the cumulative dividends on the Series C Preferred vary with the
interest rates on certain U.S. Government obligations. Dividends on the 10.96%
Preferred, 10% Preferred, 8 3/8% Preferred, 7.92% Preferred, 7.58% Preferred and
7 1/2% Preferred are fixed at their respective rates. If at the time of any
annual meeting of the Company's stockholders the equivalent of six quarterly
dividends payable on such outstanding Preferred Stock are in default, the number
of directors of the Company will be increased by two and the holders of the
outstanding Preferred Stock, voting as a single class without regard to series,
will be entitled to elect those additional two directors at each such annual
meeting. Each director elected by holders of shares of the Preferred Stock shall
continue to serve as such director for the full term for which he or she shall
have been elected, notwithstanding that prior to the end of such term such
default shall cease to exist.
The affirmative vote or consent of the holders of at least two-thirds of
the outstanding shares of any series of Preferred Stock, voting as a separate
class, will be required for any amendment of the Company's Certificate of
Incorporation (or any certificate amendatory thereof or supplemental thereto
relating to any series of the Preferred Stock) which will adversely affect the
powers, preferences, privileges or rights of such series of the Preferred Stock.
The affirmative vote or consent of the holders of shares representing at least
two-thirds of the voting power of the outstanding shares of any series of
Preferred Stock and any other series of Preferred Stock ranking on a parity with
such series of the Preferred Stock as to dividends or upon liquidation, voting
as a single class without regard to series, will be required to authorize,
effect or validate (i) the creation, authorization or issuance of, (ii) the
reclassification of any authorized stock of the Company into, or (iii) the
creation, authorization or issuance of any obligation or security convertible
into or evidencing the right to purchase, any additional class or series of
stock ranking prior to such series of the Preferred Stock as to dividends or
upon liquidation. The Company may amend from time to time its Certificate of
Incorporation to increase the number of authorized shares of Preferred Stock.
Any such amendment would require the approval of the holders of a majority of
the outstanding shares of Common Stock, and the approval of the holders of a
majority of the outstanding shares of all series of Preferred Stock voting as a
single class without regard to series.
In the event of a liquidation or dissolution of the Company, the holders of
(i) 10% Preferred are entitled to receive a distribution of $50 per share; (ii)
Series C Preferred are entitled to receive a distribution of $12 per share;
(iii) 7.92% Preferred, 7.58% Preferred and 7 1/2% Preferred are each entitled to
receive a distribution of $100 per share; and (iv) 10.96% Preferred and 8%
Preferred are each entitled to receive a distribution of $25 per share plus, in
each case, accrued and unpaid dividends, if any.
Shares of Series C Preferred are redeemable at the option of the Company at
a redemption price per share of $12.36 prior to May 2, 1997 and $12 per share
thereafter. Shares of 10.96% Preferred are redeemable at the option of the
Company at any time on or after June 30, 2000 at a redemption price per share of
$25. Shares of 10% Preferred are redeemable at the option of the Company at any
time on or after May 1, 1995 at an initial redemption price per share of $53 and
thereafter at prices declining to $50 per share on and after May 1, 2001. Shares
of 8% Preferred are redeemable at the option of the Company at any time on or
after June 1, 1997 at a redemption price per share of $25. Shares of 7.92%
Preferred are redeemable at the option of the Company at any time on or after
October 1, 1997 at a redemption price per share of $100. Shares of 7.58%
Preferred are redeemable at the option of the Company at any time on or after
April 1, 1998 at a redemption price per share of $100. Shares of 7 1/2%
Preferred are redeemable at the option of the Company at any time on or after
June 1, 1998 at a redemption price per share of $100. The redemption prices set
forth above with respect to each outstanding series of Preferred Stock will be
increased, in each case, by the amount of accrued and unpaid dividends thereon,
if any, to the date fixed for redemption.
The shares of the 10% Preferred are convertible into shares of the Common
Stock at a conversion price of $26.20 per share of Common Stock, subject to
adjustment in certain events.
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<PAGE> 41
DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Securities Warrants for the purchase of CBC Debt
Securities, Preferred Stock or Common Stock. Securities Warrants may be issued
independently or together with CBC Debt Securities, Preferred Stock or Common
Stock and may be attached to or separate from such CBC Debt Securities,
Preferred Stock or Common Stock. Each series of Securities Warrants will be
issued under a separate warrant agreement (a "Securities Warrant Agreement") to
be entered into between the Company and Chemical Bank or another bank or trust
company, as warrant agent (the "Securities Warrant Agent"). The Securities
Warrant Agent will act solely as an agent of the Company in connection with the
Securities Warrants and will not assume any obligation or relationship of agency
or trust for or with any holders of Securities Warrants or beneficial owners of
Securities Warrants. Copies of the forms of Securities Warrant Agreements,
including the forms of Securities Warrant Certificates representing the
Securities Warrants, are filed as exhibits to the Registration Statement of
which this Prospectus is a part. The following summary of certain provisions of
the Securities Warrants does not purport to be complete and is subject to, and
is qualified in its entirety by reference to, all the provisions of the
Securities Warrant Agreements.
At September 30, 1993, there were no Securities Warrants outstanding. If
any Securities Warrants are issued, reference is made to the description of such
Securities Warrants included herein for the terms of such Securities Warrants,
including, where applicable: (i) the designation, aggregate principal amount,
currencies, denominations and terms of the series of CBC Debt Securities
purchasable upon exercise of such Securities Warrants and the price at which
such CBC Debt Securities may be purchased upon such exercise; (ii) the
designation, number of shares, stated value and terms (including, without
limitation, liquidation, dividend, conversion and voting rights) of the series
of Preferred Stock purchasable upon exercise of Securities Warrants to purchase
Preferred Stock and the price at which such number of shares of Preferred Stock
of such series may be purchased upon such exercise; (iii) the number of shares
of Common Stock purchasable upon the exercise of Securities Warrants to purchase
Common Stock and the price at which such number of shares of Common Stock may be
purchased upon such exercise; (iv) the date on which the right to exercise such
Securities Warrants shall commence and the date (the "Expiration Date") on which
such right shall expire; (v) United States Federal income tax consequences
applicable to such Securities Warrants; and (vi) any other terms of such
Securities Warrants. Securities Warrants for the purchase of Common Stock will
be offered and exercisable for U.S. dollars only. Securities Warrants will be
issued in registered form only. The exercise price for Securities Warrants will
be subject to adjustment as described herein.
Each Securities Warrant will entitle the holder thereof to purchase such
principal amount of CBC Debt Securities or such number of shares of Preferred
Stock or Common Stock at such exercise price as shall in each case be set forth
in, or calculable from, the description herein relating to the Securities
Warrants, which exercise price may be subject to adjustment upon the occurrence
of certain events. 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 Securities Warrants will become void. The place or places where, and
the manner in which, Securities Warrants may be exercised shall be described
herein.
Prior to the exercise of any Securities Warrants to purchase CBC Debt
Securities, Preferred Stock or Common Stock, holders of such Securities Warrants
will not have any of the rights of holders of the CBC Debt Securities, Preferred
Stock or Common Stock, as the case may be, purchasable upon such exercise,
including the right to receive payments of principal of (and premium, if any) or
interest, if any, on the CBC Debt Securities purchasable upon such exercise or
to enforce covenants in the applicable Indenture, or to receive payments of
dividends, if any, on the Preferred Stock or Common Stock purchasable upon such
exercise or to exercise any applicable right to vote.
DESCRIPTION OF CURRENCY WARRANTS
The Company may issue Currency Warrants. The following description of the
terms of the Currency Warrants sets forth certain general terms and provisions
of Currency Warrants as described herein. At September 30, 1993 no Currency
Warrants were outstanding. If any Currency Warrants are issued, the
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<PAGE> 42
particular terms of such Currency Warrants and the extent, if any, to which such
general provisions do not apply to such Currency Warrants so offered will be
described herein.
Each issue of Currency Warrants will be issued under a warrant agreement
(each, a "Currency Warrant Agreement") to be entered into between the Company
and Chemical Bank or another bank or trust company, as warrant agent (the
"Currency Warrant Agent"), all as described herein. The Currency Warrant Agent
will act solely as the agent of the Company under the applicable Currency
Warrant Agreement and will not assume any obligation or relationship of agency
or trust for or with any holders of such Currency Warrants. A copy of the form
of Currency Warrant Agreement, including the form of warrant certificate, is
filed as an exhibit to the Registration Statement of which this Prospectus is a
part. The following summary of certain provisions of the Currency Warrants does
not purport to be complete and is subject to, and is qualified in its entirety
by reference to, all the provisions of the particular Currency Warrants and
Currency Warrant Agreement.
The Company may issue Currency Warrants either in the form of currency put
warrants entitling the holders thereof to receive from the Company the cash
settlement value in U.S. dollars of the right to sell a specified amount of a
specified foreign currency or composite currency (the "Designated Currency") for
a specified amount of U.S. dollars (each, a "Currency Put Warrant"), or in the
form of currency call warrants entitling the holders thereof to receive from the
Company the cash settlement value in U.S. dollars of the right to purchase a
specified amount of a Designated Currency for a specified amount of U.S. dollars
(each, a "Currency Call Warrant").
If any Currency Warrants are issued, reference is hereby made to the
description of such Currency Warrants included herein for the terms of such
Current Warrants, including, where applicable: (i) whether such Currency
Warrants shall be Currency Put Warrants, Currency Call Warrants or both; (ii)
the aggregate amount of such Currency Warrants; (iii) the offering price of such
Currency Warrants; (iv) the Designated Currency, which currency may be a foreign
currency or a composite currency, including ECU, and information regarding such
currency or composite currency; (v) the date on which the right to exercise such
Currency Warrants commences and the date on which such right expires; (vi) the
manner in which such Currency Warrants may be exercised; (vii) the circumstances
which will cause the Currency Warrants to be deemed automatically exercised;
(viii) the minimum number, if any, of such Currency Warrants exercisable at any
one time and any other restrictions on exercise; (ix) the method of determining
the amount payable in connection with the exercise of such Currency Warrants;
(x) the national securities exchange on which such Currency Warrants will be
listed, (xi) whether such Currency Warrants will be represented by certificates
or issued in book-entry form; (xii) the place or places at which payment of the
cash settlement value of such Currency Warrants is to be made by the Company, if
applicable; (xiii) information with respect to book-entry procedures, if any;
(xiv) the plan of distribution of such Currency Warrants; and (xv) any other
terms of such Currency Warrants.
Prospective holders of Currency Warrants should be aware of special United
States Federal income tax considerations applicable to instruments such as the
Currency Warrants. The description of a particular issue of Currency Warrants
shall describe such tax considerations.
Except as may otherwise be provided herein, the Currency Warrants will be
issued in the form of global Currency Warrant Certificates, registered in the
name of a depository or its nominee. Holders will not be entitled to receive
definitive certificates representing Currency Warrants. A holder's ownership of
a Currency Warrant will be recorded on or through the records of the brokerage
firm or other entity that maintains such holder's account. In turn, the total
number of Currency Warrants held by an individual brokerage firm for its clients
will be maintained on the records of the depository in the name of such
brokerage firm or its agent. Transfer of ownership of any Currency Warrant will
be effected only through the selling holder's brokerage firm.
Each issue of Currency Warrants will be listed on a national securities
exchange, subject only to official notice of issuance, as a condition of sale of
such issue of Currency Warrants. In the event that any issue of Currency
Warrants are delisted from, or permanently suspended from trading on, such
exchange, the expiration date for such Currency Warrants will be the date such
delisting or trading suspension becomes
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<PAGE> 43
effective, and Currency Warrants not previously exercised will be deemed
automatically exercised on such expiration date. The applicable Currency Warrant
Agreement will contain a covenant of the Company not to seek delisting of the
Currency Warrants, or suspension of their trading, on such exchange unless the
Company has concurrently arranged for listing on another national securities
exchange.
RISK FACTORS RELATING TO CURRENCY WARRANTS
ANY CURRENCY WARRANTS ISSUED BY THE COMPANY WILL INVOLVE A HIGH DEGREE OF
RISK, INCLUDING RISKS ARISING FROM FLUCTUATIONS IN THE PRICE OF THE UNDERLYING
CURRENCY, FOREIGN EXCHANGE RISKS AND THE RISK OF EXPIRING WORTHLESS. FURTHER,
THE CASH SETTLEMENT VALUE OF THE CURRENCY WARRANTS AT ANY TIME PRIOR TO EXERCISE
OR EXPIRATION COULD BE LESS THAN THE TRADING VALUE OF THE CURRENCY WARRANTS. THE
TRADING VALUE OF CURRENCY WARRANTS WILL FLUCTUATE BECAUSE SUCH VALUE IS
DEPENDENT, AT ANY TIME, ON A NUMBER OF FACTORS, INCLUDING THE TIME REMAINING TO
EXERCISE SUCH CURRENCY WARRANTS, THE RELATIONSHIP BETWEEN THE EXERCISE PRICE OF
CURRENCY WARRANTS AND THE PRICE AT SUCH TIME OF THE DESIGNATED CURRENCY AND THE
EXCHANGE RATE ASSOCIATED WITH THE DESIGNATED CURRENCY. BECAUSE CURRENCY WARRANTS
WILL BE UNSECURED OBLIGATIONS OF THE COMPANY, CHANGES IN THE PERCEIVED
CREDITWORTHINESS OF THE COMPANY MAY ALSO BE EXPECTED TO AFFECT THE TRADING
PRICES OF SUCH CURRENCY WARRANTS. FINALLY, THE AMOUNT OF ACTUAL CASH SETTLEMENT
OF A CURRENCY WARRANT MAY VARY AS A RESULT OF FLUCTUATIONS IN THE PRICE OF THE
DESIGNATED CURRENCY BETWEEN THE TIME INSTRUCTIONS ARE GIVEN TO EXERCISE THE
CURRENCY WARRANT AND THE TIME SUCH EXERCISE IS ACTUALLY EFFECTED.
HOLDERS OF CURRENCY WARRANTS SHOULD BE PREPARED TO SUSTAIN A LOSS OF SOME
OR ALL OF THE PURCHASE PRICE OF THEIR CURRENCY WARRANTS. PROSPECTIVE HOLDERS OF
CURRENCY WARRANTS SHOULD BE EXPERIENCED WITH RESPECT TO OPTIONS AND OPTION
TRANSACTIONS AND SHOULD REACH AN INVESTMENT DECISION ONLY AFTER CAREFUL
CONSIDERATION WITH THEIR ADVISERS OF THE SUITABILITY OF SUCH CURRENCY WARRANTS
IN LIGHT OF THEIR PARTICULAR FINANCIAL CIRCUMSTANCES, THE INFORMATION SET FORTH
UNDER "DESCRIPTION OF CURRENCY WARRANTS" HEREIN, AND TO THE OTHER INFORMATION
REGARDING THE CURRENCY WARRANTS AND THE DESIGNATED CURRENCY SET FORTH HEREIN.
CERTAIN REGULATORY MATTERS
CAPITAL RATIOS
The Federal Reserve Board has issued risk-based capital guidelines, which
require banking organizations to maintain certain ratios of "qualifying capital"
to "risk-weighted assets". "Qualifying capital" is classified in two tiers,
referred to as Tier 1 capital and Tier 2 capital. Tier 1 capital consists of
common equity, qualifying perpetual preferred equity and minority interests in
the equity accounts of unconsolidated subsidiaries, less goodwill and certain
intangible assets. Tier 2 capital consists of perpetual preferred equity not
qualifying as Tier 1 capital, a portion of the allowance for losses, mandatory
convertible debt and subordinated and other qualifying securities. The amount of
Tier 2 capital may not exceed the amount of Tier 1 capital. In calculating
"risk-weighted assets", certain risk percentages specified by the Federal
Reserve Board are applied to particular categories of on-balance sheet assets
and off-balance sheet items. The guidelines require that banking organizations
maintain a minimum ratio of Tier 1 capital to risk-weighted assets of 4% and a
minimum ratio of total capital (Tier 1 capital plus Tier 2 capital) to
risk-weighted assets of 8%.
Another capital measure, the Tier 1 leverage ratio, is defined as Tier 1
capital (as defined under the risk-based capital guidelines) divided by average
total assets (net of allowance for losses, goodwill and certain intangible
assets). The minimum leverage ratio is 3% for banking organizations that do not
anticipate significant growth and that have well-diversified risk (including no
undue interest rate risk), excellent asset quality, high liquidity and good
earnings. Other banking organizations are expected to have ratios of at least
4%-5%, depending upon their particular condition and growth plans. Higher
capital ratios could be required if warranted by the particular circumstances or
risk profile of a given banking organization. The Federal Reserve Board has not
advised the Company of any specific minimum Tier 1 leverage ratio applicable to
it.
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The following table sets forth at September 30, 1993 a summary of certain
capital ratio information for the Company.
<TABLE>
<CAPTION>
AT
SEPTEMBER 30,
1993
-------------
<S> <C>
Total Equity to Assets..................................... 7.3%
Common Equity to Assets.................................... 6.1%
Tier 1 Leverage Ratio...................................... 6.9%
Tier 1 Risk-Based Capital Ratio............................ 7.9%
Total Risk-Based Capital Ratio............................. 12.1%
</TABLE>
DIVIDENDS
Federal law imposes limitations on the payment of dividends by the
subsidiaries of the Company that are state member banks of the Federal Reserve
System (a "state member bank") or are national banks. Two different calculations
are performed to measure the amount of dividends that may be paid: a "recent
earnings" test and an "undivided profits" test. Non-bank subsidiaries of the
Company are not subject to such limitations.
Under the recent earnings test, a dividend may not be paid if the total of
all dividends declared by a bank in any calendar year is in excess of the
current year's net profits combined with the retained net profits of the two
preceding years unless the bank obtains the approval of its appropriate Federal
banking regulator (which, in the case of a state member bank, is the Federal
Reserve Board and, in the case of a national bank, is the Office of the
Comptroller of the Currency (the "Comptroller of the Currency")). Pursuant to
regulations (the "Regulations") adopted in December 1990 by the Federal Reserve
Board and the Comptroller of the Currency, "net profits" is defined as the net
income figure reported by a bank in its Reports of Condition and Income and
"retained net profits" is "net profits" less any common or preferred dividends
declared for that reporting period. The New York Banking Department also adopted
regulations in December 1990 that require net profits of New York
State-chartered banks, like Chemical Bank, to be calculated in a manner similar
to the method set forth in the Regulations.
Under the undivided profits test, a dividend may not be paid in excess of a
bank's "undivided profits then on hand", after deducting therefrom losses and
bad debts in excess of the allowance for loan and lease losses. Under the
Regulations, "allowance for loan and lease losses" and "undivided profits" are
defined as the amounts reported as such by a bank in its Reports of Condition
and Income, and "bad debts" is defined to include matured obligations due a bank
on which the interest is past due and unpaid for six months, unless the debts
are well-secured and in the process of collection. Generally, a debt is
considered "matured" when all or a part of the principal is due and payable as a
result of demand, arrival of the stated maturity date or acceleration by
contract or by operation of law. The Regulations provide that a bank may seek
the approval of its appropriate Federal banking regulator to pay a dividend
which would otherwise violate the undivided profits test. In addition, the
Regulations specify that only that portion of a bank's surplus account that is
"earned surplus" (that is, surplus derived from earnings of prior periods that
is in excess of the minimum amount of surplus required under Federal or state
law to be maintained by the bank) may be transferred to undivided profits for
the purpose of paying dividends, provided that the transfer is approved by the
bank's board of directors and the appropriate Federal banking regulator.
In accordance with the foregoing restrictions, Chemical Bank could, during
1993, without the approval of the relevant banking regulators, pay dividends
estimated at $1,375 million plus an additional amount equal to its net profits
from October 1, 1993 through the date in 1993 of any such dividend payment.
In addition to the dividend restrictions described above, the Federal
Reserve Board, the Comptroller of the Currency and the FDIC have authority under
the Financial Institutions Supervisory Act to prohibit or to limit the payment
of dividends by the banking organizations they supervise, including the Company
and its subsidiaries that are banks or bank holding companies, if, in the
banking regulator's opinion, payment of a dividend would constitute an unsafe or
unsound practice in light of the financial condition of the banking
organization.
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<PAGE> 45
FDICIA
On December 19, 1991, the Federal Deposit Insurance Corporation Improvement
Act of 1991 ("FDICIA") was enacted. Among other things, FDICIA requires the FDIC
to establish a risk-based assessment system for FDIC deposit insurance. FDICIA
also contains provisions limiting certain activities and business methods of
depository institutions, including limiting the acceptance of brokered deposits
by certain depository institutions; placing restrictions on the terms of "bank
investment contracts" that may be offered by depository institutions; and
requiring the FDIC to study the current rules applicable to the aggregation of
accounts of depositors at an institution that are entitled to FDIC insurance.
Finally, FDICIA provides for expanded regulation of depository institutions and
their affiliates, including parent holding companies, by such institutions'
appropriate Federal banking regulator, and requires the appropriate Federal
banking regulator to take "prompt corrective action" with respect to a
depository institution if such institution does not meet certain capital
adequacy standards.
Pursuant to FDICIA, the Federal Reserve Board, the FDIC and the Comptroller
of the Currency (collectively, the "Regulators") have adopted regulations,
effective December 19, 1992, setting forth a five-tier scheme for measuring the
capital adequacy of the financial institutions they supervise. Under the
regulations (commonly referred to as the "prompt corrective action" rules), an
institution would be placed in one of the following capital categories: (i) well
capitalized (an institution that has a total risk-based capital ratio of at
least 10%, a Tier 1 risk-based capital ratio of at least 6% and a Tier 1
leverage ratio of at least 5%); (ii) adequately capitalized (an institution that
has a total risk-based capital ratio of at least 8%, a Tier 1 risk-based capital
ratio of at least 4% and a Tier 1 leverage ratio of at least 4%); (iii)
undercapitalized (an institution that has a total risk-based capital ratio of
under 8% or a Tier 1 risk-based capital ratio under 4% or a Tier 1 leverage
ratio under 4%); (iv) significantly undercapitalized (an institution that has a
total risk-based capital ratio of under 6% or a Tier 1 risk-based capital ratio
under 3% or a Tier 1 leverage ratio under 3%); and (v) critically
undercapitalized (an institution that has a ratio of tangible equity to total
assets of 2% or less). The regulations would permit the appropriate Federal
banking regulator to downgrade an institution to the next lower category if the
regulator determines (i) after notice and opportunity for hearing or response,
that the institution is in an unsafe or unsound condition or (ii) that the
institution has received (and not corrected) a less-than-satisfactory rating for
any of the categories of asset quality, management, earnings or liquidity in its
most recent exam. Supervisory actions by the appropriate Federal banking
regulator will depend upon an institution's classification within the five
categories. All institutions are generally prohibited from declaring any
dividends, making any other capital distribution, or paying a management fee to
any controlling person, if such payment would cause the institution to become
undercapitalized. Additional supervisory actions are mandated for an institution
falling into one of the three "undercapitalized" categories, with the severity
of supervisory action increasing at greater levels of capital deficiency. For
example, critically undercapitalized institutions are, among other things,
restricted from making any principal or interest payments on subordinated debt
without prior approval of their appropriate Federal banking regulator. The
regulations apply only to banks and not to bank holding companies, such as the
Company; however, the Federal Reserve Board is authorized to take appropriate
action at the holding company level based on the undercapitalized status of such
holding company's subsidiary banking institution. In certain instances relating
to an undercapitalized banking institution, the bank holding company is required
to guarantee the performance of the undercapitalized subsidiary and may be
liable for civil money damages for failure to fulfill its commitments on such
guarantee.
At September 30, 1993, Chemical Bank was "well-capitalized", based on the
"prompt corrective action" ratios and guidelines described above.
The FDIC has issued a rule, effective June 16, 1992, regarding the ability
of depository institutions to accept brokered deposits. Under the rule, the term
"brokered deposits" is defined to include deposits that are solicited by a
bank's affiliates on its behalf. A significant portion of Chemical Bank's
wholesale deposits are solicited on its behalf by a broker-dealer affiliate of
Chemical Bank and, therefore, such deposits could be considered brokered
deposits. The rule provides that (i) an "undercapitalized" institution is
prohibited from accepting, renewing or rolling over brokered deposits, (ii) an
"adequately capitalized" institution must obtain a waiver from the FDIC before
accepting, renewing or rolling over brokered deposits and is not permitted to
pay interest on brokered deposits accepted in such institution's normal market
area at rates that "significantly
43
<PAGE> 46
exceed" rates paid on deposits of similar maturity in such area, and (iii) a
"well capitalized" institution may accept, renew or roll over brokered deposits
without restriction. The definitions of "well capitalized", "adequately
capitalized", and "undercapitalized" are similar to, although not exactly the
same as, the definitions utilized in the "prompt corrective action" rules
described above.
At September 30, 1993, Chemical Bank was "well capitalized" under these
regulations and the Company does not presently anticipate that the brokered
deposit regulation will have an adverse effect on its operations.
The FDIC has also issued a regulation implementing risk-based FDIC
insurance premiums. Under the assessment system, each depository institution
will be assigned to one of nine risk classifications based upon certain capital
and supervisory measures and, depending upon its classification, will be
assessed premiums ranging from 23 basis points to 31 basis points. Risk-based
FDIC insurance premiums did not have a material effect on the Company's expenses
during 1993.
Other rules adopted or currently proposed to be adopted pursuant to FDICIA
include: (i) real estate lending standards for banks to provide guidelines
concerning loan-to-value ratios for various types of real estate loans; (ii)
revisions to the risk-based capital rules to account for interest rate risk,
concentration of credit risk and the risks posed by "non-traditional
activities"; (iii) rules requiring depository institutions to develop and
implement internal procedures to evaluate and control credit and settlement
exposure to their correspondent banks; (iv) rules implementing the FDICIA
provision prohibiting, with certain exceptions, state member banks from making
equity investments of the types and amount not permissible for national banks;
(v) rules addressing various "safety and soundness" issues, including operations
and managerial standards, standards for asset quality, earnings and stock
valuations, and compensation standards for the officers, directors, employees
and principal shareholders of the depository institution; and (vi) rules
mandating enhanced financial reporting and audit requirements.
OTHER
The Financial Institutions Reform, Recovery, and Enforcement Act of 1989
("FIRREA") imposes liability on an institution the deposits of which are insured
by the FDIC for costs incurred by the FDIC in connection with the insolvency of
other FDIC-insured institutions under common control with such institution. Such
an FDIC claim against a depository institution is superior in right of payment
to claims of the holding company of such institution.
Under Federal Reserve Board policy, the Company is expected to act as a
source of financial strength to each bank subsidiary and to commit resources to
support such bank subsidiary in circumstances where it might not do so absent
such policy. Any loans by a bank holding company to any of its subsidiary banks
that qualify as capital are subordinate in right of payment to deposits and to
certain other indebtedness of the subsidiary banks. In the event of a bank
holding company's bankruptcy, any commitment by the bank holding company to a
Federal banking regulator to maintain the capital of a subsidiary bank at a
certain level will be assumed by the bankruptcy trustee and entitled to a
priority of payment.
The bank subsidiaries of the Company are subject to certain restrictions
imposed by Federal law on extensions of credit to, and certain other
transactions with, the Company and certain other affiliates and on investments
in stock or securities thereof. Such restrictions prevent the Company and such
other affiliates from borrowing from a bank subsidiary unless the loans are
secured in specified amounts. Without the prior approval of the Federal Reserve
Board, such secured loans, other transactions and investments by any bank
subsidiary are generally limited in amount as to the Company and as to each of
such other affiliates to 10% of such bank's capital and surplus and as to the
Company and all such other affiliates to an aggregate of 20% of such bank's
capital and surplus. Federal law also requires that transactions between a bank
subsidiary and the Company or certain non-bank affiliates, including extensions
of credit, sales of securities or assets and the provision of services, be
conducted on terms at least as favorable to the bank subsidiary as those that
apply or that would apply to comparable transactions with unaffiliated parties.
44
<PAGE> 47
ERISA MATTERS
The Company and CSI may be considered a "party in interest" within the
meaning of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and a "disqualified person" under corresponding provisions of the
Internal Revenue Code, as amended, with respect to certain employee benefit
plans. Certain transactions between an employee benefit plan and a party in
interest or disqualified person may result in "prohibited transactions" within
the meaning of ERISA and the Code. ANY EMPLOYEE BENEFIT PLAN PROPOSING TO INVEST
IN THE DEBT SECURITIES SHOULD CONSULT WITH ITS LEGAL COUNSEL.
OTHER MATTERS
The distribution of the Debt Securities by CSI will comply with the
requirements of Schedule E of the By-laws of the NASD regarding an NASD member
firm distributing securities of an affiliate.
EXPERTS
The financial statements of the Company incorporated in this Prospectus by
reference to the Annual Report on Form 10-K for the year ended December 31, 1992
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.
45
<PAGE> 48
- ---------------------------------------------------------
- ---------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY AGENT OR UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY
IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN
SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY
SINCE SUCH DATE.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Available Information.................... 2
Incorporation of Certain Documents by
Reference.............................. 2
Chemical Banking Corporation............. 3
Consolidated Ratios of Earnings to Fixed
Charges................................ 4
Description of CBC Debt Securities....... 5
Description of MHC Debt Securities....... 23
Permanent Global Debt Securities......... 27
Glossary................................. 30
Description of Capital Stock............. 35
Description of Securities Warrants....... 39
Description of Currency Warrants......... 39
Risk Factors Relating to Currency
Warrants............................... 41
Certain Regulatory Matters............... 41
ERISA Matters............................ 45
Other Matters............................ 45
Experts.................................. 45
</TABLE>
------------------
- ---------------------------------------------------------
- ---------------------------------------------------------
- ---------------------------------------------------------
- ---------------------------------------------------------
[CHEMICAL LOGO]
CHEMICAL BANKING
CORPORATION
DEBT SECURITIES
WARRANTS
--------------------
PROSPECTUS
--------------------
JANUARY , 1994
- ---------------------------------------------------------
- ---------------------------------------------------------
<PAGE> 49
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Certificate of Incorporation empowers the Registrant to indemnify any
director, officer, employee or agent of the Registrant or any other person who
is serving at the Registrant's request in any such capacity with another
corporation, partnership, joint venture, trust or other enterprise (including,
without limitation, an employee benefit plan) to the fullest extent permitted
under the Delaware General Corporation Law (the "DGCL") as from time to time in
effect, and any such indemnification may continue as to any person who has
ceased to be a director, officer, employee or agent and may inure to the benefit
of the heirs, executors and administrators of such a person.
The Certificate of Incorporation also empowers the Registrant by action of
the Board of Directors to purchase and maintain insurance in such amounts as the
Board of Directors deems appropriate to protect any director, officer, employee
or agent of the Registrant or any other person who is serving at the
Registrant's request in any such capacity with another corporation, partnership,
joint venture, trust or other enterprise (including, without limitation, an
employee benefit plan) against any liability asserted against him or incurred by
him in any such capacity arising out of his status as such (including, without
limitation, expenses, judgments, fines and amounts paid in settlement) to the
fullest extent permitted under the DGCL as from time to time in effect, whether
or not the Registrant would have the power to be required to indemnify any such
individual under the terms of any agreement or By-Law or the DGCL.
In addition, the Registrant's By-Laws require indemnification to the
fullest extent permitted under the DGCL as from time to time in effect. The
By-Laws provide a clear and unconditional right to indemnification for expenses
(including attorney's fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by any director or officer of the Registrant in
connection with any actual or threatened proceeding (including, to the extent
permitted by law, any derivative action) by reason of the fact that such person
is or was serving as a director, officer, employee or agent of the Registrant
or, at the request of the Registrant, of another corporation, partnership, joint
venture, trust or other enterprise (including, without limitation, an employee
benefit plan). The By-Laws specify that the right to indemnification so provided
is a contract right, set forth certain procedural and evidentiary standards
applicable to the enforcement of a claim under the By-Laws, entitle the persons
to be indemnified to be reimbursed for the expenses of prosecuting any such
claim against the Registrant and entitle them to have all expenses incurred in
advance of the final disposition of a proceeding paid by the Registrant. Such
provisions, however, are intended to be in furtherance and not in limitation of
the general right to indemnification provided in the By-Laws.
ITEM 16. LIST OF EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NUMBER DOCUMENT DESCRIPTION
- -------------- -----------------------------------------------------------------------------
<S> <C> <C>
1.1 -- Form of Debt Securities Underwriting Agreement (including form of Delayed
Delivery Contract) (incorporated by reference to Exhibit 1 to Registration
Statement on Form S-3 (File No. 33-13062) of Chemical Banking Corporation).
1.2 -- Form of Master Agency Agreement, dated as of February 1, 1990, as amended and
restated as of April 30, 1993, between Chemical Banking Corporation and
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Bear, Stearns & Co. Inc., The First Boston Corporation, Goldman, Sachs & Co.,
Shearson Lehman Brothers Inc., Morgan, Stanley & Co. Incorporated and Salomon
Brothers Inc (incorporated by reference to Exhibit 1 to the Current Report on
Form 8-K dated June 22, 1993 of Chemical Banking Corporation).
1.3 -- Form of Preferred Stock Underwriting Agreement (incorporated by reference to
Exhibit 1 to Registration Statement on Form S-3 (File No. 33-25139) of
Chemical Banking Corporation).
</TABLE>
II-1
<PAGE> 50
<TABLE>
<CAPTION>
EXHIBIT NUMBER DOCUMENT DESCRIPTION
- -------------- -----------------------------------------------------------------------------
<S> <C> <C>
1.4 -- Form of Common Stock Underwriting Agreement (incorporated by reference to
Exhibit 1.1 to Registration Statement on Form S-3 (File No. 33-58634) of
Chemical Banking Corporation).
3.1 -- Certificate of Incorporation of Chemical Banking Corporation, as amended
(incorporated by reference to (i) Exhibit 5 to the Registration Statement on
Form 8-A dated March 18, 1993 of Chemical Banking Corporation and (ii)
Exhibit 1A to Amendment No. 1 to Registration Statement on Form 8-A dated
March 18, 1993 filed on Form 8 dated March 25, 1993).
3.2 -- Certificate of Amendment to the Certificate of Incorporation of Chemical
Banking Corporation (incorporated by reference to Exhibit 3.2 to the Current
Report on Form 8-K dated June 22, 1993 of Chemical Banking Corporation).
3.3 -- By-laws of Chemical Banking Corporation, as amended (incorporated by
reference to Exhibit 3.2 to the Annual Report on Form 10-K of Chemical
Banking Corporation for the year ended December 31, 1991).
4.1 -- Certificate of Designations relating to the Adjustable Rate Cumulative
Preferred Stock, Series C (incorporated by reference to Exhibit 3.1(c) to the
Quarterly Report on Form 10-Q of Chemical New York Corporation for the
quarter ended March 30, 1987).
4.2 -- Certificate of Designations relating to the 10 3/4% Cumulative Preferred
Stock (incorporated by reference to Exhibit 3.1(e) to the Annual Report on
Form 10-K of Chemical Banking Corporation for the year ended December 31,
1988).
4.3 -- Certificate of Designations relating to the 10% Convertible Preferred Stock
(incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K
of Chemical Banking Corporation dated December 31, 1991).
4.4 -- Certificate of Designations relating to the 10.96% Preferred Stock
(incorporated by reference to Exhibit 4.4 to the Current Report on Form 8-K
of Chemical Banking Corporation dated December 31, 1991).
4.5 -- Certificate of Designations relating to the 8 3/8% Preferred Stock
(incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K
of Chemical Banking Corporation dated June 8, 1992).
4.6 -- Certificate of Designations relating to the 7.92% Cumulative Preferred Stock
(incorporated by reference to Exhibit 4.9 to the Registration Statement on
Form S-3 (File No. 33-53306) of Chemical Banking Corporation).
4.7 -- Certificate of Designations relating to the 7.58% Cumulative Preferred Stock
(incorporated by reference to Exhibit 4 to the Registration Statement on Form
8-A dated March 18, 1993 of Chemical Banking Corporation, as amended by
Amendment No. 1 thereto filed on Form 8 dated March 25, 1993).
4.8 -- Certificate of Designations relating to the 7 1/2% Cumulative Preferred Stock
(incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K
dated June 22, 1993 of Chemical Banking Corporation).
4.9 -- Form of Rights Agreement, dated as of April 13, 1989, as amended, between
Chemical Banking Corporation and Chemical Bank (incorporated by reference to
Exhibit 4 to the Current Report on Form 8-K of Chemical Banking Corporation
dated April 13, 1989 and to Exhibit 4.13(b) of the Annual Report on Form 10-K
of Chemical Banking Corporation for the year ended December 31, 1991).
4.10 -- Form of Certificates for shares of Common Stock (incorporated by reference to
Exhibit 4.3 to the Registration Statement on Form S-3 (File No. 33-26028) of
Chemical Banking Corporation).
</TABLE>
II-2
<PAGE> 51
<TABLE>
<CAPTION>
EXHIBIT NUMBER DOCUMENT DESCRIPTION
- -------------- -----------------------------------------------------------------------------
<S> <C> <C>
4.11 -- Form of Certificate of Designations for Preferred Stock (incorporated by
reference to Exhibit 4.13 to the Registration Statement on Form S-3 (File No.
33-47105) of Chemical Banking Corporation).
4.12 -- Form of Certificate for shares of Preferred Stock (incorporated by reference
to Exhibit 4.3 to the Registration Statement on Form S-3 (File No. 33-25139)
of Chemical Banking Corporation).
4.13 -- Form of Deposit Agreement (incorporated by reference to Exhibit 4.6 to the
Registration Statement on Form S-3 (File No. 33-25139) of Chemical Banking
Corporation).
4.14 -- Form of Depositary Receipt of Depository Shares (incorporated by reference to
Exhibit 4.5 to the Registration Statement on Form S-3 (File No. 33-25139) of
Chemical Banking Corporation).
4.15 -- Form of Indenture dated as of December 1, 1989, between Chemical Banking
Corporation and The Chase Manhattan Bank (National Association), which
Indenture includes the form of Debt Securities (incorporated by reference to
Exhibit 4.9 to the Registration Statement on Form S-3 (File No. 33-32409) of
Chemical Banking Corporation).
4.16 -- Form of Indenture dated as of April 1, 1987, as amended and restated as of
December 15, 1992, between Chemical Banking Corporation and Morgan Guaranty
Trust Company of New York, as Trustee (incorporated by reference to Exhibit
4.1 to the Current Report on Form 8-K of Chemical Banking Corporation dated
December 22, 1992).
4.17 -- Form of Senior Debt Note (incorporated by reference to Exhibit 4.1 to the
Registration Statement on Form S-3 (File No. 33-36164) of Chemical Banking
Corporation).
4.18 -- Form of Subordinated Debt Note (incorporated by reference to Exhibit 4.4 to
the Current Report on Form 8-K dated March 8, 1989 of Chemical Banking
Corporation).
4.19 -- Form of Equity Commitment Note (incorporated by reference to Exhibit 4.2 to
the Registration Statement on Form S-3 (File No. 33-15230) of Chemical
Banking Corporation).
4.20 -- Form of Equity Contract Note (incorporated by reference to Exhibit 4.3 to the
Registration Statement on Form S-3 (File No. 33-15230) of Chemical Banking
Corporation).
4.21 -- Form of Debt Securities Warrant Agreement (incorporated by reference to
Exhibit 4.23 to the Registration Statement on Form S-3 (File No. 33-47105) of
Chemical Banking Corporation).
4.22 -- Form of Preferred Stock Warrant Agreement (incorporated by reference to
Exhibit 4.24 to the Registration Statement on Form S-3 (File No. 33-47105) of
Chemical Banking Corporation).
4.23 -- Form of Common Stock Warrant Agreement (incorporated by reference to Exhibit
4.25 to the Registration Statement on Form S-3 (File No. 33-47105) of
Chemical Banking Corporation).
4.24 -- Form of Currency Warrants Warrant Agreement (incorporated by reference to
Exhibit 4.26 to the Registration Statement on Form S-3 (File No. 33-47105) of
Chemical Banking Corporation).
4.25 -- Form of Fixed Rate Senior Medium-Term Notes, Series C (incorporated by
reference to Exhibit 4.1 to the Current Report on Form 8-K dated June 22,
1993 of Chemical Banking Corporation).
4.26 -- Form of Global Certificate representing Fixed Rate Senior Medium-Term Notes,
Series C (incorporated by reference to Exhibit 4.2 to the Current Report on
Form 8-K dated June 22, 1993 of Chemical Banking Corporation).
</TABLE>
II-3
<PAGE> 52
<TABLE>
<CAPTION>
EXHIBIT NUMBER DOCUMENT DESCRIPTION
- -------------- -----------------------------------------------------------------------------
<S> <C> <C>
4.27 -- Form of Floating Rate Senior Medium-Term Notes, Series C (incorporated by
reference to Exhibit 4.3 to Current Report on Form 8-K dated June 22, 1993 of
Chemical Banking Corporation).
4.28 -- Form of Global Certificate representing Floating Rate Senior Medium-Term
Note, Series C (incorporated by reference to Exhibit 4.4 to Current Report on
Form 8-K dated June 22, 1993 of Chemical Banking Corporation).
4.29 -- Form of Fixed Rate Subordinated Medium-Term Notes, Series A (incorporated by
reference to Exhibit 4.5 to Current Report on Form 8-K dated June 22, 1993 of
Chemical Banking Corporation).
4.30 -- Form of Global Certificate representing Fixed Rate Subordinated Medium-Term
Notes, Series A (incorporated by reference to Exhibit 4.6 to Current Report
on Form 8-K dated June 22, 1993 of Chemical Banking Corporation).
4.31 -- Form of Floating Rate Subordinated Medium-Term Notes, Series A (incorporated
by reference to Exhibit 4.7 to Current Report on Form 8-K dated June 22, 1993
of Chemical Banking Corporation).
4.32 -- Form of Global Certificate representing Floating Rate Subordinated
Medium-Term Notes, Series A (incorporated by reference to Exhibit 4.8 to
Current Report on Form 8-K dated June 22, 1993 of Chemical Banking
Corporation).
4.33 -- Form of Indenture dated as of June 1, 1982, between Manufacturers Hanover
Corporation and Morgan Guaranty Trust Company of New York, as trustee, which
Indenture includes the form of Debt Securities (incorporated by reference to
Exhibit 4(a) to Manufacturers Hanover Corporation's Registration Statement on
Form S-3 (File No. 2-82433)).
4.34 -- Form of First Supplemental Indenture dated as of January 15, 1986 to the
Indenture dated as of June 1, 1982 between Manufacturers Hanover Corporation
and Morgan Guaranty Trust Company of New York, as Trustee, relating to the
Senior Debt Securities (incorporated by reference to Exhibit 1 to
Manufacturers Hanover Corporation's Current Report on Form 8-K, dated as of
January 29, 1986).
4.35 -- Form of Second Supplemental Indenture dated as of March 13, 1991 to the
Indenture dated as of June 1, 1982 between Manufacturers Hanover Corporation
and Morgan Guaranty Trust Company of New York, as Trustee, relating to the
Senior Debt Securities (incorporated by reference to Exhibit 4 to
Manufacturers Hanover Corporation's Current Report on Form 8-K, dated March
19, 1991).
4.36 -- Form of Third Supplemental Indenture dated as of December 31, 1991 among
Chemical Banking Corporation, Manufacturers Hanover Corporation and Morgan
Guaranty Trust Company of New York, to the Indenture dated as of June 1, 1982
(incorporated by reference to Exhibit 4.14(d) to the Annual Report on Form
10-K dated December 31, 1991 of Chemical Banking Corporation).
4.37 -- Form of Indenture dated as of June 1, 1985 between Manufacturers Hanover
Corporation and IBJ Schroder Bank and Trust Company, as Trustee, relating to
8 1/2% Subordinated Capital Notes Due February 15, 1999 (incorporated by
reference to Exhibit 4(b) to the Current Report on Form 8-K dated February
27, 1987 of Manufacturers Hanover Corporation).
4.38 -- Form of First Supplemental Indenture dated as of December 31, 1991 among
Chemical Banking Corporation, Manufacturers Hanover Corporation and IBJ
Schroder Bank and Trust Company to the Indenture dated June 1, 1985
(incorporated by reference to Exhibit 4.18(b) to the Annual Report on Form
10-K dated December 31, 1991 of Chemical Banking Corporation).
5.0 -- Opinion of Simpson Thacher & Bartlett.+
</TABLE>
II-4
<PAGE> 53
<TABLE>
<CAPTION>
EXHIBIT NUMBER DOCUMENT DESCRIPTION
- -------------- -----------------------------------------------------------------------------
<S> <C> <C>
12.1 -- Computation of Ratios of Earnings to Fixed Charges (incorporated by reference
to Exhibit 12.0 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1992 of Chemical Banking Corporation).
12.2 -- Computation of Ratios of Earnings to Fixed Charges for the nine months ended
September 30, 1993 (incorporated by reference to Exhibit 12(a) to the
Quarterly Report on Form 10-Q for the quarter ended September 30, 1993 of
Chemical Banking Corporation).
23 -- Consent of Price Waterhouse.*
24 -- Powers of Attorney.+
25.1 -- Form T-1 Statement of Eligibility and Qualifications under the Trust
Indenture Act of 1939 of The Chase Manhattan Bank (National Association)
(incorporated by reference to Exhibit 25.1 to Chemical Banking Corporation's
Registration Statement on Form S-3 (File No. 33-57104)).
25.2 -- Form T-1 Statement of Eligibility and Qualifications under the Trust
Indenture Act of 1939 of Morgan Guaranty Trust Company of New York
(incorporated by reference to Exhibit 25.2 to Chemical Banking Corporation's
Registration Statement on Form S-3 (File No. 33-57104)).
25.3 -- Form T-1 Statement of Eligibility and Qualifications under the Trust
Indenture Act of 1939 of Morgan Guaranty Trust Company of New York
(incorporated by reference to Exhibit 26 to Manufacturers Hanover
Corporation's Registration Statement on Form S-3 (File No. 2-78033)).
25.4 -- Form T-1 Statement of Eligibility and Qualifications under the Trust
Indenture Act of 1939 of IBJ Schroder Bank and Trust Company (incorporated by
reference to Exhibit 26 to the Current Report on Form 8-K dated February 27,
1987 of Manufacturers Hanover Corporation).
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 15 above, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
- ---------------
*Filed herewith.
+Previously filed.
II-5
<PAGE> 54
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned Registrant hereby undertakes to file an application for the
purpose of determining the eligibility of a trustee to act under subsection (a)
of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Act.
II-6
<PAGE> 55
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing this Post-Effective Amendment No. 1 to
Registration Statement on Form S-3 and has duly caused this Post-Effective
Amendment No. 1 to Registration Statement on Form S-3 to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of New York, State of
New York, on January 20, 1994.
CHEMICAL BANKING CORPORATION
(Registrant)
By: /s/ JOHN B. WYNNE
(John B. Wynne, Secretary)
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Post-Effective Amendment No. 1 to Registration Statement on Form S-3 has
been signed by the following persons in the capacities and on the date
indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
-------------- --------
<S> <C>
* Director, Chairman of the Board and Chief Executive
- ---------------------------------------- Officer (Principal Executive Officer)
(Walter V. Shipley)
* Director and President
- ----------------------------------------
(Edward D. Miller)
* Director and Vice Chairman
- ----------------------------------------
(William B. Harrison, Jr.)
* Director
- ----------------------------------------
(Frank A. Bennack, Jr.)
* Director
- ----------------------------------------
(Michel C. Bergerac)
* Director
- ----------------------------------------
(Randolph W. Bromery)
* Director
- ----------------------------------------
(Charles W. Duncan, Jr.)
* Director
- ----------------------------------------
(Robert G. Goelet)
* Director
- ----------------------------------------
(Melvin R. Goodes)
</TABLE>
II-7
<PAGE> 56
<TABLE>
<CAPTION>
SIGNATURE TITLE
-------------- ---------
<S> <C>
* Director
- ----------------------------------------
(George V. Grune)
* Director
- ----------------------------------------
(Harold S. Hook)
* Director
- ----------------------------------------
(Helene L. Kaplan)
* Director
- ----------------------------------------
(J. Bruce Llewellyn)
* Director
- ----------------------------------------
(John P. Mascotte)
* Director
- ----------------------------------------
(John F. McGillicuddy)
* Director
- ----------------------------------------
(Robert E. Mercer)
* Director
- ----------------------------------------
(Andrew C. Sigler)
* Director
- ----------------------------------------
(Michael I. Sovern)
* Director
- ----------------------------------------
(John R. Stafford)
* Director
- ----------------------------------------
(W. Bruce Thomas)
* Director
- ----------------------------------------
(Marina v.N. Whitman)
</TABLE>
II-8
<PAGE> 57
<TABLE>
<CAPTION>
SIGNATURE TITLE
-------------- ---------
<S> <C>
* Director
- ----------------------------------------
(Richard D. Wood)
* Executive Vice President and Chief Financial
- ---------------------------------------- Officer (Principal Financial Officer)
(Peter J. Tobin)
* Senior Vice President, Controller (Principal
- ---------------------------------------- Accounting Officer)
(Joseph L. Sclafani)
</TABLE>
*John B. Wynne hereby signs this Post-Effective Amendment No. 1 to Registration
Statement on Form S-3 on behalf of each of the indicated persons for whom he is
attorney-in-fact on January 20, 1994 pursuant to a power of attorney filed
herewith.
By /s/ JOHN B. WYNNE
(John B. Wynne)
Dated: January 20, 1994
II-9
<PAGE> 58
EXHIBIT INDEX
---------------
Exhibit Number Description
- -------------- -----------
23 Consent of Price Waterhouse
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
January 19, 1993 appearing on page 44 of Section B of the Annual Report of Form
10-K of Chemical Banking Corporation for the year ended December 31, 1992. We
also consent to the reference to us under the heading "Experts" in such
Prospectus.
/s/ PRICE WATERHOUSE
PRICE WATERHOUSE
New York, New York
January 20, 1994
