<PAGE> 1
As Filed Pursuant to Rule 424(b)(2)
Registration No. 333-94393
Prospectus Supplement (To Prospectus dated February 11, 2000)
[CHASE LOGO]
$500,000,000
THE CHASE MANHATTAN CORPORATION
7.875% SUBORDINATED NOTES DUE 2010
MATURITY
- The Subordinated Notes will mature on June 15, 2010.
INTEREST
- Interest on the Subordinated Notes will be payable on June 15 and December
15 of each year, beginning December 15, 2000.
- Interest will accrue from June 9, 2000.
REDEMPTION
- We cannot redeem the Subordinated Notes prior to their maturity.
- There is no sinking fund.
LISTING
- We do not intend to list the Subordinated Notes on any securities exchange.
RANKING
- The Subordinated Notes are unsecured. They will rank junior to our Senior
Indebtedness and, under certain circumstances, to our Additional Senior
Obligations.
- Holders of Subordinated Notes may not accelerate the maturity of the
Subordinated Notes, except upon our bankruptcy or insolvency.
----------------------------------------------------------------------
THE SUBORDINATED NOTES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SUBORDINATED NOTES OR DETERMINED
THAT THIS PROSPECTUS SUPPLEMENT OR THE ATTACHED PROSPECTUS IS ACCURATE OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------------------------------------------------------------
<TABLE>
<CAPTION>
Per Note Total
<S> <C> <C>
Initial Price to Public 99.868% $499,340,000
Underwriting Discount 0.450% $ 2,250,000
Proceeds to Us (Before Expenses) 99.418% $497,090,000
</TABLE>
Your purchase price will also include any interest that has accrued on the
Subordinated Notes from June 9, 2000.
----------------------------------------------------------------------
- The Subordinated Notes will be delivered to you in global form through the
book-entry delivery system of The Depository Trust Company on or about June
9, 2000.
- The underwriters listed below will purchase the Subordinated Notes from us
on a firm commitment basis and offer them to you, subject to certain
conditions.
- Our affiliates, including Chase Securities Inc., may use this prospectus
supplement and the attached prospectus in connection with offers and sales
of the Subordinated Notes in the secondary market. These affiliates may act
as principal or agent in those transactions. Secondary market sales will be
made at prices related to market prices at the time of sale.
CHASE SECURITIES INC.
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS
SALOMON SMITH BARNEY
----------------------------------------------------------------------
The date of this prospectus supplement is June 2, 2000.
<PAGE> 2
In making your investment decision, you should rely only on the information
contained or incorporated by reference in this prospectus supplement and the
attached prospectus. We have not authorized anyone to provide you with any other
information. If you receive any information not authorized by us, you should not
rely on it.
We are offering to sell the Subordinated Notes only in places where sales are
permitted.
You should not assume that the information contained or incorporated by
reference in this prospectus supplement or the attached prospectus is accurate
as of any date other than its respective date.
------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Certain Terms of the Subordinated
Notes............................... S-3
Underwriting.......................... S-3
Legal Opinions........................ S-5
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS
Summary............................... 2
The Chase Manhattan Corporation....... 6
Use of Proceeds....................... 7
Description of Debt Securities........ 7
Description of Preferred Stock........ 19
Description of Common Stock........... 26
Description of Securities Warrants.... 27
Description of Currency Warrants...... 27
Plan of Distribution.................. 28
Experts............................... 30
Legal Opinions........................ 30
</TABLE>
S-2
<PAGE> 3
CERTAIN TERMS OF THE SUBORDINATED NOTES
The following description of the particular terms of the 7.875% Subordinated
Notes Due 2010 (the "Subordinated Notes") supplements the description of the
general terms of the Subordinated Securities set forth under the headings
"Description of Debt Securities -- General" and "-- Subordinated Securities" in
the attached prospectus. Capitalized terms used but not defined in this
prospectus supplement have the meanings assigned in the attached prospectus or
the Subordinated Indenture referred to in the prospectus.
The Subordinated Notes are a series of Subordinated Securities. They will mature
on June 15, 2010. They will be issued under the Subordinated Indenture and will
be initially limited to $500,000,000 aggregate principal amount. We have the
right, however, to issue additional Subordinated Notes in the future. These
additional Subordinated Notes will have the same terms as the Subordinated Notes
being offered but may be offered at a different offering price than the
Subordinated Notes being offered. If issued, these additional Subordinated Notes
will become part of the same series as the Subordinated Notes being offered.
The Subordinated Notes will bear interest at the annual rate of 7.875%. Interest
on the Subordinated Notes being offered will accrue from June 9, 2000. We will
pay interest on the Subordinated Notes semi-annually in arrears on June 15 and
December 15 of each year, beginning December 15, 2000. Interest will be paid to
the persons in whose names the Subordinated Notes are registered at the close of
business on the preceding June 1 and December 1.
We will make all principal and interest payments on the Subordinated Notes in
immediately available funds. All sales of the Subordinated Notes, including
secondary market sales, will settle in immediately available funds.
We cannot redeem the Subordinated Notes prior to their maturity. No sinking fund
is provided for the Subordinated Notes.
The Subordinated Notes may be issued in denominations of $1,000 and integral
multiples of $1,000. The Subordinated Notes will be represented by one or more
permanent global Subordinated Notes registered in the name of DTC or its
nominee, as described under "Description of Debt Securities -- Permanent Global
Debt Securities" in the attached prospectus.
Our obligations under the Subordinated Notes will be subordinated in right of
payment to all of our Senior Indebtedness and, under certain circumstances, to
all of our Additional Senior Obligations, as described in the attached
prospectus under the heading "Description of Debt Securities -- Subordinated
Securities -- Subordination." As of March 31, 2000, our outstanding Senior
Indebtedness and Additional Senior Obligations totaled approximately $19.0
billion.
Holders of the Subordinated Notes may not accelerate the maturity of the
Subordinated Notes, except in the event of our bankruptcy or reorganization.
Holders may not accelerate the Subordinated Notes if we fail to pay interest or
fail to perform any other agreement in the Subordinated Notes or the
Subordinated Indenture. See "Description of Debt Securities -- Subordinated
Securities -- Defaults and Waivers" in the attached prospectus.
UNDERWRITING
We and the underwriters named below (the "Underwriters") have entered into an
underwriting agreement relating to the offer and sale of the Subordinated Notes
(the "Underwriting Agreement"). In the Underwriting Agreement, we have agreed to
sell to each Underwriter, and each Underwriter has agreed to purchase from us,
the principal amount of Subordinated Notes that appears opposite the name of
that Underwriter below:
<TABLE>
<CAPTION>
UNDERWRITER PRINCIPAL AMOUNT
----------- ----------------
<S> <C>
Chase Securities Inc. ...................................... $425,000,000
Bear, Stearns & Co. Inc. ................................... 25,000,000
Lehman Brothers Inc. ....................................... 25,000,000
Salomon Smith Barney Inc. .................................. 25,000,000
------------
Total............................................. $500,000,000
============
</TABLE>
S-3
<PAGE> 4
The obligations of the Underwriters under the Underwriting Agreement, including
their agreement to purchase the Subordinated Notes from us, are several and not
joint. Those obligations are also subject to the satisfaction of certain
conditions in the Underwriting Agreement. The Underwriters have agreed to
purchase all of the Subordinated Notes if any of them are purchased.
The Underwriters have advised us that they propose to offer the Subordinated
Notes to the public at the public offering price that appears on the cover page
of this prospectus supplement. The Underwriters may offer the Subordinated Notes
to selected dealers at the public offering price minus a selling concession of
up to 0.350% of the principal amount. In addition, the Underwriters may allow,
and those selected dealers may reallow, a selling concession of up to 0.250% of
the principal amount to certain other dealers. After the initial public
offering, the Underwriters may change the public offering price and any other
selling terms.
In the Underwriting Agreement, we have agreed that:
- we will pay our expenses related to this offering, which we estimate will be
$50,000; and
- we will indemnify the Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933.
The Subordinated Notes are a new issue of securities, and there is currently no
established trading market for the Subordinated Notes. In addition, we do not
intend to apply to list the Subordinated Notes on any securities exchange or to
have the Subordinated Notes quoted on a quotation system. The Underwriters have
advised us that they intend to make a market in the Subordinated Notes. However,
they are not obligated to do so and may discontinue any market-making in the
Subordinated Notes at any time in their sole discretion. Therefore, we cannot
assure you that a liquid trading market for the Subordinated Notes will develop,
that you will be able to sell your Subordinated Notes at a particular time or
that the price you receive when you sell will be favorable.
We own directly or indirectly all the outstanding equity securities of Chase
Securities Inc. ("CSI"). The underwriting arrangements for this offering comply
with the requirements of Rule 2720 of the Conduct Rules of the National
Association of Securities Dealers, Inc. (the "NASD") regarding an NASD member
firm's underwriting of securities of an affiliate. In accordance with Rule 2720,
no Underwriter may make sales in this offering to any discretionary account
without the prior approval of the customer.
Our affiliates, including CSI, may use this prospectus supplement and the
attached prospectus in connection with offers and sales of the Subordinated
Notes in the secondary market. These affiliates may act as principal or agent in
those transactions. Secondary market sales will be made at prices related to
market prices at the time of sale.
In connection with this offering of the Subordinated Notes, the Underwriters may
engage in overallotment, stabilizing transactions and syndicate covering
transactions in accordance with Regulation M under the Securities Exchange Act
of 1934 (the "Exchange Act"). Overallotment involves sales in excess of the
offering size, which create a short position for the Underwriters. Stabilizing
transactions involve bids to purchase the Subordinated Notes in the open market
for the purpose of pegging, fixing or maintaining the price of the Subordinated
Notes. Syndicate covering transactions involve purchases of the Subordinated
Notes in the open market after the distribution has been completed in order to
cover short positions. Stabilizing transactions and syndicate covering
transactions may cause the price of the Subordinated Notes to be higher than it
would otherwise be in the absence of those transactions. If the Underwriters
engage in stabilizing or syndicate covering transactions, they may discontinue
them at any time.
Certain of the Underwriters engage in transactions with and perform services for
us and our subsidiaries in the ordinary course of business.
We will deliver the Subordinated Notes to the Underwriters at the closing of
this offering when the Underwriters pay us the purchase price for the
Subordinated Notes.
S-4
<PAGE> 5
LEGAL OPINIONS
Simpson Thacher & Bartlett, New York, New York, will deliver an opinion for
us regarding the validity of the Subordinated Notes. Cravath, Swaine & Moore,
New York, New York, will provide a similar opinion for the Underwriters.
Cravath, Swaine & Moore has represented and continues to represent us and our
subsidiaries in a substantial number of matters on a regular basis.
S-5
<PAGE> 6
[Chase Manhattan Logo]
THE CHASE MANHATTAN CORPORATION
DEBT SECURITIES
PREFERRED STOCK
DEPOSITARY SHARES
COMMON STOCK
WARRANTS
------------------------
WE WILL PROVIDE SPECIFIC TERMS OF THE ABOVE SECURITIES IN SUPPLEMENTS TO THIS
PROSPECTUS.
YOU SHOULD READ THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT CAREFULLY BEFORE
YOU INVEST.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SEC OR ANY STATE SECURITIES
COMMISSION, NOR HAVE THESE ORGANIZATIONS DETERMINED THAT THIS PROSPECTUS IS
ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THIS PROSPECTUS IS DATED FEBRUARY 11, 2000
<PAGE> 7
SUMMARY
This summary highlights selected information from this document and may not
contain all of the information that is important to you. To understand the terms
of our securities, you should carefully read:
- this prospectus, which explains the general terms of the securities we may
offer;
- the attached prospectus supplement, which gives the specific terms of the
particular securities we are offering and may change or update information in
this prospectus; and
- the documents we have referred you to in "Where You Can Find More Information
About Chase" on page 5 for information about our company and our financial
statements.
Certain capitalized terms used in this summary are defined elsewhere in this
prospectus.
THE CHASE MANHATTAN CORPORATION
The Chase Manhattan Corporation ("Chase", which may be referred to as "we" or
"us") is a registered bank holding company. Through various subsidiaries, we
conduct domestic and international financial services businesses. At September
30, 1999, we were one of the largest banking institutions in the United States,
with $371 billion in assets and $22 billion in stockholders' equity.
As of the date of this prospectus, Chase is organized into three major business
franchises: Global Bank, National Consumer Services and Global Services. Our
principal bank subsidiaries are The Chase Manhattan Bank, headquartered in New
York, and Chase Manhattan Bank USA, National Association, headquartered in
Delaware. Our principal non-bank subsidiary is Chase Securities Inc., which is
engaged in securities underwriting and dealing.
THE SECURITIES WE MAY OFFER
This prospectus is part of a registration statement (No. 333-94393) (the
"registration statement") that we filed with the SEC utilizing a "shelf"
registration process. Under this shelf process, we may offer from time to time
up to $18,201,485,414 of any of the following securities, either separately or
in units:
- debt;
- preferred stock;
- depositary shares;
- common stock; and
- warrants.
This prospectus provides you with a general description of the securities we may
offer. Each time we offer securities, we will provide you with a prospectus
supplement that will describe the specific amounts, prices and terms of the
securities being offered. The prospectus supplement may also add to, update or
change information contained in this prospectus.
DEBT SECURITIES
We may offer our unsecured general obligations, which may be senior or
subordinated. The senior debt securities will have the same rank as all of our
other unsecured, unsubordinated debt. The subordinated debt securities will be
entitled to payment only after payment on our "Senior Indebtedness" (which is
described below and which includes the senior debt securities). In addition,
under certain circumstances relating to our insolvency or a similar event, the
subordinated debt securities will be entitled to payment only after the payment
of claims relating to "Additional Senior Obligations" (as described below). For
the definitions of Senior Indebtedness and Additional Senior Obligations, see
"Description of Debt Securities -- Subordinated Debt
Securities -- Subordination" below.
The senior debt securities will be issued under an indenture between us and
Bankers Trust Company, as trustee. The subordinated debt securities will be
issued under an indenture between us and U.S. Bank Trust National Association,
as trustee. We have summarized certain general features of the debt securities
from the indentures. We encourage you to read the indentures (which are exhibits
to the registration statement) and our recent periodic and current reports filed
with the SEC. Directions on how you can get copies of these reports are provided
on page 5.
2
<PAGE> 8
We are a holding company that conducts substantially all of our operations
through subsidiaries. As a result, claims of the holders of the debt securities
will generally have a junior position to claims of creditors of our subsidiaries
except to the extent that Chase is recognized, and receives payment, as a
creditor of those subsidiaries. Claims of creditors of our subsidiaries other
than Chase include substantial amounts of long-term debt, deposit liabilities,
federal funds purchased, securities sold under repurchase agreements, commercial
paper and other short-term borrowings.
GENERAL INDENTURE PROVISIONS THAT APPLY TO SENIOR AND SUBORDINATED DEBT
SECURITIES
- Each indenture allows us to issue different types of debt securities,
including indexed securities.
- Neither indenture limits the amount of debt that we may issue or provides you
with any protection should there be a highly leveraged transaction,
recapitalization or restructuring involving Chase.
- The indentures allow us to merge or consolidate with another company, or to
sell all or substantially all of our assets to another company. If these
events occur, the other company will be required to assume our
responsibilities relating to the debt securities, and we will be released from
all liabilities and obligations.
- The indentures provide that holders of a majority of the total principal
amount of outstanding debt securities of any series may vote to change certain
of our obligations or certain of your rights concerning the debt securities of
that series. However, to change the amount or timing of principal, interest or
other payments under the debt securities of a series, every holder in the
series must consent.
- If an event of default (as described below) occurs with respect to any series
of debt securities, the trustee or holders of 25% of the outstanding principal
amount of that series may declare the principal amount of the series
immediately payable. However, holders of a majority of the principal amount
may rescind this action.
GENERAL INDENTURE PROVISIONS THAT APPLY ONLY TO SENIOR DEBT SECURITIES
We have agreed in the indenture relating to the senior debt securities that we
and our subsidiaries will not sell voting stock of The Chase Manhattan Bank, and
that The Chase Manhattan Bank will not issue its voting stock, unless the sale
or issuance is for fair market value and we and our subsidiaries would own at
least 80% of the voting stock of The Chase Manhattan Bank following the sale or
issuance. This covenant would not prevent us from completing a merger,
consolidation or sale of substantially all of our assets. In addition, this
covenant would not prevent the merger or consolidation of The Chase Manhattan
Bank into another domestic bank if Chase and its subsidiaries would own at least
80% of the voting stock of the successor entity after the merger or
consolidation.
If we satisfy certain conditions in the indenture relating to the senior debt
securities, we may discharge that indenture at any time by depositing with the
trustee sufficient funds or government obligations to pay the senior debt
securities when due.
Events of Default. The indenture relating to the senior debt securities
provides that the following are events of default:
- Interest is not paid for 30 days after due date.
- Principal or premium is not paid when due.
- Sinking fund payment is not paid for 5 days after due date.
- Any other covenant breach continues for 60 days after notice.
- Principal payment default on Chase debt (including senior debt securities of
other series) having an aggregate principal amount of more than $25,000,000 is
not rescinded within 30 days after notice.
- Acceleration of more than $25,000,000 aggregate principal amount of Chase debt
(including senior debt securities of other series) is not rescinded within 30
days after notice.
- Occurrence of certain bankruptcy or insolvency events.
- Occurrence of any other event of default specified in the prospectus
supplement.
3
<PAGE> 9
GENERAL INDENTURE PROVISIONS THAT APPLY ONLY TO SUBORDINATED DEBT SECURITIES
The subordinated debt securities will be subordinated to all "Senior
Indebtedness", which includes all indebtedness for money borrowed by us, except
indebtedness that is stated to be not superior to, or to have the same rank as,
the subordinated debt securities. At September 30, 1999, approximately $13.5
billion of Senior Indebtedness was outstanding.
In an insolvency of or similar event relating to Chase, creditors holding
"Additional Senior Obligations" would also be entitled to full payment before we
could distribute any amounts to holders of the subordinated debt securities.
Additional Senior Obligations include indebtedness for claims under derivative
products, including interest, and foreign exchange and commodity contracts, but
exclude claims under Senior Indebtedness or claims under subordinated
obligations. At September 30, 1999, approximately $0.5 billion of Additional
Senior Obligations were outstanding.
Events of Default. The indenture relating to the subordinated debt securities
provides that the following are events of default:
- Occurrence of certain bankruptcy or insolvency events.
- Occurrence of any other event of default specified in the prospectus
supplement.
PREFERRED STOCK AND DEPOSITARY SHARES
We may issue our preferred stock, par value $1 per share, in one or more series.
We will determine the dividend, voting, conversion and other rights of the
series being offered, and the terms and conditions relating to the offering and
sale of the series, at the time of the offer and sale. We may also issue
fractional shares of preferred stock that will be represented by depositary
shares and depositary receipts.
COMMON STOCK
We may issue our common stock, par value $1 per share. Subject to the rights of
holders of our preferred stock, holders of our common stock are entitled to
receive dividends when declared by our board of directors (which may also refer
to a board committee or officer acting on authority delegated by our board of
directors). Each holder of common stock is entitled to one vote per share. The
holders of common stock have no preemptive rights or cumulative voting rights.
WARRANTS
We may issue warrants for the purchase of debt securities, preferred stock or
common stock ("securities warrants"). We may also issue warrants for the cash
value in U.S. dollars of the right to purchase or sell foreign or composite
currencies ("currency warrants"). We may issue warrants independently or
together with other securities.
4
<PAGE> 10
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDEND REQUIREMENTS
Our consolidated ratios of earnings to fixed charges and our consolidated ratios
of earnings to combined fixed charges and preferred stock dividend requirements
are as follows:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------- ------------------------------------
1999 1998 1997 1996 1995 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Earnings to Fixed Charges:
Excluding Interest on Deposits............ 2.56 1.84 1.82 1.66 1.90 1.86
Including Interest on Deposits............ 1.67 1.43 1.43 1.32 1.41 1.42
Earnings to Combined Fixed Charges and
Preferred Stock Dividend Requirements:
Excluding Interest on Deposits............ 2.52 1.82 1.77 1.60 1.82 1.76
Including Interest on Deposits............ 1.66 1.42 1.41 1.30 1.38 1.38
</TABLE>
For purposes of computing the above ratios, 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.
WHERE YOU CAN FIND MORE INFORMATION
ABOUT CHASE
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
at the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" into this prospectus the
information in documents we file with it, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be a part of this
prospectus, and later information that we file with the SEC will update and
supersede this information. We incorporate by reference the documents listed
below and any future filings we make with the SEC under Section 13(a), 13(c),
14, or 15(d) of the Securities Exchange Act of 1934 until our offering is
completed:
(a) Annual Report on Form 10-K for the year ended December 31, 1998;
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31,
1999, June 30, 1999 and September 30, 1999;
(c) Current Reports on Form 8-K filed on January 22, 1999, March 17,
1999, March 24, 1999, April 21, 1999, May 26, 1999, June 3, 1999, July 14,
1999, July 22, 1999, September 29, 1999, October 21, 1999, November 2,
1999, January 21, 2000 and February 9, 2000; and
(d) The descriptions of our common stock and preferred stock contained
in our registration statements filed under Section 12 of the Securities
Exchange Act of 1934.
You may request a copy of these filings, at no cost, by writing to or
telephoning us at the following address:
Office of the Secretary
The Chase Manhattan Corporation
270 Park Avenue
New York, NY 10017
212-270-4040
YOU SHOULD RELY ONLY ON THE INFORMATION PROVIDED OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT. WE HAVE NOT AUTHORIZED ANYONE TO
PROVIDE YOU WITH ANY OTHER INFORMATION. WE ARE NOT MAKING AN OFFER OF SECURITIES
IN ANY STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE
INFORMATION IN THIS PROSPECTUS, THE PROSPECTUS SUPPLEMENT OR ANY DOCUMENT
INCORPORATED BY REFERENCE IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE
FRONT OF THE APPLICABLE DOCUMENT.
5
<PAGE> 11
THE CHASE MANHATTAN CORPORATION
GENERAL
Chase is a bank holding company registered under the Bank Holding Company Act of
1956. We were organized as a Delaware corporation in 1968. As of September 30,
1999, we were one of the largest banking institutions in the United States, with
$371 billion in assets and $22 billion in stockholders' equity.
Through our subsidiaries, we conduct domestic and international financial
services businesses. Our principal bank subsidiaries are The Chase Manhattan
Bank, a New York banking corporation (the "Bank"), and Chase Manhattan Bank USA,
National Association, headquartered in Delaware ("Chase USA"). Our principal
non-bank subsidiary is Chase Securities Inc. ("CSI"), which is engaged in
securities underwriting and dealing.
BUSINESS
Our activities are internally organized, for operating purposes, into three
major business franchises. A brief description of these business franchises is
presented below.
Global Bank
Global Bank combines the strengths of a leading commercial bank and a leading
investment bank to meet the needs of customers around the world. Our Global Bank
businesses included, as of September 30, 1999:
- Global Markets, which conducts trading and sales of foreign exchange and
derivatives contracts and fixed income securities, and which also includes our
domestic and international treasury units, which manage interest rate
exposures and securities portfolios;
- Chase Capital Partners, which provides equity and mezzanine financing in the
United States and, to a lesser extent, abroad and which invests in equity
funds and manages high-yield funds;
- Global Investment Banking, which advises and provides integrated financial
solutions to corporations, financial institutions, governments, financial
sponsors and entrepreneurs worldwide;
- Corporate Lending and Portfolio Management, which provides credit and lending
services to clients globally utilizing a strategy that emphasizes origination
for distribution and active portfolio management; and
- Global Private Bank, which serves a global base of high net worth individuals
and families.
National Consumer Services
National Consumer Services serves consumers, middle market customers and small
business across the United States through an array of channels. Our National
Consumer Services businesses included, as of September 30, 1999:
- Chase Cardmember Services, which includes the fourth-largest bank credit card
issuer in the U.S. as of September 30, 1999, as well as Chase's international
consumer business;
- Regional Consumer Banking, which has a leading share of primary banking
relationships among consumers and small businesses in the New York
metropolitan tri-state area and is a leading retail institution in key Texas
markets;
- Chase Home Finance, which as of September 30, 1999 was the largest originator
and servicer of residential mortgage loans in the U.S. and a leading provider
of home equity and manufactured housing financing;
- Diversified Consumer Services, which as of September 30, 1999 was one of the
largest bank originators of auto loans and leases in the U.S. and a leading
provider of student loans, and which provides brokerage services and
investment products and distributes bank insurance in the U.S.; and
- Middle Market Clients, which provides financial services to companies with
annual sales ranging from $3 million to $500 million.
Global Services
Global Services is a leading provider of information and transaction services
globally and includes custody, cash management, trust and other fiduciary
services. At September 30, 1999, Global Services included:
- Global Investor Services, which provides custody and other investor services
to mutual funds, investment managers, pension funds, insurance companies and
banks globally;
- Chase Treasury Solutions, which provides treasury, cash management,
multicurrency payment,
6
<PAGE> 12
trade finance, liquidity information and web-enabled solutions to customers
around the world and is a market leader in FedWire, ACH and CHIPS volume; and
- Capital Markets Fiduciary Services, which is a leader worldwide in delivering
a broad range of securities processing, trustee and agency and support
services.
Corporate and Support Units
In addition to our three major business franchises, Chase has corporate and
support units that include:
- Chase.com, which manages Chase's new internet-related ventures and works with
our business units to capitalize on internet opportunities;
- Chase Business Services, which is Chase's internal service provider; and
- Technology Solutions, which provides support for Chase's e-commerce and
technology infrastructure.
USE OF PROCEEDS
Unless otherwise specified in the applicable prospectus supplement, we will use
the net proceeds we receive from the sale of the securities offered by this
prospectus and the accompanying prospectus supplement for general corporate
purposes. General corporate purposes may include the repayment of debt,
investments in or extensions of credit to our subsidiaries, redemption of
preferred stock, or the financing of possible acquisitions or business
expansion. We may invest the net proceeds temporarily or apply them to repay
short-term debt until we are ready to use them for their stated purpose.
DESCRIPTION OF DEBT SECURITIES
GENERAL
We have described below certain general terms that may apply to the debt
securities. We will describe the particular terms of any debt securities we
offer to you in the prospectus supplement relating to those debt securities.
The debt securities will be either senior debt securities or subordinated debt
securities. We will issue the senior debt securities under a senior indenture
between us and Bankers Trust Company, as trustee. We will issue the subordinated
debt securities under a subordinated indenture between us and U.S. Bank Trust
National Association, as trustee.
The following summary of certain provisions of the indentures with respect to
the senior debt securities and the subordinated debt securities is not complete.
You should refer to the indentures, copies of which are exhibits to the
registration statement. Section references below are to the sections in the
applicable indenture.
Neither indenture limits the amount of debt securities that we may issue. Each
indenture provides that we may issue debt securities up to the principal amount
we authorize from time to time. The senior debt securities will be unsecured and
will have the same rank as all of our other unsecured and unsubordinated debt.
The subordinated debt securities will be unsecured and will be subordinated and
junior to all Senior Indebtedness (as defined below under "Subordinated Debt
Securities -- Subordination"). In addition, under certain circumstances relating
to our dissolution, winding-up, liquidation or reorganization, the subordinated
debt securities will be junior to all Additional Senior Obligations (as defined
and to the extent set forth below under "Subordinated Debt
Securities -- Subordination").
We are a holding company that conducts substantially all of our operations
through subsidiaries. As a result, claims of the holders of the debt securities
will generally have a junior position to claims of creditors of our
subsidiaries, except to the extent that Chase may be recognized, and receives
payment, as a creditor of those subsidiaries. Claims of creditors of our
subsidiaries other than Chase include substantial amounts of long-term debt,
deposit liabilities, federal funds purchased, securities sold under repurchase
agreements, commercial paper and other short-term borrowings.
We may issue the debt securities in one or more separate series of senior debt
securities and/or subordinated debt securities. We will specify in
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the prospectus supplement relating to a particular series of debt securities
being offered the particular amounts, prices and terms of those debt securities.
These terms may include:
- the title and type of the debt securities;
- any limit on the aggregate principal amount or aggregate initial offering
price of the debt securities;
- the purchase price of the debt securities;
- the dates on which the principal of the debt securities will be payable and
the amount payable upon acceleration;
- the interest rates of the debt securities, including the interest rates, if
any, applicable to overdue payments, or the method for determining those
rates, and the interest payment dates for the debt securities;
- the places where payments may be made on the debt securities;
- any mandatory or optional redemption provisions applicable to the debt
securities;
- any sinking fund or similar provisions applicable to the debt securities;
- the authorized denominations of the debt securities, if other than $1,000 and
integral multiples of $1,000;
- if denominated in a currency other than U.S. dollars, the currency or
currencies, including the euro or other composite currencies, in which
payments on the debt securities will be payable (which currencies may be
different for principal, premium and interest payments);
- any conversion or exchange provisions applicable to the debt securities;
- any events of default applicable to the debt securities (if not described in
this prospectus); and
- any other specific terms of the debt securities.
We may issue some of the debt securities as original issue discount debt
securities. Original issue discount debt securities bear no interest or bear
interest at below-market rates and will be sold at a discount below their stated
principal amount. The prospectus supplement will contain any special tax,
accounting or other information relating to original issue discount debt
securities. If we offer other kinds of debt securities, including debt
securities linked to an index or payable in currencies other than U.S. dollars,
the prospectus supplement relating to those debt securities will also contain
any special tax, accounting or other information relating to those debt
securities.
We will issue the debt securities only in registered form without coupons. The
indentures permit us to issue debt securities of a series in definitive,
certificated form or in permanent global form. You will not be required to pay a
service charge for any transfer or exchange of debt securities, but we may
require payment of any taxes or other governmental charges.
Unless otherwise specified in the prospectus supplement, we will pay principal
of, and premium, if any, and interest, if any, on the debt securities at the
corporate trust office of the Bank in New York City. You may also make transfers
or exchanges of debt securities at that location. We also have the right to pay
interest on any debt securities by check mailed to the registered holders of the
debt securities at their registered addresses. In connection with any payment on
a debt security, we may require the holder to certify information to Chase. In
the absence of that certification, we may rely on any legal presumption to
enable us to determine our responsibilities, if any, to deduct or withhold
taxes, assessments or governmental charges from the payment.
Neither indenture limits our ability to enter into a highly leveraged
transaction or provides you with any special protection in the event of such a
transaction. In addition, neither indenture provides special protection in the
event of a sudden and dramatic decline in our credit quality resulting from a
takeover, recapitalization or similar restructuring of Chase.
We may issue debt securities upon the exercise of warrants issued with other
debt securities or upon exchange or conversion of exchangeable or convertible
debt securities. The prospectus supplement will describe the specific terms of
any of those warrants or exchangeable or convertible securities. It will also
describe the specific terms of the debt securities issuable upon the exercise,
exchange or conversion of those securities. See "Description of Securities
Warrants" below.
SENIOR DEBT SECURITIES
The senior debt securities will be direct, unsecured general obligations of
Chase, will constitute Senior Indebtedness of Chase, and will have the same rank
as our other Senior Indebtedness. For a definition of "Senior Indebtedness" see
"-- Subordinated Debt Securities -- Subordination" below.
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Limitation on Disposition of Stock of the Bank. The senior indenture contains a
covenant by us that, so long as any of the senior debt securities are
outstanding, neither we nor any Intermediate Subsidiary (as defined below) will
dispose of any shares of voting stock of the Bank, or any securities convertible
into, or options, warrants or rights to purchase shares of voting stock of the
Bank, except to Chase or an Intermediate Subsidiary. In addition, the covenant
provides that neither we nor any Intermediate Subsidiary will permit the Bank to
issue any shares of its voting stock, or securities convertible into, or
options, warrants or rights to purchase shares of its voting stock, nor will we
permit any Intermediate Subsidiary to cease to be an Intermediate Subsidiary.
The above covenant is subject to our rights in connection with a consolidation
or merger of Chase with or into another person or a sale of our assets. The
covenant also will not apply if (1) the disposition of voting stock of the Bank,
or any securities convertible into, or options, warrants or rights to purchase
shares of voting stock of the Bank, is made for fair market value, as determined
by the board of directors of Chase or the Intermediate Subsidiary, and (2) after
giving effect to the transaction, we and any one or more of our 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. The covenant also does not restrict the Bank from being
consolidated with or merged into another domestic banking corporation if, after
the merger or consolidation, (A) Chase, or its successor, and any one or more
Intermediate Subsidiaries own at least 80% of the voting stock of the resulting
bank and (B) 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.
The senior indenture defines an Intermediate Subsidiary as a subsidiary (1) that
is organized under the laws of any domestic jurisdiction and (2) of which all
the shares of capital stock, and all securities convertible into, and options,
warrants and rights to purchase, shares of capital stock, are owned directly by
Chase, free and clear of any security interest. As used above, "voting stock"
means a class of stock having general voting power under ordinary circumstances,
irrespective of the happening of a contingency. The above covenant would not
prevent the Bank from engaging in a sale of assets to the extent otherwise
permitted by the senior indenture. (Section 1006).
Events of Default. The senior indenture defines an event of default with
respect to any series of senior debt securities as any one of the following
events:
(1) default in the payment of interest on any senior debt security of
that series and continuance of that default for 30 days;
(2) default in the payment of principal of, or premium, if any, on,
any senior debt security of that series at maturity;
(3) default in the deposit of any sinking fund payment and continuance
of that default for 5 days;
(4) failure by Chase for 60 days after notice to perform any of the
other covenants or warranties in the senior indenture applicable to that
series;
(5)(A) failure by Chase to pay indebtedness for money borrowed by
Chase, including senior debt securities of other series, in an aggregate
principal amount exceeding $25,000,000, at the later of final maturity or
the expiration of any applicable grace period or (B) acceleration of the
maturity of indebtedness for money borrowed by Chase, including senior debt
securities of other series, in an aggregate principal amount exceeding
$25,000,000, if that failure to pay or acceleration results from a default
under the instrument giving rise to or securing the indebtedness for money
borrowed by Chase and is not rescinded or annulled within 30 days after due
notice, unless the default is contested in good faith by appropriate
proceedings;
(6) certain events of bankruptcy, insolvency or reorganization of
Chase or the Bank; and
(7) any other event of default specified with respect to senior debt
securities of that series. (Section 501).
If any event of default with respect to senior debt securities of any series
occurs and is continuing, either the trustee or the holders of not less than 25%
in principal amount of the outstanding senior
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debt securities of that series may declare the principal amount (or, if the
senior debt securities of that series are original issue discount senior debt
securities, a specified portion of the principal amount) of all senior debt
securities of that series to be due and payable immediately. No such declaration
is required upon certain events of bankruptcy. Subject to certain conditions,
the holders of a majority in principal amount of the outstanding senior debt
securities of that series may annul the declaration and waive past defaults,
except uncured payment defaults and certain other specified defaults. (Sections
502 and 513).
We will describe in the prospectus supplement any particular provisions relating
to the acceleration of the maturity of a portion of the principal amount of
original issue discount senior debt securities upon an event of default.
The senior indenture requires the trustee, within 90 days after the occurrence
of a default known to it with respect to any outstanding series of senior debt
securities, to give the holders of that series notice of the default if uncured
or not waived. The trustee may withhold this notice if it determines in good
faith that the withholding of this notice is in the interest of those holders.
However, the trustee may not withhold this notice in the case of a payment
default. The trustee may not give the above notice until 60 days after the
occurrence of a default in the performance of a covenant in the senior indenture
other than a covenant to make payment. The term "default" for the purpose of
this provision means any event that is, or after notice or lapse of time or both
would become, an event of default with respect to senior debt securities of that
series. (Section 602).
Other than the duty to act with the required standard of care during a default,
the trustee is not obligated to exercise any of its rights or powers under the
senior indenture at the request or direction of any of the holders of senior
debt securities, unless the holders have offered to the trustee reasonable
security or indemnity. (Section 603). The senior indenture provides that the
holders of a majority in principal amount of outstanding senior debt securities
of any series may direct the time, method and place of conducting any proceeding
for any remedy available to the trustee, or exercising any trust or other power
conferred on the trustee. However, the trustee may decline to act if the
direction is contrary to law or the senior indenture. (Section 512).
The senior indenture includes a covenant requiring us to file annually with the
trustee a certificate of no default, or specifying any default that exists.
(Section 1007).
Defeasance and Covenant Defeasance. The senior indenture contains a provision
that, if made applicable to any series of senior debt securities, permits us to
elect:
- defeasance, which would discharge us from all of our obligations (subject to
limited exceptions) with respect to any senior debt securities of that series
then outstanding, and/or
- covenant defeasance, which would release us from our obligations under certain
covenants and from the consequences of an event of default resulting from a
breach of those covenants or a cross-default.
To make either of the above elections, we must deposit in trust with the trustee
money and/or U.S. Government Obligations (as defined below) which through the
payment of principal and interest in accordance with their terms will provide
sufficient money, without reinvestment, to repay in full those senior debt
securities. As used in the senior indenture, U.S. Government Obligations are (A)
direct obligations of the United States or of an agency or instrumentality of
the United States, in either case that is or is guaranteed as a full faith and
credit obligation of the United States and that is not redeemable by the issuer
and (B) certain depository receipts with respect to an obligation referred to in
clause (A).
As a condition to defeasance or covenant defeasance, we must deliver to the
trustee an opinion of counsel that the holders of the senior debt securities
will not recognize income, gain or loss for Federal income tax purposes as a
result of the defeasance or covenant defeasance and will be subject to Federal
income tax on the same amount, in the same manner and at the same times as would
have been the case if defeasance or covenant defeasance had not occurred. That
opinion, in the case of defeasance, but not covenant defeasance, must refer to
and be based upon a ruling received by us from the Internal Revenue Service or
published as a revenue ruling or upon a change in applicable Federal income tax
law.
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If we exercise our covenant defeasance option with respect to a particular
series of senior debt securities, then even if there were a default under the
related covenant, payment of those senior debt securities could not be
accelerated. We may exercise our defeasance option with respect to a particular
series of senior debt securities even if we previously had exercised our
covenant defeasance option. If we exercise our defeasance option, payment of
those senior debt securities may not be accelerated because of any event of
default. If we exercise our 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 those senior debt securities. This is because the
required deposit of money and/or U.S. Government Obligations 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 Senior Indenture. We and the trustee may modify the senior
indenture with the consent of the holders of not less than a majority in
principal amount of each series of outstanding senior debt securities affected
by the modification. However, without the consent of each affected holder, no
such modification may:
- change the stated maturity of any senior debt security;
- reduce the principal amount of, or premium, if any, on, any senior debt
security;
- reduce the rate of payment of interest on any senior debt security or change
certain other provisions relating to the yield of the senior debt securities;
- change the currency or currencies in which any senior debt security is
payable;
- reduce the percentage of holders of outstanding senior debt securities of any
series required to consent to any modification, amendment or waiver under the
senior indenture; or
- change the provisions in the senior indenture that relate to its modification
or amendment. (Section 902).
We and the trustee may amend the senior indenture in certain circumstances
without the consent of the holders of senior debt securities in the event we
merge with another person, to replace the trustee, to effect modifications that
do not affect any outstanding series of senior debt securities, and for certain
other purposes.
Consolidation, Merger and Sale of Assets. We may, without the consent of the
holders of any senior debt securities, consolidate or merge with any other
person or transfer or lease all or substantially all of our assets to another
person or permit another corporation to merge into Chase, provided that:
(1) the successor is a person organized under U.S. law;
(2) the successor person, if not Chase, assumes our obligations on the
senior debt securities and under the senior indenture;
(3) 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
(4) certain other conditions are met. (Section 801).
SUBORDINATED DEBT SECURITIES
The subordinated debt securities will be direct, unsecured general obligations
of Chase. The subordinated debt securities will be subordinate and junior in
right of payment to all Senior Indebtedness and, in certain circumstances
described below relating to our dissolution, winding-up, liquidation or
reorganization, to all Additional Senior Obligations. The subordinated indenture
does not limit the amount of debt, including Senior Indebtedness, or Additional
Senior Obligations we may incur. As of September 30, 1999, Senior Indebtedness
and Additional Senior Obligations totaled approximately $14.0 billion.
Unless otherwise specified in the prospectus supplement, the maturity of the
subordinated debt securities will be subject to acceleration only upon our
bankruptcy or reorganization. See "Defaults and Waivers" below.
The holders of subordinated debt securities of a series that is specified to be
convertible into our common stock will be entitled at certain times specified in
the prospectus supplement to convert those convertible subordinated debt
securities into common stock, at the conversion price set forth in the
prospectus supplement.
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The holders of subordinated debt securities of any series may be obligated at
maturity, or at any earlier time specified in the prospectus supplement, to
exchange that series of subordinated debt securities for Capital Securities.
Capital Securities may consist of our common stock, perpetual preferred stock or
other capital securities of Chase acceptable to our primary Federal banking
regulator, which currently is the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"). The terms of any such exchange and of the
Capital Securities that will be issued upon the exchange will be described in
the prospectus supplement. (Article Seventeen). Whenever subordinated debt
securities are exchangeable for Capital Securities, we will be obligated to
deliver Capital Securities with a market value equal to the principal amount of
those subordinated debt securities. In addition, we will unconditionally
undertake, at our expense, to sell the Capital Securities in a secondary
offering on behalf of any holders who elect to receive cash for the Capital
Securities.
Subordination. The subordinated debt securities will be subordinate in right of
payment to all Senior Indebtedness and, under certain circumstances described
below, to all Additional Senior Obligations.
The subordinated indenture defines "Senior Indebtedness" to mean the principal
of, and premium, if any, and interest on all indebtedness for money borrowed by
us, whether outstanding on the date the subordinated indenture became effective
or created, assumed or incurred after that date (including all indebtedness for
money borrowed by another person that we guarantee), except indebtedness that is
stated to be not superior to or to have the same rank as the subordinated debt
securities. Senior Indebtedness does not include (A) Antecedent Company
Subordinated Indebtedness (as defined below), (B) subordinated debt securities
issued under the subordinated indenture on or after December 15, 1992, (C)
Assumed Heritage Chase Subordinated Indebtedness (as defined below) and (D)
other debt of Chase that is expressly stated to have the same rank as the
subordinated debt securities or to rank not senior to the subordinated debt
securities (that other debt is referred to as "Other Subordinated
Indebtedness").
The subordinated indenture defines "Additional Senior Obligations" to mean all
indebtedness of Chase for claims in respect of derivative products, such as
interest and foreign exchange rate contracts, commodity contracts and similar
arrangements, except Senior Indebtedness and except obligations that are
expressly stated to have the same rank as or to rank not senior to the
subordinated debt securities.
Antecedent Company Subordinated Indebtedness means all outstanding subordinated
indebtedness of Chase issued prior to December 15, 1992, other than Assumed
Heritage Chase Subordinated Indebtedness. At September 30, 1999, we had
approximately $600 million of Antecedent Company Subordinated Indebtedness
outstanding.
At September 30, 1999, we had approximately $3.8 billion of subordinated debt
securities issued and outstanding under the subordinated indenture, excluding
Antecedent Company Subordinated Indebtedness.
Assumed Heritage Chase Subordinated Indebtedness means all outstanding
subordinated indebtedness of Chase that we assumed as a result of the merger of
The Chase Manhattan Corporation into Chase. At September 30, 1999, we had
approximately $2.5 billion of Assumed Heritage Chase Subordinated Indebtedness
outstanding.
At September 30, 1999, we had approximately $386 million of Other Subordinated
Indebtedness outstanding that ranked equally with the subordinated debt
securities.
Under the subordinated indenture, we may not make any payment on the
subordinated debt securities or exchange any subordinated debt securities for
Capital Securities in the event:
- we have failed to make full payment of all amounts of principal, and premium,
if any, and interest, if any, due on all Senior Indebtedness; or
- there shall exist any event of default on any Senior Indebtedness or any event
which, with notice or lapse of time or both, would become such an event of
default.
In addition, upon our dissolution, winding-up, liquidation or reorganization:
(1) we must pay to the holders of Senior Indebtedness the full amounts of
principal of, and premium, if any, and interest, if any, on that Senior
Indebtedness before
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any payment or distribution is made on the subordinated debt securities, and (2)
if, after we have made those payments on the Senior Indebtedness, (A) there are
amounts available for payment on the subordinated debt securities and (B)
creditors in respect of Additional Senior Obligations have not received their
full payments, then we will first use amounts available for payment on the
subordinated debt securities to pay in full all Additional Senior Obligations
before we may make any payment on the subordinated debt securities.
No series of our subordinated debt described above is subordinated to any other
series of that subordinated debt. However, Antecedent Company Subordinated
Indebtedness is subordinated only to Senior Indebtedness; Subordinated
Securities and Other Subordinated Indebtedness are subordinated to Senior
Indebtedness and, in certain circumstances relating to our dissolution,
winding-up, liquidation or reorganization, to Additional Senior Obligations; and
Assumed Heritage Chase Subordinated Indebtedness is subordinated to Senior
Indebtedness, Additional Senior Obligations and all of our other obligations to
our creditors, except any obligation that is expressly stated to have the same
rank as, or to rank junior to, the Assumed Heritage Chase Subordinated
Indebtedness. As a result of the differences between the subordination
provisions applicable to the subordinated debt securities, the Antecedent
Company Subordinated Indebtedness, the Other Subordinated Indebtedness and the
Assumed Heritage Chase Subordinated Indebtedness, in the event of our
dissolution, winding-up, liquidation or reorganization, the holders of
subordinated debt securities and Other Subordinated Indebtedness may receive
less, proportionately, than the holders of Antecedent Company Subordinated
Indebtedness, but more, proportionately, than the holders of Assumed Heritage
Chase Subordinated Indebtedness.
Limitation on Disposition of Voting Stock of the Bank. Except as noted below,
the subordinated indenture does not contain a covenant prohibiting us from
selling or otherwise disposing of any shares of voting stock of the Bank, or
securities convertible into, or options, warrants or rights to purchase shares
of voting stock of the Bank. The subordinated indenture also does not prohibit
the Bank from issuing any shares of its voting stock or securities convertible
into, or options, warrants or rights to purchase shares of its voting stock.
However, the subordinated indenture does contain a covenant, which is for the
exclusive benefit of holders of the Antecedent Company Subordinated Indebtedness
and which is subject to the provisions described below under "Consolidation,
Merger and Sale of Assets", that we will not sell or otherwise dispose of any
shares of voting stock of the Bank, or securities convertible into, or options,
warrants or rights to purchase shares of voting stock of the Bank, nor will we
permit the Bank to issue any shares of its voting stock, or securities
convertible into, or options, warrants or rights to purchase shares of its
voting stock. However, that covenant does not prohibit:
- issuances or sales of directors' qualifying shares;
- issuances or sales of shares to us;
- sales or other dispositions or issuances for fair market value, as determined
by our board of directors, so long as we would continue to own directly or
indirectly not less than 80% of the issued and outstanding shares of the
voting stock of the Bank;
- sales or other dispositions or issuances made in compliance with an order or
direction of a court or regulatory authority of competent jurisdiction; and
- sales of voting stock by the Bank to its shareholders if those sales do not
reduce the percentage of shares of voting stock owned by us. (Section 5.07).
Defaults and Waivers. The subordinated indenture defines an event of default
with respect to any series of subordinated debt securities as:
- any one of certain events of bankruptcy or reorganization affecting Chase; or
- any other event of default specified with respect to subordinated debt
securities of that series. (Section 7.01).
If an event of default occurs and is continuing with respect to any outstanding
series of subordinated debt securities, the trustee or the holders of at least
25% in aggregate principal amount of that outstanding series of subordinated
debt securities may declare the principal (or, in the case of original issue
discount subordinated debt securities, a specified amount of principal) of all
subordinated debt securities of that series to be due and payable immediately in
cash. Subject to certain conditions, the holders of not less than a
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majority in aggregate principal amount of the subordinated debt securities of
that series may annul any such declaration and waive certain past defaults.
(Section 7.01). The right of the holders of subordinated debt securities of a
series to demand payment in cash upon the occurrence and continuance of an event
of default will continue to exist so long as the subordinated debt securities of
that series have not been exchanged or converted. In the event of the bankruptcy
or reorganization of Chase, any such right to enforce that payment in cash would
be subject to the broad equity powers of a Federal bankruptcy court and to its
determination of the nature and status of the payment claims of the holders of
the subordinated debt securities. Prior to any declaration of acceleration, the
holders of a majority in aggregate principal amount of the applicable series of
subordinated debt securities may waive any past default or event of default,
except a payment default. (Section 7.07).
Unless otherwise provided in the terms of a series of subordinated debt
securities, there will be no right of acceleration of the payment of principal
of the subordinated debt securities of that series upon a default in the payment
of principal or interest or a default in the performance of any covenant or
agreement in the subordinated debt securities or the subordinated indenture. In
the event of a default in the payment of interest or principal, including a
default in the delivery of any Capital Securities in exchange for subordinated
debt securities, or in the performance of any covenant or agreement in the
subordinated debt securities or the subordinated indenture, the trustee may,
subject to certain limitations and conditions, seek to enforce that payment or
delivery or the performance of that covenant or agreement.
The subordinated indenture requires the trustee, within 90 days after the
occurrence of a default with respect to the subordinated debt securities of any
series, to give the holders 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). However, except in certain cases involving the
bankruptcy or reorganization of Chase, a payment default or a default in the
obligation to deliver Capital Securities in exchange for subordinated debt
securities, the trustee may withhold the notice if it determines in good faith
that the withholding of the notice is in the interest of those holders. (Section
7.08). We are required to furnish to the trustee annually an officers'
certificate as to the absence of defaults under the subordinated indenture.
(Section 5.06).
Other than the duties of the trustee to act with the required standard of care
during a default, the trustee is not obligated to exercise any of its rights or
powers under the subordinated indenture at the request or direction of any of
the holders of the subordinated debt securities, unless those holders shall have
offered to the trustee reasonable security or indemnity. Subject to that
provision for security or indemnification, the holders of a majority in
principal amount of the subordinated debt securities of any series then
outstanding 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 trustee with respect to the subordinated debt
securities of that series. (Sections 7.07 and 8.02).
Modification of the Subordinated Indenture. The subordinated indenture contains
provisions permitting us and the trustee to modify the subordinated indenture or
the rights of the holders of the subordinated debt securities with the consent
of the holders of not less than a majority in principal amount of each
outstanding series of the subordinated debt securities affected by the
modification. However, no such modification may, without the consent of each
holder of subordinated debt securities affected by the modification:
- change the stated maturity date of the principal of, or any installment of
principal of or interest on, any subordinated debt security;
- reduce the principal amount of, or premium, if any, or interest, if any, on
any subordinated debt security;
- reduce the portion of the principal amount of an original issue discount
subordinated debt security payable upon acceleration of the maturity of that
subordinated debt security;
- reduce any amount payable upon redemption of any subordinated debt security;
- change the place or places where, or the currency in which, any subordinated
debt security or any premium or interest is payable;
- change the definition of market value;
- impair the right of any holders of subordinated debt securities of any series
to receive on any
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exchange date for subordinated debt securities of that series Capital
Securities with a market value equal to that required by the terms of the
subordinated debt securities;
- impair the conversion rights, if any, of any holders;
- impair the right of a holder to institute suit for the enforcement of any
payment on or with respect to any subordinated debt security, including any
right of redemption at the option of the holder of that subordinated debt
security, or impair any rights to the delivery of Capital Securities in
exchange for any subordinated debt security or to require Chase to sell
Capital Securities in a secondary offering or to require the delivery of
common stock, debt securities or other property upon conversion of
subordinated debt securities;
- reduce the above-stated percentage of subordinated debt securities of any
series the consent of the holders of which is necessary to modify or amend the
subordinated indenture, or reduce the percentage of subordinated debt
securities of any series the holders of which are required to waive any past
default or event of default; or
- modify the foregoing requirements. (Section 11.02).
The subordinated indenture permits us and the trustee to amend the subordinated
indenture in certain circumstances without the consent of the holders of
subordinated debt securities in the event of the merger of Chase, the
replacement of the trustee, to effect modifications that do not affect any
outstanding series of subordinated debt securities and for certain other
purposes. (Section 11.01).
Consolidation, Merger and Sale of Assets. We may not merge or consolidate with
any other corporation or sell or convey all or substantially all of our assets
as an entirety to any other corporation, unless (1) we are the continuing
corporation or the successor corporation expressly assumes the payment of the
principal of (including issuance and delivery of Capital Securities) and
premium, if any, and interest, if any, on the subordinated debt securities and
the performance and observance of all the covenants and conditions of the
subordinated indenture binding upon us, and (2) we or the successor corporation
shall not, immediately after merger, consolidation, sale or conveyance, be in
default in the performance of any such covenant or condition. (Article Twelve).
PERMANENT GLOBAL DEBT SECURITIES
We may issue certain series of the debt securities as permanent global debt
securities and deposit them with a depositary with respect to that series.
Unless otherwise indicated in the prospectus supplement, the following is a
summary of the depository arrangements applicable to debt securities issued in
permanent global form and for which The Depositary Trust Company ("DTC") acts as
depositary (the "global debt securities").
Each global debt security will be deposited with, or on behalf of, DTC, as
depositary, or its nominee and registered in the name of a nominee of DTC.
Except under the limited circumstances described below, global debt securities
are not exchangeable for definitive, certificated debt securities.
Only institutions that have accounts with DTC or its nominee ("participants") or
persons that may hold interests through participants may own beneficial
interests in a global debt security. DTC will maintain records reflecting
ownership of beneficial interests by participants in the global debt securities
and transfers of those interests. Participants will maintain records evidencing
ownership of beneficial interests in the global debt securities by persons that
hold through those participants and transfers of those interests within those
participants. DTC has no knowledge of the actual beneficial owners of the debt
securities. You will not receive written confirmation from DTC of your purchase
of a beneficial interest in a global debt security, but we do expect that you
will receive written confirmations providing details of the transaction, as well
as periodic statements of your holdings, from the participant through which you
entered the transaction. The laws of some jurisdictions require that certain
purchasers of securities take physical delivery of those securities in
definitive, certificated form. Those laws may impair your ability to transfer
beneficial interests in a global debt security.
DTC has advised us that upon the issuance of a global debt security and the
deposit of that global debt security with DTC, DTC will immediately credit, on
its book-entry registration and transfer system, the respective principal
amounts repre-
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<PAGE> 21
sented by that global debt security to the accounts of its participants.
We will make payment of principal of, and interest on, debt securities
represented by a global debt security to DTC or its nominee, as the case may be,
as the registered owner and holder of the global debt security representing
those debt securities. DTC has advised us that upon receipt of any payment of
principal of, or interest on, a global debt security, DTC will immediately
credit accounts of participants with payments in amounts proportionate to their
respective beneficial interests in the principal amount of that global debt
security, as shown in the records of DTC. Standing instructions and customary
practices will govern payments by participants to owners of beneficial interests
in a global debt security held through those participants, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name". Those payments will be the sole responsibility of those
participants, subject to any statutory or regulatory requirements in effect from
time to time.
Neither we, the trustees nor any of our respective agents will be responsible
for any aspect of the records of DTC, any nominee or any participant relating
to, or payments made on account of, beneficial interests in a global debt
security or for maintaining, supervising or reviewing any of the records of DTC,
any nominee or any participant relating to those beneficial interests.
A global debt security is exchangeable for definitive debt securities registered
in the name of a person other than DTC or its nominee only if:
(a) DTC notifies us that it is unwilling or unable to continue as
depositary for that global debt security or DTC ceases to be registered
under the Securities Exchange Act of 1934;
(b) we determine in our discretion that the global debt security will
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 global debt security that is exchangeable as described in the preceding
sentence will be exchangeable in whole for definitive, certificated debt
securities in registered form, of like tenor and of an equal aggregate principal
amount as the global debt security, in denominations specified in the applicable
prospectus supplement (if other than $1,000 and integral multiples of $1,000).
The registrar will register the definitive debt securities in the name or names
instructed by DTC. We expect that these instructions may be based upon
directions received by DTC from its participants with respect to ownership of
beneficial interests in the global debt security. We will make payment of any
principal and interest on the definitive debt securities and will register
transfers and exchanges of those definitive debt securities at the corporate
trust office of the Bank in the Borough of Manhattan, The City of New York.
However, we may elect to pay interest by check mailed to the address of the
person entitled to that interest payment as of the record date, as shown on the
register for the debt securities.
Except as provided above, as an owner of a beneficial interest in a global debt
security, you will not be entitled to receive physical delivery of debt
securities in definitive form and will not be considered the holder of debt
securities for any purpose under the applicable indenture. No global debt
security will be exchangeable except for another global debt security of like
denomination and tenor to be registered in the name of DTC or its nominee.
Accordingly, you must rely on the procedures of DTC and the participant through
which you own your interest to exercise any rights of a holder under the global
debt security or the applicable indenture.
We understand that, under existing industry practices, in the event that we
request any action of holders, or an owner of a beneficial interest in a global
debt security desires to take any action that a holder is entitled to take under
the debt securities or the indentures, DTC would authorize the participants
holding the relevant beneficial interests to take that action, and those
participants would authorize beneficial owners owning through those participants
to take that action or would otherwise act upon the instructions of beneficial
owners owning through them.
DTC has advised us that DTC is a limited purpose trust company organized under
the laws
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<PAGE> 22
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 Securities Exchange Act of 1934. DTC was
created to hold securities of its participants and to facilitate the clearance
and settlement of securities transactions among its participants in those
securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. DTC's participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations. DTC 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. (the "NASD"). Access to DTC'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 DTC and its participants are on file with
the SEC.
If specified in the prospectus supplement, investors may elect to hold interests
in the global debt securities outside the United States through Cedelbank
societe anonyme ("Cedelbank") or Morgan Guaranty Trust Company of New York,
Brussels Office, as operator of the Euroclear System ("Euroclear"), if they are
participants in those systems, or indirectly through organizations that are
participants in those systems. Cedelbank and Euroclear will hold interests on
behalf of their participants through customers' securities accounts in
Cedelbank's and Euroclear's names on the books of their respective depositaries.
Those depositaries in turn hold those interests in customers' securities
accounts in the depositaries' names on the books of DTC. Unless otherwise
specified in the prospectus supplement, The Chase Manhattan Bank will act as
depositary for each of Cedelbank and Euroclear.
Cedelbank has advised us that it is incorporated under the laws of Luxembourg as
a professional depositary. Cedelbank holds securities for its participants and
facilitates the clearance and settlement of securities transactions between
Cedelbank participants through electronic book-entry changes in accounts of
Cedelbank participants, thereby eliminating the need for physical movement of
certificates. Cedelbank provides to Cedelbank participants, among other things,
services for safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and borrowing.
Cedelbank interfaces with domestic markets in several countries. As a
professional depositary, Cedelbank is subject to regulation by the Luxembourg
Monetary Institute. Cedelbank participants are recognized financial institutions
around the world, including underwriters, securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations and may
include the underwriters for a particular offering. Indirect access to Cedelbank
is also available to others, such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Cedelbank
participant, either directly or indirectly.
Distributions with respect to global debt securities held beneficially through
Cedelbank will be credited to cash accounts of Cedelbank participants in
accordance with its rules and procedures, to the extent received by the U.S.
depositary for Cedelbank.
Euroclear has advised us that it was created in 1968 to hold securities for
participants of Euroclear and to clear and settle transactions between Euroclear
participants through simultaneous electronic book-entry delivery against
payment, thereby eliminating the need for physical movement of certificates and
any risk from lack of simultaneous transfers of securities and cash. Euroclear
includes various other services, including securities lending and borrowing, and
interfaces with domestic markets in several countries. Euroclear is operated by
the Brussels, Belgium office of Morgan Guaranty Trust Company of New York (the
"Euroclear Operator"), under contract with Euroclear Clearance Systems S.C., a
Belgian cooperative corporation (the "Cooperative"). The Euroclear Operator
conducts all Euroclear operations, and all Euroclear securities clearance
accounts and Euroclear cash accounts are accounts with the Euroclear Operator,
not the Cooperative. The Cooperative establishes policy for Euroclear on behalf
of Euroclear participants. Euroclear participants include banks (including
central banks), securities brokers and dealers and other professional financial
intermediaries and may
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<PAGE> 23
include the underwriters for a particular offering. Indirect access to Euroclear
is also available to other firms that clear through or maintain a custodial
relationship with a Euroclear participant, either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking corporation
which is a member bank of the Federal Reserve System. As such, it is regulated
and examined by the Federal Reserve Board and the New York State Banking
Department, as well as the Belgian Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator are
governed by the Terms and Conditions Governing Use of Euroclear and the related
Operating Procedures of the Euroclear System and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities and
cash from Euroclear, and receipts of payments with respect to securities in
Euroclear. The Euroclear Operator holds all securities in Euroclear on a
fungible basis without attribution of specific certificates to specific
securities clearance accounts. The Euroclear Operator acts under the Terms and
Conditions only on behalf of Euroclear participants and has no record of or
relationship with persons holding through Euroclear participants.
Distributions with respect to global debt securities held beneficially through
Euroclear will be credited to the cash accounts of Euroclear participants in
accordance with the Terms and Conditions, to the extent received by the U.S.
depositary for Euroclear.
GLOBAL CLEARANCE AND SETTLEMENT PROCEDURES
Unless otherwise specified in the prospectus supplement, initial settlement for
global debt securities will be made in immediately available funds. DTC
participants will conduct secondary market trading with other DTC participants
in the ordinary way in accordance with DTC's rules. Then secondary market trades
will settle in immediately available funds using DTC's same day funds settlement
system.
If the prospectus supplement specifies that interests in the global debt
securities may be held through Cedelbank or Euroclear, Cedelbank and/or
Euroclear participants will conduct secondary market trading with other
Cedelbank and/or Euroclear participants in the ordinary way in accordance with
the applicable rules and operating procedures of Cedelbank and Euroclear. Then
secondary market trades will settle using the procedures applicable to
conventional eurobonds in immediately available funds.
Cross-market transfers between persons holding directly or indirectly through
DTC on the one hand, and directly or indirectly through Cedelbank or Euroclear
participants, on the other, will be effected in DTC in accordance with DTC's
rules on behalf of the relevant European international clearing system by the
U.S. depositary for that system; however, those cross-market transactions will
require delivery by the counterparty in the relevant European international
clearing system of instructions to that system in accordance with its rules and
procedures and within its established deadlines (European time). The relevant
European international clearing system will, if the transaction meets its
settlement requirements, deliver instructions to the U.S. depositary for that
system to take action to effect final settlement on its behalf by delivering or
receiving interests in global debt securities in DTC, and making or receiving
payment in accordance with normal procedures for same-day funds settlement
applicable to DTC. Cedelbank participants and Euroclear participants may not
deliver instructions directly to DTC.
Because of time-zone differences, credits of interests in global debt securities
received in Cedelbank or Euroclear as a result of a transaction with a DTC
participant will be made during subsequent securities settlement processing and
will be credited the business day following DTC settlement date. Those credits
or any transactions in global debt securities settled during that processing
will be reported to the relevant Euroclear or Cedelbank participants on that
business day. Cash received in Cedelbank or Euroclear as a result of sales of
interests in global debt securities by or through a Cedelbank participant or a
Euroclear participant to a DTC participant will be received with value on DTC
settlement date but will be available in the relevant Cedelbank or Euroclear
cash account only as of the business day following settlement in DTC.
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<PAGE> 24
Although DTC, Cedelbank and Euroclear have agreed to the procedures described
above in order to facilitate transfers of interests in global debt securities
among participants of DTC, Cedelbank and Euroclear, they are under no obligation
to perform those procedures and those procedures may be discontinued at any
time.
DESCRIPTION OF PREFERRED STOCK
GENERAL
Our certificate of incorporation authorizes our board of directors to cause
preferred stock to be issued in one or more series, without stockholder action.
The board of directors is authorized to issue up to 200,000,000 shares of
preferred stock, $1 par value per share, and can determine the number of shares
of each series, and the rights, preference and limitations of each series. We
may amend our certificate of incorporation to increase the number of authorized
shares of preferred stock in a manner permitted by our certificate of
incorporation and the Delaware General Corporation Law. As of the date of this
prospectus, we have five series of preferred stock outstanding, which are
described below under "Outstanding Preferred Stock".
Under regulations adopted by the Federal Reserve Board, if the holders of any
series of our preferred stock become entitled to vote for the election of
directors because dividends on that series are in arrears, that series may then
be deemed a "class of voting securities." In that case, a holder of 25% or more
of the series, or a holder of 5% or more if that holder would also be considered
to exercise a "controlling influence" over Chase, may then be subject to
regulation as a bank holding company in accordance with the Bank Holding Company
Act. In addition, (1) any other bank holding company may be required to obtain
the prior approval of the Federal Reserve Board to acquire or retain 5% or more
of that series, and (2) any person other than a bank holding company may be
required to obtain the approval of the Federal Reserve Board to acquire or
retain 10% or more of that series.
We will describe the particular terms of any series of preferred stock being
offered in the prospectus supplement relating to that series of preferred stock.
Those terms may include:
- the number of shares being offered;
- the title and liquidation preference per share;
- the purchase price;
- the dividend rate or method for determining that rate;
- the dates on which dividends will be paid;
- whether dividends will be cumulative or noncumulative and, if cumulative, the
dates from which dividends will begin to accumulate;
- any applicable redemption or sinking fund provisions;
- any applicable conversion provisions;
- whether we have elected to offer depositary shares with respect to that series
of preferred stock; and
- any additional dividend, liquidation, redemption, sinking fund and other
rights and restrictions applicable to that series of preferred stock.
If the terms of any series of preferred stock being offered differ from the
terms set forth below, we will also disclose those terms in the prospectus
supplement relating to that series of preferred stock. The following summary is
not complete. You should refer to the certificate of designations relating to
the series of the preferred stock being offered for the complete terms of that
preferred stock. We will file that certificate of designations with the SEC
promptly after the offering of the preferred stock.
The preferred stock will, when issued, be fully paid and nonassessable. Unless
otherwise specified in the prospectus supplement, in the event we liquidate,
dissolve or wind-up our business, each series of preferred stock being offered
will have the same rank as to dividends and distributions as our currently
outstanding preferred stock and each other series of preferred stock we may
offer in the future by use of this prospectus. The preferred stock will have no
preemptive rights.
DIVIDEND RIGHTS
If you purchase preferred stock being offered by use of this prospectus and an
applicable prospectus supplement, you will be entitled to receive, when, as and
if declared by our board of directors, cash dividends at the rates and on the
dates set forth in the prospectus supplement. Dividend rates may be fixed or
variable or both. Different series of preferred stock may be entitled to
dividends at
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different dividend rates or based upon different methods of determination. We
will pay each dividend to the holders of record as they appear on our stock
books (or, if applicable, the records of the depositary referred to below under
"-- Depositary Shares") on record dates determined by the board of directors.
Dividends on any series of preferred stock may be cumulative or noncumulative,
as specified in the prospectus supplement. If our board of directors fails to
declare a dividend on any series of preferred stock for which dividends are
noncumulative, then your right to receive that dividend will be lost, and we
will have no obligation to pay the dividend for that dividend period, whether or
not we declare dividends for any future dividend period.
We may not declare or pay any dividend on any series of preferred stock, unless,
for the dividend period commencing after the immediately preceding dividend
payment date, we have previously declared and paid or we contemporaneously
declare and pay full dividends, including cumulative dividends still owing, if
any, on all other series of preferred stock which rank equally with or senior to
that series of preferred stock. If we do not pay the dividends on those equally
and senior ranking series in full, we may only declare dividends pro rata, so
that the amount of dividends declared per share on that series of preferred
stock and on each other equally or senior ranking series of preferred stock will
bear to each other the same ratio that accrued dividends per share on that
series of preferred stock and those other series bear to each other. In
addition, generally, unless we have paid full dividends, including cumulative
dividends still owing, if any, on all outstanding shares of any series of
preferred stock, we may not declare or pay dividends on our common stock and
generally we may not redeem or purchase any common stock. We will not pay
interest or any sum of money in lieu of interest on any dividend payment or
payments that may be in arrears.
We will compute the amount of dividends payable for each dividend period by
annualizing the applicable dividend rate and dividing by the number of dividend
periods in a year, except that the amount of dividends payable for the initial
dividend period or any period shorter than a full dividend period will be
computed on the basis of a 360-day year consisting of twelve 30-day months and,
for any period less than a full month, the actual number of days elapsed in the
period.
RIGHTS UPON LIQUIDATION
In the event we liquidate, dissolve or wind-up our affairs, either voluntarily
or involuntarily, if you purchase preferred stock offered by use of this
prospectus and an applicable prospectus supplement, you will be entitled to
receive liquidating distributions in the amount set forth in the prospectus
supplement, plus accrued and unpaid dividends, if any, before we make any
distribution of assets to the holders of our common stock. If we fail to pay in
full all amounts payable with respect to preferred stock being offered by us and
any stock having the same rank as that series of preferred stock, the holders of
the preferred stock and of that other stock will share in any distribution of
assets in proportion to the full respective preferential amounts to which they
are entitled. After the holders of each series of preferred stock and any stock
having the same rank as the preferred stock are paid in full, they will have no
right or claim to any of our remaining assets. Neither the sale of all or
substantially all of our property or business nor a merger or consolidation by
us with any other corporation will be considered a dissolution, liquidation or
winding-up of our business or affairs.
REDEMPTION
The applicable prospectus supplement will indicate whether the series of
preferred stock being offered is subject to redemption, in whole or in part,
whether at our option or mandatorily and whether or not pursuant to a sinking
fund. The redemption provisions that may apply to a series of preferred stock
being offered, including the redemption dates, the redemption prices for that
series and whether those redemption prices will be paid in cash, stock or a
combination of cash and stock, will be set forth in the prospectus supplement.
If the redemption price is to be paid only from the proceeds of the sale of our
capital stock, the terms of the series of preferred stock may also provide that,
if our capital stock is not sold or if the amount of cash received is
insufficient to pay in full the redemption price then due, the series of
preferred stock will automatically be converted into shares of the applicable
capital stock pursuant to conversion provisions specified in the prospectus
supplement.
If we are redeeming fewer than all the outstanding shares of any series of
preferred stock being
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offered, whether by mandatory or optional redemption, the board of directors
will determine the method for selecting the shares to be redeemed, which may be
by lot or pro rata or by any other method the board of directors determines to
be equitable. From and after the redemption date, dividends will cease to accrue
on the shares of preferred stock called for redemption and all rights of the
holders of those shares, except the right to receive the redemption price, will
cease.
In the event that we fail to pay full dividends, including accrued but unpaid
dividends, if any, on any series of preferred stock being offered, we may not
redeem that series in part and we may not purchase or acquire any shares of that
series of preferred stock, except by an offer made on the same terms to all
holders of that series of preferred stock.
CONVERSION RIGHTS
The prospectus supplement will state the terms, if any, on which shares of a
series of preferred stock being offered are convertible into shares of our
common stock or another series of our preferred stock. As described under
"-- Redemption" above, under certain circumstances, preferred stock may be
mandatorily convertible into our common stock or another series of our preferred
stock.
VOTING RIGHTS
Except as indicated below or in the prospectus supplement, or except as
expressly required by applicable law, the holders of preferred stock being
offered will not be entitled to vote. Except as indicated in the prospectus
supplement, in the event we offer full shares of any series of preferred stock,
each share will be entitled to one vote on matters on which holders of that
series of preferred stock are entitled to vote. However, as more fully described
below under "-- Depositary Shares", if we use this prospectus to offer
depositary shares representing a fraction of a share of a series of preferred
stock, each depositary share, in effect, will be entitled to that fraction of a
vote, rather than a full vote. Because each full share of any series of
preferred stock being offered will be entitled to one vote, the voting power of
that series will depend on the number of shares in that series, and not on the
aggregate liquidation preference or initial offering price of the shares of that
series of preferred stock.
If, at the time of any annual meeting of our stockholders, the equivalent of six
quarterly dividends payable on any series of preferred stock being offered is in
default, the number of directors constituting our board of directors will be
increased by two and the holders of all outstanding series of preferred stock,
voting together as a single class, will be entitled to elect those additional
two directors at that annual meeting. Each director elected by the holders of
shares of the outstanding preferred stock will continue to serve as director for
the full term for which he or she was elected, even if prior to the end of that
term we have paid in full the amount of dividends that had been in arrears. For
purposes of this paragraph, "default" means that accrued and unpaid dividends on
the applicable series are equal to or greater than the equivalent of six
quarterly dividends.
Unless otherwise specified in the prospectus supplement, the terms of each
series of preferred stock being offered will state that the approval of at least
two-thirds of the outstanding shares of preferred stock will be required to:
- create any class or series of stock having a preference over any outstanding
series of preferred stock; or
- change the provisions of our certificate of incorporation in a manner that
would adversely affect the voting powers or other rights of the holders of a
series of preferred stock.
The terms of the preferred stock being offered will also state that if the
amendment will not adversely affect all series of outstanding preferred stock,
then the amendment will only need to be approved by holders of at least
two-thirds of the shares of the series of preferred stock adversely affected.
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OUTSTANDING PREFERRED STOCK
As of the date of this prospectus, we have five series of preferred stock issued
and outstanding, as described in the following table:
<TABLE>
<CAPTION>
STATED VALUE AND NUMBER OUTSTANDING AT EARLIEST RATE IN EFFECT AT
REDEMPTION PRICE OF SEPTEMBER 30, REDEMPTION SEPTEMBER 30,
PER SHARE(A) SHARES 1999 DATE 1999
---------------- ------------- -------------- ---------- -----------------
(IN MILLIONS) (IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Adjustable Rate, Series L
Cumulative...................... $100.00 2.0 $200 6/30/1999 5.040%(b)
Adjustable Rate, Series N
Cumulative.................... 25.00 9.1 228 6/30/1999 5.100(b)
10.96% Cumulative............... 25.00 4.0 100 6/30/2000 10.96
10.84% Cumulative............... 25.00 8.0 200 6/30/2001 10.84
Fixed/Adjustable Rate
Noncumulative................. 50.00 4.0 200 6/30/2003 4.96(c)
</TABLE>
---------------
(a) Redemption price is price indicated in table, plus accrued but unpaid
dividends, if any.
(b) Floating rates are based on certain U.S. Treasury rates. The minimum and
maximum rates are 4.50% and 10.50%, respectively, for each of the Adjustable
Rate, Series L Cumulative Preferred Stock and the Adjustable Rate, Series N
Cumulative Preferred Stock.
(c) Dividends on this series for dividend periods commencing on or after July 1,
2003 will be at a floating rate based on certain U.S. Treasury rates (but
subject to a minimum rate of 5.46% and a maximum rate of 11.46%). The amount
of dividends payable may be adjusted, and the stock may be redeemed earlier
than June 30, 2003, in the event of certain amendments to the Internal
Revenue Code of 1986 relating to the dividends-received deduction.
Ranking. All the outstanding series of preferred stock have the same rank. All
the outstanding series of preferred stock have preference over our common stock
with respect to the payment of dividends and the distribution of assets in the
event of our liquidation or dissolution.
Dividends. Dividends payable on each series of outstanding preferred stock are
payable quarterly, when and as declared by the board of directors, on each March
31, June 30, September 30 and December 31. Dividends on all the outstanding
preferred stock, other than the Fixed/Adjustable Rate Noncumulative Preferred
Stock, are cumulative. If we fail to declare a dividend on the Fixed/ Adjustable
Noncumulative Preferred Stock for any dividend period, holders of that series
will have no right to receive a dividend for that dividend period, whether or
not we declare dividends on that series for any future dividend periods.
Rights Upon Liquidation; Redemption. In the event of our liquidation,
dissolution or winding-up, the holders of each outstanding series of preferred
stock will be entitled to receive liquidating distributions, in the amount set
forth opposite that series in the table above, plus accrued and unpaid
dividends, if any, before any distribution of our assets is made to the holders
of our common stock. Each of the outstanding series of preferred stock is
redeemable at our option at a redemption price per share equal to the redemption
price set forth opposite that series in the table above, plus accrued but unpaid
dividends, if any. In addition, we may redeem the shares of the Fixed/Adjustable
Rate Noncumulative Preferred Stock earlier than June 30, 2003 in the event of
certain amendments to the Internal Revenue Code of 1986 relating to the
dividends-received deduction.
Voting Rights. All currently outstanding series of preferred stock provide that
if, at the time of any annual meeting of our stockholders, the equivalent of six
quarterly dividends payable on any series of outstanding preferred stock is in
default, the number of directors constituting our board of directors will be
increased by two and the holders of all the outstanding preferred stock, voting
together as a single class, will be entitled to elect those additional two
directors at that annual meeting. Each director elected by the holders of shares
of the outstanding preferred stock will continue to serve as director for the
full term for which he or she was elected, even if prior to the end of that term
we have paid in full the amount of dividends that had been in arrears. For
purposes of this paragraph, "default" means that accrued
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and unpaid dividends on the applicable series are equal to or greater than the
equivalent of six quarterly dividends.
Each series of the outstanding preferred stock, other than the 10.96% Cumulative
Preferred Stock and Adjustable Rate, Series L Cumulative Preferred Stock,
provides (and, unless otherwise specified in the prospectus supplement, each
series of preferred stock being offered by use of this prospectus will provide)
that the affirmative vote of the holders of at least two-thirds of the shares of
all outstanding series of preferred stock, voting together as a single class
without regard to series, will be required to:
- create any class or series of stock having a preference over any outstanding
series of preferred stock; or
- change the provisions of our certificate of incorporation in a manner that
would adversely affect the voting powers or other rights of the holders of a
series of preferred stock.
Those series of preferred stock also state that if the amendment will not
adversely affect all series of outstanding preferred stock, then the amendment
will only need to be approved by holders of at least two-thirds of the shares of
the series of preferred stock adversely affected.
The 10.96% Cumulative Preferred Stock and the Adjustable Rate, Series L
Cumulative Preferred Stock each provide as follows:
- the consent of holders of at least two-thirds of the outstanding shares of the
particular series, voting as a separate class, is required for any amendment
of our certificate of incorporation that would adversely affect the powers,
preferences, privileges or rights of that series; and
- the consent of the holders of at least two-thirds of the voting power of that
series and each other series of preferred stock having the same rank, voting
together as a single class without regard to series, is required to create,
authorize, issue, or reclassify any stock into, any additional class or series
of stock ranking prior to that series as to dividends or upon liquidation, or
any other security or obligation convertible into or exercisable for any such
prior-ranking stock.
Miscellaneous. No series of outstanding preferred stock is convertible into
shares of our common stock or other securities of Chase. No series of
outstanding preferred stock is subject to preemptive rights.
TRANSFER AGENT AND REGISTRAR
ChaseMellon Shareholder Services, L.L.C. will be the transfer agent, registrar
and dividend disbursement agent for any preferred stock or depositary shares
being offered by use of this prospectus. The registrar for the preferred stock
will send notices to the holders of the preferred stock of any meetings at which
those holders will have the right to elect directors or to vote on any other
matter.
DEPOSITARY SHARES
General. We may, at our option, elect to offer fractional shares of preferred
stock, rather than full shares of preferred stock. If we do, we will issue to
the public receipts for depositary shares, and each of these depositary shares
will represent a fraction of a share of a particular series of preferred stock.
We will specify that fraction in the prospectus supplement.
The shares of any series of preferred stock underlying the depositary shares
will be deposited under a deposit agreement between us and a depositary selected
by us. The depositary will be a bank or trust company and will have its
principal office in the United States and a combined capital and surplus of at
least $50,000,000. Subject to the terms of the deposit agreement, each owner of
a depositary share will be entitled, in proportion to the applicable fractional
interest in shares of preferred stock underlying that depositary share, to all
the rights and preferences of the preferred stock underlying that depositary
share. Those rights include dividend, voting, redemption, conversion and
liquidation rights.
The depositary shares will be evidenced by depositary receipts issued under the
deposit agreement. We will issue depositary receipts to those persons who
purchase the fractional interests in the preferred stock underlying the
depositary shares, in accordance with the terms of the offering. The following
summary of the deposit agreement, the depositary shares and the depositary
receipts is not complete. You should refer to the forms of the deposit agreement
and depositary receipts that are filed as exhibits to the registration
statement.
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Dividends and Other Distributions. The depositary will distribute all cash
dividends or other cash distributions received in respect of the preferred stock
to the record holders of related depositary shares in proportion to the number
of depositary shares owned by those holders.
If we make a distribution other than in cash, the depositary will distribute
property received by it to the record holders of depositary shares that are
entitled to receive the distribution, unless the depositary determines that it
is not feasible to make the distribution. If this occurs, the depositary may,
with our approval, sell the property and distribute the net proceeds from the
sale to the applicable holders.
Redemption of Depositary Shares. Whenever we redeem shares of preferred stock
that are held by the depositary, the depositary will redeem, as of the same
redemption date, the number of depositary shares representing the shares of
preferred stock so redeemed. The redemption price per depositary share will be
equal to the applicable fraction of the redemption price per share payable with
respect to that series of the preferred stock. If fewer than all the depositary
shares are to be redeemed, the depositary will select the depositary shares to
be redeemed by lot or pro rata as determined by the depositary.
Depositary shares called for redemption will no longer be outstanding after the
applicable redemption date, and all rights of the holders of those depositary
shares will cease, except the right to receive any money, securities, or other
property upon surrender to the depositary of the depositary receipts evidencing
those depositary shares.
Voting the Preferred Stock. Upon receipt of notice of any meeting at which the
holders of preferred stock are entitled to vote, the depositary will mail the
information contained in the notice of meeting to the record holders of the
depositary shares underlying that preferred stock. Each record holder of those
depositary shares on the record date, which will be the same date as the record
date for the preferred stock, will be entitled to instruct the depositary as to
the exercise of the voting rights pertaining to the amount of the preferred
stock underlying that holder's depositary shares. The depositary will try, as
far as practicable, to vote the number of shares of preferred stock underlying
those depositary shares in accordance with those instructions, and we will agree
to take all action that the depositary deems necessary in order to enable the
depositary to do so. The depositary will not vote the shares of preferred stock
to the extent it does not receive specific instructions from the holders of
depositary shares underlying the preferred stock.
Amendment and Termination of the Deposit Agreement. We and the depositary may
amend the form of depositary receipt evidencing the depositary shares and any
provision of the deposit agreement at any time. However, any amendment that
materially and adversely alters the rights of the holders of depositary shares
will not be effective unless the amendment has been approved by the holders of
at least a majority of the depositary shares then outstanding. The deposit
agreement may be terminated by us or by the depositary only if (1) all
outstanding depositary shares have been redeemed or (2) there has been a final
distribution of the underlying preferred stock in connection with our
liquidation, dissolution or winding up and the preferred stock has been
distributed to the holders of depositary receipts.
Charges of Depositary. We will pay all transfer and other taxes and
governmental charges arising solely from the existence of the depositary
arrangements. We will also pay charges of the depositary in connection with the
initial deposit of the preferred stock and any redemption of the preferred
stock. Holders of depositary receipts will pay other transfer and other taxes
and governmental charges and such other charges, including a fee for the
withdrawal of shares of preferred stock upon surrender of depositary receipts,
as are expressly provided in the deposit agreement to be for their accounts.
Resignation and Removal of Depositary. The depositary may resign at any time by
delivering a notice to us of its election to do so. We may remove the depositary
at any time. Any such resignation or removal will take effect upon the
appointment of a successor depositary and its acceptance of its appointment. We
must appoint a successor depositary within 60 days after delivery of the notice
of resignation or removal. The successor depositary must be a bank or trust
company having its principal office in the United States and having a combined
capital and surplus of at least $50,000,000.
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Miscellaneous. The depositary will forward to holders of depository receipts
all reports and communications from us that we deliver to the depositary and
that we are required to furnish to the holders of the preferred stock.
Neither we nor the depositary will be liable if either of us is prevented or
delayed by law or any circumstance beyond our control in performing our
respective obligations under the deposit agreement. Our obligations and those of
the depositary will be limited to performing in good faith our respective duties
under the deposit agreement. Neither we nor the depositary will be obligated to
prosecute or defend any legal proceeding relating to any depositary shares or
preferred stock unless satisfactory indemnity is furnished. We and the
depositary may rely upon written advice of counsel or accountants, or upon
information provided by persons presenting preferred stock for deposit, holders
of depositary receipts or other persons we believe to be competent and on
documents we believe to be genuine.
PERMANENT GLOBAL PREFERRED SECURITIES
We may issue certain series of the preferred stock or depositary shares as
permanent global securities and deposit them with a depositary with respect to
that series. Unless otherwise indicated in the prospectus supplement, the
following is a summary of the depositary arrangements applicable to preferred
stock or depositary receipts issued in permanent global form and for which DTC
acts as the depositary ("global preferred securities").
Each global preferred security will be deposited with, or on behalf of, DTC or
its nominee and registered in the name of a nominee of DTC. Except under the
limited circumstances described below, global preferred securities are not
exchangeable for definitive, certificated preferred stock or depositary
receipts.
Only DTC's participants or persons that may hold interests through those
participants may own beneficial interests in a global preferred security. DTC
will maintain records reflecting ownership of beneficial interests by
participants in the global preferred securities and transfers of those
interests. Participants will maintain records evidencing ownership of beneficial
interests in the global preferred securities by persons that hold through those
participants and transfers of those interests within those participants. DTC has
no knowledge of the actual beneficial owners of the preferred stock or
depositary shares, as the case may be, represented by a global preferred
security. You will not receive written confirmation from DTC of your purchase of
a beneficial interest in a global preferred security, but we do expect that you
will receive written confirmations providing details of the transaction, as well
as periodic statements of your holdings, from the participants through which you
entered the transaction. The laws of some jurisdictions require that certain
purchasers of securities take physical delivery of those securities in
definitive, certificated form. Those laws may impair your ability to transfer
beneficial interests in a global preferred security.
DTC has advised us that upon the issuance of a global preferred security and the
deposit of that global preferred security with DTC, DTC will immediately credit,
on its book-entry registration and transfer system, the respective number of
shares represented by that global preferred security to the accounts of its
participants.
We will make payments on preferred stock and depositary shares represented by a
global preferred security to DTC or its nominee, as the case may be, as the
registered owner and holder of the global preferred security representing the
preferred stock or depositary shares. DTC has advised us that upon receipt of
any payment on a global preferred security, DTC will immediately credit accounts
of participants with payments in amounts proportionate to their respective
beneficial interests in that global preferred security, as shown in the records
of DTC. Standing instructions and customary practices will govern payments by
participants to owners of beneficial interests in a global preferred security
held through those participants, as is now the case with securities held for the
accounts of customers in bearer form or registered in "street name". Those
payments will be the sole responsibility of those participants, subject to any
statutory or regulatory requirements in effect from time to time.
Neither we nor any of our agents will be responsible for any aspect of the
records of DTC, any nominee or any participant relating to, or payments made on
account of, beneficial interests in a global preferred security or for
maintaining, supervising or reviewing any of the records of DTC, any nominee or
any participant relating to those beneficial interests.
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A global preferred security is exchangeable for definitive certificated
preferred stock or depositary receipts, as the case may be, registered in the
name of a person other than DTC or its nominee, only if:
(a) DTC notifies us that it is unwilling or unable to continue as
depositary for the global preferred security or DTC ceases to be registered
under the Securities Exchange Act of 1934; or
(b) We determine in our discretion that the global preferred security
will be exchangeable for definitive preferred stock or depositary receipts,
as the case may be, in registered form.
Any global preferred security that is exchangeable as described in the preceding
sentence will be exchangeable in whole for definitive, certificated preferred
stock or depositary receipts, as the case may be, registered by the registrar in
the name or names instructed by DTC. We expect that those instructions may be
based upon directions received by DTC from its participants with respect to
ownership of beneficial interests in that global preferred security.
Except as provided above, as an owner of a beneficial interest in a global
preferred security, you will not be entitled to receive physical delivery of
certificates representing shares of preferred stock or depositary shares, as the
case may be, and will not be considered the holder of preferred stock or
depositary shares, as the case may be. No global preferred security will be
exchangeable except for another global preferred security to be registered in
the name of DTC or its nominee. Accordingly, you must rely on the procedures of
DTC and the participant through which you own your interest to exercise any
rights of a holder of preferred stock or depositary shares, as the case may be.
We understand that, under existing industry practices, in the event that we
request any action of holders, or an owner of a beneficial interest in a global
preferred security desires to take any action that a holder of preferred stock
or depositary shares, as the case may be, is entitled to take, DTC would
authorize the participants holding the relevant beneficial interests to take
that action and those participants would authorize beneficial owners owning
through those participants to take that action or would otherwise act upon the
instructions of beneficial owners owning through them.
DESCRIPTION OF COMMON STOCK
As of the date of this prospectus, we are authorized to issue up to
1,500,000,000 shares of common stock. As of September 30, 1999, we had
881,862,887 shares of common stock issued (including 58,646,535 shares held in
treasury) and had reserved approximately 111,135,369 shares of common stock for
issuance under various employee or director incentive, compensation and option
plans.
The following summary is not complete. You should refer to the applicable
provisions of our certificate of incorporation, including the certificates of
designations for our outstanding series of preferred stock, and to the Delaware
General Corporation Law for a complete statement of the terms and rights of the
common stock.
Dividends. Holders of common stock are entitled to receive dividends when, as
and if declared by our board of directors, out of funds legally available for
their payment, subject to the rights of holders of the preferred stock.
Voting Rights. Each holder of common stock is entitled to one vote per share.
Subject to the rights, if any, of the holders of any series of preferred stock
pursuant to applicable law or the provisions of the certificate of designations
creating that series, all voting rights are vested in the holders of our common
stock. 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 the holders of the remaining
shares will not be able to elect any directors.
Rights Upon Liquidation. In the event of our voluntary or involuntary
liquidation, dissolution or winding up, the holders of common stock will be
entitled to share equally in any of our assets available for distribution after
we have paid in full all of our debts and distributions and the full liquidation
preferences of all series of our outstanding preferred stock.
Miscellaneous. The issued and outstanding shares of common stock are fully paid
and nonassessable. Holders of shares of common stock
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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.
DESCRIPTION OF SECURITIES WARRANTS
We may issue securities warrants for the purchase of debt securities, preferred
stock or common stock. We may issue securities warrants independently or
together with debt securities, preferred stock, common stock or other
securities. Each series of securities warrants will be issued under a separate
securities warrant agreement to be entered into between us and the Bank or
another bank or trust company, as warrant agent. The warrant agent will act
solely as our agent in connection with the securities warrants and will not
assume any obligation to, or relationship of agency or trust for or with, any
registered holders or beneficial owners of securities warrants. This summary of
certain provisions of the securities warrants and the securities warrant
agreement is not complete. You should refer to the securities warrant agreement
relating to the specific securities warrants being offered, including the forms
of securities warrant certificate representing those securities warrants, for
the complete terms of the securities warrant agreement and the securities
warrants. We will file that securities warrant agreement, together with the form
of securities warrants, with the SEC promptly after the offering of the specific
securities warrants.
Each securities warrant will entitle the holder to purchase the principal amount
of debt securities or the number of shares of preferred stock or common stock at
the exercise price set forth in, or calculable as set forth in, the prospectus
supplement. The exercise price may be subject to adjustment upon the occurrence
of certain events, as set forth in the prospectus supplement. After the close of
business on the expiration date of the securities warrants, unexercised
securities warrants will become void. We will also specify in the prospectus
supplement the place or places where, and the manner in which, securities
warrants may be exercised.
Prior to the exercise of any securities warrants, holders of the securities
warrants will not have any of the rights of holders of the debt securities,
preferred stock or common stock, as the case may be, purchasable upon exercise
of those securities warrants, including, (1) in the case of securities warrants
for the purchase of debt securities, the right to receive payments of principal
of, and premium, if any, or interest, if any, on those debt securities or to
enforce covenants in the applicable indenture, or (2) in the case of securities
warrants for the purchase of preferred stock or common stock, the right to
receive payments of dividends, if any, on that preferred stock or common stock
or to exercise any applicable right to vote.
DESCRIPTION OF CURRENCY WARRANTS
We have described below certain general terms and provisions of the currency
warrants that we may offer. We will describe the particular terms of the
currency warrants and the extent, if any, to which general provisions described
below do not apply to the currency warrants offered in the prospectus
supplement. The following summary is not complete. You should refer to the
currency warrants and the currency warrant agreement relating to the specific
currency warrants being offered for the complete terms of those currency
warrants. We will file the form of currency warrants and currency warrant
agreement with the SEC promptly after the offering of the specific currency
warrants.
We will issue each issue of currency warrants under a currency warrant agreement
to be entered into between us and the Bank or another bank or trust company, as
warrant agent. The warrant agent will act solely as our agent under the
applicable currency warrant agreement and will not assume any obligation to, or
relationship of agency or trust for or with, any holders of currency warrants.
We may issue currency warrants either in the form of:
- currency put warrants, which entitle the holders to receive from us 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; or
- currency call warrants, which entitle the holders to receive from us the cash
settlement value in U.S. dollars of the right to purchase a specified
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amount of a designated currency for a specified amount of U.S. dollars.
As a prospective purchaser of currency warrants, you should be aware of special
United States Federal income tax considerations applicable to instruments such
as the currency warrants. The prospectus supplement relating to each issue of
currency warrants will describe those tax considerations.
Unless otherwise specified in the applicable prospectus supplement, we will
issue the currency warrants 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 the 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 that 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
that issue of currency warrants. In the event that the currency warrants are
delisted from, or permanently suspended from trading on, the applicable national
securities exchange, the expiration date for those currency warrants will be the
date the delisting or trading suspension becomes effective, and currency
warrants not previously exercised will be deemed automatically exercised on that
expiration date. The applicable currency warrant agreement will contain a
covenant from us that we will not seek to delist the currency warrants or
suspend their trading on the applicable national securities exchange unless we
have concurrently arranged for listing on another national securities exchange.
Currency warrants involve a high degree of risk, including risks arising from
fluctuations in the price of the underlying currency, foreign exchange risks and
the risk that the currency warrants will expire worthless. Further, the cash
settlement value of currency warrants at any time prior to exercise or
expiration may be less than the trading value of the currency warrants. The
trading value of the currency warrants will fluctuate because that value is
dependent, at any time, on a number of factors, including the time remaining to
exercise the currency warrants, the relationship between the exercise price of
the currency warrants and the price of the designated currency, and the exchange
rate associated with the designated currency. Because currency warrants are
unsecured obligations of Chase, changes in our perceived creditworthiness may
also be expected to affect the trading prices of 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 you give
instructions to exercise the currency warrant and the time the exercise is
actually effected.
As a prospective purchaser of currency warrants you should be prepared to
sustain a loss of some or all of the purchase price of your currency warrants.
You should also be experienced with respect to options and option transactions
and should reach an investment decision only after careful consideration with
your advisers of the suitability of the currency warrants in light of your
particular financial circumstances. You should also consider the information set
forth under "Risk Factors" in the prospectus supplement relating to the
particular issue of currency warrants and to the other information regarding the
currency warrants and the designated currency set forth in the prospectus
supplement.
PLAN OF DISTRIBUTION
We may sell the debt securities, preferred stock, depositary shares, common
stock, securities warrants or currency warrants being offered by use of this
prospectus:
- through underwriters;
- through dealers;
- through agents; or
- directly to purchasers.
We will set forth the terms of the offering of any securities being offered in
the applicable prospectus supplement.
If we utilize underwriters in an offering of securities using this prospectus,
we will execute an underwriting agreement with those underwriters. The
underwriting agreement will provide that the
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obligations of the underwriters with respect to a sale of the offered securities
are subject to certain conditions precedent and that the underwriters will be
obligated to purchase all the offered securities if any are purchased.
Underwriters may sell those securities to or through dealers. The underwriters
may change any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers from time to time. If we utilize
underwriters in an offering of securities using this prospectus, the applicable
prospectus supplement will contain a statement regarding the intention, if any,
of the underwriters to make a market in the offered securities.
If we utilize a dealer in an offering of securities using this prospectus, we
will sell the offered securities to the dealer, as principal. The dealer may
then resell those securities to the public at a fixed price or at varying prices
to be determined by the dealer at the time of resale.
We may also use this prospectus to offer and sell securities through agents
designated by us from time to time. Unless otherwise indicated in the prospectus
supplement, any agent will be acting on a reasonable efforts basis for the
period of its appointment.
Underwriters, dealers or agents participating in a distribution of securities by
use of this prospectus may be deemed to be underwriters, and any discounts and
commissions received by them and any profit realized by them on resale of the
offered securities, whether received from us or from purchasers of offered
securities for whom they act as agent, may be deemed to be underwriting
discounts and commissions under the Securities Act.
Under agreements that we may enter into, underwriters, dealers or agents who
participate in the distribution of securities by use of this prospectus may be
entitled to indemnification by us against certain liabilities, including
liabilities under the Securities Act, or to contribution with respect to
payments that those underwriters, dealers or agents may be required to make.
We may offer to sell securities either at a fixed price or prices which may be
changed, at market prices prevailing at the time of sale, at prices related to
prevailing market prices or at negotiated prices.
Underwriters, dealers, agents or their affiliates may be customers of, engage in
transactions with, or perform services for, us, the Bank, Chase USA, CSI or our
other subsidiaries in the ordinary course of business.
Under Rule 2720 of the Conduct Rules of the NASD, when an NASD member, such as
CSI, participates in the distribution of an affiliated company's securities, the
offering must be conducted in accordance with the applicable provisions of Rule
2720. CSI is considered to be an "affiliate" (as that term is defined in Rule
2720) of ours by virtue of the fact that we own directly or indirectly all of
the outstanding equity securities of CSI. Any offer and sale of offered
securities will comply with the requirements of Rule 2720 regarding the
underwriting of securities of affiliates and with any restrictions that may be
imposed on CSI or our other affiliates by the Federal Reserve Board.
Our direct or indirect wholly-owned subsidiaries, including CSI, may use this
prospectus and the related prospectus supplement in connection with offers and
sales of securities in the secondary market. Those subsidiaries may act as
principal or agent in those transactions. Secondary market sales will be made at
prices related to prevailing market prices at the time of sale.
We may also use this prospectus to directly solicit offers to purchase
securities. Except as set forth in the applicable prospectus supplement, none of
our directors, officers, or employees nor those of our bank subsidiaries will
solicit or receive a commission in connection with those direct sales. Those
persons may respond to inquiries by potential purchasers and perform ministerial
and clerical work in connection with direct sales.
We may authorize underwriters, dealers and agents to solicit offers by certain
institutions to purchase securities pursuant to delayed delivery contracts
providing for payment and delivery on a future date specified in the prospectus
supplement. Institutions with which delayed delivery contracts may be made
include commercial and savings banks, insurance companies, educational and
charitable institutions and other institutions we may approve. The obligations
of any purchaser under any delayed delivery contract will not be subject to any
conditions except that any related sale of offered securities to underwriters
shall have occurred and the purchase by an institution of the
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securities covered by its delayed delivery contract shall not at the time of
delivery be prohibited under the laws of any jurisdiction in the United States
to which that institution is subject.
EXPERTS
The audited financial statements incorporated in this prospectus by reference to
our Annual Report on Form 10-K for the year ended December 31, 1998 have been
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of that firm as experts in
auditing and accounting.
LEGAL OPINIONS
Simpson Thacher & Bartlett, New York, New York, will provide an opinion for us
regarding the validity of the offered securities and Cravath, Swaine & Moore,
New York, New York will provide such an opinion for the underwriters. Cravath,
Swaine & Moore acts as legal counsel to us and our subsidiaries in a substantial
number of matters on a regular basis.
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