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Filed Pursuant to Rule 424 (b) (3)
Registration No. 33-64261
PROSPECTUS
[CHASE MANHATTAN LOGO]
THE CHASE MANHATTAN CORPORATION
DEBT SECURITIES
WARRANTS
The Chase Manhattan Corporation (the "Company") may offer from time to time
in one or more series its debt securities (the "Company Debt Securities"), which
may be either senior (the "Company Senior Securities") or subordinated (the
"Company Subordinated Securities").
In connection with the merger of The Chase Manhattan Corporation ("Old
Chase") with and into the Company (which was known as Chemical Banking
Corporation) on March 31, 1996, the Company assumed the obligations of Old Chase
with respect to certain senior (the "Old Chase Senior Securities") and certain
subordinated debt securities (the "Old Chase Subordinated Securities" and,
collectively with the Old Chase Senior Securities, the "Old Chase Debt
Securities") and changed its name to "The Chase Manhattan Corporation".
In addition, 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 subordinated debt
securities (the "MHC Subordinated Securities"). The Company Senior Securities
and the Old Chase Senior Securities are collectively referred to as the "Senior
Securities." The Company Subordinated Securities, the Old Chase Subordinated
Securities and the MHC Subordinated Securities are collectively referred to as
the "Subordinated Securities."
The Senior Securities rank equally with all other unsubordinated and
unsecured indebtedness of the Company. The Company Subordinated Securities are
subordinate to all existing and future Senior Indebtedness (as defined herein)
of the Company and, except for certain Company Subordinated Securities,
Additional Senior Obligations (as defined herein). 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 or junior
to the MHC Subordinated Securities. The Old Chase Subordinated Securities are
subordinate to Senior Indebtedness, Additional Senior Obligations and all other
obligations of the Company to its creditors other than the Old Chase
Subordinated Securities, except obligations ranking on a parity with or ranking
junior to such Old Chase Subordinated Securities. 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 Company 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 Company Debt Securities are issued and outstanding as of the
date of this Prospectus 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:
$100,000,000 aggregate principal amount of 7 3/8% Senior Notes Due 1997
$300,000,000 aggregate principal amount of 6 5/8% Senior Notes Due 1998
$100,000,000 aggregate principal amount of 10 3/8% Subordinated Notes Due
1999
$300,000,000 aggregate principal amount of 9 3/4% Subordinated Capital
Notes Due 1999
$150,000,000 aggregate principal amount of 10 1/8% Subordinated Capital
Notes Due 2000
$200,000,000 aggregate principal amount of 8 1/2% Subordinated Notes Due
2002
$150,000,000 aggregate principal amount of 8 5/8% Subordinated Debentures
Due 2002
$100,000,000 aggregate principal amount of 8 1/8% Subordinated Notes Due
June 15, 2002
$200,000,000 aggregate principal amount of 7 5/8% Subordinated Notes Due
2003
$200,000,000 aggregate principal amount of 7 1/8% Subordinated Debentures
Due 2005
$150,000,000 aggregate principal amount of 7 7/8% Subordinated Debentures
Due 2006
$300,000,000 aggregate principal amount of 7 1/8% Subordinated Notes Due
2007
$200,000,000 aggregate principal amount of 6 1/2% Subordinated Debentures
Due 2009
$1,078,000,000 aggregate principal amount of Senior Medium-Term Notes, Series
C Due from 9 months to 30 Years from Date of Issue
$622,250,000 aggregate principal amount of Subordinated Medium-Term Notes,
Series A and Series B, Due from 9 months to 30 Years from Date
of Issue
(continued on next page)
THE DATE OF THIS PROSPECTUS IS APRIL 8, 1997.
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(continued)
The following Old Chase Debt Securities are issued and outstanding as of
the date of this Prospectus 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:
$200,000,000 aggregate principal amount of 7 1/2% Subordinated Notes Due
1997
$275,000,000 aggregate principal amount of 10% Subordinated Notes Due 1999
$200,000,000 aggregate principal amount of 8% Subordinated Notes Due 1999
$200,000,000 aggregate principal amount of 7 3/4% Subordinated Notes Due
1999
$150,000,000 aggregate principal amount of 8.80% Subordinated Notes Due
2000
$200,000,000 aggregate principal amount of 5 1/2% Notes Due 2001
$200,000,000 aggregate principal amount of 9 3/8% Subordinated Notes Due
2001
$150,000,000 aggregate principal amount of 9 3/4% Subordinated Notes Due
2001
$100,000,000 aggregate principal amount of 9.05% Subordinated Notes Due
2002
$150,000,000 aggregate principal amount of 8% Subordinated Notes Due 2002
$200,000,000 aggregate principal amount of 7 1/2% Subordinated Notes Due
2003
$150,000,000 aggregate principal amount of Floating Rate Subordinated Notes
Due 2003
$100,000,000 aggregate principal amount of Floating Rate Subordinated Notes
Due August 1, 2003
$150,000,000 aggregate principal amount of 8% Subordinated Notes Due 2004
$150,000,000 aggregate principal amount of 7 7/8% Subordinated Notes Due
2004
$150,000,000 aggregate principal amount of 8% Subordinated Notes Due 2005
$200,000,000 aggregate principal amount of 6 1/2% Subordinated Notes Due
2005
$200,000,000 aggregate principal amount of 6 1/4% Subordinated Notes Due
2006
$200,000,000 aggregate principal amount of 6 3/4% Subordinated Notes Due
2008
$100,000,000 aggregate principal amount of 6 1/8% Subordinated Notes Due
2008
$150,000,000 aggregate principal amount of 6 1/2% Subordinated Notes Due
2009
$265,995,000 aggregate principal amount of Senior Medium-Term Notes, Series
A, B and C, Due from 9 Months to 30 Years from Date of Issue
$477,930,000 aggregate principal amount of Subordinated Medium-Term Notes,
Series A, B and C, Due from 9 months to 30 years from Date of
Issue
The following MHC Debt Securities are issued and outstanding as of the date
of this Prospectus 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:
$150,000,000 aggregate principal amount of 8 1/2% Subordinated Capital
Notes Due 1999
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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.
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This Prospectus may be used by direct or indirect wholly-owned subsidiaries
of the Company, including Chase Securities Inc. ("CSI"), in connection with
offers and sales related to secondary market transactions in the Company Debt
Securities, Old Chase Debt Securities and MHC Subordinated Securities (the "Debt
Securities"). Such subsidiaries may act as principal or agent in connection with
any such sales. Such sales will be made at prices related to prevailing market
prices at the time of sale.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files, reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information concerning the Company 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: Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511, and Seven World Trade Center, Suite 1300, 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. The Company is an electronic filer, and the Commission maintains a
Web site (located at http://www.sec.gov) that contains reports, proxy statements
and other information regarding registrants that file electronically.
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, 1996;
(b) The Company's Current Reports on Form 8-K dated January 23, 1997,
March 18, 1997 and March 18, 1997; and
(c) The descriptions of the Common Stock and the 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, INCLUDING ANY
BENEFICIAL OWNER, 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: THE CHASE MANHATTAN 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.$").
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THE CHASE MANHATTAN 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.
On March 31, 1996, Old Chase merged with and into the Company, and the Company
changed its name from "Chemical Banking Corporation" to "The Chase Manhattan
Corporation". At December 31, 1996, the Company was the largest bank holding
company in the United States in terms of total assets.
The Company conducts domestic and international financial services
businesses through various bank and non-bank subsidiaries. The principal bank
subsidiaries of the Company are The Chase Manhattan Bank, a New York banking
corporation headquartered in New York City (the "Bank"), Chase Manhattan Bank
USA, National Association ("Chase USA"), headquartered in Wilmington, Delaware,
and Texas Commerce Bank National Association ("Texas Commerce"), headquartered
in Houston, Texas. The principal non-bank subsidiary of the Company is CSI,
which is engaged in securities underwriting and dealing activities.
The merger of Old Chase with and into the Company was accounted for as a
pooling-of-interests and, accordingly, the information presented in this
Prospectus reflects the combined results of Old Chase and the Company as if the
merger had been in effect for all periods presented.
The Company's principal executive office is located at 270 Park Avenue, New
York, New York 10017. The Company's telephone number is (212) 275-6000.
BUSINESS
The activities of the Company and its subsidiaries are internally
organized, for management reporting purposes, into two major business franchises
(Global Wholesale Banking and Regional and Nationwide Consumer Banking), and
Corporate.
Global Wholesale Banking
Global Wholesale Banking provides financing, advisory, sales and trading,
trade finance, asset management, private banking and operating services to
clients worldwide, including corporations, institutions, governments and wealthy
individuals. Global Wholesale Banking operates in more than 50 countries,
including major operations in all key international financial centers. Global
Wholesale Banking encompasses investment banking and corporate lending, global
markets activities, equity investing, private banking, asset management and
information and transaction services. Terminal businesses, representing
discontinued portfolios (primarily the remaining refinancing country debt and
commercial real estate problem asset and nonperforming portfolios), are also
included in Global Wholesale Banking.
Regional and Nationwide Consumer Banking
The Regional and Nationwide Consumer Banking franchise included, as of
December 31, 1996, the third largest bank credit card issuer in the U.S., the
third largest originator and servicer of residential mortgages and a leading
provider of auto financing and other consumer lending products. The Company
maintains a leading market share position in the New York metropolitan tri-state
area in serving the financial needs of consumers, middle market commercial
enterprises and small businesses. Additionally, included in Regional and
Nationwide Consumer Banking is Texas Commerce, which, as of December 31, 1996,
was the second-largest bank in Texas and a leader in providing financial
products and services to businesses and individuals throughout Texas.
Corporate
Corporate includes the management results attributed to the Company's
investment in The CIT Group Holdings, Inc. and some effects remaining at the
Corporate level after the implementation of management accounting policies,
including residual credit provisions and tax expenses. Corporate also includes
one-time unallocated special items such as the merger-related restructuring
charge and income tax refunds.
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CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND PREFERRED
STOCK DIVIDEND REQUIREMENTS
The following are the consolidated ratios of earnings to fixed charges and
the ratios of earnings to combined fixed charges and preferred stock dividend
requirements for each of the years indicated:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Earnings to Fixed Charges:
Excluding Interest on Deposits........................... 1.66 1.90 1.86 1.62 1.50
Including Interest on Deposits........................... 1.32 1.41 1.42 1.31 1.21
Earnings to Combined Fixed Charges and Preferred Stock
Dividend Requirements:
Excluding Interest on Deposits........................... 1.60 1.82 1.76 1.52 1.41
Including Interest on Deposits........................... 1.30 1.38 1.38 1.27 1.18
</TABLE>
For purposes of computing the ratios of earnings to fixed charges and of
earnings to combined fixed charges and preferred stock dividend requirements,
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.
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DESCRIPTION OF COMPANY DEBT SECURITIES
The statements under this caption are brief summaries of certain provisions
contained in the Company Indentures (as defined below), do not purport to be
complete and are qualified in their entirety by reference to such Company
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 Company Indenture, it being intended that such referenced sections of
the Company Indentures and such defined terms shall be incorporated herein by
reference.
GENERAL
The Company Senior Securities have been issued in series under an Indenture
dated as of December 1, 1989, as amended as of March 29, 1996 between the
Company and Bankers Trust Company, as Trustee (the "Company Senior Trustee")
(the "Company Senior Indenture"). The Company Subordinated Securities have been
issued under an Indenture dated as of April 1, 1987, as amended and restated as
of December 15, 1992, and as further amended, between the Company and First
Trust of New York, National Association, as Trustee (the "Company Subordinated
Trustee") (the "Company Subordinated Indenture"). The Company Debt Securities
may be offered together with warrants to purchase the Company Debt Securities
(the "Debt Warrants"), warrants to purchase shares of common stock of the
Company (the "Common Stock Warrants"), warrants to purchase shares of preferred
stock (the "Preferred 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 Company Senior Indenture
and the Company Subordinated Indenture shall be collectively referred to as the
"Company Indentures."
Neither Company Indenture limits the amount of Company Debt Securities
which may be issued thereunder and Company Debt Securities may be issued under
either of the Company Indentures up to the aggregate principal amount which may
be authorized from time to time by the Company. Because the Company is a holding
company, the right of the Company to participate in any distribution of assets
of any subsidiary, including the Bank, Chase USA and Texas Commerce, upon such
subsidiary's liquidation or reorganization or otherwise (and thus the ability of
holders of the Company 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 Company Debt Securities,
including, where applicable: (i) the specific title of such Company Debt
Securities; (ii) any limit on the aggregate principal amount or aggregate
initial offering price of such Company Debt Securities; (iii) the purchase price
of such Company Debt Securities (expressed as a percentage of the principal
amount thereof); (iv) the date or dates on which the principal of such Company
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
Company 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 Company Debt Securities will be payable; (vii) the terms of
any mandatory or optional redemption provisions applicable to the Company Debt
Securities; (viii) the terms of any sinking fund and analogous provisions with
respect to the Company 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 Company Debt
Securities will be payable (which may be different for principal,
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premium and interest); (xi) if the principal of (and premium, if any) or
interest, if any, on such Company 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 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 Company 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 Company Debt Securities
will be determined; (xiv) whether such Company Debt Securities are Company
Senior Securities or Company Subordinated Securities, or include both; (xv) the
portion of the principal amount of such Company 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
Company Debt Securities (if not set forth in the applicable Company Indenture);
(xvii) if such Company Debt Securities are Company Senior Securities, whether
the provisions of the Company Senior Indenture relating to "Defeasance and
Covenant Defeasance" will be applicable to such Company Senior Securities;
(xviii) whether any of such Company Debt Securities are to be issuable in
permanent global form; (xix) the terms of any Currency Warrants or Securities
Warrants being offered with such Company Debt Securities; and (xx) any other
specific terms of such Company Debt Securities (including any covenants
applicable to the Company Debt Securities if not set forth in the applicable
Company Indenture).
The Company Debt Securities have been issued only in fully registered form
without coupons. The Company Indentures also provide that Company Debt
Securities of a series may be issued as permanent global Company Debt
Securities. See "Permanent Global Debt Securities" below. No service charge will
be made for any transfer or exchange of the Company 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 Company Debt Securities is represented by a
permanent global note, principal of (and premium, if any) and interest, if any,
on the Company Debt Securities will be payable, and the Company Debt Securities
will be transferable or exchangeable, at the corporate trust office of the Bank
in New York City, provided that payment of interest on any Company Debt
Securities may be made at the option of the Company by check mailed to the
registered holders of the Company Debt Securities at their registered addresses.
The Company will have the right to require a holder of any Company Debt
Security, in connection with the payment of the principal of (and premium, if
any) and interest, if any, on such Company 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
Company 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 Company Debt Securities, any special Federal income tax,
accounting and other considerations applicable thereto, if any, are described
below.
Some of the Company Debt Securities may have been issued as original issue
discount Company 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. Persons considering the purchase, ownership
or disposition of such Company Debt Securities should consult their own tax
advisors concerning the United States federal income tax consequences to them
with regard to such purchase, ownership or disposition in light of their
particular situations as well as any consequences arising under the laws of any
other taxing jurisdiction.
Neither Company 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 Company Debt Securities in the event the Company
engages in a highly leveraged transaction. Further, neither Company Indenture
contains any provisions that would provide protection to holders of Company 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.
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The Company Debt Securities of certain series may be issued under the
Company Indentures upon the exercise of Securities Warrants issued with other
Company Debt Securities or upon exchange or conversion of exchangeable or
convertible Company Debt Securities. The specific terms of any such Securities
Warrants, the specific terms of exchange or conversion of any such Company Debt
Securities and the specific terms of the Company Debt Securities issuable upon
the exercise of any such Securities Warrants or upon any such exchange or
conversion, if any, are described below.
COMPANY SENIOR SECURITIES
The Company 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 December 31, 1996, Senior
Indebtedness and Additional Senior Obligations of the Company aggregated
approximately $8.6 billion. See "Description of Company Debt
Securities -- Company Subordinated Securities -- Subordination" below.
Limitation on Disposition of Stock of the Bank. The Company Senior
Indenture contains a covenant by the Company that, so long as any of the Company
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 the Bank (except to the
Company or an Intermediate Subsidiary), nor will the Company or any Intermediate
Subsidiary permit the 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 the 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 the
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 the Bank (or any successor to the Bank) free and
clear of any security interest after giving effect to such transaction. The
foregoing, however, shall not preclude the 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 Company 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 the Bank does not prevent the Bank from engaging in a sale
of assets to the extent otherwise permitted by the Company Senior Indenture.
(Section 1006).
Events of Default. The Company Senior Indenture defines an Event of
Default with respect to any series of Company Senior Securities as any one of
the following events: (i) default in the payment of interest on any Company
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 Company
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 Company 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 Company Senior Indenture (other than a covenant
or warranty included in the Company Senior Indenture solely for the benefit of a
series of Company Senior Securities other than that series); (v) (A) failure by
the Company to pay indebtedness for money borrowed, including Company 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 Company 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
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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 contested in good faith by appropriate proceedings; (vi) certain
events of bankruptcy, insolvency or reorganization of the Company or the Bank;
and (vii) any other Event of Default provided with respect to Company Senior
Securities of that series. (Section 501).
If any Event of Default with respect to Company Senior Securities of any
series at the time Outstanding occurs and is continuing, either the Company
Senior Trustee or the holders of not less than 25% in principal amount of the
Outstanding Company Senior Securities of that series may declare the principal
amount (or, if the Company 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 Company 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 Company 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 Company Senior
Securities of that series on behalf of the holders of all Company Senior
Securities of that series. (Sections 502 and 513).
With respect to any series of Company Senior Securities that 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 Company Senior Indenture provides that the Company Senior Trustee will,
within 90 days after the occurrence of a default known to it with respect to
Company Senior Securities of any series at the time Outstanding with respect to
which it is trustee, give to the holders of the Outstanding Company 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 Company Senior Security of that
series, or in the payment of any sinking fund installment which is provided for
such series, the Company Senior Trustee will be protected in withholding such
notice if the Company Senior Trustee in good faith determines that the
withholding of such notice is in the interest of the holders of the Outstanding
Company 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 Company Senior Securities of any series in the performance of a
covenant in the Company Senior Indenture other than for the payment of the
principal of (or premium, if any) or interest, if any, on any Company Senior
Security of such series or the deposit of any sinking fund payment with respect
to the Company Senior Securities of such series. The term "default" with respect
to any series of Outstanding Company 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 Company Senior Securities
of such series. (Section 602).
The Company Senior Indenture provides that, subject to the duty of the
Company Senior Trustee during default to act with the required standard of care,
the Company Senior Trustee will not be under any obligation to exercise any of
its rights or powers under the Company Senior Indenture at the request or
direction of any of the holders, unless such holders shall have offered to the
Company Senior Trustee reasonable security or indemnity. (Section 603). The
Company Senior Indenture provides that the holders of a majority in principal
amount of Outstanding Company Senior Securities of any series may direct the
time, method and place of conducting any proceeding for any remedy available to
the Company Senior Trustee for that series, or exercising any trust or other
power conferred on such Company Senior Trustee, provided that such Company
Senior Trustee may decline to act if such direction is contrary to law or the
Company Senior Indenture. (Section 512).
The Company Senior Indenture includes a covenant that the Company will file
annually with the Company Senior Trustee a certificate of no default, or
specifying any default that exists. (Section 1007).
Defeasance and Covenant Defeasance. The Company Senior Indenture provides,
if such provision is made applicable to the Company Senior Securities of any
series pursuant to Section 301 of the Company Senior Indenture (which, if
applicable, with respect to a particular series of Company Senior Securities
will be
7
<PAGE> 10
indicated below), that the Company may elect (i) to defease and be discharged
from all of its obligations with respect to such Company Senior Securities then
outstanding (except for the obligations to register the transfer or exchange of
such Company Senior Securities, to replace temporary or mutilated, destroyed,
lost or stolen Company Senior Securities, to maintain an office or agency in
respect of the Company Senior Securities and to hold moneys for payment in
trust) ("defeasance") and/or (ii) to be released from its obligations with
respect to such Company Senior Securities then outstanding under Section 1005
and Section 1006 (and any other sections applicable to such Company 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 Company Senior Securities
that is determined pursuant to Section 301 to be subject to covenant defeasance)
or Section 501(5) of the Company 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 the 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
Company 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 Company 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 Company Senior Trustee an Opinion of Counsel (as
specified in the Company Senior Indenture) to the effect that the holders of
such Company 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 Company Senior Indenture.
Under current Federal income tax law, defeasance would likely be treated as
a taxable exchange of such Company 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 Company
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 Company Senior
Securities. Purchasers of such Company 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 Company Senior Securities, payment of such Company 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 Company Senior Securities notwithstanding its prior exercise of
its covenant defeasance option. If the Company exercises its defeasance option,
payment of such Company 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 Company
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. Modifications and amendments of the Company
Senior Indenture may be made by the Company and the Company Senior Trustee with
the consent of the holders of not less than a majority in principal amount of
each series of Outstanding Company Senior Securities affected thereby, by
8
<PAGE> 11
executing supplemental indentures adding any provisions to or changing or
eliminating any of the provisions of the Company Senior Indenture or modifying
the rights of the holders of Outstanding Company Senior Securities of such
series, except that no such supplemental indenture may (i) change the Stated
Maturity of any Company 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 Company Senior Securities or change the currency or currencies in which the
same is payable; (ii) reduce the aforesaid percentage of Outstanding Company
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 Company Senior Securities necessary for waiver of compliance with
certain provisions of the Company Senior Indenture or for waiver of certain
covenants and defaults; or (iii) modify the provisions of the Company Senior
Indenture relating to modification and amendment of the Company Senior
Indenture. The Company 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 Company Senior Security
affected thereby. (Section 902).
The Company Senior Indenture permits the Company and the Company Senior
Trustee to amend the Company Senior Indenture in certain circumstances without
the consent of the holders of the Company Senior Securities to evidence the
merger of the Company or the replacement of the Company Senior Trustee, to
effect modifications that do not affect any Series of Company Senior Securities
already outstanding and for certain other purposes.
Consolidation, Merger and Sale of Assets. The Company, without the consent
of the holders of any of the Company Senior Securities under the Company 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
Company Senior Securities and under the Company 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 Company Senior Securities. The Company Senior Indenture
provides that, in determining whether the holders of the requisite principal
amount of Outstanding Company 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 Company 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
Company 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 Company Senior Security of the amount determined as provided in
(i) above) of such Company Senior Security; (iii) the portion of the principal
amount of a Company Senior Security for which the amount of payments of
principal of and any premium or interest on such Company 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
Company Senior Security; and (iv) Company Senior Securities owned by the
Company, any of its Affiliates or any other obligor upon the Company Senior
Securities shall not be deemed to be Outstanding. (Section 101).
9
<PAGE> 12
Set forth below are the principal terms of the Company Senior Securities
issued and outstanding as of the date of this Prospectus, 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.
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.
TERMS AND PROVISIONS OF SENIOR MEDIUM-TERM NOTES, SERIES C
Set forth below is a table indicating the issuance dates and the maturity
dates of the $1,078,000,000 aggregate principal amount of Senior Medium-Term
Notes, Series C (the "Senior Series C Notes") issued and outstanding as of the
date of this Prospectus. The Senior Series C Notes are not subject to any
sinking fund and are not redeemable prior to their stated maturity. The Senior
Series C Notes have either (a) fixed interest rates or (b) floating interest
rates which are reset periodically, by reference to an interest rate basis or
formula.
<TABLE>
<CAPTION>
ISSUANCE DATE PRINCIPAL AMOUNT MATURITY DATE RATE
- ------------------------- ------------------------ ------------------------- ------------------------------------
<S> <C> <C> <C>
November 2, 1992......... $ 5,000,000............ December 17, 1997........ LIBOR reset quarterly +0.40%
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%
August 9, 1993........... 5,000,000............... August 10, 1998.......... LIBOR reset quarterly +0.25%
December 28, 1993........ 5,000,000............... December 28, 1998........ LIBOR reset annually
January 25, 1994......... 50,000,000.............. January 25, 1999......... LIBOR reset quarterly +0.15%
January 27, 1994......... 50,000,000.............. January 27, 1998......... LIBOR reset quarterly +0.10%
June 6, 1994............. 10,000,000.............. June 6, 1999............. LIBOR reset semiannually +0.40%
June 10, 1994............ 5,000,000............... June 10, 1999............ LIBOR reset quarterly +0.20%
June 14, 1994............ 25,000,000.............. June 16, 1997............ LIBOR reset quarterly +0.13%
June 14, 1994............ 25,000,000.............. June 16, 1997............ LIBOR reset quarterly +0.13%
July 16, 1994............ 5,000,000............... July 15, 2004............ LIBOR reset semiannually +0.65%
July 20, 1994............ 7,000,000............... July 20, 2004............ LIBOR reset semiannually +0.50%
July 20, 1994............ 10,000,000.............. July 20, 2004............ LIBOR reset semiannually +0.50%
August 16, 1994.......... 5,000,000............... August 16, 2004.......... LIBOR reset semiannually +0.50% but
in no event shall the rate exceed
10.5%
September 13, 1994....... 5,000,000............... September 20, 1999....... LIBOR reset quarterly +0.37% but in
no event shall the rate exceed 9.5%
September 24, 1994....... 5,000,000............... October 4, 2004.......... LIBOR reset semiannually +0.45%;
converts to 9.5% fixed on October 1,
1997
October 18, 1994......... 5,000,000............... October 19, 2004......... LIBOR reset semiannually +0.45%;
converts to 9.5% fixed on October
20, 1997
October 26, 1994......... 5,000,000............... October 26, 2004......... LIBOR reset semiannually +0.45%;
converts to 9.625% fixed on October
27, 1997
</TABLE>
10
<PAGE> 13
<TABLE>
<CAPTION>
ISSUANCE DATE PRINCIPAL AMOUNT MATURITY DATE RATE
- ------------------------- ------------------------ ------------------------- ------------------------------------
<S> <C> <C> <C>
October 26, 1994......... 25,000,000.............. October 26, 1999......... LIBOR reset quarterly +0.375% but in
no event shall the rate exceed 10%
November 2, 1994......... 15,000,000.............. November 2, 1999......... LIBOR reset quarterly +0.4% but in
no event shall the rate exceed 9.75%
November 3, 1994......... 10,000,000.............. November 3, 1999......... LIBOR reset quarterly +0.38% but in
no event shall the rate exceed 10%
November 4, 1994......... 10,000,000.............. November 4, 2004......... LIBOR reset semiannually +0.5%;
converts to 9.35% fixed on November
4, 1997
February 28, 1995........ 150,000,000............. February 28, 2000........ LIBOR reset quarterly +0.20%
March 7, 1995............ 25,000,000.............. March 6, 1998............ LIBOR reset quarterly +0.125%
March 16, 1995........... 10,000,000.............. March 16, 2005........... LIBOR reset semiannually +0.35%;
converts to 9.0% fixed on March 16,
1999
March 28, 1995........... 5,000,000............... March 29, 2005........... 8.125% fixed
April 3, 1995............ 7,000,000............... April 3, 2005............ LIBOR reset semiannually +0.45%;
converts to 9.25% fixed April 3,
1998
July 27, 1995............ 30,000,000.............. July 27, 2000............ LIBOR reset quarterly +0.18%
August 10, 1995.......... 10,000,000.............. August 10, 2005.......... LIBOR reset semiannually +0.45%;
converts to 8.0% fixed on August 10,
1999
September 1, 1995........ 13,000,000.............. September 1, 2005........ LIBOR reset quarterly +0.40%;
converts to 8.75% fixed on September
1, 1999
November 8, 1995......... 25,000,000.............. November 8, 1998......... 5.88% fixed
November 10, 1995........ 50,000,000.............. November 10, 1998........ LIBOR reset quarterly +0.10%
November 10, 1995........ 25,000,000.............. November 10, 2001........ Constant maturity 10 year Treasury
Index minus 0.34%
November 15, 1995........ 10,000,000.............. May 1, 2001.............. Constant maturity 5 year Treasury
Index minus 0.10%
October 15, 1996......... 400,000,000............. October 15, 1998......... LIBOR reset quarterly
</TABLE>
COMPANY SUBORDINATED SECURITIES
General. The Company Subordinated Securities are direct, unsecured
obligations of the Company. The obligations of the Company pursuant to the
Company 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
Company 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
Company Subordinated Securities, the maturity of the Company 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 Company 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 Company 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
Company 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 Company
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 Company Subordinated Securities. In addition, the
Company will unconditionally
11
<PAGE> 14
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".
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 2 Capital." See
"Certain Regulatory Matters -- Capital Ratios." In response to these guidelines,
the Company Subordinated Indenture was amended and restated as of December 15,
1992 to permit the Company to issue Company Subordinated Securities that would
qualify as Tier 2 Capital. Company Subordinated Securities issued prior to the
amendment and restatement of the Company Subordinated Indenture are collectively
referred to herein as "Antecedent Company Subordinated Indebtedness" and Company
Subordinated Securities issued on after the date of the amendment and
restatement of the Company Subordinated Indenture are collectively referred to
herein as "Post-Amendment Company Subordinated Indebtedness".
Antecedent Company Subordinated Indebtedness consist of the following
Company Subordinated Securities: (i) the 10 1/8% Subordinated Capital Notes Due
2000; (ii) the 9 3/4% Subordinated Capital Notes Due 1999; (iii) the 8 1/2%
Subordinated Notes Due 2002; (iv) the 8 5/8% Subordinated Debentures Due 2002;
(v) the 8 1/8% Subordinated Notes Due 2002; and (vi) the 10 3/8% Subordinated
Notes Due 1999. At March 31, 1997, an aggregate principal amount of
approximately $1.05 billion of Antecedent Company Subordinated Indebtedness was
outstanding. All Company Subordinated Securities other than Antecedent Company
Subordinated Indebtedness are Post-Amendment Company Subordinated Indebtedness.
At March 31, 1997, an aggregate principal amount of approximately $1.37 billion
of Post-Amendment Company Subordinated Indebtedness was outstanding.
The Company 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 Company Subordinated Indenture or thereafter created,
assumed or incurred, except (A) Post-Amendment Company Subordinated
Indebtedness, (B) Antecedent Company Subordinated Indebtedness, (C) MHC
Subordinated Securities, (D) Old Chase Subordinated Securities and (E) such
other indebtedness of the Company which by its terms is expressly stated to be
not superior in right of payment to the Company Subordinated Securities or to
rank pari passu in right of payment with the Company 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 obligation 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. As of March 31, 1997, an aggregate
principal amount of $100 million of Other Subordinated Indebtedness was
outstanding.
Old Chase Subordinated Securities consist of the following outstanding
subordinated securities assumed by the Company as a result of the merger of Old
Chase into the Company: (i) 7 1/2% Subordinated Notes Due 1997, (ii) 10%
Subordinated Notes Due 1999, (iii) 8% Subordinated Notes Due 1999, (iv) 7 3/4%
Subordinated Notes Due 1999, (v) 8.80% Subordinated Notes Due 2000, (vi) 9 3/8%
Subordinated Notes Due 2001, (vii) 9 3/4 Subordinated Notes Due 2001, (viii)
9.05% Subordinated Notes Due 2002, (ix) 8% Subordinated Notes Due 2002, (x)
7 1/2% Subordinated Notes Due 2003, (xi) Floating Rate Subordinated Notes Due
2003, (xii) Floating Rate Subordinated Notes Due 2003, (xiii) 8% Subordinated
Notes Due 2004, (xiv) 7 7/8% Subordinated Notes Due 2004, (xv) 8% Subordinated
Notes Due 2005, (xvi) 6 1/2% Subordinated Notes Due 2005, (xvii) 6 1/4%
Subordinated Notes Due 2006, (xviii) 6 3/4% Subordinated Notes Due September
2008, (xix) 6 1/8% Subordinated Notes Due 2008, (xx) 6 1/2% Subordinated Notes
Due 2009, (xxi) Subordinated Medium-Term Notes, Series A and C, (xxii) Floating
Rate Subordinated Notes Due 1997, (xxiii) Floating Rate Subordinated Notes Due
2000, and (xxiv) Floating Rate Subordinated Notes Due 2009. At March 31, 1997,
an aggregate principal amount of approximately $4.55 billion of Old Chase
Subordinated Securities were outstanding.
12
<PAGE> 15
MHC Subordinated Securities consist of the following outstanding
subordinated securities assumed by the Company as a result of the merger of
Manufacturers Hanover Corporation with and into the Company: (i) the Floating
Rate Subordinated Notes Due 1997 and (ii) the 8 1/2% Subordinated Capital Notes
Due 1999. At March 31, 1997, an aggregate principal amount of approximately $243
million of MHC Subordinated Securities were outstanding.
The Company 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 Company Subordinated Securities or to
rank pari passu in right of payment with the Company 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 Company Subordinated Securities (irrespective of whether such Company
Subordinated Securities are Antecedent or Post-Amendment Company Subordinated
Indebtedness) are subordinate in right of payment to all Senior Indebtedness. No
payment pursuant to the Company Subordinated Securities or exchange for Capital
Securities may be made, and no holder of the Company 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 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 of the Company Subordinated Securities. See
"Defaults and Waiver Thereof" below for limitations on the rights of
acceleration. (Article Sixteen).
The Post-Amendment Company 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 Company 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 Company 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 Company 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 Company Subordinated Indebtedness.
The Antecedent Company Subordinated Indebtedness will not be subordinated
to indebtedness of the Company which is not Senior Indebtedness, the
Post-Amendment Company 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 Company
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
Company 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 Company 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.
13
<PAGE> 16
Summary of Subordination Provisions Relating to Company Subordinated
Securities. No series of subordinated debt securities of the Company,
including, without limitation, the Post-Amendment Company Subordinated
Indebtedness, the Antecedent Company Subordinated Indebtedness, the Old Chase
Subordinated Securities, the MHC Subordinated Securities and the Other
Subordinated Indebtedness, is subordinated to any other series of subordinated
debt securities of the Company. However, Antecedent Company Subordinated
Indebtedness is subordinated, by its terms, only to Senior Indebtedness;
Post-Amendment Company 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; 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 or junior to such MHC Subordinated Securities;
and Old Chase Subordinated Securities are subordinated by their terms, to Senior
Indebtedness, Additional Senior Obligations and all other obligations of the
Company to its creditors, except obligations ranking on a parity with or ranking
junior to such Old Chase Subordinated Securities. As a result of the differences
between the subordination provisions applicable to the Post-Amendment Company
Subordinated Indebtedness, the Antecedent Company Subordinated Indebtedness, the
MHC Subordinated Securities and Old Chase Subordinated Securities and the Other
Subordinated Indebtedness, in the event of a dissolution, winding-up,
liquidation or reorganization of the Company, the holders of Post-Amendment
Company Subordinated Indebtedness and Other Subordinated Indebtedness may
receive less, ratably, than the holders of Antecedent Company Subordinated
Indebtedness, but more, ratably, than the holders of MHC Subordinated Securities
and Old Chase Subordinated Securities.
Limitation on Disposition of Voting Stock of the Bank. With respect to
Post-Amendment Company Subordinated Indebtedness, the Company 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 the
Bank, nor does it prohibit the Bank from issuing any shares of, securities
convertible into, or options, warrants or rights to subscribe for or purchase
shares of, voting stock of the Bank. However, the Company Subordinated Indenture
does contain a covenant by the Company, for the exclusive benefit of the
Antecedent Company 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 the Bank, nor will it permit the Bank to
issue any shares of, securities convertible into, or options, warrants or rights
to subscribe for or purchase shares of, voting stock of the 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 the 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 the 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 Company Subordinated Indenture defines an
Event of Default (i) with respect to Antecedent Company Subordinated
Indebtedness, as any one of certain events of bankruptcy, insolvency and
reorganization affecting the Company; (ii) with respect to Post-Amendment
Company Subordinated Indebtedness, any one of certain events of bankruptcy or
reorganization affecting the Company; and (iii) with respect to any Company
Subordinated Securities, any other Event of Default specifically provided for by
the terms of such series of Company 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 Company
Subordinated Securities then outstanding under the Company Subordinated
Indenture, the Company Subordinated Trustee or the holders of at least 25% in
aggregate principal amount of the Company Subordinated Securities of that series
which are then outstanding
14
<PAGE> 17
may declare the principal (or, in the case of original issue discount Company
Subordinated Securities, such lesser amount of principal as may be provided
therein) of all Company 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 Company Subordinated Securities of that
series, upon the conditions provided in the Company Subordinated Indenture.
(Section 7.01). The right of the holders of the Company 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
Company Subordinated Securities of such series, so long as the Company
Subordinated Securities of such series have not been exchanged or converted as
provided in the Company 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 Company Subordinated Securities. Prior to
any declaration accelerating the maturity of the Company Subordinated Securities
of any series, the holders of a majority in aggregate principal amount of the
Company Subordinated Securities of that series at the time outstanding may on
behalf of the holders of all Company 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 Company Subordinated Securities of that series. (Section 7.07).
Unless otherwise provided in the terms of a series of Company Subordinated
Securities, there will be no right of acceleration of the payment of principal
of the Company 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 Company Subordinated Securities or the Company 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 Company
Subordinated Securities) or the performance of any covenant or agreement in the
Company Subordinated Securities or the Company Subordinated Indenture, the
Company 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 Company Subordinated Securities) or the
performance of such covenant or agreement.
The Company Subordinated Indenture provides that the Company Subordinated
Trustee shall, within 90 days after the occurrence of a default with respect to
the Company Subordinated Securities of any series, give to the holders of the
Company 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 Company Subordinated Securities of that series, or the
obligation to deliver Capital Securities in exchange for such Company
Subordinated Securities, the Company 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 Company 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 Company Subordinated
Trustee annually an officers' certificate as to the absence of defaults under
the Company Subordinated Indenture. (Section 5.06).
Subject to the provisions of the Company Subordinated Indenture relating to
the duties of the Company Subordinated Trustee, the Company Subordinated Trustee
will be under no obligation to exercise any of its rights or powers under the
Company Subordinated Indenture at the request, order or direction of any of the
holders of the Company Subordinated Securities, unless such holders shall have
offered to the Company Subordinated Trustee reasonable security or indemnity.
Subject to such provision for security or indemnification, the holders of a
majority in principal amount of the Company Subordinated Securities of any
series then outstanding under the Company 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 Company
Subordinated Trustee with respect to the Company Subordinated Securities of such
series. (Sections 7.07 and 8.02).
15
<PAGE> 18
Modification of the Company Subordinated Indenture. The Company
Subordinated Indenture contains provisions permitting the Company and the
Company Subordinated Trustee, with the consent of the holders of not less than a
majority in principal amount of the Company Subordinated Securities at the time
outstanding of each series affected by such modification, to modify the Company
Subordinated Indenture or any supplemental indenture or the rights of the
holders of the Company Subordinated Securities, provided that no such
modification shall, without the consent of the holder of each Company
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
Company Subordinated Security; (ii) reduce the principal amount of (or premium,
if any) or interest, if any, on any such Company Subordinated Security; (iii)
reduce the portion of the principal amount of an original issue discount Company
Subordinated Security payable upon acceleration of the maturity thereof; (iv)
reduce any amount payable upon redemption of any Company Subordinated Security;
(v) change the place or places where, or the coin or currency in which, any
Company 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 Company Subordinated Securities of any series to receive on any
Exchange Date for Company Subordinated Securities of such series Capital
Securities with a Market Value equal to that required by the terms of the
Company Subordinated Securities; (viii) impair the conversion rights of any
holders of Company Subordinated Securities of a series entitled to the
conversion rights set forth in Article Nineteen of the Company 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 Company Subordinated
Security (including any right of redemption at the option of the holder of such
Company Subordinated Security) or impair any rights to the delivery of Capital
Securities in exchange for any Company Subordinated Security or to require the
Company to sell Capital Securities in a Secondary Offering or to require the
delivery of Common Stock, Company Debt Securities or other property upon
conversion of Company Subordinated Securities; (x) reduce the above-stated
percentage of Company Subordinated Securities of any series the consent of the
holders of which is necessary to modify or amend the Company Subordinated
Indenture or reduce the percentage of Company 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 Company Subordinated Indenture permits the Company and the Company
Subordinated Trustee to amend the Company Subordinated Indenture in certain
circumstances without the consent of the holders of Company Subordinated
Securities to evidence the merger of the Company or the replacement of the
Company Subordinated Trustee, to effect modifications which do not affect any
series of Company 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 Company Subordinated Securities and the performance and observance of all
the covenants and conditions of the Company 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).
Outstanding Subordinated Securities. The Company Subordinated Indenture
provides that, in determining whether the holders of the requisite principal
amount of Outstanding Company Subordinated Securities have given any request,
demand, authorization, direction, notice, consent or waiver, the portion of the
principal amount of any Discounted 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, and Company Subordinated Securities owned
by the Company, any of its affiliates or any other obligor upon the Company
Subordinated Securities shall not be deemed to be outstanding.
Set forth below are the principal terms of the Company Subordinated
Securities issued and outstanding as of the date of this Prospectus, 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.
16
<PAGE> 19
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 Company Subordinated Indenture for the benefit of the 10 3/8% 1999 Notes;
and (iv) certain events of bankruptcy, insolvency and reorganization affecting
the Company or the 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 the 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 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
17
<PAGE> 20
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 the
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% 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 7 7/8% SUBORDINATED DEBENTURES DUE 2006
The 7 7/8% Subordinated Debentures Due 2006 (the "7 7/8% 2006 Debentures")
are limited to $150,000,000 aggregate principal amount and will mature on July
15, 2006. The 7 7/8% 2006 Debentures are not redeemable prior to maturity and no
sinking fund is provided for the 7 7/8% 2006 Debentures. The 7 7/8% 2006
Debentures bear interest from July 27, 1994, payable semiannually in arrears on
each January 15 and July 15, commencing January 15, 1995 to the persons in whose
names the 7 7/8% 2006 Debentures are registered at the close of business on the
first day of January or July preceding such January 15 or July 15.
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<PAGE> 21
TERMS AND PROVISIONS OF 7 1/8% SUBORDINATED NOTES DUE 2007
The 7 1/8% Subordinated Notes due 2007 (the " 7 1/8% 2007 Notes") are
limited to $300,000,000 aggregate principal amount and will mature on February
1, 2007. The 7 1/8% 2007 Notes are not redeemable prior to maturity and no
sinking fund is provided for the 7 1/8% 2007 Notes. The 7 1/8% 2007 Notes bear
interest from January 29, 1997, payable semiannually in arrears on each February
1 and August 1, commencing August 1, 1997, to the persons in whose names the
7 1/8% 2007 Notes are registered at the close of business on the fifteenth day
of January and July preceding such February 1 or August 1.
TERMS AND PROVISIONS OF 6 1/2% SUBORDINATED DEBENTURES DUE 2009
The 6 1/2% Subordinated Debentures Due 2009 (the "6 1/2% 2009 Debentures")
are limited to $200,000,000 aggregate principal amount and will mature on
January 15, 2009. The 6 1/2% 2009 Debentures are not redeemable prior to
maturity and no sinking fund is provided for the 6 1/2% 2009 Debentures. The
6 1/2% 2009 Debentures bear interest from January 25, 1994, payable semiannually
in arrears on each January 15 and July 15, commencing July 15, 1994, to the
persons in whose names the 6 1/2% 2009 Debentures 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 SUBORDINATED MEDIUM-TERM NOTES, SERIES A
Set forth below is a table indicating the issuance dates and the maturity
dates of the $415,000,000 aggregate principal amount of Subordinated Medium-Term
Notes, Series A (the "Subordinated Series A Notes") issued and outstanding as of
the date of this Prospectus. The Subordinated Series A Notes are not subject to
any sinking fund and are not subject to redemption (unless otherwise stated
below) or repayment prior to maturity. The Subordinated Series A Notes have
either (a) fixed interest rates or (b) floating interest rates which are
determined, and adjusted periodically, by reference to an interest rate basis or
formula.
<TABLE>
<CAPTION>
PRINCIPAL
ISSUANCE DATE AMOUNT MATURITY DATE RATE
- ----------------------- --------------------- ----------------------- --------------------------
<S> <C> <C> <C>
April 5, 1995 $ 15,000,000......... April 5, 2005.......... 10%; converts to LIBOR
reset semiannually in 1999
but in no event shall the
rate be less than 3%
May 24, 1995........... $ 15,000,000......... May 24, 2002........... 7.11%
May 25, 1995........... $ 25,000,000......... May 25, 2007........... 7.73%
June 15, 1995.......... $ 10,000,000......... June 15, 2010.......... 7.25%
March 24, 1997......... $250,000,000......... March 24, 2027......... Zero coupon. Redeemable at
prices varying with the
redemption date.
March 24, 1997......... $100,000,000......... March 24, 2027......... Zero coupon. Redeemable at
prices varying with the
redemption date.
</TABLE>
TERMS AND PROVISIONS OF SUBORDINATED MEDIUM-TERM NOTES, SERIES B
Set forth below is a table indicating the issuance dates and the maturity
dates of the $207,250,000 aggregate principal amount of Subordinated Medium-Term
Notes, Series B (the "Subordinated Series B Notes") issued and outstanding as of
the date of this Prospectus. The Subordinated Series B Notes are not subject to
any sinking fund and are not redeemable prior to their stated maturity. The
Subordinated Series B Notes have either (a) fixed interest rates or (b) floating
interest rates which are reset periodically, by reference to an interest rate
basis or formula.
19
<PAGE> 22
<TABLE>
<CAPTION>
ISSUANCE DATE PRINCIPAL AMOUNT MATURITY DATE RATE
- ------------------------------------------------- ---------------------------------------------
<S> <C> <C> <C>
March 31, 1995........... $ 1,250,000............. August 30, 2004.......... Zero Coupon
April 7, 1995............ $ 3,000,000............. April 7, 2002............ Zero Coupon
April 28, 1995........... $ 8,500,000............. May 16, 2005............. 7.60%
May 5, 1995.............. $ 8,000,000............. May 15, 2005............. 7.60%
May 12, 1995............. $ 4,750,000............. May 16, 2005............. 7.60%
May 17, 1995............. $25,000,000............. May 17, 2005............. 7.50%
May 19, 1995............. $ 3,000,000............. June 15, 2005............ 7.25%
May 25, 1995............. $50,000,000............. May 15, 2010............. 7.50%
May 26, 1995............. $ 1,250,000............. June 15, 2005............ 7.15%
June 2, 1995............. $ 2,500,000............. June 15, 2005............ 7.15%
June 30, 1995............ $15,000,000............. June 15, 2007............ 7.05%
July 28, 1995............ $25,000,000............. July 15, 2010............ 7.58%
August 1, 1995........... $15,000,000............. August 15, 2005.......... 7.125%
August 25, 1995.......... $15,000,000............. August 25, 2010.......... 7.35%
November 16, 1995........ $20,000,000............. November 16, 2010........ 7.00%
November 24, 1995........ $10,000,000............. November 24, 2010........ 7.10%
</TABLE>
PERMANENT GLOBAL COMPANY DEBT SECURITIES
Certain series of the Company 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, the Bank and certain other subsidiaries of the Company
maintain deposits with, and conduct other banking transactions with, the
trustees under each of the Company Indentures in the ordinary course of
business. First Trust of New York, National Association, is also trustee under
the Old Chase Subordinated Indenture (as defined herein) and Bankers Trust
Company is also trustee under the Old Chase Senior Indenture (as defined
herein).
20
<PAGE> 23
DESCRIPTION OF OLD CHASE DEBT SECURITIES
The statements under this caption are brief summaries of certain provisions
contained in the Old Chase Indentures (as defined below), do not purport to be
complete and are qualified in their entirety by reference to such Old Chase
Indentures, copies of which are exhibits to the Registration Statement of which
this Prospectus is a part. Whenever capitalized terms are used but not defined
herein, such terms shall have the meanings assigned to them in the applicable
Old Chase Indenture, it being intended that such defined terms shall be
incorporated herein by reference.
GENERAL
The Old Chase Senior Securities have been issued under an Indenture, dated
as of July 1, 1986, between the Old Chase and Bankers Trust Company, as Trustee
(the "Old Chase Senior Trustee"), as amended (the "Old Chase Senior Indenture").
The Old Chase Subordinated Securities have been issued under an Indenture, dated
as of May 1, 1987, between the Old Chase and First Trust of New York, National
Association, as successor Trustee (the "Old Chase Subordinated Trustee "), as
amended (the "Old Chase Subordinated Indenture"). The Old Chase Senior Indenture
and the Old Chase Subordinated Indenture shall be collectively called the "Old
Chase Indentures." As a result of the merger of Old Chase with and into the
Company, the Company has assumed the obligations and liabilities of Old Chase
including the Old Chase Indentures and the Old Chase 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 the Bank,
Chase USA and Texas Commerce, upon such subsidiary's liquidation or
reorganization or otherwise (and thus the ability of holders of the Old Chase
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 Old Chase 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. None of the Old Chase Indentures contain any restriction on the
Company's ability to enter into a highly leveraged transaction or any provision
affording special protection to holders of Old Chase Debt Securities in the
event the Company engages in a highly leveraged transaction. Further, none of
the Old Chase Indentures contain any provisions that would provide protection to
holders of Old Chase 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.
OLD CHASE SENIOR SECURITIES
The Old Chase 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 Company Debt
Securities -- Company Subordinated Securities" above.
Limitation on Disposition of Voting Stock of the Bank. The Old Chase
Senior Indenture contains a covenant by the Company that, so long as any
securities issued under the Old Chase Senior Indenture are outstanding, the
Company will not create a security interest in more than 20% of the shares of
voting stock of the Bank, or permit more than 20% of such shares (exclusive of
directors' qualifying shares) to be held directly or indirectly other than (i)
by the Company or (ii) by any corporation which is wholly-owned (except for
directors' qualifying shares) by the Company.
Defaults and Waiver Thereof. The Old Chase Senior Indenture contains a
covenant that provides that one or more of the following events shall constitute
an Event of Default with respect to the Old Chase Senior Securities of any
series: (i) default in the payment of interest on any Old Chase Senior
Securities of such series for a period of 30 days; (ii) default in the payment
of the principal of (or premium, if any, on) any Old
21
<PAGE> 24
Chase Senior Securities of such series; (iii) default in performance, or breach,
of any covenant or warranty of the Company contained in the Old Chase Senior
Indenture for the benefit of Old Chase Senior Securities of such series for a
period of 60 days after notice has been given to the Company; (iv) certain
events of insolvency of the Company; and (v) any other Event of Default
specifically provided for by the terms of the Old Chase Senior Securities of
such series. In case an Event of Default shall have occurred and be continuing
with respect to the Old Chase Senior Securities of any series, the Old Chase
Senior Trustee or the holders of not less than 25% in principal amount of the
Old Chase Senior Securities of such series then outstanding may declare the
principal of the Old Chase Senior Securities of such series (or, if the Old
Chase Senior Securities of such series were issued as discounted Old Chase
Senior Securities, such portion of the principal as may be specified in the
terms of that series) to be due and payable immediately, but such declaration
may be annulled, and certain past defaults waived, by the holders of not less
than a majority in principal amount of the Old Chase Senior Securities of such
series, upon the conditions provided in the Indenture.
The Old Chase Senior Indenture provides that, subject to the duty of the
Old Chase Senior Trustee during a default to act with the required standard of
care, the Old Chase Senior Trustee will be under no obligation to exercise any
of its rights or powers under the Old Chase Senior Indenture at the request or
direction of any of the holders, unless such holders shall have offered to the
Old Chase Senior Trustee reasonable indemnity. Subject to such provisions for
the indemnification of the Old Chase Senior Trustee and certain other
conditions, the holders of a majority in principal amount of the outstanding
securities of any series will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Old Chase
Senior Trustee, or exercising any trust or power conferred on the Old Chase
Senior Trustee, with respect to the Old Chase Senior Securities of that series.
Meetings, Modification and Waiver. Modifications and amendments of the Old
Chase Senior Indenture may be made by the Company and the Old Chase Senior
Trustee with the consent of the holders of not less than 66 2/3% in principal
amount of the outstanding securities of each series affected by such
modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the holder of each outstanding security
affected thereby, (a) change the stated maturity of the principal of, or any
installment of principal of or interest on, any Old Chase Senior Security, (b)
reduce the principal amount of any Old Chase Senior Security or change the rate
of interest or the method of calculation of interest thereon (except as provided
in the Old Chase Senior Indenture or in such Old Chase Senior Security), or any
premium payable upon the redemption thereof, (c) change any obligation of the
Company to pay additional amounts pursuant to the Old Chase Senior Indenture,
(d) reduce the amount of principal of an original issue discount security
payable upon acceleration of the maturity thereof, (e) adversely affect the
right of repayment, if any, at the option of the holder thereof, (f) change the
coin or currency in which, any Old Chase Senior Security or any premium or any
interest thereon is payable, (g) impair the right to institute suit for the
enforcement of any payment on or with respect to any Old Chase Senior Security,
(h) reduce the percentage in principal amount of outstanding securities of any
series, the consent of whose holders is required for modification or amendment
of the Old Chase Senior Indenture or for waiver of compliance with certain
provisions of the Old Chase Senior Indenture or for waiver of certain defaults,
(i) change any obligation of the Company to maintain an office or agency in the
Borough of Manhattan, The City of New York, or any obligation of the Company to
maintain an office or agency outside the United States pursuant to the Old Chase
Senior Indenture, or (j) modify certain provisions of the Old Chase Senior
Indenture requiring consent of specified percentages of holders except to
increase any such percentage.
Set forth below are the principal terms of the Old Chase Senior Securities
issued and outstanding as of the date of this Prospectus, 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.
TERMS AND PROVISIONS OF 5 1/2% NOTES DUE 2001
The 5 1/2% Notes Due 2001 (the "5 1/2% February 15, 2001 Notes") are
limited to $200,000,000 aggregate principal amount and will mature on February
15, 2001. The 5 1/2% February 15, 2001 Notes are not redeemable prior to
maturity and no sinking fund is provided for in the 5 1/2% February 15, 2001
Notes. The 5 1/2% February 15, 2001 Notes bear interest from February 12, 1996
payable on each February 15 and
22
<PAGE> 25
August 15, commencing August 15, 1996 to persons in whose names the 5 1/2%
February 15, 2001 Notes are registered at the close of business on the first day
of January and July preceding such February 15 and August 15.
TERMS AND PROVISIONS OF OLD CHASE SENIOR MEDIUM-TERM NOTES, SERIES A
Set forth below is a table indicating the issuance dates and the maturity
dates of the $16,000,000 aggregate principal amount of Old Chase Senior
Medium-Term Notes, Series A (the "Old Chase Senior Series A Notes") issued and
outstanding as of the date of this Prospectus. The Old Chase Senior Series A
Notes have fixed interest rates.
<TABLE>
<CAPTION>
PRINCIPAL
ISSUANCE DATE AMOUNT MATURITY DATE RATE
- ----------------------------------- ----------- ----------------------------------- -----
<S> <C> <C> <C>
April 30, 1992..................... 5,000,000 ...... April 30, 1997..................... 8.00%
May 5, 1992........................ 1,000,000 ...... May 6, 1997........................ 8.14%
May 5, 1992........................ 10,000,000 ...... May 5, 1997........................ 8.15%
</TABLE>
TERMS AND PROVISIONS OF OLD CHASE SENIOR MEDIUM-TERM NOTES, SERIES B
Set forth below is a table indicating the issuance dates and the maturity
dates of the $224,995,000 aggregate principal amount of Old Chase Senior
Medium-Term Notes, Series B (the "Old Chase Senior Series B Notes") issued and
outstanding as of the date of this Prospectus. The Old Chase Senior Series B
Notes have either (a) fixed interest rates or (b) floating interest rates which
are determined, and adjusted periodically, by reference to an interest rate
basis or formula.
<TABLE>
<CAPTION>
PRINCIPAL
ISSUANCE DATE AMOUNT MATURITY DATE RATE
- ------------------------- ---------- ------------------------- -----------------------------
<S> <C> <C> <C>
March 29, 1996.......... $49,995,000 ...... March 29, 2006........... 6.850%
March 29, 1996.......... 50,000,000 ...... March 29, 2001........... 6.430%
March 28, 1996.......... 50,000,000 ...... March 27, 1998........... LIBOR reset quarterly +.04%
March 28, 1996.......... 50,000,000 ...... March 29, 2001........... 6.450%
March 29, 1996.......... 25,000,000 ...... March 29, 2001........... 6.430%
</TABLE>
TERMS AND PROVISIONS OF OLD CHASE SENIOR MEDIUM-TERM NOTES, SERIES C
Set forth below is a table indicating the issuance date and the maturity
date of the $25,000,000 aggregate principal amount of Old Chase Senior
Medium-Term Notes, Series C (the "Old Chase Senior Series C Notes") issued and
outstanding as of the date of this Prospectus. The Old Chase Senior Series C
Notes have fixed interest rates.
<TABLE>
<CAPTION>
PRINCIPAL
ISSUANCE DATE AMOUNT MATURITY DATE RATE
- ----------------------------------- ---------- ----------------------------------- -----
<S> <C> <C> <C>
March 29, 1996..................... $25,000,000 ....... March 29, 2001..................... 6.50%
</TABLE>
OLD CHASE SUBORDINATED SECURITIES
Old Chase Subordinated Securities are direct, unsecured debt obligations of
the Company. Payment of the principal of the Old Chase Subordinated Securities
is subject to acceleration only in the event of bankruptcy, insolvency or
reorganization of the Company. The provisions of the Old Chase Subordinated
Indenture do not restrict the ability of the Company to incur additional Old
Chase Senior Indebtedness (as defined below) from time to time.
Subordination. The Old Chase 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 the Old Chase
Subordinated Securities, except obligations ranking on a parity with or ranking
junior to such Old Chase Subordinated Securities (collectively, "Old Chase
Senior Indebtedness").
23
<PAGE> 26
No payment pursuant to the Old Chase Subordinated Securities may be made,
and no holder of Old Chase 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 Old Chase Senior Indebtedness shall have been paid
in full.
Upon any distribution of the assets of the Company upon dissolution,
winding-up, liquidation or reorganization, the holders of Old Chase Senior
Indebtedness will be entitled to receive payment in full of principal, premium,
if any, and interest before any payment is made on the Old Chase Subordinated
Securities. By reason of such subordination, in the event of the insolvency of
the Company, holders of Old Chase Senior Indebtedness may receive more ratably,
and holders of Old Chase Subordinated Securities may receive less ratably, than
other creditors of the Company, including holders of Company Subordinated
Securities. See "Description of Company Debt Securities -- Company Subordinated
Securities".
The Old Chase Subordinated Securities will not be subordinated to
indebtedness of the Company which is not Old Chase Senior Indebtedness, and the
creditors of the Company who do hold Old Chase 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 Old Chase 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 Old Chase 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.
Limitation on Disposition of Voting Stock of the Bank. The Old Chase
Subordinated Indenture contains a covenant by the Company that, so long as any
Old Chase Subordinated Securities issued prior to October 1, 1992 are
outstanding, the Company will not create a security interest in more than 20% of
the shares of the voting stock of the Bank or permit more than 20% of such
shares (exclusive of directors' qualifying shares) to be held directly or
indirectly other than (i) by the Company or (ii) by any corporation which is
wholly-owned (except for directors' qualifying shares) by the Company.
Defaults and Waiver Thereof. The Old Chase Subordinated Indenture defines
an Event of Default with respect to Old Chase Subordinated Securities of any
series as certain events involving the bankruptcy, insolvency or reorganization
of the Company and such other events as may be established for any series of Old
Chase Subordinated Securities. If an Event of Default with respect to Old Chase
Subordinated Securities of any series at the time outstanding occurs and is
continuing, either the Old Chase Subordinated Trustee or the holders of not less
than 25% in aggregate principal amount of the outstanding Old Chase Subordinated
Securities of that series, by notice as provided in the Old Chase Subordinated
Indenture, may declare the principal amount (or, if the Old Chase Subordinated
Securities of that series are original issue discount Old Chase Subordinated
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all the Old Chase Subordinated Securities of that
series to be due and payable immediately in cash. The foregoing provision would
be subject as to enforcement to the broad equity powers of a federal bankruptcy
court and to the determination by that court of the nature of the rights of the
holders of the Old Chase Subordinated Securities of such series. At any time
after a declaration of acceleration with respect to Old Chase Subordinated
Securities of any series has been made, but before a judgment or decree for
payment of the money due has been obtained by the Old Chase Subordinated
Trustee, the holders of a majority in aggregate principal amount of the
outstanding Old Chase Subordinated Securities of that series may, under certain
circumstances, rescind and annul such declaration.
The Old Chase Subordinated Indenture provides that, subject to the duty of
the Old Chase Subordinated Trustee during the continuance of an Event of Default
to act with the required standard of care, the Old Chase Subordinated Trustee
will be under no obligation to exercise any of its rights or powers under the
Old Chase Subordinated Indenture at the request or direction of any of the
holders of the Old Chase Subordinated Securities of any series, unless such
holders shall have offered to the Old Chase Subordinated Trustee reasonable
indemnity. Subject to such provisions for the indemnification of the
Subordinated Trustee, the holders of a majority in aggregate principal amount of
the outstanding Old Chase Subordinated Securities of any series will have the
right to direct the time, method and place of conduct any proceeding for any
remedy
24
<PAGE> 27
available to the Old Chase Subordinated Trustee, or exercising any trust or
power conferred on the Old Chase Subordinated Trustee, with respect to the Old
Chase Subordinated Securities of such series.
The Old Chase Subordinated Indenture provides that notwithstanding any
other provision of the Old Chase Subordinated Indenture, each holder of Old
Chase Subordinated Securities of any series shall have the right to institute
suit for the enforcement of any payment (including any delivery of capital
securities to be exchanged for such Old Chase Subordinated Securities) of
principal of (and premium if any) and interest, if any, on such Old Chase
Subordinated Securities on the respective stated maturity dates expressed in
such Old Chase Subordinated Securities or on the exchange date or the redemption
date thereof, as the case may be, and that such right shall not be impaired
without the consent of such holder.
The holders of not less than a majority in principal amount of the
outstanding Old Chase Subordinated Securities of any series may, on behalf of
the holders of all Old Chase Subordinated Securities of such series, waive any
past default under the Old Chase Subordinated Indenture with respect to Old
Chase Subordinated Securities of such series and its consequences, except a
default (i) in the payment (including any obligation to exchange capital
securities for Old Chase Subordinated Securities of such series) of principal of
(or premium, if any) or interest, if any, on any Old Chase Subordinated Security
of such series, or (ii) in respect of a covenant or provision of the Old Chase
Subordinated Indenture which cannot be modified or amended without the consent
of the holder of each outstanding Old Chase Subordinated Security of such series
affected thereby.
The Company is required to file annually with the Old Chase Subordinated
Trustee a written statement of officers as to the existence or non-existence of
defaults.
Modification of the Old Chase Subordinated Indenture. The Old Chase
Subordinated Indenture provides that, with the consent of the holders of not
less than 66 2/3% in principal amount of the outstanding Old Chase Subordinated
Securities of each series affected thereby, modifications and alterations of the
Old Chase Subordinated Indenture may be made which affect the rights of the
holders of the Old Chase Subordinated Securities of such series, but no such
modification or alteration may be made without the consent of the holder of each
Old Chase Subordinated Security affected thereby which would (i) change the
fixed maturity of the principal of, or any instalment of principal of or
interest on, any Old Chase Subordinated Security, or reduce the principal amount
thereof or change the rate or rates (or the method of ascertaining the rate or
rates) of interest thereon (except as provided in the Old Chase Subordinated
Indenture or in the Old Chase Subordinated Securities of such series) or any
premium payable upon the redemption thereof, or reduce the portion of the
principal amount of any original issue discount Old Chase Subordinated Security
payable upon acceleration of the maturity thereof, or change any place where, or
the coin or currency in which, the principal amount of any Old Chase
Subordinated Security or any premium or interest thereon is payable, or impair
any right to institute suit for the enforcement of any right to receive payment
of the principal of (and premium, if any) and interest, if any, on such Old
Chase Subordinated Security on the respective stated maturity dates expressed in
such Old Chase Subordinated Security (or, in the case of redemption, on the
redemption date), or, if applicable to have delivered capital securities to be
exchanged for such Old Chase Subordinated Security and to have such capital
securities sold in a secondary offering to the extent provided in such Old Chase
Subordinated Security and in the Old Chase Subordinated Indenture, or modify the
provisions of the Old Chase Subordinated Indenture with respect to the
subordination of the Old Chase Subordinated Securities of such series in a
manner adverse to the holders, or (ii) reduce the above-stated percentage in
principal amount of outstanding Old Chase Subordinated Securities of such series
required to modify or alter the Old Chase Subordinated Indenture, or (iii)
impair the right of any holder of Old Chase Subordinated Securities of such
series, subject to the provisions of the Old Chase Subordinated Indenture and of
Old Chase Subordinated Securities of such series, to receive on any exchange
date for Old Chase Subordinated Securities of such series capital securities
with a market value equal to the amount established with respect to the
securities of such series held by such holder.
Set forth below are the principal terms of the Old Chase Subordinated
Securities issued and outstanding as of the date of this Prospectus, 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.
25
<PAGE> 28
TERMS AND PROVISIONS OF 7 1/2% SUBORDINATED NOTES DUE 1997
The 7 1/2% Subordinated Notes Due 1997 (the "7 1/2% December 1, 1997
Notes") are limited to $200,000,000 aggregate principal amount and will mature
on December 1, 1997. The 7 1/2% December 1, 1997 Notes are not redeemable and no
sinking fund is provided for the 7 1/2% December 1, 1997 Notes. The 7 1/2%
December 1, 1997 Notes bear interest from November 19, 1992, payable
semi-annually in arrears on each June 1 and December 1, commencing June 1, 1993
to the persons in whose names the 7 1/2% December 1, 1997 Notes are registered
at the close of business on the fifteenth day of May or November preceding such
June 1 and December 1.
TERMS AND PROVISIONS OF 10% SUBORDINATED NOTES DUE 1999
The 10% Subordinated Notes Due 1999 (the "10% June 15, 1999 Notes") are
limited to $275,000,000 aggregate principal amount and will mature on June 15,
1999. The 10% June 15, 1999 Notes are not redeemable and no sinking fund is
provided for the 10% June 15, 1999 Notes. The 10% June 15, 1999 Notes bear
interest from June 15, 1987, payable semiannually in arrears on each June 15 and
December 15, commencing December 15, 1987, to the persons in whose names the 10%
June 15, 1999 Notes are registered at the close of business on the first day of
June or December preceding such June 15 and December 15.
TERMS AND PROVISIONS OF 8% SUBORDINATED NOTES DUE 1999
The 8% Subordinated Notes Due 1999 (the "8% June 15, 1999 Notes") are
limited to $200,000,000 aggregate principal amount and will mature on June 15,
1999. The 8% June 15, 1999 Notes are not redeemable and no sinking fund is
provided for the 8% June 15, 1999 Notes. The 8% June 15, 1999 Notes bear
interest from June 24, 1992 payable semi-annually in arrears on each June 15 and
December 15, commencing December 15, 1992 to the persons in whose names the 8%
June 15, 1999 Notes are registered at the close of business on the first day of
June or December preceding such June 15 and December 15.
TERMS AND PROVISIONS OF 7 3/4% SUBORDINATED NOTES DUE 1999
The 7 3/4% Subordinated Notes Due 1999 (the "7 3/4% November 1, 1999
Notes") are limited to $200,000,000 aggregate principal amount and will mature
on November 1, 1999. The 7 3/4% November 1, 1999 Notes are not redeemable and no
sinking fund is provided for the 7 3/4% November 1, 1999 Notes. The 7 3/4%
November 1, 1999 Notes bear interest from November 1, 1992 payable semi-annually
in arrears on each May 1 and November 1, commencing May 1, 1993 to the persons
in whose names the 7 3/4% November 1, 1999 Notes are registered at the close of
business on the fifteenth day of April or October preceding such May 1 and
November 1.
TERMS AND PROVISIONS OF 8.80% SUBORDINATED NOTES DUE 2000
The 8.80% Subordinated Notes Due 2000 (the "8.80% February 1, 2000 Notes")
are limited to $150,000,000 aggregate principal amount and will mature on
February 1, 2000. The 8.80% February 1, 2000 Notes are redeemable on any
interest payment date after February 1, 1997 at a redemption price equal to the
principal amount and unpaid interest on the notes. No sinking fund is provided
for the 8.80% February 1, 2000 Notes. The 8.80% February 1, 2000 Notes bear
interest from January 24, 1995 payable semi-annually in arrears on each February
1 and August 1, commencing August 1, 1995 to the persons in whose names the
8.80% February 1, 2000 Notes are registered at the close of business on the
fifteenth day of January or July preceding such February 1 and August 1.
TERMS AND PROVISIONS OF 9 3/8% SUBORDINATED NOTES DUE 2001
The 9 3/8% Subordinated Notes Due 2001 (the "9 3/8% July 1, 2001 Notes")
are limited to $200,000,000 aggregate principal amount and will mature on July
1, 2001. The 9 3/8% July 1, 2001 Notes are not redeemable and no sinking fund is
provided for the 9 3/8% July 1, 2001 Notes. The 9 3/8% July 1, 2001 Notes bear
interest from July 13, 1989 payable semi-annually in arrears on each January 1
and July 1, commencing January 1,
26
<PAGE> 29
1990 to the persons in whose names the 9 3/8% July 1, 2001 Notes are registered
at the close of business on the fifteenth day of December or June preceding such
January 1 and July 1.
TERMS AND PROVISIONS OF 9 3/4% SUBORDINATED NOTES DUE 2001
The 9 3/4% Subordinated Notes Due 2001 (the "9 3/4% November 1, 2001
Notes") are limited to $150,000,000 aggregate principal amount and will mature
on November 1, 2001. The 9 3/4% November 1, 2001 Notes are not redeemable and no
sinking fund is provided for the 9 3/4% November 1, 2001 Notes. The 9 3/4%
November 1, 2001 Notes bear interest from March 1, 1991 payable semi-annually in
arrears on each May 1 and November 1, commencing May 1, 1992 to the persons in
whose names the 9 3/4% November 1, 2001 Notes are registered at the close of
business on the fifteenth day of April or October preceding such May 1 and
November 1.
TERMS AND PROVISIONS OF 9.05% SUBORDINATED NOTES DUE 2002
The 9.05% Subordinated Notes Due 2002 (the "9.05% February 1, 2002 Notes")
are limited to $100,000,000 aggregate principal amount and will mature on
February 1, 2002. The 9.05% February 1, 2002 Notes are redeemable on any
interest payment date after February 1, 1997 at a redemption price equal to the
principal amount and unpaid interest on the notes. No sinking fund is provided
for the 9.05% February 1, 2002 Notes. The 9.05% February 1, 2002 Notes bear
interest from February 2, 1995 payable semi-annually in arrears on each February
1 and August 1, commencing August 1, 1995 to the persons in whose names the
9.05% February 1, 2002 Notes are registered at the close of business on the
fifteenth day of January or July preceding such February 1 and August 1.
TERMS AND PROVISIONS OF 8% SUBORDINATED NOTES DUE 2002
The 8% Subordinated Notes Due 2002 (the "8% April 15, 2002 Notes") are
limited to $150,000,000 aggregate principal amount and will mature on April 15,
2002. The 8% April 15, 2002 Notes are redeemable on any interest payment date
after April 15, 1997 at a redemption price equal to the principal amount and
unpaid interest on the notes. No sinking fund is provided for the 8% April 15,
2002 Notes. The 8% April 15, 2002 Notes bear interest from April 26, 1995
payable semi-annually in arrears on each April 15 and October 15, commencing
October 15, 1995 to the persons in whose names the 8% April 15, 2002 Notes are
registered at the close of business on the fifteenth day of April or October
preceding such April 15 and October 15.
TERMS AND PROVISIONS OF 7 1/2% SUBORDINATED NOTES DUE 2003
The 7 1/2% Subordinated Notes Due 2003 (the "7 1/2% February 1, 2003
Notes") are limited to $200,000,000 aggregate principal amount and will mature
on February 1, 2003. The 7 1/2% February 1, 2003 Notes are not redeemable and no
sinking fund is provided for the 7 1/2% February 1, 2003 Notes. The 7 1/2%
February 1, 2003 Notes bear interest from February 2, 1993, payable
semi-annually in arrears on each February 1 and August 1, commencing August 1,
1993 to the persons in whose names the 7 1/2% February 1, 2003 Notes are
registered at the close of business on the fifteenth day of January 15 or July
15 preceding such February 1 and August 1.
TERMS AND PROVISIONS OF FLOATING RATE SUBORDINATED NOTES DUE 2003
The Floating Rate Subordinated Notes Due 2003 (the "Floating Rate July 15,
2003 Notes") are limited to $150,000,000 aggregate principal amount and will
mature on July 15, 2003. The Floating Rate July 15, 2003 Notes are not
redeemable and no sinking fund is provided for the Floating Rate July 15, 2003
Notes. The Floating Rate July 15, 2003 Notes bear interest from July 15, 1993
payable quarterly in arrears on each January 15, April 15, July 15 and October
15, commencing October 15, 1993 to the persons in whose names the Floating Rate
July 15, 1993 Notes are registered at the close of business on the first day of
January, April, July or October preceding such January 15, April 15, July 15 and
October 15. The per annum interest rate for each period will be reset quarterly
based on the greater of (i) LIBOR plus .125% or (ii) 4.35%.
27
<PAGE> 30
TERMS AND PROVISIONS OF FLOATING RATE SUBORDINATED NOTES DUE AUGUST 1, 2003
The Floating Rate Subordinated Notes Due August 1, 2003 (the "Floating Rate
August 1, 2003 Notes") are limited to $100,000,000 aggregate principal amount
and will mature on August 1, 2003. The Floating Rate August 1, 2003 Notes are
not redeemable and no sinking fund is provided for the Floating Rate August 1,
2003 Notes. The Floating Rate August 1, 2003 Notes bear interest from August 5,
1993 payable quarterly in arrears on each February 1, May 1, August 1 and
November 1, commencing November 1, 1993 to the persons in whose names the
Floating Rate August 1, 2003 Notes are registered at the close of business on
the fifteenth day of January, April, July or October preceding such February 1,
May 1, August 1 and November 1. The per annum interest rate for each period will
be reset quarterly based on the greater of LIBOR or 4.50%.
TERMS AND PROVISIONS OF 8% SUBORDINATED NOTES DUE 2004
The 8% Subordinated Notes Due 2004 (the "8% May 15, 2004 Notes") are
limited to $150,000,000 aggregate principal amount and will mature on May 15,
2004. The 8% May 15, 2004 Notes are redeemable on any day on or after May 15,
1999 at a redemption price equal to the principal amount and unpaid interest on
the notes. No sinking fund is provided for the 8% May 15, 2004 Notes. The 8% May
15, 2004 Notes bear interest from May 15, 1994 payable semi-annually in arrears
on each May 15 and November 15, commencing November 15, 1994 to the persons in
whose names the 8% May 15, 2004 Notes are registered at the close of business on
the first day of May or November preceding such May 15 and November 15.
TERMS AND PROVISIONS OF 7 7/8% SUBORDINATED NOTES DUE 2004
The 7 7/8% Subordinated Notes Due 2004 (the "7 7/8% August 1, 2004 Notes")
are limited to $150,000,000 aggregate principal amount and will mature on August
1, 2004. The 7 7/8% August 1, 2004 Notes are redeemable on and after August 1,
1999, at a redemption price equal to the principal amount and unpaid interest on
the notes. No sinking fund is provided for the 7 7/8% August 1, 2004 Notes. The
7 7/8% August 1, 2004 Notes bear interest from August 10, 1994 payable
semi-annually in arrears on each February 1 and August 1, commencing February 1,
1995 to the persons in whose names the 7 7/8% August 1, 2004 Notes are
registered at the close of business on the fifteenth day of January or July
preceding such February 1 and August 1.
TERMS AND PROVISIONS OF 8% SUBORDINATED NOTES DUE 2005
The 8% Subordinated Notes Due 2005 (the "8% May 1, 2005 Notes") are limited
to $150,000,000 aggregate principal amount and will mature on May 1, 2005. The
8% May 1, 2005 Notes are redeemable on May 1, 1998 and on any interest payment
date thereafter at a redemption price equal to the principal amount and unpaid
interest on the notes. No sinking fund is provided for the 8% May 1, 2005 Notes.
The 8% May 1, 2005 Notes bear interest from May 11, 1995 payable semi-annually
in arrears on each May 1 and November 1, commencing March 1, 1995 to the persons
in whose names the 8% May 1, 2005 Notes are registered at the close of business
on the fifteenth day of April or October preceding such May 1 and November 1.
TERMS AND PROVISIONS OF 6 1/2% SUBORDINATED NOTES DUE 2005
The 6 1/2% Subordinated Notes Due 2005 (the "6 1/2% August 1, 2005 Notes")
are limited to $200,000,000 aggregate principal amount and will mature on August
1, 2005. The 6 1/2% August 1, 2005 Notes are not redeemable and no sinking fund
is provided for the 6 1/2% August 1, 2005 Notes. The 6 1/2% August 1, 2005 Notes
bear interest from July 27, 1993 payable semi-annually in arrears on each
February 1 and August 1, commencing February 1, 1994 to the persons in whose
names the 6 1/2% August 1, 2005 Notes are registered at the close of business on
the fifteenth day of January or July preceding such February 1 and August 1.
TERMS AND PROVISIONS OF 6 1/4% SUBORDINATED NOTES DUE 2006
The 6 1/4% Subordinated Notes Due 2006 (the "6 1/4% January 15, 2006
Notes") are limited to $200,000,000 aggregate principal amount and will mature
on January 15, 2006. The 6 1/4% January 15, 2006 Notes are not redeemable and no
sinking fund is provided for the 6 1/4% January 15, 2006 Notes. The 6 1/4%
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<PAGE> 31
January 15, 2006 Notes bear interest from January 19, 1996 payable semi-annually
in arrears on each January 15 and July 15, commencing July 15, 1996 to the
persons in whose names the 6 1/4% January 15, 2006 Notes are registered at the
close of business on the first day of January or July preceding such January 15
and July 15.
TERMS AND PROVISIONS OF 6 3/4% SUBORDINATED NOTES DUE 2008
The 6 3/4% Subordinated Notes Due 2008 (the "6 3/4% August 15, 2008 Notes")
are limited to $200,000,000 aggregate principal amount and will mature on August
15, 2008. The 6 3/4% August 15, 2008 Notes are not redeemable and no sinking
fund is provided for the 6 3/4% August 15, 2008 Notes. The 6 3/4% August 15,
2008 Notes bear interest from August 17, 1993 payable semi-annually in arrears
on each February 15 and August 15, commencing February 15, 1994 to the persons
in whose names the 6 3/4% August 15, 2008 Notes are registered at the close of
business on the first day of August or February preceding such August 15 and
February 15.
TERMS AND PROVISIONS OF 6 1/8% SUBORDINATED NOTES DUE 2008
The 6 1/8% Subordinated Notes Due 2008 (the "6 1/8% October 15, 2008
Notes") are limited to $100,000,000 aggregate principal amount and will mature
on October 15, 2008. The 6 1/8% October 15, 2008 Notes are not redeemable and no
sinking fund is provided for the 6 1/8% October 15, 2008 Notes. The 6 1/8%
October 15, 2008 Notes bear interest from October 18, 1993 payable semi-annually
in arrears on each April 15 and October 15, commencing August 15, 1994 to the
persons in whose names the 6 1/8% October 15, 2008 Notes are registered at the
close of business on the first day of April or October preceding such April 15
and October 15.
TERMS AND PROVISIONS OF 6 1/2% SUBORDINATED NOTES DUE 2009
The 6 1/2% Subordinated Notes Due 2009 (the "6 1/2% January 15, 2009
Notes") are limited to $150,000,000 aggregate principal amount and will mature
on January 15, 2009. The 6 1/2% January 15, 2009 Notes are not redeemable and no
sinking fund is provided for the 6 1/2% January 15, 2009 Notes. The 6 1/2%
January 15, 2009 Notes bear interest from January 15, 1994 payable semi-annually
in arrears on each January 15 and July 15, commencing January 15, 1994 to the
persons in whose names the 6 1/2% January 15, 2009 Notes are registered at the
close of business on the first day of January or July preceding such January 15
and July 15.
TERMS AND PROVISIONS OF SUBORDINATED MEDIUM-TERM NOTES, SERIES A
Set forth below is a table indicating the issuance dates and the maturity
dates of the $99,975,000 aggregate principal amount of Subordinated Medium-Term
Notes, Series A (the "Old Chase Subordinated Series A Notes") issued and
outstanding as of the date of this Prospectus. The Old Chase Subordinated Series
A Notes have either (a) fixed interest rates or (b) floating interest rates
which are determined, and adjusted periodically, by reference to an interest
rate basis or formula.
<TABLE>
<CAPTION>
PRINCIPAL
ISSUANCE DATE AMOUNT MATURITY DATE RATE
- ----------------------------------- ---------- ----------------------------------- -----
<S> <C> <C> <C>
February 13, 1992................. $71,675,000 ....... February 13, 1999.................. 8.65%
February 19, 1992................. 4,800,000 ....... February 19, 1999.................. 8.76%
February 19, 1992................. 6,000,000 ....... February 19, 1999.................. 8.77%
February 20, 1992................. 10,000,000 ....... February 22, 1999.................. 8.81%
February 24, 1992................. 7,500,000 ....... March 1, 1999...................... 9.00%
</TABLE>
29
<PAGE> 32
TERMS AND PROVISIONS OF SUBORDINATED MEDIUM-TERM NOTES, SERIES B
Set forth below is a table indicating the issuance dates and the maturity
dates of the $241,205,000 aggregate principal amount of Subordinated Medium-Term
Notes, Series B (the "Old Chase Subordinated Series B Notes") issued and
outstanding as of the date of this Prospectus. The Old Chase Subordinated Series
B Notes have either (a) fixed interest rates or (b) floating interest rates
which are determined, and adjusted periodically, by reference to an interest
rate basis or formula.
<TABLE>
<CAPTION>
PRINCIPAL
ISSUANCE DATE AMOUNT MATURITY DATE RATE
- ------------------------- ----------- ------------------------ ---------------------------
<S> <C> <C> <C>
July 23, 1992............ $75,000,000 ..... July 23, 1999........... 7.580%
September 1, 1993........ 91,205,000 ..... September 1, 2003....... LIBOR reset semi-annually
minus 0.15%; but in no
event shall the rate be
more than 9.0% or less than
5.5%
May 25, 1995............. 25,000,000 ..... May 15, 2010............ 7.625%
July 19, 1995............ 25,000,000 ..... July 15, 2010........... 7.200%
February 15, 1996........ 25,000,000 ..... February 15, 2011....... 6.600%
</TABLE>
TERMS AND PROVISIONS OF SUBORDINATED MEDIUM-TERM NOTES, SERIES C
Set forth below is a table indicating the issuance dates and the maturity
dates of the $136,750,000 aggregate principal amount of Senior Medium-Term
Notes, Series C (the "Old Chase Subordinated Series C Notes") issued and
outstanding as of the date of this Prospectus. The Old Chase Subordinated Series
C Notes have either (a) fixed rates or (b) floating interest rates which are
determined, and adjusted periodically, by reference to an interest rate basis or
formula.
<TABLE>
<CAPTION>
PRINCIPAL
ISSUANCE DATE AMOUNT MATURITY DATE RATE
- ----------------------------------- ----------- ----------------------------------- -----
<S> <C> <C> <C>
December 23, 1994.................. $ 1,500,000 ...... December 15, 2004.................. 8.50%
December 23, 1994.................. 3,000,000 ...... December 15, 2001.................. 8.40%
December 30, 1994.................. 4,000,000 ...... December 15, 2001.................. 8.50%
January 13, 1995................... 3,500,000 ...... January 15, 2002................... 8.55%
January 20, 1995................... 5,500,000 ...... January 15, 2002................... 8.60%
January 27, 1995................... 6,500,000 ...... January 15, 2002................... 8.40%
February 3, 1995................... 7,000,000 ...... February 15, 2002.................. 8.55%
February 3, 1995................... 15,000,000 ...... February 15, 2002.................. 9.00%
February 10, 1995.................. 7,000,000 ...... February 15, 2002.................. 8.25%
February 17, 1995.................. 3,500,000 ...... February 15, 2002.................. 8.10%
February 24, 1995.................. 3,250,000 ...... February 15, 2002.................. 8.25%
March 3, 1995...................... 2,000,000 ...... March 15, 2002..................... 7.90%
June 23, 1995...................... 25,000,000 ...... June 15, 2005...................... 7.05%
February 1, 1996................... 25,000,000 ...... February 1, 2011................... 6.75%
February 1, 1996................... 25,000,000 ...... February 1, 2011................... 6.75%
</TABLE>
PERMANENT GLOBAL OLD CHASE DEBT SECURITIES
Certain series of the Old Chase Debt Securities were issued in permanent
global form. See "Permanent Global Debt Securities" for a discussion of the
rights of beneficial owners of interests in permanent global debt securities.
30
<PAGE> 33
INFORMATION CONCERNING THE TRUSTEES
The Company, the Bank and certain other subsidiaries of the Company
maintain deposits with, and conduct other banking transactions with, the
trustees under each of the Old Chase Indentures in the ordinary course of
business. First Trust of New York, National Association is also trustee under
the Company Subordinated Indenture and Bankers Trust Company is also trustee
under the Company Senior Indenture.
31
<PAGE> 34
DESCRIPTION OF MHC SUBORDINATED SECURITIES
The statements under this caption are brief summaries of certain provisions
contained in the MHC Subordinated Indenture (as defined below), do not purport
to be complete and are qualified in their entirety by reference to the MHC
Subordinated Indenture, a copy of which is an exhibit 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 MHC Subordinated Indenture, it being intended that such defined terms
shall be incorporated herein by reference.
GENERAL
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 (the "MHC Subordinated Indenture"). As a
result of the merger of MHC into the Company, the Company has assumed the
obligations and liabilities of MHC under the MHC Subordinated Indenture and the
MHC Subordinated Securities.
Since the Company is a holding company, the right of the Company to
participate in any distribution of assets of any subsidiary, including the Bank,
Chase USA and Texas Commerce, upon such subsidiary's liquidation or
reorganization or otherwise (and thus the ability of holders of the MHC
Subordinated 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 Subordinated 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. The MHC Subordinated Indenture does not contain any restriction on the
Company's ability to enter into a highly leveraged transaction or any provision
affording special protection to holders of MHC Subordinated Securities in the
event the Company engages in a highly leveraged transaction. Further, the MHC
Subordinated Indenture does not contain any provisions that would provide
protection to holders of MHC Subordinated 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 Subordinated Securities are direct, 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 or junior to such MHC
Subordinated Securities (collectively, "MHC Senior 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.
32
<PAGE> 35
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 Indebtedness may receive more ratably, and
holders of MHC Subordinated Securities may receive less ratably, than other
creditors of the Company, including holders of Company Subordinated Securities.
See "Description of Company Debt Securities -- Company 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 hold MHC Senior Indebtedness, and the creditors of the
Company who do not 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
33
<PAGE> 36
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.
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 the date of this Prospectus, 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.
TERMS AND PROVISIONS OF 8 1/2% SUBORDINATED CAPITAL NOTES DUE 1999
The 8 1/2% Subordinated Capital Notes Due 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 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.
INFORMATION CONCERNING THE TRUSTEE
The Company, the Bank and certain other subsidiaries of the Company
maintain deposits with, and conduct other business transactions with, the MHC
Subordinated Trustee in the ordinary course of business.
PERMANENT GLOBAL DEBT SECURITIES
Certain series of the 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 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
34
<PAGE> 37
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 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 office of the 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
35
<PAGE> 38
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 Company Indentures or the Old Chase 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 Company Indentures or the Old Chase 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.
36
<PAGE> 39
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 and the Company's Restated Certificate of Incorporation (the
"Certificate of Incorporation"), including Certificates of Designations pursuant
to which the outstanding series of preferred stock were issued.
COMMON STOCK
The Company is authorized to issue up to 750,000,000 shares of Common
Stock. At December 31, 1996, the Company had issued 440,747,317 shares of Common
Stock (including 9,936,716 shares held in its treasury) and had reserved
approximately 76,000,000 shares of Common Stock for issuance under various
employee or non-employee directed incentive, compensation and option plans under
the Company's Dividend Reinvestment Plan.
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 to 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.
ChaseMellon Shareholder Services, L.L.C. is the transfer agent, registrar
and dividend disbursement agent for the Common Stock.
PREFERRED STOCK
Under the 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 December 31, 1996, there were issued and outstanding: (i) 4,000,000
shares of 10.96% Preferred Stock (the "10.96% Preferred"); (ii) 14,000,000
shares of the 8 3/8% Preferred Stock (the "8 3/8% Preferred"); (iii) 2,000,000
shares of 7.92% Cumulative Preferred Stock (the "7.92% Preferred"); (iv)
2,000,000 shares of 7.58% Cumulative Preferred Stock (the "7.58% Preferred"),
(v) 2,000,000 shares of 7 1/2% Cumulative Preferred Stock (the "7 1/2%
Preferred"), (vi) 2,000,000 shares of Adjustable Rate Cumulative Preferred
Stock, Series L (the "Series L Preferred"); (vii) 5,600,000 shares of 10 1/2%
Cumulative Preferred Stock (the "10 1/2% Preferred"); (viii) 4,000,000 shares of
9.76% Cumulative Preferred Stock (the "9.76% Preferred"); (ix) 8,000,000 shares
of 10.84% Cumulative Preferred Stock (the "10.84% Preferred"); (x) 6,000,000
shares
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<PAGE> 40
of 9.08% Cumulative Preferred Stock (the "9.08% Preferred"); (xi) 6,800,000
shares of 8 1/2% Cumulative Preferred Stock (the 8 1/2% Preferred"); (xii)
9,600,000 shares of 8.32% Cumulative Preferred Stock (the "8.32% Preferred");
(xiii) 6,900,000 shares of 8.40% Cumulative Preferred Stock (the "8.40%
Preferred"); and (xiv) 9,100,000 shares of Adjustable Rate Preferred Stock,
Series N (the "Series N Preferred"). The shares of 7.92% Preferred, 7.58%
Preferred and 7 1/2% Preferred are represented by Depositary Shares each
representing 0.25 of a share. The series of preferred stock referred to in
clauses (i) through (vi) are sometimes referred to below as the "Pre-Merger
Preferred Stock", and the series of preferred stock listed in clauses (vii)
through (xiv) are sometimes referred to below as the "Merger Preferred Stock".
The 9.08% Preferred was redeemed by the Company on March 31, 1997.
All series of outstanding preferred stock rank on a parity with each other
such 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 L Preferred and the Series N
Preferred vary with the interest rates on certain U.S. Government obligations.
In the event of a liquidation or dissolution or winding-up of the Company,
the holders of each series of outstanding Preferred Stock will be entitled to
receive out of the assets of the company available for distribution to
stockholders, before any distribution of assets is made to holders of Common
Stock or any other class of stock ranking junior to such series of outstanding
preferred stock upon liquidation, liquidating distributions, in the amount set
forth opposite such series in the table below, plus accrued and unpaid
dividends, if any. Each series of Preferred Stock outstanding as of the date of
this Prospectus is redeemable at the option of the Company, in each case at a
redemption price equal to its liquidation value, plus accrued and unpaid
dividends, thereon, if any, to the date fixed for redemption, as set forth in
the table below.
<TABLE>
<CAPTION>
LIQUIDATION VALUE/REDEMPTION PRICE
PER SHARE
REDEEMABLE ON OR (PLUS, IN EACH CASE, ACCRUED
SERIES OF PREFERRED STOCK AFTER AND UNPAID DIVIDENDS IF ANY)
- ----------------------------------------- ------------------ ----------------------------------
<S> <C> <C>
10.96% Preferred......................... June 30, 2000 $ 25
8 3/8% Preferred......................... June 1, 1997 $ 25
7.92% Preferred.......................... October 1, 1997 $100
7.58% Preferred.......................... April 1, 1998 $100
7 1/2% Preferred......................... June 1, 1998 $100
Series L Preferred....................... June 30, 1999 $100
10 1/2% Preferred........................ September 30, 1998 $ 25
9.76% Preferred.......................... September 30, 1999 $ 25
10.84% Preferred......................... June 30, 2001 $ 25
8 1/2% Preferred......................... June 30, 1997 $ 25
8.32% Preferred.......................... September 30, 1997 $ 25
8.40% Preferred.......................... March 31, 1998 $ 25
Series N Preferred....................... June 30, 1999 $ 25
</TABLE>
If at the time of any annual meeting of the Company's stockholders the
equivalent of six quarterly dividends payable on any series of preferred stock
is in default, the number of directors of the Company will be increased by two
and the holders of all outstanding series of preferred stock, voting as a single
class without regard to series, will be entitled to elect those additional two
directors at each such annual meeting. Each director elected by the holders of
shares of 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.
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<PAGE> 41
The affirmative vote or consent of the holders of at least two-thirds of
the outstanding shares of any series of Pre-Merger Preferred Stock, voting as a
separate class, is required for any amendment of the Certificate of
Incorporation that would adversely affect the powers, preferences, privileges or
rights of such series of Pre-Merger 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 Pre-Merger Preferred Stock and
any other series of preferred stock ranking on a parity with such series of
Pre-Merger Preferred Stock as to dividends or upon liquidation, voting as a
single class without regard to series, is required to create, authorize or
issued, or reclassify any stock of the Company into, any additional class or
series of stock ranking prior to such series of Pre-Merger Preferred Stock as to
dividends or upon liquidation, or to create, authorize or issue any obligation
or security convertible into or exercisable for any such prior ranking preferred
stock.
Each series of Merger Preferred Stock provides that the affirmative vote or
consent of the holders of at least two-thirds of the outstanding shares of all
series of preferred stock, voting together as a single class without regard to
series, will be required to (a) create any class or series of stock which shall
have preference as to dividends or distribution of assets over any outstanding
series of preferred stock other than a series which shall not have any right to
object to such creation or (b) alter or change the provisions of the Certificate
of Incorporation so as to adversely affect the voting powers, preferences or
special rights of the holders of a series of preferred stock; provided that if
such amendment shall not adversely affect all series of preferred stock, such
amendment need only be approved by the holders of at least two-thirds of the
shares of all series of preferred stock adversely affected thereby, voting
together as a single class without regard to series.
No series of outstanding preferred stock is convertible into shares of
Common Stock or other securities. No series of outstanding preferred stock is
subject to preemptive rights. ChaseMellon Shareholder Services, L.L.C. is the
transfer agent, registrar and dividend disbursement agent for the preferred
stock.
DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Securities Warrants for the purchase of Company Debt
Securities, Preferred Stock or Common Stock. Securities Warrants may be issued
independently or together with Company Debt Securities, Preferred Stock or
Common Stock and may be attached to or separate from such Company 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 the 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 June 30, 1996, 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 Company Debt Securities
purchasable upon exercise of such Securities Warrants and the price at which
such Company 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
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<PAGE> 42
(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 Company 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 Company Debt
Securities, Preferred Stock or Common Stock, holders of such Securities Warrants
will not have any of the rights of holders of the Company 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 Company 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 June 30, 1996, no Currency Warrants
were outstanding. If any Currency Warrants are issued, the 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 the 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
40
<PAGE> 43
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 depositary 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 depositary 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 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
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<PAGE> 44
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" ABOVE, AND TO
THE OTHER INFORMATION REGARDING THE CURRENCY WARRANTS AND THE DESIGNATED
CURRENCY SET FORTH HEREIN.
OTHER MATTERS
The distribution of the Debt Securities by CSI will comply with the
requirements of Rule 2720 of the Conduct Rules 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 of the Company on Form 10-K for the year ended
December 31, 1996 have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
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<PAGE> 45
======================================================
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.................... 1
Incorporation of Certain Documents by
Reference.............................. 1
The Chase Manhattan Corporation.......... 2
Consolidated Ratios of Earnings to Fixed
Charges and Preferred Stock Dividend
Requirements........................... 3
Description of Company Debt Securities... 4
Description of Old Chase Debt
Securities............................. 21
Description of MHC Subordinated
Securities............................. 32
Permanent Global Debt Securities......... 34
Description of Capital Stock............. 37
Description of Securities Warrants....... 39
Description of Currency Warrants......... 40
Risk Factors Relating to Currency
Warrants............................... 41
Other Matters............................ 42
Experts.................................. 42
</TABLE>
======================================================
======================================================
[CHASE MANHATTAN LOGO]
THE CHASE MANHATTAN
CORPORATION
DEBT SECURITIES
WARRANTS
--------------------
PROSPECTUS
--------------------
APRIL 8, 1997
======================================================
